AMERICAN LIFE
SEPARATE ACCOUNT NO. 2
ANNUAL REPORT
DECEMBER 31, 1999
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, 1999
Dear Policyowner:
We are pleased to send you the 1999 Annual Report of American Life's
Separate Account No. 2. This Account, which commenced operations in late 1993,
is an investment vehicle for owners of our Individual Retirement Annuity and
Flexible Premium Annuity contracts. Separate Account No. 2 consists of seventeen
distinct funds. Each invests in shares of one of nine funds of Mutual of America
Investment Corporation (the "Investment Company"): the Money Market, All
America, Equity Index, Mid-Cap Equity Index (commenced operations on May 3,
1999), Bond, Short-Term Bond, Mid-Term Bond, Composite and Aggressive Equity
Fund; three portfolios of Scudder Variable Life Investment Fund ("Scudder"): the
Bond, Capital Growth and International Portfolio; the VP Capital Appreciation
Fund of American Century Variable Portfolios, Inc. ("American Century"); the
Calvert Social Balanced Portfolio of Calvert Variable Series, Inc. ("Calvert");
the Equity-Income Portfolio of Fidelity Investments Variable Insurance Products
Fund ("Fidelity VIP"); and the Contrafund Portfolio and Asset Manager Portfolio
of Fidelity Investments Variable Insurance Products Fund II ("Fidelity VIP II").
Each of the funds of Separate Account No. 2 owns shares in a similarly
named fund of the Investment Company, portfolio of Scudder, fund of American
Century, portfolio of Calvert, portfolio of Fidelity VIP and portfolio of
Fidelity VIP II. 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, American Century, Calvert, Fidelity VIP and
Fidelity VIP II.
The investment objectives and primary investments of the funds and
portfolios in which the Separate Account Funds invested in 1999 are summarized
as follows:
Investment Company Money Market Fund: This Fund seeks to realize 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.
Investment Company All America Fund: This Fund seeks to outperform the
Standard & Poor's Composite Index of 500 Stocks (the "S&P 500 Index") by
investing in a diversified portfolio of primarily common stocks. The Fund
invests approximately 60% of its assets (the "Indexed Assets") to provide
investment results that correspond to the performance of the S&P 500 Index. The
remaining approximately 40% of its assets (the "Active Assets") seek 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 primarily
common stocks with a broad exposure to the market. ("Standard & Poor's",
"S&P"and "S&P 500" are trademarks of The McGraw-Hill Companies, Inc.)
Investment Company Equity Index Fund: This Fund seeks to provide
investment results that correspond to the performance of the S&P 500 Index by
investing primarily in the common stocks that comprise the S&P 500 Index.
Investment Company Mid-Cap Equity Index Fund: This Fund seeks to provide
investment results that correspond to the performance of the S&P MidCap 400
Index by investing primarily in the common stocks that comprise the S&P MidCap
400 Index. ("S&P MidCap 400" is a trademark of The McGraw-Hill Companies, Inc.)
Investment Company Bond Fund: This Fund seeks to provide as high a level
of current income over time as is believed consistent with prudent investment
risk, with preservation of capital a secondary objective, by investing primarily
in publicly-traded, investment grade debt securities.
Investment Company Short-Term Bond Fund: This Fund seeks to provide as
high a level of current income over time as is believed consistent with prudent
investment risk, with preservation of capital a secondary objective, by
investing primarily in publicly-traded, investment grade debt securities and
money market instruments. The average maturity of the Fund is between one and
three years.
1
<PAGE>
Investment Company Mid-Term Bond Fund: This Fund seeks to provide as high
a level of current income over time as is believed consistent with prudent
investment risk, with preservation of capital a secondary objective, by
investing primarily in publicly-traded, investment grade debt securities. The
average maturity of the Fund is between three and seven years.
Investment Company Composite Fund: This Fund seeks to achieve as high a
total rate of return, through both appreciation of capital and current income,
as is consistent with prudent investment risk, by investing in a diversified
portfolio of publicly-traded common stocks, bonds and money market instruments.
Investment Company Aggressive Equity Fund: This Fund's investment
objective is capital appreciation, by investing approximately half of its assets
in companies believed to possess above-average growth potential and the other
half of its assets in companies believed to possess valuable assets or whose
securities are believed to be undervalued in the marketplace.
At a special meeting of shareholders of the Investment Company scheduled
for February 28, 2000, Aggressive Equity Fund shareholders who owned shares as
of December 21, 1999 will vote on a proposal to amend the investment objective
of the Fund to read "The investment objective of the Aggressive Equity Fund is
capital appreciation." If approved, the Fund will continue to invest in growth
and value stocks, but the Adviser will determine the percentage of Fund assets
to be invested in each type of stock, rather than investing Fund assets
approximately equally in each type.
Scudder Bond Portfolio: This Portfolio seeks a high level of income
consistent with a high quality portfolio of primarily investment grade debt
securities.
Scudder Capital Growth Portfolio: This Portfolio seeks to maximize
long-term capital growth through a broad and flexible investment program, by
investing in marketable securities, principally common stocks and, consistent
with its objective of long-term capital growth, preferred stocks.
