Annuity Investors (Registered)Variable Account A
of
Annuity Investors Logo
for
[commodore logo]
1
The Commodore The Commodore
Nauticus (registered) Americus (Registered)
December 31, 1999
Annual Report to Contract Owners
<PAGE>
Table of Contents
Page
Letter from the President.......................................... 2
Tab
Annuity Investors Variable Account A-Financial Statements......... I
Portfolio Annual Reports
Bankers Trust Company.............................................. II
EAFE(R) Equity Index Fund
Equity 500 Index Fund
Small Cap Index Fund
Janus Aspen Series................................................. III
Aggressive Growth Portfolio
Worldwide Growth Portfolio
Capital Appreciation Portfolio
Balanced Portfolio
Dreyfus Portfolios................................................. IV
Dreyfus Variable Investment Fund
Small Cap Portfolio
Capital Appreciation Portfolio
Growth and Income Portfolio
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Stock Index Fund
Merrill Lynch Variable Series Funds, Inc........................... V
Basic Value Focus Fund
Domestic Money Market Fund
Global Strategy Focus Fund
High Current Income Fund
PBHG Insurance Series Fund, Inc.................................... VI
PBHG Technology & Communications Portfolio
PBHG Growth II Portfolio
Strong Opportunity Fund II, Inc.................................... VII
Morgan Stanley Dean Witter Universal Funds, Inc....................VIII
U.S. Real Estate Portfolio
Fixed Income Portfolio
1
<PAGE>
Dear Commodore Contract Owner:
I am pleased to present you with the December 31, 1999 Financial Statements
of Annuity Investors(R) Variable Account A, and the 1999 Annual Reports for each
of the Portfolios offered through the sub-accounts of Annuity Investors Variable
Account A. The Portfolios are managed by leading investment advisors such as
Janus Capital Corporation, The Dreyfus Corporation, Bankers Trust Company,
Merrill Lynch Asset Management, L.P., Morgan Stanley Dean Witter Investment
Management Inc., Pilgrim Baxter & Associates, Ltd. and Strong Capital
Management, Inc. The broad range of investment options offered under your
Contract allows you the flexibility to implement your own personal investment
strategy and to change your mix of investments as your objectives change over
time.
In 1999, the stock market, as measured by the Standard & Poor's Composite
Stock 500 Index, showed a 21.04% increase and the NYSE Composite Index increased
by 9.15%. The bond market, as measured by Lehman Brothers Aggregate Bond Index,
decreased by 0.83% over the same period. The performance of the sub-accounts
offered under your Contract compared favorably to the performance of these
indices, as shown by the average annual total return for the period January 1,
1999 to December 31, 1999, below.*
Janus A.S.-Aggressive Growth Portfolio 122.63%
Janus A.S.-Worldwide Growth Portfolio 62.42%
Janus A.S.-Capital Appreciation Portfolio 64.94%
Janus A.S.-Balanced Portfolio 25.19%
Dreyfus V.I.F.-Small Cap Portfolio 21.63%
Dreyfus V.I.F.-Capital Appreciation Portfolio 10.08%
Dreyfus V.I.F.-Growth and Income Portfolio 15.44%
The Dreyfus Socially Responsible Growth Fund, Inc. 28.47%
Dreyfus Stock Index Fund 19.12%
BT Insurance Funds Trust-Small Cap Index Fund 18.68%
BT Insurance Funds Trust-EAFE(R)Equity Index Fund 26.03%
BT Insurance Funds Trust-Equity 500 Index Fund 18.90%
Strong Opportunity Fund II, Inc. 33.24%
Merrill Lynch V.S.F.-Basic Value Focus Fund 19.62%
Merrill Lynch V.S.F.-Global Strategy Focus Fund 19.87%
Merrill Lynch V.S.F.-High Current Income Fund 4.64%
Merrill Lynch V.S.F.-Domestic Money Market Fund 2.66%
Morgan Stanley Dean Witter Universal Funds, Inc.
-U.S. Real Estate Portfolio -2.69%
Morgan Stanley Dean Witter Universal Funds, Inc.
-Fixed Income Portfolio -2.84%
PBHG Insurance Series Fund, Inc.
-PBHG Technology & Communications Portfolio 230.26%
PBHG Insurance Series Fund, Inc.
-PBHG Growth II Portfolio 95.75%
*Performance figures are net of all sub-account charges, but do
not reflect contingent deferred sales charges and contract
maintenance fees.
I, and my colleagues at Annuity Investors Life Insurance Company(R),look
forward to serving you in the future.
Sincerely,
/s/--------------------
Charles R. Scheper
President
2
<PAGE>
ANNUITY INVESTORS
VARIABLE ACCOUNT A
Financial Statements
Year ended December 31, 1999
With Report of Independent Auditors
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
Financial Statements
Year ended December 31, 1999
Contents
Report of Independent Auditors..........................................1
Audited Financial Statements
Statement of Assets and Liabilities - Current Year......................3
Statements of Operations - Current Year.................................5
Statements of Changes in Net Assets - Current Year......................6
Statements of Changes in Net Assets - Prior Year........................9
Notes to Financial Statements..........................................10
<PAGE>
1
Report of Independent Auditors
Contract holders of Annuity Investors Variable Account A
and
Board of Directors of Annuity Investors Life Insurance Company
We have audited the accompanying statement of assets and liabilities of Annuity
Investors Variable Account A (comprising, respectively, the BT Insurance Funds
Trust EAFE Equity Index Fund, BT Insurance Funds Trust Equity 500 Index Fund, BT
Insurance Funds Trust Small Cap Index Fund, Dreyfus Variable Investment Fund
Capital Appreciation Portfolio, Dreyfus Variable Investment Fund Growth and
Income Portfolio, Dreyfus Variable Investment Fund Small Cap Portfolio, Dreyfus
Funds Socially Responsible Growth Fund, Inc., Dreyfus Funds Stock Index Fund,
Janus Aspen Series Aggressive Growth Portfolio, Janus Aspen Series Worldwide
Growth Portfolio, Janus Aspen Series Balanced Portfolio, Janus Aspen Series
Short -Term Bond Portfolio, Janus Aspen Series Capital Appreciation Portfolio,
Merrill Lynch Variable Series Funds, Inc. Basic Value Focus Fund, Merrill Lynch
Variable Series Funds, Inc. Global Strategy Focus Fund, Merrill Lynch Variable
Series Funds, Inc. Domestic Money Market Fund, Morgan Stanley Dean Witter
Universal Funds, Inc. Fixed Income Portfolio, Morgan Stanley Dean Witter
Universal Funds, Inc. U.S. Real Estate Portfolio, PBHG Insurance Series Fund,
Inc. Growth II Portfolio, PBHG Insurance Series Fund, Inc. Technology &
Communications Portfolio and Strong Funds Opportunity Fund II Sub-Accounts) as
of December 31, 1999, and the related statement of operations and changes in net
assets for the periods indicated therein. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of each of the respective
sub-accounts constituting the Annuity Investors Variable Account A at December
31, 1999, and the results of their operations and changes in their net assets
for each of the periods indicated therein, in conformity with accounting
principles generally accepted in the United States.
