<PAGE>
Evergreen
Variable Annuity Trust
Annual Report
December 31, 1999
[MUTUAL FUND SERVICE AWARD SEAL]
[LOGO OF EVERGREEN FUNDS]
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Table of Contents
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Letter to Shareholders..................................................... 1
Evergreen VA Equity Index Fund
Fund at a Glance........................................................ 2
Portfolio Manager Interview............................................. 3
Evergreen VA Fund
Fund at a Glance........................................................ 5
Portfolio Manager Interview............................................. 6
Evergreen VA Foundation Fund
Fund at a Glance........................................................ 8
Portfolio Manager Interview............................................. 9
Evergreen VA Global Leaders Fund
Fund at a Glance........................................................ 12
Portfolio Manager Interview............................................. 13
Evergreen VA Growth and Income Fund
Fund at a Glance........................................................ 16
Portfolio Manager Interview............................................. 17
Evergreen VA International Growth Fund
Fund at a Glance........................................................ 19
Portfolio Manager Interview............................................. 20
Evergreen VA Masters Fund
Fund at a Glance........................................................ 22
Portfolio Manager Interview............................................. 23
Evergreen VA Omega Fund
Fund at a Glance........................................................ 29
Portfolio Manager Interview............................................. 30
Evergreen VA Small Cap Value Fund
Fund at a Glance........................................................ 32
Portfolio Manager Interview............................................. 33
Evergreen VA Special Equity Fund
Fund at a Glance........................................................ 35
Portfolio Manager Interview............................................. 36
Evergreen VA Strategic Income Fund
Fund at a Glance........................................................ 38
Portfolio Manager Interview............................................. 39
Financial Highlights
Evergreen VA Equity Index Fund............................................. 42
Evergreen VA Fund.......................................................... 42
Evergreen VA Foundation Fund............................................... 43
Evergreen VA Global Leaders Fund........................................... 43
Evergreen VA Growth and Income Fund........................................ 44
Evergreen VA International Growth Fund..................................... 44
Evergreen VA Masters Fund.................................................. 45
Evergreen VA Omega Fund.................................................... 45
Evergreen VA Small Cap Value Fund.......................................... 46
Evergreen VA Special Equity Fund........................................... 46
Evergreen VA Strategic Income Fund......................................... 47
Schedules of Investments
Evergreen VA Equity Index Fund............................................. 48
Evergreen VA Fund.......................................................... 55
Evergreen VA Foundation Fund............................................... 58
Evergreen VA Global Leaders Fund........................................... 61
Evergreen VA Growth and Income Fund........................................ 63
Evergreen VA International Growth Fund..................................... 66
Evergreen VA Masters Fund.................................................. 70
Evergreen VA Omega Fund.................................................... 76
Evergreen VA Small Cap Value Fund.......................................... 78
Evergreen VA Special Equity Fund........................................... 80
Evergreen VA Strategic Income Fund......................................... 83
Statements of Assets and Liabilities....................................... 85
Statements of Operations................................................... 87
Statements of Changes in Net Assets........................................ 89
Combined Notes to Financial Statements..................................... 93
Independent Auditors' Report............................................... 101
Additional Information..................................................... 102
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Letter to Shareholders
----------------------
February 2000
[PHOTO]
William M. Ennis
President and CEO
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Variable Annuity Trust annual report,
which covers the twelve-month period ended December 31, 1999.
Uncertainty Over Interest Rates Influences the Markets
Although the U.S. economy is in the ninth year of economic expansion, many
believe that valuation levels in some sectors of the stock market are just not
sustainable. The S&P 500 continued to advance in the first half of 1999,
dominated by the performance of a very small group of large-cap stocks. By the
third quarter of 1999, rising interest rates dampened performance of stocks
across the board. Investors' inflation fears and continued doubts about the
ability of U.S. companies to sustain significant growth in earnings prompted a
sell-off late in the year.
The Federal Reserve Bank's "tightening bias" leads many to anticipate further
interest rate increases in order to stem even the slightest inflationary
pressure. Additional interest hikes would likely have a negative effect on stock
prices, which could restrain consumer spending; however, many investors are
waiting for just such a scenario to take place, so they can take advantage of
lower stock prices as a buying opportunity.
We believe that the economy is still fundamentally strong, and that inflation
will stay contained, producing only moderate upward pressure on interest rates.
We remain cautiously optimistic about the prospects for continued growth in the
markets.
Website Enhancements
Please visit our enhanced website, evergreen-funds.com, for more information
about Evergreen Funds. The site offers an array of helpful information including
1999 tax information, an investment education center, interactive calculators to
assist your investment planning and general information about Evergreen Funds.
We believe that sound investing is about taking steps to meet your long-term
financial needs and goals. We remind you to take advantage of your financial
advisor's expertise to develop and refine a financial plan that will enable you
to meet your objectives. Evergreen Funds offers a broad mix of stock, bond and
money market funds that should make it simple for you to choose the most
appropriate for your portfolio.
We would like to thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
1
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen Va Equity Index Fund
Fund at a Glance as of December 31, 1999
"We use sophisticated, quantitative tools to minimize transaction costs and
other fund expenses, and employ sampling techniques to minimize the variation in
returns between the Fund and the Index."
Portfolio
Management
----------------------
[PHOTO]
Eric M. Teal
Tenure: September 1999
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Performance and Returns/1/
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Portfolio Inception Date: 9/29/1999
Return Since Portfolio Inception 15.47%
YTD income dividends per share $0.03
YTD capital gain distributions per share $0.03
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LONG TERM GROWTH
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[GRAPH]
VA Equity Index Fund CPI S&P 500
9/30/99 10,000 10,000 10,000
10/31/99 10,604 10,018 10,633
11/30/99 10,803 10,024 10,849
12/31/99 11,547 10,030 11,488
Comparison of a $10,000 investment in Evergreen VA Equity Index Fund/1/ versus a
similar investment in the Standard & Poor's 500 Index (S&P 500) and the Consumer
Price Index (CPI).
The S&P 500 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund fees.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
/1/ Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
2
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Equity Index Fund was launched on September 29, 1999, and closed
its first period on December 31, 1999. During that time, the Fund posted a
strong performance, generating a return of 15.47% compared to a 14.88% return
for the Standard & Poor's 500 Index (S&P 500), the Fund's benchmark, for the
same period. The S&P 500's impressive returns have made it a difficult benchmark
to surpass by actively managed funds, particularly with the narrow leadership
that drove returns in 1999.
The Fund's objective is to achieve price and yield performance similar to the
S&P 500 and is structured with 496 of the 500 stocks that comprise the Index. We
use sophisticated, quantitative tools to minimize transaction costs and other
fund expenses, and employ sampling techniques to minimize the variation in
returns between the Fund and the Index. With its cash position hedged with S&P
500 futures, the Fund is fully invested at all times. We rebalance the Fund
daily to ensure consistency with the S&P 500 Index.
Portfolio
Characteristics
---------------
(As of 12/31/1999)
Total Net Assets $18,685,435
Number of Holdings 496
Beta 1.10
P/E Ratio 26.6x
What was the investment environment like during the period?
Despite narrow leadership in its stocks, the S&P 500 turned in a strong
performance in 1999, rising 21.04% for the year. Technology issues, which
comprise almost 30% of the Index, led the way with an 85.6% gain in 1999, 48.2%
of which came in the fourth quarter. Funding from investors poured into the
sector, enhancing growth prospects and strengthening corporate balance sheets.
Heavy merger and acquisition activity also pushed prices higher.
We look forward to ongoing opportunity in S&P 500 stocks. We expect merger and
acquisition activity to continue to provide new companies in the S&P 500 and the
Fund. Also, rich in some of the fastest-growing technology companies available
for investment, we believe many of these mid-capitalization companies will
migrate to larger capitalization indices within the next year.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Information Services & Technology 18.1%
Healthcare Products & Services 8.7%
Finance & Insurance 7.7%
Retailing & Wholesale 5.9%
Utilities-Telephone 5.8%
3
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Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Microsoft Corp. 4.5%
General Electric Co. 3.8%
Cisco Systems, Inc. 2.6%
Wal-Mart Stores, Inc. 2.3%
Intel Corp. 2.1%
Exxon Mobil Corp. 2.0%
Lucent Technologies, Inc. 1.8%
International Business Machines Corp. 1.5%
Citigroup, Inc. 1.4%
Oracle Systems Corp. 1.3%
What is your outlook?
In our opinion, the steep rise in prices has caused some of the S&P 500
companies to become fully, to overvalued. We think the S&P 500 can still perform
well, though, because of the strength and value that many other companies in the
S&P 500 demonstrate. The S&P 500, and consequently, the Fund are currently
well-balanced in both growth and value companies.
In our opinion, the ability to replicate the S&P 500 remains the key ingredient
to tapping the full potential of the S&P 500 Index, thus making VA Equity Index
Fund an excellent alternative for investors seeking potential returns from
mid-capitalization companies.
4
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen Va Fund
Fund at a Glance as of December 31, 1999
One of the hallmarks of our effort is to manage funds with good risk-return
records."
Portfolio
Management
--------------------
[PHOTO]
Jean C. Ledford, CFA
Tenure: August 1999
[PHOTO]
Richard S. Welsh
Tenure: August 1999
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Performance and Returns/1/
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Portfolio Inception Date: 3/1/1996
Average Annual Returns
1 year 23.03%
3 year 21.56%
Since Portfolio Inception 20.78%
12-month income dividends per share $0.11
12-month capital gain distributions per share $1.34
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LONG TERM GROWTH
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[GRAPH]
VA Evergreen CPI S&P 500 Russell
Mar-96 10,000 10,000 10,000 10,000
12/31/96 11,486 10,239 11,782 11,310
12/31/97 15,753 10,413 15,712 13,838
12/31/98 16,769 10,581 20,202 13,486
12/31/99 20,631 10,872 24,455 16,308
Comparison of a $10,000 investment in Evergreen VA Fund/1/ versus a similar
investment in the Standard & Poor's 500 Index (S&P 500), the Russell 2000 Index
(Russell 2000), and the Consumer Price Index (CPI).
The S&P 500 and the Russell 2000 are unmanaged market indices which do not
include transaction costs associated with buying and selling securities nor any
mutual fund fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
/1/ Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
5
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Fund had a total return of 23.03% for the twelve-month period ended
December 31, 1999, outperforming the new benchmark, the Standard & Poor's 500
Index, which returned 21.04%, as well as the Fund's former benchmark, the
Russell 2000 Index, which returned 21.26%.
Portfolio
Characteristics
---------------
(As of 12/31/1999)
Total Net Assets $69,774,050
Number of Holdings 129
Beta 1.02
P/E Ratio 74.9x
What was the investment environment like during the period?
The present management team took responsibility for the Fund in August, and
began restructuring the portfolio by lowering the Fund's emphasis on financial
industry stocks and increasing the weightings in technology and consumer,
non-durable goods. We also reduced the number of holdings in the Fund, raised
the average company size of our holdings, and lowered the cash position in the
Fund to 2.8% of net assets.
These changes helped the Fund's performance improve significantly in the fourth
quarter of 1999. Six months ago, the Fund was underweighted in technology. We
raised that weighting substantially, focusing primarily on industry-leading
companies. At the end of the fiscal year, six of the top ten holdings were in
technology: Microsoft, Cisco Systems, Intel Corp., Sun Microsystems, Lucent
Technologies and Dell Computer.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Information Services & Technology 22.5%
Healthcare Products & Services 9.5%
Communication Systems & Services 7.3%
Finance & Insurance 7.2%
Retailing & Wholesale 6.6%
Several representative investments underscore the types of companies that we
have emphasized: Wal-Mart Stores, Exxon Mobil, Oracle Systems and Sun
Microsystems.
Wal-Mart, which comprised more than 2% of net assets at the end of the fiscal
year, is the world's largest retailer and now has expanded into eight non-U.S.
markets. We expect that by the end of 2001, Wal-Mart's foreign retailing
business alone will be larger than the business of any domestic retailer other
than Wal-Mart itself. The company now has over 3,000 Wal-Mart, Sam's Clubs and
Supercenter Stores. Supercenter Stores, which combine both retail and grocery
stores to provide one-stop shopping for consumers, are anticipated to provide
strong growth for the company. We expect Wal-Mart's business to grow by 20% this
year.
Exxon Mobil Corp, now the world's dominant energy company, is benefiting from a
strong world economy and an environment of rising oil prices. We expect its
earnings to also rise by almost 20% this year. The company is rapidly reducing
costs as it merges the formerly separate Exxon and Mobil company operations, and
it has a significant ownership in the promising deepwater oil fields off West
Africa.
In technology, we added to the Fund's existing position in Sun Microsystems,
whose core business in computers is growing even as it is expanding into new
areas linking computers and telecommunications. A newer position in technology
is Oracle Systems, which has one of the largest database platforms on the
internet. Its business is growing from the expansion of business-to-business
commerce on the internet.
6
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Portfolio Manager Interview
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Microsoft Corp. 5.1%
General Electric Co. 4.9%
Cisco Systems, Inc. 3.1%
Intel Corp. 3.0%
Sun Microsystems, Inc. 2.9%
Wal-Mart Stores, Inc. 2.5%
Exxon Mobil Corp. 2.3%
Merck & Co., Inc. 2.0%
Lucent Technologies, Inc. 1.9%
Dell Computer Corp. 1.7%
Portfolio Team and Strategy
We have a six-member team with a depth of investment experience of almost 60
years in total. Jean Ledford is the lead manager and also President and CEO of
Evergreen Asset Management Corp. She is an investment professional with more
than 20 years experience. For 2 1/2 years prior to joining Evergreen, she was
the lead manager of American Century Select Fund. Before joining American
Century Investments, she was an investment director of the State of Wisconsin
Investment Board. Three of the remaining five members of the team also came from
American Century Investments. They include Richard Welsh, co-portfolio manager,
and analysts Rick Petran and John Anthony. Joining them are analysts Caroline Yu
and Robert Flamm, who have been analysts at Evergreen Asset Management Corp.
One of the hallmarks of our effort is to manage funds with good risk-return
records. We seek strong performance for less risk, and we feel we have been
successful in doing this in the past. We build portfolios from the bottom-up,
emphasizing the selection of individual stocks of attractive companies with
accelerating earnings and revenues. Our style allows us to find securities in a
wide variety of industries. Our portfolios are well diversified. One consequence
of this broader diversification is that we expect the volatility, or
variability, of performance will be reduced when compared to the S&P 500.
We are not traditional growth or core buyers in the sense that we are not
looking for any absolute figures in terms of earnings growth rates or
price-to-growth rates. We start by screening 700-800 large company stocks,
looking for companies with accelerating earnings and revenues or, in the case of
companies with negative earnings, a reversal of the negative trends. After these
screens, we apply old-fashioned fundamental analysis of each company to arrive
at a portfolio of between 80 and 120 stocks that we like. While we buy companies
with good growth prospects, we are interested in buying these stocks at
reasonable prices.
The key to our style is the search for changes on the margin that can increase a
company's earnings growth rate. We look for factors such as a new management
team, restructuring and/or a new product or geographical expansion. As we
construct a portfolio from our stock picks, we are careful to determine how much
risk we are taking.
Our sell discipline is just the reverse of our buy discipline. When a stock
stops showing positive earnings, we begin the process of lightening our
position. We look not just at absolute earnings trends, but also at events on
the margin that could affect earnings trends, such as the loss of a key
executive, the failure of a new product or a botched restructuring.
What is your outlook?
We anticipate continued economic growth. A significant factor that should affect
the markets will be the extent to which the Federal Reserve Board (the Fed)
raises short-term interest rates. The question is whether the Fed will raise
rates by an additional one-half of one percent later, or whether the increases
could be even greater. If the increases are greater, they could have a
significant effect on opportunities in the market.
7
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Fund at a Glance as of December 31, 1999
On the fixed-income side of the portfolio, we reduced the Fund's interest rate
sensitivity, or vulnerability to rising interest rates, by shortening the
duration of the bond portfolio."
Portfolio
Management
--------------------
[PHOTO]
Jean C. Ledford, CFA
Tenure: August 1999
[PHOTO]
Richard S. Welsh
Tenure: August 1999
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Performance and Returns/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 3/1/1996
Average Annual Returns
1 year 10.64%
3 year 16.09%
Since Portfolio Inception 16.62%
12-month income dividends per share $0.28
12-month capital gain distributions per share $0.04
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LONG TERM GROWTH
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[GRAPH]
VA Foundation
Fund CPI S&P 500
Mar-96 10,000 10,000 10,000
12/31/96 11,527 10,239 11,782
12/31/97 14,732 10,413 15,712
12/31/98 16,299 10,581 20,202
12/31/99 18,034 10,872 24,455
Comparison of a $10,000 investment in Evergreen VA Foundation Fund/1/ versus a
similar investment in the Standard & Poor's 500 Index (S&P 500) and the Consumer
Price Index (CPI).
The S&P 500 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund fees.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
/1/ Past Performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
8
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Portfolio Manager Fund
Performance
Evergreen VA Foundation Fund had a total return of 10.64% for the twelve-month
period ended December 31, 1999. During the same twelve-month period, the
Standard & Poor's 500 Index, a common benchmark for large-company stock
performance, returned 21.04%.
Portfolio
Characteristics
---------------
(As of 12/31/1999)
Total Net Assets $145,566,375
Number of Holdings 151
Beta 0.65
P/E Ratio 75.2x
What was the investment environment like during the period?
The present management team took responsibility for the Fund in August, and
began restructuring the portfolio by lowering the Fund's emphasis on financial
industry stocks and increasing the weightings in technology and consumer,
non-durable goods. We also reduced the number of holdings in the Fund, raised
the average company size of our holdings, and lowered the cash position in the
Fund.
On the fixed-income side of the portfolio, we reduced the Fund's interest rate
sensitivity, or vulnerability to rising interest rates, by shortening the
duration of the bond portfolio. We also added some very high quality, AAA-rated
corporate bonds, to enhance income and give the portfolio more price stability.
At the end of the fiscal year, on December 31, 1999, the Fund's assets were
invested 73.9% in stocks, 23.2% in bonds, and 2.9% in cash.
These changes helped the Fund's performance improve significantly in the fourth
quarter of the year. Six months ago, the Fund was underweighted in technology.
We raised that weighting substantially, focusing primarily on large companies
within the industry. At the end of the fiscal period, six of the top ten
holdings were in technology: Microsoft, Cisco Systems, Intel Corp., Sun
Microsystems, IBM and Lucent Technologies.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Information Services & Technology 16.1%
Healthcare Products & Services 6.4%
Finance & Insurance 5.9%
Telecommunication Services & Equipment 5.8%
Utilities-Telephone 4.9%
9
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Portfolio Manager Interview
Several representative investments underscore the types of companies that we
have emphasized: Wal-Mart Stores, Exxon Mobil, Oracle Systems and Sun
Microsystems.
Wal-Mart, which comprised almost 2% of net assets at the end of the fiscal year,
is the world's largest retailer and now has expanded into eight non-U.S.
markets. We believe that by the end of 2001, Wal-Mart's foreign retailing
business alone will be larger than the business of any domestic retailer other
than Wal-Mart itself. The company now has over 3,000 Wal-Mart, Sam's Clubs and
Supercenter Stores. Supercenter Stores, which combine both retail and grocery
stores to provide one-stop shopping for consumers, are anticipated to provide
strong growth for the company. We expect Wal-Mart's business to grow by 20% this
year.
Exxon Mobil Corp, now the world's dominant energy company, is benefiting from a
strong world economy and an environment of rising oil prices. We expect its
earnings to rise by almost 20% this year. The company is rapidly reducing costs
as it merges the formerly separate Exxon and Mobil company operations, and it
has a significant ownership in the very promising deepwater oil fields off West
Africa.
In technology, we added to the Fund's existing position in Sun Microsystems,
whose core business in computers is growing even as it is expanding into new
areas linking computers and telecommunications. A newer position in technology
is Oracle Systems, which has one of the largest database platforms on the
internet. Its business is growing from the expansion of business-to-business
commerce on the internet.
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Microsoft Corp. 3.8%
General Electric Co. 3.6%
Cisco Systems, Inc. 2.5%
Intel Corp. 2.4%
Sun Microsystems, Inc. 1.9%
Wal-Mart Stores, Inc. 1.9%
Exxon Mobil Corp. 1.7%
International Business Machines Corp. 1.4%
Global Crossing, Ltd. 1.4%
Lucent Technologies, Inc. 1.4%
Portfolio Team and Strategy
We have a six-member team with a depth of investment experience at almost 60
years in total. Jean Ledford is the lead manager and also President and CEO of
Evergreen Asset Management Corp. She is an investment professional with more
than 20 years experience. For 2 1/2 years prior to joining Evergreen, she was
the lead manager of American Century Select Fund. Before joining American
Century Investments, she was an investment director of the State of Wisconsin
Investment Board. Three of the remaining five members of the team also came from
American Century Investments. They include Richard Welsh, co-portfolio manager,
and analysts Rick Petran and John Anthony. Joining them are analysts Caroline Yu
and Robert Flamm, who had been analysts at Evergreen Asset Management Corp.
10
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Portfolio Manager Interview
One of the hallmarks of our effort is to manage funds with good risk-return
records. We seek strong performance for less risk, and we feel we have been
successful in doing this in the past. We build portfolios from the bottom-up,
emphasizing the selection of individual stocks of attractive companies with
accelerating earnings and revenues. Our style allows us to find securities in a
wide variety of industries. We believe our portfolios are well diversified. One
consequence of this broader diversification is that we expect the volatility, or
variability, of performance to be reduced when compared to the S&P 500.
Our selection process begins by reviewing 700-800 large company stocks. We seek
those stocks that demonstrate accelerated earnings and revenue growth or, in the
case of companies with negative earnings, a turnaround in the negative trends.
After we apply this process, we arrive at a portfolio between 80 and 120 stocks
that we feel offer growth potential and are attainable at reasonable prices.
Our sell discipline is just the reverse of our buy discipline. We monitor stocks
that stop showing positive earnings, and begin the process of lightening our
position.
What is your outlook?
We anticipate continued economic growth. We believe that the extent to which the
Federal Reserve Board increases short-term interest rates is a significant
factor that should affect opportunities in the market.
11
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Fund at a Glance as of December 31, 1999
"Our investment strategy continues to rely on a discipline that emphasizes
fundamental analysis and individual stock selection."
Portfolio
Management
- ------------------
[PHOTO]
Edwin D. Miska
Tenure: March 1997
- --------------------------------------------------------------------------------
Performance and Returns/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 3/6/1997
Average Annual Returns
1 year 24.72%
Since Portfolio Inception 18.48%
12-month income dividends per share $0.06
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
VA Global CPI MSCI World Index
3/31/97 10,000 10,000 10,000
6/30/97 11,372 10,019 11,517
12/31/97 11,227 10,081 11,577
6/30/98 12,777 10,188 13,528
12/31/98 13,348 10,244 14,447
6/30/99 14,462 10,388 15,703
12/31/99 16,649 10,525 18,108
Comparison of a $10,000 investment in Evergreen VA Global Leaders Fund1 versus a
similar investment in the Morgan Stanley Capital International World Index (MSCI
World) and the Consumer Price Index (CPI).
The MSCI World is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund fees.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1 Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. International investing
involves increased risk and volatility.
12
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Portfolio Manager Interview
How did the Fund perform?
The Evergreen VA Global Leaders Fund performed well for the twelve-month period
ended December 31, 1999. The Fund returned 24.72%, in line with the 24.93%
return of the Morgan Stanley Capital International World Index, a common
benchmark for global investments.
The Fund had notable success in following its discipline of investing in
large-cap industry leaders in the world's most developed economies, even though
this emphasis limited its ability to take advantage of the resurgence in
emerging markets.
Portfolio
Characteristics
------------------
(As of 12/31/1999)
Total Net Assets $21,021,831
Number of Holdings 98
What was the investment environment like during the period?
Throughout 1999, the global economy recovered strongly from the financial
problems that had precipitated a crisis in Asia, Russia and Latin America in
1998. Virtually all financial markets rebounded to their previous, pre-crisis
levels. The U.S. economy led the way with steady growth, low inflation and
rising productivity. Technology stocks were the performance leaders in the
United States. In Europe, positive factors included rising consumer spending and
an increase in corporate restructuring and cost-cutting programs. However,
deterioration in the value of the new currency, the euro, held back the returns
for foreign investors. Asian markets, which had suffered through the most severe
problems from the economic crisis, gradually showed recovery as their currencies
stabilized and corporations again started growing their revenues and earnings.
In general, we witnessed a period of synchronized global recovery, characterized
by general economic growth and a trend of corporations to restructure themselves
to improve their productivity.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Merchandising 20.2%
Health & Personal Care 10.1%
Financial Services 9.7%
Technology 7.8%
Electrical & Electronics 6.8%
How would you describe the strategy for the period?
We emphasized the United States as the leading economy in the world, home to
many of the dominant companies in their industries. At the end of the fiscal
year, holdings in the U.S. comprised 49.0% of the Fund's net assets. Our U.S.
holdings tended to perform very well, with the average domestic stock investment
returning 37%, significantly ahead of the domestic benchmark, the S&P 500 Index
which returned 21.04% for the period. Major U.S. holdings with outstanding
returns included: software company Oracle Systems Corp., which rose 289.4%
during the year; internet equipment company Cisco Systems, Inc. up 130.7%;
securities firm Morgan Stanley, Dean Witter, which rose 102.2%; Wal-Mart Stores,
Inc., which returned 72.2%; and Microsoft Corp., which returned 69.9%.
Generally, our foreign investments performed in line with international
benchmarks. The conservative mandate of the Fund, focusing on larger companies
in developed nations, subdued overall return potential as emerging and smaller
cap strategies significantly outperformed this year. In addition, the negative
impact of foreign currency translations detracted from returns.
13
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Portfolio Manager Interview
We tended to keep our country allocations consistent during the period, although
the weighting in Japan increased to about 10% of net assets during the final six
months, partly because we cautiously increased our emphasis in Japan and partly
because of the appreciated value of holdings. The Japanese stock market, which
has been mired in a slump for most of the decade, seems to be recovering. In
fact, two of the Fund's standout performers were Japanese corporations.
Seven-Eleven Japan Co., Ltd., a chain of convenience stores, rose 95.7% during
1999, while electronic game company Nintendo Co., Ltd., was up 73%.
The Fund's investments in Hong Kong also performed well, with an average return
of 39.7%, led by Cheung Kong Holdings, a real estate developer with a 76.5%
return.
We had a very small position in the Malaysian market because of our concerns
about market volatility. Two of the best performing Malaysian stocks were AMMB
Holdings Berhad, which rose 163.2% and Malayan Banking Berhad, up 127%.
While we had a major emphasis in European stocks, which composed 35.0% of net
assets at the end of the fiscal year, our investments in Europe were somewhat
disappointing. The principal reason was that the new, common currency for 11
European nations, the euro, fell in value by 13.5% since its introduction in
January 1999. Despite the poor performance of the currency, the Fund did have
good performance from several European-based stocks, notably Nokia Corp., the
Finland-based telecommunications equipment giant, which rose by 215.7%. In
addition, the Fund's investments in France did relatively well, averaging 15%
gains during the fiscal year. The best performing French holdings were the
retailer Carrefour SA, which had a 46.1% return, and retailer Hermes
International, which returned 84.7%.
Selected investments in Italy also contributed positively. The best-performing
Italian investment for the Fund was eyeglass-frame manufacturer and retailer,
Luxottica Group, which rose by 52.7%.
In Ireland, the Fund had just one holding, building materials company CRH Plc,
which had a 23.9% return.
The Fund's investments in Germany performed poorly in 1999, losing 20.8% as a
whole. Among the more disappointing issues were: utility companies RWE and VEW,
which lost 27.6% and 15.9%, respectively, and the clothing manufacturer and
retailer Hugo Boss, which fell 22.5%, largely the result of the currency
translation effect. These stocks underperformed despite strong fundamentals. We
remain optimistic about their long-term prospects.
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Seven-Eleven Japan Co. Ltd. 6.0%
Microsoft Corp. 2.8%
Nintendo Co., Ltd. 2.6%
Bombardier, Inc., Cl. B 2.5%
Wal-Mart Stores, Inc. 2.4%
Nokia Corp. ADR 2.3%
Cisco Systems, Inc. 2.2%
National Australia Bank, Ltd. 1.8%
Intel Corp. 1.8%
Endesa SA, ADR 1.7%
14
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Portfolio Manager Interview
What is your outlook?
Our overall outlook is positive. We see the opportunity for continued strong
performance from U.S. holdings, where we have a large group of multi-national
corporations that should benefit from the strengthening of the global economy.
We also believe that many of our European investments have the potential to
increase their earnings growth rates as the effects of their restructuring and
cost-cutting programs take hold. Many companies in Europe are undergoing
restructuring programs to improve profitability and overall competitiveness. We
think they have the potential to produce sustained, positive stock performance.
In Asia, the regional economy continues to improve gradually, and we will be
watchful for new opportunities in which to invest.
Our investment strategy continues to rely on a discipline that emphasizes
fundamental analysis and individual stock selection. We search for companies
that show persistent earnings leadership over longer periods of time and that
demonstrate their ability to expand their businesses even as economic conditions
change. We believe companies with sound management teams and strong balance
sheets should be best positioned to profit from emerging opportunities.
15
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Fund at a Glance as of December 31, 1999
"We will continue to take a long-term view of investment opportunities, as we
consider ourselves investors not traders."
Portfolio
Management
----------
[PHOTO]
Philip M. Foreman, CFA, CFP
Tenure: August 1997
[PHOTO]
Irene D. O'Neill, CFA, CFP
Tenure: September 1999
- --------------------------------------------------------------------------------
Performance and Returns/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 3/1/1996
Average Annual Returns
1 year 18.57%
3 year 18.71%
Since Portfolio Inception 19.66%
12-month income dividends per share $0.06
12-month capital gain distributions per share $0.89
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
VA Growth & Income CPI S&P 400
Mar-96 10,000 10,000 10,000
6/30/96 10,711 10,116 10,411
12/31/96 11,899 10,239 11,361
6/30/97 13,880 10,349 12,839
12/31/97 16,021 10,413 15,004
6/30/98 17,238 10,523 16,293
12/31/98 16,788 10,581 17,871
6/30/99 18,525 10,730 19,084
12/31/99 19,905 10,872 20,492
Comparison of a $10,000 investment in Evergreen VA Growth & Income Fund1 versus
a similar investment in the Standard & Poor's 400 Mid-Cap Index (S&P 400) and
the Consumer Price Index (CPI).
The S&P 400 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund fees.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
/1/ Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
16
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Growth and Income Fund had a total return of 18.57% for the
twelve-month period ended December 31, 1999. This compared to the Standard &
Poor's 400 MidCap Index, which returned 14.72%. Performance was supported by the
Fund's investments in the media and broadcasting business, by brisk
merger-and-acquisition activity that resulted in acquisition proposals for
several Fund holdings, and by the decision to raise the emphasis on technology
company stocks.
Portfolio
Characteristics
------------------
(As of 12/31/1999)
Total Net Assets $84,066,989
Number of Holdings 186
Beta 0.80
P/E Ratio 45.9x
What was the investment environment like during the twelve-month period?
Throughout the year we maintained a large, overweighted position in the stocks
of media and broadcasting companies. Many of these holdings had healthy
performance, helped by heavy advertising, including an influx of
election-related ads and "dot-com" ads, or ads promoting businesses on the
internet. One of the stronger performing investments, and one of the Fund's
larger positions, was the New York Times Company, which benefited from political
and electronic commerce advertising as well as by the decision to spin out its
internet related business.
Radio station companies also benefited from the strong advertising market. Among
the performance leaders were Emmis Broadcasting Corp. and Clear Channel
Communications. Another excellent performer was Univision Communications, Inc.,
the leading source of Spanish language programming for cable television and the
beneficiary of the interest of mainstream advertisers to target the nation's
Spanish-speaking population.
Sony Corporation, the Fund's largest position, had extremely good performance,
aided by the recovery in the Japanese market and the worldwide recognition of
Sony's leadership in digital media. In addition, Sony's stock benefited from a
corporate restructuring program and the performance of internet subsidiaries.
The Fund's emphasis on attractive mid-sized companies worked well, as a number
of holdings were acquired or received takeover proposals from larger
corporations. Primark International, manufacturer and distributor of commercial
cooking equipment for the restaurant and hotel industry, was acquired by
Illinois Tool Works, Inc. at a substantial premium over Primark's stock price.
Omnipoint, a wireless communications company, purchased by Voicestream, was
another example. The Fund also gained as Rohm and Haas purchased Morton
International, a specialty chemical and salt company, and Motorola purchased
General Instruments, the manufacturer of cable modems.
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Sony Corp., ADR 3.7%
General Electric Co. 2.4%
New York Times Co., Cl. A 2.3%
Microsoft Corp. 1.8%
Computer Sciences Corp. 1.7%
Nextel Communications, Inc., Cl. A 1.6%
Motorola, Inc. 1.6%
Emmis Broadcasting Corp., Cl. A 1.5%
McGraw-Hill Companies, Inc. 1.5%
Omnipoint Corp. 1.4%
17
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Portfolio Manager Interview
The Fund began the fiscal year with a very low weighting in technology stocks,
only about 3% of net assets. While this low weighting kept the Fund from
participating fully in the rally in technology stocks, we did add to our
technology holdings steadily throughout the year, finishing the year with a
weighting of about 16% of net assets.
Among the strong contributors to performance were PE Biosystems, manufacturer of
equipment for the biotechnology industry, and Seagate Technologies, a disc drive
corporation which also was a major shareholder in Veritas Software, a
manufacturer of data storage software.
Another strong contributor to the Fund's performance was Kansas City Southern, a
diversified corporation owning mutual fund companies as well as a railroad.
Among the disappointments were Rite-Aid, the drug store chain, and McKesson, a
pharmaceutical company.
Describe the strategy for the Fund?
The Fund maintains a long-term strategy of investing in outstanding, mid-sized
companies that are, in the advisor's view, undervalued. At least 75% of the
Fund's assets typically are invested in mid-cap companies.
By "outstanding companies" we refer to companies that have a competitive
advantage, that operate with barriers to protect against competition, and that
generate high returns on capital. We also prefer to invest in companies in which
executives and directors have significant ownership positions. We believe this
tends to align the interests of corporate decision-makers with the interests of
outside investors, such as ourselves.
By "on sale" we refer to companies whose stocks are trading at major discounts
to the private market value of the company--or the price another corporation
likely would pay to acquire the company.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Printing, Publishing, Broadcasting &
Entertainment 13.1%
Information Services & Technology 10.2%
Healthcare Products & Services 6.9%
Business Equipment & Services 6.7%
Consumer Products & Services 6.6%
What is your outlook?
We are extremely positive about the investment opportunities we see.
We believe media and broadcasting companies will continue to prosper because of
heavy advertising, especially in an election year. While the financial services
sector has not performed well in 1999, we intend to emphasize those companies
relying on fee-based businesses rather than on lending, which is vulnerable to
rising interest rates. We expect to continue to add to our position in the
technology industry, although we intend to do so opportunistically, investing
after corrections to take advantage of temporarily low prices. We also expect to
de-emphasize retail and consumer durables companies, as we believe the Federal
Reserve's hikes in short-term interest rates eventually will slow consumer
spending.
We will continue to take a long-term view of investment opportunities, as we
consider ourselves investors not traders. The mid-cap stock market still offers
substantial value, especially when compared to the large-cap market, and we
believe we are finding many good companies whose stocks are trading at discounts
of 40% or more to their private market value.
18
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Fund at a Glance as of December 31, 1999
"Much of the Fund's strong performance was achieved during the second half of
the fiscal year as we increased our emphasis on technology and
telecommunications stocks."