Scudder International Portfolio: This Portfolio seeks long-term growth of
capital primarily through a diversified portfolio of foreign equity securities,
by investing primarily in established companies that do business principally
outside of the United States and that are listed on foreign exchanges.
American Century VP Capital Appreciation Fund: This Fund seeks capital
growth by investing primarily in common stocks that meet certain fundamental and
technical standards and are considered by the Fund's management to have
better-than-average prospects for appreciation.
Calvert Social Balanced Portfolio: This Portfolio seeks a competitive
total return through an actively managed, non-diversified portfolio of stocks,
bonds and money market instruments that offer income and growth opportunity and
satisfy the Portfolio's investment and social criteria.
Fidelity VIP Equity-Income Portfolio: This Portfolio seeks reasonable
income by investing primarily in income producing equity securities, while
considering the potential for capital appreciation, and it also seeks to achieve
a yield that exceeds the composite yield on the securities comprising the S&P
500 Index.
Fidelity VIP II Contrafund Portfolio: This Portfolio seeks capital
appreciation over the long-term by investing primarily in securities of
companies whose value, the Portfolio's adviser believes, is not fully recognized
by the public. These securities may be issued by domestic or foreign companies
and many may not be well known. The Portfolio normally invests in common stocks.
Fidelity VIP II Asset Manager Portfolio: This Portfolio seeks high total
return with reduced risk over the long-term by allocating its assets among
domestic and foreign stocks, bonds and short-term/money market instruments, with
an expected "neutral mix" over the long-term of 10% in short-term/money market
instruments, 40% in bonds and 50% in stocks.
2
<PAGE>
For the year ended December 31, 1999, the following total returns were
experienced in these seventeen Separate Account Funds:
Investment Company Money Market Fund(1) ........................ + 3.5%
Investment Company All America Fund ............................ + 23.9%
Investment Company Equity Index Fund ........................... + 18.8%
Investment Company Mid-Cap Equity Index Fund(2) ................ + 10.6%
Investment Company Bond Fund ................................... - 3.3%
Investment Company Short-Term Bond Fund ........................ + 2.7%
Investment Company Mid-Term Bond Fund .......................... - 0.1%
Investment Company Composite Fund .............................. + 13.5%
Investment Company Aggressive Equity Fund ...................... + 41.2%
Scudder Bond Fund .............................................. - 2.4%
Scudder Capital Growth Fund .................................... + 33.2%
Scudder International Fund ..................................... + 52.2%
American Century VP Capital Appreciation Fund .................. + 62.4%
Calvert Social Balanced Fund ................................... + 10.6%
Fidelity VIP Equity-Income Fund ................................ + 4.9%
Fidelity VIP II Contrafund ..................................... + 22.6%
Fidelity VIP II Asset Manager Fund ............................. + 9.6%
----------
(1) The seven-day net annualized effective yield as of 2/15/00 was 4.13%
and is not necessarily indicative of future actual yields.
(2) Commenced operations May 3, 1999; total return is from that date.
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, American
Century, 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. Accompanying this report are the financial statements for each
similarly named fund of the Investment Company, portfolio of Scudder, fund of
American Century, portfolio of Calvert and portfolios of Fidelity VIP and
Fidelity VIP II.
Total Return Separate Account Performance Notes for extended time periods
and other services are available by calling 1-800-468-3785.
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
3
<PAGE>
CONTENTS
Page
----
Annual Report of American Life Separate Account No. 2 ..................... 1
Statement of Assets and Liabilities .................................... 5
Statement of Operations ................................................ 7
Statements of Changes in Net Assets .................................... 9
Notes to Financial Statements .......................................... 12
Report of Independent Public Accountants ............................... 18
4
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
Investment Company
---------------------------------------------------------------
Mid-Cap
Money Equity
Market All America Equity Index Index Bond
Fund Fund Fund Fund Fund
---------- ------------ ------------- --------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in Mutual of America Investment Corporation
at market value
(Cost:
Money Market Fund -- $1,478,148
All America Fund -- $9,326,022
Equity Index Fund -- $12,543,354
Mid-Cap Equity Index Fund -- $329,654
Bond Fund -- $1,600,895)
(Notes 1 and 2) ...................................... $1,414,862 $9,818,903 $13,554,272 $350,044 $1,479,197
Due From (To) General Account ........................... (776) 27,814 30,746 (330) (63,236)
---------- ---------- ----------- -------- ----------
NET ASSETS .............................................. $1,414,086 $9,846,717 $13,585,018 $349,714 $1,415,961
========== ========== =========== ======== ==========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................ $ 2.11 $ 10.05 $ 3.41 $ 1.11 $ 3.07
========== ========== =========== ======== ==========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ........................... 670,745 979,623 3,981,869 315,623 460,800
========== ========== =========== ======== ==========
<CAPTION>
Investment Company
--------------------------------------------------
Aggressive
Short-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 -- $1,179,091
Mid-Term Bond Fund -- $227,048
Composite Fund -- $4,731,867
Aggressive Equity Fund -- $2,859,211)
(Notes 1 and 2) .................................................... $1,096,032 $210,834 $4,930,708 $4,358,155
Due From (To) General Account ......................................... (926,041) 749 (19,319) 5,853
---------- -------- ---------- ----------
