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AJG · Arthur J. Gallagher & Co.

30 filings

10-K

AJG 10-K Annual Reports

Arthur J. Gallagher & Co. - 30 annual reports

Filing record · 2016–202610-K1110-Q328-K136

2025
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2025
Arthur J. Gallagher & Co. (AJG) reported a robust fiscal year 2025, demonstrating strong revenue growth driven by its brokerage segment, which accounted for 87% of total revenues. The company successfully navigated a dynamic market, highlighted by significant acquisitions, including AssuredPartners and Woodruff Sawyer, which are expected to contribute to future growth. AJG's global reach is evident with 33% of revenues generated internationally, primarily from Australia, Canada, New Zealand, and the UK. The company's risk management segment also showed positive growth, contributing 13% to revenues. Management emphasized continued investment in technology and talent development as key strategies for ongoing success. Financially, AJG reported adjusted diluted earnings per share of $12.10 for the brokerage segment, a 12% increase year-over-year, and adjusted EBITDAC margin of 36.5%, indicating strong operational profitability. The company managed its debt effectively, funding significant acquisitions through a combination of equity offerings and debt issuances. AJG remains committed to strategic acquisitions, talent retention, and delivering value-added services to its diverse client base across property/casualty, benefits, and risk management solutions.
Feb 17, 2026
2024
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2024
Arthur J. Gallagher & Co. (AJG) reported a strong financial performance for the fiscal year ended December 31, 2024, with significant growth in its Brokerage and Risk Management segments. The company's revenue increased substantially, driven by both organic growth and a robust acquisition strategy, including the recently announced acquisition of AssuredPartners for $13.45 billion, which is expected to close in early 2025 and is being funded through a combination of cash and debt. The company's diversified revenue streams, broad geographic presence across approximately 130 countries, and strong niche market expertise continue to be key drivers of its success. AJG highlighted its commitment to talent development and diversity, noting investments in employee training and a focus on creating an inclusive work environment. The company's financial position remains solid, supported by strong operating cash flows and an effective debt management strategy. While facing various business risks, including economic uncertainty and regulatory complexities, AJG's proactive management and strategic acquisitions position it for continued growth and value creation for its shareholders.
Feb 18, 2025
2023
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2023
Arthur J. Gallagher & Co. (AJG) reported strong performance in its 2023 10-K filing, driven primarily by its robust Brokerage segment, which accounted for 86% of revenues. The company demonstrated significant revenue growth, up 18% year-over-year, and an 18% increase in organic revenues for the combined Brokerage and Risk Management segments, highlighting successful growth both through acquisitions and organic initiatives. The Risk Management segment also saw an 18% increase in revenues, with a notable 16% organic growth. AJG's strategic acquisitions, including Buck, Cadence Insurance, Eastern Insurance, and My Plan Manager, contributed to its expansion and service offering diversification. The company maintained a strong balance sheet with total assets growing to $51.6 billion. While debt levels increased due to strategic acquisitions and financing activities, AJG reported compliance with its debt covenants. The company also declared a quarterly dividend of $0.60 per common share, signaling confidence in its financial position and commitment to shareholder returns.
Feb 9, 2024
2022
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2022
Arthur J. Gallagher & Co. (AJG) reported strong financial results for the fiscal year ending December 30, 2022. The company, a global insurance brokerage, risk management, and consulting services firm, demonstrated significant revenue growth, largely driven by its brokerage segment, which accounts for 85% of its total revenue. This growth was fueled by a combination of robust organic growth and strategic acquisitions, notably the integration of Willis Re, which significantly expanded Gallagher's reinsurance brokerage capabilities. The company's financial health is further supported by its diversified revenue streams and a strategic focus on expanding its global footprint, with 35% of revenues generated internationally. AJG's risk management segment also showed a healthy increase in revenue and earnings. The company's management expressed confidence in its ability to meet liquidity needs and pursue future growth through both organic expansion and further acquisitions, supported by a strong balance sheet and consistent operational execution.
Feb 10, 2023
2021
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2021
Arthur J. Gallagher & Co. (AJG) reported strong performance in its 2021 Annual Report (10-K), demonstrating significant growth driven by its brokerage and risk management segments. A key strategic move during the year was the substantial acquisition of Willis Towers Watson's treaty reinsurance brokerage operations for $3.25 billion, which is expected to enhance its global reinsurance capabilities and market position. The company's diversified revenue streams, robust organic growth, and a consistent track record of strategic acquisitions highlight its stable business model and execution. AJG's financial results reflect the positive impact of the improving economic environment on its client base, leading to increased insurance exposure and claims activity. Despite facing some cost pressures and ongoing investments in technology and talent, the company maintained solid profitability and demonstrated effective management of its operations. The report also details the company's commitment to capital allocation, including dividends and share repurchases, underscoring its focus on shareholder value.
