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ENDEAVOR VARIABLE ANNUITY
The AUSA Endeavor
Variable Annuity Account
Semi-Annual Report
June 30, 1997
[LOGO OF AUSA LIFE APPEARS HERE]
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THIS PAGE LEFT BLANK INTENTIONALLY
2
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Dear Valued Policyholder:
We are pleased to present the Semi-Annual Report of the AUSA Endeavor Variable
Annuity Account for the period ended June 30, 1997. This report contains
information on the following subaccounts:
TCW Money Market
TCW Managed Asset Allocation
T. Rowe Price International Stock
Value Equity
Dreyfus Small Cap Value
Dreyfus U.S. Government Securities
T. Rowe Price Equity Income
T. Rowe Price Growth Stock
Opportunity Value
Enhanced Index
Growth
We are pleased that you have chosen the Endeavor Variable Annuity to be part of
your financial future. We look forward to serving you in the future.
Sincerely,
LOGO
William L. Busler
Vice President
AUSA Life Insurance Company, Inc.
This report may be distributed only to current policyholders or to persons who
have received current prospectuses of the variable annuity and the underlying
funds.
3
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THE AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT
BALANCE SHEET
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
TCW T. ROWE
TCW MANAGED PRICE
MONEY ASSET INT'L.
MARKET ALLOCATION STOCK
TOTAL SUBACCT. SUBACCT. SUBACCT.
----------- --------- ---------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash................................ $ -- -- -- --
Investments in mutual funds, at
current market value (Note 2):
Endeavor Series Trust--TCW Money
Market Portfolio.................. 1,018,219 1,018,219 -- --
Endeavor Series Trust--TCW Managed
Asset Allocation Portfolio........ 3,155,282 -- 3,155,282 --
Endeavor Series Trust--T. Rowe
Price International
Stock Portfolio................... 4,982,318 -- -- 4,982,318
Endeavor Series Trust--Value Equity
Portfolio......................... 4,322,712 -- -- --
Endeavor Series Trust--Dreyfus
Small Cap Value Portfolio......... 2,808,593 -- -- --
Endeavor Series Trust--Dreyfus U.S.
Gov't. Securities Portfolio....... 924,429 -- -- --
Endeavor Series Trust--T. Rowe
Price Equity Income Portfolio..... 3,836,663 -- -- --
Endeavor Series Trust--T. Rowe
Price Growth Stock Portfolio...... 2,672,454 -- -- --
Endeavor Series Trust--Opportunity
Value Portfolio................... 540,511 -- -- --
Endeavor Series Trust--Enhanced
Index Portfolio................... 13,683 -- -- --
WRL Investment Management, Inc.--
Growth Portfolio.................. 8,342,225 -- -- --
----------- --------- --------- ---------
Total investments in mutual funds.. 32,617,089 1,018,219 3,155,282 4,982,318
----------- --------- --------- ---------
Total Assets....................... $32,617,089 1,018,219 3,155,282 4,982,318
=========== ========= ========= =========
LIABILITIES AND CONTRACT OWNERS'
EQUITY
Liabilities:
Contract terminations payable...... $ 2,289 102 263 422
----------- --------- --------- ---------
Total Liabilities.................. 2,289 102 263 422
Contract Owners' Equity:
Deferred annuity contracts
terminable by owners (Note 3)..... 32,614,800 1,018,117 3,155,019 4,981,896
----------- --------- --------- ---------
$32,617,089 1,018,219 3,155,282 4,982,318
=========== ========= ========= =========
</TABLE>
See accompanying Notes to Financial Statements.
4
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<TABLE>
<CAPTION>
DREYFUS DREYFUS T. ROWE T. ROWE
SMALL U.S. PRICE PRICE
VALUE CAP GOV'T. EQUITY GROWTH OPPORTUNITY ENHANCED
EQUITY VALUE SECURITIES INCOME STOCK VALUE INDEX GROWTH
SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT.
