<PAGE>
SEMI-ANNUAL REPORT
. PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT OF
PACIFIC LIFE INSURANCE COMPANY
[LOGO OF
PACIFIC
CORINTHIAN]
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account
I II III IV VII IX X
======================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Money Market Portfolio (351 shares; cost $3,523) .......... $3,531
Equity Portfolio (2,245 shares; cost $30,202) ............. $62,612
Bond and Income Portfolio (1,298 shares; cost $15,127) .... $17,068
Government Securities Portfolio (121 shares; cost $1,240) . $1,295
Equity Income Portfolio (613 shares; cost $9,136) ......... $15,405
Multi-Strategy Portfolio (657 shares; cost $7,829) ........ $10,775
Managed Bond Portfolio (21 shares; cost $236) ............. $239
High Yield Bond Portfolio (43 shares; cost $425) ..........
Equity Index Portfolio (95 shares; cost $2,383) ...........
International Portfolio (53 shares; cost $779) ............
Growth LT Portfolio (121 shares; cost $1,958) .............
Receivables:
Fund shares redeemed ...................................... 31 8
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Total Assets................................................ 3,531 62,643 17,076 1,295 15,405 10,775 239
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LIABILITIES
Payables:
Due to Pacific Life Insurance Company ..................... 31 8
Other liabilities ......................................... 8 554 69 3 159 14 1
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Total Liabilities .......................................... 8 585 77 3 159 14 1
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NET ASSETS ................................................. $3,523 $62,058 $16,999 $1,292 $15,246 $10,761 $238
======================================================================
<CAPTION>
Variable Variable Variable Variable
Account Account Account Account
XI XII XIII XIV
======================================
<S> <C> <C> <C> <C>
ASSETS
Investments in Pacific Select Fund:
Money Market Portfolio (351 shares; cost $3,523) ..........
Equity Portfolio (2,245 shares; cost $30,202) .............
Bond and Income Portfolio (1,298 shares; cost $15,127) ....
Government Securities Portfolio (121 shares; cost $1,240) .
Equity Income Portfolio (613 shares; cost $9,136) .........
Multi-Strategy Portfolio (657 shares; cost $7,829) ........
Managed Bond Portfolio (21 shares; cost $236) .............
High Yield Bond Portfolio (43 shares; cost $425) .......... $423
Equity Index Portfolio (95 shares; cost $2,383) ........... $2,824
International Portfolio (53 shares; cost $779) ............ $918
Growth LT Portfolio (121 shares; cost $1,958) ............. $2,621
Receivables:
Fund shares redeemed ......................................
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Total Assets................................................ 423 2,824 918 2,621
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LIABILITIES
Payables:
Due to Pacific Life Insurance Company .....................
Other liabilities ......................................... 1 6 2 8
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Total Liabilities .......................................... 1 6 2 8
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NET ASSETS ................................................. $422 $2,818 $916 $2,613
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</TABLE>
See Notes to Financial Statements
B-1
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account Account Account
I II III IV VII IX X XI XII XIII XIV
==================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends ...................... $97 $ 3,748 $ 619 $58 $1,772 $ 959 $10 $15 $ 35 $ 63 $104
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Total Investment Income ......... 97 3,748 619 58 1,772 959 10 15 35 63 104
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EXPENSES
Mortality and expense risk fees. 22 384 112 7 93 70 1 2 13 5 13
Other operating expenses ....... 3 1 1 1 1
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Total Expenses .................. 22 387 113 7 94 71 1 2 14 5 13
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Net Investment Income ........... 75 3,361 506 51 1,678 888 9 13 21 58 91
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REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
from security transactions .... 3 9,234 679 (1) 1,230 685 (1) (3) 1 3
Net unrealized appreciation
(depreciation) on investments . (2) 1,167 (412) (7) (717) (451) (7) 309 53 468
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Net Realized And Unrealized Gain
(Loss) On Investments ......... 1 10,401 267 (8) 513 234 (1) (7) 306 54 471
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NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ...... $76 $13,762 $ 773 $43 $2,191 $1,122 $ 8 $ 6 $327 $112 $562
==================================================================================================
</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, 1998 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account Account Account
