-----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, BHvQrpZBl+OvglApDv2vsR4B9nENK3lm7WoPmfzyT3Zy+akILXb2MrdYkU1P9ztt nLHf2KtYnr66VIqvCh2Emw== 0000950110-02-000179.txt : 20020415 0000950110-02-000179.hdr.sgml : 20020415 ACCESSION NUMBER: 0000950110-02-000179 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20020401 EFFECTIVENESS DATE: 20020401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIAA SEPARATE ACCOUNT VA 1 CENTRAL INDEX KEY: 0000923524 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-79124 FILM NUMBER: 02598504 BUSINESS ADDRESS: STREET 1: 730 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 MAIL ADDRESS: STREET 2: 730 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIAA SEPARATE ACCOUNT VA 1 CENTRAL INDEX KEY: 0000923524 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08520 FILM NUMBER: 02598505 BUSINESS ADDRESS: STREET 1: 730 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 MAIL ADDRESS: STREET 2: 730 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 485BPOS 1 e88197_485b.txt PROSPECTUS As filed with the Securities and Exchange Commission on April 1, 2002 Registration File Nos. 33-79124 and 811-8520 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. [__] [_] Post-Effective Amendment No. [8] [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. [11] [X] (Check appropriate box or boxes.) TIAA Separate Account VA-1 -------------------------- (Exact Name of Registrant) Teacher's Insurance and Annuity Association of America ------------------------------------------------------ (Name of Insurance Company) 730 Third Avenue New York, New York 10017 ------------------------ (Address of Insurance Company's Principal Executive Offices) Insurance Company's Telephone Number, Including Area Code: (212) 490-9000 Name and Address of Agent for Service: Copy to: Lisa Snow, Esquire Steven B. Boehm, Esquire Teachers Insurance and Annuity Sutherland Asbill & Brennan LLP Association of America 1275 Pennsylvania Avenue, N.W. 730 Third Ave Washington, D. C. 20004-2415 New York, New York 10017-3206 Approximate Date of Proposed Public Offering: As soon as practicable after effectiveness of the Registration Statement. It is proposed that this filing will become effective (check appropriate box): [_] immediately upon filing pursuant to paragraph (b) [X] on April 1, 2002 pursuant to paragraph (b) [_] 60 days after filing pursuant to paragraph (a)(1) [_] on (date) pursuant to paragraph (a)(1) [_] 75 days after filing pursuant to paragraph (a)(2) [_] on (date) pursuant to paragraph (a)(2) of rule 485 If appropriate, check the following box: [_] This post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title & Securities Being Registered: Interests in a separate account funding variable annuity contracts. CROSS REFERENCE SHEET Show Location of Information Required by Form N-3 in Part A (Prospectus) and Part B (Statement of Additional Information) of Registration Statement. PART A (PROSPECTUS)
ITEM OF FORM N-3 PART A (PROSPECTUS) CAPTION - ---------------- --------------------------- 1. Cover Page............................................... Cover Page 2. Definitions.............................................. Definitions 3. Synopsis................................................. Summary 4. Condensed Financial Information.......................... Condensed Financial Information; Performance Information 5. General Description of Registrant and Insurance Company........................................ Teachers Insurance and Annuity Association of America: The Separate Account; Investment Practices 6. Management............................................... Management and Investment Advisory Arrangements 7. Deductions and Expenses.................................. The Contract (Charges) 8. General Description of Variable Annuity Contracts................................................ Adding, Closing, or Substituting Portfolios; The Contract; Voting Rights; General Matters 9. Annuity Period........................................... The Contract (The Annuity Period; Income Options) 10. Death Benefit............................................ The Contract (Death Benefits) 11. Purchase and Contract Value.............................. 12. Redemptions.............................................. 13. Taxes.................................................... The Contract (Tax Issues); Federal Income Taxes 14. Legal Proceedings........................................ Legal Proceedings 15. Table of Contents for the Statement of Additional Information................................... Table of Contents for the Statement of Additional Information
PART B (STATEMENT OF ADDITIONAL INFORMATION)
PART B (STATEMENT OF ADDITIONAL ITEM OF FORM N-3 INFORMATION) CAPTION - ---------------- ------------------------------- 16. Cover Page............................................... Cover Page 17. Table of Contents........................................ Table of Contents 18. General Information and History.......................... (Prospectus) Teacher Insurance and Annuity Association 19. Investment Objectives and Policies....................... Investment Restrictions; Investment Policies and Risk Consideration; Portfolio Turnover 20. Management............................................... Management 21. Investment Advisory and Other Services................... Investment Advisory and Related Services 22. Brokerage Allocation..................................... Brokerage Allocation 23. Purchase and Pricing of Securities Being Offered.................................................. Valuation of Assets; (Prospectus) The Contract (Transfers Between the Separate Account and the Fixed Account; General Considerations for all Transfer and Cash Withdrawals) 24. Underwriters............................................. (Prospectus) Distribution of the Contracts 25. Calculation of Performance Data.......................... Performance Information; (Prospectus) Performance Information 26. Annuity Payments......................................... (Prospectus) The Contract (The Annuity Period; Income Options) 27. Financial Statements..................................... Financial Statements; (Prospectus) Condensed Financial Information
April 1, 2002 PROSPECTUS TEACHERS INSURANCE AND ANNUITY ASSOCIATION TEACHERS PERSONAL ANNUITY 2002 INDIVIDUAL DEFERRED VARIABLE ANNUITIES Funded Through TIAA SEPARATE ACCOUNT VA-1 PROSPECTUS DATED APRIL 1, 2002 INDIVIDUAL DEFERRED VARIABLE ANNUITIES FUNDED THROUGH TIAA SEPARATE ACCOUNT VA-1 OF TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA This prospectus tells you about an individual deferred variable annuity funded through TIAA Separate Account VA-1 of Teachers Insurance and Annuity Association of America (TIAA). Read it carefully before investing, and keep it for future reference. TIAA Separate Account VA-1 (the separate account) is a segregated investment account of TIAA. The separate account provides individual variable annuities for employees of nonprofit institutions, including governmental institutions, organized in the United States. Its main purpose is to accumulate, invest, and then disburse funds for lifetime income or through other payment options. TIAA offers this variable annuity as part of the contract, which also has a fixed account. Whether the variable annuity is available to you is subject to approval by regulatory authorities in your state. As with all variable annuities, your accumulation can increase or decrease, depending on how well the underlying investments in the separate account do over time. TIAA doesn't guarantee the investment performance of the separate account, and you bear the entire investment risk. More information about the separate account and the variable component of the contract is on file with the Securities and Exchange Commission (SEC) in a "Statement of Additional Information" (SAI) dated April 1, 2002. You can get it by writing us at TIAA, 730 Third Avenue, New York, New York 10017-3206 (attention: Central Services), or by calling 1 800 842-2733, extension 5509. The SAI, as supplemented from time to time, is "incorporated by reference" into the prospectus; that means it's legally part of the prospectus. The SAI's table of contents is on the last page of this prospectus. The SEC maintains a Website (http://www.sec.gov) that contains the SAI, material incorporated by reference and other information regarding the separate account. These securities have not been approved or disapproved by the Securities and Exchange Commission nor has the commission passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense. An investment in the contract is not a deposit of the TIAA-CREF Trust Company, FSB, and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The date of this prospectus is April 1, 2002. 1 Table of Contents DEFINITIONS 4 SUMMARY 5 CONDENSED FINANCIAL INFORMATION 8 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA 10 THE SEPARATE ACCOUNT 10 ADDING, CLOSING, OR SUBSTITUTING PORTFOLIOS 11 INVESTMENT PRACTICES 11 PERFORMANCE INFORMATION 15 VALUATION OF ASSETS 15 MANAGEMENT AND INVESTMENT ADVISORY ARRANGEMENTS 16 THE CONTRACT 16 Eligible Purchasers of the Contract 16 Remitting Premiums 17 Accumulation Units 18 The Fixed Account 19 Transfers Between the Separate Account and the Fixed Account 20 Cash Withdrawals 20 General Considerations for All Transfers and Cash Withdrawals 20 Tax Issues 21 Charges 21 Other Charges 22 Brokerage Fees and Related Transaction Expenses 22 The Annuity Period 22 Annuity Starting Date 23 Income Options 23 Death Benefits 25 Methods of Payment 26 TIMING OF PAYMENTS 27 FEDERAL INCOME TAXES 28 VOTING RIGHTS 32 GENERAL MATTERS 32 DISTRIBUTION OF THE CONTRACTS 34 LEGAL PROCEEDINGS 34 TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION 35 2 This prospectus outlines the terms under which the variable annuity issued by TIAA is available. It doesn't constitute an offering in any jurisdiction where such an offering can't lawfully be made. No dealer, salesman, or anyone else is authorized to give any information or to make any representation in connection with this offering other than those contained in this prospectus. If anyone does offer you such information or representations, you shouldn't rely on them. 3 DEFINITIONS DEFINITIONS Throughout the prospectus, "TIAA," "we," and "our" refer to Teachers Insurance and Annuity Association of America. "You" and "your" mean any contractowner or at any prospective contractowner. The terms and phrases below are defined so you'll know precisely how we're using them. To understand some definitions, you may have to refer to other defined terms. ACCUMULATION The total value of your accumulation units. ACCUMULATION PERIOD The period that begins with your first premium and continues as long as you still have an amount accumulated in either the separate account or the fixed account. ACCUMULATION UNIT A share of participation in the separate account. ANNUITANT The natural person whose life is used in determining the annuity payments to be received. The annuitant may be the contractowner or another person. ANNUITY PARTNER The natural person whose life is used in determining the annuity payments to be received under a survivor income option. The annuity partner is also known as the second annuitant. BENEFICIARY Any person or institution named to receive benefits if you die during the accumulation period or if you die while any annuity income or death benefit payments remain due. You don't have to name the same beneficiary for each of these two situations. BUSINESS DAY Any day the New York Stock Exchange (NYSE) is open for trading. A business day ends at 4 p.m. Eastern Time, or when trading closes on the NYSE, if earlier. CALENDAR DAY Any day of the year. Calendar days end at the same time as business days. CONTRACT The fixed and variable components of the individual, flexible premium, deferred annuity described in this prospectus. CONTRACTOWNER The person (or persons) who controls all the rights and benefits under a contract. CREF The College Retirement Equities Fund, TIAA's companion organization. 4 ELIGIBLE INSTITUTION A nonprofit institution, including any governmental institution, organized in the United States. FIXED ACCOUNT The component of the contract guaranteeing principal plus a specified rate of interest supported by assets in the general account. GENERAL ACCOUNT All of TIAA's assets other than those allocated to TIAA Separate Account VA-1 or to any other TIAA separate account. INCOME OPTION Any of the ways you can receive annuity income, which must be from the fixed account. INTERNAL REVENUE CODE (IRC) The Internal Revenue Code of 1986, as amended. PREMIUM Any amount you invest in the contract. SEPARATE ACCOUNT TIAA Separate Account VA-1, which was established by TIAA under New York State law to fund your variable annuity. The account holds its assets apart from TIAA's other assets. SURVIVOR INCOME OPTION An option that continues lifetime annuity payments as long as either the annuitant or the annuity partner is alive. TIAA Teachers Insurance and Annuity Association of America. VALUATION DAY Any day the NYSE is open for trading, as well as the last calendar day of each month. Valuation days end as of the close of all U.S. national exchanges where securities or other investments of the separate account are principally traded. Valuation days that aren't business days end at 4 p.m. Eastern Time. SUMMARY Read this summary together with the detailed information you'll find in the rest of the prospectus. This prospectus describes the variable component of the contract, which also provides fixed annuity benefits (see "The Fixed Account," page 19). The contract is an individual deferred annuity that is available to any employee, trustee, or retired employee of an eligible institution, or his or her spouse (or surviving spouse) as well as certain other eligible persons (see "Eligible Purchasers of the Contract," page 16). THE SEPARATE ACCOUNT TIAA Separate Account VA-1 is an open-end management investment company. Currently the separate account has only one investment portfolio, the Stock Index Account. Like any other portfolio that we 5 might add in the future, the Stock Index Account is subject to the risks involved in professional investment management, including those resulting from general economic conditions. The value of your accumulation in any portfolio can fluctuate, and you bear the entire risk. EXPENSES Here's a summary of the direct and indirect expenses under the contract. CONTRACTOWNER TRANSACTION EXPENSES Deductions from premiums (as a percentage of premiums) .................. None CHARGES FOR TRANSFERS AND CASH WITHDRAWALS (AS A PERCENTAGE OF TRANSACTION AMOUNT) Transfers to the fixed account .......................................... None Cash withdrawals ........................................................ None ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Charge (after fee waiver) (1) ....................... .07% Mortality and Expense Risk Charge (current) (2) ......................... .10% Administrative Expense Charge ........................................... .20% --- TOTAL ANNUAL EXPENSES (3) ............................................... .37% (1) Although Teachers Advisors, Inc. (Advisors), the separate account's investment adviser, is entitled to an annual fee of 0.30 percent of the separate account's average daily net assets, it has voluntarily agreed to waive a portion of its fee. (2) TIAA reserves the right to increase the mortality and expense risk charge to a maximum of 1.00 percent per year. (3) If we imposed the full amount of the administrative expense, investment advisory and mortality and expense risk charges, total annual expenses would be 1.50%. TIAA guarantees that total annual expenses will never exceed this level. You will receive at least three months' notice before we raise any of these charges. Premium taxes apply to certain contracts (see "Other Charges," page 22). The table at the bottom of this page gives an example of the expenses you'd incur on a hypothetical investment of $1,000 over several periods. The table assumes a 5 percent annual return on assets.
ANNUAL EXPENSE DEDUCTIONS FROM NET ASSETS 1 YEAR 3 YEARS 5 YEARS 10 YEARS - ---------------------------------------------------------------------------------------------------------------- If you withdraw your entire accumulation at the end of the applicable time period: $4 $12 $21 $47 - ---------------------------------------------------------------------------------------------------------------- If you annuitize at the end of the applicable time period: $4 $12 $21 $47 - ---------------------------------------------------------------------------------------------------------------- If you do not withdraw your entire accumulation: $4 $12 $21 $47 - ----------------------------------------------------------------------------------------------------------------
6 This table is designed to help you understand the various expenses you would bear directly or indirectly as an owner of a contract. REMEMBER THAT THIS TABLE DOESN'T REPRESENT ACTUAL PAST OR FUTURE EXPENSES OR INVESTMENT PERFORMANCE. ACTUAL EXPENSES MAY BE HIGHER OR LOWER. For more information, see "Charges," page 21. "FREE LOOK" RIGHT Until the end of the period of time specified in the contract (the "free look" period), you can examine the contract and return it to TIAA for a refund. The time period will depend on the state in which you live. In states that permit it, we'll refund the accumulation value calculated on the date that you mailed or delivered the contract and the refund request to us. In states that don't allow us to refund accumulation value only, we'll refund the premiums you paid to the contract. If you live in a state that requires refund of premiums and we issued you a contract on or after November 1, 1994, your premiums and transfers allocated to the separate account during the "free look" period can't exceed $10,000. We will consider the contract returned on the date it's postmarked and properly addressed with postage pre-paid or, if it's not postmarked, on the day we receive it. We will send you the refund within seven (7) days after we get written notice of cancellation and the returned contract. We will cancel the contract as of the date of issue. RESTRICTIONS ON TRANSFERS AND CASH WITHDRAWALS Currently, you can transfer funds from the separate (variable) account to the fixed account as often as you like, but you can transfer from the fixed account to the separate account no more than once every 180 days. After you have been given three months' notice, we may limit the number of transfers from the separate account to one in any 90-day period. All transfers must be for at least $250 or your entire account balance. All cash withdrawals must be for at least $1,000 or your entire account balance. YOU MAY HAVE TO PAY A TAX PENALTY IF YOU WANT TO MAKE A CASH WITHDRAWAL BEFORE AGE 59 1/2. For more, see "Income Options," page 24, and "Federal Income Taxes," page 28. 7 CONDENSED FINANCIAL INFORMATION Presented below is condensed financial information for the separate account. The condensed financial information is derived from the separate account financial statements audited by Ernst & Young LLP, independent auditors, for the year ended December 31, 2001. The table shows per accumulation unit data for each variable investment account of the separate account. The data should be read in conjunction with the financial statements and other financial information included in the SAI. It is available without charge upon request. Year Ended December 31, ------------------------------------------------------------------------ 2001 2000 1999 - ------------------------------------------------------------------------- PER ACCUMULATION UNIT DATA: Investment income $ 0.916 $ 0.966 $ 0.961 Expense charges 0.253 0.301 0.270 - ------------------------------------------------------------------------- Investment income--net 0.663 0.665 0.691 Net realized and unrealized gain (loss) on investments (9.499) (7.024) 13.051 - ------------------------------------------------------------------------- Net increase (decrease) in Accumulation Unit Value (8.836) (6.359) 13.742 ACCUMULATION UNIT VALUE: Beginning of period 75.392 81.751 68.009 - ------------------------------------------------------------------------- End of period $66.556 $75.392 $81.751 ========================================================================= RATIOS TO AVERAGE NET ASSETS: Expenses (2) 0.37% 0.37% 0.37% Investment income--net 0.97% 0.82% 0.95% Portfolio turnover rate 9.86% 20.68% 37.93% Thousands of Accumulation Units outstanding at end of period 12,517 13,147 12,630 (1) The percentages shown for this period are not annualized. (2) Advisors has agreed to waive a portion of its investment advisory fee. Without this waiver, the Stock Index Account's expense ratio for the periods listed would have been higher. 8
NOVEMBER 1, 1994 (DATE OF INITIAL Year Ended December 31 REGISTRATION) TO - ------------------------------------------------------------------------------ DECEMBER 31, 1998 1997 1996 1995 1994(1) - ------------------------------------------------------------------------------------------------- PER ACCUMULATION UNIT DATA: Investment income $ 0.908 $0.847 $0.807 $0.745 $ 0.138 Expense charges 0.223 0.182 0.150 0.170 0.023 - ------------------------------------------- ----------------------------------------------------- Investment income--net 0.685 0.665 0.657 0.575 0.115 Net realized and unrealized gain (loss) on investments 12.407 12.429 6.755 8.565 (0.676) - ------------------------------------------- ----------------------------------------------------- Net increase (decrease) in Accumulation Unit Value 13.092 13.094 7.412 9.140 (0.561) ACCUMULATION UNIT VALUE: Beginning of period 54.917 41.823 34.411 25.271 25.832 - ------------------------------------------- ----------------------------------------------------- End of period $68.009 $54.917 41.823 $34.411 $25.271 =========================================== ===================================================== RATIOS TO AVERAGE NET ASSETS: Expenses (2) 0.37% 0.37% 0.40% 0.55% 0.09% Investment income--net 1.14% 1.36% 1.74% 1.87% 0.45% Portfolio turnover rate 45.93% 2.39% 4.55% 0.98% 0.04% Thousands of Accumulation Units outstanding at end of period 11,145 9,901 6,768 2,605 1,171
9 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA TIAA is a nonprofit stock life insurance company, organized under the laws of New York State. It was founded on March 4, 1918, by the Carnegie Foundation for the Advancement of Teaching. All of the stock of TIAA is held by the TIAA Board of Overseers, a nonprofit New York membership corporation whose main purpose is to hold TIAA's stock. TIAA's headquarters are at 730 Third Avenue, New York, New York 10017-3206. TIAA's general account offers traditional annuities, which guarantee principal and a specified interest rate while providing the opportunity for additional dividends. TIAA also offers life, long-term disability, and long-term care insurance. TIAA has received the highest ratings from the leading independent insurance industry rating agencies: A++ (Superior) from A.M. Best Company, AAA from Duff & Phelps Credit Rating Company, Aaa from Moody's Investor's Service and AAA from Standard and Poor's. TIAA is the companion organization of the College Retirement Equities Fund (CREF), the first company in the United States to issue a variable annuity. CREF is a nonprofit membership corporation established in New York State in 1952. Together, TIAA and CREF form the principal retirement system for the nation's education and research communities and one of the largest retirement systems in the world, based on assets under management. TIAA-CREF serves approximately 2.4 million people at over 10,000 institutions. As of December 31, 2001, TIAA's assets were approximately $127.0 billion; the combined assets for TIAA and CREF totaled approximately $266.7 billion (although CREF doesn't stand behind TIAA's guarantees). THE SEPARATE ACCOUNT Separate Account VA-1 was established on February 16, 1994, as a separate investment account of TIAA under New York law, by resolution of TIAA's Board of Trustees. The separate account is governed by a management committee. As an "open-end" diversified management investment company, the separate account has no limit on how many units of participation it can issue. The separate account is registered with the SEC under the Investment Company Act of 1940, as amended (the 1940 Act), though registration doesn't entail SEC supervision of its management and investment practices. As part of TIAA, the separate account is also subject to regulation by the State of New York Insurance Department (NYID) and the insurance departments of some other jurisdictions in which the contracts are offered (see the SAI). Although TIAA owns the assets of the separate account, the contract states that the separate account's income, investment gains, and investment losses are credited to or charged against the 10 assets of the separate account without regard to TIAA's other income, gains, or losses. Under New York law, we cannot charge the separate account with liabilities incurred by any other TIAA separate account or other business activity TIAA may undertake. The contract accepts only after-tax dollars. In contrast, most of TIAA-CREF's other fixed and variable annuity products are part of employer retirement plans and accept premiums consisting primarily of before-tax dollars. Like earnings from other annuity products, earnings on accumulations in the separate account aren't taxed until withdrawn or paid as annuity income (see "Federal Income Taxes," page 28). ADDING, CLOSING, OR SUBSTITUTING PORTFOLIOS The separate account currently consists of a single investment portfolio, but we can add new investment portfolios in the future. We don't guarantee that the separate account, or any investment portfolio added in the future, will always be available. We reserve the right, subject to any applicable law, to change the separate account and its investments. We can add or close portfolios, substitute one portfolio for another with the same or different fees and charges, or combine portfolios, subject to the requirements of applicable law. We can also make any changes to the separate account or to the contract required by applicable insurance law, the Internal Revenue Code, or the 1940 Act. TIAA can make some changes at its discretion, subject to NYID and SEC approval as required. The separate account can (i) operate under the 1940 Act as a unit investment trust that invests in another investment company, or in any other form permitted by law, (ii) deregister under the 1940 Act if registration is no longer required, or (iii) combine with other separate accounts. As permitted by law, TIAA can transfer the separate account assets to another separate account or accounts of TIAA or another insurance company or transfer the contract to another insurance company. INVESTMENT PRACTICES The separate account is subject to several types of risks. One is market risk-price volatility due to changing conditions in the financial markets. Another is financial risk. For stocks or other equity securities, financial risk comes from the possibility that current earnings will fall or that overall financial soundness will decline, reducing the securities' value. The separate account currently consists solely of the Stock Index Account. Changing the investment objective of the separate account won't require a vote by 11 contractowners. The separate account can also change some of its investment policies (that is, the methods used to pursue the objective) without such approval. Of course, there's no guarantee that the separate account will meet its investment objective. The separate account's Stock Index Account has a policy of investing, under normal circumstances, at least 80% of its assets in the particular type of securities implied by its name. The Stock Index Account will provide its shareholders with at least 60 days prior notice before making changes to this policy. The separate account's general perspective is long-term, and we avoid both extreme conservatism and high risk in investing. Advisors manages the separate account's assets (see "Management and Investment Advisory Arrangements," page 16). Personnel of Advisors, a subsidiary of TIAA, also manage assets of one or more CREF accounts on behalf of TIAA-CREF Investment Management, LLC, an investment adviser that is also a TIAA subsidiary. Personnel of Advisors also manage assets of other investment companies, including TIAA-CREF Life Funds, TIAA-CREF Mutual Funds and TIAA-CREF Institutional Mutual Funds. Ordinarily, investment decisions for the separate account will be made independently, but managers for the separate account may at times decide to buy or sell a particular security at the same time as for a CREF account or another investment company whose assets they may also be managing. If so, investment opportunities are allocated equitably, which can have an adverse effect on the size of the position the separate account buys or sells, as well as the price paid or received for it. INVESTMENT OBJECTIVE The investment objective of the separate account is favorable long-term return from a diversified portfolio selected to track the overall market for common stocks publicly traded in the U.S., as represented by a broad stock market index. INVESTMENT MIX The separate account seeks a favorable long-term rate of return from a diversified portfolio selected to track the overall market for common stocks publicly traded in the U.S., as represented by the Russell 3000(R), a broad market index (see "The Russell 3000 Index" below). Although the separate account invests in stocks in the Russell 3000 Index, it doesn't invest in all 3,000 stocks in the index. Rather, we use a sampling approach to create a portfolio that closely matches the overall investment characteristics (for example, yield and 12 industry weight) of the index. This means that a company can remain in the portfolio even if it performs poorly, unless the company is removed from the Russell 3000. Using the Russell 3000 Index isn't fundamental to the separate account's investment objective and policies. We can change the index used in the separate account at any time and will notify you if we do so. THE RUSSELL 3000 INDEX The Russell 3000 is an index of the 3,000 largest publicly traded U.S. corporations, based on the value of their outstanding stock. According to the Frank Russell Company, Russell 3000 companies account for about 98 percent of the total market capitalization of the publicly traded U.S. equity market. The market capitalization of individual companies in the Russell 3000 ranged from $4.11 million to $398.10 billion, with an average of $4.36 billion as of December 31, 2001. The Frank Russell Company includes stocks in the Index solely on their market capitalization and weights them by relative market value. The Frank Russell Company can change stocks and their weightings in the Index. We'll adjust the separate account's portfolio to reflect the changes as appropriate. We can also adjust the separate account's portfolio because of mergers and similar events. The separate account isn't promoted, endorsed, sponsored or sold by and isn't affiliated with the Frank Russell Company. A stock's presence in the Russell 3000 doesn't mean that the Frank Russell Company believes that it's an attractive investment. The Frank Russell Company isn't responsible for any literature about the separate account and makes no representations or warranties about its content. The Russell 3000 is a trademark and service mark of the Frank Russell Company. OTHER INVESTMENTS The separate account can also hold other investments whose return depends on stock market prices. These include stock index futures contracts, options (puts and calls) on futures contracts, and debt securities whose prices or interest rates are linked to the return of a recognized stock market index. The separate account can also make swap arrangements where the return is linked to a recognized stock market index. The separate account would make such investments in order to seek to match the total return of the Russell 3000. However, they might not track the return of the Russell 3000 in all cases and can involve additional credit risks. Investing in options or futures contracts and entering into equity swaps involve special risks. 13 For more information, see the SAI. Such investing by the separate account is subject to any necessary regulatory approvals. The separate account can hold other types of securities with equity characteristics, such as bonds convertible into common stock, warrants, preferred stock, and depository receipts for such securities. In addition, the separate account can hold fixed-income securities that it acquires because of mergers, recapitalizations, or otherwise. For liquidity, the separate account can also invest in short-term debt securities and other money market instruments, including those denominated in foreign currencies. OTHER INVESTMENT ISSUES AND RISKS OPTIONS, FUTURES, AND OTHER INVESTMENTS The separate account can buy and sell options (puts and calls) and futures to the extent permitted by the New York State Insurance Department, the SEC, and the Commodity Futures Trading Commission. We intend to use options and futures primarily as hedging techniques or for cash management, not for speculation, but they involve special considerations and risks nonetheless. For more information, see the SAI. The separate account can also invest in newly developed financial instruments, such as equity swaps and equity-linked fixed-income securities, so long as these are consistent with its investment objective and regulatory requirements. For more information, see the SAI. ILLIQUID SECURITIES The separate account can invest up to 10 percent of its assets in investments that may not be readily marketable. It may be difficult to sell these investments for their fair market value. REPURCHASE AGREEMENTS The separate account can use repurchase agreements to manage cash balances. In a repurchase agreement, we buy an underlying debt instrument on condition that the seller agrees to buy it back at a fixed time (usually a relatively short period) and price. The period from purchase to repurchase is usually no more than a week and never more than a year. Repurchase agreements may involve special risks. For more information, see the SAI. FIRM COMMITMENT AGREEMENTS The separate account can enter "firm commitment" agreements to buy securities at a fixed price or yield on a specified future date. We expect that these transactions will be relatively infrequent. For more information, see the SAI. 14 INVESTMENT COMPANIES The separate account can invest up to 10 percent of its assets in other investment companies. SECURITIES LENDING Subject to certain restrictions, the separate account can seek additional income by lending securities to brokers, dealers, and other financial institutions. Brokers and dealers must be registered with the SEC and be members of the National Association of Securities Dealers, Inc. (NASD); any recipient must be unaffiliated with TIAA. All loans will be fully collateralized. If we lend a security, we can call in the loan at any time. For more information, see the SAI. BORROWING The separate account can borrow money from banks (no more than 33 1/3 percent of the market value of its assets at the time of borrowing). It can also borrow money from other sources temporarily (no more than 5 percent of the total market value of its assets at the time of borrowing). For more information, see the SAI. PERFORMANCE INFORMATION From time to time, we advertise the total return and average annual total return of the separate account. "Total return" means the cumulative percentage increase or decrease in the value of an investment over standard one-, five-, and ten-year periods (and occasionally other periods as well). "Average annual total return" means the annually compounded rate that would result in the same cumulative total return over the stated period. All performance figures are based on past investment results. They aren't a guarantee that the separate account will perform equally or similarly in the future. Write or call us for current performance figures for the separate account (see "Contacting TIAA," page 33). VALUATION OF ASSETS We calculate the value of the assets as of the close of every valuation day. Except as noted below, we use market quotations or independent pricing services to value securities and other instruments. If market quotations or independent pricing services aren't readily available, we'll use "fair value," as determined in good faith under the direction of the management committee. We may also use "fair value" in certain other circumstances. For more information, see the SAI. 15 MANAGEMENT AND INVESTMENT ADVISORY ARRANGEMENTS The principal responsibility for directing the separate account's investments and administration rests with its management committee. Advisors manages the assets in the separate account. A wholly-owned indirect subsidiary of TIAA, Advisors is registered under the Investment Advisers Act of 1940. Its duties include conducting research, recommending investments, and placing orders to buy and sell securities. It also provides for all portfolio accounting, custodial, and related services for the separate account. Advisors and its personnel act consistently with the investment objectives, policies, and restrictions of the separate account. TIAA restricts the ability of those personnel of Advisors who have direct responsibility and authority for making investment decisions for the separate account to trade in securities for their own accounts. The restrictions also apply to members of their households. Transactions in securities by those individuals must be reported and approved and they must also send duplicate confirmation statements and other account reports to a special compliance unit. THE CONTRACT The contract is an individual flexible-premium (you can contribute varying amounts) deferred annuity that accepts only after-tax dollars from eligible purchasers. The rights and benefits under the variable component of the contract are summarized below; however, the descriptions you read here are qualified entirely by the contract itself. The contracts are approved for sale in all of the fifty states, the District of Columbia, and the United States Virgin Islands. We are not currently offering the contracts in states in which the TIAA-CREF Life Insurance Company offers the Personal Annuity Select individual deferred variable annuity contract, however, although we are accepting additional premiums for existing contracts in these states. ELIGIBLE PURCHASERS OF THE CONTRACT An employee, trustee or a retiree of an eligible institution can purchase a contract. For this purpose, an individual who is at least 55 years old and has completed at least five years of service at an eligible institution is considered to be a "retiree." A spouse (or surviving spouse) of an employee, trustee or retiree of an eligible institution can also purchase a contract. Any individual who owns a TIAA or CREF annuity contract or certificate or individual insurance policy, as well as the spouse or surviving spouse of such a person can also purchase a contract. 16 REMITTING PREMIUMS INITIAL PREMIUMS We'll issue you a contract as soon as we receive your completed application and your initial premium of at least $250 at our home office, even if you don't initially allocate any premiums to the separate account. Please send your check, payable to TIAA, along with your application to: TIAA-CREF P.O. Box 530189 Atlanta, GA 30353-0189 (The $250 minimum doesn't apply if application and payment of at least $25 is accompanied by an agreement for electronic funds transfer (EFT) or if you are using payroll deduction. We also reserve the right to temporarily waive the $250 minimum initial premium amount.) We will credit your initial premium within two business days after we receive all necessary information or the premium itself, whichever is later. If we don't have the necessary information within five business days, we'll contact you to explain the delay. We'll return the initial premium at that time unless you consent to our keeping it and crediting it as soon as we receive the missing information from you. ADDITIONAL PREMIUMS Subsequent premiums must be for at least $25. Send a check payable to TIAA, along with a personalized payment coupon (supplied upon purchasing a contract) to: TIAA-CREF P.O. Box 530195 Atlanta, GA 30353-0195 If you don't have a coupon, use a separate piece of paper to give us your name, address and contract number. These premiums will be credited as of the business day we receive them. Currently, TIAA will accept premiums at any time both the contractowner and the annuitant are living and your contract is in the accumulation period. However, we reserve the right not to accept premiums under this contract after you have been given three months' notice. If TIAA stops accepting premiums under this contract, we will accept premiums under a new contract issued to you with the same annuitant, annuity starting date, beneficiary, and methods of benefit payment as those under this contract at the time of replacement. ELECTRONIC PAYMENT You may make initial or subsequent investments by electronic payment. A federal wire is usually received the same day and an ACH is usually received by the second day after transmission. Be aware that your bank may charge you a fee to wire funds, although ACH is usually less expensive than a federal wire. Here's what you need to do: (1) If you are sending in an initial premium, send us your application; 17 (2) Instruct your bank to wire money to: Citibank, N.A. ABA Number 021000089 New York, NY Account of: TIAA Account Number: 4068-4865 (3) Specify on the wire: o Your name, address and Social Security Number(s) or Taxpayer Identification Number o Indicate if this is for a new application or existing contract (provide contract number if existing) CERTAIN RESTRICTIONS Except as described below, the contract doesn't restrict how large your premiums are or how often you send them, although we reserve the right to impose restrictions in the future. Your total premiums and transfers to the separate account during the "free look" period can't exceed $10,000 if you live in a state which requires us to refund all payments upon the cancellation of your contract during the free look period. Total premiums and transfers to the fixed account in any 12-month period could be limited to $300,000, so you should contact us if you want more than $300,000 to be credited to the fixed account during any such period (see "Contacting TIAA," page 33). If mandated under applicable law, we may be required to reject a premium payment. We may also be required to block a contract owner's account and thereby refuse to pay any request for transfers, withdrawals, surrenders, loans or death benefits, until instructions are received from the appropriate regulator. ACCUMULATION UNITS Premiums paid to the separate account purchase accumulation units. When you remit premiums or transfer amounts into the separate account, the number of your units will increase; when you transfer amounts from the account (including applying funds to the fixed account to begin annuity income) or take a cash withdrawal, the number of your units will decrease. We calculate how many accumulation units to credit by dividing the amount allocated to the separate account by its unit value for the business day when we received your premium. We may use a later business day for your initial premium. To determine how many accumulation units to subtract for transfers and cash withdrawals, we use the unit value for the business day when we receive your completed transaction request and all required information and documents. (You can choose to have your transaction completed at a later date; if you do, we will use that later date as the valuation day.) For amounts to be applied to begin annuity income, the unit 18 value will be the one for the last valuation day of the month when we receive all required information and documentation (see "The Annuity Period," page 22). For amounts to be applied to begin death benefits, the unit value will be the one for the valuation day when we receive proof of death (see "Death Benefits," page 25). The value of the accumulation units will depend mainly on investment experience, though the unit value reflects expense deductions from assets (see "Charges," page 21). The unit value is calculated at the close of each valuation day. We multiply the previous day's unit value by the net investment factor for the separate account. The net investment factor is calculated as A divided by B, where A and B are defined as: A equals the value of the separate account's net assets at the end of the day, excluding the net effect of transactions (i.e., premiums received, benefits paid, and transfers to and from the account) made during that day. This amount is equal to the net assets at the end of the prior day (including the net effect of transactions made during the prior day) increased/decreased by realized and unrealized capital gains/ losses, dividends, and investment income and decreased by expense and risk charges. B is the value of the separate account's net assets at the end of the prior day (including the net effect of transactions made during the prior day). THE FIXED ACCOUNT Premiums allocated and amounts transferred to the fixed account become part of the general account assets of TIAA, which support insurance and annuity obligations. The general account includes all the assets of TIAA, except those in the separate account or in any other TIAA separate investment account. Interests in the fixed account have not been registered under the Securities Act of 1933 (the 1933 Act), nor is the fixed account registered as an investment company under the 1940 Act. Neither the fixed account nor any interests therein are generally subject to the 1933 Act or 1940 Act. The SEC staff has told us that they haven't reviewed the information in this prospectus about the fixed account. You can allocate premiums to the fixed account or transfer from the separate account to the fixed account at any time. In contrast, you can transfer or take a cash withdrawal from the fixed account only once every 180 days. TIAA may defer payment of a transfer or cash withdrawal from the fixed account for up to six months. When you invest in the separate account, you bear the investment risk. However, TIAA bears the full investment risk for all accumulations in the fixed account. Currently TIAA guarantees that amounts in the fixed account will earn interest of at least 3 percent per year. At its 19 discretion, TIAA can credit amounts in the fixed account with interest at a higher rate than 3 percent per year. TIAA has sole investment discretion for the fixed account, subject to applicable law. This prospectus provides information mainly about the contract's variable component, which is funded by the separate account. For more about the fixed account, see the contract itself. TRANSFERS BETWEEN THE SEPARATE ACCOUNT AND THE FIXED ACCOUNT Subject to the conditions above, you can transfer some (at least $250 at a time) or all of the amount accumulated under your contract between the separate account and the fixed account. Currently, we don't charge you for transfers from the separate account to the fixed account. We don't currently limit the number of transfers from the separate account, but we reserve the right to do so in the future to one every 90 days. Transfers to the fixed account begin participating on the day following effectiveness of the transfer (see below). CASH WITHDRAWALS You can withdraw some or all of your accumulation in the separate account as cash. Cash withdrawals must be for at least $1,000 (or your entire accumulation, if less). We reserve the right to cancel any contract where no premiums have been paid to either the separate account or the fixed account for three years and your total amount in the separate account and the fixed account falls below $250. Currently, there's no charge for cash withdrawals. If you withdraw your entire accumulation in the separate account and the fixed account, we'll cancel your contract and all of our obligations to you under the contract will end. GENERAL CONSIDERATIONS FOR ALL TRANSFERS AND CASH WITHDRAWALS You can tell us how much you want to transfer or withdraw in dollars, accumulation units, or as a percentage of your accumulation. Transfers and cash withdrawals are effective at the end of the business day we receive your request and any required information and documentation. Transfers and cash withdrawals made at any time other than during a business day will be effective at the close of the next business day. You can also defer the effective date of a transfer or cash withdrawal to a future business day acceptable to us. To request a transfer, write to TIAA's home office, call our Automated Telephone Service at 1 800 842-2252 (there is an option to speak with a live person, if you wish) or use the TIAA-CREF Web Center's account access feature 20 over the Internet at www.tiaa-cref.org. If you make a telephone or Internet transfer at any time other than during a business day, it will be effective at the close of the next business day. We can suspend or terminate your ability to transfer by telephone or over the Internet at any time for any reason. TAX ISSUES Make sure you understand the possible federal and other income tax consequences of transfers and cash withdrawals. Cash withdrawals are usually taxed at the rates for ordinary income--i.e., they are not treated as capital gains. They may subject you to early-distribution taxes or penalties as well. For details, see "Federal Income Taxes," page 28. CHARGES SEPARATE ACCOUNT CHARGES Charges are deducted each valuation day from the assets of the separate account for various services required to manage investments, administer the separate account and the contracts, and to cover certain insurance risks borne by TIAA. We expect that expense deductions will be relatively low. Advisors, a wholly-owned indirect subsidiary of TIAA, provides the investment management services. TIAA itself provides the administrative services for the separate account and the contracts. INVESTMENT ADVISORY CHARGE This charge is for investment advice, portfolio accounting, custodial, and similar services provided for by Advisors. The investment management agreement between Advisors and the separate account sets the investment advisory fee at 0.30 percent annually. Currently, Advisors has agreed to waive a portion of that fee, so that the daily deduction is equivalent to 0.07 percent of net assets annually. ADMINISTRATIVE EXPENSE CHARGE This charge is for administration and operations, such as allocating premiums and administering accumulations. The current daily deduction is equivalent to 0.20 percent of net assets annually. MORTALITY AND EXPENSE RISK CHARGE TIAA imposes a daily charge as compensation for bearing certain mortality and expense risks in connection with the contract. The current daily deduction is equal to 0.10 percent of net assets annually. Accumulations and annuity payments aren't affected by changes in actual mortality experience or by TIAA's actual expenses. TIAA's mortality risks come from its contractual obligations to make annuity payments and to pay death benefits 21 before the annuity starting date. This assures that neither your own longevity nor any collective increase in life expectancy will lower the amount of your annuity payments. TIAA also bears a risk in connection with its death benefit guarantee, since a death benefit may exceed the actual amount of an accumulation at the time when it's payable. TIAA's expense risk is the possibility that TIAA's actual expenses for administering the contract and the separate account will exceed the amount recovered through the administrative expense deduction. If the mortality and expense risk charge isn't enough to cover TIAA's actual costs, TIAA will absorb the deficit. On the other hand, if the charge more than covers costs, the excess will belong to TIAA. TIAA will pay a fee from its general account assets, which may include amounts derived from the mortality and expense risk charge, to Teachers Personal Investors Services, Inc. (TPIS), the principal underwriter of the variable component of the contract for distribution of the variable component of the contract. OTHER CHARGES NO DEDUCTIONS FROM PREMIUMS The contract provides for no front-end charges. PREMIUM TAXES Currently, contracts issued to residents of several states and the District of Columbia are subject to a premium tax. Charges for premium taxes on a particular contract ordinarily will be deducted from the accumulation when it's applied to provide annuity payments. However, if a jurisdiction requires payment of premium taxes at other times, such as when premiums are paid or when cash withdrawals are taken, we'll deduct premium taxes at those times. Current state premium taxes, where charged, range from 1.00 percent to 3.50 percent of annuity payments. BROKERAGE FEES AND RELATED TRANSACTION EXPENSES Brokers' commissions, transfer taxes, and other portfolio fees are charged to the separate account (see the SAI). THE ANNUITY PERIOD All annuity payments are paid to the contractowner from the fixed account. TIAA fixed annuity payments are usually monthly. You can choose quarterly, semi-annual, and annual payments as well. TIAA reserves the right not to make payments at any interval that would cause the initial payment to be less than $100. The value of the amount accumulated upon which payments are based will be set at the end of the last calendar day of 22 the month before the annuity starting date. We transfer your separate account accumulation to the fixed account on that day. At the annuity starting date, the dollar amount of each periodic annuity payment is fixed, based upon the number and value of the separate account accumulation units being converted to annuity income, the annuity option chosen, the ages of the annuitant and (under a survivor income option) the annuity partner, and the annuity purchase rates at that time. (These will not be lower than the rates provided in your contract.) Payments won't change while the annuitant and the annuity partner (under a survivor income option) are alive. After the end of the accumulation period, your contract will no longer participate in the separate account. The total value of annuity payments may be more or less than total premiums paid by the contractowner. Technically all benefits are payable at TIAA's home office, but we'll send your annuity payments by mail to your home address or (on your request) by mail or electronic fund transfer to your bank. If the address or bank where you want your payments sent changes, it's your responsibility to let us know. We can send payments to your residence or bank abroad, although there are some countries where the U.S. Treasury Department imposes restrictions. ANNUITY STARTING DATE Generally you pick an annuity starting date (it has to be the first day of a month) when you first apply for a contract. If you don't, we'll tentatively assume the annuity starting date will be the latest permissible annuity starting date (i.e., the first day of the month of the annuitant's ninetieth birthday). You can change the annuity starting date at any time before annuity payments begin (see "Choices and Changes," page 32). In any case, the annuity starting date must be at least fourteen months after the date your contract is issued. For payments to begin on the annuity starting date, we must have received all information and documentation necessary for the income option you've picked. (For more information, contact TIAA--see page 33.) If we haven't received all the necessary information, we'll defer the annuity starting date until the first day of the month after the information has reached us, but not beyond the latest permissible annuity starting date. If, by the latest permissible annuity starting date, you haven't picked an income option or if we have not otherwise received all the necessary information, we will begin payments under the automatic election option stated in your contract. Your first annuity check may be delayed while we process your choice of income options and calculate the amount of your initial payment. 23 INCOME OPTIONS You may select from the several income options set forth in your contract (all from the fixed account) or any other annuity option available from TIAA at the time of selection. However, federal tax law might limit the options available to you. You may change your choice any time before payments begin, but once they have begun no change can be made. You have a number of different annuity options to choose among. The current options are: SINGLE LIFE ANNUITY Pays income (usually monthly) as long as the annuitant lives. Remember: All payments end at the annuitant's death so that it would be possible, for example, for the contractowner to receive only one payment if the annuitant died less than a month after annuity payments started. If you die before the annuitant, your beneficiary becomes the contractowner. SINGLE LIFE ANNUITY WITH A 10-, 15-, OR 20-YEAR GUARANTEED PERIOD Pays income (usually monthly) as long as the annuitant lives or until the end of the guaranteed period, whichever is longer. If the annuitant dies before the period is up, payments continue for the remaining time. If you die while any payments remain due, your beneficiary becomes the contractowner. PAYMENTS FOR A FIXED PERIOD Pays income (usually monthly) for a stipulated period of not less than two nor more than thirty years. At the end of the period you've chosen, payments stop. If you die before the period is up, your beneficiary becomes the contractowner. SURVIVOR INCOME OPTIONS Pays income at least as long as the annuitant and the annuity partner are alive, then continues upon the death of one at either the same or a reduced level at least until the second person dies. Once annuity payments begin under a survivor annuity, you can't change the annuity partner. If you die while any payments remain due, your beneficiary becomes the contractowner. FULL BENEFIT, WITH OR WITHOUT GUARANTEED PERIOD If the annuitant or the annuity partner dies, payments continue for the life of the survivor. If you haven't chosen a guaranteed period, all payments stop when the second person dies. If you've chosen a guaranteed period of 10, 15, or 20 years and both the annuitant and the annuity partner die before it elapses, payments continue for the rest of the period. TWO-THIRDS BENEFIT, WITH OR WITHOUT GUARANTEED PERIOD If the annuitant or the annuity partner dies, payments of two-thirds of the amount that would have been paid if both had 24 lived continue for the life of the survivor. If you haven't chosen a guaranteed period, all payments stop when the second person dies. If you've chosen a guaranteed period of 10, 15, or 20 years and both the annuitant and the annuity partner die before it elapses, payments of two-thirds of the amount that would have been paid if both had lived continue for the rest of the period. HALF-BENEFIT AFTER THE DEATH OF THE ANNUITANT, WITH OR WITHOUT GUARANTEED PERIOD If the annuity partner outlives the annuitant, payments of half the amount that would have been paid if the annuitant had lived will continue for the life of the annuity partner. If you haven't chosen a guaranteed period, all payments stop when the second person dies. If you've chosen a guaranteed period of 10, 15, or 20 years and both the annuitant and the annuity partner die before it elapses, payments of half the amount that would have been paid if the annuitant had lived continue for the rest of the period. We may make variable income options available in the future, subject to applicable law. DEATH BENEFITS Death benefits become payable when we receive proof that you or the annuitant has died during the accumulation period. When you fill out an application for a contract, you name one or more beneficiaries to receive the death benefit if you die. You can change your beneficiary at any time during the accumulation period (see "Choices and Changes," page 32). For more information on designating beneficiaries, contact TIAA or your legal advisor. If the annuitant dies during the accumulation period, you become the death benefit payee. Your accumulation will continue participating in the investment experience of the separate account up to and including the day when we receive proof of death. Ordinarily, we will transfer your separate account accumulation to the fixed account as of the day we receive proof of death. However, if the contractowner's spouse is the sole beneficiary, when the contractowner dies the spouse can choose to become the contractowner and continue the contract, or receive the death benefit. If the spouse does not make a choice within 60 days after we receive proof of death, no transfer will be made and the spouse will automatically become the contractowner. The spouse will also become the annuitant if the contractowner was the annuitant. 25 The amount of the death benefit will equal the greater of (1) the amount you have accumulated in the separate and fixed accounts on the day we receive proof of death or, if that isn't a business day, on the next business day, or (2) the total premiums paid under your contract minus any cash withdrawals (or surrender charges on cash withdrawals or transfers from the fixed account). If (2) is greater than (1), we'll deposit the difference in the fixed account as of the day we receive proof of death. You can choose in advance the method by which death benefits should be paid, or you can leave it up to the death benefit payee. Except with the SINGLE-SUM PAYMENT AND INTEREST PAYMENTS methods, the amount of each periodic payment is fixed (see "The Fixed Account," page 19). While you and the annuitant are both alive, you can change the method of payment you've chosen. You can also stipulate that your beneficiary not change the method you've specified in advance. (To choose, change, or restrict the method by which death benefits are to be paid, you or your beneficiary has to notify us in writing.) Once death benefits start, the method of payment can't be changed. To pay a death benefit, TIAA must have received all necessary forms and documentation. (For more information, contact TIAA--see page 33.) Even if we have not received all of the required information, death benefits must begin by the first day of the month following the 60th day after we receive proof of death. If no method of payment has been chosen by that time, we'll have the option of paying the entire death benefit to the death benefit payee within five years of death, using the PAYMENTS FOR A FIXED PERIOD method. If the contractowner isn't a natural person (e.g., it's an estate or a corporation), we'll apply these distribution requirements if the annuitant dies. METHODS OF PAYMENT TIAA limits the methods of payment for death benefits to those suitable under federal income tax law for annuity contracts. (For more information, see "Taxation of Annuities," page 29.) With methods offering periodic payments, benefits are usually monthly, but the death benefit payee can request to receive them quarterly, semiannually, or annually instead. Federal law may restrict the availability of certain methods to the death benefit payee; conversely, TIAA may offer additional methods in the future. At present, the methods of payment for TIAA death benefits are: SINGLE-SUM PAYMENT The entire death benefit is paid at once (within seven days after we receive all necessary forms and documentation). When the beneficiary is an estate, the single-sum method is 26 automatic, and TIAA reserves the right to pay death benefits only as a single sum to corporations, trustees, partnerships, guardians, or any beneficiary not a natural person. SINGLE LIFE ANNUITY Payable monthly for the life of the death benefit payee, with payments ending when he or she dies. SINGLE LIFE ANNUITY WITH A 10-, 15-, OR 20-YEAR GUARANTEED PERIOD Payable monthly for the death benefit payee's lifetime or until the end of the period chosen, whichever is later. If he or she dies before the period is up, the remaining payments continue to the person named to receive them (see "Choices and Changes," page 32). Federal tax law says the guaranteed period selected can't exceed the death benefit payee's life expectancy. PAYMENTS FOR A FIXED PERIOD Payable over two to thirty years, as determined by you or your beneficiary. At the end of the selected period, payments stop. If the death benefit payee dies before the period is up, the remaining payments continue to the person named to receive them. Federal tax law says the fixed period selected can't exceed the death benefit payee's life expectancy. INTEREST PAYMENTS We'll pay interest on the amount of the death benefit each month for two to thirty years. You (or your beneficiary, unless you specify otherwise) choose the period. The death benefit is payable at the end of the period chosen. If the death benefit payee dies before the interest payment period is up, the death benefit becomes payable immediately. For this interest-only method, the death benefit must be at least $5,000. The SINGLE LIFE ANNUITY AND THE SINGLE LIFE ANNUITY WITH A 10-, 15-, OR 20-YEAR GUARANTEED PERIOD methods are available only if the death benefit payee is a natural person. Under any method (except the Interest Payments method) that would result in payments of less than $100 a month, we reserve the right to require a change in choice that will result in payments of $100 or more. TIMING OF PAYMENTS Usually we'll make the following kinds of payments from the separate account within seven calendar days after we've received the information we need to process a request: 1. Cash withdrawals; 2. Transfers to the fixed account; and 3. Death benefits. We can extend the seven-day period only if (1) the New York Stock Exchange is closed (or trading restricted by the SEC) on a day that isn't a weekend or holiday; 27 (2) an SEC-recognized emergency makes it impractical for us to sell securities or determine the value of assets in the separate account; or (3) the SEC says by order that we can or must postpone payments to protect you and other separate account contractowners. FEDERAL INCOME TAXES The following discussion is based on our understanding of current federal income tax law as the IRS now interprets it. We can't guarantee that the law or the IRS's interpretation won't change. We haven't considered any applicable state or other tax laws. Of course, your own tax status or that of your beneficiary can affect your final outcome. TAX STATUS OF THE CONTRACT DIVERSIFICATION REQUIREMENTS Section 817(h) of the Internal Revenue Code (IRC) and the regulations under it provide that separate account investments underlying a contract must be "adequately diversified" for it to qualify as an annuity contract under IRC section 72. The separate account intends to comply with the diversification requirements of the regulations under section 817(h). This will affect how we make investments. Under the IRC, you could be considered the owner of the assets of the separate account used to support your contract. If this happens, you'd have to include income and gains from the separate account assets in your gross income. The IRS has published rulings stating that a variable contractowner will be considered the owner of separate account assets if the contractowner has any powers that the actual owner of the assets might have, such as the ability to exercise investment control. The Treasury Department says that the regulations on investment diversification don't provide guidance about when and how investor control of a segregated asset account's investment could cause the investor rather than the insurance company to be treated as the owner of the assets for tax purposes. The Treasury Department has also stated that the IRS would issue regulations or rulings clarifying the "extent to which policyholders may direct their investments to particular subaccounts without being treated as owners of the underlying assets." Your ownership rights under the contract are similar but not identical to those described by the IRS in rulings that held that contractowners were not owners of separate account assets, so the IRS might not rule the same way in your case. TIAA reserves the right to change the contract if necessary to help prevent your being considered the owner of the separate account's assets. 28 REQUIRED DISTRIBUTIONS To qualify as an annuity contract under section 72(s) of the IRC, a contract must provide that: (a) if any owner dies on or after the annuity starting date but before all amounts under the contract have been distributed, the remaining amounts will be distributed at least as quickly as under the method being used when the owner died; and (b) if any owner dies before the annuity starting date, all amounts under the contract will be distributed within five years of the date of death. So long as the distributions begin within a year of the owner's death, the IRS will consider these requirements satisfied for any part of the owner's interest payable to or for the benefit of a "designated beneficiary" and distributed over the beneficiary's life or over a period that cannot exceed the beneficiary's life expectancy. A designated beneficiary is the person the owner names to assume ownership when the owner dies. A designated beneficiary must be a natural person. If a contractowner's spouse is the designated beneficiary, he or she can continue the contract when the contractowner dies. The contract is designed to comply with section 72(s). TIAA will review the contract and amend it if necessary to make sure that it continues to comply with the section's requirements. TAXATION OF ANNUITIES Assuming the contracts qualify as annuity contracts for federal income tax purposes: IN GENERAL IRC section 72 governs annuity taxation generally. We believe an owner who is a natural person usually won't be taxed on increases in the value of a contract until there is a distribution (I.E., the owner withdraws all or part of the accumulation or takes annuity payments). Assigning, pledging, or agreeing to assign or pledge any part of the accumulation usually will be considered a distribution. Withdrawals of accumulated investment earnings are taxable as ordinary income. Generally under the IRC, withdrawals are first allocated to investment earnings. The owner of any annuity contract who is not a natural person generally must include in income any increase in the excess of the accumulation over the "investment in the contract" during the taxable year. There are some exceptions to this, and agents of prospective owners that are not natural persons may wish to discuss them with a competent tax advisor. 