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Previous: GRAND CASINOS INC, 10-K405, 1998-03-30 |
Next: EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A, 24F-2NT, 1998-03-30 |
(2_FIDELITY_LOGOS)EMPIRE FIDELITY INVESTMENTS
VARIABLE ANNUITY ACCOUNT A
ANNUAL REPORT
DECEMBER 31, 1997
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF EMPIRE FIDELITY INVESTMENTS
LIFE INSURANCE COMPANY VARIABLE ANNUITY OWNERS. THIS REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER EMPIRE
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY NOR FIDELITY
BROKERAGE SERVICES, INC. IS A BANK, AND NEITHER THE ANNUITY NOR MUTUAL
FUND SHARES ARE BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE FDIC.
STATEMENT OF ASSETS AND LIABILITIES
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C>
ASSETS DECEMBER 31, 1997
INVESTMENTS AT CURRENT MARKET VALUE:
VARIABLE INSURANCE PRODUCTS FUND (VIP)
MONEY MARKET PORTFOLIO - 40,523,191 SHARES (COST $40,523,191) $ 40,523,191
HIGH INCOME PORTFOLIO - 1,936,144 SHARES (COST $23,447,930) 26,292,832
EQUITY-INCOME PORTFOLIO - 7,799,811 SHARES (COST $136,245,590) 189,379,414
GROWTH PORTFOLIO - 2,618,273 SHARES (COST $73,417,324) 97,137,924
OVERSEAS PORTFOLIO - 1,305,890 SHARES (COST $22,579,175) 25,073,096
VARIABLE INSURANCE PRODUCTS FUND II (VIP II)
INVESTMENT GRADE BOND PORTFOLIO - 678,746 SHARES (COST $8,286,814) 8,525,055
ASSET MANAGER PORTFOLIO - 5,098,256 SHARES (COST $76,484,511) 91,819,600
INDEX 500 PORTFOLIO - 671,317 SHARES (COST $59,792,835) 76,791,919
ASSET MANAGER: GROWTH PORTFOLIO - 1,977,566 SHARES (COST $26,302,628) 32,352,984
CONTRAFUND PORTFOLIO - 6,763,269 SHARES (COST $98,653,114) 134,859,574
VARIABLE INSURANCE PRODUCTS FUND III (VIP III)
BALANCED PORTFOLIO - 320,839 SHARES (COST $4,308,500) 4,677,837
GROWTH & INCOME PORTFOLIO - 2,302,725 SHARES (COST $25,769,324) 28,853,145
GROWTH OPPORTUNITIES PORTFOLIO - 1,724,505 SHARES (COST $29,023,346) 33,231,208
MORGAN STANLEY UNIVERSAL FUNDS (MSUF)
EMERGING MARKETS EQUITY PORTFOLIO - 22,182 SHARES (COST $210,764) 209,175
EMERGING MARKETS DEBT PORTFOLIO - 34,809 SHARES (COST $348,688) 336,604
GLOBAL EQUITY PORTFOLIO - 26,177 SHARES (COST $310,300) 307,316
INTERNATIONAL MAGNUM PORTFOLIO - 16,181 SHARES (COST $173,935) 167,959
PBHG INSURANCE SERIES FUNDS (PBHG)
GROWTH II PORTFOLIO - 11,822 SHARES (COST $126,545) 127,088
SMALL CAP VALUE PORTFOLIO - 52,273 SHARES (COST $539,232) 547,819
LARGE CAP VALUE PORTFOLIO - 18,769 SHARES (COST $193,332) 195,765
TECHNOLOGY & COMMUNICATIONS PORTFOLIO - 35,096 SHARES (COST $366,187) 365,354
SELECT 20 PORTFOLIO - 56,875 SHARES (COST $553,519) 570,452
STRONG VARIABLE INSURANCE FUNDS (SVIF)
DISCOVERY FUND II PORTFOLIO - 7,663 SHARES (COST $93,530) 92,191
GROWTH FUND II PORTFOLIO - 12,882 SHARES (COST $162,114) 160,378
OPPORTUNITY FUND II PORTFOLIO - 15,058 SHARES (COST $324,423) 326,748
WARBURG PINCUS TRUST (WPT)
