<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-13664
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The PMI Group, Inc. Savings and Profit-Sharing Plan
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
The PMI Group, Inc.
601 Montgomery Street
San Francisco, CA 94111
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Item 1.
REQUIRED INFORMATION
a. The financial statements of The PMI Group Inc. Savings and Profit-
Sharing Plan and Trust (also known as The PMI Group, Inc. 401(k) Plan) as of
December 31, 1999 and 1998 and for the years then ended including: the
statements of net assets available for benefits (modified cash basis), the
related statements of changes in net assets available for benefits (modified
cash basis), supplemental schedule (modified cash basis) of assets held for
investment purposes as of December 31, 1999, and supplemental schedule (modified
cash basis) of reportable transactions for the year ended December 31, 1999, are
contained in Exhibit 1 to this Annual Report.
b. Consent of Deloitte & Touche LLP, independent auditors, is contained
in Exhibit 23.1 to this Annual Report.
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PMI GROUP, INC. SAVINGS AND
PROFIT-SHARING PLAN
Date: June 29, 2000 By: /s/ John M. Lorenzen, Jr.
John M. Lorenzen, Jr.
Executive Vice President
Chief Financial Officer
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Exhibit 1
THE PMI GROUP, INC. SAVINGS AND PROFIT-SHARING PLAN
FINANCIAL STATEMENTS (MODIFIED CASH BASIS) AS OF
AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998,
SUPPLEMENTAL SCHEDULE (MODIFIED CASH BASIS) AS OF
DECEMBER 31, 1999 AND INDEPENDENT AUDITORS' REPORT
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THE PMI GROUP, INC. savings AND PROFIT-SHARING PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS (MODIFIED CASH BASIS) AS OF AND
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULE (MODIFIED CASH BASIS) AS OF
DECEMBER 31, 1999:
Schedule of Assets Held for Investment Purposes 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants of The PMI Group, Inc. Savings and Profit-Sharing Plan
and Board of Directors of The PMI Group, Inc.:
We have audited the accompanying statements of net assets available for benefits
(modified cash basis) of The PMI Group, Inc. Savings and Profit-Sharing Plan
(the "Plan") as of December 31, 1999 and 1998, and the related statements of
changes in net assets available for benefits (modified cash basis) for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As described in Note 2 to the financial statements, these financial statements
were prepared on the modified cash basis of accounting, which is a comprehensive
basis of accounting other than accounting principles generally accepted in the
United States of America.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1999 and 1998, and the changes in net assets available for benefits for the
years then ended, on the basis of accounting described in Note 2.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule (modified cash
basis) listed in the Table of Contents is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's management. Such supplemental schedule has been
subjected to the auditing procedures applied in our audit of the basic 1999
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
whole on the basis of accounting described in Note 2.
June 23, 2000
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THE PMI GROUP, INC. SAVINGS AND PROFIT-SHARING PLAN
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(MODIFIED CASH BASIS)
DECEMBER 31, 1999 AND 1998
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1999 1998
INVESTMENTS AT FAIR VALUE:
<S> <C> <C>
Mutual Funds $38,871,669 $31,862,747
PMI Stock Fund 6,166,869 2,555,027
Loan Fund 1,159,505 887,480
Cash Fund 245 -
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Total $46,198,288 $35,305,254
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</TABLE>
See accompanying notes to financial statements (modified cash basis).
<PAGE>
THE PMI GROUP, INC. SAVINGS AND PROFIT-SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS (MODIFIED CASH BASIS)
YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
ADDITIONS TO NET ASSETS
AVAILABLE FOR BENEFITS:
<S> <C> <C>
Investment income:
Net appreciation of investments $ 7,018,632 $ 3,875,415
Dividend and interest income 539,874 240,227
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Total investment income
7,558,506 4,115,642
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Contributions:
Employer 1,862,110 1,413,420
Participants 3,747,102 3,615,907
Rollovers 339,118 477,061
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Total contributions 5,948,330 5,506,388
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Total additions 13,506,836 9,622,030
DEDUCTIONS FROM NET ASSETS
AVAILABLE FOR BENEFITS -
Participant withdrawals 2,613,802 1,649,336
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INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS 10,893,034 7,972,694
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 35,305,254 27,332,560
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End of year $46,198,288 $35,305,254
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</TABLE>
See accompanying notes to financial statements (modified cash basis).
<PAGE>
THE PMI GROUP, INC. SAVINGS AND PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (MODIFIED CASH BASIS)
YEARS ENDED DECEMBER 31, 1999 AND 1998
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1. DESCRIPTION OF THE PLAN
The following description of The PMI Group, Inc. Savings and Profit-Sharing
Plan (the "Plan") is provided for general information only. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
General - The Plan was established on April 1, 1995. The Plan is a defined
contribution plan covering all full-time and regular part-time employees of
The PMI Group, Inc. (the "Company"). The Plan is available to those
employees who have completed one year of service. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
The Plan is administered by the Company. The trustee of the Plan is Merrill
Lynch Trust Company.
