<PAGE>
American Life
SEPARATE ACCOUNT NO. 2
ANNUAL REPORT
&
THE ANNUAL REPORTS OF
MUTUAL OF AMERICA INVESTMENT CORPORATION
SCUDDER VARIABLE LIFE INVESTMENT FUND
TCI GROWTH FUND
CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND:
EQUITY-INCOME PORTFOLIO
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND II:
ASSET MANAGER AND CONTRAFUND PORTFOLIOS
DECEMBER 31, 1996
This report is not to be construed as an offering for sale of any Variable
product. No offering is made except in conjunction with a prospectus which must
precede or accompany this report.
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NO. 2
ANNUAL REPORT
DECEMBER 31, 1996
Dear Participant:
We are pleased to send you the 1996 Annual Report of American Life's
Separate Account No. 2. This Account, which commenced operations in late 1993,
is an investment vehicle for participants in our Individual Retirement Annuity
programs, Thrift Plans, as well as for Flexible Premium Annuity policyholders.
Separate Account No. 2 consists of sixteen distinct Funds; each invests in
shares of one of eight funds of Mutual of America Investment Corporation
("Investment Company"): the Money Market, All America (formerly the Stock
Fund), Equity Index, Bond, Short-Term Bond, Mid-Term Bond, Composite and
Aggressive Equity Fund; three portfolios of Scudder Variable Life Investment
Fund: the Scudder Bond, Capital Growth and International Fund; the TCI Growth
Fund of TCI Portfolios, Inc., the Calvert Responsibly Invested Balanced Fund
(formerly "Calvert Socially Responsible Series") of Acacia Capital Corporation
and three portfolios of Fidelity Investments: Equity-Income, Contrafund and
Asset Manager Fund.
Each of the Funds of Separate Account No. 2 owns shares in a similarly named
Fund of Mutual of America Investment Corporation ("Investment Company"),
Portfolio of Scudder Variable Life Investment Fund ("Scudder"), Fund of TCI
Portfolios, Inc. ("TCI"), Calvert Responsibly Invested Balanced Portfolio of
Acacia Capital Corporation ("Calvert") and Fidelity Investments Variable
Insurance Products Fund and Variable Insurance Products Fund II ("Fidelity").
The investment results of each of the Funds of Separate Account No. 2 are
based on the performance of the corresponding Funds or Portfolios of the
Investment Company, Scudder, TCI, Calvert and Fidelity.
The Separate Account Funds invest in Funds and Portfolios which have the
following investment objectives:
THE INVESTMENT COMPANY MONEY MARKET FUND: This Fund seeks to obtain high
current income to the extent consistent with the maintenance of liquidity,
investment quality and stability of capital through investments in money
market instruments and other short-term debt securities.
THE INVESTMENT COMPANY ALL AMERICA FUND: The investment objective for
approximately 60% of the assets of this Fund (the "Indexed Assets") is to
provide investment results that to the extent practical corresponds to the
performance of the Standard & Poor's 500 Composite Index. The Indexed Assets
are invested in the same manner as the Equity Index Fund described below. The
investment objective for the remaining approximately 40% of the assets (the
"Active Assets") is to achieve a high level of total return, through both
appreciation of capital and, to a lesser extent, current income, by means of a
diversified portfolio of securities that may include common stocks, securities
convertible into common stocks, bonds and money market instruments.
THE INVESTMENT COMPANY EQUITY INDEX FUND: This Fund seeks to duplicate, as
closely as possible, the investment performance of the Standard & Poor's 500
Composite Index ("S&P 500") by investing in approximately 500 publicly traded
stocks that comprise the S&P 500 ("Standard & Poor's 500", "S&P" and "S&P 500"
are trademarks of Standard & Poor's Corporation).
THE INVESTMENT COMPANY BOND FUND: This Fund seeks a high level of current
income, together with preservation of capital, through investments in such
securities as U.S. Government, corporate and other notes and bonds.
THE INVESTMENT COMPANY SHORT-TERM BOND FUND: This Fund seeks a high level of
current income, together with preservation of capital, through investments in
such securities as U.S. Government, corporate and other notes and bonds with
an average maturity of one to three years.
THE INVESTMENT COMPANY MID-TERM BOND FUND: This Fund seeks a high level of
current income, together with preservation of capital, through investments in
such securities as U.S. Government, corporate and other notes and bonds with
an average maturity of three to seven years.
THE INVESTMENT COMPANY COMPOSITE FUND: This Fund seeks a high total rate of
return on investments, through both appreciation of capital and current
income, through investments in a diversified portfolio of common stocks, bonds
and money market instruments.
I
<PAGE>
THE INVESTMENT COMPANY AGGRESSIVE EQUITY FUND: The investment objective for
approximately half of the assets of the Fund (the "Aggressive Growth
Portfolio") is to achieve capital appreciation by investing in companies
believed to possess above-average growth potential. Growth can be in the areas
of earnings or gross sales which can be measured in either dollars or in unit
volume. The investment objective for the other half of the assets of the Fund
(the "Aggressive Value Portfolio") is to achieve capital appreciation by
investing in companies believed to possess valuable assets or whose securities
are undervalued in the marketplace in relation to factors such as a company's
assets, earnings or growth potential.
THE SCUDDER BOND PORTFOLIO: This Portfolio seeks a high level of income
consistent with a high quality portfolio of debt securities.
THE SCUDDER CAPITAL GROWTH PORTFOLIO: This Portfolio seeks to maximize long-
term capital growth through a broad and flexible investment program. The
Portfolio invests in marketable securities, principally common stocks, and
consistent with its objective, may invest in preferred stocks, debt securities
and foreign securities.
