485BPOS 1 d485bpos.txt PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT BOOK A As filed with the Securities and Exchange Commission on May 1, 2008 File No. 002-78020 811-03488 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. [ ] Post-Effective Amendment No. 52 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 121 [X] (Check appropriate box or boxes.) ----------------- Phoenix Life Variable Accumulation Account (f/k/a Phoenix Home Life Variable Accumulation Account) (Exact Name of Registrant) ----------------- Phoenix Life Insurance Company (f/k/a Phoenix Home Life Mutual Insurance Company) (Name of Depositor) ----------------- One American Row, Hartford, Connecticut 06102-5056 (Address of Depositor's Principal Executive Offices) (Zip Code) (800) 447-4312 (Depositor's Telephone Number, including Area Code) ----------------- John H. Beers, Esq. Phoenix Life Insurance Company One American Row Hartford, CT 06102-5056 (Name and Address of Agent for Service) ----------------- Approximate Date of Proposed Public Offering: as soon as practicable after the effective date of the Registration Statement. It is proposed that this filing will become effective (check appropriate box) [X] immediately upon filing pursuant to paragraph (b) of Rule 485 [ ] on May 1, 2008 pursuant to paragraph (b) of Rule 485 [ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485 [ ] on ______ pursuant to paragraph (a)(1) of Rule 485 If appropriate, check the following box: [ ] this Post-Effective Amendment designates a new effective date for a previously filed Post-Effective Amendment. ----------------- Title of Securities Being Registered: Deferred variable annuity contracts ================================================================================ PART A PART B Version B is not affected by this filing This filing incorporates by reference the prospectus and Statement of Additional Information contained in Post-Effective Amendment No. 51 to Registration Statement on Form N-4 (File No. 002-78020) filed via EDGAR on April 30, 2008. LOGO -------------------------------------------------------------------------------- ANNUAL REPORT PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT December 31, 2007 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007
AIM V.I. Capital AIM V.I. Mid Cap Appreciation Fund - AIM V.I. Core Equity Core Equity Fund - Class I Fund - Class I Class I -------------------- --------------------- ------------------- Assets: Investments at fair value $ 3,389,069 $ 1,123,305 $ 1,674,386 -------------------- --------------------- ------------------- Total Assets $ 3,389,069 $ 1,123,305 $ 1,674,386 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - -------------------- --------------------- ------------------- Total Net Assets $ 3,389,069 $ 1,123,305 $ 1,674,386 ==================== ===================== =================== Net Assets: Accumulation Units $ 3,389,069 $ 1,123,305 $ 1,674,386 Contracts in payout (annuitization period) $ - $ - $ - -------------------- --------------------- ------------------- Total Net Assets $ 3,389,069 $ 1,123,305 $ 1,674,386 ==================== ===================== =================== ==================== ===================== =================== Units Outstanding 2,850,781 968,478 1,305,375 ==================== ===================== =================== Investment shares held 115,390 38,588 114,921 Investments at cost $ 2,410,515 $ 967,016 $ 1,545,187 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.18 $ 1.16 $ 1.29 Freedom Edge(R) $ - $ - $ 1.27 Group Strategic Edge(R) $ 1.09 $ 1.16 $ 1.28 Phoenix Dimensions(R) Option 1 $ - $ - $ - Phoenix Dimensions(R) Option 2 $ 1.27 $ - $ - Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.26 $ 1.15 $ 1.27 Phoenix Investor's Edge(R) Option 2 $ 1.25 $ 1.15 $ 1.26 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ - $ - Phoenix Investor's Edge+ Option 2 $ - $ - $ - Phoenix Spectrum Edge(R) Option 1 $ 1.31 $ 1.16 $ 1.29 Phoenix Spectrum Edge(R) Option 2 $ 1.30 $ 1.16 $ 1.28 Phoenix Spectrum Edge(R) Option 3 $ 1.29 $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 1.15 $ 1.16 $ - Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.15 $ 1.16 $ 1.28 The Big Edge Plus(R) $ 1.09 $ 1.16 $ 1.28 The Phoenix Edge(R)--VA NY Option 1 $ 1.19 $ 1.17 $ 1.30 The Phoenix Edge(R)--VA NY Option 2 $ 1.10 $ 1.16 $ 1.28
Alger American Leveraged AllCap Portfolio - Class O -------------------- Assets: Investments at fair value $ 4,005,076 -------------------- Total Assets $ 4,005,076 Liabilities: Payable to Phoenix Life Insurance Company $ - -------------------- Total Net Assets $ 4,005,076 ==================== Net Assets: Accumulation Units $ 3,962,784 Contracts in payout (annuitization period) $ 42,292 -------------------- Total Net Assets $ 4,005,076 ==================== ==================== Units Outstanding 3,547,911 ==================== Investment shares held 72,309 Investments at cost $ 1,903,460 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.02 Freedom Edge(R) $ 2.00 Group Strategic Edge(R) $ 1.05 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ - Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.66 Phoenix Investor's Edge(R) Option 2 $ 1.65 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.77 Phoenix Spectrum Edge(R) Option 2 $ 1.75 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.06 The Big Edge Plus(R) $ 1.05 The Phoenix Edge(R)--VA NY Option 1 $ 1.36 The Phoenix Edge(R)--VA NY Option 2 $ 1.50
See Notes to Financial Statements SA - 1 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
DWS Equity 500 Federated Fund for Federated High Index Fund VIP - U.S. Government Income Bond Fund II Class A Securities II - Primary Shares ------------------- ------------------- -------------------- Assets: Investments at fair value $ 8,535,021 $ 17,719,720 $ 4,401,416 ------------------- ------------------- -------------------- Total Assets $ 8,535,021 $ 17,719,720 $ 4,401,416 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- ------------------- -------------------- Total Net Assets $ 8,535,021 $ 17,719,720 $ 4,401,416 =================== =================== ==================== Net Assets: Accumulation Units $ 8,535,021 $ 16,662,282 $ 4,269,810 Contracts in payout (annuitization period) $ - $ 1,057,438 $ 131,606 ------------------- ------------------- -------------------- Total Net Assets $ 8,535,021 $ 17,719,720 $ 4,401,416 =================== =================== ==================== =================== =================== ==================== Units Outstanding 6,289,474 13,757,468 3,187,377 =================== =================== ==================== Investment shares held 549,584 1,536,834 587,642 Investments at cost $ 6,251,128 $ 17,385,096 $ 4,661,860 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.40 $ 1.44 $ 1.42 Freedom Edge(R) $ - $ 1.11 $ - Group Strategic Edge(R) $ 1.38 $ 1.39 $ 1.35 Phoenix Dimensions(R) Option 1 $ 1.24 $ - $ - Phoenix Dimensions(R) Option 2 $ 1.23 $ 1.07 $ 1.14 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Income Choice(R) with GPAF $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.30 $ 1.17 $ 1.44 Phoenix Investor's Edge(R) Option 2 $ 1.29 $ 1.16 $ 1.42 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ - $ - Phoenix Investor's Edge+ Option 2 $ - $ - $ - Phoenix Spectrum Edge(R) Option 1 $ 1.33 $ 1.21 $ 1.50 Phoenix Spectrum Edge(R) Option 2 $ 1.32 $ 1.20 $ 1.49 Phoenix Spectrum Edge(R) Option 3 $ - $ 1.19 $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ 1.24 $ 1.46 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.37 $ 1.40 $ 1.34 The Big Edge Plus(R) $ 1.38 $ 1.39 $ 1.35 The Phoenix Edge(R)--VA NY Option 1 $ 1.41 $ 1.28 $ 1.51 The Phoenix Edge(R)--VA NY Option 2 $ 1.38 $ 1.26 $ 1.46
Fidelity VIP Contrafund(R) Portfolio - Service Class -------------------- Assets: Investments at fair value $ 30,342,085 -------------------- Total Assets $ 30,342,085 Liabilities: Payable to Phoenix Life Insurance Company $ - -------------------- Total Net Assets $ 30,342,085 ==================== Net Assets: Accumulation Units $ 30,189,899 Contracts in payout (annuitization period) $ 152,186 -------------------- Total Net Assets $ 30,342,085 ==================== ==================== Units Outstanding 19,340,730 ==================== Investment shares held 1,091,442 Investments at cost $ 27,114,268 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.57 Freedom Edge(R) $ 1.87 Group Strategic Edge(R) $ 1.53 Phoenix Dimensions(R) Option 1 $ 1.44 Phoenix Dimensions(R) Option 2 $ 1.43 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Income Choice(R) with GPAF $ - Phoenix Investor's Edge(R) Option 1 $ 1.87 Phoenix Investor's Edge(R) Option 2 $ 1.86 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.91 Phoenix Spectrum Edge(R) Option 2 $ 1.90 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ 1.82 Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.52 The Big Edge Plus(R) $ 1.53 The Phoenix Edge(R)--VA NY Option 1 $ 1.82 The Phoenix Edge(R)--VA NY Option 2 $ 1.79
See Notes to Financial Statements SA - 2 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Fidelity VIP Growth Fidelity VIP Opportunities Fidelity VIP Growth Investment Grade Portfolio - Service Portfolio - Service Bond Portfolio - Class Class Service Class -------------------- -------------------- ------------------- Assets: Investments at fair value $ 5,696,734 $ 5,033,781 $ 2,248,281 -------------------- -------------------- ------------------- Total Assets $ 5,696,734 $ 5,033,781 $ 2,248,281 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - -------------------- -------------------- ------------------- Total Net Assets $ 5,696,734 $ 5,033,781 $ 2,248,281 ==================== ==================== =================== Net Assets: Accumulation Units $ 5,692,898 $ 4,945,859 $ 2,248,281 Contracts in payout (annuitization period) $ 3,836 $ 87,922 $ - -------------------- -------------------- ------------------- Total Net Assets $ 5,696,734 $ 5,033,781 $ 2,248,281 ==================== ==================== =================== ==================== ==================== =================== Units Outstanding 4,713,038 5,233,964 2,179,333 ==================== ==================== =================== Investment shares held 255,230 111,885 177,450 Investments at cost $ 4,468,207 $ 3,435,238 $ 2,194,650 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.04 $ 0.89 $ 1.04 Freedom Edge(R) $ 1.58 $ - $ 1.03 Group Strategic Edge(R) $ 1.00 $ 0.88 $ 1.03 Phoenix Dimensions(R) Option 1 $ 1.37 $ - $ 1.03 Phoenix Dimensions(R) Option 2 $ 1.36 $ 1.40 $ 1.03 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.43 $ 1.27 $ 1.03 Phoenix Investor's Edge(R) Option 2 $ 1.42 $ 1.26 $ 1.03 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ 1.10 $ - $ 1.02 Phoenix Investor's Edge+ Option 2 $ 1.10 $ - $ 1.02 Phoenix Spectrum Edge(R) Option 1 $ 1.46 $ 1.32 $ 1.03 Phoenix Spectrum Edge(R) Option 2 $ 1.45 $ 1.31 $ 1.03 Phoenix Spectrum Edge(R) Option 3 $ - $ 1.30 $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 1.33 $ 1.16 $ 1.03 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.04 $ 0.87 $ 1.03 The Big Edge Plus(R) $ 1.00 $ 0.88 $ 1.03 The Phoenix Edge(R)--VA NY Option 1 $ 1.22 $ 1.15 $ 1.04 The Phoenix Edge(R)--VA NY Option 2 $ 1.30 $ 1.00 $ -
Franklin Income Securities Fund - Class 2 ------------------- Assets: Investments at fair value $ 5,925,503 ------------------- Total Assets $ 5,925,503 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------- Total Net Assets $ 5,925,503 =================== Net Assets: Accumulation Units $ 5,925,503 Contracts in payout (annuitization period) $ - ------------------- Total Net Assets $ 5,925,503 =================== =================== Units Outstanding 5,326,364 =================== Investment shares held 342,316 Investments at cost $ 5,983,021 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.07 Freedom Edge(R) $ 1.13 Group Strategic Edge(R) $ 1.06 Phoenix Dimensions(R) Option 1 $ 1.14 Phoenix Dimensions(R) Option 2 $ 1.13 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.13 Phoenix Investor's Edge(R) Option 2 $ 1.13 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ 0.96 Phoenix Investor's Edge+ Option 2 $ 0.96 Phoenix Spectrum Edge(R) Option 1 $ 1.14 Phoenix Spectrum Edge(R) Option 2 $ 1.14 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.06 The Big Edge Plus(R) $ 1.06 The Phoenix Edge(R)--VA NY Option 1 $ 1.14 The Phoenix Edge(R)--VA NY Option 2 $ 1.14
See Notes to Financial Statements SA - 3 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Lord Abbett Lazard Retirement Lord Abbett Bond- Growth and Income Small Cap Portfolio Debenture Portfolio Portfolio - Service Shares - Class VC - Class VC -------------------- ------------------- ------------------- Assets: Investments at fair value $ 412,876 $ 2,882,324 $ 11,419,978 -------------------- ------------------- ------------------- Total Assets $ 412,876 $ 2,882,324 $ 11,419,978 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - -------------------- ------------------- ------------------- Total Net Assets $ 412,876 $ 2,882,324 $ 11,419,978 ==================== =================== =================== Net Assets: Accumulation Units $ 409,077 $ 2,882,324 $ 11,390,779 Contracts in payout (annuitization period) $ 3,799 $ - $ 29,199 -------------------- ------------------- ------------------- Total Net Assets $ 412,876 $ 2,882,324 $ 11,419,978 ==================== =================== =================== ==================== =================== =================== Units Outstanding 360,066 2,494,841 9,232,984 ==================== =================== =================== Investment shares held 41,371 244,887 409,172 Investments at cost $ 583,098 $ 2,857,502 $ 10,986,447 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.16 $ 1.16 $ 1.25 Freedom Edge(R) $ - $ 1.15 $ 1.23 Group Strategic Edge(R) $ 1.15 $ 1.16 $ 1.24 Phoenix Dimensions(R) Option 1 $ - $ - $ 1.24 Phoenix Dimensions(R) Option 2 $ - $ 1.15 $ 1.23 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.14 $ 1.14 $ 1.23 Phoenix Investor's Edge(R) Option 2 $ 1.13 $ 1.14 $ 1.22 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ - $ 0.97 Phoenix Investor's Edge+ Option 2 $ - $ - $ 0.97 Phoenix Spectrum Edge(R) Option 1 $ 1.15 $ 1.16 $ 1.25 Phoenix Spectrum Edge(R) Option 2 $ 1.15 $ 1.16 $ 1.24 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ 1.24 Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ 1.15 $ 1.24 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.14 $ 1.15 $ 1.24 The Big Edge Plus(R) $ 1.15 $ 1.16 $ 1.24 The Phoenix Edge(R)--VA NY Option 1 $ - $ 1.17 $ 1.25 The Phoenix Edge(R)--VA NY Option 2 $ 1.15 $ 1.16 $ 1.24
Lord Abbett Mid- Cap Value Portfolio - Class VC ------------------- Assets: Investments at fair value $ 3,021,187 ------------------- Total Assets $ 3,021,187 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------- Total Net Assets $ 3,021,187 =================== Net Assets: Accumulation Units $ 3,016,930 Contracts in payout (annuitization period) $ 4,257 ------------------- Total Net Assets $ 3,021,187 =================== =================== Units Outstanding 2,537,853 =================== Investment shares held 159,851 Investments at cost $ 3,160,616 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.20 Freedom Edge(R) $ 1.18 Group Strategic Edge(R) $ 1.19 Phoenix Dimensions(R) Option 1 $ 1.17 Phoenix Dimensions(R) Option 2 $ 1.17 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.18 Phoenix Investor's Edge(R) Option 2 $ 1.17 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.20 Phoenix Spectrum Edge(R) Option 2 $ 1.19 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ 1.19 Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.19 The Big Edge Plus(R) $ 1.19 The Phoenix Edge(R)--VA NY Option 1 $ 1.20 The Phoenix Edge(R)--VA NY Option 2 $ 1.19
See Notes to Financial Statements SA - 4 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Mutual Shares Neuberger Berman Neuberger Berman Securities Fund - AMT Fasciano AMT Guardian Class 2 Portfolio - S Class Portfolio - S Class ------------------- -------------------- -------------------- Assets: Investments at fair value $ 17,210,558 $ 9,177 $ 1,354,684 ------------------- -------------------- -------------------- Total Assets $ 17,210,558 $ 9,177 $ 1,354,684 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- -------------------- -------------------- Total Net Assets $ 17,210,558 $ 9,177 $ 1,354,684 =================== ==================== ==================== Net Assets: Accumulation Units $ 17,077,675 $ 9,177 $ 1,354,684 Contracts in payout (annuitization period) $ 132,883 $ - $ - ------------------- -------------------- -------------------- Total Net Assets $ 17,210,558 $ 9,177 $ 1,354,684 =================== ==================== ==================== =================== ==================== ==================== Units Outstanding 9,836,328 9,509 1,236,073 =================== ==================== ==================== Investment shares held 852,430 634 64,447 Investments at cost $ 14,063,502 $ 9,064 $ 1,339,987 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.61 $ - $ 1.11 Freedom Edge(R) $ 1.60 $ 0.95 $ 1.11 Group Strategic Edge(R) $ 2.01 $ 1.01 $ 1.11 Phoenix Dimensions(R) Option 1 $ 1.29 $ - $ 1.12 Phoenix Dimensions(R) Option 2 $ 1.28 $ - $ 1.11 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.54 $ 0.95 $ 1.11 Phoenix Investor's Edge(R) Option 2 $ 1.53 $ - $ 1.11 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ 0.94 $ - $ 0.98 Phoenix Investor's Edge+ Option 2 $ 0.94 $ - $ 0.98 Phoenix Spectrum Edge(R) Option 1 $ 1.57 $ - $ 1.12 Phoenix Spectrum Edge(R) Option 2 $ 1.56 $ - $ 1.12 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 1.61 $ - $ 1.11 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.95 $ 1.01 $ 1.10 The Big Edge Plus(R) $ 2.01 $ 1.01 $ 1.11 The Phoenix Edge(R)--VA NY Option 1 $ 1.58 $ - $ 1.12 The Phoenix Edge(R)--VA NY Option 2 $ 1.56 $ - $ 1.12
Oppenheimer Capital Appreciation Fund/VA - Service Shares ------------------- Assets: Investments at fair value $ 53,794 ------------------- Total Assets $ 53,794 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------- Total Net Assets $ 53,794 =================== Net Assets: Accumulation Units $ 53,794 Contracts in payout (annuitization period) $ - ------------------- Total Net Assets $ 53,794 =================== =================== Units Outstanding 46,697 =================== Investment shares held 1,150 Investments at cost $ 50,812 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ - Freedom Edge(R) $ - Group Strategic Edge(R) $ 1.16 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ 1.14 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ - Phoenix Investor's Edge(R) Option 2 $ 1.13 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ - Phoenix Spectrum Edge(R) Option 2 $ - Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ - The Big Edge Plus(R) $ 1.16 The Phoenix Edge(R)--VA NY Option 1 $ - The Phoenix Edge(R)--VA NY Option 2 $ -
See Notes to Financial Statements SA - 5 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Oppenheimer Oppenheimer Main Global Securities Street Small Cap Fund/VA - Service Fund/VA - Service Phoenix Capital Shares Shares Growth Series ------------------- ------------------- ------------------- Assets: Investments at fair value $ 365,528 $ 924,165 $ 132,252,316 ------------------- ------------------- ------------------- Total Assets $ 365,528 $ 924,165 $ 132,252,316 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- ------------------- ------------------- Total Net Assets $ 365,528 $ 924,165 $ 132,252,316 =================== =================== =================== Net Assets: Accumulation Units $ 365,528 $ 924,165 $ 131,217,698 Contracts in payout (annuitization period) $ - $ - $ 1,034,618 ------------------- ------------------- ------------------- Total Net Assets $ 365,528 $ 924,165 $ 132,252,316 =================== =================== =================== =================== =================== =================== Units Outstanding 329,582 953,544 20,565,802 =================== =================== =================== Investment shares held 10,079 51,259 7,869,516 Investments at cost $ 365,115 $ 985,139 $ 116,341,398 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.11 $ 1.01 $ 10.73 Freedom Edge(R) $ 1.11 $ 0.97 $ 1.26 Group Strategic Edge(R) $ 1.11 $ 1.01 $ 10.19 Phoenix Dimensions(R) Option 1 $ - $ 0.97 $ - Phoenix Dimensions(R) Option 2 $ 1.11 $ 0.97 $ 1.16 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.11 $ 0.97 $ 1.10 Phoenix Investor's Edge(R) Option 2 $ 1.10 $ 0.96 $ 1.09 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ 0.89 $ - Phoenix Investor's Edge+ Option 2 $ - $ 0.89 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.12 $ 0.97 $ 1.17 Phoenix Spectrum Edge(R) Option 2 $ - $ 0.97 $ 1.16 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ 1.15 Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ 0.97 $ 0.95 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.11 $ 1.01 $ 0.82 The Big Edge Plus(R) $ 1.11 $ 1.01 $ 10.19 The Phoenix Edge(R)--VA NY Option 1 $ 1.12 $ 0.98 $ 0.71 The Phoenix Edge(R)--VA NY Option 2 $ 1.11 $ - $ 0.77
Phoenix Growth and Income Series ------------------ Assets: Investments at fair value $ 14,469,046 ------------------ Total Assets $ 14,469,046 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------ Total Net Assets $ 14,469,046 ================== Net Assets: Accumulation Units $ 14,426,529 Contracts in payout (annuitization period) $ 42,517 ------------------ Total Net Assets $ 14,469,046 ================== ================== Units Outstanding 10,057,474 ================== Investment shares held 968,473 Investments at cost $ 10,285,937 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.57 Freedom Edge(R) $ 1.52 Group Strategic Edge(R) $ 1.53 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ 1.25 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.32 Phoenix Investor's Edge(R) Option 2 $ 1.31 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.36 Phoenix Spectrum Edge(R) Option 2 $ 1.35 Phoenix Spectrum Edge(R) Option 3 $ 1.33 Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ 1.25 Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.42 The Big Edge Plus(R) $ 1.53 The Phoenix Edge(R)--VA NY Option 1 $ 1.19 The Phoenix Edge(R)--VA NY Option 2 $ 1.19
See Notes to Financial Statements SA - 6 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Phoenix Multi- Phoenix Mid-Cap Phoenix Money Sector Fixed Growth Series Market Series Income Series ------------------- ------------------- ------------------- Assets: Investments at fair value $ 15,269,665 $ 23,551,159 $ 35,299,702 ------------------- ------------------- ------------------- Total Assets $ 15,269,665 $ 23,551,159 $ 35,299,702 Liabilities: Payable to Phoenix Life Insurance Company $ - $ 55 $ - ------------------- ------------------- ------------------- Total Net Assets $ 15,269,665 $ 23,551,104 $ 35,299,702 =================== =================== =================== Net Assets: Accumulation Units $ 15,156,384 $ 23,212,665 $ 34,800,983 Contracts in payout (annuitization period) $ 113,281 $ 338,439 $ 498,719 ------------------- ------------------- ------------------- Total Net Assets $ 15,269,665 $ 23,551,104 $ 35,299,702 =================== =================== =================== =================== =================== =================== Units Outstanding 9,969,014 11,859,430 9,990,784 =================== =================== =================== Investment shares held 931,196 2,355,116 3,885,386 Investments at cost $ 12,235,650 $ 23,551,159 $ 37,131,355 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.51 $ 2.81 $ 6.49 Freedom Edge(R) $ - $ 1.06 $ 1.19 Group Strategic Edge(R) $ 1.64 $ 2.67 $ 6.16 Phoenix Dimensions(R) Option 1 $ - $ 1.08 $ 1.09 Phoenix Dimensions(R) Option 2 $ - $ 1.07 $ 1.09 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Income Choice(R) with GPAF $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.12 $ 1.05 $ 1.36 Phoenix Investor's Edge(R) Option 2 $ 1.11 $ 1.04 $ 1.35 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ 1.02 $ 1.00 Phoenix Investor's Edge+ Option 2 $ - $ 1.02 $ 1.00 Phoenix Spectrum Edge(R) Option 1 $ 1.19 $ 1.08 $ 1.40 Phoenix Spectrum Edge(R) Option 2 $ 1.18 $ 1.07 $ 1.39 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 0.92 $ 1.07 $ 1.43 Templeton Investment Plus $ - $ 1.69 $ - The Big Edge Choice(R)--NY $ 1.55 $ 1.21 $ 1.49 The Big Edge Plus(R) $ 1.64 $ 2.67 $ 6.16 The Phoenix Edge(R)--VA NY Option 1 $ 1.04 $ 1.12 $ 1.47 The Phoenix Edge(R)--VA NY Option 2 $ 0.89 $ 1.09 $ 1.42
Phoenix Multi- Sector Short Term Bond Series ------------------ Assets: Investments at fair value $ 3,549,617 ------------------ Total Assets $ 3,549,617 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------ Total Net Assets $ 3,549,617 ================== Net Assets: Accumulation Units $ 3,549,617 Contracts in payout (annuitization period) $ - ------------------ Total Net Assets $ 3,549,617 ================== ================== Units Outstanding 3,156,216 ================== Investment shares held 359,774 Investments at cost $ 3,614,496 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.13 Freedom Edge(R) $ - Group Strategic Edge(R) $ 1.12 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ 1.07 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Income Choice(R) with GPAF $ - Phoenix Investor's Edge(R) Option 1 $ 1.12 Phoenix Investor's Edge(R) Option 2 $ 1.11 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.15 Phoenix Spectrum Edge(R) Option 2 $ 1.14 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.12 The Big Edge Plus(R) $ 1.12 The Phoenix Edge(R)--VA NY Option 1 $ 1.16 The Phoenix Edge(R)--VA NY Option 2 $ 1.14
See Notes to Financial Statements SA - 7 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Phoenix-Alger Phoenix Strategic Phoenix-Aberdeen Small-Cap Growth Allocation Series International Series Series ------------------- -------------------- ------------------- Assets: Investments at fair value $ 133,918,133 $ 64,615,375 $ 4,794,285 ------------------- -------------------- ------------------- Total Assets $ 133,918,133 $ 64,615,375 $ 4,794,285 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- -------------------- ------------------- Total Net Assets $ 133,918,133 $ 64,615,375 $ 4,794,285 =================== ==================== =================== Net Assets: Accumulation Units $ 132,712,468 $ 64,322,691 $ 4,686,255 Contracts in payout (annuitization period) $ 1,205,665 $ 292,684 $ 108,030 ------------------- -------------------- ------------------- Total Net Assets $ 133,918,133 $ 64,615,375 $ 4,794,285 =================== ==================== =================== =================== ==================== =================== Units Outstanding 21,182,942 20,226,646 2,027,076 =================== ==================== =================== Investment shares held 10,338,096 3,375,448 268,572 Investments at cost $ 131,423,544 $ 40,614,277 $ 4,368,179 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 7.84 $ 4.05 $ 2.40 Freedom Edge(R) $ - $ 2.32 $ - Group Strategic Edge(R) $ 7.44 $ 3.87 $ 2.37 Phoenix Dimensions(R) Option 1 $ - $ 1.70 $ - Phoenix Dimensions(R) Option 2 $ - $ 1.69 $ - Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.29 $ 2.24 $ 2.32 Phoenix Investor's Edge(R) Option 2 $ 1.28 $ 2.22 $ 2.30 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ 1.05 $ - Phoenix Investor's Edge+ Option 2 $ - $ 1.05 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.33 $ 2.26 $ 2.39 Phoenix Spectrum Edge(R) Option 2 $ 1.32 $ 2.24 $ 2.37 Phoenix Spectrum Edge(R) Option 3 $ 1.31 $ 2.22 $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 1.28 $ 1.98 $ 2.35 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.57 $ 1.75 $ 2.35 The Big Edge Plus(R) $ 7.44 $ 3.87 $ 2.37 The Phoenix Edge(R)--VA NY Option 1 $ 1.39 $ 1.68 $ 2.41 The Phoenix Edge(R)--VA NY Option 2 $ 1.34 $ 1.77 $ 2.37
Phoenix-Duff & Phelps Real Estate Securities Series ------------------ Assets: Investments at fair value $ 17,138,091 ------------------ Total Assets $ 17,138,091 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------ Total Net Assets $ 17,138,091 ================== Net Assets: Accumulation Units $ 16,976,722 Contracts in payout (annuitization period) $ 161,369 ------------------ Total Net Assets $ 17,138,091 ================== ================== Units Outstanding 4,218,558 ================== Investment shares held 638,929 Investments at cost $ 9,766,836 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 5.32 Freedom Edge(R) $ 1.97 Group Strategic Edge(R) $ 5.22 Phoenix Dimensions(R) Option 1 $ 1.24 Phoenix Dimensions(R) Option 2 $ 1.23 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 2.51 Phoenix Investor's Edge(R) Option 2 $ 2.48 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ 0.87 Phoenix Investor's Edge+ Option 2 $ 0.87 Phoenix Spectrum Edge(R) Option 1 $ 2.53 Phoenix Spectrum Edge(R) Option 2 $ 2.50 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ 2.63 Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 3.04 The Big Edge Plus(R) $ 5.22 The Phoenix Edge(R)--VA NY Option 1 $ 2.90 The Phoenix Edge(R)--VA NY Option 2 $ 2.78
See Notes to Financial Statements SA - 8 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Phoenix-S&P Phoenix-S&P Phoenix-S&P Dynamic Asset Dynamic Asset Dynamic Asset Allocation Series: Allocation Series: Allocation Series: Aggressive Growth Growth Moderate ------------------- ------------------- ------------------- Assets: Investments at fair value $ 652,766 $ 540,667 $ 876,219 ------------------- ------------------- ------------------- Total Assets $ 652,766 $ 540,667 $ 876,219 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- ------------------- ------------------- Total Net Assets $ 652,766 $ 540,667 $ 876,219 =================== =================== =================== Net Assets: Accumulation Units $ 408,518 $ 302,389 $ 647,970 Contracts in payout (annuitization period) $ - $ - $ - Retained in PLIC Variable Accumulation Separate Account by Phoenix Life Insurance Company $ 244,248 $ 238,278 $ 228,249 ------------------- ------------------- ------------------- Total Net Assets $ 652,766 $ 540,667 $ 876,219 =================== =================== =================== =================== =================== =================== Units Outstanding 344,940 266,211 589,663 =================== =================== =================== Investment shares held 55,034 46,852 80,715 Investments at cost $ 615,466 $ 508,038 $ 841,727 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ - $ - $ - Freedom Edge(R) $ - $ - $ 1.11 Group Strategic Edge(R) $ 1.12 $ 1.12 $ 1.10 Phoenix Dimensions(R) Option 1 $ 1.19 $ - $ - Phoenix Dimensions(R) Option 2 $ - $ - $ - Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.18 $ - $ - Phoenix Investor's Edge(R) Option 2 $ 1.18 $ 1.15 $ - Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ - $ 1.03 Phoenix Investor's Edge+ Option 2 $ - $ - $ - Phoenix Spectrum Edge(R) Option 1 $ - $ 1.17 $ - Phoenix Spectrum Edge(R) Option 2 $ - $ - $ 1.11 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ - $ - Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ - $ 1.12 $ 1.10 The Big Edge Plus(R) $ 1.12 $ 1.12 $ 1.10 The Phoenix Edge(R)--VA NY Option 1 $ - $ - $ - The Phoenix Edge(R)--VA NY Option 2 $ 1.19 $ - $ -
Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth ------------------ Assets: Investments at fair value $ 1,369,092 ------------------ Total Assets $ 1,369,092 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------ Total Net Assets $ 1,369,092 ================== Net Assets: Accumulation Units $ 1,133,041 Contracts in payout (annuitization period) $ - Retained in PLIC Variable Accumulation Separate Account by Phoenix Life Insurance Company $ 236,051 ------------------ Total Net Assets $ 1,369,092 ================== ================== Units Outstanding 995,403 ================== Investment shares held 121,197 Investments at cost $ 1,250,259 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ - Freedom Edge(R) $ 1.14 Group Strategic Edge(R) $ 1.11 Phoenix Dimensions(R) Option 1 $ 1.15 Phoenix Dimensions(R) Option 2 $ - Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.14 Phoenix Investor's Edge(R) Option 2 $ - Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.16 Phoenix Spectrum Edge(R) Option 2 $ 1.15 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ 1.15 Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ - The Big Edge Plus(R) $ 1.11 The Phoenix Edge(R)--VA NY Option 1 $ - The Phoenix Edge(R)--VA NY Option 2 $ -
See Notes to Financial Statements SA - 9 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Phoenix-Sanford Phoenix-Sanford Phoenix-Van Bernstein Mid-Cap Bernstein Small- Kampen Comstock Value Series Cap Value Series Series ------------------- ------------------- ------------------- Assets: Investments at fair value $ 17,197,844 $ 8,896,910 $ 11,098,552 ------------------- ------------------- ------------------- Total Assets $ 17,197,844 $ 8,896,910 $ 11,098,552 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- ------------------- ------------------- Total Net Assets $ 17,197,844 $ 8,896,910 $ 11,098,552 =================== =================== =================== Net Assets: Accumulation Units $ 16,852,016 $ 8,776,740 $ 10,867,737 Contracts in payout (annuitization period) $ 345,828 $ 120,170 $ 230,815 ------------------- ------------------- ------------------- Total Net Assets $ 17,197,844 $ 8,896,910 $ 11,098,552 =================== =================== =================== =================== =================== =================== Units Outstanding 8,931,872 4,258,498 7,127,632 =================== =================== =================== Investment shares held 1,355,766 615,190 888,391 Investments at cost $ 14,700,723 $ 7,728,579 $ 10,903,197 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.98 $ 2.02 $ 1.74 Freedom Edge(R) $ 1.71 $ 1.73 $ - Group Strategic Edge(R) $ 1.98 $ 2.23 $ 1.80 Phoenix Dimensions(R) Option 1 $ 1.22 $ - $ 1.21 Phoenix Dimensions(R) Option 2 $ 1.21 $ 1.19 $ - Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Income Choice(R) with GPAF $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.74 $ 1.78 $ 1.28 Phoenix Investor's Edge(R) Option 2 $ 1.73 $ 1.76 $ 1.26 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ 0.88 $ - $ - Phoenix Investor's Edge+ Option 2 $ 0.88 $ - $ - Phoenix Spectrum Edge(R) Option 1 $ 1.73 $ 1.77 $ 1.31 Phoenix Spectrum Edge(R) Option 2 $ 1.72 $ 1.75 $ 1.29 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 2.22 $ 1.93 $ 1.06 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.98 $ 1.95 $ 1.76 The Big Edge Plus(R) $ 1.98 $ 2.23 $ 1.80 The Phoenix Edge(R)--VA NY Option 1 $ 2.32 $ 2.14 $ 1.08 The Phoenix Edge(R)--VA NY Option 2 $ 2.14 $ 2.15 $ 1.06
Phoenix-Van Kampen Equity 500 Index Series ------------------ Assets: Investments at fair value $ 16,164,330 ------------------ Total Assets $ 16,164,330 Liabilities: Payable to Phoenix Life Insurance Company $ 3 ------------------ Total Net Assets $ 16,164,327 ================== Net Assets: Accumulation Units $ 9,441,615 Contracts in payout (annuitization period) $ 6,722,712 ------------------ Total Net Assets $ 16,164,327 ================== ================== Units Outstanding 13,104,753 ================== Investment shares held 1,223,928 Investments at cost $ 13,137,220 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.48 Freedom Edge(R) $ - Group Strategic Edge(R) $ 1.49 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ - Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Income Choice(R) with GPAF $ 1.08 Phoenix Investor's Edge(R) Option 1 $ 1.22 Phoenix Investor's Edge(R) Option 2 $ 1.21 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.25 Phoenix Spectrum Edge(R) Option 2 $ 1.24 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ 1.14 Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.19 The Big Edge Plus(R) $ 1.49 The Phoenix Edge(R)--VA NY Option 1 $ 1.25 The Phoenix Edge(R)--VA NY Option 2 $ 1.02
See Notes to Financial Statements SA - 10 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
PIMCO VIT CommodityReal Return Strategy PIMCO VIT Real PIMCO VIT Total Portfolio - Advisor Return Portfolio - Return Portfolio - Class Advisor Class Advisor Class ------------------- ------------------- ------------------- Assets: Investments at fair value $ 1,086,650 $ 513,075 $ 703,719 ------------------- ------------------- ------------------- Total Assets $ 1,086,650 $ 513,075 $ 703,719 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- ------------------- ------------------- Total Net Assets $ 1,086,650 $ 513,075 $ 703,719 =================== =================== =================== Net Assets: Accumulation Units $ 1,086,650 $ 513,075 $ 703,719 Contracts in payout (annuitization period) $ - $ - $ - ------------------- ------------------- ------------------- Total Net Assets $ 1,086,650 $ 513,075 $ 703,719 =================== =================== =================== =================== =================== =================== Units Outstanding 927,314 466,347 645,109 =================== =================== =================== Investment shares held 81,397 40,817 67,085 Investments at cost $ 985,969 $ 505,427 $ 681,688 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.22 $ 1.10 $ 1.09 Freedom Edge(R) $ 1.15 $ 1.10 $ - Group Strategic Edge(R) $ 1.21 $ 1.09 $ 1.09 Phoenix Dimensions(R) Option 1 $ 1.16 $ 1.11 $ - Phoenix Dimensions(R) Option 2 $ 1.15 $ 1.10 $ - Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 1.15 $ - $ - Phoenix Investor's Edge(R) Option 2 $ 1.15 $ - $ 1.10 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ 1.16 $ - $ - Phoenix Investor's Edge+ Option 2 $ 1.16 $ - $ - Phoenix Spectrum Edge(R) Option 1 $ 1.16 $ - $ 1.11 Phoenix Spectrum Edge(R) Option 2 $ 1.16 $ 1.11 $ 1.11 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 1.15 $ - $ - Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 1.21 $ - $ 1.08 The Big Edge Plus(R) $ 1.21 $ 1.09 $ 1.09 The Phoenix Edge(R)--VA NY Option 1 $ 1.16 $ - $ 1.11 The Phoenix Edge(R)--VA NY Option 2 $ 1.16 $ - $ 1.11
Rydex Variable Trust Inverse Government Long Bond Strategy Fund ------------------ Assets: Investments at fair value $ 563,518 ------------------ Total Assets $ 563,518 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------ Total Net Assets $ 563,518 ================== Net Assets: Accumulation Units $ 563,518 Contracts in payout (annuitization period) $ - ------------------ Total Net Assets $ 563,518 ================== ================== Units Outstanding 654,744 ================== Investment shares held 28,780 Investments at cost $ 701,925 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ - Freedom Edge(R) $ - Group Strategic Edge(R) $ - Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ - Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 0.86 Phoenix Investor's Edge(R) Option 2 $ 0.85 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 0.88 Phoenix Spectrum Edge(R) Option 2 $ 0.87 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ - The Big Edge Plus(R) $ - The Phoenix Edge(R)--VA NY Option 1 $ - The Phoenix Edge(R)--VA NY Option 2 $ 0.87
See Notes to Financial Statements SA - 11 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Rydex Variable Sentinel Variable Rydex Variable Trust Sector Products Bond Trust Nova Fund Rotation Fund Fund ---------------- ----------------- ------------------- Assets: Investments at fair value $ 42,109 $ 771,927 $ 246,934 ---------------- ----------------- ------------------- Total Assets $ 42,109 $ 771,927 $ 246,934 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ---------------- ----------------- ------------------- Total Net Assets $ 42,109 $ 771,927 $ 246,934 ================ ================= =================== Net Assets: Accumulation Units $ 42,109 $ 771,366 $ 246,934 Contracts in payout (annuitization period) $ - $ 561 $ - ---------------- ----------------- ------------------- Total Net Assets $ 42,109 $ 771,927 $ 246,934 ================ ================= =================== ================ ================= =================== Units Outstanding 25,808 409,346 242,162 ================ ================= =================== Investment shares held 4,186 50,354 24,719 Investments at cost $ 32,260 $ 509,427 $ 253,311 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ - $ 1.91 $ - Freedom Edge(R) $ - $ - $ 1.02 Group Strategic Edge(R) $ - $ 1.89 $ - Phoenix Dimensions(R) Option 1 $ - $ - $ 1.02 Phoenix Dimensions(R) Option 2 $ - $ - $ 1.02 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ - $ 1.85 $ 1.02 Phoenix Investor's Edge(R) Option 2 $ 1.62 $ 1.84 $ 1.02 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ - $ 1.02 Phoenix Investor's Edge+ Option 2 $ - $ - $ 1.02 Phoenix Spectrum Edge(R) Option 1 $ 1.67 $ 1.90 $ 1.02 Phoenix Spectrum Edge(R) Option 2 $ - $ 1.89 $ 1.02 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ - $ - Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ - $ 1.88 $ 1.02 The Big Edge Plus(R) $ - $ 1.89 $ 1.02 The Phoenix Edge(R)--VA NY Option 1 $ - $ - $ - The Phoenix Edge(R)--VA NY Option 2 $ - $ 1.89 $ -
Sentinel Variable Products Common Stock Fund ----------------- Assets: Investments at fair value $ 905,821 ----------------- Total Assets $ 905,821 Liabilities: Payable to Phoenix Life Insurance Company $ - ----------------- Total Net Assets $ 905,821 ================= Net Assets: Accumulation Units $ 905,821 Contracts in payout (annuitization period) $ - ----------------- Total Net Assets $ 905,821 ================= ================= Units Outstanding 885,982 ================= Investment shares held 63,255 Investments at cost $ 930,470 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.02 Freedom Edge(R) $ 1.02 Group Strategic Edge(R) $ - Phoenix Dimensions(R) Option 1 $ 1.02 Phoenix Dimensions(R) Option 2 $ 1.02 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.02 Phoenix Investor's Edge(R) Option 2 $ 1.02 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ 1.02 Phoenix Investor's Edge+ Option 2 $ 1.02 Phoenix Spectrum Edge(R) Option 1 $ 1.02 Phoenix Spectrum Edge(R) Option 2 $ 1.02 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.02 The Big Edge Plus(R) $ 1.02 The Phoenix Edge(R)--VA NY Option 1 $ - The Phoenix Edge(R)--VA NY Option 2 $ -
See Notes to Financial Statements SA - 12 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Templeton Sentinel Variable Sentinel Variable Developing Products Mid Cap Products Small Markets Securities Growth Fund Company Fund Fund - Class 1 ----------------- ------------------ -------------------- Assets: Investments at fair value $ 208,404 $ 211,439 $ 1,247,593 ----------------- ------------------ -------------------- Total Assets $ 208,404 $ 211,439 $ 1,247,593 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ----------------- ------------------ -------------------- Total Net Assets $ 208,404 $ 211,439 $ 1,247,593 ================= ================== ==================== Net Assets: Accumulation Units $ 208,404 $ 211,439 $ 1,247,593 Contracts in payout (annuitization period) $ - $ - $ - ----------------- ------------------ -------------------- Total Net Assets $ 208,404 $ 211,439 $ 1,247,593 ================= ================== ==================== ================= ================== ==================== Units Outstanding 193,454 210,438 655,493 ================= ================== ==================== Investment shares held 16,780 15,125 77,155 Investments at cost $ 209,480 $ 237,718 $ 548,797 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ - $ 1.01 $ - Freedom Edge(R) $ - $ 1.00 $ - Group Strategic Edge(R) $ - $ - $ - Phoenix Dimensions(R) Option 1 $ - $ 1.01 $ - Phoenix Dimensions(R) Option 2 $ 1.08 $ 1.00 $ - Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ - $ 1.00 $ - Phoenix Investor's Edge(R) Option 2 $ - $ 1.00 $ - Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ 1.01 $ - Phoenix Investor's Edge+ Option 2 $ - $ 1.00 $ - Phoenix Spectrum Edge(R) Option 1 $ - $ 1.01 $ - Phoenix Spectrum Edge(R) Option 2 $ - $ 1.01 $ - Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ - $ - Templeton Investment Plus $ - $ - $ 1.90 The Big Edge Choice(R)--NY $ - $ 1.00 $ - The Big Edge Plus(R) $ 1.08 $ 1.01 $ - The Phoenix Edge(R)--VA NY Option 1 $ - $ - $ - The Phoenix Edge(R)--VA NY Option 2 $ - $ - $ -
Templeton Developing Markets Securities Fund - Class 2 ------------------ Assets: Investments at fair value $ 3,587,607 ------------------ Total Assets $ 3,587,607 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------ Total Net Assets $ 3,587,607 ================== Net Assets: Accumulation Units $ 3,579,184 Contracts in payout (annuitization period) $ 8,423 ------------------ Total Net Assets $ 3,587,607 ================== ================== Units Outstanding 1,873,862 ================== Investment shares held 224,226 Investments at cost $ 2,595,766 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.85 Freedom Edge(R) $ 1.35 Group Strategic Edge(R) $ 1.78 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ 1.35 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.35 Phoenix Investor's Edge(R) Option 2 $ 1.35 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.36 Phoenix Spectrum Edge(R) Option 2 $ 1.36 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 4.00 The Big Edge Plus(R) $ 1.78 The Phoenix Edge(R)--VA NY Option 1 $ 3.69 The Phoenix Edge(R)--VA NY Option 2 $ 3.51
See Notes to Financial Statements SA - 13 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Templeton Foreign Templeton Foreign Templeton Global Securities Fund - Securities Fund - Asset Allocation Class 1 Class 2 Fund - Class 1 ------------------- ----------------- ------------------- Assets: Investments at fair value $ 25,252,922 $ 7,665,101 $ 40,892,411 ------------------- ----------------- ------------------- Total Assets $ 25,252,922 $ 7,665,101 $ 40,892,411 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- ----------------- ------------------- Total Net Assets $ 25,252,922 $ 7,665,101 $ 40,892,411 =================== ================= =================== Net Assets: Accumulation Units $ 25,220,743 $ 7,605,071 $ 40,564,740 Contracts in payout (annuitization period) $ 32,179 $ 60,030 $ 327,671 ------------------- ----------------- ------------------- Total Net Assets $ 25,252,922 $ 7,665,101 $ 40,892,411 =================== ================= =================== =================== ================= =================== Units Outstanding 6,351,173 3,907,087 7,383,120 =================== ================= =================== Investment shares held 1,227,062 378,523 2,772,367 Investments at cost $ 12,503,075 $ 6,850,248 $ 34,264,405 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ - $ 1.91 $ - Freedom Edge(R) $ - $ - $ - Group Strategic Edge(R) $ - $ 2.06 $ - Phoenix Dimensions(R) Option 1 $ - $ 1.52 $ - Phoenix Dimensions(R) Option 2 $ - $ 1.51 $ - Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ - $ 1.87 $ - Phoenix Investor's Edge(R) Option 2 $ - $ 1.85 $ - Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ - $ - Phoenix Investor's Edge+ Option 2 $ - $ - $ - Phoenix Spectrum Edge(R) Option 1 $ - $ 1.90 $ - Phoenix Spectrum Edge(R) Option 2 $ - $ 1.88 $ - Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ 1.66 $ - Templeton Investment Plus $ 3.98 $ - $ 5.54 The Big Edge Choice(R)--NY $ - $ 1.65 $ - The Big Edge Plus(R) $ - $ 2.06 $ - The Phoenix Edge(R)--VA NY Option 1 $ - $ 1.75 $ - The Phoenix Edge(R)--VA NY Option 2 $ - $ 1.55 $ -
Templeton Global Asset Allocation Fund - Class 2 ----------------- Assets: Investments at fair value $ 1,879,589 ----------------- Total Assets $ 1,879,589 Liabilities: Payable to Phoenix Life Insurance Company $ - ----------------- Total Net Assets $ 1,879,589 ================= Net Assets: Accumulation Units $ 1,856,103 Contracts in payout (annuitization period) $ 23,486 ----------------- Total Net Assets $ 1,879,589 ================= ================= Units Outstanding 858,545 ================= Investment shares held 129,449 Investments at cost $ 2,469,971 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 2.20 Freedom Edge(R) $ - Group Strategic Edge(R) $ 2.24 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ - Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ - Phoenix Investor's Edge(R) Option 2 $ - Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ - Phoenix Spectrum Edge(R) Option 2 $ - Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.97 The Big Edge Plus(R) $ 2.24 The Phoenix Edge(R)--VA NY Option 1 $ 1.73 The Phoenix Edge(R)--VA NY Option 2 $ 1.79
See Notes to Financial Statements SA - 14 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Templeton Global Templeton Growth Templeton Growth Income Securities Securities Fund - Securities Fund - Fund - Class 1 Class 1 Class 2 ------------------- ------------------- ------------------- Assets: Investments at fair value $ 5,163,064 $ 83,367,120 $ 15,021,169 ------------------- ------------------- ------------------- Total Assets $ 5,163,064 $ 83,367,120 $ 15,021,169 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - ------------------- ------------------- ------------------- Total Net Assets $ 5,163,064 $ 83,367,120 $ 15,021,169 =================== =================== =================== Net Assets: Accumulation Units $ 5,098,570 $ 82,658,008 $ 14,897,251 Contracts in payout (annuitization period) $ 64,494 $ 709,112 $ 123,918 ------------------- ------------------- ------------------- Total Net Assets $ 5,163,064 $ 83,367,120 $ 15,021,169 =================== =================== =================== =================== =================== =================== Units Outstanding 1,535,178 14,582,087 8,045,800 =================== =================== =================== Investment shares held 303,710 5,316,781 972,875 Investments at cost $ 3,335,714 $ 68,784,154 $ 12,842,698 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ - $ - $ 2.24 Freedom Edge(R) $ - $ - $ 1.70 Group Strategic Edge(R) $ - $ - $ 2.19 Phoenix Dimensions(R) Option 1 $ - $ - $ 1.32 Phoenix Dimensions(R) Option 2 $ - $ - $ 1.31 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ - $ - $ 1.58 Phoenix Investor's Edge(R) Option 2 $ - $ - $ 1.56 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ - $ 0.96 Phoenix Investor's Edge+ Option 2 $ - $ - $ 0.95 Phoenix Spectrum Edge(R) Option 1 $ - $ - $ 1.59 Phoenix Spectrum Edge(R) Option 2 $ - $ - $ 1.58 Phoenix Spectrum Edge(R) Option 3 $ - $ - $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ - $ - $ - Templeton Investment Plus $ 3.36 $ 5.72 $ - The Big Edge Choice(R)--NY $ - $ - $ 1.83 The Big Edge Plus(R) $ - $ - $ 2.19 The Phoenix Edge(R)--VA NY Option 1 $ - $ - $ 1.63 The Phoenix Edge(R)--VA NY Option 2 $ - $ - $ 1.55
