WRL Series Annuity Account
Annual Report
December 31, 1997
Western Reserve Life Assurance
Co. of Ohio
February 1998
ACC00002 (2/98)
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
----------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Western Reserve Life Assurance Co. of Ohio and
Contract Owners of the WRL Series Annuity Account--WRL Freedom Variable Annuity
and WRL Freedom Attainer Contracts
In our opinion, the accompanying statements of assets, liabilities and equity
accounts and the related statements of operations and of changes in equity
accounts and the selected per unit data and ratios present fairly, in all
material respects, the financial position of each of the Sub-Accounts
constituting the WRL Freedom Variable Annuity and WRL Freedom Attainer Contracts
of the WRL Series Annuity Account (a separate account of Western Reserve Life
Assurance Co. of Ohio, hereafter referred to as the "Annuity Account") at
December 31, 1997, the results of each of their operations, the changes in each
of their equity accounts and the selected per unit data and ratios for each of
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and selected per unit data and ratios
(hereafter referred to as "financial statements") are the responsibility of the
Annuity Account's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Kansas City, Missouri
January 30, 1998
1 9 9 7 A n n u a l R e p o r t
1
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
----------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Western Reserve Life Assurance Co. of Ohio and
Contract Owners of the WRL Series Annuity Account--WRL Freedom Bellwether, WRL
Freedom Conqueror, and WRL Freedom Wealth Creator Contracts
In our opinion, the accompanying statements of assets, liabilities and equity
accounts and the related statements of operations and of changes in equity
accounts and the selected per unit data and ratios present fairly, in all
material respects, the financial position of each of the Sub-Accounts
constituting the WRL Freedom Bellwether, WRL Freedom Conqueror and WRL Freedom
Wealth Creator Contracts of the WRL Series Annuity Account (a separate account
of Western Reserve Life Assurance Co. of Ohio, hereafter referred to as the
"Annuity Account") at December 31, 1997, the results of each of their
operations, the changes in each of their equity accounts and the selected per
unit data and ratios for each of the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
selected per unit data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Annuity Account's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Kansas City, Missouri
January 30, 1998
2
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
WRL SERIES ANNUITY ACCOUNT
Reports of Independent Accountants ............................ 1
FREEDOM AND ATTAINER
Statements of Assets, Liabilities and Equity Accounts ......... 4
Statements of Operations ...................................... 6
Statements of Changes in Equity Accounts ...................... 8
Selected Per Unit Data and Ratios ............................. 11
Notes to Financial Statements ................................. 16
BELLWETHER, CONQUEROR, AND CREATOR
Statements of Assets, Liabilities and Equity Accounts ......... 20
Statements of Operations ...................................... 22
Statements of Changes in Equity Accounts ...................... 24
Selected Per Unit Data and Ratios ............................. 27
Notes to Financial Statements ................................. 32
</TABLE>
1 9 9 7 A n n u a l R e p o r t
3
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At December 31, 1997
All amounts (except unit value, units and shares) in thousands
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 39,405,597 4,137,165 15,514,940
================= ================= ==================
Cost .................................. $ 39,406 $ 45,465 $ 450,230
================= ================= ==================
Investments at net asset value ......... $ 39,406 $ 46,097 $ 571,636
Accrued transfers from depositor ....... 125 0 0
----------------- ----------------- ------------------
Total assets .......................... 39,531 46,097 571,636
----------------- ----------------- ------------------
LIABILITIES:
Accrued transfers to depositor ......... 0 15 180
----------------- ----------------- ------------------
Net assets ............................ $ 39,531 $ 46,082 $ 571,456
================= ================= ==================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................. 2,860,806.230777 2,360,470.224753 14,841,891.071521
================= ================= ==================
Unit value ............................ $ 13.818196 $ 19.522492 $ 38.502879
================= ================= ==================
Contract Owners' equity ............... $ 39,531 $ 46,082 $ 571,456
----------------- ----------------- ------------------
Depositor's equity:
Units ................................. N/A N/A N/A
================= ================= ==================
Unit value ............................ $ N/A $ N/A $ N/A
================= ================= ==================
Depositor's equity .................... $ N/A $ N/A $ N/A
----------------- ----------------- ------------------
Total equity .......................... $ 39,531 $ 46,082 $ 571,456
================= ================= ==================
</TABLE>
<TABLE>
<CAPTION>
GLOBAL
SUB-ACCOUNT
<S> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 13,746,466
==================
Cost .................................. $ 222,361
==================
Investments at net asset value ......... $ 261,778
Accrued transfers from depositor ....... 0
------------------
Total assets .......................... 261,778
------------------
LIABILITIES:
Accrued transfers to depositor ......... 461
------------------
Net assets ............................ $ 261,317
==================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................. 10,843,759.264963
==================
Unit value ............................ $ 24.098423
==================
Contract Owners' equity ............... $ 261,317
------------------
Depositor's equity:
Units ................................. N/A
==================
Unit value ............................ $ N/A
==================
Depositor's equity .................... $ N/A
------------------
Total equity .......................... $ 261,317
==================
<CAPTION>
STRATEGIC
TOTAL RETURN EMERGING GROWTH AGGRESSIVE GROWTH
SUB-ACCOUNT (A) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 10,495,823 8,127,101 4,650,806
================= ================= =================
Cost .................................. $ 130,138 $ 126,606 $ 68,273
================= ================= =================
Investments at net asset value ......... $ 163,993 $ 165,529 $ 74,621
Accrued transfers from depositor ....... 266 319 0
----------------- ----------------- -----------------
Total assets .......................... 164,259 165,848 74,621
----------------- ----------------- -----------------
LIABILITIES:
Accrued transfers to depositor ......... 0 0 77
----------------- ----------------- -----------------
Net assets ............................ $ 164,259 $ 165,848 $ 74,544
================= ================= =================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................. 8,830,826.575966 7,179,789.683171 4,172,912.462699
================= ================= =================
Unit value ............................ $ 18.600662 $ 23.099337 $ 17.863734
================= ================= =================
Contract Owners' equity ............... $ 164,259 $ 165,848 $ 74,544
----------------- ----------------- -----------------
Depositor's equity:
Units ................................. N/A N/A N/A
================= ================= =================
Unit value ............................ $ N/A $ N/A $ N/A
================= ================= =================
Depositor's equity .................... $ N/A $ N/A $ N/A
----------------- ----------------- -----------------
Total equity .......................... $ 164,259 $ 165,848 $ 74,544
================= ================= =================
</TABLE>
The notes to the financial statements are an integral part of this report.
4
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At December 31, 1997
All amounts (except unit value, units and shares) in thousands
----------------------------------
<TABLE>
<CAPTION>
GROWTH & TACTICAL ASSET
BALANCED INCOME ALLOCATION C.A.S.E. GROWTH
SUB-ACCOUNT SUB-ACCOUNT (B) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 1,446,665 1,103,879 5,717,078 1,239,030
================= =============== ================= =================
Cost .................................. $ 15,867 $ 13,190 $ 69,277 $ 18,396
================= =============== ================= =================
Investments at net asset value ......... $ 17,373 $ 13,862 $ 77,827 $ 17,359
Accrued transfers from depositor ....... 0 194 96 318
----------------- --------------- ----------------- -----------------
Total assets .......................... 17,373 14,056 77,923 17,677
----------------- --------------- ----------------- -----------------
LIABILITIES:
Accrued transfers to depositor .......... 49 0 0 0
----------------- --------------- ----------------- -----------------
Net assets ............................ $ 17,324 $ 14,056 $ 77,923 $ 17,677
================= =============== ================= =================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................. 1,238,709.131717 884,769.379950 5,049,374.089329 1,120,895.670619
================= =============== ================= =================
Unit value ............................ $ 13.985778 $ 15.886539 $ 15.432237 $ 15.770687
================= =============== ================= =================
Contract Owners' equity ............... $ 17,324 $ 14,056 $ 77,923 $ 17,677
----------------- --------------- ----------------- -----------------
Depositor's equity:
Units ................................. N/A N/A N/A N/A
================= =============== ================= =================
Unit value ............................ $ N/A $ N/A $ N/A $ N/A
================= =============== ================= =================
Depositor's equity .................... $ N/A $ N/A $ N/A $ N/A
----------------- --------------- ----------------- -----------------
Total equity .......................... $ 17,324 $ 14,056 $ 77,923 $ 17,677
================= =============== ================= =================
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL U.S.
GLOBAL SECTOR VALUE EQUITY EQUITY EQUITY
SUB-ACCOUNT (C) SUB-ACCOUNT SUB-ACCOUNT (D) SUB-ACCOUNT (D)
<S> <C> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares .................................. 227,753 3,551,418 595,288 1,026,410
================ ================= ================ ================
Cost .................................... $ 2,427 $ 43,068 $ 6,474 $ 12,600
================ ================= ================ ================
Investments at net asset value ........... $ 2,361 $ 49,382 $ 6,372 $ 12,558
Accrued transfers from depositor ......... 0 0 5 0
---------------- ----------------- ---------------- ----------------
Total assets ............................ 2,361 49,382 6,377 12,558
---------------- ----------------- ---------------- ----------------
LIABILITIES:
Accrued transfers to depositor ........... 0 6 0 181
---------------- ----------------- ---------------- ----------------
Net assets .............................. $ 2,361 $ 49,376 $ 6,377 $ 12,377
================ ================= ================ ================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................... 169,725.641082 3,562,149.020767 570,632.722441 971,655.344974
================ ================= ================ ================
Unit value .............................. $ 10.745418 $ 13.861249 $ 10.616583 $ 12.544316
================ ================= ================ ================
Contract Owners' equity ................. $ 1,824 $ 49,376 $ 6,058 $ 12,189
---------------- ----------------- ---------------- ----------------
Depositor's equity:
Units ................................... 49,997.602730 N/A 30,000.000000 15,000.000000
================ ================= ================ ================
Unit value .............................. $ 10.745418 $ N/A $ 10.616583 $ 12.544316
================ ================= ================ ================
Depositor's equity ...................... $ 537 $ N/A $ 319 $ 188
---------------- ----------------- ---------------- ----------------
Total equity ............................ $ 2,361 $ 49,376 $ 6,377 $ 12,377
================ ================= ================ ================
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
(d) The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
5
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
STATEMENT OF OPERATIONS
For the year ended December 31, 1997
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ............................................................ $ 2,524 $ 2,098 $ 3,949
Capital gain distributions ................................................. 0 0 57,909
-------- -------- --------
2,524 2,098 61,858
EXPENSES:
Mortality and expense risk ................................................. 610 504 7,280
-------- -------- --------
Net investment income (loss) .............................................. 1,914 1,594 54,578
-------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ...................... 0 (1,439) 40,068
Change in unrealized appreciation (depreciation) ........................... 0 2,760 (8,813)
-------- -------- --------
Net gain (loss) on investments ............................................ 0 1,321 31,255
-------- -------- --------
Net increase (decrease) in equity accounts resulting from operations ..... $ 1,914 $ 2,915 $ 85,833
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL
SUB-ACCOUNT
<S> <C>
INVESTMENT INCOME:
Dividend income ............................................................. $ 14,850
Capital gain distributions .................................................. 16,769
---------
31,619
EXPENSES:
Mortality and expense risk .................................................. 3,219
---------
Net investment income (loss) ............................................... 28,400
---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ...................... 11,173
Change in unrealized appreciation (depreciation) ........................... 147
---------
Net gain (loss) on investments ............................................ 11,320
---------
Net increase (decrease) in equity accounts resulting from operations ..... $ 39,720
=========
<CAPTION>
STRATEGIC EMERGING AGGRESSIVE
TOTAL RETURN GROWTH GROWTH
SUB-ACCOUNT (A) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ............................................................. $ 3,871 $ 0 $ 1,918
Capital gain distributions .................................................. 9,977 15,287 4,915
-------- -------- --------
13,848 15,287 6,833
EXPENSES:
Mortality and expense risk .................................................. 1,905 1,912 874
-------- -------- --------
Net investment income (loss) ............................................... 11,943 13,375 5,959
-------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ...................... 3,798 10,326 2,785
Change in unrealized appreciation (depreciation) ........................... 12,227 3,660 4,753
-------- -------- --------
Net gain (loss) on investments ............................................ 16,025 13,986 7,538
-------- -------- --------
Net increase (decrease) in equity accounts resulting from operations ..... $ 27,968 $ 27,361 $ 13,497
======== ======== ========
</TABLE>
The notes to the financial statements are an integral part of this report.
