Phoenix Home Life
The Phoenix Edge(SM)
Annual Reports for:
Phoenix Home Life Variable
Universal Life Account
The Phoenix Edge Series Fund
December 31, 1995
<PAGE>
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
Money Market Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 6
Growth Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 6
Bond Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 6
Total Return Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 6
International Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 6
Balanced Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 6
Notes to Financial Statements 7
THE PHOENIX EDGE SERIES FUND
Money Market Series
Schedule of Investments 2-2
Statement of Assets and Liabilities 2-4
Statement of Operations 2-4
Statement of Changes in Net Assets 2-5
Financial Highlights 2-5
Growth Series
Schedule of Investments 2-7
Statement of Assets and Liabilities 2-9
Statement of Operations 2-9
Statement of Changes in Net Assets 2-10
Financial Highlights 2-10
Bond Series
Schedule of Investments 2-12
Statement of Assets and Liabilities 2-14
Statement of Operations 2-14
Statement of Changes in Net Assets 2-15
Financial Highlights 2-15
Total Return Series
Schedule of Investments 2-17
Statement of Assets and Liabilities 2-19
Statement of Operations 2-19
Statement of Changes in Net Assets 2-20
Financial Highlights 2-20
International Series
Schedule of Investments 2-22
Statement of Assets and Liabilities 2-24
Statement of Operations 2-24
Statement of Changes in Net Assets 2-25
Financial Highlights 2-25
Balanced Series
Schedule of Investments 2-27
Statement of Assets and Liabilities 2-30
Statement of Operations 2-30
Statement of Changes in Net Assets 2-31
Financial Highlights 2-31
Real Estate Series
Schedule of Investments 2-33
Statement of Assets and Liabilities 2-34
Statement of Operations 2-34
Statement of Changes in Net Assets 2-35
Financial Highlights 2-35
Notes to Financial Statements 2-36
<PAGE>
This annual report for the Phoenix Home
Life Variable Universal Life Account for the
year ended December 31, 1995, contains the
financial statements for the Account's single
premium variable universal life policies. This
report also contains a list of portfolio holdings,
management's discussion of performance and
investment strategy and financial statements
for each of the mutual funds that comprise the
Phoenix Edge Series Fund.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
-------------- -------------- ----------------
<S> <C> <C> <C>
Assets
Investments at cost $1,769,260 $20,181,953 $2,698,794
============ ============ ==============
Investment in The Phoenix Edge
Series Fund, at market $1,769,260 $24,620,542 $2,846,871
------------ ------------ --------------
Total assets 1,769,260 24,620,542 2,846,871
Liabilities
Accrued expenses to related party 163 9,651 1,150
------------ ------------ --------------
Net assets $1,769,097 $24,610,891 $2,845,721
============ ============ ==============
Accumulation units outstanding 1,110,073 7,657,646 1,370,166
============ ============ ==============
Unit value $1.593676 $3.213898 $2.076917
============ ============ ==============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
------------ -------------- ----------------
<S> <C> <C> <C>
Assets
Investments at cost $13,757,873 $ 930,322 $301,762
========== ============ ==============
Investment in The Phoenix Edge Series
Fund, at market $14,665,486 $1,150,047 $353,926
---------- ------------ --------------
Total assets 14,665,486 1,150,047 353,926
Liabilities
Accrued expenses to related party 5,776 458 139
---------- ------------ --------------
Net assets $14,659,710 $1,149,589 $353,787
========== ============ ==============
Accumulation units outstanding 6,611,709 815,737 254,460
========== ============ ==============
Unit value $2.217235 $1.409264 $1.390344
========== ============ ==============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
-------------- -------------- ----------------
<S> <C> <C> <C>
Investment income
Distributions $36,626 $ 240,206 $197,941
Expenses
Mortality and expense risk charges 3,264 108,605 11,737
------------ ------------ --------------
Net investment income 33,362 131,601 186,204
------------ ------------ --------------
Net realized gain from share transactions -- 3,968 1,620
Net realized gain distribution from Fund -- 2,615,843 --
Net unrealized appreciation on investment -- 2,956,232 301,487
------------ ------------ --------------
Net gain on investments -- 5,576,043 303,107
------------ ------------ --------------
