<PAGE>
ANNUAL REPORT
. PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT OF PACIFIC MUTUAL LIFE
INSURANCE COMPANY
[LOGO of PACIFIC SELECT VARIABLE ANNUITY]
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Pacific Mutual Life Insurance Company
We have audited the accompanying statement of assets and liabilities of the
Pacific Select Variable Annuity 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 and Emerging Markets Variable Accounts) as of December 31, 1996
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. 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, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective Variable
Accounts constituting the Pacific Select Variable Annuity Separate Account at
December 31, 1996 and the results of their operations for the year then ended
and the changes in their net assets for each of the two years then ended, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Costa Mesa, California
February 14, 1997
B-1
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1996
(In thousands)
<TABLE>
<CAPTION>
High
Money Yield Managed Government 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 in Pacific Select Fund:
Money Market Portfolio (13,243 shares; cost $132,914).... $133,008
High Yield Bond Portfolio (14,630 shares; cost $141,955). $145,430
Managed Bond Portfolio (15,105 shares; cost $161,338).... $162,341
Government Securities Portfolio (7,663 shares;
cost $79,604).......................................... $79,560
Growth Portfolio (1,382 shares; cost $23,855)............ $ 29,646
Aggressive Equity Portfolio (3,429 shares; cost $35,784). $ 36,954
Growth LT Portfolio (19,581 shares; cost $291,691)....... $323,014
Receivables:
Due from Pacific Mutual Life Insurance Company........... 2,931 232 27 256
Fund shares redeemed..................................... 99 838 403
-------- -------- -------- ------- -------- -------- --------
TOTAL ASSETS............................................... 135,939 145,662 162,368 79,659 30,484 37,210 323,417
-------- -------- -------- ------- -------- -------- --------
LIABILITIES
Payables:
Due to Pacific Mutual Life Insurance Company............. 99 838 403
Fund shares purchased.................................... 2,931 232 27 256
-------- -------- -------- ------- -------- -------- --------
TOTAL LIABILITIES.......................................... 2,931 232 27 99 838 256 403
-------- -------- -------- ------- -------- -------- --------
NET ASSETS................................................. $133,008 $145,430 $162,341 $79,560 $ 29,646 $ 36,954 $323,014
======== ======== ======== ======= ======== ======== ========
</TABLE>
See Notes to Financial Statements.
B-2
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF ASSETS & LIABILITIES (Continued)
DECEMBER 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Equity Multi- Bond and Equity Inter- Emerging
Income Strategy Equity Income Index national Markets
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account
-------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Equity Income Portfolio (14,771 shares; cost $261,430).... $302,012
Multi-Strategy Portfolio (7,643 shares; cost $102,330).... $112,734
Equity Portfolio (5,199 shares; cost $99,216)............. $109,526
Bond and Income Portfolio (3,940 shares; cost $47,502).... $47,481
Equity Index Portfolio (12,066 shares; cost $216,952)..... $246,367
International Portfolio (21,179 shares; cost $287,047).... $326,133
Emerging Markets Portfolio (2,977 shares; cost $29,189)... $ 28,805
Receivables:
Due from Pacific Mutual Life Insurance Company............ 322 3 583 287 90
Fund shares redeemed...................................... 182 124
-------- -------- -------- ------- -------- -------- --------
TOTAL ASSETS................................................ 302,334 112,737 109,708 47,605 246,950 326,420 28,895
-------- -------- -------- ------- -------- -------- --------
LIABILITIES
Payables:
Due to Pacific Mutual Life Insurance Company.............. 182 124
Fund shares purchased..................................... 322 3 583 287 90
-------- -------- -------- ------- -------- -------- --------
TOTAL LIABILITIES........................................... 322 3 182 124 583 287 90
-------- -------- -------- ------- -------- -------- --------
NET ASSETS.................................................. $302,012 $112,734 $109,526 $47,481 $246,367 $326,133 $ 28,805
======== ======== ======== ======= ======== ======== ========
</TABLE>
See Notes to Financial Statements.
