<PAGE>
[ LOGO ]
SEMI-ANNUAL REPORT
------------------
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
------------------
JUNE 30, 1995
GoldenSelect products are issued by Golden American Life Insurance Company
and distributed by Directed Services, Inc. both subsidiaries of Bankers Trust
Company
<PAGE>
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
August 25, 1995
Dear Shareholder of The Managed Global Account:
I am pleased to send your June 30, 1995 semi-annual report for The Managed
Global Account. The Managed Global Account seeks high total return consistent
with prudent regard for capital preservation by investing in a wide range of
securities and market sectors worldwide. As you know, this investment choice is
available to owners of GoldenSelect variable annuities.
Results in overseas markets were mixed in the first half of the year. On
balance, Europe outperformed Asian and Pacific markets. Latin American markets
rose though they have yet to return to levels reached prior to the devaluation
of the Mexican peso late last year. While first half results have been
disappointing, we are optimistic about the Portfolio's potential in coming
months given improving fundamental and economic conditions particularly in Japan
and emerging markets where attractive investment opportunities exist.
Investors in GoldenSelect products benefitted from two important service
enhancements:
o In response to numerous requests, we now offer policyholders the service
of depositing their systematic withdrawal checks directly into their bank
accounts. This makes the funds available sooner and eliminates the risk
of delayed mail and lost checks.
o The new Golden American Inquiry Network (GAIN) was introduced. It
provides contractholders with automated information about their
GoldenSelect accounts and investments. Just call 1-800-366-0066.
These and other enhancements to our service reflect our commitment to you, our
contractholders. And, of course, we will continue to seek opportunities and
enhancements for our investors in the second half of 1995 and in the years
ahead.
If you have any questions, want a prospectus containing more complete
information about GoldenSelect Series, or need any other information, please
call your financial adviser or GoldenSelect Customer Service at 1-800-366-0066.
Please read the prospectus carefully before investing.
Thank you!
Sincerely,
[ SIG CUT ]
Terry L. Kendall
President
Sold by prospectus only, GoldenSelect products are issued by Golden American
Life Insurance Company and distributed by Directed Services, Inc., both
subsidiaries of Bankers Trust.
1
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $70,730,492) (Notes 1 and 3)......................................................... $ 68,873,749
Cash............................................................................................................. 1,633,682
Receivables:
Investment securities sold.................................................................................... 325,668
Dividends and interest........................................................................................ 251,578
Net unrealized appreciation of forward foreign currrency exchange contracts...................................... 713
Prepaid expenses and other assets................................................................................ 48,022
---------------
Total Assets.................................................................................................. 71,133,412
LIABILITIES
Payables:
Investment securities purchased............................................................................... 808,120
Golden American for contract related expenses (Note 2)........................................................ 41,313
Accrued expenses................................................................................................. 62,167
---------------
Total Liabilities............................................................................................. 911,600
---------------
Total Net Assets.............................................................................................. $ 70,221,812
---------------
---------------
NET ASSETS
For variable annuity contracts................................................................................... $ 66,777,916
Retained in The Managed Global Account of Separate Account D by Golden American (Note 2)......................... 3,443,896
---------------
Total Net Assets.............................................................................................. $ 70,221,812
---------------
---------------
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes of $1,652)........................................................... $ 63,469
Dividends (net of foreign withholding taxes of $96,050)......................................................... 712,270
---------------