Net increase in net assets resulting from operations $33,362 $5,707,644 $489,311
============ ============ ==============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- -------------- ----------------
<S> <C> <C> <C>
Investment income
Distributions $ 447,305 $ 3,996 $11,566
Expenses
Mortality and expense risk charges 68,665 6,038 1,655
------------ ------------ --------------
Net investment income (loss) 378,640 (2,042) 9,911
------------ ------------ --------------
Net realized gain (loss) from share transactions 9,694 (22,922) 151
Net realized gain distribution from Fund 889,028 23,045 7,021
Net unrealized appreciation on investment 935,547 97,577 50,815
------------ ------------ --------------
Net gain on investments 1,834,269 97,700 57,987
------------ ------------ --------------
Net increase in net assets resulting from operations $2,212,909 $ 95,658 $67,898
============ ============ ==============
</TABLE>
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
------------ ------------ --------------
<S> <C> <C> <C>
From operations
Net investment income $ 33,362 $ 131,601 $ 186,204
Net realized gain -- 2,619,811 1,620
Net unrealized appreciation -- 2,956,232 301,487
---------- ---------- ------------
Net increase in net assets resulting from operations 33,362 5,707,644 489,311
---------- ---------- ------------
From accumulation unit transactions
Participant deposits 2,512,707 201,627 14,324
Participant transfers (1,044,988) 545,333 836,912
Participant withdrawals (360,811) (575,241) (76,771)
---------- ---------- ------------
Net increase in net assets resulting from
participant transactions 1,106,908 171,719 774,465
---------- ---------- ------------
Net increase in net assets 1,140,270 5,879,363 1,263,776
Net assets
Beginning of period 628,827 18,731,528 1,581,945
---------- ---------- ------------
End of period $ 1,769,097 $24,610,891 $2,845,721
========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
------------ ------------ --------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 378,640 $ (2,042) $ 9,911
Net realized gain (loss) 898,722 123 7,172
Net unrealized appreciation 935,547 97,577 50,815
---------- ---------- ------------
Net increase in net assets resulting from operations 2,212,909 95,658 67,898
---------- ---------- ------------
From accumulation unit transactions
Participant deposits 176,526 25,671 82
Participant transfers (140,439) (274,219) (19,445)
Participant withdrawals (479,778) (94,246) (17,165)
---------- ---------- ------------
Net decrease in net assets resulting from
participant transactions (443,691) (342,794) (36,528)
---------- ---------- ------------
Net increase (decrease) in net assets 1,769,218 (247,136) 31,370
Net assets
Beginning of period 12,890,492 1,396,725 322,417
---------- ---------- ------------
End of period $14,659,710 $1,149,589 $353,787
========== ========== ============
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1994
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
------------ ------------ --------------
<S> <C> <C> <C>
From operations
Net investment income $ 19,190 $ 160,089 $ 120,299
Net realized gain (loss) -- 1,031,142 (16,902)
Net unrealized depreciation -- (1,022,095) (217,226)
---------- ---------- ------------
Net increase (decrease) in net assets resulting from
operations 19,190 169,136 (113,829)
---------- ---------- ------------
From accumulation unit transactions
Participant deposits 466,709 573,221 6,350
Participant transfers (537,395) 476,706 (200,637)
Participant withdrawals (213,336) (758,521) (90,992)
---------- ---------- ------------
Net increase (decrease) in net assets resulting from
participant transactions (284,022) 291,406 (285,279)
---------- ---------- ------------
Net increase (decrease) in net assets (264,832) 460,542 (399,108)
Net assets
Beginning of period 893,659 18,270,986 1,981,053
---------- ---------- ------------
End of period $ 628,827 $18,731,528 $1,581,945
========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
------------ ------------ --------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 297,574 $ (3,581) $ 9,737
Net realized gain 437,303 27,307 1,192
Net unrealized depreciation (984,229) (52,837) (23,465)
---------- ---------- ------------
Net decrease in net assets resulting from operations (249,352) (29,111) (12,536)
---------- ---------- ------------
From accumulation unit transactions
Participant deposits 202,349 80,593 1,891
Participant transfers (169,326) 360,650 (5,925)
Participant withdrawals (413,557) (116,037) (58,530)
---------- ---------- ------------
Net increase (decrease) in net assets resulting from
