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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10 - Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] 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 1-13664
THE PMI GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3199675
(State of Incorporation) (IRS Employer Identification No.)
601 Montgomery Street,
San Francisco, California 94111
(Address of principal executive offices) (Zip Code)
(415) 788-7878
(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 of Stock Par Value Date Number of Shares
- -------------- --------- ---- ----------------
Common Stock $0.01 06/30/99 29,837,640
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10 - Q/A
Amendment to Item 1. Interim Consolidated Financial Statements and Notes
Note 7 - Subsequent Events
and
Amendment to Cautionary Statement and Investment Considerations
Continuing Relationships With Allstate and Affiliate (IC14)
Second Quarter
1999
The PMI Group, Inc., hereby amend its Form 10-Q for the quarter ended June 30,
1999 dated and filed with the Securities and Exchange Commission on August 16,
1999 as follows:
(i) by deleting the second sentence of the second paragraph of "Item 1.
Note 7 - Subsequent Events" as follows:
"Closing of the transactions that are the subject of the Recapture
Agreement is subject to additional regulatory approvals, which are
expected to be received in 1999."
and replacing the deleted language with the following:
"Upon receipt of approval from the California Department of Insurance,
all conditions precedent to closing the transactions that are the
subject of the Recapture Agreement were satisfied. On August 13,
1999, PMI received $45.3 million from Forestview representing
qualifying assets in an amount equal to the liabilities recaptured by
PMI and final settlement of expenses for future years."; and
(ii) by deleting the first and second paragraphs of the section titled
"Continuing Relationships With Allstate and Affiliate (IC14)"; located under the
heading "Cautionary Statements and Investment Considerations" as follows:
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"In December 1993, PMI entered into a Mortgage Pool Mortgage Guaranty
Insurance Reinsurance Treaty ("Reinsurance Treaty") with Forestview
Mortgage Insurance Company ("Forestview") whereby Forestview agreed to
reinsure all liabilities (net of amounts collected from third party
reinsurers and indemnitors) in connection with PMI's mortgage pool
insurance business in exchange for premiums received. The Reinsurance
Treaty was amended in October 1994 to add a cut-through provision and
to provide that Forestview would assume PMI's obligations under the
run-off mortgage pool insurance policies after receipt of all
regulatory and policyholder approvals. The majority of Forestview's
business is currently comprised of the run-off mortgage pool business
ceded by PMI pursuant to the Reinsurance Treaty.
Pursuant to the Recapture Agreement , PMI and Forestview have agreed
to commute the Reinsurance Treaty and to recapture liabilities ceded
by PMI to Forestview under both the Reinsurance Treaty and a Mortgage
Guaranty Insurance Reinsurance Treaty ("Deep Cover Treaty") effective
December 31, 1991, and terminated as of October 27, 1994, pursuant to
a Termination Agreement. Closing of the transactions that are the
subject of the recapture agreement is subject to regulatory approval,
which are expected to be received in 1999."
Item 1. Note 7 - Subsequent Events, and the section titled "Continuing
Relationships With Allstate and Affiliate (IC14)" under the heading "Cautionary
Statement and Investment Considerations" as amended and restated in their
entirety are attached hereto. Unless otherwise stated, information in the
originally filed Form 10-Q is presented as of the original filing date, and has
not been updated in this amended filing.
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Item 1. Note 7 - Subsequent Events
On August 6, 1999, TPG announced it had completed the acquisition of MGICA,
Ltd.,("MGICA") Australia's second largest mortgage insurance company. MGICA,
Ltd., is now an indirect wholly owned subsidiary of PMI. The transaction
purchase price was US$77.6 million. TPG has also agreed to guarantee repayment
of the debt incurred to finance a portion of the purchase price. MGICA has a
Standard and Poor's ("S&P") claim paying ability rating of AA- and a Moody's
Investor Services ("Moody's") financial strength rating of A1. S&P and Moody's
have affirmed both PMI's and MGICA's ratings following the acquisition based
upon PMI's execution of a Support agreement to maintain MGICA's capital at
certain minimum levels.
On July 29, 1999, The California Department of Insurance approved the Recapture
Agreement between PMI and Forestview Mortgage Insurance Company ("Forestview").
Upon receipt of approval from the California Department of Insurance, all
conditions precedent to closing the transactions that are the subject of the
Recapture Agreement were satisfied. On August 13, 1999, PMI received $45.3
million from Forestview representing qualifying assets in an amount equal to the
liabilities recaptured by PMI and final settlement of expenses for future years.
On July 27, 1999, the Company received $30.2 million from Allstate Insurance Co,
as payment of a tax refund due to the Company under a tax sharing agreement
executed by TPG, The Allstate Corporation, The Allstate Insurance Company and
Sears, Roebuck and Co., in connection with the Company's initial public offering
in April 1995. (See Note 7 "Income Taxes" in the 1998 Annual Report to
Shareholders)
On July 21, 1999, TPG announced that its Board of Directors declared a 3-for-2
stock split in the form of a 50 percent stock dividend, and increased its cash
dividend level to 6 cents per share on a pre-split basis. The stock split will
be payable on August 16, 1999 to shareholders of record on July 30, 1999.
CONTINUING RELATIONSHIPS WITH ALLSTATE AND AFFILIATE (IC14)
On October 28, 1994, TPG entered into a Runoff Support Agreement (the "Runoff
Support Agreement") with Allstate Insurance Company ("Allstate") to replace
various capital support commitments that Allstate had previously provided to
PMI. Allstate agreed to pay claims on certain insurance policies issued by PMI
prior to October 28, 1994, if PMI's financial condition deteriorates below
specified levels, or if a third party brings a claim thereunder. Alternatively,
Allstate may make contributions directly to PMI or TPG. In the event that
Allstate makes payments or contributions under the Runoff Support Agreement
(which possibility management believes is remote), Allstate would receive
subordinated debt or preferred stock of PMI or TPG in return. No payment
obligations have arisen under the Runoff Support Agreement.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on August 19, 1999.
The PMI Group, Inc.
/s/ John M. Lorenzen
----------------------------
John M. Lorenzen, Jr.
Executive Vice President and
Chief Financial Officer
and as Authorized Signatory on
behalf of Registrant
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