Feb 18, 2022
2020
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2020
Arthur J. Gallagher & Co. (AJG) reported strong performance in its 2020 10-K filing, demonstrating resilience amidst the COVID-19 pandemic. The company's core brokerage segment, accounting for 74% of revenues, saw an increase in commissions and fees, driven by robust customer retention and new business generation, along with favorable premium rate increases. The risk management segment also remained stable, while the corporate segment, which includes clean energy investments, experienced a decrease in revenues primarily due to lower electricity consumption impacting clean coal operations. AJG's growth strategy continues to be heavily influenced by strategic acquisitions, with 27 completed in 2020, bolstering its talent pool, geographic reach, and service capabilities. The company maintained a strong liquidity position with over $1.6 billion in available liquidity at year-end 2020, supported by solid cash flows from operations. While the company navigated the economic uncertainties of the pandemic through cost management initiatives, it reaffirmed its commitment to shareholder returns through consistent dividend payments.
Feb 8, 2021
2019
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2019
Arthur J. Gallagher & Co. (AJG) reported solid performance in its 2019 10-K filing, demonstrating continued growth across its core brokerage and risk management segments. The company's diversified revenue streams, primarily from commissions and fees, are driven by its global reach and specialized niche/practice groups within its brokerage operations. The Risk Management segment also contributes significantly through claims settlement and administration services. Acquisitions remain a key driver of growth, with 46 acquisitions closed in 2019, augmenting its talent pool, geographic presence, and service capabilities. The 'Corporate' segment, largely driven by clean energy investments (IRC Section 45 tax credits), contributed significantly to earnings, though the expiry of some tax credits presents a future consideration. Despite economic headwinds and the inherent cyclicality of the insurance market, AJG's strong client relationships, expertise, and strategic acquisitions position it for sustained future performance. The company highlighted its robust financial position, including a significant credit facility, and a commitment to shareholder returns through dividends.
Feb 7, 2020
2018
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2018
Arthur J. Gallagher & Co. (AJG) reported strong performance for the fiscal year ended December 31, 2018. The company's core brokerage segment, which represents the majority of its revenue, demonstrated robust growth, driven by both organic increases and strategic acquisitions. The risk management segment also contributed positively, showing growth in fees and improved profitability metrics. The corporate segment's performance was significantly influenced by its clean energy investments, which generated substantial tax credits, though the company anticipates a slight decline in this segment's earnings in 2019. AJG's financial health appears solid, with significant cash flow from operations and a well-managed debt structure, enabling continued investment in strategic growth initiatives, including further acquisitions. The company's outlook for 2019 suggests continued modest growth in its core insurance brokerage and risk management businesses, supported by favorable trends in the employee benefits sector and a stable insurance market environment.
Feb 8, 2019
2017
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2017
Arthur J. Gallagher & Co. (AJG) reported strong performance for the fiscal year ended December 31, 2017. The company demonstrated consistent revenue growth across its brokerage and risk management segments, driven by both organic growth and strategic acquisitions. The brokerage segment, representing the largest portion of revenue, saw increased commissions and fees, while the risk management segment also showed positive growth. A significant contributor to the company's revenue was its Corporate segment, largely driven by its clean energy investments which generated substantial income. AJG's financial health appears robust, with significant total revenues and solid net earnings. The company actively manages its capital through share repurchases and dividend payments, indicating confidence in its ongoing financial performance. Management highlighted a focus on continued expansion through mergers and acquisitions, a strategy that has historically driven growth and is expected to continue. Investors can take comfort in the diversified revenue streams and the company's ability to navigate a competitive insurance market.
Feb 12, 2018
2016
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2016
Arthur J. Gallagher & Co. (AJG) presented its 2016 annual report, showcasing a resilient financial performance with total revenues of $5.59 billion, an increase from the prior year. The company's core brokerage segment remains the largest revenue driver, contributing 63% of the total. AJG's risk management segment also showed stability, while its corporate segment, largely driven by clean energy investments, represented 24% of revenues. The company continued its strategic acquisition approach, integrating 37 acquisitions in 2016 to expand its geographic reach and service capabilities. AJG demonstrated a commitment to shareholder returns through consistent dividend payments and share repurchases. The report also highlighted potential risks including economic downturns, competitive pressures, integration challenges from acquisitions, and regulatory changes, particularly concerning its clean energy investments and international operations. Financially, AJG maintained a solid balance sheet with total assets of $11.49 billion and managed its debt effectively, with total consolidated debt at $2.7 billion. The company's liquidity remained strong, supported by operating cash flows and available credit facilities. Management expressed confidence in its ability to meet future financial obligations and fund strategic initiatives. The outlook for 2017 projected continued growth, driven by both organic expansion and strategic acquisitions, with a particular focus on leveraging its expertise in niche markets and cross-selling opportunities.
