8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 21, 2012

THE PMI GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-13664	94-3199675
(Commission File Number)	(IRS Employer Identification No.)

PMI Plaza, 3003 Oak Road, Walnut Creek, California	94597-2098
(Address of Principal Executive Offices)	(Zip Code)

(925) 658-7878

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

ITEM 7.01 Regulation FD Disclosure.

On March 21, 2012, The PMI Group, Inc. (the “Registrant”), filed its monthly operating report for the period from February 1, 2012 through February 29, 2012 (the “February Monthly Operating Report”) with the United States Bankruptcy Court for the District of Delaware.

The February Monthly Operating Report is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Before reading the February Monthly Operating Report, we strongly urge you to read the Summary Cautionary Statement Regarding the February Monthly Operating Report below.

Cautionary Statements Regarding Financial and Operating Data

The Registrant cautions investors and potential investors not to place undue reliance upon the information contained in the February Monthly Operating Report, as it was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Registrant. The February Monthly Operating Report was not prepared in accordance with U.S. generally accepted accounting principles, was not audited or reviewed by independent accountants, will not be subject to audit or review by the Registrant’s external auditors at any time in the future, is in a format consistent with applicable bankruptcy laws, and is subject to future adjustment and reconciliation. There can be no assurances that, from the perspective of an investor or potential investor in the Registrant’s securities, the February Monthly Operating Report is accurate or complete. The February Monthly Operating Report contains a further description of limitations on the information contained therein. The February Monthly Operating Report also contains information for periods which are shorter or otherwise different from those required in the Registrant’s reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”), and such information might not be indicative of the Registrant’s financial condition or operating results for the period that would be reflected in the Registrant’s financial statements or in its reports pursuant to the Exchange Act. Results set forth in the February Monthly Operating Report should not be viewed as indicative of future results.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K and Exhibit 99.1 hereto may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Registrant’s financial condition, results of operations, and business that is not historical information. As a general matter, forward-looking statements are those focused upon future or anticipated events or trends and expectations and beliefs relating to matters that are not historical in nature. The words “believe,” “expect,” “plan,” “intend,” “estimate,” or “anticipate” and similar expressions, as well as future or conditional verbs such as “will,” “should,” “would,” and “could,” often identify forward-looking statements. The Registrant believes there is a reasonable basis for its expectations and beliefs, but they are inherently uncertain, and the Registrant may not realize its expectations and its beliefs may not prove correct. The Registrant undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. The Registrant’s actual results and future financial condition may differ materially from those described or implied by any such forward-looking statements as a result of many factors that may be outside the Registrant’s control. Such factors include, without limitation: (i) the ability of the Registrant to develop, prosecute, confirm, and consummate any plan of reorganization or liquidation with respect to the Chapter 11 Proceeding; (ii) the Registrant’s ability to obtain Court approval with respect to motions in the Chapter 11 Proceeding; (iii) risks associated with third parties seeking and obtaining court approval for the appointment of a Chapter 11 trustee; and (iv) the potential adverse impact of the Chapter 11 Proceeding on the Registrant’s liquidity or results of operations. This list is not intended to be exhaustive.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Registrant’s Monthly Operating Report for the period from February 1, 2012 to February 29, 2012.

SIGNATURE

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: March 21, 2012		The PMI Group, Inc.
		(Registrant)
	By:	/s/   L. Stephen Smith
		L. Stephen Smith
		Chief Executive Officer

EX-99.1

Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

In re The PMI Group, Inc.	Case No. 11-13730 (BLS)
	Reporting Period: 2/1/12-2/29/12

MONTHLY OPERATING REPORT

File with Court and submit copy to United States Trustee within 20 days after end of month

Submit copy of report to any official committee appointed in the case

REQUIRED DOCUMENTS	Form No.	Document Attached	Explanation Attached	Debtor’s Statement
Schedule of Cash Receipts and Disbursements	MOR-1	X
Bank Account Reconciliations, Bank Statements and Cash Disbursements Journal	MOR-1(a)			X
Schedule of Professional Fees Paid	MOR-1(b)	X
Statement of Operations	MOR-2	X
Balance Sheet	MOR-3	X
Status of Postpetition Taxes	MOR-4			X
Summary of Unpaid Postpetition Accounts Payable	MOR-4(a)	X
Debtor Questionnaire	MOR-5	X

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief.