NET ASSETS ............................................................ $ 169,991 $211,583 $4,911,389 $4,364,008
========== ======== ========== ==========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) .............................. $ 1.28 $ 1.32 $ 5.61 $ 2.85
========== ======== ========== ==========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ......................................... 132,691 159,690 875,960 1,529,685
========== ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
American
Scudder Century
----------------------------------- ------------
Capital VP Capital
Bond Growth International Appreciation
Fund Fund Fund Fund
--------- --------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Scudder Portfolios and American
Century VP Capital Appreciation Fund
at market value
(Cost:
Scudder Bond Fund -- $257,187
Scudder Capital Growth Fund -- $7,020,795
Scudder International Fund -- $18,806,969
American Century VP
Capital Appreciation Fund -- $1,232,635)
(Notes 1 and 2) ...................................................... $256,273 $8,255,286 $18,888,508 $1,574,237
Due From (To) General Account ........................................... 5,062 33,791 (69,415) (48,469)
-------- ---------- ----------- ----------
NET ASSETS .............................................................. $261,335 $8,289,077 $18,819,093 $1,525,768
======== ========== =========== ==========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................................ $ 12.73 $ 48.17 $ 25.83 $ 17.40
======== ========== =========== ==========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ........................................... 20,522 172,063 728,627 87,702
======== ========== =========== ==========
<CAPTION>
Calvert Fidelity
-------- ------------------------------------
VIP VIP II
Social Equity- VIP II Asset
Balanced Income Contra Manager
Fund Fund Fund Fund
-------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Calvert Social Balanced Portfolio
and Fidelity Portfolios at market value
(Cost:
Calvert Social Balanced Portfolio -- $799,576
VIP Equity-Income Fund -- $3,201,556
VIP II Contra Fund -- $7,263,040
VIP II Asset Manager Fund -- $1,793,178)
(Notes 1 and 2) ...................................................... $845,027 $3,426,776 $9,348,928 $1,983,294
Due From (To) General Account ........................................... 4,709 36,618 17,968 19,387
-------- ---------- ---------- ----------
NET ASSETS .............................................................. $849,736 $3,463,394 $9,366,896 $2,002,681
======== ========== ========== ==========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................................ $ 3.37 $ 32.21 $ 32.13 $ 26.40
======== ========== ========== ==========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ........................................... 252,148 107,509 291,542 75,850
======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Investment Company
----------------------------------------------------
Money All Equity Mid-Cap
Market America Index Equity Index
Fund Fund Fund Fund*
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income .......................................... $ 65,898 $ 739,443 $ 349,007 $ 2,788
---------- ---------- ---------- ----------
Expenses (Note 3):
Fees and administrative expenses ......................... 10,101 117,750 170,066 1,971
---------- ---------- ---------- ----------
NET INVESTMENT INCOME (LOSS) ................................ 55,797 621,693 178,941 817
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments .................. 13,456 847,450 2,056,020 (175)
Net unrealized appreciation (depreciation) of investments. (45,566) 363,371 472,583 20,390
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ...... (32,110) 1,210,821 2,528,603 20,215
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ............................................... $ 23,687 $1,832,514 $2,707,544 $ 21,032
========== ========== ========== ==========
<CAPTION>
Investment Company
----------------------------------------------------------------
Short-Term Mid-Term Aggressive
Bond Bond Bond Composite Equity
Fund Fund Fund Fund Fund
----------- ---------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ......................................... $ 106,170 $ 13,854 $ 12,878 $ 343,908 $ 234
----------- ---------- ---------- ---------- -----------
Expenses (Note 3):
Fees and administrative expenses ........................ 27,289 2,293 3,156 59,088 43,220
----------- ---------- ---------- ---------- -----------
NET INVESTMENT INCOME (LOSS) ............................... 78,881 11,561 9,722 284,820 (42,986)
----------- ---------- ---------- ---------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments ................. (190,525) 63 (4,510) 24,201 483,483
Net unrealized appreciation (depreciation) of investments 6,573 (80,607) (5,052) 275,733 808,207
----------- ---------- ---------- ---------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ..... (183,952) (80,544) (9,562) 299,934 1,291,690
----------- ---------- ---------- ---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS .............................................. $ (105,071) $ (68,983) $ 160 $ 584,754 $ 1,248,704
=========== ========== =========== ========== ===========
</TABLE>
- ----------
* Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
American
Scudder Century
----------------------------------- ------------
Capital VP Capital
Bond Growth International Appreciation
Fund Fund Fund Fund
--------- --------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ......................................... $ 17,006 $ 690,024 $ 626,561 $ --
---------- ---------- ---------- ----------
Expenses (Note 3):
Fees and administrative expenses ........................ 5,069 92,051 79,825 7,317
---------- ---------- ---------- ----------
NET INVESTMENT INCOME (LOSS) ............................... 11,937 597,973 546,736 (7,317)
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments ................. (15,965) 1,329,205 7,603,116 105,509
Net unrealized appreciation (depreciation) of investments (1,558) 181,106 71,889 343,300
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ..... (17,523) 1,510,311 7,675,005 448,809
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS .............................................. $ (5,586) $2,108,284 $8,221,741 $ 441,492
