<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
---------------------
Securities and Exchange Commission File No. 812-06037
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-2265014
(I.R.S. Employer Identification No.)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of principal executive offices)
(617) 266-6008
(Registrant's telephone number, including area code)
---------------------
Indicated by check market whether the registrant (1) has filed reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the issuer's sole class of common stock, as
of July 15, 1997 was 2,600.
<PAGE> 2
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
Quarterly Report on Form 10-Q
For the period ended June 30, 1997
Table of Contents
- -------------------------------------------------------------------------
Page
----
Part I Financial Information 3
Item 1. Financial Statements 3
Balance Sheets as of June 30, 1997 and December 31, 1996 3
Statements of Operations for the three and six month
period ended June 30, 1997 and 1996 4
Statement of Changes in Capital and Deficit for the six
months ended June 30, 1997 5
Statements of Cash Flows for the six months ended
June 30, 1997 and 1996 6
Notes to Financial Statements 7
Item 2. Management Discussion and Analysis of Results of
Operations and Financial Condition 9
Part II Other Information 10
Item 1 Legal Proceedings 10
Item 2 Change in Securities 10
Item 3 Default upon Senior Securities 10
Item 4 Submission of matters to a vote of Security Holders 10
Item 5 Other Information 10
Item 6A Exhibits 10
Item 6B Reports on Form 8-K 12
2
<PAGE> 3
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF
NAWL HOLDING COMPANY, INC.)
<TABLE>
Balance Sheets - Statutory Basis
<CAPTION>
June 30, 1997 December 31, 1996
-------------- -----------------
ASSETS (unaudited)
<S> <C> <C>
Investments
Bonds $ 14,031,089 $ 13,848,316
Real estate 0 2,268,120
Common stock 32,387,193 30,305,498
Policy loans 1,226,284 454,026
Cash and short-term investments 9,030,464 7,321,515
-------------- --------------
Total investments 56,675,030 54,197,475
Accrued investment income 286,392 278,106
Other assets 3,663,635 4,008,003
Separate account assets 7,695,485,959 6,459,289,860
-------------- --------------
Total assets 7,756,111,016 6,517,773,444
============== ==============
LIABILITIES
Aggregate reserves 4,806,099 3,674,617
Transfers from separate account, net (202,899,079) (188,238,440)
Borrowed money 163,879,309 138,200,680
Accrued interest on surplus note 2,391,232 1,591,232
Payable to parent 0 405,711
Funds held account from reinsurers 6,000,000 6,000,000
Asset valuation reserve 2,679,874 2,089,490
Bank overdraft 0 7,598,444
Amounts payable on reinsurance ceded 2,209,348 8,122,060
Other liabilities 10,837,656 9,486,084
Separate account liabilities 7,695,485,959 6,459,289,860
-------------- --------------
Total liabilities 7,685,390,398 6,448,219,738
============== ==============
Capital and deficit
Surplus note payable to parent 20,000,000 20,000,000
Common stock (shares authorized: 3,000; issued and outstanding
2,600; par value $1,000) 2,600,000 2,600,000
Paid-in capital excess of par value 128,633,000 128,633,000
Unassigned deficit (80,512,382) (81,679,294)
-------------- --------------
Total capital and deficit 70,720,618 69,553,706
-------------- --------------
Total liabilities, capital and deficit $7,756,111,016 $6,517,773,444
============== ==============
</TABLE>
3
<PAGE> 4
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF
NAWL HOLDING COMPANY, INC.)
