THE MIDLAND COMPANY
Annual Report
on Form 10-K
to the
Securities and Exchange Commission
for the
Year Ended December 31, 1993
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1993
Commission File Number - 1-6026
THE MIDLAND COMPANY
Incorporated in Ohio
I.R.S. Employer Identification No. 31-0742526
537 E. Pete Rose Way
Cincinnati, Ohio 45202
Tel. (513) 721-3777
Securities registered pursuant to Section 12(b) of the Act:
Common stock - no par value. - American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark whether the registrant (1) has filed all
other 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 the filing requirements for the past 90 days.
Yes X . No .
The aggregate market value of the voting common stock held by
nonaffiliates, which includes shares held by executive officers and directors,
of the registrant as of March 4, 1994 was $119,963,000.
Number of shares of common stock outstanding as of March 4, 1994-
2,999,081.
Documents Incorporated By Reference
Annual Report to Shareholders for the year ended December 31, 1993
is incorporated by reference into Parts I, II and IV.
Registrant's Proxy Statement dated March 18, 1994 is incorporated by
reference into Parts III and IV.
THE MIDLAND COMPANY
FORM 10-K
DECEMBER 31, 1993
PART I
ITEM 1. Business.
Incorporated by reference in pages 2 through 11 and 26 of the
Registrant's 1993 Annual Report to Shareholders. The number of
persons employed by the Registrant was approximately 980 at
December 31, 1993.
ITEM 2. Properties.
Incorporated by reference in pages 2 through 11 of the Registrant's
1993 Annual Report to Shareholders.
ITEM 3. Legal Proceedings.
None other than ordinary routine litigation incidental to the
business of the Company and its subsidiaries.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None during the fourth quarter.
PART II
ITEM 5. Market for the Registrant's Common Stock and Related Security
Holder Matters. Incorporated by reference to pages 25 and 26
(Note 13), and 28 and 29 of the Registrant's 1993 Annual Report
to Shareholders.
ITEM 6. Selected Financial Data.
Incorporated by reference to page 13 of the Registrant's 1993 Annual
Report to Shareholders.
ITEM 7. Management's Discussion And Analysis of Financial Condition And
Results of Operations.
Incorporated by reference to pages 14 and 15 of the Registrant's
1993 Annual Report to Shareholders.
ITEM 8. Financial Statements and Supplementary Data.
Incorporated by reference to pages 16 through 28 of the Registrant's
1993 Annual Report to Shareholders.
ITEM 9. Disagreements on Accounting and Financial Disclosures.
None.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
Incorporated by reference to the Registrant's Proxy Statement dated
March 18, 1994.
PART III (Continued)
Executive Officers Of The Company-
J. P. Hayden, Jr. - Age 64 - Chairman and Chief Executive
Officer
Michael J. Conaton - Age 60 - President and Chief Operating
Officer
John R. LaBar - Age 62 - Vice President and Secretary
Robert W. Hayden - Age 55 - Vice President
John I. Von Lehman - Age 41 - Vice President, Treasurer
and Chief Financial Officer
Thomas J. Rohs - Age 52 - Vice President
J. P. Hayden III - Age 41 - Vice President
John W. Hayden - Age 36 - Vice President
Robert N. Thornbladh - Age 41 - Vice President
Michael L. Flowers - Age 42 - Vice President, Assistant
Secretary and Chief
In-House Counsel
J. P. Hayden, Jr. and Robert W. Hayden are brothers. J. P. Hayden,
III and John W. Hayden are sons of J. P. Hayden, Jr.
During 1988, Michael J. Conaton was elected President and Chief
Operating Officer (formerly Executive Vice President and Chief Financial
Officer).
During 1988, John I. Von Lehman was elected Vice President and Chief
Financial Officer and retained the title of Treasurer (formerly Treasurer and
Chief Accounting Officer).
During 1990, Robert N. Thornbladh joined the Company as Vice
President. He was formerly employed by Nutmeg Industries.
During 1991, Michael L. Flowers (formerly Assistant Secretary) was
elected Vice President.
The officers listed above have served in the positions indicated for
the past five years (except as noted above).
