<PAGE>
Allmerica Financial
December 31, 1998
Annual Report
Allmerica Securities Trust 1998
[LOGO OF ALLMERICA APPEARS HERE]
<PAGE>
1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Trust Information........................................................ 2
A Letter from the Chairman............................................... 3
Bond & Money Market Overview............................................. 4
Trust Overview........................................................... 6
Financials............................................................... F-1
Shareholder Information.................................................. F-12
</TABLE>
<PAGE>
2
TRUST INFORMATION
BOARD OF TRUSTEES
John F. O'Brien, Chairman
P. Kevin Condron*
Cynthia A. Hargadon*
Gordon Holmes*
John P. Kavanaugh
Bruce E. Langton*
Attiat F. Ott*
Paul D. Paganucci*
Richard M. Reilly
Ranne P. Warner*
OFFICERS
Richard M. Reilly, President
George M. Boyd, Secretary
INVESTMENT ADVISER
Allmerica Asset Management, Inc.
440 Lincoln Street, Worcester, MA 01653
REGISTRAR AND TRANSFER, DIVIDEND DISBURSING
AND REINVESTMENT AGENT
The Bank of New York
P.O. Box 11258, Church Street Station, New York, NY 10286
CUSTODIAN
Bankers Trust Company
16 Wall Street, New York, NY 10005
ADMINISTRATOR
First Data Investor Services Group
4400 Computer Drive, Westborough, MA 01581
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street, Boston, MA 02110
LEGAL COUNSEL ROPES & GRAY ONE
International Place, Boston, MA 02110
SHAREHOLDERS INQUIRES MAY BE DIRECTED TO:
The Bank of New York Shareholder Relations
Department - 11E P.O. Box 11258 Church Street
Station, New York, NY 10286
1-800-432-8224
*Independent Trustees
<PAGE>
3
A LETTER FROM THE CHAIRMAN
[PICTURE APPEARS HERE]
Dear Client:
The old Wall Street saying that markets run on two emotions, greed and fear, was
never more evident than in 1998. The year began with the domestic economy
enjoying what Chairman Greenspan described as a "virtuous cycle" of continued
economic growth, high employment and price stability. As a result, the bond
market performed well through the first half of the year as interest rates
drifted slightly lower and credit-quality concerns remained minor.
The mood however, shifted to fear late in the summer. In late August, the
Russian government announced a debt repayment moratorium and a de facto
devaluation in the ruble. Suddenly investors re-evaluated the credit risk in
their portfolios and began a wholesale liquidation of riskier assets and a
flight to safety in the form of U.S. Treasuries. This sudden shift in senti ment
also caused the demise of several large hedge funds which added to the supply of
assets for sale.
To change the market psychology, the Federal Reserve cut interest rates three
times for a total of 0.75%. As a result, buyers and "greed" returned to the
financial markets and investment returns ended quite strong. Money market funds
returned approximately 5% and the broad market, as measured by the Lehman
Aggregate Index returned 8.67%. The high yield market, however, never fully
recovered, rising only 3.66% as measured by the Merrill Lynch High Yield Index.
Against this backdrop, we are pleased with the performance of the Allmerica
Securities Trust which produced a total return of 8.47% for the year.
We are pleased to report that on February 9, 1999, the Allmerica Securities
Trust Board of Trustees declared a quarterly dividend of $0.20 per share payable
on March 31, 1999 to shareholders of record on February 26, 1999. For the
twelve-month period ended December 31, 1998, the Trust paid dividends of $0.83
per share producing a current yield of 7.46% based on the year-end closing price
of $11.125. By comparison, the yield on the 10-year Treasury note as of December
31, 1998 was 4.65%.
Thank you for your interest in the Allmerica Securities Trust. The Trust's
manager continues to keep a watchful eye on macro-economic events and is
comfortable that the Trust is well-positioned to continue to provide you with
the competitive returns you have come to enjoy.
On behalf of the Board of Trustees,
/s/ John F. O'Brien
John F. O'Brien
Chairman of the Board
Allmerica Securities Trust
<PAGE>
4
BOND & MONEY MARKET OVERVIEW
1994: Federal Reserve Board raises interest rates six times, stalling equity
markets even while corporate earnings continued to grow.
1995: Favorable economic conditions result in large gains for the U.S. equity
markets. Europe turns in strongest performance of international equity markets.
1996: Despite a volatile marketplace, the U.S. stock market performs well.
Internationally, European countries post the most impressive gains.
1997: Robust economic growth, declining interest rates and low unemployment
produce a third consecutive year of unprecedented gains for the U.S. stock
market.
1998: Worldwide economic problems cause considerable volatility for stocks.
Yet, the market posts its fourth consecutive year of double-digit gains.
1998 proved to be one of the most volatile years for the stock market since the
crash of 1987. Widely expected by many investors to be a cooling off period for
stocks, the past year brought a series of ups and downs - and double-digit gains
- - to the market. In fact, it proved to be the fourth straight year of plus-20%
returns for the S&P 500(R) Index.
The roller coaster ride for stocks began mid-year as economic turmoil in Asia,
Russia and Latin America resulted in increased investor concern. This turmoil
produced a third quarter of market extremes. In July, the market posted an all-
time high. But August brought a severe correction as investors feared lower
worldwide demand for goods and services would lead to slower earnings growth for
U.S. corporations.
But slower earnings growth proved not to deter investors altogether. While they
fled investments exposed to international market risk, they favored the safety
and predictability of large-company U.S. stocks - regardless of how vastly
overpriced they seemed.
Once the Federal Reserve cut interest rates for the third time in November,
investors returned to the market in full force. They poured money into a small
group of large-company stocks, sending broad market indexes soaring to another
year of strong performance. In fact, S&P 500(R) performance was dominated
throughout the year by only a few high-powered names such as Microsoft Corp.,
Dell Computer Corp., Intel Corp.
