-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q39YhMiN6S0lmMIo5+20iKeWLjtHlXfUUCysR4GbPdcPL4UwNLIrlt0yb06xuhrn jkFHQuIL7QJYwFrWXxPfnQ== 0001016843-98-000074.txt : 19980223 0001016843-98-000074.hdr.sgml : 19980223 ACCESSION NUMBER: 0001016843-98-000074 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980220 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WRL SERIES LIFE ACCOUNT CENTRAL INDEX KEY: 0000778209 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04420 FILM NUMBER: 98545944 BUSINESS ADDRESS: STREET 1: 201 HIGHLAND AVE CITY: LARGO STATE: FL ZIP: 34640 BUSINESS PHONE: 813-587-18 MAIL ADDRESS: STREET 1: 201 HIGHLAND AVENUE CITY: LARGO STATE: FL ZIP: 33770 N-30D 1 WRL Series Life Account Annual Report December 31, 1997 Western Reserve Life Assurance Co. of Ohio February 1998 ACC00003 (2/98) WRL SERIES LIFE ACCOUNT ---------------------------------- REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Western Reserve Life Assurance Co. of Ohio and Policy Owners of the WRL Series Life Account In our opinion, the accompanying statements of assets, liabilities and equity accounts and the related statements of operations and of changes in equity accounts and the selected per unit data and ratios present fairly, in all material respects, the financial position of each of the Sub-Accounts constituting the WRL Series Life Account (a separate account of Western Reserve Life Assurance Co. of Ohio, hereafter referred to as the "Life Account") at December 31, 1997, the results of each of their operations, the changes in each of their equity accounts and the selected per unit data and ratios for each of the periods indicated, in conformity with generally accepted accounting principles. These financial statements and selected per unit data and ratios (hereafter referred to as "financial statements") are the responsibility of the Life Account's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. /s/ PRICE WATERHOUSE LLP - ------------------------ PRICE WATERHOUSE LLP Kansas City, Missouri January 30, 1998 1 9 9 7 A n n u a l R e p o r t 1 TABLE OF CONTENTS
PAGE WRL SERIES LIFE ACCOUNT Report of Independent Accountants ............................ 1 Statements of Assets and Liabilities and Equity Accounts ..... 3 Statements of Operations ..................................... 5 Statements of Changes in Equity Accounts ..................... 7 Selected Per Unit Data and Ratios ............................ 10 Notes to Financial Statements ................................ 15
2 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS At December 31, 1997 All amounts (except unit value, units and shares) in thousands ----------------------------------
MONEY MARKET BOND GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ASSETS: Investments Investment in WRL Series Fund, Inc.: Shares ................................ 16,381,111 1,581,226 12,215,272 =========== ========= ========== Cost .................................. $ 16,381 $ 17,287 $ 359,253 ================= =============== ================= Investments at net asset value ......... $ 16,381 $ 17,618 $ 450,062 Accrued transfers from depositor ....... 59 39 209 ----------------- --------------- ----------------- Total assets .......................... 16,440 17,657 450,271 ----------------- --------------- ----------------- LIABILITIES: ............................. 0 0 0 ----------------- --------------- ----------------- Net assets ............................ $ 16,440 $ 17,657 $ 450,271 ================= =============== ================= EQUITY ACCOUNTS: Policy Owners' equity: Units ................................. 1,019,515.089795 835,870.193630 7,972,011.504966 ================= =============== ================= Unit value ............................ $ 16.125159 $ 21.123535 $ 56.481417 ================= =============== ================= Policy Owners' equity ................. $ 16,440 $ 17,657 $ 450,271 ----------------- --------------- ----------------- Depositor's equity: Units ................................. N/A N/A N/A ================= =============== ================= Unit value ............................ $ N/A $ N/A $ N/A ================= =============== ================= Depositor's equity .................... $ N/A $ N/A $ N/A ----------------- --------------- ----------------- Total equity .......................... $ 16,440 $ 17,657 $ 450,271 ================= =============== =================
GLOBAL SUB-ACCOUNT ASSETS: Investments Investment in WRL Series Fund, Inc.: Shares ................................ 7,604,927 ========== Cost .................................. $ 135,839 ================= Investments at net asset value ......... $ 144,823 Accrued transfers from depositor ....... 194 ----------------- Total assets .......................... 145,017 ----------------- LIABILITIES: ............................. 0 ----------------- Net assets ............................ $ 145,017 ================= EQUITY ACCOUNTS: Policy Owners' equity: Units ................................. 8,144,902.999720 ================= Unit value ............................ $ 17.804656 ================= Policy Owners' equity ................. $ 145,017 ----------------- Depositor's equity: Units ................................. N/A ================= Unit value ............................ $ N/A ================= Depositor's equity .................... $ N/A ----------------- Total equity .......................... $ 145,017 ================= STRATEGIC TOTAL RETURN EMERGING GROWTH AGGRESSIVE GROWTH SUB-ACCOUNT (A) SUB-ACCOUNT SUB-ACCOUNT ASSETS: Investments Investment in WRL Series Fund, Inc.: Shares ................................ 5,163,177 8,082,693 5,890,842 ========== ========== ========== Cost .................................. $ 66,903 $ 133,448 $ 85,485 ================= ================= ================= Investments at net asset value ......... $ 80,673 $ 164,625 $ 94,517 Accrued transfers from depositor ....... 80 77 135 ----------------- ----------------- ----------------- Total assets .......................... 80,753 164,702 94,652 ----------------- ----------------- ----------------- LIABILITIES: ............................. 0 0 0 ----------------- ----------------- ----------------- Net assets ............................ $ 80,753 $ 164,702 $ 94,652 ================= ================= ================= EQUITY ACCOUNTS: Policy Owners' equity: Units ................................. 4,270,324.925754 7,013,376.822852 5,230,271.098013 ================= ================= ================= Unit value ............................ $ 18.910375 $ 23.484030 $ 18.096966 ================= ================= ================= Policy Owners' equity ................. $ 80,753 $ 164,702 $ 94,652 ----------------- ----------------- ----------------- Depositor's equity: Units ................................. N/A N/A N/A ================= ================= ================= Unit value ............................ $ N/A $ N/A $ N/A ================= ================= ================= Depositor's equity .................... $ N/A $ N/A $ N/A ----------------- ----------------- ----------------- Total equity .......................... $ 80,753 $ 164,702 $ 94,652 ================= ================= =================
The notes to the financial statements are an integral part of this report. 1 9 9 7 A n n u a l R e p o r t 3 WRL SERIES LIFE ACCOUNT STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS At December 31, 1997 All amounts (except unit value, units and shares) in thousands ----------------------------------
