<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 33-37587
PRUCO LIFE INSURANCE COMPANY
(Exact name of Registrant as specified in its charter)
Arizona 22-1944557
- ---------------------------- ---------------------------
(State or other (IRS Employer
jurisdiction, Identification No.)
incorporation or
organization)
213 Washington Street, Newark, New Jersey 07102
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(Address of principal executive offices)(Zip Code)
(973) 802-2042
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(Registrant's Telephone Number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
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.
YES x NO
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Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of November 15, 1999.
Common stock, par value of $10 per share: 250,000 shares outstanding
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PRUCO LIFE INSURANCE COMPANY
INDEX TO FINANCIAL STATEMENTS
PAGE NO.
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Cover Page 1
Index 2
PART I - Financial Information
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Item 1. (Unaudited) Consolidated Financial Statements
Consolidated Statements of Financial Position
September 30, 1999 and December 31, 1998 3
Consolidated Statements of Operations and Comprehensive Income
Nine and Three months ended September 30, 1999 and 1998 4
Consolidated Statements of Cash Flows
Nine months ended September 30, 1999 and 1998 5
Notes to the Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
PART II - Other Information
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Item 2. Changes in Securities and Use of Proceeds 11
Item 6. Exhibits and Reports on Form 8-K 12
Signature Page 13
2
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Pruco Life Insurance Company and Subsidiaries
Consolidated Statements of Financial Position
September 30, 1999 (Unaudited) and December 31, 1998 (In Thousands)
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September 30, December 31,
1999 1998
------------ -----------
ASSETS
Fixed maturities
Available for sale, at fair value (amortized
cost, 1999: $2,895,223; 1998: $2,738,654) $2,842,836 $2,763,926
Held to maturity, at amortized cost (fair
value, 1999: $390,621; 1998: $421,845) 395,927 410,558
Equity securities - available for sale, at fair
value (cost, 1999: $193; 1998: $2,951) 507 2,847
Mortgage loans on real estate 16,671 17,354
Policy loans 791,761 766,917
Short-term investments 281,322 240,727
Other long-term investments 760 1,047
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Total investments 4,329,784 4,203,376
Cash 84,824 89,679
Deferred policy acquisition costs 984,544 861,713
Accrued investment income 66,887 61,114
Other assets 56,035 65,145
Separate Account assets 13,933,944 11,531,754
----------- -----------
TOTAL ASSETS $19,456,018 $16,812,781
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Policyholders' account balances $2,901,108 $2,702,601
Future policy benefits and other policyholder
liabilities 535,738 528,189
Cash collateral for loaned securities 64,982 73,336
Securities sold under agreement to repurchase 50,213 49,708
Income taxes 171,537 193,358
Payable to affiliate 66,356 66,568
Other liabilities 114,558 55,038
Separate Account liabilities 13,878,023 11,490,751
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Total liabilities 17,782,515 15,159,549
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Contingencies (See Note 3)
Stockholder's Equity
Common stock, $10 par value;
1,000,000 shares, authorized;
250,000 shares, issued and outstanding 2,500 2,500
Paid-in-capital 439,582 439,582
Retained earnings 1,250,181 1,202,833
Accumulated other comprehensive income
Net unrealized investment (losses) gains (17,965) 9,902
Foreign currency translation adjustments (795) (1,585)
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Accumulated other comprehensive income (18,760) 8,317
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Total stockholder's equity 1,673,503 1,653,232
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TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $19,456,018 $16,812,781
=========== ===========
See Notes to Consolidated Financial Statements
3
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Pruco Life Insurance Company and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
Three and Nine Months Ended September 30, 1999 and 1998 (In Thousands)
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Nine months ended Three months ended
September 30, September 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
REVENUES
Premiums $ 50,815 $ 42,410 $ 15,588 $ 17,487
Policy charges and fee income 308,097 257,463 105,649 88,831
Net investment income 209,508 199,079 71,911 69,112
Realized investment (losses)
gains, net (17,916) 37,645 (4,116) 24,660
Asset management fee income 40,863 29,319 15,347 11,294
Other income 15,480 13,933 5,042 4,509
----------- ----------- ----------- -----------
Total revenues 606,847 579,849 209,421 215,893
----------- ----------- ----------- -----------
BENEFITS AND EXPENSES
Policyholders' benefits 142,125 135,278 35,392 52,951
