Printer Friendly

A&A REPORTS 1992 FINANCIAL RESULTS INCLUDING PREVIOUSLY ANNOUNCED SPECIAL CHARGE; BOARD APPROVES REGULAR QUARTERLY DIVIDEND

 NEW YORK, Feb. 11 /PRNewswire/ -- Alexander & Alexander Services Inc. (NYSE: AAL) ("A&A") today reported its 1992 financial results, including a previously announced fourth quarter 1992 special charge related to discontinued or sold underwriting businesses. The special charge is $157.5 million, or $3.83 per share. The company's 1992 net loss was $90.1 million, or $2.20 per share, compared to a 1991 net loss of $12.6 million, or $0.31 per share.
 Excluding special charges for the year, the company's 1992 net income was $68.8 million, or $1.68 per share.
 A&A also announced that the board of directors has declared a regular quarterly dividend of $0.25 per share, payable March 31, 1993, to shareholders of record on March 2.
 T. H. Irvin, chairman and chief executive officer, said, "The board's decision to retain the regular dividend reflects the favorable 1992 operating results of our core businesses as well as confidence in their future prospects. None of the special charge is related to our core businesses."
 Mr. Irvin reported, "Most of the liabilities from the sold or discontinued underwriting operations are expected to be settled over many years. Consequently, the charge should not result in an immediate significant cash outlay unless we decide to purchase reinsurance to cover certain of these liabilities."
 Operating income increased more than 14 percent for the year, excluding exchange rate variances, the results of sold operations and a 1991 special charge.
 Mr. Irvin noted, "Operating income increased significantly in A&A's wholesale and reinsurance broking operations as well as in our human resource management consulting group. Operating income of retail operations was constrained by continued soft pricing in North America, lower interest rates and disappointing results in a U.S. claims administration unit."
 Excluding special charges in 1992 and 1991, income from continuing operations for 1992 was $68.8 million, or $1.68 per share, compared to $37.8 million, or $0.93 per share, in 1991. In 1992, results include $0.70 per share of gains from the sale of non-core businesses. Operating revenues were $1,350.2 million in 1992, an increase of 2.7 percent over 1991 after adjusting for foreign exchange variances and the 1991 revenues of sold operations.
 Operating expenses, excluding exchange rate variances, the results of sold operations and a 1991 special charge, increased 2.1 percent. This reflects A&A's restructuring initiatives and cost-containment programs.
 Fourth Quarter Results
 Including the special charge, the fourth quarter 1992 net loss was $136.6 million, or $3.33 per share, compared to a net loss of $35.2 million, or $0.86 per share, in the fourth quarter of 1991. The 1991 fourth quarter included a $75.6 million, or $1.18 per share, special charge relating to the restructuring of A&A's insurance broking operations and other non-recurring items.
 Excluding special charges in both years, net income for the fourth quarter of 1992 was $19.9 million, or $0.48 per share, compared to $13 million, or $0.32 per share, in 1991. The 1992 quarter includes a $0.28 per share gain which reflects the sale of a non-core U.K. business.
 Consolidated operating revenues were $342.9 million for the quarter, compared to $360.3 million for the comparable 1991 period. Excluding the effects of exchange rate variances and the 1991 revenues of sold businesses, total operating revenues increased by 2.0 percent. This reflects a 2.8 percent increase in commissions and fees and an 11.7 percent decline in fiduciary investment income.
 Total operating expenses were $322.1 million for the 1992 quarter, compared to $397.9 million in the corresponding 1991 quarter. Excluding the special charge in the 1991 quarter as well as the impact of exchange rate variances and the 1991 expenses of sold operations, consolidated operating expenses increased by 2.6 percent.
 1992 Special Charge
 The special charge in 1992 primarily reflects an increase in A&A's estimated ultimate liabilities under indemnities provided in the mid- '80s to purchasers of certain A&A underwriting businesses. The charge also results from an increase in provisions for litigation and other exposures related to sold or discontinued businesses.
 Most of the charge relates to indemnities provided to the purchasers of Sphere Drake Insurance Company. Sphere Drake was sold in 1987 as part of A&A's decision to concentrate on the company's core brokerage and consulting operations.
 The indemnities included a provision covering future losses on certain insurance arrangements between Sphere Drake and Orion Insurance Company during 1953-1967. A&A contended that these arrangements had been contractually settled through a 1975 agreement; however, Orion subsequently contested the enforceability of the agreement and prevailed in English courts.
 The liabilities from these indemnities are primarily asbestosis and environmental related insurance claims. In determining the special charge, A&A estimated future development of these claims as well as claims that have not yet been reported. Additionally, the company considered the collectibility of reinsurance that Orion purchased during this period.
 A&A Services Inc. is a global organization of professional advisers providing risk management, insurance brokerage and human resource management consulting services from offices in more than 80 countries.
 ALEXANDER & ALEXANDER SERVICES INC.
 Operating Results (Unaudited)
 (Millions except per share amounts)
 Periods ended Quarter Twelve Months
 Dec. 31 1992 1991 1992 1991
 Operating Revenues $ 342.9 $360.3 $1,350.2 $1,369.4
 Operating Expenses 322.1 335.3 1,263.5 1,287.1
 Special Charges (A) -- 62.6 -- 62.6
 Operating Income (Loss) 20.8 (37.6) 86.7 19.7
 Other - Net 12.6 (0.9) 33.9 (9.8)
 Special Charges (A) (12.5) (13.0) (16.5) (13.0)
 Income (Loss) Before Income
 Taxes and Minority Interest 20.9 (51.5) 104.1 (3.1)
 Income Taxes (11.6) 16.7 (47.4) (4.9)
 Income (Loss) Before
 Minority Interest 9.3 (34.8) 56.7 (8.0)
 Minority Interest (0.9) (0.4) (1.8) (2.4)
 Income (Loss) from
 Continuing Operations 8.4 (35.2) 54.9 (10.4)
 Discontinued Operations (A) (145.0) -- (145.0) --
 Cumulative Effect of
 Accounting Change (B) -- -- -- (2.2)
 Net Loss $(136.6) $(35.2) $ (90.1) $ (12.6)
 Per Share of Common Stock:
 Income (Loss) from
 Continuing operations $ .20 $ (.86) $ 1.34 $ (.25)
 Discontinued operations (3.53) -- (3.54) --
 Cumulative Effect of
 Accounting Change -- -- -- (.06)
 Earnings (Loss) Per Share $ (3.33) $ (.86) $ (2.20) $ (.31)
 Weighted Average Shares 41.1 40.8 40.9 40.8
 (A) -- In the fourth quarter of 1992, the company recorded a $157.5 million charge relating to its discontinued and sold underwriting businesses. The company recorded a $75.6 million charge in the fourth quarter of 1991 associated with the restructuring of its insurance broking operations and other non-recurring expenses.
 (B) -- The company recognized the cumulative effect of a change in accounting principle relating to deferred compensation expense in accordance with the provision of SFAS No. 106 "Employers Accounting for Postretirement Benefits Other than Pensions".
 -0- 2/11/93
 /CONTACT: Gary Sullivan of A&A, 212-840-8500
 (AAL)


