ANNUITY INVESTORS[SERVICEMARK] VARIABLE ACCOUNT A
OF
ANNUITY INVESTORS[SERVICEMARK] LIFE INSURANCE COMPANY
FOR
THE COMMODORE[SERVICEMARK] VARIABLE ANNUITIES
THE COMMODORE THE COMMODORE
NAUTICUS[REGISTERED TRADEMARK] AMERICUS[SERVICEMARK]
JUNE 30, 1997
SEMIANNUAL REPORT TO CONTRACT OWNERS
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SEMIANNUAL REPORT TO CONTRACT OWNERS
JUNE 30, 1997
TABLE OF CONTENTS PAGE
LETTER FROM THE PRESIDENT 7
DREYFUS CORPORATION
DREYFUS VARIABLE INVESTMENT FUND CAPITAL APPRECIATION PORTFOLIO
Letter to Shareholders 12
Statement of Investments 14
Statement of Assets and Liabilities 17
Statement of Operations 18
Statement of Changes in Net Assets 19
Financial Highlights 20
Notes to Financial Statements 21
DREYFUS VARIABLE INVESTMENT FUND GROWTH AND INCOME PORTFOLIO
Letter to Shareholders 24
Statement of Investments 27
Statement of Assets and Liabilities 31
Statement of Operations 32
Statement of Changes in Net Assets 33
Financial Highlights 34
Notes to Financial Statements 35
DREYFUS VARIABLE INVESTMENT FUND SMALL CAP PORTFOLIO
Letter to Shareholders 40
Statement of Investments 43
Statement of Assets and Liabilities 47
Statement of Operations 48
Statement of Changes in Net Assets 49
Financial Highlights 50
Notes to Financial Statements 51
THE DREYFUS SOCIALLY RESPONSIBILITY GROWTH FUND, INC.
Letter to Shareholders 56
Statement of Investments 59
Statement of Assets and Liabilities 61
Statement of Operations 62
Statement of Changes in Net Assets 63
Financial Highlights 64
Notes to Financial Statements 65
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TABLE OF CONTENTS PAGE
DREYFUS STOCK INDEX FUND
Letter to Shareholders 68
Statement of Investments 70
Statement of Financial Futures 76
Statement of Assets and Liabilities 77
Statement of Operations 78
Statement of Changes in Net Assets 79
Financial Highlights 80
Notes to Financial Statements 81
JANUS CAPITAL CORPORATION
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
Performance 83
Stock Highlights 83
Portfolio Strategy 83
Schedule of Investments 84
Summary of Investment by Country 85
Forward Currency Contracts 85
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
Performance 86
Stock Highlights 86
Global Strategy 86
Schedule of Investments 87
Summary of Investment by Country 87
Forward Currency Contracts 91
JANUS ASPEN BALANCED PORTFOLIO
Portfolio Performance 92
Portfolio Highlights 92
Current Outlook 92
Schedule of Investments 93
Summary of Investments by Country 95
Forward Currency Contracts 95
JANUS ASPEN SHORT-TERM BOND PORTFOLIO
Performance Review 96
Portfolio Strategy 96
Looking Ahead 96
Schedule of Investments 97
STATEMENT OF ASSET AND LIABILITIES 99
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Short-Term Bond Portfolio
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TABLE OF CONTENTS PAGE
STATEMENT OF OPERATIONS 99
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Short-Term Bond Portfolio
STATEMENTS OF CHANGES IN NET ASSETS 101
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Short-Term Bond Portfolio
FINANCIAL HIGHLIGHTS - INSTITUTIONAL SHARES 103
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Short-Term Bond Portfolio
FINANCIAL HIGHLIGHTS - RETIREMENT SHARES 104
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Short-Term Bond Portfolio
NOTES TO FINANCIAL STATEMENTS 105
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - BASIC
VALUE FOCUS FUND
Letter to Shareholders 110
Schedule of Investments 112
Statement of Assets and Liabilities 114
Statement of Operations 115
Statements of Changes in Net Assets 116
Financial Highlights 117
Notes to Financial Statements 118
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - DOMESTIC
MONEY MARKET FUND
Letter to Shareholders 120
Schedule of Investments 121
Statements of Assets and Liabilities 123
Statement of Operations 124
Statements of Changes in Net Assets 125
Financial Highlights 126
Notes to Financial Statements 127
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TABLE OF CONTENTS PAGE
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - GLOBAL
STRATEGY FOCUS FUND
Letter to Shareholders 128
Schedule of Investments 130
Statement of Assets and Liabilities 136
Statement of Operations 137
Statements of Changes in Net Assets 138
Financial Highlights 139
Notes to Financial Statements 140
MERRILL LYNCH SERIES FUNDS, INC. - HIGH CURRENT INCOME FUND
Letter to Shareholders 143
Schedule of Investments 145
Statement of Assets and Liabilities 152
Statement of Operations 153
Statement of Changes in Net Assets 154
Financial Highlights 155
Notes to Financial Statements 156
MORGAN STANLEY UNIVERSAL FUNDS INC.
