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 September 30, 1995
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file numbers 33-91916 and 33-92842
Glenbrook Life and Annuity Company
(Exact name of Registrant as specified in its charter)
__________Illinois__________ __________35-1113325__________
(State or Other Jurisdiction, (IRS Employer Identification No.)
Incorporation or Organization)
3100 Sanders Road
Northbrook, Illinois 60062
(Address of Principal Executive Offices) (Zip Code)
708.402.5000
(Registrant's Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act: NONE
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 __ NO _x_
State the aggregate market value of the voting stock held by
non-affiliates of the registrant: NONE
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of September 30, 1995: Common stock, par
value of $500 per share: 42,000 shares outstanding.<PAGE>
Glenbrook Life and Annuity Company
(Registrant)
INDEX Page
Cover Page
Index
PART I - Financial Information
Item 1. Financial Statements
Statements of Financial Position
Sept 30, 1995 (Unaudited) and Dec. 31, 1994 1
Statements of Income (Unaudited)
Periods Ended Sept. 30, 1995 and Sept. 30, 1994 2
Statements of Cash Flow (Unaudited)
Periods Ended Sept. 30, 1995 and Sept. 30, 1994 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 5
PART II - Other Information
Item 1. Legal Proceedings 7
Item 2. Change in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
Signature Page<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF FINANCIAL POSITION
Sept. 30, Dec. 31,
($ in thousands) 1995 1994
(Unaudited)
Assets
Investments
Fixed income securities:
Available for sale, at fair value
(amortized cost $51,991 and $51,527) $ 55,397 $ 49,807
Short-term 2,282 924
Total investments 57,679 50,731
Amounts recoverable from Allstate Life
Insurance Company under reinsurance
treaties 1,175,035 696,854
Net receivable from affiliates 250 88
Other assets 2,684
4,007
Total assets $1,235,648 $ 751,680
Liabilities
Contractholder funds $1,175,035 $ 696,854
Income taxes payable 2,198 63
Other liabilities and accrued expenses 458 2,105
Total liabilities 1,177,691 699,022
Shareholder's equity
Common stock, ($500 par, 42,000 shares
authorized, issued and outstanding) 2,100 2,100
Additional capital paid-in 49,641 49,641
Unrealized net capital gains (losses) 2,214 (1,118)
Retained income 4,002 2,035
Total shareholder equity 57,957 52,658
Total liabilities and shareholder equity $1,235,648 $ 751,680
See notes to financial statements.
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30 September 30
($ in thousands) 1995 1994 1995 1994
(Unaudited) (Unaudited)
Revenues
Investment income, less
investment expense $ 1,027 $ 581 $ 3,045 $ 1,036
Income before income taxes 1,027 581 3,045 1,036
Income tax expense 361 208 1,078 375
Net income $ 666 $ 373 $ 1,967 $ 661
See notes to financial statements.
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF CASH FLOW
Nine Months Ended
September 30,
($ in thousands) 1995 1994
(Unaudited)
Cash flows from operating activities:
Net income $ 1,967 $ 661
Adjustments to reconcile net income to net
cash from operating activities:
Amortization (30) 106
Change in deferred income taxes (632) 146
Changes in other operating assets and
liabilities 488 (1,244)
Net cash from operating activities 1,793 (331)
Cash flows from investing activities:
Fixed income securities
Investment collections 1,056 499
Investment purchases (1,491) (40,489)
Net change in short-term investments (1,358) 1,022
Net cash from investing activities (1,793) (38,968)
Cash flows from financing activities:
Capital contribution 0 39,000
Net cash from financing activities 0 39,000
Net (decrease) in cash 0 (299)
Cash at beginning of period 0 299
Cash at end of period$ 0 $ 0
See notes to financial statements.
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
1. Financial Statements
The Statement of Financial Position as of September 30, 1995,
the Statements of Income for the three-month and nine-month periods
ended September 30, 1995 and 1994, and the Statements of Cash Flow
for the nine-month periods then ended are unaudited. The interim
financial statements reflect all adjustments (consisting only of
normal recurring accruals) which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods
presented. The financial statements should be read in conjunction
with the financial statements and notes thereto included in the
Glenbrook Life and Annuity Company 1994 Financial Statements. The
results of operations for the interim periods should not be
considered indicative of results to be expected for the full year.
