avatar American International Group, Inc. Finance, Insurance, And Real Estate

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    ANNUAL REPORT 2011 SUNAMERICA Focused Alpha Large-Cap Fund (FGI) Robert C. Doll Thomas F. Marsico


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    INFORMATION REGARDING THE FUND’S DISTRIBUTION POLICY The SunAmerica Focused Alpha Large-Cap Fund, Inc. (the “Fund”) has established a dividend distribution policy (the “Distribution Policy”) pursuant to which the Fund makes a level dividend distribution each quarter to shareholders of its common stock (after payment of interest on any outstanding borrowings or dividends on any outstanding preferred shares) at a rate that is based on a fixed amount per share as determined by the Board of Directors of the Fund (the “Board”), subject to adjustment in the fourth quarter, as necessary, so that the Fund satisfies the minimum distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). As of the most recent fourth quarterly dividend distribution paid on December 29, 2011, the amount of the dividend distribution was $0.58 per share, which is higher than the amounts payable by the Fund in the prior three quarters of 2011 because the fourth quarterly dividend distribution was increased to include an amount expected to satisfy the minimum distribution requirements of the Code. Pursuant to an exemptive order (the “Order”) issued to the Fund by the Securities and Exchange Commission (“SEC”) on February 3, 2009, the Fund may distribute long-term capital gains more frequently than the limits provided in Section 19(b) under the Investment Company Act of 1940, as amended (the “1940 Act”) and Rule 19b-1 thereunder. Therefore, dividend distributions paid by the Fund during the year may include net income, short-term capital gains, long- term capital gains and/or return of capital. If the total distributions made in any calendar year exceed investment company taxable income and net capital gains, such excess distributed amount would be treated as ordinary dividend income to the extent of the Fund’s current and accumulated earnings and profits. Distributions in excess of the earnings and profits would first be a tax-free return of capital to the extent of the adjusted tax basis in the shares. After such adjusted tax basis is reduced to zero, the distribution would constitute capital gains (assuming the shares are held as capital assets). A return of capital represents a return of a shareholder’s investment in the Fund and should not be confused with “yield,” “income” or “profit.” Shareholders will receive a notice with each dividend distribution, if required by Section 19(a) under the 1940 Act, estimating the sources of such dividend distribution and providing other information required by the Order. Investors should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Distribution Policy. The Board has the right to amend, suspend or terminate the Distribution Policy at any time without prior notice to shareholders. The Board might take such action, for example, if the Distribution Policy had the effect of decreasing the Fund’s assets to a level that was determined to be detrimental to Fund shareholders. An amendment, suspension or termination of the Distribution Policy could have a negative effect on the Fund’s market price per share which, in turn could create or widen a trading discount. Please see Note 2 to the financial statements included in this report for additional information regarding the Distribution Policy. In addition, on December 19, 2011, shareholders of the Fund approved a proposal to reorganize the Fund into SunAmerica Focused Alpha Large-Cap Fund, a newly established open-end series of SunAmerica Specialty Series. The reorganization closed on January 23, 2012. Please see Note 8 to the financial statements included in this report for additional information regarding the reorganization.


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    December 31, 2011 ANNUAL REPORT SUNAMERICA FOCUSED ALPHA LARGE-CAP FUND, INC. SunAmerica Focused Alpha Large-Cap Fund (FGI)


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    Table of Contents SHAREHOLDERS’ LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF ASSETS AND LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 STATEMENT OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 STATEMENT OF CHANGES IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PORTFOLIO OF INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 RESULTS OF ANNUAL AND SPECIAL SHAREHOLDER MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 DIRECTORS AND OFFICERS INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SHAREHOLDER TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21


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    December 31, 2011 ANNUAL REPORT Shareholders’ Letter — (unaudited) Dear Shareholders: We are pleased to present this annual report for the SunAmerica Focused Alpha Large-Cap Fund (the “Fund”). For the year ended December 31, 2011, the Fund’s total return based on net asset value (NAV) was -1.50%. The Fund’s benchmark, the Russell 1000® Index1, returned 1.50% for the same period. The Fund’s total return based on market price was 7.55% during the annual period. As of December 31, 2011, the Fund’s NAV was $16.57, and its market price was $16.22. The 12-month period ended December 31, 2011 proved to be a highly tempestuous one for stocks around the world. Indeed, almost all areas of the global financial markets experienced a broad “risk on/risk off” trading pattern, with the “risk off” assets winning for the year. The “risk on/risk off” trading pattern was one in which investors vacillated en masse between sharply optimistic or pessimistic views toward the financial markets, such that swings in risk appetite became more frequent and more dramatic. Amidst such unprecedented volatility, correlations between and within asset classes markedly increased. Ultimately, the U.S. equity markets finished the year almost at the point at which they began. U.S. equities were initially buoyed by a generally upbeat outlook for global economic growth, while in the U.S., there were signs that an economic recovery was beginning to expand and gain momentum. However, as the months passed, a variety of exogenous developments dampened economic growth expectations, including political turmoil in the Middle East and North Africa, natural and nuclear disasters in Japan, sovereign debt crises in the Eurozone and the absence of a strategic resolution, inflationary pressures in many emerging markets, controversy surrounding the U.S. debt ceiling debate, an unprecedented downgrade of the U.S. government’s credit rating by Standard & Poor’s and increasing uncertainty about government policy. The totality of these developments weighed heavily on consumer and business confidence and put downward pressure on stock prices, particularly during the third quarter of the annual period. Better than expected corporate earnings reports served to boost stocks on occasion, but more often than not, the relief was temporary in nature. Following a sharp correction in the third quarter of 2011, the U.S. equity markets rebounded during the fourth quarter. While volatility remained elevated, the markets benefited from generally positive U.S. economic data and strong reported business results, which together provided some reassurance that a recession was not imminent as had been feared in the fall. Further, the cloud cover over Europe lifted to some extent during the last months of the annual period. It appeared that steps were being taken in unified fashion toward addressing the magnitude of the crisis more forcefully and with a more strategic mindset toward undertaking structural reforms rather than the more piecemeal, hesitant and ad hoc approach characterizing earlier policy responses. In particular, the European Central Bank’s large new lending program introduced in December was viewed positively by investors, helping to support an end-of-year rally in the U.S. equity markets. For the annual period as a whole, more traditionally defensive sectors within the Russell 1000® Index — such as utilities, consumer staples and health care — led returns. Economically-sensitive, cyclical sectors, including financials, materials and industrials, lagged. From a capitalization perspective, large-cap companies, as measured by the Russell 1000® Index, performed best, generating positive returns, while small-cap companies, as measured by the Russell 2000® Index2, and mid-cap companies, as measured by the Russell Midcap® Index2, followed at some distance, generating negative returns during the annual period. Growth stocks outpaced value stocks in the large-cap and small-cap segments of the U.S. equity market; value stocks edged out growth stocks in the mid-cap segment of the U.S. equity market. Maintaining a long-term perspective is a basic tenet of effective investing for both managers and investors at all times. We continue to believe that equity investments are an important component of a long-term diversified investment plan. As you know, the Fund employs a multi-managed, focused approach, bringing together two well-known equity managers, Marsico Capital Management LLC (“Marsico”) and BlackRock Investment Management (“BlackRock”), who each contribute stock picks to the Fund’s portfolio. Marsico emphasizes large-cap growth investing, while BlackRock employs a large-cap value investment style. The Fund managers’ combined stock picks, blending large growth and large value, are 1