Feb 13, 2017
2015
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2015
Arthur J. Gallagher & Co. (AJG) reported strong revenue growth in its 2015 10-K filing, with total revenues reaching $5.39 billion, a 17% increase driven by acquisitions and organic growth across its brokerage and risk management segments. The brokerage segment remains the largest contributor, accounting for 62% of revenues, while the risk management segment showed robust organic growth. A significant portion of the company's revenue (25%) is attributed to its 'Corporate' segment, largely from clean energy investments, which generated substantial net after-tax earnings. The company demonstrated effective acquisition integration, completing 44 acquisitions in 2015. While AJG navigates a competitive market with pressure on commission rates, it maintains a diversified revenue base and a strategy focused on expanding its global reach and niche market expertise.
Feb 10, 2016
2014
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2014
Arthur J. Gallagher & Co. (AJG) reported strong performance for the fiscal year ended December 31, 2014, driven by significant growth in its brokerage and risk management segments. The company benefited from a robust acquisition strategy, successfully integrating numerous acquisitions, including large transactions like Oval Group, Crombie/OAMPS, and Noraxis Capital Corporation. These acquisitions substantially expanded AJG's international presence, particularly in the UK and Australia, contributing significantly to its revenue growth. The company also reported positive organic growth across its core segments, indicating the health of its existing operations. A notable contributor to its corporate segment and overall profitability was its clean energy investments, which generated substantial earnings and tax credits. AJG's financial results demonstrate an increase in total revenues, driven by both acquisitions and organic growth. The company maintained expense discipline while investing in growth initiatives. The balance sheet reflects substantial growth in assets, including goodwill and intangible assets, due to the aggressive acquisition strategy. AJG's management expressed optimism about future prospects, anticipating continued expansion through strategic acquisitions and organic initiatives, supported by a strong liquidity position and access to capital markets.
Feb 13, 2015
2013
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2013
Arthur J. Gallagher & Co. (AJG) in its 2013 10-K filing reported robust growth across its core segments. The company demonstrated a significant increase in total revenues, driven by strong performance in its Brokerage segment, which accounted for the majority of revenue. This growth was bolstered by a successful acquisition strategy, with numerous acquisitions completed throughout the year. The Risk Management segment also showed steady improvement. A key highlight was the substantial contribution from the company's clean energy investments, particularly IRC Section 45 tax credits, which significantly boosted earnings. AJG also managed its expenses effectively and maintained a strong liquidity position, supported by its credit facilities and note purchase agreements. Looking ahead, AJG expressed confidence in its ability to continue its growth trajectory through ongoing acquisitions and organic expansion. The company highlighted its commitment to shareholder value through dividends and potential stock repurchases. The report also detailed the company's risk factors, including economic uncertainties, competitive pressures, and regulatory changes, while also emphasizing its strategy to mitigate these risks through diversification and strong operational execution.
Feb 7, 2014
2012
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2012
Arthur J. Gallagher & Co. (AJG) reported strong performance in its 2012 fiscal year, driven by growth in its brokerage and risk management segments. The company's total revenues increased to $2.52 billion, with the brokerage segment accounting for 73% of this revenue. AJG continued its strategic acquisition approach, completing 58 acquisitions in 2012, which contributed significantly to its revenue growth. The company also highlighted progress in its clean energy investments, which are expected to contribute positively to earnings in the coming years. Despite economic headwinds, AJG demonstrated expense discipline and workforce management, leading to improved profitability and adjusted EBITDAC margins. The company's international operations also expanded, now representing 20% of total revenues. Looking ahead, AJG anticipates continued growth through a combination of organic expansion and further acquisitions. The firm's strategic focus on niche/practice groups and middle-market accounts, coupled with its integrated service offerings, positions it well for future success. Management expressed confidence in the company's ability to navigate the uncertain economic environment and generate value for shareholders.
Feb 8, 2013
2011
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2011
Arthur J. Gallagher & Co. (AJG) reported strong growth in its 2011 annual report, driven by a significant increase in both brokerage and risk management segments. Total revenues reached $2.13 billion, up from $1.86 billion in 2010, with the brokerage segment accounting for 73% and the risk management segment for 26% of revenues. The company successfully integrated numerous acquisitions, notably the acquisition of Heath Lambert, which contributed significantly to the international revenue growth, with international operations comprising 19% of total revenues by year-end 2011. AJG demonstrated expense discipline and generated positive organic growth across its core businesses. The company's financial performance was bolstered by a recovery in commercial property/casualty rates, which showed upward trends in the latter half of the year, coupled with a robust acquisition strategy that expanded its global footprint and service capabilities. While facing headwinds from the uncertain economic environment, AJG's management highlighted improved operating results and a continued focus on expanding international operations. The company also noted potential benefits from the 2010 Health Care Reform Legislation, which could create opportunities in its employee benefits consulting business. Investments in clean energy, specifically IRC Section 45 clean coal production plants, are expected to provide future tax credits and earnings, although subject to inherent risks and uncertainties. AJG maintained a strong balance sheet with significant cash reserves and managed its debt effectively, demonstrating a commitment to financial stability and shareholder returns.
