-----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, ME1EdI5ug2txb7kNrbzLIaVI3IzrnkivcNFem6zgftGvJCp4InG9uKDs1JJJlI3e rc1trw63ebuJ/lFN21CHLA== 0000898080-96-000057.txt : 19960517 0000898080-96-000057.hdr.sgml : 19960517 ACCESSION NUMBER: 0000898080-96-000057 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 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: 96564730 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, 1996 _____________________________ ____ 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, 1996 Common Stock, no par-value 2,000 Participating Stock, no par-value 24,600 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, 1996 and December 31, 1995. 2. Statements of Income and Retained Earnings for the three month periods ended March 31, 1996 and March 31, 1995. 3. Statements of Cash Flows for the three month periods ended March 31, 1996 and March 31, 1995. 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. Certain amounts in the 1995 financial statements have been reclassified to conform with the 1996 presentation. MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED BALANCE SHEETS (Expressed in U.S. Dollars) March 31, 1996 December 31, (unaudited) 1995 ____________ ____________ ASSETS Investments $57,157,852 $59,898,265 Cash and cash equivalents 13,788,561 7,093,106 Accrued investment income 1,184,572 2,532,813 Due from Motors Insurance Corporation 2,772,721 3,095,587 Deferred acquisition costs 19,655,241 18,907,205 ___________ ___________ Total Assets $94,558,947 $91,526,976 ___________ ___________ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Unearned premiums $75,627,858 $72,752,532 Loss reserves 3,592,461 3,480,334 Accrued liabilities 171,338 117,447 ___________ ___________ Total liabilities 79,391,657 76,350,313 ___________ ___________ 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 - 24,600 shares as of March 31, 1996 and 24,100 shares as of December 31, 1995 1,845,000 1,807,500 ___________ ___________ 2,045,000 2,007,500 Retained Earnings 13,533,910 11,517,542 Unrealized (depreciation) appreciation on investments (411,620) 1,651,621 ___________ ___________ Total Stockholders' Equity 15,167,290 15,176,663 ___________ ___________ Total Liabilities and Stockholders' Equity $94,558,947 $91,526,976 ___________ ___________ MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND MARCH 31, 1995 (UNAUDITED) (Expressed in U.S. Dollars) Three Month Periods Ended March 31, 1996 1995 ____________ ____________ INCOME Reinsurance premiums assumed $11,112,677 9,642,726 Increase in unearned premiums 2,875,326 3,330,337 __________ __________ Premiums earned 8,237,351 6,312,389 __________ __________ Investment income Interest earned 984,112 898,990 Realized gains (losses) on investments 753,461 (529,709) __________ __________ Investment income 1,737,573 369,281 __________ __________ TOTAL INCOME 9,974,924 6,681,670 __________ __________ EXPENSES Acquisition costs 2,141,294 1,640,774 Losses paid 5,534,349 4,271,649 Increase in loss reserves 112,127 96,159 Administrative expenses Related Parties 48,791 69,517 Other 121,995 113,154 __________ __________ TOTAL EXPENSES 7,958,556 6,191,253 __________ __________ NET INCOME 2,016,368 490,417 RETAINED EARNINGS, beginning of period 11,517,542 5,796,732 __________ _________ RETAINED EARNINGS, end of period $13,533,910 $6,287,149 ___________ __________ MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND MARCH 31, 1995 (UNAUDITED) (Expressed in U.S. Dollars) Three month periods ended March 31, 1996 1995 ___________ ___________ Cash flows from operating activities: Reinsurance premiums assumed $11,119,421 $9,853,097 Losses and underwriting expenses paid (8,091,789) (6,618,043) Administrative expenses paid (133,654) (97,698) Investment income received 2,333,344 1,241,656 __________ ___________ Net cash provided by operating activities 5,227,322 4,379,012 __________ ___________ Cash flows from investing activities: Purchases of investment securities (54,464,499) (38,556,681) Sales and maturities of investment securities 55,895,132 38,940,052 __________ ___________ Net cash invested 1,430,633 383,371 __________ ___________ Cash flows from financing activities: Proceeds from issuance of Participating stock 37,500 67,500 __________ ___________ Net cash provided by financing activities 37,500 67,500 __________ ___________ Increase in cash and cash equivalents 6,695,455 4,829,883 Cash and cash equivalents, beginning of period 7,093,106 3,303,060 __________ ___________ Cash and cash equivalents, end of period $13,788,561 $ 8,132,943 ___________ ___________ Reconciliation of net income to net cash provided by operating activities: Net income $2,016,368 $ 490,417 Realized losses (gains) on investments (753,461) 529,709 Change in: Accrued investment income 1,348,241 341,668 Due from Motors Insurance Corporation 322,866 349,408 Deferred acquisition costs (748,036) (866,362) Prepaid expenses 0 (1,875) Unearned premiums 2,875,326 3,330,337 Loss reserves 112,127 96,159 Accrued liabilities 53,891 109,551 __________ ___________ Net cash provided by operating activities $5,227,322 $ 4,379,012 __________ ___________ 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. On April 11, 1996, the Board of Directors authorized the payment of dividends to eligible holders of Participating Shares aggregating $4,007,483. Capital Resources. As of March 31, 1996, the share capital of the Company was $2,045,000 (compared with $2,007,500 as of December 31, 1995) comprised of paid in capital with respect to the Common Stock of $200,000 and paid in capital with respect to Participating Shares of $1,845,000 (compared with $1,807,500 as of December 31, 1995). In addition, the Company had surplus from retained earnings in the amount of $13,533,910 as of March 31, 1996 compared with $11,517,542 as of December 31, 1995. Results of Operations. During the quarter ended March 31, 1996, the Company had net income of $2,016,368, compared with net income of $490,417 for the quarter ended March 31, 1995. Net premium volume continues to increase as additional participants are added to the program. During the quarter ended March 31, 1996, 5 new series of Shares were added bringing the total number of series issued and outstanding to 246 as of the end of the quarter. Premiums earned increased during the quarter ended March 31, 1996 by $1,924,962 over the comparable period of 1995 and were $8,237,351. Expenses incurred during the quarter ended March 31, 1996 were $7,958,556 compared to $6,191,253 for the comparable quarter of 1995. Net underwriting income for the quarter ended March 31, 1996 was $278,795 compared to $121,136 for the comparable period in 1995. The ratio of losses incurred to premiums earned for the quarter under review was 68.6% compared to 69.2% for the comparable period in 1995. Investment income for the quarter under review was $1,737,573 compared to $369,281 for the quarter ended March 31, 1995. During the quarter under review, the Company realized gains on the sale of investment securities of $753,461 compared to losses of $529,709 on the sale of investment securities during the comparable period of 1995. As of March 31, 1996, the Company had net unrealized depreciation of $411,620 on its investments compared to unrealized appreciation of $1,651,621 as of December 31, 1995. The realized gains in the 1996 quarter resulted from the sale of investment securities to take advantage of market opportunities. The realized losses in the 1995 quarter resulted from the sale of securities, the value of which had been adversely affected by increases in interest rates during that quarter. The unrealized depreciation at March 31, 1996 compared to the unrealized appreciation at December 31, 1995 is in large part attributable to the sale of appreciated investment securities during the quarter coupled with a reduction in the value of the Company's investment portfolio resulting from increases in global bond interest rates since December 31, 1995. For the quarter, the Company had interest income of $984,112 compared to $898,990 for the comparable period of 1995. This increase was primarily attributable to increases in the amount of assets under management which offset the impact of lower interest rates compared to the comparable period of 1995. PART II. OTHER INFORMATION 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 Signing on behalf of the Registrant, and Principal Financial Officer Dated: May 10, 1996 EX-27 2 FINANCIAL DATA SCHEDULE
7 This schedule contains summary financial information extracted from the Company's quarterly report on Form 10-Q for the quarter ended March 31, 1996 and is qualified in its entirety by references to such financial statements. 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 57,157,852 0 0 0 0 0 57,157,852 13,788,561 0 19,655,241 94,558,947 3,592,461 75,627,858 0 0 0 200,000 0 0 14,967,290 94,558,947 8,237,351 1,737,573 753,461 0 5,646,476 2,141,294 170,786 2,016,368 0 2,016,368 0 0 0 2,016,368 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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