-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VUES6DZ79B0dKjG1XDnZdwO24T7iR/3rpB+cgIabDqmkoDyB3WIOP+qBFivommS4 W/XxnvHFdCuYGFtwAWz5EA== 0000949377-97-000134.txt : 19971117 0000949377-97-000134.hdr.sgml : 19971117 ACCESSION NUMBER: 0000949377-97-000134 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHL VARIABLE INSURANCE CO /CT/ CENTRAL INDEX KEY: 0001031223 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-20277 FILM NUMBER: 97720600 BUSINESS ADDRESS: STREET 1: C/O PHOENIX HOME LIFE MUTUAL INSURANCE C STREET 2: ONE AMERICAN ROW CITY: HARTFORD STATE: CT ZIP: 06116 BUSINESS PHONE: 8604035788 MAIL ADDRESS: STREET 1: ONE AMERICAN ROW STREET 2: C/O PHOENIX HOME LIFE MUTUAL INSURANCE C CITY: HARTFORD STATE: CT ZIP: 06116 FORMER COMPANY: FORMER CONFORMED NAME: PHL VARIABLE SEPARATE ACCOUNT MVA1 DATE OF NAME CHANGE: 19970123 10-Q 1 QUARTERLY REPORT FOR PHL VARIABLE INS. CO. FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (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, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 333-20277 PHL VARIABLE INSURANCE COMPANY Incorporated in the State of Connecticut 06-1045829 ------------------- (I.R.S. Employer Identification No.) One American Row, Hartford, Connecticut 06102-5056 (Address of principal executive offices) Telephone Number (800) 447-4312 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_____ As of October 31, 1997, there were outstanding 500 shares of common stock, $1.00 par value per share, of the registrant, all of which were directly owned by PM Holdings, Inc. PHL Variable Insurance Company
PART I. FINANCIAL INFORMATION Item 1. Financial Statements Page Balance Sheets at September 30, 1997 (unaudited) and December 31, 1996 2 Statements of Income for the Three Months and Nine Months Ended September 30, 1997 and 1996 (unaudited) 3 Statement of Cash Flows for the Nine Months Ended September 30, 1997 and 1996 (unaudited) 4 Notes to Condensed Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition 6 and Results of Operations PART II. OTHER INFORMATION Item 4. Action Taken by Shareholder 7 Item 6. Exhibits and Reports on Form 8-K 7 Signature 8 Exhibit Index 9
1 PART I. FINANCIAL INFORMATION Item 1. Financial Statements PHL Variable Insurance Company BALANCE SHEETS
(UNAUDITED) SEPTEMBER 30, DECEMBER 31, 1997 1996 (IN THOUSANDS) ASSETS Investments: Fixed maturities: Held-to-maturity, at amortized cost $ 3,128 $ 1,827 Available-for-sale, at fair value 17,206 15,279 Short-term investments 6,243 155 ------------------------ ------------------------ Total investments 26,577 17,261 Cash and cash equivalents 1,680 1,667 Accrued investment income 318 208 Deferred policy acquisition costs 17,197 9,557 Current income taxes 14 Deferred income taxes 929 363 Other assets 853 225 Goodwill 687 756 Separate account assets 324,708 159,418 ------------------------ ------------------------ Total assets $ 372,949 $ 189,469 ======================== ======================== LIABILITIES Contractholders' funds at interest $ 20,761 $ 11,569 Current income taxes 150 Other liabilities 6,087 1,678 Separate account liabilities 323,697 159,418 ------------------------ ------------------------ Total liabilities 350,695 172,665 ------------------------ ------------------------ EQUITY Common stock, $1 par value, 2,500,000 shares authorized, issued and outstanding 2,500 2,500 Additional paid-in-capital 18,864 13,864 Unrealized investment gains, net 70 44 Retained earnings 820 396 ------------------------ ------------------------ Total equity 22,254 16,804 ------------------------ ------------------------ Total liabilities and equity $ 372,949 $ 189,469 ======================== ========================
The accompanying notes are an integral part of these statements. 2 PHL Variable Insurance Company STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------- -------------------------------- 1997 1996 1997 1996 (IN THOUSANDS) REVENUES Investment product fees $ 1,162 $ 426 $ 3,331 $ 887 Net investment income 403 258 1,127 801 Net realized investment losses (18) -------------- -------------- --------------- -------------- Total revenues 1,670 1,565 684 4,458 -------------- -------------- --------------- -------------- BENEFITS, LOSSES AND EXPENSES Policy benefits and payments 320 121 634 231 Policy acquisition expenses 375 122 861 310 Other operating expenses 789 260 2,313 792 -------------- -------------- --------------- -------------- Total benefits, losses and expenses 1,333 1,484 503 3,808 -------------- -------------- --------------- -------------- INCOME BEFORE INCOME TAXES 337 81 181 650 Income tax expense 28 63 226 118 -------------- -------------- --------------- -------------- NET INCOME $ $ 219 53 $ 118 424 $ ============== ============== =============== ==============
