<PAGE>
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 (February 25, 1994): February 25, 1994
Alexander & Alexander Services Inc.
(Exact name of registrant as specified in its charter)
Maryland 1-8282 52-0969822
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
1211 Avenue of the Americas 10036
New York, New York (Zip Code)
(Address of principal executive offices)
(212) 840-8500
(Registrant's telephone number,
including area code:)
Not Applicable
(Former name or former address,
if changed since last report.<PAGE>
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Item 5. Other Events.
On February 25, 1994, Alexander & Alexander Services Inc. issued the
following press release:
A&A REPORTS FOURTH QUARTER PROFIT OF $0.03 PER SHARE
AND FULL-YEAR PROFIT OF $0.48;
BOARD DECLARES QUARTERLY DIVIDEND OF $0.25 PER SHARE
NEW YORK, Feb. 25 -- Alexander & Alexander Services Inc. (A&A) today reported
net income of $3.2 million, or $0.03 per share, for the quarter ended
December 31, 1993.
For the comparable 1992 quarter, A&A reported a net loss of $137.4
million, or $3.18 per share. The 1992 fourth quarter included a $157.5
million, or $3.61 per share, special charge related to discontinued or sold
underwriting operations as well as a $0.26 per share gain on the sale of a
non-core U.K.-based pension fund management operation.
Consolidated operating revenues of $347.8 million for the 1993 fourth
quarter compares to $345.1 million for the same year-ago period. After
adjusting for lower foreign exchange rates and operations that were sold in
1992, this represents an increase of 3.3 percent.
In a separate action, A&A's Board of Directors has declared a quarterly
dividend of $0.25 per share, payable March 31, 1994, to shareholders of
record on March 17.
The fourth quarter results primarily reflect lower earnings by the
Alexander Consulting Group as well as the expected cost of settling certain
litigation and related claims brought against the company. These factors
were partially offset by lower income taxes, primarily due to the recognition
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of capital-loss carryforwards. T.H. Irvin, chief executive officer, said,
"As previously announced, we installed new ACG management late last year.
The new leadership is moving aggressively to restore competitiveness, growth
and earnings. We see substantial progress already and expect that the
turnaround will continue through 1994."
Robert E. Boni, chairman of the board, said, "The fourth quarter
results make it abundantly clear that we must press ahead with our plans to
improve operations and enhance shareholder return."
Dr. Boni added, "The business environment has changed dramatically for
A&A, and it is clear that the company must also change. A&A has an excellent
global franchise, sound core businesses, and highly professional people who
are serving a very substantial client base. We intend to build on this
foundation."
Operating expenses for the fourth quarter were $340.2 million compared to
$326.8 million in 1992. After adjusting for foreign exchange variances and sold
operations, operating expenses increased by 7 percent, reflecting higher
insurance and professional fees expenses.
Other net non-operating expenses in the 1993 fourth quarter were $9
million higher than 1992. This reflects certain costs associated with the
previously cited legal settlement as well as non-recurring 1992 transactions,
including the $16.7 million gain on the sale of a U.K. operation and a $12.5
million special charge relating to sold underwriting operations.
1993 Full Year Results
Net income for the year ended December 31, 1993, was $26.9 million, or
$0.48 per share, compared to a net loss of $88.0 million, or $2.03 per share,
for the full year of 1992.
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Consolidated operating revenues for 1993 were $1,341.6 million
compared to $1,369.5 million for 1992. The decline in revenue was primarily
due to lower foreign exchange rates and lost revenues from operations sold in
1992. Excluding these factors, revenues increased by 2.8 percent in 1993
over 1992.
Operating expenses for the 12 months ended December 31, 1993, increased
5.7 percent to $1,289.3 million from $1,284.0 million in 1992, after
adjusting for exchange rate variances and expenses of sold operations.
Net non-operating expenses were $37.8 million higher in 1993 versus 1992,
primarily due to $43.8 million of gains on sales of businesses and a $16.5
million special charge, both of which occurred in 1992. Also contributing to
the comparison were significantly higher 1993 litigation costs.