Total investment income...................................................................................... 775,739
EXPENSES:
Management and advisory fees (Note 2)........................................................................... 370,098
Mortality and expense risk and administrative charges (Note 2).................................................. 371,053
Custodian fees (Note 2)......................................................................................... 38,452
Fund accounting fees............................................................................................ 32,672
Printing and mailing............................................................................................ 10,229
Auditing fees................................................................................................... 8,639
Legal fees...................................................................................................... 6,920
Board of governors' fees and expenses (Note 2).................................................................. 2,708
Other........................................................................................................... 18,301
---------------
Total Expenses............................................................................................... 859,072
Less amounts paid by the investment manager pursuant to expense limitation agreement (Note 2)................... (20,961)
---------------
Net expenses................................................................................................. 838,111
---------------
NET INVESTMENT LOSS............................................................................................... (62,372)
---------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Security transactions........................................................................................ (5,789,705)
Forward foreign exchange contracts........................................................................... (4,502)
Foreign currency transactions................................................................................ 36,895
Net change in unrealized appreciation on:
Securities................................................................................................... 2,405,779
Forward foreign exchange contracts........................................................................... 713
Other assets and liabilities denominated in foreign currencies............................................... 4,885
---------------
Net realized and unrealized loss on investments................................................................. (3,345,935)
---------------
Net decrease in net assets resulting from operations......................................................... $ (3,408,307)
---------------
---------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment loss............................................................................ $ (62,372) $ (259,767)
Net realized loss on securities, forward foreign exchange contracts and foreign currency
transactions................................................................................ (5,757,312) (1,363,558)
Net unrealized appreciation (depreciation) of securities, forward foreign exchange contracts and
other assets and liabilities denominated in foreign currencies.............................. 2,411,377 (11,511,952)
--------------- ---------------
Net decrease in net assets resulting from operations........................................... (3,408,307) (13,135,277)
--------------- ---------------
CONTRACT RELATED TRANSACTIONS:
Premiums....................................................................................... 2,605,900 22,680,207
Benefits, surrenders and other withdrawals..................................................... (4,667,946) (8,496,158)
Net transfers (to) from Separate Account B and Guaranteed Interest Division of Golden
American.................................................................................... (10,005,992) (2,244,552)
Contract related charges and fees (Note 2)..................................................... (510,398) (1,073,158)
--------------- ---------------
Net increase (decrease) in net assets resulting from contract related transactions............. (12,578,436) 10,866,339
--------------- ---------------
Net decrease in net assets..................................................................... (15,986,743) (2,268,938)
NET ASSETS:
Beginning of year.............................................................................. 86,208,555 88,477,493
--------------- ---------------
End of year.................................................................................... $ 70,221,812 $ 86,208,555
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<S> <C> <C>
COMMON STOCKS -- 88.8%
ARGENTINA -- 2.9%
3,565 Banco De Galicia Y Buenos Aires
S.A................................ $ 56,149
18,700 Banco Frances del Rio de la Plata