SMALL COMPANY GROWTH PORTFOLIO - 19,004 SHARES (COST $305,128) 313,192
INTERNATIONAL EQUITY PORTFOLIO - 3,021 SHARES (COST $34,115) 31,689
POST-VENTURE CAPITAL PORTFOLIO - 6,038 SHARES (COST $65,671) 66,778
TOTAL ASSETS $ 793,336,287
NET ASSETS
VARIABLE ANNUITY CONTRACTS $ 772,540,862
ANNUITY RESERVES 20,634,066
RETAINED IN VARIABLE ACCOUNT BY EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY 161,359
TOTAL NET ASSETS $ 793,336,287
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - VIP - VIP -
MONEY MARKET HIGH INCOME EQUITY-INCOME
12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96
INCOME:
DIVIDENDS $ 2,313,764 $ 1,786,770 $ 1,698,426 $ 1,344,293 $ 15,459,859 $ 5,937,083
EXPENSES:
MORTALITY RISK,
EXPENSE RISK
AND ADMINIS- 421,031 369,246 226,931 173,493 1,644,530 1,445,756
TRATIVE CHARGES
NET INVESTMENT
INCOME (LOSS) 1,892,733 1,417,524 1,471,495 1,170,800 13,815,329 4,491,327
REALIZED GAIN
(LOSS) 0 0 525,904 234,379 5,142,383 4,329,089
UNREALIZED
APPRECIATION
(DEPRECIATION)0 0 1,549,932 650,495 20,917,615 8,576,967
DURING THE PERIOD
NET INCREASE (DECREASE)
IN NET
ASSETS FROM 1,892,733 1,417,524 3,547,331 2,055,674 39,875,327 17,397,383
OPERATIONS
PAYMENTS
RECEIVED FROM 23,195,744 27,250,681 3,390,097 4,106,021 10,018,315 21,584,759
CONTRACT OWNERS
TRANSFERS
BETWEEN SUB- (29,837,690) (9,795,253) (936,028) 1,458,992 (8,413,443) (9,221,157)
ACCOUNTS AND THE
FIXED ACCOUNT, NET
TRANSFERS
FOR CONTRACT
BENEFITS AND (3,370,058) (1,159,047) (646,453) (381,564) (3,514,413) (3,177,333)
TERMINATIONS
OTHER TRANSFERS
(TO) FROM
EMPIRE FIDELITY
INVESTMENTS
LIFE (14,328) 6,590 (8,290) (4,989) (51,098) (35,670)
INSURANCE CO., NET
NET INCREASE
(DECREASE) IN
NET ASSETS (10,026,332) 16,302,971 1,799,326 5,178,460 (1,960,639) 9,150,599
FROM CONTRACT
TRANSACTIONS
RETAINED IN
(RETURNED FROM)
VARIABLE ANNUITY (18,302) (6,995) (6,399) (6,253) (35,093) (78,836)
ACCOUNT A, NET
TOTAL INCREASE (8,151,901) 17,713,500 5,340,258 7,227,881 37,879,595 26,469,146
(DECREASE) IN
NET ASSETS
NET ASSETS AT
BEGINNING OF
PERIOD 48,675,092 30,961,592 20,952,574 13,724,693 151,499,819 125,030,673
NET ASSETS AT END
OF PERIOD $ 40,523,191 $ 48,675,092 $ 26,292,832 $ 20,952,574 $ 189,379,414 $ 151,499,819
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - VIP -
GROWTH OVERSEAS
12/31/97 12/31/96 12/31/97 12/31/96
INCOME:
DIVIDENDS $ 3,205,544 $ 4,634,819 $ 2,118,629 $ 525,818
EXPENSES:
MORTALITY RISK,
EXPENSE RISK
AND ADMINIS- 884,156 811,476 260,337 231,350
TRATIVE CHARGES
NET INVESTMENT
INCOME (LOSS) 2,321,388 3,823,343 1,858,292 294,468
REALIZED GAIN (LOSS) 6,114,534 3,059,832 1,113,127 484,088
UNREALIZED
APPRECIATION
(DEPRECIATION) 9,612,136 2,520,593 (306,443) 1,781,995
DURING THE PERIOD
NET INCREASE (DECREASE)
IN NET ASSETS FROM 18,048,058 9,403,768 2,664,976 2,560,551
OPERATIONS
PAYMENTS
RECEIVED FROM 3,969,223 16,074,279 1,594,379 3,046,601
CONTRACT OWNERS
TRANSFERS
BETWEEN SUB- (11,918,863) 2,515,925 (2,962,833) 1,632,798