ITEM 11. Executive Compensation.
Incorporated by reference to the Registrant's Proxy Statement dated
March 18, 1994.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
Incorporated by reference to the Registrant's Proxy Statement dated
March 18, 1994.
ITEM 13. Certain Relationships and Related Transactions.
Incorporated by reference to the Registrant's Proxy Statement dated
March 18, 1994.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements.
Incorporated by reference in Part II of this report:
PART IV (Continued)
Data pertaining to The Midland Company and Subsidiaries -
Report of Independent Public Accountants.
Consolidated Balance Sheets, December 31, 1993 and 1992.
Consolidated Statements of Income and Retained Earnings for
the Years Ended December 31, 1993, 1992 and 1991.
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1992 and 1991.
Notes to Consolidated Financial Statements.
(a) 2. Financial Statement Schedules.
Included in Part IV of this report:
Data pertaining to The Midland Company
and Subsidiaries - Page
Independent Auditors' Consent and Report
on Schedules 7
Schedule I - Marketable Securities - Other
Investments, December 31, 1993 8
Schedule V - Property, Plant and Equipment
for the Years Ended December 31, 1993,
1992 and 1991 9
Schedule VI - Accumulated Depreciation and
Amortization of Property, Plant and Equipment
for the Years Ended December 31, 1993, 1992
and 1991 10
Schedule VIII - Allowance for Losses for the
Years Ended December 31, 1993, 1992 and 1991 11
Schedule IX - Short-Term Borrowings for the Years
Ended December 31, 1993, 1992 and 1991 12
Schedule X - Supplementary Income Statement
Information for the Years Ended
December 31, 1993, 1992 and 1991 13
All other schedules for which provision is made in
the applicable accounting regulations of the
Securities and Exchange Commission are not required
under the related instructions or are inapplicable,
and therefore have been omitted.
(a) 3. Exhibits.
3. Articles of Incorporation and By-Laws - Filed as
Exhibit 3 to the Registrant's 1980 Annual Report on
Form 10-K, and incorporated herein by reference.
10. A description of the Company's Stock Option Plan and
Profit Sharing Plan - Incorporated by reference to
the Registrant's Proxy Statement dated March 18, 1994.
11. Computation of Consolidated Net Income Per Share for the
years ended December 31, 1993, 1992 and 1991
13. Annual Report to security holders - Incorporated by
reference to the Registrant's 1993 Annual Report
to Shareholders
21. Subsidiaries of the Registrant
22. Registrant's Proxy Statement dated - Incorporated by
reference to the Registrant's Proxy Statement dated
March 18, 1994.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
THE MIDLAND COMPANY
Signature Title Date
S/ George R. Baker Director March 3, 1994
(George R. Baker)
S/ James H. Carey Director and Member March 3, 1994
(James H. Carey) of Audit Committee
S/ Michael J. Conaton President, Chief Operating March 3, 1994
(Michael J. Conaton) Officer and Director
S/ J. P. Hayden, Jr. Chairman, Chief Executive March 3, 1994
(J. P. Hayden, Jr.) Officer and Director
S/ J. P. Hayden, III Vice President and Director March 3, 1994
(J. P. Hayden, III)
S/ John W. Hayden Vice President and Director March 3, 1994
(John W. Hayden)
S/ Robert W. Hayden Vice President and Director March 3, 1994
(Robert W. Hayden)
S/ William J. Keating Director March 3, 1994
(William J. Keating)
S/ William McD. Kite Director March 3, 1994
(William McD. Kite)
S/ John R. LaBar Vice President, Secretary March 3, 1994
(John R. LaBar) and Director
S/ John M. O'Mara Director and Member March 3, 1994
(John M. O'Mara) of Audit Committee
S/ John R. Orther Director and Member March 3, 1994
(John R. Orther) of Audit Committee
S/ William F. Plettner Director March 3, 1994
(William F. Plettner)
S/ Glenn E. Schembechler Director and Member March 3, 1994
(Glenn E. Schembechler) of Audit Committee
S/ John I. Von Lehman Vice President, Treasurer, March 3, 1994
(John I. Von Lehman) Chief Financial Officer,
Chief Accounting Officer
and Director
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has dully caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
THE MIDLAND COMPANY
Signature Title Date
S/ J. P. Hayden, Jr. Chairman and Chief Executive March 3, 1994
(J. P. Hayden, Jr.) Officer
S/ John I. Von Lehman Vice President, Treasurer, March 3, 1994
(John I. Von Lehman) Chief Financial Officer and
Chief Accounting Officer
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES
-----------------------------------------------------
To the Shareholders of The Midland Company:
We consent to the incorporation by reference in Registration Statement No.