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    Shareholder’s Letter — (unaudited) — (continued) designed to offer the potential for growth of capital over the long term. It is important to remember that over time and by design, blending the different investment styles of these two proven managers is intended to help the Fund meet its investment objective. On July 27, 2011, the Fund announced that its Board of Directors had formally approved a proposal to reorganize the Fund into a new open-end fund, subject to approval by shareholders (the “Reorganization”). Shareholders subsequently approved the Reorganization at a special meeting held on December 19, 2011, and the closing of the Reorganization occurred on January 23, 2012. Upon the closing of the Reorganization, the Fund was reorganized into the SunAmerica Focused Alpha Large-Cap Fund, a newly established series of SunAmerica Specialty Series, with Marsico and BlackRock continuing to serve as subadvisors. Please see the Notes to Financial Statements pages of this report for additional information regarding the Reorganization. On the following pages, you will find a brief discussion from each of the Fund’s managers regarding the Fund’s annual results. You will also find the financial statements and portfolio information for the Fund for its annual period ended December 31, 2011. As the Fund moves ahead within an open-end fund structure, we value your ongoing confidence in us and look forward to serving your investment needs in the future. Sincerely, Peter A. Harbeck President & CEO SunAmerica Asset Management Corp. Past performance is no guarantee of future results. 1The Russell 1000 Index offers investors access to the extensive large-cap segment of the U.S. equity universe representing approximately 92% of the U.S. market. The Russell 1000 is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to ensure new and growing equities are reflected. The Russell 1000 includes the largest 1,000 securities in the Russell 3000. 2The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 31% of the total market capitalization of the Russell 1000 Index. Indices are not managed and an investor cannot invest directly into an index. 2


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    Below, Tom Marsico, portfolio manager at Marsico Capital Management, LLC, discusses Marsico’s portion of the Fund’s performance during the reporting period. Marsico manages the large-cap growth portion of the Fund’s portfolio. Our portion of the Fund (Net) underperformed the Russell 1000® Index, the Fund’s benchmark index, during the annual period. Stock selection detracted most from our portion of the Fund’s relative results. Stock selection in the consumer staples sector hurt most, as Green Mountain Coffee Roasters, a purveyor of specialty coffee and coffee makers, emerged as the greatest individual detractor from results during the annual period. Energy sector stock selection was another source of underperformance, as a position in oilfield services company Halliburton hindered returns. In the industrials sector, a position in diesel engine manufacturer Cummins proved to be a major detractor during the annual period. On the positive side, stock selection in the consumer discretionary sector was a significant contributor to our portion of the Fund’s results. Positions in specialty coffee retailer Starbucks, travel services company priceline.com, athletic footwear and apparel retailer Nike, athletic clothing retailer Lululemon Athletica, and hotel/casino operator Wynn Resorts were among the top individual contributors to performance. Select holdings in the information technology sector also performed well. Computers and personal electronic device manufacturing giant Apple and Chinese Internet search company Baidu were sources of outperformance during the annual period. Although sector allocation is not a consideration in our portfolio construction but rather a residual of our stock selection process, our portion of the Fund did get penalized by its underweighted positions in the strongly performing health care, consumer staples and utilities sectors. These detractors were only partially offset by the positive contributions made by having an underweighted exposure to the weakly performing financials sector and an overweighted allocation to the stronger consumer discretionary sector. Below, Bob Doll, portfolio manager at BlackRock Investment Management, discusses BlackRock’s portion of the Fund’s performance during the reporting period. BlackRock manages the large-cap value portion of the Fund’s portfolio. Our portion of the Fund (Net) outperformed the Russell 1000® Index, the Fund’s benchmark, during the annual period. An overweighted allocation to the strongly performing health care sector and an underweighted exposure to the weaker financials sector drove the majority of outperformance attributable to sector selection in our portion of the Fund during the annual period. Within health care, we maintained an emphasis on firms that provided cost containment services. A combination of benign utilization trends and controlled pricing generally resulted in stellar earnings reports in this sector. Within financials, the underweight exposure was beneficial because the ongoing European sovereign debt crisis coupled with a still-evolving regulatory paradigm created a difficult backdrop for the sector. Individual stock selection overall was also a positive contributor to our portion of the Fund’s performance for the year. In particular, positions held in Aetna, UnitedHealth Group and Marathon Oil boosted returns. In the cases of Aetna and UnitedHealth Group, anemic health care cost utilization coupled with disciplined product pricing helped both health maintenance organizations’ performance. Oil and gas company Marathon Oil benefited both from the spin-off of its wholly- owned subsidiary Marathon Petroleum and from a strong year in its other key business units. 3


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    Detractors included positions in Sprint Nextel and Alcoa, both of which we exited in our portion of the Fund (Net) by year end. Wireless and wireline communications services company Sprint Nextel experienced a surprising uptick in its competitive environment and its customer churn rates. (Churn is the number of customers who switch to a competitor.) Shares of aluminum producer Alcoa declined during the year as the company’s input costs increased while the pricing for its main product, aluminum, fell from its highs. Securities listed may or may not be part of current portfolio construction. Because focused mutual funds are less diversified than typical mutual funds, the performance of each holding in a focused fund has a greater impact upon the overall portfolio, which increases risk. 4


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    SunAmerica Focused Alpha Large-Cap Fund, Inc. STATEMENT OF ASSETS AND LIABILITIES — December 31, 2011 ASSETS: Investments at value (unaffiliated)* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,058,344 Receivable for: Dividends and interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251,995 Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,865 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,313,204 LIABILITIES: Payable for: Investment advisory and management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,813 Administration fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,194 Directors’ fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,992 Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151,903 Due to custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,404 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294,306 Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,018,898 NET ASSETS REPRESENTED BY: Common stock, $0.001 par value (200,000,000 shares authorized) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,241 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,985,938 113,993,179 Accumulated undistributed net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — Accumulated undistributed net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,661,184) Unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,686,903 Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,018,898 NET ASSET VALUES: Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,018,898 Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,241,427 Net asset value per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16.57 * Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments (unaffiliated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $107,371,441 See Notes to Financial Statements 5


