TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE 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 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
NOTES TO FINANCIAL STATEMENTS.............. 11
<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................................................ $ 801,462 $26,799,824 $3,817,260
=========== =========== ==========
Investment in The Phoenix Edge Series Fund, at market.............. $ 801,462 $40,624,469 $3,557,809
----------- ----------- ----------
Total assets.................................................... 801,462 40,624,469 3,557,809
LIABILITIES
Accrued expenses to related party.................................. 340 16,205 1,525
----------- ----------- ----------
NET ASSETS............................................................ $ 801,122 $40,608,264 $3,556,284
=========== =========== ==========
Accumulation units outstanding........................................ 439,537 7,236,992 1,452,115
=========== =========== ==========
Unit value............................................................ $ 1.822650 $ 5.611208 $ 2.449030
=========== =========== ==========
STRATEGIC
ALLOCATION INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ----------
ASSETS
Investments at cost................................................ $15,952,877 $ 1,129,438 $ 83,271
=========== =========== ==========
Investment in The Phoenix Edge Series Fund, at market.............. $19,182,187 $ 1,537,151 $ 113,718
----------- ----------- ----------
Total assets.................................................... 19,182,187 1,537,151 113,718
LIABILITIES
Accrued expenses to related party.................................. 7,788 630 47
----------- ----------- ----------
NET ASSETS............................................................ $19,174,399 $ 1,536,521 $ 113,671
=========== =========== ==========
Accumulation units outstanding........................................ 5,519,645 650,739 53,478
=========== =========== ==========
Unit value............................................................ $ 3.473843 $ 2.361203 $ 2.125548
=========== =========== ==========
ABERDEEN
REAL ESTATE STRATEGIC THEME NEW ASIA
SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ----------
ASSETS
Investments at cost................................................ $ 80,399 $ 309,267 $ 40,255
=========== =========== ==========
Investment in The Phoenix Edge Series Fund, at market.............. $ 69,071 $ 411,269 $ 27,740
----------- ----------- ----------
Total assets.................................................... 69,071 411,269 27,740
LIABILITIES
Accrued expenses to related party.................................. 4 162 11
----------- ----------- ----------
NET ASSETS............................................................ $ 69,067 $ 411,107 $ 27,729
=========== =========== ==========
Accumulation units outstanding........................................ 55,433 244,317 43,139
=========== =========== ==========
Unit value............................................................ $ 1.245953 $ 1.682681 $ 0.642781
=========== =========== ==========
SENECA
ENHANCED ENGEMANN MID-CAP
INDEX NIFTY FIFTY GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ----------
ASSETS
Investments at cost................................................ $ 330,524 $ 70,742 $ 14,409
=========== =========== ==========
Investment in the Phoenix Edge Series Fund, at market.............. $ 371,684 $ 84,636 $ 16,292
----------- ----------- ----------
Total assets.................................................... 371,684 84,636 16,292
LIABILITIES
Accrued expenses to related party.................................. 270 34 6
----------- ----------- ----------
NET ASSETS............................................................ $ 371,414 $ 84,602 $ 16,286
=========== =========== ==========
Accumulation units outstanding........................................ 279,279 70,855 15,148
=========== =========== ==========
Unit value............................................................ $ 1.329908 $ 1.193670 $ 1.075153
=========== =========== ==========
</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................................................ $ 49,381 $ 9,684 $ 8,424
=========== =========== ==========
Investment in The Phoenix Edge Series Fund, at market.............. $ 53,561 $ 10,042 $ 7,268
----------- ----------- ----------
Total assets.................................................... 53,561 10,042 7,268
LIABILITIES
Accrued expenses to related party.................................. 22 4 3
----------- ----------- ----------
NET ASSETS............................................................ $ 53,539 $ 10,038 $ 7,265
=========== =========== ==========
Accumulation units outstanding........................................ 48,315 9,730 8,427