Signature of Debtor	Date
Signature of Joint Debtor	Date
/s/ Donald P. Lofe, Jr.	March 20, 2012
Signature of Authorized Individual*	Date
Donald P. Lofe, Jr.	Executive Vice President, Chief Financial Officer and Chief Administrative Officer
Printed Name of Authorized Individual	Title of Authorized Individual

* Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

NOTES TO MONTHLY OPERATING REPORT

The PMI Group, Inc., a debtor and debtor in possession (the “Company” or “Debtor”), hereby submits its Monthly Operating Report (the “MOR”).

1. Description of the Cases. On November 23, 2011 (the “Petition Date”), the Debtor filed a voluntary petition with the Bankruptcy Court for reorganization under Chapter 11 of the Bankruptcy Code. The Debtor is operating its business as a debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

2. Basis of Presentation. The MOR is limited in scope, covers a limited time period and has been prepared solely for the purpose of complying with the monthly reporting requirements to the United States Bankruptcy Court. The financial information in the MOR is preliminary and unaudited and does not purport to show the financial statements of the Debtor in accordance with Generally Accepted Accounting Principles (“GAAP”) and, therefore, may exclude items required by GAAP, such as certain reclassifications, eliminations, accruals, valuations and disclosure items. We caution readers not to place undue reliance upon the MOR. There can be no assurance that such information is complete and the MOR may be subject to revision.

The information contained in the MOR has been derived from the Debtor’s books and records in conjunction with information available from non-debtor affiliates. This information, however, has not been subject to procedures that would typically be applied to financial information presented in accordance with GAAP, and upon the application of such procedures, we believe that the financial information could be subject to changes and these changes could be material. The information furnished in this MOR includes primarily normal recurring adjustments but does not include all of the adjustments that would typically be made for financial statements prepared in accordance with GAAP. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

3. Recoveries and Causes of Action. The MOR, the Debtor’s Schedules of Assets and Liabilities and Statements of Financial Affairs may not include a complete list of causes of action it possesses as of the Petition Date or at any point thereafter. Regardless of the recoveries and causes of action listed, the Debtor reserves all of its rights with respect to any and all causes of action they may possess, including, but not limited to, avoidance actions or to assert any defenses, and nothing in this MOR shall be deemed a waiver or limitation of any of the Debtor’s rights to pursue any such causes of action or recovery or assert any defenses.

4. Reorganization Items. American Institute of Certified Public Accountant Statement of Position 90-7, “Financial Reporting by Entities in reorganization under the Bankruptcy Code” (“SOP 90-7”) requires separate disclosure of reorganization items such as realized gains and losses from the settlement of pre-petition liabilities, provisions for losses resulting from the reorganization and restructuring of the business as well as professional fees directly related to the process or reorganizing the Debtor under Chapter 11. Such items are reflected in the MOR as Bankruptcy Related Expenses.

5. Liabilities Subject to Compromise. As a result of the Chapter 11 filing, most pre-petition indebtedness is subject to compromise or other treatment under a plan of reorganization. Generally, actions to enforce or otherwise effect payment of pre-petition 11 liabilities are stayed. The Debtor has been paying and intends to continue to pay undisputed post-petition claims in the ordinary course of business. In addition, the Debtor may reject pre-petition executory contracts with respect to the Debtor’s operations with the approval of the Bankruptcy Court. Damages resulting from rejection of executory contracts are generally treated as general unsecured claims and will be classified as liabilities subject to compromise. The pre-petition liabilities that are subject to compromise are reported herein at the amounts expected to be allowed, although they may be settled for lesser amounts. The amounts currently classified as liabilities subject to compromise may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims or other events. While GAAP requires fair market adjustments to certain obligations, including funded debt, this MOR states such obligations at notional value, including pre-petition accrued interest.