Feb 14, 2012
2010
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2010
Arthur J. Gallagher & Co. (AJG) reported total revenues of $1,864.2 million for the fiscal year ended December 31, 2010, a 7.8% increase from $1,729.3 million in 2009. This growth was driven primarily by the brokerage segment, which accounted for 72% of total revenues, showing an increase of 5.0% to $1,340.6 million. The risk management segment also saw a modest 2.0% increase in revenue, reaching $462.1 million. The company highlighted its continued acquisition strategy, completing 19 acquisitions in 2010, contributing to revenue growth despite a challenging economic environment that led to organic revenue declines in both the brokerage and risk management segments. Net earnings for 2010 were $174.1 million, or $1.66 per diluted share, an increase from $128.6 million, or $1.28 per diluted share, in 2009. The company managed its expenses effectively, maintaining its Adjusted EBITDAC margin in the brokerage segment at 21.9%. A significant portion of the report details the company's clean-energy investments and the associated risks, particularly those related to IRC Section 45 tax credits, which present both opportunities and uncertainties for future earnings. AJG's financial position remained solid, supported by a strong credit facility and consistent dividend payments.
Feb 7, 2011
2009
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2009
Arthur J. Gallagher & Co. (AJG) reported total revenues of $1,729.3 million for the fiscal year ended December 31, 2009, an increase of 5.1% from the prior year. The Brokerage segment remains the largest contributor, accounting for 74% of total revenues, with a 7% year-over-year increase in commissions and fees. The company's financial performance was impacted by a soft insurance market, leading to a 3% organic decline in brokerage commissions and fees. Despite this, AJG demonstrated resilience through strategic acquisitions and expense management, including workforce reductions. The company maintained its long-term debt at $550 million, ending the year with total assets of $3,250.3 million and total stockholders' equity of $892.9 million. AJG also continued its commitment to shareholder returns by declaring dividends, though no shares were repurchased during 2009. Key financial highlights include a strong performance in the Risk Management segment despite a slight revenue decrease, and ongoing investments in clean energy ventures. The company's outlook suggests continued growth through organic expansion and strategic acquisitions, navigating the challenging economic environment.
Feb 5, 2010
2008
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2008
Arthur J. Gallagher & Co. (AJG) reported total revenues of $1,645.0 million for the fiscal year ended December 31, 2008, a slight increase from $1,623.3 million in 2007. The Brokerage segment remains the largest revenue contributor, accounting for 72% of total revenues, driven by commissions and fees. The Risk Management segment contributed 28% of revenues, primarily through fees. The company experienced a decrease in earnings from continuing operations to $111.4 million in 2008 from $154.6 million in 2007, impacted by acquisitions, increased compensation, operating expenses, and amortization related to acquired intangibles. Despite the challenging economic environment, AJG continued its growth strategy through 37 acquisitions in 2008, focusing on expanding its brokerage and risk management operations, and also announced significant acquisitions in early 2009. The company's financial position as of December 31, 2008, showed total assets of $3,271.3 million and total liabilities of $2,532.8 million, resulting in stockholders' equity of $738.5 million. Gallagher maintained a repurchase plan for its common stock, though no shares were repurchased in 2008. The company also continued its dividend payments, with the dividend per common share increasing slightly compared to the previous year. Key risks highlighted include the cyclical nature of insurance premiums impacting commission revenues, significant competition within the brokerage and risk management sectors, and the adverse effects of disruptions in the global credit markets. The company also addressed legal and regulatory scrutiny concerning contingent commission arrangements, with ongoing settlements and appeals.