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    SunAmerica Focused Alpha Large-Cap Fund, Inc. STATEMENT OF OPERATIONS — For the year ended December 31, 2011 INVESTMENT INCOME: Dividends (unaffiliated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,969,786 Interest (unaffiliated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593 Total investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,970,379 EXPENSES: Investment advisory and management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,347,260 Administration fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,890 Transfer agent fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,338 Custodian and accounting fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,548 Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,866 Audit and tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,415 Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342,151 Directors’ fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,806 Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,136 Total expenses before custody credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,077,410 Custody credits earned on cash balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,077,390 Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (107,011) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on investments (unaffiliated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,356,317 Change in unrealized appreciation (depreciation) on investments (unaffiliated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,261,840) Net realized and unrealized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,905,523) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (2,012,534) See Notes to Financial Statements 6


  • Page 13

    SunAmerica Focused Alpha Large-Cap Fund, Inc. STATEMENT OF CHANGES IN NET ASSETS For the For the year ended year ended December 31, 2011 December 31, 2010 INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (107,011) $ 600,487 Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,356,317 17,745,533 Net unrealized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,261,840) 8,089,538 Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,012,534) 26,435,558 Distributions to shareholders from: Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (234,777) (600,487) Net realized gain on investments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,051,464) (1,209,870) Total distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,286,241) (1,810,357) Capital share transactions: Cost of 0 and 2,413,809 shares purchased through a tender offer (Note 7)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (40,335,630) Total increase (decrease) in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,298,775) (15,710,429) NET ASSETS: Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,317,673 143,028,102 End of period† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,018,898 $127,317,673 † Includes accumulated undistributed net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — (1) The total distributions for the calendar year ended December 31, 2010 exceeded investment company taxable income and net capital gains and resulted in an excess distributed amount to be treated as ordinary dividend income to the extent of the Fund’s current and accumulated earnings and profits (see Note 2). (2) Includes expenses associated with the in-kind tender offer during the year ended December 31, 2010. See Notes to Financial Statements 7


  • Page 14

    SunAmerica Focused Alpha Large-Cap Fund, Inc. FINANCIAL HIGHLIGHTS For the year For the year For the year For the year For the year ended ended ended ended ended December 31, 2011 December 31, 2010 December 31, 2009 December 31, 2008 December 31, 2007 Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . $ 17.58 $ 14.81 $ 12.39 $ 21.16 $ 20.21 Investment Operations: Net investment income (loss) @ . . . . . . . . . . . . . . . . . . . . . . (0.01) 0.06 0.05 0.06 0.02 Net realized and unrealized gain (loss) on investments . . . . . (0.27) 2.83 2.72 (7.58) 3.39 Total from investment operations . . . . . . . . . . . . . . . . . . . (0.28) 2.89 2.77 (7.52) 3.41 Distributions From: Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.03) (0.07) (0.05) (0.06) (0.02) Net realized gains on investments . . . . . . . . . . . . . . . . . . . . . (0.70) (0.13)(4) — — (1.38) Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.30) (1.19) (1.06) Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.73) (0.20) (0.35) (1.25) (2.46) Capital Share Transactions: NAV accretion resulting from shares tendered . . . . . . . . . . . — 0.08(5) — — — Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . . $ 16.57 $ 17.58 $ 14.81 $ 12.39 $ 21.16 Net Asset Value Total Return #(1) . . . . . . . . . . . . . . . . . . . . (1.50)% 20.25% 23.15% (36.95)% 17.40% Market Value, End of Period . . . . . . . . . . . . . . . . . . . . . . . . $ 16.22 $ 15.74 $ 13.67 $ 10.33 $ 18.84 Market Value Total Return #(2) . . . . . . . . . . . . . . . . . . . . . . 7.55% 16.76% 36.97% (40.12)% 16.15% Ratios/Supplemental Data Net Assets, end of period ($000’s) . . . . . . . . . . . . . . . . . . . . $120,019 $127,318 $143,028 $119,598 $204,301 Ratio of expenses to average net assets . . . . . . . . . . . . . . . . 1.56% 1.42%(3) 1.34% 1.26%(3) 1.21%(3) Ratio of net investment income (loss) to average net assets . . . (0.08)% 0.42%(3) 0.41% 0.33%(3) 0.11%(3) Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115% 130% 135% 120% 57% @ Calculated based upon average shares outstanding # Total return is not annualized. (1) Based on the net asset value per share. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at NAV on the ex-dividend date. (2) Based on market value per share. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. (3) Excludes expense reductions. If expense reductions had been applied, the ratio of expenses and net investment income to average net assets would have remained the same. (4) The total distributions for the calendar year exceeded investment company taxable income and net capital gains and resulted in an excess distributed amount to be treated as ordinary dividend income to the extent of the Fund’s current and accumulated earnings and profits (see Note 2). (5) See Note 7. See Notes to Financial Statements 8


  • Page 15

    SunAmerica Focused Alpha Large-Cap Fund, Inc. PORTFOLIO PROFILE — December 31, 2011 — (unaudited) Industry Allocation* Medical-HMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2% Retail-Restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Athletic Footwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Oil Companies-Integrated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0 Casino Hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 Food-Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 Cable/Satellite TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 Retail-Building Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 Engines-Internal Combustion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 Finance-Credit Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 Wireless Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 E-Commerce/Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 Oil Refining & Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Web Portals/ISP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Medical-Wholesale Drug Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Oil-Field Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Retail-Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9 Aerospace/Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 Time Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 100.0% * Calculated as a percentage of net assets 9


