<PAGE>
1998 Annual Report
. Pacific Select Separate Account of
Pacific Life Insurance Company
[LOGO OF PACIFIC SELECT]
<PAGE>
Dear Pacific Select Policy Owner:
We are pleased to share with you the 1998 Annual Report of the Pacific Select
Separate Account ("Separate Account") of Pacific Life Insurance Company
("Pacific Life").
The Separate Account supports your Pacific Select Flexible Premium Variable
Universal Life Insurance Policy ("the Policy") from Pacific Life. The Separate
Account is divided into subaccounts, called Variable Accounts. A fixed account
option is also available.
The following indicates the Accumulated Values and Cash Surrender Values as of
December 31, 1998, assuming a hypothetical policy was purchased (1) on the date
each Variable Account began operations, and (2) on January 2, 1998, if later.
Also assumed is that 100% of the premium payment was allocated to such Variable
Account. The Policy is based on an insured male, nonsmoker, age 55, single
premium payment of $50,000 (also Guideline Single Premium), and a Level and
Initial Death Benefit of $134,671:
<TABLE>
<CAPTION>
Variable Accounts
--------------------------------------------------------------------------------------------------
Money High Yield Managed Government Aggressive Growth
Market Bond Bond Securities Growth Equity LT
1/07/88* 7/14/88* 2/22/88* 7/01/88* 2/18/88* 1/15/97* 1/04/94*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**......................... $66,693.09 $113,516.71 $103,982.66 $ 98,805.92 $203,467.67 $55,504.92 $147,802.91
CSV***....................... 66,693.09 113,316.71 103,949.33 98,605.92 203,434.33 51,904.92 145,402.91
(2) Policy Purchased on 1/2/98
AV**......................... 51,735.53 50,313.24 53,449.89 53,490.45 50,406.69 56,281.27 77,661.01
CSV***....................... 47,735.53 46,313.24 49,449.89 49,490.45 46,406.69 52,281.27 73,661.01
<CAPTION>
Equity Multi- Equity Inter- Emerging
Income Strategy Equity Index national Markets
3/21/88* 2/22/88* 5/12/98* 2/12/91* 2/18/88* 1/15/97*
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Policy Purchased on Date Variable Account Began Operations
AV**......................... $192,469.05 $144,098.10 $53,651.02 $171,031.01 $98,677.56 $32,129.95
CSV***....................... 192,402.39 144,064.76 49,651.02 169,797.68 98,644.22 28,529.95
(2) Policy Purchased on 1/2/98
AV**......................... 60,804.57 57,853.17 62,963.49 51,777.07 35,680.79
CSV***....................... 56,804.57 53,853.17 58,963.49 47,777.07 31,680.79
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Date Variable Account began operations.
**Accumulated Value: Includes deductions for all policy charges, including
cost of insurance, except surrender charges. Cost of insurance rates vary
depending on age and smoking status.
***Cash Surrender Value: Includes deductions for all policy charges, including
surrender charges that would have been deducted if the policy had been
surrendered on December 31, 1998. Surrender charges vary by policy.
* * * *
If you have any questions, please contact your Registered Representative, or
call Pacific Life's Marketing Department at our toll free number 1-800-800-7681.
Sincerely,
/s/ Thomas C. Sutton
Thomas C. Sutton
Chairman and Chief Executive Officer
Pacific Life Insurance Company
1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Pacific Life Insurance Company
We have audited the accompanying statement of assets and liabilities of
Pacific Select Separate Account (comprised of the Money Market, High Yield Bond,
Managed Bond, Government Securities, Growth, Aggressive Equity, Growth LT,
Equity Income, Multi-Strategy, Equity, Equity Index, International and Emerging
Markets Variable Accounts) as of December 31, 1998 and the related statement of
operations for the year then ended (as to the Equity Variable Account, for the
period from commencement of operations through December 31, 1998) and statement
of changes in net assets for each of the two years in the period then ended (as
to the Aggressive Equity Variable Account and the Emerging Markets Variable
Account, for the year ended December 31, 1998 and for the period from
commencement of operations through December 31, 1997, and the Equity Variable
Account, for the period from commencement of operations through December 31,
1998). These financial statements are the responsibility of the Separate
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of each of the respective Variable Accounts
constituting Pacific Select Separate Account as of December 31, 1998 and the
results of their operations for the year then ended (as to the Equity Variable
Account, for the period from commencement of operations through December 31,
1998) and the changes in their net assets for each of the two years in the
period then ended (as to the Aggressive Equity Variable Account and the Emerging
Markets Variable Account, for the year ended December 31, 1998 and for the
period from commencement of operations through December 31, 1997, and the Equity
Variable Account, for the period from commencement of operations through
December 31, 1998), in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Costa Mesa, California
February 5, 1999
2
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
