VERSION A-1
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
MONEY MARKET SUBACCOUNT
Statement of Assets and Liabilities 2
Statement of Operations.......... 6
Statement of Changes in Net Assets 10
GROWTH SUBACCOUNT
Statement of Assets and Liabilities 2
Statement of Operations.......... 6
Statement of Changes in Net Assets 10
MULTI-SECTOR FIXED INCOME SUBACCOUNT
Statement of Assets and Liabilities 2
Statement of Operations.......... 6
Statement of Changes in Net Assets 10
STRATEGIC ALLOCATION SUBACCOUNT
Statement of Assets and Liabilities 2
Statement of Operations.......... 6
Statement of Changes in Net Assets 10
INTERNATIONAL SUBACCOUNT
Statement of Assets and Liabilities 2
Statement of Operations.......... 6
Statement of Changes in Net Assets 11
BALANCED SUBACCOUNT
Statement of Assets and Liabilities 2
Statement of Operations.......... 6
Statement of Changes in Net Assets 11
REAL ESTATE SUBACCOUNT
Statement of Assets and Liabilities 3
Statement of Operations.......... 7
Statement of Changes in Net Assets 11
STRATEGIC THEME SUBACCOUNT
Statement of Assets and Liabilities 3
Statement of Operations.......... 7
Statement of Changes in Net Assets 11
ABERDEEN NEW ASIA SUBACCOUNT
Statement of Assets and Liabilities 3
Statement of Operations.......... 7
Statement of Changes in Net Assets 12
ENHANCED INDEX SUBACCOUNT
Statement of Assets and Liabilities 3
Statement of Operations.......... 7
Statement of Changes in Net Assets 12
ENGEMANN NIFTY FIFTY SUBACCOUNT
Statement of Assets and Liabilities 3
Statement of Operations.......... 8
Statement of Changes in Net Assets 12
SENECA MID-CAP GROWTH SUBACCOUNT
Statement of Assets and Liabilities 3
Statement of Operations.......... 8
Statement of Changes in Net Assets 12
GROWTH AND INCOME SUBACCOUNT
Statement of Assets and Liabilities 4
Statement of Operations.......... 8
Statement of Changes in Net Assets 13
VALUE EQUITY SUBACCOUNT
Statement of Assets and Liabilities 4
Statement of Operations.......... 8
Statement of Changes in Net Assets 13
SCHAFER MID-CAP SUBACCOUNT
Statement of Assets and Liabilities 4
Statement of Operations.......... 8
Statement of Changes in Net Assets 13
WANGER U.S. SMALL CAP SUBACCOUNT
Statement of Assets and Liabilities 4
Statement of Operations.......... 8
Statement of Changes in Net Assets 13
WANGER INTERNATIONAL SMALL CAP SUBACCOUNT
Statement of Assets and Liabilities 4
Statement of Operations.......... 9
Statement of Changes in Net Assets 14
TEMPLETON STOCK SUBACCOUNT
Statement of Assets and Liabilities 4
Statement of Operations.......... 9
Statement of Changes in Net Assets 14
TEMPLETON ASSET ALLOCATION SUBACCOUNT
Statement of Assets and Liabilities 5
Statement of Operations.......... 9
Statement of Changes in Net Assets 14
TEMPLE INTERNATIONAL SUBACCOUNT
Statement of Assets and Liabilities 5
Statement of Operations.......... 9
Statement of Changes in Net Assets 14
TEMPLETON DEVELOPING MARKETS SUBACCOUNT
Statement of Assets and Liabilities 5
Statement of Operations.......... 9
Statement of Changes in Net Assets 15
MUTUAL SHARES INVESTMENTS SUBACCOUNT
Statement of Assets and Liabilities 5
Statement of Operations.......... 9
Statement of Changes in Net Assets 15
NOTES TO FINANCIAL STATEMENTS..... 20
<PAGE>
This annual report for the PHOENIX
HOME LIFE VARIABLE ACCUMULATION ACCOUNT
for the period ended December 31, 1998
contains the financial statements for the
Account's various annuity contracts.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MONEY MARKET GROWTH
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- -------------------------------
ASSETS
<S> <C> <C> <C> <C>
Investments at cost.................. $6,562,524 $77,697,405 $38,738,578 $ 802,833,112
========== =========== =========== ==============
Investment in The Phoenix Edge Series
Fund, at market.................... $6,562,524 $77,697,405 $76,975,075 $1,153,823,570
---------- ----------- ----------- --------------
Total assets....................... 6,562,524 77,697,405 76,975,075 1,153,823,570
LIABILITIES
Accrued expenses to related party 6,931 81,795 61,883 1,160,823
---------- ----------- ----------- --------------
NET ASSETS.............................. $6,555,593 $77,615,610 $76,913,192 $1,152,662,747
========== =========== =========== ==============
Accumulation units outstanding.......... 2,845,136 34,699,924 5,404,212 83,410,279
========== =========== =========== ==============
Unit value.............................. $ 2.304138 $ 2.236763 $ 14.231978 $ 13.819193
========== =========== =========== ==============
</TABLE>
<TABLE>
<CAPTION>
MULTI-SECTOR FIXED INCOME STRATEGIC ALLOCATION
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- -------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost.................. $9,801,129 $103,824,011 $43,574,557 $ 247,177,354
========== ============ =========== ==============
Investment in The Phoenix Edge Series
Fund, at market.................... $9,094,025 $ 96,359,381 $63,447,522 $ 292,315,694
---------- ------------ ----------- --------------
Total assets....................... 9,094,025 96,359,381 63,447,522 292,315,694
LIABILITIES
Accrued expenses to related party $ 8,130 $ 105,842 $ 51,832 $ 299,333
---------- ------------ ----------- --------------
NET ASSETS.............................. 9,085,895 96,253,539 63,395,690 292,016,361
========== ============ =========== ==============
Accumulation units outstanding.......... 2,314,658 25,246,020 11,664,611 55,360,502
========== ============ =========== ==============
Unit value.............................. $ 3.925373 $ 3.812622 $ 5.434874 $ 5.274814
========== ============ =========== ==============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- -------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost.................. $4,369,929 $114,659,288 $ 4,089,417 $163,461,975
========== ============ =========== ============
Investment in The Phoenix Edge Series
Fund, at market.................... $6,002,066 $146,561,933 $ 5,356,175 $202,855,942
---------- ------------ ----------- ------------
Total assets....................... 6,002,066 146,561,933 5,356,175 202,855,942
LIABILITIES
Accrued expenses to related party 4,976 151,767 4,432 208,860
---------- ------------ ----------- ------------
NET ASSETS.............................. $5,997,090 $146,410,166 $ 5,351,743 $202,647,082
========== ============ =========== ============
Accumulation units outstanding.......... 2,641,185 65,865,547 2,587,705 99,623,618
========== ============ =========== ============
Unit value.............................. $ 2.270606 $ 2.222864 $ 2.068143 $2.034127
========== ============ =========== ============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
REAL ESTATE STRATEGIC THEME
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost..................... $ 426,257 $ 19,725,026 $ 608,544 $ 28,305,532
============ ============ ============ ============
Investment in The Phoenix Edge Series
Fund, at market...................... $ 404,844 $ 20,223,763 $ 864,489 $ 38,774,245
------------ ------------ ------------ ------------
Total assets......................... 404,844 20,223,763 864,489 38,774,245
LIABILITIES
Accrued expenses to related party....... 212 14,843 683 38,120
------------ ------------ ------------ ------------
NET ASSETS................................. $ 404,632 $ 20,208,920 $ 863,806 $ 38,736,125
============ ============ ============ ============
Accumulation units outstanding............. 281,836 14,027,411 478,520 21,470,457
============ ============ ============ ============
Unit value................................. $ 1.435700 $ 1.440674 $ 1.805131 $ 1.804159
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
ABERDEEN NEW ASIA
SUBACCOUNT
VA1 VA2, VA3 & GSE
----------------------------------
<S> <C> <C>
ASSETS
Investments at cost..................... $ 191,368 $ 8,755,769
============ ============
Investment in The Phoenix Edge Series
Fund, at market...................... $ 117,285 $ 5,376,295
------------ ------------
Total assets......................... 117,285 5,376,295
LIABILITIES
Accrued expenses to related party....... 98 5,742
------------ ------------
NET ASSETS................................. $ 117,187 $ 5,370,553
============ ============
Accumulation units outstanding............. 185,561 8,542,794
============ ============
Unit value................................. $ 0.636069 $ 0.628739
============ ============
</TABLE>
<TABLE>
<CAPTION>
ENHANCED INDEX
SUBACCOUNT
VA1 VA2, VA3 & GSE SIP
------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments at cost..................... $ 1,306,557 $ 20,002,230 $4,499,873
============ ============ ==========
Investment in The Phoenix Edge Series
Fund, at market...................... $ 1,516,306 $ 25,556,793 4,826,414
------------ ------------ ----------
Total assets......................... 1,516,306 25,556,793 4,826,414
LIABILITIES
Accrued expenses to related party....... 1,654 36,081 0
------------ ------------ ----------
NET ASSETS................................. $ 1,514,652 $ 25,520,712 $4,826,414
============ ============ ==========
Accumulation units outstanding............. 1,139,040 18,649,223 398,878
============ ============ ==========
Unit value................................. $ 1.329762 $ 1.368460 $12.099964
============ ============ ==========
</TABLE>
<TABLE>
<CAPTION>
ENGEMANN NIFTY FIFTY SENECA MID-CAP GROWTH
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost..................... $ 192,470 $ 4,653,983 $ 42,124 $ 3,623,025
============ ============ ============ ============
Investment in The Phoenix Edge Series 46,937
Fund, at market...................... $ 213,198 $ 5,577,628 $ $ 4,263,622
------------ ------------ ------------ ------------
Total assets......................... 213,198 5,577,628 46,937 4,263,622
LIABILITIES
Accrued expenses to related party....... 134 5,226 36 4,053
------------ ------------ ------------ ------------
NET ASSETS................................. $ 213,064 $ 5,572,402 $ 46,901 $ 4,259,569
============ ============ ============ ============
Accumulation units outstanding............. 170,618 4,459,187 43,127 3,534,998
============ ============ ============ ============
Unit value................................. $ 1.248784 $ 1.249645 $ 1.087509 $ 1.204999
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
GROWTH AND INCOME VALUE EQUITY
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost..................... $ 475,585 $ 17,357,837 $ 30,229 $ 4,751,220
============ ============ ============ ============
Investment in The Phoenix Edge Series 32,315
Fund, at market...................... $ 512,974 $ 19,566,846 $ $ 5,175,227
------------ ------------ ------------- ------------
Total assets......................... 512,974 19,566,846 32,315 5,175,227
LIABILITIES
Accrued expenses to related party....... 402 19,093 28 4,886
------------ ------------ ------------- ------------
NET ASSETS................................. $ 512,572 $ 19,547,753 $ 32,287 $ 5,170,341
============ ============ ============ ============
Accumulation units outstanding............. 429,060 16,395,572 31,048 4,715,253
============ ============ ============ ============
Unit value................................. $ 1.194641 $ 1.192258 $ 1.039906 $ 1.096514
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
SCHAFER MID-CAP WANGER U.S. SMALL CAP
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost..................... $ 95,903 $ 4,466,332 $ 6,062,291 $120,698,036
============ ============ ============ ============
Investment in The Phoenix Edge Series
Fund, at market...................... $ 82,886 $ 4,002,741 $ -- $ --
Investment in Wanger Advisors Trust,
at market............................ -- -- 8,491,514 179,219,308
------------ ------------ ------------- ------------
Total assets......................... 82,886 4,002,741 8,491,514 179,219,308
LIABILITIES
Accrued expenses to related party....... 68 4,121 5,672 180,465
------------ ------------ ------------- ------------
NET ASSETS................................. $ 82,818 $ 3,998,620 $ 8,485,842 $179,038,843
============ ============ ============ ============
Accumulation units outstanding............. 96,471 4,559,289 3,661,772 77,959,539
============ ============ ============ ============
Unit value................................. $ 0.858489 $ 0.877027 $ 2.317414 $ 2.296561
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
WANGER INTERNATIONAL SMALL CAP TEMPLETON STOCK
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost..................... $ 1,909,995 $ 62,035,868 $ 139,821 $ 9,553,800
============ ============ ============ ============
Investment in Wanger Advisors Trust,
at market............................ $ 2,405,793 $ 78,132,232 $ -- $ --
Investment in Templeton Variable Products
Series Fund, at market............... -- -- 131,189 8,483,303
------------ ------------ ------------- ------------
Total assets......................... 2,405,793 78,132,232 131,189 8,483,303
LIABILITIES
Accrued expenses to related party....... 1,956 80,571 109 8,835
------------ ------------ ------------- ------------
NET ASSETS................................. $ 2,403,837 $ 78,051,661 $ 131,080 $ 8,474,468
============ ============ ============ ============