THE SCUDDER INTERNATIONAL PORTFOLIO: This Portfolio seeks long-term capital
growth through investing primarily in diversified holdings of marketable
foreign equity investments in companies, wherever organized, that do business
primarily outside the United States and which are listed on foreign exchanges.
THE TCI GROWTH FUND: This Fund seeks capital growth over time by investing
primarily in common stocks (including securities convertible into common
stocks) that are considered by management to have better-than-average
prospects for appreciation.
THE CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO: This Fund seeks capital
growth and a total return above the rate of inflation through an actively
managed portfolio of stocks, bonds and money market instruments selected with
a concern for the social impact of each investment.
THE FIDELITY EQUITY-INCOME PORTFOLIO: Seeks reasonable income by investing
primarily in income-producing equity securities while also considering the
potential for capital appreciation. Secondarily, the portfolio's goal is to
achieve a yield that exceeds the composite yield on the securities comprising
the S&P 500 Composite Index.
THE FIDELITY CONTRAFUND PORTFOLIO: Seeks long-term capital appreciation by
investing primarily in a broad variety of common stocks using both growth-
oriented and contrarian disciplines.
THE FIDELITY ASSET MANAGER PORTFOLIO: Seeks high long-term return with
reduced risk by allocating assets among a broadly diversified mix of stocks,
bonds and short-term fixed-income instruments.
For the year ended December 31, 1996, the following total returns were
experienced in these sixteen Separate Account Funds:
<TABLE>
<S> <C>
Investment Company Money Market Fund(1)............................ + 3.7%
Investment Company All America Fund................................ +18.9%
Investment Company Equity Index Fund............................... +20.8%
Investment Company Bond Fund....................................... + 1.9%
Investment Company Short-Term Bond Fund............................ + 3.3%
Investment Company Mid-Term Bond Fund.............................. + 2.2%
Investment Company Composite Fund.................................. +10.2%
Investment Company Aggressive Equity Fund.......................... +25.1%
Scudder Bond Fund.................................................. + 1.2%
Scudder Capital Growth Fund........................................ +18.3%
Scudder International Fund......................................... +13.0%
TCI Growth Fund.................................................... - 5.6%
Calvert Responsibly Invested Balanced Fund......................... +10.9%
Fidelity Equity-Income Fund........................................ +12.5%
Fidelity Contrafund................................................ +19.4%
Fidelity Asset Manager Fund........................................ +12.8%
</TABLE>
-------
(1) The current seven-day net annualized yield as of 2/18/97 was 3.72%
and is not necessarily indicative of future actual yields.
II
<PAGE>
Total return is equal to the changes in the value of a unit of participation
in a Fund from the beginning to the end of the specified period. It reflects
investment income earned and reinvested plus the changes in the market value
(whether realized or unrealized) of the securities in the respective Fund or
Portfolio of the Investment Company, Scudder, TCI, Calvert or Fidelity during
the indicated period. Results are net of all charges, including a monthly
service charge (assessed against an average account balance for all
individually allocated contracts) based upon a hypothetical $1,000 invested at
the beginning of the period. These returns are not guaranteed and are not
necessarily indicative of the future investment performance of the particular
Fund. Withdrawals and contributions made within a period would experience
different rates of return based on the respective unit values on the dates of
such transactions.
This report includes financial statements for each Fund of Separate Account
No. 2. Following this report are the financial statements for each similarly
named Fund of the Investment Company, Portfolios of Scudder, Fund of TCI,
Portfolio of Calvert and Portfolios of Fidelity Investments.
I hope you will find this report helpful and informative.
Sincerely,
/s/ Manfred Altstadt
Manfred Altstadt
Senior Executive Vice President
and Chief Financial Officer,
The American Life Insurance Company of
New York
III
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ANNUAL REPORT OF AMERICAN LIFE SEPARATE ACCOUNT NO. 2..................... I
Statement of Assets and Liabilities...................................... VI
Statement of Operations.................................................. VIII
Statements of Changes in Net Assets...................................... X
Notes to Financial Statements............................................ XIII
Report of Independent Public Accountants................................. XVII
ANNUAL REPORT OF MUTUAL OF AMERICA INVESTMENT CORPORATION................. 1
President's Message...................................................... 1
Portfolio Management Discussions......................................... 2
Portfolio of Investments in Securities:
Money Market Fund...................................................... 9
All America Fund....................................................... 10
Equity Index Fund...................................................... 18
Bond Fund.............................................................. 24
Short-Term Bond Fund................................................... 27
Mid-Term Bond Fund..................................................... 29
Composite Fund......................................................... 31
Aggressive Equity Fund................................................. 36
Statement of Assets and Liabilities...................................... 40
Statement of Operations.................................................. 41
Statements of Changes in Net Assets...................................... 42
Financial Highlights..................................................... 44
