<PAGE>
[PIONEER LOGO]
Pioneer Variable Contracts Trust
Pioneer Equity-Income VCT Portfolio
SEMIANNUAL REPORT
June 30, 2000
<PAGE>
PIONEER VARIABLE CONTRACTS TRUST
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Table of Contents
<TABLE>
<S> <C>
Pioneer Equity-Income VCT Portfolio
Portfolio and Performance Update 2
Portfolio Management Discussion 3
Schedule of Investments
Pioneer Equity-Income VCT Portfolio 4
Financial Statements 6
Notes to Financial Statements 10
</TABLE>
<PAGE>
Pioneer Equity-Income VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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PORTFOLIO AND PERFORMANCE UPDATE 6/30/00
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Portfolio Diversification
(As a percentage of total investment portfolio)
[PIE CHART PLOT POINTS]
U.S. Common Stock 98%
U.S. Convertible Securities 2%
[END PLOT POINTS]
Sector Distribution
(As a percentage of equity holdings)
[PIE CHART PLOT POINTS]
Financial 18%
Communication Services 16%
Utilities 16%
Consumer Staples 12%
Healthcare 12%
Energy 7%
Technology 6%
Consumer Cyclicals 6%
Capital Goods 3%
Other 4%
[END PLOT POINTS]
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Five Largest Holdings
(As a percentage of equity holdings)
<TABLE>
<S> <C>
-----------------------------------------------------
1. SBC Communications, Inc. 5.27%
-----------------------------------------------------
2. Schering-Plough Corp. 4.81
-----------------------------------------------------
3. U.S. West Communications Group, Inc. 4.06
-----------------------------------------------------
4. BestFoods 3.72
-----------------------------------------------------
5. Exxon Mobil 3.42
-----------------------------------------------------
</TABLE>
Holdings will vary for other periods.
--------------------------------------------------------------------------------
Prices and Distributions - Class II Shares
<TABLE>
<CAPTION>
6/30/00 12/31/99
<S> <C> <C>
Net Asset Value per Share $ 18.80 $ 20.82
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(12/31/99 - 6/30/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$ 0.220 $ - $ 1.741
</TABLE>
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Performance of a $10,000 Investment - Class II Shares
The following chart shows the value of an investment made in Pioneer
Equity-Income VCT Portfolio at net asset value, compared to the growth of
Standard & Poor's (S&P) 500 Index.
[LINE CHART PLOT POINTS]
<TABLE>
<CAPTION>
Pioneer Equity-Income S&P 500
VCT Portfolio* Index
<S> <C> <C> <C>
9/14/99 9500 10000
9/99 9161 9632
9625 10430
9344 11064
9012 10500
3/00 8294 10289
8959 11315
9167 10967
9474 10726
6/00 9306 11014
</TABLE>
[END PLOT POINTS]
The S&P 500 Index is an unmanaged measure of 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange and
over-the-counter markets. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Portfolio returns, do not reflect any fees
or expenses. Portfolio returns are based on net asset value and do not reflect
any annuity-related costs. You cannot invest directly in the Index.
Class II Shares
Cumulative
Total Return
(As of June 30, 2000)
--------------------------------------------------------------------------------
Net Asset Value*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period
<S> <C>
Life-of-Portfolio -2.04%
(9/14/99)
</TABLE>
All total returns shown assume reinvestment of distributions at net asset
value.
* Reflects Portfolio performance only. Does not reflect any applicable
insurance fees or surrender charges.
2
Past performance does not guarantee future results. Return and share prices
fluctuate so that your investment, when redeemed, may be worth more or less than
its original cost.
<PAGE>
Pioneer Equity-Income VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/00
--------------------------------------------------------------------------------
In the following discussion John Carey, the portfolio manager of Pioneer
Equity-Income VCT Portfolio, reviews the market environment and the Portfolio's
performance for the 6-month period ended June 30, 2000. The Portfolio's Class II
Shares were first offered on September 14, 1999.
