<PAGE> 1
The attached are incorporated by reference herein to the semi-annual reports
filed by and on behalf of the following:
Seligman Portfolios, Inc., filed August 29, 1997
Portfolios which include: Seligman Capital; Seligman Cash Management;
Seligman Common Stock; Seligman Bond; Seligman Income; Seligman
Henderson International; Seligman Communications and Information;
Seligman Frontier; Seligman Henderson Global Smaller Companies;
Seligman High-Yield Bond; Seligman Henderson Global Technology; and
Seligman Henderson Global Growth Opportunities
<PAGE> 2
August, 1997
Dear Trillium Policyholder:
Enclosed for your review is the Trillium Semi-Annual Report for the period
ending June 30, 1997. We encourage you to review this information and refer to
it as needed throughout the year.
In addition, and for your convenience, please use the "tear-off" below to make
additional deposits to your Trillium policy. For other information, please
contact your registered representative.
Sincerely,
Janice Blanchard, ChFC, CLU
Senior Marketing Coordinator
- -------------------------------------------------------------------------------
Policyowner(s): _________________________ Policy Number: _______________
If you are changing allocation, please complete the following:
__________ This payment only
__________ This payment and all future payments
__________ Re-allocate all current assets
__________% Cash Mgmt (21) __________% Comm & Info (27)
__________% Income (22) __________% Global Grwth Ops (28)
__________% Bond (23) __________% Global Smlr Cos (29)
__________% Common Stock (24) __________% Frontier (41)
__________% Capital (25) __________% High Yld Bond (42)
__________% International (26) __________% Global Tech (43)
__________% Fixed Account (Specify 1, 3, 5, 7 or 10 Years*)
Total must equal 100%. Please make checks payable to Canada Life Insurance
Company of America.
_____________________ _________________________________
Date Policyowner's Signature
*3 ,5 ,7 and 10 Years are subject to state approval
Canada Life Insurance Company of America
6201 Powers Ferry Road
Atlanta, GA 30339
<PAGE> 3
-------------------------------------------
M I D - Y E A R R E P O R T
-------------------------------------------
TRILLIUM [CANADA LIFE LOGO]
A VARIABLE ANNUITY
June 30, 1997
<PAGE> 4
Total Returns*
For the Six Months Ended June 30, 1997
Sub-Accounts:
Bond..................................... 1.72%
Capital.................................. 8.26
Cash Management.......................... 1.90
Common Stock............................. 13.11
Communications and Information........... 6.91
Frontier................................. 9.01
Global Growth Opportunities.............. 12.73
Global Smaller Companies................. 8.77
Global Technology........................ 8.05
International............................ 13.45
High-Yield Bond.......................... 4.97
Income................................... 6.28
- ------------------
*Total returns of the Sub-Accounts are based on the performance of the Seligman
Portfolios, Inc., the underlying investment vehicle for the Canada Life of
America Variable Annuity Account 2 (Variable Annuity Account 2), less current
fees and charges. The returns exclude any contingent deferred sales charge
("CDSC") applicable to the Variable Annuity Account 2.
<PAGE> 5
Seligman Portfolios, Inc.
the underlying investment vehicle for
----------------------------------------
TRILLIUM
A VARIABLE
ANNUITY
----------------------------------------
----------------------------------------
----------------------------------------
August 1, 1997
Dear Contract Owner:
J. &. W. Seligman & Co. Incorporated, as Manager of Seligman Portfolios,
Inc., the underlying investment vehicle for your Trillium variable annuity, and
Canada Life Insurance Company of America, as issuer of The Canada Life of
America Variable Annuity Account 2, are pleased to provide the enclosed
unaudited financial statements and accompanying information for the six months
ended June 30, 1997.
Thus far, 1997 has shown great promise for both the domestic economy and
the financial markets. Instead of increasing inflation, the growing economy
actually generated lower producer prices for six consecutive months. The Federal
Reserve Board's decision to leave the federal funds rate unchanged in May also
helped tame inflation fears and gave further support to the already strong
financial markets. Low unemployment and high consumer confidence levels
continued, while consumer spending was relatively restrained.
While low interest rates generally supported the appreciation of the
equity market, investors remained primarily focused on the large, more liquid
stocks with predictable earnings. Consequently, the 25 largest stocks were
responsible for the majority of the equity market's gains. However, beginning in
May, the market's advances broadened to include a greater number of smaller- and
mid-capitalization stocks.
In the fixed-income markets, the enduring absence of inflationary
pressures and the lack of Fed intervention after the March increase prompted a
moderate rally, with bond prices rising and yields falling. After the
uncertainties of the first quarter, when the inflationary outlook was unclear,
market participants became optimistic in the second quarter as the low interest
rate environment persisted. Consequently, the yield on the benchmark 30-year US
Treasury bond fell to 6.78% on June 30, from a high of 7.17% on April 14. The
yield on the benchmark three-month US Treasury bill fell to 5.17% at June 30,
having reached a high of 5.40% on March 21.
The long-term outlook for the US economy and financial markets remains
positive. Productivity improvements, driven in large part by the deployment of
technology, have helped reduce corporate costs and increased profitability.
