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
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
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.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<DEBT-HELD-FOR-SALE> 57,157,852
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 57,157,852
<CASH> 13,788,561
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 19,655,241
<TOTAL-ASSETS> 94,558,947
<POLICY-LOSSES> 3,592,461
<UNEARNED-PREMIUMS> 75,627,858
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
200,000
0
<COMMON> 0
<OTHER-SE> 14,967,290
<TOTAL-LIABILITY-AND-EQUITY> 94,558,947
8,237,351
<INVESTMENT-INCOME> 1,737,573
<INVESTMENT-GAINS> 753,461
<OTHER-INCOME> 0
<BENEFITS> 5,646,476
<UNDERWRITING-AMORTIZATION> 2,141,294
<UNDERWRITING-OTHER> 170,786
<INCOME-PRETAX> 2,016,368
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,016,368
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,016,368
<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>