S.A., ADR.......................... 336,600
18,300 Banco Frances del Rio de la Plata
S.A................................ 110,743
61,900 Capex SA, GDR, Class A**............. 928,500
4,500 Telefonica De Argentina, ADR......... 210,375
21,800 Y.P.F. S.A........................... 411,475
-----------
2,053,842
-----------
AUSTRALIA -- 3.8%
516,000 BTR Nylex Ltd........................ 986,550
41,100 Niugini Mining Ltd.+................. 106,623
305,000 Pasminco Ltd.+....................... 294,819
310,679 Woodside Petroleum Ltd............... 1,218,900
-----------
2,606,892
-----------
AUSTRIA -- 3.2%
2,400 Maculan Holding AG................... 92,402
17,000 VA Technologie AG+................... 2,127,618
-----------
2,220,020
-----------
CHINA -- 0.5%
18,000 Jilan Chemical, ADR.................. 346,500
-----------
DENMARK -- 0.4%
2,000 International Service Systems AS,
Class B............................ 52,217
3,048 Kobenhaun Lufthavne.................. 234,223
-----------
286,440
-----------
FINLAND -- 1.7%
25,650 Metsa-Serla, Class B................. 1,141,068
500 Metra AB, Class B.................... 22,243
-----------
1,163,311
-----------
FRANCE -- 6.4%
5,300 Bouygues............................. 634,743
4,000 Cetelem.............................. 618,475
20,300 Elf Aquitaine, ADR................... 756,175
46,000 Largardere Groupe.................... 952,950
10,080 Scor S.A............................. 247,260
19,200 Total S.A., Class B.................. 1,155,661
4,597 Total S.A., ADS...................... 139,059
-----------
4,504,323
-----------
GERMANY -- 0.6%
9,200 Deutsche Bank AG..................... 447,077
-----------
GREAT BRITAIN -- 8.3%
188,000 British Airport Authority Ord........ 1,475,402
72,863 BTR Ord.............................. 370,206
50,000 Govett & Company Ltd. Ord. PLC....... 218,659
154,000 Prudential Corporation............... 820,410
30,000 Reckitt & Colman Ord................. 317,255
630,000 Singer & Friedlander................. 921,709
295,400 Takare PLC........................... 906,636
37,935 Thorn-Emi Ord........................ 787,256
-----------
5,817,533
-----------
HONG KONG -- 1.8%
62,900 Hong Kong Electric Holdings Ltd...... 213,791
48,737 HSBC Holdings Ltd.................... 625,132
44,401 Jardine Matheson Holdings Ltd........ 326,347
37,000 Jardine Strategic Ltd................ 119,140
-----------
1,284,410
-----------
VALUE
SHARES (NOTE 1)
----------- -----------
INDIA -- 3.3%
33,000 Hindalco Industries Ltd., GDR**...... $ 965,250
41,400 India Fund (The) Inc................. 424,350
51,200 Reliance Industries Ltd., GDS........ 934,400
-----------
2,324,000
-----------
INDONESIA -- 1.8%
20,000 Bank International Indonesia
(Foreign).......................... 61,742
114,000 PT Modern Photo Film Company
(Foreign).......................... 619,398
34,800 PT Tri Polyta Indonesia, ADR......... 604,650
-----------
1,285,790
-----------
ISRAEL -- 1.0%
75,000 Ampal American Israel Corporation,
Class A............................ 496,875
16,000 ECI Telecom, Ltd..................... 219,000
-----------
715,875
-----------
JAPAN -- 24.7%
48,640 Canon Inc............................ 2,426,052
170 DDI Corporation...................... 1,363,931
458 East Japan Railway Company........... 2,350,658
80,000 Hitachi Ltd.......................... 797,593
35,000 Japan Securities Finance Company,
Ltd. .............................. 392,307
119,000 KAO Corporation...................... 1,432,128
5,000 Kirin Beverage Corporation........... 83,181
11,000 Murata Manufacturing Company Ltd..... 403,634
54,000 NEC Corporation...................... 591,894
4,200 Nippon Communication Systems
Corporation........................ 48,611
211 Nippon Telegraph & Telephone
Corporation........................ 1,767,565
4,000 Sankyo Company Ltd................... 188,779
65,000 Shin-Etsu Chemical Company Ltd....... 1,142,705
20,000 Sony Corporation..................... 960,415
31,000 TDK Corporation...................... 1,411,834
5,100 Toho Company Ltd..................... 848,446
29,900 Tsuchiya Home Company................ 440,977
18,600 York-Benimaru Company Ltd............ 702,260
-----------
17,352,970
-----------
KOREA -- 2.1%
40,300 Mando Machinery Corporation, GDR**... 1,481,025
-----------
MALAYSIA -- 0.6%
1,000 Arab Malaysian Merchant Bank BHD..... 11,895
75,000 Westmont BHD......................... 372,232
-----------
384,127
-----------
MEXICO -- 1.9%
143,900 Cementos Mexicanos S.A., ADR**....... 1,043,635
9,450 Grupo Financiero Banamex S.A......... 14,334
189,000 Grupo Financiero Banamex S.A.,
Series B........................... 286,675
-----------
1,344,644
-----------
NEW ZEALAND -- 5.5%
1,272,854 Brierley Investments Ltd............. 961,593
325,000 Fletcher Challenge Ltd............... 912,571
355,000 Fletcher Challenge (Forest Division)
Ltd................................ 467,551
527,500 Lion Nathan Ltd...................... 1,043,874
