-----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, SrsTSiPaqad4sPsSwet8SKsZGg/fO6yxu9diZuxkb3LPZJl9IDj2Fr6L0iK8pcCn hXKhS+In70+ddQYjT4VU2g== 0001016843-99-000164.txt : 19990226 0001016843-99-000164.hdr.sgml : 19990226 ACCESSION NUMBER: 0001016843-99-000164 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19990225 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: 99550280 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 - -------------------------------------------------------------------------------- TABLE OF CONTENTS PAGE WRL SERIES LIFE ACCOUNT Report of Independent Accountants...................... 1 Statement of Assets and Liabilities.................... 3 Statement of Operations................................ 6 Statement of Changes In Net Assets..................... 9 Financial Highlights................................... 14 Notes to the Financial Statements...................... 19 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 statement of assets and liabilities and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of 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, 1998, the results of each of their operations, the changes in each of their net assets and the finanical highlights for each of the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the 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. PricewaterhouseCoopers LLP Boston, Massachusetts January 29, 1999 1
WRL SERIES LIFE ACCOUNT STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1998 ALL AMOUNTS (EXCEPT UNIT VALUES) IN THOUSANDS MONEY MARKET BOND GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ----------- ----------- ASSETS: Investment in WRL Series Fund, Inc.: Shares 24,472 2,150 13,310 ========= ========= ========= Cost $ 24,472 $ 24,523 $ 423,759 ========= ========= ========= Investment, at net asset value $ 24,472 $ 24,925 $ 797,795 Transfers receivable from depositor 104 9 232 --------- --------- --------- Total assets 24,576 24,934 798,027 --------- --------- --------- LIABILITIES: Accrued expenses 0 0 0 Transfers payable to depositor 0 0 0 --------- --------- --------- Total liabilities 0 0 0 --------- --------- --------- Net assets $ 24,576 $ 24,934 $ 798,027 ========= ========= ========= NET ASSETS CONSISTS OF: Policy Owners' equity $ 24,576 $ 24,934 $ 798,027 Depositor's equity 0 0 0 --------- --------- --------- Net assets applicable to units outstanding $ 24,576 $ 24,934 $ 798,027 ========= ========= ========= Policy Owners' units 1,460 1,090 8,668 Depositor's units 0 0 0 --------- --------- --------- Units outstanding 1,460 1,090 8,668 ========= ========= ========= Accumulation unit value $ 16.83 $ 22.89 $ 92.07 ========= ========= ========= STRATEGIC EMERGING GLOBAL TOTAL RETURN GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ------------ ----------- ASSETS: Investment in WRL Series Fund, Inc.: Shares 9,833 6,028 9,752 ========= ========= ========= Cost $ 189,249 $ 81,865 $ 176,852 ========= ========= ========= Investment, at net asset value $ 233,131 $ 98,885 $ 262,548 Transfers receivable from depositor 125 41 117 --------- --------- --------- Total assets 233,256 98,926 262,665 --------- --------- --------- LIABILITIES: Accrued expenses 0 0 0 Transfers payable to depositor 0 0 0 --------- --------- --------- Total liabilities 0 0 0 --------- --------- --------- Net assets $ 233,256 $ 98,926 $ 262,665 ========= ========= ========= NET ASSETS CONSISTS OF: Policy Owners' equity $ 233,256 $ 98,926 $ 262,665 Depositor's equity 0 0 0 --------- --------- --------- Net assets applicable to units outstanding $ 233,256 $ 98,926 $ 262,665 ========= ========= ========= Policy Owners' units 10,167 4,814 8,218 Depositor's units 0 0 0 --------- --------- --------- Units outstanding 10,167 4,814 8,218 ========= ========= ========= Accumulation unit value $ 22.94 $ 20.55 $ 31.96 ========= ========= =========
The notes to the financial statements are an integral part of this report. 3
WRL SERIES LIFE ACCOUNT STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1998 ALL AMOUNTS (EXCEPT UNIT VALUES) IN THOUSANDS AGGRESSIVE GROWTH & GROWTH BALANCED INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ----------- ----------- ASSETS: Investment in WRL Series Fund, Inc.: Shares 7,923 1,185 1,306 ========= ========= ========= Cost $ 126,802 $ 13,872 $ 16,213 ========= ========= ========= Investment, at net asset value $ 177,787 $ 14,863 $ 16,036 Transfers receivable from depositor 70 1 11 --------- --------- --------- Total assets 177,857 14,864 16,047 --------- --------- --------- LIABILITIES: Accrued expenses 0 0 0 Transfers payable to depositor 0 0 0 --------- --------- --------- Total liabilities 0 0 0 --------- --------- --------- Net assets $ 177,857 $ 14,864 $ 16,047 ========= ========= ========= NET ASSETS CONSISTS OF: Policy