ACCOUNTS AND THE
FIXED ACCOUNT, NET
TRANSFERS
FOR CONTRACT
BENEFITS AND (1,865,313) (1,354,750) (875,577) (312,776)
TERMINATIONS
OTHER TRANSFERS
(TO) FROM
EMPIRE FIDELITY
INVESTMENTS LIFE (27,180) (30,252) (7,253) (20,485)
INSURANCE CO., NET
NET INCREASE
(DECREASE) IN
NET ASSETS (9,842,133) 17,205,202 (2,251,284) 4,346,138
FROM CONTRACT
TRANSACTIONS
RETAINED IN
(RETURNED FROM)
VARIABLE ANNUITY (14,603) (40,650) (7,153) (7,308)
ACCOUNT A, NET
TOTAL INCREASE 8,191,322 26,568,320 406,539 6,899,381
(DECREASE) IN
NET ASSETS
NET ASSETS AT
BEGINNING OF PERIOD 88,946,602 62,378,282 24,666,557 17,767,176
NET ASSETS AT END
OF PERIOD $ 97,137,924 $ 88,946,602 $ 25,073,096 $ 24,666,557
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
VIP II - VIP II - VIP II -
INVESTMENT ASSET MANAGER INDEX 500
GRADE BOND
12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96
INCOME:
DIVIDENDS $ 398,252 $ 337,043 $ 9,938,064 $ 5,293,835 $ 1,475,663 $ 620,782
EXPENSES:
MORTALITY RISK,
EXPENSE RISK
AND ADMINIS- 68,068 843,527 815,364 591,939 242,314
TRATIVE CHARGES 68,030
NET INVESTMENT
INCOME (LOSS) 330,222 268,975 9,094,537 4,478,471 883,724 378,468
REALIZED GAIN (LOSS) 59,791 75,367 1,851,291 1,663,095 2,915,326 702,643
UNREALIZED
APPRECIATION
(DEPRECIATION) (227,009) 4,465,968 4,022,895 11,740,910 3,762,268
DURING THE PERIOD 150,894
NET INCREASE (DECREASE)
IN NET ASSETS FROM 117,333 15,411,796 10,164,461 15,539,960 4,843,379
OPERATIONS 540,907
PAYMENTS
RECEIVED FROM 1,204,243 2,619,931 3,467,114 9,783,621 9,153,239
CONTRACT OWNERS 547,746
TRANSFERS
BETWEEN SUB- (5,488,171) (11,063,577) 16,761,121 10,692,005
ACCOUNTS AND THE (177,798)
FIXED ACCOUNT, NET 939,267
TRANSFERS
FOR CONTRACT
BENEFITS AND (443,215) (3,352,040) (2,267,357) (2,103,893) (760,330)
TERMINATIONS (446,731)
OTHER TRANSFERS
(TO) FROM
EMPIRE FIDELITY
INVESTMENTS LIFE 1,167 (17,911) (18,904) (19,321) (4,432)
INSURANCE CO., NET (4,655)
NET INCREASE
(DECREASE) IN
NET ASSETS 584,397 (6,238,191) (9,882,724) 24,421,528 19,080,482
FROM CONTRACT
TRANSACTIONS 1,035,627
RETAINED IN
(RETURNED FROM)
VARIABLE ANNUITY (4,101) (18,089) (59,436) (1,164) (8,563)
ACCOUNT A, NET (2,182)
TOTAL INCREASE 9,155,516 222,301 39,960,324 23,915,298
(DECREASE) IN 697,629
NET ASSETS 1,574,352
NET ASSETS AT
BEGINNING OF PERIOD 6,950,703 6,253,074 82,664,084 82,441,783 36,831,595 12,916,297
NET ASSETS AT END
OF PERIOD $ 8,525,055 $ 6,950,703 $ 91,819,600 $ 82,664,084 $ 76,791,919 $ 36,831,595
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - VIP II -
ASSET MANAGER: CONTRAFUND
GROWTH
12/31/97 12/31/96 12/31/97 12/31/96
INCOME:
DIVIDENDS $ 31,544 $ 862,945 $ 3,309,751 $ 526,257
EXPENSES:
MORTALITY RISK,
EXPENSE RISK
AND ADMINIS- 254,365 98,994 1,148,575 786,431
TRATIVE CHARGES
NET INVESTMENT
INCOME (LOSS) (222,821) 763,951 2,161,176 (260,174)
REALIZED GAIN (LOSS) 505,357 239,532 4,737,833 1,823,791
UNREALIZED
APPRECIATION