GROWTH & TACTICAL ASSET BALANCED INCOME ALLOCATION SUB-ACCOUNT SUB-ACCOUNT (B) SUB-ACCOUNT ASSETS: Investments Investment in WRL Series Fund, Inc.: Shares .................................. 891,005 718,410 2,124,794 ======== ======== ========== Cost .................................... $ 10,023 $ 8,540 $ 26,436 =============== =============== ================= Investments at net asset value ........... $ 10,700 $ 9,022 $ 28,925 Accrued transfers from depositor ......... 16 41 198 --------------- --------------- ----------------- Total assets ............................ 10,716 9,063 29,123 --------------- --------------- ----------------- LIABILITIES: ............................... 0 0 0 --------------- --------------- ----------------- Net assets .............................. $ 10,716 $ 9,063 $ 29,123 =============== =============== ================= EQUITY ACCOUNTS: Policy Owners' equity: Units ................................... 756,353.665747 563,129.649597 1,867,261.033017 =============== =============== ================= Unit value .............................. $ 14.168361 $ 16.093919 $ 15.596453 =============== =============== ================= Policy Owners' equity ................... $ 10,716 $ 9,063 $ 29,123 --------------- --------------- ----------------- Depositor's equity: Units ................................... N/A N/A N/A =============== =============== ================= Unit value .............................. $ N/A $ N/A $ N/A =============== =============== ================= Depositor's equity ...................... $ N/A $ N/A $ N/A --------------- --------------- ----------------- Total equity ............................ $ 10,716 $ 9,063 $ 29,123 =============== =============== =================
INTERNATIONAL C.A.S.E. GROWTH VALUE EQUITY EQUITY U.S. EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT (C) SUB-ACCOUNT (C) ASSETS: Investments Investment in WRL Series Fund, Inc.: Shares .................................. 851,094 1,916,676 213,262 265,402 ======== ========= ======= ======= Cost .................................... $ 12,159 $ 23,473 $ 2,386 $ 3,232 =============== ================= =============== =============== Investments at net asset value ........... $ 11,924 $ 26,651 $ 2,283 $ 3,247 Accrued transfers from depositor ......... 22 63 6 11 --------------- ----------------- --------------- --------------- Total assets ............................. 11,946 26,714 2,289 3,258 --------------- ----------------- --------------- --------------- LIABILITIES: ............................... 0 0 0 0 --------------- ----------------- --------------- --------------- Net assets .............................. $ 11,946 $ 26,714 $ 2,289 $ 3,258 =============== ================= =============== =============== EQUITY ACCOUNTS: Policy Owners' equity: Units ................................... 969,379.081066 1,915,887.724063 214,889.042226 258,812.833059 =============== ================= =============== =============== Unit value .............................. $ 12.322854 $ 13.943236 $ 10.654082 $ 12.588589 =============== ================= =============== =============== Policy Owners' equity ................... $ 11,946 $ 26,714 $ 2,289 $ 3,258 --------------- ----------------- --------------- --------------- Depositor's equity: Units ................................... N/A N/A N/A N/A =============== ================= =============== =============== Unit value .............................. $ N/A $ N/A $ N/A $ N/A =============== ================= =============== =============== Depositor's equity ...................... $ N/A $ N/A $ N/A $ N/A --------------- ----------------- --------------- --------------- Total equity ............................ $ 11,946 $ 26,714 $ 2,289 $ 3,258 =============== ================= =============== ===============
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income. (b) Prior to May 1, 1997, this sub-account was known as Utility. (c) The inception date of this sub-account was January 2, 1997. The notes to the financial statements are an integral part of this report. 4 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT STATEMENT OF OPERATIONS For the year ended December 31, 1997 All amounts in thousands ----------------------------------
MONEY MARKET BOND GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT INVESTMENT INCOME: Dividend income ............................................................. $ 772 $ 778 $ 3,046 Capital gain distributions .................................................. 0 0 44,809 ------ ------- -------- 772 778 47,855 EXPENSES: Mortality and expense risk .................................................. 133 117 3,649 ------ ------- -------- Net investment income (loss) ............................................... 639 661 44,206 ------ ------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from securities transactions ...................... 0 (191) 5,459 Change in unrealized appreciation (depreciation) ........................... 0 609 9,779 ------ ------- -------- Net gain (loss) on investments ............................................ 0 418 15,238 ------ ------- -------- Net increase (decrease) in equity accounts resulting from operations ..... $ 639 $ 1,079 $ 59,444 ====== ======= ========
GLOBAL SUB-ACCOUNT INVESTMENT INCOME: Dividend income ........................................................ $ 8,033 Capital gain distributions ............................................. 8,885 -------- 16,918 EXPENSES: Mortality and expense risk ............................................. 1,059 -------- Net investment income (loss) .......................................... 15,859 -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from securities transactions ................. 910 Change in unrealized appreciation (depreciation) ...................... (105) -------- Net gain (loss) on investments ....................................... 805 -------- Net increase (decrease) in equity accounts resulting from operations $ 16,664 ======== STRATEGIC EMERGING AGGRESSIVE TOTAL RETURN GROWTH GROWTH SUB-ACCOUNT (A) SUB-ACCOUNT SUB-ACCOUNT INVESTMENT INCOME: Dividend income ........................................................ $ 1,894 $ 0 $ 2,430 Capital gain distributions ............................................. 4,821 15,057 6,045 -------- -------- -------- 6,715 15,057 8,475 EXPENSES: Mortality and expense risk ............................................. 614 1,216 680 -------- -------- -------- Net investment income (loss) .......................................... 6,101 13,841 7,795 -------- -------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from securities transactions ................. 484 2,278 1,053 Change in unrealized appreciation (depreciation) ...................... 6,037 8,654 5,471 -------- -------- -------- Net gain (loss) on investments ....................................... 6,521 10,932 6,524 -------- -------- -------- Net increase (decrease) in equity accounts resulting from operations $ 12,622 $ 24,773 $ 14,319 ======== ======== ========
The notes to the financial statements are an integral part of this report. 1 9 9 7 A n n u a l R e p o r t 5 WRL SERIES LIFE ACCOUNT STATEMENT OF OPERATIONS For the year or period ended December 31, 1997 All amounts in thousands ----------------------------------
GROWTH & TACTICAL ASSET BALANCED INCOME ALLOCATION SUB-ACCOUNT SUB-ACCOUNT (B) SUB-ACCOUNT INVESTMENT INCOME: Dividend income ........................................................ $ 548 $ 670 $ 1,051 Capital gain distributions ............................................. 521 603 1,072 ------- ------- ------- 1,069 1,273 2,123 EXPENSES: Mortality and expense risk ............................................. 77 59 210 ------- ------- ------- Net investment income (loss) .......................................... 992 1,214 1,913 ------- ------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from securities transactions ................. 114 137 339 Change in unrealized appreciation (depreciation) ...................... 112 146 1,023 ------- ------- ------- Net gain (loss) on investments ....................................... 226 283 1,362 ------- ------- ------- Net increase (decrease) in equity accounts resulting from operations $ 1,218 $ 1,497 $ 3,275 ======= ======= =======