  • Page 16

    SunAmerica Focused Alpha Large-Cap Fund, Inc. PORTFOLIO OF INVESTMENTS — December 31, 2011 Shares/ Value Principal Value Security Description Shares (Note 2) Security Description Amount (Note 2) COMMON STOCK — 98.9% Oil Refining & Marketing — 4.5% Aerospace/Defense — 2.9% Valero Energy Corp. . . . . . . . . . . . . . . . . 255,000 $ 5,367,750 General Dynamics Corp. . . . . . . . . . . . . . . 53,000 $ 3,519,730 Oil-Field Services — 4.3% Athletic Footwear — 6.2% Halliburton Co. . . . . . . . . . . . . . . . . . . . . 148,235 5,115,590 NIKE, Inc., Class B . . . . . . . . . . . . . . . . . . 76,599 7,381,846 Retail-Building Products — 4.8% Cable/Satellite TV — 4.9% Home Depot, Inc. . . . . . . . . . . . . . . . . . . 138,319 5,814,931 DISH Network Corp., Class A . . . . . . . . . . 206,000 5,866,880 Retail-Discount — 3.9% Casino Hotels — 4.9% Dollar General Corp.† . . . . . . . . . . . . . . 114,778 4,721,967 Wynn Resorts, Ltd. . . . . . . . . . . . . . . . . . . 53,737 5,937,401 Retail-Restaurants — 7.5% Computers — 7.3% Starbucks Corp. . . . . . . . . . . . . . . . . . . . 195,157 8,979,173 Apple, Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . 21,764 8,814,420 Web Portals/ISP — 4.5% E-Commerce/Services — 4.6% Baidu, Inc. ADR† . . . . . . . . . . . . . . . . . . 46,030 5,361,114 priceline.com, Inc.† . . . . . . . . . . . . . . . . . . 11,828 5,532,074 Wireless Equipment — 4.7% Engines-Internal Combustion — 4.8% Motorola Solutions, Inc. . . . . . . . . . . . . . 121,000 5,601,090 Cummins, Inc. . . . . . . . . . . . . . . . . . . . . . . 66,016 5,810,728 Total Long-Term Investment Securities Finance-Credit Card — 4.7% (cost $106,089,441) . . . . . . . . . . . . . . 118,776,344 Discover Financial Services . . . . . . . . . . . 235,000 5,640,000 SHORT-TERM INVESTMENT SECURITIES — 1.1% Food-Retail — 4.9% Time Deposit — 1.1% Kroger Co. . . . . . . . . . . . . . . . . . . . . . . . . . 245,000 5,933,900 Euro Time Deposit with State Street Bank and Trust Co. Medical-HMO — 10.2% 0.01% due 01/03/12 Aetna, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 146,000 6,159,740 (cost $1,282,000) . . . . . . . . . . . . . . . . $1,282,000 1,282,000 UnitedHealth Group, Inc. . . . . . . . . . . . . . . 119,000 6,030,920 TOTAL INVESTMENTS 12,190,660 (cost $107,371,441)(1) . . . . . . . . . . . . . . 100.0% 120,058,344 Medical-Wholesale Drug Distribution — 4.3% Liabilities in excess of other assets . . . . . 0.0 (39,446) Cardinal Health, Inc. . . . . . . . . . . . . . . . . . 127,000 5,157,470 NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . 100.0% $120,018,898 Oil Companies-Integrated — 5.0% Marathon Oil Corp. . . . . . . . . . . . . . . . . . . 206,000 6,029,620 † Non-income producing security (1) See Note 6 for cost of investments on a tax basis. ADR — American Depository Receipt The following is a summary of the inputs used to value the Fund’s net assets as of December 31, 2011 (see Note 2): Level 1 — Level 2 — Level 3 — Unadjusted Other Significant Quoted Observable Unobservable Prices Inputs Inputs Total Long-Term Investment Securities: Common Stock: Athletic Footwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,381,846 $ — $— $ 7,381,846 Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,814,420 — — 8,814,420 Medical-HMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,190,660 — — 12,190,660 Oil Companies-Integrated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,029,620 — — 6,029,620 Retail-Restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,979,173 — — 8,979,173 Other Industries* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,380,625 — — 75,380,625 Short-Term Investment Securities: Time Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,282,000 — 1,282,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $118,776,344 $1,282,000 $— $120,058,344 * Sum of all other industries each of which individually has an aggregate market value of less than 5% of net assets. For a detailed presentation of common stocks by industry classification, please refer to the Portfolio of Investments. See Notes to Financial Statements 10


  • Page 17

    SunAmerica Focused Alpha Large-Cap Fund, Inc. NOTES TO FINANCIAL STATEMENTS — December 31, 2011 Note 1. Organization of the Fund SunAmerica Focused Alpha Large-Cap Fund, Inc. (the “Fund”) is a non-diversified closed-end management investment company. The Fund’s shares are traded on the New York Stock Exchange (“NYSE”) under the ticker symbol FGI. The Fund was organized as a Maryland corporation on September 7, 2005 and is registered under the Investment Company Act of 1940, as amended, (the “1940 Act”). The Fund sold 5,236 of its common stock shares (“Shares”) on November 14, 2005 to SunAmerica Asset Management Corp. (the “Adviser” or “SunAmerica”). Investment operations commenced on December 28, 2005 upon settlement of the sale of 9,650,000 Shares in the amount of $184,315,000 (net of underwriting fees and expenses of $8,685,000). SunAmerica paid certain organizational expenses of the Fund and the offering costs of the Fund to the extent they exceeded $.04 per share of the Fund’s common stock. On December 19, 2011, shareholders of the Fund approved a proposal to reorganize the Fund into SunAmerica Focused Alpha Large-Cap Fund, a newly established open-end series of SunAmerica Specialty Series. The Fund’s investment objective is to provide growth of capital. The Fund seeks to pursue this objective by employing a concentrated stock picking strategy in which the Fund, through subadvisers selected by the Adviser, actively invests primarily in a small number of equity securities (i.e. common stocks) of large-capitalization companies and to a lesser extent in equity-related securities (i.e., preferred stocks, convertible securities, warrants and rights) of large- capitalization companies primarily in the U.S. markets. Under normal market conditions, the Fund will invest at least 80% of its net assets, plus any borrowing for investment purposes, in large-capitalization companies. Indemnifications: The Fund’s organizational documents provide current and former officers and directors with a limited indemnification against liabilities arising out of the performance of their duties to the Fund. In addition, pursuant to Indemnification Agreements between the Fund and each of the current directors who is not an “interested person,” as defined in Section 2(a)(19) of the 1940 Act, of the Fund (collectively, the “Disinterested Directors”), the Fund provides the Disinterested Directors with a limited indemnification against liabilities arising out of the performance of their duties to the Fund, whether such liabilities are asserted during or after their service as directors. In addition, in the normal course of business the Fund enters into contracts that contain the obligation to indemnify others. The Fund’s maximum exposure under these arrangements is unknown. Currently, however, the Fund expects the risk of loss to be remote. Note 2. Significant Accounting Policies The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates and those differences could be significant. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements: Security Valuation: Stocks are generally valued based upon closing sales prices reported on recognized securities exchanges on which the securities are principally traded. Stocks listed on the NASDAQ are valued using the NASDAQ Official Closing Price (“NOCP”). Generally, the NOCP will be the last sale price unless the reported trade for the stock is outside the range of the bid/ask price. In such cases, the NOCP will be normalized to the nearer of the bid or ask price. For listed securities having no sales reported and for unlisted securities, such securities will be valued based upon the last reported bid price. As of the close of regular trading on the NYSE, securities traded primarily on security exchanges outside the U.S. are valued at the last sale price on such exchanges on the day of valuation, or if there is no sale on the day of valuation, at the last-reported bid price. If a security’s price is available from more than one exchange, the Fund uses the exchange that is the primary market for the security. However, depending on the foreign market, closing prices may be up to 15 hours old when they are used to price the Fund’s shares, and the Fund may determine that certain closing prices do not reflect the fair value of the security. This determination will be based on review of a number of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance 11


