-----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, TeRr2uEfBLxth8Nc6NvA+R6nFUMyfnWUTT9wSOizNhYOPLK2BxdEu7vThUlpEdFL MKvpyWFDDDWGDiJaFms44w== 0000898080-97-000234.txt : 19971117 0000898080-97-000234.hdr.sgml : 19971117 ACCESSION NUMBER: 0000898080-97-000234 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 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: SEC FILE NUMBER: 033-06534 FILM NUMBER: 97720514 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 September 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 September 30, 1997 Common Stock, no par-value 2,000 Participating Stock, no par-value 27,900 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 as at September 30, 1997 and December 31, 1996. 2. Statements of Income and Retained Earnings for the three month periods ended September 30, 1997 and 1996 and the nine month periods ended September 30, 1997 and 1996. 3. Statements of Cash Flows for the nine month periods ended September 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)
September 30, 1997 December 31, (unaudited) 1996 ASSETS Investments $ 83,224,737 $ 66,647,930 Cash and cash equivalents 5,897,024 12,926,272 Accrued investment income 2,070,282 1,453,691 Due from Motors Insurance Corporation 4,166,156 3,158,064 Deferred acquisition costs 24,791,331 21,855,207 Prepaid expenses 34,085 0 ------------ ------------ Total Assets $120,183,615 $106,041,164 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Unearned premiums $ 95,370,255 $ 84,084,870 Loss reserves 5,206,710 4,284,304 Accrued liabilities 110,949 110,416 Total liabilities 100,687,914 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 - 27,900 shares as of September 30, 1997 and 25,400 shares as of December 31, 1996 2,092,500 1,905,000 ------------ ------------ 2,105,000 Retained Earnings 16,471,791 14,913,053 Unrealized appreciation on investments 731,410 543,521 Total Stockholders' Equity 19,495,701 17,561,574 ------------ ------------ Total Liabilities and Stockholders' Equity $120,183,615 $106,041,164 ============ ============
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996 AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996 (UNAUDITED) (Expressed in U.S. Dollars) Three Month Periods Nine Month Periods Ended September 30, Ended September 30, INCOME 1997 1996 1997 1996 Reinsurance premiums assumed $16,624,973 $11,888,323 $44,516,682 $34,912,576 Increase in unearned premiums 4,980,043 2,619,252 11,285,385 8,633,792 Premiums earned 11,644,930 9,269,071 33,231,297 26,278,784 Investment income Interest earned 1,322,355 1,696,455 3,797,281 4,055,783 Realized gains (losses) on investments 802,776 (622,769) 191,518 (591,667) Investment income 2,125,131 1,073,686 3,988,799 3,464,116 TOTAL INCOME 13,770,061 10,342,757 37,220,096 29,742,900 EXPENSES Acquisition costs 3,027,845 2,409,510 8,639,707 6,831,299 Losses paid 8,213,214 6,143,524 21,510,756 17,133,296 Increase in loss reserves 233,745 221,887 922,406 567,963 Administrative expenses - Related Parties 53,356 50,937 164,934 159,366 - Other 63,981 53,987 226,825 286,893 TOTAL EXPENSES 11,592,141 8,879,845 31,464,628 24,978,817 NET INCOME 2,177,920 1,462,912 5,755,468 4,764,083 RETAINED EARNINGS, beginning of period 14,293,871 10,759,701 14,913,053 11,517,542 LESS: DIVIDENDS 0 0 (4,196,730) (4,007,483) LESS: REDEMPTION OF PARTICIPATING STOCK 0 0 0 (51,529) RETAINED EARNINGS, end of period $16,471,791 $12,222,613 $16,471,791 $12,222,613 =========== =========== =========== ===========
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996 (UNAUDITED) (Expressed in U.S. Dollars) Nine Month Periods Ended September 30, 1997 1996 Cash flows from operating activities: Reinsurance premiums collected $ 40,389,171 $ 34,143,674 Losses and acquisition expenses paid (29,899,413) (25,067,930) Administrative expenses paid (497,066) (418,202) Investment income received 3,184,690 5,116,370 Net cash provided by operating activities 13,177,382 13,773,912 Cash flows from investing activities: Purchases of investments (229,247,631) (191,038,040) Sales and maturities of investments 213,050,231 177,877,759 Net cash invested (16,197,400) (13,160,281) Cash flows from financing activities: Proceeds from issuance of Participating Stock 187,500 23,471 Redemption of participating stock 0 0 Dividends paid (4,196,730) (4,007,483) Net cash (used in) provided by financing activities (4,009,230) 3,984,012 (Decrease) increase in cash and cash equivalents (7,029,248) (3,370,381) Cash and cash equivalents, beginning of period 12,926,272 7,093,106 Cash and cash equivalents, end of period $ 5,897,024 $ 3,722,725 ============ ============ Reconciliation of net income to net cash provided by operating activities: Net income 5,755,468 4,764,083 Realized losses(gains) on investments (191,518) 138,381 Change in: Accrued investment income (616,591) 1,512,897 Due from Motors Insurance Corporation (1,008,092) 386,486 Deferred acquisition costs (2,936,124) (2,246,071) Prepaid expenses (34,085) (625) Unearned premiums 11,285,385 8,633,793 Loss reserves 922,406 567,962 Accrued liabilities 533 17,006 ------------ Net cash provided by operating activities $ 13,177,382 $ 13,773,912 ============ ============