Portfolio
Management
-------------------
[PHOTO]
Gilman C. Gunn
Tenure: August 1998
- --------------------------------------------------------------------------------
Performance and Returns/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 8/17/1998
Average Annual Returns
1 year 38.22%
Since Portfolio Inception 20.92%
12-month income dividends per share $0.14
12-month capital gain distributions per share $0.10
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
VA International CPI MSCI EAFE Index
8/31/98 10,000 10,000 10,000
9/30/98 9,365 10,012 9,696
12/31/98 10,285 10,031 11,708
3/31/99 10,175 10,098 11,879
6/30/99 10,624 10,171 12,189
9/30/99 11,282 10,275 12,732
12/31/99 14,217 10,306 14,904
Comparison of a $10,000 investment in Evergreen VA International Growth Fund/1/
versus a similar investment in the Morgan Stanley Capital International Europe,
Australia and Far East Index (MSCI EAFE) and the Consumer Price Index (CPI).
The MSCI EAFE is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund fees.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
/1/ Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. International
investing involves increased risk and volatility.
19
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Portfolio Manager Interview
How did the Fund perform?
The Evergreen VA International Growth Fund performed very well during a period
of change and opportunity in international markets. For the twelve-month period
ended December 31, 1999, the Fund returned 38.22%, compared to the 26.96% return
of the Morgan Stanley Capital International EAFE Index, a common benchmark for
international investments.
Portfolio
Characteristics
------------------
(As of 12/31/1999)
Total Net Assets $3,781,919
Number of Holdings 170
What was the investment environment like during the twelve-month period?
1999 was a year of change and economic expansion in many foreign stock markets,
although a weakening currency held back opportunities in most European
countries. Much of the Fund's strong performance was achieved during the second
half of the fiscal year as we increased our emphasis on technology and
telecommunications stocks. We also were successful in a number of new stocks
issued by smaller companies. In addition, the decision to increase the Fund's
investments in Mexico and Brazil during the final two months of the fiscal year
proved to be very successful as these two markets staged robust rallies in
November and December.
The rally in technology and telecommunications stocks that began in the United
States spread throughout the world, with companies like Nokia, the Finnish-based
wireless communications equipment company, and Yahoo Japan, an internet firm,
achieving extraordinary performance.
After enduring a deep slump for the previous nine years, the stock market in
Japan rallied strongly during 1999. While large company stocks revived in the
first part of the year, the strongest rally came among the stocks of smaller
companies, particularly in the technology sector.
In Europe a new currency, the euro, was introduced in January 1999, but it had a
difficult first year, losing 13.5% of its value versus the U.S. dollar. This
weakening currency created a difficult environment and disappointing results for
investments on the Continent, because any unhedged investments in most European
company stocks had to achieve at least a 13.5% gain before the U.S. investor
could break even.
However, the situation was much different in many emerging markets. After three
extremely difficult years, emerging markets rebounded strongly. The rally began
in Asia early in 1999 and then spread to Latin America.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Telecommunications 18.0%
Banking 11.9%
Machinery & Engineering 5.9%
Technology 5.6%
Energy Sources 5.3%
20
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Portfolio Manager Interview
How would you describe the strategy for the period?
As evidence of global economic expansion grew, we added to our positions in
Japan, emerging markets and in technology. We began 1999 with a relatively low
weighting in Japan, at about 12% of net assets. While this under-emphasis held
back performance earlier in the year, we increased our weighting to 19.7% of net
assets by the end of the year, with a major emphasis on technology and small
company stocks. Similarly, we added to our positions in emerging markets, where
we gradually raised our position to 13.7% of net assets from an extremely low
weighting at the beginning of the year.
By the end of the year, technology and telecommunications investments accounted
for 23.6% of the Fund's net assets. These investments performed very well, with
the largest single holding in the portfolio, Nokia, doubling in value in the
final six weeks of the year alone. To reduce risk but still profit from the
transactions, we reduced our holding in Nokia.
In Japan, one of the Fund's largest holdings, Matsushita Communications, another
wireless telecommunications equipment company, rose more than 175% since our
investment early in the year.
Our increased investments in Latin America during the final quarter helped the
Fund benefit from the strong rebound in the Mexican banking sector in
particular. Two holdings, Grupo Financiero Banamex AC and Grupo Financiero
Bancomer SA, each rose more than 40% during the final two months of the year.
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Nokia AB Oyj 3.4%
Korea Telecom Corp. 2.9%
Fanuc Ltd. 2.4%
SMC Corp. 2.3%
HSBC Holdings Plc 2.0%
Nippon Telegraph & Telephone Corp. 1.8%
Deutsche Telekom AG 1.8%
Mannesmann AG 1.8%
Embraer-Empresa Brasileira de Aeronautica SA 1.5%
Logitech International SA 1.4%
What is your outlook?
We believe the global economic environment is likely to continue to grow
steadily in 2000, but with moderate increases in interest rates in the United
States and in Europe. The global economic expansion is broad and deep, providing
a favorable climate for investing in equities. We also believe the economic
growth throughout the world should benefit emerging market investments. In
Japan, however, most of the opportunities appear concentrated in small-cap,
technology companies and corporations undergoing restructuring programs. In
Europe, corporations are reporting steady earnings growth, while the euro
currency should strengthen after a very poor year in 1999. These two factors
increase the attractiveness of European stocks.
With this environment, we intend to continue the Fund's investment discipline,
emphasizing blue chip stocks in major markets, with strategic allocations to
smaller company stocks as opportunities are found.
21
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Fund at a Glance as of December 31, 1999
The investment environment for stocks was positive during the period. Economic
growth was strong, consumer confidence was high and inflation remained at a
relatively moderate level."
- --------------------------------------------------------------------------------
Performance and Returns/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 1/29/1999
Return Since Portfolio Inception 27.58%
YTD income dividends per share $0.01
YTD capital gain distributions per share $0.16
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
VA Masters CPI S&P 400 S&P 500
1/31/99 10,000 10,000 10,000 10,000
2/28/99 9,570 10,012 9,477 9,688
3/31/99 9,860 10,043 9,742 10,076
4/30/99 10,160 10,116 10,510 10,466
5/31/99 10,030 10,116 10,557 10,219
6/30/99 10,840 10,116 11,112 10,786
7/31/99 10,440 10,146 10,876 10,449
8/31/99 10,290 10,170 10,506 10,397
9/30/99 10,360 10,219 10,182 10,112
10/31/99 10,860 10,237 10,701 10,752
11/30/99 11,458 10,243 11,262 10,970
12/31/99 12,759 10,250 11,932 11,616
Comparison of a $10,000 investment in Evergreen VA Masters Fund/1/ versus a
similar investment in the Standard and Poor's 400 Mid-Cap Index (S&P 400), the
Standard & Poor's 500 Index (S&P 500), and the Consumer Price Index (CPI).
The S&P 400 and the S&P 500 are unmanaged market indices which do not include
transaction costs associated with buying and selling securities nor any mutual
fund fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
/1/ Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
22
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
How did the Fund perform?
Since its inception, the Evergreen VA Masters Fund rose 27.58%, outperforming
the 19.37% return of the S&P 400 Index and the 16.18% return of the S&P 500
Index. Evergreen VA Masters Fund is composed of four separate portfolios; each
managed by a different investment advisor. Together these portfolios provide a
diversified growth fund. Each investment advisor brings a unique investment
approach to the Fund. As a result, the Fund has the potential to benefit from
various investment methods and styles.
Portfolio
Characteristics
---------------
(As of 12/31/1999)
Total Net Assets $18,872,511
Number of Holdings 493
P/E Ratio 66.7x
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Information Services & Technology 18.7%
Healthcare Products & Services 8.5%
Retailing & Wholesale 7.3%
Oil/Energy 6.1%
Finance & Insurance 5.2%
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Microsoft Corp. 2.3%
RSA Security, Inc. 1.8%
Ethan Allen Interiors, Inc. 1.5%
General Electric Co. 1.5%
Health Management Associates, Inc., Cl. A 1.3%
Wal-Mart Stores, Inc. 1.3%
Home Depot, Inc. 1.2%
Terex Corp. 1.2%
Transocean Sedco Forex, Inc. 1.2%
Network Solutions, Inc., Cl. A 1.2%
23
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Mid-Cap Value Portfolio
Portfolio
Management
- -------------------------------------------
[PHOTO] [PHOTO]
Jean C. Ledford, CFA Richard C. Welsh
Tenure: August 1999 Tenure: August 1999
The investment environment for stocks was positive during the period. Economic
growth was strong, consumer confidence was high and inflation remained at a
relatively moderate level. During the period, the Federal Reserve Board raised
interest rates three times, each time by 0.25%, but higher interest rates had
relatively little effect on investor enthusiasm for stocks. By the end of the
period, the stock market had reached lofty heights. However, the breadth of the
market (the number of stocks participating in its upward momentum) was narrow.
Technology and related stocks accounted for most of the gains in the market.
While technology stocks were the clear winners, many of the traditional blue
chips struggled. Because of higher interest rates, financial stocks were
particularly poor performers.
We use a traditional bottom-up investment strategy, which means we analyze the
business fundamentals of a company. We select stocks for the portfolio on a case
by case basis. Before adding a stock to the portfolio, we consider a number of
factors. A company's earnings and revenue growth rates, its corporate structure,
the strength of its management team and its product line are just some of the
things we evaluate when seeking investments. We seek companies in a number of
different industries and across economic sectors.
We have begun to restructure the portfolio so that it should include between 80
and 120 stocks. New investments are likely to focus on technology, energy and
some health care areas. Because there is a possibility of higher interest rates,
financial stocks will play less of a role in the Fund. We expect the new
structure to reduce the portfolio's volatility of returns when compared to the
S&P 500 Index. We also expect the portfolio's risk-adjusted returns to be
favorable.
The Fund was fully invested during the period. In the third and fourth quarters,
we added to the technology portion of the Fund. The strength of these technology
shares boosted performance the most. We decreased the Fund's exposure to
interest-sensitive industries, which included regional banks, financial services
and homebuilding companies. The downsizing of the financial portion of the
portfolio also had a positive impact on performance.
21
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
We increased the Fund's allocation to energy, consumer durables and consumer
non-durables. Rising oil prices boosted the value of the energy stocks in the
portfolio. We added Exxon Mobil, the world's largest energy company. In 2000, a
strong global economy and major internal restructuring should generate about a
20% earnings growth rate for Exxon Mobil. In the consumer non-durables area, we
added Wal-Mart to the portfolio. Wal-Mart has over 3,000 stores around the
world, and 2,000 of them have earnings growth rates greater than 20%. The
company continues to expand internationally and currently has a presence in
eight non-U.S. markets. By 2001, it is estimated that the international segment
of Wal-Mart will be larger than any other U.S. retailer. Wal-Mart is also
expanding its retail food business in its supercenters and expects that nearly
10% of its business will come from its expansion into retail foods.
What is your outlook?
The year 2000 should be a relatively good year for stocks. We expect economic
growth and corporate earnings growth to be strong, and we believe the Federal
Reserve Board will keep a gentle hand on interest rates. In 1999, the stock
market was marked by swift and often severe responses to unmet expectations.
Investors would simply rotate out of stocks that were disappointing and into
others that were the latest favorites in the technology, telecommunication or
biotechnology areas. As a result, overall market levels continued to move up.
The key in 2000 will be managing the preferred investments as they ebb and flow
over the course of the year. A healthy sign for continued market strength would
be broader participation by the stocks and industries that failed to participate
in 1999. We expect 2000 to be a year of more modest gains for both the S&P 500
and the NASDAQ.
25
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Mid-Cap Growth Portfolio
Portfolio
Management
--------------------
[PHOTO]
Mark Regan, MFS
Tenure: January 1999
During the fourth quarter, performance was particularly strong. Technology was
the leading sector in terms of performance, and the portfolio benefited from an
over-weighting in the sector as well as good stock selection. Specifically,
positions in RSA Security, Teradyne, and Sipex performed very well. Network
Solutions, CBS Sportsline, and Checkfree Holdings contributed to strong stock
selection in the Business Services sector. In addition, the portfolio was
overweighted in this sector enhancing overall performance.
Although an overweighting of the Energy sector detracted from overall
performance in the fourth quarter, we consider many companies in this sector to
be fundamentally undervalued and poised to experience rapid growth due to
continued robust prices in oil and natural gas. Examples of these companies in
the Fund are Noble Drilling, Cooper Cameron, Newfield Exploration and Apache
Corp. Strong stock selection and over weighting in the Healthcare sector
improved overall performance towards the end of 1999. Health Management
Associates, an operator of acute care hospitals in rural communities, performed
strongly after announcing record revenues and was the major contributor in this
sector.
Boosted by generally strong earnings growth, accelerating productivity gains,
the brisk pace of technological innovation and low inflation, the equity market
seems poised for continued long-term gains. On the other hand, short-term
volatility and market weakness can never be ruled out, especially with many
stock valuations and market indices near or at record highs. While stocks could
receive a further boost if the Federal Reserve Board refrains from raising
interest rates in the near term, an increase in rates might cause a short-term
set back. Over the next twelve months, we believe opportunities exist for
investors of small and mid-cap stocks and we continue to see signs that the
market is broadening.
26
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Large-Cap Value Portfolio
Portfolio
Management
-----------------------------------------------
[PHOTO]
Charles Albers & Nikolaos Monoyios, Oppenheimer
Tenure: January 1999
What was the investment environment like during the period?
The Oppenheimer portion of the VA Masters Fund is well diversified and generally
reflects broad stock market trends. However, during this extraordinary period of
concentrated performance in technology stocks, the portfolio has lagged the
Standard & Poor's 500 Index (S&P 500). It is interesting to note that most of
this under-performance occurred during the months of October and November 1999.
We think that this extraordinary pace of appreciation in the most richly valued
sector of the market is not sustainable and that the probabilities favor a
closing of the performance gap going forward.
Portfolio Actions
During the month of November, the Oppenheimer portion of the Fund had total
purchases of $958 million and sales of $715 million. Significant purchases
include Microsoft, AT&T, Royal Dutch, Intel and DuPont and sales included
Hewlett-Packard, Merck, Wells Fargo, SBC Communications and Ford.
What is your outlook?
At this time of the year there is an interplay of seasonal, cyclical and secular
forces affecting the stock market. During a decade of low inflation (the CPI has
averaged an annual increase of only 3%) and falling interest rates accompanied
by strong increases in real growth and productivity, stock prices as measured by
the S&P 500 have gained an average 17.8% annually. Looking ahead, we think
equity returns will be more moderate, perhaps averaging 8% to 10% over the next
few years. Seasonal forces, such as tax-loss selling and portfolio
window-dressing may keep pressure on out of favor sectors of the market until
year end. However, the first quarter of next year is likely to bring better
relative performance by mid-capitalization and value stocks. The fund is
gradually increasing its exposure to these stocks while maintaining its core
positions in many of the larger cap and attractive growth stocks. We are
confident that our disciplined investment strategy will continue to produce
favorable investment results in the future.
27
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Large-Cap Growth Portfolio
Portfolio
Management
----------
Putnam Growth Team
Tenure: January 1999
1999 was marked by rapid, widespread market rotation. Large-cap growth stocks
set records during the first two months, but mid and small-cap stocks did not
participate in these gains. Large-capitalization stocks continued to lead the
markets during this period and growth outperformed value.
The portfolio's best-performing stocks were in the technology, consumer staples,
and communications services sectors. Technology, the clear market leader for
1999, was the prime contributor to the portfolio's performance.
Performance was hampered by weak stock performance in health care and financial
services and from the strong performance of the energy, basic industry, and
capital goods sectors (areas in which the portfolio was under-weighted). These
sectors are composed of economically sensitive, cyclical stocks, but lack the
type of growth stocks that meet our large-cap growth investment criteria.
What is your outlook?
Looking ahead, we believe that, although U.S. economic growth may slow in 2000,
it will remain relatively robust. Markets already are watching nervously for
signs of inflation, which will be a major influence on stock prices. Rising
inflation could also result in soaring health-care premiums and increasing
commodity prices. We also expect to see further Federal Reserve Board rate hikes
if strong economic growth translates into inflation. We believe that
high-quality growth companies will continue to benefit from persistent demand
and visible earnings growth, particularly within the technology, consumer
staples, and conglomerate sectors.
28
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Fund at a Glance as of December 31, 1999
"We expect technology will continue to offer good opportunities, although the
names of the performance leaders may be different."
Portfolio
Management
-------------------------
[PHOTO]
Maureen E. Cullinane, CFA
Tenure: April 1999
- --------------------------------------------------------------------------------
Performance and Returns/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 3/6/1997
Average Annual Returns
1 year 47.24%
Since Portfolio Inception 27.80%
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
VA Omega CPI Russell 1000
Mar-97 10,000 10,000 10,000
6/30/97 10,270 10,044 11,248
12/31/97 11,100 10,107 12,277
6/30/98 12,279 10,213 14,778
12/31/98 13,569 10,269 17,028
6/30/99 15,308 10,414 18,808
12/31/99 19,979 10,551 22,672
Comparison of a $10,000 investment in Evergreen VA Omega Fund/1/ versus a
similar investment in the Russell 1000 Growth Index (Russell 1000 Growth) and
the Consumer Price Index (CPI).
The Russell 1000 Growth is an unmanaged market index which does not include
transaction costs associated with buying and selling securities nor any mutual
fund fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
/1/ Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
29
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Omega Fund (formerly Evergreen VA Aggressive Growth Fund) had
strong performance during the twelve-month period ended December 31, 1999,
producing a total return of 47.24%. During the same period, the Russell 1000
Growth Index, the Fund's benchmark, returned 33.16%.
Portfolio
Characteristics
---------------
(As of 12/31/1999)
Total Net Assets $24,175,588
Number of Holdings 67
P/E Ratio 61.7x
What was the investment environment like during the period?
1999 will be remembered as the year of technology stocks. The year started out
with a continuation of 1998 trends, with market performance led by a few large
company growth stocks. In the second three months of the year, value-oriented
stocks, primarily cyclical companies, started to do better, as did small and
midcap stocks. About halfway through the year, however, technology started to
take off. Investors recognized that the internet was a reality and that
electronic commerce was creating profound changes in the way businesses operated
and consumers behaved.
The growth in "e-commerce" created tremendous opportunities to invest in
internet infrastructure companies such as Cisco Systems and JDS Uniphase. The
movement of so much commerce and data over the internet also increased the
demand for data storage; hardware companies such as EMC; and software companies
such as Veritas also had excellent stock performance.
At the same time as the demand for technology increased, evidence continued to
accumulate that the nation's business productivity was increasing rapidly due to
the efficiencies created by technology. The growing recognition of the
importance of pure technology companies was evidenced by the inclusion of both
Microsoft and Intel in the Dow Jones Industrial Average. As a result, the
valuations of many technology based company stocks went to new highs.
While technology was rallying, the more defensive areas in the market, including
healthcare, financial services and consumer products, faltered in stock
performance. Energy and other cyclical industries did well in the second
quarter, but their overall performance for the year did not come close to that
of the technology sector.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Information Services & Technology 34.9%
Pharmaceuticals 10.7%
Printing, Publishing, Broadcasting &
Entertainment 10.6%
Telecommunication Services & Equipment 8.3%
Finance & Insurance 6.9%
How would you describe the strategy for the period?
Throughout the year, the Fund's allocation in technology gradually increased,
both as a result of deliberate over-weighting of the sector and because of the
price appreciation of the Fund's technology holdings. At the end of the year,
about 45% of the Fund's net assets were invested in technology, including
telecommunications, software, hardware and electronic equipment companies. We
emphasized a core group of global technology leaders such as Cisco Systems,
Microsoft, EMC and Intel, and enhanced these positions with
30
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Portfolio Manager Interview
smaller company stocks such as Yahoo, the internet company, and Sandisk, which
manufactures electronic chips for digital cameras and other hand-held devices.
The Fund benefited from very strong performance by a wide variety of technology
companies, including Veritas Software (data storage); Teradyne, (semi-conductor
capital equipment); Qualcomm, (wireless communications equipment); Cree Research
(semi-conductors); and JDS Uniphase (fiber optic components).
Less successful was our continued pursuit of a long-term strategy seeking to
benefit from the "graying of America" by investing in healthcare stocks that
provide the products and services for the aging baby boomer generation.
Healthcare tended to hold back the Fund's performance during 1999, but we have
maintained this emphasis because of our conviction about the sector's long-term
opportunities. Moreover, we believe many healthcare stocks are selling at very
attractive valuations. Despite 1999's disappointments, some pharmaceutical and
healthcare investments did excel in 1999, including Enzon, a biotechnology
company developing drugs to treat cancer, and VISX, which produces laser
equipment used in surgical procedures to correct vision.
We also had an over-weighting in entertainment and media stocks, which performed
very well, led by a number of radio station chains that benefited from
consolidation and healthy advertising budgets. Among our holdings were radio
station chains AMFM, Infinity Broadcasting and Entercom. We also had success
with our investment in Univision Communications, Inc., the leader in
Spanish-language television programming.
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
Cisco Systems, Inc. 3.5%
EMC Corp. 3.4%
Microsoft Corp. 3.1%
Teradyne, Inc. 2.6%
America Online, Inc. 2.3%
Warner-Lambert Co. 2.3%
Intel Corp. 2.3%
Cree Research, Inc. 2.3%
Veritas Software Corp. 2.3%
General Electric Co. 2.2%
What is your outlook?
We think 2000 could be a good year in the domestic stock market, although with
some volatility in stock valuations in the short term. We also expect we may see
a great deal of rotation in the market as one group of companies supplants
another in performance leadership. We expect interest rates to continue to rise
during the first half of the year and the pace of economic growth to slow. We do
not anticipate any significant rise in inflation.
We expect technology to continue to offer good opportunities, although the names
of the performance leaders may be different. We also anticipate that healthcare
stocks should do better in 2000 than they did in 1999.
With this as a backdrop, we are committed to our long-term strategy of
maintaining a nucleus of stable growth companies led by strong management, with
healthy business franchises and records of consistent earnings growth. We will
continue to emphasize companies with the potential for acceleration of their
earnings growth.
31
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Fund at a Glance as of December 31, 1999
"We are very positive about the potential for strong small cap stock performance
as valuations of small caps relative to larger companies are at some of the most
attractive levels in many years."
Portfolio
Management
------------
[PHOTO OF JORDAN ALEXANDER,]
Jordan Alexander, CPA
Tenure: April 1999
[PHOTO OF EDWIN D. MISKA]
Edwin D. Miska
Tenure: September 1999
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 5/1/1998
Average Annual Returns
1 year 12.07%
Since Portfolio Inception 5.22%
12-month income dividends per share $0.13
12-month capital gain distributions per share $0.46
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
VA Small Cap Russell Wilshire
Value Fund CPI 2000 Value Small Cap Value
May-98 10,000 10,000 10,000 10,000
6/30/98 9,810 10,031 9,591 9,564
12/31/98 9,714 10,086 8,592 8,825
6/30/99 10,749 10,228 9,043 8,792
12/31/99 10,886 10,363 8,464 8,115
Comparison of a $10,000 investment in Evergreen VA Small Cap Value Fund1 versus
a similar investment in the Russell 2000 Value Index (Russell 2000 Value), the
Wilshire Small Cap Value Index (Wilshire Small Cap Value), and the Consumer
Price Index (CPI).
The Russell 2000 Value and the Wilshire Small Cap Value are unmanaged market
indices which do not include transaction costs associated with buying and
selling securities nor any mutual fund fees. The CPI is a commonly used measure
of inflation and does not represent an investment return. It is not possible to
invest directly in an index.
1Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
32
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Small Cap Value Fund significantly outperformed its benchmark
during a difficult period for small cap value investing. For the twelve-month
period ended December 31, 1999, the Fund had a positive total return of 12.07%,
compared with a decline of 1.49% for the Russell 2000 Value Index. The Fund's
performance during the period was helped by strong gains in several issues in
the technology, communications and health care sectors.
Portfolio Characteristics
-------------------------
(As of 12/31/1999)
Total Net Assets $4,958,252
Number of Holdings 79
P/E Ratio 23.4x
What was the investment environment like during the period?
1999 was a difficult environment for small cap value investing, particularly
during the second half of the year. Market leadership tended to be narrowly
focused on a relatively small group of large cap growth and technology
companies. While the Russell 2000 Index did well, performance tended to be
limited to issues in the technology sector, especially companies focused on the
internet, and initial public stock offerings. The Fund invests in attractively
valued small cap companies with a history of stable earnings growth, and issues
with these characteristics tended to be ignored by the market.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Consumer Products & Services 14.5%
Retailing & Wholesale 12.6%
Building, Construction & Furnishings 10.2%
Banks 9.6%
Healthcare Products & Services 7.9%
Portfolio Strategy
The strength of a number of issues in the technology and communications sector
contributed to the performance of the Fund. Some outstanding issues include
Helix Technology (+243.5%), Scientific Atlanta (+144.8%), CSG Systems (+65.5%),
Hadco Corp. (+63.7%), Antec Corp. 4.50% CV Due 5/15/2003 (+61.6%), SBS
Technologies (+48.7%), and Timberline Software (+48.0%). Helix Technology, a
supplier of vacuum pumps and instrumentation components to semiconductor
equipment manufacturers, is benefiting from the introduction of new products,
strong operating leverage and an upturn in the semiconductor capital equipment
market. Scientific Atlanta, a cable equipment company, has a strong fundamental
outlook due to the upgrading of the cable TV infrastructure for broadband
services. The company should see solid earnings growth over the year fueled by
increased capital expenditures for two-way digital cable services and the
successful launch of digital services using the company's set-top boxes by cable
companies.
In health care, the Fund was helped by strong gains in Jones Pharma and
Arthrocare. Arthrocare is developing several new products for the arthroscopy
market. We initiated our position in Arthrocare early last year when the stock
was trading at a forward price-earnings multiple of approximately 16x. The issue
appreciated 512.5%
33
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Portfolio Manager Interview
last year and we believe the company has multiple revenue opportunities as it
applies its proprietary technology to diverse therapeutic areas, such as spinal
surgery and cosmetic surgery. Jones Pharma, a specialty pharmaceutical company,
was another strong performing health care issue with a gain of 114.8% for the
period. The company is seeing accelerated earnings growth fueled by solid
prescription growth in its endocrinology franchise as well as an improved
competitive position for a key critical care product.
Technology and health care were the best performing sectors for the Fund during
the period due largely to the strength of the issues mentioned. The heavy
weighting of investments in consumer cyclicals and consumer staples were a drag
on performance, although we expect strong consumer spending to continue to drive
double-digit earnings growth and better stock performance for many of the
consumer names in the portfolio.
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
TJ International, Inc. 2.5%
Helix Technology Corp. 2.4%
Whole Foods Market, Inc. 2.3%
Chattem, Inc. 2.3%
Advanced Marketing Services, Inc. 2.3%
Applied Power, Inc., Cl. A 2.2%
Furniture Brands International, Inc. 2.2%
ArthroCare Corp. 2.2%
Ross Stores, Inc. 2.2%
Papa John's International, Inc. 2.1%
What is your outlook?
We are very positive about the potential for strong small cap stock performance
as valuations of small caps relative to larger companies are at some of the most
attractive levels in many years. In the past, the small cap sector posted
dramatic gains following similar periods of underperformance. For example, small
caps more than doubled in 1975-76 and were up over 65% in 1990-91 after
declining about 20% in the preceding year. The acceleration of stock buybacks
and merger and acquisition activity in the small cap sector could provide a
catalyst for the small cap sector this year. Favorable small cap performance has
generally coincided with periods of strong cyclical growth, lower relative cost
of capital, and a more profitable business environment. While the cost of
capital for small cap companies relative to larger companies suggests a mixed
environment, the overall economic outlook for earnings growth and profitability
supports a favorable trend.
34
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Fund at a Glance as Of December 31, 1999
"We expect that our disciplined approach to stock selection and our systematic
approach to portfolio construction should enable us to target some of the most
attractive opportunities available, in the year ahead."
Portfolio
Management
-----------------
[PHOTO]
Tim M. Stevenson, CFA
Tenure: October 1999
[PHOTO]
Eric M. Teal
Tenure: October 1999
- --------------------------------------------------------------------------------
Performance and Returns/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 9/29/1999
Return Since Portfolio Inception 18.87%
YTD capital gain distributions per share $0.04
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
VA Special
Equity fund CPI Russell 2000
9/30/99 10,000 10,000 10,000
10/31/99 10,280 10,018 10,031
11/30/99 11,094 10,024 10,627
12/31/99 11,886 10,030 11,813
Comparison of a $10,000 investment in Evergreen VA Special Equity Fund/1/ versus
a similar investment in the Russell 2000 Index (Russell 2000) and the Consumer
Price Index (CPI).
The Russell 2000 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund fees.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
/1/ Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
35
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen Va Special Equity Fund
Portfolio Manager Interview
How did the Fund perform?
Launched on September 29, 1999, Evergreen VA Special Equity Fund ended its first
fiscal period on December 31, 1999. The Fund produced a strong return of 18.87%,
during that time, surpassing the Russell 2000 Index, which returned 18.44%.
Portfolio
Characteristics
---------------
(As of 12/31/1999)
Total Net Assets $3,058,683
Number of Holdings 149
Beta 0.88
P/E Ratio 24.8x
What was the investment environment like during the period?
The performance of small capitalization stocks varied widely during the year. In
the first three months of 1999, large cap stocks led the stock market's rise.
The NASDAQ Composite climbed 12.3% and the Dow Jones Industrial Average rose
7.0% versus a decline of 5.5% in the Russell 2000 Index and a 6.4% decline in
the Standard and Poor's Midcap 400 Index. In the second half of the year,
however, technology issues, particularly wireless communications and internet
related companies, as well as a strong IPO market, caused related small cap
stock prices to skyrocket. Venture capital money flowed from investors into many
small cap companies, strengthening corporate balance sheets and enhancing growth
potential. On the flipside, however, market leadership was narrow and
traditional "value" companies lagged significantly. In contrast to the
impressive gains posted by the Russell 2000, the Russell 2000 Value Index rose
only 1.5% in the final quarter of 1999.
Top 5 Industries
----------------
(as a percentage of 12/31/1999 net assets)
Information Services & Technology 9.2%
Finance & Insurance 9.2%
Retailing & Wholesale 6.8%
Healthcare Products & Services 5.8%
Communication Systems & Services 5.5%
How would you describe the strategy for the period?
The Fund was heavily weighted in the technology sector, actively employing its
"bottom up" strategy. Each stock selected for the Fund is subject to rigorous
qualitative and quantitative analysis, and must meet high expectations for total
return potential. All holdings are evaluated based on growth, value and momentum
and are closely monitored once they are positioned in the portfolio. During the
period, technology holdings drove the Fund's performance. Metromedia Fiber
Network and Clearnet Communications were our top-performers. Metromedia, a
provider of bandwidth fiber optic communications equipment, returned 96% in the
fourth quarter; and Clearnet, a wireless communications company, produced a 90%
gain for the same period.
36
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Portfolio Manager Interview
In December 1999, profit-taking reduced the momentum demonstrated by many
technology companies, causing us to reduce the Fund's position in that sector.
We reinvested assets in the financial industry, which we believe represents
significant value and is poised for a rebound. We also marginally boosted the
"value" characteristics of the Fund by trimming back some of our positions in
companies with extremely high earnings growth expectations. Our reasons for the
strategy change were twofold. First, our stock selection model directed us
toward stocks in the financial and industrial sectors versus technology issues.
Second, historically, value-oriented stocks have outperformed growth issues in
the small cap universe during the first calendar quarter.
Top 10 Holdings
---------------
(as a percentage of 12/31/1999 net assets)
NEXTLINK Communications, Inc., Cl. A 3.3%
Metromedia Fiber Network, Inc., Cl. A 2.7%
E.W. Blanch Holdings, Inc. 2.4%
Real Networks, Inc. 2.0%
Imperial Bancorp 1.9%
Mark IV Industries, Inc. 1.8%
Toro Co. 1.8%
Dain Rauscher Corp. 1.8%
Applebee's International, Inc. 1.7%
Pacific Sunwear Of California 1.5%
What is your outlook?
Looking forward, we believe the prospects for small cap growth stocks remain
bright. New technologies and the availability of venture capital continue to
provide significant opportunity for high returns. We expect that our disciplined
approach to stock selection and our systematic approach to portfolio
construction should enable us to target some of the most attractive
opportunities available in the year ahead.
37
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Fund at a Glance as of December 31, 1999
"We are optimistic about opportunities available in the high yield and foreign
sectors and believe the Fund's ability to diversify will enable us to build
solid returns in the coming year."
Portfolio
Management
------------------
[PHOTO]
Prescott B. Crocker, CFA
Tenure: March 1997
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 3/6/1997
Average Annual Returns
1 year 1.64%
Since Portfolio Inception 4.53%
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
VA Strategic
Income Fund CPI LBIGI LBABI
3/31/97 10,000 10,000 10,000 10,000
6/30/97 10,090 10,019 10,280 10,367
12/31/97 10,497 10,081 10,775 11,027
6/30/98 10,907 10,188 11,135 11,460
12/31/98 11,114 10,244 11,690 11,985
6/30/99 11,017 10,388 11,636 11,819
12/31/99 11,297 10,525 11,747 11,885
Comparison of a $10,000 investment in Evergreen VA Strategic Income Fund1 versus
a similar investment in the Lehman Brother's Intermediate Government Bond Index
(LBIGBI), the Lehman Brother's Aggregate Bond Index (LBABI), and the Consumer
Price Index (CPI).
The LBIGBI and the LBABI are unmanaged market indices which do not include
transaction costs associated with buying and selling securities nor any mutual
fund fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
1Past performance is no guarantee of future results. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
38
<PAGE>
EVERGREEN VARIABLE ANNUITY FUND
Evergreen VA Strategic Income Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Strategic Income Fund produced a total return of 1.64% for the
twelve-month period ended December 31, 1999. The Fund's benchmarks, the Lehman
Brothers Intermediate Government Bond Index and the Lehman Brothers Aggregate
Bond Index, returned 0.49% and -0.82% respectively. The investment period turned
out to be the second worst year for bonds in the twentieth century. The total
return of the 10-year U.S. Treasury was a -8.00%, and the total return of the
Salomon Brothers World Government Bond Market Index (represented in U.S.
dollars) was -8.30%. The total return of the Chase High Yield Index was 2.02%
for the same period.
As of December 31, 1999, the Fund was invested as follows: Corporate Bonds: 36%,
U.S. Treasuries: 30.6%, foreign bonds and yankee obligations: 28.3%, and cash
equivalents: 5.1%. Foreign corporate bonds and foreign government bonds each
comprised approximately 10% of net assets, and included Denmark and Germany.
Emerging market debt represented approximately 8% of assets and included Brazil
and Mexico. During the period, the Fund engaged in foreign exchange
transactions, including investments in the Canadian dollar, the Australian
dollar and the euro--the European currency uniting eleven countries.
Portfolio
Characteristics
---------------
(As of 12/31/1999)
Total Net Assets $18,075,915
Average Credit Quality A-
Effective Maturity 9.1 years
Average Duration 5.0 years
Portfolio Composition
---------------------
(as a percentage of 12/31/1999 net assets)
Corporate Bonds 36.0%
U.S. Treasury Obligations 30.6%
Yankee Obligations 15.1%
Foreign Bonds (Non U.S. Dollars) 13.2%
Other Investments, and
Other Assets and Liabilities, net 5.1%
What was the investment environment like during the twelve-month period?
The investment environment for U.S. bonds was extraordinarily difficult during
the period. Conditions changed sharply from the first six months of 1999 to the
second half of the year. As we began 1999, the world's financial markets had
just begun to stabilize from 1998's international financial crisis. The Federal
Reserve Board had lowered interest rates to historically low levels to keep the
U.S. economy strong enough to fuel global growth. At the time, many investors
expected fragile foreign recoveries to drain U.S. economic strength. The U.S.
economy remained robust, however, and many foreign economies recharged faster
and stronger than many investors expected. Assured that the strength was
sustainable, investors' attention turned to tight labor markets and rising
commodity prices. Concerns emerged that the economy could overheat and rekindle
inflation; and with that outlook, investors pushed interest rates higher and
bond prices lower. The Federal Reserve Board raised interest rates three times
during the period. High yield bond prices improved early in the year, but
reversed course as investors focused on the
39
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Portfolio Manager Interview
changing interest rate environment, a rising default rate and reduced liquidity.
Much of the rise in the default rate could be attributed to the poor quality of
the financings that had been underwritten in 1997 and 1998. At that time, low
interest rates, a strong economy and heavy cash flows into the high yield bond
market created extraordinary demand, causing many investors to stretch for yield
and relax their credit standards. Underwriters, too, offered financings that
typically would not have met their requirements in an attempt to meet the
unusually high demand.