6
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
STATEMENT OF OPERATIONS
For the year or period ended December 31, 1997
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
GROWTH &
BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT (B)
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ............................................................. $ 899 $ 1,039
Capital gain distributions .................................................. 861 961
------- --------
1,760 2,000
EXPENSES:
Mortality and expense risk .................................................. 195 155
------- --------
Net investment income (loss) ............................................... 1,565 1,845
------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ...................... 570 802
Change in unrealized appreciation (depreciation) ........................... 91 (83)
------- --------
Net gain (loss) on investments ............................................ 661 719
------- --------
Net increase (decrease) in equity accounts resulting from operations ..... $ 2,226 $ 2,564
======= ========
<CAPTION>
TACTICAL ASSET
ALLOCATION C.A.S.E. GROWTH
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ............................................................. $ 2,846 $ 1,427
Capital gain distributions .................................................. 2,948 70
-------- --------
5,794 1,497
EXPENSES:
Mortality and expense risk .................................................. 878 85
-------- --------
Net investment income (loss) ............................................... 4,916 1,412
-------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ...................... 1,965 545
Change in unrealized appreciation (depreciation) ........................... 2,950 (1,258)
-------- --------
Net gain (loss) on investments ............................................ 4,915 (713)
-------- --------
Net increase (decrease) in equity accounts resulting from operations ..... $ 9,831 $ 699
======== ========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SECTOR VALUE EQUITY
SUB-ACCOUNT (C) SUB-ACCOUNT
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ........................................................ $ 111 $ 544
Capital gain distributions ............................................. 9 85
------ -------
120 629
EXPENSES:
Mortality and expense risk ............................................. 31 437
------ -------
Net investment income (loss) .......................................... 89 192
------ -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................. 124 1,235
Change in unrealized appreciation (depreciation) ...................... (149) 5,135
------ -------
Net gain (loss) on investments ....................................... (25) 6,370
------ -------
Net increase (decrease) in equity accounts resulting from operations $ 64 $ 6,562
====== =======
<CAPTION>
INTERNATIONAL
EQUITY U.S. EQUITY
SUB-ACCOUNT (D) SUB-ACCOUNT (D)
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ........................................................ $ 27 $ 419
Capital gain distributions ............................................. 0 40
------ ------
27 459
EXPENSES:
Mortality and expense risk ............................................. 47 75
------ ------
Net investment income (loss) .......................................... (20) 384
------ ------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................. 48 640
Change in unrealized appreciation (depreciation) ...................... (102) (42)
------ ------
Net gain (loss) on investments ....................................... (54) 598
------ ------
Net increase (decrease) in equity accounts resulting from operations $ (74) $ 982
====== ======
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
(d) The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
7
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year ended
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
------------------------ -----------------------
1997 1996 1997 1996
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 1,914 $ 1,736 $ 1,594 $ 2,117
Net gain (loss) on investments ........................... 0 0 1,321 (2,954)
---------- -------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 1,914 1,736 2,915 (837)
---------- -------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 11,544 20,116 7,028 (1,164)
---------- -------- -------- --------
Less cost of units redeemed:
Administrative charges. ................................. 27 27 30 37
Policy loans ............................................ 16 9 22 8
Surrender benefits ...................................... 24,076 12,020 8,533 5,574
Death benefits .......................................... 949 251 792 973
---------- -------- -------- --------
25,068 12,307 9,377 6,592
---------- -------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... (13,524) 7,809 (2,349) (7,756)
---------- -------- -------- --------
Net increase (decrease) in equity accounts .............. (11,610) 9,545 566 (8,593)
Depositor's equity contribution (net redemption) ......... 0 0 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 51,141 41,596 45,516 54,109
---------- -------- -------- --------
End of period ............................................ $ 39,531 $ 51,141 $ 46,082 $ 45,516
========== ======== ======== ========
<CAPTION>
GROWTH
SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 54,578 $ 29,596
Net gain (loss) on investments ........................... 31,255 55,089
--------- ---------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 85,833 84,685
--------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 10,315 20,058
--------- ---------
Less cost of units redeemed:
Administrative charges. ................................. 468 489
Policy loans ............................................ 126 223
Surrender benefits ...................................... 97,322 57,168
Death benefits .......................................... 2,891 3,394
--------- ---------
100,807 61,274
--------- ---------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... (90,492) (41,216)
--------- ---------
Net increase (decrease) in equity accounts .............. (4,659) 43,469
Depositor's equity contribution (net redemption) ......... 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 576,115 532,646
--------- ---------
End of period ............................................ $ 571,456 $ 576,115
========= =========
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC
GLOBAL TOTAL RETURN
SUB-ACCOUNT SUB-ACCOUNT (A)
DECEMBER 31 DECEMBER 31
--------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 28,400 $ 16,551 $ 11,943 $ 6,042
Net gain (loss) on investments ........................... 11,320 25,769 16,025 10,207
--------- --------- --------- ---------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 39,720 42,320 27,968 16,249
--------- --------- --------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 32,684 52,565 16,145 14,095
--------- --------- --------- ---------
Less cost of units redeemed:
Administrative charges .................................. 168 138 90 81
Policy loans ............................................ 47 83 13 43
Surrender benefits ...................................... 31,301 14,293 15,892 9,352
Death benefits .......................................... 756 611 648 453
--------- --------- --------- ---------
32,272 15,125 16,643 9,929
--------- --------- --------- ---------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 412 37,440 (498) 4,166
--------- --------- --------- ---------
Net increase (decrease) in equity accounts .............. 40,132 79,760 27,470 20,415
Depositor's equity contribution (net redemption) ......... 0 0 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 221,185 141,425 136,789 116,374
--------- --------- --------- ---------
End of period ............................................ $ 261,317 $ 221,185 $ 164,259 $ 136,789
========= ========= ========= =========
</TABLE>
The notes to the financial statements are an integral part of this report.
8
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year ended
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
EMERGING GROWTH
SUB-ACCOUNT
DECEMBER 31
--------------------------
1997 1996
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 13,375 $ 4,618
Net gain (loss) on investments ....................... 13,986 15,399
--------- ---------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 27,361 20,017
--------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 11,051 17,337
--------- ---------
Less cost of units redeemed:
Administrative charges .............................. 107 99
Policy loans ........................................ 34 90
Surrender benefits .................................. 15,348 9,349
Death benefits ...................................... 357 331
--------- ---------
15,846 9,869
--------- ---------
Increase (decrease) in equity accounts from capital
unit transactions .................................. (4,795) 7,468
--------- ---------
Net increase (decrease) in equity accounts .......... 22,566 27,485
Depositor's equity contribution (redemption) ......... 0 0
EQUITY ACCOUNTS:
Beginning of period .................................. 143,282 115,797
--------- ---------
End of period ........................................ $ 165,848 $ 143,282
========= =========
<CAPTION>
AGGRESSIVE GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
------------------------- -----------------------
1997 1996 1997 1996
------------ ------------ ---------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 5,959 $ 1,122 $ 1,565 $ 281
Net gain (loss) on investments ....................... 7,538 3,924 661 814
-------- -------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 13,497 5,046 2,226 1,095
-------- -------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 5,867 (1,290) 3,185 2,216
-------- -------- -------- --------
Less cost of units redeemed:
Administrative charges .............................. 54 47 11 9
Policy loans ........................................ 8 28 5 8
Surrender benefits .................................. 7,976 5,022 1,589 789
Death benefits ...................................... 625 482 80 31
-------- -------- -------- --------
8,663 5,579 1,685 837
-------- -------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions .................................. (2,796) (6,869) 1,500 1,379
-------- -------- -------- --------
Net increase (decrease) in equity accounts .......... 10,701 (1,823) 3,726 2,474
Depositor's equity contribution (redemption) ......... 0 0 0 (219)
EQUITY ACCOUNTS:
Beginning of period .................................. 63,843 65,666 13,598 11,343
-------- -------- -------- --------
End of period ........................................ $ 74,544 $ 63,843 $ 17,324 $ 13,598
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
GROWTH &
INCOME
SUB-ACCOUNT (B)
DECEMBER 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 1,845 $ 511
Net gain (loss) on investments ....................... 719 593
-------- --------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 2,564 1,104
-------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 795 1,291
-------- --------
Less cost of units redeemed:
Administrative charges. ............................. 8 7
Policy loans ........................................ 0 1
Surrender benefits .................................. 1,665 1,581
Death benefits ...................................... 27 68
-------- --------
1,700 1,657
-------- --------
Increase (decrease) in equity accounts from capital
unit transactions .................................. (905) (366)
-------- --------
Net increase (decrease) in equity accounts .......... 1,659 738
Depositor's equity contribution (redemption) ......... 0 (231)
EQUITY ACCOUNTS:
Beginning of period .................................. 12,397 11,890
-------- --------
End of period ........................................ $ 14,056 $ 12,397
======== ========
<CAPTION>
TACTICAL ASSET
ALLOCATION C.A.S.E. GROWTH
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
----------------------- -----------------------
1997 1996 1997 1996 (C)
----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 4,916 $ 1,857 $ 1,412 $ 58
Net gain (loss) on investments ....................... 4,915 4,480 (713) 228
-------- -------- -------- -------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 9,831 6,337 699 286
-------- -------- -------- -------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 12,079 24,484 14,277 3,388
-------- -------- -------- -------
Less cost of units redeemed:
Administrative charges. ............................. 37 25 3 0
Policy loans ........................................ 2 0 5 1
Surrender benefits .................................. 5,667 3,370 887 61
Death benefits ...................................... 476 141 16 0
-------- -------- -------- -------
6,182 3,536 911 62
-------- -------- -------- -------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 5,897 20,948 13,366 3,326
-------- -------- -------- -------
Net increase (decrease) in equity accounts .......... 15,728 27,285 14,065 3,612
Depositor's equity contribution (redemption) ......... 0 0 0 0
EQUITY ACCOUNTS:
Beginning of period .................................. 62,195 34,910 3,612 0
-------- -------- -------- -------
End of period ........................................ $ 77,923 $ 62,195 $ 17,677 $ 3,612
======== ======== ======== =======
</TABLE>
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
9
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year or period ended
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
GLOBAL SECTOR VALUE EQUITY
SUB-ACCOUNT (D) SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
------------------------- -------------------------
1997 1996(C) 1997 1996(C)
----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 89 $ (1) $ 192 $ 16
Net gain (loss) on investments ........................... (25) 138 6,370 1,196
------- ------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 64 137 6,562 1,212
------- ------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 161 2,132 29,438 15,673
------- ------- -------- --------
Less cost of units redeemed:
Administrative charges .................................. 1 0 15 2
Policy loans ............................................ 0 4 4 1
Surrender benefits ...................................... 275 348 3,045 264
Death benefits .......................................... 5 0 67 89
------- ------- -------- --------
281 352 3,131 356
------- ------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... (120) 1,780 26,307 15,317
------- ------- -------- --------
Net increase (decrease) in equity accounts .............. (56) 1,917 32,869 16,529
Depositor's equity contribution (net redemption) ......... 0 500 (172) 150
EQUITY ACCOUNTS:
Beginning of period ...................................... 2,417 0 16,679 0
------- ------- -------- --------
End of period ............................................ $ 2,361 $ 2,417 $ 49,376 $ 16,679
======= ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL U.S.
EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
1997 (E) 1997 (E)
----------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ (20) $ 384
Net gain (loss) on investments ........................... (54) 598
------- --------
Net increase (decrease) in equity accounts resulting
from operations ......................................... (74) 982
------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 6,413 11,930
------- --------
Less cost of units redeemed:
Administrative charges .................................. 1 3
Policy loans ............................................ 0 0
Surrender benefits ...................................... 256 682
Death benefits .......................................... 5 0
------- --------
262 685
------- --------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 6,151 11,245
------- --------
Net increase (decrease) in equity accounts .............. 6,077 12,227
Depositor's equity contribution (net redemption) ......... 300 150
EQUITY ACCOUNTS:
Beginning of period ...................................... 0 0
------- --------
End of period ............................................ $ 6,377 $ 12,377
======= ========
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) The inception date of this sub-account was May 1, 1996.
(d) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
(e) The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
10
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 13.29 $ 12.80
Income from operations:
Net investment income (loss) ....................................... 0.53 0.49
Net realized and unrealized gain (loss) on investments ............. 0.00 0.00
------- -------
Total income (loss) from operations ............................... 0.53 0.49
------- -------
Accumulation unit value, end of period ............................... $ 13.82 $ 13.29
======= =======
Total return (a) ..................................................... 4.00% 3.81%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 39,531 $ 51,141
Ratios of net investment income (loss) to average net assets (b) .... 3.92% 3.72%
<CAPTION>
MONEY MARKET SUB-ACCOUNT
DECEMBER 31
-------------------------------------
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 12.29 $ 12.03 $ 11.89
Income from operations:
Net investment income (loss) ....................................... 0.51 0.26 0.14
Net realized and unrealized gain (loss) on investments ............. 0.00 0.00 0.00
------- ------- --------
Total income (loss) from operations ............................... 0.51 0.26 0.14
------- ------- --------
Accumulation unit value, end of period ............................... $ 12.80 $ 12.29 $ 12.03
======= ======= ========
Total return (a) ..................................................... 4.12% 2.22% 1.16%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 41,596 $ 55,318 $ 32,943
Ratios of net investment income (loss) to average net assets (b) .... 4.03% 2.28% 1.15%
</TABLE>
<TABLE>
<CAPTION>
BOND SUB-ACCOUNT
DECEMBER 31
------------------------
1997 1996
------------ -----------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 18.11 $ 18.31
Income from operations:
Net investment income (loss) ....................................... 0.73 0.77
Net realized and unrealized gain (loss) on investments ............. 0.68 ( 0.97)
------- -------
Total income (loss) from operations ............................... 1.41 ( 0.20)
------- -------
Accumulation unit value, end of period ............................... $ 19.52 $ 18.11
======= =======
Total return (a) ..................................................... 7.80% ( 1.10%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 46,082 $45,516
Ratios of net investment income (loss) to average net assets (b) .... 3.95% 4.34%
<CAPTION>
BOND SUB-ACCOUNT
DECEMBER 31
-----------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 15.08 $ 16.40 $ 14.65
Income from operations:
Net investment income (loss) ....................................... 0.83 0.72 1.67
Net realized and unrealized gain (loss) on investments ............. 2.40 ( 2.04) 0.08
------- ------- -------
Total income (loss) from operations ............................... 3.23 ( 1.32) 1.75
------- ------- -------
Accumulation unit value, end of period ............................... $ 18.31 $ 15.08 $ 16.40
======= ======= =======
Total return (a) ..................................................... 21.46% ( 8.10%) 11.97%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $54,109 $47,193 $66,483
Ratios of net investment income (loss) to average net assets (b) .... 4.94% 4.69% 10.94%
</TABLE>
<TABLE>
<CAPTION>
GROWTH SUB-ACCOUNT
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 33.17 $ 28.47
Income from operations:
Net investment income (loss) ....................................... 3.42 1.64
Net realized and unrealized gain (loss) on investments ............. 1.91 3.06
-------- --------
Total income (loss) from operations ............................... 5.33 4.70
-------- --------
Accumulation unit value, end of period ............................... $ 38.50 $ 33.17
======== ========
Total return (a) ..................................................... 16.09% 16.50%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 571,456 $ 576,115
Ratios of net investment income (loss) to average net assets (b) .... 9.36% 5.22%
<CAPTION>
GROWTH SUB-ACCOUNT
DECEMBER 31
------------------------------------------
1995 1994 1993
------------- -------------- -------------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 19.60 $ 21.64 $ 21.07
Income from operations:
Net investment income (loss) ....................................... 2.35 ( 0.06) 0.20
Net realized and unrealized gain (loss) on investments ............. 6.52 ( 1.98) 0.37
-------- -------- --------
Total income (loss) from operations ............................... 8.87 ( 2.04) 0.57
-------- -------- --------
Accumulation unit value, end of period ............................... $ 28.47 $ 19.60 $ 21.64
======== ======== ========
Total return (a) ..................................................... 45.29% ( 9.45%) 2.69%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 532,646 $ 409,881 $ 575,024
Ratios of net investment income (loss) to average net assets (b) .... 9.81% ( 0.28%) 0.99%
</TABLE>
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
11
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
GLOBAL SUB-ACCOUNT
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period .......................... $ 20.55 $ 16.29
Income from operations:
Net investment income (loss) ........................................ 2.55 1.62
Net realized and unrealized gain (loss) on investments .............. 1.00 2.64
-------- --------
Total income (loss) from operations ................................ 3.55 4.26
-------- --------
Accumulation unit value, end of period ................................ $ 24.10 $ 20.55
======== ========
Total return (a) ...................................................... 17.28% 26.15%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................... $ 261,317 $ 221,185
Ratios of net investment income (loss) to average net assets (b) ..... 11.01% 8.60%
<CAPTION>
GLOBAL SUB-ACCOUNT
DECEMBER 31
----------------------------------------
1995 1994 1993
------------- -------------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period .......................... $ 13.40 $ 13.54 $ 10.15
Income from operations:
Net investment income (loss) ........................................ 0.42 0.45 0.16
Net realized and unrealized gain (loss) on investments .............. 2.47 ( 0.59) 3.23
-------- -------- -------
Total income (loss) from operations ................................ 2.89 ( 0.14) 3.39
-------- -------- -------
Accumulation unit value, end of period ................................ $ 16.29 $ 13.40 $ 13.54
======== ======== =======
Total return (a) ...................................................... 21.53% ( 0.99%) 33.34%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................... $ 141,425 $ 144,705 $69,665
Ratios of net investment income (loss) to average net assets (b) ..... 2.89% 3.40% 1.40%
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC TOTAL RETURN
SUB-ACCOUNT (H)
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 15.46 $ 13.61
Income from operations:
Net investment income (loss) ....................................... 1.34 0.68
Net realized and unrealized gain (loss) on investments ............. 1.80 1.17
-------- --------
Total income (loss) from operations ............................... 3.14 1.85
-------- --------
Accumulation unit value, end of period ............................... $ 18.60 $ 15.46
======== ========
Total return (a) ..................................................... 20.34% 13.57%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 164,259 $ 136,789
Ratios of net investment income (loss) to average net assets (b) .... 7.83% 4.75%
<CAPTION>
STRATEGIC TOTAL RETURN SUB-ACCOUNT
(H)
DECEMBER 31
------------------------------------
1995 1994 1993 (C)
------------- ----------- ----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.06 $ 11.25 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.59 0.16 0.16
Net realized and unrealized gain (loss) on investments ............. 1.96 ( 0.35) 1.09
-------- ------- -------
Total income (loss) from operations ............................... 2.55 ( 0.19) 1.25
-------- ------- -------
Accumulation unit value, end of period ............................... $ 13.61 $ 11.06 $ 11.25
======== ======= =======
Total return (a) ..................................................... 23.11% ( 1.77%) 12.54%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 116,374 $88,607 $49,240
Ratios of net investment income (loss) to average net assets (b) .... 4.74% 1.43% 1.84%
</TABLE>
<TABLE>
<CAPTION>
EMERGING GROWTH SUB-ACCOUNT
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 19.26 $ 16.40
Income from operations:
Net investment income (loss) ....................................... 1.85 0.63
Net realized and unrealized gain (loss) on investments ............. 1.99 2.23
-------- --------
Total income (loss) from operations ............................... 3.84 2.86
-------- --------
Accumulation unit value, end of period ............................... $ 23.10 $ 19.26
======== ========
Total return (a) ..................................................... 19.95% 17.41%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 165,848 $ 143,282
Ratios of net investment income (loss) to average net assets (b) .... 8.73% 3.42%
<CAPTION>
EMERGING GROWTH SUB-ACCOUNT
DECEMBER 31
---------------------------------------
1995 1994 1993 (C)
------------- ------------ ------------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.31 $ 12.37 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.51 ( 0.13) ( 0.12)
Net realized and unrealized gain (loss) on investments ............. 4.58 ( 0.93) 2.49
-------- ------- -------
Total income (loss) from operations ............................... 5.09 ( 1.06) 2.37
-------- ------- -------
Accumulation unit value, end of period ............................... $ 16.40 $ 11.31 $ 12.37
======== ======= =======
Total return (a) ..................................................... 44.97% ( 8.51%) 23.67%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 115,797 $83,480 $58,794
Ratios of net investment income (loss) to average net assets (b) .... 3.68% ( 1.21%) ( 1.30%)
</TABLE>
The notes to the financial statements are an integral part of this report.
12
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH SUB-ACCOUNT
DECEMBER 31
-------------------------------------------------------
1997 1996 1995 1994 (D)
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 14.56 $ 13.35 $ 9.79 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 1.42 0.25 0.29 ( 0.08)
Net realized and unrealized gain (loss) on investments ............. 1.88 0.96 3.27 ( 0.13)
------- ------- ------- -------
Total income (loss) from operations ............................... 3.30 1.21 3.56 ( 0.21)
------- ------- ------- -------
Accumulation unit value, end of period ............................... $ 17.86 $ 14.56 $ 13.35 $ 9.79
======= ======= ======= =======
Total return (a) ..................................................... 22.71% 9.07% 36.31% ( 2.08%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $74,544 $ 63,843 $65,666 $18,555
Ratios of net investment income (loss) to average net assets (b) .... 8.51% 1.77% 2.28% ( 1.04%)
</TABLE>
<TABLE>
<CAPTION>
BALANCED SUB-ACCOUNT
DECEMBER 31
------------------------------------------------------
1997 1996 1995 1994 (D)
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 12.09 $ 11.06 $ 9.35 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 1.32 0.26 0.29 0.21
Net realized and unrealized gain (loss) on investments ............. 0.58 0.77 1.42 ( 0.86)
------- ------- ------- -------
Total income (loss) from operations ............................... 1.90 1.03 1.71 ( 0.65)
------- ------- ------- -------
Accumulation unit value, end of period ............................... $ 13.99 $ 12.09 $ 11.06 $ 9.35
======= ======= ======= =======
Total return (a) ..................................................... 15.65% 9.34% 18.31% ( 6.52%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $17,324 $13,598 $11,343 $ 9,379
Ratios of net investment income (loss) to average net assets (b) .... 10.01% 2.29% 2.85% 2.63%
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME SUB-ACCOUNT (I)
DECEMBER 31
------------------------------------------------------
1997 1996 1995 1994 (D)
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 12.91 $ 11.71 $ 9.46 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 2.06 0.50 0.45 0.32
Net realized and unrealized gain (loss) on investments ............. 0.92 0.70 1.80 ( 0.86)
------- ------- ------- -------
Total income (loss) from operations ............................... 2.98 1.20 2.25 ( 0.54)
------- ------- ------- -------
Accumulation unit value, end of period ............................... $ 15.89 $ 12.91 $ 11.71 $ 9.46
======= ======= ======= =======
Total return (a) ..................................................... 23.10% 10.25% 23.70% ( 5.37%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $14,056 $12,397 $11,890 $ 5,506
Ratios of net investment income (loss) to average net assets (b) .... 14.87% 4.17% 4.26% 4.07%
</TABLE>
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
13
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
DECEMBER 31
--------------------------------------
1997 1996 1995 (E)
----------- ----------- ----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 13.40 $ 11.86 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 1.02 0.46 0.58
Net realized and unrealized gain (loss) on investments ............. 1.01 1.08 1.28
------- ------- -------
Total income (loss) from operations ............................... 2.03 1.54 1.86
------- ------- -------
Accumulation unit value, end of period ............................... $ 15.43 $ 13.40 $ 11.86
======= ======= =======
Total return (a) ..................................................... 15.14% 13.00% 18.61%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $77,923 $62,195 $34,910
Ratios of net investment income (loss) to average net assets (b) .... 6.99% 3.71% 5.25%
</TABLE>
<TABLE>
<CAPTION>
C.A.S.E. GROWTH
SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996 (F)
----------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 13.88 $ 12.87
Income from operations:
Net investment income (loss) ....................................... 3.15 0.39
Net realized and unrealized gain (loss) on investments ............. ( 1.26) 0.62
------- -------
Total income (loss) from operations ............................... 1.89 1.01
------- -------
Accumulation unit value, end of period ............................... $ 15.77 $ 13.88
======= =======
Total return (a) ..................................................... 13.60% 7.84%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $17,677 $ 3,612
Ratios of net investment income (loss) to average net assets (b) .... 20.61% 4.43%
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SECTOR SUB-ACCOUNT (J)
DECEMBER 31
-------------------------
1997 1996 (F)
----------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 10.52 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.39 ( 0.01)
Net realized and unrealized gain (loss) on investments ............. ( 0.16) 0.53
-------- -------
Total income (loss) from operations ............................... 0.23 0.52
-------- -------
Accumulation unit value, end of period ............................... $ 10.75 $ 10.52
======== =======
Total return (a) ..................................................... 2.15% 5.19%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 2,361 $ 2,417
Ratios of net investment income (loss) to average net assets (b) .... 3.54% ( 0.09%)
</TABLE>
The notes to the financial statements are an integral part of this report.
