Summary
Aon Corporation's 2010 10-K filing reveals a company undergoing significant transformation, primarily driven by the acquisition of Hewitt Associates, Inc. This strategic move has substantially reshaped Aon's business segments, creating a combined HR Solutions segment that is now a major contributor to the company's overall revenue. Despite a challenging global economic environment that continues to exert pricing pressure, Aon reported an increase in total revenue to $8.5 billion, largely due to acquisitions. The company demonstrated solid operational performance with adjusted diluted earnings per share from continuing operations remaining stable at $3.12. Aon focused on growing organically, expanding margins, and increasing earnings per share, with organic revenue growth showing improvement year-over-year. Financially, Aon managed its debt effectively, leveraging credit facilities to fund the Hewitt acquisition while aiming to maintain its investment-grade rating. The company's liquidity position remains strong, supported by cash flow from operations and available credit lines. Significant restructuring initiatives were underway in both the Risk Solutions and the newly formed HR Solutions segments, aimed at streamlining operations and achieving cost savings. Investors should note the substantial increase in goodwill and intangible assets due to the Hewitt acquisition, which will impact future amortization expenses. The company's long-term outlook appears cautiously optimistic, balancing the benefits of strategic acquisitions with the ongoing challenges of economic uncertainty and competitive market conditions.
Financial Highlights
52 data points| Revenue | $8.51B |
| Operating Expenses | $7.27B |
| Operating Income | $1.24B |
| Interest Expense | $182.00M |
| Net Income | $706.00M |
| EPS (Basic) | $2.41 |
| EPS (Diluted) | $2.37 |
| Shares Outstanding (Basic) | 293.40M |
| Shares Outstanding (Diluted) | 298.10M |
Key Highlights
- 1Aon completed the significant acquisition of Hewitt Associates, Inc. in October 2010, integrating its operations into the newly formed HR Solutions segment, which now represents 25% of consolidated revenues.
- 2Total revenue increased by 12% to $8.5 billion, primarily driven by acquisitions, with organic revenue growth improving to flat for the year, a positive trend compared to prior year declines.
- 3Adjusted diluted earnings per share from continuing operations attributable to Aon stockholders was $3.12, reflecting stable performance despite a challenging business environment.
- 4The company reported an increase in operating income to $1.2 billion and an improved consolidated operating margin from continuing operations to 14.4% in 2010.
- 5Significant restructuring plans were in place for both the Aon Hewitt (HR Solutions) and Aon Benfield (Risk Solutions) operations, with associated costs and expected savings detailed.
- 6Total debt increased significantly to $4.5 billion, largely due to financing the Hewitt acquisition, impacting the debt-to-capital ratio.
- 7Aon maintained a strong liquidity position, with cash and short-term investments increasing to $1.1 billion, and had no borrowings under its committed credit facilities at year-end 2010.