EMPIRE FIDELITY INVESTMENTS
VARIABLE ANNUITY ACCOUNT A
ANNUAL REPORT
DECEMBER 31, 1998
(2_FIDELITY_LOGOS)(REGISTERED TRADEMARK)
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 ANNUITIES 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
ASSETS DECEMBER 31, 1998
Investments at current market
value:
Variable Insurance Products
Fund (VIP)
Money Market Portfolio - $ 60,823,021
60,823,021 shares (cost
$60,823,021)
High Income Portfolio - 25,486,247
2,210,429 shares (cost
$27,252,453)
Equity-Income Portfolio - 177,382,220
6,978,057 shares (cost
$130,450,090)
Growth Portfolio - 131,593,217
2,932,766 shares (cost
$90,335,204)
Overseas Portfolio - 25,641,874
1,278,896 shares (cost
$23,329,182)
Variable Insurance Products
Fund II (VIP II)
Investment Grade Bond 21,364,595
Portfolio - 1,648,503 shares
(cost $20,776,732)
Asset Manager Portfolio - 96,618,357
5,320,394 shares (cost
$81,938,604)
Index 500 Portfolio - 107,512,920
761,153 shares (cost
$81,401,449)
Asset Manager: Growth 32,946,100
Portfolio - 1,934,592 shares
(cost $27,563,473)
Contrafund Portfolio - 169,057,561
6,917,249 shares (cost
$109,536,191)
Variable Insurance Products
Fund III (VIP III)
Balanced Portfolio - 8,601,349
533,914 shares (cost
$7,858,475)
Growth & Income Portfolio - 69,111,358
4,279,341 shares (cost
$55,681,217)
Growth Opportunities 44,311,264
Portfolio - 1,936,681 shares
(cost $35,121,684)
Morgan Stanley Universal
Funds (MSUF)
Emerging Markets Equity 546,742
Portfolio - 76,898 shares
(cost $646,521)
Emerging Markets Debt 282,550
Portfolio - 46,320 shares
(cost $387,085)
Global Equity Portfolio - 1,999,162
152,143 shares (cost
$1,976,648)
International Magnum 912,330
Portfolio - 81,240 shares
(cost $1,007,344)
PBHG Insurance Series Funds
(PBHG)
Growth II Portfolio - 431,049
37,064 shares (cost $417,316)
Small Cap Value Portfolio - 2,937,388
253,005 shares (cost
$2,907,922)
Large Cap Value Portfolio - 2,347,270
164,490 shares (cost
$2,112,479)
Technology & Communications 2,932,095
Portfolio - 213,088 shares
(cost $2,507,953)
Select 20 Portfolio - 29,117,879
1,786,373 shares (cost
$24,291,775)
Strong Variable Insurance
Funds (SVIF)
Discovery Fund II Portfolio 279,046
- - 21,938 shares (cost
$278,044)
Growth Fund II Portfolio - 915,824
57,168 shares (cost $804,922)
Opportunity Fund II 3,225,067
Portfolio - 148,484 shares
(cost $3,295,369)
Warburg Pincus Trust (WPT)
Small Company Growth 953,257
Portfolio - 59,541 shares
(cost $1,002,111)
International Equity 301,996
Portfolio - 27,479 shares
(cost $337,693)
Post-Venture Capital 496,313
Portfolio - 42,132 shares
(cost $519,777)
Total Assets $ 1,018,128,051
NET ASSETS COMPRISED OF:
Variable Annuity Contracts $ 981,357,735
Annuity Reserves 36,592,039
Retained in Variable Account 178,277
by Empire Fidelity
Investments Life Insurance
Company
NET ASSETS $ 1,018,128,051
STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
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 - MONEY MARKET VIP - HIGH INCOME
12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 2,645,742 $ 2,313,764 $ 1,889,480 $ 1,511,599
EXPENSES:
Mortality risk, expense 399,788 421,031 215,198 226,931
risk and adminis-
trative charges
Net investment income (loss) 2,245,954 1,892,733 1,674,282 1,284,668
Realized gain (loss) on sale 0 0 357,137 525,904
of fund shares
Realized gain distributions 0 0 1,200,608 186,827
Unrealized appreciation 0 0 (4,611,108) 1,549,932
(depreciation)
Net increase (decrease) in 2,245,954 1,892,733 (1,379,081) 3,547,331
net assets from operations
Payments received from 24,969,171 23,195,744 3,637,653 3,390,097
contract owners
Transfers between sub- (2,491,417) (29,837,690) (2,092,976) (936,028)
accounts and the fixed
account, net
Transfers for contract (4,418,522) (3,370,058) (945,611) (646,453)
benefits and terminations
Other transfers (to) from (11,185) (14,328) (26,576) (8,290)
Empire Fidelity
Investments Life Insurance
Co., net
Net increase (decrease) in 18,048,047 (10,026,332) 572,490 1,799,326
net assets from contract
transactions
Retained in (returned from) 5,829 (18,302) 6 (6,399)
Variable Annuity Account
A, net
Total increase (decrease) 20,299,830 (8,151,901) (806,585) 5,340,258
in net assets
Net assets at beginning of 40,523,191 48,675,092 26,292,832 20,952,574
year
Net assets at end of year $ 60,823,021 $ 40,523,191 $ 25,486,247 $ 26,292,832
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - EQUITY-INCOME VIP - GROWTH
12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 2,627,503 $ 2,564,769 $ 474,706 $ 585,360
