-----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, NkDZTAK9/XJo1q8+utMqfn4VslarQwMIt8yrR3rdkWY2xkSiqWn1QHoHeli+7ime n32uGlZrBo2HXjYcd9r2cg== 0000068480-98-000005.txt : 19980817 0000068480-98-000005.hdr.sgml : 19980817 ACCESSION NUMBER: 0000068480-98-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOTOR CLUB OF AMERICA CENTRAL INDEX KEY: 0000068480 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 220747730 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00671 FILM NUMBER: 98690757 BUSINESS ADDRESS: STREET 1: 95 ROUTE 17 SOUTH CITY: PARAMUS STATE: NJ ZIP: 07653 BUSINESS PHONE: 201-291-2112 MAIL ADDRESS: STREET 1: 95 ROUTE 17 SOUTH CITY: PARAMUS STATE: NJ ZIP: 07653-0931 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended Commission File No. June 30, 1998 0-671 MOTOR CLUB OF AMERICA (Exact name of registrant as specified in its charter) New Jersey 22-0747730 (State of Incorporation) (I.R.S. Employer Identification No.) 95 Route 17 South, Paramus, New Jersey 07653 (Address of principal executive offices) Zip Code Registrant's telephone number, including area code (201) 291-2000 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 . 2,116,429 shares of Common Stock were outstanding as of August 13, 1998 1 of 19 MOTOR CLUB OF AMERICA FORM 10-Q JUNE 30, 1998 PART I PAGE ITEM 1. FINANCIAL STATEMENTS 3 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9 PART II ITEM 5. OTHER INFORMATION 18 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 19
PART I FINANCIAL INFORMATION Item 1. Financial Statements MOTOR CLUB OF AMERICA AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 1998 1997 ASSETS Investments $67,447,184 $64,503,999 Cash and cash equivalents 1,760,712 222,761 Premiums receivable 8,349,793 7,809,567 Reinsurance recoverable on paid & unpaid losses and loss expenses 17,879,776 18,666,066 Notes and accounts receivable - net 139,669 124,669 Deferred policy acquisition costs 5,796,754 5,858,650 Fixed assets - at cost, less accumulated depreciation 1,554,949 1,586,649 Prepaid reinsurance premiums 571,846 695,245 Deferred tax asset - 657,362 Other assets 1,050,367 1,221,723 Total Assets $104,551,050 $101,346,691 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Losses and loss expenses $52,205,966 $50,246,778 Unearned premiums 19,209,083 19,285,757 Other liabilities 7,482,695 8,800,272 Federal income taxes payable - current 10,588 12,851 Deferred tax liability 224,831 - Total Liabilities 79,133,163 78,345,658 Shareholders' Equity: Common Stock, par value $.50 per share: (Authorized - 10,000,000 shares; issued and outstanding - 2,116,429 (1998) and 2,094,429 (1997)) 1,058,215 1,047,215 Paid in additional capital 1,996,954 1,950,204 Unfunded accumulated benefit obligation in excess of Plan assets (4,529,100) (4,529,100) Net unrealized gains on debt securities, net of deferred taxes 797,392 597,758 Retained earnings 26,094,426 23,934,956 Total Shareholders' Equity 25,417,887 23,001,033 Total Liabilities and Shareholders' Equity $104,551,050 $101,346,691
(Financial statements should be read in conjunction with the accompanying notes)
MOTOR CLUB OF AMERICA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Six Months Ended For the Three Months Ended June 30, 1998 June 30,1997 June 30,1998 June 30,1997 Revenues: Insurance premiums (net of premiums ceded totaling $3,373,178, $3,553,484 $1,794,878 and $1,879,521) $26,122,699 $25,578,958 $13,113,746 $12,714,619 Net investment income 2,077,842 1,706,920 1,036,556 856,275 Realized gains on sales of investments 28,341 - 2,441 - Other revenues 90,261 119,082 44,162 53,740 Total revenues 28,319,143 27,404,960 14,196,905 13,624,634 Losses and Expenses: Insurance losses and loss expenses incurred (net of reinsurance recoveries totaling $1,156,632, $794,461, $267,296 and $324,234) 17,040,737 16,498,307 8,706,413 8,178,794 Amortization of deferred policy acquisition costs 7,250,570 7,601,640 3,460,351 3,777,955 Other operating expenses 1,027,834 928,023 462,842 501,027 Total losses and expenses 25,319,141 25,027,970 12,629,606 12,457,776 Income before Federal income taxes 3,000,002 2,376,990 1,567,299 1,166,858 Provision for Federal income taxes: current 61,337 52,441 32,123 25,104 deferred 779,195 534,016 400,237 273,214 Total provision for Federal income taxes 840,532 586,457 432,360 298,318 Net income $ 2,159,470 $ 1,790,533 $ 1,134,939 $ 868,540 Net income per common share: Basic $1.03 $ .87 $.54 $.42 Diluted $1.02 $ .86 $.54 $.42 Weighted average common and potential common shares outstanding: Basic 2,100,888 2,056,111 2,106,393 2,064,719 Diluted 2,122,604 2,090,282 2,118,913 2,084,451