6. Post-petition Accounts Payable. To the best of the Debtor’s knowledge, all undisputed post-petition accounts payable have been and are being paid under agreed-upon payment terms.

7. Investments in Subsidiaries. Financial information related to any of the Debtor’s investments in its subsidiaries has been derived from the Debtor’s books and records in conjunction with the information available from non-debtor affiliates. Any information contained in this report pertaining to the Debtor’s investments in its subsidiaries should be viewed as preliminary and subject to revision. Given the timing of this filing, final loss provision and other expenses and revisions may not be reflected in the period in which they occur.

8. Non-Cash Compensation Expense. Prior to the Petition Date, certain employees of the Debtor and its subsidiaries were granted stock-based compensation (including options). The Debtor has not expensed or accrued post-petition expense for outstanding stock-based grants and other stock-based compensation.

9. Pre-Paid Assets. Pre-Paid Assets are not being amortized, thus have no impact on the Debtor’s income statement.

10. Notes Receivable. The Other Assets balance reported on the balance sheet of this report includes notes receivable that relate to investments made prior to 2002 to fund programs instituted, or to be instituted, by the Company or its subsidiaries. These programs are no longer in place and the Debtor is currently attempting to monetize these assets. The value assigned to these notes has been derived from the Debtor’s books and records in conjunction with the information available from non-debtor affiliates. The Debtor has not independently confirmed the outstanding balance on these notes receivable. These amounts may not represent fair market value and may be subject to significant revision.

The Debtor holds a Note Receivable of approximately $285 million plus accrued interest from an operating subsidiary. That subsidiary has been placed into receivership on an interim basis by its regulator due to a deficiency in regulatory capital; accordingly, the Debtor has provided a full valuation allowance against this note. The fair market value of this note and the amount that may ultimately be received in satisfaction thereof cannot be determined at this time.

11. Deferred Assets and Liabilities and Other Accruals. The Debtor has reversed certain accruals for pre-petition non-cash assets and liabilities, such as unamortized debt issuance expenses. There is significant uncertainty respecting the Debtor’s ability to utilize its deferred tax attributes; accordingly, a full valuation allowance has been applied to the deferred tax asset and no tax benefit or provision has been recognized.

12. Intercompany Balances. The “Accounts Receivable – Affiliates” and Post-petition “Accounts Payable – Intercompany” should be viewed as preliminary and subject to further revision. Given the timing of this filing, the Debtor and its affiliates may be required to make adjustments that may not be reflected in the period in which they occur.

The PMI Group, Inc.

Cash Receipts and Disbursements

February 1, 2012 to February 29, 2012

MOR – 1

Cash Receipts1	$	33,442
Operating Disbursements
Employee Compensation		171,443
Payroll Taxes		9,360
Employee Benefit Costs		7,955
Consultants and Temporary Staff		3,513
Ordinary Course Professional Fees		116,858
Intercompany Payments (non-employee)		—
Travel		—
Tax Payments		36,235
Board Compensation and Travel		19,000
Other (misc. G&A and contingencies)		19,581
Total Operating Disbursements		383,944
Bankruptcy Related Expenses
Debtor Professionals		131,465
UCC Professionals		—
Claims Administrators		—
US Trustee		—
Total Bankruptcy Disbursements		131,465
Total Disbursements		515,409
Net Cash Flow	$	(481,968	)
Beginning Cash Balance as of 2-1-2012	$	164,831,928
Change in Cash		(481,968	)
Ending Cash Balance as of 2-29-2012	$	164,349,961

¹  Primarily includes distributions from illiquid securities into BNY Mellon account.

The PMI Group, Inc.