Owners' equity $ 177,857 $ 14,864 $ 16,047 Depositor's equity 0 0 0 --------- --------- --------- Net assets applicable to units outstanding $ 177,857 $ 14,864 $ 16,047 ========= ========= ========= Policy Owners' units 6,669 990 976 Depositor's units 0 0 0 --------- --------- --------- Units outstanding 6,669 990 976 ========= ========= ========= Accumulation unit value $ 26.67 $ 15.02 $ 16.44 ========= ========= ========= TACTICAL ASSET C.A.S.E. ALLOCATION GROWTH VALUE EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------- ----------- ------------ ASSETS: Investment in WRL Series Fund, Inc.: Shares 2,988 1,364 2,152 ========= ========= ========= Cost $ 38,916 $ 19,242 $ 28,825 ========= ========= ========= Investment, at net asset value $ 39,889 $ 17,718 $ 26,066 Transfers receivable from depositor 15 12 17 --------- --------- --------- Total assets 39,904 17,730 26,083 --------- --------- --------- LIABILITIES: Accrued expenses 0 0 0 Transfers payable to depositor 0 0 0 --------- --------- --------- Total liabilities 0 0 0 --------- --------- --------- Net assets $ 39,904 $ 17,730 $ 26,083 ========= ========= ========= NET ASSETS CONSISTS OF: Policy Owners' equity $ 39,904 $ 17,730 $ 26,083 Depositor's equity 0 0 0 --------- --------- --------- Net assets applicable to units outstanding $ 39,904 $ 17,730 $ 26,083 ========= ========= ========= Policy Owners' units 2,383 1,417 1,982 Depositor's units 0 0 0 --------- --------- --------- Units outstanding 2,383 1,417 1,982 ========= ========= ========= Accumulation unit value $ 16.74 $ 12.51 $ 13.16 ========= ========= =========
The notes to the financial statements are an integral part of this report. 4
WRL SERIES LIFE ACCOUNT STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1998 ALL AMOUNTS (EXCEPT UNIT VALUES) IN THOUSANDS INTERNATIONAL U.S. THIRD AVENUE EQUITY EQUITY VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------- ----------- ------------ ASSETS: Investment in WRL Series Fund, Inc.: Shares 483 976 302 ========= ========= ========= Cost $ 5,705 $ 13,010 $ 2,904 ========= ========= ========= Investment, at net asset value $ 5,824 $ 14,078 $ 2,801 Transfers receivable from depositor 3 6 6 --------- --------- --------- Total assets 5,827 14,084 2,807 --------- --------- --------- LIABILITIES: Accrued expenses 0 0 0 Transfers payable to depositor 0 0 0 --------- --------- --------- Total liabilities 0 0 0 --------- --------- --------- Net assets $ 5,827 $ 14,084 $ 2,807 ========= ========= ========= NET ASSETS CONSISTS OF: Policy Owners' equity $ 5,827 $ 14,084 $ 2,622 Depositor's equity 0 0 185 --------- --------- --------- Net assets applicable to units outstanding $ 5,827 $ 14,084 $ 2,807 ========= ========= ========= Policy Owners' units 489 919 284 Depositor's units 0 0 20 --------- --------- --------- Units outstanding 489 919 304 ========= ========= ========= Accumulation unit value $ 11.92 $ 15.33 $ 9.23 ========= ========= ========= REAL ESTATE SECURITIES SUB-ACCOUNT ----------- ASSETS: Investment in WRL Series Fund, Inc.: Shares 83 ======== Cost $ 784 ======== Investment, at net asset value $ 708 Transfers receivable from depositor 1 -------- Total assets 709 -------- LIABILITIES: Accrued expenses 0 Transfers payable to depositor 0 -------- Total liabilities 0 -------- Net assets $ 709 ======== NET ASSETS CONSISTS OF: Policy Owners' equity $ 371 Depositor's equity 338 -------- Net assets applicable to units outstanding $ 709 ======== Policy Owners' units 44 Depositor's units 40 -------- Units outstanding 84 ======== Accumulation unit value $ 8.46 ========
The notes to the financial statements are an integral part of this report. 5
WRL SERIES LIFE ACCOUNT STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 ALL AMOUNTS IN THOUSANDS MONEY MARKET BOND GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ----------- ---------- INVESTMENT INCOME: Dividend income $ 1,113 $ 1,196 $ 1,180 Capital gain distributions 0 0 5,200 --------- --------- --------- Total investment income 1,113 1,196 6,380 EXPENSES: Mortality and expense risk 194 194 5,277 --------- --------- --------- Net investment income (loss) 919 1,002 1,103 --------- --------- --------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from securities transactions 0 642 12,232 Change in unrealized appreciation (depreciation) 0 71 283,227 --------- --------- --------- Net gain (loss) on investment securities 0 713 295,459 --------- --------- --------- Net increase (decrease) in net assets resulting from operation $ 919 $ 1,715 $ 296,562 ========= ========= ========= STRATEGIC EMERGING GLOBAL TOTAL RETURN GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ------------ ----------- INVESTMENT INCOME: Dividend income $ 1,092 $ 2,240 $ 0 Capital gain distributions 8,026 1,844 8,683 --------- --------- ------- Total investment income 9,118 4,084 8,683 EXPENSES: Mortality and expense risk 1,693 800 1,789 --------- --------- ------- Net investment income (loss) 7,425 3,284 6,894 --------- --------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from securities transactions 3,529 1,097 4,995 Change in unrealized appreciation (depreciation) 34,898 3,250 54,519 --------- --------- ------- Net gain (loss) on investment securities 38,427 4,347 59,514 --------- --------- ------- Net increase (decrease) in net assets resulting from operation $ 45,852 $ 7,631 $ 66,408 ========= ========= =========
