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PFL WRIGHT VARIABLE ANNUITY
The PFL Wright Variable Annuity Account Semi-Annual Report June 30, 1996
[LOGO OF PFL LIFE APPEARS HERE]
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Dear Valued Policyholders:
Moderate economic growth and low inflation coupled with continued strong
inflows of cash into mutual funds propelled the U.S. stock market to new
heights during the first half of 1996. Solid investment gains were also posted
by international equities despite a generally rising foreign exchange value of
the U.S. dollar. On the other hand, market values of fixed income securities
declined reflecting fears of higher inflation and expectations that the Federal
Reserve Board would tighten monetary policy.
July appears to be heralding a correction in stock prices. With bond yields
near their forecast peak and corporate earnings growth prospects quite
favorable, this period of security price revaluation could be short lived. Once
again, we remain particularly excited about the prospects for high-quality
issues such as those in the PFL Wright Variable Annuity Portfolios.
The Semi-Annual Report of the PFL Wright Variable Annuity Account for the six
months ended June 30, 1996 is presented herein. Contained in this report is
information on the following Subaccounts:
Wright Near Term Bond Subaccount
Wright Total Return Bond Subaccount
Wright Selected Blue Chip Subaccount
Wright International Blue Chip Subaccount
The confidence that you continue to express in the PFL Wright Variable Annuity
is greatly appreciated.
Prosperity and health in the remainder of 1996 and beyond.
Sincerely,
[SIGNATURE OF WILLIAM L. BUSLER APPEARS HERE]
William L. Busler
President
PFL Life Insurance Company
3
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THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
BALANCE SHEET
June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
WRIGHT
NEAR TERM
BOND
TOTAL SUBACCOUNT
---------- ----------
<S> <C> <C>
ASSETS
Cash.................................................... $ 13 13
Investments in mutual funds, at current market value
(Note 2):
Wright Managed Blue Chip Series Trust
Wright Near Term Bond Portfolio....................... 380,729 380,729
Wright Total Return Bond Portfolio.................... 675,668 --
Wright Selected Blue Chip Portfolio................... 2,603,794 --
Wright International Blue Chip Portfolio.............. 1,255,789 --
---------- -------
Total investments in mutual funds...................... 4,915,980 380,729
---------- -------
Total Assets............................................ $4,915,993 380,742
========== =======
LIABILITIES AND CONTRACT OWNERS' EQUITY
Liabilities:
Contract terminations payable ......................... $ 2,833 --
---------- -------
Total Liabilities ..................................... 2,833 --
Contract Owners' Equity:
Deferred annuity contracts terminable by owners (Notes
3 and 6).............................................. 4,913,160 380,742
---------- -------
$4,915,993 380,742
========== =======
</TABLE>
See accompanying Notes to Financial Statements.
4
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<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT
TOTAL SELECTED INTERNATIONAL
RETURN BOND BLUE CHIP BLUE CHIP
SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- -------------
<S> <C> <C>
-- -- --
-- -- --
675,668 -- --
-- 2,603,794 --
-- -- 1,255,789
------- --------- ---------
675,668 2,603,794 1,255,789
------- --------- ---------
675,668 2,603,794 1,255,789
======= ========= =========
390 2,347 96
------- --------- ---------
390 2,347 96
675,278 2,601,447 1,255,693
------- --------- ---------
675,668 2,603,794 1,255,789
======= ========= =========
</TABLE>
5
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THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
WRIGHT
NEAR TERM
BOND
TOTAL SUBACCOUNT
-------- ----------
<S> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends................................................. $ 23,948 8,172
Expenses (Note 5):
Administration fee........................................ 840 52
Mortality and expense risk charge......................... 22,832 1,806
-------- ------
Net Investment income (loss)............................ 276 6,314
-------- ------
NET REALIZED AND UNREALIZED CAPITAL GAIN (LOSS) FROM
INVESTMENTS
Net realized capital gain from sales of investments:
Proceeds from sales....................................... 750,078 55,820
Cost of investments sold.................................. 659,439 55,070
-------- ------
Net realized capital gain from sales of investments........ 90,639 750
Net change in unrealized appreciation/depreciation of
investments:
Beginning of the period................................... 343,168 7,443
End of the period......................................... 592,564 (454)
-------- ------
Net change in unrealized appreciation/depreciation of
investments............................................ 249,396 (7,897)
-------- ------
Net realized and unrealized capital gain (loss) from
investments............................................ 340,035 (7,147)
-------- ------
INCREASE (DECREASE) FROM OPERATIONS........................ $340,311 (833)
======== ======
</TABLE>
See accompanying Notes to Financial Statements.
