The prospectus containing information for the Wells Fargo Advantage(SM) Variable
Annuity filed electronically in Registrant's Post-Effective Amendment No. 5 to
Registration Statement No. 333-85567 on Form N-4, filed on or about April 27,
2000, is incorporated by reference.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
WELLS FARGO ADVANTAGESM VARIABLE ANNUITY
American Enterprise Variable Annuity Account
May 1, 2000
Revised as of July 21, 2000
American Enterprise Variable Annuity Account is a separate account established
and maintained by American Enterprise Life Insurance Company (American
Enterprise Life).
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained by writing or calling us at the address and telephone number below. The
prospectus is incorporated in this SAI by reference.
American Enterprise Life Insurance Company
829 AXP Financial Center
Minneapolis, MN 55474
1-800-333-3437
<PAGE>
TABLE OF CONTENTS
Performance Information................................................p.3
Calculating Annuity Payouts............................................p.15
Rating Agencies........................................................p.17
Principal Underwriter..................................................p.17
Independent Auditors...................................................p.17
Financial Statements
<PAGE>
PERFORMANCE INFORMATION
------------------------------------------------------------------------------
The subaccounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the subaccounts in
terms of the average annual compounded rate of return of a hypothetical
investment in the contract over a period of one, five and ten years (or, if
less, up to the life of the subaccounts), calculated according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. We show actual performance from the date the
subaccounts began investing in the funds. For some subaccounts, we do not
provide any performance information because they are new and have not had any
activity to date. We also show performance from the commencement date of the
funds as if the contract existed at that time, which it did not. Although we
base performance figures on historical earnings, past performance does not
guarantee future results.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities Without Withdrawal and Selection of
the Five-Year Withdrawal Charge Schedule For Periods Ending Dec. 31, 1999
Performance Since Commencement of the
Fund*
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA4 Blue Chip Advantage Fund (9/99)** --% --% --% 10.79%
WCAR4 Capital Resource Fund (10/81) 21.90 19.54 13.78 14.25
WDEI4 Diversified Equity Income Fund (9/99) -- -- -- 2.36
WEXI4 Extra Income Fund (5/96) 4.65 -- -- 3.93
WFDI4 Federal Income Fund (9/99) -- -- -- 0.02
WNDM4 New Dimensions Fund(R)(5/96) 30.04 -- -- 24.46
WSCA4 Small Cap Advantage Fund (9/99) -- -- -- 12.17
AIM V.I.
WCAP4 Capital Appreciation Fund (5/93) 42.52 23.72 -- 20.50
WVAL4 Value Fund (5/93) 27.99 25.33 -- 21.22
Dreyfus
WSRG4 The Dreyfus Socially Responsible Growth 28.18 26.78 -- 22.36
Fund, Inc. (10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE4 Franklin Income Securities Fund - Class 2 ( -3.55 8.03 8.32 8.29
1/89)***
WRES4 Franklin Real Estate Fund - Class 2 -7.78 6.36 7.37 7.04
(1/89)***
WSMC4 Franklin Small Cap Fund - Class 2 (11/95)*** 103.30 -- -- 31.60
WMSS4 Mutual Shares Securities Fund - Class 2 ( 11.89 -- -- 9.19
11/96)***
GOLDMAN SACHS Variable Insurance Trust (VIT)
WUSE4 CORESM U.S. Equity Fund (2/98)**** 22.46 -- -- 18.93
WGLI4 Global Income Fund (1/98) -2.51 -- -- 2.03
WITO4 Internet Tollkeeper (4/00)+ -- -- -- --
WMCV4 Mid Cap Value Fund (4/98) 4.65 -- -- -6.40
MFS(R)
WGIS4 Growth with Income Series (10/95) 5.09 -- -- 19.28
WUTS4 Utilities Series (1/95) 28.89 -- -- 24.59
PUTNAM VARIABLE TRUST
WIGR4 Putnam VT International Growth Fund - 57.73 -- -- 28.19
Class IB Shares (1/97)++
WVIS4 Putnam VT Vista Fund - Class IB Shares 50.48 -- -- 29.13
(1/97)++
WELLS FARGO VARIABLE TRUST
WAAL4 Asset Allocation Fund (4/94) 7.69 10.83 -- 9.23
WCBD4 Corporate Bond Fund (9/99) -- -- -- -0.64
WEQI4 Equity Income Fund (5/96) 6.29 -- -- 15.41
WEQV4 Equity Value Fund (5/98) -3.95 -- -- -5.19
WEQV4
WGRO4 Growth Fund (4/94) 18.64 21.73 -- 19.42
WLCG4 Large Company Growth Fund (9/99) -- -- -- 19.77
WMMK4 Money Market Fund (5/94) 2.89 3.30 -- 3.25
WSCG4 Small Cap Growth Fund (5/95) 63.90 -- -- 18.82
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.30% mortality and expense risk fee and a
0.15% variable account administrative charge. Premium taxes are not reflected in
the above total returns.
**(Commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999 Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co.
+Fund had not commenced operations as of Dec. 31, 1999.
++Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities With Withdrawal and Selection of the
Five-Year Withdrawal Charge Schedule For Periods Ending Dec. 31, 1999
Performance Since Commencement of the
Fund*
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA4 Blue Chip Advantage Fund (9/99)** --% --% --% 3.13%
WCAR4 Capital Resource Fund (10/81) 13.90 19.34 13.78 14.25
WDEI4 Diversified Equity Income Fund (9/99) -- -- -- -4.63
WEXI4 Extra Income Fund (5/96) -2.53 -- -- 2.95
WFDI4 Federal Income Fund (9/99) -- -- -- -6.78
WNDM4 New Dimensions Fund(R)(5/96) 22.04 -- -- 23.85
WSCA4 Small Cap Advantage Fund (9/99) -- -- -- 4.39
AIM V.I.
WCAP4 Capital Appreciation Fund (5/93) 34.52 23.55 -- 20.50
WVAL4 Value Fund (5/93) 19.99 25.17 -- 21.22
Dreyfus
WSRG4 The Dreyfus Socially Responsible Growth 20.18 26.62 -- 22.36
Fund, Inc. (10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE4 Franklin Income Securities Fund - Class 2 ( -10.07 7.74 8.32 8.29
1/89)***
WRES4 Franklin Real Estate Fund - Class 2 -13.96 6.04 7.37 7.04
(1/89)***
WSMC4 Franklin Small Cap Fund - Class 2 (11/95)*** 95.30 -- -- 31.39
WMSS4 Mutual Shares Securities Fund - Class 2 ( 4.14 -- -- 8.13
11/96)***
GOLDMAN SACHS Variable Insurance Trust (VIT)
WUSE4 CORESM U.S. Equity Fund (2/98)**** 14.46 -- -- 15.22
WGLI4 Global Income Fund (1/98) -9.11 -- -- -1.53
WITO4 Internet Tollkeeper (4/00)+ -- -- -- --
WMCV4 Mid Cap Value Fund (4/98) -2.52 -- -- -10.24
MFS(R)
WGIS4 Growth with Income Series (10/95) -2.11 -- -- 19.01
WUTS4 Utilities Series (1/95) 20.89 -- -- 24.42
PUTNAM VARIABLE TRUST
WIGR4 Putnam VT International Growth Fund - 49.73 -- -- 26.96
Class IB Shares (1/97)++
WVIS4 Putnam VT Vista Fund - Class IB Shares 42.48 -- -- 27.92
(1/97)++
WELLS FARGO VARIABLE TRUST
WAAL4 Asset Allocation Fund (4/94) 0.28 10.56 -- 9.23
WCBD4 Corporate Bond Fund (9/99) -- -- -- -7.39
WEQI4 Equity Income Fund (5/96) -1.01 -- -- 14.65
WEQV4 Equity Value Fund (5/98) -10.44 -- -- -9.05
WGRO4 Growth Fund (4/94) 10.64 21.55 -- 19.42
WLCG4 Large Company Growth Fund (9/99) -- -- -- 11.77
WMMK4 Money Market Fund (5/94) -4.14 2.95 -- 3.25
WSCG4 Small Cap Growth Fund (5/95) 55.90 -- -- 18.59
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.30% mortality and expense risk fee, a 0.15%
variable account administrative charge and applicable withdrawal charges
associated with the five-year withdrawal charge schedule. Premium taxes are not
reflected in the above total returns.
**(Commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999, Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co.
+Fund had not commenced operations as of Dec. 31, 1999.
++Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities Without Withdrawal and Selection of
the Five-Year Withdrawal Charge Schedule and the Optional Enhanced Death Benefit
and Guaranteed Minimum Income Benefit Riders For Periods Ending Dec. 31, 1999
Performance Since Commencement of the
Fund*
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA2 Blue Chip Advantage Fund (9/99)** --% --% --% 10.39%
WCAR2 Capital Resource Fund (10/81) 21.29 19.23 13.21 14.01
WDEI2 Diversified Equity Income Fund (9/99) -- -- -- 1.99
WEXI2 Extra Income Fund (5/96) 4.12 -- -- 3.63
WFDI2 Federal Income Fund (9/99) -- -- -- -0.35
WNDM2 New Dimensions Fund(R)(5/96) 29.39 -- -- 24.11
WSCA2 Small Cap Advantage Fund (9/99) -- -- -- 11.76
AIM V.I.
