<PAGE>
UNITED STATES
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 March 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-20018
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
in respect of
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
New Jersey 22-2426091
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
213 Washington Street, Newark, New Jersey 07102-2992
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(800) 445-4571
-----------------------------------------------------------
(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
--- ---
<PAGE>
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
A. PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
Statements of Net Assets - March 31, 1999 and December 31, 1998 3
Statements of Operations and Changes In Net Assets -
Three Months Ended March 31, 1999 and 1998 3
Notes to the Financial Statements 4
B. THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
Statements of Assets and Liabilities - March 31, 1999 and December 31, 1998 6
Statements of Operations - Three Months Ended March 31, 1999 and 1998 7
Statements of Changes in Net Assets - Three Months Ended March 31, 1999 and 1998 8
Statements of Cash Flows - Three Months Ended March 31, 1999 and 1998 9
Schedule of Investments - March 31, 1999 and December 31, 1998 10
Notes to the Financial Statements 13
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risks 17
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 6. Exhibits and Reports on Form 8-K 19
Signature Page 20
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1A. FINANCIAL STATEMENTS
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
STATEMENTS OF NET ASSETS
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED) DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
Investment in The Prudential Variable Contract
Real Property Partnership (Note 2) $ 9,290,444 $ 9,260,250
------------------- ------------------
------------------- ------------------
NET ASSETS, representing:
Equity of Contract Owners (Note 3) $ 6,301,610 $ 6,428,170
Equity of Pruco Life Insurance Company of New Jersey 2,988,834 2,832,080
------------------- ------------------
$ 9,290,444 $ 9,260,250
------------------- ------------------
------------------- ------------------
</TABLE>
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
INVESTMENT INCOME: 1999 1998
--------------- ---------------
<S> <C> <C>
Net Investment Income from Partnership Operations $ 75,627 $ 131,441
EXPENSES:
Charges to Contract Owners for Assuming Mortality Risk and
Expense Risk and for Administration 8,862 9,609
---------------- ---------------
NET INVESTMENT INCOME 66,765 121,832
---------------- ---------------
Net Change in Unrealized Loss on Investments in Partnership (64,268) (2,675)
Net Realized Gain (Loss) on Sale of Investments in Partnership 18,835 0
---------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 21,332 119,157
---------------- ---------------
CAPITAL TRANSACTIONS:
Net Withdrawals by Contract Owners (Note 4) (138,539) (69,812)
Net Contributions (Withdrawals) by Pruco Life Insurance Company of New Jersey 147,401 (225,579)
---------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL TRANSACTIONS 8,862 (295,391)
---------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 30,194 (176,234)
NET ASSETS:
Beginning of period 9,260,250 8,768,215
---------------- ---------------
End of period $ 9,290,444 $ 8,591,981
---------------- ---------------
---------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES 4 AND 5
3
<PAGE>
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The Pruco Life of New Jersey Variable Contract Real Property Account ("Real
Property Account") is used to fund benefits under certain variable life
insurance and variable annuity contracts issued by Pruco Life Insurance Company
of New Jersey. These products are Appreciable Life ("VAL"), Variable Life
("VLI"), Discovery Plus ("SPVA"), and Discovery Life Plus ("SPVL").
The accompanying unaudited financial statements included herein have been
prepared in accordance with the requirements of Form 10-Q and generally accepted
accounting principles for interim financial information. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1999 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1999. For
further information, refer to the financial statements and notes thereto
included in the Real Property Account's December 31, 1998 Annual Report on Form
10K.
NOTE 2: INVESTMENT INFORMATION FOR THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
The investment in the Partnership is based on the Real Property Account's
proportionate interest in the Partnership's market value. At March 31, 1999 and
December 31, 1998, the Real Property Account's interest in the Partnership was
4.4% or 456,853 shares.