=========== =========== ==========
Unit value............................................................ $ 1.108117 $ 1.031633 $ 0.862195
=========== =========== ==========
WANGER WANGER
U.S. INTERNATIONAL
SMALL CAP SMALL CAP
SUBACCOUNT SUBACCOUNT
---------- ----------
ASSETS
Investments at cost................................................ $ 492,929 $ 120,475
=========== ===========
Investment in Wanger Advisors Trust, at market..................... $ 572,296 $ 132,336
----------- -----------
Total assets.................................................... 572,296 132,336
LIABILITIES
Accrued expenses to related party.................................. 229 54
----------- -----------
NET ASSETS............................................................ $ 572,067 $ 132,282
=========== ===========
Accumulation units outstanding........................................ 402,094 113,611
=========== ===========
Unit value............................................................ $ 1.422719 $ 1.164344
=========== ===========
TEMPLETON
TEMPLETON DEVELOPING
INTERNATIONAL MARKETS
SUBACCOUNT SUBACCOUNT
---------- ----------
ASSETS
Investments at cost................................................ $ 58,063 $ 9,966
=========== ===========
Investment in Templeton Variable Products Series Fund, at market... $ 58,661 $ 10,164
----------- -----------
Total assets.................................................... 58,661 10,164
LIABILITIES
Accrued expenses to related party.................................. 30 7
----------- -----------
NET ASSETS............................................................ $ 58,631 $ 10,157
=========== ===========
Accumulation units outstanding........................................ 58,063 9,966
=========== ===========
Unit value............................................................ $ 1.009777 $ 1.019200
=========== ===========
</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 SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
<S> <C> <C> <C>
Investment income
Distributions.................................................... $ 34,069 $ 45,279 $ 276,334
Expenses
Mortality and expense risk charges............................... 3,416 176,605 18,611
----------- ------------ ----------
Net investment income............................................... 30,653 (131,326) 257,723
----------- ------------ ----------
Net realized gain (loss) from share transactions.................... -- 115,904 (5,762)
Net realized gain distribution from Fund............................ -- 1,458,124 22,699
Net unrealized appreciation (depreciation) on investment............ -- 7,944,733 (454,168)
----------- ------------ ----------
Net gain (loss) on investments...................................... -- 9,518,761 (437,231)
----------- ------------ ----------
Net increase (decrease) in net assets resulting from operations..... $ 30,653 $ 9,387,435 $ (179,508)
=========== =========== ==========
STRATEGIC
ALLOCATION INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
Investment income
Distributions.................................................... $ 331,457 $ -- $ 3,487
Expenses
Mortality and expense risk charges............................... 88,167 7,050 738
----------- ------------ ----------
Net investment income (loss)........................................ 243,290 (7,050) 2,749
----------- ------------ ----------
Net realized gain (loss) from share transactions.................... 62,550 10,048 15,781
Net realized gain distribution from Fund............................ 1,229,190 260,506 5,438
Net unrealized appreciation (depreciation) on investment............ 1,781,538 63,522 (363)
----------- ------------ ----------
Net gain (loss) on investments...................................... 3,073,278 334,076 20,856
----------- ------------ ----------
Net increase (decrease) in net assets resulting from operations..... $ 3,316,568 $ 327,026 $ 23,605
=========== ============ ==========
ABERDEEN
REAL ESTATE STRATEGIC THEME NEW ASIA
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
Investment income
Distributions.................................................... $ 3,665 $ 375 $ 117
Expenses
Mortality and expense risk charges............................... 394 1,845 132
----------- ------------ ----------
Net investment income (loss)........................................ 3,271 (1,470) (15)
----------- ------------ ----------
Net realized gain (loss) from share transactions.................... (5) 5,703 (53)
Net realized gain distribution from Fund............................ 87 23,881 --
Net unrealized appreciation (depreciation) on investment............ (23,427) 115,793 (1,944)
----------- ------------ ----------
Net gain (loss) on investments...................................... (23,345) 145,377 (1,997)