EXPENSES:
Mortality risk, expense 1,522,723 1,644,530 849,776 884,156
risk and adminis-
trative charges
Net investment income (loss) 1,104,780 920,239 (375,070) (298,796)
Realized gain (loss) on sale 13,591,971 5,142,383 5,631,524 6,114,534
of fund shares
Realized gain distributions 9,350,819 12,895,090 12,417,303 2,620,184
Unrealized appreciation (6,201,694) 20,917,615 17,537,413 9,612,136
(depreciation)
Net increase (decrease) in 17,845,876 39,875,327 35,211,170 18,048,058
net assets from operations
Payments received from 6,486,521 10,018,315 3,501,089 3,969,223
contract owners
Transfers between sub- (29,920,538) (8,413,443) (1,451,810) (11,918,863)
accounts and the fixed
account, net
Transfers for contract (6,382,415) (3,514,413) (2,742,013) (1,865,313)
benefits and terminations
Other transfers (to) from (27,652) (51,098) (65,813) (27,180)
Empire Fidelity
Investments Life Insurance
Co., net
Net increase (decrease) in (29,844,084) (1,960,639) (758,547) (9,842,133)
net assets from contract
transactions
Retained in (returned from) 1,014 (35,093) 2,670 (14,603)
Variable Annuity Account
A, net
Total increase (decrease) (11,997,194) 37,879,595 34,455,293 8,191,322
in net assets
Net assets at beginning of 189,379,414 151,499,819 97,137,924 88,946,602
year
Net assets at end of year $ 177,382,220 $ 189,379,414 $ 131,593,217 $ 97,137,924
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - OVERSEAS
12/31/98 12/31/97
INCOME:
Dividends $ 474,801 $ 426,309
EXPENSES:
Mortality risk, expense 211,685 260,337
risk and adminis-
trative charges
Net investment income (loss) 263,116 165,972
Realized gain (loss) on sale 1,010,697 1,113,127
of fund shares
Realized gain distributions 1,399,412 1,692,320
Unrealized appreciation (181,229) (306,443)
(depreciation)
Net increase (decrease) in 2,491,996 2,664,976
net assets from operations
Payments received from 693,445 1,594,379
contract owners
Transfers between sub- (1,856,247) (2,962,833)
accounts and the fixed
account, net
Transfers for contract (755,511) (875,577)
benefits and terminations
Other transfers (to) from (5,559) (7,253)
Empire Fidelity
Investments Life Insurance
Co., net
Net increase (decrease) in (1,923,872) (2,251,284)
net assets from contract
transactions
Retained in (returned from) 654 (7,153)
Variable Annuity Account
A, net
Total increase (decrease) 568,778 406,539
in net assets
Net assets at beginning of 25,073,096 24,666,557
year
Net assets at end of year $ 25,641,874 $ 25,073,096
</TABLE>
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - INVESTMENT GRADE VIP II - ASSET MANAGER
BOND
12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 486,031 $ 398,252 $ 2,869,728 $ 2,832,588
EXPENSES:
Mortality risk, expense 112,172 68,030 745,573 843,527
risk and adminis-
trative charges
Net investment income (loss) 373,859 330,222 2,124,155 1,989,061
Realized gain (loss) on sale 246,114 59,791 2,157,446 1,851,291
of fund shares
Realized gain distributions 57,665 0 8,609,183 7,105,476
Unrealized appreciation 349,622 150,894 (655,336) 4,465,968
(depreciation)
Net increase (decrease) in 1,027,260 540,907 12,235,448 15,411,796
net assets from operations
Payments received from 1,728,629 547,746 2,409,672 2,619,931
contract owners
Transfers between sub- 10,779,615 939,267 (4,609,720) (5,488,171)
accounts and the fixed
account, net
Transfers for contract (693,541) (446,731) (5,190,564) (3,352,040)
benefits and terminations
Other transfers (to) from (2,636) (4,655) (46,825) (17,911)
Empire Fidelity
Investments Life Insurance
Co., net
Net increase (decrease) in 11,812,067 1,035,627 (7,437,437) (6,238,191)
net assets from contract
transactions
Retained in (returned from) 213 (2,182) 746 (18,089)
Variable Annuity Account
A, net
Total increase (decrease) 12,839,540 1,574,352 4,798,757 9,155,516
in net assets
Net assets at beginning of 8,525,055 6,950,703 91,819,600 82,664,084
year
Net assets at end of year $ 21,364,595 $ 8,525,055 $ 96,618,357 $ 91,819,600
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - INDEX 500 VIP II - ASSET MANAGER:
GROWTH
12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 1,020,047 $ 487,160 $ 655,208 $ 0
EXPENSES:
Mortality risk, expense 786,442 591,939 258,975 254,365
risk and adminis-
trative charges
Net investment income (loss) 233,605 (104,779) 396,233 (254,365)
Realized gain (loss) on sale 10,983,929 2,915,326 2,050,502 505,357
of fund shares
Realized gain distributions 2,362,610 988,503 3,064,065 31,544
