-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BPdiDMVthOyeQ97xWkRThGTdieqN49ZevFhGhWIUKlASIVujsZ5qBnL6RcxRx7ap 3fGrANQc1kKg4WwkRLylqQ== 0000950137-06-001893.txt : 20060215 0000950137-06-001893.hdr.sgml : 20060215 20060215123602 ACCESSION NUMBER: 0000950137-06-001893 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20060104 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060215 DATE AS OF CHANGE: 20060215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROASSURANCE CORP CENTRAL INDEX KEY: 0001127703 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 631261433 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-16533 FILM NUMBER: 06620852 BUSINESS ADDRESS: STREET 1: 100 BROOKWOOD PLACE CITY: BIRMINGHAM STATE: AL ZIP: 35209 BUSINESS PHONE: 2058774400 8-K/A 1 c02509e8vkza.txt AMENDMENT TO CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 4, 2006 ProAssurance Corporation (Exact name of registrant as specified in its charter) Delaware 001-16533 63-1261433 (State of Incorporation) (Commission File No.) (IRS Employer I.D. No.)
100 Brookwood Place, Birmingham, Alabama 35209 (Address of Principal Executive Office) (Zip code)
Registrant's telephone number, including area code: (205) 877-4400 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [X] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-(c) under the Exchange Act (17CFR 240.13e-(c)) Item 2.01. Completion of Acquisition or Disposition of Assets. On January 4, 2006, ProAssurance Corporation ("ProAssurance") completed the sale of MEEMIC Insurance Company ("MEEMIC") and MEEMIC Insurance Services Corporation (together with MEEMIC, the "Companies") to Motors Insurance Company, a wholly-owned subsidiary of GMAC Insurance Holdings, Inc. (the "Buyer"). The transaction is worth $400 million to ProAssurance, before transaction expenses. Approximately $325 million was paid by the Buyer at closing and approximately $75 million was retained in MEEMIC's parent company, MEEMIC Holdings, Inc., which remains a part of ProAssurance and was renamed MEMH Holdings, Inc. as part of the transaction. Substantially all of the assets retained at MEMH Holdings are cash and investment securities. Item 9.01. Financial Statements and Exhibits. (a) Pro Forma Financial Information. The following unaudited pro forma condensed combined financial statements give effect to the sale and include Pro Forma adjustments which are described in the notes to these statements. This amendment on Form 8-K/A is filed to include unaudited pro forma condensed combined financial statements to reflect the historical results of continuing operations for ProAssurance for the year ended December 31, 2003 and 2002. The unaudited pro forma condensed combined balance sheet presents the financial position of ProAssurance as of September 30, 2005, assuming that the sale had occurred as of that date. Such pro forma information is based on the historical balance sheet of ProAssurance at September 30, 2005. The unaudited pro forma condensed combined statements of income reflect the historical results of continuing operations for ProAssurance for the periods presented. As required by Rule 11-02 of Regulation S-X, the unaudited pro forma condensed combined statements of income have been prepared assuming that the sale occurred as of the beginning of the period presented. ProAssurance believes that the assumptions used in preparing the unaudited pro forma financial statements provide a reasonable basis for presenting all of the significant effects of the sale and that the pro forma adjustments give effect to those assumptions in the unaudited pro forma condensed combined financial statements. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations or financial position which would have been achieved had this transaction been completed as of the date indicated, nor is it necessarily indicative of ProAssurance's future results of operations or financial position. The unaudited pro form condensed combined financial statements should be read in conjunction with the historical financial statements of ProAssurance, including the related notes thereto. 2 ProAssurance Corporation Unaudited Pro Forma Condensed Consolidated Balance Sheet (in thousands) Nine months ended September 30, 2005