Q: Why have the last six months been rough for investors in dividend-paying
stocks? How did Pioneer Equity-Income VCT Portfolio perform in this
environment?
A: The focus of the stock market on high-growth, technology stocks reached a
fever pitch in the first couple months of 2000. Naturally this was a
difficult period for a distinctly "old economy" investment vehicle like that
of Pioneer Equity-Income VCT Portfolio. However, after the first week of
March, investors grew skittish over the sky-high price-to-earnings multiples
on leading technology stocks - especially in view of rising interest rates
and somewhat lower earnings expectations - and a sharp "correction" in that
sector ensued.
The investment results for the six months ended June 30, 2000 still reflect
the different performances during most of that period between the higher
dividend-paying stocks in the Portfolio and the leading growth stocks that
drive the Standard & Poor's 500 Index. The Portfolio returned -0.40% at net
asset value for the period. The Portfolio's return surpassed the -1.65%
average return for the 44 annuity portfolios in the Lipper, Inc. equity
income universe. (Lipper is an independent firm that tracks annuity portfolio
performance.)
Q: Is it difficult to maintain a consistent approach in today's market?
A: While we are troubled by near-term underperformance, we believe that the
longer-term record of the portfolio justifies our confidence in the
conservative strategy we have pursued. Of course it is tempting to chase fads
and bend with every beguiling wind that blows through the stock market. But
we do not think that frequently changing course would be prudent.
Q: What changes did you make in the portfolio during the period?
A: The six-month period ended June 30 was an active one for the portfolio. We
took advantage of market volatility to consolidate the portfolio into a
shorter list of securities. We realized gains in some cases, for instance in
our liquidations of Sprint, The Bank of New York and Minnesota Mining &
Manufacturing. In other cases we took losses, for example in our disposals of
Goodyear Tire & Rubber, Lockheed Martin and Harris. Our Indiana Energy became
Vectren, and we received shares of BP Amoco, which we subsequently sold, in
exchange for our shares of Atlantic Richfield in yet another corporate
merger. Reflecting our aim to focus the portfolio, we did not add any
positions during the period.
Q: What is your view of the current stock market environment?
A: We are a bit relieved that the "spell" of high tech has been broken and that
investor interest appears to have broadened to include stocks in other
sectors. Risks remain, however - as they always do. The main concern for us
is the rising level of interest rates and the possibility that rates will go
up more than the stock market has "factored in." Overall, higher rates can
have a dampening effect on economic growth and stock-market performance.
It is at times like this when experience is a friend. We take comfort from
our 72 years of experience at Pioneer in managing through all kinds of
different markets. We would counsel patience, and remind you to focus on the
long-term investment goals that led to your initial interest in the
Portfolio. We are much appreciative for your support.