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 September 30, 1997, 8 new series of Shares were added bringing the total number of series issued and outstanding to 279 as of the end of the quarter. As of September 30, 1997, the share capital of the Company was $2,292,500 (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 $2,092,500 (compared with $1,905,000 as of December 31, 1996). In addition, the Company had surplus from retained earnings in the amount of $16,471,791 as of September 30, 1997 compared with $14,913,053 as of December 31, 1996. Results of Operations. During the quarter ended September 30, 1997, the Company had net income of $2,117,920, compared with net income of $1,462,912 for the quarter ended September 30, 1996. For the nine month period ended September 30, 1997, the Company had net income of $5,755,468 compared with net income of $4,764,083 for the corresponding period in 1996. As discussed below, the increase in net income for the quarter ended September 30, 1997 compared to the corresponding period of 1996 is attributable to improved investment performance which offset a reduction in underwriting income. The increase in net income for the nine month period ended September 30, 1997 compared to the corresponding period in 1996 is due to increases in both underwriting and investment income. Premiums earned increased to $11,644,930 during the quarter ended September 30, 1997 compared to $9,269,071 for the corresponding period in 1996. Expenses incurred during the quarter ended September 30, 1997 were $11,592,141 compared to $8,879,845 for the corresponding quarter of 1996. Net underwriting income for the quarter ended September 30, 1997 was $52,789 compared to $389,226 for the corresponding period in 1996. This decrease in net underwriting income was in part attributable to an increase in the ratio of losses incurred to premiums earned for the quarter ended September 30, 1997 to 72.5% from 68.7% for the corresponding period in 1996. For the nine month period ended September 30, 1997, the Company had earned premiums of $33,231,297 compared to $26,278,784 for the corresponding period of 1996. Expenses incurred during the nine month period ended September 30, 1997 were $31,464,628 compared to $24,978,817 for the corresponding period in 1996. Net underwriting income for the Company was $1,766,669 for the nine month period ended September 30, 1997 compared to $1,299,967 for the corresponding period in 1996. The loss ratio for the nine month period ended September 30, 1997 was 67.5%, compared to 67.4% for the nine month period ended September 30, 1996. Investment income for the quarter ended September 30, 1997 was $2,125,131 compared to $1,073,686 for the corresponding period of 1996. This increase was largely attributable to an increase in gains realized on the sale of investments which offset a reduction in interest income. Investment income for the nine month period ended September 30, 1997 was $3,988,799 compared to $3,464,116 for the corresponding period of 1996. During the quarter ended September 30, 1997, the Company realised gains on the sale of investment securities of $802,776, compared to losses of $622,769 during the corresponding period of 1996. As of September 30, 1997, the Company had net unrealized appreciation of $731,410 on its investments compared to unrealized appreciation of $543,521 as of December 31, 1996. For the quarter ended September 30, 1997, the Company had interest income of $1,322,355 compared to $1,696,455 for the corresponding period of 1996. For the nine month period ended September 30, 1997, the Company had interest income of $3,797,281 compared to $4,055,783 for the corresponding period of 1996. These decreases were largely attributable to reductions in portfolio yields and coupon rates on invested assets which were partially offset by an increase in funds available for investment. 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: November 10, 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 SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCES TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 83,224,737 0 0 0 0 0 83,224,737 5,897,024 0 24,791,331 120,183,615 5,206,710 95,370,255 0 0 0 0 0 200,000 19,295,701 120,183,615 33,231,297 3,797,281 191,518 0 22,433,162 8,639,707 391,759 5,755,468 0 5,755,468 0 0 0 5,755,468 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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