Notes to Financial Statements............................................ 50
Report of Independent Public Accountants................................. 55
ANNUAL REPORT OF SCUDDER VARIABLE LIFE INVESTMENT FUND.................... 57
Letter from the Fund's President......................................... 58
Portfolio Management Discussions......................................... 59
Portfolio of Investments, Statement of Assets and Liabilities; Statement
of Operations; Statements of Changes in Net Assets and Financial
Highlights:
Bond Portfolio......................................................... 65
Capital Growth Portfolio............................................... 72
International Portfolio................................................ 80
Notes to Financial Statements............................................ 90
Report of Independent Accountants........................................ 94
Tax Information.......................................................... 95
ANNUAL REPORT OF TCI GROWTH FUND OF TCI PORTFOLIOS, INC................... 97
Executive Message, Performance & Portfolio Information................... 98
Management Q&A........................................................... 100
Schedule of Investments.................................................. 102
Statement of Assets and Liabilities...................................... 104
Statement of Operations.................................................. 105
Statements of Changes in Net Assets...................................... 106
Notes to Financial Statements............................................ 107
Financial Highlights..................................................... 110
Independent Accountants' Report.......................................... 111
ANNUAL REPORT OF CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO OF ACACIA
CAPITAL CORPORATION...................................................... 113
President's Letter....................................................... 114
Report of Independent Accountants........................................ 116
Portfolio of Investments................................................. 117
Statement of Assets and Liabilities...................................... 122
</TABLE>
IV
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Statement of Operations... 123
Statements of Changes in
Net Assets............... 124
Notes to Financial
Statements............... 125
Financial Highlights...... 127
ANNUAL REPORT OF FIDELITY
INVESTMENTS VARIABLE
INSURANCE PRODUCTS FUND... 129
Market Environment........ 130
Equity-Income Portfolio... 131
Performance and
Investment Summary;
Portfolio Manager's
Overview............... 131
Investments............. 133
Financial Statements.... 137
Notes to Financial
Statements............. 139
Report of Independent
Accountants............ 141
Distributions........... 142
ANNUAL REPORT OF FIDELITY
INVESTMENTS VARIABLE
INSURANCE PRODUCTS FUND
II........................ 143
Market Environment........ 144
Asset Manager Portfolio... 145
Performance and
Investment Summary;
Portfolio Manager's
Overview............... 145
Investments............. 149
Financial Statements.... 160
Notes to Financial
Statements............. 162
Report of Independent
Accountants............ 165
Distributions........... 166
ANNUAL REPORT OF FIDELITY
INVESTMENTS VARIABLE
INSURANCE PRODUCTS FUND
II........................ 167
Market Environment........ 168
Contrafund Portfolio...... 169
Performance and
Investment Summary;
Portfolio Manager's
Overview............... 169
Investments............. 171
Financial Statements.... 180
Notes to Financial
Statements............. 182
Report of Independent
Accountants............ 184
Distributions........... 185
</TABLE>
V
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
INVESTMENT COMPANY
----------------------------------------------
MONEY MARKET ALL AMERICA EQUITY INDEX BOND
FUND FUND FUND FUND
------------ ----------- ------------ --------
<S> <C> <C> <C> <C>
Assets:
Investments in Mutual of America
Investment Corporation at
market value
(Cost:
Money Market Fund --
$116,400
All America Fund --
$2,974,112
Equity Index Fund --
$1,379,656
Bond Fund --$917,816)
(Notes 1 and 2)................ $112,456 $3,175,681 $1,401,820 $865,821
Due From (To) General Account... 11,410 177,255 71,612 36,451
-------- ---------- ---------- --------
Net Assets...................... $123,866 $3,352,936 $1,473,432 $902,272
======== ========== ========== ========
Unit Value at December 31, 1996
(Note 5)....................... $1.87 $5.39 $1.72 $2.75
===== ===== ===== =====
Number of Units Outstanding at
December 31, 1996 (Note 5)..... 66,104 621,536 858,298 328,371
======== ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT COMPANY
-----------------------------------------
SHORT- AGGRESSIVE
TERM MID-TERM COMPOSITE EQUITY
BOND FUND BOND FUND FUND FUND
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Assets:
Investments in Mutual of America
Investment Corporation at
market value
(Cost:
Short-Term Bond Fund --
$23,075
Mid-Term Bond Fund --
$341,946
Composite Fund --
$1,813,177
Aggressive Equity Fund --
$2,621,992)
(Notes 1 and 2).................... $22,467 $301,503 $1,682,871 $2,564,149
Due From (To) General Account....... (2,201) 8,455 28,700 (71,524)
------- -------- ---------- ----------
Net Assets.......................... $20,266 $309,958 $1,711,571 $2,492,625
======= ======== ========== ==========
Unit Value at December 31, 1996
(Note 5)........................... $1.14 $1.19 $3.75 $1.80
======= ======== ========== ==========
Number of Units Outstanding at De-
cember 31, 1996 (Note 5)........... 17,798 260,862 456,304 1,386,311
======= ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VI
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
SCUDDER TCI CALVERT
-------------------------------- -------- -----------
CAPITAL RESPONSIBLY
BOND GROWTH INTERNATIONAL GROWTH INVESTED
FUND FUND FUND FUND FUND
------- ---------- ------------- -------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in Scudder
Portfolios, TCI Growth
Fund and Calvert