33-48511 of The Midland Company on Form S-8 of our report dated February 10,
1994, incorporated by reference in this Annual Report on Form 10-K and our
report (appearing below) on the financial statement schedules of The Midland
Company for the year ended December 31, 1993.
Our audits of the consolidated financial statements referred to in our
aforementioned report also included the financial statement schedules of The
Midland Company and its subsidiaries, listed in Item 14. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
March 14, 1994
SCHEDULE I
THE MIDLAND COMPANY
AND SUBSIDIARIES
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
DECEMBER 31, 1993
. . . . . . .December 31, 1993. . . . . . .
- --------------------------------------------------------------------------------
Column A Column C Column D Column E
- -------------------------------------------------------------------------------
Amount at
which shown
Market in the
Type of Investment Cost Value balance sheet
- --------------------------------------------------------------------------------
Bonds and notes:
United States Government
and government agencies
and authorities $ 69,482,000 $ 72,477,000 $ 72,477,000
States, municipalities
and political subdivisions 61,642,000 64,998,000 64,998,000
All other corporate 56,479,000 56,942,000 56,942,000
--------------------------------------------
Total bonds and notes 187,603,000 194,417,000 194,417,000
--------------------------------------------
Preferred stocks 294,000 419,000 419,000
--------------------------------------------
Common stocks:
Star Banc Corporation 2,073,000 9,457,000 9,457,000
All other common stocks 14,497,000 17,466,000 17,466,000
--------------------------------------------
Total common stocks 16,570,000 26,923,000 26,923,000
--------------------------------------------
Accrued investment income 2,855,000 2,855,000 2,855,000
--------------------------------------------
Total investments $207,322,000 $224,614,000 $224,614,000
============================================
NOTE: The individual issue disclosed above is the only individual
issue requiring separate disclosure.
SCHEDULE V
THE MIDLAND COMPANY
AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN F
BALANCE AT BALANCE
BEGINNING ADDITIONS AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS OF PERIOD
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993:
Land $ 488,000 $ 813,000 $ 45,000 $ 1,256,000
Buildings, improvements,
fixtures, etc. 27,516,000 17,028,000 3,378,000 41,166,000
Vessels and barges 122,193,000 14,394,000 1,988,000 134,599,000
River transportation
equipment under capital
leases 8,143,000 -- -- 8,143,000
Construction-in-progress 4,881,000 (4,881,000) -- --
----------------------------------------------------
TOTAL $163,221,000 $27,354,000 $5,411,000 $185,164,000
====================================================
YEAR ENDED DECEMBER 31, 1992:
Land $ 488,000 $ -- $ -- $ 488,000
Buildings, improvements,
fixtures, etc. 23,754,000 5,240,000 1,478,000 27,516,000
Vessels and barges 115,578,000 7,487,000 872,000 122,193,000
River transportation
equipment under capital
leases 8,143,000 -- -- 8,143,000
Construction-in-progress -- 4,881,000 -- 4,881,000
----------------------------------------------------
TOTAL $147,963,000 $17,608,000 $2,350,000 $163,221,000
====================================================
YEAR ENDED DECEMBER 31, 1991:
Land $ 488,000 $ -- $ -- $ 488,000
Buildings, improvements,
fixtures, etc. 22,119,000 2,676,000 1,041,000 23,754,000
Vessels and barges 105,389,000 10,285,000 96,000 115,578,000
River transportation
equipment under capital
leases 8,143,000 -- -- 8,143,000