3
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Pioneer Equity-Income VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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SCHEDULE OF INVESTMENTS 6/30/00 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CONVERTIBLE CORPORATE BOND - 0.1%
$ 200,000 Commscope, Inc., 4.0%, 12/15/06 (144A) $ 215,962
------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost $200,000) $ 215,962
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS - 1.9%
27,000 Cox Communications, Inc.,
7.0%, 8/16/02 $ 1,658,812
15,300 Union Pacific Capital, Inc., 6.25%, 4/1/28 632,395
27,000 Union Pacific Capital, Inc., 6.25%, 4/1/28
(144A) 1,115,991
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $3,262,350) $ 3,407,198
------------
COMMON STOCKS - 98.0%
Basic Materials - 2.6%
Chemicals - 1.1%
45,441 E.I. du Pont de Nemours & Co. $ 1,988,044
------------
Iron & Steel - 0.4%
15,450 Roanoke Electric Steel Corp. $ 193,125
50,000 Worthington Industries, Inc. 525,000
------------
$ 718,125
------------
Metals Mining - 1.1%
50,400 Phelps Dodge Corp. $ 1,874,250
------------
Total Basic Materials $ 4,580,419
------------
Capital Goods - 2.8%
Aerospace/Defense - 0.3%
8,500 General Dynamics Corp. $ 444,125
------------
Machinery (Diversified) - 0.1%
7,000 The Gorman-Rupp Co. $ 110,250
------------
Manufacturing (Specialized) - 0.9%
16,400 Diebold, Inc. $ 457,150
24,000 Johnson Controls, Inc. 1,231,500
------------
$ 1,688,650
------------
Trucks & Parts - 1.5%
68,500 PACCAR, Inc. $ 2,718,594
------------
Total Capital Goods $ 4,961,619
------------
Communication Services - 16.1%
Telephone - 16.1%
31,944 Alltel Corp. $ 1,978,531
31,100 Bell Atlantic Corp. 1,580,269
92,400 BellSouth Corp. 3,938,550
73,500 GTE Corp. 4,575,375
218,331 SBC Communications, Inc. 9,442,816
84,800 U.S. West Communications Group, Inc. 7,271,600
------------
Total Communication Services $ 28,787,141
------------
Consumer Cyclicals - 6.1%
Auto Parts & Equipment - 1.1%
121,971 Delphi Automotive Systems Corp. $ 1,776,203
14,115 Visteon Corp.* 171,139
------------
$ 1,947,342
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Automobiles - 2.8%
107,800 Ford Motor Corp. $ 4,635,400
7,000 General Motors Corp. 406,438
------------
$ 5,041,838
------------
Publishing - 1.0%
33,700 McGraw-Hill Co., Inc. $ 1,819,800
------------
Publishing (Newspapers) - 0.1%
5,000 Tribune Co. $ 175,000
------------
Retail (Department Stores) - 0.5%
32,825 May Department Stores Co. $ 787,799
------------
Services (Advertising/Marketing) - 0.6%
25,200 The Interpublic Group of Companies, Inc. $ 1,083,600
------------
Total Consumer Cyclicals $ 10,855,379
------------
Consumer Staples - 11.0%
Beverages (Non-Alcoholic) - 0.7%
26,800 PepsiCo, Inc. $ 1,190,925
------------
Entertainment - 1.2%
114,200 Cedar Fair, L.P. $ 2,198,350
------------
Foods - 7.6%
96,200 BestFoods $ 6,661,850
42,800 Campbell Soup Co. 1,246,550
64,000 General Mills, Inc. 2,448,000
58,000 H.J. Heinz Co. 2,537,500
10,000 The Quaker Oats Co. 751,250
------------
$ 13,645,150
------------
Household Products (Non-Durables) - 1.3%
38,000 Colgate-Palmolive Co. $ 2,275,250
------------
Personal Care - 0.2%
10,000 The Gillette Co. $ 349,375
------------
Total Consumer Staples $ 19,659,050
------------
Energy - 6.6%
Oil (Domestic Integrated) - 0.4%
32,919 Conoco Inc. (Class B) $ 808,573
------------
Oil (International Integrated) - 6.2%
59,000 Chevron Corp. $ 5,003,937
77,983 Exxon Mobil Corp. 6,121,666
------------
$ 11,125,603
------------
Total Energy $ 11,934,176
------------
Financial - 18.1%
Banks (Major Regional) - 4.7%
13,000 Comerica, Inc. $ 583,375
24,910 Fleet Boston Financial Corp. 846,940
84,400 Mellon Bank Corp. 3,075,325
84,500 National City Corp. 1,441,781