Unrealized appreciation 9,112,387 11,740,910 (667,729) 5,087,508
(depreciation)
Net increase (decrease) in 22,692,531 15,539,960 4,843,071 5,370,044
net assets from operations
Payments received from 7,795,761 9,783,621 2,687,915 4,997,152
contract owners
Transfers between sub- 5,150,893 16,761,121 (6,145,972) 5,149,974
accounts and the fixed
account, net
Transfers for contract (4,898,551) (2,103,893) (774,181) (364,345)
benefits and terminations
Other transfers (to) from (20,771) (19,321) (18,649) (8,770)
Empire Fidelity
Investments Life Insurance
Co., net
Net increase (decrease) in 8,027,332 24,421,528 (4,250,887) 9,774,011
net assets from contract
transactions
Retained in (returned from) 1,138 (1,164) 932 16,275
Variable Annuity Account
A, net
Total increase (decrease) 30,721,001 39,960,324 593,116 15,160,330
in net assets
Net assets at beginning of 76,791,919 36,831,595 32,352,984 17,192,654
year
Net assets at end of year $ 107,512,920 $ 76,791,919 $ 32,946,100 $ 32,352,984
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
VIP II - CONTRAFUND
12/31/98 12/31/97
INCOME:
Dividends $ 921,708 $ 908,559
EXPENSES:
Mortality risk, expense 1,164,617 1,148,575
risk and adminis-
trative charges
Net investment income (loss) (242,909) (240,016)
Realized gain (loss) on sale 7,420,537 4,737,833
of fund shares
Realized gain distributions 6,781,142 2,401,192
Unrealized appreciation 23,314,910 16,812,677
(depreciation)
Net increase (decrease) in 37,273,680 23,711,686
net assets from operations
Payments received from 9,833,935 12,859,035
contract owners
Transfers between sub- (9,187,032) 430,459
accounts and the fixed
account, net
Transfers for contract (3,689,396) (2,031,744)
benefits and terminations
Other transfers (to) from (34,791) (35,583)
Empire Fidelity
Investments Life Insurance
Co., net
Net increase (decrease) in (3,077,284) 11,222,167
net assets from contract
transactions
Retained in (returned from) 1,591 (17,981)
Variable Annuity Account
A, net
Total increase (decrease) 34,197,987 34,915,872
in net assets
Net assets at beginning of 134,859,574 99,943,702
year
Net assets at end of year $ 169,057,561 $ 134,859,574
</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 III - BALANCED VIP III - GROWTH &
INCOME
12/31/98 12/31/97* 12/31/98 12/31/97*
INCOME:
Dividends $ 118,737 $ 2,385 $ 0 $ 174,550
EXPENSES:
Mortality risk, expense 53,067 28,408 373,426 148,409
risk and adminis- trative
charges
Net investment income (loss) 65,670 (26,023) (373,426) 26,141
Realized gain (loss) on 450,249 171,319 1,665,467 139,286
sale of fund shares
Realized gain distributions 181,404 0 176,254 567,288
Unrealized appreciation 373,537 369,337 10,346,320 3,083,821
(depreciation)
Net increase (decrease) in 1,070,860 514,633 11,814,615 3,816,536
net assets from operations
Payments received from 1,250,792 1,763,874 14,497,348 10,522,938
contract owners
Transfers between sub- 1,823,584 2,425,981 15,938,572 14,682,913
accounts and the fixed
account, net
Transfers for contract (219,835) (27,898) (1,973,918) (163,575)
benefits and terminations
Other transfers (to) from (2,736) (2,344) (20,133) (10,836)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 2,851,805 4,159,613 28,441,869 25,031,440
net assets from contract
transactions
Retained in (returned from) 847 3,591 1,729 5,169
Variable Annuity Account
A, net
Total increase (decrease) in 3,923,512 4,677,837 40,258,213 28,853,145
net assets
Net assets at beginning of 4,677,837 0 28,853,145 0
year
Net assets at end of year $ 8,601,349 $ 4,677,837 $ 69,111,358 $ 28,853,145
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP III - GROWTH MSUF - EMERGING
OPPORTUNITIES MARKETS EQUITY
12/31/98 12/31/97* 12/31/98 12/31/97**
INCOME:
Dividends $ 380,494 $ 28,023 $ 2,945 $ 1,084
EXPENSES:
Mortality risk, expense 314,105 178,840 2,732 93
risk and adminis- trative
charges
Net investment income (loss) 66,389 (150,817) 213 991
Realized gain (loss) on 1,816,418 215,977 8,643 (41)
sale of fund shares
Realized gain distributions 1,322,669 39,232 0 4,793
Unrealized appreciation 4,981,718 4,207,862 (98,190) (1,589)
(depreciation)
Net increase (decrease) in 8,187,194 4,312,254 (89,334) 4,154
net assets from operations
Payments received from 6,213,014 12,056,601 113,147 113,615
contract owners
Transfers between sub- (1,374,459) 16,961,634 314,261 91,436
accounts and the fixed
account, net
Transfers for contract (1,936,492) (98,075) (399) 0
benefits and terminations