While the broadening of the market that took place in the second quarter is a
positive trend, market volatility has increased this year, and the possibility
of a short-term correction in the US markets is real.
Internationally, economic growth has improved without bringing any serious
signs of inflation. Overall, monetary conditions for the major economies have
remained quite benign. Only in the UK have we seen any increase in interest
rates. Against this backdrop, international markets have performed strongly thus
far this year, and we expect further progress to be made. In particular, Japan
has made an extremely strong recovery with both the market and the Yen
improving. Our favored regions continue to be Continental Europe, Japan, and the
emerging markets where economic and corporate profit growth has the greatest
potential.
We thank you for your continued interest in Trillium, and look forward to
serving your investment needs in the many years to come.
Respectfully,
D. Allen Loney William C. Morris
President Chairman
Canada Life Insurance Company of America J. & W. Seligman & Co. Incorporated
-1-
<PAGE> 6
Canada Life of America Variable Annuity Account 2
- --------------------------------------------------------------------------------
Statement of Net Assets (unaudited) June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Common Communications
Bond Capital Management Stock and Information
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
NET ASSETS:
Investment in Seligman Portfolios, Inc., at
market value (see Note 3 for cost values).... $3,557,041 $12,161,164 $7,751,223 $27,330,887 $61,941,160
Due (to) from Canada Life Insurance Company of
America (Note 6)............................. (35,280) (4,007) 19,742 62,704 487,289
Receivable (payable) for investments sold
(purchased).................................. 13,368 40,965 (40,031) 40,502 (230,363)
---------- ----------- ---------- ----------- -----------
Net Assets $3,535,129 $12,198,122 $7,730,934 $27,434,093 $62,198,086
========== =========== ========== =========== ===========
NET ASSETS ATTRIBUTABLE TO:
Policyholders' liability reserve............... $3,535,129 $12,198,122 $7,730,934 $27,434,093 $62,198,086
---------- ----------- ---------- ----------- -----------
Net Assets..................................... $3,535,129 $12,198,122 $7,730,934 $27,434,093 $62,198,086
========== =========== ========== =========== ===========
Number of Units Outstanding.................... 228,328 436,861 5,650,442 884,625 3,835,174
========== =========== ========== =========== ===========
Net Asset Value Per Unit....................... $ 15.4827 $ 27.9222 $ 1.3682 $ 31.0121 $ 16.2178
========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Global Global
Growth Smaller Global
Frontier Opportunities Companies Technology International
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSETS:
Investment in Seligman Portfolios, Inc., at
market value (see Note 3 for cost values)..... $31,010,294 $3,472,325 $21,071,620 $2,130,924 $9,703,202
Due (to) from Canada Life Insurance Company of
America (Note 6).............................. (145,388) 167,272 46,987 1,957 104,931
Receivable (payable) for investments sold
(purchased) 263,772 26,960 (13,181) 33,736 (41,205)
----------- ---------- ----------- ---------- ----------
Net Assets....................................... $31,128,678 $3,666,557 $21,105,426 $2,166,617 $9,766,928
=========== ========== =========== ========== ==========
NET ASSETS ATTRIBUTABLE TO:
Policyholders' liability reserve................. $31,128,678 $3,666,557 $21,105,426 $2,166,617 $9,766,928
----------- ---------- ----------- ---------- ----------
Net Assets....................................... $31,128,678 $3,666,557 $21,105,426 $2,166,617 $9,766,928
=========== ========== =========== ========== ==========
Number of Units Outstanding...................... 1,693,230 331,293 1,394,838 194,824 662,043
=========== ========== =========== ========== ==========
Net Asset Value Per Unit......................... $ 18.3842 $ 11.0674 $ 15.1311 $ 11.1209 $ 14.7527
=========== ========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
High-Yield
Bond Income Sub-Accounts
Sub-Account Sub-Account Combined
----------- ----------- ----------
<S> <C> <C> <C>
NET ASSETS:
Investment in Seligman Portfolios, Inc., at
market value (see Note 3 for cost values)..... $16,099,286 $8,156,065 $204,385,191
Due (to) from Canada Life Insurance Company of
America (Note 6).............................. 150,328 2,359 858,894
Receivable (payable) for investments sold
(purchased) 110,018 (11,097) 193,444
----------- ---------- ------------
Net Assets....................................... $16,359,632 $8,147,327 $205,437,529
=========== ========== ============
NET ASSETS ATTRIBUTABLE TO:
Policyholders' liability reserve................. $16,359,632 $8,147,327 $205,437,529
----------- ---------- ------------
Net Assets....................................... $16,359,632 $8,147,327 $205,437,529
=========== ========== ============
Number of Units Outstanding...................... 1,299,332 401,230
=========== ==========
Net Asset Value Per Unit......................... $ 12.5908 $ 20.3059
=========== ==========
</TABLE>
- -----------
See accompanying Notes.