While large-cap gains outpaced both small- and mid-cap stocks and drove overall
market performance, technology led sector performance for the year. Internet-
related stocks, in particular, drove results even higher. Specifically,
companies such as Amazon.com, an on-line book seller and eBay.com, an on-line
auction service, saw their market values explode. Although these Internet stocks
are not included in the S&P 500(R) Index, they helped bolster the entire
technology sector. Investors seemed to feel that any company involved in
computers would benefit from an Internet-driven surge in demand.
<TABLE>
<CAPTION>
Despite the ongoing Encouraged by the
Asian crisis, stocks [PICTURE] upcoming monetary [PICTURE]
benefit from low union, Europe
interest rates and a leads global
steady economy. performance.
<S> <C> <C> <C> <C> <C> <C>
1998 JAN FEB MAR APR MAY JUN
- -------------------------------------------------------------------------------------------------------------------------------
Technology, led by Massive economic problems
[PICTURE] Internet-related in Russia, send shock waves
stocks, is the best- through the world's
performing industry financial markets.
sector for the year.
</TABLE>
<PAGE>
5
BOND & MONEY MARKET OVERVIEW
Other top-performing industry groups in 1998 were telecommunications which
benefited from merger and acquisition activity, and retailers, which fared well
as a result of strong consumer spending. On the other hand, market laggards were
dominated by oil services, which felt the painful effects of sharply declining
crude oil prices.
On the international front, Europe performed well in 1998, encouraged by the
anticipated monetary union. In fact, Greece's stock market, led all global
performers with a smashing 86% return. Countries such as Italy and Belgium also
performed particularly well in this region.
However, results from emerging market countries weren't as rosy. Currency
concerns plagued Asia for much of 1998. While Japan's stock market went through
a series of ups and downs, countries like Thailand and Korea started taking
serious measures to turn their economies around - and it definitely made a
difference. South Korea proved to be one of the top-performing countries during
1998.
Russia, however, wasn't so favored. By mid-year, massive economic problems and a
large devaluation in the ruble caused investors to flee Russian stocks and
bonds, sending shock waves throughout the world's financial markets.
As a result of Russia's economic collapse, investors grew more concerned about
what the impact would be on other emerging markets. These worries particularly
affected Brazil, which unlike Russia, managed to keep currency devaluation at
bay thanks to support from the U.S., promises of reform and higher interest
rates. Unfortunately, the higher cost of borrowing stunted economic growth and
sent Brazil's economy into a recession.
Economic problems weren't confined to just Brazil, however. Slumping prices for
crude oil and other commodities curbed economic growth in other parts of Latin
America as well. Because oil prices make up about 70% of the government's
revenue, Venezuela was particularly hard hit. Political concerns also were a
factor here and combined to produce one of the worst-performing markets for the
year.
Currently, uncertainty exists throughout the world's stock markets. In the U.S.,
stable interest rates and low inflation bode well for the stock market, but
slower corporate earnings growth continues to be a concern. In Europe, the
introduction of the Euro, the new single currency for Europe, should benefit the
region. However, slower earnings growth remains a concern. And although Japan
and most of Asia appear to be on the road to economic recovery, great
uncertainty still exists in these markets.
Given the unsettled nature of the global economy, it will be difficult for the
U.S. stock market to continue its four-year string of outstanding returns.
<TABLE>
<CAPTION>
As a result of worldwide Sharply declining oil
[PICTURE] economic unrest, invest- [PICTURE] prices cause the emerging
ors favor the safety of markets of Latin America
large-company stocks, to suffer.
which drive performance
for the year.
<S> <C> <C> <C> <C> <C>
JUL AUG SEP OCT NOV DEC
- -----------------------------------------------------------------------------------------------------------------------
[PICTURE] The Federal Reserve Uncertainty exists
cuts interest rates throughout the world's
three times prompting stock markets as
investors to favor a investors predict a slower
small group of large- year for corporate
company stocks. earnings - and more
normal results from the
stock market.
</TABLE>
<PAGE>
6
ALLMERICA SECURITIES TRUST
For the one-year period ended December 31, 1998, the Allmerica Securities Trust
posted a total return of 8.47% compared to the 8.67% return of the Lehman
Brothers Aggregate Bond Index for the same period.
1998 proved to be a disappointing year for corporate bond performance. Much of
the deterioration occurred between late-August and mid-October as a global
financial crisis developed and investors fled these issues in favor of super-
safe U.S. Treasuries.
Within the investment grade universe, the Trust emphasized lower-quality
credits, which did not fare particularly well in this environment. For example,
BBB-rated names, especially in cyclical sectors such as oil and gas, and paper,
lagged higher quality issues.
Disappointing results also stemmed from the lackluster performance of high-yield
corporate bonds, which lagged BBB or higher-rated bonds by nearly five
percentage points. Although liquidity concerns drove this sector's poor
performance, declining prices in both the energy and steel industries, which
represented a total of 10% of the Trust's assets, also hindered results.
However, a heavy weighting in the Media sector, coupled with holdings of such
blue-chip names as IBM and Worldcom, proved to mitigate some of the under-
performance.
Moving into the new year, the Fund's managers expect to retain their current
position in corporate bonds as long as credit fundamentals remain positive.
INVESTMENT ADVISER
Allmerica Asset Management, Inc.