The notes to the financial statements are an integral part of this report. 6
WRL SERIES LIFE ACCOUNT STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 ALL AMOUNTS IN THOUSANDS AGGRESSIVE GROWTH & GROWTH BALANCED INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ----------- ----------- INVESTMENT INCOME: Dividend income $ 356 $ 329 $ 651 Capital gain distributions 8,627 13 112 -------- -------- -------- Total investment income 8,983 342 763 EXPENSES: Mortality and expense risk 1,132 115 119 -------- -------- -------- Net investment income (loss) 7,851 227 644 -------- -------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from securities transactions 2,395 262 390 Change in unrealized appreciation (depreciation) 41,953 314 (659) -------- -------- -------- Net gain (loss) on investment securities 44,348 576 (269) -------- -------- -------- Net increase (decrease) in net assets resulting from operation $ 52,199 $ 803 $ 375 ======== ======== ======== TACTICAL ASSET C.A.S.E. ALLOCATION GROWTH VALUE EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- ----------- ------------ INVESTMENT INCOME: Dividend income $ 1,115 $ 1,514 $ 530 Capital gain distributions 2,619 90 1,755 --------- --------- -------- Total investment income 3,734 1,604 2,285 EXPENSES: Mortality and expense risk 315 129 264 --------- --------- -------- Net investment income (loss) 3,419 1,475 2,021 --------- --------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from securities transactions 429 175 1,254 Change in unrealized appreciation (depreciation) (1,516) (1,289) (5,937) --------- --------- -------- Net gain (loss) on investment securities (1,087) (1,114) (4,683) --------- --------- -------- Net increase (decrease) in net assets resulting from operation $ 2,332 $ 361 $ (2,662) ========= ========= ========
The notes to the financial statements are an integral part of this report. 7
WRL SERIES LIFE ACCOUNT STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 ALL AMOUNTS IN THOUSANDS INTERNATIONAL U.S. THIRD AVENUE EQUITY EQUITY VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT (A) ------------- ----------- --------------- INVESTMENT INCOME: Dividend income $ 3 $ 413 $ 8 Capital gain distributions 0 94 0 ------- -------- ------- Total investment income 3 507 8 EXPENSES: Mortality and expense risk 35 73 19 ------- -------- ------- Net investment income (loss) (32) 434 (11) ------- -------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from securities transactions 147 358 (39) Change in unrealized appreciation (depreciation) 222 1,053 (103) ------- -------- ------- Net gain (loss) on investment securities 369 1,411 (142) ------- -------- ------- Net increase (decrease) in net assets resulting from operation $ 337 $ 1,845 $ (153) ======= ======== ======= REAL ESTATE SECURITIES SUB-ACCOUNT (B) --------------- INVESTMENT INCOME: Dividend income $ 0 Capital gain distributions 0 ------- Total investment income 0 EXPENSES: Mortality and expense risk 4 ------- Net investment income (loss) (4) ------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from securities transactions (36) Change in unrealized appreciation (depreciation) (76) ------- Net gain (loss) on investment securities (112) ------- Net increase (decrease) in net assets resulting from operation $ (116) =======
(a) The inception date of this Sub-Account was January 2, 1998. (b) The inception date of this Sub-Account was May 1, 1998. The notes to the financial statements are an integral part of this report. 8
WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED ALL AMOUNTS IN THOUSANDS MONEY MARKET BOND GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------------- ------------------ ------------------ 1998 1997 1998 1997 1998 1997 -------- -------- -------- -------- -------- -------- OPERATIONS: Net investment income (loss) $ 919 $ 639 $ 1,002 $ 661 $ 1,103 $ 44,206 Net gain (loss) on investment securities 0 0 713 418 295,459 15,238 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations 919 639 1,715 1,079 296,562 59,444 -------- -------- -------- -------- -------- -------- CAPITAL UNIT TRANSACTIONS: Proceeds from units sold (transferred) 12,763 7,719 9,472 7,506 140,684 106,236 -------- -------- -------- -------- -------- -------- Less