29 The following discussion applies generally to contracts owned by a natural person: WITHDRAWALS If you withdraw funds from your contract before the annuity starting date, IRC section 72(e) usually deems taxable any amounts received to the extent that the accumulation value immediately before the withdrawal exceeds the investment in the contract. Any remaining portion of the withdrawal is not taxable. The investment in the contract usually equals all premiums paid by the contractowner or on the contractowner's behalf. If you withdraw your entire accumulation under a contract, you will be taxed only on the part that exceeds your investment in the contract. ANNUITY PAYMENTS Although tax consequences can vary with the income option you pick, IRC section 72(b) provides generally that, before you recover the investment in the contract, gross income does not include that fraction of any annuity income payments that equals the ratio of investment in the contract to the expected return at the annuity starting date. After you recover your investment in the contract, all additional annuity payments are fully taxable. TAXATION OF DEATH BENEFIT PROCEEDS Amounts may be paid from a contract because an owner has died. If the payments are made in a single sum, they're taxed the same way a full withdrawal from the contract is taxed. If they are distributed as annuity payments, they're taxed as annuity payments. Generally, under the Interest Payments method the death benefit will be taxed as though it were distributed as a single-sum payment at the beginning of the payment period, with interest taxed as it is paid. PENALTY TAX ON SOME WITHDRAWALS You may have to pay a penalty tax (10 percent of the amount treated as taxable income) on some withdrawals. However, there is usually no penalty on distributions: (1) on or after you reach 59 1/2; (2) after you die (or after the annuitant dies, if the owner isn't an individual); (3) after you become disabled; or (4) that are part of a series of substantially equal periodic (at least annual) payments for your life (or life expectancy) or the joint life (or life expectancy) of you and your beneficiary. POSSIBLE TAX CHANGES Legislation is proposed from time to time that would change the taxation of annuity contracts. 30 It is possible that such legislation could be enacted and that it could be retroactive (that is, effective prior to the date of the change). You should consult a tax adviser with respect to legislative developments and their effect on the Contract. TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A CONTRACT Transferring contract ownership, designating an annuitant, payee or other beneficiary who is not also the owner, or exchanging a contract can have other tax consequences that we don't discuss here. If you're thinking about any of those transactions, contact a tax adviser. WITHHOLDING Annuity distributions usually are subject to withholding for the recipient's federal income tax liability at rates that vary according to the type of distribution and the recipient's tax status. However, recipients can usually choose not to have tax withheld from distributions. MULTIPLE CONTRACTS In determining gross income, section 72(e) generally treats as one contract all TIAA and its affiliate's non-qualified deferred annuity contracts issued after October 21, 1988 to the same owner during any calendar year. This could affect when income is taxable and how much might be subject to the 10 percent penalty tax (see above). It is possible, for instance, that if you take annuity payments from only one of the contracts, they could be taxed like individual withdrawals (see above). There might be other situations where Treasury concludes that it would be appropriate to treat two or more annuity contracts purchased by the same owner as if they were one contract. Consult a tax adviser before buying more than one annuity contract for the purpose of gaining a tax advantage. POSSIBLE CHARGE FOR TIAA'S TAXES Currently we don't charge the separate account for any federal, state, or local taxes on it or its contracts (other than premium taxes--see page 22), but we reserve the right to charge the separate account or the contracts for any tax or other cost resulting from the tax laws that we believe should be attributed to them. TAX ADVICE What we tell you here about federal and other taxes isn't comprehensive and is for general information only. It doesn't cover every situation. Taxation varies depending on the circumstances, and state and local taxes may also be involved. For complete information on your personal tax situation, check with a qualified tax adviser. 31 VOTING RIGHTS The separate account doesn't plan to hold annual meetings of contractowners. When contractowner meetings are held, contractowners generally can vote (1) to elect the management committee; (2) to ratify the selection of an independent auditor for the separate account; and (3) on any other matter that requires a vote by contractowners. On the record date, you'll have one vote per dollar of your accumulation. When we use the phrase "majority of outstanding voting securities" in this prospectus and the SAI, we mean the lesser of (a) 67 percent of the voting securities present, as long as the holders of at least half the voting securities are present or represented by proxy; or (b) 50 percent of the outstanding voting securities. If a majority of outstanding voting securities isn't required to decide a question, we'll generally require a quorum of 10 percent of the securities, with a simple majority required to decide the issue. If laws, regulations, or legal interpretations make it unnecessary to submit any issue to a vote, or otherwise restrict your voting rights, we reserve the right to act as permitted. GENERAL MATTERS CHOICES AND CHANGES As long as the contract permits, the contractowner (or the annuitant, the annuity partner, beneficiary, or any other payee) can choose or change any of the following: (1) an annuity starting date; (2) an income option; (3) a transfer; (4) a method of payment for death benefits; (5) an annuity partner, beneficiary, or other person named to receive payments; and (6) a cash withdrawal or other distribution. You have to make your choices or changes via a written notice satisfactory to us and received at our home office (see below). You can change the terms of a transfer, cash withdrawal, or other cash distribution only before they're scheduled to take place. When we receive a notice of a change in beneficiary or other person named to receive payments, we'll execute the change as of the date it was signed, even if the signer dies in the meantime. We execute all other changes as of the date received. As already mentioned, we'll delay the effective date of some transactions until we receive additional documentation (see "Remitting Premiums," page 17). TELEPHONE AND INTERNET TRANSACTIONS You can use our Automated Telephone Service (ATS) or the TIAA-CREF Web Center's account access feature over the Internet to check your accumulation balances and/or your current allocation percentages, transfer between the separate account and the fixed account, and/or allocate future premiums to the separate account or the fixed account. 32 You will be asked to enter your Personal Identification Number (PIN) and Social Security Number for both systems. Both will lead you through the transaction process and will use reasonable procedures to confirm that instructions given are genuine. All transactions made over the ATS and through the Web Center are electronically recorded. To use the ATS, you need to call 1 800 842-2252 on a touch-tone phone. To use the web Center's account access feature, access the TIAA-CREF Internet home page at www.tiaa-cref.org. We can suspend or terminate your ability to transact by telephone or over the Internet at any time for any reason. Also, telephone and Internet transactions may not always be available. TIAA will not be responsible for loss due to unauthorized or fraudulent transactions if it follows such procedures. CONTACTING TIAA We won't consider any notice, form, request, or payment to have been received by TIAA until it reaches our home office: Teachers Insurance and Annuity Association of America, 730 Third Avenue, New York, New York 10017- 3206, or the post office box specifically designated for the purpose. You can ask questions by calling toll-free 1 800 223-1200. ELECTRONIC PROSPECTUSES If you received this prospectus electronically and would like a paper copy, please call 1 800 842-2733, extension 5509, and we will send it to you. HOUSEHOLDING To cut costs and eliminate duplicate documents sent to your home, we may begin mailing only one copy of the separate account prospectus, prospectus supplements, annual and semi-annual reports, or any other required documents, to your household, even if more than one contractowner lives there. If you would prefer to continue receiving your own copy of any of these documents, you may call us toll-free at 1 800 842-2733, extension 5509, or write us. SIGNATURE REQUIREMENTS For some transactions, we may require your signature to be notarized or guaranteed by a commercial bank or a member of a national securities exchange. ERRORS OR OMISSIONS We reserve the right to correct any errors or omissions on any form, report, or statement that we send you. 33 DISTRIBUTION OF THE CONTRACTS The contracts are offered continuously by Teachers Personal Investors Services, Inc. (TPIS) and, in some instances, TIAA-CREF Individual & Institutional Services, Inc. (Services), which are both registered with the SEC as broker-dealers, are members of the NASD and are direct or indirect subsidiaries of TIAA. TPIS may be considered the "principal underwriter" for interests in the contract. Anyone distributing the contract must be a registered representative of either TPIS or Services, whose main offices are both at 730 Third Avenue, New York, New York 10017-3206. No commissions are paid in connection with the distribution of the contracts. LEGAL PROCEEDINGS The assets of the separate account are not subject to any legal actions. Neither TIAA nor TPIS nor Advisors is involved in any legal action that we consider material to its obligations to the separate account. 34 TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION PAGE IN THE STATEMENT OF ADDITIONAL ITEM INFORMATION - ---- ------------ Investment Restrictions ........................................... B-3 Investment Policies and Risk Considerations ....................... B-3 Options and Futures ............................................... B-3 Firm Commitment Agreements and Purchase of "When-Issued" Securities B-6 Lending of Securities ............................................. B-6 Repurchase Agreements ............................................. B-6 Swap Transactions ................................................. B-7 Segregated Accounts ............................................... B-7 Other Investment Techniques and Opportunities ..................... B-7 Portfolio Turnover ................................................ B-7 Valuation of Assets ............................................... B-8 Equity Securities ................................................. B-8 Money Market Instruments .......................................... B-8 Options ........................................................... B-8 Investments for Which Market Quotations Are Not Readily Available.. B-8 Management ........................................................ B-8 Separate Account Management Committee and Officers ................ B-8 Compensation of Managers .......................................... B-13 Investment Advisory and Related Services .......................... B-14 Investment Advisory Services ...................................... B-14 Administrative Services ........................................... B-15 Advisors and TIAA ................................................. B-15 Custody of Portfolio .............................................. B-15 Auditors .......................................................... B-15 Brokerage Allocation .............................................. B-15 Performance Information ........................................... B-16 Total Return Information for the Separate Account ................. B-16 Performance Comparisons ........................................... B-17 Illustrating Compounding, Tax Deferral, and Expense Deductions .... B-17 Periodic Reports .................................................. B-17 General Matters ................................................... B-18 Assignment of Contracts ........................................... B-18 Payment to an Estate, Guardian, Trustee, etc. ..................... B-18 Benefits Based on Incorrect Information ........................... B-18 Proof of Survival ................................................. B-18 State Regulation .................................................. B-18 Legal Matters ..................................................... B-18 Experts ........................................................... B-18 Additional Considerations ......................................... B-18 Additional Information ............................................ B-19 Financial Statements .............................................. B-19 35 - ------------------------------------------------------------------------------- [TIAA 730 Third Avenue ----------------- CREF LOGO] New York NY 10017-3206 PRESORTED STANDARD U.S. POSTAGE PAID TIAA-CREF ----------------- [RECYCLE LOGO] Printed on recycled paper TVA1PRO-4/02 STATEMENT OF ADDITIONAL INFORMATION ================================= April 1, 2002 Individual Deferred Variable Annuities Funded through TIAA SEPARATE ACCOUNT VA-1 of Teachers Insurance and Annuity Association of America ================================= This Statement of Additional Information is not a prospectus and should be read in connection with the current prospectus dated April 1, 2002 (the "Prospectus"), for the variable annuity that is the variable component of the contract. The Prospectus is available without charge upon written or oral request to: Teachers Insurance and Annuity Association of America, 730 Third Avenue, New York, New York 10017-3206, Attention: Central Services; telephone 1 800 842-2733, extension 5509. Terms used in the Prospectus are incorporated in this Statement. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACTS. TABLE OF CONTENTS
Location of Page in the Additional Statement of Information in Additional Prospectus, if Item Information Applicable - ------------------------------------------------------------------------------------------------------- Investment Restrictions ............................................. B-3 14 Investment Policies and Risk Considerations ......................... B-3 11-15 Options and Futures ............................................. B-3 14-15 Firm Commitment Agreements and Purchase of "When-Issued Securities" . B-6 14 Lending of Securities ........................................... B-6 15 Repurchase Agreements ........................................... B-6 14 Swap Transactions ............................................... B-7 14 Segregated Accounts ............................................. B-7 Other Investment Techniques and Opportunities ................... B-7 Portfolio Turnover .................................................. B-7 Valuation of Assets ................................................. B-8 14 Equity Securities ............................................... B-8 Money Market Instruments ........................................ B-8 Options ......................................................... B-8 Investments for Which Market Quotations are Not Readily Available B-8 Management .......................................................... B-8 16 Separate Account Management Committee and Officers .............. B-8 16 Compensation of Managers ........................................ B-13 Investment Advisory and Related Services ............................ B-14 Investment Advisory Services .................................... B-14 Administrative Services ......................................... B-15 Advisors and TIAA ............................................... B-15 Custody of Portfolio ............................................ B-15 Auditors ........................................................ B-15 Brokerage Allocation ................................................ B-15 15 Performance Information ............................................. B-16 Total Return Information for the Separate Account ............... B-16 Performance Comparisons ......................................... B-17 Illustrating Compounding, Tax Deferral, and Expense Deductions .. B-17 Periodic Reports .................................................... B-17 General Matters ..................................................... B-18 Assignment of Contracts ......................................... B-18 Payment to an Estate, Guardian, Trustee, etc. ................... B-18 Benefits Based on Incorrect Information ......................... B-18 Proof of Survival ............................................... B-18 State Regulation .................................................... B-18 10-11 Legal Matters ....................................................... B-18 34 Experts ............................................................. B-18 Additional Considerations ........................................... B-18 Additional Information .............................................. B-19 Financial Statements ................................................ B-19 8-9
B-2 INVESTMENT RESTRICTIONS The following restrictions are fundamental policies with respect to the separate account and may not be changed without the approval of a majority of the outstanding voting securities, as that term is defined under the 1940 Act, in the separate account: 1. The separate account will not issue senior securities except as SEC regulations permit; 2. The separate account will not borrow money, except: (a) the separate account may purchase securities on margin, as described in restriction 9 below; and (b) from banks (only in amounts not in excess of 331/3% of the market value of the separate account's assets at the time of borrowing), and, from other sources, for temporary purposes (only in amounts not exceeding 5% of the separate account's total assets taken at market value at the time of borrowing). Money may be temporarily obtained through bank borrowing, rather than through the sale of portfolio securities, when such borrowing appears more attractive for the separate account; 3. The separate account will not underwrite the securities of other companies, except to the extent that it may be deemed an underwriter in connection with the disposition of securities from its portfolio; 4. The separate account will not, with respect to at least 75% of the value of its total assets, invest more than 5% of its total assets in the securities of any one issuer other than securities issued or guaranteed by the United States Government, its agencies or instrumentalities; 5. The separate account will not make an investment in an industry if after giving effect to that investment the separate account's holding in that industry would exceed 25% of the separate account's total assets--this restriction, however, does not apply to investments in obligations issued or guaranteed by the United States Government, its agencies or instrumentalities; 6. The separate account will not purchase real estate or mortgages directly; 7. The separate account will not purchase commodities or commodities contracts, except to the extent futures are purchased as described herein; 8. The separate account will not make loans, except: (a) that it may make loans of portfolio securities not exceeding 33 1/3% of the value of its total assets, which are collateralized by either cash, United States Government securities, or other means permitted by applicable law, equal to at least 102% of the market value of the loaned securities, or such lesser percentage as may be permitted by the New York State Insurance Department (not to fall below 100% of the market value of the loaned securities), as reviewed daily; (b) loans through entry into repurchase agreements may be made; (c) privately placed debt securities may be purchased; or (d) participation interests in loans, and similar investments, may be purchased; and 9. The separate account will not purchase any security on margin (except that the separate account may obtain such short-term credit as may be necessary for the clearance of purchases and sales of portfolio securities). If a percentage restriction is adhered to at the time of investment, a later increase or decrease in percentage beyond the specified limit resulting from a change of values in portfolio securities will not be considered a violation. INVESTMENT POLICIES AND RISK CONSIDERATIONS OPTIONS AND FUTURES The separate account may engage in options and futures strategies to the extent permitted by the New York State Insurance Department and subject to SEC and Commodity Futures Trading Commission ("CFTC") requirements. It is not the intention of the separate account to use options and futures strategies in a speculative manner but rather to use them primarily as hedging techniques or for cash management purposes. OPTIONS. Option-related activities could include (1) the sale of covered call option contracts, and the purchase of call option contracts for the purpose of a closing purchase transaction; (2) the buying of covered put option contracts, and the selling of put option contracts to close out a position acquired through the purchase of such options; and (3) the selling of call option contracts or the buying of put option contracts on groups of securities and on futures on groups of securities and the buying of similar call option contracts or the selling of put option contracts to close out a position acquired through a sale of such options. This list of options-related activities is not intended to be exclusive, and the separate account may engage in other types of options transactions consistent with its investment objective and policies and applicable law. A call option is a short-term contract (generally having a duration of nine months or less) which gives the purchaser of the option the right to purchase the underlying security at a fixed exercise price at any time prior to the expiration of the option regardless of the market price of the security during the option period. As consideration for the call option, the purchaser pays the seller a premium, which the seller retains whether or not the option is exercised. As the seller of a call option, the separate account has the obligation, upon the exercise of the option by the purchaser, to sell the underlying security at the exercise price at any time during the option period. The selling of a call option benefits the separate account if over the option period the underlying security declines in value or does not appreciate above the aggregate of the exercise price and the premium. However, the separate account risks an "opportunity loss" of profits if the underlying security appreciates above the aggregate value of the exercise price and the premium. The separate account may close out a position acquired through selling a call option by buying a call option on the B-3 same security with the same exercise price and expiration date as the call option which it had previously sold on that security. Depending on the premium for the call option purchased by the separate account, the separate account will realize a profit or loss on the transaction. A put option is a similar short-term contract that gives the purchaser of the option the right to sell the underlying security at a fixed exercise price at any time prior to the expiration of the option regardless of the market price of the security during the option period. As consideration for the put option the separate account, as purchaser, pays the seller a premium, which the seller retains whether or not the option is exercised. The seller of a put option has the obligation, upon the exercise of the option by the separate account, to purchase the underlying security at the exercise price at any time during the option period. The buying of a covered put contract limits the downside exposure for the investment in the underlying security to the combination of the exercise price less the premium paid. The risk of purchasing a put is that the market price of the underlying stock prevailing on the expiration date may be above the option's exercise price. In that case the option would expire worthless and the entire premium would be lost. The separate account may close out a position acquired through buying a put option by selling a put option on the same security with the same exercise price and expiration date as the put option which it had previously bought on the security. Depending on the premium of the put option sold by the separate account, the separate account would realize a profit or loss on the transaction. In addition to options (both calls and puts) on individual securities, there are also options on groups of securities, such as the Standard & Poor's 100 Index traded on the Chicago Board Options Exchange. There are also options on the futures of groups of securities such as the Standard & Poor's 500 Stock Index and the New York Stock Exchange Composite Index. The selling of such calls can be used in anticipation of, or in, a general market or market sector decline that may adversely affect the market value of the separate account's portfolio of securities. To the extent that the separate account's portfolio of securities changes in value in correlation with a given stock index, the sale of call options on the futures of that index would substantially reduce the risk to the portfolio of a market decline, and, by so doing, provides an alternative to the liquidation of securities positions in the portfolio with resultant transaction costs. A risk in all options, particularly the relatively new options on groups of securities and on the futures on groups of securities, is a possible lack of liquidity. This will be a major consideration before the separate account deals in any option. There is another risk in connection with selling a call option on a group of securities or on the futures of groups of securities. This arises because of the imperfect correlation between movements in the price of the call option on a particular group of securities and the price of the underlying securities held in the portfolio. Unlike a covered call on an individual security, where a large movement on the upside for the call option will be offset by a similar move on the underlying stock, a move in the price of a call option on a group of securities may not be offset by a similar move in the price of securities held due to the difference in the composition of the particular group and the portfolio itself. FUTURES. To the extent permitted by applicable regulatory authorities, the separate account may purchase and sell futures contracts on securities or other instruments, or on groups or indexes of securities or other instruments. The purpose of hedging techniques using financial futures is to protect the principal value of a fund against adverse changes in the market value of securities or instruments in its portfolio, and to obtain better returns on future investments than actually may be available at the future time. Since these are hedging techniques, the gains or losses on the futures contract normally will be offset by losses or gains respectively on the hedged investment. Futures contracts also may be offset prior to the future date by executing an opposite futures contract transaction. A futures contract on an investment is a binding contractual commitment which, if held to maturity, will result in an obligation to make or accept delivery, during a particular future month, of the securities or instrument underlying the contract. By purchasing a futures contract-assuming a "long" position-the separate account legally will obligate itself to accept the future delivery of the underlying security or instrument and pay the agreed price. By selling a futures contract--assuming a "short" position--it legally will obligate itself to make the future delivery of the security or instrument against payment of the agreed price. Positions taken in the futures markets are not normally held to maturity, but are instead liquidated through offsetting transactions which may result in a profit or a loss. While futures positions taken by the separate account usually will be liquidated in this manner, the separate account may instead make or take delivery of the underlying securities or instruments whenever it appears economically advantageous to the separate account to do so. A clearing corporation associated with the exchange on which futures are traded assumes responsibility for closing-out positions and guarantees that the sale and purchase obligations will be performed with regard to all positions that remain open at the termination of the contract. A stock index futures contract, unlike a contract on a specific security, does not provide for the physical delivery of securities, but merely provides for profits and losses resulting from changes in the market value of the contract to be credited or debited at the close of each trading day to the respective accounts of the parties to the contract. On the contract's expiration date, a final cash settlement occurs and the futures positions simply are closed out. Changes in the market value of a particular stock index futures contract reflect changes in the specified index of equity securities on which the future is based. Stock index futures may be used to hedge the equity investments of the separate account with regard to market B-4 (systematic) risk (involving the market's assessment of overall economic prospects), as distinguished from stock-specific risk (involving the market's evaluation of the merits of the issuer of a particular security). By establishing an appropriate "short" position in stock index futures, the separate account may seek to protect the value of its securities portfolio against an overall decline in the market for equity securities. Alternatively, in anticipation of a generally rising market, the separate account can seek to avoid losing the benefit of apparently low current prices by establishing a "long" position in stock index futures and later liquidating that position as particular equity securities are in fact acquired. To the extent that these hedging strategies are successful, the separate account will be affected to a lesser degree by adverse overall market price movements, unrelated to the merits of specific portfolio equity securities, than would otherwise be the case. Unlike the purchase or sale of a security, no price is paid or received by the separate account upon the purchase or sale of a futures contract. Initially, the separate account will be required to deposit in a custodial account an amount of cash, United States Treasury securities, or other permissible assets equal to approximately 5% of the contract amount. This amount is known as "initial margin." The nature of initial margin in futures transactions is different from that of margin in security transactions in that futures contract margin does not involve the borrowing of funds by the customer to finance the transactions. Rather, the initial margin is in the nature of a performance bond or good faith deposit on the contract that is returned to the separate account upon termination of the futures contract assuming all contractual obligations have been satisfied. Subsequent payments to and from the broker, called "variation margin," will be made on a daily basis as the price of the underlying stock index fluctuates making the long and short positions in the futures contract more or less valuable, a process known as "marking to the market." For example, when the separate account has purchased a stock index futures contract and the price of the underlying stock index has risen, that position will have increased in value, and the separate account will receive from the broker a variation margin payment equal to that increase in value. Conversely, where the separate account has purchased a stock index futures contract and the price of the underlying stock index has declined, the position would be less valuable and the separate account would be required to make a variation margin payment to the broker. At any time prior to expiration of the futures contract, the separate account may elect to close the position by taking an opposite position which will operate to terminate the separate account's position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid by or released to the separate account, and the separate account realizes a loss or a gain. All margin payments will be made to a custodian in the broker's name. There are several risks in connection with the use by the separate account of a futures contract as a hedging device. One risk arises because of the imperfect correlation between movements in the prices of the futures contracts and movements in the securities or instruments that are the subject of the hedge. The separate account will attempt to reduce this risk by engaging in futures transactions, to the extent possible, where, in our judgment, there is a significant correlation between changes in the prices of the futures contracts and the prices of the separate account's portfolio securities or instruments sought to be hedged. Successful use of futures contracts by the separate account for hedging purposes also is subject to the user's ability to predict correctly movements in the direction of the market. For example, it is possible that, where the separate account has sold futures to hedge its portfolio against declines in the market, the index on which the futures are written may advance and the values of securities or instruments held in the separate account's portfolio may decline. If this occurred, the separate account would lose money on the futures and also experience a decline in value in its portfolio investments. However, we believe that over time the value of the separate account's portfolio will tend to move in the same direction as the market indices that are intended to correlate to the price movements of the portfolio securities or instruments sought to be hedged. It also is possible that, for example, if the separate account has hedged against the possibility of the decline in the market adversely affecting stocks held in its portfolio and stock prices increased instead, the separate account will lose part or all of the benefit of increased value of those stocks that it has hedged because it will have offsetting losses in its futures positions. In addition, in such situations, if the separate account has insufficient cash, it may have to sell securities or instruments to meet daily variation margin requirements. Such sales may be, but will not necessarily be, at increased prices that reflect the rising market. The separate account may have to sell securities or instruments at a time when it may be disadvantageous to do so. In addition to the possibility that there may be an imperfect correlation, or no correlation at all, between movements in the futures contracts and the portion of the portfolio being hedged, the prices of futures contracts may not correlate perfectly with movements in the underlying security or instrument due to certain market distortions. First, all transactions in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions that could distort the normal relationship between the index and futures markets. Second, the margin requirements in the futures market are less onerous than margin requirements in the securities market, and as a result the futures market may attract more speculators than the securities market does. Increased participation by speculators in the futures market also may cause temporary price distortions. Due to the possibility of price distortion in the futures market and also because of the imperfect correlation between movements in the futures contracts and the portion of the portfolio being hedged, even a correct forecast of general market trends by Advisors still may not result in a successful hedging transaction over a very short time period. B-5 The separate account may also use futures contracts and options on futures contracts to manage its cash flow more effectively. To the extent that the separate account enters into non-hedging positions, it will do so only in accordance with certain CFTC exemptive provisions. Thus, pursuant to CFTC Rule 4.5, the aggregate initial margin and premiums required to establish non- hedging positions in commodity futures or commodity options contracts may not exceed 5% of the liquidation value of the separate account's portfolio, after taking into account unrealized profits and unrealized losses on any such contracts it has entered into (provided that the in-the-money amount of an option that is in-the-money when purchased may be excluded in computing such 5%). Options and futures transactions may increase the separate account's transaction costs and portfolio turnover rate and will be initiated only when consistent with its investment objectives. FIRM COMMITMENT AGREEMENTS AND PURCHASE OF "WHEN-ISSUED" SECURITIES The separate account can enter into firm commitment agreements for the purchase of securities on a specified future date. When the separate account enters into firm commitment agreements, liability for the purchase price --and the rights and risks of ownership of the securities--accrues to the separate account at the time it becomes obligated to purchase such securities, although delivery and payment occur at a later date. Accordingly, if the market price of the security should decline, the effect of the agreement would be to obligate the separate account to purchase the security at a price above the current market price on the date of delivery and payment. During the time the separate account is obligated to purchase such securities, it will be required to segregate assets (see "Segregated Accounts," page B-7). The separate account will not purchase securities on a "when issued" basis if, as a result, more than 15% of its net assets would be so invested. LENDING OF SECURITIES Subject to investment restriction 8(a) on page B-3 (relating to loans of portfolio securities), the separate account may lend its securities to brokers and dealers that are not affiliated with TIAA, are registered with the SEC and are members of the NASD, and also to certain other financial institutions. All loans will be fully collateralized. In connection with the lending of its securities, the separate account will receive as collateral cash, securities issued or guaranteed by the United States Government (i.e., Treasury securities), or other collateral permitted by applicable law, which at all times while the loan is outstanding will be maintained in amounts equal to at least 102% of the current market value of the loaned securities, or such lesser percentage as may be permitted by the New York State Insurance Department (not to fall below 100% of the market value of the loaned securities), as reviewed daily. By lending its securities, the separate account will receive amounts equal to the interest or dividends paid on the securities loaned and in addition will expect to receive a portion of the income generated by the short- term investment of cash received as collateral or, alternatively, where securities or a letter of credit are used as collateral, a lending fee paid directly to the separate account by the borrower of the securities. Such loans will be terminable by the separate account at any time and will not be made to affiliates of TIAA. The separate account may terminate a loan of securities in order to regain record ownership of, and to exercise beneficial rights related to, the loaned securities, including but not necessarily limited to voting or subscription rights, and may, in the exercise of its fiduciary duties, terminate a loan in the event that a vote of holders of those securities is required on a material matter. The separate account may pay reasonable fees to persons unaffiliated with the separate account for services or for arranging such loans. Loans of securities will be made only to firms deemed creditworthy. As with any extension of credit, however, there are risks of delay in recovering the loaned securities, should the borrower of securities default, become the subject of bankruptcy proceedings, or otherwise be unable to fulfill its obligations or fail financially. REPURCHASE AGREEMENTS Repurchase agreements have the characteristics of loans by the separate account, and will be fully collateralized (either with physical securities or evidence of book entry transfer to the account of the custodian bank) at all times. During the term of the repurchase agreement, the separate account retains the security subject to the repurchase agreement as collateral securing the seller's repurchase obligation, continually monitors the market value of the security subject to the agreement, and requires the separate account's seller to deposit with the separate account additional collateral equal to any amount by which the market value of the security subject to the repurchase agreement falls below the resale amount provided under the repurchase agreement. The separate account will enter into repurchase agreements only with member banks of the Federal Reserve System, and with primary dealers in United States Government securities or their wholly-owned subsidiaries whose creditworthiness has been reviewed and found satisfactory by Advisors and who have, therefore, been determined to present minimal credit risk. Securities underlying repurchase agreements will be limited to certificates of deposit, commercial paper, bankers' acceptances, or obligations issued or guaranteed by the United States Government or its agencies or instrumentalities, in which the separate account may otherwise invest. If a seller of a repurchase agreement defaults and does not repurchase the security subject to the agreement, the separate account would look to the collateral security underlying the seller's repurchase agreement, including the securities subject to the repurchase agreement, for satisfaction of the seller's obligation to the separate account; in such event the separate account might incur disposition costs in liquidating the collateral and might suffer a loss if the value of the collateral declines. In addition, if bankruptcy B-6 proceedings are instituted against a seller of a repurchase agreement, realization upon the collateral may be delayed or limited. SWAP TRANSACTIONS The separate account may, to the extent permitted by the New York State Insurance Department and the SEC, enter into privately negotiated "swap" transactions with other financial institutions in order to take advantage of investment opportunities generally not available in public markets. In general, these transactions involve "swapping" a return based on certain securities, instruments, or financial indices with another party, such as a commercial bank, in exchange for a return based on different securities, instruments, or financial indices. By entering into swap transactions, the separate account may be able to protect the value of a portion of its portfolio against declines in market value. The separate account may also enter into swap transactions to facilitate implementation of allocation strategies between different market segments or countries or to take advantage of market opportunities that may arise from time to time. The separate account may be able to enhance its overall performance if the return offered by the other party to the swap transaction exceeds the return swapped by the separate account. However, there can be no assurance that the return the separate account receives from the counterparty to the swap transaction will exceed the return it swaps to that party. While the separate account will only enter into swap transactions with counterparties it considers creditworthy (and will monitor the creditworthiness of parties with which it enters into swap transactions), a risk inherent in swap transactions is that the other party to the transaction may default on its obligations under the swap agreement. If the other party to the swap transaction defaults on its obligations, the separate account would be limited to contractual remedies under the swap agreement. There can be no assurance that the separate account will succeed when pursuing its contractual remedies. To minimize the separate account's exposure in the event of default, the separate account will usually enter into swap transactions on a net basis (i.e., the parties to the transaction will net the payments payable to each other before such payments are made). When the separate account enters into swap transactions on a net basis, the net amount of the excess, if any, of the separate account's obligations over its entitlements with respect to each such swap agreement will be accrued on a daily basis and an amount of liquid assets having an aggregate market value at least equal to the accrued excess will be segregated by the separate account's custodian. To the extent the separate account enters into swap transactions other than on a net basis, the amount segregated will be the full amount of the separate account's obligations, if any, with respect to each such swap agreement, accrued on a daily basis (see "Segregated Accounts," below). Swap agreements may be considered illiquid by the SEC staff and subject to the limitations on illiquid investments. To the extent that there is an imperfect correlation between the return the separate account is obligated to swap and the securities or instruments representing such return, the value of the swap transaction may be adversely affected. The separate account therefore will not enter into a swap transaction unless it owns or has the right to acquire the securities or instruments representative of the return it is obligated to swap with the counterparty to the swap transaction. It is not the intention of the separate account to engage in swap transactions in a speculative manner but rather primarily to hedge or manage the risks associated with assets held in, or to facilitate the implementation of portfolio strategies of purchasing and selling assets for, the separate account. SEGREGATED ACCOUNTS In connection with when-issued securities, firm commitment agreements, and certain other transactions in which the separate account incurs an obligation to make payments in the future, the separate account may be required to segregate assets with its custodian bank in amounts sufficient to settle the transaction. To the extent required, such segregated assets will consist of liquid assets such as cash, United States Government securities or other appropriate high grade debt obligations or other securities as may be permitted by law. OTHER INVESTMENT TECHNIQUES AND OPPORTUNITIES The separate account may take certain actions with respect to merger proposals, tender offers, conversion of equity-related securities and other investment opportunities with the objective of enhancing the portfolio's overall return, irrespective of how these actions may affect the weight of the particular securities in the separate account's portfolio. PORTFOLIO TURNOVER The transactions engaged in by the separate account are reflected in the separate account's portfolio turnover rate. The rate of portfolio turnover is calculated by dividing the lesser of the amount of purchases or sales of portfolio securities during the fiscal year by the monthly average of the value of the separate account's portfolio securities (excluding from the computation all securities, including options, with maturities at the time of acquisition of one year or less). A high rate of portfolio turnover generally involves correspondingly greater brokerage commission expenses, which must be borne directly by the separate account and ultimately by the separate account's contractowners. However, because portfolio turnover is not a limiting factor in determining whether or not to sell portfolio securities, a particular investment may be sold at any time, if investment judgment or account operations make a sale advisable. B-7 The separate account has no fixed policy on portfolio turnover. Because a higher portfolio turnover rate will increase brokerage costs to the separate account, however, Advisors will carefully weigh the added costs of short-term investment against the gains and reductions in index tracking error anticipated from such transactions. The portfolio turnover rate in 2001 and 2000 for the separate account were 9.86% and 20.68%, respectively. The decrease in portfolio turnover rates for the separate account were due in part to the fact that enhanced indexing techniques were generally not used in 2001. VALUATION OF ASSETS The assets of the separate account are valued as of the close of each valuation day. EQUITY SECURITIES Investments for which market quotations are readily available are valued at the market value of such investments, determined as follows: Equity securities listed or traded on the New York Stock Exchange or the American Stock Exchange are valued based on their last sale price on such exchange on the date of valuation, or at the mean of the closing bid and asked prices if no sale is reported. Equity securities that are listed or traded on any other exchange are valued in a comparable manner on the principal exchange where traded. Equity securities traded in the United States over-the-counter market are valued based on the last sale price on the date of valuation for NASDAQ National Market System securities, or at the mean of the closing bid and asked prices if no sale is reported. Other U.S. over-the-counter equity securities are valued at the mean of the closing bid and asked prices. Equity securities traded in the United States may be valued at fair value as determined in good faith under the direction of the Management Committee (see "Management," below) if events materially affecting the value of a domestic investment (as determined in our sole discretion) occur between the time when its price is determined and the time the separate account's net asset value is calculated. MONEY MARKET INSTRUMENTS Money market instruments for which market quotations are readily available are valued based on the most recent bid price or the equivalent quoted yield for such securities (or those of comparable maturity, quality, and type). Values for money market instruments will be obtained either from one or more of the major market makers or from one or more of the financial information services for the securities to be valued. OPTIONS Portfolio investments underlying options are valued as described above. Stock options written by the separate account are valued at the last quoted sale price, or at the closing bid price if no sale is reported for the day of valuation as determined on the principal exchange on which the option is traded. The value of the separate account net assets will be increased or decreased by the difference between the premiums received on writing options and the costs of liquidating such positions measured by the closing price of the options on the date of valuation. For example, when the separate account writes a call option, the amount of the premium is included in the separate account's assets and an equal amount is included in its liabilities. The liability thereafter is adjusted to the current market value of the call. Thus, if the current market value of the call exceeds the premium received, the excess would be unrealized depreciation; conversely, if the premium exceeds the current market value, such excess would be unrealized appreciation. If a call expires or if the separate account enters into a closing purchase transaction it realizes a gain (or a loss if the cost of the transaction exceeds the premium received when the call was written) without regard to any unrealized appreciation or depreciation in the underlying securities, and the liability related to such call is extinguished. If a call is exercised, the separate account realizes a gain or loss from the sale of the underlying securities and the proceeds of the sale increased by the premium originally received. A premium paid on the purchase of a put will be deducted from the separate account's assets and an equal amount will be included as an investment and subsequently adjusted to the current market value of the put. For example, if the current market value of the put exceeds the premium paid, the excess would be unrealized appreciation; conversely, if the premium exceeds the current market value, such excess would be unrealized depreciation. Stock and bond index futures, and options thereon, which are traded on commodities exchanges, are valued at their last sale prices as of the close of such commodities exchanges. INVESTMENTS FOR WHICH MARKET QUOTATIONS ARE NOT READILY AVAILABLE Portfolio securities or other assets for which market quotations are not readily available will be valued at fair value as determined in good faith under the direction of the Management Committee (see "Management," below). MANAGEMENT SEPARATE ACCOUNT MANAGEMENT COMMITTEE AND OFFICERS The following table includes certain information about the separate account's Management Committee members ("Managers") and officers including positions held with the separate account, length of office and time served and principal occupations in the last five years. The table also includes the number of portfolios in the fund complex overseen by each Manager and certain directorships held by each of them. The first table includes information about the separate account's disinterested Managers and the second table includes information about the separate account's interested Managers and officers. B-8 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- DISINTERESTED MANAGERS - ----------------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------------
Number of Position(s) Portfolios in Held with TIAA Term of Office and Principal Fund Complex Other Separate Length of Time Occupation(s) During Overseen Directorships Held Name, Address and Age Account VA-1 Served Past 5 Years by Manager by Manager - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Robert H. Atwell Manager Indefinite term. President Emeritus, 32 Director, Education 447 Bird Key Drive Manager since 2001. American Council on Management Corp. and Sarasota, FL 34236 Education, and Senior Collegis, Inc. Age: 70 Consultant to A.T. Kearney, Inc. - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Elizabeth E. Bailey Manager Indefinite term. John C. Hower Professor 32 Director, CSX The Wharton School Manager since 2001. of Public Policy and Corporation and University of Pennsylvania Management, The Wharton Philip Morris Suite 3100 School, University of Companies Inc. Steinberg-Dietrich Hall Pennsylvania Philadelphia, PA 19104-6372 Age: 63 - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Joyce A. Fecske Manager Indefinite term. Vice President Emerita, 32 None 11603 Briarwood Lane Manager since 2001. DePaul University. Burr Ridge, Formerly, Vice Illinois 60525-5173 President for Human Age: 54 Resources, DePaul University - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Edes P. Gilbert Manager Indefinite term. Acting President, 32 None Independent Educational Manager since 2001. Independent Educational Services Services. Formerly, 49 East 78th Street, Suite Consultant, Independent 4A Educational Services, New York, NY 10021 and Head, The Spence Age: 69 School - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Martin J. Gruber Manager Indefinite term. Nomura Professor of 32 Director, Deutsche New York University Manager since 2001. Finance, New York Asset Management Stern School of Business University, Stern B.T. Funds, Japan Henry Kaufman Management School of Business. Equity Fund, Inc., Education Center Formerly, Chairman, Singapore Equity 44 West 4th Street, Suite Department of Finance, Fund, Inc. and the 988 New York University, Thai Equity Fund, New York, NY 10012 Stern School of Inc. Age: 64 Business, and Trustee of TIAA - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Nancy L. Jacob Manager Indefinite term. President and Managing 32 None Windermere Investment Manager since 2001. Principal, Windermere Associates Investment Associates. 121 S.W. Morrison Street, Formerly, Chairman and Suite 925 Chief Executive Portland, OR 97204 Officer, CTC Age: 58 Consulting, Inc., and Executive Vice President, U.S. Trust of the Pacific Northwest - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Marjorie Fine Knowles Manager Indefinite term. Professor of Law, 32 None College of Law Manager since 2001. Georgia State Georgia State University University College of P.O. Box 4037 Law Atlanta, GA 30302-4037 Age: 62 - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Stephen A. Ross Manager Indefinite term. Franco Modigliani 32 Director, Freddie Sloan School of Management Manager since 2001. Professor of Finance Mac and Co-Chairman, Massachusetts Institute of and Economics, Sloan Roll & Ross Asset Technology School of Management, Management Corp. 77 Massachusetts Avenue Massachusetts Institute Cambridge, MA 02139 of Technology. Age: 57 Co-chairman, Roll & Ross Asset Management Corp. Formerly, Sterling Professor of Economics and Finance, Yale School of Management, Yale University - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- Nestor V. Santiago Manager Indefinite term. Vice President and 32 Director, Bank-Fund Howard Hughes Medical Manager since 2001. Chief Investment Credit Union and Institute Officer, Howard Hughes Emerging Markets 4000 Jones Bridge Road Medical Institute. Growth Fund, Inc. Chevy Chase, MD 20815 Formerly, Investment Age: 52 Advisor/Head of Investment Office, International Monetary Fund - ---------------------------- ---------------- -------------------- ------------------------- --------------- ----------------------
B-9 EUGENE C. SIT Manager Indefinite term. Chairman, Chief 32 Chairman and Sit Investment Manager since 2001. Executive Officer, and Director of Associates, Inc. Chief Investment registered 4600 Norwest Center Officer, Sit Investment investment companies 90 South Seventh Street Associates, Inc. and managed by Sit Minneapolis, MN 55402-4130 Sit/Kim International Investment Age: 63 Investment Associates, Associates, Inc. Inc. - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- MACEO K. SLOAN Manager Indefinite term. Chairman and Chief 32 Director, SCANA NCM Capital Management Manager since 2001. Executive Officer, Corporation and Group, Inc. Sloan Financial Group, Mechanics and 103 West Main Street, Inc. and NCM Capital Farmers Bancorp, Inc. Suite 400 Management Group, Inc. Durham, NC 27701-3638 Age: 52 - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- DAVID K. STORRS Manager Indefinite term. President and Chief 32 Director of thirteen Alternative Investment Manager since 2001. Executive Officer, money market funds Group, LLC Alternative Investment sponsored by 65 South Gate Lane Group, LLC Alliance Capital Southport, CT 06490 Management Age: 57 - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- ROBERT W. VISHNY Manager Indefinite term. Eric J. Gleacher 32 None University of Chicago Manager since 2001. Distinguished Service Graduate School of Professor of Finance, Business University of Chicago, 1101 East 58th Street Graduate School of Chicago, IL 60637 Business. Founding Age: 42 Partner, LSV Asset Management - ----------------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED MANAGERS AND OFFICERS - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Number of Position(s) Portfolios in Held with TIAA Term of Office and Principal Fund Complex Other Separate Length of Time Occupation(s) During Overseen Directorships Held Name, Address and Age Account VA-1 Served Past 5 Years by Manager by Manager - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- JOHN H. BIGGS(1) Chairman of Term as Manager is Chairman of the Management 32 Director, The Boeing TIAA-CREF Board, indefinite. Committee, President and Company and Ralston 730 Third Avenue President and Manager since Chief Executive Officer Purina Company New York, NY 10017-3206 Chief 2001. Chairman, of TIAA Separate Account Age: 65 Executive Chief Executive VA-1. Chairman, President Officer Officer and and Chief Executive Officer President since of TIAA, CREF, TIAA-CREF 2001. Indefinite Life Funds, TIAA-CREF term as officer. Mutual Funds and TIAA-CREF Institutional Mutual Funds. Trustee of TIAA-CREF Individual & Institutional Services, Inc. (Services). Member of Board of Managers of TIAA-CREF Investment Management LLC (Investment Management). Director of Teachers Personal Investors Services, Inc. (TPIS), Teachers Advisors, Inc. (Advisors) and TIAA-CREF Trust Company, FSB (TIAA-CREF Trust Company) - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- MARTIN L. LEIBOWITZ(1) Vice Chairman Term as Manager is Vice Chairman of the 32 None TIAA-CREF and Chief indefinite. Managemnet Committee and 730 Third Avenue Investment Manager since Chief Investment Officer of New York, NY 10017-3206 Officer 2001. Vice TIAA Separate Account VA-1 Age: 65 Chairman and Chief and Vice Chairman and Chief Investment Officer Investment Officer of CREF, since 2001. Chief TIAA-CREF Mutual Funds, Investment Officer TIAA-CREF Institutional since 1998. Mutual Funds and TIAA-CREF Indefinite term as Life Funds (these funds are officer. collectively referred to as the TIAA-CREF Funds). Vice Chairman and Chief Investment Officer of TIAA. Member of Board of Managers and President of Investment Management. Director and President of Advisors. Director of TIAA-CREF Life Insurance Company (TIAA-CREF Life) - ---------------------------- ---------------- -------------------- ------------------------- --------------- ----------------------
B-10 BEVIS LONGSTRETH (2) Manager Indefinite term. Of Counsel to Debevoise 32 Member of the Board Debevoise & Plimpton Manager since 2001. & Plimpton. Formerly of Directors of 919 Third Avenue Partner of Debevoise & AMVESCAP, PLC and New York, NY 10022-6225 Plimpton, Adjunct Chairman of the Age: 67 Professor at Columbia Finance Committee of University School of the Rockefeller Law and Commissioner of Family Fund the Securities and Exchange Commission - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- RICHARD J. ADAMSKI(1) Vice President Indefinite term. Vice President and N/A N/A TIAA-CREF and Treasurer Vice President and Treasurer of the 730 Third Avenue Treasurer since TIAA-CREF Funds and New York, NY 10017-3206 1994. TIAA. Vice President Age: 60 and Treasurer of Investment Management, Services, TPIS, Advisors, TIAA-CREF Life, and TIAA-CREF Tuition Financing, Inc. (Tuition Financing) - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- C. VICTORIA APTER(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and TIAA New York, NY 10017-3206 January 2001. Age: 59 - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- SCOTT C. EVANS(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 1994. TIAA. Executive Vice Age: 42 President of Investment Management and Advisors and Director of TIAA-CREF Life - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- MARTIN E. GALT, III(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Served since 2000. President of the 730 Third Avenue TIAA-CREF Funds and New York, NY 10017-3206 TIAA and President, Age: 59 TIAA-CREF Investment Products. Formerly, Executive Vice President and President, Institutional Investments, Bank of America, and Principal Investment Officer, NationsBank. Director and President of Tuition Financing and TPIS and Director of TIAA-CREF Life and TIAA-CREF Trust Company - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- RICHARD L. GIBBS(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 1994. TIAA. Executive Vice Age: 54 President of Investment Management, Advisors and Tuition Financing and Director of TIAA-CREF Life and Tuition Financing - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- DON W. HARRELL(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 1998. TIAA. Director of Age: 63 TIAA-CREF Life - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- IRA J. HOCH(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 2001. TIAA. Formerly, Vice Age: 51 President, Retirement Services, CREF and TIAA - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- MATINA S. HORNER(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 1998. TIAA. Director of Age: 62 TIAA-CREF Life - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- E. LAVERNE JONES(1) Vice President Indefinite term. Vice President and N/A N/A TIAA-CREF and Corporate Vice President and Corporate Secretary of 730 Third Avenue Secretary Corporate the TIAA-CREF Funds and New York, NY 10017-3206 Secretary since TIAA Age: 52 2001. - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- HARRY I. KLARISTENFELD(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President and Executive Vice President and Chief 730 Third Avenue Chief Actuary President and Actuary of the New York, NY 10017-3206 Chief Actuary TIAA-CREF Funds and Age: 51 since 2001. TIAA. Formerly, Vice President and Chief Actuary, Retirement Services, CREF and TIAA. Executive Vice President and Chief Actuary of Services - ---------------------------- ---------------- -------------------- ------------------------- --------------- ----------------------
B-11 FRANCES NOLAN(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 2001. TIAA. Formerly, Vice Age: 44 President, Retirement Services, CREF and TIAA - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- BERTRAM L. SCOTT(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 2001. TIAA and Chairman of Age: 50 the Board, President and Chief Executive Officer of TIAA-CREF Life. Formerly, President and Chief Executive Officer, Horizon Mercy - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- DEANNE J. SHALLCROSS(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 2001. TIAA. Formerly, Vice Age: 52 President, Marketing, CREF and TIAA. Executive Vice President of Services - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- DAVID A. SHUNK(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 2001. TIAA. Formerly, Vice Age: 55 President, Institutional & Individual Consulting Services, CREF and TIAA. President and Chief Executive Officer of Services and Director of TIAA-CREF Trust Company - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- JOHN A. SOMERS(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 1998. TIAA. Executive Vice Age: 57 President of Investment Management and Advisors and Director of TIAA-CREF Life - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- CHARLES H. STAMM(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President and General 730 Third Avenue President since Counsel of the New York, NY 10017-3206 1998. TIAA-CREF Funds and Age: 63 TIAA. Trustee of Services. Director of TPIS, Advisors, TIAA-CREF Trust Company, Tuition Financing and TIAA-CREF Life. Member of Board of Managers of Investment Management - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- MARY ANN WERNER(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 2001. TIAA and President, Age: 56 TIAA Shared Services. Formerly, Vice President, CREF and TIAA. Executive Vice President of Services and Director of TIAA-CREF Life - ---------------------------- ---------------- -------------------- ------------------------- --------------- ---------------------- JAMES A. WOLF(1) Executive Vice Indefinite term. Executive Vice N/A N/A TIAA-CREF President Executive Vice President of the 730 Third Avenue President since TIAA-CREF Funds and New York, NY 10017-3206 2001. TIAA and President, Age: 56 TIAA Retirement Services. Formerly, Vice President, Corporate MIS, CREF and TIAA. Trustee of Services and Director of TIAA-CREF Life - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- (1) The following individuals are "interested persons" under the Investment Company Act (the "Act") because they are officers of TIAA Separate Account VA-1: Mses. Apter, Horner, Jones, Nolan, Shallcross and Werner; and Messrs. Adamski, Biggs, Evans, Galt, Gibbs, Harrell, Hoch, Klaristenfeld, Leibowitz, Scott, Shunk, Somers, Stamm and Wolf. (2) Mr. Longstreth may be an "interested person" under the Act because he is associated with a law firm that has acted as counsel to TIAA Separate Account VA-1 or its affiliates.
B-12 EQUITY OWNERSHIP OF MANAGERS The following chart includes information relating to equity securities beneficially owned by TIAA Separate Account VA-1 Managers in the Separate Account and in all registered investment companies in the same "family of investment companies" as the Separate Account.(1) The Separate Account's family of investment companies includes TIAA Separate Account VA-1, CREF, TIAA-CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds and TIAA-CREF Life Funds. - -------------------------------------------------------------------------------------------------------------------- DISINTERESTED MANAGERS - -------------------------------------------------------------------------------------------------------------------- AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL REGISTERED INVESTMENT COMPANIES OVERSEEN DOLLAR RANGE OF EQUITY BY MANAGER IN FAMILY OF INVESTMENT NAME OF MANAGER SECURITIES IN SEPARATE ACCOUNT COMPANIES - -------------------------------------------------------------------------------------------------------------------- Robert H. Atwell None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Elizabeth E. Bailey None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Joyce A. Fecske None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Edes P. Gilbert None $50,001 -- $100,000 - -------------------------------------------------------------------------------------------------------------------- Martin J. Gruber None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Nancy L. Jacob None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Marjorie Fine Knowles None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Stephen A. Ross None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Nestor V. Santiago None $50,001 -- $100,000 - -------------------------------------------------------------------------------------------------------------------- Eugene C. Sit None $50,001 -- $100,000 - -------------------------------------------------------------------------------------------------------------------- Maceo K. Sloan None $50,001 -- $100,000 - -------------------------------------------------------------------------------------------------------------------- David K. Storrs None Over $100,000 - -------------------------------------------------------------------------------------------------------------------- Robert W. Vishny None $10,001 -- $50,000 - --------------------------------------------------------------------------------------------------------------------
INTERESTED MANAGERS - -------------------------------------------------------------------------------------------------------------------- AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL REGISTERED INVESTMENT COMPANIES OVERSEEN DOLLAR RANGE OF EQUITY BY MANAGER IN FAMILY OF INVESTMENT NAME OF MANAGER SECURITIES IN SEPARATE ACCOUNT COMPANIES - -------------------------------------------------------------------------------------------------------------------- John H. Biggs $50,001 -- $100,000 Over $100,000 Martin L. Leibowitz None Over $100,000 Bevis Longstreth None Over $100,000 - --------------------------------------------------------------------------------------------------------------------
(1) Beneficial ownership information is as of December 31, 2001. COMPENSATION OF MANAGERS The following table sets forth the compensation paid to the separate account's managers for the year ended December 31, 2001. All of these individuals are considered "disinterested" under the Investment Company Act. Note that, as of November 9, 2001, the individuals listed below no longer served as managers of TIAA Separate Account VA-1. The current managers were not compensated for their limited service in 2001.