-2-
<PAGE> 7
- --------------------------------------------------------------------------------
Statement of Operations (unaudited) For the Six Months Ended June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Common Communications
Bond Capital Management Stock and Information
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Dividend and capital gain distributions............. $ -- $ -- $216,718 $ -- $ --
Less mortality and expense risk charges (Note 6).... 43,411 113,406 258,141 135,757 51,411
------- --------- --------- ---------- ---------
Net Investment Loss................................. (43,411) (113,406) (41,423) (135,757) (51,411)
------- --------- --------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) from investments........... (8,115) 58,105 -- 64,495 369,775
Net unrealized appreciation/depreciation
from investments.................................. 95,764 886,221 -- 3,126,787 3,783,439
------- --------- --------- ---------- ---------
Net Realized and Unrealized Gain from
Investments....................................... 87,649 944,326 -- 3,191,282 4,153,214
------- --------- --------- ---------- ---------
Net Increase (Decrease) in Net
Assets Resulting from Operations.................. $44,238 $830,920 $(41,423) $3,055,525 $4,101,803
======= ========= ========= ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Global Global
Growth Smaller Global
Frontier Opportunities Companies Technology International
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Dividend and capital gain distributions............. $ -- $ -- $ -- $ -- $ --
Less mortality and expense risk charges (Note 6).... 406,222 2,771 166,626 13,420 1,607
---------- -------- ---------- -------- ----------
Net Investment Loss................................. (406,222) (2,771) (166,626) (13,420) (1,607)
---------- -------- ---------- -------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) from investments........... 32,387 23,511 35,697 7,086 31,616
Net unrealized appreciation/depreciation
from investments.................................. 2,869,052 331,407 1,830,640 120,525 1,030,603
---------- -------- ---------- -------- ----------
Net Realized and Unrealized Gain from
Investments....................................... 2,901,439 354,918 1,866,337 127,611 1,062,219
---------- -------- ---------- -------- ----------
Net Increase (Decrease) in Net
Assets Resulting from Operations.................. $2,495,217 $352,147 $1,699,711 $114,191 $1,060,612
========== ======== ========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
High-Yield
Bond Income Sub-Accounts
Sub-Account Sub-Account Combined
----------- ----------- ----------
<S> <C> <C> <C>
NET INVESTMENT INCOME:
Dividend and capital gain distributions............. $ -- $ -- $ 216,718
Less mortality and expense risk charges (Note 6).... 153,281 72,087 1,418,140
-------- -------- -----------
Net Investment Loss................................. (153,281) (72,087) (1,201,422)
-------- -------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) from investments........... 44,431 (11,076) 647,912
Net unrealized appreciation/depreciation
from investments.................................. 678,059 553,199 15,305,696
-------- -------- -----------
Net Realized and Unrealized Gain from
Investments....................................... 722,490 542,123 15,953,608
-------- -------- -----------
Net Increase (Decrease) in Net
Assets Resulting from Operations.................. $569,209 $470,036 $14,752,186
======== ======== ===========
</TABLE>
- -----------
See accompanying Notes.
-3-
<PAGE> 8
Canada Life of America Variable Annuity Account 2
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Capital Cash Management
Sub-Account Sub-Account Sub-Account
----------------------- ----------------------- ----------------------
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
6/30/97 Ended 6/30/97 Ended 6/30/97 Ended
(unaudited) 12/31/96 (unaudited) 12/31/96 (unaudited) 12/31/96
----------- -------- ----------- -------- ----------- --------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss)......... $ (43,411) $ 107,014 $ (113,406) $ 475,901 $ (41,423) $ 330,116
Net realized gain (loss)
on investments..................... (8,115) (2,688) 58,105 148,246 -- --
Net unrealized appreciation/
depreciation on investments........ 95,764 (116,469) 886,221 52,121 -- --
---------- ---------- ----------- --------- ---------- ----------
Net Increase (Decrease) in Net
Assets Resulting from
Operations......................... 44,238 (12,143) 830,920 676,268 (41,423) 330,116
---------- ---------- ----------- --------- ---------- ----------
CAPITAL TRANSACTIONS:
Net increase (decrease) from unit
transactions (Note 5).............. 834,402 833,395 1,966,196 4,653,886 (469,321) 1,753,858
---------- ---------- ----------- --------- ---------- ----------
Net Increase (Decrease) in Net
Assets Arising from Capital
Transactions....................... 834,402 833,395 1,966,196 4,653,886 (469,321) 1,753,858
---------- ---------- ----------- --------- ---------- ----------
Total Increase (Decrease)
in Net Assets...................... 878,640 821,252 2,797,116 5,330,154 (510,744) 2,083,974
Net Assets, Beginning of Period ..... 2,656,489 1,835,237 9,401,006 4,070,852 8,241,678 6,157,704
---------- ---------- ----------- ---------- ---------- ----------
Net Assets, End of Period ........... $3,535,129 $2,656,489 $12,198,122 $9,401,006 $7,730,934 $8,241,678
========== ========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Common Stock Communications and Frontier
Sub-Account Information Sub-Account Sub-Account
----------------------- ----------------------- -----------------------
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
6/30/97 Ended 6/30/97 Ended 6/30/97 Ended
(unaudited) 12/31/96 (unaudited) 12/31/96 (unaudited) 12/31/96
----------- -------- ----------- -------- ----------- --------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss)......... $ (135,757) $ 2,678,713 $ (51,411) $ (667,768) $ (406,222) $ 2,509,079
Net realized gain (loss)