cost of units redeemed: Administrative charges 3,123 3,108 2,292 1,633 44,910 37,231 Policy loans 1,163 687 594 428 18,083 11,212 Surrender benefits 1,250 854 865 437 22,312 15,746 Death benefits 10 9 159 15 4,185 711 5,546 4,658 3,910 2,513 89,490 64,900 -------- -------- -------- -------- -------- -------- Increase (decrease) in net assets from capital unit transactions 7,217 3,061 5,562 4,993 51,194 41,336 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets 8,136 3,700 7,277 6,072 347,756 100,780 Depositor's equity contribution (redemption) 0 0 0 0 0 0 NET ASSETS: Beginning of year 16,440 12,740 17,657 11,585 450,271 349,491 -------- -------- -------- -------- -------- -------- End of year $ 24,576 $ 16,440 $ 24,934 $ 17,657 $798,027 $450,271 ======== ======== ======== ======== ======== ======== UNIT ACTIVITY: Units outstanding - beginning of year 1,020 825 836 593 7,972 7,208 Units issued 11,339 9,509 1,030 568 2,967 2,877 Units redeemed (10,899) (9,314) (776) (325) (2,271) (2,113) -------- -------- -------- -------- -------- -------- Units outstanding - end of year 1,460 1,020 1,090 836 8,668 7,972 ======== ======== ======== ======== ======== ========
The notes to the financial statements are an integral part of this report. 9
WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED ALL AMOUNTS IN THOUSANDS STRATEGIC GLOBAL TOTAL RETURN EMERGING GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------------- ------------------ ------------------ 1998 1997 1998 1997 1998 1997 -------- -------- -------- -------- -------- -------- OPERATIONS: Net investment income (loss) $ 7,425 $ 15,859 $ 3,284 $ 6,101 $ 6,894 $ 13,841 Net gain (loss) on investment securities 38,427 805 4,347 6,521 59,514 10,932 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations 45,852 16,664 7,631 12,622 66,408 24,773 -------- -------- -------- -------- -------- -------- CAPITAL UNIT TRANSACTIONS: Proceeds from units sold (transferred) 72,962 64,272 24,191 22,072 64,824 54,392 -------- -------- -------- -------- -------- -------- Less cost of units redeemed: Administrative charges 19,369 12,590 7,696 6,025 19,612 14,518 Policy loans 4,953 2,948 2,319 1,624 5,601 3,692 Surrender benefits 5,662 3,391 2,587 2,044 7,688 3,986 Death benefits 591 149 1,047 148 368 192 -------- -------- -------- -------- -------- -------- 30,575 19,078 13,649 9,841 33,269 22,388 -------- -------- -------- -------- -------- -------- Increase (decrease) in net assets from capital unit transactions 42,387 45,194 10,542 12,231 31,555 32,004 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets 88,239 61,858 18,173 24,853 97,963 56,777 Depositor's equity contribution (redemption) 0 0 0 0 0 0 NET ASSETS: Beginning of year 145,017 83,159 80,753 55,900 164,702 107,925 -------- -------- -------- -------- -------- -------- End of year $233,256 $145,017 $98,926 $80,753 $262,665 $164,702 ======== ======== ======= ======= ======== ======== UNIT ACTIVITY: Units outstanding - beginning of year 8,145 5,497 4,270 3,570 7,013 5,532 Units issued 5,610 5,205 1,946 1,809 4,099 4,085 Units redeemed (3,588) (2,557) (1,402) (1,109) (2,894) (2,604) -------- -------- -------- -------- -------- -------- Units outstanding - end of year 10,167 8,145 4,814 4,270 8,218 7,013 ======== ======== ======= ======= ======== ========
The notes to the financial statements are an integral part of this report. 10
WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED ALL AMOUNTS IN THOUSANDS AGGRESSIVE GROWTH BALANCED GROWTH & INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------------ ------------------- ------------------ 1998 1997 1998 1997 1998 1997 -------- -------- -------- -------- -------- -------- OPERATIONS: Net investment income (loss) $ 7,851 $ 7,795 $ 227 $ 992 $ 644 $ 1,214 Net gain (loss) on investment securities 44,348 6,524 576 226 (269) 283 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations 52,199 14,319 803 1,218 375 1,497 -------- -------- -------- -------- -------- -------- CAPITAL UNIT TRANSACTIONS: Proceeds from units sold (transferred) 53,159 40,282 5,658 4,373 8,963 3,232 -------- -------- -------- -------- -------- -------- Less cost of units redeemed: Administrative charges 13,960 9,888 1,423 958 1,633 733 Policy loans 3,522 1,926 279 179 218 163 Surrender benefits 4,423 2,485 596 153 431 260 Death benefits 248 58 15 3 72 11 -------- -------- -------- -------- -------- -------- 22,153 14,357 2,313 1,293 2,354 1,167 -------- -------- -------- -------- -------- -------- Increase (decrease) in net assets from capital unit transactions 31,006 25,925 3,345 3,080 6,609 2,065 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets 83,205 40,244 4,148 4,298 6,984 3,562 Depositor's equity contribution (redemption) 0 0 0 0 0 0 NET ASSETS: Beginning of year 94,652 54,408 10,716 6,418 9,063 5,501 -------- -------- -------- -------- -------- -------- End of year $177,857 $94,652 $14,864 $10,716 $16,047 $ 9,063 ======== ======= ======= ======= ======= ======= UNIT ACTIVITY: Units outstanding - beginning of year 5,230 3,702 756 526 563 422 Units issued 3,797 3,540 578 472 966 352 Units redeemed (2,358) (2,012) (344) (242) (553) (211) -------- -------- -------- -------- -------- -------- Units outstanding - end of year 6,669 5,230 990 756 976 563 ======== ======= ======= ======= ======= =======
