TRP664 (3/96)
1995 Annual Report
T. Rowe Price Variable Annuity
T. Rowe Price
Variable Annuity
Financial Statements
Period from May 1, 1995 (inception)
to December 31, 1995
Contents
Report of Independent Auditors . . . . . . . . . . . . . . .2
Audited Financial Statements
Balance Sheet. . . . . . . . . . . . . . . . . . . . .3
Statement of Operations and
Changes in Net Assets . . . . . . . . . . . . . . .4
Notes to Financial Statements. . . . . . . . . . . . .5
Notice of Contract Owners' Meeting
The annual meeting of contract owners will be held on Tuesday, June 4, 1996,
at Security Benefit Life Insurance Company, 700 SW Harrison St., Topeka,
Kansas, at 2:00 p.m. Each contract owner is entitled to vote, either in person
or by proxy, on all matters coming before the meeting. Proxies are available
from the corporate secretary and must be returned at least 30 days prior to
the annual meeting.
This report is submitted for the information of T. Rowe Price No-Load Variable
Annuity contract owners. The T. Rowe Price No-Load Variable Annuity (V6021) is
issued by Security Benefit Life Insurance Company.
Report of Independent Auditors
The Contract Owners of T. Rowe Price Variable Annuity and
The Board of Directors of Security Benefit Life Insurance Company
We have audited the accompanying balance sheet of T. Rowe Price Variable
Annuity (the Company) as of December 31, 1995, and the related statement of
operations and changes in net assets for the period from May 1, 1995
(inception) to December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit 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. Our
procedures included confirmation of investments owned as of December 31, 1995,
by correspondence with the custodian. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of T. Rowe Price
Variable Annuity at December 31, 1995, and the results of its operations and
changes in its net assets for the period from May 1, 1995 (inception) to
December 31, 1995, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
February 2, 1996
Balance Sheet
T. Rowe Price Variable Annuity
December 31, 1995
(Dollars in Thousands)
Assets
Investments:
T. Rowe Price Portfolios:
New America Growth Portfolio - 293,778 shares
at net asset value of $15.23 per share
(cost, $4,294) . . . . . . . . . . . . . . . . . . . $ 4,474
International Stock Portfolio - 217,083 shares
at net asset value of $11.26 per share
(cost, $2,367) . . . . . . . . . . . . . . . . . . . 2,444
Equity Income Portfolio - 342,348 shares
at net asset value of $13.21 per share
(cost, $4,346) . . . . . . . . . . . . . . . . . . . 4,522
Personal Strategy Balanced Portfolio - 141,994 shares
at net asset value of $12.43 per share
(cost, $1,724) . . . . . . . . . . . . . . . . . . . 1,765
Limited-Term Bond Portfolio - 182,590 shares
at net asset value of $5.06 per share
(cost, $917) . . . . . . . . . . . . . . . . . . . . 924
Actuarial risk fees receivable . . . . . . . . . . . . . . . 1
_________
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $ 14,130
_________
_________
Net Assets
Net assets are represented by (Note 3):
Number of Unit
Units Value
_________ ______
New America Growth Subaccount:
Accumulation units . . . . . . . . .333,934 $13.40 $ 4,474
International Stock Subaccount:
Accumulation units . . . . . . . . .218,427 11.19 2,444
Equity Income Subaccount:
Accumulation units . . . . . . . . .365,712 12.37 4,522
Personal Strategy Balanced Subaccount:
Accumulation units . . . . . . . . .148,349 11.90 1,765
Limited-Term Bond Subaccount:
Accumulation units . . . . . . . . . 86,891 10.64 925
_________
Total net assets . . . . . . . . . . . . . . . $14,130
_________
_________
See accompanying notes.
Statement of Operations and Changes in Net Assets
T. Rowe Price Variable Annuity
Period from May 1, 1995 (inception) to December 31, 1995
(Dollars In Thousands)
Per- Lim-
New Inter- Equity sonal ited
Amer- na- In- Stra- Term
ica tional come tegy Bond
Growth Stock Sub- Balan- Sub-
Sub- Sub- Acc- ced Sub- Acc-
Account Account ount Account ount
________ _______ _______ _______ ______
Dividend distributions . . . . $ - $ - $ 44 $ 16 $ 8
Expenses (Note 2):
Mortality and expense
risk fee . . . . . . . . . . (4) (3) (4) (1) (1)
______ ______ ______ ______ ______
Net investment
income (loss). . . . . . . . (4) (3) 40 15 7
Realized gain (loss) on
investments. . . . . . . . . 48 (8) 41 7 1
Unrealized appreciation
on investments . . . . . . . 180 77 176 41 7
______ ______ ______ ______ ______
Net realized and
unrealized gain
on investments . . . . . . . 228 69 217 48 8
______ ______ ______ ______ ______
Net increase in net assets
resulting from
operations . . . . . . . . . 224 66 257 63 15
Net assets at
beginning of period. . . . . - - - - -
Variable annuity
deposits (Notes 2 and 3) . . 4,279 2,410 4,348 1,714 1,182
Terminations and
withdrawals
(Notes 2 and 3). . . . . . . (29) (32) (83) (12) (272)
______ ______ ______ ______ ______
Net assets at end
of period. . . . . . . . . . $4,474 $2,444 $4,522 $1,765 $ 925
______ ______ ______ ______ ______
______ ______ ______ ______ ______
See accompanying notes.