on investments..................... 64,495 195,563 369,775 (1,090,347) 32,387 341,465
Net unrealized appreciation/
depreciation on investments........ 3,126,787 (425,986) 3,783,439 5,505,927 2,869,052 405,499
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in Net
Assets Resulting from
Operations......................... 3,055,525 2,448,290 4,101,803 3,747,812 2,495,217 3,256,043
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Net increase (decrease) from unit
transactions (Note 5).............. 3,983,592 8,521,175 3,746,646 14,971,955 2,724,053 11,790,123
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in Net
Assets Arising from Capital
Transactions....................... 3,983,592 8,521,175 3,746,646 14,971,955 2,724,053 11,790,123
----------- ----------- ----------- ----------- ----------- -----------
Total Increase (Decrease)
in Net Assets...................... 7,039,117 10,969,465 7,848,449 18,719,767 5,219,270 15,046,166
Net Assets, Beginning of Period ..... 20,394,976 9,425,511 54,349,637 35,629,870 25,909,408 10,863,242
----------- ----------- ----------- ----------- ----------- -----------
Net Assets, End of Period ........... $27,434,093 $20,394,976 $62,198,086 $54,349,637 $31,128,678 $25,909,408
=========== =========== =========== =========== =========== ===========
</TABLE>
-4-
<PAGE> 9
<TABLE>
<CAPTION>
Global Growth Global Global
Opportunities Smaller Companies Technology
Sub-Account Sub-Account Sub-Account
----------------------- ---------------------- ----------------------
Six Months Six Months Six Months
Ended 5/1/96* Ended Year Ended 5/1/96
6/30/97 to 6/30/97 Ended 6/30/97 to
(unaudited) 12/31/96 (unaudited) 12/31/96 (unaudited) 12/31/96
----------- -------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)......... $ (2,771) $ (3,423) $ (166,626) $ 991,325 $ (13,420) $ 692
Net realized gain (loss) on
investments ....................... 23,511 1,198 35,697 177,060 7,086 3,894
Net unrealized appreciation/
depreciation on investments........ 331,407 10,126 1,830,640 (45,488) 120,525 54,493
---------- ---------- ----------- ----------- ---------- ----------
Net Increase in Net Assets
Resulting from Operations.......... 352,147 7,901 1,699,711 1,122,897 114,191 59,079
---------- ---------- ----------- ----------- ---------- ----------
CAPITAL TRANSACTIONS:
Net increase (decrease)from unit
transactions (Note 5).............. 2,021,627 1,284,882 3,084,424 10,327,648 935,925 1,057,422
---------- ---------- ----------- ----------- ---------- ----------
Net Increase (Decrease)in Net
Assets Arising from Capital
Transactions....................... 2,021,627 1,284,882 3,084,424 10,327,648 935,925 1,057,422
---------- ---------- ----------- ----------- ---------- ----------
Total Increase in Net Assets......... 2,373,774 1,292,783 4,784,135 11,450,545 1,050,116 1,116,501
Net Assets, Beginning of Period ..... 1,292,783 -- 16,321,291 4,870,746 1,116,501 --
---------- ---------- ----------- ----------- ---------- ----------
Net Assets, End of Period............ $3,666,557 $1,292,783 $21,105,426 $16,321,291 $2,166,617 $1,116,501
========== ========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
International High-Yield Bond
Sub-Account Sub-Account
----------------------- ------------------------
Six Months Six Months
Ended Year Ended Year
6/30/97 Ended 6/30/97 Ended
(unaudited) 12/31/96 (unaudited) 12/31/96
----------- -------- ----------- --------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)......... $ (1,607) $ 106,747 $ (153,281) $ 644,240
Net realized gain (loss) on
investments ...................... 31,616 107,485 44,431 143,025
Net unrealized appreciation/
depreciation on investments........ 1,030,603 112,177 678,059 45,075
---------- ---------- ----------- -----------
Net Increase in Net Assets
Resulting from Operations.......... 1,060,612 326,409 569,209 832,340
---------- ---------- ----------- -----------
CAPITAL TRANSACTIONS:
Net increase (decrease)from unit
transactions (Note 5).............. 1,578,740 2,728,950 4,522,300 7,503,654
---------- ---------- ----------- -----------
Net Increase (Decrease)in Net
Assets Arising from Capital
Transactions....................... 1,578,740 2,728,950 4,522,300 7,503,654
---------- ---------- ----------- -----------
Total Increase in Net Assets......... 2,639,352 3,055,359 5,091,509 8,335,994
Net Assets, Beginning of Period ..... 7,127,576 4,072,217 11,268,123 2,932,129
---------- ---------- ----------- -----------
Net Assets, End of Period............ $9,766,928 $7,127,576 $16,359,632 $11,268,123
========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Income Sub-Accounts
Sub-Account Combined
--------------------- ----------------------
Six Months Six Months
Ended Year Ended Year
6/30/97 Ended 6/30/97 Ended
(unaudited) 12/31/96 (unaudited) 12/31/96
----------- -------- ----------- --------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)......... $ (72,087) $ 423,903 $ (1,201,422) $ 7,596,539
Net realized gain (loss) on
investments ...................... (11,076) (17,889) 647,912 7,012
Net unrealized appreciation/
depreciation on investments........ 553,199 (105,663) 15,305,696 5,491,812
---------- ---------- ------------ ------------
Net Increase in Net Assets
Resulting from Operations.......... 470,036 300,351 14,752,186 13,095,363
---------- ---------- ------------ ------------
CAPITAL TRANSACTIONS:
Net increase (decrease)from unit
transactions (Note 5).............. (417,477) 3,023,461 24,511,107 68,450,409
---------- ---------- ------------ ------------
Net Increase (Decrease)in Net
Assets Arising from Capital
Transactions....................... (417,477) 3,023,461 24,511,107 68,450,409
---------- ---------- ------------ ------------
Total Increase in Net Assets......... 52,559 3,323,812 39,263,293 81,545,772
Net Assets, Beginning of Period ..... 8,094,768 4,770,956 166,174,236 84,628,464
---------- ---------- ------------ ------------
Net Assets, End of Period............ $8,147,327 $8,094,768 $205,437,529 $166,174,236
========== ========== ============ ============
</TABLE>
- -----------------
* Commencement of operations.
