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Dear Valued Policyholder:
Solid gains in corporate profits, better-than-expected progress on cutting the
budget deficit and the lack of inflationary pressures provided the backdrop for
a strong first half of U.S. investment gains in 1995. Foreign capital markets
also rallied, encouraged by declining U.S. interest rates. Early indications are
that the overall demand for variable annuities was robust.
The PFL Wright Variable Annuity continues to make inroads with those individuals
involved in retirement planning. Securities with high quality characteristics
such as those in the underlying Wright True Blue Chip portfolios are expected to
achieve premium rates of return based on their comparatively favorable
valuations and growth prospects.
Actions taken in 1994 to introduce the PFL Wright Variable Annuity, and during
this year's first half to heighten interest in existing markets and expand
distribution to new investment arenas are beginning to take effect. We are
looking forward to the last half of 1995 with great anticipation.
It is our pleasure to present the Semi-Annual Report of the PFL Wright Variable
Annuity Account for the six months ended June 30, 1995. Information on the
following subaccounts are contained in this report:
Wright Near Term Bond
Wright Total Return Bond
Wright Selected Blue Chip
Wright International Blue Chip
We want to express our continued appreciation of the confidence you have placed
in us. May the closing months of 1995 be even more rewarding for you and yours
than the year's first half.
Sincerely,
/s/ William L. Busler
William L. Busler
President
PFL Life Insurance Company
2
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The PFL Wright Variable Annuity Account
Balance Sheet
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Wright
Near Term
Bond
Total Subaccount
----------- ----------
<S> <C> <C>
Assets
Cash:.............................................. $ 15 -
Investments in mutual funds, at current
market value:
Wright Managed Blue Chip Series Trust
Wright Near Term Bond Portfolio
33,660.846 shares (cost $323,053)........... 329,203 329,203
Wright Total Return Bond Portfolio
38,407.160 shares (cost $350,109)........... 366,404 -
Wright Selected Blue Chip Portfolio
169,604.768 shares (cost $1,641,097)........ 1,816,467 -
Wright International Blue Chip Portfolio
122,806.780 shares (cost $1,176,593)........ 1,197,366 -
----------- ---------
Total investments in mutual funds............... 3,709,440 329,203
----------- ---------
Total Assets................................... $ 3,709,455 329,203
=========== =========
Liabilities and Contract Owners' Equity
Liabilities:
Contract termination payable................... $ 183 3
----------- ---------
Total Liabilities.............................. 183 3
Contract Owners' Equity:
Deferred annuity contracts terminable by
owners (Notes 2 and 5)........................ 3,709,272 329,200
----------- ---------
$ 3,709,455 329,203
=========== =========
</TABLE>
See accompanying Notes to Financial Statements.
3
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The PFL Wright Variable Annuity Account
Balance Sheet
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Wright Wright Wright
Total Selected International
Return Bond Blue Chip Blue Chip
Subaccount Subaccount Subaccount
---------- ---------- ----------
<S> <C> <C> <C>
Assets
Cash:.............................................. 15 - -
Investments in mutual funds, at current
market value:
Wright Managed Blue Chip Series Trust
Wright Near Term Bond Portfolio
33,660.846 shares (cost $323,053)........... - - -
Wright Total Return Bond Portfolio
38,407.160 shares (cost $350,109)........... 366,404 - -
Wright Selected Blue Chip Portfolio
169,604.768 shares (cost $1,641,097)........ - 1,816,467 -
Wright International Blue Chip Portfolio
122,806.780 shares (cost $1,176,593)........ - - 1,197,366
---------- ---------- ----------
Total investments in mutual funds............... 366,404 1,816,467 1,197,366
---------- ---------- ----------
Total Assets................................... 366,419 1,816,467 1,197,366
========== ========== ==========
Liabilities and Contract Owners' Equity
Liabilities:
Contract termination payable................... - 155 25
---------- ---------- ----------
Total Liabilities.............................. - 155 25
Contract Owners' Equity:
Deferred annuity contracts terminable by
owners (Notes 2 and 5)........................ 366,419 1,816,312 1,197,341
---------- ---------- ----------
366,419 1,816,467 1,197,366
========== ========== ==========
</TABLE>
See accompanying Notes to Financial Statements.
