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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MAY 22, 1996
FRONTIER INSURANCE GROUP, INC.
(Exact name of registrant as specified in charter)
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<S> <C> <C>
DELAWARE 0-15022 14-1681606
(State or other juris- (Commission (IRS Employer
diction of incorp- File Number) Identification No.)
oration)
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195 LAKE LOUISE MARIE ROAD, ROCK HILL, NEW YORK 12775-8000
(Address of principal executive Offices) (Zip Code)
Registrant's telephone number, including area code: (914) 796-2100
NOT APPLICABLE
(Former name or former address, if changed since last report)
Page 1 of 6 Pages
Exhibit Index Located on Page 2
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information.
The pro forma financial information has been updated as at June
30, 1996 and for the six months then ended.
(c) Exhibits.
10.17 Frontier Insurance Group, Inc. and Subsidiaries' Unaudited
Pro Forma Condensed Consolidated Statements of Income for
the Six Months Ended June 30, 1996, and with the related
Notes thereto.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has dully caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRONTIER INSURANCE GROUP, INC.
(Registrant)
By:/s/ Mark H. Mishler
______________________________
Mark H. Mishler
Vice President of Finance and Treasurer
Dated: October 7, 1996
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FRONTIER INSURANCE GROUP, INC. FORM 8-K/A-1 DATED MAY 22, 1996 EXHIBIT 10-17
FRONTIER INSURANCE GROUP, INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
The following unaudited Pro Forma Condensed Consolidated Financial Statements of
Frontier Insurance Group, Inc. and Subsidiaries, ("Frontier" or the "Company")
give effect to the Company's acquisition of United Capital Holding Company
("UCHC') (the "Acquisition") as more fully described in the accompanying Notes
to Unaudited Pro Forma Condensed Consolidated Financial Statements. The
unaudited Pro Forma Condensed Consolidated Financial Statements reflect the
Company's preliminary purchase price allocation and is subject to revision as
information becomes available. Management believes that the preliminary
allocation of purchase price is not expected to differ materially from the final
allocation. The Pro Forma Condensed Consolidated Statements of Income have been
prepared as if the Acquisition had been consummated on January 1, 1995. The Pro
Forma Condensed Consolidated Balance Sheet has been prepared as if the
Acquisition had been consummated at June 30, 1996. Such Pro Forma Condensed
Consolidated Financial Statements are not necessarily indicative of the results
of future operations, nor of the results of historical operations had the
Acquisition been consummated on such dates.
The unaudited Pro Forma Condensed Consolidated Financial Statements should be
read in conjunction with: the accompanying Notes to Unaudited Pro Forma
Condensed Consolidated Financial Statements; Frontier's Annual Report on Form
10-K for the year ended December 31, 1995; Frontier's Quarterly Report on Form
10-Q for the six months ended June 30, 1996; UCHC's audited consolidated
financial statements for the year ended December 31, 1995 and UCHC's unaudited
interim consolidated financial statements for the six months ended June 30,
1996.
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FRONTIER INSURANCE GROUP, INC. AND SUBSIDIARIES FORM 8-K/A-1 Exhibit 10-17
FRONTIER INSURANCE GROUP, INC., AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Three Months Ended June 30, 1996
(Unaudited)
(dollar amounts in thousands)
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Historical For the six months Pro Forma The Company
Ended June 30, 1996 Adjustments Pro Forma
REVENUES: The Company UCHC Debit Credit Combined
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Premiums written ............................. $ 159,826 $ 11,379 $ 171,205
Premiums ceded ............................... (26,474) (7,552) ______ ______ (34,026
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NET PREMIUMS WRITTEN ................. 133,352 3,827 0 0 137,179
Increase in unearned premiums ................ (8,910) (597) ______ (9,507
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NET PREMIUMS EARNED .................. 124,442 3,230 0 0 127,672
Net Investment Income ........................ 16,374 3,371 $ 2,184(a) 17,561
Realized capital gains ....................... 1,305 647 ______ ______ 1,952
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TOTAL NET INVESTMENT INCOME .......... 17,679 4,018 2,184 0 19,513
Gross claims adjusting income ................ 37 0 ______ ______ 37
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TOTAL REVENUES ....................... 142,158 7,248 2,184 0 147,222
EXPENSES:
Losses ....................................... 56,916 366 57,282
Loss adjustment expenses ..................... 18,728 1,244 19,972
27,052
Amortization of policy acquisition costs ..... 27,711 (659 12,914
Underwriting and other expenses .............. 11,638 1,077 199(b) 880
Interest expense ............................. 880 0
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TOTAL EXPENSES ............................... 115,873 2,028 199 0 118,100
INCOME BEFORE TAXES .......................... 26,285 5,220 2,383 0 29,122
Income taxes:
State ...................................... 547 0 547
Federal .................................... 6,705 1,948 _____ $716 (c) 7,937
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TOTAL INCOME TAXES ................... 7,252 1,948 0 716 8,484
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NET INCOME ................................ $ 19,033 $ 3,272 $ 2,383 $ 716 $ 20,638
========= ========= ========= ========= =========
PER SHARE DATA
Net income per share ....................... $ 1.33 $ 1.44
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FRONTIER INSURANCE GROUP., INC., AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following pro forma adjustments have been applied to the historical
condensed consolidated statements of income of the Company and UCHC for the
six-month period ended June 30, 1996, to give effect to the Acquisition as if it
had occurred on January 1, 1996:
(a) Net investment income has been decreased by $2.2 million to reflect the
reduction of investment income from the sale of fixed maturities to fund the
purchase of the acquisition ($30.9 million), and from the sale of short-term
investments and fixed maturities for the payment of a $49.8 million dividend
from UCHC to Capsure prior to the closing. The yield assumed on the two
transactions was 6.4% and 6.9%, respectively.
(b) Underwriting and other expense has been increased by $0.2 million to reflect
the amortization of the excess cost over net assets acquired arising from the
acquisition.
(c) Income taxes have been decreased by $0.7 million to reflect the net tax
effect of the pro forma adjustments.
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