<PAGE>
Annual Report
. Pacific Select Exec Separate Account of Pacific Life Insurance Company
<PAGE>
Dear Pacific Life Variable Universal Life Insurance Policy Owner:
We are pleased to share with you the 1998 Annual Report of the Pacific Select
Exec Separate Account ("Separate Account") of Pacific Life Insurance Company
("Pacific Life").
The Separate Account supports your Pacific Life Variable Universal Life
Insurance Policy ("the Policy"). The Separate Account is divided into
subaccounts, called Variable Accounts. A fixed account option is also
available.
Attached are charts of a hypothetical policy for each of the Variable
Universal Life Insurance Policies supported by the Pacific Select Exec
Separate Account, which indicate the Accumulated Values and Cash Surrender
Values as of December 31, 1998, assuming 100% of the net premium payment was
allocated to each Variable Account.
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
C-1
<PAGE>
Pacific Select Exec
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 each net premium payment was allocated to such
Variable Account. The Policy is based on an insured male, nonsmoker, age 40,
annual premium payments of $10,000 (also Guideline Annual Premium), and a Level
and Initial Death Benefit of $560,323:
<TABLE>
<CAPTION>
Variable Accounts
------------------------------------------------------------------------------------------------------------
Money High Yield Managed Government Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
11/22/88* 1/3/89* 2/1/89* 2/15/89* 2/1/89* 4/8/96* 1/4/94* 1/3/89* 1/3/89*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $109,457.65 $138,394.67 $125,180.44 $120,698.48 $179,692.57 $28,982.49 $91,545.24 $207,470.57 $164,660.30
CSV***... 109,457.65 138,394.67 125,110.14 120,628.19 179,622.27 24,764.71 87,327.47 207,470.57 164,660.30
(2) Policy Purchased on 1/2/98
AV**..... 8,544.58 8,291.02 8,841.86 8,849.15 8,257.88 9,336.20 13,033.49 10,105.28 9,597.04
CSV***... 4,326.81 4,073.24 4,624.08 4,631.38 4,040.11 5,118.42 8,815.71 5,887.50 5,379.26
<CAPTION>
Bond and Equity Inter- Emerging Variable Variable Variable Variable
Equity Income Index national Markets Account I Account II Account III Account IV
1/10/97* 1/10/97* 1/31/91* 1/19/89* 4/8/96* 10/11/96* 10/17/96* 10/11/96* 11/18/96*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $23,365.69 $19,093.86 $165,754.96 $127,712.24 $16,620.28 $28,731.68 $36,729.29 $30,200.18 $33,688.78
CSV***... 19,147.92 14,876.08 164,067.85 127,712.24 12,402.50 24,513.91 32,511.51 25,982.40 29,471.01
(2) Policy Purchased on 1/2/98
AV** .... 10,643.94 8,769.88 10,486.78 4,370.06 5,720.56 9,393.26 11,104.45 8,123.93 10,120.22
CSV***... 6,426.17 4,552.11 6,269.01 8,587.83 1,502.79 5,175.48 6,886.68 3,906.16 5,902.45
</TABLE>
Pacific Select Choice
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 each net premium payment was allocated to such
Variable Account. The Policy is based on an insured male, nonsmoker, age 40,
annual premium payments of $10,000 (also Guideline Annual Premium), and a Level
and Initial Death Benefit of $559,456:
<TABLE>
<CAPTION>
Money High Yield Managed Government Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
11/22/88* 1/3/89* 2/1/89* 2/15/89* 2/1/89* 4/8/96* 1/4/94* 1/3/89* 1/3/89*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $98,948.69 $120,958.69 $110,196.42 $106,457.35 $156,032.25 $20,900.14 $72,827.60 $181,678.14 $144,752.43
CSV***... 98,948.69 120,926.05 110,131.15 106,392.08 155,966.98 18,942.04 70,869.50 181,645.50 144,719.79
(2) Policy Purchased on 1/2/98
AV**..... 5,653.02 5,467.25 5,864.90 5,870.42 5,399.79 6,220.65 8,847.05 6,757.36 6,396.94
CSV***... 3,694.93 3,509.15 3,906.81 3,912.32 3,441.69 4,262.55 6,888.95 4,799.26 4,438.84
<CAPTION>
Bond and Equity Inter- Emerging Variable Variable Variable Variable
Equity Income Index national Markets Account I Account II Account III Account IV
1/10/97* 1/10/97* 1/31/91* 1/19/89* 4/8/96* 10/11/96* 10/17/96* 10/11/96* 11/18/96*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $16,041.72 $12,942.28 $141,301.02 $114,215.66 $11,951.52 $21,175.10 $26,889.75 $22,485.76 $24,676.08
CSV***... 15,337.47 12,238.03 140,485.15 114,183.02 9,993.42 19,217.01 24,931.65 20,527.66 22,717.98
(2) Policy Purchased on 1/2/98
AV** .... 7,156.46 5,810.68 7,035.47 5,720.91 3,606.45 6,265.22 7,458.28 5,282.71 6,779.04
CSV***... 5,198.36 3,852.58 5,077.38 3,762.81 1,648.35 4,307.12 5,500.18 3,324.61 4,820.94
</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, sex, smoking status, substandard rating, and face amount
(for Pacific Select Exec only).
