[logo]PHOENIX
Group Strategic Edge(R)
The Big Edge Plus(R)
Annual Reports for:
Phoenix Home Life Variable
Accumulation Account
December 31, 1997
<PAGE>
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
<TABLE>
<S> <C>
Money Market Sub-Account
Statement of Assets and Liabilities ......... 2
Statement of Operations ..................... 5
Statement of Changes in Net Assets .......... 8
Growth Sub-Account
Statement of Assets and Liabilities ......... 2
Statement of Operations ..................... 5
Statement of Changes in Net Assets .......... 8
Multi-Sector Fixed Income Sub-Account
Statement of Assets and Liabilities ......... 2
Statement of Operations ..................... 5
Statement of Changes in Net Assets .......... 8
Strategic Allocation Sub-Account
Statement of Assets and Liabilities ......... 2
Statement of Operations ..................... 5
Statement of Changes in Net Assets .......... 8
International Sub-Account
Statement of Assets and Liabilities ......... 2
Statement of Operations ..................... 5
Statement of Changes in Net Assets .......... 8
Balanced Sub-Account
Statement of Assets and Liabilities ......... 2
Statement of Operations ..................... 5
Statement of Changes in Net Assets .......... 8
Real Estate Sub-Account
Statement of Assets and Liabilities ......... 3
Statement of Operations ..................... 6
Statement of Changes in Net Assets .......... 9
Strategic Theme Sub-Account
Statement of Assets and Liabilities ......... 3
Statement of Operations ..................... 6
Statement of Changes in Net Assets .......... 9
Aberdeen New Asia Sub-Account
Statement of Assets and Liabilities ......... 3
Statement of Operations ..................... 6
Statement of Changes in Net Assets .......... 9
Enhanced Index Sub-Account
Statement of Assets and Liabilities ......... 3
Statement of Operations ..................... 6
Statement of Changes in Net Assets .......... 9
Wanger International Small Cap Sub-Account
Statement of Assets and Liabilities ......... 3
Statement of Operations ..................... 6
Statement of Changes in Net Assets .......... 9
Wanger U.S. Small Cap Sub-Account
Statement of Assets and Liabilities ......... 3
Statement of Operations ..................... 6
Statement of Changes in Net Assets .......... 9
Templeton Stock Sub-Account
Statement of Assets and Liabilities ......... 4
Statement of Operations ..................... 7
Statement of Changes in Net Assets .......... 10
Templeton Asset Allocation Sub-Account
Statement of Assets and Liabilities ......... 4
Statement of Operations ..................... 7
Statement of Changes in Net Assets .......... 10
Templeton International Sub-Account
Statement of Assets and Liabilities ......... 4
Statement of Operations ..................... 7
Statement of Changes in Net Assets .......... 10
Templeton Developing Markets Sub-Account
Statement of Assets and Liabilities ......... 4
Statement of Operations ..................... 7
Statement of Changes in Net Assets .......... 10
Notes to Financial Statements ................ 13
</TABLE>
<PAGE>
This annual report for the Phoenix
Home Life Variable Accumulation Account
for the period ended December 31, 1997
contains the financial statements for the
Account's various annuity contracts.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
Money Market Growth
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- ------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost ....................... $ 5,019,054 $ 69,089,150 $ 46,200,099 $ 922,712,674
=========== ============ ============ =============
Investment in The Phoenix Edge Series
Fund, at market .......................... $ 5,019,054 $ 69,089,150 $ 69,409,173 $1,046,080,148
----------- ------------ ------------ --------------
Total assets ............................. 5,019,054 69,089,150 69,409,173 1,046,080,148
Liabilities
Accrued expenses to related party ......... 5,137 73,589 58,212 1,092,201
----------- ------------ ------------ --------------
Net assets ................................. $ 5,013,917 $ 69,015,561 $ 69,350,961 $1,044,987,947
=========== ============ ============ ==============
Accumulation units outstanding ............. 2,264,187 32,025,359 6,272,827 97,099,306
=========== ============ ============ ==============
Unit value ................................. $ 2.214444 $ 2.155028 $ 11.055774 $ 10.762048
=========== ============ ============ ==============
Multi-SectorFixed Income Strategic Allocation
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- ---------------------------------
Assets
Investments at cost ....................... $14,342,415 $114,371,746 $ 46,915,081 $ 267,348,851
============= ============= ============== ==============
Investment in The Phoenix Edge Series
Fund, at market .......................... $14,745,786 $119,195,587 $ 60,845,819 $ 285,075,188
------------- ------------- -------------- --------------
Total assets ............................. 14,745,786 119,195,587 60,845,819 285,075,188
Liabilities
Accrued expenses to related party ......... 11,734 124,834 51,065 298,486
------------- ------------- -------------- --------------
Net assets ................................. $14,734,052 $119,070,753 $ 60,794,754 $ 284,776,702
============= ============= ============== ==============
Accumulation units outstanding ............. 3,556,360 29,600,788 13,378,256 64,407,000
============= ============= ============== ==============
Unit value ................................. $ 4.143015 $ 4.022553 $ 4.544296 $ 4.421518
============= ============= ============== ==============
International Balanced
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- ---------------------------------
Assets
Investments at cost ....................... $ 3,970,237 $109,669,852 $ 4,377,240 $ 174,140,856
============= ============= ============== ==============
Investment in The Phoenix Edge Series
Fund, at market .......................... $ 5,378,870 $135,081,388 $ 5,068,215 $ 191,831,547
------------- ------------- -------------- --------------
Total assets ............................. 5,378,870 135,081,388 5,068,215 191,831,547
Liabilities
Accrued expenses to related party ......... 4,471 141,297 4,240 200,256
------------- ------------- -------------- --------------
Net assets ................................. $ 5,374,399 $134,940,091 $ 5,063,975 $ 191,631,291
============= ============= ============== ==============
Accumulation units outstanding ............. 2,998,111 76,703,517 2,885,290 110,735,265
============= ============= ============== ==============
Unit value ................................. $ 1.792595 $ 1.759243 $ 1.755101 $ 1.730535
============= ============= ============== ==============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
(Continued)
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost ....................... $ 625,379 $29,051,498 $ 893,344 $ 28,221,496
========== =========== ========== ============
Investment in The Phoenix Edge Series
Fund, at market .......................... $ 746,479 $36,762,905 $ 929,744 $ 29,100,874
---------- ----------- ---------- ------------
Total assets ............................. 746,479 36,762,905 929,744 29,100,874
Liabilities
Accrued expenses to related party ......... 600 37,733 770 30,178
---------- ----------- ---------- ------------
Net assets ................................. $ 745,879 $36,725,172 $ 928,974 $ 29,070,696
========== =========== ========== ============
Accumulation units outstanding ............. 405,294 19,835,085 737,262 23,027,487
========== =========== ========== ============
Unit value ................................. $ 1.840367 $ 1.851492 $ 1.259897 $ 1.262435
========== =========== ========== ============
Aberdeen New Asia Enhanced Index
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- -------------------------------
Assets
Investments at cost ....................... $ 228,255 $ 9,704,820 $ 603,498 $ 23,165,343
============ ============ ============ =============
Investment in The Phoenix Edge Series
Fund, at market .......................... $ 149,453 $ 6,364,247 $ 611,880 $ 24,074,599
------------ ------------ ------------ -------------
Total assets ............................. 149,453 6,364,247 611,880 24,074,599
Liabilities