The notes to the financial statements are an integral part of this report. 11
WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED ALL AMOUNTS IN THOUSANDS TACTICAL ASSET ALLOCATION C.A.S.E. GROWTH VALUE EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------------ ------------------- ------------------ 1998 1997 1998 1997 1998 1997 -------- -------- -------- -------- -------- -------- OPERATIONS: Net investment income (loss) $ 3,419 $ 1,913 $ 1,475 $ 994 $ 2,021 $ 183 Net gain (loss) on investment securities (1,087) 1,362 (1,114) (252) (4,683) 3,038 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations 2,332 3,275 361 742 (2,662) 3,221 -------- -------- -------- -------- -------- -------- CAPITAL UNIT TRANSACTIONS: Proceeds from units sold (transferred) 13,703 11,386 8,731 8,029 6,086 17,023 -------- -------- -------- -------- -------- -------- Less cost of units redeemed: Administrative charges 3,421 2,219 2,433 970 2,846 1,257 Policy loans 748 463 520 146 643 542 Surrender benefits 925 742 295 144 401 388 Death benefits 160 60 60 6 165 0 -------- -------- -------- -------- -------- -------- 5,254 3,484 3,308 1,266 4,055 2,187 -------- -------- -------- -------- -------- -------- Increase (decrease) in net assets from capital unit transactions 8,449 7,902 5,423 6,763 2,031 14,836 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets 10,781 11,177 5,784 7,505 (631) 18,057 Depositor's equity contribution (redemption) 0 0 0 (25) 0 (230) NET ASSETS: Beginning of year 29,123 17,946 11,946 4,466 26,714 8,887 -------- -------- -------- -------- -------- -------- End of year $ 39,904 $ 29,123 $ 17,730 $ 11,946 $ 26,083 $ 26,714 ======== ======== ======== ======== ======== ======== UNIT ACTIVITY: Units outstanding - beginning of year 1,867 1,330 969 413 1,916 790 Units issued 1,377 1,163 1,317 931 1,748 1,772 Units redeemed (861) (626) (869) (375) (1,682) (646) -------- -------- -------- -------- -------- -------- Units outstanding - end of year 2,383 1,867 1,417 969 1,982 1,916 ======== ======== ======== ======== ======== ========
The notes to the financial statements are an integral part of this report. 12
WRL SERIES LIFE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED ALL AMOUNTS IN THOUSANDS INTERNATIONAL EQUITY U.S. EQUITY THIRD AVENUE REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT VALUE SECURITIES DECEMBER 31, DECEMBER 31, SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------ DECEMBER 31, DECEMBER 31, 1998 1997 (a) 1998 1997 (a) 1998 (b) 1998 (c) --------- -------- -------- -------- ------------ ------------ OPERATIONS: Net investment income (loss) $ (32) $ (4) $ 434 $ 107 $ (11) $ (4) Net gain (loss) on investment securities 369 31 1,411 96 (142) (112) -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations 337 27 1,845 203 (153) (116) -------- -------- -------- -------- -------- -------- CAPITAL UNIT TRANSACTIONS: Proceeds from units sold (transferred) 3,972 2,458 10,178 3,208 2,932 472 -------- -------- -------- -------- -------- -------- Less cost of units redeemed: Administrative charges 433 117 862 91 138 4 Policy loans 196 59 159 56 8 43 Surrender benefits 35 14 113 9 26 0 Death benefits 107 0 63 0 0 0 -------- -------- -------- -------- -------- -------- 771 190 1,197 156 172 47 -------- -------- -------- -------- -------- -------- Increase (decrease) in net assets from capital unit transactions 3,201 2,268 8,981 3,052 2,760 425 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets 3,538 2,295 10,826 3,255 2,607 309 Depositor's equity contribution (redemption) 0 (6) 0 3 200 400 NET ASSETS: Beginning of year 2,289 0 3,258 0 0 0 -------- -------- -------- -------- -------- -------- End of year $ 5,827 $ 2,289 $ 14,084 $ 3,258 $ 2,807 $ 709 ======== ======== ======== ======== ======== ======== UNIT ACTIVITY: Units outstanding - beginning of year 215 0 259 0 0 0 Units issued 767 484 1,266 393 495 113 Units redeemed (493) (269) (606) (134) (191) (29) -------- -------- -------- -------- -------- -------- Units outstanding - end of year 489 215 919 259 304 84 ======== ======== ======== ======== ======== ======== (a) The inception date of this Sub-Account was January 2, 1997. (b) The inception date of this Sub-Account was January 2, 1998. (c) The inception date of this Sub-Account was May 1, 1998.