--------- --------- ---------- --------- --------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
4,322,712 -- -- -- -- -- -- --
-- 2,808,593 -- -- -- -- -- --
-- -- 924,429 -- -- -- -- --
-- -- -- 3,836,663 -- -- -- --
-- -- -- -- 2,672,454 -- -- --
-- -- -- -- -- 540,511 -- --
-- -- -- -- -- -- 13,683 --
-- -- -- -- -- -- -- 8,342,225
--------- --------- ------- --------- --------- ------- ------ ---------
4,322,712 2,808,593 924,429 3,836,663 2,672,454 540,511 13,683 8,342,225
--------- --------- ------- --------- --------- ------- ------ ---------
4,322,712 2,808,593 924,429 3,836,663 2,672,454 540,511 13,683 8,342,225
========= ========= ======= ========= ========= ======= ====== =========
443 151 19 175 149 10 -- 555
--------- --------- ------- --------- --------- ------- ------ ---------
443 151 19 175 149 10 -- 555
4,322,269 2,808,442 924,410 3,836,488 2,672,305 540,501 13,683 8,341,670
--------- --------- ------- --------- --------- ------- ------ ---------
4,322,712 2,808,593 924,429 3,836,663 2,672,454 540,511 13,683 8,342,225
========= ========= ======= ========= ========= ======= ====== =========
</TABLE>
5
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THE AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1997, Except as Noted (Unaudited)
<TABLE>
<CAPTION>
TCW T. ROWE
TCW MANAGED PRICE
MONEY ASSET INT'L.
MARKET ALLOCATION STOCK
TOTAL SUBACCT. SUBACCT. SUBACCT.
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends............................. $ 724,041 23,156 38,434 29,661
Expenses (Note 5):
Administrative fee.................... 6,582 251 574 914
Mortality and expense risk charge..... 176,004 6,535 17,835 25,009
---------- ------- ------- -------
Net Investment income (loss)........ 541,455 16,370 20,025 3,738
---------- ------- ------- -------
NET REALIZED AND UNREALIZED CAPITAL
GAIN (LOSS) FROM INVESTMENTS
Net realized capital gain from sales of
investments:
Proceeds from sales................... 895,838 184,978 87,140 105,303
Cost of investments sold.............. 717,441 184,978 62,347 87,893
---------- ------- ------- -------
Net realized capital gain from sales of
investments........................... 178,397 -- 24,793 17,410
---------- ------- ------- -------
Net change in unrealized
appreciation/depreciation of
investments:
Beginning of the period............... 1,762,593 -- 299,221 236,578
End of the period..................... 4,137,768 -- 528,707 660,007
---------- ------- ------- -------
Net change in unrealized
appreciation/depreciation of
investments........................ 2,375,175 -- 229,486 423,429
---------- ------- ------- -------
Net realized and unrealized capital
gain (loss) from investments....... 2,553,572 -- 254,279 440,839
---------- ------- ------- -------
INCREASE FROM OPERATIONS............... $3,095,027 16,370 274,304 444,577
========== ======= ======= =======
</TABLE>
/1/Period from May 1, 1997 (commencement of operations) to June 30, 1997
See accompanying Notes to Financial Statements.
6
<PAGE>
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<TABLE>
<CAPTION>
DREYFUS DREYFUS T. ROWE T. ROWE
SMALL U.S. PRICE PRICE
VALUE CAP GOV'T. EQUITY GROWTH OPPORTUNITY ENHANCED
EQUITY VALUE SECURITIES INCOME STOCK VALUE INDEX GROWTH
SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT./1/ SUBACCT.
-------- -------- ---------- -------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
142,471 286,584 27,387 91,556 18,895 43 -- 65,854
795 769 201 503 451 23 -- 2,101
23,308 15,385 5,279 19,885 14,055 2,983 14 45,716
------- ------- ------ ------- ------- ------ --- -------
118,368 270,430 21,907 71,168 4,389 (2,963) (14) 18,037
------- ------- ------ ------- ------- ------ --- -------
165,704 33,630 44,656 40,726 63,782 1,353 1 168,565
109,071 24,092 43,455 30,622 47,268 1,297 1 126,417
------- ------- ------ ------- ------- ------ --- -------
56,633 9,538 1,201 10,104 16,514 56 -- 42,148
------- ------- ------ ------- ------- ------ --- -------
348,773 278,785 7,435 227,251 174,087 (106) -- 190,569
617,765 385,768 2,743 531,552 484,779 39,731 545 886,171
------- ------- ------ ------- ------- ------ --- -------
268,992 106,983 (4,692) 304,301 310,692 39,837 545 695,602
------- ------- ------ ------- ------- ------ --- -------
325,625 116,521 (3,491) 314,405 327,206 39,893 545 737,750
------- ------- ------ ------- ------- ------ --- -------
443,993 386,951 18,416 385,573 331,595 36,930 531 755,787
======= ======= ====== ======= ======= ====== === =======
</TABLE>
7
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THE AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
Six Months Ended June 30, 1997 and 1996, Except as Noted (Unaudited)
<TABLE>
<CAPTION>
TCW T. ROWE
TCW MANAGED PRICE
MONEY ASSET INT'L. VALUE
MARKET ALLOCATION STOCK EQUITY
TOTAL SUBACCT. SUBACCT. SUBACCT. SUBACCT.
