1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-6026
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The Midland Company
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0742526
- --------------------------------------------- -------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification 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 April 24, 2001 was
8,911,426.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE MIDLAND COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 AND DECEMBER 31, 2000
Amounts in 000's
(UNAUDITED)
MARCH 31, DEC. 31,
ASSETS 2001 2000
-------------- -------------
MARKETABLE SECURITIES AVAILABLE FOR SALE:
Fixed income (cost, $505,415 at March 31, 2001 and
$534,038 at December 31, 2000) $ 518,347 $ 540,337
Equity (cost, $77,693 at March 31, 2001 and
$74,983 at December 31, 2000) 143,935 152,320
-------------- -------------
Total 662,282 692,657
-------------- -------------
CASH 7,187 8,391
-------------- -------------
ACCOUNTS RECEIVABLE - NET 71,805 70,396
-------------- -------------
REINSURANCE RECOVERABLES AND
PREPAID REINSURANCE PREMIUMS 47,463 46,030
-------------- -------------
PROPERTY, PLANT AND EQUIPMENT - NET 56,195 56,976
-------------- -------------
DEFERRED INSURANCE POLICY ACQUISITION COSTS 91,855 91,574
-------------- -------------
OTHER ASSETS 22,273 27,826
-------------- -------------
TOTAL ASSETS $ 959,060 $ 993,850
============== =============
See notes to condensed consolidated financial statements.
3
THE MIDLAND COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 AND DECEMBER 31, 2000
AMOUNTS IN 000'S
(UNAUDITED)
MARCH 31, DEC. 31,
LIABILITIES & SHAREHOLDERS' EQUITY 2001 2000
-------------- --------------
UNEARNED INSURANCE PREMIUMS $ 359,850 $ 357,185
-------------- --------------
INSURANCE LOSS RESERVES 131,675 135,887
-------------- --------------
INSURANCE COMMISSIONS PAYABLE 18,906 22,181
-------------- --------------
FUNDS HELD UNDER REINSURANCE AGREEMENTS
AND REINSURANCE PAYABLES 1,943 2,803
-------------- --------------
LONG-TERM DEBT 39,674 40,025
-------------- --------------
OTHER NOTES PAYABLE:
Banks 18,000 39,000
Commercial paper 14,285 6,020
-------------- --------------
Total 32,285 45,020
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DEFERRED FEDERAL INCOME TAX 31,397 32,938
-------------- --------------
OTHER PAYABLES AND ACCRUALS 58,442 74,634
-------------- --------------
COMMITMENTS AND CONTINGENCIES - -
-------------- --------------
SHAREHOLDERS' EQUITY:
Common stock (issued and outstanding: 8,910 shares at March 31, 2001 and 9,000
shares at December 31, 2000 after deducting treasury stock of 2,018 shares
and 1,928 shares, respectively) 911 911
Additional paid-in capital 19,890 19,838
Retained earnings 248,658 239,679
Accumulated other comprehensive income 51,473 54,396
Treasury stock - at cost (34,943) (30,404)
Unvested restricted stock awards (1,101) (1,243)
-------------- --------------
Total 284,888 283,177
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 959,060 $ 993,850
============== ==============
See notes to condensed consolidated financial statements.
4
THE MIDLAND COMPANY
AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
AMOUNTS IN 000'S EXCEPT PER SHARE DATA
2001 2000
------------------- --------------------
REVENUES:
Insurance:
Premiums earned $ 118,571 $ 110,498
Net investment income 8,834 7,061
Net realized investment gains 1,071 1,882
Other insurance income 1,771 1,959
Transportation 9,606 7,000
Other 129 341
------------------- --------------------
Total 139,982 128,741
------------------- --------------------
COSTS AND EXPENSES:
Insurance:
Losses and loss adjustment expenses 62,266 54,976
Commissions and other policy acquisition costs 34,759 34,862
Operating and administrative expenses 19,065 17,833
Transportation operating expenses 8,572 6,310
Interest expense 1,413 888
Other operating and administrative expenses 291 851
------------------- --------------------
Total 126,366 115,720
------------------- --------------------
INCOME BEFORE FEDERAL INCOME TAX 13,616 13,021
PROVISION FOR FEDERAL INCOME TAX 3,924 3,838
------------------- --------------------
NET INCOME $ 9,692 $ 9,183
=================== ====================
BASIC EARNINGS PER SHARE
OF COMMON STOCK $ 1.11 $ 1.00
=================== ====================
DILUTED EARNINGS PER SHARE
OF COMMON STOCK $ 1.07 $ 0.97
=================== ====================
CASH DIVIDENDS PER SHARE
OF COMMON STOCK - DECLARED $ 0.080 $ 0.075
=================== ====================
See notes to condensed consolidated financial statements.