CO: Alexander & Alexander Services Inc. ST: New York IN: INS SU: ERN DIV

GK -- NY086 -- 5897 02/11/93 17:02 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 11, 1993
Words:1205
Previous Article:POLAROID MAKES ANNOUNCEMENT
Next Article:AMERICAN STOCK EXCHANGE DAILY REPORT
Topics:


Related Articles
A&A RESTRUCTURING INSURANCE BROKING OPERATION AND SELLING NON-CORE BUSINESSES; BOARD APPROVES REGULAR QUARTERLY DIVIDEND
EAGLE BANCORP, INC. ANNOUNCES REGULAR AND SPECIAL DIVIDEND
KYSOR INDUSTRIAL ANNOUNCES REGULAR QUARTERLY DIVIDEND; ANNUAL SHAREHOLDERS MEETING APRIL 24
VIRGINIA BEACH FEDERAL FINANCIAL CORPORATION ANNOUNCES ANNUAL MEETING OF STOCKHOLDERS AND REGULAR QUARTERLY DIVIDEND
KYSOR INDUSTRIAL CORPORATION ANNOUNCES RESULTS OF BOARD ACTION
PAINEWEBBER DECLARES REGULAR QUARTERLY CASH DIVIDEND; COMPLETES PREVIOUSLY ANNOUNCED REPURCHASE TRANSACTION
INTEGON CORPORATION DECLARES 60 PERCENT INCREASE IN QUARTERLY DIVIDEND TO 8 CENTS PER SHARE PLUS A 10 PERCENT STOCK DIVIDEND
EAGLE BANCORP, INC. ANNOUNCES SPECIAL DIVIDEND AND INCREASE IN REGULAR QUARTERLY DIVIDEND
AMERICAN BUSINESS PRODUCTS INCREASES DIVIDEND FOR THE 36TH CONSECUTIVE YEAR
WEBSTER FINANCIAL CORPORATION DECLARES 13 CENTS REGULAR QUARTERLY CASH DIVIDEND

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters