Form: 10-Q/A

Quarterly report [Sections 13 or 15(d)]

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10-Q/A: Quarterly report [Sections 13 or 15(d)]

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q/A
(AMENDMENT NO. 1)
(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission file number 33-37587

PRUCO LIFE INSURANCE COMPANY

(Exact name of Registrant as specified in its charter)

ARIZONA 22-1944557
------------------------------ ---------------------------------
(State or other jurisdiction, (IRS Employer Identification No.)
incorporation or organization)

213 WASHINGTON STREET, NEWARK, NEW JERSEY 07102
----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

(973) 802-6000
----------------------------------------------------
(Registrant's Telephone Number, including area code)

Securities registered pursuant to Section 12 (b) of the Act: NONE
Securities registered pursuant to Section 12 (g) 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 [X] NO [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). YES [X] NO [ ]

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 August 13, 2004. Common stock, par value of
$10 per share: 250,000 shares outstanding

PRUCO LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTION (H) (1) (A) AND (B) ON FORM 10-Q AND IS THEREFORE FILING THIS
FORM WITH THE REDUCED DISCLOSURE FORMAT.

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PRUCO LIFE INSURANCE COMPANY

TABLE OF CONTENTS

Page No.
--------

Explanatory Note 3

PART I - FINANCIAL INFORMATION

Item 1. (Unaudited) Financial Statements

Consolidated Statements of Financial Position
As of June 30, 2004 and December 31, 2003 4

Consolidated Statements of Operations and Comprehensive
Income Three and six months ended June 30, 2004 and 2003 5

Consolidated Statements of Stockholder's Equity Periods
ended June 30, 2004 and December 31, 2003 and 2002 6

Consolidated Statements of Cash Flows Six months ended
June 30, 2004 and 2003 7

Notes to Consolidated Financial Statements 8

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11

Item 4. Controls and Procedures 14

PART II - OTHER INFORMATION
Item 6. Exhibits 16

Signatures 17

FORWARD-LOOKING STATEMENT DISCLOSURE
Certain of the statements included in this Quarterly Report on Form 10-Q/A,
including but not limited to those in the Management's Discussion and Analysis
of Financial Condition and Results of Operations, constitute forward-looking
statements within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Words such as "expects," "believes," "anticipates," "includes,"
"plans," "assumes," "estimates," "projects," "intends", or variations of such
words are generally part of forward-looking statements. Forward-looking
statements are made based on management's current expectations and beliefs
concerning future developments and their potential effects upon Pruco Life
Insurance Company ("the Company"). There can be no assurance that future
developments affecting the Company will be those anticipated by management.
These forward-looking statements are not a guarantee of future performance and
involve risks and uncertainties, and there are certain important factors that
could cause actual results to differ, possibly materially, from expectations or
estimates reflected in such forward-looking statements, including without
limitation: general economic, market and political conditions, including the
performance of financial markets and interest rate fluctuations; various
domestic or international military or terrorist activities or conflicts;
volatility in the securities markets; re-estimates of our reserves for future
policy benefits and claims; changes in our assumptions related to deferred
policy acquisition costs; our exposure to contingent liabilities; catastrophe
losses; investment losses and defaults; changes in our claims-paying or credit
ratings; competition in our product lines and for personnel; fluctuations in
foreign currency exchange rates and foreign securities markets; risks to our
international operations; the impact of changing regulation or accounting
practices; adverse litigation results; and changes in tax law. The Company is
under no obligation to update any particular forward-looking statement included
in this document.

2

EXPLANATORY NOTE

During a review and inventory in the fourth quarter of 2004 of the deferred tax
balances of Pruco Life Insurance Company (the "Company"), the Company identified
an error in the determination of state tax expense for the three months ended
June 30, 2004. This error resulted in an understatement of income tax expense,
and overstatement of net income, in the amount of $7.4 million for the three and
six months ended June 30, 2004. Accordingly, the Company is filing this
Amendment No. 1 to its Quarterly Report on Form 10-Q for the quarter ended June
30, 2004 to (1) restate the unaudited interim financial statements of the
Company for the three and six months ended June 30, 2004 contained in Part I,
Item 1, (2) amend Management's Discussion and Analysis of Financial Condition
and Results of Operations contained in Part I, Item 2, to reflect such
restatement, and (3) amend the disclosures under Controls and Procedures in Part
I, Item 4, to provide additional information with respect to the error and the
status of the Company's disclosure controls and procedures and internal control
over financial reporting. This Amendment No. 1 also includes as Exhibits
certificates of the Company's Chief Executive Officer and Chief Financial
Officer required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002
(Items 601(b)(31) and 601(b)(32) of Regulation S-K).