(DEPRECIATION) 5,087,508 801,887 16,812,677 13,273,286
DURING THE PERIOD
NET INCREASE (DECREASE)
IN NET ASSETS FROM 5,370,044 1,805,370 23,711,686 14,836,903
OPERATIONS
PAYMENTS
RECEIVED FROM 4,997,152 5,577,602 12,859,035 25,690,735
CONTRACT OWNERS
TRANSFERS
BETWEEN SUB- 5,149,974 5,074,653 430,459 9,364,673
ACCOUNTS AND THE
FIXED ACCOUNT, NET
TRANSFERS
FOR CONTRACT
BENEFITS AND (364,345) (154,535) (2,031,744) (1,779,161)
TERMINATIONS
OTHER TRANSFERS
(TO) FROM
EMPIRE FIDELITY
INVESTMENTS LIFE (8.770) (3,396) (35,583) (71,396)
INSURANCE CO., NET
NET INCREASE
(DECREASE) IN
NET ASSETS 9,774,011 10,494,324 11,222,167 33,204,851
FROM CONTRACT
TRANSACTIONS
RETAINED IN
(RETURNED FROM)
VARIABLE ANNUITY 16,275 (16,199) (17,981) (24,192)
ACCOUNT A, NET
TOTAL INCREASE 15,160,330 12,283,495 34,915,872 48,017,562
(DECREASE) IN
NET ASSETS
NET ASSETS AT
BEGINNING OF PERIOD 17,192,654 4,909,159 99,943,702 51,926,140
NET ASSETS AT END
OF PERIOD $ 32,352,984 $ 17,192,654 $ 134,859,574 $ 99,943,702
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
PBHG - PBHG -
SMALL CAP LARGE CAP
VIP III - VIP III - VIP III - MSUF - MSUF - MSUF - MSUF - PBHG - VALUE** VALUE**
BALANCED* GROWTH & GROWTH EMERGING EMERGING GLOBAL INTERNATIO
NAL GROWTH II**
INCOME* OPPORTUNITIES* MARKETS MARKETS EQUITY** MAGNUM**
EQUITY** DEBT**
12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97
INCOME:
DIVIDENDS
$ 2,385 $ 741,838 $ 67,255 $ 5,877 $ 11,628 $ 5,581 $ 5,039 $ 0 $ 0 $ 0
EXPENSES:
MORTALITY RISK,
28,408 148,409 178,840 93 167 129 86 47 158 80
EXPENSE RISK
AND ADMINIS-
TRATIVE CHARGES
NET INVESTMENT
(26,023) 593,429 (111,585) 5,784 11,461 5,452 4,953 (47) (158) (80)
INCOME (LOSS)
REALIZED GAIN (LOSS)
171,319 139,286 215,977 (41) (1,346) 1 25 (115) 106 (61)
UNREALIZED
APPRECIATION
(DEPRECIATION)
369,337 3,083,821 4,207,862 (1,589) (12,084) (2,984) (5,976) 543 8,587 2,433
DURING THE PERIOD
NET INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS
514,633 3,816,536 4,312,254 4,154 (1,969) 2,469 (998) 381 8,535 2,292
PAYMENTS
RECEIVED FROM
CONTRACT OWNERS
1,763,874 10,522,938 12,056,601 113,615 13,063 191,357 86,824 58,005 102,904 63,807
TRANSFERS
BETWEEN SUB-
2,425,981 14,682,913 16,961,634 91,436 331,693 113,505 82,134 68,703 436,360 129,665
ACCOUNTS AND THE
FIXED ACCOUNT, NET
TRANSFERS
FOR CONTRACT
BENEFITS AND
(27,898) (163,575) (98,075) 0 (6,182) 0 0 0 0 0
TERMINATIONS
OTHER TRANSFERS
(TO) FROM
EMPIRE FIDELITY
INVESTMENTS LIFE
(2,344) (10,836) (6,260) (30) (1) (15) (1) (3) 15 (2)
INSURANCE CO., NET
NET INCREASE
(DECREASE) IN
NET ASSETS
4,159,613 25,031,440 28,913,900 205,021 338,573 304,847 168,957 126,705 539,279 193,470
FROM CONTRACT
TRANSACTIONS
RETAINED IN
(RETURNED FROM)
VARIABLE ANNUITY
3,591 5,169 5,054 0 0 0 0 2 5 3
ACCOUNT A, NET
TOTAL INCREASE
4,677,837 28,853,145 33,231,208 209,175 336,604 307,316 167,959 127,088 547,819 195,765
(DECREASE) IN
NET ASSETS
NET ASSETS AT
BEGINNING
0 0 0 0 0 0 0 0 0 0