Interest credited to
policyholders' account
balances 93,697 83,354 31,448 28,606
General, administrative and
other expenses 298,183 214,445 106,525 65,105
----------- ----------- ----------- -----------
Total benefits and expenses 534,005 433,077 173,365 146,662
----------- ----------- ----------- -----------
Income before income taxes 72,842 146,772 36,056 69,231
Income taxes 25,494 51,316 12,619 24,209
----------- ----------- ----------- -----------
NET INCOME $47,348 $95,456 $23,437 $45,022
----------- ----------- ----------- -----------
Other comprehensive income,
net of tax:
Unrealized losses on
securities, net of
reclassification adjustment (27,867) 7,960 (8,369) 13,566
Foreign currency
translation adjustments 790 (1,305) 260 (27)
----------- ----------- ----------- -----------
Other comprehensive income (27,077) 6,655 (8,109) 13,539
----------- ----------- ----------- -----------
TOTAL COMPREHENSIVE INCOME $ 20,271 $102,111 $ 15,328 $ 58,561
============ ============ ============ ============
See Notes to Consolidated Financial Statements
4
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Pruco Life Insurance Company and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 1999 and 1998 (In Thousands)
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1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $47,348 $95,456
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Policy charges and fee income (68,377) (23,351)
Interest credited to policyholders' account
balances 93,697 83,354
Realized investment losses (gains), net 17,916 (37,645)
Amortization and other non-cash items 48,808 13,719
Change in:
Future policy benefits and other
policyholder liabilities 7,549 22,469
Accrued investment income (5,773) 328
Separate Accounts (14,918) (7,971)
Payable to affiliate (212) (47,182)
Policy loans (24,844) (49,387)
Deferred policy acquisition costs (122,831) (130,483)
Income taxes (21,821) (12,829)
Other, net 68,630 (120,941)
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Cash Flows (Used In) From Operating Activities 25,172 (214,463)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity of:
Fixed maturities:
Available for sale 2,558,072 3,881,574
Held to maturity 38,903 58,412
Equity securities 5,189 2,830
Mortgage loans on real estate 683 661
Other long-term investments 320 510
Payments for the purchase of:
Fixed maturities:
Available for sale (2,732,358) (4,029,692)
Held to maturity (24,170) (77,914)
Equity securities (2,059) (2,097)
Other long-term investments (33) (499)
Cash collateral for loaned securities, net (8,354) 116,891
Securities sold under agreement to
repurchase, net 505 -
Short-term investments, net (40,558) (25,856)
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Cash Flows Used In Investing Activities (203,860) (75,180)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits 2,598,383 2,479,601
Withdrawals (2,424,550) (2,272,924)
Proceeds from issuance of affiliated
notes payable - 164,000
------------ -----------
Cash Flows From Financing Activities 173,833 370,677
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Net increase in Cash (4,855) 81,034
Cash, beginning of year 89,679 71,358
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CASH, END OF PERIOD $84,824 $152,392
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See Notes to Consolidated Financial Statements
5
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Pruco Life Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
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1. BASIS OF PRESENTATION
The accompanying interim consolidated financial statements have been prepared
pursuant to the rules and regulations for reporting on Form 10-Q on the basis of
generally accepted accounting principles. These interim financial statements are
unaudited but reflect all adjustments which, in the opinion of management, are
necessary to provide a fair presentation of the consolidated results of
operations and financial condition of the Pruco Life Insurance Company ("the
Company"), a wholly owned subsidiary of The Prudential Insurance Company of
America ("Prudential"), for the interim periods presented. All such adjustments
are of a normal recurring nature. The results of operations for any interim
period are not necessarily indicative of results for a full year. Certain
amounts in the Company's prior year consolidated financial statements have been
reclassified to conform with the 1999 presentation. These financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Realized investment gains, net, are computed using the specific identification
method. The carrying values of fixed maturity and equity securities are adjusted
for impairments considered to be other than temporary. During 1999, the Company
determined that for certain fixed maturities and equities in the investment
portfolio there were declines in fair value considered to be other than
temporary. For the three months and nine months ended September 30, 1999 the
Company recorded charges of $1.2 million and $4.5 million, respectively, in
"realized investment gains, net," in the Consolidated Statement of Operations
and Comprehensive Income.