ProAssurance MEEMIC Pro Forma Historical Companies Adjustments ProForma ------------ ---------- ----------- ------------ Assets Investments: Fixed maturities available for sale, at fair value $2,613,232 $(300,199) A $ 25,000 B $2,338,033 Equity securities available for sale, at fair value 19,385 (6,138) A 13,247 Equity securities, trading portfolio, at fair value 4,824 4,824 Real estate, net 25,383 (8,548) A 16,835 Short-term investments 150,404 150,404 Business owned life insurance 55,856 55,856 Other 46,142 46,142 ---------- ---------- Total investments 2,915,226 (314,885) 25,000 2,625,341 Cash and cash equivalents 30,137 (12,660) A 309,448 C 326,925 Premiums and accounts receivable, net 128,815 (16,030) A 112,785 Receivable from reinsurers on unpaid losses and loss adjustment expenses 465,333 (141,792) A 323,541 Prepaid reinsurance premiums 19,629 19,629 Deferred taxes 114,041 (11,527) A 102,514 Other assets 159,907 (32,964) A 126,943 ---------- --------- ---------- Total assets $3,833,088 $(529,858) $334,448 $3,637,678 ========== ========= ======== ========== Liabilities and Stockholders' Equity Liabilities: Policy liabilities and accruals: Reserve for losses and loss adjustment expenses $2,394,631 $(219,001) A $2,175,630 Unearned premiums 353,291 (67,932) A 285,359 Reinsurance premiums payable 77,148 (460) A 76,688 ---------- --------- ---------- Total policy liabilities 2,825,070 (287,393) 2,537,677 Other liabilities 102,380 (19,219) 83,161 Long-term debt 167,166 167,166 ---------- --------- ---------- Total liabilities 3,094,616 (306,612) 2,788,004 Commitments and Contingencies Stockholders' equity: Common stock 312 312 Additional paid-in capital 387,163 387,163 Accumulated other comprehensive (loss) income (114) (1,252) D (1,366) Retained earnings 351,167 112,454 E 463,621 ---------- --------- -------- ---------- 738,528 (1,252) 112,454 849,730 Less treasury stock, at cost (56) (56) ---------- --------- -------- ---------- Total stockholders' equity 738,472 (1,252) 112,454 849,674 ---------- --------- -------- ---------- Total liabilities and stockholders' equity $3,833,088 $(307,864) $112,454 $3,637,678 ========== ========= ======== ==========
3 ProAssurance Corporation Unaudited Pro Forma Condensed Consolidated Income Statement Nine months ended September 30, 2005 (in thousands except per share data)
MEEMIC ProAssurance Companies Historical (F) Pro Forma ------------ --------- --------- Revenues: Net premiums earned $536,639 $(141,082) $395,557 Net investment income 79,646 (9,337) 70,309 Net realized investment gains (losses) 1,761 (446) 1,315 Other income 4,612 (1,925) 2,687 -------- --------- -------- Total revenues 622,658 (152,790) 469,868 Expenses: Net losses and loss Adjustment expenses 412,931 (81,458) 331,473 Underwriting, acquisition and insurance expenses 94,021 (33,430) 60,591 Interest expense 6,457 6,457 -------- --------- -------- Total expenses 513,409 (114,888) 398,521 -------- --------- -------- Income from continuing operations before income taxes 109,249 (37,902) 71,347 Income taxes 30,465 (12,242) 18,223 -------- --------- -------- Income from continuing operations $ 78,784 $ (25,660) $ 53,124 ======== ========= ======== Earnings per share--from continuing operations: Basic 2.65 1.79 ======== ======== Diluted 2.49 1.70 ======== ======== Weighted average shares outstanding: Basic 29,700 29,700 ======== ======== Diluted 32,546 32,546 ======== ========
4 ProAssurance Corporation Unaudited Pro Forma Condensed Consolidated Income Statement Year ended December 31, 2004 (in thousands except per share data)
MEEMIC ProAssurance Companies Historical (F) Pro Forma ------------ --------- --------- Revenues: Net premiums earned $696,020 $(183,365) $512,655 Net investment income 87,225 (10,879) 76,346 Net realized investment gains (losses) 7,609 (37) 7,572 Other income 3,699 (2,358) 1,341 -------- --------- -------- Total revenues 794,553 (196,639) 597,914 Expenses: Net losses and loss adjustment expenses 572,881 (112,444) 460,437 Underwriting, acquisition and insurance expenses 117,689 (40,548) 77,141 Interest expense 6,515 6,515 -------- --------- -------- Total expenses 697,085 (152,992) 544,093 -------- --------- -------- Income from continuing operations before income taxes 97,468 (43,647) 53,821 Income taxes 24,657 (13,879) 10,778 -------- --------- -------- Income from continuing operations $ 72,811 $ (29,768) $ 43,043 ======== ========= ======== Earnings per share--from continuing operations: Basic 2.50 1.48 ======== ======== Diluted 2.37 1.44 ======== ======== Weighted average shares outstanding: Basic 29,164 29,164 ======== ======== Diluted 31,984 31,984 ======== ========