Accrued expenses to related party ......... 127 6,867 336 24,603
------------ ------------ ------------ -------------
Net assets ................................. $ 149,326 $ 6,357,380 $ 611,544 $ 24,049,996
============ ============ ============ =============
Accumulation units outstanding ............. 223,679 9,542,274 599,607 22,855,738
============ ============ ============ =============
Unit value ................................. $ 0.667590 $ 0.666233 $ 1.019907 $ 1.052252
============ ============ ============ =============
Wanger International Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- -------------------------------
Assets
Investments at cost ....................... $2,402,583 $75,116,607 $5,028,680 $125,166,310
============ ============ ============ =============
Investment in Wanger Advisors Trust,
at market ................................ $2,578,445 $80,217,055 $7,212,993 $177,908,157
------------ ------------ ------------ -------------
Total assets ............................. 2,578,445 80,217,055 7,212,993 177,908,157
Liabilities
Accrued expenses to related party ......... 2,240 86,347 6,043 184,487
------------ ------------ ------------ -------------
Net assets ................................. $2,576,205 $80,130,708 $7,206,950 $177,723,670
============ ============ ============ =============
Accumulation units outstanding ............. 1,629,764 47,317,907 3,346,527 83,069,554
============ ============ ============ =============
Unit value ................................. $ 1.580723 $ 1.693453 $ 2.153561 $ 2.139447
============ ============ ============ =============
</TABLE>
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
(Continued)
<TABLE>
<CAPTION>
Templeton Stock Templeton Asset Allocation
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost ....................... $ 120,043 $8,629,013 $ 158,655 $4,623,697
========== ========== ========== ==========
Investment in Templeton Variable Products
Series Fund, at market ................... $ 123,570 $8,337,118 $ 156,857 $4,582,681
---------- ---------- ---------- ----------
Total assets ............................. 123,570 8,337,118 156,857 4,582,681
Liabilities
Accrued expenses to related party ......... 102 8,408 98 4,709
---------- ---------- ---------- ----------
Net assets ................................. $ 123,468 $8,328,710 $ 156,759 $4,577,972
========== ========== ========== ==========
Accumulation units outstanding ............. 116,076 7,840,677 151,781 4,253,720
========== ========== ========== ==========
Unit value ................................. $ 1.063678 $ 1.062244 $ 1.032795 $ 1.076228
========== ========== ========== ==========
Templeton International Templeton Developing Markets
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- -------------------------------
Assets
Investments at cost ....................... $ 140,017 $7,497,310 $ 755,305 $4,087,410
============ =========== ============ ===========
Investment in Templeton Variable Products
Series Fund, at market ................... $ 140,066 $7,439,740 $ 486,099 $2,779,881
------------ ----------- ------------ -----------
Total assets ............................. 140,066 7,439,740 486,099 2,779,881
Liabilities
Accrued expenses to related party ......... 114 7,405 416 2,913
------------ ----------- ------------ -----------
Net assets ................................. $ 139,952 $7,432,335 $ 485,683 $2,776,968
============ =========== ============ ===========
Accumulation units outstanding ............. 143,697 6,907,592 718,420 4,166,711
============ =========== ============ ===========
Unit value ................................. $ 0.973941 $ 1.075966 $ 0.676043 $ 0.666465
============ =========== ============ ===========
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF OPERATIONS
For the period ended December 31, 1997
<TABLE>
<CAPTION>
Money Market Growth
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions .................................... $ 395,682 $ 3,795,830 $ 431,569 $ 6,229,740
Expenses
Mortality and expense risk charges ............... 78,109 938,941 682,753 12,345,910
---------- ----------- ----------- ------------
Net investment income (loss) ...................... 317,573 2,856,889 (251,184) (6,116,170)
---------- ----------- ----------- ------------
Net realized gain (loss) from share
transactions ..................................... -- (2) 651,146 2,194,161
Net realized gain distribution from Fund .......... -- -- 11,155,021 165,787,147
Net unrealized appreciation on investment ......... -- -- 798,285 13,193,068
---------- ------------ ----------- ------------
Net gain (loss) on investments .................... -- (2) 12,604,452 181,174,376
---------- ------------- ----------- ------------
Net increase in net assets resulting from
operations ....................................... $ 317,573 $ 2,856,887 $12,353,268 $175,058,206
========== ============ =========== ============
Multi-Sector Fixed Income Strategic Allocation
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- -------------------------------
Investment income
Distributions .................................... $ 954,567 $ 7,814,656 $ 1,316,557 $ 5,985,412
Expenses
Mortality and expense risk charges ............... 128,992 1,335,980 604,869 3,423,214
------------ --------------- ------------- -------------
Net investment income ............................. 825,575 6,478,676 711,688 2,562,198
------------ --------------- ------------- -------------
Net realized gain (loss) from share
transactions ..................................... (114,675) 45,661 1,152,735 1,434,265
Net realized gain distribution from Fund .......... 358,955 2,981,441 7,558,808 35,271,441
Net unrealized appreciation on investment ......... 46,689 273,117 1,401,855 8,778,795
------------ --------------- ------------- -------------
Net gain on investments ........................... 290,969 3,300,219 10,113,398 45,484,501
------------ --------------- ------------- -------------
Net increase in net assets resulting from
operations ....................................... $1,116,544 $ 9,778,895 $10,825,086 $ 48,046,699
============ =============== ============= =============
International Balanced
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- ------------------------------
Investment income
Distributions .................................... $ 79,328 $ 1,942,160 $ 151,720 $ 5,607,215
Expenses
Mortality and expense risk charges ............... 56,646 1,727,387 50,202 2,302,805
------------ --------------- ------------- -------------
Net investment income ............................. 22,682 214,773 101,518 3,304,410
------------ --------------- ------------- -------------
Net realized gain from share transactions ......... 50,587 310,119 36,243 462,770
Net realized gain distribution from Fund .......... 527,355 13,181,550 572,569 21,416,090
Net unrealized appreciation (depreciation) on
investment ....................................... (36,802) 81,967 65,158 2,886,598
------------ --------------- ------------- -------------
Net gain on investments ........................... 541,140 13,573,636 673,970 24,765,458
------------ --------------- ------------- -------------
Net increase in net assets resulting from
operations ....................................... $ 563,822 $13,788,409 $ 775,488 $ 28,069,868
============ =============== ============= =============
</TABLE>
See Notes to Financial Statements
5
<PAGE>
STATEMENT OF OPERATIONS
For the period ended December 31, 1997
(Continued)
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions .................................... $ 20,482 $ 939,742 $ 3,428 $ 101,220
Expenses
Mortality and expense risk charges ............... 6,191 355,320 8,824 318,150
---------- ----------- ------------ ------------
Net investment income (loss) ...................... 14,291 584,422 (5,396) (216,930)
---------- ----------- ------------- ------------
Net realized gain (loss) from share
transactions ..................................... (6,669) (685) 11,994 334,455
Net realized gain distribution from Fund .......... 25,488 1,250,511 107,351 3,356,244
Net unrealized appreciation on investment ......... 75,320 3,671,800 15,658 123,526
---------- ----------- ------------- ------------
Net gain on investments ........................... 94,139 4,921,626 135,003 3,814,225