14
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
VALUE EQUITY SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996 (F)
----------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.22 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.07 0.02
Net realized and unrealized gain (loss) on investments ............. 2.57 1.20
------- -------
Total income (loss) from operations ............................... 2.64 1.22
------- -------
Accumulation unit value, end of period ............................... $ 13.86 $ 11.22
======= =======
Total return (a) ..................................................... 23.49% 12.25%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $49,376 $16,679
Ratios of net investment income (loss) to average net assets (b) .... 0.55% 0.30%
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL U.S.
EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
1997 (G) 1997 (G)
---------------- ------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 10.00 $ 10.00
Income from operations:
Net investment income (loss) ....................................... ( 0.05) 0.75
Net realized and unrealized gain (loss) on investments ............. 0.67 1.79
------- -------
Total income (loss) from operations ............................... 0.62 2.54
------- -------
Accumulation unit value, end of period ............................... $ 10.62 $ 12.54
======= =======
Total return (a) ..................................................... 6.17% 25.44%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 6,377 $12,377
Ratios of net investment income (loss) to average net assets (b) .... ( 0.52%) 6.37%
</TABLE>
* The above tables illustrate the change for a unit outstanding computed using
average units outstanding throughout each period. See Notes to Selected Per
Unit Data and Ratios below.
NOTES TO SELECTED PER UNIT DATA AND RATIOS:
(a) For periods less than one year, the total return is not annualized.
(b) For periods less than one year, the ratio of net investment income to
average net assets is annualized.
(c) The inception date of this sub-account was March 1, 1993.
(d) The inception date of this sub-account was March 1, 1994.
(e) The inception date of this sub-account was January 3, 1995.
(f) The inception date of this sub-account was May 1, 1996.
(g) The inception date of this sub-account was January 2, 1997.
(h) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(i) Prior to May 1, 1997, this sub-account was known as Utility.
(j) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
15
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
--------------------------------------------------------
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 encompasses various contract types: the WRL Freedom Variable Annuity
and the WRL Freedom Attainer ("Freedom and Attainer"); the WRL Freedom
Bellwether, the WRL Freedom Conqueror, and the WRL Freedom Wealth Creator
("Bellwether, Conqueror, and Creator"). Information presented in these
financial statements pertains only to the Freedom and Attainer contracts. The
financial statements for the Bellwether, Conqueror, and Creator contracts are
presented separately. Each contains fifteen investment options referred to as
sub-accounts. Each sub-account invests in the corresponding Portfolio of the
WRL Series Fund, Inc. (collectively referred to as the "Fund" and individually
as a "Portfolio"), a registered management investment company under the
Investment Company Act of 1940, as amended.
The Fund has entered into annually renewable investment advisory agreements
for each Portfolio with WRL Investment Management, Inc. (|P`WRL Management|P')
as investment adviser. Costs incurred in connection with the advisory services
rendered by WRL Management are paid by each Portfolio. WRL Management has
entered into sub-advisory agreements with various management companies, some of
which are affiliates of WRL. Each sub-adviser is compensated directly by WRL
Management.
Effective March 1, 1997, the name of the Meridian/INVESCO Global Sector
Sub-Account was changed to Global Sector Sub-Account. Effective May 1, 1997, the
names of the Equity-Income and Utility Sub-Accounts were changed to the
Strategic Total Return and Growth & Income Sub-Accounts, respectively.
On December 16, 1997, pursuant to an exemptive order (Rel. No. IC-22944)
received from the Securities and Exchange Commission for the substitution of
securities issued by the WRL Series Fund and held by the Annuity Series Account
to support individual flexible premium deferred variable annuity contracts,
investments were transferred from the Short-to-Intermediate Government
Sub-Account to the Bond Sub-Account.
On January 2, 1997, WRL made an initial contribution of $ 450,000 to the
Freedom and Attainer Annuity Account. The amount of the contribution and units
received were as follows:
<TABLE>
<CAPTION>
SUB-ACCOUNT CONTRIBUTION UNITS
- ----------------------- -------------- ------------------
<S> <C> <C>
International Equity $ 300,000 30,000.000000
U.S. Equity $ 150,000 15,000.000000
</TABLE>
Freedom and Attainer sub-accounts hold assets to support the benefits under
certain flexible payment variable accumulation deferred annuity contracts (the
"Contracts") issued by WRL. The Annuity Account equity transactions are
accounted for using the appropriate effective date at the corresponding
accumulation unit value.
The following significant accounting policies, which are in conformity with
generally accepted accounting principles for unit investment trusts, have been
consistently applied in the preparation of the Trust's financial statements.
A. VALUATION OF INVESTMENTS AND SECURITIES TRANSACTIONS
Investments in the Fund's shares are stated at the closing net asset value
("NAV") per share as determined by the Fund. Investment transactions are
accounted for on the trade date at the Fund NAV next determined after receipt
of sale or redemptions order without sales charges. Dividend income and capital
gains 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.
C. ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
16
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(continued)
----------------------------------
NOTE 2 -- CHARGES AND DEDUCTIONS
Charges are assessed by WRL in connection with the issuance and
administration of the Contracts.
A. CONTRACT CHARGES
No deduction for sales expenses is made from 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. FREEDOM AND ATTAINER 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 Money Market Portfolio are declared daily and reinvested
monthly. Dividends of the remaining Portfolios are typically declared and
reinvested semi-annually, while capital gains distributions are declared and
reinvested annually. Dividends and distributions of the Fund are recorded on
the ex-date and generally are paid to and reinvested by the Annuity Account on
the next business day after the ex-date. Dividends are not declared by the
Annuity Account, since the increase in the value of the underlying investment
in the Fund is reflected daily in the unit price used to calculate the equity
value within the Annuity Account. Consequently, a dividend distribution by the
underlying Fund does not change either the unit price or equity values within
the Annuity Account.
NOTE 4 -- SECURITIES TRANSACTIONS
Securities transactions are summarized as follows:
For the year or period ended December 31, 1997 (in thousands)
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
Purchase of long-term securities .................... $ 77,459 $ 13,440 $ 77,599
Proceeds from sales of long-term securities ......... 89,192 14,216 113,285
STRATEGIC TOTAL EMERGING
GLOBAL RETURN GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities .................... $ 58,765 $ 24,235 $ 34,844
Proceeds from sales of long-term securities ......... 29,925 13,009 26,452
AGGRESSIVE GROWTH &
GROWTH BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities .................... $ 21,589 $ 5,947 $ 6,307
Proceeds from sales of long-term securities ......... 18,353 2,831 5,553
TACTICAL ASSET C.A.S.E. GLOBAL
ALLOCATION GROWTH SECTOR
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities .................... $ 19,362 $ 17,376 $ 1,150
Proceeds from sales of long-term securities ......... 8,536 2,936 1,176
VALUE INTERNATIONAL U.S.
EQUITY EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT (A) SUB-ACCOUNT (A)
Purchase of long-term securities .................... $ 31,913 $ 7,000 $ 18,799
Proceeds from sales of long-term securities ......... 5,559 575 6,838
</TABLE>
(a) The inception date of this sub-account was January 2, 1997.
1 9 9 7 A n n u a l R e p o r t
17
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(continued)
----------------------------------
NOTE 5 -- EQUITY TRANSACTIONS
For the year or period ended December 31, 1997
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
Units balance - beginning of year ........... 3,848,980.206975 2,513,341.667873 17,369,774.620879
Units issued ................................ 11,575,147.233223 862,978.730209 2,279,098.834370
Units redeemed .............................. 12,563,321.209421 1,015,850.173329 4,806,982.383728
----------------- ---------------- -----------------
Units balance - end of year ................. 2,860,806.230777 2,360,470.224753 14,841,891.071521
================= ================ =================
STRATEGIC TOTAL EMERGING
GLOBAL RETURN GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 10,764,226.518931 8,849,836.119981 7,440,062.350527
Units issued ................................ 3,749,061.891357 2,112,435.596505 2,546,826.204044
Units redeemed .............................. 3,669,529.145325 2,131,445.140520 2,807,098.871400
----------------- ----------------- -----------------
Units balance - end of year ................. 10,843,759.264963 8,830,826.575966 7,179,789.683171
================= ================= =================
AGGRESSIVE GROWTH &
GROWTH BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 4,385,415.675763 1,124,365.141725 960,651.569215
Units issued ................................ 1,850,632.936955 510,629.580596 478,200.816416
Units redeemed .............................. 2,063,136.150019 396,285.590604 554,083.005681
----------------- ----------------- -----------------
Units balance - end of year ................. 4,172,912.462699 1,238,709.131717 884,769.379950
================= ================= =================
TACTICAL ASSET C.A.S.E. GLOBAL
ALLOCATION GROWTH SECTOR
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 4,640,508.914581 260,151.966141 229,745.728608
Units issued ................................ 1,855,596.907295 1,161,937.075802 113,395.988568
Units redeemed .............................. 1,446,731.732547 301,193.371324 123,418.473364
----------------- ----------------- -----------------
Units balance - end of year ................. 5,049,374.089329 1,120,895.670619 219,723.243812
================= ================= =================
VALUE INTERNATIONAL U.S.
EQUITY EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT (A) SUB-ACCOUNT (A)
Units balance - beginning of period ......... 1,485,890.372880 N/A N/A
Units issued ................................ 3,435,914.288799 716,805.101676 1,741,590.992223
Units redeemed .............................. 1,359,655.640912 116,172.379235 754,935.647249
----------------- ----------------- ------------------
Units balance - end of period ............... 3,562,149.020767 600,632.722441 986,655.344974
================= ================= ==================
</TABLE>
(a) The inception date of this sub-account was January 2, 1997.