----------------------- ------------------- -------------------- -------------------- --------------------
1997 1996 1997 1996 1997 1996 1997 1996 1997 1996
----------- ---------- --------- -------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment
income (loss).. $ 541,455 325,302 16,370 19,314 20,025 4,423 3,738 (13,203) 118,368 14,765
Net realized
capital gain
(loss)......... 178,397 89,254 -- -- 24,793 16,311 17,410 5,005 56,633 20,748
Net change in
unrealized
appreciation/
depreciation of
investments.... 2,375,175 1,408,104 -- -- 229,486 189,711 423,429 214,284 268,992 288,669
----------- ---------- --------- -------- --------- --------- --------- --------- --------- ---------
Increase
(decrease) from
operations..... 3,095,027 1,822,660 16,370 19,314 274,304 210,445 444,577 206,086 443,993 324,182
----------- ---------- --------- -------- --------- --------- --------- --------- --------- ---------
CONTRACT
TRANSACTIONS
Net contract
purchase
payments....... 4,818,880 8,945,238 311,906 849,831 312,485 451,716 739,784 996,418 594,504 1,032,776
Transfers
payments from
(to) other
subaccounts or
general
account........ 5,083,830 3,698,118 (77,916) (403,786) 525,373 506,790 1,047,119 843,943 652,421 598,804
Contract
terminations,
withdrawals,
and other
deductions..... (209,154) (390,272) -- -- (16,614) (68,621) (23,746) (69,872) (22,111) (61,807)
----------- ---------- --------- -------- --------- --------- --------- --------- --------- ---------
Increase from
contract
transactions... 9,693,556 12,253,084 233,990 446,045 821,244 889,885 1,763,157 1,770,489 1,224,814 1,569,773
----------- ---------- --------- -------- --------- --------- --------- --------- --------- ---------
Net increase in
contract
owners'
equity......... 12,788,583 14,075,744 250,360 465,359 1,095,548 1,100,330 2,207,734 1,976,575 1,668,807 1,893,955
----------- ---------- --------- -------- --------- --------- --------- --------- --------- ---------
CONTRACT OWNERS'
EQUITY
Beginning of
period......... 19,826,217 5,750,473 767,757 302,398 2,059,471 959,141 2,774,162 797,587 2,653,462 759,507
----------- ---------- --------- -------- --------- --------- --------- --------- --------- ---------
End of period... $32,614,800 19,826,217 1,018,117 767,757 3,155,019 2,059,471 4,981,896 2,774,162 4,322,269 2,653,462
=========== ========== ========= ======== ========= ========= ========= ========= ========= =========
</TABLE>
/1/Period from December 13, 1996 (commencement of operations) to December 31,
1996
/2/Period from May 1, 1997 (commencement of operations) to June 30, 1997
See accompanying Notes to Financial Statements.
8
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<TABLE>
<CAPTION>
T. ROWE T. ROWE
DREYFUS DREYFUS U.S. PRICE PRICE
SMALL CAP GOV'T. EQUITY GROWTH OPPORTUNITY ENHANCED
VALUE SECURITIES INCOME STOCK VALUE INDEX
SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT.