Schedule of Bank Accounts and Balances

For the Month Ended February 29, 2012

MOR – 1a

Note: All bank accounts have been reconciled for the period presented.

Name of Bank	Account Name	Bank Account     Number		Balance
Bank of America	Main Account		xxxxxx0476	$	163,756,731
Bank of America	Payroll Account		xxxxxx0423		212,446
Bank of New York	Cash Securities		xxx430		206,755
Chemical Bank	Gateway		xxxxxx1515		148,213
First National Bank of Gordon	Gateway		xxx251		10,728
Commonwealth National Bank	Gateway		xxx3169		15,087
Total				$	164,349,961

The PMI Group, Inc.

Schedule of Professional Fees Paid

February 1, 2012 to February 29, 2012

MOR - 1b

Payee	Period Covered		Amount
Goldin Associates, LLC		January 2012	$	131,465.00
Groom Law Group		January 2012		49,715.50
Total Professional Fees			$	181,180.50

STATEMENT OF OPERATIONS

THE PMI GROUP, INC.

For the Period ended February 29, 2012

MOR-2

Total Revenues	$	—
Payroll Expenses		222,155
Other Recurring Expense		157,273
Total Recurring Expense		379,428
Non-Recurring Expenses – Bankruptcy Related		989,239
Total Expense		1,368,667
Interest and Dividends – Net		20,442
Equity Earnings		(37,337	)
Gain (Loss) on Investments		(113	)
Net Investment Income		(17,007	)
Income (Loss) before Tax		(1,385,674	)
Tax Provision (Benefit)		—
Net Income (Loss)	$	(1,385,674	)

BALANCE SHEET

THE PMI GROUP, INC.

For the Month Ended February 29, 2012

MOR-3

Assets
Fixed Income Securities	$	1,683,113
Cash		164,349,961
Investments in Subsidiaries		50,678,787
Accounts Receivable – Affiliates		2,449,130
Pre-paid Assets		9,893,121
Other Assets		682,430
Total Assets	$	229,736,542
Liabilities Not Subject to Compromise
Accrued Expenses	$	1,724,345
Accounts Payable		138,043
Accounts Payable -Intercompany		126,387
Other Liabilities		30,128
Liabilities Not Subject to Compromise	$	2,018,903
Liabilities Subject To Compromise
Pre-Petition Bond Debt	$	742,742,007
Gateway Liability		262,000
Accounts Payable		49,197
Accounts Payable – Intercompany		22,300,189
Liabilities Subject To Compromise	$	765,353,393
Total Liabilities	$	767,372,296
Common Stock	$	1,970,788
Additional Paid In Capital and Accumulated Deficit		733,798,365
Treasury Shares		(1,273,404,907	)
Total Equity	$	(537,635,754	)
Total Liabilities & Equity	$	229,736,542

The PMI Group, Inc.

Summary of Post-Petition Taxes

For the Month Ended February 29, 2012

MOR – 4

Representation: To the best of its knowledge, The PMI Group, Inc. has paid its taxes due as of 2-29-2012.

The PMI Group, Inc.

Summary of Post-Petition Debts

For the Month Ended February 29, 2012

MOR – 4a

Unpaid Post-Petition Debts
	Current		0-31 Days		31-60 Days		61-90 Days		Over 90 Days		Total
Total Operating Payables	$	15,958	$	—	$	—	$	—	$	—	$	15,958
Total Bankruptcy Related Payables		122,085		—		—		—		—		122,085
Total Post-Petition Payables	$	138,043	$	—	$	—	$	—	$	—	$	138,043

The PMI Group, Inc.

Debtor Questionnaire

For the Month Ended February 29, 2012

MOR – 5

DEBTOR QUESTIONNAIRE

Must be completed each month	Yes	No
1. Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.		x
2. Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.		x
3. Have all postpetition tax returns been timely filed? If no, provide an explanation below.	x
4. Are workers compensation, general liability and other necessary insurance coverages in effect? If no, provide an explanation below.	x
5. Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.		x