Feb 6, 2009
2007
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2007
Arthur J. Gallagher & Co. (AJG) reported 2007 total revenues of $1,623.3 million, up 10% from $1,470.1 million in 2006, with net earnings of $138.8 million, or $1.43 diluted per share, versus $128.5 million ($1.31) a year earlier. Earnings from continuing operations rose 20% to $154.6 million. The increase was helped by acquisitions (21 deals in 2007 with $215.0 million of cash paid) and by a $9.0 million charge in 2006 that did not recur, but organic growth in commissions and fees slowed to 2%, reflecting a soft P/C pricing market in which Lehman data showed average premium rate declines of roughly 11-13% per quarter. Results were also affected by a $15.8 million loss from discontinued operations, tied to the planned exit of the global reinsurance and Irish wholesale brokerage businesses. The balance sheet and capital structure changed meaningfully in 2007. Gallagher issued $400.0 million of senior notes in August 2007 (6.26% Series A due 2014 and 6.44% Series B due 2017) and used the proceeds for acquisitions and share buybacks. It repurchased 9.2 million shares for $260.8 million, reducing shares outstanding to 92.0 million from 98.4 million, and stockholders' equity fell to $715.5 million from $864.1 million. The company expects its effective tax rate to rise to roughly 39-41% in 2008, because Section 29 tax credits expired on December 31, 2007, and the 2007 rate of 22.7% was flattered by those credits. Risk factors center on the contingent commission investigations and MDL settlement (now under appeal), the cyclical soft market, the loss of the Section 29 credits, and the Financial Services segment's legacy synthetic-fuel exposure, which carries up to $287.5 million of indemnification risk. The Risk Management segment (third-party claims administration) grew organic fees 11%, while the Brokerage segment grew organic commissions and fees only 2%.
Feb 4, 2008
2006
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2006
Arthur J. Gallagher & Co. (AJG) reported 2006 total revenues of $1,534.0 million, up about 3% from $1,483.9 million in 2005, but net earnings rose sharply to $128.5 million ($1.31 diluted EPS) from $30.8 million ($0.32) in 2005, which had been depressed by $219.6 million of litigation, contingent commission, and claims-handling charges. Excluding those non-recurring items, 2006 earnings were materially more stable, though the company is clearly in a transition period as retail contingent commissions have been largely eliminated and the broader commercial P/C pricing market has softened. The Brokerage segment grew revenues about 7% to $1,070.7 million, driven by acquisitions (ten asset purchases and one stock purchase in 2006) and organic commission and fee growth of 6%. Risk Management (Gallagher Bassett) grew revenues about 8% to $401.3 million with 8% organic fee growth. The Financial Services segment was the weak spot, with revenues falling 45% to $62.0 million and a $25.1 million net investment loss, largely tied to IRC Section 29 synthetic fuel investments, an oil-price hedge loss, and write-downs. Retail contingent commissions fell to just $2.5 million from $28.8 million in 2005, which management expects will keep weighing on pretax earnings. Investors should weigh several risk items: the Section 29 tax credits expire December 31, 2007 absent extension and could push the effective tax rate to roughly 40-42%; the MDL settlement ($28.0 million to clients plus $8.9 million in attorney fees) is subject to court approval; state investigations into contingent commissions remain open; and the $1.20 dividend and share repurchases continued, with 2007 quarterly dividend raised to $0.31. Cash from operations fell to $104.7 million from $188.8 million, reflecting Headwaters and AVC-related payments.
Feb 5, 2007
2005
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2005
Arthur J. Gallagher & Co. (AJG) reported a sharply weaker 2005 as litigation and retail contingent commission charges overwhelmed otherwise solid operating growth. Total revenues rose 3% to $1,483.9 million from $1,437.0 million, and commissions plus fees grew steadily, with fee revenue up about 10%. However, pretax earnings from continuing operations fell to a loss of $2.8 million from $237.3 million in 2004, driven by a $131.0 million litigation charge (largely the Headwaters settlement at Financial Services), $73.6 million of retail contingent commission related matters, and a $15.0 million claims handling obligation charge. Net earnings dropped to $30.8 million, or $0.32 diluted per share, versus $1.99 in 2004. Excluding these items, management's view is that earnings per employee would have been roughly comparable to prior years, though this is a non-GAAP presentation. The more important forward-looking message for investors is the structural shift in the Brokerage business. Gallagher stopped accepting volume-based or profit-based contingent commissions from retail clients effective January 1, 2005, and under the May 2005 Illinois Assurance of Voluntary Compliance it will not accept U.S. retail contingent compensation going forward. Management expects contingent commission revenue to decline substantially, which it says will weigh on pretax earnings beginning in 2006, while the new compensation model is still in early stages with no assurance it will replace lost revenue. Organic commission and fee growth was only 2% in Brokerage in 2005, and roughly 4% overall once the Risk Management Segment is included. Balance sheet and liquidity remain sound: no corporate borrowings were outstanding at year-end, cash and equivalents were $317.8 million, the $450 million credit facility was undrawn, and stockholders' equity was $769.1 million. Cash flow from operations fell to $188.8 million, reflecting the Headwaters and AVC payments. Investors should also weigh continuing exposure in the Financial Services segment, where Section 29 synthetic fuel tax credits expire at the end of 2007, oil-price phase-out risk could curtail operations, and numerous contingent commission lawsuits and state investigations remain pending.