- -------------------- ---------------- -------------------- -------------------- ---------------- --------
1997 1996 1997 1996 1997 1996 1997 1996 1997 1996/1/ 1997/2/
- --------- --------- ------- ------- --------- --------- --------- --------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
270,430 30,082 21,907 9,258 71,168 (6,843) 4,389 1,959 (2,963) (8) (14)
9,538 19,083 1,201 (2,573) 10,104 11,322 16,514 4,575 56 -- --
106,983 233,035 (4,692) 1,717 304,301 205,913 310,692 158,184 39,837 (106) 545
- --------- --------- ------- ------- --------- --------- --------- --------- ------- ------- ------
386,951 282,200 18,416 8,402 385,573 210,392 331,595 164,718 36,930 (114) 531
- --------- --------- ------- ------- --------- --------- --------- --------- ------- ------- ------
277,216 581,260 62,922 336,517 719,186 1,120,024 419,450 890,676 279,516 179,807 6,584
306,301 367,127 185,548 111,586 651,620 458,878 377,012 250,896 44,362 -- 6,568
(16,314) (22,302) (8,201) (21,050) (31,385) (55,759) (10,407) (8,247) -- -- --
- --------- --------- ------- ------- --------- --------- --------- --------- ------- ------- ------
567,203 926,085 240,269 427,053 1,339,421 1,523,143 786,055 1,133,325 323,878 179,807 13,152
- --------- --------- ------- ------- --------- --------- --------- --------- ------- ------- ------
954,154 1,208,285 258,685 435,455 1,724,994 1,733,535 1,117,650 1,298,043 360,808 179,693 13,683
- --------- --------- ------- ------- --------- --------- --------- --------- ------- ------- ------
1,854,288 646,003 665,725 230,270 2,111,494 377,959 1,554,655 256,612 179,693 -- --
- --------- --------- ------- ------- --------- --------- --------- --------- ------- ------- ------
2,808,442 1,854,288 924,410 665,725 3,836,488 2,111,494 2,672,305 1,554,655 540,501 179,693 13,683
========= ========= ======= ======= ========= ========= ========= ========= ======= ======= ======
<CAPTION>
DREYFUS
SMALL CAP
VALUE GROWTH
SUBACCT. SUBACCT.
- --------------------- ---------------------
1997 1997 1996
- ---------- ---------- ----------
<S> <C> <C>
270,430 18,037 265,555
9,538 42,148 14,783
106,983 695,602 116,697
- ---------- ---------- ----------
386,951 755,787 397,035
- ---------- ---------- ----------
277,216 1,095,327 2,506,213
306,301 1,365,422 963,880
(16,314) (80,376) (82,614)
- ---------- ---------- ----------
567,203 2,380,373 3,387,479
- ---------- ---------- ----------
954,154 3,136,160 3,784,514
- ---------- ---------- ----------
1,854,288 5,205,510 1,420,996
- ---------- ---------- ----------
2,808,442 8,341,670 5,205,510
========== ========== ==========
</TABLE>
9
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THE AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization -- The AUSA Endeavor Variable Annuity Account ("Mutual Fund
Account") is a segregated investment account of AUSA Life Insurance Company,
Inc. ("AUSA Life"), an indirect, wholly-owned subsidiary of AEGON USA, Inc.
("AUSA"), a holding company. AUSA is an indirect, wholly-owned subsidiary of
AEGON nv, a holding company organized under the laws of The Netherlands.
The Enhanced Index subaccount commenced operations on May 1, 1997. The
Opportunity Value Subaccount commenced operations on December 13, 1996.
Effective May 1, 1996, the names of the Money Market, Managed Asset Allocation,
Quest for Value, and the U.S. Government Securities Portfolios and Subaccounts
were changed to TCW Money Market, TCW Managed Asset, Value Equity, and Dreyfus
U.S. Government Securities Portfolios and Subaccounts, respectively. Effective
October 29, 1996, the names of the Value Small Cap Portfolio and Subaccount was
changed to Dreyfus Small Cap Value Portfolio and Subaccount. The investment
advisor of the Endeavor Series Trust is Endeavor Investment Advisors, a general
partnership between Endeavor Management Co. and AUSA Financial Markets, Inc.,
an affiliate of AUSA Life. The investment advisor for the WRL Investment
Management, Inc. is Western Reserve Life Assurance Co. of Ohio, an affiliate of
AUSA Life.
The Mutual Fund Account is registered with the Securities and Exchange
Commission as a Unit Investment Trust pursuant to provisions of the Investment
Company Act of 1940.
Investments -- Net purchase payments received by the Mutual Fund Account are
invested in the portfolios of the Endeavor Series Trust, and the Growth
Portfolio of the WRL Investment Management, Inc. (collectively the "Series
Funds"), as selected by the contract owner. Investments are stated at the
closing net asset values per share on June 30, 1997.
Realized capital gains and losses from sale of shares in the Series Funds are
determined on the first-in, first-out basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date. Unrealized gains or losses
from investments in the Series Funds are credited or charged to contract
owners' equity.
Dividend Income -- Dividends received from the Series Funds investments are
reinvested to purchase additional mutual fund shares.