  • Page 18

    SunAmerica Focused Alpha Large-Cap Fund, Inc. NOTES TO FINANCIAL STATEMENTS — December 31, 2011 — (continued) of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. If the Fund determines that closing prices do not reflect the fair value of the securities, the Fund will adjust the previous closing prices in accordance with pricing procedures approved by the Board of Directors (the “Board” or the “Directors”) to reflect what it believes to be the fair value of the securities as of the close of regular trading on the NYSE. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed but the Fund is open. For foreign equity securities and foreign equity futures contracts, the Fund uses an outside pricing service to provide it with closing market prices and information used for adjusting those prices. Short-term securities with 60 days or less to maturity are amortized to maturity based on their cost to the Fund if acquired within 60 days of maturity or, if already held by the Fund on the 60th day, are amortized to maturity based on the value determined on the 61st day. Securities for which market quotations are not readily available or if a development/significant event occurs that may significantly impact the value of the security, then these securities are valued, as determined pursuant to procedures adopted in good faith by the Board. There is no single standard for making fair value determinations, which may result in prices that vary from those of other funds. The various inputs that may be used to determine the value of the Fund’s investments are summarized into three broad levels listed below: Level 1 — Unadjusted quoted prices in active markets for identical securities Level 2 — Other significant observable inputs (includes quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the Board of Trustees, etc.) Level 3 — Significant unobservable inputs (includes inputs that reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the security, developed based on the best information available under the circumstances). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the inputs used to value the Fund’s net assets as of December 31, 2011 are reported on a schedule following the Portfolio of Investments. Repurchase Agreements: For repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in repurchase agreements. The underlying collateral is valued daily on a mark to market basis, plus accrued interest, to ensure that the value, at the time the agreement is entered into, is equal to at least 102% of the repurchase price, including accrued interest. In the event of default of the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. At December 31, 2011, the Fund did not invest in any repurchase agreements. Securities Transactions, Investment Income, Expenses, Dividends and Distributions to Shareholders: Security transactions are recorded on a trade date basis. Realized gains and losses on sales of investments are calculated on the identified cost basis. Interest income is accrued daily from settlement date, except when collection is not expected. Dividend income is recorded on the ex-dividend date. Foreign income and capital gains may be subject to foreign withholding taxes and capital gains taxes at various rates. Under applicable foreign law, a withholding of tax may be imposed on interest, dividends, and capital gains at various rates. Interest earned on cash balances held at the custodian are shown as custody credits on the Statement of Operations. 12


  • Page 19

    SunAmerica Focused Alpha Large-Cap Fund, Inc. NOTES TO FINANCIAL STATEMENTS — December 31, 2011 — (continued) The Fund has adopted a distribution policy (the “Distribution Policy”) under which the Fund will pay level quarterly dividend distributions, subject to an adjusting dividend distribution in the fourth quarter as described below. The Distribution Policy and the dividend distribution rate may be terminated or modified at any time. The Fund intends to pay a level quarterly amount in each of the first three quarters of the calendar year and increase, if necessary, the amount payable for the fourth quarter to an amount expected to satisfy the minimum distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). Each quarter the Board will review the amount of any potential dividend distribution and the income, capital gains and capital available. The Securities and Exchange Commission (the “SEC”) issued an order to the Fund and SunAmerica granting exemptive relief from section 19(b) of the 1940 Act and rule 19b-1 thereunder, to permit the Fund to make multiple long-term capital gains distributions per year under the Distribution Policy. A portion of the dividend distribution may be treated as ordinary income (derived from short-term capital gains) and qualifying dividend income for individuals. If the total distributions made in any calendar year exceed investment company taxable income and net capital gains, such excess distributed amounts would be treated as ordinary dividend income to the extent of the Fund’s current and accumulated earnings and profits. Distributions in excess of the earnings and profits would first be a tax-free return of capital to the extent of the adjusted tax basis in the shares. After such adjusted tax basis is reduced to zero, the distributions would constitute capital gains (assuming the shares are held as capital assets). A return of capital represents a return of a shareholder’s investment in the Fund and should not be confused with “yield,” “income” or “profit.” The final determination of the source of all dividend distributions in 2011 will be made after year-end. The payment of dividend distributions in accordance with the Distribution Policy may result in a decrease in the Fund’s net assets. A decrease in the Fund’s net assets may cause an increase in the Fund’s annual operating expenses and a decrease in the Fund’s market price per share to the extent the market price correlates closely to the Fund’s net asset value per share. The Distribution Policy may also negatively affect the Fund’s investment activities to the extent that the Fund is required to hold larger cash positions than it typically would hold or to the extent that the Fund must liquidate securities that it would not have sold, for the purpose of paying the dividend distribution. The Distribution Policy may, under certain circumstances, result in the amounts of taxable distributions to exceed the levels required to be distributed under the Code (i.e., to the extent the Fund has capital losses in any taxable year, such losses may be carried forward to reduce the amount of capital gains required to be distributed in future years; if distributions in a year exceed the amount minimally required to be distributed under the tax rules, such excess will be taxable as ordinary income to the extent loss carryforwards reduce the required amount of capital gains in that year). The Fund’s Board has the right to amend, suspend or terminate the Distribution Policy at any time. The amendment, suspension or termination of the Dividend Distribution Policy could have a negative effect on the Fund’s market price per share. Shareholders of shares of the Fund held in taxable accounts who receive a dividend distribution (including shareholders who reinvest in shares of the Fund pursuant to the Fund’s dividend reinvestment policy) must adjust the cost basis to the extent that a dividend distribution contains a nontaxable return of capital. Investors should consult their tax adviser regarding federal, state and local tax considerations that may be applicable in their particular circumstances. The Fund intends to comply with the requirements of the Code, applicable to regulated investment companies and distribute all of its taxable income, including any capital gains, to its shareholders. Therefore, no federal tax provisions are required. The Fund files U.S. federal and certain state income tax returns. With few exceptions, the Fund is no longer subject to U.S. federal and state examinations by tax authorities for tax years ending before 2008. New Accounting Pronouncement: In April 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-03, “Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 changes the assessment of effective controls for repurchase agreements including dollar roll transactions. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-03 and its impact on the financial statements. 13