Feb 8, 2006
2004
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2004
Arthur J. Gallagher & Co. (AJG) reported strong 2004 results, with total revenues rising 17% to $1,480.3 million from $1,263.8 million, and net earnings up 29% to $188.5 million, or $1.99 diluted EPS, from $1.57 in 2003. Growth was driven by the Brokerage and Risk Management segments, supported by 19 acquisitions in 2004 and a 16% organic fee growth rate in Risk Management. Brokerage organic growth in commissions and fees slowed sharply to 2%, from 10% in 2003, reflecting softening P/C premium rates and lost business. Pretax earnings were also helped by Financial Services, where investment income rose substantially, largely from Syn/Coal (IRC Section 29) installment gains and FIN 46 consolidation effects. That segment's results depend heavily on tax credits and oil prices, and its management says the Syn/Coal credits could face legislative, IRS, or litigation risk. The most material risk flagged for investors is the broker compensation scandal. Gallagher said it will stop accepting new volume-based or profit-based contingent commissions starting January 1, 2005, which could substantially reduce future contingent commission revenue (2004 contingent commissions totaled $39.5 million, of which $33.8 million were volume/profit-based). Gallagher faces investigations by the New York AG and other state regulators, plus multiple private class actions and a shareholder derivative suit. Separately, the Headwaters trial, which began January 11, 2005, seeks $140 million in damages from a Gallagher subsidiary tied to the synfuel business. Management says the outcome cannot be predicted and could have a material adverse effect. Balance sheet and capital management remained solid: total assets grew to $3.24 billion, stockholders' equity reached $761.0 million (up from $619.1 million), there was no corporate borrowing outstanding at year-end, and $224.6 million of cash was on hand. Cash from operations was $277.2 million. The company raised its quarterly dividend to $0.28 for 2005, a 12% increase, and reported $56.2 million of share repurchases in 2004.
Jan 28, 2005
2003
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2003
Arthur J. Gallagher & Co. (AJG) reported strong 2003 results in its 10-K filed February 9, 2004. Total revenues rose 19% to $1,263.8 million from $1,060.3 million, and net earnings increased 13% to $146.2 million, or $1.57 diluted EPS (up from $1.41). Growth was driven by the Brokerage segment, where commissions rose 13% and fees rose 24%, and by Risk Management fees, which grew 14%. Organic commission and fee growth was 10% in Brokerage and 14% in Risk Management. The hard insurance market after September 11 boosted premium rates and commissions, though management noted that the rate of premium increases had begun to moderate, which could pressure future brokerage revenue. The Financial Services segment was a drag on the quarter's results. Gallagher took a $25.7 million pretax write-down on venture capital investments in Q1 2003, and the segment posted a pretax loss of $21.9 million. Its revenue figures were also distorted by the early adoption of FIN 46, which consolidated a Syn/Coal partnership and added $46.4 million of investment income offset by $44.1 million of investment expenses. Gallagher is also exposed to a contingent liability tied to Section 29 synthetic fuel tax credits, which are under IRS and Senate scrutiny; its stated maximum after-tax exposure is $81.3 million net of insurance. Balance sheet strength improved: the company had no corporate borrowings at year end, $193.6 million in cash, and stockholders' equity of $619.1 million. Gallagher also raised its quarterly dividend 39% to $0.25 for 2004. For investors, the core brokerage and risk management franchise remains healthy, with a return on beginning equity of 28% and sustained organic growth. The main watch items are the durability of the hard market, the volatility and regulatory risk of the investment portfolio, and the tax credit exposure.
Feb 9, 2004
2002
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2002
Arthur J. Gallagher & Co. (AJG), the NYSE-listed insurance broker, reported 2002 total revenues of $1.101 billion, up 19% from $923 million in 2001, and net earnings of $129.7 million, up about 4%. Diluted EPS was $1.41 versus $1.39. Growth came mainly from the Insurance Brokerage Services segment, where commissions rose 23% to $663.5 million on record new business of $145.9 million and above-average rate increases in the post-September 11 hard market. Organic commission growth was 17% and organic fee growth was 15%. Management expects the hard market to continue in 2003, though it notes that the pace of premium increases is leveling off. Earnings quality was weaker than the top line suggests. Pre-tax earnings rose only 31% to $185.3 million, and the effective tax rate jumped to 30.0% from 11.7% as tax credits from synthetic fuel partnerships shrank. Financial Services absorbed about $29 million of investment write-downs in 2002, including $10.6 million of other-than-temporary impairments on marketable securities and $19.6 million on venture capital holdings. Gallagher also took a $3.0 million equity-method loss tied to Beacon Hill, a fund manager at its 25%-owned Asset Alliance affiliate that was hit by an SEC injunction. Installment gains from synthetic fuel sales, which run through 2007, partly offset these charges. Management guided to a mid-30% effective tax rate for 2003. Balance sheet and capital activity were significant. Total assets grew to $2.46 billion and stockholders' equity rose to $528 million, driven by seven purchase acquisitions paid largely in stock and the 2002 consolidation of an airplane leasing company. Long-term debt related to limited partnerships reached $128 million, and short-term borrowings on the $150 million unsecured credit facility stood at $25 million, expiring September 2003. The company also raised its quarterly dividend 20% to $0.18 and disclosed contingent exposure through letters of credit, guarantees, and investment funding commitments totaling about $114.5 million.