C.A.S.E. GROWTH VALUE EQUITY SUB-ACCOUNT SUB-ACCOUNT INVESTMENT INCOME: Dividend income ........................................................ $ 979 $ 292 Capital gain distributions ............................................. 85 46 ------ ------- 1,064 338 EXPENSES: Mortality and expense risk ............................................. 70 155 ------ ------- Net investment income (loss) .......................................... 994 183 ------ ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from securities transactions ................. 205 393 Change in unrealized appreciation (depreciation) ...................... (457) 2,645 ------ ------- Net gain (loss) on investments ....................................... (252) 3,038 ------ ------- Net increase (decrease) in equity accounts resulting from operations $ 742 $ 3,221 ====== ======= INTERNATIONAL U.S. EQUITY EQUITY SUB-ACCOUNT (C) SUB-ACCOUNT (C) INVESTMENT INCOME: Dividend income ........................................................ $ 10 $ 108 Capital gain distributions ............................................. 0 11 ------ ----- 10 119 EXPENSES: Mortality and expense risk ............................................. 14 12 ------ ----- Net investment income (loss) .......................................... (4) 107 --------- ----- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from securities transactions ................. 134 81 Change in unrealized appreciation (depreciation) ...................... (103) 15 -------- ----- Net gain (loss) on investments ....................................... 31 96 -------- ----- Net increase (decrease) in equity accounts resulting from operations $ 27 $ 203 ======== =====
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income. (b) Prior to May 1, 1997, this sub-account was known as Utility. (c) The inception date of this sub-account was January 2, 1997. The notes to the financial statements are an integral part of this report. 6 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN EQUITY ACCOUNTS For the year ended All amounts in thousands ----------------------------------
MONEY MARKET BOND SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31 DECEMBER 31 ----------------------- ------------------------ 1997 1996 1997 1996 ----------- ----------- ----------- ------------ OPERATIONS: Net investment income (loss) ............................. $ 639 $ 491 $ 661 $ 553 Net gain (loss) on investments ........................... 0 0 418 (614) -------- -------- -------- -------- Net increase (decrease) in equity accounts resulting from operations ......................................... 639 491 1,079 (61) -------- -------- -------- -------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 7,719 5,217 7,506 3,452 -------- -------- -------- -------- Less cost of units redeemed: Administrative charges .................................. 3,108 2,639 1,633 1,314 Policy loans ............................................ 687 286 428 191 Surrender benefits ...................................... 854 776 437 339 Death benefits .......................................... 9 26 15 28 -------- -------- -------- -------- 4,658 3,727 2,513 1,872 -------- -------- -------- -------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 3,061 1,490 4,993 1,580 -------- -------- -------- -------- Net increase (decrease) in equity accounts .............. 3,700 1,981 6,072 1,519 Depositor's equity contribution (net redemption) ......... 0 0 0 0 EQUITY ACCOUNTS: Beginning of period ...................................... 12,740 10,759 11,585 10,066 -------- -------- -------- -------- End of period ............................................ $ 16,440 $ 12,740 $ 17,657 $ 11,585 ======== ======== ======== ======== GROWTH SUB-ACCOUNT DECEMBER 31 ------------------------- 1997 1996 ------------ ------------ OPERATIONS: Net investment income (loss) ............................. $ 44,206 $ 19,310 Net gain (loss) on investments ........................... 15,238 26,919 --------- --------- Net increase (decrease) in equity accounts resulting from operations ......................................... 59,444 46,229 --------- --------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 106,236 91,556 --------- --------- Less cost of units redeemed: Administrative charges .................................. 37,231 29,331 Policy loans ............................................ 11,212 8,443 Surrender benefits ...................................... 15,746 12,386 Death benefits .......................................... 711 601 --------- --------- 64,900 50,761 --------- --------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 41,336 40,795 --------- --------- Net increase (decrease) in equity accounts .............. 100,780 87,024 Depositor's equity contribution (net redemption) ......... 0 0 EQUITY ACCOUNTS: Beginning of period ...................................... 349,491 262,467 --------- --------- End of period ............................................ $ 450,271 $ 349,491 ========= =========
STRATEGIC GLOBAL TOTAL RETURN SUB-ACCOUNT SUB-ACCOUNT (A) DECEMBER 31 DECEMBER 31 -------------------------- ----------------------- 1997 1996 1997 1996 ----------- ------------ ---------- ---------- OPERATIONS: Net investment income (loss) ............................. $ 15,859 $ 6,524 $ 6,101 $ 2,646 Net gain (loss) on investments ........................... 805 6,374 6,521 3,636 --------- -------- -------- -------- Net increase (decrease) in equity accounts resulting from operations ......................................... 16,664 12,898 12,622 6,282 --------- -------- -------- -------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 64,272 43,697 22,072 16,832 --------- -------- -------- -------- Less cost of units redeemed: Administrative charges .................................. 12,590 6,463 6,025 4,528 Policy loans ............................................ 2,948 1,466 1,624 921 Surrender benefits ...................................... 3,391 2,226 2,044 1,301 Death benefits .......................................... 149 62 148 112 --------- -------- -------- -------- 19,078 10,217 9,841 6,862 --------- -------- -------- -------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 45,194 33,480 12,231 9,970 --------- -------- -------- -------- Net increase (decrease) in equity accounts .............. 61,858 46,378 24,853 16,252 Depositor's equity contribution (net redemption) ......... 0 (268) 0 0 EQUITY ACCOUNTS: Beginning of period ...................................... 83,159 37,049 55,900 39,648 --------- -------- -------- -------- End of period ............................................ $ 145,017 $ 83,159 $ 80,753 $ 55,900 ========= ======== ======== ========
The notes to the financial statements are an integral part of this report. 1 9 9 7 A n n u a l R e p o r t 7 WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN EQUITY ACCOUNTS For the year ended All amounts in thousands ----------------------------------