Contributions - The participants may contribute up to 17% of their annual
compensation, as defined, not to exceed the ERISA limit of $10,000 for 1999
and 1998. The Company's cash contributions total 25% of each eligible
participant's pre-tax contributions for the period, not to exceed 6% of each
participant's eligible pay, with an additional discretionary stock
contribution up to 50% of each eligible participant's pre-tax contributions,
not to exceed 6% of each eligible participant's annual compensation. In
2000, the Company made a $638,229 cash contribution related to the 1999 Plan
year. In addition, the Company made an additional discretionary stock
contribution of $1,684,294 in 2000 related to the 1999 Plan year. Both of
these contributions will be reported in the Plan's 2000 financial statements.
Contributions are invested, at the option of the participant, in any of the
following investment funds:
. Merrill Lynch Retirement Reserves Money Market Fund - Amounts within this
fund are invested in high quality money market securities.
. Barclays International Equity Fund - Amounts within this fund are invested
in the stocks of established companies based in Europe, Australia and the
Far East.
. Barclays S&P Midcap Stock Fund - Amounts within this fund are invested in
mid-sized companies which are expected to grow faster than larger, more
established companies.
. Barclays S&P 500 Stock Fund - Amounts within this fund are invested in
companies to match the performance of the S&P 500.
. Barclays Lifepath Funds - Amounts within these funds are invested in
stocks, bonds and money market instruments.
. Barclays Money Market Fund - Amounts within this fund are invested in high
quality money market securities.
. Founders Growth Fund - Amounts within this fund are invested in well
established high quality growth stock funds, with some assets in foreign
securities.
<PAGE>
. Templeton Foreign Fund - Amounts within this fund are invested in the
stocks of established companies based mainly in Europe.
. PIMCO Total Return Class A Fund - Amounts within this fund are invested in
high quality money market and short-term securities.
. PMI Stock Fund - Amounts within this fund are invested in common stock of
the Company.
. Sweep and Cash Accounts - Amounts within these accounts represent cash
held temporarily until allocated to a fund.
Participant Accounts - Each participant's account is credited with the
participant's and Company's prescribed contributions and an allocation of
Plan earnings. Allocations are based on participant's contributions or
account balances, as defined in the Plan. The maximum annual addition to
each participant's account, as defined, may not exceed the lesser of 25% of
the participant's compensation for the year or $30,000.
Vesting - Employer contributions, employee contributions and Plan earnings
are fully vested to all participant accounts at all times.
Participant Withdrawals - Withdrawals from the Plan are available upon
hardship in accordance with Plan provisions. Upon termination of employment,
a participant may elect to receive a lump-sum benefit. Upon attaining age 59
1/2, participants may elect to receive either a lump-sum amount equal to
their vested account balance or a portion paid in a lump-sum with the
remainder paid at a later date. At age 70 1/2, if no amount has been
previously paid out, a participant may be required to take a partial
withdrawal in accordance with Plan provisions.
Plan Termination - In the event of Plan termination, lump sum distributions
to all participants would be made in accordance with the Plan. Although it
has not expressed any intention to do so, the Company has the right under the
Plan to suspend, terminate or completely discontinue contributions.
Participant Loans - The Plan allows participants to obtain loans in an amount
not to exceed $50,000 or 50% of the participant's vested accrued benefit
under the Plan. As of December 31, 1999, 155 loans with interest rates of
8.75% - 9.5% were outstanding with maturities through November 2004. These
loans are being repaid over one year to five years at the prime interest rate
in effect on the date the loan was obtained plus 1%. The loans are fully
collateralized by the participants' remaining vested account balance.
Plan Expenses - Plan expenses are paid by the Company.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared on
the modified cash basis of accounting. Transactions are primarily recorded
upon receipt and disbursement of cash, except for investments which are
stated at current market value. Certain revenues and the related assets are
recognized when received rather than when earned, and certain expenses are
recognized when paid rather than when the obligation is incurred.
Accordingly, the accompanying financial statements are not intended to be a
presentation in conformity with accounting principles generally accepted in
the United States of America.
<PAGE>
Valuation of Investments - Investments in mutual funds are stated at market
values, determined on the basis of quotations obtained from national
securities exchanges or from the trustee. Investment transactions are
recorded on the settlement date.
Cost of Securities Sold - The cost of mutual and equity fund shares sold, as
used to calculate realized gains and losses on disposition of mutual and
equity fund shares, is determined using the average cost method.
Payment of Benefits - Distributions to participants are recorded when paid.
Accounting Estimates - The preparation of financial statements in conformity
with the modified cash basis of accounting requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of additions to and
deductions from net assets during the reporting period. Actual results could
differ from those estimates.
New Accounting Pronouncement - In 1999, the Plan adopted Statement of
Position 99-3, Accounting for and Reporting of Certain Defined Contribution
Plan Investments and Other Disclosure Matters, issued by the Accounting
Standards Executive Committee of the American Institute of Certified Public
Accountants. As a result, the Plan's financial statements do not include the
by-fund disclosures.