B-3
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands)
<TABLE>
<CAPTION>
High
Money Yield Managed Government 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 ......................... $ 5,097 $ 9,436 $ 7,700 $ 4,917 $ 1,916 $ 2 $ 1,970
EXPENSES
Mortality and expense risk fee .... 1,354 1,305 1,315 858 367 148 2,913
-------- -------- -------- -------- -------- ------- --------
NET INVESTMENT INCOME (LOSS) ............ 3,743 8,131 6,385 4,059 1,549 (146) (943)
-------- -------- -------- -------- -------- ------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from
security transactions ............ 22 1,367 (24) (350) 1,671 (75) 9,057
Net unrealized appreciation
(depreciation) on investments .... 228 1,531 (1,269) (1,956) 2,697 1,169 24,020
-------- -------- -------- -------- -------- ------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS .................... 250 2,898 (1,293) (2,306) 4,368 1,094 33,077
-------- -------- -------- -------- -------- ------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ......... $ 3,993 $ 11,029 $ 5,092 $ 1,753 $ 5,917 $ 948 $ 32,134
======== ======== ======== ======== ======== ======= ========
</TABLE>
See Notes to Financial Statements.
(1) Operations commenced on April 1, 1996.
B-4
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF OPERATIONS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Equity Multi- Bond and Equity Inter- Emerging
Income Strategy Equity Income Index national Markets
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account (1)
------- ------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends ......................... $ 10,790 $ 5,822 $ 3,246 $ 2,393 $ 5,391 $ 6,000
EXPENSES
Mortality and expense risk fee .... 2,621 1,023 892 426 1,794 2,677 $ 120
-------- -------- -------- -------- -------- -------- -------
NET INVESTMENT INCOME (LOSS) ............ 8,169 4,799 2,354 1,967 3,597 3,323 (120)
-------- -------- -------- -------- -------- -------- -------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from
security transactions ............ 2,288 40 1,580 (139) 3,059 1,215 (9)
Net unrealized appreciation
(depreciation) on investments .... 26,576 4,673 9,264 (1,227) 22,009 36,279 (383)
-------- -------- -------- -------- -------- -------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS .................... 28,864 4,713 10,844 (1,366) 25,068 37,494 (392)
-------- -------- -------- -------- -------- -------- -------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ......... $ 37,033 $ 9,512 $ 13,198 $ 601 $ 28,665 $ 40,817 $ (512)
======== ======== ======== ======== ======== ======== =======
</TABLE>
See Notes to Financial Statements.
(1) Operations commenced on April 1, 1996.
B-5
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands)
<TABLE>
<CAPTION>
High
Money Yield Managed Government 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>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss) ......... $ 3,743 $ 8,131 6,385 $ 4,059 $ 1,549 $ (146) $ (943)
Net realized gain (loss) from
security transactions ............... 22 1,367 (24) (350) 1,671 (75) 9,057
Net unrealized appreciation
(depreciation) on investments ....... 228 1,531 (1,269) (1,956) 2,697 1,169 24,020
---------- --------- --------- --------- --------- ----------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............ 3,993 11,029 5,092 1,753 5,917 948 32,134
---------- --------- --------- --------- --------- ----------- --------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums ............. 321,230 58,033 64,456 31,163 595 19,431 115,655
Transfers--policy charges and
deductions .......................... (3,380) (1,106) (1,207) (1,052) (149) (48) (2,621)
Transfers in (from other variable
accounts) ........................... 225,700 73,979 49,626 23,966 8,511 21,702 151,434
Transfers out (to other variable
accounts) ........................... (468,490) (59,025) (19,319) (23,202) (12,342) (4,811) (108,767)
Transfers--other ..................... (8,420) (3,331) (2,518) (2,389) (1,460) (268) (7,047)
---------- --------- --------- --------- --------- ----------- --------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS ..... 66,640 68,550 91,038 28,486 (4,845) 36,006 148,654
---------- --------- --------- --------- --------- ----------- --------
NET INCREASE IN NET ASSETS ............. 70,633 79,579 96,130 30,239 1,072 36,954 180,788
NET ASSETS
Beginning of year .................... 62,375 65,851 66,211 49,321 28,574 142,226
---------- --------- --------- --------- --------- ----------- --------
End of year .......................... $ 133,008 $ 145,430 $ 162,341 $ 79,560 $ 29,646 $ 36,954 $323,014
========== ========= ========= ========= ========= =========== ========
</TABLE>
See Notes to Financial Statements.