I II III IV VII IX X XI XII XIII XIV
==================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income .......... $ 75 $ 3,361 $ 506 $ 51 $ 1,678 $ 888 $ 9 $ 13 $ 21 $ 58 $ 91
Net realized gain (loss) from
security transactions ......... 3 9,234 679 (1) 1,230 685 (1) (3) 1 3
Net unrealized appreciation
(depreciation) on investments . (2) 1,167 (412) (7) (717) (451) (7) 309 53 468
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Net Increase In Net Assets
Resulting From Operations ...... 76 13,762 773 43 2,191 1,122 8 6 327 112 562
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INCREASE (DECREASE) IN NET ASSETS
FROM ACCOUNT TRANSACTIONS
Transfers in ................... 799 78 116 112 595 99 87 173 1,411 199 868
Transfers out .................. (1,439) (22,289) (6,895) (80) (3,819) (3,265) (50) (57) (465) (269) (463)
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Net Increase (Decrease) In Net
Assets Derived From Account
Transactions .................. (640) (22,211) (6,779) 32 (3,224) (3,166) 37 116 946 (70) 405
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NET INCREASE (DECREASE) IN NET
ASSETS ........................ (564) (8,449) (6,006) 75 (1,033) (2,044) 45 122 1,273 42 967
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NET ASSETS
Beginning of Period ............ 4,087 70,507 23,005 1,217 16,279 12,805 193 300 1,545 874 1,646
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End of Period .................. $3,523 $62,058 $16,999 $1,292 $15,246 $10,761 $238 $422 $2,818 $916 $2,613
==================================================================================================
</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, 1997
(In thousands)
<TABLE>
<CAPTION>
Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account
I II III IV VII IX X XI
================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income ........................ $ 218 $ 2,665 $ 2,000 $ 55 $ 1,227 $ 1,282 $ 4 $ 14
Net realized gain from security transactions . 9 15,642 825 9 3,789 1,803 1 1
Net unrealized appreciation (depreciation)
on investments ............................. 2 (2,259) 1,360 38 398 (58) 1
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Net Increase In Net Assets
Resulting From Operations .................... 229 16,048 4,185 102 5,414 3,027 6 15
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INCREASE (DECREASE) IN NET ASSETS
FROM ACCOUNT TRANSACTIONS
Transfers in ................................. 609 1,275 468 72 591 341 167 227
Transfers out ................................ (2,753) (38,947) (14,299) (345) (10,462) (8,620) (27) (27)
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Net Increase (Decrease) In Net Assets
Derived From Account Transactions ............ (2,144) (37,672) (13,831) (273) (9,871) (8,279) 140 200
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NET INCREASE (DECREASE) IN NET ASSETS ......... (1,915) (21,624) (9,646) (171) (4,457) (5,252) 146 215
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NET ASSETS
Beginning of Year ............................ 6,002 92,131 32,651 1,388 20,736 18,057 47 85
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End of Year .................................. $ 4,087 $ 70,507 $ 23,005 $1,217 $ 16,279 $12,805 $193 $300
================================================================================
<CAPTION>
Variable Variable Variable
Account Account Account
XII XIII XIV
============================
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income ........................ $ 22 $ 21 $ 61
Net realized gain from security transactions . 73 54 102
Net unrealized appreciation (depreciation)
on investments ............................. 59 (8) (5)
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Net Increase In Net Assets
Resulting From Operations .................... 154 67 158
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INCREASE (DECREASE) IN NET ASSETS
FROM ACCOUNT TRANSACTIONS
Transfers in ................................. 1,203 400 624
Transfers out ................................ (225) (269) (560)
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Net Increase (Decrease) In Net Assets
Derived From Account Transactions ............ 978 131 64
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NET INCREASE (DECREASE) IN NET ASSETS ......... 1,132 198 222
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NET ASSETS
Beginning of Year ............................ 413 676 1,424
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End of Year .................................. $1,545 $ 874 $1,646
==========================
</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 (the "Separate Account") of
Pacific Life Insurance Company (formerly named Pacific Mutual Life Insurance
Company - see Note 1 to Financial Statements of the Pacific Select Fund on A-
67), is a separate investment account originally established by a resolution of
the Board of Directors of Pacific Corinthian Life Insurance Company ("PCL").