5 PROASSURANCE CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT YEAR ENDED DECEMBER 31, 2003 (IN THOUSANDS EXCEPT PER SHARE DATA)
MEEMIC PROASSURANCE COMPANIES HISTORICAL (F) PRO FORMA ------------ --------- --------- Revenues: Net premiums earned $623,514 $(170,268) $453,246 Net investment income 73,619 (10,253) 63,366 Net realized investment gains (losses) 5,992 (134) 5,858 Other income 6,515 (2,055) 4,460 -------- --------- -------- Total revenues 709,640 (182,710) 526,930 Expenses: Losses and loss adjustment expenses 576,043 (161,215) 414,828 Reinsurance recoveries (24,667) 49,207 24,540 -------- --------- -------- Net losses and loss adjustment expenses 551,376 (112,008) 439,368 Underwriting, acquisition and insurance expenses 104,216 (37,578) 66,638 Loss on early extinguishment of debt 305 305 Interest expense 3,409 -- 3,409 -------- --------- -------- Total expenses 659,306 (149,586) 509,720 -------- --------- -------- Income from continuing operations before income taxes and minority interest 50,334 (33,124) 17,210 Income taxes 11,450 (9,585) 1,865 Minority Interest (181) 181 0 -------- --------- -------- Income (loss) from continuing operations $ 38,703 $ (23,358) $ 15,345 ======== ========= ======== Earnings per share--from continuing operations: Basic 1.34 0.53 ======== ======== Diluted 1.32 0.53 ======== ======== Weighted average shares outstanding: Basic 28,956 28,956 ======== ======== Diluted 30,389 29,144 ======== ========
6 PROASSURANCE CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT YEAR ENDED DECEMBER 31, 2002 (IN THOUSANDS EXCEPT PER SHARE DATA)
MEEMIC PROASSURANCE COMPANIES HISTORICAL (F) PRO FORMA ------------ --------- --------- Revenues: Net premiums earned $ 477,408 $(149,763) $ 327,645 Net investment income 76,918 (10,071) 66,847 Net realized investment gains (losses) (5,306) (793) (6,099) Other income 6,747 (1,787) 4,960 --------- --------- --------- Total revenues 555,767 (162,414) 393,353 Expenses: Losses and loss adjustment expenses 569,099 (108,810) 460,289 Reinsurance recoveries (121,070) 12,101 (108,969) --------- --------- --------- Net losses and loss adjustment expenses 448,029 (96,709) 351,320 Underwriting, acquisition and insurance expenses 91,253 (34,640) 56,613 Interest expense 2,875 -- 2,875 --------- --------- --------- Total expenses 542,157 (131,349) 410,808 --------- --------- --------- Income from continuing operations before income taxes and minority interest 13,610 (31,065) (17,455) Income taxes (188) (9,167) (9,355) Minority Interest (3,285) 3,285 0 --------- --------- --------- Income(Loss) from continuing operations $ 10,513 $ (18,613) $ (8,100) ========= ========= ========= Earnings per share--from continuing operations: Basic 0.40 (0.31) ========= ========= Diluted 0.39 (0.31) ========= ========= Weighted average shares outstanding: Basic 26,231 26,231 ========= ========= Diluted 26,254 26,254 ========= =========
7 Note 1 - Basis of Presentation The unaudited pro forma balance sheet presents the financial position of ProAssurance as of September 30, 2005 assuming that the transaction occurred as of that date. Such pro forma information is based on the historical balance sheet of ProAssurance as of September 30, 2005 adjusted for the expected effects of the sale. The unaudited pro forma condensed combined statements of income reflect the historical results of continuing operations for ProAssurance for the periods presented. As required by Rule 11-02 of Regulation S-X, the unaudited pro forma condensed combined statements of income have been prepared assuming that the sale occurred as of the beginning of the period presented. However, the pro forma adjustments do not presume any increase in investment earnings due to investment of cash proceeds from the sale. The following is a summary of the estimated results of the sales transaction. Proceeds from sale: Fixed maturity securities $ 25,000 Cash 375,000 -------- 400,000 Less: Expenses of sale, principally professional fees 5,000 -------- Net before-tax proceeds from sale 395,000 Less: Carrying value of net assets sold 221,994 -------- Estimated before-tax gain on sale 173,006 Estimated tax effect of transaction (60,552) -------- Estimated after-tax gain on sale $112,454 ========
