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 June 30, 2002
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Transition report pursuant to Section 13 or 15(d) of the Securities
- ---- Exchange Act of 1934
For the transition period from to
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Commission File Number 333-34088
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Integon Re (Barbados), Limited
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(Exact name of registrant as specified in its charter)
Barbados N/A
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Financial Place, Collymore Rock, St. Michael, Barbados N/A
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(Address of principal executive offices) (Zip Code)
(246) 436-4895
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(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
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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 June 30, 2002
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Common Stock, no par-value 1,000,000
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 I. FINANCIAL INFORMATION
Item 1. Financial Statements
1. Balance Sheets, June 30, 2002 and December 31, 2001.
2. Statements of Operations and Retained Earnings for the
three-month periods ended June 30, 2002 and 2001 and six-month
periods ended June 30, 2002 and 2001.
3. Statements of Cash Flows for the six-month periods ended June 30,
2002 and 2001.
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. The
information furnished for the three-month and six-month periods ended June 30,
2002 may not be indicative of results for the full year.
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INTEGON RE (BARBADOS), LIMITED
BALANCE SHEETS
(Expressed in U.S. Dollars)
June 30, 2002 December 31, 2001
(unaudited) (Audited)
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ASSETS
Investments $ 1,001,677 $ 1,000,000
Cash and cash equivalents 476 12,372
Accrued investment income 165 86
Due from shareholder 78,903 63,804
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Total Assets $ 1,081,221 $ 1,076,262
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STOCKHOLDERS' EQUITY
Share Capital
Common Stock-no par value;
Authorized - unlimited
shares; issued and
outstanding - 1,000,000
shares at June 30, 2002
and December 31, 2001 $ 1,000,000 $ 1,000,000
Retained Earnings 81,221 76,262
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Total Stockholders' Equity $ 1,081,221 $ 1,076,262
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INTEGON RE (BARBADOS), LIMITED
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE THREE
MONTH PERIODS ENDED JUNE 30, 2002 AND 2001
AND THE SIX MONTH PERIODS ENDED JUNE 30, 2002 AND 2001
(UNAUDITED)
(Expressed in U.S. Dollars)
Three Month Periods Six Month Periods
Ended June 30, Ended June 30,
2002 2001 2002 2001
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INCOME
Interest earned $ 2,589 $ 9,691 $ 4,959 $ 22,013
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TOTAL INCOME 2,589 9,691 4,959 22,013
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RETAINED EARNINGS,
beginning of
period 78,632 55,989 76,262 43,667
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RETAINED EARNINGS, $ 81,221 $ 65,680 $ 81,221 $ 65,680
end of period ========== ========== ========== ==========
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INTEGON RE (BARBADOS), LIMITED
STATEMENTS OF CASH FLOWS FOR THE SIX MONTH PERIODS ENDED
JUNE 30, 2002 AND 2001
UNAUDITED
(Expressed in U.S. Dollars)
Six Month Periods
Ended June 30,
2002 2001
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Cash flows from operating activities:
Administrative expenses paid and
recoverable $ (15,099) $ (18,670)
Investment income received 4,880 15,956
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Net cash used in operating activities (10,219) (2,714)
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Decrease in cash and cash equivalents (10,219) (2,714)
Cash and cash equivalents,
beginning of period 1,012,372 1,005,501
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Cash and cash equivalents,
end of period $ 1,002,153 $ 1,002,787
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Reconciliation of net income to net cash
provided by operating activities:
Net income $ 4,959 $ 22,013
Change in:
Accrued investment income (79) (6,057)
Due from shareholder (15,099) (18,670)
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Net cash used in operating activities $ (10,219) $ (2,714)
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Item 2. Management's Discussion And Analysis of Financial Condition And Results
of Operations
Liquidity
The Company was incorporated on March 20, 2000 and as of the date of this
report, has not commenced operations. When it does, its liquidity requirements
will relate to payment of insurance losses, administrative expenses, and
dividends. Premiums generated by the Company's reinsurance business, combined
with investment earnings plus proceeds from the sale of the Company's
Participating Shares, will be its principal sources of funds. The Company
believes that such funds will be sufficient to meet its liquidity requirements
in 2002 and in future years to which its reinsurance liabilities will extend. No
capital expenditures are expected during the next few years.
Capital Resources
The Company's capitalization on December 31, 2001 and June 30, 2002, consisted
of paid in capital with respect to the Common Stock of $1,000,000, and earnings
retained for use in its business in the amount of $76,262 and $81,221,
respectively. In the future, the Company's capitalization will also include paid
in capital with respect to the Participating Shares which will range from
$125,000 to $7,500,000 (depending on the number of Participating Shares sold).
Barbados insurance law requires that the Company maintain a minimum
capitalization of $125,000 and, in addition, that the recorded value of the
Company's assets exceed its liabilities by: (a) $125,000 where the Company's
earned premium in the preceding financial year did not exceed $750,000; (b) an
amount equal to 20% of the Company's earned premium for the preceding financial
year, where such income exceeded $750,000 but did not exceed $5,000,000; and
(c) an amount equal to the aggregate of $1,000,000 and 10% of the amount by
which the Company's earned premium for the preceding financial year exceeded
$5,000,000. If the Company's net assets are less than mandated by Barbados law,
the Company has the right to reduce the business related to a Subsidiary Capital
Account by retrocession or any other means to the extent necessary to permit the
Subsidiary Capital Account to meet its pro rata share of the Company's required
capital and surplus.
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Results of Operations
Because the Company has not commenced operations as of the date of this report,
the Company's only income since incorporation has consisted of investment income
that the Company earned on paid in capital with respect to the Common Stock. For
the three and six-month periods ended June 30, 2002, the Company had investment
income of $2,589 and $4,959, respectively, compared with $9,691 and $22,013 of
investment income for the comparable periods of the prior year. The reduction in
investment income in the quarter and six-month periods under review compared to
the comparable periods of the prior year is attributable to reductions in the
rate of interest received on the Company's investments.
The foregoing Management's Discussion and Analysis of Financial Condition and
Results of Operations contains various forward looking statements within the
meaning of applicable federal securities laws and are based upon the Company's
current expectations and assumptions concerning future events, which are subject
to a number of risks and uncertainties that could cause actual results to differ
materially from those anticipated.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
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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.
INTEGON RE (BARBADOS), LIMITED (Registrant)
By: s/Ronald W. Jones
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Ronald W. Jones
Vice President, Finance
Signing on behalf of
the Registrant, and
Principal Financial Officer
Dated: July 30, 2002
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