Front Cover
Annual Report
AUL American Individual Unit Trust
December 31, 1999
This report and the financial statements contained herein are for the
general information of the Participants. The report is not to be
distributed to prospective investors as sales literature unless accompanied
or preceded by an effective prospectus of AUL American Series Fund, Inc.
and AUL American Individual Unit Trust, which contains further information
concerning the sales charge, expenses and other pertinent information.
<PAGE>
A Message
From
The Chairman of the Board
and President of
AUL American Series Fund, Inc.
To Participants in AUL American Individual Unit Trust
It is with great pleasure that I welcome you to the year 2000. Although
doomsayers hypothesized potential calamities due to year 2000 computer problems,
I am happy to announce an uneventful transition into this new era.
The year 1999 can be characterized by its excesses. Technology companies
rocketed to new highs even though the majority of stocks registered poor
performance. New records were set in the IPO (initial public offering) market
with well known names such as UPS and Goldman Sachs. Technology start-ups were
prolific as investors seemed to have an insatiable appetite for Internet
retailers, web-site operators and anything carrying the dot com title. It was
also the year of megamergers, the launch of the euro, and the recovery from
Asias financial woes.
The U.S. economic environment has also been unique in that it is nearing the end
of nine years of expansion, soon to be the longest period of economic growth on
record. The fact that our economy has endured only eight months of recession
since 1982 is another unparalleled feat.
Good economic news can mean tough times for the bond market as investors worry
about the potential for an increase in inflation. The sharp 179 basis point
increase in the ten-year Treasury yield to 6.44% last year reflects this
concern.
Although inflation has not been a problem up to now, the Federal Reserve Board
felt compelled to take a pre-emptive stance last year by raising the Federal
Funds rate on three different occasions. The continued momentum of the economy
suggests that the Feds credit tightening had little apparent impact. The Federal
Reserve is expected to raise rates further this year to help achieve a
sustainable rate of economic growth.
Most economists are expecting the economy to continue on its current path, but
to moderate somewhat from current levels. The equity market is also expected to
report positive returns, but could experience a change or moderation in
leadership. Bonds will ultimately benefit if the Federal Reserve is successful
in slowing economic growth. For now, however, bond market investors remain
cautious.
In closing, American United Life remains committed to serving your investment
needs. We appreciate your continued confidence and support.
/s/ James W. Murphy
James W. Murphy
Chairman of the Board of Directors and President
Indianapolis, Indiana
January 31, 2000
1
<PAGE>
Report of Independent Accountants
The Contract Owners of
AUL American Individual Unit Trust and
Board of Directors of
American United Life Insurance Company
In our opinion, the accompanying statements of net assets, and the related
statements of operations and of changes in net assets present fairly, in all
material respects, the financial position of AUL American Individual Unit Trust
at December 31, 1999, the results of its operations and changes in its net
assets for each of the periods indicated, in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Trusts management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1999, by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
/s/PriceWaterhouseCoopers LLP
Indianapolis, Indiana
February 9, 2000
2
<PAGE>
AUL American Individual Unit Trust
statementS of net assets
December 31, 1999
<TABLE>
<CAPTION>
AUL American Series Fund Fidelity
Tactical Asset
Equity Money Market Bond Managed Allocation High Income
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at value $ 9,717,388 $ 13,536,991 $ 6,267,209 $ 8,712,791 $ 3,678,191 $ 6,004,843
