What is the primary reason for filing this amended 10-Q report?

The primary reason for filing this amended 10-Q is to address accounting and disclosure comments from the SEC. Specifically, it involves restating the financial statements for the first quarter of 2002 to change the timing of when an allowance for a disputed reinsurance recoverable related to World Trade Center employee benefits was recorded. The allowance is now recorded in the fourth quarter of 2001 instead of the first quarter of 2002.

How did the restatement impact Aon's reported net income for Q1 2002?

The restatement increased Aon's reported net income for the first quarter of 2002. Net income available for common stockholders was restated to $160 million ($0.58 basic and $0.57 diluted earnings per share), up from the originally reported $104 million ($0.38 basic and $0.37 diluted earnings per share).

What is the outlook for the planned spin-off of the underwriting business?

Aon's Board of Directors approved the plan to spin off its insurance underwriting businesses. While a favorable IRS ruling has been received, current market conditions are not ideal for raising equity capital as initially planned. Consequently, Aon is exploring alternative options, including a potential sale of all or part of the underwriting business or a partial spin-off.

How has the adoption of new accounting standards (FASB 141 & 142) affected the financial statements?

The adoption of FASB Statement No. 142 means that Aon's goodwill is no longer amortized. This change impacts the comparison of expenses between periods. Additionally, FASB Statement No. 141 required reclassification of certain intangible assets to goodwill. These changes, effective January 1, 2002, do not have a cash impact but alter reported net income and expenses.

AON 10-Q Quarterly Report Q1 FY2002 — Revenue, Net Income, EPS

Summary

Aon plc (AON) has filed an amended quarterly report (10-Q/A) for the period ending March 31, 2002. This amendment primarily addresses accounting and disclosure adjustments requested by the SEC. A significant change involves the restatement of prior period financials to reflect the establishment of an allowance for potential uncollectibility of a reinsurance recoverable related to benefits paid to beneficiaries of World Trade Center employees. This allowance, initially recorded in Q1 2002, has been moved to Q4 2001. Financially, Aon reported a substantial increase in net income available to common stockholders, rising to $159 million ($0.57/share diluted) for Q1 2002, a significant improvement from $18 million ($0.07/share diluted) in Q1 2001. This improvement is driven by higher revenues, particularly in brokerage commissions and fees, and a decrease in expenses, notably the absence of goodwill amortization due to the adoption of new accounting standards (FASB 142) and favorable comparisons to prior year expenses. The company is also progressing with the planned spin-off of its underwriting business, although market conditions may lead to alternative options being considered.

Key Highlights

1Restatement of Q1 2002 financial statements to reflect a $90 million pre-tax allowance for reinsurance recoverables, previously recorded in Q1 2002, now established in Q4 2001.
2Net income available to common stockholders increased significantly to $159 million ($0.57 per diluted share) in Q1 2002, compared to $18 million ($0.07 per diluted share) in Q1 2001.
3Total revenue increased by 15% to $2,088 million in Q1 2002, driven by strong performance in brokerage commissions and fees.
4Adoption of FASB Statements No. 141 and 142 resulted in goodwill no longer being amortized, impacting expense comparisons with prior periods.
5Progress continues on the planned spin-off of the underwriting business, with a favorable IRS ruling received; however, alternative options are being explored due to market conditions.
6The company is actively managing various litigation matters and contingent liabilities, with management believing current provisions and legal advice will not have a material adverse effect on the consolidated financial position.
7Total assets grew to $23.1 billion as of March 31, 2002, with a corresponding increase in total liabilities.

Aon plc Quarterly Report (Amendment) for Q1 Ended Mar 31, 2002

Summary

Key Highlights

Frequently Asked Questions