[Front Cover]
[Photo of Adult Couple with Child Overlooking a Pond]
Flex Edge Success(SM)
[Photo of the Earth in a Galaxy of Stars]
Flex Edge
[Photo of Waterfall]
Joint Edge(R)
Annual Reports for:
Phoenix Home Life Variable Universal Life Account
Phoenix Edge Series Fund
Wanger Advisors Trust
December 31, 1996
<PAGE>
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
<TABLE>
<CAPTION>
<S> <C>
Money Market Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Growth Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Multi-Sector Fixed Income Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Total Return Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
International Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Balanced Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Real Estate Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Strategic Theme Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Aberdeen New Asia Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Wanger International Small Cap Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Wanger U.S. Small Cap Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Notes to Financial Statements 7
</TABLE>
THE PHOENIX EDGE SERIES FUND
<TABLE>
<CAPTION>
<S> <C>
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
Multi-Sector Fixed Income Series
Schedule of Investments 2-12
Statement of Assets and Liabilities 2-15
Statement of Operations 2-15
Statement of Changes in Net Assets 2-16
Financial Highlights 2-16
Total Return Series
Schedule of Investments 2-18
Statement of Assets and Liabilities 2-22
Statement of Operations 2-22
Statement of Changes in Net Assets 2-23
Financial Highlights 2-23
International Series
Schedule of Investments 2-25
Statement of Assets and Liabilities 2-28
Statement of Operations 2-28
Statement of Changes in Net Assets 2-29
Financial Highlights 2-29
Balanced Series
Schedule of Investments 2-31
Statement of Assets and Liabilities 2-35
Statement of Operations 2-35
Statement of Changes in Net Assets 2-36
Financial Highlights 2-36
Real Estate Series
Schedule of Investments 2-38
Statement of Assets and Liabilities 2-40
Statement of Operations 2-40
Statement of Changes in Net Assets 2-41
Financial Highlights 2-41
Strategic Theme Series
Schedule of Investments 2-43
Statement of Assets and Liabilities 2-45
Statement of Operations 2-45
Statement of Changes in Net Assets 2-46
Financial Highlights 2-46
Aberdeen New Asia Series
Schedule of Investments 2-48
Statement of Assets and Liabilities 2-50
Statement of Operations 2-50
Statement of Changes in Net Assets 2-51
Financial Highlights 2-51
Notes to Financial Statements 2-52
</TABLE>
WANGER ADVISORS TRUST
<TABLE>
<CAPTION>
<S> <C>
Wanger International Small Cap Advisor
Schedule of Investments 3-12
Statement of Assets and Liabilities 3-17
Statement of Operations 3-18
Statement of Changes in Net Assets 3-19
Financial Highlights 3-21
Notes to Financial Statements 3-22
Wanger U.S. Small Cap Advisor
Schedule of Investments 3-8
Statement of Assets and Liabilities 3-17
Statement of Operations 3-18
Statement of Changes in Net Assets 3-19
Financial Highlights 3-20
Notes to Financial Statements 3-22
</TABLE>
<PAGE>
This annual report for the PhoenixHome Life Variable Universal Life Account for
the year ended December 31, 1996, contains the financial statements for the
Account's 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 and the Wanger Advisors Trust.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
-------------- --------------- --------------
<S> <C> <C> <C>
Assets
Investments at cost $15,544,730 $160,303,827 $10,844,154
============ ============= ============
Investment in The Phoenix Edge Series Fund, at market $15,544,730 $172,867,410 $11,235,197
------------ ------------- ------------
Total assets 15,544,730 172,867,410 11,235,197
Liabilities
Accrued expenses to related party 10,037 117,203 7,117
------------ ------------- ------------
Net assets $15,534,693 $172,750,207 $11,228,080
============ ============= ============
Accumulation units outstanding 11,249,319 49,375,885 5,378,886
============ ============= ============
Unit value $ 1.380945 $ 3.498676 $ 2.087436
============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- --------------- --------------
<S> <C> <C> <C>
Assets
Investments at cost $26,014,458 $29,445,731 $15,234,036
============ ============= ============
Investment in The Phoenix Edge Series Fund, at market $26,284,915 $34,077,443 $16,229,448
------------ ------------- ------------
