-----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, U5vriqpu9qWZm+fAksNNK5n4ySEVjCwy1SYKJCh2dxxUyk5wNDIxn9uth0r9Y/R6 gj1gcxZpdxXfKJ2mCknNFg== 0000066025-97-000006.txt : 19971117 0000066025-97-000006.hdr.sgml : 19971117 ACCESSION NUMBER: 0000066025-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDLAND CO CENTRAL INDEX KEY: 0000066025 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 310742526 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06026 FILM NUMBER: 97718836 BUSINESS ADDRESS: STREET 1: 7000 MIDLAND BLVD STREET 2: P O BOX 125 CITY: AMELIA STATE: OH ZIP: 45102-2607 BUSINESS PHONE: 5139437100 MAIL ADDRESS: STREET 2: P O BOX 1256 CITY: CINCINNATI STATE: OH ZIP: 45201 10-Q 1 UNITED STATES FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended______________September 30, 1997__________________ 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______________________________1-6026______________________ ___________________________The Midland Company__________________________________ (Exact name of registrant as specified in its charter) ________Incorporated in Ohio_________________ __________31-0742526_____________ (State or other jurisdiction of incorporation (I.R.S. Employer Identification or organization) No.) 7000 Midland Boulevard, Amelia, Ohio 45102-2607 (Address of principal executive offices) (Zip Code) (513) 943-7100 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) 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, and (2) has been subject to such filing requirements for the past 90 days. Yes___X___. No_______. The number of common shares outstanding as of September 30, 1997 was 3,105,719. PART I. FINANCIAL INFORMATION THE MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1997 AND DECEMBER 31, 1996 (Unaudited) Sept. 30, Dec. 31, ASSETS 1997 1996 -------------- -------------- CASH $ 5,625,000 $ 3,342,000 -------------- -------------- MARKETABLE SECURITIES: Fixed income (cost, $351,445,000 at September 30, 1997 and $333,259,000 at December 31, 1996) 356,388,000 335,675,000 Equity (cost, $33,863,000 at September 30, 1997 and $30,931,000 at December 31, 1996) 85,543,000 64,787,000 -------------- -------------- Total 441,931,000 400,462,000 -------------- -------------- RECEIVABLES: Accounts receivable 69,778,000 54,674,000 Less allowance for losses 799,000 799,000 -------------- -------------- Net 68,979,000 53,875,000 -------------- -------------- REINSURANCE RECOVERABLES AND PREPAID REINSURANCE PREMIUMS 56,668,000 52,805,000 -------------- -------------- PROPERTY, PLANT AND EQUIPMENT - AT COST 131,144,000 118,327,000 Less accumulated depreciation and amortization 43,183,000 39,004,000 -------------- -------------- Property, Plant and Equipment - Net 87,961,000 79,323,000 -------------- -------------- DEFERRED INSURANCE POLICY ACQUISITION COSTS 45,804,000 45,342,000 -------------- -------------- NET ASSETS OF DISCONTINUED OPERATIONS - 16,518,000 -------------- -------------- OTHER ASSETS 4,206,000 4,313,000 -------------- -------------- TOTAL ASSETS $ 711,174,000 $ 655,980,000 ============== ============== See notes to the consolidated financial statements. THE MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1997 AND DECEMBER 31, 1996 (Unaudited) Sept. 30, Dec. 31, LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996 -------------- -------------- NOTES PAYABLE WITHIN ONE YEAR: Banks $ 12,000,000 $ 28,000,000 Commercial paper 6,512,000 4,700,000 -------------- -------------- Total 18,512,000 32,700,000 -------------- -------------- INSURANCE COMMISSIONS PAYABLE 16,368,000 13,821,000 -------------- -------------- OTHER PAYABLES AND ACCRUALS 46,150,000 39,260,000 -------------- -------------- FUNDS HELD UNDER REINSURANCE AGREEMENTS AND REINSURANCE PAYABLES 26,621,000 26,949,000 -------------- -------------- UNEARNED INSURANCE PREMIUMS 225,406,000 208,417,000 -------------- -------------- INSURANCE LOSS RESERVES 111,453,000 95,830,000 -------------- -------------- DEFERRED FEDERAL INCOME TAX 23,686,000 16,845,000 -------------- -------------- LONG-TERM DEBT 62,199,000 62,470,000 -------------- -------------- SHAREHOLDERS' EQUITY: Common stock (issued and outstanding: 3,106,000 shares at September 30, 1997 and 3,042,000 shares at December 31, 1996 after deducting treasury stock of 537,000 shares and 601,000 shares, respectively) 911,000 911,000 Additional paid-in capital 15,355,000 14,846,000 Retained earnings 145,398,000 138,423,000 Net unrealized gain on marketable securities 36,772,000 23,587,000 Treasury stock - at cost (14,870,000) (16,621,000) Unvested restricted stock awards (2,787,000) (1,458,000) -------------- -------------- Total 180,779,000 159,688,000 -------------- -------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 711,174,000 $ 655,980,000 ============== ============== See notes to the consolidated financial statements. THE MIDLAND COMPANY AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME (Unaudited) FOR THE NINE AND THREE-MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 Nine-Mos. Ended Sept. 30, Three-Mos. Ended Sept. 30, ----------------------------- --------------------------- 1997 1996 1997 1996 -------------- -------------- ------------- ------------- REVENUES: Insurance $ 251,012,000 $ 224,543,000 $ 84,207,000 $ 75,731,000 Transportation 24,504,000 25,706,000 8,616,000 9,485,000 Other 243,000 413,000 126,000 109,000 -------------- -------------- ------------- ------------- Total 275,759,000 250,662,000 92,949,000 85,325,000 -------------- -------------- ------------- ------------- COSTS AND EXPENSES: Insurance: Losses and loss adjustment expenses 127,746,000 133,735,000 44,409,000 45,984,000 Commissions and other policy acquisition costs 61,479,000 61,771,000 17,819,000 20,898,000 Operating and administrative expenses 36,703,000 30,108,000 13,107,000 10,769,000 Transportation operating expenses 21,288,000 24,587,000 7,077,000 7,157,000 Interest expense 3,612,000 3,698,000 1,202,000 1,158,000 Other operating and administrative expenses 3,195,000 2,503,000 628,000 524,000 -------------- -------------- ------------- ------------- Total 254,023,000 256,402,000 84,242,000 86,490,000 -------------- -------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAX 21,736,000 (5,740,000) 8,707,000 (1,165,000) PROVISION (CREDIT) FOR FEDERAL INCOME TAX 6,312,000 (3,186,000) 2,595,000 (792,000) -------------- -------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS 15,424,000 (2,554,000) 6,112,000 (373,000) -------------- -------------- ------------- ------------- DISCONTINUED OPERATIONS: Loss from operations of discontinued segment - less applicable income tax credits of $1,881,000, $1,289,000, $685,000 and $4,000, respectively (3,492,000) (2,430,000) (1,250,000) (21,000) Loss on disposal of segment - less income tax credit of $1,790,000 (3,325,000) - (3,325,000) - -------------- -------------- ------------- ------------- INCOME (LOSS) FROM DISCONTINUED OPERATIONS (6,817,000) (2,430,000) (4,575,000) (21,000) -------------- -------------- ------------- ------------- NET INCOME (LOSS) $ 8,607,000 $ (4,984,000) $ 1,537,000 $ (394,000) ============== ============== ============= ============= EARNINGS (LOSS) PER SHARE OF COMMON STOCK: Continuing operations $ 5.00 $ (.83) $ 1.97 $ (.12) Discontinued operations (2.21) (.79) (1.48) (.01) -------------- -------------- ------------- ------------- TOTAL $ 2.79 $ (1.62) $ .49 $ (.13) ============== ============== ============= ============= CASH DIVIDENDS PER SHARE OF COMMON STOCK $ .525 $ .495 $ .175 $ .165 ============== ============== ============= ============= See notes to the consolidated financial statements. THE MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) FOR THE NINE-MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 1997 1996 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 8,607,000 $ (4,984,000) Loss from discontinued operations 6,817,000 2,430,000 -------------- -------------- Income (loss) from continuing operations 15,424,000 (2,554,000) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,252,000 5,824,000 Increase in unearned insurance premiums 16,989,000 20,852,000 Increase in insurance loss reserves 15,623,000 30,081,000 Increase in net accounts receivable (15,104,000) (12,113,000) Increase in other accounts payable and accruals 6,848,000 1,118,000 Increase in reinsurance recoverables and prepaid reinsurance premiums (3,863,000 (20,047,000) Increase (decrease) in insurance commissions payable 2,547,000 (1,940,000) Increase in deferred insurance policy acquisition costs (462,000) (2,884,000) Increase (decrease) in funds held under reinsurance agreements and reinsurance payables (328,000) 5,108,000 Decrease in deferred federal income tax (260,000) (114,000) Decrease (increase) in other assets 107,000 (525,000) Other-net 76,000 1,232,000 -------------- -------------- Net cash provided by continuing operations 45,849,000 24,038,000 Net cash used in discontinued operations (3,629,000) (13,978,000) -------------- -------------- Net cash provided by operating activities 42,220,000 10,060,000 -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of marketable securities (144,948,000) (104,882,000) Sale of marketable securities 66,197,000 68,060,000 Maturity of marketable securities 32,023,000 32,081,000 Decrease in cash equivalent marketable securities 25,434,000 7,750,000 