Responsibly Invested
Portfolio at market
value
(Cost:
Scudder Bond Fund --
$28,974
Scudder Capital Growth
Fund --
$1,330,271
Scudder International
Fund -- $633,675
TCI Growth Fund --
$835,669
Calvert Responsibly
Invested Fund --
$218,402)
(Notes 1 and 2)........ $29,249 $1,495,496 $667,758 $786,533 $224,508
Due From (To) General
Account................ 15,253 132,610 274,141 (6,152) 60
------- ---------- -------- -------- --------
Net Assets.............. $44,502 $1,628,106 $941,899 $780,381 $224,568
======= ========== ======== ======== ========
Unit Value at December
31, 1996 (Note 5)...... $11.48 $22.11 $13.43 $11.53 $2.23
====== ====== ====== ====== =====
Number of Units
Outstanding at December
31, 1996 (Note 5)...... 3,877 73,641 70,139 67,688 100,573
======= ========== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
-------------------------------------
VIP
EQUITY- VIP II VIP II
INCOME CONTRA ASSET MANAGER
FUND FUND FUND
---------- ---------- -------------
<S> <C> <C> <C>
Assets:
Investments in Fidelity Portfolios at
market value
(Cost:
VIP Equity-Income Fund --$1,309,049
VIP II Contra Fund --$2,284,121
VIP II Asset Manager Fund -- $602,854)
(Notes 1 and 2)......................... $1,420,417 $2,574,971 $650,767
Due From (To) General Account............ (83,137) (31,137) 2,717
---------- ---------- --------
Net Assets............................... $1,337,280 $2,543,834 $653,484
========== ========== ========
Unit Value at December 31, 1996 (Note 5). $21.93 $16.59 $17.72
====== ====== ======
Number of Units Outstanding at December
31, 1996 (Note 5)....................... 60,979 153,360 36,872
========== ========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VII
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
INVESTMENT COMPANY
----------------------------------------------
MONEY MARKET ALL AMERICA EQUITY INDEX BOND
FUND FUND FUND FUND
------------ ----------- ------------ --------
<S> <C> <C> <C> <C>
Investment Income and Expenses:
Income (Notes 1 and 4):
Dividends..................... $3,402 $157,730 $ 47,499 $ 56,941
------ -------- -------- --------
Total Income................... 3,402 157,730 47,499 56,941
------ -------- -------- --------
Expenses (Note 3):
Fees.......................... 1,290 30,896 11,523 5,286
Administrative Expenses....... 404 3,664 877 1,001
------ -------- -------- --------
Total Expenses................. 1,694 34,560 12,400 6,287
------ -------- -------- --------
Net Investment Income (Loss)... 1,708 123,170 35,099 50,654
------ -------- -------- --------
Net Realized and Unrealized
Gain (Loss) on Investments
(Note 1):
Net realized gain (loss) on
investments.................. (639) 131,267 82,968 561
Net unrealized appreciation
(depreciation) of invest-
ments........................ 812 158,864 10,360 (52,401)
------ -------- -------- --------
Net Realized and Unrealized
Gain (Loss) on Investments.... 173 290,131 93,328 (51,840)
------ -------- -------- --------
Net Increase (Decrease) in Net
Assets Resulting from
Operations.................... $1,881 $413,301 $128,427 $ (1,186)
====== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT COMPANY
--------------------------------------------
SHORT-TERM MID-TERM COMPOSITE AGGRESSIVE
BOND FUND BOND FUND FUND EQUITY FUND
---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Investment Income and Expenses:
Income (Notes 1 and 4):
Dividends.......................... $ 692 $ 41,294 $209,690 $368,168
----- -------- -------- --------
Total income........................ 692 41,294 209,690 368,168
----- -------- -------- --------
Expenses (Note 3):
Fees............................... 104 943 17,131 25,941
Administrative Expenses............ 44 189 2,911 1,692
----- -------- -------- --------
Total Expenses...................... 148 1,132 20,042 27,633
----- -------- -------- --------
Net Investment Income (Loss)........ 544 40,162 189,648 340,535
----- -------- -------- --------
Net Realized and Unrealized Gain
(Loss) on Investments
(Note 1):
Net realized gain (loss) on invest-
ments............................. 13 (136) (10,035) 113,218
Net unrealized appreciation (depre-
ciation) of investments........... (480) (39,780) (69,001) (71,005)
----- -------- -------- --------
Net Realized and Unrealized Gain
(Loss) on Investments.............. (467) (39,916) (79,036) 42,213
----- -------- -------- --------
Net Increase (Decrease) in Net
Assets Resulting from Operations... $ 77 $ 246 $110,612 $382,748
===== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VIII
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
SCUDDER TCI CALVERT
------------------------------- --------- -----------
CAPITAL RESPONSIBLY
BOND GROWTH INTERNATIONAL GROWTH INVESTED
FUND FUND FUND FUND FUND
------- -------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C>
Investment Income and
Expenses:
Income (Notes 1 and 4):
Dividends.............. $ 2,802 $ 82,251 $10,989 $ 81,014 $ 16,792
------- -------- ------- --------- --------
Total income............ 2,802 82,251 10,989 81,014 16,792
------- -------- ------- --------- --------
Expenses (Note 3):
Fees................... 460 15,373 7,738 8,479 2,058
Administrative
Expenses.............. 501 957 255 349 539
------- -------- ------- --------- --------
Total Expenses.......... 961 16,330 7,993 8,828 2,597
------- -------- ------- --------- --------
Net Investment Income
(Loss)................. 1,841 65,921 2,996 72,186 14,195
------- -------- ------- --------- --------
Net Realized and
Unrealized Gain (Loss)
on Investments (Note
1):
Net realized gain
(loss) on investments. (844) 41,159 43,909 (24,573) 19,117
Net unrealized
appreciation
(depreciation) of
investments........... (511) 86,006 24,939 (76,750) (14,038)
------- -------- ------- --------- --------
Net Realized and
Unrealized Gain (Loss)
on Investments......... (1,355) 127,165 68,848 (101,323) 5,079
------- -------- ------- --------- --------
Net Increase (Decrease)
in Net Assets Resulting
from Operations........ $ 486 $193,086 $71,844 $ (29,137) $ 19,274
======= ======== ======= ========= ========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