========== ========== ========== ==========
<CAPTION>
Calvert Fidelity
-------- -------------------------------------
VIP VIP II
Social Equity- VIP II Asset
Balanced Income Contra Manager
Fund Fund Fund Fund
-------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ......................................... $ 80,709 $ 170,824 $ 297,065 $ 135,142
---------- ---------- ---------- ----------
Expenses (Note 3):
Fees and administrative expenses ........................ 11,720 49,656 99,678 24,505
---------- ---------- ---------- ----------
NET INVESTMENT INCOME (LOSS) ............................... 68,989 121,168 197,387 110,637
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments ................. 30,187 128,345 570,254 14,584
Net unrealized appreciation (depreciation) of investments (18,161) (111,339) 926,615 43,866
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ..... 12,026 17,006 1,496,869 58,450
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS .............................................. $ 81,015 $ 138,174 $1,694,256 $ 169,087
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<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
-------------------------- -------------------------- --------------------------
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) .......... $ 55,797 $ 27,608 $ 621,693 $ 822,875 $ 178,941 $ 688,779
Net realized gain (loss) on investments 13,456 343 847,450 633,058 2,056,020 1,334,602
Net unrealized appreciation
(depreciation) of investments ....... (45,566) (10,884) 363,371 (242,666) 472,583 (8,737)
----------- --------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in net assets
resulting from operations ............. 23,687 17,067 1,832,514 1,213,267 2,707,544 2,014,644
----------- --------- ----------- ----------- ----------- -----------
From Unit Transactions:
Contributions ......................... 878,466 630,831 1,145,690 1,595,623 2,248,818 2,814,473
Withdrawals ........................... (184,058) (134,654) (820,553) (918,207) (1,164,011) (827,177)
Net Transfers ......................... (62,173) 68,215 (90,540) (322,226) (1,522,462) 1,681,187
----------- --------- ----------- ----------- ----------- -----------
Net Increase (Decrease) from unit
transactions .......................... 632,235 564,392 234,597 355,190 (437,655) 3,668,483
----------- --------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS .... 655,922 581,459 2,067,111 1,568,457 2,269,889 5,683,127
NET ASSETS:
Beginning of Year ........................ 758,164 176,705 7,779,606 6,211,149 11,315,129 5,632,002
----------- --------- ----------- ----------- ----------- -----------
End of Year .............................. $ 1,414,086 $ 758,164 $ 9,846,717 $ 7,779,606 $13,585,018 $11,315,129
=========== ========= =========== =========== =========== ===========
<CAPTION>
Investment Company
--------------------------------------------------------------------------
Mid-Cap Equity
Index Fund* Bond Fund Short-Term Bond Fund
--------------- ------------------------- -----------------------------
1999 1999 1998 1999 1998
-------------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) ............... $ 817 $ 78,881 $ 193,334 $ 11,561 $ 5,780
Net realized gain (loss) on investments .... (175) (190,525) 45,639 63 (28)
Net unrealized appreciation (depreciation)
of investments ........................... 20,390 6,573 (109,157) (80,607) (1,455)
----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in net assets resulting
from operations ............................ 21,032 (105,071) 129,816 (68,983) 4,297
----------- ----------- ----------- ----------- -----------
From Unit Transactions:
Contributions .............................. 31,113 206,537 1,131,599 24,508 73,817
Withdrawals ................................ (16,918) (219,241) (177,675) (17,197) (5,146)
Net Transfers .............................. 314,487 (733,616) 280,108 73,718 55,949
----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) from unit transactions 328,682 (746,320) 1,234,032 81,029 124,620
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ......... 349,714 (851,391) 1,363,848 12,046 128,917
NET ASSETS:
Beginning of Period/Year ...................... -- 2,267,352 903,504 157,945 29,028
----------- ----------- ----------- ----------- -----------
End of Year ................................... $ 349,714 $ 1,415,961 $ 2,267,352 $ 169,991 $ 157,945
=========== =========== =========== =========== ===========
</TABLE>
- ----------
* Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
Investment Company
---------------------------------------------------------------------------------
Mid-Term Aggressive Equity
Bond Fund Composite Fund Fund
------------------------ -------------------------- -------------------------
1999 1998 1999 1998 1999 1998
------------ ---------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) ............... $ 9,722 $ 11,213 $ 284,820 $ 100,103 $ (42,986) $ (22,565)
Net realized gain (loss) on investments .... (4,510) (575) 24,201 (51,778) 483,483 (969,122)
Net unrealized appreciation (depreciation)
of investments ........................... (5,052) (6,053) 275,733 321,364 808,207 694,336
---------- ---------- ---------- ---------- ---------- -----------
Net Increase (Decrease) in net assets resulting
from operations ............................ 160 4,585 584,754 369,689 1,248,704 (297,351)
---------- ---------- ---------- ---------- ---------- -----------
From Unit Transactions:
Contributions .............................. 90,793 42,486 1,671,677 880,589 537,315 1,243,111
Withdrawals ................................ (19,932) (7,155) (541,682) (465,461) (457,725) (576,815)
Net Transfers .............................. (120,220) 159,141 (234,255) (159,640) (549,705) (1,711,213)
---------- ---------- ---------- ---------- ---------- -----------
Net Increase (Decrease) from unit
transactions ............................... (49,359) 194,472 895,740 255,488 (470,115) (1,044,917)
---------- ---------- ---------- ---------- ---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ......... (49,199) 199,057 1,480,494 625,177 778,589 (1,342,268)
NET ASSETS:
Beginning of Year ............................. 260,782 61,725 3,430,895 2,805,718 3,585,419 4,927,687