High Govern-
Money Yield Managed ment Aggressive Growth
Market Bond Bond Securities Growth Equity LT
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Money Market Portfolio (32 shares; cost $318) .......... $318
High Yield Bond Portfolio (661 shares; cost $6,147) .... $6,169
Managed Bond Portfolio (63 shares; cost $678) .......... $720
Government Securities Portfolio (29 shares; cost $306) . $314
Growth Portfolio (302 shares; cost $5,239) ............. $6,914
Aggressive Equity Portfolio (10 shares; cost $108) ..... $123
Growth LT Portfolio (74 shares; cost $1,035) ........... $1,944
-------------------------------------------------------------------------
Total Assets ............................................ 318 6,169 720 314 6,914 123 1,944
-------------------------------------------------------------------------
LIABILITIES
Payables:
Mortality and expense risk fee ......................... 4 4 1
-------------------------------------------------------------------------
Total Liabilities ....................................... 0 4 0 0 4 0 1
-------------------------------------------------------------------------
NET ASSETS .............................................. $318 $6,165 $720 $314 $6,910 $123 $1,943
-------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
3
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES (Continued)
DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Equity Multi- Equity Inter- Emerging
Income Strategy Equity Index national Markets
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Equity Income Portfolio (141 shares; cost $2,402) ......... $3,804
Multi-Strategy Portfolio (67 shares; cost $858) ........... $1,165
Equity Portfolio (6 shares; cost $149) .................... $161
Equity Index Portfolio (131 shares; cost $2,597) .......... $4,253
International Portfolio (270 shares; cost $3,709) ......... $4,259
Emerging Markets Portfolio (15 shares; cost $150) ......... $100
----------------------------------------------------------------------
Total Assets ............................................... 3,804 1,165 161 4,253 4,259 100
----------------------------------------------------------------------
LIABILITIES
Payables:
Mortality and expense risk fee ............................ 2 1 3 2
----------------------------------------------------------------------
Total Liabilities .......................................... 2 1 0 3 2
----------------------------------------------------------------------
NET ASSETS ................................................. $3,802 $1,164 $161 $4,250 $4,257 $100
----------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
4
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
High Govern-
Money Yield Managed ment Aggressive Growth
Market Bond Bond Securities Growth Equity LT
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account (1) Account
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends ......................................... $12 $552 $43 $21 $720 $65
EXPENSES
Mortality and expense risk fee .................... 2 43 5 2 47 $1 10
------------------------------------------------------------------------------
Net Investment Income (Loss) ....................... 10 509 38 19 673 (1) 55
------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain from security transactions ...... 9 4 1 148 1 14
Net unrealized appreciation (depreciation) on
investments ...................................... (410) 12 5 (668) 14 636
------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments ....................................... (401) 16 6 (520) 15 650
------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ......................... $10 $108 $54 $25 $153 $14 $705
------------------------------------------------------------------------------
</TABLE>
(1) Total dividend received in full for the year was less than $500.
See Notes to Financial Statements
5
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF OPERATIONS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Equity Multi- Equity Inter- Emerging
Income Strategy Equity Index national Markets
Variable Variable Variable Variable Variable Variable
Account Account Account (1) Account Account Account
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends .................................................... $431 $104 $80 $368 $1
EXPENSES
Mortality and expense risk fee ............................... 25 8 $1 27 31 1
------------------------------------------------------------------
Net Investment Income (Loss) .................................. 406 96 (1) 53 337 0
------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) from security transactions .......... 86 33 97 50 (29)
Net unrealized appreciation (depreciation) on investments .... 235 47 13 780 (184) (19)
------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments ........ 321 80 13 877 (134) (48)
------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .................................... $727 $176 $12 $930 $203 ($48)
------------------------------------------------------------------
</TABLE>
(1) For the period from May 12, 1998 (commencement of operations) to December
31, 1998; total dividend received in full for the period was less than $500.