*** Cash Surrender Value: Includes deductions for all policy charges,
including any underwriting and sales surrender charges that would have
been deducted if the policy had been surrendered on December 31, 1998.
Surrender charges vary by policy.
C-2
<PAGE>
Pacific Select Estate Preserver
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 each net premium payment was allocated to such
Variable Account. The Policy is based on joint insureds, both male and female,
select-nonsmokers, both age 40, annual premium payments of $10,000 (also
Guideline Level Premium), and a Level and Initial Death Benefit of $954,483:
<TABLE>
<CAPTION>
Variable Accounts
------------------------------------------------------------------------------------------------------------
Money High Yield Managed Government Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
11/22/88* 1/3/89* 2/1/89* 2/15/89* 2/1/89* 4/8/96* 1/4/94* 1/3/89* 1/3/89*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $113,800.87 $143,557.67 $130,101.21 $125,508.47 $186,041.08 $28,968.89 $92,575.23 $214,979.91 $170,924.55
CSV***... 113,800.87 143,557.67 130,055.36 125,462.62 185,995.23 24,980.28 89,824.46 214,979.91 170,924.55
(2) Policy Purchased on 1/2/98
AV**..... 8,492.64 8,243.42 8,785.73 8,792.87 8,217.62 9,272.67 12,919.45 10,032.72 9,531.31
CSV***... 3,541.26 3,292.04 3,834.35 3,841.49 3,266.24 4,321.29 7,968.07 5,081.34 4,579.93
<CAPTION>
Bond and Equity Inter- Emerging Variable Variable Variable Variable
Equity Income Index national Markets Account I Account II Account III Account IV
1/10/97* 1/10/97* 1/31/91* 1/19/89* 4/8/96* 10/11/96* 10/17/96* 10/11/96* 11/18/96*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $23,179.99 $18,971.28 $170,306.62 $132,939.15 $16,700.99 $28,461.89 $36,375.71 $29,899.37 $33,323.74
CSV***... 18,778.77 14,570.05 169,206.32 132,939.15 12,712.38 24,198.20 32,112.02 25,635.68 29,014.21
(2) Policy Purchased on 1/2/98
AV** .... 10,561.49 8,715.22 10,407.90 8,529.57 5,713.54 9,328.32 11,019.61 8,088.89 10,045.74
CSV***... 5,610.11 3,763.84 5,456.52 3,578.19 762.16 4,376.94 6,068.23 3,137.51 5,094.36
</TABLE>
Pacific Select Estate Preserver II
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 each net premium payment was allocated to such
Variable Account. The Policy is based on joint insureds, both male and female,
select-nonsmokers, both age 40, annual premium payments of $10,000 (also
Guideline Level Premium), and a Level and Initial Death Benefit of $944,039:
<TABLE>
<CAPTION>
Money High Yield Managed Government Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
11/22/88* 1/3/89* 2/1/89* 2/15/89* 2/1/89* 4/8/96* 1/4/94* 1/3/89* 1/3/89*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $112,534.85 $141,954.61 $128,648.97 $124,107.63 $183,963.59 $28,644.35 $91,537.75 $212,580.29 $169,016.70
CSV***... 112,534.85 141,954.61 128,648.97 124,107.63 183,963.59 28,644.35 91,537.75 212,580.29 169,016.70
(2) Policy Purchased on 1/2/98
AV**..... 8,397.28 8,150.82 8,687.12 8,694.18 8,125.21 9,168.65 12,774.87 9,920.22 9,424.39
CSV***... 8,397.28 8,150.82 8,687.12 8,694.18 8,125.21 9,168.65 12,774.87 9,920.22 9,424.39
<CAPTION>
Bond and Equity Inter- Emerging Variable Variable Variable Variable
Equity Income Index national Markets Account I Account II Account III Account IV
1/10/97* 1/10/97* 1/31/91* 1/19/89* 4/8/96* 10/11/96* 10/17/96* 10/11/96* 11/18/96*
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $22,920.31 $18,758.33 $168,402.36 $131,455.14 $16,513.35 $28,144.29 $35,969.92 $29,566.01 $32,952.22
CSV***... 22,920.31 18,758.33 168,402.36 131,455.14 16,513.35 28,144.29 35,969.92 29,566.01 32,952.22
(2) Policy Purchased on 1/2/98
AV**..... 10,443.15 8,617.38 10,291.25 8,433.88 5,648.99 9,223.68 10,896.12 7,997.86 9,933.12
CSV***... 10,443.15 8,617.38 10,291.25 8,433.88 5,648.99 9,223.68 10,896.12 7,997.86 9,933.12
</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, sex, smoking status, and substandard rating.