Net assets $ 9,717,388 $ 13,536,991 $ 6,267,209 $ 8,712,791 $ 3,678,191 $ 6,004,843
Units outstanding 1,050,857 11,290,259 943,532 1,062,998 525,619 765,292
Accumulation unit value $ 9.25 $ 1.20 $ 6.64 $ 8.20 $ 7.00 $ 7.85
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Growth Overseas Asset Manager Index 500 Equity-Income Contrafund
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at value $ 35,572,514 $ 3,461,580 $24,625,731 $49,230,328 $15,269,444 $27,509,458
Net assets $ 35,572,514 $ 3,461,580 $24,625,731 $49,230,328 $15,269,444 $27,509,458
Units outstanding 2,048,630 336,608 2,597,381 3,019,439 1,546,416 1,972,159
Accumulation unit value $ 17.36 $ 10.28 $ 9.48 $ 16.31 $ 9.87 $ 13.95
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
AUL American Individual Unit Trust
statementS of net assets (continued)
December 31, 1999
<TABLE>
<CAPTION>
American Century Alger Calvert T. Rowe Price
VP Capital VP American Social Mid Cap
AppreciationInternational Growth Growth Equity Income
<S> <C> <C> <C> <C> <C>
Assets:
Investments at value $ 2,070,260 $ 6,266,914 $50,447,823 $ 4,091,369 $27,120,640
Net assets $ 2,070,260 $ 6,266,914 $50,447,823 $ 4,091,369 $27,120,640
Units outstanding 225,291 464,551 3,129,409 375,729 2,719,225
Accumulation unit value $ 9.19 $ 13.49 $ 16.12 $ 10.89 $ 9.97
</TABLE>
<TABLE>
<CAPTION>
PBHG
Technology &
Growth IICommunications
<S> <C> <C>
Assets:
Investments at value $ 2,071,434 $ 13,015,857
Net assets $ 2,071,434 $ 13,015,857
Units outstanding 185,827 584,750
Accumulation unit value $ 11.15 $ 22.26
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
AUL American Individual Unit Trust
statementS of opERATIONS
For the year ended December 31, 1999
<TABLE>
<CAPTION>
AUL American Series Fund Fidelity
Tactical Asset
Equity Money Market Bond Managed Allocation High Income
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 1,949,136 $ 426,110 $ 367,117 $ 1,279,623 $ 121,519 $ 550,187
Mortality & expense
charges 138,163 115,770 88,413 125,307 57,780 77,165
Net investment
income (loss) 1,810,973 310,340 278,704 1,154,316 63,739 473,022
Gain (loss) on investments:
Net realized gain (loss) 522,698 0 (63,609) 313,554 111,566 (313,235)
Net change in unrealized
appreciation (depreciation)(2,503,880) 0 (389,764) (1,654,334) (343,220) 222,922
Net gain (loss) (1,981,182) 0 (453,373) (1,340,780) (231,654) (90,313)
Increase (decrease) in
net assets from operations$ (170,209)$ 310,340 $ (174,669) $ (186,464) $ (167,915) $ 382,709
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Growth Overseas Asset Manager Index 500 Equity-Income Contrafund
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 2,589,382 $ 85,441 $ 1,531,407 $ 611,264 $ 691,788 $ 853,879
Mortality & expense
charges 360,588 30,319 288,342 549,477 196,631 298,939
Net investment
income (loss) 2,228,794 55,122 1,243,065 61,787 495,157 554,940
Gain (loss) on investments:
Net realized gain (loss) 1,493,369 52,349 347,542 2,652,341 615,178 1,852,683
Net change in unrealized
appreciation (depreciation) 5,478,228 839,894 584,101 4,907,922 (404,345) 2,660,686
Net gain (loss) 6,971,597 892,243 931,643 7,560,263 210,833 4,513,369
Increase (decrease) in
net assets from operations$ 9,200,391 $ 947,365 $ 2,174,708 $ 7,622,050 $ 705,990 $ 5,068,309
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
AUL American Individual Unit Trust
statementS of opERATIONS (continued)
For the year ended December 31, 1999
<TABLE>
<CAPTION>
American Century Alger Calvert T. Rowe Price
VP Capital VP American Social Mid Cap
AppreciationInternational Growth Growth Equity Income
<S> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 0 $ 0 $ 3,678,488 $ 317,538 $ 1,726,664
Mortality & expense
charges 22,543 54,602 517,573 49,360 360,173
Net investment
income (loss) (22,543) (54,602) 3,160,915 268,178 1,366,491
Gain (loss) on investments:
Net realized gain (loss) (15,521) 131,619 2,664,688 167,140 1,331,882
Net change in unrealized
appreciation (depreciation) 912,179 2,349,083 6,044,231 (207,895) (2,103,050)