(3) PENSION OR (2) RETIREMENT BENEFITS (1) AGGREGATE ACCRUED AS PART OF (4) (5) NAME OF PERSON, COMPENSATION FROM SEPARATE ACCOUNT ESTIMATED BENEFITS TOTAL COMPENSATION POSITION SEPARATE ACCOUNT EXPENSES UPON RETIREMENT FROM FUND COMPLEX* - --------------- ------------------ -------------------- ------------------- ------------------- Laurence W. Franz, Manager. ... $8,067 $-0- $-0- $10,500 Jeanmarie C. Grisi, Manager ... $8,067 $-0- $-0- $10,500 Richard M. Norman, Manager .... $8,067 $-0- $-0- $10,500
- ---------- * For purposes of this information, the Fund Complex consists of College Retirement Equities Fund, TIAA-CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds, TIAA Separate Account VA-1 and TIAA-CREF Life Funds. Managers who are active officers of TIAA do not receive any additional compensation for their services as managers. B-13 RESPONSIBILITIES OF THE MANAGEMENT COMMITTEE The Management Committee is responsible for overseeing the separate account's corporate policies and for adhering to fiduciary standards under the 1940 Act. Most significantly, the Management Committee is responsible for the initial approval and annual renewal of the separate account's investment management agreement with Teachers Advisors, Inc. ("Advisors"). In considering whether to initially approve the investment management agreement and renew the agreement annually thereafter, the Management Committee considered the investment management fee in light of a variety of factors, including (a) the capability of Advisors to provide the services required by the agreement; and (b) the reasonableness of the investment management fee and how this fee compared to fees paid by other similar variable annuities. As part of its consideration of the capability of Advisors to provide services to the separate account and its shareholders, the Management Committee reviewed the performance of the separate account. In considering the fee charged under the agreement, the Management Committee considered the gross investment management fee charged under the agreement and Advisors' current waiver of a portion of its fee for managing the separate account. In comparing the expense ratio of the separate account to other variable annuities, the Management Committee took into account that the expense ratio compared favorably to those of other variable annuities. BOARD COMMITTEES Every year the board appoints certain committees with specific responsibilities for aspects of the TIAA Separate Account VA-1's operations. Included among these are: (1) An Audit Committee, consisting solely of independent Managers who are not officers of TIAA Separate Account VA-1, which audits and examines the records and affairs of the Funds as it deems necessary, using independent auditors or others. The Audit Committee has adopted a formal written charter which is available upon request. During 2001, the Audit Committee held three meetings. The current members of the Audit Committee are Mr. Sloan (chair), Mr. Gruber, Mr. Santiago, and Mr. Storrs. (2) A Finance Committee, which oversees the management of TIAA Separate Account VA-1's investments subject to appropriate oversight by the full board. During 2001, the Finance Committee held no meetings. The current members of the Finance Committee are Mr. Biggs (chair), Mr. Gruber, Dr. Jacob, Ms. Knowles, Mr. Leibowitz, Mr. Longstreth, Dr. Ross, Mr. Santiago, Mr. Sit, Mr. Sloan, Mr. Storrs, and Dr. Vishny. (3) A Corporate Governance and Social Responsibility Committee, consisting solely of independent Managers who are not officers of TIAA Separate Account VA-1, which addresses all corporate social responsibility and corporate governance issues including the voting of TIAA Separate Account VA-1's shares and the initiation of appropriate shareholder resolutions. During 2001, the committee held no meetings. The current members of the Corporate Governance and Social Responsibility Committee are Mr. Atwell (chair), Ms. Fecske, Ms. Gilbert, Ms. Knowles, Mr. Longstreth, and Mr. Storrs. (4) An Executive Committee, which generally is vested with full board powers between board meetings on matters not specifically addressed by the full board. During 2001, the committee held no meetings. The current members of the Executive Committee are Mr. Biggs (chair), Mr. Atwell, Dr. Bailey, Ms. Fecske, Ms. Gilbert, Mr. Leibowitz, Mr. Longstreth, and Dr. Ross. (5) A Nominating and Personnel Committee, consisting solely of independent Managers who are not officers of TIAA Separate Account VA-1, which nominates certain TIAA Separate Account VA-1 officers and the standing committees of the board, and recommends candidates for election as Managers. During 2001, the committee held no meetings. The current members of the Nominating and Personnel Committee are Dr. Bailey (chair), Mr. Atwell, Dr. Jacob, Mr. Sit, and Dr. Vishny. The Nominating and Personnel Committee will consider potential nominees for Managers recommended by investors. Investors can recommend nominees by writing to the Secretary of the TIAA Separate Account VA-1. The Secretary's address is 730 Third Avenue, New York, New York 10017-3206. INVESTMENT ADVISORY AND RELATED SERVICES INVESTMENT ADVISORY SERVICES Investment advisory services and related services for the separate account are provided by personnel of Teachers Advisors, Inc. ("Advisors"). Advisors is registered as an investment adviser under the Investment Advisers Act of 1940. Advisors manages the investment and reinvestment of the assets of the separate account, subject to the direction and control of the Management Committee of the separate account. The advisory personnel of Advisors perform all research, make recommendations, and place orders for the purchase and sale of securities. Advisors also provides for all portfolio accounting, custodial, and related services for the assets of the separate account. As described in the Prospectus, the investment management agreement between Advisors and the separate account provides for payment by the separate account of an investment advisory fee of 0.30% of assets annually. Currently, with Advisors waiving a portion of that fee, a daily deduction from the net assets of the separate account is made at an annual rate of 0.07% for expenses related to the management of the assets of the separate account. For the years ended December 31, 2001, 2000, and 1999, the separate account paid investment advisory fees of $607,889, $739,618, and $610,363, respectively. These fees reflect the waiver by Advisors of a portion of its investment advisory fee B-14 for the years ended December 31, 2001, 2000, and 1999 of $1,997,033, $2,429,788, and $2,005,161, respectively. PERSONAL TRADING POLICY The Separate Account has adopted a Personal Trading Policy (the "Policy") under Rule 17j-1 of the Investment Company Act of 1940. Under the Policy, personnel of Advisors and members of their households are limited in trading for their own accounts. The Policy generally requires these individuals to preclear and report all their securities transactions including transactions in securities that are held or purchased by the Separate Account. The Policy can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090. The Policy is also available on the EDGAR Database on the SEC's Internet site at http://www.sec.gov. Copies of the Policy may be obtained, after paying a duplication fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. ADMINISTRATIVE SERVICES TIAA provides the administrative services for the separate account and the contracts. The current daily deduction for such services equates to 0.20% of net assets annually. For the years ended December 31, 2001, 2000, and 1999, administrative expenses incurred were $1,736,509, $2,112,809, and $1,743,577, respectively. ADVISORS AND TIAA Advisors is a wholly-owned indirect subsidiary of TIAA. The main offices of both TIAA and Advisors are at 730 Third Avenue, New York, New York 10017- 3206. TIAA is a stock life insurance company, organized under the laws of New York State. It was founded on March 4, 1918, by the Carnegie Foundation for the Advancement of Teaching. TIAA is the companion organization of the College Retirement Equities Fund ("CREF"), the first company in the United States to issue a variable annuity. Together, TIAA and CREF form the principal retirement system for the nation's education and research communities and the largest retirement system in the world, based on assets under management. TIAA-CREF serves approximately 2.4 million people. As of December 31, 2001, TIAA's assets were approximately $127.0 billion; the combined assets for TIAA and CREF totaled approximately $266.7 billion. TIAA holds all of the shares of TIAA-CREF Enterprises, Inc., which in turn holds all the shares of Advisors, and Teachers Personal Investors Services, Inc., the principal underwriter for the interests in the variable annuity contracts funded through the separate account. TIAA also holds all the shares of TIAA-CREF Investment Management, LLC ("Investment Management"). Investment Management provides investment advisory services to CREF, TIAA's companion organization. All of the foregoing are affiliates of the separate account and Advisors. CUSTODY OF PORTFOLIO The custodian for the assets of the separate account is Bankers Trust Company, 130 Liberty Street, New York, New York 10006. AUDITORS Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019, serves as the separate account's independent auditors and, in that regard, provides general auditing services for the separate account. BROKERAGE ALLOCATION Advisors is responsible for decisions to buy and sell securities for the separate account as well as for selecting brokers and, where applicable, negotiating the amount of the commission rate paid. It is the intention of Advisors to place brokerage orders with the objective of obtaining the best price, execution, and available data. When purchasing or selling securities traded on the over-the-counter market, Advisors generally will execute the transaction with a broker engaged in making a market for such securities. When Advisors deems the purchase or sale of a security to be in the best interests of the separate account, its personnel may, consistent with their fiduciary obligations, decide either to buy or to sell a particular security for the separate account at the same time as for (i) a CREF account or any other account that they may also be managing on behalf of TIAA-CREF Investment Management, LLC ("Investment Management"), another investment adviser also affiliated with TIAA, or (ii) TIAA-CREF Life Funds, TIAA-CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds or any other investment account whose assets Advisors may be managing. In that event, allocation of the securities purchased or sold, as well as the expenses incurred in the transaction, will be made in an equitable manner. Domestic brokerage commissions are negotiated, as there are no standard rates. All brokerage firms provide the service of execution of the order made; some brokerage firms also provide research and statistical data, and research reports on particular companies and industries are customarily provided by brokerage firms to large investors. In negotiating commissions, consideration is given by Advisors to the quality of execution provided and to the use and value of the data. The valuation of such data may be judged with reference to a particular order or, alternatively, may be judged in terms of its value to the overall management of the separate account. The aggregate amount of brokerage commissions paid by the separate account during 2001, 2000, and 1999 was $53,064, $121,152, and $307,938, respectively. Advisors may place orders with brokers providing research and statistical data services even if lower commissions may be available from brokers not providing such services. When B-15 doing so, Advisors will determine in good faith that the commissions negotiated are reasonable in relation to the value of the brokerage and research provided by the broker viewed in terms of either that particular transaction or of the overall responsibilities of Advisors to the separate account or other clients. In reaching this determination, Advisors will not necessarily place a specific dollar value on the brokerage or research services provided nor determine what portion of the broker's compensation should be related to those services. The following table shows the aggregate amount of brokerage commissions paid to firms that provided research services in 2001. Note that the provision of research services was not necessarily a factor in the placement of all this business with these firms. AGGREGATE $ AMOUNT OF COMMISSIONS PAID TO FIRMS THAT PROVIDED FUND RESEARCH SERVICES - ------------------------------------------------------ Stock Index Account $2,792 Research or services obtained for the separate account may be used by Advisors in managing other investment company accounts. The research or services obtained may also be used by Investment Management in managing CREF. Under each such circumstance, the expenses incurred will be allocated in an equitable manner consistent with Advisors' fiduciary duty to the separate account. During 2001, the separate account acquired securities of certain of its regular brokers or dealers or their parents, where the parent derives more than 15% of its total income from securities related activities. These entities and the value of the securities of these entities held by the separate account as of December 31, 2001, are set forth below: A. REGULAR BROKER OR DEALER BASED ON BROKERAGE COMMISSION PAID Salomon Smith Barney, Inc. (Parent-Citigroup, Inc.) ................................... $18,852,968 Jefferies Group .............................................. $ 73,154 B. REGULAR BROKER OR DEALER BASED ON ENTITIES ACTING AS PRINCIPAL Salomon Smith Barney, Inc. (Parent-Citigroup, Inc.) .................................... $18,852,968 BA Securities, Inc. (Parent-Bank of America Corp.) .............................. $ 7,188,827 JP Morgan Chase & Co. ........................................ $ 5,242,288 Morgan Dean & Co. (Parent-Morgan Stanley Dean Witter & Co.) ................... $ 4,453,104 Lehman Commercial Paper (Parent-Lehman Brothers Holdings, Inc.) ..................... $ 1,150,897 First Tennessee Capital Markets (Parent-First Tennessee National Corp.) ..................... $ 334,135 PERFORMANCE INFORMATION TOTAL RETURN INFORMATION FOR THE SEPARATE ACCOUNT Total return quotations for the separate account may be advertised. Total return quotations will reflect all aspects of the separate account's return. Average annual total returns are determined by finding the average annual compounded rate of return over a period that reflects the growth (or decline) in value of a hypothetical $1,000 investment made at the beginning of the period through the end of that period, according to the following formula: P (1 + T)n = EV where: P = the hypothetical initial payment of $1,000 T = average annual total return n = number of years in the period EV = ending value of the hypothetical investment at the end of the 1-, 5- or 10- year period. To derive the total return quotations from this formula, the percentage net change in the value of the $1,000 investment from the beginning of the period to the end of such period ("cumulative total return") is determined. Cumulative total returns simply reflect the change in value of an investment over a stated period. Since the accumulation unit value is a "total return" unit value that reflects the investment experience of the separate account and all expense deductions made against the assets of the separate account, the ending value, or EV, of the $1,000 hypothetical investment is determined by applying the percentage change in the accumulation unit value over the period to the hypothetical initial payment of $1,000 less the current deductions from premiums (0%). We then solve the equation for T to derive the average annual compounded rate of return for the separate account over the span of the period, and the resulting "total return" quotation is carried out to the nearest hundredth of 1%. Set forth below is the total return information for the separate account, which reflects all deductions made from the assets in the account, applied to a hypothetical investment of $1,000: AVERAGE ANNUAL CUMULATIVE COMPOUND RATE RATE OF TOTAL OF TOTAL PERIOD RETURN RETURN ------------------------------------------------------------------------- 1 year (from January 1, 2001 to December 31, 2001) (11.72)% (11.72)% 5 years (from January 1, 1997 to December 31, 2001) 9.74% 59.14% 7 years and 2 months (from November 1, 1994 date of SEC registration to December 31, 2001) 14.11% 157.65% B-16 PERFORMANCE COMPARISONS Performance information for the separate account may be compared, in advertisements, sales literature, and reports to contract owners and annuitants, to the performance information reported by other investments and to various indices and averages. Such comparisons may be made with, but are not limited to (1) the S&P 500, (2) the Dow Jones Industrial Average ("DJIA"), (3) Lipper Analytical Services, Inc. Mutual Fund Performance Analysis Reports and the Lipper General Equity Funds Average, (4) Money Magazine Fund Watch, (5) Business Week's Mutual Fund Scoreboard, (6) SEI Funds Evaluation Services Equity Fund Report, (7) CDA Mutual Funds Performance Review and CDA Growth Mutual Fund Performance Index, (8) Value Line Composite Average (geometric), (9) Wilshire 5000 Equity Index, (10) Russell 1000, 2000, and 3000 indices, (11) the Consumer Price Index, published by the U.S. Bureau of Labor Statistics (measurement of inflation), (12) VARDS, and (13) Morningstar, Inc. We may also discuss ratings or rankings received from these entities, accompanied in some cases by an explanation of those ratings or rankings, when applicable. In addition, advertisements may discuss the performance of the indices listed above. The performance of the separate account also may be compared to other indices or averages that measure performance of a pertinent group of securities. Contractowners should keep in mind that the composition of the investments in the reported averages will not be identical to that of the separate account and that certain formula calculations (e.g., yield) may differ from index to index. In addition, there can be no assurance that the separate account will continue its performance as compared to such indices. The separate account is not promoted, sponsored, endorsed, or sold by, nor affiliated with, Frank Russell Company. Frank Russell Company is not responsible for and has not reviewed the separate account literature or publications and makes no representation or warranty, express or implied, as to their accuracy, completeness, or otherwise. Frank Russell Company reserves the right, at any time and without notice, to change or terminate the Russell 3000 Index. Frank Russell Company has no obligation to take the needs of the separate account or its contractowners into consideration in determining the Index. Frank Russell Company's publication of the Russell 3000 Index in no way suggests or implies an opinion by Frank Russell Company as to the attractiveness or appropriateness of investment in any or all of the securities upon which the Index is based. Frank Russell Company makes no representation, warranty, or guarantee as to the accuracy, completeness or reliability of the Index or any data included in the Index. Frank Russell Company makes no representation or warranty regarding the use, or the results of use, of the Index or any securities comprising the Index. FRANK RUSSELL COMPANY MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND OR NATURE, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEX OR ANY DATA OR SECURITIES INCLUDED THEREIN. ILLUSTRATING COMPOUNDING, TAX DEFERRAL, AND EXPENSE DEDUCTIONS TIAA may illustrate in advertisements, sales literature, and reports to contractowners or annuitants the effects of tax deferral and/or compounding of earnings on an investment in the separate account. We may do this using a hypothetical investment earning a specified rate of return. To illustrate the effects of compounding, we would show how the total return from an investment of the same dollar amount, earning the same or different interest rate, varies depending on when the investment was made. To illustrate the effects of tax deferral, we will show how the total return from an investment of the same dollar amount, earning the same or different interest rates, for individuals in the same tax bracket, would vary between tax-deferred and taxable investments. TIAA may also illustrate in advertisements, sales literature, and reports to contractowners or annuitants the effect of an investment fund's expenses on total return over time. We may do this using a hypothetical investment earning a specified rate of return. We would show how the total return, net of expenses, from an investment of the same dollar amount in funds with the same investment results but different expense deductions varies increasingly over time. In the alternative, we would show the difference in the dollar amount of total expense charges paid over time by an investor in two or more different funds that have the same annual total return but different asset-based expense charges. We may also compare the separate account's expense charges to those of other variable annuities and other investment products. PERIODIC REPORTS Prior to the time an entire accumulation has been withdrawn in cash or transferred to the fixed account a contractowner will be sent a statement each quarter which sets forth the following: (1) Premiums paid during the quarter; (2) the number and dollar value of accumulation units in the separate account credited to the contractowner during the quarter and in total; (3) cash withdrawals from the separate account during the quarter; and (4) any transfers between the separate account and the fixed account during the quarter. The separate account also will transmit to contractowners, at least semi-annually, reports showing the financial condition of the separate account and a schedule of investments held in the separate account in which they have accumulations. B-17 GENERAL MATTERS ASSIGNMENT OF CONTRACTS You can assign the contract at any time. PAYMENT TO AN ESTATE, GUARDIAN, TRUSTEE, ETC. We reserve the right to pay in one sum the commuted value of any benefits due an estate, corporation, partnership, trustee or other entity not a natural person. Neither TIAA nor the separate account will be responsible for the conduct of any executor, trustee, guardian, or other third party to whom payment is made. BENEFITS BASED ON INCORRECT INFORMATION If the amounts of benefits provided under a contract were based on information that is incorrect, benefits will be recalculated on the basis of the correct data. If any overpayments or underpayments have been made by the separate account, appropriate adjustments will be made. PROOF OF SURVIVAL We reserve the right to require satisfactory proof that anyone named to receive benefits under a contract is living on the date payment is due. If this proof is not received after a request in writing, the separate account will have the right to make reduced payments or to withhold payments entirely until such proof is received. STATE REGULATION TIAA and the separate account are subject to regulation by the New York State Superintendent of Insurance ("Superintendent") as well as by the insurance regulatory authorities of certain other states and jurisdictions. TIAA and the separate account must file with the Superintendent both quarterly and annual statements on forms promulgated by the New York State Insurance Department. The separate account books and assets are subject to review and examination by the Superintendent and the Superintendent's agents at all times, and a full examination into the affairs of the separate account is made at least every five years. In addition, a full examination of the separate account's operations is usually conducted periodically by some other states. LEGAL MATTERS All matters of applicable state law pertaining to the contracts, including TIAA's right to issue the contracts, have been passed upon by Charles H. Stamm, Executive Vice President and General Counsel of TIAA. Sutherland, Asbill & Brennan LLP, Washington, D.C. has provided advice on certain matters relating to the federal securities laws. EXPERTS The financial statements of TIAA and the separate account included in this Statement of Additional Information have been audited by Ernst & Young LLP, independent auditors, as stated in their reports appearing herein (which report on the financial statements of TIAA expresses an opinion that such financial statements are presented in conformity with statutory accounting practices, a comprehensive basis of accounting as described in Note 2, and not in conformity with generally accepted accounting principles), and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. ADDITIONAL CONSIDERATIONS Over the past several years, TIAA and CREF have added many new investment vehicles to their line of products. The growing family of TIAA and CREF products is designed to provide additional investment options for those who want to diversify their holdings. Most experts recommend diversification as a good strategy for retirement and other long-term investing, both because a diversified portfolio offers a degree of safety from the volatility of specific markets, and because it allows the investor to benefit from the potential for growth in several different types of investments. We may discuss and compare our array of products and services. At such times we disclose which of our subsidiaries or affiliates issues which products or types of products, as follows: TIAA-CREF Individual and Institutional Services, Inc. distributes CREF certificates and interests in the TIAA Real Estate Account. Teachers Personal Investors Services, Inc. distributes the variable component of personal annuities, mutual funds and tuition savings agreements. TIAA and TIAA-CREF Life Insurance Company issue insurance and annuities. TIAA-CREF Trust Company, FSB provides trust services. We also disclose that the investment products are not FDIC insured, may lose value, and are not bank guaranteed. The separate account's Stock Index Account is ideal for people who are seeking growth and are able to make long-term investments. Although past performance is no guarantee of future results, in the past stocks have outperformed many other types of investments. Investors who seek to counter the effects of inflation on their long- term investments should therefore consider investing in stocks. The Stock Index Account could be an appropriate investment for someone who is seeking to supplement his or her retirement income, to purchase a retirement home, finance an extended trip, or build a fund for philanthropic purposes. Of course, there is no guarantee that the investment objective of that or any other fund will be met. Before investing, you should consider whether your pension plan and social security payments will meet your retirement needs. You should look at your assets and liabilities to help determine whether you need to invest more money to help B-18 provide retirement income. You should consider how much time you have until retirement and the effect of inflation and taxes on your savings and investments. You should also keep in mind that experts say that people need 70% to 80% of their pre-retirement income to maintain the same standard of living after retirement. Before contributing to a contract, you should consider whether you have already reached your contribution limit on your TIAA-CREF basic Retirement Annuities, Supplemental Retirement Annuities, and other 403(b) savings plans. Consult your tax adviser to learn more about these limits. You should also consider what types of investments are best suited for you and your current needs. In particular, you should consider the tax treatment of a variable annuity as compared with a standard mutual fund product. With annuities, earnings generally grow tax-deferred and investors are provided the option of lifetime income upon retirement. However, annuities may have restrictions on withdrawals before age 59 1/2, and thus may not be suitable for goals other than retirement. We may compare annuities to mutual funds in sales literature and advertisements. You should also consider the risks of any investment relative to its potential rewards. In particular, you should be aware of the risk that arises from market timing. Market timing is an investment technique whereby amounts are transferred from one category of investment to another (for example, from stocks to bonds) based upon a perception of how each of those categories of investments will perform relative to the others at a particular time. Investors who engage in market timing run the risk that they may transfer out of a type of investment with a rising market value or transfer into a type of investment with a falling market value. We do not endorse the practice of market timing. The variety of issues to consider highlights the importance of the support and services that TIAA provides. These services include: (1) retirement and life insurance planning expertise from professional counselors rather than commissioned salespeople; (2) detailed information through quarterly transaction reports, newsletters and other publications about retirement planning; and (3) seminars, individual counseling, a Participant Information Center, and 24-hour toll-free numbers for transactions and inquiries. If you request it, we will send you periodic reminders to remit premiums to the contract. Customer service may be an important consideration for you. In our advertisements we may report the results of surveys conducted by independent agencies regarding customer service. We may also use certain testimonials and quote financial experts, financial and other publications, or other services regarding our products and services. We may also discuss in advertisements and sales literature general economic and/or market conditions that may impact investments in variable annuities. ADDITIONAL INFORMATION A Registration Statement has been filed with the Securities and Exchange Commission, under the 1933 Act, with respect to the contracts discussed in the Prospectus and in this Statement of Additional Information. Not all of the information set forth in the Registration Statement, amendments, and exhibits thereto has been included in the Prospectus or this Statement of Additional Information. Statements contained herein concerning the contents of the contracts and other legal instruments are intended to be summaries. For a complete statement of the terms of these documents, reference should be made to the instruments filed with the Commission. FINANCIAL STATEMENTS The audited financial statements of the separate account and TIAA follow. The financial statements of TIAA should be distinguished from the financial statements of the separate account and should be considered only as bearing upon the ability of TIAA to meet its obligations under the contracts. They should not be considered as bearing on the investment performance of the assets held in the separate account. B-19 INDEX TO AUDITED FINANCIAL STATEMENTS DECEMBER 31, 2001 Page ---- TIAA SEPARATE ACCOUNT VA-1-STOCK INDEX ACCOUNT: Report of Management Responsibility ............................... B-21 Report of the Audit Committee ..................................... B-22 AUDITED FINANCIAL STATEMENTS: Statement of Assets and Liabilities ............................... B-23 Statement of Operations ........................................... B-24 Statements of Changes in Net Assets ............................... B-25 Notes to Financial Statements ..................................... B-26 Report of Independent Auditors .................................... B-28 Statement of Investments .......................................... B-29 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA: Chairman's Letter ................................................. B-52 Report of Management Responsibility ............................... B-53 Report of the Audit Committee ..................................... B-54 Report of Independent Auditors .................................... B-55 STATUTORY-BASIS FINANCIAL STATEMENTS: Balance Sheets .................................................... B-56 Statements of Operations .......................................... B-57 Statements of Changes in Capital and Contingency Reserves ......... B-58 Statements of Cash Flows .......................................... B-59 Notes to Statutory-Basis Financial Statements ..................... B-60 B-20 [LOGO] TIAA CREF - -------------------------------------------------------------------------------- REPORT OF MANAGEMENT RESPONSIBILITY TO THE CONTRACTOWNERS OF TIAA SEPARATE ACCOUNT VA-1: The accompanying financial statements of the Stock Index Account of TIAA Separate Account VA-1 ("VA-1") are the responsibility of management. They have been prepared in accordance with accounting principles generally accepted in the United States, and have been presented fairly and objectively in accordance with such principles. Teachers Insurance and Annuity Association of America ("TIAA") has established and maintains a strong system of internal controls designed to provide reasonable assurance that assets are properly safeguarded and transactions are properly executed in accordance with management's authorization, and to carry out the ongoing responsibilities of management for reliable financial statements. In addition, TIAA's internal audit personnel provide a continuing review of the internal controls and operations of VA-1, and the internal Auditor regularly reports to the Audit Committee of the Management Committee. The accompanying financial statements have been audited by the independent auditing firm of Ernst & Young LLP. To maintain auditor independence and avoid even the appearance of conflict of interest, it continues to be VA-1's policy that any non-audit services be obtained from a firm other than the external financial audit firm. For the periods covered by these financial statements, VA-1 did not engage Ernst & Young LLP for any management advisory or consulting services. The independent auditors' report, which follows the notes to financial statements, expresses an independent opinion on the fairness of presentation of these financial statements. The Audit Committee of VA-1's Management Committee, consisting entirely of members who are not officers of VA-1, meets regularly with management, representatives of Ernst & Young LLP and internal audit personnel to review matters relating to financial reporting, internal controls, and auditing. In addition to the annual audit of the financial statements of VA-1 by the independent auditing firm, the New York State Insurance Department, other state insurance departments and the Securities and Exchange Commission perform periodic examinations of VA-1's operations. /S/ MARTIN E. GALT, III ------------------------------------- Executive Vice President /S/ RICHARD L. GIBBS ------------------------------------- Executive Vice President and Principal Accounting Officer B-21 [LOGO] TIAA CREF - -------------------------------------------------------------------------------- REPORT OF THE AUDIT COMMITTEE To the Contractowners of TIAA Separate Account VA-1: The Audit Committee oversees the financial reporting process of the Stock Index Account of TIAA Separate Account VA-1 ("VA-1") on behalf of VA-1's Management Committee. The Audit Committee is a standing committee of the Management Committee and operates in accordance with a formal written charter (copies are available upon request) which describes the Audit Committee's responsibilities. All members of the Audit Committee ("Committee") are independent, as defined under the listing standards of the New York Stock Exchange. Management has the primary responsibility for VA-1's financial statements, development and maintenance of a strong system of internal controls, and compliance with applicable laws and regulations. In fulfilling its oversight responsibilities, the Committee reviewed and approved the audit plans of the internal auditing group and the independent auditing firm in connection with their respective audits. The Committee also meets regularly with the internal and independent auditors, both with and without management present, to discuss the results of their examinations, their evaluation of internal controls, and the overall quality of financial reporting. As required by its charter, the Committee will evaluate rotation of the external financial audit firm whenever circumstances warrant, but in no event will the formal evaluation be later than between their fifth and tenth years of service. The Committee reviewed and discussed the accompanying audited financial statements with management, including a discussion of the quality and appropriateness of the accounting principles and financial reporting practices followed, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Committee has also discussed the audited financial statements with Ernst & Young LLP, the independent auditing firm responsible for expressing an opinion on the conformity of these audited financial statements with generally accepted accounting principles. The discussion with Ernst & Young LLP focused on their judgments concerning the quality and appropriateness of the accounting principles and financial reporting practices followed by VA-1, the clarity of the financial statements and related disclosures, and other significant matters, such as any significant changes in accounting policies, management judgments and estimates, and the nature of any uncertainties or unusual transactions. In addition, the Committee discussed with Ernst & Young LLP the auditors' independence from management and VA-1, and has received a written disclosure regarding such independence, as required by the Independence Standards Board. Based on the review and discussions referred to above, the Committee has approved the release of the accompanying audited financial statements for publication and filing with appropriate regulatory authorities. Maceo K. Sloan, Audit Committee Chair Martin J. Gruber, Audit Committee Member Nestor V. Santiago, Audit Committee Member David K. Storrs, Audit Committee Member February 12, 2002 B-22 TIAA SEPARATE ACCOUNT VA-1 STOCK INDEX ACCOUNT STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2001 (amounts in thousands, except amount per accumulation unit) ASSETS Investments, at cost .....................................,..... $721,671 Net unrealized appreciation of investments ..................... 111,021 -------- Investments, at value .......................................... 832,692 Cash ........................................................... 187 Receivable from securities transactions ........................ 33 Dividends and interest receivable .............................. 891 -------- TOTAL ASSETS 833,803 -------- LIABILITIES Payable for securities transactions ............................ 531 Amounts due to TIAA General Account ............................ 173 -------- TOTAL LIABILITIES 704 -------- NET ASSETS--Accumulation Fund .................................... $833,099 ======== ACCUMULATION UNITS OUTSTANDING--Notes 4 and 5 .................... 12,517 ======== NET ASSET VALUE PER ACCUMULATION UNIT--Note 4 .................... $66.56 ======== See notes to financial statements. B-23 TIAA SEPARATE ACCOUNT VA-1 STOCK INDEX ACCOUNT STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2001 (amounts in thousands) INVESTMENT INCOME Income: Interest ................................................. $ 58 Dividends ................................................ 11,562 ---------- TOTAL INCOME 11,620 ---------- Expenses--Note 2: Investment advisory charges .............................. 2,605 Administrative expenses .................................. 1,737 Mortality and expense risk charges ....................... 868 ---------- EXPENSES BEFORE WAIVER 5,210 Investment advisory charges waived ....................... (1,997) ---------- NET EXPENSES 3,213 ---------- INVESTMENT INCOME--NET 8,407 ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3 Net realized gain on investments ......................... 3,651 Net change in unrealized appreciation on investments ..... (128,617) ---------- NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS ..... (124,966) ---------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... $ (116,559) ========== See notes to financial statements. B-24 TIAA SEPARATE ACCOUNT VA-1 STOCK INDEX ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS (amounts in thousands)
YEARS ENDED DECEMBER 31, ----------------------- 2001 2000 ---------- ---------- FROM OPERATIONS Investment income--net ................................ $ 8,407 $ 8,641 Net realized gain on investments ...................... 3,651 36,794 Net change in unrealized appreciation on investments .. (128,617) (127,492) ---------- ---------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (116,559) (82,057) ---------- ---------- FROM CONTRACTOWNER TRANSACTIONS Premiums .............................................. 52,327 90,169 Net contractowner transfers (to) from fixed account ... (60,700) 3,408 Withdrawals and death benefits ........................ (33,157) (52,886) ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACTOWNER TRANSACTIONS (41,530) 40,691 ---------- ---------- NET DECREASE IN NET ASSETS (158,089) (41,366) NET ASSETS Beginning of year ..................................... 991,188 1,032,554 ---------- ---------- End of year ........................................... $ 833,099 $ 991,188 ========== ==========
See notes to financial statements. B-25 TIAA SEPARATE ACCOUNT VA-1 STOCK INDEX ACCOUNT NOTES TO FINANCIAL STATEMENTS NOTE 1--SIGNIFICANT ACCOUNTING POLICIES TIAA Separate Account VA-1 ("VA-1") is a segregated investment account of Teachers Insurance and Annuity Association of America ("TIAA") and was organized on February 16, 1994 under the insurance laws of the State of New York for the purpose of issuing and funding variable annuity contracts. VA-1 is registered with the Securities and Exchange Commission as an open-end, diversified management investment company under the Investment Company Act of 1940. VA-1 consists of a single investment portfolio, the Stock Index Account ("Account"), which invests in a diversified portfolio of equity securities selected to track the overall United States stock market. The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States which may require the use of estimates made by management. Actual results may differ from those estimates. The following is a summary of the significant accounting policies consistently followed by the Account. VALUATION OF INVESTMENTS: Securities listed or traded on any United States national securities exchange are valued at the last sale price as of the close of the principal securities exchange on which such securities are traded or, if there is no sale, at the mean of the last bid and asked prices on such exchange. Securities traded only in the over-the-counter market and quoted in the NASDAQ National Market System are valued at the last sale price, or at the mean of the last bid and asked prices if no sale is reported. All other over-the-counter securities are valued at the mean of the last bid and asked prices. Short-term money market instruments are stated at market value. Portfolio securities for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of and in accordance with the responsibilities of the Management Committee. ACCOUNTING FOR INVESTMENTS: Securities transactions are accounted for as of the trade date. Interest income is recorded as earned and includes amortization of discounts and premiums. Dividend income is recorded on the ex-dividend date. Realized gains and losses on securities transactions are accounted for on the average cost basis. FEDERAL INCOME TAXES: Based on provisions of the Internal Revenue Code, no federal taxes are attributable to the net investment experience of the Account. NOTE 2--MANAGEMENT AGREEMENTS Teachers Advisors, Inc. ("Advisors"), a wholly-owned subsidiary of TIAA and a registered investment adviser, provides investment advisory services for VA-1 pursuant to an Investment Management Agreement between TIAA, Advisors and VA-1. TIAA provides all administrative services for VA-1 pursuant to an Administrative Services Agreement with VA-1. The contracts are distributed primarily by Teachers Personal Investors Services, Inc. ("TPIS"), also a wholly-owned subsidiary of TIAA, which is a registered broker-dealer and a member of the National Association of Securities Dealers, Inc. The Investment Management Agreement sets the investment advisory charge at an annual rate of 0.30% of the net assets of the Account. Advisors has agreed to waive a portion of such fee, so that the daily deduction is equivalent to an annual charge of 0.07% of the net assets of the Account. The Administrative Services Agreement sets the administrative expense charge at an annual rate of 0.20% of the net assets of the Account. TIAA also imposes a daily charge for bearing certain mortality and expense risks in connection with the contracts equivalent to an annual rate of 0.10% of the net assets of the Account. NOTE 3--INVESTMENTS At December 31, 2001, the net unrealized appreciation on investments was $111,020,895, consisting of gross unrealized appreciation of $213,771,054 and gross unrealized depreciation of $102,750,159. Purchases and sales of securities, other than short-term money market instruments, for the year ended December 31, 2001, were $85,657,709 and $119,274,064, respectively. B-26 TIAA SEPARATE ACCOUNT VA-1 STOCK INDEX ACCOUNT NOTES TO FINANCIAL STATEMENTS--(CONTINUED) NOTE 4--CONDENSED FINANCIAL INFORMATION Selected condensed financial information for an Accumulation Unit of the Account is presented below.
FOR THE YEARS ENDED DECEMBER 31, ------------------------------------------------ 2001 2000 1999 1998 1997 -------- ------- ------- ------- ------- Per Accumulation Unit Data: Investment income ..................... $ .916 $ .966 $ .961 $ .908 $ .847 Expenses .............................. .253 .301 .270 .223 .182 -------- ------- ------- ------- ------- Investment income--net ................ .663 .665 .691 .685 .665 Net realized and unrealized gain (loss) on investments ...................... (9.499) (7.024) 13.051 12.407 12.429 -------- ------- ------- ------- ------- Net increase (decrease) in Accumulation Unit Value ............. (8.836) (6.359) 13.742 13.092 13.094 Accumulation Unit Value: Beginning of year ................... 75.392 81.751 68.009 54.917 41.823 -------- ------- ------- ------- ------- End of year ......................... $ 66.556 $75.392 $81.751 $68.009 $54.917 ======== ======= ======= ======= ======= Total return ............................ (11.72%) (7.78%) 20.21% 23.84% 31.31% Ratio to Average Net Assets: Expenses (1) .......................... 0.37% 0.37% 0.37% 0.37% 0.37% Investment income--net ................ 0.97% 0.82% 0.95% 1.14% 1.36% Portfolio turnover rate ................. 9.86% 20.68% 37.93% 45.93% 2.39% Thousands of Accumulation Units outstanding at end of year ............ 12,517 13,147 12,630 11,145 9,901
(1) Advisors has agreed to waive a portion of its investment advisory fee. Without this waiver, the Account's expense ratio for the periods listed would have been higher (see Note 2). NOTE 5--ACCUMULATION UNITS Changes in the number of Accumulation Units outstanding were as follows: YEARS ENDED DECEMBER 31, ------------------------- 2001 2000 ----------- ---------- Accumulation Units: Credited for premiums ....................... 769,448 1,116,722 Cancelled for transfers and disbursements ... (1,399,262) (600,122) Outstanding: Beginning of year.......................... 13,147,071 12,630,471 ---------- ---------- End of year................................ 12,517,257 13,147,071 ========== ========== B-27 TIAA SEPARATE ACCOUNT VA-1 STOCK INDEX ACCOUNT NOTES TO FINANCIAL STATEMENTS--(CONCLUDED) NOTE 6--LINE OF CREDIT The Account participates in a $2.25 billion unsecured revolving credit facility to be used for temporary purposes, including the funding of contractowner withdrawals. Certain affiliated accounts and mutual funds, each of which is managed by Advisors, or an affiliate of Advisors, also participate in this facility. An annual commitment fee for the credit facility is borne by the participating accounts and mutual funds. Interest associated with any borrowing under the facility is charged to the borrowing accounts and mutual funds at rates which are based on the Federal Funds Rate in effect during the time of the borrowing. For the year ended December 31, 2001, there were no borrowings under this credit facility by the Account. [ERNST & YOUNG LETTERHEAD] REPORT OF INDEPENDENT AUDITORS To the Contractowners and Management Committee of TIAA Separate Account VA-1: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of the Stock Index Account of TIAA Separate Account VA-1 ("VA-1") as of December 31, 2001, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the two years in the period then ended. These financial statements are the responsibility of VA-1's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2001 by correspondence with the custodians and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Stock Index Account of VA-1 at December 31, 2001, and the results of its operations for the year then ended, and the changes in its net assets for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /S/ ERNST & YOUNG LLP New York, New York February 8, 2002 B-28 Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
PRINCIPAL VALUE (000) - --------- ----------- CORPORATE BONDS--0.00% CONSUMER CYCLICAL--0.00% $ 1,950 UGLY DUCKLING CORP (SUB DEB) 12.000%, 10/23/03............................................ $ 2 --------- TOTAL CONSUMER CYCLICAL........................................ 2 --------- FINANCIAL SERVICES--0.00% 10,000 NHI HEALTH DEBENTURES 8.500%, 01/01/06............................................. 10 --------- TOTAL FINANCIAL SERVICES....................................... 10 --------- TOTAL CORPORATE BONDS (Cost $12)................................................... 12 --------- SHARES - ------ PREFERRED STOCK--0.01% BASIC INDUSTRIES--0.01% 2,280 * SEALED AIR CORP (NEW).......................................... 95 --------- TOTAL BASIC INDUSTRIES......................................... 95 --------- CONSUMER CYCLICAL--0.00% 2,800 * O'SULLIVAN INDUSTRIES HOLDINGS, INC............................ 1 266 * PRICE LEGACY CORP.............................................. 4 --------- TOTAL CONSUMER CYCLICAL........................................ 5 --------- FINANCIAL SERVICES--0.00% 2 * CORRECTIONS CORP OF AMERICA.................................... 0 --------- TOTAL FINANCIAL SERVICES....................................... 0 --------- TECHNOLOGY--0.00% 503 * SUPERIOR TRUST I SERIES A...................................... 2 --------- TOTAL TECHNOLOGY............................................... 2 --------- TOTAL PREFERRED STOCK (Cost $131).................................................. 102 --------- COMMON STOCK--99.56% AEROSPACE AND DEFENSE--1.03% 1,761 AAR CORP....................................................... 16 1,575 * ALLIANT TECHSYSTEMS, INC....................................... 122 1,200 * ARMOR HOLDINGS, INC............................................ 32 1,354 * AVIALL, INC.................................................... 10 58,496 BOEING CO...................................................... 2,271 875 * DRS TECHNOLOGIES, INC.......................................... 31 15,556 * ECHOSTAR COMMUNICATIONS CORP (CLASS A)......................... 427 482 ENGINEERED SUPPORT SYSTEMS, INC................................ 16 14,608 GENERAL DYNAMICS CORP.......................................... 1,163 63,577 * GENERAL MOTORS CORP (CLASS H).................................. 982 600 HEICO CORP..................................................... 9 60 HEICO CORP (CLASS A)........................................... 1 1,700 * HEXCEL CORP.................................................... 5 600 * INNOVATIVE SOLUTIONS & SUPPORT, INC............................ 5 1,500 KAMAN CORP (CLASS A)........................................... 23 1,200 * LADISH CO, INC................................................. 13 26,249 LOCKHEED MARTIN CORP........................................... 1,225 900 * MOOG, INC (CLASS A)............................................ 20 7,012 NORTHROP GRUMMAN CORP.......................................... 707 2,900 * ORBITAL SCIENCES CORP.......................................... 12 2,069 * PANAMSAT CORP.................................................. 45 3,152 * PEGASUS COMMUNICATIONS CORP.................................... 33 8,463 PERKINELMER, INC............................................... 296 3,900 PRECISION CASTPARTS CORP....................................... 110 27,369 RAYTHEON CO.................................................... 889 3,250 * REMEC, INC..................................................... 32 306 * SEQUA CORP (CLASS A)........................................... 15 2,286 * TELEDYNE TECHNOLOGIES, INC..................................... 37 1,200 * TRIUMPH GROUP, INC............................................. 39 988 * VIASAT, INC.................................................... 15 --------- TOTAL AEROSPACE AND DEFENSE.................................... 8,601 --------- SHARES VALUE (000) -------- ----------- BASIC INDUSTRIES--3.66% 16,272 AIR PRODUCTS & CHEMICALS, INC.................................. $ 763 3,800 * AIRGAS, INC.................................................... 57 6,929 * AK STEEL HOLDING CORP.......................................... 79 1,160 ALBANY INTERNATIONAL CORP (CLASS A)............................ 25 1,800 ALBEMARLE CORP................................................. 43 61,636 ALCOA, INC..................................................... 2,191 200 ALICO, INC..................................................... 6 5,404 ALLEGHENY TECHNOLOGIES, INC.................................... 91 1,482 AMCOL INTERNATIONAL CORP....................................... 11 300 * AMERICAN REALTY INVESTORS, INC................................. 3 4,350 * AMERICAN STANDARD COS, INC..................................... 297 395 AMERICAN WOODMARK CORP......................................... 21 266 AMERON INTERNATIONAL CORP...................................... 18 2,397 APTARGROUP, INC................................................ 84 1,500 ARCH CHEMICALS, INC............................................ 35 2,556 ARCH COAL, INC................................................. 58 3,000 * ARMSTRONG HOLDINGS, INC........................................ 10 7,000 AVERY DENNISON CORP............................................ 396 2,065 BALL CORP...................................................... 146 10,028 BARRICK GOLD CORP (U.S.)....................................... 160 3,600 BEMIS CO....................................................... 177 9,400 b* BETHLEHEM STEEL CORP........................................... 4 5,783 BLACK & DECKER CORP............................................ 218 3,576 BOISE CASCADE CORP............................................. 122 3,703 BOWATER, INC................................................... 177 1,200 * BRUSH ENGINEERED MATERIALS, INC................................ 17 1,676 * BUCKEYE TECHNOLOGIES, INC...................................... 19 942 * BUILDING MATERIALS HOLDING CORP................................ 10 4,308 CABOT CORP..................................................... 154 1,835 * CABOT MICROELECTRONICS CORP.................................... 145 2,400 CALGON CARBON CORP............................................. 20 1,618 CAMBREX CORP................................................... 71 1,600 CARAUSTAR INDUSTRIES, INC...................................... 11 2,200 CARLISLE COS, INC.............................................. 81 1,500 CARPENTER TECHNOLOGY CORP...................................... 40 600 CENTEX CONSTRUCTION PRODUCTS, INC.............................. 19 4,415 CENTEX CORP.................................................... 252 900 CENTURY ALUMINUM CO............................................ 12 3,600 * CHAMPION ENTERPRISES, INC...................................... 44 700 CHEMED CORP.................................................... 24 793 CHEMFIRST, INC................................................. 19 1,100 CHESAPEAKE CORP................................................ 31 1,688 CLARCOR, INC................................................... 46 7,094 CLAYTON HOMES, INC............................................. 121 800 CLEVELAND-CLIFFS, INC.......................................... 15 7,100 * COLLINS & AIKMAN CORP.......................................... 55 868 COMMERCIAL METALS CO........................................... 30 1,518 CONSOL ENERGY, INC............................................. 38 2,006 * CORVAS INTERNATIONAL, INC...................................... 13 8,295 CROMPTON CORP.................................................. 75 400 CROSSMANN COMMUNITIES, INC..................................... 13 9,400 * CROWN CORK & SEAL CO, INC...................................... 24 2,900 * CYTEC INDUSTRIES, INC.......................................... 78 4,191 D.R. HORTON, INC............................................... 136 4,100 * DAL-TILE INTERNATIONAL, INC.................................... 95 742 DELTIC TIMBER CORP............................................. 20 1,480 * DIONEX CORP.................................................... 38 65,427 DOW CHEMICAL CO................................................ 2,210 75,498 DU PONT (E.I.) DE NEMOURS & CO................................. 3,212 3,300 * EARTHSHELL CORP................................................ 7 5,589 EASTMAN CHEMICAL CO............................................ 218 9,246 ECOLAB, INC.................................................... 372 1,450 ELCOR CORP..................................................... 40 564 * EMCOR GROUP, INC............................................... 26 4,696 * ENCOMPASS SERVICES CORP........................................ 14 960 * ENCORE WIRE CORP............................................... 12 934 * ENERGY CONVERSION DEVICES, INC................................. 18 B-29 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- BASIC INDUSTRIES--(Continued) 9,400 ENGELHARD CORP................................................. $ 260 2,080 FERRO CORP..................................................... 54 2,400 * FLEETWOOD ENTERPRISES, INC..................................... 27 1,374 FLORIDA ROCK INDUSTRIES, INC................................... 50 5,800 FLUOR CORP (NEW)............................................... 217 1,686 * FMC CORP....................................................... 100 1,100 * FOAMEX INTERNATIONAL, INC...................................... 9 5,917 * FREEPORT-MCMORAN COPPER & GOLD, INC (CLASS A).................. 79 1,901 GEORGIA GULF CORP.............................................. 35 16,660 GEORGIA-PACIFIC CORP (GEORGIA-PACIFIC GROUP)................... 460 438 GIBRALTAR STEEL CORP........................................... 8 989 GLATFELTER..................................................... 15 6,992 GOODRICH CORP.................................................. 186 2,025 GRANITE CONSTRUCTION, INC...................................... 49 2,857 GREAT LAKES CHEMICAL CORP...................................... 69 1,000 GREIF BROTHERS CORP (CLASS A).................................. 33 2,136 H.B. FULLER CO................................................. 61 7,800 * HERCULES, INC.................................................. 78 977 * HOVNANIAN ENTERPRISES, INC (CLASS A)........................... 21 7,800 IMC GLOBAL, INC................................................ 101 1,600 * INSITUFORM TECHNOLOGIES, INC (CLASS A)......................... 41 2,100 * INTEGRATED ELECTRICAL SERVICES, INC............................ 11 34,806 INTERNATIONAL PAPER CO......................................... 1,404 1,100 * INTERNATIONAL SPECIALTY PRODUCTS, INC.......................... 10 800 INTERPOOL, INC................................................. 15 1,242 * IVEX PACKAGING CORP............................................ 24 1,611 * JACOBS ENGINEERING GROUP, INC.................................. 106 2,200 * KAISER ALUMINUM CORP........................................... 4 2,892 KB HOME........................................................ 116 38,211 KIMBERLY-CLARK CORP............................................ 2,285 2,258 LAFARGE NORTH AMERICA, INC..................................... 85 3,800 LENNAR CORP.................................................... 178 2,900 LENNOX INTERNATIONAL, INC...................................... 28 200 LIQUI-BOX CORP................................................. 8 1,800 * LONE STAR TECHNOLOGIES, INC.................................... 32 3,600 LONGVIEW FIBRE CO.............................................. 43 7,500 * LOUISIANA-PACIFIC CORP......................................... 63 1,035 LSI INDUSTRIES, INC............................................ 18 3,700 LUBRIZOL CORP.................................................. 130 1,091 * LYDALL, INC.................................................... 11 7,790 LYONDELL CHEMICAL CO........................................... 112 431 M/I SCHOTTENSTEIN HOMES, INC................................... 21 1,300 MACDERMID, INC................................................. 22 3,500 MARTIN MARIETTA MATERIALS, INC................................. 163 33,208 MASCO CORP..................................................... 814 5,400 MASSEY ENERGY CO............................................... 112 2,200 * MATTSON TECHNOLOGY, INC........................................ 19 1,337 MDC HOLDINGS, INC.............................................. 51 7,100 MEAD CORP...................................................... 219 4,600 MILLENNIUM CHEMICALS, INC...................................... 58 1,400 MINERALS TECHNOLOGIES, INC..................................... 65 1,000 * MOBILE MINI, INC............................................... 39 2,780 MONSANTO CO.................................................... 94 2,154 * MUELLER INDUSTRIES, INC........................................ 72 1,600 * NANOPHASE TECHNOLOGIES CORP.................................... 9 200 NCH CORP....................................................... 10 1,211 * NCI BUILDING SYSTEMS, INC...................................... 21 14,029 NEWMONT MINING CORP............................................ 268 744 NL INDUSTRIES, INC............................................. 11 600 * NORTEK, INC.................................................... 17 1,100 * NS GROUP, INC.................................................. 8 5,589 NUCOR CORP..................................................... 296 480 * NVR, INC....................................................... 98 730 * OCTEL CORP..................................................... 13 2,500 OLIN CORP...................................................... 40 1,800 OM GROUP, INC.................................................. 119 2,700 * OMNOVA SOLUTIONS, INC.......................................... 18 SHARES VALUE (000) -------- ----------- 1,889 * OREGON STEEL MILLS, INC........................................ $ 9 772 * OSMONICS, INC.................................................. 11 3,794 * OWENS CORNING.................................................. 7 10,500 * OWENS-ILLINOIS, INC............................................ 105 3,500 * PACKAGING CORP OF AMERICA...................................... 64 11,572 * PACTIV CORP.................................................... 205 1,250 * PALM HARBOR HOMES, INC......................................... 30 1,098 PEABODY ENERGY CORP............................................ 31 800 PENN ENGINEERING & MANUFACTURING CORP.......................... 13 500 PENN VIRGINIA CORP............................................. 17 3,142 PENTAIR, INC................................................... 115 919 * PENWEST PHARMACEUTICALS CO..................................... 18 1,100 * PERINI CORP.................................................... 8 5,728 * PHELPS DODGE CORP.............................................. 186 330 PITT-DES MOINES, INC........................................... 10 11,655 PLUM CREEK TIMBER CO, INC...................................... 330 5,611 POLYONE CORP................................................... 55 1,000 POPE & TALBOT, INC............................................. 14 2,089 POTLATCH CORP.................................................. 61 12,044 PPG INDUSTRIES, INC............................................ 623 11,600 PRAXAIR, INC................................................... 641 3,372 PULTE HOMES, INC............................................... 151 564 QUAKER CHEMICAL CORP........................................... 12 1,100 QUANEX CORP.................................................... 31 2,000 RAYONIER, INC.................................................. 101 1,350 RELIANCE STEEL & ALUMINUM CO................................... 35 799 ROANOKE ELECTRIC STEEL CORP.................................... 11 600 ROCK-TENN CO (CLASS A)......................................... 9 11,190 ROHM & HAAS CO................................................. 388 7,331 RPM, INC....................................................... 106 1,100 * RTI INTERNATIONAL METALS, INC.................................. 11 1,661 RYERSON TULL, INC.............................................. 18 1,000 RYLAND GROUP, INC.............................................. 73 2,188 * SCHULER HOMES, INC (CLASS A)................................... 43 2,300 SCHULMAN (A.), INC............................................. 31 2,400 * SCICLONE PHARMACEUTICALS, INC.................................. 7 3,752 * SEALED AIR CORP................................................ 153 3,011 * SHAW GROUP, INC................................................ 71 9,405 SHERWIN-WILLIAMS CO............................................ 259 5,400 SIGMA-ALDRICH CORP............................................. 213 711 * SILGAN HOLDINGS, INC........................................... 19 543 * SIMPSON MANUFACTURING CO, INC.................................. 31 400 SKYLINE CORP................................................... 13 12,305 * SMURFIT-STONE CONTAINER CORP................................... 197 4,200 SNAP-ON, INC................................................... 141 7,460 SOLUTIA, INC................................................... 105 6,931 SONOCO PRODUCTS CO............................................. 184 1,033 SOUTHERN PERU COPPER CORP...................................... 12 1,200 SPARTECH CORP.................................................. 25 2,087 ST. JOE CO..................................................... 58 2,000 STANDARD-PACIFIC CORP.......................................... 49 5,816 STANLEY WORKS.................................................. 