SEMI-ANNUAL REPORTS
P H O E N I X
THE BIG EDGE CHOICE[SM]
PHL VARIABLE
ACCUMULATION ACCOUNT
PHOENIX EDGE SERIES FUND
WANGER ADVISORS TRUST
June 30, 1996
[PHOENIX LOGO]
PHL Variable Insurance Company
<PAGE>
TABLE OF CONTENTS
PHL VARIABLE ACCUMULATION ACCOUNT
Money Market Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 7
Growth Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 7
Multi-Sector Fixed Income Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 7
Total Return Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 7
International Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 7
Balanced Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 7
Real Estate Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Financial Highlights 7
Strategic Theme Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Financial Highlights 7
Wanger International Small Cap Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Financial Highlights 7
Wanger U.S. Small Cap Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 5
Financial Highlights 7
Notes to Financial Statements 8
THE PHOENIX EDGE SERIES FUND
Money Market Series
Schedule of Investments 2-2
Statement of Assets and Liabilities 2-4
Statement of Operations 2-4
Statement of Changes in Net Assets 2-5
Financial Highlights 2-5
Growth Series
Schedule of Investments 2-6
Statement of Assets and Liabilities 2-9
Statement of Operations 2-9
Statement of Changes in Net Assets 2-10
Financial Highlights 2-10
Multi-Sector Fixed Income Series
Schedule of Investments 2-11
Statement of Assets and Liabilities 2-14
Statement of Operations 2-14
Statement of Changes in Net Assets 2-15
Financial Highlights 2-15
Total Return Series
Schedule of Investments 2-17
Statement of Assets and Liabilities 2-20
Statement of Operations 2-20
Statement of Changes in Net Assets 2-21
Financial Highlights 2-21
International Series
Schedule of Investments 2-22
Statement of Assets and Liabilities 2-25
Statement of Operations 2-25
Statement of Changes in Net Assets 2-26
Financial Highlights 2-26
Balanced Series
Schedule of Investments 2-28
Statement of Assets and Liabilities 2-31
Statement of Operations 2-31
Statement of Changes in Net Assets 2-32
Financial Highlights 2-32
Real Estate Series
Schedule of Investments 2-33
Statement of Assets and Liabilities 2-35
Statement of Operations 2-35
Statement of Changes in Net Assets 2-36
Financial Highlights 2-36
Strategic Theme Series
Schedule of Investments 2-38
Statement of Assets and Liabilities 2-40
Statement of Operations 2-40
Statement of Changes in Net Assets 2-41
Financial Highlights 2-41
Notes to Financial Statements 2-42
WANGER ADVISORS TRUST
Wanger International Small Cap
Advisor
Schedule of Investments 3-3
Statement of Assets and Liabilities 3-7
Statement of Operations 3-8
Statement of Changes in Net Assets 3-8
Financial Highlights 3-9
Notes to Financial Statements 3-10
Wanger U.S. Small Cap Advisor
Schedule of Investments 4-3
Statement of Assets and Liabilities 4-6
Statement of Operations 4-7
Statement of Changes in Net Assets 4-8
Financial Highlights 4-9
Notes to Financial Statements 4-10
<PAGE>
This semi-annual report for the PHL
Variable Accumulation Account
for the period ended June 30, 1996 contains
the financial statements for the Account's
various annuity contracts. This report also
contains a list of portfolio holdings,
management's discussion of performance and
investment strategy and financial statements
for each of the mutual funds that comprise the
Phoenix Edge Series Fund, and the
Wanger Advisors Trust.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Money Multi-Sector
Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
Assets
Investments at cost $13,007,890 $25,667,938 $5,251,001
========= ======== ===========
Investment in The Phoenix Edge Series Fund, at market $13,007,890 $26,076,096 $5,192,305
--------- -------- -----------
Total assets 13,007,890 26,076,096 5,192,305
Liabilities
Accrued expenses to related party 13,220 25,333 4,995
--------- -------- -----------
Net assets $12,994,670 $26,050,763 $5,187,310
========= ======== ===========
Accumulation units outstanding 12,580,240 22,804,137 4,830,038
========= ======== ===========
Unit value $ 1.032943 $ 1.142370 $ 1.073969
========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Total
Return International Balanced
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
Assets
Investments at cost $9,974,000 $1,454,232 $3,544,544
========= ======== ===========
Investment in The Phoenix Edge Series Fund, at market $9,997,853 $1,527,617 $3,457,005
--------- -------- -----------
Total assets 9,997,853 1,527,617 3,457,005
Liabilities
Accrued expenses to related party 9,638 1,374 3,285
--------- -------- -----------
Net assets $9,988,215 $1,526,243 $3,453,720
========= ======== ===========
Accumulation units outstanding 9,246,512 1,343,985 3,219,391
========= ======== ===========
Unit value $ 1.080214 $ 1.135610 $ 1.072787
========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Strategic
Real Estate Theme
Sub-Account Sub-Account
----------- ----------
<S> <C> <C>
Assets
Investments at cost $ 693,482 $1,394,445
========= ========
Investment in The Phoenix Edge Series Fund, at market $ 712,863 $1,424,232
--------- --------
Total assets 712,863 1,424,232
Liabilities
Accrued expenses to related party 648 1,317
--------- --------
Net assets $ 712,215 $1,422,915
========= ========
Accumulation units outstanding 642,204 1,323,607
========= ========
Unit value $1.109017 $ 1.075028
========= ========
</TABLE>
<TABLE>
<CAPTION>
Wanger Wanger
International U.S.