WCAP2 Capital Appreciation Fund (5/93) 41.81 23.40 -- 20.20
WVAL2 Value Fund (5/93) 27.35 25.01 -- 20.92
Dreyfus
WSRG2 The Dreyfus Socially Responsible Growth 27.55 26.45 -- 22.06
Fund, Inc. (10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE2 Franklin Income Securities Fund - Class 2 ( -4.04 7.75 7.78 8.05
1/89)***
WRES2 Franklin Real Estate Fund - Class 2 -8.27 6.08 6.83 6.79
(1/89)***
WSMC2 Franklin Small Cap Fund - Class 2 (11/95)*** 102.31 -- -- 31.25
WMSS2 Mutual Shares Securities Fund - Class 2 ( 11.34 -- -- 8.87
11/96)***
GOLDMAN SACHS Variable Insurance Trust (VIT)
WUSE2 CORESM U.S. Equity Fund (2/98)**** 21.85 -- -- 18.50
WGLI2 Global Income Fund (1/98) -3.00 -- -- 1.66
WITO2 Internet Tollkeeper (4/00)+ -- -- -- --
WMCV2 Mid Cap Value Fund (4/98) 4.12 -- -- -6.80
MFS(R)
WGIS2 Growth with Income Series (10/95) 4.57 -- -- 18.96
WUTS2 Utilities Series (1/95) 28.25 -- -- 24.27
PUTNAM VARIABLE TRUST
WIGR2 Putnam VT International Growth Fund - 56.95 -- -- 27.81
Class IB Shares (1/97)++
WVIS2 Putnam VT Vista Fund - Class IB Shares 49.73 -- -- 28.75
(1/97)++
WELLS FARGO VARIABLE TRUST
WAAL2 Asset Allocation Fund (4/94) 7.16 10.54 -- 8.95
WCBD2 Corporate Bond Fund (9/99) -- -- -- -1.00
WEQI2 Equity Income Fund (5/96) 5.76 -- -- 15.08
WEQV2 Equity Value Fund (5/98) -4.45 -- -- -5.58
WGRO2 Growth Fund (4/94) 18.05 21.41 -- 19.13
WLCG2 Large Company Growth Fund (9/99) -- -- -- 19.35
WMMK2 Money Market Fund (5/94) 2.38 3.03 -- 2.98
WSCG2 Small Cap Growth Fund (5/95) 63.09 -- -- 18.51
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.30% mortality and expense risk fee, a 0.15%
variable account administrative charge, a 0.20% Enhanced Death Benefit Rider fee
and a 0.30% Guaranteed Minimum Income Benefit Rider fee. Premium taxes are not
reflected in the above total returns.
**(Commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999, Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co.
+Fund had not commenced operations as of Dec. 31, 1999.
++Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities With Withdrawal and Selection of the
Five-Year Withdrawal Charge Schedule and the Optional Enhanced Death Benefit and
Guaranteed Minimum Income Benefit Riders For Periods Ending Dec. 31, 1999
Performance Since Commencement of the
Fund*
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA2 Blue Chip Advantage Fund (9/99)** --% --% --% 2.73%
WCAR2 Capital Resource Fund (10/81) 13.29 19.03 13.21 14.01
WDEI2 Diversified Equity Income Fund (9/99) -- -- -- -5.00
WEXI2 Extra Income Fund (5/96) -3.03 -- -- 2.66
WFDI2 Federal Income Fund (9/99) -- -- -- -7.14
WNDM2 New Dimensions Fund(R)(5/96) 21.39 -- -- 23.50
WSCA2 Small Cap Advantage Fund (9/99) -- -- -- 3.99
AIM V.I.
WCAP2 Capital Appreciation Fund (5/93) 33.81 23.23 -- 20.20
WVAL2 Value Fund (5/93) 19.35 24.84 -- 20.92
Dreyfus
WSRG2 The Dreyfus Socially Responsible Growth 19.55 26.30 -- 22.06
Fund, Inc. (10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE2 Franklin Income Securities Fund - Class 2 ( -10.54 7.45 7.78 8.05
1/89)***
WRES2 Franklin Real Estate Fund - Class 2 -14.43 5.76 6.83 6.79
(1/89)***
WSMC2 Franklin Small Cap Fund - Class 2 (11/95)*** 94.31 -- -- 31.04
WMSS2 Mutual Shares Securities Fund - Class 2 ( 3.60 -- -- 7.80
11/96)***
GOLDMAN SACHS Variable Insurance Trust (VIT)
WUSE2 CORESM U.S. Equity Fund (2/98)**** 13.85 -- -- 14.78
WGLI2 Global Income Fund (1/98) -9.59 -- -- -1.90
WITO2 Internet Tollkeeper (4/00)+ -- -- -- --
WMCV2 Mid Cap Value Fund (4/98) -3.03 -- -- -10.63
MFS(R)
WGIS2 Growth with Income Series (10/95) -2.62 -- -- 18.69
WUTS2 Utilities Series (1/95) 20.25 -- -- 24.10
PUTNAM VARIABLE TRUST
WIGR2 Putnam VT International Growth Fund - 48.95 -- -- 26.57
Class IB Shares (1/97)++
WVIS2 Putnam VT Vista Fund - Class IB Shares 41.73 -- -- 27.53
(1/97)++
WELLS FARGO VARIABLE TRUST
WAAL2 Asset Allocation Fund (4/94) -0.24 10.27 -- 8.95
WCBD2 Corporate Bond Fund (9/99) -- -- -- -7.74
WEQI2 Equity Income Fund (5/96) -1.53 -- -- 14.32
WEQV2 Equity Value Fund (5/98) -10.92 -- -- -9.44
WGRO2 Growth Fund (4/94) 10.05 21.23 -- 19.13
WLCG2 Large Company Growth Fund (9/99) -- -- -- 11.35
WMMK2 Money Market Fund (5/94) -4.64 2.67 -- 2.98
WSCG2 Small Cap Growth Fund (5/95) 55.09 -- -- 18.27
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.30% mortality and expense risk fee, a 0.15%
variable account administrative charge, a 0.20% Enhanced Death Benefit Rider
fee, a 0.30% Guaranteed Minimum Income Benefit Rider fee and applicable
withdrawal charges associated with the five-year withdrawal charge schedule.
Premium taxes are not reflected in the above total returns.
**(Commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999, Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co.
+Fund had not commenced operations as of Dec. 31, 1999.
++Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities Without Withdrawal and Selection of
the Seven-Year Withdrawal Charge Schedule For Periods Ending Dec. 31, 1999
Performance Since Commencement of the
Fund*
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA7 Blue Chip Advantage Fund (9/99)** --% --% --% 10.96%
WCAR7 Capital Resource Fund (10/81) 22.21 19.84 14.07 14.54
WDEI7 Diversified Equity Income Fund (9/99) -- -- -- 2.51
WEXI7 Extra Income Fund (5/96) 4.91 -- -- 4.19
WFDI7 Federal Income Fund (9/99) -- -- -- 0.17
WNDM7 New Dimensions Fund(R)(5/96) 30.36 -- -- 24.77
WSCA7 Small Cap Advantage Fund (9/99) -- -- -- 12.34
AIM V.I.
WCAP7 Capital Appreciation Fund (5/93) 42.88 24.03 -- 20.80
WVAL7 Value Fund (5/93) 28.31 25.65 -- 21.52
Dreyfus
WSRG7 The Dreyfus Socially Responsible Growth 28.49 27.09 -- 22.66
Fund, Inc. (10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE7 Franklin Income Securities Fund - Class 2 -3.33 8.31 8.59 8.56
(1/89)***
WRES7 Franklin Real Estate Fund - Class 2 -7.55 6.62 7.64 7.30
(1/89)***
WSMC7 Franklin Small Cap Fund - Class 2 (11/95)*** 103.80 -- -- 31.93
WMSS7 Mutual Shares Securities Fund - Class 2 12.17 -- -- 9.46
(11/96)***
GOLDMAN SACHS Variable Insurance Trust (VIT)
WUSE7 CORESM U.S. Equity Fund (2/98)**** 22.76 -- -- 19.22
WGLI7 Global Income Fund (1/98) -2.26 -- 2.29
WITO7 Internet Tollkeeper (4/00)+ -- -- -- --
WMCV7 Mid Cap Value Fund (4/98) 4.91 -- -- -6.17
MFS(R)
WGIS7 Growth with Income Series (10/95) 5.36 -- -- 19.58
WUTS7 Utilities Series (1/95) 29.21 -- -- 24.90
PUTNAM VARIABLE TRUST
WIGR7 Putnam VT International Growth Fund - 58.11 -- -- 28.51
Class IB Shares (1/97)++
WVIS7 Putnam VT Vista Fund - Class IB Shares 50.84 -- -- 29.45
(1/97)++
WELLS FARGO VARIABLE TRUST
WAAL7 Asset Allocation Fund (4/94) 7.96 11.10 -- 9.50
WCBD7 Corporate Bond Fund (9/99) -- -- -- -0.57
WEQI7 Equity Income Fund (5/96) 6.55 -- -- 15.69
WEQV7 Equity Value Fund (5/98) -3.71 -- -- -4.95
WGRO7 Growth Fund (4/94) 18.93 22.03 -- 19.72
WLCG7 Large Company Growth Fund (9/99) -- -- -- 19.85
WMMK7 Money Market Fund (5/94) 3.15 3.56 -- 3.51
WSCG7 Small Cap Growth Fund (5/95) 64.29 -- -- 19.12
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.05% mortality and expense risk fee and a
0.15% variable account administrative charge. Premium taxes are not reflected in
the above total returns.