6
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<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT
TOTAL SELECTED INTERNATIONAL
RETURN BOND BLUE CHIP BLUE CHIP
SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------- ---------- -------------
<S> <C> <C>
13,706 2,070 --
115 445 228
3,161 11,706 6,159
------- ------- -------
10,430 (10,081) (6,387)
------- ------- -------
72,383 256,017 365,858
70,220 200,950 333,199
------- ------- -------
2,163 55,067 32,659
27,893 260,715 47,117
(1,835) 477,137 117,716
------- ------- -------
(29,728) 216,422 70,599
------- ------- -------
(27,565) 271,489 103,258
------- ------- -------
(17,135) 261,408 96,871
======= ======= =======
</TABLE>
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THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
Six Months Ended June 30, 1996 and Year Ended December 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
WRIGHT
NEAR TERM
BOND
TOTAL SUBACCOUNT
--------------------- -----------------
1996 1995 1996 1995
---------- --------- ------- --------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss)........ $ 276 75,566 6,314 12,335
Net realized capital gain........... 90,639 36,780 750 1,244
Net change in unrealized
appreciation/depreciation of
investments........................ 249,396 484,501 (7,897) 18,943
---------- --------- ------- --------
Increase (decrease) from
operations......................... 340,311 596,847 (833) 32,522
---------- --------- ------- --------
CONTRACT TRANSACTIONS
Net contract purchase payments...... 191,568 1,071,758 8,332 77,059
Transfer payments from (to) other
subaccounts or general account..... 42,720 (114,120) 46,596 (135,719)
Contract terminations, withdrawals,
and other deductions............... (130,080) (736,613) -- (99,131)
---------- --------- ------- --------
Increase (decrease) from contract
transactions....................... 104,208 221,025 54,928 (157,791)
---------- --------- ------- --------
Net increase (decrease) in contract
owners' equity..................... 444,519 817,872 54,095 (125,269)
CONTRACT OWNERS' EQUITY
Beginning of the period............. 4,468,641 3,650,769 326,647 451,916
---------- --------- ------- --------
End of the period................... $4,913,160 4,468,641 380,742 326,647
========== ========= ======= ========
</TABLE>
See accompanying Notes to Financial Statements.
8
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<TABLE>
<CAPTION>
WRIGHT WRIGHT WRIGHT
TOTAL SELECTED INTERNATIONAL
RETURN BOND BLUE CHIP BLUE CHIP
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------- -------------------------- --------------------------
1996 1995 1996 1995 1996 1995
------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
10,430 17,626 (10,081) 51,446 (6,387) (5,841)
2,163 6,744 55,067 23,057 32,659 5,735
(29,728) 45,046 216,422 305,554 70,599 114,958
------- -------- --------- --------- --------- ---------
(17,135) 69,416 261,408 380,057 96,871 114,852
------- -------- --------- --------- --------- ---------
13,298 166,975 117,876 513,090 52,062 314,634
155,620 (173,228) 64,523 237,738 (224,019) (42,911)
(13,981) (45,543) (81,629) (342,677) (34,470) (249,262)
------- -------- --------- --------- --------- ---------
154,937 (51,796) 100,770 408,151 (206,427) 22,461
------- -------- --------- --------- --------- ---------
137,802 17,620 362,178 788,208 (109,556) 137,313
537,476 519,856 2,239,269 1,451,061 1,365,249 1,227,936
------- -------- --------- --------- --------- ---------
675,278 537,476 2,601,447 2,239,269 1,255,693 1,365,249
======= ======== ========= ========= ========= =========
</TABLE>
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THE PFL WRIGHT VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (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 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, 1996.