Van Kampen UIF Equity and Income Portfolio - Class II -------------------- Assets: Investments at fair value $ 185,368 -------------------- Total Assets $ 185,368 Liabilities: Payable to Phoenix Life Insurance Company $ - -------------------- Total Net Assets $ 185,368 ==================== Net Assets: Accumulation Units $ 185,368 Contracts in payout (annuitization period) $ - -------------------- Total Net Assets $ 185,368 ==================== ==================== Units Outstanding 175,372 ==================== Investment shares held 12,576 Investments at cost $ 192,345 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 1.06 Freedom Edge(R) $ - Group Strategic Edge(R) $ 1.05 Phoenix Dimensions(R) Option 1 $ - Phoenix Dimensions(R) Option 2 $ - Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ - Phoenix Investor's Edge(R) Option 2 $ 1.08 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ - Phoenix Spectrum Edge(R) Option 2 $ 1.09 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ - Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ - The Big Edge Plus(R) $ 1.05 The Phoenix Edge(R)--VA NY Option 1 $ - The Phoenix Edge(R)--VA NY Option 2 $ -
See Notes to Financial Statements SA - 15 STATEMENTS OF ASSETS AND LIABILITIES December 31, 2007 (Continued)
Wanger Wanger International Small International Select Cap Wanger Select --------------------- -------------------- ------------------- Assets: Investments at fair value $ 10,103,772 $ 66,850,111 $ 8,578,380 --------------------- -------------------- ------------------- Total Assets $ 10,103,772 $ 66,850,111 $ 8,578,380 Liabilities: Payable to Phoenix Life Insurance Company $ - $ - $ - --------------------- -------------------- ------------------- Total Net Assets $ 10,103,772 $ 66,850,111 $ 8,578,380 ===================== ==================== =================== Net Assets: Accumulation Units $ 10,059,549 $ 66,714,365 $ 8,519,556 Contracts in payout (annuitization period) $ 44,223 $ 135,746 $ 58,824 --------------------- -------------------- ------------------- Total Net Assets $ 10,103,772 $ 66,850,111 $ 8,578,380 ===================== ==================== =================== ===================== ==================== =================== Units Outstanding 3,144,139 10,489,836 3,003,137 ===================== ==================== =================== Investment shares held 359,950 1,517,939 305,498 Investments at cost $ 6,489,380 $ 23,408,831 $ 4,448,920 Unit Value Asset Manager Option 1 $ - $ - $ - Asset Manager Option 2 $ - $ - $ - Big Edge $ 1.95 $ 6.93 $ 2.49 Freedom Edge(R) $ - $ 2.93 $ - Group Strategic Edge(R) $ 3.41 $ 7.24 $ 2.99 Phoenix Dimensions(R) Option 1 $ 1.88 $ 1.82 $ 1.44 Phoenix Dimensions(R) Option 2 $ - $ 1.81 $ 1.43 Phoenix Dimensions(R) Option 3 $ - $ - $ - Phoenix Dimensions(R) Option 4 $ - $ - $ - Phoenix Income Choice(R) $ - $ - $ - Phoenix Investor's Edge(R) Option 1 $ 2.71 $ 2.98 $ 1.92 Phoenix Investor's Edge(R) Option 2 $ 2.69 $ 2.95 $ 1.90 Phoenix Investor's Edge(R) Option 3 $ - $ - $ - Phoenix Investor's Edge(R) Option 4 $ - $ - $ - Phoenix Investor's Edge+ Option 1 $ - $ 1.03 $ - Phoenix Investor's Edge+ Option 2 $ - $ 1.03 $ - Phoenix Spectrum Edge(R) Option 1 $ 2.85 $ 3.12 $ 2.01 Phoenix Spectrum Edge(R) Option 2 $ 2.83 $ 3.10 $ 1.99 Phoenix Spectrum Edge(R) Option 3 $ - $ 3.07 $ - Phoenix Spectrum Edge(R) Option 4 $ - $ - $ - Retirement Planner's Edge $ 2.27 $ 2.53 $ 2.07 Templeton Investment Plus $ - $ - $ - The Big Edge Choice(R)--NY $ 3.41 $ 3.92 $ 3.08 The Big Edge Plus(R) $ 3.41 $ 7.24 $ 2.99 The Phoenix Edge(R)--VA NY Option 1 $ 2.44 $ 2.34 $ 2.29 The Phoenix Edge(R)--VA NY Option 2 $ 2.40 $ 2.37 $ 2.20
Wanger U.S. Smaller Companies ------------------- Assets: Investments at fair value $ 57,372,789 ------------------- Total Assets $ 57,372,789 Liabilities: Payable to Phoenix Life Insurance Company $ - ------------------- Total Net Assets $ 57,372,789 =================== Net Assets: Accumulation Units $ 57,227,461 Contracts in payout (annuitization period) $ 145,328 ------------------- Total Net Assets $ 57,372,789 =================== =================== Units Outstanding 14,541,712 =================== Investment shares held 1,582,261 Investments at cost $ 20,770,212 Unit Value Asset Manager Option 1 $ - Asset Manager Option 2 $ - Big Edge $ 4.83 Freedom Edge(R) $ 1.61 Group Strategic Edge(R) $ 4.68 Phoenix Dimensions(R) Option 1 $ 1.21 Phoenix Dimensions(R) Option 2 $ 1.20 Phoenix Dimensions(R) Option 3 $ - Phoenix Dimensions(R) Option 4 $ - Phoenix Income Choice(R) $ - Phoenix Investor's Edge(R) Option 1 $ 1.62 Phoenix Investor's Edge(R) Option 2 $ 1.61 Phoenix Investor's Edge(R) Option 3 $ - Phoenix Investor's Edge(R) Option 4 $ - Phoenix Investor's Edge+ Option 1 $ - Phoenix Investor's Edge+ Option 2 $ - Phoenix Spectrum Edge(R) Option 1 $ 1.70 Phoenix Spectrum Edge(R) Option 2 $ 1.69 Phoenix Spectrum Edge(R) Option 3 $ - Phoenix Spectrum Edge(R) Option 4 $ - Retirement Planner's Edge $ 1.65 Templeton Investment Plus $ - The Big Edge Choice(R)--NY $ 1.88 The Big Edge Plus(R) $ 4.68 The Phoenix Edge(R)--VA NY Option 1 $ 1.83 The Phoenix Edge(R)--VA NY Option 2 $ 1.82
See Notes to Financial Statements SA - 16 STATEMENTS OF OPERATIONS For the period ended December 31, 2007
AIM V.I. Capital AIM V.I. Mid Cap Appreciation Fund - AIM V.I. Core Equity Core Equity Fund - Class I Fund - Class I Class I ------------------- --------------------- -------------------- Income: Dividends $ - $ 12,593 $ 3,727 Expenses: Mortality and expense fees 46,734 14,819 22,943 Administrative fees 2,761 826 605 ------------------- --------------------- -------------------- Net investment income (loss) (49,495) (3,052) (19,821) ------------------- --------------------- -------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 156,189 34,380 29,168 Realized gain distributions - - 24,310 ------------------- --------------------- -------------------- Realized gain (loss) 156,189 34,380 53,478 ------------------- --------------------- -------------------- Change in unrealized appreciation (depreciation) during the year 265,367 50,344 117,045 ------------------- --------------------- -------------------- Net increase (decrease) in net assets from operations $ 372,061 $ 81,672 $ 150,702 =================== ===================== ==================== DWS Equity 500 Federated Fund for Federated High Index Fund VIP - U.S. Government Income Bond Fund II Class A Securities II - Primary Shares ------------------- --------------------- -------------------- Income: Dividends $ 128,074 $ 855,273 $ 421,022 Expenses: Mortality and expense fees 110,611 232,651 63,537 Administrative fees 4,689 13,031 2,686 ------------------- --------------------- -------------------- Net investment income (loss) 12,774 609,591 354,799 ------------------- --------------------- -------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 347,430 4,518 4,523 Realized gain distributions - - - ------------------- --------------------- -------------------- Realized gain (loss) 347,430 4,518 4,523 ------------------- --------------------- -------------------- Change in unrealized appreciation (depreciation) during the year (34,652) 262,582 (242,538) ------------------- --------------------- -------------------- Net increase (decrease) in net assets from operations $ 325,552 $ 876,691 $ 116,784 =================== ===================== ====================
Alger American Leveraged AllCap Portfolio - Class O -------------------- Income: Dividends $ - Expenses: Mortality and expense fees 46,576 Administrative fees 1,539 -------------------- Net investment income (loss) (48,115) -------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 362,865 Realized gain distributions - -------------------- Realized gain (loss) 362,865 -------------------- Change in unrealized appreciation (depreciation) during the year 749,855 -------------------- Net increase (decrease) in net assets from operations $ 1,064,605 ==================== Fidelity VIP Contrafund(R) Portfolio - Service Class -------------------- Income: Dividends $ 245,553 Expenses: Mortality and expense fees 372,619 Administrative fees 10,169 -------------------- Net investment income (loss) (137,235) -------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 406,458 Realized gain distributions 7,342,655 -------------------- Realized gain (loss) 7,749,113 -------------------- Change in unrealized appreciation (depreciation) during the year (3,174,397) -------------------- Net increase (decrease) in net assets from operations $ 4,437,481 ====================
See Notes to Financial Statements SA - 17 STATEMENTS OF OPERATIONS For the period ended December 31, 2007 (Continued)
Fidelity VIP Growth Fidelity VIP Opportunities Fidelity VIP Growth Investment Grade Portfolio - Service Portfolio - Service Bond Portfolio - Class Class Service Class ------------------- ------------------- ------------------- Income: Dividends $ - $ 28,302 $ 2,720 Expenses: Mortality and expense fees 56,223 54,109 19,945 Administrative fees 3,455 2,311 1,576 ------------------- ------------------- ------------------- Net investment income (loss) (59,678) (28,118) (18,801) ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 69,120 266,851 15,567 Realized gain distributions - 4,162 - ------------------- ------------------- ------------------- Realized gain (loss) 69,120 271,013 15,567 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year 807,745 728,122 53,631 ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 817,187 $ 971,017 $ 50,397 =================== =================== =================== Lord Abbett Lazard Retirement Lord Abbett Bond- Growth and Income Small Cap Portfolio Debenture Portfolio Portfolio - Service Shares - Class VC - Class VC ------------------- ------------------- ------------------- Income: Dividends $ - $ 175,748 $ 144,026 Expenses: Mortality and expense fees 6,229 38,710 152,198 Administrative fees 235 2,348 8,512 ------------------- ------------------- ------------------- Net investment income (loss) (6,464) 134,690 (16,684) ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 11,062 15,119 139,928 Realized gain distributions 182,940 9,506 794,224 ------------------- ------------------- ------------------- Realized gain (loss) 194,002 24,625 934,152 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (222,620) (13,672) (686,602) ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ (35,082) $ 145,643 $ 230,866 =================== =================== ===================
Franklin Income Securities Fund - Class 2 ------------------- Income: Dividends $ 110,403 Expenses: Mortality and expense fees 47,318 Administrative fees 3,176 ------------------- Net investment income (loss) 59,909 ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 2,412 Realized gain distributions 20,475 ------------------- Realized gain (loss) 22,887 ------------------- Change in unrealized appreciation (depreciation) during the year (101,998) ------------------- Net increase (decrease) in net assets from operations $ (19,202) =================== Lord Abbett Mid- Cap Value Portfolio - Class VC ------------------- Income: Dividends $ 13,872 Expenses: Mortality and expense fees 43,797 Administrative fees 933 ------------------- Net investment income (loss) (30,858) ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 47,388 Realized gain distributions 407,799 ------------------- Realized gain (loss) 455,187 ------------------- Change in unrealized appreciation (depreciation) during the year (433,515) ------------------- Net increase (decrease) in net assets from operations $ (9,186) ===================
See Notes to Financial Statements SA - 18 STATEMENTS OF OPERATIONS For the period ended December 31, 2007 (Continued)
Mutual Shares Neuberger Berman Neuberger Berman Securities Fund - AMT Fasciano AMT Guardian Class 2 Portfolio - S Class Portfolio - S Class ------------------- ------------------- ------------------- Income: Dividends $ 229,637 $ - $ 2,734 Expenses: Mortality and expense fees 207,021 178 7,987 Administrative fees 6,548 18 597 ------------------- ------------------- ------------------- Net investment income (loss) 16,068 (196) (5,850) ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 62,280 1,780 (839) Realized gain distributions 562,225 39 - ------------------- ------------------- ------------------- Realized gain (loss) 624,505 1,819 (839) ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (371,002) (397) 14,022 ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 269,571 $ 1,226 $ 7,333 =================== =================== =================== Oppenheimer Oppenheimer Main Global Securities Street Small Cap Fund/VA - Service Fund/VA - Service Phoenix Capital Shares Shares Growth Series ------------------- ------------------- ------------------- Income: Dividends $ 1,417 $ 275 $ 358,384 Expenses: Mortality and expense fees 3,160 6,973 1,758,971 Administrative fees 104 492 9,688 ------------------- ------------------- ------------------- Net investment income (loss) (1,847) (7,190) (1,410,275) ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares (228) (6,917) 2,854,659 Realized gain distributions 5,925 5,951 - ------------------- ------------------- ------------------- Realized gain (loss) 5,697 (966) 2,854,659 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (2,802) (61,605) 11,590,175 ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 1,048 $ (69,761) $ 13,034,559 =================== =================== ===================
Oppenheimer Capital Appreciation Fund/VA - Service Shares ------------------- Income: Dividends $ 2 Expenses: Mortality and expense fees 485 Administrative fees 20 ------------------- Net investment income (loss) (503) ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 134 Realized gain distributions - ------------------- Realized gain (loss) 134 ------------------- Change in unrealized appreciation (depreciation) during the year 2,972 ------------------- Net increase (decrease) in net assets from operations $ 2,603 =================== Phoenix Growth and Income Series ------------------- Income: Dividends $ 146,842 Expenses: Mortality and expense fees 203,957 Administrative fees 9,523 ------------------- Net investment income (loss) (66,638) ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 766,389 Realized gain distributions 366,399 ------------------- Realized gain (loss) 1,132,788 ------------------- Change in unrealized appreciation (depreciation) during the year (215,333) ------------------- Net increase (decrease) in net assets from operations $ 850,817 ===================
See Notes to Financial Statements SA - 19 STATEMENTS OF OPERATIONS For the period ended December 31, 2007 (Continued)
Phoenix Multi- Phoenix Mid-Cap Phoenix Money Sector Fixed Growth Series Market Series Income Series ------------------- -------------------- ------------------- Income: Dividends $ - $ 1,108,688 $ 1,934,831 Expenses: Mortality and expense fees 192,288 292,875 466,617 Administrative fees 4,787 8,084 10,354 ------------------- -------------------- ------------------- Net investment income (loss) (197,075) 807,729 1,457,860 ------------------- -------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 340,610 - (90,199) Realized gain distributions - - - ------------------- -------------------- ------------------- Realized gain (loss) 340,610 - (90,199) ------------------- -------------------- ------------------- Change in unrealized appreciation (depreciation) during the year 2,718,372 - (469,346) ------------------- -------------------- ------------------- Net increase (decrease) in net assets from operations $ 2,861,907 $ 807,729 $ 898,315 =================== ==================== =================== Phoenix-Alger Phoenix Strategic Phoenix-Aberdeen Small-Cap Growth Allocation Series International Series Series ------------------- -------------------- ------------------- Income: Dividends $ 3,722,675 $ 976,109 $ - Expenses: Mortality and expense fees 1,806,940 809,382 64,874 Administrative fees 8,123 16,901 2,122 ------------------- -------------------- ------------------- Net investment income (loss) 1,907,612 149,826 (66,996) ------------------- -------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 1,562,882 3,402,617 87,189 Realized gain distributions 7,643,294 3,209,041 937,861 ------------------- -------------------- ------------------- Realized gain (loss) 9,206,176 6,611,658 1,025,050 ------------------- -------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (4,050,158) 1,367,397 (237,518) ------------------- -------------------- ------------------- Net increase (decrease) in net assets from operations $ 7,063,630 $ 8,128,881 $ 720,536 =================== ==================== ===================
Phoenix Multi- Sector Short Term Bond Series ------------------- Income: Dividends $ 197,491 Expenses: Mortality and expense fees 48,527 Administrative fees 1,927 ------------------- Net investment income (loss) 147,037 ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 320 Realized gain distributions - ------------------- Realized gain (loss) 320 ------------------- Change in unrealized appreciation (depreciation) during the year (60,113) ------------------- Net increase (decrease) in net assets from operations $ 87,244 =================== Phoenix-Duff & Phelps Real Estate Securities Series ------------------- Income: Dividends $ 276,548 Expenses: Mortality and expense fees 293,180 Administrative fees 7,268 ------------------- Net investment income (loss) (23,900) ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 3,092,023 Realized gain distributions 1,750,425 ------------------- Realized gain (loss) 4,842,448 ------------------- Change in unrealized appreciation (depreciation) during the year (8,593,787) ------------------- Net increase (decrease) in net assets from operations $ (3,775,239) ===================
See Notes to Financial Statements SA - 20 STATEMENTS OF OPERATIONS For the period ended December 31, 2007 (Continued)
Phoenix-S&P Phoenix-S&P Phoenix-S&P Dynamic Asset Dynamic Asset Dynamic Asset Allocation Series: Allocation Series: Allocation Series: Aggressive Growth Growth Moderate ------------------- ------------------- ------------------- Income: Dividends $ 4,252 $ 3,712 $ 12,761 Expenses: Mortality and expense fees 3,555 1,371 6,087 Administrative fees 283 45 284 ------------------- ------------------- ------------------- Net investment income (loss) 414 2,296 6,390 ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 314 83 1,832 Realized gain distributions 3,466 1,930 8,597 ------------------- ------------------- ------------------- Realized gain (loss) 3,780 2,013 10,429 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (3,444) (25) 13,533 ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 750 $ 4,284 $ 30,352 =================== =================== =================== Phoenix-Sanford Phoenix-Sanford Phoenix-Van Bernstein Mid-Cap Bernstein Small- Kampen Comstock Value Series Cap Value Series Series ------------------- ------------------- ------------------- Income: Dividends $ 27,803 $ - $ 198,428 Expenses: Mortality and expense fees 251,232 133,170 153,701 Administrative fees 7,866 4,778 5,907 ------------------- ------------------- ------------------- Net investment income (loss) (231,295) (137,948) 38,820 ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 526,108 250,125 86,927 Realized gain distributions 2,196,594 1,252,004 613,084 ------------------- ------------------- ------------------- Realized gain (loss) 2,722,702 1,502,129 700,011 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (2,182,656) (1,619,664) (1,081,151) ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 308,751 $ (255,483) $ (342,320) =================== =================== ===================
Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth ------------------- Income: Dividends $ 21,057 Expenses: Mortality and expense fees 15,686 Administrative fees 1,231 ------------------- Net investment income (loss) 4,140 ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 46,099 Realized gain distributions 12,893 ------------------- Realized gain (loss) 58,992 ------------------- Change in unrealized appreciation (depreciation) during the year 27,089 ------------------- Net increase (decrease) in net assets from operations $ 90,221 =================== Phoenix-Van Kampen Equity 500 Index Series ------------------- Income: Dividends $ 227,474 Expenses: Mortality and expense fees 302,425 Administrative fees 4,915 ------------------- Net investment income (loss) (79,866) ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 860,515 Realized gain distributions - ------------------- Realized gain (loss) 860,515 ------------------- Change in unrealized appreciation (depreciation) during the year (172,952) ------------------- Net increase (decrease) in net assets from operations $ 607,697 ===================
See Notes to Financial Statements SA - 21 STATEMENTS OF OPERATIONS For the period ended December 31, 2007 (Continued)
PIMCO VIT CommodityReal Return Strategy PIMCO VIT Real PIMCO VIT Total Portfolio - Advisor Return Portfolio - Return Portfolio - Class Advisor Class Advisor Class ------------------- ------------------- ------------------- Income: Dividends $ 29,810 $ 12,416 $ 21,095 Expenses: Mortality and expense fees 6,362 3,154 5,261 Administrative fees 395 158 126 ------------------- ------------------- ------------------- Net investment income (loss) 23,053 9,104 15,708 ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 4,285 (211) 1,586 Realized gain distributions - 1,183 - ------------------- ------------------- ------------------- Realized gain (loss) 4,285 972 1,586 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year 105,173 13,847 23,840 ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 132,511 $ 23,923 $ 41,134 =================== =================== =================== Rydex Variable Sentinel Variable Rydex Variable Trust Sector Products Bond Trust Nova Fund Rotation Fund Fund ------------------- ------------------- ------------------- Income: Dividends $ 747 $ - $ 9,674 Expenses: Mortality and expense fees 873 10,146 423 Administrative fees 70 126 27 ------------------- ------------------- ------------------- Net investment income (loss) (196) (10,272) 9,224 ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 4,026 41,629 15 Realized gain distributions - 58,512 - ------------------- ------------------- ------------------- Realized gain (loss) 4,026 100,141 15 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (4,081) 62,755 (6,378) ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ (251) $ 152,624 $ 2,861 =================== =================== ===================
Rydex Variable Trust Inverse Government Long Bond Strategy Fund ------------------- Income: Dividends $ 27,575 Expenses: Mortality and expense fees 10,681 Administrative fees 902 ------------------- Net investment income (loss) 15,992 ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares (30,646) Realized gain distributions - ------------------- Realized gain (loss) (30,646) ------------------- Change in unrealized appreciation (depreciation) during the year (17,446) ------------------- Net increase (decrease) in net assets from operations $ (32,100) =================== Sentinel Variable Products Common Stock Fund ------------------- Income: Dividends $ 9,872 Expenses: Mortality and expense fees 1,522 Administrative fees 113 ------------------- Net investment income (loss) 8,237 ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares (601) Realized gain distributions 16,706 ------------------- Realized gain (loss) 16,105 ------------------- Change in unrealized appreciation (depreciation) during the year (24,649) ------------------- Net increase (decrease) in net assets from operations $ (307) ===================
See Notes to Financial Statements SA - 22 STATEMENTS OF OPERATIONS For the period ended December 31, 2007 (Continued)
Templeton Sentinel Variable Sentinel Variable Developing Products Mid Cap Products Small Markets Securities Growth Fund Company Fund Fund - Class 1 ------------------- ------------------- ------------------- Income: Dividends $ - $ 1,254 $ 28,241 Expenses: Mortality and expense fees 618 497 14,512 Administrative fees 24 40 1,444 ------------------- ------------------- ------------------- Net investment income (loss) (642) 717 12,285 ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares (2) (77) 17,581 Realized gain distributions - 20,161 88,804 ------------------- ------------------- ------------------- Realized gain (loss) (2) 20,084 106,385 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year (1,076) (26,278) 156,619 ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ (1,720) $ (5,477) $ 275,289 =================== =================== =================== Templeton Foreign Templeton Foreign Templeton Global Securities Fund - Securities Fund - Asset Allocation Class 1 Class 2 Fund - Class 1 ------------------- ------------------- ------------------- Income: Dividends $ 562,858 $ 154,052 $ 7,355,777 Expenses: Mortality and expense fees 326,785 95,906 530,226 Administrative fees 32,512 3,090 52,752 ------------------- ------------------- ------------------- Net investment income (loss) 203,561 55,056 6,772,799 ------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 1,398,828 104,891 369,803 Realized gain distributions 1,165,468 351,374 9,524,268 ------------------- ------------------- ------------------- Realized gain (loss) 2,564,296 456,265 9,894,071 ------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year 610,992 474,576 (13,114,617) ------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 3,378,849 $ 985,897 $ 3,552,253 =================== =================== ===================
Templeton Developing Markets Securities Fund - Class 2 ------------------- Income: Dividends $ 55,656 Expenses: Mortality and expense fees 34,411 Administrative fees 564 ------------------- Net investment income (loss) 20,681 ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 951 Realized gain distributions 191,244 ------------------- Realized gain (loss) 192,195 ------------------- Change in unrealized appreciation (depreciation) during the year 404,925 ------------------- Net increase (decrease) in net assets from operations $ 617,801 =================== Templeton Global Asset Allocation Fund - Class 2 ------------------- Income: Dividends $ 328,465 Expenses: Mortality and expense fees 23,878 Administrative fees 287 ------------------- Net investment income (loss) 304,300 ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 24,947 Realized gain distributions 430,704 ------------------- Realized gain (loss) 455,651 ------------------- Change in unrealized appreciation (depreciation) during the year (601,953) ------------------- Net increase (decrease) in net assets from operations $ 157,998 ===================
See Notes to Financial Statements SA - 23 STATEMENTS OF OPERATIONS For the period ended December 31, 2007 (Continued)
Templeton Global Templeton Growth Templeton Growth Income Securities Securities Fund - Securities Fund - Fund - Class 1 Class 1 Class 2 -------------------- ------------------- ------------------- Income: Dividends $ 137,439 $ 1,346,678 $ 190,338 Expenses: Mortality and expense fees 62,354 1,144,781 182,512 Administrative fees 6,204 113,895 4,848 -------------------- ------------------- ------------------- Net investment income (loss) 68,881 88,002 2,978 -------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 28,946 1,627,957 170,698 Realized gain distributions - 3,790,507 607,311 -------------------- ------------------- ------------------- Realized gain (loss) 28,946 5,418,464 778,009 -------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year 359,071 (4,213,084) (666,931) -------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 456,898 $ 1,293,382 $ 114,056 ==================== =================== =================== Wanger Wanger International Small International Select Cap Wanger Select -------------------- ------------------- ------------------- Income: Dividends $ 67,490 $ 610,584 $ - Expenses: Mortality and expense fees 117,528 867,340 113,632 Administrative fees 1,637 8,437 1,285 -------------------- ------------------- ------------------- Net investment income (loss) (51,675) (265,193) (114,917) -------------------- ------------------- ------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 102,206 3,906,277 133,970 Realized gain distributions 1,083,907 5,498,079 146,696 -------------------- ------------------- ------------------- Realized gain (loss) 1,186,113 9,404,356 280,666 -------------------- ------------------- ------------------- Change in unrealized appreciation (depreciation) during the year 557,020 450,237 425,869 -------------------- ------------------- ------------------- Net increase (decrease) in net assets from operations $ 1,691,458 $ 9,589,400 $ 591,618 ==================== =================== ===================
Van Kampen UIF Equity and Income Portfolio - Class II -------------------- Income: Dividends $ 1,919 Expenses: Mortality and expense fees 1,471 Administrative fees 9 -------------------- Net investment income (loss) 439 -------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 1,395 Realized gain distributions 2,702 -------------------- Realized gain (loss) 4,097 -------------------- Change in unrealized appreciation (depreciation) during the year (9,857) -------------------- Net increase (decrease) in net assets from operations $ (5,321) ==================== Wanger U.S. Smaller Companies -------------------- Income: Dividends $ - Expenses: Mortality and expense fees 823,962 Administrative fees 9,808 -------------------- Net investment income (loss) (833,770) -------------------- Realized gains (losses) on investments Realized gain (loss) on sale of fund shares 8,740,359 Realized gain distributions 3,588,229 -------------------- Realized gain (loss) 12,328,588 -------------------- Change in unrealized appreciation (depreciation) during the year (8,388,400) -------------------- Net increase (decrease) in net assets from operations $ 3,106,418 ====================
See Notes to Financial Statements SA - 24 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006
AIM V.I. Capital Appreciation Fund - Class I -------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (49,495) $ (40,993) Realized gains (losses) 156,189 10,455 Unrealized appreciation (depreciation) during the year 265,367 202,357 ------------------- ------------------- Net increase (decrease) in net assets from operations 372,061 171,819 ------------------- ------------------- Contract transactions: Payments received from contract owners 160,321 556,942 Transfers between Investment Options (including Guaranteed Interest Account), net (286,022) 805,257 Transfers for contract benefits and terminations (619,326) (579,267) Contract maintenance charges (10,213) (6,807) Net change to contracts in payout period - (5) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (755,240) 776,120 ------------------- ------------------- Total increase (decrease) in net assets (383,179) 947,939 Net assets at beginning of period 3,772,248 2,824,309 ------------------- ------------------- Net assets at end of period $ 3,389,069 $ 3,772,248 =================== ===================
AIM V.I. Core Equity Fund - Class I --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (3,052) $ (4,846) Realized gains (losses) 34,380 (3,453) Unrealized appreciation (depreciation) during the year 50,344 105,945 ------------------- ------------------- Net increase (decrease) in net assets from operations 81,672 97,646 ------------------- ------------------- Contract transactions: Payments received from contract owners 22,153 14,499 Transfers between Investment Options (including Guaranteed Interest Account), net (109,901) 1,333,415 Transfers for contract benefits and terminations (168,826) (143,242) Contract maintenance charges (2,496) (1,615) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (259,070) 1,203,057 ------------------- ------------------- Total increase (decrease) in net assets (177,398) 1,300,703 Net assets at beginning of period 1,300,703 - ------------------- ------------------- Net assets at end of period $ 1,123,305 $ 1,300,703 =================== ===================
See Notes to Financial Statements SA - 25 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
AIM V.I. Mid Cap Core Equity Fund - Class I ------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (19,821) $ (54,576) Realized gains (losses) 53,478 846,571 Unrealized appreciation (depreciation) during the year 117,045 (74,330) ------------------- ------------------- Net increase (decrease) in net assets from operations 150,702 717,665 ------------------- ------------------- Contract transactions: Payments received from contract owners 16,731 23,625 Transfers between Investment Options (including Guaranteed Interest Account), net (196,088) (180,735) Transfers for contract benefits and terminations (240,724) (469,083) Contract maintenance charges (1,961) (1,458) Net change to contracts in payout period (136) (1,454) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (422,178) (629,105) Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - (4,768,588) ------------------- ------------------- Total increase (decrease) in net assets (271,476) (4,680,028) Net assets at beginning of period 1,945,862 6,625,890 ------------------- ------------------- Net assets at end of period $ 1,674,386 $ 1,945,862 =================== ===================
Alger American Leveraged AllCap Portfolio - Class O --------------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (48,115) $ (47,370) Realized gains (losses) 362,865 185,367 Unrealized appreciation (depreciation) during the year 749,855 453,258 ------------------- ------------------- Net increase (decrease) in net assets from operations 1,064,605 591,255 ------------------- ------------------- Contract transactions: Payments received from contract owners 98,769 106,591 Transfers between Investment Options (including Guaranteed Interest Account), net (227,766) 2,188 Transfers for contract benefits and terminations (639,729) (767,714) Contract maintenance charges (3,530) (7,867) Net change to contracts in payout period (1,226) (526) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (773,482) (667,328) Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - - ------------------- ------------------- Total increase (decrease) in net assets 291,123 (76,073) Net assets at beginning of period 3,713,953 3,790,026 ------------------- ------------------- Net assets at end of period $ 4,005,076 $ 3,713,953 =================== ===================
See Notes to Financial Statements SA - 26 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
DWS Equity 500 Index Fund VIP - Class A --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 12,774 $ (14,683) Realized gains (losses) 347,430 437,841 Unrealized appreciation (depreciation) during the year (34,652) 691,245 ------------------- ------------------- Net increase (decrease) in net assets from operations 325,552 1,114,403 ------------------- ------------------- Contract transactions: Payments received from contract owners 447,991 962,420 Transfers between Investment Options (including Guaranteed Interest Account), net 776,916 815,273 Transfers for contract benefits and terminations (1,408,806) (2,948,415) Contract maintenance charges (13,668) (24,865) Net change to contracts in payout period - (338) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (197,567) (1,195,925) ------------------- ------------------- Total increase (decrease) in net assets 127,985 (81,522) Net assets at beginning of period 8,407,036 8,488,558 ------------------- ------------------- Net assets at end of period $ 8,535,021 $ 8,407,036 =================== ===================
Federated Fund for U.S. Government Securities II --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 609,591 $ 523,953 Realized gains (losses) 4,518 19,352 Unrealized appreciation (depreciation) during the year 262,582 4,262 ------------------- ------------------- Net increase (decrease) in net assets from operations 876,691 547,567 ------------------- ------------------- Contract transactions: Payments received from contract owners 591,147 2,187,558 Transfers between Investment Options (including Guaranteed Interest Account), net 126,737 1,904,019 Transfers for contract benefits and terminations (3,591,964) (3,955,482) Contract maintenance charges (45,746) (32,186) Net change to contracts in payout period 3,146 (11,845) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (2,916,680) 92,064 ------------------- ------------------- Total increase (decrease) in net assets (2,039,989) 639,631 Net assets at beginning of period 19,759,709 19,120,078 ------------------- ------------------- Net assets at end of period $ 17,719,720 $ 19,759,709 =================== ===================
See Notes to Financial Statements SA - 27 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Federated High Income Bond Fund II - Primary Shares --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 354,799 $ 403,294 Realized gains (losses) 4,523 15,273 Unrealized appreciation (depreciation) during the year (242,538) 76,503 ------------------- ------------------- Net increase (decrease) in net assets from operations 116,784 495,070 ------------------- ------------------- Contract transactions: Payments received from contract owners 98,641 91,516 Transfers between Investment Options (including Guaranteed Interest Account), net (114,648) 488,045 Transfers for contract benefits and terminations (1,226,056) (1,232,563) Contract maintenance charges (10,973) (7,273) Net change to contracts in payout period (3,068) (1,533) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (1,256,104) (661,808) ------------------- ------------------- Total increase (decrease) in net assets (1,139,320) (166,738) Net assets at beginning of period 5,540,736 5,707,474 ------------------- ------------------- Net assets at end of period $ 4,401,416 $ 5,540,736 =================== ===================
Fidelity VIP Contrafund(R) Portfolio - Service Class ---------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (137,235) $ (44,407) Realized gains (losses) 7,749,113 2,586,740 Unrealized appreciation (depreciation) during the year (3,174,397) 181,231 ------------------- ------------------- Net increase (decrease) in net assets from operations 4,437,481 2,723,564 ------------------- ------------------- Contract transactions: Payments received from contract owners 568,547 697,648 Transfers between Investment Options (including Guaranteed Interest Account), net 993,865 5,861,823 Transfers for contract benefits and terminations (5,160,549) (5,030,374) Contract maintenance charges (27,139) (26,980) Net change to contracts in payout period (1,577) (1,484) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (3,626,853) 1,500,633 ------------------- ------------------- Total increase (decrease) in net assets 810,628 4,224,197 Net assets at beginning of period 29,531,457 25,307,260 ------------------- ------------------- Net assets at end of period $ 30,342,085 $ 29,531,457 =================== ===================
See Notes to Financial Statements SA - 28 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Fidelity VIP Growth Opportunities Portfolio - Service Class --------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (59,678) $ (19,037) Realized gains (losses) 69,120 22,000 Unrealized appreciation (depreciation) during the year 807,745 141,345 ------------------- ------------------- Net increase (decrease) in net assets from operations 817,187 144,308 ------------------- ------------------- Contract transactions: Payments received from contract owners 1,726,595 674,786 Transfers between Investment Options (including Guaranteed Interest Account), net 1,175,134 647,540 Transfers for contract benefits and terminations (953,541) (401,156) Contract maintenance charges (9,895) (5,087) Net change to contracts in payout period 43 49 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 1,938,336 916,132 ------------------- ------------------- Total increase (decrease) in net assets 2,755,523 1,060,440 Net assets at beginning of period 2,941,211 1,880,771 ------------------- ------------------- Net assets at end of period $ 5,696,734 $ 2,941,211 =================== ===================
Fidelity VIP Growth Portfolio - Service Class --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (28,118) $ (48,344) Realized gains (losses) 271,013 287,087 Unrealized appreciation (depreciation) during the year 728,122 7,793 ------------------- ------------------- Net increase (decrease) in net assets from operations 971,017 246,536 ------------------- ------------------- Contract transactions: Payments received from contract owners 113,218 108,897 Transfers between Investment Options (including Guaranteed Interest Account), net 358,258 (567,240) Transfers for contract benefits and terminations (750,174) (1,158,488) Contract maintenance charges (7,374) (9,986) Net change to contracts in payout period 8,658 (1,272) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (277,414) (1,628,089) ------------------- ------------------- Total increase (decrease) in net assets 693,603 (1,381,553) Net assets at beginning of period 4,340,178 5,721,731 ------------------- ------------------- Net assets at end of period $ 5,033,781 $ 4,340,178 =================== ===================
See Notes to Financial Statements SA - 29 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Fidelity VIP Investment Grade Bond Portfolio - Service Class -------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (18,801) $ - Realized gains (losses) 15,567 - Unrealized appreciation (depreciation) during the year 53,631 - ------------------- ------------------- Net increase (decrease) in net assets from operations 50,397 - ------------------- ------------------- Contract transactions: Payments received from contract owners 1,488,493 - Transfers between Investment Options (including Guaranteed Interest Account), net 1,227,865 - Transfers for contract benefits and terminations (516,563) - Contract maintenance charges (1,911) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 2,197,884 - ------------------- ------------------- Total increase (decrease) in net assets 2,248,281 - Net assets at beginning of period - - ------------------- ------------------- Net assets at end of period $ 2,248,281 $ - =================== ===================
Franklin Income Securities Fund - Class 2 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 59,909 $ (2,407) Realized gains (losses) 22,887 2,935 Unrealized appreciation (depreciation) during the year (101,998) 44,481 ------------------- ------------------- Net increase (decrease) in net assets from operations (19,202) 45,009 ------------------- ------------------- Contract transactions: Payments received from contract owners 2,748,163 1,154,515 Transfers between Investment Options (including Guaranteed Interest Account), net 2,203,038 380,830 Transfers for contract benefits and terminations (364,045) (219,329) Contract maintenance charges (3,310) (166) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 4,583,846 1,315,850 ------------------- ------------------- Total increase (decrease) in net assets 4,564,644 1,360,859 Net assets at beginning of period 1,360,859 - ------------------- ------------------- Net assets at end of period $ 5,925,503 $ 1,360,859 =================== ===================
See Notes to Financial Statements SA - 30 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Lazard Retirement Small Cap Portfolio - Service Shares --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (6,464) $ (58,368) Realized gains (losses) 194,002 1,198,795 Unrealized appreciation (depreciation) during the year (222,620) (167,692) ------------------- ------------------- Net increase (decrease) in net assets from operations (35,082) 972,735 ------------------- ------------------- Contract transactions: Payments received from contract owners 4,947 17,682 Transfers between Investment Options (including Guaranteed Interest Account), net (54,593) 21,958 Transfers for contract benefits and terminations (59,023) (221,513) Contract maintenance charges (1,168) (1,798) Net change to contracts in payout period (82) (93) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (109,919) (183,764) Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - (5,552,133) ------------------- ------------------- Total increase (decrease) in net assets (145,001) (4,763,162) Net assets at beginning of period 557,877 5,321,039 ------------------- ------------------- Net assets at end of period $ 412,876 $ 557,877 =================== ===================
Lord Abbett Bond-Debenture Portfolio - Class VC --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 134,690 $ 118,130 Realized gains (losses) 24,625 301,862 Unrealized appreciation (depreciation) during the year (13,672) 125,097 ------------------- ------------------- Net increase (decrease) in net assets from operations 145,643 545,089 ------------------- ------------------- Contract transactions: Payments received from contract owners 82,298 101,998 Transfers between Investment Options (including Guaranteed Interest Account), net 254,196 420,440 Transfers for contract benefits and terminations (921,752) (738,055) Contract maintenance charges (5,574) (3,728) Net change to contracts in payout period (452) 14 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (591,284) (219,331) Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - (2,938,852) ------------------- ------------------- Total increase (decrease) in net assets (445,641) (2,613,094) Net assets at beginning of period 3,327,965 5,941,059 ------------------- ------------------- Net assets at end of period $ 2,882,324 $ 3,327,965 =================== ===================
See Notes to Financial Statements SA - 31 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Lord Abbett Growth and Income Portfolio - Class VC ----------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (16,684) $ (5,281) Realized gains (losses) 934,152 432,896 Unrealized appreciation (depreciation) during the year (686,602) 1,152,821 ------------------- ------------------- Net increase (decrease) in net assets from operations 230,866 1,580,436 ------------------- ------------------- Contract transactions: Payments received from contract owners 1,598,958 1,062,649 Transfers between Investment Options (including Guaranteed Interest Account), net 261,845 1,490,094 Transfers for contract benefits and terminations (2,341,340) (2,264,268) Contract maintenance charges (21,215) (18,075) Net change to contracts in payout period (590) (560) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (502,342) 269,840 Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - - ------------------- ------------------- Total increase (decrease) in net assets (271,476) 1,850,276 Net assets at beginning of period 11,691,454 9,841,178 ------------------- ------------------- Net assets at end of period $ 11,419,978 $ 11,691,454 =================== ===================
Lord Abbett Mid-Cap Value Portfolio - Class VC --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (30,858) $ (49,670) Realized gains (losses) 455,187 639,735 Unrealized appreciation (depreciation) during the year (433,515) (25,256) ------------------- ------------------- Net increase (decrease) in net assets from operations (9,186) 564,809 ------------------- ------------------- Contract transactions: Payments received from contract owners 70,160 71,313 Transfers between Investment Options (including Guaranteed Interest Account), net (143,867) (558,562) Transfers for contract benefits and terminations (451,437) (988,511) Contract maintenance charges (3,680) (5,113) Net change to contracts in payout period (45) (29) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (528,869) (1,480,902) Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - (1,789,816) ------------------- ------------------- Total increase (decrease) in net assets (538,055) (2,705,909) Net assets at beginning of period 3,559,242 6,265,151 ------------------- ------------------- Net assets at end of period $ 3,021,187 $ 3,559,242 =================== ===================
See Notes to Financial Statements SA - 32 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Mutual Shares Securities Fund - Class 2 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 16,068 $ 2,057 Realized gains (losses) 624,505 459,097 Unrealized appreciation (depreciation) during the year (371,002) 1,485,269 ------------------- ------------------- Net increase (decrease) in net assets from operations 269,571 1,946,423 ------------------- ------------------- Contract transactions: Payments received from contract owners 2,918,611 1,422,497 Transfers between Investment Options (including Guaranteed Interest Account), net 2,122,239 2,866,862 Transfers for contract benefits and terminations (2,962,925) (2,208,309) Contract maintenance charges (15,574) (11,753) Net change to contracts in payout period (843) 8,340 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 2,061,508 2,077,637 ------------------- ------------------- Total increase (decrease) in net assets 2,331,079 4,024,060 Net assets at beginning of period 14,879,479 10,855,419 ------------------- ------------------- Net assets at end of period $ 17,210,558 $ 14,879,479 =================== ===================
Neuberger Berman AMT Fasciano Portfolio - S Class ----------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (196) $ (88) Realized gains (losses) 1,819 717 Unrealized appreciation (depreciation) during the year (397) 510 ------------------- ------------------- Net increase (decrease) in net assets from operations 1,226 1,139 ------------------- ------------------- Contract transactions: Payments received from contract owners 3,803 2,808 Transfers between Investment Options (including Guaranteed Interest Account), net 2,434 24,802 Transfers for contract benefits and terminations (26,027) (261) Contract maintenance charges (747) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (20,537) 27,349 ------------------- ------------------- Total increase (decrease) in net assets (19,311) 28,488 Net assets at beginning of period 28,488 - ------------------- ------------------- Net assets at end of period $ 9,177 $ 28,488 =================== ===================