**(Commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999, Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co.
+Fund had not commenced operations as of Dec. 31, 1999.
++Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities With Withdrawal and Selection of the
Seven-Year Withdrawal Charge Schedule For Periods Ending Dec. 31, 1999
Performance Since Commencement of the
Fund*
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA7 Blue Chip Advantage Fund (9/99)** --% --% --% 3.29%
WCAR7 Capital Resource Fund (10/81) 14.21 19.35 14.07 14.54
WDEI7 Diversified Equity Income Fund (9/99) -- -- -- -4.49
WEXI7 Extra Income Fund (5/96) -2.29 -- -- 2.71
WFDI7 Federal Income Fund (9/99) -- -- -- -6.64
WNDM7 New Dimensions Fund(R)(5/96) 22.36 -- -- 23.86
WSCA7 Small Cap Advantage Fund (9/99) -- -- -- 4.55
AIM V.I.
WCAP7 Capital Appreciation Fund (5/93) 34.88 23.60 -- 20.70
WVAL7 Value Fund (5/93) 20.31 25.24 -- 21.42
Dreyfus
WSRG7 The Dreyfus Socially Responsible Growth 20.49 26.70 -- 22.55
Fund, Inc. (10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE7 Franklin Income Securities Fund - Class 2 ( -9.84 7.57 8.59 8.56
1/89)***
WRES7 Franklin Real Estate Fund - Class 2 -13.75 5.84 7.64 7.30
(1/89)***
WSMC7 Franklin Small Cap Fund - Class 2 95.80 -- -- 31.41
(1/1/95)***
WMSS7 Mutual Shares Securities Fund - Class 2 ( 4.40 -- -- 7.87
11/96)***
GOLDMAN SACHS Variable Insurance Trust (VIT)
WUSE7 CORESM U.S. Equity Fund (2/98)**** 14.76 -- -- 15.52
WGLI7 Global Income Fund (1/98) -8.88 -- -- -1.29
WITO7 Internet Tollkeeper (4/00)+ -- -- -- --
WMCV7 Mid Cap Value Fund (4/98) -2.28 -- -- -10.02
MFS(R)
WGIS7 Growth with Income Series (10/95) -1.87 -- -- 18.91
WUTS7 Utilities Series (1/95) 21.21 -- -- 24.48
PUTNAM VARIABLE TRUST
WIGR7 Putnam VT International Growth Fund - 50.11 -- -- 27.08
Class IB Shares (1/97)++
WVIS7 Putnam VT Vista Fund - Class IB Shares 42.84 -- -- 28.04
(1/97)++
WELLS FARGO VARIABLE TRUST
WAAL7 Asset Allocation Fund (4/94) 0.53 10.44 -- 9.04
WCBD7 Corporate Bond Fund (9/99) -- -- -- -7.32
WEQI7 Equity Income Fund (5/96) -0.77 -- -- 14.56
WEQV7 Equity Value Fund (5/98) -10.22 -- -- -8.82
WGRO7 Growth Fund (4/94) 10.93 21.57 -- 19.42
WLCG7 Large Company Growth Fund (9/99) -- -- -- 11.85
WMMK7 Money Market Fund (5/94) -3.91 2.68 -- 2.89
WSCG7 Small Cap Growth Fund (5/95) 56.29 -- -- 18.54
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.05% mortality and expense risk fee, a 0.15%
variable account administrative charge and applicable withdrawal charges
associated with the seven-year withdrawal charge schedule. Premium taxes are not
reflected in the above total returns.
**(Commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999, Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co. +Fund had not commenced
operations as of Dec. 31, 1999.
++Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities Without Withdrawal and Selection of
the Seven-Year Withdrawal Charge Schedule and the Optional Enhanced Death
Benefit and Guaranteed Minimum Income Benefit Riders For Periods Ending Dec. 31,
1999
Performance Since
Commencement Performance Since
of the Subaccount Commencement of the Fund*
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA5 Blue Chip Advantage Fund ( --/--; --% --% --% --% --% 10.81%
9/99)**
ECR Capital Resource Fund (2/95; 10/81) 21.96 18.97 21.96 19.55 13.76 14.22
WDEI5 Diversified Equity Income Fund -- -- -- -- -- 2.37
(--/--; 9/99)
EIA Extra Income Fund (8/99; 5/96) -- 0.36 4.28 -- -- 3.87
WFDI5 Federal Income Fund (--/--; 9/99) -- -- -- -- -- 0.04
EGD New Dimensions Fund(R)(10/97; 5/96) 30.10 28.33 30.10 -- -- 24.50
WSCA5 Small Cap Advantage Fund (--/--; 9/99) -- -- -- -- -- 12.18
AIM V.I.
ECA Capital Appreciation Fund (8/99; 5/93) -- 32.97 42.56 23.78 -- 20.56
EVA Value Fund (10/97; 5/93) 28.03 28.33 28.03 25.36 -- 21.22
Dreyfus
ESR The Dreyfus Socially Responsible -- 14.82 28.22 26.84 -- 22.42
Growth Fund, Inc. (8/99; 10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE5 Franklin Income Securities Fund - -- -- -3.50 8.09 8.38 8.35
Class 2
(--/--; 1/89)***
ERE Franklin Real Estate Fund - Class 2 -- -0.50 -7.72 6.41 7.42 7.08
(9/99; 1/89)***
WSMC5 Franklin Small Cap Fund - Class 2 -- -- 103.40 -- -- 31.67
(--/--; 11/95)***
EMU Mutual Shares Securities Fund - Class -- 8.50 11.95 -- -- 9.24
2
(9/99; 11/96)***
GOLDMAN SACHS Variable Insurance Trust
(VIT)
JUS CORESM U.S. Equity Fund (9/99; -- 12.43 22.51 -- -- 18.98
2/98)****
JGL Global Income Fund (9/99; 1/98) -- 0.09 -2.46 -- -- 2.08
WITO5 Internet Tollkeeper (--/--; 4/00)+ -- -- -- -- -- --
JMC Mid Cap Value Fund (--/--; 4/98) -- -- 4.70 -- -- -6.36
MFS(R)
WGIS5 Growth with Income Series (--/--; -- -- 5.15 -- -- 19.34
10/95)
EUT Utilities Series (9/99; 1/95) -- 21.18 28.93 -- -- 24.65
PUTNAM VARIABLE TRUST
EPL Putnam VT International Growth Fund - -- 36.35 57.89 -- -- 28.28
Class IB Shares (9/99; 1/97)++
EPT Putnam VT Vista Fund - Class IB -- 35.90 50.52 -- -- 29.19
Shares
(8/99; 1/97)++
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.05% mortality and expense risk fee, a 0.15%
variable account administrative charge, a 0.20% Enhanced Death Benefit Rider fee
and a 0.30% Guaranteed Minimum Income Benefit Rider fee. Premium taxes are not
reflected in the above total returns.
**(Commencement date of the subaccount;commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999, Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co.
+Fund had not commenced operations as of Dec. 31, 1999.
++Each of the above Funds'Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities Without Withdrawal and Selection of
the Seven-Year Withdrawal Charge Schedule and the Optional Enhanced Death
Benefit and Guaranteed Minimum Income Benefit Riders For Periods Ending Dec. 31,
1999 (continued)
Performance Since
Commencement Performance Since
of the Subaccount Commencement of the Fund*
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
WELLS FARGO VARIABLE TRUST
WAAL5 Asset Allocation Fund (--/--;4/94)** --% --% 7.75% 10.88% --% 9.28%
WCBD5 Corporate Bond Fund (--/--;9/99) -- -- -- -- -- -0.62
WEQI5 Equity Income Fund (--/--;5/96) -- -- 6.35 -- -- 15.46
WEQV5 Equity Value Fund (--/--;5/98) -- -- -3.91 -- -- -5.14
WGRO5 Growth Fund (--/--;4/94) -- -- 18.69 21.79 -- 19.48
WLCG5 Large Company Growth Fund (--/--;9/99) -- -- -- -- -- 19.79
WMMK5 Money Market Fund (--/--;5/94) -- -- 2.94 3.36 -- 3.30
WSCG5 Small Cap Growth Fund (--/--;5/95) -- -- 63.98 -- -- 18.88
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.05% mortality and expense risk fee, a 0.15%
variable account administrative charge, a 0.20% Enhanced Death Benefit Rider fee
and a 0.30% Guaranteed Minimum Income Benefit Rider fee. Premium taxes are not
reflected in the above total returns.