/s/-----------------------
Ernst & Young LLP
Cincinnati, Ohio
February 7, 2000
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION> Market
Shares Cost Value
----------- ----------- -----------
<S> <C> <C> <C>
Assets:
Investments in portfolio shares, at net asset value (Note 2):
BT Insurance Funds Trust:
EAFE Equity Index Fund..................................... 3,831.201 $ 47,703 $ 52,104
Equity 500 Index Fund...................................... 7,799.456 108,776 118,396
Small Cap Index Fund....................................... 9,346.203 97,758 108,509
Dreyfus Variable Investment Fund:
Capital Appreciation Portfolio ............................ 380,426.206 $12,362,104 $ 15,167,592
Growth and Income Portfolio ............................... 134,378.940 3,009,090 3,423,975
Small Cap Portfolio ....................................... 88,004.589 4,899,980 5,838,224
Dreyfus Funds:
Socially Responsible Growth Fund, Inc. .................... 225,608.067 7,618,297 9,986,608
Stock Index Fund .......................................... 617,321.555 18,529,513 23,736,014
Janus Aspen Series:
Aggressive Growth Portfolio ............................... 253,781.492 6,698,531 15,148,218
Worldwide Growth Portfolio ................................ 686,859.549 18,544,514 32,797,544
Balanced Portfolio ........................................ 1,113,645.880 23,416,688 31,092,993
Capital Appreciation Portfolio............................. 38,843.871 997,880 1,288,451
Merrill Lynch Variable Series Funds, Inc.:
Basic Value Focus Fund .................................... 283,209.280 3,974,494 3,851,646
Global Strategy Focus Fund ................................ 32,564.811 443,652 460,142
High Current Income Fund .................................. 173,537.963 1,852,132 1,664,230
Domestic Money Market Fund ................................ 1,440,114.293 1,440,114 1,440,114
Morgan Stanley Universal Funds, Inc.:
Fixed Income Portfolio .................................... 135,393.795 1,448,943 1,360,708
U.S. Real Estate Portfolio ................................ 90,995.492 932,959 828,969
PBHG Insurance Series Fund, Inc.:
Growth II Portfolio ....................................... 40,153.452 507,530 925,536
Technology & Communications Portfolio ..................... 268,929.910 5,824,665 12,373,465
Strong Funds:
Opportunity Fund II ....................................... 125,778.212 2,717,460 3,268,976
-----------
Total cost............................................................... $115,472,783
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets............................................................................ 164,932,414
Liabilities:
Amounts due to Annuity Investors Life Insurance Company (Note 4)......................................... 0
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets.............................................................................. $164,932,414
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
December 31, 1999
<TABLE>
<CAPTION>
Market
Units Unit Value Value
----------- ------------ -----------
<S> <C> <C> <C>
Net assets attributable to variable annuity contract holders (Note 2):
BT Insurance Funds Trust:
EAFE Equity Index Fund - Basic contract 3,810.276 $ 11.970215 $ 45,610
EAFE Equity Index Fund - Enhanced contract 541.492 11.993794 6,494
Equity 500 Index Fund - Basic contract 10,177.237 10.825867 110,178
Equity 500 Index Fund - Enhanced contract 757.647 10.847192 8,218
Small Cap Index Fund - Basic contract 8,647.306 11.617671 100,461
Small Cap Index Fund - Enhanced contract 691.364 11.640544 8,048
Dreyfus Variable Investment Fund:
Capital Appreciation Portfolio - Basic contract ....................... 636,602.361 22.077832 14,054,800
Capital Appreciation Portfolio - Enhanced contract .................... 49,797.736 22.346248 1,112,792
Growth and Income Portfolio - Basic contract .......................... 219,498.240 14.629800 3,211,215
Growth and Income Portfolio - Enhanced contract ....................... 14,428.292 14.746030 212,760
Small Cap Portfolio - Basic contract .................................. 387,630.477 14.087437 5,460,719
Small Cap Portfolio - Enhanced contract ............................... 26,586.049 14.199368 377,505
Dreyfus Funds:
Socially Responsible Growth Fund, Inc. - Basic contract ............... 343,851.835 24.833578 8,539,072
Socially Responsible Growth Fund, Inc. - Enhanced contract ............ 57,588.637 25.135789 1,447,536
Stock Index Fund - Basic contract ..................................... 924,662.564 23.951750 22,147,287
Stock Index Fund - Enhanced contract .................................. 65,533.674 24.242906 1,588,727
Janus Aspen Series:
Aggressive Growth Portfolio - Basic contract .......................... 396,557.687 36.068642 14,303,298
Aggressive Growth Portfolio - Enhanced contract ....................... 23,143.865 36.507307 844,920
Worldwide Growth Portfolio - Basic contract ........................... 910,884.507 32.558270 29,656,824
Worldwide Growth Portfolio - Enhanced contract ........................ 95,306.242 32.953985 3,140,720
Balanced Portfolio - Basic contract ................................... 1,127,059.575 23.368428 26,337,610
Balanced Portfolio - Enhanced contract ................................ 201,049.216 23.652829 4,755,383
Capital Appreciation Portfolio - Basic contract ....................... 87,500.549 13.247549 1,159,168
Capital Appreciation Portfolio - Enhanced contract..................... 9,739.872 13.273610 129,283
Merrill Lynch Variable Series Funds, Inc.:
Basic Value Focus Fund - Basic contract ............................... 194,136.375 18.631352 3,617,023
Basic Value Focus Fund - Enhanced contract ............................ 12,441.652 18.857875 234,623
Global Strategy Focus Fund - Basic contract ........................... 26,916.938 16.095271 433,236
Global Strategy Focus Fund - Enhanced contract ........................ 1,651.544 16.291055 26,906
High Current Income Fund - Basic contract ............................. 132,170.589 12.209776 1,613,774
High Current Income Fund - Enhanced contract .......................... 4,084.927 12.351694 50,456
Domestic Money Market Fund - Basic contract ........................... 1,221,067.482 1.153121 1,408,038
Domestic Money Market Fund - Enhanced contract ........................ 27,497.780 1.166484 32,076
Morgan Stanley Dean Witter Universal Funds, Inc.:
Fixed Income Portfolio - Basic contract ............................... 99,847.422 11.121384 1,110,442
Fixed Income Portfolio - Enhanced contract ............................ 22,325.689 11.209782 250,266
U.S. Real Estate Portfolio - Basic contract ........................... 75,971.027 10.529927 799,969
