Business Context and Reporting Period
This Form 8-K filing by Assurant, Inc. is dated November 9, 2006. The report addresses two primary matters: a restatement of previously issued financial statements regarding cash flow classifications and an update to executive compensation agreements.
Key Financial Metrics and Restatement Details
The filing does not report new revenue, profit, or debt figures. Instead, it details a restatement of the Consolidated Statements of Cash Flows for the quarters ended March 31, 2006, and June 30, 2006, as well as the corresponding 2005 periods. The restatement corrects the classification of net increases/decreases in payables and receivables arising from unsettled investment purchases and sales.
- Impact on Net Cash: The restatement has no impact on the net increase or decrease in cash and cash equivalents for any previously reported period.
- Impact on Other Statements: There is no impact on the Consolidated Balance Sheets, Consolidated Statements of Operations, or earnings per share.
- Classification Shift: Amounts previously classified under operating activities (adjustments to reconcile net income) have been reclassified to investing activities to align with the treatment of available-for-sale investments.
| Period | Activity | Impact of Restatement ($) |
|---|---|---|
| Three Months Ended 3/31/2006 | Operating Activities | 155,646 |
| Three Months Ended 3/31/2006 | Investing Activities | (152,372) |
| Six Months Ended 6/30/2006 | Operating Activities | 141,444 |
| Six Months Ended 6/30/2006 | Investing Activities | (145,579) |
Material Changes and Management Commentary
Management concluded that the prior classifications were incorrect and filed this report to notify investors that the unaudited Consolidated Statements of Cash Flows in the 2006 Forms 10-Q should not be relied upon. The company has implemented enhancements to internal controls over financial reporting, specifically regarding the periodic analysis of the statement of cash flows, to prevent recurrence. The Audit Committee and the independent auditor, PricewaterhouseCoopers LLP, were consulted and informed.
Executive Compensation Update
On November 9, 2006, the Compensation Committee authorized the extension of Change in Control Severance Agreements with several officers, including named executive officers. The term of these agreements is extended through December 31, 2008, effective January 1, 2007.
Investor Verification Checklist
- Verify the filing of Forms 10-Q/A to obtain the restated Consolidated Statements of Cash Flows for the periods ended March 31, 2006, and June 30, 2006.
- Confirm that the restatement does not alter the company's reported net income, earnings per share, or total cash balances.
- Review the updated internal control procedures implemented to address the classification error.
- Note the extension of severance agreements for executive officers through 2008.