This excerpt taken from the PMI 8-K filed Jan 27, 2009.
(b) Other Subsequent Events (Unaudited)
In August 2008, PMI Mortgage Insurance Co. entered into a definitive agreement to sell its wholly-owned subsidiary, PMI Australia and the Parent Company entered into a definitive agreement to sell its wholly-owned subsidiary, PMI Asia. The Parent Company also discontinued the operations of its surety company, PMI Guaranty. The Company recognized an after-tax loss of $63.4 million relating to the sale of PMI Australia on October 22, 2008 and an after-tax loss of $13.2 million on the sale of PMI Asia on December 17, 2008. Since these subsidiaries are reported under the equity method of accounting, they are not presented as discontinued operations.
In connection with the preparation of its consolidated financial statements for the quarter ended March 31, 2008, the Company determined that its investment in FGIC was other-than-temporarily impaired and reduced the carrying value of its investment in FGIC from $103.6 million at December 31, 2007 to zero.
On December 30, 2008, TPG contributed its shares in FGIC and RAM Re to PMI as a capital contribution. Prior to the transfer, TPG held approximately 42% of the issued and outstanding common stock of FGIC and approximately 23.7% of the issued and outstanding common stock of RAM Re.
Effective January 1, 2008, the Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis. The Company elected to adopt the fair value option for certain corporate debt on the adoption date. SFAS No. 159 requires that the difference between the carrying value before election of the fair value option and the fair value of these instruments be recorded as an adjustment to beginning retained earnings in the period of adoption. The Company recognized a net of tax gain of $34.8 million to the beginning retained earnings as of January 1, 2008 related to the initial adoption of SFAS No.
159 for certain debt instruments held by the Company.
THE PMI GROUP, INC. AND SUBSIDIARIES