*** Cash Surrender Value: Includes deductions for all policy charges,
including any underwriting and sales surrender charges that would have
been deducted if the policy had been surrendered on December 31, 1998.
Surrender charges vary by policy.
C-3
<PAGE>
Pacific Select Estate Maximizer (Single Insured)
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 each net premium payment was allocated to
such Variable Account. The Policy is based on an insured male, nonsmoker, age
40, single premium payment of $40,000 (also Guideline Single Premium), and a
Level and Initial Death Benefit of $159,779:
<TABLE>
<CAPTION>
Variable Accounts
----------------------------------------------------------------------------------------------------------
Money High Yield Managed Government Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
11/22/88* 1/3/89* 2/1/89* 2/15/89* 2/1/89* 4/8/96* 1/4/94* 1/3/89* 1/3/89*
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $54,378.89 $87,723.06 $80,538.85 $76,945.83 $126,279.97 $48,069.12 $115,344.50 $146,511.56 $111,220.83
CSV***... 54,378.89 87,723.06 80,538.85 76,945.83 126,279.97 44,469.12 112,544.50 146,511.56 111,220.83
(2) Policy Purchased on 1/2/98
AV**..... 41,229.16 40,102.49 42,581.85 42,613.32 40,187.43 44,813.22 61,684.58 48,374.20 46,051.68
CSV***... 37,229.16 36,102.49 38,581.85 38,613.32 36,187.43 40,813.22 57,684.58 44,374.20 42,051.68
<CAPTION>
Bond and Equity Inter- Emerging Variable Variable Variable Variable
Equity Income Index national Markets Account I Account II Account III Account IV
1/10/97* 1/10/97* 1/31/91* 1/19/89* 4/8/96* 10/11/96* 10/17/96* 10/11/96* 11/18/96*
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $57,277.71 $49,669.30 $142,920.88 $70,528.99 $26,628.82 $45,274.76 $67,051.75 $49,496.08 $62,510.33
CSV***... 53,277.71 45,669.30 141,320.88 70,528.99 23,028.82 41,674.76 63,451.75 45,896.08 58,910.33
(2) Policy Purchased on 1/2/98
AV**..... 50,743.93 42,270.01 50,076.88 41,227.05 28,560.44 45,051.87 52,981.17 39,693.92 48,382.99
CSV***... 46,743.93 38,270.01 46,076.88 37,227.05 24,560.44 41,051.87 48,981.17 35,693.92 44,382.99
</TABLE>
Pacific Select Estate Maximizer (Joint Insureds)
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 each net premium payment was allocated to
such Variable Account. The Policy is based on joint insureds male and female,
nonsmokers, age 40, single premium payment of $40,000 (also Guideline Single
Premium), and a Level and Initial Death Benefit of $271,147:
<TABLE>
<CAPTION>
Money High Yield Managed Government Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
11/22/88* 1/3/89* 2/1/89* 2/15/89* 2/1/89* 4/8/96* 1/4/94* 1/3/89* 1/3/89*
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $56,843.88 $91,839.43 $84,248.08 $80,475.14 $132,277.60 $48,718.38 $118,180.77 $153,519.64 $116,469.79
CSV***... 56,843.88 91,839.43 84,248.08 80,475.14 132,277.60 45,118.38 115,380.77 153,519.64 116,469.79
(2) Policy Purchased on 1/2/98
AV**..... 41,434.29 40,301.97 42,793.74 42,825.36 40,387.25 45,036.26 61,991.91 48,615.01 46,280.89
CSV***... 37,434.29 36,301.97 38,793.74 38,825.36 36,387.25 41,036.26 57,991.91 44,615.01 42,280.89
<CAPTION>
Bond and Equity Inter- Emerging Variable Variable Variable Variable
Equity Income Index national Markets Account I Account II Account III Account IV
1/10/97* 1/10/97* 1/31/91* 1/19/89* 4/8/96* 10/11/96* 10/17/96* 10/11/96* 11/18/96*
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Policy Purchased on Date Variable Account Began Operations
AV**..... $57,845.36 $50,161.19 $148,412.32 $73,847.62 $26,984.87 $45,776.80 $67,798.54 $50,046.11 $63,232.05
CSV***... 53,845.36 46,161.19 146,812.32 73,847.62 23,384.87 42,176.80 64,198.54 46,446.11 59,632.05
(2) Policy Purchased on 1/2/98
AV**..... 50,996.61 42,480.33 50,326.22 41,432.24 28,702.18 45,276.11 53,244.98 39,891.22 48,623.87
CSV***... 46,996.61 38,480.33 46,326.22 37,432.24 24,702.18 41,276.11 49,244.98 35,891.22 44,623.87
</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
any underwriting and sales surrender charges that would have been deducted
if the policy had been surrendered on December 31, 1998. Surrender charges
vary by policy.