Total assets 26,284,915 34,077,443 16,229,448
Liabilities
Accrued expenses to related party 17,792 22,074 10,955
------------ ------------- ------------
Net assets $26,267,123 $34,055,369 $16,218,493
============ ============= ============
Accumulation units outstanding 11,308,615 20,903,950 10,696,397
============ ============= ============
Unit value $ 2.322753 $ 1.629136 $ 1.516258
============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
Aberdeen
Real Estate Strategic Theme New Asia
Sub-Account Sub-Account Sub-Account
-------------- --------------- --------------
<S> <C> <C> <C>
Assets
Investments at cost $ 776,588 $ 1,798,845 $ 1,949,771
============ ============= ============
Investment in The Phoenix Edge Series Fund, at market 888,425 $ 1,807,108 $ 1,942,818
------------ ------------- ------------
Total assets 888,425 1,807,108 1,942,818
Liabilities
Accrued expenses to related party 532 1,164 1,267
------------ ------------- ------------
Net assets $ 887,893 $1,805,944 $ 1,941,551
============ ============= ============
Accumulation units outstanding 680,458 1,805,464 1,943,140
============ ============= ============
Unit value $ 1.304846 $ 1.000266 $ 0.999182
============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
Wanger
International Wanger U.S.
Small Cap Small Cap
Sub-Account Sub-Account
--------------- --------------
<S> <C> <C>
Assets
Investments at cost $ 292,575 $ 457,996
============= ============
Investment in Wanger Advisors Trust, at market $ 296,436 $ 467,062
------------- ------------
Total assets 296,436 467,062
Liabilities
Accrued expenses to related party 30 65
------------- ------------
Net assets 296,406 $ 466,997
============= ============
Accumulation units outstanding 288,603 449,762
============= ============
Unit value $ 1.027036 $ 1.038320
============= ============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF OPERATIONS
For the period ended December 31, 1996
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
-------------- -------------- --------------
<S> <C> <C> <C>
Investment income
Distributions $655,710 $ 1,444,275 $661,909
Expenses
Mortality and expense risk charges 107,332 1,163,001 68,413
------------ ------------ ------------
Net investment income 548,378 281,274 593,496
------------ ------------ ------------
Net realized gain (loss) from share transactions -- 8,095 (969)
Net realized gain distribution from Fund -- 11,412,411 327,845
Net unrealized appreciation on investment -- 4,791,630 43,393
------------ ------------ ------------
Net gain (loss) on investments -- 16,212,136 370,269
------------ ------------ ------------
Net increase in net assets resulting from operations $548,378 $16,493,410 $963,765
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- --------------- --------------
<S> <C> <C> <C>
Investment income
Distributions $ 510,723 $ 464,006 $ 413,757
Expenses
Mortality and expense risk charges 186,170 218,684 117,681
------------ ------------- ------------
Net investment income 324,553 245,322 296,076
------------ ------------- ------------
Net realized gain (loss) from share transactions 4,963 (444) (2,312)
Net realized gain distribution from Fund 1,617,750 747,938 1,396,484
Net unrealized appreciation (depreciation) on investment (91,227) 3,401,467 (304,864)
------------ ------------- ------------
Net gain on investments 1,531,486 4,148,961 1,089,308
------------ ------------- ------------
Net increase in net assets resulting from operations $1,856,039 $4,394,283 $1,385,384
============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
Aberdeen
Real Estate Strategic Theme New Asia
Sub-Account(1) Sub-Account(1) Sub-Account(2)
--------------- --------------- ---------------
<S> <C> <C> <C>
Investment income
Distributions $ 10,511 $ 5,636 $10,080
Expenses
Mortality and expense risk charges 2,005 4,726 2,998
------------- ------------- --------------
Net investment income 8,506 910 7,082
------------- ------------- --------------
Net realized gain from share transactions 13,393 1,002 919
Net realized gain distribution from Fund 9,253 -- --
Net unrealized appreciation (depreciation) on investment 111,837 8,263 (6,953)
------------- ------------- --------------
Net gain (loss) on investments 134,483 9,265 (6,034)
------------- ------------- --------------
Net increase in net assets resulting from operations $142,989 $10,175 $ 1,048
============= ============= ==============
</TABLE>
<TABLE>
<CAPTION>
Wanger Wanger
International U.S.