The accompanying notes are an integral part of these statements. 3 PHL Variable Insurance Company STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, -------------------------------------------- 1997 1996 (IN THOUSANDS) CASH FLOW FROM OPERATING ACTIVITIES Net income $ 424 $ 219 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED FOR) OPERATIONS Amortization and depreciation 69 70 Deferred income taxes and other assets (1,193) (295) Increase in accrued investment income (110) (30) Increase in deferred policy acquisition costs (7,630) (5,714) Increase in contractholder funds 9,192 4,978 Increase (decrease) in other liabilities 1,022 (195) Increase (decrease) in payable to affiliates 3,387 730 -------------------- -------------------- Net cash provided by (used for) operating activities 5,161 (237) -------------------- -------------------- CASH FLOW FROM INVESTING ACTIVITIES Proceeds from disposals of fixed maturities: Available-for-sale 4,877 3,099 Purchase of fixed maturities: Available-for-sale (6,636) (5,171) Held-to-maturity (1,301) (1,810) Change in short-term investments, net (6,088) 4,425 Other investing activities (separate account seed money) (1,000) -------------------- -------------------- Net cash (used for) provided by investing activities (10,148) 543 -------------------- -------------------- CASH FLOW FROM FINANCING ACTIVITIES Capital contribution from parent 5,000 -------------------- -------------------- Net cash provided by financing activities 5,000 - -------------------- -------------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 13 306 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,667 1,117 -------------------- -------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,680 $ 1,423 -------------------- -------------------- SUPPLEMENTAL CASH FLOW INFORMATION Income taxes paid $ 654 $ 987 ==================== ====================
The accompanying notes are an integral part of these statements. 4 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The condensed unaudited financial statements include the accounts of PHL Variable Insurance Company (PHLV or the Company). These condensed financial statements have been prepared in accordance with generally accepted accounting principles (GAAP). The information furnished includes all adjustments and accruals consisting only of normal, recurring accrual adjustments which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Certain reclassifications have been made to prior year amounts to conform with current year presentations. The September 30, 1997 Condensed Financial Statements should be read in conjunction with the December 31, 1996 Financial Statements contained in the Form S-1 registration statement dated July 15, 1997. 2. ORGANIZATION As described more fully in Note 1 of the December 31, 1996 Financial Statements, PM Holdings, Inc. (PM Holdings) acquired Dreyfus Consumer Life Insurance Company from The Dreyfus Corporation on May 31, 1994 and renamed the company PHL Variable Insurance Company. PM Holdings accounted for the acquisition of the Company under the purchase method of accounting. The assets and liabilities of the Company were recorded at their fair value as of the date of acquisition and goodwill was pushed-down to the Company from PM Holdings. PM Holdings is a wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company (Phoenix). 