See Notes to Financial Statements SA - 33 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Neuberger Berman AMT Guardian Portfolio - S Class --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (5,850) $ (6) Realized gains (losses) (839) 10 Unrealized appreciation (depreciation) during the year 14,022 675 ------------------- ------------------- Net increase (decrease) in net assets from operations 7,333 679 ------------------- ------------------- Contract transactions: Payments received from contract owners 847,914 - Transfers between Investment Options (including Guaranteed Interest Account), net 665,398 12,003 Transfers for contract benefits and terminations (178,335) (122) Contract maintenance charges (186) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 1,334,791 11,881 ------------------- ------------------- Total increase (decrease) in net assets 1,342,124 12,560 Net assets at beginning of period 12,560 - ------------------- ------------------- Net assets at end of period $ 1,354,684 $ 12,560 =================== ===================
Oppenheimer Capital Appreciation Fund/VA - Service Shares --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (503) $ (31) Realized gains (losses) 134 (228) Unrealized appreciation (depreciation) during the year 2,972 10 ------------------- ------------------- Net increase (decrease) in net assets from operations 2,603 (249) ------------------- ------------------- Contract transactions: Payments received from contract owners 6,556 1,650 Transfers between Investment Options (including Guaranteed Interest Account), net 37,458 18,747 Transfers for contract benefits and terminations (3) (12,948) Contract maintenance charges (20) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 43,991 7,449 ------------------- ------------------- Total increase (decrease) in net assets 46,594 7,200 Net assets at beginning of period 7,200 - ------------------- ------------------- Net assets at end of period $ 53,794 $ 7,200 =================== ===================
See Notes to Financial Statements SA - 34 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Oppenheimer Global Securities Fund/VA - Service Shares --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (1,847) $ (167) Realized gains (losses) 5,697 10 Unrealized appreciation (depreciation) during the year (2,802) 3,215 ------------------- ------------------- Net increase (decrease) in net assets from operations 1,048 3,058 ------------------- ------------------- Contract transactions: Payments received from contract owners 31,710 18,439 Transfers between Investment Options (including Guaranteed Interest Account), net 264,722 92,047 Transfers for contract benefits and terminations (45,025) (231) Contract maintenance charges (240) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 251,167 110,255 ------------------- ------------------- Total increase (decrease) in net assets 252,215 113,313 Net assets at beginning of period 113,313 - ------------------- ------------------- Net assets at end of period $ 365,528 $ 113,313 =================== ===================
Oppenheimer Main Street Small Cap Fund/VA - Service Shares --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (7,190) $ (37) Realized gains (losses) (966) 1 Unrealized appreciation (depreciation) during the year (61,605) 631 ------------------- ------------------- Net increase (decrease) in net assets from operations (69,761) 595 ------------------- ------------------- Contract transactions: Payments received from contract owners 679,610 3,294 Transfers between Investment Options (including Guaranteed Interest Account), net 445,935 20,936 Transfers for contract benefits and terminations (156,118) - Contract maintenance charges (323) (3) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 969,104 24,227 ------------------- ------------------- Total increase (decrease) in net assets 899,343 24,822 Net assets at beginning of period 24,822 - ------------------- ------------------- Net assets at end of period $ 924,165 $ 24,822 =================== ===================
See Notes to Financial Statements SA - 35 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix Capital Growth Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (1,410,275) $ (1,689,116) Realized gains (losses) 2,854,659 (1,053,687) Unrealized appreciation (depreciation) during the year 11,590,175 4,581,257 ------------------- ------------------- Net increase (decrease) in net assets from operations 13,034,559 1,838,454 ------------------- ------------------- Contract transactions: Payments received from contract owners 2,170,284 2,651,616 Transfers between Investment Options (including Guaranteed Interest Account), net (6,937,633) (8,639,708) Transfers for contract benefits and terminations (22,957,992) (33,946,403) Contract maintenance charges (211,915) (254,500) Net change to contracts in payout period (12,466) 59 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (27,949,722) (40,188,936) ------------------- ------------------- Total increase (decrease) in net assets (14,915,163) (38,350,482) Net assets at beginning of period 147,167,479 185,517,961 ------------------- ------------------- Net assets at end of period $ 132,252,316 $ 147,167,479 =================== ===================
Phoenix Growth and Income Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (66,638) $ (32,524) Realized gains (losses) 1,132,788 450,052 Unrealized appreciation (depreciation) during the year (215,333) 1,960,174 ------------------- ------------------- Net increase (decrease) in net assets from operations 850,817 2,377,702 ------------------- ------------------- Contract transactions: Payments received from contract owners 303,911 669,010 Transfers between Investment Options (including Guaranteed Interest Account), net (149,665) 633,245 Transfers for contract benefits and terminations (3,843,218) (3,374,215) Contract maintenance charges (41,686) (23,381) Net change to contracts in payout period (656) (311) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (3,731,314) (2,095,652) ------------------- ------------------- Total increase (decrease) in net assets (2,880,497) 282,050 Net assets at beginning of period 17,349,543 17,067,493 ------------------- ------------------- Net assets at end of period $ 14,469,046 $ 17,349,543 =================== ===================
See Notes to Financial Statements SA - 36 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix Mid-Cap Growth Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (197,075) $ (105,658) Realized gains (losses) 340,610 8,713 Unrealized appreciation (depreciation) during the year 2,718,372 216,321 ------------------- ------------------- Net increase (decrease) in net assets from operations 2,861,907 119,376 ------------------- ------------------- Contract transactions: Payments received from contract owners 289,260 286,042 Transfers between Investment Options (including Guaranteed Interest Account), net (856,001) 9,691,665 Transfers for contract benefits and terminations (2,479,572) (2,350,656) Contract maintenance charges (21,764) (19,348) Net change to contracts in payout period (1,618) 2,962 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (3,069,695) 7,610,665 ------------------- ------------------- Total increase (decrease) in net assets (207,788) 7,730,041 Net assets at beginning of period 15,477,453 7,747,412 ------------------- ------------------- Net assets at end of period $ 15,269,665 $ 15,477,453 =================== ===================
Phoenix Money Market Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 807,729 $ 813,308 Realized gains (losses) - - Unrealized appreciation (depreciation) during the year - - ------------------- ------------------- Net increase (decrease) in net assets from operations 807,729 813,308 ------------------- ------------------- Contract transactions: Payments received from contract owners 1,727,524 2,985,435 Transfers between Investment Options (including Guaranteed Interest Account), net 8,029,849 15,633,572 Transfers for contract benefits and terminations (10,711,665) (23,081,304) Contract maintenance charges (50,881) (59,281) Net change to contracts in payout period 11,904 (243) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (993,269) (4,521,821) ------------------- ------------------- Total increase (decrease) in net assets (185,540) (3,708,513) Net assets at beginning of period 23,736,644 27,445,157 ------------------- ------------------- Net assets at end of period $ 23,551,104 $ 23,736,644 =================== ===================
See Notes to Financial Statements SA - 37 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix Multi-Sector Fixed Income Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 1,457,860 $ 1,610,477 Realized gains (losses) (90,199) (318,200) Unrealized appreciation (depreciation) during the year (469,346) 920,896 ------------------- ------------------- Net increase (decrease) in net assets from operations 898,315 2,213,173 ------------------- ------------------- Contract transactions: Payments received from contract owners 1,918,410 802,019 Transfers between Investment Options (including Guaranteed Interest Account), net 558,575 27,547 Transfers for contract benefits and terminations (6,995,844) (10,770,311) Contract maintenance charges (43,551) (41,573) Net change to contracts in payout period 3,609 37,708 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (4,558,801) (9,944,610) ------------------- ------------------- Total increase (decrease) in net assets (3,660,486) (7,731,437) Net assets at beginning of period 38,960,188 46,691,625 ------------------- ------------------- Net assets at end of period $ 35,299,702 $ 38,960,188 =================== ===================
Phoenix Multi-Sector Short Term Bond Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 147,037 $ 122,091 Realized gains (losses) 320 7,076 Unrealized appreciation (depreciation) during the year (60,113) 26,603 ------------------- ------------------- Net increase (decrease) in net assets from operations 87,244 155,770 ------------------- ------------------- Contract transactions: Payments received from contract owners 62,012 99,875 Transfers between Investment Options (including Guaranteed Interest Account), net 558,872 723,739 Transfers for contract benefits and terminations (861,268) (678,519) Contract maintenance charges (6,454) (3,014) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (246,838) 142,081 ------------------- ------------------- Total increase (decrease) in net assets (159,594) 297,851 Net assets at beginning of period 3,709,211 3,411,360 ------------------- ------------------- Net assets at end of period $ 3,549,617 $ 3,709,211 =================== ===================
See Notes to Financial Statements SA - 38 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix Strategic Allocation Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 1,907,612 $ 2,278,305 Realized gains (losses) 9,206,176 23,301,791 Unrealized appreciation (depreciation) during the year (4,050,158) (7,281,985) ------------------- ------------------- Net increase (decrease) in net assets from operations 7,063,630 18,298,111 ------------------- ------------------- Contract transactions: Payments received from contract owners 2,836,891 1,637,928 Transfers between Investment Options (including Guaranteed Interest Account), net (9,783,788) (8,471,654) Transfers for contract benefits and terminations (30,206,881) (31,112,937) Contract maintenance charges (116,956) (140,425) Net change to contracts in payout period (26,498) 1,727 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (37,297,232) (38,085,361) ------------------- ------------------- Total increase (decrease) in net assets (30,233,602) (19,787,250) Net assets at beginning of period 164,151,735 183,938,985 ------------------- ------------------- Net assets at end of period $ 133,918,133 $ 164,151,735 =================== ===================
Phoenix-Aberdeen International Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 149,826 $ 509,626 Realized gains (losses) 6,611,658 2,143,622 Unrealized appreciation (depreciation) during the year 1,367,397 10,195,332 ------------------- ------------------- Net increase (decrease) in net assets from operations 8,128,881 12,848,580 ------------------- ------------------- Contract transactions: Payments received from contract owners 2,891,483 1,187,255 Transfers between Investment Options (including Guaranteed Interest Account), net (1,102,065) 10,426,172 Transfers for contract benefits and terminations (10,695,192) (10,626,801) Contract maintenance charges (74,438) (55,700) Net change to contracts in payout period (3,816) (1,499) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (8,984,028) 929,427 ------------------- ------------------- Total increase (decrease) in net assets (855,147) 13,778,007 Net assets at beginning of period 65,470,522 51,692,515 ------------------- ------------------- Net assets at end of period $ 64,615,375 $ 65,470,522 =================== ===================
See Notes to Financial Statements SA - 39 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix-Alger Small-Cap Growth Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (66,996) $ (59,242) Realized gains (losses) 1,025,050 1,337,379 Unrealized appreciation (depreciation) during the year (237,518) (282,978) ------------------- ------------------- Net increase (decrease) in net assets from operations 720,536 995,159 ------------------- ------------------- Contract transactions: Payments received from contract owners 78,803 36,426 Transfers between Investment Options (including Guaranteed Interest Account), net (398,328) 4,197,475 Transfers for contract benefits and terminations (1,004,787) (408,996) Contract maintenance charges (10,099) (3,953) Net change to contracts in payout period (2,816) (1,936) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (1,337,227) 3,819,016 Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - (3,301,284) ------------------- ------------------- Total increase (decrease) in net assets (616,691) 1,512,891 Net assets at beginning of period 5,410,976 3,898,085 ------------------- ------------------- Net assets at end of period $ 4,794,285 $ 5,410,976 =================== ===================
Phoenix-Duff & Phelps Real Estate Securities Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (23,900) $ 4,132 Realized gains (losses) 4,842,448 3,506,145 Unrealized appreciation (depreciation) during the year (8,593,787) 4,391,856 ------------------- ------------------- Net increase (decrease) in net assets from operations (3,775,239) 7,902,133 ------------------- ------------------- Contract transactions: Payments received from contract owners 882,253 712,789 Transfers between Investment Options (including Guaranteed Interest Account), net (4,274,389) 1,455,730 Transfers for contract benefits and terminations (4,169,911) (5,218,634) Contract maintenance charges (32,971) (35,914) Net change to contracts in payout period (4,967) 6,882 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (7,599,985) (3,079,147) Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net - - ------------------- ------------------- Total increase (decrease) in net assets (11,375,224) 4,822,986 Net assets at beginning of period 28,513,315 23,690,329 ------------------- ------------------- Net assets at end of period $ 17,138,091 $ 28,513,315 =================== ===================
See Notes to Financial Statements SA - 40 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix-S&P Dynamic Asset Allocation Series: Aggressive Growth --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 414 $ 2,785 Realized gains (losses) 3,780 (3) Unrealized appreciation (depreciation) during the year (3,444) 1,156 ------------------- ------------------- Net increase (decrease) in net assets from operations 750 3,938 ------------------- ------------------- Contract transactions: Payments received from contract owners 135,869 115,014 Transfers between Investment Options (including Guaranteed Interest Account), net 240,859 - Transfers for contract benefits and terminations (87,904) - Contract maintenance charges (8) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 288,816 115,014 Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net 19,022 225,226 ------------------- ------------------- Total increase (decrease) in net assets 308,588 344,178 Net assets at beginning of period 344,178 - ------------------- ------------------- Net assets at end of period $ 652,766 $ 344,178 =================== ===================
Phoenix-S&P Dynamic Asset Allocation Series: Growth --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 2,296 $ 2,753 Realized gains (losses) 2,013 4 Unrealized appreciation (depreciation) during the year (25) (901) ------------------- ------------------- Net increase (decrease) in net assets from operations 4,284 1,856 ------------------- ------------------- Contract transactions: Payments received from contract owners 151,527 59 Transfers between Investment Options (including Guaranteed Interest Account), net 129,095 20,269 Transfers for contract benefits and terminations (4,530) - Contract maintenance charges (136) (35) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 275,956 20,293 Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net 18,328 219,950 ------------------- ------------------- Total increase (decrease) in net assets 298,568 242,099 Net assets at beginning of period 242,099 - ------------------- ------------------- Net assets at end of period $ 540,667 $ 242,099 =================== ===================
See Notes to Financial Statements SA - 41 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix-S&P Dynamic Asset Allocation Series: Moderate --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 6,390 $ 5,267 Realized gains (losses) 10,429 3,136 Unrealized appreciation (depreciation) during the year 13,533 583 ------------------- ------------------- Net increase (decrease) in net assets from operations 30,352 8,986 ------------------- ------------------- Contract transactions: Payments received from contract owners 72,859 199,473 Transfers between Investment Options (including Guaranteed Interest Account), net 409,902 8,595 Transfers for contract benefits and terminations (79,831) (2,175) Contract maintenance charges (191) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 402,739 205,893 Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net 16,865 211,384 ------------------- ------------------- Total increase (decrease) in net assets 449,956 426,263 Net assets at beginning of period 426,263 - ------------------- ------------------- Net assets at end of period $ 876,219 $ 426,263 =================== ===================
Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 4,140 $ 9,321 Realized gains (losses) 58,992 2,668 Unrealized appreciation (depreciation) during the year 27,089 62,527 ------------------- ------------------- Net increase (decrease) in net assets from operations 90,221 74,516 ------------------- ------------------- Contract transactions: Payments received from contract owners 60,531 732,427 Transfers between Investment Options (including Guaranteed Interest Account), net (28,400) 263,275 Transfers for contract benefits and terminations (49,870) (5,682) Contract maintenance charges (3,907) (70) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (21,646) 989,950 Increase (decrease) in amounts retained in PLIC Variable Accumulation Separate Account, net 18,492 217,559 ------------------- ------------------- Total increase (decrease) in net assets 87,067 1,282,025 Net assets at beginning of period 1,282,025 - ------------------- ------------------- Net assets at end of period $ 1,369,092 $ 1,282,025 =================== ===================
See Notes to Financial Statements SA - 42 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix-Sanford Bernstein Mid-Cap Value Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (231,295) $ (173,931) Realized gains (losses) 2,722,702 3,268,283 Unrealized appreciation (depreciation) during the year (2,182,656) (537,568) ------------------- ------------------- Net increase (decrease) in net assets from operations 308,751 2,556,784 ------------------- ------------------- Contract transactions: Payments received from contract owners 949,852 703,730 Transfers between Investment Options (including Guaranteed Interest Account), net (365,322) (534,581) Transfers for contract benefits and terminations (4,053,622) (3,604,514) Contract maintenance charges (19,533) (26,293) Net change to contracts in payout period (8,388) 523 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (3,497,013) (3,461,135) ------------------- ------------------- Total increase (decrease) in net assets (3,188,262) (904,351) Net assets at beginning of period 20,386,106 21,290,457 ------------------- ------------------- Net assets at end of period $ 17,197,844 $ 20,386,106 =================== ===================
Phoenix-Sanford Bernstein Small-Cap Value Series ----------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (137,948) $ (119,919) Realized gains (losses) 1,502,129 2,064,266 Unrealized appreciation (depreciation) during the year (1,619,664) (383,194) ------------------- ------------------- Net increase (decrease) in net assets from operations (255,483) 1,561,153 ------------------- ------------------- Contract transactions: Payments received from contract owners 228,254 420,741 Transfers between Investment Options (including Guaranteed Interest Account), net (282,887) 204,852 Transfers for contract benefits and terminations (1,992,043) (2,444,415) Contract maintenance charges (11,328) (14,353) Net change to contracts in payout period (2,828) 2,361 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (2,060,832) (1,830,814) ------------------- ------------------- Total increase (decrease) in net assets (2,316,315) (269,661) Net assets at beginning of period 11,213,225 11,482,886 ------------------- ------------------- Net assets at end of period $ 8,896,910 $ 11,213,225 =================== ===================
See Notes to Financial Statements SA - 43 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Phoenix-Van Kampen Comstock Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 38,820 $ 55,414 Realized gains (losses) 700,011 2,742,006 Unrealized appreciation (depreciation) during the year (1,081,151) (316,736) ------------------- ------------------- Net increase (decrease) in net assets from operations (342,320) 2,480,684 ------------------- ------------------- Contract transactions: Payments received from contract owners 244,625 241,229 Transfers between Investment Options (including Guaranteed Interest Account), net (253,343) (594,801) Transfers for contract benefits and terminations (2,514,768) (2,420,663) Contract maintenance charges (10,872) (16,125) Net change to contracts in payout period 10,033 5,069 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (2,524,325) (2,785,291) ------------------- ------------------- Total increase (decrease) in net assets (2,866,645) (304,607) Net assets at beginning of period 13,965,197 14,269,804 ------------------- ------------------- Net assets at end of period $ 11,098,552 $ 13,965,197 =================== ===================
Phoenix-Van Kampen Equity 500 Index Series --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (79,866) $ (70,772) Realized gains (losses) 860,515 550,730 Unrealized appreciation (depreciation) during the year (172,952) 1,440,018 ------------------- ------------------- Net increase (decrease) in net assets from operations 607,697 1,919,976 ------------------- ------------------- Contract transactions: Payments received from contract owners 1,416,971 437,844 Transfers between Investment Options (including Guaranteed Interest Account), net (1,510,761) 5,694,930 Transfers for contract benefits and terminations (5,296,528) (3,736,335) Contract maintenance charges (20,703) (10,165) Net change to contracts in payout period 35,139 (42,880) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (5,375,882) 2,343,394 ------------------- ------------------- Total increase (decrease) in net assets (4,768,185) 4,263,370 Net assets at beginning of period 20,932,512 16,669,142 ------------------- ------------------- Net assets at end of period $ 16,164,327 $ 20,932,512 =================== ===================
See Notes to Financial Statements SA - 44 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Class --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 23,053 $ 1,695 Realized gains (losses) 4,285 (115) Unrealized appreciation (depreciation) during the year 105,173 (4,492) ------------------- ------------------- Net increase (decrease) in net assets from operations 132,511 (2,912) ------------------- ------------------- Contract transactions: Payments received from contract owners 545,726 3,498 Transfers between Investment Options (including Guaranteed Interest Account), net 470,762 72,843 Transfers for contract benefits and terminations (135,577) (45) Contract maintenance charges (155) (1) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 880,756 76,295 ------------------- ------------------- Total increase (decrease) in net assets 1,013,267 73,383 Net assets at beginning of period 73,383 - ------------------- ------------------- Net assets at end of period $ 1,086,650 $ 73,383 =================== ===================
PIMCO VIT Real Return Portfolio - Advisor Class ----------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 9,104 $ 597 Realized gains (losses) 972 3,427 Unrealized appreciation (depreciation) during the year 13,847 (6,200) ------------------- ------------------- Net increase (decrease) in net assets from operations 23,923 (2,176) ------------------- ------------------- Contract transactions: Payments received from contract owners 140,668 1 Transfers between Investment Options (including Guaranteed Interest Account), net 265,898 131,673 Transfers for contract benefits and terminations (45,999) (247) Contract maintenance charges (666) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 359,901 131,427 ------------------- ------------------- Total increase (decrease) in net assets 383,824 129,251 Net assets at beginning of period 129,251 - ------------------- ------------------- Net assets at end of period $ 513,075 $ 129,251 =================== ===================
See Notes to Financial Statements SA - 45 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
PIMCO VIT Total Return Portfolio - Advisor Class ------------------------------------------ 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 15,708 $ 794 Realized gains (losses) 1,586 873 Unrealized appreciation (depreciation) during the year 23,840 (1,809) ------------------- ------------------- Net increase (decrease) in net assets from operations 41,134 (142) ------------------- ------------------- Contract transactions: Payments received from contract owners 1,843 8,235 Transfers between Investment Options (including Guaranteed Interest Account), net 561,820 198,479 Transfers for contract benefits and terminations (93,750) (13,209) Contract maintenance charges (686) (5) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 469,227 193,500 ------------------- ------------------- Total increase (decrease) in net assets 510,361 193,358 Net assets at beginning of period 193,358 - ------------------- ------------------- Net assets at end of period $ 703,719 $ 193,358 =================== ===================
Rydex Variable Trust Inverse Government Long Bond Strategy Fund --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 15,992 $ 12,476 Realized gains (losses) (30,646) (87,598) Unrealized appreciation (depreciation) during the year (17,446) 187,397 ------------------- ------------------- Net increase (decrease) in net assets from operations (32,100) 112,275 ------------------- ------------------- Contract transactions: Payments received from contract owners 1,501 36,799 Transfers between Investment Options (including Guaranteed Interest Account), net (103,143) (451,157) Transfers for contract benefits and terminations (184,492) (517,909) Contract maintenance charges (2,633) (8,080) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (288,767) (940,347) ------------------- ------------------- Total increase (decrease) in net assets (320,867) (828,072) Net assets at beginning of period 884,385 1,712,457 ------------------- ------------------- Net assets at end of period $ 563,518 $ 884,385 =================== ===================
See Notes to Financial Statements SA - 46 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Rydex Variable Trust Nova Fund --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (196) $ (321) Realized gains (losses) 4,026 5,475 Unrealized appreciation (depreciation) during the year (4,081) 5,205 ------------------- ------------------- Net increase (decrease) in net assets from operations (251) 10,359 ------------------- ------------------- Contract transactions: Payments received from contract owners - - Transfers between Investment Options (including Guaranteed Interest Account), net (132) (512) Transfers for contract benefits and terminations (14,251) (28,743) Contract maintenance charges (243) (252) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (14,626) (29,507) ------------------- ------------------- Total increase (decrease) in net assets (14,877) (19,148) Net assets at beginning of period 56,986 76,134 ------------------- ------------------- Net assets at end of period $ 42,109 $ 56,986 =================== ===================
Rydex Variable Trust Sector Rotation Fund ----------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (10,272) $ (13,219) Realized gains (losses) 100,141 89,533 Unrealized appreciation (depreciation) during the year 62,755 12,291 ------------------- ------------------- Net increase (decrease) in net assets from operations 152,624 88,605 ------------------- ------------------- Contract transactions: Payments received from contract owners 19,638 10,019 Transfers between Investment Options (including Guaranteed Interest Account), net (101,275) (131,489) Transfers for contract benefits and terminations (125,561) (269,363) Contract maintenance charges (1,067) (1,693) Net change to contracts in payout period 8 (18) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (208,257) (392,544) ------------------- ------------------- Total increase (decrease) in net assets (55,633) (303,939) Net assets at beginning of period 827,560 1,131,499 ------------------- ------------------- Net assets at end of period $ 771,927 $ 827,560 =================== ===================
See Notes to Financial Statements SA - 47 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Sentinel Variable Products Bond Fund --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 9,224 $ - Realized gains (losses) 15 - Unrealized appreciation (depreciation) during the year (6,378) - ------------------- ------------------- Net increase (decrease) in net assets from operations 2,861 - ------------------- ------------------- Contract transactions: Payments received from contract owners 132,725 - Transfers between Investment Options (including Guaranteed Interest Account), net 116,874 - Transfers for contract benefits and terminations (5,508) - Contract maintenance charges (18) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 244,073 - ------------------- ------------------- Total increase (decrease) in net assets 246,934 - Net assets at beginning of period - - ------------------- ------------------- Net assets at end of period $ 246,934 $ - =================== ===================
Sentinel Variable Products Common Stock Fund --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 8,237 $ - Realized gains (losses) 16,105 - Unrealized appreciation (depreciation) during the year (24,649) - ------------------- ------------------- Net increase (decrease) in net assets from operations (307) - ------------------- ------------------- Contract transactions: Payments received from contract owners 598,836 - Transfers between Investment Options (including Guaranteed Interest Account), net 329,753 - Transfers for contract benefits and terminations (22,398) - Contract maintenance charges (63) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 906,128 - ------------------- ------------------- Total increase (decrease) in net assets 905,821 - Net assets at beginning of period - - ------------------- ------------------- Net assets at end of period $ 905,821 $ - =================== ===================
See Notes to Financial Statements SA - 48 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Sentinel Variable Products Mid Cap Growth Fund --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (642) $ - Realized gains (losses) (2) - Unrealized appreciation (depreciation) during the year (1,076) - ------------------- ------------------- Net increase (decrease) in net assets from operations (1,720) - ------------------- ------------------- Contract transactions: Payments received from contract owners 78,323 - Transfers between Investment Options (including Guaranteed Interest Account), net 131,801 - Transfers for contract benefits and terminations - - Contract maintenance charges - - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 210,124 - ------------------- ------------------- Total increase (decrease) in net assets 208,404 - Net assets at beginning of period - - ------------------- ------------------- Net assets at end of period $ 208,404 $ - =================== ===================
Sentinel Variable Products Small Company Fund --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 717 $ - Realized gains (losses) 20,084 - Unrealized appreciation (depreciation) during the year (26,278) - ------------------- ------------------- Net increase (decrease) in net assets from operations (5,477) - ------------------- ------------------- Contract transactions: Payments received from contract owners 164,673 - Transfers between Investment Options (including Guaranteed Interest Account), net 55,305 - Transfers for contract benefits and terminations (3,054) - Contract maintenance charges (8) - Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 216,916 - ------------------- ------------------- Total increase (decrease) in net assets 211,439 - Net assets at beginning of period - - ------------------- ------------------- Net assets at end of period $ 211,439 $ - =================== ===================
See Notes to Financial Statements SA - 49 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Templeton Developing Markets Securities Fund - Class 1 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 12,285 $ (1,670) Realized gains (losses) 106,385 79,205 Unrealized appreciation (depreciation) during the year 156,619 145,716 ------------------- ------------------- Net increase (decrease) in net assets from operations 275,289 223,251 ------------------- ------------------- Contract transactions: Payments received from contract owners 92,681 10,616 Transfers between Investment Options (including Guaranteed Interest Account), net 83,258 76,108 Transfers for contract benefits and terminations (231,496) (268,537) Contract maintenance charges (486) (666) Net change to contracts in payout period 1,007 - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (55,036) (182,479) ------------------- ------------------- Total increase (decrease) in net assets 220,253 40,772 Net assets at beginning of period 1,027,340 986,568 ------------------- ------------------- Net assets at end of period $ 1,247,593 $ 1,027,340 =================== ===================
Templeton Developing Markets Securities Fund - Class 2 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 20,681 $ (789) Realized gains (losses) 192,195 139,548 Unrealized appreciation (depreciation) during the year 404,925 314,704 ------------------- ------------------- Net increase (decrease) in net assets from operations 617,801 453,463 ------------------- ------------------- Contract transactions: Payments received from contract owners 28,994 13,434 Transfers between Investment Options (including Guaranteed Interest Account), net 1,304,719 (61,259) Transfers for contract benefits and terminations (396,838) (325,787) Contract maintenance charges (1,192) (989) Net change to contracts in payout period 32 (46) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 935,715 (374,647) ------------------- ------------------- Total increase (decrease) in net assets 1,553,516 78,816 Net assets at beginning of period 2,034,091 1,955,275 ------------------- ------------------- Net assets at end of period $ 3,587,607 $ 2,034,091 =================== ===================
See Notes to Financial Statements SA - 50 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Templeton Foreign Securities Fund - Class 1 ------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 203,561 $ 5,326 Realized gains (losses) 2,564,296 1,303,632 Unrealized appreciation (depreciation) during the year 610,992 3,285,952 ------------------- ------------------- Net increase (decrease) in net assets from operations 3,378,849 4,594,910 ------------------- ------------------- Contract transactions: Payments received from contract owners 38,401 63,678 Transfers between Investment Options (including Guaranteed Interest Account), net (197,035) (250,662) Transfers for contract benefits and terminations (4,147,741) (3,003,156) Contract maintenance charges (12,470) (15,232) Net change to contracts in payout period (794) 4,424 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (4,319,639) (3,200,948) ------------------- ------------------- Total increase (decrease) in net assets (940,790) 1,393,962 Net assets at beginning of period 26,193,712 24,799,750 ------------------- ------------------- Net assets at end of period $ 25,252,922 $ 26,193,712 =================== ===================
Templeton Foreign Securities Fund - Class 2 ------------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 55,056 $ (2,371) Realized gains (losses) 456,265 (124,114) Unrealized appreciation (depreciation) during the year 474,576 1,515,605 ------------------- ------------------- Net increase (decrease) in net assets from operations 985,897 1,389,120 ------------------- ------------------- Contract transactions: Payments received from contract owners 265,277 212,569 Transfers between Investment Options (including Guaranteed Interest Account), net (61,841) 791 Transfers for contract benefits and terminations (1,299,695) (1,604,949) Contract maintenance charges (12,265) (13,338) Net change to contracts in payout period (717) (549) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (1,109,241) (1,405,476) ------------------- ------------------- Total increase (decrease) in net assets (123,344) (16,356) Net assets at beginning of period 7,788,445 7,804,801 ------------------- ------------------- Net assets at end of period $ 7,665,101 $ 7,788,445 =================== ===================
See Notes to Financial Statements SA - 51 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Templeton Global Asset Allocation Fund - Class 1 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 6,772,799 $ 2,395,063 Realized gains (losses) 9,894,071 4,204,804 Unrealized appreciation (depreciation) during the year (13,114,617) 678,146 ------------------- ------------------- Net increase (decrease) in net assets from operations 3,552,253 7,278,013 ------------------- ------------------- Contract transactions: Payments received from contract owners 298,686 336,546 Transfers between Investment Options (including Guaranteed Interest Account), net (543,595) 566,753 Transfers for contract benefits and terminations (4,381,209) (6,358,832) Contract maintenance charges (23,554) (28,017) Net change to contracts in payout period 47,304 (4,489) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (4,602,368) (5,488,039) ------------------- ------------------- Total increase (decrease) in net assets (1,050,115) 1,789,974 Net assets at beginning of period 41,942,526 40,152,552 ------------------- ------------------- Net assets at end of period $ 40,892,411 $ 41,942,526 =================== ===================
Templeton Global Asset Allocation Fund - Class 2 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 304,300 $ 109,812 Realized gains (losses) 455,651 143,670 Unrealized appreciation (depreciation) during the year (601,953) 125,585 ------------------- ------------------- Net increase (decrease) in net assets from operations 157,998 379,067 ------------------- ------------------- Contract transactions: Payments received from contract owners 14,816 18,296 Transfers between Investment Options (including Guaranteed Interest Account), net (57,781) (53,986) Transfers for contract benefits and terminations (196,674) (724,680) Contract maintenance charges (1,897) (8,816) Net change to contracts in payout period (439) (783) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (241,975) (769,969) ------------------- ------------------- Total increase (decrease) in net assets (83,977) (390,902) Net assets at beginning of period 1,963,566 2,354,468 ------------------- ------------------- Net assets at end of period $ 1,879,589 $ 1,963,566 =================== ===================
See Notes to Financial Statements SA - 52 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Templeton Global Income Securities Fund - Class 1 ----------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 68,881 $ 80,142 Realized gains (losses) 28,946 156,258 Unrealized appreciation (depreciation) during the year 359,071 277,546 ------------------- ------------------- Net increase (decrease) in net assets from operations 456,898 513,946 ------------------- ------------------- Contract transactions: Payments received from contract owners 24,908 71,918 Transfers between Investment Options (including Guaranteed Interest Account), net 489,775 50,439 Transfers for contract benefits and terminations (430,531) (944,749) Contract maintenance charges (2,564) (3,539) Net change to contracts in payout period 11,571 (893) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 93,159 (826,824) ------------------- ------------------- Total increase (decrease) in net assets 550,057 (312,878) Net assets at beginning of period 4,613,007 4,925,885 ------------------- ------------------- Net assets at end of period $ 5,163,064 $ 4,613,007 =================== ===================
Templeton Growth Securities Fund - Class 1 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 88,002 $ 95,479 Realized gains (losses) 5,418,464 4,743,094 Unrealized appreciation (depreciation) during the year (4,213,084) 12,152,249 ------------------- ------------------- Net increase (decrease) in net assets from operations 1,293,382 16,990,822 ------------------- ------------------- Contract transactions: Payments received from contract owners 524,992 676,634 Transfers between Investment Options (including Guaranteed Interest Account), net (1,177,752) (1,779,774) Transfers for contract benefits and terminations (11,454,031) (10,651,623) Contract maintenance charges (50,767) (57,050) Net change to contracts in payout period 237 (2,861) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (12,157,321) (11,814,674) ------------------- ------------------- Total increase (decrease) in net assets (10,863,939) 5,176,148 Net assets at beginning of period 94,231,059 89,054,911 ------------------- ------------------- Net assets at end of period $ 83,367,120 $ 94,231,059 =================== ===================
See Notes to Financial Statements SA - 53 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Templeton Growth Securities Fund - Class 2 --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 2,978 $ 4,579 Realized gains (losses) 778,009 610,655 Unrealized appreciation (depreciation) during the year (666,931) 1,560,206 ------------------- ------------------- Net increase (decrease) in net assets from operations 114,056 2,175,440 ------------------- ------------------- Contract transactions: Payments received from contract owners 2,985,424 1,410,882 Transfers between Investment Options (including Guaranteed Interest Account), net 977,583 877,390 Transfers for contract benefits and terminations (2,287,887) (2,233,954) Contract maintenance charges (11,698) (19,323) Net change to contracts in payout period (3,374) (3,138) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 1,660,048 31,857 ------------------- ------------------- Total increase (decrease) in net assets 1,774,104 2,207,297 Net assets at beginning of period 13,247,065 11,039,768 ------------------- ------------------- Net assets at end of period $ 15,021,169 $ 13,247,065 =================== ===================
Van Kampen UIF Equity and Income Portfolio - Class II --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ 439 $ (178) Realized gains (losses) 4,097 2 Unrealized appreciation (depreciation) during the year (9,857) 2,879 ------------------- ------------------- Net increase (decrease) in net assets from operations (5,321) 2,703 ------------------- ------------------- Contract transactions: Payments received from contract owners 5,738 1 Transfers between Investment Options (including Guaranteed Interest Account), net 93,369 92,416 Transfers for contract benefits and terminations (3,501) - Contract maintenance charges (32) (5) Net change to contracts in payout period - - ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 95,574 92,412 ------------------- ------------------- Total increase (decrease) in net assets 90,253 95,115 Net assets at beginning of period 95,115 - ------------------- ------------------- Net assets at end of period $ 185,368 $ 95,115 =================== ===================
See Notes to Financial Statements SA - 54 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Wanger International Select --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (51,675) $ (72,188) Realized gains (losses) 1,186,113 129,464 Unrealized appreciation (depreciation) during the year 557,020 2,072,717 ------------------- ------------------- Net increase (decrease) in net assets from operations 1,691,458 2,129,993 ------------------- ------------------- Contract transactions: Payments received from contract owners 123,061 204,370 Transfers between Investment Options (including Guaranteed Interest Account), net 668,496 1,527,518 Transfers for contract benefits and terminations (997,995) (1,116,823) Contract maintenance charges (8,277) (7,748) Net change to contracts in payout period (696) 10,473 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (215,411) 617,790 ------------------- ------------------- Total increase (decrease) in net assets 1,476,047 2,747,783 Net assets at beginning of period 8,627,725 5,879,942 ------------------- ------------------- Net assets at end of period $ 10,103,772 $ 8,627,725 =================== ===================
Wanger International Small Cap --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (265,193) $ (440,668) Realized gains (losses) 9,404,356 7,715,230 Unrealized appreciation (depreciation) during the year 450,237 12,409,248 ------------------- ------------------- Net increase (decrease) in net assets from operations 9,589,400 19,683,810 ------------------- ------------------- Contract transactions: Payments received from contract owners 1,148,640 1,218,963 Transfers between Investment Options (including Guaranteed Interest Account), net (1,868,469) (2,784,054) Transfers for contract benefits and terminations (9,826,574) (11,372,832) Contract maintenance charges (45,712) (68,987) Net change to contracts in payout period 2,284 (1,336) ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (10,589,831) (13,008,246) ------------------- ------------------- Total increase (decrease) in net assets (1,000,431) 6,675,564 Net assets at beginning of period 67,850,542 61,174,978 ------------------- ------------------- Net assets at end of period $ 66,850,111 $ 67,850,542 =================== ===================
See Notes to Financial Statements SA - 55 STATEMENTS OF CHANGES IN NET ASSETS For the periods ended December 31, 2007 and 2006 (Continued)
Wanger Select --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (114,917) $ (65,184) Realized gains (losses) 280,666 719,150 Unrealized appreciation (depreciation) during the year 425,869 583,694 ------------------- ------------------- Net increase (decrease) in net assets from operations 591,618 1,237,660 ------------------- ------------------- Contract transactions: Payments received from contract owners 100,326 140,734 Transfers between Investment Options (including Guaranteed Interest Account), net 1,151,253 636,478 Transfers for contract benefits and terminations (1,099,662) (1,698,419) Contract maintenance charges (10,007) (9,630) Net change to contracts in payout period (485) 225 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions 141,425 (930,612) ------------------- ------------------- Total increase (decrease) in net assets 733,043 307,048 Net assets at beginning of period 7,845,337 7,538,289 ------------------- ------------------- Net assets at end of period $ 8,578,380 $ 7,845,337 =================== ===================
Wanger U.S. Smaller Companies --------------------------------------- 2007 2006 ------------------- ------------------- Increase (decrease) in net assets from operations: Net investment income (loss) $ (833,770) $ (791,272) Realized gains (losses) 12,328,588 16,184,217 Unrealized appreciation (depreciation) during the year (8,388,400) (10,490,044) ------------------- ------------------- Net increase (decrease) in net assets from operations 3,106,418 4,902,901 ------------------- ------------------- Contract transactions: Payments received from contract owners 710,911 1,204,951 Transfers between Investment Options (including Guaranteed Interest Account), net (4,960,444) (6,312,157) Transfers for contract benefits and terminations (11,817,703) (18,158,940) Contract maintenance charges (50,994) (79,902) Net change to contracts in payout period (903) 8,241 ------------------- ------------------- Net increase (decrease) in net assets resulting from contract transactions (16,119,133) (23,337,807) ------------------- ------------------- Total increase (decrease) in net assets (13,012,715) (18,434,906) Net assets at beginning of period 70,385,504 88,820,410 ------------------- ------------------- Net assets at end of period $ 57,372,789 $ 70,385,504 =================== ===================