ABOUT THE FUND
Seeks to generate a high rate of current income for distribution to
shareholders.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As of December 31, 1998, the sector allocation of net assets was:
Corporate Notes and Bonds 71% [PICTURE]
U.S. Government
Obligations 17%
Asset-Backed Securities 8%
Foreign Bonds 2%
Cash Equivalents and Other 2%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998 1 YEAR 5 YEARS 10 YEARS
Allmerica Securities Trust 8.47% 8.05% 9.89%
Lehman Brothers Corporate Bond Index 8.59% 7.74% 9.87%
Lipper Corporate Debt
BBB-Rated Funds Average 6.23% 6.98% 9.16%
- --------------------------------------------------------------------------------
HISTORICAL PERFORMANCE
- --------------------------------------------------------------------------------
Total Return Total Return
on Net Asset Value on Market Value
1994 (2.41%) (12.48%)
1995 18.58% 21.71%
1996 5.35% 6.06%
1997 11.34% 14.07%
1998 8.47% 11.13%
The Lehman Brothers Corporate Bond Index is an unmanaged index of all publicly
issued, fixed-rate, non-convertible investment grade corporate debt. The Lipper
Corporate Debt BBB-Rated Funds Average is a non-weighted index of 128 funds
within the Corporate BBB Debt Fund category.
<PAGE>
Allmerica Securities Trust
PORTFOLIO OF INVESTMENTS . DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S RATINGS VALUE
PAR VALUE (UNAUDITED) (NOTE 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE NOTES AND BONDS-70.4%
FINANCE - 15.55%
$ 1,150,000 BCH Cayman Islands
Yankee Subordinated Notes, Guaranteed
6.50%, 02/15/06 A $ 1,163,574
1,400,000 Capital One Financial Corp.
7.25%, 12/01/03 Ba 1,376,544
1,000,000 Chase Manhattan Corp.
6.38%, 02/15/08 A 1,033,880
1,500,000 Colonial Capital II, Series A, Guaranteed
8.92%, 01/15/27(A) (D) BB 1,605,663
975,000 Compass Trust I, Series A, Guaranteed
8.23%, 01/15/27 A 1,036,340
800,000 Conseco Financing Trust III
8.80%, 04/01/27 Ba 765,129
1,000,000 First Tennessee National Corp.
Subordinated Notes
6.75%, 11/15/05 Baa 1,054,435
1,000,000 Homeside Lending, Inc., MTN
6.88%, 05/15/00 A 1,013,069
270,458 Mack Trust, Inc.
10.91%, 04/01/99 (B) NR 289,195
550,000 MBNA Corp., MTN
6.96%, 09/12/02 Baa 560,272
507,488 Midland Funding Corp., Series C
Senior Secured Lease Obligation
10.33%, 07/23/02 Ba 536,483
1,000,000 The Money Store, Inc.
8.05%, 04/15/02 A 1,068,079
1,000,000 Providian Capital, Series A, Guaranteed
9.53%, 02/01/27 (A) Ba 1,029,293
1,000,000 Riggs Capital Trust
8.63%, 12/31/26 (A) Baa 1,025,173
1,000,000 St. George Bank, Ltd., Yankee Debenture
7.15%, 10/15/05 (A) Baa 1,051,410
1,250,000 Zions Institutional Capital Trust
Series A, Guaranteed
8.54%, 12/15/26 A 1,372,256
------------
15,980,795
------------
INDUSTRIAL - 12.03%
2,000,000 Bethlehem Steel Corp., Senior Notes
10.38%, 09/01/03 Ba 2,080,000
950,000 Buckeye Cellulose Corp.
Senior Subordinated Notes
9.25%, 09/15/08 Ba 995,125
1,000,000 CSC Holdings, Inc., Debenture
7.88%, 02/15/18 Ba 1,036,600
1,000,000 Georgia Gulf Corp.
7.63%, 11/15/05 Ba 1,059,684
649,000 Homeside, Inc., Senior Notes, Series B
11.25%, 05/15/03 (A) A 759,330
1,000,000 Interpool, Inc.
7.35%, 08/01/07 (A) Ba 952,209
1,000,000 LTV Corp., Senior Notes, Guaranteed
8.20%, 09/15/07 (A) BB 905,000
INDUSTRIAL (CONTINUED)
$ 500,000 McDermott (J. Ray) SA
Senior Subordinated Notes
9.38%, 07/15/06 B $ 530,000
950,000 Owens-Illinois, Inc., Senior Notes
7.85%, 05/15/04 Ba 993,245
950,000 Republic Group, Inc., Senior Notes
9.50%, 07/15/08 (A) B 926,250
1,000,000 RPM, Inc., Senior Notes
7.00%, 06/15/05 Baa 1,064,935
1,000,000 Westinghouse Electric Corp., Debenture
8.38%, 06/15/02 Baa 1,064,425
------------
12,366,803
------------
COMMUNICATIONS - 10.03%
500,000 Clear Channel Communications, Inc.
Debenture
7.25%, 10/15/27 Baa 503,828
1,000,000 Comcast Cable Communications, Inc.
8.13%, 05/01/04 (A) Baa 1,103,764
1,000,000 Continental Cablevision, Inc.
8.50%, 09/15/01 Baa 1,062,039
750,000 Continental Cablevision, Inc.
8.30%, 05/15/06 Baa 832,379
700,000 Hearst-Argyle Television, Senior Notes
7.00%, 01/15/18 Baa 697,620
1,175,000 MCI WorldCom, Inc.
7.75%, 04/01/07 Baa 1,325,501
950,000 Sprint Capital Corp.
5.70%, 11/15/03 Baa 949,844
1,850,000 TCI Communications, Inc.
7.88%, 02/15/26 Baa 2,189,700
500,000 Viacom, Inc., Senior Notes
7.75%, 06/01/05 Baa 545,959
1,000,000 Viacom, Inc., Senior Debenture, Guaranteed
7.63%, 01/15/16 Baa 1,100,280
------------
10,310,914
------------
OIL, GAS AND PETROLEUM - 7.84%
2,000,000 ANR Pipeline Co., Debenture
9.63%, 11/01/21 Baa 2,568,218
1,000,000 Clark Oil & Refining Corp., Senior Notes
9.50%, 09/15/04 Ba 1,003,750
1,000,000 Oryx Energy Co.