Accumulation units outstanding............. 1,320,317 40,115,513 123,318 7,998,876
============ ============ ============ ============
Unit value................................. $ 1.820651 $ 1.945673 $ 1.063450 $ 1.059457
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON ASSET ALLOCATION TEMPLETON INTERNATIONAL
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost..................... $ 144,180 $ 5,204,312 $ 218,765 $ 8,092,081
============ ============ ============ ============
Investment in Templeton Variable Products
Series Fund, at market............... $ 142,405 $ 5,169,062 $ 222,546 $ 8,245,914
------------ ------------ ------------ ------------
Total assets......................... 142,405 5,169,062 222,546 8,245,914
LIABILITIES
Accrued expenses to related party....... 119 5,421 184 8,764
------------ ------------ ------------ ------------
NET ASSETS................................. $ 142,286 $ 5,163,641 $ 222,362 $ 8,237,150
============ ============ ============ ============
Accumulation units outstanding............. 131,149 4,578,819 211,412 7,108,964
============ ============ ============ ============
Unit value................................. $ 1.084915 $ 1.127724 $ 1.051797 $ 1.158804
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
TEMPLETON DEVELOPING MARKETS MUTUAL SHARES INVESTMENTS
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost..................... $ 755,347 $ 4,159,884 $ -- $ 124,258
============ ============ ============ ============
Investment in Templeton Variable Products
Series Fund, at market............... $ 375,990 $ 2,209,634 $ -- $ 125,722
------------ ------------ ------------ ------------
Total assets......................... 375,990 2,209,634 -- 125,722
LIABILITIES
Accrued expenses to related party....... 316 2,391 -- 126
------------ ------------ ------------ ------------
NET ASSETS................................. $ 375,674 $ 2,207,243 $ -- $ 125,596
============ ============ ============ ============
Accumulation units outstanding............. 710,888 4,247,626 123,787
============ ============ ============ ============
Unit value................................. $ 0.528457 $ 0.519642 $ -- $ 1.014614
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
5
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
MONEY MARKET GROWTH
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 308,893 $ 3,503,886 $ 92,142 $ 1,414,233
Expenses
Mortality and expense risk charges..... 61,805 879,337 706,451 13,455,438
------------- ------------ ------------ ------------
Net investment income (loss) ............. 247,088 2,624,549 (614,309) (12,041,205)
------------- ------------ ------------ ------------
Net realized gain (loss) from share
transactions........................... -- -- 676,058 11,617,846
Net realized gain distribution from Fund.. -- -- 2,895,506 44,065,967
Net unrealized appreciation
(depreciation) on investment.......... -- -- 15,027,423 227,622,984
------------- ------------ ------------ ------------
Net gain (loss) on investments............ -- -- 18,598,987 283,306,797
------------- ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations.............. $ 247,088 $ 2,624,549 $ 17,984,678 $271,265,592
============= ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MULTI-SECTOR FIXED INCOME STRATEGIC ALLOCATION
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 897,963 $ 8,203,764 $ 1,144,073 $ 5,310,631
Expenses
Mortality and expense risk charges..... 128,049 1,411,918 611,126 3,558,783
------------ ------------ ------------ ------------
Net investment income (loss).............. 769,914 6,791,846 532,947 1,751,848
------------ ------------ ------------ ------------
Net realized gain (loss) from share
transactions........................... (205,026) (1,229,880) 260,424 1,435,216
Net realized gain distribution from Fund.. 86,394 714,720 4,199,254 19,515,595
Net unrealized appreciation
(depreciation) on investment........... (1,110,475) (12,288,471) 5,942,227 27,452,482
------------ ------------ ------------ ------------
Net gain (loss) on investments............ (1,229,107) (12,803,631) 10,401,905 48,403,293
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations.............. $ (459,193) $ (6,011,785) $ 10,934,852 $ 50,155,141
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ -- $ -- $ 129,020 $ 4,856,403
Expenses
Mortality and expense risk charges..... 60,585 1,875,398 51,840 2,458,794
----------- ------------ ---------- ------------
Net investment income..................... (60,585) (1,875,398) 77,180 2,397,609
----------- ------------ ---------- ------------
Net realized gain (loss) from share
transactions........................... 149,801 3,953,808 6,022 483,496
Net realized gain distribution from Fund.. 1,029,608 25,131,290 185,636 7,164,545
Net unrealized appreciation
(depreciation) on investment........... 223,504 6,491,109 575,784 21,703,276
----------- ------------ ---------- ------------
Net gain (loss) on investments............ 1,402,913 35,576,207 767,442 29,351,317
----------- ------------ ---------- ------------
Net increase (decrease) in net assets
resulting from operations............. $ 1,342,328 $ 33,700,809 $ 844,622 $ 31,748,926
=========== ============ ========== ============
</TABLE>
See Notes to Financial Statements
6
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
REAL ESTATE STRATEGIC THEME
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
--------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.................. $ 26,066 $ 1,189,306 $ 586 $ 26,354
Expenses
Mortality and expense risk charges 6,405 353,570 7,201 393,829
--------- ----------- --------- ------------
Net investment income (loss) ..... 19,661 835,736 (6,615) (367,475)
--------- ----------- --------- ------------
Net realized gain (loss) from share
transactions................... (52,528) (1,045,319) 6,132 302,021
Net realized gain distribution from
Fund.............................. 722 32,352 50,198 2,271,021
Net unrealized appreciation
(depreciation) on investment... (142,513) (7,212,670) 219,545 9,589,335
--------- ----------- --------- ------------
Net gain (loss) on investments.... (194,319) (8,225,637) 275,875 12,162,377
--------- ----------- --------- ------------
Net increase (decrease) in net assets
resulting from operations...... $(174,658) $(7,389,901) $ 269,260 $ 11,794,902
========= =========== ========= ============
</TABLE>
<TABLE>
<CAPTION>
ABERDEEN NEW ASIA
SUBACCOUNT
VA1 VA2, VA3 & GSE
------------------------------
<S> <C> <C>
Investment income
Distributions.......................... $ 495 $ 22,778
Expenses
Mortality and expense risk charges 1,314 71,029
-------- ---------
Net investment income (loss) ............. (819) (48,251)
-------- ---------
Net realized gain (loss) from share
transactions........................... (17,561) (280,504)
Net realized gain distribution from
Fund...................................... -- --
Net unrealized appreciation
(depreciation) on investment........... 4,719 (38,901)
-------- ---------
Net gain (loss) on investments............ (12,842) (319,405)
-------- ---------
Net increase (decrease) in net assets
resulting from operations.............. $(13,661) $(367,656)
======== =========
</TABLE>
<TABLE>
<CAPTION>
ENHANCED INDEX
SUBACCOUNT(1)
VA1 VA2, VA3 & GSE SIP
---------------------------------------------
<S> <C> <C>
Investment income
Distributions.......................... $ 11,709 $ 232,777 $ 37,035
Expenses
Mortality and expense risk charges..... 10,833 333,605 --
--------- ---------- ---------
Net investment income (loss) ............. 876 (100,828) 37,035
Net realized gain (loss) from share --------- ---------- ---------
transactions........................... (4,668) 1,003,810 18,232
Net realized gain distribution from Fund.. 64,867 1,124,271 214,285
Net unrealized appreciation
(depreciation) on investment........... 201,367 4,645,307 326,541
--------- ---------- ---------
Net gain (loss) on investments............ 261,566 6,773,388 559,058
--------- ---------- ---------
Net increase (decrease) in net assets.....
resulting from operations.............. $ 262,442 $6,672,560 $ 596,093
========= ========== =========
</TABLE>
(1)From inception (SIP) March 2, 1998 to December 31, 1998.
See Notes to Financial Statements
7
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
ENGEMANN NIFTY FIFTY SENECA MID-CAP GROWTH
SUBACCOUNT(1) SUBACCOUNT(2)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- ------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 85 $ 2,180 $ 38 $ 3,508
Expenses
Mortality and expense risk charges..... 525 37,502 349 34,485
-------- --------- -------- ---------
Net investment income (loss) ............. (440) (35,322) (311) (30,977)
-------- --------- -------- ---------
Net realized gain (loss) from share
transactions........................... 607 (5,592) (13,046) 96,095
Net realized gain distribution from Fund.. -- -- -- --
Net unrealized appreciation (depreciation)
on investment.......................... 20,728 923,645 4,813 640,597
-------- --------- -------- ---------
Net gain (loss) on investments............ 21,335 918,053 (8,233) 736,692
-------- --------- -------- ---------
Net increase (decrease) in net assets
resulting from operations.............. $ 20,895 $ 882,731 $ (8,544) $ 705,715
======== ========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME VALUE EQUITY
SUBACCOUNT(3) SUBACCOUNT(4)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- ------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 2,250 $ 78,487 $ 133 $ 21,109
Expenses
Mortality and expense risk charges..... 2,317 105,264 158 36,405
-------- ---------- -------- ---------
Net investment income (loss) ............. (67) (26,777) (25) (15,296)
-------- ---------- -------- ---------
Net realized gain (loss) from share
transactions........................... (20,327) 11,937 (1) 60,980
Net unrealized appreciation (depreciation)
on investment.......................... 37,389 2,209,009 2,086 424,007
-------- ---------- -------- ---------
Net gain (loss) on investments............ 17,062 2,220,946 2,085 484,987
-------- ---------- -------- ---------
Net increase (decrease) in net assets
resulting from operations.............. $ 16,995 $2,194,169 $ 2,060 $ 469,691
======== ========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
SCHAFER MID-CAP WANGER U.S. SMALL CAP
SUBACCOUNT(5) SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- ------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 243 $ 11,750 $ 387,364 $ 9,837,149
Expenses
Mortality and expense risk charges..... 553 35,187 75,167 2,323,769
---------- ----------- ---------- ------------
Net investment income (loss) ............. (310) (23,437) 312,197 7,513,380
---------- ----------- ---------- ------------
Net realized gain (loss) from share
transactions........................... 661 21,222 188,405 (809,189)
Net unrealized appreciation (depreciation)
on investment.......................... (13,017) (463,591) 244,910 5,779,426
---------- ----------- ---------- ------------
Net gain (loss) on investments............ (12,356) (442,369) 433,315 4,970,237
---------- ----------- ---------- ------------
Net increase (decrease) in net assets
resulting from operations.............. $ (12,666) $ (465,806) $ 745,512 $ 12,483,617
========== =========== ========== ============
</TABLE>
(1)From inception March 10, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively
(2)From inception April 16, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively
(3)From inception March 4, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively
(4)From inception May 21, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively
(5)From inception March 17, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively
See Notes to Financial Statements
8
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
WANGER INTERNATIONAL SMALL CAP TEMPLETON STOCK
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 31,860 $ 986,566 $ 13,812 $ 851,635
Expenses
Mortality and expense risk charges..... 26,533 1,055,298 1,339 105,870
--------- ----------- -------- ---------
Net investment income (loss).............. 5,327 (68,732) 12,473 745,765
--------- ----------- -------- ---------
Net realized gain (loss) from share
transactions........................... 52,537 (180,001) 510 (44,571)
Net unrealized appreciation (depreciation)
on investment.......................... 319,936 10,995,916 (12,159) (778,603)
--------- ----------- -------- ---------
Net gain (loss) on investments............ 372,473 10,815,915 (11,649) (823,174)
--------- ----------- -------- ---------
Net increase (decrease) in net assets
resulting from operations.............. $ 377,800 $10,747,183 $ 824 $ (77,409)
========= =========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
TEMPLETON ASSET ALLOCATION TEMPLETON INTERNATIONAL
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 7,836 $ 296,398 $ 12,407 $ 605,384
Expenses
Mortality and expense risk charges..... 1,412 66,614 2,052 119,063
--------- ----------- -------- ---------
Net investment gain (loss) ............... 6,424 229,784 10,355 486,321
--------- ----------- -------- ---------
Net realized gain (loss) from share (925) (28,165) (2,138) (108,189)
transactions...........................
