01—Abstract
Summary
Summary of the 10-K filed February 22, 2016. Cited figures are marked; the original filing is the authoritative source.
Aon plc's 2015 10-K report indicates a year of navigating challenging global economic conditions and currency headwinds, which impacted overall revenue.
Despite these pressures, the company achieved organic revenue growth in both its Risk Solutions and HR Solutions segments, signaling underlying business resilience and client demand for its services. Key financial highlights include a reported revenue of $11.7 billiona, with strategic focus on higher-margin, capital-light businesses and strong cash flow generation. The company also actively managed its capital structure through significant share repurchases, returning substantial value to shareholders.
Looking ahead, Aon's strategy appears focused on leveraging its global reach and expertise in risk management and human capital. The company's diversified client base and operational footprint across over 120 countries provide a degree of stability, while ongoing investments in data and analytics suggest a commitment to enhancing client value and competitive positioning. Investors should monitor the company's ability to manage currency fluctuations and adapt to evolving market dynamics within the insurance and HR consulting sectors.
02—Key points
Key Highlights
- Total revenue for 2015 was $11.7 billion, a slight decrease of 3% from 2014, primarily due to a 6% unfavorable foreign currency impact, offset by 3% organic revenue growth in Risk Solutions and 4% in HR Solutions.
- Net income attributable to Aon shareholders was $1.4 billion, a marginal decrease of 1% from 2014, with diluted earnings per share increasing 5% to $4.88.
- Cash flow from operations increased 11% to $2.0 billion, indicating strong cash generation.
- The company repurchased $1.6 billion of its Class A Ordinary Shares during 2015 under its ongoing share repurchase program, with $4.1 billion remaining authorization.
- Operating margin for the consolidated company was 15.8%, with Risk Solutions at 20.3% and HR Solutions at 12.5%.
- Adjusted operating margin (a non-GAAP measure) showed improvement across both segments, reaching 23.6% for Risk Solutions and 18.1% for HR Solutions, highlighting operational efficiency.
- The company reported approximately 69,000 employees worldwide, operating through subsidiaries in over 120 countries.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 22, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $9.48B$12.04B | −21.3% |
| Operating Expenses | $7.89B$10.08B | −21.7% |
| Operating Income | $1.59B$1.97B | −19.3% |
| Interest Expense | $273.00M$255.00M | +7.1% |
| Net Income | $1.39B$1.40B | −0.9% |
| EPS (Basic) | $4.93$4.73 | +4.2% |
| EPS (Diluted) | $4.88$4.66 | +4.7% |
| Shares Outstanding (Basic) | 280.80M295.50M | −5.0% |
| Shares Outstanding (Diluted) | 283.80M299.60M | −5.3% |
05—Questions
Frequently Asked Questions
What were the main drivers of Aon's revenue performance in 2015?
Aon's revenue in 2015 was impacted by several factors. A significant headwind was the unfavorable impact of foreign currency exchange rates, which reduced revenue by 6%. However, this was partially offset by positive organic revenue growth of 3% in the Risk Solutions segment and 4% in the HR Solutions segment, driven by new business generation and strong performance in specific service lines like healthcare exchanges and HR BPO.
How did Aon manage its capital and return value to shareholders in 2015?
Aon actively managed its capital by repurchasing $1.6 billion of its Class A Ordinary Shares during 2015, reflecting confidence in its financial position and a commitment to shareholder returns. Additionally, the company paid dividends of $1.15 per share, totaling $323 million. The company had $4.1 billion remaining authorization for future share repurchases.
What are Aon's primary business segments, and how did they perform?
Aon operates through two main segments: Risk Solutions and HR Solutions. Risk Solutions, accounting for 64% of revenue, provides risk management services and insurance/reinsurance brokerage. HR Solutions, representing 37% of revenue, offers human capital consulting and outsourcing. In 2015, both segments achieved positive organic revenue growth, indicating the demand for their specialized services despite challenging market conditions.
What is Aon's financial health and liquidity position?
The company reported strong cash flow from operations of $2.0 billion, an increase of 11% from the prior year, demonstrating robust cash generation. Aon maintained a healthy liquidity position with $740 million in cash and cash equivalents and short-term investments at year-end 2015. Its investment-grade credit ratings and available credit facilities further supported its financial flexibility.
06—Continue