See Notes to Financial Statements SA - 56 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 1--Organization The Phoenix Life Variable Accumulation Account (the "Separate Account"), is a separate investment account of Phoenix Life Insurance Company ("Phoenix"). Phoenix is a wholly owned subsidiary of The Phoenix Companies, Inc. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and was established June 21, 1982. The Separate Account currently consists of 65 investment options that invest in shares of underlying funds The underlying funds include The Phoenix Edge Series Fund, AIM Variable Insurance Funds, The Alger American Fund, DWS Investments VIT Funds (formerly Scudder Investments VIT Funds), Federated Insurance Series, Fidelity(R) Variable Insurance Products, Franklin Templeton Variable Insurance Products Trust, Lazard Retirement Series, Lord Abbett Series Fund, Inc., Neuberger Berman Advisers Management Trust, Oppenheimer Variable Account Funds, PIMCO Variable Insurance Trust, The Rydex Variable Trust, The Sentinel Variable Products Trust, The Universal Institutional Funds, Inc. and Wanger Advisors Trust (collectively, the "Funds"). The Separate Account invests in the following investment options: AIM V.I. Capital Appreciation Fund - Class I ------------------------------------------------------------------------------------------ AIM V.I. Core Equity Fund - Class I ------------------------------------------------------------------------------------------ AIM V.I. Mid Cap Core Equity Fund - Class I ------------------------------------------------------------------------------------------ Alger American Leveraged AllCap Portfolio - Class O ------------------------------------------------------------------------------------------ DWS Equity 500 Index Fund VIP - Class A ------------------------------------------------------------------------------------------ Federated Fund for U.S. Government Securities II ------------------------------------------------------------------------------------------ Federated High Income Bond Fund II - Primary Shares ------------------------------------------------------------------------------------------ Fidelity VIP Contrafund(R) Portfolio - Service Class ------------------------------------------------------------------------------------------ Fidelity VIP Growth Opportunities Portfolio - Service Class ------------------------------------------------------------------------------------------ Fidelity VIP Growth Portfolio - Service Class ------------------------------------------------------------------------------------------ Fidelity VIP Investment Grade Bond Portfolio - Service Class ------------------------------------------------------------------------------------------ Franklin Income Securities Fund - Class 2 ------------------------------------------------------------------------------------------ Lazard Retirement Small Cap Portfolio - Service Shares ------------------------------------------------------------------------------------------ Lord Abbett Bond-Debenture Portfolio - Class VC ------------------------------------------------------------------------------------------ Lord Abbett Growth and Income Portfolio - Class VC ------------------------------------------------------------------------------------------ Lord Abbett Mid-Cap Value Portfolio - Class VC ------------------------------------------------------------------------------------------ Mutual Shares Securities Fund - Class 2 (included in Franklin Templeton Variable Insurance Products Trust) ------------------------------------------------------------------------------------------ Neuberger Berman AMT Fasciano Portfolio - Class S ------------------------------------------------------------------------------------------ Neuberger Berman AMT Guardian Portfolio - Class S ------------------------------------------------------------------------------------------ Oppenheimer Capital Appreciation Fund/VA - Service Shares ------------------------------------------------------------------------------------------ Oppenheimer Global Securities Fund/VA - Service Shares ------------------------------------------------------------------------------------------ Oppenheimer Main Street Small Cap Fund/VA - Service Shares ------------------------------------------------------------------------------------------ Phoenix Capital Growth Series ------------------------------------------------------------------------------------------ Phoenix Growth and Income Series ------------------------------------------------------------------------------------------ Phoenix Mid-Cap Growth Series ------------------------------------------------------------------------------------------ Phoenix Money Market Series ------------------------------------------------------------------------------------------ Phoenix Multi-Sector Fixed Income Series ------------------------------------------------------------------------------------------ Phoenix Multi-Sector Short Term Bond Series ------------------------------------------------------------------------------------------ Phoenix Strategic Allocation Series ------------------------------------------------------------------------------------------ Phoenix-Aberdeen International Series ------------------------------------------------------------------------------------------ Phoenix-Alger Small-Cap Growth Series ------------------------------------------------------------------------------------------ Phoenix-Duff & Phelps Real Estate Securities Series ------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Aggressive Growth ------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Growth ------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Moderate ------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth ------------------------------------------------------------------------------------------ Phoenix-Sanford Bernstein Mid-Cap Value Series ------------------------------------------------------------------------------------------ Phoenix-Sanford Bernstein Small-Cap Value Series ------------------------------------------------------------------------------------------ Phoenix-Van Kampen Comstock Series ------------------------------------------------------------------------------------------ Phoenix-Van Kampen Equity 500 Index Series ------------------------------------------------------------------------------------------ PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Class ------------------------------------------------------------------------------------------ PIMCO VIT Real Return Portfolio - Advisor Class ------------------------------------------------------------------------------------------ PIMCO VIT Total Return Portfolio - Advisor Class ------------------------------------------------------------------------------------------ Rydex Variable Trust Inverse Government Long Bond Strategy Fund ------------------------------------------------------------------------------------------
SA - 57 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 1--Organization (Continued) Rydex Variable Trust Nova Fund ------------------------------------------------------ Rydex Variable Trust Sector Rotation Fund ------------------------------------------------------ Sentinel Variable Products Balanced Fund ------------------------------------------------------ Sentinel Variable Products Bond Fund ------------------------------------------------------ Sentinel Variable Products Common Stock Fund ------------------------------------------------------ Sentinel Variable Products Mid Cap Growth Fund ------------------------------------------------------ Sentinel Variable Products Small Company Fund ------------------------------------------------------ Templeton Developing Markets Securities Fund - Class 1 ------------------------------------------------------ Templeton Developing Markets Securities Fund - Class 2 ------------------------------------------------------ Templeton Foreign Securities Fund - Class 1 ------------------------------------------------------ Templeton Foreign Securities Fund - Class 2 ------------------------------------------------------ Templeton Global Asset Allocation Fund - Class 1 ------------------------------------------------------ Templeton Global Asset Allocation Fund - Class 2 ------------------------------------------------------ Templeton Global Income Securities Fund - Class 1 ------------------------------------------------------ Templeton Growth Securities Fund - Class 1 ------------------------------------------------------ Templeton Growth Securities Fund - Class 2 ------------------------------------------------------ Van Kampen UIF Equity and Income Portfolio - Class II ------------------------------------------------------ Wanger International Select ------------------------------------------------------ Wanger International Small Cap ------------------------------------------------------ Wanger Select ------------------------------------------------------ Wanger U.S. Smaller Companies ------------------------------------------------------
Additionally, policy owners may direct the allocation of their investments between the Separate Account and the Guaranteed Interest Account. Comparative year information for the year ended December 31, 2004 and prior year financial highlight data (December 31, 2003 through December 31, 2004) have been reformatted to be consistent with the 2005, 2006 and 2007 disclosures. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from Phoenix Life Insurance Company's other asset and liabilities. The portion of the Separate Account's assets applicable to the variable annuity contracts is not chargeable with liabilities arising out of any other business Phoenix Life Insurance Company may conduct. Note 2--Significant Accounting Policies The following is a summary of significant accounting policies of the Separate Account, which are in accordance with accounting principles generally accepted in the United States of America in the investment company industry: A. Valuation of investments: Investments are made exclusively in the Funds and are valued at the reported net asset values per share of the respective investment options. B. Investment transactions and related income: Investment transactions are recorded on the trade date. Realized gains and losses on the sales of shares of the Funds are computed on the basis of the identified cost of the share sold. Dividend income and gains from investments are recorded on the ex-distribution date. C. Income taxes: The Separate Account is not a separate entity from Phoenix, and under current federal income tax law, income arising from the Separate Account is not taxed since reserves are established equivalent to such income. Therefore, no provision for related federal taxes is required. D. Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities, revenues and expenses. Actual results could differ from those estimates. E. Distributions: Distributions from the Funds are recorded by each investment option on the ex-dividend date. SA - 58 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 2--Significant Accounting Policies (Continued) F. Fair Value Measurements: In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, or SFAS 157. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 provides guidance on how to measure fair value when required under existing accounting standards. The statement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels ("Level 1, 2 and 3"). Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date. Level 2 inputs are observable inputs, other than quoted prices included in Level 1, for the asset or liability. Level 3 inputs are unobservable inputs reflecting our estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). We have adopted SFAS 157 effective January 1, 2008. Adoption of this statement did not have a material impact on our financial statements. Note 3--Purchases and Proceeds from Sales of Investments The cost of purchases and proceeds from sales of investments for the period ended December 31, 2007 were as follows:
Investment Option Purchases Sales ----------------- --------- ----- AIM V.I. Capital Appreciation Fund - Class I $ 351,717 $ 1,156,453 AIM V.I. Core Equity Fund - Class I 61,813 323,936 AIM V.I. Mid Cap Core Equity Fund - Class I 49,035 466,724 Alger American Leveraged AllCap Portfolio - Class O 98,794 920,390 DWS Equity 500 Index Fund VIP - Class A 1,991,712 2,176,506 Federated Fund for U.S. Government Securities II 3,336,708 5,643,795 Federated High Income Bond Fund II - Primary Shares 864,985 1,766,291 Fidelity VIP Contrafund(R) Portfolio - Service Class 11,011,883 7,433,317 Fidelity VIP Growth Opportunities Portfolio - Service Class 3,375,725 1,497,067 Fidelity VIP Growth Portfolio - Service Class 1,248,841 1,550,211 Fidelity VIP Investment Grade Bond Portfolio - Service Class 3,224,221 1,045,138 Franklin Income Securities Fund - Class 2 5,368,162 703,931 Lazard Retirement Small Cap Portfolio - Service Shares 195,414 128,858 Lord Abbett Bond-Debenture Portfolio - Class VC 739,510 1,186,597 Lord Abbett Growth and Income Portfolio - Class VC 4,017,590 3,742,392 Lord Abbett Mid-Cap Value Portfolio - Class VC 882,964 1,034,891 Mutual Shares Securities Fund - Class 2 6,917,200 4,277,398 Neuberger Berman AMT Fasciano Portfolio - S Class 6,276 26,971 Neuberger Berman AMT Guardian Portfolio - S Class 1,530,659 201,719 Oppenheimer Capital Appreciation Fund/VA - Service Shares 44,913 1,425 Oppenheimer Global Securities Fund/VA - Service Shares 340,028 84,784 Oppenheimer Main Street Small Cap Fund/VA - Service Shares 1,221,155 253,290 Phoenix Capital Growth Series 5,770,254 35,130,252 Phoenix Growth and Income Series 1,969,815 5,401,372 Phoenix Mid-Cap Growth Series 848,732 4,115,501 Phoenix Money Market Series 17,510,739 17,696,279 Phoenix Multi-Sector Fixed Income Series 6,645,103 9,746,046 Phoenix Multi-Sector Short Term Bond Series 1,510,520 1,610,322 Phoenix Strategic Allocation Series 14,970,535 42,716,861 Phoenix-Aberdeen International Series 9,592,772 15,217,927 Phoenix-Alger Small-Cap Growth Series 1,427,085 1,893,456 Phoenix-Duff & Phelps Real Estate Securities Series 4,426,710 10,300,171 Phoenix-S&P Dynamic Asset Allocation Series: Aggressive Growth 441,907 144,554 Phoenix-S&P Dynamic Asset Allocation Series: Growth 293,611 8,706 Phoenix-S&P Dynamic Asset Allocation Series: Moderate 588,862 163,263 Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth 812,909 810,687 Phoenix-Sanford Bernstein Mid-Cap Value Series 4,955,214 6,486,929 Phoenix-Sanford Bernstein Small-Cap Value Series 2,570,755 3,517,530
SA - 59 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 3--Purchases and Proceeds from Sales of Investments (Continued)
Investment Option Purchases Sales ----------------- --------- ----- Phoenix-Van Kampen Comstock Series $ 1,844,776 $ 3,717,196 Phoenix-Van Kampen Equity 500 Index Series 2,752,773 8,208,517 PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Class 1,076,437 172,627 PIMCO VIT Real Return Portfolio - Advisor Class 444,564 74,376 PIMCO VIT Total Return Portfolio - Advisor Class 671,003 186,071 Rydex Variable Trust Inverse Government Long Bond Strategy Fund 37,334 310,110 Rydex Variable Trust Nova Fund 2,049 16,871 Rydex Variable Trust Sector Rotation Fund 80,026 240,044 Sentinel Variable Products Bond Fund 259,272 5,976 Sentinel Variable Products Common Stock Fund 955,172 24,096 Sentinel Variable Products Mid Cap Growth Fund 210,125 643 Sentinel Variable Products Small Company Fund 241,395 3,599 Templeton Developing Markets Securities Fund - Class 1 461,666 415,612 Templeton Developing Markets Securities Fund - Class 2 1,823,487 675,848 Templeton Foreign Securities Fund - Class 1 2,054,140 5,004,751 Templeton Foreign Securities Fund - Class 2 1,293,801 1,996,611 Templeton Global Asset Allocation Fund - Class 1 17,572,572 5,877,873 Templeton Global Asset Allocation Fund - Class 2 774,363 281,335 Templeton Global Income Securities Fund - Class 1 666,121 504,081 Templeton Growth Securities Fund - Class 1 6,017,176 14,295,988 Templeton Growth Securities Fund - Class 2 5,725,758 3,455,419 Van Kampen UIF Equity and Income Portfolio - Class II 215,028 116,314 Wanger International Select 3,548,457 2,731,635 Wanger International Small Cap 9,687,697 15,044,640 Wanger Select 2,364,867 2,191,661 Wanger U.S. Smaller Companies 4,798,815 18,163,483 ------------ ------------ $186,793,702 $274,297,317 ============ ============
SA - 60 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 4--Changes in Units Outstanding The changes in units outstanding were as follows: ------------------------------------- For period ended December 31, 2007 Units Units Net Increase Investment Option Issued Redeemed (Decrease) ------------------------------------- ------------------------------------------------------------------------------------------------------ AIM V.I. Capital Appreciation Fund - Class I 305,719 (1,009,174) (703,455) ------------------------------------------------------------------------------------------------------ AIM V.I. Core Equity Fund - Class I 42,472 (271,336) (228,864) ------------------------------------------------------------------------------------------------------ AIM V.I. Mid Cap Core Equity Fund - Class I 16,682 (352,223) (335,541) ------------------------------------------------------------------------------------------------------ Alger American Leveraged AllCap Portfolio - Class O 101,861 (880,060) (778,199) ------------------------------------------------------------------------------------------------------ DWS Equity 500 Index Fund VIP - Class A 1,373,478 (1,518,740) (145,262) ------------------------------------------------------------------------------------------------------ Federated Fund for U.S. Government Securities II 1,984,606 (4,251,603) (2,266,997) ------------------------------------------------------------------------------------------------------ Federated High Income Bond Fund II - Primary Shares 322,915 (1,221,521) (898,606) ------------------------------------------------------------------------------------------------------ Fidelity VIP Contrafund(R) Portfolio - Service Class 2,374,709 (4,876,103) (2,501,394) ------------------------------------------------------------------------------------------------------ Fidelity VIP Growth Opportunities Portfolio - Service Class 2,940,254 (1,305,200) 1,635,054 ------------------------------------------------------------------------------------------------------ Fidelity VIP Growth Portfolio - Service Class 1,420,771 (1,725,009) (304,238) ------------------------------------------------------------------------------------------------------ Fidelity VIP Investment Grade Bond Portfolio - Service Class 3,180,233 (1,000,900) 2,179,333 ------------------------------------------------------------------------------------------------------ Franklin Income Securities Fund - Class 2 4,668,757 (580,046) 4,088,711 ------------------------------------------------------------------------------------------------------ Lazard Retirement Small Cap Portfolio - Service Shares 10,017 (95,513) (85,496) ------------------------------------------------------------------------------------------------------ Lord Abbett Bond-Debenture Portfolio - Class VC 486,893 (1,011,992) (525,099) ------------------------------------------------------------------------------------------------------ Lord Abbett Growth and Income Portfolio - Class VC 2,488,137 (2,889,966) (401,829) ------------------------------------------------------------------------------------------------------ Lord Abbett Mid-Cap Value Portfolio - Class VC 359,056 (789,735) (430,679) ------------------------------------------------------------------------------------------------------ Mutual Shares Securities Fund - Class 2 3,767,511 (2,209,313) 1,558,198 ------------------------------------------------------------------------------------------------------ Neuberger Berman AMT Fasciano Portfolio - S Class 6,399 (26,450) (20,051) ------------------------------------------------------------------------------------------------------ Neuberger Berman AMT Guardian Portfolio - S Class 1,400,726 (176,541) 1,224,185 ------------------------------------------------------------------------------------------------------ Oppenheimer Capital Appreciation Fund/VA - Service Shares 40,398 (812) 39,586 ------------------------------------------------------------------------------------------------------ Oppenheimer Global Securities Fund/VA - Service Shares 295,819 (73,147) 222,672 ------------------------------------------------------------------------------------------------------ Oppenheimer Main Street Small Cap Fund/VA - Service Shares 1,168,170 (238,973) 929,197 ------------------------------------------------------------------------------------------------------ Phoenix Capital Growth Series 719,283 (5,708,102) (4,988,819) ------------------------------------------------------------------------------------------------------ Phoenix Growth and Income Series 980,739 (3,632,993) (2,652,254) ------------------------------------------------------------------------------------------------------ Phoenix Mid-Cap Growth Series 578,186 (2,779,351) (2,201,165) ------------------------------------------------------------------------------------------------------ Phoenix Money Market Series 9,022,365 (9,689,639) (667,274) ------------------------------------------------------------------------------------------------------ Phoenix Multi-Sector Fixed Income Series 2,306,607 (3,239,050) (932,443) ------------------------------------------------------------------------------------------------------ Phoenix Multi-Sector Short Term Bond Series 1,185,003 (1,414,960) (229,957) ------------------------------------------------------------------------------------------------------ Phoenix Strategic Allocation Series 717,885 (6,644,822) (5,926,937) ------------------------------------------------------------------------------------------------------ Phoenix-Aberdeen International Series 2,377,865 (4,981,128) (2,603,263) ------------------------------------------------------------------------------------------------------ Phoenix-Alger Small-Cap Growth Series 212,033 (808,369) (596,336) ------------------------------------------------------------------------------------------------------ Phoenix-Duff & Phelps Real Estate Securities Series 691,015 (2,001,338) (1,310,323) ------------------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Aggressive Growth 359,406 (121,837) 237,569 ------------------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Growth 252,298 (6,500) 245,798 ------------------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Moderate 525,719 (143,686) 382,033 ------------------------------------------------------------------------------------------------------ Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth 709,166 (706,263) 2,903 ------------------------------------------------------------------------------------------------------ Phoenix-Sanford Bernstein Mid-Cap Value Series 1,431,258 (2,987,338) (1,556,080) ------------------------------------------------------------------------------------------------------ Phoenix-Sanford Bernstein Small-Cap Value Series 592,663 (1,486,232) (893,569) ------------------------------------------------------------------------------------------------------ Phoenix-Van Kampen Comstock Series 610,459 (2,067,571) (1,457,112) ------------------------------------------------------------------------------------------------------ Phoenix-Van Kampen Equity 500 Index Series 2,204,766 (6,443,494) (4,238,728) ------------------------------------------------------------------------------------------------------ PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Class 1,009,209 (155,904) 853,305 ------------------------------------------------------------------------------------------------------ PIMCO VIT Real Return Portfolio - Advisor Class 406,246 (68,683) 337,563 ------------------------------------------------------------------------------------------------------ PIMCO VIT Total Return Portfolio - Advisor Class 627,596 (172,968) 454,628 ------------------------------------------------------------------------------------------------------ Rydex Variable Trust Inverse Government Long Bond Strategy Fund 10,670 (323,355) (312,685) ------------------------------------------------------------------------------------------------------ Rydex Variable Trust Nova Fund 797 (9,782) (8,985) ------------------------------------------------------------------------------------------------------
-------------------------------------- For period ended December 31, 2006 Units Units Net Increase Investment Option Issued Redeemed (Decrease) -------------------------------------- ------------------------------------------------------------------------------------------------------- AIM V.I. Capital Appreciation Fund - Class I 1,469,865 (722,436) 747,429 ------------------------------------------------------------------------------------------------------- AIM V.I. Core Equity Fund - Class I 2,054,487 (857,145) 1,197,342 ------------------------------------------------------------------------------------------------------- AIM V.I. Mid Cap Core Equity Fund - Class I 127,461 (4,621,371) (4,493,910) ------------------------------------------------------------------------------------------------------- Alger American Leveraged AllCap Portfolio - Class O 904,824 (1,795,668) (890,844) ------------------------------------------------------------------------------------------------------- DWS Equity 500 Index Fund VIP - Class A 3,457,002 (4,392,970) (935,968) ------------------------------------------------------------------------------------------------------- Federated Fund for U.S. Government Securities II 4,562,035 (4,343,221) 218,814 ------------------------------------------------------------------------------------------------------- Federated High Income Bond Fund II - Primary Shares 817,802 (1,337,192) (519,390) ------------------------------------------------------------------------------------------------------- Fidelity VIP Contrafund(R) Portfolio - Service Class 7,207,740 (5,974,392) 1,233,348 ------------------------------------------------------------------------------------------------------- Fidelity VIP Growth Opportunities Portfolio - Service Class 1,682,886 (739,246) 943,640 ------------------------------------------------------------------------------------------------------- Fidelity VIP Growth Portfolio - Service Class 509,628 (2,804,862) (2,295,234) ------------------------------------------------------------------------------------------------------- Fidelity VIP Investment Grade Bond Portfolio - Service Class - - - ------------------------------------------------------------------------------------------------------- Franklin Income Securities Fund - Class 2 1,452,223 (214,570) 1,237,653 ------------------------------------------------------------------------------------------------------- Lazard Retirement Small Cap Portfolio - Service Shares 117,758 (4,540,649) (4,422,891) ------------------------------------------------------------------------------------------------------- Lord Abbett Bond-Debenture Portfolio - Class VC 682,057 (3,478,953) (2,796,896) ------------------------------------------------------------------------------------------------------- Lord Abbett Growth and Income Portfolio - Class VC 2,861,196 (2,613,192) 248,004 ------------------------------------------------------------------------------------------------------- Lord Abbett Mid-Cap Value Portfolio - Class VC 489,618 (3,311,217) (2,821,599) ------------------------------------------------------------------------------------------------------- Mutual Shares Securities Fund - Class 2 3,268,483 (1,876,181) 1,392,302 ------------------------------------------------------------------------------------------------------- Neuberger Berman AMT Fasciano Portfolio - S Class 29,834 (274) 29,560 ------------------------------------------------------------------------------------------------------- Neuberger Berman AMT Guardian Portfolio - S Class 12,009 (121) 11,888 ------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund/VA - Service Shares 19,665 (12,554) 7,111 ------------------------------------------------------------------------------------------------------- Oppenheimer Global Securities Fund/VA - Service Shares 107,140 (230) 106,910 ------------------------------------------------------------------------------------------------------- Oppenheimer Main Street Small Cap Fund/VA - Service Shares 24,350 (3) 24,347 ------------------------------------------------------------------------------------------------------- Phoenix Capital Growth Series 3,811,109 (8,829,211) (5,018,102) ------------------------------------------------------------------------------------------------------- Phoenix Growth and Income Series 2,557,664 (4,148,366) (1,590,702) ------------------------------------------------------------------------------------------------------- Phoenix Mid-Cap Growth Series 8,986,481 (3,174,633) 5,811,848 ------------------------------------------------------------------------------------------------------- Phoenix Money Market Series 11,801,794 (15,302,370) (3,500,576) ------------------------------------------------------------------------------------------------------- Phoenix Multi-Sector Fixed Income Series 1,125,815 (3,014,886) (1,889,071) ------------------------------------------------------------------------------------------------------- Phoenix Multi-Sector Short Term Bond Series 1,047,768 (911,655) 136,113 ------------------------------------------------------------------------------------------------------- Phoenix Strategic Allocation Series 411,144 (7,153,309) (6,742,165) ------------------------------------------------------------------------------------------------------- Phoenix-Aberdeen International Series 6,787,921 (5,065,756) 1,722,165 ------------------------------------------------------------------------------------------------------- Phoenix-Alger Small-Cap Growth Series 2,560,270 (2,164,395) 395,875 ------------------------------------------------------------------------------------------------------- Phoenix-Duff & Phelps Real Estate Securities Series 1,015,827 (1,687,590) (671,763) ------------------------------------------------------------------------------------------------------- Phoenix-S&P Dynamic Asset Allocation Series: Aggressive Growth 107,371 - 107,371 ------------------------------------------------------------------------------------------------------- Phoenix-S&P Dynamic Asset Allocation Series: Growth 20,448 (35) 20,413 ------------------------------------------------------------------------------------------------------- Phoenix-S&P Dynamic Asset Allocation Series: Moderate 313,423 (105,793) 207,630 ------------------------------------------------------------------------------------------------------- Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth 998,123 (5,623) 992,500 ------------------------------------------------------------------------------------------------------- Phoenix-Sanford Bernstein Mid-Cap Value Series 1,933,645 (3,799,013) (1,865,368) ------------------------------------------------------------------------------------------------------- Phoenix-Sanford Bernstein Small-Cap Value Series 928,495 (1,804,722) (876,227) ------------------------------------------------------------------------------------------------------- Phoenix-Van Kampen Comstock Series 565,438 (2,365,888) (1,800,450) ------------------------------------------------------------------------------------------------------- Phoenix-Van Kampen Equity 500 Index Series 5,632,079 (4,145,677) 1,486,402 ------------------------------------------------------------------------------------------------------- PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Class 78,288 (4,279) 74,009 ------------------------------------------------------------------------------------------------------- PIMCO VIT Real Return Portfolio - Advisor Class 129,022 (238) 128,784 ------------------------------------------------------------------------------------------------------- PIMCO VIT Total Return Portfolio - Advisor Class 203,484 (13,003) 190,481 ------------------------------------------------------------------------------------------------------- Rydex Variable Trust Inverse Government Long Bond Strategy Fund 131,521 (1,159,915) (1,028,394) ------------------------------------------------------------------------------------------------------- Rydex Variable Trust Nova Fund 11,310 (31,036) (19,726) -------------------------------------------------------------------------------------------------------
SA - 61 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 4--Changes in Units Outstanding (Continued) ------------------------------------------------------------------------- For period ended December 31, 2007 For period ended December 31, 2006 Units Units Net Increase Units Units Net Increase Investment Option Issued Redeemed (Decrease) Issued Redeemed (Decrease) ------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------- Rydex Variable Trust Sector Rotation Fund 12,385 (134,953) (122,568) 213,358 (481,368) (268,010) -------------------------------------------------------------------------------------------------------------------------------- Sentinel Variable Products Bond Fund 247,657 (5,495) 242,162 - - - -------------------------------------------------------------------------------------------------------------------------------- Sentinel Variable Products Common Stock Fund 908,093 (22,111) 885,982 - - - -------------------------------------------------------------------------------------------------------------------------------- Sentinel Variable Products Mid Cap Growth Fund 193,454 - 193,454 - - - -------------------------------------------------------------------------------------------------------------------------------- Sentinel Variable Products Small Company Fund 213,471 (3,033) 210,438 - - - -------------------------------------------------------------------------------------------------------------------------------- Templeton Developing Markets Securities Fund - Class 1 189,979 (221,640) (31,661) 201,445 (350,229) (148,784) -------------------------------------------------------------------------------------------------------------------------------- Templeton Developing Markets Securities Fund - Class 2 906,287 (384,074) 522,213 520,833 (796,505) (275,672) -------------------------------------------------------------------------------------------------------------------------------- Templeton Foreign Securities Fund - Class 1 85,999 (1,257,432) (1,171,433) 124,373 (1,151,005) (1,026,632) -------------------------------------------------------------------------------------------------------------------------------- Templeton Foreign Securities Fund - Class 2 417,212 (1,048,419) (631,207) 515,697 (1,454,300) (938,603) -------------------------------------------------------------------------------------------------------------------------------- Templeton Global Asset Allocation Fund - Class 1 128,143 (984,021) (855,878) 241,077 (1,445,775) (1,204,698) -------------------------------------------------------------------------------------------------------------------------------- Templeton Global Asset Allocation Fund - Class 2 7,166 (122,791) (115,625) 11,114 (425,298) (414,184) -------------------------------------------------------------------------------------------------------------------------------- Templeton Global Income Securities Fund - Class 1 165,469 (135,486) 29,983 119,004 (407,478) (288,474) -------------------------------------------------------------------------------------------------------------------------------- Templeton Growth Securities Fund - Class 1 152,971 (2,240,715) (2,087,744) 227,136 (2,546,586) (2,319,450) -------------------------------------------------------------------------------------------------------------------------------- Templeton Growth Securities Fund - Class 2 3,019,320 (1,612,330) 1,406,990 1,778,548 (1,591,495) 187,053 -------------------------------------------------------------------------------------------------------------------------------- Van Kampen UIF Equity and Income Portfolio - Class II 194,717 (111,424) 83,293 92,084 (5) 92,079 -------------------------------------------------------------------------------------------------------------------------------- Wanger International Select 797,753 (887,497) (89,744) 1,212,618 (912,105) 300,513 -------------------------------------------------------------------------------------------------------------------------------- Wanger International Small Cap 805,679 (2,339,968) (1,534,289) 910,002 (3,506,283) (2,596,281) -------------------------------------------------------------------------------------------------------------------------------- Wanger Select 727,366 (703,646) 23,720 628,113 (1,016,602) (388,489) -------------------------------------------------------------------------------------------------------------------------------- Wanger U.S. Smaller Companies 336,088 (4,341,774) (4,005,686) 766,893 (7,107,805) (6,340,912) --------------------------------------------------------------------------------------------------------------------------------
SA - 62 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights A summary of units outstanding, unit values, net assets, investment income ratios, expense ratios (excluding expenses of the underlying fund) and total return ratios for each of the five years in the periods ended December 31, 2007, 2006, 2005, 2004, and 2003 follows:
At December 31, For the periods ended December 31, ------------------------------------- --------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ------------------------------------- --------------------------------------------------- AIM V.I. Capital Appreciation Fund - Class I 2007 2,851 1.09 to 1.31 3,389 - 0.90% to 1.80% 9.99% to 11.00% 2006 3,554 0.98 to 1.18 3,772 0.06% 0.90% to 1.80% (2.35%) to 5.35% 2005 2,807 0.94 to 1.13 2,824 0.07% 0.90% to 1.80% (0.93%) to 7.86% 2004 2,353 0.87 to 1.05 2,181 - 0.90% to 1.80% 4.71% to 5.67% 2003 1,812 0.83 to 0.99 1,568 - 0.90% to 1.80% 1.40% to 33.13% AIM V.I. Core Equity Fund - Class I 2007 968 1.15 to 1.17 1,123 1.03% 0.90% to 1.80% 6.16% to 7.14% 2006/13/ 1,197 1.08 to 1.09 1,301 0.75% 0.90% to 1.80% 7.84% to 8.50% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - AIM V.I. Mid Cap Core Equity Fund - Class I 2007 1,305 1.26 to 1.30 1,674 0.20% 0.90% to 1.80% 7.42% to 8.56% 2006 1,641 1.17 to 1.20 1,946 0.32% 0.90% to 1.80% 4.61% to 10.24% 2005 6,135 1.07 to 1.08 6,626 0.53% 0.90% to 1.80% 5.69% to 6.65% 2004/8/ 5,988 1.02 to 1.02 6,087 2.30% 0.90% to 1.80% 1.84% to 1.91% 2003 - - to - - - - to - - to - Alger American Leveraged AllCap Portfolio - Class O 2007 3,548 1.02 to 2.00 4,005 - 0.90% to 1.80% 31.12% to 32.33% 2006 4,326 0.77 to 1.52 3,714 - 0.90% to 1.80% 17.13% to 18.19% 2005 5,217 0.65 to 1.30 3,790 - 0.90% to 1.80% 12.39% to 13.42% 2004 6,658 0.58 to 1.15 4,213 - 0.90% to 1.80% 1.32% to 7.21% 2003 8,370 0.54 to 0.94 4,868 - 0.90% to 1.80% 8.23% to 33.51% DWS Equity 500 Index Fund VIP - Class A 2007 6,289 1.23 to 1.41 8,535 1.45% 0.90% to 1.80% (1.23%) to 4.34% 2006 6,435 1.19 to 1.35 8,407 1.12% 0.90% to 1.80% 8.46% to 14.49% 2005 7,371 1.04 to 1.18 8,489 1.52% 0.90% to 1.80% (0.77%) to 3.74% 2004 8,357 1.07 to 1.14 9,335 1.06% 0.90% to 1.80% 8.60% to 9.60% 2003 7,498 0.98 to 1.04 7,699 1.07% 0.90% to 1.80% 6.19% to 27.00% Federated Fund for U.S. Government Securities II 2007 13,757 1.07 to 1.44 17,720 4.56% 0.90% to 1.80% (0.55%) to 5.33% 2006 16,024 1.02 to 1.36 19,760 3.99% 0.50% to 1.80% 0.02% to 3.20% 2005 15,806 1.00 to 1.32 19,120 3.99% 0.50% to 1.80% (0.01%) to 1.52% 2004 17,445 1.08 to 1.31 21,036 4.48% 0.50% to 1.80% 1.75% to 3.09% 2003 19,082 1.04 to 1.28 22,848 3.86% 0.50% to 1.80% (0.03%) to 1.44%
SA - 63 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, ----------------------------------------- --------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ----------------------------------------- --------------------------------------------------- Federated High Income Bond Fund II - Primary Shares 2007 3,187 1.14 to 1.51 4,401 8.21% 0.90% to 1.80% (1.43%) to 2.49% 2006 4,086 1.31 to 1.47 5,541 8.56% 0.90% to 1.80% 8.82% to 9.81% 2005 4,605 1.20 to 1.34 5,707 7.39% 0.90% to 1.80% 0.82% to 1.74% 2004 4,119 1.19 to 1.32 5,048 9.62% 0.90% to 1.80% 8.47% to 9.47% 2003 7,378 1.09 to 1.21 8,317 6.15% 0.90% to 1.80% 20.02% to 21.12% Fidelity VIP Contrafund(R) Portfolio - Service Class 2007 19,341 1.43 to 1.91 30,342 0.82% 0.90% to 1.80% 12.34% to 16.45% 2006 21,842 1.24 to 1.65 29,531 1.11% 0.90% to 1.80% 7.61% to 10.59% 2005 20,609 1.19 to 1.49 25,307 0.17% 0.90% to 1.80% 14.75% to 15.80% 2004 16,608 1.03 to 1.29 18,099 0.22% 0.90% to 1.80% 11.45% to 14.30% 2003 11,677 0.91 to 1.13 10,797 0.32% 0.90% to 1.80% 26.04% to 27.20% Fidelity VIP Growth Opportunities Portfolio - Service Class 2007 4,713 1.00 to 1.58 5,697 - 0.90% to 1.80% 8.12% to 21.93% 2006 3,078 0.82 to 1.30 2,941 0.50% 0.90% to 1.80% 3.41% to 13.37% 2005 2,134 0.79 to 1.15 1,881 0.70% 0.90% to 1.80% (1.09%) to 7.89% 2004 1,501 0.73 to 1.07 1,174 0.54% 0.90% to 1.80% (0.92%) to 6.10% 2003 1,857 0.70 to 1.01 1,499 0.53% 0.90% to 1.80% 10.07% to 30.86% Fidelity VIP Growth Portfolio - Service Class 2007 5,234 0.87 to 1.40 5,034 0.64% 0.90% to 1.80% 11.01% to 25.72% 2006 5,538 0.70 to 1.05 4,340 0.31% 0.90% to 1.80% 4.82% to 5.77% 2005 7,833 0.66 to 1.00 5,722 0.42% 0.90% to 1.80% 3.78% to 4.73% 2004 10,464 0.63 to 0.95 7,157 0.16% 0.90% to 1.80% 1.40% to 2.33% 2003 10,105 0.62 to 0.93 6,636 0.18% 0.90% to 1.80% 1.62% to 31.59% Fidelity VIP Investment Grade Bond Portfolio - Service Class 2007/24/ 2,179 1.02 to 1.04 2,248 0.17% 0.90% to 1.80% 0.21% to 3.34% 2006 - - to - - - - to - - to - 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Franklin Income Securities Fund - Class 2 2007 5,326 0.96 to 1.14 5,926 3.04% 0.90% to 1.80% (2.61%) to 2.82% 2006/15/ 1,238 1.04 to 1.11 1,361 0.20% 0.90% to 1.80% (0.12%) to 12.16% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Lazard Retirement Small Cap Portfolio - Service Shares 2007 360 1.13 to 1.16 413 - 1.00% to 1.80% (8.88%) to (8.13%) 2006 446 1.24 to 1.26 558 - 1.00% to 1.80% 12.63% to 14.91% 2005/10/ 4,868 1.09 to 1.09 5,321 - 1.00% to 1.80% 9.31% to 11.83% 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to -
SA - 64 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, ----------------------------------------- --------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ----------------------------------------- --------------------------------------------------- Lord Abbett Bond-Debenture Portfolio - Class VC 2007 2,495 1.14 to 1.17 2,882 5.80% 0.90% to 1.80% 0.91% to 5.23% 2006 3,020 1.09 to 1.11 3,328 3.40% 0.90% to 1.80% 7.37% to 8.35% 2005/10/ 5,817 1.02 to 1.02 5,941 7.84% 0.90% to 1.80% 2.16% to 4.69% 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Lord Abbett Growth and Income Portfolio - Class VC 2007 9,233 0.97 to 1.25 11,420 1.21% 0.90% to 1.80% (2.65%) to 2.50% 2006 9,635 1.20 to 1.22 11,691 1.26% 0.90% to 1.80% 14.08% to 16.22% 2005/10/ 9,387 1.04 to 1.05 9,841 1.67% 0.90% to 1.80% (0.69%) to 8.58% 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Lord Abbett Mid-Cap Value Portfolio - Class VC 2007 2,538 1.17 to 1.20 3,021 0.41% 0.90% to 1.80% (8.95%) to 3.66% 2006 2,969 1.19 to 1.21 3,559 0.33% 0.90% to 1.80% 9.55% to 11.22% 2005/9/ 5,790 1.08 to 1.09 6,265 0.69% 0.90% to 1.80% 8.22% to 13.50% 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Mutual Shares Securities Fund - Class 2 2007 9,836 0.94 to 2.01 17,211 1.41% 0.90% to 1.80% (2.15%) to 2.54% 2006 8,278 1.25 to 1.96 14,879 1.25% 0.90% to 1.80% 3.31% to 17.32% 2005 6,886 1.29 to 1.68 10,855 0.88% 0.90% to 1.80% 8.57% to 9.56% 2004 5,919 1.19 to 1.54 8,492 0.76% 0.90% to 1.80% 8.77% to 11.62% 2003 5,592 1.07 to 1.38 7,282 1.04% 0.90% to 1.80% 22.90% to 24.02% Neuberger Berman AMT Fasciano Portfolio - S Class 2007 10 0.95 to 1.01 9 - 1.25% to 1.65% (6.29%) to 5.08% 2006/20/ 30 0.96 to 0.96 28 - 1.25% to 1.65% 3.85% to 6.74% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Neuberger Berman AMT Guardian Portfolio - S Class 2007 1,236 0.98 to 1.12 1,355 0.43% 0.90% to 1.80% (1.53%) to 7.71% 2006/18/ 12 1.06 to 1.06 13 0.45% 1.10% to 1.25% 1.81% to 15.16% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Oppenheimer Capital Appreciation Fund/VA - Service Shares 2007 47 1.13 to 1.16 54 0.01% 1.25% to 1.80% 3.57% to 11.80% 2006/23/ 7 1.01 to 1.01 7 - 1.25% to 1.80% (1.84%) to 0.24% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to -
SA - 65 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, --------------------------------------- ---------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) --------------------------------------- ---------------------------------------------------- Oppenheimer Global Securities Fund/VA - Service Shares 2007 330 1.10 to 1.12 366 0.52% 0.90% to 1.80% (3.20%) to 4.91% 2006/15/ 107 1.06 to 1.06 113 - 1.10% to 1.80% (0.25%) to 17.36% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Oppenheimer Main Street Small Cap Fund/VA - Service Shares 2007 954 0.89 to 1.01 924 0.05% 0.90% to 1.80% (10.80%) to (2.48%) 2006/19/ 24 0.99 to 1.04 25 - 1.10% to 1.80% 0.39% to 11.15% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Phoenix Capital Growth Series 2007 20,566 0.71 to 10.73 132,252 0.25% 0.90% to 1.80% (2.95%) to 9.75% 2006 25,555 0.64 to 9.79 147,167 0.18% 0.90% to 1.80% (0.44%) to 2.29% 2005 30,573 0.63 to 9.58 185,518 0.06% 0.90% to 1.80% (4.41%) to 2.78% 2004 45,488 0.61 to 9.33 241,380 0.80% 0.90% to 1.80% 3.08% to 4.03% 2003 55,308 0.59 to 8.98 282,819 0.10% 0.90% to 1.80% 9.56% to 25.35% Phoenix Growth and Income Series 2007 10,057 1.19 to 1.57 14,469 0.90% 0.90% to 1.80% 4.73% to 5.69% 2006 12,710 1.12 to 1.48 17,350 1.10% 0.90% to 1.80% 15.08% to 16.13% 2005 14,300 0.97 to 1.28 17,067 0.93% 0.90% to 1.80% (0.77%) to 3.86% 2004 23,241 0.93 to 1.23 27,258 1.32% 0.90% to 1.80% 8.49% to 9.48% 2003 18,931 0.85 to 1.13 20,410 1.14% 0.90% to 1.80% 1.75% to 26.32% Phoenix Mid-Cap Growth Series 2007 9,969 0.89 to 1.64 15,270 - 0.90% to 1.80% 19.60% to 20.70% 2006 12,170 0.74 to 1.36 15,477 - 0.90% to 1.80% 2.26% to 3.20% 2005 6,358 0.72 to 1.32 7,747 - 0.90% to 1.80% 2.31% to 3.24% 2004 8,811 0.70 to 1.29 10,607 - 0.90% to 1.80% 4.80% to 5.76% 2003 10,964 0.66 to 1.22 12,681 - 0.90% to 1.80% 26.52% to 27.68% Phoenix Money Market Series 2007 11,859 1.02 to 2.81 23,551 4.77% 0.90% to 1.80% 1.00% to 3.93% 2006 12,527 1.01 to 2.71 23,737 4.30% 0.90% to 2.25% 0.02% to 3.48% 2005 16,027 0.97 to 2.62 27,445 2.52% 0.90% to 2.25% 0.01% to 1.66% 2004 12,427 0.97 to 2.58 26,221 0.77% 0.90% to 1.80% (1.02%) to (0.11%) 2003 17,498 0.98 to 2.58 37,311 0.71% 0.90% to 1.80% (1.13%) to (0.22%) Phoenix Multi-Sector Fixed Income Series 2007 9,991 1.00 to 6.49 35,300 5.14% 0.90% to 1.80% (0.79%) to 2.99% 2006 10,923 1.06 to 6.32 38,960 5.01% 0.90% to 1.80% 2.53% to 5.89% 2005 12,812 1.01 to 5.97 46,692 4.71% 0.90% to 1.80% (0.04%) to 0.87% 2004 15,399 1.27 to 5.93 58,192 6.09% 0.90% to 1.80% 4.91% to 5.88% 2003 15,681 1.21 to 5.61 61,686 6.64% 0.90% to 1.80% 4.85% to 13.54%
SA - 66 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, ------------------------------------------ ---------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ------------------------------------------ ---------------------------------------------------- Phoenix Multi-Sector Short Term Bond Series 2007 3,156 1.07 to 1.16 3,550 5.25% 0.90% to 1.80% 1.28% to 3.05% 2006 3,386 1.09 to 1.13 3,709 4.69% 0.90% to 1.80% 3.82% to 4.77% 2005 3,250 1.04 to 1.07 3,411 3.87% 0.90% to 1.80% (0.46%) to 0.45% 2004 1,985 1.04 to 1.07 2,087 3.97% 0.90% to 1.80% 3.02% to 5.87% 2003/5/ 1,939 1.02 to 1.02 1,981 4.98% 0.90% to 1.80% 1.81% to 4.48% Phoenix Strategic Allocation Series 2007 21,183 1.28 to 7.84 133,918 2.51% 0.90% to 1.80% (0.73%) to 5.03% 2006 27,110 1.22 to 7.47 164,152 2.54% 0.90% to 1.80% 10.67% to 11.68% 2005 33,852 1.10 to 6.70 183,939 2.29% 0.90% to 1.80% (0.04%) to 0.88% 2004 41,573 1.10 to 6.65 223,476 2.56% 0.90% to 1.80% 5.53% to 6.49% 2003 48,978 1.03 to 6.25 252,871 2.63% 0.90% to 1.80% 0.85% to 18.79% Phoenix-Aberdeen International Series 2007 20,227 1.05 to 4.05 64,615 1.52% 0.90% to 1.80% 7.02% to 13.90% 2006 22,830 1.47 to 3.56 65,471 2.17% 0.90% to 1.80% 6.43% to 26.23% 2005 21,108 1.17 to 2.82 51,693 3.63% 0.90% to 1.80% 16.44% to 17.51% 2004 29,492 0.99 to 2.40 62,541 2.81% 0.90% to 1.80% 18.61% to 19.70% 2003 30,404 0.83 to 2.01 54,069 1.92% 0.90% to 1.80% 23.54% to 30.68% Phoenix-Alger Small-Cap Growth Series 2007 2,027 2.30 to 2.41 4,794 - 0.90% to 1.80% 14.00% to 15.05% 2006 2,623 2.02 to 2.10 5,411 0.01% 0.90% to 1.80% 9.50% to 18.26% 2005 2,228 1.72 to 1.77 3,898 - 1.00% to 1.80% 13.57% to 14.49% 2004 2,343 1.51 to 1.54 3,590 - 1.00% to 1.80% (10.23%) to 1.10% 2003 2,422 1.51 to 1.53 3,679 - 1.00% to 1.80% 22.75% to 61.19% Phoenix-Duff & Phelps Real Estate Securities Series 2007 4,219 0.87 to 5.32 17,138 1.17% 0.90% to 1.80% (17.24%) to (6.61%) 2006 5,529 1.48 to 6.38 28,513 1.27% 0.90% to 1.80% 9.94% to 35.84% 2005 6,201 1.10 to 4.70 23,690 1.73% 0.90% to 1.80% (0.52%) to 14.06% 2004 6,371 1.96 to 4.12 22,487 2.46% 0.90% to 1.80% 32.27% to 33.48% 2003 6,545 1.47 to 3.09 18,287 3.43% 0.90% to 1.80% 35.78% to 37.02% Phoenix-S&P Dynamic Asset Allocation Series: Aggressive Growth 2007 345 1.12 to 1.19 653 1.91% 1.00% to 1.80% (5.11%) to 8.54% 2006/12/ 107 1.11 to 1.11 344 1.62% 1.80% to 1.80% 6.72% to 6.72% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Phoenix-S&P Dynamic Asset Allocation Series: Growth 2007 266 1.12 to 1.17 541 2.27% 1.10% to 1.80% (0.47%) to 7.32% 2006/14/ 20 1.04 to 1.09 242 1.64% 1.10% to 1.375% 0.57% to 10.13% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to -