Small Cap Small Cap
Sub-Account(3) Sub-Account(3)
----------------- -----------------
<S> <C> <C>
Investment income
Distributions $ -- $ --
Expenses
Mortality and expense risk charges 30 65
----------------- -----------------
Net investment loss (30) (65)
----------------- -----------------
Net realized gain from share transactions -- 29
Net realized gain distribution from Fund -- --
Net unrealized appreciation on investment 3,861 9,066
----------------- -----------------
Net gain on investments 3,861 9,095
----------------- -----------------
Net increase in net assets resulting from operations $3,831 $9,030
================= =================
(1) From inception May 1, 1996 to December 31, 1996
(2) From inception September 18, 1996 to December 31, 1996
(3) From inception December 18, 1996 to December 31, 1996
</TABLE>
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1996
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
--------------- --------------- --------------
<S> <C> <C> <C>
From operations
Net investment income $ 548,378 $ 281,274 $ 593,496
Net realized gain (loss) -- 11,420,506 326,876
Net unrealized appreciation -- 4,791,630 43,393
------------- ------------- ------------
Net increase in net assets resulting from operations 548,378 16,493,410 963,765
------------- ------------- ------------
From accumulation unit transactions
Participant deposits 26,004,635 47,202,324 2,811,259
Participant transfers (21,268,222) 10,438,285 1,823,625
Participant withdrawals (3,701,639) (19,333,192) (1,071,344)
------------- ------------- ------------
Net increase in net assets resulting from participant
transactions 1,034,774 38,307,417 3,563,540
------------- ------------- ------------
Net increase in net assets 1,583,152 54,800,827 4,527,305
Net assets
Beginning of period 13,951,541 117,949,380 6,700,775
------------- ------------- ------------
End of period $ 15,534,693 $172,750,207 $11,228,080
============= ============= ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- --------------- --------------
<S> <C> <C> <C>
From operations
Net investment income $ 324,553 $ 245,322 $ 296,076
Net realized gain 1,622,713 747,494 1,394,172
Net unrealized appreciation (depreciation) (91,227) 3,401,467 (304,864)
------------ ------------- ------------
Net increase in net assets resulting from operations 1,856,039 4,394,283 1,385,384
------------ ------------- ------------
From accumulation unit transactions
Participant deposits 6,031,095 8,480,853 3,636,746
Participant transfers 1,002,380 3,847,285 (651,439)
Participant withdrawals (2,871,670) (3,414,225) (1,868,673)
------------ ------------- ------------
Net increase in net assets resulting from participant
transactions 4,161,805 8,913,913 1,116,634
------------ ------------- ------------
Net increase in net assets 6,017,844 13,308,196 2,502,018
Net assets
Beginning of period 20,249,279 20,747,173 13,716,475
------------ ------------- ------------
End of period $26,267,123 $34,055,369 $16,218,493
============ ============= ============
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1996
(Continued)
<TABLE>
<CAPTION>
Aberdeen
Real Estate Strategic Theme New Asia
Sub-Account(1) Sub-Account(1) Sub-Account(2)
--------------- --------------- ---------------
<S> <C> <C> <C>
From operations
Net investment income $ 8,506 $ 910 $ 7,082
Net realized gain 22,646 1,002 919
Net unrealized appreciation (depreciation) 111,837 8,263 (6,953)
------------- ------------- --------------
Net increase in net assets resulting from operations 142,989 10,175 1,048
------------- ------------- --------------
From accumulation unit transactions
Participant deposits 114,179 507,159 137,347
Participant transfers 648,017 1,412,288 1,825,934
Participant withdrawals (17,292) (123,678) (22,778)
------------- ------------- --------------
Net increase in net assets resulting from participant
transactions 744,904 1,795,769 1,940,503
------------- ------------- --------------
Net increase in net assets 887,893 1,805,944 1,941,551
Net assets
Beginning of period 0 0 0
------------- ------------- --------------
End of period $887,893 $1,805,944 $1,941,551
============= ============= ==============
</TABLE>
<TABLE>
<CAPTION>
Wanger
International Wanger U.S.