---------- ----------- ------------- ------------
Net increase in net assets resulting from
operations ....................................... $ 108,430 $ 5,506,048 $ 129,607 $ 3,597,295
========== =========== ============= ============
Aberdeen New Asia Enhanced Index
Sub-Account Sub-Account(1)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
Investment income
Distributions .................................... $ 6,905 $ 282,050 $ 2,478 $ 115,068
Expenses
Mortality and expense risk charges ............... 3,442 111,674 1,094 115,796
----------- ----------- -------------- ------------
Net investment income (loss) ...................... 3,463 170,376 1,384 (728)
----------- ----------- -------------- ------------
Net realized gain (loss) from share
transactions ..................................... (26,265) (114,892) 1,253 (14,528)
Net realized gain distribution from Fund .......... 209 5,129 2,333 108,299
Net unrealized appreciation (depreciation) on
investment ....................................... (77,025) (3,327,944) 8,382 909,255
----------- ----------- -------------- ------------
Net gain (loss) on investments .................... (103,081) (3,437,707) 11,968 1,003,026
----------- ----------- -------------- ------------
Net increase (decrease) in net assets resulting
from operations .................................. $ (99,618) $(3,267,331) $ 13,352 $ 1,002,298
=========== =========== ============== ============
Wanger International Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ -------------------------------
Investment income
Distributions .................................... $ 70,714 $ 1,809,722 $ 119,907 $ 2,573,295
Expenses
Mortality and expense risk charges ............... 29,899 1,054,042 65,016 1,748,958
----------- ----------- -------------- ------------
Net investment income ............................. 40,815 755,680 54,891 824,337
----------- ----------- -------------- ------------
Net realized gain (loss) from share
transactions ..................................... (9,521) (186,359) 233,219 (4,456)
Net unrealized appreciation (depreciation) on
investment ....................................... (101,297) (3,451,230) 1,370,089 33,929,801
----------- ----------- -------------- ------------
Net gain (loss) on investments .................... (110,818) (3,637,589) 1,603,308 33,925,345
----------- ----------- -------------- ------------
Net increase (decrease) in net assets resulting
from operations .................................. $ (70,003) $(2,881,909) $1,658,199 $34,749,682
=========== =========== ============== ============
</TABLE>
(1) From inception July 15, 1997 to December 31, 1997
See Notes to Financial Statements
6
<PAGE>
STATEMENT OF OPERATIONS
For the period ended December 31, 1997
(Continued)
<TABLE>
<CAPTION>
Templeton Stock Templeton Asset Allocation
Sub-Account(1) Sub-Account(2)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ----------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions .................................... $ -- $ -- $ -- $ --
Expenses
Mortality and expense risk charges ............... 2,266 38,328 388 23,633
---------- ------------- ------------ -------------
Net investment loss ............................... (2,266) (38,328) (388) (23,633)
----------- ------------- ------------- -------------
Net realized gain (loss) from share
transactions ..................................... (2,763) 1,765 251 (4,016)
Net unrealized appreciation (depreciation) on
investment ....................................... 3,527 (291,895) (1,799) (41,016)
----------- ------------- ------------- -------------
Net gain (loss) on investments .................... 764 (290,130) (1,548) (45,032)
----------- ------------- ------------- -------------
Net decrease in net assets resulting from
operations ....................................... $ (1,502) $(328,458) $ (1,936) $ (68,665)
=========== ============= ============= =============
TempletonInternational Templeton Developing Markets
Sub-Account(3) Sub-Account(4)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- -----------------------------------
Investment income
Distributions .................................... $ -- $ -- $ -- $ --
Expenses
Mortality and expense risk charges ............... 349 30,846 2,574 19,956
------------ ------------- --------------- -------------
Net investment loss ............................... (349) (30,846) (2,574) (19,956)
------------ ------------- --------------- -------------
Net realized loss from share transactions ......... (534) (30,517) (628) (31,490)
Net unrealized appreciation (depreciation) on
investment ....................................... 49 (57,570) (269,206) (1,307,529)
------------ ------------- --------------- -------------
Net loss on investments ........................... (485) (88,087) (269,834) (1,339,019)
------------ ------------- --------------- -------------
Net decrease in net assets resulting from
operations ....................................... $ (834) $(118,933) $ (272,408) $(1,358,975)
============ ============= =============== =============
</TABLE>
(1) From inception May 1, 1997 to December 31, 1997
(2) From inception June 2, 1997 to December 31, 1997 and May 2, 1997 to
December 31, 1997, respectively
(3) From inception July 2, 1997 to December 31, 1997 and May 5, 1997 to
December 31, 1997, respectively
(4) From inception May 15, 1997 to December 31, 1997 and May 1, 1997 to
December 31, 1997, respectively
See Notes to Financial Statements
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1997
<TABLE>
<CAPTION>
Money Market Growth
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- -------------------------------
<S> <C> <C> <C> <C>
From operations
Net investment income (loss) ................... $ 317,573 $ 2,856,889 $ (251,184) $ (6,116,170)
Net realized gain (loss) ....................... -- (2) 11,806,167 167,981,308
Net unrealized appreciation .................... -- -- 798,285 13,193,068
------------ ------------- ------------ --------------
Net increase in net assets resulting from
operations .................................... 317,573 2,856,887 12,353,268 175,058,206
------------ ------------- ------------ --------------
From accumulation unit transactions
Participant deposits ........................... 364,949 43,216,873 828,029 54,522,216
Participant transfers .......................... 509,575 (41,860,606) (1,448,045) (16,461,926)
Participant withdrawals ........................ (3,535,453) (19,277,995) (8,920,648) (75,994,916)
------------ ------------- ------------ --------------
Net increase (decrease) in net assets
resulting from participant transactions ....... (2,660,929) (17,921,728) (9,540,664) (37,934,626)
------------ ------------- ------------ --------------
Net increase (decrease) in net assets .......... (2,343,356) (15,064,841) 2,812,604 137,123,580
Net assets
Beginning of period ............................ 7,357,273 84,080,402 66,538,357 907,864,367
------------ ------------- ------------ --------------
End of period .................................. $ 5,013,917 $ 69,015,561 $ 69,350,961 $1,044,987,947
============ ============= ============ ===============
<CAPTION>
Multi-Sector
Fixed Income
Sub-Account
VA1 VA2, VA3 & GSE
-------------------------------
<S> <C> <C>
From operations
Net investment income (loss) ................... $ 825,575 $ 6,478,676
Net realized gain (loss) ....................... 244,280 3,027,102
Net unrealized appreciation .................... 46,689 273,117
------------ ------------
Net increase in net assets resulting from
operations .................................... 1,116,544 9,778,895
------------ ------------
From accumulation unit transactions
Participant deposits ........................... 105,706 8,961,354
Participant transfers .......................... 97,090 9,514,532
Participant withdrawals ........................ (2,060,231) (8,597,924)
------------ ------------
Net increase (decrease) in net assets
resulting from participant transactions ....... (1,857,435) 9,877,962
------------ ------------
Net increase (decrease) in net assets .......... (740,891) 19,656,857
Net assets
Beginning of period ............................ 15,474,943 99,413,896
------------ ------------
