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.