See accompanying Notes.
-5-
<PAGE> 10
Canada Life of America Variable Annuity Account 2
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Organization
Canada Life of America Variable Annuity Account 2 ("Variable Annuity Account 2")
was established on February 26, 1993, as a separate investment account of Canada
Life Insurance Company of America ("CLICA") to receive and invest premium
payments under variable annuity policies issued by CLICA. Variable Annuity
Account 2 is registered as a unit investment trust under the Investment Company
Act of 1940, as amended. The assets of Variable Annuity Account 2 are invested
in the shares of Seligman Portfolios, Inc. (the "Fund"), a diversified,
open-end, management investment company. Variable Annuity Account 2 has twelve
sub-accounts, each of which invests only in the shares of the corresponding
portfolio of the Fund.
The assets of Variable Annuity Account 2 are the property of CLICA. The
portion of Variable Annuity Account 2 assets applicable to the policies will not
be charged with liabilities arising out of any other business CLICA may conduct.
2. Significant Accounting Policies
Investments
Investments in shares of the Fund are valued at the reported net asset values of
the respective portfolios. Realized gains and losses are computed on the basis
of average cost. The difference between cost and current market value of
investments owned is recorded as an unrealized gain or loss on investments.
Dividends
Dividends are recorded on the ex-dividend date and reflect the dividends
declared by the Fund from their accumulated net investment income and net
realized investment gains. Dividends in the Cash Management Portfolio are
declared daily and paid monthly. Dividends in the Bond, Capital, Common Stock,
Communications and Information, Frontier, Global Growth Opportunities, Global
Smaller Companies, Global Technology, International, High-Yield Bond, and Income
Portfolios are declared and paid annually. Dividends paid to the Variable
Annuity Account 2 are reinvested in additional shares of the respective
portfolio of the Fund at the net asset value per share.
Federal Income Taxes
Variable Annuity Account 2 is not taxed separately because the operations of
Variable Annuity Account 2 will be included in the federal income tax return of
CLICA, which is taxed as a "life insurance company" under the provisions of the
Internal Revenue Code.
3.Investments
The investment by Variable Annuity Account 2 in the individual portfolios of
the Fund at June 30, 1997, is as follows:
<TABLE>
<CAPTION>
Number of Shares Market Price Market Value Cost
---------------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Bond 350,793 $10.14 $ 3,557,041 $ 3,544,545
Capital 696,117 17.47 12,161,164 11,178,575
Cash Management 7,751,223 1.00 7,751,223 7,751,223
Common Stock 1,505,834 18.15 27,330,887 24,887,106
Communications and Information 3,912,897 15.83 61,941,160 56,265,068
Frontier 1,883,979 16.46 31,010,294 27,312,094
Global Growth Opportunities 308,377 11.26 3,472,325 3,130,792
Global Smaller Companies 1,493,382 14.11 21,071,620 19,152,418
Global Technology 189,584 11.24 2,130,924 1,955,906
International 654,737 14.82 9,703,202 8,348,923
High-Yield Bond 1,359,737 11.84 16,099,286 15,336,326
Income 723,697 11.27 8,156,065 7,895,647
------------ ------------
$204,385,191 $186,758,623
============ ============
</TABLE>
4. Security Purchases and Sales
The aggregate cost of purchases and the proceeds from sales of investments
for the six months ending June 30, 1997, are presented below:
<TABLE>
<CAPTION>
Aggregate Cost of Purchases Proceeds from Sales
---------------------------- -------------------
<S> <C> <C>
Bond $ 1,228,068 $ 423,322
Capital 3,856,347 2,017,905
Cash Management 14,923,161 15,175,174
Common Stock 6,624,162 2,832,733
Communications and Information 20,870,401 17,312,628
Frontier 12,005,029 9,729,357
Global Growth Opportunities 2,673,399 690,014
Global Smaller Companies 4,374,090 1,394,131
Global Technology 1,604,476 718,351
International 2,216,660 659,049
High-Yield Bond 8,402,582 4,065,222
Income 1,063,276 1,514,760
----------- -----------
$79,841,651 $56,532,646
=========== ===========
</TABLE>
-6-
<PAGE> 11
Canada Life of America Variable Annuity Account 2
5. Summary of Changes from Unit Transactions
The following table represents a summary of changes from unit transactions
attributable to contract holders for the periods indicated. The Global Growth
Opportunities and Global Technology Sub-Accounts commenced operations on
May 1, 1996.