Acquisition of property, plant and equipment (17,198,000) (3,522,000) Proceeds from sale of discontinued operations 13,330,000 - Sale of property, plant and equipment 1,034,000 1,162,000 -------------- -------------- Net cash provided by (used in) investing activities (24,128,000) 649,000 -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in net short-term borrowings (14,188,000) (9,359,000) Issuance of long-term debt 2,300,000 - Repayment of long-term debt (2,293,000) (1,979,000) Dividends paid (1,589,000) (1,464,000) Payment of capitalized lease obligations (278,000) (251,000) Net issuance (purchase) of treasury stock 239,000 (211,000) -------------- -------------- Net cash used in financing activities (15,809,000) (13,264,000) -------------- -------------- NET INCREASE (DECREASE) IN CASH 2,283,000 (2,555,000) CASH AT BEGINNING OF PERIOD 3,342,000 6,221,000 -------------- -------------- CASH AT END OF PERIOD $ 5,625,000 $ 3,666,000 ============== ============== See Notes to the Consolidated Financial Statements. THE MIDLAND COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of The Midland Company and subsidiaries (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Financial information as of December 31, 1996 has been derived from the audited consolidated financial statements of the Company. Revenue and operating results for the three and nine-month periods ended September 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the audited consolidated financial statements and footnotes thereto for the year ended December 31, 1996 included in the Company's Annual Report on Form 10-K. Certain reclassifications (minor in nature) have been made to the 1996 amounts to conform to 1997 classifications. 2. DISCONTINUED OPERATIONS Effective September 29, 1997, CS Crable Sportswear, Inc., the Company's wholly-owned sportswear subsidiary, sold substantially all of its sportswear related assets for approximately $13.3 million. As a result of the disposal, in the accompanying financial statements, the Company has presented, seperated from continuing operations, the estimated loss on disposal, the results of discontinued operations, and the net assets of the discontinued operations, including reclassification of amounts previously reported for 1996 and the first two quarters of 1997. 3. EARNINGS PER SHARE Earnings per share (EPS) of common stock are computed by dividing net income by the weighted average number of shares and share equivalents (which considers stock options and restricted stock awards) outstanding during the period. Such weighted average numbers outstanding used for EPS calculations were as follows: Nine-months ended September 30: For Primary EPS For Fully Diluted EPS --------------- --------------------- 1997 3,085,000 3,119,000 1996 3,072,000 3,075,000 Statement of Financial Accounting Standards No. 128 (the "Statement") has been issued and will require companies to change the method of calculating earnings per share. The Statement is effective for financial statements for both interim and annual periods ending after December 15, 1997 and early application is not permitted. On a pro-forma basis, the Company's basic and diluted earnings per share calculated in accordance with the Statement would be: Nine-Mos. Ended Sept. 30, Three-Mos. Ended Sept. 30, ------------------------- -------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Basic earnings (loss) per share: Continuing operations $ 5.17 $( .87) $ 2.04 $(.12) Discontinued operations (2.28) ( .82) (1.53) (.01) ------------ ------------ ------------ ------------ Total $ 2.89 $(1.69) $ .51 $(.13) ============ ============ ============ ============ Diluted earnings (loss) per share: Continuing operations $ 5.00 $( .87) $ 1.97 $(.12) Discontinued operations (2.21) ( .82) (1.48) (.01) ------------ ------------ ------------ ------------ Total $ 2.79 $(1.69) $ .49 $(.13) ============ ============ ============ ============ 4. INCOME TAXES The federal income tax provisions (credits) for the three and nine-month periods ended September 30, 1997 and 1996 are different from amounts derived by applying the statutory tax rates to income before federal income tax as follows: Nine-Mos. Ended Sept. 30, Three-Mos. Ended Sept. 30, ------------------------- -------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Federal income tax (credit) at statutory rate $ 3,937,000 $(3,311,000) $ 580,000 $(417,000) Add (deduct) the tax effect of: Tax exempt interest and excludable dividend income (1,167,000) (1,301,000) (402,000) (416,000) Investment tax credits (274,000) (127,000) (92,000) (42,000) Other - net 145,000 264,000 34,000 79,000 ------------ ------------ ------------ ------------ Provision (credit) for federal income tax $ 2,641,000 $(4,475,000) $ 120,000 $(796,000) ============ ============ ============ ============ 5. CONTINGENCIES As discussed in Note 12 of the Company's financial statements for the year ended December 31, 1996, there are certain potential or actual legal claims pending against the Company, the outcome of which are not expected to have a material effect upon the Company's consolidated financial position or results of operations. 