<TABLE>
Statements of Operations - Statutory Basis
(Unaudited)
<CAPTION>
Year to date April 1 - June 30,
6/30/97 6/30/96 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Annuity considerations and deposits $724,898,896 $543,077,280 $404,472,324 $293,891,866
Net investment income 2,949,912 2,345,499 1,605,410 867,367
Commissions and expense allowances on 12,898,845 12,022,196 7,236,035 6,169,453
reinsurance ceded
Reinsurance experience refund 1,279,302 2,004,049 864,695 1,182,314
Reserve adjustments on reinsurance (26,681,632) (5,063,327) (11,546,660) (1,133,727)
------------ ------------ ------------ ------------
Total revenues 715,345,323 554,385,697 402,631,804 300,977,273
Expenses:
Annuity benefits 244,227,711 179,055,221 119,229,309 92,354,402
Increase in reserves 1,131,481 303,178 723,534 157,324
Increase in separate account liability 389,773,577 310,296,689 235,602,131 176,832,293
Commissions 49,694,796 42,921,334 27,616,841 23,639,417
General expenses 16,626,499 12,364,932 8,338,790 6,039,347
Interest expense 4,860,563 4,661,721 2,413,667 2,466,109
Recapture fee on reinsurance ceded 3,990,086 8,544,363 2,153,722 2,421,206
Reinsurance premium 1,590,900 1,126,584 519,688 733,774
------------ ------------ ------------ ------------
Total expenses 711,895,613 559,274,022 396,597,682 304,643,872
Gain(loss) before realized capital losses
and tax provision 3,449,710 (4,888,325) 6,034,122 (3,666,599)
Realized capital (loss) (2,137,449) (2,136,679) (770) (1,849,442)
------------ ------------ ------------ ------------
Gain(loss) before tax provision 1,312,261 (7,025,004) 6,033,352 (1,849,442)
Tax provision 142,414 0 142,414 0
------------ ------------ ------------ ------------
Net gain(loss) $ 1,169,847 $ (7,025,004) $ 5,890,938 $ (5,516,041)
============ ============ ============ ============
</TABLE>
4
<PAGE> 5
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF
NAWL HOLDING COMPANY, INC.)
<TABLE>
Statement of Changes in Capital and Deficit - Statutory Basis
(Unaudited)
<CAPTION>
Paid-In Capital in
Surplus Note Common Excess of Par Unassigned Total Capital
Stock Value Deficit and Deficit
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1997 $20,000,000 $2,600,000 $128,633,000 $(81,679,294) $69,553,706
Net loss 1,169,847 1,169,847
Change in net unrealized capital 2,136,683 2,136,683
losses
Change in asset valuation reserve (590,384) (590,384)
Increase in non-admitted assets 90,766 90,766
Initial commission allowance on
reinsurance ceded (1,640,000) (1,640,000)
------------------------------------------------------------------------------------
Balances at June 30, 1997 $20,000,000 $2,600,000 $128,633,000 $(80,512,382) $70,720,618
====================================================================================
</TABLE>
5
<PAGE> 6
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF
NAWL HOLDING COMPANY, INC.)
<TABLE>
Statements of Cash Flows - Statutory Basis
(Unaudited)
<CAPTION>
For the six months ended June 30,
1997 1996
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Annuity considerations and deposits $ 724,898,896 $ 543,077,280
Allowances & reserve adjustments on reinsurance ceded (13,782,787) 6,958,869
Net investment income 895,865 655,841
Experience refund on reinsurance ceded 1,279,302 -
Surrender benefits and other fund withdrawals paid (215,445,991) (161,356,722)
Other benefits paid to policyholders (28,355,130) (18,715,936)
Commissions, other expenses & taxes paid (66,791,533) (54,948,360)
Net transfers to separate account (404,144,157) (323,517,613)
Other operating expenses paid (10,731,610) (14,332,662)
------------- -------------
Net cash used by operating activities (12,177,145) (22,179,303)
INVESTING ACTIVITIES
Proceeds from investments sold, matured or repaid:
Bonds 3,538,536 8,691,439
Stocks 5,292,561
Real estate 2,268,120 961,565
Cost of investments acquired:
Bonds (3,758,006) (600,558)
Stocks (18,306,983)
Policy loans (772,258) (13,001)
------------- -------------
Net cash provided by investing activities 1,276,392 (3,974,977)
------------- -------------
OTHER CASH PROVIDED (APPLIED):
Capital and surplus paid-in - 15,000,000
Borrowed money 25,635,948 22,322,778
Other sources 4,529,688 1,751,008
Other applications (17,555,934) (13,279,319)
------------- -------------
Net other cash provided (used) 12,609,702 25,794,467
------------- -------------
Net change in cash and short-term investments 1,708,949 (359,813)
Cash and short-term investments, beginning of period 7,321,515 1,797,230
------------- -------------
Cash and short-term investments, end of period $ 9,030,464 $ 1,437,417
============= =============
</TABLE>
6
<PAGE> 7
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
NOTES TO THE FINANCIAL STATEMENTS
UNAUDITED
---------
The accompanying unaudited financial statements of North American Security Life
Insurance Company (the "Company"), include all adjustments, consisting of normal
recurring accruals, that the Company's management considers necessary for a fair
presentation of the Company's financial position and results of operations as of
and for the interim periods presented. The Company believes the disclosures in
these financials are adequate to present fairly the information contained
herein. These financial statements should be read in conjunction with the
audited financial statements contained in the Company's annual report on Form
10-K. The results of operations for the three and six months ended June 30, 1997
are not necessarily indicative of the results to be expected for the full year.