OF PERIOD
NET ASSETS AT END
OF PERIOD
$ 4,677,837 $ 28,853,145 $ 33,231,208 $ 209,175 $ 336,604 $ 307,316 $ 167,959 $ 127,088 $ 547,819 $ 195,765
</TABLE>
* FOR THE PERIOD JANUARY 27, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
PBHG - SVIF - SVIF - SVIF - WPT - WPT - WPT -
SELECT 20** DISCOVERY GROWTH OPPORTUNITY SMALL INTERNATIO
NAL POST-
PBHG - FUND II** FUND II** FUND II** COMPANY EQUITY** VENTURE
TECHNOLOGY & GROWTH** CAPITAL**
COM-
M UNICAT
IONS** TOTAL
12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97 12/31/96
INCOME:
DIVIDENDS
$ 0 $ 0 $ 0 $ 5,758 $ 324 $ 0 $ 2,023 $ 8 $ 40,797,212 $ 21,869,645
EXPENSES:
MORTALITY RISK,
EXPENSE RISK
AND ADMINIS
TRATIVE CHARES
144 202 48 66 156 143 16 44 6,700,657 5,042,492
NET INVESTMENT
INCOME (LOSS)
(144) (202) (48) 5,692 168 (143) 2,007 (36) 34,096,555 16,827,153
REALIZED GAIN (LOSS)
(593) 1 (44) (79) 0 305 0 (281) 23,490,006 12,611,816
UNREALIZED
APPRECIATION
(DEPRECIATION)
DURING THE PERIOD
(833) 16,933 (1,339) (1,736) 2,325 8,064 (2,426) 1,107 77,703,242 35,163,377
NET INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS
(1,570) 16,732 (1,431) 3,877 2,493 8,226 (419) 790 135,289,803 64,602,346
PAYMENTS
RECEIVED FROM
CONTRACT OWNERS
138,324 115,860 32,805 94,312 152,948 74,156 11,805 18,680 98,587,121 117,155,274
TRANSFERS
BETWEEN SUB
ACCOUNTS AND THE
FIXED ACCOUNT, NET
228,607 437,871 60,817 62,188 171,182 230,810 20,304 47,306 306,902 481,261
TRANSFERS
FOR CONTRACT
BENEFITS AND
TERMINATIONS
0 0 0 0 0 0 0 0 (18,866,297) (11,790,068)
OTHER TRANSFERS
(TO) FROM
EMPIRE FIDELITY
INVESTMENTS LIFE
INSURANCE CO., NET
(32) (10) (10) 38 87 17 (2,059) (3) (215,838) (181,767)
NET INCREASE
(DECREASE) IN
NET ASSETS
FROM CONTRACT
TRANSACTIONS
366,899 553,721 93,612 156,538 324,217 304,983 30,050 65,983 79,811,888 105,664,700
RETAINED IN
(RETURN FROM)
VARIABLE ANNUITY
ACCOUNT A, NET
25 (1) 10 (37) 38 (17) 2,058 5 (88,786) (252,533)
TOTAL INCREASE
(DECREASE) IN
NET ASSETS
365,354 570,452 92,191 160,378 326,748 313,192 31,689 66,778 215,012,905 170,014,513
NET ASSETS AT
BEGINNING
OF PERIOD
0 0 0 0 0 0 0 0 578,323,382 408,308,869
NET ASSETS AT END
OF PERIOD
$ 365,354 $ 570,452 $ 92,191 $ 160,378 $ 326,748 $ 313,192 $ 31,689 $ 66,778 $ 793,336,287 $ 578,323,382
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
1. ORGANIZATION.
Empire Fidelity Investments Variable Annuity Account A (the
"Account"), a unit investment trust registered under the Investment
Company Act of 1940 as amended, was established by Empire Fidelity
Investments Life Insurance Company (EFILI) on July 15, 1991 and exists
in accordance with the regulations of the State of New York Insurance
Department. The Account is a funding vehicle for individual Retirement
Reserves and Income Advantage variable annuity contracts. EFILI is a
wholly-owned subsidiary of Fidelity Investments Life Insurance Company
which is a wholly-owned subsidiary of FMR Corp.