18
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
FREEDOM AND ATTAINER
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(continued)
----------------------------------
NOTE 6 -- OTHER MATTERS
At December 31, 1997, the equity accounts included net unrealized
appreciation (depreciation) on investments as follows (in thousands):
<TABLE>
<CAPTION>
SUB-ACCOUNT
- ---------------------------------------
<S> <C>
Money Market ........................ $ N/A
Bond ................................ 632
Growth .............................. 121,406
Global .............................. 39,417
Strategic Total Return .............. 33,855
Emerging Growth ..................... 38,923
Aggressive Growth ................... 6,348
Balanced ............................ 1,506
Growth & Income ..................... 672
Tactical Asset Allocation ........... 8,550
C.A.S.E. Growth ..................... (1,037)
Global Sector ....................... (66)
Value Equity ........................ 6,314
International Equity ................ (102)
U.S. Equity ......................... (42)
</TABLE>
1 9 9 7 A n n u a l R e p o r t
19
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At December 31, 1997
All amounts (except unit value, units and shares) in thousands
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares .................................. 61,588,977 5,776,333 11,726,698
================= ================= ==================
Cost .................................... $ 61,589 $ 64,302 $ 381,293
================= ================= ==================
Investments at net asset value ........... $ 61,589 $ 64,361 $ 432,061
Accrued transfers from depositor ......... 563 15 64
----------------- ----------------- ------------------
Total assets ............................ 62,152 64,376 432,125
----------------- ----------------- ------------------
LIABILITIES:
Accrued transfers to depositor ........... 0 0 0
----------------- ----------------- ------------------
Net assets .............................. $ 62,152 $ 64,376 $ 432,125
================= ================= ==================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................... 5,382,845.870799 4,801,744.463198 23,272,251.525870
================= ================= ==================
Unit value .............................. $ 11.546365 $ 13.406842 $ 18.568260
================= ================= ==================
Contract Owners' equity ................. $ 62,152 $ 64,376 $ 432,125
----------------- ----------------- ------------------
Depositor's equity:
Units ................................... N/A N/A N/A
================= ================= ==================
Unit value .............................. $ N/A $ N/A $ N/A
================= ================= ==================
Depositor's equity ...................... $ N/A $ N/A $ N/A
----------------- ----------------- ------------------
Total equity ............................ $ 62,152 $ 64,376 $ 432,125
================= ================= ==================
</TABLE>
<TABLE>
<CAPTION>
GLOBAL
SUB-ACCOUNT
<S> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares .................................. 19,531,180
==================
Cost .................................... $ 351,359
==================
Investments at net asset value ........... $ 371,939
Accrued transfers from depositor ......... 0
------------------
Total assets ............................ 371,939
------------------
LIABILITIES:
Accrued transfers to depositor ........... 427
------------------
Net assets .............................. $ 371,512
------------------
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................... 15,530,666.209892
==================
Unit value .............................. $ 23.921219
==================
Contract Owners' equity ................. $ 371,512
------------------
Depositor's equity:
Units ................................... N/A
==================
Unit value .............................. $ N/A
==================
Depositor's equity ...................... $ N/A
------------------
Total equity ............................ $ 371,512
==================
<CAPTION>
STRATEGIC
TOTAL RETURN EMERGING GROWTH AGGRESSIVE GROWTH
SUB-ACCOUNT (A) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares .................................. 17,846,662 12,670,693 10,144,715
================== ================== =================
Cost .................................... $ 241,928 $ 226,211 $ 150,651
================== ================== =================
Investments at net asset value ........... $ 278,847 $ 258,072 $ 162,769
Accrued transfers from depositor ......... 508 658 0
------------------ ------------------ -----------------
Total assets ............................ 279,355 258,730 162,769
------------------ ------------------ -----------------
LIABILITIES:
Accrued transfers to depositor ........... 0 0 368
------------------ ------------------ -----------------
Net assets .............................. $ 279,355 $ 258,730 $ 162,401
------------------ ------------------ -----------------
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................... 15,124,297.031939 11,279,603.185013 9,141,315.304706
================== ================== =================
Unit value .............................. $ 18.470638 $ 22.937836 $ 17.765572
================== ================== =================
Contract Owners' equity ................. $ 279,355 $ 258,730 $ 162,401
------------------ ------------------ -----------------
Depositor's equity:
Units ................................... N/A N/A N/A
================== ================== =================
Unit value .............................. $ N/A $ N/A $ N/A
================== ================== =================
Depositor's equity ...................... $ N/A $ N/A $ N/A
------------------ ------------------ -----------------
Total equity ............................ $ 279,355 $ 258,730 $ 162,401
================== ================== =================
</TABLE>
The notes to the financial statements are an integral part of this report.
20
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At December 31, 1997
All amounts (except unit value, units and shares) in thousands
----------------------------------
<TABLE>
<CAPTION>
GROWTH &
BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT (B)
<S> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 3,683,285 2,884,424
================= =================
Cost .................................. $ 40,701 $ 34,400
================= =================
Investments at net asset value ......... $ 44,233 $ 36,221
Accrued transfers from depositor ....... 0 370
----------------- -----------------
Total assets .......................... 44,233 36,591
----------------- -----------------
LIABILITIES:
Accrued transfers to depositor ......... 331 0
----------------- -----------------
Net assets ............................ $ 43,902 $ 36,591
================= =================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................. 3,156,353.983498 2,315,991.647763
================= =================
Unit value ............................ $ 13.908933 $ 15.799260
================= =================
Contract Owners' equity ............... $ 43,902 $ 36,591
----------------- -----------------
Depositor's equity:
Units ................................. N/A N/A
================= =================
Unit value ............................ $ N/A $ N/A
================= =================
Depositor's equity .................... $ N/A $ N/A
----------------- -----------------
Total equity .......................... $ 43,902 $ 36,591
================= =================
<CAPTION>
TACTICAL ASSET
ALLOCATION C.A.S.E. GROWTH
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 14,250,304 2,234,881
================== =================
Cost .................................. $ 180,989 $ 31,111
================== =================
Investments at net asset value ......... $ 193,992 $ 31,312
Accrued transfers from depositor ....... 92 683
------------------ -----------------
Total assets .......................... 194,084 31,995
------------------ -----------------
LIABILITIES:
Accrued transfers to depositor ......... 0 0
------------------ -----------------
Net assets ............................ $ 194,084 $ 31,995
================== =================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................. 12,633,176.602715 2,618,283.969060
================== =================
Unit value ............................ $ 15.363005 $ 12.219711
================== =================
Contract Owners' equity ............... $ 194,084 $ 31,995
------------------ -----------------
Depositor's equity:
Units ................................. N/A N/A
================== =================
Unit value ............................ $ N/A $ N/A
================== =================
Depositor's equity .................... $ N/A $ N/A
------------------ -----------------
Total equity .......................... $ 194,084 $ 31,995
================== =================
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL U.S.
GLOBAL SECTOR VALUE EQUITY EQUITY EQUITY
SUB-ACCOUNT (C) SUB-ACCOUNT SUB-ACCOUNT (D) SUB-ACCOUNT (D)
<S> <C> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 999,486 7,005,029 1,040,824 2,218,809
=============== ================= ================== ==================
Cost .................................. $ 10,767 $ 86,920 $ 11,523 $ 27,063
=============== ================= ================== ==================
Investments at net asset value ......... $ 10,360 $ 97,403 $ 11,140 $ 27,146
Accrued transfers from depositor ....... 0 0 1 0
--------------- ----------------- ------------------ ------------------
Total assets .......................... 10,360 97,403 11,141 27,146
--------------- ----------------- ------------------ ------------------
LIABILITIES:
Accrued transfers to depositor ......... 16 131 0 324
--------------- ----------------- ------------------ ------------------
Net assets ............................ $ 10,344 $ 97,272 $ 11,141 $ 26,822
=============== ================= ================== ==================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units ................................. 965,056.817608 7,035,131.859758 1,020,984.488864 2,126,414.461035
=============== ================= ================== ==================
Unit value ............................ $ 10.718516 $ 13.826568 $ 10.600692 $ 12.525559
=============== ================= ================== ==================
Contract Owners' equity ............... $ 10,344 $ 97,272 $ 10,823 $ 26,634
--------------- ----------------- ------------------ ------------------
Depositor's equity:
Units ................................. N/A N/A 30,000.000000 15,000.000000
=============== ================= ================== ==================
Unit value ............................ $ N/A $ N/A $ 10.600692 $ 12.525559
=============== ================= ================== ==================
Depositor's equity .................... $ N/A $ N/A $ 318 $ 188
--------------- ----------------- ------------------ ------------------
Total equity .......................... $ 10,344 $ 97,272 $ 11,141 $ 26,822
=============== ================= ================== ==================
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
(d) The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
21
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
STATEMENT OF OPERATIONS
For the year ended December 31, 1997
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ..................................................... $ 3,303 $ 2,777 $ 2,913
Capital gain distributions .......................................... 0 0 42,884
---------- ---------- ----------
3,303 2,777 45,797
EXPENSES:
Mortality and expense risk .......................................... 894 584 5,367
---------- ---------- ----------
Net investment income (loss) ....................................... 2,409 2,193 40,430
---------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions .............. 0 725 7,041
Change in unrealized appreciation (depreciation) ................... 0 251 5,897
---------- ---------- ----------
Net gain (loss) on investments .................................... 0 976 12,938
---------- ---------- ----------
Net increase (decrease) in equity accounts resulting from operations $ 2,409 $ 3,169 $ 53,368
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC EMERGING AGGRESSIVE
GLOBAL TOTAL RETURN GROWTH GROWTH
SUB-ACCOUNT SUB-ACCOUNT (A) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ..................................................... $ 20,771 $ 6,554 $ 0 $ 4,183
Capital gain distributions .......................................... 23,043 16,769 23,760 10,389
---------- -------- -------- --------
43,814 23,323 23,760 14,572
EXPENSES:
Mortality and expense risk .......................................... 4,461 3,360 3,060 1,859
---------- -------- -------- --------
Net investment income (loss) ....................................... 39,353 19,963 20,700 12,713
---------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions .............. 10,093 4,086 14,075 3,706
Change in unrealized appreciation (depreciation) ................... (5,246) 19,127 4,013 8,243
---------- -------- -------- --------
Net gain (loss) on investments .................................... 4,847 23,213 18,088 11,949
---------- -------- -------- --------
Net increase (decrease) in equity accounts resulting from operations$ 44,200 $ 43,176 $ 38,788 $ 24,662
========== ======== ======== ========
</TABLE>
The notes to the financial statements are an integral part of this report.
22
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
STATEMENT OF OPERATIONS
For the year or period ended December 31, 1997
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
GROWTH &
BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT (B)
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ....................................................... $ 2,274 $ 2,668
Capital gain distributions ............................................ 2,158 2,341
--------- ---------
4,432 5,009
EXPENSES:
Mortality and expense risk ............................................ 511 358
--------- ---------
Net investment income (loss) ......................................... 3,921 4,651
--------- ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................ 513 584
Change in unrealized appreciation (depreciation) ..................... 766 526
--------- ---------
Net gain (loss) on investments ...................................... 1,279 1,110
--------- ---------
Net increase (decrease) in equity accounts resulting from operations $ 5,200 $ 5,761
========= =========
<CAPTION>
TACTICAL ASSET
ALLOCATION C.A.S.E. GROWTH
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ....................................................... $ 7,080 $ 2,574
Capital gain distributions ............................................ 7,287 236
--------- ---------
14,367 2,810
EXPENSES:
Mortality and expense risk ............................................ 2,310 309
--------- ---------
Net investment income (loss) ......................................... 12,057 2,501
--------- ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................ 2,439 354
Change in unrealized appreciation (depreciation) ..................... 8,073 (429)
--------- ---------
Net gain (loss) on investments ...................................... 10,512 (75)
--------- ---------
Net increase (decrease) in equity accounts resulting from operations $ 22,569 $ 2,426
========= =========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SECTOR VALUE EQUITY
SUB-ACCOUNT (C) SUB-ACCOUNT
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ....................................................... $ 475 $ 1,069
Capital gain distributions ............................................ 33 165
------ --------
508 1,234
EXPENSES:
Mortality and expense risk ............................................ 92 850
------ --------
Net investment income (loss) ......................................... 416 384
------ --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................ 147 1,431
Change in unrealized appreciation (depreciation) ..................... (529) 8,951
------ --------
Net gain (loss) on investments ...................................... (382) 10,382
------ --------
Net increase (decrease) in equity accounts resulting from operations $ 34 $ 10,766
====== ========
<CAPTION>
INTERNATIONAL U.S.