  • Page 20

    SunAmerica Focused Alpha Large-Cap Fund, Inc. NOTES TO FINANCIAL STATEMENTS — December 31, 2011 — (continued) In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 requires common fair value measurement and disclosure requirements between U.S. GAAP and International Financial Reporting Standards. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements. Note 3. Investment Advisory and Management Agreement Pursuant to its Investment Advisory and Management Agreement (“Advisory Agreement”) with the Fund, SunAmerica manages the affairs of the Fund, and selects, supervises and compensates the subadvisers to manage the Fund’s assets. SunAmerica monitors the compliance of the subadvisers with the investment objective and related policies of the Fund, reviews the performance of the subadvisers, and reports periodically on such performance to the Directors. Pursuant to the Advisory Agreement, the Fund will pay SunAmerica a monthly fee at the annual rate of 1.00% of the average daily total assets of the Fund. SunAmerica has engaged Marsico Capital Management, LLC (“Marsico”), an independently owned investment management firm, and Blackrock Investment Management, LLC (“Blackrock”), a wholly-owned subsidiary of Blackrock Inc., as subadvisers to the Fund (the “Subadvisers”) to manage the investment and reinvestment of the Fund’s assets. Pursuant to the subadvisory agreements (“Subadvisory Agreements”) among SunAmerica, the Fund and Marsico and Blackrock, respectively, Marsico and Blackrock select the investments made by the Fund. Marsico manages the large-cap growth portion of the Fund and Blackrock manages the large-cap value portion of the Fund. Pursuant to the Subadvisory Agreements, SunAmerica and not the Fund, pays each of the subadvisers a fee at the annual rate of 0.40% of the Fund’s average daily total assets allocated to each subadviser. SunAmerica serves as administrator to the Fund. Under the Administrative Services Agreement, SunAmerica is responsible for performing or supervising the performance by others of administrative services in connection with the operations of the Fund, subject to the supervision of the Fund’s Board. SunAmerica will provide the Fund with administrative services, regulatory reporting, all necessary office space, equipment, personnel and facilities for handling the affairs of the Fund. SunAmerica’s administrative services include recordkeeping, supervising the activities of the Fund’s custodian and transfer agent, providing assistance in connection with the Directors’ and shareholders’ meetings and other administrative services necessary to conduct the Fund’s affairs. For its services as administrator, SunAmerica is paid a monthly fee at the annual rate of 0.04% of the Fund’s average daily total assets. On September 22, 2008, American International Group, Inc. (“AIG”), the ultimate parent of SunAmerica, entered into a revolving credit facility (“FRBNY Credit Facility”) with the Federal Reserve Bank of New York (“NY Fed”). In connection with the FRBNY Credit Facility, on March 4, 2009, AIG issued its Series C Perpetual, Convertible, Participating Preferred Stock (the “Series C Preferred Stock”) to the AIG Credit Facility Trust, a trust established for the sole benefit of the United States Treasury (the “Trust”). The Series C Preferred Stock was entitled to approximately 77.8% of the voting power of AIG’s outstanding stock. On January 14, 2011, AIG completed a series of previously announced integrated transactions (the “Recapitalization”) to recapitalize AIG. In the Recapitalization, AIG repaid the NY Fed approximately $21 billion in cash, representing all amounts owing under the FRBNY Credit Facility and the facility was terminated. Also as part of the Recapitalization, (i) the Series C Preferred Stock was exchanged for shares of AIG Common Stock, which was then transferred to the U.S. Department of the Treasury, and the Trust, which had previously held all shares of the Series C Preferred Stock, was terminated, and, (ii) AIG’s Series E Preferred Shares and Series F Preferred Shares were exchanged for shares of AIG Common Stock and a new Series G Preferred Shares (which functions as a $2 billion commitment to provide funding that AIG will have the discretion and option to use). As a result of the Recapitalization, the United States Treasury held a majority of outstanding shares of AIG Common Stock. 14


  • Page 21

    SunAmerica Focused Alpha Large-Cap Fund, Inc. NOTES TO FINANCIAL STATEMENTS — December 31, 2011 — (continued) Note 4. Purchase and Sales of Investment Securities The cost of purchases and proceeds from sales and maturities of long-term investments during the year ended December 31, 2011 were as follows: Purchases (excluding U.S. government securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $147,538,312 Sales and maturities (excluding U.S. government securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,257,689 Purchases of U.S. government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — Sales and maturities of U.S. government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — Note 5. Transactions with Affiliates For the year ended December 31, 2011, the Fund incurred no brokerage commissions with an affiliated broker. Note 6. Federal Income Taxes The following details the tax basis distributions as well as the components of distributable earnings. The tax basis components of distributable earnings may differ from the amounts reflected in the Statement of Assets and Liabilities due to temporary book/tax differences such as wash sales. For the year ended December 31, 2011 Distributable Earnings Tax Distributions Long-Term Gains/Capital Unrealized Ordinary and Other Appreciation Ordinary Long-Term Income Losses (Depreciation) Income Capital Gains $— $— $11,957,710 $234,777 $5,051,464 The Fund utilized $16,287,521 of capital loss carryforwards, which offset net taxable gains realized in the year ended December 31, 2011. Under the current law, capital losses realized after October 31 and late year ordinary losses may be deferred and treated as occuring on the first day of the following year. For the fiscal year ended December 31, 2011, the Fund elected to defer post October short term capital losses in the amount of $5,931,991. The amounts of aggregate unrealized gain (loss) and the cost of investment securities for federal tax purposes, including short-term securities were as follows: Cost (tax basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $108,100,634 Appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,780,455 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,822,745) Net unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,957,710 For the period ended December 31, 2011, reclassifications were made to increase accumulated net investment income by $341,788 with an offsetting deduction to paid-in capital of $(341,788). The reclassifications arising from book/tax differences were primarily due to reorganization costs. Note 7. Capital Share Transactions The authorized capital stock of the Fund is 200,000,000 shares of common stock, $0.001 par value. On September 13, 2010, the Fund announced its intention to conduct an in-kind tender offer to acquire up to 25% of the Fund’s outstanding shares at a price equal to 98.5% of the Fund’s net asset value (NAV) per share in exchange for a pro rata distribution of the Fund’s portfolio securities (subject to certain exceptions, including paying cash in lieu of fractional shares and paying cash in lieu of delivering any “odd lot” of portfolio securities (i.e., fewer than 15


  • Page 22

    SunAmerica Focused Alpha Large-Cap Fund, Inc. NOTES TO FINANCIAL STATEMENTS — December 31, 2011 — (continued) 100 shares) to a participating shareholder). The in-kind tender offer commenced on October 7, 2010 and expired at 5:00 p.m. Eastern time on November 18, 2010. In accordance with the terms of the in-kind tender offer, the Fund accepted 2,413,809 properly tendered shares, representing 25% of the Fund’s outstanding shares of common stock, at a price per share of $16.64, which is equal to 98.5% of the Fund’s net asset value per share as of the close of regular trading on the New York Stock Exchange on November 19, 2010. The total value of the assets of the Fund distributed in payment for such properly tendered shares accepted was $40,165,782. Because the number of shares tendered exceeded 25% of the Fund’s outstanding shares of common stock, the Fund purchased tendered shares on a pro rata basis. Accordingly, on a pro rata basis, approximately 33.3% of the shares properly tendered by each participating shareholder were accepted for payment. As a result of the in-kind tender offer, the Fund recorded net realized gains of $6,723,429 for financial statement purposes. As of December 31, 2011 there were 7,241,427 shares issued and outstanding. Note 8. Subsequent Event On December 19, 2011, shareholders of the Fund approved a proposal to reorganize the Fund into SunAmerica Focused Alpha Large-Cap Fund, a newly established open-end series of SunAmerica Specialty Series (the “Acquiring Fund”) (the “Reorganization”). The closing of the Reorganization occurred on January 23, 2012 (the “Closing Date”). As of the Closing Date, all of the Fund’s assets and liabilities were transferred to the Acquiring Fund in exchange for Class A shares of the Acquiring Fund, and shareholders of the Fund became Class A shareholders of the Acquiring Fund. The Class A shares received by a shareholder of the Fund in connection with the Reorganization had an aggregate net asset value equal to the aggregate net asset value of the Fund shares owned by the shareholder immediately prior to a Reorganization. 16