**(Commencement date of the subaccount; commencement date of the Fund)
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities With Withdrawal and Selection of the
Seven-Year Withdrawal Charge Schedule and the Optional Enhanced Death Benefit
and Guaranteed Minimum Income Benefit Riders For Periods Ending Dec. 31, 1999
Performance Since
Commencement Performance Since
of the Subaccount Commencement of the Fund*
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AXPSM VARIABLE PORTFOLIO -
WBCA5 Blue Chip Advantage Fund ( --/--; --% --% --% --% --% 3.15%
9/99)**
ECR Capital Resource Fund (2/95; 10/81) 13.96 18.97 21.96 19.55 13.76 14.22
WDEI5 Diversified Equity Income Fund -- -- -- -- -- -4.62
(--/--; 9/99)
EIA Extra Income Fund (8/99; 5/96) -- -6.41 -2.86 -- -- 2.40
WFDI5 Federal Income Fund (--/--; 9/99) -- -- -- -- -- -6.77
EGD New Dimensions Fund(R)(10/97; 5/96) 22.10 25.96 22.10 -- -- 23.58
WSCA5 Small Cap Advantage Fund (--/--; 9/99) -- -- -- -- -- 4.41
AIM V.I.
ECA Capital Appreciation Fund (8/99; 5/93) -- 25.04 34.56 23.35 -- 20.45
EVA Value Fund (10/97; 5/93) 20.03 25.96 20.03 24.95 -- 21.12
Dreyfus
ESR The Dreyfus Socially Responsible -- 6.89 20.22 26.45 -- 20.30
Growth Fund, Inc. (8/99; 10/93)
FRANKLIN TEMPLETON VIP TRUST
WISE5 Franklin Income Securities Fund - -- -- -10.02 7.35 8.38 8.35
Class 2
(--/--; 1/89)***
ERE Franklin Real Estate Fund - Class 2 -- -7.20 -13.91 5.62 7.42 7.08
(9/99;1/89)***
WSMC5 Franklin Small Cap Fund - Class 2 -- -- 95.40 -- -- 31.14
(--/--;11/95)***
EMU Mutual Shares Securities Fund - Class -- 1.08 4.19 -- -- 7.65
2
(9/99; 11/96)***
GOLDMAN SACHS Variable Insurance Trust
(VIT)
JUS CORESM U.S. Equity Fund (9/99; -- 4.70 14.51 -- -- 15.28
2/98)****
JGL Global Income Fund (9/99; 1/98) -- -6.65 -9.06 -- -- -1.48
WITO5 Internet Tollkeeper (--/--; 4/00)+ -- -- -- -- --
JMC Mid Cap Value Fund (--/--; 4/98) -- -- -2.47 -- -- -10.20
MFS(R)
WGIS5 Growth with Income Series (--/--; -- -- -2.07 -- -- 18.67
10/95)
EUT Utilities Series (9/99; 1/95) -- 13.25 20.93 -- -- 24.23
PUTNAM VARIABLE TRUST
EPL Putnam VT International Growth Fund - -- 28.42 49.89 -- -- 26.84
Class IB Shares (9/99; 1/97)++
EPT Putnam VT Vista Fund - Class IB -- 27.97 42.52 -- -- 27.77
Shares
(8/99; 1/97)++
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.05% mortality and expense risk fee, a 0.15%
variable account administrative charge, a 0.20% Enhanced Death Benefit Rider
fee, a 0.30% Guaranteed Minimum Income Benefit Rider fee and applicable
withdrawal charges associated with the seven-year withdrawal charge schedule.
Premium taxes are not reflected in the above total returns.
**(Commencement date of the subaccount; commencement date of the Fund)
***Class 2 shares were issued Jan. 6, 1999. Prior to Jan. 6, 1999, Class 2
performance represents the historical performance results of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
reflect Class 2's additional 12b-1 fee expense, which also affects all future
performance. Figures assume reinvestment of dividends and capital gains.
****CORESM is a service mark of Goldman, Sachs & Co.
+Fund had not commenced operations as of Dec. 31, 1999.
++Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to the inception dates of the Funds' Class IB Shares,
the performance shown is based on the historical performance of the Funds' Class
IA Shares adjusted to reflect the current expenses of the Funds' Class IB
Shares, including a 12b-1 fee of 0.15%.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Annuities With Withdrawal and Selection of the
Seven-Year Withdrawal Charge Schedule and the Optional Enhanced Death Benefit
and Guaranteed Minimum Income Benefit Riders For Periods Ending Dec. 31, 1999
(continued)
Performance Since
Commencement Performance Since
of the Subaccount Commencement of the Fund*
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------------ ------ ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
WELLS FARGO VARIABLE TRUST
WAAL5 Asset Allocation Fund (--/--;4/94)** --% --% 0.33% 10.21% --% 8.82%
WCBD5 Corporate Bond Fund (--/--;9/99) -- -- -- -- -- -7.37
WEQI5 Equity Income Fund (--/--;5/96) -- -- -0.97 -- -- 14.33
WEQV5 Equity Value Fund (--/--;5/98) -- -- -10.39 -- -- -9.00
WGRO5 Growth Fund (--/--;4/94) -- -- 10.69 21.33 -- 19.18
WLCG5 Large Company Growth Fund (--/--;9/99) -- -- -- -- -- 11.79
WMMK5 Money Market Fund (--/--;5/94) -- -- -4.10 2.46 -- 2.68
WSCG5 Small Cap Growth Fund (--/--;5/95) -- -- 55.98 -- -- 18.30
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 1.05% mortality and expense risk fee, a 0.15%
variable account administrative charge, a 0.20% Enhanced Death Benefit Rider
fee, a 0.30% Guaranteed Minimum Income Benefit Rider fee and applicable
withdrawal charges associated with the seven-year withdrawal charge schedule.
Premium taxes are not reflected in the above total returns.
**(Commencement date of the subaccount; commencement date of the Fund)
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in the value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute cumulative total return by using the following formula:
ERV - P
---------
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period, at the
end of the period (or fractional portion thereof)
Total return figures reflect the deduction of the withdrawal charge which
assumes you withdraw the entire contract value at the end of the one, five and
ten year periods (or, if less, up to the life of the subaccount). We also may
show performance figures without the deduction of a withdrawal charge. In
addition, total return figures reflect the deduction of all other applicable
charges including the contract administrative charge, the variable account
administrative charge, the Enhanced Death Benefit Rider fee, the Guaranteed
Minimum Income Benefit Rider fee and the mortality and expense risk fee.
Calculation of Yield for Subaccounts Investing in Money Market Funds
Annualized Simple Yield
For the subaccounts investing in money market funds, we base quotations of
simple yield on:
(a) the change in the value of a hypothetical subaccount (exclusive
of capital changes and income other than investment income) at
the beginning of a particular seven-day period:
(b) less, a pro rata share of the subaccount expenses accrued over
the period;
(c) dividing this difference by the value of the subaccount at the
beginning of the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The subaccount's value includes:
o any declared dividends;
o the value of any shares purchased with dividends paid during the
period; and o any dividends declared for such shares.
It does not include:
o the effect of any applicable withdrawal charge, or
o any realized or unrealized gains or losses.
Annualized Compound Yield
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1)365/7] - 1
You must consider (when comparing an investment in subaccounts investing in
money market funds with fixed annuities) that fixed annuities often provide an
agreed-to or guaranteed yield for a stated period of time, whereas the
subaccount's yield fluctuates. In comparing the yield of the subaccount to a
money market fund, you should consider the different services that the contract
provides.
<PAGE>
Annualized Yield for Subaccounts Investing in Income Funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units outstanding
during the period that were entitled to receive dividends
d = the maximum offering price per accumulation unit on the
last day of the period
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which it invests and from dividends declared and paid by the fund,
which are automatically invested in shares of the fund.
Annualized Yield Based on the 30-Day Period Ended Dec. 31, 1999
Subaccount Investing In Yield
---------- ------------- -----
EIA AXPSMVariable Portfolio - Extra Income Fund 15.35%
The yield on the subaccount's accumulation unit may fluctuate daily and does not
provide a basis for determining future yields.
Independent rating or statistical services or publishers or publications such as
those listed below may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare.