In November 1993, A&A issued 2.3 million shares of common stock to
acquire Clay & Partners, a U.K.-based actuarial and employee benefits
consulting operation. The acquisition was accounted for as a pooling of
interests, and accordingly financial results have been restated for periods
prior to the acquisition.
A&A Services Inc. [NYSE: AAL] 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.
##
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(UNAUDITED)
Alexander & Alexander Services Inc.
Operating Results
Quarter and Twelve Months Ended December 31, 1993 and 1992
(millions except per share amounts)
Quarter Ended Twelve Months Ended
December 31, December 31,
--------------- -----------------
1993 1992 1993 1992
(Restated)(1) (Restated)(1)
---- ---- ---- ----
Operating Revenues $347.8 $345.1 $1,341.6 $1,369.5
Operating Expenses 340.2 326.8 1,289.3 1,284.0
------ ------- -------- --------
Operating Income 7.6 18.3 52.3 85.5
Other - Net (8.9) 12.6 (20.4) 33.9 (2)
Special charges -- (12.5) -- (16.5)
------ ------- -------- -------
Income (Loss) Before
Income Taxes and
Minority Interest (1.3) 18.4 31.9 102.9
Income Taxes 4.5 (9.9) (6.4) (44.1)
------ ------ -------- -------
Income Before
Minority Interest 3.2 8.5 25.5 58.8
Minority Interest -- (0.9) (1.9) (1.8)
------ ------- -------- -------
Income from
Continuing Operations 3.2 7.6 23.6 57.0
Discontinued Operations -- (145.0) -- (145.0)
Cumulative Effect of
Accounting Change (3) -- -- 3.3 --
------ ------- -------- -------
Net Income (Loss) 3.2 (137.4) 26.9 (88.0)
Preferred Stock
Dividend (2.1) -- (6.2) --
------ ------- -------- -------
Earnings Available for
Common & Equivalent
Shares $ 1.1 $(137.4) $ 20.7 $ (88.0)
====== ======= ======== =======
Per Share of Common Stock:
Income from Continuing
Operations .03 .17 .40 1.32
Discontinued Operations -- (3.35) -- (3.35)
Cumulative Effect of
Accounting Change -- -- .08 --
------ ------- -------- -------
Earnings (Loss) Per
Share $ .03 $ (3.18) $.48 $(2.03)
====== ======= ======== =======
Weighted Average
Shares 43.5 43.3 43.4 43.2
====== ======= ======== =======
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(1) On November 30, 1993, the Company acquired all of the partnership
interests of Clay & Partners, a U.K.-based human resource management
consulting operation, for 2.3 million shares of A&A Common Stock.
This acquisition has been accounted for as a pooling of interests and,
accordingly, the consolidated financial statements have been restated
for all periods prior to the acquisition.
(2) The 1992 results include gains of $43.8 million on the sales of three
non-core businesses.
(3) The Company recognized the cumulative effect of a change in accounting
principle relating to income tax expenses in accordance with the
provision of SFAS No. 109 "Accounting for Income Taxes".
##
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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 hereunto duly authorized.
ALEXANDER & ALEXANDER SERVICES INC.
By: /s/ Ronald J. Roessler
Ronald J. Roessler
Senior Vice President &
General Counsel
Date: February 25, 1994
ht:Z:FORM8K:2/25/94<PAGE>
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Alexander & Alexander Services Inc.
1211 Avenue of the Americas
New York, NY 10036
Telephone 212 840-8500
FAX 212 444-4696
VIA EDGAR
February 25, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Current Report on Form 8-K
Gentlemen:
Enclosed for filing please find one conformed copy of the Current Report on Form
8-K for Alexander & Alexander Services Inc. (the "Company"). This filing
notices the February 25, 1994 press release by the Company.
Sincerely,
/s/ Donna Somma
Donna Somma
Assistant Vice President
& Securities Counsel
DS/ht
Enc.
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