While investors put increasing emphasis on credit strength and liquidity,
reduced market liquidity was putting downward pressure on prices. High yield
mutual funds experienced substantial cash outflows during the summer and early
fall. Further, Wall Street firms bid cautiously, which eroded price support.
Still feeling the effects of 1998's financial crisis, dealers were working with
restricted capital and, as a result, were reluctant to take on bigger
inventories. Liquidity dropped along with prices.
In the foreign sector, many economies strengthened considerably, driving their
interest rates higher and bond prices lower. Higher interest rates in the United
States also helped drive up interest rates abroad. In Europe, the outlook varied
by country, although prospects for overall growth improved by the fourth quarter
of 1999. The euro, the European currency uniting eleven countries, was launched
on January 1, 1999. The euro declined in value versus the U.S. dollar for most
of the year, because of higher interest rates in the United States, as well as
for an outlook of ongoing U.S. economic strength. By year-end, however, with
expectations of stronger European growth and a tighter monetary policy slowing
U.S. growth, investors pushed the euro higher.
Emerging markets was a bright spot in the fixed-income market. Having incurred
the brunt of the upheaval in 1998's international financial crisis, emerging
market bond prices improved substantially when conditions stabilized and
economic growth resumed. For the fiscal period, the J.P. Morgan Sovereign
Emerging Market Debt Index rose an impressive 23%. In particular, Asian
economies recovered faster and heartier than expected.
We focused on emphasizing opportunities in the foreign and high yield sectors,
while limiting interest rate risk. We took advantage of the strength in emerging
markets by maximizing the Fund's position in that sector. In particular, the
Fund's holdings in Brazil performed well. The country benefited from the rise in
oil prices and a rebound in confidence after its currency was devalued early in
the year. In the high yield sector, we selected bonds that met our rigorous
credit standards, focusing on industries that we believed had strong growth
potential. We emphasized telecommunication services and equipment, as well as
gaming, paper and packaging, and oil/energy. The Fund had no investments in
securities or industries that significantly underperformed. We met the Fund's
requirement to have at least 20% of its net assets in U.S. Treasuries, but
maintained a short duration to limit interest rate risk. Duration, expressed in
years, measures a fund's sensitivity to changes in interest rates. Shortening
duration reduces interest rate sensitivity, and lengthening duration increases a
fund's sensitivity to interest rate changes. As of December 31, 1999, the Fund's
average rating was "A-".
40
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Portfolio Manager Interview
Portfolio Quality
---------------C--
(as a percentage of 12/31/1999 portfolio assets)
AAA 39.4%
AA 2.5%
BBB 2.7%
BB 13.4%
B 37.5%
CCC 4.5%
What is your outlook?
Looking ahead, we are cautious about the direction of interest rates over the
near-term. We expect the Federal Reserve Board to continue to tighten monetary
policy in an effort to slow economic growth and cool inflation pressures. We are
optimistic about opportunities available in the high yield and foreign sectors
and believe the Fund's ability to diversify will enable us to build solid
returns in the coming year.
With its attractive yield advantages, we think the high yield sector offers
substantial opportunity. Some high yield bonds currently offer twice the yield
of their U.S. Treasury counterparts. We also think several industries, such as
oil/energy, telecommunication services and equipment, cable/other video
distribution, and paper and packaging have high growth potential, which should
cause prices to appreciate.
We anticipate a more favorable investment environment in the foreign sector this
year, as well, opening up greater opportunity in currency transactions. We
expect to continue to correlate the Fund's currency holdings with those
countries that should benefit from rising commodity prices, particularly Canada
and Australia. We also think the euro can produce solid returns this
year--particularly in light of its weakness in 1999--with the resumption of
growth in Europe, ongoing low inflation and stronger European stock markets.
41
<PAGE>
EVERGREEN
Variable Annuity Trust
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period Ended
December 31, 1999 (a)
<S> <C>
EQUITY INDEX FUND
Net asset value, beginning of period $ 10.00
-------
Income from investment operations
Net investment income 0.03
Net realized and unrealized gains on securities and
futures contracts 1.51
-------
Total from investment operations 1.54
-------
Distributions to shareholders from
Net investment income (0.03)
Net realized gains (0.03)
-------
Total distributions (0.06)
-------
Net asset value, end of period $ 11.48
-------
Total return* 15.47%
Ratios and supplemental data
Net assets, end of period (thousands) $18,685
Ratios to average net assets
Expenses** 0.31%+
Net investment income 1.34%+
Portfolio turnover rate 5%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1999 # 1998 # 1997 # 1996 (b) #
<S> <C> <C> <C> <C>
EVERGREEN FUND
Net asset value, beginning of period $ 15.31 $ 14.89 $ 11.41 $ 10.00
------- ------- ------- -------
Income from investment operations
Net investment income 0.09 0.07 0.06 0.05
Net realized and unrealized gains on
securities 3.36 0.86 4.15 1.44
------- ------- ------- -------
Total from investment operations 3.45 0.93 4.21 1.49
------- ------- ------- -------
Distributions to shareholders from
Net investment income (0.11) 0 (0.05) (0.05)
Net realized gains (1.34) (0.51) (0.68) (0.03)
------- ------- ------- -------
Total distributions (1.45) (0.51) (0.73) (0.08)
------- ------- ------- -------
Net asset value, end of period $ 17.31 $ 15.31 $ 14.89 $ 11.41
------- ------- ------- -------
Total return* 23.03% 6.44% 37.16% 14.90%
Ratios and supplemental data
Net assets, end of period (thousands) $69,774 $45,820 $21,600 $10,862
Ratios to average net assets
Expenses** 1.02% 1.01% 1.01% 1.00%+
Net investment income 0.57% 0.49% 0.42% 0.87%+
Portfolio turnover rate 111% 16% 32% 6%
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
(b) For the period from March 1, 1996 (commencement of operations) to December
31, 1996.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
42
<PAGE>
EVERGREEN
Variable Annuity Trust
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1999 1998 # 1997 # 1996 (a) #
<S> <C> <C> <C> <C>
FOUNDATION FUND
Net asset value, beginning of period $ 14.47 $ 13.54 $ 11.31 $ 10.00
-------- ------- ------- -------
Income from investment operations
Net investment income 0.28 0.35 0.26 0.16
Net realized and unrealized gains on
securities 1.27 1.07 2.86 1.37
-------- ------- ------- -------
Total from investment operations 1.55 1.42 3.12 1.53
-------- ------- ------- -------
Distributions to shareholders from
Net investment income (0.28) (0.26) (0.24) (0.16)
Net realized gains (0.04) (0.23) (0.65) (0.06)
-------- ------- ------- -------
Total distributions (0.32) (0.49) (0.89) (0.22)
-------- ------- ------- -------
Net asset value, end of period $ 15.70 $ 14.47 $ 13.54 $ 11.31
-------- ------- ------- -------
Total return* 10.64% 10.56% 27.80% 15.30%
Ratios and supplemental data
Net assets, end of period (thousands) $145,566 $78,371 $31,840 $15,812
Ratios to average net assets
Expenses** 0.95% 1.00% 1.01% 1.00%+
Net investment income 2.29% 2.44% 2.15% 2.70%+
Portfolio turnover rate 77% 10% 26% 12%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1999 1998 # 1997 (b) #
<S> <C> <C> <C>
GLOBAL LEADERS FUND
Net asset value, beginning of period $ 12.76 $10.79 $10.00
------- ------ ------
Income from investment operations
Net investment income 0.06 0.10 0.11
Net realized and unrealized gains on securities
and foreign currency related transactions 3.09 1.94 0.77
------- ------ ------
Total from investment operations 3.15 2.04 0.88
------- ------ ------
Distributions to shareholders from
Net investment income (0.06) (0.07) (0.06)
Net realized gains 0 0 (0.03)
------- ------ ------
Total distributions (0.06) (0.07) (0.09)
------- ------ ------
Net asset value, end of period $ 15.85 $12.76 $10.79
------- ------ ------
Total return* 24.72% 18.92% 8.80%
Ratios and supplemental data
Net assets, end of period (thousands) $21,022 $9,583 $2,899
Ratios to average net assets
Expenses** 1.01% 1.04% 1.05%+
Net investment income 0.58% 0.89% 1.15%+
Portfolio turnover rate 17% 12% 11%
</TABLE>
(a) For the period from March 1, 1996 (commencement of operations) to December
31, 1996.
(b) For the period from March 6, 1997 (commencement of operations) to December
31, 1997.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
43
<PAGE>
EVERGREEN
Variable Annuity Trust
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1999 # 1998 # 1997 # 1996 (a) #
<S> <C> <C> <C> <C>
GROWTH AND INCOME FUND
Net asset value, beginning of period $ 15.58 $ 15.29 $ 11.83 $ 10.00
------- ------- ------- -------
Income from investment operations
Net investment income 0.07 0.16 0.08 0.06
Net realized and unrealized gains on
securities and foreign currency
related transactions 2.74 0.56 4.01 1.84
------- ------- ------- -------
Total from investment operations 2.81 0.72 4.09 1.90
------- ------- ------- -------
Distributions to shareholders from
Net investment income (0.06) (0.13) (0.07) (0.06)
Net realized gains (0.89) (0.30) (0.56) (0.01)
------- ------- ------- -------
Total distributions (0.95) (0.43) (0.63) (0.07)
------- ------- ------- -------
Net asset value, end of period $ 17.44 $ 15.58 $ 15.29 $ 11.83
------- ------- ------- -------
Total return* 18.57% 4.77% 34.66% 19.00%
Ratios and supplemental data
Net assets, end of period (thousands) $84,067 $60,576 $31,088 $14,484
Ratios to average net assets
Expenses** 1.01% 1.01% 1.01% 1.00%+
Net investment income 0.44% 1.02% 0.59% 1.00%+
Portfolio turnover rate 66% 13% 18% 2%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1999 # 1998 (b) #
<S> <C> <C>
INTERNATIONAL GROWTH FUND
Net asset value, beginning of period $ 9.39 $ 10.00
----------- -----------
Income from investment operations
Net investment income 0.09 0.03
Net realized and unrealized gains or losses on
securities and foreign currency related
transactions 3.48 (0.64)
----------- -----------
Total from investment operations 3.57 (0.61)
----------- -----------
Distributions to shareholders from
Net investment income (0.14) 0
Net realized gains (0.10) 0
----------- -----------
Total distributions (0.24) 0
----------- -----------
Net asset value, end of period $ 12.72 $ 9.39
----------- -----------
Total return* 38.22% (6.10%)
Ratios and supplemental data
Net assets, end of period (thousands) $ 3,782 $ 1,425
Ratios to average net assets
Expenses** 1.03% 1.02%+
Net investment income 0.87% 1.05%+
Portfolio turnover rate 144% 59%
</TABLE>
(a) For the period from March 1, 1996 (commencement of operations) to December
31, 1996.
(b) For the period from August 17, 1998 (commencement of operations) to Decem-
ber 31, 1998.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
44
<PAGE>
EVERGREEN
Variable Annuity Trust
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period Ended
December 31, 1999 (a) #
<S> <C>
MASTERS FUND
Net asset value, beginning of period $ 10.00
-------
Income from investment operations
Net investment income 0.01
Net realized and unrealized gains on securities and
foreign currency related transactions 2.74
-------
Total from investment operations 2.75
-------
Distributions to shareholders from
Net investment income (0.01)
Net realized gains (0.16)
-------
Total distributions (0.17)
-------
Net asset value, end of period $ 12.58
-------
Total return* 27.58%
Ratios and supplemental data
Net assets, end of period (thousands) $18,873
Ratios to average net assets
Expenses** 1.00%+
Net investment income 0.15%+
Portfolio turnover rate 83%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1999 # 1998 # 1997 (b) #
<S> <C> <C> <C>
OMEGA FUND
Net asset value,
beginning of period $ 13.57 $11.10 $10.00
------- ------ ------
Income from investment
operations
Net investment loss (0.06) (0.04) (0.06)
Net realized and
unrealized gains on
securities 6.47 2.51 1.16
------- ------ ------
Total from investment
operations 6.41 2.47 1.10
------- ------ ------
Net asset value, end of
period $ 19.98 $13.57 $11.10
------- ------ ------
Total return* 47.24% 22.25% 11.00%
Ratios and supplemental
data
Net assets, end of
period (thousands) $24,176 $4,039 $1,868
Ratios to average net
assets
Expenses** 0.96% 1.02% 1.06%+
Net investment loss (0.35%) (0.33%) (0.74%)+
Portfolio turnover rate 120% 49% 39%
</TABLE>
(a) For the period from January 29, 1999 (commencement of operations) to Decem-
ber 31, 1999.
(b) For the period from March 6, 1997 (commencement of operations) to December
31, 1997.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
45
<PAGE>
EVERGREEN
Variable Annuity Trust
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1999 1998 (a) #
<S> <C> <C>
SMALL CAP VALUE FUND
Net asset value, beginning of period $ 9.58 $ 10.00
----------- -----------
Income from investment operations
Net investment income 0.13 0.15
Net realized and unrealized gains or losses on
securities 1.02 (0.45)
----------- -----------
Total from investment operations 1.15 (0.30)
----------- -----------
Distributions to shareholders from
Net investment income (0.13) (0.11)
Net realized gains (0.46) (0.01)
----------- -----------
Total distributions (0.59) (0.12)
----------- -----------
Net asset value, end of period $ 10.14 $ 9.58
----------- -----------
Total return* 12.07% (2.86%)
Ratios and supplemental data
Net assets, end of period (thousands) $ 4,958 $ 2,282
Ratios to average net assets
Expenses** 1.01% 1.02%+
Net investment income 1.69% 2.49%+
Portfolio turnover rate 65% 16%
</TABLE>
<TABLE>
<CAPTION>
Period Ended
December 31, 1999 (b)
<S> <C>
SPECIAL EQUITY FUND
Net asset value, beginning of period $10.00
------
Income from investment operations
Net realized and unrealized gains on securities 1.88
------
Total from investment operations 1.88
------
Distributions to shareholders from
Net realized gains (0.04)
------
Total distributions (0.04)
------
Net asset value, end of period $11.84
------
Total return* 18.87%
Ratios and supplemental data
Net assets, end of period (thousands) $3,059
Ratios to average net assets
Expenses** 1.03%+
Net investment loss (0.07%)+
Portfolio turnover rate 104%
</TABLE>
(a) For the period from May 1, 1998 (commencement of operations) to December
31, 1998.
(b) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
46
<PAGE>
EVERGREEN
Variable Annuity Trust
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1999 # 1998 # 1997 (a) #
<S> <C> <C> <C>
STRATEGIC INCOME FUND
Net asset value, beginning of period $ 10.39 $ 10.20 $10.00
------- ------- ------
Income from investment operations
Net investment income 0.73 0.64 0.32
Net realized and unrealized gains or losses on
securities and foreign currency related
transactions (0.56) (0.04) 0.21
------- ------- ------
Total from investment operations 0.17 0.60 0.53
------- ------- ------
Distributions to shareholders from
Net investment income 0 (0.41) (0.31)
Net realized gains 0 0 (0.02)
------- ------- ------
Total distributions 0 (0.41) (0.33)
------- ------- ------
Net asset value, end of period $ 10.56 $ 10.39 $10.20
------- ------- ------
Total return* 1.64% 5.91% 5.28%
Ratios and supplemental data
Net assets, end of period (thousands) $18,076 $11,182 $2,204
Ratios to average net assets
Expenses** 0.84% 1.02% 1.02%+
Net investment income 7.02% 6.05% 5.34%+
Portfolio turnover rate 205% 231% 119%
</TABLE>
(a) For the period from March 6, 1997 (commencement of operations) to December
31, 1997.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
47
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 92.2%
Advertising & Related Services - 0.1%
370 Interpublic Group of Companies, Inc.................... $ 21,344
-----------
Aerospace & Defense - 1.2%
1,350 Boeing Co.............................................. 56,109
260 General Dynamics Corp.................................. 13,715
300 Goodrich BF Co......................................... 8,250
1,131 Honeywell International, Inc. ......................... 65,245
450 Lockheed Martin Corp. ................................. 9,844
100 Northrop Grumman Corp.................................. 5,406
550 Raytheon Co., Cl. B.................................... 14,609
250 Rockwell International Corp............................ 11,969
630 United Technologies Corp............................... 40,950
-----------
226,097
-----------
Automotive Equipment & Manufacturing - 1.2%
150 Cooper Tire & Rubber Co................................ 2,334
200 Dana Corp.............................................. 5,987
740 Delphi Automotive Systems Corp. ....................... 11,655
1,700 Ford Motor Co.......................................... 90,844
890 General Motors Corp. .................................. 64,692
200 Genuine Parts Co....................................... 4,963
260 Goodyear Tire & Rubber Co. ............................ 7,329
100 Johnson Controls, Inc.................................. 5,687
150 * Navistar International Corp., Inc. .................. 7,106
100 Paccar, Inc............................................ 4,431
500 Pep Boys-Manny Moe & Jack.............................. 4,563
150 TRW, Inc............................................... 7,791
-----------
217,382
-----------
Banks - 4.4%
520 AmSouth Bancorp........................................ 10,042
1,000 Bank of New York Co., Inc.............................. 40,000
1,550 Bank One Corp. ........................................ 49,697
2,410 BankAmerica Corp....................................... 120,952
420 BB&T Corp. ............................................ 11,497
1,140 Chase Manhattan Corp................................... 88,564
200 Comerica, Inc.......................................... 9,338
400 Fifth Third Bancorp.................................... 29,350
1,400 First Union Corp.**.................................... 45,937
1,300 Firstar Corp........................................... 27,462
1,405 FleetBoston Financial Corp. ........................... 48,912
210 Golden West Financial Corp. ........................... 7,035
400 Huntington Bancshares, Inc............................. 9,550
590 KeyCorp................................................ 13,054
850 Mellon Financial Corp.................................. 28,953
810 National City Corp. ................................... 19,187
300 Northern Trust Corp. .................................. 15,900
160 Old Kent Financial Corp. .............................. 5,660
400 PNC Bank Corp. ........................................ 17,800
400 Regions Financial Corp................................. 10,050
140 Republic New York Corp. ............................... 10,080
200 SouthTrust Corp........................................ 7,563
210 State Street Corp...................................... 15,343
200 Summit Bancorp......................................... 6,125
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Banks - continued
420 Suntrust Banks, Inc.................................... $ 28,901
300 Synovus Financial Corp................................. 5,963
1,000 U.S. Bancorp........................................... 23,812
240 Union Planters Corp. .................................. 9,465
260 Wachovia Corp.......................................... 17,680
2,310 Wells Fargo Co......................................... 93,411
-----------
827,283
-----------
Building, Construction & Furnishings - 0.3%
50 Armstrong World Industries, Inc........................ 1,669
100 Centex Corp............................................ 2,469
310 Deere & Co............................................. 13,446
200 Fleetwood Enterprises, Inc. ........................... 4,125
400 Foster Wheeler Corp.................................... 3,550
580 Masco Corp. ........................................... 14,717
450 Owens Corning.......................................... 8,691
200 Sherwin Williams Co.................................... 4,200
100 Springs Industries, Inc. .............................. 3,994
-----------
56,861
-----------
Business Equipment & Services - 0.9%
810 Automatic Data Processing, Inc......................... 43,639
210 * Computer Sciences Corp............................... 19,871
100 De Luxe Corp........................................... 2,744
350 Dun & Bradstreet Corp.................................. 10,325
150 Equifax, Inc........................................... 3,534
560 First Data Corp........................................ 27,615
850 Ikon Office Solutions, Inc............................. 5,791
320 Paychex, Inc........................................... 12,800
350 * Seagate Technology................................... 16,297
200 * Thermo Electron Corp................................. 3,000
870 Xerox Corp. ........................................... 19,738
-----------
165,354
-----------
Capital Goods - 0.2%
470 Caterpillar, Inc....................................... 22,119
200 Ingersoll Rand Co...................................... 11,013
-----------
33,132
-----------
Chemical & Agricultural Products - 1.2%
350 Air Products & Chemicals, Inc.......................... 11,747
290 Dow Chemical Co........................................ 38,751
1,420 Du Pont (E. I.) De Nemours & Co. ...................... 93,542
100 Eastman Chemical Co.................................... 4,769
150 Engelhard Corp......................................... 2,831
50 * FMC Corp............................................. 2,866
450 * Grace (W.R.) & Co.................................... 6,244
100 Great Lakes Chemical Corp.............................. 3,819
100 Hercules, Inc.......................................... 2,787
250 PPG Industries, Inc. .................................. 15,641
200 Praxair, Inc........................................... 10,062
350 Rohm & Haas Co......................................... 14,241
</TABLE>
48
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Chemical & Agricultural Products - continued
100 Sigma-Aldrich Corp. ................................... $ 3,006
200 Union Carbide Corp..................................... 13,350
-----------
223,656
-----------
Communication Systems & Services - 5.7%
280 * Andrew Corp. ........................................ 5,302
4,600 * Cisco Systems, Inc................................... 492,775
4,400 Lucent Technologies, Inc............................... 329,175
3,900 * MCI WorldCom, Inc. .................................. 206,944
560 * Tellabs, Inc. ....................................... 35,945
-----------
1,070,141
-----------
Consumer Products & Services - 3.0%
200 Alberto Culver Co., Cl. B.............................. 5,162
100 American Greetings Corp., Cl. A........................ 2,363
300 Avon Products, Inc. ................................... 9,900
100 Black & Decker Corp.................................... 5,225
940 * Cendant Corp......................................... 24,969
310 Clorox Co. ............................................ 15,616
810 Colgate-Palmolive Co. ................................. 52,650
410 Eastman Kodak Co. ..................................... 27,162
250 Fort James Corp. ...................................... 6,844
1,550 Gillette Co............................................ 63,841
100 H & R Block, Inc. ..................................... 4,375
200 Hasbro, Inc. .......................................... 3,812
100 International Flavors & Fragrances, Inc................ 3,775
200 Jostens, Inc........................................... 4,862
100 Liz Claiborne, Inc..................................... 3,763
450 Mattel, Inc............................................ 5,906
150 Maytag Corp............................................ 7,200
370 Newell Rubbermaid, Inc................................. 10,730
370 Nike, Inc., Cl. B...................................... 18,338
200 * Pactiv Corp. ........................................ 2,125
200 Polaroid Corp. ........................................ 3,763
1,790 Procter & Gamble Co.................................... 196,117
300 Service Corp. International............................ 2,081
100 Stanley Works.......................................... 3,013
210 Tupperware Corp........................................ 3,557
1,250 Unilever NV............................................ 68,047
200 UST, Inc............................................... 5,037
100 Whirlpool Corp......................................... 6,506
-----------
566,739
-----------
Diversified Companies - 0.9%
100 Cooper Industries, Inc. ............................... 4,044
100 Fluor Corp............................................. 4,587
100 ITT Industries, Inc. .................................. 3,344
530 Minnesota Mining & Manufacturing Co. .................. 51,874
100 National Service Industries, Inc....................... 2,950
150 * Owens Illinois, Inc.................................. 3,759
200 Textron, Inc........................................... 15,337
2,290 Tyco International, Ltd................................ 89,024
-----------
174,919
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Electrical Equipment & Services - 4.4%
570 Emerson Electric Co................................... $ 32,704
4,590 General Electric Co. ................................. 710,302
200 Molex, Inc............................................ 11,338
380 * Solectron Corp...................................... 36,147
100 Tektronix, Inc. ...................................... 3,888
150 Thomas & Betts Corp................................... 4,781
420 * Xilinx, Inc......................................... 19,097
-----------
818,257
-----------
Electronic Equipment & Services - 0.7%
150 * KLA-Tencor Corp..................................... 16,706
220 * Teradyne, Inc. ..................................... 14,520
1,080 Texas Instruments, Inc................................ 104,625
-----------
135,851
-----------
Energy - 0.1%
500 Occidental Petroleum Corp............................. 10,812
-----------
Environmental Services - 0.1%
750 * Allied Waste Industries, Inc........................ 6,609
100 Millipore Corp........................................ 3,863
850 Waste Management, Inc................................. 14,609
-----------
25,081
-----------
Finance & Insurance - 7.7%
200 Aetna, Inc. .......................................... 11,163
350 AFLAC, Inc. .......................................... 16,516
1,100 Allstate Corp......................................... 26,400
590 American Express Co................................... 98,087
330 American General Corp. ............................... 25,039
2,130 American International Group, Inc. ................... 230,306
400 Aon Corp.............................................. 16,000
1,000 Associates First Capital Corp., Cl. A................. 27,437
157 Bear Stearns Companies, Inc. ......................... 6,712
260 Capital One Financial Corp............................ 12,529
270 Chubb Corp. .......................................... 15,204
240 CIGNA Corp. .......................................... 19,335
200 Cincinnati Financial Corp. ........................... 6,238
4,720 Citigroup, Inc. ...................................... 262,255
550 Conseco, Inc.......................................... 9,831
150 Countrywide Credit Industries, Inc.................... 3,788
950 Federal Home Loan Mortgage Corp. ..................... 44,709
1,500 Federal National Mortgage Assoc. ..................... 93,656
330 Franklin Resources, Inc. ............................. 10,581
300 Hartford Financial Services Group, Inc. .............. 14,213
630 Household International, Inc. ........................ 23,468
230 J.P. Morgan & Co., Inc................................ 29,124
140 Jefferson Pilot Corp. ................................ 9,555
150 Lehman Brothers Holdings, Inc. ....................... 12,703
260 Lincoln National Corp. ............................... 10,400
140 Loews Corp. .......................................... 8,496
350 Marsh & McLennan Co., Inc............................. 33,491
130 MBIA, Inc. ........................................... 6,866
1,250 MBNA Corp. ........................................... 34,062
</TABLE>
49
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Finance & Insurance - continued
530 Merrill Lynch & Co., Inc............................... $ 44,255
140 MGIC Investment Corp. ................................. 8,426
800 Morgan Stanley, Dean Witter & Co....................... 114,200
190 Paine Webber Group, Inc................................ 7,374
90 Potlatch Corp. ........................................ 4,016
160 Price (T.) Rowe & Associates, Inc. .................... 5,910
100 Progressive Corp. Ohio................................. 7,313
190 Providian Financial Corp............................... 17,302
150 SAFECO Corp. .......................................... 3,731
1,200 Schwab (Charles) & Co., Inc............................ 46,050
200 SLM Holding Corp....................................... 8,450
400 St. Paul Companies, Inc................................ 13,475
150 Torchmark Corp......................................... 4,359
310 UnumProvident Corp. ................................... 9,939
770 Washington Mutual, Inc................................. 20,020
-----------
1,432,984
-----------
Food & Beverage Products - 4.3%
650 Albertsons, Inc........................................ 20,962
610 Anheuser Busch Companies, Inc.......................... 43,234
810 Archer Daniels Midland Co. ............................ 9,872
370 Bestfoods.............................................. 19,448
90 Brown Forman Corp., Cl. B.............................. 5,152
570 Campbell Soup Co....................................... 22,052
3,530 Coca Cola Co. ......................................... 205,622
650 Coca Cola Enterprises, Inc............................. 13,081
640 Conagra, Inc. ......................................... 14,440
50 Coors Adolph Co., Cl. B................................ 2,625
150 Darden Restaurants, Inc................................ 2,719
200 Fortune Brands, Inc.................................... 6,612
400 General Mills, Inc..................................... 14,300
100 Great Atlantic & Pacific Tea, Inc...................... 2,788
470 H.J. Heinz Co.......................................... 18,712
250 Hershey Foods Corp..................................... 11,875
530 Kellogg Co............................................. 16,331
1,100 * Kroger Co. .......................................... 20,762
1,920 McDonald's Corp........................................ 77,400
350 Nabisco Group Holding Corp............................. 3,719
1,960 Pepsico, Inc........................................... 69,090
3,280 Philip Morris Companies, Inc........................... 76,055
200 Quaker Oats Co......................................... 13,125
550 Ralston Purina Co...................................... 15,331
1,200 Sara Lee Corp. ........................................ 26,475
650 Seagram Co., Ltd....................................... 29,209
430 SYSCO Corp............................................. 17,012
200 * Tricon Global Restaurants, Inc....................... 7,725
150 Wendy's International, Inc............................. 3,094
150 Winn Dixie Stores, Inc. ............................... 3,591
150 Wrigley (WM.) Junior Co................................ 12,441
-----------
804,854
-----------
Forest Products - 0.0%
150 Willamette Industries, Inc. ........................... 6,966
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Gold Mining - 0.1%
800 Homestake Mining Co. .................................. $ 6,250
350 Placer Dome, Inc....................................... 3,762
-----------
10,012
-----------
Healthcare Products & Services - 8.7%
2,190 Abbott Laboratories.................................... 79,524
180 Allergan, Inc. ........................................ 8,955
100 * Alza Corp............................................ 3,463
1,810 American Home Products Corp. .......................... 71,382
1,430 * Amgen, Inc........................................... 85,889
50 Bard C R, Inc. ........................................ 2,650
100 Bausch & Lomb, Inc..................................... 6,844
380 Baxter International, Inc.............................. 23,869
200 Biomet, Inc............................................ 8,000
540 * Boston Scientific Corp. ............................. 11,813
2,800 Bristol-Myers Squibb Co. .............................. 179,725
360 Cardinal Health, Inc................................... 17,235
800 Columbia / HCA Healthcare Corp......................... 23,450
400 * Guidant Corp. ....................................... 18,800
500 * HEALTHSOUTH Corp..................................... 2,688
350 * Humana, Inc.......................................... 2,866
500 IMS Health, Inc. ...................................... 13,594
1,910 Johnson & Johnson...................................... 177,869
1,500 Lilly (Eli) & Co....................................... 99,750
100 Mallinckrodt, Inc...................................... 3,181
350 * Manor Care, Inc...................................... 5,600
470 McKesson HBOC, Inc. ................................... 10,604
1,650 Medtronic, Inc. ....................................... 60,122
3,300 Merck & Co., Inc....................................... 221,306
900 Monsanto Co. .......................................... 32,062
130 PE Corp-PE Biosystems Group............................ 15,641
5,370 Pfizer, Inc............................................ 174,189
710 Pharmacia & Upjohn, Inc................................ 31,950
180 * Quintiles Transnational Corp. ....................... 3,364
2,070 Schering-Plough Corp................................... 87,328
80 Shared Medical System Corp............................. 4,075
100 * St. Jude Medical, Inc. .............................. 3,069
350 * Tenet Healthcare Corp................................ 8,225
300 United Healthcare Corp. ............................... 15,937
1,200 Warner-Lambert Co. .................................... 98,325
100 * Watson Pharmaceuticals, Inc. ........................ 3,581
90 * Wellpoint Health Networks, Inc., Cl. A............... 5,934
-----------
1,622,859
-----------
Industrial Specialty Products & Services - 0.8%
150 * Advanced Micro Devices, Inc.......................... 4,341
100 Bemis Co., Inc......................................... 3,488
320 Corning, Inc. ......................................... 41,260
150 Crane Co............................................... 2,981
50 Cummins Engine, Inc.................................... 2,416
150 Danaher Corp........................................... 7,237
270 Dover Corp............................................. 12,251
</TABLE>
50
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Industrial Specialty Products & Services - continued
100 Eaton Corp. ........................................... $ 7,262
150 Ecolab, Inc. .......................................... 5,869
390 Illinois Tool Works, Inc............................... 26,349
260 Leggett & Platt, Inc................................... 5,574
550 * McDermott International, Inc. ....................... 4,984
150 Pall Corp. ............................................ 3,234
140 Parker Hannifin Corp................................... 7,184
90 Perkinelmer, Inc....................................... 3,752
100 Snap-on, Inc. ......................................... 2,656
210 Timken Co.............................................. 4,292
100 Vulcan Materials Co. .................................. 3,994
-----------
149,124
-----------
Information Services & Technology - 18.1%
470 * 3Com Corp............................................ 22,090
140 * Adaptec, Inc. ....................................... 6,983
160 Adobe Systems, Inc. ................................... 10,760
3,000 * America Online, Inc.................................. 226,312
230 * Analog Devices, Inc.................................. 21,390
210 * Apple Computer....................................... 21,591
500 * Applied Materials, Inc............................... 63,344
100 Autodesk, Inc.......................................... 3,375
310 * BMC Software, Inc.................................... 24,781
200 * Cabletron Systems, Inc. ............................. 5,200
150 * Ceridian Corp. ...................................... 3,234
110 * Citrix Systems, Inc. ................................ 13,530
2,370 Compaq Computer Corp. ................................. 64,138
700 Computer Associates International, Inc................. 48,956
470 * Compuware Corp. ..................................... 17,508
90 * Comverse Technology, Inc. ........................... 13,028
3,580 * Dell Computer Corp. ................................. 182,580
650 Electronic Data Systems Corp. ......................... 43,509
1,400 * EMC Corp............................................. 152,950
410 * Gateway, Inc. ....................................... 29,546
1,400 Hewlett-Packard Co. ................................... 159,512
4,680 Intel Corp. ........................................... 385,222
2,550 International Business Machines Corp. ................. 275,400
200 * Lexmark International Group, Inc., Cl. A............. 18,100
190 * LSI Logic............................................ 12,825
380 * Micron Technology, Inc. ............................. 29,545
7,230 * Microsoft Corp....................................... 844,102
200 * National Semiconductor Corp.......................... 8,563
200 * Network Appliance, Inc. ............................. 16,613
440 * Novell, Inc.......................................... 17,573
2,080 * Oracle Systems Corp. ................................ 233,090
450 * Parametric Technology Corp........................... 12,178
250 * Peoplesoft, Inc...................................... 5,328
250 * Silicon Graphics, Inc. .............................. 2,453
2,220 * Sun Microsystems, Inc................................ 171,911
450 * Unisys Corp.......................................... 14,372
450 * Yahoo!, Inc. ........................................ 194,709
-----------
3,376,301
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Iron & Steel - 0.0%
50 * Bethlehem Steel Corp................................. $ 419
-----------
Leisure & Tourism - 0.3%
100 Brunswick Corp......................................... 2,225
850 Carnival Corp., Cl. A.................................. 40,641
670 Hilton Hotels Corp..................................... 6,449
200 * Mirage Resorts, Inc. ................................ 3,062
-----------
52,377
-----------
Metals & Mining - 0.1%
510 Barrick Gold Corp...................................... 9,021
200 Newmont Mining Corp.................................... 4,900
-----------
13,921
-----------
Machinery - Diversified - 0.0%
200 Milacron, Inc.......................................... 3,075
-----------
Manufacturing - Distributing - 0.0%
50 Briggs & Stratton Corp................................. 2,681
-----------
Metal Products & Services - 0.5%
360 Alcan Aluminum Ltd..................................... 14,827
480 Alcoa, Inc. ........................................... 39,840
100 Allegheny Technologies, Inc. .......................... 2,244
330 Becton Dickinson & Co. ................................ 8,827
150 Crown Cork & Seal Co., Inc............................. 3,356
200 * Freeport McMoran Copper & Gold, Inc., Cl. B.......... 4,225
200 Inco Ltd............................................... 4,700
100 Nucor Corp............................................. 5,481
100 Phelps Dodge Corp...................................... 6,713
80 Reynolds Metals Co. ................................... 6,130
100 USX United States Steel Group.......................... 3,300
200 Worthington Industries, Inc............................ 3,313
-----------
102,956
-----------
Office Equipment & Supplies - 0.1%
350 Pitney Bowes, Inc...................................... 16,909
-----------
Oil/Energy - 4.8%
100 Amerada Hess Corp. .................................... 5,675
150 Anadarko Petroleum Corp. .............................. 5,119
200 Apache Corp............................................ 7,388
100 Ashland, Inc........................................... 3,294
420 Atlantic Richfield Co.................................. 36,330
280 Burlington Resources, Inc.............................. 9,257
910 Chevron Corp........................................... 78,829
250 Coastal Corp........................................... 8,859
900 Conoco, Inc., Cl. B.................................... 22,387
160 Consolidated Natural Gas Co............................ 10,390
400 El Paso Energy Corp.................................... 15,525
1,000 Enron Corp. ........................................... 44,375
4,728 Exxon Mobil Corp. ..................................... 380,899
100 Kerr-McGee Corp........................................ 6,200
330 Phillips Petroleum Co. ................................ 15,510
2,950 Royal Dutch Petroleum Co............................... 178,291
300 Sunoco, Inc............................................ 7,050
</TABLE>
51
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Oil/Energy - continued
720 Texaco, Inc. ......................................... $ 39,105
150 Tosco Corp............................................ 4,078
250 Union Pacific Resource Group, Inc..................... 3,188
320 Unocal Corp. ......................................... 10,740
500 USX Marathon Group.................................... 12,344
-----------
904,833
-----------
Oil Field Services - 0.5%
430 Baker Hughes, Inc..................................... 9,057
580 Halliburton Co........................................ 23,345
150 Helmerich & Payne, Inc................................ 3,272
200 * Rowan Companies, Inc. .............................. 4,337
720 Schlumberger, Ltd..................................... 40,500
139 Transocean Sedco Forex, Inc. ......................... 4,683
-----------
85,194
-----------
Paper & Packaging - 0.9%
150 Avery Dennison Corp. ................................. 10,931
100 Ball Corp. ........................................... 3,938
100 Boise Cascade Corp. .................................. 4,050
150 Champion International Corp........................... 9,291
200 Georgia-Pacific Corp. ................................ 10,150
540 International Paper Co. .............................. 30,476
750 Kimberly-Clark Corp................................... 48,937
200 Louisiana Pacific Corp................................ 2,850
200 Mead Corp. ........................................... 8,687
100 * Sealed Air Corp..................................... 5,181
70 Temple Inland, Inc.................................... 4,616
100 Westvaco Corp. ....................................... 3,263
310 Weyerhaeuser Co. ..................................... 22,262
-----------
164,632
-----------
Printing, Publishing, Broadcasting & Entertainment -
3.0%
1,051 * CBS Corp. .......................................... 67,198
440 * Clear Channel Communications, Inc. ................. 39,270
1,030 Comcast Corp., Cl. A.................................. 52,079
2,900 Disney (Walt) Co. .................................... 84,825
150 Donnelley (R.R.) & Sons Co. .......................... 3,722
100 Dow Jones & Co., Inc. ................................ 6,800
370 Gannett Co., Inc...................................... 30,178
150 * Harrahs Entertainment, Inc. ........................ 3,966
100 Knight-Ridder, Inc. .................................. 5,950
260 McGraw-Hill Companies, Inc............................ 16,022
100 Meredith Corp. ....................................... 4,169
300 New York Times Co., Cl. A............................. 14,738
230 Omnicom Group, Inc. .................................. 23,000
1,840 Time Warner, Inc...................................... 133,285
100 Times Mirror Co., Ser. A.............................. 6,700
310 Tribune Co. .......................................... 17,069
950 * Viacom, Inc., Cl. B................................. 57,416
-----------
566,387
-----------
Real Estate - 0.1%
330 Marriott International, Inc., Cl. A................... 10,416
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Retailing & Wholesale - 5.9%
300 * Autozone, Inc........................................ $ 9,694
150 * Bed Bath & Beyond, Inc. ............................. 5,213
270 * Best Buy Co., Inc. .................................. 13,551
260 Circuit City Stores, Inc. ............................. 11,716
450 * Consolidated Stores Corp. ........................... 7,313
290 * Costco Wholesale Corp. .............................. 26,462
600 CVS Corp............................................... 23,962
580 Dayton Hudson Corp. ................................... 42,594
200 Dillards, Inc., Cl. A.................................. 4,038
350 Dollar General Corp.................................... 7,963
250 * Federated Department Stores, Inc..................... 12,641
1,150 Gap, Inc............................................... 52,900
100 Harcourt General, Inc. ................................ 4,025
3,285 Home Depot, Inc........................................ 225,228
300 J.C. Penney Co., Inc................................... 5,981
550 * K Mart Corp. ........................................ 5,534
210 * Kohl's Corp.......................................... 15,159
350 Limited, Inc........................................... 15,159
200 Longs Drug Stores Corp................................. 5,163
500 Lowe's Companies, Inc. ................................ 29,875
440 May Department Stores Co. ............................. 14,190
150 Nordstrom, Inc......................................... 3,928
400 * Office Depot, Inc.................................... 4,375
300 Rite Aid Corp. ........................................ 3,356
750 * Safeway, Inc......................................... 26,672
600 Sears, Roebuck & Co.................................... 18,262
610 * Staples, Inc......................................... 12,658
150 Supervalu, Inc......................................... 3,000
250 Tandy Corp............................................. 12,297
350 TJX Co., Inc........................................... 7,153
250 * Toys "R" Us, Inc. ................................... 3,578
100 W.W. Grainger, Inc..................................... 4,781
6,220 Wal-Mart Stores, Inc................................... 429,957
1,410 Walgreen Co. .......................................... 41,242
-----------
1,109,620
-----------
Telecommunication Services & Equipment - 3.7%
350 * ADC Telecommunications, Inc. ........................ 25,397
200 Centurytel, Inc. ...................................... 9,475
250 * General Instrument Corp.............................. 21,250
1,960 * Global Crossing Ltd.................................. 98,000
840 * MediaOne Group, Inc.................................. 64,522
940 Motorola, Inc. ........................................ 138,415
1,840 Nortel Networks Corp................................... 185,840
840 * Qualcomm, Inc........................................ 147,945
100 Scientific Atlanta, Inc................................ 5,563
-----------
696,407
-----------
Textile & Apparel - 0.0%
150 V.F. Corp.............................................. 4,500
-----------
Transportation - 0.7%
200 * AMR Corp............................................. 13,400
700 Burlington Northern Santa Fe Corp. .................... 16,975
</TABLE>
52
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Transportation - continued
250 CSX Corp. ............................................. $ 7,844
200 Delta Air Lines, Inc. ................................. 9,963
400 * FDX Corp. ........................................... 16,375
140 Kansas City Southern Industries, Inc. ................. 10,447
500 Norfolk Southern Corp. ................................ 10,250
50 Ryder Systems, Inc. ................................... 1,222
700 Southwest Airlines Co. ................................ 11,331
570 Union Pacific Corp..................................... 24,866
100 * US Airways Group, Inc................................ 3,206
-----------
125,879
-----------
Utilities - Electric - 1.4%
270 * AES Corp. ........................................... 20,182
150 Ameren Corp. .......................................... 4,913
320 American Electric Power Co., Inc....................... 10,280
210 Carolina Power & Light Co. ............................ 6,392
150 Cinergy Corp. ......................................... 3,619
150 CMS Energy Corp........................................ 4,678
350 Consolidated Edison, Inc. ............................. 12,075
150 Constellation Energy Group, Inc........................ 4,350
250 Dominion Resources, Inc................................ 9,813
150 DTE Energy Co.......................................... 4,706
480 Duke Power Co.......................................... 24,060
450 Edison International................................... 11,784
320 Entergy Corp. ......................................... 8,240
250 Firstenergy Corp. ..................................... 5,672
100 Florida Progress Corp.................................. 4,231
300 FPL Group, Inc......................................... 12,844
150 GPU, Inc. ............................................. 4,491
200 New Century Energies, Inc.............................. 6,075
200 * Niagara Mohawk Holdings, Inc......................... 2,788
150 Northern States Power Corp............................. 2,925
300 PECO Energy Co......................................... 10,425
600 PG & E Corp............................................ 12,300
110 Pinnacle West Capital Corp............................. 3,362
150 PP&L Resources, Inc. .................................. 3,431
350 Public Service Enterprise Group, Inc................... 12,184
500 Reliant Energy, Inc.................................... 11,437
250 Sempra Energy.......................................... 4,344
950 Southern Co............................................ 22,325
360 Texas Utilities Co..................................... 12,802
-----------
256,728
-----------
Utilities - Gas - 0.2%
100 Columbia Energy Group.................................. 6,325
50 Eastern Enterprises.................................... 2,872
100 NICOR, Inc............................................. 3,250
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Utilities - Gas - continued
100 Oneok, Inc. ......................................... $ 2,512
100 Peoples Energy Corp. ................................ 3,350
570 The Williams Companies, Inc.......................... 17,421
-----------
35,730
-----------
Utilities - Telephone - 5.8%
450 ALLTEL Corp. ........................................ 37,209
4,450 AT&T Corp. .......................................... 225,838
2,130 Bell Atlantic Corp................................... 131,128
2,600 BellSouth Corp....................................... 121,713
1,350 GTE Corp. ........................................... 95,259
520 * Nextel Communications, Inc., Cl. A................. 53,625
4,769 SBC Communications, Inc.............................. 232,489
1,200 Sprint Corp. ........................................ 80,775
580 * Sprint Corp. (PCS Group) Ser. 1.................... 59,450
710 U.S. West, Inc....................................... 51,120
-----------
1,088,606
-----------
Utilities - 0.1%
250 Central & South West Corp. .......................... 5,000
350 Unicom Corp. ........................................ 11,725
-----------
16,725
-----------
Total Common Stocks
(cost $15,198,740).................................. 17,234,004
-----------
<CAPTION>
Principal
Amount
<C> <S> <C>
SHORT-TERM INVESTMENTS - 9.3%
Repurchase Agreement - 8.9%
$1,667,917 Societe Generale Cowan Securities Corp. 2.55%,
purchased 12/31/1999, maturing 1/3/2000, maturity
value $1,668,271 (a)................................ 1,667,917
-----------
U.S. Government Agency Obligations - 0.4%
U.S. Treasury Bills
25,000 (Eff. Yield 5.28%), 1/13/2000........................ 24,956
42,000 (Eff. Yield 5.32%), 1/13/2000........................ 41,929
-----------
66,885
-----------
Total Short-Term Investments
(cost $1,734,802)................................... 1,734,802
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $16,933,542)........................... 101.5% 18,968,806
Other Assets and
Liabilities - net............................ (1.5) (283,371)
----- -----------
Net Assets.................................... 100.0% $18,685,435
===== ===========
</TABLE>
53
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
December 31, 1999
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
December 31, 1999.
