-----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, TVNwWsmaT+PkTKNJgWIfn1BB5tt2WaBbPA45CXeB25Uz3YdoL8Dvr1FxPY4KDXxW 5LHE2Q6k7B5+p6MHCBPDMg== 0000898080-97-000192.txt : 19970815 0000898080-97-000192.hdr.sgml : 19970815 ACCESSION NUMBER: 0000898080-97-000192 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOTORS MECHANICAL REINSURANCE CO LTD CENTRAL INDEX KEY: 0000790381 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-06534 FILM NUMBER: 97661746 BUSINESS ADDRESS: STREET 1: TRIDENT HOUSE CITY: BRIDGETOWN BARBADOS STATE: C8 ZIP: 00000 BUSINESS PHONE: 8094364895 MAIL ADDRESS: STREET 1: SUTHERLAND ASBILL & STREET 2: 1275 PENNSYLVANIA AVE N W CITY: WASHINGTON STATE: DC ZIP: 20004-2404 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON. D.C. 20549 FORM 10-Q X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For quarterly period ended June 30, 1997 Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 33-6534 Motors Mechanical Reinsurance Company, Limited (Exact name of registrant as specified in its charter) Barbados N/A (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Bishops Court Hill, St. Michael, Barbados N/A (Address of principle executive offices) (Zip Code) (246) 436-4895 (Registrant's telephone number, including area code) 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 the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Class As of June 30, 1997 Common Stock, no par-value 2,000 Participating Stock, no par-value 27,100 This quarterly report, filed pursuant to Rule 13a-13 of the General Rules and Regulations under the Securities Exchange Act of 1934, consists of the following information as specified in Form 10-Q: Part 1. FINANCIAL INFORMATION Item 1. Financial Statements 1. Balance Sheets, June 30, 1997 and December 31, 1996. 2. Statements of Income and Retained Earnings for the three month periods ended June 30, 1997 and 1996 and the six month periods ended June 30, 1997 and 1996. 3. Statements of Cash Flows for the six month periods ended June 30, 1997 and 1996. In the opinion of Management, the accompanying financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for a fair presentation of the results for the interim periods presented. MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED BALANCE SHEETS (Expressed in U.S. Dollars) June 30, 1997 December 31, (unaudited) 1996 ASSETS Investments $ 71,804,974 $ 66,647,930 Cash and cash equivalents 11,823,896 12,926,272 Accrued investment income 1,139,247 1,453,691 Due from Motors Insurance Corporation 4,238,834 3,158,064 Deferred acquisition costs 23,495,274 21,855,207 Prepaid expenses 32,958 0 ------------ ------------ Total Assets $112,535,183 $106,041,164 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Unearned premiums $ 90,390,212 $ 84,084,870 Loss reserves 4,972,965 4,284,304 Accrued liabilities 148,359 110,416 ------------ ------------ Total liabilities 95,511,536 88,479,590 ------------ ------------ STOCKHOLDERS' EQUITY Share Capital Common Stock-no par value; Authorized - 2,000 shares; issued and outstanding - 2,000 200,000 200,000 Participating Stock-no par value; Authorized - 100,000 shares; issued and outstanding - 27,100 shares as of June 30, 1997 and 25,400 shares as of December 31, 1996 2,032,500 1,905,000 ------------ ------------ 2,232,500 2,105,000 Retained Earnings 14,293,871 14,913,053 Unrealized appreciation on investments 497,276 543,521 ------------ ------------ Total Stockholders' Equity 17,023,647 17,561,574 ------------ ------------ Total Liabilities and Stockholders' Equity $112,535,183 $106,041,164 ============ ============
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE THREE MONTH PERIODS ENDED JUNE 30, 1997 AND JUNE 30, 1996 AND THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND JUNE 30, 1996 (UNAUDITED) (Expressed in U.S. Dollars) Three Month Periods Six Month Periods Ended June 30, Ended June 30, INCOME 1997 1996 1997 1996 Reinsurance premiums assumed $15,112,998 $11,911,576 $27,891,709 $23,024,253 Increase in unearned premiums $ 3,719,483 3,139,214 6,305,342 6,014,540 ----------- ----------- ----------- ----------- Premiums earned 11,393,515 8,772,362 21,586,367 17,009,713 ----------- ----------- ----------- ----------- Investment income Interest earned 1,259,529 1,375,216 2,474,926 2,359,328 Realized gains (losses) on investments (45,149) (722,359) (611,257) 31,102 ----------- ----------- ----------- ----------- Investment income 1,214,380 652,857 1,863,669 2,390,430 ----------- ----------- ----------- ----------- TOTAL