88,176 Old Kent Financial Corp. 2,358,704
------------
$ 8,306,125
------------
Banks (Regional) - 2.7%
180,600 First Security Corp. $ 2,449,388
58,700 First Tennessee National Corp. 972,219
</TABLE>
4 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Equity-Income VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
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SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) continued
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Banks (Regional) - (continued)
65,400 SouthTrust Corp. 1,479,674
---------
$ 4,901,281
------------
Insurance (Life/Health) - 1.0%
32,200 ReliaStar Financial Corp. $ 1,688,488
------------
Insurance (Property/Casualty) - 2.9%
39,000 Chubb Corp. $ 2,398,500
35,500 HSB Group Inc. 1,104,938
51,200 St. Paul Companies, Inc. 1,747,200
------------
$ 5,250,638
------------
Investment Management - 6.1%
40,500 A.G. Edwards, Inc. $ 1,579,500
81,200 Alliance Capital Management L.P. 3,851,925
8,000 Eaton Vance Corp. 370,000
42,300 Paine Webber Group Inc. 1,924,650
75,000 T. Rowe Price Associates, Inc. 3,187,500
------------
$ 10,913,575
------------
Savings & Loan Companies - 0.7%
43,900 Washington Mutual, Inc. $ 1,267,612
------------
Total Financial $ 32,327,719
------------
Healthcare - 12.0%
Healthcare (Diversified) - 4.7%
77,300 Abbott Laboratories $ 3,444,681
45,800 Bristol-Myers Squibb Co. 2,667,850
23,500 Johnson & Johnson 2,394,063
------------
$ 8,506,594
------------
Healthcare (Drugs/Major Pharmaceuticals) - 6.6%
41,900 Merck & Co., Inc. $ 3,210,588
170,400 Schering-Plough Corp. 8,605,200
------------
$ 11,815,788
------------
Healthcare (Medical Products/Supplies) - 0.7%
42,000 Becton, Dickinson & Co. $ 1,204,874
------------
Total Healthcare $ 21,527,256
------------
Technology - 6.2%
Communications Equipment - 1.0%
60,000 Motorola Inc. $ 1,743,750
------------
Computers (Hardware) - 3.1%
29,600 Hewlett-Packard Co. $ 3,696,300
17,000 IBM Corp. 1,862,563
------------
$ 5,558,863
------------
Electronics (Instrumentation) - 0.5%
11,289 Agilent Technologies Inc.* $ 832,596
------------
Photography/Imaging - 1.6%
49,100 Eastman Kodak Co. $ 2,921,450
------------
Total Technology $ 11,056,659
------------
Transportation - 0.8%
Railroads - 0.8%
25,700 Burlington Northern, Inc. $ 589,494
66,200 Norfolk Southern Corp. 984,725
------------
Total Transportation $ 1,574,219
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Utilities - 15.7%
Electric Companies - 10.1%
73,000 Allegheny Energy, Inc. $ 1,998,375
53,000 American Electric Power Co., Inc. 1,570,125
136,000 Constellation Energy Group 4,428,500
80,300 DPL, Inc. 1,761,581
40,000 DQE, Inc. 1,580,000
50,000 Duke Energy Corp. 2,818,750
12,500 FPL Group, Inc. 618,750
62,000 Kansas City Power & Light Co. 1,395,000
50,000 NSTAR 2,034,375
------------
$ 18,205,456
------------
Natural Gas - 4.9%
14,000 Buckeye Partners, L.P. $ 375,375
99,600 KeySpan Energy Corp. 3,062,700
18,475 Kinder Morgan Energy Partners L.P. 737,845
15,000 Lakehead Pipe Line Partners, L.P.
(Preferred Units) 600,938
49,200 Nicor, Inc. 1,605,150
94,600 Questar Corp. 1,832,875
33,200 Vectren Corp. 572,700
------------
$ 8,787,583
------------
Power Producers (Independent) - 0.2%
25,000 Consol Energy Inc. $ 378,125
------------
Water Utilities - 0.5%
32,000 American Water Works Co., Inc. $ 800,000
------------
Total Utilities $ 28,171,164
------------
TOTAL COMMON STOCKS
(Cost $154,196,887) $175,434,801
------------
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $157,659,237) $179,057,961
------------
</TABLE>
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified institutional
buyers in a transaction exempt from registration. At June 30, 2000, the
value of these securities amounted to $1,331,953 or 0.7% of total net
assets.
