<PAGE>
Semi-Annual Report
.Pacific Corinthian Variable Separate Account of
Pacific Corinthian Life Insurance Company
[LOGO OF PACIFIC CORINTHIAN
VARIABLE ANNUITY APPEARS HERE]
Pacific Corinthian Life Insurance Company
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
I II III IV VII IX
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Money Market Portfolio (609 shares; cost $6,115) ........... $6,123
Equity Portfolio (4,456 shares; cost $61,495) .............. $102,661
Bond and Income Portfolio (2,685 shares; cost $31,349) ..... $31,488
Government Securities Portfolio (131 shares; cost $1,341) .. $1,359
Equity Income Portfolio (1,027 shares; cost $15,008) ....... $23,018
Multi-Strategy Portfolio (1,217 shares; cost $14,755) ...... $18,407
Managed Bond Portfolio (5 shares; cost $51) ................
High Yield Bond Portfolio (18 shares; cost $177) ...........
Equity Index Portfolio (26 shares; cost $493) ..............
International Portfolio (51 shares; cost $727) .............
Growth LT Portfolio (97 shares; cost $1,424) ...............
Receivables:
Fund shares redeemed ....................................... 14 12
--------------------------------------------------------------
Total Assets................................................. 6,123 102,675 31,500 1,359 23,018 18,407
--------------------------------------------------------------
LIABILITIES
Payables:
Due to Pacific Corinthian Life Insurance Co ................ 14 12
Other liabilities .......................................... 27 857 334 7 186 65
--------------------------------------------------------------
Total Liabilities ........................................... 27 871 346 7 186 65
--------------------------------------------------------------
NET ASSETS .................................................. $6,096 $101,804 $31,154 $1,352 $22,832 $18,342
==============================================================
<CAPTION>
Variable Variable Variable Variable Variable
Account Account Account Account Account
X XI XII XIII XIV
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Money Market Portfolio (609 shares; cost $6,115) ...........
Equity Portfolio (4,456 shares; cost $61,495) ..............
Bond and Income Portfolio (2,685 shares; cost $31,349) .....
Government Securities Portfolio (131 shares; cost $1,341) ..
Equity Income Portfolio (1,027 shares; cost $15,008) .......
Multi-Strategy Portfolio (1,217 shares; cost $14,755) ......
Managed Bond Portfolio (5 shares; cost $51) ................ 51
High Yield Bond Portfolio (18 shares; cost $177) ........... 181
Equity Index Portfolio (26 shares; cost $493) .............. 609
International Portfolio (51 shares; cost $727) ............. 873
Growth LT Portfolio (97 shares; cost $1,424) ............... 1,597
Receivables:
Fund shares redeemed .......................................
---------------------------------------------------
Total Assets................................................. 51 181 609 873 1,597
---------------------------------------------------
LIABILITIES
Payables:
Due to Pacific Corinthian Life Insurance Co ................
Other liabilities .......................................... 3 4 9
---------------------------------------------------
Total Liabilities ........................................... 3 4 9
---------------------------------------------------
NET ASSETS .................................................. $51 $181 $606 $869 $1,588
===================================================
</TABLE>
See Notes to Financial Statements
B-1
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1997 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
I II III IV VII IX
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends ................................................. $148 $ 3,427 $1,523 $36 $1,394 $1,228
---------------------------------------------------------------
Total Investment Income .................................... 148 3,427 1,523 36 1,394 1,228
---------------------------------------------------------------
EXPENSES
Mortality and expense risk fees ........................... 35 560 182 8 125 103
Other operating expenses .................................. 1 5 2 1 1
---------------------------------------------------------------
Total Expenses ............................................. 36 565 184 8 126 104
---------------------------------------------------------------
Net Investment Income ...................................... 112 2,862 1,339 28 1,268 1,124
---------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) from security transactions ....... 2 1,207 (3) 639 305
Net unrealized appreciation (depreciation)
on investments .......................................... 7,664 (855) (7) 1,422 197
---------------------------------------------------------------
Net Realized And Unrealized Gain
(Loss) On Investments ..................................... 2 8,871 (858) (7) 2,061 502
---------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................. $114 $11,733 $ 481 $21 $3,329 $1,626
===============================================================
<CAPTION>
Variable Variable Variable Variable Variable
Account Account Account Account Account
X XI XII XIII XIV
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends ................................................. $ 2 $7 $23 $ 19 $ 78
-----------------------------------------------------
Total Investment Income .................................... 2 7 23 19 78
-----------------------------------------------------
EXPENSES
Mortality and expense risk fees ........................... 1 1 3 5 8
Other operating expenses ..................................