35,000 Sky City Ltd......................... 497,234
-----------
3,882,823
-----------
NORWAY -- 2.6%
43,700 Norsk Hydro, ADR..................... 1,824,475
-----------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- -----------
<S> <C> <C>
SINGAPORE -- 2.3%
9,000 D.B.S. Land Ltd...................... $ 28,207
119,000 Development Bank of Singapore Ltd.... 1,353,918
464,000 I.P.C. Corporation................... 257,317
-----------
1,639,442
-----------
SPAIN -- 3.3%
58,100 Banco De Santander S.A., ADR......... 2,287,687
-----------
SWEDEN -- 4.7%
8,100 Asea AB, Class B..................... 688,120
50,200 Astra AB, Class B.................... 1,511,259
29,900 Celsius Industriar AB, Series B...... 454,176
385,000 Foreningsbanken AB................... 656,256
-----------
3,309,811
-----------
SWITZERLAND -- 2.3%
1,465 Brown Boveri & Cie AG, Class A....... 1,516,526
150 Danza Holding AG..................... 128,962
-----------
1,645,488
-----------
TAIWAN -- 0.9%
62,926 Tuntex Distinct Corporation GDS**.... 597,797
-----------
THAILAND -- 2.2%
466,800 Industrial Finance Corporation of
Thailand (Foreign)................. 1,229,167
80,100 Thai Military Bank Public Company
Ltd. (Foreign)..................... 324,489
-----------
1,553,656
-----------
Total Common Stocks
(Cost $64,131,964)................. 62,359,958
-----------
PREFERRED STOCKS -- 0.9%
AUSTRALIA -- 0.5%
77,763 The News Corporation Ltd., Voting
Pfd. Shares........................ 384,680
-----------
AUSTRIA -- 0.4%
6,800 Maculan Holdings AG.................. 248,542
-----------
Total Preferred Stocks (Cost
$972,156).......................... 633,222
-----------
WARRANTS -- 0.0% COST ($20,647)
SWITZERLAND -- 0.0%
600 Danza Holding AG., Expires
08/02/1996......................... 456
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- -----------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS -- 5.9%
AUSTRALIA -- 0.3%
$33,000 BTR Nylex Ltd.,
9.000% due 11/29/2049.............. $ 258,002
-----------
JAPAN -- 2.0%
111,000,000 Matasushita Electric Works Ltd.,
2.700% due 05/31/2002.............. 1,400,024
-----------
TAIWAN -- 3.6%
920,000 United Microelectronics Corporation,
1.250% due 06/08/2004.............. 1,568,600
890,000 Yang Ming Marine Transport
Corporation,
2.000% due 10/06/2001.............. 924,487
-----------
2,493,087
-----------
Total Convertible Corporate Bonds
(Cost $3,876,725).................. 4,151,113
-----------
REPURCHASE AGREEMENT -- 2.5%
(Cost $1,729,000)
1,729,000 Agreement with PNC Securities, 5.900%
dated 06/30/1995 to be repurchased
at $1,729,850 on 07/03/1995,
collateralized by $1,731,998 U.S.
Treasury Bills, 5.900% due
12/14/1995......................... 1,729,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $70,730,492*)
(NOTES 1 AND 3)........................ 98.1% 68,873,749
OTHER ASSETS AND LIABILITIES (NET)....... 1.9 1,348,063
--------- ------------
NET ASSETS............................... 100.0% $70,221,812
--------- ------------
--------- ------------
</TABLE>
----------------------
* Aggregate cost for Federal tax purposes.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration
to qualified institutional buyers.
+ Non-income producing security.
<TABLE>
<CAPTION>
GLOSSARY OF TERMS
<S> <C> <C>
ADR -- American Depositary Receipt.
GDR -- Global Depositary Receipt.
GDS -- Global Depositary Share.
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
JUNE 30, 1995 (UNAUDITED)
JUNE 30, 1995, SECTOR DIVERSIFICATION OF THE FUND WAS AS FOLLOWS:
<TABLE>
<CAPTION>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (NOTE 1)
------------------------------------- ------------- ------------
<S> <C> <C>
LONG TERM INVESTMENTS:
Financial Services................... 14.9% $10,449,889
Electric Machinery Equipment &
Electronics........................ 12.9 9,041,977
Oil and Gas Extraction............... 7.8 5,505,745
Transportation....................... 7.3 5,114,188
Durable Goods -- Consumer............ 6.3 4,414,535
Telecommunications................... 5.1 3,609,483
Chemicals & Allied Products.......... 4.3 3,028,255
Engineering/Construction............. 4.2 2,914,476
Investment Companies................. 4.0 2,784,380
Forest Products & Paper.............. 3.6 2,543,432
Health Care Services................. 3.3 2,338,764
Entertainment........................ 2.5 1,730,360
Pharmaceuticals...................... 2.2 1,511,258
Automobile Parts..................... 2.1 1,481,025
Technology........................... 2.0 1,411,834
Metal & Metal Products............... 1.9 1,366,692
Beverages............................ 1.6 1,127,055
Insurance............................ 1.5 1,067,670
Nondurable Goods -- Consumer......... 1.3 936,653
Energy............................... 1.3 928,500
Retail............................... 1.0 702,259
Textiles............................. 0.9 597,797
Other................................ 3.6 2,538,522
----- ------------
TOTAL LONG TERM
INVESTMENTS........................ 95.6 67,144,749