271 1,835 * STEEL DYNAMICS, INC............................................ 21 2,800 * STILLWATER MINING CO........................................... 52 3,400 TEMPLE-INLAND, INC............................................. 193 2,806 * TERRA INDUSTRIES, INC.......................................... 10 1,600 TEXAS INDUSTRIES, INC.......................................... 59 1,431 * TITANIUM METALS CORP........................................... 6 1,600 * TOLL BROTHERS, INC............................................. 70 1,160 TREDEGAR CORP.................................................. 22 400 * TREX CO, INC................................................... 8 1,227 * U.S. CONCRETE, INC............................................. 8 6,100 UNITED STATES STEEL CORP....................................... 110 900 UNIVERSAL FOREST PRODUCTS, INC................................. 19 1,100 * URS CORP....................................................... 30 5,200 USEC, INC...................................................... 37 2,700 b* USG CORP....................................................... 15 6,833 VULCAN MATERIALS CO............................................ 328 B-30 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- BASIC INDUSTRIES--(Continued) 1,000 WATSCO, INC.................................................... $ 14 3,445 WAUSAU-MOSINEE PAPER CORP...................................... 42 1,100 WD-40 CO....................................................... 29 1,989 WELLMAN, INC................................................... 31 800 WEST PHARMACEUTICAL SERVICES, INC.............................. 21 6,237 WESTVACO CORP.................................................. 177 15,572 WEYERHAEUSER CO................................................ 842 7,230 WILLAMETTE INDUSTRIES, INC..................................... 377 500 * WOLVERINE TUBE, INC............................................ 6 4,905 WORTHINGTON INDUSTRIES, INC.................................... 70 2,800 YORK INTERNATIONAL CORP........................................ 107 --------- TOTAL BASIC INDUSTRIES......................................... 30,485 --------- CONSUMER CYCLICAL--10.22% 496 * 1-800 CONTACTS, INC............................................ 6 1,930 * 99 CENTS ONLY STORES........................................... 74 1,107 AARON RENTS, INC............................................... 18 6,700 * ABERCROMBIE & FITCH CO (CLASS A)............................... 178 4,031 * ACCLAIM ENTERTAINMENT, INC..................................... 21 600 * ACKERLEY GROUP, INC............................................ 11 1,000 * ACTION PERFORMANCE COS, INC.................................... 31 3,500 * ACTV, INC...................................................... 7 6,051 * ADELPHIA COMMUNICATIONS CORP (CLASS A)......................... 189 750 ADVANCED MARKETING SERVICES, INC............................... 14 686 * AFC ENTERPRISES, INC........................................... 19 174 * ALEXANDER'S, INC............................................... 10 1,066 * ALLIANCE GAMING CORP........................................... 31 1,362 * AMC ENTERTAINMENT, INC......................................... 16 500 * AMERCO......................................................... 9 800 * AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.................... 17 3,605 * AMERICAN EAGLE OUTFITTERS, INC................................. 94 4,600 * AMERICAN GREETINGS CORP (CLASS A).............................. 63 200 * AMERISTAR CASINOS, INC......................................... 5 1,800 * ANNTAYLOR STORES CORP.......................................... 63 308,914 * AOL TIME WARNER, INC........................................... 9,916 2,068 APOGEE ENTERPRISES, INC........................................ 33 6,257 * APOLLO GROUP, INC (CLASS A).................................... 282 640 * APOLLO GROUP, INC (UNIVERSITY OF PHOENIX ONLINE)............... 21 2,450 APPLEBEE'S INTERNATIONAL, INC.................................. 84 1,300 ARCTIC CAT, INC................................................ 22 1,600 * ARGOSY GAMING CO............................................... 52 4,899 ARVINMERITOR, INC.............................................. 96 7,284 AUTOLIV, INC................................................... 148 2,500 * AZTAR CORP..................................................... 46 2,000 * BALLY TOTAL FITNESS HOLDING CORP............................... 43 800 BANDAG, INC.................................................... 28 1,200 BARNES GROUP, INC.............................................. 29 745 BASSETT FURNITURE INDUSTRIES, INC.............................. 10 600 * BEASLEY BROADCAST GROUP, INC (CLASS A)......................... 8 200 * BEBE STORES, INC............................................... 4 20,737 * BED BATH & BEYOND, INC......................................... 703 5,629 BELO CORP (CLASS A)............................................ 106 8,200 BIG LOTS, INC.................................................. 85 2,300 BLOCKBUSTER, INC (CLASS A)..................................... 58 2,500 BOB EVANS FARMS, INC........................................... 61 2,130 * BOCA RESORTS, INC (CLASS A).................................... 28 1,900 BORGWARNER, INC................................................ 99 2,400 BOWNE & CO, INC................................................ 31 2,248 * BOYD GAMING CORP............................................... 15 3,859 * BOYDS COLLECTION LTD........................................... 26 7,050 * BRINKER INTERNATIONAL, INC..................................... 210 1,400 BROWN SHOE CO, INC............................................. 23 6,300 BRUNSWICK CORP................................................. 137 900 * BUCA, INC...................................................... 15 500 * BUCKLE, INC.................................................... 11 1,220 BURLINGTON COAT FACTORY WAREHOUSE CORP......................... 20 800 BUSH INDUSTRIES, INC (CLASS A)................................. 9 SHARES VALUE (000) -------- ----------- 6,450 * CABLEVISION SYSTEMS CORP (CLASS A)............................. $ 306 3,425 * CABLEVISION SYSTEMS CORP (RAINBOW MEDIA GROUP)................. 85 1,088 * CALIFORNIA PIZZA KITCHEN, INC.................................. 27 5,600 CALLAWAY GOLF CO............................................... 107 2,656 * CATALINA MARKETING CORP........................................ 92 1,100 CATO CORP (CLASS A)............................................ 21 4,000 CBRL GROUP, INC................................................ 118 2,050 * CEC ENTERTAINMENT, INC......................................... 89 900 * CHAMPIONSHIP AUTO RACING TEAMS, INC............................ 14 1,517 * CHARLOTTE RUSSE HOLDING, INC................................... 28 7,400 * CHARMING SHOPPES, INC.......................................... 39 8,100 * CHARTER COMMUNICATIONS, INC (CLASS A).......................... 133 1,500 * CHICO'S FAS, INC............................................... 60 882 * CHILDREN'S PLACE RETAIL STORES, INC............................ 24 2,528 * CHOICE HOTELS INTERNATIONAL, INC............................... 56 1,583 * CHRISTOPHER & BANKS CORP....................................... 54 202 CHURCHILL DOWNS, INC........................................... 7 3,000 CLAIRE'S STORES, INC........................................... 45 35,460 * CLEAR CHANNEL COMMUNICATIONS, INC.............................. 1,809 800 COACHMEN INDUSTRIES, INC....................................... 10 300 * COLDWATER CREEK, INC........................................... 6 720 * COLE NATIONAL CORP............................................. 12 750 * COLUMBIA SPORTSWEAR CO......................................... 25 68,594 * COMCAST CORP (CLASS A) SPECIAL................................. 2,469 4,500 COOPER TIRE & RUBBER CO........................................ 72 2,900 * COPART, INC.................................................... 105 13,889 * COX COMMUNICATIONS, INC (CLASS A).............................. 582 2,400 * COX RADIO, INC (CLASS A)....................................... 61 500 CPI CORP....................................................... 8 800 * CROWN MEDIA HOLDINGS, INC (CLASS A)............................ 9 500 * CSS INDUSTRIES, INC............................................ 15 2,421 * CUMULUS MEDIA, INC (CLASS A)................................... 39 10,724 DANA CORP...................................................... 149 8,455 DARDEN RESTAURANTS, INC........................................ 299 40,115 DELPHI AUTOMOTIVE SYSTEMS CORP................................. 548 3,200 * DIGITAL GENERATION SYSTEMS, INC................................ 4 4,532 DILLARD'S, INC (CLASS A)....................................... 73 2,137 * DIRECT FOCUS, INC.............................................. 67 19,180 DOLLAR GENERAL CORP............................................ 286 1,736 * DOLLAR THRIFTY AUTOMOTIVE GROUP, INC........................... 27 7,030 * DOLLAR TREE STORES, INC........................................ 217 2,900 DONALDSON CO, INC.............................................. 113 7,767 DONNELLEY (R.R.) & SONS CO..................................... 231 1,000 DOVER DOWNS ENTERTAINMENT, INC................................. 15 3,337 DOW JONES & CO, INC............................................ 183 1,000 * DRESS BARN, INC................................................ 25 1,000 * DURA AUTOMOTIVE SYSTEMS, INC................................... 11 21,082 EASTMAN KODAK CO............................................... 620 687 * ELIZABETH ARDEN, INC........................................... 10 2,184 * EMMIS COMMUNICATIONS CORP (CLASS A)............................ 52 1,991 * ENTERCOM COMMUNICATIONS CORP................................... 100 2,845 * ENTRAVISION COMMUNICATIONS CORP (CLASS A)...................... 34 2,300 * EQUITY INNS, INC............................................... 15 1,900 * EXIDE TECHNOLOGIES............................................. 2 4,394 * EXTENDED STAY AMERICA, INC..................................... 72 1,500 FACTSET RESEARCH SYSTEMS, INC.................................. 52 10,700 FAMILY DOLLAR STORES, INC...................................... 321 2,100 FEDDERS CORP................................................... 6 5,200 b* FEDERAL-MOGUL CORP............................................. 4 13,019 * FEDERATED DEPARTMENT STORES, INC............................... 532 2,201 FELCOR LODGING TRUST, INC...................................... 37 1,274 * FINISH LINE, INC (CLASS A)..................................... 19 298 FISHER COMMUNICATIONS, INC..................................... 13 554 FLORIDA EAST COAST INDUSTRIES, INC (CLASS B)................... 12 10,100 * FOOT LOCKER, INC............................................... 158 1,400 * FOOTSTAR, INC.................................................. 44 131,427 FORD MOTOR CO.................................................. 2,066 1,800 FOREST CITY ENTERPRISES, INC (CLASS A)......................... 70 B-31 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- CONSUMER CYCLICAL--(Continued) 1,100 * FOSSIL, INC.................................................... $ 23 9,529 * FOX ENTERTAINMENT GROUP, INC (CLASS A)......................... 253 850 FRED'S, INC.................................................... 35 1,015 FRIEDMAN'S, INC (CLASS A)...................................... 9 1,500 G & K SERVICES, INC (CLASS A).................................. 48 19,092 GANNETT CO, INC................................................ 1,284 44,172 GAP, INC....................................................... 616 100 GARAN, INC..................................................... 4 1,554 * GAYLORD ENTERTAINMENT CO....................................... 38 13,789 * GEMSTAR-TV GUIDE INTERNATIONAL, INC............................ 382 2,339 GENCORP, INC................................................... 33 40,312 GENERAL MOTORS CORP............................................ 1,959 1,700 * GENESCO, INC................................................... 35 873 * GENESISINTERMEDIA, INC......................................... 5 5,400 * GENTEX CORP.................................................... 144 12,352 GENUINE PARTS CO............................................... 453 800 * GLOBAL SPORTS, INC............................................. 16 10,224 GOODYEAR TIRE & RUBBER CO...................................... 243 2,300 GRACO, INC..................................................... 90 674 GRAY COMMUNICATIONS SYSTEMS, INC............................... 9 52 GREY GLOBAL GROUP, INC......................................... 35 1,100 * GROUP 1 AUTOMOTIVE, INC........................................ 31 1,226 * GUITAR CENTER, INC............................................. 17 333 * GULFMARK OFFSHORE, INC......................................... 9 2,057 * GYMBOREE CORP.................................................. 25 1,144 HANCOCK FABRICS, INC........................................... 15 2,200 * HANDLEMAN CO................................................... 33 21,968 HARLEY-DAVIDSON, INC........................................... 1,193 2,270 HARMAN INTERNATIONAL INDUSTRIES, INC........................... 102 8,531 * HARRAH'S ENTERTAINMENT, INC.................................... 316 3,000 HARTE-HANKS, INC............................................... 85 1,300 HAVERTY FURNITURE COS, INC..................................... 22 1,500 b* HAYES LEMMERZ INTERNATIONAL, INC............................... 0 1,328 * HEARST-ARGYLE TELEVISION, INC.................................. 29 268 * HIBBETT SPORTING GOODS, INC.................................... 8 23,778 HILTON HOTELS CORP............................................. 260 6,874 * HISPANIC BROADCASTING CORP..................................... 175 2,900 HOLLINGER INTERNATIONAL, INC................................... 34 700 * HOLLYWOOD CASINO CORP (CLASS A)................................ 7 3,100 * HOLLYWOOD ENTERTAINMENT CORP................................... 44 1,300 * HOT TOPIC, INC................................................. 41 1,299 * IHOP CORP...................................................... 38 700 * IMPCO TECHNOLOGIES, INC........................................ 9 1,420 * INFORMATION HOLDINGS, INC...................................... 40 2,800 * INSIGHT COMMUNICATIONS CO, INC................................. 68 2,683 INTERACTIVE DATA CORP.......................................... 38 6,357 * INTERNATIONAL GAME TECHNOLOGY.................................. 434 2,100 INTERNATIONAL SPEEDWAY CORP (CLASS A).......................... 82 27,346 INTERPUBLIC GROUP OF COS, INC.................................. 808 1,900 * INTERTAN, INC.................................................. 24 5,586 INTIMATE BRANDS, INC........................................... 83 1,406 * ISLE OF CAPRI CASINOS, INC..................................... 19 19,081 J.C. PENNEY CO, INC............................................ 513 2,697 * JACK IN THE BOX, INC........................................... 74 1,300 * JAKKS PACIFIC, INC............................................. 25 6,300 JOHNSON CONTROLS, INC.......................................... 509 8,138 * JONES APPAREL GROUP, INC....................................... 270 1,919 * JOURNAL REGISTER CO............................................ 40 1,314 * K2, INC........................................................ 9 1,600 KELLWOOD CO.................................................... 38 500 * KENNETH COLE PRODUCTIONS, INC (CLASS A)........................ 9 2,200 * KEY3MEDIA GROUP, INC........................................... 12 2,300 KIMBALL INTERNATIONAL, INC (CLASS B)........................... 35 1,369 * KIRBY CORP..................................................... 38 35,512 * KMART CORP..................................................... 194 6,066 KNIGHT RIDDER, INC............................................. 394 20,777 * KOHLS' CORP.................................................... 1,464 SHARES VALUE (000) -------- ----------- 3,001 * KRISPY KREME DOUGHNUTS, INC.................................... $ 133 2,000 * KROLL, INC..................................................... 30 491 K-SWISS, INC (CLASS A)......................................... 16 4,250 * LAMAR ADVERTISING CO........................................... 180 1,207 LANDRY'S RESTAURANTS, INC...................................... 23 823 * LANDS' END, INC................................................ 41 896 LASALLE HOTEL PROPERTIES....................................... 11 3,512 LA-Z-BOY, INC.................................................. 77 4,318 * LEAR CORP...................................................... 165 3,200 LEE ENTERPRISES, INC........................................... 116 14,117 LEGGETT & PLATT, INC........................................... 325 1,300 LIBBEY, INC.................................................... 42 1,700 * LIBERTY DIGITAL, INC (CLASS A)................................. 6 300 * LIBERTY LIVEWIRE CORP (CLASS A)................................ 2 187,886 * LIBERTY MEDIA CORP (CLASS A)................................... 2,630 24,875 LIMITED, INC................................................... 366 2,603 * LINENS 'N THINGS, INC.......................................... 66 3,900 LIZ CLAIBORNE, INC............................................. 194 675 * LODGENET ENTERTAINMENT CORP.................................... 12 1,517 LONE STAR STEAKHOUSE & SALOON, INC............................. 22 1,800 * LUBY'S, INC.................................................... 10 200 * LYNCH INTERACTIVE CORP......................................... 14 4,200 * MANDALAY RESORT GROUP.......................................... 90 1,100 MARCUS CORP.................................................... 16 13,664 MARRIOTT INTERNATIONAL, INC (CLASS A).......................... 555 600 * MARTHA STEWART LIVING OMNIMEDIA, INC (CLASS A)................. 10 138 * MARVEL ENTERPRISES, INC (CLASS C WTS 10/02/02)................. 0 4,500 * MASCOTECH, INC ESCROW.......................................... 0 21,599 MAY DEPARTMENT STORES CO....................................... 799 5,591 MAYTAG CORP.................................................... 173 1,668 MCCLATCHY CO (CLASS A)......................................... 78 93,335 MCDONALD'S CORP................................................ 2,471 14,009 MCGRAW-HILL COS, INC........................................... 854 962 MEDIA GENERAL, INC (CLASS A)................................... 48 2,300 * MEDIACOM COMMUNICATIONS CORP................................... 42 1,100 * MEDIS TECHNOLOGIES LTD......................................... 8 2,250 * MEN'S WEARHOUSE, INC........................................... 46 2,800 MEREDITH CORP.................................................. 100 1,315 * METRO ONE TELECOMMUNICATIONS, INC.............................. 40 2,654 * METRO-GOLDWYN-MAYER, INC....................................... 58 4,600 * MGM MIRAGE..................................................... 133 4,400 * MICHAELS STORES, INC........................................... 145 1,400 * MICROS SYSTEMS, INC............................................ 35 1,333 MIDAS, INC..................................................... 15 2,000 * MIDWAY GAMES, INC.............................................. 30 1,166 * MILLENNIUM CELL, INC........................................... 6 1,600 MODINE MANUFACTURING CO........................................ 37 2,896 * MOHAWK INDUSTRIES, INC......................................... 159 1,875 * MONACO COACH CORP.............................................. 41 450 * MOVIE GALLERY, INC............................................. 11 2,700 * MSC INDUSTRIAL DIRECT CO (CLASS A)............................. 53 1,337 * MTR GAMING GROUP, INC.......................................... 21 1,382 MYERS INDUSTRIES, INC.......................................... 19 727 NATIONAL GOLF PROPERTIES, INC.................................. 6 300 NATIONAL PRESTO INDUSTRIES, INC................................ 8 1,819 * NAUTICA ENTERPRISES, INC....................................... 23 1,864 * NEIMAN MARCUS GROUP, INC (CLASS A)............................. 58 723 * NEIMAN MARCUS GROUP, INC (CLASS B)............................. 21 100 * NETRATINGS, INC................................................ 2 11,234 NEW YORK TIMES CO (CLASS A).................................... 486 5,327 NIKE, INC (CLASS B)............................................ 300 7,500 NORDSTROM, INC................................................. 152 1,800 * OAKLEY, INC.................................................... 29 1,400 * O'CHARLEY'S, INC............................................... 26 13,477 OMNICOM GROUP, INC............................................. 1,204 700 * ON COMMAND CORP................................................ 2 2,700 * O'REILLY AUTOMOTIVE, INC....................................... 98 803 OSHKOSH B'GOSH, INC (CLASS A).................................. 34 B-32 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- CONSUMER CYCLICAL--(Continued) 1,050 OSHKOSH TRUCK CORP............................................. $ 51 5,050 * OUTBACK STEAKHOUSE, INC........................................ 173 500 * P.F. CHANG'S CHINA BISTRO, INC................................. 24 2,111 * PACIFIC SUNWEAR OF CALIFORNIA, INC............................. 43 694 * PANERA BREAD CO (CLASS A)...................................... 36 1,075 * PAPA JOHN'S INTERNATIONAL, INC................................. 30 19,100 * PARK PLACE ENTERTAINMENT CORP.................................. 175 600 * PARKERVISION, INC.............................................. 13 1,646 * PAYLESS SHOESOURCE, INC........................................ 92 600 * PENN NATIONAL GAMING, INC...................................... 18 1,600 * PENTON MEDIA, INC.............................................. 10 3,100 * PERFORMANCE FOOD GROUP CO...................................... 109 1,400 PHILLIPS-VAN HEUSEN CORP....................................... 15 6,700 PIER 1 IMPORTS, INC............................................ 116 1,500 * PINNACLE ENTERTAINMENT, INC.................................... 9 4,000 * PINNACLE SYSTEMS, INC.......................................... 32 1,200 * PIXAR, INC..................................................... 43 959 * PLATO LEARNING, INC............................................ 16 945 * PLAYBOY ENTERPRISES, INC (CLASS B)............................. 16 1,700 POLARIS INDUSTRIES, INC........................................ 98 3,803 * POLO RALPH LAUREN CORP......................................... 102 2,000 * PRESSTEK, INC.................................................. 18 300 * PRICESMART, INC................................................ 11 3,200 * PRIME HOSPITALITY CORP......................................... 35 17,709 * PRIMEDIA, INC.................................................. 77 1,000 * PRIVATE MEDIA GROUP, INC....................................... 10 600 PULITZER, INC.................................................. 31 1,260 * QUAKER FABRIC CORP............................................. 10 1,700 * QUIKSILVER, INC................................................ 29 3,960 * RADIO ONE, INC (CLASS A)....................................... 73 1,000 * RADIO ONE, INC (CLASS D)....................................... 18 1,350 * RARE HOSPITALITY INTERNATIONAL, INC............................ 30 7,453 READER'S DIGEST ASSOCIATION, INC (CLASS A)..................... 172 688 * RECOTON CORP................................................... 9 3,400 * REEBOK INTERNATIONAL LTD....................................... 90 1,100 * REGENT COMMUNICATIONS, INC..................................... 7 2,650 REGIS CORP..................................................... 68 519 * RENT-A-CENTER, INC............................................. 17 1,175 * RESORTQUEST INTERNATIONAL, INC................................. 6 476 * RESOURCES CONNECTION, INC...................................... 13 800 RIVIANA FOODS, INC............................................. 14 5,800 ROSS STORES, INC............................................... 186 4,600 RUBY TUESDAY, INC.............................................. 95 1,702 RUSSELL CORP................................................... 26 2,500 * RYAN'S FAMILY STEAK HOUSES, INC................................ 54 700 * SAGA COMMUNICATIONS, INC (CLASS A)............................. 14 8,852 * SAKS, INC...................................................... 83 695 * SALEM COMMUNICATIONS CORP (CLASS A)............................ 16 460 * SALTON, INC.................................................... 9 2,028 * SCHOLASTIC CORP................................................ 102 1,100 * SCIENTIFIC GAMES CORP (CLASS A)................................ 10 1,200 * SCOTTS CO (CLASS A)............................................ 57 1,438 * SCP POOL CORP.................................................. 39 2,229 SCRIPPS (E.W.) CO (CLASS A).................................... 147 21,025 SEARS ROEBUCK & CO............................................. 1,002 2,000 * SHOPKO STORES, INC............................................. 19 1,230 * SHUFFLE MASTER, INC............................................ 19 2,094 * SINCLAIR BROADCAST GROUP, INC (CLASS A)........................ 20 3,400 * SIRIUS SATELLITE RADIO, INC.................................... 40 6,200 * SIX FLAGS, INC................................................. 95 308 * SKILLSOFT CORP................................................. 8 840 SMITH (A.O.) CORP.............................................. 16 1,700 * SONIC AUTOMOTIVE, INC.......................................... 40 1,550 * SONIC CORP..................................................... 56 1,473 * SOTHEBY'S HOLDINGS, INC (CLASS A).............................. 24 2,700 * SPANISH BROADCASTING SYSTEM, INC (CLASS A)..................... 27 1,000 * SPEEDWAY MOTORSPORTS, INC...................................... 25 SHARES VALUE (000) -------- ----------- 1,100 * SPIEGEL, INC (CLASS A)......................................... $ 5 600 * SPORTS RESORTS INTERNATIONAL, INC.............................. 5 500 STANDARD MOTOR PRODUCTS, INC................................... 7 389 * STANLEY FURNITURE CO, INC...................................... 9 27,267 * STARBUCKS CORP................................................. 521 2,498 * STATION CASINOS, INC........................................... 28 5,336 STEELCASE, INC (CLASS A)....................................... 79 2,000 * STEIN MART, INC................................................ 17 1,300 * STELLENT, INC.................................................. 38 600 * STEVEN MADDEN LTD.............................................. 8 700 * STONERIDGE, INC................................................ 6 3,300 STRIDE RITE CORP............................................... 22 600 STURM RUGER & CO, INC.......................................... 7 1,400 SUPERIOR INDUSTRIES INTERNATIONAL, INC......................... 56 2,100 * SYLVAN LEARNING SYSTEMS, INC................................... 46 1,800 TALBOTS, INC................................................... 65 400 TANGER FACTORY OUTLET CENTERS, INC............................. 8 65,404 TARGET CORP.................................................... 2,685 1,267 * TBC CORP....................................................... 17 2,719 * THE CHEESECAKE FACTORY, INC.................................... 95 1,400 * THE STEAK N SHAKE CO........................................... 15 600 THOR INDUSTRIES, INC........................................... 22 1,600 * THQ, INC....................................................... 78 10,498 TIFFANY & CO................................................... 330 1,400 * TIMBERLAND CO (CLASS A)........................................ 52 19,706 TJX COS, INC................................................... 785 2,207 * TOO, INC....................................................... 61 2,985 * TOPPS CO, INC.................................................. 36 2,800 * TOWER AUTOMOTIVE, INC.......................................... 25 450 * TRENDWEST RESORTS, INC......................................... 11 13,513 TRIBUNE CO..................................................... 506 10,629 * TRICON GLOBAL RESTAURANTS, INC................................. 523 330 * TROPICAL SPORTSWEAR INTERNATIONAL CORP......................... 6 7,500 TRW, INC....................................................... 278 8,200 * U.S.A. NETWORKS, INC........................................... 224 4,300 * UNIFI, INC..................................................... 31 900 * UNIVERSAL ELECTRONICS, INC..................................... 15 12,175 * UNIVISION COMMUNICATIONS, INC (CLASS A)........................ 493 400 * URBAN OUTFITTERS, INC.......................................... 10 582 * VAIL RESORTS, INC.............................................. 10 4,100 * VALASSIS COMMUNICATIONS, INC................................... 146 1,100 * VALUE CITY DEPARTMENT STORES, INC.............................. 5 900 * VANS, INC...................................................... 11 1,331 * VASTERA, INC................................................... 22 6,391 VF CORP........................................................ 249 7,400 * VIACOM, INC (CLASS A).......................................... 327 88,879 * VIACOM, INC (CLASS B).......................................... 3,924 9,356 VISTEON CORP................................................... 141 1,600 * WABASH NATIONAL CORP........................................... 12 200,938 WAL-MART STORES, INC........................................... 11,564 151,894 WALT DISNEY CO................................................. 3,152 276 WASHINGTON POST CO (CLASS B)................................... 146 6,617 WENDY'S INTERNATIONAL, INC..................................... 193 2,600 * WESTPOINT STEVENS, INC......................................... 6 5,068 * WESTWOOD ONE, INC.............................................. 152 1,111 * WET SEAL, INC (CLASS A)........................................ 26 4,037 WHIRLPOOL CORP................................................. 296 3,300 WILEY (JOHN) & SONS, INC (CLASS A)............................. 76 3,200 * WILLIAMS-SONOMA, INC........................................... 137 700 * WILSONS THE LEATHER EXPERTS, INC............................... 8 900 WINNEBAGO INDUSTRIES, INC...................................... 33 1,434 * WMS INDUSTRIES, INC............................................ 29 3,125 WOLVERINE WORLD WIDE, INC...................................... 47 500 WOODWARD GOVERNOR CO........................................... 29 600 * WORLD WRESTLING FEDERATION ENTERTAINMENT, INC.................. 8 1,000 * XM SATELLITE RADIO HOLDINGS, INC............................... 18 1,000 * YOUNG BROADCASTING, INC (CLASS A).............................. 18 2,430 * ZALE CORP...................................................... 102 B-33 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- CONSUMER CYCLICAL--(Continued) 1,300 * ZENITH ELECTRONICS CORP........................................ $ 0 2,400 * ZOMAX, INC..................................................... 19 --------- TOTAL CONSUMER CYCLICAL........................................ 85,118 --------- CONSUMER NON-CYCLICAL--9.19% 600 * 1-800-FLOWERS.COM, INC......................................... 9 1,696 * 7-ELEVEN, INC.................................................. 20 2,700 ALBERTO-CULVER CO (CLASS B).................................... 121 29,254 ALBERTSON'S, INC............................................... 921 13,681 * AMAZON.COM, INC................................................ 148 1,206 * AMERICAN ITALIAN PASTA CO (CLASS A)............................ 51 64,206 ANHEUSER-BUSCH COS, INC........................................ 2,903 1,274 * APPLICA, INC................................................... 11 40,561 ARCHER DANIELS MIDLAND CO...................................... 582 900 * AURORA FOODS, INC.............................................. 5 18,663 * AUTONATION, INC................................................ 230 6,167 * AUTOZONE, INC.................................................. 443 16,070 AVON PRODUCTS, INC............................................. 747 3,443 * BARNES & NOBLE, INC............................................ 102 11,979 * BEST BUY CO, INC............................................... 892 5,232 * BJ'S WHOLESALE CLUB, INC....................................... 231 2,400 BLYTH, INC..................................................... 56 5,900 * BORDERS GROUP, INC............................................. 117 1,200 * BOSTON BEER CO, INC (CLASS A).................................. 21 2,731 BROWN-FORMAN CORP (CLASS B).................................... 171 39 * BRUNO'S SUPERMARKETS, INC...................................... 0 2,500 * CADIZ, INC..................................................... 20 15,941 CAMPBELL SOUP CO............................................... 476 2,914 CASEY'S GENERAL STORES, INC.................................... 43 3,141 * CDW COMPUTER CENTERS, INC...................................... 169 2,663 CHURCH & DWIGHT CO, INC........................................ 71 2,579 * CIRCUIT CITY STORES, INC (CARMAX GROUP)........................ 59 14,049 CIRCUIT CITY STORES, INC (CIRCUIT CITY GROUP).................. 365 12,156 CLOROX CO...................................................... 481 3,189 * COACH, INC..................................................... 124 147,013 COCA-COLA CO................................................... 6,932 15,633 COCA-COLA ENTERPRISES, INC..................................... 296 40,091 COLGATE-PALMOLIVE CO........................................... 2,315 38,769 CONAGRA FOODS, INC............................................. 922 2,400 * CONSTELLATION BRANDS, INC (CLASS A)............................ 103 1,680 COORS (ADOLPH) CO (CLASS B).................................... 90 2,575 CORN PRODUCTS INTERNATIONAL, INC............................... 91 1,650 * COST PLUS, INC................................................. 44 32,687 * COSTCO WHOLESALE CORP.......................................... 1,451 28,275 CVS CORP....................................................... 837 3,150 * DEAN FOODS CO.................................................. 215 1,827 * DEL MONTE FOODS CO............................................. 16 2,435 DELTA & PINE LAND CO........................................... 55 6,800 DIAL CORP...................................................... 117 3,045 DIMON, INC..................................................... 22 3,073 DOLE FOOD CO................................................... 82 1,400 DREYER'S GRAND ICE CREAM, INC.................................. 54 593 * DUANE READE, INC............................................... 18 300 * ELECTRONICS BOUTIQUE HOLDINGS CORP............................. 12 6,600 * ENERGIZER HOLDINGS, INC........................................ 126 7,481 ESTEE LAUDER COS (CLASS A)..................................... 240 2,243 ETHAN ALLEN INTERIORS, INC..................................... 93 600 * EXPEDIA, INC (CLASS A)......................................... 24 900 * FACTORY 2-U STORES, INC........................................ 18 100 FARMER BROTHERS CO............................................. 27 2,100 FASTENAL CO.................................................... 140 3,000 FLEMING COS, INC............................................... 56 1,300 * FLOWERS FOODS, INC............................................. 52 600 * FTD.COM, INC................................................... 4 624 * FTI CONSULTING, INC............................................ 20 3,700 * FURNITURE BRANDS INTERNATIONAL, INC............................ 118 SHARES VALUE (000) -------- ----------- 25,961 GENERAL MILLS, INC............................................. $ 1,350 76,557 GILLETTE CO.................................................... 2,557 1,400 * GREAT ATLANTIC & PACIFIC TEA CO, INC........................... 33 323 * GREEN MOUNTAIN COFFEE, INC..................................... 9 1,696 * HAIN CELESTIAL GROUP, INC...................................... 47 10,330 HASBRO, INC.................................................... 168 25,258 HEINZ (H.J.) CO................................................ 1,039 33 HERBALIFE INTERNATIONAL, INC (CLASS A)......................... 0 1,266 HERBALIFE INTERNATIONAL, INC (CLASS B)......................... 17 5,500 HERMAN MILLER, INC............................................. 130 6,684 HERSHEY FOODS CORP............................................. 453 170,084 HOME DEPOT, INC................................................ 8,676 5,458 HORMEL FOODS CORP.............................................. 147 1,700 HUGHES SUPPLY, INC............................................. 52 700 INGLES MARKETS, INC (CLASS A).................................. 8 2,400 * INSIGHT ENTERPRISES, INC....................................... 59 3,400 INTERFACE, INC (CLASS A)....................................... 19 5,690 INTERNATIONAL FLAVORS & FRAGRANCES, INC........................ 169 1,300 * INTERNATIONAL MULTIFOODS CORP.................................. 31 2,100 INTERSTATE BAKERIES CORP....................................... 51 1,376 J.M. SMUCKER CO................................................ 49 773 * JILL (J.) GROUP, INC........................................... 17 17,299 KELLOGG CO..................................................... 521 58,239 * KROGER CO...................................................... 1,215 365 * LADENBURG THALMANN FINANCIAL SERVICES, INC..................... 0 2,062 LANCASTER COLONY CORP.......................................... 73 2,000 LANCE, INC..................................................... 29 400 * LITHIA MOTORS, INC (CLASS A)................................... 8 2,200 LONGS DRUG STORES CORP......................................... 51 56,080 LOWE'S COS..................................................... 2,603 30,982 MATTEL, INC.................................................... 533 5,000 MCCORMICK & CO, INC (NON-VOTE)................................. 210 623 MOVADO GROUP, INC.............................................. 12 785 NASH FINCH CO.................................................. 24 847 NATURE'S SUNSHINE PRODUCTS, INC................................ 10 3,129 * NBTY, INC...................................................... 37 18,188 NEWELL RUBBERMAID, INC......................................... 501 3,400 NU SKIN ENTERPRISES, INC (CLASS A)............................. 30 21,400 * OFFICE DEPOT, INC.............................................. 397 7,750 * OFFICEMAX, INC................................................. 35 1,200 ONEIDA LTD..................................................... 16 2,206 * PATHMARK STORES, INC........................................... 54 400 * PC CONNECTION, INC............................................. 6 3,300 PEP BOYS-MANNY MOE & JACK...................................... 57 12,650 PEPSI BOTTLING GROUP, INC...................................... 297 6,171 PEPSIAMERICAS INC.............................................. 85 127,040 PEPSICO, INC................................................... 6,186 4,500 * PERRIGO CO..................................................... 53 7,127 * PETSMART, INC.................................................. 70 157,236 PHILIP MORRIS COS, INC......................................... 7,209 1,200 PILGRIM'S PRIDE CORP (CLASS B)................................. 16 1,900 * PLAYTEX PRODUCTS, INC.......................................... 19 7,425 * PRICELINE.COM, INC............................................. 43 94,035 PROCTER & GAMBLE CO............................................ 7,441 7,055 R.J. REYNOLDS TOBACCO HOLDINGS, INC............................ 397 13,193 RADIOSHACK CORP................................................ 397 1,900 * RALCORP HOLDINGS, INC.......................................... 43 1,500 * REVLON, INC (CLASS A).......................................... 10 28,124 * RITE AID CORP.................................................. 142 700 * ROBERT MONDAVI CORP (CLASS A).................................. 27 2,200 RUDDICK CORP................................................... 35 700 RUSS BERRIE & CO, INC.......................................... 21 34,379 * SAFEWAY, INC................................................... 1,435 56,789 SARA LEE CORP.................................................. 1,262 740 SCHWEITZER-MAUDUIT INTERNATIONAL, INC.......................... 18 3,500 SENSIENT TECHNOLOGIES CORP..................................... 73 1,100 * SKECHERS USA, INC (CLASS A).................................... 16 1,850 * SLI, INC....................................................... 5 B-34 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- CONSUMER NON-CYCLICAL--(Continued) 900 * SMART & FINAL, INC............................................. $ 9 7,500 * SMITHFIELD FOODS, INC.......................................... 165 1,421 * SPARTAN STORES, INC............................................ 17 2,500 * STAMPS.COM, INC................................................ 9 744 STANDARD COMMERCIAL CORP....................................... 12 32,881 * STAPLES, INC................................................... 615 1,400 * STAR SCIENTIFIC, INC........................................... 4 500 STEPAN CO...................................................... 12 1,000 THOMAS INDUSTRIES, INC......................................... 25 1,900 * TICKETMASTER (CLASS B)......................................... 31 1,563 TOOTSIE ROLL INDUSTRIES, INC................................... 61 14,403 * TOYS "R" US, INC............................................... 299 2,550 * TRANS WORLD ENTERTAINMENT CORP................................. 19 900 * TRIARC COS, INC................................................ 22 700 * TUESDAY MORNING CORP........................................... 13 3,750 TUPPERWARE CORP................................................ 72 1,200 * TWEETER HOME ENTERTAINMENT GROUP, INC.......................... 35 15,853 TYSON FOODS, INC (CLASS A)..................................... 183 600 * UNITED AUTO GROUP, INC......................................... 15 600 * UNITED NATURAL FOODS, INC...................................... 15 2,000 UNIVERSAL CORP................................................. 73 11,669 UST, INC....................................................... 408 1,719 * VALUEVISION INTERNATIONAL, INC (CLASS A)....................... 34 1,050 VECTOR GROUP LTD............................................... 34 74,032 WALGREEN CO.................................................... 2,490 900 WEIS MARKETS, INC.............................................. 25 3,533 * WHOLE FOODS MARKET, INC........................................ 154 1,200 * WILD OATS MARKETS, INC......................................... 12 5,993 WINN-DIXIE STORES, INC......................................... 85 11,258 WRIGLEY (WM.) JR CO............................................ 578 1,000 * YANKEE CANDLE CO, INC.......................................... 23 --------- TOTAL CONSUMER NON-CYCLICAL.................................... 76,531 --------- ENERGY--5.16% 997 * 3TEC ENERGY CORP............................................... 14 4,964 AMERADA HESS CORP.............................................. 310 18,072 ANADARKO PETROLEUM CORP........................................ 1,027 9,896 APACHE CORP.................................................... 494 5,016 ASHLAND, INC................................................... 231 400 * ATP OIL & GAS CORP............................................. 1 700 * ATWOOD OCEANICS, INC........................................... 24 24,202 BAKER HUGHES, INC.............................................. 883 1,300 BERRY PETROLEUM CO (CLASS A)................................... 20 11,817 * BJ SERVICES CO................................................. 383 14,649 BURLINGTON RESOURCES, INC...................................... 550 2,000 CABOT OIL & GAS CORP (CLASS A)................................. 48 2,325 * CAL DIVE INTERNATIONAL, INC.................................... 57 600 * CALLON PETROLEUM CORP.......................................... 4 4,654 * CAPSTONE TURBINE CORP.......................................... 25 400 CARBO CERAMICS, INC............................................ 16 9,300 * CHESAPEAKE ENERGY CORP......................................... 61 77,406 CHEVRONTEXACO CORP............................................. 6,936 300 * CLAYTON WILLIAMS ENERGY, INC................................... 4 1,600 * COMSTOCK RESOURCES, INC........................................ 11 45,054 CONOCO, INC.................................................... 1,275 3,720 * COOPER CAMERON CORP............................................ 150 1,100 * DENBURY RESOURCES, INC......................................... 8 8,429 DEVON ENERGY CORP.............................................. 326 3,941 DIAMOND OFFSHORE DRILLING, INC................................. 120 463 * DRIL-QUIP, INC................................................. 11 2,449 * EEX CORP....................................................... 5 1,605 * ENERGY PARTNERS LTD............................................ 12 9,900 ENSCO INTERNATIONAL, INC....................................... 246 7,541 EOG RESOURCES, INC............................................. 295 1,200 * EVERGREEN RESOURCES, INC....................................... 46 496,562 EXXON MOBIL CORP............................................... 19,515 2,013 * FOREST OIL CORP................................................ 57 SHARES VALUE (000) -------- ----------- 14 * FOREST OIL CORP WTS 02/15/04................................... $ 0 14 * FOREST OIL CORP WTS 02/15/05................................... 0 2,000 FRONTIER OIL CORP.............................................. 33 4,627 * GLOBAL INDUSTRIES LTD.......................................... 41 7,520 * GRANT PRIDECO, INC............................................. 86 10,762 * GREY WOLF, INC................................................. 32 600 * GULF ISLAND FABRICATION, INC................................... 8 30,950 HALLIBURTON CO................................................. 405 5,700 * HANOVER COMPRESSOR CO.......................................... 144 3,700 HELMERICH & PAYNE, INC......................................... 124 602 HOLLY CORP..................................................... 12 1,000 * HORIZON OFFSHORE, INC.......................................... 8 700 * HOUSTON EXPLORATION CO......................................... 24 939 * HYDRIL CO...................................................... 17 3,300 * INPUT/OUTPUT, INC.............................................. 27 1,843 * KCS ENERGY, INC................................................ 6 7,746 KERR-MCGEE CORP................................................ 424 6,841 * KEY ENERGY SERVICES, INC....................................... 63 800 * KEY PRODUCTION CO, INC......................................... 14 400 LUFKIN INDUSTRIES, INC......................................... 11 2,114 * MAGNUM HUNTER RESOURCES, INC................................... 18 22,120 MARATHON OIL CORP.............................................. 664 2,600 * MAVERICK TUBE CORP............................................. 34 1,030 * MCMORAN EXPLORATION CO......................................... 6 3,300 * MERIDIAN RESOURCE CORP......................................... 13 1,600 MITCHELL ENERGY & DEVELOPMENT CORP (CLASS A)................... 85 2,652 MURPHY OIL CORP................................................ 223 9,228 * NABORS INDUSTRIES, INC......................................... 317 5,875 * NATIONAL-OILWELL, INC.......................................... 121 2,788 * NEWFIELD EXPLORATION CO........................................ 99 4,100 NOBLE AFFILIATES, INC.......................................... 145 9,530 * NOBLE DRILLING CORP............................................ 324 1,100 * NUEVO ENERGY CO................................................ 17 26,757 OCCIDENTAL PETROLEUM CORP...................................... 710 12,300 OCEAN ENERGY, INC.............................................. 236 1,600 * OCEANEERING INTERNATIONAL, INC................................. 35 490 * OSCA, INC...................................................... 10 6,100 * PARKER DRILLING CO............................................. 23 1,000 PATINA OIL & GAS CORP.......................................... 28 4,900 * PATTERSON-UTI ENERGY, INC...................................... 114 5,600 PENNZOIL-QUAKER STATE CO....................................... 81 27,412 PHILLIPS PETROLEUM CO.......................................... 1,652 7,100 * PIONEER NATURAL RESOURCES CO................................... 137 1,700 * PLAINS RESOURCES, INC.......................................... 42 3,887 POGO PRODUCING CO.............................................. 102 9,500 * PRIDE INTERNATIONAL, INC....................................... 143 650 * PRIMA ENERGY CORP.............................................. 14 300 * PRIZE ENERGY CORP.............................................. 7 984 * PURE RESOURCES, INC............................................ 20 800 * PYR ENERGY CORP................................................ 2 3,492 * RANGE RESOURCES CORP........................................... 16 1,164 * REMINGTON OIL & GAS CORP....................................... 20 6,815 * ROWAN COS, INC................................................. 132 700 RPC, INC....................................................... 12 1,246 * SEACOR SMIT, INC............................................... 58 1,500 * SEITEL, INC.................................................... 20 3,628 * SMITH INTERNATIONAL, INC....................................... 195 1,366 * SPINNAKER EXPLORATION CO....................................... 56 2,100 ST. MARY LAND & EXPLORATION CO................................. 44 1,585 * STONE ENERGY CORP.............................................. 63 5,560 SUNOCO, INC.................................................... 208 3,300 * SUPERIOR ENERGY SERVICES, INC.................................. 29 1,700 * SWIFT ENERGY CO................................................ 34 2,600 * TESORO PETROLEUM CORP.......................................... 34 4,020 TIDEWATER, INC................................................. 136 2,200 * TOM BROWN, INC................................................. 59 486 * TOTAL FINA ELF S.A. WTS 08/05/03............................... 12 1,143 * TRANSMONTAIGNE, INC............................................ 6 B-35 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- ENERGY--(Continued) 26 * TRANSTEXAS GAS CORP WTS 06/30/02............................... $ 0 1,700 * TRICO MARINE SERVICES, INC..................................... 13 5,223 ULTRAMAR DIAMOND SHAMROCK CORP................................. 258 2,300 * UNIT CORP...................................................... 30 500 * UNIVERSAL COMPRESSION HOLDINGS, INC............................ 15 17,579 UNOCAL CORP.................................................... 634 4,489 VALERO ENERGY CORP............................................. 171 5,411 * VARCO INTERNATIONAL, INC....................................... 81 2,300 * VERITAS DGC, INC............................................... 43 3,500 VINTAGE PETROLEUM, INC......................................... 51 7,627 * WEATHERFORD INTERNATIONAL, INC................................. 284 2,192 * WESTPORT RESOURCES CORP........................................ 38 1,341 * W-H ENERGY SERVICES, INC....................................... 25 2,054 * XANSER CORP.................................................... 4 8,532 XTO ENERGY, INC................................................ 149 --------- TOTAL ENERGY................................................... 42,996 --------- FINANCIAL SERVICES--19.01% 630 1ST SOURCE CORP................................................ 13 2,000 21ST CENTURY INSURANCE GROUP................................... 39 5,855 A.G. EDWARDS, INC.............................................. 259 1,400 ACADIA REALTY TRUST............................................ 9 1,625 ADVANTA CORP (CLASS A)......................................... 16 1,600 * AFFILIATED MANAGERS GROUP, INC................................. 113 37,842 AFLAC, INC..................................................... 929 700 ALABAMA NATIONAL BANCORP....................................... 24 1,100 ALEXANDRIA REAL ESTATE EQUITIES, INC........................... 45 2,900 ALFA CORP...................................................... 65 415 * ALLEGHANY CORP................................................. 80 7,200 ALLIED CAPITAL CORP............................................ 187 3,924 ALLMERICA FINANCIAL CORP....................................... 175 51,812 ALLSTATE CORP.................................................. 1,746 5,100 AMB PROPERTY CORP.............................................. 133 6,554 AMBAC FINANCIAL GROUP, INC..................................... 379 1,900 AMCORE FINANCIAL, INC.......................................... 42 2,300 AMERICAN CAPITAL STRATEGIES LTD................................ 65 96,892 AMERICAN EXPRESS CO............................................ 3,458 3,000 AMERICAN FINANCIAL GROUP, INC.................................. 74 2,000 AMERICAN FINANCIAL HOLDINGS, INC............................... 51 166,663 AMERICAN INTERNATIONAL GROUP, INC.............................. 13,233 800 AMERICAN NATIONAL INSURANCE CO................................. 67 852 * AMERICAN PHYSICIANS CAPITAL, INC............................... 19 5,450 * AMERICREDIT CORP............................................... 172 7,797 * AMERITRADE HOLDINGS CORP (CLASS A)............................. 46 3,000 AMERUS GROUP CO................................................ 108 1,041 AMLI RESIDENTIAL PROPERTIES TRUST.............................. 26 26,448 AMSOUTH BANCORPORATION......................................... 500 3,237 b* ANC RENTAL CORP................................................ 0 1,400 ANCHOR BANCORP WISCONSIN, INC.................................. 25 3,270 ANNALY MORTGAGE MANAGEMENT, INC................................ 52 2,316 ANTHRACITE CAPITAL, INC........................................ 25 16,990 AON CORP....................................................... 603 4,825 APARTMENT INVESTMENT & MANAGEMENT CO (CLASS A)................. 221 12,009 ARCHSTONE-SMITH TRUST.......................................... 316 4,170 ARDEN REALTY, INC.............................................. 111 500 AREA BANCSHARES CORP........................................... 10 1,300 ARGONAUT GROUP, INC............................................ 25 465 ARROW FINANCIAL CORP........................................... 14 4,759 ASSOCIATED BANC-CORP........................................... 168 1,181 ASSOCIATED ESTATES REALTY CORP................................. 11 6,490 ASTORIA FINANCIAL CORP......................................... 172 4,460 AVALONBAY COMMUNITIES, INC..................................... 211 552 BALDWIN & LYONS, INC (CLASS B)................................. 14 400 BANCFIRST CORP................................................. 14 569 BANCFIRST OHIO CORP............................................ 14 6,000 BANCORPSOUTH, INC.............................................. 100 817 BANK MUTUAL CORP............................................... 12 SHARES VALUE (000) -------- ----------- 114,199 BANK OF AMERICA CORP........................................... $ 7,189 800 BANK OF GRANITE CORP........................................... 16 53,437 BANK OF NEW YORK CO, INC....................................... 2,180 84,770 BANK ONE CORP.................................................. 3,310 2,800 * BANK UNITED CORP (CONTINGENT PAYMENT RTS)...................... 0 2,100 BANKATLANTIC BANCORP, INC (CLASS A)............................ 19 11,058 BANKNORTH GROUP, INC........................................... 249 1,139 * BANKUNITED FINANCIAL CORP (CLASS A)............................ 17 777 BANNER CORP.................................................... 13 4,537 * BAY VIEW CAPITAL CORP.......................................... 33 32,884 BB&T CORP...................................................... 1,187 6,044 BEAR STEARNS COS, INC.......................................... 354 627 * BEAZER HOMES USA, INC.......................................... 46 1,323 BEDFORD PROPERTY INVESTORS, INC................................ 30 1,550 BERKLEY (W.R.) CORP............................................ 83 420 * BKF CAPITAL GROUP, INC......................................... 12 1,017 * BLACKROCK, INC................................................. 42 618 * BOK FINANCIAL CORP............................................. 19 859 BOSTON PRIVATE FINANCIAL HOLDINGS, INC......................... 19 5,090 BOSTON PROPERTIES, INC......................................... 193 1,400 BOYKIN LODGING CO.............................................. 11 1,933 BRANDYWINE REALTY TRUST........................................ 41 3,400 BRE PROPERTIES, INC (CLASS A).................................. 105 900 BROOKLINE BANCORP, INC......................................... 15 3,054 BROWN & BROWN, INC............................................. 83 700 BSB BANCORP, INC............................................... 17 1,694 BURNHAM PACIFIC PROPERTIES, INC................................ 7 2,616 CAMDEN PROPERTY TRUST.......................................... 96 1,218 CAPITAL AUTOMOTIVE REIT........................................ 24 400 CAPITAL CITY BANK GROUP, INC................................... 10 15,600 CAPITAL ONE FINANCIAL CORP..................................... 842 2,028 CAPITOL FEDERAL FINANCIAL...................................... 42 668 CAPITOL TRANSAMERICA CORP...................................... 11 650 CAPSTEAD MORTGAGE CORP......................................... 15 4,152 CARRAMERICA REALTY CORP........................................ 125 1,900 CASH AMERICA INTERNATIONAL, INC................................ 16 7,200 * CATELLUS DEVELOPMENT CORP...................................... 132 594 CATHAY BANCORP, INC............................................ 38 1,574 CBL & ASSOCIATES PROPERTIES, INC............................... 50 630 CCBT FINANCIAL COS, INC........................................ 15 938 * CCC INFORMATION SERVICES GROUP, INC............................ 6 1,535 CENTENNIAL BANCORP............................................. 11 1,600 CENTERPOINT PROPERTIES CORP.................................... 80 431 * CENTRAL COAST BANCORP.......................................... 9 1,178 CFS BANCORP, INC............................................... 17 78,513 CHARLES SCHWAB CORP............................................ 1,215 2,500 CHARTER MUNICIPAL MORTGAGE ACCEPTANCE CO....................... 41 16,289 CHARTER ONE FINANCIAL, INC..................................... 442 1,470 CHATEAU COMMUNITIES, INC....................................... 44 1,087 CHELSEA PROPERTY GROUP, INC.................................... 53 1,586 CHEMICAL FINANCIAL CORP........................................ 48 2,237 CHITTENDEN CORP................................................ 62 4,556 * CHOICEPOINT, INC............................................... 231 12,346 CHUBB CORP..................................................... 852 9,908 CINCINNATI FINANCIAL CORP...................................... 378 373,474 CITIGROUP, INC................................................. 18,853 3,321 CITIZENS BANKING CORP.......................................... 109 1,500 * CITIZENS, INC.................................................. 19 700 CITY BANK...................................................... 17 1,237 * CITY HOLDING CO................................................ 15 2,756 CITY NATIONAL CORP............................................. 129 713 * CLARK/BARDES, INC.............................................. 18 2,100 * CNA FINANCIAL CORP............................................. 61 1,100 CNA SURETY CORP................................................ 17 1,300 * COAST FEDERAL LITIGATION (CONTINGENT PAYMENT RTS).............. 0 300 COASTAL BANCORP, INC........................................... 9 450 COBIZ, INC..................................................... 6 8,312 COLONIAL BANCGROUP, INC........................................ 117 B-36 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- FINANCIAL SERVICES--(Continued) 1,112 COLONIAL PROPERTIES TRUST...................................... $ 35 961 * COLUMBIA BANKING SYSTEM, INC................................... 13 8,500 b* COMDISCO, INC.................................................. 4 12,883 COMERICA, INC.................................................. 738 4,170 COMMERCE BANCORP, INC.......................................... 164 4,793 COMMERCE BANCSHARES, INC....................................... 187 1,800 COMMERCE GROUP, INC............................................ 68 3,650 COMMERCIAL FEDERAL CORP........................................ 86 2,501 COMMERCIAL NET LEASE REALTY, INC............................... 33 635 COMMONWEALTH BANCORP, INC...................................... 14 721 COMMUNITY BANK SYSTEM, INC..................................... 19 510 COMMUNITY BANKS, INC........................................... 14 2,633 COMMUNITY FIRST BANKSHARES, INC................................ 68 757 COMMUNITY TRUST BANCORP, INC................................... 18 9,286 COMPASS BANCSHARES, INC........................................ 263 900 * COMPUCREDIT CORP............................................... 11 823 CONNECTICUT BANCSHARES, INC.................................... 21 21,196 * CONSECO, INC................................................... 95 2,900 CORNERSTONE REALTY INCOME TRUST, INC........................... 33 600 CORPORATE OFFICE PROPERTIES TRUST.............................. 7 1,800 * CORRECTIONS CORP OF AMERICA.................................... 33 700 CORUS BANKSHARES, INC.......................................... 32 8,829 COUNTRYWIDE CREDIT INDUSTRIES, INC............................. 362 2,641 COUSINS PROPERTIES, INC........................................ 64 500 CPB, INC....................................................... 15 2,700 CRAWFORD & CO (CLASS B)........................................ 32 1,100 * CREDIT ACCEPTANCE CORP......................................... 10 6,400 CRESCENT REAL ESTATE EQUITIES CO............................... 116 400 * CRESECENT OPERATING, INC....................................... 0 1,100 * CRESTLINE CAPITAL CORP......................................... 34 1,548 CROWN AMERICAN REALTY TRUST.................................... 12 1,500 * CSK AUTO CORP.................................................. 15 3,700 CULLEN/FROST BANKERS, INC...................................... 114 220 CURTISS-WRIGHT CORP (CLASS B).................................. 10 1,500 CVB FINANCIAL CORP............................................. 35 952 DELPHI FINANCIAL GROUP, INC (CLASS A).......................... 32 3,667 DEVELOPERS DIVERSIFIED REALTY CORP............................. 70 6,287 DIME BANCORP, INC.............................................. 227 11,800 * DIME BANCORP, INC (LITIGATION TRACKING WTS).................... 2 1,093 DIME COMMUNITY BANCSHARES...................................... 31 2,700 DORAL FINANCIAL CORP........................................... 84 1,494 DOWNEY FINANCIAL CORP.......................................... 62 9,480 DUKE REALTY CORP............................................... 231 21,285 * E*TRADE GROUP, INC............................................. 218 1,700 EAST WEST BANCORP, INC......................................... 44 1,200 EASTGROUP PROPERTIES, INC...................................... 28 4,400 EATON VANCE CORP............................................... 156 1,000 * ELECTRO RENT CORP.............................................. 13 1,100 ENTERTAINMENT PROPERTIES TRUST................................. 21 30,002 EQUITY OFFICE PROPERTIES TRUST................................. 902 19,586 EQUITY RESIDENTIAL PROPERTIES TRUST............................ 562 1,423 ERIE INDEMNITY CO (CLASS A).................................... 55 1,072 ESSEX PROPERTY TRUST, INC...................................... 53 800 F & M BANCORP.................................................. 20 72,630 FANNIE MAE..................................................... 5,774 511 FARMERS CAPITAL BANK CORP...................................... 19 881 FBL FINANCIAL GROUP, INC (CLASS A)............................. 15 591 * FEDERAL AGRICULTURAL MORTGAGE CORP (CLASS C)................... 24 2,750 FEDERAL REALTY INVESTMENT TRUST................................ 63 5,713 FEDERATED INVESTORS, INC (CLASS B)............................. 182 1,153 FIDELITY BANKSHARES, INC....................................... 18 6,176 FIDELITY NATIONAL FINANCIAL, INC............................... 153 35,707 FIFTH THIRD BANCORP............................................ 2,190 781 * FINANCIAL FEDERAL CORP......................................... 24 606 FINANCIAL INSTITUTIONS, INC.................................... 14 3,946 * FINOVA GROUP, INC.............................................. 2 4,978 FIRST AMERICAN CORP............................................ 93 SHARES VALUE (000) -------- ----------- 1,500 FIRST BANCORP (PUERTO RICO).................................... $ 43 480 FIRST BANCORP NORTH CAROLINA................................... 11 600 FIRST BUSEY CORP............................................... 13 2,300 FIRST CHARTER CORP............................................. 39 400 FIRST CITIZENS BANCSHARES, INC (CLASS A)....................... 39 4,300 FIRST COMMONWEALTH FINANCIAL CORP.............................. 50 588 FIRST COMMUNITY BANCSHARES..................................... 17 468 FIRST ESSEX BANCORP, INC....................................... 13 1,100 FIRST FEDERAL CAPITAL CORP..................................... 17 2,531 FIRST FINANCIAL BANCORP........................................ 45 875 FIRST FINANCIAL BANKSHARES, INC................................ 26 500 FIRST FINANCIAL CORP (INDIANA)................................. 22 1,000 FIRST FINANCIAL HOLDINGS, INC.................................. 24 800 FIRST INDIANA CORP............................................. 18 520 FIRST MERCHANTS CORP........................................... 12 3,625 FIRST MIDWEST BANCORP, INC..................................... 106 700 FIRST NIAGARA FINANCIAL GROUP, INC............................. 12 1,127 FIRST PLACE FINANCIAL CORP..................................... 18 777 * FIRST REPUBLIC BANK............................................ 19 2,064 FIRST SENTINEL BANCORP, INC.................................... 26 9,215 FIRST TENNESSEE NATIONAL CORP.................................. 334 3,434 FIRST VIRGINIA BANKS, INC...................................... 174 1,200 * FIRSTFED FINANCIAL CORP........................................ 31 5,649 FIRSTMERIT CORP................................................ 153 300 FLAGSTAR BANCORP, INC.......................................... 6 76,411 FLEETBOSTON FINANCIAL CORP..................................... 2,789 783 FLUSHING FINANCIAL CORP........................................ 14 1,785 FNB CORP....................................................... 47 12,381 FRANKLIN RESOURCES, INC........................................ 437 50,396 FREDDIE MAC.................................................... 3,296 4,100 FREMONT GENERAL CORP........................................... 32 2,300 * FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.......................... 12 1,300 FRONTIER FINANCIAL CORP........................................ 34 400 * FRONTLINE CAPITAL GROUP, INC................................... 0 5,920 FULTON FINANCIAL CORP.......................................... 129 400 * GABELLI ASSET MANAGEMENT, INC (CLASS A)........................ 