---------- ---------- ---------- ---------- ---------- -----------
End of Year ................................... $ 211,583 $ 260,782 $4,911,389 $3,430,895 $4,364,008 $ 3,585,419
========== ========== ========== ========== ========== ===========
<CAPTION>
Scudder
---------------------------------------------------------------------------------
Bond Fund Capital Growth Fund International Fund
---------------------- -------------------------- -------------------------
1999 1998 1999 1998 1999 1998
--------- ---------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) ............... $ 11,937 $ 8,940 $ 597,973 $ 252,274 $ 546,736 $ 124,773
Net realized gain (loss) on investments .... (15,965) 881 1,329,205 154,343 7,603,116 3,169,145
Net unrealized appreciation (depreciation)
of investments ........................... (1,558) (1,656) 181,106 616,576 71,889 (650)
--------- ---------- ----------- ----------- ----------- ----------
Net Increase (Decrease) in net assets resulting
from operations ............................ (5,586) 8,165 2,108,284 1,023,193 8,221,741 3,293,268
--------- ---------- ----------- ----------- ----------- ----------
From Unit Transactions:
Contributions .............................. 69,147 182,295 1,246,448 2,042,311 271,065 490,933
Withdrawals ................................ (18,843) (41,847) (1,280,074) (1,000,765) (195,868) (320,115)
Net Transfers .............................. 134,407) 104,368 45,702 (634,248) 8,738,551 2,811,143)
--------- ---------- ----------- ----------- ----------- ----------
Net Increase (Decrease) from unit
transactions ............................... (84,103) 244,816 12,076 407,298 8,813,748 2,640,325)
--------- ---------- ----------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ......... (89,689) 252,981 2,120,360 1,430,491 17,035,489 652,943
NET ASSETS:
Beginning of Year ............................. 351,024 98,043 6,168,717 4,738,226 1,783,604 1,130,661
--------- ---------- ----------- ----------- ----------- ----------
End of Year ................................... $ 261,335 $ 351,024 $ 8,289,077 $ 6,168,717 $18,819,093 $1,783,604
========= ========== =========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
American
Century Calvert
-------------------------- -------------------------
VP Capital Social
Appreciation Fund Balanced Fund
-------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ...................................... $ (7,317) $ 16,914 $ 68,989 $ 46,535
Net realized gain (loss) on investments .................... 105,509 (99,213) 30,187 10,561
Net unrealized appreciation (depreciation)
of investments ........................................... 343,300 40,349 (18,161) 30,355
----------- ----------- ----------- -----------
Net Increase (Decrease) in net assets resulting
from operations ............................................ 441,492 (41,950) 81,015 87,451
----------- ----------- ----------- -----------
From Unit Transactions:
Contributions .............................................. 102,987 75,175 179,057 274,878
Withdrawals ................................................ (47,748) (112,315) (194,924) (68,369)
Net Transfers .............................................. 643,688 (24,416) 3,368 (26,872)
----------- ----------- ----------- -----------
Net Increase (Decrease) from unit
transactions ............................................... 698,927 (61,556) (12,499) 179,637
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ......................... 1,140,419 (103,506) 68,516 267,088
NET ASSETS:
Beginning of Year ............................................. 385,349 488,855 781,220 514,132
----------- ----------- ----------- -----------
End of Year ................................................... $ 1,525,768 $ 385,349 $ 849,736 $ 781,220
=========== =========== =========== ===========
<CAPTION>
Fidelity
-----------------------------------------------------------------------------
VIP VIP II VIP II
Equity-Income Contra Asset Manager
Fund Fund Fund
------------------------- ------------------------- -------------------------
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) ............... $ 121,168 $ 136,853 $ 197,387 $ 188,320 $ 110,637 $ 148,907
Net realized gain (loss) on investments .... 128,345 72,638 570,254 765,617 14,584 (5,492)
Net unrealized appreciation (depreciation)
of investments ........................... (111,339) (34,830) 926,615 406,309 43,866 11,903
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in net assets resulting
from operations ............................ 138,174 174,661 1,694,256 1,360,246 169,087 155,318
----------- ----------- ----------- ----------- ----------- -----------
From Unit Transactions:
Contributions .............................. 542,607 1,189,305 1,249,737 1,461,583 560,070 663,209
Withdrawals ................................ (369,062) (707,392) (1,397,869) (742,245) (279,074) (202,904)
Net Transfers .............................. (391,945) 270,492 524,957 888,336 (85,617) (354,073)
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) from unit
transactions ............................... (218,400) 752,405 376,825 1,607,674 195,379 106,232
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ......... (80,226) 927,066 2,071,081 2,967,920 364,466 261,550
NET ASSETS:
Beginning of Year ............................. 3,543,620 2,616,554 7,295,815 4,327,895 1,638,215 1,376,665
----------- ----------- ----------- ----------- ----------- -----------
End of Year ................................... $ 3,463,394 $ 3,543,620 $ 9,366,896 $ 7,295,815 $ 2,002,681 $ 1,638,215
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<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
alternatives: Money Market Fund, All America Fund, Equity Index Fund, Bond Fund,
Short-Term Bond Fund, Mid-Term Bond Fund, Composite Fund, Scudder Bond Fund,
Scudder Capital Growth Fund, Scudder International Fund, American Century VP
Capital Appreciation Fund and Calvert Social Balanced Fund. The American Life
funds invest in a corresponding fund of Mutual of America Investment Corporation
("Investment Company"), portfolios of Scudder Variable Life Investment Fund
("Scudder"), fund of American Century Variable Portfolios Inc. ("American
Century") and a corresponding fund of Calvert Social Balanced Portfolio of
Calvert Variable Series, Inc. ("Calvert").
