AUL American Unit Trust
Annual Report
December 31, 1996
asxc
This report may be used as sales literature only when accompanied or preceded by
effective prospectuses of AUL
American Series Fund, Inc. and AUL American Unit Trust, which relate sales
expense and other pertinent
information.
<PAGE>
A Message
From
The Chairman of the Board
and President of
AUL American Series Fund, Inc.
To Participants in AUL American Unit Trust
The U.S. economy continued its moderate expansion during 1996. Investors began
the year fearing that the
economic growth rate would accelerate, forcing the Federal Reserve to tighten
monetary policy. However, GDP
(gross domestic product) grew at a sustainable pace during the year while core
inflation remained subdued. This
seemed to have the effect of calming investors and reduced prospects for
monetary tightening by the Federal
Reserve in the near term.
The stock market experienced another rewarding year in 1996 with the Dow Jones
Industrial Average and the
S&P 500 (commonly quoted equity indices) establishing new highs throughout the
year. Throughout 1996,
investors continued to react positively to the combination of slow growth and
moderate inflation. However, not
all stocks had identical performance. These major equity indices were driven by
the superior returns of large
capitalization growth companies while small and medium size companies lagged
conspicuously.
Long maturity Treasury bonds yielded just below 6% at the beginning of 1996. By
midyear, however, investors
were increasingly concerned about the inflationary impact of rapid employment
growth in the U.S. economy.
Long maturity Treasury bond yields increased to more than 7%. Although a brief
market rally occurred in the
fourth quarter, year-end intermediate and longer maturity bond yields remained
seventy to eighty basis points
above levels at the beginning of the year. Because of the move to higher
interest rates and lower bond prices in
1996, bond market returns were modest, especially relative to stock market
returns.
At the present time, economists are expecting 1997 to be another year of
moderate growth and low inflation. The
Federal Reserve is expected to stay on the sidelines until concrete evidence of
excessive economic growth or
weakness surfaces. Interest rates will be highly dependent upon the Federal
Reserve Bank's reaction to the
various indicators of economic growth and inflation.
Equity investors have now experienced two back-to-back years of excellent stock
performance. Even after the
exuberance of the last two years, the major stock averages could still post
further gains during 1997, but the gains
are expected to be on a more modest scale. The market could also experience
increased volatility as equity
concerns heighten. Good bond performance is likely to be highly dependent on
investors' comfort level with the
pace of economic growth and continued moderate inflation.
James W. Murphy
Chairman of the Board of Directors and President
Indianapolis, Indiana
January 15, 1997
<PAGE>
(This page is intentionally blank.)
<PAGE>
Report of Independent Accountants
The Contract Owners of
AUL American Unit Trust and
Board of Directors of
American United Life Insurance Company
We have audited the accompanying statements of net assets of AUL American Unit
Trust as of December 31,
1996, and the related statements of operations and changes in net assets for
each of the two years in the period
then ended. These financial statements are the responsibility of the Trust's
management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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.Our procedures included confirmation of
securities owned as of December
31, 1996, by correspondence with the custodian. An audit also includes assessing
the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial
position of AUL American Unit Trust as of December 31, 1996, and the results of
its operations and changes in net
assets for each of the two years in the period then ended, in conformity with
generally accepted accounting principles.
Indianapolis, Indiana
January 31, 1997<PAGE>
AUL American Unit Trust
statementS of net assets
December 31, 1996
Series Fund Fidelity
EquityMoney Market Bond Managed High Income
Growth
Assets:
Investment at market
value $ 22,318,068 $ 4,836,248 $ 7,327,011 $ 18,542,385 $ 9,663,097
$ 38,471,516
Net Assets $ 22,318,068 $ 4,836,248 $ 7,327,011 $ 18,542,385 $ 9,663,097
$ 38,471,516
Units outstanding 10,589,355 3,931,272 4,535,171 10,087,186 6,679,227
22,560,070
Accumulation Unit Value $ 2.11 $ 1.23 $ 1.62 $ 1.84 $ 1.45
$ 1.71
The accompanying notes are an integral part of the financial statements.