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION As of September 30, 1997, assets increased 97% from December 31, 1996. Contributing to this change was the $165 million increase in separate account assets. On June 23, 1997, PM Holdings made a capital contribution of $5 million in cash to the Company. This contribution, held in short-term investments, increased PHLV's equity as additional paid-in capital. Deposits from the sale of variable annuity products increased separate account assets by $69.7 million during the third quarter of 1997, and by $165.3 million for nine months, bringing separate account assets to $324.7 million as of September 30, 1997. Separate account assets also include a $1.0 million investment made by the Company on July 15, 1997 to provide seed money for the new Market Value Adjustment (MVA) option. RESULTS OF OPERATIONS Investment product fees for the nine months ended September 30, 1997, were $3.3 million, a $2.4 million (276%) increase from $0.9 million for the corresponding period in 1996. This increase reflected the higher fees earned on a $223.2 million increase in assets under management from September 30, 1996 to September 30, 1997, reaching $344.4 million. For the three months ended September 30, 1997, fees increased to $1.2 million compared to $0.4 million during the same period last year. Investment income rose to $0.4 million during the third quarter of 1997, a $0.1 million (56%) improvement over the third quarter of 1996. Operating expenses of $2.3 million for the nine months ended September 30, 1997, increased by $1.5 million from the $0.8 million incurred for nine months in 1996. Expenses increased to $0.8 million during the three months ended September 30, 1997, up $0.5 million over the $0.3 million amount in the comparable 1996 period. Policy acquisition expenses of $0.9 million for the nine months ended September 30, 1997, increased by $0.6 million from the $0.3 million incurred during the same period in 1996 with quarterly acquisition expenses showing similar results. Operating expenses included costs for facilities and services, under an expense allocation agreement with its ultimate parent Phoenix. The increases in this year's operating expenses and acquisition expenses were primarily attributable to the acquisition and administration of a larger block of business, described previously. Higher policy benefits and payments also related directly to higher funds being managed, experiencing $0.6 million and $0.2 million in benefits for the nine months ended September 30, 1997 and 1996, respectively. Benefits of $0.3 million and $0.1 million were recorded for the three months ended during the respective year-to-year quarters. Net income of $53 thousand in the third quarter of 1997 is below the $118 thousand of net income reported during the same period in 1996 due to somewhat higher operating costs. Net income of $424 thousand for the nine months ended September 30 1997, showed a $205 thousand improvement over the $219 thousand reported in 1996 due to a larger increase in revenues that offset the increase in benefits, losses and expenses. 6 PART II. OTHER INFORMATION Item 4. Action Taken by Shareholder By written consent of the sole shareholder, P.M. Holdings, Inc., dated September 2, 1997, the election of directors was voted upon. All votes were cast in favor of the nominees; no votes were cast against or withheld, and there were no abstentions or broker nonvotes. The following individuals were so elected as directors: Richard H. Booth, Robert G. Chipkin, Robert W. Fiondella, Joseph E. Kelleher, Philip R. McLoughlin, Charles J. Paydos, David W. Searfoss, Simon Y. Tan and Dona D. Young. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits -- see Exhibit Index (b) PHL Variable Insurance Company did not file any report on Form 8-K during the quarter covered by this report. 7 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. PHL VARIABLE INSURANCE COMPANY By /s/David W. Searfoss -------------------------------------------- David W. Searfoss Executive Vice President and Treasurer November 13, 1997 8 EXHIBIT INDEX Exhibit Number Description (27) Financial Data Schedule is filed herewith. 9 EX-27 2 FDS-
7 1031223 PHL Variable Insurance Company 1 U.S. Dollars 9-MOS dec-31-1997 jan-01-1997 sep-30-1997 1 17,206,000 3,128,000 0 0 0 0 26,577,000 1,680,000 0 17,197,000 372,949,000 0 0 0 20,761,000 0 0 0 2,500,000 19,754,000 372,949,000 0 1,127,000 0 3,331,000 634,000 861,000 2,313,000 650,000 226,000 424,000 0 0 0 424,000 0 0 0 0 0 0 0 0 0
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