* Non-income producing security.
** At December 31, 1999, the Fund owned 1,400 shares of First Union Corp. Com-
mon Stock at a cost of $49,690. During the year ended December 31, 1999,
the Fund earned $517 in dividend income from this investment. This invest-
ment in First Union Corp. enables the Fund to maintain a similar weighting
as that of the S&P 500 Index.
FUTURES CONTRACTS - LONG POSITIONS
<TABLE>
<CAPTION>
Initial Contract Value at Unrealized
Expiration Contracts Amount December 31, 1999 Gain
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
March 2000 3 S&P 500 Index $1,075,571 $1,113,150 $37,579
</TABLE>
See Combined Notes to Financial Statements.
54
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 97.8%
Aerospace & Defense - 1.7%
6,900 Boeing Co. ........................................... $ 286,781
9,587 Honeywell International, Inc. ........................ 553,050
5,390 United Technologies Corp. ............................ 350,350
-----------
1,190,181
-----------
Automotive Equipment & Manufacturing - 1.7%
6,900 Ford Motor Co. ....................................... 368,719
6,800 General Motors Corp. ................................. 494,275
3,000 * General Motors Corp., Cl. H......................... 288,000
-----------
1,150,994
-----------
Banks - 1.4%
8,600 BankAmerica Corp. .................................... 431,613
1,900 Chase Manhattan Corp. ................................ 147,606
5,619 FleetBoston Financial Corp. .......................... 195,611
4,200 Wells Fargo Co. ...................................... 169,838
-----------
944,668
-----------
Business Equipment &
Services - 1.2%
6,200 Automatic Data Processing, Inc. ...................... 334,025
1,800 * Computer Sciences Corp. ............................ 170,325
6,000 First Data Corp. ..................................... 295,875
2,700 Xerox Corp. .......................................... 61,256
-----------
861,481
-----------
Capital Goods - 0.2%
3,000 Caterpillar, Inc. .................................... 141,188
-----------
Chemical & Agricultural
Products - 2.5%
4,100 Dow Chemical Co. ..................................... 547,863
11,000 Du Pont (E. I.) De Nemours & Co. ..................... 724,625
2,100 Praxair, Inc. ........................................ 105,656
11,300 Sigma-Aldrich Corp. .................................. 339,706
-----------
1,717,850
-----------
Communication Systems & Services - 7.3%
20,300 * Cisco Systems, Inc. ................................ 2,174,637
4,500 Echostar Communications Corp. ........................ 438,750
17,300 Lucent Technologies, Inc. ............................ 1,294,256
13,800 * MCI WorldCom, Inc. ................................. 732,263
7,500 Tellabs, Inc. ........................................ 481,406
-----------
5,121,312
-----------
Consumer Products &
Services - 1.9%
3,300 Colgate-Palmolive Co. ................................ 214,500
5,600 Gillette Co. ......................................... 230,650
8,100 Procter & Gamble Co. ................................. 887,456
-----------
1,332,606
-----------
Diversified Companies - 0.9%
4,700 Minnesota Mining & Manufacturing Co. ................. 460,012
3,850 Tyco International, Ltd. ............................. 149,669
-----------
609,681
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Electrical Equipment &
Services - 5.2%
2,100 Applied Power, Inc., Cl. A............................ $ 77,175
2,900 Emerson Electric Co. ................................. 166,388
21,900 General Electric Co. ................................. 3,389,025
-----------
3,632,588
-----------
Electronic Equipment &
Services - 0.5%
4,640 * Jabil Circuit, Inc. ................................ 338,720
-----------
Finance & Insurance - 7.2%
4,600 Allstate Corp. ....................................... 110,400
3,400 American Express Co. ................................. 565,250
6,215 American International Group, Inc. ................... 671,997
11,300 Citigroup, Inc. ...................................... 627,856
11,600 Federal Home Loan Mortgage Corp. ..................... 545,925
18,690 Federal National Mortgage Assoc. ..................... 1,166,957
3,500 Goldman Sachs Group, Inc. ............................ 329,656
2,500 Merrill Lynch & Co., Inc. ............................ 208,750
3,400 Morgan Stanley, Dean Witter & Co. .................... 485,350
1,700 Providian Financial Corp. ............................ 154,806
4,100 Schwab (Charles) & Co., Inc. ......................... 157,338
-----------
5,024,285
-----------
Food & Beverage Products - 3.5%
5,600 Anheuser Busch Companies, Inc. ....................... 396,900
5,700 Bestfoods............................................. 299,606
3,000 Campbell Soup Co. .................................... 116,063
14,200 Coca Cola Co. ........................................ 827,150
6,510 McDonald's Corp. ..................................... 262,434
9,360 Pepsico, Inc. ........................................ 329,940
9,000 Philip Morris Companies, Inc. ........................ 208,688
-----------
2,440,781
-----------
Healthcare Products & Services - 9.5%
10,200 Abbott Laboratories................................... 370,387
7,460 American Home Products Corp. ......................... 294,204
1,400 Baxter International, Inc. ........................... 87,938
10,700 Bristol-Myers Squibb Co. ............................. 686,806
3,760 * Guidant Corp. ...................................... 176,720
11,800 Johnson & Johnson..................................... 1,098,875
9,100 Lilly (Eli) & Co. .................................... 605,150
7,400 Medtronic, Inc. ...................................... 269,637
21,050 Merck & Co., Inc. .................................... 1,411,666
5,000 Monsanto Co. ......................................... 178,125
15,600 Pfizer, Inc. ......................................... 506,025
5,640 Pharmacia & Upjohn, Inc. ............................. 253,800
8,570 Schering-Plough Corp. ................................ 361,547
3,900 Warner-Lambert Co. ................................... 319,556
-----------
6,620,436
-----------
Industrial Specialty Products & Services - 1.3%
3,600 Corning, Inc. ........................................ 464,175
3,400 Illinois Tool Works, Inc. ............................ 229,713
7,400 Teleflex, Inc. ....................................... 231,712
-----------
925,600
-----------
</TABLE>
55
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Information Services &
Technology - 22.5%
13,000 * America Online, Inc. .............................. $ 980,687
2,900 * Analog Devices, Inc. .............................. 269,700
3,700 * At Home Corp., Ser. A.............................. 158,638
2,200 * BMC Software, Inc. ................................ 175,863
13,000 Compaq Computer Corp. ............................... 351,812
5,600 Computer Associates International, Inc. ............. 391,650
23,430 * Dell Computer Corp. ............................... 1,194,930
6,300 * EMC Corp. ......................................... 688,275
6,000 * Gateway, Inc. ..................................... 432,375
5,700 Hewlett-Packard Co. ................................. 649,444
25,290 Intel Corp. ......................................... 2,081,683
10,260 International Business Machines Corp. ............... 1,108,080
1,800 * JDS Uniphase Corp. ................................ 290,363
7,000 * Micros Systems, Inc. .............................. 518,000
30,600 * Microsoft Corp. ................................... 3,572,550
7,400 * Oracle Systems Corp. .............................. 829,262
25,800 * Sun Microsystems, Inc. ............................ 1,997,887
-----------
15,691,199
-----------
Metal Products & Services - 0.5%
2,400 Alcoa, Inc. ......................................... 199,200
2,900 Nucor Corp. ......................................... 158,956
-----------
358,156
-----------
Oil/Energy - 4.4%
2,600 Atlantic Richfield Co. .............................. 224,900
4,230 Chevron Corp. ....................................... 366,424
20,260 Exxon Mobil Corp. ................................... 1,632,196
8,000 Royal Dutch Petroleum Co. ........................... 483,500
6,400 Texaco, Inc. ........................................ 347,600
-----------
3,054,620
-----------
Oil Field Services - 0.9%
3,000 Baker Hughes, Inc. .................................. 63,187
3,500 Diamond Offshore Drilling, Inc. ..................... 106,969
2,360 Halliburton Co. ..................................... 94,990
5,500 Schlumberger, Ltd. .................................. 309,375
1,064 Transocean Sedco Forex, Inc. ........................ 35,844
-----------
610,365
-----------
Paper & Packaging - 0.7%
2,500 International Paper Co. ............................. 141,094
3,170 Kimberly-Clark Corp. ................................ 206,843
2,100 Weyerhaeuser Co. .................................... 150,806
-----------
498,743
-----------
Printing, Publishing, Broadcasting & Entertainment -
4.3%
4,100 * CBS Corp. ......................................... 262,144
11,800 * Clear Channel Communications, Inc. ................ 1,053,150
4,400 * Cox Communications, Inc., Cl. A.................... 226,600
18,300 Disney (Walt) Co. ................................... 535,275
13,200 Time Warner, Inc. ................................... 956,175
-----------
3,033,344
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Retailing & Wholesale - 6.6%
5,000 * Bed Bath & Beyond, Inc. ........................... $ 173,750
3,200 * Best Buy Co., Inc. ................................ 160,600
5,000 * Costco Wholesale Corp. ............................ 456,250
2,500 Dayton Hudson Corp. ................................. 183,594
16,050 Home Depot, Inc. .................................... 1,100,428
7,820 Lowe's Companies, Inc. .............................. 467,245
4,600 * Safeway, Inc. ..................................... 163,587
3,450 Tandy Corp. ......................................... 169,697
25,400 Wal-Mart Stores, Inc. ............................... 1,755,775
-----------
4,630,926
-----------
Telecommunication Services & Equipment - 5.3%
3,900 Ericsson LM Telephone Co.,
Cl. B, ADR.......................................... 256,181
3,300 Motorola, Inc. ...................................... 485,925
5,800 Nokia Corp., ADR..................................... 1,102,000
11,800 Nortel Networks Corp. ............................... 1,191,800
3,600 * Qualcomm, Inc. .................................... 634,050
-----------
3,669,956
-----------
Transportation - 0.3%
2,860 United Parcel Service, Inc., Cl. B................... 197,340
-----------
Utilities - Electric - 0.1%
4,200 Southern Co. ........................................ 98,700
-----------
Utilities - Telephone - 6.2%
1,800 ALLTEL Corp. ........................................ 148,838
21,600 AT&T Corp. .......................................... 1,096,200
9,500 Bell Atlantic Corp. ................................. 584,844
6,600 GTE Corp. ........................................... 465,712
2,440 * Nextel Communications, Inc., Cl. A................. 251,625
19,900 SBC Communications, Inc. ............................ 970,125
5,000 Sprint Corp. ........................................ 336,562
4,700 * Sprint Corp. (PCS Group) Ser. 1.................... 481,750
-----------
4,335,656
-----------
Total Common Stocks (cost $57,145,071)............... 68,231,376
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 2.8%
Repurchase Agreement - 2.8%
$1,972,000 State Street Bank & Trust Co., 3.25%, purchased
12/31/1999, maturing 1/3/2000, maturity value
$1,972,534 (cost $1,972,000) (a).................... 1,972,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments - (cost $59,117,071)........ 100.6% 70,203,376
Other Assets and Liabilities - net............ (0.6) (429,326)
----- -----------
Net Assets.................................... 100.0% $69,774,050
===== ===========
</TABLE>
56
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments (continued)
December 31, 1999
* Non-income producing security.
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
December 31, 1999.
Summary of Abbreviations
ADR American Depository Receipt
See Combined Notes to Financial Statements.
57
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 73.9%
Aerospace & Defense - 1.2%
10,000 Boeing Co. .......................................... $ 415,625
14,450 Honeywell International, Inc. ....................... 833,584
8,500 United Technologies Corp. ........................... 552,500
------------
1,801,709
------------
Automotive Equipment & Manufacturing - 1.7%
7,435 * Daimler Chrysler AG................................ 581,789
5,200 Delphi Automotive Systems Corp. ..................... 81,900
11,230 Ford Motor Co. ...................................... 600,103
10,400 General Motors Corp. ................................ 755,950
4,600 * General Motors Corp., Cl. H........................ 441,600
------------
2,461,342
------------
Banks - 0.8%
7,540 BankAmerica Corp. ................................... 378,414
2,900 Chase Manhattan Corp. ............................... 225,294
8,000 FleetBoston Financial Corp. ......................... 278,500
6,300 Wells Fargo Co. ..................................... 254,756
------------
1,136,964
------------
Building, Construction & Furnishings - 0.1%
2,400 Deere & Co. ......................................... 104,100
------------
Business Equipment &
Services - 1.0%
9,400 Automatic Data Processing, Inc. ..................... 506,425
4,800 * Computer Sciences Corp. ........................... 454,200
8,700 First Data Corp. .................................... 429,019
4,000 Xerox Corp. ......................................... 90,750
------------
1,480,394
------------
Capital Goods - 0.1%
3,400 Caterpillar, Inc. ................................... 160,013
------------
Chemical & Agricultural
Products - 2.1%
2,800 Air Products & Chemicals, Inc. ...................... 93,975
6,400 Dow Chemical Co. .................................... 855,200
24,390 Du Pont (E. I.) De Nemours & Co. .................... 1,606,691
4,700 PPG Industries, Inc. ................................ 294,044
4,000 Praxair, Inc. ....................................... 201,250
------------
3,051,160
------------
Communication Systems & Services - 4.6%
33,400 * Cisco Systems, Inc. ............................... 3,577,975
26,700 Lucent Technologies, Inc. ........................... 1,997,494
20,400 * MCI WorldCom, Inc. ................................ 1,082,475
------------
6,657,944
------------
Consumer Products &
Services - 1.4%
5,000 Colgate-Palmolive Co. ............................... 325,000
9,230 Gillette Co. ........................................ 380,160
11,900 Procter & Gamble Co. ................................ 1,303,794
------------
2,008,954
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Diversified Companies - 0.7%
7,000 Minnesota Mining & Manufacturing Co. ................ $ 685,125
8,300 * Tyco International, Ltd. .......................... 322,662
------------
1,007,787
------------
Electrical Equipment &
Services - 4.2%
6,000 Applied Power, Inc., Cl. A........................... 220,500
10,740 Emerson Electric Co. ................................ 616,207
33,900 General Electric Co. ................................ 5,246,025
------------
6,082,732
------------
Finance & Insurance - 5.9%
3,800 AFLAC, Inc. ......................................... 179,313
5,600 Allstate Corp. ...................................... 134,400
9,160 American Express Co. ................................ 1,522,850
13,650 American International Group, Inc. .................. 1,475,906
210 * Berkshire Hathaway, Inc., Cl. B.................... 384,300
16,600 Citigroup, Inc. ..................................... 922,337
6,000 Federal Home Loan Mortgage Corp. .................... 282,375
21,900 Federal National Mortgage Assoc. .................... 1,367,381
6,000 Goldman Sachs Group, Inc. ........................... 565,125
2,000 Marsh & McLennan Co., Inc. .......................... 191,375
7,000 Merrill Lynch & Co., Inc. ........................... 584,500
5,400 Morgan Stanley, Dean Witter & Co. ................... 770,850
6,500 Schwab (Charles) & Co., Inc. ........................ 249,438
------------
8,630,150
------------
Food & Beverage Products - 3.0%
7,300 Anheuser Busch Companies, Inc. ...................... 517,388
10,080 Bestfoods............................................ 529,830
4,710 Campbell Soup Co. ................................... 182,218
23,200 Coca Cola Co. ....................................... 1,351,400
8,770 Conagra, Inc. ....................................... 197,873
3,100 H.J. Heinz Co. ...................................... 123,419
3,600 Kellogg Co. ......................................... 110,925
14,920 McDonald's Corp. .................................... 601,462
13,640 Pepsico, Inc. ....................................... 480,810
10,000 Philip Morris Companies, Inc. ....................... 231,875
3,000 Ralston Purina Co. .................................. 83,625
------------
4,410,825
------------
Forest Products - 0.1%
3,000 Willamette Industries, Inc. ......................... 139,313
------------
Healthcare Products &
Services - 6.4%
17,380 Abbott Laboratories.................................. 631,111
14,400 American Home Products Corp. ........................ 567,900
3,500 Baxter International, Inc. .......................... 219,844
16,400 Bristol-Myers Squibb Co. ............................ 1,052,675
5,700 * Guidant Corp. ..................................... 267,900
13,100 Johnson & Johnson.................................... 1,219,937
13,700 Lilly (Eli) & Co. ................................... 911,050
12,530 Medtronic, Inc. ..................................... 456,562
21,200 Merck & Co., Inc. ................................... 1,421,725
</TABLE>
58
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Healthcare Products &
Services - continued
9,800 Monsanto Co. ........................................ $ 349,125
24,200 Pfizer, Inc. ........................................ 784,987
8,600 Pharmacia & Upjohn, Inc. ............................ 387,000
11,800 Schering-Plough Corp. ............................... 497,813
6,100 Warner-Lambert Co. .................................. 499,819
------------
9,267,448
------------
Industrial Specialty Products & Services - 0.7%
5,700 Corning, Inc. ....................................... 734,943
5,100 Illinois Tool Works, Inc. ........................... 344,569
------------
1,079,512
------------
Information Services & Technology - 16.1%
20,440 * America Online, Inc. .............................. 1,541,943
6,800 * Analog Devices, Inc. .............................. 632,400
5,600 * At Home Corp., Ser. A.............................. 240,100
4,400 * BMC Software, Inc. ................................ 351,725
22,000 Compaq Computer Corp. ............................... 595,375
8,300 Computer Associates International, Inc. ............. 580,481
36,400 * Dell Computer Corp. ............................... 1,856,400
8,600 * EMC Corp. ......................................... 939,550
10,400 Hewlett-Packard Co. ................................. 1,184,950
41,800 Intel Corp. ......................................... 3,440,662
19,300 International Business Machines Corp. ............... 2,084,400
2,800 * JDS Uniphase Corp. ................................ 451,675
46,900 * Microsoft Corp. ................................... 5,475,575
11,500 * Oracle Systems Corp. .............................. 1,288,719
36,220 * Sun Microsystems, Inc. ............................ 2,804,786
------------
23,468,741
------------
Metal Products & Services - 0.4%
3,600 Alcoa, Inc. ......................................... 298,800
4,400 Nucor Corp. ......................................... 241,175
------------
539,975
------------
Oil/Energy - 3.2%
3,800 Atlantic Richfield Co. .............................. 328,700
8,850 BP Amoco Plc, ADR.................................... 524,916
8,380 Chevron Corp. ....................................... 725,917
31,441 Exxon Mobil Corp. ................................... 2,532,966
10,000 Texaco, Inc. ........................................ 543,125
------------
4,655,624
------------
Oil Field Services - 0.6%
3,600 Baker Hughes, Inc. .................................. 75,825
6,000 Halliburton Co. ..................................... 241,500
8,000 Schlumberger, Ltd. .................................. 450,000
1,548 Transocean Sedco Forex, Inc. ........................ 52,148
------------
819,473
------------
Paper & Packaging - 0.7%
7,700 International Paper Co. ............................. 434,569
6,350 Kimberly-Clark Corp. ................................ 414,337
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Paper & Packaging - continued
3,200 Weyerhaeuser Co. ................................... $ 229,800
------------
1,078,706
------------
Printing, Publishing, Broadcasting & Entertainment -
2.4%
5,900 * CBS Corp. ........................................ 377,231
3,000 * Clear Channel Communications, Inc. ............... 267,750
5,600 * Cox Communications, Inc., Cl. A................... 288,400
28,000 Disney (Walt) Co. .................................. 819,000
2,600 Gannett Co., Inc. .................................. 212,063
20,400 Time Warner, Inc. .................................. 1,477,725
------------
3,442,169
------------
Retailing & Wholesale - 4.7%
10,000 * Bed Bath & Beyond, Inc. .......................... 347,500
4,900 * Best Buy Co., Inc. ............................... 245,919
4,400 * Costco Wholesale Corp. ........................... 401,500
3,000 Dayton Hudson Corp. ................................ 220,313
26,685 Home Depot, Inc. ................................... 1,829,590
10,000 Lowe's Companies, Inc. ............................. 597,500
6,800 * Safeway, Inc. .................................... 241,825
4,100 Tandy Corp. ........................................ 201,669
39,530 Wal-Mart Stores, Inc. .............................. 2,732,511
------------
6,818,327
------------
Telecommunication Services & Equipment - 5.8%
5,900 Ericsson LM Telephone Co.,
Cl. B, ADR......................................... 387,556
40,700 * Global Crossing Ltd. ............................. 2,035,000
5,000 Motorola, Inc. ..................................... 736,250
8,860 Nokia Corp., ADR.................................... 1,683,400
17,900 Nortel Networks Corp. .............................. 1,807,900
5,600 * Qualcomm, Inc. ................................... 986,300
11,900 * Qwest Communications International, Inc. ......... 511,700
7,100 Vodafone AirTouch Plc, ADR.......................... 351,450
------------
8,499,556
------------
Transportation - 0.5%
9,800 Union Pacific Corp. ................................ 427,525
4,000 United Parcel Service, Inc., Cl. B.................. 276,000
------------
703,525
------------
Utilities - Electric - 0.4%
3,600 Duke Power Co. ..................................... 180,450
2,400 Public Service Enterprise Group, Inc. .............. 83,550
4,988 * Scottish Power Plc, ADR........................... 139,664
9,600 Southern Co. ....................................... 225,600
------------
629,264
------------
Utilities - Gas - 0.2%
11,600 Keyspan Corp. ...................................... 268,975
------------
Utilities - Telephone - 4.9%
2,700 ALLTEL Corp. ....................................... 223,256
33,000 AT&T Corp. ......................................... 1,674,750
14,400 Bell Atlantic Corp. ................................ 886,500
</TABLE>
59
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Utilities - Telephone - continued
10,100 GTE Corp. ................................. $ 712,681
32,270 SBC Communications, Inc. .................. 1,573,163
19,900 Sprint Corp. .............................. 1,339,519
7,350 * Sprint Corp. (PCS Group) Ser. 1.......... 753,375
------------
7,163,244
------------
Total Common Stocks
(cost $89,447,733)........................ 107,567,926
------------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - 0.9%
Communication Systems & Services - 0.2%
$ 250,000 Lucent Technologies, Inc.
6.90%, 7/15/2001.......................... 251,024
------------
Retailing & Wholesale - 0.7%
1,000,000 Wal-Mart Stores, Inc. 6.875%, 8/10/2009.... 975,138
------------
Total Corporate Bonds (cost $1,248,239).... 1,226,162
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 22.3%
U.S. Treasury Notes & Bonds - 21.3%
U.S. Treasury Bonds:
3,000,000 6.00%, 2/15/2026........................... 2,745,000
3,000,000 7.125%, 2/15/2023.......................... 3,124,689
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS - continued
U.S. Treasury Notes & Bonds - continued
U.S. Treasury Notes:
$6,000,000 5.50%, 5/15/2009...................... $ 5,591,250
7,000,000 5.875%, 9/30/2002..................... 6,927,816
6,500,000 5.875%, 11/15/2005.................... 6,313,125
6,000,000 6.125%, 8/15/2007..................... 5,850,000
500,000 6.50%, 8/15/2005...................... 500,156
------------
31,052,036
------------
U.S. Government Agency Obligations -
1.0%
1,500,000 Federal National Mortgage Assoc.
5.125%, 2/13/2004.................... 1,408,694
------------
Total U.S. Government &
Agency Obligations
(cost $33,235,397)................... 32,460,730
------------
SHORT-TERM INVESTMENTS - 2.9%
Repurchase Agreement - 2.9%
4,244,000 State Street Bank & Trust Co., 3.25%,
purchased 12/31/1999, maturing
1/3/2000, maturity value $4,245,149
(cost $4,244,000) (a)................ 4,244,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $128,175,369).......................... 100.0% 145,498,818
Other Assets and
Liabilities - net............................ 0.0 67,557
----- ------------
Net Assets.................................... 100.0% $145,566,375
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
December 31, 1999.
* Non-income producing security.
Summary of Abbreviations:
ADR American Depository Receipt
See Combined Notes to Financial Statements.