See Notes to Financial Statements
6
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
High Govern-
Money Yield Managed ment Aggressive Growth
Market Bond Bond Securities Growth Equity LT
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss) ....................... $10 $509 $38 $19 $673 ($1) $55
Net realized gain from security transactions ....... 9 4 1 148 1 14
Net unrealized appreciation (depreciation) on
investments ....................................... (410) 12 5 (668) 14 636
----------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations ......................................... 10 108 54 25 153 14 705
----------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM POLICY TRANSACTIONS
Transfers--policy charges and deductions ........... (9) (39) (5) (1) (71) (9)
Transfers in (from other variable accounts) ........ 570 116 142 1 443 104 49
Transfers out (to other variable accounts) ......... (478) (133) (97) (2) (315) (14) (21)
Transfers--other ................................... 8 12 (2) (37) (157) 1 (16)
----------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Policy Transactions ........................... 91 (44) 38 (39) (100) 91 3
----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ............... 101 64 92 (14) 53 105 708
----------------------------------------------------------------------------
NET ASSETS
Beginning of Year .................................. 217 6,101 628 328 6,857 18 1,235
----------------------------------------------------------------------------
End of Year ........................................ $318 $6,165 $720 $314 $6,910 $123 $1,943
----------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
7
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Equity Multi- Equity Inter- Emerging
Income Strategy Equity Index national Markets
Variable Variable Variable Variable Variable Variable
Account Account Account (1) Account Account Account
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss) ................................... $406 $96 ($1) $53 $337
Net realized gain (loss) from security transactions ............ 86 33 97 50 ($29)
Net unrealized appreciation (depreciation) on investments ...... 235 47 13 780 (184) (19)
-----------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations . 727 176 12 930 203 (48)
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM POLICY TRANSACTIONS
Transfers--policy charges and deductions ....................... (55) (8) (1) (42) (50) (3)
Transfers in (from other variable accounts) .................... 32 11 150 131 95 79
Transfers out (to other variable accounts) ..................... (118) (6) (193) (187) (129)
Transfers--other ............................................... (57) (100) (13) (26) 2
-----------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Policy Transactions ....................................... (198) (103) 149 (117) (168) (51)
-----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ........................... 529 73 161 813 35 (99)
-----------------------------------------------------------------
NET ASSETS
Beginning of Year .............................................. 3,273 1,091 3,437 4,222 199
-----------------------------------------------------------------
End of Year .................................................... $3,802 $1,164 $161 $4,250 $4,257 $100
-----------------------------------------------------------------
</TABLE>
(1) For the period from May 12, 1998 (commencement of operations) to December
31, 1998.
See Notes to Financial Statements
8
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
(In thousands)
<TABLE>
<CAPTION>
High Govern-
Money Yield Managed ment Aggressive
Market Bond Bond Securities Growth Equity
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account (1)
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income ...................................... $9 $467 $30 $15 $598
Net realized gain (loss) from security transactions ........ 14 2 (1) 94
Net unrealized appreciation on investments ................. 6 20 13 895 $1
---------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations ........ 9 487 52 27 1,587 1
---------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM POLICY TRANSACTIONS
Transfers--policy charges and deductions ................... (3) (38) (5) (3) (72)
Transfers in (from other variable accounts) ................ 190 175 109 1 286 17
Transfers out (to other variable accounts) ................. (190) (104) (50) (19) (192)
Transfers--other ........................................... 2 (2) (2) (3) (163)
---------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Policy Transactions ................................... (1) 31 52 (24) (141) 17
---------------------------------------------------------------------
NET INCREASE IN NET ASSETS .................................. 8 518 104 3 1,446 18
---------------------------------------------------------------------
NET ASSETS
Beginning of Year .......................................... 209 5,583 524 325 5,411
---------------------------------------------------------------------
End of Year ................................................ $217 $6,101 $628 $328 $6,857 $18
---------------------------------------------------------------------
</TABLE>
(1) For the period from January 15, 1997 (commencement of operations) to
December 31, 1997.
See Notes to Financial Statements
9
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1997
(In thousands)
<TABLE>
<CAPTION>
Growth Equity Multi- Equity Inter- Emerging
LT Income Strategy Index national Markets
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account (1)
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income .......................................... $56 $182 $78 $127 $124
Net realized gain (loss) from security transactions ............ 54 123 15 53 58 ($1)
Net unrealized appreciation (depreciation) on investments ...... 12 452 83 614 155 (32)
-----------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations . 122 757 176 794 337 (33)
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM POLICY TRANSACTIONS
Transfers--policy charges and deductions ....................... (10) (54) (12) (34) (51) (2)
Transfers in (from other variable accounts) .................... 84 271 4 432 159 342
Transfers out (to other variable accounts) ..................... (179) (464) (4) (36) (131) (34)
Transfers--other ............................................... (15) (82) (25) (60) (39) (74)
-----------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Policy Transactions ....................................... (120) (329) (37) 302 (62) 232
-----------------------------------------------------------------
NET INCREASE IN NET ASSETS ...................................... 2 428 139 1,096 275 199
-----------------------------------------------------------------
NET ASSETS
Beginning of Year .............................................. 1,233 2,845 952 2,341 3,947
-----------------------------------------------------------------
End of Year .................................................... $1,235 $3,273 $1,091 $3,437 $4,222 $199
-----------------------------------------------------------------
</TABLE>
(1) For the period from January 15, 1997 (commencement of operations) to
December 31, 1997.
