<PAGE>
SEMI-ANNUAL REPORT
. PACIFIC SELECT SEPARATE ACCOUNT OF
PACIFIC MUTUAL LIFE INSURANCE COMPANY
[LOGO OF PACIFIC SELECT]
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENTS OF ASSETS & LIABILITIES
JUNE 30, 1995 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
High
Money Managed Government Yield
Market Bond Securities Bond
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Money Market Portfolio (140 shares; cost $1,413).............. $ 1,406
Managed Bond Portfolio (42 shares; cost $434)................. $ 446
Government Securities Portolio (33 shares; cost $355)......... $ 344
High Yield Bond Portfolio (369 shares; cost $3,282)........... $ 3,507
Growth Portfolio (442 shares; cost $6,936)....................
Equity Income Portfolio (136 shares; cost $1,983).............
Multi-Strategy Portfolio (59 shares; cost $666)...............
International Portfolio (125 shares, cost $1,484).............
Equity Index Portfolio (17 shares; cost $205).................
Growth LT Portfolio (49 shares; cost $570)....................
-------- -------- --------- --------
TOTAL ASSETS..................................................... 1,406 446 344 3,507
-------- -------- --------- --------
LIABILITIES
Payables:
Mortality and expense risk fee................................ 2 1 1 6
-------- -------- ---------- ---------
TOTAL LIABILITIES................................................ 2 1 1 6
-------- -------- ---------- ---------
NET ASSETS....................................................... $ 1,404 $ 445 $ 343 $ 3,501
======== ======== ========== =========
<CAPTION>
Equity Multi- Inter-
Growth Income Strategy national
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Money Market Portfolio (140 shares; cost $1,413)..............
Managed Bond Portfolio (42 shares; cost $434).................
Government Securities Portolio (33 shares; cost $355).........
High Yield Bond Portfolio (369 shares; cost $3,282)...........
Growth Portfolio (442 shares; cost $6,936).................... $ 7,461
Equity Income Portfolio (136 shares; cost $1,983)............. $ 2,220
Multi-Strategy Portfolio (59 shares; cost $666)............... $ 780
International Portfolio (125 shares, cost $1,484)............. $ 1,594
Equity Index Portfolio (17 shares; cost $205).................
Growth LT Portfolio (49 shares; cost $570)....................
-------- -------- --------- --------
TOTAL ASSETS..................................................... 7,461 2,220 780 1,594
-------- -------- --------- --------
LIABILITIES
Payables:
Mortality and expense risk fee................................ 12 4 1 3
-------- -------- --------- ---------
TOTAL LIABILITIES................................................ 12 4 1 3
-------- -------- --------- ---------
NET ASSETS....................................................... $ 7,449 $ 2,216 $ 779 $ 1,591
======== ======== ========= =========
<CAPTION>
Equity Growth
Index LT
Variable Variable
Account Account
-------- --------
<S> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Money Market Portfolio (140 shares; cost $1,413)..............
Managed Bond Portfolio (42 shares; cost $434).................
Government Securities Portolio (33 shares; cost $355).........
High Yield Bond Portfolio (369 shares; cost $3,282)...........
Growth Portfolio (442 shares; cost $6,936)....................
Equity Income Portfolio (136 shares; cost $1,983).............
Multi-Strategy Portfolio (59 shares; cost $666)...............
International Portfolio (125 shares, cost $1,484).............
Equity Index Portfolio (17 shares; cost $205)................. $ 266
Growth LT Portfolio (49 shares; cost $570).................... $ 646
-------- --------
TOTAL ASSETS..................................................... 266 646
-------- --------
LIABILITIES
Payables:
Mortality and expense risk fee................................ 1 1
-------- --------
TOTAL LIABILITIES................................................ 1 1
-------- --------
NET ASSETS....................................................... $ 265 $ 645
======== ========
</TABLE>
See Notes to Financial Statements.
B-1
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1995 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
High
Money Managed Government Yield
Market Bond Securities Bond
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends...................................................... $ 38 $ 13 $ 9 $ 132
EXPENSES
Mortality and expense risk fee................................. 5 1 1 12
------- ------- ------- -------
NET INVESTMENT INCOME (LOSS)...................................... 33 12 8 120
------- ------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security transactions............ (1) (2) 5
Net unrealized appreciation on investments..................... 3 19 27 206
------- ------- ------- -------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS.................................................. 2 19 25 211
------- ------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... $ 35 $ 31 $ 33 $ 331
======= ======= ======= =======
<CAPTION>
Equity Multi- Inter-
Growth Income Strategy national
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends...................................................... $ 35 $ 20 $ 14 $ 2
EXPENSES
Mortality and expense risk fee................................. 25 8 3 5
------- ------- ------- -------
NET INVESTMENT INCOME (LOSS)...................................... 10 12 11 (3)
------- ------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security transactions............ 108 104 2 3
Net unrealized appreciation on investments..................... 817 240 83 107
------- ------- ------- -------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS.................................................. 925 344 85 110
------- ------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... $ 935 $ 356 $ 96 $ 107
======= ======= ======= =======
<CAPTION>
Equity Growth
Index LT
Variable Variable
Account Account
-------- --------
<S> <C> <C>
INVESTMENT INCOME
Dividends...................................................... $ 3 $ 4
EXPENSES
Mortality and expense risk fee................................. 1 1
------- -------
NET INVESTMENT INCOME (LOSS)...................................... 2 3
------- -------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security transactions............ 8 3
Net unrealized appreciation on investments..................... 38 72
------- -------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS.................................................. 46 75
------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... $ 48 $ 78
======= =======
</TABLE>
See Notes to Financial Statements.