U.S. Real Estate Portfolio - Enhanced contract ........................ 2,732.297 10.613648 29,000
PBHG Insurance Series Fund, Inc.:
Growth II Portfolio - Basic contract .................................. 38,048.576 22.299325 848,456
Growth II Portfolio - Enhanced contract ............................... 3,429.359 22.476404 77,080
Technology & Communications Portfolio - Basic contract ................ 251,774.582 44.519838 11,208,963
Technology & Communications Portfolio - Enhanced contract ............. 25,951.046 44.873014 1,164,502
Strong Funds:
Opportunity Fund II - Basic contract .................................. 166,404.289 18.396025 3,061,178
Opportunity Fund II - Enhanced contract ............................... 11,206.830 18.542097 207,798
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable annuity contract holders....................................... 164,932,414
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets......................................................................................... $ 164,932,414
==================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
BT Insurance Funds Trust
--------------------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
==================================================================================================================================
<S> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 2,211 $ 1,130 $ 4,074
Expenses:
Mortality and expense risk fees (Note 4) .......................... 162 428 958
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 2,049 702 3,116
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 57 193 8,312
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 4,401 9,620 10,751
- ----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 4,458 9,813 19,063
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 6,507 $ 10,515 $ 22,179
==================================================================================================================================
==================================================================================================================================
Dreyfus Variable Investment Fund
--------------------------------------------------
Growth
Capital and Small
Appreciation Income Cap
Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 139,230 $ 121,958 $ 2,780
Expenses:
Mortality and expense risk fees (Note 4) .......................... 157,051 34,926 56,668
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. (17,821) 87,032 (53,888)
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 297,829 26,751 (19,938)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 937,839 315,499 1,063,698
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 1,235,668 342,250 1,043,760
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 1,217,847 $ 429,282 $ 989,872
===================================================================================================================================
<PAGE>
<CAPTION>
==================================================================================================================================
Dreyfus Funds
--------------------------------
Socially
Responsible Stock
Growth Index
Fund, Inc. Fund
================================================================================================================
<S> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 334,708 $ 401,494
Expenses:
Mortality and expense risk fees (Note 4) .......................... 90,012 242,666
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 244,696 158,828
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 150,790 429,799
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 1,566,874 2,861,998
- ----------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 1,717,664 3,291,797
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 1,962,360 $ 3,450,625
================================================================================================================
====================================================================================================================================
Janus Aspen Series
----------------------------------------------------------
Aggressive Worldwide Capital
Growth Growth Balanced Appreciation
Portfolio Portfolio Portfolio Portfolio*
====================================================================================================================================
<S> <C> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 286,294 $ 37,635 $ 573,864 $ 2,458
Expenses:
Mortality and expense risk fees (Note 4) .......................... 114,366 281,263 287,442 4,255
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 171,928 (243,628) 286,422 (1,797)
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 386,728 424,671 407,891 11,911
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 7,080,176 11,844,797 4,702,529 290,572
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 7,466,904 12,269,468 5,110,420 302,483
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 7,638,832 $12,025,840 $ 5,396,842 $ 300,686
====================================================================================================================================
====================================================================================================================================
Merrill Lynch Variable Series Funds, Inc.
---------------------------------------------------------
Basic Global High Domestic
Value Strategy Current Money
Focus Focus Income Market
Fund Fund Fund Fund
====================================================================================================================================
<S> <C> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 732,724 $ 58,449 $ 172,513 $ 60,062
Expenses:
Mortality and expense risk fees (Note 4) .......................... 42,425 4,560 19,440 20,925
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 690,299 53,889 153,073 39,137
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 6,726 (9,522) (55,124) 0
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (134,332) 27,687 (27,280) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... (127,606) 18,165 (82,404) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 562,693 $ 72,054 $ 70,669 $ 39,137
====================================================================================================================================
<PAGE>
<CAPTION>
====================================================================================================================================
Morgan Stanley PBHG Insurance
Universal Funds, Inc. Series Fund, Inc.