(1) Operations commenced on April 1, 1996.
B-6
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Equity Multi- Bond and Equity Inter- Emerging
Income Strategy Equity Income Index national Markets
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account (1)
--------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss) ...... $ 8,169 $ 4,799 $ 2,354 $ 1,967 $ 3,597 $ 3,323 $ (120)
Net realized gain (loss) from
security transactions ............ 2,288 40 1,580 (139) 3,059 1,215 (9)
Net unrealized appreciation
(depreciation) on investments .... 26,576 4,673 9,264 (1,227) 22,009 36,279 (383)
--------- -------- -------- -------- -------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ......... 37,033 9,512 13,198 601 28,665 40,817 (512)
--------- -------- -------- -------- -------- -------- ---------
INCREASE (DECREASE) IN NET ASSETS
FROM POLICY TRANSACTIONS
Transfer of net premiums .......... 108,809 38,378 48,041 20,471 102,522 113,891 14,273
Transfers--policy charges and
deductions ....................... (1,752) (1,122) (747) (320) (1,086) (1,735) (85)
Transfers in (from other variable
accounts) ........................ 86,018 25,490 55,281 20,444 92,870 109,050 17,112
Transfers out (to other variable
accounts) ........................ (52,423) (12,149) (33,491) (11,225) (45,695) (49,335) (1,836)
Transfers--other .................. (6,068) (2,404) (1,855) (836) (3,900) (5,800) (147)
--------- -------- -------- -------- -------- -------- ---------
NET INCREASE IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS .. 134,584 48,193 67,229 28,534 144,711 166,071 29,317
--------- -------- -------- -------- -------- -------- ---------
NET INCREASE IN NET ASSETS .......... 171,617 57,705 80,427 29,135 173,376 206,888 28,805
NET ASSETS
Beginning of year ................. 130,395 55,029 29,099 18,346 72,991 119,245
--------- -------- -------- -------- -------- -------- ---------
End of year ....................... $ 302,012 $112,734 $109,526 $ 47,481 $246,367 $326,133 $ 28,805
========= ======== ======== ======== ======== ======== =========
</TABLE>
See Notes to Financial Statements.
(1) Operations commenced on April 1, 1996.
B-7
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In thousands)
<TABLE>
<CAPTION>
High
Money Yield Managed Government Growth
Market Bond Bond Securities Growth LT
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss) .............................. $ 2,498 $ 2,801 $ 2,199 $ 1,297 $ (98) $ 8,494
Net realized gain (loss) from security transactions ....... (140) 487 (95) (222) (1,783) 6,574
Net unrealized appreciation (depreciation) on investments . (10) 2,449 4,750 3,263 7,708 6,191
--------- -------- -------- -------- -------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................. 2,348 5,737 6,854 4,338 5,827 21,259
--------- -------- -------- -------- -------- ---------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums .................................. 261,308 22,854 20,349 18,216 688 45,013
Transfers--policy charges and deductions * ................ (364) (614) (636) (424) (720) (1,351)
Transfers in (from other variable accounts) ............... 95,496 53,916 21,953 20,465 12,132 102,932
Transfers out (to other variable accounts) ................ (337,675) (29,696) (8,318) (6,494) (15,335) (59,032)
Transfers--other * ........................................ (2,158) (1,023) (1,014) (1,284) (1,089) (2,049)
--------- -------- -------- -------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS .......................... 16,607 45,437 32,334 30,479 (4,324) 85,513
--------- -------- -------- -------- -------- ---------
NET INCREASE IN NET ASSETS 18,955 51,174 39,188 34,817 1,503 106,772
NET ASSETS
Beginning of year ......................................... 43,420 14,677 27,023 14,504 27,071 35,454
--------- -------- -------- -------- -------- ---------
End of year ............................................... $ 62,375 $ 65,851 $ 66,211 $ 49,321 $ 28,574 $ 142,226
========= ======== ======== ======== ======== =========
</TABLE>
See Notes to Financial Statements.
* Prior year amounts have been reclassified to conform with current year
presentation.