End of period .................................. $ 14,734,052 $119,070,753
============ ============
<CAPTION>
Strategic Allocation International
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- ------------------------------
<S> <C> <C> <C> <C>
From operations
Net investment income .......................... $ 711,688 $ 2,562,198 $ 22,682 $ 214,773
Net realized gain .............................. 8,711,543 36,705,706 577,942 13,491,669
Net unrealized appreciation (depreciation) ..... 1,401,855 8,778,795 (36,802) 81,967
------------- --------------- ------------ ----------------
Net increase in net assets resulting from
operations .................................... 10,825,086 48,046,699 563,822 13,788,409
------------- --------------- ------------ ----------------
From accumulation unit transactions
Participant deposits ........................... 1,144,584 12,806,385 195,241 7,443,575
Participant transfers .......................... (3,215,988) (13,007,386) (280,514) (3,359,763)
Participant withdrawals ........................ (6,275,860) (22,249,083) (495,643) (10,964,815)
------------- --------------- ------------ ----------------
Net decrease in net assets resulting from
participant transactions ..................... (8,347,264) (22,450,084) (580,916) (6,881,003)
------------- --------------- ------------ ----------------
Net increase (decrease) in net assets .......... 2,477,822 25,596,615 (17,094) 6,907,406
Net assets
Beginning of period ............................ 58,316,932 259,180,087 5,391,493 128,032,685
------------- --------------- ------------ ----------------
End of period .................................. $ 60,794,754 $284,776,702 $ 5,374,399 $ 134,940,091
============= =============== ============ ================
<CAPTION>
Balanced
Sub-Account
VA1 VA2, VA3 & GSE
-----------------------------
<S> <C> <C>
From operations
Net investment income .......................... $ 101,518 $ 3,304,410
Net realized gain .............................. 608,812 21,878,860
Net unrealized appreciation (depreciation) ..... 65,158 2,886,598
------------ ------------
Net increase in net assets resulting from
operations .................................... 775,488 28,069,868
------------ ------------
From accumulation unit transactions
Participant deposits ........................... 29,263 7,431,032
Participant transfers .......................... (105,010) (3,701,822)
Participant withdrawals ........................ (552,520) (16,324,265)
------------ ------------
Net decrease in net assets resulting from
participant transactions ..................... (628,267) (12,595,055)
------------ ------------
Net increase (decrease) in net assets .......... 147,221 15,474,813
Net assets
Beginning of period ............................ 4,916,754 176,156,478
------------ ------------
End of period .................................. $ 5,063,975 $191,631,291
============ ============
</TABLE>
See Notes to Financial Statements
8
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1997
(Continued)
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
From operations
Net investment income (loss) ................... $ 14,291 $ 584,422 $ (5,396) $ (216,930)
Net realized gain (loss) ....................... 18,819 1,249,826 119,345 3,690,699
Net unrealized appreciation (depreciation) ..... 75,320 3,671,800 15,658 123,526
----------- ----------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations ..................... 108,430 5,506,048 129,607 3,597,295
----------- ----------- ---------- -----------
From accumulation unit transactions
Participant deposits ........................... 39,982 4,865,141 28,393 4,877,862
Participant transfers .......................... 400,830 9,067,768 269,989 5,604,657
Participant withdrawals ........................ (90,794) (2,087,042) (173,003) (3,893,147)
----------- ----------- ---------- -----------
Net increase (decrease) in net assets
resulting from participant transactions ....... 350,018 11,845,867 125,379 6,589,372
----------- ----------- ---------- -----------
Net increase (decrease) in net assets .......... 458,448 17,351,915 254,986 10,186,667
Net assets
Beginning of period ............................ 287,431 19,373,257 673,988 18,884,029
----------- ----------- ---------- -----------
End of period .................................. $ 745,879 $36,725,172 $ 928,974 $29,070,696
=========== =========== ========== ===========
<CAPTION>
Aberdeen New Asia
Sub-Account
VA1 VA2, VA3 & GSE
------------------------------
<S> <C> <C>
From operations
Net investment income (loss) ................... $ 3,463 $ 170,376
Net realized gain (loss) ....................... (26,056) (109,763)
Net unrealized appreciation (depreciation) ..... (77,025) (3,327,944)
---------- ------------
Net increase (decrease) in net assets
resulting from operations ..................... (99,618) (3,267,331)
---------- ------------
From accumulation unit transactions
Participant deposits ........................... 14,600 1,539,143
Participant transfers .......................... (107,286) 396,202
Participant withdrawals ........................ (52,465) (419,327)
---------- ------------
Net increase (decrease) in net assets
resulting from participant transactions ....... (145,151) 1,516,018
---------- ------------
Net increase (decrease) in net assets .......... (244,769) (1,751,313)
Net assets
Beginning of period ............................ 394,095 8,108,693
---------- ------------
End of period .................................. $ 149,326 $ 6,357,380
========== ============
<CAPTION>
Enhanced Index Wanger International Small Cap
Sub-Account(1) Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------- -------------------------------
<S> <C> <C> <C> <C>
From operations
Net investment gain (loss) ..................... $ 1,384 $ (728) $ 40,815 $ 755,680
Net realized gain (loss) ....................... 3,586 93,771 (9,521) (186,359)
Net unrealized appreciation (depreciation) ..... 8,382 909,255 (101,297) (3,451,230)
------------ ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations ..................... 13,352 1,002,298 (70,003) (2,881,909)
------------ ----------- ------------ -----------
From accumulation unit transactions
Participant deposits ........................... -- 16,296,893 98,602 12,346,480
Participant transfers .......................... 617,780 6,831,680 370,333 9,272,247
Participant withdrawals ........................ (19,588) (80,875) (467,094) (4,420,824)
------------ ----------- ------------ -----------
Net increase in net assets resulting
from participant transactions ................. 598,192 23,047,698 1,841 17,197,903
------------ ----------- ------------ -----------
Net increase (decrease) in net assets .......... 611,544 24,049,996 (68,162) 14,315,994
Net assets
Beginning of period ............................ -- -- 2,644,367 65,814,714
------------ ----------- ------------ -----------
End of period .................................. $ 611,544 $24,049,996 $2,576,205 $80,130,708
============ =========== ============ ===========
<CAPTION>
Wanger U.S. Small Cap
Sub-Account
VA1 VA2, VA3 & GSE
----------------------------
<S> <C> <C>
From operations
Net investment gain (loss) ..................... $ 54,891 $ 824,337
Net realized gain (loss) ....................... 233,219 (4,456)
Net unrealized appreciation (depreciation) ..... 1,370,089 33,929,801
----------- ------------
Net increase (decrease) in net assets
resulting from operations ..................... 1,658,199 34,749,682
----------- ------------
From accumulation unit transactions
Participant deposits ........................... 226,132 18,307,137
Participant transfers .......................... 1,421,314 32,938,503
Participant withdrawals ........................ (951,778) (6,387,812)
----------- ------------
Net increase in net assets resulting
from participant transactions ................. 695,668 44,857,828
----------- ------------
Net increase (decrease) in net assets .......... 2,353,867 79,607,510
Net assets
Beginning of period ............................ 4,853,083 98,116,160
----------- ------------
End of period .................................. $7,206,950 $177,723,670
=========== ============
</TABLE>
(1) From inception July 15, 1997 to December 31, 1997
See Notes to Financial Statements
9