The Bank Rate Monitor National Index, Barron's, Business Week, CDA
Technologies, Donoghue's Money Market Fund Report, Financial Services
Week, Financial Times, Financial World, Forbes, Fortune, Global
Investor, Institutional Investor, Investor's Business Daily,
Kiplinger's Personal Finance, Lipper Analytical Services, Money,
Morningstar, Mutual Fund Forecaster, Newsweek, The New York Times,
Personal Investor, Stanger Report, Sylvia Porter's Personal Finance,
USA Today, U.S. News & World Report, The Wall Street Journal and
Wiesenberger Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
The Variable Account
We do the following calculations separately for each of the subaccounts of the
variable account. The separate monthly payouts, added together, make up your
total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your contract on the valuation date; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
The annuity table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as described below.
<PAGE>
Annuity Units: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date. The number of units
in your subaccount is fixed. The value of the units fluctuates with the
performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date; by
o the fixed number of annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each subaccount. To
calculate later values we multiply the last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor.
The purpose of the neutralizing factor is to offset the effect of the assumed
rate built into the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor:
We determine the net investment factor by:
o adding the fund's current net asset value per share, plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee, the variable account administrative charge and the Enhanced Death
Benefit Rider fee (if selected) from the result.
Because the net asset value of the fund may fluctuate, the net investment factor
may be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable subaccount.
The One-Year Fixed Account
We guarantee your fixed annuity payout amounts. Once calculated, your payout
will remain the same and never change. To calculate your annuity payouts we:
o take the value of your one-year fixed account at the retirement date or the
date you selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your contract.
<PAGE>
RATING AGENCIES
The following chart reflects the ratings given to us by independent rating
agencies. These agencies evaluate the financial soundness and claims-paying
ability of insurance companies based on a number of different factors. This
information does not relate to the management or performance of the subaccounts
of the contract. This information relates only to our general account and
reflects our ability to make annuity payouts and to pay death benefits and other
distributions from the contract.
Rating Agency Rating
--------------- -------------
A.M. Best A+ (Superior)
Duff & Phelps AAA
Moody's Aa2 (Excellent)
A.M. Best's superior rating reflects our strong distribution network, favorable
overall balance sheet, consistently improving profitability, adequate level of
capitalization and asset/liability management expertise.
Duff & Phelps rating reflects our consistently excellent profitability record,
leadership position in chosen markets, stable operating leverage and effective
use of asset/liability management techniques.
Moody's excellent rating reflects our leadership position in financial planning,
strong asset, liability management and good capitalization. American Enterprise
Life has a strong market focus and greatly emphasizes quality service. This
information applies only to fixed products invested in American Enterprise
Life's General Account and reflects American Enterprise Life's ability to
fulfill its obligations under its contracts. This information does not relate to
the management and performance of the separate account assets associated with
American Enterprise Life's variable products.
PRINCIPAL UNDERWRITER
The principal underwriter for the contract is American Express Financial
Advisors Inc. (AEFA) which offers the contract on a continuous basis.
The contract is new and, therefore, we have not received any withdrawal charges
or paid any commissions.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402)
independent auditors, as stated in their report appearing herein.
FINANCIAL STATEMENTS
<PAGE>
American Enterprise Variable Annuity Account - Wells Fargo Advantage(SM)
Variable Annuity
Annual Financial Information
Report of Independent Auditors
The Board of Directors
American Enterprise Life Insurance Company
We have audited the individual and combined statements of net assets of the
segregated asset subaccounts of American Enterprise Variable Annuity Account
(comprised of subaccounts ECR, EIA, EGD, ECA, EVA, ESR, ERE, EMU, JUS, JGL, JMC,
EUT, EPL and EPT) as of December 31, 1999, and the related statements of
operations and the statements of changes in net assets for each of the periods
indicated therein. These financial statements are the responsibility of the
management of American Enterprise Life Insurance Company. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 securities owned at December 31, 1999 with
the affiliated and unaffiliated mutual fund managers. 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 referred to above present fairly, in
all material respects, the individual and combined financial position of the
segregated asset subaccounts of American Enterprise Variable Annuity Account (as
described above) at December 31, 1999, and the individual and combined results
of their operations and the changes in their net assets for the periods
indicated therein, in conformity with accounting principles generally accepted
in the United States.
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 17, 2000
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets ECR EIA EGD
Investments in shares of mutual funds and portfolios:
<S> <C> <C> <C>
at cost $ 10,984,992 $ 6,759 $ 2,802,524
------------ ------- -----------
at market value $ 13,632,953 $ 6,752 $ 3,689,151
Dividends receivable -- 1,078 --
Accounts receivable from American Enterprise Life
for contract purchase payments 27,305 -- --
Receivable from mutual funds and portfolios for share redemptions -- -- --
------ ---- --------
Total assets 13,660,258 7,830 3,689,151
========== ===== =========
Liabilities
Payable to American Enterprise Life for:
Mortality and expense risk fee 14,364 93 3,694
Issue and adminstrative fee 1,724 11 443
Contract terminations -- -- 401
Payable to mutual funds and portfolios for investments purchased -- -- --
---- ---- ---
Total liabilities 16,088 104 4,538
------ --- -----
Net assets applicable to contracts in accumulation period 13,637,782 7,726 3,684,613
Net assets applicable to contracts in payment period 6,388 -- --
----- ----- --------
Total net assets $ 13,644,170 $ 7,726 $ 3,684,613
============ ======= ===========
Accumulation units outstanding 5,864,252 7,716 2,140,748
========= ===== =========
Net asset value per accumulation unit $ 2.33 $ 1.00 $ 1.72
====== ====== ======
Assets ECA EVA
Investments in shares of mutual funds and portfolios:
at cost $ 71,183 $ 8,003,320
-------- -----------
at market value $ 80,940 $ 9,698,008
Dividends receivable -- --
Accounts receivable from American Enterprise Life
for contract purchase payments -- --
Receivable from mutual funds and portfolios for share redemptions 70 27,675
-- ------
Total assets 81,010 9,725,683
====== =========
Liabilities
Payable to American Enterprise Life for:
Mortality and expense risk fee 63 10,001
Issue and adminstrative fee 7 1,200
Contract terminations -- 16,474
Payable to mutual funds and portfolios for investments purchased -- --
------ -------
Total liabilities 70 27,675
-- ------
Net assets applicable to contracts in accumulation period 80,940 9,698,008
Net assets applicable to contracts in payment period -- --
------ -------
Total net assets $ 80,940 $ 9,698,008
======== ===========
Accumulation units outstanding 56,612 5,637,595
====== =========
Net asset value per accumulation unit $ 1.43 $ 1.72
====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets ESR ERE EMU
Investments in shares of mutual funds and portfolios:
<S> <C> <C> <C>
at cost $ 149,389 $ 867 $ 31,535
--------- ----- --------
at market value $ 151,441 $ 859 $ 32,322
Dividends receivable -- -- --
Accounts receivable from American Enterprise Life
for contract purchase payments -- -- 52
Receivable from mutual funds and portfolios for share redemptions 68 1 18
-- - --
Total assets 151,509 860 32,392
======= === ======
Liabilities
Payable to American Enterprise Life for:
Mortality and expense risk fee 61 1 16
Issue and adminstrative fee 7 -- 2
Contract terminations -- -- --
Payable to mutual funds and portfolios for investments purchased -- -- 52
------ ------- --
Total liabilities 68 1 70
-- - --
Net assets applicable to contracts in accumulation period 151,441 859 32,322
Net assets applicable to contracts in payment period -- -- --
------ ----- ------
Total net assets $ 151,441 $ 859 $ 32,322
========= ===== ========
Accumulation units outstanding 123,239 889 30,888
======= === ======
Net asset value per accumulation unit $ 1.23 $ 0.97 $ 1.05
====== ====== ======
Assets JUS JGL
Investments in shares of mutual funds and portfolios:
at cost $ 515,769 $ 34,464
--------- --------
at market value $ 539,763 $ 33,287
Dividends receivable -- --
Accounts receivable from American Enterprise Life
for contract purchase payments -- --
Receivable from mutual funds and portfolios for share redemptions 429 38
--- --
Total assets 540,192 33,325
======= ======
Liabilities
Payable to American Enterprise Life for:
Mortality and expense risk fee 383 34
Issue and adminstrative fee 46 4
Contract terminations -- --
Payable to mutual funds and portfolios for investments purchased -- --
---- -----
Total liabilities 429 38
--- --
Net assets applicable to contracts in accumulation period 539,763 33,287
Net assets applicable to contracts in payment period -- --
------ -----
Total net assets $ 539,763 $ 33,287
========= ========
Accumulation units outstanding 480,470 34,328
======= ======
Net asset value per accumulation unit $ 1.12 $ 0.97
====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Net Assets
December 31, 1999
Segregated Asset Subaccounts
Assets JMC EUT EPL
Investments in shares of mutual funds and portfolios:
<S> <C> <C> <C>
at cost $ 75,738 $ 34,419 $ 421,932
-------- -------- ---------
at market value $ 77,095 $ 36,290 $ 461,834
Dividends receivable -- -- --
Accounts receivable from American Enterprise Life
for contract purchase payments -- -- 3
Receivable from mutual funds and portfolios for share redemptions 87 25 322
-- -- ---
Total assets 77,182 36,315 462,159
====== ====== =======
Liabilities
Payable to American Enterprise Life for:
Mortality and expense risk fee 78 22 288
Issue and adminstrative fee 9 3 34
Contract terminations -- -- --
Payable to mutual funds and portfolios for investments purchased -- -- 3
----- ---- -
Total liabilities 87 25 325
-- -- ---
Net assets applicable to contracts in accumulation period 77,095 36,290 461,834
Net assets applicable to contracts in payment period -- -- --
------ ----- -----
Total net assets $ 77,095 $ 36,290 $ 461,834
======== ======== =========
Accumulation units outstanding 78,800 30,180 346,626
====== ====== =======
Net asset value per accumulation unit $ 0.98 $ 1.20 $ 1.33
====== ====== ======
See accompanying notes to financial statements.