Net unrealized appreciation (depreciation)
on investment.......................... 23 5,766 3,732 211,403
--------- ----------- -------- ---------
Net gain (loss) on investments............ (902) (22,399) 1,594 103,214
--------- ----------- -------- ---------
Net increase (decrease) in net assets
resulting from operations.............. $ 5,522 $ 207,385 $ 11,949 $ 589,535
========= =========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
TEMPLETON DEVELOPING MARKETS MUTUAL SHARES INVESTMENTS
SUBACCOUNT SUBACCOUNT(6)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions.......................... $ 10,743 $ 66,718 $ -- $ --
Expenses
Mortality and expense risk charges..... 4,048 33,684 -- 126
--------- ----------- -------- ---------
Net investment gain (loss) ............... 6,695 33,034 -- (126)
--------- ----------- -------- ---------
Net realized gain (loss) from share
transactions.......................... (2,611) 25,248 -- 31
Net unrealized appreciation (depreciation)
on investment.......................... (110,152) (642,722) -- 1,464
--------- ----------- -------- ---------
Net gain (loss) on investments............ (112,763) (617,474) -- 1,495
--------- ----------- -------- ---------
Net increase (decrease) in net assets
resulting from operations.............. $(106,068) $ (584,440) $ -- $ 1,369
========= =========== ======== =========
</TABLE>
(6)From inception November 11, 1998 to December 31, 1998
See Notes to Financial Statements
9
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
MONEY MARKET GROWTH
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............ $ 247,088 $ 2,624,549 $ (614,309) $ (12,041,205)
Net realized gain (loss)................ -- -- 3,571,564 55,683,813
Net unrealized appreciation (depreciation) -- -- 15,027,423 227,622,984
------------ ----------- ----------- --------------
Net increase (decrease) in net assets
resulting from operations............ 247,088 2,624,549 17,984,678 271,265,592
------------ ----------- ----------- --------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits.................... 68,647 21,470,571 714,963 40,092,431
Participant transfers................... 2,956,800 12,069,249 (406,960) (29,320,598)
Participant withdrawals................. (1,730,859) (27,564,320) (10,730,450) (174,362,625)
------------ ----------- ----------- --------------
Net increase (decrease) in net assets
resulting from participant transactions 1,294,588 5,975,500 (10,422,447) (163,590,792)
------------ ----------- ----------- --------------
Net increase (decrease) in net assets .. 1,541,676 8,600,049 7,562,231 107,674,800
NET ASSETS
Beginning of period..................... 5,013,917 69,015,561 69,350,961 1,044,987,947
------------ ----------- ----------- --------------
End of Period........................... $ 6,555,593 $77,615,610 $76,913,192 $1,152,662,747
============ =========== =========== ==============
</TABLE>
<TABLE>
<CAPTION>
MULTI-SECTOR FIXED INCOME STRATEGIC ALLOCATION
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............ $ 769,914 $ 6,791,846 $ 532,947 $ 1,751,848
Net realized gain (loss)................ (118,632) (515,160) 4,459,678 20,950,811
Net unrealized appreciation (depreciation) (1,110,475) (12,288,471) 5,942,227 27,452,482
------------ ------------ ----------- ------------
Net increase (decrease) in net assets
resulting from operations............ (459,193) (6,011,785) 10,934,852 50,155,141
------------ ------------ ----------- ------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits.................... 819,747 2,248,177 826,457 12,106,881
Participant transfers................... (4,424,733) 2,586,038 (1,122,261) (10,979,795)
Participant withdrawals................. (1,583,978) (21,639,644) (8,038,112) (44,042,568)
------------ ------------ ----------- ------------
Net increase (decrease) in net assets
resulting from participant transactions (5,188,964) (16,805,429) (8,333,916) (42,915,482)
------------ ------------ ----------- ------------
Net increase (decrease) in net assets .. (5,648,157) (22,817,214) 2,600,936 7,239,659
NET ASSETS
Beginning of period..................... 14,734,052 119,070,753 60,794,754 284,776,702
------------ ------------ ----------- ------------
End of Period........................... $ 9,085,895 $ 96,253,539 $63,395,690 $292,016,361
============ ============ =========== ============
</TABLE>
See Notes to Financial Statements
10
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............ $ (60,585) $ (1,875,398) $ 77,180 $ 2,397,609
Net realized gain (loss)................ 1,179,409 29,085,098 191,658 7,648,041
Net unrealized appreciation (depreciation) 223,504 6,491,109 575,784 21,703,276
------------ ------------- ----------- ------------
Net increase (decrease) in net assets
resulting from operations............ 1,342,328 33,700,809 844,622 31,748,926
------------ ------------- ----------- ------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits.................... 180,075 6,173,824 434,830 7,396,247
Participant transfers................... (66,262) (3,494,208) (377,269) 1,802,572
Participant withdrawals................. (833,450) (24,910,350) (614,415) (29,931,954)
------------ ------------- ----------- ------------
Net increase (decrease) in net assets
resulting from participant transactions (719,637) (22,230,734) (556,854) (20,733,135)
------------ ------------- ----------- ------------
Net increase (decrease) in net assets .. 622,691 11,470,075 287,768 11,015,791
NET ASSETS
Beginning of period..................... 5,374,399 134,940,091 5,063,975 191,631,291
------------ ------------- ----------- ------------
End of Period........................... $ 5,997,090 $ 146,410,166 $ 5,351,743 $202,647,082
============ ============= =========== ============
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE STRATEGIC THEME
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ -------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............ $ 19,661 $ 835,736 $ (6,615) $ (367,475)
Net realized gain (loss)................ (51,806) (1,012,967) 56,330 2,573,042
Net unrealized appreciation (depreciation) (142,513) (7,212,670) 219,545 9,589,335
------------ ------------- ----------- ------------
Net increase (decrease) in net assets
resulting from operations............ (174,658) (7,389,901) 269,260 11,794,902
------------ ------------- ----------- ------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits.................... 15,190 2,415,363 8,110 2,079,830
Participant transfers................... (43,201) (5,037,520) (210,732) 2,263,095
Participant withdrawals................. (138,578) (6,504,194) (131,806) (6,472,398)
------------ ------------- ----------- ------------
Net increase (decrease) in net assets
resulting from participant transactions (166,589) (9,126,351) (334,428) (2,129,473)
------------ ------------- ----------- ------------
Net increase (decrease) in net assets .. (341,247) (16,516,252) (65,168) 9,665,429
NET ASSETS
Beginning of period..................... 745,879 36,725,172 928,974 29,070,696
------------ ------------- ----------- ------------
End of Period........................... $ 404,632 $ 20,208,920 $ 863,806 $ 38,736,125
============ ============= =========== ============
</TABLE>
See Notes to Financial Statements
11
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
ABERDEEN NEW ASIA
SUBACCOUNT
VA1 VA2, VA3 & GSE
-------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss)................. $ (819) $ (48,251)
Net realized gain (loss)..................... (17,561) (280,504)
Net unrealized appreciation (depreciation)... 4,719 (38,901)
---------- ------------
Net increase (decrease) in net assets
resulting from operations................. (13,661) (367,656)
---------- ------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits......................... 1,990 451,227
Participant transfers........................ (12,883) (593,927)
Participant withdrawals...................... (7,585) (476,471)
---------- ------------
Net increase (decrease) in net assets
resulting from participant transactions... (18,478) (619,171)
---------- ------------
Net increase (decrease) in net assets ....... (32,139) (986,827)
NET ASSETS
Beginning of period.......................... 149,326 6,357,380
---------- ------------
End of Period................................ $ 117,187 $ 5,370,553
========== ============
</TABLE>
<TABLE>
<CAPTION>
ENHANCED INDEX
SUBACCOUNT(1)
VA1 VA2, VA3 & GSE SIP
----------------------------------------------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............ $ 876 $ (100,828) $ 37,035
Net realized gain (loss)................ 60,199 2,128,081 232,517
Net unrealized appreciation (depreciation) 201,367 4,645,307 326,541
---------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations............ 262,442 6,672,560 596,093
---------- ------------ -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits.................... 6,999 2,577,535 6,085,034
Participant transfers................... 648,597 12,178,064 --
Participant withdrawals................. (14,930) (19,957,443) (1,854,713)
---------- ------------ -----------
Net increase (decrease) in net assets
resulting from participant transactions 640,666 (5,201,844) 4,230,321
---------- ------------ -----------
Net increase (decrease) in net assets .. 903,108 1,470,716 4,826,414
NET ASSETS
Beginning of period..................... 611,544 24,049,996 0
---------- ------------ -----------
End of Period........................... $1,514,652 $ 25,520,712 $ 4,826,414
========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
ENGEMANN NIFTY FIFTY SENECA MID-CAP GROWTH
SUBACCOUNT(2) SUBACCOUNT(3)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............ $ (440) $ (35,322) $ (311) $ (30,977)
Net realized gain (loss)................ 607 (5,592) (13,046) 96,095
Net unrealized appreciation (depreciation) 20,728 923,645 4,813 640,597
---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations............ 20,895 882,731 (8,544) 705,715
---------- ------------ ------------ -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits.................... 31,541 3,684,848 14,780 2,940,994
Participant transfers................... 160,642 2,273,018 79,803 1,159,057
Participant withdrawals................. (14) (1,268,195) (39,138) (546,197)
---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from participant transactions 192,169 4,689,671 55,445 3,553,854
---------- ------------ ------------ -----------
Net increase (decrease) in net assets .. 213,064 5,572,402 46,901 4,259,569
NET ASSETS
Beginning of period..................... 0 0 0 0
---------- ------------ ------------ -----------
End of Period........................... $ 213,064 $ 5,572,402 $ 46,901 $ 4,259,569
========== ============ ============ ===========
</TABLE>
(1)From inception (SIP) March 2, 1998 to December 31, 1998.
(2)From inception March 10, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively.
(3)From inception April 16, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively.
See Notes to Financial Statements
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
GROWTH AND INCOME VALUE EQUITY
SUBACCOUNT(4) SUBACCOUNT(5)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................. $ (67) $ (26,777) $ (25) $ (15,296)
Net realized gain (loss)................ (20,327) 11,937 (1) 60,980
Net unrealized appreciation (depreciation)... 37,389 2,209,009 2,086 424,007
---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations................. 16,995 2,194,169 2,060 469,691
---------- ------------ ------------ -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits......................... 135,413 4,743,739 16,130 3,355,794
Participant transfers........................ 519,990 14,190,783 14,097 1,667,847
Participant withdrawals...................... (159,826) (1,580,938) -- (322,991)
---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from participant transactions 495,577 17,353,584 30,227 4,700,650
---------- ------------ ------------ -----------
Net increase (decrease) in net assets ....... 512,572 19,547,753 32,287 5,170,341
NET ASSETS
Beginning of period.......................... 0 0 0 0
---------- ------------ ------------ -----------
End of Period................................ $ 512,572 $ 19,547,753 $ 32,287 $ 5,170,341
========== ============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
SCHAFER MID-CAP WANGER U.S. SMALL CAP
SUBACCOUNT(6) SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................. $ (310) $ (23,437) $ 312,197 $ 7,513,380
Net realized gain (loss)..................... 661 21,222 188,405 (809,189)
Net unrealized appreciation (depreciation)... (13,017) (463,591) 244,910 5,779,426
---------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from operations................. (12,666) (465,806) 745,512 12,483,617
---------- ------------ ------------ -------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits......................... 10,825 2,656,058 179,028 12,527,312
Participant transfers........................ 84,673 2,056,323 1,606,641 5,179,426
Participant withdrawals...................... (14) (247,955) (1,252,289) (28,875,182)
---------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from participant transactions 95,484 4,464,426 533,380 (11,168,444)
---------- ------------ ------------ -------------
Net increase (decrease) in net assets ....... 82,818 3,998,620 1,278,892 1,315,173
NET ASSETS
Beginning of period.......................... 0 0 7,206,950 177,723,670
---------- ------------ ------------ -------------
End of Period................................ $ 82,818 $ 3,998,620 $ 8,485,842 $ 179,038,843
========== ============ ============ =============
</TABLE>
(4)From inception March 4, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively.
(5)From inception May 21, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively.