REPURCHASE AGREEMENT................. 2.5 1,729,000
----- ------------
TOTAL INVESTMENTS.................... 98.1 68,873,749
OTHER ASSETS AND LIABILITIES
(NET).............................. 1.9 1,348,063
----- ------------
NET ASSETS........................... 100.0% $70,221,812
----- ------------
----- ------------
</TABLE>
SCHEDULE OF
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS TO BUY
CONTRACTS TO RECEIVE
-------------------------------- UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION/
DATE CURRENCY U.S. $ FOR U.S. $ (DEPRECIATION)
---------- -------------------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
07/03/1995 DKK 147,030 27,225 27,298 $ (73)
07/03/1995 FIM 90,450 21,177 21,129 48
07/03/1995 DKK 87,388 16,181 16,080 101
07/05/1995 DKK 700,521 13,058 13,079 (21)
-----
$ 55
-----
</TABLE>
<TABLE>
<CAPTION>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS TO SELL
CONTRACTS TO DELIVER
--------------------------------
<S> <C> <C> <C> <C> <C>
UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION/
DATE CURRENCY U.S. $ FOR U.S. $ (DEPRECIATION)
---------- -------------------- ----------- ----------- -----------------
07/03/1995 AUD 165,224 117,433 118,218 $ 785
07/05/1995 AUD 44,783 31,829 31,715 (114)
07/05/1995 GBP 53,811 85,573 85,560 (13)
-----
$ 658
-----
Net Unrealized Appreciation of Forward Foreign Currency
Exchange Contracts ..................................... $ 713
-----
-----
</TABLE>
<TABLE>
<CAPTION>
GLOSSARY OF TERMS
<S> <C> <C>
AUD -- Australian Dollar
DKK -- Danish Kroner
FIM -- Finnish Markka
GBP -- Great Britain Pound Sterling
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Managed Global Account of Separate Account D (the 'Account') is registered
with the Securities and Exchange Commission under the Investment Company Act of
1940, as amended, as a non-diversified open-end investment company and meets the
definition of a separate account under federal securities laws. The Account was
established on April 18, 1990, by Golden American Life Insurance Company
('Golden American'), to support the operations of variable annuity contracts
('Contracts'). Golden American, a wholly-owned subsidiary of BT Variable, Inc.
('BTV'), an indirect subsidiary of Bankers Trust Company ('Bankers Trust'), is a
stock life insurance company organized under the laws of the state of Delaware.
Golden American is primarily engaged in the issuance of variable insurance
products and is authorized to do business in the District of Columbia and in all
states except New York.
Operations on the Account commenced on October 21, 1992. Golden American
provides for variable accumulation and benefits under the Contracts by crediting
annuity considerations to the Account at the direction of contractholders. The
assets of the Account are owned by Golden American. The portion of the Account's
assets applicable to Contracts will not be chargeable with liabilities arising
out of any other business Golden American may conduct, but obligations of the
Account, including the promise to make benefit payments, are obligations of
Golden American.
The net assets maintained in the Account provide the basis for the periodic
determination of the amount of benefits under the Contracts. The net assets may
not be less than the reserves and other contract liabilities with respect to the
Account. Golden American has entered into a reinsurance agreement with an
affiliated reinsurer to cover insurance risks under the Contracts. Golden
American remains liable to the extent that the reinsurer does not meet its
obligations under the reinsurance agreement.
The following is a summary of the significant accounting policies consistently
followed by the Account in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
(A) VALUATION: Domestic and foreign portfolio securities, except as noted below,
for which market quotations are readily available are stated at market value.
Market value is determined on the basis of the last reported sales price in the
principal market where such securities are traded or, if no sales are reported,
the mean between representative bid and asked quotations obtained from a
quotation reporting system or from established market makers.
Long-term debt securities, including those to be purchased under firm commitment
agreements, are normally valued on the basis of quotes obtained from brokers and
dealers or pricing services, which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data. Under certain circumstances, long-term debt securities having a maturity
of sixty days or less may be valued at amortized cost. Short-term debt
securities are valued at their cost which, when combined with accrued interest,
approximates fair value. Amortized cost involves valuing a portfolio security
instrument at its cost, initially, and thereafter, assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by, or under the direction of the Board
of Governors.
