-----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, QqLk9H8R89GEQQVbr5p2LYoixRgY4Jc8NAJw6sZgeyU1GmbR+0V7CIkUmdk0R0IG x9oT6a2RVb1OGxWQ7q64lg== 0000898080-97-000146.txt : 19970520 0000898080-97-000146.hdr.sgml : 19970520 ACCESSION NUMBER: 0000898080-97-000146 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 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: 97606222 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 March 31, 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 March 31, 1997 Common Stock, no par-value 2,000 Participating Stock, no par-value 26,200 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, 1997 and December 31, 1996. 2. Statements of Income and Retained Earnings for the three month periods ended March 31, 1997 and 1996. 3. Statements of Cash Flows for the three month periods ended March 31, 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) March 31, 1997 December 31, (unaudited) 1996 ASSETS Investments $ 73,091,794 $ 66,647,930 Cash and cash equivalents 4,954,444 12,926,272 Accrued investment income 1,195,737 1,453,691 Due from Motors Insurance Corporation 3,195,588 3,158,064 Deferred acquisition costs 22,527,796 21,855,207 Prepaid expenses 32,045 0 ----------- ----------- Total Assets $104,997,404 $106,041,164 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Unearned premiums $ 86,670,729 $ 84,084,870 Loss reserves 4,448,206 4,284,304 Accrued liabilities 191,775 110,416 ----------- ------------ Total liabilities 91,310,710 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 - 26,200 shares as of March 31, 1997 and 25,400 shares as of December 31, 1996 1,965,000 1,905,000 --------- --------- 2,165,000 2,105,000 Retained Earnings 12,298,503 14,913,053 Unrealized (depreciation) appreciation on investments (776,809) 543,521 ------------ ------------ Total Stockholders' Equity 13,686,694 17,561,574 ------------ ------------ Total Liabilities and Stockholders' Equity $104,997,404 $106,041,164 ============ ============ MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1997 AND MARCH 31, 1996 (UNAUDITED) (Expressed in U.S. Dollars) Three Month Periods Ended March 31, 1997 1996 INCOME Reinsurance premiums assumed $12,778,711 $11,112,677 Increase in unearned premiums 2,585,859 2,875,326 ----------- ------------ Premiums earned 10,192,852 8,237,351 ----------- ------------ Investment income Interest earned 1,215,397 984,112 Realized (losses) gains on investments (566,108) 753,461 ----------- ------------ Investment income 649,289 1,737,573 ----------- ------------ TOTAL INCOME 10,842,141 9,974,924 ----------- ------------ EXPENSES Acquisition costs 2,649,915 2,141,294 Losses paid 6,287,926 5,534,349 Increase in loss reserves 163,902 112,127 Administrative expenses - Related Parties 56,663 48,791 - Other 101,555 121,995 ----------- ------------ TOTAL EXPENSES 9,259,961 7,958,556 ----------- ------------ NET INCOME 1,582,180 2,016,368 RETAINED EARNINGS, beginning of period 14,913,053 11,517,542 LESS: DIVIDENDS (4,196,730) 0 ----------- ------------ RETAINED EARNINGS, end of period $ 12,298,503 $13,533,910 =========== ============ MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1997 AND MARCH 31, 1996 (UNAUDITED) (Expressed in U.S. Dollars) Three Month Periods Ended March 31, 1997 1996 Cash flows from operating activities: Reinsurance premiums collected $12,497,461 $11,119,421 Losses and acquisition expenses paid (9,349,941) (8,091,789) Administrative expenses paid (127,667) (133,654) Investment income received 1,475,351 2,333,344 ----------- ----------- Net cash provided by operating activities 4,495,204 5,227,322 ----------- ----------- Cash flows from investing activities: Purchases of investments (103,071,845) (54,464,499) Sales and maturities of investments 94,741,543 55,895,132 ----------- ----------- Net cash invested (8,330,302) 1,430,633 ----------- ----------- Cash flows from financing activities: Proceeds from issuance of Participating Stock 60,000 37,500 Dividends paid (4,196,730) 0 ----------- ----------- Net cash (used in) provided by financing activities (4,136,730) 37,500 ----------- ----------- (Decrease) increase in cash and cash equivalents (7,971,828) 6,695,455 Cash and cash equivalents, beginning of period 12,926,272 7,093,106 ----------- ----------- Cash and cash equivalents, end of period $ 4,954,444 $13,788,561 =========== =========== Reconciliation of net income to net cash provided by operating activities: Net income 1,582,180 2,016,368 