C-4
<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 Exec Separate Account (comprised of the Money Market, High
Yield Bond, Managed Bond, Government Securities, Growth, Aggressive Equity,
Growth LT, Equity Income, Multi-Strategy, Equity, Bond and Income, Equity
Index, International, Emerging Markets, Variable Account I, Variable Account
II, Variable Account III, and Variable Account IV Variable Accounts) as of
December 31, 1998 and the related statement of operations for the year then
ended and statement of changes in net assets for each of the two years in the
period then ended (as to the Equity Variable Account and the Bond and Income
Variable Account, for the year ended December 31, 1998 and for the period from
commencement of operations through December 31, 1997). 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 Exec Separate Account as of December 31, 1998 and
the results of their operations for the year then ended and the changes in
their net assets for each of the two years in the period then ended (as to the
Equity Variable Account and the Bond and Income Variable Account, for the year
ended December 31, 1998 and for the period from commencement of operations
through December 31, 1997), in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Costa Mesa, California
February 5, 1999
C-5
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
High Govern-
Money Yield Managed ment Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Money Market Portfolio (6,873 shares; cost
$69,218)...................................... $69,107
High Yield Bond Portfolio (4,645 shares; cost
$45,134)...................................... $43,370
Managed Bond Portfolio (8,941 shares; cost
$97,525)...................................... $101,864
Government Securities Portfolio (1,562 shares;
cost $16,677)................................. $17,149
Growth Portfolio (8,711 shares; cost
$187,167)..................................... $199,670
Aggressive Equity Portfolio (1,404 shares;
cost $16,338)................................. $17,766
Growth LT Portfolio (8,674 shares; cost
$152,516)..................................... $227,277
Equity Income Portfolio (6,986 shares; cost
$147,393)..................................... $187,867
Multi-Strategy Portfolio (7,736 shares; cost
$112,643)..................................... $133,998
Receivables:
Due from Pacific Life Insurance Company....... 89 72 174 209 321 153 92 54
Fund shares redeemed.......................... 100
------------------------------------------------------------------------------------
Total Assets................................... 69,207 43,459 101,936 17,323 199,879 18,087 227,430 187,959 134,052
------------------------------------------------------------------------------------
LIABILITIES
Payables:
Due to Pacific Life Insurance Company......... 100
Fund shares purchased......................... 89 72 174 209 321 153 92 54
------------------------------------------------------------------------------------
Total Liabilities.............................. 100 89 72 174 209 321 153 92 54
------------------------------------------------------------------------------------
NET ASSETS..................................... $69,107 $43,370 $101,864 $17,149 $199,670 $17,766 $227,277 $187,867 $133,998
------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
C-6
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES (Continued)
DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Bond and Equity Inter- Emerging
Equity Income Index national Markets Variable Variable Variable Variable
Variable Variable Variable Variable Variable Account Account Account Account
Account Account Account Account Account I II III IV
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Equity Portfolio (617 shares; cost $16,061)....... $18,066
Bond and Income Portfolio (397 shares; cost
$5,250)........................................... $5,282
Equity Index Portfolio (9,370 shares; cost
$212,820)......................................... $303,187
International Portfolio (9,944 shares; cost
$153,283)......................................... $157,140
Emerging Markets Portfolio (1,471 shares; cost
$11,689).......................................... $10,072
Brandes International Equity Portfolio (1)
(140 shares; cost $1,454)......................... $1,522
Turner Core Growth Portfolio (165 shares; cost
$2,467)........................................... $2,948
Frontier Capital Appreciation Portfolio (295
shares; cost $4,191).............................. $4,452
Enhanced U.S. Equity Portfolio (276 shares; cost
$4,437)........................................... $4,986
Receivables:
Due from Pacific Life Insurance Company........... 11 13 161 81 11
Fund shares redeemed.............................. 23 9 19 32
--------------------------------------------------------------------------------
Total Assets....................................... 18,077 5,295 303,348 157,221 10,083 1,545 2,957 4,471 5,018
--------------------------------------------------------------------------------
LIABILITIES
Payables:
Due to Pacific Life Insurance Company............. 23 9 19 32
Fund shares purchased............................. 11 13 161 81 11
--------------------------------------------------------------------------------
Total Liabilities.................................. 11 13 161 81 11 23 9 19 32
--------------------------------------------------------------------------------
NET ASSETS......................................... $18,066 $5,282 $303,187 $157,140 $10,072 $1,522 $2,948 $4,452 $4,986