(Financial statements should be read in conjunction with the accompanying notes)
MOTOR CLUB OF AMERICA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Six Months Ended June 30, 1998 June 30, 1997 Operating activities: Net income $ 2,159,470 $1,790,533 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and net amortization 307,300 281,804 Gain on sale of investments (28,341) - Changes in: Deferred policy acquisition costs 61,896 229,684 Premiums receivable (540,226) 122,865 Notes and accounts receivable (15,000) 115,275 Other assets 171,052 62,109 Losses and loss expenses 1,959,188 (1,291,198) Unearned premiums (76,674) (802,810) Federal income tax - current (2,263) (36,259) Federal income tax - deferred 779,195 534,016 Other liabilities (1,317,577) (611,078) Reinsurance recoverable on paid and unpaid losses 786,290 3,485,451 Prepaid reinsurance premiums 123,399 252 449 Net cash provided by operating activities $4,367,709 $4,132,841 Investing activities: Investments purchased (95,420,568) (42,799,465) Fixed assets purchased (215,908) (83,328) Proceeds from sales of investments 92,748,968 38,785,965 Net cash used in investing activities (2,887,508) (4,096,828) Financing activities: Common stock issued 57,750 235,284 Net cash provided by financing activities 57,750 235,284 Net decrease in cash and cash equivalents 1,537,951 271,297 Cash and cash equivalents at beginning of period 222,761 3,476,948 Cash and cash equivalents at end of period $1,760,712 $3,748,245 Supplemental Disclosures of Cash Flow Information Interest paid $ 2,640 $ 5,013 Federal income taxes paid $ 63,600 $ 88,700
Non Cash Investing Activities: Invested assets and shareholders' equity increased by $199,634 and decreased by $220,445 in 1998 and 1997, respectively, as a result of changes in market value pertaining to the Registrant's application of SFAS No. 115 - Accounting for Certain Investments in Debt and Equity Securities. (Financial statements should be read in conjunction with the accompanying notes)
MOTOR CLUB OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) For the Six Months Ended For the Three Months Ended June 30, 1998 June 30,1997 June 30,1998 June 30,1997 Net income $2,159,470 $1,790,533 $1,134,939 $ 868,540 Other comprehensive income (loss): Unrealized gains(losses)on securities, net of tax: Unrealized holding gains (losses) arising during the period 218,339 (220,445) 165,486 415,694 Less: reclassification adjustment for gains included in earnings (18,705) - 7,195 - Other comprehensive income (loss) 199,634 (220,445) 172,681 415,694 Comprehensive income $2,359,104 $1,570,088 1,307,620 $1,284,234
(Financial statements should be read in conjunction with the accompanying notes) MOTOR CLUB OF AMERICA AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Preparation and Presentation The accompanying condensed consolidated financial statements of Motor Club of America (the "Registrant") include its accounts and those of its subsidiary companies and, in the opinion of management, contain all adjustments necessary to present fairly the Registrant's consolidated financial position, results of operations and cash flows. These statements should be read in conjunction with the Summary of Significant Accounting Policies and other notes included in the Notes to Financial Statements in the Registrant's 1997 Annual Report on Form 10-K. 2. Shareholders' Equity Shareholders' equity at June 30, 1998 and December 31, 1997 include the undistributed GAAP net income of Motor Club of America Insurance Company ("Motor Club") and Preserver Insurance Company ("Preserver") (collectively referred to as the "Insurance Companies"), the net assets of which exceed the consolidated net assets of the Registrant. 3. Per Share Data Basic earnings per share are computed based upon the weighted average number of common shares outstanding during each year. Diluted earnings per share are computed based upon the weighted average number of common shares outstanding including outstanding stock options. 4. Federal Income Taxes The Registrant and its subsidiaries file a consolidated Federal income tax return. In the three and six month periods ended June 30, 1998 and 1997, the provision for Federal income taxes resulted in effective tax rates different from the expected statutory Federal income tax rates, principally as a result of (i) certain adjustments, principally those enacted under the Tax Reform Act of 1986; and (ii) utilization of Net Operating Loss ("NOL") carryforwards. The Registrant's NOL carryforwards at June 30, 1998 are approximately $8.6 million. 5. Comprehensive Income Effective January 1, 1998, the Registrant adopted Statement of Financial Accountant Standards ("SFAS") No. 130, "Reporting Comprehensive Income." SFAS No. 130 requires disclosure of comprehensive income in interim periods and additional disclosures of the components of comprehensive income on an annual basis. Comprehensive income includes all changes in equity during a period except those resulting from investments by and distributions to the Registrant's stockholders. The Registrant's comprehensive income is comprised of net income, unrealized gains or losses on securities and minimum pension liability adjustments. For the three and six month periods ended June 30, 1998 and 1997, there were no adjustments to the minimum pension liability. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview of Business Operations The Registrant and a group of affiliated corporations provide property and casualty insurance related services. One hundred percent of the Registrant's insurance operations are in the State of New Jersey. The Registrant has two subsidiaries which are domiciled in the State of New Jersey and write property and casualty insurance, Motor Club and Preserver. The Registrant seeks to increase its identification as a provider of small commercial lines insurance. The Registrant also seeks to expand and diversify its insurance operations outside the State of New Jersey. The Registrant believes that both of these objectives can be attained through the acquisition of other insurance companies which present opportunities to write these product lines in different geographic areas. The Registrant expects to pursue these objectives during 1998 and beyond. The Registrant anticipates continuing revenue growth in the State of New Jersey through small commercial and ancillary coverages written by Preserver as well as through new private passenger automobile ("PPA") writings by Motor Club. The Registrant also anticipates continued reductions in its operating expenses, namely through the implementation of operating efficiencies which should reduce other overhead expenditures. New Jersey Private Passenger Automobile Insurance The New Jersey PPA market has historically been subject to regulatory and legislative volatility which has, at times, adversely affected the profitability of this line of business, despite New Jersey having among the highest average premium rate in the United States. New Jersey insurance law presently requires insurers to write all eligible personal automobile coverage presented to them from drivers with eight points or less on their driving record. This is commonly referred to as "take-all-comers". The New Jersey Department of Banking and Insurance ("NJ DOBI") may grant an insurer relief, by written notification, from writing new PPA pursuant to the take-all-comers provisions of New Jersey law if a showing finds that the insurer's premium to surplus ("leverage") ratio exceeds 3 to 1. Motor Club's present applicable leverage ratio for the twelve months ended June 30, 1998 is 2.67 to 1. In June 1997, the State of New Jersey enacted PPA legislation, which principally: (1) repealed the annual "flex" rate increase available to insurers, which was required by law to be no less than 3%, and replaced it with an expedited prior approval rate filing process for rate increase requests up to 3% on an overall basis. Subsequent to the enactment of this legislation, the Commissioner of the NJ DOBI froze all personal auto insurance rates until March 1998, but has not yet promulgated the regulations required for insurers to file for an expedited rate increase; (2) restricted the ability of insurers to non-renew at their discretion up to 2% of their policies; (3) repealed the ability of insurers to non-renew one policy for every two new policies written in each rating territory; and (4) replaced the current rating system which assesses surcharges to insureds' policies for specific driving violations and accidents with a broader-based tier rating system. The Registrant's tier rating system was approved by the NJ DOBI and will be implemented on all PPA policies with effective dates on and after November 1, 1998. In addition, additional PPA legislation was enacted in 1998 which will: 1) allow insureds to reduce levels of compulsory coverages, including the option to reduce their coverage for Personal Injury Protection ("PIP") to as low as $15,000, from the presently required $250,000; 2) revise the PIP policy form to set forth the medical treatments and services, valid diagnostic tests and appropriate health care protocols which are eligible to be paid; 3) seek to limit lawsuits by claimants by redefining of the type of injury which would be grounds for litigation; 4) replace the present PIP arbitration system which utilizes part-time arbitrators who render only oral decisions without consulting medical professionals with one using full-time dispute resolution professionals who may refer questions of medical necessity or diagnosis to medical review organizations and who must render written decisions; 5) appoint a special fraud prosecutor to increase enforcement of fraudulent acts committed against insurance companies; 6) remove the system of territorial rating caps which have been in place since 1983, enabling insurers to modify (as appropriate) rates charged in various rating territories, which will be redefined; and 7) require up to a 15% reduction in rates on all PPA policies. The Registrant believes that implementation of most of the provisions of the 1998 legislation (with one exception) will likely occur in 1999. The only exception is the redefinition of the territories and removal of the territorial rating caps, which will be implemented in 2000. The Registrant also believes that the legislation would have a modest net negative effect on Motor Club's PPA operations and profitability, as the mandated rate reductions do not appear to be completely cost justified (based on information presently available) by the cost savings proposed in the legislation. Results of Operations Net income for the three and six months ended June 30, 1998 was reduced by $156,200 and $269,000, respectively, for the accrual of annual employee incentive awards, net of applicable taxes. In prior years, these awards were accrued in the fourth quarter for the entire year. The Registrant has begun to accrue these awards over the entire year given its continuing profitability. Excluding these accruals, net income increased $423,000 or $.19 basic net income per share and $638,000 or $.29 basic net income per share in the three and six months ended June 30, 1998 as compared to the same periods in 1997, respectively, primarily due to a lower expense ratio and improved investment income. The combined ratio (as adjusted) for the three and six months ended June 30, 1998 was 94.8% and 95.5% as compared to 98.0% and 97.8% for the same periods in 1997, respectively. Revenues Insurance Premiums Insurance premiums increased $399,000 or 3% and $544,000 or 2% in the three and six months ended June 30, 1998, compared to the same periods in 1997, respectively, the result of increases in new business written, along with lower reinsurance costs. The following table details the changes in Insurance Premiums for the three and six month periods ended June 30, 1998 as compared to the same period in 1997:
Three Months Ended Six Months Ended June 30, 1998 June 30, 1998 Change in Change in Net Net Class of Business Premium Percent Premium Percent Private Passenger Automobile $ 63,000 1% ($133,000) (1%) Commercial Lines 74,000 5% 262,000 8% Personal Property 262,000 21% 415,000 17% Total $399,000 3% $544,000 2%
The increases in Commercial Lines and Personal Property were enhanced by $208,000 and $412,000 in savings on reinsurance programs for the three and six month periods ended June 30, 1998, respectively, which principally affected Preserver and were implemented effective July 1, 1997. Preserver also increased its retention for property excess of loss reinsurance at that date from $75,000 to $100,000, which contributed to the reduction in rate. Effective July 1, 1998, Motor Club is converting its existing six month policies, which constitute 98% of its personal automobile book of business, to twelve month policies. This measure will further improve the Registrant's operating efficiency and service levels, and reduce expenses. The Registrant believes this is particularly important since the NJ DOBI has not proposed or adopted regulations which would provide for expedited prior approval rate increases, as required by legislation passed by the New Jersey Legislature in 1997. While conversion to twelve month policies will, for a one year period commencing July 1, 1998, temporarily increase the amount of premiums written by the Registrant, it will not effect the amount of premium earned. During the first quarter of 1998, Preserver introduced its new workers' compensation product. The Registrant believes the introduction of this product, along with other product improvements made in 1997, enable Preserver to offer a broad, competitive product line which will grow steadily in the future. Preserver produced $362,000 in direct written premium in its workers' compensation program through June 30, 1998. Net Investment Income Net investment income increased $180,000 or 21% and $371,000 or 22% for the three and six months ended June 30, 1998 as compared to the same periods in 1997, respectively. Average invested assets for the six months period ended June 30, 1998 were $64,466,000 as compared to $51,297,000 for the same period in 1997. The investment portfolio (including short-term investments and excluding realized capital gains) yielded 6.45% for the six months ended June 30, 1998 as compared to 6.25% for the same period in 1997, despite a generally lower interest rate environment. While the 26% increase in average invested assets principally contributed to the increase in investment income, the increase in investment yield during 1998 as compared to 1997 is primarily due to changes in the Registrant's investment policy made effective January 1, 1998, which are discussed in Liquidity and Capital Resources. Losses and Expenses Losses and Loss Expenses Incurred Losses and loss expenses incurred increased $528,000 or 7% and $542,000 or 3% in the three and six months ended June 30, 1998 as compared to the same periods in 1997, respectively. The Registrant had slightly higher loss ratios during the 1998 second quarter, although year to date loss ratios remain stable compared to 1997:
Three Months Ended Six Months Ended June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997 Motor Club 66.9% 65.0% 68.3% 65.7% Preserver 64.8% 62.1% 55.8% 60.2% Total 66.4% 64.3% 65.2% 64.5%
The personal automobile loss ratio for Motor Club remains in line with expectations which consider the increased amounts of new personal automobile written since 1995. The Preserver loss ratio reflects the generally positive trends which Preserver has experienced over the last two years (including lower reinsurance costs). Despite the higher loss and loss expense ratios for Motor Club on a comparative basis, no significant adverse trends were experienced or identified during the three and six month periods ended June 30, 1998. Amortization of Deferred Policy Acquisition Costs and Other Operating Expenses As noted previously, other operating expenses in the three and six month periods ended June 30, 1998 included $204,000 and $374,000, respectively, relating to the Registrant's accrual of employee incentive awards. In prior years, these awards were accrued in the fourth quarter for the entire year. Excluding these charges, expenses decreased $559,000 or 13% and $625,000 or 7% in the three and six months ended June 30, 1998 as compared to the same periods in 1997, respectively, primarily due to the elimination of certain statutory assessments and lower operating expenses, particularly salaries. The decrease in expenses (as adjusted) allowed for a decrease in the expense ratio to 28.4% and 30.3% for the three and six month periods ended June 30, 1998 as compared to 33.7% and 33.3% for the same periods in 1997. The Registrant remains committed to reducing its expense ratio by increasing revenues while limiting increases in its overhead expenditures. Financial Condition, Liquidity and Capital Resources The Registrant's book value increased to $12.01 per share at June 30, 1998 from $10.98 per share at December 31, 1997. The principal sources of the net increase were: (1) net income of $2,159,000 or $1.02 per share described previously; and (2) an increase of $199,000 or $.09 per share (net of deferred taxes) in the market value of fixed maturity investments accounted for as available-for-sale securities under SFAS No. 115. These increases in book value were offset by the dilutive effects ($.08 per share) of the issuance of 22,000 shares of common stock upon exercise of employee stock options granted under the 1987 and 1992 Stock Option plans. See Note M of the Registrant's 1997 Consolidated Financial Statements for additional information regarding the Company's stock options plans. The Insurance Companies' need for liquidity arises primarily from the obligation to pay claims. The primary sources of liquidity are premiums received, collections from reinsurers and proceeds from investments. Reserving assumptions and payment patterns of the Insurance Companies did not materially change from the prior year and there were no unusually large retained losses resulting from claim activity. Unpaid losses are not discounted. Operating and Investing Activities Net cash provided by operating activities were $4,368,000 and $4,133,000 in the six months ended June 30, 1998 and 1997, respectively. Cash flow provided by operating