60
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 97.9%
Australia - 1.8%
5,000 National Australia Bank, Ltd. ............................ $ 381,250
-----------
Belgium - 0.6%
250 Colruyt NV................................................ 14,355
25 * Dolmen Computer Applications NV......................... 755
2,500 UCB SA.................................................... 108,416
-----------
123,526
-----------
Canada - 3.3%
25,500 Bombardier, Inc., Cl. B................................... 523,779
4,000 Du Pont Canada, Inc., Cl. A............................... 164,461
-----------
688,240
-----------
Denmark - 0.9%
1,900 Coloplast AS.............................................. 181,286
-----------
Finland - 2.3%
2,500 Nokia Corp., ADR.......................................... 475,000
-----------
France - 3.9%
650 * Carrefour SA............................................ 119,890
1,250 Hermes International...................................... 188,626
3,020 * Sanofi Synthelabo....................................... 125,765
2,600 Societe Technip........................................... 266,625
680 Sodexho Alliance.......................................... 120,354
-----------
821,260
-----------
Germany - 5.5%
3,150 Altana AG................................................. 215,774
2,320 Hugo Boss AG.............................................. 275,772
8,600 RWE AG.................................................... 336,999
100 SAP AG.................................................... 49,259
3,000 SAP AG, ADR............................................... 156,188
5,850 Suedzucker AG............................................. 82,502
200 VEW AG.................................................... 50,569
-----------
1,167,063
-----------
Hong Kong - 0.9%
6,000 Cheung Kong Holdings, Ltd. ............................... 76,027
7,000 Henderson Land Development Co., Ltd. ..................... 45,025
51,700 Hong Kong & China Gas Co., Ltd. .......................... 70,831
-----------
191,883
-----------
Ireland - 1.0%
10,061 CRH Plc, London Exchange.................................. 217,395
-----------
Italy - 4.0%
7,724 Benetton Group SpA, ADS................................... 350,960
20,000 Industrie Natuzzi SpA, ADR................................ 265,000
12,500 Luxottica Group SpA, ADS.................................. 219,531
-----------
835,491
-----------
Japan - 8.6%
3,300 Nintendo Co., Ltd. ....................................... 548,439
8,000 Seven-Eleven Japan Co., Ltd. ............................. 1,268,474
-----------
1,816,913
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Malaysia - 0.1%
1,400 AMMB Holdings Berhad...................................... $ 3,353
2,000 * Malayan Banking Berhad.................................. 7,105
2,000 Malaysian Oxygen Berhad................................... 4,947
2,000 Perusahaan Otomobil Nasional Berhad....................... 3,895
-----------
19,300
-----------
Netherlands - 5.4%
6,288 CSM NV.................................................... 134,285
3,815 Getronics NV.............................................. 304,369
5,319 IHC Caland NV............................................. 194,231
3,337 Numico Kon NV............................................. 124,511
2,900 VNU NV.................................................... 152,434
7,016 * Wolters Kluwer NV....................................... 237,470
-----------
1,147,300
-----------
Spain - 1.8%
17,500 Endesa SA, ADR............................................ 353,281
3,100 Prosegur, CIA de Seguridad SA............................. 27,762
-----------
381,043
-----------
Sweden - 0.5%
3,000 Hennes & Mauritz, Cl.B.................................... 100,482
-----------
Switzerland - 1.0%
100 Schweizerische Rueckversicherungs-Gesellschaft............ 205,426
-----------
United Kingdom - 7.3%
3,917 Astrazeneca Plc, ADR...................................... 163,535
18,488 Granada Group Plc......................................... 186,648
2,500 Laporte Plc............................................... 21,887
14,000 Lloyds TSB Group Plc...................................... 173,903
9,000 Morgan Crucible Co. Plc................................... 42,014
15,000 Next Plc.................................................. 143,923
7,500 Pearson Publishing Plc.................................... 244,112
36,200 Rentokil Initial Plc...................................... 131,566
2,400 SmithKline Beecham Plc, ADR............................... 154,650
6,231 Smiths Industries Plc..................................... 93,101
10,000 TI Group Plc.............................................. 72,527
1,500 Vodafone AirTouch Plc, ADR................................ 74,250
6,245 Williams Plc.............................................. 28,447
-----------
1,530,563
-----------
United States - 49.0%
7,500 Abbott Laboratories....................................... 272,344
2,310 American International Group, Inc. ....................... 249,769
8,000 Avon Products, Inc. ...................................... 264,000
6,000 Black & Decker Corp. ..................................... 313,500
4,600 Carnival Corp., Cl. A..................................... 219,938
4,350 * Cisco Systems, Inc. .................................... 465,994
6,000 Citigroup, Inc. .......................................... 333,375
3,100 Computer Associates International, Inc. .................. 216,806
5,500 * Dell Computer Corp. .................................... 280,500
1,800 Disney (Walt) Co. ........................................ 52,650
3,500 Federal National Mortgage Assoc. ......................... 218,531
2,700 Gannett Co., Inc. ........................................ 220,219
</TABLE>
61
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
United States - continued
5,325 Gap, Inc. ................................................. $ 244,950
2,000 General Electric Co. ...................................... 309,500
7,000 General Mills, Inc. ....................................... 250,250
5,000 Harley-Davidson, Inc. ..................................... 320,312
4,800 Home Depot, Inc. .......................................... 329,100
4,000 Honeywell International, Inc. ............................. 230,750
4,500 Intel Corp. ............................................... 370,406
5,500 Marriott International, Inc., Cl. A........................ 173,594
3,150 Marsh & McLennan Co., Inc. ................................ 301,416
2,500 Maytag Corp. .............................................. 120,000
7,375 MBNA Corp. ................................................ 200,969
4,200 McGraw-Hill Companies, Inc. ............................... 258,825
4,000 Merck & Co., Inc. ......................................... 268,250
5,000 * Microsoft Corp. ......................................... 583,750
2,200 Morgan Stanley, Dean Witter & Co. ......................... 314,050
1,575 * Oracle Systems Corp. .................................... 176,498
5,000 Pitney Bowes, Inc. ........................................ 241,562
5,674 SBC Communications, Inc. .................................. 276,607
6,500 Schering-Plough Corp. ..................................... 274,219
3,000 Schwab (Charles) & Co., Inc. .............................. 115,125
2,500 SLM Holding Corp. ......................................... 105,625
2,225 Sodexho Marriott Services, Inc. ........................... 28,925
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
United States - continued
15,000 TJX Co., Inc. ........................................... $ 306,562
4,000 Tribune Co. ............................................. 220,250
3,995 United Technologies Corp. ............................... 259,675
7,500 Viad Corp. .............................................. 209,063
7,200 Wal-Mart Stores, Inc. ................................... 497,700
5,100 Wells Fargo Co. ......................................... 206,231
-----------
10,301,790
-----------
Total Common Stocks
(cost $15,795,428)...................................... 20,585,211
-----------
PREFERRED STOCKS - 0.8%
Germany - 0.8%
5,000 RWE AG (cost $172,722)................................... 154,124
-----------
WARRANTS - 0.0%
Malaysia - 0.0%
400 * United Engineers Berhad, expires 11/18/2002 (cost $0)
........................................................ 308
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $15,968,150)................................ 98.7% 20,739,643
Other Assets and
Liabilities - net................................. 1.3 282,188
----- -----------
Net Assets......................................... 100.0% $21,021,831
===== ===========
</TABLE>
* Non-income producing security.
Summary of Abbreviations
ADR American Depository Receipt
ADS American Depository Share
At December 31, 1999, the Fund held securities in the following industries:
<TABLE>
<CAPTION>
Percent of
Market Value Portfolio Assets
- --------------------------------------------------------------
<S> <C> <C>
Merchandising $ 4,245,123 20.5%
Health & Personal Care 2,122,004 10.2%
Financial Services 2,047,638 9.9%
Technology 1,628,716 7.9%
Electrical & Electronics 1,418,323 6.8%
Telecommunications 1,291,851 6.2%
Food & Household Products 1,159,647 5.6%
Broadcasting & Publishing 1,089,198 5.3%
Aerospace & Military Technology 1,014,204 4.9%
Utilities-Electric, Gas & Water 915,236 4.4%
Banking 768,490 3.7%
Multi-Industry 527,277 2.5%
Business & Public Services 513,436 2.5%
Building Materials & Components 484,328 2.3%
Real Estate 323,571 1.6%
Leisure & Tourism 272,587 1.3%
Other 918,014 4.4%
----------- ------
$20,739,643 100.0%
=========== ======
</TABLE>
See Combined Notes to Financial Statements.
62
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 97.5%
Advertising & Related
Services - 0.3%
4,000 Young & Rubicam, Inc. ................................ $ 283,000
-----------
Aerospace & Defense - 2.9%
3,000 Boeing Co. ........................................... 124,688
20,000 Bombardier, Inc., Cl. B............................... 410,807
12,000 Cordant Technologies, Inc. ........................... 396,000
13,050 Honeywell International, Inc. ........................ 752,822
14,100 Lockheed Martin Corp. ................................ 308,437
18,500 * Loral Space & Communications........................ 449,781
-----------
2,442,535
-----------
Automotive Equipment & Manufacturing - 1.0%
8,600 Toyota Motor Co. ..................................... 837,425
-----------
Banks - 4.8%
5,000 Astoria Financial Corp. .............................. 152,188
15,000 BB&T Corp. ........................................... 410,625
14,000 Hibernia Corp., Cl. A................................. 148,750
12,000 KeyCorp............................................... 265,500
12,000 Marshall & Ilsley Corp. .............................. 753,750
22,000 Mellon Financial Corp. ............................... 749,375
22,000 Pacific Century Financial Corp. ...................... 411,125
7,000 SouthTrust Corp. ..................................... 264,687
6,975 Susquehanna Bancshares, Inc. ......................... 110,728
8,100 U.S. Bancorp.......................................... 192,881
21,500 Webster Financial Corp. .............................. 506,594
2,000 Wells Fargo Co. ...................................... 80,875
-----------
4,047,078
-----------
Building, Construction & Furnishings - 1.7%
1,000 Deere & Co. .......................................... 43,375
9,000 * Jacobs Engineering Group, Inc. ..................... 292,500
8,000 Lennar Corp. ......................................... 130,000
8,000 Southdown, Inc. ...................................... 413,000
6,000 * Toll Brothers, Inc. ................................ 111,750
16,500 * US Home Corp. ...................................... 421,781
-----------
1,412,406
-----------
Business Equipment &
Services - 6.7%
22,700 ACNielsen Corp. ...................................... 558,987
3,000 * Atlas Air, Inc. .................................... 82,313
15,000 * Circle International Group, Inc. ................... 333,750
14,800 * Computer Sciences Corp. ............................ 1,400,450
35,100 * Convergys Corp. .................................... 1,079,325
10,000 Equifax, Inc. ........................................ 235,625
18,000 Petroleum Helicopters, Inc. .......................... 166,500
18,300 Pittston Brink's Group................................ 402,600
8,000 * Policy Management Systems Corp. .................... 204,500
19,500 * Seagate Technology.................................. 907,969
6,000 Visio Corp. .......................................... 285,000
-----------
5,657,019
-----------
Capital Goods - 0.3%
5,000 Caterpillar, Inc...................................... 235,313
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Chemical & Agricultural
Products - 1.8%
2,600 Air Products & Chemicals, Inc. ....................... $ 87,263
12,500 Albemarle Corp. ...................................... 239,844
32,500 Engelhard Corp. ...................................... 613,437
22,000 IMC Global, Inc. ..................................... 360,250
8,000 Sigma-Aldrich Corp. .................................. 240,500
-----------
1,541,294
-----------
Communication Systems & Services - 2.7%
32,650 * American Tower Systems Corp., Cl. A................. 997,865
10,000 * Cisco Systems, Inc. ................................ 1,071,250
2,700 Lucent Technologies, Inc. ............................ 201,994
-----------
2,271,109
-----------
Consumer Products &
Services - 6.6%
7,000 Colgate-Palmolive Co. ................................ 455,000
23,000 Hasbro, Inc. ......................................... 438,438
28,600 Mattel, Inc. ......................................... 375,375
3,000 Newell Rubbermaid, Inc. .............................. 87,000
7,400 Procter & Gamble Co. ................................. 810,762
37,500 Service Corp. International........................... 260,156
10,900 Sony Corp., ADR....................................... 3,103,775
2,000 * Tommy Hilfiger Corp. ............................... 46,625
-----------
5,577,131
-----------
Diversified Companies - 0.2%
4,000 ITT Industries, Inc. ................................. 133,750
-----------
Electrical Equipment &
Services - 3.1%
11,000 Emerson Electric Co. ................................. 631,125
13,000 General Electric Co. ................................. 2,011,750
-----------
2,642,875
-----------
Electronic Equipment &
Services - 0.8%
6,000 * KLA-Tencor Corp. ................................... 668,250
-----------
Energy - 0.1%
3,000 Occidental Petroleum Corp. ........................... 64,875
-----------
Finance & Insurance - 6.3%
5,343 American International Group, Inc. ................... 577,712
2,000 Citigroup, Inc. ...................................... 111,125
13,500 Federal Home Loan Mortgage Corp. ..................... 635,344
2,000 Goldman Sachs Group, Inc. ............................ 188,375
2,500 Hartford Financial Services Group, Inc. .............. 118,437
11,000 Legg Mason, Inc. ..................................... 398,750
10,000 Lehman Brothers Holdings, Inc. ....................... 846,875
24,000 Neuberger Berman, Inc. ............................... 597,000
16,500 Price (T.) Rowe & Associates, Inc. ................... 609,469
8,000 Progressive Corp. Ohio................................ 585,000
12,100 UnumProvident Corp. .................................. 387,956
10,000 Waddell & Reed Financial, Inc. Cl. A.................. 271,250
-----------
5,327,293
-----------
</TABLE>
63
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Food & Beverage Products - 0.5%
9,000 Conagra, Inc. ........................................ $ 203,062
3,800 International Multifoods Corp. ....................... 50,350
5,000 Sara Lee Corp. ....................................... 110,313
10,000 * Vlasic Foods International, Inc. ................... 56,875
-----------
420,600
-----------
Forest Products - 0.3%
10,000 Deltic Timber Corp. .................................. 218,750
-----------
Healthcare Products &
Services - 6.9%
7,000 Abbott Laboratories................................... 254,187
15,000 * Acuson Corp. ....................................... 188,438
2,000 * Alza Corp. ......................................... 69,250
4,000 American Home Products Corp. ......................... 157,750
18,000 * AmeriSource Health Corp., Cl. A..................... 273,375
5,200 Beckman Coulter, Inc. ................................ 264,550
7,000 * Boston Scientific Corp. ............................ 153,125
1,500 * Dendrite International, Inc. ....................... 50,813
4,000 * HEALTHSOUTH Corp. .................................. 21,500
16,500 IMS Health, Inc. ..................................... 448,594
6,000 Johnson & Johnson..................................... 558,750
3,000 Lilly (Eli) & Co. .................................... 199,500
11,000 McKesson HBOC, Inc. .................................. 248,187
8,000 Medtronic, Inc. ...................................... 291,500
12,500 Monsanto Co. ......................................... 445,312
6,000 PE Corp-PE Biosystems Group........................... 721,875
14,500 * Quorum Health Group, Inc. .......................... 135,031
2,000 Schering-Plough Corp. ................................ 84,375
6,500 Shared Medical System Corp. .......................... 331,094
5,000 * Sybron International Corp. ......................... 123,438
9,000 Warner-Lambert Co. ................................... 737,437
-----------
5,758,081
-----------
Industrial Specialty Products & Services - 3.1%
11,000 AptarGroup, Inc. ..................................... 276,375
5,000 Bemis Co., Inc. ...................................... 174,375
30,000 Donaldson, Inc. ...................................... 721,875
8,081 Illinois Tool Works, Inc. ............................ 545,973
20,000 Teleflex, Inc. ....................................... 626,250
20,000 * Unova, Inc. ........................................ 260,000
-----------
2,604,848
-----------
Information Services &
Technology - 10.1%
9,900 * Adaptec, Inc. ...................................... 493,762
6,500 Adobe Systems, Inc. .................................. 437,125
4,700 Broadwing, Inc. ...................................... 173,313
25,000 * Cadence Design Systems, Inc. ....................... 600,000
2,000 * CMGI, Inc. ......................................... 553,750
20,000 * Compuware Corp. .................................... 745,000
7,500 * Dell Computer Corp. ................................ 382,500
3,000 * EMC Corp. .......................................... 327,750
3,200 Go2Net................................................ 278,400
11,000 Intel Corp. .......................................... 905,437
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Information Services &
Technology - continued
9,000 International Business Machines Corp. ............... $ 972,000
4,500 Macromedia, Inc. .................................... 329,063
12,700 * Microsoft Corp. ................................... 1,482,725
500 * Netratings, Inc. .................................. 24,063
20,000 * Network Associates, Inc. .......................... 533,750
250 SOFTBANK CORP. ...................................... 239,307
-----------
8,477,945
-----------
Leisure & Tourism - 0.9%
26,200 Gaylord Entertainment Co. ........................... 784,362
-----------
Oil / Energy - 4.7%
7,600 Atlantic Richfield Co. .............................. 657,400
20,000 Berry Petroleum Co., Cl. A........................... 302,500
6,000 BP Amoco Plc, ADR.................................... 355,875
4,000 Chevron Corp. ....................................... 346,500
6,684 Conoco, Inc., Cl. B.................................. 166,264
3,500 Exxon Mobil Corp. ................................... 281,969
17,500 * Houston Exploration Co. ........................... 346,719
7,690 Kerr-McGee Corp. .................................... 476,780
7,000 Phillips Petroleum Co. .............................. 329,000
1,000 Shell Transport & Trading Plc, ADR................... 49,250
37,600 Southwestern Energy Co. ............................. 246,750
2,200 Texaco, Inc. ........................................ 119,487
8,500 Tosco Corp. ......................................... 231,094
-----------
3,909,588
-----------
Oil Field Services - 0.1%
2,000 Halliburton Co. ..................................... 80,500
-----------
Paper & Packaging - 0.7%
14,000 Asia Pulp & Paper Ltd., ADR.......................... 110,250
5,000 Kimberly-Clark Corp. ................................ 326,250
3,216 * Sealed Air Corp. .................................. 166,629
-----------
603,129
-----------
Printing, Publishing, Broadcasting & Entertainment -
12.9%
3,000 * AMFM, Inc. ........................................ 234,750
23,500 Charter Communications, Inc. ........................ 514,063
10,309 * Clear Channel Communications, Inc. ................ 920,078
3,000 Comcast Corp., Cl. A................................. 151,688
15,054 * Cox Communications, Inc., Cl. A.................... 775,281
22,200 Disney (Walt) Co. ................................... 649,350
10,000 * Emmis Broadcasting Corp., Cl. A.................... 1,246,406
16,400 * Fox Entertainment Group, Inc. ..................... 408,975
24,300 Martha Stewart Living Omnimedia, Inc. ............... 583,200
20,000 McGraw-Hill Companies, Inc. ......................... 1,232,500
40,100 New York Times Co., Cl. A............................ 1,969,912
3,500 * Univision Communications, Inc., Cl. A.............. 357,656
16,500 * Viacom, Inc., Cl. A................................ 997,219
600 Washington Post Co., Cl. B........................... 333,525
8,900 * Young Broadcasting, Inc., Cl. A.................... 453,900
-----------
10,828,503
-----------
</TABLE>
64
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Real Estate - 1.3%
2,800 Arden Realty Group, Inc. REIT......................... $ 56,175
3,500 CarrAmerica Realty Corp. REIT......................... 73,938
25,460 Duke Weeks Realty Corp. .............................. 496,470
10,000 Mack-Cali Realty Corp. REIT........................... 260,625
5,000 Spieker Properties, Inc. REIT......................... 182,187
-----------
1,069,395
-----------
Retailing & Wholesale - 1.2%
9,500 Intimate Brands, Inc. ................................ 409,688
12,916 * Saks, Inc. ......................................... 201,005
6,000 Wal-Mart Stores, Inc. ................................ 414,750
-----------
1,025,443
-----------
Telecommunication Services &
Equipment - 6.1%
2,000 Aironet Wireless Communication........................ 133,563
7,500 * General Instrument Corp. ........................... 637,500
6,900 * Global Crossing Ltd. ............................... 345,000
11,000 * MediaOne Group, Inc. ............................... 844,937
9,000 Motorola, Inc. ....................................... 1,325,250
10,000 Omnipoint Corp. ...................................... 1,206,250
15,300 * Qwest Communications International, Inc. ........... 657,900
-----------
5,150,400
-----------
Transportation - 2.9%
15,000 Burlington Northern Santa Fe Corp. ................... 363,750
9,300 Expeditores International Washington, Inc. ........... 407,456
12,000 Kansas City Southern Industries, Inc. ................ 895,500
21,450 Southwest Airlines Co. ............................... 347,222
10,200 Union Pacific Corp. .................................. 444,975
-----------
2,458,903
-----------
Utilities - Electric - 1.5%
40,000 * Niagara Mohawk Holdings, Inc. ...................... 557,500
18,000 TNP Enterprises, Inc. ................................ 742,500
-----------
1,300,000
-----------
Utilities - Gas - 0.9%
19,700 Piedmont Natural Gas Co., Inc. ....................... 595,925
4,000 The Williams Companies, Inc. ......................... 122,250
-----------
718,175
-----------
Utilities - Telephone - 4.1%
17,000 AT&T Corp. ........................................... 862,750
13,000 * Nextel Communications, Inc., Cl. A.................. 1,340,625
1,100 Sprint Corp. ......................................... 74,044
16,500 U.S. West, Inc. ...................................... 1,188,000
-----------
3,465,419
-----------
Total Common Stocks
(cost $68,898,560)................................... 82,015,394
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
PREFERRED STOCKS - 0.0%
Healthcare Products &
Services - 0.0%
3,500 * Fresenius National Med Care, Inc.,
Ser. D (cost $736).................................. $ 35
-----------
CONVERTIBLE PREFERRED - 0.8%
Paper & Packaging - 0.2%
2,850 * Sealed Air Corp.
$2.00, 04/01/2018, Ser. A........................... 143,925
-----------
Printing, Publishing, Broadcasting &
Entertainment - 0.2%
10,000 Tribune Co. (exchangeable for Mattel, Inc. common
stock) 8/15/2001.................................... 176,250
-----------
Telecommunication Services &
Equipment - 0.4%
1,000 Global Crossing Ltd.
7.00%, 12/31/2009 144A.............................. 281,750
-----------
Total Convertible Preferred
(cost $519,565)..................................... 601,925
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CONVERTIBLE DEBENTURES - 0.1%
Information Services &
Technology - 0.1%
$ 350,000 Network Associates, Inc.
0.01%, 2/13/2018 (cost $109,968).................... 132,125
-----------
CORPORATE BONDS - 0.2%
Telecommunication Services &
Equipment - 0.2%
100,000 American Tower Corp. 6.25%, 10/15/2009 (cost
$100,000)........................................... 140,625
-----------
SHORT-TERM INVESTMENTS - 1.4%
Repurchase Agreement - 1.4%
1,150,000 State Street Bank & Trust Co.,
3.25%, purchased 12/31/1999,
maturing 1/3/2000, maturity value $1,150,311
(cost $1,150,000) (a)............................... 1,150,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $70,778,829)............................ 100.0% 84,040,104
Other Assets and
Liabilities - net............................. 0.0 26,885
----- -----------
Net Assets..................................... 100.0% $84,066,989
===== ===========
</TABLE>
* Non-income producing security.
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
December 31, 1999.
144A Security that may be resold to "qualified institutional buyers" under Rule
144A of the Securities Act of 1933. This security has been determined to
be liquid under guidelines established by the Board of Trustees.
Summary of Abbreviations
ADR American Depository Receipt
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
65
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 96.7%
Aerospace & Military Technology - 1.6%
500 British Aerospace Plc.................................... $ 3,287
13,000 Embraer-Empresa Brasileira de Aeronautica SA............. 58,650
----------
61,937
----------
Appliances & Household
Durables - 0.6%
500 Electrolux AB............................................ 12,575
1,000 Matsushita Electric Works Ltd. .......................... 9,885
----------
22,460
----------
Automobiles - 2.5%
1,000 Nippon Sheet Glass Co. .................................. 5,187
180 Peugeot SA............................................... 40,870
1,000 Toyota Motor Corp. ...................................... 48,449
----------
94,506
----------
Banking - 11.9%
1,313 Anglo Irish Bank Corp. Plc............................... 3,042
524 Argentaria SA............................................ 12,315
100 Banco Popular Espana SA.................................. 6,523
600 Bank Nova Scotia Halifax................................. 12,906
1,000 Bank Of Tokyo-Mitsubishi Ltd. ........................... 13,938
177 Banque Nationale de Paris................................ 16,332
1,040 Barclays Bank Plc........................................ 29,886
2,744 DBS Group Holdings....................................... 44,978
430 Deutsche Bank AG......................................... 36,320
41 Dexia Belgium (Credit Communal).......................... 6,571
788 Fortis (NL) NV........................................... 28,378
3,400 Grupo Financiero Banamex AC, Ser. O...................... 13,636
59,600 Grupo Financiero Bancomer SA, Ser. O..................... 24,909
3,750 HSBC Holdings Plc........................................ 52,582
1,775 HSBC Holdings Plc (London Exchange)...................... 24,600
1,159 Lloyds TSB Group Plc..................................... 14,397
1,068 Royal Bank of Scotland Group Plc......................... 18,908
1,000 Sumitomo Bank Ltd. ...................................... 13,693
1,992 Svenska Handelsbanken AB, Ser A.......................... 25,049
561 Toronto Dominion Bank Ontario............................ 15,060
50 UBS AG................................................... 13,502
300 Uniao de Bancos Brasileiros SA, GDR ("Unibanco")......... 9,038
3 Verwalt & Private Bank................................... 12,435
----------
448,998
----------
Beverages & Tobacco - 2.4%
146 * Al-Ahram Beverage Co. SA, GDR, 144A.................... 2,876
400 Doutor Coffee Co. ....................................... 32,495
450 Fomento Economico Mexicano, Ser. B, ADR.................. 20,025
2,434 Fosters Brewing Group Ltd. .............................. 6,983
1,000 Fraser & Neave Ltd. ..................................... 3,693
219 Heineken NV.............................................. 10,682
98 Pernod Ricard SA......................................... 5,607
900 Rembrandt Controlling Investments Ltd. .................. 5,703
400 Technical & Industrial Investments Ltd. ................. 2,193
----------
90,257
----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Broadcasting & Publishing - 3.6%
32 Edipresse SA............................................. $ 17,685
400 * Grupo Televisa SA, ADR................................. 27,300
1,591 Mondadori Edit SpA....................................... 50,485
492 Quebecor, Inc., Cl. B.................................... 13,122
8,800 Seat Pagine Gialle SpA................................... 19,343
125 VNU NV................................................... 6,570
----------
134,505
----------
Building Materials & Components - 1.8%
1,049 Cemex SA de CV, Ser. B................................... 29,241
200 Compagnie Generale des Etablissements Michelin, Cl. B.... 7,857
11 Holderbank Financiere Glarus AG.......................... 15,060
150 Lafarge SA............................................... 17,468
----------
69,626
----------
Business & Public Services - 3.8%
1,788 Aegis Group Plc.......................................... 6,498
4,200 Ashtead Group Plc........................................ 11,398
46 Cap Gemini NV............................................ 11,677
1,047 Compass Group Plc........................................ 14,375
200 * ISS International Service System AS, Ser. B............ 13,453
300 Pearson Publishing Plc................................... 9,765
30 SAP AG................................................... 18,072
472 Telegraaf Holdings NV.................................... 10,460
1 The Goodwill Group....................................... 48,938
----------
144,636
----------
Chemicals - 1.8%
583 Akzo Nobel NV............................................ 29,247
2,000 Asahi Chemical Industry Co., Ltd. ....................... 10,277
155 BASF AG.................................................. 7,963
130 Bayer AG................................................. 6,155
1,000 Nippon Shokubai Co....................................... 4,629
2,000 Sumitomo Chemical........................................ 9,396
----------
67,667
----------
Data Processing & Reproduction - 2.1%
95 * Atos SA................................................ 15,752
1,210 Logica Plc............................................... 31,272
1,000 Nihon Unisys............................................. 34,453
----------
81,477
----------
Education - 1.3%
200 Benesse Corp. ........................................... 48,155
----------
Electrical & Electronics - 2.5%
359 * ASM Lithography Holding NV............................. 40,836
910 Hyundai Electronics Industries........................... 19,314
145 Philips Electronics NV................................... 19,719
4,000 Sanyo Electric Co. Ltd. ................................. 16,248
----------
96,117
----------
Electronic Components - 0.8%
880 Assa Abloy AB............................................ 12,359
1,208 Smiths Industries Plc.................................... 18,049
----------
30,408
----------
</TABLE>
66
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Energy Sources - 5.3%
5,124 BP Amoco................................................. $ 51,723
300 BP Amoco Plc, ADR........................................ 17,794
8,199 ENI SpA.................................................. 45,096
2,000 Nippon Oil Co. .......................................... 8,809
1,400 Petro-Canada............................................. 19,834
300 Repsol-YPF, SA........................................... 6,957
860 Shell Transportation & Trading Co., Plc.................. 7,147
662 SK Corp., GDR, 144A...................................... 20,055
170 Total Fina SA, Cl. B..................................... 22,690
----------
200,105
----------
Financial Services - 3.4%
904 Close Brothers Group Plc................................. 16,062
1 Invik & Co. AB........................................... 119
100 Kinnevik Investments, Ser. B............................. 3,103
694 Lend Lease Corp. Ltd. ................................... 9,723
100 Orix Corp. .............................................. 22,531
862 Prudential Corp. Plc..................................... 16,820
30 Societe Eurafrance SA.................................... 18,072
300 Takefuji Corp. .......................................... 37,555
600 Technical Investment Corp. .............................. 3,139
----------
127,124
----------
Food & Household Products - 1.8%
59 Groupe Danone............................................ 13,907
73 Huhtamaki Van Leer Oyj................................... 2,471
5,200 Kimberly Clark Corp. de Mexico SA de CV, Cl. A........... 20,306
4 Lindt & Spruengli AG..................................... 9,546
12 Nestle SA................................................ 21,983
100 Tiger Oats............................................... 1,154
----------
69,367
----------
Forest Products & Paper - 1.7%
11,051 Jefferson Smurfit Group Plc.............................. 33,397
959 Stora Enso Oyj........................................... 16,722
344 UPM-Kymmene Oyj.......................................... 13,861
----------
63,980
----------
Health & Personal Care - 4.5%
75 Aventis SA............................................... 4,352
228 * Fresenius Medical Care AG.............................. 19,499
485 Glaxo Wellcome Plc....................................... 13,741
8 Novartis AG.............................................. 11,747
1,000 Parkway Holdings Ltd. ................................... 2,270
97 Pharmacia & Upjohn, Inc. ................................ 4,400
385 Aventis.................................................. 22,378
2 Roche Holding AG......................................... 23,739
33 Schering AG.............................................. 3,989
278 SmithKline Beecham Plc................................... 3,525
1,000 Terumo Corp.............................................. 26,720
1,000 Yamanouchi Pharmaceutical Co., Ltd. ..................... 34,942
----------
171,302
----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Industrial Components - 0.7%
100 Compagnie de Saint Gobain................................ $ 18,807
2,025 Williams Plc............................................. 9,224
----------
28,031
----------
Insurance - 3.0%
463,200 Aksigorta AS............................................. 28,181
768 Allied Zurich Plc........................................ 9,056
265 AXA...................................................... 36,945
2,000 Clarica Life Insurance Co. .............................. 36,024
400 * Manulife Financial Corp................................ 5,113
----------
115,319
----------
Leisure & Tourism - 0.6%
3,180 Cannons Plc.............................................. 9,426
108 * Club Mediterranee SA................................... 12,489
----------
21,915
----------
Machinery & Engineering - 5.9%
700 Fanuc Ltd. .............................................. 89,136
3,593 FKI Plc.................................................. 14,074
600 Nitto Kohki Co., Ltd. ................................... 12,597
2,000 NTN Corp................................................. 5,912
2,231 Invensys Plc............................................. 11,795
400 SMC Corp. ............................................... 88,519
----------
222,033
----------
Merchandising - 2.8%
11,700 Dairy Farm International................................. 10,530
440 Karstadt AG.............................................. 17,641
1,300 New Clicks Holdings Ltd. ................................ 2,672
500 Paris Miki, Inc. ........................................ 35,920
2,400 Sobeys Inc............................................... 33,252
200 Vendex International NV.................................. 5,319
----------
105,334
----------
Metals-Non Ferrous - 0.4%
2,850 Billiton Plc............................................. 16,895
----------
Metals-Steel - 0.1%
2,000 * Kawasaki Steel Corp. .................................. 3,582
----------
Multi-Industry - 4.9%
524 Anglo American Plc....................................... 33,713
1,000 Citic Pacific, Ltd. ..................................... 3,756
3,000 Hutchison Whampoa, Ltd. ................................. 43,610
56 Marine- Wendel SA........................................ 11,988
401 Preussag AG.............................................. 22,338
825 * Thyssen Krupp AG....................................... 25,140
479 Vivendi.................................................. 43,258
----------
183,803
----------
Real Estate - 0.6%
22,000 Henderson Investment Ltd. ............................... 22,783
----------
Technology - 5.6%
187 * Logitech International SA.............................. 52,848
714 Nokia AB Oyj............................................. 129,465
195 STMicroelectronics....................................... 30,015
----------
212,328
----------
</TABLE>
67
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Telecommunications - 18.0%
386 BCE Inc. ............................................... $ 35,070
1,110 British Telecommunications Plc.......................... 26,895
296 * Colt Telecom Group Plc................................ 15,281
947 Deutsche Telekom AG..................................... 67,445
1,900 Embratel Participacoes SA, ADR.......................... 51,775
158 France Telecom SA....................................... 20,898
1,450 Korea Telecom Corp. .................................... 108,388
200 KPN NV.................................................. 19,522
278 Mannesmann AG........................................... 67,070
4 Nippon Telegraph & Telephone Corp. ..................... 68,513
1,046 * Orange Plc............................................ 35,465
12,790 * Tecnost SpA........................................... 48,315
1,000 Tele Norte Leste Participacoes SA, ADR.................. 25,500
1,005 Telecom Italia Mobile (TIM) SpA......................... 11,227
100 Telecomunicacoes Brasileiras SA, ADR Preference Shares
("Telebras") .......................................... 12,850
561 * Telefonica SA......................................... 14,015
10,310 Vodafone Airtouch Plc................................... 51,392
----------
679,621
----------
Textiles - 0.3%
220 Gamma Holding NV........................................ 8,466
1,000 * Kanebo................................................ 1,615
----------
10,081
----------
Transportation-Roads & Rail - 0.2%
1,200 Laidlaw, Inc............................................ 6,276
----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Wholesale & International Trade - 0.2%
1,000 Mitsubishi Corp. ...................................... $ 7,722
----------
Total Common Stocks
(cost $2,832,503)..................................... 3,658,350
----------
PREFERRED STOCKS - 0.5%
Health & Personal Care - 0.5%
95 Fresenius AG (cost $14,867)............................ 17,417
----------
WARRANTS - 0.0%
Building Materials & Components - 0.0%
65 Cemex SA de CV, ADR (cost $114) ....................... 268
----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 3.1%
Repurchase Agreements - 3.1%
$116,000 State Street Bank & Trust Co. 2.80%, purchased
12/31/1999, maturing 1/3/2000, maturity value $116,027
(cost $116,000) (a)................................... 116,000
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $2,963,484)............................... 100.3% 3,792,035
Other Assets and
Liabilities - net............................... (0.3) (10,116)
----- ----------
Net Assets....................................... 100.0% $3,781,919
===== ==========
</TABLE>
* Non-income producing security.
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
December 31, 1999.
144A Security that may be resold to "qualified institutional buyers" under Rule
144A of the Securities Act of 1933. This security has been determined to
be liquid under guidelines established by the Board of Trustees.
Summary of Abbreviations
ADR American Depository Receipt
GDR Global Depository Receipts
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward Foreign Currency Contracts to Buy:
<TABLE>
<CAPTION>
Exchange U.S. Value at In Exchange
Date Contracts to Receive December 31, 1999 for U.S. $ Unrealized Gain
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1/31/2000 16,360,185 Japanese Yen $160,962 $159,699 $1,263
</TABLE>
Forward Foreign Currency Contracts to Sell:
<TABLE>
<CAPTION>
Exchange U.S. Value at In Exchange
Date Contracts to Deliver December 31, 1999 for U.S. $ Unrealized Loss
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1/31/2000 16,360,185 Japanese Yen $160,962 $157,000 $(3,962)
2/16/2000 16,062,495 Japanese Yen $158,429 $155,000 $(3,429)
</TABLE>
68
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
December 31, 1999
At December 31, 1999, the Fund held securities in the following countries:
<TABLE>
<CAPTION>
Percentage of
Market Value Portfolio Assets
- -----------------------------------------------
<S> <C> <C>
Japan $ 739,816 19.5%
United Kingdom 542,464 14.3%
France 341,349 9.0%
Germany 309,050 8.1%
Netherlands 209,215 5.5%
Switzerland 178,546 4.7%
Canada 176,657 4.7%
Italy 174,465 4.6%
Finland 162,519 4.3%
Brazil 157,812 4.2%
Korea 147,757 3.9%
Mexico 135,685 3.6%
Hong Kong 122,731 3.2%
United States+ 120,400 3.2%
Singapore 61,470 1.6%
Sweden 53,204 1.4%
Other Securities 158,895 4.2%
---------- ------
$3,792,035 100.0%
========== ======
</TABLE>
+ Includes short-term securities
See Combined Notes to Financial Statements.