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1997
(Continued)
<TABLE>
<CAPTION>
Templeton Stock Templeton Asset Allocation
Sub-Account(1) Sub-Account(2)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ --------------------------------
<S> <C> <C> <C> <C>
From operations
Net investment loss .............................. $ (2,266) $ (38,328) $ (388) $ (23,633)
Net realized gain (loss) ......................... (2,763) 1,765 251 (4,016)
Net unrealized appreciation (depreciation) ....... 3,527 (291,895) (1,799) (41,016)
------------- ------------- ------------- --------------
Net decrease in net assets resulting
from operations ................................. (1,502) (328,458) (1,936) (68,665)
------------- ------------- ------------- --------------
From accumulation unit transactions
Participant deposits ............................. 13,373 2,559,783 1,844 1,407,620
Participant transfers ............................ 214,990 6,188,689 156,708 3,270,467
Participant withdrawals .......................... (103,393) (91,304) 143 (31,450)
------------- ------------- ------------- --------------
Net increase in net assets resulting
from participant transactions ................... 124,970 8,657,168 158,695 4,646,637
------------- ------------- ------------- --------------
Net increase in net assets ....................... 123,468 8,328,710 156,759 4,577,972
Net assets
Beginning of period .............................. -- -- -- --
------------- ------------- ------------- --------------
End of period .................................... $ 123,468 $8,328,710 $ 156,759 $4,577,972
============= ============= ============= ==============
Templeton International Templeton Developing Markets
Sub-Account(3) Sub-Account(4)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- --------------------------------
From operations
Net investment loss .............................. $ (349) $ (30,846) $ (2,574) $ (19,956)
Net realized loss ................................ (534) (30,517) (628) (31,490)
Net unrealized appreciation (depreciation) ....... 49 (57,570) (269,206) (1,307,529)
-------------- ------------- -------------- --------------
Net decrease in net assets resulting
from operations ................................. (834) (118,933) (272,408) (1,358,975)
-------------- ------------- -------------- --------------
From accumulation unit transactions
Participant deposits ............................. 1,844 1,675,418 30,844 1,194,747
Participant transfers ............................ 154,862 5,935,831 727,845 3,007,872
Participant withdrawals .......................... (15,920) (59,981) (598) (66,676)
-------------- ------------- -------------- --------------
Net increase in net assets resulting
from participant transactions ................... 140,786 7,551,268 758,091 4,135,943
-------------- ------------- -------------- --------------
Net increase in net assets ....................... 139,952 7,432,335 485,683 2,776,968
Net assets
Beginning of period .............................. -- -- -- --
-------------- ------------- -------------- --------------
End of period .................................... $ 139,952 $7,432,335 $ 485,683 $2,776,968
============== ============= ============== ==============
</TABLE>
(1) From inception May 1, 1997 to December 31, 1997
(2) From inception June 2, 1997 to December 31, 1997 and May 2, 1997 to
December 31, 1997, respectively
(3) From inception July 2, 1997 to December 31, 1997 and May 5, 1997 to
December 31, 1997, respectively
(4) From inception May 15, 1997 to December 31, 1997 and May 1, 1997 to
December 31, 1997, respectively
See Notes to Financial Statements
10
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1996
<TABLE>
<CAPTION>
Money Market Growth
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
From operations
Net investment income (loss) ................... $ 315,546 $ 2,669,182 $ (40,837) $ (2,437,516)
Net realized gain .............................. -- -- 4,949,627 61,339,837
Net unrealized appreciation (depreciation) ..... -- -- 2,358,935 31,685,702
------------ ------------ ------------ ------------
Net increase in net assets resulting from
operations .................................... 315,546 2,669,182 7,267,725 90,588,023
------------ ------------ ------------ ------------
From accumulation unit transactions
Participant deposits ........................... 413,122 62,414,283 1,163,841 98,787,397
Participant transfers .......................... 2,086,813 (38,766,038) (3,027,275) (9,399,903)
Participant withdrawals ........................ (2,528,258) (16,292,176) (6,317,461) (35,720,970)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from participant transactions ....... (28,323) 7,356,069 (8,180,895) 53,666,524
------------ ------------ ------------ ------------
Net increase (decrease) in net assets .......... 287,223 10,025,251 (913,170) 144,254,547
Net assets
Beginning of period ............................ 7,070,050 74,055,151 67,451,527 763,609,820
------------ ------------ ------------ ------------
End of period .................................. $ 7,357,273 $ 84,080,402 $ 66,538,357 $907,864,367
============ ============ ============ ============
<CAPTION>
Multi-Sector
Fixed Income
Sub-Account
VA1 VA2, VA3 & GSE
-------------------------------
<S> <C> <C>
From operations
Net investment income (loss) ................... $ 853,597 $ 5,657,923
Net realized gain .............................. 1,001,417 2,949,781
Net unrealized appreciation (depreciation) ..... (396,876) 940,530
------------ ------------
Net increase in net assets resulting from
operations .................................... 1,458,138 9,548,234
------------ ------------
From accumulation unit transactions
Participant deposits ........................... 265,897 12,251,810
Participant transfers .......................... (34,417) 544,623
Participant withdrawals ........................ (1,143,820) (7,038,518)
------------ ------------
Net increase (decrease) in net assets
resulting from participant transactions ....... (912,340) 5,757,915
------------ ------------
Net increase (decrease) in net assets .......... 545,798 15,306,149
Net assets
Beginning of period ............................ 14,929,145 84,107,747
------------ ------------
End of period .................................. $ 15,474,943 $ 99,413,896
============ ============
<CAPTION>
Strategic Allocation International
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ -----------------------------
<S> <C> <C> <C> <C>
From operations
Net investment income .......................... $ 706,749 $ 2,395,211 $ 23,532 $ 313,994
Net realized gain .............................. 4,196,303 16,710,729 185,841 3,004,462
Net unrealized appreciation (depreciation) ..... (264,359) 143,413 649,224 15,512,070
------------- ------------ ------------ ------------
Net increase in net assets resulting from
operations .................................... 4,638,693 19,249,353 858,597 18,830,526
------------- ------------ ------------ ------------
From accumulation unit transactions
Participant deposits ........................... 921,673 21,807,365 123,786 9,967,892
Participant transfers .......................... (4,520,404) (17,991,179) (238,308) (340,043)
Participant withdrawals ........................ (6,234,965) (15,780,165) (527,123) (7,580,723)
------------- ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from participant transactions ....... (9,833,696) (11,963,979) (641,645) 2,047,126
------------- ------------ ------------ ------------
Net increase (decrease) in net assets .......... (5,195,003) 7,285,374 216,952 20,877,652
Net assets
Beginning of period ............................ 63,511,935 251,894,713 5,174,541 107,155,033
------------- ------------ ------------ ------------
End of period .................................. $ 58,316,932 $259,180,087 $ 5,391,493 $128,032,685
============= ============ ============ ============
<CAPTION>
Balanced
Sub-Account
VA1 VA2, VA3 & GSE
-----------------------------
<S> <C> <C>
From operations
Net investment income .......................... $ 88,622 $ 2,669,801
Net realized gain .............................. 490,865 16,125,136
Net unrealized appreciation (depreciation) ..... (130,224) (3,383,807)
------------ ------------
Net increase in net assets resulting from