SA - 67 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, ----------------------------------------- --------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ----------------------------------------- --------------------------------------------------- Phoenix-S&P Dynamic Asset Allocation Series: Moderate 2007 590 1.03 to 1.11 876 2.81% 1.20% to 1.60% 0.80% to 6.98% 2006/16/ 208 1.03 to 1.04 426 4.08% 1.10% to 1.60% 1.62% to 5.93% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Phoenix-S&P Dynamic Asset Allocation Series: Moderate Growth 2007 995 1.11 to 1.16 1,369 1.65% 1.10% to 1.65% 6.00% to 7.67% 2006/11/ 993 1.04 to 1.08 1,282 2.95% 1.10% to 1.65% 2.61% to 11.10% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Phoenix-Sanford Bernstein Mid-Cap Value Series 2007 8,932 0.88 to 2.32 17,198 0.14% 0.90% to 1.80% (3.53%) to 1.08% 2006 10,488 1.20 to 2.30 20,386 0.40% 0.90% to 1.80% 8.53% to 13.88% 2005 12,353 1.06 to 2.02 21,290 0.11% 0.90% to 1.80% (0.59%) to 6.76% 2004 13,161 1.41 to 1.89 21,232 0.18% 0.90% to 1.80% 18.24% to 19.32% 2003 12,596 1.19 to 1.59 17,252 0.19% 0.90% to 1.80% 38.44% to 39.71% Phoenix-Sanford Bernstein Small-Cap Value Series 2007 4,258 1.19 to 2.23 8,897 - 0.90% to 1.80% (3.87%) to 5.01% 2006 5,152 1.23 to 2.31 11,213 0.20% 0.90% to 1.80% 7.66% to 15.70% 2005 6,028 1.57 to 2.00 11,483 - 0.90% to 1.80% 5.53% to 6.50% 2004 5,973 1.48 to 1.89 10,772 - 0.90% to 1.80% 15.78% to 21.57% 2003 6,183 1.22 to 1.56 9,327 - 0.90% to 1.80% 41.28% to 42.57% Phoenix-Van Kampen Comstock Series 2007 7,128 1.06 to 1.80 11,099 1.54% 0.90% to 1.80% (3.98%) to 5.30% 2006 8,585 1.10 to 1.86 13,965 1.63% 0.90% to 1.80% 6.91% to 19.82% 2005 10,385 0.92 to 1.56 14,270 1.12% 0.90% to 1.80% 3.54% to 4.48% 2004 13,718 0.89 to 1.50 18,379 0.90% 0.90% to 1.80% 10.88% to 11.90% 2003 13,253 0.79 to 1.34 16,194 0.94% 0.90% to 1.80% 21.65% to 22.76% Phoenix-Van Kampen Equity 500 Index Series 2007 13,105 1.02 to 1.49 16,164 1.23% 0.90% to 2.25% 1.35% to 3.92% 2006 17,343 0.98 to 1.44 20,933 1.32% 0.90% to 2.25% 11.65% to 13.19% 2005 15,857 0.87 to 1.27 16,669 1.19% 0.90% to 2.25% 1.36% to 2.76% 2004 19,980 0.85 to 1.24 20,919 1.41% 0.90% to 2.25% 6.68% to 8.85% 2003 22,049 0.78 to 1.15 21,846 1.13% 0.90% to 2.25% 23.39% to 25.09% PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Class 2007 927 1.15 to 1.22 1,087 7.96% 0.90% to 1.80% 4.06% to 23.14% 2006/15/ 74 0.95 to 1.00 73 37.52% 0.90% to 1.80% (6.82%) to (2.41%) 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to -
SA - 68 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, ------------------------------------------- ----------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ------------------------------------------- ----------------------------------------------------- PIMCO VIT Real Return Portfolio - Advisor Class 2007 466 1.09 to 1.11 513 4.57% 1.00% to 1.60% (1.21%) to 9.42% 2006/21/ 129 1.00 to 1.02 129 4.99% 1.00% to 1.25% (2.32%) to (1.27%) 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - PIMCO VIT Total Return Portfolio - Advisor Class 2007 645 1.08 to 1.11 704 4.76% 0.90% to 1.80% 1.79% to 7.67% 2006/17/ 190 1.01 to 1.03 193 4.56% 1.00% to 1.25% (0.93%) to 3.73% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Rydex Variable Trust Inverse Government Long Bond Strategy Fund 2007 655 0.85 to 0.88 564 3.85% 1.10% to 1.80% (6.24%) to (5.57%) 2006 967 0.91 to 0.93 884 2.54% 1.10% to 1.80% 6.17% to 6.92% 2005 1,996 0.86 to 0.87 1,712 - 1.10% to 1.80% (6.94%) to (5.51%) 2004 2,022 0.92 to 0.93 1,862 - 1.25% to 1.80% (12.27%) to (11.78%) 2003/6/ 1,014 1.05 to 1.05 1,063 - 1.25% to 1.80% (7.66%) to 3.77% Rydex Variable Trust Nova Fund 2007 26 1.62 to 1.67 42 1.34% 1.10% to 1.80% (0.70%) to 0.01% 2006 35 1.63 to 1.67 57 0.90% 1.10% to 1.80% 6.15% to 17.97% 2005 55 1.39 to 1.42 76 0.33% 1.10% to 1.80% 2.10% to 6.34% 2004 46 1.36 to 1.37 63 0.06% 1.65% to 1.80% 10.61% to 12.56% 2003/7/ 3 1.21 to 1.21 3 - 1.80% to 1.80% 10.71% to 10.71% Rydex Variable Trust Sector Rotation Fund 2007 409 1.84 to 1.91 772 - 0.90% to 1.80% 4.19% to 21.51% 2006 532 1.53 to 1.58 828 - 0.90% to 1.80% 9.39% to 10.39% 2005 800 1.40 to 1.43 1,131 - 0.90% to 1.80% 2.97% to 13.65% 2004 433 1.25 to 1.27 545 - 1.00% to 1.80% 8.72% to 11.33% 2003/4/ 645 1.15 to 1.15 743 - 1.00% to 1.80% 0.92% to 15.29% Sentinel Variable Products Bond Fund 2007/25/ 242 1.02 to 1.02 247 30.81% 1.10% to 1.80% 0.42% to 2.83% 2006 - - to - - - - to - - to - 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Sentinel Variable Products Common Stock Fund 2007/25/ 886 1.02 to 1.02 906 8.74% 1.00% to 1.80% (4.70%) to 1.01% 2006 - - to - - - - to - - to - 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to -
SA - 69 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, --------------------------------------- --------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) --------------------------------------- --------------------------------------------------- Sentinel Variable Products Mid Cap Growth Fund 2007/27/ 193 1.08 to 1.08 208 - 1.25% to 1.50% (1.49%) to 0.99% 2006 - - to - - - - to - - to - 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Sentinel Variable Products Small Company Fund 2007/26/ 210 1.00 to 1.01 211 3.55% 1.00% to 1.80% (7.19%) to 1.39% 2006 - - to - - - - to - - to - 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Templeton Developing Markets Securities Fund - Class 1 2007 655 1.90 to 1.90 1,248 2.32% 1.375% to 1.375% (7.66%) to 27.30% 2006 687 1.50 to 1.50 1,027 1.21% 1.375% to 1.375% 26.67% to 26.67% 2005 836 1.18 to 1.18 987 1.45% 1.375% to 1.375% 26.01% to 26.01% 2004 969 0.94 to 0.94 907 1.93% 1.375% to 1.375% 23.12% to 23.12% 2003 958 0.76 to 0.76 729 1.28% 1.375% to 1.375% 51.63% to 51.63% Templeton Developing Markets Securities Fund - Class 2 2007 1,874 1.35 to 4.00 3,588 2.02% 0.90% to 1.80% 5.24% to 27.62% 2006 1,352 1.06 to 3.15 2,034 1.14% 0.90% to 1.80% 8.00% to 26.94% 2005 1,627 1.11 to 2.49 1,955 1.29% 0.90% to 1.375% 25.68% to 26.28% 2004 1,954 0.88 to 1.98 1,841 1.84% 0.90% to 1.375% 23.00% to 23.59% 2003 2,300 0.71 to 1.61 1,744 1.22% 0.90% to 1.375% 50.89% to 51.62% Templeton Foreign Securities Fund - Class 1 2007 6,351 3.98 to 3.98 25,253 2.18% 1.375% to 1.375% 14.19% to 14.19% 2006 7,523 3.48 to 3.48 26,194 1.40% 1.375% to 1.375% 20.03% to 20.03% 2005 8,549 2.90 to 2.90 24,800 1.31% 1.375% to 1.375% 8.96% to 8.96% 2004 9,841 2.66 to 2.66 26,200 1.15% 1.375% to 1.375% 17.24% to 17.24% 2003 11,447 2.27 to 2.27 25,994 1.95% 1.375% to 1.375% 30.73% to 30.73% Templeton Foreign Securities Fund - Class 2 2007 3,907 1.51 to 2.06 7,665 2.00% 0.90% to 1.80% 7.68% to 14.41% 2006 4,538 1.36 to 1.81 7,788 1.25% 0.90% to 1.80% 19.27% to 20.36% 2005 5,477 1.14 to 1.51 7,805 1.18% 0.90% to 1.80% 8.19% to 9.18% 2004 5,619 1.05 to 1.39 7,374 1.09% 0.90% to 1.80% 16.40% to 17.46% 2003 6,569 0.89 to 1.18 7,460 1.75% 0.90% to 1.80% 29.84% to 31.02% Templeton Global Asset Allocation Fund - Class 1 2007 7,383 5.54 to 5.54 40,892 17.54% 1.375% to 1.375% 8.80% to 8.80% 2006 8,239 5.09 to 5.09 41,943 7.29% 1.375% to 1.375% 19.73% to 19.73% 2005 9,444 4.25 to 4.25 40,153 3.93% 1.375% to 1.375% 2.43% to 2.43% 2004 10,430 4.15 to 4.15 43,296 2.98% 1.375% to 1.375% 14.34% to 14.34% 2003 12,143 3.63 to 3.63 44,085 2.80% 1.375% to 1.375% 30.49% to 30.49%
SA - 70 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, ------------------------------------- --------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ------------------------------------- --------------------------------------------------- Templeton Global Asset Allocation Fund - Class 2 2007 859 1.73 to 2.24 1,880 17.15% 0.90% to 1.375% 8.49% to 9.02% 2006 974 1.59 to 2.06 1,964 6.60% 0.90% to 1.375% 19.45% to 20.03% 2005 1,388 1.32 to 1.72 2,354 3.69% 0.90% to 1.375% 2.13% to 2.63% 2004 1,703 1.29 to 1.69 2,819 2.85% 0.90% to 1.375% 14.13% to 14.68% 2003 2,259 1.12 to 1.48 3,282 2.60% 0.90% to 1.375% 30.14% to 30.77% Templeton Global Income Securities Fund - Class 1 2007 1,535 3.36 to 3.36 5,163 2.79% 1.375% to 1.375% 9.74% to 9.74% 2006 1,505 3.06 to 3.06 4,613 3.10% 1.375% to 1.375% 11.59% to 11.59% 2005 1,794 2.75 to 2.75 4,926 6.27% 1.375% to 1.375% (4.24%) to (4.24%) 2004 1,816 2.87 to 2.87 5,209 11.48% 1.375% to 1.375% 13.51% to 13.51% 2003 2,066 2.53 to 2.53 5,221 7.82% 1.375% to 1.375% 21.03% to 21.03% Templeton Growth Securities Fund - Class 1 2007 14,582 5.72 to 5.72 83,367 1.49% 1.375% to 1.375% 1.14% to 1.14% 2006 16,670 5.65 to 5.65 94,231 1.48% 1.375% to 1.375% 20.53% to 20.53% 2005 18,989 4.69 to 4.69 89,055 1.23% 1.375% to 1.375% 7.56% to 7.56% 2004 21,936 4.36 to 4.36 95,644 1.27% 1.375% to 1.375% 14.65% to 14.65% 2003 24,992 3.80 to 3.80 95,043 1.68% 1.375% to 1.375% 30.80% to 30.80% Templeton Growth Securities Fund - Class 2 2007 8,046 0.95 to 2.24 15,021 1.33% 0.90% to 1.80% (1.76%) to 2.73% 2006 6,639 1.30 to 2.22 13,247 1.26% 0.90% to 1.80% 4.03% to 20.72% 2005 6,452 1.27 to 1.84 11,040 1.13% 0.90% to 1.80% 6.91% to 7.89% 2004 6,773 1.18 to 1.70 10,850 1.20% 0.90% to 1.80% 10.17% to 14.98% 2003 6,621 1.03 to 1.48 9,362 1.54% 0.90% to 1.80% 20.24% to 30.95% Van Kampen UIF Equity and Income Portfolio - Class II 2007 175 1.05 to 1.09 185 1.71% 1.00% to 1.80% (4.25%) to 2.06% 2006/22/ 92 1.03 to 1.03 95 - 1.25% to 1.25% 2.99% to 2.99% 2005 - - to - - - - to - - to - 2004 - - to - - - - to - - to - 2003 - - to - - - - to - - to - Wanger International Select 2007 3,144 1.88 to 3.41 10,104 0.72% 0.90% to 1.80% 6.54% to 20.68% 2006 3,234 1.62 to 2.84 8,628 0.26% 0.90% to 1.80% 33.56% to 34.78% 2005 2,933 1.20 to 2.12 5,880 1.98% 0.90% to 1.80% 9.93% to 15.38% 2004 2,798 1.04 to 1.84 4,901 0.31% 0.90% to 1.80% 22.10% to 23.22% 2003 2,641 0.85 to 1.50 3,837 0.30% 0.90% to 1.80% 38.70% to 39.97% Wanger International Small Cap 2007 10,490 1.03 to 7.24 66,850 0.88% 0.90% to 1.80% (2.97%) to 15.26% 2006 12,024 1.58 to 6.31 67,851 0.57% 0.90% to 1.80% 34.70% to 35.93% 2005 14,620 1.17 to 4.66 61,175 1.09% 0.90% to 1.80% 0.65% to 20.44% 2004 17,402 1.24 to 3.88 62,137 0.73% 0.90% to 1.80% 27.93% to 29.10% 2003 20,735 0.96 to 3.02 58,545 0.33% 0.90% to 1.80% 1.89% to 47.53%
SA - 71 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 5--Financial Highlights (Continued)
At December 31, For the periods ended December 31, ------------------------------------- --------------------------------------------------- Unit Net Investment Expense Total Units Value Assets Income Ratio /2/ Return /3/ (000's) (Lowest to Highest) (000's) Ratio /1/ (Lowest to Highest) (Lowest to Highest) ------------------------------------- --------------------------------------------------- Wanger Select 2007 3,003 1.43 to 3.08 8,578 - 0.90% to 1.80% (1.66%) to 9.01% 2006 2,979 1.34 to 2.86 7,845 0.40% 0.90% to 1.80% 9.87% to 18.63% 2005 3,368 1.50 to 2.42 7,538 - 0.90% to 1.80% 8.51% to 9.50% 2004 3,449 1.39 to 2.22 7,128 - 0.90% to 1.80% 14.29% to 18.23% 2003 3,532 1.16 to 1.89 6,222 - 0.90% to 1.80% 8.09% to 40.86% Wanger U.S. Smaller Companies 2007 14,542 1.20 to 4.83 57,373 - 0.90% to 1.80% (2.48%) to 7.38% 2006 18,547 1.55 to 4.63 70,386 0.25% 0.90% to 1.80% 5.94% to 6.91% 2005 24,888 1.46 to 4.34 88,820 - 0.90% to 1.80% 9.26% to 10.26% 2004 30,949 1.34 to 3.94 103,301 - 0.90% to 1.80% 9.63% to 17.27% 2003 38,326 1.16 to 3.36 112,548 - 0.90% to 1.80% 40.65% to 41.93%
/1 /The investment income ratios represent the annualized dividends, excluding distributions of capital gains, received by the Investment Option from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the daily average net assets. These ratios exclude those expenses, such as mortality and expense charges that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the Investment Option is affected by the timing of the declaration of dividends by the underlying fund in which the Investment Option invests. /2 /The expense ratios represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction of unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund have been excluded. /3/ The total returns are for the periods indicated, including changes in the value of the underlying fund, and the expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. Total return is presented as the minimum and maximum return for the units invested in the Investment Option. While the Investment Option may be active in a given year, certain units may be initiated during the year. The corresponding return on those units, which is for the partial year, may cause the minimum and maximum total return for all the units in that Investment Option to deviate outside the range of the expense ratios presented. /4/ From inception /16/ From inception June 2, 2003 to July 6, 2006 to December 31, 2003. December 31, 2006. /5/ From inception June 3, 2003 to December 31, 2003. /17/ From inception July 12, 2006 to December 31, 2006. /6/ From inception July 1, 2003 to December 31, 2003. /18/ From inception July 20, 2006 to December 31, 2006. /7/ From inception October 23, 2003 to December 31, 2003. /19/ From inception August 2, 2006 to December 31, 2006. /8/ From inception December 3, 2004 to December 31, 2004. /20/ From inception September 22, 2006 to December 31, 2006. /9/ From inception April 20, 2005 to December 31, 2005. /21/ From inception October 5, 2006 to December 31, 2006. /10/ From inception April 29, 2005 to December 31, 2005. /22/ From inception November 3, 2006 to December 31, 2006. /11/ From inception February 16, 2006 to December 31, 2006. /23/ From inception November 14, 2006 to December 31, 2006. /12/ From inception April 24, 2006 to December 31, 2006. /24/ From inception January 29, 2007 to December 31, 2007. /13/ From inception April 28, 2006 to December 31, 2006. /25/ From inception September 11, 2007 to December 31, 2007. /14/ From inception May 18, 2006 to December 31, 2006. /26/ From inception September 24, 2007 to December 31, 2007. /15/ From inception May 30, 2006 to December 31, 2006. /27/ From inception September 27, 2007 to December 31, 2007. SA - 72 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 6--Fees and Related Party Transactions Phoenix and its affiliate, Phoenix Equity Planning Corporation ("PEPCO"), a registered broker/dealer in securities, provide all services to the Separate Account. PEPCO is the principal underwriter and distributor for the Separate Account. Certain fees are deducted from the Contracts. To understand all of the charges that are assessed for your individual policy you should refer to your policy contract provided to you at issue or the most recent product prospectus provided to you annually. Those fees are described below: A) Contract Maintenance Charges The Separate Account is assessed periodic Contract Maintenance Charges which are designed to compensate Phoenix for certain costs associated with maintenance. These expenses are included in a separate line item entitled "Contract Maintenance Charges" in the accompanying statements of changes in net assets. The total aggregate expense for the periods ended December 31, 2007 and 2006 were $1,101,790 and $1,192,162, respectively. The charges assessed the Separate Account for Contract Maintenance Charges are outlined as follows: Administration Charge - Phoenix will make deductions to cover administrative expenses at a maximum annual rate of $35 for an individual contract, and a maximum of $500 per group contract (Group Strategic Edge contracts only). Policy Surrender Charge - In accordance with terms of the contracts, Phoenix makes deductions for surrender charges. Because a policy's account value and policy duration may vary, the surrender charge may also vary. Other Charges - Phoenix may deduct other costs depending on the policy terms. All of the above expenses are taken out as a redemption of units. B) Optional Rider and Benefit Charges Phoenix may deduct other charges and fees based on the selection of Other Optional Policy Benefits and Riders. These expenses are included in a separate line item entitled "Transfers for contract benefits and terminations" in the accompanying statements of changes in net assets. This expense is taken out as a redemption of units. C) Mortality and Expense Fee and Administration Fee charges Phoenix will make deductions at a maximum rate of 2.25% of the contracts value for the mortality and expense risks and 0.125% for administration fees, which the company undertakes. These expenses are included in separate line items "Mortality and Expense Fees" and "Administration Fees" in the accompanying statements of operations. The total aggregate expense for the periods ended December 31, 2007 and 2006 were $13,147,966 and $12,997,477, respectively. This expense is taken out as a reduction of unit values. Note 7--Distribution of Net Income The Separate Account does not declare distributions 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 8--Diversification Requirements Under the provisions of Section 817(h) of the Internal Revenue Code of 1986 (the "Code") as amended, a variable contract, other than a contract issued in connection with certain types of employee benefit plans, will not be treated as a variable 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. Each investment option is required to satisfy the requirements of Section 817(h). The Code provides that the "adequately diversified" requirement may be met if the underlying investments satisfy either the statutory safe harbor test or diversification requirements set forth in regulations issued by the Secretary of the Treasury. Phoenix intends that each of the investment options shall comply with the diversification requirements and, in the event of any failure to comply, will take immediate corrective action to assure compliance. SA - 73 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 9--Liquidations and Mergers On October 20, 2006, the Growth and Income Series acquired all of the net assets of the Phoenix-Kayne Rising Dividends Series ("Kayne Rising Dividends") pursuant to an Agreement and Plan of Reorganization approved by the Kayne Rising Dividends shareholders on October 5, 2006. The acquisition was accomplished by a tax-free exchange of 835,783 shares of Growth and Income outstanding on October 20, 2006 and valued at $11,722,358 for 1,002,388 shares of Kayne Rising Dividends outstanding on October 20, 2006. Kayne Rising Dividend's net assets of $11,722,362, including $1,654,538 of net unrealized appreciation were combined with those of Growth and Income. The aggregate net assets of Growth and Income immediately after the merger were $163,685,403. On October 20, 2006, the Aberdeen International Series acquired all of the net assets of the Phoenix-Lazard International Equity Select Series ("Lazard International Equity Select") pursuant to an Agreement and Plan of Reorganization approved by the Lazard International Equity Select shareholders on October 5, 2006. The acquisition was accomplished by a tax-free exchange of 10,426,631 shares of Aberdeen International outstanding on October 20, 2006 and valued at $175,009,666 for 10,514,476 shares of Lazard International Equity Select outstanding on October 20, 2006. Lazard International Equity Select's net assets of $175,009,669, including $33,022,037 of net unrealized appreciation were combined with those of Aberdeen International. The aggregate net assets of Aberdeen International immediately after the merger were $389,209,267. On October 27, 2006, the Capital Growth Series acquired all of the net assets of the Phoenix-AIM Growth Series ("AIM Growth") pursuant to an Agreement and Plan of Reorganization approved by the AIM Growth shareholders on October 5, 2006. The acquisition was accomplished by a tax-free exchange of 3,996,273 shares of Capital Growth outstanding on October 27, 2006 and valued at $61,016,844 for 8,399,603 shares of AIM Growth outstanding on October 27, 2006. AIM Growth's net assets of $61,016,844, including $8,256,215 of net unrealized appreciation were combined with those of Capital Growth. The aggregate net assets of Capital Growth immediately after the merger were $452,685,507. On October 27, 2006, the Mid-Cap Growth Series acquired all of the net assets of the Phoenix Strategic Theme Series ("Strategic Theme") pursuant to an Agreement and Plan of Reorganization approved by the Strategic Theme shareholders on October 5, 2006. The acquisition was accomplished by a tax-free exchange of 3,950,319 shares of Mid-Cap Growth outstanding on October 27, 2006 and valued at $53,113,639 for 4,883,118 shares of Strategic Theme outstanding on October 27, 2006. Strategic Theme's net assets of $53,113,639, including $7,454,917 of net unrealized appreciation were combined with those of Mid-Cap Growth. The aggregate net assets of Mid-Cap Growth immediately after the merger were $98,521,888. On October 27, 2006, the Alger Small-Cap Growth Series acquired all of the net assets of the Phoenix-Engemann Small-Cap Growth Series ("Engemann Small-Cap Growth") and the Phoenix-Kayne Small-Cap Quality Value Series ("Kayne Small-Cap Quality Value") pursuant to an Agreement and Plan of Reorganization approved by the Engemann Small-Cap Growth and Kayne Small-Cap Quality Value shareholders on October 26, 2006. The acquisition was accomplished by a tax-free exchange of 1,912,431 shares of Alger Small-Cap Growth outstanding on October 27, 2006 and valued at $34,546,959 for 2,108,424 shares of Engemann Small-Cap Growth valued at $16,831,325 and 1,054,130 shares of Kayne Small-Cap Quality Value valued at $17,715,634. Engemann Small-Cap Growth's net assets of $16,831,325, including $4,238,547 of net unrealized appreciation and Kayne Small-Cap Quality Value's net assets of $17,715,634, including $4,213,331 of net unrealized appreciation were combined with those of Alger Small-Cap Growth. The aggregate net assets of Alger Small-Cap Growth immediately after the merger were $59,092,472. On October 27, 2006, the Van Kampen Equity 500 Index Series acquired all of the net assets of the Phoenix-Northern Dow 30 Series ("Northern Dow 30") and the Phoenix-Northern Nasdaq-100 Index(R) Series ("Northern Nasdaq-100 Index(R)") pursuant to an Agreement and Plan of Reorganization approved by the Northern Dow 30 and Northern Nasdaq-100 Index(R) shareholders on October 26, 2006. The acquisition was accomplished by a tax-free exchange of 3,550,335 shares of Van Kampen Equity 500 Index outstanding on October 27, 2006 and valued at $44,067,409 for 2,100,979 shares of Northern Dow 30 valued at $21,817,938 and 4,901,410 shares of Northern Nasdaq-100 Index(R) valued at $22,249,471. Northern Dow 30's net assets of $21,817,938, including $4,937,365 of net unrealized appreciation and Northern Nasdaq-100 Index(R)'s net assets of $22,249,471, including $5,784,158 of net unrealized appreciation were combined with those of Van Kampen Equity 500 Index. The aggregate net assets of Van Kampen Equity 500 Index immediately after the merger were $145,082,755. SA - 74 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 10--Manager of Managers Exemptive Order The Phoenix Edge Series Fund ("PESF") and Phoenix Variable Advisors, Inc. ("PVA") have received an exemptive order from the Securities and Exchange Commission ("SEC") granting exemptions from certain provisions of the Investment Company Act of 1940, as amended, pursuant to which PVA will, subject to supervision and approval of the PESF's Board of Trustees, be permitted to enter into and materially amend subadvisory agreements without such agreements being approved by the shareholders of the applicable series of the PESF. The PESF and PVA will therefore have the right to hire, terminate, or replace subadvisors without shareholder approval, including, without limitation, the replacement or reinstatement of any subadvisor with respect to which a subadvisory agreement has automatically terminated as a result of an assignment. PVA will continue to have the ultimate responsibility to oversee the subadvisors and recommend their hiring, termination and replacement. Note 11--Mixed and Shared Funding Shares of the PESF are not directly offered to the public. Shares of the PESF are currently offered through separate accounts to fund variable accumulation annuity contracts and variable universal life insurance policies issued by Phoenix Life Insurance Company, PHL Variable Insurance Company, and Phoenix Life and Annuity Company. Shares of the PESF may be offered to separate accounts of other insurance companies in the future. The interests of variable annuity contract owners and variable life policy owners could diverge based on differences in federal and state regulatory requirements, tax laws, investment management or other unanticipated developments. The PESF's Trustees currently do not foresee any such differences or disadvantages at this time. However, the PESF's Trustees intend to monitor for any material conflicts and will determine what action, if any, should be taken in response to such conflicts. If such a conflict should occur, one or more separate accounts may be required to withdraw its investment in the PESF or shares of another fund may be substituted. Note 12--Other On May 1, 2006, the Rydex Variable Trust Juno Fund changed its name to the Inverse Government Long Bond Fund, and the class identifier of "Service Shares" was added to the Lazard Retirement Series: Lazard Retirement Small Cap Portfolio. On June 26, 2006, Phoenix Investment Counsel, Inc. ("PIC") became the investment advisor to the Phoenix Capital Growth Series and Harris Investment Management, Inc ("HIM") is the new subadvisor. On September 1, 2006, the Board of Trustees of PESF approved a name and subadvisor change for the Phoenix-Alliance Bernstein Enhanced Index Series. The new series name is Phoenix-Van Kampen Equity 500 Index Series. Morgan Stanley Investment Management Inc. (dba, "Van Kampen") became the new subadvisor. On October 23, 2006, the Board of Trustees of PESF approved the following name changes: Phoenix-Engemann Growth and Income Series to Phoenix Growth and Income Series; Phoenix-Engemann Strategic Allocation Series to Phoenix Strategic Allocation Series; Phoenix-Goodwin Money Market Series to Phoenix Money Market Series; Phoenix-Goodwin Multi-Sector Fixed Income Series to Phoenix Multi-Sector Fixed Income Series; and Phoenix-Goodwin Multi-Sector Short Term Bond Series to Phoenix Multi-Sector Short Term Bond Series. On October 23, 2006, PIC replaced Engemann Asset Management as the subadvisor to the Phoenix Growth and Income Series. Engemann Asset Management was removed as subadvisor for the Phoenix Strategic Allocation Series, which will be managed by the advisor, PIC. The insurance company affiliates of the Fund distribute the Fund as investment options in variable annuity and life insurance products ("Variable Products") through non-affiliated advisors, broker-dealers and other financial intermediaries. There is substantial competition for business within most of these distributors. One of the most significant distributors of the Variable Products (and the Fund) includes a subsidiary of State Farm Mutual Automobile Insurance Company, or State Farm. The insurance company affiliates of the Fund have had distribution arrangements with State Farm since 2001. In 2007, the agreement with State Farm to provide life and annuity products and related services to State Farm's affluent and high-net-worth customers through qualified State Farm agents was extended until 2016. SA - 75 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT NOTES TO FINANCIAL STATEMENTS Note 12--Other (Continued) Due to an internal reorganization, effective August 1, 2007, Phoenix Variable Advisors, Inc. ("PVA") replaced Duff & Phelps Investment Management Company ("DPIM") as the advisor of the current Phoenix-Duff & Phelps Real Estate Securities Series. The Board approved the termination of the current investment advisory agreement for Phoenix-Duff & Phelps Real Estate Securities Series and approved a new investment advisory agreement at a meeting held June 5, 2007; Due to an internal reorganization, effective August 1, 2007, PVA replaced Phoenix Investment Counsel, Inc. ("PIC") as the advisor of the Phoenix-Aberdeen International Series, Phoenix Capital Growth Series, Phoenix Growth and Income Series, Phoenix Money Market Series, Phoenix Multi-Sector Fixed Income Series, Phoenix Multi-Sector Short Term Bond Series and Phoenix Strategic Allocation Series. The Board approved the termination of the current investment advisory agreements for Phoenix-Aberdeen International Series, Phoenix Capital Growth Series, Phoenix Growth and Income Series, Phoenix Money Market Series, Phoenix Multi-Sector Fixed Income Series, Phoenix Multi-Sector Short Term Bond Series and Phoenix Strategic Allocation Series and approved a new investment advisory agreement for each series at a meeting held June 5, 2007; Due to an internal reorganization, effective August 1, 2007, Aberdeen Asset Management Inc. ("AAM") remained the subadvisor to the Phoenix-Aberdeen International Series and the Board approved the termination of the current subadvisory agreement with PIC and approved a new subadvisory agreement between PVA and AAM at a meeting held June 5, 2007; Due to an internal reorganization, effective August 1, 2007, DPIM was appointed the subadvisor to the Phoenix-Duff & Phelps Real Estate Securities Series and the Board approved a new subadvisory agreement between PVA and DPIM at a meeting held June 5, 2007; Due to an internal reorganization, effective August 1, 2007, Harris Investment Management, Inc. ("HIM") remained the subadvisor to the Phoenix Capital Growth Series and the Board approved the termination of the current subadvisory agreement and approved a new subadvisory agreement between PVA and HIM at a meeting held June 5, 2007; Due to an internal reorganization, effective August 1, 2007, PIC was appointed the subadvisor to the Phoenix Growth and Income Series and the Board approved a new subadvisory agreement between PVA and PIC at a meeting held June 5, 2007; Due to an internal reorganization, effective August 1, 2007, PIC and Goodwin Capital Advisers, Inc. ("GCA") were appointed the subadvisor to the Phoenix Strategic Allocation Series and the Board approved a new subadvisory agreement for each subadvisor between (1) PVA and PIC and (2) PVA and GCA at a meeting held June 5, 2007; and Due to an internal reorganization, effective August 1, 2007, GCA was appointed the subadvisor to the Phoenix Money Market Series, Phoenix Multi-Sector Fixed Income Series and Phoenix Multi-Sector Short Term Bond Series and the Board approved a new subadvisory agreement for each series between PVA and GCA at a meeting held June 5, 2007 SA - 76 [LOGO] Report of Independent Registered Public Accounting Firm To the Board of Directors of Phoenix Life Insurance Company and Participants of Phoenix Life Variable Accumulation Account: In our opinion, the accompanying statements of assets and liabilities and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of each of the subaccounts constituting the Phoenix Life Variable Accumulation Account at December 31, 2007, and the results of each of their operations and the changes in each of their net assets for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of Phoenix Life Insurance Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2007 by correspondence with the mutual funds' advisors, provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Hartford, CT March 21, 2008 PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT Phoenix Life Insurance Company One American Row Hartford, Connecticut 06103-2899 Phoenix Equity Planning Corporation 56 Prospect Street Hartford, Connecticut 06115-0480 Underwriter Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP 185 Asylum Street Hartford, Connecticut 06103 [LOGO] PHOENIX Phoenix Life Insurance Company PO Box 22012 Albany, NY 12201-2012 PRSRT STD U.S. Postage PAID Andrew Associates -------------------------------------------------------------------------------- Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value. Phoenix Life Insurance Company A member of The Phoenix Companies, Inc. phoenixwm.com OL4261 (C) 2008 The Phoenix Companies, Inc. 2-08 PHOENIX LIFE INSURANCE COMPANY (A WHOLLY-OWNED SUBSIDIARY OF THE PHOENIX COMPANIES, INC.) CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2007 AND 2006 F-1 TABLE OF CONTENTS PAGE ---------- Report of Independent Registered Public Accounting Firm............. F-3 Consolidated Balance Sheet as of December 31, 2007 and 2006......... F-4 Consolidated Statement of Income and Comprehensive Income for the years ended December 31, 2007, 2006 and 2005...................... F-5 Consolidated Statement of Cash Flows for the years ended December 31, 2007, 2006 and 2005.................................. F-6 Consolidated Statement of Changes in Stockholder's Equity for the years ended December 31, 2007, 2006 and 2005...................... F-7 Notes to Financial Statements....................................... F-8 - F-43 F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Phoenix Life Insurance Company: In our opinion, the accompanying consolidated balance sheet and the related consolidated statement of income and comprehensive income, statement of cash flows and statement of changes in stockholder's equity present fairly, in all material respects, the financial position of Phoenix Life Insurance Company and its subsidiaries (the Company) at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Hartford, Connecticut March 25, 2008 F-3 PHOENIX LIFE INSURANCE COMPANY CONSOLIDATED BALANCE SHEET ($ in millions, except share data) DECEMBER 31, 2007 AND 2006 2007 2006 --------- --------- ASSETS: Available-for-sale debt securities, at fair value........ $11,924.7 $12,549.9 Available-for-sale equity securities, at fair value...... 191.8 174.5 Mortgage loans, at unpaid principal balances............. 15.6 71.9 Venture capital partnerships, at equity in net assets.... 173.3 116.8 Policy loans, at unpaid principal balances............... 2,380.5 2,322.0 Other invested assets.................................... 417.1 306.9 --------- --------- 15,103.0 15,542.0 Available-for-sale debt and equity securities pledged as collateral, at fair value.............................. 219.1 267.8 --------- --------- Total investments........................................ 15,322.1 15,809.8 Cash and cash equivalents................................ 366.8 289.0 Accrued investment income................................ 204.2 208.3 Premiums, accounts and notes receivable.................. 178.2 234.3 Deferred policy acquisition costs........................ 2,072.2 1,743.6 Goodwill................................................. 5.2 5.2 Other assets............................................. 165.9 147.0 Separate account assets.................................. 10,820.3 9,458.6 --------- --------- TOTAL ASSETS............................................. $29,134.9 $27,895.8 ========= ========= LIABILITIES: Policy liabilities and accruals.......................... $13,791.2 $13,515.7 Policyholder deposit funds............................... 1,808.9 2,228.4 Indebtedness............................................. 174.0 174.0 Deferred income taxes.................................... 82.7 69.6 Other liabilities........................................ 349.8 310.4 Non-recourse collateralized obligations.................. 317.9 344.0 Separate account liabilities............................. 10,820.3 9,458.6 --------- --------- TOTAL LIABILITIES........................................ 27,344.8 26,100.7 --------- --------- COMMITMENTS AND CONTINGENCIES (NOTES 21 AND 22) MINORITY INTEREST: MINORITY INTEREST IN NET ASSETS OF SUBSIDIARIES.......... 10.4 7.7 --------- --------- STOCKHOLDER'S EQUITY: Common stock, ($1,000 par value, 10,000 shares authorized and outstanding)............................ 10.0 10.0 Additional paid-in capital............................... 1,716.0 1,714.9 Retained earnings........................................ 126.7 78.3 Accumulated other comprehensive loss..................... (73.0) (15.8) --------- --------- TOTAL STOCKHOLDER'S EQUITY............................... 1,779.7 1,787.4 --------- --------- TOTAL LIABILITIES, MINORITY INTEREST AND STOCKHOLDER'S EQUITY................................................. $29,134.9 $27,895.8 ========= ========= The accompanying notes are an integral part of these financial statements. F-4 PHOENIX LIFE INSURANCE COMPANY CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME ($ in millions) YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
2007 2006 2005 -------- -------- -------- REVENUES: Premiums............................................... $ 798.3 $ 839.7 $ 928.7 Insurance and investment product fees.................. 505.8 406.4 319.7 Investment income, net of expenses..................... 1,034.8 1,028.1 1,090.2 Net realized investment gains (losses)................. (8.2) 73.8 (53.2) -------- -------- -------- TOTAL REVENUES 2,330.7 2,348.0 2,285.4 -------- -------- -------- BENEFITS AND EXPENSES: Policy benefits, excluding policyholder dividends...... 1,303.7 1,331.5 1,376.7 Policyholder dividends................................. 380.0 399.1 364.4 Policy acquisition cost amortization................... 198.6 148.5 99.6 Interest expense on indebtedness....................... 12.4 14.5 14.7 Interest expense on non-recourse collateralized obligations.......................................... 15.4 18.7 29.4 Other operating expenses............................... 229.5 209.9 241.4 -------- -------- -------- TOTAL BENEFITS AND EXPENSES............................ 2,139.6 2,122.2 2,126.2 -------- -------- -------- Income from continuing operations before income taxes and minority interest................................ 191.1 225.8 159.2 Applicable income tax expense.......................... (42.1) (73.2) (39.3) -------- -------- -------- Income from continuing operations before minority interest............................................. 149.0 152.6 119.9 Minority interest in net income of consolidated subsidiaries......................................... (0.9) (0.3) (0.1) -------- -------- -------- Income from continuing operations...................... 148.1 152.3 119.8 Income (loss) from discontinued operations............. (3.5) 1.1 1.1 -------- -------- -------- NET INCOME............................................. $ 144.6 $ 153.4 $ 120.9 ======== ======== ======== COMPREHENSIVE INCOME: NET INCOME............................................. $ 144.6 $ 153.4 $ 120.9 OTHER COMPREHENSIVE LOSS............................... (57.2) (17.3) (47.0) -------- -------- -------- COMPREHENSIVE INCOME................................... $ 87.4 $ 136.1 $ 73.9 ======== ======== ========
The accompanying notes are an integral part of these financial statements. F-5 PHOENIX LIFE INSURANCE COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS ($ in millions) YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
2007 2006 2005 --------- --------- --------- OPERATING ACTIVITIES: Income from continuing operations........................... $ 148.1 $ 152.3 $ 119.8 Proceeds from sale of trading equity securities............. -- -- 129.7 Net realized investment (gains) losses...................... 8.2 (73.8) 53.2 Amortization and depreciation............................... 12.3 8.7 6.9 Investment gains............................................ (73.6) (45.1) (129.9) Deferred income taxes....................................... 32.9 42.1 38.2 (Increase) decrease in receivables.......................... 18.6 (15.4) (18.6) Increase in deferred policy acquisition costs............... (265.2) (180.6) (88.1) Increase in policy liabilities and accruals................. 393.0 339.8 327.6 Other assets and other liabilities net change............... 9.5 (21.3) 23.9 --------- --------- --------- Cash from continuing operations............................. 283.8 206.7 462.7 Discontinued operations, net................................ (10.8) 21.8 5.4 --------- --------- --------- CASH FROM OPERATING ACTIVITIES.............................. 273.0 228.5 468.1 --------- --------- --------- INVESTING ACTIVITIES: Investment purchases........................................ (4,278.0) (4,713.2) (4,852.4) Investment sales, repayments and maturities................. 4,574.8 5,561.3 4,801.7 Debt and equity securities pledged as collateral sales...... 33.3 26.5 956.0 Subsidiary sales............................................ -- -- 10.7 Premises and equipment additions............................ (19.6) (18.2) (25.1) Premises and equipment dispositions......................... -- -- 17.3 Discontinued operations, subsidiary purchase................ (5.0) -- -- Sale of discontinued operations............................. 14.9 -- -- Discontinued operations, net................................ 19.6 (32.8) 1.2 --------- --------- --------- CASH FROM INVESTING ACTIVITIES.............................. 340.0 823.6 909.4 --------- --------- --------- FINANCING ACTIVITIES: Policyholder deposit fund deposits.......................... 745.9 638.6 609.6 Policyholder deposit fund withdrawals....................... (1,167.4) (1,470.9) (1,041.3) Indebtedness repayments..................................... -- (30.2) -- Collateralized obligations repayments....................... (23.3) (39.5) (1,009.1) Common stock dividends paid................................. (92.2) (87.5) (35.1) Contributions from minority interests....................... 1.8 0.8 -- --------- --------- --------- CASH FOR FINANCING ACTIVITIES............................... (535.2) (988.7) (1,475.9) --------- --------- --------- CHANGE IN CASH AND CASH EQUIVALENTS......................... 77.8 63.4 (98.4) Cash and cash equivalents, beginning of year................ 289.0 225.6 324.0 --------- --------- --------- CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 366.8 $ 289.0 $ 225.6 ========= ========= =========
Included in cash and cash equivalents above is cash pledged as collateral of $12.0 million, $3.1 million and $15.2 million at December 31, 2007, 2006 and 2005, respectively. The accompanying notes are an integral part of these financial statements. F-6 PHOENIX LIFE INSURANCE COMPANY CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY ($ in millions) YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 2007 2006 2005 -------- -------- -------- ADDITIONAL PAID-IN CAPITAL: Tax benefit on employee stock option awards...... $ 1.1 $ -- $ -- RETAINED EARNINGS (ACCUMULATED DEFICIT): Adjustment for initial application of FIN 48 (Note 2)....................................... (4.0) -- -- Net income....................................... 144.6 153.4 120.9 Common stock dividends declared.................. (92.2) (87.5) (35.1) ACCUMULATED OTHER COMPREHENSIVE INCOME: Other comprehensive loss......................... (57.2) (17.3) (47.0) -------- -------- -------- CHANGE IN STOCKHOLDER'S EQUITY................... (7.7) 48.6 38.8 Stockholder's equity, beginning of year.......... 1,787.4 1,738.8 1,700.0 -------- -------- -------- STOCKHOLDER'S EQUITY, END OF YEAR................ $1,779.7 $1,787.4 $1,738.8 ======== ======== ======== The accompanying notes are an integral part of these financial statements. F-7 PHOENIX LIFE INSURANCE COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ($ in millions) YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Phoenix Life Insurance Company and its subsidiaries (together, Phoenix Life) offer a broad range of life insurance and annuity products in the United States of America. Phoenix Life Insurance Company is a wholly-owned subsidiary of The Phoenix Companies, Inc. (The Phoenix Companies), a publicly traded company on the New York Stock Exchange. Significant intercompany accounts and transactions have been eliminated in consolidating these financial statements. We are a manufacturer of individual life insurance and annuity products, such as universal life, variable life, term life and variable annuities. Our consolidated financial statements include the results of our closed block, which consists primarily of participating whole life products. 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES We have prepared these financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) which differ materially from the accounting practices prescribed by various insurance regulatory authorities. We have reclassified certain amounts for 2006 and 2005 to conform with the 2007 presentation. USE OF ESTIMATES In preparing these financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. We employ significant estimates and assumptions in the determination of deferred policy acquisition costs; policyholder liabilities and accruals; the valuation of intangible assets; the valuation of investments in debt and equity securities and venture capital partnerships; the valuation of deferred tax assets; and accruals for contingent liabilities. ADOPTION OF NEW ACCOUNTING STANDARDS We adopted the provisions of the Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48), on January 1, 2007. As a result of the implementation of FIN 48, we recognized an increase in reserves for uncertain tax benefits through a cumulative effect adjustment of approximately $4.0 million, which was accounted for as a reduction to the January 1, 2007 balance of retained earnings. Including the cumulative effect adjustment, we had approximately $20.7 million of total gross unrecognized tax benefits as of January 1, 2007 that would, if recognized, impact the annual effective tax rate upon recognition. See Note 14 to these financial statements for more information. In September 2006, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 provides guidance for how errors should be evaluated to assess materiality from a quantitative perspective. SAB 108 permits companies to initially apply its provisions by either restating prior financial statements or recording the cumulative effect of initially applying the approach as adjustments to the carrying values of assets and liabilities as of January 1, 2006 with an offsetting adjustment to retained earnings. We adopted SAB 108 on December 31, 2006 with no effect on our financial statements. F-8 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In March 2006, the FASB issued Statement of Financial Accounting Standards No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140" (SFAS 156). SFAS 156 provides guidance on recognition and disclosure of servicing assets and liabilities and was effective beginning January 1, 2007. We adopted this standard effective January 1, 2007 with no material impact on our financial position and results of operations. Effective January 1, 2006, we adopted SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments" (SFAS 155). SFAS 155 resolves certain issues surrounding the accounting for beneficial interests in securitized financial assets. Our adoption of SFAS 155 did not have a material effect on our financial statements. Effective January 1, 2006, we adopted FASB Staff Position Nos. FAS 115-1 and FAS 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments" (FSP 115-1). FSP 115-1 provides guidance as to the determination of other-than-temporarily impaired securities and requires certain financial disclosures with respect to unrealized losses. These accounting and disclosure requirements largely codify our existing practices as to other-than-temporarily impaired securities and thus, our adoption did not have a material effect on our financial statements. In September 2005, the Accounting Standards Executive Committee (AcSEC) of the AICPA's issued Statement of Position 05-1, "Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts" (SOP 05-1). SOP 05-1 provides guidance on accounting by insurance enterprises for deferred acquisition costs on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97. The SOP defines an internal replacement as a modification in product benefits, features, rights, or coverages that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. This SOP is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. We adopted this standard effective January 1, 2007 with no material effect on our financial position and results of operations. ACCOUNTING STANDARDS NOT YET ADOPTED In December 2007, the FASB issued SFAS No. 141(R), "Accounting for Business Combinations" (SFAS 141(R)). SFAS 141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction, establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed and requires the acquirer to disclose all information needed to evaluate and understand the nature and financial effect of the combination and is effective beginning for fiscal years beginning after December 15, 2008. We will adopt this standard effective January 1, 2009 and do not expect it to have a material impact on our financial position and results of operations. In December 2007, the FASB issued SFAS 160, "Noncontrolling Interests in Consolidated Financial Statements" (SFAS 160). SFAS 160 requires all entities to report noncontrolling interests in subsidiaries in the same way--as equity in the consolidated financial statements and requires that associated transactions be treated as equity transactions--and is effective beginning for fiscal years beginning after December 15, 2008. We will adopt this standard effective January 1, 2009 and do not expect it to have a material impact on our financial position and results of operations. In June 2007, the AICPA issued Statement of Position 07-1, "Clarification of the Scope of the Audit and Accounting Guide "Investment Companies" and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies" (SOP 07-1). SOP 07-1 broadens the definition of an investment company for application of this guidance. It provides that an entity that meets the definition of an investment company use fair value as a basis of accounting and reporting and that a parent retains the specialized fair value accounting of the entity if certain criteria are met. On February 14, 2008, the FASB deferred the effective date of SOP 07-1 indefinitely. F-9 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) On February 15, 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (SFAS 159), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value (i.e., the fair value option), on an instrument-by-instrument basis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes in fair value must be recorded in earnings. Additionally, SFAS 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. We adopted SFAS 159 as of January 1, 2008 with no material effect on our financial statements. In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 provides guidance on how to measure fair value when required under existing accounting standards. The statement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels ("Level 1, 2 and 3"). Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date. Level 2 inputs are observable inputs, other than quoted prices included in Level 1, for the asset or liability. Level 3 inputs are unobservable inputs reflecting our estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Quantitative and qualitative disclosures will focus on the inputs used to measure fair value for both recurring and non-recurring fair value measurements and the effects of the measurements in the financial statements. We adopted SFAS 157 effective January 1, 2008. We do not expect adoption of this statement to have a material impact on our financial position and results of operations. SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS Debt and equity securities Our debt and equity securities classified as available-for-sale are reported on our balance sheet at fair value. Fair value is based on quoted market price, where available. When quoted market prices are not available, we estimate fair value by discounting debt security cash flows to reflect interest rates currently being offered on similar terms to borrowers of similar credit quality (private placement debt securities), by quoted market prices of comparable instruments (untraded public debt securities) and by independent pricing sources or internally developed pricing models (equity securities). We recognize unrealized investment gains and losses on investments in debt and equity securities that we classify as available-for-sale. We report these unrealized investment gains and losses as a component of other comprehensive income, net of the closed block policyholder dividend obligation, applicable deferred policy acquisition costs and applicable deferred income taxes. For mortgage-backed and other asset-backed debt securities, we recognize income using a constant effective yield based on anticipated prepayments and the estimated economic lives of the securities. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and any resulting adjustment is included in net investment income. For certain asset-backed securities, changes in estimated yield are recorded on a prospective basis and specific valuation methods are applied to these securities to determine if there has been an other-than-temporary decline in value. F-10 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Mortgage loans We report mortgage loans at unpaid principal balances, net of valuation reserves on impaired mortgages. We consider a mortgage loan to be impaired if we believe it is probable that we will be unable to collect all amounts of contractual interest and principal as scheduled in the loan agreement. We do not accrue interest income on impaired mortgage loans when the likelihood of collection is doubtful. We estimate the fair value of mortgage loans by discounting the present value of scheduled loan payments. We base the discount rate on the comparable U.S. Treasury rates for loan durations plus spreads of 100 to 880 basis points, depending on our internal quality ratings of the loans. For in-process-of-foreclosure or defaulted loans, we estimate fair value as the lower of the underlying collateral value or the loan balance. Venture capital partnerships We record our equity in the earnings of venture capital partnerships in net investment income using the most recent financial information received from the partnerships and estimating the change in our share of partnership earnings for significant changes in equity market conditions during the quarter to eliminate the effect of any lag in reporting. We estimate the change in valuation each quarter by applying a public industry index if there has been a material shift in the S&P index, either upward or downward. Affiliate equity securities Our investments in affiliate equity securities represent investments in operating entities in which we own less than a majority of the outstanding common stock and where we exercise significant influence over the operating and financial policies of the companies. We use the equity method of accounting for our investments in common stock of these affiliates. We evaluate our equity method investments for an other-than-temporary impairment at each balance sheet date considering quantitative and qualitative factors including quoted market price of underlying equity securities, the duration the carrying value is in excess of fair value and historical and projected earnings and cash flow capacity. Policy loans Policy loans are carried at their unpaid principal balances and are collateralized by the cash values of the related policies. We estimate the fair value of fixed rate policy loans by discounting loan interest and loan repayments. We base the discount rate on the 10-year U.S. Treasury rate. We assume that loan interest payments are made at the fixed rate less 17.5 basis points and that loan repayments only occur as a result of anticipated policy lapses. For variable rate policy loans, we consider the unpaid loan balance as fair value, as interest rates on these loans are reset annually based on market rates. Other investments Other investments primarily include leveraged lease investments and other partnership and joint venture interests. Leveraged lease investments represent the net amount of the estimated residual value of the lease assets, rental receivables and unearned and deferred income to be allocated over the lease term. Investment income is calculated using the interest method and is recognized only in periods in which the net investment is positive. Other partnership and joint venture interests in which we do not have control or a majority ownership interest are recorded using the equity method of accounting. These investments include affordable housing, mezzanine and other partnership interests. We record the net income from investments in partnerships and joint ventures in net investment income. F-11 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DERIVATIVE INSTRUMENTS We use derivative financial instruments, including options, futures and swaps as a means of hedging exposure to interest rate, equity price change and foreign currency risk. We also use derivative instruments to economically hedge our exposure on guaranteed minimum benefits offered on certain of our variable products. We recognize derivative instruments on the balance sheet at fair value. The derivative contracts are reported as assets or liabilities in other investments and other liabilities, respectively, on the balance sheet, excluding embedded derivatives. Embedded derivatives are recorded on the balance sheet with the associated host contract. We do not designate the purchased derivatives related to guaranteed minimum benefits as hedges for accounting purposes. For other derivatives, we designate each instrument according to the associated exposure as either a fair value or cash flow hedge at its inception as we do not enter into derivative contracts for trading or speculative purposes. To qualify for hedge accounting, the changes in value of the derivative must be expected to substantially offset the changes in value of the hedged item. Hedges are monitored to ensure that there is a high correlation between the change in the value of the derivative instruments and the change in value of the hedged investment. Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, along with the changes in the fair value of the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings. Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge are recorded in accumulated other comprehensive income and are reclassified into earnings when the variability of the cash flow of the hedged item impacts earnings. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized investment gains (losses). If it is probable that a hedged forecasted transaction will no longer occur, the effective portions of the gains or losses on derivative instruments designated as cash flow hedges are reclassified into earnings immediately. Changes in the fair value of derivatives that are designated and qualify as foreign currency hedges are recorded in either current period earnings or accumulated other comprehensive income, depending on whether the hedged transaction is a fair value hedge or cash flow hedge. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized investment gains (losses). Changes in the fair value of derivative instruments not designated as hedging instruments and ineffective portions of hedges are recognized in net realized investment gains (losses) in the period incurred. CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand, amounts due from banks, money market instruments and other debt instruments with maturities of three months or less when purchased. DEFERRED POLICY ACQUISITION COSTS The costs of acquiring new business, principally commissions, underwriting, distribution and policy issue expenses, all of which vary with and are primarily related to production of new business, are deferred. In connection with our 1997 acquisition of the Confederation Life business, we recognized an asset for the present value of future profits representing the present value of estimated net cash flows embedded in the existing contracts acquired. This asset is included in deferred policy acquisition costs. We amortize deferred policy acquisition costs and present value of future profits based on the related policy's classification. For individual participating life insurance policies, deferred policy acquisition costs and present value of future profits are amortized in proportion to estimated gross margins. For universal life, variable universal life and accumulation annuities, deferred policy acquisition costs and present value of future profits are amortized in proportion to estimated gross profits (EGPs). Policies may be surrendered for value or exchanged for a different one of our products (internal replacement). The deferred policy acquisition costs balance associated with the replaced or surrendered policies is amortized to reflect these surrenders. F-12 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Each year, we develop future EGPs for the products sold during that year. The EGPs for products sold in a particular year are aggregated into cohorts. Future EGPs are projected for the estimated lives of the contracts. The amortization of deferred policy acquisition costs and present value of future profits requires the use of various assumptions, estimates and judgments about the future. The assumptions, in the aggregate, are considered important in the projections of EGPs. The assumptions developed as part of our annual process are based on our current best estimates of future events, which are likely to be different for each year's cohort. Assumptions considered to be significant in the development of EGPs include separate account fund performance, surrender and lapse rates, interest margin, mortality, premium persistency and expenses. These assumptions are reviewed on a regular basis and are based on our past experience, industry studies, regulatory requirements and estimates about the future. To determine the reasonableness of the prior assumptions used and their impact on previously projected account values and the related EGPs, we evaluate, on a quarterly basis, our previously projected EGPs. Our process to assess the reasonableness of our EGPs involves the use of internally developed models, together with studies and actual experience. Incorporated in each scenario are our current best estimate assumptions with respect to separate account returns, surrender and lapse rates, interest margin, mortality, premium persistency and expenses. Underlying assumptions for future periods of EGPs are not altered unless experience deviates significantly from original assumptions. For example, when lapses of our insurance products meaningfully exceed levels assumed in determining the amortization of deferred policy acquisition costs, we adjust amortization to reflect the change in future premiums or EGPs resulting from the unexpected lapses. In the event that we were to revise assumptions used for prior year cohorts, our estimate of projected account values would change and the related EGPs in the deferred policy acquisition cost amortization model would be adjusted to reflect such change. This process is known as "unlocking". Continued favorable experience on key assumptions, which could include increasing separate account fund return performance, decreasing lapses or decreasing mortality could result in an unlocking which would result in a decrease to deferred policy acquisition cost amortization and an increase in the deferred policy acquisition costs asset. Finally, an analysis is performed periodically to assess whether there are sufficient gross margins or gross profits to amortize the remaining deferred policy acquisition costs balances. PREMISES AND EQUIPMENT Premises and equipment, consisting primarily of office buildings occupied by us, are stated at cost less accumulated depreciation and amortization. We depreciate buildings on the straight-line method over 10 to 45 years and equipment primarily on a modified accelerated method over three to 10 years. We amortize leasehold improvements over the terms of the related leases. SEPARATE ACCOUNT ASSETS AND LIABILITIES Separate account assets and liabilities related to policyholder funds are carried at fair value. Deposits, net investment income and realized investment gains and losses for these accounts are excluded from revenues, and the related liability increases are excluded from benefits and expenses. Fees assessed to the contract holders for management services are included in revenues when services are rendered. POLICY LIABILITIES AND ACCRUALS Policy liabilities and accruals includes future benefit liabilities for certain life and annuity products. We establish liabilities in amounts adequate to meet the estimated future obligations of policies in force. Future benefit liabilities for traditional life insurance are computed using the net level premium method on the basis of actuarial assumptions as to contractual guaranteed rates of interest, mortality rates guaranteed in calculating the cash surrender values described in such contracts and morbidity. Future benefit liabilities for term and annuities in the payout phase that have significant mortality risk are computed using the net premium method on the basis of actuarial assumptions at the issue date of these contracts for rates of interest, contract administrative expenses, mortality and surrenders. We establish liabilities for outstanding claims, losses and loss adjustment expenses based on individual case estimates for reported losses and estimates of unreported losses based on past experience. F-13 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Certain contracts may also include additional death or other insurance benefit features, such as guaranteed minimum death or income benefits offered with variable annuity contracts or no lapse guarantees offered with universal life insurance contracts. An additional liability is established for these benefits by estimating the expected present value of the excess benefits and recognizing the excess ratably over the accumulation period based on total expected assessments. POLICYHOLDER DEPOSIT FUNDS Amounts received as payment for certain universal life contracts, deferred annuities and other contracts without life contingencies are reported as deposits to Policyholder deposit funds. The liability for universal life-type contracts is equal to the balance that accrues to the benefit of the policyholders as of the financial statement date, including interest credited, amounts that have been assessed to compensate us for services to be performed over future periods, and any amounts previously assessed against the policyholder that is refundable. The liability for deferred annuities and other contracts without life contingencies is equal to the balance that accrues to the benefit of the contract holder as of the financial statement date which includes the accumulation of deposits plus interest credited, less withdrawals and amounts assessed through the financial statement date. FAIR VALUE OF INVESTMENT CONTRACTS For purposes of fair value disclosures, we determine the fair value of guaranteed interest contracts by assuming a discount rate equal to the appropriate U.S. Treasury rate plus 150 basis points to determine the present value of projected contractual liability payments through final maturity. We determine the fair value of deferred annuities and supplementary contracts without life contingencies with an interest guarantee of one year or less at the amount of the policy reserve. In determining the fair value of deferred annuities and supplementary contracts without life contingencies with interest guarantees greater than one year, we use a discount rate equal to the appropriate U.S. Treasury rate plus 150 basis points to determine the present value of the projected account value of the policy at the end of the current guarantee period. Deposit type funds, including pension deposit administration contracts, dividend accumulations, and other funds left on deposit not involving life contingencies, have interest guarantees of less than one year for which interest credited is closely tied to rates earned on owned assets. For these liabilities, we assume fair value to be equal to the stated liability balances. REINSURANCE We recognize assets and liabilities related to reinsurance ceded contracts on a gross basis. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. CONTINGENT LIABILITIES Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. DEMUTUALIZATION AND CLOSED BLOCK The closed block assets, including future assets from cash flows generated by the assets and premiums and other revenues from the policies in the closed block, will benefit only holders of the policies in the closed block. The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, investment purchases and sales, policyholder benefits, policyholder dividends, premium taxes and income taxes. The principal income and expense items excluded from the closed block are management and maintenance expenses, commissions, investment income and realized investment gains and losses on investments held outside the closed block that support the closed block business. All of these excluded income and expense items enter into the determination of total gross margins of closed block policies for the purpose of amortization of deferred policy acquisition costs. F-14 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In our financial statements, we present closed block assets, liabilities, revenues and expenses together with all other assets, liabilities, revenues and expenses. Within closed block liabilities, we have established a policyholder dividend obligation to record an additional liability to closed block policyholders for cumulative closed block earnings in excess of expected amounts calculated at the date of demutualization. These closed block earnings will not inure to stockholders, but will result in additional future dividends to closed block policyholders unless otherwise offset by future performance of the closed block that is less favorable than expected. INVESTMENTS PLEDGED AS COLLATERAL AND NON-RECOURSE COLLATERALIZED OBLIGATIONS Collateralized obligations for which Phoenix Investment Partners (PXP) is the sponsor and actively manages the assets, where we are deemed to be a primary beneficiary as a result of our variable interests, are consolidated in our financial statements. Debt and equity securities pledged as collateral are recorded at fair value with any applicable unrealized investment gains or losses reflected as a component of accumulated other comprehensive income, net of applicable minority interest. We recognize realized investment losses on debt and equity securities in these collateralized obligations when declines in fair values, in our judgment, are considered to be other-than-temporarily impaired. Non-recourse obligations issued by the consolidated collateralized obligation trusts at face value are recorded at unpaid principal balance. Non-recourse derivative cash flow hedges are carried on our consolidated balance sheet at fair value with an offsetting amount recorded in accumulated other comprehensive income. REVENUE RECOGNITION We recognize premiums for participating life insurance products and other long-duration life insurance products as revenue when due from policyholders. We recognize life insurance premiums for short-duration life insurance products as premium revenue pro rata over the related contract periods. We match benefits, losses and related expenses with premiums over the related contract periods. Amounts received as payment for interest sensitive life contracts, deferred annuities and other contracts without life contingencies are considered deposits and are not included in revenue. Revenues from these products consist primarily of fees assessed during the period against the policyholders' account balances for mortality charges, policy administration charges and surrender charges. Fees assessed that represent compensation for services to be provided in the future are deferred and amortized into revenue over the life of the related contracts. Related benefit expenses include universal life benefit claims in excess of fund values, net investment income credited to policyholders' account balances and amortization of deferred policy acquisition costs. NET INVESTMENT INCOME AND NET REALIZED INVESTMENT GAINS (LOSSES) We recognize realized investment gains (losses) on asset dispositions on a first-in, first-out basis. We recognize realized investment losses when declines in fair value of debt and equity securities are considered to be other-than-temporarily impaired. We adjust the cost basis of these written down investments to fair value at the date the determination of impairment is made and do not change the new cost basis for subsequent recoveries in value. In evaluating whether a decline in value is other than temporary, we consider several factors including, but not limited to the following: . the extent and the duration of the decline; . the reasons for the decline in value (credit event, interest related or market fluctuations); . our ability and intent to hold the investment for a period of time to allow for a recovery of value; and . the financial condition of and near term prospects of the issuer. The closed block policyholder dividend obligation, applicable deferred policy acquisition costs and applicable income taxes, which offset realized investment gains and losses, are each reported separately as components of net income. F-15 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) UNREALIZED INVESTMENT GAINS (LOSSES) We recognize unrealized investment gains and losses on investments in debt and equity securities that we classify as available-for-sale. These gains and losses are reported as a component of other comprehensive income, net of the closed block policyholder dividend obligation, applicable deferred policy acquisition costs and applicable deferred income taxes. INCOME TAXES We recognize income tax expense or benefit based upon amounts reported in the financial statements and the provisions of currently enacted tax laws. We allocate income taxes to income, other comprehensive income and additional paid-in capital, as applicable. We recognize current income tax assets and liabilities for estimated income taxes refundable or payable based on the current year's income tax returns. We recognize deferred income tax assets and liabilities for the estimated future income tax effects of temporary differences and carryforwards. Temporary differences are the differences between the financial statement carrying amounts of assets and liabilities and their tax bases, as well as the timing of income or expense recognized for financial reporting and tax purposes of items not related to assets or liabilities. If necessary, we establish valuation allowances to reduce the carrying amount of deferred income tax assets to amounts that are more likely than not to be realized. We periodically review the adequacy of these valuation allowances and record any reduction in allowances through earnings. 3. BUSINESS COMBINATIONS AND DISPOSITIONS EMCO On December 20, 2007, we sold all of the outstanding stock of Emprendimiento Compartido S.A (EMCO), an Argentine wholly-owned subsidiary. We realized an after-tax loss of $4.8 million on this sale. This loss, as well as EMCO's results up through the date of sale, are reported in discontinued operations in these financial statements. Prior year results have also been reported in discontinued operations. Phoenix National Insurance Company Effective December 30, 2005, we sold 100% of the common stock we held in Phoenix National Insurance Company. This transaction was not material to our consolidated financial statements. Aberdeen Asset Management PLC On January 14, 2005, we closed the sale of our equity holdings in Aberdeen Asset Management PLC (Aberdeen), a United Kingdom-based asset management company, for net proceeds of $70.4 million, resulting in an after-tax realized investment loss of $7.0 million in our 2005 consolidated statement of operations. Lombard International Assurance S.A. On January 11, 2005, we disposed of our interests in Lombard International Assurance S.A. (Lombard) for consideration of $59.0 million. In the first quarter of 2007, 2006 and 2005, we realized after-tax gains of $8.9 million, $6.5 million and $9.3 million, respectively, which included earn-out gain consideration received. We are not entitled to any additional consideration related to this sale going forward. F-16 4. DEMUTUALIZATION AND CLOSED BLOCK In 1999, we began the process of reorganizing and demutualizing. We completed the process in June 2001, when all policyholder membership interests in our company were extinguished and eligible policyholders received shares of common stock of The Phoenix Companies, Inc., together with cash and policy credits, as compensation. To protect the future dividends of these policyholders, we also established a closed block for their existing policies. Because closed block liabilities exceed closed block assets, we have a net closed block liability at each period-end. This net liability represents the maximum future earnings contribution to be recognized from the closed block and the change in this net liability each period is in the earnings contribution recognized from the closed block for the period. To the extent that actual cash flows differ from amounts anticipated, we may adjust policyholder dividends. On November 3, 2005, the 2006 policyholder dividend scale was reduced for most policyholders with a reduction in the interest component of the scale, partially offset by improvements in the mortality component. If the closed block has excess funds, those funds will be available only to the closed block policyholders. However, if the closed block has insufficient funds to make policy benefit payments that are guaranteed, the payments will be made from assets outside of the closed block. CLOSED BLOCK ASSETS AND LIABILITIES: AS OF DECEMBER 31, ------------------- 2007 2006 INCEPTION ($ in millions) --------- --------- --------- Debt securities.................................. $ 6,919.4 $ 7,000.5 $4,773.1 Equity securities................................ 134.0 120.5 -- Mortgage loans................................... 12.7 66.5 399.0 Venture capital partnerships..................... 157.3 97.9 -- Policy loans..................................... 1,357.1 1,346.6 1,380.0 Other investments................................ 123.7 85.5 -- --------- --------- -------- Total closed block investments................... 8,704.2 8,717.5 6,552.1 Cash and cash equivalents........................ 67.8 66.3 -- Accrued investment income........................ 112.1 112.8 106.8 Receivables...................................... 44.7 46.7 35.2 Deferred income taxes............................ 329.3 329.8 389.4 Other closed block assets........................ 10.0 19.9 6.2 --------- --------- -------- TOTAL CLOSED BLOCK ASSETS........................ 9,268.1 9,293.0 7,089.7 --------- --------- -------- Policy liabilities and accruals.................. 9,811.2 9,798.8 8,301.7 Policyholder dividends payable................... 332.8 331.7 325.1 Policyholder dividend obligation................. 246.0 326.9 -- Other closed block liabilities................... 49.3 47.9 12.3 --------- --------- -------- TOTAL CLOSED BLOCK LIABILITIES................... 10,439.3 10,505.3 8,639.1 --------- --------- -------- EXCESS OF CLOSED BLOCK LIABILITIES OVER CLOSED BLOCK ASSETS................................... $ 1,171.2 $ 1,212.3 $1,549.4 ========= ========= ======== F-17 4. DEMUTUALIZATION AND CLOSED BLOCK (CONTINUED) CLOSED BLOCK REVENUES AND EXPENSES AND CHANGES IN POLICYHOLDER DIVIDEND OBLIGATION:
YEAR ENDED CUMULATIVE DECEMBER 31, FROM ---------------------------- INCEPTION 2007 2006 2005 ($ in millions) ---------- -------- -------- -------- Premiums................................ $ 7,584.5 $ 745.6 $ 786.5 $ 881.6 Net investment income................... 4,440.0 571.6 540.7 556.5 Net realized investment losses.......... (73.4) (0.6) 40.2 (21.9) --------- -------- -------- -------- TOTAL REVENUES.......................... 11,951.1 1,316.6 1,367.4 1,416.2 --------- -------- -------- -------- Policy benefits, excluding dividends.... 8,115.5 869.2 898.6 980.1 Other operating expenses................ 78.9 6.1 6.3 8.6 --------- -------- -------- -------- Total benefits and expenses, excluding policyholder dividends................ 8,194.4 875.3 904.9 988.7 --------- -------- -------- -------- Closed block contribution to income before dividends and income taxes..... 3,756.7 441.3 462.5 427.5 Policyholder dividends.................. (3,141.7) (379.3) (398.5) (363.7) --------- -------- -------- -------- Closed block contribution to income before income taxes................... 615.0 62.0 64.0 63.8 Applicable income tax expense........... (214.3) (20.9) (22.0) (22.2) --------- -------- -------- -------- CLOSED BLOCK CONTRIBUTION TO INCOME..... $ 400.7 $ 41.1 $ 42.0 $ 41.6 ========= ======== ======== ======== Policyholder dividends provided through earnings.............................. $ 3,186.9 $ 379.3 $ 398.5 $ 363.7 Policyholder dividends provided through other comprehensive income............ 46.4 (121.5) (73.7) (194.9) --------- -------- -------- -------- ADDITIONS TO POLICYHOLDER DIVIDEND LIABILITIES........................... 3,233.3 257.8 324.8 168.8 POLICYHOLDER DIVIDENDS PAID............. (2,979.6) (337.6) (339.2) (397.2) --------- -------- -------- -------- Change in policyholder dividend liabilities........................... 253.7 (79.8) (14.4) (228.4) Policyholder dividend liabilities, beginning of period................... 325.1 658.6 673.0 901.4 --------- -------- -------- -------- Policyholder dividend liabilities, end of period............................. 578.8 578.8 658.6 673.0 Policyholder dividends payable, end of period................................ (332.8) (332.8) (331.7) (338.9) --------- -------- -------- -------- POLICYHOLDER DIVIDEND OBLIGATION, END OF PERIOD............................. $ 246.0 $ 246.0 $ 326.9 $ 334.1 ========= ======== ======== ========
In addition to the closed block assets, we hold assets outside the closed block in support of closed block liabilities. We recognize investment earnings on these invested assets, less deferred policy acquisition cost amortization and allocated expenses, as an additional source of earnings to our stockholders. 5. REINSURANCE We use reinsurance agreements to provide for greater diversification of business, control exposure to potential losses arising from large risks and provide additional capacity for growth. We remain liable to the extent that reinsuring companies may not be able to meet their obligations under reinsurance agreements in effect. Failure of the reinsurers to honor their obligations could result in losses to us; consequently, we establish reserves for amounts deemed or estimated to be uncollectible. To minimize our exposure to significant losses from reinsurance insolvencies, we evaluate the financial condition of our reinsurers and monitor concentration of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers. Our reinsurance program varies based on the type of risk, for example: . On direct policies, the maximum of individual life insurance retained by us on any one life is $10 million for single life and joint first-to-die policies and $12 million for joint last-to-die policies, with excess amounts ceded to reinsurers. . We cede 80% to 90% of the mortality risk on most new issues of term insurance. . In August 2006, we entered into an agreement to cede 50% of the risk on policies issued from July 1, 2002 through December 31, 2005, inclusive, with a net amount at risk of $2.0 million or greater. F-18 5. REINSURANCE (CONTINUED) . On January 1, 1996, we entered into a reinsurance arrangement that covers 100% of the excess death benefits and related reserves for most variable annuity policies issued from January 1, 1983 through December 31, 1999, including subsequent deposits. We retain the guaranteed minimum death benefit risks on the remaining variable deferred annuities in force that are not covered by this reinsurance arrangement. . We cede 80% of the mortality risk on the in-force block of the Confederation Life business we acquired in December 1997. . We entered into two separate reinsurance agreements in 1998 and 1999 to cede 80% and 60%, respectively, of the mortality risk on a substantial portion of our otherwise retained individual life insurance business. . Effective January 1, 2008, we entered into an agreement to cede 75% of the risk in excess of $6.0 million on universal life and variable universal life policies issued from January 1, 2006 through December 31, 2007, inclusive. DIRECT BUSINESS AND REINSURANCE:
YEAR ENDED DECEMBER 31, ---------------------------------- 2007 2006 2005 ($ in millions) ---------- ---------- ---------- Direct premiums.................................... $ 886.6 $ 917.5 $ 994.7 Premiums assumed from reinsureds................... 13.6 13.7 14.0 Premiums ceded to reinsurers....................... (101.9) (91.5) (80.0) ---------- ---------- ---------- PREMIUMS........................................... $ 798.3 $ 839.7 $ 928.7 ========== ========== ========== Percentage of amount assumed to net premiums....... 1.7% 1.6% 1.5% ========== ========== ========== Direct policy benefits incurred.................... $ 560.7 $ 486.4 $ 440.1 Policy benefits assumed from reinsureds............ 17.9 14.8 8.2 Policy benefits ceded to reinsurers................ (91.9) (64.8) (56.4) ---------- ---------- ---------- POLICY BENEFITS.................................... $ 486.7 $ 436.4 $ 391.9 ========== ========== ========== Direct life insurance in force..................... $155,862.7 $143,120.6 $133,990.2 Life insurance in force assumed from reinsureds.... 1,937.0 1,838.7 1,810.5 Life insurance in force ceded to reinsurers........ (96,150.1) (90,812.5) (83,144.7) ---------- ---------- ---------- LIFE INSURANCE IN FORCE............................ $ 61,649.6 $ 54,146.8 $ 52,656.0 ========== ========== ========== Percentage of amount assumed to net insurance in force............................................ 3.1% 3.4% 3.4% ========== ========== ========== The policy benefit amounts above exclude changes in reserves, interest credited to policyholders and withdrawals, which total $817.0 million, $895.1 million and $984.8 million, net of reinsurance, for the years ended December 31, 2007, 2006 and 2005. Irrevocable letters of credit aggregating $56.4 million at December 31, 2007 have been arranged with commercial banks in favor of us to collateralize the ceded reserves. 6. DEFERRED POLICY ACQUISITION COSTS ACTIVITY IN DEFERRED POLICY ACQUISITION COSTS: YEAR ENDED DECEMBER 31, ---------------------------------- 2007 2006 2005 ($ in millions) ---------- ---------- ---------- Policy acquisition costs deferred.................. $ 463.8 $ 329.2 $ 187.7 Costs amortized to expenses: Recurring costs................................. (198.4) (151.9) (114.3) Credit related to realized investment gains (losses)...................................... (0.2) 3.4 14.7 Offsets to net unrealized investment gains or losses included in other comprehensive income. 63.4 16.2 70.5 ---------- ---------- ---------- Change in deferred policy acquisition costs........ 328.6 196.9 158.6 Deferred policy acquisition costs, beginning of year............................................. 1,743.6 1,546.7 1,388.1 ---------- ---------- ---------- DEFERRED POLICY ACQUISITION COSTS, END OF YEAR..... $ 2,072.2 $ 1,743.6 $ 1,546.7 ========== ========== ==========
F-19 6. DEFERRED POLICY ACQUISITION COSTS (CONTINUED) Upon completion of a study during the fourth quarter of 2007, we updated our best estimate assumptions used to project expected gross profits and margins in the deferred policy acquisition cost amortization schedules. Major projection assumptions updated include lapse experience, investment margins and expenses. In our review to develop the best estimate, we examined our own experience and market conditions. We reflected higher interest earned in the investments, consistent with recent experience. Maintenance expenses were updated and reallocated among various lines of business. Additionally, we updated our system for calculating the SOP 03-1 reserves for guaranteed minimum death benefits, resulting in a release in the benefit reserve and a corresponding increase in deferred policy acquisition cost amortization for the quarter. The effects of these adjustments resulted in an overall $4.3 million pre-tax benefit to net income. During the fourth quarter of 2006, Life and Annuity segment income benefited from an unlocking of assumptions primarily related to deferred policy acquisition costs. The unlocking was driven by revised assumptions for expected mortality, lapse experience, investment margins, and expenses. The effects of the unlocking resulted in an overall $8.2 million pre-tax benefit to net income, as well as increased unearned revenue liabilities by $3.5 million, increased benefit reserves by $7.2 million, increased reinsurance liability by $0.2 million and decreased amortization by $19.1 million. 7. POLICY LIABILITIES AND ACCRUALS Policyholder liabilities are primarily for participating life insurance policies and universal life insurance policies. For universal life, this includes deposits received from customers and investment earnings on their fund balances, which ranged from 3.00% to 5.25% as of December 31, 2007, less administrative and mortality charges. PARTICIPATING LIFE INSURANCE Participating life insurance in force was 23.0% and 26.8% of the face value of total individual life insurance in force at December 31, 2007 and 2006, respectively. POLICYHOLDER DEPOSIT FUNDS Policyholder deposit funds primarily consist of annuity deposits received from customers, dividend accumulations and investment earnings on their fund balances, which ranged from 2.0% to 14.0% as of December 31, 2007 and 2006, less administrative charges. 8. GOODWILL GROSS AND NET CARRYING AMOUNTS OF GOODWILL AND OTHER INTANGIBLE ASSETS: YEAR ENDED DECEMBER 31, --------------------- 2007 2006 ---------- ---------- GROSS NET GROSS NET ($ in millions) ----- ---- ----- ---- Goodwill................................................. $6.8 $5.2 $6.8 $5.2 ==== ==== ==== ==== F-20 9. INVESTING ACTIVITIES DEBT AND EQUITY SECURITIES See Note 12 for information on available-for-sale debt and equity securities pledged as collateral. FAIR VALUE AND COST OF DEBT AND EQUITY SECURITIES:
AS OF DECEMBER 31, ------------------------------------------ 2007 2006 -------------------- -------------------- FAIR VALUE COST FAIR VALUE COST ($ in millions) ---------- --------- ---------- --------- U.S. government and agency................... $ 611.1 $ 597.7 $ 688.5 $ 674.1 State and political subdivision.............. 234.3 224.7 262.6 253.0 Foreign government........................... 197.2 172.0 269.6 237.9 Corporate.................................... 7,023.0 7,047.3 7,179.0 7,111.7 Mortgage-backed.............................. 2,826.9 2,876.3 3,072.4 3,067.1 Other asset-backed........................... 1,032.2 1,107.2 1,077.8 1,060.3 --------- --------- --------- --------- AVAILABLE-FOR-SALE DEBT SECURITIES........... $11,924.7 $12,025.2 $12,549.9 $12,404.1 ========= ========= ========= ========= Amounts applicable to the closed block....... $ 6,919.4 $ 6,898.1 $ 7,000.5 $ 6,858.2 ========= ========= ========= ========= AVAILABLE-FOR-SALE EQUITY SECURITIES......... $ 191.8 $ 159.5 $ 174.5 $ 143.4 ========= ========= ========= ========= Amounts applicable to the closed block....... $ 134.0 $ 109.2 $ 120.5 $ 95.2 ========= ========= ========= ========= UNREALIZED GAINS AND LOSSES FROM GENERAL ACCOUNT SECURITIES: AS OF DECEMBER 31, ------------------------------------------ 2007 2006 -------------------- -------------------- GAINS LOSSES GAINS LOSSES ($ in millions) ---------- --------- ---------- --------- U.S. government and agency................... $ 21.6 $ (8.2) $ 21.0 $ (6.6) State and political subdivision.............. 10.9 (1.3) 12.1 (2.5) Foreign government........................... 25.3 (0.1) 32.5 (0.8) Corporate.................................... 161.5 (185.8) 168.6 (101.3) Mortgage-backed.............................. 39.8 (89.2) 45.9 (40.6) Other asset-backed........................... 9.7 (84.7) 22.7 (5.2) --------- --------- --------- --------- DEBT SECURITIES GAINS (LOSSES)............... $ 268.8 $ (369.3) $ 302.8 $ (157.0) ========= ========= ========= ========= DEBT SECURITIES NET GAINS (LOSSES)........... $ (100.5) $ 145.8 ========= ========= EQUITY SECURITIES GAINS (LOSSES)............. $ 37.0 $ (4.7) $ 34.2 $ (3.1) ========= ========= ========= ========= EQUITY SECURITIES NET GAINS.................. $ 32.3 $ 31.1 ========= =========
F-21 9. INVESTING ACTIVITIES (CONTINUED) AGING OF TEMPORARILY IMPAIRED DEBT AND EQUITY SECURITIES:
AS OF DECEMBER 31, 2007 ------------------------------------------------------------- LESS THAN 12 MONTHS GREATER THAN 12 MONTHS TOTAL ------------------ --------------------- ------------------ FAIR UNREALIZED FAIR UNREALIZED FAIR UNREALIZED VALUE LOSSES VALUE LOSSES VALUE LOSSES ($ in millions) -------- ---------- -------- ---------- -------- ---------- DEBT SECURITIES U.S. government and agency............ $ 12.6 $ (0.7) $ 133.9 $ (7.5) $ 146.5 $ (8.2) State and political subdivision....... 1.2 -- 47.4 (1.3) 48.6 (1.3) Foreign government.................... 0.2 -- 8.9 (0.1) 9.1 (0.1) Corporate............................. 1,064.0 (68.2) 2,240.6 (117.6) 3,304.6 (185.8) Mortgage-backed....................... 447.7 (35.0) 1,199.9 (54.2) 1,647.6 (89.2) Other asset-backed.................... 539.3 (58.5) 249.8 (26.2) 789.1 (84.7) -------- ------- -------- ------- -------- ------- DEBT SECURITIES....................... $2,065.0 $(162.4) $3,880.5 $(206.9) $5,945.5 $(369.3) EQUITY SECURITIES..................... 49.6 (4.7) -- -- 49.6 (4.7) -------- ------- -------- ------- -------- ------- TOTAL TEMPORARILY IMPAIRED SECURITIES. $2,114.6 $(167.1) $3,880.5 $(206.9) $5,995.1 $(374.0) ======== ======= ======== ======= ======== ======= AMOUNTS INSIDE THE CLOSED BLOCK....... $1,082.7 $ (85.4) $1,880.4 $ (93.0) $2,963.1 $(178.4) ======== ======= ======== ======= ======== ======= AMOUNTS OUTSIDE THE CLOSED BLOCK...... $1,031.9 $ (81.7) $2,000.1 $(113.9) $3,032.0 $(195.6) ======== ======= ======== ======= ======== ======= AMOUNTS OUTSIDE THE CLOSED BLOCK THAT ARE BELOW INVESTMENT GRADE..... $ 93.1 $ (4.5) $ 172.1 $ (21.6) $ 265.2 $ (26.1) ======== ======= ======== ======= ======== ======= AFTER OFFSETS FOR DEFERRED ACQUISITION COST ADJUSTMENT AND TAXES........... $ (25.4) $ (39.1) $ (64.5) ======= ======= ======= NUMBER OF SECURITIES.................. 1,079 1,447 2,526 ======= ======= =======
Unrealized losses of below investment grade debt securities outside the Closed Block with a fair value of less than 80% of the securities amortized cost totaled $10.6 million at December 31, 2007 ($2.6 million after offsets for taxes and deferred policy acquisition cost amortization). These have been at significant unrealized loss positions on a continuous basis for six months or less. Unrealized losses of below investment grade debt securities held in the Closed Block with a fair value of less than 80% of the securities amortized cost totaled $10.0 million at December 31, 2007 ($0.0 million after offsets for change in policy dividend obligation). These have been at significant unrealized loss positions on a continuous basis for six months or less. The securities are considered to be temporarily impaired at December 31, 2007 as each of these securities has performed, and is expected to perform, in accordance with their original contractual terms, and we have the ability and intent to hold these securities until they recover their value. F-22 9. INVESTING ACTIVITIES (CONTINUED) AGING OF TEMPORARILY IMPAIRED DEBT AND EQUITY SECURITIES:
AS OF DECEMBER 31, 2006 ------------------------------------------------------------- LESS THAN 12 MONTHS GREATER THAN 12 MONTHS TOTAL ------------------ --------------------- ------------------ FAIR UNREALIZED FAIR UNREALIZED FAIR UNREALIZED VALUE LOSSES VALUE LOSSES VALUE LOSSES ($ in millions) -------- ---------- -------- ---------- -------- ---------- DEBT SECURITIES U.S. government and agency............ $ 106.3 $ (2.1) $ 160.5 $ (4.5) $ 266.8 $ (6.6) State and political subdivision....... 2.5 -- 61.2 (2.5) 63.7 (2.5) Foreign government.................... 8.7 (0.1) 36.2 (0.7) 44.9 (0.8) Corporate............................. 958.9 (14.5) 2,634.2 (86.8) 3,593.1 (101.3) Mortgage-backed....................... 482.8 (4.7) 1,496.9 (35.9) 1,979.7 (40.6) Other asset-backed.................... 157.6 (1.3) 265.1 (3.9) 422.7 (5.2) -------- ------ -------- ------- -------- ------- DEBT SECURITIES....................... $1,716.8 $(22.7) $4,654.1 $(134.3) $6,370.9 $(157.0) EQUITY SECURITIES..................... 32.7 (2.7) 1.2 (0.4) 33.9 (3.1) -------- ------ -------- ------- -------- ------- TOTAL TEMPORARILY IMPAIRED SECURITIES. $1,749.5 $(25.4) $4,655.3 $(134.7) $6,404.8 $(160.1) ======== ====== ======== ======= ======== ======= AMOUNTS INSIDE THE CLOSED BLOCK....... $ 888.7 $(14.8) $2,050.6 $ (64.2) $2,939.3 $ (79.0) ======== ====== ======== ======= ======== ======= AMOUNTS OUTSIDE THE CLOSED BLOCK...... $ 860.8 $(10.6) $2,604.7 $ (70.5) $3,465.5 $ (81.1) ======== ====== ======== ======= ======== ======= AMOUNTS OUTSIDE THE CLOSED BLOCK THAT ARE BELOW INVESTMENT GRADE..... $ 65.9 $ (1.4) $ 194.9 $ (9.9) $ 260.8 $ (11.3) ======== ====== ======== ======= ======== ======= AFTER OFFSETS FOR DEFERRED ACQUISITION COST ADJUSTMENT AND TAXES........... $ (3.4) $ (21.5) $ (24.9) ====== ======= ======= NUMBER OF SECURITIES.................. 970 1,882 2,852 ====== ======= =======
There were no unrealized losses of below investment grade debt securities outside the closed block with a fair value less than 80% of the securities amortized cost total at December 31, 2006. The securities are considered to be temporarily impaired at December 31, 2006 as each of these securities has performed, and is expected to perform, in accordance with their original contractual terms, and we have the ability and intent to hold these securities until they recover their value. MORTGAGE LOANS Mortgage loans are collateralized by the related properties and are generally no greater than 75% of the properties' value. CARRYING VALUE OF INVESTMENTS IN MORTGAGE LOANS AS OF DECEMBER 31, ----------------------------- 2007 2006 -------------- -------------- CARRYING FAIR CARRYING FAIR VALUE VALUE VALUE VALUE ($ in millions) -------- ----- -------- ----- PROPERTY TYPE Apartment buildings.............................. $ -- $ -- $13.7 $14.2 Retail stores.................................... 13.9 11.2 51.5 52.1 Industrial buildings............................. 3.0 3.0 8.4 8.3 Other............................................ 0.1 0.1 0.1 0.1 ----- ----- ----- ----- Subtotal......................................... 17.0 14.3 73.7 74.7 Less: Valuation allowances.................... (1.4) -- (1.8) -- ----- ----- ----- ----- MORTGAGE LOANS................................... $15.6 $14.3 $71.9 $74.7 ===== ===== ===== ===== Amounts applicable to the closed block........... $12.7 $11.4 $66.5 $68.5 ===== ===== ===== ===== The carrying values of delinquent or in-process-of-foreclosure mortgage loans as of December 31, 2007 and 2006 were $0.0 million and $0.0 million, respectively. The carrying values of mortgage loans on which the payment terms have been restructured or modified were $2.9 million and $5.3 million as of December 31, 2007 and 2006, respectively. We have provided valuation allowances for restructured or modified mortgage loans. F-23 9. INVESTING ACTIVITIES (CONTINUED) MORTGAGE LOAN VALUATION ALLOWANCE ACTIVITY:
YEAR ENDED DECEMBER 31, ----------------------- 2007 2006 2005 ($ in millions) ------ ------ ------- Valuation allowance, beginning of year..................... $ 1.8 $ 10.7 $ 9.9 Additions charged to income................................ -- -- 0.8 Deductions for write-offs and disposals.................... (0.4) (8.9) -- ------ ------ ------- VALUATION ALLOWANCE, END OF YEAR........................... $ 1.4 $ 1.8 $ 10.7 ====== ====== ======= During the three years ended December 31, 2007, the amount of interest that was foregone due to the restructuring of mortgage loans and to non-income producing loans was not material to our consolidated financial statements. Refinancing of mortgage loans was not material in any of the three years ended December 31, 2007. VENTURE CAPITAL PARTNERSHIPS In October 2005, we entered into an agreement to sell $138.5 million of the venture capital assets held in the open block to an outside party. The first phase of the sale closed in 2005 and the remaining partnerships were sold in the first quarter of 2006. The carrying value of the funds sold in 2005 was $98.8 million (net of a $6.7 million pre-tax realized loss on partnerships to be sold in 2006) and an additional $33.8 million was sold in 2006. A pre-tax realized loss of $13.9 million was recognized in 2005 and a pre-tax gain of $4.2 million was recognized in 2006 upon the completion of the sale. INVESTMENT ACTIVITY IN VENTURE CAPITAL PARTNERSHIPS: YEAR ENDED DECEMBER 31, ----------------------- 2007 2006 2005 ($ in millions) ------ ------ ------- Contributions.............................................. $ 59.5 $ 41.8 $ 66.0 Equity in earnings of partnerships......................... 27.0 3.2 23.8 Distributions.............................................. (30.0) (23.8) (94.6) Proceeds from sale of partnership interests................ -- (51.9) (91.5) Realized loss on sale of partnership interests............. -- 2.4 (13.9) ------ ------ ------- Change in venture capital partnerships..................... 56.5 (28.3) (110.2) Venture capital partnership investments, beginning of period................................................... 116.8 145.1 255.3 ------ ------ ------- VENTURE CAPITAL PARTNERSHIP INVESTMENTS, END OF PERIOD..... $173.3 $116.8 $ 145.1 ====== ====== ======= AMOUNTS APPLICABLE TO THE CLOSED BLOCK..................... $157.3 $ 97.9 $ 73.4 ====== ====== =======