10
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2. INVESTMENTS
A summary of the mutual fund investment at June 30, 1997 follows:
<TABLE>
<CAPTION>
NUMBER OF NET ASSET VALUE MARKET
SHARES HELD PER SHARE VALUE COST
------------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
Endeavor Series Trust
TCW Money Market
Portfolio.............. 1,018,218.970 $ 1.00 $ 1,018,219 $ 1,018,219
TCW Managed Asset
Allocation Portfolio... 152,281.934 20.72 3,155,282 2,626,575
T. Rowe Price
International Stock
Portfolio.............. 322,480.105 15.45 4,982,318 4,322,311
Value Equity Portfolio.. 229,443.288 18.84 4,322,712 3,704,947
Dreyfus Small Cap Value
Portfolio.............. 181,550.906 15.47 2,808,593 2,422,825
Dreyfus U.S. Government
Securities Portfolio... 82,685.985 11.18 924,429 921,686
T. Rowe Price Equity
Income Portfolio....... 222,286.357 17.26 3,836,663 3,305,111
T. Rowe Price Growth
Stock Portfolio........ 141,549.469 18.88 2,672,454 2,187,675
Opportunity Value
Portfolio.............. 49,048.155 11.02 540,511 500,780
Enhanced Index
Portfolio.............. 1,222.771 11.19 13,683 13,138
WRL Investment
Management, Inc.
Growth Portfolio........ 215,464.510 38.717398 8,342,225 7,456,054
----------- -----------
$32,617,089 $28,479,321
=========== ===========
</TABLE>
3. CONTRACT OWNERS' EQUITY
A summary of deferred annuity contracts terminable by owners at June 30, 1997
follows:
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION TOTAL
SUBACCOUNT UNITS OWNED UNIT VALUE CONTRACT VALUE
---------- ------------- ------------ --------------
<S> <C> <C> <C>
TCW Money Market..................... 866,843.012 $ 1.174511 $ 1,018,117
TCW Managed Asset Allocation......... 1,555,260.857 2.028611 3,155,019
T. Rowe Price International Stock.... 3,381,398.984 1.473324 4,981,896
Value Equity......................... 2,260,575.104 1.912022 4,322,269
Dreyfus Small Cap Value.............. 1,598,015.432 1.757456 2,808,442
Dreyfus U.S. Government Securities... 802,125.952 1.152450 924,410
T. Rowe Price Equity Income.......... 2,217,548.575 1.730058 3,836,488
T. Rowe Price Growth Stock........... 1,429,277.604 1.869689 2,672,305
Opportunity Value.................... 494,628.345 1.092742 540,501
Enhanced Index....................... 12,255.512 1.116452 13,683
Growth............................... 444,026.506 18.786424 8,341,670
-----------
$32,614,800
===========
</TABLE>
A summary of changes in contract owners' account units follows:
<TABLE>
<CAPTION>
TCW T. ROWE DREYFUS DREYFUS T. ROWE T. ROWE
MANAGED PRICE SMALL U.S. PRICE PRICE
TCW MONEY ASSET INT'L. VALUE CAP GOV'T. EQUITY GROWTH OPPORTUNITY ENHANCED
MARKET ALLOCATION STOCK EQUITY VALUE SECURITIES INCOME STOCK VALUE INDEX GROWTH
SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT.
--------- ---------- --------- --------- --------- ---------- --------- --------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units
outstanding at
1/1/96......... $ 271,035 607,869 681,094 547,234 535,283 204,814 293,620 189,614 -- -- 97,436
Units
purchased...... 750,980 264,897 798,316 680,695 445,979 305,474 810,397 615,741 178,913 -- 156,541
Units redeemed
and
transferred.... (356,841) 250,703 605,423 337,670 258,181 79,492 283,590 159,303 -- -- 52,878
--------- --------- --------- --------- --------- ------- --------- --------- ------- ------ -------
Units
outstanding at
12/31/96....... 665,174 1,123,469 2,084,833 1,565,599 1,239,443 589,780 1,387,607 964,658 178,913 -- 306,855
Units
purchased...... 269,150 164,645 541,916 336,505 174,789 55,174 445,746 249,182 272,586 6,235 62,452
Units redeemed
and
transferred.... (67,481) 267,147 754,650 358,471 183,783 157,172 384,196 215,438 43,129 6,021 74,720
--------- --------- --------- --------- --------- ------- --------- --------- ------- ------ -------
Units
outstanding at
6/30/97........ $ 866,843 1,555,261 3,381,399 2,260,575 1,598,015 802,126 2,217,549 1,429,278 494,628 12,256 444,027
========= ========= ========= ========= ========= ======= ========= ========= ======= ====== =======
</TABLE>
11
<PAGE>
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At June 30, 1997 contract owners' equity was comprised of:
<TABLE>
<CAPTION>
TCW T. ROWE DREYFUS DREYFUS T. ROWE T. ROWE
MANAGED PRICE SMALL U.S. PRICE PRICE
TCW MONEY ASSET INT'L. VALUE CAP GOV'T. EQUITY GROWTH OPPORTUNITY
MARKET ALLOCATION STOCK EQUITY VALUE SECURITIES INCOME STOCK VALUE
TOTAL SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT. SUBACCT.