(B) DERIVATIVE FINANCIAL INSTRUMENTS: The Account may engage in various
portfolio strategies, as described below, to seek to manage its exposure to
equity markets and to manage fluctuations in foreign currency rates. Buying
forward foreign currency exchange contracts, writing puts and buying calls tend
to increase the Account's exposure to the underlying market or currency. Selling
forward foreign exchange contracts, buying puts and writing calls tend to
decrease the Account's exposure to the underlying market or currency. In some
instances, investments in derivative financial instruments may involve, to
varying degrees, elements of market risk and risks in excess of the amount
recognized in the Statement of Assets and Liabilities. Losses may arise under
these contracts due to the existence of an illiquid secondary market for the
contracts, or if the counterparty does not perform under the contract. An
additional primary risk associated with the use of certain of these contracts
may be caused by an imperfect correlation between movements in the price of the
derivative financial instruments and the price of the underlying securities,
indices or currency.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Account may enter into forward
foreign currency exchange contracts. The Account will engage in forward foreign
currency exchange transactions to protect itself against fluctuations in
currency
8
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
exchange rates. Forward foreign currency exchange contracts are valued at the
applicable forward rate, and are marked to market daily. The change in market
value is recorded by the Account as an unrealized gain or loss. When the
contract is closed, the Account records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. Although forward foreign exchange contracts
limit the risk of loss due to a decline in the value of the hedged currency,
they also limit any potential gain that might result should the value of the
currency increase. In addition, the Account could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts.
Open contracts at June 30, 1995 and their related unrealized appreciation
(depreciation) are set forth in the Schedule of Forward Foreign Currency
Exchange Contracts which accompanies the Portfolio of Investments. Realized and
unrealized gain/(loss) arising from forward foreign exchange contracts are
included in net realized and unrealized gain/(loss) on forward foreign exchange
contracts.
OPTIONS: The Account may engage in option transactions. When the Account writes
an option, an amount equal to the premium received by the Account is reflected
as an asset and an equivalent liability. The amount of the liability is
subsequently marked to market on a daily basis to reflect the current value of
the option written.
When a security is sold through an exercise of an option, the related premium
received (or paid) is deducted from (or added to) the basis of the security
sold. When an option expires (or the Account enters into a closing transaction),
the Account realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the premium paid or received). The Account
did not write options during the six months ended June 30, 1995. Realized gains
arising from purchased options are included in the net realized gain/(loss) on
security transactions.
(C) FOREIGN CURRENCY: Assets and liabilities denominated in foreign currencies
and commitments under forward foreign currency exchange contracts are translated
into U.S. dollars at the mean of the quoted bid and asked prices of such
currencies against the U.S. dollar as of the close of business immediately
preceding the time of valuation. Purchases and sales of portfolio securities are
translated at the rates of exchange prevailing when such securities were
acquired or sold. Income and expenses are translated at rates of exchange
prevailing when accrued.
The Account does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain (loss) from investments.
Reported net realized gains or losses on foreign currency transactions arise
from sales and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of dividends,
interest and foreign withholding taxes recorded on the Account's books, and the
U.S. dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses on assets and liabilities denominated in
foreign currencies arise from changes in the value of assets and liabilities
other than investments in securities at the end of the reporting period,
resulting from changes in the exchange rate.
(D) REPURCHASE AGREEMENTS: The Account may enter into repurchase agreements in
accordance with guidelines approved by the Board of Governors of the Account.
The Account bears a risk of loss in the event that the other party to a
repurchase agreement defaults on its obligations and the Account is delayed or
prevented from exercising its rights to dispose of the underlying securities
received as collateral including the risk of a possible decline in the value of
the underlying securities during the period while the Account seeks to exercise
its rights. The Account takes possession of the collateral and reviews the value
of the collateral and the creditworthiness of those banks and dealers with which
the Account enters into repurchase agreements to evaluate potential risks. The
market value of the underlying securities received as collateral must be at
least equal to the total amount of the repurchase obligation. In the event of
counterparty default, the Account has the right to use the underlying securities
to offset the loss.