--------------------------------------------------------------------------------
</TABLE>
(1) Formerly named Edinburgh Overseas Equity Portfolio
See Notes to Financial Statements
C-7
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
High Govern-
Money Yield Managed ment Aggressive Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.................................... $3,392 $3,403 $5,533 $881 $20,232 $5 $6,250 $18,901 $12,030
-------------------------------------------------------------------------------------
Net Investment Income......................... 3,392 3,403 5,533 881 20,232 5 6,250 18,901 12,030
-------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) from security
transactions................................. (3) (87) 663 164 10,581 653 5,163 5,470 3,108
Net unrealized appreciation (depreciation) on
investments.................................. 14 (2,165) 1,408 59 (23,983) 1,132 63,381 9,750 5,144
-------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments................................... 11 (2,252) 2,071 223 (13,402) 1,785 68,544 15,220 8,252
-------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.................................... $3,403 $1,151 $7,604 $1,104 $6,830 $1,790 $74,794 $34,121 $20,282
-------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
C-8
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF OPERATIONS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Bond and Equity Inter- Emerging
Equity Income Index national Markets Variable Variable Variable Variable
Variable Variable Variable Variable Variable Account Account Account Account
Account Account Account Account Account I II III IV
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends....................................... $507 $147 $4,853 $11,985 $117 $87 $52 $21 $154
----------------------------------------------------------------------------------
Net Investment Income............................ 507 147 4,853 11,985 117 87 52 21 154
----------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) from security
transactions.................................... 369 19 11,629 5,435 (1,951) 8 96 (64) 183
Net unrealized appreciation (depreciation) on
investments..................................... 1,989 13 43,404 (10,085) (935) 72 460 44 366
----------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments...................................... 2,358 32 55,033 (4,650) (2,886) 80 556 (20) 549
----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................. $2,865 $179 $59,886 $7,335 $(2,769) $167 $608 $1 $703
----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
C-9
<PAGE>
PACIFIC SELECT EXEC 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 Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income................. $3,392 $3,403 $5,533 $881 $20,232 $5 $6,250 $18,901 $12,030
Net realized gain (loss) from security
transactions.......................... (3) (87) 663 164 10,581 653 5,163 5,470 3,108
Net unrealized appreciation
(depreciation) on investments......... 14 (2,165) 1,408 59 (23,983) 1,132 63,381 9,750 5,144
-------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations........................ 3,403 1,151 7,604 1,104 6,830 1,790 74,794 34,121 20,282
-------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums.............. 164,872 7,612 13,456 2,186 31,972 4,086 29,295 24,939 14,554
Transfers--policy charges and
deductions............................ (6,168) (2,255) (3,939) (699) (10,609) (969) (9,146) (7,949) (5,260)
Transfers in (from other variable
accounts)............................. 268,634 34,691 52,698 10,097 89,840 20,958 82,877 46,109 13,875
Transfers out (to other variable
accounts)............................. (399,943) (29,075) (36,135) (5,218) (87,886) (16,962) (53,981) (35,074) (17,159)
Transfers--other...................... (13,775) (2,461) (4,332) (742) (10,466) (610) (7,000) (5,765) (5,646)
-------------------------------------------------------------------------------------------
Net Increase in Net Assets Derived from
Policy Transactions.................... 13,620 8,512 21,748 5,624 12,851 6,503 42,045 22,260 364
-------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS............. 17,023 9,663 29,352 6,728 19,681 8,293 116,839 56,381 20,646
-------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Year...................... 52,084 33,707 72,512 10,421 179,989 9,473 110,438 131,486 113,352
-------------------------------------------------------------------------------------------
End of Year............................ $69,107 $43,370 $101,864 $17,149 $199,670 $17,766 $227,277 $187,867 $133,998
-------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
C-10
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Bond and Equity Inter- Emerging
Equity Income Index national Markets Variable Variable Variable Variable
Variable Variable Variable Variable Variable Account Account Account Account
Account Account Account Account Account I II III IV
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income....................... $507 $147 $4,853 $11,985 $117 $87 $52 $21 $154
Net realized gain (loss) from security
transactions................................ 369 19 11,629 5,435 (1,951) 8 96 (64) 183
Net unrealized appreciation (depreciation)
on investments.............................. 1,989 13 43,404 (10,085) (935) 72 460 44 366
------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.................... 2,865 179 59,886 7,335 (2,769) 167 608 1 703
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM POLICY
TRANSACTIONS
Transfer of net premiums.................... 2,976 1,056 44,705 28,077 3,183 238 408 1,305 1,358