Financial results have been prepared on the basis of statutory accounting
practices which until December 31, 1995, were considered by the insurance
industry to be in accordance with generally accepted accounting principles
(GAAP) for mutual life insurance companies and their wholly-owned subsidiaries.
Commencing January 1, 1996, financial statements prepared on the basis of
statutory accounting practices will no longer be considered in accordance with
GAAP. Since the Company has yet to complete its conversion to GAAP, the
accompanying statements were prepared on the statutory basis of accounting.
NASL Financial Services, Inc. ("NASL Financial"), the investment adviser to the
North American Funds (the "Fund"), and its parent, North American Security Life
Insurance Company, have signed a binding letter of intent with CypressTree
Investments, Inc. ("Cypress") pursuant to which it is expected that Cypress will
purchase a portion of NASL Financial's business relating to the rendering of
investment advisory and distribution services to the Fund. The completion of the
transaction is subject to several conditions, including (i) the signing of a
definitive agreement regarding the sale, (ii) the approval of an advisory
agreement between the Fund and CypressTree Asset Management Corporation, Inc.
("CAM"), an affiliate of Cypress, by the Board of Trustees of the Fund and
shareholders of each Fund portfolio, (iii) the approval of a subadvisory
agreement between CAM and the current subadviser to each Fund portfolio by the
Board of Trustees of the Fund and the shareholders of the applicable Fund
portfolio and (iv) the requirement that the aggregate net asset value of the
Fund at the closing be not less than $750 million. During the second quarter of
1997, a definitive agreement was signed and the Board of Trustees approved the
advisory agreement and each of the subadvisory agreements. A shareholders
meeting is scheduled for September 24, 1997 at which meeting the shareholders
will vote on proposals to approve the advisory agreement and the subadvisory
agreements. Cypress does not currently intend to recommend any changes to the
existing subadvisers to the Fund or any fees or expense limitations applicable
to the Fund. The closing for the transaction is expected to occur on or before
September 30, 1997. Cypress, located in Boston, Massachusetts. was formed in
1996 to acquire, advise and distribute mutual funds through broker-dealers,
banks and other intermediaries. Management believes divestiture of the retail
mutual fund business will not have a material effect on the Company's financial
condition.
7
<PAGE> 8
Investments
- -----------
The Company has a coinsurance agreement that reinsures 100% of all products
fixed investment option. Hence, the general account investments held by the
Company support the surplus account and specific state requirements for
securities held on account for the benefit of policyholders.
The amortized and estimated fair value of investments in debt securities at June
30, 1997 is as follows:
<TABLE>
<CAPTION>
Gross Gross
(in thousands) Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
-------------------------------------------------------
<S> <C> <C> <C> <C>
US Treasury securities and
obligations of US
Government agencies $ 7,288 $134 $ 26 $7,396
Corporate debt securities 6,303 0 22 6,281
Mortgage-backed securities 440 20 0 460
------- ---- ---- -------
Totals $14,031 $154 $48 $14,137
======= ==== ==== =======
</TABLE>
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
- ---------------------
Net gain was $5.9 million in the second quarter of 1997 compared to a loss of
$5.5 million in the second quarter of 1996. Included in the prior years net loss
was $1.8 million of realized capital losses on the disposition of real estate.
For the six months ended June 30, 1997 net income was $1.2 million versus a loss
of $7.0 million in 1996. Included in year to date results for 1997 and 1996 was
$2.1 million of realized capital losses. Strong market performance in 1997 has
generated favorable asset based fee income. Total annuity deposits, in the
second quarter increased from $293.9 million to $404.5 million, a 37.6% increase
primarily as a result of the Company's Strategic change in its separate account
investment platform. The strong market performance and favorable annuity
deposits have resulted in higher asset based fees which have offset the negative
strain of writing new business.