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The PFL Wright Variable Annuity Account
Statement of Operations
Six Months Ended June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Wright
Near Term
Bond
Total Subaccount
------- ------------
<S> <C> <C>
Net Investment Income (Loss)
Income:
Dividends............................. $ 22,356 8,597
Expenses:
Administration Fee (Note 4).......... 990 67
Mortality and expense risk charge
(Note 4)........................... 18,739 1,738
--------- ---------
Net investment income (loss)..... 2,627 6,792
--------- ---------
Net Realized and Unrealized Capital Gain
From Investments
Net realized capital gain (loss) from
sales of investments:
Proceeds from sales.................. 891,422 201,409
Cost of investments sold............. 893,035 202,511
--------- ---------
Net realized capital gain (loss).......... (1,613) (1,102)
--------- ---------
Net change in unrealized appreciation
(depreciation) of investments:
Beginning of the period.............. (141,333) (11,500)
End of the period.................... 218,588 6,150
--------- ---------
Net change in unrealized
appreciation (depreciation)
of investments................. 359,921 17,650
--------- ---------
Net realized and unrealized
capital gain from investments.. 358,308 16,548
--------- ---------
Increase from Operations.................. $ 360,935 23,340
========= =========
</TABLE>
See accompanying Notes to Financial Statements.
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The PFL Wright Variable Annuity Account
Statement of Operations
Six Months Ended June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Wright Wright Wright
Total Selected International
Return Bond Blue Chip Blue Chip
Subaccount Subaccount Subaccount
------------ ------------ ------------
<S> <C> <C> <C>
Net Investment Income (Loss)
Income:
Dividends............................. 13,759 -- --
Expenses:
Administration Fee (Note 4).......... 143 457 323
Mortality and expense risk charge
(Note 4)........................... 2,484 8,183 6,334
---------- --------- ---------
Net investment income (loss)..... 11,132 (8,640) (6,657)
---------- --------- ---------
Net Realized and Unrealized Capital Gain
From Investments
Net realized capital gain (loss) from
sales of investments:
Proceeds from sales.................. 210,478 242,741 236,794
Cost of investments sold............. 205,213 239,405 245,906
---------- --------- ---------
Net realized capital gain (loss).......... 5,265 3,336 (9,112)
---------- --------- ---------
Net change in unrealized appreciation
(depreciation) of investments:
Beginning of the period.............. (17,153) (44,839) (67,841)
End of the period.................... 16,295 175,370 20,773
---------- --------- ---------
Net change in unrealized
appreciation (depreciation)
of investments................. 33,448 220,209 88,614
---------- --------- ---------
Net realized and unrealized
capital gain from investments.. 38,713 223,545 79,502
---------- --------- ---------
Increase from Operations.................. 49,845 214,905 72,845
========== ========= =========
</TABLE>
See accompanying Notes to Financial Statements.
6
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<TABLE>
--------------------------------------------------------------------------------------------------------
The PFL Wright Variable Annuity Account
Statements of Changes in Contract Owners' Equity
Six Months Ended June 30, 1995 and Year Ended December 31, 1994
or Commencement of Operations to December 31, 1994 (Unaudited)
Wright
Near Term
Bond
Total Subaccount
--------------------- ------------------
1995 1994 1995 1994(1)
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operations
Net investment income (loss)............................. $ 2,627 19,280 6,792 10,388
Net realized capital gain (loss)......................... (1,613) (44,146) (1,102) (12,468)
Net change in unrealized appreciation (depreciation)..... 359,921 (140,506) 17,650 (11,500)
--------- --------- -------- -------
Increase (decrease) from operation....................... 360,935 (165,372) 23,340 (13,580)
Contract Transactions
Net contract purchase payments........................... 196,847 3,722,425 39,377 775,759
Transfers between funds.................................. -- -- (105,387) (295,597)
Transfers (to) from General Account...................... (114,120) (13,566) -- (14,666)
Contract terminations, withdrawals, and other deductions. (385,159) (59,907) (80,046) --
--------- --------- -------- -------
Increase (decrease) from contract transactions........... (302,432) 3,648,952 (146,056) 465,496
--------- --------- -------- -------
Net increase (decrease) in contract owners' equity....... 58,503 3,483,580 (122,716) 451,916
Contract Owners' Equity
Beginning of the period.................................. 3,650,769 167,189 451,916 --
--------- --------- -------- -------
End of the period........................................ $ 3,709,272 3,650,769 329,200 451,916
========= ========= ======== =======
</TABLE>
(1) Period from January 6, 1994 (commencement of operations) to December 31,
1994
See accompanying Notes to Financial Statements.