Transfers--policy charges and deductions.... (633) (197) (12,955) (8,359) (663) (62) (93) (245) (156)
Transfers in (from other variable accounts). 17,627 6,550 108,028 71,891 27,300 749 2,159 1,700 1,697
Transfers out (to other variable accounts).. (8,527) (2,820) (73,002) (64,225) (25,040) (97) (880) (1,374) (481)
Transfers--other............................ (432) (171) (10,763) (6,520) (355) (12) (37) (44) 111
------------------------------------------------------------------------------------
Net Increase in Net Assets Derived from
Policy Transactions.......................... 11,011 4,418 56,013 20,864 4,425 816 1,557 1,342 2,529
------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS................... 13,876 4,597 115,899 28,199 1,656 983 2,165 1,343 3,232
------------------------------------------------------------------------------------
NET ASSETS
Beginning of Year............................ 4,190 685 187,288 128,941 8,416 539 783 3,109 1,754
------------------------------------------------------------------------------------
End of Year.................................. $18,066 $5,282 $303,187 $157,140 $10,072 $1,522 $2,948 $4,452 $4,986
------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
C-11
<PAGE>
PACIFIC SELECT EXEC 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 Growth Equity Multi-
Market Bond Bond Securities Growth Equity LT Income Strategy
Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income................. $2,072 $2,559 $3,893 $498 $14,427 $4,656 $7,127 $7,530
Net realized gain from security
transactions.......................... 94 454 367 96 6,822 $101 3,899 3,288 695
Net unrealized appreciation
(depreciation) on investments......... (121) (335) 1,844 306 15,323 230 1,609 16,626 8,279
-------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations........................ 2,045 2,678 6,104 900 36,572 331 10,164 27,041 16,504
-------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums.............. 114,902 6,516 11,008 2,026 28,003 2,091 27,890 20,805 20,699
Transfers--policy charges and
deductions............................ (4,303) (1,844) (2,926) (587) (9,059) (469) (6,771) (5,873) (4,507)
Transfers in (from other variable
accounts)............................. 133,629 17,591 15,603 5,190 61,551 12,131 34,622 27,826 9,864
Transfers out (to other variable
accounts)............................. (214,125) (15,732) (11,609) (4,376) (46,874) (7,838) (39,146) (18,793) (5,914)
Transfers--other...................... (7,489) (1,439) (14,668) (562) (10,114) (104) (5,388) (5,380) (2,426)
-------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Derived from Policy Transactions....... 22,614 5,092 (2,592) 1,691 23,507 5,811 11,207 18,585 17,716
-------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS............. 24,659 7,770 3,512 2,591 60,079 6,142 21,371 45,626 34,220
-------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Year...................... 27,425 25,937 69,000 7,830 119,910 3,331 89,067 85,860 79,132
-------------------------------------------------------------------------------------------
End of Year............................ $52,084 $33,707 $72,512 $10,421 $179,989 $9,473 $110,438 $131,486 $113,352
-------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
C-12
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1997
(In thousands)
<TABLE>
<CAPTION>
Bond and Equity Inter- Emerging
Equity Income Index national Markets Variable Variable Variable Variable
Variable Variable Variable Variable Variable Account Account Account Account
Account (1) Account (1) Account Account Account I II III IV
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income................... $30 $11 $7,400 $4,347 $41 $8 $71 $73 $63
Net realized gain from security
transactions............................ 13 5 12,511 4,938 187 2 7 42 7
Net unrealized appreciation
(depreciation) on investments........... 16 19 21,545 (62) (644) (4) 31 222 201
-----------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ 59 35 41,456 9,223 (416) 6 109 337 271
-----------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums................ 466 56 28,526 26,039 2,039 80 172 656 372
Transfers--policy charges and
deductions.............................. (87) (13) (8,168) (7,142) (479) (25) (28) (149) (54)
Transfers in (from other variable
accounts)............................... 4,237 659 51,709 54,246 10,615 408 537 3,409 976
Transfers out (to other variable
accounts)............................... (438) (53) (25,760) (45,867) (6,460) (3) (163) (1,636) (217)
Transfers--other........................ (47) 1 (25,672) (4,997) (162) (4) (17) (51) (9)
-----------------------------------------------------------------------------------------
Net Increase in Net Assets Derived from
Policy Transactions...................... 4,131 650 20,635 22,279 5,553 456 501 2,229 1,068
-----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS............... 4,190 685 62,091 31,502 5,137 462 610 2,566 1,339
-----------------------------------------------------------------------------------------
NET ASSETS
Beginning of Year........................ 125,197 97,439 3,279 77 173 543 415
-----------------------------------------------------------------------------------------
End of Year.............................. $4,190 $685 $187,288 $128,941 $8,416 $539 $783 $3,109 $1,754
-----------------------------------------------------------------------------------------
</TABLE>
(1) For the period from January 10, 1997 (commencement of operations) to
December 31, 1997.