operations .................................... 449,263 15,411,130
------------ ------------
From accumulation unit transactions
Participant deposits ........................... 69,850 13,546,555
Participant transfers .......................... (770,120) (12,855,150)
Participant withdrawals ........................ (362,102) (12,633,674)
------------ ------------
Net increase (decrease) in net assets
resulting from participant transactions ....... (1,062,372) (11,942,269)
------------ ------------
Net increase (decrease) in net assets .......... (613,109) 3,468,861
Net assets
Beginning of period ............................ 5,529,863 172,687,617
------------ ------------
End of period .................................. $ 4,916,754 $176,156,478
============ ============
</TABLE>
See Notes to Financial Statements
11
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1996
(Continued)
<TABLE>
<CAPTION>
Real Estate
Sub-Account
VA1 VA2, VA3 & GSE
-----------------------------
<S> <C> <C>
From operations
Net investment income (loss) .............. $ 3,849 $ 337,675
Net realized gain (loss) .................. 3,375 210,469
Net unrealized appreciation (depreciation) 42,397 3,218,688
---------- -----------
Net increase (decrease) in net assets
resulting from operations ................ 49,621 3,766,832
---------- -----------
From accumulation unit transactions
Participant deposits ...................... 21,937 1,419,253
Participant transfers ..................... 203,153 6,126,595
Participant withdrawals ................... (26,582) (127,550)
---------- -----------
Net increase in net assets resulting
from participant transactions ............ 198,508 7,418,298
---------- -----------
Net increase in net assets ................ 248,129 11,185,130
Net assets
Beginning of period ....................... 39,302 8,188,127
---------- -----------
End of period ............................. $ 287,431 $19,373,257
========== ===========
<CAPTION>
Strategic Theme Aberdeen New Asia
Sub-Account(1) Sub-Account(2)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- --------------------------
<S> <C> <C> <C> <C>
From operations
Net investment income (loss) .............. $ (888) $ (75,570) $ 1,058 $ 18,632
Net realized gain (loss) .................. 1,447 131,998 (15) 1,853
Net unrealized appreciation (depreciation) 20,742 755,902 (1,776) (12,629)
---------- ----------- -------- ----------
Net increase (decrease) in net assets
resulting from operations ................ 21,301 812,330 (733) 7,856
---------- ----------- -------- ----------
From accumulation unit transactions
Participant deposits ...................... 97,264 11,116,071 -- 744,784
Participant transfers ..................... 557,249 7,104,135 396,531 7,370,328
Participant withdrawals ................... (1,826) (148,507) (1,703) (14,275)
---------- ----------- -------- ----------
Net increase in net assets resulting
from participant transactions ............ 652,687 18,071,699 394,828 8,100,837
---------- ----------- -------- ----------
Net increase in net assets ................ 673,988 18,884,029 394,095 8,108,693
Net assets
Beginning of period ....................... -- -- -- --
---------- ----------- -------- ----------
End of period ............................. $ 673,988 $18,884,029 $394,095 $8,108,693
========== =========== ======== ==========
Wanger International Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- ----------------------------
From operations
Net investment loss ....................... $ (14,135) $ (442,757) $ (28,850) $ (652,459)
Net realized gain (loss) .................. (734) (2,372) 1,581 (31,819)
Net unrealized appreciation ............... 258,110 7,549,473 790,450 18,432,196
----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations .......................... 243,241 7,104,344 763,181 17,747,918
----------- ----------- ----------- -----------
From accumulation unit transactions
Participant deposits ...................... 234,155 15,960,884 269,408 20,013,816
Participant transfers ..................... 2,018,521 33,617,187 3,368,454 42,773,428
Participant withdrawals ................... (92,790) (1,194,205) (80,915) (2,113,335)
----------- ----------- ----------- -----------
Net increase in net assets resulting
from participant transactions ............ 2,159,886 48,383,866 3,556,947 60,673,909
----------- ----------- ----------- -----------
Net increase in net assets ................ 2,403,127 55,488,210 4,320,128 78,421,827
Net assets
Beginning of period ....................... 241,240 10,326,504 532,955 19,694,333
----------- ----------- ----------- -----------
End of period ............................. $2,644,367 $65,814,714 $4,853,083 $98,116,160
=========== =========== =========== ===========
</TABLE>
(1) From inception February 7, 1996 to December 31, 1996
(2) From inception September 29, 1996 to December 31, 1996
See Notes to Financial Statements
12
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 1--Organization
Phoenix Home Life Variable Accumulation Account (the "Account") is a
separate investment account of Phoenix Home Life Mutual Insurance Company
(Phoenix). The account is organized as a unit investment trust and currently
consists of sixteen Sub-accounts and invests in corresponding series of The
Phoenix Edge Series Fund, Wanger Advisors Trust and the Templeton Variable
Products Series Fund (the "Funds"). The Account is offered as The Big Edge and
The Big Edge Plus to individuals (VA1, VA2 and VA3) and is also offered as
Group Strategic Edge ("GSE") to groups to fund certain tax-qualified pension
plans or profit sharing plans. The Money Market, Growth, Multi-Sector Fixed
Income, Strategic Allocation (formerly Total Return), International, Balanced,
Real Estate, Strategic Theme, Aberdeen New Asia, Research Enhanced Index
("Enhanced Index"), Wanger International Small Cap, Wanger U.S. Small Cap,
Templeton Stock, Templeton Asset Allocation, Templeton International and
Templeton Developing Markets Sub-accounts are subdivided into two pools
designated "VA1" and "VA2, VA3 & GSE". VA2, VA3 and GSE contracts include a
higher expense risk charge than the VA1 contract.
Each Series has distinct investment objectives. The Money Market Series is
a pooled short-term investment fund. The Growth Series is a growth common stock
fund. The Multi-Sector Fixed Income Series is a long-term debt fund. The
Strategic Allocation Series invests in equity securities and long and
short-term debt. The International Series invests primarily in an
internationally diversified portfolio of equity securities. The Balanced Series
is a balanced fund which invests in growth stocks and at least 25% of its
assets in fixed income senior securities. The Real Estate Series invests in
marketable securities of publicly traded Real Estate Investment Trusts
("REITs") and companies that are principally engaged in the real estate
industry. The Strategic Theme Series invests in securities of companies
believed to benefit from specific trends. The Aberdeen New Asia Series invests
primarily in diversified equity securities of issuers organized and principally
operating in Asia, excluding Japan. The Research Enhanced Index ("Enhanced
Index") Series invests in a broadly diversified portfolio of equity securities
of large and medium capitalization companies within market sectors reflected in
the S&P 500. Wanger International Small Cap and Wanger U.S. Small Cap invest
primarily in securities of companies with a stock market capitalization of less
than $1 billion. The Templeton Stock Fund invests primarily in common stocks
issued by companies, large and small, in various nations throughout the world.
The Templeton Asset Allocation Fund invests in stocks of companies in any
nation, debt obligations of companies and governments of any nation, and money
market instruments. The Templeton International Fund invests in stocks and debt
obligations of companies and governments outside the United States, and the
Templeton Developing Markets Fund invests primarily in equity securities of
issuers in countries having developing markets. Contract owners may also direct
the allocation of their investments between the Account and the Guaranteed
Interest Account (of the General Account of Phoenix) through participant
transfers.