17 1,700 GABLES RESIDENTIAL TRUST....................................... 50 6,100 GALLAGHER (ARTHUR J.) & CO..................................... 210 3,203 * GARTNER, INC (CLASS A)......................................... 37 2,624 * GARTNER, INC (CLASS B)......................................... 29 582 GBC BANCORP.................................................... 17 3,800 GENERAL GROWTH PROPERTIES, INC................................. 147 690 GERMAN AMERICAN BANCORP........................................ 11 992 GLACIER BANCORP, INC........................................... 21 1,606 GLENBOROUGH REALTY TRUST, INC.................................. 31 1,900 GLIMCHER REALTY TRUST.......................................... 36 1,700 GOLD BANC CORP, INC............................................ 12 5,200 GOLDEN STATE BANCORP, INC...................................... 136 3,400 * GOLDEN STATE BANCORP, INC (LITIGATION TRACKING WTS 12/31/60)... 4 9,198 GOLDEN WEST FINANCIAL CORP..................................... 541 15,723 GOLDMAN SACHS GROUP, INC....................................... 1,458 500 GREAT AMERICAN FINANCIAL RESOURCES, INC........................ 9 1,146 GREAT LAKES REIT, INC.......................................... 18 416 GREAT SOUTHERN BANCORP, INC.................................... 13 3,646 GREATER BAY BANCORP............................................ 104 6,162 GREENPOINT FINANCIAL CORP...................................... 220 586 HANCOCK HOLDING CO............................................. 25 1,600 HARBOR FLORIDA BANCSHARES, INC................................. 27 2,139 HARLEYSVILLE GROUP, INC........................................ 51 1,400 HARLEYSVILLE NATIONAL CORP..................................... 33 17,274 HARTFORD FINANCIAL SERVICES GROUP, INC......................... 1,085 3,600 HCC INSURANCE HOLDINGS, INC.................................... 99 3,800 HEALTH CARE PROPERTY INVESTORS, INC............................ 138 2,301 HEALTH CARE REIT, INC.......................................... 56 3,000 HEALTHCARE REALTY TRUST, INC................................... 84 11,538 HIBERNIA CORP (CLASS A)........................................ 205 4,000 HIGHWOODS PROPERTIES, INC...................................... 104 B-37 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- FINANCIAL SERVICES--(Continued) 1,000 HILB, ROGAL & HAMILTON CO...................................... $ 56 1,387 HOME PROPERTIES OF NEW YORK, INC............................... 44 4,230 HOOPER HOLMES, INC............................................. 38 3,000 HORACE MANN EDUCATORS CORP..................................... 64 4,141 HOSPITALITY PROPERTIES TRUST................................... 122 16,649 * HOST MARRIOTT CORP............................................. 150 33,301 HOUSEHOLD INTERNATIONAL, INC................................... 1,929 9,800 HRPT PROPERTIES TRUST.......................................... 85 3,000 HUDSON CITY BANCORP, INC....................................... 79 1,120 HUDSON RIVER BANCORP, INC...................................... 25 3,353 HUDSON UNITED BANCORP.......................................... 96 18,200 HUNTINGTON BANCSHARES, INC..................................... 313 409 IBERIABANK CORP................................................ 11 4,300 INDEPENDENCE COMMUNITY BANK CORP............................... 98 878 INDEPENDENT BANK CORP (MASSACHUSETTS).......................... 19 882 INDEPENDENT BANK CORP (MICHIGAN)............................... 25 4,412 * INDYMAC BANCORP, INC........................................... 103 1,794 INNKEEPERS U.S.A. TRUST........................................ 18 1,033 * INSIGNIA FINANCIAL GROUP, INC.................................. 11 2,346 * INSTINET GROUP, INC............................................ 24 600 * INSURANCE AUTO AUCTIONS, INC................................... 9 1,200 INTEGRA BANK CORP.............................................. 25 1,223 INTERNATIONAL BANCSHARES CORP.................................. 52 3,514 * INVESTMENT TECHNOLOGY GROUP, INC............................... 137 2,300 INVESTORS FINANCIAL SERVICES CORP.............................. 152 1,532 INVESTORS REAL ESTATE TRUST.................................... 14 2,200 IRT PROPERTY CO................................................ 23 672 IRWIN FINANCIAL CORP........................................... 11 6,378 ISTAR FINANCIAL, INC........................................... 159 1,736 * ITT EDUCATIONAL SERVICES, INC.................................. 64 2,500 JDN REALTY CORP................................................ 31 1,729 JEFFERIES GROUP, INC (NEW)..................................... 73 10,954 JEFFERSON-PILOT CORP........................................... 507 21,881 JOHN HANCOCK FINANCIAL SERVICES, INC........................... 904 750 JOHN NUVEEN CO (CLASS A)....................................... 40 2,100 * JONES LANG LASALLE, INC........................................ 38 144,217 JP MORGAN CHASE & CO........................................... 5,242 900 JP REALTY, INC................................................. 21 600 KANSAS CITY LIFE INSURANCE CO.................................. 22 30,718 KEYCORP........................................................ 748 400 KEYSTONE PROPERTY TRUST........................................ 5 1,860 KILROY REALTY CORP............................................. 49 6,049 KIMCO REALTY CORP.............................................. 198 6,700 * KNIGHT TRADING GROUP, INC...................................... 74 2,000 KOGER EQUITY, INC.............................................. 33 1,374 KRAMONT REALTY TRUST........................................... 20 9,226 * LA QUINTA CORP (PAIRED)........................................ 53 3,200 * LABRANCHE & CO, INC............................................ 110 847 LAKELAND BANCORP, INC.......................................... 14 1,329 LANDAMERICA FINANCIAL GROUP, INC............................... 38 4,611 LEGG MASON, INC................................................ 230 17,229 LEHMAN BROTHERS HOLDINGS, INC.................................. 1,151 2,588 LEUCADIA NATIONAL CORP......................................... 75 1,400 LEXINGTON CORPORATE PROPERTIES TRUST........................... 22 1,200 LIBERTY CORP................................................... 49 13,730 LINCOLN NATIONAL CORP.......................................... 667 1,700 LNR PROPERTY CORP.............................................. 53 1,388 * LOCAL FINANCIAL CORP........................................... 19 6,030 M & T BANK CORP................................................ 439 2,300 MACERICH CO.................................................... 61 3,068 MACK-CALI REALTY CORP.......................................... 95 1,342 MAF BANCORP, INC............................................... 40 700 MAIN STREET BANKS, INC......................................... 11 1,025 MANUFACTURED HOME COMMUNITIES, INC............................. 32 600 * MARKEL CORP.................................................... 108 19,903 MARSH & MCLENNAN COS, INC...................................... 2,139 7,739 MARSHALL & ILSLEY CORP......................................... 490 SHARES VALUE (000) -------- ----------- 410 * MB FINANCIAL, INC.............................................. $ 11 10,767 MBIA, INC...................................................... 577 51,946 MBNA CORP...................................................... 1,828 900 MEDALLION FINANCIAL CORP....................................... 7 800 MEDFORD BANCORP, INC........................................... 17 34,412 MELLON FINANCIAL CORP.......................................... 1,295 5,055 MERCANTILE BANKSHARES CORP..................................... 218 1,888 MERCURY GENERAL CORP........................................... 82 2,700 MERISTAR HOSPITALITY CORP...................................... 38 261 * MERITAGE CORP.................................................. 13 60,916 MERRILL LYNCH & CO, INC........................................ 3,175 21,356 METLIFE, INC................................................... 677 2,453 METRIS COS, INC................................................ 63 22 * MFN FINANCIAL CORP SERIES A WTS 03/23/02....................... 0 22 * MFN FINANCIAL CORP SERIES B WTS 03/23/03....................... 0 22 * MFN FINANCIAL CORP SERIES C WTS 03/23/04....................... 0 6,810 MGIC INVESTMENT CORP........................................... 420 700 MICROFINANCIAL, INC............................................ 7 936 MID ATLANTIC REALTY TRUST...................................... 15 1,033 MID-AMERICA APARTMENT COMMUNITIES, INC......................... 27 700 MIDAMERICA BANCORP............................................. 23 289 MIDLAND CO..................................................... 13 1,600 MID-STATE BANCSHARES........................................... 26 400 MIDWEST BANC HOLDINGS, INC..................................... 9 1,233 MILLS CORP..................................................... 33 1,119 MISSION WEST PROPERTIES, INC................................... 14 400 MISSISSIPPI VALLEY BANCSHARES, INC............................. 16 3,500 MONY GROUP, INC................................................ 121 79,605 MORGAN STANLEY DEAN WITTER & CO................................ 4,453 44,006 NATIONAL CITY CORP............................................. 1,287 14,792 NATIONAL COMMERCE FINANCIAL CORP............................... 374 800 NATIONAL HEALTH INVESTORS, INC................................. 12 1,339 NATIONAL PENN BANCSHARES, INC.................................. 29 100 * NATIONAL WESTERN LIFE INSURANCE CO (CLASS A)................... 11 1,800 NATIONWIDE FINANCIAL SERVICES, INC (CLASS A)................... 75 3,400 NATIONWIDE HEALTH PROPERTIES, INC.............................. 64 386 NBC CAPITAL CORP............................................... 12 1,800 NBT BANCORP, INC............................................... 26 1,900 * NETBANK, INC................................................... 20 4,225 NEUBERGER BERMAN, INC.......................................... 185 500 NEW CENTURY FINANCIAL CORP..................................... 7 6,574 NEW PLAN EXCEL REALTY TRUST.................................... 125 5,940 NEW YORK COMMUNITY BANCORP, INC................................ 136 2,600 * NEXTCARD, INC.................................................. 1 11,615 NORTH FORK BANCORPORATION, INC................................. 372 14,359 NORTHERN TRUST CORP............................................ 865 1,100 NORTHWEST BANCORP, INC......................................... 13 681 OCEANFIRST FINANCIAL CORP...................................... 16 2,600 * OCWEN FINANCIAL CORP........................................... 22 4,000 * OHIO CASUALTY CORP............................................. 64 4,334 OLD NATIONAL BANCORP........................................... 109 8,629 OLD REPUBLIC INTERNATIONAL CORP................................ 242 425 OLD SECOND BANCORP, INC........................................ 17 500 OMEGA FINANCIAL CORP........................................... 16 800 ORIENTAL FINANCIAL GROUP, INC.................................. 15 1,900 PACIFIC CAPITAL BANCORP........................................ 53 5,800 PACIFIC CENTURY FINANCIAL CORP................................. 150 1,500 * PACIFIC GULF PROPERTIES LIQUID TRUST........................... 3 950 PACIFIC NORTHWEST BANCORP...................................... 19 1,702 PAN PACIFIC RETAIL PROPERTIES, INC............................. 49 845 PARK NATIONAL CORP............................................. 78 800 PARKWAY PROPERTIES, INC........................................ 27 434 PENNFED FINANCIAL SERVICES, INC................................ 11 1,100 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST...................... 26 1,841 PEOPLE'S BANK.................................................. 39 442 PEOPLES HOLDING CO............................................. 16 1,100 PFF BANCORP, INC............................................... 30 500 * PHILADELPHIA CONSOLIDATED HOLDING CORP......................... 19 B-38 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- FINANCIAL SERVICES--(Continued) 900 * PICO HOLDINGS, INC............................................. $ 11 1,000 PMA CAPITAL CORP (CLASS A)..................................... 19 3,250 PMI GROUP, INC................................................. 218 20,576 PNC FINANCIAL SERVICES GROUP, INC.............................. 1,156 9,922 POPULAR, INC................................................... 289 494 PORT FINANCIAL CORP............................................ 13 2,901 POST PROPERTIES, INC........................................... 103 2,334 PRENTISS PROPERTIES TRUST...................................... 64 1,600 PRESIDENTIAL LIFE CORP......................................... 33 426 PRIME GROUP REALTY TRUST....................................... 4 1,317 * PROASSURANCE CORP.............................................. 23 4,515 PROGRESSIVE CORP............................................... 674 9,033 PROLOGIS TRUST................................................. 194 1,250 PROMISTAR FINANCIAL CORP....................................... 31 800 PROSPERITY BANCSHARES, INC..................................... 22 4,554 PROTECTIVE LIFE CORP........................................... 132 200 PROVIDENT BANCORP, INC......................................... 6 1,916 PROVIDENT BANKSHARES CORP...................................... 47 2,164 PROVIDENT FINANCIAL GROUP, INC................................. 57 20,326 * PROVIDIAN FINANCIAL CORP....................................... 72 832 PS BUSINESS PARKS, INC......................................... 26 6,629 PUBLIC STORAGE, INC............................................ 221 100 * QUAKER CITY BANCORP, INC....................................... 3 800 R & G FINANCIAL CORP (CLASS B)................................. 14 5,848 RADIAN GROUP, INC.............................................. 251 2,764 RAYMOND JAMES FINANCIAL, INC................................... 98 2,400 REALTY INCOME CORP............................................. 71 2,641 RECKSON ASSOCIATES REALTY CORP................................. 62 411 REDWOOD TRUST, INC............................................. 10 1,699 REGENCY CENTERS CORP........................................... 47 16,576 REGIONS FINANCIAL CORP......................................... 496 1,325 REINSURANCE GROUP OF AMERICA, INC.............................. 44 3,569 REPUBLIC BANCORP, INC.......................................... 49 200 REPUBLIC BANCORP, INC (KENTUCKY) (CLASS A)..................... 3 1,126 RESOURCE AMERICA, INC (CLASS A)................................ 11 1,900 RFS HOTEL INVESTORS, INC....................................... 22 997 RIGGS NATIONAL CORP............................................ 14 491 RLI CORP....................................................... 22 6,650 ROSLYN BANCORP, INC............................................ 116 4,174 ROUSE CO....................................................... 122 1,730 S & T BANCORP, INC............................................. 42 403 S.Y. BANCORP, INC.............................................. 13 9,216 SAFECO CORP.................................................... 287 1,200 SANDY SPRING BANCORP, INC...................................... 38 500 SANTANDER BANCORP.............................................. 10 800 SAUL CENTERS, INC.............................................. 17 700 SCPIE HOLDINGS, INC............................................ 20 300 SEACOAST BANKING CORP.......................................... 14 1,600 SEACOAST FINANCIAL SERVICES CORP............................... 27 637 SECOND BANCORP, INC............................................ 14 4,790 * SECURITY CAPITAL GROUP, INC (CLASS B).......................... 122 5,041 SEI INVESTMENTS CO............................................. 227 1,900 SELECTIVE INSURANCE GROUP, INC................................. 41 1,550 SENIOR HOUSING PROPERTIES TRUST................................ 22 3,200 * SILICON VALLEY BANCSHARES...................................... 86 533 SIMMONS FIRST NATIONAL CORP (CLASS A).......................... 17 9,188 SIMON PROPERTY GROUP, INC...................................... 269 6,197 SKY FINANCIAL GROUP, INC....................................... 126 1,800 SL GREEN REALTY CORP........................................... 55 3,968 * SOUNDVIEW TECHNOLOGY GROUP, INC................................ 9 3,100 SOUTH FINANCIAL GROUP, INC..................................... 55 24,818 SOUTHTRUST CORP................................................ 612 1,893 * SOUTHWEST BANCORP OF TEXAS, INC................................ 57 17,860 SOVEREIGN BANCORP, INC......................................... 219 1,000 SOVRAN SELF STORAGE, INC....................................... 31 548 ST. FRANCIS CAPITAL CORP....................................... 13 15,013 ST. PAUL COS, INC.............................................. 660 SHARES VALUE (000) -------- ----------- 2,200 STANCORP FINANCIAL GROUP, INC.................................. $ 104 14,293 STARWOOD HOTELS & RESORTS WORLDWIDE, INC....................... 427 1,200 STATE AUTO FINANCIAL CORP...................................... 19 23,652 STATE STREET CORP.............................................. 1,236 4,104 STATEN ISLAND BANCORP, INC..................................... 67 635 STERLING BANCORP............................................... 19 2,400 STERLING BANCSHARES, INC....................................... 30 823 STERLING FINANCIAL CORP (PENNSYLVANIA)......................... 20 900 * STEWART INFORMATION SERVICES CORP.............................. 18 16,084 STILWELL FINANCIAL, INC........................................ 438 1,195 STORAGE U.S.A., INC............................................ 50 300 STUDENT LOAN CORP.............................................. 24 434 SUFFOLK BANCORP................................................ 24 1,991 SUMMIT PROPERTIES, INC......................................... 50 1,094 SUN COMMUNITIES, INC........................................... 41 18,021 SUNTRUST BANKS, INC............................................ 1,130 2,850 SUSQUEHANNA BANCSHARES, INC.................................... 59 1,151 SWS GROUP, INC................................................. 30 17,862 SYNOVUS FINANCIAL CORP......................................... 447 1,597 * SYNTROLEUM CORP................................................ 11 7,603 T ROWE PRICE GROUP, INC........................................ 264 2,112 TAUBMAN CENTERS, INC........................................... 31 5,687 TCF FINANCIAL CORP............................................. 273 1,053 TEXAS REGIONAL BANCSHARES, INC (CLASS A)....................... 40 2,390 THORNBURG MORTGAGE, INC........................................ 47 480 TOMPKINS TRUSTCO, INC.......................................... 19 9,020 TORCHMARK CORP................................................. 355 1,037 TOWN & COUNTRY TRUST........................................... 22 1,900 * TRAMMELL CROW CO............................................... 22 1,541 TRANSATLANTIC HOLDINGS, INC.................................... 140 498 * TRIAD GUARANTY, INC............................................ 18 600 TROY FINANCIAL CORP............................................ 15 1,400 TRUST CO OF NEW JERSEY......................................... 35 5,102 TRUSTCO BANK CORP NY........................................... 64 3,272 TRUSTMARK CORP................................................. 79 141,863 U.S. BANCORP................................................... 2,969 1,311 U.S. RESTAURANT PROPERTIES, INC................................ 19 600 U.S.B. HOLDING CO, INC......................................... 10 1,400 UCBH HOLDINGS, INC............................................. 40 2,800 * UICI........................................................... 38 1,312 UMB FINANCIAL CORP............................................. 52 1,057 UMPQUA HOLDINGS CORP........................................... 14 766 UNB CORP/OHIO.................................................. 14 9,953 UNION PLANTERS CORP............................................ 449 3,815 UNIONBANCAL CORP............................................... 145 3,044 UNITED BANKSHARES, INC......................................... 88 2,100 UNITED COMMUNITY FINANCIAL CORP................................ 15 7,226 UNITED DOMINION REALTY TRUST, INC.............................. 104 463 UNITED FIRE & CASUALTY CO...................................... 13 900 UNITED NATIONAL BANCORP........................................ 22 2,870 * UNITED RENTALS, INC............................................ 65 5,700 * UNITEDGLOBALCOM, INC (CLASS A)................................. 29 3,400 UNITRIN, INC................................................... 134 2,934 * UNIVERSAL AMERICAN FINANCIAL CORP.............................. 20 658 UNIVERSAL HEALTH REALTY INCOME TRUST........................... 15 15,593 UNUMPROVIDENT CORP............................................. 413 11,546 USA EDUCATION, INC............................................. 970 5,702 VALLEY NATIONAL BANCORP........................................ 188 1,790 VESTA INSURANCE GROUP, INC..................................... 14 5,300 VORNADO REALTY TRUST........................................... 220 1,900 W HOLDING CO, INC.............................................. 31 98,796 WACHOVIA CORP.................................................. 3,100 5,615 WADDELL & REED FINANCIAL, INC (CLASS A)........................ 181 4,146 WASHINGTON FEDERAL, INC........................................ 107 63,531 WASHINGTON MUTUAL, INC......................................... 2,079 2,800 WASHINGTON REAL ESTATE INVESTMENT TRUST........................ 70 881 WASHINGTON TRUST BANCORP, INC.................................. 17 2,558 WAYPOINT FINANCIAL CORP........................................ 39 B-39 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- FINANCIAL SERVICES--(Continued) 3,600 WEBSTER FINANCIAL CORP......................................... $ 114 2,063 WEINGARTEN REALTY INVESTORS.................................... 99 123,057 WELLS FARGO & CO............................................... 5,347 1,400 WESBANCO, INC.................................................. 30 110 WESCO FINANCIAL CORP........................................... 35 1,194 WEST COAST BANCORP............................................. 17 2,416 WESTAMERICA BANCORP............................................ 96 670 WESTCORP....................................................... 13 611 * WFS FINANCIAL, INC............................................. 15 1,900 WHITNEY HOLDING CORP........................................... 83 2,082 WILMINGTON TRUST CORP.......................................... 132 1,029 WINSTON HOTELS, INC............................................ 8 496 WINTRUST FINANCIAL CORP........................................ 15 300 * WORLD ACCEPTANCE CORP.......................................... 2 620 WSFS FINANCIAL CORP............................................ 11 10,971 * WYNDHAM INTERNATIONAL, INC (CLASS A)........................... 6 700 ZENITH NATIONAL INSURANCE CORP................................. 20 6,700 ZIONS BANCORP.................................................. 352 --------- TOTAL FINANCIAL SERVICES....................................... 158,389 --------- HEALTH CARE--15.33% 400 * 3 DIMENSIONAL PHARMACEUTICALS, INC............................. 3 718 * AAIPHARMA, INC................................................. 18 112,676 ABBOTT LABORATORIES............................................ 6,282 5,644 * ABGENIX, INC................................................... 190 1,100 * ABIOMED, INC................................................... 17 1,886 * ACCREDO HEALTH, INC............................................ 75 2,540 * ACLARA BIOSCIENCES, INC........................................ 13 2,249 * ADOLOR CORP.................................................... 40 490 * ADVANCED NEUROMODULATION SYSTEMS, INC.......................... 17 4,700 * ADVANCED TISSUE SCIENCES, INC.................................. 20 6,676 * ADVANCEPCS..................................................... 196 10,281 AETNA, INC (NEW)............................................... 339 2,838 * AFFYMETRIX, INC................................................ 107 1,264 * AKSYS LTD...................................................... 6 1,500 * ALBANY MOLECULAR RESEARCH, INC................................. 40 1,100 * ALEXION PHARMACEUTICALS, INC................................... 27 500 * ALIGN TECHNOLOGY, INC.......................................... 2 4,000 * ALKERMES, INC.................................................. 105 9,511 ALLERGAN, INC.................................................. 714 1,800 * ALLSCRIPTS HEALTHCARE SOLUTIONS, INC........................... 6 2,200 ALPHARMA, INC (CLASS A)........................................ 58 811 * AMERICAN HEALTHWAYS, INC....................................... 26 95,805 AMERICAN HOME PRODUCTS CORP.................................... 5,879 2,243 * AMERICAN MEDICAL SYSTEMS HOLDINGS, INC......................... 46 2,013 * AMERIPATH, INC................................................. 65 7,137 AMERISOURCEBERGEN CORP......................................... 454 75,876 * AMGEN, INC..................................................... 4,282 1,426 * AMSURG CORP.................................................... 39 4,125 * AMYLIN PHARMACEUTICALS, INC.................................... 38 4,275 * ANDRX CORP..................................................... 301 986 * ANTIGENICS, INC................................................ 16 1,100 * APHTON CORP.................................................... 16 7,648 * APOGENT TECHNOLOGIES, INC...................................... 197 15,396 APPLERA CORP (APPLIED BIOSYSTEMS GROUP)........................ 605 4,715 * APPLERA CORP (CELERA GENOMICS GROUP)........................... 126 1,186 * APPLIED MOLECULAR EVOLUTION.................................... 15 3,000 * APRIA HEALTHCARE GROUP, INC.................................... 75 1,293 * ARENA PHARMACEUTICALS, INC..................................... 16 1,800 * ARIAD PHARMACEUTICALS, INC..................................... 10 1,404 * ARQULE, INC.................................................... 24 1,100 * ARRAY BIOPHARMA, INC........................................... 16 800 ARROW INTERNATIONAL, INC....................................... 32 1,500 * ARTHROCARE CORP................................................ 27 200 * ASPECT MEDICAL SYSTEMS, INC.................................... 2 1,405 * ATRIX LABORATORIES, INC........................................ 29 1,600 * ATS MEDICAL, INC............................................... 8 SHARES VALUE (000) -------- ----------- 4,218 * AVANIR PHARMACEUTICALS (CLASS A)............................... $ 18 4,300 * AVANT IMMUNOTHERAPEUTICS, INC.................................. 17 1,100 * AVI BIOPHARMA, INC............................................. 12 1,400 * AVIGEN, INC.................................................... 16 2,000 * AVIRON......................................................... 99 3,471 BARD (C.R.), INC............................................... 224 1,763 * BARR LABORATORIES, INC......................................... 140 3,900 BAUSCH & LOMB, INC............................................. 147 42,846 BAXTER INTERNATIONAL, INC...................................... 2,298 4,085 BECKMAN COULTER, INC........................................... 181 18,782 BECTON DICKINSON & CO.......................................... 623 7,027 * BEVERLY ENTERPRISES, INC....................................... 60 10,786 * BIOGEN, INC.................................................... 619 1,500 * BIOMARIN PHARMACEUTICAL, INC................................... 20 19,584 BIOMET, INC.................................................... 605 1,100 * BIOPURE CORP................................................... 16 600 * BIO-RAD LABORATORIES, INC (CLASS A)............................ 38 920 * BIOSITE, INC................................................... 17 200 * BIOSPHERE MEDICAL, INC......................................... 2 4,200 * BIO-TECHNOLOGY GENERAL CORP.................................... 35 600 * BONE CARE INTERNATIONAL, INC................................... 10 500 * BORON, LEPORE & ASSOCIATES, INC................................ 7 22,926 * BOSTON SCIENTIFIC CORP......................................... 553 140,497 BRISTOL-MYERS SQUIBB CO........................................ 7,165 1,024 * BRITESMILE, INC................................................ 5 3,349 * BRUKER DALTONICS, INC.......................................... 55 1,480 * CALIPER TECHNOLOGIES CORP...................................... 23 32,707 CARDINAL HEALTH, INC........................................... 2,115 2,300 * CARDIODYNAMICS INTERNATIONAL CORP.............................. 15 16,915 * CAREMARK RX, INC............................................... 276 5,500 * CELGENE CORP................................................... 176 2,500 * CELL GENESYS, INC.............................................. 58 1,900 * CELL PATHWAYS, INC............................................. 13 2,500 * CELL THERAPEUTICS, INC......................................... 60 3,277 * CEPHALON, INC.................................................. 248 1,820 * CERNER CORP.................................................... 91 800 * CERUS CORP..................................................... 37 3,000 * CHARLES RIVER LABORATORIES INTERNATIONAL, INC.................. 100 6,324 * CHIRON CORP.................................................... 277 10,684 CIGNA CORP..................................................... 990 1,065 * CIMA LABS, INC................................................. 38 1,600 * CIPHERGEN BIOSYSTEMS, INC...................................... 13 400 * CLOSURE MEDICAL CORP........................................... 9 600 * COBALT CORP.................................................... 4 2,000 * COHERENT, INC.................................................. 62 1,800 * COLUMBIA LABORATORIES, INC..................................... 6 3,253 * COMMUNITY HEALTH SYSTEMS....................................... 83 4,652 * COMPUTERIZED THERMAL IMAGING, INC.............................. 7 600 * CONCEPTUS, INC................................................. 14 1,750 * CONMED CORP.................................................... 35 2,200 * CONNETICS CORP................................................. 26 1,009 COOPER COS, INC................................................ 50 3,800 * COR THERAPEUTICS, INC.......................................... 91 3,003 * CORIXA CORP.................................................... 45 500 * CORVEL CORP.................................................... 16 4,300 * COVANCE, INC................................................... 98 4,600 * COVENTRY HEALTH CARE, INC...................................... 92 1,100 * CRYOLIFE, INC.................................................. 33 1,951 * CUBIST PHARMACEUTICALS, INC.................................... 70 2,974 * CURAGEN CORP................................................... 67 2,310 * CURIS, INC..................................................... 13 1,400 * CV THERAPEUTICS, INC........................................... 73 1,400 * CYBERONICS, INC................................................ 37 2,200 * CYGNUS, INC.................................................... 12 5,700 * CYTOGEN CORP................................................... 17 8,400 * CYTYC CORP..................................................... 219 800 DATASCOPE CORP................................................. 27 6,100 * DAVITA, INC.................................................... 149 B-40 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- HEALTH CARE--(Continued) 2,233 * DECODE GENETICS, INC........................................... $ 22 800 * DELTAGEN, INC.................................................. 7 1,118 * DENDREON CORP.................................................. 11 2,400 * DENDRITE INTERNATIONAL, INC.................................... 34 3,300 DENTSPLY INTERNATIONAL, INC.................................... 166 1,600 DIAGNOSTIC PRODUCTS CORP....................................... 70 636 * DIANON SYSTEMS, INC............................................ 39 800 * DIGENE CORP.................................................... 24 1,762 * DIVERSA CORP................................................... 25 1,388 * DURECT CORP.................................................... 16 1,000 * DUSA PHARMACEUTICALS, INC...................................... 8 700 * DVI, INC....................................................... 12 1,408 * DYAX CORP...................................................... 15 400 * DYNACQ INTERNATIONAL, INC...................................... 9 3,200 * ECLIPSYS CORP.................................................. 54 1,457 * EDEN BIOSCIENCE CORP........................................... 7 4,240 * EDWARDS LIFESCIENCES CORP...................................... 117 1,100 * EMISPHERE TECHNOLOGIES, INC.................................... 35 1,307 * ENDO PHARMACEUTICALS HOLDINGS, INC............................. 15 900 * ENDO PHARMACEUTICALS HOLDINGS, INC WTS 12/31/02................ 1 900 * ENDOCARE, INC.................................................. 16 1,200 * ENTREMED, INC.................................................. 10 1,612 * ENZO BIOCHEM, INC.............................................. 38 3,140 * ENZON, INC..................................................... 177 1,484 * ESPERION THERAPEUTICS, INC..................................... 11 300 * EXACT SCIENCES CORP............................................ 3 2,424 * EXELIXIS, INC.................................................. 40 5,702 * EXPRESS SCRIPTS, INC........................................... 267 6,455 * FIRST HEALTH GROUP CORP........................................ 160 739 * FIRST HORIZON PHARMACEUTICAL................................... 22 4,000 * FISHER SCIENTIFIC INTERNATIONAL, INC........................... 117 12,914 * FOREST LABORATORIES, INC....................................... 1,058 1,327 * GENAISSANCE PHARMACEUTICALS.................................... 6 1,900 * GENE LOGIC, INC................................................ 36 2,900 * GENELABS TECHNOLOGIES.......................................... 5 724 * GENENCOR INTERNATIONAL, INC.................................... 12 15,920 * GENENTECH, INC................................................. 864 1,700 * GENOME THERAPEUTICS CORP....................................... 12 800 * GENSTAR THERAPEUTICS CORP...................................... 2 1,500 * GENTA, INC..................................................... 21 2,514 * GENZYME CORP (BIOSURGERY DIVISION)............................. 13 14,450 * GENZYME CORP (GENERAL DIVISION)................................ 865 1,098 * GENZYME CORP (MOLECULAR ONCOLOGY DIVISION)..................... 9 1,600 * GERON CORP..................................................... 14 6,968 * GILEAD SCIENCES, INC........................................... 458 22,123 * GUIDANT CORP................................................... 1,102 1,753 * GUILFORD PHARMACEUTICALS, INC.................................. 21 1,516 * HAEMONETICS CORP............................................... 51 400 * HARVARD BIOSCIENCE, INC........................................ 4 37,300 HCA, INC....................................................... 1,438 17,764 * HEALTH MANAGEMENT ASSOCIATES, INC (CLASS A).................... 327 6,586 * HEALTH NET, INC................................................ 143 900 * HEALTHEXTRAS, INC.............................................. 5 28,463 * HEALTHSOUTH CORP............................................... 422 1,300 * HEMISPHERX BIOPHARMA, INC...................................... 6 2,508 * HENRY SCHEIN, INC.............................................. 93 3,236 HILLENBRAND INDUSTRIES, INC.................................... 179 9,319 * HUMAN GENOME SCIENCES, INC..................................... 314 12,200 * HUMANA, INC.................................................... 144 900 * HYSEQ, INC..................................................... 7 5,951 ICN PHARMACEUTICALS, INC....................................... 199 3,545 * ICOS CORP...................................................... 204 420 * ICU MEDICAL, INC............................................... 19 8,108 * IDEC PHARMACEUTICALS CORP...................................... 559 2,400 * IDEXX LABORATORIES, INC........................................ 68 1,100 * IDX SYSTEMS CORP............................................... 14 900 * IGEN INTERNATIONAL, INC........................................ 36 SHARES VALUE (000) -------- ----------- 2,300 * ILEX ONCOLOGY, INC............................................. $ 62 1,352 * ILLUMINA, INC.................................................. 16 2,536 * I-MANY, INC.................................................... 24 4,422 * IMCLONE SYSTEMS, INC........................................... 205 2,300 * IMMUNE RESPONSE CORP........................................... 3 23,114 * IMMUNEX CORP................................................... 640 2,900 * IMMUNOGEN, INC................................................. 48 2,700 * IMMUNOMEDICS, INC.............................................. 55 1,400 * IMPATH, INC.................................................... 62 1,188 * IMPAX LABORATORIES, INC........................................ 16 21,398 IMS HEALTH, INC................................................ 417 900 * INAMED CORP.................................................... 27 4,807 * INCYTE GENOMICS, INC........................................... 93 3,200 * INHALE THERAPEUTIC SYSTEMS, INC................................ 59 2,500 * INKINE PHARMACEUTICAL CO, INC.................................. 4 2,405 * INSMED, INC.................................................... 9 1,188 * INSPIRE PHARMACEUTICALS, INC................................... 17 799 * INTEGRA LIFESCIENCES HOLDING................................... 21 2,100 * INTEGRATED SILICON SOLUTION, INC............................... 26 2,056 * INTERMUNE, INC................................................. 101 2,619 * INTERNEURON PHARMACEUTICALS, INC............................... 29 2,235 * INTUITIVE SURGICAL, INC........................................ 22 1,514 INVACARE CORP.................................................. 51 3,841 * INVITROGEN CORP................................................ 238 2,938 * ISIS PHARMACEUTICALS, INC...................................... 65 1,200 * I-STAT CORP.................................................... 9 11,419 * IVAX CORP...................................................... 230 222,727 JOHNSON & JOHNSON.............................................. 13,163 709 * KENDLE INTERNATIONAL, INC...................................... 14 1,500 * KERYX BIOPHARMACEUTICALS, INC.................................. 11 13,683 * KING PHARMACEUTICALS, INC...................................... 576 400 * KOS PHARMACEUTICALS, INC....................................... 14 1,400 * KOSAN BIOSCIENCES, INC......................................... 11 1,600 * KV PHARMACEUTICAL CO (CLASS B)................................. 52 2,329 * LA JOLLA PHARMACEUTICAL CO..................................... 21 3,484 * LABORATORY CORP OF AMERICA HOLDINGS............................ 282 584 LANDAUER, INC.................................................. 20 900 * LARGE SCALE BIOLOGY CORP....................................... 4 2,341 * LEXICON GENETICS, INC.......................................... 27 2,828 * LIFEPOINT HOSPITALS, INC....................................... 96 2,919 * LIGAND PHARMACEUTICALS, INC (CLASS B).......................... 52 69,668 LILLY (ELI) & CO............................................... 5,472 6,797 * LINCARE HOLDINGS, INC.......................................... 195 1,106 * LUMINEX CORP................................................... 19 1,653 * MACROCHEM CORP................................................. 5 1,695 * MAGELLAN HEALTH SERVICES, INC.................................. 11 7,397 * MANOR CARE, INC................................................ 175 1,102 * MARTEK BIOSCIENCES CORP........................................ 24 1,900 * MATRIX PHARMACEUTICALS, INC.................................... 3 1,700 * MAXIM PHARMACEUTICALS, INC..................................... 12 900 * MAXIMUS, INC................................................... 38 2,043 * MAXYGEN, INC................................................... 36 20,687 MCKESSON CORP.................................................. 774 5,300 * MEDAREX, INC................................................... 95 534 * MED-DESIGN CORP................................................ 11 1,539 * MEDICINES CO................................................... 18 2,250 * MEDICIS PHARMACEUTICAL CORP (CLASS A).......................... 145 15,397 * MEDIMMUNE, INC................................................. 714 753 * MEDQUIST, INC.................................................. 22 87,807 MEDTRONIC, INC................................................. 4,497 1,500 MENTOR CORP.................................................... 43 165,173 MERCK & CO, INC................................................ 9,712 1,500 * MGI PHARMA, INC................................................ 23 3,500 * MID ATLANTIC MEDICAL SERVICES, INC............................. 79 15,975 * MILLENNIUM PHARMACEUTICALS, INC................................ 392 3,500 MILLIPORE CORP................................................. 212 1,100 * MIRAVANT MEDICAL TECHNOLOGIES.................................. 11 1,200 * MOLECULAR DEVICES CORP......................................... 25 B-41 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- HEALTH CARE--(Continued) 9,058 MYLAN LABORATORIES, INC........................................ $ 340 1,680 * MYRIAD GENETICS, INC........................................... 88 2,700 * NABI........................................................... 28 1,000 * NANOGEN, INC................................................... 6 1,723 * NAPRO BIOTHERAPEUTICS, INC..................................... 20 600 * NATIONAL HEALTHCARE CORP....................................... 9 827 * NEOPHARM, INC.................................................. 21 800 * NEOSE TECHNOLOGIES, INC........................................ 29 1,700 * NEUROCRINE BIOSCIENCES, INC.................................... 87 1,100 * NEUROGEN CORP.................................................. 19 17,000 b* NEUROMEDICAL SYSTEMS, INC...................................... 0 1,000 * NORTH AMERICAN SCIENTIFIC...................................... 13 1,037 * NOVAVAX, INC................................................... 15 1,600 * NOVEN PHARMACEUTICALS, INC..................................... 28 1,200 * NOVOSTE CORP................................................... 10 2,000 * NPS PHARMACEUTICALS, INC....................................... 77 1,200 * OCULAR SCIENCES, INC........................................... 28 5,988 OMNICARE, INC.................................................. 149 1,700 * ON ASSIGNMENT, INC............................................. 39 1,350 * ONYX PHARMACEUTICALS, INC...................................... 7 500 * OPTION CARE, INC............................................... 10 1,876 * ORASURE TECHNOLOGIES, INC...................................... 23 2,878 * ORCHID BIOSCIENCES, INC........................................ 16 2,925 * ORGANOGENESIS, INC............................................. 14 2,803 * ORTHODONTIC CENTERS OF AMERICA, INC............................ 85 2,548 * OSI PHARMACEUTICALS, INC....................................... 117 2,500 OWENS & MINOR, INC............................................. 46 7,200 * OXFORD HEALTH PLANS, INC....................................... 217 2,000 * PACIFICARE HEALTH SYSTEMS, INC................................. 32 2,100 * PAIN THERAPEUTICS, INC......................................... 19 8,148 PALL CORP...................................................... 196 2,000 * PARADIGM GENETICS, INC......................................... 11 1,800 * PAREXEL INTERNATIONAL CORP..................................... 26 3,600 * PATTERSON DENTAL CO............................................ 147 552 * PDI, INC....................................................... 12 1,464 * PEDIATRIX MEDICAL GROUP, INC................................... 50 2,266 * PER SE TECHNOLOGIES, INC....................................... 24 7,900 * PEREGRINE PHARMACEUTICALS, INC................................. 27 456,444 PFIZER, INC.................................................... 18,189 2,800 * PHARMACEUTICAL PRODUCT DEVELOPMENT, INC........................ 90 1,269 * PHARMACEUTICAL RESOURCES, INC.................................. 43 93,732 PHARMACIA CORP................................................. 3,998 1,600 * PHARMACOPEIA, INC.............................................. 22 1,200 * PHARMACYCLICS, INC............................................. 12 3,984 * PHARMOS CORP................................................... 9 6,600 b* PHYSICIANS RESOURCE GROUP, INC................................. 0 800 * POLYMEDICA CORP................................................ 13 1,227 * POSSIS MEDICAL, INC............................................ 21 1,425 * POZEN, INC..................................................... 7 3,663 * PRAECIS PHARMACEUTICALS, INC................................... 21 84 * PRIORITY HEALTHCARE CORP (CLASS A)............................. 3 1,405 * PRIORITY HEALTHCARE CORP (CLASS B)............................. 49 6,300 * PROCURENET, INC................................................ 1 583 * PROGENICS PHARMACEUTICALS...................................... 11 6,374 * PROTEIN DESIGN LABS, INC....................................... 209 2,300 * PROVINCE HEALTHCARE CO......................................... 71 4,900 * PSS WORLD MEDICAL, INC......................................... 40 5,114 * QUEST DIAGNOSTICS, INC......................................... 367 7,912 * QUINTILES TRANSNATIONAL CORP................................... 127 1,800 * REGENERATION TECHNOLOGIES...................................... 18 1,900 * REGENERON PHARMACEUTICALS, INC................................. 54 1,100 * REHABCARE GROUP, INC........................................... 33 3,550 * RENAL CARE GROUP, INC.......................................... 114 2,300 * RESMED, INC.................................................... 124 2,200 * RESPIRONICS, INC............................................... 76 800 * RIBOZYME PHARMACEUTICALS, INC.................................. 4 1,896 * RIGEL PHARMACEUTICALS, INC..................................... 9 SHARES VALUE (000) -------- ----------- 300 * RIGHTCHOICE MANAGED CARE, INC.................................. $ 21 718 * SANGAMO BIOSCIENCES, INC....................................... 7 1,300 * SANGSTAT MEDICAL CORP.......................................... 26 106,290 SCHERING-PLOUGH CORP........................................... 3,810 3,297 * SCIOS, INC..................................................... 78 500 * SEATTLE GENETICS, INC.......................................... 3 680 * SELECT MEDICAL CORP............................................ 11 5,700 * SEPRACOR, INC.................................................. 325 2,073 * SEQUENOM, INC.................................................. 22 1,311 * SEROLOGICALS CORP.............................................. 28 21,200 * SERVICE CORP INTERNATIONAL..................................... 106 3,900 * SICOR, INC..................................................... 61 1,748 * SIERRA HEALTH SERVICES, INC.................................... 14 1,646 * SOLA INTERNATIONAL, INC........................................ 32 733 * SONOSITE, INC.................................................. 19 366 * SPECIALTY LABORATORIES, INC.................................... 10 100 * SRI/SURGICAL EXPRESS, INC...................................... 2 6,284 * ST. JUDE MEDICAL, INC.......................................... 488 1,119 * STERICYCLE, INC................................................ 68 4,700 * STERIS CORP.................................................... 86 7,000 * STEWART ENTERPRISES, INC (CLASS A)............................. 42 9,762 STRYKER CORP................................................... 570 1,300 * SUNRISE ASSISTED LIVING, INC................................... 38 1,224 * SUPERGEN, INC.................................................. 18 1,000 * SURMODICS, INC................................................. 36 2,766 * SYBRON DENTAL SPECIALTIES, INC................................. 60 1,400 * SYNCOR INTERNATIONAL CORP...................................... 40 1,632 * TANOX, INC..................................................... 30 2,700 * TARGETED GENETICS CORP......................................... 7 3,000 * TECHNE CORP.................................................... 111 1,575 * TELIK, INC..................................................... 21 23,567 * TENET HEALTHCARE CORP.......................................... 1,384 3,200 * TEXAS BIOTECHNOLOGY CORP....................................... 21 2,000 * THERAGENICS CORP............................................... 20 500 * THIRD WAVE TECHNOLOGIES, INC................................... 4 2,550 * THORATEC CORP.................................................. 43 1,800 * TITAN PHARMACEUTICALS, INC..................................... 18 1,032 * TRANSGENOMIC, INC.............................................. 11 1,600 * TRANSKARYOTIC THERAPIES, INC................................... 68 5,271 * TRIAD HOSPITALS, INC........................................... 155 2,957 * TRIANGLE PHARMACEUTICALS, INC.................................. 12 2,748 * TRIGON HEALTHCARE, INC......................................... 191 1,300 * TRIMERIS, INC.................................................. 58 1,781 * TRIPATH IMAGING, INC........................................... 13 1,357 * TULARIK, INC................................................... 33 6,618 * U.S. ONCOLOGY, INC............................................. 50 300 * U.S. PHYSICAL THERAPY, INC..................................... 5 1,200 * UNITED THERAPEUTICS CORP....................................... 12 22,843 UNITEDHEALTH GROUP, INC........................................ 1,617 3,388 * UNIVERSAL HEALTH SERVICES, INC (CLASS B)....................... 145 789 * UROLOGIX, INC.................................................. 16 300 * V.I. TECHNOLOGIES, INC......................................... 2 2,200 * VALENTIS, INC.................................................. 7 2,453 * VARIAN MEDICAL SYSTEMS, INC.................................... 175 2,300 * VARIAN, INC.................................................... 75 4,100 * VASOMEDICAL, INC............................................... 15 600 * VAXGEN, INC.................................................... 7 800 * VENTANA MEDICAL SYSTEMS, INC................................... 18 4,541 VENTAS, INC.................................................... 52 1,233 * VENTIV HEALTH, INC............................................. 5 1,014 * VERSICOR, INC.................................................. 21 5,386 * VERTEX PHARMACEUTICALS, INC.................................... 132 1,897 * VIASYS HEALTHCARE, INC......................................... 38 1,500 * VICAL, INC..................................................... 18 2,572 * VIDAMED, INC................................................... 20 1,918 * VION PHARMACEUTICALS, INC...................................... 8 1,293 * VIROPHARMA, INC................................................ 30 3,600 * VISX, INC...................................................... 48 B-42 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- HEALTH CARE--(Continued) 400 VITAL SIGNS, INC............................................... $ 14 9,463 * WATERS CORP.................................................... 367 7,760 * WATSON PHARMACEUTICALS, INC.................................... 244 675 * WATSON WYATT & CO HOLDINGS..................................... 15 18,853 * WEBMD CORP..................................................... 133 4,542 * WELLPOINT HEALTH NETWORKS, INC................................. 531 1,200 X-RITE, INC.................................................... 10 14,029 * ZIMMER HOLDINGS, INC........................................... 428 600 * ZOLL MEDICAL CORP.............................................. 23 --------- TOTAL HEALTH CARE.............................................. 127,741 --------- OTHER--1.88% 900 * 4KIDS ENTERTAINMENT, INC....................................... 18 1,300 ABM INDUSTRIES, INC............................................ 41 1,430 * ACACIA RESEARCH CORP........................................... 16 591 * ACTRADE FINANCIAL TECHNOLOGIES LTD............................. 17 3,000 ACUITY BRANDS, INC............................................. 36 1,600 * ADMINISTAFF, INC............................................... 44 1,300 * ADVO, INC...................................................... 56 2,900 ALEXANDER & BALDWIN, INC....................................... 77 505 AMBASSADORS INTERNATIONAL, INC................................. 11 1,800 BANTA CORP..................................................... 53 1,010 * BELL MICROPRODUCTS, INC........................................ 13 13,290 H & R BLOCK, INC............................................... 594 1,200 BRADY CORP (CLASS A)........................................... 44 873 * BRIGHT HORIZONS FAMILY SOLUTIONS, INC.......................... 24 3,000 * CAREER EDUCATION CORP.......................................... 103 900 * CDI CORP....................................................... 17 69,609 * CENDANT CORP................................................... 1,365 1,150 CENTRAL PARKING CORP........................................... 23 5,500 * CENTURY BUSINESS SERVICES, INC................................. 13 8,394 CINTAS CORP.................................................... 403 602 * CORINTHIAN COLLEGES, INC....................................... 25 2,535 * CORPORATE EXECUTIVE BOARD CO................................... 93 1,000 * COSTAR GROUP, INC.............................................. 24 3,800 CRANE CO....................................................... 97 400 CURTISS-WRIGHT CORP............................................ 19 1,294 * DAISYTEK INTERNATIONAL CORP.................................... 17 4,273 * DEVRY, INC..................................................... 122 14,607 DOVER CORP..................................................... 541 5,635 * DUN & BRADSTREET CORP.......................................... 199 1,930 * EDISON SCHOOLS, INC............................................ 38 1,519 * EDUCATION MANAGEMENT CORP...................................... 55 800 * ESCO TECHNOLOGIES, INC......................................... 28 5,901 * EXULT, INC..................................................... 95 1,700 * FIRST CONSULTING GROUP, INC.................................... 27 2,900 FIRST INDUSTRIAL REALTY TRUST, INC............................. 90 900 * FORRESTER RESEARCH, INC........................................ 18 10,880 FORTUNE BRANDS, INC............................................ 431 1,525 * GENTIVA HEALTH SERVICES, INC................................... 33 2,480 * GETTY IMAGES, INC.............................................. 57 2,027 * GTECH HOLDINGS CORP............................................ 92 2,100 HARLAND (JOHN H.) CO........................................... 46 1,400 * HEIDRICK & STRUGGLES INTERNATIONAL, INC........................ 25 4,200 HON INDUSTRIES, INC............................................ 116 59,021 HONEYWELL INTERNATIONAL, INC................................... 1,996 600 * HOTEL RESERVATIONS NETWORK, INC (CLASS A)...................... 28 2,100 * HOTJOBS.COM LTD................................................ 22 200 * ICT GROUP, INC................................................. 4 2,100 * INFOUSA, INC................................................... 15 1,025 * ITRON, INC..................................................... 31 5,613 ITT INDUSTRIES, INC............................................ 283 1,200 KELLY SERVICES, INC (CLASS A).................................. 26 2,700 * KORN/FERRY INTERNATIONAL....................................... 29 2,850 * LABOR READY, INC............................................... 15 5,300 LIBERTY PROPERTY TRUST......................................... 158 9,630 LOEWS CORP..................................................... 533 SHARES VALUE (000) -------- ----------- 400 * MANAGEMENT NETWORK GROUP, INC.................................. $ 3 5,591 MANPOWER, INC.................................................. 188 2,200 MATTHEWS INTERNATIONAL CORP (CLASS A).......................... 54 553 MCGRATH RENTCORP............................................... 21 800 * MEMBERWORKS, INC............................................... 11 6,400 * METROMEDIA INTERNATIONAL GROUP, INC............................ 5 6,683 * MPS GROUP, INC................................................. 48 11,373 MOODY'S CORP................................................... 453 2,045 * MSC.SOFTWARE CORP.............................................. 32 3,000 NATIONAL SERVICE INDUSTRIES, INC............................... 6 2,700 * NAVIGANT CONSULTING CO......................................... 15 1,391 * NCO GROUP, INC................................................. 32 800 NEW ENGLAND BUSINESS SERVICES, INC............................. 15 100 * NEW HORIZONS WORLDWIDE, INC.................................... 1 1,262 * OFFSHORE LOGISTICS, INC........................................ 22 3,781 PITTSTON BRINK'S GROUP......................................... 84 1,274 * PREPAID LEGAL SERVICES, INC.................................... 28 973 * PROQUEST CO.................................................... 33 2,160 * R.H. DONNELLEY CORP............................................ 63 1,900 * RENT-WAY, INC.................................................. 11 679 * RIGHT MANAGEMENT CONSULTANTS................................... 12 11,200 * ROBERT HALF INTERNATIONAL, INC................................. 299 1,081 ROLLINS, INC................................................... 22 1,196 * SCHOOL SPECIALTY, INC.......................................... 27 21,762 SERVICEMASTER CO............................................... 300 3,800 * SPHERION CORP.................................................. 37 2,703 * SPX CORP....................................................... 370 900 STANDARD REGISTER CO........................................... 17 1,000 STANDEX INTERNATIONAL CORP..................................... 22 500 * STARTEK, INC................................................... 9 427 STRAYER EDUCATION, INC......................................... 21 9,130 SUPERVALU, INC................................................. 202 1,600 * SYMYX TECHNOLOGIES, INC........................................ 34 48,430 SYSCO CORP..................................................... 1,270 835 TALX CORP...................................................... 21 600 * TEJON RANCH CO................................................. 14 2,489 TELEFLEX, INC.................................................. 118 2,600 * TELETECH HOLDINGS, INC......................................... 37 9,500 * TERREMARK WORLDWIDE, INC....................................... 5 8,600 TEXTRON, INC................................................... 357 5,908 * TMP WORLDWIDE, INC............................................. 253 1,000 * TRADESTATION GROUP, INC........................................ 2 755 * TRAVELOCITY.COM, INC........................................... 22 2 TYCO INTERNATIONAL LTD......................................... 0 5,950 * U.S. INDUSTRIES, INC........................................... 15 587 UNIFIRST CORP.................................................. 13 800 * UNIROYAL TECHNOLOGY CORP....................................... 3 2,300 * UNITED STATIONERS, INC......................................... 77 34,004 UNITED TECHNOLOGIES CORP....................................... 2,198 3,502 VALSPAR CORP................................................... 139 6,032 VIAD CORP...................................................... 143 700 * WACKENHUT CORP (CLASS A)....................................... 17 600 * WACKENHUT CORRECTIONS CORP..................................... 8 2,300 WALTER INDUSTRIES, INC......................................... 26 --------- TOTAL OTHER.................................................... 15,631 --------- PRODUCER DURABLES--5.63% 2,289 * ACTIVE POWER, INC.............................................. 16 4,600 AGCO CORP...................................................... 73 10,003 * ALLIED WASTE INDUSTRIES, INC................................... 141 800 AMERICAN STATES WATER CO....................................... 28 5,618 AMERICAN WATER WORKS CO, INC................................... 235 2,400 AMETEK, INC.................................................... 77 1,300 APPLIED INDUSTRIAL TECHNOLOGIES, INC........................... 24 1,200 * ASTEC INDUSTRIES, INC.......................................... 17 300 * AUGUST TECHNOLOGY CORP......................................... 3 1,700 BALDOR ELECTRIC CO............................................. 36 2,248 * BEACON POWER CORP.............................................. 3 B-43 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- PRODUCER DURABLES--(Continued) 1,600 BRIGGS & STRATTON CORP......................................... $ 68 1,300 * BROOKS AUTOMATION, INC......................................... 53 1,000 CALIFORNIA WATER SERVICE GROUP................................. 26 1,300 * CASELLA WASTE SYSTEMS, INC (CLASS A)........................... 19 1,242 * CATALYTICA ENERGY SYSTEMS, INC................................. 6 24,861 CATERPILLAR, INC............................................... 1,299 628 CIRCOR INTERNATIONAL, INC...................................... 12 1,500 * COINSTAR, INC.................................................. 38 537 CONECTIV (CLASS A)............................................. 11 734 * CONSOLIDATED GRAPHICS, INC..................................... 14 6,316 COOPER INDUSTRIES, INC......................................... 221 3,700 * COVANTA ENERGY CORP............................................ 17 2,503 CUMMINS, INC................................................... 96 1,000 * CUNO, INC...................................................... 31 6,884 DANAHER CORP................................................... 415 16,805 DEERE & CO..................................................... 734 3,350 * DYCOM INDUSTRIES, INC.......................................... 56 5,051 EATON CORP..................................................... 376 31,106 EMERSON ELECTRIC CO............................................ 1,776 820 * EMEX CORP...................................................... 3 3,300 FEDERAL SIGNAL CORP............................................ 73 956 * FLOW INTERNATIONAL CORP........................................ 12 3,200 * FLOWSERVE CORP................................................. 85 300 FRANKLIN ELECTRIC CO, INC...................................... 25 2,400 * FUELCELL ENERGY, INC........................................... 44 1,000 * GARDNER DENVER, INC............................................ 22 3,011 GATX CORP...................................................... 98 721,141 GENERAL ELECTRIC CO............................................ 28,903 800 * GENLYTE GROUP, INC............................................. 24 538 * GLOBAL POWER EQUIPMENT GROUP, INC.............................. 8 539 GORMAN-RUPP CO................................................. 14 5,420 GRAINGER (W.W.), INC........................................... 260 1,804 * H POWER CORP................................................... 6 2,900 HARSCO CORP.................................................... 99 1,681 * HEADWATERS, INC................................................ 19 3,549 HUBBELL, INC (CLASS B)......................................... 104 2,250 IDEX CORP...................................................... 78 16,863 ILLINOIS TOOL WORKS, INC....................................... 1,142 1,411 * IMAGISTICS INTERNATIONAL, INC.................................. 17 11,445 INGERSOLL-RAND CO.............................................. 479 1,200 * IONICS, INC.................................................... 36 3,200 JLG INDUSTRIES, INC............................................ 34 993 * KADANT, INC.................................................... 14 2,035 KAYDON CORP.................................................... 46 2,294 KENNAMETAL, INC................................................ 92 500 LAWSON PRODUCTS, INC........................................... 13 2,311 LINCOLN ELECTRIC HOLDINGS, INC................................. 56 800 LINDSAY MANUFACTURING CO....................................... 15 1,350 * LITTELFUSE, INC................................................ 35 3,909 * MAGNA ENTERTAINMENT CORP (CLASS A)............................. 27 1,200 * MAGNETEK, INC.................................................. 11 1,875 MANITOWOC CO, INC.............................................. 58 733 * MAXWELL TECHNOLOGIES, INC...................................... 7 1,700 * MECHANICAL TECHNOLOGY, INC..................................... 5 1,150 MILACRON, INC.................................................. 18 600 MINE SAFETY APPLIANCES CO...................................... 24 28,429 MINNESOTA MINING & MANUFACTURING CO............................ 3,359 500 NACCO INDUSTRIES, INC (CLASS A)................................ 28 2,075 * NATIONAL INSTRUMENTS CORP...................................... 78 4,300 NAVISTAR INTERNATIONAL CORP.................................... 170 4,900 * NEWPARK RESOURCES, INC......................................... 39 1,000 NEWPORT NEWS SHIPBUILDING, INC................................. 71 1,000 NN, INC........................................................ 11 1,694 NORDSON CORP................................................... 45 4,600 PACCAR, INC.................................................... 302 8,466 PARKER HANNIFIN CORP........................................... 389 1,517 * PEMSTAR, INC................................................... 18 SHARES VALUE (000) -------- ----------- 4,108 PHILADELPHIA SUBURBAN CORP..................................... $ 93 900 * PHOTON DYNAMICS, INC........................................... 41 17,745 PITNEY BOWES, INC.............................................. 667 600 * PLUG POWER, INC................................................ 5 4,000 * POWER-ONE, INC................................................. 42 1,812 * QUANTA SERVICES, INC........................................... 28 1,323 * RAYOVAC CORP................................................... 23 1,539 REGAL-BELOIT CORP.............................................. 34 12,254 * REPUBLIC SERVICES, INC......................................... 245 300 RICHARDSON ELECTRONICS LTD..................................... 4 600 ROBBINS & MYERS, INC........................................... 14 11,300 ROCKWELL COLLINS, INC.......................................... 220 11,300 ROCKWELL INTERNATIONAL CORP.................................... 202 2,139 ROPER INDUSTRIES, INC.......................................... 106 827 * SAGE, INC...................................................... 31 744 SAUER-DANFOSS, INC............................................. 6 200 SJW CORP....................................................... 17 731 * SPS TECHNOLOGIES, INC.......................................... 26 1,823 STEWART & STEVENSON SERVICES, INC.............................. 34 1,100 TECUMSEH PRODUCTS CO (CLASS A)................................. 