Arthur J. Gallagher & Co. Quarterly Report for Q3 Ended Sep 30, 2018

Summary

Arthur J. Gallagher & Co. (AJG) reported strong financial performance for the nine months ended September 30, 2018. Total revenues reached $5.28 billion, a 11.8% increase over the prior year, driven by growth in both the Brokerage and Risk Management segments. Net earnings attributable to controlling interests were $516.2 million, up 23.7% year-over-year, translating to diluted earnings per share of $2.78, an increase from $2.26 in the prior year period. The company's strategic acquisitions continue to contribute to revenue growth, with total acquisitions for the nine months amounting to $575.5 million. Despite increased debt financing for acquisitions, the company maintained compliance with its financial covenants, demonstrating robust liquidity and operational strength.

Key Highlights

• 1Total revenues increased by 11.8% to $5.28 billion for the nine months ended September 30, 2018, compared to $4.73 billion in the prior year period.
• 2Net earnings attributable to controlling interests grew by 23.7% to $516.2 million for the nine months ended September 30, 2018, compared to $409.8 million in the prior year period.
• 3Diluted earnings per share rose to $2.78 for the nine months ended September 30, 2018, up from $2.26 in the prior year period.
• 4The Brokerage segment remains the largest contributor to revenue, with total revenues of $3.25 billion for the nine months ended September 30, 2018.
• 5Acquisitions remain a key growth driver, with $575.5 million spent on acquisitions during the nine months ended September 30, 2018.
• 6The company's clean energy investments generated substantial earnings of $96.6 million for the nine months ended September 30, 2018.
• 7Cash flows from operating activities were $504.6 million for the nine months ended September 30, 2018, a decrease from $593.2 million in the prior year, primarily due to pension contributions and changes in working capital.

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