---------------------------------------------------------
U.S. Technology
Fixed Real Growth and
Income Estate II Communications
Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 65,188 $ 45,055 $ 0 $ 0
Expenses:
Mortality and expense risk fees (Note 4) .......................... 14,817 9,559 6,988 69,699
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 50,371 35,496 (6,988) (69,699)
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares (13,990) (16,942) 11,405 1,006,192
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (72,679) (46,204) 400,492 6,228,179
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... (86,669) (63,146) 411,897 7,234,371
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ (36,298) $ (27,650) $ 404,909 $ 7,164,672
====================================================================================================================================
<CAPTION>
===================================================================================================================================
Strong
Funds
------------
Opportunity
Fund
II Total
===================================================================================================================
<S> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 236,476 $ 3,278,303
Expenses:
Mortality and expense risk fees (Note 4) .......................... 31,673 1,490,283
- -------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 204,803 1,788,020
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 15,688 3,069,427
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 515,792 37,580,409
- -------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 531,480 40,649,836
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 736,283 $42,437,856
===================================================================================================================
</TABLE>
*For the period May1, 1999 (commencement of operations) to december 31, 1999
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
===================================================================================================================================
BT Insurance Funds Trust
---------------------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
===================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 2,049 $ 702 $ 3,116
Net realized gain (loss) on sale of investments in portfolio shares 57 193 8,312
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 4,401 9,620 10,751
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 6,507 10,515 22,179
Changes from principal transactions:
Contract purchase payments ........................................ 30,901 63,507 66,533
Contract redemptions .............................................. 0 (1,257) 0
Net transfers (to) from fixed account ............................. 14,696 45,631 19,797
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 45,597 107,881 86,330
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 52,104 118,396 108,509
Net assets, beginning of period ........................................ 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 52,104 $ 118,396 $ 108,509
===================================================================================================================================
===================================================================================================================================
Dreyfus Variable Investment Fund
---------------------------------------------------
Growth
Capital and Small
Appreciation Income Cap
Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (17,821) $ 87,032 $ (53,888)
Net realized gain (loss) on sale of investments in portfolio shares 297,829 26,751 (19,938)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 937,839 315,499 1,063,698
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 1,217,847 429,282 989,872
Changes from principal transactions:
Contract purchase payments ........................................ 5,003,811 1,105,038 2,032,391
Contract redemptions .............................................. (584,137) (175,035) (251,049)
Net transfers (to) from fixed account ............................. 189,428 (30,194) (61,025)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 4,609,102 899,809 1,720,317
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 5,826,949 1,329,091 2,710,189
Net assets, beginning of period ........................................ 9,340,643 2,094,884 3,128,035
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 15,167,592 $ 3,423,975 $ 5,838,224
===================================================================================================================================
<PAGE>
<CAPTION>
===================================================================================================================================
Dreyfus Funds
--------------------------------
Socially
Responsible Stock
Growth Index
Fund, Inc. Fund
================================================================================================================
<S> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 244,696 $ 158,828
Net realized gain (loss) on sale of investments in portfolio shares 150,790 429,799
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 1,566,874 2,861,998
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 1,962,360 3,450,625
Changes from principal transactions:
Contract purchase payments ........................................ 3,231,702 7,139,341
Contract redemptions .............................................. (342,650) (964,103)
Net transfers (to) from fixed account ............................. 578,698 78,571
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 3,467,750 6,253,809
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 5,430,110 9,704,434
Net assets, beginning of period ........................................ 4,556,498 14,031,580
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 9,986,608 $ 23,736,014
================================================================================================================
<CAPTION>
===================================================================================================================================
Janus Aspen Series
---------------------------------------------------------------
Aggressive Worldwide Capital
Growth Growth Balanced Appreciation
Portfolio Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ................................. $ 171,928 $ (243,628) $ 286,422 $ (1,797)
Net realized gain (loss) on sale of investments in
portfolio shares ........................................ 386,728 424,671 407,891 11,911
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares ......................... 7,080,176 11,844,797 4,702,529 290,572
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... 7,638,832 12,025,840 5,396,842 300,686
Changes from principal transactions:
Contract purchase payments ................................... 2,541,319 7,077,425 9,665,256 423,543
Contract redemptions ......................................... (397,854) (1,026,936) (1,405,476) (10,601)
Net transfers (to) from fixed account ........................ 839,802 619,258 2,926,031 574,823
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions .. 2,983,267 6,669,747 11,185,811 987,765
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets ......................... 10,622,099 18,695,587 16,582,653 1,288,451
Net assets, beginning of period ................................... 4,526,119 14,101,957 14,510,340 0
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ......................................... $ 15,148,218 $ 32,797,544 $ 31,092,993 $ 1,288,451
===================================================================================================================================
<PAGE>
<CAPTION>
====================================================================================================================================
Merrill Lynch Variable Series Funds, Inc.
---------------------------------------------------------
Basic Global High Domestic
Value Strategy Current Money
Focus Focus Income Market
Fund Fund Fund Fund
===================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 690,299 $ 53,889 $ 153,073 $ 39,137
Net realized gain (loss) on sale of investments in portfolio shares (6,726) (9,522) (55,124) 0
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (134,332) 27,687 (27,280) 0
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 562,693 72,054 70,669 39,137
Changes from principal transactions:
Contract purchase payments ........................................ 1,114,426 106,655 359,410 1,020,687
Contract redemptions .............................................. (158,125) (21,890) (73,744) (110,314)
Net transfers (to) from fixed account ............................. (187,654) (51,177) (135,388) (507,341)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 768,647 33,588 150,278 403,032
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 1,331,340 105,642 220,947 442,169
Net assets, beginning of period ........................................ 2,520,306 354,500 1,443,283 997,945
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 3,851,646 $ 460,142 $ 1,664,230 $1,440,114
===================================================================================================================================
<CAPTION>
===================================================================================================================================
Morgan Stanley PBHG Insurance
Universal Funds, Inc. Series Fund, Inc.