Financial Condition
- -------------------
Total assets increased from $6,517.8 million at December 31, 1996 to $7,756.1
million at June 30, 1997 an increase of $1.2 billion. Separate account assets of
$7,695.5 million represent 99.2% of total assets as the Company continues to
focus on its variable option insurance products.
Total capital and deficit increased from $69.6 million at December 31, 1996 to
$70.7 million at June 30, 1997, an increase of $1.1 million principally the
result of the net income from operations.
Since 100% of the variable option annuity deposits are invested in the separate
account the Company must finance acquisition costs through internally generated
cashflows or external borrowing. Due to the favorable annuity deposits during
the second quarter of 1997 internal cashflows were not sufficient to finance the
cost of writing new business, hence the Company borrowed an additional $25
million from its parent.
9
<PAGE> 10
ITEM 1 - LEGAL PROCEEDINGS
No reportable events
ITEM 2 - CHANGES IN SECURITIES
(a) and (b) No reportable events
(c)
The Company currently sells Venture Group Annuity, a flexible premium payment
deferred variable unallocated group annuity, to retirement plans that qualify
for special tax treatment under Section 401(a) of the Internal Revenue Code.
Sales of these securities are not required to be registered under the Securities
Act of 1933 (Section 3(a)(2) of this Act). NASL Financial Services, Inc., a
wholly owned subsidiary of the Company is the principal underwriter of the
contracts and Wood Logan Associates, Inc., an affiliate of the Company, is the
promotional agent. There are no maximum or minimum purchase payments required to
establish a contract. The value of a contract will vary according to the
investment performance, charges and expenses of the subaccounts in which the
contract is invested. As of June 30, 1997, the total variable assets in the
Venture Group Annuity was $70,301,415.
ITEMS 3 - DEFAULTS UPON SENIOR SECURITIES
No reportable events
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An action by written consent of the sole stockholder of the Company, NAWL
Holding Co., Inc., with regard to changing the Company name from North American
Security Life Insurance Company to The Manufacturers Life Insurance Company of
North America was approved on March 27, 1997.
ITEM 5 - OTHER INFORMATION
No reportable events
ITEM 6A - EXHIBITS
(3) Exhibits (the Registrant is also referred to as the "Company")
Exhibit No. Description
- ----------- -----------
1(a) Underwriting Agreement between the Company
and NASL Financial Services, Inc.
(Underwriter)1/
1(b) Promotional Agent Agreement between NASL
Financial Services, Inc. (Underwriter), the
Company and Wood Logan Associates, Inc.
(Promotional Agent) 2/
2 None
3(i) Article of Incorporation of the Company 3/
3(ii) By-Laws of the Company 4/
4(i) Form of Individual Single Payment Deferred
Fixed Annuity Non-Participating Contract -
10/
4(ii) Form of Group Single Payment Deferred Fixed
Annuity Non-Participating Contract - 10/
10
<PAGE> 11
4(iii) Individual Retirement Annuity Endorsement -
10/
4(iv) ERISA Tax-Sheltered Annuity Endorsement -
10/
4(v) Tax-Sheltered Annuity Endorsement - 10/
4(vi) Section 401 Plans Endorsement - 10/
5 Opinion and Consent of James D. Gallagher,
Esq. - 11/
6 Not Applicable
7 Not Applicable
8 Not Applicable
9 Not Applicable
10(i) - Form of broker-dealer agreement between
the Company, NASL Financial Services, Inc.
(underwriter), Wood Logan Associates, Inc.