<TABLE>
<CAPTION>
Six Months Ended June 30, 1997 Year Ended December 31, 1996
------------------------------ -----------------------------
Units Amount Units Amount
------ -------- ------ --------
<S> <C> <C> <C> <C>
Bond Sub-Account
Accumulation Units:
Contract purchases and net transfers in 90,272 $ 1,364,902 132,349 $ 1,978,551
Terminated contracts and net transfers out (36,470) (530,500) (76,585) (1,145,156)
----------- ----------- ----------- -----------
53,802 834,402 55,764 833,395
----------- ----------- ----------- -----------
Capital Sub-Account
Accumulation Units:
Contract purchases and net transfers in 151,916 4,055,418 248,098 6,192,212
Terminated contracts and net transfers out (79,542) (2,089,222) (61,479) (1,538,326)
----------- ----------- ----------- -----------
72,374 1,966,196 186,619 4,653,886
----------- ----------- ----------- -----------
Cash Management Sub-Account
Accumulation Units:
Contract purchases and net transfers in 16,001,575 21,766,562 16,031,782 22,304,326
Terminated contracts and net transfers out (16,489,271) (22,235,883) (14,650,097) (20,550,468)
----------- ----------- ----------- -----------
(487,696) (469,321) 1,381,685 1,753,858
----------- ----------- ----------- -----------
Common Stock Sub-Account
Accumulation Units:
Contract purchases and net transfers in 242,367 6,935,757 420,292 10,665,942
Terminated contracts and net transfers out (101,590) (2,952,165) (82,681) (2,144,767)
----------- ----------- ----------- -----------
140,777 3,983,592 337,611 8,521,175
----------- ----------- ----------- -----------
Communications and Information
Sub-Account
Accumulation Units:
Contract purchases and net transfers in 630,574 15,393,869 2,136,400 29,690,542
Terminated contracts and net transfers out (378,200) (11,647,223) (1,068,840) (14,718,587)
----------- ----------- ----------- -----------
252,374 3,746,646 1,067,560 14,971,955
----------- ----------- ----------- -----------
Frontier Sub-Account
Accumulation Units:
Contract purchases and net transfers in 439,657 7,354,881 813,870 14,406,146
Terminated contracts and net transfers out (282,764) (4,630,828) (63,193) (2,616,023)
----------- ----------- ----------- -----------
156,893 2,724,053 750,677 11,790,123
----------- ----------- ----------- -----------
Global Growth Opportunities Sub-Account*
Accumulation Units:
Contract purchases and net transfers in 242,610 2,469,239 163,620 1,572,553
Terminated contracts and net transfers out (42,992) (447,612) (31,945) (287,671)
----------- ----------- ----------- -----------
199,618 2,021,627 131,675 1,284,882
----------- ----------- ----------- -----------
Global Smaller Companies Sub-Account
Accumulation Units:
Contract purchases and net transfers in 336,329 4,712,504 890,029 11,994,060
Terminated contracts and net transfers out (114,739) (1,628,080) (125,651) (1,666,412)
----------- ----------- ----------- -----------
221,590 3,084,424 764,378 10,327,648
----------- ----------- ----------- -----------
Global Technology Sub-Account*
Accumulation Units:
Contract purchases and net transfers in 136,239 1,441,930 127,107 1,242,668
Terminated contracts and net transfers out (49,898) (506,005) (18,624) (185,246)
----------- ----------- ----------- -----------
86,341 935,925 108,483 1,057,422
----------- ----------- ----------- -----------
International Sub-Account
Accumulation Units:
Contract purchases and net transfers in 271,765 2,311,152 327,752 4,120,757
Terminated contracts and net transfers out (157,837) (732,412) (109,617) (1,391,807)
----------- ----------- ----------- -----------
113,928 1,578,740 218,135 2,728,950
----------- ----------- ----------- -----------
</TABLE>
-7-
<PAGE> 12
Canada Life of America Variable Annuity Account 2
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended June 30, 1997 Year Ended December 31, 1996
-------------------------------- ----------------------------
Units Amount Units Amount
------ -------- ------ --------
<S> <C> <C> <C> <C>
High-Yield Bond Sub-Account
Accumulation Units:
Contract purchases and net transfers in 705,730 $ 8,522,893 848,850 $ 9,721,724
Terminated contracts and net transfers out (345,854) (4,000,593) (185,110) (2,218,070)
--------- ----------- --------- -----------
359,876 4,522,300 663,740 7,503,654
--------- ----------- --------- -----------
Income Sub-Account
Accumulation Units:
Contract purchases and net transfers in 63,464 1,254,083 224,340 4,172,168
Terminated contracts and net transfers out (85,924) (1,671,560) (62,752) (1,148,707)
--------- ----------- --------- -----------
(22,460) (417,477) 161,588 3,023,461
--------- ----------- --------- -----------
Net increase from unit transactions $24,511,107 $68,450,409
=========== ===========
</TABLE>
- --------------
* From commencement of operations.