Small Cap Small Cap
Sub-Account(3) Sub-Account(3)
--------------- --------------- --
<S> <C> <C>
From operations
Net investment loss $ (30) $ (65)
Net realized gain -- 29
Net unrealized appreciation 3,861 9,066
------------- -------------
Net increase in net assets resulting from operations 3,831 9,030
------------- -------------
From accumulation unit transactions
Participant deposits 8,061 11,399
Participant transfers 284,998 447,242
Participant withdrawals (484) (674)
------------- -------------
Net increase in net assets resulting from participant
transactions 292,575 457,967
------------- -------------
Net increase in net assets 296,406 466,997
Net assets
Beginning of period 0 0
------------- -------------
End of period $296,406 $466,997
============= =============
(1) From inception May 1, 1996 to December 31, 1996
(2) From inception September 18, 1996 to December 31, 1996
(3) From inception December 18, 1996 to December 31, 1996
</TABLE>
See Notes to Financial Statements
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
--------------- --------------- --------------
<S> <C> <C> <C>
From operations
Net investment income $ 562,387 $ 274,566 $ 414,322
Net realized gain -- 12,518,357 1,800
Net unrealized appreciation -- 9,293,459 651,393
------------- ------------- ------------
Net increase in net assets resulting from operations 562,387 22,086,382 1,067,515
------------- ------------- ------------
From accumulation unit transactions
Participant deposits 23,196,295 34,460,166 1,851,602
Participant transfers (19,227,932) 15,470,116 884,223
Participant withdrawals (2,331,740) (12,409,600) (772,642)
------------- ------------- ------------
Net increase in net assets resulting from participant
transactions 1,636,623 37,520,682 1,963,183
------------- ------------- ------------
Net increase in net assets 2,199,010 59,607,064 3,030,698
Net assets
Beginning of period 11,752,531 58,342,316 3,670,077
------------- ------------- ------------
End of period $ 13,951,541 $117,949,380 $6,700,775
============= ============= ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- --------------- --------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 424,519 $ (75,181) $ 306,309
Net realized gain 1,222,367 363,543 272,699
Net unrealized appreciation 873,761 1,259,164 1,647,649
------------ ------------- ------------
Net increase in net assets resulting from operations 2,520,647 1,547,526 2,226,657
------------ ------------- ------------
From accumulation unit transactions
Participant deposits 5,457,071 7,548,871 3,800,064
Participant transfers 2,208,588 (399,608) 581,841
Participant withdrawals (2,158,665) (2,474,965) (1,761,880)
------------ ------------- ------------
Net increase in net assets resulting from participant
transactions 5,506,994 4,674,298 2,620,025
------------ ------------- ------------
Net increase in net assets 8,027,641 6,221,824 4,846,682
Net assets
Beginning of period 12,221,638 14,525,349 8,869,793
------------ ------------- ------------
End of period $20,249,279 $20,747,173 $13,716,475
============ ============= ============
</TABLE>
See Notes to Financial Statements
6
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
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). The Account is offered as Flex Edge and Flex Edge Success for
individual variable life insurance and as Joint Edge for variable
first-to-die joint life insurance. The account is registered as a unit
investment trust under the Investment Company Act of 1940, as amended, and
currently consists of eleven Sub-Accounts, each of which invest in a
corresponding series of The Phoenix Edge Series Fund or Wanger Advisors Trust
(the "Funds").