Net gain (loss) 896,658 2,480,702 8,708,919 (40,755) (771,168)
Increase (decrease) in
net assets from operations$ 874,115 $ 2,426,100 $11,869,834 $ 227,423 $ 595,323
</TABLE>
<TABLE>
<CAPTION>
PBHG
Technology &
Growth IICommunications
<S> <C> <C>
Investment income:
Dividend income $ 0 $ 0
Mortality & expense
charges 12,451 54,228
Net investment
income (loss) (12,451) (54,228)
Gain (loss) on investments:
Net realized gain (loss) 60,238 1,130,910
Net change in unrealized
appreciation (depreciation) 809,043 6,644,999
Net gain (loss) 869,281 7,775,909
Increase (decrease) in
net assets from operations$ 856,830 $ 7,721,681
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
AUL American Individual Unit Trust
statementS of changes in net assets
<TABLE>
<CAPTION>
AUL American Series Fund
Equity Money Market Bond
Year Year Year Year Year Year
ended ended ended ended ended ended
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income
(loss) $ 1,810,973 $ 1,072,995 $ 310,340 $ 229,233 $ 278,704 $ 298,783
Net realized gain (loss) 522,698 759,326 0 0 (63,609) 90,323
Net change in unrealized
appreciation
(depreciation) (2,503,880) (1,286,783) 0 0 (389,764) (57,318)
Increase (decrease)
in net assets from
operations (170,209) 545,538 310,340 229,233 (174,669) 331,788
Contract owner transactions:
Proceeds from units sold 1,135,734 5,025,950 25,892,227 20,723,288 3,358,754 10,302,734
Cost of units redeemed (3,294,461) (2,501,399) (21,947,085) (16,763,377) (3,285,629) (6,632,627)
Increase (decrease) (2,158,727) 2,524,551 3,945,142 3,959,911 73,125 3,670,107
Net increase (decrease) (2,328,936) 3,070,089 4,255,482 4,189,144 (101,544) 4,001,895
Net assets, beginning 12,046,324 8,976,235 9,281,509 5,092,365 6,368,753 2,366,858
Net assets, ending $ 9,717,388 $ 12,046,324 $13,536,991 $ 9,281,509 $ 6,267,209 $ 6,368,753
Units sold 118,150 554,482 21,924,159 18,126,037 499,329 1,558,976
Units redeemed (343,998) (286,064) (18,636,281) (14,673,060) (492,203) (996,361)
Net increase (decrease) (225,848) 268,418 3,287,878 3,452,977 7,126 562,615
Units outstanding, beginning 1,276,705 1,008,287 8,002,381 4,549,404 936,406 373,791
Units outstanding, ending 1,050,857 1,276,705 11,290,259 8,002,381 943,532 936,406
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
AUL American Individual Unit Trust
statementS of changes in net assets (continued)
<TABLE>
<CAPTION>
AUL American Series Fund Fidelity
Managed Tactical Asset Allocation High Income
Year Year Year Year Year Year
ended ended ended ended ended ended
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income
(loss) $ 1,154,316 $ 770,144 $ 63,739 $ 89,965 $ 473,022 $ 442,842
Net realized gain (loss) 313,554 322,951 111,566 97,135 (313,235) (10,308)
Net change in unrealized
appreciation
(depreciation) (1,654,334) (606,150) (343,220) (7,394) 222,922 (917,341)
Increase (decrease)
in net assets from
operations (186,464) 486,945 (167,915) 179,706 382,709 (484,807)
Contract owner transactions:
Proceeds from units sold 1,713,443 4,982,891 482,336 2,234,640 1,775,315 4,401,980
Cost of units redeemed (2,863,360) (1,599,206) (1,573,004) (646,319) (1,810,647) (2,746,498)
Increase (decrease) (1,149,917) 3,383,685 (1,090,668) 1,588,321 (35,332) 1,655,482
Net increase (decrease) (1,336,381) 3,870,630 (1,258,583) 1,768,027 347,377 1,170,675
Net assets, beginning 10,049,172 6,178,542 4,936,774 3,168,747 5,657,466 4,486,791
Net assets, ending $ 8,712,791 $ 10,049,172 $ 3,678,191 $ 4,936,774 $ 6,004,843 $ 5,657,466
Units sold 203,508 611,674 65,902 307,808 230,397 557,621
Units redeemed (342,921) (200,364) (215,647) (91,606) (235,235) (364,514)
Net increase (decrease) (139,413) 411,310 (149,745) 216,202 (4,838) 193,107
Units outstanding, beginning 1,202,411 791,101 675,364 459,162 770,130 577,023
Units outstanding, ending 1,062,998 1,202,411 525,619 675,364 765,292 770,130
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
AUL American Individual Unit Trust
statementS of changes in net assets (continued)
<TABLE>
<CAPTION>
Fidelity
Growth Overseas Asset Manager
Year Year Year Year Year Year
ended ended ended ended ended ended