8.13%, 10/15/05 Ba 1,073,546
1,250,000 Texas Eastern Transmission Corp., Debenture
10.00%, 08/15/01 A 1,386,171
1,000,000 Tosco Corp.
7.00%, 07/15/00 Baa 1,009,497
900,000 Valero Management Partnership, LP
First Mortgage, Series J-12
10.02%, 03/15/07 (B) NR 1,011,717
------------
8,052,899
------------
</TABLE>
See Notes to Financial Statements.
F-1
<PAGE>
Allmerica Securities Trust
PORTFOLIO OF INVESTMENTS, CONTINUED . DECEMBER 31, 1998
<TABLE>
<CAPTION>
MOODY'S RATINGS VALUE
PAR VALUE (UNAUDITED) (NOTE 2)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES - 7.73%
$ 1,550,000 Connecticut Light & Power Co.
First Mortgage, Series 94D
7.88%, 10/01/24 Ba $ 1,622,115
1,162,000 North Atlantic Energy Corp.
First Mortgage, Series A
9.05%, 06/01/02 B 1,218,609
1,450,000 Ocean Energy, Inc.
Senior Notes, Series B
7.63%, 07/01/05 Ba 1,384,750
1,270,000 Sithe/Independence Funding Corp.
Series A
9.00%, 12/30/13 Baa 1,502,537
1,500,000 Texas-New Mexico Power Co.
First Mortgage, Series U
9.25%, 09/15/00 Baa 1,583,755
600,000 Texas Utilities Electric Co.
First Mortgage
7.38%, 10/01/25 A 633,000
------------
7,944,766
------------
TRANSPORTATION - 3.33%
1,000,000 AMR Corp., Debenture
10.00%, 02/01/01 Baa 1,072,329
949,052 Delta Airlines, Inc.
9.23%, 07/02/02 (B) NR 999,741
659,000 U.S. Air, Inc., Equipment Trust,Series D
10.30%, 01/15/00 Ba 674,577
661,000 U.S. Air, Inc., Equipment Trust, Series F
10.30%, 01/15/00 Ba 678,255
------------
3,424,902
------------
MERCHANDISING AND RETAIL - 2.99%
1,000,000 Kroger Co., Senior Subordinated Notes
10.00%, 05/01/99 Ba 1,012,784
950,000 Meyer (Fred), Inc.
7.38%, 03/01/05 Ba 1,005,954
1,000,000 USG Corp., Senior Notes
8.50%, 08/01/05 Baa 1,053,750
------------
3,072,488
------------
SECURITIES BROKERS, DEALERS AND EXCHANGES - 2.91%
1,000,000 Donaldson Lufkin & Jenrette, Inc.
Senior Notes
6.88%, 11/01/05 A 1,030,029
888,859 Jones (Edward D.) & Co., LP
7.95%, 04/15/06 (B) NR 931,586
1,000,000 Legg Mason, Inc., Senior Notes
6.50%, 02/15/06 Baa 1,034,387
------------
2,996,002
------------
CONSUMER PRODUCTS - 2.71%
1,000,000 DiMon, Inc., Senior Notes, Series B
8.88%, 06/01/06 Ba 996,480
1,600,000 Ralston Purina Co., Debenture
7.75%, 10/01/15 Baa 1,786,145
------------
2,782,625
------------
PRINTING AND PUBLISHING - 2.29%
$1,000,000 Time Warner, Inc., Debenture
9.15%, 02/01/23 Baa $ 1,314,814
850,000 Time Warner Entertainment Co., LP
Senior Debenture
8.38%, 03/15/23 Baa 1,039,635
------------
2,354,449
------------
HEALTH CARE - 2.03%
675,000 Allegiance Corp.
7.30%, 10/15/06 Baa 728,660
300,000 Tenet Healthcare Corp.
Senior Subordinated Notes
8.63%, 01/15/07 Ba 313,500
1,000,000 Tenet Healthcare Corp.
Senior Notes
7.63%, 06/01/08 (A) Ba 1,038,942
------------
2,081,102
------------
TECHNOLOGY - 1.03%
1,000,000 International Business Machine Corp.
6.50%, 01/15/28 A 1,056,170
------------
TOTAL CORPORATE NOTES AND BONDS 72,423,915
------------
(Cost $68,334,370)
U.S. GOVERNMENT OBLIGATIONS - 17.10%
U.S. TREASURY BONDS - 9.29%
5,150,000 7.25%, 05/15/16 Aaa 6,247,594
2,675,000 7.13%, 02/15/23 Aaa 3,300,281
------------
9,547,875
------------
U.S. TREASURY NOTES - 7.81%
1,000,000 5.38%, 02/15/01 Aaa 1,015,000
1,000,000 5.88%, 02/15/04 Aaa 1,055,313
570,000 6.88%, 05/15/06 Aaa 644,278
4,665,000 7.00%, 07/15/06 Aaa 5,312,269
------------
8,026,860
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 17,574,735
------------
(Cost $16,173,486)
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES - 8.35%
1,000,000 American Airlines, Inc
Pass-Through Trust , Series 1991 - C2
9.73%, 09/29/14 A 1,231,810
1,000,000 BankBoston RV Asset Backed Trust,
Series 1997 - 1, Class A8
6.54% , 02/15/09 Aaa 1,031,792
375,000 Barnett Auto Trust
Series 1997-A, A3
6.03%, 11/15/01 Aaa 377,520
101,678 Eaglemark Trust
Harley-Davidson, Series 1995 - 1
6.80%, 12/15/01 (A) Aaa 105,524
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
Allmerica Securities Trust
PORTFOLIO OF INVESTMENTS, CONTINUED . December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S RATINGS VALUE
PAR VALUE (UNAUDITED) (NOTE 2)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES (continued)
$1,000,000 Donaldson Lufkin & Jenrette Commercial
Mortgage Corp., Series 1998-CF2, Class A1A
5.88%, 11/12/31 Aaa $ 1,006,230
999,704 First Plus Home Loan Trust
Series 1996-2, Class A5
7.47%, 02/20/11 Aaa 1,008,361
599,458 Green Tree Recreational Equipment &
Consumer Trust
Series 1997-B, Class A-1
6.55%, 07/15/28 NR 615,350
544,317 Green Tree Financial Corp.