<PAGE>
AUL American Unit Trust
statementS of net assets (continued)
December 31, 1996
Fidelity
TCI
Overseas Asset Manager Index 500 Equity-Income Contrafund
TCI Growth
Assets:
Investment at market
value $ 11,408,246 $ 36,766,256 $ 17,165,451 $ 5,858,153 $ 7,059,625
$ 2,189,442
Net Assets $11,408,246 $36,766,256 $17,165,451 $ 5,858,153 $ 7,059,625
$ 2,189,442
Units outstanding 8,245,189 26,868,078 9,841,199 4,243,459 4,656,175
1,785,854
Accumulation Unit Value $ 1.38 $ 1.37 $ 1.74 $ 1.38 $ 1.52
$ 1.23
The accompanying notes are an integral part of the financial statements.
<PAGE>
AUL American Unit Trust
statementS of net assets (continued)
December 31, 1996
Alger Calvert T. Rowe Price
American Capital
GrowthAccumulation Equity Income
Assets:
Investment at market
value $ 9,407,497 $ 1,302,913 $ 6,185,542
Net Assets $ 9,407,497 $ 1,302,913 $ 6,185,542
Units outstanding 6,674,992 970,440 4,259,154
Accumulation Unit Value $ 1.41 $ 1.34 $ 1.45
The accompanying notes are an integral part of the financial statements.
<PAGE>
AUL American Unit Trust
statementS of operations and changes in net assets
for the years ended December 31, 1996 and 1995
Series Fund
Equity Money Market Bond
1996 1995 1996 1995 1996 1995
Operations:
Dividend income $ 342,380 $ 484,382 $ 196,825 $ 90,815 $ 400,603
$ 295,780
Mortality & expense
charges 241,613 180,862 52,481 21,626 81,206
56,947
Net Investment Income
(Expense) 100,767 303,520 144,344 69,189 319,397
238,833
Gain (Loss) on Investments:
Net realized gain (loss) 757,430 340,866 (29,008)
(41,640)
Net change in
unrealized gain (loss) 2,298,293 1,723,846 (194,208)
478,688
Net Gain (Loss) 3,055,723 2,064,712 (223,216)
437,048
Increase (Decrease)
in Assets from
Operations 3,156,490 2,368,232 144,344 69,189 96,181
675,881
Contract Owner Transactions:
Proceeds from units sold 5,750,853 5,109,255 19,881,137 6,141,734 2,965,354
2,165,809
Cost of units redeemed (3,302,017)(2,106,682)(17,646,620)(4,993,063)(1,514,837)
(693,221)
Increase 2,448,836 3,002,573 2,234,517 1,148,671 1,450,517
1,472,588
Net increase 5,605,326 5,370,805 2,378,861 1,217,860 1,546,698
2,148,469
Net Assets, beginning 16,712,742 11,341,937 2,457,387 1,239,527 5,780,313
3,631,844
Net Assets, ending $22,318,068 $16,712,742 $ 4,836,248 $ 2,457,387 $7,327,011
$ 5,780,313
Units sold 2,955,925 3,111,938 16,432,700 5,234,868 1,883,899
1,429,982
Units redeemed (1,698,792) (1,250,871) (14,567,921) (4,252,203) (962,211)
(457,399)
Net increase 1,257,133 1,861,067 1,864,779 982,665 921,688
972,583
Units outstanding, beginning9,332,222 7,471,155 2,066,493 1,083,828 3,613,483
2,640,900
Units outstanding, ending 10,589,355 9,332,222 3,931,272 2,066,493 4,535,171
3,613,483
The accompanying notes are an integral part of the financial statements.