The Company's original Quarterly Report on Form 10-Q for the quarter ended June
30, 2004 has not been updated except as required to reflect the effects of the
restatement. Except as identified above, no other items included in the original
Form 10-Q have been amended, and such items remain in effect as of the filing
date of the original Form 10-Q. This Amendment No. 1 does not purport to provide
an update or a discussion of any other developments at the Company subsequent to
the filing date of the original Form 10-Q.

See Note 2 to the unaudited interim financial statements included in this
Amendment No. 1 for additional information.

3

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
AS OF JUNE 30, 2004 AND DECEMBER 31, 2003 (IN THOUSANDS)



JUNE 30,
2004 DECEMBER 31,
(RESTATED) 2003
------------ ------------

ASSETS
Fixed maturities available for sale,
at fair value (amortized cost, 2004: $5,827,156; 2003: $5,682,043) $ 6,392,828 $ 5,953,815
Policy loans 851,534 848,593
Short-term investments 86,948 160,635
Other long-term investments 66,513 89,478
------------ ------------
Total investments 7,397,823 7,052,521
Cash and cash equivalents 249,518 253,564
Deferred policy acquisition costs 1,498,727 1,380,710
Accrued investment income 104,926 96,790
Reinsurance recoverable 594,013 517,410
Receivables from Parent and affiliates 49,024 53,138
Deferred sales inducements and other assets 131,364 88,736
Separate account assets 16,113,428 15,772,262
------------ ------------
TOTAL ASSETS $ 26,138,823 $ 25,215,131
============ ============

LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Policyholders' account balances $ 6,046,572 $ 5,582,633
Future policy benefits and other policyholder liabilities 1,219,665 1,068,977
Cash collateral for loaned securities 357,831 431,571
Securities sold under agreement to repurchase 105,787 97,102
Income taxes payable 388,746 335,665
Other liabilities 111,634 111,865
Separate account liabilities 16,113,428 15,772,262
------------ ------------
TOTAL LIABILITIES 24,343,663 23,400,075
------------ ------------

CONTINGENCIES (SEE FOOTNOTE 3)

STOCKHOLDER'S EQUITY
Common stock, $10 par value;
1,000,000 shares, authorized;
250,000 shares, issued and outstanding 2,500 2,500
Paid-in-capital 454,209 459,654
Deferred compensation (1,686) (850)
Retained earnings 1,287,126 1,246,065
Accumulated other comprehensive income 53,011 107,687
------------ ------------
TOTAL STOCKHOLDER'S EQUITY 1,795,160 1,815,056
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 26,138,823 $ 25,215,131
============ ============


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (IN THOUSANDS)



THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
(RESTATED) (RESTATED)

REVENUES

Premiums $ 28,789 $ 41,449 $ 56,614 $ 82,698
Policy charges and fee income 158,208 139,768 314,043 276,012
Net investment income 92,896 84,195 185,380 168,748
Realized investment gains (losses), net (5,583) 5,407 386 (4,252)
Asset management fees 3,788 3,348 7,615 6,252
Other income 8,595 1,683 16,967 3,892
---------- ---------- ---------- ----------
TOTAL REVENUES 286,693 275,850 581,005 533,350
---------- ---------- ---------- ----------

BENEFITS AND EXPENSES

Policyholders' benefits 73,518 84,463 141,563 170,924
Interest credited to policyholders'
account balances 63,773 56,587 124,934 108,089
General, administrative and other
expenses 128,468 106,522 253,658 202,903
---------- ---------- ---------- ----------
TOTAL BENEFITS AND EXPENSES 265,759 247,572 520,155 481,916
---------- ---------- ---------- ----------

Income from operations before income
taxes and cumulative effect of change in
accounting principle 20,934 28,278 60,850 51,434

Income tax expense 2,262 6,473 10,639 10,917
---------- ---------- ---------- ----------

NET INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 18,672 21,805 50,211 40,517

Cumulative effect of change in
accounting principle, net of tax - - (9,150) -
---------- ---------- ---------- ----------
NET INCOME 18,672 21,805 41,061 40,517
---------- ---------- ---------- ----------

Change in net unrealized investment
gains, net of taxes (79,140) 28,549 (64,450) 39,631
Cumulative effect of accounting change,
net of taxes - - 4,030 -
---------- ---------- ---------- ----------
Other comprehensive income (loss), net
of tax (79,140) 28,549 (60,420) 39,631
---------- ---------- ---------- ----------

TOTAL COMPREHENSIVE INCOME (LOSS) $ (60,468) $ 50,354 (19,359) 80,148
========== ========== ========== ==========


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED)
PERIODS ENDED JUNE 30, 2004 AND DECEMBER 31, 2003 AND 2002 (IN THOUSANDS)



ACCUMULATED
OTHER TOTAL
COMMON PAID-IN- RETAINED DEFERRED COMPREHENSIVE STOCKHOLDER'S
STOCK CAPITAL EARNINGS COMPENSATION INCOME (LOSS) EQUITY
------------- ------------- ------------- ------------- ------------- -------------

BALANCE, JANUARY 1, 2002 $ 2,500 $ 466,748 $ 1,147,665 $ - $ 34,566 $ 1,651,479

Net income - - 13,498 - - 13,498

Adjustments to policy credits
issued to eligible policyholders - - (27) - - (27)

Change in foreign currency
translation adjustments, net of
taxes - - - - 149 149

Change in net unrealized investment
gains, net of taxes - - - - 57,036 57,036
------------- ------------- ------------- ------------- ------------- -------------
BALANCE, DECEMBER 31, 2002 2,500 466,748 1,161,136 - 91,571 1,722,135

Net income - - 84,933 - - 84,933

Adjustments to policy credits
issued to eligible policyholders - - (4) - - (4)

Purchase of fixed maturities from
an affiliate, net of taxes - (7,557) - - 7,557 -

Stock-based compensation programs - 463 - (850) - (387)

Change in net unrealized investment
gains, net of taxes - - - - 8,379 8,379
------------- ------------- ------------- ------------- ------------- -------------
BALANCE, DECEMBER 31, 2003 2,500 459,654 1,246,065 (850) 107,687 1,815,056

Net income (restated) - - 41,061 - - 41,061

Purchase of Fixed Maturities from
an affiliate, net of taxes (5,744) 5,744 -

Stock-based compensation programs - 299 - (836) - (537)

Cumulative effect of change in
accounting principle, net of taxes - - - - 4,030 4,030

Change in net unrealized investment
gains, net of taxes - - - - (64,450) (64,450)
------------- ------------- ------------- ------------- ------------- -------------
BALANCE, JUNE 30, 2004 $ 2,500 $ 454,209 $ 1,287,126 $ (1,686) $ 53,011 $ 1,795,160
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (IN THOUSANDS)



2004 2003
----------- -----------
(RESTATED)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 41,061 $ 40,517
Adjustments to reconcile net income to net cash from
(used in) operating activities:
Policy charges and fee income (52,787) (50,549)
Interest credited to policyholders' account balances 112,007 108,089
Realized investment (gains) losses, net (386) 4,252
Amortization and other non-cash items 88,583 (37,573)
Cumulative effect of accounting change 9,150 -
Change in:
Future policy benefits and other policyholders'
liabilities 105,950 50,544
Reinsurance recoverable (76,603) (17,154)
Accrued investment income (1,856) (4,323)
Receivables from Parent and affiliates 4,114 27,006
Policy loans (2,941) 14,343
Deferred policy acquisition costs (94,913) (57,529)
Income taxes payable/receivable 64,535 94,306
Deferred sales inducements and other assets (48,940) (14,855)
Other, net (2,846) 13,434
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES 144,128 170,508
----------- -----------

CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity of:
Fixed maturities available for sale 608,761 1,311,519
Payments for the purchase of:
Fixed maturities available for sale (771,469) (1,759,650)
Cash collateral for loaned securities, net (73,740) 69,675
Securities sold under agreement to repurchase, net 8,685 (191,834)
Other long-term investments, net 2,000 (12,900)
Short-term investments, net 81,959 43,919
----------- -----------
CASH FLOWS USED IN INVESTING ACTIVITIES (143,804) (539,271)
----------- -----------

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits 1,145,868 986,172
Withdrawals (1,140,864) (563,319)
Deferred Compensation (836) (1,179)
Stock- based compensation 299 324
Cash payments to eligible policyholders - (3)
Paid in capital transaction associated with the purchase
of fixed maturities from an affiliate (8,837) -
----------- -----------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES (4,370) 421,995
----------- -----------

Net increase in Cash and cash equivalents (4,046) 53,232
Cash and cash equivalents, beginning of year 253,564 436,182
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 249,518 $ 489,414
=========== ===========


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION

The unaudited interim consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
("GAAP") on a basis consistent with reporting interim financial information in
accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of
the Securities and Exchange Commission. These interim financial statements are
unaudited but reflect all adjustments which, in the opinion of management, are
necessary to provide a fair presentation of the consolidated results of
operations and financial condition of the Pruco Life Insurance Company ("the
Company") for the interim periods presented. The Company is a wholly owned
subsidiary of The Prudential Insurance Company of America ("Prudential
Insurance"), which in turn is a wholly owned subsidiary of Prudential Financial,
Inc. ("Prudential Financial"). All such adjustments are of a normal recurring
nature. The results of operations for any interim period are not necessarily
indicative of results for a full year. Certain amounts in the Company's prior
year consolidated financial statements have been reclassified to conform with
the current year presentation.

The Company has extensive transactions and relationships with Prudential
Insurance and other affiliates. It is possible that the terms of these
transactions are not the same as those that would result from transactions among
wholly unrelated parties. These financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2003.

2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company has restated its previously issued unaudited interim financial
statements for the three and six months ended June 30, 2004. During a review and
inventory of its deferred tax balances in the fourth quarter of 2004, the
Company identified an error in the determination of its state income tax expense
for the three months ended June 30, 2004. The error related to the treatment of
net operating loss carryforwards for state income tax purposes.

The impact of the restatement on the financial statements for the three and six
months ended June 30, 2004 is shown below:

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME



THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2004 JUNE 30, 2004
----------------------- -----------------------
PREVIOUSLY PREVIOUSLY
REPORTED RESTATED REPORTED RESTATED
---------- ---------- ---------- ----------

Income from operations before
income taxes and cumulative effect
of change in accounting principle $ 20,934 $ 20,934 $ 60,850 $ 60,850
Income tax expense (benefit) (5,138) 2,262 3,239 10,639
---------- ---------- ---------- ----------

Net income before cumulative effect of
change in accounting principle 26,072 18,672 57,611 50,211
---------- ---------- ---------- ----------
Net Income $ 26,072 $ 18,672 $ 48,461 $ 41,061
---------- ---------- ---------- ----------


8

CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
JUNE 30, 2004
---------------------------
PREVIOUSLY
REPORTED RESTATED
------------ ------------
Net Income $ 48,461 $ 41,061
Income taxes payable / receivable 57,135 64,535
------------ ------------
Cash flows from operating activities 144,128 144,128
------------ ------------

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
JUNE 30, 2004
---------------------------
PREVIOUSLY
REPORTED RESTATED
------------ ------------
Income taxes payable $ 381,346 $ 388,746
Retained earnings 1,294,526 1,287,126
Total liabilities and stockholder's equity 26,138,823 26,138,823

3. CONTINGENCIES AND LITIGATION

CONTINGENCIES
On an ongoing basis, our internal supervisory and control functions review the
quality of our sales, marketing and other customer interface procedures and
practices and may recommend modifications or enhancements. In certain cases, if
appropriate, we may offer customers remediation and may incur charges, including
the cost of such remediation, administrative costs and regulatory fines.

Prudential Insurance and its affiliates have received formal requests for
information relating to their variable annuity business from regulators and
governmental authorities. The regulators and authorities include, among others,
the Securities and Exchange Commission, the NASD and the State of New York
Attorney General's Office. Prudential Insurance and its affiliates are
cooperating with all such inquiries and are conducting their own internal
review.

It is possible that the results of operations or the cash flow of the Company in
a particular quarterly or annual period could be materially affected as a result
of payments in connection with the matters discussed above depending, in part,
upon the results of operations or cash flow for such period. Management
believes, however, that the ultimate payments in connection with these matters
should not have a material adverse effect on the Company's financial position.

LITIGATION
The Company is subject to legal and regulatory actions in the ordinary course of
its businesses, including class actions. Pending legal and regulatory actions
include proceedings relating to aspects of the businesses and operations that
are specific to the Company and that are typical of the businesses in which the
Company operates. Class action and individual lawsuits involve a variety of
issues and/or allegations, which include sales practices, underwriting
practices, claims payment and procedures, premium charges, policy servicing and
breach of fiduciary duties to customers. We are also subject to litigation
arising out of our general business activities, such as our investments and
third party contracts. In certain of these matters, the plaintiffs are seeking
large and/or indeterminate amounts, including punitive or exemplary damages.

The Company's litigation is subject to many uncertainties, and given the
complexity and scope, the outcomes cannot be predicted. It is possible that the
results of operations or the cash flow of the Company in a particular quarterly
or annual period could be materially affected by an ultimate unfavorable
resolution of pending litigation and regulatory matters. Management believes,
however, that the ultimate outcome of all pending litigation and regulatory
matters should not have a material adverse effect on the Company's financial
position.

9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. ADOPTION OF STATEMENT OF POSITION 03-1

In July 2003, the Accounting Standards Executive Committee ("AcSEC") of the
American Institute of Certified Public Accountants ("AICPA") issued Statement of
Position ("SOP") 03-1, "Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts". AcSEC
issued the SOP to address the need for interpretive guidance to be developed in
three areas: separate account presentation and valuation; the accounting
recognition given sales inducements (bonus interest, bonus credits, persistency
bonuses); and the classification and valuation of certain long-duration contract
liabilities.

The Company adopted the SOP effective January 1, 2004. The effect of initially
adopting SOP 03-1 was a net of tax charge of $9.1 million, reported as a
cumulative effect of accounting change in the results of operations for six
months ended June 30, 2004. This charge reflects primarily the net impact of
converting certain individual market value adjusted annuity contracts from
separate account accounting treatment to general account accounting treatment
and the effect of establishing reserves for guaranteed minimum death benefit
("GMDB") provisions of the Company's variable annuity contracts. In addition,
the Company recorded an increase in other comprehensive income of $4.0 million
after tax related to recording the cumulative unrealized investment gains, net
of shadow deferred acquisition costs ("DAC"), on fixed maturities reclassified
from the separate account to the general account as of January 1, 2004.

In June 2004, the FASB issued FASB Staff Position ("FSP") 97-1, "Situations in
Which Paragraphs 17(b) and 20 of FASB Statement No. 97, Accounting and Reporting
by Insurance Enterprises for Certain Long-Duration Contracts and for Realized
Gains and Losses from the Sale of Investments, Permit or Require an Accrual of
an Unearned Revenue Liability." FSP 97-1 clarifies the accounting for unearned
revenue liabilities of certain universal-life contracts under SOP 03-1. The
Company's adoption of FSP 97-1 on July 1, 2004 did not change the accounting for
unearned revenue liabilities and, therefore, had no impact on the Company's
results of operations.

On the Statement of Cash Flows, the cumulative effect of the SOP is shown on one
line rather than on the individual asset and liability lines that were affected.
The major components of this line are increases in fixed maturities of $403
million and policyholder account balances of $387 million related to the
reclassifications of annuity contracts from the separate account to the general
account. In addition, the establishment of the GMDB reserves of approximately
$45 million and the increase in DAC of $23 million are also shown on this line.
Other balance sheet accounts that were affected include other long-term
investments and deferred taxes payable.

5. RELATED PARTY TRANSACTIONS

PURCHASE OF FIXED MATURITIES FROM AN AFFILIATE
In May of 2004, the Company invested $110 million in certain fixed maturities
owned by Prudential Insurance.

The Company purchased fixed maturity investments for $110 million, the fair
market value plus accrued interest at the acquisition date, but reflected the
investments at historical amortized cost of $99 million. The difference between
the historical amortized cost and the fair value, net of taxes, was reflected as
a reduction to paid in capital. The fixed maturity investments are categorized
in the Company's consolidated balance sheet as available for sale debt
securities, and are therefore carried at fair value, with the difference between
amortized cost and fair value reflected in accumulated other comprehensive
income. Gains and losses will be realized upon disposition of the investment to
an entity not under common control.

10

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

PRUCO LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTION H(1)(A) AND (B) ON FORM 10-Q AND IS FILING THIS FORM WITH REDUCED
DISCLOSURE.

Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") addresses the consolidated financial condition of Pruco Life
Insurance Company as of June 30, 2004, compared with December 31, 2003, and its
consolidated results of operations for the three and six month periods ended
June 30, 2004 and June 30, 2003. Comparisons discussed in this MD&A reflect the
effects of the restatements described in footnote 2 of the unaudited financial
statements above. You should read the following analysis of our consolidated
financial condition and results of operations in conjunction with the Company's
MD&A and audited Consolidated Financial statements included in the Company's
Report on Form 10-K for the year ended December 31, 2003.

The Company sells interest-sensitive individual life insurance, variable life
insurance, term life insurance, individual variable annuities, and a
non-participating guaranteed interest contract ("GIC") called Prudential Credit
Enhanced GIC ("PACE") primarily through Prudential Insurance's sales force in
the United States. These markets are subject to regulatory oversight with
particular emphasis placed on company solvency and sales practices. These
markets are also subject to increasing competitive pressure as the legal
barriers, which have historically segregated the markets of the financial
services industry, have been changed through both legislative and judicial
processes. Regulatory changes have opened the insurance industry to competition
from other financial institutions, particularly banks and mutual funds that are
positioned to deliver competing investment products through large, stable
distribution channels. The Company also had marketed individual life insurance
through its branch office in Taiwan. The Taiwan branch was transferred to an
affiliated Company on January 31, 2001. Beginning February 1, 2001, all
insurance activity of the Taiwan branch has been ceded to the affiliated
Company.

Generally, policyholders who purchase the Company's products have the option of
investing in the separate accounts, segregated funds for which investment risks
are borne by the customer, or the Company's portfolio, referred to as the
general account. The Company earns its profits through policy fees charged to
separate account annuity and life policyholders and through the interest spread
for the GIC and general account annuity and life products. Policy charges and
fee income consist mainly of three types, sales charges or loading fees on new
sales, mortality and expense charges ("M&E") assessed on fund balances, and
mortality and related charges based on total life insurance in-force business.
Policyholder fund values are affected by net sales (sales less withdrawals),
changes in interest rates and investment returns. The interest spread represents
the difference between the investment income earned by the Company on its
investment portfolio and the amount of interest credited to the policyholders'
accounts. Products that generate interest spread primarily include the GIC
product, general account life insurance products, fixed annuities and the
fixed-rate option of variable annuities.

Besides policy charges and fee income, the Company also earns revenues from
insurance premiums from term life insurance and asset management fees on the
separate account fund balances. The Company's operating expenses principally
consist of insurance benefits provided, general business expenses, commissions
and other costs of selling and servicing the various products we sell and
interest credited on general account liabilities.

The Company's Changes in Financial Position and Results of Operations are
described below.

1. ANALYSIS OF FINANCIAL CONDITION

From December 31, 2003 to June 30, 2004 there was an increase of $924 million in
total assets from $25,215 million to $26,139 million. Fixed maturities increased
by $439 million mainly as a result of the implementation of Statement of
Position 03-1 ("SOP 03-1"). SOP 03-1 requires among other things, that certain
individual market value adjusted annuity ("MVA") contracts be accounted for
under general account accounting treatment. As a result of the adoption,
approximately $400 million of fixed maturities were reclassified from separate
account assets to general account fixed maturities. Separate account assets
increased by $341 million despite the reclassification of approximately $400
million of assets to general account accounting treatment, due to positive
market performance of approximately $450 million and positive net sales.
Deferred acquisition costs ("DAC") increased by $118 million from December 31,
2003. This change was driven by $191 million in capitalization of acquisition
expenses, a $23 million DAC increase from the implementation of SOP 03-1 and an
increase in "shadow DAC" of $10 million. This was partially offset by $106
million of amortization. The $10 million of shadow DAC is shown in the
amortization and other non-cash items line on the Statements of Cash Flows.

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During this six-month period, liabilities increased by $944 million from $23,400
million to $24,344 million. Policyholder account balances increased by $464
million due primarily to the reclassification of MVA contracts as described
above and positive net sales. Future policy benefits increased by $152 million
due to increased Taiwan reserves and the establishment of guaranteed minimum
death benefit reserves ("GMDB") of $45 million on January 1, 2004. Corresponding
with the asset change, separate account liabilities increased by $341 million,
as described above.

2. RESULTS OF OPERATIONS

JUNE 2004 TO JUNE 2003 THREE MONTH COMPARISON

NET INCOME
Consolidated net income of $19 million for the second quarter of 2004 was $3
million lower than for the second quarter of 2003. Increases in fees from asset
based revenues in the current quarter and higher net investment income from an
increased asset base were more than offset by higher general and administrative
levels and realized capital losses. Further details regarding the components of
revenues and expenses are described in the following paragraphs.

REVENUES
Consolidated revenues increased by $11 million, from $276 million to $287
million. Policy charges and fee income, consisting primarily of mortality and
expense, loading and other insurance charges assessed on general and separate
account policyholder fund balances, increased by $18 million. The increase was a
result of an $8 million increase for individual life products and a $10 million
increase for annuity products. Policy charges for life products increased as a
result of growth in the in-force business, the favorable impact of increases in
the market value of variable life insurance assets, and the sale of newer
interest-sensitive products that generally carry higher expense charges in the
first few years of the contract. The gross life in-force business (excluding
term insurance) grew to $74 billion at June 30, 2004 from $68 billion at June
30, 2003 and $71 billion at December 31, 2003. Annuity fees are mainly asset
based fees which are dependent on the fund balances that are affected by net
sales as well as asset depreciation or appreciation on the underlying investment
funds in which the customer has the option to invest. Annuity separate account
fund balances are higher than in the prior year quarter as a result of favorable
market performance and positive net sales.

Premiums decreased by $13 million from the prior year. Gross term life insurance
premiums are $17 million higher than the prior year, however ceded premiums are
$21 million greater as a result of a coinsurance agreement with Pruco
Reinsurance Ltd. (Pruco Re) to reinsure part of the term business. This
agreement was not effective until the third quarter of 2003. Extended term
premiums decreased by $8 million due to lower policy lapses as a result of
favorable market conditions. Premiums for annuity contracts with life
contingencies were essentially unchanged from the prior year quarter.

Net realized investment gains and losses decreased by $11 million mainly due to
high losses on sales of fixed maturities resulting from higher interest rates in
the current quarter.

Net investment income increased by $9 million as a result of increased income
from fixed maturities due to an increase in the portfolio balance from the
reclassification of fixed maturities from the separate account to the general
account and positive cash flows. This was partially offset by the effect of
slightly lower reinvestment rates for fixed maturities and short-term
investments.

Other income increased by $7 million due to an expense recovery allowance
received from the Pruco Re term coinsurance agreement.

BENEFITS AND EXPENSES
Policyholder benefits decreased by $11 million as a result of favorable
mortality in life products and the impact of favorable market performance on
annuity benefits in the current quarter as compared to the year ago quarter.

The change in reserves for life products decreased $2 million from the prior
year primarily due to higher ceded reserves in the current year resulting from
the coinsurance agreement with Pruco Re, as discussed above. The change in
annuity reserves increased by $2 million primarily due to increased
annuitizations. There was relatively no change during the current quarter in the
GMDB reserves that were established as of January 1, 2004. Increases to GMDB
reserves based on gross profits were mostly offset by decreases due to benefit
payments described below.

Annuity death benefits were lower by $3 million primarily due to lower
guaranteed minimum death benefits driven by higher fund values as a result of
market appreciation. Policyholder benefits for life insurance products declined
by $8 million

12

as mortality experience improved in the variable and universal product lines,
partly offset by slightly higher term death claims, net of applicable
reinsurance.

Interest credited to policyholder account balances increased by $7 million over
the prior quarter due to growth in policyholder account balances, primarily from
the reclassification of the MVA annuity products from separate account to
policyholder account balances. Partially offsetting the increase from above was
a decrease of $2 million in interest credited for GICs as the associated
policyholder account balances decreased during 2004 due to scheduled withdrawals
and large sales in the prior year not repeated in the current year.

General, administrative, and other expenses increased $22 million from the prior
year. The primary reason for the increase was higher DAC amortization of $14
million. DAC amortization for life products increased by $10 million as a result
of the growing in-force business and comparatively less favorable fund
performance in the current quarter. DAC amortization for annuity products was
higher by $4 million due to increased gross profits. There was also an increase
in commission expense and general and administrative expenses, net of
capitalization, of $8 million due to growth in the annuity and life businesses.

JUNE 2004 TO JUNE 2003 SIX MONTH COMPARISON

NET INCOME
Consolidated net income of $41 million for the first half of 2004 was
essentially unchanged from the first half of 2003. Net income before the
cumulative change in accounting principle related to the adoption of SOP 03-1
was $10 million higher than the prior year. The effect of the cumulative change
in accounting principle was a charge to income of $9.1 million after tax in the
first quarter of 2004. This charge is caused primarily by an increase in
reserves for guaranteed minimum death benefits relating to our individual
variable annuity contracts offset by the impact of converting certain MVA
contracts from separate account accounting treatment to general account
accounting treatment. Increases in fees from asset-based revenues and higher net
investment income from an increased asset base were mostly offset by higher
interest credited to policyholders' accounts and general and administrative
levels. Further details regarding the components of revenues and expenses are
described in the following paragraphs.

REVENUES
Consolidated revenues increased by $48 million, from $533 million to $581
million. Policy charges and fee income, consisting primarily of mortality and
expense, loading and other insurance charges assessed on general and separate
account policyholder fund balances, increased by $38 million. The increase was a
result of a $19 million increase in each of the individual life and annuity
products. Policy charges for life products increased as a result of growth in
the in-force business, the favorable impact of increases in the market value of
variable life insurance assets, and the sale of newer interest-sensitive
products that generally carry higher expense charges in the first few years of
the contract. The life in-force business (excluding term insurance) grew to $74
billion at June 30, 2004 from $68 billion at June 30, 2003 and $71 billion at
December 31, 2003. Annuity fees are mainly asset based fees which are dependent
on the fund balances that are affected by net sales as well as asset
depreciation or appreciation on the underlying investment funds in which the
customer has the option to invest. Annuity separate account fund balances are
higher than in the prior year quarter as a result of favorable market
performance and positive net sales.

Realized investment gains increased by $5 million mainly due to lower fixed
maturity impairments of $11 million. The current year had impairments of $1
million compared to $12 million last year while losses on derivatives decreased
by $3 million. Derivatives are entered into as economic hedges although they may
not qualify for hedge accounting treatment. This was partly offset by losses on
sales of fixed maturities, which increased by $10 million in the current year.

Net investment income increased by $17 million as a result of increased income
in fixed maturities due to an increase in the portfolio balance from the
reclassification of fixed maturities from the separate account to the general
account and positive cash flows. This was partially offset by the effect of
slightly lower reinvestment rates for fixed maturities and short-term
investments.

Other income increased by $13 million due to an expense recovery allowance
received from the Pruco Re term coinsurance agreement. This agreement was not in
effect until third quarter of 2003.

Premiums decreased by $26 million from the prior year. Gross term insurance
premiums are $39 million higher than the prior year, however ceded premiums are
$49 million greater as a result of the Pruco Re coinsurance agreement. Extended
term premiums decreased by $14 million due to lower policy lapses as a result of
favorable market conditions. Premiums for annuity contracts with life
contingencies decreased by $2 million due to decreased annuitizations.