Overview and Statements of Net Assets by Portfolio 161
U.S. REAL ESTATE PORTFOLIO 161
FIXED INCOME PORTFOLIO 183
Statement of Operations 187
Statements of Changes in Net Assets 187
Financial Highlights 192
Notes to Financial Statements 197
Director and Officers 201
PBHG INSURANCE SERIES FUND, INC.
PBHG TECHNOLOGY & COMMUNICATIONS PORTFOLIO
Letter to Shareholders 204
Schedule of Investments 206
Statement of Assets and Liabilities 208
Statement of Operations 209
Statement of Changes in Net Assets 210
Financial Highlights 211
Notes to Financial Statements 212
PBHG GROWTH II PORTFOLIO
Letter to Shareholders 216
Statement of Net Assets 218
Statement of Operations 220
Statement of Changes in Net Assets 221
Financial Highlights 222
Notes to Financial Statements 223
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TABLE OF CONTENTS PAGE
THE STRONG SPECIAL FUND II, INC.
STRONG SPECIAL FUND II, INC.
Investment Review 228
Financial Information
Schedule of Investments in Securities 230
Statement of Assets and Liabilities 232
Statement of Operations 233
Statement of Changes in Net Assets 234
Notes to Financial Statements 235
Financial Highlights 237
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REPORT FROM THE PRESIDENT
Dear Contract Owner:
During the first six months of 1997, Annuity Investors Variable Account A
expanded its investment options from eleven portfolios to seventeen sub-accounts
effective with the new Prospectuses dated May 1, 1997. Deleted from the
investment offerings, also effective May 1, 1997, was the Janus Aspen Series
Short-Term Bond Portfolio due to a lack of sales volume. The seventeen
sub-account investment options are managed by Dreyfus, Janus, Merrill Lynch,
Morgan Stanley, Pilgrim Baxter and Strong.
The semi-annual reports for each of the seventeen portfolios are reprinted in
the following pages. Below are performance results for each sub-account of
Annuity Investors Variable Account A for the 1996 fiscal year and the six month
period ending June 30, 1997. Performance results for sub-accounts added to
Variable Account A effective May 1, 1997 are provided for the period May 1, 1997
to June 30, 1997 only. All performance results are measured by the percentage
change in unit values for the applicable period, net of all mortality, expense
and contract maintenance charges.