Other transfers (to) from (10,659) (6,260) (107) (30)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 2,891,404 28,913,900 426,902 205,021
net assets from contract
transactions
Retained in (returned from) 1,458 5,054 (1) 0
Variable Annuity Account
A, net
Total increase (decrease) in 11,080,056 33,231,208 337,567 209,175
net assets
Net assets at beginning of 33,231,208 0 209,175 0
year
Net assets at end of year $ 44,311,264 $ 33,231,208 $ 546,742 $ 209,175
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MSUF - EMERGING
MARKETS DEBT
12/31/98 12/31/97**
INCOME:
Dividends $ 28,061 $ 8,109
EXPENSES:
Mortality risk, expense 1,769 167
risk and adminis- trative
charges
Net investment income (loss) 26,292 7,942
Realized gain (loss) on (5,315) (1,346)
sale of fund shares
Realized gain distributions 0 3,519
Unrealized appreciation (92,451) (12,084)
(depreciation)
Net increase (decrease) in (71,474) (1,969)
net assets from operations
Payments received from 87,141 13,063
contract owners
Transfers between sub- (69,071) 331,693
accounts and the fixed
account, net
Transfers for contract (606) (6,182)
benefits and terminations
Other transfers (to) from (46) (1)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 17,418 338,573
net assets from contract
transactions
Retained in (returned from) 2 0
Variable Annuity Account
A, net
Total increase (decrease) in (54,054) 336,604
net assets
Net assets at beginning of 336,604 0
year
Net assets at end of year $ 282,550 $ 336,604
</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.
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MSUF - GLOBAL EQUITY MSUF - INTERNATIONAL
MAGNUM
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 13,192 $ 1,780 $ 5,184 $ 4,724
EXPENSES:
Mortality risk, expense 10,616 129 6,535 86
risk and adminis- trative
charges
Net investment income (loss) 2,576 1,651 (1,351) 4,638
Realized gain (loss) on 61,905 1 48,096 25
sale of fund shares
Realized gain distributions 12,573 3,801 3,219 315
Unrealized appreciation 25,498 (2,984) (89,038) (5,976)
(depreciation)
Net increase (decrease) in 102,552 2,469 (39,074) (998)
net assets from operations
Payments received from 768,755 191,357 374,546 86,824
contract owners
Transfers between sub- 826,399 113,505 411,166 82,134
accounts and the fixed
account, net
Transfers for contract (5,584) 0 (2,657) 0
benefits and terminations
Other transfers (to) from (277) (15) 391 (1)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 1,589,293 304,847 783,446 168,957
net assets from contract
transactions
Retained in (returned from) 1 0 (1) 0
Variable Annuity Account
A, net
Total increase (decrease) in 1,691,846 307,316 744,371 167,959
net assets
Net assets at beginning of 307,316 0 167,959 0
year
Net assets at end of year $ 1,999,162 $ 307,316 $ 912,330 $ 167,959
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PBHG - GROWTH II PBHG - SMALL CAP VALUE
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 0 $ 0 $ 523 $ 0
EXPENSES:
Mortality risk, expense 1,846 47 17,718 158
risk and adminis- trative
charges
Net investment income (loss) (1,846) (47) (17,195) (158)
Realized gain (loss) on 18,137 (115) 100,408 106
sale of fund shares
Realized gain distributions 0 0 3,159 0
Unrealized appreciation 13,190 543 20,879 8,587
(depreciation)
Net increase (decrease) in 29,481 381 107,251 8,535
net assets from operations
Payments received from 133,860 58,005 500,142 102,904
contract owners
Transfers between sub- 141,208 68,703 1,799,420 436,360
accounts and the fixed
account, net
Transfers for contract (609) 0 (17,248) 0
benefits and terminations
Other transfers (to) from 23 (3) 9 15
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 274,482 126,705 2,282,323 539,279
net assets from contract
transactions
Retained in (returned from) (2) 2 (5) 5
Variable Annuity Account
A, net
Total increase (decrease) in 303,961 127,088 2,389,569 547,819
net assets
Net assets at beginning of 127,088 0 547,819 0
year
Net assets at end of year $ 431,049 $ 127,088 $ 2,937,388 $ 547,819
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
PBHG - LARGE CAP VALUE
12/31/98 12/31/97**
INCOME:
Dividends $ 5,924 $ 0
EXPENSES:
Mortality risk, expense 7,023 80
risk and adminis- trative
charges
Net investment income (loss) (1,099) (80)
Realized gain (loss) on 128,101 (61)
sale of fund shares
Realized gain distributions 12,521 0
Unrealized appreciation 232,358 2,433
(depreciation)
Net increase (decrease) in 371,881 2,292
net assets from operations
Payments received from 393,417 63,807