3. CONTINGENCIES
Several actions, based on complaints about sales practices engaged in by
Prudential, the Company and agents, have been brought against the Company on
behalf of those persons who purchased life insurance policies. Prudential has
agreed to indemnify the Company for any and all losses resulting from such
litigation.
In the normal course of business, the Company is subject to various claims and
assessments. Management believes the settlement of these matters would not have
a material effect on the Company's financial position.
4. RELATED PARTY TRANSACTIONS
Prudential and the Company operate under service and lease agreements whereby
services of officers and employees (except for those agents employed directly by
the Company in Taiwan), supplies, use of equipment and office space are provided
by Prudential. Prudential periodically reviews its methods for determining the
level of administrative expenses charged to the Company. During 1999, Prudential
revised its allocation methodology to more closely align allocations based on
business processes, resulting in increased allocations from 1998 levels. In
addition, the method of allocating distribution costs to individual annuity
products was modified during 1999 such that allocated costs exceeding an agreed
upon amount remained with Prudential instead of being allocated to non-annuity
products within the Company. Management believes that the updated methodology is
reasonable and better reflects actual costs incurred by Prudential to process
transactions on behalf of the Company.
The Company has sold three Corporate Owned Life Insurance ("COLI") policies to
Prudential. The cash surrender value included in Separate Accounts was $653.4
million and $362.3 million at September 30, 1999 and December 31, 1998,
respectively.
The Company receives asset management fee income from policyholder account
balances invested in the Prudential Series Fund ("PSF"). The Company also
collects these fees on behalf of Prudential. The amounts due to Prudential
related to PSF fees were $11.7 million and $22.6 million at September 30, 1999
and December 31, 1998, respectively.
6
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Pruco Life Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
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5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivatives and Hedging
Activities." The new accounting treatment required by this statement will not
affect the Company's liquidity or the ultimate economic gain or loss from its
derivative positions. However, it may affect the way the Company recognizes
changes in value of some of its derivatives and derivative-like contract
features, and this could lead to more volatility in the Company's reported
income statement results, especially on a quarterly basis.
Under previous accounting standards, companies could defer recognizing changes
in the value of derivatives used to hedge various risks if certain conditions
were met. Under the new accounting standards, all derivatives must be reported
at fair value each quarter, but if special hedge accounting requirements are met
this change in fair value may be offset, entirely or partially, by also
recognizing the corresponding change in value of the hedged item. Since the
Company already marks most of its derivative positions to market each quarter,
the Company does not expect this new treatment to materially increase its net
income volatility assuming the Company continues its current derivative and
hedging strategies.
While the Statement does not apply to most traditional insurance contracts, some
contracts may contain features that can affect settlement amounts similarly to
derivatives. For these contracts, the new standard calls for separate accounting
for the "host contract" and the "embedded derivative," leading to mark-to-market
for the "embedded derivative" features that was not previously required. While
the Company's economic results from these contracts are also unaffected, this
accounting could lead to increased volatility in the quarterly income statement
results it reports.
The Company has not yet completed its assessment of the impact of the statement,
and its effect on the Company depends, among other things, on its derivative
positions and hedging strategies after the date of adoption. The Company is
required to adopt this statement no later than January 1, 2001.
7
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Cautionary Note Regarding Forward-Looking Statements
Certain of the statements included in this document may constitute
forward-looking statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Words such as "expects," "believes,"
"anticipates," "intends," "plans," "assumes," "estimates," "projects," or
variations of such words are generally part of forward-looking statements.
Forward-looking statements are made based on management's current expectations
and beliefs concerning future developments and their potential effects upon the
Company. There can be no assurance that future developments affecting the
Company will be those anticipated by management. These forward looking
statements are not a guarantee of future performance and involve risks and
uncertainties, and there are certain important factors that could cause actual
results to differ materially from estimates or expectations reflected in such
forward-looking statements including, without limitation, changes in general
economic conditions, including the performance of financial markets and interest
rates; market acceptance of new products and distribution channels; competitive,
regulatory or tax changes that affect the cost or demand for the Company's
products; and adverse litigation results. While the Company reassesses material
trends and uncertainties affecting its financial condition and results of
operations, it does not intend to review or revise any particular
forward-looking statement referenced in this document in light of future events.
The information referred to below should be considered by readers when reviewing
any forward-looking statements contained in this document.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations.