The number of shares held by the Real Property Account in the Partnership, the
Partnership share value and the aggregate cost of investments in the Real
Property Accounts' shares held at December 31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED) DECEMBER 31, 1998
-------------- -----------------
<S> <C> <C>
SHARES OUTSTANDING: 456,853 456,853
SHARE VALUE: $20.34 $20.27
COST: $5,311,507 $5,311,507
</TABLE>
NOTE 3: CONTRACT OWNER EQUITY INFORMATION
Contract owner equity at March 31, 1999 and December 31, 1998 by product, were
as follows:
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED) DECEMBER 31, 1998
-------------- -----------------
<S> <C> <C>
VAL $ 5,151,185 $ 5,279,240
VLI 925,939 924,330
SPVA 108,204 108,172
SPVL 116,282 116,428
------------- ---------------
TOTAL $ 6,301,610 $ 6,428,170
------------- ---------------
------------- ---------------
</TABLE>
4
<PAGE>
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
NOTE 4: NET WITHDRAWALS BY CONTRACT OWNERS
Net withdrawals by contract owners for the real estate investment option in
Pruco Life Insurance Company of New Jersey's variable insurance and variable
annuity products for the three months ended March 31, 1999 and 1998, were as
follows:
<TABLE>
<CAPTION>
MARCH 31,
1999 1998
---- ----
<S> <C> <C>
VAL $ 137,766 $ 36,725
VLI 592 13,789
SPVA 181 9,139
SPVL 0 10,159
---------- ---------
TOTAL $ 138,539 $ 69,812
---------- ---------
---------- ---------
</TABLE>
5
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1B. FINANCIAL STATEMENTS
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED) DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
ASSETS
REAL ESTATE INVESTMENTS - At estimated market value:
Real estate and improvements
(cost: 3/31/99 -- $170,332,861; 12/31/98 -- $170,045,055) $ 153,924,353 $ 155,374,462
Real estate investment trusts (cost: 3/31/99 -- $10,942,566;
12/31/98 -- $10,000,005) 11,087,538 11,554,649
----------------- -----------------
Total real estate investments 165,011,891 166,929,111
MARKETABLE SECURITIES - At estimated market value
(cost: 3/31/99 -- $4,201,493; 12/31/98 -- $14,967,236) 14,950,525
4,196,640
CASH AND CASH EQUIVALENTS 41,355,874 58,578,848
DIVIDEND RECEIVABLE 0 167,275
OTHER ASSETS (net of allowance for uncollectible
accounts: 3/31/99 -- $69,427 ; 12/31/98 -- $66,000) 3,275,707 3,623,513
----------------- -----------------
Total assets $ 213,840,112 $ 244,249,272
----------------- -----------------
----------------- -----------------
LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 1,784,036 $ 1,985,400
DUE TO AFFILIATES 762,776 1,598,535
OTHER LIABILITIES 492,169 504,940
----------------- -----------------
Total liabilities 3,038,981 4,088,875
----------------- -----------------
INVESTMENT COMMITMENTS
Partners' equity 210,801,131 240,160,397
----------------- -----------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 213,840,112 $ 244,249,272
----------------- -----------------
----------------- -----------------
NUMBER OF SHARES OUTSTANDING AT END OF PERIOD 10,366,043 11,848,275
----------------- -----------------
----------------- -----------------
SHARE VALUE AT END OF PERIOD $20.34 $20.27
----------------- -----------------
----------------- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGE 13
6
<PAGE>
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1999 1998
-------------- ---------------
<S> <C> <C>
INVESTMENT INCOME:
Revenue from real estate and improvements $ 3,626,962 $ 5,750,047
Dividend income from real estate investment trust 167,275 0
Interest on short-term investments 626,633 279,071
-------------- ---------------
Total investment income 4,420,870 6,029,118
-------------- ---------------
EXPENSES:
Investment management fee 670,744 683,479
Real estate taxes 567,745 613,734
Administrative expense 468,802 424,393
Operating expense 925,256 898,647
-------------- ---------------
Total investment expenses 2,632,547 2,620,253
-------------- ---------------
NET INVESTMENT INCOME 1,788,323 3,408,865
-------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net proceeds from real estate investments sold 43,641 0
Fair value received from exchange of REIT shares 11,956,362 0
Less: Cost of REIT shares exchanged 10,000,005 0
Realization of prior periods' unrealized gain
on real estate investment trusts exchanged 1,554,644 0
-------------- ---------------
Net realized gain on real estate investments sold
and REIT shares exchanged 445,354 0
-------------- ---------------
Change in unrealized loss on real estate
investments (1,592,943) (111,515)
-------------- ---------------
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS (1,147,589) (111,515)
-------------- ---------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 640,734 $ 3,297,350
-------------- ---------------
-------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGE 13
7
<PAGE>