  • Page 23

    SunAmerica Focused Alpha Large-Cap Fund, Inc. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of SunAmerica Focused Alpha Large-Cap Fund, Inc.: In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of SunAmerica Focused Alpha Large-Cap Fund, Inc. (the “Fund’’) at December 31, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements’’) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2011 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for the opinion. As discussed in Note 8 to the financial statements, on January 23, 2012 the Fund was reorganized into SunAmerica Focused Alpha Large-Cap Fund, a newly established series of SunAmerica Specialty Series. PricewaterhouseCoopers LLP Houston, Texas February 28, 2012 17


  • Page 24

    SunAmerica Focused Alpha Large-Cap Fund, Inc. RESULTS OF ANNUAL AND SPECIAL SHAREHOLDER MEETINGS — December 31, 2011 — (unaudited) The Annual Meeting of the Shareholders of the Fund was held on May 19, 2011. At this meeting, Richard W. Grant, Stephen J. Gutman and Peter A. Harbeck were elected by shareholders to serve as the Class III Directors of the Fund for three-year terms, which expire at the annual meeting of shareholders to be held in 2014 and until their respective successors are duly elected and qualify. The voting results of the meeting to elect Messrs. Grant, Gutman and Harbeck to the Board were as follows: For Withheld Richard W. Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,764,354 2,311,016 Stephen J. Gutman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,762,778 2,312,592 Peter A. Harbeck . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,763,754 2,311,616 The terms of office of Dr. Judith L. Craven and William J. Shea (Class II, term expiring 2013), and William F. Devin (Class I, term expiring 2012) continued after the meeting. On December 19, 2011, a Special Meeting of Shareholders was held to consider a proposal to approve an Agreement and Plan of Reorganization providing for (i) the transfer all of the assets of the Fund to the SunAmerica Focused Alpha Large-Cap Fund (the “Acquiring Fund”), a series of SunAmerica Specialty Series, in exchange for the Acquiring Fund’s Class A shares, having an aggregate net asset value equal to the value of the Fund’s assets, (ii) the assumption by the Acquiring Fund of all of the Fund’s liabilities, (iii) the distribution of such Class A shares to the shareholders of the Fund in complete liquidation of the Fund, and (iv) the dissolution of the Fund under Maryland law. The proposal was approved and the voting results were as follows: Votes For Votes Against Abstain 5,254,287 16,519 146,577 18


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    SunAmerica Focused Alpha Large-Cap Fund, Inc. DIRECTORS AND OFFICERS INFORMATION — December 31, 2011 — (unaudited) The following table contains basic information regarding the Directors and Officers that oversee operations of the Fund and other investment companies within the Fund Complex(2). Number of Term of Funds in Name, Position Office and Fund Complex Address and Held With Length of Principal Occupations Overseen by Other Directorships Date of Birth* Fund Time Served(1) During Past 5 Years Director(2) Held by Director(3) Disinterested Directors Dr. Judith L. Craven Director Current term Retired. 83 Director, Belo Corporation Age: 66 expires in 2013; (1992 to present); Director, Director since 2005 Sysco Corporation (1996 to present); Director, Luby’s Inc. (1998 to present). William F. Devin Director Current term Retired. 83 Director, Boston Options Age: 73 expires in 2012; Exchange (2001 to 2010). Director since 2005 Richard W. Grant Director 2011- present Retired, Prior to that, Attorney 35 None Age: 66 Chairman and partner at Morgan Lewis & of the Bockius LLP (1989 to 2011). Board Stephen J. Gutman Director Current term Vice President and Associate 35 None Age: 68 expires in 2014; Broker, Corcoran Group (Real Director since 2005 Estate) (2002 to present); Managing Member, Beau Brummell — Soho LLC (Licensing of menswear specialty retailing) (1995 to 2009); President, SJG Marketing, Inc. (2009 to present). William J. Shea Director Current term Executive Chairman, Lucid, 35 Chairman of the Board, Royal Age: 64 expires in 2013; Inc., (Medical Technology and and Sun Alliance U.S.A. Inc. Director since 2005 Information) (2007 to present); (2004 to 2006); Director, Managing Director, DLB Boston Private Financial Capital, LLC (Private Equity) Holdings (2004 to present); (2006 to 2007). Chairman, Demoulas Supermarkets (1999 to present); Director, NASDAQ OMX BX, Inc. (2008 to present). Interested Director Peter A. Harbeck(4) Director Current term President, CEO and Director, 83 None Age: 58 expires in 2014; SunAmerica (1995 to present); Director since 2005 Director, SunAmerica Capital Services, Inc. (“SACS”) (1993 to present) Chairman, Advisor Group, Inc. (2004 to present). Officers John T. Genoy President 2007-present Chief Financial Officer, N/A N/A Age: 43 SunAmerica (2002 to present); Senior Vice President, SunAmerica (2003 to present); Chief Operating Officer, SunAmerica (2006 to present). 19