-------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
------------- -------- -------------
<S> <C> <C> <C>
Investment Income and Expenses:
Income (Notes 1 and 4):
Dividends............................... $ 28,135 $ 4,478 $10,761
-------- -------- -------
Total income............................. 28,135 4,478 10,761
-------- -------- -------
Expenses (Note 3):
Fees.................................... 12,471 18,275 4,691
Administrative Expenses................. 2,110 1,523 476
-------- -------- -------
Total Expenses........................... 14,581 19,798 5,167
-------- -------- -------
Net Investment Income (Loss)............. 13,554 (15,320) 5,594
-------- -------- -------
Net Realized and Unrealized Gain (Loss)
on Investments (Note 1):
Net realized gain (loss) on investments. 20,214 21,162 1,185
Net unrealized appreciation
(depreciation) of investments.......... 92,537 287,039 44,376
-------- -------- -------
Net Realized and Unrealized Gain (Loss)
on Investments.......................... 112,751 308,201 45,561
-------- -------- -------
Net Increase (Decrease) in Net Assets
Resulting from Operations............... $126,305 $292,881 $51,155
======== ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
IX
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
INVESTMENT COMPANY
------------------------------------------------------------------
MONEY MARKET FUND ALL AMERICA FUND EQUITY INDEX FUND
-------------------- ---------------------- --------------------
1996 1995 1996 1995 1996 1995
--------- --------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ 1,708 $ 5,786 $ 123,170 $ 22,480 $ 35,099 $ 12,811
Net realized gain
(loss) on investments. (639) 5,257 131,267 16,227 82,968 9,181
Net unrealized
appreciation
(depreciation) of
investments........... 812 (6,483) 158,864 54,492 10,360 11,910
--------- --------- ---------- ---------- ---------- --------
Net Increase (Decrease)
in net assets
resulting from
operations............ 1,881 4,560 413,301 93,199 128,427 33,902
--------- --------- ---------- ---------- ---------- --------
From Unit Transactions:
Contributions.......... 181,254 72,140 1,923,323 578,019 1,006,616 310,155
Withdrawals............ (105,802) (505,659) (467,717) (37,699) (601,063) (93,385)
Net Transfers.......... (66,628) 491,024 399,364 145,139 466,940 184,339
--------- --------- ---------- ---------- ---------- --------
Net Increase (Decrease)
from unit transactions. 8,824 57,505 1,854,970 685,459 872,493 401,109
--------- --------- ---------- ---------- ---------- --------
Net Increase (Decrease)
in Net Assets.......... 10,705 62,065 2,268,271 778,658 1,000,920 435,011
Net Assets:
Beginning of Year....... 113,161 51,096 1,084,665 306,007 472,512 37,501
--------- --------- ---------- ---------- ---------- --------
End of Year............. $ 123,866 $ 113,161 $3,352,936 $1,084,665 $1,473,432 $472,512
========= ========= ========== ========== ========== ========
<CAPTION>
INVESTMENT COMPANY
------------------------------------------------------------------
SHORT-TERM MID-TERM
BOND FUND BOND FUND BOND FUND
-------------------- ---------------------- --------------------
1996 1995 1996 1995 1996 1995
--------- --------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ 50,654 $ 6,862 $ 544 $ 185 $ 40,162 $ 796
Net realized gain
(loss) on investments. 561 11,107 13 (3) (136) 119
Net unrealized
appreciation
(depreciation) of
investments........... (52,401) 2,743 (480) (35) (39,780) (324)
--------- --------- ---------- ---------- ---------- --------
Net Increase (Decrease)
in net assets
resulting from
operations............. (1,186) 20,712 77 147 246 591
--------- --------- ---------- ---------- ---------- --------
From Unit Transactions:
Contributions.......... 666,539 143,458 15,543 2,815 27,912 55,948
Withdrawals............ (115,522) (15,913) (1,474) (9,130) (20,124) (3,240)
Net Transfers.......... 176,333 (25,561) 294 8,237 280,396 (35,498)
--------- --------- ---------- ---------- ---------- --------
Net Increase (Decrease)
from unit transactions. 727,350 101,984 14,363 1,922 288,184 17,210
--------- --------- ---------- ---------- ---------- --------
Net Increase (Decrease)
in Net Assets.......... 726,164 122,696 14,440 2,069 288,430 17,801
Net Assets:
Beginning of Year....... 176,108 53,412 5,826 3,757 21,528 3,727
--------- --------- ---------- ---------- ---------- --------
End of Year............. $ 902,272 $ 176,108 $ 20,266 $ 5,826 $ 309,958 $ 21,528
========= ========= ========== ========== ========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
X
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
INVESTMENT COMPANY
------------------------------------------------
COMPOSITE FUND AGGRESSIVE EQUITY FUND
--------------------- -------------------------
1996 1995 1996 1995
---------- --------- ------------ -----------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net
Assets:
From Operations:
Net investment income (loss). $ 189,648 $ 33,440 $ 340,535 $ 43,737
Net realized gain (loss) on
investments................. (10,035) (31,140) 113,218 3,934
Net unrealized appreciation
(depreciation) of
investments................. (69,001) (723) (71,005) 7,323
---------- --------- ------------ ----------
Net Increase (Decrease) in net
assets resulting from
operations................... 110,612 1,577 382,748 54,994
---------- --------- ------------ ----------
From Unit Transactions:
Contributions................ 957,159 610,095 1,334,514 419,730
Withdrawals.................. (394,678) (112,594) 13,683 (1,082)
Net Transfers................ 81,515 86,689 (97,433) 273,398
---------- --------- ------------ ----------
Net Increase (Decrease) from
unit transactions............ 643,996 584,190 1,250,764 692,046
---------- --------- ------------ ----------
Net Increase (Decrease) in Net
Assets....................... 754,608 585,767 1,633,512 747,040
Net Assets:
Beginning of Year............. 956,963 371,196 859,113 112,073
---------- --------- ------------ ----------
End of Year................... $1,711,571 $ 956,963 $ 2,492,625 $ 859,113
========== ========= ============ ==========
</TABLE>
<TABLE>
<CAPTION>