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1999 1998
---------------- ----------------
<S> <C> <C>
NET INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 1,788,323 $ 3,408,865
Net realized gain on real estate investments sold
and REIT shares exchanged 445,354 0
Change in unrealized loss on real estate investments (1,592,943) (111,515)
---------------- ----------------
Net increase in net assets resulting from operations 640,734 3,297,350
---------------- ----------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS:
Withdrawals by partners
(3/31/99 -- 1,482,233 shares; 3/31/98 -- 0 shares) (30,000,000) 0
---------------- ----------------
Net decrease in net assets resulting from
capital transactions (30,000,000) 0
---------------- ----------------
NET INCREASE IN NET ASSETS (29,359,266) 3,297,350
NET ASSETS - Beginning of period 240,160,397 219,531,773
---------------- ----------------
NET ASSETS - End of period $ 210,801,131 $ 222,829,123
---------------- ----------------
---------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGE 13
8
<PAGE>
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1999 MARCH 31, 1998
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 640,734 $ 3,297,350
Adjustments to reconcile net increase in net assets resulting
from operations to net cash flows from operating activities:
Net realized and unrealized loss on investments 1,147,589 111,515
Decrease (Increase) in:
Dividend Receivable 167,275 146,999
Other assets 1,361,602 52,256
(Decrease) Increase in:
Accounts payable and accrued expenses (201,364) 32,025
Due to affiliates (835,759) 3,726
Other liabilities (12,771) 53,855
---------------- ----------------
Net cash flows from operating activities 2,267,306 3,697,726
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Improvements and additional costs on prior purchases:
Net proceeds from real estate investments sold 43,641 0
Additions to real estate owned (287,806) (1,899,003)
Sale of marketable securities, net 10,753,885 5,807,912
---------------- ----------------
Net cash flows from investing activities 10,509,720 3,908,909
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Withdrawals by partners (30,000,000) 0
---------------- ----------------
Net cash flows from financing activities (30,000,000) 0
---------------- ----------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (17,222,974) 7,606,635
CASH AND CASH EQUIVALENTS - Beginning of period 58,578,848 12,880,560
---------------- ----------------
CASH AND CASH EQUIVALENTS - End of period $ 41,355,874 $ 20,487,195
---------------- ----------------
---------------- ----------------
Non-Cash Investing Activity
Exchange of shares of Meridian real estate investment trust
for shares of ProLogis real estate investment trust shares $ 10,942,566 $ -
---------------- ----------------
---------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGE 13
9
<PAGE>
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
(UNAUDITED)
MARCH 31, 1999 DECEMBER 31, 1998
----------------------------------- ------------------------------------
ESTIMATED ESTIMATED
MARKET MARKET
COST VALUE COST VALUE
---------------------------------------------------------------------------
REAL ESTATE AND IMPROVEMENTS (PERCENT OF NET ASSETS) 72.9% 64.7%
Location Description
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lisle, IL Office Building $21,750,654 $13,715,946 $21,634,707 $14,123,742
Atlanta, GA Garden Apartments 15,618,579 15,607,500 15,601,495 15,651,216
Roswell, GA Retail Shopping Center 32,283,058 28,510,431 32,272,627 28,649,176
Morristown, NJ Office Building 19,414,821 11,304,331 19,409,490 11,596,138
Bolingbrook, IL Warehouse 8,948,028 7,000,000 8,948,028 7,000,000
Raleigh, NC Garden Apartments 15,822,682 16,800,000 15,822,682 16,804,570
Nashville, TN Office Building 8,464,202 10,166,176 8,448,026 10,152,399
Oakbrook Terrace, IL Office Complex 12,945,366 15,750,000 12,945,366 15,750,000
Beaverton, OR Office Complex 10,756,953 10,728,336 10,728,618 11,200,000
Salt Lake City, UT Industrial Building 5,437,942 5,612,373 5,388,134 5,450,000
Aurora, CO Industrial Building 9,320,748 9,201,142 9,304,171 9,497,221
Brentwood, TN Office Complex 9,569,828 9,528,118 9,541,711 9,500,000
---------------------------------------------------------------------------
$170,332,861 $153,924,353 $170,045,055 $155,374,462
---------------------------------------------------------------------------
---------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST (PERCENT OF NET ASSETS) 5.3% 4.8%
Description
- -----------------------------------------------------------------------------------------------------------------------------------
Prologis REIT Shares (557,583 shares) $10,942,566 $11,087,538 $0 $0
--------------- ---------------- ---------------- ----------------
--------------- ---------------- ---------------- ----------------