INCOME 12,607,895 9,425,219 23,450,036 19,400,143 ----------- ----------- ----------- ----------- EXPENSES Acquisition costs 2,961,947 2,280,495 5,611,862 4,421,789 Losses paid 7,009,616 5,455,423 13,297,542 10,989,772 Increase in loss reserves 524,760 233,949 688,662 346,076 Administrative expenses - Related Parties 54,915 59,638 111,578 108,429 - Other 61,289 110,911 162,844 232,906 ----------- ----------- ----------- ----------- TOTAL EXPENSES 10,612,527 8,140,416 19,872,488 16,098,972 ----------- ----------- ----------- ----------- NET INCOME 1,995,368 1,284,803 3,577,548 3,301,171 RETAINED EARNINGS, beginning of period 12,298,503 13,533,910 14,913,053 11,517,542 LESS: DIVIDENDS 0 (4,007,483) (4,196,730) (4,007,483) LESS: REDEMPTION OF PARTICIPATING STOCK 0 (51,529) 0 (51,529) ----------- ----------- ----------- ----------- RETAINED EARNINGS, end of period $14,293,871 $10,759,701 $14,293,871 $10,759,701 =========== =========== =========== ===========
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF CASH FLOWS FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND JUNE 30, 1996 (UNAUDITED) (Expressed in U.S. Dollars) Six Month Periods Ended June 30, 1997 1996 Cash flows from operating activities: Reinsurance premiums collected $25,276,172 $ 22,232,098 Losses and acquisition expenses paid (18,960,372) (16,515,466) Administrative expenses paid (327,770) (290,861) Investment income received 2,793,370 3,129,659 ------------ ----------- Net cash provided by operating activities 8,781,400 8,555,430 ------------ ----------- Cash flows from investing activities: Purchases of investments (181,563,781) (115,555,008) Sales and maturities of investments 175,749,235 115,120,580 ------------ ----------- Net cash invested (5,814,546) (434,428) ------------ ----------- Cash flows from financing activities: Proceeds from issuance of Participating Stock 127,500 52,500 Redemption of participating stock 0 (74,029) Dividends paid (4,196,730) (4,007,483) ------------ ----------- Net cash (used in) provided by financing activities (4,069,230) 4,029,012 ------------ (Decrease) increase in cash and cash equivalents (1,102,376) 4,091,990 Cash and cash equivalents, beginning of period 12,926,272 7,093,106 ------------ ----------- Cash and cash equivalents, end of period $11,823,896 $11,185,096 Reconciliation of net income to net cash provided by operating activities: Net income 3,577,548 3,301,171 Realized losses(gains) on investments 611,257 (31,102) Change in: Accrued investment income 314,444 769,355 Due from Motors Insurance Corporation (1,080,770) (297,802) Deferred acquisition costs (1,640,067) (1,564,582) Prepaid expenses (32,958) (28,223) Unearned premiums 6,305,342 6,014,540 Loss reserves 688,661 346,076 Accrued liabilities 37,943 45,997 ---------- ---------- Net cash provided by operating activities $ 8,781,400 $ 8,555,430 ========== ==========
Item 2. Management's Discussion And Analysis of Financial Condition And Results of Operations Liquidity. It is anticipated that the Company will continue to be able to generate sufficient funds from operations to meet current liquidity needs. Premiums generated by the Company's reinsurance business combined with investment earnings plus proceeds from the sale of Shares will continue to be the principal sources of funds for investment by the Company. Such funds will be available to meet the Company's liquidity requirements. No capital expenditures are expected in the forseeable future. Capital Resources. During the quarter ended June 30, 1997, 9 new series of Shares were added bringing the total number of series issued and outstanding to 271 as of the end of the quarter. As of June 30, 1997, the share capital of the Company was $2,232,500 (compared with $2,105,000 as of December 31, 1996) comprised of paid in capital with respect to the Common Stock of $200,000 and paid in capital with respect to Participating Shares of $2,032,500 (compared with $1,905,000 as of December 31, 1996). In addition, the Company had surplus from retained earnings in the amount of $14,293,871 as of June 30, 1997 compared with $14,913,053 as of December 31, 1996. Results of Operations. During the quarter ended June 30, 1997, the Company had net income of $1,995,368, compared with net income of $1,284,803 for the quarter ended June 30, 1996. For the six month period ended June 30, 1997, the Company had net income of $3,577,548, compared with net income of $3,301,171 for the comparable period in 1996. As discussed below the increase in net income