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 Multi-Sector Fixed Income Series (formerly Bond) 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
internationally diversified 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. The Real Estate Series invests in
marketable securities of publicly traded real estate investment trusts
("REITs") and companies that are principally engaged in the real estate
industry, the Strategic Theme Series invests in securities of companies
believed to benefit from specific trends, the Aberdeen New Asia Series
invests primarily in diversified equity securities of issuers organized and
principally operating in Asia, excluding Japan, the Wanger International
Small Cap Series invests in securities of non-U.S. companies with a stock
market capitalization of less than $1 billion and 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. Policyowners may also 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 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 Funds
Purchases and sales of shares of the Funds for the period ended December 31,
1996 aggregated the following:
<TABLE>
<CAPTION>
Sub-Account Purchases Sales
- ----------------------------------- -------------- --------------
<S> <C> <C>
The Phoenix Edge Series Fund:
Money Market $18,557,803 $16,972,533
Growth 56,049,073 6,003,452
Multi-Sector Fixed Income 5,675,187 1,187,536
Total Return 7,809,511 1,700,229
International 11,522,658 1,606,132
Balanced 5,120,212 2,308,604
Real Estate 1,376,041 612,846
Strategic Theme 1,866,050 68,207
Aberdeen New Asia 2,202,975 254,123
Wanger Advisors Trust:
Wanger International Small Cap 292,575 --
Wanger U.S. Small Cap 470,063 12,096
</TABLE>
Note 4--Participant Accumulation Unit Transactions (in units)
<TABLE>
<CAPTION>
Sub-Account
--------------------------------------------------------------------------------------
Money Multi-Sector Total
Market Growth Fixed Income Return International Balanced
------------- ------------- ------------- ------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Flex Edge and Flex Edge Success:
Units outstanding,
beginning of period 10,229,951 36,538,624 3,484,452 9,236,346 14,435,212 9,521,556
Participant deposits 17,873,987 13,545,570 1,376,399 2,585,188 5,260,656 2,413,913
Participant transfers (15,057,257) 3,033,843 898,080 410,847 2,428,536 (483,561)
Participant withdrawals (2,322,249) (5,630,014) (525,893) (1,239,077) (2,111,668) (1,251,126)
------------ ------------ ------------ ------------ ------------ ------------
Units outstanding, end
of period 10,724,432 47,488,023 5,233,038 10,993,304 20,012,736 10,200,782
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Wanger
Strategic Aberdeen International Wanger U.S.
Real Estate Theme New Asia Small Cap Small Cap
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Units outstanding,
beginning of period 0 0 0 0 0
Participant deposits 97,107 440,485 132,572 7,185 11,020
Participant transfers 577,902 1,331,993 1,794,742 270,302 422,226
Participant withdrawals (13,748) (110,343) (19,089) (600) (1,152)
------------ ------------ ------------ ------------ ------------
Units outstanding, end
of period 661,261 1,662,135 1,908,225 276,887 432,094
============ ============ ============ ============ ============
</TABLE>
7
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Money Multi-Sector Total
Market Growth Fixed Income Return International Balanced
------------- ------------- ------------- ------------- ---------------------------
Joint Edge:
<S> <C> <C> <C> <C> <C> <C>
Units outstanding,
beginning of period 296,269 1,113,293 95,464 194,742 555,114 400,572
Participant deposits 1,669,894 861,329 50,903 130,539 363,107 141,144
Participant transfers (1,246,393) 303,113 22,644 54,934 131,390 24,694
Participant withdrawals (194,883) (389,873) (23,163) (64,904) (158,397) (70,795)
------------ ------------ ------------ ------------ ------------ ------------
Units outstanding, end
of period 524,887 1,887,862 145,848 315,311 891,214 495,615
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Wanger
Strategic Aberdeen International Wanger U.S.