contract owners
Transfers between sub- 1,491,601 129,665
accounts and the fixed
account, net
Transfers for contract (103,177) 0
benefits and terminations
Other transfers (to) from (2,330) (2)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 1,779,511 193,470
net assets from contract
transactions
Retained in (returned from) 113 3
Variable Annuity Account
A, net
Total increase (decrease) in 2,151,505 195,765
net assets
Net assets at beginning of 195,765 0
year
Net assets at end of year $ 2,347,270 $ 195,765
</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:
PBHG - TECHNOLOGY & PBHG - SELECT 20
COMMUNICATIONS
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 180 $ 0 $ 280 $ 0
EXPENSES:
Mortality risk, expense 9,548 144 76,660 202
risk and adminis- trative
charges
Net investment income (loss) (9,368) (144) (76,380) (202)
Realized gain (loss) on sale 60,345 (593) 837,116 1
of fund shares
Realized gain distributions 0 0 0 0
Unrealized appreciation 424,975 (833) 4,809,171 16,933
(depreciation)
Net increase (decrease) in 475,952 (1,570) 5,569,907 16,732
net assets from operations
Payments received from 505,953 138,324 4,096,805 115,860
contract owners
Transfers between sub- 1,590,028 228,607 19,231,620 437,871
accounts and the fixed
account, net
Transfers for contract (4,960) 0 (343,605) 0
benefits and terminations
Other transfers (to) from (208) (32) (7,357) (10)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 2,090,813 366,899 22,977,463 553,721
net assets from contract
transactions
Retained in (returned from) (24) 25 57 (1)
Variable Annuity Account
A, net
Total increase (decrease) in 2,566,741 365,354 28,547,427 570,452
net assets
Net assets at beginning of 365,354 0 570,452 0
year
Net assets at end of year $ 2,932,095 $ 365,354 $ 29,117,879 $ 570,452
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SVIF - DISCOVERY FUND II SVIF - GROWTH FUND II
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 0 $ 0 $ 3 $ 1,828
EXPENSES:
Mortality risk, expense 1,761 48 4,395 66
risk and adminis- trative
charges
Net investment income (loss) (1,761) (48) (4,392) 1,762
Realized gain (loss) on sale 2,413 (44) 21,237 (79)
of fund shares
Realized gain distributions 3,035 0 0 3,930
Unrealized appreciation 2,341 (1,339) 112,638 (1,736)
(depreciation)
Net increase (decrease) in 6,028 (1,431) 129,483 3,877
net assets from operations
Payments received from 151,061 32,805 412,502 94,312
contract owners
Transfers between sub- 33,076 60,817 214,261 62,188
accounts and the fixed
account, net
Transfers for contract (2,353) 0 (1,040) 0
benefits and terminations
Other transfers (to) from (948) (10) 201 38
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 180,836 93,612 625,924 156,538
net assets from contract
transactions
Retained in (returned from) (9) 10 39 (37)
Variable Annuity Account
A, net
Total increase (decrease) in 186,855 92,191 755,446 160,378
net assets
Net assets at beginning of 92,191 0 160,378 0
year
Net assets at end of year $ 279,046 $ 92,191 $ 915,824 $ 160,378
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SVIF - OPPORTUNITY FUND
II
12/31/98 12/31/97**
INCOME:
Dividends $ 7,009 $ 324
EXPENSES:
Mortality risk, expense 17,744 156
risk and adminis- trative
charges
Net investment income (loss) (10,735) 168
Realized gain (loss) on sale (23,495) 0
of fund shares
Realized gain distributions 207,970 0
Unrealized appreciation (72,627) 2,325
(depreciation)
Net increase (decrease) in 101,113 2,493
net assets from operations
Payments received from 1,769,534 152,948
contract owners
Transfers between sub- 1,047,647 171,182
accounts and the fixed
account, net
Transfers for contract (19,037) 0
benefits and terminations
Other transfers (to) from (906) 87
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 2,797,238 324,217
net assets from contract
transactions
Retained in (returned from) (32) 38
Variable Annuity Account
A, net
Total increase (decrease) in 2,898,319 326,748
net assets
Net assets at beginning of 326,748 0
year
Net assets at end of year $ 3,225,067 $ 326,748
</TABLE>
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
EMPIRE FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT A
OF
EMPIRE FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
PBHG - TECHNOLOGY & PBHG - SELECT 20
COMMUNICATIONS
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 180 $ 0 $ 280 $ 0
EXPENSES:
Mortality risk, expense 9,548 144 76,660 202
risk and adminis- trative
charges