B-8
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1995
(In thousands)
<TABLE>
<CAPTION>
Equity Multi- Bond and Equity Inter-
Income Strategy Equity Income Index national
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss)............................ $ 297 $ 855 $ (100) $ 377 $ 368 $ 1,309
Net realized gain (loss) from security transactions..... 27 (23) 1 (6) 1,229 309
Net unrealized appreciation on investments.............. 16,440 6,951 1,045 1,206 7,194 4,662
--------- -------- -------- -------- -------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS............................... 16,764 7,783 946 1,577 8,791 6,280
--------- -------- -------- -------- -------- ---------
INCREASE (DECREASE) IN NET ASSETS FROM
POLICY TRANSACTIONS
Transfer of net premiums................................ 42,780 12,463 13,229 9,770 30,757 36,739
Transfers--policy charges and deductions *.............. (1,088) (490) (169) (76) (516) (1,302)
Transfers in (from other variable accounts)............. 53,482 15,539 17,251 8,647 37,983 64,987
Transfers out (to other variable accounts).............. (10,459) (5,516) (2,040) (1,524) (13,200) (28,833)
Transfers--other *...................................... (1,589) (1,166) (118) (48) (794) (1,572)
--------- -------- -------- -------- -------- ---------
NET INCREASE IN NET ASSETS
DERIVED FROM POLICY TRANSACTIONS........................ 83,126 20,830 28,153 16,769 54,230 70,019
--------- -------- -------- -------- -------- ---------
NET INCREASE IN NET ASSETS................................. 99,890 28,613 29,099 18,346 63,021 76,299
NET ASSETS
Beginning of year....................................... 30,505 26,416 9,970 42,946
--------- -------- -------- -------- -------- ---------
End of year............................................. $ 130,395 $ 55,029 $ 29,099 $ 18,346 $ 72,991 $ 119,245
========= ======== ======== ======== ======== =========
</TABLE>
See Notes to Financial Statements.
* Prior year amounts have been reclassified to conform with current year
presentation.
B-9
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Pacific Select Variable Annuity Separate Account (the "Separate
Account") is registered as a unit investment trust under the Investment Company
Act of 1940, as amended, and during 1996 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 (not offered to new Contract
Owners beginning January 1, 1994), 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. 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 portfolios of
investments, are included elsewhere in this report and should be read in
conjunction with the Separate Account's financial statements.
The Separate Account has organized and registered with the Securities
and Exchange Commission two new Variable Accounts, the Aggressive Equity
Variable Account and the Emerging Markets Variable Account. Both Variable
Accounts commenced operations on April 1, 1996.
The Separate Account was established by Pacific Mutual Life Insurance
Company ("Pacific Mutual") on November 30, 1989 and commenced operations on July
24, 1990. 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 annuities, are obligations of Pacific Mutual.
The Separate Account held by Pacific Mutual represents funds from
individual flexible premium variable accumulation deferred annuity contracts.
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 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 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 1996, the Fund has declared dividends for each portfolio except
the Emerging Markets 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 Mutual charges the Separate Account daily for mortality and
expense risks assumed with respect to variable annuity contracts funded by the
Separate Account at an annual rate of 1.25% of the average daily net assets of
each Variable Account. Under the contracts, Pacific Mutual makes certain
deductions from the net assets of each Variable Account for administrative
expenses, contract maintenance, any state premium taxes, and any surrender
charges. The operating expenses of the Separate Account are paid by Pacific
Mutual.
B-10
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
4. RELATED PARTY AGREEMENT
Pacific Mutual Distributors, Inc., a wholly-owned subsidiary of Pacific
Mutual, is the principal underwriter of variable annuity contracts funded by
interests in the Separate Account, and is compensated by Pacific Mutual.
5. SELECTED ACCUMULATION UNIT** INFORMATION
Selected accumulation unit information for the year ended December 31, 1996
were as follows:
<TABLE>
<CAPTION>
High
Money Yield Managed Government 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>
Commencement of Operations 7/24/90 8/16/90 9/05/90 8/22/90 8/16/90 4/1/96 1/04/94
ACCUMULATION UNIT
VALUE:
Beginning $ 11.84 $ 18.82 $ 16.11 $ 15.68 $ 19.95 $ 10.00 $ 15.11
======= ======= ======= ======= ======= ======= =======
Ending $ 12.29 $ 20.68 $ 16.58 $ 15.94 $ 24.36 $ 10.69 $ 17.59
======= ======= ======= ======= ======= ======= =======
Number of Units Outstanding at
End of Year 10,826,212 7,031,597 9,789,438 4,989,942 1,217,042 3,457,578 18,364,396
<CAPTION>
Equity Multi- Bond & Equity Inter- Emerging
Income Strategy Equity Income Index National Markets
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Commencement of Operations 8/16/90 9/25/90 1/04/95 1/04/95 2/11/91 8/16/90 4/1/96
ACCUMULATION UNIT
VALUE:
Beginning $ 18.32 $ 17.68 $ 12.24 $ 13.21 $ 17.62 $ 12.52 $ 10.00
======= ======= ======= ======= ======= ======= =======
Ending $ 21.61 $ 19.65 $ 15.47 $ 12.94 $ 21.29 $ 15.07 $ 9.59
======= ======= ======= ======= ======= ======= =======
Number of Units Outstanding at
End of Year 13,975,807 5,736,463 7,078,169 3,669,755 11,570,124 21,638,113 3,004,491
</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-11
<PAGE>
PACIFIC SELECT VARIABLE ANNUITY SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
6. CONTRACT OWNERS' COST OF INVESTMENT 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 (M&E) charges. Total cost and market
value of total Contract Owners' investments in the Fund as of December 31, 1996
were as follows (Amounts in thousands):
<TABLE>
<CAPTION>
High
Money Yield Managed Government 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>
Total cost of investments at beginning of year $ 62,510 $ 63,907 $ 63,939 $47,409 $ 25,479 $134,923
Add: Total proceeds from sales of units net of
M&E charges 239,142 96,523 90,084 37,688 8,200 $ 37,622 200,078
Reinvested distributions from the Fund:
(a) Net investment income 5,097 8,649 6,137 3,554 126 2 1,969
(b) Net realized gain 787 1,563 1,363 1,790 1
-------- -------- -------- ------- -------- -------- --------
Sub-Total 306,749 169,866 161,723 90,014 35,595 37,624 336,971
Less: Cost of investments disposed during the year 173,835 27,911 385 10,410 11,740 1,840 45,280
-------- -------- -------- ------- -------- -------- --------
Total cost of investments at end of year 132,914 141,955 161,338 79,604 23,855 35,784 291,691
Add: Unrealized appreciation (depreciation) 94 3,475 1,003 (44) 5,791 1,170 31,323
-------- -------- -------- ------- -------- -------- --------
Total market value of investments at end of year $133,008 $145,430 $162,341 $79,560 $ 29,646 $ 36,954 $323,014
======== ======== ======== ======= ======== ======== ========
<CAPTION>
Emerging
Equity Multi- Bond & Equity Inter- Markets
Income Strategy Equity Income Index national Variable
Variable Variable Variable Variable Variable Variable Account
Account Account Account Account Account Account (1)
-------- -------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Total cost of investments at beginning of year $116,389 $ 49,299 $ 28,054 $17,139 $ 65,584 $116,439
Add: Total proceeds from sales of units net of
M&E charges 147,491 48,364 77,918 32,108 157,900 179,200 $ 29,433
Reinvested distributions from the Fund:
(a) Net investment income 2,752 2,423 1,856 2,262 2,961 6,000
(b) Net realized gain 8,038 3,399 1,390 131 2,430
-------- -------- -------- ------- -------- -------- --------
Sub-Total 274,670 103,485 109,218 51,640 228,875 301,639 29,433
Less: Cost of investments disposed during the year 13,240 1,155 10,002 4,138 11,923 14,592 244
-------- -------- -------- ------- -------- -------- --------
Total cost of investments at end of year 261,430 102,330 99,216 47,502 216,952 287,047 29,189
Add: Unrealized appreciation (depreciation) 40,582 10,404 10,310 (21) 29,415 39,086 (384)
-------- -------- -------- ------- -------- -------- --------
Total market value of investments at end of year $302,012 $112,734 $109,526 $47,481 $246,367 $326,133 $ 28,805
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</TABLE>
(1) Operations commenced on April 1, 1996.
B-12