Six Months* Year Ending
Ending 6/30/97 December 31, 1996
GLOBAL PORTFOLIO:
Janus Aspen Series Worldwide Growth Portfolio 18.19% 24.94%
AGGRESSIVE GROWTH PORTFOLIOS:
Janus Aspen Series Aggressive Growth Portfolio 2.00% 4.12%
PBHG Insurance Series Fund, Inc. -
PBHG Technology & Communications Fund* 2.99% N/A
Dreyfus VIF Small Cap Portfolio* 12.96% N/A
GROWTH PORTFOLIOS:
PBHG Insurance Series Fund, Inc. -
PBHG Growth II Portfolio* 4.29% N/A
N/A
Strong Special Fund II, Inc. * 9.50% N/A
Dreyfus VIF Capital Appreciation Portfolio 20.04% 21.50%
The Dreyfus Socially Responsible Growth
Fund, Inc. 15.61% 17.23%
Merrill Lynch VSF Basic Value Focus Fund 12.24% 16.70%
Dreyfus Stock Index Fund 19.70% 18.52%
GROWTH AND INCOME PORTFOLIO:
Dreyfus VIF Growth and Income Portfolio * 8.53% N/A
REAL ESTATE PORTFOLIO:
Morgan Stanley Universal Funds Inc. -
U.S. Real Estate Portfolio * 8.81% N/A
BALANCED PORTFOLIOS:
Merrill Lynch VSF Global Strategy Focus Fund 13.90% N/A
Janus Aspen Series Balanced Portfolio 11.63% 12.24%
INCOME PORTFOLIOS:
Merrill Lynch VSF High Current Income Fund 5.48% 7.40%
Morgan Stanley Universal Funds Inc. -
Fixed Income Portfolio* 1.76% N/A
Janus Aspen Series Short-Term Bond Portfolio 2.57% .15%
MONEY MARKET PORTFOLIO:
Merrill Lynch VSF Domestic Money Market Fund 1.65% 1.39%
* Performance results for period May 1, 1997 to June 30, 1997 only
<PAGE>
In the first half of 1997, the stock market, as measured by the Standard &
Poor's 500 Index, showed a 20.6% increase , and the NASDAQ Composite Index
increased by 12.0 % . The bond market, as measured by Lehman Brothers Aggregate
Index, increased by 3.1% over the same period.
Based on the level of professional investment expertise present in each
management company and their dedication to in-depth fundamental research,
Annuity Investors selected Dreyfus, Janus, Merrill Lynch, Morgan Stanley,
Pilgrim Baxter and Strong for inclusion in its Variable Account A effective May
1, 1997. This broad range of investment options allows you the flexibility to
implement your own personal investment strategy and to change your mix of
investments as your objectives change over time.
It gives me great pleasure to present this performance and we look forward to
continuing to serve you in the future.
Sincerely,
Robert A. Adams
President
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ANNUITY INVESTORS[SERVICEMARK] VARIABLE ACCOUNT A
DREYFUS
DREYFUS VARIABLE INVESTMENT FUND - CAPITAL APPRECIATION PORTFOLIO
DREYFUS VARIABLE INVESTMENT FUND - GROWTH & INCOME PORTFOLIO
DREYFUS VARIABLE INVESTMENT FUND - SMALL CAP PORTFOLIO
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
DREYFUS STOCK INDEX FUND
JANUS
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
JANUS ASPEN BALANCED PORTFOLIO
JANUS ASPEN SHORT-TERM BOND PORTFOLIO
MERRILL LYNCH
MERRILL LYNCH VARIABLE SERIES FUND, INC. -BASIC VALUE FOCUS FUND
MERRILL LYNCH VARIABLE SERIES FUND, INC. - DOMESTIC MONEY MARKET FUND
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - GLOBAL STRATEGY FOCUS FUND
MERRILL LYNCH VARIABLE SERIES FUND, INC. - HIGH CURRENT INCOME FUND
MORGAN STANLEY
MORGAN STANLEY UNIVERSAL FUNDS INC. - U.S. REAL ESTATE PORTFOLIO
MORGAN STANLEY UNIVERSAL FUNDS INC. - FIXED INCOME PORTFOLIO
PBHG
PBHG INSURANCE SERIES FUND, INC. - PBHG GROWTH II PORTFOLIO
PBHG INSURANCE SERIES FUND, INC. - PBHG TECHNOLOGY & COMMUNICATIONS PORTFOLIO
STRONG FUNDS
STRONG SPECIAL FUND II, INC.