SCUDDER
-------------------------------------------------------------
BOND FUND CAPITAL GROWTH FUND INTERNATIONAL FUND
----------------- -------------------- --------------------
1996 1995 1996 1995 1996 1995
-------- ------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ 1,841 $ 165 $ 65,921 $ 6,891 $ 2,996 $ (3,969)
Net realized gain
(loss) on investments. (844) 69 41,159 4,923 43,909 (18,564)
Net unrealized
appreciation
(depreciation)
of investments........ (511) 802 86,006 91,548 24,939 39,352
-------- ------- ---------- -------- --------- ---------
Net Increase (Decrease)
in net assets resulting
from operations........ 486 1,036 193,086 103,362 71,844 16,819
-------- ------- ---------- -------- --------- ---------
From Unit Transactions:
Contributions.......... 36,598 17,463 774,932 308,453 325,676 175,113
Withdrawals............ (28,324) (4,790) (338,868) (60,514) (187,224) (80,646)
Net Transfers.......... 8,527 5,766 209,415 113,864 381,535 (325,776)
-------- ------- ---------- -------- --------- ---------
Net Increase (Decrease)
from unit transactions. 16,801 18,439 645,479 361,803 519,987 (231,309)
-------- ------- ---------- -------- --------- ---------
Net Increase (Decrease)
in Net Assets.......... 17,287 19,475 838,565 465,165 591,831 (214,490)
Net Assets:
Beginning of Year....... 27,215 7,740 789,541 324,376 350,068 564,558
-------- ------- ---------- -------- --------- ---------
End of Year............. $ 44,502 $27,215 $1,628,106 $789,541 $ 941,899 $ 350,068
======== ======= ========== ======== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
XI
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT #2
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS* ENDED DECEMBER 31,
<TABLE>
<CAPTION>
TCI CALVERT
------------------- ------------------
RESPONSIBLY
GROWTH FUND INVESTED FUND
------------------- ------------------
1996 1995 1996 1995
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss)......... $ 72,186 $ (2,544) $ 14,195 $ 9,349
Net realized gain (loss) on
investments......................... (24,573) 9,421 19,117 5,584
Net Unrealized appreciation
(depreciation) of investments....... (76,750) 28,009 (14,038) 21,565
--------- -------- -------- --------
Net Increase (Decrease) in net assets
resulting from operations............ (29,137) 34,886 19,274 36,498
--------- -------- -------- --------
From Unit Transactions:
Contributions........................ 563,738 233,181 146,610 65,719
Withdrawals.......................... (154,878) (24,222) (34,382) (4,194)
Net Transfers........................ (288,819) 322,513 1,935 (35,579)
--------- -------- -------- --------
Net Increase (Decrease) from unit
transactions......................... 120,041 531,472 114,163 25,946
--------- -------- -------- --------
Net Increase (Decrease) in Net Assets. 90,904 566,358 133,437 62,444
Net Assets:
Beginning of Year..................... 689,477 123,119 91,131 28,687
--------- -------- -------- --------
End of Year........................... $ 780,381 $689,477 $224,568 $ 91,131
========= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
-------------------------------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
-------------------- -------------------- -----------------
1996 1995(A) 1996 1995(A) 1996 1995(A)
---------- -------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ 13,554 $ 1,017 $ (15,320) $ 3,438 $ 5,594 $ (333)
Net realized gain
(loss) on investments. 20,214 242 21,162 139 1,185 609
Net Unrealized
appreciation
(depreciation) of
investments........... 92,537 18,831 287,039 3,809 44,376 3,537
---------- -------- ---------- -------- -------- -------
Net Increase (Decrease)
in net assets resulting
from operations........ 126,305 20,090 292,881 7,386 51,155 3,813
---------- -------- ---------- -------- -------- -------
From Unit Transactions:
Contributions.......... 1,093,823 170,864 1,028,719 200,087 438,727 74,330
Withdrawals............ (79,489) (500) (263,384) (2,927) (29,116) (7,677)
Net Transfers.......... (152,309) 158,496 1,082,254 198,818 105,633 16,619
---------- -------- ---------- -------- -------- -------
Net Increase (Decrease)
from unit transactions. 862,025 328,860 1,847,589 395,978 515,244 83,272
---------- -------- ---------- -------- -------- -------
Net Increase (Decrease)
in Net Assets.......... 988,330 348,950 2,140,470 403,364 566,399 87,085
Net Assets:
Beginning of
Year/Period............ 348,950 -- 403,364 -- 87,085 --
---------- -------- ---------- -------- -------- -------
End of Year/Period...... $1,337,280 $348,950 $2,543,834 $403,364 $653,484 $87,085
========== ======== ========== ======== ======== =======
</TABLE>
- -------
* Except for the periods noted.
(a) For the period May 1, 1995 (Commencement of Operations) to December 31,
1995.
The accompanying notes are an integral part of these financial statements.
XII
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Separate Account No. 2 of The American Life Insurance Company of New York
("Company") was established in conformity with New York Insurance Law and
commenced operations on November 19, 1993 as a unit investment trust. On that
date, the following American Life funds became available as investment
options: Money Market Fund, All America Fund, Bond Fund, Composite Fund,
Equity Index Fund, Short-Term Bond Fund, Mid-Term Bond Fund, Scudder Bond
Fund, Scudder Capital Growth Fund, Scudder International Fund, TCI Growth
Fund, and the Calvert Responsibly Invested Balanced Fund. The American Life
funds invest in a corresponding Fund of Mutual of America Investment
Corporation ("Investment Company"), Portfolio of Scudder Variable Life
Investment Fund ("Scudder"), Fund of TCI Portfolios Inc. ("TCI") and a
corresponding Fund of Calvert Responsibly Invested Balanced Portfolio
(formerly "Calvert Socially Responsible Series") of Acacia Capital Corporation
("Calvert").
On May 2, 1994 the Investment Company Aggressive Equity Fund became
available as an investment option to Separate Account No. 2. Also, prior to
May 2, 1994 the All America Fund was known as the Stock Fund and had a
different objective and no sub-advisors.