AFFILIATE EQUITY AND DEBT SECURITIES There were no affiliate debt securities held at December 31, 2007 or 2006. There were no earnings from affiliate securities during 2007 or 2006. Aberdeen Asset Management PLC (Aberdeen) On January 14, 2005, we closed the sale to third parties of our equity holdings in Aberdeen for net proceeds of $70.4 million, which resulted in an after-tax realized investment loss of $7.0 million. The January 2005 sale of our equity holdings in Aberdeen completed our disposition of our direct financial interests in Aberdeen. We continue to participate in sub-advisory arrangements related to several of our asset management product offerings with Aberdeen, the financial effects of which are not material to our consolidated financial statements. F-24 9. INVESTING ACTIVITIES (CONTINUED) OTHER INVESTMENTS OTHER INVESTMENTS: AS OF DECEMBER 31, ------------------ 2007 2006 ($ in millions) ------- ------- Transportation and other equipment leases................... $ 57.7 $ 60.3 Mezzanine partnerships...................................... 151.6 100.9 Affordable housing partnerships............................. 17.7 19.6 Derivative instruments (Note 13)............................ 22.7 7.0 Real estate................................................. 48.1 73.0 Other partnership interests/(1)/............................ 119.3 46.1 ------ ------ OTHER INVESTED ASSETS....................................... $417.1 $306.9 ====== ====== Amounts applicable to the closed block...................... $123.7 $ 85.5 ====== ====== -------- /(1)/ Represents primarily hedge funds and direct equity investments. STATUTORY DEPOSITS Pursuant to certain statutory requirements, as of December 31, 2007, our Life Companies had on deposit securities with a fair value of $67.8 million in insurance department special deposit accounts. Our Life Companies are not permitted to remove the securities from these accounts without approval of the regulatory authority. NET INVESTMENT INCOME AND NET REALIZED INVESTMENT GAINS (LOSSES) SOURCES OF NET INVESTMENT INCOME: YEAR ENDED DECEMBER 31, ---------------------------- 2007 2006 2005 ($ in millions) -------- -------- -------- Debt securities.................................. $ 764.1 $ 792.1 $ 806.8 Equity securities................................ 8.2 7.0 6.3 Mortgage loans................................... 1.7 6.2 20.2 Venture capital partnerships..................... 27.0 3.2 23.8 Policy loans..................................... 179.5 169.3 165.8 Other investments................................ 43.8 40.0 47.8 Other income..................................... 8.3 -- -- Cash and cash equivalents........................ 15.2 13.0 5.9 -------- -------- -------- Total investment income.......................... 1,047.8 1,030.8 1,076.6 Discontinued operations.......................... (7.5) (6.6) (4.8) Investment expenses.............................. (21.2) (15.1) (15.5) -------- -------- -------- NET INVESTMENT INCOME, GENERAL ACCOUNT INVESTMENTS.................................... 1,019.1 1,009.1 1,056.3 Debt and equity securities pledged as collateral (Note 12)...................................... 15.7 19.0 33.9 -------- -------- -------- NET INVESTMENT INCOME............................ $1,034.8 $1,028.1 $1,090.2 ======== ======== ======== Amounts applicable to the closed block........... $ 571.6 $ 540.7 $ 556.5 ======== ======== ======== For 2007, 2006 and 2005, net investment income was lower by $16.7 million, $12.1 million and $15.4 million, respectively, due to non-income producing debt securities. Of these amounts, $8.8 million, $8.4 million and $12.1 million, respectively, related to the closed block. F-25 9. INVESTING ACTIVITIES (CONTINUED) TYPES OF REALIZED INVESTMENT GAINS (LOSSES):
YEAR ENDED DECEMBER 31, ---------------------- 2007 2006 2005 ($ in millions) ------ ------ ------ Debt security impairments................................... $(46.4) $ (7.9) $(31.2) Equity security impairments................................. (0.5) -- (2.1) Mortgage loan impairments................................... -- -- (0.8) Affiliate equity security impairments....................... -- -- -- Other invested asset impairments............................ (3.9) -- -- Debt and equity securities pledged as collateral impairments (0.8) (1.0) (1.2) ------ ------ ------ IMPAIRMENT LOSSES........................................... (51.6) (8.9) (35.3) ------ ------ ------ Debt security transaction gains............................. 21.9 62.1 19.2 Debt security transaction losses............................ (9.3) (20.1) (37.2) Equity security transaction gains........................... 12.5 25.7 5.8 Equity security transaction losses.......................... (3.0) (3.8) (12.5) Mortgage loan transaction gains............................. 1.4 3.2 -- Venture capital partnership transaction gains (losses)...... -- 2.4 (13.9) Affiliate equity security transaction gains................. 13.7 10.4 14.4 Affiliate equity security transaction losses................ -- -- (10.7) Real estate transaction gains............................... 1.6 -- -- Real estate transaction losses.............................. (0.2) -- (0.6) Debt and equity securities pledged as collateral gains...... 2.6 -- 2.5 Debt and equity securities pledged as collateral losses..... (0.8) -- -- Other investments transaction gains......................... 8.9 2.8 15.1 Other investments transaction losses........................ (5.9) -- -- ------ ------ ------ NET TRANSACTION GAINS (LOSSES).............................. 43.4 82.7 (17.9) ------ ------ ------ NET REALIZED INVESTMENT GAINS (LOSSES)...................... $ (8.2) $ 73.8 $(53.2) ====== ====== ======
Debt security impairments during 2007 reflected the effects of credit impairments related to the sub-prime, Alt-A and second-lien residential mortgage markets, including a $17.1 million full impairment of a direct investment in a collateralized debt obligation. UNREALIZED INVESTMENT GAINS (LOSSES) SOURCES OF CHANGES IN NET UNREALIZED INVESTMENT GAINS (LOSSES): YEAR ENDED DECEMBER 31, ------------------------- 2007 2006 2005 ($ in millions) ------- ------- ------- Debt securities..................................... $(246.3) $(125.9) $(313.0) Equity securities................................... 1.2 12.7 2.6 Debt and equity securities pledged as collateral.... (16.4) (9.1) (93.3) Other investments................................... (1.6) -- (7.5) ------- ------- ------- NET UNREALIZED INVESTMENT LOSSES.................... $(263.1) $(122.3) $(411.2) ======= ======= ======= Net unrealized investment losses.................... $(263.1) $(122.3) $(411.2) ------- ------- ------- Applicable policyholder dividend obligation......... (121.5) (73.8) (194.8) Applicable deferred policy acquisition costs........ (63.4) (16.2) (70.5) Applicable deferred income tax benefit.............. (20.4) (8.2) (20.1) ------- ------- ------- Offsets to net unrealized investment losses......... (205.3) (98.2) (285.4) ------- ------- ------- NET UNREALIZED INVESTMENT LOSSES INCLUDED IN OTHER COMPREHENSIVE INCOME (NOTE 15).................... $ (57.8) $ (24.1) $(125.8) ======= ======= ======= F-26 9. INVESTING ACTIVITIES (CONTINUED) INVESTING CASH FLOWS INVESTMENT PURCHASES, SALES, REPAYMENTS AND MATURITIES:
YEAR ENDED DECEMBER 31, ------------------------------- 2007 2006 2005 ($ in millions) --------- --------- --------- Debt security purchases................................ $(3,923.2) $(4,451.0) $(4,500.4) Equity security purchases.............................. (76.6) (54.9) (150.8) Venture capital partnership investments................ (60.0) (41.8) (65.7) Other invested asset purchases......................... (159.7) (88.5) (87.2) Policy loan advances, net.............................. (58.5) (77.0) (48.3) --------- --------- --------- INVESTMENT PURCHASES................................... $(4,278.0) $(4,713.2) $(4,852.4) ========= ========= ========= Debt securities sales.................................. $ 2,929.8 $ 3,653.6 $ 2,925.8 Debt securities maturities and repayments.............. 1,370.3 1,580.6 1,367.6 Equity security sales.................................. 68.6 87.4 225.4 Mortgage loan maturities and principal repayments...... 57.7 60.3 79.2 Venture capital partnership capital distributions...... 30.0 75.7 185.9 Real estate and other invested assets sales............ 118.4 103.7 17.8 --------- --------- --------- INVESTMENT SALES, REPAYMENTS AND MATURITIES............ $ 4,574.8 $ 5,561.3 $ 4,801.7 ========= ========= =========
The maturities of general account debt securities and mortgage loans, by contractual sinking fund payment and maturity, as of December 31, 2007 are summarized in the following table. Actual maturities will differ from contractual maturities as certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties, we have the right to put or sell certain obligations back to the issuers and we may refinance mortgage loans. Refinancing of mortgage loans was not significant during the three years ended December 31, 2007. MATURITIES OF DEBT SECURITIES AND MORTGAGE LOANS: MORTGAGE DEBT LOANS AT SECURITIES CARRYING AT COST VALUE TOTAL ($ in millions) ---------- -------- --------- Due in one year or less.......................... $ 436.9 $ 3.0 $ 439.9 Due after one year through five years............ 1,892.7 9.6 1,902.3 Due after five years through ten years........... 3,589.3 -- 3,589.3 Due after ten years.............................. 6,106.3 3.0 6,109.3 --------- ----- --------- TOTAL............................................ $12,025.2 $15.6 $12,040.8 ========= ===== ========= 10. FINANCING ACTIVITIES INDEBTEDNESS INDEBTEDNESS: AS OF DECEMBER 31, ------------------------------- 2007 2006 --------------- --------------- CARRYING FAIR CARRYING FAIR VALUE VALUE VALUE VALUE ($ in millions) -------- ------ -------- ------ 7.15% surplus notes............................ $174.0 $179.6 $174.0 $189.6 ------ ------ ------ ------ TOTAL INDEBTEDNESS............................. $174.0 $179.6 $174.0 $189.6 ====== ====== ====== ====== F-27 10. FINANCING ACTIVITIES (CONTINUED) Our 7.15% surplus notes are due December 15, 2034. The carrying value of the 2034 notes is net of $1.0 million of unamortized original issue discount. Interest payments are at an annual rate of 7.15%, require the prior approval of the Superintendent of Insurance of the State of New York and may be made only out of surplus funds which the Superintendent determines to be available for such payments under New York Insurance Law. The notes may be redeemed at our option at any time at the "make-whole" redemption price set forth in the offering circular. New York Insurance Law provides that the notes are not part of our legal liabilities. On December 15, 2004, we repurchased $144.8 million of the previously issued $175.0 million outstanding principal on our 6.95% surplus notes and recognized a non-recurring after-tax charge of $6.4 million for costs incurred, including the tender premium. Concurrent with the closing of the tender, we issued $175.0 million, 7.15% surplus notes. The remaining 6.95% surplus notes were redeemed at maturity in December 2006. On June 6, 2006, we amended and restated our existing $150 million unsecured senior revolving credit facility, dated as of November 22, 2004 (the "Original Facility" and as so amended and restated, the "Amended Facility"). The financing commitments under the Amended Facility will terminate on June 6, 2009. Potential borrowers on the credit line are The Phoenix Companies, Inc., PXP and Phoenix Life. The Phoenix Companies unconditionally guarantees any loans under this facility to Phoenix Life and PXP. Base rate loans will bear interest at the greater of Wachovia Bank, National Association's prime commercial rate or the federal funds rate plus 0.50%. Eurodollar rate loans will bear interest at LIBOR plus an applicable percentage based on our Standard & Poor's and Moody's ratings. There are no current borrowings on the credit facility. The credit facility contains covenants that require us at all times to maintain a minimum level of consolidated stockholders' equity, based on GAAP standards in effect on June 6, 2006 and a maximum consolidated debt-to-capital ratio of 30%. In addition, Phoenix Life must maintain a minimum risk-based capital ratio of 250% and a minimum A.M. Best financial strength rating of "A-". Borrowings under the facility are not conditioned on the absence of a material adverse change. INTEREST EXPENSE ON INDEBTEDNESS: YEAR ENDED DECEMBER 31, ----------------- 2007 2006 2005 ($ in millions) ----- ----- ----- INTEREST EXPENSE INCURRED.................................... $12.4 $14.5 $14.7 ===== ===== ===== INTEREST PAID................................................ $12.5 $14.6 $14.6 ===== ===== ===== 11. SEPARATE ACCOUNTS, DEATH BENEFITS AND OTHER INSURANCE BENEFIT FEATURES Separate account products are those for which a separate investment and liability account is maintained on behalf of the policyholder. Investment objectives for these separate accounts vary by fund account type, as outlined in the applicable fund prospectus or separate account plan of operations. Our separate account products include variable annuities and variable life insurance contracts. The assets supporting these contracts are carried at fair value and reported as separate account assets with an equivalent amount reported as separate account liabilities. Amounts assessed against the policyholder for mortality, administration, and other services are included within revenue in insurance, investment management and product fees. In 2007 and 2006 there were no gains or losses on transfers of assets from the general account to a separate account. Many of our variable contracts offer various guaranteed minimum death, accumulation, withdrawal and income benefits. These benefits are offered in various forms as described in the footnotes to the table below. We currently cede to reinsurers a significant portion of the death benefit guarantees associated with our in-force block of business. We establish policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity policies as follows: . Liabilities associated with the guaranteed minimum death benefit (GMDB) are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The assumptions used for calculating the liabilities are generally consistent with those used for amortizing deferred policy acquisition costs. F-28 11. SEPARATE ACCOUNTS, DEATH BENEFITS AND OTHER INSURANCE BENEFIT FEATURES (CONTINUED) . Liabilities associated with the guaranteed minimum income benefit (GMIB) are determined by estimating the expected value of the income benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The assumptions used for calculating such guaranteed income benefit liabilities are generally consistent with those used for amortizing deferred policy acquisition costs. For annuities with GMDB, 200 stochastically generated scenarios were used. For annuities with GMIB, we used 1,000 stochastically generated scenarios. SEPARATE ACCOUNT INVESTMENTS OF ACCOUNT BALANCES OF CONTRACTS WITH GUARANTEES: AS OF DECEMBER 31, ------------------ 2007 2006 ($ in millions) -------- -------- Debt securities............................................. $ 736.7 $ 733.0 Equity funds................................................ 2,895.4 2,591.0 Other....................................................... 103.9 92.2 -------- -------- TOTAL....................................................... $3,736.0 $3,416.2 ======== ======== CHANGES IN GUARANTEED LIABILITY BALANCES (NET OF REINSURANCE RECOVERABLES): YEAR ENDED DECEMBER 31, 2007 ------------------ ANNUITY ANNUITY GMDB/(1)/ GMIB ($ in millions) -------- -------- Liability balance as of January 1, 2007..................... $ 32.2 $ 3.7 Incurred.................................................... (26.3) 2.2 Paid........................................................ (2.7) -- -------- -------- LIABILITY BALANCE AS OF DECEMBER 31, 2007................... $ 3.2 $ 5.9 ======== ======== CHANGES IN GUARANTEED LIABILITY BALANCES: (NET OF REINSURANCE RECOVERABLES): YEAR ENDED DECEMBER 31, 2006 ------------------ ANNUITY ANNUITY GMDB/(1)/ GMIB ($ in millions) -------- -------- Liability balance as of January 1, 2006..................... $ 32.7 $ 2.5 Incurred.................................................... 3.2 1.2 Paid........................................................ (3.7) -- -------- -------- LIABILITY BALANCE AS OF DECEMBER 31, 2006................... $ 32.2 $ 3.7 ======== ======== -------- /(1)/ The reinsurance recoverable asset related to the GMDB was $1.4 million and $21.5 million as of December 31, 2007 and 2006, respectively. The GMDB and GMIB guarantees are recorded in policy liabilities and accruals on our balance sheet. Changes in the liability are recorded in Policy benefits, excluding policyholder dividends, on our statement of operations. In a manner consistent with our policy for deferred policy acquisition costs, we regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised. We also offer certain variable products with a guaranteed minimum withdrawal benefit (GMWB), a guaranteed minimum accumulation benefit (GMAB) and a guaranteed pay-out annuity floor (GPAF). The GMWB guarantees the policyholder a minimum amount of withdrawals and benefit payments over time, regardless of the investment performance of the contract, subject to an annual limit. Optional resets are available. In addition, we have introduced a feature for these contracts, beginning in the fourth quarter of 2005, that allows the policyholder to receive the guaranteed annual withdrawal amount for as long as they are alive. F-29 11. SEPARATE ACCOUNTS, DEATH BENEFITS AND OTHER INSURANCE BENEFIT FEATURES (CONTINUED) The GMAB rider provides the contract holder with a minimum accumulation of their purchase payments deposited within a specific time period, adjusted for withdrawals, after a specified amount of time determined at the time of issuance of the variable annuity contract. The GPAF rider provides the policyholder with a minimum payment amount if the variable annuity payment falls below this amount on the payment calculation date. The GMWB, GMAB and GPAF represent embedded derivatives in the variable annuity contracts that are required to be reported separately from the host variable annuity contract. They are carried at fair value and reported in policyholder deposit funds. The fair value of the GMWB, GMAB and GPAF obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. As markets change, mature and evolve and actual policyholder behavior emerges, management continually evaluates the appropriateness of its assumptions. As of December 31, 2007 and 2006, 100% of the aggregate account value with the GMWB, GMAB and GPAF features was not reinsured. In order to minimize the volatility associated with the unreinsured liabilities, we have established an alternative risk management strategy. We began hedging our GMAB exposure in 2006 and GMWB exposure during fourth quarter 2007 using equity options, equity futures and swaps. These investments are included in other invested assets on our balance sheet. As of December 31, 2007 and 2006, the embedded derivative for GMWB, GMAB and GPAF was immaterial. Benefit payments made for the GMWB, GMAB and GPAF during 2007 or 2006 were immaterial. For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. For guarantees of benefits that are payable upon annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the policyholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. ADDITIONAL INSURANCE BENEFITS:
NET AMOUNT AVERAGE AT RISK ATTAINED ACCOUNT AFTER AGE OF VALUE REINSURANCE ANNUITANT ($ in millions) -------- ----------- --------- GMDB return of premium/(1)/............................ $1,451.0 $ 5.5 59 GMDB step up/(2)/...................................... 1,915.4 37.6 60 GMDB earnings enhancement benefit (EEB)/(3)/........... 78.4 -- 60 GMDB greater of annual step up and roll up/(4)/........ 42.5 3.6 63 -------- ----- TOTAL GMDB AT DECEMBER 31, 2007........................ $3,487.3 $46.7 ======== ===== GMIB................................................... $ 716.8 59 GMAB................................................... 389.8 55 GMWB................................................... 214.6 62 GPAF................................................... 43.3 74 -------- TOTAL AT DECEMBER 31, 2007............................. $1,364.5 ========
-------- /(1)/ Return of premium: The death benefit is the greater of current account value or premiums paid (less any adjusted partial withdrawals). /(2)/ Step Up: The death benefit is the greater of current account value, premiums paid (less any adjusted partial withdrawals) or the annual step up amount prior to the eldest original owner attaining a certain age. On and after the eldest original owner attains that age, the death benefit is the greater of current account value or the death benefit at the end of the contract year prior to the eldest original owner's attaining that age plus premium payments (less any adjusted partial withdrawals) made since that date. /(3)/ EEB: The death benefit is the greater of the premiums paid (less any adjusted partial withdrawals) or the current account value plus the EEB. The EEB is an additional amount designed to reduce the impact of taxes associated with distributing contract gains upon death. F-30 11. SEPARATE ACCOUNTS, DEATH BENEFITS AND OTHER INSURANCE BENEFIT FEATURES (CONTINUED) /(4)/ Greater of Annual Step Up and Annual Roll Up: The death benefit is the greater of premium payments (less any adjusted partial withdrawals), the annual step up amount, the annual roll up amount or the current account value prior to the eldest original owner attaining age 81. On and after the eldest original owner attained age 81, the death benefit is the greater of current account value or the death benefit at the end of the contract year prior to the eldest original owner's attained age of 81 plus premium payments (less any adjusted partial withdrawals) made since that date. Liabilities for universal life are generally determined by estimating the expected value of losses when death benefits exceed revenues and recognizing those benefits ratably over the accumulation period based on total expected assessments. The assumptions used in estimating these liabilities are consistent with those used for amortizing deferred policy acquisition costs. A single set of best estimate assumptions is used since these insurance benefits do not vary significantly with capital markets volatility. At December 31, 2007 and 2006, we held additional universal life benefit reserves of $34.7 million and $12.7 million, respectively. 12. INVESTMENTS PLEDGED AS COLLATERAL AND NON-RECOURSE COLLATERALIZED OBLIGATIONS We are involved with various entities in the normal course of business that may be deemed to be variable interest entities and, as a result, we may be deemed to hold interests in those entities. In particular, our asset management affiliates serve as the investment advisors to 10 collateralized obligation trusts that were organized to take advantage of bond market arbitrage opportunities. These 10 collateralized obligation trusts are investment trusts with aggregate assets of $3.6 billion that are primarily invested in a variety of fixed income securities acquired from third parties. Our asset management affiliates earned advisory fees of $9.1 million, $8.0 million and $8.8 million during the years ended December 31, 2007, 2006 and 2005, respectively. The collateralized obligation trusts reside in bankruptcy remote SPEs for which we provide neither recourse nor guarantees. Accordingly, our financial exposure to these collateralized obligation trusts stems from our direct investment in certain debt or equity securities issued by these collateralized obligation trusts. Our maximum exposure to loss with respect to our direct investment in the 10 collateralized obligation trusts is $13.4 million at December 31, 2007 (none of which relates to trusts that are consolidated), all of which relates to investment grade debt securities. Prior to September 30, 2005, we consolidated Phoenix-Mistic 2002-1 CDO, Ltd. (Mistic) which was redeemed during the third quarter of 2005. As a result of this liquidation, we recognized $3.4 million of prepayment fees, $3.9 million of realized investment gains and a reversal of $1.3 million of impairments taken previously under FIN 46-R when Mistic was consolidated on Phoenix's balance sheet. We continued to consolidate two collateralized obligation trusts as of December 31, 2007 and 2006 and three as of December 31, 2005. As of December 31, 2007, we had no direct investment in the two consolidated collateralized obligation trusts. We recognized investment income on debt and equity securities pledged as collateral, net of interest expense on collateralized obligations and applicable minority interest, of $0.5 million, $0.7 million and $5.0 million for the years ended December 31, 2007, 2006 and 2005, respectively, related to these consolidated obligation trusts. The other eight variable interest entities not consolidated by us under FIN 46(R) represent collateralized obligation trusts with approximately $3.4 billion of investment assets pledged as collateral. Our direct investment in these unconsolidated variable interest entities was $13.4 million (all of which are investment grade debt securities at December 31, 2007). FAIR VALUE AND COST OF DEBT AND EQUITY SECURITIES PLEDGED AS COLLATERAL: AS OF DECEMBER 31, ----------------------------------- 2007 2006 ----------------- ----------------- FAIR VALUE COST FAIR VALUE COST ($ in millions) ---------- ------ ---------- ------ Debt securities pledged as collateral...... $219.1 $219.3 $267.2 $251.4 Equity securities pledged as collateral.... -- 0.1 0.6 0.3 ------ ------ ------ ------ TOTAL DEBT AND EQUITY SECURITIES PLEDGED AS COLLATERAL............................ $219.1 $219.4 $267.8 $251.7 ====== ====== ====== ====== Cash and accrued investment income of $13.4 million and $5.0 million are included in the amounts above at December 31, 2007 and 2006, respectively. F-31 12. INVESTMENTS PLEDGED AS COLLATERAL AND NON-RECOURSE COLLATERALIZED OBLIGATIONS (CONTINUED) Non-recourse collateralized obligations are comprised of callable collateralized obligations of $307.2 million and $332.2 million at December 31, 2007 and 2006, respectively, and non-recourse derivative cash flow hedge liability of $10.7 million (notional amount of $211.1 million with maturity of June 1, 2009) and $11.8 million (notional amount of $222.9 million with maturities of 2005-2013) at December 31, 2007 and 2006, respectively. There were no minority interest liabilities related to third-party equity investments in the consolidated variable interest entities at December 31, 2007 and 2006. GROSS AND NET UNREALIZED GAINS AND LOSSES FROM DEBT AND EQUITY SECURITIES PLEDGED AS COLLATERAL: AS OF DECEMBER 31, -------------------------- 2007 2006 ------------ ------------ GAINS LOSSES GAINS LOSSES ($ in millions) ----- ------ ----- ------ Debt securities pledged as collateral.............. $29.0 $(29.2) $35.4 $(19.6) Equity securities pledged as collateral............ -- (0.1) 0.4 (0.1) ----- ------ ----- ------ TOTAL.............................................. $29.0 $(29.3) $35.8 $(19.7) ===== ====== ===== ====== NET UNREALIZED GAINS............................... $ (0.3) $16.1 ====== ===== AGING OF TEMPORARILY IMPAIRED DEBT AND EQUITY SECURITIES PLEDGED AS COLLATERAL:
AS OF DECEMBER 31, 2007 ------------------------------------------------- LESS THAN GREATER THAN 12 MONTHS 12 MONTHS TOTAL --------------- --------------- --------------- FAIR UNREALIZED FAIR UNREALIZED FAIR UNREALIZED VALUE LOSSES VALUE LOSSES VALUE LOSSES ($ in millions) ----- ---------- ----- ---------- ----- ---------- Corporate............................. $ -- $ -- $ -- $ (2.0) $ -- $ (2.0) Mortgage-backed....................... 3.7 (0.4) 7.2 (12.7) 10.9 (13.1) Other asset-backed.................... 2.6 -- 0.2 (14.1) 2.8 (14.1) ---- ----- ---- ------ ----- ------ DEBT SECURITIES....................... $6.3 $(0.4) $7.4 $(28.8) $13.7 $(29.2) EQUITY SECURITIES PLEDGED AS COLLATERAL.......................... -- -- -- (0.1) -- (0.1) ---- ----- ---- ------ ----- ------ TOTAL TEMPORARILY IMPAIRED SECURITIES PLEDGED AS COLLATERAL............... $6.3 $(0.4) $7.4 $(28.9) $13.7 $(29.3) ==== ===== ==== ====== ===== ======
Gross unrealized losses on debt securities with a fair value less than 80% of the security's amortized cost totaled $2.6 million at December 31, 2007. The majority of these debt securities are investment grade issues that continue to perform to their original contractual terms at December 31, 2007. MATURITY OF DEBT SECURITIES PLEDGED AS COLLATERAL: 2007 COST ($ in millions) ------ Due in one year or less................................................. $ 19.1 Due after one year through five years................................... 16.1 Due after five years through ten years.................................. 25.9 Due after ten years..................................................... 158.2 ------ TOTAL DEBT SECURITIES................................................... $219.3 ====== The amount of CDO-related derivative cash flow hedge ineffectiveness recognized through earnings for the years ended December 31, 2007, 2006 and 2005 is $0.8 million, $0.3 million and $0.3 million, respectively. See Note 9 to these financial statements for information on realized investment losses related to these CDOs. EFFECT OF CONSOLIDATION OF COLLATERALIZED OBLIGATION TRUSTS: AS OF AND FOR THE YEAR ENDED DECEMBER 31, ---------------------- 2007 2006 2005 ($ in millions) ------ ------ ------ INCREASE (DECREASE) IN NET INCOME...................... $ 1.0 $ (1.0) $ 1.3 ====== ====== ====== REDUCTION TO STOCKHOLDERS' EQUITY...................... $(85.4) $(71.2) $(67.9) ====== ====== ====== F-32 12. INVESTMENTS PLEDGED AS COLLATERAL AND NON-RECOURSE COLLATERALIZED OBLIGATIONS (CONTINUED) The above non-cash credits (charges) to net income (loss) and stockholders' equity primarily relate to realized and unrealized investment losses within the collateralized obligation trusts. Upon maturity or other liquidation of the trusts, the fair value of the investments pledged as collateral will be used to settle the non-recourse collateralized obligations with any shortfall in such investments inuring to the third-party note and equity holders. To the extent there remains a recorded liability for non-recourse obligations after all the assets pledged as collateral are exhausted, such amount will be reduced to zero with a corresponding benefit to earnings. Accordingly, these investment losses and any future investment losses under this method of consolidation will ultimately reverse upon the maturity or other liquidation of the non-recourse collateralized obligations. These non-recourse obligations mature between 2011 through 2012 but contain call provisions. The call provisions may be triggered at the discretion of the equity investors based on market conditions and are subject to certain contractual limitations. 13. DERIVATIVE INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS DERIVATIVE INSTRUMENTS We maintain an overall interest rate risk-management strategy that primarily incorporates the use of interest rate swaps as hedges of our exposure to changes in interest rates. Our exposure to changes in interest rates primarily results from our commitments to fund interest-sensitive insurance liabilities, as well as from our significant holdings of fixed rate financial instruments. DERIVATIVE INSTRUMENTS HELD IN GENERAL ACCOUNT: AS OF DECEMBER 31, ------------------------------- 2007 2006 --------------- --------------- NOTIONAL AMOUNT MATURITY ASSET LIABILITY ASSET LIABILITY ($ in millions) -------- --------- ----- --------- ----- --------- INTEREST RATE SWAPS......... Cash flow hedges......... $ -- 2007 $ -- $ -- $0.4 $ -- Non-hedging derivative instruments............ 22 2017 0.2 0.2 2.1 1.2 CROSS CURRENCY SWAPS........ 35 2012-2016 -- 2.9 -- 1.0 PUT OPTIONS................. 150 2016-2017 21.5 -- 4.0 -- CALL OPTIONS................ 6 2008 0.5 -- -- -- OTHER....................... 56 2008 0.5 -- 0.5 -- ---- ----- ---- ---- ---- TOTAL GENERAL ACCOUNT DERIVATIVE INSTRUMENT POSITIONS................. $269 $22.7 $3.1 $7.0 $2.2 ==== ===== ==== ==== ==== INTEREST RATE SWAPS We use interest rate swaps that effectively convert variable rate cash flows to fixed cash flows in order to hedge the interest rate risks associated with guaranteed minimum living benefit (GMAB/GMWB) rider liabilities. These interest rate swaps do not qualify for hedge accounting treatment and are stated at fair value (market value) with their change in valuation reported in net realized capital gains/losses. Interest Rate Options We use interest rate options, such as caps to hedge against market risks to assets or liabilities from substantial changes in interest rates. An interest rate cap gives us the right to receive, over the maturity of the contract, the excess of a reference rate index that is determined. The cash settlement or payoff from these cap contracts is made on a quarterly basis based on the rate difference times notional principal. F-33 13. DERIVATIVE INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) Cross Currency Swaps We use cross currency swaps to hedge against market risks from changes in foreign currency exchange rates. Currency swaps are used to swap bond asset cash flows denominated in a foreign currency back to U.S. dollars. Under foreign currency swaps, we agree with another party (referred to as the counterparty) to exchange principal and periodic interest payments denominated in foreign currency for payments in U.S. dollars. Counterparties to such financial instruments expose us to credit-related losses in the event of nonperformance, but we do not expect any counterparties to fail to meet their obligations given their high credit ratings. The credit exposure of cross currency swaps is the fair value (market value) of contracts with a positive fair value (market value) at the reporting date. Exchange Traded Future Contracts We use equity index futures to hedge the market risks from changes in the value of equity indices, such as S&P 500, associated with guaranteed minimum living benefit (GMAB/GMWB) rider liabilities. Positions are short-dated, exchange-traded futures with maturities of three months. Equity Index Options We use the following to hedge against market risks from changes in volatility, interest rates, and equity indices associated with our Life and Annuity products: . Equity index options, such as S&P 500 puts for the variable annuity guaranteed minimum living benefit (GMAB/GMWB) rider liabilities; . Equity index options, such as S&P 500 European calls for the Equity Index Universal Life (EIUL); and . Equity index options, such as S&P European, Asian and Binary calls for the Equity Index Annuity (EIA). An equity index put option affords us the right to sell a specified equity index at the established price determined at the time the instrument was purchased. We may use short-dated options, which are traded on exchanges or use long-dated over-the-counter options, which require entering into an agreement with another party (referred to as the counterparty). An equity index call option affords us the right to buy a specified equity index at the established price determined at the time the instrument was purchased. We used exact-dated options, which are traded over-the-counter with another party (referred to as the counterparty) to closely replicate the option payoff profile embedded in EIA and EIUL liabilities. We are exposed to credit-related losses in the event of nonperformance by counterparties to fail to meet their obligations given their high credit ratings. The credit exposure of equity index options is the fair value (market value) of contracts with a positive fair value (market value) at the reporting date. F-34 13. DERIVATIVE INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) FAIR VALUE OF FINANCIAL INSTRUMENTS CARRYING AMOUNTS AND ESTIMATED FAIR VALUES OF FINANCIAL INSTRUMENTS: AS OF DECEMBER 31, --------------------------------------- 2007 2006 ------------------- ------------------- CARRYING FAIR CARRYING FAIR VALUE VALUE VALUE VALUE ($ in millions) --------- --------- --------- --------- Cash and cash equivalents.............. $ 366.8 $ 366.8 $ 289.0 $ 289.0 Available-for-sale debt securities (Note 9)............................. 11,924.7 11,924.7 12,549.9 12,549.9 Available-for-sale equity securities (Note 9)............................. 191.8 191.8 174.5 174.5 Mortgage loans (Note 9)................ 15.6 14.3 71.9 74.7 Debt and equity securities pledged as collateral (Note 12)................. 219.1 219.1 267.8 267.8 Derivative financial instruments....... 22.7 22.7 7.0 7.0 Policy loans (Note 9).................. 2,380.5 2,495.6 2,322.0 2,415.9 --------- --------- --------- --------- FINANCIAL ASSETS....................... $15,121.2 $15,235.0 $15,682.1 $15,778.8 ========= ========= ========= ========= Investment contracts................... $ 1,808.9 $ 1,803.9 $ 2,228.4 $ 2,190.9 Non-recourse collateralized obligations (Note 12)................ 317.9 232.5 344.0 272.8 Indebtedness (Note 10)................. 174.0 179.6 174.0 189.6 Derivative financial instruments....... 3.1 3.1 2.2 2.2 --------- --------- --------- --------- FINANCIAL LIABILITIES.................. $ 2,303.9 $ 2,219.1 $ 2,748.6 $ 2,655.5 ========= ========= ========= ========= 14. INCOME TAXES ALLOCATION OF INCOME TAXES: YEAR ENDED DECEMBER 31, --------------------- 2007 2006 2005 ($ in millions) ------ ----- ------ Income taxes (benefit) applicable to: Current.............................................. $ 5.1 $26.1 $ 6.6 Deferred............................................. 37.0 47.1 32.7 ------ ----- ------ Continuing operations................................ 42.1 73.2 39.3 Discontinued operations.............................. (1.5) 0.7 0.6 ------ ----- ------ INCOME TAXES APPLICABLE TO NET INCOME................... 40.6 73.9 39.9 Other comprehensive loss................................ (20.7) (8.2) (22.1) ------ ----- ------ INCOME TAXES APPLICABLE TO COMPREHENSIVE INCOME......... $ 19.9 $65.7 $ 17.8 ====== ===== ====== INCOME TAXES PAID (REFUNDED)............................ $ 17.7 $14.5 $(14.1) ====== ===== ====== EFFECTIVE INCOME TAX RATE: YEAR ENDED DECEMBER 31, ---------------------- 2007 2006 2005 ($ in millions) ------ ------ ------ Income from continuing operations before income taxes and minority interest................................ $191.1 $225.8 $159.2 ------ ------ ------ Income taxes at statutory rate of 35.0%................ 66.9 79.1 55.7 Valuation allowance release............................ (11.0) -- -- Dividends received deduction........................... (6.3) (3.1) (7.8) Low income housing tax credit.......................... (4.1) (4.0) (4.0) Tax interest recoveries................................ -- -- (5.3) Historic rehabilitation and other tax credits.......... -- (0.6) (2.3) Realized losses (gains) on available-for-sale securities pledged as collateral..................... (0.4) 0.3 (0.5) Other, net............................................. (3.0) 1.5 3.5 ------ ------ ------ INCOME TAX EXPENSE APPLICABLE TO CONTINUING OPERATIONS $ 42.1 $ 73.2 $ 39.3 ====== ====== ====== F-35 14. INCOME TAXES (CONTINUED) DEFERRED INCOME TAX BALANCES ATTRIBUTABLE TO TEMPORARY DIFFERENCES: YEAR ENDED DECEMBER 31, ---------------- 2007 2006 ($ in millions) ------- ------- Deferred income tax assets: Future policyholder benefits................................. $ 337.8 $ 290.7 Unearned premiums/deferred revenues.......................... 104.1 103.3 Employee benefits............................................ 53.3 58.3 Intangible assets............................................ 0.1 2.1 Net operating and capital loss carryover benefits............ 21.1 13.7 Historic rehabilitation and other tax credits................ 29.8 16.4 Foreign tax credits carryover benefits....................... 14.3 14.3 Other........................................................ 1.4 5.0 Valuation allowance.......................................... (1.1) (12.1) ------- ------- GROSS DEFERRED INCOME TAX ASSETS............................. 560.8 491.7 ------- ------- Deferred tax liabilities: Deferred policy acquisition costs............................ (523.5) (434.6) Investments.................................................. (111.3) (126.7) Other........................................................ (8.7) -- ------- ------- GROSS DEFERRED INCOME TAX LIABILITIES........................ (643.5) (561.3) ------- ------- DEFERRED INCOME TAX LIABILITIES.............................. $ (82.7) $ (69.6) ======= ======= We are included in the consolidated federal income tax return filed by The Phoenix Companies and are party to a tax sharing agreement by and among The Phoenix Companies and its subsidiaries. In accordance with this agreement, federal income taxes are allocated as if they had been calculated on a separate company basis, except that benefits for any net operating losses or other tax credits used to offset a tax liability of the consolidated group will be provided to the extent such loss or credit is utilized in the consolidated federal tax return. Within the consolidated tax return, we are required by regulations of the Internal Revenue Service (IRS) to segregate the entities into two groups: life insurance companies and non-life insurance companies. We are limited as to the amount of any operating losses from the non-life group that can be offset against taxable income of the life group. These limitations may affect the amount of any operating loss carryovers that we have now or in the future. As of December 31, 2007, we had deferred tax assets of $5.5 million and $14.5 million related to net operating and capital losses, respectively, for federal income tax purposes and $1.1 million for state net operating losses. The related federal net operating losses of $15.8 million are scheduled to expire between the years 2019 and 2027. The federal capital losses of $41.5 million are scheduled to expire in 2010 and 2012. The state net operating losses of $15.2 million related to the non-life subgroup are scheduled to expire between 2019 and 2026. Due to the inability to combine the life insurance and non-life insurance subgroups for state income tax purposes, we established a $1.1 million valuation allowance at the end of 2007 and 2006, relative to the state deferred tax assets. As of December 31, 2007, we had deferred income tax assets of $29.8 million related to general business tax credit carryovers, which are expected to expire between the years 2022 and 2026. As of December 31, 2007, we had deferred income tax assets of $14.3 million related to foreign tax credit carryovers, which are expected to expire between the 2011 and 2016 tax years. We have determined, based on our earnings and future income, that it is more likely than not that the deferred income tax assets after valuation allowance already recorded as of December 31, 2007 and 2006 will be realized. In determining the adequacy of future income, we have considered projected future income, reversal of existing temporary differences and available tax planning strategies that could be implemented, if necessary. During the year, management identified sources of future taxable income that would allow for the realization of the entire foreign tax credit carryover. Accordingly, the valuation allowance related to the Company's foreign tax credit of $11.0 million was released. F-36 14. INCOME TAXES (CONTINUED) We adopted the provisions of FASB, Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48), on January 1, 2007. As a result of the implementation of FIN 48, we recognized an increase in reserves for uncertain tax benefits through a cumulative effect adjustment of approximately $4.0 million, which was accounted for as a reduction to the January 1, 2007 balance of retained earnings. Including the cumulative effect adjustment, we had approximately $20.7 million of total gross unrecognized tax benefits as of January 1, 2007. A reconciliation of the beginning and ending amount of unrecognized tax benefits is a follows: RECONCILIATION OF THE BEGINNING AND ENDING AMOUNT OF UNRECOGNIZED TAX BENEFITS: ($ in millions) Balance at January 1, 2007.............................................. $20.7 Reductions for tax positions of prior years............................. (2.2) Settlements with taxing authorities..................................... (1.1) ----- BALANCE AT DECEMBER 31, 2007............................................ $17.4 ===== The entire amount of unrecognized tax benefits at December 31, 2007 would, if recognized, impact the annual effective tax rate upon recognition. Based upon the timing and status of our current examinations by taxing authorities, we do not believe that it is reasonably possible that any changes to the balance of unrecognized tax benefits occurring in the next 12 months will result in a significant change to the results of operations, financial condition or liquidity. In addition, we do not anticipate that there will be additional payments made or refunds received within the next 12 months with respect to the years under audit. We do not anticipate any increase to the unrecognized tax benefits that would have a significant impact on the financial position of the Company. Together with The Phoenix Companies, Phoenix Life files consolidated, combined, unitary or separate income tax returns in the U.S., federal, various state and foreign jurisdictions. We are no longer subject to income tax examinations by federal authorities for tax years prior to 2004. Our consolidated U.S. federal income tax returns for 2004 and 2005 are currently being examined. We do not believe that the examination will result in a material change in our financial position. State examinations are being conducted by Connecticut for the years 1996 through 2005 and New York for the years 2003 through 2005. We do not believe that these examinations will result in a material change to our financial position. F-37 15. OTHER COMPREHENSIVE INCOME SOURCES OF OTHER COMPREHENSIVE INCOME:
YEAR ENDED DECEMBER 31, -------------------------------------------------- 2007 2006 2005 --------------- --------------- ---------------- GROSS NET GROSS NET GROSS NET ($ in millions) ------- ------ ------- ------ ------- ------- Unrealized losses on investments........................ $(239.3) $(37.5) $(177.3) $(37.8) $(358.4) $ (91.1) Net realized investment gains (losses) on available-for-sale securities included in net income.. (23.8) (20.3) 55.0 13.7 (52.8) (34.7) ------- ------ ------- ------ ------- ------- Net unrealized investment losses........................ (263.1) (57.8) (122.3) (24.1) (411.2) (125.8) Net unrealized foreign currency translation adjustment.. 1.4 0.9 (0.3) (0.1) (6.0) (4.0) Net unrealized derivative instruments gains (losses).... (1.1) (0.3) 7.1 6.9 82.8 82.8 ------- ------ ------- ------ ------- ------- Other comprehensive loss................................ (262.8) $(57.2) (115.5) $(17.3) (334.4) $ (47.0) ------- ====== ------- ====== ------- ======= Applicable policyholder dividend obligation............. (121.5) (73.8) (194.8) Applicable deferred policy acquisition cost amortization (63.4) (16.2) (70.5) Applicable deferred income tax benefit.................. (20.7) (8.2) (22.1) ------- ------- ------- Offsets to other comprehensive income................... (205.6) (98.2) (287.4) ------- ------- ------- OTHER COMPREHENSIVE LOSS................................ $ (57.2) $ (17.3) $ (47.0) ======= ======= =======
COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME:
AS OF DECEMBER 31, ------------------------------- 2007 2006 --------------- -------------- GROSS NET GROSS NET ($ in millions) ------- ------ ------ ------ Unrealized gains on investments............................. $ (77.7) $(55.0) $185.4 $ 2.8 Unrealized foreign currency translation adjustment.......... 0.8 -- (0.6) (0.9) Unrealized losses on derivative instruments................. (34.4) (18.0) (33.3) (17.7) ------- ------ ------ ------ Accumulated other comprehensive income...................... (111.3) $(73.0) 151.5 $(15.8) ------- ====== ------ ====== Applicable policyholder dividend obligation................. 46.2 167.7 Applicable deferred policy acquisition costs................ (63.6) (0.3) Applicable deferred income taxes............................ (20.9) (0.1) ------- ------ Offsets to accumulated other comprehensive income........... (38.3) 167.3 ------- ------ ACCUMULATED OTHER COMPREHENSIVE INCOME $ (73.0) $(15.8) ======= ======