----------------------------------------------------
TOTAL $136,139,000 $12,961,000 $1,137,000 $147,963,000
====================================================
SCHEDULE VI
THE MIDLAND COMPANY
AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN F
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END
CLASSIFICATION OF PERIOD EXPENSES RETIREMENTS OF PERIOD
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993:
Buildings, improvements,
fixtures, etc. $ 9,756,000 $ 3,699,000 $1,145,000 $12,310,000
Vessels and barges 54,574,000 5,778,000 1,763,000 58,589,000
River transportation
equipment under capital
leases 5,849,000 524,000 -- 6,373,000
----------------------------------------------------
TOTAL $70,179,000 $10,001,000 $2,908,000 $77,272,000
====================================================
YEAR ENDED DECEMBER 31, 1992:
Buildings, improvements,
fixtures, etc. $ 7,883,000 $ 2,839,000 $ 966,000 $ 9,756,000
Vessels and barges 49,356,000 5,787,000 569,000 54,574,000
River transportation
equipment under capital
leases 5,325,000 524,000 -- 5,849,000
----------------------------------------------------
TOTAL $ 62,564,000 $ 9,150,000 $1,535,000 $70,179,000
====================================================
YEAR ENDED DECEMBER 31, 1991:
Buildings, improvements,
fixtures, etc. $ 6,028,000 $ 2,417,000 $ 562,000 $ 7,883,000
Vessels and barges 44,129,000 5,301,000 74,000 49,356,000
River transportation
equipment under capital
leases 4,801,000 524,000 -- 5,325,000
----------------------------------------------------
TOTAL $ 54,958,000 $ 8,242,000 $ 636,000 $62,564,000
====================================================
SCHEDULE VIII
THE MIDLAND COMPANY
AND SUBSIDIARIES
SCHEDULE VIII - ALLOWANCE FOR LOSSES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND DEDUCTIONS AT END
DESCRIPTION OF PERIOD EXPENSES (ADDITIONS) OF PERIOD
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993:
Allowance For Losses $1,192,000 $357,000 $432,000 (1) $1,117,000
YEAR ENDED DECEMBER 31, 1992:
Allowance For Losses $1,133,000 $297,000 $238,000 (1) $1,192,000
YEAR ENDED DECEMBER 31, 1991:
Allowance For Losses $ 943,000 $195,000 $ 5,000 (1) $1,133,000
NOTES: (1) Accounts written off are net of recoveries.
SCHEDULE IX
THE MIDLAND COMPANY
AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
-- END OF PERIOD --- ------ DURING THE PERIOD ----------
WEIGHTED WEIGHTED
CATEGORY OF AVERAGE MAXIMUM AVERAGE AVERAGE
SHORT-TERM INTEREST AMOUNT AMOUNT INTEREST
BORROWINGS BALANCE RATE OUTSTANDING OUTSTANDING RATE
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993:
Bank Borrowings $22,000,000 3.5% $27,000,000 $13,583,000 3.5%
Commercial Paper 14,302,000 3.3% 15,129,000 11,096,000 3.7%
YEAR ENDED DECEMBER 31, 1992:
Bank Borrowings $27,000,000 4.1% $27,000,000 $ 2,669,000 3.8%
Commercial Paper 8,866,000 4.1% 10,208,000 9,135,000 4.7%
YEAR ENDED DECEMBER 31, 1991:
Bank Borrowings $12,000,000 5.2% $12,000,000 $ 323,000 7.7%
Commercial Paper 8,568,000 5.1% 9,686,000 8,097,000 6.5%
NOTE: The weighted average interest rate is computed by dividing actual
interest expense on borrowings by the average amount of such borrowings
during the year.
SCHEDULE X
THE MIDLAND COMPANY
AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
1993 1992 1991
----------------------------------
Maintenance and repairs $4,972,000 $5,662,000 $3,015,000
==================================
Taxes, other than payroll and
income taxes:
Insurance premium taxes $5,971,000 $4,766,000 $3,995,000
Other 2,742,000 2,060,000 2,056,000
----------------------------------
Total $8,713,000 $6,826,000 $6,051,000
==================================