(6)From inception March 17, 1998 to December 31, 1998 and March 3, 1998 to
December 31, 1998, respectively.
See Notes to Financial Statements
13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
WANGER INTERNATIONAL SMALL CAP TEMPLETON STOCK
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- --------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................ $ 5,327 $ (68,732) $ 12,473 $ 745,765
Net realized gain (loss).................... 52,537 (180,001) 510 (44,571)
Net unrealized appreciation (depreciation).. 319,936 10,995,916 (12,159) (778,603)
---------- ------------ ----------- -----------
Net increase (decrease) in net assets
resulting from operations................ 377,800 10,747,183 824 (77,409)
---------- ------------ ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits........................ 81,399 5,249,768 10,361 1,314,215
Participant transfers....................... (372,965) (4,984,976) (3,508) 348,626
Participant withdrawals..................... (258,602) (13,091,022) (65) (1,439,674)
---------- ------------ ----------- -----------
Net increase (decrease) in net assets
resulting from participant transactions.. (550,168) (12,826,230) 6,788 223,167
---------- ------------ ----------- -----------
Net increase (decrease) in net assets ...... (172,368) (2,079,047) 7,612 145,758
NET ASSETS
Beginning of period..................... 2,576,205 80,130,708 123,468 8,328,710
---------- ------------ ----------- -----------
End of Period........................... $2,403,837 $ 78,051,661 $ 131,080 $ 8,474,468
========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
TEMPLETON ASSET ALLOCATION TEMPLETON INTERNATIONAL
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................ $ 6,424 $ 229,784 $ 10,355 $ 486,321
Net realized gain (loss).................... (925) (28,165) (2,138) (108,189)
Net unrealized appreciation (depreciation).. 23 5,766 3,732 211,403
---------- ------------ --------- -----------
Net increase (decrease) in net assets
resulting from operations................ 5,522 207,385 11,949 589,535
---------- ------------ --------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits........................ 2,881 826,820 202 1,154,317
Participant transfers....................... (18,523) 258,383 77,843 413,065
Participant withdrawals..................... (4,353) (706,919) (7,584) (1,352,102)
---------- ------------ --------- -----------
Net increase (decrease) in net assets
resulting from participant transactions.. (19,995) 378,284 70,461 215,280
---------- ------------ --------- -----------
Net increase (decrease) in net assets ...... (14,473) 585,669 82,410 804,815
NET ASSETS
Beginning of period......................... 156,759 4,577,972 139,952 7,432,335
---------- ------------ --------- -----------
End of Period............................... $ 142,286 $ 5,163,641 $ 222,362 $ 8,237,150
========== ============ ========= ===========
</TABLE>
See Notes to Financial Statements
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON DEVELOPING MARKETS MUTUAL SHARES INVESTMENTS
SUBACCOUNT SUBACCOUNT(6)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- ------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................ $ 6,695 $ 33,034 $ -- $ (126)
Net realized gain (loss).................... (2,611) 25,248 -- 31
Net unrealized appreciation (depreciation... (110,152) (642,722) -- 1,464
----------- ------------ --------- -----------
Net increase (decrease) in net assets
resulting from operations................ (106,068) (584,440) -- 1,369
----------- ------------ --------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits........................ 6,933 475,997 -- 1,816
Participant transfers....................... (8,270) 44,127 -- 125,409
Participant withdrawals..................... (2,604) (505,409) -- (2,998)
----------- ------------ --------- -----------
Net increase (decrease) in net assets
resulting from participant transactions (3,941) 14,715 -- 124,227
----------- ------------ --------- -----------
Net increase (decrease) in net assets ...... (110,009) (569,725) -- 125,596
NET ASSETS
Beginning of period......................... 485,683 2,776,968 0 0
----------- ------------ --------- -----------
End of Period............................... $ 375,674 $ 2,207,243 $ -- $ 125,596
=========== ============ ======== ===========
</TABLE>
(6)From inception November 11, 1998 to December 31, 1998
See Notes to Financial Statements
15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
MONEY MARKET GROWTH
SUBACCOUNT SUBACCOUNT
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
============= ============= ============ ==============
</TABLE>
<TABLE>
<CAPTION>
MULTI-SECTOR FIXED INCOME STRATEGIC ALLOCATION
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income........................ $ 825,575 $ 6,478,676 $ 711,688 $ 2,562,198
Net realized gain............................ 244,280 3,027,102 8,711,543 36,705,706
Net unrealized appreciation.................. 46,689 273,117 1,401,855 8,778,795
------------- ------------- ------------ --------------
Net increase in net assets resulting
from operations........................... 1,116,544 9,778,895 10,825,086 48,046,699
------------- ------------- ------------ --------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits......................... 105,706 8,961,354 1,144,584 12,806,385
Participant transfers........................ 97,090 9,514,532 (3,215,988) (13,007,386)
Participant withdrawals...................... (2,060,231) (8,597,924) (6,275,860) (22,249,083)
------------- ------------- ------------ --------------
Net increase (decrease) in net assets
resulting from participant transactions... (1,857,435) 9,877,962 (8,347,264) (22,450,084)
------------- ------------- ------------ --------------
Net increase (decrease) in net assets ....... (740,891) 19,656,857 2,477,822 25,596,615
NET ASSETS
Beginning of period.......................... 15,474,943 99,413,896 58,316,932 259,180,087
------------- ------------- ------------ --------------
End of Period................................ $ 14,734,052 $ 119,070,753 $ 60,794,754 $ 284,776,702
============= ============= ============ ==============
</TABLE>
See Notes to Financial Statements
16
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1997
(CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income........................ $ 22,682 $ 214,773 $ 101,518 $ 3,304,410
Net realized gain............................ 577,942 13,491,669 608,812 21,878,860
Net unrealized appreciation (depreciation)... (36,802) 81,967 65,158 2,886,598
------------ -------------- ------------- --------------
Net increase in net assets resulting
from operations........................... 563,822 13,788,409 775,488 28,069,868
------------ -------------- ------------- --------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits......................... 195,241 7,443,575 29,263 7,431,032
Participant transfers........................ (280,514) (3,359,763) (105,010) (3,701,822)
Participant withdrawals...................... (495,643) (10,964,815) (552,520) (16,324,265)
------------ -------------- ------------- --------------
Net decrease in net assets resulting from
participant transactions.................. (580,916) (6,881,003) (628,267) (12,595,055)
------------ -------------- ------------- --------------
Net increase (decrease) in net assets ....... (17,094) 6,907,406 147,221 15,474,813
NET ASSETS
Beginning of period.......................... 5,391,493 128,032,685 4,916,754 176,156,478
------------ -------------- ------------- --------------
End of Period................................ $ 5,374,399 $ 134,940,091 $ 5,063,975 $ 191,631,291
============ ============== ============= ==============
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE STRATEGIC THEME
SUBACCOUNT SUBACCOUNT
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............................ 18,819 1,249,826 119,345 3,690,699
Net unrealized appreciation.................. 75,320 3,671,800 15,658 123,526
------------ -------------- ------------- --------------
Net increase 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 in net assets
resulting from participant transactions 350,018 11,845,867 125,379 6,589,372
------------ -------------- ------------- --------------
Net increase 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
============ ============== ============= ==============
</TABLE>
See Notes to Financial Statements
17
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1997
(CONTINUED)
<TABLE>
<CAPTION>
ABERDEEN NEW ASIA ENHANCED INDEX
SUBACCOUNT SUBACCOUNT(1)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)................. $ 3,463 $ 170,376 $ 1,384 $ (728)
Net realized gain (loss)..................... (26,056) (109,763) 3,586 93,771
Net unrealized appreciation (depreciation)... (77,025) (3,327,944) 8,382 909,255
------------ -------------- ------------- --------------
Net increase (decrease) in net assets
resulting from operations................. (99,618) (3,267,331) 13,352 1,002,298
------------ -------------- ------------- --------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits......................... 14,600 1,539,143 -- 16,296,893
Participant transfers........................ (107,286) 396,202 617,780 6,831,680
Participant withdrawals...................... (52,465) (419,327) (19,588) (80,875)
------------ -------------- ------------- --------------
Net increase (decrease) in net assets
resulting from participant transactions (145,151) 1,516,018 598,192 23,047,698
------------ -------------- ------------- --------------
Net increase (decrease) in net assets ....... (244,769) (1,751,313) 611,544 24,049,996
NET ASSETS
Beginning of period.......................... 394,095 8,108,693 0 0
------------ -------------- ------------- --------------
End of Period................................ $ 149,326 $ 6,357,380 $ 611,544 $ 24,049,996
============ ============== ============= ==============
</TABLE>
<TABLE>
<CAPTION>
WANGER INTERNATIONAL SMALL CAP WANGER U.S. SMALL CAP
SUBACCOUNT SUBACCOUNT
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income........................ $ 40,815 $ 755,680 $ 54,891 $ 824,337
Net realized gain (loss)..................... (9,521) (186,359) 233,219 (4,456)
Net unrealized appreciation (depreciation)... (101,297) (3,451,230) 1,370,089 33,929,801
------------ -------------- ------------- --------------
Net increase (decrease) in net assets
resulting from operations................. (70,003) (2,881,909) 1,658,199 34,749,682
------------ -------------- ------------- --------------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits......................... 98,602 12,346,480 226,132 18,307,137
Participant transfers........................ 370,333 9,272,247 1,421,314 32,938,503
Participant withdrawals...................... (467,094) (4,420,824) (951,778) (6,387,812)
------------ -------------- ------------- --------------
Net increase in net assets
resulting from participant transactions... 1,841 17,197,903 695,668 44,857,828
------------ -------------- ------------- --------------
Net increase (decrease) in net assets ....... (68,162) 14,315,994 2,353,867 79,607,510
NET ASSETS
Beginning of period.......................... 2,644,367 65,814,714 4,853,083 98,116,160
------------ -------------- ------------- --------------
End of Period................................ $ 2,576,205 $ 80,130,708 $ 7,206,950 $ 177,723,670
============ ============== ============= ==============
</TABLE>
(1)From inception July 15, 1997 to December 31, 1997
See Notes to Financial Statements
18
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1997
(CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON STOCK TEMPLETON ASSET ALLOCATION
SUBACCOUNT(1) SUBACCOUNT(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.......................... 0 0 0 0
-------------- ---------------- ------------- --------------
End of Period................................ $ 123,468 $ 8,328,710 $ 156,759 $ 4,577,972
============== ================ ============= ==============
</TABLE>
<TABLE>
<CAPTION>
TEMPLETON INTERNATIONAL TEMPLETON DEVELOPING MARKETS
SUBACCOUNT(3) SUBACCOUNT(4)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
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.......................... 0 0 0 0
-------------- -------------- ------------- --------------
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
19
<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 22
Subaccounts and invests in corresponding series (the "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 including Phoenix's Savings Investment Plan ("SIP"). The
Subaccount is subdivided into three pools designated "VA1" and "VA2, VA3 & GSE."
VA2, VA3 and GSE contracts include a higher expense risk charge than the VA1
contract. SIP contracts are offered to employees of Phoenix Home Life and do not
incur mortality and expense charges.
Each Series has distinct investment objectives. The Money Market Series seeks
to provide maximum current income consistent with capital preservation and
liquidity. The Growth Series seeks to achieve intermediate and long-term growth
of capital, with income as a secondary consideration. The Multi-Sector Fixed
Income Series seeks to provide long-term total return by investing in a
diversified portfolio of high yield and high quality fixed income securities.