B-2
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED JUNE 30, 1995 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
High
Money Managed Government Yield
Market Bond Securities Bond
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss).................................... $ 33 $ 12 $ 8 $ 120
Net realized gain (loss) from security transactions............. (1) (2) 5
Net unrealized appreciation on investments...................... 3 19 27 206
-------- ------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... 35 31 33 331
-------- ------- ------- -------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfers--policy charges and deductions........................ (11) (2) (2) (14)
Transfers in (from other variable accounts)..................... 28 306 1 27
Transfers out (to other variable accounts)...................... (1,035) (28)
Transfers--other................................................ (15) (2) (14) (17)
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS................................ (1,033) 302 (15) (32)
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS............................. (998) 333 18 299
NET ASSETS
Beginning of period............................................ 2,402 112 325 3,202
-------- ------- ------- -------
End of period.................................................. $ 1,404 $ 445 $ 343 $ 3,501
======== ======= ======= =======
<CAPTION>
Equity Multi- Inter-
Growth Income Strategy national
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss).................................... $ 10 $ 12 $ 11 $ (3)
Net realized gain (loss) from security transactions............. 108 104 2 3
Net unrealized appreciation on investments...................... 817 240 83 107
-------- ------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... 935 356 96 107
-------- ------- ------- -------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfers--policy charges and deductions........................ (25) (12) (7) (24)
Transfers in (from other variable accounts)..................... 1,074 301 413
Transfers out (to other variable accounts)...................... (873) (710) 10
Transfers--other................................................ (55) (57) (60)
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS................................ 121 (478) (7) 339
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS............................. 1,056 (122) 89 446
NET ASSETS
Beginning of period............................................ 6,393 2,338 690 1,145
-------- ------- ------- -------
End of period.................................................. $ 7,449 $ 2,216 $ 779 $ 1,591
======== ======= ======= =======
<CAPTION>
Equity Growth
Index LT
Variable Variable
Account Account
-------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss).................................... $ 2 $ 3
Net realized gain (loss) from security transactions............. 8 3
Net unrealized appreciation on investments...................... 38 72
-------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... 48 78
-------- -------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfers--policy charges and deductions........................ (8) (3)
Transfers in (from other variable accounts)..................... 487
Transfers out (to other variable accounts)......................
Transfers--other................................................ (23) (13)
-------- -------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS................................ (31) 471
-------- -------
NET INCREASE (DECREASE) IN NET ASSETS............................. 17 549
NET ASSETS
Beginning of period............................................ 248 96
-------- -------
End of period.................................................. $ 265 $ 645
======== =======
</TABLE>
See Notes to Financial Statemens.
B-3
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
High
Money Managed Government Yield
Market Bond Securities Bond
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income........................................... $ 46 $ 46 $ 13 $ 252
Net realized gain (loss) from security transactions............. 2 (50) (6) 6
Net unrealized appreciation (depreciation) on investments....... (9) (86) (30) (268)
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................................... 39 (90) (23) (10)
-------- ------- ------- -------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums........................................
Transfers--policy charges and deductions........................ (35) (24) (66) (13)
Transfers in (from other variable accounts)..................... 2,332 142 38 64
Transfers out (to other variable accounts)...................... (460) (2,301) (38) (85)
Transfers--other................................................ (1)
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS................................ 1,837 (2,184) (66) (34)
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS............................. 1,876 (2,274) (89) (44)
NET ASSETS
Beginning of period............................................ 526 2,386 414 3,246
-------- ------- ------- -------
End of period.................................................. $ 2,402 $ 112 $ 325 $ 3,202
======== ======= ======= =======
<CAPTION>
Equity Multi- Inter-
Growth Income Strategy national
Variable Variable Variable Variable
Account Account Account Account
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income........................................... $ 501 $ 201 $ 37 $ 39
Net realized gain (loss) from security transactions............. 118 50 24 52
Net unrealized appreciation (depreciation) on investments....... (1,427) (274) (76) (65)
-------- ------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... (808) (23) (15) 26
-------- ------- ------- -------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums........................................ 1
Transfers--policy charges and deductions........................ (241) (158) (58) (129)
Transfers in (from other variable accounts)..................... 345 384 32 328
Transfers out (to other variable accounts)...................... (225) (356) (116) (179)
Transfers--other................................................ 1 (1)
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS................................ (120) (129) (142) 19
-------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS............................. (928) (152) (157) 45
NET ASSETS
Beginning of period............................................ 7,321 2,490 847 1,100
-------- ------- ------- -------
End of period.................................................. $ 6,393 $ 2,338 $ 690 $ 1,145
======== ======= ======= =======
<CAPTION>
Equity Growth
Index LT
Variable Variable
Account Account
-------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income........................................... $ 5 $ 1
Net realized gain (loss) from security transactions............. 9
Net unrealized appreciation (depreciation) on investments....... (13) 4
-------- -------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................................... 1 5
-------- -------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums........................................
