<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Period Ended June 30, 1995.
Commission file number _33-87272
_________________GOLDEN AMERICAN LIFE INSURANCE COMPANY_______________
(Exact name of registrant as specified in its charter)
_______ Delaware ______________ ___41-0991508___
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1001 Jefferson Street, Suite 400
Wilmington, DE ________19801______
(Address of principal executive offices) (Zip Code)
_____________________________(302)576-3400__________________________________
(Registrant's telephone number, including area code)
_____________________________Not applicable__________________________________
(Former name, former address and former fiscal year, if changed since
last report)
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 periods 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 ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $10 Par Value - 250,000 shares as of June 30, 1995.
NOTE: WHEREAS GOLDEN AMERICAN LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET
FORTH IN GENERAL INSTRUCTION H (I)(a) AND (b) OF FORM 10Q, THIS FORM IS
BEING FILED WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Index
Part I. Financial Information
<TABLE>
<CAPTION>
Page
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets - June 30, 1995 and December 31, 1994 3
Condensed consolidated statements of income - Quarter ended June 30, 1995 and
1994 4
Condensed consolidated statements of income - Six months ended June 30, 1995 and
1994 4
Condensed consolidated statements of cash flows - Six months ended June 30, 1995
and 1994 5
Notes to condensed consolidated financial statement - June 30, 1995 6
Item 2. Management's Narrative Analysis of the Results of Operations 6-7
Part II. Other Information 7
Item 1. Legal Proceedings 7
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 8
Exhibit 11 Earnings per Share 9
</TABLE>
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Golden American Life Insurance Company
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Condensed Balance Sheets (unaudited)
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
------------- -----------------
(in thousands)
<S> <C> <C>
Assets:
Fixed maturities available for sale, at market value $ 28,311 $ 2,749
Short-term investments 20,423 13,933
Equity securities, at market value 18 16
Policy loans 1,208 513
Cash 272 3,316
Accrued investment income 539 92
Deferred policy acquisition costs 64,015 60,662
Other assets 12,177 13,187
Separate Account Assets 978,356 950,292
----------- -----------
Total Assets $ 1,105,319 $ 1,044,760
=========== ===========
Liabilities and shareholder's equity:
Liabilities:
Insurance and annuity reserves $ 29,023 $ 1,051
Accrued expenses and other liabilities 7,387 3,911
Separate Account liabilities 978,356 950,292
----------- -----------
Total liabilities 1,014,766 955,254
----------- -----------
Shareholder's equity:
Common Stock 2,500 2,500
Preferred Stock 50,000 50,000
Additional paid-in capital 38,341 37,086
Unrealized appreciation (depreciation) of equity
securities 1 (1)
Unrealized appreciation (depreciation) on fixed
maturities available-for-sale 446 --
Retained earnings (735) (79)
----------- -----------
Total shareholder's equity 90,553 89,506
----------- -----------
Total liabilities and shareholder's equity $ 1,105,319 $ 1,044,760
=========== ===========
</TABLE>
See Notes to the Financial Statements
<PAGE>
Golden American Life Insurance Company
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Condensed Statements of Income (unaudited)
<TABLE>
<CAPTION>
Quarter Ended June 30
---------------------
1995 1994
---- ----
(in thousands)
<S> <C> <C>
Revenues:
Variable life and annuity product fees and policy
charges $4,441 $4,556
Net investment income 715 99
Realized gains/(losses) on investments 22 2
5,178 4,657
Expenses:
Operating and administrative 3,768 2,864
Amortization of deferred policy acquisition costs 142 1,512
------ ------
3,910 4,376
------ ------
Net Income $1,268 $ 281
====== ======
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30
------------------------
1995 1994
---- ----
(in thousands)
<S> <C> <C>
Revenues
Variable life and annuity product fees and policy
charges $ 9,084 $ 7,947
Net investment income 1,121 211
Realized gains / (losses) on investments (12) 2
-------- --------
10,193 8,160
Expenses:
Operating and administrative 7,724 4,790
Amortization of deferred policy acquisition costs 1,358 2,433
-------- --------
9,082 7,223
-------- --------
Net Income $ 1,111 $ 937
======== ========
</TABLE>
See Notes to the Financial Statements
<PAGE>
Golden American Life Insurance Company
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Condensed Statements of Cash Flows (unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30
------------------------
1995 1994
---- ----
(In thousands)
<S> <C> <C>
Net cash provided by operating activities $ 29,072 $(12,683)
Investing activities:
Purchases of fixed maturities (32,032) (823)
Sales and redemptions of fixed maturities 7,170 319
(Purchases) Sales of short-term investments, net (6,490) 10,673
-------- --------
Net cash used in investing activities (31,352) 10,169
Financing Activities:
Dividends paid on preferred stock (764) --
Net cash used in financing activities (764) --
Decrease in cash (3,044) (2,514)
Cash at beginning of period 3,316 4,076
-------- --------
Cash at end of period $ 272 $ 1,562
======== ========
</TABLE>
See Notes to the Financial Statements
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1995
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six month period ended June 30, 1995
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Golden American Life
Insurance Company annual report included in the Report of Additional
Information.