Small Cap Small Cap
Sub-Account Sub-Account
----------- ----------
<S> <C> <C>
Assets
Investments at cost $5,981,138 $7,598,578
========= ========
Investment in Wanger Advisors Trust, at market $6,589,457 $8,539,027
--------- --------
Total assets 6,589,457 8,539,027
Liabilities
Accrued expenses to related party 6,095 8,094
--------- --------
Net assets $6,583,362 $8,530,933
========= ========
Accumulation units outstanding 4,766,774 6,818,333
========= ========
Unit value $ 1.381094 $ 1.251176
========= ========
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF OPERATIONS
For the period ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Money Multi-Sector
Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
Investment income
Distributions $224,839 $ 79,122 $ 149,571
Expenses
Mortality and expense risk charges 62,942 94,169 18,604
--------- -------- -----------
Net investment income (loss) 161,897 (15,047) 130,967
--------- -------- -----------
Net realized gain (loss) from share transactions -- 1,176 (150)
Net realized gain distribution from Fund -- 169,039 --
Net unrealized appreciation (depreciation) on
investment -- 656,733 (58,132)
--------- -------- -----------
Net gain (loss) on investments -- 826,948 (58,282)
--------- -------- -----------
Net increase in net assets resulting from operations $161,897 $ 811,901 $ 72,685
========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Total
Return International Balanced
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
Investment income
Distributions $ 91,935 $ -- $ 34,689
Expenses
Mortality and expense risk charges 42,154 3,755 12,337
--------- -------- -----------
Net investment income (loss) 49,781 (3,755) 22,352
--------- -------- -----------
Net realized gain from share transactions 9 65 2,456
Net realized gain distribution from Fund 51,051 1,855 115,898
Net unrealized appreciation (depreciation) on
investment 149,105 71,951 (86,090)
--------- -------- -----------
Net gain on investments 200,165 73,871 32,264
--------- -------- -----------
Net increase in net assets resulting from operations $249,946 $ 70,116 $ 54,616
========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Strategic
Real Estate Theme
Sub-Account Sub-Account(1)
----------- ----------
<S> <C> <C>
Investment income
Distributions $13,592 $ --
Expenses
Mortality and expense risk charges 2,846 2,856
--------- --------
Net investment income (loss) 10,746 (2,856)
--------- --------
Net realized gain (loss) on securities (12) 50
Net unrealized appreciation (depreciation) on
investment 18,641 29,787
--------- --------
Net gain on investments 18,629 29,837
--------- --------
Net increase in net assets resulting from operations $29,375 $ 26,981
========= ========
</TABLE>
<TABLE>
<CAPTION>
Wanger Wanger
International U.S.