In 1997, EFILI added eighteen new subaccounts to the Account; VIP III
- - Balanced, VIP III - Growth & Income, VIP III - Growth Opportunities,
MSUF - Emerging Markets Equity, MSUF - Emerging Markets Debt, MSUF -
Global Equity, MSUF - International Magnum, PBHG - Growth II, PBHG -
Small Cap Value, PBHG - Large Cap Value, PBHG - Technology &
Communications, PBHG - Select 20, SVIF - Discovery Fund II, SVIF -
Growth Fund II, SVIF - Opportunity Fund II, WPT - Small Company
Growth, WPT - International Equity, WPT - Post-Venture Capital.
2. SIGNIFICANT ACCOUNTING POLICIES.
Investments are made in the portfolios of the subaccounts and are
valued at the reported net asset values of such portfolios.
Transactions are recorded on the trade date. Income from dividends is
recorded on the ex-dividend date. Realized gains and losses on the
sales of investments are computed on the basis of the identified cost
of the investment sold.
In addition to the Account, a contractholder may also allocate funds
to the Fixed Account, which is part of EFILI's general account.
Because of exemptive and exclusionary provisions, interests in the
Fixed Account have not been registered under the Securities Act of
1933 and EFILI's general account has not been registered as an
investment company under the Investment Company Act of 1940.
Annuity reserves are computed for contracts in the income stage
according to the 1983 Individual Annuitant Mortality Table. The
assumed investment return is 3.5% unless the annuitant elects
otherwise, in which case the rate may vary from 3.5% to 7%, as
regulated by the laws of the State of New York. The mortality risk is
fully borne by EFILI and may result in additional amounts being
transferred into the Account by EFILI.
The operations of the Account are included in the federal income tax
return of EFILI, which is taxed as a life insurance company under the
provisions of the Internal Revenue Code (the "Code").
The preparation of the statement of assets and liabilities and the
statements of operations and changes in net assets in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the related amounts and
disclosures in the financial statements. Actual results could differ
from those estimates.
3. EXPENSES.
EFILI deducts a daily charge from the net assets of the Account for
administrative expenses and for the assumption of mortality risk and
expense risk. Prior to November 3, 1997, the daily charge was
equivalent to an annual effective rate of 1% of net assets. On
November 3, 1997, EFILI reduced the daily charge on the Retirement
Reserves contracts to an annual effective rate of 0.8% of net assets.
EFILI also deducts an annual maintenance charge of $30 from the
Retirement Reserves contract value. The maintenance charge is waived
on certain contracts.
Under the current provisions of the Code, EFILI does not expect to
incur federal income taxes on the earnings of the Account to the
extent the earnings are credited under the contracts. EFILI incurs
federal income taxes on the difference between the financial statement
carrying value of reserves for contracts in the income stage and those
reserves held for federal income tax purposes. The tax effect of this
temporary difference is expected to be recovered by EFILI. As such, no
charge is being made currently to the Account for federal income
taxes. EFILI will review periodically the status of such decision
based on changes in the tax law. Such a charge may be made in future
years for any federal income taxes that would be attributable to the
contracts.
4. AFFILIATED COMPANY TRANSACTIONS.
The contracts are distributed through Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Insurance Agency, Inc. (FIA), both of which
are affiliated with FMR Corp. FBSI and FIA are the distributors and
FBSI is the principal underwriter of the contracts. Fidelity
Management & Research Company, an affiliate of FMR Corp., acts as
investment advisor to the VIP, VIP II and VIP III portfolios. Fidelity
Investments Institutional Operations Co., an affiliate of FMR Corp.,
is the transfer and shareholder servicing agent for the VIP, VIP II
and VIP III portfolios.