69
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 95.0%
Advertising & Related Services - 0.4%
1,200 Interpublic Group of Companies, Inc. ................... $ 69,225
100 RH Donnelley Corp. ..................................... 1,887
100 Young & Rubicam, Inc.................................... 7,075
-----------
78,187
-----------
Aerospace & Defense - 1.0%
1,200 Boeing Co. ............................................. 49,875
200 General Dynamics Corp. ................................. 10,550
887 Honeywell International, Inc............................ 51,169
100 Raytheon Co., Cl. B..................................... 2,656
400 Rockwell International Corp. ........................... 19,150
1,000 United Technologies Corp. .............................. 65,000
-----------
198,400
-----------
Automotive Equipment & Manufacturing - 0.3%
100 Arvin Industries, Inc................................... 2,838
100 Cooper Tire & Rubber Co................................. 1,556
500 Delphi Automotive Systems Corp.......................... 7,875
400 General Motors Corp..................................... 29,075
100 Johnson Controls, Inc. ................................. 5,687
200 Meritor Automotive, Inc. ............................... 3,875
100 SPX Corp. .............................................. 8,081
100 * Tower Automotive, Inc. ............................... 1,544
100 TRW, Inc. .............................................. 5,194
-----------
65,725
-----------
Banks - 3.2%
670 Associated Banc Corp.................................... 22,948
200 BankAmerica Corp. ...................................... 10,038
100 BB&T Corp. ............................................. 2,738
1,710 Charter One Financial, Inc.............................. 32,704
300 Chase Manhattan Corp. .................................. 23,306
100 Comerica, Inc........................................... 4,669
100 Dime Bancorp, Inc. ..................................... 1,513
600 Fifth Third Bancorp..................................... 44,025
2,390 First Security Corp. ................................... 61,020
1,900 Firstar Corp. .......................................... 40,137
1,184 FleetBoston Financial Corp.............................. 41,218
2,750 Huntington Bancshares, Inc.............................. 65,656
2,000 KeyCorp................................................. 44,250
90 M&T Bank Corp. ......................................... 37,282
440 Marshall & Ilsley Corp. ................................ 27,637
1,160 North Fork Bancorp, Inc. ............................... 20,300
200 Northern Trust Corp..................................... 10,600
105 Old Kent Financial Corp................................. 3,714
200 PNC Bank Corp........................................... 8,900
1,100 SouthTrust Corp. ....................................... 41,594
1,000 Wells Fargo Co.......................................... 40,437
300 Zions Bancorp........................................... 17,756
-----------
602,442
-----------
Building, Construction &
Furnishings - 0.5%
200 * American Standard Companies, Inc. .................... 9,175
100 Centex Construction Products, Inc....................... 3,900
Building, Construction &
Furnishings - continued
1,080 Clayton Homes, Inc. .................................... $ 9,922
200 Johns Manville Corp. ................................... 2,800
100 Lafarge Corp. .......................................... 2,763
100 Masco Corp.............................................. 2,538
430 Miller (Herman), Inc. .................................. 9,890
100 * Mohawk Industries, Inc................................ 2,638
100 * NVR, Inc.............................................. 4,775
100 Rayonier, Inc. ......................................... 4,831
100 Ryland Group, Inc....................................... 2,306
700 * Shaw Industries, Inc. ................................ 10,806
200 Sherwin Williams Co. ................................... 4,200
1,580 United States Aggregates, Inc........................... 18,960
-----------
89,504
-----------
Business Equipment &
Services - 4.7%
911 * Affiliated Computer Services, Inc., Cl. A............. 41,906
200 Automatic Data Processing, Inc.......................... 10,775
100 * CDI Corp. ............................................ 2,412
2,000 * Computer Sciences Corp. .............................. 189,250
100 De Luxe Corp. .......................................... 2,744
100 Dun & Bradstreet Corp. ................................. 2,950
300 First Data Corp. ....................................... 14,794
2,861 * Fiserv, Inc. ......................................... 109,612
4,256 * Nova Corp. ........................................... 134,330
100 Paychex, Inc. .......................................... 4,000
1,900 * Seagate Technology.................................... 88,469
6,465 * SunGard Data Systems, Inc............................. 153,544
300 Xerox Corp.............................................. 6,806
2,000 * Zebra Technologies Corp., Cl. A....................... 117,000
-----------
878,592
-----------
Chemical & Agricultural
Products - 1.4%
4,330 AGCO Corp. ............................................. 58,184
100 * Agribrands International, Inc......................... 4,600
100 Dow Chemical Co. ....................................... 13,363
600 Du Pont (E. I.) De Nemours & Co......................... 39,525
100 Great Lakes Chemical Corp. ............................. 3,819
600 Praxair, Inc............................................ 30,187
1,500 Sigma-Aldrich Corp...................................... 45,094
100 Solutia, Inc............................................ 1,544
200 Union Carbide Corp. .................................... 13,350
1,000 Waters Corp. ........................................... 53,000
-----------
262,666
-----------
Communication Systems &
Services - 2.3%
2,400 * American Tower Systems Corp., Cl. A................... 73,350
1,900 * Cisco Systems, Inc.................................... 203,537
200 * Conexant Systems, Inc................................. 13,275
1,100 Lucent Technologies, Inc. .............................. 82,294
450 * MCI WorldCom, Inc..................................... 23,878
20 * Metromedia Fiber Network, Inc., Cl. A................. 959
</TABLE>
70
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Communication Systems &
Services - continued
300 RF Micro Devices, Inc................................... $ 20,531
100 Snyder Communications, Inc.............................. 1,925
200 * Tellabs, Inc.......................................... 12,838
100 Western Wireless Corp., Cl. A........................... 6,675
-----------
439,262
-----------
Consumer Products & Services - 2.3%
200 * Avis Rent-A-Car, Inc.................................. 5,113
700 Colgate-Palmolive Co.................................... 45,500
1,100 Collectors Universe, Inc................................ 6,875
934 * CSG System International, Inc......................... 37,243
670 Dial Corp............................................... 16,289
400 Eastman Kodak Co........................................ 26,500
800 Gucci Group............................................. 91,600
100 H & R Block, Inc........................................ 4,375
100 Harley-Davidson, Inc.................................... 6,406
100 Hasbro, Inc............................................. 1,906
100 Hertz Corp., Cl. A...................................... 5,013
800 Lauder Estee Cos., Inc., Cl. A.......................... 40,350
100 Liz Claiborne, Inc...................................... 3,763
2,504 * Lo-Jack Corp. ........................................ 16,902
330 Manpower, Inc. ......................................... 12,416
100 Nike, Inc., Cl. B....................................... 4,956
200 * R.J. Reynolds Tobacco Holdings, Inc................... 3,525
240 Sotheby's Holdings, Inc., Cl. A......................... 7,200
3,200 Tupperware Corp. ....................................... 54,200
100 UST, Inc. .............................................. 2,519
700 Valspar Corp............................................ 29,313
100 WestPoint Stevens, Inc.................................. 1,750
100 Whirlpool Corp.......................................... 6,506
-----------
430,220
-----------
Diversified Companies - 0.8%
100 Cooper Industries, Inc. ................................ 4,044
300 Minnesota Mining & Manufacturing Co..................... 29,363
2,900 Tyco International, Ltd................................. 112,737
-----------
146,144
-----------
Electrical Equipment &
Services - 4.9%
1,660 * Atmel Corp............................................ 49,074
200 AVX Corp. .............................................. 9,988
5,648 * Cable Design Technologies Corp........................ 129,904
1,000 * Cypress Semiconductor Corp............................ 32,375
200 Emerson Electric Co..................................... 11,475
1,800 General Electric Co..................................... 278,550
100 Integrated Device Technology............................ 2,900
100 * Lam Research Corp..................................... 11,156
200 * Lattice Semiconductor Corp............................ 9,425
640 Linear Technology Corp.................................. 45,800
1,120 * Maxim Integrated Products, Inc........................ 52,850
367 * Novellus Systems, Inc................................. 44,969
100 * QLogic Corp........................................... 15,987
2,592 * Sipex Corp............................................ 63,666
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Electrical Equipment &
Services - continued
600 * Solectron Corp........................................ $ 57,075
1,000 Thomas & Betts Corp. ................................... 31,875
1,740 * Xilinx, Inc........................................... 79,116
-----------
926,185
-----------
Electronic Equipment &
Services - 2.1%
60 Agilent Technologies, Inc............................... 4,639
1,100 * Dupont Photomasks, Inc................................ 53,075
500 * Hadco Corp. .......................................... 25,500
740 * Jabil Circuit, Inc.................................... 54,020
511 * KLA-Tencor Corp....................................... 56,913
388 * LTX Corp.............................................. 8,682
1,300 * MKS Instruments, Inc. ................................ 46,962
420 Sawtek, Inc............................................. 27,956
1,295 * Teradyne, Inc......................................... 85,470
400 Texas Instruments, Inc. ................................ 38,750
-----------
401,967
-----------
Finance & Insurance - 5.2%
100 Aetna, Inc.............................................. 5,581
100 AFLAC, Inc.............................................. 4,719
200 Allmerica Financial Corp................................ 11,125
400 Allstate Corp. ......................................... 9,600
660 AMBAC Financial Group, Inc. ............................ 34,444
400 American Express Co..................................... 66,500
500 American General Corp................................... 37,937
750 American International Group, Inc....................... 81,094
400 AXA Financial, Inc...................................... 13,550
100 Bear Stearns Companies, Inc............................. 4,275
400 Capital One Financial Corp. ............................ 19,275
200 CIGNA Corp.............................................. 16,112
100 Cincinnati Financial Corp............................... 3,119
2,900 Citigroup, Inc.......................................... 161,131
100 Conseco, Inc. .......................................... 1,788
5,525 Edwards (A.G.), Inc..................................... 177,145
100 Federal Home Loan Mortgage Corp......................... 4,706
100 Financial Security Assured
Holdings Ltd........................................... 5,212
100 Goldman Sachs Group, Inc................................ 9,419
100 Greenpoint Financial Corp............................... 2,381
100 Hartford Life, Inc., Cl. A.............................. 4,400
100 Household International, Inc............................ 3,725
100 Jefferson Pilot Corp.................................... 6,825
500 Lincoln National Corp................................... 20,000
100 Loews Corp.............................................. 6,069
100 Marsh & McLennan Co., Inc. ............................. 9,569
850 MBIA, Inc............................................... 44,891
100 MGIC Investment Corp.................................... 6,019
400 Morgan Stanley, Dean Witter & Co. ...................... 57,100
150 PMI Group, Inc.......................................... 7,322
500 Providian Financial Corp................................ 45,531
720 ReliaStar Financial Corp................................ 28,215
2,000 Torchmark Corp.......................................... 58,125
</TABLE>
71
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Finance & Insurance - continued
100 UnumProvident Corp...................................... $ 3,206
400 Washington Mutual, Inc.................................. 10,400
-----------
980,510
-----------
Food & Beverage Products - 2.8%
200 Albertsons, Inc......................................... 6,450
500 Anheuser Busch Companies, Inc........................... 35,437
100 Conagra, Inc............................................ 2,256
100 Coors Adolph Co., Cl. B................................. 5,250
100 Corn Products International, Inc........................ 3,275
100 Darden Restaurants, Inc................................. 1,813
12,940 * Del Monte Foods Co.................................... 159,324
100 Fortune Brands, Inc. ................................... 3,306
700 Great Atlantic & Pacific Tea, Inc....................... 19,513
100 IBP, Inc................................................ 1,800
2,049 * Keebler Foods Co...................................... 57,628
6,800 * Kroger Co............................................. 128,350
1,900 Philip Morris Companies, Inc. .......................... 44,056
600 SYSCO Corp.............................................. 23,738
200 * Tricon Global Restaurants, Inc........................ 7,725
1,920 Tyson Foods, Inc., Cl. A................................ 31,200
200 Wendy's International, Inc.............................. 4,125
-----------
535,246
-----------
Gold Mining - 0.0%
100 Homestake Mining Co..................................... 781
-----------
Healthcare Products & Services - 8.5%
400 Abbott Laboratories..................................... 14,525
500 Allergan, Inc........................................... 24,875
1,000 * Alza Corp............................................. 34,625
1,400 * Amgen, Inc............................................ 84,087
200 Bausch & Lomb, Inc...................................... 13,688
1,100 Beckman Coulter, Inc.................................... 55,962
300 * Biogen, Inc........................................... 25,350
100 Biomet, Inc............................................. 4,000
1,500 Bristol-Myers Squibb Co................................. 96,281
200 Cardinal Health, Inc.................................... 9,575
200 * Cytyc Corp............................................ 12,213
18,723 * Health Management Associates, Inc., Cl. A............. 250,420
4,864 * Idexx Laboratories, Inc............................... 78,432
200 Immunex Corp............................................ 21,900
1,400 Johnson & Johnson....................................... 130,375
2,370 * Lincare Holdings, Inc. ............................... 82,209
100 MedImmune, Inc. ........................................ 16,588
600 Merck & Co., Inc........................................ 40,237
200 * Millennium Pharmaceuticals, Inc....................... 24,400
100 Pacificare Health Systems, Inc., Cl. A.................. 5,300
100 Pharmacia & Upjohn, Inc................................. 4,500
2,100 Schering-Plough Corp.................................... 88,594
6,296 * Steris Corp........................................... 64,927
9,633 * Total Renal Care Holdings, Inc........................ 64,421
100 Trigon Healthcare, Inc. ................................ 2,950
200 United Healthcare Corp.................................. 10,625
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Healthcare Products &
Services - continued
1,621 United Therapeutics Corp................................ $ 74,566
3,700 * VISX, Inc............................................. 191,475
900 Warner-Lambert Co. ..................................... 73,744
-----------
1,600,844
-----------
Industrial Specialty Products & Services - 0.8%
200 Corning, Inc. .......................................... 25,787
200 Dover Corp.............................................. 9,075
100 Eaton Corp.............................................. 7,263
100 Ecolab, Inc. ........................................... 3,913
100 Illinois Tool Works, Inc................................ 6,756
2,600 Leggett & Platt, Inc.................................... 55,737
200 Mark IV Industries, Inc................................. 3,538
100 Parker Hannifin Corp.................................... 5,131
1,020 Teleflex, Inc........................................... 31,939
200 Vulcan Materials Co..................................... 7,987
100 York International Corp. ............................... 2,744
-----------
159,870
-----------
Information Services &
Technology - 18.7%
100 * Adaptec, Inc.......................................... 4,988
830 * Altera Corp........................................... 41,137
1,200 * America Online, Inc................................... 90,525
1,400 * Analog Devices, Inc................................... 130,200
675 Ancor Communications, Inc............................... 45,816
600 * Apple Computer........................................ 61,687
400 * Applied Materials, Inc................................ 50,675
1,186 * Aspen Technology, Inc................................. 31,355
600 * BMC Software, Inc..................................... 47,962
300 * Cabletron Systems, Inc................................ 7,800
1,960 * Cadence Design Systems, Inc........................... 47,040
133 Checkfree Holdings Corp................................. 13,898
100 * Citrix Systems, Inc................................... 12,300
1,200 * Computer Network Technology........................... 27,525
200 * Comverse Technology, Inc.............................. 28,950
900 * Dell Computer Corp.................................... 45,900
1,047 * DST Systems, Inc...................................... 79,899
500 Electronic Data Systems Corp............................ 33,469
200 * Electronics for Imaging, Inc.......................... 11,625
500 * EMC Corp.............................................. 54,625
300 Emulex Corp............................................. 33,750
767 * Etec Systems, Inc..................................... 34,419
2,500 Fair Issac & Co., Inc................................... 132,500
2,566 Harbinger Corp.......................................... 81,631
100 Harmonic Lightwaves, Inc................................ 9,494
300 Hewlett-Packard Co...................................... 34,181
780 Informix Corp........................................... 8,921
2,000 Intel Corp. ............................................ 164,625
410 Interliant, Inc......................................... 10,660
800 International Business Machines Corp.................... 86,400
1,130 * Intuit, Inc........................................... 67,729
400 * JDS Uniphase Corp..................................... 64,525
</TABLE>
72
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Information Services &
Technology - continued
100 * Keane, Inc............................................ $ 3,175
460 * Legato Systems, Inc................................... 31,654
200 * Lexmark International Group, Inc., Cl. A.............. 18,100
200 * LSI Logic............................................. 13,500
200 Macromedia, Inc......................................... 14,625
300 * Micron Technology, Inc................................ 23,325
1,500 * Micros Systems, Inc................................... 111,000
3,700 * Microsoft Corp........................................ 431,975
1,800 National Data Corp...................................... 61,087
200 * National Semiconductor Corp........................... 8,563
660 * NCR Corp.............................................. 24,997
1,140 * Network Associates, Inc............................... 30,424
1,000 Network Solutions, Inc., Cl. A.......................... 217,562
700 * Oracle Systems Corp................................... 78,444
200 * Peoplesoft, Inc....................................... 4,263
100 Quantum Corp............................................ 1,513
4,410 RSA Security, Inc....................................... 341,775
150 S1 Corp................................................. 11,719
540 * SCI Systems, Inc...................................... 44,381
100 SEI Investments Co...................................... 11,902
3,300 * SportsLine USA, Inc................................... 165,412
1,200 * Sun Microsystems, Inc. ............................... 92,925
150 Symbol Technologies, Inc................................ 9,534
100 * Synopsys, Inc......................................... 6,675
680 * Veritas Software Corp................................. 97,325
200 * Xircom, Inc........................................... 15,000
139 * Yahoo!, Inc........................................... 60,144
-----------
3,527,210
-----------
Iron & Steel - 0.0%
100 AK Steel Holding Corp................................... 1,887
150 Reliance Steel & Aluminum Co............................ 3,516
-----------
5,403
-----------
Leisure & Tourism - 0.3%
200 Brunswick Corp.......................................... 4,450
300 Carnival Corp., Cl. A................................... 14,343
60 MGM Grand, Inc.......................................... 3,019
2,950 Park Place Entertainment Corp. ......................... 36,875
-----------
58,687
-----------
Machinery - Diversified - 1.4%
1,329 * Applied Science & Tech, Inc........................... 44,168
8,000 * Terex Corp............................................ 222,000
-----------
266,168
-----------
Manufacturing - Distributing - 0.4%
100 Briggs & Stratton Corp.................................. 5,362
4,000 CLARCOR, Inc............................................ 72,000
100 Dexter Corp............................................. 3,975
-----------
81,337
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Metal Products & Services - 0.1%
100 Alcoa, Inc. ............................................ $ 8,300
100 Inco Ltd................................................ 2,350
100 Ryerson Tull, Inc....................................... 1,944
-----------
12,594
-----------
Office Equipment & Supplies - 0.0%
200 John H. Harland Co. .................................... 3,663
100 Pitney Bowes, Inc....................................... 4,831
-----------
8,494
-----------
Oil/Energy - 6.1%
100 Amerada Hess Corp....................................... 5,675
4,155 Apache Corp. ........................................... 153,475
2,500 Beau Canada Exploration Ltd............................. 2,944
1,000 * Berkley Petroleum Corp. .............................. 8,763
500 Burlington Resources, Inc............................... 16,531
5,000 * Canadian 88 Energy Corp............................... 6,928
200 Canadian Hunter Exploration Ltd......................... 3,291
300 Chevron Corp............................................ 25,988
300 * Chieftain International, Inc.......................... 5,175
1,500 Conoco, Inc., Cl. A..................................... 37,125
300 Devon Energy Corp. ..................................... 9,863
500 Encal Energy Ltd........................................ 2,286
1,300 Enron Corp.............................................. 57,687
5,500 EOG Resources, Inc...................................... 96,594
1,960 Exxon Mobil Corp........................................ 157,902
4,954 * Houston Exploration Co................................ 98,151
200 Murphy Oil Corp......................................... 11,475
8,074 * Newfield Exploration Co. ............................. 215,979
500 Paramount Resources Ltd................................. 5,888
100 Phillips Petroleum Co................................... 4,700
961 Prize Energy, Inc....................................... 200
300 Rio Alto Exploration Ltd................................ 4,240
1,900 Royal Dutch Petroleum Co................................ 114,831
100 * Stone Energy Corp..................................... 3,563
200 Talisman Energy, Inc. .................................. 5,113
300 Tesoro Petroleum Corp................................... 3,469
400 Texaco, Inc............................................. 21,725
200 Ulster Petes Ltd. ...................................... 1,780
1,122 Vastar Resources, Inc................................... 66,198
-----------
1,147,539
-----------
Oil Field Services - 4.5%
300 * Anderson Exploration Ltd. ............................ 3,585
520 * BJ Services Co., Inc.................................. 21,742
1,595 * Cooper Cameron Corp................................... 78,055
3,777 Diamond Offshore Drilling, Inc.......................... 115,435
2,500 Frontier Oil Corp....................................... 16,875
12,747 * Global Industries Ltd................................. 109,943
1,150 * Global Marine, Inc.................................... 19,119
600 * Nabors Industries, Inc. .............................. 18,563
5,594 * Noble Drilling Corp................................... 183,203
3,000 Ranger Oil Ltd.......................................... 9,352
450 Tidewater, Inc. ........................................ 16,200
</TABLE>
73
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Oil Field Services - continued
6,518 Transocean Sedco Forex, Inc............................ $ 219,576
820 * Weatherford International, Inc....................... 32,749
-----------
844,397
-----------
Paper & Packaging - 1.0%
200 Avery Dennison Corp.................................... 14,575
100 Ball Corp.............................................. 3,937
380 Bowater, Inc........................................... 20,639
100 Georgia-Pacific Corp................................... 5,075
900 Kimberly-Clark Corp.................................... 58,725
200 Louisiana Pacific Corp................................. 2,850
400 * Sealed Air Corp...................................... 20,725
1,700 * Smurfit Container Corp............................... 41,650
400 Weyerhaeuser Co........................................ 28,725
-----------
196,901
-----------
Pharmaceuticals - 0.8%
100 Andrx Corp............................................. 4,231
1,690 Chiron Corp............................................ 71,614
200 Genetech, Inc.......................................... 26,900
430 * Sepracor, Inc........................................ 42,651
-----------
145,396
-----------
Printing, Publishing, Broadcasting & Entertainment -
4.1%
1,800 AT&T Corp.-Liberty Media Group, Cl. A.................. 102,150
900 * CBS Corp............................................. 57,544
100 Central Newspapers, Inc., Cl. A........................ 3,938
700 * Clear Channel Communications, Inc.................... 62,475
1,500 Comcast Corp., Cl. A................................... 75,844
100 * Cox Communications, Inc., Cl. A...................... 5,150
200 Gannett Co., Inc....................................... 16,312
932 * Hearst-Argyle Television, Inc........................ 24,814
100 Knight-Ridder, Inc..................................... 5,950
100 McClatchy Co., Cl. A................................... 4,325
123 Meredith Corp.......................................... 5,128
100 New York Times Co., Cl. A ............................. 4,913
200 Omnicom Group, Inc..................................... 20,000
1,100 Reader's Digest Association, Inc. Cl. A................ 32,175
1,581 * Scholastic Corp...................................... 98,318
234 * Sinclair Broadcast Group, Inc., Cl. A................ 2,856
25 Spanish Broadcasting System, Inc., Cl. A............... 1,006
1,900 Time Warner, Inc....................................... 137,631
100 Times Mirror Co. Ser. A................................ 6,700
200 Tribune Co............................................. 11,012
200 * USA Networks, Inc.................................... 11,050
100 * Valassis Communications, Inc......................... 4,225
1,400 * Viacom, Inc., Cl. B.................................. 84,612
-----------
778,128
-----------
Real Estate - 0.2%
900 Boston Properties, Inc. REIT........................... 28,012
100 Del Webb Corp.......................................... 2,494
200 Marriott International, Inc., Cl. A.................... 6,313
-----------
36,819
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Retailing & Wholesale - 7.3%
400 * Abercrombie & Fitch Co., Cl. A........................ $ 10,675
100 * Amazon Common, Inc.................................... 7,613
100 * American Eagle Outfitters, Inc........................ 4,500
100 * Ann Taylor Stores Corp................................ 3,444
320 * Barnes & Noble, Inc................................... 6,600
200 * Best Buy Co., Inc..................................... 10,038
2,569 * BJ's Wholesale Club, Inc.............................. 93,768
540 * Borders Group, Inc.................................... 8,674
660 Brinker International, Inc.............................. 15,840
100 Circuit City Stores, Inc................................ 4,506
100 * Costco Wholesale Corp................................. 9,125
700 CVS Corp................................................ 27,956
700 Dayton Hudson Corp...................................... 51,406
100 Dollar General Corp..................................... 2,275
9,000 Ethan Allen Interiors, Inc.............................. 288,562
100 Family Dollar Stores, Inc............................... 1,631
300 * Federated Department Stores, Inc...................... 15,169
400 Gap, Inc................................................ 18,400
3,300 Home Depot, Inc......................................... 226,256
100 Hughes Supply, Inc...................................... 2,156
1,530 * Jones Apparel Group, Inc.............................. 41,501
400 * K Mart Corp........................................... 4,025
100 * Kohl's Corp........................................... 7,219
100 Lands End, Inc.......................................... 3,475
200 Limited, Inc............................................ 8,663
100 * Linens 'N Things, Inc................................. 2,963
100 Lowe's Companies, Inc................................... 5,975
300 May Department Stores Co................................ 9,675
100 * Office Depot, Inc..................................... 1,094
100 * Payless Shoesource, Inc............................... 4,700
2,300 Ross Stores, Inc........................................ 41,256
100 Ruby Tuesday, Inc....................................... 1,819
2,000 * Saks, Inc............................................. 31,125
300 Sears, Roebuck & Co..................................... 9,131
100 * Shopko Stores, Inc.................................... 2,300
1,000 Tandy Corp.............................................. 49,187
100 Tiffany & Co............................................ 8,925
2,100 TJX Co., Inc............................................ 42,919
28 Too, Inc................................................ 483
100 * Toys R Us, Inc........................................ 1,431
200 W.W. Grainger, Inc...................................... 9,563
3,500 Wal-Mart Stores, Inc.................................... 241,937
470 * Williams Sonoma, Inc.................................. 21,620
200 * Zale Corp............................................. 9,675
-----------
1,369,255
-----------
Telecommunication Services & Equipment - 3.7%
100 Commscope, Inc.......................................... 4,031
100 * General Instrument Corp............................... 8,500
2,050 * Global Crossing Ltd................................... 102,500
5,054 * Intermedia Communications, Inc........................ 196,159
900 Motorola, Inc........................................... 132,525
500 Nokia Corp., ADR........................................ 95,000
</TABLE>
74
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Telecommunication Services & Equipment - continued
200 Omnipoint Corp.......................................... $ 24,125
520 * Qualcomm, Inc......................................... 91,585
180 Telephone + Data Systems, Inc........................... 22,680
100 Voicestream Wireless Corp............................... 14,231
-----------
691,336
-----------
Textile & Apparel - 0.0%
100 V.F. Corp............................................... 3,000
-----------
Thrift Institutions - 0.0%
200 * Golden St. Bancorp, Inc............................... 3,450
-----------
Transportation - 1.0%
200 * Alaska Air Group, Inc................................. 7,025
200 Burlington Northern Santa Fe Corp....................... 4,850
100 CNF Transportation, Inc................................. 3,450
200 * Continental Airlines, Inc., Cl. B..................... 8,875
300 Delta Air Lines, Inc.................................... 14,944
100 Northwest Airlines Corp., Cl. A......................... 2,225
4,000 * Skywest, Inc.......................................... 112,000
100 U.S. Freightways Corp................................... 4,787
300 Union Pacific Corp...................................... 13,087
110 United Parcel Service, Inc., Cl. B...................... 7,590
100 Xtra Corp............................................... 4,263
-----------
183,096
-----------
Utilities - Electric - 0.7%
650 Allegheny Energy, Inc................................... 17,509
100 Ameren Corp............................................. 3,275
100 Consolidated Edison, Inc................................ 3,450
300 DQE, Inc................................................ 10,387
100 DTE Energy Co........................................... 3,138
100 Duke Power Co........................................... 5,013
200 Energy East Corp........................................ 4,163
100 Entergy Corp............................................ 2,575
200 Firstenergy Corp........................................ 4,538
200 Florida Progress Corp................................... 8,462
200 FPL Group, Inc.......................................... 8,562
100 GPU, Inc................................................ 2,994
100 Northeast Utilities..................................... 2,056
100 Oge Energy Corp......................................... 1,900
200 PECO Energy Co.......................................... 6,950
300 PG & E Corp............................................. 6,150
200 PP&L Resources, Inc..................................... 4,575
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Utilities - Electric - continued
400 Public Service Enterprise Group, Inc.................. $ 13,925
100 Sempra Energy......................................... 1,738
200 Southern Co........................................... 4,700
100 Texas Utilities Co.................................... 3,556
200 TNP Enterprises, Inc.................................. 8,250
-----------
127,866
-----------
Utilities - Telephone - 3.1%
800 ALLTEL Corp........................................... 66,150
2,900 AT&T Corp............................................. 147,175
400 Bell Atlantic Corp.................................... 24,625
1,200 BellSouth Corp........................................ 56,175
200 GTE Corp.............................................. 14,113
400 * Nextel Communications, Inc., Cl. A.................. 41,250
900 SBC Communications, Inc............................... 43,875
1,800 Sprint Corp........................................... 121,162
400 * Sprint Corp. (PCS Group) Ser. 1..................... 41,000
200 U.S. West, Inc........................................ 14,400
100 * United States Cellular Corp......................... 10,094
-----------
580,019
-----------
Utilities - Water - 0.1%
730 American Water Works, Inc............................. 15,512
-----------
Utilities - 0.3%
1,300 CH Energy Group, Inc.................................. 42,900
200 Unicom Corp........................................... 6,700
-----------
49,600
-----------
Total Common Stocks
(cost $15,020,031)................................... 17,928,752
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 6.5%
Repurchase Agreement - 6.5%
$1,222,000 State Street Bank & Trust Co.,
3.25%, purchased 12/31/1999, maturing 1/3/2000,
maturity value $1,222,331 (cost $1,222,000) (a)...... 1,222,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $16,242,031)........................... 101.5% 19,150,752
Other Assets and
Liabilities - net............................ (1.5) (278,241)
----- -----------
Net Assets.................................... 100.0% $18,872,511
===== ===========
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
December 31, 1999.
* Non-income producing security.
Summary of Abbreviations
ADR American Depository Receipt
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
75
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 95.2%
Advertising & Related Services - 1.4%
5,500 * Lamar Advertising Co., Cl. A......................... $ 333,094
-----------
Banks - 1.1%
7,500 FleetBoston Financial Corp. ........................... 261,094
-----------
Business Equipment & Services - 0.6%
3,800 Paychex, Inc........................................... 152,000
-----------
Communication Systems & Services - 5.8%
8,000 * Cisco Systems, Inc................................... 857,000
4,900 * McLeod USA, Inc., Cl. A.............................. 288,487
4,000 * Tellabs, Inc. ....................................... 256,750
-----------
1,402,237
-----------
Electrical Equipment & Services - 3.2%
3,500 General Electric Co. .................................. 541,625
2,500 * Solectron Corp....................................... 237,813
-----------
779,438
-----------
Electronic Equipment & Services - 2.6%
9,500 * Teradyne, Inc. ...................................... 627,000
-----------
Finance & Insurance - 6.9%
2,900 American Express Co.................................... 482,125
3,362 American International Group, Inc. .................... 363,516
9,200 Citigroup, Inc......................................... 511,175
2,100 Morgan Stanley, Dean Witter & Co....................... 299,775
-----------
1,656,591
-----------
Food & Beverage Products - 0.9%
6,500 Pepsico, Inc........................................... 229,125
-----------
Healthcare Products & Services - 5.3%
19,800 * Health Management Associates, Inc., Cl. A............ 264,825
8,200 Medtronic, Inc. ....................................... 298,787
16,100 * Osteotech, Inc. ..................................... 215,338
1,500 PE Corp-PE Biosystems Group............................ 180,469
6,200 * VISX, Inc. .......................................... 320,850
-----------
1,280,269
-----------
Information Services & Technology - 34.9%
7,500 * America Online, Inc.................................. 565,781
11,800 * American Power Conversion Corp....................... 311,225
800 * Citrix Systems, Inc.................................. 98,400
6,500 * Cree Research, Inc. ................................. 554,937
5,000 * Cymer, Inc........................................... 230,000
7,500 * EMC Corp............................................. 819,375
6,000 * Entrust Technologies, Inc............................ 359,625
2,100 * F5 Networks, Inc..................................... 239,400
2,300 Gadzoox Networks, Inc. ................................ 100,194
6,800 Intel Corp............................................. 559,725
2,200 * JDS Uniphase Corp.................................... 354,887
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Information Services & Technology - continued
3,600 * Keane, Inc.......................................... $ 114,300
4,600 * Legato Systems, Inc................................. 316,538
5,000 * LSI Logic........................................... 337,500
2,700 * Micron Technology, Inc.............................. 209,925
6,500 * Microsoft Corp...................................... 758,875
6,000 * Remedy Corp......................................... 284,250
4,500 * Sandisk Corp........................................ 433,125
3,000 * Sanmina Corp........................................ 299,625
4,200 * Sun Microsystems, Inc............................... 325,238
3,000 Sykes Enterprises, Inc. .............................. 131,625
3,850 * Veritas Software Corp............................... 551,031
6,000 * Vitesse Semiconductor Corp.......................... 314,625
400 * Yahoo!, Inc. ....................................... 173,075
-----------
8,443,281
-----------
Pharmaceuticals - 10.7%
8,400 American Home Products Corp. ......................... 331,275
8,000 * Enzon, Inc.......................................... 347,000
10,000 ICN Pharmaceuticals, Inc.............................. 253,125
9,000 Monsanto Co. ......................................... 320,625
9,700 * Neopharm, Inc....................................... 209,156
4,700 Pharmacia & Upjohn, Inc............................... 211,500
8,300 Schering-Plough Corp.................................. 350,156
6,900 Warner-Lambert Co..................................... 565,369
-----------
2,588,206
-----------
Printing, Publishing, Broadcasting & Entertainment -
10.6%
5,000 * AMFM, Inc. ......................................... 391,250
6,600 AT&T Corp.--Liberty Media Group, Cl. A................ 374,550
6,500 * Entercom Communications Corp........................ 429,000
13,000 * Infinity Broadcasting Corp.......................... 470,437
9,000 Martha Stewart Living Omnimedia, Inc.................. 216,000
4,200 * Univision Communications, Inc., Cl. A............... 429,188
5,700 * Valassis Communications, Inc........................ 240,825
-----------
2,551,250
-----------
Retailing & Wholesale - 2.9%
6,000 * Bed Bath & Beyond, Inc.............................. 208,500
7,000 Wal-Mart Stores, Inc.................................. 483,875
-----------
692,375
-----------
Telecommunication Services & Equipment - 8.3%
3,700 * Allegiance Telecom, Inc............................. 341,325
5,000 * Antec Corp. ........................................ 182,500
5,100 * CIENA Corp.......................................... 293,250
6,100 * Copper Mountain Networks, Inc....................... 297,375
3,600 Omnipoint Corp........................................ 434,250
2,400 * Qualcomm, Inc....................................... 422,700
700 * Viatel, Inc......................................... 37,537
-----------
2,008,937
-----------
Total Common Stocks
(cost $18,594,213)................................... 23,004,897
-----------
</TABLE>
76
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 4.7%
Repurchase Agreement - 4.7%
$1,145,000 State Street Bank & Trust Co.,
3.25%, purchased 12/31/1999, maturing 1/3/2000,
maturity value $1,145,310
(cost $1,145,000) (a)............................... $ 1,145,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $19,739,213)............................ 99.9% 24,149,897
Other Assets and Liabilities - net............. 0.1 25,691
----- -----------
Net Assets..................................... 100.0% $24,175,588
===== ===========
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
December 31, 1999.
* Non-income producing security.
See Combined Notes to Financial Statements.