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BENEFITS AND EXPENSES
Policyholder benefits decreased by $29 million as a result of lower changes to
reserve provisions for life insurance and annuity reserves of $12 million and
decreased benefits of $17 million.

The change in reserves for life products decreased $11 million from the prior
year primarily as a result of a decrease in term life, net of reinsurance, and
lower extended term insurance premiums as discussed in the premium paragraph
above. The change in annuity reserves decreased slightly, due to decreased
annuitizations. There was relatively no change during the first six months in
the GMDB reserves that were established as of January 1, 2004. Increases to GMDB
reserves based on gross profits were mostly offset by decreases due to benefit
payments described below.

Annuity death benefits were lower by $11 million primarily due to lower
guaranteed minimum death benefits driven by higher fund values as a result of
market appreciation. Policyholder benefits for life insurance products decreased
by $6 million driven by lower surrenders of reduced paid up policies of $8
million partly offset by higher net death benefits of $2 million due to an
increasing in-force.

Interest credited to policyholder account balances increased by $17 million due
to growth in average policyholder account balances including the
reclassification of the MVA annuity products from separate account to
policyholder account balances. Partially offsetting the increase from the
annuity products was a decrease of $6 million in interest credited for GICs as
the associated policyholder account balances declined during 2004 due to
scheduled withdrawals and large sales in the prior year not repeated in the
current year.

General, administrative, and other expenses increased $51 million from the prior
year. The primary reason for the increase was an increase in DAC amortization of
$34 million. DAC amortization for life products increased by $23 million as a
result of the growing in-force business and comparatively less favorable fund
performance in the current quarter. DAC amortization for annuity products was
higher by $12 million due to increased gross profits. There was also an increase
in commission expense and general and administrative expenses of $17 million due
to growth in the annuity and life businesses.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to
provide reasonable assurance that information required to be disclosed in our
filings with the Securities and Exchange Commission is recorded, processed,
summarized and reported within the periods specified in the Commission's rules
and forms and is accumulated and communicated to the Company's management,
including its Chief Executive Officer and Chief Accounting Officer, as
appropriate to allow timely decisions regarding required disclosure.

In determining the Company's state income tax expense for the three months ended
June 30, 2004, an error was made relating to the treatment of state net
operating loss carryforwards. This error resulted in an understatement of tax
expense, and corresponding overstatement of net income, of $7.4 million for the
three and six months ended June 30, 2004. The error was identified by the
Company in the course of a review and inventory by the Company of its deferred
tax balances undertaken during the fourth quarter of 2004. Restated unaudited
interim financial statements of the Company correcting this error are included
in this Amendment No. 1 to the Company's Quarterly Report of Form 10-Q for the
quarter ended June 30, 2004.

The Company believes that the error was attributable to a material weakness in
the Company's internal control over financial reporting. The Company is
implementing enhancements to its internal control over financial reporting to
provide reasonable assurance that errors of this type will not recur. These
steps include the completion of the Company's comprehensive review and inventory
of deferred tax assets and liabilities. In addition, the Company is implementing
definitive standards for detailed documentation supporting deferred tax
balances. This includes the implementation of an automated application to
further enhance control with respect to the collection of detailed deferred tax
information. The Company expects to complete these enhancements in conjunction
with the preparation and reporting of its results of operations for the year
ending December 31, 2004.

Based upon the foregoing, the Company's Chief Executive Officer and Chief
Accounting Officer have concluded that the Company's disclosure controls and
procedures were not effective at the reasonable assurance level as of June 30,
2004. However, management believes that the unaudited interim financial
statements included in this Amendment No. 1 fairly present in all material
respects the Company's financial condition, results of operations and cash flows
for the fiscal periods presented.

There were no changes in the Company's internal control over financial reporting
during the quarter ended June 30, 2004 that materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

14

However, as described above, management is implementing improvements
to the Company's internal control over financial reporting to address the
material weakness.

15

PART II OTHER INFORMATION

ITEM 6. EXHIBITS

(a) EXHIBITS

31.1 Section 302 Certification of the Chief Executive Officer

31.2 Section 302 Certification of the Chief Accounting Officer

32.1 Section 906 Certification of the Chief Executive Officer

32.2 Section 906 Certification of the Chief Accounting Officer

16
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 of the
undersigned, thereunto duly authorized.

PRUCO LIFE INSURANCE COMPANY
(Registrant)

By: /s/ John Chieffo
--------------------------------
John Chieffo
Chief Accounting Officer
(Authorized Signatory and
Principal Financial Officer)

Date: January 3, 2005

17