--------------------------------------------------------
U.S. Technology
Fixed Real Growth and
Income Estate II Communications
Portfolio Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 50,371 $ 35,496 $ (6,988) $ (69,699)
Net realized gain (loss) on sale of investments in portfolio shares (13,990) (16,942) 11,405 1,006,192
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (72,679) (46,204) 400,492 6,228,179
Net increase (decrease) in net assets from operations ........ (36,298) (27,650) 404,909 7,164,672
Changes from principal transactions:
Contract purchase payments ........................................ 634,154 269,084 162,678 1,824,129
Contract redemptions .............................................. (118,652) (58,208) (31,695) (146,246)
Net transfers (to) from fixed account ............................. 99,593 (19,321) 69,837 1,982,037
Net increase in net assets from principal transactions ....... 615,095 191,555 200,820 3,659,920
Net increase in net assets .............................. 578,797 163,905 605,729 10,824,592
Net assets, beginning of period ........................................ 781,911 665,064 319,807 1,548,873
Net assets, end of period .............................................. $ 1,360,708 $ 828,969 $ 925,536 $12,373,465
===================================================================================================================================
<CAPTION>
===================================================================================================================================
Strong
Funds
------------
Opportunity
Fund
II Total
======================================================================================================================
<S> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 204,803 $ 1,788,020
Net realized gain (loss) on sale of investments in portfolio shares 15,688 3,069,427
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 515,792 37,580,409
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 736,283 42,437,856
Changes from principal transactions:
Contract purchase payments ........................................ 967,326 44,839,316
Contract redemptions .............................................. (248,785) (6,126,757)
Net transfers (to) from fixed account ............................. 102,057 7,148,159
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 820,598 45,860,718
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 1,556,881 88,298,574
Net assets, beginning of period ........................................ 1,712,095 76,633,840
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 3,268,976 $164,932,414
======================================================================================================================
</TABLE>
*For the period May 1, 1999 (commencement of operations) to December 31, 1999
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
Dreyfus Variable Investment Fund
----------------------------------------------------
Growth
Capital and Small
Appreciation Income Cap
Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (27,504) $ 17,835 $ 22,943
Net realized gain (loss) on sale of investments in portfolio shares 80,800 (7,622) (18,401)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 1,537,721 124,226 (77,296)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 1,591,017 134,439 (72,754)
Changes from principal transactions:
Contract purchase payments ........................................ 3,493,049 1,319,418 1,968,291
Contract redemptions .............................................. (283,084) (37,005) (62,726)
Net transfers (to) from fixed account ............................. 623,341 117,220 224,657
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 3,833,306 1,399,633 2,130,222
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 5,424,323 1,534,072 2,057,468
Net assets, beginning of period ........................................ 3,916,320 560,812 1,070,567
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 9,340,643 $ 2,094,884 $ 3,128,035
===================================================================================================================================
<CAPTION>
===================================================================================================================================
Dreyfus Funds
--------------------------------
Socially
Responsible Stock
Growth Index
Fund, Inc. Fund
================================================================================================================
<S> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 131,953 $ 42,191
Net realized gain (loss) on sale of investments in portfolio shares 33,516 179,958
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 664,657 1,980,383
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 830,126 2,202,532
Changes from principal transactions:
Contract purchase payments ........................................ 1,499,937 6,196,975
Contract redemptions .............................................. (122,782) (315,162)
Net transfers (to) from fixed account ............................. 254,932 722,941
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 1,632,087 6,604,754
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 2,462,213 8,807,286
Net assets, beginning of period ........................................ 2,094,285 5,224,294
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 4,556,498 $ 14,031,580
================================================================================================================
<PAGE>
<CAPTION>
====================================================================================================================================
Janus Aspen Series
----------------------------------------------------------------
Short-
Aggressive Worldwide Term
Growth Growth Balanced Bond
Portfolio Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ................................. $ (40,580) $ 272,716 $ 334,930 $ 283
Net realized gain (loss) on sale of investments in
portfolio shares ........................................ 29,417 94,500 54,985 (7,029)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares ......................... 1,063,481 1,997,580 2,551,784 7,834
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... 1,052,318 2,364,796 2,941,699 1,088
Changes from principal transactions:
Contract purchase payments ................................... 1,211,114 4,957,213 5,335,110 3,730
Contract redemptions ......................................... (200,425) (384,734) (361,309) (5)
Net transfers (to) from fixed account ........................ (90,308) 413,880 699,782 (70,939)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions .. 920,381 4,986,359 5,673,583 (67,214)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets ......................... 1,972,699 7,351,155 8,615,282 (66,126)
Net assets, beginning of period ................................... 2,553,420 6,750,802 5,895,058 66,126
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ......................................... $ 4,526,119 $ 14,101,957 $ 14,510,340 $ 0
===================================================================================================================================
===================================================================================================================================
Merrill Lynch Variable Series Funds, Inc.
--------------------------------------------------------
Basic Global High Domestic
Value Strategy Current Money
Focus Focus Income Market
Fund Fund Fund Fund
===================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 134,217 $ 34,716 $ 105,219 $ 29,208
Net realized gain (loss) on sale of investments in portfolio shares (837) (2,908) (15,007) 0
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (46,659) (11,851) (162,254) 0
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 86,721 19,957 (72,042) 29,208
Changes from principal transactions:
Contract purchase payments ........................................ 1,501,132 113,474 720,476 1,401,235
Contract redemptions .............................................. (65,000) (9,043) (60,276) (24,217)
Net transfers (to) from fixed account ............................. (15,754) (4,752) 40,846 (1,173,203)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 1,420,378 99,679 701,046 203,815
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 1,507,099 119,636 629,004 233,023
Net assets, beginning of period ........................................ 1,013,207 234,864 814,279 764,922
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 2,520,306 $ 354,500 $ 1,443,283 $ 997,945
===================================================================================================================================
<PAGE>
<CAPTION>
====================================================================================================================================
Morgan Stanley PBHG Insurance
Universal Funds, Inc. Series Fund, Inc.