Meridian REIT Shares (506,894 shares) $0 $0 $10,000,005 $11,554,649
--------------- ---------------- ---------------- ----------------
--------------- ---------------- ---------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGE 13
10
<PAGE>
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
SCHEDULE OF INVESTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, 1999
-----------------------------------------------------------------
NET ESTIMATED
FACE AMOUNT COST MARKET VALUE
------------------ ------------------- -------------------
<S> <C> <C> <C>
MARKETABLE SECURITIES (PERCENT OF NET ASSETS) 2.0%
Canadian Wheat Board, 5.146%, April 1, 1999 $2,000,000 $1,962,406 $1,962,406
International Lease Finance Corp, 6.625%, April 1, 1999 375,000 377,419 376,698
CIT Group Inc., 6.375%, May 21, 1999 400,000 402,120 401,559
Federal National Mortgage Assoc., 6.07%, July 1, 1999 1,000,000 1,005,976 1,003,327
Shell Oil Co., 6.625%, July 1, 1999 100,000 100,703 100,365
John Deere Capital Corp., 6.50%, September 20, 1999 350,000 352,870 352,285
------------------ ------------------- -------------------
TOTAL MARKETABLE SECURITIES $4,225,000 $4,201,493 $4,196,640
------------------ ------------------- -------------------
------------------ ------------------- -------------------
CASH AND CASH EQUIVALENTS (PERCENT OF NET ASSETS) 19.5%
Ciesco, LP., 4.858%, April 5, 1999 $1,915,000 $1,911,646 $1,911,646
American Express Credit Corp., 4.839%, April 6, 1999 1,800,000 1,796,619 1,796,619
First Data Corp., 4.859% April 6, 1999 2,100,000 2,096,039 2,096,039
General Electric Capital Corp. 4.862%, April 6, 1999 2,116,000 2,110,584 2,110,584
IBM Credit Corp., 4.905%, April 6, 1999 1,750,000 1,748,094 1,748,094
XEROX Credit Corp., 4.852% April 6, 1999 1,450,000 1,446,296 1,446,296
Ford Motor Credit Co., 4.863% April 8, 1999 1,400,000 1,396,228 1,396,228
Ford Motor Credit Co., 4.87% April 8, 1999 500,000 498,920 498,920
General Motors Acceptance Corp., 4.90%, April 8, 1999 2,100,000 2,097,428 2,097,428
AON Corp., 4.91%, April 9, 1999 2,100,000 2,095,427 2,095,427
GTE Funding, Inc., 4.885% April 9, 1999 1,750,000 1,744,318 1,744,318
Abbott Laboratories, 4.889%, April 12, 1999 2,100,000 2,096,015 2,096,015
Ameritech Corp., 4.853%, April 12, 1999 1,600,000 1,595,698 1,595,698
E. I. Du Pont De Nemours & Co., 4.909%, April 12, 1999 2,000,000 1,996,189 1,996,189
JP Morgan & Co., 4.862%, April 12, 1999 2,100,000 2,094,625 2,094,625
Duke Energy Corp., 4.858%, April 13, 1999 1,270,000 1,267,776 1,267,776
Merrill Lynch & Co., 4.908%, April 13, 1999 1,226,000 1,223,831 1,223,831
Aristar Inc., 4.922%, April 21, 1999 2,200,000 2,189,819 2,189,819
Halliburton Co., 4.873%, April 21, 1999 2,200,000 2,189,330 2,189,330
Countrywide Home Loan, 4.919%, April 28, 1999 1,766,000 1,759,029 1,759,029
Pioneer Hi Bred International, Inc., 4.869%, April 29, 1999 2,100,000 2,091,513 2,091,513
H.J. Heinz Co., 4.877%, May 12, 1999 1,475,000 1,466,654 1,466,654
------------------ ------------------- -------------------
TOTAL CASH EQUIVALENTS $39,018,000 $38,912,076 $38,912,076
CASH 2,443,798 2,443,798 2,443,798
------------------ ------------------- -------------------
TOTAL CASH AND CASH EQUIVALENTS $41,461,798 $41,355,874 $41,355,874
------------------ ------------------- -------------------
------------------ ------------------- -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGE 13
11
<PAGE>
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------------------------------------------
NET ESTIMATED
FACE AMOUNT COST MARKET VALUE
------------------ ------------------- -------------------
<S> <C> <C> <C>
MARKETABLE SECURITIES (PERCENT OF NET ASSETS) 6.2%
General Motors Acceptance Corp., 5.26%, January 26, 1999 $830,000 $817,556 $817,556
American Express Credit Corp., 7.375%, February 1, 1999 325,000 329,342 325,418
Canadian Imperial Bank of Commerce, 5.55%, February 10, 1999 1,000,000 999,520 999,947
Federal National Mortgage Assoc., 5.33%, February 12, 1999 100,000 99,703 99,703
Salomon Smith Barney Holdings, Inc., 5.38%, February 16, 1999 1,720,000 1,695,137 1,695,397
General Motors Acceptance Corp., 5.29 %, February 17, 1999 650,000 641,501 641,501
Chrysler Financial Company LLC , 5.26%, February 22, 1999 2,400,000 2,365,700 2,365,700
International Lease Finance Corp. 7.50% March 1, 1999 500,000 508,250 501,367
Federal Home Loan Mortgage Corp., 5.505%, March 12, 1999 1,000,000 1,000,856 1,000,630
General Motors Acceptance Corp., 6.04%, March 19, 1999 1,000,000 1,003,480 1,000,707
Merrill Lynch & CO., Inc. 5.23%, March 19, 1999 1,790,000 1,758,820 1,758,820
Canadian Wheat Board, 5.14%, April 1, 1999 2,000,000 1,962,406 1,962,406
International Lease Finance Corp., 6.625%, April 1, 1999 375,000 377,419 375,721
CIT Group Holdings, Inc, 6.375%, May 21, 1999 400,000 402,120 400,873
Federal National Mortgage Assoc., 6.07%, July 1, 1999 1,000,000 1,005,426 1,004,779