The notes to the financial statements are an integral part of this report. 13
WRL SERIES LIFE ACCOUNT FINANCIAL HIGHLIGHTS* FOR THE YEAR ENDED MONEY MARKET SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 16.13 $ 15.45 $ 14.83 $ 14.19 $ 13.84 Income from operations: Net investment income (loss) 0.70 0.68 0.62 0.64 0.35 Net realized and unrealized gain (loss) on investment 0.00 0.00 0.00 0.00 0.00 -------- -------- -------- -------- -------- Net income (loss) from operations 0.70 0.68 0.62 0.64 0.35 -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 16.83 $ 16.13 $ 15.45 $ 14.83 $ 14.19 ======== ======== ======== ======== ======== Total return (a) 4.36 % 4.37 % 4.17 % 4.49 % 2.58 % Ratios and supplemental data: Net assets at end of year (in thousands) $ 24,576 $ 16,440 $ 12,740 $ 10,759 $ 9,706 Ratios of net investment income (loss) to average net assets (b) 4.24 % 4.28 % 4.07 % 4.37 % 2.66 % BOND SUB-ACCOUNT December 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 21.12 $ 19.53 $ 19.67 $ 16.14 $ 17.50 Income from operations: Net investment income (loss) 1.01 1.01 0.99 1.05 0.89 Net realized and unrealized gain (loss) on investment 0.76 0.58 (1.13) 2.48 (2.25) -------- -------- -------- -------- -------- Net income (loss) from operations 1.77 1.59 (0.14) 3.53 (1.36) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 22.89 $ 21.12 $ 19.53 $ 19.67 $ 16.14 ======== ======== ======== ======== ======== Total return (a) 8.34 % 8.18 % (0.75)% 21.89 % (7.77)% Ratios and supplemental data: Net assets at end of year (in thousands) $ 24,934 $ 17,657 $ 11,585 $ 10,066 $ 6,259 Ratios of net investment income (loss) to average net assets (b) 4.58 % 5.06 % 5.34 % 5.80 % 5.57 % GROWTH SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 56.48 $ 48.48 $ 41.47 $ 28.44 $ 31.30 Income from operations: Net investment income (loss) 0.13 5.83 2.88 3.89 0.04 Net realized and unrealized gain (loss) on investment 35.46 2.17 4.13 9.14 (2.90) -------- -------- -------- -------- -------- Net income (loss) from operations 35.59 8.00 7.01 13.03 (2.86) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 92.07 $ 56.48 $ 48.48 $ 41.47 $ 28.44 ======== ======== ======== ======== ======== Total return (a) 63.01 % 16.50 % 16.91 % 45.81 % (9.13)% Ratios and supplemental data: Net assets at end of year (in thousands) $798,027 $450,271 $349,491 $262,467 $161,490 Ratios of net investment income (loss) to average net assets (b) 0.19 % 10.84 % 6.41 % 11.05 % 0.16 %
The notes to the financial statements are an integral part of this report. 14
WRL SERIES LIFE ACCOUNT FINANCIAL HIGHLIGHTS* FOR THE YEAR ENDED GLOBAL SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 (c) -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 17.80 $ 15.13 $ 11.95 $ 9.80 $ 10.00 Income from operations: Net investment income (loss) 0.82 2.30 1.50 0.45 0.71 Net realized and unrealized gain (loss) on investment 4.32 0.37 1.68 1.70 (0.91) -------- -------- -------- -------- -------- Net income (loss) from operations 5.14 2.67 3.18 2.15 (0.20) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 22.94 $ 17.80 $ 15.13 $ 11.95 $ 9.80 ======== ======== ======== ======== ======== Total return (a) 28.86 % 17.69 % 26.60.% 21.96 % (2.02)% Ratios and supplemental data: Net assets at end of year (in thousands) $233,256 $145,017 $ 83,159 $ 37,049 $ 21,672 Ratios of net investment income (loss) to average net assets (b) 3.92 % 13.39 % 11.09 % 4.25 % 8.86 % STRATEGIC TOTAL RETURN SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 18.91 $ 15.66 $ 13.74 $ 11.12 $ 11.28 Income from operations: Net investment income (loss) 0.71 1.56 0.82 0.68 0.18 Net realized and unrealized gain (loss) on investment 0.93 1.69 1.10 1.94 (0.34) -------- -------- -------- -------- -------- Net income (loss) from operations 1.64 3.25 1.92 2.62 (0.16) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 20.55 $ 18.91 $ 15.66 $ 13.74 $ 11.12 ======== ======== ======== ======== ======== Total return (a) 8.66 % 20.77 % 13.97 % 23.55 % (1.42)% Ratios and supplemental data: Net assets at end of year (in thousands) $ 98,926 $ 80,753 $ 55,900 $ 39,648 $ 23,649 Ratios of net investment income (loss) to average net assets (b) 3.67 % 8.89 % 5.76 % 5.47 % 1.93 % EMERGING GROWTH SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 23.48 $ 19.51 $ 16.56 $ 11.38 $ 12.40 Income from operations: Net investment income (loss) 0.91 2.20 0.82 0.65 (0.09) Net realized and unrealized gain (loss) on investment 7.57 1.77 2.13 4.53 (0.93) -------- -------- -------- -------- -------- Net income (loss) from operations 8.48 3.97 2.95 5.18 (1.02) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 31.96 $ 23.48 $ 19.51 $ 16.56 $ 11.38 ======== ======== ======== ======== ======== Total return (a) 36.11 % 20.37 % 17.82 % 45.49 % (8.18)% Ratios and supplemental data: Net assets at end of year (in thousands) $262,665 $164,702 $107,925 $ 67,905 $ 36,687 Ratios of net investment income (loss) to average net assets (b) 3.44 % 10.18 % 4.51 % 4.66 % (0.86)%
The notes to the financial statements are an integral part of this report. 15