----------- ------------ ----------
Net increase (decrease) in net assets resulting from operations..... $ (20,074) $ 143,907 $ (2,012)
=========== ============ ==========
SENECA
ENHANCED ENGEMANN MID-CAP
INDEX NIFTY FIFTY GROWTH
SUBACCOUNT SUBACCOUNT(1) SUBACCOUNT(2)
---------- ------------- -------------
Investment income
Distributions.................................................... $ 2,795 $ 33 $ 13
Expenses
Mortality and expense risk charges............................... 1,284 236 39
----------- ------------ ----------
Net investment income (loss)........................................ 1,511 (203) (26)
----------- ------------ ----------
Net realized gain (loss) from share transactions.................... 14 1,379 (4)
Net realized gain distribution from Fund............................ 15,896 -- --
Net unrealized appreciation (depreciation) on investment............ 40,885 13,894 1,884
----------- ------------ ----------
Net gain (loss) on investments...................................... 56,795 15,273 1,880
----------- ------------ ----------
Net increase (decrease) in net assets resulting from operations..... $ 58,306 $ 15,070 $ 1,854
=========== ============ ==========
</TABLE>
(1) From inception April 28, 1998 to December 31, 1998
(2) From inception April 21, 1998 to December 31, 1998
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(2) SUBACCOUNT(2) SUBACCOUNT(3)
------------- ------------- -------------
<S> <C> <C> <C>
Investment income
Distributions.................................................... $ 216 $ 42 $ 21
Expenses
Mortality and expense risk charges............................... 114 29 23
----------- ------------ ----------
Net investment income (loss)........................................ 102 13 (2)
----------- ------------ ----------
Net realized gain (loss) from share transactions.................... (7) (4) (9)
Net realized gain distribution from Fund............................ -- -- --
Net unrealized appreciation (depreciation) on investment............ 4,180 357 (1,156)
----------- ------------ ----------
Net gain (loss) on investments...................................... 4,173 353 (1,165)
----------- ------------ ----------
Net increase (decrease) in net assets resulting from operations..... $ 4,275 $ 366 $ (1,167)
=========== ============ ==========
WANGER WANGER
U.S. INTERNATIONAL
SMALL CAP SMALL CAP
SUBACCOUNT SUBACCOUNT
---------- ----------
Investment income
Distributions.................................................... $ 24,715 $ 1,801
Expenses
Mortality and expense risk charges............................... 2,527 765
----------- ------------
Net investment income (loss)........................................ 22,188 1,036
----------- ------------
Net realized gain (loss) from share transactions.................... (1,168) (2,560)
Net realized gain distribution from Fund............................ -- --
Net unrealized appreciation (depreciation) on investment............ 18,143 20,730
----------- ------------
Net gain (loss) on investments...................................... 16,975 18,170
----------- ------------
Net increase (decrease) in net assets resulting from operations..... $ 39,163 $ 19,206
=========== ============
TEMPLETON TEMPLETON
INTERNATIONAL DEVELOPING MARKETS
SUBACCOUNT(4) SUBACCOUNT(5)
------------- -------------
Investment income
Distributions.................................................... $ -- $ --
Expenses
Mortality and expense risk charges............................... 30 7
----------- ------------
Net investment income (loss)........................................ (30) (7)
----------- ------------
Net realized gain (loss) from share transactions.................... 1 (1)
Net realized gain distribution from Fund............................ -- --
Net unrealized appreciation (depreciation) on investment............ 598 199
----------- ------------
Net gain (loss) on investments...................................... 599 198
----------- ------------
Net increase (decrease) in net assets resulting from operations..... $ 569 $ 191
=========== ============
</TABLE>
(2) From inception April 21, 1998 to December 31, 1998
(3) From inception March 13, 1998 to December 31, 1998
(4) From inception November 23, 1998 to December 31, 1998
(5) From inception November 9, 1998 to December 31, 1998
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 SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..................................... $ 30,653 $ (131,326) $ 257,723
Net realized gain (loss)......................................... -- 1,574,028 16,937
Net unrealized appreciation (depreciation)....................... -- 7,944,733 (454,168)
------------ ------------ -----------
Net increase (decrease) in net assets resulting from operations.. 30,653 9,387,435 (179,508)