------------------ ------------------- -------------------
TOTAL MARKETABLE SECURITIES $15,090,000 $14,967,236 $14,950,525
------------------ ------------------- -------------------
------------------ ------------------- -------------------
CASH AND CASH EQUIVALENTS (PERCENT OF NET ASSETS) 24.4%
Countrywide Home Loans, 5.403%, January 4, 1999 $1,000,000 $999,400 $999,400
Fortune Brands Inc. 5.05%, January 4, 1999 3,463,000 3,461,057 3,461,057
Xerox Capital (Europe) PLC 5.303%, January 4, 1999 3,483,000 3,480,949 3,480,949
Federal National Mortgage Assoc, 5.77%, January 5, 1999 10,401,000 10,000,000 10,000,000
Ford Motor Credit Co, 5.454%, January 5, 1999 500,000 499,622 499,622
Pioneer Hi-BRED International, 5.665%, January 7, 1999 1,000,000 997,332 997,332
Ford Motor Credit Co., 6.11%, January 8, 1999 167,000 166,717 166,717
Deere & Co., 5.372 %, January 13, 1999 2,520,000 2,509,514 2,509,514
E.I. Du Pont De Nemours & Co., Inc. 5.277%, January 13, 1999 648,000 644,598 644,598
Household Finance Corp., 5.356 %, January 13, 1999 175,000 174,119 174,119
Household Finance Corp., 5.355% , January 15, 1999 2,343,000 2,331,899 2,331,899
Potomac Electric Power Co., 5.569%, January 15, 1999 3,122,000 3,110,930 3,110,930
Chrysler Financial Corp., 5.537%, January 25, 1999 1,164,000 1,158,121 1,158,121
Eastman Kodak Co., 5.232%, January 26, 1999 2,518,000 2,502,360 2,502,360
Cigna Corp., 5.559%, January 27, 1999 1,819,000 1,809,220 1,809,220
Cigna Group Holdings, Inc. 5.334%, January 27, 1999 1,851,000 1,835,496 1,835,496
Countrywide Home Loan, Inc. 5.506%, January 27, 1999 1,342,000 1,333,028 1,333,028
Countrywide Home Loan, Inc. 5.587%, January 27, 1999 1,177,000 1,169,197 1,169,197
General RE Corp., 5.187% , January 29, 1999 542,000 538,046 538,046
PNC Funding Corp. 5.728%, January 29, 1999 2,500,000 2,487,729 2,487,729
GTE Funding, Inc, Inc, 5.211%, February 1, 1999 2,526,000 2,506,048 2,506,048
Norwest Financial, Inc. 5.536%, February 3, 1999 3,563,000 3,539,593 3,539,593
CIGNA Corp., 5.233%, February 4, 1999 1,745,000 1,730,660 1,730,660
General Electric Capital Corp. 5.537%, February 4, 1999 3,563,000 3,539,049 3,539,049
Associates First Capital Corp., 5.241%, February 8, 1999 2,519,000 2,498,988 2,498,988
GTE Funding, Inc., 5.304%, February 11, 1999 1,000,000 993,413 993,413
------------------ ------------------- -------------------
TOTAL CASH EQUIVALENTS $56,651,000 $56,017,086 $56,017,086
CASH 2,561,762 2,561,762 2,561,762
------------------ ------------------- -------------------
TOTAL CASH AND CASH EQUIVALENTS $59,212,762 $58,578,848 $58,578,848
------------------ ------------------- -------------------
------------------ ------------------- -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGE 13
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS OF
PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
MARCH 31, 1999
(UNAUDITED)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements included herein have been
prepared in accordance with the requirements of Form 10-Q and generally accepted
accounting principles for interim financial information. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1999 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1999. For
further information, refer to the financial statements and notes thereto
included in each Partner's December 31, 1998 Annual Report on Form 10K.
NOTE 2: COMMITMENT FROM PARTNER
In prior years, Prudential committed to fund up to $100 million to enable the
Partnership to acquire real estate investments. Contributions to the Partnership
under this commitment were utilized for property acquisitions, and returned to
Prudential on an ongoing basis from the contract owners' net contributions and
other available cash. The amount of the commitment is reduced by $10 million for
every $100 million in current value net assets of the Partnership. As of
March 31, 1999, Prudential's equity interest in the Partnership under this
commitment was $41.4 million.
On February 2, 1999, Prudential and its partners withdrew $30 million based on
the ratio of each Partners' equity in the Partnership. At the present time,
Prudential does not intend to make further contributions during the 1999 fiscal
year.
NOTE 3: RELATED PARTY TRANSACTIONS
Pursuant to an investment management agreement, Prudential charges the
Partnership a daily investment management fee at an annual rate of 1.25% of the
average daily gross asset valuation of the Partnership. For the three months
ended March 31, 1999 and 1998 management fees incurred by the Partnership were
$670,743 and $683,479 respectively.
The Partnership also reimburses Prudential for certain administrative services
rendered by Prudential. The amounts incurred for the three months ended
March 31, 1999 and 1998 were $29,032 for each quarter, and are classified as
administrative expenses in the statements of operations.