Small Cap Small Cap
Sub-Account Sub-Account
----------- ----------
<S> <C> <C>
Investment income
Distributions $ 4,923 $ 5,736
Expenses
Mortality and expense risk charges 19,715 26,713
--------- --------
Net investment loss (14,792) (20,977)
--------- --------
Net realized gain on securities -- 1,864
Net unrealized appreciation on investment 600,546 959,864
--------- --------
Net gain on investments 600,546 961,728
--------- --------
Net increase in net assets resulting from operations $ 585,754 $ 940,751
========= ========
</TABLE>
(1)From inception January 29, 1996 to June 30, 1996
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Money Multi-Sector
Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 161,897 $ (15,047) $ 130,967
Net realized gain (loss) -- 170,215 (150)
Net unrealized appreciation (depreciation) -- 656,733 (58,132)
--------- -------- -----------
Net increase in net assets resulting from operations 161,897 811,901 72,685
--------- -------- -----------
From accumulation unit transactions
Participant deposits 41,342,240 8,440,623 1,379,094
Participant transfers (33,831,677) 13,547,876 3,414,660
Participant withdrawals (658,928) (38,212) (14,827)
--------- -------- -----------
Net increase in net assets resulting from participant
transactions 6,851,635 21,950,287 4,778,927
--------- -------- -----------
Net increase in net assets 7,013,532 22,762,188 4,851,612
Net assets
Beginning of period 5,981,138 3,288,575 335,698
--------- -------- -----------
End of period $ 12,994,670 $26,050,763 $5,187,310
========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Total
Return International Balanced
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 49,781 $ (3,755) $ 22,352
Net realized gain 51,060 1,920 118,354
Net unrealized appreciation (depreciation) 149,105 71,951 (86,090)
--------- -------- -----------
Net increase in net assets resulting from operations 249,946 70,116 54,616
--------- -------- -----------
From accumulation unit transactions
Participant deposits 1,885,315 518,227 856,095
Participant transfers 4,822,739 805,138 1,818,954
Participant withdrawals (11,249) (1,502) (28,931)
--------- -------- -----------
Net increase in net assets resulting from participant
transactions 6,696,805 1,321,863 2,646,118
--------- -------- -----------
Net increase in net assets 6,946,751 1,391,979 2,700,734
Net assets
Beginning of period 3,041,464 134,264 752,986
--------- -------- -----------
End of period $9,988,215 $1,526,243 $3,453,720
========= ======== ===========
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended June 30, 1996
(Unaudited) (Continued)
<TABLE>
<CAPTION>
Strategic
Real Estate Theme
Sub-Account Sub-Account(1)
----------- --------------
<S> <C> <C>
From operations
Net investment income (loss) $ 10,746 $ (2,856)
Net realized gain (loss) (12) 50
Net unrealized appreciation 18,641 29,787
--------- ------------
Net increase in net assets resulting from operations 29,375 26,981
--------- ------------
From accumulation unit transactions
Participant deposits 221,483 253,476
Participant transfers 224,805 1,143,809
Participant withdrawals (1,103) (1,351)
--------- ------------
Net increase in net assets resulting from participant
transactions 445,185 1,395,934
--------- ------------
Net increase in net assets 474,560 1,422,915
Net assets
Beginning of period 237,655 0
--------- ------------
End of period $712,215 $1,422,915
========= ============
</TABLE>
<TABLE>
<CAPTION>
Wanger Wanger
International U.S.
Small Cap Small Cap
Sub-Account Sub-Account
----------- --------------
<S> <C> <C>
From operations
Net investment income (loss) $ (14,792) $ (20,977)
Net realized gain -- 1,864
Net unrealized appreciation 600,546 959,864
--------- ------------
Net increase in net assets resulting from operations 585,754 940,751
--------- ------------
From accumulation unit transactions
Participant deposits 1,935,800 2,116,024
Participant transfers 3,783,685 4,224,797
Participant withdrawals (1,930) --
--------- ------------
Net increase in net assets resulting from participant
transactions 5,717,555 6,340,821
--------- ------------
Net increase in net assets 6,303,309 7,281,572
Net assets
Beginning of period 280,053 1,249,361
--------- ------------
End of period $6,583,362 $8,530,933
========= ============
</TABLE>
(1)From inception January 29, 1996 to June 30, 1996
See Notes to Financial Statements
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
From inception July 31, 1995 through December 31, 1995
<TABLE>
<CAPTION>
Money Multi-Sector
Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 15,818 $ (813) $ 6,644
Net realized gain -- 346,083 9
Net unrealized depreciation -- (248,575) (564)
--------- -------- -----------
Net increase in net assets resulting from operations 15,818 96,695 6,089
--------- -------- -----------
From accumulation unit transactions
Participant deposits 7,285,767 2,481,750 226,998
Participant transfers (1,318,515) 713,637 102,628
Participant withdrawals (1,932) (3,507) (17)
--------- -------- -----------
Net increase in net assets resulting from participant
transactions 5,965,320 3,191,880 329,609
--------- -------- -----------
Net increase in net assets 5,981,138 3,288,575 335,698
Net assets
Beginning of period 0 0 0
--------- -------- -----------
End of period $ 5,981,138 $3,288,575 $335,698
========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Total
Return International Balanced
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 25,708 $ (210) $ 4,997
Net realized gain (loss) 179,158 (114) 13,785
Net unrealized appreciation (depreciation) (125,252) 1,434 (1,449)
--------- -------- -----------
Net increase in net assets resulting from operations 79,614 1,110 17,333
--------- -------- -----------
From accumulation unit transactions
Participant deposits 2,580,979 93,558 656,615
Participant transfers 381,238 39,596 82,588
Participant withdrawals (367) -- (3,550)
--------- -------- -----------
Net increase in net assets resulting from participant
transactions 2,961,850 133,154 735,653
--------- -------- -----------
Net increase in net assets 3,041,464 134,264 752,986
Net assets
Beginning of period 0 0 0
--------- -------- -----------
End of period $3,041,464 $134,264 $752,986
========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Wanger Wanger
International U.S.
