SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - January 30, 1996
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
Connecticut 0-13300 06-0384680
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One State Street, Hartford, Connecticut 06102-5024
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (860-722-1866)
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Item 2. Acquisition or Disposition of Assets
As previously reported, the Registrant ("HSB"), together with The Dow
Chemical Company, formed a new Company, Radian International LLC, to
provide environmental information technology, and strategic chemical
management services to industries and government worldwide. For more
detailed information concerning the transaction, see the Registrant's
report on Form 8-K filed with the Securities and Exchange Commission on
February 14, 1996.
This Form 8-K/A is being filed to include Pro Forma Financial Information
for the Registrant for the period ending December 31, 1995 in accordance
with Article 11 of Regulation S-X.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro Forma Financial Information
The following pro forma consolidated condensed financial statements of The
Hartford Steam Boiler Inspection and Insurance Company are filed herewith:
Pro Forma Condensed Consolidated Statement of Financial Position as of
December 31, 1995 (unaudited)
Pro Forma Condensed Consolidated Income Statement for the year ended
December 31, 1995 (unaudited)
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Financial
Position
Notes to Unaudited Pro Forma Condensed Consolidated Income Statement
(c) Exhibits
99.1 Contribution Agreement dated as of January 30, 1996.*
99.2 Limited Liability Company Agreement of Radian International LLC dated
as of January 1, 1996. *
*Previously filed.
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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.
THE HARTFORD STEAM BOILER
INSPECTION AND INSURANCE COMPANY
Dated: May 8, 1997 /s/ Saul L. Basch
Saul L. Basch
Senior Vice President, Chief
Financial Officer and Treasurer
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The Hartford Steam Boiler Inspection and Insurance Company
Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
The following unaudited pro forma condensed consolidated statements of income
for HSB for the year ended December 31, 1995 present condensed consolidated
operating results for HSB as if the exchange of substantially all the assets of
Radian Corporation for 40% ownership in Radian International LLC occurred as of
January 1, 1995. The accompanying unaudited pro forma condensed consolidated
statement of financial position as of December 31, 1995 gives effect to the
exchange as if it had occurred as of December 31, 1995.
The unaudited pro forma condensed financial data does not purport to represent
what HSB's financial position or results of operations actually would have been
had the transaction in fact occurred on the dates indicated, or to project HSB's
financial position or results of operations for any future period. The pro forma
adjustments ar based upon available information and certain assumptions believed
to be reasonable in the circumstances. The unaudited pro forma consolidated
financial information should be read in conjunction with the accompanying notes
thereto and the separate historical financial statements of HSB as of and for
the year ended December 31, 1995, which are contained in HSB's Form 10-K for the
year ended December 31, 1995.
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The Hartford Steam Boiler Inspection and Insurance Company
Pro Forma Consolidated Statement of Financial Position (Unaudited)
December 31, 1995
(in Millions)
HSB Pro Forma Pro Forma
Historical Adjustments HSB Consolidated
---------- ----------- ----------------
Assets:
Cash $ 9.3 (0.8)(a) $ 8.5
Short-Term
Investments (at cost) 73.8 73.8
Fixed Maturities, at fair
value (cost $247.6) 255.3 (1.1)(a) 254.2
Equity Securities, at
fair value (cost $155.0) 215.4 (1.3)(a) 214.1