Combined
Variable
Assets EPT Account
Investments in shares of mutual funds and portfolios:
at cost $ 1,137 $ 23,134,028
------- ------------
at market value $ 1,414 $ 28,442,109
Dividends receivable -- 1,078
Accounts receivable from American Enterprise Life
for contract purchase payments -- 27,360
Receivable from mutual funds and portfolios for share redemptions 2 28,735
- ------
Total assets 1,416 28,499,282
===== ==========
Liabilities
Payable to American Enterprise Life for:
Mortality and expense risk fee 2 29,100
Issue and adminstrative fee -- 3,490
Contract terminations -- 16,875
Payable to mutual funds and portfolios for investments purchased -- 55
----- --
Total liabilities 2 49,520
- ------
Net assets applicable to contracts in accumulation period 1,414 28,443,374
Net assets applicable to contracts in payment period -- 6,388
----- -----
Total net assets $ 1,414 $ 28,449,762
======= ============
Accumulation units outstanding 955
===
Net asset value per accumulation unit $ 1.48
======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Operations
Period ended December 31, 1999
Segregated Asset Subaccounts
Investment income ECR EIA1 EGD
<S> <C> <C> <C>
Dividend income from mutual funds and portfolios $ 1,220,605 $ 1,149 $ 32,955
----------- ------- --------
Expenses:
Mortality and expense risk fee 140,485 103 29,409
Administrative charge 16,857 12 3,529
------ -- -----
Total expenses 157,342 115 32,938
------- --- ------
Investment income (loss) - net 1,063,263 1,034 17
========= ===== ==
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 775,040 351,891 141,571
Cost of investments sold 641,397 352,546 116,987
------- ------- -------
Net realized gain (loss) on investments 133,643 (655) 24,584
Net change in unrealized appreciation or depreciation of investments 1,170,550 (7) 694,325
--------- -- -------
Net gain (loss) on investments 1,304,193 (662) 718,909
--------- ---- -------
Net increase (decrease) in net assets resulting from operations $ 2,367,456 $ 372 $ 718,926
=========== ===== =========
Investment income ECA1 EVA
Dividend income from mutual funds and portfolios $ 1,195 $ 154,339
------- ---------
Expenses:
Mortality and expense risk fee 105 67,218
Administrative charge 12 8,066
-- -----
Total expenses 117 75,284
--- ------
Investment income (loss) - net 1,078 79,055
===== ======
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 175 136,790
Cost of investments sold 157 119,888
--- -------
Net realized gain (loss) on investments 18 16,902
Net change in unrealized appreciation or depreciation of investments 9,757 1,432,915
----- ---------
Net gain (loss) on investments 9,775 1,449,817
----- ---------
Net increase (decrease) in net assets resulting from operations $ 10,853 $ 1,528,872
======== ===========
1For the period Aug. 26, 1999 (commencement of operations) to Dec. 31, 1999.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Operations
Period ended December 31, 1999
Segregated Asset Subaccounts
Investment income ESR1 ERE2 EMU2
<S> <C> <C> <C>
Dividend income from mutual funds and portfolios $ 4,928 $-- $--
------- - -
Expenses:
Mortality and expense risk fee 65 3 18
Administrative charge 7 -- 2
- -
Total expenses 72 3 20
-- - --
Investment income (loss) - net 4,856 (3) (20)
===== == ===
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 71 3 28
Cost of investments sold 70 3 28
-- - --
Net realized gain (loss) on investments 1 -- --
Net change in unrealized appreciation or depreciation of investments 2,052 (8) 787
----- -- ---
Net gain (loss) on investments 2,053 (8) 787
----- -- ---
Net increase (decrease) in net assets resulting from operations $ 6,909 $ (11) $ 767
======= ===== =====
Investment income JUS2 JGL2
Dividend income from mutual funds and portfolios $ 4,261 $ 1,258
------- -------
Expenses:
Mortality and expense risk fee 514 60
Administrative charge 62 7
-- -
Total expenses 576 67
--- --
Investment income (loss) - net 3,685 1,191
===== =====
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 36,031 65,197
Cost of investments sold 34,985 65,023
------ ------
Net realized gain (loss) on investments 1,046 174
Net change in unrealized appreciation or depreciation of investments 23,994 (1,177)
------ ------
Net gain (loss) on investments 25,040 (1,003)
------ ------
Net increase (decrease) in net assets resulting from operations $ 28,725 $ 188
======== =====
1For the period Aug. 26, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 22, 1999 (commencement of operations) to Dec. 31, 1999.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Operations
Period ended December 31, 1999
Segregated Asset Subaccounts
Investment income JMC1 EUT2 EPL2
<S> <C> <C> <C>
Dividend income from mutual funds and portfolios $ 586 $-- $--
----- - -
Expenses:
Mortality and expense risk fee 158 28 563
Administrative charge 19 3 68
-- - --
Total expenses 177 31 631
--- -- ---
Investment income (loss) - net 409 (31) (631)
=== === ====
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 3,237 31 183,965
Cost of investments sold 3,254 30 155,333
----- -- -------
Net realized gain (loss) on investments (17) 1 28,632
Net change in unrealized appreciation or depreciation of investments 1,357 1,871 39,902
----- ----- ------
Net gain (loss) on investments 1,340 1,872 68,534
----- ----- ------
Net increase (decrease) in net assets resulting from operations $ 1,749 $ 1,841 $ 67,903
======= ======= ========
Combined
Variable
Investment income EPT3 Account
Dividend income from mutual funds and portfolios $ 103 $ 1,421,379
----- -----------
Expenses:
Mortality and expense risk fee 7 238,736
Administrative charge -- 28,644
------
Total expenses 7 267,380
- -------
Investment income (loss) - net 96 1,153,999
== =========
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in
mutual funds and portfolios:
Proceeds from sales 6 1,694,036
Cost of investments sold 5 1,489,706
- ---------
Net realized gain (loss) on investments 1 204,330
Net change in unrealized appreciation or depreciation of investments 277 3,376,595
Net gain (loss) on investments 278 3,580,925
--- ---------
Net increase (decrease) in net assets resulting from operations $ 374 $ 4,734,924
===== ===========
1For the period Oct. 4, 1999 (commencement of operations) to Dec.31,1999.
2For the period Sept. 22, 1999 (commencement of operations) to Dec. 31, 1999.
3For the period Aug. 26, 1999 (commencement of operations) to Dec. 31, 1999.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Changes in Net Assets
Period ended December 31, 1999
Segregated Asset Subaccounts
Operations ECR EIA1 EGD
<S> <C> <C> <C>
Investment income (loss) - net $ 1,063,263 $ 1,034 $ 17
Net realized gain (loss) on investments 133,643 (655) 24,584
Net change in unrealized appreciation or
depreciation of investments 1,170,550 (7) 694,325
--------- -- -------
Net increase (decrease) in net assets resulting from operations 2,367,456 372 718,926
========= === =======
Contract transactions
Contract purchase payments 1,613,826 5,191 1,253,933
Net transfers2 889,541 2,163 409,913
Annuity payments (473) -- --
Contract terminations:
Surrender benefits and contract charges (978,721) -- (132,862)
Death benefits (92,582) -- (30,780)
------- -------
Increase (decrease) from contract transactions 1,431,591 7,354 1,500,204
--------- ----- ---------
Net assets at beginning of year 9,845,123 -- 1,465,483
--------- ---------
Net assets at end of year $ 13,644,170 $ 7,726 $ 3,684,613
============ ======= ===========
Accumulation unit activity
Units outstanding at beginning of year 5,163,185 -- 1,108,323
Contract purchase payments 806,674 5,303 882,440
Net transfers2 436,406 2,413 288,019
Contract terminations:
Surrender benefits and contract charges (490,112) -- (117,217)
Death benefits (51,901) -- (20,817)
------- -------
Units outstanding at end of year 5,864,252 7,716 2,140,748
========= ===== =========
Operations ECA1 EVA
Investment income (loss) - net $ 1,078 $ 79,055
Net realized gain (loss) on investments 18 16,902
Net change in unrealized appreciation or
depreciation of investments 9,757 1,432,915
----- ---------
Net increase (decrease) in net assets resulting from operations 10,853 1,528,872
====== =========
Contract transactions
Contract purchase payments 63,183 3,650,384
Net transfers2 6,962 2,416,621
Annuity payments -- --
Contract terminations:
Surrender benefits and contract charges (58) (259,654)
Death benefits -- (27,190)
-------
Increase (decrease) from contract transactions 70,087 5,780,161
------ ---------
Net assets at beginning of year -- 2,388,975
---------
Net assets at end of year $ 80,940 $ 9,698,008
======== ===========
Accumulation unit activity
Units outstanding at beginning of year -- 1,778,901
Contract purchase payments 51,342 2,548,626
Net transfers2 5,312 1,606,765
Contract terminations:
Surrender benefits and contract charges (42) (278,884)
Death benefits -- (17,813)
-------
Units outstanding at end of year 56,612 5,637,595
====== =========
1For the period Aug. 26, 1999 (commencement of operations) to Dec. 31, 1999.
