UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-01737
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
(Exact name of registrant as specified in charter)
8515 E. Orchard Road, Greenwood Village, Colorado 80111
(Address of principal executive offices)
BEVERLY A. BYRNE
Vice-President and Counsel
Great-West Life & Annuity Insurance Company
8515 E. Orchard Road
Greenwood Village, Colorado 80111
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 737-3000
Date of fiscal year end: December 31
Date of reporting period: June 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS
Great-West Variable Annuity Account A
Financial Statements and Financial Highlights for
The Six Months Ended June 30, 2004 and Year Ended December 31, 2003
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004
UNAUDITED
- ------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, market value (1) $ 6,012,571
Cash 166,646
Dividends and interest receivable 13,026
Due from affiliate, net 484,649
--------------------
Total assets 6,676,892
--------------------
NET ASSETS $ 6,676,892
====================
NET ASSETS REPRESENTED BY:
Accumulation units - 372,788 units at $16.55 $ 6,170,314
Reserves for annuities in course of payment 506,578
--------------------
NET ASSETS $ 6,676,892
====================
(1) Cost of investments in securities: $ 4,699,348
See notes to financial statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2004
UNAUDITED
- -------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 36
Dividends 62,411
------------------
Total income 62,447
------------------
EXPENSES:
Administration 8,651
Mortality risks 11,697
Investment management and advisory services 14,098
Expense risks 2,084
------------------
Total expenses 36,530
------------------
NET INVESTMENT INCOME 25,917
------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 99,517
Change in net unrealized appreciation on investments 192,768
------------------
Net realized and unrealized gain on investments 292,285
------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 318,202
==================
See notes to financial statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 2004 AND YEAR ENDED DECEMBER 31, 2003
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
2004 2003
---------------- -----------------
---------------- -----------------
UNAUDITED
OPERATIONS:
Net investment income $ 25,917 $ 59,815
Net realized gain on investments 99,517 205,240
Change in net unrealized appreciation on investments 192,768 1,076,895
---------------- -----------------
---------------- -----------------
Net increase in net assets resulting from operations 318,202 1,341,950
---------------- -----------------
---------------- -----------------
UNIT TRANSACTIONS:
Surrenders (22,044) (693,011)
Annuity payments (57,972) (98,154)
Adjustments to net assets allocated to reserves for annuities
in course of payment 66,670 113,213
---------------- -----------------
---------------- -----------------
Net decrease in net assets resulting from unit transactions (13,346) (677,952)
---------------- -----------------
---------------- -----------------
Total increase in net assets 304,856 663,998
NET ASSETS:
Beginning of period 6,372,036 5,708,038
---------------- -----------------
---------------- -----------------
End of period $ 6,676,892 $ 6,372,036
================ =================
================ =================
OTHER INFORMATION:
UNITS:
Redeemed during the year:
Surrender (1,365) (48,159)
---------------- -----------------
---------------- -----------------
Net decrease (1,365) (48,159)
================ =================
================ =================
See notes to financial statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Selected data for an accumulation unit for the periods indicated were as
follows:
Six Months Ended Year Ended December 31,
June 30, 2004 2003 2002 2001 2000 1999
------------- ------------- ----------- ----------- ---------- ----------
------------- ------------- ----------- ----------- ---------- ----------
UNAUDITED
Unit Value, Beginning of Period $ 15.7071 $ 12.4335 $ 13.9968 $ 14.3150 $ 12.4020 $ 11.9530
Income from Investment Operations
Net investment income 0.0730 0.2517 0.1544 0.1532 0.1605 0.1170
Net realized and unrealized gain (loss) 0.7717 3.0219 (1.7177) (0.4714) 1.7525 0.3320
------------ ------------ ----------- ----------- ---------- ----------
------------ ------------ ----------- ----------- ---------- ----------
Total Income (Loss) From
Investment Operations o 0.8447 3.2736 (1.5633) (0.3182) 1.9130 0.4490
------------ ------------ ----------- ----------- ---------- ----------
------------ ------------ ----------- ----------- ---------- ----------
Unit Value, End of Period $ 16.5518 $ 15.7071 $ 12.4335 $ 13.9968 $ 14.3150 $ 12.4020
============ ============ =========== =========== ========== ==========
============ ============ =========== =========== ========== ==========
Total Return 5.38% ^ 26.33% (11.17%) (2.22%) 15.42% 3.76%
Net Assets, End of Period $ 6,676,892 $ 5,876,858 $ 5,250,832 $ 6,166,806 $ 6,744,185 $ 7,595,677
Ratio of Expense to
Average Net Assets 1.20% * 1.21% 1.21% 1.27% 1.20% 1.22%
Ratio of Net Investment Income to
Average Net Assets 0.87% * 1.07% 0.94% 0.86% 1.40% 0.82%
Portfolio Turnover Rate 5.07% ^ 13.49% 37.55% 14.13% 15.42% 76.26%
o Net investment income and realized and unrealized gains (losses) are reflected
in the value of the accumulation units. Dividends are not declared from income
and capital gains are not distributed.