77
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 91.0%
Automotive Equipment & Manufacturing - 1.1%
2,000 Arvin Industries, Inc.................................. $ 56,750
-----------
Banks - 9.6%
1,680 ABC Bancorp............................................ 17,850
1,700 Anchor Bancorp Wisconsin, Inc. ........................ 25,713
1,800 Britton & Koontz Capital Corp.......................... 33,750
1,587 Charter One Financial, Inc. ........................... 30,351
2,100 * Columbia Banking Systems, Inc........................ 27,563
1,874 Commercial Bankshares, Inc............................. 40,062
1,600 Granite State Bankshares, Inc.......................... 31,800
2,000 Independent Bank Corp.................................. 25,000
2,000 Independent Bankshares, Inc. .......................... 27,750
1,400 Interchange Financial Services Corp. .................. 22,925
1,200 Mid-State Bancshares................................... 38,250
1,200 Pacific Bank, N.A...................................... 33,225
4,000 Peoples Heritage Financial Group, Inc.................. 60,250
530 Webster Financial Corp................................. 12,488
3,650 West Coast Bancorp, Inc................................ 49,275
-----------
476,252
-----------
Building, Construction & Furnishings - 10.2%
2,500 American Woodmark Corp................................. 60,625
5,500 Craftmade International, Inc........................... 39,875
5,000 * Furniture Brands International, Inc.................. 110,000
6,500 Industrie Natuzzi SpA, ADR............................. 86,125
2,500 Standard Pacific Corp. ................................ 27,500
3,000 * Stanley Furniture Co., Inc........................... 55,125
3,000 TJ International, Inc.................................. 126,000
-----------
505,250
-----------
Business Equipment & Services - 2.9%
4,000 * Interim Services, Inc................................ 99,000
2,500 McGrath Rentcorp....................................... 43,750
-----------
142,750
-----------
Consumer Products & Services - 14.5%
4,000 Advanced Marketing Services, Inc....................... 113,750
6,000 * Chattem, Inc......................................... 114,000
2,100 CPI Corp............................................... 47,381
1,500 * CSG System International, Inc. ...................... 59,813
4,000 * Fossil, Inc. ........................................ 92,500
4,300 * Guess?, Inc.......................................... 93,525
2,500 Lancaster Colony Corp.................................. 82,812
5,000 * Maxwell Shoe, Inc., Cl. A............................ 40,000
1,000 Polaris Industries, Inc. .............................. 36,250
3,000 Stewart Enterprises, Inc., Cl. A....................... 14,250
5,200 York Group, Inc........................................ 22,425
-----------
716,706
-----------
Electrical Equipment & Services - 4.7%
3,000 Applied Power, Inc., Cl. A............................. 110,250
2,700 Helix Technology Corp.................................. 120,994
-----------
231,244
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Electronic Equipment & Services - 1.0%
1,000 * Hadco Corp.......................................... $ 51,000
-----------
Finance & Insurance - 0.7%
2,000 Morgan Keegan, Inc. .................................. 33,625
-----------
Food & Beverage Products - 4.5%
4,000 International Multifoods Corp. ....................... 53,000
3,700 Michael Foods, Inc.................................... 91,113
20,000 * Monterey Pasta Co................................... 78,750
-----------
222,863
-----------
Healthcare Products & Services - 7.9%
1,000 Alpharma, Inc., Cl. A................................. 30,750
6,000 * AmeriSource Health Corp., Cl. A..................... 91,125
1,800 * ArthroCare Corp..................................... 109,800
1,500 Beckman Coulter, Inc.................................. 76,313
1,950 Jones Pharma, Inc..................................... 84,703
-----------
392,691
-----------
Industrial Specialty Products & Services - 4.5%
2,900 Badger Meter, Inc..................................... 87,362
2,200 Donaldson, Inc........................................ 52,938
3,000 * Meade Instruments Corp.............................. 85,500
-----------
225,800
-----------
Information Services & Technology - 5.4%
2,500 * American Management Systems, Inc.................... 78,437
4,000 * Analytical Surveys, Inc. ........................... 45,750
2,500 * SBS Technologies, Inc. ............................. 91,250
4,000 Timberline Software Corp. ............................ 53,750
-----------
269,187
-----------
Manufacturing - Distributing - 1.7%
4,000 LSI Industries, Inc. ................................. 86,500
-----------
Oil/Energy - 1.9%
2,500 Cabot Oil & Gas Corp., Cl. A.......................... 40,156
2,000 Penn Virginia Corp.................................... 33,500
2,000 Pennzoil-Quaker State Co.............................. 20,375
-----------
94,031
-----------
Printing, Publishing, Broadcasting & Entertainment -
0.9%
3,500 Bowne & Co., Inc. .................................... 47,250
-----------
Real Estate - 0.6%
4,000 Mission West Properties, Inc. REIT.................... 31,000
-----------
Retailing & Wholesale - 12.6%
3,000 * Ames Department Stores, Inc. ....................... 86,437
5,000 * Consolidated Stores Corp. .......................... 81,250
4,000 * Papa John's International, Inc...................... 104,250
12,500 Pier 1 Imports, Inc................................... 79,688
6,000 Ross Stores, Inc...................................... 107,625
5,000 * Sonic Automotive, Inc............................... 48,750
2,500 * Whole Foods Market, Inc............................. 115,937
-----------
623,937
-----------
</TABLE>
78
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Telecommunication Services & Equipment - 3.4%
3,900 Communications Systems, Inc............................ $ 50,700
4,000 Hickory Tech Corp...................................... 60,000
1,000 Scientific Atlanta, Inc................................ 55,625
-----------
166,325
-----------
Textile & Apparel - 0.4%
1,000 Oxford Industries, Inc................................. 19,813
-----------
Thrift Institutions - 1.0%
2,000 Harbor Florida Bancshares, Inc......................... 25,875
2,400 Horizon Financial Corp................................. 22,800
-----------
48,675
-----------
Utilities - Electric - 0.6%
1,400 MDU Resources Group, Inc............................... 28,000
-----------
Utilities - Gas - 0.9%
2,400 Chesapeake Utilities Corp.............................. 44,100
-----------
Total Common Stocks
(cost $4,250,609)..................................... 4,513,749
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CONVERTIBLE DEBENTURES - 2.8%
Business Equipment & Services - 0.7%
$ 40,000 Interim Services, Inc.
4.50%, 6/1/2005....................................... $ 35,400
----------
Healthcare Products & Services - 1.0%
40,000 Alpharma, Inc.
5.75%, 4/1/2005, 144A................................. 47,650
----------
Telecommunication Services & Equipment - 1.1%
35,000 Antec Corp.
4.50%, 5/15/2003...................................... 56,306
----------
Total Convertible Debentures (cost $107,538)........... 139,356
----------
SHORT-TERM INVESTMENTS - 11.0%
Repurchase Agreement - 11.0%
543,000 State Street Bank & Trust Co.,
3.25%, purchased 12/31/1999, maturing 1/3/2000,
maturity value $543,147 (cost $543,000) (a)........... 543,000
----------
Total Investments -
(cost $4,901,147)............................... 104.8% 5,196,105
Other Assets and
Liabilities - net............................... (4.8) (237,853)
----- ----------
Net Assets....................................... 100.0% $4,958,252
===== ==========
</TABLE>
* Non-income producing security.
(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued interest at
December 31, 1999.
144A Security that may be resold to "qualified institutional buyers" under Rule
144A of the Securities Act of 1933. This security has been determined to
be liquid under guidelines established by the Board of Trustees.
Summary of Abbreviations
ADR American Depository Receipt
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
79
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 90.8%
Banks - 1.9%
2,373 * Imperial Bancorp..................................... $ 57,249
-----------
Building, Construction & Furnishings - 0.9%
523 * Aaon, Inc............................................ 7,518
748 * Shaw Group, Inc...................................... 18,934
-----------
26,452
-----------
Business Equipment & Services - 1.1%
1,178 * Circle International Group, Inc...................... 26,210
197 * Startek, Inc......................................... 7,141
470 * Vision Twenty One, Inc............................... 1,293
-----------
34,644
-----------
Chemical & Agricultural Products - 1.3%
1,686 * Chemfirst, Inc....................................... 36,881
388 * Hines Horticulture, Inc.............................. 3,274
-----------
40,155
-----------
Communication Systems & Services - 5.5%
238 * Active Voice Corp.................................... 6,917
769 Allen Telecom, Inc..................................... 8,891
427 * ANADIGICS, Inc....................................... 20,149
384 * Gilat Communications Ltd............................. 9,240
1,701 * Metromedia Fiber Network, Inc., Cl. A................ 81,542
385 * Performance Technologies, Inc........................ 6,689
2,489 * VDI Media............................................ 34,224
-----------
167,652
-----------
Consumer Products & Services - 4.8%
871 Commonwealth Industries, Inc........................... 11,323
762 * Guess?, Inc.......................................... 16,573
405 * Mobile Mini, Inc..................................... 8,708
574 * NFO Worldwide, Inc................................... 12,843
552 * SCP Pool Corp........................................ 14,318
1,990 * Sola International, Inc.............................. 27,611
1,504 Toro Co................................................ 56,118
-----------
147,494
-----------
Electrical Equipment & Services - 4.7%
833 American Superconductor Corp........................... 23,324
663 Helix Technology Corp.................................. 29,711
560 * Mattson Technology, Inc.............................. 9,590
248 * Parlex Corp.......................................... 6,526
266 * Power One, Inc....................................... 12,186
584 * Radisys Corp......................................... 29,784
515 * Three-Five Systems, Inc.............................. 21,101
679 * Windmere Durable Holdings, Inc....................... 11,543
-----------
143,765
-----------
Electronic Equipment & Services - 3.9%
585 * Aavid Thermal Technologies, Inc...................... 14,369
416 * American Xtal Technology, Inc........................ 7,254
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Electronic Equipment & Services - continued
504 * Astropower, Inc...................................... $ 7,056
290 * Bel Fuse, Inc........................................ 8,084
323 * C-COR.net Corp....................................... 24,750
308 * Elantec Semiconductor, Inc........................... 10,164
691 * LTX Corp............................................. 15,461
206 * Universal Electronics, Inc........................... 9,476
597 Watkins-Johnson Co..................................... 23,880
-----------
120,494
-----------
Finance & Insurance - 9.2%
470 American Capital Strategies Ltd........................ 10,693
1,206 Dain Rauscher Corp..................................... 56,079
622 * Data Broadcasting Corp............................... 5,132
1,803 * Delta Financial Corp................................. 7,437
1,193 E. W. Blanch Holdings, Inc............................. 73,071
333 * First Sierra Financial, Inc.......................... 5,703
555 * Insurance Auto Auctions, Inc......................... 8,741
318 * National Discount Brokers Group...................... 8,387
859 * New Century Financial Corp........................... 13,529
419 Southwest Securities Group, Inc........................ 11,470
4,113 * UICI................................................. 43,444
1,755 WFS Financial, Inc..................................... 37,074
-----------
280,760
-----------
Food & Beverage Products - 3.5%
1,760 Applebee's International, Inc.......................... 51,920
1,105 * CEC Entertainment, Inc............................... 31,355
1,791 * Scheid Vineyards, Inc. Cl. A......................... 6,492
979 * Triarc Cos, Inc...................................... 17,989
-----------
107,756
-----------
Forest Products - 0.0%
25 Deltic Timber Corp..................................... 547
-----------
Gaming - 0.2%
364 * Argosy Gaming Corp................................... 5,665
-----------
Healthcare Products & Services - 5.8%
1,645 * Apria Healthcare Group, Inc.......................... 29,507
1,240 * Brookdale Living Communities, Inc.................... 15,345
1,110 * Caremark Rx, Inc..................................... 5,619
1,467 * Chirex, Inc.......................................... 21,455
1,410 * Computer Motion, Inc................................. 15,510
411 * Corixa Corp.......................................... 6,987
1,229 * Dura Pharmaceuticals, Inc............................ 17,129
708 * Guilford Pharmaceuticals, Inc........................ 12,036
1,236 Hooper Holmes, Inc..................................... 31,827
533 * I-STAT Corp.......................................... 7,728
546 * Novoste Corp......................................... 9,009
570 * ProxyMed, Inc........................................ 5,558
-----------
177,710
-----------
</TABLE>
80
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Industrial Specialty Products & Services - 3.3%
1,437 * Global Industrial Technologies, Inc.................. $ 18,501
355 * II-VI, Inc........................................... 7,144
3,181 Mark IV Industries, Inc................................ 56,264
983 * McDermott International, Inc......................... 8,909
694 Steel Technologies, Inc................................ 10,063
-----------
100,881
-----------
Information Services & Technology - 9.2%
604 * 4Front Technologies, Inc............................. 8,079
507 * Computer Network Technology.......................... 11,629
977 * Concentric Network Corp.............................. 30,104
145 * Ibis Technology Corp................................. 7,196
2,478 * Maxtor Corp.......................................... 17,965
756 * Metacreations Corp................................... 6,497
148 * MIPS Technologies, Inc............................... 7,696
486 * MMC Networks, Inc.................................... 16,706
368 * MTI Technology Corp.................................. 13,570
247 * Netopia, Inc......................................... 13,415
699 * Peerless Systems Corp................................ 5,417
433 * Pinnacle Systems, Inc................................ 17,618
505 * Real Networks, Inc................................... 60,758
1,588 * S3, Inc.............................................. 18,361
592 * Tecnomatix Technologies Ltd.......................... 17,020
363 * Telescan, Inc........................................ 8,962
602 * Trimble Navigation Ltd............................... 13,018
195 * ZixIt Corp........................................... 7,727
-----------
281,738
-----------
Machinery - Diversified - 1.0%
501 * Applied Science & Tech, Inc.......................... 16,650
622 * Gasonics International Corp.......................... 12,284
25 Thermo Sentron, Inc.................................... 363
-----------
29,297
-----------
Manufacturing - Distributing - 0.8%
63 Lindsay Manufacturing Co............................... 1,150
405 Pentair, Inc........................................... 15,592
164 * Photon Dynamics, Inc................................. 6,355
-----------
23,097
-----------
Metal Products & Services - 2.1%
796 * Material Sciences Corp............................... 8,109
364 * Maverick Tube Corp................................... 8,987
1,498 Quanex Corp............................................ 38,199
710 Summit Technology, Inc................................. 8,298
-----------
63,593
-----------
Oil/Energy - 3.6%
1,022 * Barrett Resources Corp............................... 30,085
1,256 * Newfield Exploration Co.............................. 33,598
425 * St. Mary Land & Exploration Co....................... 10,519
672 * Stone Energy Corp.................................... 23,940
838 Western Gas Resources, Inc............................. 11,051
-----------
109,193
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Oil Field Services - 3.4%
270 * Cal Dive International, Inc......................... $ 8,944
1,173 * Hanover Compressor Co............................... 44,281
792 * Lone Star Technologies, Inc......................... 22,077
981 * Nabors Industries, Inc.............................. 30,349
-----------
105,651
-----------
Paper & Packaging - 0.6%
1,126 Pope & Talbot, Inc.................................... 18,016
-----------
Pharmaceuticals - 2.5%
653 * Advance Paradigm, Inc............................... 14,080
282 * Biocryst Pharmaceuticals, Inc....................... 8,319
391 * SuperGen, Inc....................................... 11,486
713 * Transkaryotic Therapies, Inc........................ 27,451
1,123 * Triangle Pharmaceuticals, Inc....................... 14,388
-----------
75,724
-----------
Printing, Publishing, Broadcasting & Entertainment -
0.7%
637 * Ascent Entertainment Group, Inc..................... 8,082
271 * SBS Broadcasting SA................................. 13,194
-----------
21,276
-----------
Real Estate - 4.0%
1,927 * Choice Hotels, Inc. REIT............................ 33,000
873 Imperial Credit Commercial Mortgage Investment Corp.
REIT................................................. 9,930
3,189 Indymac Mortgage Holdings, Inc. REIT.................. 40,660
1,991 LNR Property Corp. REIT............................... 39,571
-----------
123,161
-----------
Retailing & Wholesale - 6.8%
533 * Childrens Place Retail Stores, Inc.................. 8,761
361 * Coldwater Creek, Inc................................ 7,401
973 * Footstar, Inc....................................... 29,676
354 * Intertan, Inc....................................... 9,248
1,532 * Jack In The Box, Inc................................ 31,693
299 * Kenneth Cole Productions, Inc., Cl. A............... 13,679
793 * Michaels Stores, Inc................................ 22,601
758 Movado Group, Inc..................................... 16,534
1,419 * Pacific Sunwear Of California....................... 45,231
1,204 * Sharper Image Corp.................................. 15,276
753 * Sunglass Hut International, Inc..................... 8,471
-----------
208,571
-----------
Telecommunication Services & Equipment - 5.4%
245 * Anaren Microwave, Inc............................... 13,261
165 Commnet Cellular, Inc................................. 5,301
300 * Intermedia Communications, Inc...................... 11,644
1,202 * NEXTLINK Communications, Inc., Cl. A................ 99,841
1,110 * US LEC Corp., Cl. A................................. 35,797
-----------
165,844
-----------
Thrift Institutions - 0.0%
134 Warren Bancorp, Inc................................... 1,005
-----------
</TABLE>
81
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Transportation - 4.6%
407 * Amtran, Inc........................................... $ 7,886
2,390 * Arkansas Best Corp.................................... 28,680
631 CNF Transportation, Inc. ............................... 21,769
288 * Forward Air Corp...................................... 12,492
1,086 * Genesee & Wyoming, Inc................................ 13,982
798 * M.S. Carriers, Inc.................................... 19,052
982 Roadway Express, Inc. .................................. 21,236
970 * American Freightways Corp. ........................... 15,702
----------
140,799
----------
Total Common Stocks
(cost $2,566,777)...................................... 2,778,189
----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 9.7%
Repurchase Agreement - 9.7%
$ 295,549 Societe Generale Cowen Securities Corp. 2.55%,
purchased 12/31/1999, maturing 1/3/2000, maturity
value $295,612
(cost $295,549) (a).................................. $ 295,549
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $2,862,326).............................. 100.5% 3,073,738
Other Assets and
Liabilities - net.............................. (0.5) (15,055)
----- ----------
Net Assets...................................... 100.0% $3,058,683
===== ==========
</TABLE>
* Non-income producing security.
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at December
31, 1999.
Summary of Abbreviations
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
82
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - 36.0%
Cable/Other Video Distribution - 1.6%
$ 290,000 Adelphia Communications Corp.,
Sr. Notes, Ser. B,
9.875%, 3/1/2007....................................... $ 295,800
-----------
Chemical & Agricultural Products - 2.3%
400,000 Lyondell Chemical Co., Sr. Secd. Notes, Ser. A,
9.625%, 5/1/2007....................................... 411,000
-----------
Gaming - 4.1%
250,000 Agrosy Gaming Co., Sr. Sub. Notes,
10.75%, 6/1/2009....................................... 264,375
250,000 Hollywood Park, Inc., Sr. Sub. Notes, Ser. B,
9.25%, 2/15/2007....................................... 249,062
250,000 Isle of Capri Casinos, Inc., Sr. Sub. Notes,
8.75%, 4/15/2009....................................... 231,250
-----------
744,687
-----------
Healthcare Products & Services - 2.3%
400,000 Lifepoint Hospitals Holdings, Inc.,
Sr. Sub Notes, Ser. B,
10.75%, 5/15/2009...................................... 416,000
-----------
Iron & Steel - 2.3%
400,000 National Steel Corp., 1st. Mtge. Notes, Ser. D,
9.875%, 3/1/2009 (a)................................... 414,000
-----------
Leisure & Tourism - 0.6%
150,000 Outboard Marine Corp., Ser. B,
10.75%, 6/1/2008....................................... 114,750
-----------
Manufacturing - Distributing - 1.3%
250,000 Holley Performance Products, Inc.,
Sr. Notes, Ser. B,
12.25%, 9/15/2007 144A................................. 240,000
-----------
Oil/Energy - 2.2%
250,000 Cheasapeake Energy Corp., Sr. Sub. Notes,
9.625%, 5/1/2005 (a)................................... 236,875
300,000 Petsec Energy, Inc., Sr. Sub. Notes,
Ser. B,
9.50%, 6/15/2007 (d)................................... 151,500
-----------
388,375
-----------
Paper & Packaging - 0.6%
100,000 Riverwood Int'l. Corp., Sr. Notes,
10.25%, 4/1/2006 (a)................................... 101,750
-----------
Printing, Publishing, Broadcasting &
Entertainment - 2.2%
400,000 Echostar DBS Corp., Sr. Notes,
9.375%, 2/1/2009....................................... 404,000
-----------
Retailing & Wholesale - 1.6%
300,000 Ames Dept. Stores, Inc., Sr. Notes,
10.00%, 4/15/2006...................................... 295,500
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Telecommunication Services
& Equipment - 12.7%
$ 400,000 Intermedia Communications, Inc.,
Sr. Disc. Notes, Step Bond, Ser. B,
(Eff. Yield 9.87%) (b)
0.00%, 7/15/2007....................................... $ 298,000
300,000 Level 3 Communications, Inc., Sr. Notes,
9.125%, 5/1/2008....................................... 284,250
300,000 Microcell Telecommunications, Inc.,
Sr. Disc. Notes, Step Bond,
(Eff. Yield 11.56%), (b)
0.00%, 6/1/2009........................................ 194,625
400,000 Nextel Communications, Inc.,
Sr. Disc. Notes, Step Bond,
(Eff. Yield 10.58%), (b)
0.00%, 2/15/2008....................................... 282,000
200,000 RCN Corp.,
Sr. Disc. Notes, Step Bond,
(Eff. Yield 11.81%), (b)
0.00%, 10/15/2007...................................... 141,500
500,000 Verio, Inc., Sr. Notes,
10.625%, 11/15/2009 144A............................... 515,000
300,000 Voicestream Wire Co., Sr. Notes,
10.375%, 11/15/2009 144A............................... 310,500
250,000 Williams Communications Group, Inc.,
Sr. Notes,
10.875%, 10/1/2009..................................... 262,500
-----------
2,288,375
-----------
Transportation - 2.2%
350,000 Greyhound Lines, Inc., Sr. Notes,
11.50%, 4/15/2007...................................... 388,714
-----------
Total Corporate Bonds
(cost $6,589,311)...................................... 6,502,951
-----------
FOREIGN BONDS (NON U.S. DOLLARS) - 13.2%
Banks - 4.6%
3,934,000 Nykredit,
DKK 5.00%, 10/1/2029....................................... 463,472
2,947,000 Realkredit Danmark,
DKK 6.00%, 10/1/2029....................................... 371,241
-----------
834,713
-----------
Finance & Insurance - 1.4%
250,000 PTC International Finance II,
EUR Sr. Sub. Notes, Ser. REG,
11.25%, 12/1/2009...................................... 259,393
-----------
Government - 2.6%
345,122 Federal Republic of Germany,
EUR 6.875%, 5/12/2005...................................... 377,696
625,000 Kingdom of Denmark, Debs.,
DKK 8.00%, 5/15/2003....................................... 91,861
-----------
469,557
-----------
Telecommunication Services & Equipment - 4.6%
500,000 Jazztel Plc, Sr. Notes, Ser. REGS,
EUR 13.25%, 12/15/2009..................................... 507,453
</TABLE>
83
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Schedule of Investments (continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FOREIGN BONDS (NON U.S. DOLLARS) - continued
Telecommunication Services &
Equipment - continued
300,000 Metromedia Fiber Network Co., Sr. Notes,
EUR 10.00%, 12/15/2009..................................... $ 315,426
-----------
822,879
-----------
Total Foreign Bonds (Non U.S. Dollars)
(cost $2,545,975)..................................... 2,386,542
-----------
U.S. TREASURY OBLIGATIONS - 30.6%
$ 630,000 U.S. Treasury Bonds,
5.25%, 2/15/2029....................................... 521,325
U.S. Treasury Notes:
625,000 4.50%, 1/31/2001....................................... 614,844
480,000 4.75%, 11/15/2008...................................... 423,600
850,000 5.50%, 12/31/2000 - 5/31/2003.......................... 839,984
945,000 5.75%, 4/30/2003....................................... 927,872
500,000 6.00%, 8/15/2009....................................... 484,532
1,760,000 6.13%, 8/15/2007....................................... 1,716,000
-----------
Total U.S. Treasury Obligations
(cost $5,797,277)..................................... 5,528,157
-----------
YANKEE OBLIGATIONS - 15.1%
Finance & Insurance - 2.8%
500,000 Ono Finance, Plc, Notes,
13.00%, 5/1/2009....................................... 512,500
-----------
Forest Products - 0.7%
125,000 Tembec Inds., Inc., Sr. Unsecd. Notes,
8.625%, 6/30/2009...................................... 125,313
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Government - 8.5%
Federal Republic of Brazil:
$ 667,266 8.00%, 4/15/2000...................................... $ 494,777
500,000 14.50%, 10/15/2009.................................... 555,000
400,000 United Mexican States,
11.50%, 5/15/2026..................................... 478,480
-----------
1,528,257
-----------
Paper & Packaging - 3.1%
250,000 Grupo Int'l. Durango S.A., Notes, 12.00%, 7/15/2001... 250,624
300,000 Repap New Brunswick, Inc., Sr. Secd. Notes,
11.50%, 6/1/2004..................................... 311,250
-----------
561,874
-----------
Total Yankee Obligations
(cost $2,603,153).................................... 2,727,944
-----------
<CAPTION>
Shares Value
<C> <S> <C>
WARRANTS - 0.0%
Finance & Insurance - 0.0%
500 * Ono Finance, Plc,
expiring 5/31/2009 (cost $0).......................... 5,000
-----------
MUTUAL FUND SHARES - 4.3%
786,500 Navigator Prime Portfolio
(cost $786,500) (c)................................... 786,500
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $18,322,216)............................. 99.2% 17,937,094
Other Assets and Liabilities - net.............. 0.8 138,821
----- -----------
Net Assets...................................... 100.0% $18,075,915
===== ===========
</TABLE>
* Non-income producing.
(a) All or a portion of this security is currently on loan. (See Note 5)
(b) Effective yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
(c) Representing investment of cash collateral received for securities on
loan. (See Note 5)
(d) Security which has defaulted on payment of interest. The Fund has stopped
accruing income on this security.
144A Security that may be resold to "qualified institutional buyers" under Rule
144A of the Securities Act of 1933. This security has been determined to
be liquid under guidelines established by the Board of Trustees.
Summary of Abbreviations
DKK Danish Krone
EUR European Currency
See Combined Notes to Financial Statements.
84
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Global Growth and International
Equity Index Evergreen Foundation Leaders Income Growth
Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............. $15,265,625 $57,145,071 $123,931,369 $15,968,150 $69,628,829 $2,847,484
Repurchase agreements,
at amortized cost...... 1,667,917 1,972,000 4,244,000 0 1,150,000 116,000
- ------------------------------------------------------------------------------------------------------------
Total identified cost of
investments............ 16,933,542 59,117,071 128,175,369 15,968,150 70,778,829 2,963,484
Net unrealized gains on
securities............. 2,035,264 11,086,305 17,323,449 4,771,493 13,261,275 828,551
- ------------------------------------------------------------------------------------------------------------
Market value of
securities............. 18,968,806 70,203,376 145,498,818 20,739,643 84,040,104 3,792,035
Cash.................... 70 88,660 226,520 270,989 232,094 7,058
Receivable for
securities sold........ 0 0 136,236 0 195,174 0
Dividends and interest
receivable............. 15,189 46,986 639,374 20,179 62,488 3,250
Unrealized gains on
forward foreign
currency exchange
contracts.............. 0 0 0 0 0 1,263
Receivable for daily
variation margin on
open futures
contracts.............. 2,550 0 0 0 0 0
Deferred organization
expenses............... 0 4,324 5,038 4,404 5,036 0
Receivable from
investment advisor..... 4,522 0 0 0 0 5,590
Prepaid expenses and
other assets........... 152 12 1,609 261 1,366 28
- ------------------------------------------------------------------------------------------------------------
Total assets........... 18,991,289 70,343,358 146,507,595 21,035,476 84,536,262 3,809,224
- ------------------------------------------------------------------------------------------------------------
Liabilities
Payable for securities
purchased.............. 293,809 502,537 801,648 0 356,849 0
Unrealized losses on
forward foreign
currency exchange
contracts.............. 0 0 0 0 0 7,391
Advisory fee payable.... 0 52,517 99,361 4,808 96,272 0
Due to other related
parties................ 328 2,585 2,609 440 1,539 55
Accrued expenses and
other liabilities...... 11,717 11,669 37,602 8,397 14,613 19,859
- ------------------------------------------------------------------------------------------------------------
Total liabilities...... 305,854 569,308 941,220 13,645 469,273 27,305
- ------------------------------------------------------------------------------------------------------------
Net assets............... $18,685,435 $69,774,050 $145,566,375 $21,021,831 $84,066,989 $3,781,919
- ------------------------------------------------------------------------------------------------------------
Net assets represented by
Paid-in capital......... $16,613,567 $57,655,923 $127,375,594 $16,333,632 $69,129,703 $2,858,932
Undistributed
(overdistributed) net
investment income
(loss)................. 0 (4,294) (6,598) (255) (4,891) 1,976
Accumulated net realized
gains or losses on
securities, futures
contracts and foreign
currency related
transactions........... (975) 1,036,116 873,930 (82,833) 1,680,902 98,631
Net unrealized gains on
securities, futures
contracts and foreign
currency related
transactions........... 2,072,843 11,086,305 17,323,449 4,771,287 13,261,275 822,380
- ------------------------------------------------------------------------------------------------------------
Total net assets......... $18,685,435 $69,774,050 $145,566,375 $21,021,831 $84,066,989 $3,781,919
- ------------------------------------------------------------------------------------------------------------
Shares outstanding....... 1,627,224 4,031,047 9,270,195 1,326,312 4,819,808 297,392
- ------------------------------------------------------------------------------------------------------------
Net asset value per
share................... $ 11.48 $ 17.31 $ 15.70 $ 15.85 $ 17.44 $ 12.72
- ------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
85
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Masters Omega Small Cap Special Equity Strategic
Fund Fund Value Fund Fund Income Fund
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............. $15,020,031 $18,594,213 $4,358,147 $2,566,777 $18,322,216
Repurchase agreements,
at amortized cost...... 1,222,000 1,145,000 543,000 295,549 0
- ---------------------------------------------------------------------------------------------
Total identified cost of
investments............ 16,242,031 19,739,213 4,901,147 2,862,326 18,322,216
Net unrealized gains or
losses on securities... 2,908,721 4,410,684 294,958 211,412 (385,122)
- ---------------------------------------------------------------------------------------------
Market value of
securities............. 19,150,752 24,149,897 5,196,105 3,073,738 17,937,094
Cash.................... 176 201 16,631 8,214 376,135
Receivable for
securities sold........ 24,595 46,961 0 23,408 225,816
Dividends and interest
receivable............. 9,078 4,491 5,557 625 340,186
Deferred organization
expenses............... 0 4,431 0 0 4,431
Receivable from
investment advisor..... 0 0 0 1,743 0
Prepaid expenses and
other assets........... 440 183 38 10 7,535
- ---------------------------------------------------------------------------------------------
Total assets........... 19,185,041 24,206,164 5,218,331 3,107,738 18,891,197
- ---------------------------------------------------------------------------------------------
Liabilities
Payable for securities
purchased.............. 294,935 0 237,975 37,808 0
Payable for closed
forward foreign
currency exchange
contracts.............. 0 0 0 0 9,088
Payable for securities
on loan................ 0 0 0 0 786,500
Advisory fee payable.... 9,133 11,842 1,593 0 6,673
Due to other related
parties................ 516 397 101 54 559
Accrued expenses and
other liabilities...... 7,946 18,337 20,410 11,193 12,462
- ---------------------------------------------------------------------------------------------
Total liabilities...... 312,530 30,576 260,079 49,055 815,282
- ---------------------------------------------------------------------------------------------
Net assets............... $18,872,511 $24,175,588 $4,958,252 $3,058,683 $18,075,915
- ---------------------------------------------------------------------------------------------
Net assets represented by
Paid-in capital......... $15,284,782 $18,314,260 $4,773,376 $2,666,263 $17,828,024
Undistributed
(overdistributed) net
investment income
(loss)................. (179) (253) 0 0 1,062,251
Accumulated net realized
gains or losses on
securities and foreign
currency related
transactions........... 679,187 1,450,897 (110,082) 181,008 (426,995)
Net unrealized gains or
losses on securities
and foreign currency
related transactions... 2,908,721 4,410,684 294,958 211,412 (387,365)
- ---------------------------------------------------------------------------------------------
Total net assets......... $18,872,511 $24,175,588 $4,958,252 $3,058,683 $18,075,915
- ---------------------------------------------------------------------------------------------
Shares outstanding....... 1,500,790 1,209,845 489,175 258,238 1,711,920
- ---------------------------------------------------------------------------------------------
Net asset value per
share................... $ 12.58 $ 19.98 $ 10.14 $ 11.84 $ 10.56
- ---------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
86
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Operations
Year Ended December 31, 1999
<TABLE>
<CAPTION>
Equity Global
Index Fund Evergreen Foundation Leaders Growth and International
(a) Fund Fund Fund Income Fund Growth Fund
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (net of
foreign withholding
taxes of $192, $66,
$2,629, $15,427,
$2,995 and $2,924,
respectively)......... $ 42,602 $ 473,920 $ 1,123,233 $ 194,853 $ 872,940 $ 35,074
Interest............... 20,419 440,473 2,470,343 30,194 152,772 7,850
- -------------------------------------------------------------------------------------------------------
Total investment
income................. 63,021 914,393 3,593,576 225,047 1,025,712 42,924
- -------------------------------------------------------------------------------------------------------
Expenses
Advisory fee........... 15,320 552,938 918,103 135,130 674,579 17,188
Administrative services
fees.................. 861 13,761 27,018 3,369 16,950 542
Transfer agent fee..... 23 154 363 66 257 209
Trustees' fees and
expenses.............. 69 1,160 2,224 284 1,401 45
Printing and postage
expenses.............. 1,314 21,973 42,107 5,369 26,535 859
Custodian fee.......... 1,165 25,120 30,174 9,022 17,044 26,078
Professional fees...... 6,800 18,761 23,352 14,974 19,801 11,346
Organization expenses.. 2,500 4,689 4,333 2,022 4,333 0
Other.................. 3,488 730 10,173 486 3,608 334
- -------------------------------------------------------------------------------------------------------
Total expenses........ 31,540 639,286 1,057,847 170,722 764,508 56,601
Less: Expense
reductions........... (208) (13,297) (10,136) (1,525) (2,754) (666)
Fee waivers and
expense
reimbursements..... (19,842) (43,949) 0 (26,954) (50,584) (33,018)
- -------------------------------------------------------------------------------------------------------
Net expenses.......... 11,490 582,040 1,047,711 142,243 711,170 22,917
- -------------------------------------------------------------------------------------------------------
Net investment income.. 51,531 332,353 2,545,865 82,804 314,542 20,007
- -------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities,
futures contracts and
foreign currency
related transactions
Net realized gains or
losses on:
Securities.......... (13,893) 6,047,723 806,824 (13,981) 5,479,673 264,771
Futures contracts... 62,222 0 0 0 0 0
Foreign currency
related
transactions....... 0 0 0 (855) 906 6,593
- -------------------------------------------------------------------------------------------------------
Net realized gains or
losses on securities,
futures contracts and
foreign currency
related transactions.. 48,329 6,047,723 806,824 (14,836) 5,480,579 271,364
- -------------------------------------------------------------------------------------------------------
Net change in
unrealized gains on
securities, futures
contracts and foreign
currency related
transactions.......... 2,072,843 6,103,722 9,352,295 3,690,865 7,069,772 696,814
- -------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains on
securities, futures
contracts and foreign
currency related
transactions.......... 2,121,172 12,151,445 10,159,119 3,676,029 12,550,351 968,178
- -------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ $2,172,703 $12,483,798 $12,704,984 $3,758,833 $12,864,893 $988,185
- -------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to
December 31, 1999.
See Combined Notes to Financial Statements.