6. COMPREHENSIVE INCOME AND SEGMENT DISCLOSURES In June of 1997, The Accounting Standards Board issued SFAS No. 130, "Reporting on Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The Midland Company will be required to adopt these standards during 1998. Adoption of these standards will not impact the reported results of operations or financial position of The Midland Company but will require additional disclosure. 7. SUPPLEMENTAL CASH FLOW DISCLOSURES The Company paid interest of $4,800,000 and $4,438,000 in the first nine months of 1997 and 1996, respectively. The Company paid income taxes of $4,449,000 during the first nine months of 1997 and no income taxes were paid during the first nine months of 1996. In January, 1997, the Company issued 65,350 shares of treasury stock under a restricted stock award program that reduced treasury stock by approximately $1,808,000 and also increased additional paid-in capital by approximately $626,000. INDEPENDENT ACCOUNTANTS' REPORT The Midland Company: We have reviewed the accompanying consolidated balance sheet of The Midland Company and subsidiaries as of September 30, 1997, and the related consolidated statements of income for the three-month and nine-month periods ended September 30, 1997 and 1996 and of cash flows for the nine-month periods ended September 30, 1997 and 1996. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of The Midland Company and subsidiaries as of December 31, 1996, and the related consolidated statements of income and retained earnings and of cash flows for the year then ended (not presented herein); and in our report dated February 13, 1997, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1996 is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. October 23, 1997 Deloitte & Touche LLP Cincinnati, Ohio THE MIDLAND COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS A detailed discussion of the Company's liquidity and capital resources is included in the 1996 Annual Report on Form 10-K. Except as discussed below, no significant changes have taken place since that date and, accordingly, the discussion is not repeated here. Insurance Operations - -------------------- Insurance revenues increased in the first nine months and third quarter of 1997 as compared to the comparable periods in 1996 as a result of the continued strong premium growth from the Company's core property and casualty insurance products. The operating performance of the Company's insurance operations improved significantly in the first nine months and third quarter of 1997 compared to the comparable periods in 1996 due primarily to the return to more normal weather patterns throughout the United States during 1997. The nine month and third quarter of 1996 operating performances were adversely impacted by the catastrophic losses incurred from Hurricanes Fran and Bertha. Insurance losses and loss adjustment expenses decreased during the first nine months and third quarter of 1997 compared to the comparable periods in 1996 due to the reasons discussed above. The loss ratios (ratio of losses to net premiums earned) of the property and casualty insurance companies were 55.9% and 59.1% during the first nine months and third quarter, respectively, of 1997. This compares to loss ratios of 64.9% and 66.3% during the comparable periods of 1996. Insurance commissions and other policy acquisition costs decreased in the third quarter of 1997 compared to the third quarter of 1996. This decrease is due primarily to the Company entering several new reinsurance agreements in mid-1997. These reinsurance agreements essentially result in the Company retaining less underwriting profit but earning a higher ceding commission income, which reduces commission expense in the accompanying financial statements. After-tax capital gains for the first nine months totaled approximately $.80 per share in 1997 compared to approximately $.56 per share for the same period in 1996. Third quarter capital gains (after-tax) amounted to $.50 per share in 1997 compared to $.14 per share in 1996. Marketable securities, deferred federal income tax and net unrealized gains on marketable securities increased as a result of the investment of the strong cash flow generated by the Company's insurance operations coupled with the unrealized appreciation in the market value of the investment portfolio. Similarly, the increases in receivables, unearned insurance premiums, insurance loss reserves and other payables and accruals are also the result of this continued growth in the insurance operations. Transportation Operations - ------------------------- Transportation revenues decreased during the first nine months of 1997 as compared to the first nine months of 1996 due, in part, to the flooding conditions which existed on the lower Mississippi River during the first six months of 1997. This decrease is also due to the fact that the third quarter in 1996 was unusually favorable for the transportation industry in terms of affreightment rates and volume. Pre-tax profits of the transportation subsidiary improved significantly in the first nine months of 1997 compared to the first nine months of 1996 due primarily to a significant reduction in litigation related costs. On a pre-tax basis, litigation costs decreased $3.6 million during the first nine months of 1997 as compared to the comparable period in 1996. The increase in the Company's fixed assets was due primarily to the transportation subsidiary's acquisition of 41 barges for a total cost of $11.9 million during the first quarter of 1997. Discontinued Operations - ----------------------- On September 29, 1997, the Company's sportswear subsidiary, CS Crable Sportswear, Inc., sold the majority of its assets to Brazos, Inc., a subsidiary of Brazos Sportswear, Inc. The assets were sold for approximately $13.3 million in cash resulting in an after-tax loss on the disposal of approximately $3.3 million. The cash proceeds from this transaction were used to reduce the Company's short-term bank borrowings. The transaction, which includes the CS Crable Sportswear name, contracts and customer lists, also includes a ten-year lease of the CS Crable facility in Batavia, Ohio and the retention of the majority of CS Crable's workforce. Management believes that the sale presents the Company with the opportunity to focus on its insurance and transportation businesses. PART II. OTHER INFORMATION THE MIDLAND COMPANY AND SUBSIDIARIES SEPTEMBER 30, 1997 Item 1. Legal Proceedings Reference is made to Item 1 of the March 31, 1996 Registrant's Form 10-Q concerning criminal litigation against M/G Transport Services, Inc., a subsidiary of the Registrant. Upon Motion, the Court dismissed six of the remaining eight counts against M/G, four of the six remaining counts against one former employee and all of the remaining counts against two former employees. The United States has appealed. On October 31, 1997, M/G was fined $250,000 and placed on two years' probation on the two remaining counts. The Company does not expect any additional fines unless the United States is successful in its appeal. Item 2. Change in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a.) Exhibit 15 - Letter re: Unaudited Interim Financial Information b.) Exhibit 27 - Financial Data Schedule c.) Reports on Form 8-K - None were filed during the quarter ended September 30, 1997. An 8-K was filed on October 14, 1997 in connection with the September 29, 1997 sale of the Company's sportswear operations. SIGNATURES 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 dully authorized. THE MIDLAND COMPANY Date___________October 23, 1997______ s/Michael J. Conaton____________ Michael J. Conaton, President and Chief Operating Officer Date___________October 23, 1997______ s/John I. Von Lehman____________ John I. Von Lehman, Executive Vice President, Treasurer and Chief Financial Officer EX-15 2 EXHIBIT 15 LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION The Midland Company: We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of The Midland Company and subsidiaries for the periods ended September 30, 1997 and 1996, as indicated in our report dated October 23, 1997; because we did not perform an audit, we expressed no opinion on that information. We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, is incorporated by reference in Registration Statements No. 33-64821 on Form S-3 and No. 33-48511 on Form S-8. We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. October 23, 1997 Deloitte & Touche LLP Cincinnati, Ohio EX-27 3
5 9-MOS DEC-31-1997 SEP-30-1997 5,625,000 441,931,000 126,446,000 (799,000) 0 0 131,144,000 (43,183,000) 711,174,000 0 62,199,000 911,000 0 0 179,868,000 711,174,000 0 275,759,000 0 247,216,000 3,195,000 0 3,612,000 21,736,000 6,312,000 15,424,000 (6,817,000) 0 0 8,607,000 2.79 2.76
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