Mar 25, 2003
2000
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 2000
Arthur J. Gallagher & Co. (AJG) reported robust financial performance for the fiscal year ended December 31, 2000. The company demonstrated consistent revenue growth, driven by both its Insurance Brokerage Services and Risk Management Services segments. Fee revenue, in particular, saw significant expansion, signaling the success of its risk management offerings. The company also highlighted strategic acquisitions throughout the year, with fourteen insurance brokerage firms and two benefits consulting companies being integrated, many accounted for as poolings of interests, which led to restatements of prior periods for comparative accuracy. AJG's financial condition remained strong, supported by healthy operating cash flows and a solid credit facility. The company's investment portfolio also contributed positively to its financial results. With a focus on expanding its core services and exploring diversification opportunities within financial services, AJG appears well-positioned for continued growth. The company's ability to navigate a hardening insurance market, characterized by increasing premium rates, suggests resilience and adaptability. Investors can look forward to continued focus on organic growth complemented by strategic acquisitions.
Mar 27, 2001
1999
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 1999
Arthur J. Gallagher & Co. (AJG) reported strong 1999 results in its Form 10-K for fiscal year ended December 31, 1999. Total revenues rose 8% to $605.8 million from $559.6 million (restated for pooling acquisitions). Pretax earnings increased 21% to $104.2 million, and net earnings rose 17% to $67.8 million. Diluted EPS was $1.76, up 14% from $1.54, after adjusting for the two-for-one stock split paid March 15, 2000. Growth was driven mainly by Risk Management Services, where fee revenue grew 11% and segment pretax earnings rose 43%. Insurance Brokerage commissions grew only 4%, reflecting a soft property/casualty pricing market that management expects to persist through 2000. The balance sheet remains conservative. Total assets were $884.1 million, stockholders' equity was $242.5 million, and the company carried no long-term debt. Short-term borrowings were $15.0 million under $45.0 million of credit lines expiring April 30, 2000, plus an undrawn $20.0 million revolver. Operating cash flow was $63.7 million, and the Board raised the dividend, with the first-quarter 2000 dividend declared at $0.23 per share, up 15%. Management reports no material pending litigation and no major Y2K disruptions. For investors, the key points are consistent double-digit earnings growth, a risk management segment that is gaining momentum, and a management outlook that expects fee growth from alternative insurance, captive, and self-insurance services to continue, while commission growth stays under pressure from soft pricing. The company also disclosed a pipeline of acquisitions, with five Youngdahl, Rebholz, Towle, Powell and MBR deals effective February 29, 2000 and further candidates in discussion.
Mar 23, 2000
1998-A
Arthur J. Gallagher & Co. Annual Report (Amendment), Year Ended Dec 31, 1998
Arthur J. Gallagher & Co. (AJG) filed this Amendment No. 1 to its 1998 Form 10-K to restate prior financials after an SEC staff review of its pooling-of-interests accounting. The SEC applied stricter materiality guidelines than the company had used, which led AJG to restate for three additional 1998 pooling acquisitions and three 1999 pooling acquisitions. The restatement is modest in size: restated 1998 total revenues are $554.5 million (up from the previously reported $544.4 million) and net earnings are $57.4 million (up from $56.6 million), with diluted EPS of $3.06 versus $3.09 previously reported. The restatement lowered per-share earnings by roughly $0.01 to $0.03 per year. Underlying performance was solid. Restated 1998 revenue grew about 7% year over year, pretax earnings rose about 1% to $85.5 million, and net earnings rose about 2% to $57.4 million. Growth came mainly from Risk Management Services, where fee revenue rose 15% on new business and favorable retention, while Insurance Brokerage Services grew 7%. Investment income fell 24% because of weaker returns from outside managers and a $24.0 million reduction in invested assets, and 1997 comparisons were flattered by $9.0 million of non-recurring gains. Return on beginning equity was 33%, and the dividend was raised to $1.40 per share for 1998, with the first-quarter 1999 dividend announced at $0.40. The balance sheet is conservative. Stockholders' equity reached $205.5 million, the company carried no long-term debt, and it had no borrowings under its $20 million revolver at year end. Management expects continued pricing pressure in the soft property/casualty market, with growth tied to alternative risk, captive, and self-insurance services. Investors should note that the company's revenues are seasonal, peaking in the third quarter, and that operating cash flow is volatile because of timing swings in premiums receivable and payable.