EMERGING GROWTH SUB-ACCOUNT DECEMBER 31 ------------------------ 1997 1996 ----------- ------------ OPERATIONS: Net investment income (loss) ............................. $ 13,841 $ 3,935 Net gain (loss) on investments ........................... 10,932 9,284 --------- --------- Net increase (decrease) in equity accounts resulting from operations ......................................... 24,773 13,219 --------- --------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 54,392 40,944 --------- --------- Less cost of units redeemed: Administrative charges .................................. 14,518 9,201 Policy loans ............................................ 3,692 2,096 Surrender benefits ...................................... 3,986 2,754 Death benefits .......................................... 192 92 --------- --------- 22,388 14,143 --------- --------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 32,004 26,801 --------- --------- Net increase (decrease) in equity accounts .............. 56,777 40,020 Depositor's equity contribution (net redemption) ......... 0 0 EQUITY ACCOUNTS: Beginning of period ...................................... 107,925 67,905 --------- --------- End of period ............................................ $ 164,702 $ 107,925 ========= ========= AGGRESSIVE GROWTH BALANCED SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31 DECEMBER 31 --------------------- ----------------------- 1997 1996 1997 1996 ---------- ---------- ----------- ----------- OPERATIONS: Net investment income (loss) ............................. $ 7,795 $ 1,139 $ 992 $ 154 Net gain (loss) on investments ........................... 6,524 2,797 226 341 -------- -------- -------- ------- Net increase (decrease) in equity accounts resulting from operations ......................................... 14,319 3,936 1,218 495 -------- -------- -------- ------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 40,282 26,224 4,373 3,090 -------- -------- -------- ------- Less cost of units redeemed: Administrative charges .................................. 9,888 6,413 958 575 Policy loans ............................................ 1,926 863 179 78 Surrender benefits ...................................... 2,485 1,350 153 85 Death benefits .......................................... 58 30 3 4 -------- -------- -------- ------- 14,357 8,656 1,293 742 -------- -------- -------- ------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 25,925 17,568 3,080 2,348 -------- -------- -------- ------- Net increase (decrease) in equity accounts .............. 40,244 21,504 4,298 2,843 Depositor's equity contribution (net redemption) ......... 0 0 0 (220) EQUITY ACCOUNTS: Beginning of period ...................................... 54,408 32,904 6,418 3,795 -------- -------- -------- ------- End of period ............................................ $ 94,652 $ 54,408 $ 10,716 $ 6,418 ======== ======== ======== =======
GROWTH & TACTICAL ASSET INCOME ALLOCATION SUB-ACCOUNT (B) SUB-ACCOUNT DECEMBER 31 DECEMBER 31 ---------------------- ---------------------- 1997 1996 1997 1996 ---------- ----------- ---------- ----------- OPERATIONS: Net investment income (loss) ............................. $ 1,214 $ 246 $ 1,913 $ 584 Net gain (loss) on investments ........................... 283 210 1,362 1,179 ------- ------- -------- -------- Net increase (decrease) in equity accounts resulting from operations ......................................... 1,497 456 3,275 1,763 ------- ------- -------- -------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 3,232 3,245 11,386 9,062 ------- ------- -------- -------- Less cost of units redeemed: Administrative charges .................................. 733 440 2,219 1,135 Policy loans ............................................ 163 73 463 306 Surrender benefits ...................................... 260 82 742 866 Death benefits .......................................... 11 3 60 18 ------- ------- -------- -------- 1,167 598 3,484 2,325 ------- ------- -------- -------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 2,065 2,647 7,902 6,737 ------- ------- -------- -------- Net increase (decrease) in equity accounts .............. 3,562 3,103 11,177 8,500 Depositor's equity contribution (net redemption) ......... 0 (233) 0 0 EQUITY ACCOUNTS: Beginning of period ...................................... 5,501 2,631 17,946 9,446 ------- ------- -------- -------- End of period ............................................ $ 9,063 $ 5,501 $ 29,123 $ 17,946 ======= ======= ======== ======== C.A.S.E. GROWTH SUB-ACCOUNT DECEMBER 31 ----------------------- 1997 1996 ------------ ---------- OPERATIONS: Net investment income (loss) ............................. $ 994 $ 70 Net gain (loss) on investments ........................... (252) 228 -------- ------- Net increase (decrease) in equity accounts resulting from operations ......................................... 742 298 -------- ------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 8,029 4,302 -------- ------- Less cost of units redeemed: Administrative charges .................................. 970 140 Policy loans ............................................ 146 7 Surrender benefits ...................................... 144 12 Death benefits .......................................... 6 0 -------- ------- 1,266 159 -------- ------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 6,763 4,143 -------- ------- Net increase (decrease) in equity accounts .............. 7,505 4,441 Depositor's equity contribution (net redemption) ......... (25) 25 EQUITY ACCOUNTS: Beginning of period ...................................... 4,466 0 -------- ------- End of period ............................................ $ 11,946 $ 4,466 ======== =======
The notes to the financial statements are an integral part of this report. 8 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN EQUITY ACCOUNTS For the year or period ended All amounts in thousands ----------------------------------
VALUE EQUITY SUB-ACCOUNT DECEMBER 31 ------------------------ 1997 1996 (C) ------------ --------- OPERATIONS: Net investment income (loss) ............................. $ 183 $ 19 Net gain (loss) on investments ........................... 3,038 603 -------- ------- Net increase (decrease) in equity accounts resulting from operations ......................................... 3,221 622 -------- ------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 17,023 8,292 -------- ------- Less cost of units redeemed: Administrative charges .................................. 1,257 153 Policy loans ............................................ 542 36 Surrender benefits ...................................... 388 38 Death benefits .......................................... 0 0 -------- ------- 2,187 227 -------- ------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 14,836 8,065 -------- ------- Net increase (decrease) in equity accounts .............. 18,057 8,687 Depositor's equity contribution (net redemption) ......... (230) 200 EQUITY ACCOUNTS: Beginning of period ...................................... 8,887 0 -------- ------- End of period ............................................ $ 26,714 $ 8,887 ======== =======
INTERNATIONAL U.S. EQUITY EQUITY SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31 DECEMBER 31 1997 (D) 1997 (D) ---------------- ------------ OPERATIONS: Net investment income (loss) ............................. $ (4) $ 107 Net gain (loss) on investments ........................... 31 96 ------ ------- Net increase (decrease) in equity accounts resulting from operations ......................................... 27 203 ------ ------- EQUITY TRANSACTIONS: Proceeds from units sold (redeemed) ...................... 2,458 3,208 ------ ------- Less cost of units redeemed: Administrative charges .................................. 117 91 Policy loans ............................................ 59 56 Surrender benefits ...................................... 14 9 Death benefits .......................................... 0 0 ------ ------- 190 156 ------ ------- Increase (decrease) in equity accounts from capital unit transactions ...................................... 2,268 3,052 ------ ------- Net increase (decrease) in equity accounts .............. 2,295 3,255 Depositor's equity contribution (net redemption) ......... (6) 3 EQUITY ACCOUNTS: Beginning of period ...................................... 0 0 ------ ------- End of period ............................................ $ 2,289 $ 3,258 ======= =======