5
THE MIDLAND COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (UNAUDITED)
AMOUNTS IN 000's
ACCUMULATED
ADDITIONAL OTHER COM-
COMMON PAID-IN RETAINED PREHENSIVE
STOCK CAPITAL EARNINGS INCOME
-----------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $ 911 $ 18,583 $ 207,005 $ 49,388
Comprehensive income:
Net income 9,183
Increase in unrealized gain on
marketable securities, net of related
income tax effect of $2,629 4,883
Total comprehensive income
Purchase of treasury stock
Issuance of treasury stock for options
exercised and employee savings plan 90
Cash dividends declared (709)
Federal income tax benefit related to the
exercise or granting of stock awards 229
Amortization and cancellation of
unvested restricted stock awards
-----------------------------------------------------------------
BALANCE, MARCH 31, 2000 $ 911 $ 18,902 $ 215,479 $ 54,271
=================================================================
BALANCE, DECEMBER 31, 2000 $ 911 $ 19,838 $ 239,679 $ 54,396
Comprehensive income:
Net income 9,692
Decrease in unrealized gain on
marketable securities, net of related
income tax effect of $(1,542) (2,923)
Total comprehensive income
Purchase of treasury stock
Issuance of treasury stock for options
exercised and employee savings plan (751)
Cash dividends declared (713)
Federal income tax benefit related to the
exercise or granting of stock awards 803
Amortization and cancellation of
unvested restricted stock awards
-----------------------------------------------------------------
BALANCE, MARCH 31, 2001 $ 911 $ 19,890 $ 248,658 $ 51,473
=================================================================
UNVESTED
RESTRICTED COMPRE-
TREASURY STOCK HENSIVE
STOCK AWARDS TOTAL INCOME
----------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $(15,786) $ (2,099) $ 258,002
Comprehensive income:
Net income 9,183 $ 9,183
Increase in unrealized gain on
marketable securities, net of related
income tax effect of $2,629 4,883 4,883
--------------
Total comprehensive income $ 14,066
==============
Purchase of treasury stock (1,595) (1,595)
Issuance of treasury stock for options
exercised and employee savings plan 115 205
Cash dividends declared (709)
Federal income tax benefit related to the
exercise or granting of stock awards 229
Amortization and cancellation of
unvested restricted stock awards 187 187
--------------------------------------------
BALANCE, MARCH 31, 2000 $(17,266) $ (1,912) $ 270,385
============================================
BALANCE, DECEMBER 31, 2000 $(30,404) $ (1,243) $ 283,177
Comprehensive income:
Net income 9,692 $ 9,692
Decrease in unrealized gain on
marketable securities, net of related
income tax effect of $(1,542) (2,923) (2,923)
--------------
Total comprehensive income $ 6,769
==============
Purchase of treasury stock (6,598) (6,598)
Issuance of treasury stock for options
exercised and employee savings plan 2,059 1,308
Cash dividends declared (713)
Federal income tax benefit related to the
exercise or granting of stock awards 803
Amortization and cancellation of
unvested restricted stock awards 142 142
--------------------------------------------
BALANCE, MARCH 31, 2001 $(34,943) $ (1,101) $ 284,888
============================================
See notes to condensed consolidated financial statements.