87
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Operations
Year Ended December 31, 1999
<TABLE>
<CAPTION>
Masters Omega Small Cap Special Equity Strategic
Fund (a) Fund Value Fund Fund (b) Income Fund
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income
Dividends (net of
foreign withholding
taxes of $19, $0, $0,
$0 and $0,
respectively)......... $ 64,953 $ 17,825 $ 69,680 $ 1,921 $ 0
Interest............... 57,065 38,147 27,627 2,989 1,220,172
- ----------------------------------------------------------------------------------------
Total investment
income................. 122,018 55,972 97,307 4,910 1,220,172
- ----------------------------------------------------------------------------------------
Expenses
Advisory fee........... 100,395 55,032 34,408 7,217 94,335
Administrative services
fees.................. 2,664 2,143 872 119 3,695
Transfer agent fee..... 82 196 132 12 364
Trustees' fees and
expenses.............. 210 180 72 11 311
Printing and postage
expenses.............. 3,973 3,402 1,369 800 5,042
Custodian fee.......... 2,666 647 1,021 303 7,290
Professional fees...... 11,401 11,926 11,462 8,182 14,924
Organization expenses.. 18,301 2,022 0 2,500 2,022
Other.................. 19,402 13,441 217 484 2,213
- ----------------------------------------------------------------------------------------
Total expenses........ 159,094 88,989 49,553 19,628 130,196
Less: Expense
reductions........... (231) (624) (276) (171) (1,619)
Fee waivers and
expense
reimbursements..... (53,184) 0 (13,058) (14,166) 0
- ----------------------------------------------------------------------------------------
Net expenses.......... 105,679 88,365 36,219 5,291 128,577
- ----------------------------------------------------------------------------------------
Net investment income
(loss)................ 16,339 (32,393) 61,088 (381) 1,091,595
- ----------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions
Net realized gains or
losses on:
Securities............ 908,055 1,643,233 112,099 189,212 (388,141)
Foreign currency
related
transactions......... (85) 0 0 0 (13,980)
- ----------------------------------------------------------------------------------------
Net realized gains or
losses on securities
foreign currency
related transactions
and foreign currency
related transactions.. 907,970 1,643,233 112,099 189,212 (402,121)
- ----------------------------------------------------------------------------------------
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 2,908,721 3,434,126 273,682 211,412 (357,337)
- ----------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions.. 3,816,691 5,077,359 385,781 400,624 (759,458)
- ----------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ $3,833,030 $5,044,966 $446,869 $400,243 $ 332,137
- ----------------------------------------------------------------------------------------
</TABLE>
(a) For the period from January 29, 1999 (commencement of operations) to Decem-
ber 31, 1999.
(b) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
See Combined Notes to Financial Statements.
88
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Changes in Net Assets
Year Ended December 31, 1999
<TABLE>
<CAPTION>
Equity Global
Index Evergreen Foundation Leaders Growth and International
Fund (a) Fund Fund Fund Income Fund Growth Fund
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income... $ 51,531 $ 332,353 $ 2,545,865 $ 82,804 $ 314,542 $ 20,007
Net realized gains or
losses on securities,
futures contracts and
foreign currency
related transactions... 48,329 6,047,723 806,824 (14,836) 5,480,579 271,364
Net change in
unrealized gains on
securities and foreign
currency related
transactions........... 2,072,843 6,103,722 9,352,295 3,690,865 7,069,772 696,814
- ----------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 2,172,703 12,483,798 12,704,984 3,758,833 12,864,893 988,185
- ----------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income... (53,614) (421,000) (2,526,366) (84,708) (313,974) (41,012)
Net realized gains...... (47,221) (5,088,833) (227,108) 0 (4,132,246) (29,759)
- ----------------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (100,835) (5,509,833) (2,753,474) (84,708) (4,446,220) (70,771)
- ----------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 16,604,324 17,827,523 57,697,868 9,841,393 15,606,381 1,656,976
Payment for shares
redeemed............... (12,392) (6,357,630) (3,207,434) (2,161,861) (4,980,475) (287,841)
Net asset value of
shares issued in
reinvestment of
distributions.......... 21,635 5,509,833 2,753,474 84,874 4,446,219 70,772
- ----------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 16,613,567 16,979,726 57,243,908 7,764,406 15,072,125 1,439,907
- ----------------------------------------------------------------------------------------------------------
Total increase in net
assets............... 18,685,435 23,953,691 67,195,418 11,438,531 23,490,798 2,357,321
Net assets
Beginning of period..... 0 45,820,359 78,370,957 9,583,300 60,576,191 1,424,598
- ----------------------------------------------------------------------------------------------------------
End of period........... $18,685,435 $69,774,050 $145,566,375 $21,021,831 $84,066,989 $3,781,919
- ----------------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 0 $ (4,294) $ (6,598) $ (255) $ (4,891) $ 1,976
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
See Combined Notes to Financial Statements.
89
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Changes in Net Assets
Year Ended December 31, 1999
<TABLE>
<CAPTION>
Small Cap Special Strategic
Masters Omega Value Equity Income
Fund (a) Fund Fund Fund (b) Fund
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income
(loss)................ $ 16,339 $ (32,393) $ 61,088 $ (381) $ 1,091,595
Net realized gains or
losses on securities,
futures contracts and
foreign currency
related transactions.. 907,970 1,643,233 112,099 189,212 (402,121)
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 2,908,721 3,434,126 273,682 211,412 (357,337)
- -----------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 3,833,030 5,044,966 446,869 400,243 332,137
- -----------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income.. (17,862) 0 (61,654) 0 0
Net realized gains..... (227,439) 0 (200,093) (7,823) 0
- -----------------------------------------------------------------------------------------
Total distributions to
shareholders......... (245,301) 0 (261,747) (7,823) 0
- -----------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 15,347,628 15,509,072 3,503,809 2,725,653 9,279,823
Payment for shares
redeemed.............. (308,147) (417,288) (1,274,153) (63,713) (2,717,874)
Net asset value of
shares issued in
reinvestment of
distributions......... 245,301 0 261,747 4,323 0
- -----------------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 15,284,782 15,091,784 2,491,403 2,666,263 6,561,949
- -----------------------------------------------------------------------------------------
Total increase in net
assets............... 18,872,511 20,136,750 2,676,525 3,058,683 6,894,086
Net assets
Beginning of period.... 0 4,038,838 2,281,727 0 11,181,829
- -----------------------------------------------------------------------------------------
End of period.......... $18,872,511 $24,175,588 $4,958,252 $3,058,683 $18,075,915
- -----------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income....... $ (179) $ (253) $ 0 $ 0 $ 1,062,251
- -----------------------------------------------------------------------------------------
</TABLE>
(a) For the period from January 29, 1999 (commencement of operations) to Decem-
ber 31, 1999.
(b) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
See Combined Notes to Financial Statements.
90
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Changes in Net Assets
Year Ended December 31, 1998
<TABLE>
<CAPTION>
Global
Evergreen Foundation Leaders Growth and
Fund Fund Fund Income Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income..... $ 166,541 $ 1,381,766 $ 54,640 $ 487,853
Net realized gains or
losses on securities and
foreign currency related
transactions............. 1,153,050 1,192,308 (68,172) 1,366,195
Net change in unrealized
gains or losses on
securities and foreign
currency related
transactions............. 407,756 2,722,636 1,018,021 (455,127)
- --------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations.............. 1,727,347 5,296,710 1,004,489 1,398,921
- --------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income..... 0 (1,361,829) (53,046) (484,359)
Net realized gains........ (1,412,932) (1,143,134) 0 (1,110,182)
- --------------------------------------------------------------------------------
Total distributions to
shareholders............ (1,412,932) (2,504,963) (53,046) (1,594,541)
- --------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares
sold..................... 26,319,301 43,723,203 6,009,276 30,800,519
Payment for shares
redeemed................. (3,826,451) (2,489,319) (329,929) (2,711,167)
Net asset value of shares
issued in reinvestment of
distributions............ 1,412,932 2,504,963 53,046 1,594,541
- --------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions............ 23,905,782 43,738,847 5,732,393 29,683,893
- --------------------------------------------------------------------------------
Total increase in net
assets.................. 24,220,197 46,530,594 6,683,836 29,488,273
Net assets
Beginning of period........ 21,600,162 31,840,363 2,899,464 31,087,918
- --------------------------------------------------------------------------------
End of period.............. $45,820,359 $78,370,957 $9,583,300 $60,576,191
- --------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income......... $ 156,544 $ (5,588) $ 1,761 $ (1,909)
- --------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
91
<PAGE>
EVERGREEN
Variable Annuity Trust
Statements of Changes in Net Assets
Year Ended December 31, 1998
<TABLE>
<CAPTION>
International Small Cap Strategic
Growth Value Income
Fund (a) Omega Fund Fund (b) Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income
(loss)................... $ 4,370 $ (9,215) $ 25,494 $ 413,610
Net realized losses on
securities and foreign
currency related
transactions............. (162,719) (122,678) (19,832) (54,784)
Net change in unrealized
gains or losses on
securities and foreign
currency related
transactions............. 125,566 820,212 21,276 (40,343)
- --------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations........ (32,783) 688,319 26,938 318,483
- --------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income..... 0 0 (26,284) (421,077)
Net realized gains........ 0 0 (2,958) 0
- --------------------------------------------------------------------------------
Total distributions to
shareholders........... 0 0 (29,242) (421,077)
- --------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares
sold..................... 1,481,797 2,148,396 2,317,719 9,723,293
Payment for shares
redeemed................. (24,416) (666,191) (62,930) (1,064,322)
Net asset value of shares
issued in reinvestment of
distributions............ 0 0 29,242 421,077
- --------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions........... 1,457,381 1,482,205 2,284,031 9,080,048
- --------------------------------------------------------------------------------
Total increase in net
assets............... 1,424,598 2,170,524 2,281,727 8,977,454
Net assets
Beginning of period....... 0 1,868,314 0 2,204,375
- --------------------------------------------------------------------------------
End of period............. $1,424,598 $4,038,838 $2,281,727 $11,181,829
- --------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income (loss).. $ 1,276 $ (253) $ 0 $ (255)
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period from August 17, 1998 (commencement of operations) to Decem-
ber 31, 1998.
(b) For the period from May 1, 1998 (commencement of operations) to December
31, 1998.
See Combined Notes to Financial Statements.
92
<PAGE>
Combined Notes to Financial Statements
1. ORGANIZATION
The Evergreen Variable Annuity Trust (the "Trust") consists of Evergreen VA Eq-
uity Index Fund ("Equity Index Fund"), Evergreen VA Fund ("Evergreen Fund"),
Evergreen VA Foundation Fund ("Foundation Fund"), Evergreen VA Global Leaders
Fund ("Global Leaders Fund"), Evergreen VA Growth and Income Fund ("Growth and
Income Fund"), Evergreen VA International Growth Fund ("International Growth
Fund"), Evergreen VA Masters Fund ("Masters Fund"), Evergreen VA Omega Fund
("Omega Fund"), (formerly Evergreen VA Aggressive Growth Fund), Evergreen Small
Cap Value Fund ("Small Cap Value Fund"), (formerly Small Cap Equity Income
Fund), Evergreen Special Equity Fund ("Special Equity Fund") and Evergreen VA
Strategic Income Fund ("Strategic Income Fund"), (collectively, the "Funds").
Each Fund is a diversified series of the Trust, a Delaware business trust orga-
nized on December 23, 1997. The Trust is an open-end management investment com-
pany registered under the Investment Company Act of 1940, as amended ("the 1940
Act"). Shares of each Fund may only be purchased by insurance companies for the
purpose of funding variable annuity contracts or variable life insurance poli-
cies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Funds in the preparation of their financial statements. The poli-
cies are in conformity with generally accepted accounting principles, which re-
quire management to make estimates and assumptions that affect amounts reported
herein. Actual results could differ from these estimates.
A. Valuation of Securities
Securities traded on a national securities exchange or included on the Nasdaq
National Market System ("NMS") and other securities traded in the over-the-
counter market are valued at the last reported sales price on the exchange
where primarily traded. For international securities, the Funds value invest-
ments traded on an established exchange on the basis of the last sales price on
the exchange where primarily traded. Securities traded on an exchange or NMS
for which there has been no sale and other securities traded in the over-the-
counter market are valued at the mean between the last reported bid and asked
price.
U.S. government obligations, corporate bonds, other fixed income securities,
and mortgage and other asset-backed securities are valued at prices provided by
an independent pricing service. In determining a price for normal
institutional-size transactions, the pricing service uses methods based on mar-
ket transactions for comparable securities and analysis of various relation-
ships between similar securities which are generally recognized by institu-
tional traders. Securities for which valuations are not available from an inde-
pendent pricing service may be valued by brokers which use prices provided by
market makers or estimates of market value obtained from yield data relating to
investments or securities with similar characteristics. Otherwise, securities
for which valuations are not available from an independent pricing service (in-
cluding restricted securities) are valued at fair value as determined in good
faith according to procedures established by the Board of Trustees.
Mutual fund shares are valued at the net asset value of each mutual fund.
Short-term investments with remaining maturities of 60 days or less are carried
at amortized cost, which approximates market value.
B. Repurchase Agreements
Each Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held by the custodian on the Fund's behalf. Each
Fund monitors the adequacy of the collateral daily and will require the seller
to provide additional collateral in the event the market value of the securi-
ties pledged falls below the carrying value of the repurchase agreement, in-
cluding accrued interest. Each Fund will only enter into repurchase agreements
with banks and other financial institutions, which are deemed by the investment
advisor to be creditworthy pursuant to guidelines established by the Board of
Trustees.
93
<PAGE>
Combined Notes to Financial Statements (continued)
C. Foreign Currency
The books and records of the Funds are maintained in United States (U.S.) dol-
lars. Foreign currency amounts are translated into U.S. dollars as follows:
market value of investment securities, other assets and liabilities at the
daily rate of exchange; purchases and sales of investment securities and income
and expenses at the rate of exchange prevailing on the respective dates of such
transactions. Net unrealized foreign exchange gains or losses resulting from
changes in foreign currency exchange rates are a component of net unrealized
gains or losses on securities and foreign currency related transactions. Net
realized foreign currency gains or losses on foreign currency related transac-
tions include: foreign currency gains or losses between trade date and settle-
ment date on investment securities transactions, foreign currency related
transactions and the difference between the amounts of interest and dividends
recorded on the books of the Funds and the amounts that are actually received.
The portion of foreign currency gains or losses related to fluctuations in ex-
change rates between the initial purchase trade date and subsequent sale trade
date is included in realized gains or losses on securities.
D. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Funds may buy and sell futures contracts.
The initial margin deposited with a broker when entering into a futures trans-
action is subsequently adjusted by daily payments or receipts ("variation mar-
gin") as the value of the contract changes. Such changes are recorded as
unrealized gains or losses. Realized gains or losses are recognized on closing
the contract.
Risks of entering into futures contracts include (i) the possibility of an il-
liquid market for the contract, (ii) the possibility that a change in the value
of the contract may not correlate with changes in the value of the underlying
instrument or index, and (iii) the credit risk that the other party will not
fulfill their obligations under the contract. Futures contracts also involve
elements of market risk in excess of the amount reflected in the Statements of
Assets and Liabilities.
E. Forward Foreign Currency Exchange Contracts
The Funds may enter into forward foreign currency exchange contracts ("forward
contracts") to settle portfolio purchases and sales of securities denominated
in a foreign currency and to hedge certain foreign currency assets or liabili-
ties. Forward contracts are recorded at the forward rate and marked-to-market
daily. Realized gains and losses arising from such transactions are included in
net realized gains or losses on foreign currency related transactions. The Fund
bears the risk of an unfavorable change in the foreign currency exchange rate
underlying the forward contract and is subject to the credit risk that the
other party will not fulfill their obligations under the contract. Forward con-
tracts involve elements of market risk in excess of the amount reflected in the
Statements of Assets and Liabilities.
F. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums. Dividend income is recorded on the
ex-dividend date, or in the case of some foreign securities, on the date there-
after when the Fund is made aware of the dividend. Foreign income and capital
gains realized on some foreign securities may be subject to foreign taxes,
which are accrued as applicable.
G. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated invest-
ment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable in-
come and net capital gains, if any, to their shareholders. The Funds also in-
tend to avoid excise tax liability by making the required distributions under
the Code. Accordingly, no provision for federal taxes is required. To the ex-
tent
94
<PAGE>
Combined Notes to Financial Statements (continued)
that realized capital gains can be offset by capital loss carryforwards, it is
each Fund's policy not to distribute such gains.
H. Distributions
Distributions from net investment income and net realized capital gains for the
Funds, if any, are declared and paid at least annually. Distributions to share-
holders are recorded at the close of business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles. The significant differences between financial statement
amounts available for distribution and distributions made in accordance with
income tax regulations are primarily due to differing treatment for net operat-
ing losses, certain futures contracts, foreign currency transactions, Real Es-
tate Investment Trusts, Passive Foreign Investment Companies, payments received
in excess of principal on tendered bonds, and certain realized losses on secu-
rities re-purchased.
I. Organization Expenses
For Evergreen Fund, Foundation Fund, Global Leaders Fund, Growth and Income
Fund, Omega Fund and Strategic Income Fund, organization expenses are amortized
to operations over a five-year period on a straight-line basis. In the event
any of the initial shares of the Funds are redeemed by any holder during the
five-year amortization period, redemption proceeds will be reduced by any unam-
ortized organization expenses in the same proportion as the number of initial
shares being redeemed bears to the number of initial shares outstanding at the
time of the redemption.
Expenses relating to the organization of Equity Index Fund, International
Growth Fund, Masters Fund, Small Cap Value Fund and Special Equity Fund have
been reflected, in their entirety, in each Fund's operating results in the
first twelve months after the commencement of operations.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
Evergreen Investment Management ("EIM"), a division of First Union National
Bank ("FUNB"), is the investment advisor for Equity Index Fund and Masters Fund
and is paid an advisory fee that is calculated daily and paid monthly at an an-
nual rate of 0.40% and 0.95%, respectively, of each Fund's average daily net
assets.
Evergreen Asset Management Corp. ("EAMC"), a wholly-owned subsidiary of First
Union Corporation ("First Union"), MFS Institutional Advisors, Inc.,
OppenheimerFunds, Inc. and Putnam Investment Management, Inc. are investment
managers to the Masters Fund. Subject to the supervision of EIM, each manager
manages a segment of the Masters Fund's portfolio in accordance with the Fund's
investment objective and policies. The Masters Fund pays no direct fees to the
investment managers for their services.
EAMC is the investment advisor to the Evergreen Fund, Foundation Fund, Global
Leaders Fund, Growth and Income Fund and Small Cap Value Fund and is paid an
investment advisory fee that is calculated daily and paid monthly. For Ever-
green Fund, Global Leaders Fund, Growth and Income Fund and Small Cap Value
Fund, the investment advisory fee is computed at a annual rate of 0.95% of each
respective Fund's average daily net assets. Foundation Fund pays an investment
advisory fee at an annual rate of 0.825% of its average daily net assets.
Lieber & Company, an affiliate of First Union, is investment sub-advisor to the
Evergreen Fund, Foundation Fund, Global Leaders Fund, Growth and Income Fund,
Masters Fund and Small Cap Value Fund. Lieber & Company provides such services
at no additional cost to the Funds.
Lieber & Company also provides brokerage services for Evergreen Fund, Founda-
tion Fund, Global Leaders Fund, Growth and Income Fund, Masters Fund and Small
Cap Value Fund with respect to substantially all security transactions executed
on the New York or American Stock Exchanges. For transactions executed during
the year ended December 31, 1999, Evergreen Fund, Foundation Fund, Global Lead-
ers Fund, Growth and Income Fund, Masters Fund and Small Cap Value Fund in-
curred brokerage commissions of $105,105, $110,689, $11,010, $132,632, $6,486
and $7,080, respectively, with Lieber & Company.
95
<PAGE>
Combined Notes to Financial Statements (continued)
Evergreen Investment Management Company ("EIMC"), a subsidiary of First Union,
is the investment advisor for International Growth Fund, Omega Fund and Strate-
gic Income Fund. In return for providing investment management and administra-
tive services to the Funds, EIMC is paid an advisory fee that is calculated
daily and paid monthly. For International Growth Fund, the investment advisory
fee is calculated by applying percentage rates, which start at 0.75% and de-
cline as assets increase, to 0.45% of the Fund's average daily net assets. For
Omega Fund, EIMC is entitled to receive an annual fee equal to 0.60% of the av-
erage daily net assets of the Fund. For Strategic Income Fund, the advisory fee
is calculated at an annual rate of 2.00% of the Fund's gross investment income
plus an amount which is determined by applying percentage rates, starting at
0.45% and declining as net assets increase to 0.20% per annum, to the average
daily net assets of the Fund.
Meridian Investment Company ("MIC"), an indirect, wholly-owned subsidiary of
First Union, is the investment advisor to Special Equity Fund. MIC is entitled
to receive from Special Equity Fund an annual fee equal to 1.00% of the average
daily net assets of the Fund.
For the year ended December 31, 1999, the investment advisors voluntarily
waived and/or reimbursed the following amounts:
<TABLE>
<CAPTION>
Waived Reimbursed
------------------
<S> <C> <C>
Equity Index Fund............................ $15,320 $ 4,522
Evergreen Fund............................... 43,949 0
Global Leaders Fund.......................... 26,954 0
Growth and Income Fund....................... 50,584 0
International Growth Fund.................... 17,188 15,830
Masters Fund................................. 53,184 0
Small Cap Value Fund......................... 13,058 0
Special Equity Fund.......................... 7,217 6,949
</TABLE>
Evergreen Investment Services ("EIS"), a subsidiary of First Union, is the ad-
ministrator and The BISYS Group, Inc. ("BISYS") serves as the sub-administrator
to the Funds. As administrator, EIS provides the Funds with facilities, equip-
ment and personnel. As sub-administrator to the Funds, BISYS provides the offi-
cers of the Funds. Officers of the Funds and affiliated Trustees receive no
compensation directly from the Funds.
The administrator and sub-administrator for the Funds are entitled to an annual
fee based on the average daily net assets of the funds administered by EIS for
which First Union or its investment advisory subsidiaries are also the invest-
ment advisors. The administration fee is calculated by applying percentage
rates, which start at 0.05% and decline to 0.01% per annum as net assets in-
crease, to the average daily net assets of each Fund. The sub-administration
fee is calculated by applying percentage rates, which start at 0.01% and de-
cline to 0.004% per annum as net assets increase, to the average daily net as-
sets of each Fund.
During the year ended December 31, 1999, the Funds paid or accrued the follow-
ing amounts to EIS for administration fees and BISYS for sub-administration
fees:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
---------------------------------
<S> <C> <C>
Equity Index Fund............. $ 674 $ 187
Evergreen Fund................ 10,838 2,923
Foundation Fund............... 21,435 5,583
Global Leaders Fund........... 2,656 713
Growth and Income Fund........ 13,379 3,571
International Growth Fund..... 427 115
Masters Fund.................. 2,137 527
Omega Fund.................... 1,687 456
Small Cap Value Fund.......... 690 182
Special Equity Fund........... 93 26
Strategic Income Fund......... 2,914 781
</TABLE>
Evergreen Service Company ("ESC"), an indirect, wholly-owned subsidiary of
First Union, is the transfer and dividend disbursing agent for the Funds.
96
<PAGE>
Combined Notes to Financial Statements (continued)
4. CAPITAL SHARE TRANSACTIONS
The Funds have an unlimited number of shares of beneficial interest with a
$0.001 par value authorized. Transactions in shares of the Funds were as fol-
lows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1999 1998
- --------------------------------------------------------------------------------
Equity Index Fund (a)
<S> <C> <C>
Shares sold........................................... 1,626,422 0
Shares redeemed....................................... (1,117) 0
Shares issued in reinvestment of distributions........ 1,919 0
- --------------------------------------------------------------------------------
Net increase.......................................... 1,627,224 0
- --------------------------------------------------------------------------------
Evergreen Fund
Shares sold........................................... 1,086,105 1,696,668
Shares redeemed....................................... (380,136) (250,312)
Shares issued in reinvestment of distributions........ 331,321 96,422
- --------------------------------------------------------------------------------
Net increase.......................................... 1,037,290 1,542,778
- --------------------------------------------------------------------------------
Foundation Fund
Shares sold........................................... 3,888,229 3,066,890
Shares redeemed....................................... (210,326) (178,716)
Shares issued in reinvestment of distributions........ 177,859 175,029
- --------------------------------------------------------------------------------
Net increase.......................................... 3,855,762 3,063,203
- --------------------------------------------------------------------------------
Global Leaders Fund
Shares sold........................................... 713,152 507,154
Shares redeemed....................................... (143,281) (29,069)
Shares issued in reinvestment of distributions........ 5,490 4,197
- --------------------------------------------------------------------------------
Net increase.......................................... 575,361 482,282
- --------------------------------------------------------------------------------
Growth and Income Fund
Shares sold........................................... 959,190 1,929,361
Shares redeemed....................................... (300,975) (177,543)
Shares issued in reinvestment of distributions........ 272,834 104,254
- --------------------------------------------------------------------------------
Net increase.......................................... 931,049 1,856,072
- --------------------------------------------------------------------------------
International Growth Fund (b)
Shares sold........................................... 166,805 154,555
Shares redeemed....................................... (27,055) (2,887)
Shares issued in reinvestment of distributions........ 5,974 0
- --------------------------------------------------------------------------------
Net increase.......................................... 145,724 151,668
- --------------------------------------------------------------------------------
Masters Fund (c)
Shares sold........................................... 1,508,534 0
Shares redeemed....................................... (29,082) 0
Shares issued in reinvestment of distributions........ 21,338 0
- --------------------------------------------------------------------------------
Net increase.......................................... 1,500,790 0
- --------------------------------------------------------------------------------
Omega Fund
Shares sold........................................... 939,320 184,977
Shares redeemed....................................... (27,094) (55,735)
- --------------------------------------------------------------------------------
Net increase.......................................... 912,226 129,242
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
(b) For the period from August 17, 1998 (commencement of operations) to Decem-
ber 31, 1998.
(c) For the period from January 29, 1999 (commencement of operations) to Decem-
ber 31, 1999.
97
<PAGE>
Combined Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1999 1998
- --------------------------------------------------------------------------------
Small Cap Value Fund (b)
<S> <C> <C>
Shares sold........................................... 352,514 241,643
Shares redeemed....................................... (127,570) (6,669)
Shares issued in reinvestment of distributions........ 26,058 3,199
- --------------------------------------------------------------------------------
Net increase.......................................... 251,002 238,173
- --------------------------------------------------------------------------------
Special Equity Fund (a)
Shares sold........................................... 263,419 0
Shares redeemed....................................... (5,564) 0
Shares issued in reinvestment of distributions........ 383 0
- --------------------------------------------------------------------------------
Net increase.......................................... 258,238 0
- --------------------------------------------------------------------------------
Strategic Income Fund
Shares sold........................................... 895,646 919,993
Shares redeemed....................................... (260,018) (100,550)
Shares issued in reinvestment of distributions........ 0 40,670
- --------------------------------------------------------------------------------
Net increase.......................................... 635,628 860,113
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
(b) For the period from May 1, 1998 (commencement of operations) to December
31, 1998.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the year ended December 31, 1999:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
----------------------- -----------------------
U.S. Non-U.S. U.S. Non-U.S.
Government Government Government Government
-----------------------------------------------
<S> <C> <C> <C> <C>
Equity Index
Fund........... $ 0 $15,980,841 $ 0 $ 768,207
Evergreen Fund.. 0 70,175,848 0 56,111,114
Foundation
Fund........... 37,997,699 95,892,971 21,964,375 51,869,447
Global Leaders
Fund........... 0 10,244,934 0 2,395,204
Growth and
Income Fund.... 0 63,121,199 0 45,083,532
International
Growth Fund.... 0 4,552,622 0 3,130,626
Masters Fund.... 0 23,187,797 0 9,105,138
Omega Fund...... 0 24,876,041 0 10,786,862
Small Cap Value
Fund........... 0 4,224,319 0 2,191,706
Special Equity
Fund........... 0 4,316,620 0 1,939,055
Strategic Income
Fund........... 12,461,459 23,857,589 11,738,703 17,201,959
</TABLE>
On December 31, 1999, the composition of unrealized gains and losses on securi-
ties based on the aggregate cost of securities for federal income tax purposes
was as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Tax Unrealized Unrealized Appreciation
Cost Appreciation Depreciation (Depreciation)
-----------------------------------------------------
<S> <C> <C> <C> <C>
Equity Index
Fund........... $ 16,955,606 $ 2,461,338 $ 448,138 $ 2,013,200
Evergreen Fund.. 59,269,044 12,570,018 1,635,686 10,934,332
Foundation
Fund........... 128,182,081 20,523,310 3,206,573 17,316,737
Global Leaders
Fund........... 15,968,150 5,600,880 829,387 4,771,493
Growth and
Income Fund.... 70,775,127 18,722,251 5,457,274 13,264,977
International
Growth Fund.... 3,005,359 868,801 82,125 786,676
Masters Fund.... 16,271,624 3,570,716 691,588 2,879,128
Omega Fund...... 19,791,942 5,174,801 816,846 4,357,955
Small Cap Value
Fund........... 4,901,063 698,582 403,540 295,042
Special Equity
Fund........... 2,871,266 272,918 70,446 202,472
Strategic Income
Fund........... 18,322,216 257,549 642,671 (385,122)
</TABLE>
98
<PAGE>
Combined Notes to Financial Statements (continued)
On December 31, 1999, the following Funds had capital loss carryovers for fed-
eral income tax purposes as follows:
<TABLE>
<CAPTION>
Capital Loss
Carryforward Expiration
-----------------------
<S> <C> <C>
Global Leaders Fund..................... $ 47,378 2006
35,455 2007
Strategic Income Fund................... 48,609 2006
318,630 2007
</TABLE>
The Strategic Income Fund loaned securities for the year ended December 31,
1999 to certain brokers who paid the Fund a negotiated lenders' fee. These fees
are included in interest income. At December 31, 1999, the value of securities
on loan and the value of collateral (including accrued interest) amounted to
$769,492 and $786,500, respectively. During the year ended December 31, 1999,
the Strategic Income Fund earned $1,082 in income from securities lending.
Capital losses incurred after October 31 within a Fund's fiscal year are deemed
to arise on the first business day of the Fund's following fiscal year. For the
fiscal year ended December 31, 1999, International Growth Fund, Small Cap Value
Fund and Strategic Income Fund incurred and elected to defer $381, $110,166 and
$59,756, respectively.
6. EXPENSE REDUCTIONS
The Funds have entered into expense offset arrangements with ESC and their cus-
todian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under these expense offset arrangements could have
been invested in income-producing assets. The Funds have also entered into
brokerage/service arrangements with specific brokers who paid a portion of the
Funds' expenses. The amount of fee credits received by each Fund and the impact
on each Fund's expense ratio represented as a percentage of its average daily
net assets were as follows:
<TABLE>
<CAPTION>
Brokerage Total Total
Credits Fee Credits Expense % of Average
Received Received Reductions Daily Net Assets
-------------------------------------------------
<S> <C> <C> <C> <C>
Equity Index
Fund........... $ 0 $ 208 0 0.00%
Evergreen Fund.. 9,772 3,525 13,297 0.02
Foundation
Fund........... 2,543 7,593 10,136 0.01
Global Leaders
Fund........... 0 1,525 0 0.01
Growth and
Income Fund.... 0 2,754 0 0.01
International
Growth Fund.... 0 666 0 0.03
Masters Fund.... 0 231 0 0.00
Omega Fund...... 0 624 0 0.01
Small Cap Value
Fund........... 0 276 0 0.01
Special Equity
Fund........... 0 171 0 0.03
Strategic Income
Fund........... 0 1,619 0 0.01
</TABLE>
7. DEFERRED TRUSTEES' FEES
Each Independent Trustee of the Funds may defer any or all compensation related
to performance of their duties as Trustee. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Funds. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. At the election of the Trustees, the deferral account will be paid
either in one lump sum or in quarterly installments for up to ten years.
8. FINANCING AGREEMENTS
Certain Evergreen Funds and State Street Bank and Trust Company ("State
Street") and a group of banks (collectively, the "Banks") entered into a fi-
nancing agreement dated December 22, 1997, as amended on November 20, 1998. Un-
der this agreement, the Banks provided an unsecured credit facility in the ag-
gregate amount of $400 million ($275 million committed and $125 million uncom-
mitted). The credit facility was allo-
99
<PAGE>
Combined Notes to Financial Statements (continued)
cated, under the terms of the financing agreement, among the Banks. The credit
facility was accessed by the Funds for temporary or emergency purposes only and
was subject to each Fund's borrowing restrictions. Borrowings under this facil-
ity bore interest at 0.50% per annum above the Federal Funds rate. A commitment
fee of 0.065% per annum was incurred on the unused portion of the committed fa-
cility, which was allocated to all funds. For its assistance in arranging this
financing agreement, the Capital Market Group of First Union was paid a one-
time arrangement fee of $27,500. State Street served as administrative agent
for the Banks, and as administrative agent was entitled to a fee of $20,000 per
annum which was allocated to all of the Funds.
This agreement was amended and renewed on December 22, 1998. The amended fi-
nancing agreement became effective on December 22, 1998 among all of the Ever-
green Funds, State Street and The Bank of New York ("BONY"). Under this agree-
ment, State Street and BONY provided an unsecured credit facility in the aggre-
gate amount of $150 million ($125 million committed and $25 million uncommit-
ted). This agreement was terminated on July 27, 1999.
On July 27, 1999, all of the Evergreen Funds and a group of banks (the "Lend-
ers") entered into a credit agreement. Each series of the Trust, except for Eq-
uity Index Fund and Special Equity Fund, is a party to this agreement. Under
this agreement, the Lenders provide an unsecured revolving credit commitment in
the aggregate amount of $1.050 billion. The credit facility is allocated, under
the terms of the financing agreement, among the Lenders. The credit facility is
accessed by the Funds for temporary emergency purposes to fund the redemption
of their shares or a general working capital as permitted by each Fund's bor-
rowing restrictions. Borrowings under this facility bear interest at 0.75% per
annum above the Federal Funds rate (1.50% per annum above the Federal Funds
rate during the period from and including December 1, 1999 through and includ-
ing January 31, 2000). A commitment fee of 0.10% per annum is incurred on the
average daily unused portion of the revolving credit commitment. The commitment
fee is allocated to all funds. For its assistance in arranging this financing
agreement, First Union Capital Markets Corp. was paid a one-time arrangement
fee of $250,000. State Street serves as paying agent for the funds and as pay-
ing agent is entitled to a fee of $20,000 per annum which is allocated to all
the funds.
During the year ended December 31, 1999, the Funds had no borrowings pursuant
to this line of credit.
100
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders
Evergreen Variable Annuity Trust
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments of the Evergreen VA Equity Index Fund,
Evergreen VA Fund, Evergreen VA Foundation Fund, Evergreen VA Global Leaders
Fund, Evergreen VA Growth and Income Fund, Evergreen VA International Growth
Fund, Evergreen VA Masters Fund, Evergreen VA Omega Fund, Evergreen VA Small
Cap Value Fund, Evergreen VA Special Equity Fund and Evergreen VA Strategic
Income Fund, portfolios of Evergreen Variable Annuity Trust, as of December 31,
1999, and the related statements of operations for the year or period then
ended, the statements of changes in net assets for each of the years or periods
in the two-year period then ended and financial highlights for each of the
years or periods in the four-year period ended December 31, 1999. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights 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 as of De-
cember 31, 1999 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Ever-
green Variable Annuity Trust as of December 31, 1999, the results of their op-
erations, changes in their net assets and financial highlights for the periods
described above, in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
February 4, 2000
101
<PAGE>
Additional Information (Unaudited)
FEDERAL TAX STATUS OF DISTRIBUTIONS
Pursuant to section 852 of the Internal Revenue Code, Equity Index
Fund, Evergreen Fund, Growth and Income Fund and International Growth
Fund had designated the following amounts as long-term 20% capital
gain distributions for the fiscal year ended December 31, 1999:
<TABLE>
<CAPTION>
Aggregate Per Share Date Paid
--------------------------------
<S> <C> <C> <C>
Equity Index Fund............. $ 29,513 $0.020 11/26/1999
Evergreen Fund................ $4,649,620 $1.215 11/26/1999
Foundation Fund............... $ 59,706 $0.009 3/24/1999 &
11/26/1999
Growth and Income Fund........ $2,170,831 $0.467 11/26/1999
International Growth Fund..... $ 4,524 $0.016 11/26/1999
</TABLE>
For corporate shareholders, the following percentages of ordinary in-
come dividends paid during the fiscal year ended December 31, 1999
qualified for the dividends and received deductions.
<TABLE>
<S> <C>
Equity Index Fund......................................... 25.63%
Evergreen Fund............................................ 52.62%
Foundation Fund........................................... 35.50%
Global Leaders Fund....................................... 52.91%
Growth and Income Fund.................................... 26.76%
Masters Fund.............................................. 5.73%
Small Cap Value Fund...................................... 24.30%
</TABLE>
102
<PAGE>
Variable Annuities
NOT May lose value
FDIC
INSURED No bank guarantee
Evergreen Investment Services, Inc.
68454 547189 2/2000