Net investment income (loss) (9,368) (144) (76,380) (202)
Realized gain (loss) on sale 60,345 (593) 837,116 1
of fund shares
Realized gain distributions 0 0 0 0
Unrealized appreciation 424,975 (833) 4,809,171 16,933
(depreciation)
Net increase (decrease) in 475,952 (1,570) 5,569,907 16,732
net assets from operations
Payments received from 505,953 138,324 4,096,805 115,860
contract owners
Transfers between sub- 1,590,028 228,607 19,231,620 437,871
accounts and the fixed
account, net
Transfers for contract (4,960) 0 (343,605) 0
benefits and terminations
Other transfers (to) from (208) (32) (7,357) (10)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 2,090,813 366,899 22,977,463 553,721
net assets from contract
transactions
Retained in (returned from) (24) 25 57 (1)
Variable Annuity Account
A, net
Total increase (decrease) in 2,566,741 365,354 28,547,427 570,452
net assets
Net assets at beginning of 365,354 0 570,452 0
year
Net assets at end of year $ 2,932,095 $ 365,354 $ 29,117,879 $ 570,452
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SVIF - DISCOVERY FUND II SVIF - GROWTH FUND II
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 0 $ 0 $ 3 $ 1,828
EXPENSES:
Mortality risk, expense 1,761 48 4,395 66
risk and adminis- trative
charges
Net investment income (loss) (1,761) (48) (4,392) 1,762
Realized gain (loss) on sale 2,413 (44) 21,237 (79)
of fund shares
Realized gain distributions 3,035 0 0 3,930
Unrealized appreciation 2,341 (1,339) 112,638 (1,736)
(depreciation)
Net increase (decrease) in 6,028 (1,431) 129,483 3,877
net assets from operations
Payments received from 151,061 32,805 412,502 94,312
contract owners
Transfers between sub- 33,076 60,817 214,261 62,188
accounts and the fixed
account, net
Transfers for contract (2,353) 0 (1,040) 0
benefits and terminations
Other transfers (to) from (948) (10) 201 38
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 180,836 93,612 625,924 156,538
net assets from contract
transactions
Retained in (returned from) (9) 10 39 (37)
Variable Annuity Account
A, net
Total increase (decrease) in 186,855 92,191 755,446 160,378
net assets
Net assets at beginning of 92,191 0 160,378 0
year
Net assets at end of year $ 279,046 $ 92,191 $ 915,824 $ 160,378
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SVIF - OPPORTUNITY FUND
II
12/31/98 12/31/97**
INCOME:
Dividends $ 7,009 $ 324
EXPENSES:
Mortality risk, expense 17,744 156
risk and adminis- trative
charges
Net investment income (loss) (10,735) 168
Realized gain (loss) on sale (23,495) 0
of fund shares
Realized gain distributions 207,970 0
Unrealized appreciation (72,627) 2,325
(depreciation)
Net increase (decrease) in 101,113 2,493
net assets from operations
Payments received from 1,769,534 152,948
contract owners
Transfers between sub- 1,047,647 171,182
accounts and the fixed
account, net
Transfers for contract (19,037) 0
benefits and terminations
Other transfers (to) from (906) 87
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 2,797,238 324,217
net assets from contract
transactions
Retained in (returned from) (32) 38
Variable Annuity Account
A, net
Total increase (decrease) in 2,898,319 326,748
net assets
Net assets at beginning of 326,748 0
year
Net assets at end of year $ 3,225,067 $ 326,748
</TABLE>
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
WPT - SMALL COMPANY WPT - INTERNATIONAL WPT - Total
POST-VENTURE
GROWTH EQUITY CAPITAL
12/31/98 12/31/97** 12/31/98 12/31/97** 12/31/98 12/31/97** 12/31/98
Income:
Dividends $ 0 $ 0 $ 1,849 $ 256 $ 0 $ 8 $/ 14,629,335
EXPENSES:
Mortality risk, expense 6,633 143 2,721 16 2,960 44 7,178,208
risk and adminis- trative
charges
Net investment income (loss) (6,633) (143) (872) 240 (2,960) (36) 7,451,127
Realized gain (loss) on sale 24,269 305 21,892 0 21,703 (281) 48,707,446
of fund shares
Realized gain distributions 0 0 0 1,767 0 0 47,165,611
Unrealized appreciation (56,918) 8,064 (33,271) (2,426) (24,571) 1,107 58,872,795
(depreciation)
Net increase (decrease) in (39,282) 8,226 (12,251) (419) (5,828) 790 162,196,979
net assets from operations /
Payments received from 331,697 74,156 181,100 11,805 337,029 18,680 95,861,634
contract owners
Transfers between sub- 353,786 230,810 103,508 20,304 119,403 47,306 2,170,806
accounts and the fixed
account, net
Transfers for contract (6,083) 0 (1,957) 0 (21,038) 0 (35,150,903)
benefits and terminations
Other transfers (to) from (69) 17 1,965 (2,059) (26) (3) (303,670)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 679,331 304,983 284,616 30,050 435,368 65,983 62,577,867