------ -------
Total cash and invested
assets 553.8 550.6
Insurance Premiums Receivable 87.2 87.2
Engineering Services Receivable 68.8 (59.7)(a) 9.1
Fixed Assets 62.3 (22.6)(a) 39.7
Prepaid Acquisition Costs 34.1 34.1
Capital Lease 16.8 16.8
Investment in Radian - 91.0 (a) 91.0
Reinsurance Assets 59.5 59.5
Other Assets 89.0 (23.0)(a) 66.0
------ --------- -------
Total Assets $971.5 (17.5) $954.0
------ --------- -------
Liabilities:
Unearned Insurance Premiums $216.2 $216.2
Claims and Adjustment Expenses 190.9 190.9
Short-term Borrowings 13.4 13.4
Long-term Borrowings 25.6 25.6
Capital Lease 27.8 27.8
Deferred Income Taxes 18.9 4.5(a) 23.4
Dividends payable 11.6 11.6
Minority Interest 20.0 20.0
Other Liabilities 106.0 (22.0)(a) 84.0
------ --------- -------
Total Liabilities 630.4 (17.5) 612.9
------ --------- -------
Shareholders' Equity
Common Stock (stated value:
shares authorized 50.0;
shares issued 21.3; shares
outstanding 20.3) 10.0 10.0
Additional Paid-in Capital 33.9 33.9
Unrealized Investment Gains,
net of tax 43.9 43.9
Retained Earnings 305.1 305.1
Treasury Stock, at cost
(shares 1.0) (47.7) (47.7)
Benefit Plans (4.1) (4.1)
------- -------
Total Shareholders' Equity 341.1 341.1
------- -------
Total Liabilities and
Shareholders' Equity $971.5 $954.0
======= =======
Common Shareholders' Equity
per Share $ 16.80 $ 16.80
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The Hartford Steam Boiler Inspection and Insurance Company
Pro Forma Consolidated Income Statement (Unaudited)
For the Year Ended December 31, 1995
(in millions except per share amounts)
HSB Pro-Forma Pro-Forma
Historical Adjustments Consolidated
-------------------------------------------------
Revenues:
Insurance Premiums $ 389.1 $ 389.1
Net Engineering Services 252.1 (202.2)(a) 49.9
Net Investment Income 28.2 0.7(a) 28.9
Realized Investment Gains 2.8 2.8
------------ ------------- ------------
Total Revenues 672.2 (201.5) 470.7
------------ ------------
Expenses:
Claims and Adjustment 154.9 154.9
Policy Acquisition 78.1 78.1
Underwriting and Inspection 121.9 121.9
Net Engineering Services 229.5 (186.3)(a) 43.2
Interest 1.5 (1.1)(a) 0.4
------------ ------------- ------------
Total Expenses 585.9 (187.4) 398.5
------------ ------------- ------------
Equity in Radian - 14.0(b) 14.0
Income before Taxes 86.3 (0.1) 86.2
Income Taxes:
Current 24.3 (4.9)(a) 25.2
5.8(b)
Deferred (0.6) 0.3(a) (0.6)
(0.3)(b)
------------ ------------- ------------
Total Income Taxes 23.7 0.9 24.6
------------ ------------- ------------
Net Income $ 62.6 (1.0) $ 61.6
Net Income Per Common Share $ 3.07 $ 3.02
Average Shares Outstanding 20.4 20.4
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The Hartford Steam Boiler Inspection and Insurance Company Notes to Unaudited
Pro Forma Condensed Consolidated Statement of Financial Position
(a) Pro forma adjustments to eliminate the effects of Radian Corporation's fully
consolidated balance sheet and carry HSB's interest in Radian International LLC
using the equity method of accounting.
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The Hartford Steam Boiler Inspection and Insurance Company Notes to Unaudited
Pro Forma Condensed Consolidated Income Statement
(a) Pro forma adjustment to eliminate Radian Corporation's fully consolidated
results of operations for the period January 1 through December 31, 1995.
(b) Pro forma adjustment to record HSB's share of operating results of Radian
International LLC using the equity method of accounting. HSB's share assumes a
preference return in the first year. Radian International LLC results reflect
the combined results of Radian Corporation ($9.5 million) and Dow Environmental
Inc. ("DEI") ($1.6 million loss). Due to the level of combined earnings,
pursuant to the joint venture agreement, HSB would receive 100% of all earnings
except interest expense of which 40% would be allocated to HSB.
HSB Historical Income $62.6
DEI Loss (1.6)
Interest Allocation, net of tax .6
--
Pro Forma Net Income $61.6
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