Pruco Life Variable Contract Real Property Account 10-Q 12 May 16 2016 Q1 Quarterly report Financial data

Document & Entity Information

Document & Entity Information	3 Months Ended
	Mar. 31, 2016shares
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016
Entity Registrant Name	PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
Entity Central Index Key	801,348
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	0

Statements Of Net Assets

Statements Of Net Assets - USD ($)	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Investment in The Prudential Variable Contract Real Property Partnership	$ 108,042,692	$ 106,651,649
Net Assets	108,042,692	106,651,649
NET ASSETS, representing:
Equity of contract owners	80,961,358	80,863,412
Equity of Pruco Life Insurance Company	27,081,334	25,788,237
Net Assets	$ 108,042,692	$ 106,651,649
Units outstanding (in shares)	28,910,842	28,866,793
Portfolio shares held (in shares)	2,414,615	2,414,615
Portfolio net asset value per share (in dollars per share)	$ 44.75	$ 44.17

Statements Of Operations

Statements Of Operations - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
INVESTMENT INCOME
Net investment income allocated from The Prudential Variable Contract Real Property Partnership	$ 787,414	$ 716,578
EXPENSES
Charges to contract owners for assuming mortality and expense risk and for administration	120,043	113,953
NET INVESTMENT INCOME	667,371	602,625
NET RECOGNIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net unrealized gain (loss) on investments allocated from The Prudential Variable Contract Real Property Partnership	740,620	1,194,621
Net recognized gain (loss) on investments allocated from The Prudential Variable Contract Real Property Partnership	(136,991)	0
NET GAIN (LOSS) ON INVESTMENTS	603,629	1,194,621
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$ 1,271,000	$ 1,797,246

Statements Of Changes In Net As

Statements Of Changes In Net Assets - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
OPERATIONS
Net investment income	$ 667,371	$ 602,625
Net unrealized gain (loss) on investments allocated from The Prudential Variable Contract Real Property Partnership	740,620	1,194,621
Net recognized gain (loss) on investments allocated from The Prudential Variable Contract Real Property Partnership	(136,991)	0
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	1,271,000	1,797,246
CAPITAL TRANSACTIONS
Net contributions (withdrawals) by contract owners	(832,280)	(620,001)
Net contributions (withdrawals) by Pruco Life Insurance Company	952,323	(2,258,236)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS	120,043	(2,878,237)
TOTAL INCREASE (DECREASE) IN NET ASSETS	1,391,043	(1,080,991)
NET ASSETS
Beginning of period	106,651,649	100,673,266
End of period	$ 108,042,692	$ 99,592,275

General

General	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
General	General Pruco Life Variable Contract Real Property Account (the “Real Property Account” or the “Registrant”) was established on August 27, 1986 by resolution of the Board of Directors of Pruco Life Insurance Company (“Pruco Life” or the “Company”), as a separate investment account pursuant to Arizona law and is registered under the Securities Act of 1933, as amended. Pruco Life is a wholly-owned subsidiary of The Prudential Insurance Company of America (“Prudential”), which is a wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). The assets of the Real Property Account are segregated from Pruco Life’s other assets. The Real Property Account is used to fund benefits under certain variable life insurance and variable annuity contracts issued by Pruco Life. These products are Variable Appreciable Life (“VAL”), Variable Life Insurance (“VLI”), Discovery Plus (“SPVA”), and Discovery Life Plus (“SPVL”). The assets of the Real Property Account are invested in The Prudential Variable Contract Real Property Partnership (the “Partnership”). The Partnership is the investment vehicle for assets allocated to the real estate investment option under certain variable life insurance and variable annuity contracts. The Real Property Account, along with The Prudential Variable Contract Real Property Account and the Pruco Life of New Jersey Variable Contract Real Property Account, are the sole investors in the Partnership. These financial statements should be read in conjunction with the accompanying unaudited consolidated financial statements of the Partnership.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies A. Basis of Accounting The Unaudited Interim Financial Statements as of March 31, 2016 and the statement of net assets as of December 31, 2015, which has been derived from Audited Financial Statements, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. 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. In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Real Property Account’s Audited Financial Statements included in the Real Property Account’s Annual Report on Form 10-K for the year ended December 31, 2015. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include valuation of investment in the Partnership. B. Investment in Partnership Interest The investment in the Partnership is based on the Real Property Account’s proportionate interest of the Partnership’s fair value measured using the Partnership's net asset value as a practical expedient. At March 31, 2016 and December 31, 2015 , the Real Property Account’s share of the general partners' controlling interest of the Partnership was 53.3% or 2,414,615 shares and 53.3% or 2,414,615 shares, respectively. C. Income Recognition Net investment income or loss, and recognized and unrealized gains and losses are allocated based upon the monthly average net assets for the investment in the Partnership. Amounts are based on the Real Property Account’s proportionate interest in the Partnership. Note 2: Summary of Significant Accounting Policies (continued) D. Equity of Pruco Life Insurance Company Pruco Life maintains a position in the Real Property Account for liquidity purposes, including unit purchases and redemptions, Partnership share transactions, and expense processing. The position does not affect contract owners’ accounts or the related unit values. There were no cash transactions at the Real Property Account level for the three months ended March 31, 2016 and 2015 as all of the transactions are settled by Pruco Life on behalf of the Real Property Account through a redemption or an issuance of units. Therefore, no statement of cash flows is presented for the three months ended March 31, 2016 and 2015.

Charges and Expenses

Charges and Expenses	3 Months Ended
	Mar. 31, 2016
Charges And Expenses [Abstract]
Charges and Expenses	Charges and Expenses A. Mortality Risk and Expense Risk Charges Mortality risk and expense risk charges are determined daily using an effective annual rate of 0.6% , 0.35% , 0.9% and 0.9% for VAL, VLI, SPVA and SPVL, respectively. Mortality risk is the risk that life insurance contract owners may not live as long as estimated or annuitants may live longer than estimated and expense risk is the risk that the cost of issuing and administering the contracts may exceed related charges by Pruco Life. The mortality risk and expense risk charges are assessed through reduction in unit values. B. Administrative Charges Administrative charges are determined daily using an effective annual rate of 0.35% applied daily against the net assets representing equity of contract owners held in each subaccount for SPVA and SPVL. Administrative charges include costs associated with issuing the contract, establishing and maintaining records, and providing reports to contract owners. The administrative charge is assessed through reduction in unit values. C. Cost of Insurance and Other Related Charges Contract owner contributions are subject to certain deductions prior to being invested in the Real Property Account. The deductions for VAL and VLI are (1) taxes attributable to premiums; and (2) sales charges, not to exceed 5% for VAL, which are deducted in order to compensate Pruco Life for the cost of selling the contract; and (3) transaction costs, applicable to VAL, which are deducted from each premium payment to cover premium collection and processing costs. Contracts are subject to charges on each basic premium for assuming a guaranteed minimum death benefit risk. This charge compensates Pruco Life for the risk that an insured may die at a time when the death benefit exceeds the benefit that would have been payable in the absence of a minimum guarantee. These charges are assessed through the redemption of units. D. Deferred Sales Charge For SPVA, there is a deferred sales charge that applies at the time of a full or partial withdrawal, and the amount of the charge (which declines over time) depends on the number of years that have elapsed since the contract was issued. This deferred sales charge is assessed through the redemption of units. E. Partial Withdrawal Charge A charge is imposed by Pruco Life on partial withdrawals of the cash surrender value for VAL. A charge equal to the lesser of $15 or 2% will be made in connection with each partial withdrawal of the cash surrender value of a contract. This charge is assessed through the redemption of units.

Taxes

Taxes	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Taxes	Taxes Pruco Life is taxed as a “life insurance company,” as defined by the Internal Revenue Code. The results of operations of the Real Property Account form a part of Prudential Financial’s consolidated federal tax return. Under current federal, state, and local law, no federal, state or local income taxes are payable by the Real Property Account. As such, no provision for a tax liability has been recorded in these financial statements. Prudential management will review periodically the status of the policy in the event of changes in the tax law.

Net Contributions (Withdrawals)

Net Contributions (Withdrawals) by Contract Owners	3 Months Ended
	Mar. 31, 2016
Net Contributions Withdrawals By Contract Owners [Abstract]
Net Contributions (Withdrawals) by Contract Owners	Net Contributions (Withdrawals) by Contract Owners Net contributions (withdrawals) by contract owners for the Real Property Account by product for the three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, 2016 2015 VAL $ (499,701 ) $ (481,497 ) VLI (67,824 ) (70,696 ) SPVA (248 ) (226 ) SPVL (264,507 ) (67,582 ) TOTAL $ (832,280 ) $ (620,001 )

Partnership Distributions

Partnership Distributions	3 Months Ended
	Mar. 31, 2016
Partnership Distributions [Abstract]
Partnership Distributions	Partnership Distributions For the three months ended March 31, 2016, the Partnership made no distribution. For the three months ended March 31, 2015, the Partnership distributed a total of $5.0 million , which occurred on March 30, 2015. The Real Property Account’s share of this distribution was $3.0 million . For the three months ended March 31, 2016 and 2015, there were no purchases of the Partnership by the Real Property Account.

Unit Information

Unit Information	3 Months Ended
	Mar. 31, 2016
Unit Information [Abstract]
Unit Information	Unit Information All products referred to in Note 1 for outstanding units and unit values at March 31, 2016 and December 31, 2015 were as follows: March 31, 2016 December 31, 2015 Units Outstanding: 28,910,842 28,866,793 Unit Value: $3.10425 to $4.03870 $3.07375 to $3.99015

Financial Highlights

Financial Highlights	3 Months Ended
	Mar. 31, 2016
Financial Highlights [Abstract]
Financial Highlights	Financial Highlights The range of total return for the three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, 2016 2015 Total Return 0.99% to 1.22% 1.59% to 1.81%

Related Party

Related Party	3 Months Ended
	Mar. 31, 2016
Related Party Transactions [Abstract]
Related Party	Related Party The Real Property Account has transactions and relationships with Prudential and other affiliates. Due to these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties. Prudential and its affiliates perform various services on behalf of the Partnership in which the Real Property Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications, postage, transfer agency and various other record keeping and customer service functions.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Real Property Account values its investment in the Partnership using the net asset value provided by the Partnership as a practical expedient. During the three months ended March 31, 2016, the Real Property Account adopted Accounting Standards Update (“ASU”) 2015-07 Fair Value Measurement (Topic 820): Disclosure for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) , which removes the requirement to classify the investment in the Partnership in the fair value hierarchy. As a result, certain tables and additional disclosures related to the leveling of assets and liabilities are no longer applicable. ASU 2015-07 was applied retrospectively to all periods presented. Properties owned by the Partnership are illiquid and fair value is based on estimates from property appraisal reports prepared by independent real estate appraisers as discussed in the notes to the Partnership’s unaudited consolidated financial statements. The purpose of an appraisal is to estimate the fair value of real estate as of a specific date. The estimate of fair value of real estate is based on the conventional approaches to value, all of which require the exercise of subjective judgment. The three approaches are: (1) current cost of reproducing the real estate less deterioration and functional and economic obsolescence; (2) discounting a series of income streams and reversion at a specific yield or by directly capitalizing a single year period income estimate by an appropriate factor; and (3) value indicated by recent sales of comparable real estate in the market. In the reconciliation of these three approaches, the independent appraiser uses one or a combination of them, to come up with the approximate value for the type of real estate in the market. The following is a summary of the investment strategy, risks, and redemption provisions of the Partnership. The Partnership has a policy of investing at least 65% of its assets in direct ownership interests in income-producing real estate, such as office buildings, shopping centers, hotels, apartments or industrial properties, and participating mortgage loans. The Partnership is subject to the risks inherent in the ownership of real property such as fluctuations in occupancy rates and operating expenses and variations in rental schedules. The Partnership properties are also subject to the risk of loss due to certain types of damage, which are either uninsurable or not economically insurable. The Partnership enters into loan agreements with certain lenders to finance its real estate investment transactions. Unfavorable economic conditions could increase related borrowing costs, limit access to the capital markets or result in a decision by lenders not to extend credit to the Partnership. Refer to the Partnership’s unaudited consolidated financial statements for other related risks. The Partnership allows for withdrawal of cash, in any amount up to a partner’s value of the Partnership. Ordinarily payment of the amount requested will be made on the day following the request. The Partnership reserves the right to defer such payments for a period of up to six months if the partners or the investment manager determine that there is insufficient cash available and prompt disposition of investments held by the Partnership cannot be made on commercially reasonable terms. The Real Property Account had no unfunded capital commitments as of March 31, 2016.

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Basis Of Accounting	Basis of Accounting The Unaudited Interim Financial Statements as of March 31, 2016 and the statement of net assets as of December 31, 2015, which has been derived from Audited Financial Statements, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. 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. In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Real Property Account’s Audited Financial Statements included in the Real Property Account’s Annual Report on Form 10-K for the year ended December 31, 2015.
Use of Estimates	The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include valuation of investment in the Partnership.
Investment In Partnership Interest	Investment in Partnership Interest The investment in the Partnership is based on the Real Property Account’s proportionate interest of the Partnership’s fair value measured using the Partnership's net asset value as a practical expedient.
Income Recognition	Income Recognition Net investment income or loss, and recognized and unrealized gains and losses are allocated based upon the monthly average net assets for the investment in the Partnership. Amounts are based on the Real Property Account’s proportionate interest in the Partnership.
Equity of Pruco Life Insurance Company	Equity of Pruco Life Insurance Company Pruco Life maintains a position in the Real Property Account for liquidity purposes, including unit purchases and redemptions, Partnership share transactions, and expense processing. The position does not affect contract owners’ accounts or the related unit values. There were no cash transactions at the Real Property Account level for the three months ended March 31, 2016 and 2015 as all of the transactions are settled by Pruco Life on behalf of the Real Property Account through a redemption or an issuance of units.

Net Contributions (Withdrawal16

Net Contributions (Withdrawals) by Contract Owners (Tables)	3 Months Ended
	Mar. 31, 2016
Net Contributions Withdrawals By Contract Owners [Abstract]
Schedule of Net Contributions (Withdrawals) by Contract Owners	Net contributions (withdrawals) by contract owners for the Real Property Account by product for the three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, 2016 2015 VAL $ (499,701 ) $ (481,497 ) VLI (67,824 ) (70,696 ) SPVA (248 ) (226 ) SPVL (264,507 ) (67,582 ) TOTAL $ (832,280 ) $ (620,001 )

Unit Information (Tables)

Unit Information (Tables)	3 Months Ended
	Mar. 31, 2016
Unit Information [Abstract]
Schedule Of Units Of Partnership Interest	All products referred to in Note 1 for outstanding units and unit values at March 31, 2016 and December 31, 2015 were as follows: March 31, 2016 December 31, 2015 Units Outstanding: 28,910,842 28,866,793 Unit Value: $3.10425 to $4.03870 $3.07375 to $3.99015

Financial Highlights (Tables)

Financial Highlights (Tables)	3 Months Ended
	Mar. 31, 2016
Financial Highlights [Abstract]
Schedule of Financial Highlights	The range of total return for the three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, 2016 2015 Total Return 0.99% to 1.22% 1.59% to 1.81%

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Details) - shares	Mar. 31, 2016	Dec. 31, 2015
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Percent of interest in the General Partners Controlling Interest	53.30%	53.30%
Interest in the General Partners Controlling Interest (in shares)	2,414,615	2,414,615

Charges and Expenses (Details)

Charges and Expenses (Details)	3 Months Ended
	Mar. 31, 2016USD ($)
VAL
Charges And Expenses [Line Items]
Effective annual rate used to determine daily the mortality risk and expense risk charges	0.60%
Maximum percent of sales charges	5.00%
Partial withdrawal charge, amount	$ 15
Partial withdrawal charge, percent	2.00%
VLI
Charges And Expenses [Line Items]
Effective annual rate used to determine daily the mortality risk and expense risk charges	0.35%
SPVA
Charges And Expenses [Line Items]
Effective annual rate used to determine daily the mortality risk and expense risk charges	0.90%
Effective annual rate used to determine daily the administrative charges	0.35%
SPVL
Charges And Expenses [Line Items]
Effective annual rate used to determine daily the mortality risk and expense risk charges	0.90%
Effective annual rate used to determine daily the administrative charges	0.35%

Net Contributions (Withdrawal21

Net Contributions (Withdrawals) by Contract Owners (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net Contributions Withdrawals By Contract Owners [Line Items]
Net Contributions (Withdrawals) By Contract Owners	$ (832,280)	$ (620,001)
VAL
Net Contributions Withdrawals By Contract Owners [Line Items]
Net Contributions (Withdrawals) By Contract Owners	(499,701)	(481,497)
VLI
Net Contributions Withdrawals By Contract Owners [Line Items]
Net Contributions (Withdrawals) By Contract Owners	(67,824)	(70,696)
SPVA
Net Contributions Withdrawals By Contract Owners [Line Items]
Net Contributions (Withdrawals) By Contract Owners	(248)	(226)
SPVL
Net Contributions Withdrawals By Contract Owners [Line Items]
Net Contributions (Withdrawals) By Contract Owners	$ (264,507)	$ (67,582)

Partnership Distributions (Deta

Partnership Distributions (Details) - USD ($)	Mar. 30, 2015	Mar. 31, 2016
Partnership Distributions [Abstract]
Partnership distribution made	$ 5,000,000	$ 0
The Account's share of Partnership distribution	$ 3,000,000

Unit Information (Details)

Unit Information (Details) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Unit Information [Abstract]
Units Outstanding (in shares)	28,910,842	28,866,793
Unit Value, lower range (in dollars per share)	$ 3.10425	$ 3.07375
Unit Value, higher range (in dollars per share)	$ 4.03870	$ 3.99015

Financial Highlights (Details)

Financial Highlights (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Financial Highlights [Abstract]
Minimum rate of return	0.99%	1.59%
Maximum rate of return	1.22%	1.81%

Fair Value Measurements (Detail

Fair Value Measurements (Details)	Mar. 31, 2016USD ($)
Fair Value Disclosures [Abstract]
Minimum investment percentage in real estate	65.00%
Unfunded capital commitments	$ 0