* Annualized
^ Based on operations for the period shown and, accordingly, are not
representative of a full year.
See notes to financial statements.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
UNAUDITED
- --------------------------------------------------------------------------------
1. ORGANIZATION & SIGNIFICANT ACCOUNTING POLICIES
Great-West Variable Annuity Account A (Variable Annuity Account A) is a
separate and distinct investment fund established by The Great-West Life
Assurance Company (Great-West Life). On December 31, 1991, Variable
Annuity Account A was transferred to and the variable annuity contracts
were reinsured by Great-West Life & Annuity Insurance Company (GWL&A),
an affiliate of Great-West Life. Variable Annuity Account A is
registered as an open-end diversified management investment company
under the Investment Company Act of 1940, and the registration under the
Securities Act of 1933 of the group variable annuity contracts funded by
Variable Annuity Account A became effective on November 27, 1968.
Purchase payments were first placed in Variable Annuity Account A on
January 3, 1969.
Effective April 6, 1984, Great-West Life ceased issuing variable annuity
contracts. Effective May 1, 1987, Great-West Life has not allowed new
participants to be enrolled under existing variable annuity contracts
and effective May 1, 1989, no additional contributions under existing
variable annuity contracts are being accepted.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
the significant accounting policies of Variable Annuity Account A.
Security Valuation
Short-term securities with a maturity of 60 days or less are valued on
the basis of amortized cost. Equity securities are valued at the last
sale price as of the close of business of the exchange or valuation
time. Variable Annuity Account A utilizes the "NASDAQ Official Closing
Price" for securities principally traded on the NASDAQ National Market
System. Fixed income and other securities are valued by independent
pricing services approved by the Variable Annuity Account A Committee.
Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the
direction of the Variable Annuity Account A Committee.
Security Transactions
Security transactions are accounted for on the date the security is
purchased or sold (trade date). The cost of investments sold is
determined on the basis of specific identification.
Dividend income is accrued as of the ex-dividend date and interest
income, including amortization of discounts and premiums is recorded
daily.
Federal Income Taxes
The Variable Annuity Account A investment income is applied to increase
accumulation unit values. Under existing federal income tax rules,
Variable Annuity Account A investment income is not taxed to the extent
that it is applied to increase accumulation unit values. GWL&A reserves
the right to charge Variable Annuity Account A if such taxes are imposed
in the future.
Reserves For Annuities In Course of Payment
Net assets allocated to reserves for annuities in course of payment are
computed according to the 2000 Individual Annuitant Mortality Table. The
assumed investment return is 5 percent. The mortality risk is fully
borne by GWL&A and may result in additional amounts being transferred
into the variable annuity account by GWL&A to cover greater longevity of
annuitants than expected. Conversely, if amounts allocated exceed
amounts required, transfers may be made to GWL&A. At June 30, 2004,
Variable Annuity Account A recorded a receivable from GWL&A of $491,272
to cover greater longevity of annuitants than expected.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
GWL&A provides administrative services to Variable Annuity Account A and
has assumed mortality and expense risks of the contracts. Effective
November 1, 1996, GW Capital Management, LLC, doing business as Maxim
Capital Management, LLC, a wholly-owned subsidiary of GWL&A, serves as
investment adviser. A daily deduction of .0033052% (an effective annual
rate of 1.2064%) is made from the gross investment income of Variable
Annuity Account A. This deduction, expressed on an annual basis, is
broken down as follows: 0.2857% for administrative expenses, 0.3863% for
mortality risks, 0.0688% for expense risks, and 0.4656% for investment
management and advisory services.