On May 2, 1994 the Aggressive Equity Fund of the Investment Company became
available as an investment alternative to Separate Account No. 2.
On May 1, 1995 Fidelity Investments Equity-Income, Contrafund and Asset
Manager Funds became available to Separate Account No. 2 as investment
alternatives. The Fidelity Equity-Income Fund invests in the corresponding
portfolio of Fidelity Variable Insurance Products Fund ("Fidelity VIP") and the
Contrafund and Asset Manager Funds invest in the corresponding portfolios of
Fidelity Variable Insurance Products Fund II ("Fidelity VIP II") (collectively,
"Fidelity").
On May 3, 1999 the Mid-Cap Equity Index Fund of the Investment Company
became the 17th investment alternative available to Separate Account No. 2.
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, American Century, Calvert and Fidelity and are valued at the
reported net asset values of the respective Funds or 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.
12
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
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, 1999
are as follows:
Number of Net Asset
Shares Value
--------- ---------
Investment Company Funds:
Money Market Fund .................................. 1,192,293 $ 1.19
All America Fund ................................... 2,915,421 3.37
Equity Index Fund .................................. 4,704,889 2.88
Mid-Cap Equity Index Fund .......................... 315,786 1.11
Bond Fund .......................................... 1,140,345 1.30
Short-Term Bond Fund ............................... 1,104,204 0.99
Mid-Term Bond Fund ................................. 243,340 0.87
Composite Fund ..................................... 2,587,886 1.91
Aggressive Equity Fund ............................. 2,016,412 2.16
Scudder Portfolios:
Bond Portfolio ..................................... 39,487 6.49
Capital Growth Portfolio--Class "A" ................ 283,395 29.13
International Portfolio--Class "A" ................. 928,638 20.34
American Century VP Capital Appreciation Fund ......... 106,081 14.84
Calvert Social Balanced Portfolio ..................... 389,595 2.17
Fidelity Portfolios:
Equity-Income--"Initial" Class ..................... 133,286 25.71
Contrafund--"Initial" Class ........................ 320,718 29.15
Asset Manager--"Initial" Class ..................... 106,229 18.67
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 American Century Fund for which the
annual rate is .20%, and each Fidelity fund, for which the annual rate is .30%.
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.
13
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
4. DIVIDENDS
All dividend distributions are reinvested in additional shares of the
respective funds or portfolios at net asset value. On December 31, 1999 a
dividend distribution was made by the Investment Company to shareholders of
record as of December 30, 1999. Prior thereto, the Investment Company declared
and paid a dividend distribution on September 15, 1999. The combined amount of
these dividends was as follows:
Money Market Fund ............................................ $ 65,898
All America Fund ............................................. 739,443
Equity Index Fund ............................................ 349,007
Mid-Cap Equity Index Fund .................................... 2,788
Bond Fund .................................................... 106,170
Short-Term Bond Fund ......................................... 13,854
Mid-Term Bond Fund ........................................... 12,878
Composite Fund ............................................... 345,908
Aggressive Equity Fund ....................................... 234
On January 27, 1999 and April 28, 1999, dividends were paid by the Scudder
Bond Portfolio. The combined amount of the dividends was $17,006.
On January 27, 1999 and April 28, 1999, dividends were paid by the Scudder
Capital Growth Portfolio. The combined amount of the dividends was $690,024.
On April 28, 1999, a dividend was paid by the Scudder International
Portfolio. The amount of the dividend was $626,561.
On December 30, 1999, a dividend was paid by the Calvert Social Balanced
Portfolio. The amount of the dividend was $80,709.
On February 5, 1999, a dividend was paid by the Fidelity Equity-Income
Portfolio. The amount of the dividend was $170,824.
On February 5, 1999, a dividend was paid by the Fidelity Contrafund
Portfolio. The amount of the dividend was $297,065.
