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 quarterly period ended March 31, 2003
| ¨ | 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: 333-65423
MONY LIFE INSURANCE COMPANY OF AMERICA
(Exact name of Registrant as specified in its charter)
| Arizona |
86-0222062 | |
| (State or other jurisdiction of |
(I.R.S. Employer | |
| incorporation or organization) |
Identification No.) |
1740 Broadway New York,
New York 10019
(212) 708-2000
(Address, including zip code, and telephone number,
including area code, of Registrant’s principal executive offices)
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 ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of May 7, 2003, 2,500,000 shares of the Registrant’s Common Stock were outstanding.
REDUCED DISCLOSURE FORMAT
Registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the Reduced Disclosure Format.
MONY LIFE INSURANCE COMPANY OF AMERICA
FORM 10-Q
| Page | ||||
| PART I FINANCIAL INFORMATION |
||||
| Item 1: |
Financial Statements |
|||
| Unaudited interim condensed balance sheets as of March 31, 2003 and December 31, 2002 |
3 | |||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| Item 2: |
11 | |||
| Item 3: |
29 | |||
| Item 4: |
29 | |||
| PART II OTHER INFORMATION |
||||
| Item 1: |
30 | |||
| Item 6: |
30 | |||
| S-1 | ||||
| S-2 | ||||
| * | Omitted pursuant to General Instruction H(1)(a) and (b) of Form 10-Q. |
1
Forward-Looking Statements
The Company’s management has made in this report, and from time to time may make in its public filings and press releases as well as in oral presentations and discussions, forward-looking statements concerning the Company’s operations, economic performance, prospects and financial condition. Forward-looking statements include, among other things, discussions concerning the Company’s potential exposure to market risks, as well as statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. The Company claims the protection afforded by the safe harbor for forward-looking statements as set forth in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to many risks and uncertainties. Actual results could differ materially from those anticipated by forward-looking statements due to a number of important factors including the following: the Company could have further venture capital losses; the Company could be subjected to further downgrades by rating agencies and its claims-paying and financial-strength ratings; the Company could have to accelerate amortization of deferred policy acquisition costs if market conditions continue to deteriorate; the Company could have to write off investments in certain securities if the issuers’ financial condition deteriorates; actual death-claim experience could differ from the Company’s mortality assumptions; the Company could have liability from as-yet-unknown litigation and claims; larger settlements or judgments than the Company anticipate could result in pending cases due to unforeseen developments; and changes in laws, including tax laws, could affect the demand for the Company’s products. The Company does not undertake to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
2
PART I
FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
MONY LIFE INSURANCE COMPANY OF AMERICA
UNAUDITED INTERIM CONDENSED BALANCE SHEETS
As of March 31, 2003 and December 31, 2002
| March 31, 2003 |
December 31, 2002 | |||||
| ($ in millions) | ||||||
| ASSETS |
||||||
| Investments: |
||||||
| Fixed maturity securities available-for-sale, at fair value |
$ |
1,552.6 |
$ |
1,537.4 | ||
| Mortgage loans on real estate |
|
397.0 |
|
357.9 | ||
| Policy loans |
|
80.4 |
|
79.8 | ||
| Real estate to be disposed of |
|
0.1 |
|
0.1 | ||
| Real estate held for investment |
|
2.3 |
|
2.3 | ||
| Other invested assets |
|
15.3 |
|
11.4 | ||
|
|
2,047.7 |
|
1,988.9 | |||
| Cash and cash equivalents |
|
44.3 |
|
33.2 | ||
| Accrued investment income |
|
31.2 |
|
27.9 | ||
| Amounts due from reinsurers |
|
44.6 |
|
54.0 | ||
| Deferred policy acquisition costs |
|
644.8 |
|
617.4 | ||
| Current federal income taxes |
|
57.8 |
|
47.6 | ||
| Other assets |
|
4.3 |
|
4.3 | ||
| Separate account assets |
|
2,847.6 |
|
2,911.3 | ||
| Total assets |
$ |
5,722.3 |
$ |
5,684.6 | ||
| LIABILITIES AND SHAREHOLDER’S EQUITY |
||||||
| Future policy benefits |
$ |
183.7 |
$ |
179.6 | ||
| Policyholders’ account balances |
|
1,690.8 |
|
1,612.0 | ||
| Other policyholders’ liabilities |
|
75.3 |
|
89.2 | ||
| Accounts payable and other liabilities |
|
93.0 |
|
67.8 | ||
| Note payable to affiliate (Note 5) |
|
41.5 |
|
42.2 | ||
| Deferred federal income taxes |
|
152.2 |
|
142.6 | ||
| Separate account liabilities |
|
2,847.6 |
|
2,911.3 | ||
| Total liabilities |
|
5,084.1 |
|
5,044.7 | ||
| Commitments and contingencies (Note 4) |
||||||
| Common stock $1.00 par value; 5.0 million shares authorized, |
|
2.5 |
|
2.5 | ||
| Capital in excess of par |
|
499.7 |
|
499.7 | ||
| Retained earnings |
|
111.6 |
|
113.0 | ||
| Accumulated other comprehensive income |
|
24.4 |
|
24.7 | ||
| Total shareholder’s equity |
|
638.2 |
|
639.9 | ||
| Total liabilities and shareholder’s equity |
$ |
5,722.3 |
$ |
5,684.6 | ||
See accompanying notes to unaudited interim condensed financial statements.
3
MONY LIFE INSURANCE COMPANY OF AMERICA
UNAUDITED INTERIM CONDENSED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Three-month Periods Ended March 31, 2003 and 2002
| 2003 |
2002 |
|||||||
| ($ in millions) |
||||||||
| Revenues: |
||||||||
| Universal life and investment-type product policy fees |
$ |
40.5 |
|
$ |
36.3 |
| ||
| Premiums |
|
27.5 |
|
|
19.0 |
| ||
| Net investment income |
|
27.9 |
|
|
26.3 |
| ||
| Net realized (losses)/gains on investments |
|
(1.1 |
) |
|
0.2 |
| ||
| Other income |
|
6.0 |
|
|
4.1 |
| ||
|
|
100.8 |
|
|
85.9 |
| |||
| Benefits and Expenses: |
||||||||
| Benefits to policyholders |
|
35.3 |
|
|
25.8 |
| ||
| Interest credited to policyholders’ account balances |
|
21.8 |
|
|
17.5 |
| ||
| Amortization of deferred policy acquisition costs |
|
16.4 |
|
|
14.2 |
| ||
| Other operating costs and expenses |
|
29.0 |
|
|
16.3 |
| ||
|
|
102.5 |
|
|
73.8 |
| |||
| (Loss)/income from continuing operations before income taxes |
|
(1.7 |
) |
|
12.1 |
| ||
| Income tax (benefit)/expense |
|
(0.4 |
) |
|
3.9 |
| ||
| (Loss)/income from continuing operations |
|
(1.3 |
) |
|
8.2 |
| ||
| Discontinued operations: loss from real estate to be disposed of, net of income tax benefit |
|
(0.1 |
) |
|
— |
| ||
| Net (loss)/income |
|
(1.4 |
) |
|
8.2 |
| ||
| Other comprehensive loss, net |
|
(0.3 |
) |
|
(3.5 |
) | ||
| Comprehensive (loss)/income |
$ |
(1.7 |
) |
$ |
4.7 |
| ||
See accompanying notes to unaudited interim condensed financial statements.
4
MONY LIFE INSURANCE COMPANY OF AMERICA
UNAUDITED INTERIM CONDENSED STATEMENT
OF CHANGES IN SHAREHOLDER’S EQUITY
For the Three-month Period Ended March 31, 2003
| Common Stock |
Capital In Excess of Par |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total Shareholder’s Equity |
||||||||||||||
| ($ in millions) |
||||||||||||||||||
| Balance, December 31, 2002 |
$ |
2.5 |
$ |
499.7 |
$ |
113.0 |
|
$ |
24.7 |
|
$ |
639.9 |
| |||||
| Comprehensive income: |
||||||||||||||||||
| Net loss |
|
(1.4 |
) |
|
(1.4 |
) | ||||||||||||
| Other comprehensive loss |
|
(0.3 |
) |
|
(0.3 |
) | ||||||||||||
| Comprehensive loss |
|
(1.7 |
) | |||||||||||||||
| Balance, March 31, 2003 |
$ |
2.5 |
$ |
499.7 |
$ |
111.6 |
|
$ |
24.4 |
|
$ |
638.2 |
| |||||
See accompanying notes to unaudited interim condensed financial statements.
5
MONY LIFE INSURANCE COMPANY OF AMERICA
UNAUDITED INTERIM CONDENSED STATEMENTS OF CASH FLOWS
For the Three-month Periods Ended March 31, 2003 and 2002
| 2003 |
2002 |
|||||||
| ($ in millions) |
||||||||
| Net cash used in operating activities |
$ |
(3.7 |
) |
$ |
(16.1 |
) | ||
| Cash flows from investing activities: |
||||||||
| Sales, maturities or repayments of: |
||||||||
| Fixed maturity securities |
|
96.7 |
|
|
54.1 |
| ||
| Mortgage loans on real estate |
|
12.0 |
|
|
3.7 |
| ||
| Other invested assets |
|
— |
|
|
0.2 |
| ||
| Acquisitions of investments: |
||||||||
| Fixed maturity securities |
|
(115.7 |
) |
|
(56.5 |
) | ||
| Mortgage loans on real estate |
|
(51.5 |
) |
|
(5.7 |
) | ||
| Other invested assets |
|
— |
|
|
(0.1 |
) | ||
| Policy loans, net |
|
(0.6 |
) |
|
(3.8 |
) | ||