participant transactions (380,534) 325,206 (62,564)
---------- ---------- ------------
Net increase (decrease) in net assets (629,886) 296,095 (75,100)
Net assets
Beginning of period 13,520,378 1,100,630 397,517
---------- ---------- ------------
End of period $12,890,492 $1,396,725 $322,417
========== ========== ============
</TABLE>
See Notes to Financial Statements
5
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
(Unaudited)
<TABLE>
<CAPTION>
Money Market Sub-Account Growth Sub-Account
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $1.515458 $1.466849 $2.467899 $2.444383
Income from investment operations
Net investment income 0.078218 0.048609 0.017200 0.022258
Net realized and unrealized gain
(loss) -- -- 0.728799 0.001258
-------- -------- -------- ----------
Total from investment operations 0.078218 0.048609 0.745999 0.023516
-------- -------- -------- ----------
Unit value, end of period $1.593676 $1.515458 $3.213898 $2.467899
======== ======== ======== ==========
Total return 5.16% 3.31% 30.23% 0.96%
Net assets, end of period (000) $1,769 $629 $24,611 $18,732
</TABLE>
<TABLE>
<CAPTION>
Bond Sub-Account Total Return Sub-Account
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $1.689832 $ 1.796321 $1.885207 $ 1.921620
Income from investment operations
Net investment income 0.147303 0.112542 0.056812 0.043455
Net realized and unrealized gain
(loss) 0.239782 (0.219031) 0.275216 (0.079868)
--------- --------- --------- -----------
Total from investment
operations 0.387085 (0.106489) 0.332028 (0.036413)
--------- --------- --------- -----------
Unit value, end of period $2.076917 $ 1.689832 $2.217235 $ 1.885207
========= ========= ========= ===========
Total return 22.91% (5.93)% 17.61% (1.89%)
Net assets, end of period (000) $2,846 $1,582 $14,660 $12,890
</TABLE>
<TABLE>
<CAPTION>
International Sub-Account Balanced Sub-Account
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.292393 $ 1.298093 $1.132914 $ 1.171796
Income from investment operations
Net investment income (loss) (0.002495) (0.000700) 0.037577 0.030201
Net realized and unrealized gain
(loss) 0.119366 (0.005000) 0.219853 (0.069083)
--------- --------- --------- -----------
Total from investment operations 0.116871 (0.005700) 0.257430 (0.038882)
--------- --------- --------- -----------
Unit value, end of period $ 1.409264 $ 1.292393 $1.390344 $ 1.132914
========= ========= ========= ===========
Total return 9.04% (0.44)% 22.72% (3.32)%
Net assets, end of period (000) $1,150 $1,397 $354 $322
</TABLE>
See Notes to Financial Statements
6
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
Note 1--Organization:
Phoenix Home Life Variable Universal Life Account (the Account) is a
separate investment account of Phoenix Home Life Mutual Insurance Company
(Phoenix Home Life). The Account is registered as a unit investment trust
under the Investment Company Act of 1940, as amended. Policies offered by the
Account have a death benefit, cash surrender value and loan privileges. The
account was established January 1, 1987 and currently consists of six
Sub-accounts. The assets of each Sub-account are invested in shares of six of
the available portfolios of The Phoenix Edge Series Fund (the Fund). The Real
Estate Series is currently not available to the Account. Additionally,
contract holders may also direct the allocation of their investments between
the Account and the Guaranteed Interest Account of the general account of
Phoenix Home Life through participant transfers.
Each series has distinct investment objectives. The Money Market Series is
a short-term investment fund, the Growth Series is a growth common stock
fund, the Bond Series is a long-term debt fund, the Total Return Series
invests in equity securities and long and short-term debt, the International
Series invests primarily in an internationally diversified portfolio of
equity securities, and the Balanced Series is a balanced fund which invests
in growth stocks and at least 25% of its assets in fixed income senior
securities.
Note 2--Significant Accounting Policies:
Certain reclassifications have been made to prior year's amounts to conform
with the 1995 presentation.
A. Valuation of Investments: Investments are made exclusively in the Fund
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 Fund as well as gains and losses
on sales of shares in the fund determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from Phoenix Home
Life 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 or state income taxes is
required.
D. Distributions: Distributions are recorded as investment income on the
ex-dividend date.