The Strategic Allocation Series seeks to realize as high a level of total rate
of return over an extended period of time as is considered consistent with
prudent investment risk by investing in three market segments: stocks, bonds and
money market instruments. The International Series seeks as its investment
objective a high total return consistent with reasonable risk by investing
primarily in an internationally diversified portfolio of equity securities. The
Balanced Series seeks to provide reasonable income, long-term growth and
conservation of capital. The Real Estate Series seeks to achieve capital
appreciation and income with approximately equal emphasis through investments in
real estate investment trusts and companies that operate, manage, develop or
invest in real estate. The Strategic Theme Series seeks long-term appreciation
of capital by investing in securities that the adviser believes are well
positioned to benefit from cultural, demographic, regulatory, social or
technological changes worldwide. The Aberdeen New Asia Series seeks to provide
long-term capital appreciation by investing primarily in diversified equity
securities of issuers organized and principally operating in Asia, excluding
Japan. The Enhanced Index Series seeks high total return by investing in a
broadly diversified portfolio of equity securities of large and medium
capitalization companies within market sectors reflected in the Standard &
Poor's 500 Composite Stock Price Index. The Engemann Nifty Fifty Series seeks to
achieve long-term capital appreciation investing in approximately 50 different
securities which offer the potential for long-term growth of capital. The Seneca
Mid-Cap Growth Series seeks capital appreciation primarily through investments
in equity securities of companies that have the potential for above average
market appreciation. The Growth and Income Series seeks as its investment
objective, dividend growth, current income and capital appreciation by investing
in common stocks. The Value Equity Series seeks to achieve long-term capital
appreciation and income by investing in a diversified portfolio of common stocks
which meet certain quantitative standards that indicate above average financial
soundness and intrinsic value relative to price. The Schafer Mid-Cap Series
seeks to achieve long-term capital appreciation with current income as the
secondary investment objective by investing in common stocks of established
companies having a strong financial position and a low stock market valuation at
the time of purchase which are believed to offer the possibility of increase in
value. The Wanger U.S. Small Cap Series invests in growth common stock of U.S.
companies with stock market capitalization of less than $1 billion. The Wanger
International Small Cap Series invests in securities of non-U.S. companies with
a stock market capitalization of less than $1 billion. The Templeton Stock
Series is a capital growth common stock fund. The Templeton Asset Allocation
Series invests in stocks and debt obligations of companies and governments and
money market instruments seeking high total return. The Templeton International
Series invests in stocks and debt obligations of companies and governments
outside the United States. The Templeton Developing Markets Series seeks
long-term capital appreciation by investing in equity securities of issuers in
countries having developing markets. The Mutual Shares Investments Series is a
capital appreciation fund with income as a secondary objective. Contract owners
also may direct the allocation of their investments between the Account and the
Guaranteed Interest Account.
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
provisions for related federal taxes is required.
D. DISTRIBUTIONS: Distributions are recorded on the ex-dividend date.
20
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
NOTE 3--PURCHASES AND SALES OF SHARES OF THE FUNDS
Purchases and sales of shares of the Funds for the period ended December 31,
1998 aggregated the following:
<TABLE>
<CAPTION>
VA1 VA2, VA3 & GSE
----------------------------- -----------------------------
SUBACCOUNT PURCHASES SALES PURCHASES SALES
- ---------- --------- ----- --------- -----
<S> <C> <C> <C> <C>
The Phoenix Edge Series Fund:
Money Market................... $ 11,706,247 $ 10,162,777 $ 89,385,894 $ 80,777,639
Growth......................... 5,515,303 13,652,882 63,322,316 194,819,724
Multi-Sector Fixed Income...... 2,916,018 7,252,278 23,450,096 32,767,951
Strategic Allocation........... 6,035,349 9,636,297 32,260,400 53,907,592
International.................. 1,805,196 1,555,305 32,291,138 31,255,510
Balanced....................... 1,079,909 1,373,754 18,055,838 29,218,215
Real Estate.................... 336,454 483,048 6,779,460 15,060,613
Strategic Theme................ 113,922 404,854 10,080,515 10,298,500
Aberdeen New Asia.............. 8,153 27,479 4,945,805 5,614,352
Enhanced Index................. 804,713 96,986 19,217,077 23,384,000
Engemann Nifty Fifty........... 245,787 53,924 6,746,153 2,086,578
Seneca Mid-Cap Growth.......... 104,618 49,448 5,807,640 2,280,710
Growth and Income.............. 661,416 165,504 19,303,837 1,957,937
Value Equity .................. 30,360 130 5,678,058 987,818
Schafer Mid-Cap................ 120,726 25,484 5,309,826 864,716
Wanger Advisors Trust:
Wanger U.S. Small Cap.......... 6,258,385 5,413,179 34,934,083 38,593,168
Wanger International Small Cap. 179,108 724,233 8,120,863 21,021,601
The Templeton Variable Products
Series Fund:
Stock.......................... 67,032 47,764 4,604,662 3,635,304
Asset Allocation............... 14,577 28,127 2,483,146 1,874,366
International.................. 155,171 74,285 7,569,446 6,866,486
Developing Markets............. 20,268 17,615 3,123,459 3,076,233
Mutual Shares Investment....... -- -- 127,225 2,998
</TABLE>
<TABLE>
<CAPTION>
SIP
------------------------
SUBACCOUNT PURCHASES SALES
- ---------- --------- -------
<S> <C> <C>
The Phoenix Edge Series Fund
Enhanced Index................. $ 6,355,088 $1,873,447
</TABLE>
NOTE 4--PARTICIPANT ACCUMULATION UNIT TRANSACTIONS (IN UNITS)
<TABLE>
<CAPTION>
SUBACCOUNT
--------------------------------------------------------------------------------------
MONEY MULTI-SECTOR STRATEGIC
MARKET GROWTH FIXED INCOME ALLOCATION INTERNATIONAL BALANCED
--------- --------- ------------ ------------ ------------- ----------
VA1
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of period.. 2,264,187 6,272,827 3,556,360 13,378,256 2,998,111 2,885,290
Participant deposits.................... 30,376 57,599 60,764 166,408 57,315 36,504
Participant transfers................... 1,312,370 (44,935) (927,007) (230,545) (38,341) (25,472)
Participant withdrawals................. (761,797) (881,279) (375,459) (1,649,508) (375,900) (308,617)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 2,845,136 5,404,212 2,314,658 11,664,611 2,641,185 2,587,705
=========== =========== ========== ========== =========== ===========
VA2, VA3
BIG EDGE PLUS:
Units outstanding, beginning of period.. 30,744,025 92,274,821 28,621,746 62,748,173 73,979,067 108,241,599
Participant deposits.................... 8,190,501 2,464,655 1,298,480 1,485,787 1,989,856 3,085,538
Participant transfers................... 5,711,666 (2,462,014) 113,848 (1,486,637) (1,907,070) 1,049,932
Participant withdrawals................. (11,201,946) (13,087,720) (5,670,940) (9,286,259) (10,543,850) (15,719,284)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 33,444,246 79,189,742 24,363,134 53,461,064 63,518,003 96,657,785
=========== =========== ========== ========== =========== ===========
GROUP STRATEGIC EDGE:
Units outstanding, beginning of period.. 1,281,334 4,824,485 979,042 1,658,827 2,724,451 2,493,666
Participant deposits.................... 1,550,422 848,482 310,586 586,984 533,610 957,402
Participant transfers................... 130,972 (54,628) (166,016) (6,831) (50,834) 1,715
Participant withdrawals................. (1,707,050) (1,397,802) (240,726) (339,542) (859,683) (486,950)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 1,255,678 4,220,537 882,886 1,899,438 2,347,544 2,965,833
=========== =========== ========== ========== =========== ===========
</TABLE>
21
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
NOTE 4--PARTICIPANT ACCUMULATION UNIT TRANSACTIONS (IN UNITS) (CONTINUED)
<TABLE>
<CAPTION>
SENECA
STRATEGIC ABERDEEN ENHANCED ENGEMANN MID-CAP
REAL ESTATE THEME NEW ASIA INDEX NIFTY FIFTY GROWTH
----------- --------- --------- ---------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
VA1
Units outstanding, beginning of period.. 405,294 737,262 223,679 599,607 -- --
Participant deposits.................... 5,918 5,929 -- 6,121 2,144 1,088
Participant transfers................... (38,212) (168,268) (27,693) 546,715 168,491 94,592
Participant withdrawals................. (91,164) (96,403) (10,425) (13,403) (17) (52,553)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 281,836 478,520 185,561 1,139,040 170,618 43,127
=========== =========== ========== ========== =========== ===========
VA2, VA3
BIG EDGE PLUS:
Units outstanding, beginning of period.. 18,942,144 22,414,634 9,294,722 22,455,395 -- --
Participant deposits.................... 619,920 861,105 403,717 1,298,415 2,379,892 2,320,530
Participant transfers................... (2,967,742) 627,906 (960,934) 10,704,823 2,136,840 1,184,019
Participant withdrawals................. (3,595,455) (3,344,559) (582,592) (17,259,440) (212,996) (85,327)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 12,998,867 20,559,086 8,154,913 17,199,193 4,303,736 3,419,222
=========== =========== ========== ========== =========== ===========
GROUP STRATEGIC EDGE:
Units outstanding, beginning of period.. 892,941 612,853 247,552 400,343 -- --
Participant deposits.................... 610,969 489,516 198,274 749,685 55,518 35,224
Participant transfers................... (305,919) (97,818) 31,544 575,136 207,723 96,700
Participant withdrawals................. (169,447) (93,180) (89,489) (275,134) (107,790) (16,148)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 1,028,544 911,371 387,881 1,450,030 155,451 115,776
=========== =========== ========== ========== =========== ===========
GROUP STRATEGIC EDGE (SIP):
Units outstanding, beginning of period.. -- -- -- -- -- --
Participant deposits.................... -- -- -- 583,114 -- --
Participant transfers................... -- -- -- -- -- --
Participant withdrawals................. -- -- -- (184,236) -- --
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ -- -- -- 398,878 -- --
=========== =========== ========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
WANGER
GROWTH & VALUE SCHAFER WANGER U.S. INTERNATIONAL TEMPLETON
INCOME EQUITY MID-CAP SMALL CAP SMALL CAP STOCK
----------- ---------- ----------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
VA1
Units outstanding, beginning of period.. -- -- -- 3,346,527 1,629,764 116,076
Participant deposits.................... 93,764 1,932 2,988 67,939 42,553 8,781
Participant transfers................... 506,807 29,116 93,496 816,052 (211,423) (1,477)
Participant withdrawals................. (171,511) (0) (13) (568,746) (140,577) (62)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 429,060 31,048 96,471 3,661,772 1,320,317 123,318
=========== =========== ========== ========== =========== ===========
VA2, VA3
BIG EDGE PLUS:
Units outstanding, beginning of period.. -- -- -- 80,202,670 45,612,191 7,540,946
Participant deposits.................... 3,447,726 2,470,453 2,425,855 3,592,207 1,885,533 563,759
Participant transfers................... 13,786,340 1,645,948 2,223,055 2,208,539 (2,993,043) 254,466
Participant withdrawals................. (1,422,744) (263,818) (238,760) (11,607,633) (6,302,464) (1,092,943)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 15,811,322 3,852,583 4,410,150 74,395,783 38,202,217 7,266,228
=========== =========== ========== ========== =========== ===========
GROUP STRATEGIC EDGE:
Units outstanding, beginning of period.. -- -- -- 2,866,884 1,705,716 299,731
Participant deposits.................... 502,865 150,148 103,159 1,620,537 643,612 445,554
Participant transfers................... 202,252 712,669 51,848 18,193 (68,602) 12,273
Participant withdrawals................. (120,867) (147) (5,868) (941,858) (367,430) (24,910)
----------- ----------- ---------- ---------- ----------- -----------
Units outstanding, end of period........ 584,250 862,670 149,139 3,563,756 1,913,296 732,648
=========== =========== ========== ========== =========== ===========
</TABLE>
22
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
NOTE 4--PARTICIPANT ACCUMULATION UNIT TRANSACTIONS (IN UNITS) (CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON MUTUAL
TEMPLETON ASSET TEMPLETON DEVELOPING SHARES
ALLOCATION INTERNATIONAL MARKETS INVESTMENT
---------- ------------- -------- ----------
<S> <C> <C> <C> <C>
VA1
Units outstanding, beginning of period.... 151,781 143,697 718,420 --
Participant deposits...................... 2,721 172 10,698 --
Participant transfers..................... (19,267) 75,509 (12,273) --
Participant withdrawals................... (4,086) (7,966) (5,957) --
--------- ---------- ---------- --------
Units outstanding, end of period.......... 131,149 211,412 710,888 --
========= ========== ========== +=======
VA2, VA3
BIG EDGE PLUS:
Units outstanding, beginning of period.... 4,132,959 6,548,826 3,943,166 --
Participant deposits...................... 417,174 533,360 492,314 1,842
Participant transfers..................... 154,601 403,939 390,164 124,900
Participant withdrawals................... (615,844) (1,032,124) (1,018,882) (2,955)
--------- ---------- ---------- --------
Units outstanding, end of period.......... 4,088,890 6,454,001 3,806,762 123,787
========= ========== ========== ========
GROUP STRATEGIC EDGE:
Units outstanding, beginning of period.... 120,760 358,766 223,545 --
Participant deposits...................... 318,244 411,569 284,454 --
Participant transfers..................... 75,263 (39,039) 66,915 --
Participant withdrawals................... (24,338) (76,333) (134,050) --
--------- ---------- ---------- --------
Units outstanding, end of period.......... 489,929 654,963 440,864 --
========= ========== ========== ========
</TABLE>
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 Subaccounts
designated VA1 in the daily equivalent of 0.40% on an annual basis of the
current value of the Subaccount'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 Subaccounts 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 Subaccount holding the assets of the participant, or on a pro rata basis
from two or more Subaccounts in relation to their values under the contract.