5. PURCHASES AND SALES OF INVESTMENTS.
The following table shows aggregate cost of shares purchased and
proceeds from sales of each subaccount for the year ended December 31,
1997:
PURCHASES SALES
VIP - MONEY MARKET $ 40,626,139 $ 48,778,040
VIP - HIGH INCOME 9,153,878 5,889,456
VIP - EQUITY-INCOME 27,763,208 15,943,611
VIP - GROWTH 9,847,941 17,383,289
VIP - OVERSEAS 5,901,185 6,301,330
VIP II - INVESTMENT GRADE BOND 3,949,956 2,586,289
VIP II - ASSET MANAGER 13,777,280 10,939,023
VIP II - INDEX 500 33,411,864 8,107,776
VIP II - ASSET MANAGER: GROWTH 11,990,962 2,423,497
VIP II - CONTRAFUND 25,483,875 12,118,513
VIP III - BALANCED 5,869,577 1,732,396
VIP III - GROWTH & INCOME 26,331,732 701,694
VIP III - GROWTH OPPORTUNITIES 30,203,470 1,396,101
MSUF - EMERGING MARKETS EQUITY 215,459 4,654
MSUF - EMERGING MARKETS DEBT 411,823 61,789
MSUF - GLOBAL EQUITY 310,342 43
MSUF - INTERNATIONAL MAGNUM 175,996 2,086
PBHG - GROWTH II 132,705 6,045
PBHG - SMALL CAP VALUE 548,054 8,928
PBHG - LARGE CAP VALUE 198,280 4,887
PBHG - TECHNOLOGY & COMMUNICATIONS 374,984 8,204
PBHG - SELECT 20 553,556 38
SVIF - DISCOVERY FUND II 108,570 14,996
SVIF - GROWTH FUND II 170,452 8,259
SVIF - OPPORTUNITY FUND II 324,476 53
WPT - SMALL COMPANY GROWTH 317,505 12,682
WPT - INTERNATIONAL EQUITY 34,128 13
WPT - POST-VENTURE CAPITAL 83,646 17,694
6. UNIT VALUES.
A summary of changes in accumulation units and ending unit and
contract values for variable annuity contracts at December 31, 1997
and 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PAYMENTS
BEGINNING RECEIVED TRANSFERS CONTRACT
BALANCE FROM BETWEEN TERMINATIONS ENDING BALANCE
UNITS CONTRACT SUBACCOUNTS, UNITS UNIT VALUE DOLLARS
OWNERS NET
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
JANUARY 1, 1997 TO DECEMBER 31, 1997
VIP - MONEY MARKET 3,144,313 1,192,450 (1,961,731) 135,772 2,510,803 $ 15.98 $ 40,122,752
VIP - HIGH INCOME 820,013 125,044 (36,435) (39,629) 868,993 $ 29.00 25,203,764
VIP - EQUITY-INCOME 4,755,212 283,630 (254,145) (118,385) 4,666,312 $ 39.39 183,811,551
VIP - GROWTH 2,503,391 102,300 (325,759) (50,212) 2,229,721 $ 42.76 95,348,269
VIP - OVERSEAS 1,151,640 68,604 (123,259) (37,425) 1,059,560 $ 23.52 24,922,843
VIP II - INVESTMENT GRADE
BOND 382,801 18,247 64,575 (23,502) 442,121 $ 18.75 8,288,748
VIP II - ASSET MANAGER 3,900,514 115,925 (240,287) (171,837) 3,604,315 $ 24.80 89,382,163
VIP II - INDEX 500 1,887,371 443,549 793,394 (122,980) 3,001,334 $ 24.83 74,512,753
VIP II - ASSET MANAGER: GROWTH 1,163,007 308,312 331,850 (42,970) 1,760,200 $ 17.95 31,593,890
VIP II - CONTRAFUND 5,882,023 702,932 (5,288) (160,091) 6,419,636 $ 20.47 131,438,645
VIP III - BALANCED * 154,849 243,840 (27,312) 371,377 $ 11.98 4,449,837
VIP III - GROWTH & INCOME * 936,634 1,359,453 (132,531) 2,163,555 $ 12.68 27,424,348
VIP III - GROWTH OPPORTUNITIES * 1,076,440 1,563,569 (81,549) 2,558,459 $ 12.63 32,320,770
MSUF - EMERGING MARKETS EQUITY ** 11,511 9,298 (3) 20,806 $ 10.05 209,175
MSUF - EMERGING MARKETS DEBT ** 1,251 31,482 (603) 32,130 $ 10.48 336,604
MSUF - GLOBAL EQUITY ** 18,774 11,206 (1) 29,979 $ 10.25 307,316
MSUF - INTERNATIONAL MAGNUM ** 8,767 8,275 0 17,042 $ 9.86 167,959
PBHG - GROWTH II ** 5,767 6,751 (641) 11,877 $ 10.15 120,577
PBHG - SMALL CAP VALUE ** 10,032 42,492 (744) 51,781 $ 10.43 540,062
PBHG - LARGE CAP VALUE ** 6,302 12,765 (626) 18,440 $ 10.27 189,335
PBHG - TECHNOLOGY & COMMUNICATIONS ** 14,091 22,932 (2,985) 34,037 $ 9.87 335,899
PBHG - SELECT 20 ** 11,265 43,493 (1) 54,758 $ 10.42 570,453
SVIF - DISCOVERY FUND II ** 3,308 6,202 (1,464) 8,046 $ 9.69 77,996
