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, 1995
_____________________________
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, 1995
_____ ____________________
Common Stock, no par-value 2,000
Participating Stock, no par-value 23,100
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, March 31, 1995 and December 31,
1994.
2. Statements of Income and Retained Earnings for the
three month periods ended March 31, 1995 and March
31, 1994.
3. Statements of Cash Flows for the three month
periods ended March 31, 1995 and March 31, 1994.
The accompanying financial statements as of March 31, 1995
and for the three month periods ended March 31, 1995 and 1994,
are unaudited, but in the opinion of Management, reflect all
adjustments, consisting of normal recurring accruals, which are
necessary for a fair presentation of the results for the periods
presented.
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED
BALANCE SHEETS
(Expressed in U.S. Dollars)
March 31,
1995 December 31,
(unaudited) 1994
ASSETS
Investments $43,864,591 $42,903,056
Cash and cash equivalents 8,132,943 3,303,060
Accrued investment income 1,217,527 1,559,195
Due from ceding company 2,966,098 3,315,506
Deferred acquisition costs 15,797,829 14,931,467
Prepaid expenses 1,875 0
___________ ___________
Total Assets $71,980,863 $66,012,284
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unearned premiums 60,798,606 57,468,269
Loss reserves 2,756,429 2,660,270
Accrued liabilities 227,653 118,102
___________ ___________
Total liabilities 63,782,688 60,246,641
___________ ___________
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 - 23,100 shares as of
March 31, 1995 and
22,200 shares as of
December 31, 1994 1,732,500 1,665,000
___________ ___________
1,932,500 1,865,000
Retained Earnings 6,287,149 5,796,732
Unrealized depreciation on
investments (21,474) (1,896,089)
___________ ___________
Total Stockholders' Equity 8,198,175 5,765,643
___________ ___________
Total Liabilities and
Stockholders' Equity $71,980,863 $66,012,284
___________ ___________
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED
STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE THREE
MONTH PERIODS ENDED MARCH 31, 1995 AND MARCH 31, 1994
(UNAUDITED)
(Expressed in U.S. Dollars)
Three Month Periods Ended
March 31,
1995 1994
INCOME
Reinsurance premiums assumed $9,642,726 $8,816,331
Increase in unearned premiums 3,330,337 4,244,425
__________ __________
Premiums earned 6,312,389 4,571,906
__________ __________
Investment income
Interest earned 898,990 570,692
Realized losses
on investments (529,709) (303,389)
__________ __________
Investment income -
net 369,281 267,303
__________ __________
TOTAL INCOME 6,681,670 4,839,209
__________ __________
EXPENSES
Acquisition costs 1,640,774 1,188,209
Losses paid 4,271,649 3,001,850
Increase in loss reserves 96,159 187,209
Administrative expenses
Related Parties 69,517 53,446
Other 113,154 85,677
__________ __________
TOTAL EXPENSES 6,191,253 4,516,391
NET INCOME 490,417 322,818
RETAINED EARNINGS,
beginning of period 5,796,732 6,211,978
__________ __________
RETAINED EARNINGS,
end of period 6,287,149 6,534,796
__________ __________
MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED
STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 1995 AND MARCH 31, 1994 (UNAUDITED)
(Expressed in U.S. Dollars)
Three month periods ended
March 31,
1995 1994
Cash flows from operating activities:
Reinsurance premiums collected $ 9,853,097 $7,062,145
Losses and underwriting
expenses paid (6,618,043) (4,730,167)
Administrative expenses paid (97,698) (95,553)
Investment income received 1,241,656 530,825
__________ ___________
Net cash provided by
operating activities 4,379,012 2,767,250
__________ ___________
Cash flows from investing activities:
Purchases of marketable securities (38,556,681) (25,508,046)
Sales and maturities of
marketable securities 38,940,052 19,223,793
__________ ___________
Net cash invested 383,371 (6,284,253)
__________ ___________
Cash flows from financing activities:
Proceeds from issuance of
Participating stock 67,500 75,000
__________ ___________
Net cash provided by financing
activities 67,500 75,000
__________ ___________
Increase (decrease)
in cash and cash equivalents 4,829,883 (3,442,003)
Cash and cash equivalents, beginning
of period 3,303,060 6,788,771
__________ ___________
Cash and cash equivalents, end
of period $8,132,943 $ 3,346,768
__________ ___________
Reconciliation of net income to net cash
provided by operating activities:
Net income 490,417 322,818
Realized losses on investments 529,709 303,389
Change in:
Accrued investment income 341,668 (39,867)
Due from ceding company 349,408 (1,203,180)
Deferred acquisition costs (866,362) (1,104,061)
Prepaid expenses (1,875) (1,875)
Unearned premiums 3,330,337 4,244,425
Loss reserves 96,159 187,209
Accrued liabilities 109,551 58,392
__________ ___________
Net cash provided by
operating activities $4,379,012 $ 2,767,250
__________ ___________
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 6, 1995, the Board of Directors authorized the payment
of dividends to eligible holders of Participating Shares
aggregating $1,188,614.