<PAGE>
AUL American Unit Trust
statementS of operations and changes in net assets (continued)
for the years ended December 31, 1996 and 1995
Series Fund Fidelity
Managed High Income Growth
1996 1995 1996 1995 1996 1995
Operations:
Dividend income $ 601,614 $ 761,412 $ 559,290 $ 245,640 $ 1,686,076
$ 61,007
Mortality & expense
charges 210,007 168,071 97,295 57,956 384,618
210,009
Net Investment Income
(Expense) 391,607 593,341 461,995 187,684 1,301,458
(149,002)
Gain (Loss) on Investments:
Net realized gain (loss) 231,999 87,452 147,051 (33,043) 2,576,639
1,311,129
Net change in
unrealized gain (loss) 1,074,348 1,471,188 304,521 608,211 (241,271)
3,092,171
Net Gain (Loss) 1,306,347 1,558,640 451,572 575,168 2,335,368
4,403,300
Increase (Decrease)
in Assets from
Operations 1,697,954 2,151,981 913,567 762,852 3,636,826
4,254,298
Contract Owner Transactions:
Proceeds from units sold 3,787,607 3,348,132 4,302,859 2,876,963 20,256,098
13,359,280
Cost of units redeemed (2,327,899) (1,642,119) (1,616,681)(826,487)(7,954,526)
(5,494,211)
Increase 1,459,708 1,706,013 2,686,178 2,050,476 12,301,572
7,865,069
Net increase 3,157,662 3,857,994 3,599,745 2,813,328 15,938,398
12,119,367
Net Assets, beginning 15,384,723 11,526,729 6,063,352 3,250,024 22,533,118
10,413,751
Net Assets, ending $ 18,542,385 $15,384,723 $ 9,663,097 $ 6,063,352 $38,471,516
$ 22,533,118
Units sold 2,192,882 2,173,072 3,144,988 2,385,562 12,526,388
9,441,745
Units redeemed (1,347,716) (1,078,007) (1,185,689) (679,096) (4,932,924)
(3,722,429)
Net increase 845,166 1,095,065 1,959,299 1,706,466 7,593,464
5,719,316
Units outstanding, beginning 9,242,020 8,146,955 4,719,928 3,013,462 14,966,606
9,247,290
Units outstanding, ending 10,087,186 9,242,020 6,679,227 4,719,928 22,560,070
14,966,606
The accompanying notes are an integral part of the financial statements.
<PAGE>
AUL American Unit Trust
statementS of operations and changes in net assets (continued)
for the years ended December 31, 1996 and 1995
Fidelity
Overseas Asset Manager Index 500
1996 1995 1996 1995 1996 1995
Operations:
Dividend income $195,920 $ 42,737 $ 1,858,564 $ 447,091 $ 270,229
$ 42,513
Mortality & expense
charges 119,355 81,781 396,998 302,886 134,447
45,078
Net Investment Income
(Expense) 76,565 (39,044) 1,461,566 144,205 135,782
(2,565)
Gain (Loss) on Investments:
Net realized gain (loss) 588,813 45,929 304,397 (258,733) 1,142,520
229,280
Net change in
unrealized gain (loss) 428,901 552,120 2,252,257 3,680,015 903,193
813,537
Net Gain (Loss) 1,017,714 598,049 2,556,654 3,421,282 2,045,713
1,042,817
Increase (Decrease)
in Assets from
Operations 1,094,279 559,005 4,018,220 3,565,487 2,181,495
1,040,252
Contract Owner Transactions:
Proceeds from units sold 8,171,841 5,043,833 9,564,824 8,354,917 13,729,783
3,753,742
Cost of units redeemed (5,759,471) (3,125,876) (4,541,090)(4,648,335)(4,462,861)
(1,163,778)
Increase 2,412,370 1,917,957 5,023,734 3,706,582 9,266,922 2,589,964
Net increase 3,506,649 2,476,962 9,041,954 7,272,069 11,448,417
3,630,216
Net Assets, beginning 7,901,597 5,424,635 27,724,302 20,452,233 5,717,034
2,086,818
Net Assets, ending $ 11,408,246 $ 7,901,597 $ 36,766,256 $ 27,724,302
$ 17,165,451 $ 5,717,034
Units sold 6,289,170 4,294,825 7,528,818 7,530,175
8,642,574 2,896,935
Units redeemed (4,429,500) (2,657,590) (3,592,303) (4,138,988)
(2,778,057) (887,069)
Net increase 1,859,670 1,637,235 3,936,515 3,391,187
5,864,517 2,009,866
Units outstanding, beginning6,385,519 4,748,284 22,931,563 19,540,376
3,976,682 1,966,816
Units outstanding, ending 8,245,189 6,385,519 26,868,078 22,931,563
9,841,199 3,976,682
The accompanying notes are an integral part of the financial statements.