Notes to Financial Statements
T. Rowe Price No-Load Variable Annuity
December 31, 1995
1 Organization and Significant Accounting Policies
Organization
T. Rowe Price Variable Annuity (the Account) is a separate account of Security
Benefit Life Insurance Company (SBL). The Account is registered as a unit
investment trust under the Investment Company Act of 1940, as amended. All
deposits received by the Account have been invested in one of the portfolios
of either T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income
Series, Inc., or T. Rowe Price International Series, Inc., mutual funds not
otherwise available to the public. As directed by the owners, amounts
deposited are invested in shares of New America Growth Portfolio - emphasis on
long-term capital growth through investments in common stocks of domestic
companies, International Stock Portfolio - emphasis on long-term capital
growth through investments in common stocks of established foreign companies,
Equity Income Portfolio - emphasis on substantial dividend income and capital
appreciation by investing primarily in dividend-paying common stocks, Personal
Strategy Balanced Portfolio - emphasis on both capital appreciation and
income, and Limited-Term Bond Portfolio - emphasis on income with moderate
price fluctuation by investing in short- and intermediate-term securities.
Under the terms of the investment advisory contracts, portfolio
investments are made by T. Rowe Price Associates, Inc., for each portfolio
except those of the T. Rowe Price International Stock Portfolio, which is
advised by Rowe Price-Fleming International, Inc., an affiliate of T. Rowe
Price Associates, Inc.
Investment Valuation
Investments in mutual fund shares are carried in the balance sheet at market
value (net asset value of the underlying mutual fund). The first-in, first-out
cost method is used to determine gains and losses. Security transactions are
accounted for on the trade date.
The cost of investments purchased and proceeds from investments sold
during the period from May 1, 1995 (inception), to December 31, 1995, were as
follows:
Cost of Proceeds
Purchases From Sales
________ _________
(In Thousands)
New America
Growth Portfolio $4,685 $439
International Stock
Portfolio 2,698 323
Equity Income Portfolio 4,967 662
Personal Strategy
Balanced Portfolio 1,952 235
Limited-Term
Bond Portfolio 1,237 321
Annuity Reserves
As of December 31, 1995, annuity reserves have not been established because
there are no contracts which have matured and are in the payout stage. Such
reserves would be computed on the basis of published mortality tables using
assumed interest rates that will provide reserves as prescribed by law. In
cases where the payout option selected is life contingent, SBL periodically
recalculates the required annuity reserves, and any resulting adjustment is
either charged or credited to SBL and not to the Account.
Reinvestment of Dividends
Dividend and capital gain distributions paid by the mutual fund to the Account
are reinvested in additional shares of each respective portfolio. Dividend
income and capital gain distributions are recorded as income on the
ex-dividend date.
Federal Income Taxes
Under current law, no federal income taxes are payable with respect to the
Account.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. Variable Annuity Contract Charges
Mortality and expense risks assumed by SBL are compensated for by a fee
equivalent to an annual rate of .55% of the average daily net assets of each
account.
When applicable, an amount for state premium taxes is deducted as
provided by pertinent state law, either from the purchase payments or from the
amount applied to effect an annuity at the time annuity payments commence.
3. Summary of Unit Transactions
Unit transactions during the period from May 1, 1995 (inception) to December
31, 1995, were as follows (in thousands):
New America Growth Subaccount:
Variable annuity deposits 336
Terminations and withdrawals 2
International Stock Subaccount:
Variable annuity deposits 221
Terminations and withdrawals 3
Equity Income Subaccount:
Variable annuity deposits 373
Terminations and withdrawals 7
Personal Strategy Balanced Subaccount:
Variable annuity deposits 149
Terminations and withdrawals 1
Limited-Term Bond Subaccount:
Variable annuity deposits 113
Terminations and withdrawals 26