- --------------
The following analysis should be read in conjunction with the Notes to the
Consolidated Financial Statements.
The Company markets individual life insurance, variable life insurance, variable
annuities, fixed annuities, and a group annuity program primarily through
Prudential's sales force in the United States and markets individual life
insurance through its branch office in Taiwan.
The life insurance and annuity sectors of the insurance industry are subject to
regulatory oversight with particular emphasis placed on company solvency and
sales practices. These markets are also subject to increasing competitive
pressure as the legal barriers which have historically segregated the markets of
the financial services industry are being challenged through both legislative
and judicial processes. Regulatory changes have opened the insurance industry to
competition from other financial institutions, particularly banks and mutual
funds that are positioned to deliver competing investment products through
large, stable distribution channels.
Competition in the annuity industry particularly, is very intense. In the
annuity marketplace, with respect to variable annuities, investment and product
features as well as distribution capability are critical to our ability to
compete. Demographic trends and the concerns over the viability of Social
Security have resulted in the need to provide consumers with long term
retirement alternatives. Given the strong growth within the retirement savings
market, the level of competition has increased significantly not only from other
insurance companies but from other financial intermediaries as well. Product
sales and asset retention are a function of investment performance, product
features, customer service, distribution capability and product pricing.
1. Results of Operations
For the nine months ended September 30, 1999 versus 1998
- --------------------------------------------------------
Net income for the nine months ended September 30, 1999 was $47.3 million, a
decrease of $48.2 million or 50.5% from $95.5 million earned in the nine months
ended September 30, 1998.
Total insurance revenues, consisting of premiums and policy charges and fee
income, increased $59.0 million for the nine months ended September 30, 1999 to
$358.9 million from $299.9 million for the nine months ended September 30, 1998
primarily due to increased fees generated from sales of the Discovery Select
Variable Annuity ("Discovery Select") and, to a lesser extent, asset
appreciation.
Appreciation in Separate Account asset values and sales have contributed to the
growth in assets under management and consequently in policy charges and fees
earned. For Discovery Select, assets under management increased by $3.2 billion
to $6.6 billion as of September 30, 1999 from the September 30, 1998 level.
Appreciation in the Separate Account products and new deposits have also
generated an increase in asset management fee income from the Prudential Series
Fund. Asset management fee income increased $11.6 million for the nine months
ended September 30, 1999 to $40.9 million from $29.3 million for the nine months
ended September 30, 1998.
8
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The Company's Taiwan branch generated continued growth in premiums for
traditional life insurance products. Taiwan's annualized new business premiums
and the number of Taiwanese life planners grew by 45.5% and 25.9%, respectively.
The Company's net investment income was $209.5 million for the nine months ended
September 30, 1999, an increase of $10.4 million from the nine months ended
September 30, 1998. The increase was primarily the result of higher fixed
maturity portfolio assets due to the addition of the Prudential Credit Enhanced
("PACE") product.
Net realized investment gains decreased $55.5 million for the nine months ended
September 30, 1999 to a $17.9 million loss from a $37.6 million gain for the
nine months ended September 30, 1998. The decrease in net realized investment
gains was primarily due to sales of fixed maturities during a period of
increasing interest rates for most of 1999. In addition, during 1999, the
Company determined that for certain fixed maturities and equities in the
investment portfolio there were declines in fair value considered to be other
than temporary resulting in a charge of $4.5 million.
Interest credited to policyholders' account balances increased by $10.3 million
for the nine months ended September 30, 1999 to $93.7 million from $83.4 million
for the nine months ended September 30, 1998. This increase is due primarily to
the new PACE product.
General, administrative and other expenses increased $83.8 million for the nine
months ended September 30, 1999 to $298.2 million from $214.4 million for the
nine months ended September 30, 1998. The primary reason for the higher level of
expenses in 1999 is a change in Prudential's allocation methodology for expenses
billed to the Company resulting in an increase in non-deferrable expenses. The
increase in expenses was partially offset by a reduction in distribution costs
allocated to the Company's annuity products by Prudential.
For the three months ended September 30, 1999 versus 1998
- ---------------------------------------------------------
Net income for the three months ended September 30, 1999 was $23.4 million, a
decrease of $21.6 million or 48.0% from $45.0 million earned in the three months
ended September 30, 1998.