On February 5, 1999, a dividend was paid by the Fidelity Asset Manager
Portfolio. The amount of the dividend was $135,142.
No dividend was paid by the American Century VP Capital Appreciation Fund
during 1999.
5. FINANCIAL HIGHLIGHTS
Shown below are financial highlights for a Unit outstanding throughout
each of the previous five years ended December 31, 1999 or, if not in existence
a full year, the initial period ended December 31:
<TABLE>
<CAPTION>
Investment Company
----------------------------------------------------
Money Market Fund
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ..................... $ 2.03 $ 1.95 $ 1.87 $ 1.80 $ 1.72
======== ======== ======= ======== =======
Unit value, end of year ........................... $ 2.11 $ 2.03 $ 1.95 $ 1.87 $ 1.80
======== ======== ======= ======== =======
Units outstanding, end of year .................... 670,745 373,107 90,542 66,104 62,822
======== ======== ======= ======== =======
<CAPTION>
Investment Company
----------------------------------------------------
All America Fund
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ..................... $ 8.09 $ 6.76 $ 5.39 $ 4.52 $ 3.35
======== ======== ======== ======== ========
Unit value, end of year ........................... $ 10.05 $ 8.09 $ 6.76 $ 5.39 $ 4.52
======== ======== ======== ======== ========
Units outstanding, end of year .................... 979,623 961,495 919,295 621,536 239,745
======== ======== ======== ======== ========
</TABLE>
14
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Investment Company
--------------------------------------------------------
Equity Index Fund
--------------------------------------------------------
1999 1998 1997 1996 1995
----------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ................................... $ 2.86 $ 2.26 $ 1.72 $ 1.42 $ 1.05
=========== ========== ========== ======== ========
Unit value, end of year ......................................... $ 3.41 $ 2.86 $ 2.26 $ 1.72 $ 1.42
=========== ========== ========== ======== ========
Units outstanding, end of year .................................. 3,981,869 3,950,586 2,496,288 858,298 333,578
=========== ========== ========== ======== ========
<CAPTION>
Investment Company
---------------------------------------------------------------------------------
Mid-Cap Equity
Index Fund Bond Fund
--------------- ---------------------------------------------------------------
1999* 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period/year ............ $ 1.00 $ 3.17 $ 3.00 $ 2.75 $ 2.69 $ 2.28
======== ======== ======== ======== ======== =======
Unit value, end of year ......................... $ 1.11 $ 3.07 $ 3.17 $ 3.00 $ 2.75 $ 2.69
======== ======== ======== ======== ======== =======
Units outstanding, end of year .................. 315,623 460,800 714,893 301,512 328,371 65,503
======== ======== ======== ======== ======== =======
<CAPTION>
Investment Company
-----------------------------------------------------
Short-Term Bond Fund
-----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 1.24 $ 1.19 $ 1.14 $ 1.10 $ 1.03
======== ======== ======= ======= ======
Unit value, end of year ............................................ $ 1.28 $ 1.24 $ 1.19 $ 1.14 $ 1.10
======== ======== ======= ======= ======
Units outstanding, end of year ..................................... 132,691 126,929 24,344 17,798 5,302
======== ======== ======= ======= ======
<CAPTION>
Investment Company
----------------------------------------------------
Mid-Term Bond Fund
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 1.32 $ 1.26 $ 1.19 $ 1.16 $ 1.01
======== ======== ======= ======== =======
Unit value, end of year ............................................ $ 1.32 $ 1.32 $ 1.26 $ 1.19 $ 1.16
======== ======== ======= ======== =======
Units outstanding, end of year ..................................... 159,690 197,045 49,001 260,862 18,581
======== ======== ======= ======== =======
<CAPTION>
Investment Company
---------------------------------------------------
Composite Fund
---------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 4.93 $ 4.36 $ 3.75 $ 3.39 $ 2.82
======== ======== ======== ======== ========
Unit value, end of year ............................................ $ 5.61 $ 4.93 $ 4.36 $ 3.75 $ 3.39
======== ======== ======== ======== ========
Units outstanding, end of year ..................................... 875,960 696,121 643,537 456,304 281,905
======== ======== ======== ======== ========
<CAPTION>
Investment Company
------------------------------------------------------------
Aggressive Equity Fund
------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 2.02 $ 2.15 $ 1.80 $ 1.43 $ 1.05
========== ========== ========= ========= ========
Unit value, end of year ............................................ $ 2.85 $ 2.02 $ 2.15 $ 1.80 $ 1.43
========== ========== ========= ========= ========
Units outstanding, end of year ..................................... 1,529,685 1,778,370 2,289,562 1,386,311 599,553
========== ========== ========= ========= ========
</TABLE>
- ----------
*Commenced operations May 3, 1999.
