Summary
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.
Financial Highlights
46 data points| Revenue | $3.18B |
| Cost of Revenue | $437.30M |
| Gross Profit | $2.74B |
| Operating Expenses | $535.90M |
| Operating Income | -$268.60M |
| Interest Expense | $50.10M |
| Net Income | $268.60M |
| EPS (Basic) | $2.08 |
| EPS (Diluted) | $2.06 |
| Shares Outstanding (Basic) | 128.90M |
Key Highlights
- 1Total revenues increased to $3,179.6 million in 2013, up from $2,520.3 million in 2012, driven by strong performance in the Brokerage segment.
- 2The Brokerage segment, the largest revenue contributor (68% of total), saw a 17% increase in total revenues and a 5.6% organic growth in commission and fee revenues.
- 3Arthur J. Gallagher & Co. actively pursued its acquisition strategy, completing 30 acquisitions in 2013 with annualized revenues of $369.9 million, contributing significantly to revenue growth.
- 4The Corporate segment's earnings were substantially boosted by clean energy investments, contributing $63.7 million to net earnings, with projections of $65.0 million to $80.0 million for 2014.
- 5Diluted earnings per share increased to $2.06 in 2013, up from $1.59 in 2012.
- 6The company maintained a strong liquidity position, with $298.1 million in cash and cash equivalents and significant availability under its Credit Agreement.
- 7AJG continued to expand its international operations, with 23% of revenues in the combined brokerage and risk management segments generated internationally, up from 21% in 2012.