<PAGE>
The Financial Statements of the following investment companies ("Registrant")
are made a part hereof and incorporated herein:
Registrant 1940 Act Number
- ---------- ---------------
Janus Aspen Series 811-07736
- --Janus Aspen Aggressive Growth Portfolio
- --Janus Aspen Worldwide Growth Portfolio
- --Janus Aspen Balanced Portfolio
- --Janus Aspen Short-Term Bond Portfolio
Dreyfus Variable Investment Fund 811-05125
- --Capital Appreciation Portfolio
- --Growth & Income Portfolio
- --Small Cap Portfolio
The Dreyfus Socially Responsible Growth Fund, Inc. 811-07044
Dreyfus Stock Index Fund 811-05719
Merrill Lynch Variable Series Fund, Inc. 811-03290
- --Basic Value Focus Fund
- --Global Strategy Focus Fund
- --High Current Income Fund
- --Domestic Money Market Fund
Morgan Stanley Universal Funds, Inc. 811-07607
- --U.S. Real Estate Portfolio
- --Fixed Income Portfolio
PBHG Insurance Series Fund, Inc. 811-08009
- --PBHG Growth II Portfolio
- --PBHG Technology & Communications Portfolio
Strong Special Fund II, Inc. 811-06552
<PAGE>
ANNUITY INVESTORS[SERVICEMARK] VARIABLE ACCOUNT A
Annuity Investors Life Insurance Company UNDERWRITTEN AND
P.O. Box 5423 DISTRIBUTED BY:
Cincinnati, Ohio 45201-5423 American Annuity Group
AAG Securities, Inc.
Member NASD
250 East Fifth Street
Cincinnati. Ohio 45202
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
DIRECTORS
ROBERT ALLEN ADAMS
President of Annuity Investors Life Insurance Company[REGISTERED TRADEMARK] and
President of Great American[REGISTERED TRADEMARK] Life Insurance Company
STEPHEN CRAIG LINDNER
President of American Annuity Groups[SERVICEMARK]
WILLIAM JACK MANEY II
Senior Vice President, Treasurer and Chief Financial Officer of American
Annuity Group
JAMES MICHAEL MORTENSEN
Executive Vice President of Annuity Investors Life Insurance Company and
Executive Vice President of Great American Life Insurance Company
MARK FRANCIS MUETHING
Senior Vice President, General Counsel and Secretary of American Annuity Group
JEFFREY SCOTT TATE
Senior Vice President of American Annuity Group
OFFICERS
ROBERT ALLEN ADAMS President
JAMES MICHAEL MORTENSEN Executive Vice President & Secretary
THOMAS KEVIN LIGUZINSKI Senior Vice President
MARK FRANCIS MUETHING Senior Vice President, General Counsel &
Secretary
MICHAEL JOSEPH O'CONNOR Senior Vice President & Chief Actuary
CHARLES KENT MCMANUS Senior Vice President
ROBERT EUGENE ALLEN Vice President & Treasurer
ARTHUR RONALD GREENE III Vice President
BETTY MARIE KASPROWICZ Vice President & Assistant Secretary
DAVID H. SHIPLEY Vice President
LYNN E. LASWELL Assistant Vice President & Assistant
Treasurer
WILLIAM JACK MANEY II Assistant Treasurer
THOMAS E. MISCHELL Assistant Treasurer
Semi-annual Report - AILIC
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Annuity Investors Life Insurance Company[REGISTERED TRADEMARK]
P. O. Box 5423
Cincinnati, Ohio 45201-5423
1-800-789-6771
ANNUITY INVESTORS[SERVICEMARK]
VARIABLE ACCOUNT A
OF
ANNUITY INVESTORS[SERVICEMARK] LIFE INSURANCE COMPANY
FOR
THE COMMODORE VARIABLE ANNUITIES
JUNE 30, 1997
SEMIANNUAL REPORT TO CONTRACT OWNERS
This report is for the information of the contract owners and participants of
the Annuity Investors Life Insurance Company and the Annuity Investors Variable
Account A. It is authorized for distribution to other persons only when preceded
or accompanied by a current prospectus which contains complete information,
including charges and expenses.