15
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Scudder
--------------------------------------------------
Bond Fund
--------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 13.02 $ 12.37 $ 11.48 $ 11.30 $ 9.69
======= ======= ======= ======= =======
Unit value, end of year ............................................ $ 12.73 $ 13.02 $ 12.37 $ 11.48 $ 11.30
======= ======= ======= ======= =======
Units outstanding, end of year ..................................... 20,522 26,966 7,927 3,877 2,407
======= ======= ======= ======= =======
<CAPTION>
Scudder
----------------------------------------------------
Capital Growth Fund
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 36.07 $ 29.64 $ 22.11 $ 18.64 $ 14.67
======== ======== ======== ======== =======
Unit value, end of year ............................................ $ 48.17 $ 36.07 $ 29.64 $ 22.11 $ 18.64
======== ======== ======== ======== =======
Units outstanding, end of year ..................................... 172,063 171,014 159,853 73,641 42,366
======== ======== ======== ======== =======
<CAPTION>
Scudder
----------------------------------------------------
International Fund
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 16.93 $ 14.46 $ 13.43 $ 11.85 $ 10.80
======== ======== ======= ======== =======
Unit value, end of year ............................................ $ 25.83 $ 16.93 $ 14.46 $ 13.43 $ 11.85
======== ======== ======= ======== =======
Units outstanding, end of year ..................................... 728,627 105,376 78,166 70,139 29,549
======== ======== ======= ======== =======
<CAPTION>
American Century
---------------------------------------------------
VP Capital Appreciation Fund
---------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 10.69 $ 11.04 $ 11.53 $ 12.18 $ 9.39
======= ======= ======= ======= =======
Unit value, end of year ............................................ $ 17.40 $ 10.69 $ 11.04 $ 11.53 $ 12.18
======= ======= ======= ======= =======
Units outstanding, end of year ..................................... 87,702 36,061 44,293 67,688 56,618
======= ======= ======= ======= =======
<CAPTION>
Calvert
---------------------------------------------------
Social Balanced Fund
---------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ...................................... $ 3.04 $ 2.65 $ 2.23 $ 2.01 $ 1.57
======== ======== ======== ======== =======
Unit value, end of year ............................................ $ 3.37 $ 3.04 $ 2.65 $ 2.23 $ 2.01
======== ======== ======== ======== =======
Units outstanding, end of year ..................................... 252,148 256,931 194,166 100,573 45,392
======== ======== ======== ======== =======
<CAPTION>
Fidelity VIP
---------------------------------------------------
Equity-Income Fund
---------------------------------------------------
1999 1998 1997 1996 1995*
-------- -------- ------- ------- -------
Unit value, beginning of year/period ............................... $ 30.65 $ 27.77 $ 21.93 $ 19.43 $ 16.30
======== ======== ======= ======= =======
Unit value, end of year ............................................ $ 32.21 $ 30.65 $ 27.77 $ 21.93 $ 19.43
======== ======== ======= ======= =======
Units outstanding, end of year ..................................... 107,509 115,626 94,213 60,979 17,958
======== ======== ======= ======= =======
</TABLE>
- ----------
*Commenced operations May 1, 1995.
16
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Fidelity VIP II
---------------------------------------------------
Contra Fund
---------------------------------------------------
1999 1998 1997 1996 1995*
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year/period ............................... $ 26.16 $ 20.36 $ 16.59 $ 13.85 $ 11.43
======== ======== ======== ======== =======
Unit value, end of year ............................................ $ 32.13 $ 26.16 $ 20.36 $ 16.59 $ 13.85
======== ======== ======== ======== =======
Units outstanding, end of year ..................................... 291,542 278,931 212,606 153,360 29,132
======== ======== ======== ======== =======
<CAPTION>
Fidelity VIP II
---------------------------------------------------
Asset Manager Fund
---------------------------------------------------
1999 1998 1997 1996 1995*
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year/period ............................... $ 24.04 $ 21.14 $ 17.72 $ 15.66 $ 14.04
======= ======= ======= ======= =======
Unit value, end of year ............................................ $ 26.40 $ 24.04 $ 21.14 $ 17.72 $ 15.66
======= ======= ======= ======= =======
Units outstanding, end of year ..................................... 75,850 68,139 65,125 36,872 5,561
======= ======= ======= ======= =======
</TABLE>
- ----------
*Commenced operations May 1, 1995.
6. SUBSEQUENT EVENT
In September 1999, Mutual of America Life Insurance Company ("Mutual of
America"), submitted to the New York Insurance Department a Plan of
Reorganization whereby Mutual of America would prepare for the sale of its
wholly-owned subsidiary, The American Life Insurance Company of New York ("the
Company"). In preparation for such sale, Mutual of America would assume, subject
to approval from the Company's policyowners, the Company's in force business.
Upon obtaining approval from the policyowners, Mutual of America will assume the
Company's outstanding Contracts pursuant to the assumption reinsurance
agreement. Upon transfer of these Contracts, Mutual of America will replace the
Company as the issuer of the Contracts. Commensurate with the transfer, all of
the assets and obligations of the variable portion of these Contracts will be
transferred to Mutual of America's Separate Account No. 2.
17
<PAGE>
REPORT OF INDEPENDENT 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, 1999, 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 five 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 and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. 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, 1999, 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 five years in the period then ended, in conformity with generally accepted
accounting principles.
Arthur Andersen LLP
New York, New York
February 21, 2000
18
<PAGE>
THE AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
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
320 Park Avenue
New York, NY 10022-6839
212-224-1700
www.mutualofamerica.com
