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 March 31, 1995.
Commission file number 33-87272
_________________GOLDEN AMERICAN LIFE INSURANCE COMPANY_______________
(Exact name of registrant as specified in its charter)
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_______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)
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_____________________________(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 ____ No _X___This is the first required
filing.
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 March 31, 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.
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GOLDEN AMERICAN LIFE INSURANCE COMPANY
Index
Part I. Financial Information
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Item 1. Financial Statements (Unaudited)
Page
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Condensed consolidated balance sheet - March 31, 1995 and December 31, 1994 3
Condensed consolidated statement of income - Three months ended March 31, 1995 and 1994 4
Condensed consolidated statement of cash flows - Three months ended March 31, 1995
and 1994 5
Notes to condensed consolidated financial statement - March 31, 1995 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 6-7
Part II. Other Information 8
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
Exhibit 11 Earnings per Share 10
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Part I. Financial Information
Item 1. Financial Statements
Golden American Life Insurance Company
- ---------------------------------------------------------------------
Condensed Balance Sheet (unaudited)
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March 31, 1995 December 31, 1994
(in thousands)
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Assets:
Fixed maturities available for sale ................ $ 17,428 $ --
Fixed maturities, held to maturity ................. $ -- $ 2,749
Short-term investments ............................. 15,340 13,933
Equity securities, at market value ................. 16 16
Policy loans ....................................... 911 513
Cash ............................................... 2,279 3,316
Accrued investment income .......................... 265 92
Deferred policy acquisition costs .................. 61,570 60,662
Other assets ....................................... 12,215 13,187
Separate Account Assets ............................ 942,028 950,292
----------- -----------
Total Assets ....................................... $ 1,052,052 $ 1,044,760
=========== ===========
Liabilities and shareholder's equity:
Liabilities:
Insurance and annuity reserves ..................... $ 17,025 $ 1,051
Accrued expenses and other liabilities ............. 4,495 3,911
Separate Account liabilities ....................... 942,028 950,292
----------- -----------
Total liabilities .................................. 963,548 955,254
----------- -----------
Shareholder's equity:
Common Stock ....................................... 2,500 2,500
Preferred Stock .................................... 50,000 50,000
Additional paid-in capital ......................... 37,086 37,086
Unrealized depreciation of equity securities ....... (1) (1)
Unrealized depreciation on fixed
maturities available-for-sale .................... (81) --
Retained earnings .................................. (1,000) (79)
----------- -----------
Total shareholder's equity ......................... 88,504 89,506
----------- -----------
Total liabilities and shareholder's equity ........... $ 1,052,052 $ 1,044,760
=========== ===========
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See Notes to the Financial Statements
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Golden American Life Insurance Company
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Condensed Statement of Income (unaudited)
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Quarter Ended March 31
----------------------
1995 1994
---- ----
Revenues: (in thousands)
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Variable Life and annuity product fees and policy
charges ....................................... $ 4,643 $3,391
Net investment income ........................... 406 112
Realized losses on investments .................. (34) --
------- ------
5,015 3,503
Expenses:
Operating and administrative .................... 3,956 1,925
Amortization of deferred policy acquisition costs 1,216 921
------- ------
5,172 2,846
------- ------
Net Income ........................................ $ (157) $ 657
======= ======
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See Notes to the Financial Statements
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Golden American Life Insurance Company
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Condensed Statement of Cash Flows (unaudited)
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Quarter Ended March 31
----------------------
1995 1994
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(In thousands)
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Net cash provided by operating activities $ 14,557 ($1,185)
Investing activities:
Purchases of investments .............. (19,216) (298)
Sales of investments .................. 4,371 --
Maturities of investments ............. 15 200
-------- ------
Net cash used in investing activities . (14,830) (98)
Financing Activities:
Dividends paid on preferred stock ..... (764) --
-------- ------
Net cash used in financing activities . (764) --
-------- ------
Decrease in cash ........................ (1,037) (1,283)
Cash at beginning of year ............... 3,316 4,076
-------- -------
Cash at end of year ..................... $ 2,279 $ 2,793
======== =======
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See Notes to the Financial Statements
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GOLDEN AMERICAN LIFE INSURANCE COMPANY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
March 31, 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 three month period ended March 31, 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
Golden American Life realized a net loss of ($157) thousand for the
first quarter of 1995 versus net income of $657 thousand for the first quarter
of 1994, a decrease between periods of $814 thousand or 124%.