See Notes to Financial Statements
C-13
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Pacific Select Exec 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 eighteen 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, the Emerging Markets Variable Account, and the Variable
Accounts I through IV. The assets in each of the first fourteen Variable
Accounts are invested in shares of the corresponding portfolios of Pacific
Select Fund and the assets of the last four Variable Accounts are invested in
shares of the corresponding portfolios of M Fund, Inc. (collectively, the
"Funds"). Each Variable Account pursues different investment objectives and
policies. The financial statements of the Funds, including the schedules of
investments, are either included in Section B of this report or 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 B-58) on May 12, 1988 and commenced operations on
November 22, 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 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 Funds are valued at the reported net asset
values of the respective portfolios. Valuation of securities held by the Funds
is discussed in the notes to their 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 Funds 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
With respect to variable life insurance policies funded by the Separate
Account, Pacific Life makes certain deductions from premiums for sales load
and state premium taxes before amounts are allocated to the Separate Account.
Pacific Life also makes certain deductions from the net assets of each
Variable Account for the mortality and expense risks Pacific Life assumes,
administrative expenses, cost of insurance, charges for optional benefits and
any sales and underwriting surrender charges. 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.
C-14
<PAGE>
PACIFIC SELECT EXEC SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
5. SEPARATE ACCOUNT'S COST OF INVESTMENTS IN THE FUNDS SHARES
The investment in the Funds shares are carried at identified cost, which
represents the amount available for investment (including reinvested
distributions of net investment income and realized gains). The cost and
market value of total Separate Account's investments in the Funds as of
December 31, 1998 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Variable Accounts
------------------------------------------------------------
Govern-
Money High Yield Managed ment Aggressive
Market Bond Bond Securities Growth Equity
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total cost of investments at beginning of year $52,208 $33,305 $69,581 $10,008 $143,503 $9,176
Add: Total net proceeds from policy transactions 180,669 23,481 32,416 8,675 56,862 15,473
Reinvested distributions from the Funds:
(a) Net investment income 3,392 3,082 4,503 663 214 5
(b) Net realized gain 321 1,030 218 20,018
------------------------------------------------------------
Sub-Total 236,269 60,189 107,530 19,564 220,597 24,654
Less: Cost of investments disposed during the year 167,051 15,055 10,005 2,887 33,430 8,316
------------------------------------------------------------
Total cost of investments at end of year 69,218 45,134 97,525 16,677 187,167 16,338
Add: Unrealized appreciation (depreciation) (111) (1,764) 4,339 472 12,503 1,428
------------------------------------------------------------
Total market value of investments at end of year $69,107 $43,370 $101,864 $17,149 $199,670 $17,766
------------------------------------------------------------
<CAPTION>
Growth Equity Multi- Bond and Equity
LT Income Strategy Equity Income Index
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total cost of investments at beginning of year $99,059 $100,762 $97,141 $4,174 $666 $140,325
Add: Total net proceeds from policy transactions 60,881 40,603 16,738 15,633 5,455 84,675
Reinvested distributions from the Funds:
(a) Net investment income 327 1,300 3,405 40 145 3,133
(b) Net realized gain 5,923 17,601 8,625 467 2 1,720
------------------------------------------------------------
Sub-Total 166,190 160,266 125,909 20,314 6,268 229,853
Less: Cost of investments disposed during the year 13,674 12,873 13,266 4,253 1,018 17,033
------------------------------------------------------------
Total cost of investments at end of year 152,516 147,393 112,643 16,061 5,250 212,820
Add: Unrealized appreciation 74,761 40,474 21,355 2,005 32 90,367
------------------------------------------------------------
Total market value of investments at end of year $227,277 $187,867 $133,998 $18,066 $5,282 $303,187
------------------------------------------------------------
<CAPTION>
Inter- Emerging
national Markets I II III IV
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total cost of investments at beginning of year $115,000 $9,098 $544 $762 $2,892 $1,571
Add: Total net proceeds from policy transactions 47,705 9,932 1,047 1,994 2,546 3,239
Reinvested distributions from the Funds:
(a) Net investment income 1,485 117 87 52 146
(b) Net realized gain 10,500 21 8
------------------------------------------------------------
Sub-Total 174,690 19,147 1,678 2,808 5,459 4,964