EQUITY EQUITY
SUB-ACCOUNT (D) SUB-ACCOUNT (D)
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ....................................................... $ 48 $ 903
Capital gain distributions ............................................ 0 81
------- -------
48 984
EXPENSES:
Mortality and expense risk ............................................ 83 145
------- -------
Net investment income (loss) ......................................... (35) 839
------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................ 164 808
Change in unrealized appreciation (depreciation) ..................... (383) 83
------- -------
Net gain (loss) on investments ...................................... (219) 891
------- -------
Net increase (decrease) in equity accounts resulting from operations $ (254) $ 1,730
======= =======
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
(d) The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
23
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year ended
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
----------------------- -----------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 2,409 $ 1,540 $ 2,193 $ 1,599
Net gain (loss) on investments ....................... 0 0 976 (1,938)
-------- -------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 2,409 1,540 3,169 (339)
-------- -------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 13,128 37,166 27,784 8,367
-------- -------- -------- --------
Less cost of units redeemed:
Administrative charges. ............................. 29 18 30 24
Policy loans ........................................ 28 101 7 12
Surrender benefits .................................. 11,282 8,017 4,268 2,412
Death benefits ...................................... 461 679 327 297
-------- -------- -------- --------
11,800 8,815 4,632 2,745
-------- -------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 1,328 28,351 23,152 5,622
-------- -------- -------- --------
Net increase (decrease) in equity accounts. ......... 3,737 29,891 26,321 5,283
Depositor's equity contribution (redemption) ......... 0 0 0 0
EQUITY ACCOUNTS:
Beginning of period .................................. 58,415 28,524 38,055 32,772
-------- -------- -------- --------
End of period ........................................ $ 62,152 $ 58,415 $ 64,376 $ 38,055
======== ======== ======== ========
<CAPTION>
GROWTH
SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 40,430 $ 16,289
Net gain (loss) on investments ....................... 12,938 20,917
--------- ---------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 53,368 37,206
--------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 89,734 98,111
--------- ---------
Less cost of units redeemed:
Administrative charges. ............................. 356 243
Policy loans ........................................ 165 175
Surrender benefits .................................. 25,016 14,230
Death benefits ...................................... 3,145 1,102
--------- ---------
28,682 15,750
--------- ---------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 61,052 82,361
--------- ---------
Net increase (decrease) in equity accounts. ......... 114,420 119,567
Depositor's equity contribution (redemption) ......... 0 0
EQUITY ACCOUNTS:
Beginning of period .................................. 317,705 198,138
--------- ---------
End of period ........................................ $ 432,125 $ 317,705
========= =========
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC
GLOBAL TOTAL RETURN
SUB-ACCOUNT SUB-ACCOUNT (A)
DECEMBER 31 DECEMBER 31
------------------------- -------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ........................... $ 39,353 $ 16,880 $ 19,963 $ 8,640
Net gain (loss) on investments ......................... 4,847 21,126 23,213 8,201
--------- --------- --------- ---------
Net increase (decrease) in equity accounts resulting
from operations ....................................... 44,200 38,006 43,176 16,841
--------- --------- --------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................... 120,751 88,386 57,079 85,201
--------- --------- --------- ---------
Less cost of units redeemed:
Administrative charges. ............................... 247 146 140 92
Policy loans .......................................... 132 148 65 78
Surrender benefits .................................... 19,577 9,451 15,264 6,805
Death benefits ........................................ 1,438 650 1,736 413
--------- --------- --------- ---------
21,394 10,395 17,205 7,388
--------- --------- --------- ---------
Increase (decrease) in equity accounts from capital
unit transactions .................................... 99,357 77,991 39,874 77,813
--------- --------- --------- ---------
Net increase (decrease) in equity accounts. ........... 143,557 115,997 83,050 94,654
Depositor's equity contribution (redemption) ........... 0 0 0 0
EQUITY ACCOUNTS:
Beginning of period .................................... 227,955 111,958 196,305 101,651
--------- --------- --------- ---------
End of period .......................................... $ 371,512 $ 227,955 $ 279,355 $ 196,305
========= ========= ========= =========
</TABLE>
The notes to the financial statements are an integral part of this report.
24
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year ended
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
EMERGING GROWTH
SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 20,700 $ 5,806
Net gain (loss) on investments ....................... 18,088 14,108
--------- ---------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 38,788 19,914
--------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 54,227 63,633
--------- ---------
Less cost of units redeemed:
Administrative charges. ............................. 198 128
Policy loans ........................................ 114 109
Surrender benefits .................................. 12,701 8,246
Death benefits ...................................... 861 590
--------- ---------
13,874 9,073
--------- ---------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 40,353 54,560
--------- ---------
Net increase (decrease) in equity accounts. ......... 79,141 74,474
Depositor's equity contribution (redemption) ......... 0 0
EQUITY ACCOUNTS:
Beginning of period .................................. 179,589 105,115
--------- ---------
End of period ........................................ $ 258,730 $ 179,589
========= =========
<CAPTION>
AGGRESSIVE GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
------------------------- ------------------------
1997 1996 1997 1996
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 12,713 $ 1,823 $ 3,921 $ 585
Net gain (loss) on investments ....................... 11,949 6,050 1,279 1,594
--------- --------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 24,662 7,873 5,200 2,179
--------- --------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 45,729 36,889 12,830 12,103
--------- --------- -------- --------
Less cost of units redeemed:
Administrative charges. ............................. 135 70 24 14
Policy loans ........................................ 61 102 0 22
Surrender benefits .................................. 8,242 4,071 2,303 1,284
Death benefits ...................................... 384 107 535 79
--------- --------- -------- --------
8,822 4,350 2,862 1,399
--------- --------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 36,907 32,539 9,968 10,704
--------- --------- -------- --------
Net increase (decrease) in equity accounts. ......... 61,569 40,412 15,168 12,883
Depositor's equity contribution (redemption) ......... 0 0 0 (218)
EQUITY ACCOUNTS:
Beginning of period .................................. 100,832 60,420 28,734 16,069
--------- --------- -------- --------
End of period ........................................ $ 162,401 $ 100,832 $ 43,902 $ 28,734
========= ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
GROWTH &
INCOME
SUB-ACCOUNT (B)
DECEMBER 31
--------------------------
1997 1996
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 4,651 $ 822
Net gain (loss) on investments ....................... 1,110 816
--------- ---------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 5,761 1,638
--------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 13,075 9,551
--------- ---------
Less cost of units redeemed:
Administrative charges. ............................. 18 9
Policy loans ........................................ 14 12
Surrender benefits .................................. 1,590 811
Death benefits ...................................... 595 241
--------- ---------
2,217 1,073
--------- ---------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 10,858 8,478
--------- ---------
Net increase (decrease) in equity accounts. ......... 16,619 10,116
Depositor's equity contribution (redemption) ......... 0 (230)
EQUITY ACCOUNTS:
Beginning of period .................................. 19,972 10,086
--------- ---------
End of period ........................................ $ 36,591 $ 19,972
========= =========
<CAPTION>
TACTICAL ASSET
ALLOCATION C.A.S.E. GROWTH
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
------------------------- ------------------------
1997 1996 1997 1996 (C)
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 12,057 $ 3,678 $ 2,501 $ 200
Net gain (loss) on investments ....................... 10,512 5,793 (75) 640
--------- --------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 22,569 9,471 2,426 840
--------- --------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 58,937 51,801 18,228 11,840
--------- --------- -------- --------
Less cost of units redeemed:
Administrative charges. ............................. 70 32 12 1
Policy loans ........................................ 36 23 7 11
Surrender benefits .................................. 11,696 7,426 951 151
Death benefits ...................................... 1,197 514 206 0
--------- --------- -------- --------
12,999 7,995 1,176 163
--------- --------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 45,938 43,806 17,052 11,677
--------- --------- -------- --------
Net increase (decrease) in equity accounts. ......... 68,507 53,277 19,478 12,517
Depositor's equity contribution (redemption) ......... 0 0 (25) 25
EQUITY ACCOUNTS:
Beginning of period .................................. 125,577 72,300 12,542 0
--------- --------- -------- --------
End of period ........................................ $ 194,084 $ 125,577 $ 31,995 $ 12,542
========= ========= ======== ========
</TABLE>
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
25
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year or period ended
All amounts in thousands
----------------------------------
<TABLE>
<CAPTION>
GLOBAL SECTOR VALUE EQUITY
SUB-ACCOUNT (D) SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
------------------------- --------------------------
1997 1996 (C) 1997 1996 (C)
------------ ---------- ------------ -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ 416 $ 5 $ 384 $ 19
Net gain (loss) on investments ....................... (382) 122 10,382 1,562
-------- -------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ..................................... 34 127 10,766 1,581
-------- -------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 7,204 3,410 67,627 22,294
-------- -------- -------- --------
Less cost of units redeemed:
Administrative charges .............................. 3 1 26 2
Policy loans ........................................ 1 0 10 6
Surrender benefits .................................. 390 27 4,425 258
Death benefits ...................................... 9 0 248 0
-------- -------- -------- --------
403 28 4,709 266
-------- -------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 6,801 3,382 62,918 22,028
-------- -------- -------- --------
Net increase (decrease) in equity accounts .......... 6,835 3,509 73,684 23,609
Depositor's equity contribution (redemption) ......... 0 0 (171) 150
EQUITY ACCOUNTS:
Beginning of period .................................. 3,509 0 23,759 0
-------- -------- -------- --------
End of period ........................................ $ 10,344 $ 3,509 $ 97,272 $ 23,759
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL U.S.
EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
1997 (E) 1997 (E)
---------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................... $ (35) $ 839
Net gain (loss) on investments ....................... (219) 891
-------- --------
Net increase (decrease) in equity accounts resulting
from operations ..................................... (254) 1,730
-------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .................. 11,350 26,831
-------- --------
Less cost of units redeemed:
Administrative charges .............................. 2 2
Policy loans ........................................ 5 0
Surrender benefits .................................. 248 1,886
Death benefits ...................................... 0 1
-------- --------
255 1,889
-------- --------
Increase (decrease) in equity accounts from capital
unit transactions .................................. 11,095 24,942
-------- --------
Net increase (decrease) in equity accounts. ......... 10,841 26,672
Depositor's equity contribution (redemption) ......... 300 150
EQUITY ACCOUNTS:
Beginning of period .................................. 0 0
-------- --------
End of period ........................................ $ 11,141 $ 26,822
======== ========
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) The inception date of this sub-account was May 1, 1996.