NOTE 4: INVESTMENT IN REAL ESTATE INVESTMENT TRUST (REIT)
On March 30, 1999, the Partnership exchanged 506,894 shares of Meridian REIT for
557,583 shares of ProLogis REIT, fair value of $10,942,566, and receivable of
$1,013,796 (or total fair value of $11,956,362) as a result of ProLogis'
acquisition of Meridian. Management continued applying a 3% discount to the
market value of the ProLogis REIT shares because of the restriction which limits
the number of shares that can be publicly traded during any six month period to
30% of the total shares originally acquired.
13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
All of the assets of Pruco Life of New Jersey Variable Contract Real Property
Account ("the Account") are invested in the Prudential Variable Contract Real
Property Partnership ("the Partnership"). Correspondingly, the liquidity,
capital resources and results of operations for the Real Property Account are
contingent upon the Partnership. Therefore, all of management's discussion of
these items is at the Partnership level. The partners in the Partnership are
The Prudential Insurance Company of America, Pruco Life Insurance Company, and
Pruco Life Insurance Company of New Jersey (collectively, "the Partners").
(a) LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1999, the Partnership's liquid assets consisting of cash, cash
equivalents and marketable securities were $45.5 million, a decrease of $28.0
million from $73.5 million at December 31, 1998. The decrease is due primarily
to Partners' withdrawals of $30.0 on February 2, 1999.
At the present time, Prudential has decided not to make further contributions to
the Partnership for investments in real estate. On February 2, 1999, the
Partners made a $30 million withdrawal from excess cash. Further withdrawals may
be made by Partners during 1999 based upon the percentage of assets invested in
short term obligations and taking into consideration anticipated cash needs of
the Partnership including potential property acquisitions and capital
expenditures. Management anticipates that it's current liquid assets and ongoing
cash flow from operations will satisfy the Partnership's needs over the next
twelve months and the foreseeable future, including anticipated withdrawals by
Partners.
The Partnership's investment policy allows up to 30% investments in cash and
short-term obligations. At March 31, 1999, 21% of the Partnership's assets
consisted of cash, cash equivalents and marketable securities. Sources of
liquidity include net cash flow from property operations, interest from short
term investments, and dividends from Real Estate Investment Trust (REIT) shares.
Capital expenditures were approximately $300,000 and were of a normal recurring
nature.
(b) RESULTS OF OPERATIONS
The following is a brief comparison of the Partnership's results of operations
for the quarters ended March 31, 1999 and 1998 and an explanation of REIT
trading restriction.
MARCH 31, 1999 vs. MARCH 31, 1998
The Partnership's net investment income for the quarter ended March 31, 1999 was
$1.8 million, a decrease of $1.6 million from net investment income of $3.4
million for the corresponding period in 1998. This decrease is the result of the
factors discussed below.
Revenue from real estate and improvements for the first three months of 1999 was
$3.6 million, a decrease of $2.1 million or 37% from $5. 7 million for the
corresponding period in 1998. This decrease was primarily due to the sale of the
Partnership's industrial property located in Pomona, CA and an apartment complex
located in Farmington Hills, MI during 1998.
On March 30, 1999, the Partnership exchanged 506,894 shares of Meridian REIT for
557,583 shares of ProLogis REIT, fair value of $10,942,566, and receivable of
$1,013,796 (or total fair value of $11,956,362) as a result of ProLogis'
acquisition of Meridian. The exchange resulted in a realized gain of $401,713.
Dividend income from the Meridian REIT was $167,275 during the first quarter of
1999. There was no corresponding dividend amount during 1998.
14
<PAGE>
Interest on short-term investments increased $347,562 or 125% due primarily to a
significantly higher average cash balance during the quarter ended March 31,
1999 compared to the same quarter last year. Cash and cash equivalents
maintained through the first quarter of 1999 averaged approximately $40 million.
Administrative expenses increased $44,409 or 11%. This increase was primarily
due to the increase in occupancy in the industrial warehouse in Aurora, CO.
The following is a comparison of the Partnership's property results of
operations and realized and unrealized gains or losses, by investment type, for
the three months ended March 31, 1999 and March 31, 1998.
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
1999 1998
----------------- -----------------
<S> <C> <C>
NET INVESTMENT INCOME:
Office properties $ 1,066,496 $ 1,509,191
Apartment complexes 384,451 1,038,389
Retail property 689,146 775,034
Industrial properties 85,250 524,531
Dividend income from REIT 167,275 0
Other (including interest income,
investment management fees, etc.) (604,295) (438,280)
----------------- -----------------
TOTAL NET INVESTMENT INCOME $ 1,788,323 $ 3,408,865
----------------- -----------------
----------------- -----------------
UNREALIZED GAIN(LOSS) ON INVESTMENTS:
Office properties ($1,323,279) $708,088
Apartment complexes (65,370) (31,009)
Retail property (149,176) (54,369)
Industrial properties (200,090) (10,913)
Real estate investment trust 144,972 (723,312)
REALIZED GAIN(LOSS) ON INVESTMENTS:
Industrial properties 43,641
Real estate investment trust 401,713
TOTAL NET REALIZED AND UNREALIZED ----------------- -----------------
LOSS ON INVESTMENTS: ($1,147,589) ($111,515)
----------------- -----------------
----------------- -----------------
</TABLE>
OFFICE PROPERTIES
Net investment income from property operations for the office sector decreased
approximately $440,000 or 29% when compared to the corresponding period in 1998.