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income
(loss) $ 2,228,794 $ 1,635,833 $ 55,122 $ 117,270 $ 1,243,065 $ 1,371,514
Net realized gain (loss) 1,493,369 427,538 52,349 79,359 347,542 217,187
Net change in unrealized
appreciation
(depreciation) 5,478,228 3,461,307 839,894 2,162 584,101 471,447
Increase (decrease)
in net assets from
operations 9,200,391 5,524,678 947,365 198,791 2,174,708 2,060,148
Contract owner transactions:
Proceeds from units sold 9,896,185 5,185,245 875,961 756,543 7,085,395 8,266,842
Cost of units redeemed (5,529,443) (1,641,184) (435,824) (830,067) (4,778,014) (2,213,570)
Increase (decrease) 4,366,742 3,544,061 440,137 (73,524) 2,307,381 6,053,272
Net increase (decrease) 13,567,133 9,068,739 1,387,502 125,267 4,482,089 8,113,420
Net assets, beginning 22,005,381 12,936,642 2,074,078 1,948,811 20,143,642 12,030,222
Net assets, ending $ 35,572,514 $ 22,005,381 $ 3,461,580 $ 2,074,078 $24,625,731 $20,143,642
Units sold 696,978 485,596 105,207 104,305 799,887 1,026,078
Units redeemed (368,375) (158,611) (52,662) (117,437) (533,393) (276,830)
Net increase (decrease) 328,603 326,985 52,545 (13,132) 266,494 749,248
Units outstanding, beginning 1,720,027 1,393,042 284,063 297,195 2,330,887 1,581,639
Units outstanding, ending 2,048,630 1,720,027 336,608 284,063 2,597,381 2,330,887
</TABLE>
The accompanying notes are an integral part of the financial statements
9
<PAGE>
AUL American Individual Unit Trust
statementS of changes in net assets (continued)
<TABLE>
<CAPTION>
Fidelity
Index 500 Equity-Income Contrafund
Year Year Year Year Year Year
ended ended ended ended ended ended
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income
(loss) $ 61,787 $ 470,575 $ 495,157 $ 508,667 $ 554,940 $ 514,862
Net realized gain (loss) 2,652,341 1,474,939 615,178 567,528 1,852,683 1,280,300
Net change in unrealized
appreciation
(depreciation) 4,907,922 4,619,318 (404,345) 50,335 2,660,686 2,159,171
Increase (decrease)
in net assets from
operations 7,622,050 6,564,832 705,990 1,126,530 5,068,309 3,954,333
Contract owner transactions:
Proceeds from units sold 15,268,187 13,056,130 3,588,829 5,870,283 9,233,005 7,869,755
Cost of units redeemed (9,437,856) (3,697,910) (3,386,311) (2,760,862) (6,144,229) (4,074,484)
Increase (decrease) 5,830,331 9,358,220 202,518 3,109,421 3,088,776 3,795,271
Net increase (decrease) 13,452,381 15,923,052 908,508 4,235,951 8,157,085 7,749,604
Net assets, beginning 35,777,947 19,854,895 14,360,936 10,124,985 19,352,373 11,602,769
Net assets, ending $ 49,230,328 $ 35,777,947 $15,269,444 $14,360,936 $27,509,458 $19,352,373
Units sold 1,048,649 1,085,169 362,499 649,952 763,384 810,584
Units redeemed (640,606) (310,362) (343,238) (309,770) (493,583) (418,460)
Net increase (decrease) 408,043 774,807 19,261 340,182 269,801 392,124
Units outstanding, beginning 2,611,396 1,836,589 1,527,155 1,186,973 1,702,358 1,310,234
Units outstanding, ending 3,019,439 2,611,396 1,546,416 1,527,155 1,972,159 1,702,358
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
AUL American Individual Unit Trust
statementS of changes in net assets (continued)
<TABLE>
<CAPTION>
American Century Alger
VP Capital Appreciation VP International American Growth
Year Year Year Year Year Year
ended ended ended ended ended ended
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income
(loss) $ (22,543)$ 71,250 $ (54,602) $ 139,856 $ 3,160,915 $ 2,818,316
Net realized gain (loss) (15,521) (101,739) 131,619 162,714 2,664,688 680,021
Net change in unrealized
appreciation
(depreciation) 912,179 (43,514) 2,349,083 122,644 6,044,231 4,762,625
Increase (decrease)
in net assets from
operations 874,115 (74,003) 2,426,100 425,214 11,869,834 8,260,962
Contract owner transactions:
Proceeds from units sold 193,519 1,091,925 802,451 3,269,485 17,308,495 9,575,643
Cost of units redeemed (739,318) (1,106,351) (764,616) (2,526,974) (8,948,808) (2,206,578)
Increase (decrease) (545,799) (14,426) 37,835 742,511 8,359,687 7,369,065
Net increase (decrease) 328,316 (88,429) 2,463,935 1,167,725 20,229,521 15,630,027