Contract benefit payments are advanced by GWL&A to contract holders on
behalf of Variable Annuity Account A. Variable Annuity Account A
reimburses GWL&A for these payments periodically.
As of June 30, 2004, there were 35 funds for which the committee members
served as Directors, one of which is Variable Annuity Account A. The
total compensation paid to the independent directors with respect to all
funds for which they serve as Directors was $71,250 for the period from
January 1, 2004 through June 30, 2004. Certain officers of Variable
Annuity Account A are also directors and/or officers of GWL&A or its
subsidiaries. No officer or interested committee member of Variable
Annuity Account A receives any compensation directly from Variable
Annuity Account A.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six months ended June 30, 2004, the aggregate cost of purchases
and proceeds from sales of investment securities (excluding all U.S.
Government securities and short-term securities) were $301,939 and
$306,330, respectively. For the six months ended June 30, 2004, there
were no purchases or sales of long-term U.S. Government securities.
4. ACCUMULATION UNIT VALUES
VALUATION ACCUMULATION VALUATION ACCUMULATION
DATE UNIT VALUE DATE UNIT VALUE
-------------------------- -------------------------- ------------------------ ---------------------------
January 3, 1969 $ 1.00000000 March 31, 1972 $ 1.50937876
March 28, 1969 $ 1.07468400 June 30, 1972 $ 1.46441659
June 27, 1969 $ 1.07583259 September 29, 1972 $ 1.41141921
September 30, 1969 $ 1.04319336 December 31, 1972 $ 1.43641768
December 31, 1969 $ 1.05956294 March 30, 1973 $ 1.14518173
March 31, 1970 $ 1.05322327 June 29, 1973 $ .94975920
June 30, 1970 $ .86337212 September 28, 1973 $ 1.12752636
September 30, 1970 $ .98057690 December 31, 1973 $ .98798465
December 31, 1970 $ 1.08416020 March 29, 1974 $ .92504974
March 31, 1971 $ 1.28783953 June 28, 1974 $ .84636772
June 30, 1971 $ 1.31417688 September 30, 1974 $ .69582357
September 30, 1971 $ 1.34600160 December 31, 1974 $ .76438983
December 31, 1971 $ 1.40624309 March 31, 1975 $ .85484991
(Continued)
4.
ACCUMULATION UNIT VALUES (Continued)
VALUATION ACCUMULATION VALUATION ACCUMULATION
DATE UNIT VALUE DATE UNIT VALUE
-------------------------- -------------------------- ------------------------ ---------------------------
June 30, 1975 $ .94523691 September 30, 1987 $ 3.58107036
September 30, 1975 $ .86720026 December 31, 1987 $ 2.90927633
December 31, 1975 $ .89703274 March 31, 1988 $ 3.03211290
March 31, 1976 $ 1.02654318 June 30, 1988 $ 3.14170371
June 30, 1976 $ 1.04254066 December 31, 1988 $ 3.24632490
September 30, 1976 $ 1.02175714 March 31, 1989 $ 3.40048089
December 31, 1976 $ 1.06312535 June 30, 1989 $ 3.66057985
March 31, 1977 $ .96668709 September 30, 1989 $ 4.03595925
June 30, 1977 $ .97779837 December 31, 1989 $ 4.16667314
September 30, 1977 $ .91543186 March 31, 1990 $ 4.10420565
December 31, 1977 $ .91330430 June 30, 1990 $ 4.40575331
March 31, 1978 $ .88025820 September 30, 1990 $ 3.95067300
June 30, 1978 $ .94981303 December 31, 1990 $ 4.09586804
September 30, 1978 $ 1.02175412 March 31, 1991 $ 4.67731834
December 31, 1978 $ .94566769 June 30, 1991 $ 4.46997251
March 31, 1979 $ 1.03700469 September 30, 1991 $ 4.70629835
June 30, 1979 $ 1.03384794 December 31, 1991 $ 5.17489662
September 30, 1979 $ 1.07966980 March 31, 1992 $ 5.00089395
December 31, 1979 $ 1.09861144 June 30, 1992 $ 4.90045709
March 31, 1980 $ 1.02778990 September 30, 1992 $ 4.94334533