----------- --------- ---------- --------- --------- --------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit
transactions,
accumulated net
investment
income and
realized
capital gains.. 28,477,032 1,018,117 2,626,312 4,321,889 3,704,504 2,422,674 921,667 3,304,936 2,187,526 500,770
Adjustment for
appreciation to
market value... 4,137,768 -- 528,707 660,007 617,765 385,768 2,743 531,552 484,779 39,731
----------- --------- --------- --------- --------- --------- ------- --------- --------- -------
Total Contract
Owners'
Equity......... $32,614,800 1,018,117 3,155,019 4,981,896 4,322,269 2,808,442 924,410 3,836,488 2,672,305 540,501
=========== ========= ========= ========= ========= ========= ======= ========= ========= =======
<CAPTION>
ENHANCED
INDEX GROWTH
SUBACCT. SUBACCT.
-------- ---------
<S> <C> <C>
Unit
transactions,
accumulated net
investment
income and
realized
capital gains.. 13,138 7,455,499
Adjustment for
appreciation to
market value... 545 886,171
-------- ---------
Total Contract
Owners'
Equity......... 13,683 8,341,670
======== =========
</TABLE>
4. TAXES
Operations of the Mutual Fund Account form a part of AUSA Life, which is taxed
as a life insurance company under Subchapter L of the Internal Revenue Code of
1986, as amended (the Code). The operations of the Mutual Fund Account are
accounted for separately from other operations of AUSA Life for purposes of
federal income taxation. The Mutual Fund Account is not separately taxable as a
regulated investment company under Subchapter M of the Code and is not
otherwise taxable as an entity separate from AUSA Life. Under existing federal
income tax laws, the income of the Mutual Fund Account, to the extent applied
to increase reserves under the variable annuity contracts, is not taxable to
AUSA Life.
5. ADMINISTRATIVE, MORTALITY AND EXPENSE RISK CHARGE
Administrative charges include an annual charge of the lesser of 2% of the
policy value or $35 per contract which will commence on the first policy
anniversary of each contract owner's account. For policies issued on or after
May 1, 1995, the fee is waived if the sum of the premium payments made less the
sum of all partial withdrawals is at least $50,000 on the policy anniversary.
Charges for administrative fees to the variable annuity contracts are an
expense of the Mutual Fund Account.
AUSA Life deducts a daily charge equal to an annual rate of 1.25% of the value
of the contract owners' account as a charge for assuming certain mortality and
expense risks. AUSA Life also deducts a daily charge equal to an annual rate of
.15% of the contract owners' account for administrative expenses.
6. PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1997 AND YEAR
ENDED DECEMBER 31, 1996 OR COMMENCEMENT
OF OPERATIONS TO DECEMBER 31, 1996
----------------------------------------
1997 1996
------------------- --------------------
PURCHASES SALES PURCHASES SALES
----------- ------- ---------- ---------
<S> <C> <C> <C> <C>
Endeavor Series Trust
TCW Money Market Portfolio........... $ 435,334 184,978 880,105 414,686
TCW Managed Asset Allocation
Portfolio........................... 928,485 87,140 986,607 92,138
T. Rowe Price International Stock
Portfolio........................... 1,872,474 105,303 1,822,939 65,520
Value Equity Portfolio............... 1,509,078 165,704 1,648,916 64,146
Dreyfus Small Cap Value Portfolio.... 871,458 33,630 1,110,497 154,397
Dreyfus U.S. Government Securities
Portfolio........................... 306,842 44,656 525,184 88,868
T. Rowe Price Equity Income
Portfolio........................... 1,451,438 40,726 1,578,572 62,231
T. Rowe Price Growth Stock
Portfolio........................... 854,347 63,782 1,167,599 32,296
Opportunity Value Portfolio.......... 322,279 1,353 179,798 --
Enhanced Index Portfolio............. 13,139 1 -- --
WRL Investment Management, Inc.
Growth Portfolio..................... 2,567,168 168,565 3,729,079 75,787
----------- ------- ---------- ---------
$11,132,042 895,838 13,629,296 1,050,069
=========== ======= ========== =========
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