Real Estate Theme New Asia Small Cap Small Cap
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Units outstanding,
beginning of period 0 0 0 0 0
Participant deposits 3,231 54,473 5,953 842 175
Participant transfers 17,724 103,930 32,722 10,988 17,550
Participant withdrawals (1,758) (15,074) (3,760) (114) (57)
------------ ------------ ------------ ------------ ------------
Units outstanding, end
of period 19,197 143,329 34,915 11,716 17,668
============ ============ ============ ============ ============
</TABLE>
Note 5--Policy Loans
Transfers are made to Phoenix's general account as a result of policy loans.
Policy provisions allow policyowners to borrow up to 90% of a policy's cash
value with an interest rate set in accordance with the contract 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'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 2% for Flex Edge success policies, and 6% for Joint Edge and Flex
Edge policies. Loan repayments result in a transfer of collateral back to the
Account.
Note 6--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.
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 $19,666,478 during the year ended December 31, 1996.
Upon partial surrender of a policy, a surrender fee of the lesser of $25 or
2% of the partial surrender amount paid and a partial surrender charge equal
to a pro rata portion of the applicable surrender charge is deducted from the
policy value and paid to Phoenix.
Phoenix Equity Planning Corporation is the principal underwriter and
distributor of the Account. Phoenix Equity Planning Corporation is reimbursed
for its distribution and underwriting expenses by Phoenix.
Policies which are surrendered during the first ten policy years will incur
a surrender charge, consisting of a contingent deferred sales charge designed
to recover expenses for the distribution of Policies that are terminated by
surrender before distribution expenses have been recouped, and a contingent
deferred issue charge designed to recover expenses for the administration of
Policies that are terminated by surrender before administrative expenses have
been recouped. These are contingent charges paid only if the Policy is
surrendered (or a partial withdrawal is taken or the Face Amount is reduced
or the Policy lapses) during the first ten policy years. The charges are
deferred (i.e. not deducted from premiums).
Phoenix assumes the mortality 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. The expense risk assumed is that expenses incurred
in issuing the policies may exceed the limits on administrative charges set
in the policies. In return for the assumption of these mortality and expense
risks, Phoenix charges the Account an annual rate of 0.80% of the average
daily net assets of the Account for mortality and expense risks assumed for
Flex Edge and Joint Edge. For Flex Edge Success, the Account is charged an
annual rate of 0.80% for the first fifteen years and 0.25% thereafter.
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.
8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
[Price Waterhouse Logo]
To the Board of Directors of Phoenix Home Life Mutual Insurance Company and
Participants of Phoenix Home Life Variable Universal Life Account
In our opinion, the accompanying statement of assets and liabilities and the
related statement of operations and of changes in net assets present fairly,
in all material respects, the financial position of the Money Market
Sub-Account, Growth Sub-Account, Multi-Sector Fixed Income Sub-Account
(formerly the Bond Sub-Account), Total Return Sub-Account, International
Sub-Account, Balanced Sub-Account, Real Estate Sub-Account, Strategic Theme
Sub-Account, Aberdeen New Asia Sub-Account, Wanger International Small Cap
Sub-Account and Wanger U.S. Small Cap Sub-Account (constituting the Phoenix
Home Life Variable Universal Life Account, hereafter referred to as the
"Account") at December 31, 1996, the results of each of their operations for
the periods 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, which included confirmation of investments at December 31, 1996
by correspondence with the Funds, provide a reasonable basis for the opinion
expressed above.
/s/ Price Waterhouse LLP
Hartford, Connecticut
February 12, 1997
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
Custodians
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
Brown Brothers Harriman & Co.
(International Series, Aberdeen New Asia Series)
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust
(Real Estate Series)
P.O. Box 351
Boston, Massachusetts 02101
Independent Accountants
Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut 06103
10
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<PAGE>
[Back Cover]
[Phoenix Logo] Phoenix
Phoenix Home Life Mutual Insurance Company
101 Munson Street
Greenfield, MA 01301
[Recycle Logo] Printed on Recycled Paper.
(C) 1997 Phoenix Home Life Mutual Insurance Company
OL 1320 K (2/97)