See Notes to Financial Statements
10
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
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 during 1998 was comprised of fourteen subaccounts called Variable Accounts:
the Money Market Variable Account, the High Yield Bond Variable Account, the
Managed Bond Variable Account, the Government Securities Variable Account, the
Growth Variable Account, the Aggressive Equity Variable Account, the Growth LT
Variable Account, the Equity Income Variable Account, the Multi-Strategy
Variable Account, the Equity Variable Account, the Bond and Income Variable
Account, the Equity Index Variable Account, the International Variable Account,
and the Emerging Markets Variable Account. There was no operational activity in
the Bond and Income Variable Account through December 31, 1998. 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 financial statements of the Fund, including the
schedules of investments, are provided separately and should be read in
conjunction with the Separate Account's financial statements.
The Separate Account was established by Pacific Life Insurance Company
(formerly named Pacific Mutual Life Insurance Company - see Note 1 to Financial
Statements of the Fund) on November 20, 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 Life. The assets of the Separate Account will not be
charged with any liabilities arising out of any other business conducted by
Pacific Life, but the obligations of the Separate Account, including benefits
related to variable life insurance, are obligations of Pacific Life.
The Separate Account held by Pacific Life represents funds from individual
flexible premium variable life insurance policies. The assets of the Separate
Account are carried at market value.
The preparation of the accompanying financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates.
A. Valuation of Investments
Investments in shares of the Fund are valued at the reported net asset
values of the respective portfolios. Valuation of securities held by the Fund is
discussed in the notes to its financial statements.
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.
C. Federal Income Taxes
The operations of the Separate Account will be reported on the Federal
income tax return of Pacific Life, 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 Life with respect to the
operations of the Separate Account.
2. DIVIDENDS
During 1998, the Fund 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 the related portfolio.
3. CHARGES AND EXPENSES
Pacific Life 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 Life 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 Life.
4. RELATED PARTY AGREEMENT
Pacific Mutual Distributors, Inc., a wholly-owned subsidiary of Pacific
Life, serves as principal underwriter of variable life insurance policies funded
by interests in the Separate Account, without remuneration from the Separate
Account.
11
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
5. SEPARATE ACCOUNT'S COST OF INVESTMENTS IN THE FUND SHARES
The investment in the Fund shares are carried at identified cost, which
represents the amount available for investment (including reinvested
distributions of net investment income and realized gains) in such shares after
deduction of mortality and expense risk charges (M&E). The cost and market value
of total Separate Account's investments in the Fund as of December 31, 1998 were
as follows (amounts in thousands):
<TABLE>
<CAPTION>
Variable Accounts
-----------------------------------------------------------
Money High Yield Managed Government
Market Bond Bond Securities Growth
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total cost of investments at beginning of year $218 $5,687 $599 $326 $4,535
Add: Total net proceeds from policy and M&E transactions 230 46 104 264
Reinvested distributions from the Fund:
(a) Net investment income 12 497 34 15 8
(b) Net realized gain 55 9 6 712
-----------------------------------------------------------
Sub-Total 460 6,285 746 347 5,519
Less: Cost of investments disposed during the year 142 138 68 41 280
-----------------------------------------------------------
Total cost of investments at end of year 318 6,147 678 306 5,239
Add: Unrealized appreciation 22 42 8 1,675
-----------------------------------------------------------
Total market value of investments at end of year $318 $6,169 $720 $314 $6,914
-----------------------------------------------------------
<CAPTION>
Aggressive Growth Equity Multi-
Equity LT Income Strategy Equity (1)
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total cost of investments at beginning of year $17 $966 $2,116 $834
Add: Total net proceeds from policy and M&E transactions 104 40 23 5 $150
Reinvested distributions from the Fund:
(a) Net investment income 3 29 30
(b) Net realized gain 62 402 74
-----------------------------------------------------------
Sub-Total 121 1,071 2,570 943 150
Less: Cost of investments disposed during the year 13 36 168 85 1
-----------------------------------------------------------
Total cost of investments at end of year 108 1,035 2,402 858 149
Add: Unrealized appreciation 15 909 1,402 307 12
-----------------------------------------------------------
Total market value of investments at end of year $123 $1,944 $3,804 $1,165 $161
-----------------------------------------------------------
<CAPTION>
Equity Inter- Emerging
Index national Markets
-----------------------------------
<S> <C> <C> <C>
Total cost of investments at beginning of year $2,571 $3,501 $231
Add: Total net proceeds from policy and M&E transactions 53 75 23
Reinvested distributions from the Fund:
(a) Net investment income 51 43 1
(b) Net realized gain 29 325
-----------------------------------
Sub-Total 2,704 3,944 255
Less: Cost of investments disposed during the year 107 235 105
-----------------------------------
Total cost of investments at end of year 2,597 3,709 150
Add: Unrealized appreciation (depreciation) 1,656 550 (50)
-----------------------------------
Total market value of investments at end of year $4,253 $4,259 $100
-----------------------------------
</TABLE>
- ---------------------
(1) For the period from May 12, 1998 (commencement of operations) to December
31, 1998.