Real Estate Small Cap Small Cap
Sub-Account Sub-Account Sub-Account
----------- ---------- -------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 2,619 $ (260) $ (3,079)
Net realized gain (loss) 798 (6) 29
Net unrealized appreciation (depreciation) 739 7,774 (19,415)
--------- -------- -----------
Net increase (decrease) in net assets resulting from
operations 4,156 7,508 (22,465)
--------- -------- -----------
From accumulation unit transactions
Participant deposits 227,039 214,634 940,831
Participant transfers 6,466 58,021 331,307
Participant withdrawals (6) (110) (312)
--------- -------- -----------
Net increase in net assets resulting from participant
transactions 233,499 272,545 1,271,826
--------- -------- -----------
Net increase in net assets 237,655 280,053 1,249,361
Net assets
Beginning of period 0 0 0
--------- -------- -----------
End of period $237,655 $280,053 $1,249,361
========= ======== ===========
</TABLE>
See Notes to Financial Statements
6
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
(Unaudited)
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
-------------------- ---------------------- ------------------------
For the period ended For the period ended For the period ended
6/30/96 12/31/95(2) 6/30/96 12/31/95(2) 6/30/96 12/31/95(2)
-------- -------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period $1.014954 $1.000000 $ 1.082876 $ 1.000000 $ 1.051781 $ 1.000000
Income from investment operations
Net investment income (loss) 0.017989 0.014954 (0.001103) (0.000697) 0.039979 0.056501
Net realized and unrealized gain
(loss) -- -- 0.060597 0.083573 (0.017791) (0.004720)
------ ------ ------- ------- ------- ---------
Total from investment operations 0.017989 0.014954 0.059494 0.082876 0.022188 0.051781
------ ------ ------- ------- ------- ---------
Unit value, end of period $1.032943 $1.014954 $ 1.142370 $ 1.082876 $ 1.073969 $ 1.051781
====== ====== ======= ======= ======= =========
Total return 1.77%(1) 1.50%(1) 5.49%(1) 8.29%(1) 2.11%(1) 5.18%(1)
Net assets, end of period (000) $12,995 $5,981 $26,051 $3,289 $5,187 $336
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------------- ---------------------- ------------------------
For the period ended For the period ended For the period ended
6/30/96 12/31/95(2) 6/30/96 12/31/95(2) 6/30/96 12/31/95(2)
-------- -------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period $1.042018 $1.000000 $ 1.009660 $ 1.000000 $1.047597 $1.000000
Income from investment operations
Net investment income (loss) 0.007607 0.013568 (0.006745) (0.001828) 0.010309 0.013722
Net realized and unrealized gain 0.030589 0.028450 0.132695 0.011488 0.014881 0.033875
------ ------ ------- ------- ------- ---------
Total from investment operations 0.038196 0.042018 0.125950 0.009660 0.025190 0.047597
------ ------ ------- ------- ------- ---------
Unit value, end of period $1.080214 $1.042018 $ 1.135610 $ 1.009660 $1.072787 $1.047597
====== ====== ======= ======= ======= =========
Total return 3.67%(1) 4.20%(1) 12.47%(1) 0.97%(1) 2.40%(1) 4.76%(1)
Net assets, end of period (000) $9,988 $3,041 $1,526 $134 $3,454 $753
</TABLE>
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account Sub-Account(3)
------------------------ -------------------
For the period
For the period ended ended
6/30/96 12/31/95(2) 6/30/96
---------- ---------- -------------------
<S> <C> <C> <C>
Unit value, beginning of period $1.050105 $1.000000 $ 1.000000
Income from investment operations
Net investment income (loss) 0.021551 0.031575 (0.007942)
Net realized and unrealized gain 0.037361 0.018530 0.082970
-------- -------- -----------------
Total from investment operations 0.058912 0.050105 0.075028
-------- -------- -----------------
Unit value, end of period $1.109017 $1.050105 $ 1.075028