<PAGE>
AUL American Unit Trust
statementS of operations and changes IN net assets (continued)
for the years ended December 31, 1996 and 1995
Fidelity TCI
Equity-Income Contrafund TCI Growth
1996 1995(1) 1996 1995(1) 1996 1995
Operations:
Dividend income $ 57,407 $ 4,945 $ 11,446 $ 9,771
$ 158,096 $ 294
Mortality & expense
charges 41,210 1,815 45,564 1,740
20,981 6,369
Net Investment Income
(Expense) 16,197 3,130 (34,118) 8,031
137,115 (6,075)
Gain (Loss) on Investments:
Net realized gain (loss) 51,857 6,939 169,050 330
50,578 30,332
Net change in
unrealized gain (loss) 366,426 31,816 624,118 2,967
(299,498) 83,561
Net Gain (Loss) 418,283 38,755 793,168 3,297
(248,920) 113,893
Increase (Decrease)
in Assets from
Operations 434,480 41,885 759,050 11,328
(111,805) 107,818
Contract Owner Transactions:
Proceeds from units sold 5,379,426 895,659 6,820,829 902,616
1,647,386 712,144
Cost of units redeemed (887,971) (5,326) (1,395,994) (38,204)
(315,880) (104,945)
Increase 4,491,455 890,333 5,424,835 864,412
1,331,506 607,199
Net increase 4,925,935 932,218 6,183,885 875,740
1,219,701 715,017
Net Assets, beginning 932,218 875,740
969,741 254,724
Net Assets, ending $ 5,858,153 $ 932,218 $ 7,059,625 $ 875,740
$ 2,189,442 $ 969,741
Units sold 4,163,357 766,531 4,955,599 722,789
1,282,104 573,128
Units redeemed (682,030) (4,399) (991,402) (30,811)
(244,029) (79,665)
Net increase 3,481,327 762,132 3,964,197 691,978
1,038,075 493,463
Units outstanding, beginning 762,132 691,978
747,779 254,316
Units outstanding, ending 4,243,459 762,132 4,656,175 691,978
1,785,854 747,779
(1) for the period from March 31, 1995 through December 31, 1995
The accompanying notes are an integral part of the financial statements.
<PAGE>
AUL American Unit Trust
statementS of operations and changes in net assets (continued)
for the years ended December 31, 1996 and 1995
Alger Calvert T. Rowe Price
American GrowthCaptial Accumulation Equity Income
1996 1995(1) 1996 1995(1) 1996 1995(1)
Operations:
Dividend income $ 118,973 $ 1 $ 1,665 $ 4,737
$ 129,361 $ 4,044
Mortality & expense
charges 66,741 2,385 8,227 168
35,102 915
Net Investment Income
(Expense) 52,232 (2,384) (6,562) 4,569
94,259 3,129
Gain (Loss) on Investments:
Net realized gain (loss) 104,611 (2,334) 24,160 311
100,208 7,310
Net change in
unrealized gain (loss) 441,596 (7,041) 21,786 (3,357)
339,665 13,332
Net Gain (Loss) 546,207 (9,375) 45,946 (3,046)
439,873 20,642
Increase (Decrease)
in Assets from
Operations 598,439 (11,759) 39,384 1,523
534,132 23,771
Contract Owner Transactions:
Proceeds from units sold 11,464,782 1,405,304 8,157,650 101,227
6,412,176 465,993
Cost of units redeemed (3,951,097) (98,172) (6,984,043) (12,828)
(1,238,837) (11,693)
Increase 7,513,685 1,307,132 1,173,607 88,399
5,173,339 454,300
Net increase 8,112,124 1,295,373 1,212,991 89,922
5,707,471 478,071
Net Assets, beginning 1,295,373 89,922
478,071
Net Assets, ending $ 9,407,497 $ 1,295,373 $ 1,302,913 $ 89,922
$ 6,185,542 $ 478,071
Units sold 8,577,306 1,105,533 6,165,865 80,855
4,786,484 399,244
Units redeemed (2,931,153) (76,694) (5,266,458) (9,822)
(916,062) (10,512)
Net increase 5,646,153 1,028,839 899,407 71,033
3,870,422 388,732
Units outstanding, beginning1,028,839 71,033
388,732
Units outstanding, ending 6,674,992 1,028,839 970,440 71,033
4,259,154 388,732
(1) for the period from March 31, 1995 through December 31, 1995
The accompanying notes are an integral part of the financial statements.