3. TAX STATUS
The Plan obtained its latest determination letter dated March 23, 1999, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. Management of the Company believes that the Plan is currently designed
and being operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
<PAGE>
4. UNIT AND NET ASSET VALUE
The following schedule represents the number of units and the net asset value
per unit and in total for the Mutual Funds and PMI Stock as of December 31,
1999 and 1998:
<TABLE>
<CAPTION> Value Fair
1999 Units Per Unit Value
<S> <C> <C> <C>
Merrill Lynch Retirement Reserves
Money Market Fund 2,527,331.380 $ 1.00 $ 2,527,331*
Barclays International Equity Fund 77,057.161 21.37 1,646,712
Barclays S&P Midcap Stock Fund 158,092.207 32.38 5,119,026*
Barclays S&P 500 Stock Fund 245,149.264 59.96 13,963,702*
Barclays Lifepath Income Fund 149,465.481 15.29 2,285,327
Barclays Lifepath 2010 Fund 236,208.225 18.98 4,483,232*
Barclays Lifepath 2020 Fund 91,213.785 22.38 2,041,365
Barclays Lifepath 2030 Fund 72,491.125 24.99 1,811,553
Barclays Lifepath 2040 Fund 47,343.985 28.52 1,350,250
Barclays Money Market Fund 21,172.150 1.00 21,172
Founders Growth Fund 72,930.441 23.87 1,740,850
Templeton Foreign Fund 38,765.495 11.22 435,285
PIMCO Total Return Class A Fund 146,046.871 9.90 1,445,864
PMI Stock Fund 380,201.543 16.22 6,166,869*
*Investment that represents more than 5% of the Plan's net assets as of December 31, 1999.
<CAPTION> Value Fair
1999 Units Per Unit Value
<S> <C> <C> <C>
Barclays International Equity Fund 57,629.598 $ 16.98 $ 978,551
Barclays S&P Midcap Stock Fund 151,047.170 28.30 4,274,635*
Barclays S&P 500 Stock Fund 244,044.349 47.19 11,516,453*
Barclays Lifepath 2000 Fund 164,070.051 14.54 2,385,579*
Barclays Lifepath 2010 Fund 246,505.695 17.30 4,264,548*
Barclays Lifepath 2020 Fund 86,901.955 19.56 1,699,802
Barclays Lifepath 2030 Fund 68,914.027 21.39 1,474,071
Barclays Lifepath 2040 Fund 39,944.008 23.41 935,089
Barclays Money Market Fund 1,826,476.982 1.00 1,826,477*
Founders Growth Fund 38,182.207 20.41 779,299
Templeton Foreign Fund 37,077.694 8.39 311,082
PIMCO Total Return Class A Fund 134,455.471 10.54 1,417,161
PMI Stock Fund 231,643.447 11.03 2,555,027*
*Investment that represents more than 5% of the Plan's net assets as of December 31, 1998.
</TABLE>
<PAGE>
During the years ended December 31, 1999 and 1998, the Plan's investments
(including investments purchased, sold, as well as held during the year)
appreciated (depreciated) in fair value as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Mutual funds $4,869,066 $4,824,121
PMI Stock Fund 2,149,566 (948,706)
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Total $7,018,632 $3,875,415
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</TABLE>
5. SUBSEQUENT EVENTS
Two amendments to the Plan became effective January 1, 2000. Effective for
the 2000 Plan year, the Plan will be available to all employees of the
Company on the first day of the next payroll period after the date that an
employee's period of employment commences and the maximum supplemental
Company matching contributions will increase to 75% of each eligible
participant's pre-tax contribution, not to exceed 6% of his or her annual
compensation.
******
<PAGE>
<TABLE>
<CAPTION>
THE PMI GROUP, INC. SAVINGS AND PROFIT-SHARING PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
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Current
Description of Investment Units Cost Value
<S> <C> <C> <C>
Merrill Lynch Retirement Reserves Money
Market Fund 2,527,331.380 $ 2,527,331 $ 2,527,331
Barclays International Equity Fund 77,057.610 1,337,320 1,646,712
Barclays S&P Midcap Stock Fund 158,092.207 4,466,269 5,119,026
Barclays S&P 500 Stock Fund 245,149.264 11,729,595 13,963,702
Barclays Lifepath Income Fund 149,465.481 2,174,653 2,285,327
Barclays Lifepath 2010 Fund 236,208.225 4,107,355 4,483,232
Barclays Lifepath 2020 Fund 91,213.785 1,797,940 2,041,365
Barclays Lifepath 2030 Fund 72,491.125 1,565,435 1,811,553
Barclays Lifepath 2040 Fund 47,343.985 1,129,848 1,350,250
Barclays Money Market Fund 21,172.150 21,173 21,172
Founders Growth Fund 72,930.441 1,565,261 1,740,850
Templeton Foreign Fund 38,765.495 355,664 435,285
PIMCO Total Return Class A Fund 146,046.871 1,525,426 1,445,864
PMI Stock Fund 380,201.543 4,313,845 6,166,869
Loans to participants (155 loans at 8.75% - 9.5%) 1,159,505 1,159,505
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TOTAL INVESTMENTS $39,776,620 $46,198,043
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</TABLE>