------------ ------------ -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 486,770 88,441 126,281
Participant transfers............................................ 965,687 (693,362) (59,435)
Participant withdrawals.......................................... (1,189,945) (1,369,401) (52,100)
------------ ------------ -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 262,512 (1,974,322) 14,746
------------ ------------ -----------
Net increase (decrease) in net assets............................ 293,165 7,413,113 (164,762)
NET ASSETS
Beginning of period.............................................. 507,957 33,195,151 3,721,046
------------ ------------ -----------
End of period.................................................... $ 801,122 $ 40,608,264 $ 3,556,284
============ ============ ===========
STRATEGIC
ALLOCATION INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
FROM OPERATIONS
Net investment income (loss)..................................... $ 243,290 $ (7,050) $ 2,749
Net realized gain (loss)......................................... 1,291,740 270,554 21,219
Net unrealized appreciation (depreciation)....................... 1,781,538 63,522 (363)
------------ ------------ -----------
Net increase (decrease) in net assets resulting from operations.. 3,316,568 327,026 23,605
------------ ------------ -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 172,594 10,726 898
Participant transfers............................................ (707,451) 121,752 (81,691)
Participant withdrawals.......................................... (1,109,396) (128,944) (21,600)
------------ ------------ -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. (1,644,253) 3,534 (102,393)
------------ ------------ -----------
Net increase (decrease) in net assets............................ 1,672,315 330,560 (78,788)
NET ASSETS
Beginning of period.............................................. 17,502,084 1,205,961 192,459
------------ ------------ -----------
End of period.................................................... $ 19,174,399 $ 1,536,521 $ 113,671
============ ============ ===========
ABERDEEN
REAL ESTATE STRATEGIC THEME NEW ASIA
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
FROM OPERATIONS
Net investment income (loss)..................................... $ 3,271 $ (1,470) $ (15)
Net realized gain (loss)......................................... 82 29,584 (53)
Net unrealized appreciation (depreciation)....................... (23,427) 115,793 (1,944)
------------ ------------ -----------
Net increase (decrease) in net assets resulting from operations.. (20,074) 143,907 (2,012)
------------ ------------ -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 232 12,934 --
Participant transfers............................................ (21,663) (129,618) 10,000
Participant withdrawals.......................................... (2,485) (43,120) (266)
------------ ------------ -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. (23,916) (159,804) 9,734
------------ ------------ -----------
Net increase (decrease) in net assets............................ (43,990) (15,897) 7,722
NET ASSETS
Beginning of period.............................................. 113,057 427,004 20,007
------------ ------------ -----------
End of period.................................................... $ 69,067 $ 411,107 $ 27,729
============ ============ ===========
</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 SUBACCOUNT(1) SUBACCOUNT(2)
---------- ------------- -------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..................................... $ 1,511 $ (203) $ (26)
Net realized gain (loss)......................................... 15,910 1,379 (4)
Net unrealized appreciation (depreciation)....................... 40,885 13,894 1,884
---------- --------- ---------
Net increase (decrease) in net assets resulting from operations.. 58,306 15,070 1,854
---------- --------- ---------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 3,734 3,828 2,490
Participant transfers............................................ 254,523 68,638 12,002
Participant withdrawals.......................................... (3,798) (2,934) (60)
---------- --------- ---------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 254,459 69,532 14,432
---------- --------- ---------
Net increase (decrease) in net assets............................ 312,765 84,602 16,286
NET ASSETS
Beginning of period.............................................. 58,649 0 0
---------- --------- ---------
End of period.................................................... $ 371,414 $ 84,602 $ 16,286
========== ========= =========
GROWTH SCHAFER
AND INCOME VALUE EQUITY MID-CAP
SUBACCOUNT(2) SUBACCOUNT(2) SUBACCOUNT(3)
------------- ------------- -------------
FROM OPERATIONS