The accompanying notes are an integral part of these financial statements. 5
<PAGE>
Pioneer Equity-Income VCT Portfolio PIONEER VARIABLE CONTRACTS TRUST
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/00
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended 9/14/99
6/30/00 to
CLASS II: (unaudited) 12/31/99
<S> <C> <C>
Net asset value, beginning of period $ 20.82 $ 21.29
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.19 $ 0.08
Net realized and unrealized loss on investments (0.25) (0.43)
-------- --------
Net decrease from investment operations $ (0.06) $ (0.35)
Distributions to shareholders:
Net investment income (0.22) (0.12)
Net realized gain (1.74) -
-------- --------
Net decrease in net asset value $ (2.02) $ (0.47)
-------- --------
Net asset value, end of period $ 18.80 $ 20.82
-------- --------
Total return* (0.40)% (1.65%)
Ratio of net expenses to average net assets 0.99%**+ 0.96%**
Ratio of net investment income to average net assets 1.70%**+ 1.90%**
Portfolio turnover rate 5%** 23%
Net assets, end of period (in thousands) $ 2,372 $ 178
Ratios assuming reduction for fees paid indirectly:
Net expenses 0.99%** 0.96%**
Net investment income 1.70%** 1.90%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
6 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Equity-Income VCT Portfolio
--------------------------------------------------------------------------------
BALANCE SHEET 6/30/00 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $157,659,237) $ 179,057,961
Receivables -
Investment securities sold 590,451
Fund shares sold 60,820
Dividends and interest 332,930
Other 801
-------------
Total assets $ 180,042,963
-------------
LIABILITIES:
Payables -
Fund shares repurchased $ 368,885
Due to bank 803,055
Due to affiliates 105,591
Accrued expenses 35,523
-------------
Total liabilities $ 1,313,054
-------------
NET ASSETS:
Paid-in capital $ 152,768,950
Accumulated undistributed net investment income 642,879
Accumulated undistributed net realized gain on investments 3,919,356
Net unrealized gain on investments 21,398,724
-------------
Total net assets $ 178,729,909
-------------
NET ASSET VALUE PER SHARE:
Class I:
(Unlimited number of shares authorized)
Net assets $ 176,358,009
Shares outstanding 9,426,166
Net asset value per share $ 18.71
-------------
Class II:
(Unlimited number of shares authorized)
Net assets $ 2,371,900
Shares outstanding 126,198
Net asset value per share $ 18.80
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 7
<PAGE>
Pioneer Equity-Income VCT Portfolio
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STATEMENT OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
6/30/00
<S> <C>
INVESTMENT INCOME:
Dividends $ 2,996,086
Interest 95,358
------------
Total investment income $ 3,091,444
------------
EXPENSES:
Management fees $ 633,686
Transfer agent fees 182
Distribution fees (Class II) 756
Administrative fees 21,924
Custodian fees 22,393
Professional fees 10,010
Printing 9,828
Fees and expenses of nonaffiliated trustees 182
Miscellaneous 4,538
------------
Total expenses $ 703,499
Less fees paid indirectly (1,233)
------------
Net expenses $ 702,266
------------
Net investment income $ 2,389,178
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain from investments $ 3,985,100
Change in net unrealized gain from investments (8,459,387)
------------
Net loss on investments $ (4,474,287)
------------
Net decrease in net assets resulting from operations $ (2,085,109)
------------
</TABLE>
8 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Equity-Income VCT Portfolio
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/00 Ended
(unaudited) 12/31/99
FROM OPERATION
<S> <C> <C>
Net investment income $ 2,389,178 $ 4,495,087
Net realized gain on investments 3,985,100 15,265,131
Change in net unrealized gain on investments (8,459,387) (17,458,854)
------------- -------------
Net increase (decrease) in net assets resulting
from operations $ (2,085,109) $ 2,301,364
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class I $ (2,222,183) $ (4,351,482)
Class II (13,307) (1,074)
Net realized gain
Class I (15,066,697) (6,090,521)