6
THE MIDLAND COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE-MONTHS ENDED MARCH 31, 2001 AND 2000
AMOUNT IN 000'S
2001 2000
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 9,692 $ 9,183
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,087 2,241
Net realized investment gains (1,071) (1,882)
Increase (decrease) in other accounts payable and accruals (15,418) 344
Decrease (increase) in other assets 5,406 (732)
Increase (decrease) in insurance loss reserves (4,212) 556
Decrease in insurance commissions payable (3,275) (2,020)
Increase in unearned insurance premiums 2,665 9,427
Increase in reinsurance recoverables and prepaid
reinsurance premiums (1,433) (3,825)
Increase in net accounts receivable (1,409) (4,782)
Decrease in funds held under reinsurance
agreements and reinsurance payables (860) (124)
Increase in deferred insurance policy acquisition costs (281) (1,827)
Other-net (129) 714
------------------- -------------------
Net cash provided by (used in) operating activities (8,238) 7,273
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (79,108) (53,519)
Sale of marketable securities 58,114 64,508
Decrease (increase) in cash equivalent marketable securities 42,363 (10,913)
Maturity of marketable securities 5,681 10,366
Acquisition of property, plant and equipment (1,070) (423)
Proceeds from sale of property, plant and equipment 114 43
Net cash used in business acquisition - (2,471)
------------------- -------------------
Net cash provided by investing activities 26,094 7,591
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in net short-term borrowings (12,735) (15,513)
Purchase of treasury stock (6,598) (1,595)
Issuance of treasury stock 1,308 205
Dividends paid (684) (641)
Repayment of long-term debt (351) (640)
------------------- -------------------
Net cash used in financing activities (19,060) (18,184)
------------------- -------------------
NET DECREASE IN CASH (1,204) (3,320)
CASH AT BEGINNING OF PERIOD 8,391 10,098
------------------- -------------------
CASH AT END OF PERIOD $ 7,187 $ 6,778
=================== ===================
INTEREST PAID $ 1,372 $ 976
INCOME TAXES PAID $ - $ 260
See notes to the condensed consolidated financial statements.
7
THE MIDLAND COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2001
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of The
Midland Company and subsidiaries (the "Company") have been prepared in
accordance with accounting principles generally accepted in the United States of
America 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 accounting principles generally accepted
in the United States of America 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, 2000 has been derived from the audited
consolidated financial statements of the Company. Revenue and operating results
for the three-month period ended March 31, 2001 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2001. For
further information, refer to the audited consolidated financial statements and
footnotes thereto for the year ended December 31, 2000 included in the Company's
Annual Report on Form 10-K.
Certain reclassifications (minor in nature) have been made to the 2000 amounts
to conform to 2001 classifications.
2. EARNINGS PER SHARE
Earnings per share (EPS) of common stock amounts are computed by dividing net
income by the weighted average number of shares outstanding during the period
for basic EPS, plus the dilutive share equivalents for stock options and
restricted stock awards for diluted EPS. Shares used for EPS calculations were
as follows (000's):
For Basic EPS For Diluted EPS
------------- ---------------
Three months ended March 31:
2001 8,705 9,023
===== =====
2000 9,167 9,470
===== =====
3. INCOME TAXES
The federal income tax provisions for the three-month periods ended March 31,
2001 and 2000 are different from amounts derived by applying the statutory tax
rates to income before federal income tax as follows (000's):
2001 2000
---- ----
Federal income tax at statutory rate $4,766 $4,557
Tax effect of:
Tax exempt interest and
excludable dividend income (919) (818)
Other - net 77 99
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Provision for federal income tax $3,924 $3,838
======= ======
8
THE MIDLAND COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. SEGMENT DISCLOSURES
Since the Company's annual report for 2000, there have been no changes in
reportable segments or the manner in which the Company determines reportable
segments or measures segment profit or loss. Summarized segment information for
the interim periods for 2001 and 2000 is as follows (000's):
Three Months Ended March 31, 2001 Three Months Ended March 31, 2000
--------------------------------- ---------------------------------
Revenues- Revenues-
Total External Pre-Tax Total External Pre-Tax
Assets Customers Income Assets Customers Income
------ --------- ------ ------ --------- ------
Reportable Segments:
Insurance:
Manufactured housing n/a $78,920 $ 7,675 n/a $76,003 $11,116
Other n/a 41,422 6,448 n/a 36,454 3,216
Unallocated $895,266 - (380) $839,528 - (660)
Transportation 27,248 9,606 943 29,913 7,000 560
Corporate and all other (1,070) (1,211)
-------- -------
$13,616 $13,021
======= =======
Intersegment revenues are insignificant. Revenues reported above, by definition,
exclude investment income and realized gains. Certain amounts are not allocated
to segments ("n/a" above) by the Company.