<PAGE>
(This page is intentionally blank.)
<PAGE>
notes to financial statements
1. Summary of Significant Accounting Policies
The AUL American Unit Trust (Variable Account) was established by American
United Life Insurance Company (AUL)
on August 17, 1989, under procedures established by Indiana law and is
registered as a unit investment trust under the
Investment Company Act of 1940, as amended. The Variable Account is a segregated
investment account for AUL and
invests exclusively in shares of mutual fund portfolios offered by the AUL
American Series Fund, Inc. (Series Fund),
Fidelity Investments Variable Insurance Products Fund and Variable Insurance
Products Fund II(Fidelity), TCI Portfolios,
Inc. (TCI), Alger American Fund (Alger), Calvert Group (Calvert), and T. Rowe
Price.
Security Valuation Transactions and Related Investment Income
The market value of investments is based on the closing bid prices at December
31, 1996. Investment transactions are
accounted for on the trade date and dividend income is recorded on the
ex-dividend date.
Mortality and Expense Risks Charges
AUL deducts a daily charge as compensation for the mortality and expense risks
assumed by AUL. The charge is equal on
an annual basis to 1.25% of the average daily net assets of each investment
account. AUL guarantees that the mortality and
expense charge shall not increase. The charges incurred during the years ended
December 31, 1996 and 1995, were
$1,935,845 and $1,138,607, respectively.
Taxes
Operations of the Variable Account are part of, and are taxed with, the
operations of AUL, which is taxed as a "life
insurance company" under the Internal Revenue Code. Under current law,
investment income, including realized and
unrealized capital gains of the investment accounts, is not taxed to AUL to the
extent it is applied to increase reserves
under the contracts. The Variable Account has not been charged for federal and
state income taxes since none have been
imposed.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ
from those estimates.
2. Account Charges
AUL may assess a premium tax charge based on premium taxes incurred.
Premium taxes currently range between 0% and
3.5%, but are subject to change by governmental entities.
AUL deducts an annual administrative charge from each participant's account
which may not exceed the lesser of 0.5% of
the participant's account value or $7.50 per quarter. The charge is assessed
every quarter on a participant account if it is in
effect on the quarterly contract anniversary, and the charge is assessed only
during the accumulation period. The charges
incurred during the years ended December 31, 1996 and 1995, were $156,705 and
$147,379, respectively.
AUL may assess a withdrawal charge on withdrawals that exceed 10% of the
participant's account value as of the last
contract anniversary preceding the request for the withdrawal. The amount of the
charge depends upon the number of
account years the participant's account has been in existence, as follows:
Account Year Withdrawal Charge
1 - 5 8%
6 - 10 4%
11 or more 0%
The aggregrate withdrawal charges will not exceed 9% of the contributions made
by or on behalf of a participant under a
contract. The charges incurred during the years ended December 31, 1996 and
1995, were $164,250 and $96,562, respectively.