--------------------------- -------------------------
U.S. Technology
Fixed Real Growth and
Income Estate II Communications
Portfolio Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 31,152 $ 16,236 $ (2,974) $ (11,977)
Net realized gain (loss) on sale of investments in portfolio shares 5,008 (4,878) 596 4,399
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (13,145) (64,725) 22,827 337,130
Net increase (decrease) in net assets from operations ........ 23,015 (53,367) 20,449 329,552
Changes from principal transactions:
Contract purchase payments ........................................ 354,893 455,030 121,131 644,581
Contract redemptions .............................................. (6,605) (11,846) (2,291) (38,053)
Net transfers (to) from fixed account ............................. 333,864 36,326 5,646 81,794
Net increase in net assets from principal transactions ....... 682,152 479,510 124,486 688,322
Net increase in net assets .............................. 705,167 426,143 144,935 1,017,874
Net assets, beginning of period ........................................ 76,744 238,921 174,872 530,999
Net assets, end of period .............................................. $ 781,911 $ 665,064 $ 319,807 $ 1,548,873
===================================================================================================================================
<CAPTION>
=======================================================================================================================
Strong
Funds
------------
Opportunity
Fund
II Total
=======================================================================================================================
<S> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 80,063 $ 1,170,627
Net realized gain (loss) on sale of investments in portfolio shares (3,881) 422,616
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 28,800 9,940,493
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 104,982 11,533,736
Changes from principal transactions:
Contract purchase payments ........................................ 1,062,529 32,359,318
Contract redemptions .............................................. (24,103) (2,008,666)
Net transfers (to) from fixed account ............................. 131,106 2,331,379
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 1,169,532 32,682,031
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 1,274,514 44,215,767
Net assets, beginning of period ........................................ 437,581 32,418,073
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 1,712,095 $ 76,633,840
======================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEAR ENDED DECEMBER 31, 1999
Basic Contracts
<TABLE>
<CAPTION>
===================================================================================================================================
BT Insurance Funds Trust
----------------------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
==================================================================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000
Units purchased 3,810.276 10,331.080 8,647.306
Units redeemed 0.000 (153.843) 0.000
----------- ----------- -----------
Units outstanding December 31, 1999 3,810.276 10,177.237 8,647.306
=========== =========== ===========
==================================================================================================================================
==================================================================================================================================
Dreyfus Variable Investment Fund Dreyfus Funds
------------------------------------------------- ------------------------------
Growth Socially
Capital and Small Responsible Stock
Appreciation Income Cap Growth Index
Portfolio Portfolio Portfolio Fund, Inc. Fund
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 445,340.210 153,859.242 256,140.224 229,710.625 665,996.241
Units purchased 217,121.521 79,738.069 153,642.007 128,882.124 306,191.129
Units redeemed (25,859.370) (14,099.071) (22,151.754) (14,740.914) (47,524.806)
----------- ----------- ----------- ----------- -----------
Units outstanding December 31, 1999 636,602.361 219,498.240 387,630.477 343,851.835 924,662.564
=========== =========== =========== =========== ===========
==================================================================================================================================
<CAPTION>
==================================================================================================================================
Janus Aspen Series
-------------------------------------------------------------------
Aggressive Worldwide Capital
Growth Growth Balanced Appreciation
Portfolio Portfolio Portfolio Portfolio*
==================================================================================================================================
<S> <C> <C> <C> <C>
Units outstanding, December 31, 1998 276,028.214 689,148.869 765,170.784 0.000
Units purchased 137,108.637 264,930.013 425,009.063 87,758.737
Units redeemed (16,579.164) (43,194.375) (63,120.272) (258.188)
----------- ----------- ----------- -----------
Units outstanding December 31, 1999 396,557.687 910,884.507 1,127,059.575 87,500.549
=========== =========== =========== ===========
===============================================================================================================
<PAGE>
<CAPTION>
===================================================================================================================================
Merrill Lynch Variable Series Funds, Inc.
--------------------------------------------------------------------
Basic Global High Domestic
Value Strategy Current Money
Focus Focus Income Market
Fund Fund Fund Fund
===============================================================================================================
<S> <C> <C> <C> <C>
Units outstanding, December 31, 1997 154,675.988 25,160.717 119,716.657 876,845.270
Units purchased 59,353.126 6,745.277 29,377.214 873,314.568
Units redeemed (19,892.739) (4,989.056) (16,923.282) (529,092.356)
------------- ------------- ------------- -------------
Units outstanding December 31, 1998 194,136.375 26,916.938 132,170.589 1,221,067.482
============= ============= ============= =============
==================================================================================================================================
==================================================================================================================================
<CAPTION>
Morgan Stanley PBHG Insurance Strong
Universal Funds, Inc. Series Fund, Inc. Funds
------------------------------ ------------------------------------------------
U.S. Technology
Fixed Real Growth and Opportunity
Income Estate II Communications Fund
Portfolio Portfolio Portfolio Portfolio II
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 67,599.236 61,094.222 27,306.830 112,549.063 120,817.718
Units purchased 50,426.949 22,075.300 12,913.485 145,514.537 60,905.113
Units redeemed (18,178.763) (7,198.495) (2,171.739) (6,289.018) (15,318.542)
------------- ------------ ------------- ------------- -------------
Units outstanding December 31, 1999 99,847.422 75,971.027 38,048.576 251,774.582 166,404.289
============= ============ ============= ============= =============
==================================================================================================================================
</TABLE>
*For the period May 1, 1999 (commencement of operations to december 31, 1999
The accompanying notes are an integral part of these financial statements.
-9-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEAR ENDED DECEMBER 31, 1998
Enhanced Contracts
<TABLE>
<CAPTION>
==================================================================================================================================
BT Insurance Funds Trust
--------------------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
============================================================================================
=============================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000
Units purchased 541.551 757.647 691.364
Units redeemed (0.059) 0.000 0.000
----------- ----------- -----------
Units outstanding December 31, 1999 541.492 757.647 691.364
=========== =========== ===========
==================================================================================================================================
==================================================================================================================================
Dreyfus Variable Investment Fund Dreyfus Funds
---------------------------------------------- ---------------------------
Growth Socially
Capital and Small Responsible Stock
Appreciation Income Cap Growth Index
Portfolio Portfolio Portfolio Fund, Inc. Fund
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 20,198.098 11,391.202 13,863.364 5,962.423 31,533.165
Units purchased 31,665.501 4,532.669 16,329.526 53,033.972 35,819.180
Units redeemed (2,065.863) (1,495.579) (3,606.841) (1,407.758) (1,818.671)
---------- ---------- ---------- ---------- ----------
Units outstanding December 31, 1999 49,797.736 14,428.292 26,586.049 57,588.637 65,533.674
========== ========== ========== ========== ==========
==================================================================================================================================
<CAPTION>
==================================================================================================================================
Janus Aspen Series
--------------------------------------------------------------------
Aggressive Worldwide Capital
Growth Growth Balanced Appreciation
Portfolio Portfolio Portfolio Portfolio*
===============================================================================================================
<S> <C> <C> <C> <C>
Units outstanding, December 31, 1998 3,311.189 14,225.653 12,092.854 0.000
Units purchased 20,689.190 84,333.217 193,959.191 10,673.619
Units redeemed (856.514) (3,252.628) (5,002.829) (933.747)
---------- ---------- ---------- -----------
Units outstanding December 31, 1999 23,143.865 95,306.242 201,049.216 9,739.872
========== ========== =========== ==========
===========================================================================================================
<PAGE>
<CAPTION>
==================================================================================================================================
Merrill Lynch Variable Series Funds, Inc.
----------------------------------------------------------------
Basic Global High Domestic
Value Strategy Current Money
Focus Focus Income Market
Fund Fund Fund Fund
===========================================================================================================
<S> <C> <C> <C> <C>
Units outstanding, December 31, 1998 7,075.336 1,230.646 3,945.423 15,490.877
Units purchased 5,615.939 824.733 955.030 26,606.247
Units redeemed (249.623) (403.835) (815.526) (14,599.344)
---------- ---------- ---------- ----------
Units outstanding December 31, 1999 12,441.652 1,651.544 4,084.927 27,497.780
========== ========== ========== ==========
==================================================================================================================================
<CAPTION>
==================================================================================================================================
Morgan Stanley PBHG Insurance Strong
Universal Funds, Inc. Series Fund, Inc. Funds
---------------------------- ------------------------------ -----------
U.S. Technology
Fixed Real Growth and Opportunity
Income Estate II Communications Fund
Portfolio Portfolio Portfolio Portfolio II
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 706.067 365.320 763.702 2,340.838 3,173.858
Units purchased 22,764.255 2,782.115 2,806.089 23,756.398 8,268.358
Units redeemed (1,144.633) (415.138) (140.432) (146.190) (235.386)
---------- ---------- ---------- ---------- ---------
Units outstanding December 31, 1999 22,325.689 2,732.297 3,429.359 25,951.046 11,206.830
========== ========== ========== ========== =========
============================================================================================================================
</TABLE>
*For the period May 1, 1999 (commencement of operations) to December 31, 1999
The accompanying notes are an integral part of these financial statements.
-10-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
(1) GENERAL
Annuity Investors Variable Account A (the"Account") is registered
under the Investment Company Act of 1940, as amended, as a unit investment
trust. The Account was established on May 26, 1995 and commenced operations
on December 7, 1995 as a segregated investment account for individual and
group variable annuity contracts which are registered under the Securities
Act of 1933. The operations of the Account are included in the operations
of Annuity Investors Life Insurance Company (the "Company") pursuant to the
provisions of the Ohio Insurance Code. The Company is an indirect wholly
owned subsidiary of American Annuity Group, Inc., ("AAG"), a publicly
traded insurance holding company listed on the New York Stock Exchange. The
Company is licensed in 47 states.
At December 31, 1999, the following investment options were available:
BT Insurance Funds Trust:
o EAFE Equity Index Fund
o Equity 500 Index Fund
o Small Cap Index Fund
The Dreyfus Variable Investment Fund:
o Capital Appreciation Portfolio
o Growth and Income Portfolio
o Small Cap Portfolio
Dreyfus Funds:
o Socially Responsible Growth Fund, Inc.
o Stock Index Fund
Janus Aspen Series:
o Aggressive Growth Portfolio
o Worldwide Growth Portfolio
o Balanced Portfolio
o Capital Appreciation Portfolio
Merrill Lynch Variable Series Funds, Inc.:
o Domestic Money Market Fund
o Basic Value Focus Fund
o Global Strategy Focus Fund
o High Current Income Fund
Morgan Stanley Dean Witter Universal Funds, Inc.:
o Fixed Income Portfolio
o U.S. Real Estate Portfolio
PBHG Insurance Series Fund, Inc.:
o Growth II Portfolio
o Technology & Communications Portfolio
Strong Funds:
o Opportunity Fund II
The following variable sub-accounts were added to the account on May 1, 1999: BT
Insurance Funds Trust EAFE Equity Index Fund, Equity 500 Index Fund, Small Cap
Index Fund; Janus Aspen Series Capital Appreciation Portfolio. No variable
sub-accounts were deleted from the account in 1999.
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The preparation of financial statements in conformity with accounting
principles generally accepted in the united states requires management to
make estimates and assumptions that affect the amount reported in the
financial statements and accompanying notes. Changes in circumstances
could cause actual results to differ materially from those estimates.
Investments
Investments are valued using the net asset value of the respective
portfolios at the end of each business day of the New York Stock Exchange,
with the exception of business holidays. Investment transactions are
accounted for on the trade date (the date the order to buy or sell is
executed). The cost of investments sold is determined on a first-in, first
out basis. The Account does not hold any investments which are restricted
as to resale. Net investment income (loss), net realized gain (loss) and
unrealized appreciation (depreciation) on investments are allocated to the
contracts on each valuation date based on each contrac's pro rata share of
the assets of the Account as of the beginning of the valuation date.
Federal Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of the Account are included in
the total operations of the Company, which is treated as a life insurance
company for federal income tax purposes under Subchapter L of the Internal
Revenue Code. Net investment income (loss) and realized gains (losses)
will be retained in the Account and will not be taxable until received by
the contract owner or beneficiary in the form of annuity payments or other
distributions.
Net Assets Attributeable to Variable Annuity Contract Holders
The variable annuity contract reserves are comprised of net contract
purchase payments less redemptions and benefits. These reserves are
adjusted daily for the net investment income (loss), net realized gain
(loss) and unrealized appreciation (depreciation) on investments.
11
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
(3) PURCHASE AND SALES OF INVESTMENTS IN PORTFOLIO SHARES
The aggregate cost of purchases and proceeds from sales of investments in
all portfolio shares for the year ended December 31, 1999 is as follows:
1999
---------------
Proceeds
Cost of from
Purchases Sales
BT Insurance Funds Trust:
EAFE Equity Index Fund $ 48,394 $ 748
Equity 500 Index Fund 110,960 2,377
Small Cap Index Fund 263,022 173,576
The Dreyfus Variable Investment Fund:
Capital Appreciation Portfolio 5,306,728 715,446
Growth and Income Portfolio 1,294,121 307,280
Small Cap Portfolio 2,117,717 451,288
Dreyfus Funds:
Socially Responsible Growth Fund, Inc. 4,075,787 363,342
Stock Index Fund 7,501,323 1,088,686
Janus Aspen Series:
Aggressive Growth Portfolio 3,819,600 664,405
Worldwide Growth Portfolio 7,260,011 833,892
Balanced Portfolio 12,453,668 981,435
Capital Appreciation Portfolio 1,275,107 289,139
Merrill Lynch Variable Series Funds, Inc.:
Basic Value Focus Fund 1,768,304 309,358
Global Strategy Focus Fund 189,812 102,335
High Current Income Fund 609,776 306,426
Domestic Money Market Fund 3,002,442 2,560,273
Morgan Stanley Dean Witter Universal Funds, Inc.:
Fixed Income Portfolio 1,050,751 385,286
U.S. Real Estate Portfolio 325,368 98,317
PBHG Insurance Series Fund, Inc.:
Growth II Portfolio 242,849 49,017
Technology & Communications Portfolio 5,356,348 1,766,127
Strong Funds:
Opportunity Fund II 1,344,748 319,348
--------- --------
Total $ 59,416,836 $ 11,768,101
========== ==========
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
(4) DEDUCTIONS AND EXPENSES
Although periodic annuitization payments to contract owners vary according
to the investment performance of the sub-accounts, such payments are not
affected by mortality or expense experience because the Company assumes
the mortality risk and expense risk under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment ption in the contracts, in which the Company agrees to make
annuity payments regardless of how long a particular annuitant or the other
payee lives. The annuity payments are determined in accordance with annuity
purchase rate provisions established at the time the contracts are issued.
Based on the actuarial determination of expected mortality, the Company is
required to fund any deficiency in the annuity payment reserves from its
general account assets.
The expense risk assumed by the Company is the risk that the deductions for
sales and administrative expenses may prove insufficient to cover the
actual sales and administrative expenses. Under the Basic Contract, the
Company deducts a fee from the Account each day for assuming the mortality
and expense risks. This fee is equal on an annual basis to 1.25% of the
daily value of the total investments of the Account. These fees aggregated
$1,398,650 for the year ended December 31, 1999.
In connection with certain contracts in which the Company incurs reduced
sales and servicing expenses, such as contracts offered to active
employees of the Company or any of its subsidiaries and/or affiliates, the
Company may offer an Enhanced Contract. Under the Enhanced Contract, the
Company deducts a fee from the Account each day for assuming the mortality
and expense risks. This fee is equal on an annual basis to 0.95% of the
daily value of the total investments of the Account. These fees aggregated
$91,633 for the year ended December 31, 1999.
Pursuant to an administrative agreement between AAG and the Company, AAG
subsidiaries provide sales and administrative services to the Company and
the Account. The Company may deduct a percentage of purchase payments
surrendered to cover sales expenses. The percentage decreases to 0% from
a maximum of 7.0% based upon the number of years the purchase payment has
been held.
In addition, the Company may deduct units from ontracts annually and upon
full surrender to cover a administrative fee of $25 These xpenses totaled
$112,132 for the year ended December 31, 1999.
(5) OTHER TRANSACTIONS WITH AFFILIATES
AAG Securities, Inc., an affiliate of the Company, is the principal
underwriter and performs all variable annuity sales functions on behalf of
the Company.
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
(6) NET ASSETS
The following is a reconciliation of net assets at December 31, 1999:
1999
Proceeds from the sales of units since organization,
less cost of units redeemed $ 108,507,791
Undistributed net investment income 3,416,421
Undistributed net realized gains on sale of investments 3,548,649
Net unrealized appreciation of investments 49,459,553
-----------
Net assets, end of period $ 164,932,414
===========
<PAGE>
The Financial Statements of the following investment companies ("Registrant")
are made a part hereof and incorporated herein:
Registrant 1940 Act Number
Bankers Trust Company 811-07507
EAFE (R) Equity Index Fund
Equity 500 Index Fund
Small Cap Index Fund
Janus Aspen Series 811-07736
Aggressive Growth Portfolio
Capital Appreciation Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
Dreyfus Corporation 811-05125
Dreyfus Variable Investment Fund
Capital Appreciation Portfolio
Growth and Income Portfolio
Small Cap Portfolio
The Dreyfus Socially Responsible Growth Fund, Inc 811-07044
Dreyfus Stock Index Fund 811-05179
Merrill Lynch Variable Series Fund, Inc.
Basic Value Focus Fund
Domestic Money Market
Global Strategy Focus Fund
High Current Income Fund
PBHG Insurance Series Fund, Inc 811-08009
PBHG Growth II Portfolio
PBHG Technology & Communications Portfolio
Strong Opportunity Fund II, Inc. 811-06552
Morgan Stanley Dean Witter Universal Funds, Inc. 811-07607
U.S. Real Estate Portfolio
Fixed Income Portfolio
<PAGE>
Annuity Investors Life Insurance Company(R)
P.O. Box 5423
Cincinnati, Ohio 45201-5423
1-800-789-6771
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.
3244 (2/2000)