Series 1995-A, Class A
7.25%, 07/15/05 Baa 547,022
420,721 National Auto Finance
Series 1996-1, Class A
6.33%, 12/21/02 Aaa 425,403
650,000 Resolution Trust Corp.
Series 1995 - 1, Class A4C, CMO
6.85%, 02/25/27 Aaa 653,614
1,294,374 United Air Lines, Inc.
Pass Through Trust, Series 1991 - B1
9.30%, 03/22/08 Baa 1,459,976
114,287 Western Financial Grantor Trust
Series 1995-2, Class A2
7.10%, 07/01/00 Aaa 114,956
------------
TOTAL ASSET-BACKED AND
MORTGAGE-BACKED SECURITIES 8,577,558
============
(Cost $8,105,824)
FOREIGN BONDS (C) - 2.20%
$1,000,000 Banco Nacional Com Ext
8.00%, 07/18/02 Ba $ 950,000
950,000 Republic of Colombia, Series E, MTN
8.66%, 10/07/16 (A) Baa 812,818
500,000 United Mexican States
Yankee Emerging Market Notes
8.50%, 09/15/02 Ba 498,750
------------
TOTAL FOREIGN BONDS 2,261,568
------------
(Cost $2,255,075)
Shares
- ------
INVESTMENT COMPANY - 0.01%
12,678 SSgA Prime Money Market Fund NR 12,678
------------
TOTAL INVESTMENT COMPANY 12,678
------------
(Cost $12,678)
TOTAL INVESTMENTS - 98.13% 100,850,454
------------
(Cost $94,881,433)
NET OTHER ASSETS AND LIABILITIES - 1.87% 1,919,710
------------
NET ASSETS - 100.00% $102,770,164
============
</TABLE>
____________________________
(A) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold, in transactions exempt from
registration, to qualified institutional buyers. At December 31, 1998,
these securities amounted to $11,315,376 or 11.01% of net assets.
(B) Restricted Security - Represents ownership in a private placement
investment which has not been registered with the Securities and Exchange
Commision under the Securities Act of 1933. For additional information
concerning each restricted security, see Note 5.
(C) U.S. currency denominated.
(D) Standard & Poor's (S&P) credit ratings are used in the absence of a rating
by Moody's Investors, Inc.
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
FEDERAL INCOME TAX INFORMATION (SEE NOTE 2)
At December 31, 1998, the aggregate cost of investment securities for tax
purposes was $94,881,433. Net unrealized appreciation (depreciation) aggregated
$5,969,021, of which $6,450,512 related to appreciated investment securities and
$(481,491) related to depreciated investment securities.
At December 31, 1998, the Trust had capital loss carryforwards which expire as
follows:
$260,009 in 2002 and $17,365 in 2005. During 1998, the Trust utilized $802,919
of its capital loss carryforwards and $106,909 of capital loss carryforwards
expired.
OTHER INFORMATION
For the year ended December 31, 1998, the aggregated cost of purchases and the
proceeds of sales, other than from short-term investments, included $14,363,601
and $15,554,728 from non-governmental issuers, respectively, and $10,779,198 and
$9,757,577 from U.S. Government and Agency issuers, respectively.
At December 31, 1998, the value of the securities loaned amounted to $3,902,364.
The value of collateral amounted to $4,106,940 of which $3,054,440 and
$1,052,500 consisted of cash and letters of credit, respectively.
The composition of ratings of both long-term and short-term debt holdings as a
percentage of total value of investments in securities is as follows:
<TABLE>
<CAPTION>
Moody's Ratings (unaudited) S&P Ratings (unaudited)
<S> <C> <C> <C>
Aaa 22.11% BB 2.49%
A 12.68
Baa 33.36
Ba 22.88
B 2.65
NR (Not Rated) 3.83
----- -----
97.51% 2.49%
===== ====
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
ALLMERICA SECURITIES TRUST
STATEMENT OF ASSETS AND LIABILITIES . DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Note 2):
Investments at cost.................................................... $ 94,881,433
Net unrealized appreciation (depreciation)............................. 5,969,021
---------------
Total investments at value........................................... 100,850,454
Cash...................................................................... 4,379
Short-term investments held as collateral for securities loaned (Note 2).. 3,054,440
Interest and dividend receivables......................................... 2,029,891
---------------
Total Assets......................................................... 105,939,164
---------------
LIABILITIES:
Advisory fee payable (Note 3)............................................. 41,478
Trustees' fees and expenses payable....................................... 4,541
Accrued expenses and other payables....................................... 68,541
Collateral for securities loaned (Note 2)................................. 3,054,440
---------------
Total Liabilities.................................................... 3,169,000
---------------
NET ASSETS.................................................................. $ 102,770,164
===============
NET ASSETS consist of:
Par Value (Note 4)........................................................ $ 8,592,306
Paid-in capital........................................................... 88,445,043
Undistributed (distribution in excess of)net investment income............ 41,168
Accumulated (distribution in excess of) net realized gain (loss) on
investments sold......................................................... (277,374)
Net unrealized appreciation (depreciation) of investments................. 5,969,021
---------------
TOTAL NET ASSETS............................................................ $ 102,770,164
===============
Shares of beneficial interest outstanding (10,000,000 authorized shares
with par value of $1.00).................................................. 8,592,306
NET ASSET VALUE
Per Share................................................................. $ 11.961
===============
MARKET VALUE (closing price on New York Stock Exchange)
Per Share................................................................. $ 11.125
===============
</TABLE>
F-4 See Notes to Financial Statements.
