T. Rowe Price
Variable Annuity Account
Financial Statements
Year ended December 31, 1996
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 3, 1997, 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 Account
and The Board of Directors of Security Benefit Life Insurance
Company
We have audited the accompanying balance sheet of T. Rowe
Price Variable Annuity Account (the Company) as of December
31, 1996, and the related statement of operations and changes
in net assets for the year then ended December 31, 1996. 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, 1996, 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 Account at December
31, 1996, and the results of its operations and changes in its
net assets for the year then ended December 31, 1996, in
conformity with generally accepted accounting principles.
February 7, 1997
Balance Sheet
T. Rowe Price Variable Annuity Account
December 31, 1996
(Dollars in Thousands)
Assets
Investments:
T. Rowe Price Portfolios:
New America Growth Portfolio - 1,447,071
shares at net asset value of $17.67
per share (cost, $23,715). . . . . . . . $ 25,570
International Stock Portfolio - 1,136,231
shares at net asset value of $12.64
per share (cost, $13,554). . . . . . . . 14,362
Equity Income Portfolio - 1,833,719
shares at net asset value of $15.26
per share (cost, $25,720). . . . . . . . 27,983
Personal Strategy Balanced Portfolio - 604,272
shares at net asset value of $13.44
per share (cost, $7,721) . . . . . . . . 8,121
Limited-Term Bond Portfolio - 986,818
shares at net asset value of $4.93
per share (cost, $4,840) . . . . . . . . 4,865
_________
Total assets. . . . . . . . . . . . . . . . . . . $ 80,901
_________
_________
Net Assets
Net assets are represented by (Note 3):
Number of Unit
Units Value Amount
_______ ______ ______
New America Growth Subaccount:
Accumulation
units. . . . . . . . 1,596,903 $16.00 $ 25,554
Annuity reserves. . . . 985 16.00 16 $25,570
_______
International Stock Subaccount:
Accumulation
units . . . . . . 1,124,821 12.77 14,360
Annuity
reserves. . . . . 181 12.77 2 14,362
_______
Equity Income Subaccount:
Accumulation
units . . . . . . 1,902,935 14.70 27,973
Annuity
reserves. . . . . 656 14.70 10 27,983
_______
Personal Strategy Balanced Subaccount:
Accumulation
units . . . . . . 599,843 13.51 8,105
Annuity
reserves. . . . . 1,153 13.51 16 8,121
_______
Limited-Term Bond Subaccount:
Accumulation
units . . . . . . 445,079 10.93 4,865
_________
Total net assets. . . . . $80,901
_________
_________
See accompanying notes.
Statement of Operations and Changes in Net Assets
T. Rowe Price Variable Annuity Account
Year ended December 31, 1996
(Dollars In Thousands)
New Inter- Personal Limited-
Americanational Equity Strategy Term
Growth Stock Income Balanced Bond
Subac- Subac- Subac- Subac- Subac-
count count count count count
______ _____ _____ _____ _____
Dividend
distributions. . . $ 36 $ 132 $ 534 $ 185 $ 164
Expenses (Note 2):
Mortality and expense
risk fee . . . . . (89) (49) (88) (28) (15)
_______ ______ ______ ______ ______
Net investment
income (loss). . . (53) 83 446 157 149
Capital gain
distributions. . . 319 75 130 150 -
Realized gain (loss) on
investments. . . . 521 227 341 72 (37)
Unrealized appreciation
on
investments. . . . 1,675 731 2,087 359 18
_______ ______ ______ ______ ______
Net realized and unrealized gain
(loss) on
investments. . . . 2,515 1,033 2,558 581 (19)
_______ ______ ______ ______ ______
Net increase in net
assets resulting
from
operations . . . . 2,462 1,116 3,004 738 130
Net assets at beginning
of year. . . . . . 4,474 2,444 4,522 1,765 925
Variable annuity
deposits (Notes 2
and 3) . . . . . . 22,024 12,438 22,410 6,629 5,935
Terminations and
withdrawals (Notes 2
and 3) . . . . . . (3,389) (1,636 )(1,952) (1,008) (2,125)
Annuity payments
(Notes 2
and 3) . . . . . . (1) - - (1) -
Net mortality guarantee
transfer . . . . . - - (1) (2) -
______ ______ ______ ______ ______
Net assets at end
of year. . . . . . $25,570 $14,362 $27,983 $8,121 $4,865
_______ _______ _______ ______ ______
_______ _______ _______ ______ ______
See accompanying notes.
Notes to Financial Statements
T. Rowe Price Variable Annuity Account
December 31, 1996
1 Organization and Significant Accounting Policies
Organization
T. Rowe Price Variable Annuity Account (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. The
Account currently is divided into five subaccounts. Each
subaccount invests exclusively in shares of a single
corresponding mutual fund. Purchase payments received by the
Account are 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, purchase payments 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 investment grade
debt securities.
T. Rowe Price Associates, Inc. (T. Rowe Price) serves as
the investment advisor to each Portfolio except the
International Stock Portfolio, which is managed by Rowe
Price-Fleming International, Inc., an affiliate of T. Rowe
Price. The investment advisors are responsible for managing
the Portfolio's assets in accordance with the terms of the
investment advisory contracts.
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 1996 were as follows:
Cost of Proceeds
Purchases From Sales
________ _________
(In Thousands)
New America
Growth Portfolio $23,168 $4,268
International Stock
Portfolio 13,265 2,305
Equity Income Portfolio 24,102 3,069
Personal Strategy
Balanced Portfolio 7,279 1,354
Limited-Term
Bond Portfolio 6,946 2,986
Annuity Reserves
Annuity reserves relate to contracts which have matured and
are in the payout stage. Such reserves are 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 gains distributions paid by the mutual
fund to the Account are reinvested in additional shares of
each respective Portfolio. Dividend income and capital gains
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
(In Thousands)
New America Growth Subaccount:
Variable annuity deposits 1,494
Terminations, withdrawals and
annuity payments 230
International Stock Subaccount:
Variable annuity deposits 1,043
Terminations, withdrawals
and annuity payments 137
Equity Income Subaccount:
Variable annuity deposits 1,686
Terminations, withdrawals
and annuity payments 148
Personal Strategy Balanced Subaccount:
Variable annuity deposits 534
Terminations, withdrawals
and annuity payments 81
Limited-Term Bond Subaccount:
Variable annuity deposits 604
Terminations, withdrawals
and annuity payments 246