Transfers--policy charges and deductions........................ (59) (1)
Transfers in (from other variable accounts)..................... 8 92
Transfers out (to other variable accounts)...................... (2)
Transfers--other................................................
-------- -------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS................................ (53) 91
-------- -------
NET INCREASE (DECREASE) IN NET ASSETS............................. (52) 96
NET ASSETS
Beginning of period............................................ 300
-------- -------
End of period.................................................. $ 248 $ 96
======== =======
</TABLE>
See Notes to Financial Statemens.
B-4
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Pacific Select Separate Account (the "Separate Account") is registered
as a unit investment trust under the Investment Company Act of 1940, as amended,
and is currently comprised of ten subaccounts ("Variable Accounts"): the Money
Market Variable Account, the Managed Bond Variable Account, the Government
Securities Variable Account, the High Yield Bond Variable Account, the Growth
Variable Account, the Equity Income Variable Account, the Multi-Strategy
Variable Account, the International Variable Account, the Equity Index Variable
Account, the Growth LT Variable Account. The assets in each Variable Account are
invested in shares of the corresponding portfolios of Pacific Select Fund (the
"Fund"), each of which pursues different investment objectives and policies.
The Separate Account was established by Pacific Mutual Life Insurance
Company ("Pacific Mutual") on November 30, 1986 and commenced operations on
January 7, 1988. Under applicable insurance law, the assets and liabilities of
the Separate Account are clearly identified and distinguished from the other
assets and liabilities of Pacific Mutual. The assets of the Separate Account
will not be charged with any liabilities arising out of any other business
conducted by Pacific Mutual, but the obligations of the Separate Account,
including benefits related to variable life insurance, are obligations of
Pacific Mutual.
A. Valuation of Investments
Investments in shares of the Fund are valued at the reported net asset
values of the respective portfolios.
B. Security Transactions
Transactions are recorded on the trade date. Realized gains and losses on
sales of investments are determined on the basis of identified cost basis.
C. Federal Income Taxes
The operations of the Separate Account will be reported on the Federal
income tax return of Pacific Mutual, which is taxed as a life insurance company
under the provisions of the Tax Reform Act of 1986. Under current tax law, no
Federal income taxes are expected to be paid by Pacific Mutual with respect to
the operations of the Separate Account.
2. DIVIDENDS
During 1995, the Fund has declared dividends for each portfolio. The
amounts accrued by the Separate Account for its share of the dividends were
reinvested in additional full and fractional shares of each related portfolio.
3. CHARGES AND EXPENSES
Pacific Mutual charges the Separate Account daily for mortality and expense
risks assumed with respect to variable life insurance policies funded by the
Separate Account at an annual rate of 0.70% of the average daily net assets of
each Variable Account. Under the policies, Pacific Mutual makes certain
deductions from the net assets of each Variable Account for sales load,
administrative expenses, state premium taxes, cost of insurance and charges for
optional benefits. The operating expenses of the Separate Account are paid by
Pacific Mutual.
4. RELATED PARTY AGREEMENT
Pacific Equities Network, an indirect subsidiary of Pacific Mutual, is the
principal underwriter of variable life insurance policies funded by interests in
the Separate Account, and is compensated by Pacific Mutual.
B-5
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
5. SELECTED ACCUMULATION UNIT**INFORMATION
Selected accumulation unit information for the period ended June 30, 1995
were as follows:
<TABLE>
<CAPTION>
High
Money Managed Government Yield
Market Bond Securities Bond Growth
Variable Variable Variable Variable Variable
Account Account Account Account Account
-------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
ACCUMULATION UNIT VALUE:
Beginning $ 13.79 $ 16.61 $ 16.00 $ 17.92 $ 22.10
======= ======= ======= ======= =======
Ending $ 14.12 $ 18.37 $ 17.71 $ 19.79 $ 25.08
======= ======= ======= ======= =======
Number of Units Outstanding
at End of Period 99,402 24,209 19,366 176,918 297,037
<CAPTION>
Equity Multi- Inter- Equity Growth
Income Strategy national Index LT
Variable Variable Variable Variable Variable
Account Account Account Account Account
-------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
ACCUMULATION UNIT VALUE:
Beginning $ 17.71 $ 16.93 $ 15.34 $ 13.42 $ 11.25
======= ======= ======= ======= =======
Ending $ 20.75 $ 19.30 $ 16.35 $ 16.07 $ 13.34
======= ======= ======= ======= =======
Number of Units Outstanding
at End of Period 106,799 40,357 97,328 16,519 48,355
</TABLE>
- ------------
** Accumulation Unit: unit of measure used to calculate the value of a Contract
Owner's interest in a Variable Account during the Accumulation Period.
B-6