Net assets, beginning 1,741,944 1,830,373 3,802,979 2,635,254 30,218,302 14,588,275
Net assets, ending $ 2,070,260 $ 1,741,944 $ 6,266,914 $ 3,802,979 $50,447,823 $30,218,302
Units sold 31,792 190,371 89,166 410,293 1,286,848 954,844
Units redeemed (114,486) (195,062) (81,568) (324,496) (633,352) (227,098)
Net increase (decrease) (82,694) (4,691) 7,598 85,797 653,496 727,746
Units outstanding, beginning 307,985 312,676 456,953 371,156 2,475,913 1,748,167
Units outstanding, ending 225,291 307,985 464,551 456,953 3,129,409 2,475,913
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
AUL American Individual Unit Trust
statementS of changes in net assets (continued)
<TABLE>
<CAPTION>
Calvert T. Rowe Price PBHG
Social Mid Cap Growth Equity Income Growth II
Year Year Year Year Year Year
ended ended ended ended ended ended
12/31/99 12/31/98 12/31/99 12/31/98 12/31/99 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income
(loss) $ 268,178 $ 383,996 $ 1,366,491 $ 1,054,775 $ (12,451) $ (8,979)
Net realized gain (loss) 167,140 74,290 1,331,882 1,282,361 60,238 55,548
Net change in unrealized
appreciation
(depreciation) (207,895) 181,856 (2,103,050) (650,236) 809,043 50,158
Increase (decrease)
in net assets from
operations 227,423 640,142 595,323 1,686,900 856,830 96,727
Contract owner transactions:
Proceeds from units sold 1,053,892 1,432,540 5,732,295 10,967,080 772,820 974,556
Cost of units redeemed (740,238) (383,171) (7,240,898) (4,737,104) (200,596) (950,535)
Increase (decrease) 313,654 1,049,369 (1,508,603) 6,229,976 572,224 24,021
Net increase (decrease) 541,077 1,689,511 (913,280) 7,916,876 1,429,054 120,748
Net assets, beginning 3,550,292 1,860,781 28,033,920 20,117,044 642,380 521,632
Net assets, ending $ 4,091,369 $ 3,550,292 $27,120,640 $28,033,920 $ 2,071,434 $ 642,380
Units sold 104,422 155,941 560,658 1,169,392 97,149 182,804
Units redeemed (73,082) (42,905) (720,387) (516,929) (24,127) (167,880)
Net increase (decrease) 31,340 113,036 (159,729) 652,463 73,022 14,924
Units outstanding, beginning 344,389 231,353 2,878,954 2,226,491 112,805 97,881
Units outstanding, ending 375,729 344,389 2,719,225 2,878,954 185,827 112,805
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
AUL American Individual Unit Trust
statementS of changes in net assets (continued)
<TABLE>
<CAPTION>
PBHG
Technology & Communications
Year Year
ended ended
12/31/99 12/31/98
<S> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income
(loss) $ (54,228) $ (7,324)
Net realized gain (loss) 1,130,910 (41,887)
Net change in unrealized
appreciation
(depreciation) 6,644,999 260,146
Increase (decrease)
in net assets from
operations 7,721,681 210,935
Contract owner transactions:
Proceeds from units sold 6,991,981 901,997
Cost of units redeemed (2,821,442) (394,761)
Increase (decrease) 4,170,539 507,236
Net increase (decrease) 11,892,220 718,171
Net assets, beginning 1,123,637 405,466
Net assets, ending $ 13,015,857 $ 1,123,637
Units sold 643,527 162,751
Units redeemed (225,484) (74,592)
Net increase (decrease) 418,043 88,159
Units outstanding, beginning 166,707 78,548
Units outstanding, ending 584,750 166,707
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
notes to financial statements
1. Summary of Significant Accounting Policies
The AUL American Individual Unit Trust (Variable Account) was established
by American United Life Insurance Company (AUL) on April 14, 1994, under
procedures established by Indiana law and is registered as a unit
investment trust under the Investment Company Act of 1940, as amended. The
Variable Account is a segregated investment account for individual annuity
contracts issued by AUL and invests exclusively in shares of mutual fund
portfolios offered by the AUL American Series Fund, Inc. (AUL American
Series Fund), Fidelity Variable Insurance Products Fund (Equity-Income,
Growth, High Income, Overseas) and Fidelity Variable Insurance Products
Fund II(Asset Manager, Contrafund, Index 500) (Fidelity), American Century
Variable Portfolios, Inc. (American Century), Alger American Fund (Alger),
Calvert Variable Series (Calvert), T. Rowe Price Equity Series, Inc. (T.