Fees for administrative services provided for the year ended December 31, 1998
aggregated $1,301,911 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 $2,394,498 for the year ended December 31, 1998.
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.
23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[PricewaterhouseCoopers 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 each of the subaccounts: Money
Market, Growth, Multi-Sector Fixed Income, Strategic Allocation, International,
Balanced, Real Estate, Strategic Theme, Aberdeen New Asia, Enhanced Index,
Engemann Nifty Fifty, Seneca Mid-Cap Growth, Growth and Income, Value Equity,
Schafer Mid-Cap, Wanger U.S. Small Cap, Wanger International Small Cap,
Templeton Stock, Templeton Asset Allocation, Templeton International, Templeton
Developing Markets and Mutual Shares Investments (constituting the Phoenix Home
Life Variable Accumulation Account, hereafter referred to as the "Account") at
December 31, 1998, 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, 1998 by
correspondence with fund custodians or transfer agents, provide a reasonable
basis for the opinion expressed above.
[PricewaterhouseCoopers Signature]
PricewaterhouseCoopers LLP
Hartford, Connecticut
February 17, 1999
24
<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.
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust
P.O. Box 351
Boston, Massachusetts 02101
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Financial Plaza
Hartford, Connecticut 06103
<PAGE>
VERSION A-2
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
MONEY MARKET SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
GROWTH SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
MULTI-SECTOR FIXED INCOME SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
STRATEGIC ALLOCATION SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
INTERNATIONAL SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
BALANCED SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
REAL ESTATE SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
STRATEGIC THEME SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
ABERDEEN NEW ASIA SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 6
ENHANCED INDEX SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 7
ENGEMANN NIFTY FIFTY SUBACCOUNT
Statement of Assets and Liabilities...... 2
Statement of Operations.................. 4
Statement of Changes in Net Assets....... 7
SENECA MID-CAP GROWTH SUBACCOUNT
Statement of Assets and Liabilities..... 2
Statement of Operations................. 4
Statement of Changes in Net Assets...... 7
GROWTH AND INCOME SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 7
VALUE EQUITY SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 7
SCHAFER MID-CAP SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 7
WANGER U.S. SMALL CAP SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 7
WANGER INTERNATIONAL SMALL CAP SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 7
TEMPLETON STOCK SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 7
TEMPLETON ASSET ALLOCATION SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 8
TEMPLE INTERNATIONAL SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 8
TEMPLETON DEVELOPING MARKETS SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 8
MUTUAL SHARES INVESTMENTS SUBACCOUNT
Statement of Assets and Liabilities..... 3
Statement of Operations................. 5
Statement of Changes in Net Assets...... 8
NOTES TO FINANCIAL STATEMENTS.............. 9
<PAGE>
This annual report for the PHOENIX HOME
LIFE VARIABLE UNIVERSAL LIFE ACCOUNT for the
period ended December 31, 1998 contains the
financial statements for the Account's single
premium variable universal life policies.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MULTI-SECTOR
MONEY MARKET GROWTH FIXED INCOME
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments at cost................................................ $ 1,646,955 $ 9,996,753 $ 1,511,524
============ ============ ============
Investment in The Phoenix Edge Series Fund, at market.............. $ 1,646,955 $ 10,618,540 $ 1,471,507
------------ ------------ ------------
Total assets.................................................... 1,646,955 10,618,540 1,471,507
LIABILITIES
Accrued expenses to related party.................................. 1,564 5,448 1,075
------------ ------------ ------------
NET ASSETS............................................................ $ 1,645,391 $ 10,613,092 $ 1,470,432
============ ============ ============
Accumulation units outstanding........................................ 1,607,822 9,415,908 1,577,941
============ ============ ============
Unit value............................................................ $ 1.023366 $ 1.127145 $ 0.931865
============ ============ ============
STRATEGIC
ALLOCATION INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
ASSETS
Investments at cost................................................ $ 1,645,111 $ 1,721,899 $ 1,235,499
============ ============ ============
Investment in The Phoenix Edge Series Fund, at market.............. $ 1,680,576 $ 1,527,717 $ 1,310,067
------------ ------------ ------------
Total assets.................................................... 1,680,576 1,527,717 1,310,067
LIABILITIES
Accrued expenses to related party.................................. 981 761 942
------------ ------------ ------------
NET ASSETS............................................................ $ 1,679,595 $ 1,526,956 $ 1,309,125
============ ============ ============
Accumulation units outstanding........................................ 1,494,785 1,504,222 1,184,769
============ ============ ============
Unit value............................................................ $ 1.123635 $ 1.015117 $ 1.104962
============ ============ ============
ABERDEEN
REAL ESTATE STRATEGIC THEME NEW ASIA
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
ASSETS
Investments at cost................................................ $ 110,028 $ 168,112 $ 19,524
=========== =========== ===========
Investment in The Phoenix Edge Series Fund, at market.............. $ 105,791 $ 200,488 $ 22,408
----------- ----------- -----------
Total assets.................................................... 105,791 200,488 22,408
LIABILITIES
Accrued expenses to related party.................................. 41 188 24
----------- ----------- -----------
NET ASSETS............................................................ $ 105,750 $ 200,300 $ 22,384
=========== =========== ===========
Accumulation units outstanding........................................ 124,594 148,220 19,252
=========== =========== ===========
Unit value............................................................ $ .848760 $ 1.351368 $ 1.162712
=========== =========== ===========
SENECA
ENHANCED ENGEMANN MID-CAP
INDEX NIFTY FIFTY GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
ASSETS
Investments at cost................................................ $ 951,260 $ 237,390 $ 195,124
=========== =========== ===========
Investment in the Phoenix Edge Series Fund, at market.............. $ 1,020,919 $ 292,932 $ 234,934
----------- ----------- -----------
Total assets.................................................... 1,020,919 292,932 234,934
LIABILITIES
Accrued expenses to related party.................................. 1,274 309 234
----------- ----------- -----------
NET ASSETS............................................................ $ 1,019,645 $ 292,623 $ 234,700
=========== =========== ===========
Accumulation units outstanding........................................ 919,987 245,270 203,326
=========== =========== ===========
Unit value............................................................ $ 1.108325 $ 1.193056 $ 1.154307
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
GROWTH SCHAFER
AND INCOME VALUE EQUITY MID-CAP
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments at cost................................................ $ 846,955 $ 137,093 $ 138,173
=========== =========== ===========
Investment in The Phoenix Edge Series Fund, at market.............. $ 926,641 $ 148,003 $ 143,809
----------- ----------- -----------
Total assets.................................................... 926,641 148,003 143,809
LIABILITIES
Accrued expenses to related party.................................. 859 156 148
----------- ----------- -----------
NET ASSETS............................................................ $ 925,782 $ 147,847 $ 143,661
=========== =========== ===========
Accumulation units outstanding........................................ 824,998 135,795 162,341
=========== =========== ===========
Unit value............................................................ $ 1.122163 $ 1.088751 $ 0.884934
=========== =========== ===========
WANGER WANGER
U.S. INTERNATIONAL TEMPLETON
SMALL CAP SMALL CAP STOCK
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
ASSETS
Investments at cost................................................ $ 1,614,567 $ 380,793 $ 63,238
============ ========== ==========
Investment in Wanger Advisors Trust, at market..................... $ 1,699,348 $ 406,117 $ --
Investment in Templeton Variable Products Series Fund, at market... -- -- 67,084
----------- ---------- -----------
Total assets.................................................... 1,699,348 406,117 67,084
LIABILITIES
Accrued expenses to related party.................................. 1,348 325 76
----------- ---------- -----------
NET ASSETS............................................................ $ 1,698,000 $ 405,792 $ 67,008
============ ========== ==========
Accumulation units outstanding........................................ 1,824,621 381,007 74,558
============ ========== ==========
Unit value............................................................ $ 0.931043 $ 1.064969 $ 0.898644
============ ========== ==========
TEMPLETON
ASSET TEMPLETON
ALLOCATION INTERNATIONAL
SUBACCOUNT SUBACCOUNT
---------- ----------
ASSETS
Investments at cost $ 46,250 $ 161,830
=========== ===========
Investment in Templeton Variable Products Series Fund, at market... $ 48,391 $ 169,841
----------- -----------
Total assets.................................................... 48,391 169,841
LIABILITIES
Accrued expenses to related party.................................. 56 170
----------- -----------
NET ASSETS............................................................ $ 48,335 $ 169,671
=========== ===========
Accumulation units outstanding........................................ 48,239 181,415
=========== ===========
Unit value............................................................ $ 1.002002 $ .935264
=========== ===========
TEMPLETON
DEVELOPING MUTUAL SHARES
MARKETS INVESTMENTS
SUBACCOUNT SUBACCOUNT
---------- ----------
ASSETS
Investments at cost $ 22,456 $ 25,000
=========== ===========
Investment in Templeton Variable Products Series Fund, at market... $ 25,467 $ 25,850
----------- -----------
Total assets.................................................... 25,467 25,850
LIABILITIES
Accrued expenses to related party.................................. 26 16
----------- -----------
NET ASSETS............................................................ $ 25,441 $ 25,834
=========== ===========
Accumulation units outstanding........................................ 21,521 25,000
=========== ===========
Unit value............................................................ $ 1.182161 $ 1.033360
=========== ===========
</TABLE>
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
MULTI-SECTOR
MONEY MARKET GROWTH FIXED INCOME
SUBACCOUNT(2) SUBACCOUNT(2) SUBACCOUNT(3)
------------- ------------- -------------
<S> <C> <C> <C>
Investment income
Distributions.................................................... $ 20,105 $ 90 $ 35,725
Expenses
Mortality and expense risk charges............................... 5,465 12,252 2,781
---------- ---------- ----------
Net investment income (loss)........................................ 14,640 (12,162) 32,944
---------- ---------- ----------
Net realized gain (loss) from share transactions.................... -- (28) 8
Net realized gain distribution from Fund............................ -- 103,882 272
Net unrealized appreciation (depreciation) on investment............ -- 621,787 (40,017)
---------- ---------- ----------
Net gain (loss) on investments...................................... -- 725,641 (39,737)
---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ 14,640 $ 713,479 $ (6,793)
========== ========== ==========
STRATEGIC
ALLOCATION INTERNATIONAL BALANCED
SUBACCOUNT(5) SUBACCOUNT(9) SUBACCOUNT(6)
------------- ------------- -------------
Investment income
Distributions.................................................... $ 8,283 $ -- $ 8,516
Expenses
Mortality and expense risk charges............................... 2,084 1,699 2,390
---------- ---------- ----------
Net investment income (loss)........................................ 6,199 (1,699) 6,126
---------- ---------- ----------
Net realized gain (loss) from share transactions.................... 17 (66) (25)
Net realized gain distribution from Fund............................ 53,805 241,742 1,090
Net unrealized appreciation (depreciation) on investment............ 35,465 (194,182) 74,568
---------- ---------- ----------
Net gain (loss) on investments...................................... 89,287 47,494 75,633
---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ 95,486 $ 45,795 $ 81,759
========== ========== ==========
ABERDEEN
REAL ESTATE STRATEGIC THEME NEW ASIA
SUBACCOUNT(7) SUBACCOUNT(8) SUBACCOUNT(8)
------------- ------------- -------------
Investment income
Distributions.................................................... $ 2,891 $ $ 93
--
Expenses
Mortality and expense risk charges............................... 216 633 98
---------- ---------- ----------
Net investment income (loss)........................................ 2,675 (633) (5)
---------- ---------- ----------
Net realized gain (loss) from share transactions.................... (375) (5,033) 42
Net realized gain distribution from Fund............................ 4 10,713 --
Net unrealized appreciation (depreciation) on investment............ (4,237) 32,376 2,884
---------- ---------- ----------
Net gain (loss) on investments...................................... (4,608) 38,056 2,926
---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ (1,933) $ 37,423 $ 2,921
=========== ========== =========
SENECA
ENHANCED ENGEMANN MID-CAP
INDEX NIFTY FIFTY GROWTH
SUBACCOUNT(1) SUBACCOUNT(4) SUBACCOUNT(4)
------------- ------------- -------------
Investment income
Distributions.................................................... $ 5,699 $ 116 $ 193
Expenses
Mortality and expense risk charges............................... 3,304 1,004 812
---------- ---------- ----------
Net investment income (loss)........................................ 2,395 (888) (619)
---------- ---------- ----------
Net realized gain (loss) from share transactions.................... (996) 30 (19)
Net realized gain (loss) distribution from Fund..................... 40,541 -- --
Net unrealized appreciation (depreciation) on investment............ 69,659 55,542 39,810
---------- ---------- ----------
Net gain (loss) on investments...................................... 109,204 55,572 39,791
---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ 111,599 $ 54,684 $ 39,172
========== ========== ==========
(1) From inception May 13, 1998 to December 31, 1998 (6) From inception June 3, 1998 to December 31, 1998
(2) From inception May 14, 1998 to December 31, 1998 (7) From inception June 9, 1998 to December 31, 1998