PCL, formerly a wholly owned subsidiary of Pacific Life Insurance Company
("Pacific Life"), was a stock life insurance company organized under the laws of
the State of California.
PCL was formed to rehabilitate the business of First Capital Life Insurance
Company ("FCL") under a five year rehabilitation plan ("the Plan"). Under the
terms of the Plan, FCL's insurance policies in force, primarily individual
annuities and universal life insurance, were restructured and assumed by PCL on
December 31, 1992, pursuant to an assumption reinsurance agreement and asset
purchase agreement. On September 30, 1997, PCL completed the Plan of FCL. on
October 30, 1997, PCL was merged into Pacific Life, with Pacific Life as the
surviving entity. The Separate Account remained intact and became a Separate
Account of Pacific Life.
During the rehabilitation period, the Plan did not allow PCL to accept new
premiums nor did 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 were permitted among the Variable Accounts. The
Plan had no impact upon the operations or unit values of the Separate Account.
The Separate Account held by Pacific Life 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"). The assets in each Variable Account are invested in
shares of the corresponding portfolios of Pacific Select Fund (the "Fund") as
follows:
Portfolios
----------
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
Each Variable Account pursues different investment objectives and policies.
The financial statements of the Fund, including the schedules of investments,
are included in Section A of this report and should be read in conjunction with
the Separate Account's financial statements.
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 are valued at the reported net asset
values of the respective portfolios. Valuation of securities held by the Fund is
discussed in the notes to its financial statements.
B. Security Transactions
Transactions are recorded on the trade date. Realized gains and losses on
sales of investments are determined on the basis of identified cost.
C. Federal Income Taxes
The operations of the Separate Account will be reported on the Federal
income tax return of Pacific Life, which is taxed as a life insurance company
under the provisions of the Tax Reform Act of 1986. Under current tax law, no
Federal income taxes are expected to be paid by Pacific Life with respect to the
operations of the Separate Account.
B-5
<PAGE>
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
3. DIVIDENDS
During the six months period ended June 30, 1998, the fund has declared
dividends for each portfolio invested by the Separate Account. 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.
4. 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
and is apportioned equally among the Accounts to which the Contract Value is
allocated.
Mortality and expense risks assumed by Pacific Life are compensated for 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 Pacific Life's guarantee that such expenses will not exceed 0.25% of
each Variable Account's average daily net assets annually. Pacific Life 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 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. RELATED PARTY AGREEMENT
Pacific Mutual Distributors, Inc., a wholly-owned subsidiary of Pacific
Life, serves as principal underwriter of variable annuity contracts funded by
interests in the Separate Account, without remuneration from the Separate
Account.
6. SELECTED ACCUMULATION UNIT** INFORMATION
Selected accumulation unit information for the period ended June 30, 1998
were as follows:
<TABLE>
<CAPTION>
Accumulation
Unit Value
------------------ Number of
At Units
Begin- At Outstanding
Variable ning of End of At End of
Accounts Period Period Period
-------- ------- ------ -----------
<S> <C> <C> <C>
I $1.893 $1.931 1,824,313
II 6.081 7.489 8,286,190
III 4.458 4.647 3,657,883
IV 1.985 2.052 629,759
VII 2.609 2.997 5,087,733
IX 2.204 2.420 4,447,422
X 1.306 1.351 176,371
XI 1.369 1.399 301,794
XII 2.118 2.475 1,138,685
XIII 1.434 1.645 556,451
XIV 1.667 2.163 1,208,021
</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