(E) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
recorded on the trade date. Dividend income is recorded on the ex-dividend date.
Interest income, (including amortization of premium and discount on securities)
and expenses are accrued daily. Realized gains and losses from investment
transactions are recorded on an identified cost basis which is the same basis
used for federal income tax purposes.
(F) FEDERAL INCOME TAXES: Operations of the Account form a part of, and are
taxed with, the total operations of Golden American, which is taxed as a life
insurance company under the Internal Revenue Code. Earnings and realized capital
gains of
9
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
the Account attributable to the contractowners are excluded in the determination
of the federal income tax liability of Golden American.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
OPERATING EXPENSES: Directed Services, Inc. ('DSI'), a wholly owned subsidiary
of BTV, serves as Manager to the Account pursuant to a Management Agreement.
Under the Management Agreement, DSI has overall responsibility, subject to the
supervision of the Board of Governors, for administrating all operations of the
Account and for monitoring and evaluating the management of the assets of the
Account by the Portfolio Manager. In consideration for these services, the
Account pays DSI a management fee based upon the following annual percentage of
the Account's average daily net assets: 0.40% of the first $500 million and
0.30% of the amount over $500 million. Warburg Pincus Counsellors, Inc.
('Warburg') serves as the Portfolio Manager of the Account and in that capacity
provides investment advisory services for the Account including asset allocation
and security selection. In consideration for these services, Warburg is paid an
advisory fee by the Account, payable monthly, based on the average daily net
assets of the Account at an annual rate of 0.60% of the first $500 million and
0.50% on the excess thereof. For the six months ended June 30, 1995, the Account
incurred management and advisory fees of $147,988 and $222,110, respectively.
The Account bears the expenses of its investment management operations,
including expenses associated with custody of securities, portfolio accounting,
the Board of Governors, legal and auditing services, registration fees and other
related operating expenses. Bankers Trust is the custodian of the assets in the
Account. For the six months ended June 30, 1995, the Account incurred $38,452
for custodian fees. In addition, the Account reimburses Golden American for
certain organization expenses (See Note 4).
Certain officers and governors of the Account are also officers and/or directors
of the Manager, Golden American, BTV and Bankers Trust.
MORTALITY AND EXPENSE RISK CHARGES: Golden American assumes mortality and
expense risks related to the operations of the Account and, in accordance with
the terms of the Contracts, deducts a daily charge from the assets of the
Account at annual rates ranging from 0.80% to 1.25% of the assets attributable
to Contracts to cover these risks.
ASSET BASED ADMINISTRATIVE CHARGE: To compensate Golden American for the
administrative expenses under the Contract, a daily charge at an annual rate of
0.10% is deducted from assets attributable to the Contracts.
OTHER CHARGES: A partial withdrawal charge of the lower of 2% of the withdrawal
or $25 is deducted from the accumulation value for each additional partial
withdrawal after the first partial withdrawal in a Contract year. There is an
excess allocation charge of $25 for each allocation change between divisions in
excess of the the five free charges allowed per Contract year. An administrative
fee of $40 per Contract year is deducted from the accumulation value of certain
Contracts.
DEFERRED SALES LOAD: A sales load of up to 6.50% is applicable to each premium
payment for sales related expenses as specified in the Contracts. For certain
Contracts offered, the sales load is deducted in equal annual installments over
the period the Contract is in force, not to exeed 10 years. For other Contracts
offered, although the sales load is chargeable to each premium when it is
received by Golden American, the amount of such charge is initially advanced by
Golden American to Contractowners and included in the accumulation value and
then deducted in equal installments on each Contract processing date over a
period of six years. For the six months ended June 30, 1995, contract sales
loads of $497,497 initially advanced by Golden American to the Account were
deducted from contractowners' accumulation value. Upon surrender of the
Contract, the unamortized deferred sales load is deducted from the accumulation
value by Golden American. In addition, when partial withdrawal limits are
exceeded, a portion of the unamortized deferred sales load is deducted.
The net assets retained in the Account by Golden American in the accompanying
financial statements represent the unamortized deferred sales load and premium
taxes advanced by Golden American, noted above.