======== ======== =================
Total return 5.61%(1) 5.01%(1) 7.50%(1)
Net assets, end of period (000) $712 $238 $1,423
</TABLE>
<TABLE>
<CAPTION>
Wanger International
Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account
-------------------------- ----------------------------
For the period ended For the period ended
6/30/96 12/31/95(2) 6/30/96 12/31/95(2)
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.088168 $ 1.000000 $ 0.951679 $ 1.000000
Income from investment operations
Net investment income (loss) (0.007397) (0.003053) (0.006678) (0.006623)
Net realized and unrealized gain (loss) 0.300323 0.091221 0.306175 (0.041698)
--------- --------- --------- -----------
Total from investment operations 0.292926 0.088168 0.299497 (0.048321)
--------- --------- --------- -----------
Unit value, end of period $ 1.381094 $ 1.088168 $ 1.251176 $ 0.951679
========= ========= ========= ===========
Total return 26.92%(1) 8.82%(1) 31.47%(1) -4.83%(1)
Net assets, end of period (000) $6,583 $280 $8,531 $1,249
</TABLE>
(1) Unannualized
(2) For the period July 31, 1995 to December 31, 1995
(3) From inception January 29, 1996 to June 30, 1996
See Notes to Financial Statements
7
<PAGE>
PHL VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
Note 1--Organization:
PHL Variable Accumulation Account (the Account) is a separate investment
account of PHL Variable Insurance Company (PHL Variable). The Account is
organized as a unit investment trust and currently consists of ten
Sub-accounts, which invest solely in a designated portfolio of The Phoenix
Edge Series Fund and two Sub-accounts which invest in the Wanger Advisors
Trust (the "Funds"). The Account is offered as The Big Edge Choice to
individuals (VA4). Contract holders may also direct the allocation of their
investments between the Account and the Guaranteed Interest Account of the
general account of PHL Variable through participant transfers.
Each Series has distinct investment objectives. The Money Market Series is
a pooled short-term investment fund, the Growth Series is a growth common
stock fund, the Multi-Sector Fixed Income (formerly Bond) Series is a
long-term debt fund, the Total Return Series invests in equity securities and
long and short-term debt, the International Series invests primarily in an
internationally diversified portfolio of equity securities, the Balanced
Series is a balanced fund which invests in growth stocks and at least 25% of
its assets in fixed income senior securities, the Real Estate Series invests
in marketable securities of publicly traded real estate investment trusts
("REITs") and companies that are principally engaged in the real estate
industry, the Strategic Theme Series invests in securities of companies
believed to benefit from specific trends, the Wanger U.S. Small Cap Series
invests in growth common stock of U.S. companies with stock market
capitalization of less than $1 billion and the Wanger International Small Cap
Series invests in securities of non-U.S. companies with a stock market
capitalization of less than $1 billion.
Note 2--Significant Accounting Policies
A. Valuation of Investments: Investments are made exclusively in the Funds
and are valued at the net asset values per share of the respective Series.
B. Investment transactions and related income: Realized gains and losses
include capital gain distributions from the Funds as well as gains and losses
on sales of shares in the funds determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from PHL Variable and
under current federal income tax law, income in the Account is not taxed
since reserves are established equivalent to such income. Therefore, no
provision for related federal or state income taxes is required.
D. Distributions: Distributions are recorded as investment income on the
ex-dividend date.