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. INVESTMENTS
A summary of the mutual fund investments at June 30, 1996 follows:
<TABLE>
<CAPTION>
NET ASSET
NUMBER OF VALUE MARKET
SHARES HELD PER SHARE VALUE COST
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Wright Managed Blue Chip Series
Trust
Near Term Bond Portfolio......... 39,331.537 9.68 $ 380,729 $ 381,183
Total Return Bond Portfolio...... 72,341.354 9.34 675,668 677,503
Select Blue Chip Portfolio....... 204,219.159 12.75 2,603,794 2,126,657
International Blue Chip
Portfolio....................... 114,999.022 10.92 1,255,789 1,138,073
---------- ----------
$4,915,980 $4,323,416
========== ==========
</TABLE>
3. CONTRACT OWNERS EQUITY
A summary of deferred annuity contracts terminable by owners at June 30, 1996
follows:
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION TOTAL
SUBACCOUNT UNITS OWNED UNIT VALUE CONTRACT VALUE
- ---------- ------------- ------------ --------------
<S> <C> <C> <C>
Wright Near Term Bond................ 364,918.287 1.043362 $ 380,742
Wright Total Return Bond............. 661,436.571 1.020927 675,278
Wright Select Blue Chip.............. 2,019,529.590 1.288145 2,601,447
Wright International Blue Chip....... 1,175,907.829 1.067850 1,255,693
----------
$4,913,160
==========
</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 1/1/95.. 474,237 569,878 1,567,081 1,360,360
Units purchased.............. 75,750 160,589 465,414 324,834
Units redeemed and trans-
ferred...................... (237,782) (221,310) (97,975) (304,261)
-------- -------- --------- ---------
Units outstanding at
12/31/95.................... 312,205 509,157 1,934,520 1,380,933
Units purchased.............. 7,933 12,581 95,691 50,289
Units redeemed and trans-
ferred...................... 44,780 139,699 (10,681) (255,314)
-------- -------- --------- ---------
Units outstanding at
6/30/96..................... 364,918 661,437 2,019,530 1,175,908
======== ======== ========= =========
</TABLE>
4. 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.
5. 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.
6. NET ASSETS
At June 30, 1996 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, accumu-
lated net investment in-
come and realized capital
gains.................... $4,320,596 381,196 677,113 2,124,310 1,137,977
Adjustment for
appreciation/depreciation
to market value.......... 592,564 (454) (1,835) 477,137 117,716
---------- ------- ------- --------- ---------
Total Contract Owners' Eq-
uity..................... $4,913,160 380,742 675,278 2,601,447 1,255,693
========== ======= ======= ========= =========
</TABLE>
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7. PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
----------------- -------------------
1996 1995
----------------- -------------------
PURCHASES SALES PURCHASES SALES
--------- ------- --------- ---------
<S> <C> <C> <C> <C>
Wright Managed Blue Chip Series Trust
Wright Near Term Bond Portfolio........ $117,059 55,820 157,665 302,860
Wright Total Return Bond Portfolio..... 238,150 72,383 206,065 240,590
Wright Select Blue Chip Portfolio...... 348,817 256,017 882,068 424,039
Wright International Blue Chip Portfo-
lio................................... 153,097 365,858 462,087 447,064
-------- ------- --------- ---------
$857,123 750,078 1,707,885 1,414,553
======== ======= ========= =========
</TABLE>
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