6. Mortality and Expense Risk (M and E) Charges
CLICA assumes mortality and expense risks related to the operations of Variable
Annuity Account 2 and deducts a charge equal to an effective annual rate of
1.25% of the net asset value of each of the Funds at each valuation period. In
addition, at each valuation period an effective annual rate of 0.35% of the net
asset value of each Sub-Account is deducted as daily administration fees.
7. Net Assets
Net assets at June 30, 1997, consisted of the following:
<TABLE>
<CAPTION>
Accumulated Net Net
Investment Realized Unrealized
Accumulated Income Gain Appreciation
Unit M and E and Capital (Loss) on (Depreciation)
Sub-Account Transactions Charges Gains Investments on Investments Net Assets
- ----------- ------------ ---------- ----------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bond $ 3,326,987 $ (99,623) $ 303,432 $ (8,163) $ 12,496 $ 3,535,129
Capital 10,279,035 (279,109) 1,021,761 193,846 982,589 12,198,122
Cash Management 7,446,841 (482,330) 766,423 -- -- 7,730,934
Common Stock 20,890,483 (435,575) 4,258,616 276,788 2,443,781 27,434,093
Communications and Information 55,688,030 (945,041) 2,315,169 (536,164) 5,676,092 62,198,086
Frontier 24,579,233 (714,762) 3,171,688 394,319 3,698,200 31,128,678
Global Growth Opportunities 3,306,509 (7,487) 1,293 24,709 341,533 3,666,557
Global Smaller Companies 17,982,291 (328,266) 1,295,682 236,517 1,919,202 21,105,426
Global Technology 1,993,347 (21,271) 8,543 10,980 175,018 2,166,617
International 8,111,361 (115,096) 265,443 150,941 1,354,279 9,766,928
High-Yield Bond 14,859,319 (282,506) 823,773 196,086 762,960 16,359,632
Income 6,982,908 (240,436) 1,180,263 (35,826) 260,418 8,147,327
------------ ----------- ----------- --------- ----------- ------------
$175,446,344 $(3,951,502) $15,412,086 $ 904,033 $17,626,568 $205,437,529
============ =========== =========== ========= =========== ============
</TABLE>
8. Unit Values
Unit values as reported are calculated as total net assets divided by total
units for each Sub-Account.
-8-
<PAGE> 13
VARIABLE ACCOUNT PERFORMANCE
Average Annual Total Returns
for Periods Ending June 30,
1997 Assuming Contract Continues
[TRILLIUM LOGO]
<TABLE>
<CAPTION>
Year- Since Inception
to-Date* 1 year 3 Year 5 Year Inception Date
<S> <C> <C> <C> <C> <C> <C>
SELIGMAN COMMUNICATION AND INFORMATION
PORTFOLIO 6.91% 19.28% - - 19.30% 10/4/94
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO 8.06 13.06 - - 9.51 5/1/96
SELIGMAN FRONTIER PORTFOLIO 9.01 10.73 - - 24.89 10/4/94
SELIGMAN HENDERSON GLOBAL SMALLER
COMPANIES PORTFOLIO 8.77 6.64 - - 16.32 10/4/94
SELIGMAN CAPITAL PORTFOLIO 8.26 7.85 17.54% 13.81% 12.04 6/21/88
SELIGMAN HENDERSON GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO 12.73 10.83 - - 9.06 5/1/96
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO 13.45 14.31 9.74 - 9.80 5/3/93
(formerly Seligman Henderson Global Portfolio)
SELIGMAN COMMON STOCK PORTFOLIO 13.11 20.58 20.04 14.93 13.35 6/21/88
SELIGMAN INCOME PORTIFOLIO 6.28 9.63 9.07 7.33 8.16 6/21/88
SELIGMAN HIGH-YIELD BOND PORTFOLIO 4.97 12.99 - - 11.20 5/1/95
SELIGMAN BOND PORTFOLIO 1.72 4.90 5.47 4.20 4.96 6/21/88
(formerly Seligman Fixed Income Securities Portfolio)
SELIGMAN CASH MANAGEMENT PORTFOLIO 1.90 3.75 3.62 2.64 3.53 6/21/88
</TABLE>
* Not annualized
SELIGMAN CASH MANAGEMENT PORTFOLIO'S current yield, annualized for the
seven-day period ending June 30, 1997, was 3.86%. TRILLIUM FIXED ACCOUNT'S rate
for the one year Guarantee Period was 5.25% as of June 30, 1997. Rate for each
Guarantee period will be different, and are subject to change on a monthly
basis. The 3,5,7, and 10 year Guarantee Periods are currently not approved in
all states. Please call (800) 221-2783 for state approval and the current rates
on these Gaurantee Periods.