Realized losses (gains) on investments 566,108 (753,461) Change in: Accrued investment income 257,954 1,348,241 Due from Motors Insurance Corporation (37,524) 322,866 Deferred acquisition costs (672,589) (748,036) Prepaid expenses (32,045) 0 Unearned premiums 2,585,859 2,875,326 Loss reserves 163,902 112,127 Accrued liabilities 81,359 53,891 ----------- ----------- Net cash provided by operating activities $ 4,495,204 $5,227,322 =========== =========== 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 March 27, 1997, the Board of Directors authorized the payment of dividends to eligible holders of Participating Shares aggregating $4,196,730. Capital Resources. During the quarter ended March 31, 1997, 8 new series of Shares were added bringing the total number of series issued and outstanding to 262 as of the end of the quarter. As of March 31, 1997, the share capital of the Company was $2,165,000 (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 $1,965,000 (compared with $1,905,000 as of December 31, 1996). In addition, the Company had surplus from retained earnings in the amount of $12,298,503 as of March 31, 1997 compared with $14,913,053 as of December 31, 1996. The net decrease in retained earnings is attributable to the dividend paid on March 27, 1997. Results of Operations. During the quarter ended March 31, 1997, the Company had net income of $1,582,180, compared with net income of $2,016,368 for the quarter ended March 31, 1996. As discussed below, the decrease in net income for the quarter ended March 31, 1997 compared to the comparable period of 1996 is the result of realised losses on the sale of investment securities which offset increases in interest earned and underwriting income. Premiums earned increased to $10,192,852 during the quarter ended March 31, 1997 compared to $8,237,351 for the same period in 1996. Expenses incurred during the quarter ended March 31, 1997 were $9,259,961 compared to $7,958,556 for the comparable quarter of 1996. Net underwriting income for the quarter ended March 31, 1997 was $932,891 compared to $278,795 for the comparable period in 1996. The ratio of losses incurred to premiums earned for the quarter under review was 63.3% compared to 68.6% for the comparable period in 1996. Investment income for the quarter ended March 31, 1997 was $649,289 compared to $1,737,573 for the comparable period of 1996. During the quarter under review, the Company incurred losses on the sale of investment securities of $566,108, compared to gains of $753,461 during the comparable period of 1996. As of March 31, 1997, the Company had net unrealized depreciation of $776,809 on its investments compared to unrealized appreciation of $543,521 as of December 31, 1996. The losses on the sale of investment assets during the quarter under review compared to the corresponding periods in 1996 and the change in the amount of unrealized position on the portfolio as of March 31, 1997 compared to December 31, 1996 are in large part attributable to increases in long term interest rates which resulted in decreases in the market value of the Company's investment portfolio. For the quarter ended March 31, 1997 the Company had interest income of $1,215,397 compared to $984,112 for the comparable period of 1996. These increases were largely attributable to increases in the amount of assets under management combined with higher interest rates. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security-Holders At the annual meeting of shareholders of the Company held on March 27, 1997, the holder of the Common Stock re-elected five directors, William B. Noll, Louis S. Carrio, Jr., Bernard J. Buselmeier, John J. Dunn, Jr., and Peter R.P. Evelyn. The holder of Participating Shares unanimously elected the sixth director, Gregory L. Greenwood. The holder of the Common Stock also re- elected Robert E. Capstack as alternative director for Mr. Carrio. 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: May 8, 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 March 31, 1997 and is qualified in its entirety by references to such financial statements. 3-MOS DEC-31-1997 MAR-31-1997 73,091,794 0 0 0 0 0 73,091,794 4,954,444 0 22,527,796 104,997,404 4,448,206 86,670,729 0 0 0 0 0 200,000 13,486,694 104,997,404 10,192,852 1,215,397 (566,108) 0 6,451,828 2,649,915 158,218 1,582,180 0 1,582,180 0 0 0 1,582,180 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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