net assets from contract
transactions
Retained in (returned from) 16 (17) (2,058) 2,058 (5) 5 16,918
Variable Annuity Account
A, net
Total increase (decrease) in 640,065 313,192 270,307 31,689 429,535 66,778 224,791,764
net assets
Net assets at beginning of 313,192 0 31,689 0 66,778 0 793,336,287
year
Net assets at end of year $ 953,257 $ 313,192 $ 301,996 $ 31,689 $ 496,313 $ 66,778 $ 1,018,128,051
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL
12/31/97
Income:
Dividends $ 12,251,431
EXPENSES:
Mortality risk, expense 6,700,657
risk and adminis- trative
charges
Net investment income (loss) 5,550,774
Realized gain (loss) on sale 23,490,006
of fund shares
Realized gain distributions 28,545,781
Unrealized appreciation 77,703,242
(depreciation)
Net increase (decrease) in 135,289,803
net assets from operations
Payments received from 98,587,121
contract owners
Transfers between sub- 306,902
accounts and the fixed
account, net
Transfers for contract (18,866,297)
benefits and terminations
Other transfers (to) from (215,838)
Empire Fidelity Investments
Life Insurance Co., net
Net increase (decrease) in 79,811,888
net assets from contract
transactions
Retained in (returned from) (88,786)
Variable Annuity Account
A, net
Total increase (decrease) in 215,012,905
net assets
Net assets at beginning of 578,323,382
year
Net assets at end of year $ 793,336,287
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
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. Under applicable
insurance law, the assets and liabilities of the Account are clearly
identified and distinguished from other assets and liabilities of
EFILI. The Account cannot be charged with liabilities arising out of
any other business of EFILI.
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.
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.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Account in preparation of the financial statements
in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
Investments are made in the subaccounts and are valued at the reported
net asset values of such subaccounts.
ACCOUNTING FOR INVESTMENTS
Investment 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.
ANNUITY RESERVES
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.
FEDERAL INCOME TAXES
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").
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.
ESTIMATES
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.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform with the
current year presentation.
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 1, 1997, the daily charge was
equivalent to an annual effective rate of 1% of net assets. On
November 1, 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.
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 Company, Inc., 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,
1998:
PURCHASES SALES
VIP - Money Market $ 76,265,550 $ 55,965,720
VIP - High Income 13,163,157 9,715,771
VIP - Equity-Income 17,832,276 37,219,747
VIP - Growth 25,775,182 14,488,826
VIP - Overseas 6,599,234 6,859,924
VIP II - Investment Grade Bond 18,791,983 6,548,179
VIP II - Asset Manager 16,434,342 13,137,695
VIP II - Index 500 40,667,222 30,042,537
VIP II - Asset Manager: Growth 8,260,163 9,049,820
VIP II - Contrafund 20,784,360 17,321,820
VIP III - Balanced 8,589,421 5,489,695
VIP III - Growth & Income 35,158,428 6,912,002
VIP III - Growth Opportunities 13,293,328 9,011,408
MSUF - Emerging Markets Equity 591,131 164,017
MSUF - Emerging Markets Debt 466,037 422,325
MSUF - Global Equity 2,259,900 655,457
MSUF - International Magnum 1,956,900 1,171,587
PBHG - Growth II 541,591 268,957
PBHG - Small Cap Value 3,795,436 1,527,154
PBHG - Large Cap Value 2,671,707 880,661
PBHG - Technology & 2,752,500 671,079
Communications
PBHG - Select 20 33,444,117 10,542,977
SVIF - Discovery Fund II 317,309 135,208
SVIF - Growth Fund II 964,942 343,371
SVIF - Opportunity Fund II 3,640,439 645,998
WPT - Small Company Growth 1,255,237 582,523
WPT - International Equity 866,700 585,014
WPT - Post-Venture Capital 873,109 440,706
6. UNIT VALUES
A summary of changes in accumulation units and ending unit and
contract values for variable annuity contracts at December 31, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING PAYMENTS TRANSFERS CONTRACT UNITS ENDING DOLLARS
BALANCE RECEIVED BETWEEN TERMINATIONS BALANCE
UNITS FROM SUBACCOUNTS, UNIT