Rowe Price), and PBHG Insurance Series Fund, Inc.(PBHG).
Security Valuation Transactions and Related Income
The market value of investments are based on the closing bid prices at
December 31, 1999. Investment transactions are accounted for on the trade
date and dividend income is recorded on the ex-dividend date.
Mortality and Expense Risks Charges
AUL deducts a daily charge as compensation for the mortality and expense
risks assumed by AUL. The charge is equal on an annual basis to 1.25% of
the average daily net assets of each investment account. AUL guarantees
that the mortality and expense charge shall not increase. The charges
incurred during the years ended December 31, 1999 and 1998 were $3,397,824
and $2,291,042, respectively.
Taxes
Operations of the Variable Account are part of, and are taxed with, the
operations of AUL, which is taxed as a life insurance company under the
Internal Revenue Code. Under current law, investment income, including
realized and unrealized capital gains of the investment accounts, is not
taxed to AUL to the extent it is applied to increase reserves under the
contracts. The Variable Account has not been charged for federal and state
income taxes since none have been imposed.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
2. Account Charges
AUL may assess a premium tax charge based on premium taxes incurred.
Premium taxes currently range between 0% and 3.5%, but are subject to
change by governmental entities. AUL deducts an annual administrative
charge from each contract equal to the lesser of 2% of the contract value
or $30. The fee is assessed every year on the contract anniversary date
during the accumulation period but is waived if the contract value exceeds
$50,000 on the contract anniversary date. The charges incurred during the
years ended December 31, 1999 and 1998 were $208,196 and $142,632,
respectively. AUL may assess a withdrawal charge on withdrawals that exceed
12% of the contract value at the time of the first withdrawal in a contract
year. However, the contract owner has a right to a full refund of the
contributions made under the contract for any reason within ten days of
original contract purchase. If a particular state allows a longer free
look period, then such state law will be followed. The amount of the
withdrawal charge depends upon the type of contract and the length of time
the contract has existed, as follows:
Flexible Premium Contract One Year Flexible Premium Contract
Contract Year Withdrawal Charge Contract Year Withdrawal Charge
1 10% 1 7%
2 9% 2 6%
3 8% 3 5%
4 7% 4 4%
5 6% 5 3%
6 5% 6 2%
7 4% 7 1%
8 3% 8 0%
9 2%
10 1%
11 0%
The aggregate withdrawal charges will not exceed 8.5% of the total premiums
paid on a Flexible Premium Contract or 8% of the total premiums paid on a
One Year Flexible Premium Contract.
14
notes to financial statements (continued)
3. Accumulation Unit Value
The change in the Accumulation Unit Value per unit for the year ended
December 31, 1999 is:
12/31/99 12/31/98 Change
AUL American Series Fund:
Equity $ 9.247989 $ 9.435612 (2.0%)
Money Market 1.198719 1.159621 3.4%
Bond 6.641018 6.800043 (2.3%)
Managed 8.196934 8.357465 (1.9%)
Tactical Asset
Allocation 6.997700 7.309123 (4.3%)
Fidelity:
High Income 7.846311 7.346048 6.8%
Growth 17.363923 12.793102 35.7%
Overseas 10.284116 7.301225 40.9%
Asset Manager 9.481331 8.642178 9.7%
Index 500 16.305704 13.700933 19.0%
Equity Income 9.874671 9.403827 5.0%
Contrafund 13.949322 11.367786 22.7%
American Century:
VP Capital
Appreciation 9.192207 5.657448 62.5%