56 700 TENNANT CO..................................................... 26 2,000 * TEREX CORP..................................................... 35 3,491 * TETRA TECH, INC................................................ 70 871 * TETRA TECHNOLOGIES, INC........................................ 18 4,199 * THOMAS & BETTS CORP............................................ 89 3,629 TIMKEN CO...................................................... 59 900 TORO CO........................................................ 41 381 * TRC COS, INC................................................... 19 700 * TRIKON TECHNOLOGIES, INC....................................... 8 2,700 TRINITY INDUSTRIES, INC........................................ 73 3,300 * UNOVA, INC..................................................... 19 2,500 * VALENCE TECHNOLOGY, INC........................................ 8 600 VALHI, INC..................................................... 8 1,000 VALMONT INDUSTRIES, INC........................................ 14 2,201 WABTEC CORP.................................................... 27 1,912 * WASTE CONNECTIONS, INC......................................... 59 45,450 WASTE MANAGEMENT, INC.......................................... 1,450 1,100 WATTS INDUSTRIES, INC (CLASS A)................................ 17 52,224 XEROX CORP..................................................... 544 --------- TOTAL PRODUCER DURABLES........................................ 46,915 --------- TECHNOLOGY--18.90% 24,842 * 3COM CORP...................................................... 158 1,000 * 3D SYSTEMS CORP................................................ 14 2,400 * 3DO CO......................................................... 5 800 b* ACT MANUFACTURING, INC......................................... 0 1,700 * ACTEL CORP..................................................... 34 13,979 * ACTERNA CORP................................................... 55 2,397 * ACTIVISION, INC................................................ 62 3,042 * ACTUATE CORP................................................... 16 6,539 * ACXIOM CORP.................................................... 114 7,600 * ADAPTEC, INC................................................... 110 57,292 * ADC TELECOMMUNICATIONS, INC.................................... 264 700 * ADE CORP....................................................... 7 17,253 ADOBE SYSTEMS, INC............................................. 536 1,500 * ADTRAN, INC.................................................... 38 4,400 * ADVANCED DIGITAL INFORMATION CORP.............................. 71 1,353 * ADVANCED ENERGY INDUSTRIES, INC................................ 36 5,800 * ADVANCED FIBRE COMMUNICATIONS, INC............................. 102 24,863 * ADVANCED MICRO DEVICES, INC.................................... 394 2,200 * ADVENT SOFTWARE, INC........................................... 110 4,300 * AEROFLEX, INC.................................................. 81 1,700 * AETHER SYSTEMS, INC............................................ 16 3,300 * AFFILIATED COMPUTER SERVICES, INC (CLASS A).................... 350 43,486 * AGERE SYSTEMS, INC (CLASS A)................................... 247 2,200 * AGILE SOFTWARE CORP............................................ 38 33,382 * AGILENT TECHNOLOGIES, INC...................................... 952 5,252 * AKAMAI TECHNOLOGIES, INC....................................... 31 B-44 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- TECHNOLOGY--(Continued) 2,000 * ALLIANCE SEMICONDUCTOR CORP.................................... $ 24 600 * ALLOY, INC..................................................... 13 3,114 * ALPHA INDUSTRIES, INC.......................................... 68 26,277 * ALTERA CORP.................................................... 558 1,627 * AMERICA ONLINE LATIN AMERICA, INC (CLASS A).................... 7 3,150 * AMERICAN MANAGEMENT SYSTEMS, INC............................... 57 11,900 * AMERICAN POWER CONVERSION CORP................................. 172 1,600 * AMERICAN SUPERCONDUCTOR CORP................................... 20 9,267 * AMKOR TECHNOLOGY, INC.......................................... 149 3,100 * AMPHENOL CORP (CLASS A)........................................ 149 2,400 * ANADIGICS, INC................................................. 37 24,863 * ANALOG DEVICES, INC............................................ 1,104 400 ANALOGIC CORP.................................................. 15 1,600 * ANAREN MICROWAVE, INC.......................................... 28 5,875 * ANDREW CORP.................................................... 129 1,900 * ANIXTER INTERNATIONAL, INC..................................... 55 400 * ANSOFT CORP.................................................... 6 2,800 * ANSWERTHINK, INC............................................... 18 1,047 * ANSYS, INC..................................................... 26 1,700 * APAC CUSTOMER SERVICES, INC.................................... 4 25,484 * APPLE COMPUTER, INC............................................ 558 600 * APPLIED INNOVATION, INC........................................ 4 59,279 * APPLIED MATERIALS, INC......................................... 2,377 20,460 * APPLIED MICRO CIRCUITS CORP.................................... 232 2,100 * ARBITRON, INC.................................................. 72 1,282 * AREMISSOFT CORP................................................ 1 16,117 * ARIBA, INC..................................................... 99 3,686 * ARRIS GROUP, INC............................................... 36 7,158 * ARROW ELECTRONICS, INC......................................... 214 4,000 * ART TECHNOLOGY GROUP, INC...................................... 14 2,400 * ARTESYN TECHNOLOGIES, INC...................................... 22 900 * ARTISAN COMPONENTS, INC........................................ 14 20,300 * ASCENTIAL SOFTWARE CORP........................................ 82 1,946 * ASIAINFO HOLDINGS, INC......................................... 34 4,000 * ASPECT COMMUNICATIONS CORP..................................... 16 2,200 * ASPEN TECHNOLOGY, INC.......................................... 37 882 * ASTROPOWER, INC................................................ 36 2,600 * ASYST TECHNOLOGIES, INC........................................ 33 29,090 * ATMEL CORP..................................................... 214 2,000 * ATMI, INC...................................................... 48 800 * AUDIOVOX CORP (CLASS A)........................................ 6 3,311 * AUSPEX SYSTEMS, INC............................................ 6 3,949 AUTODESK, INC.................................................. 147 44,995 AUTOMATIC DATA PROCESSING, INC................................. 2,650 2,135 * AVANEX CORP.................................................... 13 2,700 * AVANT! CORP.................................................... 55 20,805 * AVAYA, INC..................................................... 253 3,601 * AVICI SYSTEMS, INC............................................. 10 1,900 * AVID TECHNOLOGY, INC........................................... 23 8,590 AVNET, INC..................................................... 219 3,167 * AVOCENT CORP................................................... 77 3,866 AVX CORP....................................................... 91 1,600 * AWARE, INC..................................................... 13 7,187 * AXCELIS TECHNOLOGIES, INC...................................... 93 1,500 * AXT, INC....................................................... 22 889 * BARRA, INC..................................................... 42 22,202 * BEA SYSTEMS, INC............................................... 342 786 BEI TECHNOLOGIES, INC.......................................... 14 600 BEL FUSE, INC (CLASS B)........................................ 15 1,900 BELDEN, INC.................................................... 45 1,400 * BENCHMARK ELECTRONICS, INC..................................... 27 3,994 * BISYS GROUP, INC............................................... 256 1,400 * BLACK BOX CORP................................................. 74 2,100 * BLUE MARTINI SOFTWARE, INC..................................... 6 2,000 BMC INDUSTRIES, INC............................................ 4 16,794 * BMC SOFTWARE, INC.............................................. 275 3,687 * BORLAND SOFTWARE CORP.......................................... 58 SHARES VALUE (000) -------- ----------- 1,101 * BOSTON COMMUNICATIONS GROUP.................................... $ 12 700 * BRAUN CONSULTING, INC.......................................... 2 4,150 * BRIGHTPOINT, INC............................................... 13 1,300 * BRIO SOFTWARE, INC............................................. 4 13,882 * BROADCOM CORP (CLASS A)........................................ 567 15,500 * BROADVISION, INC............................................... 42 15,630 * BROCADE COMMUNICATIONS SYSTEMS, INC............................ 518 1,000 * BSQUARE CORP................................................... 4 2,000 C&D TECHNOLOGIES, INC.......................................... 46 3,175 * CABLE DESIGN TECHNOLOGIES CORP................................. 43 1,500 * CACHEFLOW, INC................................................. 4 1,400 * CACI INTERNATIONAL, INC (CLASS A).............................. 55 17,830 * CADENCE DESIGN SYSTEMS, INC.................................... 391 600 * CAMINUS CORP................................................... 14 1,200 * CARREKER CORP.................................................. 7 800 * CARRIER ACCESS CORP............................................ 2 300 * CATAPULT COMMUNICATIONS CORP................................... 8 2,300 * C-COR.NET CORP................................................. 34 900 * CELERITEK, INC................................................. 12 1,843 * CENTILLIUM COMMUNICATIONS, INC................................. 14 1,558 * CENTRA SOFTWARE, INC........................................... 12 9,300 * CERIDIAN CORP.................................................. 174 5,248 * CERTEGY, INC................................................... 180 4,500 * CHECKFREE CORP................................................. 81 2,400 * CHECKPOINT SYSTEMS, INC........................................ 32 2,376 * CHIPPAC, INC................................................... 18 2,100 * CHORDIANT SOFTWARE, INC........................................ 17 3,700 * CIBER, INC..................................................... 35 23,734 * CIENA CORP..................................................... 340 4,400 * CIRRUS LOGIC, INC.............................................. 58 532,459 * CISCO SYSTEMS, INC............................................. 9,643 13,638 * CITRIX SYSTEMS, INC............................................ 309 2,113 * CLARENT CORP................................................... 11 1,261 * CLICK COMMERCE, INC............................................ 4 18,865 * CMGI, INC...................................................... 31 8,299 * CNET NETWORKS, INC............................................. 74 2,294 * COGNEX CORP.................................................... 59 600 * COGNIZANT TECHNOLOGY SOLUTIONS CORP............................ 25 1,400 COHU, INC...................................................... 28 20,300 * COMMERCE ONE, INC.............................................. 72 3,700 * COMMSCOPE, INC................................................. 79 123,332 COMPAQ COMPUTER CORP........................................... 1,204 33,076 COMPUTER ASSOCIATES INTERNATIONAL, INC......................... 1,141 2,200 * COMPUTER NETWORK TECHNOLOGY CORP............................... 39 11,753 * COMPUTER SCIENCES CORP......................................... 576 24,200 * COMPUWARE CORP................................................. 285 200 COMPX INTERNATIONAL, INC....................................... 3 13,377 * COMVERSE TECHNOLOGY, INC....................................... 299 1,600 * CONCORD CAMERA CORP............................................ 13 36,588 * CONCORD EFS, INC............................................... 1,199 4,400 * CONCURRENT COMPUTER CORP....................................... 65 577 CONESTOGA ENTERPRISES, INC..................................... 18 18,298 * CONEXANT SYSTEMS, INC.......................................... 263 1,400 * CONVERA CORP................................................... 5 12,514 * CONVERGYS CORP................................................. 469 573 * COORSTEK, INC.................................................. 18 3,800 * COPPER MOUNTAIN NETWORKS, INC.................................. 6 1,300 * CORILLIAN CORP................................................. 6 68,280 * CORNING, INC................................................... 609 18,279 * CORVIS CORP.................................................... 59 6,394 * COSINE COMMUNICATIONS, INC..................................... 10 1,800 * COVANSYS CORP.................................................. 16 4,240 * CREDENCE SYSTEMS CORP.......................................... 79 5,299 * CREE, INC...................................................... 156 600 * CROSSROADS SYSTEMS, INC........................................ 3 3,420 * CSG SYSTEMS INTERNATIONAL, INC................................. 138 2,100 CTS CORP....................................................... 33 400 CUBIC CORP..................................................... 21 B-45 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- TECHNOLOGY--(Continued) 2,200 * CYMER, INC..................................................... $ 59 8,371 * CYPRESS SEMICONDUCTOR CORP..................................... 167 1,000 * DAKTRONICS, INC................................................ 8 1,300 * DATASTREAM SYSTEMS, INC........................................ 8 3,000 * DDI CORP....................................................... 30 2,078 * DELIA*S CORP (CLASS A)......................................... 13 164,058 * DELL COMPUTER CORP............................................. 4,459 4,900 DELUXE CORP.................................................... 204 2,000 * DIAMONDCLUSTER INTERNATIONAL, INC (CLASS A).................... 26 5,148 DIEBOLD, INC................................................... 208 1,700 * DIGEX, INC..................................................... 5 800 * DIGIMARC CORP.................................................. 15 1,900 * DIGITAL INSIGHT CORP........................................... 42 900 * DIGITAL LIGHTWAVE, INC......................................... 8 2,500 * DIGITALTHINK, INC.............................................. 27 600 * DIGITAS, INC................................................... 2 1,800 * DITECH COMMUNICATIONS CORP..................................... 11 13,557 * DIVINE, INC (CLASS A).......................................... 10 5,700 * DMC STRATEX NETWORKS, INC...................................... 44 2,676 * DOCENT, INC.................................................... 8 2,700 * DOCUMENTUM, INC................................................ 59 8,500 * DOUBLECLICK, INC............................................... 96 1,746 * DSP GROUP, INC................................................. 41 4,845 * DST SYSTEMS, INC............................................... 242 400 * DUPONT PHOTOMASKS, INC......................................... 17 100 * DURASWITCH INDUSTRIES, INC..................................... 1 4,538 * E.PIPHANY, INC................................................. 40 5,623 * EARTHLINK, INC................................................. 68 10,388 * EBAY, INC...................................................... 695 1,800 * ECHELON CORP................................................... 25 606 EDO CORP....................................................... 16 3,301 * EFUNDS CORP.................................................... 45 1,600 * ELANTEC SEMICONDUCTOR, INC..................................... 61 1,900 * ELECTRO SCIENTIFIC INDUSTRIES, INC............................. 57 1,600 * ELECTROGLAS, INC............................................... 24 9,180 * ELECTRONIC ARTS, INC........................................... 550 34,376 ELECTRONIC DATA SYSTEMS CORP................................... 2,356 3,900 * ELECTRONICS FOR IMAGING, INC................................... 87 900 * EMBARCADERO TECHNOLOGIES, INC.................................. 22 160,718 * EMC CORP....................................................... 2,160 1,602 * EMCORE CORP.................................................... 22 5,989 * EMULEX CORP.................................................... 237 4,100 * ENGAGE, INC.................................................... 2 2,883 * ENTEGRIS, INC.................................................. 32 14,334 * ENTERASYS NETWORKS, INC........................................ 127 3,400 * ENTRUST, INC................................................... 35 637 * EPIQ SYSTEMS, INC.............................................. 12 10,496 EQUIFAX, INC................................................... 253 1,100 * ESPEED, INC (CLASS A).......................................... 9 2,200 * ESS TECHNOLOGY, INC............................................ 47 1,400 * ESTERLINE TECHNOLOGIES CORP.................................... 22 2,800 * EXAR CORP...................................................... 58 600 * EXCEL TECHNOLOGY, INC.......................................... 10 2,263 * EXE TECHNOLOGIES, INC.......................................... 12 1,000 * EXTENSITY, INC................................................. 2 7,347 * EXTREME NETWORKS, INC.......................................... 95 1,000 * F.Y.I., INC.................................................... 34 1,300 * F5 NETWORKS, INC............................................... 28 1,350 FAIR, ISAAC & CO, INC.......................................... 85 7,177 * FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC (CLASS A)........... 202 3,200 * FALCONSTOR SOFTWARE, INC....................................... 29 1,100 * FEI CO......................................................... 35 2,304 * FIBERCORE, INC................................................. 6 2,700 * FILENET CORP................................................... 55 8,910 * FINISAR CORP................................................... 91 27,941 FIRST DATA CORP................................................ 2,192 SHARES VALUE (000) -------- ----------- 13,572 * FISERV, INC.................................................... $ 574 771 * FLIR SYSTEMS, INC.............................................. 29 6,278 * FOUNDRY NETWORKS, INC.......................................... 51 2,120 * FREEMARKETS, INC............................................... 51 2,000 * FSI INTERNATIONAL, INC......................................... 18 13,003 * GATEWAY, INC................................................... 105 2,300 GENERAL CABLE CORP............................................. 30 12,685 * GENUITY, INC (CLASS A)......................................... 20 1,400 * GENZYME TRANSGENICS CORP....................................... 8 1,800 * GERBER SCIENTIFIC, INC......................................... 17 400 * GLOBAL IMAGING SYSTEMS, INC.................................... 6 2,552 GLOBAL PAYMENTS, INC........................................... 88 210 * GLOBALSCAPE, INC............................................... 0 7,665 * GLOBESPAN VIRATA, INC.......................................... 99 2,090 * GRIFFON CORP................................................... 31 1,400 * HANDSPRING, INC................................................ 9 4,036 * HARMONIC, INC.................................................. 49 4,800 HARRIS CORP.................................................... 146 1,700 HELIX TECHNOLOGY CORP.......................................... 38 4,700 HENRY (JACK) & ASSOCIATES, INC................................. 103 114,379 HEWLETT-PACKARD CO............................................. 2,349 600 * HI/FN, INC..................................................... 9 2,600 * HNC SOFTWARE, INC.............................................. 54 5,061 * HOMESTORE.COM, INC............................................. 18 1,800 * HUTCHINSON TECHNOLOGY, INC..................................... 42 2,430 * HYPERION SOLUTIONS CORP........................................ 48 19,890 * I2 TECHNOLOGIES, INC........................................... 157 2,400 * IBASIS, INC.................................................... 3 2,300 * IDENTIX, INC................................................... 34 700 * II-VI, INC..................................................... 12 10,900 IKON OFFICE SOLUTIONS, INC..................................... 127 2,443 * IMATION CORP................................................... 53 3,000 * INDUS INTERNATIONAL, INC....................................... 22 900 * INET TECHNOLOGIES, INC......................................... 10 2,900 * INFOCUS CORP................................................... 64 1,040 * INFOGRAMES, INC................................................ 7 3,356 * INFONET SERVICES CORP (CLASS B)................................ 8 5,000 * INFORMATICA CORP............................................... 73 1,989 * INFORMATION RESOURCES, INC..................................... 17 17,722 * INFOSPACE, INC................................................. 36 4,600 * INGRAM MICRO, INC (CLASS A).................................... 80 9,019 * INKTOMI CORP................................................... 61 600 * INRANGE TECHNOLOGIES CORP (CLASS B)............................ 7 692 * INTEGRAL SYSTEMS, INC.......................................... 13 1,936 * INTEGRATED CIRCUIT SYSTEMS, INC................................ 44 7,546 * INTEGRATED DEVICE TECHNOLOGY, INC.............................. 201 487,296 INTEL CORP..................................................... 15,325 3,400 * INTELIDATA TECHNOLOGIES CORP................................... 10 300 * INTERACTIVE INTELLIGENCE, INC.................................. 2 900 * INTERCEPT GROUP, INC........................................... 37 4,000 * INTERDIGITAL COMMUNICATIONS CORP............................... 39 3,600 * INTERGRAPH CORP................................................ 49 2,200 * INTERLAND, INC................................................. 5 1,475 * INTERLOGIX, INC................................................ 57 991 * INTERMAGNETICS GENERAL CORP.................................... 26 10,936 * INTERNAP NETWORK SERVICES CORP................................. 13 125,094 INTERNATIONAL BUSINESS MACHINES CORP........................... 15,131 4,610 * INTERNATIONAL RECTIFIER CORP................................... 161 13,180 * INTERNET CAPITAL GROUP, INC.................................... 16 2,817 * INTERNET SECURITY SYSTEMS, INC................................. 90 7,476 * INTERSIL CORP (CLASS A)........................................ 241 1,600 INTER-TEL, INC................................................. 31 5,600 * INTERTRUST TECHNOLOGIES CORP................................... 7 2,307 * INTERVOICE-BRITE, INC.......................................... 30 6,425 * INTERWOVEN, INC................................................ 63 862 * INTRADO, INC................................................... 23 12,632 * INTUIT, INC.................................................... 540 4,080 * IOMEGA CORP.................................................... 34 B-46 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- TECHNOLOGY--(Continued) 2,687 * IRON MOUNTAIN, INC............................................. $ 118 1,700 * ITXC CORP...................................................... 12 3,070 * IXIA........................................................... 39 600 * IXYS CORP...................................................... 5 7,207 * J.D. EDWARDS & CO.............................................. 119 11,080 * JABIL CIRCUIT, INC............................................. 252 1,500 * JDA SOFTWARE GROUP, INC........................................ 34 85,258 * JDS UNIPHASE CORP.............................................. 740 1,622 * JNI CORP....................................................... 13 18,350 * JUNIPER NETWORKS, INC.......................................... 348 1,064 * KANA SOFTWARE, INC............................................. 21 3,874 * KEANE, INC..................................................... 70 600 KEITHLEY INSTRUMENTS, INC...................................... 10 6,200 * KEMET CORP..................................................... 110 1,400 * KEYNOTE SYSTEMS, INC........................................... 13 1,669 * KFORCE, INC.................................................... 10 13,489 * KLA-TENCOR CORP................................................ 669 4,700 * KOPIN CORP..................................................... 66 8,246 * KPMG CONSULTING, INC........................................... 137 1,500 * KRONOS, INC.................................................... 73 3,600 * KULICKE & SOFFA INDUSTRIES, INC................................ 62 9,062 * LAM RESEARCH CORP.............................................. 210 1,143 * LANTRONIX, INC................................................. 7 6,522 * LATTICE SEMICONDUCTOR CORP..................................... 134 800 * LEARNING TREE INTERNATIONAL, INC............................... 22 517 * LECROY CORP.................................................... 9 6,600 * LEGATO SYSTEMS, INC............................................ 86 1,500 * LEXAR MEDIA, INC............................................... 4 2,000 * LEXENT, INC.................................................... 13 9,416 * LEXMARK INTERNATIONAL, INC..................................... 556 7,622 * LIBERATE TECHNOLOGIES.......................................... 88 1,888 * LIGHTBRIDGE, INC............................................... 23 1,400 * LIGHTPATH TECHNOLOGIES, INC (CLASS A).......................... 5 23,000 LINEAR TECHNOLOGY CORP......................................... 898 1,700 * LOUDCLOUD, INC................................................. 7 25,052 * LSI LOGIC CORP................................................. 395 3,700 * LTX CORP....................................................... 77 247,669 * LUCENT TECHNOLOGIES, INC....................................... 1,558 4,200 * MACROMEDIA, INC................................................ 75 2,952 * MACROVISION CORP............................................... 104 2,792 * MAIL-WELL, INC................................................. 11 1,042 * MANHATTAN ASSOCIATES, INC...................................... 30 1,100 * MANUFACTURERS SERVICES LTD..................................... 7 3,695 * MANUGISTICS GROUP, INC......................................... 78 1,100 * MAPINFO CORP................................................... 17 1,650 * MASTEC, INC.................................................... 11 2,162 * MATRIXONE, INC................................................. 28 22,221 * MAXIM INTEGRATED PRODUCTS, INC................................. 1,167 13,552 * MAXTOR CORP.................................................... 86 400 * MCAFEE.COM CORP................................................ 14 1,444 * MCDATA CORP (CLASS A).......................................... 35 700 * MCSI, INC...................................................... 16 500 * MEASUREMENT SPECIALTIES, INC................................... 5 3,000 * MEMC ELECTRONIC MATERIALS, INC................................. 11 4,700 * MENTOR GRAPHICS CORP........................................... 111 1,352 * MERCURY COMPUTER SYSTEMS, INC.................................. 53 5,218 * MERCURY INTERACTIVE CORP....................................... 177 940 * MERIX CORP..................................................... 16 1,700 * METASOLV, INC.................................................. 13 2,300 * METAWAVE COMMUNICATIONS CORP................................... 7 2,400 METHODE ELECTRONICS, INC (CLASS A)............................. 19 2,275 * METTLER-TOLEDO INTERNATIONAL, INC.............................. 118 4,700 * MICREL, INC.................................................... 123 746 * MICRO GENERAL CORP............................................. 10 9,677 * MICROCHIP TECHNOLOGY, INC...................................... 375 5,400 * MICROMUSE, INC................................................. 81 39,307 * MICRON TECHNOLOGY, INC......................................... 1,219 SHARES VALUE (000) -------- ----------- 2,014 * MICROSEMI CORP................................................. $ 60 317,440 * MICROSOFT CORP................................................. 21,030 2,100 * MICROSTRATEGY, INC............................................. 8 1,666 * MICROTUNE, INC................................................. 39 730 * MICROVISION, INC............................................... 10 2,400 * MIPS TECHNOLOGIES, INC (CLASS A)............................... 21 582 * MIPS TECHNOLOGIES, INC (CLASS B)............................... 5 1,434 * MKS INSTRUMENTS, INC........................................... 39 300 * MOLDFLOW CORP.................................................. 4 10,170 MOLEX, INC..................................................... 315 4 * MOMENTUM BUSINESS APPLICATIONS, INC (CLASS A).................. 0 161,538 MOTOROLA, INC.................................................. 2,426 1,100 * MRO SOFTWARE, INC.............................................. 26 5,858 * MRV COMMUNICATIONS, INC........................................ 25 1,508 MTS SYSTEMS CORP............................................... 15 1,972 * MULTEX.COM, INC................................................ 9 500 * NANOMETRICS, INC............................................... 10 500 * NATIONAL PROCESSING, INC....................................... 16 12,750 * NATIONAL SEMICONDUCTOR CORP.................................... 393 864 * NAVIGANT INTERNATIONAL, INC.................................... 10 6,676 * NCR CORP....................................................... 246 2,331 NDCHEALTH CORP................................................. 81 1,200 * NET2PHONE, INC................................................. 8 1,742 * NETEGRITY, INC................................................. 34 2,976 * NETIQ CORP..................................................... 105 3,300 * NETRO CORP..................................................... 12 1,000 * NETSCOUT SYSTEMS, INC.......................................... 8 21,099 * NETWORK APPLIANCE, INC......................................... 461 9,999 * NETWORK ASSOCIATES, INC........................................ 258 3,837 * NEW FOCUS, INC................................................. 15 2,500 NEWPORT CORP................................................... 48 1,500 * NEXT LEVEL COMMUNICATIONS, INC................................. 5 2,800 * NMS COMMUNICATIONS CORP........................................ 13 775 * NORTHFIELD LABORATORIES, INC................................... 7 1,000 * NOVADIGM, INC.................................................. 9 25,705 * NOVELL, INC.................................................... 118 9,847 * NOVELLUS SYSTEMS, INC.......................................... 388 1,400 * NU HORIZONS ELECTRONICS CORP................................... 14 1,939 * NUANCE COMMUNICATIONS, INC..................................... 18 1,360 * NUMERICAL TECHNOLOGIES, INC.................................... 48 7,500 * NVIDIA CORP.................................................... 502 1,700 * NYFIX, INC..................................................... 34 3,700 * OAK TECHNOLOGY, INC............................................ 51 2,300 * ON SEMICONDUCTOR CORP.......................................... 5 7,312 * ONI SYSTEMS CORP............................................... 46 2,300 * ONYX SOFTWARE CORP............................................. 9 12,537 * OPENWAVE SYSTEMS, INC.......................................... 123 8,470 * OPLINK COMMUNICATIONS, INC..................................... 16 600 * OPNET TECHNOLOGIES, INC........................................ 9 302,057 * ORACLE CORP.................................................... 4,171 1,100 * OTG SOFTWARE, INC.............................................. 11 1,442 * OVERTURE SERVICES, INC......................................... 51 1,600 * PACKETEER, INC................................................. 12 40,672 * PALM, INC...................................................... 158 18,864 * PARAMETRIC TECHNOLOGY CORP..................................... 147 1,250 PARK ELECTROCHEMICAL CORP...................................... 33 2,975 * PAXAR CORP..................................................... 42 2,900 * PAXSON COMMUNICATIONS CORP..................................... 30 23,113 PAYCHEX, INC................................................... 805 900 * PC-TEL, INC.................................................... 9 200 * PEC SOLUTIONS, INC............................................. 8 1,800 * PECO II, INC................................................... 11 1,600 * PEGASUS SOLUTIONS, INC......................................... 23 18,995 * PEOPLESOFT, INC................................................ 764 12,249 * PEREGRINE SYSTEMS, INC......................................... 182 600 * PERFORMANCE TECHNOLOGIES, INC.................................. 8 1,500 * PERICOM SEMICONDUCTOR CORP..................................... 22 4,500 * PEROT SYSTEMS CORP (CLASS A)................................... 92 B-47 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- TECHNOLOGY--(Continued) 1,700 * PHOENIX TECHNOLOGIES LTD....................................... $ 20 1,900 * PHOTRONICS, INC................................................ 60 2,019 PIONEER-STANDARD ELECTRONICS, INC.............................. 26 1,590 * PIXELWORKS, INC................................................ 26 756 * PLANAR SYSTEMS, INC............................................ 16 2,499 * PLANTRONICS, INC............................................... 64 3,000 * PLEXUS CORP.................................................... 80 1,200 * PLX TECHNOLOGY, INC............................................ 15 11,927 * PMC-SIERRA, INC................................................ 254 6,406 * POLYCOM, INC................................................... 218 1,400 * POMEROY COMPUTER RESOURCES, INC................................ 19 7,300 * PORTAL SOFTWARE, INC........................................... 15 458 * POWELL INDUSTRIES, INC......................................... 9 1,900 * POWER INTEGRATIONS, INC........................................ 43 4,257 * POWERWAVE TECHNOLOGIES, INC.................................... 74 1,600 * PRI AUTOMATION, INC............................................ 33 1,200 * PROBUSINESS SERVICES, INC...................................... 23 2,850 * PROFIT RECOVERY GROUP INTERNATIONAL, INC....................... 23 2,131 * PROGRESS SOFTWARE CORP......................................... 37 2,427 * PROTON ENERGY SYSTEMS.......................................... 20 1,900 * PROXIM, INC.................................................... 19 2,500 * PUMATECH, INC.................................................. 6 6,755 * QLOGIC CORP.................................................... 301 1,050 * QRS CORP....................................................... 15 55,508 * QUALCOMM, INC.................................................. 2,803 11,676 * QUANTUM CORP (DLT & STORAGE GROUP)............................. 115 2,397 * QUEST SOFTWARE, INC............................................ 53 449 QUIXOTE CORP................................................... 9 1,100 * RADIANT SYSTEMS, INC........................................... 13 1,100 * RADISYS CORP................................................... 22 1,700 * RAINBOW TECHNOLOGIES, INC...................................... 13 5,900 * RAMBUS, INC.................................................... 47 14,497 * RATIONAL SOFTWARE CORP......................................... 283 8,725 * READ-RITE CORP................................................. 58 6,483 * REALNETWORKS, INC.............................................. 39 2,416 * RED HAT, INC................................................... 17 9,318 * REDBACK NETWORKS, INC.......................................... 37 1,348 * REGISTER.COM, INC.............................................. 16 573 * RENAISSANCE LEARNING, INC...................................... 17 700 * RESEARCH FRONTIERS, INC........................................ 12 3,430 * RETEK, INC..................................................... 102 3,914 REYNOLDS & REYNOLDS CO (CLASS A)............................... 95 9,640 * RF MICRO DEVICES, INC.......................................... 185 8,416 * RIVERSTONE NETWORKS, INC....................................... 140 1,100 * ROGERS CORP.................................................... 33 1,218 * ROXIO, INC..................................................... 20 3,900 * RSA SECURITY, INC.............................................. 68 688 * RUDOLPH TECHNOLOGIES, INC...................................... 24 4,400 * S1 CORP........................................................ 71 1,774 * SABA SOFTWARE, INC............................................. 9 9,000 * SAFEGUARD SCIENTIFICS, INC..................................... 32 1,900 * SAGA SYSTEMS, INC ESCROW....................................... 0 1,200 * SANCHEZ COMPUTER ASSOCIATES, INC............................... 10 4,983 * SANDISK CORP................................................... 72 37,131 * SANMINA-SCI CORP............................................... 739 5,900 * SAPIENT CORP................................................... 46 700 * SATCON TECHNOLOGY CORP......................................... 4 1,000 * SBS TECHNOLOGIES, INC.......................................... 15 418 * SCANSOURCE, INC................................................ 20 11,366 SCIENTIFIC-ATLANTA, INC........................................ 272 1,300 * SCM MICROSYSTEMS, INC.......................................... 19 1,300 * SEACHANGE INTERNATIONAL, INC................................... 44 2,000 * SECURE COMPUTING CORP.......................................... 41 2,015 * SEEBEYOND TECHNOLOGY CORP...................................... 20 1,000 * SELECTICA, INC................................................. 6 1,100 * SEMITOOL, INC.................................................. 13 4,548 * SEMTECH CORP................................................... 162 SHARES VALUE (000) -------- ----------- 1,100 * SERENA SOFTWARE, INC........................................... $ 24 27,310 * SIEBEL SYSTEMS, INC............................................ 764 1,295 * SIGNALSOFT CORP................................................ 6 14,700 * SILICON GRAPHICS, INC.......................................... 31 4,000 * SILICON IMAGE, INC............................................. 15 300 * SILICON LABORATORIES, INC...................................... 10 5,900 * SILICON STORAGE TECHNOLOGY, INC................................ 57 500 * SILICONIX, INC................................................. 14 300 * SIMPLEX SOLUTIONS, INC......................................... 5 1,600 * SIPEX CORP..................................................... 21 700 * SIRENZA MICRODEVICES, INC...................................... 4 3,700 * SITEL CORP..................................................... 9 46,019 * SOLECTRON CORP................................................. 519 2,000 * SOMERA COMMUNICATIONS, INC..................................... 15 6,700 * SONICBLUE, INC................................................. 27 2,888 * SONICWALL, INC................................................. 56 11,145 * SONUS NETWORKS, INC............................................ 51 900 * SORRENTO NETWORKS CORP......................................... 3 1,100 * SPECTRALINK CORP............................................... 19 841 * SPECTRIAN CORP................................................. 9 1,766 * SPEECHWORKS INTERNATIONAL, INC................................. 20 900 * SPSS, INC...................................................... 16 1,100 * STANDARD MICROSYSTEMS CORP..................................... 17 4,700 * STARBASE CORP.................................................. 3 7,600 * STORAGE TECHNOLOGY CORP........................................ 157 4,277 * STORAGENETWORKS, INC........................................... 26 3,927 * STRATOS LIGHTWAVE, INC......................................... 24 235,353 * SUN MICROSYSTEMS, INC.......................................... 2,890 20,284 * SUNGARD DATA SYSTEMS, INC...................................... 587 1,300 * SUNRISE TELECOM, INC........................................... 5 600 * SUPERTEX, INC.................................................. 11 1,700 * SUPPORT.COM, INC............................................... 11 400 * SUREBEAM CORP (CLASS A)........................................ 4 7,279 * SYBASE, INC.................................................... 115 9,939 * SYCAMORE NETWORKS, INC......................................... 53 1,700 * SYKES ENTERPRISES, INC......................................... 16 5,250 * SYMANTEC CORP.................................................. 348 16,501 SYMBOL TECHNOLOGIES, INC....................................... 262 1,700 * SYMMETRICOM, INC............................................... 13 4,273 * SYNOPSYS, INC.................................................. 252 1,200 * SYNPLICITY, INC................................................ 16 800 * SYNTEL, INC.................................................... 10 2,600 * SYSTEMS & COMPUTER TECHNOLOGY CORP............................. 27 2,600 * TAKE-TWO INTERACTIVE SOFTWARE, INC............................. 42 3,730 * TECH DATA CORP................................................. 161 2,100 TECHNITROL, INC................................................ 58 3,400 * TEKELEC........................................................ 62 6,300 * TEKTRONIX, INC................................................. 162 29,495 * TELLABS, INC................................................... 441 656 * TELLIUM, INC................................................... 4 13,093 * TERADYNE, INC.................................................. 395 4,400 * TERAYON COMMUNICATION SYSTEMS, INC............................. 36 125,735 TEXAS INSTRUMENTS, INC......................................... 3,521 1,200 * THERMA-WAVE, INC............................................... 18 12,988 * THERMO ELECTRON CORP........................................... 310 1,600 * THREE-FIVE SYSTEMS, INC........................................ 25 4,483 * TIBCO SOFTWARE, INC............................................ 67 4,429 * TITAN CORP..................................................... 111 1,200 * TIVO, INC...................................................... 8 1,000 * TOLLGRADE COMMUNICATIONS, INC.................................. 33 2,800 TOTAL SYSTEM SERVICES, INC..................................... 59 2,500 * TRANSACTION SYSTEMS ARCHITECTS, INC (CLASS A).................. 31 6,761 * TRANSMETA CORP................................................. 15 6,600 * TRANSWITCH CORP................................................ 30 1,800 * TRIMBLE NAVIGATION LTD......................................... 29 1,000 * TRIPATH TECHNOLOGY, INC........................................ 2 9,392 * TRIQUINT SEMICONDUCTOR, INC.................................... 115 1,600 * TRIZETTO GROUP, INC............................................ 21 B-48 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- TECHNOLOGY--(Continued) 800 * TTM TECHNOLOGIES, INC.......................................... $ 8 500 * TURNSTONE SYSTEMS, INC......................................... 2 900 b* U.S. WIRELESS CORP............................................. 0 4,000 * UCAR INTERNATIONAL, INC........................................ 43 640 * ULTICOM, INC................................................... 6 500 * ULTIMATE ELECTRONICS, INC...................................... 15 1,453 * ULTRATECH STEPPER, INC......................................... 24 23,114 * UNISYS CORP.................................................... 290 920 UNITED INDUSTRIAL CORP......................................... 15 3,500 * UNIVERSAL ACCESS GLOBAL HOLDINGS, INC.......................... 16 1,000 * UNIVERSAL DISPLAY CORP......................................... 9 2,798 * UTSTARCOM, INC................................................. 80 2,200 * VA SOFTWARE CORP............................................... 5 2,400 * VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC................. 83 2,100 * VEECO INSTRUMENTS, INC......................................... 76 16,784 * VERISIGN, INC.................................................. 638 29,083 * VERITAS SOFTWARE CORP.......................................... 1,304 2,117 * VERITY, INC.................................................... 43 4,981 * VERTICALNET, INC............................................... 7 2,601 * VIALTA, INC (CLASS A).......................................... 3 3,900 * VIASYSTEMS GROUP, INC.......................................... 2 1,500 * VICOR CORP..................................................... 24 2,800 * VIEWPOINT CORP................................................. 19 17,993 * VIGNETTE CORP.................................................. 97 600 * VIRAGE LOGIC CORP.............................................. 12 10,118 * VISHAY INTERTECHNOLOGY, INC.................................... 197 2,500 * VISUAL NETWORKS, INC........................................... 12 13,836 * VITESSE SEMICONDUCTOR CORP..................................... 172 5,000 * VITRIA TECHNOLOGY, INC......................................... 32 500 * VOLT INFORMATION SCIENCES, INC................................. 9 2,900 WALLACE COMPUTER SERVICES, INC................................. 55 1,500 * WATCHGUARD TECHNOLOGIES, INC................................... 10 3,900 * WAVE SYSTEMS CORP (CLASS A).................................... 9 1,342 * WEBEX COMMUNICATIONS, INC...................................... 33 1,684 * WEBMETHODS, INC................................................ 28 1,184 * WEBSENSE, INC.................................................. 38 1,000 * WESCO INTERNATIONAL, INC....................................... 5 13,500 * WESTERN DIGITAL CORP........................................... 85 3,645 * WESTERN MULTIPLEX CORP (CLASS A)............................... 20 563 * WILSON GREATBATCH TECHNOLOGIES, INC............................ 20 4,563 * WIND RIVER SYSTEMS, INC........................................ 82 1,300 * WIRELESS FACILITIES, INC....................................... 9 1,000 * WITNESS SYSTEMS, INC........................................... 13 1,000 * WJ COMMUNICATIONS, INC......................................... 4 700 WOODHEAD INDUSTRIES, INC....................................... 11 1,576 * XICOR, INC..................................................... 17 22,994 * XILINX, INC.................................................... 898 3,300 * XYBERNAUT CORP................................................. 8 24,316 * YAHOO!, INC.................................................... 431 1,900 * ZEBRA TECHNOLOGIES CORP (CLASS A).............................. 105 1,200 * ZIXIT CORP..................................................... 6 1,300 * ZORAN CORP..................................................... 42 1,200 * ZYGO CORP...................................................... 19 --------- TOTAL TECHNOLOGY............................................... 157,447 --------- TRANSPORTATION--1.06% 3,500 AIRBORNE, INC.................................................. 52 4,500 * AIRTRAN HOLDINGS, INC.......................................... 30 1,900 * ALASKA AIR GROUP, INC.......................................... 55 2,500 * AMERICA WEST HOLDINGS CORP (CLASS B)........................... 9 11,200 * AMR CORP....................................................... 248 200 * AMTRAN, INC.................................................... 3 1,500 * ARKANSAS BEST CORP............................................. 43 2,500 * ATLANTIC COAST AIRLINES HOLDINGS, INC.......................... 58 1,100 * ATLAS AIR WORLDWIDE HOLDINGS, INC.............................. 16 1,950 * BE AEROSPACE, INC.............................................. 18 28,215 BURLINGTON NORTHERN SANTA FE CORP.............................. 805 SHARES VALUE (000) -------- ----------- 4,771 C.H. ROBINSON WORLDWIDE, INC................................... $ 138 3,500 CNF, INC....................................................... 117 2,150 * CONSOLIDATED FREIGHTWAYS CORP.................................. 11 3,981 * CONTINENTAL AIRLINES, INC (CLASS B)............................ 104 200 * COVENANT TRANSPORT, INC (CLASS A).............................. 3 15,442 CSX CORP....................................................... 541 8,923 DELTA AIR LINES, INC........................................... 261 2,500 * EGL, INC....................................................... 35 3,465 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.................... 197 21,659 * FEDEX CORP..................................................... 1,124 1,140 FLORIDA EAST COAST INDUSTRIES, INC (CLASS A)................... 26 1,100 * FORWARD AIR CORP............................................... 37 2,050 * FRONTIER AIRLINES, INC......................................... 35 1,096 * HEARTLAND EXPRESS, INC......................................... 30 1,126 * HUNT (J.B.) TRANSPORT SERVICES, INC............................ 26 4,250 * KANSAS CITY SOUTHERN INDUSTRIES, INC........................... 60 1,125 * KNIGHT TRANSPORTATION, INC..................................... 21 700 * LANDSTAR SYSTEM, INC........................................... 51 2,151 * MESA AIR GROUP, INC............................................ 16 600 * MESABA HOLDINGS, INC........................................... 4 800 * MIDWEST EXPRESS HOLDINGS, INC.................................. 12 27,897 NORFOLK SOUTHERN CORP.......................................... 511 3,468 * NORTHWEST AIRLINES CORP........................................ 54 1,900 OVERSEAS SHIPHOLDING GROUP, INC................................ 43 1,221 * RAILAMERICA, INC............................................... 18 900 ROADWAY CORP................................................... 33 3,857 RYDER SYSTEM, INC.............................................. 85 9,741 * SABRE HOLDINGS CORP............................................ 413 2,200 SHURGARD STORAGE CENTERS, INC (CLASS A)........................ 70 3,600 SKYWEST, INC................................................... 92 55,529 SOUTHWEST AIRLINES CO.......................................... 1,028 4,165 * SWIFT TRANSPORTATION CO, INC................................... 90 4,800 * U.S. AIRWAYS GROUP, INC........................................ 30 3,900 * UAL CORP....................................................... 53 18,070 UNION PACIFIC CORP............................................. 1,030 16,529 UNITED PARCEL SERVICE, INC (CLASS B)........................... 901 1,900 USFREIGHTWAYS CORP............................................. 60 2,050 WERNER ENTERPRISES, INC........................................ 50 1,800 * YELLOW CORP.................................................... 45 --------- TOTAL TRANSPORTATION........................................... 8,792 --------- UTILITIES--8.49% 256,905 A T & T CORP................................................... 4,660 3,171 * A T & T LATIN AMERICA CORP (CLASS A)........................... 4 153,664 * A T & T WIRELESS SERVICES, INC................................. 2,208 2,200 * ADELPHIA BUSINESS SOLUTIONS, INC............................... 1 31,017 * AES CORP....................................................... 507 4,000 AGL RESOURCES, INC............................................. 92 900 * AIRGATE PCS, INC............................................... 41 5,002 * ALAMOSA HOLDINGS, INC.......................................... 60 700 * ALASKA COMMUNICATIONS SYSTEMS GROUP, INC....................... 6 8,941 ALLEGHENY ENERGY, INC.......................................... 324 6,033 * ALLEGIANCE TELECOM, INC........................................ 50 1,866 * ALLEN TELECOM, INC............................................. 16 6,000 ALLETE, INC.................................................... 151 5,692 ALLIANT ENERGY CORP............................................ 173 22,548 ALLTEL CORP.................................................... 1,392 9,963 AMEREN CORP.................................................... 421 23,314 AMERICAN ELECTRIC POWER CO, INC................................ 1,015 12,572 * AMERICAN TOWER CORP (CLASS A).................................. 119 1,286 * AQUILA, INC.................................................... 22 2,986 ATMOS ENERGY CORP.............................................. 63 3,500 AVISTA CORP.................................................... 46 136,300 BELLSOUTH CORP................................................. 5,198 1,900 BLACK HILLS CORP............................................... 64 15,886 * BROADWING, INC................................................. 151 22,092 * CALPINE CORP................................................... 371 800 CASCADE NATURAL GAS CORP....................................... 18 B-49 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- UTILITIES--(Continued) 500 * CENTENNIAL COMMUNICATIONS CORP................................. $ 5 846 CENTRAL VERMONT PUBLIC SERVICE CORP............................ 14 10,272 CENTURYTEL, INC................................................ 337 1,200 CH ENERGY GROUP, INC........................................... 52 520 * CHILES OFFSHORE, INC........................................... 10 900 * CHOICE ONE COMMUNICATIONS, INC................................. 3 11,453 CINERGY CORP................................................... 383 21,080 * CITIZENS COMMUNICATIONS CO..................................... 225 2,985 CLECO CORP..................................................... 66 9,600 CMS ENERGY CORP................................................ 231 800 * COMMONWEALTH TELEPHONE ENTERPRISES, INC........................ 36 5,925 CONECTIV....................................................... 145 556 CONNECTICUT WATER SERVICE, INC................................. 16 15,362 CONSOLIDATED EDISON, INC....................................... 620 11,903 CONSTELLATION ENERGY GROUP, INC................................ 316 13,841 * CROWN CASTLE INTERNATIONAL CORP................................ 148 1,200 CT COMMUNICATIONS, INC......................................... 20 2,000 * DOBSON COMMUNICATIONS CORP (CLASS A)........................... 17 18,851 DOMINION RESOURCES, INC........................................ 1,133 9,211 DPL, INC....................................................... 222 4,100 DQE, INC....................................................... 78 11,781 DTE ENERGY CO.................................................. 494 56,382 DUKE ENERGY CORP............................................... 2,214 17,263 DYNEGY, INC (CLASS A).......................................... 440 23,631 * EDISON INTERNATIONAL........................................... 357 37,022 EL PASO CORP................................................... 1,652 3,600 * EL PASO ELECTRIC CO............................................ 52 1,300 EMPIRE DISTRICT ELECTRIC CO.................................... 27 2,000 ENERGEN CORP................................................... 49 8,444 ENERGY EAST CORP............................................... 160 53,646 b ENRON CORP..................................................... 32 14,018 ENTERGY CORP................................................... 548 4,606 EQUITABLE RESOURCES, INC....................................... 157 23,089 EXELON CORP.................................................... 1,106 21,377 FIRSTENERGY CORP............................................... 748 12,747 FPL GROUP, INC................................................. 719 3,022 * GENERAL COMMUNICATION, INC (CLASS A)........................... 26 17,200 b* GEOTEK COMMUNICATIONS, INC..................................... 0 500 * GOLDEN TELECOM, INC............................................ 6 4,500 GREAT PLAINS ENERGY, INC....................................... 113 2,600 HAWAIIAN ELECTRIC INDUSTRIES, INC.............................. 105 1,000 HICKORY TECH CORP.............................................. 17 2,700 IDACORP, INC................................................... 110 1,708 * IDT CORP....................................................... 33 1,600 * IDT CORP (CLASS B)............................................. 27 900 * IMPSAT FIBER NETWORKS, INC..................................... 0 2,613 * ITC DELTACOM, INC.............................................. 2 9,966 KEYSPAN CORP................................................... 345 5,998 KINDER MORGAN, INC............................................. 334 1,674 * L-3 COMMUNICATIONS HOLDINGS, INC............................... 151 1,400 LACLEDE GROUP, INC............................................. 33 2,209 * LEAP WIRELESS INTERNATIONAL, INC............................... 46 22,500 * LEVEL 3 COMMUNICATIONS, INC.................................... 113 1,200 MADISON GAS & ELECTRIC CO...................................... 32 39,967 * MCLEODUSA, INC (CLASS A)....................................... 15 5,000 MDU RESOURCES GROUP, INC....................................... 141 31,894 * METROMEDIA FIBER NETWORK, INC (CLASS A)........................ 14 370 MIDDLESEX WATER CO............................................. 13 24,685 * MIRANT CORP.................................................... 395 7,500 * MONTANA POWER CO............................................... 43 5,686 NATIONAL FUEL GAS CO........................................... 140 500 * NEON COMMUNICATIONS, INC....................................... 1 1,200 * NETWORK PLUS CORP.............................................. 1 1,300 NEW JERSEY RESOURCES CORP...................................... 61 3,260 * NEWPOWER HOLDINGS, INC......................................... 2 39,139 * NEXTEL COMMUNICATIONS, INC (CLASS A)........................... 429 3,200 * NEXTEL PARTNERS, INC (CLASS A)................................. 38 SHARES VALUE (000) -------- ----------- 10,794 * NIAGARA MOHAWK HOLDINGS, INC................................... $ 191 3,300 NICOR, INC..................................................... 137 14,552 NISOURCE, INC.................................................. 336 2,809 * NISOURCE, INC (SAILS).......................................... 7 1,000 NORTH PITTSBURGH SYSTEMS, INC.................................. 19 10,215 NORTHEAST UTILITIES............................................ 180 1,750 NORTHWEST NATURAL GAS CO....................................... 45 1,800 NORTHWESTERN CORP.............................................. 38 3,724 * NRG ENERGY, INC................................................ 58 3,796 NSTAR.......................................................... 170 1,200 * NTELOS, INC.................................................... 19 12,152 * NTL, INC....................................................... 11 1,000 NUI CORP....................................................... 24 5,600 OGE ENERGY CORP................................................ 129 3,890 ONEOK, INC..................................................... 69 2,160 * ORION POWER HOLDINGS........................................... 56 1,800 OTTER TAIL CORP................................................ 52 28,078 * P G & E CORP................................................... 540 2,500 PEOPLES ENERGY CORP............................................ 95 1,637 * PETROQUEST ENERGY, INC......................................... 9 2,207 PIEDMONT NATURAL GAS CO, INC................................... 79 2,900 * PINNACLE HOLDINGS, INC......................................... 1 6,111 PINNACLE WEST CAPITAL CORP..................................... 256 2,868 PNM RESOURCES, INC............................................. 80 7,269 POTOMAC ELECTRIC POWER CO...................................... 164 10,499 PPL CORP....................................................... 366 3,400 * PRICE COMMUNICATIONS CORP...................................... 65 15,800 PROGRESS ENERGY, INC........................................... 711 5,000 * PROGRESS ENERGY, INC (CVO)..................................... 2 15,045 PUBLIC SERVICE ENTERPRISE GROUP, INC........................... 635 6,254 PUGET ENERGY, INC.............................................. 137 5,511 QUESTAR CORP................................................... 138 590 * QUICKSILVER RESOURCES, INC..................................... 11 97,955 QWEST COMMUNICATIONS INTERNATIONAL, INC........................ 1,384 2,342 * RCN CORP....................................................... 7 18,903 RELIANT ENERGY, INC............................................ 501 3,809 * RELIANT RESOURCES, INC......................................... 63 2,500 RGS ENERGY GROUP, INC.......................................... 94 576 * RURAL CELLULAR CORP (CLASS A).................................. 13 2,806 * SBA COMMUNICATIONS CORP........................................ 37 244,009 SBC COMMUNICATIONS, INC........................................ 9,558 7,576 SCANA CORP..................................................... 211 1,200 SEMCO ENERGY, INC.............................................. 13 14,797 SEMPRA ENERGY.................................................. 363 7,400 SIERRA PACIFIC RESOURCES....................................... 111 900 SOUTH JERSEY INDUSTRIES, INC................................... 29 49,644 SOUTHERN CO.................................................... 1,258 2,415 * SOUTHERN UNION CO.............................................. 46 2,132 SOUTHWEST GAS CORP............................................. 48 1,900 * SOUTHWESTERN ENERGY CO......................................... 20 4,900 * SPECTRASITE HOLDINGS, INC...................................... 18 56,767 SPRINT CORP (FON GROUP)........................................ 1,140 47,051 * SPRINT CORP (PCS GROUP)........................................ 1,149 9,800 TECO ENERGY, INC............................................... 257 4,227 * TELECORP PCS, INC (CLASS A).................................... 53 3,668 TELEPHONE & DATA SYSTEMS, INC.................................. 329 4,214 * TIME WARNER TELECOM, INC (CLASS A)............................. 75 2,562 * TRITON PCS HOLDINGS, INC (CLASS A)............................. 75 19,230 TXU CORP....................................................... 907 1,100 * U.S. CELLULAR CORP............................................. 50 2,222 * U.S. UNWIRED, INC (CLASS A).................................... 23 3,977 * UBIQUITEL, INC................................................. 30 2,037 UGI CORP....................................................... 62 939 UIL HOLDINGS CORP.............................................. 48 2,300 UNISOURCE ENERGY CORP.......................................... 42 8,431 UTILICORP UNITED, INC.......................................... 212 424 * VAST SOLUTIONS, INC (CLASS B1)................................. 0 424 * VAST SOLUTIONS, INC (CLASS B2)................................. 0 B-50 See Notes To Financial Statements
Statement of Investments -- STOCK INDEX ACCOUNT -- December 31, 2001 - ----------------------------------------------------------------------------------------------------
SHARES VALUE (000) -------- ----------- UTILITIES--(Continued) 424 * VAST SOLUTIONS, INC (CLASS B3)................................. $ 0 5,033 VECTREN CORP................................................... 121 197,053 VERIZON COMMUNICATIONS, INC.................................... 9,352 1,307 * WEST CORP...................................................... 33 1,500 WESTERN GAS RESOURCES, INC..................................... 48 4,500 WESTERN RESOURCES, INC......................................... 77 4,400 * WESTERN WIRELESS CORP (CLASS A)................................ 124 3,500 WGL HOLDINGS, INC.............................................. 102 33,472 * WILLIAMS COMMUNICATIONS GROUP, INC............................. 79 34,241 WILLIAMS COS, INC.............................................. 874 7,986 WISCONSIN ENERGY CORP.......................................... 180 8,507 WORLDCOM, INC (MCI GROUP)...................................... 108 214,749 * WORLDCOM, INC (WORLDCOM GROUP)................................. 3,022 2,000 WPS RESOURCES CORP............................................. 73 24,857 XCEL ENERGY, INC............................................... 690 18,756 * XO COMMUNICATIONS, INC (CLASS A)............................... 2 --------- TOTAL UTILITIES................................................ 70,732 --------- TOTAL COMMON STOCK (Cost $718,328).............................................. 829,378 --------- PRINCIPAL - ---------- SHORT TERM INVESTMENT--0.38% U.S. GOVERNMENT AND AGENCY--0.38% $3,200,000 FEDERAL HOME LOAN MORTGAGE CORP (FHLMC) 1.480%, 01/02/02............................................. 3,200 --------- TOTAL U.S. GOVERNMENT AND AGENCY............................... 3,200 --------- TOTAL SHORT TERM INVESTMENT (Cost $3,200)................................................ 3,200 --------- TOTAL PORTFOLIO--99.95% (Cost $721,671).............................................. 832,692 OTHER ASSETS & LIABILITIES, NET--0.05%......................... 407 --------- NET ASSETS--100.00%............................................ $ 833,099 =========
