10-KPeriod: FY2014

Aon plc Annual Report, Year Ended Dec 31, 2014

Filed February 24, 2015For Securities:AON

Summary

Aon plc's 2014 10-K filing highlights a year of revenue growth and improved profitability, driven by performance in both its Risk Solutions and HR Solutions segments. The company reported a 2% increase in total revenue to $12.0 billion, with organic revenue growth of 3%. Operating income saw a significant increase due to revenue growth, decreased restructuring costs, and reduced intangible asset amortization, leading to a higher operating margin. Net income attributable to shareholders rose by 26% to $1.4 billion, with diluted earnings per share increasing by 32% to $4.66. The company's strategy continues to focus on higher-margin, capital-light professional services with recurring revenue streams. Significant share repurchases totaling $2.3 billion were completed during the year, demonstrating a commitment to returning capital to shareholders. Aon also advanced its Redomestication strategy, aiming to enhance growth, innovation, and financial flexibility. However, the company noted headwinds including unfavorable foreign currency exchange rates, economic weakness in continental Europe, and a negative market impact in its Reinsurance business. Despite these challenges, Aon's diversified client base and focus on core segments positions it for continued operational improvement and strategic growth.

Financial Highlights

52 data points
Beta

Revenue

$12.04B

Net Income

$1.40B

11.6% Net Margin

EPS (Diluted)

$4.66

Total Assets

$29.77B

Cash & Equivalents

$374.00M

Free Cash Flow

$1.56B

Financial Statements
Beta
Revenue$12.04B
Operating Expenses$10.08B
Operating Income$1.97B
Interest Expense$255.00M
Net Income$1.40B
EPS (Basic)$4.73
EPS (Diluted)$4.66
Shares Outstanding (Basic)295.50M
Shares Outstanding (Diluted)299.60M

Key Highlights

  • 1Total revenue increased by 2% to $12.0 billion in 2014, driven by organic growth in both Risk Solutions (2%) and HR Solutions (5%).
  • 2Net income attributable to Aon shareholders increased by 26% to $1.4 billion, with diluted earnings per share rising 32% to $4.66.
  • 3Operating margin improved to 16.3% in 2014 from 14.1% in 2013, reflecting organic growth and cost efficiencies.
  • 4The company repurchased $2.3 billion of its Class A Ordinary Shares in 2014, continuing its capital return program.
  • 5Risk Solutions segment generated 65% of total revenue, while HR Solutions accounted for 35%.
  • 6Despite revenue growth, the company faced headwinds from foreign currency fluctuations and economic weakness in continental Europe.
  • 7Aon continued to execute its Redomestication strategy, aiming to optimize fiscal planning and capital allocation.

Frequently Asked Questions

Aon's primary business segments were Risk Solutions, which accounted for approximately 65% of consolidated total revenues, and HR Solutions, which accounted for 35% of consolidated total revenues.

In 2014, Aon repurchased $2.3 billion of its Class A Ordinary Shares and paid $273 million in dividends to shareholders. The company also reported $1.3 billion in net debt issuances and had $5.6 billion remaining under its share repurchase programs.

Aon identified several headwinds including unfavorable foreign currency exchange rates, economic weakness in continental Europe, and a negative market impact in its Reinsurance business. Additionally, the HR Solutions segment experienced price compression in its benefits administration business.

The Redomestication refers to Aon's reincorporation in the U.K. in 2012, moving its corporate headquarters to London. The company stated this move was intended to enhance its focus on growth, product innovation, talent development, and financial flexibility, and to support its strategy of delivering value to shareholders.