-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, c8dh4dcZOVZc60PddLAwT+I8c+H0EiiD9gt/Tw7wJu+6MXv/S9LsyQVfFCXy/Mtm n1cIPxFGtY1yR1OwMvP1lg== 0000898080-94-000033.txt : 19940510 0000898080-94-000033.hdr.sgml : 19940510 ACCESSION NUMBER: 0000898080-94-000033 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOTORS MECHANICAL REINSURANCE CO LTD CENTRAL INDEX KEY: 0000790381 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94526639 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 FORM 10-Q 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 March 31, 1994 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 NA (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Bishops Court Hill, St. Michael, Barbados NA (Address of principle executive offices) (Zip Code) (809) 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 March 31, 1994 Common Stock, no par-value 2,000 Participating Stock, no par-value 19,900 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, March 31, 1994 and December 31, 1993. 2. Statements of Income and Retained Earnings for the three month periods ended March 31, 1994 and March 31, 1993. 3. Statements of Cash Flows for the three month periods ended March 31, 1994 and March 31, 1993. 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) March 31, 1994 December 31, (unaudited) 1993 ASSETS Investments $34,903,388 $29,882,488 Cash and cash equivalents 3,043,379 6,788,771 Accrued investment income 901,057 861,190 Due from ceding company 3,535,158 2,331,978 Deferred acquisition costs 11,599,267 10,495,206 Prepaid expenses 1,875 0 Total Assets $53,984,124 $50,359,633 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Unearned premiums 44,657,483 40,413,058 Loss reserves 2,097,239 1,910,030 Accrued liabilities 165,573 107,181 Total liabilities 46,920,295 42,430,269 STOCKHOLDERS' EQUITY Share Capital Common Stock - no par value; Authorized - 2,000 shares; issued and outstanding - 2,000 shares 200,000 200,000 Participating Stock - no par value; Authorized - 100,000 shares; issued and outstand- ing - 19,900 shares as of March 31, 1994 and 18,900 shares as of December 31, 1993 1,492,500 1,417,500 1,692,500 1,617,500 Retained Earnings 6,534,796 6,211,978 Unrealized appreciation (depreciation) on investments (1,163,467) 99,886 Total Stockholders' Equity 7,063,829 7,929,364 Total Liabilities and Stockholders' Equity $53,984,124 $50,359,633 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1994 AND MARCH 31, 1993 (UNAUDITED) (Expressed in U.S. Dollars) Three Month Periods Ended March 31, 1994 1993 INCOME Reinsurance premiums assumed $8,816,331 $5,389,885 Increase in unearned premiums 4,244,425 1,817,057 Premiums earned 4,571,906 3,572,828 Investment income Interest earned 570,692 461,529 Realized gains (losses) on investments (303,389) 378,444 Investment income - net 267,303 839,973 TOTAL INCOME 4,839,209 4,412,801 EXPENSES Acquisition costs 1,188,209 928,266 Losses paid 3,001,850 2,627,016 Increase (decrease) in loss reserves 187,209 (15,861) Administrative expenses 139,123 140,255 TOTAL EXPENSES 4,516,391 3,679,676 NET INCOME 322,818 733,125 RETAINED EARNINGS, beginning of period 6,211,978 5,528,775 RETAINED EARNINGS, end of period 6,534,796 6,261,900 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1994 AND MARCH 31, 1993 (UNAUDITED) (Expressed in U.S. Dollars) Three month periods ended March 31, 1994 1993 Cash flows from operating activities: Reinsurance premiums assumed $7,062,145 $6,216,413 Losses and underwriting expenses paid (4,730,167) (3,859,806) Administrative expenses paid (95,553) (75,302) Investment income received 227,436 1,333,671 Net cash provided by operating activities 2,463,861 3,614,976 Cash flows from investing activities: Purchases of marketable securities (25,508,046) (23,807,944) Sales and maturities of marketable securities 19,223,793 22,461,238 Net cash invested (6,284,253) (1,346,706) Cash flows from financing activities: Proceeds from issuance of Participating stock 75,000 52,500 Net cash provided by financing activities 75,000 52,500 Increase (decrease) in cash and cash equivalents (3,745,392) 2,320,770 Cash and cash equivalents, beginning of period 6,788,771 1,710,738 Cash and cash equivalents, end of period $ 3,043,379 $ 4,031,508 Reconciliation of net income to net cash provided by operating activities: Net income 322,818 733,125 Change in: Accrued investment income (39,867) 492,399 Due from ceding company (1,203,180) 995,342 Deferred acquisition costs (1,104,061) (473,126) Prepaid expenses (1,875) (1,875) Unearned premiums 4,244,425 1,817,057 Loss reserves 187,209 (15,861) Accrued liabilities 58,392 67,915 Net cash provided by operating activities $ 2,463,861 $ 3,614,976 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 during the next few years. On April 8, 1994, the Board of Directors authorized the payment of dividends to eligible holders of Participating Shares aggregating $2,156,304. Capital Resources. As of March 31, 1994, the share capital of the Company was $1,692,500 (compared with $1,617,500 as of December 31, 1993) comprised of paid in capital with respect to the Common Stock of $200,000 and paid in capital with respect to Participating Shares of $1,492,500 (compared with $1,417,500 as of December 31, 1993). In addition, the Company had surplus from retained earnings in the amount of $6,534,796 compared with $6,211,978 as of December 31, 1993. Results of Operations. Net Premium volume continues to increase as additional participants are added to the program. During the quarter ended March 31, 1994, 10 new series of Shares were added bringing the total number of series approved to 199. Premiums earned increased by $999,078 over the comparable period of 1993. The ratio of losses incurred to premiums earned for the quarter under review is 69.8% as compared to 73.1% for the quarter ended March 31, 1993. Expenses increased by $836,715 to $4,516,391 in the quarter ended March 31, 1994 from $3,679,676 in the first quarter of 1993. Net underwriting income in the quarter ended March 31, 1994 increased $162,363 to $55,515 compared with an underwriting loss of $106,848 in the 1993 quarter. The increase in net underwriting income, however, was offset by a decline in investment income of $572,670, from $839,973 in the first quarter of 1993 to $267,303 in the comparable period of 1994, due to realized losses on the sale of invested assets. The Company has reported net income for the three month period ended March 31, 1994 of $322,818 compared to net income of $733,125 for the three month period ended March 31, 1993. Changes in interest rates in the quarter ended March 31, 1994 adversely affected the market values of the Company's investment portfolio at that date and its investment income in the quarter then ended as compared with the quarter ended March 31, 1993. Realized losses on the sale of investment securities in the quarter ended March 31, 1994 were $303,389 compared to realized gains of $378,444 in the quarter ended March 31, 1993. Unrealized losses on investment securities held at March 31, 1994 were $1,163,467 compared to unrealized gains at December 31, 1993 of $99,886. The Company's investment guidelines do not permit the use of financial instrument derivatives in managing interest rate risk. Cash, cash equivalents and investments valued at market have increased from $36,671,259 at the beginning of the year to $37,946,767 at March 31, 1994. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 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 Signing on behalf of the Registrant, and Principal Financial Officer Dated: May 6, 1994 -----END PRIVACY-ENHANCED MESSAGE-----