7
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<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
The PFL Wright Variable Annuity Account
Statements of Changes in Contract Owners' Equity
Six Months Ended June 30, 1995 and Year Ended December 31, 1994
or Commencement of Operations to December 31, 1994 (Unaudited)
Wright Wright Wright
Total Selected International
Return Bond Blue Chip Blue Chip
Subaccount Subaccount Subaccount
------------------ -------------------- --------------------
1995 1994 1995 1994(1) 1995 1994(1)
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income (loss)............................. 11,132 14,282 (8,640) 859 (6,657) (6,249)
Net realized capital gain (loss)......................... 5,265 (23,120) 3,336 (4,908) (9,112) (3,650)
Net change in unrealized appreciation (depreciation)..... 33,448 (16,326) 220,209 (44,839) 88,614 (67,841)
-------- -------- --------- --------- --------- ---------
Increase (decrease) from operation....................... 49,845 (25,164) 214,905 (48,888) 72,845 (77,740)
-------- -------- --------- --------- --------- ---------
Contract Transactions
Net contract purchase payments........................... 150 609,386 105,188 1,297,693 52,132 1,039,587
Transfers between funds.................................. (181,661) (212,796) 275,861 225,164 11,187 283,229
Transfers (to) from General Account...................... -- -- (59,653) 627 (54,467) 473
Contract terminations, withdrawals, and other deductions. (21,771) (18,759) (171,050) (23,535) (112,292) (17,613)
-------- -------- --------- --------- --------- ---------
Increase (decrease) from contract transactions........... (203,282) 377,831 150,346 1,499,949 (103,440) 1,305,676
-------- -------- --------- --------- --------- ---------
Net increase (decrease) in contract owners' equity....... (153,437) 352,667 365,251 1,451,061 (30,595) 1,277,936
Contract Owners' Equity
Beginning of the period.................................. 519,856 167,189 1,451,061 -- 1,227,936 --
-------- -------- --------- --------- --------- ---------
End of the period........................................ 366,419 519,856 1,816,312 1,451,061 1,197,341 1,227,936
======== ======== ========= ========= ========= =========
</TABLE>
(1) Period from January 6, 1994 (commencement of operations) to December 31,
1994
See accompanying Notes to Financial Statements.
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The PFL Wright Variable Annuity Account
Notes to Financial Statements
June 30, 1995 (Unaudited)
1. Organization and Summary of Significant Accounting Policies
Organization - The PFL Wright Variable Annuity Account ("Variable Account") is a
segregated investment account of PFL Life Insurance Company ("PFL Life"), an
indirect, wholly-owned subsidiary of AEGON USA, Inc. ("AUSA"), a holding
company. AUSA is an indirect, wholly-owned subsidiary of AEGON nv, a holding
company organized under the laws of The Netherlands.
The Wright Total Return Bond subaccount as part of the Variable Account
commenced operations on December 6, 1993. The Wright Near Term Bond, Wright
Selected Blue Chip and Wright International Blue Chip subaccounts, as part of
the Variable Account, commenced operations on January 6, 1994.
The Variable Account is registered with the Securities and Exchange Commission
as a Unit Investment Trust pursuant to provisions of the Investment Company Act
of 1940.
Investments - Net purchase payments received by the Variable Account are
invested in the portfolios of the Wright Managed Blue Chip Series Trust as
selected by the contract owner. Investments are stated at the closing net asset
values per share on June 30, 1995.
Realized capital gains and losses from sale of shares in the mutual funds are
determined on the first-in, first-out basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date. Unrealized gains or losses
from investments in the mutual funds are credited or charged to contract owners'
equity.
Dividend Income - Dividends received from the mutual funds investments are
reinvested to purchase additional mutual fund shares.