<PAGE>
ALLMERICA SECURITIES TRUST
STATEMENT OF OPERATIONS . FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest (including income on securities loaned of $13,464)(Note 2).. $7,671,171
Dividends (Note 2)................................................... 37,251
----------
Total investment income.................................. 7,708,422
----------
EXPENSES:
Investment advisory fees (Note 3).................................... 500,473
Fund accounting fees (Note 3)........................................ 37,722
Custodian and securities lending fees (Note 2)....................... 7,419
Transfer agent fees.................................................. 78,173
Legal fees........................................................... 1,643
Audit fees........................................................... 18,020
Trustees' fees and expenses (Note 3)................................. 17,258
Reports to shareholders.............................................. 72,216
New York Stock Exchange fees......................................... 16,192
Miscellaneous........................................................ 1,336
----------
Total expenses........................................... 750,452
----------
NET INVESTMENT INCOME...................................................... 6,957,970
----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (Note 2):
Net realized gain (loss) on investments sold......................... 948,514
Net change in unrealized appreciation (depreciation) of investments.. 423,141
----------
NET GAIN (LOSS) ON INVESTMENTS............................................. 1,371,655
----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS..................................... $8,329,625
==========
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
1998 1997
-------------------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF YEAR................................................ $101,572,152 $ 98,135,471
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income.................................................... 6,957,970 7,194,926
Net realized gain (loss) on investments sold............................. 948,514 41,783
Net change in unrealized appreciation (depreciation) of investments...... 423,141 3,417,509
------------ ------------
Net increase (decrease) in net assets resulting from operations.......... 8,329,625 10,654,218
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................................................... (7,032,886) (7,217,537)
Distributions in excess of net investment income......................... (98,727) -
------------ ------------
Total distributions.......................................... (7,131,613) (7,217,537)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Issued to shareholders in reinvestment of dividends...................... - -
------------ ------------
Total increase (decrease) in net assets...................... 1,198,012 3,436,681
------------ ------------
NET ASSETS AT END OF YEAR (INCLUDING LINE A)................................... $102,770,164 $101,572,152
============ ============
(A) Undistributed (distribution in excess of) net investment income............ $ 41,168 $ 74,916
============ ============
</TABLE>
See Notes to Financial Statements. F-5
<PAGE>
ALLMERICA SECURITIES TRUST
FINANCIAL HIGHLIGHTS . FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year................................ $11.821 $11.421 $11.694 $10.644 $11.773
------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income............................................ 0.810 0.837 0.843 0.860 0.843
Net realized and unrealized gain (loss)
on investments.................................................. 0.160 0.403 (0.256) 1.050 (1.122)
------- ------- ------- ------- -------
Total from Investment Operations:................................. 0.970 1.240 0.587 1.910 (0.279)
------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment income............................. (0.819) (0.840) (0.860) (0.860) (0.850)
Distribution in excess of net investment income.................. (0.011) - - - -
------- ------- ------- ------- -------
Total distributions............................................... (0.830) (0.840) (0.860) (0.860) (0.850)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value........................ 0.140 0.400 (0.273) 1.050 (1.129)
------- ------- ------- ------- -------
Net Asset Value, end of year...................................... $11.961 $11.821 $11.421 $11.694 $10.644
======= ======= ======= ======= =======
Market Value, end of year......................................... $11.125 $10.813 $10.250 $10.500 $9.375
======= ======= ======= ======= =======
Total Return on Market Value, end of year......................... 11.13% 14.07% 6.06% 21.71% (12.48)%
Ratios/Supplemental Data
Net Assets, end of year(000's).................................... $102,770 $101,572 $98,135 $100,483 $ 91,458
Ratios to average net assets:
Net investment income....................................... 6.78% 7.27% 7.44% 7.64% 7.59%
Operating expenses.......................................... 0.73% 0.72% 0.75% 0.77% 0.78%
Management Fee.............................................. 0.49% 0.50% 0.50% 0.51% 0.50%
Portfolio Turnover Rate..................................... 25% 27% 47% 42% 42%
</TABLE>
F-6 See Notes Financial Statements.
<PAGE>
Allmerica Securities Trust
NOTES TO FINANCIAL STATEMENTS . DECEMBER 31, 1998
- --------------------------------------------------------------------------------
1. ORGANIZATION
Allmerica Securities Trust (the "Trust") was organized as a Massachusetts
business trust on June 30, 1986 and is registered under the Investment Company
Act of 1940, as amended, as a diversified, closed-end management investment
company.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The following is a summary of significant accounting policies which are in
conformity with generally accepted accounting principles consistently followed
by the Trust in the preparation of its financial statements.
SECURITY VALUATION: Corporate debt securities and debt securities of the U.S.
government and its agencies (other than short-term investments) are valued by an
independent pricing service approved by the Board of Trustees which utilizes
market quotations and transactions, quotations from dealers and various
relationships among securities in determining value. If not valued by a pricing
service, such securities are valued at prices obtained from independent brokers.
Investments with prices that cannot be readily obtained are carried at fair
value as determined in good faith under consistently applied procedures
established by and under the supervision of the Board of Trustees. Short-term
investments that mature in 60 days or less are valued at amortized cost.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on trade date. Net realized gains and losses on investments sold are
recorded on the basis of identified cost. Interest income is recorded on the
accrual basis and consists of interest accrued and, if applicable, accretion of
discount earned on zero coupon bonds, original issue discount bonds, stepped-
coupon bonds and payment in kind bonds. Dividend income is recorded on ex-
dividend date.