5. NEW ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities" during 1998. SFAS No. 133, as
amended by SFAS No. 137 and SFAS No. 138, is effective for fiscal years
beginning January 1, 2001. Adoption of SFAS 133 on January 1, 2001 did not have
a material impact on the reported results of operations or financial position of
the Company.
9
INDEPENDENT ACCOUNTANTS' REPORT
The Midland Company:
We have reviewed the accompanying condensed consolidated balance sheet of The
Midland Company and subsidiaries as of March 31, 2001, and the related condensed
consolidated statements of income, changes in shareholders' equity and cash
flows for the three-month periods ended March 31, 2001 and 2000. 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 inquires of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, 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 condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of The
Midland Company and subsidiaries as of December 31, 2000, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
February 8, 2001, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 2000 is
fairly stated, in all material respects, in relation to the consolidated
financial statements from which it has been derived.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Cincinnati, Ohio
April 12, 2001
10
ITEM 2. 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 2000 Annual Report on Form 10-K. Except as discussed below,
as of March 31, 2001, no material changes have taken place since that date and,
accordingly, the discussion is not repeated herein.
RESULTS OF OPERATIONS
INSURANCE
- ---------
Insurance Premiums
Property and casualty and life insurance direct and assumed written
premiums generated from American Modern Insurance Group, Inc. (American Modern),
the Company's insurance subsidiary, increased 3.5% in the first quarter to
$133.0 million from $128.4 million for the same quarter in 2000. Net earned
premiums for the first quarter increased 7.3% to $118.6 million from $110.5
million for the comparable quarter in 2000. The disparity in growth rates
between direct and assumed written premiums and net earned premiums for the
periods presented was due primarily to a greater number of multi-year insurance
policies being written in prior periods as compared to the more current periods.
The growth in direct and assumed written premiums is primarily due to
the increased premium from motorsports insurance products (motorcycle,
snowmobile and watercraft) which increased to $12.9 million during the current
quarter from $2.4 million in the same quarter of 2000. This growth is basically
the result of the premium acquired when GuideOne exited the business at the end
of 2000. The aforementioned growth in direct and assumed written premium was
offset by a decrease in manufactured home and related coverages which decreased
9.0% from $84.0 million during the first quarter of 2000 to $76.5 million in the
current quarter.
Investment Income and Realized Capital Gains
American Modern's net investment income (before taxes and excluding
capital gains) increased 25.1% to $8.8 million in the first quarter of 2001 from
$7.1 million during the first quarter of 2000. The increase in investment income
was primarily the result of the investment of the positive cash flow generated
from underwriting activities, the continued growth of AMIG's investment
portfolio and a change in investment mix which improved investment yields.
American Modern's net realized capital gains (after-tax) decreased to
$0.7 million, $0.08 per share (diluted), for the first quarter, from $1.2
million, $0.13 per share (diluted), for the same quarter in 2000.
Losses and Loss Adjustment Expenses
American Modern's losses and loss adjustment expenses in the first
quarter increased 13.3% to $62.3 million from $55.0 million for the first
quarter of 2000. American Modern's total weather-related catastrophe losses (net
of reinsurance recoveries) for the first quarter amounted to $5.3 million on a
pre-tax basis compared with $2.6 million for the same quarter of 2000. These
losses had an after-tax impact of approximately $0.38 per share (diluted) in the
first quarter of 2001 compared to $0.18 per share (diluted) in the first quarter
of 2000. Excluding catastrophe losses, the property and casualty combined ratio
for the first quarter was 92.4% compared to 92.7% for the same quarter in 2000.
11
Commissions, Other Policy Acquisition Costs and Other Operating and
Administration Expenses
American Modern's commissions and other policy acquisition costs and
other operating and administrative expenses for the first quarter increased 2.1%
to $53.8 million from $52.7 million for the first quarter of 2000. These
increases are due primarily to the continued growth in net earned premiums
offset by a decrease in contingent commission expense due to the decrease in
underwriting income.