SVIF - GROWTH FUND II ** 9,503 6,146 0 15,649 $ 10.25 160,415
SVIF - OPPORTUNITY FUND II ** 15,195 17,006 (630) 31,571 $ 10.15 320,324
WPT - SMALL COMPANY GROWTH ** 7,472 23,269 (2,476) 28,265 $ 10.19 288,010
WPT - INTERNATIONAL EQUITY ** 1,196 2,010 0 3,206 $ 9.24 29,631
WPT - POST-VENTURE CAPITAL ** 1,875 4,639 0 6,514 $ 10.25 66,773
$ 772,540,862
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
JANUARY 1, 1996 TO DECEMBER 31, 1996
VIP - MONEY MARKET 2,086,339 1,396,811 (671,222) 332,385 3,144,313 $ 15.30 $ 48,101,350
VIP - HIGH INCOME 605,822 175,020 61,177 (22,006) 820,013 $ 24.89 20,409,560
VIP - EQUITY-INCOME 4,481,146 751,876 (315,456) (162,354) 4,755,212 $ 31.05 147,641,357
VIP - GROWTH 2,004,576 487,213 73,706 (62,104) 2,503,391 $ 34.97 87,540,085
VIP - OVERSEAS 930,291 154,412 85,133 (18,195) 1,151,640 $ 21.29 24,519,804
VIP II - INVESTMENT GRADE BOND 358,773 71,690 (12,681) (34,981) 382,801 $ 17.36 6,644,585
VIP II - ASSET MANAGER 4,435,615 181,581 (584,908) (131,774) 3,900,514 $ 20.75 80,953,438
VIP II - INDEX 500 802,405 537,084 624,968 (77,086) 1,887,371 $ 18.89 35,655,373
VIP II - ASSET MANAGER: GROWTH 396,158 419,484 378,254 (30,890) 1,163,007 $ 14.49 16,853,490
VIP II - CONTRAFUND 3,685,097 1,742,216 631,751 (177,041) 5,882,023 $ 16.65 97,957,527
$ 566,276,569
* FOR THE PERIOD JANUARY 27, 1997 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1997.
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1997.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE CONTRACT OWNERS OF EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY
ACCOUNT A:
We have audited the accompanying statement of assets and liabilities
of Empire Fidelity Investments Variable Annuity Account A (comprised
of VIP - Money Market, VIP - High Income, VIP - Equity-Income, VIP -
Growth, VIP - Overseas, VIP II - Investment Grade Bond, VIP II - Asset
Manager , VIP II - Index 500, VIP II - Asset Manager: Growth, VIP II -
Contrafund, VIP III - Balanced , VIP III - Growth & Income, VIP III -
Growth Opportunities, MSUF - Emerging Markets Equity, MSUF - Emerging
Markets Debt, MSUF - Global Equity, MSUF - International Magnum, PBHG
- - Growth II, PBHG - Small Cap Value, PBHG - Large Cap Value, PBHG -
Technology & Communications, PBHG - Select 20, SVIF- Discovery Fund
II, SVIF - Growth Fund II, SVIF - Opportunity Fund II, WPT - Small
Company Growth, WPT - International Equity and WPT - Post-Venture
Capital) of Empire Fidelity Investments Life Insurance Company as of
December 31, 1997, and the related statements of operations and
changes in net assets for each of the periods indicated therein. These
financial statements are the responsibility of the Company'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. 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 the
aforementioned subaccounts comprising Empire Fidelity Investments
Variable Annuity Account A of Empire Fidelity Investments Life
Insurance Company as of December 31, 1997, and the results of their
operations and the changes in their net assets for each of the periods
indicated therein, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 28, 1998
(registered trademark)
America's largest privately-held investment management organization.
Retirement Reserves and Income Advantage are issued by Empire Fidelity
Investments Life Insurance Company. N.Y., N.Y.
Fidelity Brokerage Services, Inc., member NYSE, SIPC, and Fidelity
Insurance Agency, Inc. are the distributors.
82 Devonshire Street, Boston, MA 02109
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