10-KPeriod: FY2007

Aon plc Annual Report, Year Ended Dec 31, 2007

Filed February 28, 2008For Securities:AON

Summary

Aon Corporation's 2007 10-K filing indicates a strong financial performance, with total revenue increasing by 9% to $7.47 billion, primarily driven by an 8% rise in its Risk and Insurance Brokerage Services segment. The company also saw a significant increase in income from continuing operations, up 54% to $672 million, and net income rose 20% to $864 million. Key strategic moves during the year included the announcement of definitive agreements to sell its CICA and Sterling subsidiaries, expected to close in Q2 2008, for approximately $2.75 billion. The company also made substantial progress on its restructuring plans, aiming for significant annualized cost savings. Aon continued its commitment to returning capital to shareholders, with its Board increasing the share repurchase program authorization to $4.6 billion.

Financial Highlights

27 data points
Beta

Revenue

$7.23B

Net Income

$864.00M

11.9% Net Margin

EPS (Diluted)

$2.66

Cash & Equivalents

$584.00M

Free Cash Flow

$1.09B

Financial Statements
Beta
Revenue$7.23B
Operating Expenses$6.23B
Operating Income$1.00B
Interest Expense$138.00M
Net Income$864.00M
EPS (Basic)$2.83
EPS (Diluted)$2.66
Shares Outstanding (Basic)305.00M
Shares Outstanding (Diluted)326.90M

Key Highlights

  • 1Total revenue increased by 9% to $7.47 billion in 2007.
  • 2Income from continuing operations rose 54% to $672 million.
  • 3Net income increased 20% to $864 million.
  • 4Announced definitive agreements to sell CICA and Sterling subsidiaries for approximately $2.75 billion.
  • 5Global restructuring plan targeting $240 million in annualized savings by 2010.
  • 6Share repurchase program authorization increased to $4.6 billion.
  • 7Risk and Insurance Brokerage Services segment remains the largest revenue contributor, accounting for 82% of operating segment revenues.

Frequently Asked Questions

Aon's revenue growth in 2007 was primarily driven by its Risk and Insurance Brokerage Services segment, which saw an 8% increase in revenue. Organic revenue growth for this segment was 3%. The Consulting segment also contributed positively, though its growth was more influenced by foreign exchange rates.

The most significant strategic action was the announcement of agreements to sell its CICA and Sterling subsidiaries. This move signals a shift in focus away from insurance underwriting. Additionally, Aon continued to execute global restructuring plans aimed at streamlining operations and reducing costs.

Aon is returning value through its share repurchase program. The company's Board of Directors increased the authorized amount for share repurchases to $4.6 billion, indicating a strong commitment to buying back its own stock, likely using proceeds from the anticipated sale of its subsidiaries.

The report indicates that insurance markets have softened, with price declines seen in many segments, particularly for large and middle-market accounts. Aon expects this soft market to continue into 2008. In its consulting business, client employment levels, driven by economic conditions, are a key factor. Regulatory changes impacting healthcare and employee benefits also play a role.