Net investment income (loss)..................................... $ 102 $ 13 $ (2)
Net realized gain (loss)......................................... (7) (4) (9)
Net unrealized appreciation (depreciation)....................... 4,180 357 (1,156)
---------- --------- ---------
Net increase (decrease) in net assets resulting from operations.. 4,275 366 (1,167)
---------- --------- ---------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 7,469 -- --
Participant transfers............................................ 41,999 9,714 8,460
Participant withdrawals.......................................... (204) (42) (28)
---------- --------- ---------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 49,264 9,672 8,432
---------- --------- ---------
Net increase (decrease) in net assets............................ 53,539 10,038 7,265
NET ASSETS
Beginning of period.............................................. 0 0 0
---------- --------- ---------
End of period.................................................... $ 53,539 $ 10,038 $ 7,265
========== ========= =========
WANGER WANGER
U.S. INTERNATIONAL
SMALL CAP SMALL CAP
SUBACCOUNT SUBACCOUNT
---------- ----------
FROM OPERATIONS
Net investment income (loss)..................................... $ 22,188 $ 1,036
Net realized gain (loss)......................................... (1,168) (2,560)
Net unrealized appreciation (depreciation)....................... 18,143 20,730
---------- ---------
Net increase (decrease) in net assets resulting from operations.. 39,163 19,206
---------- ---------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 6,509 142
Participant transfers............................................ 139,320 (31,046)
Participant withdrawals.......................................... (119,121) (2,397)
---------- ---------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 26,708 (33,301)
---------- ---------
Net increase (decrease) in net assets............................ 65,871 (14,095)
NET ASSETS
Beginning of period.............................................. 506,196 146,377
---------- ---------
End of period.................................................... $ 572,067 $ 132,282
========== =========
</TABLE>
(1) From inception April 28, 1998 to December 31, 1998
(2) From inception April 21, 1998 to December 31, 1998
(3) From inception March 13, 1998 to December 31, 1998
See Notes to Financial Statements
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON
TEMPLETON DEVELOPING
INTERNATIONAL MARKETS
SUBACCOUNT(4) SUBACCOUNT(5)
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss)..................................... $ (30) $ (7)
Net realized gain (loss)......................................... 1 (1)
Net unrealized appreciation (depreciation)....................... 598 199
--------- ---------
Net increase (decrease) in net assets resulting from operations.. 569 191
--------- ---------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. -- --
Participant transfers............................................ 58,235 10,000
Participant withdrawals.......................................... (173) (34)
--------- ---------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. 58,062 9,966
--------- ---------
Net increase (decrease) in net assets............................ 58,631 10,157
NET ASSETS
Beginning of period.............................................. 0 0
--------- ---------
End of period.................................................... $ 58,631 $ 10,157
========= =========
</TABLE>
(4) From inception November 23, 1998 to December 31, 1998
(5) From inception November 9, 1998 to December 31, 1998
See Notes to Financial Statements
8
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
MULTI-SECTOR
MONEY MARKET GROWTH FIXED INCOME
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income............................................ $ 32,748 $ 39,817 $ 236,378
Net realized gain................................................ -- 5,258,165 96,168
Net unrealized appreciation...................................... -- 406,199 13,298
--------- ----------- -----------
Net increase in net assets resulting from operations............. 32,748 5,704,181 345,844
--------- ----------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 20,734 31,261 1,248
Participant transfers............................................ (485,415) (14,615) 102,450
Participant withdrawals.......................................... (38,213) (863,532) (58,294)
--------- ----------- -----------
Net increase (decrease) in net assets resulting from participant
transactions.................................................. (502,894) (846,886) 45,404
--------- ----------- -----------
Net increase (decrease) in net assets............................ (470,146) 4,857,295 391,248
NET ASSETS