June 30, 1980 $ 1.15888482 December 31, 1992 $ 5.39680799
September 30, 1980 $ 1.24125856 March 31, 1993 $ 5.70268053
December 31, 1980 $ 1.34937658 June 30, 1993 $ 5.91443136
March 31, 1981 $ 1.34420316 September 30, 1993 $ 6.20352631
June 30, 1981 $ 1.31151501 December 31, 1993 $ 6.24551098
September 30, 1981 $ 1.21957549 March 31, 1994 $ 6.07099873
December 31, 1981 $ 1.34034823 June 30, 1994 $ 5.98373289
March 31, 1982 $ 1.22060069 September 30, 1994 $ 6.21184797
June 30, 1982 $ 1.21747890 December 31, 1994 $ 6.07070336
September 30, 1982 $ 1.32107048 March 31, 1995 $ 6.43386353
December 31, 1982 $ 1.54829628 June 30, 1995 $ 6.93539739
March 31, 1983 $ 1.72492408 September 30, 1995 $ 7.34349110
June 30, 1983 $ 1.88999803 December 31, 1995 $ 7.50058268
September 30, 1983 $ 1.85391985 March 31, 1996 $ 7.97167430
December 31, 1983 $ 1.86959830 June 30, 1996 $ 8.16277408
March 31, 1984 $ 1.77987261 September 30, 1996 $ 8.36088935
June 30, 1984 $ 1.74123169 December 31, 1996 $ 8.76699327
September 30, 1984 $ 1.89436321 March 31, 1997 $ 9.10319430
December 31, 1984 $ 1.94021457 June 30, 1997 $ 9.87479147
March 31, 1985 $ 2.11639231 September 30, 1997 $ 10.11055595
June 30, 1985 $ 2.31593116 December 31, 1997 $ 10.66148379
September 30, 1985 $ 2.17502453 March 31, 1998 $ 10.99141808
December 31, 1985 $ 2.50415588 June 30, 1998 $ 11.46520474
March 31, 1986 $ 2.92575544 September 30, 1998 $ 9.63105524
June 30, 1986 $ 3.12894373 December 31, 1998 $ 11.95317612
September 30, 1986 $ 2.79849885 March 31, 1999 $ 12.29221948
December 31, 1986 $ 2.92996949 June 30, 1999 $ 13.52815376
March 31, 1987 $ 3.45357315 September 30, 1999 $ 12.49689723
June 30, 1987 $ 3.47692861 December 31, 1999 $ 12.40218931
(Continued)
4.
ACCUMULATION UNIT VALUES (Continued)
VALUATION ACCUMULATION VALUATION ACCUMULATION
DATE UNIT VALUE DATE UNIT VALUE
-------------------------- -------------------------- ------------------------ ---------------------------
March 31, 2000 $ 12.53233074 June 30, 2002 $ 14.19273347
June 30, 2000 $ 12.24858685 September 30, 2002 $ 11.81737430
September 30, 2000 $ 13.38557109 December 31, 2002 $ 12.43353369
December 31, 2000 $ 14.31497677 March 31, 2003 $ 11.56298533
March 31, 2001 $ 13.73607754 June 30, 2003 $ 13.53742761
June 30, 2001 $ 14.31362550 September 30, 2003 $ 13.93933144
September 30, 2001 $ 12.85597815 December 31, 2003 $ 15.70708492
December 31, 2001 $ 13.99677835 March 31, 2004 $ 16.37585983
March 31, 2002 $ 15.05815490 June 30, 2004 $ 16.55182442
(Concluded)
Variable Annuity Account A
COMMON STOCK
AEROSPACE & DEFENSE --- 2.95%
1,350 Lockheed Martin Corp 70,308
3,200 Rockwell Collins 106,624
$176,932
AUTO PARTS & EQUIPMENT --- 2.84%
3,200 Johnson Controls Inc 170,816
$170,816
BANKS --- 9.59%
3,200 Bank One Corp 163,200
4,150 Regions Financial Corp 151,683
2,500 SouthTrust Corp 97,025
3,700 Wachovia Corp 164,650
$576,558
BUILDING MATERIALS --- 2.77%
3,500 Vulcan Materials Co 166,425
$166,425
CHEMICALS --- 2.60%
2,500 PPG Industries Inc 156,225
$156,225
COMMUNICATIONS - EQUIPMENT --- 2.16%
7,100 Motorola Inc 129,575
$129,575
COMPUTER HARDWARE & SYSTEMS --- 3.34%
5,600 Dell Inc* 200,591
$200,591
ELECTRIC COMPANIES --- 2.84%
4,300 Consolidated Edison Inc 170,968
$170,968
ELECTRONIC INSTRUMENT & EQUIP --- 2.00%
3,200 Rockwell Automation Inc 120,032
$120,032
ELECTRONICS - SEMICONDUCTOR --- 2.02%
4,400 Intel Corp 121,440
$121,440
FOOD & BEVERAGES --- 2.31%
3,000 Hershey Foods Corp 138,810
$138,810
HOUSEHOLD GOODS --- 9.89%
2,900 Kimberly-Clark Corp 191,052
4,500 Leggett & Platt Inc 120,195