Jul 7, 1999
1998
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 1998
Arthur J. Gallagher & Co. (AJG) reported solid 1998 results, with total revenues up 8% to $540.7 million (from $500.5 million in 1997, restated for poolings) and net earnings up 3% to $56.5 million. Diluted EPS (net earnings per common and common equivalent share) was $3.10, versus $3.17 in 1997, a decline driven by a larger share count after acquisitions and by the absence of 1997's non-recurring gains of $9.0 million. Growth came mainly from Risk Management Services, where revenues rose 18% to $168.8 million, and from Insurance Brokerage Services, where revenues rose 9% to $362.5 million. Investment income fell 23% to $18.5 million because of weaker returns from outside fund managers during volatile 1998 equity markets. The balance sheet expanded: total assets grew to $746.0 million and stockholders' equity rose to $202.5 million, while the company carried no borrowings under its $20 million revolving credit facility at year end. Management expects soft property/casualty premium pricing to persist into 1999, which could pressure commission revenues, and it points to alternative-market risk management and self-insurance services as the main growth drivers. The company also raised its dividend, with the first-quarter 1999 payment set at $0.40 per share, up 14%, and it completed three poolings of interest acquisitions in February 1999. For investors, the filing shows a steady, cash-generative brokerage franchise with high return on beginning equity (34%), a modest but growing dividend, and an acquisition strategy funded mostly with stock. Watch for the investment portfolio's sensitivity to market volatility, the cyclical soft-market pressure on commissions, and the slight dilution in per-share earnings.
Mar 26, 1999
1996
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 1996
Arthur J. Gallagher & Co. (AJG) reported record 1996 results, with total revenues up 4% to $456.7 million and net earnings up 8% to $45.8 million, or $2.63 per share. Growth was driven mainly by the fee business (Gallagher Bassett Services), which rose 6% to $171.5 million, while commissions grew a more modest 2% to $261.5 million, reflecting a soft property/casualty market with flat-to-declining renewal rates and lost business. Pretax margin held near 15% and return on beginning equity was 36%, supported by a fairly capital-light model (operating cash flow was $33.6 million, down from $43.5 million, partly due to premium timing). The balance sheet remained conservative: total assets were $590.4 million, stockholders' equity rose to $134.5 million, and long-term debt was only about $2.3 million. The company had $10.0 million of short-term borrowings under $27.5 million of credit lines, used to fund expanded investment activity, and no borrowings under its $20 million revolver. The company is repurchasing shares under a plan extended through June 1997, bought back 645,000 shares in 1996, and raised its quarterly dividend to $.29 (with a $.31 first-quarter 1997 declaration). Management expects pricing to remain soft through 1997, so growth will depend on new business production in risk management, benefits, and self-insurance services, plus acquisitions such as the January 1997 poolings with Byerly & Company and Arnold & Company. From an investor's perspective, the key takeaways are steady, moderately growing earnings with high returns on equity, a diversified fee base that is cushioning slower commission growth, and a low-leverage balance sheet. Risks include continued pricing pressure in the insurance market, quarterly revenue volatility tied to policy renewal timing, intense competition from larger brokers, and reliance on acquisitions for expansion.
Mar 21, 1997
1995
Arthur J. Gallagher & Co. Annual Report, Year Ended Dec 31, 1995
Arthur J. Gallagher & Co. reported solid 1995 results, with total revenues up 12% to $412.0 million from $367.7 million. Commissions rose 9% to $235.9 million on $30.4 million of new business production, and fees rose 13% to $160.1 million, led by Gallagher Bassett Services. Net earnings grew 21% to $41.5 million, and earnings per share rose 20% to $2.54. Pretax margin improved to about 15% from 14%, and the effective tax rate fell to 34%. Management attributes the growth to risk management and self-insurance services, which it expects to remain a major contributor to fee growth in 1996. The company's acquisitions are accounted for as poolings of interests, so prior periods are restated, which makes year-over-year comparisons less direct. The balance sheet is conservative. Total assets were $495.8 million and stockholders' equity was $118.1 million, up from $96.2 million, largely from retained earnings. Long-term debt was only $3.4 million, and the $20 million revolving credit facility had no borrowings outstanding. Much of the balance sheet consists of fiduciary premium funds, with $263.4 million of premiums payable to insurers offset by $193.7 million of receivables and $67.7 million of restricted cash. Management says internally generated cash is sufficient for foreseeable needs. Dividends were raised to $1.00 per share for 1995 from $0.88, and the first-quarter 1996 dividend was increased 16% to $0.29. Risks remain. Management describes a prolonged soft property and casualty market with flat-to-reduced renewal commissions, lower interest income, and intense competition from larger brokers. Revenue is also seasonal, driven by policy renewal timing. Other considerations include the sudden death of Vice Chairman John P. Gallagher in February 1996, the Levitt/Kristan pooling acquisition in February 1996, and the company's reliance on continued acquisitions to grow.
Mar 4, 1996