2. Contract Owners' Equity
A summary of deferred annuity contracts terminable by owners at June 30, 1995
follows:
<TABLE>
<CAPTION>
Accumulation
Accumulation Unit Total
Subaccount Units Owned Value Contract Value
---------- ------------ ------------ --------------
<S> <C> <C> <C>
Wright Near Term Bond............ 323,080.783 $1.018941 $ 329,200
Wright Total Return Bond......... 363,993.321 1.006664 366,419
Wright Selected Blue Chip........ 1,715,443.800 1.058800 1,816,312
Wright International Blue Chip... 1,249,662.083 0.958132 1,197,341
----------
$3,709,272
==========
</TABLE>
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A summary of changes in contract owners' account units follows:
<TABLE>
<CAPTION>
Wright Wright Wright Wright
Near Term Total Selected International
Bond Return Bond Blue Chip Blue Chip
Subaccount Subaccount Subaccount Subaccount
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Units outstanding at 1/1/94... -- 168,578 -- --
Units purchased............... 796,040 646,394 1,355,142 1,087,357
Units redeemed and
transferred................. (321,803) (245,094) 211,939 273,003
-------- -------- --------- ---------
Units outstanding at 12/31/94. 474,237 569,878 1,567,081 1,360,360
-------- -------- --------- ---------
Units purchased............... 39,377 155 108,855 56,090
Units redeemed and
transferred................. (190,533) (206,040) 39,508 (166,788)
-------- -------- --------- ---------
Units outstanding at 6/30/95.. 323,081 363,993 1,715,444 1,249,662
======== ======== ========= =========
</TABLE>
3. Taxes
Operations of the Variable Account form a part of PFL Life, which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code of 1986,
as amended (the "Code"). The operations of the Variable Account are accounted
for separately from other operations of PFL Life for purposes of federal income
taxation. The Variable Account is not separately taxable as a regulated
investment company under Subchapter M of the Code and is not otherwise taxable
as an entity separate from PFL Life. Under existing federal income tax laws, the
income of the Variable Account, to the extent applied to increase reserves under
the variable annuity contracts, is not taxable to PFL Life.
4. Administrative, Mortality and Expense Risk Charge
Administrative charges include an annual charge of $30 per contract which will
commence on the first policy anniversary of each contract owner's account.
Charges for administrative fees to the variable annuity contracts are an expense
of the Variable Account.
PFL Life deducts a daily charge equal to an annual rate of 1.00% of the value of
the contract owner's individual account as a charge for assuming certain
mortality and expense risks.
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5. Net Assets
At June 30, 1995 contract owners' equity was comprised of:
<TABLE>
<CAPTION>
Wright Wright Wright Wright
Near Term Total Selected International
Bond Return Bond Blue Chip Blue Chip
Total Subaccount Subaccount Subaccount Subaccount
------------ ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit transactions, accumulated net
investment income and realized
capital gains .......................... $ 3,490,684 323,050 350,124 1,640,942 1,176,568
Adjustment for depreciation to market
value .................................. 218,588 6,150 16,295 175,370 20,773
----------- ----------- ------------ ---------- ----------
Total Contract Owners' Equity ............ $ 3,709,272 329,200 366,419 1,816,312 1,197,341
=========== =========== ============ ========== ==========
</TABLE>
6. Purchases and Sales of Investment Securities
The aggregate cost of purchases and proceeds from sales of investments were as
follows:
<TABLE>
<CAPTION>
Year Ended or
Six Months Ended Commencement of Operations
June 30, 1995 to December 31, 1994
-------------------------------------------------------------
1995 1994
--------------------------------------------------------
Purchases Sales Purchases Sales
---------- ------- ---------- ---------
<S> <C> <C> <C> <C>
Wright Managed Blue Chip Series Trust --
Wright Near Term Bond Porfolio ........... $ 62,419 201,409 987,147 511,535
Wright Total Return Bond Portfolio ....... 17,968 210,478 812,481 420,240
Wright Selected Blue Chip Portfolio ...... 382,798 242,741 1,588,476 85,864
Wright International Blue Chip
Portfolio .............................. 125,082 236,794 1,413,534 112,467
---------- -------- ---------- ----------
$ 588,267 891,422 4,801,638 1,130,106
========== ======== ========== ==========
</TABLE>
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PFL Wright Variable Annuity
The PFL Wright
Variable Annuity Account
Semi-Annual Report
June 30, 1995
[LOGO OF PFL LIFE APPEARS HERE]