5,900 Maytag Corp 144,609
5,900 Newell Rubbermaid Inc 138,650
$594,506
INSURANCE RELATED --- 12.24%
4,100 Allstate Corp 190,855
2,600 Hartford Financial Services Group Inc 178,724
3,800 Lincoln National Corp 179,550
3,475 Torchmark Corp 186,955
$736,084
LEISURE & ENTERTAINMENT --- 2.99%
10,220 Time Warner Inc* 179,668
$179,668
OFFICE EQUIPMENT & SUPPLIES --- 2.41%
10,000 Xerox Corp* 145,000
$145,000
OIL & GAS --- 7.74%
2,424 Exxon Mobil Corp 107,650
2,100 Schlumberger Ltd 133,371
2,530 Sunoco Inc 160,959
2,200 Transocean Sedco Forex Inc* 63,668
$465,648
PHARMACEUTICALS --- 5.16%
3,200 Johnson & Johnson 178,240
2,780 Merck & Co Inc 132,050
$310,290
PRINTING & PUBLISHING --- 2.96%
2,100 Gannett Co Inc 178,185
$178,185
RESTAURANTS --- 2.89%
5,100 Brinker International Inc* 174,012
$174,012
RETAIL --- 7.00%
4,400 Albertson's Inc 116,776
4,600 Costco Wholesale Corp 188,922
3,050 Sears Roebuck & Co 115,168
$420,866
SPECIALIZED SERVICES --- 1.67%
8,000 Adecco SA* 100,560
$100,560
TEXTILES --- 2.33%
3,900 Liz Claiborne Inc 140,322
$140,322
UTILITIES --- 7.30%
3,500 Constellation Energy Group 132,650
7,400 Duke Energy Corp 150,146
4,600 NICOR Inc 156,262
$439,058
TOTAL COMMON STOCK --- 100% $6,012,571
(Cost $4,699,348)
TOTAL VARIABLE ANNUITY ACCOUNT A --- 100% $6,012,571
(Cost $4,699,348)
Legend
* Non-income Producing Security
See Notes to Financial Statements.
ITEM 2. CODE OF ETHICS
Not Required in Filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not Required in Filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not Required in Filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not Required in Filing.
ITEM 6. SCHEDULE OF INVESTMENTS
The schedule is included as part of the report to shareholders filed under Item
1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not Applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not Applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedure by which shareholders may
recommend nominees to the registrant's board of directors.
ITEM 10. CONTROLS AND PROCEDURES
(a) The registrant's principal executive officer and principal financial officer
have concluded, based upon their evaluation of the registrant's disclosure
controls and procedures as conducted within 90 days of the filing date of this
report, that these disclosure controls and procedures provide reasonable
assurance that material information required to be disclosed by the registrant
in the report it files or submits on Form N-CSR is recorded, processed,
summarized and reported, within the time periods specified in the commission's
rules and forms and that such material information is accumulated and
communicated to the registrant's management, including its principal executive
officer and principal financial officer, as appropriate, in order to allow
timely decisions regarding required disclosure.
(b) The registrant's principal executive officer and principal financial officer
are aware of no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 11. EXHIBITS
(a) (1) Not Required in Filing.
(2) A separate certification for each principal executive and principal
financial officer as required by Rule 30a-2(a) under the Investment Company Act
of 1940 is attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
By:
/s/ W.T. McCallum
W. T. McCallum
President
Date: August 26, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:
/s/ W.T. McCallum
W. T. McCallum
President
Date: August 26, 2004
By:
/s/ G.R. McDonald
G. R. McDonald
Treasurer
Date: August 26, 2004