Note 2--Significant Accounting Policies
A. Valuation of investments: Investments are made exclusively in the Funds and
are valued at the net asset values per share of the respective Series.
B. Investment transactions and related income: Realized gains and losses
include capital gain distributions from the Funds as well as gains and losses
on sales of shares in the Funds determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from Phoenix and, under
current federal income tax law, income arising from the Account is not taxed
since reserves are established equivalent to such income. Therefore, no
provision for related federal taxes is required.
D. Distributions: Distributions are recorded on the ex-dividend date.
Note 3--Purchases and Sales of Shares of the Funds
Purchases and sales of shares of the Funds for the period ended December
31, 1997 aggregated the following:
<TABLE>
<CAPTION>
VA1 VA2, VA3 & GSE
------------------------------- --------------------------------
Sub-Account Purchases Sales Purchases Sales
- -------------------------------------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
The Phoenix Edge Series Fund:
Money Market .............................. $19,996,117 $22,341,049 $ 93,490,661 $108,568,592
Growth .................................... 15,291,803 13,928,303 207,948,090 86,097,141
Multi-Sector Fixed Income ................. 10,878,333 11,552,201 35,121,140 15,762,659
Strategic Allocation ...................... 9,871,470 9,947,388 46,613,050 31,208,725
International ............................. 1,454,621 1,485,532 27,431,757 20,907,393
Balanced .................................. 1,753,005 1,707,168 33,422,434 21,284,514
Real Estate ............................... 787,062 396,881 23,362,457 9,662,722
Strategic Theme ........................... 416,089 188,554 16,448,618 6,709,849
Aberdeen New Asia ......................... 75,826 217,508 4,439,217 2,749,148
Enhanced Index ............................ 684,560 82,315 24,075,329 895,458
Wanger Advisors Trust:
Wanger International Small Cap ............ 1,292,513 1,249,765 30,149,821 12,177,091
Wanger U.S. Small Cap ..................... 7,680,502 6,927,839 57,651,650 11,883,138
The Templeton Variable Products Series Fund:
Stock ..................................... 1,459,381 1,336,575 9,033,866 406,617
Asset Allocation .......................... 219,501 61,096 4,976,725 349,013
International ............................. 156,161 15,611 14,241,802 6,713,975
Developing Markets ........................ 793,940 38,007 4,863,661 744,761
</TABLE>
13
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 4--Participant Accumulation Unit Transactions (in units)
<TABLE>
<CAPTION>
Sub-Account
---------------------------------------------
Money Multi-Sector
Market Growth Fixed Income
--------------- -------------- --------------
<S> <C> <C> <C>
VA1
Units outstanding, beginning of period ...... 3,459,902 7,215,152 4,114,438
Participant deposits ........................ 168,431 79,829 27,284
Participant transfers ....................... 254,663 (138,633) (38,579)
Participant withdrawals ..................... (1,618,809) (883,521) (546,783)
------------ --------- ---------
Units outstanding, end of period ............ 2,264,187 6,272,827 3,556,360
============ ========= =========
VA2, VA3
Big Edge Plus:
Units outstanding, beginning of period ...... 38,882,041 96,119,114 26,225,650
Participant deposits ........................ 18,950,015 4,746,443 2,169,432
Participant transfers ....................... (18,930,004) (1,586,367) 2,421,404
Participant withdrawals ..................... (8,158,027) (7,004,369) (2,194,740)
-------------- ---------- ------------
Units outstanding, end of period ............ 30,744,025 92,274,821 28,621,746
============== ========== ============
Group Strategic Edge:
Units outstanding, beginning of period ...... 1,648,109 4,764,103 853,737
Participant deposits ........................ 884,757 773,620 222,330
Participant transfers ....................... 246,873 (96,723) 4,397
Participant withdrawals ..................... (1,498,405) (616,515) (101,422)
-------------- ---------- ------------
Units outstanding, end of period ............ 1,281,334 4,824,485 979,042
============== ========== ============
Sub-Account
------------------------------------------------
Strategic
Allocation International Balanced
--------------- ---------------- ---------------
VA1
Units outstanding, beginning of period ...... 15,340,867 3,336,546 3,271,238
Participant deposits ........................ 277,021 111,485 18,644
Participant transfers ....................... (777,021) (174,788) (55,482)
Participant withdrawals ..................... (1,462,611) (275,132) (349,110)
---------- --------- ---------
Units outstanding, end of period ............ 13,378,256 2,998,111 2,885,290
========== ========= =========
VA2, VA3
Big Edge Plus:
Units outstanding, beginning of period ...... 68,322,391 78,251,534 115,814,646
Participant deposits ........................ 2,717,555 3,504,973 4,252,236
Participant transfers ....................... (3,025,586) (1,835,577) (2,354,537)
Participant withdrawals ..................... (5,266,187) (5,941,863) (9,470,746)
---------- ------------ -------------
Units outstanding, end of period ............ 62,748,173 73,979,067 108,241,599
========== ============ =============
Group Strategic Edge:
Units outstanding, beginning of period ...... 1,578,300 2,283,782 2,757,385
Participant deposits ........................ 382,242 903,361 458,018
Participant transfers ....................... (109,082) 102,317 (66,357)
Participant withdrawals ..................... (192,633) (565,010) (655,380)
---------- ------------ -------------
Units outstanding, end of period ............ 1,658,827 2,724,450 2,493,666
========== ============ =============
<CAPTION>
Sub-Account
---------------------------------------------
Strategic Aberdeen
Real Estate Theme New Asia
--------------- ----------- --------------
<S> <C> <C> <C>
VA1
Units outstanding, beginning of period ...... 188,753 620,567 395,033
Participant deposits ........................ 24,734 23,596 14,646
Participant transfers ....................... 248,681 232,163 (130,783)
Participant withdrawals ..................... (56,874) (139,064) (55,217)
-------------- ---------- ------------
Units outstanding, end of period ............ 405,294 737,262 223,679
============== ========== ============
VA2, VA3
Big Edge Plus:
Units outstanding, beginning of period ...... 12,357,449 17,000,975 8,107,984
Participant deposits ........................ 2,390,217 3,873,006 1,403,501
Participant transfers ....................... 5,291,355 4,644,302 172,592
Participant withdrawals ..................... (1,096,877) (3,103,649) (389,355)
-------------- ---------- ------------
Units outstanding, end of period ............ 18,942,144 22,414,634 9,294,722
============== ========== ============
Group Strategic Edge:
Units outstanding, beginning of period ...... 256,752 310,442 16,747
Participant deposits ........................ 613,730 289,130 222,982
Participant transfers ....................... 142,121 56,860 55,208
Participant withdrawals ..................... (119,662) (43,579) (47,385)
-------------- ---------- ------------
Units outstanding, end of period ............ 892,941 612,853 247,552
============== ========== ============
Sub-Account
-----------------------------------------------
Wanger
Enhanced International Wanger U.S.