FEDERAL TAXES: The Trust intends to continue to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended. By so qualifying, the Trust will not be subject to Federal income taxes
to the extent that it distributes all of its taxable income and net realized
gains, if any, for its tax year ending December 31. In addition, by distributing
during each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, the Trust will not be subject
to Federal excise tax. Therefore, no Federal income tax provision is required.
DISTRIBUTIONS TO SHAREHOLDERS: Dividends to shareholders resulting from net
investment income are recorded on ex-dividend date and paid quarterly. Net
realized capital gains, if any, are distributed at least annually. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatment for paydown
gains/losses on certain securities, market discounts and losses deferred due to
wash sales. Any taxable income or gain remaining at fiscal year end will be
distributed in the following year.
Paid-in capital, undistributed net investment income and accumulated net
realized gain (loss) have been adjusted in the Statement of Assets and
Liabilities for permanent book-tax differences for the year ended December 31,
1998.
Permanent book-tax differences, if any, are not included in ending undistributed
net investment income for the purpose of calculating net investment income per
share in the Financial Highlights.
F-7
<PAGE>
Allmerica Securities Trust
NOTES TO FINANCIAL STATEMENTS, CONTINUED . DECEMBER 31, 1998
- --------------------------------------------------------------------------------
SECURITIES LENDING: The Trust, using Bankers Trust Company ("Bankers Trust") as
its agent, loaned securities to brokers who paid the Trust negotiated lenders'
fees. These fees are included in interest income on the Statement of Operations.
The Trust receives obligations of the U. S. government and its agencies, cash
and/or cash equivalents and/or letters of credit as collateral against the
loaned securities, in an amount at least equal to 102% of the market value of
the loaned securities at the inception of each loan. This collateral must be
maintained at not less than 102% of the market value of the loaned securities
during the period of the loan. Information regarding the value of the securities
loaned and the value of collateral at period end is included under the caption
"Other Information" at the end of the Trust's Schedule of Investments.
The Trust pays Bankers Trust fees for their services from the securities lending
program. For the year ended December 31,1998, the Trust paid Bankers Trust
$3,366.
EXPENSES: Most expenses of the Trust can be directly attributable to the Trust.
Expenses which can not be directly attributable to the Trust are allocated based
upon relative net assets among the Trust and one other affiliated registered
investment company.
3. INVESTMENT ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS
Allmerica Asset Management, Inc. ("AAM"), a wholly-owned subsidiary of First
Allmerica Financial Life Insurance Company ("First Allmerica"), serves as
Investment Adviser to the Trust. For these services, the Trust pays AAM
aggregate monthly compensation at an annual rate of (a) 3/10 of 1% of average
net assets plus (b) 2-1/2% of the amount of interest and dividend income.
To the extent that normal operating expenses of the Trust, excluding taxes,
interest, brokerage commissions and extraordinary expenses, but including the
investment advisory fee, exceed 1.50% of the first $30,000,000 of the Trust's
average weekly net assets, and 1% of any excess of such value over $100,000,000,
AAM will bear such excess expenses.
AAM has entered into an Administrative Services Agreement with First Data
Investor Services Group, Inc. ("Investor Services Group"), a wholly-owned
subsidiary of First Data Corporation, whereby Investor Services Group performs
administrative services for the Trust and is entitled to receive an
administrative fee and certain out-of-pocket expenses. AAM is solely responsible
for the payment of the administration fee to Investor Services Group. In a
separate agreement, Investor Services Group receives fees from the Trust for
certain fund accounting services provided in its capacity as pricing and
bookkeeping agent.
The Trust pays no salaries or compensation to any of its officers. Trustees who
are not directors, officers, or employees of the Trust or the Investment Adviser
are reimbursed for their travel expenses in attending meetings of the Trustees
and receive fees for their services. Such amounts are paid by the Trust.
4. SHARES OF BENEFICIAL INTEREST
There are 10,000,000 shares of $1.00 par value common stock authorized. At
December 31, 1998, First Allmerica and the Trustees of the Trust owned in the
aggregate 97,391 shares of beneficial interest.
F-8
<PAGE>
Allmerica Securities Trust
NOTES TO FINANCIAL STATEMENTS, CONTINUED . DECEMBER 31, 1998
- --------------------------------------------------------------------------------
5. RESTRICTED SECURITIES
At December 31, 1998, the Trust owned the following restricted securities
constituting 3.15% of net assets which may not be publicly sold without
registration under the Securities Act of 1933. The Trust would bear the
registration costs in connection with the disposition of restricted securities
held in the portfolio. The Trust does not have the right to demand that such
securities be registered. The value of these securities is determined by
valuations supplied by a pricing service or brokers or, if not available, in
good faith by or at the direction of the Trustees. Additional information on
restricted securities is as follows:
<TABLE>
<CAPTION>
Date of Par Cost at
Issuer Acquisition Amount Acquisition Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Delta Airlines, Inc. 12/12/91 $ 949,052 $ 960,248 $ 999,741
Jones (Edward D.) & Co., L.P. 05/06/94 888,859 888,859 931,586
Mack Trust, Inc. 07/14/95 270,458 280,899 289,195
Valero Management Partnership, L.P. 03/04/87 900,000 900,000 1,011,717
----------------------
Total $3,030,006 $3,232,239
======================
</TABLE>
F-9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders
of Allmerica Securities Trust
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments (except for Moody's and S&P Ratings), and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Allmerica Securities Trust, (hereafter referred to as the "Trust") at December
31, 1998, and the results of its operations, the changes in its net assets, and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments at December 31, 1998 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 23, 1999
F-10
<PAGE>
Allmerica Securities Trust
OTHER INFORMATION
- --------------------------------------------------------------------------------
YEAR 2000 (UNAUDITED)
Some computer software cannot distinguish between dates in the year 2000 and
dates in the year 1900 because of the way that dates are encoded and calculated.