Total insurance revenues, consisting of premiums and policy charges and fee
income, increased $14.9 million for the three months ended September 30, 1999 to
$121.2 million from $106.3 million for the three months ended September 30,
1998. Appreciation in Separate Account asset values and product sales
contributed to the growth in assets under management and consequently in policy
charges and fees earned. Appreciation in the Separate Account products and new
deposits have also generated an increase in the asset management fee income from
the Prudential Series Fund. Asset management fee income increased $4.0 million
for the three months ended September 30, 1999 to $15.3 million from $11.3
million for the three months ended September 30, 1998
The Company's net investment income was $71.9 million for the three months ended
September 30, 1999 an increase of $2.8 million from the three months ended
September 30, 1998. The increase in income was primarily the result of higher
fixed maturity portfolio assets due to the addition of the PACE product.
Net realized investment gains decreased $28.8 million for the three months ended
September 30, 1999 to a $4.1 million loss from a $24.7 million gain for the
three months ended September 30, 1998. The decrease in net realized investment
gains was primarily due to sales of fixed maturities during a period of
increasing interest rates for most of 1999. In addition, the Company determined
that for certain fixed maturities and equities in the investment portfolio there
were declines in fair value considered to be other than temporary resulting in a
charge of $1.2 million.
Interest credited to policyholders' account balances increased by $2.8 million
for the three months ended September 30, 1999 to $31.4 million from $28.6
million for the three months ended September 30, 1998. This quarter's increase
is attributable to the new PACE product.
General, administrative and other expenses increased $41.4 million for the three
months ended September 30, 1999 to $106.5 million from $65.1 million for the
three months ended September 30, 1998. The primary reason for the higher level
of expenses in 1999 is a change in Prudential's allocation methodology for
expenses billed to the Company resulting in an increase in non-deferrable
expenses. The increase in expenses was partially offset by a reduction in
distribution costs allocated to the Company's annuity products by Prudential.
9
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2. Liquidity
Principal cash flow sources are investment and fee income, investment maturities
and sales, and premiums. These cash inflows may be complemented by financing
activities through other Prudential affiliates.
Cash outflows consist principally of benefits, claims and amounts paid to
policyholders in connection with policy surrenders, withdrawals and net policy
loan activity. Uses of cash also include commissions, general and administrative
expenses, and purchases of investments. Liquidity requirements associated with
policyholder obligations are monitored regularly so that the Company can manage
cash inflows to match anticipated cash outflow requirements.
The Company believes that cash flow from operations together with proceeds from
scheduled maturities and sales of fixed maturity investments, are adequate to
satisfy liquidity requirements based on the Company's current liability
structure.
The Company had $19.5 billion of assets at September 30, 1999 compared to $16.8
billion at December 31, 1998, of which $13.9 billion and $11.5 billion were held
in Separate Accounts at September 30, 1999 and December 31, 1998, respectively,
under variable life insurance policies and variable annuity contracts. The
remaining assets consisted primarily of investments and deferred policy
acquisition costs.
3. The Year 2000 Issue
Prudential has addressed the Year 2000 issue on an enterprise-wide basis;
therefore, it is not possible to differentiate the Company's Year 2000 issue
from that of Prudential. Refer to management's discussion of the Year 2000 issue
in the December 31, 1998 Form 10-K for the steps taken by Prudential to mitigate
the Year 2000 risks.
The Business Application, Infrastructure and Business Partner components of
Prudential's Year 2000 project are virtually complete. Prudential believes that
it is well positioned to lessen the impact of the Year 2000 problem. However,
given the nature of this issue, it cannot be certain of Year 2000 readiness of
third parties. As a result, we are unable to determine at this time whether the
consequences of Year 2000 failures may have a materially adverse effect on the
results of Prudential's operations, liquidity or financial condition. Prudential
will continue to review and test its contingency plans in an effort to reduce
the level of uncertainty about the effect of the Year 2000 issue and further
mitigate risk. Prudential is establishing a Year 2000 Global Control Center
("GCC") to monitor Year 2000 activity during the rollover weekend to the Year
2000 and thereafter. The GCC will receive status information from our
applications, facilities, communication centers and business partners and serve
as a central location to manage Year 2000 issues. Prudential believes that, with
the completion of the Year 2000 project as scheduled, the possibility of
significant interruptions of normal operations will be reduced.
