10-Q 1 form10q.txt FORM 10-Q 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, 2001 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 333-34088 -------------------- Integon Re (Barbados), 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.) One Financial Place, Collymore Rock, St. Michael, Barbados N/A ------------------------------------------------------------------------------ (Address of principal 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, 2001 ----- ------------------------ Common Stock, no par-value 1,000,000 1 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, September 30, 2001 and December 31, 2000. 2. Statements of Operations and Retained Earnings for the three-month periods ended September 30, 2001 and 2000 and the nine-month period ended September 30, 2001 and the period from March 20, 2000 (date of incorporation) to September 30, 2000. 3. Statements of Cash Flows for the nine-month period ended September 30, 2001 and the period from March 20, 2000 (date of incorporation) to September 30, 2000. 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. 2

3 INTEGON RE (BARBADOS), LIMITED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000 AND THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2001 AND THE PERIOD FROM MARCH 20, 2000 TO SEPTEMBER 30, 2000 (UNAUDITED) (Expressed in U.S. Dollars)

4 INTEGON RE (BARBADOS), LIMITED STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2001 AND THE PERIOD FROM MARCH 20, 2000 TO SEPTEMBER 30, 2000 UNAUDITED (Expressed in U.S. Dollars)

5 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 2001 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, 2000 and September 30, 2001, 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 $43,667 and $73,162, 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. 6 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 quarter ended September 30, 2001, the Company had $7,482 of investment income compared with $15,119 of investment income for the comparable period of the prior year. For the nine month period ended September 30, 2001, and the period from March 20, 2000 (date of incorporation) to September 30, 2000, the Company's income consisted of $29,495 and $28,758, respectively. The reduction in investment income in the quarter under review compared to the comparable period in the prior year is attributable to reductions in the rate of interest paid on the Company's investments. The foregoing Management 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. 7 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 ------------------ Ronald W. Jones Vice President, Finance Signing on behalf of the Registrant, and Principal Financial Officer Dated: November 14, 2001 8

INTEGON RE BARBADOS LTD 10-Q