The decrease in earnings was 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 $312 thousand for
first quarter 1995 as compared to first quarter 1994. The decline in fund values
also contributed to an acceleration in the amortization of deferred policy
acquisition costs with an increase in amortization expense of $295 thousand
between quarters.
Variable life and annuity product fees and policy charges increased
from $3.39 million for first quarter 1994 to $4.64 million for first quarter
1995, an increase of $1.25 million or 37%. The increase is primarily due to the
increasing fees earned from the increasing block of business under management in
the Separate Accounts and an increase in the collection of surrender charges.
Net investment income increased from $112 thousand for the first
quarter of 1994 to $406 thousand for the first quarter of 1995, an increase of
$294 thousand. This increase was due to the additional investment income earned
on the invested assets backing the Fixed Rate Option that was introduced in
first quarter 1995.
Operating and administrative expenses increased from $1.93 million for
first quarter 1994 to $3.96 million for first quarter 1995, an increase of $2.03
million or 105%. Net operating expenses have been adversely affected by the
lower level of production achieved in 1995, which has led to lower
capitalization of the Company's acquisition costs. Premium production was $27.0
million for the first quarter of 1995, a decrease of $99.5 million or 79% from
the $126.5 million for first quarter 1994.
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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:
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3(i) Articles of Incorporation of Golden American Life Insurance Company
(Incorporated herein by reference to the depositor's post-effective
amendment No. 17 to the registration statement on Form N-4 filed with
the Securities and Exchange Commission on May 2, 1994 (File No. 33-23351)).
3(ii) (i) By-laws of Golden Ammerican Life Insurance Company (Incorporated
herein by reference to the depositor's initial registration statement on
Form N-4 filed with the Securities and Exchange Commission on July 27,
1988 (File No. 33-23351)).
(ii) By-laws of Golden American Life Insurance Company, as amended
(Incorporated herein by reference to the depositor's post-effective
amendment No. 5 to the registration statement on Form N-4 filed with
the Securities and Exchange Commission on May 2, 1991
(File No. 33-23351)).
(iii) Certificate of Amendment of the By-laws of MB Variable Life
Insurance Company, as amended (Incorporated herein by reference to
the depositor's registration statement on Form N-3 filed with
the Securities and Exchange Commission on August 19, 1992
(File No. 33-51028)).
(iv) By-laws of Golden American, as amended (12/21/93) (Incorporated
herein to the depositor's post-effective amendment No. 17 to the
registration statement filed with the Securities and Exchange
Commission on May 2, 1994 (File No. 33-23351)).
11 Computation of earnings per share
24 Powers of Attorney. (Incorporated herein by reference to Pre-Effective
Amendment No. 1 of a registration statement filed with the Securities
and Exchange Commission on February 13, 1995 (File No. 33-87272)).
27 Financial Data Schedule
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b) Reports on Form 8-k: None
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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 by the
undersigned thereunto duly authorized.
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Golden American Life Insurance Company
Date May 12, 1995 By/s/ Stephen J. Preston
------------ --------------------------------------
Stephen J. Preston
Senior Vice President, Controller
and Chief Actuary
Signing on behalf of the registrant and as chief
accounting officer.
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Exhibit 11
Golden American Life Insurance Company
Computation of Earnings Per Share (Unaudited)
(In thousands, except per share data)
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Quarter Ended March 31
----------------------
1995 1994
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Net (Loss) $(157) $657
Weighted average number of shares
outstanding during the period 250 250
----- -----
Earnings Per Share $(0.63) $2.63
======= =====
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<ARTICLE> 7
<LEGEND>
Article 7 of Regulation S-X
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<DEBT-HELD-FOR-SALE> 17,428
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 16
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 33,695
<CASH> 2,279
<RECOVER-REINSURE> 372
<DEFERRED-ACQUISITION> 61,570
<TOTAL-ASSETS> 1,052,052
<POLICY-LOSSES> 16,972
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 53
<NOTES-PAYABLE> 0
<COMMON> 2,500
0
50,000
<OTHER-SE> 36,004
<TOTAL-LIABILITY-AND-EQUITY> 1,052,052
0
<INVESTMENT-INCOME> 406
<INVESTMENT-GAINS> (34)
<OTHER-INCOME> 4,643
<BENEFITS> 687
<UNDERWRITING-AMORTIZATION> 1,216
<UNDERWRITING-OTHER> 3,269
<INCOME-PRETAX> (157)
<INCOME-TAX> 0
<INCOME-CONTINUING> (157)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (157)
<EPS-PRIMARY> (.63)
<EPS-DILUTED> (.63)
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
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