activities in the six months ended June 30, 1998 reflects the growth in the Insurance Companies' premium revenue, combined with the reduction in overhead expenses described previously. Net cash utilized in investing activities was $2,888,000 in 1998 and $4,097,000 in 1997. The amounts used reflect the investment of cash provided by operating activities. No unusual or nonrecurring operating expenditures have been incurred over these periods. Additionally, the payout ratio of losses has not fluctuated substantially over these periods. Effective January 1, 1998, the Registrant modified its investment policy to include certain investment grade asset-backed securities and allow for a higher percentage of investments in investment grade corporate bonds and mortgage-backed securities. The Registrant's duration for its investment portfolio was 3.40 years at June 30, 1998 as compared to 3.09 years at December 31, 1997. As part of the transition to this revised investment policy, the Registrant may periodically recognize limited realized gains and losses from sales of investments which are not deemed to be within the modified policy's guidelines. Management anticipates maintaining this approach to investing for the foreseeable future. Financing Activities The Registrant paid no dividend on its common stock in 1998 or 1997. The Registrant has no material outstanding capital commitments which would require additional financing. Recent Accounting Pronouncements In June 1998, Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities", was issued and established standards for accounting and reporting of derivative instruments and hedging activities. The Statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The Registrant is in the process of determining the effect, if any, of this Statement on its financial statements. Safe Habor Statement Under the Private Securities Litigation Reform Act of 1995 This Report on Form 10-Q contains statements that are not historical facts and are considered "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995), which can be identified by terms such as "believes", "expects", "may", "will", "should", "anticipates", the negatives thereof, or by discussions of strategy. Certain statements contained herein are forward-looking statements that involve risks, uncertainties, opinions and predictions, and no assurance can be given that the future results will be achieved since events or results may differ materially as a result of risks facing the Registrant. These include, but are not limited to, economic, market or regulatory conditions as well as risks associated with Motor Club of America's entry into new markets; diversification; catastrophic events; and state regulatory and legislative actions which can affect the profitability of certain lines of business and impede Motor Club of America's ability to charge adequate rates. Accordingly, Motor Club of America's premium growth and underwriting results have been and will continue to be potentially materially affected by these factors. PART II OTHER INFORMATION Item 5. Other Information Stockholder Proposal Deadline If a stockholder who plans to present a matter at the 1999 Annual Meeting of Stockholders fails to provide notice of the matter to the Secretary of the Registrant by March 23, 1999, it is the intention of the Registrant that, pursuant to CFR section 240.14a-4(c) (1), the persons authorized under management proxies will have discretionary authority to vote and act according to their best judgement on said matter. Item 6. Exhibits and Reports on Form 8-K a) Exhibits None b) Reports on Form 8-K None 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. MOTOR CLUB OF AMERICA By: Stephen A. Gilbert President s/Patrick J. Haveron By: Patrick J. Haveron Executive Vice President Chief Financial Officer and Chief Accounting Officer Dated: August 14, 1998 EX-27 2 ARTICLE 7 FOR 2ND QTR 1998
7 These schedules contain summary financial information extracted from Motor Club of America's Consolidated Balance Sheets for the period ending June 30, 1998 and the Consolidated Statements of Operations for the six months then ended and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1998 JUN-30-1998 64,065,073 0 0 0 382,111 0 67,447,184 1,760,712 0 5,796,754 104,551,050 52,205,966 19,209,083 0 0 0 0 0 1,058,215 24,359,672 104,551,050 26,122,699 2,077,842 28,341 90,261 17,040,737 7,250,570 1,027,834 3,000,002 840,532 2,159,470 0 0 0 2,159,470 1.03 1.02 50,246,778 18,397,248 (199,879) 4,853,873 11,384,308 52,205,966 (199,879)
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