(d) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
(e) The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
26
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
MONEY MARKET SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
Accumulation unit value, beginning of period ........................ $ 11.12 $ 10.73
Income from operations:
Net investment income (loss) ...................................... 0.43 0.39
Net realized and unrealized gain (loss) on investments ............ 0.00 0.00
------- -------
Total income (loss) from operations. ............................. 0.43 0.39
------- -------
Accumulation unit value, end of period .............................. $ 11.55 $ 11.12
======= =======
Total return (a) .................................................... 3.84% 3.65%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 62,152 $ 58,415
Ratios of net investment income (loss) to average net assets (b) .. 3.78% 3.57%
<CAPTION>
MONEY MARKET SUB-ACCOUNT
DECEMBER 31
-------------------------------------
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ........................ $ 10.32 $ 10.11 $ 10.01
Income from operations:
Net investment income (loss) ...................................... 0.41 0.21 0.10
Net realized and unrealized gain (loss) on investments ............ 0.00 0.00 0.00
------- ------- -------
Total income (loss) from operations. ............................. 0.41 0.21 0.10
------- ------- -------
Accumulation unit value, end of period .............................. $ 10.73 $ 10.32 $ 10.11
======= ======= =======
Total return (a) .................................................... 3.96% 2.07% 1.01%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 28,524 $ 28,537 $ 8,786
Ratios of net investment income (loss) to average net assets (b) .. 3.89% 2.26% 1.03%
</TABLE>
<TABLE>
<CAPTION>
BOND SUB-ACCOUNT
DECEMBER 31
------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period ....................... $ 12.46 $ 12.61 $ 10.40 $ 11.33 $ 10.14
Income from operations:
Net investment income (loss) ..................................... 0.67 0.56 0.64 0.52 2.69
Net realized and unrealized gain (loss) on investments ........... 0.28 ( 0.71) 1.57 ( 1.45) ( 1.50)
------- ------- ------- ------- -------
Total income (loss) from operations. ............................ 0.95 ( 0.15) 2.21 ( 0.93) 1.19
------- ------- ------- ------- -------
Accumulation unit value, end of period ............................. $ 13.41 $ 12.46 $ 12.61 $ 10.40 $ 11.33
======= ======= ======= ======= =======
Total return (a) ................................................... 7.64% ( 1.25%) 21.28% ( 8.23%) 11.81%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 64,376 $38,055 $32,772 $17,614 $17,280
Ratios of net investment income (loss) to average net assets (b) .. 5.26% 4.60% 5.45% 4.91% 24.79%
</TABLE>
<TABLE>
<CAPTION>
GROWTH SUB-ACCOUNT
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ....................... $ 16.02 $ 13.77
Income from operations:
Net investment income (loss) ..................................... 1.87 0.95
Net realized and unrealized gain (loss) on investments ........... 0.68 1.30
-------- --------
Total income (loss) from operations. ............................ 2.55 2.25
-------- --------
Accumulation unit value, end of period ............................. $ 18.57 $ 16.02
======== ========
Total return (a) ................................................... 15.91% 16.32%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 432,125 $ 317,705
Ratios of net investment income (loss) to average net assets (b) .. 10.53% 6.21%
<CAPTION>
GROWTH SUB-ACCOUNT
DECEMBER 31
----------------------------------------
1995 1994 1993
------------- -------------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ....................... $ 9.49 $ 10.50 $ 10.24
Income from operations:
Net investment income (loss) ..................................... 1.30 ( 0.03) 0.31
Net realized and unrealized gain (loss) on investments ........... 2.98 ( 0.98) ( 0.05)
-------- -------- --------
Total income (loss) from operations. ............................ 4.28 ( 1.01) 0.26
-------- -------- --------
Accumulation unit value, end of period ............................. $ 13.77 $ 9.49 $ 10.50
======== ======== ========
Total return (a) ................................................... 45.08% ( 9.58%) 2.55%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 198,139 $ 112,383 $ 87,415
Ratios of net investment income (loss) to average net assets (b) .. 11.07% ( 0.26%) 3.14%
</TABLE>
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
27
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
GLOBAL SUB-ACCOUNT
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ........................ $ 20.43 $ 16.22
Income from operations:
Net investment income (loss) ...................................... 2.85 1.79
Net realized and unrealized gain (loss) on investments ............ 0.64 2.42
-------- --------
Total income (loss) from operations. ............................. 3.49 4.21
-------- --------
Accumulation unit value, end of period .............................. $ 23.92 $ 20.43
======== ========
Total return (a) .................................................... 17.10% 25.96%
Ratios and supplemental data:
Net assets at end of period (in thousands) ......................... $ 371,512 $ 227,955
Ratios of net investment income (loss) to average net assets (b) ... 12.33% 9.45%
<CAPTION>
GLOBAL SUB-ACCOUNT
DECEMBER 31
-------------------------------------
1995 1994 1993
------------- ----------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ........................ $ 13.36 $ 13.52 $ 10.15
Income from operations:
Net investment income (loss) ...................................... 0.43 0.53 0.11
Net realized and unrealized gain (loss) on investments ............ 2.43 ( 0.69) 3.26
-------- ------- -------
Total income (loss) from operations. ............................. 2.86 ( 0.16) 3.37
-------- ------- -------
Accumulation unit value, end of period .............................. $ 16.22 $ 13.36 $ 13.52
======== ======= =======
Total return (a) .................................................... 21.35% ( 1.14%) 33.17%
Ratios and supplemental data:
Net assets at end of period (in thousands) ......................... $ 111,958 $95,829 $29,905
Ratios of net investment income (loss) to average net assets (b) ... 2.96% 3.95% 0.99%
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC TOTAL RETURN
SUB-ACCOUNT (H)
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 15.37 $ 13.56
Income from operations:
Net investment income (loss) ....................................... 1.42 0.94
Net realized and unrealized gain (loss) on investments ............. 1.68 0.87
-------- --------
Total income (loss) from operations ............................... 3.10 1.81
-------- --------
Accumulation unit value, end of period ............................... $ 18.47 $ 15.37
======== ========
Total return (a) ..................................................... 20.16% 13.40%
Ratios and supplemental data:
Net assets at end of period (in thousands) ......................... $ 279,355 $ 196,305
Ratios of net investment income (loss) to average net assets (b) ... 8.31% 6.55%
<CAPTION>
STRATEGIC TOTAL RETURN SUB-ACCOUNT (H)
DECEMBER 31
-------------------------------------
1995 1994 1993 (C)
------------- ----------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.03 $ 11.24 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.59 0.16 0.20
Net realized and unrealized gain (loss) on investments ............. 1.94 ( 0.37) 1.04
-------- ------- -------
Total income (loss) from operations ............................... 2.53 ( 0.21) 1.24
-------- ------- -------
Accumulation unit value, end of period ............................... $ 13.56 $ 11.03 $ 11.24
======== ======= =======
Total return (a) ..................................................... 22.93% ( 1.92%) 12.43%
Ratios and supplemental data:
Net assets at end of period (in thousands) ......................... $ 101,651 $71,733 $28,312
Ratios of net investment income (loss) to average net assets (b) ... 4.76% 1.49% 2.24%
</TABLE>
<TABLE>
<CAPTION>
EMERGING GROWTH SUB-ACCOUNT
DECEMBER 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 19.15 $ 16.34
Income from operations:
Net investment income (loss) ....................................... 2.00 0.73
Net realized and unrealized gain (loss) on investments ............. 1.79 2.08
-------- --------
Total income (loss) from operations. .............................. 3.79 2.81
-------- --------
Accumulation unit value, end of period ............................... $ 22.94 $ 19.15
======== ========
Total return (a) ..................................................... 19.77% 17.23%
Ratios and supplemental data:
Net assets at end of period (in thousands) ......................... $ 258,730 $ 179,589
Ratios of net investment income (loss) to average net assets (b) ... 9.45% 3.96%
<CAPTION>
EMERGING GROWTH SUB-ACCOUNT
DECEMBER 31
--------------------------------------
1995 1994 1993 (C)
------------- ------------ -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.29 $ 12.35 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.54 ( 0.15) ( 0.14)
Net realized and unrealized gain (loss) on investments ............. 4.51 ( 0.91) 2.49
-------- ------- -------
Total income (loss) from operations. .............................. 5.05 ( 1.06) 2.35
-------- ------- -------
Accumulation unit value, end of period ............................... $ 16.34 $ 11.29 $ 12.35
======== ======= =======
Total return (a) ..................................................... 44.75% ( 8.65%) 23.54%
Ratios and supplemental data:
Net assets at end of period (in thousands) ......................... $ 105,115 $62,615 $25,444
Ratios of net investment income (loss) to average net assets (b) ... 3.85% ( 1.33%) ( 1.44%)
</TABLE>
The notes to the financial statements are an integral part of this report.
28
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH SUB-ACCOUNT
DECEMBER 31
---------------------------------------------------
1997 1996 1995 1994 (D)
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ........................ $ 14.50 $ 13.31 $ 9.78 $ 10.00
Income from operations:
Net investment income (loss) ...................................... 1.60 0.31 0.40 ( 0.10)
Net realized and unrealized gain (loss) on investments ............ 1.67 0.88 3.13 ( 0.12)
-------- -------- ------- -------
Total income (loss) from operations .............................. 3.27 1.19 3.53 ( 0.22)
-------- -------- ------- -------
Accumulation unit value, end of period .............................. $ 17.77 $ 14.50 $ 13.31 $ 9.78
======== ======== ======= =======
Total return (a) .................................................... 22.52% 8.91% 36.10% ( 2.18%)
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 162,401 $ 100,832 $60,420 $11,403
Ratios of net investment income (loss) to average net assets (b) .. 9.55% 2.22% 3.04% ( 1.19%)
</TABLE>
<TABLE>
<CAPTION>
BALANCED SUB-ACCOUNT
DECEMBER 31
------------------------------------------------------
1997 1996 1995 1994 (D)
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ........................ $ 12.05 $ 11.03 $ 9.34 $ 10.00
Income from operations:
Net investment income (loss) ...................................... 1.40 0.30 0.32 0.27
Net realized and unrealized gain (loss) on investments ............ 0.46 0.72 1.37 ( 0.93)
------- ------- ------- -------
Total income (loss) from operations. .............................. 1.86 1.02 1.69 ( 0.66)
------- ------- ------- -------
Accumulation unit value, end of period .............................. $ 13.91 $ 12.05 $ 11.03 $ 9.34
======= ======= ======= =======
Total return (a) .................................................... 15.47% 9.18% 18.13% ( 6.61%)
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $43,902 $ 28,734 $16,069 $ 7,936
Ratios of net investment income (loss) to average net assets (b) .. 10.72% 2.69% 3.16% 3.48%
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME SUB-ACCOUNT (I)
DECEMBER 31
-----------------------------------------------------
1997 1996 1995 1994 (D)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ........................ $ 12.85 $ 11.68 $ 9.45 $ 10.00
Income from operations:
Net investment income (loss) ...................................... 2.52 0.68 0.47 0.33
Net realized and unrealized gain (loss) on investments ............ 0.43 0.49 1.76 ( 0.88)
------- ------- ------- -------
Total income (loss) from operations. ............................. 2.95 1.17 2.23 ( 0.55)
------- ------- ------- -------
Accumulation unit value, end of period .............................. $ 15.80 $ 12.85 $ 11.68 $ 9.45
======= ======= ======= =======
Total return (a) .................................................... 22.92% 10.08% 23.52% ( 5.47%)
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $36,591 $19,972 $10,086 $ 3,786
Ratios of net investment income (loss) to average net assets (b) .. 18.15% 5.68% 4.50% 4.18%
</TABLE>
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
29
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
DECEMBER 31
-------------------------------------------
1997 1996 1995 (E)
------------- ------------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ........................ $ 13.36 $ 11.84 $ 10.00
Income from operations:
Net investment income (loss) ...................................... 1.06 0.47 0.82
Net realized and unrealized gain (loss) on investments ............ 0.94 1.05 1.02
-------- -------- -------
Total income (loss) from operations. ............................. 2.00 1.52 1.84
-------- -------- -------
Accumulation unit value, end of period .............................. $ 15.36 $ 13.36 $ 11.84
======== ======== =======
Total return (a) .................................................... 14.97% 12.83% 18.43%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 194,084 $ 125,577 $72,300
Ratios of net investment income (loss) to average net assets (b) .. 7.30% 3.72% 7.29%
</TABLE>
<TABLE>
<CAPTION>
C.A.S.E. GROWTH
SUB-ACCOUNT
DECEMBER 31
--------------------------
1997 1996 (F)
------------ -----------
<S> <C> <C>
Accumulation unit value, beginning of period ........................ $ 10.77 $ 10.00
Income from operations:
Net investment income (loss) ...................................... 1.34 0.36
Net realized and unrealized gain (loss) on investments ............ 0.11 0.41
------- --------
Total income (loss) from operations. ............................. 1.45 0.77
------- --------
Accumulation unit value, end of period .............................. $ 12.22 $ 10.77
======= ========
Total return (a) .................................................... 13.43% 7.73%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 31,995 $ 12,542
Ratios of net investment income (loss) to average net assets (b) .. 11.31% 5.46%
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SECTOR SUB-ACCOUNT (J)
DECEMBER 31
--------------------------
1997 1996 (F)
------------ -----------
<S> <C> <C>
Accumulation unit value, beginning of period ........................ $ 10.51 $ 10.00
Income from operations:
Net investment income (loss) ...................................... 0.69 0.04
Net realized and unrealized gain (loss) on investments ............ ( 0.48) 0.47
-------- -------
Total income (loss) from operations. ............................. 0.21 0.51
-------- -------
Accumulation unit value, end of period .............................. $ 10.72 $ 10.51
======== =======
Total return (a) .................................................... 1.99% 5.09%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $ 10,344 $ 3,509
Ratios of net investment income (loss) to average net assets (b) .. 6.30% 0.59%
</TABLE>
The notes to the financial statements are an integral part of this report.