VP International 13.490516 8.327111 62.0%
Alger:
American Growth 16.118835 12.203752 32.1%
Calvert:
Social Mid Cap
Growth 10.888464 10.307229 5.6%
T. Rowe Price:
Equity Income 9.973846 9.737388 2.4%
PBHG:
Growth II 11.146816 5.694833 95.7%
Technology &
Communications 22.256574 6.739634 230.2%
4. Cost of Investments
The cost of investments at December 31, 1999 is:
AUL American Series Fund:
Equity $ 12,066,493
Money Market 13,536,991
Bond 6,758,403
Managed 10,359,861
Tactical Asset
Allocation 3,959,468
Fidelity:
High Income 6,313,274
Growth 24,528,306
Overseas 2,569,322
Asset Manager 22,348,937
Fidelity (continued):
Index 500 $ 36,377,571
Equity Income 14,212,756
Contrafund 20,756,529
American Century:
VP Capital
Appreciation 1,316,461
VP International 3,764,829
Alger:
American Growth 37,314,023
Calvert:
Social Mid Cap
Growth $ 4,003,298
T. Rowe Price:
Equity Income 27,385,522
PBHG:
Growth II 1,230,825
Technology &
Communications 6,163,106
15
<PAGE>
notes to financial statements (continued)
5. Net Assets
Net Assets at December 31, 1999 are:
<TABLE>
<CAPTION>
AUL American Series Fund
Tactical Asset
Equity Money Market Bond Managed Allocation
<S> <C> <C> <C> <C> <C>
Proceeds from units sold $ 13,918,459 $ 93,801,329 $18,126,589 $12,431,904 $ 5,708,247
Cost of units redeemed (6,493,249) (81,051,864) (12,229,054) (5,097,082) (2,387,956)
Net investment income (loss) 3,036,639 787,526 795,753 2,248,167 378,698
Net realized gain (loss) 1,604,644 0 65,115 776,872 260,479
Unrealized appreciation
(depreciation) (2,349,105) 0 (491,194) (1,647,070) (281,277)
$ 9,717,388 $ 13,536,991 $ 6,267,209 $ 8,712,791 $ 3,678,191
</TABLE>
<TABLE>
<CAPTION>
Fidelity
High Income Growth Overseas Asset Manager Index 500
<S> <C> <C> <C> <C> <C>
Proceeds from units sold $ 10,781,002 $ 27,284,443 $ 3,930,780 $26,357,258 $45,733,989
Cost of units redeemed (5,339,710) (9,446,996) (1,824,002) (8,076,917) (14,794,657)
Net investment income (loss) 1,109,642 4,173,824 244,737 3,321,005 620,274
Net realized gain (loss) (237,660) 2,517,035 217,807 747,591 4,817,965
Unrealized appreciation
(depreciation) (308,431) 11,044,208 892,258 2,276,794 12,852,757
$ 6,004,843 $ 35,572,514 $ 3,461,580 $24,625,731 $49,230,328
</TABLE>
<TABLE>
<CAPTION>
Fidelity American Century Alger
VP Capital VP American
Equity-IncomeContrafund Appreciation International Growth
<S> <C> <C> <C> <C> <C>
Proceeds from units sold $ 19,342,401 $ 27,460,402 $ 5,048,914 $ 7,364,266 $40,737,390
Cost of units redeemed (8,137,341) (11,455,001) (3,657,847) (4,246,230) (13,278,525)
Net investment income (loss) 1,542,297 1,136,809 178,669 102,736 5,996,284
Net realized gain (loss) 1,465,399 3,614,319 (253,275) 544,057 3,858,874
Unrealized appreciation
(depreciation) 1,056,688 6,752,929 753,799 2,502,085 13,133,800
$ 15,269,444 $ 27,509,458 $ 2,070,260 $ 6,266,914 $50,447,823
</TABLE>
<TABLE>
<CAPTION>
Calvert T. Rowe Price PBHG
Social Mid Cap Technology &
Growth Equity Income Growth II Communications
<S> <C> <C> <C> <C>
Proceeds from units sold $ 4,303,281 $ 34,482,736 $ 3,222,011 $ 8,547,136
Cost of units redeemed (1,425,771) (13,624,882) (2,082,414) (3,435,254)
Net investment income (loss) 827,334 3,319,528 (23,936) (63,675)
Net realized gain (loss) 298,454 3,208,140 115,164 1,114,899
Unrealized appreciation
(depreciation) 88,071 (264,882) 840,609 6,852,751
$ 4,091,369 $ 27,120,640 $ 2,071,434 $13,015,857
</TABLE>
16
<PAGE>
American United Life Insurance Company
One American Square
P.O. Box 368
Indianapolis, Indiana 46206-0368
www.aul.com
Form 7-13522B (1/00)
Back cover
<PAGE>