2Includes transfer activity from (to) other subaccounts and transfers from (to)
American Enterprise Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Changes in Net Assets
Period ended December 31, 1999
Segregated Asset Subaccounts
Operations ESR1 ERE2 EMU2
<S> <C> <C> <C>
Investment income (loss) - net $ 4,856 $ (3) $ (20)
Net realized gain (loss) on investments 1 -- --
Net change in unrealized appreciation or depreciation of investments 2,052 (8) 787
----- -- ---
Net increase (decrease) in net assets resulting from operations 6,909 (11) 767
===== === ===
Contract transactions
Contract purchase payments 143,947 870 1,178
Net transfers3 585 -- 30,377
Annuity payments -- -- --
Contract terminations:
Surrender benefits and contract charges -- -- --
Death benefits -- -- --
----- ---- ----
Increase (decrease) from contract transactions 144,532 870 31,555
------- --- ------
Net assets at beginning of year -- -- --
------- --- ------
Net assets at end of year $ 151,441 $ 859 $ 32,322
========= ===== ========
Accumulation unit activity
Units outstanding at beginning of year -- -- --
Contract purchase payments 119,943 889 1,194
Net transfers3 3,296 -- 29,694
Contract terminations:
Surrender benefits and contract charges -- -- --
Death benefits -- -- --
----- ---- -----
Units outstanding at end of year 123,239 889 30,888
======= === ======
Operations JUS2 JGL2
Investment income (loss) - net $ 3,685 $ 1,191
Net realized gain (loss) on investments 1,046 174
Net change in unrealized appreciation or depreciation of investments 23,994 (1,177)
------ ------
Net increase (decrease) in net assets resulting from operations 28,725 188
====== ===
Contract transactions
Contract purchase payments 401,524 21,346
Net transfers3 109,571 11,753
Annuity payments -- --
Contract terminations:
Surrender benefits and contract charges (57) --
Death benefits -- --
------ ------
Increase (decrease) from contract transactions 511,038 33,099
------- ------
Net assets at beginning of year -- --
------- -----
Net assets at end of year $ 539,763 $ 33,287
========= ========
Accumulation unit activity
Units outstanding at beginning of year -- --
Contract purchase payments 376,243 22,245
Net transfers3 104,278 12,083
Contract terminations:
Surrender benefits and contract charges (51) --
Death benefits -- --
----- ------
Units outstanding at end of year 480,470 34,328
======= ======
1For the period Aug. 26, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 22, 1999 (commencement of operations) to Dec. 31, 1999.
3Includes transfer activity from (to) other subaccounts and transfers from (to)
American Enterprise Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account -- Wells Fargo Advantage(SM) Variable Annuity
Statements of Changes in Net Assets
Period ended December 31, 1999
Segregated Asset Subaccounts
Operations JMC1 EUT2 EPL2
<S> <C> <C> <C>
Investment income (loss) - net $ 409 $ (31) $ (631)
Net realized gain (loss) on investments (17) 1 28,632
Net change in unrealized appreciation or depreciation of investments 1,357 1,871 39,902
----- ----- ------
Net increase (decrease) in net assets resulting from operations 1,749 1,841 67,903
===== ===== ======
Contract transactions
Contract purchase payments 37,916 22,501 70,121
Net transfers4 37,430 12,005 323,810
Annuity payments -- -- --
Contract terminations:
Surrender benefits and contract charges -- (57) --
Death benefits -- -- --
----- ------ -------
Increase (decrease) from contract transactions 75,346 34,449 393,931
------ ------ -------
Net assets at beginning of year -- -- --
------ ------ ------
Net assets at end of year $ 77,095 $ 36,290 $ 461,834
======== ======== =========
Accumulation unit activity
Units outstanding at beginning of year -- -- --
Contract purchase payments 39,952 19,749 61,197
Net transfers4 38,848 10,479 285,429
Contract terminations:
Surrender benefits and contract charges -- (48) --
Death benefits -- -- --
----- ----- ------
Units outstanding at end of year 78,800 30,180 346,626
====== ====== =======
Combined
Variable
Operations EPT3 Account
Investment income (loss) - net $ 96 $ 1,153,999
Net realized gain (loss) on investments 1 204,330
Net change in unrealized appreciation or depreciation of investments 277 3,376,595
--- ---------
Net increase (decrease) in net assets resulting from operations 374 4,734,924
=== =========
Contract transactions
Contract purchase payments 1,040 7,286,960
Net transfers4 -- 4,250,731
Annuity payments -- (473)
Contract terminations:
Surrender benefits and contract charges -- (1,371,409)
Death benefits -- (150,552)
--------
Increase (decrease) from contract transactions 1,040 10,015,257
----- ----------
Net assets at beginning of year -- 13,699,581
----------
Net assets at end of year $ 1,414 $ 28,449,762
======= ============
Accumulation unit activity
Units outstanding at beginning of year --
Contract purchase payments 955
Net transfers4 --
Contract terminations:
Surrender benefits and contract charges --
Death benefits --
-----
Units outstanding at end of year 955
===
1For the period Oct. 4, 1999 (commencement of operations) to Dec. 31, 1999.
2For the period Sept. 22, 1999 (commencement of operations) to Dec. 31, 1999.
3For the period Aug. 26, 1999 (commencement of operations) to Dec. 31, 1999.
4Includes transfer activity from (to) other subaccounts and transfers from (to)
American Enterprise Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account
Statements of Changes in Net Assets
Year ended December 31, 1998
Segregated Asset Subaccounts Combined
Variable
Operations ECR EGD EVA Account
<S> <C> <C> <C> <C>
Investment income (loss) - net $598,178 $ (4,574) $ 90,940 $ 90,940
Net realized gain (loss) on investments 31,856 758 478 478
Net change in unrealized appreciation or
depreciation of investments 957,259 190,924 262,764 262,764
------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations 1,587,293 187,108 354,182 354,182
========= ======= ======= =======
Contract transactions
Contract purchase payments 3,114,006 1,111,110 1,616,894 1,616,894
Net transfers1 (245,243) 126,930 381,890 381,890
Annuity payments (385) -- -- --
Contract terminations:
Surrender benefits and contract charges (529,563) (25,802) (25,796) (25,796)
Death benefits (21,950) (5,911) (5,952) (5,952)
------- ------ ------ ------
Increase (decrease) from contract transactions 2,316,865 1,206,327 1,967,036 1,967,036
--------- --------- --------- ---------
Net assets at beginning of year 5,940,965 72,048 67,757 67,757
--------- ------ ------ ------
Net assets at end of year $9,845,123 $1,465,483 $2,388,975 $ 2,388,975
========== ========== ========== ===========
Accumulation unit activity
Units outstanding at beginning of year 3,812,754 68,572 65,875
Contracts purchase payments 1,848,700 965,321 1,418,576
Net transfers1 (146,994) 108,613 327,920
Contract terminations:
Surrender benefits and contract charges (338,414) (29,255) (28,544)
Death benefits (12,861) (4,928) (4,926)
------- ------ ------
Units outstanding at end of year 5,163,185 1,108,323 1,778,901
========= ========= =========
1 Includes transfer activity from (to) other subaccounts and transfers from
(to) American Enterprise Life's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account - Wells Fargo Advantage(SM)
Variable Annuity
Notes to Financial Statements
1. ORGANIZATION
American Enterprise Variable Annuity Account (the Account) was established under
Indiana law on July 15, 1987 and the subaccounts are registered together as a
single unit investment trust of American Enterprise Life Insurance Company
(American Enterprise Life) under the Investment Company Act of 1940, as amended
(the 1940 Act). Operations of the Account commenced on Feb. 21, 1995.