Property and Casualty Underwriting Results
American Modern's property and casualty operations generated a pre-tax
underwriting income of $3.5 million during the first quarter of 2001 compared to
$5.3 million in the first quarter of 2000. For the current quarter, American
Modern's combined ratio (ratio of losses and expenses as a percent of earned
premium) for its property and casualty business was 97.0% compared to 95.1% in
the first quarter of 2000. Underwriting profits were lower during the current
quarter compared to the prior quarter due to increased weather-related losses
and higher fire losses.
TRANSPORTATION
- --------------
M/G Transport, the Company's transportation subsidiary, reported
revenues for the first quarter of $9.6 million compared with $7.0 million in the
first quarter of 2000. Pre-tax operating profits for the first quarter increased
to $0.9 million from $0.6 million for the same quarter of 2000. The increases in
revenues and operating earnings were due primarily to the increase in short-term
"spot move" opportunities available during the current quarter compared to the
prior quarter.
LIQUIDITY, CAPITAL RESOURCES AND CHANGES IN FINANCIAL CONDITION
Cash flows from operating and investing activities were used to
decrease the Company's short-term borrowings (Other Notes Payable) from year-end
2000.
On January 25, 2001 the Company's Board of Directors approved an
increase in the number of shares authorized under the Company's Common Stock
Repurchase Program from 500,000 shares to 1,000,000 shares. During the first
quarter of 2001, 112,000 shares were repurchased at a cost of $3.6 million.
Management expects that cash and other liquid investments, coupled with
future operating cash flows, will be readily available to meet the Company's
operating cash requirements for the next twelve months. The Company declared
$0.7 million in dividends to its shareholders during the first three months of
2001.
OTHER MATTERS
COMPREHENSIVE INCOME
- --------------------
The only difference between net income and comprehensive income is the
net after-tax change in unrealized gains on marketable securities. For the three
month periods ended March 31, 2001 and 2000, such net unrealized gains increased
or (decreased), net of related income tax effects, by the following amounts (in
thousands):
2001 2000
---- ----
Three months ended March 31 $(2,923) $4,883
Changes in net unrealized gains on marketable securities result from
both market conditions and realized gains recognized in a reporting period.
12
PRIVATE SECURITIES REFORM ACT OF 1995 - FORWARD LOOKING STATEMENTS DISCLOSURE
- -----------------------------------------------------------------------------
This report contains forward looking statements. For purposes of this
report, a "Forward Looking Statement", within the meaning of the Securities
Reform Act of 1995, is any statement concerning the year 2001 and beyond. The
actions and performance of the company and its subsidiaries could deviate
materially from what is contemplated by the forward looking statements contained
in this report. Factors which might cause deviations from the forward looking
statements include, without limitations, the following: 1) changes in the laws
or regulations affecting the operations of the company or any of its
subsidiaries, 2) changes in the business tactics or strategies of the company or
any of its subsidiaries, 3) acquisition(s) of assets or of new or complementary
operations, or divestiture of any segment of the existing operations of the
company or any of its subsidiaries, 4) changing market forces or litigation
which necessitate, in management's judgement, changes in plans, strategy or
tactics of the company or its subsidiaries and 5) adverse weather conditions,
fluctuations in the investment markets, changes in the retail marketplace or
fluctuations in interest rates, any one of which might materially affect the
operations of the company and/or its subsidiaries. Any forward-looking statement
speaks only as of the date made. We undertake no obligation to update any
forward-looking statements to reflect events or circumstances arising after the
date on which they are made.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of March 31, 2001, the market risks associated with the Company's
investment portfolios have not changed materially from those disclosed at
year-end 2000.
13
PART II. OTHER INFORMATION
THE MIDLAND COMPANY AND SUBSIDIARIES
MARCH 31, 2001
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
On January 25, 2001, the Board of Directors of The Midland Company
approved an increase in the number of shares authorized under the
Company's Common Stock Repurchase Program from 500,000 to 1,000,000
shares. The Company has repurchased all of the 500,000 shares that
were previously authorized under the program.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a.) Exhibit 15 - Letter re: Unaudited Interim Financial
Information
b.) Reports on Form 8-K - None
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 thereunto duly authorized.
THE MIDLAND COMPANY
Date April 12, 2001 /s/ John I. Von Lehman
--------------------------- ---------------------------------
John I. Von Lehman, Executive
Vice President, Chief Financial
Officer and Secretary