-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KNtBAVThsT5iFc2tqiRfjrMXwyZ21SnV0xasLym8/w2EFbcJsx3fc+8/3lj22uBM cNzBzfQEZ5aHtSjIZNoOig== 0000009346-05-000022.txt : 20051222 0000009346-05-000022.hdr.sgml : 20051222 20051222160845 ACCESSION NUMBER: 0000009346-05-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20051222 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review FILED AS OF DATE: 20051222 DATE AS OF CHANGE: 20051222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALDWIN & LYONS INC CENTRAL INDEX KEY: 0000009346 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 350160330 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05534 FILM NUMBER: 051282320 BUSINESS ADDRESS: STREET 1: 1099 N MERIDIAN ST STREET 2: STE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176369800 MAIL ADDRESS: STREET 1: 1099 NORTH MERIDIAN ST STREET 2: STE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: BALDWIN H C AGENCY INC DATE OF NAME CHANGE: 19720309 8-K 1 pr8k122205.txt FORM 8-K CURRENT REPORT 1 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: December 22, 2005 BALDWIN & LYONS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Indiana 0-5534 35-0160330 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (IRS Employer incorporation or organization) File Number) Identification No.) 1099 NORTH MERIDIAN STREET, INDIANAPOLIS, INDIANA 46204 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (317) 636-9800 ---------------------------- Not applicable - -------------------------------------------------------------------------------- (Former name of former address, if changed since last report.) 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 (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c)) 2 ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION The information in this Item 2.02 is furnished pursuant to Item 2.02 and shall not be deemed "filed" for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act regardless of any general incorporation language in such filing. The (Unaudited) table presenting the effects of the expected restatements to the interim financial statements of Baldwin & Lyons, Inc. (the "Company"), as of and for the quarter and six months ended June 30, 2005 and as of and for the quarter and nine months ended September 30, 2005, set forth in Item 4.02(a), is incorporated into this Current Report. ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW (a) On December 20, 2005, and in conjunction with the Company's preparations for year-end reporting, the Company concluded that its accounting treatment for certain of its investments in limited partnerships to be technically incorrect. As a result, the Company will restate its interim financial statements for the 2005 second and third quarters, as described above in Item 2.02. No interim or annual periods ending prior to June 30, 2005 are affected by this restatement. Accounting principles generally accepted in the United States currently require an investor in a limited partnership to record their proportionate share of the investee's net income using the equity method of accounting. To the extent that the limited partnership investees include both realized and unrealized investment gains or losses in the determination of net income or loss, then the investor would also recognize, through its income statement, its proportionate share of the investee's unrealized as well as realized investment gains or losses. The Company invests in limited partnerships that include unrealized investment gains and losses in the determination of their net income or loss. For the quarters ending June 30 and September 30, 2005, the Company recorded its share of limited partnership unrealized gains in shareholders' equity. The Company's income statement reflected only gains or losses reported as realized by the limited partnerships. While the proper carrying value of the investments was recorded on the Company's balance sheet at June 30, 2005 and September 30, 2005, the Company's reporting of the portion of the increase in value of the limited partnerships attributable to unrealized gains as a component of the Company's shareholders' equity has subsequently been determined to be not in technical compliance with authoritative accounting guidance. The Company's chief financial officer has discussed this matter with the Company's independent registered public accounting firm, Ernst & Young LLP, and they are in agreement with revising the accounting treatment. Further, Ernst & Young LLP has read this document and agrees that the above-referenced financial statements should be restated. The Company intends to file restated interim financial statements on Form 10-Q/A for each of the periods ended June 30, 2005 and September 30, 2005 at the earliest possible date and upon completion of an interim review by Ernst & Young LLP. The restatements will contain revisions to reflect income statement recognition of unrealized gains from its investments in limited partnerships to the extent that the limited partnerships followed 3 such accounting treatment in their financial statements. An unaudited table presenting the expected effects of the revisions to the Company's financial statements is set forth below:
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) AS REPORTED ADJUSTMENT AS RESTATED ---------------- ---------------- ---------------- FOR THE THREE MONTHS ENDED JUNE 30, 2005 Net gains on investments $ 532 $ 2,656 $ 3,188 Federal income taxes 3,611 930 4,541 Net income 7,473 1,726 9,199 Basic earnings per share .51 .12 .63 Diluted earnings per share .50 .12 .62 FOR THE SIX MONTHS ENDED JUNE 30, 2005 Net gains on investments $ 5,468 $ 2,656 $ 8,124 Federal income taxes 8,744 930 9,674 Net income 17,819 1,726 19,545 Basic earnings per share 1.21 .12 1.33 Diluted earnings per share 1.20 .12 1.32 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 Net gains on investments $ 2,962 $ 5,384 $ 8,346 Federal income taxes 308 1,885 2,193 Net income 1,152 3,499 4,651 Basic earnings per share .08 .24 .32 Diluted earnings per share .08 .23 .31 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 Net gains on investments $ 8,430 $ 8,040 $ 16,470 Federal income taxes 9,052 2,814 11,866 Net income 18,971 5,226 24,197 Basic earnings per share 1.29 .35 1.64 Diluted earnings per share 1.28 .35 1.63
UNAUDITED BALANCE SHEETS (IN THOUSANDS) AS REPORTED ADJUSTMENT AS RESTATED ---------------- ---------------- ---------------- JUNE 30, 2005 Unrealized net gains on investments $ 41,172 $ (1,726) $ 39,446 Retained earnings 256,897 1,726 258,623 SEPTEMBER 30, 2005 Unrealized net gains on investments $ 47,747 $ (5,226) $ 42,521 Retained earnings 253,203 5,226 258,429
4 SIGNATURES 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. BALDWIN & LYONS, INC. December 22, 2005 By /s/ GARY W. MILLER --------------------------- Gary W. Miller, Chairman and CEO (Chief Operating Officer) /s/ G. PATRICK CORYDON --------------------------- G. Patrick Corydon, Senior Vice President - Finance (Chief Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----