(3) From inception May 15, 1998 to December 31, 1998 (8) From inception June 16, 1998 to December 31, 1998
(4) From inception May 28, 1998 to December 31, 1998 (9) From inception June 17, 1998 to December 31, 1998
(5) From inception June 2, 1998 to December 31, 1998
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
GROWTH SCHAFER
AND INCOME VALUE EQUITY MID-CAP
SUBACCOUNT(4) SUBACCOUNT(8) SUBACCOUNT(4)
------------- ------------- -------------
<S> <C> <C> <C>
Investment income
Distributions.................................................... $ 3,095 $ 548 $ 422
Expenses
Mortality and expense risk charges............................... 2,963 484 610
---------- ---------- ----------
Net investment income (loss)........................................ 132 64 (188)
---------- ---------- ----------
Net realized gain (loss) from share transactions.................... 70 212 (4)
Net realized gain distribution from Fund............................ -- -- --
Net unrealized appreciation (depreciation) on investment............ 79,686 10,910 5,636
---------- ---------- ----------
Net gain (loss) on investments...................................... 79,756 11,122 5,632
---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ 79,888 $ 11,186 $ 5,444
=========== =========== ==========
WANGER WANGER
U.S. INTERNATIONAL TEMPLETON
SMALL CAP SMALL CAP STOCK
SUBACCOUNT(3) SUBACCOUNT(9) SUBACCOUNT(5)
------------- ------------- -------------
Investment income
Distributions.................................................... $ -- $ -- $ --
Expenses
Mortality and expense risk charges............................... 4,490 975 (290)
---------- ---------- ----------
Net investment income (loss)........................................ (4,490) (975) (290)
---------- ---------- ----------
Net realized gain (loss) from share transactions.................... (196) 245 1
Net realized gain distribution from Fund............................ -- -- --
Net unrealized appreciation (depreciation) on investment............ 84,781 25,324 3,846
---------- ---------- ----------
Net gain (loss) on investments...................................... 84,585 25,569 3,847
---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ 80,095 $ 24,594 $ 3,557
=========== ========== ==========
TEMPLETON
ASSET TEMPLETON
ALLOCATION INTERNATIONAL
SUBACCOUNT(8) SUBACCOUNT(4)
------------- -------------
Investment income
Distributions.................................................... $ -- $ --
Expenses
Mortality and expense risk charges............................... 243 606
---------- ----------
Net investment income (loss)........................................ (243) (606)
---------- ----------
Net realized gain (loss) from share transactions.................... (12) (204)
Net realized gain distribution from Fund............................ -- --
Net unrealized appreciation (depreciation) on investment............ 2,141 8,011
---------- ----------
Net gain (loss) on investments...................................... 2,129 7,807
---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ 1,886 $ 7,201
========== ==========
TEMPLETON
DEVELOPING MUTUAL SHARES
MARKETS INVESTMENTS
SUBACCOUNT(10) SUBACCOUNT(11)
-------------- --------------
Investment income
Distributions.................................................... $ -- $ --
Expenses
Mortality and expense risk charges............................... 84 16
---------- ----------
Net investment income (loss)........................................ (84) (16)
---------- ----------
Net realized gain (loss) from share transactions.................... (24) --
Net realized gain distribution from Fund............................ -- --
Net unrealized appreciation (depreciation) on investment............ 3,011 850
---------- ----------
Net gain (loss) on investments...................................... 2,987 850
---------- ----------
Net increase (decrease) in net assets resulting from operations..... $ 2,903 $ 834
========== ==========
(3) From inception May 15, 1998 to December 31, 1998 (9) From inception June 17, 1998 to December 31, 1998
(4) From inception May 28, 1998 to December 31, 1998 (10) From inception August 18, 1998 to December 31, 1998
(5) From inception June 2, 1998 to December 31, 1998 (11) From inception December 11, 1998 to December 31, 1998
(8) From inception June 16, 1998 to December 31, 1998
</TABLE>
See Notes to Financial Statements
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
MULTI-SECTOR
MONEY MARKET GROWTH FIXED INCOME
SUBACCOUNT(2) SUBACCOUNT(2) SUBACCOUNT(3)
------------- ------------- -------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..................................... $ 14,640 $ (12,162) $ 32,944
Net realized gain (loss)......................................... -- 103,854 280
Net unrealized appreciation (depreciation)....................... -- 621,787 (40,017)
----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations.. 14,640 713,479 (6,793)
----------- ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 2,543,980 9,768,376 1,343,432
Participant transfers............................................ (865,293) 190,527 134,447
Participant withdrawals.......................................... (47,936) (59,290) (654)
----------- ----------- -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 1,630,751 9,899,613 1,477,225
----------- ----------- -----------
Net increase (decrease) in net assets............................ 1,645,391 10,613,092 1,470,432
NET ASSETS
Beginning of period.............................................. 0 0 0
----------- ----------- -----------
End of period.................................................... $ 1,645,391 $10,613,092 $ 1,470,432
=========== =========== ===========
STRATEGIC
ALLOCATION INTERNATIONAL BALANCED
SUBACCOUNT(5) SUBACCOUNT(9) SUBACCOUNT(6)
------------- ------------- -------------
FROM OPERATIONS
Net investment income (loss)..................................... $ 6,199 $ (1,699) $ 6,126
Net realized gain (loss)......................................... 53,822 241,676 1,065
Net unrealized appreciation (depreciation)....................... 35,465 (194,182) 74,568
----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations.. 95,486 45,795 81,759
----------- ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 1,500,673 1,468,191 1,184,410
Participant transfers............................................ 84,868 19,076 60,238
Participant withdrawals.......................................... (1,432) (6,106) (17,282)
----------- ----------- -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 1,584,109 1,481,161 1,227,366
----------- ----------- -----------
Net increase (decrease) in net assets............................ 1,679,595 1,526,956 1,309,125
NET ASSETS
Beginning of period.............................................. 0 0 0
----------- ----------- -----------
End of period.................................................... $ 1,679,595 $ 1,526,956 $ 1,309,125
=========== =========== ===========
ABERDEEN
REAL ESTATE STRATEGIC THEME NEW ASIA
SUBACCOUNT(7) SUBACCOUNT(8) SUBACCOUNT(8)
------------- ------------- -------------
FROM OPERATIONS
Net investment income (loss)..................................... $ 2,675 $ (633) $ (5)
Net realized gain (loss)......................................... (371) 5,680 42
Net unrealized appreciation (depreciation)....................... (4,237) 32,376 2,884
----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations.. (1,933) 37,423 2,921
----------- ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 103,404 182,463 20,743
Participant transfers............................................ 4,323 (19,017) 250
Participant withdrawals.......................................... (44) (569) (1,530)
Net increase (decrease) in net assets resulting from participant ----------- ----------- -----------
transactions.................................................. 107,683 162,877 19,463
----------- ----------- -----------
Net increase (decrease) in net assets............................ 105,750 200,300 22,384
NET ASSETS
Beginning of period.............................................. 0 0 0
----------- ----------- -----------
End of period.................................................... $ 105,750 $ 200,300 $ 22,384
=========== =========== ===========
(2) From inception May 14, 1998 to December 31, 1998 (7) From inception June 9, 1998 to December 31, 1998
(3) From inception May 15, 1998 to December 31, 1998 (8) From inception June 16, 1998 to December 31, 1998
(5) From inception June 2, 1998 to December 31, 1998 (9) From inception June 17, 1998 to December 31, 1998
(6) From inception June 3, 1998 to December 31, 1998
</TABLE>
See Notes to Financial Statements
6
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
SENECA
ENHANCED ENGEMANN MID-CAP
INDEX NIFTY FIFTY GROWTH
SUBACCOUNT(1) SUBACCOUNT(4) SUBACCOUNT(4)
------------- ------------- -------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..................................... $ 2,395 $ (888) $ (619)
Net realized gain (loss)......................................... 39,545 30 (19)
Net unrealized appreciation (depreciation)....................... 69,659 55,542 39,810
----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations.. 111,599 54,684 39,172
----------- ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 862,473 237,816 188,189
Participant transfers............................................ 74,779 6,755 12,830
Participant withdrawals.......................................... (29,206) (6,632) (5,491)
----------- ----------- -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 908,046 237,939 195,528
----------- ----------- -----------
Net increase (decrease) in net assets............................ 1,019,645 292,623 234,700
NET ASSETS
Beginning of period.............................................. 0 0 0
----------- ----------- -----------
End of period.................................................... $ 1,019,645 $ 292,623 $ 234,700
=========== =========== ===========
GROWTH SCHAFER
AND INCOME VALUE EQUITY MID-CAP
SUBACCOUNT(4) SUBACCOUNT(8) SUBACCOUNT(4)
------------- ------------- -------------
FROM OPERATIONS
Net investment income (loss)..................................... $ 132 $ 64 $ (188)
Net realized gain (loss)......................................... 70 212 (4)
Net unrealized appreciation (depreciation)....................... 79,686 10,910 5,636
----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations.. 79,888 11,186 5,444
----------- ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 745,117 133,027 122,222
Participant transfers............................................ 120,825 10,661 17,285
Participant withdrawals.......................................... (20,048) (7,027) (1,290)
----------- ----------- -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 845,894 136,661 138,217
----------- ----------- -----------
Net increase (decrease) in net assets............................ 925,782 147,847 143,661
NET ASSETS
Beginning of period.............................................. 0 0 0
----------- ----------- -----------
End of period.................................................... $ 925,782 $ 147,847 $ 143,661
=========== =========== ===========
WANGER WANGER
U.S. INTERNATIONAL TEMPLETON
SMALL CAP SMALL CAP STOCK
SUBACCOUNT(3) SUBACCOUNT(9) SUBACCOUNT(5)
------------- ------------- -------------
FROM OPERATIONS
Net investment income (loss)..................................... $ (4,490) $ (975) $ (290)
Net realized gain (loss)......................................... (196) 245 1
Net unrealized appreciation (depreciation)....................... 84,781 25,324 3,846
----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations.. 80,095 24,594 3,557
----------- ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 1,570,924 363,290 56,849
Participant transfers............................................ 60,617 26,170 12,674
Participant withdrawals.......................................... (13,636) (8,262) (6,072)
Net increase (decrease) in net assets resulting from participant ----------- ----------- -----------
transactions.................................................. 1,617,905 381,198 63,451
----------- ----------- -----------
Net increase in (decrease) net assets............................ 1,698,000 405,792 67,008
NET ASSETS
Beginning of period.............................................. 0 0 0
----------- ----------- -----------
End of period.................................................... $ 1,698,000 $ 405,792 $ 67,008
=========== =========== ===========
(1) From inception May 13, 1998 to December 31, 1998 (5) From inception June 2, 1998 to December 31, 1998
(3) From inception May 15, 1998 to December 31, 1998 (8) From inception June 16, 1998 to December 31, 1998
(4) From inception May 28, 1998 to December 31, 1998 (9) From inception June 17, 1998 to December 31, 1998
</TABLE>
See Notes to Financial Statements
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON
ASSET TEMPLETON
ALLOCATION INTERNATIONAL
SUBACCOUNT(8) SUBACCOUNT(4)
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss)..................................... $ (243) $ (606)
Net realized gain (loss)......................................... (12) (204)
Net unrealized appreciation (depreciation)....................... 2,141 8,011
----------- -----------
Net increase (decrease) in net assets resulting from operations.. 1,886 7,201
----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 39,635 151,455
Participant transfers............................................ 7,203 14,400
Participant withdrawals.......................................... (389) (3,385)
----------- -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 46,449 162,470
----------- -----------
Net increase in (decrease) net assets............................ 48,335 169,671
NET ASSETS
Beginning of period.............................................. 0 0
----------- -----------
End of period.................................................... $ 48,335 $ 169,671
=========== ===========
TEMPLETON
DEVELOPING MUTUAL SHARES
MARKETS INVESTMENTS
SUBACCOUNT(10) SUBACCOUNT(11)
-------------- --------------
FROM OPERATIONS
Net investment income (loss)..................................... $ (84) $ (16)
Net realized gain (loss)......................................... (24) --
Net unrealized appreciation (depreciation)....................... 3,011 850
----------- -----------
Net increase (decrease) in net assets resulting from operations.. 2,903 834
----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 24,013 25,000
Participant transfers............................................ 1,201 --
Participant withdrawals.......................................... (2,676) --
----------- -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 22,538 25,000
----------- -----------
Net increase in (decrease) net assets............................ 25,441 25,834
NET ASSETS
Beginning of period.............................................. 0 0
----------- -----------
End of period.................................................... $ 25,441 $ 25,834
=========== ===========
(4) From inception May 28, 1998 to December 31, 1998 (10) From inception August 18, 1998 to December 31, 1998
(8) From inception June 16, 1998 to December 31, 1998 (11) From inception December 11, 1998 to December 31, 1998
</TABLE>
See Notes to Financial Statements
8
<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 registered as a unit investment trust under the Investment
Company Act of 1940, as amended. The Account was established June 21, 1982 and
currently consists of 22 Subaccounts, that invest in a corresponding series (the
"Series"), of The Phoenix Edge Series Fund, Wanger Advisors Trust and the
Templeton Variable Products Series Fund (the "Funds").