Note 3--Purchases and Sales of Shares of The Phoenix Edge Series Fund:
Purchases and sales of shares of the Fund for the year ended December 31,
1995 aggregated the following:
Sub-Account Purchases Sales
------------------------------------------ ----------- -------------
Money Market $3,162,398 $2,018,768
Growth 3,925,790 1,020,900
Bond 1,053,005 93,186
Total Return 1,600,853 786,910
International 89,360 412,552
Balanced 38,816 58,680
Note 4--Participant Accumulation Unit Transactions (in units):
<TABLE>
<CAPTION>
Sub-Account
----------------------------------------------------------------------
Money Total
Market Growth Bond Return International Balanced
------- ------- ------- ------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Participant deposits 1,603,235 66,778 7,169 84,600 18,918 70
Participant transfers (674,605) 200,335 468,210 (79,253) (211,140) (16,382)
Participant withdrawals (233,499) (199,539) (41,368) (231,343) (72,769) (13,819)
</TABLE>
Note 5--Policy Loans:
Transfers are made to Phoenix Home Life's general account as a result of
policy loans. Contract provisions allow contract owners to borrow up to 75%
of a policy's cash value during the first three policy years and up to 90% of
cash value thereafter, with interest of 8% due and payable on each policy
anniversary. At the time a loan is granted an amount equivalent to the amount
of the loan is transferred from the Account to Phoenix Home Life's general
account as collateral for the outstanding loan. These transfers are included
in participant withdrawals in the accompanying financial statements. Amounts
in the general account are credited with interest at 7.25%. Loan repayments
result in a transfer of collateral back to the Account.
Note 6--Investment Advisory Fees and Related Party Transactions:
Phoenix Home Life and its indirect, less than wholly owned subsidiary,
Phoenix Equity Planning Corporation, a registered broker/dealer in
securities, provide all services to the Account.
The cost of insurance is charged to each policy on a monthly basis by a
withdrawal of participant units prorated among the elected Sub- accounts. The
amount charged to each policy depends on a number of variables including sex,
age and risk class as well as the death benefit and cash value of the policy.
Such costs aggregated $353,092 during the year ended December 31, 1995.
Upon partial surrender of a policy, a surrender fee of the lesser of $25
or 2% of the partial surrender amount paid and a fraction of the balance of
any unrepaid acquisition expense allowance is deducted from the policy value
and paid to Phoenix Home Life. No partial surrender fees were paid during the
year ended December 31, 1995.
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 Home
Life.
7
<PAGE>
An acquisition expense allowance is paid to Phoenix Home Life over a ten
year period from contract inception by a withdrawal of units. The acquisition
expense allowance consists of a sales load of 5.5% of the issue premium to
compensate Phoenix Home Life for distribution expenses incurred, an issue
administration charge of 1.0% of the issue premium to compensate Phoenix Home
Life for underwriting and start-up expenses and premium taxes which currently
range from .75% to 4% of premiums paid based on the state where the contract
holder resides. In the event of a surrender before ten years, the unpaid
balance of the acquisition expenses is deducted and paid to Phoenix Home
Life. Deductions related to these charges amounted to $199,710 during the
year ended December 31, 1995.
Phoenix Home Life assumes the risk that insureds may live for a shorter
time than projected because of inaccuracies in the projecting process and,
accordingly, that an aggregate amount of death benefits greater than
projected will be payable 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 Home Life charges the Account an annual rate of
0.50% of the average daily net assets of the Account for mortality and
expense risks assumed.
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 Home Life believes that the Account satisfies the
current requirements of the regulations, and it intends that the Account will
continue to meet such requirements.
8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[Price Waterhouse LLP Logo] [Price Waterhouse Logo]
To the Participants of
Phoenix Home Life Variable
Universal Life Account
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the Money Market Sub-Account,
Growth Sub-Account, Bond Sub-Account, Total Return Sub-Account, International
Sub-Account and Balanced Sub-Account (constituting the Phoenix Home Life
Variable Universal Life Account, hereafter referred to as the "Account") at
December 31, 1995, the results of each of their operations for the year then
ended 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 provide a reasonable basis for the opinion expressed
above.
[Price Waterhouse LLP Signature]
Hartford, CT 06103
February 13, 1996
9
<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
Custodian
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
International Series Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Independent Accountants
Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut 06103
10
<PAGE>
[Phoenix Home Life logo]
Phoenix Home Life Mutual Insurance Company
101 Munson Street
P.O. Box 810
Greenfield, Massachusetts 01302-0810
OL1273 (2/96)
4450.04
[recycle] Printed on recycled paper using soybean ink
(C) 1995 Phoenix Home Life Mutual Insurance Company
BULK RATE
U.S. Postage
PAID
Permit No. 444
Springfield, MA