(Promotional Agent) and broker-dealers 5/
(10)(ii) - Reinsurance and Guaranteed Death Benefits
Agreement between NASL and Connecticut
General Life Insurance Company 8/
(10)(iii) - Reinsurance Agreement between NASL and
PaineWebber Life Insurance Company 9/
(10)(iv) - Coinsurance Agreement between NASL and
Peoples Security Life Insurance Company -
12/
(10)(v) - Reinsurance and Accounts Receivable
Agreements between NASL and ITT Lyndon
Life - 12/
(10)(vi) - Automatic Modified -Coinsurance
Reinsurance Agreement between NASL and
Transamerica Occidental Life Insurance
Company - 12/
(10)(vii) - Automatic Yearly Renewable Term
Reinsurance Agreement between NASL and
Transamerica Occidental Life Insurance
Company - 12/
(10)(viii) - Amendment No. 1 to the Variable Annuity
Guaranteed Death Benefit Reinsurance
Agreement between NASL and Connecticut
General Life Insurance Company -12/
11 None
12 Not Applicable
13 Not Applicable
14 Not Applicable
15 None
16 Not Applicable
17 Not Applicable
18 None
19 None
20 Not Applicable
21 The Company has the following wholly owned
subsidiaries: NASL Financial Services, Inc.
and First North American Life Assurance
Company
22 None
23(i) Consent of Coopers & Lybrand L.L.P.- Not
Applicable
23(ii) Consent of Ernst & Young - Not Applicable
24 (i) Power of Attorney (Principal Financial and
Accounting Officer of the Company) 13/
24(ii) Power of Attorney (Directors of the Company)
13/
11
<PAGE> 12
25 Not Applicable
26 Not Applicable
27 Financial Data Schedule - filed herewith
28 Not Applicable
1/ Incorporated by reference to Exhibit (A)(3)(a) to Form S-6, file number
2-93435, filed September 24, 1984 on behalf of the NASL Variable Account of the
Company
2/Incorporated by reference to Exhibit 3(ii) to Form N-4, file number 33-28455,
filed February 15, 1991 on behalf of the NASL Variable Account of the Company
3/ Incorporated by reference to Exhibit (A)(6) to Form S-6, file number 2-93435,
filed September 24, 1984 on behalf of the NASL Variable Account of the Company
4/ Incorporated by reference to Exhibit (b)(6)(ii) to Form N-4, file number
33-9960, filed November 4, 1986 on behalf of the NASL Variable Account of the
Company
5/ Incorporated by reference to Exhibit (b)(3)(iii) to pre-effective amendment
no. 1 to Form N-4, file number 33-9960, filed February 2, 1987 on behalf of the
NASL Variable Account of the Company
6/ not applicable
7/ not applicable
8/ Incorporated by reference to Exhibit (b)(7)(i) to Registration Statement on
Form N-4, file number 33-76162, filed March 1, 1996
9/ Incorporated by reference to Exhibit (b)(7)(iii) to Registration Statement on
Form N-4, file number 33-76162, filed March 1, 1996
10/ Incorporated by reference to Exhibit 4 to Registration Statement on Form
S-1, file number 33-6011, filed June 14, 1996
11/ Incorporated by reference to Exhibit 5 to to Pre-Effective Amendment No. 1
to the Registration Statement on Form S-1, file number 33-6011, filed January
29, 1997
12/ Incorporated by reference to Exhibits (10)(iv) through (10)(viii) to
Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1, file
number 33-6011, filed January 29, 1997
13/ Incorporated by reference to Exhibit 24(i) to Form 10-K file number 33-6011,
of the Company filed May 5, 1997
ITEM 6B - REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(Registrant)
By: /s/ Richard C. Hirtle
-----------------------------------------------------------------
Richard C. Hirtle, Vice President, Treasurer and Chief Financial
Officer (Principal Financial Officer and Duly Authorized Officer)
Date: August 14, 1997
13
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial data schedule for quarter ended
June 30, 1997
14
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENTS OF
FINANCIAL POSITION STATEMENTS OF OPERAITONS AND UNASSIGNED DEFICIT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 14,031,089
<DEBT-CARRYING-VALUE> 14,031,087
<DEBT-MARKET-VALUE> 14,137,000
<EQUITIES> 32,387,193
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 46,418,282
<CASH> 9,030,464
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 7,756,111,016
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 3,585,426
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 163,879,309
0
0
<COMMON> 2,600,000
<OTHER-SE> 68,120,618
<TOTAL-LIABILITY-AND-EQUITY> 7,756,111,016
724,898,896
<INVESTMENT-INCOME> 2,420,505
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 243,926,975
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 1,312,265
<INCOME-TAX> 142,414
<INCOME-CONTINUING> 1,169,851
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,169,851
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