The services provided to the Trust by the Manager, Custodian and other external
service providers depend on the proper functioning of their computer software.
Failure to correct or replace any non-compliant software could adversely affect,
among other things, the handling of securities trades, the payment of interest
and dividends, the pricing of the Trust's securities and of the Trust's shares,
and account services. The Trust has requested information from its service
providers with respect to their plans to be Year 2000 compliant. The Trust has
been advised by its service providers that they either are Year 2000 compliant
now or expect to be compliant prior to December 31, 1999. However, there can be
no guarantee that the Trust's operations will not be adversely affected by non-
compliant computer systems of its service providers or other third parties which
interact with such service providers.
QUARTERLY DATA (UNAUDITED):
<TABLE>
<CAPTION>
NET REALIZED AND NET INCREASE (DECREASE)
NET INVESTMENT UNREALIZED GAINS (LOSSES) IN NET ASSETS RESULTING
INCOME ON INVESTMENTS FROM OPERATIONS
-------------- ------------------------- -----------------------
TOTAL
QUARTERLY INVESTMENT PER PER PER
PERIOD INCOME AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1996
3/31/96 2,005,042 1,816,051 0.211 (3,493,629) (0.406) (1,677,578) (0.195)
6/30/96 1,997,565 1,859,532 0.217 (856,366) (0.100) 1,003,166 0.117
9/30/96 1,996,408 1,795,479 0.209 467,738 0.054 2,263,217 0.263
12/31/96 1,977,684 1,771,031 0.206 1,682,287 0.196 3,453,318 0.402
1997
3/31/97 1,985,192 1,767,212 0.205 (1,936,148) (0.224) (168,936) (0.019)
6/30/97 1,990,451 1,828,065 0.213 1,985,637 0.231 3,813,702 0.444
9/30/97 1,968,825 1,792,484 0.209 2,067,555 0.241 3,860,039 0.450
12/31/97 1,965,209 1,807,165 0.210 1,342,248 0.155 3,149,413 0.365
1998
3/31/98 1,925,568 1,767,120 0.205 440,123 0.051 2,207,243 0.256
6/30/98 1,944,939 1,733,494 0.202 1,077,765 0.126 2,811,259 0.328
9/30/98 1,927,559 1,738,387 0.203 1,253,393 0.146 2,991,780 0.349
12/31/98 1,910,356 1,718,969 0.200 (1,399,626) (0.163) 319,343 0.037
</TABLE>
F-11
<PAGE>
Allmerica Securities Trust
REGULATORY DISCLOSURES (UNAUDITED)
The performance data quoted represents past performance and the investment
return and principal value of an investment will fluctuate so that an investor's
shares, when sold may be worth more or less than their original cost.
This report is authorized for distribution to existing shareholders of Allmerica
Securities Trust.
SHAREHOLDER TAX INFORMATION
The portion of the Trust dividends that was derived from U.S. Government
obligations in 1998 and may be exempt from state income taxation is 12.83%. The
states of California, Connecticut, New York, and New Jersey have exclusionary
provisions, however, each of these states has a threshold requirement that must
be met before the exclusion applies. During 1998, the level of exempt income
did not meet these thresholds and the exclusion does not apply. All other
states and the District of Columbia do not tax dividends attributable to U.S.
Government obligations within the Trust.
Certain states also require, for intangible tax reporting purposes, the
reporting of the percentage of assets invested in either state specific or state
specific and federal obligations. The percentage applicable to the states of
Florida, Kansas, Kentucky, Michigan and North Carolina is 16.882%. The
percentage applicable to the state of West Virginia is 0.00%.
SHAREHOLDER INFORMATION
AUTOMATIC DIVIDEND INVESTMENT PLAN: As a shareholder, you may participate in
the Trust's Automatic Dividend Investment Plan. Under the plan, dividends and
other distributions are automatically invested in additional full and fractional
shares of the Trust to be held on deposit in your account. Such dividends and
other distributions are invested at the net asset value if lower than market
price plus brokerage commission or, if higher, at the market price plus
brokerage commission. You will receive a statement after each payment date for a
dividend or other distribution that will show the details of the transaction and
the status of your account. You may terminate or rejoin the plan at any time.
CASH INVESTMENT PLAN: The cash investment plan provides a systematic,
convenient and inexpensive means to increase your investment in the Trust by
putting your cash to work. The plan permits you to invest amounts ranging from
$25 to $1,000 in any one month to purchase additional shares of the Trust.
Regular monthy invesment is not required.
Your funds are consolidated with funds of other participants to purchase shares.
Shares are purchased in bulk and you realize the commission savings. You pay
only a service charge of $1.00 per transaction and your proportionate share of
the brokerage commission.
Your account will be credited with full and fractional shares purchased.
Following each investment, you will receive a statement showing the details of
the transaction and the current status of the account. The plan is voluntary and
you may terminate at any time.
F-12
<PAGE>
[LOGO OF ALLMERICA APPEARS HERE]
First Allmerica Financial Life Insurance Company . Allmerica Financial Life
Insurance and Annuity Company (licensed in all states except NY)
Allmerica Trust Company, N.A. . Allmerica Investments, Inc. . Allmerica
Investment Management Company, Inc.
The Hanover Insurance Company . AMGRO, Inc. . Allmerica Financial Alliance
Insurance Company
Allmerica Asset Management, Inc. . Allmerica Financial Benefit Insurance Company
. Sterling Risk Management Services, Inc.
Citizens Corporation . Citizens Insurance Company of America . Citizens
Management Inc.
440 Lincoln Street, Worcester, Massachusetts 01653