On May 1, 1995, Fidelity Investments Equity-Income, Contrafund and Asset
Manager Funds became available to Separate Account No. 2 as an investment
option. The Fidelity Equity-Income Fund invests in the corresponding Portfolio
of Fidelity Variable Insurance Products Fund and the Contrafund and Asset
Manager Funds invest in the corresponding Portfolios of Fidelity Variable
Insurance Products Fund II (collectively, "Fidelity").
Separate Account No. 2 was formed by the Company to support the operations
of the Company's group and individual variable accumulation annuity contracts
("Contracts"). The assets of Separate Account No. 2 are the property of the
Company. The portion of Separate Account No. 2's assets applicable to the
Contracts will not be charged with liabilities arising out of any other
business the Company may conduct.
The significant accounting policies of Separate Account No. 2 are as
follows:
Investment Valuation -- Investments are made in shares of the Investment
Company, Scudder, TCI, Calvert and Fidelity and are valued at the reported net
asset values of the respective Funds and Portfolios.
Investment Transactions -- Investment transactions are recorded on the trade
date. Realized gains and losses on sales of investments are determined based
on the average cost of the investment sold.
Federal Income Taxes -- Separate Account No. 2 will be treated as a part of
the Company and will not be taxed separately as a "regulated investment
company" under existing law. The Company is taxed as a life insurance company
under the life insurance tax provisions of the Internal Revenue Code of 1986.
No provision for income taxes is required in the accompanying financial
statements.
2. INVESTMENTS
The number of shares owned by Separate Account No. 2 and their respective
net asset values (rounded to the nearest cent) per share at December 31, 1996
are as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES NET ASSET VALUE
---------------- ---------------
<S> <C> <C>
Investment Company Funds:
Money Market Fund...................... 94,499 $1.19
All America Fund....................... 1,303,385 2.44
Equity Index Fund...................... 878,916 1.59
Bond Fund.............................. 626,851 1.38
Short-Term Bond Fund................... 21,868 1.03
Mid-Term Bond Fund..................... 336,219 0.90
Composite Fund......................... 950,858 1.77
Aggressive Equity Fund................. 1,741,720 1.47
</TABLE>
XIII
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF SHARES NET ASSET VALUE
---------------- ---------------
<S> <C> <C>
Scudder Portfolios:
Bond Portfolio........................... 4,346 $6.73
Capital Growth Portfolio................. 90,636 16.50
International Portfolio.................. 50,397 13.25
TCI Growth Fund........................... 76,810 10.24
Calvert Responsibly Invested Portfolio.... 126,557 1.77
Fidelity Portfolios:
Equity-Income............................ 67,542 21.03
Contrafund............................... 155,493 16.56
Asset Manager............................ 38,439 16.93
</TABLE>
3. EXPENSES
Administrative Charges -- In connection with its administrative functions,
the Company deducts daily, at an annual rate of .40% an amount from the value
of the net assets of all Funds except the TCI Growth Fund for which the annual
rate is .20%.
In addition, a deduction of up to $2.00 may be made at the end of each month
from a participant's account, except that such charge shall not exceed 1/12 of
1% of the balance in such account in any month.
Distribution Expense Charge -- The Insurance Company will make a deduction
daily from the value of the net assets of each Fund, at an annual rate of
.35%, to cover anticipated distribution expenses.
Mortality and Expense Risk Charge -- The Company assumes the risk to make
annuity payments in accordance with annuity tables provided in the Contracts
regardless of how long a participant lives and also assumes certain expense
risks associated with such annuity payments. For assuming the risk, the
Company deducts daily, at an annual rate of .50%, an amount from the value of
the net assets of each Fund.
4. DIVIDENDS
All dividend distributions are reinvested in additional shares of the
respective Funds or Portfolios at net asset value. On December 30, 1996 a
dividend distribution was declared by the Investment Company to shareholders
of record December 30, 1996. This dividend was paid on December 31, 1996. In
addition, the Investment Company declared and paid a dividend distribution on
September 15, 1996. The combined amount of these dividends was as follows:
<TABLE>
<S> <C>
Money Market Fund.................................................. 3,402
All America Fund................................................... 157,730
Equity Index Fund.................................................. 47,499
Bond Fund.......................................................... 56,941
Short-Term Bond Fund............................................... 692
Mid-Term Bond Fund................................................. 41,294
Composite Fund..................................................... 209,690
Aggressive Equity Fund............................................. 368,168
</TABLE>
On January 29, 1996, April 26, 1996, July 29, 1996, and October 29, 1996,
dividends were paid by the Scudder Bond Portfolio. The combined amount of the
dividends was $2,802.
On January 29, 1996, February 27, 1996, April 26, 1996, July 29, 1996, and
October 29, 1996 dividends were paid by the Scudder Capital Growth Portfolio.
The combined amount of the dividends was $82,251.
On February 27, 1996 and April 26, 1996, dividends were paid by the Scudder
International Portfolio. The combined amount of the dividends was $10,989.
XIV
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
On March 30, 1996, a dividend was paid by the TCI Growth Fund. The amount of
the dividend was $81,014.
On December 31, 1996, a dividend was paid by the Calvert Responsibly
Invested Portfolio. The amount of the dividend was $16,792.
On February 2, 1996, a dividend was paid by the Fidelity Equity-Income
Portfolio. The amount of the dividend was $28,135.
On February 2, 1996, a dividend was paid by the Fidelity Contrafund
Portfolio. The amount of the dividend was $4,478.
On February 2, 1996, a dividend was paid by the Fidelity Asset Manager
Portfolio. The amount of the dividend was $10,761.