Performance quoted represents past performance, and the investment return and
principal value of an investment will fluctuate so that units, when surrendered,
may be worth more or less than their original cost. Performance of the variable
portfolios reflects the performance of Seligman Portfolio, Inc., the
underlying investment vehicle for the Trillium Variable Account, adjusted for
the current fees and charges (excluding CDSC) associated with Trillium. For
performance figures with CDSC, please see reverse side. The variable account
commenced operations on 5/3/93. The fixed account is held in the general
account of Canada Life Insurance Company of America (CLICA) and provides a
guarantee, by CLICA, against loss of principal, and guarantee payment of a
specified current rate of interest. Please contact your financial advisor or
call Seligman Financial Services at 800-221-2783 for a prospectus containing
full details including information on fees and charges. Please read the
prospectus carefully before investing or sending money.
There are specific risks associated with global technology investing, such as
currency fluctuations, foreign taxation, differences in financial reporting
practices, and changes in political conditions. A portfolio that concentrates
its investments in one sector of the economy may be subject to greater share
price fluctuations than a more diversified portfolio. There are specific risks
associated with global investing, such as currency fluctuations, foreign
taxation, differences in financial reporting practices, and changes in
political conditions. The securities in which the Seligman High-Yield Bond
Portfolio invests are subject to a greater risk of loss of principal and
interest that higher-rated investment grade bonds. Purchases should carefully
assess the risks assciated with an investment in the portfolio.
<PAGE> 14
VARIABLE ACCOUNT PERFORMANCE
Average Annual Total Returns for Periods Ending June 30, 1997
Assuming Contract is Surrendered at End of Period
<TABLE>
<CAPTION>
Since Inception
1 year 3 Year 5 Year Inception Date
<S> <C> <C> <C> <C> <C>
SELIGMAN COMMUNICATIONS AND INFORMATION
PORTFOLIO 13.88% - - 18.10% 10/4/94
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO 7.66 - - 4.95 5/1/96
SELIGMAN FRONTIER PORTFOLIO 5.33 - - 23.79 10/4/94
SELIGMAN HENDERSON GLOBAL SMALLER
COMPANIES PORTFOLIO 1.24 - - 15.06 10/4/94
SELIGMAN CAPITAL PORTFOLIO 2.45 16.44% 13.49% 12.04 6/21/88
SELIGMAN HENDERSON GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO 5.43 - - 4.47 5/1/96
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO 8.91 8.48 - 9.15 5/3/93
(formerly Seligman Henderson Global Portfolio)
SELIGMAN COMMON STOCK PORTFOLIO 15.18 18.99 14.62 13.35 6/21/88
SELIGMAN INCOME PORTFOLIO 4.23 7.79 6.92 8.16 6/21/88
SELIGMAN HIGH-YIELD BOND PORTFOLIO 7.59 - - 9.36 5/1/95
SELIGMAN BOND PORTFOLIO (0.50) 4.10 3.74 4.96 6/21/88
(formerly Seligman Fixed Income Securities Portfolio)
SELIGMAN CASH MANAGEMENT PORTFOLIO (1.65) 2.20 2.15 3.53 6/21/88
</TABLE>
Issued by: Canada Life Insurance Company of America, 6201 Powers Ferry Road,
N.W., Atlanta, GA 30339
Distributed by: Seligman Financial Services, Inc., 100 Park Avenue, New York, NY
10017-(800) 221-2783
SELIGMAN CASH MANAGEMENT PORTFOLIO'S current yield, annualized for the
seven-day period ending June 30, 1997, was 3.86%. TRILLIUM FIXED ACCOUNT'S rate
for the one year Guarantee Period was 5.25% as of June 30, 1997. Rates for each
Guarantee Period will be different, and are subject to change on a monthly
basis. The 3,5,7, and 10 year Guarantee Periods are currently not approved in
all states. Please call (800) 221-2783 for state approval and the current rates
on these Guarantee Periods.
Performance quoted represents past performance, and the investment return and
principal value of an investment will fluctuate so that units, when
surrendered, may be worth more or less than their original cost. Performance
of the variable portfolios reflects the performance of Seligman Portfolios,
Inc., the underlying investment vehicle for the Trillium Variable Account, and
is adjusted for Trillium's current fees and charges, including the maximum CDSC
of 6%. Trillium's CDSC for current premiums (premiums paid during the current
and previous six policy years) starts at 6% and decreases in steps, depending on
the number of policy years since the premium was paid, as follows: less than two
years, 6%; at least two, but less than four, 5%; at least four, but less than
five, 4%; at least five, but less than six, 3%; at least six, but less than
seven, 2%; at least seven, no charge. The variable account commenced operations
on 5/3/93. The fixed account is held in the general account of Canada Life
Insurance Company of America (CLICA) and provides a guarantee, by CLICA, against
loss of principal, and guarantees payment of a specified current rate of
interest. Please contact your financial advisor or call Seligman Financial
Services at 800-221-2783 for a prospectus containing full details including
information on fees and charges. Please read the prospectus carefully before
investing or sending money.