30
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
----------------------------------
<TABLE>
<CAPTION>
VALUE EQUITY SUB-ACCOUNT
DECEMBER 31
-------------------------
1997 1996 (F)
----------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period ....................... $ 11.21 $ 10.00
Income from operations:
Net investment income (loss) ..................................... 0.08 0.02
Net realized and unrealized gain (loss) on investments ........... 2.54 1.19
------- -------
Total income (loss) from operations. ............................ 2.62 1.21
------- -------
Accumulation unit value, end of period ............................. $ 13.83 $ 11.21
======= =======
Total return (a) ................................................... 23.30% 12.13%
Ratios and supplemental data:
Net assets at end of period (in thousands) ........................ $97,272 $23,759
Ratios of net investment income (loss) to average net assets (b) .. 0.63% 0.33%
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY U.S. EQUITY
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
1997 (G) 1997 (G)
---------------- --------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 10.00 $ 10.00
Income from operations:
Net investment income (loss) ....................................... ( 0.06) 0.95
Net realized and unrealized gain (loss) on investments ............. 0.66 1.58
------- -------
Total income (loss) from operations. .............................. 0.60 2.53
------- -------
Accumulation unit value, end of period ............................... $ 10.60 $ 12.53
======= =======
Total return (a) ..................................................... 6.01% 25.26%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $11,141 $26,822
Ratios of net investment income (loss) to average net assets (b) .... ( 0.58%) 7.99%
</TABLE>
* The above tables illustrate the change for a unit outstanding computed using
average units outstanding throughout each period. See Notes to Selected Per
Unit Data and Ratios below.
NOTES TO SELECTED PER UNIT DATA AND RATIOS:
(a) For periods less than one year, the total return is not annualized.
(b) For periods less than one year, the ratio of net investment income to
average net assets is annualized.
(c) The inception date of this sub-account was March 1, 1993.
(d) The inception date of this sub-account was March 1, 1994.
(e) The inception date of this sub-account was January 3, 1995.
(f) The inception date of this sub-account was May 1, 1996.
(g) The inception date of this sub-account was January 2, 1997.
(h) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(i) Prior to May 1, 1997, this sub-account was known as Utility.
(j) Prior to March 1, 1997, this sub-account was known as Meridian/INVESCO
Global Sector.
The notes to the financial statements are an integral part of this report.
1 9 9 7 A n n u a l R e p o r t
31
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
--------------------------------------------------------
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 encompasses various contract types: the WRL Freedom Variable Annuity
and the WRL Freedom Attainer ("Freedom and Attainer"); the WRL Freedom
Bellwether, the WRL Freedom Conqueror, and the WRL Freedom Wealth Creator
("Bellwether, Conqueror, and Creator"). Information presented in these
financial statements pertains only to Bellwether, Conqueror, and Creator
contracts. The financial statements for Freedom and Attainer contracts are
presented separately. Each contains fifteen investment options referred to as
sub-accounts. Each sub-account invests in the corresponding Portfolio of the
WRL Series Fund, Inc. (collectively referred to as the "Fund" and individually
as a |P`Portfolio|P'), a registered management investment company under the
Investment Company Act of 1940, as amended.
The Fund has entered into annually renewable investment advisory agreements
for each Portfolio with WRL Investment Management, Inc. (|P`WRL Management|P')
as investment adviser. Costs incurred in connection with the advisory services
rendered by WRL Management are paid by each Portfolio. WRL Management has
entered into sub-advisory agreements with various management companies, some of
which are affiliates of WRL. Each sub-adviser is compensated directly by WRL
Management.
Effective March 1, 1997, the name of the Meridian/INVESCO Global Sector
Sub-Account was changed to Global Sector Sub-Account. Effective May 1, 1997, the
names of the Equity-Income and Utility Sub-Accounts were changed to the
Strategic Total Return and Growth & Income Sub-Accounts, respectively.
On December 16, 1997, pursuant to an exemptive order (Rel. No. IC-22944)
received from the Securities and Exchange Commission for the substitution of
securities issued by the WRL Series Fund and held by the Annuity Series Account
to support individual flexible premium deferred variable annuity contracts,
investments were transferred from the Short-to-Intermediate Government
Sub-Account to the Bond Sub-Account.
On January 2, 1997, WRL made an initial contribution of $ 450,000 to the
Bellwether, Conqueror, and Creator Annuity Account. The amount of the
contribution and units received were as follows:
<TABLE>
<CAPTION>
SUB-ACCOUNT CONTRIBUTION UNITS
- ----------------------- -------------- ------------------
<S> <C> <C>
International Equity $ 300,000 30,000.000000
U.S. Equity $ 150,000 15,000.000000
</TABLE>
Bellwether, Conqueror, and Creator sub-accounts hold assets to support the
benefits under certain flexible payment variable accumulation deferred annuity
contracts (the "Contracts") issued by WRL. The Annuity Account equity
transactions are accounted for using the appropriate effective date at the
corresponding accumulation unit value.
The following significant accounting policies, which are in conformity with
generally accepted accounting principles for unit investment trusts, have been
consistently applied in the preparation of the Trust's financial statements.
A. VALUATION OF INVESTMENTS AND SECURITIES TRANSACTIONS
Investments in the Fund's shares are stated at the closing net asset value
("NAV") per share as determined by the Fund. Investment transactions are
accounted for on the trade date at the Fund NAV next determined after receipt
of sale or redemption orders without sales charges. Dividend income and capital
gains 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.
C. ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
32
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(continued)
----------------------------------
NOTE 2 -- CHARGES AND DEDUCTIONS
Charges are assessed by WRL in connection with the issuance and
administration of the Contracts.
A. CONTRACT CHARGES
No deduction for sales expenses is 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. BELLWETHER, CONQUEROR, AND CREATOR
SUB-ACCOUNT CHARGES
A daily charge equal to an annual rate of 1.40% 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 Money Market Portfolio are declared daily and reinvested
monthly. Dividends of the remaining Portfolios are typically declared and
reinvested semi-annually, while capital gains distributions are declared and
reinvested annually. Dividends and distributions of the Fund are recorded on
the ex-date and generally are paid to and reinvested by the Annuity Account on
the next business day after the ex-date. Dividends are not declared by the
Annuity Account, since the increase in the value of the underlying investment
in the Fund is reflected daily in the unit price used to calculate the equity
value within the Annuity Account. Consequently, a dividend distribution by the
underlying Fund does not change either the unit price or equity values within
the Annuity Account.
NOTE 4 -- SECURITIES TRANSACTIONS
Securities transactions are summarized as follows:
For the year or period ended December 31, 1997 (in thousands)
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
Purchase of long-term securities .................... $ 153,633 $ 37,443 $ 122,522
Proceeds from sales of long-term securities ......... 149,511 12,120 21,149
STRATEGIC TOTAL EMERGING
GLOBAL RETURN GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities .................... $ 168,791 $ 73,081 $ 96,258
Proceeds from sales of long-term securities ......... 29,502 13,988 35,413
AGGRESSIVE GROWTH &
GROWTH BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities .................... $ 66,644 $ 16,681 $ 17,644
Proceeds from sales of long-term securities ......... 16,716 2,519 2,580
TACTICAL ASSET C.A.S.E. GLOBAL
ALLOCATION GROWTH SECTOR
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities .................... $ 71,332 $ 21,245 $ 8,746
Proceeds from sales of long-term securities ......... 13,328 2,451 1,529
VALUE INTERNATIONAL U.S.
EQUITY EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT (A) SUB-ACCOUNT (A)
Purchase of long-term securities .................... $ 69,688 $ 13,905 $ 33,124
Proceeds from sales of long-term securities ......... 6,530 2,545 6,868
</TABLE>
(a) The inception date of this sub-account was January 2, 1997.
1 9 9 7 A n n u a l R e p o r t
33
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(continued)
----------------------------------
NOTE 5 -- EQUITY TRANSACTIONS
For the year or period ended December 31, 1997
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
Units balance - beginning of year ........... 5,253,582.115062 3,055,304.507335 19,832,581.763517
Units issued ................................ 26,457,168.318053 3,754,132.232864 9,816,793.075188
Units redeemed .............................. 26,327,904.562316 2,007,692.277001 6,377,123.312835
----------------- ----------------- -----------------
Units balance - end of year ................. 5,382,845.870799 4,801,744.463198 23,272,251.525870
================= ================= =================
STRATEGIC TOTAL EMERGING
GLOBAL RETURN GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 11,159,128.232837 12,770,553.738705 9,376,916.835961
Units issued ................................ 9,373,185.986939 5,550,942.020136 6,544,341.394624
Units redeemed .............................. 5,001,648.009884 3,197,198.726902 4,641,655.045572
----------------- ----------------- -----------------
Units balance - end of year ................. 15,530,666.209892 15,124,297.031939 11,279,603.185013
================= ================= =================
AGGRESSIVE GROWTH &
GROWTH BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 6,954,084.354037 2,385,500.177475 1,553,810.728349
Units issued ................................ 5,494,774.016914 1,449,305.357557 1,325,425.819180
Units redeemed .............................. 3,307,543.066245 678,451.551534 563,244.899766
----------------- ----------------- -----------------
Units balance - end of year ................. 9,141,315.304706 3,156,353.983498 2,315,991.647763
================= ================= =================
TACTICAL ASSET C.A.S.E. GLOBAL
ALLOCATION GROWTH SECTOR
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 9,397,630.629186 1,164,233.311699 333,942.618296
Units issued ................................ 6,245,046.647926 2,141,602.077583 877,896.228903
Units redeemed .............................. 3,009,500.674397 687,551.420222 246,782.029591
----------------- ----------------- -----------------
Units balance - end of year ................. 12,633,176.602715 2,618,283.969060 965,056.817608
================= ================= =================
VALUE INTERNATIONAL U.S.
EQUITY EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT (A) SUB-ACCOUNT (A)
Units balance - beginning of period ......... 2,118,820.411102 N/A N/A
Units issued ................................ 7,466,205.916025 1,505,190.895915 3,215,142.122881
Units redeemed .............................. 2,549,894.467369 454,206.407051 1,073,727.661846
----------------- ----------------- ------------------
Units balance - end of period ............... 7,035,131.859758 1,050,984.488864 2,141,414.461035
================= ================= ==================
</TABLE>
(a) The inception date of this sub-account was January 2, 1997.
34
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
WRL SERIES ANNUITY ACCOUNT
BELLWETHER, CONQUEROR, AND CREATOR
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(continued)
----------------------------------
NOTE 6 -- OTHER MATTERS
At December 31, 1997, the equity accounts included net unrealized
appreciation (depreciation) on investments as follows (in thousands):
<TABLE>
<CAPTION>
SUB-ACCOUNT
- ---------------------------------------
<S> <C>
Money Market ........................ $ N/A
Bond ................................ 59
Growth .............................. 50,768
Global .............................. 20,580
Strategic Total Return .............. 36,919
Emerging Growth ..................... 31,861
Aggressive Growth ................... 12,118
Balanced ............................ 3,532
Growth & Income ..................... 1,821
Tactical Asset Allocation ........... 13,003
C.A.S.E. Growth ..................... 201
Global Sector ....................... (407)
Value Equity ........................ 10,483
International Equity ................ (383)
U.S. Equity ......................... 83
</TABLE>
35
1 9 9 7 A n n u a l R e p o r t
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
36
W R L S e r i e s A n n u i t y A c c o u n t
<PAGE>
/diamond/
WRL SERIES ANNUITY ACCOUNT
OFFICE OF
WRL SERIES ANNUITY ACCOUNT
201 Highland Avenue
Largo, FL 33770-2597
1-800-851-9777
DISTRIBUTOR:
InterSecurities, Inc.
201 Highland Avenue
Largo, FL 33770-2597
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>
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.
[WRL LOGO]
--------------------------------------------------
Western Reserve Life Assurance Co. of Ohio
Distributor: InterSecurities, Inc.
201 Highland Avenue /bullet/ Largo, Florida 33770-2597
February 1998
ACC00002 (2/98)