- ------------ * Non-income producing b In bankruptcy B-51 See Notes To Financial Statements [LOGO] TIAA CREF - ------------------------------------------------------------------------------- CHAIRMAN'S LETTER To the Policyholders of Teachers Insurance and Annuity Association of America: We are pleased to provide you with the accompanying audited statutory-basis financial statements of Teachers Insurance and Annuity Association of America ("TIAA") for the year ended December 31, 2001. We continue to manage TIAA in a prudent manner with the goal of maximizing our long-term performance within reasonable risk parameters for the long-term benefit of our policyholders. As you review these statements, it is also important to note that TIAA continues to maintain the highest possible financial strength ratings from each of the four nationally recognized independent rating organizations. The report of management responsibility, on the following page, demonstrates our ongoing commitment to conduct TIAA's activities in a well- controlled management environment. Additionally, the accompanying audit report indicates an unqualified opinion regarding TIAA's statutory-basis financial statements from the independent auditing firm of Ernst & Young LLP. These statements have been prepared in accordance with statutory accounting practices, a comprehensive basis of accounting comprised of accounting practices prescribed or permitted by the New York State Insurance Department ("Department"). There is also a reference in the auditors' report to accounting principles generally accepted in the United States ("GAAP"); this reference to GAAP is required by the auditors' professional standards. GAAP is an overall accounting methodology that, while similar in many respects to statutory accounting practices, is a separate basis of accounting. Statutory accounting is generally more conservative than GAAP, and these statutory-basis financial statements are not intended to be in conformity with GAAP. Statutory accounting is the only basis of accounting recognized by the Department for regulatory purposes, and it is the only basis of accounting used by the Department in measuring the financial condition and results of operations of an insurance company. It is also the basis for determining insurance company solvency under the New York Insurance Law. While we could prepare a separate set of GAAP financial statements, there is no legal requirement for us to do so. Additionally, TIAA does not believe at this time that it would be a worthwhile expenditure to maintain another separate set of financial records, particularly since it would provide little additional value for our policyholders. Accordingly, we believe that it is prudent for us to continue to manage and report on the operations of TIAA under the conservative statutory accounting methodology that we have always utilized. /S/ JOHN H. BIGGS -------------------------------- CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER B-52 [LOGO] TIAA CREF - ------------------------------------------------------------------------------- REPORT OF MANAGEMENT RESPONSIBILITY To the Policyholders of Teachers Insurance and Annuity Association of America: The accompanying statutory-basis financial statements of Teachers Insurance and Annuity Association of America ("TIAA") are the responsibility of management. They have been prepared on the basis of statutory accounting practices, a comprehensive basis of accounting comprised of accounting practices prescribed or permitted by the New York State Insurance Department. The financial statements of TIAA have been presented fairly and objectively in accordance with such statutory accounting practices. TIAA has established and maintains a strong system of internal controls designed to provide reasonable assurance that assets are properly safeguarded and transactions are properly executed in accordance with management's authorization, and to carry out the ongoing responsibilities of management for reliable financial statements. In addition, TIAA's internal audit personnel provide a continuing review of the internal controls and operations of TIAA, and the internal auditor regularly reports to the Audit Committee of the TIAA Board of Trustees. The independent auditing firm of Ernst & Young LLP has audited the accompanying statutory-basis financial statements of TIAA. To maintain auditor independence and avoid even the appearance of conflict of interest, it continues to be TIAA's policy that any non-audit services be obtained from a firm other than the external financial audit firm. The independent auditors' report expresses an independent opinion on the fairness of presentation of these statutory-basis financial statements. The Audit Committee of the TIAA Board of Trustees, comprised entirely of independent, nonmanagement trustees, meets regularly with management, representatives of Ernst & Young LLP and internal auditing personnel to review matters relating to financial reporting, internal controls and auditing. In addition to the annual audit of the TIAA financial statements, the New York State Insurance Department and other state insurance departments regularly examine the financial statements of TIAA as part of their periodic corporate examinations. /S/ JOHN H. BIGGS -------------------------------- CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER /S/ RICHARD L. GIBBS -------------------------------- EXECUTIVE VICE PRESIDENT AND PRINCIPAL ACCOUNTING OFFICER B-53 [LOGO] TIAA CREF - ------------------------------------------------------------------------------- REPORT OF THE AUDIT COMMITTEE To the Policyholders of Teachers Insurance and Annuity Association of America: The Audit Committee oversees the financial reporting process of Teachers Insurance and Annuity Association of America ("TIAA") on behalf of the Company's Board of Trustees. The Audit Committee is a standing committee of the Board and operates in accordance with a formal written charter (copies are available upon request) which describes the Audit Committee's responsibilities. All members of the Audit Committee ("Committee") are independent, as defined under the listing standards of the New York Stock Exchange. Management has the primary responsibility for TIAA's financial statements, development and maintenance of a strong system of internal controls, and compliance with applicable laws and regulations. In fulfilling its oversight responsibilities, the Committee reviewed and approved the audit plans of the internal auditing group and the independent auditing firm in connection with their respective audits. The Committee also meets regularly with the internal and independent auditors, both with and without management present, to discuss the results of their examinations, their evaluation of internal controls, and the overall quality of financial reporting. As required by its charter, the Committee will evaluate rotation of the external financial audit firm whenever circumstances warrant, but in no event will the evaluation be later than between their fifth and tenth years of service. The Committee reviewed and discussed the accompanying audited financial statements with management, including a discussion of the quality and appropriateness of the accounting principles and financial reporting practices followed, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Committee has also discussed the audited financial statements with Ernst & Young LLP, the independent auditing firm responsible for expressing an opinion on the conformity of these audited financial statements with statutory accounting principles. The discussion with Ernst & Young LLP focused on their judgments concerning the quality and appropriateness of the accounting principles and financial reporting practices followed by TIAA, the clarity of the financial statements and related disclosures, and other significant matters, such as any significant changes in accounting policies, management judgments and estimates, and the nature of any uncertainties or unusual transactions. In addition, the Committee discussed with Ernst & Young LLP the auditors' independence from management, and TIAA has received a written disclosure regarding such independence, as required by the Independence Standards Board. Based on the review and discussions referred to above, the Committee has approved the release of the accompanying audited financial statements for publication and filing with appropriate regulatory authorities. Willard T. Carleton, Audit Committee Chair Frederick R. Ford, Audit Committee Member Leonard S. Simon, Audit Committee Member Rosalie J. Wolf, Audit Committee Member B-54 [ERNST & YOUNG LETTERHEAD] REPORT OF INDEPENDENT AUDITORS To the Board of Trustees of Teachers Insurance and Annuity Association of America: We have audited the accompanying statutory-basis balance sheets of Teachers Insurance and Annuity Association of America ("TIAA") as of December 31, 2001 and 2000, and the related statutory-basis statements of operations, changes in capital and contingency reserves, and cash flows for the three years ended December 31, 2001. These financial statements are the responsibility of TIAA's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As described in Note 2 to the financial statements, TIAA presents its financial statements in conformity with accounting practices prescribed or permitted by the New York State Insurance Department, which practices differ from accounting principles generally accepted in the United States. The variances between such practices and accounting principles generally accepted in the United States are described in Note 2. The effects on the financial statements of these variances are not reasonably determinable but are presumed to be material. In our opinion, because of the effects of the matter described in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States, the financial position of TIAA at December 31, 2001 and 2000, or the results of its operations or its cash flows for the three years ended December 31, 2001. However, in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of TIAA at December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting practices prescribed or permitted by the New York State Insurance Department. As discussed in Note 2 to the financial statements, in 2001 TIAA changed various accounting policies to be in accordance with the revised National Association of Insurance Commissioners' Accounting Practices and Procedures Manual, as adopted by the New York State Insurance Department. /S/ ERNST & YOUNG LLP February 27, 2002 B-55 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA STATUTORY-BASIS BALANCE SHEETS (AMOUNTS IN THOUSANDS)
DECEMBER 31, ------------------------- 2001 2000 ------------ ------------ ASSETS Bonds ................................................. $ 87,013,371 $ 80,809,152 Mortgages ............................................. 23,068,264 21,952,809 Real estate ........................................... 4,927,282 5,296,235 Stocks ................................................ 2,205,332 1,738,069 Other long-term investments ........................... 3,304,292 3,329,278 Cash and short-term investments ....................... 2,892,904 2,577,223 Investment income due and accrued ..................... 1,339,451 1,286,268 Separate account assets ............................... 4,228,544 3,408,570 Other assets .......................................... 673,658 502,934 ------------ ------------ TOTAL ASSETS ...................................... $129,653,098 $120,900,538 ============ ============ LIABILITIES, CAPITAL AND CONTINGENCY RESERVES Policy and contract reserves .......................... $107,363,466 $ 99,859,231 Dividends declared for the following year ............. 2,364,877 2,197,454 Asset Valuation Reserve ............................... 2,619,461 2,870,533 Interest Maintenance Reserve .......................... 308,168 1,118,965 Separate account liabilities .......................... 4,228,544 3,408,570 Securities lending collateral ......................... 2,619,761 2,333,054 Other liabilities ..................................... 1,497,738 1,015,326 ------------ ------------ TOTAL LIABILITIES ................................. 121,002,015 112,803,133 ------------ ------------ Capital (2,500 shares of $1,000 par value common stock issued and outstanding) and paid-in surplus ......... 3,050 3,050 Contingency reserves: For investment losses, annuity and insurance mortality, and other risks ....................................... 8,648,033 8,094,355 ------------ ------------ TOTAL CAPITAL AND CONTINGENCY RESERVES............. 8,651,083 8,097,405 ------------ ------------ TOTAL LIABILITIES, CAPITAL AND CONTINGENCY RESERVES $129,653,098 $120,900,538 ============ ============
See notes to statutory-basis financial statements. B-56 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA STATUTORY-BASIS STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS)
For the Years Ended December 31, --------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INCOME Insurance and annuity premiums, deposits, and other considerations .............. $ 3,878,895 $ 3,594,805 $ 3,412,749 Transfers from CREF, net ........................................................ 1,402,316 572,211 752,512 Annuity dividend additions ...................................................... 3,059,734 2,728,562 2,553,655 Net investment income ........................................................... 8,819,579 8,556,537 7,923,564 ----------- ----------- ----------- TOTAL INCOME ................................................................ $17,160,524 $15,452,115 $14,642,480 =========== =========== ============ DISTRIBUTION OF INCOME Policy and contract benefits .................................................... $ 3,065,338 $ 2,976,305 $ 2,653,962 Dividends to policyholders ...................................................... 4,766,809 4,315,895 4,026,907 Increase in policy and contract reserves ........................................ 7,463,548 5,991,167 6,100,240 Operating expenses .............................................................. 412,789 356,975 335,039 Transfers to separate accounts, net ............................................. 615,228 527,255 490,880 Other, net ...................................................................... 20,499 (18,442) (11,437) Federal income tax expense (benefit) ............................................ 26,784 24,048 (25,213) Increase in contingency reserves from operations ................................ 789,529 1,278,912 1,072,102 ----------- ----------- ----------- TOTAL DISTRIBUTION OF INCOME ................................................ $17,160,524 $15,452,115 $14,642,480 =========== =========== =========== Net Income: Increase in contingency reserves from operations ................................ $ 789,529 $ 1,278,912 $ 1,072,102 Net realized capital gains (losses) less capital gains taxes, after transfers to Interest Maintenance Reserve ............................... (204,291) (56,916) (48,028) ----------- ----------- ----------- NET INCOME .................................................................. $ 585,238 $ 1,221,996 $ 1,024,074 =========== =========== ===========
See notes to statutory-basis financial statements. B-57 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA STATUTORY-BASIS STATEMENTS OF CHANGES IN CAPITAL AND CONTINGENCY RESERVES (AMOUNTS IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31, --------------------------------- 2001 2000 1999 ---------- ---------- ---------- CHANGES IN CAPITAL AND CONTINGENCY RESERVES Net income ................................................ $ 585,238 $1,221,996 $1,024,074 Net unrealized capital gains (losses) on investments ...... (574,266) 123,349 (112,613) Transfers (to) from the Asset Valuation Reserve ........... 251,073 (232,754) (183,656) Increase in non-admitted assets, other than investments ... (59,749) (40,614) (25,586) Cumulative effect of change in accounting principles 375,325 -- -- Other, net ................................................ (23,943) -- -- ---------- ---------- ---------- NET CHANGE IN CAPITAL AND CONTINGENCY RESERVES ...... 553,678 1,071,977 702,219 CAPITAL AND CONTINGENCY RESERVES AT BEGINNING OF YEAR 8,097,405 7,025,428 6,323,209 ---------- ---------- ---------- CAPITAL AND CONTINENCY RESERVES AT END OF YEAR....... $8,651,083 $8,097,405 $7,025,428 ========== ========== ==========
See notes to statutory-basis financial statements. B-58 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA STATUTORY-BASIS STATEMENTS OF CASH FLOWS (AMOUNTS IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31, ------------------------------------- 2001 2000 1999 ----------- ----------- ---------- CASH PROVIDED By operating activities: Insurance and annuity premiums, deposits and other considerations ...................... $ 3,881,155 $ 3,510,073 $ 3,408,713 Transfers from CREF, net ................................. 1,402,316 572,211 752,512 Annuity dividend additions ............................... 3,059,734 2,728,562 2,553,651 Investment income, net ................................... 8,629,197 8,378,040 7,692,392 ----------- ----------- ----------- TOTAL RECEIPTS ....................................... 16,972,402 15,188,886 14,407,268 Policy and contract benefits ............................... 3,065,118 2,879,903 2,655,772 Dividends .................................................. 4,599,385 4,158,047 3,910,764 Operating expenses ......................................... 414,953 353,859 325,039 Federal income tax expense (benefit) ....................... 4,819 2,168 (43,713) Transfers to separate accounts, net 615,980 526,334 492,504 Other, net ................................................. (245,545) (102,795) 183,783 ----------- ----------- ----------- TOTAL DISBURSEMENTS .................................. 8,451,710 7,817,516 7,524,149 ----------- ----------- ----------- CASH PROVIDED BY OPERATING ACTIVITIES ................ 8,520,692 7,371,370 6,883,119 ----------- ----------- ----------- By investing activities: Sales and redemptions of bonds and stocks ................ 16,183,365 10,427,498 10,428,890 Sales and repayments of mortgage principal ............... 2,941,103 2,894,511 3,716,069 Sales of real estate ..................................... 1,217,075 708,838 1,500,916 Other, net ............................................... 637,615 691,453 984,791 ----------- ----------- ----------- CASH PROVIDED BY INVESTING ACTIVITIES ................ 20,979,158 14,722,300 16,630,666 ----------- ----------- ----------- TOTAL CASH PROVIDED .................................. 29,499,850 22,093,670 23,513,785 ----------- ----------- ----------- DISBURSEMENTS FOR NEW INVESTMENTS Investments acquired: Bonds and stocks ......................................... 23,393,034 16,082,049 16,695,529 Mortgages ................................................ 4,188,459 3,508,065 4,894,308 Real estate .............................................. 874,974 978,864 590,720 Other, net ............................................... 727,702 1,738,448 898,779 ----------- ----------- ----------- TOTAL DISBURSEMENTS FOR NEW INVESTMENTS .............. 29,184,169 22,307,426 23,079,336 ----------- ----------- ----------- INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS 315,681 (213,756) 434,449 CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF YEAR.. 2,577,223 2,790,979 2,356,530 ----------- ----------- ----------- CASH AND SHORT-TERM INVESTMENTS AT END OF YEAR........ $ 2,892,904 $ 2,577,223 $ 2,790,979 =========== =========== ===========
See notes to statutory-basis financial statements. B-59 TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS DECEMBER 31, 2001 NOTE 1 - ORGANIZATION Teachers Insurance and Annuity Association of America ("TIAA") was established as a legal reserve life insurance company under the insurance laws of the State of New York in 1918. Its purpose is to aid and strengthen nonprofit educational and research organizations, governmental entities and other nonprofit institutions by providing retirement and insurance benefits for their employees and their families, and by counseling these organizations and their employees on benefit plans and other measures of economic security. All of the outstanding common stock of TIAA is collectively held by the TIAA Board of Overseers, a nonprofit corporation created solely for the purpose of holding the stock of TIAA. By charter, TIAA operates without profit to the corporation or its sole shareholder, the TIAA Board of Overseers. As a result, all contingency reserves are held solely to provide benefits in accordance with TIAA's charter purpose. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES TIAA's statutory-basis financial statements have been prepared on the basis of statutory accounting practices prescribed or permitted by the New York State Insurance Department ("Department"), a comprehensive basis of accounting that differs from accounting principles generally accepted in the United States ("GAAP"). (Refer to the section titled "Accounting Principles Generally Accepted in the United States" within this note.) Accounting changes adopted to conform to the provisions of the National Association of Insurance Commissioners' ("NAIC") Accounting Practices and Procedures Manual, ("NAIC SAP") are reported as changes in accounting principles. The cumulative effect of changes in accounting principles is reported as an adjustment to contingency reserves in the period of the changes in accounting principles. The cumulative effect is the difference between the amount of capital and contingency reserves at the beginning of the year and the amount of capital and contingency reserves that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods. As a result of these changes, TIAA reported a change in accounting principles as an adjustment that increased contingency reserves by approximately $375,325,000, as follows: AS OF JANUARY 1, 2001 --------------------- Adjustment to the Interest Maintenance Reserve ... $ 895,068,000 Temporary and other than temporary impairments ... (276,685,000) Adjustment to accumulated depreciation ........... (217,377,000) Long-term disability deficiency reserves ......... (22,313,000) Adjustment to sundry receivables ................. (3,368,000) ------------- Total Contingency Reserves Adjustment........... $ 375,325,000 ============= ADJUSTMENT TO INTEREST MAINTENANCE RESERVE Prior to the changes in accounting principles noted above (which are collectively referred to as Codification), TIAA recorded prepayment premiums received from borrowers in connection with early repayments on bond and mortgage loan investments as realized capital gains that were credited to the Interest Maintenance Reserve ("IMR"). As a result of changes required under Codification, prepayment premiums received during 2001 have been recorded as investment income. The Codification adjustment to the IMR reflected in the table above represents the release to TIAA's contingency reserves of the portion of the IMR balance at December 31, 2000 that represented unamortized realized capital gains that were related to prepayment premiums received prior to 2001. TEMPORARY AND OTHER THAN TEMPORARY IMPAIRMENTS: Prior to 2001, TIAA evaluated its real estate and mortgage investments on a case-by-case basis to identify potential impairments consistent with policies established by an internal monitoring committee. The committee performed an adequacy test of TIAA's investment-related reserves by considering the mortgage and real estate-related balances contained within the Asset Valuation Reserve ("AVR") when determining the need to establish other, specific reserves for temporary impairments. When impairments considered to be other than temporary were identified, the committee had such amounts written off as permanent reductions in the carrying values of the assets and treated such amounts as realized capital losses that were charged against the AVR. Codification established specific requirements for the establishment of valuation allowances for temporary impairments in the value of mortgage and real estate investments in addition to the investment-related reserves contained in the AVR. Additionally, Codification introduced a "held for sale" category for real estate investments that requires such investments to be carried at the lower of fair value or depreciated cost (i.e., carrying value). TIAA's internal monitoring committee has modified its policies for identifying and determining impairments to comply with the new requirements under Codification. TIAA identifies real estate assets to be evaluated for impairment based on estimated fair values that are determined annually for the entire real estate portfolio. If a real estate investment's carrying value exceeds its estimated fair value, then the asset's estimated future cash flows are analyzed to determine whether the asset is impaired in accordance with the standards under Codification. Once an asset is determined to be impaired, the impairment is determined by comparing the investment's carrying value to its appraised value. A valuation allowance is established for a temporary impairment by recording an unrealized capital loss that is charged against B-60 the AVR; for an impairment that is considered to be other than temporary, a permanent write-down of an asset's carrying value is recorded as a realized capital loss, which is also charged against the AVR. TIAA also identifies "held for sale" real estate, and records valuation allowances to reflect such real estate assets at the lower of their estimated fair value or carrying value. The real estate-related adjustments required to implement the new standards under Codification at January 1, 2001 totaled approximately $198,300,000 and are reflected in the above table. TIAA identifies mortgages to be evaluated for impairment based on the expected collectibility of principal and interest according to the contractual terms of each mortgage loan. If collectibility is not considered to be probable, the mortgage is considered to be impaired. Mortgage impairments are determined by comparing the carrying value of the impaired loan to the estimated fair value of the underlying collateral. The extent of the impairment amount and the estimated future cash flows of the underlying real estate property will determine whether the impairment is considered to be temporary or other than temporary. In accordance with the requirements of Codification, TIAA sets up valuation allowances to reflect temporary impairments on mortgages by recording an unrealized capital loss that is charged against the AVR. These valuation allowances are determined independently of the mortgage loan-related balance in the AVR. For impairments considered to be other than temporary, a permanent write- down of the mortgage loan's carrying value is recorded as a realized capital loss that is charged against the AVR. The mortgage-related adjustments required to implement the new standards under Codification at January 1, 2001 totaled approximately $78,400,000 and are reflected in the above table. ACCUMULATED DEPRECIATION Prior to Codification, TIAA utilized the sinking fund method of depreciation for real estate investments acquired between January 1, 1980 and December 31, 1990. Codification requires that all real estate be depreciated using the straight-line method. The adjustment to accumulated depreciation reflected in the above table represents the cumulative impact of converting the affected real estate assets to the straight-line method of depreciation. This real estate-related adjustment totaled approximately $206,800,000. In addition, depreciation periods for EDP equipment and software were shortened to three years, resulting in an adjustment of approximately $10,586,000. RESERVE ADJUSTMENTS Long-term disability deficiency reserve adjustments are discussed in Note 13. The Department has certain statutory accounting practices that differ from those found in NAIC SAP. For example, the Department does not permit deferred federal income taxes to be recognized. Reconciliations of TIAA's net income and contingency reserves between NAIC SAP and statutory accounting practices prescribed by the Department are shown below: 2001 -------------- Net Income, New York Basis ............... $ 585,238,455 New York Prescribed Practices: Additional Reserves for Term Conversions 315,046 -------------- Net Income, NAIC SAP ..................... $ 585,553,501 ============== Contingency Reserves, New York Basis ..... $8,648,033,153 New York Prescribed Practices: Additional Reserves for Term Conversions 315,046 Deferred Tax Asset ..................... 858,366,000 -------------- Contingency Reserves, NAIC SAP ........... $9,506,714,199 ============== The preparation of TIAA's financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by TIAA: STATEMENTS OF OPERATIONS TIAA's Statements of Operations now include net realized capital gains and losses, less capital gains taxes and transfers to the IMR, as a component of net income. Previously, this amount was included in the Statement of Changes in Capital and Contingency Reserves, as permitted by the Department. VALUATION OF INVESTMENTS Bonds and short-term investments (debt securities with maturities of one year or less at the time of acquisition) not in default are generally stated at amortized cost; medium to highest quality preferred stocks at cost; common stocks at market value; and all other bond, short-term and preferred stock investments at the lower of amortized cost or market value. For loan-backed bonds and structured securities, amortized cost is determined using actual and anticipated cash flows under the prospective method for interest-only securities and under the retrospective method for all other securities. Anticipated prepayments are based on life-to- date prepayment speeds, using historical cash flows, and internal estimates. Mortgages are stated at amortized cost and directly owned real estate at depreciated cost (net of encumbrances). Investments in wholly-owned subsidiaries, real estate limited partnerships and securities limited partnerships are stated at TIAA's equity in the net admitted assets of the underlying entities. Policy loans are stated at outstanding principal amounts. Separate account assets are generally stated at market value. Seed money investments in the TIAA- CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds and TIAA-CREF Life Funds are stated at market value. All investments are stated net of impairments which are considered to be other than temporary, which are determined on an individual asset basis. Depreciation of real estate investments is generally computed over a 40-year period on the straight-line method. B-61 ACCOUNTING FOR INVESTMENTS Investment transactions are accounted for as of the date the investments are purchased or sold (trade date). Realized capital gains and losses on investment transactions are accounted for under the specific identification method. SECURITIES LENDING: TIAA has a securities lending program whereby it loans securities to qualified brokers in exchange for cash collateral, generally at least equal to 102% of the market value of the securities loaned. When securities are loaned, TIAA receives additional income on the collateral and continues to receive income on the securities loaned. TIAA may bear the risk of delay in recovery of, or loss of rights in the securities loaned should a borrower of securities fail to return the securities in a timely manner. In order to minimize this risk, TIAA monitors the credit quality of its counterparties. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION: Investments denominated in foreign currencies and foreign currency contracts are valued in U.S. dollars, based on exchange rates at the end of the period. Investment transactions in foreign currencies are recorded at the exchange rates prevailing on the respective transaction dates. All other asset and liability accounts that are denominated in foreign currencies are adjusted to reflect exchange rates at the end of the period. Realized and unrealized gains and losses due to foreign exchange transactions, and those due to translation adjustments, are not separately reported and are reflected in realized and unrealized capital gains and losses, respectively. DERIVATIVE INSTRUMENTS TIAA has filed a Derivatives Use Plan with the Department. This plan details TIAA's derivative policy objectives, strategies and controls, and any restrictions placed on various derivative types. The plan also specifies the procedures and systems that TIAA has established to evaluate, monitor and report on the derivative portfolio in terms of valuation, effectiveness and counterparty credit quality. TIAA uses derivative instruments for hedging and asset replication purposes. TIAA enters into derivatives directly with counterparties of high credit quality (i.e., rated AA or better at time of inception) and monitors counterparty credit quality on an ongoing basis. TIAA's counterparty credit risk is limited to the positive fair value of its derivative positions, unless otherwise described below. FOREIGN CURRENCY SWAP CONTRACTS TIAA enters into foreign currency swap contracts to exchange fixed and variable amounts of foreign currency at specified future dates and at specified rates (in U.S. dollars) to hedge against currency risks on investments denominated in foreign currencies. Changes in the value of the contracts related to foreign currency exchange rates are recognized at the end of the period as unrealized gains or losses. Foreign currency swap contracts incorporate a series of swap transactions which result in the exchange of TIAA's fixed and variable foreign currency cash flows into fixed amounts of U.S. dollar cash flows. FOREIGN CURRENCY FORWARD CONTRACTS TIAA enters into foreign currency forward contracts to exchange fixed amounts of foreign currency at specified future dates and at specified rates (in U.S. dollars) to hedge against currency risks on investments denominated in foreign currencies. Changes in the value of the contracts related to foreign currency exchange rates are recognized at the end of the period as unrealized gains or losses. Forward contracts incorporate one swap transaction which results in the exchange of TIAA's fixed foreign currency cash flows into a fixed amount of U.S. dollar cash flows. A foreign exchange premium (discount) is recorded at the time the contract is opened, and it is calculated based on the difference between the forward exchange rate and the spot rate. TIAA amortizes the foreign exchange premium (discount) into investment income over the life of the forward contract, or at the settlement date if the forward contract is less than a year. INTEREST RATE SWAP CONTRACTS TIAA enters into interest rate swap contracts to hedge against the effect of interest rate fluctuations on certain variable interest rate bonds. These contracts allow TIAA to lock in a fixed interest rate and to transfer the risk of higher or lower interest rates. TIAA also enters into interest rate swap contracts to exchange the cash flows on certain fixed interest rate bonds into variable interest rate cash flows in connection with certain interest sensitive products. Payments received and payments made under interest rate swap contracts are reflected in net investment income. SWAP OPTIONS TIAA writes (sells) swap options on selected bonds to hedge against the effect of interest rate fluctuations as part of TIAA's asset and liability management program. Swap options give the holder the right, but not the obligation, to enter into an interest rate swap contract with TIAA where TIAA would pay a fixed interest rate and would receive a variable interest rate on a specified notional amount. When a swap option is written, the premium received is recorded as a liability. Because the swap options written by TIAA expire within one year of their inception date, the premium is recognized as investment income at the earlier of the exercise date or the expiration of the swap option. TIAA has no counterparty credit risk associated with swap options written unless the option is exercised and an interest rate swap contract is subsequently formed. INTEREST RATE CAP CONTRACTS TIAA purchases interest rate cap contracts to hedge against the risk of a rising interest rate environment as part of TIAA's asset and liability management program. Under the terms of the interest rate cap contracts, the selling entity makes payments to TIAA on a specified notional amount if an agreed- upon index exceeds a predetermined strike rate. Such payments received under interest rate cap contracts are recognized as investment income. When an interest rate cap contract is purchased, the premium paid is recorded as an asset, and the B-62 premium is amortized against investment income over the life of the cap. CREDIT DEFAULT SWAP CONTRACTS As part of a strategy to replicate investment grade corporate bonds in conjunction with US Treasury securities, TIAA writes (sells) credit default swaps to earn a premium by issuing insurance to the buyer of default protection. The carrying value of credit default swaps represents the premium received for selling the default protection, which premium is amortized into investment income over the life of the swap. Under the terms of the credit default swap contracts, TIAA synthetically assumes the credit risk of a reference asset and has the obligation to reimburse the default protection buyer for the loss in market value if the reference asset defaults, declares bankruptcy or experiences some other, specified negative credit event. TIAA has no counterparty credit risk with the buyer. NON-ADMITTED ASSETS Certain investment balances and corresponding investment income due and accrued are designated as non-admitted assets by the Department, based on delinquencies, defaults, and other statutory criteria, and cannot be included in life insurance company balance sheets filed with the Department. Such investment-related non-admitted assets totaled approximately $492,167,000 and $465,614,000 at December 31, 2001 and 2000, respectively. Income on bonds in default is not accrued and, therefore, is not included in the non-admitted totals. Certain non-investment assets, such as furniture and fixtures and various receivables, are also designated as non-admitted assets. Such non-admitted assets approximated $324,145,000 at December 31, 2001 and $262,186,000 at December 31, 2000. Changes in such non-admitted assets are charged or credited directly to contingency reserves. POLICY AND CONTRACT RESERVES: TIAA offers a range of group and individual retirement annuities and group and individual life and other insurance products. Policy and contract reserves for such products are determined in accordance with standard valuation methods approved by the Department and are computed in accordance with standard actuarial formulae. The reserves established utilize assumptions for interest (at rates ranging from 1.5% to 6.8% and averaging approximately 3%), mortality and other risks insured. Such reserves establish a sufficient provision for all contractual benefits guaranteed under policy and contract provisions. DIVIDENDS DECLARED FOR THE FOLLOWING YEAR: Dividends on insurance policies and pension annuity contracts in the payout phase are generally declared by the TIAA Board of Trustees ("Board") in November of each year, and such dividends are credited to policyholders in the following calendar year. Dividends on pension annuity contracts in the accumulation phase are generally declared by the Board in February of each year and such dividends on the various existing vintages of pension annuity contracts in the accumulation phase are credited to policyholders during the ensuing twelve month period beginning March 1. ASSET VALUATION RESERVE: The AVR, which covers all invested asset classes, is an explicit liability reserve required by the NAIC and is intended to provide for potential future credit and equity losses. Reserve components of the AVR are maintained for bonds, stocks, mortgages, real estate and other invested assets. Realized and unrealized credit and equity capital gains and losses, net of capital gains taxes, are credited to or charged against the related components of the AVR. Formula calculations determine the required contribution amounts for each component, and insurance companies may also make voluntary contributions to any component; however, the resulting ending balance cannot exceed the computed maximum reserve for that component. Any computed excess amounts are eliminated through transfers to other components or adjustments down to the maximum reserve amounts. Contributions and adjustments to the AVR are reported as transfers to or from contingency reserves. INTEREST MAINTENANCE RESERVE: The Interest Maintenance Reserve ("IMR") is a liability reserve required by the NAIC which accumulates realized capital gains and losses resulting from interest rate fluctuations. Such capital gains and losses are amortized out of the IMR, under the grouped method of amortization, as an adjustment to net investment income over the remaining lives of the assets sold. ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES: The Financial Accounting Standards Board ("FASB") requires that financial statements that are intended to be in conformity with GAAP follow all applicable authoritative accounting pronouncements. As a result, TIAA cannot refer to financial statements prepared in accordance with statutory accounting practices as having been prepared in accordance with GAAP. The differences between accounting principles generally accepted in the United States and statutory accounting practices would have a material effect on TIAA's financial statements, and the primary differences can be summarized as follows. Under GAAP: o The formula-based AVR is eliminated as a liability reserve; o The IMR is eliminated and realized gains and losses resulting from interest rate fluctuations are reported as a component of net income rather than being accumulated in and subsequently amortized out of the IMR; o Dividends on insurance policies and annuity contracts are accrued as the necessary earnings emerge from operations rather than being accrued in the year when they are declared; o The "non-admitted" asset designation is not utilized; B-63 o Policy acquisition costs are deferred and amortized over the lives of the policies issued rather than being charged to operations as incurred; o Policy and contract reserves are based on estimates of expected mortality, morbidity, persistency and interest rather than being based on statutory mortality, morbidity and interest requirements; o Investments in wholly-owned subsidiaries are consolidated in the parent's financial statements rather than being carried at the parent's equity in the net assets of the subsidiaries; o Long-term bond investments considered to be "available for sale" are carried at fair value rather than at amortized cost; o Deferred tax assets and liabilities are determined based on the differences between the financial statement amounts and the tax bases of assets and liabilities rather than being recognized with limitations under NAIC SAP. The Department does not allow even limited recognition of deferred tax assets and liabilities; o For purposes of calculating the postretirement benefit obligation, active participants not currently eligible would also be included: o Derivatives are generally valued at fair value rather than being accounted for in a manner consistent with the hedged item. Management believes that the effects of these differences would increase TIAA's total contingency reserves if GAAP were implemented. RECLASSIFICATIONS Certain amounts in the 2000 and 1999 financial statements have been reclassified to conform with the 2001 presentation. NOTE 3 - INVESTMENTS SECURITIES INVESTMENTS At December 31, 2001 and 2000, the carrying values (balance sheet amounts) and estimated market values of long-term bond investments, and the gross unrealized gains and losses with respect to such market values, are shown below:
GROSS GROSS CARRYING UNREALIZED UNREALIZED ESTIMATED VALUE GAINS LOSSES MARKET VALUE --------------- -------------- ---------------- --------------- DECEMBER 31, 2001 U.S. Government ........................................... $ 2,184,795,937 $ 22,835,187 $ (40,800,644) $ 2,166,830,480 All Other Governments ..................................... 731,135,341 52,353,820 (24,314,276) 759,174,885 States, Territories & Possessions ......................... 947,180,107 125,792,895 (24,566) 1,072,948,436 Political Subdivisions of States, Territories & Possessions 18,242,138 3,187,548 -- 21,429,686 Special Rev. & Special Assessment, Non-Guaranteed Agencies & Govt ......................................... 10,340,720,730 571,518,377 (56,743,917) 10,855,495,190 Public Utilities .......................................... 5,731,512,555 203,241,476 (81,143,209) 5,853,610,822 Industrial & Miscellaneous ................................ 67,059,784,681 2,382,000,485 (1,632,348,267) 67,809,436,899 --------------- -------------- ---------------- --------------- Total................................................ $87,013,371,489 $3,360,929,788 $(1,835,374,879) $88,538,926,398 =============== ============== ================ =============== GROSS GROSS CARRYING UNREALIZED UNREALIZED ESTIMATED VALUE GAINS LOSSES MARKET VALUE --------------- -------------- ---------------- --------------- DECEMBER 31, 2000 U.S. Government ........................................... $ 1,784,914,893 $ 76,054,550 $ (12,458,539) $ 1,848,510,904 All Other Governments ..................................... 767,715,296 43,123,268 (19,095,574) 791,742,990 States, Territories & Possessions ......................... 977,546,944 107,467,250 (133,743) 1,084,880,451 Political Subdivisions of States, Territories & Possessions 26,714,961 1,729,889 -- 28,444,850 Special Rev. & Special Assessment, Non-Guaranteed Agencies & Govt ......................................... 9,211,417,553 579,715,440 (12,117,584) 9,779,015,409 Public Utilities .......................................... 5,764,989,361 120,322,942 (197,497,916) 5,687,814,387 Industrial & Miscellaneous ................................ 62,275,852,792 1,450,759,733 (1,691,970,337) 62,034,642,188 --------------- -------------- ---------------- --------------- Total................................................ $80,809,151,800 $2,379,173,072 $(1,933,273,693) $81,255,051,179 =============== ============== ================ ===============
B-64 At December 31, 2001 and 2000, approximately 91.9% and 93.1%, respectively, of the long-term bond portfolio was comprised of investment grade securities. At December 31, 2001, outstanding forward commitments for future long-term bond and equity investments approximated $2,143,627,000. Of this, approximately $1,196,008,000 is scheduled for disbursement in 2002, $351,806,000 in 2003, $297,907,000 in 2004 and $297,906,000 in later years. The funding of bond commitments is contingent upon the continued favorable financial performance of the potential borrowers. Debt securities amounting to approximately $6,393,000 and $2,594,000 at December 31, 2001 and 2000, respectively, were on deposit with governmental authorities or trustees, as required by law. The carrying values and estimated market values of long-term bond investments at December 31, 2001, by contractual maturity, are shown below: CARRYING ESTIMATED VALUE MARKET VALUE --------------- --------------- Due in one year or less .............. $ 1,354,989,037 $ 1,398,322,998 Due after one year through five years. 9,906,151,865 10,367,578,175 Due after five years through ten years 14,935,313,538 15,170,229,839 Due after ten years .................. 19,096,709,062 19,437,639,724 --------------- --------------- Subtotal ......................... 45,293,163,502 46,373,770,736 Mortgage-backed securities ........... 22,419,138,036 23,043,058,476 Asset-backed securities .............. 19,301,069,951 19,122,097,186 --------------- --------------- Total ............................ $87,013,371,489 $88,538,926,398 =============== =============== Bonds not due at a single maturity date have been included in the preceding table based on the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to prepay obligations, although prepayment premiums may be applicable. At December 31, 2001 and 2000, the carrying values of long-term bond investments were diversified by industry classification as follows: 2001 2000 ------ ------ Mortgage-backed securities ............. 25.8% 27.3% Asset-backed securities ................ 12.3 12.1 Manufacturing .......................... 11.5 11.7 Commercial mortgage-backed securities .. 9.9 9.5 Finance and financial services.......... 9.4 9.4 Public utilities ....................... 7.2 7.6 Communications ......................... 5.1 4.1 Oil and gas............................. 3.5 3.4 Government ............................. 3.1 2.9 Retail and wholesale trade.............. 3.0 3.2 Real estate investment trusts........... 2.2 2.1 Other .................................. 7.0 6.7 ------ ------ Total............................... 100.0% 100.0% ====== ====== The approximate carrying values and market values of debt securities loaned, and the cash collateral received in connection therewith, were as follows: CARRYING MARKET CASH VALUE VALUE COLLATERAL -------------- -------------- -------------- December 31, 2001 $2,417,634,000 $2,527,176,000 $2,619,761,000 December 31, 2000 $2,189,502,000 $2,283,079,000 $2,333,054,000 At December 31, 2001 and 2000, TIAA had interest rate swap contracts outstanding with a total notional value of approximately $565,855,000 and $409,036,000, respectively. At December 31, 2001 and 2000, TIAA had foreign currency swap contracts outstanding with a total notional value of approximately $1,421,613,000 and $1,020,545,000, respectively. The net change in unrealized gains on foreign currency swap contracts outstanding were approximately $41,062,000, $57,247,000, and $25,575,000 for the years ended December 31, 2001, 2000 and 1999, respectively. At December 31, 2001 and 2000, TIAA had foreign currency forward contracts outstanding with a total notional value of approximately $234,686,000 and $203,113,000, respectively, and the unamortized value of the premiums was approximately $3,432,000 and $4,827,000, respectively. The net change in unrealized gains on the forward contracts outstanding were approximately $4,574,000, $5,745,000, and $20,395,000 for the years ended December 31, 2001, 2000, and 1999, respectively. At December 31, 2001 and 2000, TIAA had swap options outstanding with a total notional value of $0 and approximately $219,100,000, respectively, and the unamortized value of the premiums was $0 and approximately $823,000, respectively. The interest rate swap contracts created from the exercise of the swap options are reflected in the aggregate totals for the interest rate swap contracts disclosed in the related paragraph above. At December 31, 2001 and 2000, TIAA had interest rate cap contracts outstanding with a total notional value of approximately $75,650,000 and $145,650,000, respectively, and the unamortized value of the premiums was approximately $474,000 and $959,000, respectively. At December 31, 2001, TIAA had credit default swap contracts outstanding with a total notional value of approximately $130,000,000. These credit default swaps are used in conjunction with US Treasury securities by TIAA to replicate investment grade corporate bonds. MORTGAGE LOAN INVESTMENTS: TIAA makes mortgage loans that are principally collateralized by commercial real estate. TIAA's mortgage underwriting standards generally result in first mortgage liens on completed income-producing properties for which the loan-to-value ratio at the time of closing generally ranges between 65% and 75%. TIAA employs a system to monitor the effects of current and expected market conditions and other factors on the collectibility of mortgage loans. This system is utilized to identify and quantify any impairments in B-65 value. The coupon rates for mortgage loans issued during 2001 ranged from 6% to 11%. At December 31, 2001 and 2000, the carrying values of mortgage loan investments were diversified by property type and geographic region as follows: 2001 2000 ------ ------ PROPERTY TYPE Office building............ 42.4% 40.9% Shopping centers........... 25.4 27.6 Industrial buildings ...... 10.1 9.5 Mixed-use projects......... 8.2 9.1 Apartments ................ 6.6 6.8 Hotel ..................... 5.0 4.0 Other ..................... 2.3 2.1 ------ ------ Total.................. 100.0% 100.0% ====== ====== GEOGRAPHIC REGION Pacific ................... 24.7% 24.1% South Atlantic............. 22.3 22.1 North Central.............. 19.3 19.9 Middle Atlantic............ 10.8 10.2 South Central.............. 8.2 8.3 Mountain .................. 7.1 7.7 New England................ 6.8 7.4 Other ..................... 0.8 0.3 ------ ------ Total.................. 100.0% 100.0% ====== ====== At December 31, 2001 and 2000, approximately 19% of the mortgage portfolio was invested in California and is included in the Pacific region shown above. At December 31, 2001, the contractual maturity schedule of mortgage loans is shown below: CARRYING VALUE --------------- Due in one year or less ................. $ 518,490,627 Due after one year through five years .. 7,057,905,496 Due after five years through ten years .. 13,225,512,756 Due after ten years ..................... 2,266,355,231 --------------- Total ................................. $23,068,264,110 =============== Actual maturities may differ from contractual maturities because borrowers may have the right to prepay mortgage loans, although prepayment premiums may be applicable. At December 31, 2001, outstanding forward commitments for future mortgage loan investments approximated $1,030,340,000. Of this, approximately $821,102,000 is scheduled for disbursement in 2002 and $209,238,000 in later years. The funding of mortgage loan commitments is generally contingent upon the underlying properties meeting specified requirements, including construction, leasing and occupancy. At December 31, 2001 and 2000, the aggregate carrying values of mortgages with restructured or modified terms were approximately $370,922,000 and $663,915,000, respectively. For the years ended December 31, 2001, 2000 and 1999, the investment income earned on such mortgages was approximately $29,838,000, 43,972,000 and $88,002,000, respectively, which would have been approximately $38,158,000, $63,006,000 and $106,137,000, respectively, if they had performed in accordance with their original terms. When restructuring mortgage loans, TIAA generally requires participation features, yield maintenance stipulations, and/or the establishment of property- specific escrow accounts funded by the borrowers. Approximately $432,085,000 and $47,391,000 of the mortgage total on the balance sheet at December 31, 2001 and 2000, respectively represent amounts due from related parties that are collateralized by real estate owned by TIAA investment subsidiaries and affiliates. REAL ESTATE INVESTMENTS TIAA makes investments in commercial real estate directly, through wholly-owned subsidiaries and through real estate limited partnerships. TIAA employs a system to monitor the effects of current and expected market conditions and other factors on the realizability of real estate investments. This system is utilized to identify and quantify any impairments in value. At December 31, 2001 and 2000, the carrying values of real estate investments were diversified by property type and geographic region as follows: 2001 2000 ------ ------ PROPERTY TYPE Office buildings .................................... 72.0% 67.1% Shopping centers .................................... 5.3 9.4 Mixed-use projects .................................. 3.3 5.3 Income-producing land underlying improved real estate ......................................... 2.8 3.4 Industrial buildings ................................ 2.5 4.0 Land held for future development .................... 2.1 3.3 Apartments .......................................... 0.0 0.1 Other ............................................... 12.0 7.4 ------ ------ Total ........................................... 100.0% 100.0% ====== ====== GEOGRAPHIC REGION South Atlantic ...................................... 34.7% 27.7% North Central ....................................... 23.9 26.5 Pacific ............................................. 13.6 14.5 South Central ....................................... 8.3 8.2 Middle Atlantic ..................................... 5.7 5.4 Mountain ............................................ 3.4 3.2 New England ......................................... 1.0 1.0 Other ............................................... 9.4 13.5 ------ ------ Total ........................................... 100.0% 100.0% ====== ====== At December 31, 2001 and 2000, approximately 14% of the real estate portfolio was invested in Florida and approximately 10% was invested in California. Florida is included in the South Atlantic region and California is included in the Pacific region. B-66 At December 31, 2001, outstanding obligations for future real estate investments approximated $105,315,000. Pursuant to these obligations, it is estimated that approximately $72,726,000 will be disbursed in 2002 and $32,589,000 in later years. The funding of real estate investment obligations is contingent upon the properties meeting specified requirements, including construction, leasing and occupancy. Depreciation expense on real estate investments for the years ended December 31, 2001, 2000 and 1999, was approximately $157,515,000, $164,844,000, and $179,605,000, respectively; the amount of accumulated depreciation at December 31, 2001 and 2000 was approximately $1,139,439,000 and $918,317,000, respectively. INVESTMENT SUBSIDIARIES AND AFFILIATES: TIAA's investment subsidiaries and affiliates, which are created for legal or other business reasons, are primarily involved in real estate and securities investment activities for TIAA. At December 31, 2001 and 2000, the carrying values of TIAA's equity interests in investment subsidiaries and affiliates, were approximately $4,175,391,000 and $4,544,417,000, respectively. TIAA's share of total assets, liabilities and net income of investment subsidiaries and affiliates at December 31, 2001 and 2000, and for the years then ended, were approximately as follows: 2001 2000 -------------- -------------- Assets .................................. $4,924,503,000 $5,312,230,000 Liabilities ............................. 1,155,321,000 1,148,139,000 Non-admitted assets/other adjustments ... 406,209,000 380,326,000 -------------- -------------- Carrying value .......................... $4,175,391,000 $4,544,417,000 ============== ============== Net income .............................. $224,246,000 $500,063,000 The carrying values shown above are reflected in the Bonds, Mortgages, Real Estate and Stock captions in the accompanying balance sheets. As of December 31, 2001 and 2000, the net amount due from investment subsidiaries and affiliates was $57,148,886 and $24,365,753, respectively. NOTE 4 - INVESTMENT INCOME AND CAPITAL GAINS AND LOSSES NET INVESTMENT INCOME: For the years ended December 31, 2001, 2000 and 1999, the components of net investment income, were as follows:
2001 2000 1999 -------------- -------------- -------------- GROSS INVESTMENT INCOME: Bonds ........................................................ $6,555,483,726 $6,158,290,900 $5,775,161,816 Mortgages .................................................... 1,792,538,071 1,664,704,684 1,699,019,031 Real estate (net of property expenses, taxes and depreciation) 310,745,641 523,965,325 282,344,126 Stocks ....................................................... 123,062,635 101,520,278 92,223,815 Other long-term investments .................................. 97,335,333 138,413,626 58,021,764 Cash and short-term investments .............................. 47,624,804 32,816,610 22,452,106 Other ........................................................ 12,686,068 (650,251) 8,703,697 -------------- -------------- -------------- Total .................................................... 8,939,476,278 8,619,061,172 7,937,926,355 Less investment expenses ....................................... 185,335,465 215,773,092 170,761,251 -------------- -------------- -------------- Net investment income before amortization of net IMR gains ..... 8,754,140,813 8,403,288,080 7,767,165,104 Plus amortization of net IMR gains ............................. 65,438,180 153,248,647 156,399,394 -------------- -------------- -------------- Net investment income .......................................... $8,819,578,993 $8,556,536,727 $7,923,564,498 ============== ============== ==============
During 2001, TIAA changed the estimated maturity dates used in calculating the amortization of Commercial Mortgage Backed Interest Only ("CMBS I/O") securities. In prior years, these securities were being amortized to their legal final maturity dates. During 2001, TIAA began amortizing CMBS I/O securities to their expected final payment dates. As a result, the CMBS I/Os are being amortized over a shorter period and approximately $50 million of additional CMBS I/O amortization was recorded as a reduction in current year's investment income. Future rental income expected to be received during the next five years under existing real estate leases in effect as of December 31, 2001 is approximately $551,794,000 in 2002, $491,889,000 in 2003, $430,184,000 in 2004, $356,816,000 in 2005 and $263,629,000 in 2006. The net earned rates of investment income on total invested assets (computed as net investment income before amortization of net IMR gains divided by mean invested assets) were 7.70%, 7.91% and 7.82% in 2001, 2000 and 1999, respectively. B-67 REALIZED CAPITAL GAINS AND LOSSES For the years ended December 31, 2001, 2000 and 1999, the net realized capital gains (losses) on sales, redemptions and writedowns of investments were as follows:
2001 2000 1999 -------------- ------------ ------------ Bonds ....................................... $(173,652,714) $67,168,839 $65,207,048 Mortgages ................................... (31,805,973) (18,620,911) (22,897,373) Real estate ................................. 64,556,779 (14,419,646) 136,719,085 Stocks ...................................... 67,676,528 29,163,435 46,209,893 Other long-term investments ................. 19,686,439 40,797,748 49,549,108 Cash and short-term investments ............. (1,043,480) 859,571 1,471,501 -------------- ------------ ------------ Total realized gains before capital gains tax (54,582,421) 104,949,036 276,259,262 Capital gains tax benefit ................... -- -- 5,819,369 Total ................................... $(54,582,421) $104,949,036 $282,078,631 ============== ============ ============
Writedowns of investments resulting from impairments which are considered to be other than temporary and from mortgage foreclosures, reflected in the preceding table as realized capital losses, were as follows: 2001 2000 1999 ------------ ------------ ----------- Other than temporary impairments: Bonds ......................... $246,640,401 $ -- $21,137,423 Mortgages ..................... 25,882,099 63,467,331 31,752,909 Real estate.................... -- 50,000,000 -- Other long-term investments.... 19,693,398 -- -- ------------ ------------ ----------- Total...................... $292,215,898 $113,467,331 $52,890,332 ============ ============ =========== Mortgage foreclosures $ -- $ 213,640 $14,984,688 ============ ============ =========== Proceeds from sales and redemptions of long-term bond investments during 2001, 2000 and 1999 were approximately $15,334,370,000, $10,199,202,000 and $10,137,343,000 respectively. Gross gains of approximately $234,562,000, $187,122,000 and $177,537,000 and gross losses, excluding impairments considered to be other than temporary, of approximately $161,574,000, $119,953,000 and $91,193,000 were realized on these sales and redemptions during 2001, 2000 and 1999, respectively. Unrealized Capital Gains and Losses: For the years ended December 31, 2001, 2000 and 1999, the net changes in unrealized capital gains (losses) on investments, resulting in a net increase (decrease) in the valuation of investments, were as follows: 2001 2000 1999 -------------- -------------- -------------- Bonds ..................... $(229,204,505) $ (54,132,512) $ (69,713,061) Mortgages ................. 2,102,943 (70,888,318) 6,617,678 Real estate ............... 44,910,043 (2,770,531) (33,864,537) Stocks .................... 58,120,898 75,816,698 (118,886,764) Other long-term investments (450,195,560) 175,323,484 103,233,602 Other ..................... -- -- -- -------------- -------------- -------------- Total................ $(574,266,181) $(123,348,821) $(112,613,082) ============== ============== ============== NOTE 5 - SECURITIZATIONS When TIAA sells bonds and mortgage loans in a securitization transaction, it may retain interest-only strips, one or more subordinated tranches, equity interest, or servicing rights, all of which are retained interests in the securitized receivables. TIAA's ownership of the related retained interests in securitization transactions may be held directly by TIAA or indirectly through an investment subsidiary. The retained interests are associated with a Special Purpose Entity/Qualified Special Purpose Entities ("SPE/QSPEs"), which are trusts or other legal entities that were formed for the sole purpose of acquiring and owning the underlying receivable assets and issuing the related debt and equity (i.e., the securitization transaction). The debt and equity issued by the SPE/QSPEs formed for the securitization transactions described below are non-recourse to TIAA. Investors in the securitizations have no recourse to TIAA's other assets if the loans that were securitized fail to pay when due. Gain or loss on a securitization transaction, net of transaction costs, is, in part, determined by allocating the previous carrying amount of the financial assets involved in the transfer between the assets sold and the retained interests, based on their relative fair values at the date of the transfer. Quoted market prices are used, if available. However, quotes are generally not available for retained interests, so TIAA generally estimates fair value based on the present value of future expected cash flows using management's best estimates of future credit B-68 losses, forward yield curves, and discount rates that are commensurate with the risks involved. During 2001, TIAA entered into a securitization transaction in which it sold bonds with a total principal balance of approximately $1.5 billion and recognized a loss of approximately $5,847,000. TIAA received proceeds of approximately $601,984,000 and retained subordinated interests with a fair value of approximately $870,009,000. The fair value of the retained interest at December 31, 2001 was approximately $883,269,000 and is comprised of subordinated tranches and residual interests of approximately $882,267,000 and $1,002,000, respectively. The fair values of the subordinate tranches were valued by an independent pricing service, using 5, 10 and 30 year Treasuries and swap curves. The fair value of the residual interest was calculated by discounting the estimated future cash flows using a discount rate of 6.5%. An adverse 10% and 20% change in the discount rate would negatively impact the fair value of the retained interests by approximately $45,811,000 and $50,633,000, respectively at December 31, 2001. The total cash flows received on interests retained were approximately $36,316,000 for the year ended December 31, 2001. TIAA also retained the rights to future cash flows that may arise after investors in the securitization have received their contracted returns. During 2000, TIAA entered into two securitization transactions in which it sold bonds with a total principal balance of approximately $1.4 billion and recognized a loss of approximately $757,000. TIAA received proceeds of approximately $1,284,000,000 and retained subordinated interests with a fair value of approximately $144,653,000. The fair values of the retained interests were calculated by discounting the estimated future cash flows using discount rates ranging from 11% to 15%. An adverse 10% and 20% change in the discount rate would negatively impact the fair value of the retained interests by approximately $8,688,000 and $17,159,000, respectively at December 31, 2001. The total cash flows received on interests retained were approximately $26,327,000 for the year ended December 31, 2001. TIAA also retained the rights to future cash flows that may arise after investors in the securitizations have received their contracted returns. TIAA retained servicing and asset management responsibilities in these transactions and received management fees of approximately $2,797,000 for the year ended December 31, 2001. During 1999, TIAA entered into a securitization transaction in which it sold commercial mortgages with a total principal balance of approximately $893,460,000 and recognized a loss of approximately $1,181,000. TIAA received proceeds of approximately $480,514,000 and retained subordinated interests with a fair value of approximately $412,767,000. The fair value of the retained interest was approximately $433,473,000 at December 31, 2001. The key assumptions used in measuring the fair value of the retained interests included an anticipated credit loss of approximately .3% and a discount rate of 6%. An adverse 10% and 20% change in credit loss assumption would have a negative impact of approximately $1,052,000 and $2,074,000, respectively, on the fair value of the retained interests at December 31, 2001. An adverse 10% and 20% change in the discount factor would negatively impact the fair value of the retained interest by approximately $7,454,000 and $14,697,000, respectively, at December 31, 2001. The total cash flows received on interests retained were approximately $35,222,000 for the year ended December 31, 2001. TIAA also retained the rights to future cash flows that may arise after investors in the securitizations have received their contracts returns. TIAA retained subservicing responsibilities in this transaction and received fees of approximately $359,000 for the year ended December 31, 2001. The following table presents quantitative information about principal balances, delinquencies and net credit losses for total loans owned or managed by TIAA:
AT DECEMBER 31 (amounts in thousands) -------------------------------------------------------------------------------------- TOTAL PRINCIPAL PRINCIPAL AMOUNT OF LOANS NET CREDIT LOSS AMOUNT OF LOANS 60 DAYS OR MORE PAST DUE DURING THE YEAR ----------------------------- ------------------------- ---------------------- TYPE OF LOAN 2001 2000 2001 2000 2001 2000 - ------------ ------------- ------------- --------- --------- --------- -------- Bonds .................................. $ 90,554,720 $ 84,049,926 $ 397,471 $ 202,283 $ 246,640 $ -- Mortgages .............................. 23,745,601 22,556,129 12,190 28,384 25,882 63,681 ------------- ------------- --------- --------- --------- -------- TOTAL LOANS MANAGED OR SECURITIZED ..... 114,300,321 106,606,055 $ 409,661 $ 230,667 $ 272,522 $ 63,681 ========= ========= ========= ======== Less: Loans securitized .................... 2,339,714 1,848,780 ------------- ------------ LOANS HELD IN PORTFOLIO ................ $ 111,960,607 $ 104,757,275 ============= =============
B-69 At December 31, 2001 and 2000, the carrying values of TIAA's investments in subsidiaries that held an interest in these securitizations were approximately $634,683,000 and $499,854,000, respectively. Total assets and liabilities of these TIAA subsidiaries were as follows: 2001 2000 -------------- -------------- Assets .................. $1,144,571,000 $1,002,770,000 Liabilities ............. 507,955,000 502,916,000 Non-admitted assets/other adjustments............ (1,933,000) -- -------------- -------------- Carrying value........... $ 634,683,000 $ 499,854,000 ============== ============== NOTE 6 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value amounts of financial instruments presented in the following tables have been determined by TIAA using market information available as of December 31, 2001 and 2000 and appropriate valuation methodologies. However, considerable judgment is necessarily required to interpret market data in developing the estimates of fair value for financial instruments for which there are no available market value quotations. The estimates presented are not necessarily indicative of the amounts TIAA could have realized in a market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
NOTIONAL CARRYING ESTIMATED VALUE VALUE FAIR VALUE -------------- --------------- --------------- DECEMBER 31, 2001 Assets Bonds ....................................... $87,013,371,489 $88,538,926,398 Mortgages ................................... 23,068,264,110 24,228,918,121 Common stocks ............................... 1,225,460,658 1,225,460,658 Preferred stocks ............................ 979,870,924 922,635,066 Cash and short-term investments.............. 2,892,903,767 2,892,903,767 Policy loans ................................ 507,417,992 507,417,992 Seed money investments ...................... 325,569,188 325,569,188 Liabilities Teachers Personal Annuity-Fixed Account ..... 1,739,230,493 1,739,230,493 Other financial instruments Foreign currency swap contracts.............. $1,421,613,312 121,373,606 143,112,318 Foreign currency forward contracts........... 234,686,111 8,005,940 10,531,178 Interest rate swap contracts................. 565,855,000 -- (659,372) Swap options ................................ -- -- -- Interest rate cap contracts.................. 75,650,000 473,883 70,185 Credit default swap contracts................ 130,000,000 -- (1,550,144) NOTIONAL CARRYING ESTIMATED VALUE VALUE FAIR VALUE -------------- --------------- --------------- DECEMBER 31, 2000 Assets Bonds ....................................... $80,809,151,800 $81,255,051,179 Mortgages ................................... 21,952,808,611 22,593,584,589 Common stocks ............................... 767,862,699 767,862,699 Preferred stocks ............................ 970,206,730 940,926,347 Cash and short-term investments.............. 244,168,519 244,168,519 Policy loans ................................ 474,681,094 474,681,094 Seed money investments ...................... 394,002,467 394,002,467 Liabilities Teachers Personal Annuity-Fixed Account ..... 1,456,634,670 1,456,634,670 Other financial instruments Foreign currency swap contracts.............. $1,020,545,319 101,339,491 105,396,376 Foreign currency forward contracts........... 203,112,720 10,572,446 9,250,132 Interest rate swap contracts................. 409,035,615 -- 12,748,992 Swap options ................................ 219,100,000 (822,873) (4,457,353) Interest rate cap contracts.................. 145,650,000 959,423 771,354
BONDS The fair values for publicly traded long-term bond investments are determined using quoted market prices. For privately placed long-term bond investments without a readily ascertainable market value, such values are determined with the assistance of an independent pricing service utilizing a discounted cash flow methodology based on coupon rates, maturity provisions and assigned credit ratings. B-70 The aggregate carrying values and estimated fair values of publicly traded and privately placed bonds at December 31, 2001 and 2000 are as follows:
2001 2000 -------------------------------- -------------------------------- CARRYING ESTIMATED CARRYING ESTIMATED VALUE FAIR VALUE VALUE FAIR VALUE --------------- --------------- --------------- --------------- Publicly traded bonds .... $55,673,764,622 $56,904,176,185 $50,734,031,251 $51,315,463,545 Privately placed bonds ... 31,339,606,867 31,634,750,213 30,075,120,549 29,939,587,634 --------------- --------------- --------------- --------------- Total................. $87,013,371,489 $88,538,926,398 $80,809,151,800 $81,255,051,179 =============== =============== =============== ===============
MORTGAGES The fair values of mortgages are generally determined with the assistance of an independent pricing service utilizing a discounted cash flow methodology based on coupon rates, maturity provisions and assigned credit ratings. COMMON STOCKS, CASH AND SHORT-TERM INVESTMENTS, POLICY LOANS, AND SEED MONEY INVESTMENTS The carrying values are reasonable estimates of their fair values. PREFERRED STOCKS The fair values of preferred stocks are determined using quoted market prices or valuations from the NAIC. TEACHERS PERSONAL ANNUITY - FIXED ACCOUNT The carrying values of the liabilities are reasonable estimates of their fair values. FOREIGN CURRENCY SWAP CONTRACTS The fair values of foreign currency swap contracts, which are used for hedging purposes, are the estimated net gains that TIAA would record if the foreign currency swaps were liquidated at year-end. The fair values of foreign currency swap contracts are estimated internally based on future cash flows and anticipated foreign exchange relationships, and such values are reviewed for reasonableness with values from TIAA's counterparties. FOREIGN CURRENCY FORWARD CONTRACTS The fair values of foreign currency forward contracts, which are used for hedging purposes, are the estimated net gains that TIAA would record if the foreign currency forward contracts were liquidated at year-end. The fair values of the foreign currency forward contracts are estimated internally based on future cash flows and anticipated foreign exchange relationships, and such values are reviewed for reasonableness with estimates from TIAA's counterparties. INTEREST RATE SWAP CONTRACTS The fair values of interest rate swap contracts, which are used for hedging purposes, are the estimated net gains that TIAA would record if the interest rate swaps were liquidated at year-end. The swap agreements have no carrying value. The fair values of interest rate swap contracts are estimated internally based on anticipated interest rates and estimated future cash flows, and such values are reviewed for reasonableness with estimates from TIAA's counterparties. SWAP OPTIONS The fair values of swap options, which are used for hedging purposes, are the estimated amounts that TIAA would receive (pay) if the swap options were liquidated at year-end. The fair values of the swap options are estimated by external parties, including TIAA's counterparties, and such values are reviewed internally for reasonableness based on anticipated interest rates and estimated future cash flows. INTEREST RATE CAP CONTRACTS The fair values of interest rate cap contracts, which are used for hedging purposes, are the estimated amounts that TIAA would receive if the interest rate cap contracts were liquidated at year-end. The fair values of the interest rate cap contracts are estimated by external parties, including TIAA's counterparties, and such values are reviewed internally for reasonableness based on anticipated interest rates and estimated future cash flows. CREDIT DEFAULT SWAP CONTRACTS The fair values of credit default swap contracts, which are used for asset replication purposes, are the estimated amounts that TIAA would receive (pay) if the credit default swap contracts were liquidated at year-end. The fair values of credit default swap contracts are estimated by external parties, including TIAA's counterparties, and such values are reviewed internally for reasonableness based on anticipated interest rates, estimated future cash flows, and anticipated credit market conditions. STOCK WARRANTS The fair values of stock warrants represent the excess, if any, of the market values of the related stocks over the exercise prices associated with the stock warrants. The stock warrants have no carrying value. COMMITMENTS TO EXTEND CREDIT OR PURCHASE INVESTMENTS TIAA generally does not charge commitment fees on these agreements, and the related interest rates reflect market levels at the time of the commitments. INSURANCE AND ANNUITY CONTRACTS TIAA's insurance and annuity contracts, other than the Teachers Personal Annuity - - Fixed Account disclosed above, entail mortality risks and are, therefore, exempt from the fair value disclosure requirements related to financial instruments. B-71 NOTE 7 - OPERATING SUBSIDIARIES TIAA's operating subsidiaries primarily consist of TIAA-CREF Life Insurance Company, Inc., ("TIAA-CREF Life"), TIAA-CREF Trust Company, FSB, ("Trust Company"), Tuition Financing, Inc., ("TFI"), Teachers Personal Investors Services, ("TPIS") and Teachers Advisors, Inc., ("Advisors") which are owned by TIAA-CREF Enterprises, Inc., ("Enterprises"), a wholly-owned subsidiary of TIAA. At December 31, 2001 and 2000, the carrying values of TIAA's equity interests in unconsolidated subsidiaries, were approximately $214,171,000 and $257,050,000, respectively. Total assets, liabilities and net income/(loss) of operating subsidiaries at December 31, 2001 and 2000, and for the years then ended, were approximately as follows: 2001 2000 -------------- ------------ Assets .................. $1,276,179,000 $765,517,000 Liabilities ............. 1,074,596,000 509,816,000 Non-admitted assets/other adjustments............ 12,588,000 1,349,000 -------------- ------------ Carrying value........... $ 214,171,000 $257,050,000 ============== ============ Net income/(loss)........ (74,101,000) (52,546,000) TIAA had an Adjustable Rate Payment-in-Kind Note Receivable from Enterprises in the principal amount, plus accrued interest, of $148,833,089 and $70,334,039, and a net amount due from operating subsidiaries of $28,190,737 and $27,315,652, as of December 31, 2001 and 2000, respectively. TIAA has a financial support agreement with TIAA-CREF Life. Under this agreement, TIAA will provide support so that TIAA-CREF Life will have the greater of capital and surplus of $250 million or the amount of capital and surplus necessary to maintain TIAA-CREF Life's capital and surplus at a level not less than 150% of the NAIC Risk Based Capital model or such other amount as necessary to maintain TIAA-CREF Life's financial strength rating, (from the various rating agencies) at least the same as TIAA's rating at all times. This agreement is not an evidence of indebtedness or an obligation or liability of TIAA and does not provide any creditor of TIAA-CREF Life with recourse to TIAA. TIAA made a $25,000,000 additional capital contribution to TIAA-CREF Life during 2001 pursuant to this agreement. In 2001, TIAA entered into a $100 million unsecured credit facility arrangement with TIAA-CREF Life. As of December 31, 2001, $30 million of this facility was maintained on a committed basis for which TIAA-CREF Life paid a commitment fee. There were no drawdowns under this facility during 2001. NOTE 8 - SEPARATE ACCOUNTS TIAA currently has two separate accounts. The TIAA Separate Account VA-1 ("VA-1") is a segregated investment account and was organized on February 16, 1994 under the insurance laws of the State of New York for the purpose of issuing and funding variable annuity contracts. VA-1 was registered with the Securities and Exchange Commission ("the Commission") effective November 1, 1994 as an open- end, diversified management investment company under the Investment Company Act of 1940. Currently, VA-1 consists of a single investment portfolio, the Stock Index Account ("SIA"). SIA was established on October 3, 1994 and invests in a diversified portfolio of equity securities selected to track the overall United States stock market. TIAA provides mortality and expense guarantees to VA-1, for which it is compensated. TIAA guarantees that at death, the total death benefit payable from the fixed and variable accounts will be at least a return of total premiums paid less any previous withdrawals. TIAA also guarantees that expense charges to VA-1 participants will never rise above the maximum amount stipulated in the contract. The TIAA Real Estate Account ("REA") is a segregated investment account and was organized on February 22, 1995 under the insurance laws of the State of New York for the purpose of funding variable annuity contracts. REA was registered with the Commission under the Securities Act of 1933 effective October 2, 1995. REA's target is to invest between 70% and 95% of its assets directly in real estate or in real estate-related investments, with the remainder of its assets invested in publicly traded securities to maintain adequate liquidity. TIAA provides mortality, expense and liquidity guarantees to REA and is compensated for these guarantees. TIAA guarantees that once REA participants begin receiving lifetime annuity income benefits, monthly payment levels will never be reduced as a result of adverse mortality experience. TIAA also guarantees that expense charges to REA participants will never rise above the maximum amount stipulated in the contract. TIAA provides REA with a liquidity guarantee to ensure it has funds available to meet participant transfer or cash withdrawal requests. If REA cannot fund participant requests, TIAA's general account will fund them by purchasing Accumulation Units. TIAA guarantees that participants will be able to redeem their Accumulation Units at their then current daily net asset value. TIAA does not own any Accumulation Units at December 31, 2001. Other than the guarantees mentioned above, TIAA does not make any guarantees to policyholders on its separate accounts (including the investment performance of the separate accounts). Both accounts offer full or partial withdrawal at market value with no surrender charges. The assets and liabilities of these accounts (which represent participant account values) are generally carried at market value (directly held real estate is carried at appraised value). NOTE 9 - MUTUAL FUNDS As of December 31, 2001 and 2000, TIAA's investment in the affiliated mutual funds described below was approximately $325.6 million and $394.0 million, respectively. This amount is reported in the caption "other long term investments" in B-72 the accompanying balance sheet. Shares of the mutual funds are distributed by TPIS and investment advisory services are provided by Advisors. TIAA-CREF Mutual Funds ("the Retail Funds") consist of eleven investment funds which are offered to the general public. As of December 31, 2001, the Retail Funds had approximately $3.0 billion in net assets. TIAA-CREF Institutional Mutual Funds ("the Institutional Funds"), a family of seven funds, are currently used primarily as investment vehicles for the TFI tuition finance business and the Trust Company. As of December 31, 2001, the Institutional Funds had approximately $1.5 billion in net assets. TIAA-CREF Life Funds ("the Life Funds") are utilized by TIAA- CREF Life as funding vehicles for its variable annuity and variable insurance products. As of December 31, 2001, the Life Funds had approximately $270.0 million in net assets. NOTE 10 - MANAGEMENT AGREEMENTS Services necessary for the operation of College Retirement Equities Fund ("CREF") are provided, at cost, by two subsidiaries of TIAA, TIAA-CREF Investment Management, LLC ("Investment Management") and TIAA-CREF Individual & Institutional Services, Inc. ("Services"), which provide investment advisory, administrative and distribution services for CREF. Such services are provided in accordance with an Investment Management Services Agreement between CREF and Investment Management, and in accordance with a Principal Underwriting and Administrative Services Agreement between CREF and Services. Investment Management is registered with the Commission as an investment adviser; Services is registered with the Commission as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. ("NASD"). Investment Management and Services receive management fee payments from each CREF account on a daily basis according to formulae established each year with the objective of keeping the management fees as close as possible to each account's actual expenses. Any differences between the actual expenses incurred and the management fees received are adjusted quarterly. Such fees and the equivalent allocated expenses, which amounted to approximately $555,052,000, $561,396,000, and $493,399,000 in 2001, 2000, and 1999, respectively, are not included in the statements of operations and had no effect on TIAA's operations. TIAA also provides guarantees to the CREF accounts, for which it is compensated, for certain mortality and expense risks pursuant to an Immediate Annuity Purchase Rate Guarantee Agreement. TIAA provides a $1 billion uncommitted line of credit to CREF, TIAA-CREF Mutual Funds and TIAA-CREF Institutional Mutual Funds ("the Funds"). Loans under this revolving credit facility have a maximum of 60 days and are made solely at the discretion of TIAA to fund shareholder redemption requests or other temporary or emergency needs of the Funds. It is the intent of TIAA and the Funds to use this facility as a supplemental liquidity facility which would only be used after the Funds have exhausted the availability of its current $2.25 billion committed credit facility that it maintains with a group of banks. No draw downs have taken place under TIAA's uncommitted facility since its inception in November of 1999. Advisors provides investment advisory services for VA-1 in accordance with an Investment Management Agreement between TIAA, Advisors and VA-1. TIAA provides all administrative services for VA-1 in accordance with an Administrative Services Agreement with VA-1. TPIS distributes contracts for VA-1. TIAA provides administrative services to the Trust Company, under an Administrative Services Agreement. Expense charges for administrative services provided by TIAA to the Trust Company are billed quarterly. All services necessary for the operation of REA are provided, at cost, by TIAA and Services. TIAA provides investment management services for REA. Distribution and administrative services are provided in accordance with a Distribution and Administrative Services Agreement between REA and Services. TIAA and Services receive management fee payments from REA on a daily basis according to formulas established each year with the objective of keeping the management fees as close as possible to REA's actual expenses. Any differences between actual expenses and daily charges are adjusted quarterly. All services necessary for the operation of the New York State College Choice Tuition Savings Program are provided by TIAA in accordance with a Management Agreement between TIAA, the Comptroller of the State of New York and the New York Higher Education Services Corporation. Advisors provides investment management services for the Tuition Savings Program in accordance with an Investment Management Agreement between TIAA and Advisors. TPIS distributes contracts for the Tuition Savings Program in accordance with a Distribution Agreement between TIAA and TPIS. TIAA provides investment services for TIAA-CREF Life, in accordance with an Investment Management Agreement between TIAA and TIAA-CREF Life. Administrative services for TIAA-CREF Life are provided by TIAA in accordance with an Administrative Services Agreement between TIAA and TIAA-CREF Life. NOTE 11 - FEDERAL INCOME TAXES TIAA is a nonprofit organization and, through December 31, 1997, was exempt from federal income taxation under the Internal Revenue Code ("Code"). Any non-pension related income, however, was subject to federal income taxation as unrelated business income. Effective January 1, 1998, as a result of federal legislation, TIAA is no longer exempt from federal income taxation and is taxed as a stock life insurance company. Beginning with 1998, TIAA files a consolidated federal income tax return with its subsidiary affiliates. The tax B-73 sharing agreement follows the current reimbursement method, whereby members of the consolidated group will generally be reimbursed for their losses on a pro-rata basis by other members of the group to the extent that they have taxable income, subject to limitations imposed under the Code. The federal income tax provisions included in the accompanying statements of operations are based on taxes actually paid or recovered or anticipated to be paid or recovered. The approximate income tax expense (benefit) of $26,784,000, $24,048,000 and $(25,213,000) for 2001, 2000 and 1999, respectively, reflected in the accompanying statements of operations are the amounts that are payable (receivable) under such tax sharing agreement. TIAA reported a tax loss for 2000 and 1999 and expects to report a tax loss for 2001 as a result of net operating losses attributable to required increases in policy and contract reserves. These reserve increases will reverse over time, thereby increasing TIAA's taxable income in future years. TIAA is subject to the domestic federal statutory rate of 35%. TIAA's effective federal tax rate is 3% for 2001 and 2% for 2000. The difference between the statutory rate and TIAA's effective rate is primarily attributable to the utilization of net operating losses described above. At December 31, 2001, TIAA had a net operating loss (NOL) carryforward for tax purposes of approximately $4.1 billion. These net operating losses were generated in 1998 and 1999. Under the Code, the tax loss carryforwards will generally expire after fifteen years (in 2013 and 2014). TIAA did not incur federal taxes in the current or preceding years that are available for recoupment in the event of future net losses. NOTE 12 - PENSION PLAN AND POSTRETIREMENT BENEFITS TIAA maintains a qualified, noncontributory defined contribution pension plan covering substantially all employees. All employee pension plan liabilities are fully funded through retirement annuity contracts. Contributions are made semi-monthly to each participant's contract based on a percentage of salary, with the applicable percentage varying by attained age. All contributions are fully vested after five years of service. Forfeitures arising from terminations prior to vesting are used to reduce future employer contributions. The accompanying statements of operations include contributions to the pension plan of approximately $30,989,000, $25,484,000, and $23,865,000 in 2001, 2000 and 1999, respectively. This includes supplemental contributions made to company-owned annuity contracts under a non-qualified deferred compensation plan. In addition to the pension plan, TIAA provides certain other postretirement life and health insurance benefits to eligible retired employees who meet prescribed age and service requirements. The postretirement benefit obligation for retirees and fully eligible employees was approximately $37,737,000 at December 31, 2001. The postretirement benefit obligation for non-vested employees was approximately $42,418,000 at December 31, 2001. The unrecognized transition obligation was $8,599,000 and $9,380,000 at December 31, 2001 and 2000, respectively. The cost of such benefits reflected in the accompanying statements of operations was approximately $3,283,000, $2,914,000, and $3,180,000 for 2001, 2000 and 1999, respectively. The discount rate used in determining the postretirement benefit obligations was 7.5% per year and the medical care cost trend rate was 8% per year in 2002, decreasing by .50% in each future year, to an ultimate rate of 5.5% per year in 2007. As the plan is not pre-funded, the value of plan assets is zero. The accrued postretirement benefit liability was $34,986,000 and $32,325,000 as of December 31, 2001 and 2000, respectively. The medical care cost trend rate assumption has a significant effect on the amounts reported. To illustrate, increasing the assumed medical care cost trend rates by one percentage point in each year would increase the postretirement benefit obligation as of December 31, 2001 by approximately $6,146,000 and the eligibility cost and interest cost components of net periodic postretirement benefit expense for 2001 by approximately $838,000. TIAA also maintains a non-qualified deferred compensation plan for non-employee trustees and members of the TIAA Board of Overseers. The plan provides an award equal to 50% of the annual stipend that is invested annually in company-owned annuity contracts. Payout of accumulations is normally made in a lump sum following the trustee's or member's separation from the Board. B-74 NOTE 13 - POLICY AND CONTRACT RESERVES At December 31, 2001 and 2000, TIAA's general account annuity reserves are summarized as follows:
2001 2000 --------------------------- ------------------------- AMOUNT PERCENT AMOUNT PERCENT ---------------- ------- --------------- ------- Subject to discretionary withdrawal: At book value without adjustment .............................. $ 13,914,090,000 13.1% $11,594,104,000 1.7% At market value ............................................... -- -- -- -- Not subject to discretionary withdrawal ......................... 92,243,761,000 86.9 87,199,698,000 88.3 ---------------- ------ --------------- ------ Total annuity reserves .......................................... 106,157,851,000 100.0% 98,793,802,000 100.0% Reconciliation to total policy and contract reserves shown on the balance sheet: Reserves on other life policies and contracts................ 445,385,000 427,109,000 Reserves on accident and health policies..................... 760,231,000 638,320,000 ---------------- --------------- Total policy and contract reserves .............................. $107,363,467,000 $99,859,231,000 ================ ===============
On January 1, 2001, in accordance with codified statutory accounting requirements, additional reserves in the amount of approximately $22,313,000 were established to cover premium deficiencies in certain group disability insurance blocks of business. At December 31, 2001, the reserve was approximately $9,970,000. In addition, at December 31, 2001, additional reserves amounting to approximately $22,000,000 were established to cover future claims settlement expenses for the group disability insurance business, and additional long-term care insurance reserves in the amount of $10,000,000 were established in accordance with regulatory actuarial asset and reserve adequacy requirements. On its deferred and payout annuities, TIAA holds reserves greater than the minimum reserves required by NAIC SAP. For 2001 issues, the amount is approximately $622,400,000. (Disclosure of this amount is required under NAIC Emerging Accounting Issues Interpretation Number 01-26.) NOTE 14 - COMMERCIAL PAPER/LIQUIDITY FACILITY TIAA began issuing commercial paper in May 1999 under a maximum authorized program of $2 billion and had no outstanding obligation at December 31, 2001 and 2000, respectively. Interest expense totaled approximately $ 0, $50,462,000 and $24,585,000 during 2001, 2000 and 1999, respectively. TIAA maintains a short-term revolving credit liquidity facility of approximately $1 billion to support the commercial paper program, but this liquidity facility has not been utilized. NOTE 15 - CONTINGENCIES It is the opinion of management that any liabilities which might arise from litigation, state guaranty fund assessments and other matters, over and above amounts already provided for in the financial statements, are not considered material in relation to TIAA's financial position or the results of its operations. NOTE 16 - SUBSEQUENT EVENTS On January 30, 2002, TIAA Financial Services, LLC ("TFS"), a direct wholly-owned subsidiary of TIAA, was capitalized with $5,750,000. TFS contributed $500,000 in capital to TIAA Advisory Services, LLC ("TAS") in exchange for a membership certificate in TAS. TAS will provide investment advisory services to third parties. In addition, on January 30, 2002, TFS contributed $5,000,000 to TIAA Global Markets, Inc. ("TGM") in exchange for 100 shares of common stock of TGM. TGM was formed for the purpose of issuing notes and other debt instruments and investing the proceeds in compliance with the investment guidelines approved by the Board of Directors of TGM. Other than the investment portfolio, TGM will have no other significant assets. Other than the notes, and any other debt that may be incurred by TGM in the future, it is not anticipated that TGM will have other significant liabilities. TGM is authorized to issue up to $5 billion in debt. TIAA's Board of Trustees authorized TIAA to guarantee up to $5 billion of TGM's debt. TGM issued $500 million of senior notes due in 2007 in February 2002. This debt is rated AAA by Standard & Poor's Rating Services, Aaa by Moody's Investors Services, Inc., and AAA by Fitch Ratings. The notes are guaranteed by TIAA. The guarantee constitutes an unsecured unsubordinated obligation of TIAA. Current TGM investment guidelines include limits on industry, issuer, ratings and asset type. It is anticipated that all of TGM's assets at the time of purchase will be rated investment grade by at least one nationally recognized rating agency and that the portfolio will generally match the coupon structure and currency of the debt instruments issued including the notes. In the event TGM issues additional debt instruments, it intends to employ a segmented approach to the asset/liability management of its portfolio, which is intended to provide a dedicated pool of assets earmarked for the liabilities. TGM will perform functions relating to the investment process by utilizing personnel and facilities of TIAA, as needed, at cost. TIAA does not anticipate having to perform under the guarantee. B-75 [RECYCLE LOGO] Printed on recycled paper TVA1SAI-4/02 PART C OTHER INFORMATION ITEM 28. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements The following Financial Statements for TIAA Separate Account VA-1 are included with Part A (Prospectus) of this Registration Statement: Page ---- Condensed Financial Information.............................................8 The following Financial Statements for TIAA Separate Account VA-1 (the "Registrant") and Teachers Insurance and Annuity Association of America ("TIAA") are included with Part B (the Statement of Additional Information) of this Registration Statement: Page ---- (1) The Registrant--Stock Index Account Report of Management Responsibility........................................B-21 Report of the Audit Committee..............................................B-22 Audited Financial Statements: Statement of Assets and Liabilities......................................B-24 Statement of Operations..................................................B-25 Statements of Changes in Net Assets......................................B-26 Notes to Financial Statements..............................................B-27 Report of Independent Auditors.............................................B-29 Statement of Investments...................................................B-30 (2) TIAA Chairman's Letter..........................................................B-52 Report of Management Responsibility........................................B-53 Report of the Audit Committee..............................................B-54 Report of Independent Auditors.............................................B-55 Statutory-Basis Financial Statements: Balance Sheets ..........................................................B-56 Statements of Operations.................................................B-57 Statements of Changes in Capital and Contingency Reserves................B-58 Statements of Cash Flows.................................................B-59 Notes to Statutory-Basis Financial Statements..............................B-60 C-1 (b) Exhibits (1) Resolution of the Board of Trustees of TIAA establishing the Registrant (1) (2) (A) Rules and Regulations of the Registrant (2) (B) Amendment to the Rules and Regulations of the Registrant, adopted as of October 8, 2001.* (3) Custodial Services Agreement between TIAA and Bankers Trust Company (3) (4) Investment Management Agreement by and among TIAA, the Registrant, and Teachers Advisors, Inc. (2) (5) (A) Distribution Agreement by and among TIAA, the Registrant, and Teachers Personal Investors Services, Inc. dated September 15, 1994 ("Distribution Agreement") (2) (B) Amendment dated August 1, 1995 to Distribution Agreement (4) (C) Amendment dated November 3, 1997 to Distribution Agreement (5) (6) (A) Form of Teachers Personal Annuity Contract (effective November 1, 1994) (2) (B) Form of Endorsement to Teachers Personal Annuity Contract (in-force prior to November 1, 1994) (2) (7) Form of Application for Teachers Personal Annuity Contract (2) (8) (A) Charter of TIAA, as amended (8) (B) Bylaws of TIAA, as amended (6) (9) None (10) Not Applicable (11) (A) Administrative Services Agreement by and between TIAA and the Registrant dated September 15, 1994 ("Administration Agreement") (2) (B) Amendment dated August 1, 1995 to Administration Agreement (4) (12) (A) Consent of Charles H. Stamm, Esquire* (B) Consent of Sutherland Asbill & Brennan LLP* (13) (A) Consent of Ernst & Young LLP* (14) None (15) Seed Money Agreement by and between TIAA and the Registrant (2) (16) Schedule of Computation of Performance Information* (17) Registrant's Policy Statement on Personal Trading (7) - ---- * Filed herewith. (1) Incorporated by reference to the Exhibit filed electronically with Post-effective Amendment No. 5 to Form N-3 as filed on April 1, 1999 (previously filed in the initial Registration Statement on Form N-3 dated May 18, 1994 (File No. 33-79124)). C-2 (2) Incorporated by reference to the Exhibit filed herewith electronically with Post-effective Amendment No. 5 to Form N-3 as filed on April 1, 1999 (previously filed in Pre-effective Amendment No. 1 to Form N-3 dated October 7, 1994 (File No. 33-79124)). (3) Incorporated by reference to the Exhibit filed herewith electronically with Post-effective Amendment No. 5 to Form N-3 as filed on April 1, 1999 (previously filed in Pre-effective Amendment No. 2 to Form N-3 dated October 18, 1994 (File No. 33-79124)). (4) Previously filed in Post-effective Amendment No. 2 to Form N-3 dated March 26, 1996 (File No. 33-79124) and incorporated herein by reference. (5) Previously filed in Post-effective Amendment No. 4 to Form N-3 dated March 27, 1998 (File No. 33-79124) and incorporated herein by reference. (6) Previously filed in Post-effective Amendment No. 5 to Form N-3 dated April 1, 1999 (File No. 33-79124) and incorporated herein by reference. (7) Previously filed in Post-effective Amendment No. 6 to Form N-3 dated March 30, 2000 (File No. 33-79124) and incorporated herein by reference. (8) Previously filed in Post-effective Amendment No. 7 to Form N-3 dated March 29, 2001 (File No. 33-79124) and incorporated herein by reference. ITEM 29. DIRECTORS AND OFFICERS OF THE INSURANCE COMPANY
Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- Elizabeth E. Bailey Trustee The Wharton School University of Pennsylvania Suite 3100 Steinberg-Dietrich Hall Philadelphia, PA 19104-6372 Joyce A. Fecske Trustee 11603 Briarwood Lane Burr Ridge, Illinois 60525-5173 Edes P. Gilbert Trustee Independent Educational Services 49 East 78th Street, Suite 4A New York, NY 10021
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - ------------------------------------------------------------------------------------------- Martin J. Gruber Trustee New York University Stern School of Business Henry Kaufman Management Education Center 44 West 4th Street, Suite 988 New York, NY 10012 Nancy L. Jacob Trustee Windermere Investment Associates 121 S.W. Morrison Street, Suite 925 Portland, OR 97204 Marjorie Fine Knowles Trustee College of Law Georgia State University P.O. Box 4037 Atlanta, GA 30302-4037 Bevis Longstreth Trustee Debevoise & Plimpton 919 Third Avenue New York, NY 10022-6225 Stephen A. Ross Trustee Sloan School of Management Massachusetts Institute of Technology 77 Massachusetts Avenue Cambridge, MA 02139 Nestor V. Santiago Trustee Howard Hughes Medical Institute 4000 Jones Bridge Road Chevy Chase, MD 20815 Eugene C. Sit Trustee Sit Investment Associates, Inc. 4600 Norwest Center 90 South Seventh Street Minneapolis, MN 55402-4130 Maceo K. Sloan Trustee NCM Capital Management Group, Inc. 103 West Main Street, Suite 400 Durham, NC 27701-3638
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- David K. Storrs Trustee Alternative Investment Group, LLC 65 South Gate Lane Southport, CT 06490 Robert W. Vishny Trustee University of Chicago Graduate School of Business 1101 East 58th Street Chicago, IL 60637 Martin E. Galt, III Executive Vice President Executive Vice President TIAA-CREF and President 730 Third Avenue TIAA-CREF Investment New York, New York 10017-3206 Products David Alexander Trustee President Emeritus Pomona College Sumner Hall 330 College Way Claremont, California 91711-6305 Marcus Alexis Trustee Board of Trustees, Professor of Economics and Professor of Management and Strategy J. L. Kellogg Graduate School of Management Northwestern University; Visiting Professor of Economics, Stanford University 158 Colgett Drive Oakland, California 94619 John H. Biggs Trustee, Chairman, President and Chief TIAA-CREF President and Chief Executive Officer 730 Third Avenue Executive Officer New York, New York 10017-3206 Willard T. Carleton Trustee Donald R. Diamond Professor of Finance Emeritus College of Business and Public Administration University of Arizona 4915 Camino Antonio Tucson, Arizona 85718-6005
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- Robert C. Clark Trustee Dean and Royall Professor of Law Harvard Law School Harvard University Griswold 200 Cambridge, Massachusetts 02138 Estelle A. Fishbein Trustee Vice President and General Counsel The Johns Hopkins University 113 Garland Hall Baltimore, Maryland 21218 Frederick R. Ford Trustee Executive Vice President and Treasurer Emeritus Purdue University 1032 Hovde Hall of Administration West Lafayette, Indiana 47907-1032 Ruth Simms Hamilton Trustee Professor of Sociology and Director of African Diaspora Research Project Michigan State University W142 Owen Graduate Hall East Lansing, Michigan 48824 Rochelle B. Lazarus Trustee Chairman and Chief Executive Officer Ogilvy & Mather Worldwide Worldwide Plaza 309 West 49th Street New York, NY 10019 Martin L. Leibowitz Trustee, Vice Chairman Chief Investment Officer TIAA-CREF and Chief Investment 730 Third Avenue Officer New York, New York 10017-3206 Robert M. O'Neil Trustee Director The Thomas Jefferson Center for the Protection of Free Expression 400 Peter Jefferson Place Charlottesville, Virginia 22911-8691
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- Leonard S. Simon Trustee Vice Chairman Charter One Financial Inc. 95 Hupi Road P.O. Box 538 Monterey, Massachusetts 01245 Ronald L. Thompson Trustee Chairman and Chief Executive Officer Midwest Stamping Co. 3455 Briarfield Road, Suite A P.O. Box 1120 Maumee, Ohio 43537 Paul R. Tregurtha Trustee Chairman and Chief Executive Officer Mormac Marine Group, Inc. and Moran Transportation Company, Inc.; Vice Chairman, Interlake Steamship Company One Landmark Square Stamford, Connecticut 06901-2608 William H. Waltrip Trustee Chairman Technology Solutions Company 1261 Pequot Avenue Southport, CT 06490 Rosalie J. Wolf Trustee Managing Director Laurel Management, LLC c/o Rothschild Inc. 1251 Avenue of Americas New York, New York 10020 Richard J. Adamski Vice President Vice President TIAA-CREF and Treasurer and Treasurer 730 Third Avenue New York, New York 10017-3206 C. Victoria Apter Executive Vice TIAA-CREF President, Information 730 Third Avenue Technology New York, New York 10017-3206
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- Anthony V. Betro Administrative Director, Administrative Director, TIAA-CREF Finance and Planning Finance and Planning 730 Third Avenue New York, New York 10017-3206 Scott Budde Director, TIAA-CREF Equity Portfolio 730 Third Avenue Analysis New York, New York 10017-3206 Gary Chinery Second Vice President Second Vice President TIAA-CREF and Associate Treasurer 730 Third Avenue New York, New York 10017-3206 Peter C. Clapman Senior Vice President Senior Vice President TIAA-CREF and Chief Counsel, and Chief Counsel, 730 Third Avenue Corporate Governance Corporate Governance New York, New York 10017-3206 Drew J. Collins Senior Managing TIAA-CREF Director 730 Third Avenue New York, New York 10017-3206 Matthew Daitch Actuary Assistant Actuary TIAA-CREF 730 Third Avenue New York, New York 10017-3206 Paul L. Davis Senior Managing Senior Managing TIAA-CREF Director, Quantitative Director 730 Third Avenue Investments New York, New York 10017-3206 Hans L. Erickson Senior Managing Senior Managing TIAA-CREF Director, Quantitative Director 730 Third Avenue Investments New York, New York 10017-3206 Scott C. Evans Executive Vice Executive Vice President TIAA-CREF President, CREF 730 Third Avenue Investments New York, New York 10017-3206
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- James G. Fleischmann Senior Managing TIAA-CREF Director 730 Third Avenue New York, New York 10017-3206 Dennis D. Foley Vice President, Vice President TIAA-CREF Annuities and Mutual 730 Third Avenue Funds New York, New York 10017-3206 Richard L. Gibbs Executive Executive TIAA-CREF Vice President, Finance Vice President and Chief 730 Third Avenue and Planning Financial Officer New York, New York 10017-3206 Stewart P. Greene Chief Counsel and Chief Counsel and TIAA-CREF Assistant Secretary Assistant Secretary 730 Third Avenue New York, New York 10017-3206 Linda C. Guyden Vice President and TIAA-CREF Auditor 730 Third Avenue New York, New York 10017-3206 Don W. Harrell Executive TIAA-CREF Vice President, External 730 Third Avenue Affairs New York, New York 10017-3206 Ira J. Hoch Executive Vice TIAA-CREF President, Financial 730 Third Avenue Operations and Facilities New York, New York 10017-3206 Matina S. Horner Executive TIAA-CREF Vice President, Human 730 Third Avenue Resources New York, New York 10017-3206 Abby L. Ingber Senior Counsel and Senior Counsel and TIAA-CREF Assistant Secretary Assistant Secretary 730 Third Avenue New York, New York 10017-3206
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- E. Laverne Jones Vice President and TIAA-CREF Corporate Secretary 730 Third Avenue New York, New York 10017-3206 Harry I. Klaristenfeld Executive Vice President TIAA-CREF and Chief Actuary 730 Third Avenue New York, New York 10017-3206 Edward J. Leahy Director, Corporate Tax Assistant Secretary TIAA-CREF 730 Third Avenue New York, New York 10017-3206 Thomas K. Lynch Second Vice President, Second Vice President TIAA-CREF Investment Reporting 730 Third Avenue New York, New York 10017-3206 Sachie Makishi Managing Director TIAA-CREF 730 Third Avenue New York, New York 10017-3206 Carlton Martin Managing Director TIAA-CREF 730 Third Avenue New York, New York 10017-3206 Gerald K. McCullough Vice President and Chief Vice President TIAA-CREF Accountant, 730 Third Avenue Investments New York, New York 10017-3206 Frances Nolan Executive Vice TIAA-CREF President, Retirement 730 Third Avenue Services Administration New York, New York 10017-3206 Bertram L. Scott Executive Vice President TIAA-CREF and President, TIAA Life 730 Third Avenue Insurance Company New York, New York 10017-3206
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- Richard Schlefer Senior Managing Senior Managing TIAA-CREF Director, CREF Director 730 Third Avenue Administration New York, New York 10017-3206 Christopher F. Semenuk Managing Director TIAA-CREF 730 Third Avenue New York, New York 10017-3206 Mark L. Serlen Senior Counsel and Senior Counsel and TIAA-CREF Assistant Secretary Assistant Secretary 730 Third Avenue New York, New York 10017-3206 Deanne J. Shallcross Executive Vice Executive Vice President TIAA-CREF President, TIAA-CREF 730 Third Avenue Marketing New York, New York 10017-3206 David A. Shunk Executive Vice TIAA-CREF President, Consulting 730 Third Avenue Services New York, New York 10017-3206 Lisa Snow Vice President and Chief Vice President and TIAA-CREF Counsel, Corporate Chief Counsel, 730 Third Avenue Law Corporate Law and New York, New York 10017-3206 Secretary Robert J. Sohr Second Vice President TIAA-CREF and Director, Securities 730 Third Avenue Lending/Corporate New York, New York 10017-3206 Governance John A. Somers Executive Vice Executive Vice President TIAA-CREF President, TIAA 730 Third Avenue Investments New York, New York 10017-3206 Charles H. Stamm Executive Executive TIAA-CREF Vice President Vice President 730 Third Avenue and General Counsel and General Counsel New York, New York 10017-3206
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Positions and Offices Positions and Offices Name and Principal Business Address with Insurance Company with Registrant - -------------------------------------------------------------------------------------------- Steven I. Traum Managing Director and Managing Director TIAA-CREF Vice President, Money 730 Third Avenue Market/ Inflation Linked New York, New York 10017-3206 Bonds Susan E. Ulick Senior Managing TIAA-CREF Director 730 Third Avenue New York, New York 10017-3206 Roger A. Vellekamp Vice President, Vice President, TIAA-CREF Corporate Tax Corporate Tax Officer 730 Third Avenue and Assistant Secretary New York, New York 10017-3206 Nancy Wadelton Managing Director TIAA-CREF 730 Third Avenue New York, New York 10017-3206 Bruce Wallach Vice President and Vice President TIAA-CREF Corporate Actuary 730 Third Avenue New York, New York 10017-3206 Mary Ann Werner Executive Vice President Executive Vice President TIAA-CREF and President, TIAA 730 Third Avenue Shared Services New York, New York 10017-3206 John P. Wesley Second Vice President Second Vice President TIAA-CREF and Product Manager, 730 Third Avenue Personal Annuity New York, New York 10017-3206 James A. Wolf Executive Vice President TIAA-CREF and President, TIAA 730 Third Avenue Retirement Services New York, New York 10017-3206 Willard T. Wolff Managing Director TIAA-CREF 730 Third Avenue New York, New York 10017-3206
C-12 ITEM 30. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE INSURANCE COMPANY OR REGISTRANT The following companies are subsidiaries of TIAA and are included in the consolidated financial statements of TIAA: BT Properties, Inc. College Credit Trust DAN Properties, Inc. ETC Repackaging, Inc. Illinois Teachers Properties, LLC JV Florida One, Inc. JV Florida Four, Inc. JV Georgia One, Inc. JV Michigan Three, Inc. JV Minnesota One, Inc. JV North Carolina One, Inc. JWL Properties, Inc. Liberty Place Retail, Inc. Liberty Place Retail II, Inc. Light St. Partners, LLP M.O.A. Enterprises, Inc. MOA Investors I, Inc. NCDC Funding, LLC ND Properties, Inc. Rouse-Teachers Holding Company Savannah Teachers Properties, Inc. T114 Properties, Inc. T-Investment Properties Corp. T-Land Corp. TCT Holdings, Inc. Teachers Advisors, Inc. Teachers Boca Properties II, Inc. Teachers Boca Properties III, Inc. Teachers Concourse, LLC Teachers Mayflower, LLC Teachers Michigan Properties, Inc. Teachers Pennsylvania Realty, Inc. Teachers Personal Investors Services, Inc. Teachers Properties, Inc. Teachers REA, LLC Teachers REA II, LLC Teachers REA III, LLC Teachers REA IV, LLC Teachers Realty Corporation Teachers West, LLC TEO-NP, LLC TIAA Advisory Services, LLC TIAA CMBS I, LLC TIAA Diamond Investor, LLC TIAA European Funding Trust TIAA Financial Services, LLC TIAA Franklin Square, LLC TIAA Lakepointe, LLC TIAA SF One, LLC TIAA Realty, Inc. TIAA Retail Commercial, LLC TIAA Tri-State, LLC TIAA Timberlands I, LLC TIAA Timberlands II, LLC TIAA-CREF Enterprises, Inc. TIAA-CREF Individual & Institutional Services, Inc. TIAA-CREF Investment Management, LLC TIAA-CREF Life Insurance Company TIAA-CREF Trust Company, FSB TIAA-CREF Tuition Financing, Inc. TIAA-Fund Equities, Inc. TPI Housing, Inc. Washington Teachers Properties II, Inc. WRC Properties, Inc. 730 Texas Forest Holdings, Inc. 485 Properties, LLC Subsidiaries of Teachers Properties, Inc.: Rouse-Teachers Holding Company C-13 Rouse-Teachers Land Holdings, Inc. (1) All subsidiaries are Delaware corporations except as follows: A) Pennsylvania non-stock, non-profit corporations: Liberty Place Retail, Inc. Teachers Pennsylvania Realty, Inc. Teachers Realty Corporation B) College Credit Trust, a New York Trust C) TIAA-CREF Life Insurance Company is a New York Corporation D) TIAA-CREF Trust Company, FSB is a Federal Savings Bank E) TIAA European Funding Trust, a Delaware Trust F) Light St. Partners, LLP, a Maryland Limited Liability Partnership G) Rouse-Teachers Holding Company, a Nevada Corporation (2) All subsidiaries are 100% owned directly by TIAA, except as follows: A) TIAA-CREF Enterprises, Inc. owns 100% of the stock of Teachers Advisors, Inc., Teachers Personal Investors Services, Inc., TIAA-CREF Life Insurance Company, TIAA-CREF Tuition Financing, Inc. and TCT Holdings, Inc. B) TCT Holdings, Inc. owns 100% of the stock of TIAA-CREF Trust Company, FSB . C) Teachers Properties, Inc. owns 100% of the stock of TPI Housing, Inc. and 95% of the stock of Rouse-Teachers Holding Company. Rouse-Teachers Holding Company owns 100% of the stock of Rouse-Teachers Land Holdings, Inc. D) ND Properties, Inc. owns 100% of the stock of IMOR, S.A., A Portugese corporation. (3) All subsidiaries have as their sole purpose the ownership of investments which could, pursuant to New York State Insurance Law, be owned by TIAA itself, except the following: A) Teachers Advisors, Inc., which provides investment advice for the Registrant and others. B) Teachers Personal Investors Services, Inc., which provides broker-dealer services for the Registrant and others. C) TIAA-CREF Investment Management, LLC, which provides investment advice for College Retirement Equities Fund. D) TIAA-CREF Individual & Institutional Services, Inc., which provides broker-dealer and administrative services for College Retirement Equities Fund. E) TCT Holdings, Inc., which is a unitary thrift holding company, was formed for the sole purpose of holding stock of a federal chartered savings bank. F) TIAA-CREF Life Insurance Company, which is a subsidiary life insurance company of TIAA, is licensed under the State of New York to market certain life insurance products not currently offered by TIAA. G) TIAA-CREF Trust Company, FSB which is a federal chartered savings bank. C-14 H) TIAA-CREF Tuition Financing, Inc. which was formed to administer tuition assistance plans. ITEM 31. NUMBER OF CONTRACTOWNERS As of February 28, 2002, there were 21,308 contracts in force. ITEM 32. INDEMNIFICATION The Registrant shall indemnify each of the members of the Management Committee ("Managers") and officers of the Registrant against all liabilities and expenses, including but not limited to counsel fees, amounts paid in satisfaction of judgments, as fines or penalties, or in compromise or settlement, reasonably incurred in connection with the defense or disposition of any threatened, pending, or completed claim, action, suit, or other proceeding, whether civil, criminal, administrative, or investigative, whether before any court or administrative or legislative body, to which such person may be or may have been subject, while holding office or thereafter, by reason of being or having been such a Manager or officer; provided that such person acted, or failed to act, in good faith and in the reasonable belief that such action was in the best interests of the Separate Account, and, with respect to any criminal action or proceeding, such person had no reasonable cause to believe the conduct was unlawful; and except that no such person shall be indemnified for any liabilities or expenses arising by reason of disabling conduct, whether or not there is an adjudication of liability. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to Managers and officers of the Registrant, pursuant to the foregoing provision or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a Manager or officer in the successful defense of any action, suit or proceeding) is asserted by a Manager or officer in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in that Act and will be governed by the final adjudication of such issue. ITEM 33. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER Investment advisory services for the Registrant are provided by Teachers Advisors, Inc. ("Advisors"). In this connection, Advisors is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. C-15 The business and other connections of Advisors' officers are listed in Schedules A and D of Form ADV as currently on file with the Commission (File No. 801-46887), the text of which is hereby incorporated by reference. ITEM 34. PRINCIPAL UNDERWRITERS (a) Teachers Personal Investors Service, Inc. ("TPIS"), acts as principal underwriter for TIAA-CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds and TIAA-CREF Life Funds. (b) TPIS may be considered the principal underwriter for the Registrant. The officers of TPIS and their positions and offices with TPIS and the Registrant are listed in Schedule A of Form BD as currently on file with the Commission (File No. 8-47051), the text of which is hereby incorporated by reference. (c) Not Applicable. ITEM 35. LOCATION OF ACCOUNTS AND RECORDS All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder are maintained at the Registrant's home office, 730 Third Avenue, New York, New York 10017, and at other offices of the Registrant located at 750 Third Avenue and 485 Lexington Avenue, both in New York, New York 10017. In addition, certain duplicated records are maintained at Pierce Leahy Archives, 64 Leone Lane, Chester, New York 10918. ITEM 36. MANAGEMENT SERVICES Not Applicable. ITEM 37. UNDERTAKINGS AND REPRESENTATIONS (a) Not Applicable. (b) The Registrant undertakes to file a post-effective amendment to this Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. C-16 (c) The Registrant undertakes to include either (1) as part of any application to purchase a contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information. (d) The Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under Form N-3 promptly upon written or oral request. (e) TIAA represents that the fees and charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by TIAA. C-17 SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, TIAA Separate Account VA-1 certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf, in the City of New York and State of New York on the 29th day of March, 2002. TIAA SEPARATE ACCOUNT VA-1 By: /s/ MARTIN E. GALT, III ----------------------- Martin E. Galt, III Executive Vice President As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/ MARTIN E. GALT, III Executive Vice President (Principal - ----------------------- Executive Officer) 3/29/02 Martin E. Galt, III /s/ RICHARD L. GIBBS Executive Vice President and Chief - -------------------- Financial Officer (Principal Financial and 3/29/02 Richard L. Gibbs Accounting Officer)
Signature of Trustee Date Signature of Trustee Date - ---------------------- ---- -------------------- --- /s/ ELIZABETH E. BAILEY 3/29/02 /s/ STEPHEN A. ROSS 3/29/02 - -------------------------- ------------------------ Elizabeth E. Bailey Stephen A. Ross /s/ JOYCE A. FECSKE 3/29/02 /s/ NESTOR V. SANTIAGO 3/29/02 - -------------------------- ------------------------ Joyce A. Fecske Nestor V. Santiago /s/ EDES P. GILBERT 3/29/02 /s/ EUGENE C. SIT 3/29/02 - -------------------------- ------------------------ Edes P. Gilbert Eugene C. Sit /s/ MARTIN J. GRUBER 3/29/02 /s/ MACEO K. SLOAN 3/29/02 - -------------------------- ------------------------ Martin J. Gruber Maceo K. Sloan /s/ NANCY L. JACOB 3/29/02 /s/ DAVID K. STORRS 3/29/02 - -------------------------- ------------------------ Nancy L. Jacob David K. Storrs /s/ MAJORIE FINE KNOWLES 3/29/02 /s/ ROBERT W. VISHNY 3/29/02 - -------------------------- ------------------------ Marjorie Fine Knowles Robert W. Vishny /s/ BEVIS LONGSTRETH 3/29/02 - -------------------------- Bevis Longstreth
SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, Teachers Insurance and Annuity Association of America certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf, in the City of New York and State of New York on the 29th day of March, 2002. TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA By: /s/ LISA SNOW ------------------------------------- Name: Lisa Snow Title: Vice President and Chief Counsel, Corporate Law As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/ JOHN H. BIGGS Chairman of the Board, President, and Chief 3/29/02 - ------------------------ Executive Officer (Principal Executive and John H. Biggs Financial Officer) /s/ MARTIN L. LEIBOWITZ Vice Chairman and Chief Investment Officer 3/29/02 - ------------------------ (Principal Investment Officer) Martin L. Leibowitz /s/ RICHARD L. GIBBS Executive Vice President (Principal Accounting 3/29/02 - ------------------------ Officer) Richard L. Gibbs
Signature of Trustee Date Signature of Trustee Date - -------------------- ---- -------------------- ---- /s/ DAVID ALEXANDER 3/29/02 /s/ ROCHELLE B. LAZARUS 3/29/02 - ------------------------- ------------------------------ David Alexander Rochelle B. Lazarus /s/ MARCUS ALEXIS 3/29/02 /s/ ROBERT M. O'NEIL 3/29/02 - ------------------------- ------------------------------ Marcus Alexis Robert M. O'Neil /s/ WILLARD T. CARLETON 3/29/02 /s/ LEONARD S. SIMON 3/29/02 - ------------------------- ------------------------------ Willard T. Carleton Leonard S. Simon /s/ ROBERT C. CLARK 3/29/02 /s/ RONALD L. THOMPSON 3/29/02 - ------------------------- ------------------------------ Robert C. Clark Ronald L. Thompson /s/ ESTELLE A. FISHBEIN 3/29/02 /s/ PAUL R. TREGURTHA 3/29/02 - ------------------------- ------------------------------- Estelle A. Fishbein Paul R. Tregurtha /s/ FREDERICK R. FORD 3/29/02 /s/ WILLIAM H. WALTRIP 3/29/02 - ------------------------- ------------------------------- Frederick R. Ford William H. Waltrip /s/ RUTH SIMMS HAMILTON 3/29/02 /s/ ROSALIE J. WOLF 3/29/02 - ------------------------- ------------------------------- Ruth Simms Hamilton Rosalie J. Wolf
EXHIBIT INDEX Exhibit Number Description of Exhibit - -------- ---------------------- 2(B) Amendment to the Rules and Regulations of the Registrant, adopted as of October 8, 2001. 12(A) Opinion and Consent of Charles H. Stamm, Esquire 12(B) Consent of Sutherland Asbill & Brennan LLP 13(A) Consent of Ernst & Young LLP 16 Schedule of Computation of Performance Information EX-99.2B 3 e88197_ex-992b.txt AMENDMENT TO RULES EX-99.2(B) AMENDMENT TO THE RULES AND REGULATIONS OF TIAA SEPARATE ACCOUNT VA-1 Amendment to the Rules and Regulations of TIAA Separate Account VA-1 ("VA-1"), as amended as of July 25, 1994. Pursuant to Article XIII of the Rules and Regulations, the Management Committee of VA-1 has determined, by majority vote, that the Rules and Regulations shall be amended as follows: The first three sentences of Section 4.02 of the Rules and Regulations shall be replaced with the following: The Committee shall consist of at least two (2) but not more than twenty-five (25) members. The number of memberships constituting the Committee ("Managerships") may be increased or decreased from time to time, within the maximum and minimum stated in this Section 4.02, by a majority of the total number of members which the Committee would have if there were no vacancies thereon, and the tenure in office of a Manager shall not be affected by any decrease in the number of Managerships so made by the Committee. * * * * ADOPTED as of October 8, 2001, pursuant to authorization of the Management Committee of VA-1. EX-99.12(A) 4 e88197_ex-9912a.txt OPINION AND CONSENT OF CHARLES H. STAMM TIAA-CREF MUTUAL FUNDS CHARLES H. STAMM 730 Third Avenue EXECUTIVE VICE PRESIDENT AND New York, NY 10017-3206 GENERAL COUNSEL 212 490-9000 (212) 916-4700 March 27, 2002 The Management Committee TIAA Separate Account VA-1 730 Third Avenue New York, New York 10017-3206 Dear Committee Members: This opinion is furnished in connection with the filing by TIAA Separate Account VA-1 (the "Separate Account") of Post-effective Amendment No. 8 to the Registration Statement (File Nos. 33-79124 and 811-8520) of Form N-3 under the Securities Act of 1933 for certain individual variable annuity contracts (the "Contracts") offered and funded by the Separate Account. The Registration Statement covers an indefinite amount of securities in the form of interests in the Contracts. I have examined the Charter, Bylaws and other corporate records of Teachers Insurance and Annuity Association of America ("TIAA"), the Rules and Regulations and other organizational records of the Separate Account, and the relevant statutes and regulations of the State of New York. On the basis of such examination, it is my opinion that: 1. TIAA is a nonprofit life insurance company duly organized and validly existing under the laws of the State of New York. 2. The Separate Account is a "separate account" of TIAA within the meaning of Section 4240 of the New York Insurance Law, duly established by a resolution of TIAA's Board of Trustees and validly existing under the laws of the State of New York. 3. To the extent New York State law governs, the Contracts have been duly authorized by TIAA and, when issued as contemplated by the Registration Statement, Will constitute legal, validly issued and binding obligations of TIAA enforceable in accordance with their terms. I hereby consent to the use of this opinion as an exhibit to the Registration Statement, and to the reference to my name under the heading "Legal Matters" in the Statement of Additional Information. Sincerely, /s/ Charles H. Stamm -------------------------- Executive Vice President and General Counsel EX-99.12(B) 5 e88197_ex-9912b.txt CONSENT OF SUTHERLAND ASBILL & BRENNAN LLP EX-99.12(B) Consent of Sutherland Asbill & Brennan LLP Sutherland 1275 Pennsylvania Avenue, N.w. Asbill & Washington, D.C. 20004-2415 Brennan LLP 202.383.0100 fax 202.637.3593 ATTORNEYS AT LAW www.sablaw.com Steven B. Boehm DIRECT LINE: 202.383.0176 Internet: sboehm@sablaw.com MARCH 26, 2002 The Management Committee TIAA Separate Account VA-1 730 Third Avenue New York, New York 10017-3206 Re: Registration of Individual Deferred Variable Annuity Contracts (Registration Nos. 33-79124 and 811-8520) ---------------------------------------- Ladies and Gentlemen: We hereby consent to the reference to our name under the caption "Legal Matters" in the Statement of Additional Information filed as a part of Post-effective Amendment No. 8 to the above-captioned registration statement on Form N-3. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Sincerely, SUTHERLAND, ASBILL & BRENNAN LLP BY: /s/ Steven B. Boehm -------------------------------- Atlanta |X| Austin |X| New York |X| Tallahassee |X| Washington DC EX-99.13(A) 6 e88197_ex-9913a.txt CONSENT OF INDEPENDENT AUDITOR EX-99.13(A) Consent of Ernst & Young LLP CONSENT OF INDEPENDENT AUDITORS We consent to the reference made to our firm under the caption "Auditors" and "Experts" and to the use of our report dated February 8, 2002 on the Stock Index Account of TIAA Separate Account VA-1 included in this Registration Statement (Form N-3 file No. 33-79124) of TIAA Separate Account VA-1. We also consent to the use of our report on Teachers Insurance and Annuity Association of America ("TIAA") dated February 27, 2002 included in this Registration Statement. Such report expresses our opinion that TIAA'S statutory-basis financial statements present fairly, in all material respects, the financial position of TIAA at December 31, 2001 and December 31, 2000, respectively, and the results of its operations and its cash flows for each of the three years ended December 31, 2001 in conformity with statutory accounting practices prescribed or permitted by the New York State Insurance Department and not in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP ERNST & YOUNG LLP New York, New York March 26, 2002 EX-99.16 7 e88197_ex-9916.txt SCHEDULE OF COMPUTATION EX-99.16 Schedule of Computation Schedule of Computation Total Return Information for the TIAA Separate Account VA-1 Stock Index Account
January 1, 2001 January 1, 1997 86 months (From November 1, 1994 to to Commencement of operations to December 31, 2001 December 31, 2001 December 31, 2001) ----------------- ------------------ ----------------- Hypothetical initial payment of $1,000 (P) $1,000 $1,000 $1,000 Accumulation unit value: At start of period (A) $75.3923 $41.8230 $25.8318 At end of period (B) $66.5560 $66.5560 $66.5560 Ending value of hypothetical investment (EV) = P x (B/A) $882.80 $1,591.37 $2,576.51 Cumulative rate of total return = {(EV/P) - 1} x 100 (11.72)% 59.14% 157.65% Number of years in period (n) 1 5 7.17 Net change factor (1 +T) = EV/P .8828 1.59137 2.57651 Average annual compound rate of total return (T) (11.72)% 9.74% 14.11%
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