Class II (187,542) -
------------- -------------
Total distributions to shareholders $ (17,489,729) $ (10,443,077)
------------- -------------
FROM FUND SHARE TRANSACTION
Net proceeds from sale of shares $ 4,254,118 $ 34,058,957
Reinvestment of distributions 17,489,729 10,443,077
Cost of shares repurchased (49,996,091) (13,779,546)
------------- -------------
Net increase (decrease) in net assets resulting from
fund share transactions $ (28,252,244) $ 30,722,488
------------- -------------
Net increase (decrease) in net assets $ (47,827,082) $ 22,580,575
------------- -------------
NET ASSETS:
Beginning of period 226,556,991 203,976,216
------------- -------------
End of period $ 178,729,909 $ 226,556,991
------------- -------------
Accumulated undistributed net investment income,
end of period $ 642,879 $ 489,191
------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Equity-Income VCT Portfolio
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/00 (UNAUDITED)
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Variable Contracts Trust (the Trust) is a Delaware business trust
registered under the Investment Company Act of 1940 as an open-end management
investment company. The Trust consists of fifteen separate portfolios
(collectively, the Portfolios) as follows:
Pioneer Emerging Markets VCT Portfolio (Emerging Markets Portfolio), Pioneer
Europe VCT Portfolio (Europe Portfolio), Pioneer International Growth VCT
Portfolio (International Growth Portfolio), Pioneer Science & Technology VCT
Portfolio (Science & Technology Portfolio), Pioneer Mid-Cap Value VCT Portfolio
(Mid-Cap Value Portfolio) (formerly Capital Growth Portfolio), Pioneer Growth
Shares VCT Portfolio (Growth Shares Portfolio), Pioneer Real Estate Growth VCT
Portfolio (Real Estate Growth Portfolio), Pioneer Fund VCT Portfolio (Fund
Portfolio) (formerly Growth and Income Portfolio), Pioneer Equity-Income VCT
Portfolio (Equity-Income Portfolio), Pioneer Balanced VCT Portfolio (Balanced
Portfolio), Pioneer High Yield VCT Portfolio (High Yield Portfolio), Pioneer
Strategic Income VCT Portfolio (Strategic Income Portfolio), Pioneer Swiss
Franc Bond VCT Portfolio (Swiss Franc Bond Portfolio), Pioneer America Income
VCT Portfolio (America Income Portfolio), Pioneer Money Market VCT Portfolio
(Money Market Portfolio)
Portfolio shares may only be purchased by insurance companies for the purpose
of funding variable annuity or variable life insurance contracts.
The financial statements included herein are for the Equity-Income Portfolio
(the Portfolio). The investment objective of the Portfolio is to seek current
income as well as long term capital growth.
The Trust's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting periods. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Trust, which are in conformity
with those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value
for the Portfolio is computed once daily, on each day the New York Stock
Exchange is open, as of the close of regular trading on the Exchange. In
computing the net asset value, securities are valued at the last sale price
on the principal exchange where they are traded. Securities that have not
traded on the date of valuation, or securities for which sale prices are
not generally reported, are valued at the mean between the last bid and
asked prices. Securities for which market quotations are not readily
available are valued at their fair values as determined by, or under the
direction of, the Board of Trustees. Dividend income is recorded on the ex-
dividend date and interest income, including interest from income bearing
cash accounts, is recorded on the accrual basis. Temporary cash investments
are valued at amortized cost.
Gains and losses from sales on investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
It is the Trust's practice to first select for sale those securities that
have the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Portfolio's distributions may be shown
in the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
C. Portfolio Shares
The Portfolio records sales and repurchases of its shares as of trade date.