Index Small Cap Small Cap
------------- ---------------- ---------------
VA1
Units outstanding, beginning of period ...... -- 1,632,016 2,887,671
Participant deposits ........................ -- 58,352 123,068
Participant transfers ....................... 619,106 214,743 820,968
Participant withdrawals ..................... (19,499) (275,347) (485,180)
------------- ------------ --------------
Units outstanding, end of period ............ 599,607 1,629,764 3,346,527
============= ============ ==============
VA2, VA3
Big Edge Plus:
Units outstanding, beginning of period ...... -- 37,110,120 57,510,326
Participant deposits ........................ 15,742,750 5,800,556 8,601,492
Participant transfers ....................... 6,781,144 4,900,906 17,253,115
Participant withdrawals ..................... (68,499) (2,199,391) (3,162,263)
------------- ------------ --------------
Units outstanding, end of period ............ 22,455,395 45,612,191 80,202,670
============= ============ ==============
Group Strategic Edge:
Units outstanding, beginning of period ...... -- 710,006 1,113,171
Participant deposits ........................ 265,778 1,016,690 1,311,822
Participant transfers ....................... 134,611 173,049 664,751
Participant withdrawals ..................... (46) (194,029) (222,860)
------------- ------------ --------------
Units outstanding, end of period ............ 400,343 1,705,716 2,866,884
============= ============ ==============
</TABLE>
14
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 4--Participant Accumulation Unit Transactions (in units) (continued)
<TABLE>
<CAPTION>
Templeton Templeton
Templeton Asset Templeton Developing
Stock Allocation International Markets
------------- ---------------- --------------- -------------
<S> <C> <C> <C> <C>
VA1
Units outstanding, beginning of period ......... -- -- -- --
Participant deposits ........................... 11,992 1,734 1,824 31,155
Participant transfers .......................... 194,767 150,051 157,030 687,893
Participant withdrawals ........................ (90,683) (4) (15,157) (628)
------- ---------- ------- -------
Units outstanding, end of period ............... 116,076 151,781 143,697 718,420
======= ========= ======= =======
VA2, VA3
Big Edge Plus:
Units outstanding, beginning of period ......... -- -- -- --
Participant deposits ........................... 2,095,065 1,220,247 1,225,309 1,094,099
Participant transfers .......................... 5,554,846 2,988,103 5,359,434 2,955,129
Participant withdrawals ........................ (108,965) (75,391) (35,917) (106,062)
--------- ---------- --------- ---------
Units outstanding, end of period ............... 7,540,946 4,132,959 6,548,826 3,943,166
========= ========== ========= =========
Group Strategic Edge:
Units outstanding, beginning of period ......... -- -- -- --
Participant deposits ........................... 239,925 105,145 285,384 229,331
Participant transfers .......................... 91,425 18,233 94,565 19,690
Participant withdrawals ........................ (31,619) (2,617) (21,183) (25,476)
--------- ---------- --------- ---------
Units outstanding, end of period ............... 299,731 120,761 358,766 223,545
========= ========== ========= =========
</TABLE>
15
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 5--Investment Advisory Fees and Related Party Transactions
Phoenix and its indirect, majority owned subsidiary, Phoenix Equity
Planning Corporation, a registered broker/dealer in securities, provide all
services to the Account.
Phoenix assumes the risk that annuitants as a class may live longer than
expected (necessitating a greater number of annuity payments) and that its
expenses may be higher than its deductions for such expenses. In return for the
assumption of these mortality and expense risks, Phoenix charges the
Sub-Accounts designated VA1 the daily equivalent of 0.40% on an annual basis of
the current value of the Sub-Account's net assets for mortality risks assumed
and the daily equivalent of 0.60% on an annual basis for expense risks assumed.
VA2, VA3 & GSE Sub-Accounts are charged the daily equivalent of 0.40% and 0.85%
on an annual basis for mortality and expense risks, respectively.
As compensation for administrative services provided to the Account,
Phoenix additionally receives $35 per year from each contract, which is
deducted from the Sub-Account holding the assets of the participant, or on a
pro rata basis from two or more Sub-Accounts in relation to their values under
the contract. Fees for administrative services provided for the year ended
December 31, 1997 aggregated $1,424,769 and are funded by and included in
participant withdrawals.
Phoenix Equity Planning Corporation is the principal underwriter and
distributor for the Account. Phoenix reimburses Phoenix Equity Planning
Corporation for expenses incurred as underwriter.
On surrender of a contract, contingent deferred sales charges, which vary
from 0 - 6% depending upon the duration of each contract deposit, are deducted
from the proceeds and are paid to Phoenix as reimbursement for services
provided. Contingent deferred sales charges deducted and paid to Phoenix
aggregated $2,437,213 for the year ended December 31, 1997.
Note 6--Distribution of Net Income
The Account does not expect to declare dividends to participants from
accumulated net income. The accumulated net income is distributed to
participants as part of withdrawals of amounts in the form of surrenders, death
benefits, transfers or annuity payments in excess of net purchase payments.
Note 7--Diversification Requirements
Under the provisions of Section 817(h) of the Internal Revenue Code ("the
Code"), a variable annuity contract, other than a contract issued in connection
with certain types of employee benefit plans, will not be treated as an annuity
contract for federal tax purposes for any period for which the investments of
the segregated asset account on which the contract is based are not adequately
diversified. The Code provides that the "adequately diversified" requirement
may be met if the underlying investments satisfy either a statutory safe harbor
test or diversification requirements set forth in regulations issued by the
Secretary of the Treasury.
The Internal Revenue Service has issued regulations under Section 817(h)
of the Code. Phoenix believes that the Account satisfies the current
requirements of the regulations, and it intends that the Account will continue
to meet such requirements.
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP [LOGO]
To the Board of Directors of Phoenix Home Life Mutual Insurance Company and
Participants of Phoenix Home Life Variable Accumulation Account
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly,
in all material respects, the financial position of the Money Market
Sub-Account, Growth Sub-Account, Multi-Sector Fixed Income Sub-Account,
Strategic Allocation Sub-Account, International Sub-Account, Balanced
Sub-Account, Real Estate Sub-Account, Strategic Theme Sub-Account, Aberdeen New
Asia Sub-Account, Enhanced Index Sub-Account, Wanger International Small Cap
Sub-Account, Wanger U.S. Small Cap Sub-Account, Templeton Stock Sub-Account,
Templeton Asset Allocation Sub-Account, Templeton International Sub-Account and
Templeton Developing Markets Sub-Account (constituting the Phoenix Home Life
Variable Accumulation Account, hereafter referred to as the "Account") at
December 31, 1997 and the results of each of their operations and the changes
in each of their net assets for each of the periods indicated, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Account's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments at December 31, 1997 by
correspondence with the Funds' custodians, provide a reasonable basis for the
opinion expressed above.
/s/ Price Waterhouse LLP
Hartford, Connecticut
February 19, 1998
17
<PAGE>
PHOENIX HOME LIFE
VARIABLE ACCUMULATION ACCOUNT
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
Underwriter
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
Custodians
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
Brown Brothers Harriman & Co.
(International Series, Aberdeen New Asia Series)
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust
(Real Estate Series, Enhanced Index Series)
P.O. Box 351
Boston, Massachusetts 02101
Independent Accountants
Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut 06103
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<PAGE>
[logo]PHOENIX
Phoenix Home Life Mutual Insurance Company
101 Munson Street
PO Box 810
Greenfield, Massachusetts 01302-0810
P725 (2/98) [Recycled logo] Printed on recycled paper using soybean ink
700.04 (C)1998 Phoenix Home Life Mutual Insurance Company