This decrease in net investment income was primarily due to higher expense
levels experienced by the Beaverton, OR and Morristown, NJ office complexes.
15
<PAGE>
The six office properties owned by the Partnership experienced a net unrealized
loss of approximately $1.3 million during the first quarter of 1999 compared to
a net unrealized gain of $708,088 in the corresponding period in 1998. The
largest share of this net unrealized loss or 40% was experienced by the office
property in Lisle, IL and was attributable to $524,000 in capital expenditures
on the property that were not reflected as an increase in market value. The
Beaverton, OR office property also experienced a net unrealized loss of
approximately $500,000. This decline in value was due to a change in discounted
cash flow assumptions resulting from the large amount of Class "A" space under
construction in the local market of which less than 10% is pre-leased. In
addition, a lower renewal probability was utilized for Nike, a major tenant. The
Morristown, NJ office property also experienced a net unrealized loss of
approximately $300,000 primarily due to an increase in expense levels and
vacancy at the property.
Occupancy at the Beaverton, OR, Oakbrook Terrace, IL and Brentwood, TN
properties remained unchanged from March 31, 1998 at 100%. Occupancy at the
Morristown, NJ property decreased from 100% at March 31, 1998 to 85% at March
31, 1999 while occupancy at the Lisle, IL office property increased from 60% at
March 31, 1998 to 96% at March 31, 1999. As of March 31, 1999 all vacant spaces
were being marketed.
APARTMENT COMPLEXES
Net investment income from property operations for the apartment sector was
$384,451 for the first quarter of 1999, a decrease of $653,938 or 63% compared
with the corresponding period in 1998. The decrease was primarily due to the
sale of the apartment complex located in Farmington Hills, MI on
October 8, 1998.
The Occupancy at the Atlanta, GA complex decreased from 98% at March 31, 1998 to
97% at March 31, 1999, while occupancy at the apartment complex in Raleigh, NC
increased from 89% at March 31, 1998 to 94% at March 31, 1999. As of
March 31, 1999, all vacant spaces were being marketed.
RETAIL PROPERTY
Net investment income for the first quarter of 1999 for the Partnership's retail
property (comprised solely of a retail shopping center) was $689,146, a decrease
of $85,888 or 11% from $775,034 for the quarter ended March 31, 1998 due
primarily to higher expense levels at the shopping center.
The retail property experienced a net unrealized loss of $149,176 and $54,369
for the first three months of 1999 and 1998, respectively. The net unrealized
loss for 1999 was the result of capital expenditures on the property that were
not reflected as an increase in market value.
The shopping center was 98% occupied at March 31, 1999 and March 31, 1998. As of
March 31, 1999, all vacant spaces were being marketed.
INDUSTRIAL PROPERTIES
Net investment income from property operations for the industrial properties
decreased from $524,531 for the three months ended March 31, 1998 to $85,250 for
the corresponding period in 1999. The majority of the decrease was a result of
the sale of Pomona Industrial Park, including the land.
The three industrial properties owned by the Partnership experienced a net
unrealized loss of approximately $200,000 during the first three months of 1999
compared to the corresponding period in 1998. The Aurora, CO property
experienced a net unrealized loss of $312,655 because there were capital
expenditures on the property that were not reflected as an increase in market
value. This net unrealized loss was offset by the Salt Lake City, UT property
which experienced a net unrealized gain of $112,565 primarily because a new
lease was executed in January 1999.
16
<PAGE>
The Occupancy at the Bolingbrook, IL was 100% occupied at March 31, 1999 and
March 31, 1998. The occupancy at the Salt Lake City, Utah property increased to
34% at March 31, 1999 from 0% at March 31, 1998. The Aurora, CO property's
occupancy rate increased to 62% at March 31, 1999 from 0% at March 31, 1998.
These properties are currently being marketed for sale.
REIT TRADING RESTRICTION
Management continued applying a 3% discount to the market value of the ProLogis
REIT shares because of the restriction which limits the number of shares that
can be publicly traded during any six month period to 30% of the total shares
originally acquired.
OTHER
Other net investment income decreased $166,015 or 38% due primarily to an
increase in expenses not related to property activities partially offset by an
increase in interest income from short-term investments.
(c) THE YEAR 2000 ISSUE
Prudential has addressed the Year 2000 issue on an enterprise-wide basis;
therefore, it is not possible to differentiate the Partnership's Year 2000 issue
from that of the 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.
Prudential believes that the Business Application, Infrastructure and Business
Partners components of the Year 2000 project are substantially on schedule.