for the quarter ended June 30, 1997 compared to the comparable period of 1996 is primarily attributable to improved underwriting results and a smaller loss on the sale of investments. The increase in net income for the six months ended June 30, 1997 compared to the comparable period of 1996 is primarily attributable to improved underwriting results which offset a decline in investment income. Premium earned increased to $11,393,515 during the quarter ended June 30, 1997 compared to $8,772,362 for the same period in 1996. Expenses incurred during the quarter ended June 30, 1997 were $10,612,527 compared to $8,140,416 for the comparable quarter of 1996. Net underwriting income for the quarter ended June 30, 1997 was $780,988 compared to $631,946 for the comparable period in 1996. The ratio of losses incurred to premiums earned for the quarter ended June 30, 1997 was 66.1% compared to 64.9% for the comparable period in 1996. For the six month period ended June 30, 1997, the Company had earned premiums of $21,586,367 compared to $17,009,713 for the comparable period of 1996. Expenses incurred during the six month period ended June 30, 1997 were $19,872,488 compared to $16,098,972 for the comparable period in 1996. Net underwriting income for the Company was $1,713,879 for the six month period ended June 30, 1997 compared to $910,741 for the comparable period in 1996. The loss ratio for the six month period ended June 30, 1997 was 64.8%, compared to 66.6% for the six month period ended June 30, 1996. Investment income for the quarter ended June 30, 1997 was $1,214,380 compared to $652,857 for the comparable period of 1996. Investment income for the six month period ended June 30, 1997 was $1,863,669 compared to $2,390,430 for the comparable period of 1996. During the quarter ended June 30, 1997, the Company realised losses on the sale of investment securities of $45,149, compared to losses of $722,359 during the comparable period of 1996. During the six month period ended June 30, 1997, the Company realized net losses on the sale of investment securities of $611,257 compared to gains of $31,102 during the comparable period of 1996. During the six month period ended June 30, 1996, the Company sold investment securities in anticipation of increases in interest rates. These sales resulted in realized gains during the first quarter of 1996 which gains were largely offset by realized losses during the second quarter of 1996 with the Company realizing a modest net gain for the six month period ended June 30, 1996. The Company realized losses on the sale of investment securities during the quarter and the six month period ended June 30, 1997, as a result of sales made in anticipation of higher interest rates. As of June 30, 1997, the Company had net unrealized appreciation of $497,276 on its investments compared to unrealized appreciation of $543,521 as of December 31, 1996. For the quarter ended June 30, 1997, the Company had interest income of $1,259,529 compared to $1,375,216 for the comparable period of 1996. For the six month period ended June 30, 1997, the Company had interest income of $2,474,926 compared to $2,359,328 for the comparable period of 1996. These increases were largely attributable to an increase in funds available for investment which was partially offset by reductions in portfolio yields and coupon rates on invested assets. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (27) Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter for which this report is filed. 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. MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED (Registrant) By: s/Ronald W. Jones Ronald W. Jones Vice President, Finance Signing on behalf of the Registrant, and Principal Financial Officer Dated: August 7, 1997 EX-27 2 FINANCIAL DATA SCHEDULE
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1997 AND IS QUALIFED IN ITS ENTIRETY BY REFERENCES TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 71,804,974 0 0 0 0 0 71,804,974 11,823,896 0 23,495,274 112,535,183 4,972,965 90,390,212 0 0 0 0 0 200,000 16,823,647 112,535,183 21,586,367 2,474,926 (611,257) 0 13,986,204 5,611,862 274,422 3,577,548 0 3,577,548 0 0 0 3,577,548 0 0 0 0 0 0 0 0 0 INFORMATION AS TO EARNINGS PER SHARE IS NOT PROVIDED INASMUCH AS THE RESULTS FOR EACH SERIES OF STOCK WILL VARY WITH THE UNDERWRITING EXPERIENCE ATTRIBUTABLE TO EACH SUBSIDIARY CAPITAL ACCOUNT ESTABLISHED WITH RESPECT TO THAT SERIES.
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