2. Transactions with Affiliates
Revenues ceded to Allstate Life Insurance Company consist of
contract charges of $1,121,942 and $266,256 for the nine-month
periods ended September 30, 1995 and 1994, respectively. Investment
income earned on the assets which support contractholder fund
liabilities was excluded from the Company's financial statements as
those assets were transferred to Allstate Life Insurance Company
under the terms of reinsurance treaties. Benefits and expenses ceded
to Allstate Life consist of paid benefits, credited interest on
reinsured contracts and operating expenses. These benefits and
expenses amounted to $48,200,122 and $16,037,252 for the nine-month
periods ended September 30, 1995 and 1994, respectively.
<PAGE>
Glenbrook Life and Annuity Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Three- and Nine-Month Periods Ended September 30, 1995
General
Glenbrook Life and Annuity Company ("the Company") is wholly
owned by Allstate Life Insurance Company ("Allstate Life"). Allstate
Life is wholly-owned by Allstate Insurance Company, a wholly-owned
subsidiary of The Allstate Corporation ("the Corporation"). Sears,
Roebuck and Co. distributed its 80.3% ownership in the Corporation on
June 30, 1995 to Sears common shareholders through a tax-free
dividend. As a result of the distribution, Sears no longer has an
ownership interest in the Corporation.
The Company issues single and flexible premium annuity contracts
and flexible premium deferred variable annuity contracts.
The Company reinsures all of its insurance in force with
Allstate Life. Accordingly, the results of operations with respect
to applications received and contracts issued by the Company are not
reflected in the Company's Statements of Income.
Results of Operations and Financial Condition
Pre-tax net investment income in the third quarter of 1995
increased 72.1% to $1.0 million compared to $581 thousand for the
same period in 1994. For the first nine months of 1995, pre-tax net
investment income increased to $3.0 million compared to $1.0 million
in the prior year. The increases were related to an increased level
of invested assets which resulted from a $39 million capital
contribution from Allstate Life during the third quarter of 1994.
Net income reflects the changes in pre-tax investment income.
The Statement of Financial Position at September 30, 1995
reflects an increase of 68.6% from December 31, 1994 in both
contractholder funds and amounts recoverable from Allstate Life
Insurance Company under reinsurance treaties. These increases are
due to sales of the Company's single and flexible premium annuity
contracts. Unrealized net capital gains (losses) increased $3.3
million to an unrealized net capital gain of $2.2 million, as
compared to an unrealized net capital loss of $1.1 million at
December 31, 1994. Fluctuations in unrealized gains (losses) are
largely a function of overall market conditions. Current year
increases are the result of an overall lower interest rate
environment as compared to December 31, 1994.
Liquidity and Capital Resources
Under the terms of the reinsurance agreements, assets of the
Company that relate to insurance inforce are transferred to Allstate
Life. Therefore, the funds necessary to support the operations of the
Company are provided by Allstate Life, and the Company is not
required to obtain additional capital to support inforce or future
business.
Pending Accounting Standards
In March 1995, the Financial Accounting Standards Board issued
SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of". The statement requires
that long-lived assets and certain identifiable intangibles to be
held and used by an entity be reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The statement requires that impairment
loss be measured for those assets as the amount by which the
carrying amount of the asset exceeds the asset's fair value. This
statement will be adopted in 1996 and is not expected to have a
material impact on the Company's results of operations or financial
position.
In October 1995, the FASB issued SFAS No. 123 "Accounting for
Stock-Based Compensation" which encourages entities to adopt a fair
value based method of accounting for compensation cost of employee
stock compensation plans. The statement allows an entity to continue
the application of accounting prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees", however pro forma
disclosures of net income and earnings per share, as if the fair
value based method of accounting defined by this statement had been
applied, are required. The disclosure requirements of this statement
will be adopted in 1996. Results of operations and financial
position will not be affected by the adoption of this statement.