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    SunAmerica Focused Alpha Large-Cap Fund, Inc. DIRECTORS AND OFFICERS INFORMATION — December 31, 2011 — (unaudited) — (continued) Number of Term of Funds in Name, Office and Fund Complex Address and Position Held Length of Principal Occupations Overseen by Other Directorships Date of Birth* With Fund Time Served(1) During Past 5 Years Director(2) Held by Director(3) Donna M. Handel Treasurer 2005-present Senior Vice President, N/A N/A Age: 45 SunAmerica (2004 to present). Gregory N. Bressler Secretary and 2005-present Senior Vice President and N/A N/A Age: 45 Chief Legal General Counsel, SunAmerica Officer (2005 to present). James Nichols Vice President 2006-present Director, President and CEO, N/A N/A Age: 45 SACS (2006 to present); Senior Vice President, SACS (2002 to 2006); Senior Vice President, SunAmerica (2002 to present). Katherine Stoner Vice President 2011-present Vice President, SunAmerica N/A N/A Age: 55 and Chief (2011 to present). Vice Compliance President, The Variable Officer Annuity Life Insurance Company (“VALIC”) and Western National Life Insurance Company (“WNL”) (2006-present); Deputy General Counsel and Secretary, VALIC and WNL (2007-present); Vice President, VALIC Financial Advisors, Inc. and VALIC Retirement Services Company (2010- present). Nori L. Gabert Vice President 2005-present Vice President and Deputy N/A N/A Age: 58 and Assistant General Counsel, SunAmerica Secretary (2005 to present). Gregory R.Kingston Vice President 2005-present Vice President, SunAmerica N/A N/A Age: 46 and Assistant (2001 to present). Treasurer * The business address for each Director and Officer is the Harborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311-4992. (1) Directors serve three-year terms until their successors are duly elected and qualify. (2) The term “Fund Complex” means two or more registered investment companies that hold themselves out to investors as related companies for purposes of investment services or have a common investment adviser or an investment adviser that is an affiliated person of the Adviser. The “Fund Complex” includes the SunAmerica Money Market Funds (2 funds), SunAmerica Equity Funds (3 funds), SunAmerica Income Funds (4 funds), SunAmerica Series, Inc. (11 portfolios), Anchor Series Trust (8 portfolios), SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Series Trust (36 portfolios), VALIC Company I (33 portfolios), VALIC Company II (15 funds), Seasons Series Trust (21 portfolios) and SunAmerica Speciality Series (6 portfolios). (3) Directorships of companies required to report to the Securities and Exchange Commission under the Securities Ex- change Act of 1934 (i.e. “public companies”) or other investment companies registered under the 1940 Act. (4) Mr. Harbeck is an “interested person” of the Fund, as defined in the Investment Company Act of 1940, because he is an officer and director of SunAmerica. The Fund’s Statement of Additional Information includes additional information about the Directors and is available, without charge, upon request, by calling (800) 858-8850. 20


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    SunAmerica Focused Alpha Large-Cap Fund, Inc. SHAREHOLDER TAX INFORMATION — (unaudited) Certain tax information regarding the SunAmerica Focused Alpha Large-Cap Fund is required to be provided to shareholders based upon the Fund’s income and distributions for the taxable year ended December 31, 2011. The information necessary to complete your income tax returns is included with your Form 1099-DIV mailed to you in the beginning of 2012. During the year ended December 31, 2011 the Fund paid the following dividends per share: Ordinary Qualifying% for Total Amount Investment Short-Term Long-Term the 70% Dividends Payable Date Record Date Paid per Share Income Capital Gains * Capital Gains Received Deduction 3/30/2011 3/18/2011 $ 0.05000 $ 0.00222 $ 0.00000 $ 0.04778 100.00% 7/06/2011 6/27/2011 0.05000 0.00222 0.00000 0.04778 100.00% 9/26/2011 9/15/2011 0.05000 0.00222 0.00000 0.04778 100.00% 12/29/2011 12/19/2011 0.58000 0.02575 0.00000 0.55425 100.00% $ 0.73000 $ 0.03241 $ 0.00000 $ 0.69759 For the year ended December 31, 2011, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the dividends paid during the fiscal year, the maximum amount that may be considered qualified dividend income is $234,777. * Short-term capital gains are treated as ordinary income for tax purposes. 21


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    SunAmerica Focused Alpha Large-Cap Fund, Inc. ADDITIONAL INFORMATION — (unaudited) During the period, there were no material changes to the Fund’s investment objective or policies or to the Fund’s articles of incorporation or by-laws that were not approved by the shareholders or in the principal risk factors associated with investment in the Fund. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Fund’s assets. 22


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    Harborside Financial Center 3200 Plaza 5 Jersey City, NJ 07311-4992 Directors Richard W. Grant VOTING PROXIES ON FUND PORTFOLIO PROXY VOTING RECORD ON FUND PORTFOLIO Peter A. Harbeck SECURITIES SECURITIES Dr. Judith L. Craven A description of the policies and procedures Information regarding how the Fund voted William F. Devin that the Fund uses to determine how to vote proxies related to securities held in the Stephen J. Gutman proxies related to securities held in the Fund’s portfolio during the most recent William J. Shea Fund’s portfolio, which is available in the twelve month period ended June 30, is Fund’s Form N-CSR, may be obtained available, once filed with the U.S. Securities Officers without charge upon request, by calling and Exchange Commission without charge, John T. Genoy, President and Chief Executive (800) 858-8850. This information is also upon request, by calling (800) 858-8850 or Officer available from the EDGAR database on the on the U.S. Securities and Exchange Com- Donna M. Handel, Treasurer U.S. Securities and Exchange Commission’s mission’s website at http://www.sec.gov. James Nichols, Vice President website at http://www.sec.gov. Katherine Stoner, Chief Compliance Officer This report is submitted solely for the gen- Gregory N. Bressler, Chief Legal Officer and DISCLOSURE OF QUARTERLY PORTFOLIO eral information of shareholders of the Secretary HOLDINGS Fund. Gregory R. Kingston, Vice President and Assistant The Fund is required to file its complete Treasurer schedule of portfolio holdings with the U.S. Nori L. Gabert, Vice President and Assistant Securities and Exchange Commission for its Secretary first and third fiscal quarters on Form N-Q. Kathleen Fuentes, Assistant Secretary The Fund’s Forms N-Q are available on the John E. McLean, Assistant Secretary U.S. Securities and Exchange Commission’s John E. Smith Jr., Assistant Treasurer website at http://www.sec.gov. You can also review and obtain copies of Form N-Q at Investment Adviser the U.S. Securities and Exchange Commis- SunAmerica Asset Management Corp. sion’s Public Reference Room in Wash- Harborside Financial Center ington, DC (information on the operation 3200 Plaza 5 of the Public Reference Room may be ob- Jersey City, NJ 07311-4992 tained by calling 1-800-SEC-0330). Custodian State Street Bank and Trust Company P.O. Box 5607 Boston, MA 02110 Transfer Agent Computershare Trust Company, N.A. P.O. Box 43078 Providence, RI 02940-3078 23


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    This fund report must be preceded or accompanied by the prospectus for SunAmerica Focused Alpha Large-Cap Fund (“Focused Alpha Large-Cap Fund”), a series of SunAmerica Specialty Series. Investors should carefully consider the Focused Alpha Large-Cap Fund’s investment objectives, risks, charges and expenses before investing. The prospectus, containing this and other important information, can be obtained from your financial adviser, the SunAmerica Sales Desk at 800-858-8850, or at www.sunamericafunds.com. Read the prospectus carefully before investing. SunAmerica open-end funds distributed by: SunAmerica Capital Services Inc. Harborside Financial Center 3200 Plaza 5, Jersey City, NJ 07311 800-858-8850, ext. 6003 FIANN-12/11


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