16. EMPLOYEE BENEFIT PLANS AND EMPLOYMENT AGREEMENTS EMPLOYEE BENEFIT PLANS AND EMPLOYMENT AGREEMENTS The Phoenix Companies sponsors a non-contributory, defined benefit pension plan covering substantially all of its employees. Retirement benefits are a function of both years of service and level of compensation. The Phoenix Companies also sponsors a non-qualified supplemental defined benefit plan to provide benefits in excess of amounts allowed pursuant to the Internal Revenue Code. The Phoenix Companies' funding policy is to contribute annually an amount equal to at least the minimum required contribution in accordance with minimum funding standards established by the Employee Retirement Income Security Act of 1974 (ERISA). Contributions are intended to provide not only for benefits attributable to service to date, but also for service expected to be earned in the future. The Phoenix Companies sponsors pension and savings plans for its employees, and employees and agents of its subsidiaries. The qualified plans comply with requirements established by the ERISA and excess benefit plans provide for that portion of pension obligations, which is in excess of amounts permitted by ERISA. The Phoenix Companies also provides certain health care and life insurance benefits for active and retired employees. We incur applicable employee benefit expenses through the process of cost allocation by The Phoenix Companies. F-38 16. EMPLOYEE BENEFIT PLANS AND EMPLOYMENT AGREEMENTS (CONTINUED) In addition to The Phoenix Companies' pension plans, The Phoenix Companies currently provides certain health care and life insurance benefits to retired employees, spouses and other eligible dependents through various plans sponsored by The Phoenix Companies. A substantial portion of Phoenix affiliate employees may become eligible for these benefits upon retirement. The health care plans have varying co-payments and deductibles, depending on the plan. These plans are unfunded. Prior to June 25, 2001, we sponsored the aforementioned employee benefit plans. Effective June 25, 2001, our parent, The Phoenix Companies, became the sponsor of these plans. Substantially all of our employees remained participants of the plans. Applicable information regarding the actuarial present value of vested and non-vested accumulated plan benefits, and the net assets of the plans available for benefits is not separately calculated for our participation in the plans. The Phoenix Companies, the plan sponsor, established an accrued liability and amounts attributable to us have been allocated and recorded as an expense and employee benefit liability to our parent. MANAGEMENT RESTRUCTURING EXPENSE AND EMPLOYMENT AGREEMENTS The Phoenix Companies and certain of its key executives have entered into agreements that will, in certain circumstances, provide separation benefits upon the termination of the executive's employment by The Phoenix Companies for reasons other than death, disability, cause or retirement, or by the executive for "good reason," as defined in the agreements. For most of these executives, the agreements provide this protection only if the termination occurs following (or is effectively connected with) the occurrence of a change of control, as defined in the agreements. Upon a change in control, The Phoenix Companies is required to make an irrevocable contribution to a trust as soon as possible following such change in control in an amount equal to pay such benefits payable under such agreements. In such circumstances, we might be required to fund all or a portion of any contribution made. We recorded non-recurring expenses of $0.6 million ($0.4 million after income taxes) and $6.5 million ($4.2 million after income taxes) in 2006 and 2005, respectively, primarily in connection with organizational and employment-related costs. 17. DISCONTINUED OPERATIONS During 2007, we sold 100% of the stock held by us in Emprendimiento Compartido S.A. (EMCO), an Argentine wholly-owned subsidiary. We realize an after-tax loss of $4.8 million on this sale. The net after-tax income (loss) included in discontinued operations for the years ended December 31, 2007, 2006 and 2005 was $(3.5) million, $1.1 million and $1.1 million, respectively. During 1999, we discontinued our reinsurance operations. We have excluded assets and liabilities of the discontinued operations from the assets and liabilities of continuing operations and on a net basis included them in other general account assets on our balance sheet. 18. PHOENIX LIFE STATUTORY FINANCIAL INFORMATION AND REGULATORY MATTERS STATUTORY FINANCIAL DATA:
AS OF AND FOR THE YEARS ENDED DECEMBER 31, ----------------------------- 2007 2006 2005 ($ in millions) -------- -------- -------- Statutory capital, surplus, and surplus notes.......... $ 848.1 $ 932.5 $ 873.2 Asset valuation reserve (AVR).......................... 192.6 187.8 210.8 -------- -------- -------- STATUTORY CAPITAL, SURPLUS, SURPLUS NOTES AND AVR...... $1,040.7 $1,120.3 $1,084.0 ======== ======== ======== STATUTORY GAIN FROM OPERATIONS......................... $ 115.2 $ 131.6 $ 106.2 ======== ======== ======== STATUTORY NET INCOME................................... $ 80.0 $ 162.0 $ 61.0 ======== ======== ========
F-39 18. PHOENIX LIFE STATUTORY FINANCIAL INFORMATION AND REGULATORY MATTERS (CONTINUED) New York Insurance Law requires that New York life insurers report their risk-based capital (RBC). RBC is based on a formula calculated by applying factors to various assets, premium and statutory reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk and business risk. New York insurance law gives the New York Superintendent of Insurance explicit regulatory authority to require various actions by, or take various actions against, insurers whose total adjusted capital does not exceed certain RBC levels. Each of the U.S. insurance subsidiaries of Phoenix Life is also subject to these same RBC requirements. Phoenix Life and each of its insurance subsidiaries' RBC was in excess of 300% of Company Action Level (the level where a life insurance enterprise must submit a comprehensive plan to state insurance regulators) as of December 31, 2007 and 2006. Under New York Insurance Law, Phoenix Life can pay stockholder dividends to us in any calendar year without prior approval from the New York Insurance Department in the amount of the lesser of 10% of Phoenix Life's surplus to policyholders as of the immediately preceding calendar year or Phoenix Life's statutory net gain from operations for the immediately preceding calendar year, not including realized capital gains. Phoenix Life paid dividends of $92.2 million in 2007 and is able to pay $83.8 million in dividends in 2008 without prior approval from the New York Insurance Department. Any additional dividend payments, in excess of $83.8 million in 2008, would be subject to the discretion of the New York Superintendent of Insurance. 19. PREMISES AND EQUIPMENT Premises and equipment are included in other general account assets in our balance sheet. COST AND CARRYING VALUE:
AS OF DECEMBER 31, ----------------------------------- 2007 2006 ----------------- ----------------- CARRYING CARRYING COST VALUE COST VALUE ($ in millions) ------- -------- ------- -------- Real estate....................................... $ 106.8 $36.1 $ 105.5 $37.0 Equipment......................................... 213.1 49.2 200.2 40.9 Leasehold improvements............................ -- -- 0.8 0.7 ------- ----- ------- ----- Premises and equipment cost and carrying value.... 319.9 $85.3 306.5 $78.6 ===== ===== Accumulated depreciation and amortization......... (234.6) (227.9) ------- ------- PREMISES AND EQUIPMENT............................ $ 85.3 $ 78.6 ======= =======
Depreciation and amortization expense for premises and equipment for 2007, 2006 and 2005 totaled $12.8 million, $12.1 million and $9.2 million, respectively. Rental expenses for operating leases for continuing operations, principally with respect to buildings, amounted to $3.0 million, $2.7 million and $2.4 million in 2007, 2006 and 2005, respectively. Future minimum rental payments under non-cancelable operating leases for continuing operations were $12.4 million as of December 31, 2007, payable as follows: 2008, $2.5 million; 2009, $2.1 million; 2010, $2.0 million; 2011, $1.4 million; 2012, $1.0 million; and thereafter, $3.5 million. F-40 20. RELATED PARTY TRANSACTIONS Phoenix Investment Partners (PXP), an indirect wholly-owned subsidiary of The Phoenix Companies, through its affiliated registered investment advisors, provides investment advisory services to Phoenix Life for a fee. Investment advisory fees incurred by Phoenix Life under this arrangement were $11.6 million, $9.8 million and $9.4 million for 2007, 2006 and 2005, respectively. Amounts payable to the affiliated investment advisors were $0.1 million and $0.5 million, as of December 31, 2007 and 2006, respectively. Through July 2007, PXP provided investment advisory services to the variable product separate accounts. They received variable product separate account fees on our behalf, retained a portion of those fees, for services provided, and forward the remainder to us. Amounts receivable from PXP for those fees were $0.0 million and $0.7 million as of December 31, 2007 and 2006, respectively. The variable product separate account fees retained by PXP were $0.5 million, $1.8 million and $1.9 million for 2007, 2006 and 2005, respectively. Effective August 2007, Phoenix Variable Advisors, Inc. (PVA), an indirect wholly-owned subsidiary of Phoenix Life became the investment advisor for the variable product separate accounts. They receive variable product separate account fees on our behalf and forward them to us, net of sub-advisory fees they paid. Amounts receivable from PVA for those fees were $0.6 million as of December 31, 2007. On February 26, 2001, Phoenix Life entered into a $69.0 million subordinated loan agreement with PXP, due March 1, 2006, in exchange for debentures held by Phoenix Life. Interest was payable quarterly in arrears at an annual rate based on LIBOR plus 2%. The average blended interest rate was approximately 5% for the year ended December 31, 2005. On December 31, 2005, Phoenix Life entered into a new $69.0 million five-year subordinated loan agreement with PXP to replace the prior agreement. The new loan agreement requires quarterly principal payments of $3.0 million beginning at the closing date with all remaining principal amounts due December 31, 2010. Interest is payable quarterly in arrears at an annual rate of 6.55%. Amounts due at December 31, 2007 and 2006 were $42.0 million and $54.0 million, respectively. Phoenix Equity Planning Corporation (PEPCO), a wholly-owned subsidiary of PXP, is the principal underwriter of Phoenix Life's annuity and variable life contracts. Contracts may be purchased through registered representatives of a former Phoenix affiliate, W.S. Griffith & Co., Inc. (Griffith), as well as other outside broker-dealers who are licensed to sell Phoenix Life annuity contracts. Phoenix Life incurred commissions for contracts underwritten by PEPCO of $60.2 million, $48.9 million and $45.3 million for 2007, 2006 and 2005, respectively. Amounts payable to PEPCO were $2.4 million and $0.5 million, as of December 31, 2007 and 2006, respectively. State Farm Mutual Automobile Insurance Company (State Farm) currently owns of record more than 5% of The Phoenix Companies' outstanding common stock. During 2007, 2006 and 2005, we incurred $62.3 million, $50.1 million and $37.6 million, respectively, in compensation costs for the sale of our insurance and annuity products by entities that were either subsidiaries of State Farm or owned by State Farm employees. Amounts payable to State Farm were $3.9 million and $2.4 million as of December 31, 2007 and 2006, respectively. 21. CONTINGENT LIABILITIES Litigation and Arbitration We are regularly involved in litigation and arbitration, both as a defendant and as a plaintiff. The litigation and arbitration naming us as a defendant ordinarily involves our activities as an insurer, investor, or taxpayer. It is not feasible to predict or determine the ultimate outcome of all legal or arbitration proceedings or to provide reasonable ranges of potential losses. We believe that the outcomes of our litigation and arbitration matters are not likely, either individually or in the aggregate, to have a material adverse effect on our financial condition. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation and arbitration, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our results of operations or cash flows in particular quarterly or annual periods. F-41 21. CONTINGENT LIABILITIES (CONTINUED) Regulatory Matters State regulatory bodies, the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. (NASD) and other regulatory bodies regularly make inquiries of The Phoenix Companies, Phoenix Life and our affiliates and, from time to time, conduct examinations or investigations concerning our compliance with, among other things, insurance laws and securities laws. We endeavor to respond to such inquiries in an appropriate way and to take corrective action if warranted. For example, in October 2007, the New York State Insurance Department commenced the on-site portion of its routine quinquennial financial and market conduct exam of Phoenix Life and its New York domiciled life insurance subsidiary for the five year period ending December 31, 2007. In addition, federal and state regulatory authorities from time to time make inquiries and conduct examinations regarding compliance by Phoenix Life and its subsidiaries with securities and other laws and regulations affecting their registered products. We endeavor to respond to such inquiries in an appropriate way and to take corrective action if warranted. There has been a significant increase in federal and state regulatory activity relating to financial services companies, with a number of recent regulatory inquiries focusing on late-trading, market timing and valuation issues. Our products entitle us to impose restrictions on transfers between separate account sub-accounts associated with our variable products. In 2005, the Boston District Office of the SEC completed a compliance examination of certain of The Phoenix Companies affiliates that are registered under the Investment Company Act of 1940 or the Investment Advisers Act of 1940. Following the examination, the staff of the Boston District Office issued a deficiency letter primarily focused on perceived weaknesses in procedures for monitoring trading to prevent market timing activity. The staff requested The Phoenix Companies to conduct an analysis as to whether shareholders, policyholders and contract holders who invested in the funds that may have been affected by undetected market timing activity had suffered harm and to advise the staff whether The Phoenix Companies believes reimbursement is necessary or appropriate under the circumstances. A third party was retained to assist The Phoenix Companies in preparing the analysis. Based on this analysis, The Phoenix Companies advised the SEC that it does not believe that reimbursement is appropriate. Over the past several years, a number of companies have announced settlements of enforcement actions with various regulatory agencies, primarily the SEC and the New York Attorney General's Office. While no such action has been initiated against us, it is possible that one or more regulatory agencies may pursue this type of action against us in the future. Financial services companies have also been the subject of broad industry inquiries by state regulators and attorneys general which do not appear to be company-specific. In May 2005, we received a subpoena from the Connecticut Attorney General's office and an inquiry from the Connecticut Insurance Department requesting information regarding finite reinsurance. We cooperated fully and have had no further inquiry since responding. These types of regulatory actions may be difficult to assess or quantify, may seek recovery of indeterminate amounts, including punitive and treble damages, and the nature and magnitude of their outcomes may remain unknown for substantial periods of time. While it is not feasible to predict or determine the ultimate outcome of all pending inquiries, investigations, legal proceedings and other regulatory actions, or to provide reasonable ranges of potential losses, we believe that their outcomes are not likely, either individually or in the aggregate, to have a material adverse effect on our consolidated financial condition. However, given the large or indeterminate amounts sought in certain of these actions and the inherent unpredictability of regulatory matters, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our results of operation or cash flows in particular quarterly or annual periods. F-42 21. CONTINGENT LIABILITIES (CONTINUED) Discontinued Reinsurance Operations In 1999, we discontinued our reinsurance operations through a combination of sale, reinsurance and placement of certain retained group accident and health reinsurance business into run-off. We adopted a formal plan to stop writing new contracts covering these risks and to end the existing contracts as soon as those contracts would permit. However, we remain liable for claims under contracts which have not been commuted. For example, we participate in a workers' compensation reinsurance pool formerly managed by Unicover Managers, Inc. (Unicover). The pool ceased accepting new risks in early 1999. Further, we were a retrocessionaire (meaning a reinsurer of other reinsurers) of the Unicover pool. We have been involved in disputes relating to the activities of Unicover. These disputes have been substantially resolved or settled. Our discontinued group accident and health reinsurance operations also include other (non-Unicover) workers' compensation reinsurance contracts and personal accident reinsurance contracts, including contracts assumed in the London market. We are engaged in arbitrations, disputes or investigations with several ceding companies over the validity of, or amount of liabilities assumed under, their contracts. These arbitrations, disputes and investigations are in various stages. We bought retrocessional reinsurance for a significant portion of our assumed reinsurance liabilities. Some of the retrocessionaires have disputed the validity of, or amount of liabilities assumed under, their contracts with us. Most of these disputes with retrocessionaires have been resolved or settled. The remaining arbitrations and disputes are at various stages. We have established reserves for claims and related expenses that we expect to pay on our discontinued group accident and health reinsurance business. These reserves are based on currently known facts and estimates about, among other things, the amount of insured losses and expenses that we believe we will pay, the period over which they will be paid, the amount of reinsurance we believe we will collect from our retrocessionaires and the likely legal and administrative costs of winding down the business. We expect our reserves and reinsurance to cover the run-off of the business; however, unfavorable or favorable claims and/or reinsurance recovery experience is reasonably possible and could result in our recognition of additional losses or gains, respectively, in future years. Given the uncertainty associated with litigation and other dispute resolution proceedings, as well as the lack of sufficient claims information, the range of any reasonably possible additional future losses or gains is not currently estimable. However, it is our opinion, based on current information and after consideration of the provisions made in these financial statements, that any future adverse or favorable development of recorded reserves and/or reinsurance recoverables will not have a material adverse effect on our consolidated financial position. Nevertheless, it is possible that future developments could have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods. 22. OTHER COMMITMENTS During the normal course of business, we enter into agreements to fund venture capital partnerships and to purchase private placement investments. As of December 31, 2007, we had committed $164.4 million under such investments, of which $62.6 million is expected to be disbursed by December 31, 2008. In connection with the sale of certain venture capital partnerships, we issued a guarantee with respect to the outstanding unfunded commitments related to the partnerships that were sold. We believe the likelihood that we will have to perform under this guarantee is remote. The unfunded commitments were $13.3 million at December 31, 2007. F-43 PART C Item 24. Financial Statements and Exhibits. (a) Financial Statements. (1) The financial statements of the Registrant and the Report of Independent Registered Public Accounting Firm thereto are contained in the Registrant's Annual Report and are included in the Statement of Additional Information. The financial statements of the Registrant include: Statement of Assets and Liabilities as of December 31, 2007; Statement of Operations for the year ended December 31, 2007; Statement of Changes in Net Assets for the years ended December 31, 2007 and 2006; and Notes to Financial Statements. (2) The consolidated financial statements of Phoenix Life Insurance Company and the report of Independent Registered Public Accounting Firm are contained in the Statement of Additional Information. The consolidated financial statements of Phoenix Life Insurance Company include: Consolidated Balance Sheet as of December 31, 2007 and 2006; Consolidated Statement of Income and Comprehensive Income for the years ended December 31, 2007, 2006 and 2005; Consolidated Statement of Cash Flows for the years ended December 31, 2007, 2006 and 2005; Consolidated Statement of Changes in Stockholder's Equity for the years ended December 31, 2007, 2006 and 2005; and Notes to Financial Statements. (b) Exhibits. (1) Resolution of Board of Directors of Phoenix Life Insurance Company establishing the Phoenix Life Variable Accumulation Account is incorporated by reference to Registrant's Form N-4 (File No. 002-78020) Post-Effective Amendment No. 30, filed via EDGAR on November 29, 1999. (2) Not Applicable. (3) Distribution of Contracts. (a) Master Service and Distribution Compliance Agreement between Depositor and Phoenix Equity Planning Corporation dated November 1, 2000 is incorporated by reference to Registrant's Form N-4 (File No. 333-68872) Pre-Effective Amendment No. 1, filed via EDGAR on November 15, 2001. (b) Form of Broker Dealer Supervisory and Service Agreement between Phoenix Equity Planning Corporation and Independent Brokers with respect to the Sales of Contracts filed via EDGAR on Registration Statement Form N-4 (File No. 002-78020) Post-Effective Amendment No. 44 on April 25, 2005. (4) (a) Form of Contract (Big Edge Form No. 1017) is incorporated by reference to Registrant's Post-Effective Amendment No. 9 filed on October 23, 1986 and filed via EDGAR with Registrant's Post-Effective Amendment No. 26 (File No. 002-78020) filed on April 30, 1997. (b) Form of Contract (Big Edge Plus Form No. 2646) is incorporated by reference to Registrant's Post-Effective Amendment No. 13 filed on May 2, 1988 and filed via EDGAR Post-Effective Amendment No. 26 (File No. 002-78020) filed on April 30, 1997. (c) Form of Contract (Group Strategic Edge Form Nos. GD601 and GD603) is incorporated by reference to Registrant's Post-Effective Amendment No. 21 filed on April 29, 1993 and Post-Effective Amendment No. 26 (File No. 002-78020), filed via EDGAR on April 30, 1997. (d) Form of Contract (Big Edge Choice for New York Form No. D602) is incorporated by reference to Registrant's Post-Effective Amendment No. 25 (File No. 002-78020), filed via EDGAR on February 28, 1997. (e) Form of Contract (The Phoenix Edge-VA for New York Form No. D602NY) is incorporated by reference to Registrant's Post-Effective Amendment No. 30 (File No. 002-78020), filed via EDGAR on November 29, 1999. (f) Form of Contract (Phoenix Spectrum Edge Form No. 612), filed via EDGAR with Post-Effective Amendment No. 34 (File No. 002-78020) on September 13, 2001. (g) Guaranteed Minimum Income Benefit Rider, Form Number DR81, filed via EDGAR on Registration Statement Form N-4 (File No. 002-78020) Post-Effective Amendment No. 44 on April 25, 2005. (h) Guaranteed Minimum Accumulation Benefit Rider, Form DR84, filed via EDGAR on Registration Statement Form N-4 (File No. 002-78020) Post-Effective Amendment No. 44 on April 25, 2005. 1 (i) Guaranteed Minimum Withdrawal Benefit Rider Form No. 06GMWB is incorporated by reference to Registrant's Post-Effective Amendment No. 3 on Form N-4 (File No. 333-123035), filed via EDGAR on December 19, 2006. (j) Waiver of Withdrawal Charge for Nursing Home Confinement and Terminal Illness Form No. 08HNW is incorporated by reference to Post-Effective Amendment No. 51 on Form N-4 (File No. 002-78020) filed via EDGAR on April 30, 2008. (5) (a) Form of Application (Big Edge Form No. OL2502) is incorporated by reference to Registrant's Post-Effective Amendment No. 9 filed on October 23, 1986 and Post-Effective Amendment No. 26 (File No. 002-78020), filed via EDGAR on April 30, 1997. (b) Form of Application (Big Edge Plus Form No. OL1340) is incorporated by reference to Registrant's Post-Effective Amendment No. 13 filed on May 2, 1988 and Post-Effective Amendment No. 26 (File No. 002-78020), filed via EDGAR on April 30, 1997. (c) Form of Application (Group Strategic Edge Form No. OL2318) is incorporated by reference to Registrant's Post-Effective Amendment No. 21 filed on April 29, 1993 and Post-Effective Amendment No. 26 (File No. 002-78020), filed via EDGAR on April 30, 1997. (d) Form of Application (Big Edge Choice for New York Form No. OL2115NY) is incorporated by reference to Registrant's Post-Effective Amendment No. 25 File No. 002-78020), filed via EDGAR on February 28, 1997. (e) Form of Application (The Phoenix Edge-VA for New York Form No. OL2744NY) is incorporated by reference to Registrant's Post-Effective Amendment No. 30 (File No. 002-78020), filed via EDGAR on November 29, 1999. (f) Form of Application (Phoenix Spectrum Edge, Form No. OL3174), filed via EDGAR with Post-Effective Amendment No. 34 (File No. 002-78020) on September 13, 2001. (6) (a) Amended and Restated Charter of Phoenix Life Insurance Company, dated December 20, 2004, is incorporated by reference to Registration Statement Form N-4 (File No. 002-78020) Post-Effective Amendment No. 44 filed via EDGAR on April 25, 2005. (b) Amended and Restated Bylaws of Phoenix Life Insurance Company, dated December 1, 2004, Registration Statement Form N-4 (File No. 002-78020) Post-Effective Amendment No. 44 filed via EDGAR on April 25, 2005. (7) Not Applicable. (8) (a) Participation Agreements. (1) (a) Participation Agreement dated May 1, 2000 between Phoenix Home Life Mutual Insurance Company, PHL Variable Insurance Company, Franklin Templeton Variable Insurance Products Trust, and Franklin Templeton Distributors, Inc. is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (b) Amendment dated May 1, 2000 to Participation Agreement between Phoenix Home Life Mutual Insurance Company, PHL Variable Insurance Company, Franklin Templeton Variable Insurance Products Trust, and Franklin Templeton Distributors, Inc. is incorporated by reference to Registrant's Post-Effective amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (c) Amendment to Participation Agreement as of May 3, 2004 by and among Franklin Templeton Variable Insurance Products Trust, Franklin Templeton Distributors, Inc., Phoenix Life Insurance Company and PHL Variable Insurance Company is incorporated by reference to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4 (File No. 333-123040), filed via EDGAR on April 27, 2006. (d) Amendment No. 3 to Participation Agreement as of May 1, 2006, by and among Franklin Templeton Variable Insurance Products Trust, Franklin Templeton Distributors, Inc., Phoenix Life Insurance Company and PHL Variable Insurance Company, is incorporated by reference to Registrant's Form N-4 (File No. 333-123035), Post Effective Amendment No. 3, filed via EDGAR on December 19, 2006. (e) Amendment No.4 to Participation Agreement as of May 1, 2007, by and among Franklin Templeton Variable Insurance Products Trust, Franklin Templeton Distributors, Inc., Phoenix Life Insurance Company, and PHL Variable Insurance Company is incorporated by reference to Pre-Effective Amendment No.1 on Form N-6 (File No.333-146301), filed via EDGAR on December 21, 2007. (f) Amendment No.5 dated March 1, 2008 to the Participation Agreement dated May 1, 2000 among Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., Phoenix Home Mutual Life Insurance Company, and PHL Variable Insurance Company, incorporated by reference to Pre-Effective Amendment No. 1 on Form N-4 (File No. 333-147565), filed via EDGAR on April 4, 2008. (2) (a) Participation Agreement dated April 18, 1995 between Phoenix Home Life Mutual Insurance Company and Wanger Advisors Trust is incorporated by reference to Registrant's Post- 2 Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (b) Amendment No. 1 dated December 16, 1996 to Participation Agreement between Phoenix Home Life Mutual Insurance Company and Wanger Advisors Trust is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (c) Amendment No. 2 to the Participation Agreement dated December 16, 1996 between PHLVIC and Wanger is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (3) Fund Participation Agreement dated July 15, 1999 among Phoenix Home Life Mutual Insurance Company, Insurance Series, and Federated Securities Corp. is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (4) (a) Fund Participation Agreement dated July 19, 1999 among Phoenix Home Life Mutual Insurance Company, BT Insurance Funds Trust and Bankers Trust Company, is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (b) Amendment No. 1 dated April 27, 2001 to the Fund Participation Agreement among Phoenix Home Life Mutual Insurance Company, Deutsche Asset Management VIT Funds and Bankers Trust Company, is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (c) Amendment No. 2 dated October 29, 2001 to the Fund Participation Agreement among Phoenix Life Insurance Company, Deutsche Asset Management VIT Funds and Deutsche Asset Management, Inc. is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (d) Amendment No. 3 dated February 1, 2008 to the Fund Participation Agreement dated July 19, 1999 among Phoenix Life Insurance Company, DWS Investments VIT Funds (formerly, Deutsche Asset Management VIT Funds and BT Insurance Funds Trust) and Deutsche Investment Management Americas Inc. (successor by merger to Deutsche Asset Management, Inc.), is incorporated by reference to Post-Effective Amendment No. 51 on Form N-4 (File No. 002-78020) filed via EDGAR on April 30, 2008. (5) Participation Agreement dated December 17, 1999 among Phoenix Home Life Mutual Insurance Company, Morgan Stanley Dean Witter Universal Funds, Inc., Morgan Stanley Dean Witter Investment Management, Inc., and Miller Anderson & Sherrerd, LLP is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (6) Participation Agreement dated June 1, 2000 among Phoenix Home Life Mutual Insurance Company, The Alger American Fund and Fred Alger & Company, Incorporated is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (7) (a) Participation Agreement dated June 1, 2000 among Phoenix Home Life Mutual Insurance Company, Variable Insurance Products Fund and Fidelity Distributors Corporation is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (b) Amendment and Assignment dated as of June 6, 2007 between Variable Insurance Products Fund II ("Current Fund"), Fidelity Distributors Corporation (the "Underwriter") and PHL Variable Insurance Company (the "Company") to the Participation Agreement dated June 1, 2000, as amended, is incorporated by reference to Pre-effective Amendment No.1 to Initial Registration Statement on Form N-6 (File No.333-143656) filed via EDGAR on November7, 2007. (Note: Fidelity reorganized the following portfolios: Asset Manager Portfolio, Asset Manager: Growth Portfolio and Investment Grade Bond Portfolio into a new Variable Insurance Products Fund V. This Amendment (1) amends the Participation Agreement to delete the affected portfolios; and (2) creates a new participation agreement for Fund V by adopting the terms of the Participation Agreement and assigning each fund's rights, benefits and obligations under the Participation Agreement with respect to the corresponding portfolios of Fund V.) (8) Participation Agreement dated March 29, 2001 among Phoenix Home Life Mutual Insurance Company, AIM Variable Insurance Funds, Phoenix Equity Planning Corporation and AIM 3 Distributors, Inc. is incorporated by reference to Registrant's Post-Effective Amendment No. 21 on Form S-6 (File No. 033-06793), filed via EDGAR on April 29, 2002. (9) Participation Agreement dated May 30, 2003 among Phoenix Life Insurance Company, Rydex Variable Trust and Rydex Distributors, Inc., is incorporated by reference to Registrant's Post-Effective Amendment No. 26 on Form N-6 (File No. 033-06793), filed via EDGAR on April 30, 2004. (10) Participation Agreement dated April 25, 2005 among Phoenix Life Insurance Company, Lazard Asset Management Securities LLC and Lazard Retirement Series, Inc, is incorporated by reference to Registrant's Post-Effective Amendment No. 2 on Form N-4 (File 333-123035), via EDGAR on April 27, 2006. (11) Participation Agreement dated April 14, 2005 among Phoenix Life Insurance Company, Lord Abbett Series Fund, Inc., and Lord Abbett Distributor LLC, is incorporated by reference to Registrant's Post-Effective Amendment No. 2 on Form N-4 (File 333-123035), filed via EDGAR on April 27, 2006. (12) Participation Agreement dated May 1, 2006 among Phoenix Life Insurance Company, Oppenheimer Variable Account Funds and Oppenheimer Funds, Inc., is incorporated by reference to Registrant's Form N-4 (File Number 333-123035), on Post-Effective Amendment No. 3, filed via EDGAR, on December 19, 2006. (13) Participation Agreement dated May 1, 2006 among Phoenix Life Insurance Company, PIMCO Variable Insurance Trust and Allianz Global Investors Distributors LLC is incorporated by reference to Registrant's Form N-4 (File Number 333-123035) on Post-Effective Amendment No. 3, filed via EDGAR, on December 19, 2006. (14) Participation Agreement dated May 1, 2006 among Phoenix Life Insurance Company, Neuberger Berman Advisers Management Trust and Neuberger Berman Management, Inc., is incorporated by reference to Registrant's Form N-4 (File Number 333-123035) on Post-Effective Amendment No. 3, filed via EDGAR, on December 19, 2006. (15) Participation Agreement dated May 1, 2006 among The Universal Institutional Funds Inc., Morgan Stanley Distribution Inc., Morgan Stanley Investment Management Inc., and Phoenix Life Insurance Company, is incorporated by reference to Registrant's Form N-4 (File Number 333-123035) on Post-Effective Amendment No. 3, filed via EDGAR, on December 19, 2006. (16) Amended and Restated Participation Agreement dated January 1, 2007, among The Phoenix Edge Series Fund, Phoenix Life Insurance Company, PHL Variable Insurance Company, and Phoenix Life and Annuity Company, is incorporated by reference to Form N-4 (File No. 033-87376), filed via EDGAR on Post-Effective No. 27, filed via EDGAR on February 20, 2007. (17) Participation Agreement dated September 7, 2007 among Phoenix Life Insurance Company, Sentinel Variable Products Trust and Sentinel Financial Services Company is incorporated by reference to Post-Effective Amendment No. 5 on Form N-4 (File No. 333-123035), filed via EDGAR on September 7, 2007. (18) Participation Agreement dated April 1, 2008, among Phoenix Life Insurance Company, Phoenix Equity Planning Corporation, AllianceBernstein LP and AllianceBernstein Investments, Inc. is incorporated by reference to Post-Effective Amendment No. 51 on Form N-4 (File No. 002-78020) filed via EDGAR on April 30, 2008. (19) Participation Agreement dated February 1, 2008, among Phoenix Life Insurance Company, Phoenix Equity Planning Corporation, Summit Mutual Funds, Inc., and Ameritas Investment Corporation is incorporated by reference to Post-Effective Amendment No. 51 on Form N-4 (File No. 002-78020) filed via EDGAR on April 30, 2008. (b) Other Material Contracts: (1) Amended and Restated Administration and Accounting Services Agreement dated March 1, 2003 by and between Phoenix Life Insurance Company and PFPC, INC. is incorporated by reference to Post-Effective Amendment No. 5 on Form N-4 (File No. 333-123035), filed via EDGAR on September 7, 2007. (2) Amendment dated January 1, 2005 to Amended and Restated Administration and Accounting Services Agreement between Phoenix Life Insurance Company and PFPC, INC. is incorporated by reference to Post-Effective Amendment No. 5 on Form N-4 (File No. 333-123035), filed via EDGAR on September 7, 2007. (3) Information Sharing Agreements pursuant to Rule 22c-2 for the following funds: AIM Variable Insurance Funds,The Alger American Fund,DWS Funds, Federated Insurance Series,.Franklin Templeton 4 Variable Insurance Products Trust,Lazard Retirement Series,Lord Abbett Series Fund, Inc.,Neuberger Berman Advisers Management Trust,Oppenheimer Variable Account Funds,The Rydex Trust,Wanger Advisors Trust; and, The Universal Institutional Funds are incorporated by reference to Form N-4 (File No. 033-87376), Post-Effective Amendment No. 29, filed via EDGAR on May 1, 2007. (4) Information Sharing Agreement dated as of September 7, 2007, pursuant to Rule 22c-2 between Phoenix Life Insurance Company, PHL Variable Insurance Company, and Phoenix Life and Annuity Company and the Sentinel Variable Products Trust is incorporated by reference to Post-effective Amendment No.6 on Form N-4 (File No.333-123035), filed via EDGAR on September 28, 2007. (5) Information Sharing Agreement dated February 1, 2008 by and between PHL Variable Insurance Company, Phoenix Life and Annuity Company, Phoenix Life Insurance Company and Summit Mutual Funds, Inc. is incorporated by reference to Post-Effective Amendment No. 8 on Form N-4 (File No. 333-123040), filed via EDGAR on April 30, 2008. (9) Written Opinion and Consent of Michele Drummey, is filed herewith. (10) (a) Written Consent of PricewaterhouseCoopers LLP is filed herewith. (b) Powers of Attorney are incorporated by reference to Post- Effective Amendment No. 51 on Form N-4 (File No. 002-78020) filed via EDGAR on April 30, 2008. (11) Not Applicable. (12) Not Applicable. 5 Item 25. Directors and Executive Officers of the Depositor. Name and Principal Business Address Positions and Offices with Depositor ----------------------------------- ------------------------------------------ Sal H. Alfiero Director Protective Industries, LLC Buffalo, NY Martin N. Baily Director The Brookings Institution Washington, D.C. Jean S. Blackwell Director Cummins Inc. Columbus, IN 47202-3005 Peter C. Browning* Director Arthur P. Byrne Director J.W. Childs Associates Boston, MA Sanford Cloud, Jr.* Director Gordon J. Davis, Esq. Director Dewey and LeBoeuf, LLP New York, NY John H. Forsgren* Director Ann Maynard Gray* Director John E. Haire* Director Jerry J. Jasinowski * Director Thomas S. Johnson Director New York, NY Dona D. Young* Chairman of the Board, President and Chief Executive Officer Philip K. Polkinghorn* Senior Executive Vice President and President, Life and Annuity Tracy L. Rich* Executive Vice President, General Counsel and Secretary Daniel J. Moskey* Vice President and Treasurer James D. Wehr** Senior Executive Vice President and Chief Investment Officer David R. Pellerin** Senior Vice President and Chief Accounting Officer Peter A. Hofmann* Senior Executive Vice President and Chief Financial Officer * The principal business address of this individual is One American Row, Hartford, CT 06103-2899. ** The principal business address of this individual is 56 Prospect Street, Hartford, CT 06103-2836. 6 Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant. The Phoenix Companies, Inc. (100%) Delaware Phoenix Distribution Holding Company (100%) Connecticut WS Griffith Securities, Inc. (100%) New York Phoenix Investment Management Company (100%) Connecticut Phoenix Investment Partners, Ltd. (100%) Delaware DP Holdings, Ltd. (100%) New Brunswick, Canada DPCM Holdings, Inc. (100%) Illinois Duff & Phelps Investment Management Company (100%) Illinois Goodwin Capital Advisers, Inc. (100%) New York Kayne Anderson Rudnick Investment Management, LLC (100%) California Pasadena Capital Corporation (100%) California Engemann Asset Management (100%) California Phoenix Alternative Investment Advisers, Inc. (100%) Connecticut Phoenix Equity Planning Corporation (100%) Connecticut Phoenix Investment Counsel, Inc. (100%) Massachusetts Phoenix/Zweig Advisers, LLC (100%) Delaware Euclid Advisors, LLC (100%) New York PXP Securities Corp. (100%) New York Rutherford Financial Corporation (100%) Delaware Rutherford, Brown & Catherwood, LLC (73.2%) Delaware SCM Advisors, LLC (100%) California Walnut Asset Management, LLC (70.6%) Delaware Phoenix Life Insurance Company (100%) New York Phoenix Foundation (0%)Connecticut Next Generation Ventures LLC (50%) Connecticut Phoenix Life Separate Account B (100%) New York Phoenix Life Separate Account C (100%) New York Phoenix Life Separate Account D (100%) New York Phoenix Life Variable Accumulation Account (100%) New York Phoenix Life Variable Universal Life Account (100%) New York PM Holdings, Inc. (100%) Connecticut American Phoenix Life and Reassurance Company (100%) Connecticut Phoenix Life and Reassurance Company of New York (100%) New York PFG Holdings, Inc. (100%) Pennsylvania AGL Life Insurance Company (100%) Pennsylvania PFG Distribution Company (100%) Delaware Philadelphia Financial Group, Inc. (100%) Delaware PHL Variable Insurance Company (100%) Connecticut PHL Variable Accumulation Account (100%) Connecticut PHLVIC Variable Universal Life Account (100%) Connecticut Phoenix Founders, Inc. (100%) Connecticut Phoenix International Capital Corporation (100%) Connecticut Practicare, Inc. (100%) Delaware Phoenix Life and Annuity Company (100%) Connecticut Phoenix Life and Annuity Variable Universal Life Account (100%) Connecticut Phoenix New England Trust Holding Company (100%) Connecticut Phoenix Variable Advisors, Inc. (100%) Delaware PML International Insurance Limited (100%) Bermuda The Phoenix Edge Series Fund (0%) Massachusetts business trust Phoenix National Trust Holding Company (100%) Connecticut Phoenix Life Solutions, Inc (100%) Delaware 7 Only companies that file consolidated financial statements with the Securities and Exchange Commission ("SEC") are The Phoenix Companies Inc. and Phoenix Life Insurance Company. In addition, PHL Variable Insurance Company and Phoenix Life and Annuity Company file individual financial statements with the SEC. For the remainder, except the separate accounts (defined as Phoenix Life Separate Account B, Phoenix Life Separate Account C, Phoenix Life Separate Account D, Phoenix Life Variable Accumulation Account, Phoenix Life Variable Universal Life Account, PHL Variable Accumulation Account, PHLVIC Variable Universal Life Account, and Phoenix Life and Annuity Variable Universal Life Account) all other entities are included in the consolidated financial statement, for The Phoenix Companies, Inc., but none file individual financial statements with the SEC. Item 27. Number of Contract Owners. On February 29, 2008 there were 11,269 qualified and 7,325 nonqualified contract owners. Item 28. Indemnification. Section 722 of the New York Business Corporation Law, as made applicable to insurance companies by Section 108 of the New York Insurance Law, provides that a corporation may indemnify any director or officer of the corporation made, or threatened to be made, a party to an action or proceeding other than one by or in the right of the corporation to procure a judgment in its favor, whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, by reason of the fact that he, his testator or intestate, served such other corporation in any capacity at the request of the indemnifying corporation. Article VI, Section 6.1 of the Bylaws of the Depositor (as amended and restated effective December 1, 2004) provide that: "To the full extent permitted by the laws of the State of New York, the Company shall indemnify any person made or threatened to be made a party to any action, proceeding or investigation, whether civil or criminal, by reason of the fact that such person, or such person's testator or intestate: (1) is or was a Director, officer or employee of the Company; or (2) serves or served another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity at the request of the Company, and at the time of such services, was a director, officer or employee of the Company against judgments, fines, amounts paid in settlement and reasonable expenses, including attorney's fees, actually and necessarily incurred in connection with or as a result of such action, proceeding or investigation, or any appeal therein. Subject to applicable law, the indemnification provided in this Article VI shall not be deemed to be exclusive of any other rights to which a director, officer or employee of the Company seeking indemnification may be entitled." Insofar as indemnification for liability arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 29. Principal Underwriters. Phoenix Equity Planning Corporation ("PEPCO") (a) PEPCO serves as the principal underwriter for the following entities: PEPCO serves as the principal underwriter for the following entities: Phoenix Adviser Trust, Phoenix Asset Trust, Phoenix Equity Series Fund, Phoenix Equity Trust, Phoenix Institutional Mutual Funds, Phoenix Investment Series Fund, Phoenix Investment Trust 06, Phoenix Investment Trust 97, Phoenix Series Fund, Phoenix Strategic Equity Series Fund, The Phoenix Edge Series Fund, Phoenix Life Variable Accumulation Account, Phoenix Life Variable Universal Life Account, Phoenix Life and Annuity Variable Universal Life Account, PHL Variable Accumulation Account, PHL Variable Accumulation Account II, PHLVIC Variable Universal Life Account and PHL Variable Separate Account MVA1. 8 (b) Directors and Executive Officers of PEPCO. Name Position ------------------------ -------------------------------------------------- George R. Aylward, Jr.** Director and Executive Vice President John H. Beers* Vice President and Secretary John R. Flores* Vice President and Anti-Money Laundering Officer David Hanley** Vice President and Treasurer Stephen D. Gresham** Director and Senior Vice President David C. Martin* Vice President and Chief Compliance Officer Philip K. Polkinghorn* Director and Executive Vice President * The business address of this individual is One American Row, Hartford, CT 06103-2899. ** The business address of this individual is 56 Prospect Street, Hartford, CT 06103-2836. (c) PEPCO received n contracts which are the subject of this Registration Statement. Item 30. Location of Accounts and Records. The accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules under it are maintained at the administrative offices of Phoenix Life Insurance Company located at One American Row, Hartford, CT 06103-2899. Item 31. Management Services. Under a contract with Phoenix Life Insurance Company ("PLIC"), Ibbotson Associates provides certain asset allocation services, including a risk tolerance questionnaire to assist the policy owner, for use in conjunction with the policy. For these services, PLIC pays Ibbotson an annual flat fee. The fees paid for the last three fiscal years follow: Year Fee Paid --------------------------------------------------------------------- -------- 2007 $ 95,000 2006................................................................. $101,000 2005................................................................. $ 86,000 9 Item 32. Undertakings. (a) Registrant hereby undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements contained therein are never more than 16 months old for so long as payments under the Contracts may be accepted; (b) Registrant hereby undertakes to include as part of any application to purchase a Contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information; (c) Registrant hereby undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this form promptly upon written or oral request. (d) Phoenix Life Insurance Company represents that the fees and charges deducted under the Contract are reasonable in relation to the services rendered, the expenses expected to be incurred and the risks assumed by Phoenix Life Insurance Company. 10 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Phoenix Life Variable Accumulation Account, certifies that it meets all of the requirements for effectiveness of this Post-Effective Amendment No. 52 pursuant to Rule 485(b) under the Securities Act of 1933. The Registrant causes this Post-Effective Amendment No. 52 to Registration Statement No. 002-78020 to be signed on its behalf by the undersigned thereunto duly authorized, all in the City of Hartford and the State of Connecticut, on this 1st day of May, 2008. PHOENIX LIFE VARIABLE ACCUMULATION ACCOUNT PHOENIX LIFE INSURANCE COMPANY By: ---------------------------------------- *Dona D. Young, Chairman of the Board, President and Chief Executive Officer of Phoenix Life Insurance Company By:/s/ Kathleen A. McGah ---------------------------------------- *Kathleen A. McGah * As Attorney-in-Fact pursuant to power of attorney As required by the Securities Act of 1933, the following persons in the capacities stated have signed this Post-Effective Amendment No. 52 to Registration Statement No. 002-78020 on May 1, 2008. Signature Title ------------------- ------------------------------------- ------------------- Chairman of the Board, President and *Dona D. Young Chief Executive Officer ------------------- Chief Accounting Officer *David R. Pellerin ------------------- Chief Financial Officer *Peter A. Hofmann ------------------- Director *Sal H. Alfiero ------------------- Director *Martin N. Baily ------------------- Director *Jean S. Blackwell ------------------- Director *Peter C. Browning ------------------- Director *Arthur P. Byrne 11 Signature Title ------------------- ----------- ------------------- Director *Sanford Cloud, Jr. ------------------- Director *Gordon J. Davis ------------------- Director *John H. Forsgren ------------------- Director *Ann Maynard Gray ------------------- Director *John E. Haire ------------------- Director *Jerry J. Jasinowski ------------------- Director *Thomas S. Johnson /s/ Kathleen A. McGah ---------------------- *Kathleen A. McGah 12 Exhibit Index Exhibit 24(b)(9) Opinion and Consent of Counsel Exhibit 24(b)(10)(a) Consent of Independent Registered Public Accounting Firm 13