5. FINANCIAL HIGHLIGHTS
Shown below are financial highlights for a Unit outstanding throughout the
year ended December 31, 1996 and each of the previous years or, if not in
existence a full year, the initial period ended December 31:
<TABLE>
<CAPTION>
INVESTMENT COMPANY
----------------------------------------------------
MONEY MARKET
FUND ALL AMERICA FUND
---------------------- -----------------------------
1996 1995 1994 1996 1995 1994 1993
------- ------- ------ ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period.............. $1.80 $1.72 $1.68 $4.52 $3.35 $3.36 $3.31
======= ======= ====== ======= ======= ====== ======
Unit value, end of
year/period.............. $1.87 $1.80 $1.72 $5.39 $4.52 $3.35 $3.36
======= ======= ====== ======= ======= ====== ======
Units outstanding, end of
year/period.............. 66,104 62,822 29,648 621,536 239,745 91,238 27
======= ======= ====== ======= ======= ====== ======
<CAPTION>
INVESTMENT COMPANY
----------------------------------------------------
EQUITY INDEX FUND BOND FUND
------------------------------ ---------------------
1996 1995 1994 1993 1996 1995 1994
------- ------- ------ ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period.............. $1.42 $1.05 $1.05 $1.04 $2.69 $2.28 $2.39
======= ======= ====== ======= ======= ====== ======
Unit value, end of
year/period.............. $1.72 $1.42 $1.05 $1.05 $2.75 $2.69 $2.28
======= ======= ====== ======= ======= ====== ======
Units outstanding, end of
year/period.............. 858,298 333,578 35,717 185 328,371 65,503 23,434
======= ======= ====== ======= ======= ====== ======
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT COMPANY
---------------------------------------------------------------------
SHORT-TERM MID-TERM
BOND FUND BOND FUND COMPOSITE FUND
------------------ -------------------- -----------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994 1993
------ ----- ----- ------- ------ ----- ------- ------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period............ $1.10 $1.03 $1.03 $1.16 $1.01 $1.06 $3.39 $2.82 $2.95 $2.93
====== ===== ===== ======= ====== ===== ======= ======= ======= =====
Unit value, end of
year/period............ $1.14 $1.10 $1.03 $1.19 $1.16 $1.01 $3.75 $3.39 $2.82 $2.95
====== ===== ===== ======= ====== ===== ======= ======= ======= =====
Units outstanding, end
of year/period......... 17,798 5,302 3,639 260,862 18,581 3,694 456,304 281,905 131,650 322
====== ===== ===== ======= ====== ===== ======= ======= ======= =====
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT COMPANY
-------------------------
AGGRESSIVE
EQUITY FUND
-------------------------
1996 1995 1994
--------- ------- -------
<S> <C> <C> <C>
Unit value, beginning of year/period.................. $1.43 $1.05 $1.00
========= ======= =======
Unit value, end of year/period........................ $1.80 $1.43 $1.05
========= ======= =======
Units outstanding, end of year/period................. 1,386,311 599,553 106,710
========= ======= =======
</TABLE>
XV
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
SCUDDER
-------------------------------------------------------
BOND FUND CAPITAL GROWTH FUND
--------------------------- ---------------------------
1996 1995 1994 1993 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period............ $11.30 $ 9.69 $10.32 $10.24 $18.64 $14.67 $16.46 $16.10
====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of
year/period............ $11.48 $11.30 $ 9.69 $10.32 $22.11 $18.64 $14.67 $16.46
====== ====== ====== ====== ====== ====== ====== ======
Units outstanding, end
of year/period......... 3,877 2,407 799 -- 73,641 42,366 22,116 59
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
SCUDDER
---------------------------
INTERNATIONAL FUND
---------------------------
1996 1995 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Unit value, beginning of year/period................ $11.85 $10.80 $11.06 $10.36
====== ====== ====== ======
Unit value, end of year/period...................... $13.43 $11.85 $10.80 $11.06
====== ====== ====== ======
Units outstanding, end of year/period............... 70,139 29,549 52,296 38
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
TCI CALVERT
-------------------------- ---------------------------
GROWTH FUND RESPONSIBLY INVESTED FUND
-------------------------- ---------------------------
1996 1995 1994 1993 1996 1995 1994
------ ------ ------ ----- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period............ $12.18 $ 9.39 $9.61 $9.38 $2.01 $1.57 $1.64
====== ====== ====== ===== ========= ======== ========
Unit value, end of
year/period............ $11.53 $12.18 $9.39 $9.61 $2.23 $2.01 $1.57
====== ====== ====== ===== ========= ======== ========
Units outstanding, end
of year/period......... 67,688 56,618 13,116 20 100,573 45,392 18,308
====== ====== ====== ===== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
------------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
------------- -------------- -------------
1996 1995 1996 1995 1996 1995
------ ------ ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period........................ $19.43 $16.30 $13.85 $11.43 $15.66 $14.04
====== ====== ======= ====== ====== ======
Unit value, end of year/period...... $21.93 $19.43 $16.59 $13.85 $17.72 $15.66
====== ====== ======= ====== ====== ======
Units outstanding, end of
year/period........................ 60,979 17,958 153,360 29,132 36,872 5,561
====== ====== ======= ====== ====== ======
</TABLE>
XVI
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The American Life Insurance Company of New York:
We have audited the accompanying statement of assets and liabilities of
American Life Separate Account No. 2 as of December 31, 1996, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the four years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Separate Account's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
American Life Separate Account No. 2 as of December 31, 1996, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the four years in the period then ended, in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
New York, New York
February 21, 1997
XVII
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
320 Park Avenue New York, New York 10022-6839 212-224-1700
A subsidiary of Mutual of America Life Insurance Company
Mutual of America Life Insurance Company is a Registered Broker-Dealer and
Distributes the variable products of The American Life Insurance Company of New
York