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
D. Repurchase Agreements
With respect to repurchase agreements entered into by the Portfolio, the
value of the underlying securities (collateral), including accrued interest
received from counterparties, is required to be at least equal to or in
excess of the value of the repurchase agreement at the time of purchase.
The collateral for all repurchase agreements is held in safekeeping in the
customer-only account of the Trust's custodian, or subcustodians. The
Trust's investment adviser, Pioneer Investment Management, Inc. (PIM), is
responsible for determining that the value of the collateral remains at
least equal to the repurchase price.
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Pioneer Equity-Income VCT Portfolio
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NOTES TO FINANCIAL STATEMENTS 6/30/00 (unaudited) (continued)
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2. Management Agreement
PIM manages the Portfolio, and is a wholly owned subsidiary of The Pioneer
Group, Inc. (PGI). Management fees are calculated daily at the annual rate of
0.65% of the Portfolio's average daily net assets.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Portfolio. At June 30, 2000, $105,202 was payable to
PIM related to management fees, administrative fees, and certain other
services.
3. Transfer Agent
Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI,
provides substantially all transfer agent and shareholder services to the Trust
at negotiated rates.
4. Distribution Plan
The Portfolio has adopted a plan of distribution for Class II shares in
accordance with Rule 12b-1 under the Investment Company Act of 1940. Under the
plan, the Portfolio pays Pioneer Funds Distributor, Inc. (PFD), the principal
underwriter for the Trust, and an indirect subsidiary of PGI, a distribution
fee of 0.25% of the average daily net assets attributable to Class II shares.
Included in due to affiliates is $389 in distribution fees payable to PFD at
June 30, 2000.
5. Expense Offsets
The Trust has entered into certain expense offset arrangements resulting in a
reduction in the Portfolio's total expenses. For the six months ended June 30,
2000, the Portfolio's expenses were reduced by $1,233 under such arrangements.
6. Aggregate Unrealized Appreciation and Depreciation
At June 30, 2000, the Portfolio's aggregate unrealized appreciation and
depreciation based on cost of $157,659,237 for federal income tax purposes were
$34,945,533 and $13,546,809, respectively, resulting in net appreciation of
$21,398,724.
7. Portfolio Transactions
The cost of purchases and the proceeds from sales of investments other than
U.S. Government obligations and temporary cash investments for the six months
ended June 30, 2000, were $4,383,772 and $43,577,186, respectively.
8. Capital Shares
At June 30, 2000, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
'00 Shares '00 Amount
Class I: (unaudited) (unaudited) '99 Shares '99 Amount
<S> <C> <C> <C> <C>
Shares sold 97,648 $ 1,881,864 1,570,521 $ 33,847,223
Reinvestment of distributions 907,383 17,288,880 490,175 10,442,003
Shares repurchased (2,506,535) (49,848,780) (645,785) (13,747,268)
---------- ------------- --------- -------------
Net increase (decrease) (1,501,504) $ (30,678,036) 1,414,911 $ 30,541,958
---------- ------------- --------- -------------
Class II:
Shares sold 114,486 $ 2,372,254 10,044 $ 211,734
Reinvestment of distributions 10,499 200,849 52 1,074
Shares repurchased (7,334) (147,311) (1,549) (32,278)
---------- ------------- --------- -------------
Net increase 117,651 $ 2,425,792 8,547 $ 180,530
---------- ------------- --------- -------------
---------------------------------------------------------------------------------------------------------
</TABLE>
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[PIONEER LOGO]
Pioneer Variable Contracts Trust
Officers
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
Eric W. Reckard, Treasurer
Joseph P. Barri, Secretary
Trustees
John F. Cogan, Jr.
Richard H. Egdahl, M.D.
Marguerite A. Piret
David D. Tripple
Stephen K. West
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Hale and Dorr LLP
This report must be preceded or accompanied by a prospectus, which includes
more information about charges and expenses. Please read the prospectus
carefully before you invest or send money.
8873-00-0800