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income. (b) Prior to May 1, 1997, this sub-account was known as Utility. (c) The inception date of this sub-account was May 1, 1996. (d) The inception date of this sub-account was January 2, 1997. The notes to the financial statements are an integral part of this report. 1 9 9 7 A n n u a l R e p o r t 9 WRL SERIES LIFE ACCOUNT SELECTED PER UNIT DATA AND RATIOS* For the period ended ----------------------------------
MONEY MARKET SUB-ACCOUNT DECEMBER 31 ------------------------- 1997 1996 ------------ ------------ Accumulation unit value, beginning of period ......................... $ 15.45 $ 14.83 Income from operations: Net investment income (loss) ....................................... 0.68 0.62 Net realized and unrealized gain (loss) on investments ............. 0.00 0.00 ------- ------- Total income (loss) from operations ............................... 0.68 0.62 ------- ------- Accumulation unit value, end of period ............................... $ 16.13 $ 15.45 ======= ======= Total return (a) ..................................................... 4.37% 4.17% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 16,440 $ 12,740 Ratios of net investment income (loss) to average net assets (b) .... 4.28% 4.07% MONEY MARKET SUB-ACCOUNT DECEMBER 31 ------------------------------------ 1995 1994 1993 ------------ ----------- ----------- Accumulation unit value, beginning of period ......................... $ 14.19 $ 13.84 $ 13.63 Income from operations: Net investment income (loss) ....................................... 0.64 0.35 0.21 Net realized and unrealized gain (loss) on investments ............. 0.00 0.00 0.00 ------- ------- ------- Total income (loss) from operations ............................... 0.64 0.35 0.21 ------- ------- ------- Accumulation unit value, end of period ............................... $ 14.83 $ 14.19 $ 13.84 ======= ======= ======= Total return (a) ..................................................... 4.49% 2.58% 1.52% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 10,759 $ 9,706 $ 4,985 Ratios of net investment income (loss) to average net assets (b) .... 4.37% 2.66% 1.51%
BOND SUB-ACCOUNT DECEMBER 31 -------------------------- 1997 1996 ------------ ------------- Accumulation unit value, beginning of period ......................... $ 19.53 $ 19.67 Income from operations: Net investment income (loss) ....................................... 1.01 0.99 Net realized and unrealized gain (loss) on investments ............. 0.58 ( 1.13) ------- ------- Total income (loss) from operations ............................... 1.59 ( 0.14) ------- ------- Accumulation unit value, end of period ............................... $ 21.12 $ 19.53 ======= ======= Total return (a) ..................................................... 8.18% ( 0.75%) Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 17,657 $ 11,585 Ratios of net investment income (loss) to average net assets (b) .... 5.06% 5.34% BOND SUB-ACCOUNT DECEMBER 31 ----------------------------------- 1995 1994 1993 ----------- ----------- ----------- Accumulation unit value, beginning of period ......................... $ 16.14 $ 17.50 $ 15.57 Income from operations: Net investment income (loss) ....................................... 1.05 0.89 2.11 Net realized and unrealized gain (loss) on investments ............. 2.48 ( 2.25) ( 0.18) ------- -------- -------- Total income (loss) from operations ............................... 3.53 ( 1.36) 1.93 ------- -------- -------- Accumulation unit value, end of period ............................... $ 19.67 $ 16.14 $ 17.50 ======= ======== ======== Total return (a) ..................................................... 21.89% ( 7.77%) 12.40% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $10,066 $ 6,259 $ 6,985 Ratios of net investment income (loss) to average net assets (b) .... 5.80% 5.57% 12.92%
GROWTH SUB-ACCOUNT DECEMBER 31 --------------------------- 1997 1996 ------------- ------------- Accumulation unit value, beginning of period ......................... $ 48.48 $ 41.47 Income from operations: Net investment income (loss) ....................................... 5.83 2.88 Net realized and unrealized gain (loss) on investments ............. 2.17 4.13 -------- -------- Total income (loss) from operations ............................... 8.00 7.01 -------- -------- Accumulation unit value, end of period ............................... $ 56.48 $ 48.48 ======== ======== Total return (a) ..................................................... 16.50% 16.91% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 450,271 $ 349,491 Ratios of net investment income (loss) to average net assets (b) .... 10.84% 6.41% GROWTH SUB-ACCOUNT DECEMBER 31 ------------------------------------------ 1995 1994 1993 ------------- -------------- ------------- Accumulation unit value, beginning of period ......................... $ 28.44 $ 31.30 $ 30.37 Income from operations: Net investment income (loss) ....................................... 3.89 0.04 0.46 Net realized and unrealized gain (loss) on investments ............. 9.14 ( 2.90) 0.47 -------- -------- -------- Total income (loss) from operations ............................... 13.03 ( 2.86) 0.93 -------- -------- -------- Accumulation unit value, end of period ............................... $ 41.47 $ 28.44 $ 31.30 ======== ======== ======== Total return (a) ..................................................... 45.81% ( 9.13%) 3.06% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 262,467 $ 161,490 $ 169,757 Ratios of net investment income (loss) to average net assets (b) .... 11.05% 0.16% 1.56%
The notes to the financial statements are an integral part of this report. 10 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT SELECTED PER UNIT DATA AND RATIOS* For the period ended ----------------------------------
GLOBAL SUB-ACCOUNT DECEMBER 31 -------------------------------------------------- 1997 1996 1995 1994 (D) ------------- ----------- ----------- ------------ Accumulation unit value, beginning of period ......................... $ 15.13 $ 11.95 $ 9.80 $ 10.00 Income from operations: Net investment income (loss) ....................................... 2.30 1.50 0.45 0.71 Net realized and unrealized gain (loss) on investments ............. 0.37 1.68 1.70 ( 0.91) -------- ------- ------- ------- Total income (loss) from operations ............................... 2.67 3.18 2.15 ( 0.20) -------- ------- ------- ------- Accumulation unit value, end of period ............................... $ 17.80 $ 15.13 $ 11.95 $ 9.80 ======== ======= ======= ======= Total return (a) ..................................................... 17.69% 26.60% 21.96% ( 2.02%) Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 145,017 $83,159 $37,049 $ 21,672 Ratios of net investment income (loss) to average net assets (b) .... 13.39% 11.09% 4.25% 8.86%
STRATEGIC TOTAL RETURN SUB-ACCOUNT (H) DECEMBER 31 ----------------------- 1997 1996 ----------- ----------- Accumulation unit value, beginning of period ......................... $ 15.66 $ 13.74 Income from operations: Net investment income (loss) ....................................... 1.56 0.82 Net realized and unrealized gain (loss) on investments ............. 1.69 1.10 ------- ------- Total income (loss) from operations ............................... 3.25 1.92 ------- ------- Accumulation unit value, end of period ............................... $ 18.91 $ 15.66 ======= ======= Total return (a) ..................................................... 20.77% 13.97% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $80,753 $55,900 Ratios of net investment income (loss) to average net assets (b) .... 8.89% 5.76% STRATEGIC TOTAL RETURN SUB-ACCOUNT SUB-ACCOUNT (H) DECEMBER 31 ----------------------------------- 1995 1994 1993 (C) ----------- ----------- ----------- Accumulation unit value, beginning of period ......................... $ 11.12 $ 11.28 $ 10.00 Income from operations: Net investment income (loss) ....................................... 0.68 0.18 0.19 Net realized and unrealized gain (loss) on investments ............. 1.94 ( 0.34) 1.09 ------- ------- ------- Total income (loss) from operations ............................... 2.62 ( 0.16) 1.28 ------- ------- ------- Accumulation unit value, end of period ............................... $ 13.74 $ 11.12 $ 11.28 ======= ======= ======= Total return (a) ..................................................... 23.55% ( 1.42%) 12.81% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $39,648 $23,649 $13,343 Ratios of net investment income (loss) to average net assets (b) .... 5.47% 1.93% 2.27%
EMERGING GROWTH SUB-ACCOUNT DECEMBER 31 --------------------------- 1997 1996 ------------- ------------- Accumulation unit value, beginning of period ......................... $ 19.51 $ 16.56 Income from operations: Net investment income (loss) ....................................... 2.20 0.82 Net realized and unrealized gain (loss) on investments ............. 1.77 2.13 -------- -------- Total income (loss) from operations ............................... 3.97 2.95 -------- -------- Accumulation unit value, end of period ............................... $ 23.48 $ 19.51 ======== ======== Total return (a) ..................................................... 20.37% 17.82% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 164,702 $ 107,925 Ratios of net investment income (loss) to average net assets (b) .... 10.18% 4.51% EMERGING GROWTH SUB-ACCOUNT DECEMBER 31 ------------------------------------ 1995 1994 1993 (C) ----------- ------------ ----------- Accumulation unit value, beginning of period ......................... $ 11.38 $ 12.40 $ 10.00 Income from operations: Net investment income (loss) ....................................... 0.65 ( 0.09) ( 0.09) Net realized and unrealized gain (loss) on investments ............. 4.53 ( 0.93) 2.49 ------- ------- ------- Total income (loss) from operations ............................... 5.18 ( 1.02) 2.40 ------- ------- ------- Accumulation unit value, end of period ............................... $ 16.56 $ 11.38 $ 12.40 ======= ======= ======= Total return (a) ..................................................... 45.49% ( 8.18%) 23.96% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $67,905 $36,687 $18,620 Ratios of net investment income (loss) to average net assets (b) .... 4.66% ( 0.86%) ( 0.92%)
The notes to the financial statements are an integral part of this report. 1 9 9 7 A n n u a l R e p o r t 11 WRL SERIES LIFE ACCOUNT SELECTED PER UNIT DATA AND RATIOS* For the period ended ----------------------------------
AGGRESSIVE GROWTH SUB-ACCOUNT DECEMBER 31 ------------------------------------------------------ 1997 1996 1995 1994 (D) ----------- ----------- ----------- ------------ Accumulation unit value, beginning of period ......................... $ 14.70 $ 13.43 $ 9.82 $ 10.00 Income from operations: Net investment income (loss) ....................................... 1.75 0.36 0.37 ( 0.06) Net realized and unrealized gain (loss) on investments ............. 1.65 0.91 3.24 ( 0.12) ------- ------- ------- ------- Total income (loss) from operations ............................... 3.40 1.27 3.61 ( 0.18) ------- ------- ------- ------- Accumulation unit value, end of period ............................... $ 18.10 $ 14.70 $ 13.43 $ 9.82 ======= ======= ======= ======= Total return (a) ..................................................... 23.14% 9.46% 36.79% ( 1.85%) Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $94,652 $54,408 $32,904 $ 8,909 Ratios of net investment income (loss) to average net assets (b) .... 10.26% 2.65% 2.93% ( 0.72%)
BALANCED SUB-ACCOUNT DECEMBER 31 ----------------------------------------------------- 1997 1996 1995 1994 (D) ----------- ----------- ---------- ------------ Accumulation unit value, beginning of period ......................... $ 12.21 $ 11.13 $ 9.37 $ 10.00 Income from operations: Net investment income (loss) ....................................... 1.55 0.36 0.37 0.22 Net realized and unrealized gain (loss) on investments ............. 0.41 0.72 1.39 ( 0.85) ------- ------- ------- ------- Total income (loss) from operations ............................... 1.96 1.08 1.76 ( 0.63) ------- ------- ------- ------- Accumulation unit value, end of period ............................... $ 14.17 $ 12.21 $ 11.13 $ 9.37 ======= ======= ======= ======= Total return (a) ..................................................... 16.06% 9.73% 18.73% ( 6.29%) Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $10,716 $ 6,418 $ 3,795 $ 2,145 Ratios of net investment income (loss) to average net assets (b) .... 11.62% 3.18% 3.59% 3.06%
GROWTH & INCOME SUB-ACCOUNT (I) DECEMBER 31 ----------------------------------------------------- 1997 1996 1995 1994 (D) ----------- ----------- ---------- ------------ Accumulation unit value, beginning of period ......................... $ 13.03 $ 11.77 $ 9.49 $ 10.00 Income from operations: Net investment income (loss) ....................................... 2.61 0.76 0.49 0.29 Net realized and unrealized gain (loss) on investments ............. 0.45 0.50 1.79 ( 0.80) ------- ------- ------- ------- Total income (loss) from operations ............................... 3.06 1.26 2.28 ( 0.51) ------- ------- ------- ------- Accumulation unit value, end of period ............................... $ 16.09 $ 13.03 $ 11.77 $ 9.49 ======= ======= ======= ======= Total return (a) ..................................................... 23.54% 10.64% 24.14% ( 5.15%) Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 9,063 $ 5,501 $ 2,631 $ 1,215 Ratios of net investment income (loss) to average net assets (b) .... 18.50% 6.38% 4.57% 3.71%
The notes to the financial statements are an integral part of this report. 12 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT SELECTED PER UNIT DATA AND RATIOS* For the period ended ----------------------------------
TACTICAL ASSET ALLOCATION SUB-ACCOUNT DECEMBER 31 -------------------------------------- 1997 1996 1995 (E) ----------- ----------- ---------- Accumulation unit value, beginning of period ......................... $ 13.50 $ 11.90 $ 10.00 Income from operations: Net investment income (loss) ....................................... 1.20 0.53 0.61 Net realized and unrealized gain (loss) on investments ............. 0.90 1.07 1.29 ------- ------- ------- Total income (loss) from operations ............................... 2.10 1.60 1.90 ------- ------- ------- Accumulation unit value, end of period ............................... $ 15.60 $ 13.50 $ 11.90 ======= ======= ======= Total return (a) ..................................................... 15.55% 13.40% 19.03% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $29,123 $17,946 $ 9,446 Ratios of net investment income (loss) to average net assets (b) .... 8.14% 4.35% 5.47%
C.A.S.E. GROWTH SUB-ACCOUNT DECEMBER 31 ------------------------ 1997 1996 (F) ----------- ---------- Accumulation unit value, beginning of period ......................... $ 10.81 $ 10.00 Income from operations: Net investment income (loss) ....................................... 1.51 0.37 Net realized and unrealized gain (loss) on investments ............. 0.00 0.44 ------- ------- Total income (loss) from operations ............................... 1.51 0.81 ------- ------- Accumulation unit value, end of period ............................... $ 12.32 $ 10.81 ======= ======= Total return (a) ..................................................... 14.00% 8.09% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $11,946 $ 4,466 Ratios of net investment income (loss) to average net assets (b) .... 12.65% 6.11%
VALUE EQUITY SUB-ACCOUNT DECEMBER 31 ------------------------ 1997 1996 (F) ----------- ---------- Accumulation unit value, beginning of period ......................... $ 11.25 $ 10.00 Income from operations: Net investment income (loss) ....................................... 0.14 0.05 Net realized and unrealized gain (loss) on investments ............. 2.55 1.20 ------- ------- Total income (loss) from operations ............................... 2.69 1.25 ------- ------- Accumulation unit value, end of period ............................... $ 13.94 $ 11.25 ======= ======= Total return (a) ..................................................... 23.93% 12.51% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $26,714 $ 8,887 Ratios of net investment income (loss) to average net assets (b) .... 1.05% 0.77%
The notes to the financial statements are an integral part of this report. 1 9 9 7 A n n u a l R e p o r t 13 WRL SERIES LIFE ACCOUNT SELECTED PER UNIT DATA AND RATIOS* For the period ended ----------------------------------
INTERNATIONAL U.S. EQUITY EQUITY SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31 DECEMBER 31 1997 (G) 1997 (G) ----------------- ------------ Accumulation unit value, beginning of period ......................... $ 10.00 $ 10.00 Income from operations: Net investment income (loss) ....................................... ( 0.03) 0.99 Net realized and unrealized gain (loss) on investments ............. 0.68 1.60 ------- ------- Total income (loss) from operations ............................... 0.65 2.59 ------- ------- Accumulation unit value, end of period ............................... $ 10.65 $ 12.59 ======= ======= Total return (a) ..................................................... 6.54% 25.89% Ratios and supplemental data: Net assets at end of period (in thousands) .......................... $ 2,289 $ 3,258 Ratios of net investment income (loss) to average net assets (b) .... ( 0.28%) 8.28%
* The above tables illustrate the change for a unit outstanding computed using average units outstanding throughout each period. See Notes to Selected Per Unit Data and Ratios below. NOTES TO SELECTED PER UNIT DATA AND RATIOS: (a) For periods less than one year, the total return is not annualized. (b) For periods less than one year, the ratio of net investment income to average net assets is annualized. (c) The inception date of this sub-account was March 1, 1993. (d) The inception date of this sub-account was March 1, 1994. (e) The inception date of this sub-account was January 3, 1995. (f) The inception date of this sub-account was May 1, 1996. (g) The inception date of this sub-account was January 2, 1997. (h) Prior to May 1, 1997, this sub-account was known as Equity-Income. (i) Prior to May 1, 1997, this sub-account was known as Utility. The notes to the financial statements are an integral part of this report. 14 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT NOTES TO FINANCIAL STATEMENTS December 31, 1997 -------------------------------------------------------- NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The WRL Series Life Account (the "Life Account"), was established as a variable life insurance separate account of Western Reserve Life Assurance Co. of Ohio ("WRL") and is registered as a unit investment trust ("Trust") under the Investment Company Act of 1940, as amended. The Life Account contains fourteen investment options referred to as sub-accounts. Each sub-account invests in the corresponding Portfolio of the WRL Series Fund, Inc. (collectively referred to as the "Fund" and individually as a "Portfolio"), a registered management investment company under the Investment Company Act of 1940, as amended. The Fund has entered into annually renewable investment advisory agreements for each Portfolio with WRL Investment Management, Inc. ("WRL Management") as investment adviser. Costs incurred in connection with the advisory services rendered by WRL Management are paid by each Portfolio. WRL Management has entered into sub-advisory agreements with various management companies, some of which are affiliates of WRL. Each sub-adviser is compensated directly by WRL Management. Effective May 1, 1997, the names of the Equity-Income and Utility Sub-Accounts were changed to the Strategic Total Return and Growth & Income Sub-Accounts, respectively. On December 16, 1997, pursuant to an exemptive order (Rel. No. IC-22944) received from the Securities and Exchange Commission for the substitution of securities issued by the WRL Series Fund and held by the Life Series Account to support individual premium variable life insurance policies, investments were transferred from the Short-to-Intermediate Government Sub-Account to the Bond Sub-Account. On January 2, 1997, WRL made an initial contribution of $ 600,000 to the Life Account. The amount of the contribution and units received were as follows:
SUB-ACCOUNT CONTRIBUTION UNITS - ----------------------- -------------- ------------------ International Equity $ 400,000 40,000.000000 U.S. Equity $ 200,000 20,000.000000
On April 28, 1997, WRL redeemed the initial contribution in the International Equity Sub-Account for $ 406,299 and the U.S. Equity sub-account for $ 197,490. The Life Account holds assets to support the benefits under certain flexible premium variable universal life insurance policies (the "Policies") issued by WRL. The Life Account's equity transactions are accounted for using the appropriate effective date at the corresponding accumulation unit value. The following significant accounting policies, which are in conformity with generally accepted accounting principles for unit investment trusts, have been consistently applied in the preparation of the Trust's financial statements. A. VALUATION OF INVESTMENTS AND SECURITIES TRANSACTIONS Investments in the Fund's shares are stated at the closing net asset value ("NAV") per share as determined by the Fund. Investment transactions are accounted for on the trade date at the Fund NAV next determined after receipt of sale or redemption orders without sales charges. Dividend income and capital gains distributions are recorded on the ex-dividend date. The cost of investments sold is determined on a first-in, first-out basis. B. FEDERAL INCOME TAXES The operations of the Life Account are a part of and are taxed with the total operations of WRL, which is taxed as a life insurance company under the Internal Revenue Code. Under current law the investment income of the Life Account, including realized and unrealized capital gains, is not taxable to WRL. Accordingly, no provision for Federal income taxes has been made. C. ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. NOTE 2 -- CHARGES AND DEDUCTIONS Charges are assessed by WRL in connection with the issuance and administration of the Policies. A. POLICY CHARGES Under some forms of the Policies, a sales charge and premium taxes are deducted by WRL prior to allocation of policyowner payments to the sub-accounts. Thereafter, monthly ad- 1 9 9 7 A n n u a l R e p o r t 15 WRL SERIES LIFE ACCOUNT NOTES TO FINANCIAL STATEMENTS December 31, 1997 (continued) ---------------------------------- NOTE 2 -- (CONTINUED) ministrative and cost of insurance charges are deducted from the sub-accounts. Contingent surrender charges also apply. Under the other forms of the Policies, such "front-end" and other administrative charges are deducted prior to allocation of the initial premium payment but may reside as contingent surrender charges. Under all forms of the Policy, monthly charges against policy cash values are made to compensate WRL for costs of insurance provided. B. LIFE ACCOUNT CHARGES A daily charge equal to an annual rate of 0.90% of average daily net assets is assessed to compensate WRL for assumption of mortality and expense risks and administrative services in connection with issuance and administration of the Policies. This charge (not assessed at the individual contract level) effectively reduces the value of a unit outstanding during the year. NOTE 3 -- DIVIDENDS AND DISTRIBUTIONS Dividends of the Money Market Portfolio are declared daily and reinvested monthly. Dividends of the remaining Portfolios are typically declared and reinvested semi-annually, while capital gains distributions are declared and reinvested annually. Dividends and distributions of the Fund are recorded on the ex-date and generally are paid to and reinvested by the Life Account on the next business day after the ex-date. Dividends are not declared by the Life Account, since the increase in the value of the underlying investment in the Fund is reflected daily in the unit price used to calculate the equity value within the Life Account. Consequently, a dividend distribution by the underlying Fund does not change either the unit price or equity values within the Life Account. NOTE 4 -- SECURITIES TRANSACTIONS Securities transactions are summarized as follows: For the year or period ended December 31, 1997 (in thousands)
MONEY MARKET BOND GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Purchase of long-term securities .................... $ 31,536 $ 7,334 $ 95,096 Proceeds from sales of long-term securities ......... 27,586 1,711 9,617 STRATEGIC TOTAL EMERGING GLOBAL RETURN GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Purchase of long-term securities .................... $ 63,481 $ 20,134 $ 51,532 Proceeds from sales of long-term securities ......... 2,595 1,789 5,791 AGGRESSIVE GROWTH & GROWTH BALANCED INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Purchase of long-term securities .................... $ 36,390 $ 4,654 $ 3,925 Proceeds from sales of long-term securities ......... 2,757 571 683 TACTICAL ASSET C.A.S.E. VALUE ALLOCATION GROWTH EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Purchase of long-term securities .................... $ 11,192 $ 8,860 $ 16,770 Proceeds from sales of long-term securities ......... 1,496 1,124 2,030 INTERNATIONAL U.S. EQUITY EQUITY SUB-ACCOUNT (A) SUB-ACCOUNT (A) Purchase of long-term securities .................... $ 4,574 $ 4,082 Proceeds from sales of long-term securities ......... 2,322 931
(a) The inception date of this sub-account was January 2, 1997. 16 W R L S e r i e s L i f e A c c o u n t WRL SERIES LIFE ACCOUNT NOTES TO FINANCIAL STATEMENTS December 31, 1997 (continued) ---------------------------------- NOTE 5 -- EQUITY TRANSACTIONS For the year or period ended December 31, 1997
MONEY MARKET BOND GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Units balance - beginning of year ........... 824,579.964824 593,289.952352 7,208,481.980640 Units issued ................................ 9,508,542.992920 567,591.792111 2,877,261.682232 Units redeemed .............................. 9,313,607.867949 325,011.550833 2,113,732.157906 ---------------- ---------------- ---------------- Units balance - end of year ................. 1,019,515.089795 835,870.193630 7,972,011.504966 ================ ================ ================ STRATEGIC TOTAL EMERGING GLOBAL RETURN GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Units balance - beginning of year ........... 5,497,026.869725 3,569,906.038362 5,531,857.748031 Units issued ................................ 5,204,689.424549 1,808,954.429690 4,085,290.537514 Units redeemed .............................. 2,556,813.294554 1,108,535.542298 2,603,771.462693 ---------------- ---------------- ---------------- Units balance - end of year ................. 8,144,902.999720 4,270,324.925754 7,013,376.822852 ================ ================ ================ AGGRESSIVE GROWTH & GROWTH BALANCED INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Units balance - beginning of year ........... 3,702,244.184822 525,703.773282 422,239.257570 Units issued ................................ 3,540,013.078309 471,558.712099 351,937.078911 Units redeemed .............................. 2,011,986.165118 240,908.819634 211,046.686884 ---------------- ---------------- ---------------- Units balance - end of year ................. 5,230,271.098013 756,353.665747 563,129.649597 ================ ================ ================ TACTICAL ASSET C.A.S.E. VALUE ALLOCATION GROWTH EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT Units balance - beginning of year ........... 1,329,562.261984 413,189.701539 789,884.882222 Units issued ................................ 1,163,050.985561 930,816.590801 1,771,718.827803 Units redeemed .............................. 625,352.214528 374,627.211274 645,715.985962 ---------------- ---------------- ---------------- Units balance - end of year ................. 1,867,261.033017 969,379.081066 1,915,887.724063 ================ ================ ================ INTERNATIONAL U.S. EQUITY EQUITY SUB-ACCOUNT (A) SUB-ACCOUNT (A) Units balance - beginning of period ......... N/A N/A Units issued ................................ 484,482.761817 392,911.124759 Units redeemed .............................. 269,593.719591 134,098.291700 ---------------- ---------------- Units balance - end of period ............... 214,889.042226 258,812.833059 ================ ================
(a) The inception date of this sub-account was January 2, 1997. 1 9 9 7 A n n u a l R e p o r t 17 WRL SERIES LIFE ACCOUNT NOTES TO FINANCIAL STATEMENTS December 31, 1997 (continued) ---------------------------------- NOTE 6 -- OTHER MATTERS At December 31, 1997, the equity accounts included net unrealized appreciation (depreciation) on investments as follows (in thousands):
SUB-ACCOUNT - ---------------------------------- Money Market ................... $ N/A Bond ........................... 331 Growth ......................... 90,809 Global ......................... 8,984 Strategic Total Return ......... 13,770 Emerging Growth ................ 31,177 Aggressive Growth .............. 9,032 Balanced ....................... 677 Growth & Income ................ 482 Tactical Asset Allocation ...... 2,489 C.A.S.E. Growth ................ (235) Value Equity ................... 3,178 International Equity ........... (103) U.S. Equity .................... 15
18 W R L S e r i e s L i f e A c c o u n t This Page Intentionally Left Blank 19 1 9 9 7 A n n u a l R e p o r t This Page Intentionally Left Blank 20 W R L S e r i e s L i f e A c c o u n t /diamond/ WRL SERIES LIFE ACCOUNT OFFICE OF THE WRL SERIES LIFE ACCOUNT 201 Highland Avenue Largo, FL 33770-2597 1-800-851-9777 DISTRIBUTOR: InterSecurities, Inc. 201 Highland Avenue Largo, FL 33770-2597 INSURER: Western Reserve Life Assurance Co. of Ohio 201 Highland Avenue Largo, FL 33770-2597 INDEPENDENT ACCOUNTANTS: Price Waterhouse LLP 1055 Broadway Kansas City, MO 64105 THIS MATERIAL IS FOR POLICY HOLDER'S REPORTING PURPOSES ONLY AND SHALL NOT BE USED IN CONNECTION WITH A SOLICITATION, OFFER OR ANY PROPOSED SALE OR PURCHASE OF SECURITIES. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS. [LOGO] -------------------------------------------------- Western Reserve Life Assurance Co. of Ohio Distributor: InterSecurities, Inc. 201 Highland Avenue /bullet/ Largo, Florida 33770-2597 February 1998 ACC00003 (2/98) -----END PRIVACY-ENHANCED MESSAGE-----