Beginning of period.............................................. 978,103 28,337,856 3,329,798
--------- ----------- -----------
End of period.................................................... $ 507,957 $33,195,151 $ 3,721,046
========= =========== ===========
STRATEGIC
ALLOCATION INTERNATIONAL BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ----------
FROM OPERATIONS
Net investment income............................................ $ 279,202 $ 13,746 $ 6,335
Net realized gain................................................ 2,197,643 173,937 35,646
Net unrealized appreciation (depreciation)....................... 531,049 (41,169) (10,412)
----------- ----------- ----------
Net increase in net assets resulting from operations............. 3,007,894 146,514 31,569
----------- ----------- ----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 109,277 7,986 1,666
Participant transfers............................................ (317,620) (241,204) (30,741)
Participant withdrawals.......................................... (557,654) (74,579) (176,265)
----------- ----------- ----------
Net decrease in net assets resulting from participant transactions (765,997) (307,797) (205,340)
----------- ----------- ----------
Net increase (decrease) in net assets............................ 2,241,897 (161,283) (173,771)
NET ASSETS
Beginning of period.............................................. 15,260,187 1,367,244 366,230
----------- ----------- ----------
End of period.................................................... $17,502,084 $ 1,205,961 $ 192,459
=========== =========== ==========
</TABLE>
See Notes to Financial Statements
9
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1997
(CONTINUED)
<TABLE>
<CAPTION>
ABERDEEN
REAL ESTATE STRATEGIC THEME NEW ASIA
SUBACCOUNT SUBACCOUNT SUBACCOUNT(1)
---------- ---------- -------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..................................... $ 2,558 $ (203) $ 743
Net realized gain (loss)......................................... 3,710 52,208 (695)
Net unrealized appreciation (depreciation)....................... 9,852 (15,711) (10,570)
-------- ---------- -----------
Net increase (decrease) in net assets resulting from operations.. 16,120 36,294 (10,522)
-------- ---------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. 1,571 12,472 --
Participant transfers............................................ 85,333 212,505 30,856
Participant withdrawals.......................................... (2,416) (43,070) (327)
-------- ---------- -----------
Net increase in net assets resulting from participant transactions 84,488 181,907 30,529
-------- ---------- -----------
Net increase in net assets....................................... 100,608 218,201 20,007
NET ASSETS
Beginning of period.............................................. 12,449 208,803 0
-------- ---------- -----------
End of period.................................................... $113,057 $ 427,004 $ 20,007
======== ========== ===========
WANGER WANGER
ENHANCED INTERNATIONAL U.S.
INDEX SMALL CAP SMALL CAP
SUBACCOUNT(2) SUBACCOUNT SUBACCOUNT
------------- ---------- ----------
FROM OPERATIONS
Net investment income............................................ $ 207 $ 1,963 $ 3,980
Net realized gain (loss)......................................... 258 (68) 814
Net unrealized appreciation (depreciation)....................... 275 (9,128) 60,894
Net increase (decrease) in net assets resulting from operations.. 740 (7,233) 65,688
-------- ---------- -----------
FROM ACCUMULATION UNIT TRANSACTIONS
Participant deposits............................................. -- 1,559 2,102
Participant transfers............................................ 58,145 149,460 450,846
Participant withdrawals.......................................... (236) (7,607) (27,955)
-------- ---------- -----------
Net increase in net assets resulting from participant transactions 57,909 143,412 424,993
-------- ----------
Net increase in net assets....................................... 58,649 136,179 490,681
NET ASSETS
Beginning of period.............................................. 0 10,198 15,515
-------- ---------- -----------
End of period.................................................... $ 58,649 $ 146,377 $ 506,196
======== ========== ===========
</TABLE>
(1) From inception January 6, 1997 to December 31, 1997
(2) From inception September 22, 1997 to December 31, 1997
See Notes to Financial Statements
10
<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 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 19 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
International Series invests in stocks and debt obligations of companies and
governments outside of 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. 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.