Item 2. Management's Narrative Analysis of the Results of Operations
Net income for the first six months of 1995 was $1.11 million, an increase of
$.17 million or 18% from the first six months of 1994. Net income for the second
quarter of 1995 was $1.26 million, an increase of $.98 million or 448% from the
second quarter of 1994. Premiums for the first six months of 1995 were $61
million, a decrease of $159 million or 72% from the comparative period in 1994.
Variable life and annuity product fees and policy charges increased from $7.9
million for the first six months of 1994 to $9.1 million for the first six
months of 1995, an increase of $1.2 million or 14%. The increase is primarily
due to fees earned from the increasing block of business under management in the
Separate Accounts and an increase in the collection of surrender charges,
primarily in the first quarter 1995. Product fees and policy charges were $4.4
million for second quarter 1995, a decrease of $.1 million or 3% from the
comparative 1994 period.
Net investment income was $1.12 million for the first six months of 1995, an
increase of $.91 million or 426% over the comparable 1994 period. Approximately
$445 thousand of the increase was due to the additional investment income earned
on invested assets held in the General Account to back the Fixed Rate Option
that was introduced in first quarter 1995. (The increase in investment income
attributable to the Fixed Rate Option was offset by an approximately $400
thousand increase in related interest credited to policyholders.) The balance of
the increase in investment income is attributable to an increase in the average
invested surplus asset base. Second quarter 1995 investment income was $715
thousand, an increase of $616 thousand or 622% from the comparative 1994 period.
The increase was attributable to $375 thousand of additional earnings on the
Fixed Rate Option assets and the balance due to the increase in the average
invested asset surplus base.
<PAGE>
Operating and administrative expenses were $7.7 million for the first six months
of 1995, an increase of $2.9 million or 61% from the comparable 1994 period. The
increased expenses were due in part to a decline in fund values in 1994. This
decline in fund values increased the Company's net amount at risk, which in turn
resulted in an increase in reinsurance fees of $754 thousand for the first six
months of 1995 as compared to the first six months of 1994. Net operating
expenses have also been adversely affected by the lower level of production
achieved in 1995, which has led to lower capitalization of the Company's
acquisition costs. And finally, as discussed above, interest credited to
policyholders related to the Fixed Rate Option introduced in 1995 increased
expenses by approximately $400 thousand for the six month period, $336 thousand
in the second quarter alone. Partially offsetting these increases was a decrease
in interest expense of $780 thousand for the first six months of 1995 compared
to the first six months of 1994. The elimination of interest expense in 1995
resulted from the retirement of the Company's debt in December 1994 with the
proceeds from the issuance of preferred stock. As of June 30, 1995, the Company
has declared dividends on preferred stock of $1.26 million.
There had been no preferred stock issued as of June 30, 1994.
Amortization of deferred policy acquisition costs (DPAC) was $1.36 million for
the first six months of 1995, a decrease of $1.08 million or 66% from the
comparative prior year period. DPAC is being amortized over the lives of the
policies in relation to the present value of estimated future gross profits. The
relatively strong performance of the funds and earnings in 1995 has slowed the
amortization of DPAC in 1995 as compared to 1994. Second quarter 1995 DPAC
amortization was $142 thousand, as compared to $1.5 million for the year earlier
period, a decrease of 91%. The strong second quarter performance of the stock
market and the subsequent material increases in fund values resulted in a
slowdown of the 1995 amortization.
Part II. Other Information
Item 1. Legal Proceedings
Golden American, as an insurance company, is ordinarily involved in
litigation. We do not believe that any current litigation is material and we do
not expect to incur significant losses from such actions.
Item 6. Exhibits and Reports on Form 8-k.
a) Exhibits:
11 Computation of earnings per share
27 Financial Data Schedule
b) Reports on Form 8-k: None
<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.
Golden American Life Insurance Company
Date August 11, 1995 By /s/
--------------- -----------------------------------
Stephen J. Preston
Senior Vice President, Controller
and Chief Actuary
Signing on behalf of the registrant and as chief
accounting officer.
<PAGE>
Exhibit 11
Golden American Life Insurance Company
Computation of Earnings Per Share (unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended June 30 Six Months Ended June 30
--------------------- ------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income $ 1,258 $ 281 $ 1,111 $ 938
Weighted average number of shares
outstanding during the period 250 250 250 250
------- ------- ------- -------
Earnings Per Share $ 5.03 $ 1.12 $ 4.44 $ 3.75
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
ARTICLE 7 OF REGULATION S-X
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<DEBT-HELD-FOR-SALE> 28,311
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 18
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 49,960
<CASH> 272
<RECOVER-REINSURE> 920
<DEFERRED-ACQUISITION> 64,015
<TOTAL-ASSETS> 1,105,319
<POLICY-LOSSES> 28,845
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 178
<NOTES-PAYABLE> 0
<COMMON> 2,500
0
50,000
<OTHER-SE> 38,789
<TOTAL-LIABILITY-AND-EQUITY> 1,105,319
0
<INVESTMENT-INCOME> 1,121
<INVESTMENT-GAINS> (12)
<OTHER-INCOME> 9,084
<BENEFITS> 1,589
<UNDERWRITING-AMORTIZATION> 1,358
<UNDERWRITING-OTHER> 6,135
<INCOME-PRETAX> 1,111
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,111
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,111
<EPS-PRIMARY> 4.44
<EPS-DILUTED> 4.44
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