WRL SERIES LIFE ACCOUNT FINANCIAL HIGHLIGHTS* FOR THE YEAR ENDED AGGRESSIVE GROWTH SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 (c) -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 18.10 $ 14.70 $ 13.43 $ 9.82 $ 10.00 Income from operations: Net investment income (loss) 1.33 1.75 0.36 0.37 (0.06) Net realized and unrealized gain (loss) on investment 7.24 1.65 0.91 3.24 (0.12) -------- -------- -------- -------- -------- Net income (loss) from operations 8.57 3.40 1.27 3.61. (0.18) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 26.67 $ 18.10 $ 14.70 $ 13.43 $ 9.82 ======== ======== ======== ======== ======== Total return (a) 47.36 % 23.14 % 9.46 % 36.79 % (1.85)% Ratios and supplemental data: Net assets at end of year (in thousands) $177,857 $ 94,652 $ 54,408 $ 32,904 $ 8,909 Ratios of net investment income (loss) to average net assets (b) 6.20 % 10.26 % 2.65 % 2.93 % (0.72)% BALANCED SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 (c) -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 14.17 $ 12.21 $ 11.13 $ 9.37 $ 10.00 Income from operations: Net investment income (loss) 0.25 1.55 0.36 0.37 0.22 Net realized and unrealized gain (loss) on investment 0.60 0.41 0.72 1.39 (0.85) -------- -------- -------- -------- -------- Net income (loss) from operations 0.85 1.96 1.08 1.76 (0.63) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 15.02 $ 14.17 $ 12.21 $ 11.13 $ 9.37 Total return (a) 5.98 % 16.06 % 9.73 % 18.73 % (6.29)% Ratios and supplemental data: Net assets at end of year (in thousands) $ 14,864 $ 10,716 $ 6,418 $ 3,795 $ 2,145 Ratios of net investment income (loss) to average net assets (b) 1.76 % 11.62 % 3.18 % 3.59 % 3.06 % GROWTH & INCOME SUB-ACCOUNT DECEMBER 31, ------------------------------------------------------ 1998 1997 1996 1995 1994 (c) -------- -------- -------- -------- -------- Accumulation unit value, beginning of year $ 16.09 $ 13.03 $ 11.77 $ 9.49 $ 10.00 Income from operations: Net investment income (loss) 0.77 2.61 0.76 0.49 0.29 Net realized and unrealized gain (loss) on investment (0.42) 0.45 0.50 1.79 (0.80) -------- -------- -------- -------- -------- Net income (loss) from operations 0.35 3.06 1.26 2.28 (0.51) -------- -------- -------- -------- -------- Accumulation unit value, end of year $ 16.44 $ 16.09 $ 13.03 $ 11.77 $ 9.49 Total return (a) 2.13 % 23.54 % 10.64 % 24.14 % (5.15)% Ratios and supplemental data: Net assets at end of year (in thousands) $ 16,047 $ 9,063 $ 5,501 $ 2,631 $ 1,215 Ratios of net investment income (loss) to average net assets (b) 4.83 % 18.50 % 6.38 % 4.57 % 3.71 %
The notes to the financial statements are an integral part of this report. 16
WRL SERIES LIFE ACCOUNT FINANCIAL HIGHLIGHTS* FOR THE YEAR ENDED TACTICAL ASSET ALLOCATION SUB-ACCOUNT DECEMBER 31, ------------------------------------------- 1998 1997 1996 1995 (d) -------- -------- -------- -------- Accumulation unit value, beginning of year $ 15.60 $ 13.50 $ 11.90 $ 10.00 Income from operations: Net investment income (loss) 1.58 1.20 0.53 0.61 Net realized and unrealized gain (loss) on investment (0.44) 0.90 1.07 1.29 -------- -------- -------- -------- Net income (loss) from operations 1.14 2.10 1.60 1.90 -------- -------- -------- -------- Accumulation unit value, end of year $ 16.74 $ 15.60 $ 13.50 $ 11.90 ======== ======== ======== ======== Total return (a) 7.36 % 15.55 % 13.40 % 19.03 % Ratios and supplemental data: Net assets at end of year (in thousands) $ 39,904 $ 29,123 $ 17,946 $ 9,446 Ratios of net investment income (loss) to average net assets (b) 9.69 % 8.14 % 4.35 % 5.47 %
C.A.S.E. GROWTH SUB-ACCOUNT DECEMBER 31, ------------------------------- 1998 1997 1996 (e) -------- -------- -------- Accumulation unit value, beginning of year $ 12.32 $ 10.81 $ 10.00 Income from operations: Net investment income (loss) 1.24 1.51 0.37 Net realized and unrealized gain (loss) on investment (1.05) 0.00 0.44 -------- -------- -------- Net income (loss) from operations 0.19 1.51 0.81 -------- -------- -------- Accumulation unit value, end of year $ 12.51 $ 12.32 $ 10.81 ======== ======== ======== Total return (a) 1.56 % 14.00 % 8.09 % Ratios and supplemental data: Net assets at end of year (in thousands) $ 17,730 $ 11,946 $ 4,466 Ratios of net investment income (loss) to average net assets (b) 10.21 % 12.65 % 6.11 %
VALUE EQUITY SUB-ACCOUNT DECEMBER 31, ------------------------------- 1998 1997 1996 (e) -------- -------- -------- Accumulation unit value, beginning of year $ 13.94 $ 11.25 $ 10.00 Income from operations: Net investment income (loss) 0.95 0.14 0.05 Net realized and unrealized gain (loss) on investment (1.73) 2.55 1.20 -------- -------- -------- Net income (loss) from operations (0.78) 2.69 1.25 -------- -------- -------- Accumulation unit value, end of year $ 13.16 $ 13.94 $ 11.25 ======== ======== ======== Total return (a) (5.63)% 23.93 % 12.51 % Ratios and supplemental data: Net assets at end of year (in thousands) $ 26,083 $ 26,714 $ 8,887 Ratios of net investment income (loss) to average net assets (b) 6.84 % 1.05 % 0.77 %
The notes to the financial statements are an integral part of this report. 17