Less: Cost of investments disposed during the year 21,407 7,458 224 341 1,268 527
------------------------------------------------------------
Total cost of investments at end of year 153,283 11,689 1,454 2,467 4,191 4,437
Add: Unrealized appreciation (depreciation) 3,857 (1,617) 68 481 261 549
------------------------------------------------------------
Total market value of investments at end of year $157,140 $10,072 $1,522 $2,948 $4,452 $4,986
------------------------------------------------------------
</TABLE>
C-15
<PAGE>
PACIFIC SELECT EXEC 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
------------------------------------------------------------------------
Govern-
Money High Yield Managed ment Aggressive
Market Bond Bond Securities Growth Equity
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total units outstanding at beginning of year 3,242,630 1,272,728 3,186,015 479,603 4,678,660 840,837
Increase (decrease) in units resulting from
policy transactions:
(a) Transfer of net premiums 9,998,490 280,788 567,458 95,603 858,593 345,960
(b) Transfers--policy charges and deductions (373,932) (84,466) (165,049) (30,660) (283,438) (82,024)
(c) Transfers in (from other variable accounts) 16,112,581 1,251,759 2,162,298 411,892 2,206,806 1,764,520
(d) Transfers out (to other variable accounts) (24,064,758) (1,034,962) (1,475,354) (204,814) (2,150,435) (1,425,259)
(e) Transfers--other (828,850) (87,604) (176,871) (29,124) (256,086) (51,258)
------------------------------------------------------------------------
Sub-Total 843,531 325,515 912,482 242,897 375,440 551,939
------------------------------------------------------------------------
Total units outstanding at end of year 4,086,161 1,598,243 4,098,497 722,500 5,054,100 1,392,776
------------------------------------------------------------------------
------------------------------------------------------------------------
Accumulation Unit Value: At beginning of year $16.06 $26.48 $22.76 $21.73 $38.47 $11.27
At end of year $16.91 $27.14 $24.85 $23.74 $39.51 $12.76
<CAPTION> ------------------------------------------------------------------------
Growth Equity Multi- Bond and Equity
LT Income Strategy Equity Income Index
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total units outstanding at beginning of year 5,452,479 3,609,629 3,897,779 365,186 57,616 5,696,188
Increase (decrease) in units resulting from
policy transactions:
(a) Transfer of net premiums 1,193,031 621,209 459,357 229,214 83,678 1,213,083
(b) Transfers--policy charges and deductions (371,549) (198,432) (168,061) (48,132) (15,662) (350,651)
(c) Transfers in (from other variable accounts) 3,139,545 984,220 372,455 1,338,126 518,911 2,722,051
(d) Transfers out (to other variable accounts) (2,057,690) (741,626) (498,426) (643,218) (223,441) (1,831,867)
(e) Transfers--other (266,828) (121,899) (164,002) (32,588) (13,550) (270,080)
------------------------------------------------------------------------
Sub-Total 1,636,509 543,472 1,323 843,402 349,936 1,482,536
------------------------------------------------------------------------
Total units outstanding at end of year 7,088,988 4,153,101 3,899,102 1,208,588 407,552 7,178,724
------------------------------------------------------------------------
------------------------------------------------------------------------
Accumulation Unit Value: At beginning of year $20.25 $36.43 $29.08 $11.47 $11.89 $32.88
At end of year $32.06 $45.24 $34.37 $14.95 $12.96 $42.23
------------------------------------------------------------------------
<CAPTION>
Inter- Emerging
national Markets I II III IV
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total units outstanding at beginning of year 6,224,372 871,397 52,300 59,984 243,373 132,506
Increase (decrease) in units resulting from
policy transactions:
(a) Transfer of net premiums 1,264,542 393,994 21,062 27,463 107,709 92,938
(b) Transfers--policy charges and deductions (378,357) (82,543) (5,624) (6,243) (20,099) (10,607)
(c) Transfers in (from other variable accounts) 3,056,270 3,699,775 70,147 145,602 141,760 118,099
(d) Transfers out (to other variable accounts) (2,708,392) (3,409,238) (8,799) (56,670) (125,903) (23,033)
(e) Transfers--other (274,952) (48,335) (1,088) (2,384) (4,033) (5,315)
------------------------------------------------------------------------
Sub-Total 959,111 553,653 75,698 107,768 99,434 172,082
------------------------------------------------------------------------
Total units outstanding at end of year 7,183,483 1,425,050 127,998 167,752 342,807 304,588
------------------------------------------------------------------------
------------------------------------------------------------------------
Accumulation Unit Value: At beginning of year $20.72 $9.66 $10.31 $13.06 $12.77 $13.23
At end of year $21.88 $7.07 $11.89 $17.57 $12.99 $16.37
------------------------------------------------------------------------
</TABLE>
- --------------------
** Accumulation Unit: unit of measure used to calculate the value of a Policy
Owner's interest in a Variable Account during the accumulation period.
C-16
