Summary
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.
Financial Highlights
45 data points| Revenue | $1.86B |
| Cost of Revenue | $64.00M |
| Gross Profit | $1.80B |
| Operating Expenses | $354.60M |
| Operating Income | $163.30M |
| Interest Expense | $34.60M |
| Net Income | $174.10M |
| EPS (Basic) | $1.66 |
| EPS (Diluted) | $1.66 |
| Shares Outstanding (Basic) | 104.80M |
Key Highlights
- 1Total revenues increased by 7.8% to $1,864.2 million in 2010, driven by acquisitions and growth in the brokerage and risk management segments.
- 2The brokerage segment, AJG's largest revenue contributor (72% of total), grew revenue by 5.0% to $1,340.6 million.
- 3Net earnings increased by 35.4% to $174.1 million, or $1.66 per diluted share, compared to $128.6 million, or $1.28 per diluted share, in 2009.
- 4AJG continued its active acquisition strategy, completing 19 acquisitions in 2010, which contributed to revenue growth.
- 5The company maintained expense discipline, with the Adjusted EBITDAC margin in the brokerage segment holding steady at 21.9%.
- 6International operations expanded, with foreign revenues increasing to 13% of total revenues from 11% in the prior year.
- 7The company continues to invest in clean-energy ventures, highlighting both potential benefits from tax credits and associated risks.