WRL SERIES LIFE ACCOUNT FINANCIAL HIGHLIGHTS* FOR THE YEAR ENDED INTERNATIONAL EQUITY U.S. EQUITY SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31, DECEMBER 31, -------------------- -------------------- 1998 1997 (f) 1998 1997 (f) -------- -------- -------- -------- Accumulation unit value, beginning of year $ 10.65 $ 10.00 $ 12.59 $ 10.00 Income from operations: Net investment income (loss) (0.09) (0.03) 0.73 0.99 Net realized and unrealized gain (loss) on investment 1.36 0.68 2.01 1.60 -------- -------- -------- -------- Net income (loss) from operations 1.27 0.65 2.74 2.59 -------- -------- -------- -------- Accumulation unit value, end of year $ 11.92 $ 10.65 $ 15.33 $ 12.59 ======== ======== ======== ======== Total return (a) 11.84 % 6.54 % 21.78 % 25.89 % Ratios and supplemental data: Net assets at end of year (in thousands) $ 5,827 $ 2,289 $ 14,084 $ 3,258 Ratios of net investment income (loss) to average net assets (b) (0.81)% (0.28)% 5.30 % 8.28 %
THIRD AVENUE REAL ESTATE VALUE SECURITIES SUB-ACCOUNT SUB-ACCOUNT DECEMBER 31, DECEMBER 31, 1998 (g) 1998 (h) -------- -------- Accumulation unit value, beginning of year $ 10.00 $ 10.00 Income from operations: Net investment income (loss) (0.05) (0.05) Net realized and unrealized gain (loss) on investment (0.72) (1.49) -------- -------- Net income (loss) from operations (0.77) (1.54) -------- -------- Accumulation unit value, end of year $ 9.23 $ 8.46 ======= ======= Total return (a) (7.67)% (15.44)% Ratios and supplemental data: Net assets at end of year (in thousands) $ 2,807 $ 709 Ratios of net investment income (loss) to average net assets (b) (0.52)% (0.90)%
NOTES TO FINANCIAL HIGHLIGHTS: *Per unit information has been computed using average units outstanding throughout each period. (a) Not annualized for periods less than one year. (b) Annualized for periods less than one year. (c) The inception date of this Sub-Account was March 1, 1994. (d) The inception date of this Sub-Account was January 3, 1995. (e) The inception date of this Sub-Account was May 1, 1996. (f) The inception date of this Sub-Account was January 2, 1997. (g) The inception date of this Sub-Account was January 2, 1998. (h) The inception date of this Sub-Account was May 1, 1998. The notes to the financial statements are an integral part of this report. 18 WRL SERIES LIFE ACCOUNT NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 1998 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 sixteen 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. On January 2, 1998 and May 1, 1998, WRL made initial contributions totaling $ 600,000 to the Life Account. The respective amounts of the contributions and units received are as follows:
SUB-ACCOUNT CONTRIBUTION UNITS - ----------- ------------ ----- Third Avenue Value $ 200,000 20,000 Real Estate Securities $ 400,000 40,000
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, have been consistently applied in the preparation of the Trust's financial statements. The preparation of financial statements required management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. 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 the Internal Revenue Code 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. 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 policy owner payments to the sub-accounts. Thereafter, monthly administrative and cost of insurance charges are deducted from the policies. 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 be subject to 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 .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. 19 WRL SERIES LIFE ACCOUNT NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1998 NOTE 3. DIVIDENDS AND DISTRIBUTIONS 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 accumulation unit value used to calculate the equity value within the Life Account. Consequently, a dividend distribution by the underlying Fund does not change either the accumulation unit value or equity values within the Life Account. NOTE 4. SECURITIES TRANSACTIONS Securities transactions for the year ended December 31, 1998 are as follows (in thousands):
PURCHASE PROCEEDS SUB-ACCOUNT: OF SECURITIES OF SECURITIES - ------------ ------------- ------------- Money Market $ 54,231 $ 46,140 Bond 14,451 7,857 Growth 72,758 20,484 Global 59,238 9,357 Strategic Total Return 17,619 3,754 Emerging Growth 49,088 10,679 Aggressive Growth 44,611 5,689 Balanced 4,604 1,017 Growth & Income 10,694 3,411 Tactical Asset Allocation 14,060 2,009 C.A.S.E. Growth 9,433 2,525 Value Equity 13,179 9,081 International Equity 6,220 3,048 U.S. Equity 12,496 3,076 Third Avenue Value (a) 3,849 906 Real Estate Securities (b) 1,047 226
(a) The inception date of this Sub-Account was January 2, 1998. (b) The inception date of this Sub-Account was May 1, 1998. NOTE 5. OTHER MATTERS At December 31, 1998 net unrealized appreciation (depreciation) on investments was as follows (in thousands):
SUB-ACCOUNT: - ------------ Money Market $ 0 Bond 402 Growth 374,036 Global 43,882 Strategic Total Return 17,020 Emerging Growth 85,696 Aggressive Growth 50,985 Balanced 991 Growth & Income (177) Tactical Asset Allocation 973 C.A.S.E. Growth (1,524) Value Equity (2,759) International Equity 119 U.S. Equity 1,068 Third Avenue Value (103) Real Estate Securities (76)
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