CONTRACT NET VALUE
OWNERS
JANUARY 1, 1998 TO
DECEMBER 31, 1998
VIP - Money Market 2,510,803 1,647,401 (220,944) (323,209) 3,614,051 $ 16.72 $ 60,421,297
VIP - High Income 868,993 133,979 (69,329) (79,486) 854,157 $ 27.53 23,511,486
VIP - Equity-Income 4,666,312 172,712 (732,658) (183,827) 3,922,539 $ 43.62 171,099,633
VIP - Growth 2,229,721 79,040 (61,187) (76,136) 2,171,438 $ 59.17 128,489,157
VIP - Overseas 1,059,560 32,658 (88,408) (36,606) 967,204 $ 26.31 25,446,085
VIP II - Investment Grade Bond 442,121 96,445 553,565 (105,199) 986,932 $ 20.24 19,978,293
VIP II - Asset Manager 3,604,315 100,308 (164,174) (234,500) 3,305,949 $ 28.30 93,567,756
VIP II - Index 500 3,001,334 296,359 206,144 (230,330) 3,273,507 $ 31.60 103,456,330
VIP II - Asset Manager: Growth 1,760,200 154,243 (337,931) (92,554) 1,483,958 $ 20.93 31,065,071
VIP II - Contrafund 6,419,636 443,789 (451,601) (200,304) 6,211,520 $ 26.40 163,982,487
VIP III - Balanced 371,377 100,999 145,380 (80,590) 537,166 $ 13.98 7,511,155
VIP III - Growth & Income 2,163,555 1,107,895 1,071,230 (368,438) 3,974,242 $ 16.29 64,760,113
VIP III - Growth Opportunities 2,558,459 468,112 (96,266) (238,946) 2,691,359 $ 15.62 42,029,696
MSUF - Emerging Markets Equity 20,806 12,500 39,057 (796) 71,567 $ 7.56 541,172
MSUF - Emerging Markets Debt 32,130 9,702 (3,800) (1,123) 36,909 $ 7.44 274,713
MSUF - Global Equity 29,979 70,359 75,573 (23,438) 152,473 $ 11.54 1,759,437
MSUF - International Magnum 17,042 35,893 36,135 (13,435) 75,635 $ 10.65 805,735
PBHG - Growth II 11,877 13,257 13,845 0 38,979 $ 10.90 424,700
PBHG - Small Cap Value 51,781 45,359 159,664 (8,023) 248,781 $ 11.48 2,855,455
PBHG - Large Cap Value 18,440 34,250 123,327 (21,049) 154,968 $ 14.05 2,177,563
PBHG - Technology & 34,037 46,836 143,175 (3,033) 221,015 $ 12.94 2,860,409
Communications
PBHG - Select 20 54,758 310,910 1,419,936 (93,852) 1,691,752 $ 16.80 28,413,465
SVIF - Discovery Fund II 8,046 16,676 3,995 (3,457) 25,260 $ 10.31 260,538
SVIF - Growth Fund II 15,649 36,533 18,029 (2,394) 67,817 $ 13.08 887,378
SVIF - Opportunity Fund II 31,571 165,753 90,042 (19,394) 267,972 $ 11.43 3,062,422
WPT - Small Company Growth 28,265 33,486 33,545 (1,824) 93,472 $ 9.82 917,883
WPT - International Equity 3,206 16,976 9,236 (189) 29,229 $ 10.33 301,996
WPT - Post-Venture Capital 6,514 30,180 11,079 (1,958) 45,815 $ 10.83 496,313
$ 981,357,735
</TABLE>
6. UNIT VALUES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING PAYMENTS TRANSFERS CONTRACT UNITS ENDING DOLLARS
BALANCE RECEIVED BETWEEN TERMINATIONS BALANCE
UNITS FROM SUBACCOUNTS, UNIT
CONTRACT NET VALUE
OWNERS
JANUARY 1, 1997 TO
DECEMBER 31, 1997
VIP - Money Market 3,144,313 1,192,450 (1,961,731) 135,771 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) (50,211) 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 (42,969) 1,760,200 $ 17.95 31,593,890
VIP II - Contrafund 5,882,023 702,932 (5,288) (160,031) 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 (132,532) 2,163,555 $ 12.68 27,424,348
VIP III - Growth 1,076,440 1,563,569 (81,550) 2,558,459 $ 12.63 32,320,770
Opportunities *
MSUF - Emerging Markets 11,511 9,298 (3) 20,806 $ 10.05 209,175
Equity **
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 (743) 51,781 $ 10.43 540,062
PBHG - Large Cap Value ** 6,302 12,765 (627) 18,440 $ 10.27 189,335
PBHG - Technology & 14,091 22,932 (2,986) 34,037 $ 9.87 335,899
Communications **
PBHG - Select 20 ** 11,265 43,493 0 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
* 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:
In our opinion, the accompanying statement of assets and liabilities
and the related statements of operations and changes in net assets
present fairly, in all material respects, the financial position 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 at
December 31, 1998, and the results of its operations and the changes
in its net assets for each of the periods indicated therein, in
conformity with generally accepted accounting principles. These
financial statements are the responsibility of Empire Fidelity
Investments Life Insurance Company's management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these 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, which include confirmation of investments at December
31, 1998 by correspondence with the funds, provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 25, 1999
(2_FIDELITY_LOGOS)(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