<PAGE>
PART II
Item 1. Legal Proceedings
Glenbrook Life and Annuity Company is not involved in any litigation
that
is expected to have a material effect.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits, Financial Statements and Reports on Form 8-K
(a) (1) and (2) Financial Statements of registrant are listed on
pages
hereof and are filed as part of this Report.
(a) (3) Exhibits
Regulation S-K
2. Not applicable.
3. Registration No. 33-92842 and 33-91916, Previously filed by
Glenbrook Life and Annuity Company Variable Annuity Account with
Form N-4 Registration Statement No. 33-60882 dated April 9, 1993.
4. For Registration No. 33-92842, Glenbrook Life and Annuity Company
Flexible Payment Deferred Annuity Contract, incorporated by
reference to Registrant's Form S-1 Registration Statement,
Registration No. 33-92842, dated May 30, 1995. For Registration
No. 33-91916, Glenbrook Life and Annuity Flexible Premium Deferred
Variable Annuity Contract and Application, incorporated by reference
to Registrant's Form S-1 Registration Statement, Registration No. 33-
91916, dated May 4, 1995.
10. For Registration No. 33-92842 and 33-91916, incorporated by
reference to Registrant's Form N-4 Registration Statement No. 33-
60882, dated August 9, 1993.
11. Not applicable.
15. Not Applicable.
18. Not Applicable.
19. Not Applicable.
22. None.
23. For Registration No. 33-92842, incorporated by reference to
Registrant's Form S-1 Registration Statement, Registration
No.33-92842, filed August 24, 1995. For Registration No. 33-91916,
incorporated by reference to Registrant's Form S-1 Registration
Statement No.33-91916, filed May 4, 1995.
24. For Registration No. 33-91916, incorporated by reference to
Registrant's Form S-1 Registration Statement, Registration No.33-
91916, filed May 4, 1995. For Registration No. 33-92842,
incorporated by reference to Registrant's Form S-1 Registration
Statement No. 33-92842 filed August 24, 1995.
27. Filed herewith.
99. None.
(b) Reports on 8-K: No reports on Form 8-K were filed during the
third quarter of 1995.<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.
Glenbrook Life and Annuity Company
(Registrant)
Signature Title Date
_/s/LOUIS G. LOWER, II_ President and Chairman Nov. 10, 1995
LOUIS G. LOWER, II (Principal Executive Officer)
_/s/BARRY S. PAUL_____ Assistant Vice President Nov. 10, 1995
BARRY S. PAUL (Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHED. CONTAINS SUMMARY FIN'L INFO. EXTRACTED FROM THE GLENBROOK LIFE AN
ANNUITY COMPANY STMTS OF FIN'L POS., PERIODS ENDED 9/30/95 & 12/31/94; STMTS. OF
INCOME, PERIODS ENDED 9/30/95&94; STMTS OF CASH FLOWS, PERIODS ENDED 9/30/95&94;
NOTES THERETO; AND MGMT DISCUSS. & ANALYSIS OF FIN'L CONDIT. AND RESULTS OF OP'S
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FIN'L STMTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C> <C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-END> SEP-30-1995 DEC-31-1994
<EXCHANGE-RATE> 1 1
<DEBT-HELD-FOR-SALE> 55,397 49,807
<DEBT-CARRYING-VALUE> 0 0
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<EQUITIES> 0 0
<MORTGAGE> 0 0
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<TOTAL-INVEST> 57,679 50,731
<CASH> 0 0
<RECOVER-REINSURE> 1,175,035 696,854
<DEFERRED-ACQUISITION> 0 0
<TOTAL-ASSETS> 1,235,648 751,680
<POLICY-LOSSES> 0 0
<UNEARNED-PREMIUMS> 0 0
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<POLICY-HOLDER-FUNDS> 1,175,035 696,854
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<COMMON> 2,100 2,100
0 0
0 0
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<INCOME-PRETAX> 3,045 2,017
<INCOME-TAX> 1,078 723
<INCOME-CONTINUING> 1,967 1,294
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<EXTRAORDINARY> 0 0
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<NET-INCOME> 1,967 1,294
<EPS-PRIMARY> 46.83 30.81
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<RESERVE-OPEN> 0 0
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</TABLE>