10
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
Net Assets Retained in the Account by Golden American are as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE DEC. 31,
30, 1995 1994
------------ ------------
<S> <C> <C>
Balance at beginning of year........................................................... $ 4,533,964 $ 4,668,658
Sales load advanced.................................................................... 148,813 1,338,526
Premium tax advanced................................................................... 517 6,823
Net transfer (to) from Separate Account B and the Guaranteed Interest Division......... (734,073) (427,829)
Amortization of deferred sales load and premium tax.................................... (505,325) (1,052,214)
------------ ------------
$ 3,443,896 $ 4,533,964
------------ ------------
------------ ------------
</TABLE>
PREMIUM TAXES: Premium taxes are deducted, where applicable, from the
accumulation value of each Contract. The amount and timing of the deduction
depend on the annuitant's state of residence and currently ranges up to 3.5% of
premiums. Premium taxes are generally incurred on the annuity commencement date
and a charge for such premium taxes is then deducted from the accumulation value
of such date. However, some jurisdictions impose a premium tax at the time the
initial and additional premiums are paid, regardless of the annuity commencement
date. In those states, Golden American advances the amount of the charge for
premium taxes to Contractowners and then deducts it from the accumulation value
in equal installments on each contract processing date over a six year period.
Golden American is currently waiving the deduction of the applicable
installments of the charge for premium taxes previously advanced by Golden
American to Contractowners. Golden American reserves the right to deduct the
total amount of the charge for premium taxes previously waived and unrecovered
on the annuity commencement date or upon surrender of the Contract.
EXPENSE LIMITATION: The Account and DSI entered into an agreement to limit the
ordinary operating expenses of the Account, excluding, among other things,
mortality and expense risk charges, asset based administrative charges, interest
expense, and other contractual charges, through December 31, 1995, so that such
expenses do not exceed on an annual basis 1.25% of the first $500 million of the
average daily net assets and 1.05% of the excess over $500 million. For the six
months ended June 30, 1995, $20,961 was reimbursed by DSI to the Account
pursuant to this limitation. Such agreement existed under the same terms for the
year ended December 31, 1994.
DSI, a registered broker/dealer, acts as the distributor and principal
underwriter (as defined in the Securities Act of 1933 and the Investment Company
Act of 1940, as amended) of the Contracts issued through the Account. For the
six months ended June 30, 1995 and the year ended December 31, 1994, fees paid
by Golden American to DSI in connection with sales of the contracts aggregated
approximately $156,000 and $1,343,000, respectively.
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities, excluding short-term securities
and options transactions, during the six months ended June 30, 1995, were
$11,786,014 and $21,976,329, respectively.
Aggregate gross and net unrealized depreciation for all securities in which
there is an excess of tax cost over value was $1,856,743. There was no aggregate
gross unrealized appreciation.
4. ORGANIZATION COSTS
The initial organizational expenses of the Account of approximately $150,000
were paid by Golden American. The Account reimburses Golden American monthly for
such expenses ratably over a period of sixty months from the date of the
Account's commencement of operations. At June 30, 1995, the unamortized balance
of such expenses was $84,736. It is Golden American's intention not to seek
reimbursement for any unpaid amounts should the Account cease operations.
11
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
THE MANAGED GLOBAL ACCOUNT
OF
SEPARATE ACCOUNT D
5. NET RETURN
The following table shows the net return as a percentage of average net assets
with respect to the Account for the following periods. The net return does not
reflect the deduction of certain Contract owner transaction expenses.
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED YEAR ENDED PERIOD*
ENDED JUNE DEC. 31, DEC. 31, ENDED DEC.
30, 1995+ 1994 1993 31, 1992+
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income...................................................... 1.04% 2.00% 1.97% 0.62%
Expense charges++...................................................... 1.12 2.31 2.42 0.36
----------- ----------- ----------- -----------
Net investment income (loss)........................................... (0.08) (0.31) (0.45) 0.26
Net realized and unrealized gain (loss) on investments................. (4.49) (13.26) 6.19 (0.18)
----------- ----------- ----------- -----------
Net return............................................................. (4.57)% (13.57)% 5.74% 0.08%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
------------------
* The Account commenced operations on October 21, 1992.
+ Not annualized.
++ Net of reimbursement of expenses.
Since July 1, 1994, Warburg Pincus Counsellors, Inc. has served as Portfolio
Manager for the Account. Prior to that date, a different firm served as
Portfolio Manager.
12