11
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE 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................................................................... $2,307,660 $2,014,371
Growth......................................................................... 1,960,991 2,606,153
Multi-Sector Fixed Income...................................................... 461,429 166,306
Strategic Allocation........................................................... 1,729,252 1,900,572
International.................................................................. 407,145 150,027
Balanced....................................................................... 9,286 103,526
Real Estate.................................................................... 6,408 27,008
Strategic Theme................................................................ 24,855 162,265
Aberdeen New Asia.............................................................. 10,117 394
Enhanced Index................................................................. 276,854 4,743
Engemann Nifty Fifty........................................................... 142,426 73,063
Seneca Mid-Cap Growth.......................................................... 14,501 88
Growth and Income.............................................................. 49,671 283
Value Equity .................................................................. 9,754 66
Schafer Mid-Cap................................................................ 8,481 48
Wanger Advisors Trust:
U.S. Small Cap................................................................. 181,645 132,732
International Small Cap........................................................ 13,680 45,954
The Templeton Variable Products Series Fund:
International ................................................................. 58,236 174
Developing Markets ............................................................ 10,000 33
</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 291,427 7,653,211 1,451,093 6,055,691 650,153 107,226
Participant deposits................. 272,723 18,958 3,095 55,853 4,797 461
Participant transfers................ 550,868 (150,756) 30,543 (234,434) 54,653 (43,079)
Participant withdrawals.............. (675,481) (284,421) (32,616) (357,465) (58,864) (11,130)
-------- --------- --------- --------- ------- -------
Units outstanding, end of period..... 439,537 7,236,992 1,452,115 5,519,645 650,739 53,478
======== ========= ========= ========= ======= =======
SENECA
REAL STRATEGIC ABERDEEN ENHANCED ENGEMANN NIFTY MID-CAP
ESTATE THEME NEW ASIA INDEX FIFTY GROWTH
------ ----- -------- ----- ----- ------
Units outstanding, beginning of period 71,147 365,357 29,593 57,784 0 0
Participant deposits................. 183 8,215 -- 3,066 3,111 2,672
Participant transfers................ (14,164) (98,454) 13,969 221,661 71,335 12,542
Participant withdrawals.............. (1,733) (30,801) (423) (3,232) (3,591) (66)
-------- --------- --------- --------- ------- -------
Units outstanding, end of period..... 55,433 244,317 43,139 279,279 70,855 15,148
======== ========= ========= ========= ======= =======
GROWTH WANGER WANGER
AND VALUE SCHAFER U.S. INTERNATIONAL
INCOME EQUITY MID-CAP SMALL CAP SMALL CAP
------ ------ ------- --------- ---------
Units outstanding, beginning of period 0 0 0 384,787 145,518
Participant deposits................. 7,402 -- -- 5,129 111
Participant transfers................ 41,117 9,777 8,461 31,234 (29,957)
Participant withdrawals.............. (204) (47) (34) (19,056) (2,061)
-------- --------- --------- --------- -------
Units outstanding, end of period..... 48,315 9,730 8,427 402,094 113,611
======== ========= ========= ========= =======
TEMPLETON
TEMPLETON DEVELOPING
INTERNATIONAL MARKETS
------------- -------
Units outstanding, beginning of period 0 0
Participant deposits................. -- --
Participant transfers................ 58,236 10,000
Participant withdrawals.............. (173) (34)
-------- ---------
Units outstanding, end of period..... 58,063 9,966
======== =========
</TABLE>
12
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
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 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'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 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 Subaccounts. 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 $640,106 during the period ended December 31, 1998.
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
unpaid acquisition expense allowance is deducted from the policy value and paid
to Phoenix.
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.
An acquisition expense allowance is paid to Phoenix 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 for distribution expenses incurred, an issue administration charge of
1.0% of the issue premium to compensate Phoenix for underwriting and start-up
expenses and premium taxes which currently range from 0.75% to 4% of premiums
paid based on the state where the policyowner resides. In the event of a
surrender before ten years, the unpaid balance of the acquisition expense
allowance is deducted and paid to Phoenix.
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 0.50% 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 believes that the Account satisfies the current requirements
of the regulations, and it intends that the Account will continue to meet such
requirements.
13
<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 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 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 International and Templeton Developing Markets (constituting the
Phoenix Home Life Variable Universal Life 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
14
<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