The Account is comprised of various subaccounts. Each subaccount invests
exclusively in shares of the following mutual funds (collectively, the Funds),
which are registered under the 1940 Act as diversified, open-end management
investment companies and have the following investment managers.
Subaccount Invests exclusively in shares of Investment Manager
<S> <C> <C>
ECR AXP(SM) Variable Portfolio-- Capital Resource Fund IDS Life Insurance Company 1
EIA AXP(SM) Variable Portfolio-- Extra Income Fund IDS Life Insurance Company 1
EGD AXP(SM) Variable Portfolio-- New Dimensions Fund(R) IDS Life Insurance Company 1
ECA AIM V.I. Capital Appreciation Fund A I M Advisors, Inc.
EVA AIM V.I. Value Fund A I M Advisors, Inc.
ESR The Dreyfus Socially Responsible Growth Fund, Inc. The Dreyfus Corporation2
ERE FTVIPT Franklin Real Estate Securities Fund - Class 2 Franklin Advisers, Inc.
EMU FTVIPT Mutual Shares Securities Fund - Class 2 Franklin Advisers, Inc.
JUS Goldman Sachs VIT Core(SM) U.S. Equity Fund Goldman Sachs Asset Management
JGL Goldman Sachs VIT Global Income Fund Goldman Sachs Asset Management International
JMC Goldman Sachs VIT Mid Cap Value Fund Goldman Sachs Asset Management
EUT MFS(R)Utilities Series Massachusetts Financial Services Company (MFS) Investment
Management(R)
EPL Putnam VT International Growth Fund - Class IB Shares Putnam Investment Management, Inc.
EPT Putnam VT Vista Fund - Class IB Shares Putnam Investment Management, Inc.
1 American Express Financial Corporation (AEFC) is the investment advisor.
2 NCM Capital Management Group, Inc. is the sub-investment advisor.
The assets of each subaccount of the Account are not chargeable with liabilities
arising out of the business conducted by any other segregated asset account or
by American Enterprise Life.
American Enterprise Life issues the contracts that are distributed by banks and
financial institutions either directly or through a network of third-party
marketers.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments in the Funds
Investments in shares of the Funds are stated at market value which is the net
asset value per share as determined by the respective Funds. Investment
transactions are accounted for on the date the shares are purchased and sold.
The cost of investments sold and redeemed is determined on the average cost
method. Dividend distributions received from the Funds are reinvested in
additional shares of the Funds and are recorded as income by the subaccounts on
the ex-dividend date.
Unrealized appreciation or depreciation of investments in the accompanying
financial statements represents the subaccounts' share of the Funds'
undistributed net investment income, undistributed realized gain or loss and the
unrealized appreciation or depreciation on their investment securities.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from those estimates.
Federal Income Taxes
American Enterprise Life is taxed as a life insurance company. The Account is
treated as part of American Enterprise Life for federal income tax purposes.
Under existing federal income tax law, no income taxes are payable with respect
to any investment income of the Account.
3. MORTALITY AND EXPENSE RISK FEE
American Enterprise Life makes contractual assurances to the Account that
possible future adverse changes in administrative expenses and mortality
experience of the contract owners and annuitants will not affect the Account.
The mortality and expense risk fee paid to American Enterprise Life is computed
daily and is equal, on an annual basis, to either 1.05% or 1.30% of the average
daily net assets of the subaccounts, depending on the death benefit option that
applies to the contract.
4. ADMINISTRATIVE CHARGE
American Enterprise Life deducts a daily charge equal, on an annual basis, to
0.15% of the average daily net assets of each subaccount as an administrative
charge. This charge covers certain administrative and operating expenses of the
subaccounts incurred by American Enterprise Life such as accounting, legal and
data processing fees, and expenses involved in the preparation and distribution
of reports and prospectuses. This charge cannot be increased.
5. CONTRACT ADMINISTRATIVE CHARGE
American Enterprise Life deducts a contract administrative charge of $30 per
year on each contract anniversary. This charge cannot be increased and does not
apply after annuity payouts begin. American Enterprise Life does not expect to
profit from this charge. This charge reimburses American Enterprise Life for
expenses incurred in establishing and maintaining the annuity records. This
charge is waived when the contract value is $50,000 or more on the current
contract anniversary. The $30 annual charge is deducted at the time of any full
surrender.
6. WITHDRAWAL CHARGE
American Enterprise Life will use a withdrawal charge to help it recover certain
expenses relating to the sale of the annuity. The withdrawal charge is deducted
for withdrawals up to the first five or seven payment years following a purchase
payment, depending on the withdrawal charge schedule selected at the time of
application. Charges by American Enterprise Life for withdrawals are not
identified on an individual segregated asset account basis. Charges for all
segregated asset accounts amounted to $479,554 in 1999 and $199,062 in 1998.
Such charges are not treated as a separate expense of the subaccounts. They are
ultimately deducted from contract withdrawal benefits paid by American
Enterprise Life. This charge is waived if the withdrawal meets certain
provisions as stated in the contract.
7. INVESTMENT IN SHARES
The subaccounts' investment in shares of the Funds as of Dec. 31, 1999 were as follows:
Subaccount Investment Shares NAV
<S> <C> <C> <C>
ECR AXP(SM) Variable Portfolio-- Capital Resource Fund 374,575 $36.40
EIA AXP(SM) Variable Portfolio-- Extra Income Fund 787 8.58
EGD AXP(SM) Variable Portfolio-- New Dimensions Fund(R) 161,401 22.86
ECA AIM V.I. Capital Appreciation Fund 2,275 35.58
EVA AIM V.I. Value Fund 289,489 33.50
ESR The Dreyfus Socially Responsible Growth Fund, Inc. 3,876 39.07
ERE FTVIPT Franklin Real Estate Securities Fund - Class 2 58 14.88
EMU FTVIPT Mutual Shares Securities Fund - Class 2 2,439 13.25
JUS Goldman Sachs VIT Core(SM) U.S. Equity Fund 38,610 13.98
JGL Goldman Sachs VIT Global Income Fund 3,386 9.83
JMC Goldman Sachs VIT Mid Cap Value Fund 9,156 8.42
EUT MFS(R)Utilities Series 1,502 24.16
EPL Putnam VT International Growth Fund - Class IB Shares 21,361 21.62
EPT Putnam VT Vista Fund - Class IB Shares 68 20.65
8. INVESTMENT TRANSACTIONS
The subaccounts' purchases of Funds' shares, including reinvestment of dividend
distributions, were as follows:
Year ended Dec. 31,
Subaccount Investment 1999 1998
<S> <C> <C> <C>
ECR AXP(SM) Variable Portfolio-- Capital Resource Fund $3,258,677 $ 3,205,569
EIA1 AXP(SM) Variable Portfolio-- Extra Income Fund 359,305 --
EGD AXP(SM) Variable Portfolio-- New Dimensions Fund(R) 1,646,330 1,222,554
ECA1 AIM V.I. Capital Appreciation Fund 71,340 --
EVA AIM V.I. Value Fund 5,993,303 2,077,208
ESR1 The Dreyfus Socially Responsible Growth Fund, Inc. 149,459 --
ERE2 FTVIPT Franklin Real Estate Securities Fund - Class 2 870 --
EMU2 FTVIPT Mutual Shares Securities Fund - Class 2 31,563 --
JUS2 Goldman Sachs VIT Core(SM) U.S. Equity Fund 550,754 --
JGL2 Goldman Sachs VIT Global Income Fund 99,487 --
JMC3 Goldman Sachs VIT Mid Cap Value Fund 78,992 --
EUT2 MFS(R)Utilities Series 34,449 --
EPL2 Putnam VT International Growth Fund - Class IB Shares 577,265 --
EPT1 Putnam VT Vista Fund - Class IB Shares 1,142 --
Combined Variable Account $12,852,936 $6,505,331
1 Operations commenced on Aug. 26, 1999.
2 Operations commenced on Sept. 22, 1999.
3 Operations commenced on Oct. 4, 1999.
9. YEAR 2000 (UNAUDITED)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of American Enterprise Life
and the Account. All of the major systems used by the American Enterprise Life
and by the Account are maintained by AEFC and are utilized by multiple
subsidiaries and affiliates of AEFC. American Enterprise Life's and the
Account's businesses are heavily dependent upon AEFC's computer systems and have
significant interactions with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to American Enterprise Life and the Account, was
conducted to identify the major systems that could be affected by the Year 2000
issue. Steps were taken to resolve potential problems including modification to
existing software and the purchase of new software. As of Dec. 31, 1999, AEFC
had completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. As of Dec. 31, 1999, AEFC
had also completed an evaluation of the Year 2000 readiness of other third
parties whose system failures could have an impact on American Enterprise Life's
and the Account's operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. As of Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on American Enterprise Life's and
the Account's business, results of operations, or financial condition as a
result of the Year 2000 issue.
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