Capital Resources. As of March 31, 1995, the share capital of
the Company was $1,932,500 (compared with $1,865,000 as of
December 31, 1994) comprised of paid in capital with respect to
the Common Stock of $200,000 and paid in capital with respect to
Participating Shares of $1,732,500 (compared with $1,665,000 as
of December 31, 1994). In addition, the Company had surplus from
retained earnings in the amount of $6,287,149 as of March 31,
1995 compared with $5,796,732 as of December 31, 1994.
Results of Operations. During the quarter ended March 31, 1995,
the Company had net income of $490,417, compared to net income of
$322,818 for the quarter ended March 31, 1994.
Net Premium volume continues to increase as additional
participants are added to the program. During the quarter ended
March 31, 1995, 9 new series of Shares were added bringing the
total number of series issued and outstanding to 231 as of the
end of the quarter. Premiums earned during the quarter ended
March 31, 1995 increased by $1,740,483 over the comparable period
of 1994 to a total of $6,312,389.
Expenses incurred during the quarter ended March 31, 1995 were
$6,191,253 compared to $4,516,391 for the comparable quarter of
1994. Net underwriting income for the quarter ended March 31,
1995 was $121,136 compared to $55,515 for the comparable period
in 1994. The ratio of losses incurred to premiums earned for the
quarter was 69.2% as compared to 69.8% for the comparable period
in 1994.
Investment income for the quarter was $369,281 compared to
$267,303 for the quarter ended March 31, 1994. Interest income
increased from $570,692 for the quarter ended March 31, 1994 to
$898,990 for the quarter ended March 31, 1995. The increase in
interest income was partially offset by an increase in losses
realized on the sale of investments which amounted to $529,709
for the quarter compared to $303,389 for the comparable quarter
in 1994. These losses were largely attributable to the sale of
investment securities the value of which had been adversely
affected by increases in prevailing interest rates. Unrealized
losses on investment securities decreased from $1,896,089 as of
December 31, 1994 to $21,474 as of March 31, 1995 due to sales of
securities and decreases in long term interest rates on U.S.
dollar denominated investments.
Due to continuous declines in long term interest rates, the
Company realized gains of $76,365 on sales of investment
securities in April 1995. At April 30, 1995, the Company had
unrealized gains of $277,697 on its investment securities
compared to unrealized losses of $21,474 at March 31, 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 11, 1995
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
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, 1995 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<DEBT-HELD-FOR-SALE> 43,864,591
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 43,864,591
<CASH> 8,132,943
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 15,797,829
<TOTAL-ASSETS> 71,980,863
<POLICY-LOSSES> 2,756,429
<UNEARNED-PREMIUMS> 60,798,606
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
<COMMON> 200,000
0
0
<OTHER-SE> 7,998,175
<TOTAL-LIABILITY-AND-EQUITY> 71,980,863
6,312,389
<INVESTMENT-INCOME> 898,990
<INVESTMENT-GAINS> (529,709)
<OTHER-INCOME> 0
<BENEFITS> 4,367,808
<UNDERWRITING-AMORTIZATION> 1,640,774
<UNDERWRITING-OTHER> 182,671
<INCOME-PRETAX> 490,417
<INCOME-TAX> 0
<INCOME-CONTINUING> 490,417
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 490,417
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>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.
</FN>
</TABLE>