Note 3--Purchases and Sales of Shares of The Funds
Purchases and sales of shares of the Funds for the period ended June 30,
1996 aggregated the following:
Sub-Account Purchases Sales
-------------------------------------------- ---------- ------------
Phoenix Edge Series Fund:
Money Market $20,700,411 $13,675,840
Growth 22,403,949 277,342
Multi-Sector Fixed Income 5,473,435 558,753
Total Return 6,965,799 161,460
International 1,333,266 12,040
Balanced 2,944,053 157,079
Real Estate 469,428 12,896
Strategic Theme 1,408,046 13,651
Wanger Advisors Trust:
International Small Cap 5,712,775 4,058
U.S. Small Cap 6,493,810 167,011
8
<PAGE>
PHL VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited) (Continued)
Note 4--Participant Accumulation Unit Transactions (in units):
<TABLE>
<CAPTION>
Sub-Account
---------------------------------------------------------------------------------
Multi-Sector
Money Fixed Total
Market Growth Income Return International Balanced
----------- --------- ----------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
VA4
Participant deposits 40,324,127 7,608,843 1,302,396 1,777,756 475,192 810,639
Participant transfers (32,994,012) 12,192,306 3,222,419 4,560,451 737,207 1,717,329
Participant withdrawals (642,890) (33,901) (13,948) (10,516) (1,393) (27,351)
</TABLE>
<TABLE>
<CAPTION>
Real Strategic Wanger International Wanger U.S.
Estate Theme Small Cap Small Cap
---------- ------------ ---------------------- -----------
<S> <C> <C> <C> <C>
Participant deposits 208,016 238,209 1,523,330 1,850,766
Participant transfers 208,922 1,086,661 2,987,603 3,654,771
Participant withdrawals (1,050) (1,263) (1,521) 0
</TABLE>
Note 5--Investment Advisory Fees and Related Party Transactions:
PHL Variable and its affiliate, Phoenix Equity Planning Corporation, a
registered broker/dealer in securities, provide all services to the Account.
PHL Variable assumes the risk that annuitants as a class may live longer
than expected and that its expenses may be higher than its deductions for
such expenses. In return for the assumption of these mortality and expense
risks, PHL Variable charges the Sub-accounts the daily equivalent of 0.40%,
0.85% and 0.125% on an annual basis for mortality, expense risks and daily
administrative fees, respectively.
As compensation for administrative services provided to the Account, PHL
Variable additionally receives $35 per year from each contract, which is
deducted from the Sub-account holding the assets of the participant, or on a
pro rata basis from two or more Sub-accounts in relation to their values
under the contract. The $35 charge is waived on account values of more than
$50,000. Such fees aggregated $70 for the period ended June 30, 1996.
Phoenix Equity Planning Corporation is the principal underwriter and
distributor for the Account. PHL Variable reimburses Phoenix Equity Planning
Corporation for expenses incurred as underwriter. On surrender of a contract,
contingent deferred sales charges, which vary from 0-7% depending upon the
duration of each contract deposit, are deducted from the proceeds and are
paid to PHL Variable as reimbursement for services provided. There were no
contingent deferred sales charges deducted and paid to PHL Variable for the
period ended June 30, 1996.
Note 6--Distribution of Net Income:
The Account does not expect to declare dividends to participants from
accumulated net income. The accumulated net income is distributed to
participants as part of withdrawals of amounts in the form of surrenders,
death benefits, transfers or annuity payments in excess of net purchase
payments.
Note 7--Diversification Requirements:
Under the provisions of Section 817(h) of the Internal Revenue Code (the
Code), a variable annuity contract, other than a contract issued in
connection with certain types of employee benefit plans, will not be treated
as an annuity contract for federal tax purposes for any period for which the
investments of the segregated asset account on which the contract is based
are not adequately diversified. The Code provides that the "adequately
diversified" requirement may be met if the underlying investments satisfy
either a statutory safe harbor test or diversification requirements set forth
in regulations issued by the Secretary of the Treasury.
The Internal Revenue Service has issued regulations under Section 817(h)
of the Code. PHL Variable believes that the Account satisfies the current
requirements of the regulations, and it intends that the Account will
continue to meet such requirements.
9
<PAGE>
PHL VARIABLE ACCUMULATION ACCOUNT
PHL Variable Insurance Company
One American Row
Hartford, Connecticut 06115
Underwriter
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
Custodian
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
Brown Brothers Harriman & Co.
(International Series)
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust
(Real Estate Series)
P.O. Box 351
Boston, Massachusetts 02101
<PAGE>
[PHOENIX LOGO]
PHL Variable Insurance Company
Phoenix Home Life Mutual Insurance Company
101 Munson Street
P.O. Box 942
Greenfield, MA 01302-0942
PHL Variable Insurance Company
Statutory Home Office: Hartford, Connecticut
OL 2232 S (8/96) (C) 1996 Phoenix Home Life Mutual Insurance Company
(R) Printed on Recycled Paper.
700.04