Prudential has investment securities that are both publicly traded and privately
placed. Prudential is exposed to the risk that issuers of these investments will
be adversely affected by Year 2000 issues. Prudential has implemented procedures
to assess the impact that Year 2000 issues may have on its investments as part
of due diligence for proposed new investments, where appropriate, as well as
their ongoing review of certain portfolio holdings. Any recommended actions with
respect to particular investments the Company will consider the disclosed
potential impact of Year 2000 on the issuer.
The Year 2000 costs allocated to Pruco Life to date are not material to its
operations and financial position. Moreover, the forecasted Year 2000 allocated
costs are not expected to have a material impact on Pruco Life's ability to meet
its contractual commitments. The discussion of the Year 2000 issue herein, and
in particular the Company's plans to remediate this issue and estimated costs
thereof, are forward-looking in nature. See cautionary statement above relating
to forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
- -------------------------------------------------------------------
The Company's exposure to market risks and the way these risks are managed, are
summarized in Item 7a of the 1998 Form 10-K.
10
<PAGE>
PART II
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Item 2. Changes in Securities and Use of Proceeds.
- --------------------------------------------------
(d) Information required by Item 701(f) of Regulation S-K:
The information below pertains to modified guaranteed annuity contracts
issued by the Company in two distinct variable annuity products, Discovery
Preferred Variable Annuity and Discovery Select Variable Annuity. However,
because the modified guaranteed annuity option of each of these products is
identical, the Company has aggregated the registration of these securities.
(1) The original effective date of the Registration Statement of the Company
for the Discovery Preferred Variable Annuity on Form S-1 was declared
effective on November 27, 1995 (Registration No. 33-61143). The
Discovery Select prospectus was added through filings under Rule 424 of
the Securities Act of 1993. The registration statement continues to be
effective through annual amendments, the most recent filed April 16,
1999 and declared effective April 30, 1999.
(2) Offering commenced immediately upon effectiveness of the registration
statement.
(3) Not applicable.
(4) (i) The offering has not been terminated.
(ii) The managing underwriter of the offering is Prudential Investment
Management Services LLC.
(iii) Market-Value Adjustment Annuity Contracts (also known as modified
guaranteed annuity contracts).
(iv) Securities registered and sold for the account of the Company:
Amount registered*: $ 500,000,000
Aggregate price of the offering
amount registered: $ 500,000,000
Amount sold*: $ 243,293,000
Aggregate offering price of amount
sold to date: $ 243,293,000
* Securities not issued in predetermined units
No securities have been registered for the account of any
selling security holder.
(v) Expenses associated with the issuance of the securities:
Underwriting discounts and
commissions** $ 8,515,000
Other expenses** $ 11,938,000
-------------
Total $ 20,453,000
** Amounts are estimated and are paid to affiliated
parties.
(vi) Net offering proceeds: $ 222,840,000
(vii) Not applicable.
(viii) Not applicable.
11
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PART II
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Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
--------
3(i)(a) The Articles of Incorporation of Pruco Life Insurance Company
(as amended through October 19, 1993) are incorporated by
reference to the initial Registration Statement on Form S-6 of
Pruco Life Variable Appreciable Account as filed July 2, 1996,
Registration No. 333-07451.
3(ii) By-Laws of Pruco Life Insurance Company (as amended through May
6, 1997) are incorporated by reference to Form 10-Q as filed by
the Company on August 15, 1997.
4(a) Modified Guaranteed Annuity Contract is filed herewith
(previously filed as an exhibit to the Company's Registration
Statement on Form S-1 as filed November 2, 1990, Registration
No. 33-37587).
4(b) Market-Value Adjustment Annuity Contract is incorporated by
reference to the Company's registration statement on Form S-1,
Registration No. 333-18053, as filed November 17, 1995.
27 Financial Data Schedule is filed herewith in accordance with
EDGAR instructions.
(b) Reports on Form 8K
------------------
None
12
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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 of the
undersigned, thereunto duly authorized.
PRUCO LIFE INSURANCE COMPANY
(Registrant)
Signature Title Date
- --------- ----- ----
/s/Esther H. Milnes President and Director November 15, 1999
- -------------------------
Esther H. Milnes
/s/Dennis G. Sullivan Principal Financial Officer November 15, 1999
- ------------------------- and Chief Accounting Officer
Dennis G. Sullivan
13
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