<PAGE>
notes to financial statements (continued)
3. Accumulation Unit Value
The change in the Accumulation Unit Value for the year ended December 31,
1996, is:
12/31/96 12/31/95 Change
Series Fund:
Equity $ 2.107103 $ 1.790413 17.7%
Money Market 1.229861 1.188967 3.4%
Bond 1.614937 1.599503 1.0%
Managed 1.837513 1.664334 10.4%
Fidelity:
High Income 1.446567 1.284533 12.6%
Growth 1.705274 1.505375 13.3%
Overseas 1.383489 1.237371 11.8%
Asset Manager 1.368222 1.208903 13.2%
Index 500 1.743597 1.437483 21.3%
Equity-Income 1.380472 1.223147 12.9%
Contra 1.516110 1.265540 19.8%
TCI:
TCI Growth 1.225326 1.296724 -5.5%
Alger:
American Growth 1.409348 1.259033 11.9%
Calvert:
Capital Accumulation 1.342590 1.265873 6.1%
T. Rowe Price:
Equity Income 1.452068 1.229793 18.1%
<PAGE>
notes to financial statements (continued)
4. Cost of Investments
The cost of Investments at December 31, 1996 is:
Series Fund:
Equity $ 18,428,478
Money Market 4,836,248
Bond 7,316,517
Managed 16,577,041
Fidelity:
High Income 8,862,439
Growth 35,477,543
Overseas 10,536,112
Asset Manager 31,919,462
Index 500 15,438,682
Equity-Income 5,459,911
Contrafund 6,432,540
TCI:
TCI Growth $ 2,403,012
Alger:
American Growth 8,972,942
Calvert:
Capital Accumulation 1,284,484
T. Rowe Price:
Equity Income 5,832,546
5. Net Assets
Net Assets at December 31, 1996 are:
Series Fund Fidelity
EquityMoney Market Bond Managed High Income
Growth
Proceeds from units sold $ 23,771,887 $ 29,526,054 $ 9,667,951 $ 20,031,091
$ 10,837,939 $ 45,075,945
Cost of units redeemed (7,968,288) (24,930,927) (3,117,127) (5,721,966)
(2,791,593) (14,630,049)
Net investment income 1,261,181 241,121 857,976 1,828,932
729,116 1,262,870
(expense)
Net realized gain (loss) 1,363,698 (92,283) 438,984
86,977 3,768,777
Unrealized gain (loss) 3,889,590 10,494 1,965,344
800,658 2,993,973
$ 22,318,068 $ 4,836,248 $ 7,327,011 $ 18,542,385
$ 9,663,097 $ 38,471,516
Fidelity TCI
Overseas Asset Manager Index 500Equity-Income
Contra TCI Growth
Proceeds from units sold $ 19,015,822 $ 41,712,410 $ 19,638,049 $ 6,275,085
$ 7,723,444 $ 2,613,733
Cost of units redeemed (9,196,712) (11,614,410) (5,699,844) (893,297)
(1,434,197) (421,346)
Net investment income
(expense) (389) 1,850,205 131,658 19,327
(26,087) 130,202
Net realized gain (loss) 717,391 (28,743) 1,368,819 58,796
169,380 80,423
Unrealized gain (loss) 872,134 4,846,794 1,726,769 398,242
627,085 (213,570)
$ 11,408,246 $ 36,766,256 $ 17,165,451 $ 5,858,153
$ 7,059,625 $ 2,189,442
Alger Calvert T. Rowe Price
American Capital
GrowthAccumulation Equity Income
Proceeds from units sold $ 12,870,085 $ 8,258,877 $ 6,878,168
Cost of units redeemed (4,049,269) (6,996,872) (1,250,529)
Net investment income 49,849 (1,993) 97,389
(expense)
Net realized gain (loss) 102,277 24,472 107,518
Unrealized gain (loss) 434,555 18,429 352,996
$ 9,407,497 $ 1,302,913 $ 6,185,542
<PAGE>
(This page is intentionally blank.)
<PAGE>
American United Life Insurance Company
P.O. Box 368
Indianapolis, Indiana 46206-0368
SA-13118L