While management expects that a small number of projects may not meet their
targeted completion dates, it is anticipated that these projects will be
completed by September 1999 so that any delays, if experienced, would not have a
significant impact on the timing of the project as a whole.
Prudential is enhancing existing business contingency plans to mitigate Year
2000 risk. These responses are being reviewed and are expected to be finalized
by June 1999 to ensure that they are workable under the special conditions of a
Year 2000 failure. The contingency plans are substantially on schedule and will
be implemented prior to year-end.
There were no Year 2000 costs allocated directly to the Partnership to date and
none are anticipated. The discussion of the Year 2000 issue herein, and in
particular Prudential's plans to remediate this issue and estimated costs
thereof, are forward-looking in nature. See cautionary statement below relating
to forward-looking statements.
(d) INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Certain of the statements contained in Management's Discussion and Analysis may
be considered forward-looking statements. Words such as "expects," "believes,"
"anticipates," "intends," "plans," or variations of such words are generally
part of forward-looking statements. Forward-looking statements are made based
upon management's current expectations and beliefs concerning future
developments and their potential effects upon the Partnership. There can be no
assurance that future developments affecting the Partnership will be those
anticipated by management. 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 Partnership's
products; and adverse litigation results. While the Partnership reassesses
material trends and uncertainties affecting its financial position and results
of operations, it does not intend to review or revise any particular
forward-looking statement referenced in this Management's Discussion and
Analysis in light of future events. The information referred to above should be
considered by readers when reviewing any forward-looking statements contained in
this Management's Discussion and Analysis.
17
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership is not subject to significant exposure to market rate risk for
changes in interest rates because the Partnership's financial instruments
consist primarily of short-term fixed rate commercial paper and does not use
derivative financial instruments. Further, by policy, the Partnership places its
investments with high quality debt security issuers, limits the amount of credit
exposure to any one issuer, limits duration by restricting the term, and holds
investments to maturity except under rare circumstances. At March 31, 1999, 79%
of the Partnership's investments were in real estate.
18
<PAGE>
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Contract owners participating in the Real Property Account have no
voting rights with respect to the Real Property Account.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
4.1 Variable Life Insurance Contract filed as Exhibit A(5) to Form
N-8B-2, Registration Statement No. 2-81243, filed
January 10, 1983, and incorporated herein by reference.
4.2 Revised Variable Appreciable Life Insurance Contract with fixed
death benefit, filed as Exhibit 1.A.(5)(c) to Post-Effective
Amendment No. 5 to Form S-6, Registration Statement No. 2-89780,
filed July 11, 1986, and incorporated herein by reference.
4.3 Revised Variable Appreciable Life Insurance Contract with variable
death benefit, filed as Exhibit 1.A.(5)(d) to Post-Effective
Amendment No. 5 to Form S-6, Registration Statement No. 2-89780,
filed July 11, 1986, and incorporated herein by reference.
4.4 Single Premium Variable Annuity Insurance Contract, filed as
Exhibit 4(i) to Form N-4, Registration Statement No. 2-99916,
filed August 28, 1985, and incorporated herein by reference.
4.5 Flexible Premium Variable Life Insurance Contract, filed as
Exhibit 1.A.(5) to Form S-6, Registration Statement No. 2-99537,
filed August 8, 1985, and incorporated herein by reference.
(b) REPORT ON FORM 8-K
None
19
<PAGE>
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.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
in respect of
Pruco Life of New Jersey Variable
Contract Real Property Account
(Registrant)
--------------------------------------------------
Date: May 17, 1998 By: /s/
---------------------- --------------------------------
Esther H. Milnes
President and Director
Date: May 17, 1998 By: /s/
------------------------ --------------------------------
Dennis Sullivan
Principal Financial Officer and
Chief Accounting Officer
20
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENTS
OF NET ASSETS; STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000829114
<NAME> PRUCO LIFE OF NEW JERSEY VAR CONTRACT REAL PROPERTY ACCOUNT
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,290,444
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,290,444
<TOTAL-LIABILITY-AND-EQUITY> 9,290,444
<SALES> 0
<TOTAL-REVENUES> 75,627
<CGS> 0
<TOTAL-COSTS> 8,862
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 21,332
<INCOME-TAX> 0
<INCOME-CONTINUING> 21,332
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,332
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENTS
OF ASSETS & LIABILITIES; STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000829114
<NAME> THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 41,355,874
<SECURITIES> 4,196,640
<RECEIVABLES> 0
<ALLOWANCES> 69,427
<INVENTORY> 0
<CURRENT-ASSETS> 213,840,112
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 213,840,112
<CURRENT-LIABILITIES> 3,038,981
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 210,801,131
<TOTAL-LIABILITY-AND-EQUITY> 213,840,112
<SALES> 0
<TOTAL-REVENUES> 4,420,870
<CGS> 0
<TOTAL-COSTS> 2,632,547
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 640,734
<INCOME-TAX> 0
<INCOME-CONTINUING> 640,734
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 640,734
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