Note 2--Pro Forma Adjustments A) Reflects reduction for amounts related to MEEMIC that were included in the ProAssurance historical balance sheet. B) Reflects the portion of the proceeds received in the form of fixed maturity securities, at fair value. C) Reflects net proceeds from sale less the expected tax effect of the transaction and proceeds received in the form of fixed maturity securities as described in B, above. D) Reflects reversal of accumulated other comprehensive income recognized related to investment securities held by MEEMIC. E) Reflects the expected after-tax gain on the sale, the calculation of which is presented in Note 1. F) Reflects reduction for MEEMIC operating results included in ProAssurance's historical income statements for the periods shown. 8 (b) Exhibits None On December 8, 2005, ProAssurance Corporation ("ProAssurance") announced that it entered into a definitive agreement that provides for Physicians Insurance Company of Wisconsin ("PIC Wisconsin") to be merged into ProAssurance in a proposed all-stock transaction. This report is also being filed as a Rule 425 prospectus with respect to this proposed transaction. ProAssurance will file with the SEC a registration statement and a proxy statement-prospectus and other relevant documents concerning the proposed transaction with PIC Wisconsin. Shareholders of PIC Wisconsin are urged to read the registration statement and the proxy statement-prospectus when they become available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, as they will contain important information. You will be able to obtain a free copy of the proxy statement-prospectus, as well as other filings containing information about ProAssurance and PIC Wisconsin, at the SEC's internet site (http://www.sec.gov). Copies of the proxy statement-prospectus can be obtained, without charge, by directing a request to Frank B. O'Neil, Senior Vice President, Corporation Communications, ProAssurance Corporation, 100 Brookwood Place, Birmingham, Alabama 35209, telephone (205) 877-4461. Caution Regarding Forward Looking Statements This report contains historical information as well as forward-looking statements that are based upon our estimates and anticipation of future events that are subject to certain risks and uncertainties that could cause actual results to vary materially from the expected results described in the forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "hopeful," "intend," "may," "optimistic," "preliminary," "project," "should," "will," and similar expressions are intended to identify these forward-looking statements. There are numerous important factors that could cause our actual results to differ materially from those in the forward-looking statements. Thus, sentences and phrases that we use to convey our view of future events and trends are expressly designated as "forward-looking statements" as are sections of this news release clearly identified as giving our outlook on future business. The principal risk factors that may cause actual results to differ materially from those expressed in the forward-looking statements are described in various documents we file with the Securities and Exchange Commission, including Form 10K/A for the year ended December 31, 2004 and Form 10Q for the most recent quarter. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, the following important factors that could affect the actual outcome of future events. 9 We urge you not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and wish to advise readers that the factors listed above could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to periods in any current statements. We do not undertake and specifically decline any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 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 hereunto duly authorized. Date: February 15, 2006 PROASSURANCE CORPORATION By: /s/ Edward L. Rand, Jr. ------------------------ Edward L. Rand, Jr. 10 -----END PRIVACY-ENHANCED MESSAGE-----