01—Abstract
Summary
Summary of the 10-K filed February 28, 2008. Cited figures are marked; the original filing is the authoritative source.
Aon Corporation's 2007 10-K filing indicates a strong financial performance, with total revenue increasing by 9% to $7.47 billiona, 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 millionb, 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 billionc.
02—Key points
Key Highlights
- Total revenue increased by 9% to $7.47 billion in 2007.
- Income from continuing operations rose 54% to $672 million.
- Net income increased 20% to $864 million.
- Announced definitive agreements to sell CICA and Sterling subsidiaries for approximately $2.75 billion.
- Global restructuring plan targeting $240 million in annualized savings by 2010.
- Share repurchase program authorization increased to $4.6 billion.
- Risk and Insurance Brokerage Services segment remains the largest revenue contributor, accounting for 82% of operating segment revenues.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 28, 2008Financial Statements
| 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 |
05—Questions
Frequently Asked Questions
What are the main drivers of Aon's revenue growth in 2007?
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.
What significant strategic actions did Aon take in 2007?
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.
How is Aon returning value to its shareholders?
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.
What is the outlook for Aon's market conditions based on this report?
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.
06—Continue