UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): February 27, 2006
Alleghany Corporation
(Exact name of registrant as specified in its charter)
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| Delaware
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1-9371
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51-0283071 |
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| (State or other jurisdiction
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(Commission File Number)
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(IRS Employer |
| of incorporation)
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Identification No.) |
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| 7 Times Square Tower, 17th Floor, New York, New York
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10036 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (212) 752-1356
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
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| Item 2.02 |
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Results of Operations and Financial Condition |
On February 27, 2006, Alleghany Corporation (the “Company”) issued a press release on the
subject of its 2005 consolidated earnings. A copy of such release is furnished herewith as Exhibit
99.1. The information hereunder shall not be deemed to be “filed” for the purposes of Section 18
of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities
of that section, nor shall it be incorporated by reference into a filing under the Securities Act
of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a
filing.
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| Item 4.02 |
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Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Review |
On February 27, 2006, the Company, after consultation with the Audit Committee of the Board of
Directors and discussions with KPMG LLP, the Company’s independent registered public accounting firm, determined
that investors should not rely on the Company’s consolidated financial statements for the quarters
ended June 30, 2005 and September 30, 2005 with respect to the incorrect classification of a $4.2
million deferred tax valuation allowance as described below. The error in classification had no
impact on the Company’s net earnings or financial position for any period during 2005.
During the 2005 second quarter, the Company’s wholly-owned subsidiary, World Minerals, Inc.
(“World Minerals”), established a valuation allowance of $4.2 million with respect to a component
of its deferred tax asset. In light of the Company’s disposition of World Minerals on July 14,
2005, this $4.2 million valuation allowance was recorded by the Company as part of discontinued
operations in the consolidated statements of earnings contained in the Company’s Quarterly Report
on Form 10-Q for the quarter ended June 30, 2005. During the 2005 third quarter, the Company
determined that the $4.2 million valuation allowance was no longer necessary, and the reversal by
the Company of such valuation allowance was taken as a benefit through discontinued operations in
the consolidated statements of earnings contained in the Company’s Quarterly Report on Form 10-Q
for the quarter ended September 30, 2005. In accordance with Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes,” the effect of the changes in valuation allowance
described above should have been classified as part of continuing operations.
The
errors are corrected in the Company’s Annual Report on Form 10-K for the year-ended
December 31, 2005, by reflecting such deferred tax valuation
allowance in continuing operations in
Note 18, “Quarterly Results of Operations (unaudited),” to the Company’s consolidated financial
statements, as follows:
2
18. Quarterly Results of Operations (unaudited)
Selected quarterly financial data for 2005 and 2004 presented below (in thousands, except per share
amounts):
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Quarters ended |
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March 31 |
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June 30 |
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September 30 |
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December 31 |
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2005 |
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Restated* |
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Restated* |
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Revenues |
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$ |
278,503 |
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$ |
240,845 |
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$ |
269,695 |
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$ |
306,913 |
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Earnings (loss) from: |
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Continuing operations |
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$ |
61,223 |
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$ |
32,727 |
* |
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$ |
(100,760 |
)* |
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$ |
52,787 |
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Discontinued operations |
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(352 |
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(1,325 |
)* |
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8,271 |
* |
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(237 |
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Net earnings (loss) |
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$ |
60,871 |
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$ |
31,402 |
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$ |
(92,489 |
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$ |
52,550 |
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Basic earnings (loss) per share of
common stock: ** |
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Continuing operations |
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$ |
7.78 |
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$ |
4.15 |
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$ |
(12.77 |
)* |
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$ |
6.68 |
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Discontinued operations |
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(0.04 |
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(0.17 |
)* |
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1.05 |
* |
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(0.03 |
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Total |
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$ |
7.74 |
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$ |
3.98 |
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$ |
(11.72 |
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$ |
6.65 |
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2004 |
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Revenues |
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$ |
239,295 |
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$ |
219,215 |
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$ |
223,806 |
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$ |
273,259 |
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Earnings (loss) from: |
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Continuing operations |
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$ |
57,911 |
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$ |
44,046 |
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$ |
(50,719 |
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$ |
51,460 |
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Discontinued operations |
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4,153 |
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4,677 |
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3,715 |
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2,453 |
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Net earnings |
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$ |
62,064 |
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$ |
48,723 |
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$ |
(47,004 |
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$ |
53,913 |
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Basic earnings (loss) per share of
common stock: ** |
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Continuing operations |
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$ |
7.41 |
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$ |
5.63 |
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$ |
(6.48 |
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$ |
6.57 |
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Discontinued operations |
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0.53 |
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0.60 |
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0.48 |
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0.31 |
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Total |
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$ |
7.94 |
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$ |
6.23 |
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$ |
(6.00 |
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$ |
6.88 |
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| * |
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Quarterly results for June 30 and September 30, 2005 have been restated to correctly account
for a $4.2 million increase in a deferred tax valuation allowance which had been established at
June 30, 2005, and was subsequently reversed at September 30, 2005. In accordance with Statement
of Financial Accounting Standards No. 109, “Accounting for Income Taxes,” the effect of a change in
valuation allowance should be classified as part of continuing operations. Accordingly, the table
above reflects the restatement of such amounts from discontinued operations to continuing
operations and its impact on earnings per share. This restatement had no impact on the Company’s
net earnings or financial position for any period during 2005. |
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Adjusted to reflect subsequent stock dividends. |
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| Item 9.01 |
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Financial Statements and Exhibits |
(c) Exhibits
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99.1 |
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2005 Earnings Release, dated February 27, 2006 |
3