-----------------------------------------------------
Total Expenses ............................................. 1 1 3 5 8
-----------------------------------------------------
Net Investment Income ...................................... 1 6 20 14 70
-----------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) from security transactions ....... 1 1 26 41 29
Net unrealized appreciation (depreciation)
on investments .......................................... (1) 43 52 (28)
-----------------------------------------------------
Net Realized And Unrealized Gain
(Loss) On Investments ..................................... 0 1 69 93 1
-----------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................. $1 $7 $89 $107 $71
=====================================================
</TABLE>
See Notes to Financial Statements
B-2
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED JUNE 30, 1997 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable
Account Account Account Account Account
I II III IV VII
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income .................................... $ 112 $ 2,862 $1,339 $ 28 $ 1,268
Net realized gain (loss) from security transactions ...... 2 1,207 (3) 639
Net unrealized appreciation (depreciation)
on investments ......................................... 7,664 (855) (7) 1,422
----------------------------------------------------
Net Increase In Net Assets
Resulting From Operations ................................ 114 11,733 481 21 3,329
----------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM ACCOUNT TRANSACTIONS
Transfers in ............................................. 403 487 70 17 156
Transfers out ............................................ (423) (2,547) (2,048) (74) (1,389)
----------------------------------------------------
Net Increase (Decrease) In Net Assets Derived
From Account Transactions ................................ (20) (2,060) (1,978) (57) (1,233)
----------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ..................... 94 9,673 (1,497) (36) 2,096
----------------------------------------------------
NET ASSETS
Beginning of Period ...................................... 6,002 92,131 32,651 1,388 20,736
----------------------------------------------------
End of Period ............................................ $6,096 $101,804 $31,154 $1,352 $22,832
====================================================
<CAPTION>
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
IX X XI XII XIII XIV
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income .................................... $ 1,124 $ 1 $ 6 $ 20 $ 14 $ 70
Net realized gain (loss) from security transactions ...... 305 1 1 26 41 29
Net unrealized appreciation (depreciation)
on investments ......................................... 197 (1) 43 52 (28)
---------------------------------------------------------------
Net Increase In Net Assets
Resulting From Operations ................................ 1,626 1 7 89 107 71
---------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM ACCOUNT TRANSACTIONS
Transfers in ............................................. 16 101 172 216 158
Transfers out ............................................ (1,341) (13) (12) (68) (130) (65)
---------------------------------------------------------------
Net Increase (Decrease) In Net Assets Derived
From Account Transactions ................................ (1,341) 3 89 104 86 93
---------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ..................... 285 4 96 193 193 164
---------------------------------------------------------------
NET ASSETS
Beginning of Period ...................................... 18,057 47 85 413 676 1,424
---------------------------------------------------------------
End of Period ............................................ $18,342 $ 51 $181 $606 $ 869 $1,588
===============================================================
</TABLE>
See Notes to Financial Statements
B-3
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable
Account Account Account Account Account
I II III IV VII
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (Loss) .................... $ 207 $ 4,099 $ 1,922 $ 106 $ 970
Net realized gain from security transactions .... 3 2,716 112 16 1,023
Net unrealized appreciation (depreciation)
on investments ................................ 16 13,454 (2,995) (99) 1,347
--------------------------------------------------------
Net Increase (Decrease) In Net Assets
Resulting From Operations ....................... 226 20,269 (961) 23 3,340
--------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM ACCOUNT TRANSACTIONS
Transfers in .................................... 1,293 649 94 40 87
Transfers out ................................... (1,426) (7,026) (4,553) (662) (3,114)
--------------------------------------------------------
Net Increase (Decrease) In Net Assets Derived
From Account Transactions ....................... (133) (6,377) (4,459) (622) (3,027)
--------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ............ 93 13,892 (5,420) (599) 313
--------------------------------------------------------
NET ASSETS
Beginning of Year ............................... 5,909 78,239 38,071 1,987 20,423
--------------------------------------------------------
End of Year ..................................... $ 6,002 $ 92,131 $ 32,651 $ 1,388 $20,736
========================================================
<CAPTION>
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
IX X XI XII XIII XIV
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (Loss) .................... $ 1,202 $ 5 $ 7 $ 11 $ 8 $ (3)
Net realized gain from security transactions .... 496 1 12 6 50
Net unrealized appreciation (depreciation)
on investments ................................ 194 (7) 1 49 74 109
----------------------------------------------------------------------
Net Increase (Decrease) In Net Assets
Resulting From Operations ....................... 1,892 (1) 8 72 88 156
----------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM ACCOUNT TRANSACTIONS
Transfers in .................................... 63 8 9 117 308 646
Transfers out ................................... (2,388) (84) (10) (75) (70) (186)
----------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Derived
From Account Transactions ....................... (2,325) (76) (1) 42 238 460
----------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ............ (433) (77) 7 114 326 616
----------------------------------------------------------------------
NET ASSETS
Beginning of Year ............................... 18,490 124 78 299 350 808
----------------------------------------------------------------------
End of Year ..................................... $ 18,057 $ 47 $ 85 $ 413 $ 676 $1,424
======================================================================
</TABLE>
See Notes to Financial Statements
B-4
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION
Pacific Corinthian Variable Separate Account of Pacific Corinthian Life
Insurance Company (the "Separate Account"), is a separate investment account
established by a resolution of the Board of Directors of Pacific Corinthian Life
Insurance Company (the "Company").
The Separate Account held by the Company represents funds from individual
flexible premium deferred annuity and variable accumulation contracts. The
assets of the Separate Account are carried at market value.
The Separate Account which operates as a unit investment trust under the
Investment Company Act of 1940, as amended, is divided into subaccounts
("Variable Accounts"). Each Variable Account invests in shares of a designated
Portfolio of Pacific Select Fund (the "Fund") as follows:
<TABLE>
<CAPTION>
Portfolios
----------
<S> <C>
Variable Account I Money Market Portfolio
Variable Account II Equity Portfolio
Variable Account III Bond and Income Portfolio
Variable Account IV Government Securities Portfolio
Variable Account VII Equity Income Portfolio
Variable Account IX Multi-Strategy Portfolio
Variable Account X Managed Bond Portfolio
Variable Account XI High Yield Bond Portfolio
Variable Account XII Equity Index Portfolio
Variable Account XIII International Portfolio
Variable Account XIV Growth LT Portfolio
</TABLE>
The Company, a subsidiary of Pacific Mutual Life Insurance Company, is stock
life insurance company organized under the laws of the State of California.
The Company was formed to rehabilitate the business of First Capital Life
Insurance Company under a five year rehabilitation plan ("the Plan"). The Plan
required all Contract Owners to make an election to either surrender their
Contract or continue as Contract Owners and consent to the assumption and
reinsurance by the Company.
The Plan does not allow the Company to accept new premiums nor does it allow
the Contract Owners to transfer from any of the Variable Accounts to the Fixed
Account, or from the Fixed Account to any of the Variable Accounts. Transfers
continue to be permitted among the Variable Accounts. The Plan had no impact
upon the operations or unit values of the Separate Account.
2. SIGNIFICANT ACCOUNTING POLICIES
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 is 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. Reinvestment of Dividends
Dividends received from net investment income and net realized capital gains
are reinvested in additional shares of the portfolio of the Fund making the
distribution or, at the election of the Separate Account, are received in cash.
Dividend income and capital gain distributions are recorded as income on the ex-
dividend date.
C. Federal Income Taxes
Operations of the Separate Account form a part of the Company, which is taxed
as a "life insurance company" under the Internal Revenue Code (the "Code").
Under current law, no Federal income taxes are payable with respect to the
Separate Account.
Under the principles set forth in Internal Revenue Service Revenue Ruling 81-
225 and section 817(h) of the Code and regulations thereunder, the Company
believes that it will be treated as the owner of the assets invested in the
Separate Account for Federal income tax purposes, with the result that earnings
and gains, if any, derived from those assets will not be included in a Contract
Owner's gross income until amounts are withdrawn, or received pursuant to an
Optional Payment Plan.
3. CONTRACT CHARGES
A contingent deferred sales charge may be deducted upon partial or complete
withdrawal or upon annuitization of a Contract.
An annual contract maintenance charge of $30 is imposed on all Contracts on
December 31 of each year. The charge covers the cost of Contract administration
for the following year and is apportioned equally among the accounts to which
the Contract Value is allocated.
Mortality and expense risks assumed by the Company are compensated by a charge
equivalent to an annual rate of 1.19% of the value of each Variable Account's
net assets of which approximately 1.00% is for assuming mortality risks and
0.19% is for assuming expense risks.
In addition, the Separate Account bears certain of its operating expenses,
subject to the Company guarantee that such expenses will not exceed 0.25% of any
Variable Account's average daily net assets annually. The Company further
guarantees that the ordinary operating expenses of a Variable Account together
with the operating expenses incurred by its underlying Fund Portfolio, exclusive
of advisory and
B-5
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
management fees, interest, taxes, brokerage commissions,
transaction costs or extraordinary expenses, will not exceed 0.6% of average
daily net assets annually after consideration for any adjustment by the Fund's
Investment Adviser for Fund expenses in excess of state expense limitations,
except that additional custodial costs associated with holding foreign
securities and foreign taxes on dividends, interests and gains will also be
excluded with respect to the underlying International Portfolio of the Fund.
5. SELECTED ACCUMULATION UNIT** INFORMATION
Selected accumulation unit information for the period ended June 30, 1997 were
as follows:
<TABLE>
<CAPTION>
Accumulation
Unit Value
--------------------------------------------------------------
At
Begin- At Number of Units
Variable ning of End of Outstanding
Accounts Period Period at End of Period
--------------------------------------------------------------
<S> <C> <C> <C>
I $1.819 $1.854 3,287,408
II 5.208 5.873 17,333,049
III 3.879 3.939 7,908,699
IV 1.835 1.865 725,043
VII 2.053 2.392 9,543,794
IX 1.865 2.041 8,988,340
X 1.202 1.227 41,475
XI 1.266 1.321 136,803
XII 1.612 1.931 313,849
XIII 1.328 1.507 576,724
XIV 1.520 1.592 997,638
</TABLE>
- --------------
** Accumulation Unit: unit of measure used to calculate the value of a Contract
Owner's interest in a Variable Account during the Accumulation Period.
B-6