Each Series has distinct investment objectives. The Money Market Series seeks
to provide maximum current income consistent with capital preservation and
liquidity. The Growth Series seeks to achieve intermediate and long-term growth
of capital, with income as a secondary consideration. The Multi-Sector Fixed
Income Series seeks to provide long-term total return by investing in a
diversified portfolio of high yield and high quality fixed income securities.
The Strategic Allocation Series seeks to realize as high a level of total rate
of return over an extended period of time as is considered consistent with
prudent investment risk by investing in three market segments: stocks, bonds and
money market instruments. The International Series seeks as its investment
objective a high total return consistent with reasonable risk by investing
primarily in an internationally diversified portfolio of equity securities. The
Balanced Series seeks to provide reasonable income, long-term growth and
conservation of capital. The Real Estate Series seeks to achieve capital
appreciation and income with approximately equal emphasis through investments in
real estate investment trusts and companies that operate, manage, develop or
invest in real estate. The Strategic Theme Series seeks long-term appreciation
of capital by investing in securities that the adviser believes are well
positioned to benefit from cultural, demographic, regulatory, social or
technological changes worldwide. The Aberdeen New Asia Series seeks to provide
long-term capital appreciation by investing primarily in diversified equity
securities of issuers organized and principally operating in Asia, excluding
Japan. The Enhanced Index Series seeks high total return by investing in a
broadly diversified portfolio of equity securities of large and medium
capitalization companies within market sectors reflected in the Standard &
Poor's 500 Composite Stock Price Index. The Engemann Nifty Fifty Series seeks to
achieve long-term capital appreciation investing in approximately 50 different
securities which offer the potential for long-term growth of capital. The Seneca
Mid-Cap Growth Series seeks capital appreciation primarily through investments
in equity securities of companies that have the potential for above average
market appreciation. The Growth and Income Series seeks as its investment
objective, dividend growth, current income and capital appreciation by investing
in common stocks. The Value Equity Series seeks to achieve long-term capital
appreciation and income by investing in a diversified portfolio of common stocks
which meet certain quantitative standards that indicate above average financial
soundness and intrinsic value relative to price. The Schafer Mid-Cap Series
seeks to achieve long-term capital appreciation with current income as the
secondary investment objective by investing in common stocks of established
companies having a strong financial position and a low stock market valuation at
the time of purchase which are believed to offer the possibility of increase in
value. The Wanger U.S. Small Cap Series invests in growth common stock of U.S.
companies with stock market capitalization of less than $1 billion. The Wanger
International Small Cap Series invests in securities of non-U.S. companies with
a stock market capitalization of less than $1 billion. The Templeton Stock
Series is a capital growth common stock fund. The Templeton Asset Allocation
Series invests in stocks and debt obligations of companies and governments and
money market instruments seeking high total return. The Templeton International
Series invests in stocks and debt obligations of companies and governments
outside the United States. The Templeton Developing Markets Series seeks
long-term capital appreciation by investing in equity securities of issuers in
countries having developing markets. The Mutual Shares Investments Series is a
capital appreciation fund with income as a secondary objective. Additionally,
policyowners also may direct the allocation of their investments between the
Account and the Guaranteed Interest Account of the general account of Phoenix.
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.
9
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
NOTE 3--PURCHASES AND SALES OF SHARES OF THE FUNDS
Purchases and sales of shares of the Funds for the period ended December 31,
1998 aggregated the following:
<TABLE>
<CAPTION>
SUBACCOUNT PURCHASES SALES
- ---------- --------- -----
<S> <C> <C>
The Phoenix Edge Series Fund:
Money Market................................................................... $ 2,479,887 $832,932
Growth......................................................................... 10,017,536 20,755
Multi-Sector Fixed Income...................................................... 1,518,727 7,211
Strategic Allocation........................................................... 1,646,510 1,416
International.................................................................. 1,726,627 4,662
Balanced....................................................................... 1,250,690 15,166
Real Estate.................................................................... 117,903 7,500
Strategic Theme................................................................ 205,920 32,775
Aberdeen New Asia.............................................................. 21,239 1,757
Enhanced Index................................................................. 990,252 37,996
Engemann Nifty Fifty........................................................... 245,801 8,441
Seneca Mid-Cap Growth.......................................................... 200,902 5,759
Growth and Income.............................................................. 867,487 20,602
Value Equity .................................................................. 147,276 10,395
Schafer Mid-Cap................................................................ 138,624 447
Wanger Advisors Trust:
U.S. Small Cap................................................................. 1,653,845 39,082
International Small Cap........................................................ 403,372 22,824
The Templeton Variable Products Series Fund:
Stock ......................................................................... 69,471 6,234
Asset Allocation............................................................... 46,838 576
International ................................................................. 176,260 14,226
Developing Markets ............................................................ 25,203 2,723
Mutual Shares Investments ..................................................... 25,000 --
</TABLE>
NOTE 4--PARTICIPANT ACCUMULATION UNIT TRANSACTIONS (IN UNITS)
<TABLE>
<CAPTION>
SUBACCOUNT
--------------------------------------------------------------------------------------
MONEY MULTI-SECTOR STRATEGIC
MARKET GROWTH FIXED INCOME ALLOCATION INTERNATIONAL BALANCED
------ ------ ------------ ---------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of period 0 0 0 0 0 0
Participant deposits................. 2,504,771 9,247,699 1,419,852 1,414,097 1,490,191 1,145,069
Participant transfers................ (849,619) 184,474 162,939 82,089 19,663 55,730
Participant withdrawals.............. (47,330) (16,265) (4,850) (1,401) (5,632) (16,030)
--------- --------- --------- --------- --------- ---------
Units outstanding, end of period..... 1,607,822 9,415,908 1,577,941 1,494,785 1,504,222 1,184,769
========= ========= ========= ========= ========= =========
SENECA
REAL STRATEGIC ABERDEEN ENHANCED ENGEMANN MID-CAP
ESTATE THEME NEW ASIA INDEX NIFTY FIFTY GROWTH
------ ----- -------- ----- ----------- ------
Units outstanding, beginning of period 0 0 0 0 0 0
Participant deposits................. 119,599 170,400 20,350 879,569 244,619 194,781
Participant transfers................ 5,044 (21,648) 242 71,903 6,800 13,847
Participant withdrawals.............. (49) (532) (1,340) (31,485) (6,149) (5,302)
--------- --------- --------- --------- --------- ---------
Units outstanding, end of period..... 124,594 148,220 19,252 919,987 245,270 203,326
========= ========= ========= ========= ========= =========
WANGER WANGER
GROWTH AND VALUE SCHAFER U.S. INTERNATIONAL TEMPLETON
INCOME EQUITY MID-CAP SMALL CAP SMALL CAP STOCK
------ ------ ------- --------- --------- -----
Units outstanding, beginning of period 0 0 0 0 0 0
Participant deposits................. 727,478 131,100 142,370 1,774,179 363,235 66,799
Participant transfers................ 116,877 11,402 21,532 65,217 25,800 13,980
Participant withdrawals.............. (19,357) (6,707) (1,561) (14,775) (8,028) (6,221)
--------- --------- --------- --------- --------- ---------
Units outstanding, end of period..... 824,998 135,795 162,341 1,824,621 381,007 74,558
========= ========= ========= ========= ========= =========
TEMPLETON TEMPLETON MUTUAL
ASSET TEMPLETON DEVELOPING SHARES
ALLOCATION INTERNATIONAL MARKETS INVESTMENTS
---------- ------------- ------- -----------
Units outstanding, beginning of period 0 0 0 0
Participant deposits................. 40,941 168,795 22,807 25,000
Participant transfers................ 7,750 16,356 1,047 --
Participant withdrawals.............. (452) (3,736) (2,333) --
--------- --------- --------- ---------
Units outstanding, end of period..... 48,239 181,415 21,521 25,000
========= ========= ========= =========
</TABLE>
10
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
NOTE 5--INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
Phoenix and its indirect affiliate, Phoenix Equity Planning Corporation, a
registered broker/dealer in securities, provide all services to the Account.
As compensation for administrative services provided to the Account, Phoenix
additionally receives $35 per year from each contract, which is deducted from
the Subaccount holding the assets of the participant, or on a pro-rata basis
from two or more Subaccounts in relation to their values under the contract.
Such costs aggregated $35 during the period ended December 31, 1998.
Phoenix Equity Planning Corporation is the principal underwriter and
distributor for the Account. Phoenix Equity Planning Corporation is reimbursed
for its distribution and underwriting expenses by Phoenix.
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 proceeds and are paid to Phoenix as reimbursement for services provided.
Contingent deferred sales charges deducted and paid to Phoenix aggregated $34
for the period ended December 31, 1998.
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 the deductions for such expenses. In return for the
assumption of these mortality and expense risks, Phoenix charges each Subaccount
the daily equivalent of 0.40%, 0.85% and 0.125% on an annual basis for
mortality, expense risks and daily administrative fees, respectively.
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 universal life contract, other than a contract issued in
connection with certain types of employee benefit plans, will not be treated as
a universal life 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 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.
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[PricewaterhouseCoopers 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 each of the subaccounts: Money
Market, Growth, Multi-Sector Fixed Income, Strategic Allocation, International,
Balanced, Real Estate, Strategic Theme, Aberdeen New Asia, Enhanced Index,
Engemann Nifty Fifty, Seneca Mid-Cap Growth, Growth and Income, Value Equity,
Schafer Mid-Cap, Wanger U.S. Small Cap, Wanger International Small Cap,
Templeton Stock, Templeton Asset Allocation, Templeton International, Templeton
Developing Markets and Mutual Shares Investments (constituting the Phoenix Home
Life Variable Accumulation Account, hereafter referred to as the "Account") at
December 31, 1998, and the results of each of their operations and the changes
in each of their net assets for the period then ended, 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 audit. We conducted our audit
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
audit, which included confirmation of investments at December 31, 1998 by
correspondence with fund custodians or transfer agents, provides a reasonable
basis for the opinion expressed above.
/S/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
February 17, 1999
12
<PAGE>
PHOENIX HOME LIFE
VARIABLE UNIVERSAL LIFE 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.
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust
P.O. Box 351
Boston, Massachusetts 02101
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Financial Plaza
Hartford, Connecticut 06103