12
<PAGE>
PACIFIC SELECT SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
6. TRANSACTIONS IN SEPARATE ACCOUNT UNITS AND SELECTED ACCUMULATION UNIT **
INFORMATION
Transactions in Separate Account units for the year ended December 31, 1998
and the selected accumulation unit information as of December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
Variable Accounts
------------------------------------------------------------
Money High Yield Managed Government
Market Bond Bond Securities Growth
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total units outstanding at beginning of year 13,773 239,930 28,280 15,605 156,312
Increase (decrease) in units resulting from
policy transactions:
(a) Transfers--policy charges and deductions (551) (1,518) (218) (46) (1,654)
(b) Transfers in (from other variable accounts) 34,669 3,749 5,998 55 10,379
(c) Transfers out (to other variable accounts) (29,053) (4,285) (4,068) (91) (7,103)
(d) Transfers--other 424 385 (107) (1,732) (3,547)
------------------------------------------------------------
Sub-Total 5,489 (1,669) 1,605 (1,814) (1,925)
------------------------------------------------------------
Total units outstanding at end of year 19,262 238,261 29,885 13,791 154,387
------------------------------------------------------------
------------------------------------------------------------
Accumulation Unit Value: At beginning of year $15.76 $25.43 $22.20 $20.99 $43.87
At end of year $16.48 $25.88 $24.08 $22.78 $44.76
------------------------------------------------------------
<CAPTION>
Aggressive Growth Equity Multi-
Equity LT Income Strategy Equity (1)
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total units outstanding at beginning of year 1,810 62,643 93,236 38,980
Increase (decrease) in units resulting from
policy transactions:
(a) Transfers--policy charges and deductions (7) (386) (1,426) (252) (62)
(b) Transfers in (from other variable accounts) 10,316 1,456 910 375 14,987
(c) Transfers out (to other variable accounts) (1,393) (624) (3,345) (192)
(d) Transfers--other 33 (488) (1,630) (3,466)
------------------------------------------------------------
Sub-Total 8,949 (42) (5,491) (3,535) 14,925
------------------------------------------------------------
Total units outstanding at end of year 10,759 62,601 87,745 35,445 14,925
------------------------------------------------------------
------------------------------------------------------------
Accumulation Unit Value: At beginning of year $10.17 $19.72 $35.10 $27.98 $10.00
At end of year $11.43 $31.03 $43.33 $32.85 $10.81
------------------------------------------------------------
<CAPTION>
Equity Inter- Emerging
Index national Markets
-----------------------------------
<S> <C> <C> <C>
Total units outstanding at beginning of year 117,238 190,739 21,591
Increase (decrease) in units resulting from
policy transactions:
(a) Transfers--policy charges and deductions (1,269) (2,104) (344)
(b) Transfers in (from other variable accounts) 4,173 4,256 10,355
(c) Transfers out (to other variable accounts) (6,155) (8,400) (17,006)
(d) Transfers--other (414) (1,150) 343
-----------------------------------
Sub-Total (3,665) (7,398) (6,652)
-----------------------------------
Total units outstanding at end of year 113,573 183,341 14,939
-----------------------------------
-----------------------------------
Accumulation Unit Value: At beginning of year $29.31 $22.13 $9.21
At end of year $37.42 $23.22 $6.69
-----------------------------------
</TABLE>
- -----------------------
(1) For the period from May 12, 1998 (commencement of operations) to December
31, 1998.
** Accumulation Unit: unit of measure used to calculate the value of a Policy
Owner's interest in a Variable Account during the accumulation period.
13
