What were the main drivers of revenue growth in the first quarter of 2008?

Revenue growth was primarily driven by an 8% increase in 'Commissions, fees and other' revenue, which benefited from organic growth in the Risk and Insurance Brokerage Services segment and the positive impact of foreign currency translation. Favorable foreign exchange rates also boosted revenue in international markets across both segments.

How is the company managing costs and improving efficiency?

Aon is executing a significant global restructuring plan initiated in 2007, which aims to streamline operations and reduce future expense growth. The company incurred $60 million in restructuring charges in Q1 2008 and anticipates substantial annualized cost savings, reaching $240 million by 2010. This plan includes workforce reductions and office consolidations.

What is the financial impact of the planned sale of CICA and Sterling subsidiaries?

The sale of CICA and Sterling subsidiaries, expected to close in the second quarter of 2008, is projected to generate a pretax gain of approximately $1.3 billion. These businesses were classified under discontinued operations for all periods presented. The net assets of these subsidiaries totaled approximately $1.5 billion at March 31, 2008.

What is the company's approach to returning capital to shareholders?

Aon continues to actively repurchase its common stock under a $4.6 billion authorized program. In the first quarter of 2008, the company repurchased approximately 8.9 million shares for $375 million. Additionally, Aon paid a cash dividend of $0.15 per share in the quarter.

AON 10-Q Quarterly Report Q1 FY2008 — Revenue, Net Income, EPS

Summary

Aon plc's first quarter 2008 report indicates solid revenue growth, driven by both organic expansion and favorable foreign currency translation. The company reported an increase in net income to $218 million, up from $213 million in the prior year's first quarter. This growth was supported by strong performance in the Risk and Insurance Brokerage Services segment, which constitutes the majority of the company's revenue, and improvements in the Consulting segment, despite some headwinds. Key strategic initiatives are underway, including a global restructuring plan aimed at streamlining operations and reducing costs, with significant savings expected in the coming years. The company also continues its active share repurchase program, further demonstrating a commitment to returning value to shareholders. The pending sale of CICA and Sterling subsidiaries, expected to close in the second quarter, is poised to generate a substantial gain and reshape the company's portfolio. While facing a soft insurance market, Aon is navigating these conditions effectively through diversification and strategic execution.

Key Highlights

1Total revenue increased by 7% year-over-year to $1.93 billion, driven by an 8% increase in 'Commissions, fees and other' revenue.
2Net income rose to $218 million from $213 million in the prior year's quarter, with diluted EPS of $0.68.
3The company is executing a global restructuring plan, recording $60 million in expenses in Q1 2008, and anticipates annualized savings of $240 million by 2010.
4Aon is actively repurchasing shares, with approximately 8.9 million shares bought back for $375 million in Q1 2008, and has an authorized repurchase program of $4.6 billion.
5The sale of CICA and Sterling subsidiaries is expected to close in Q2 2008, with an anticipated pretax gain of approximately $1.3 billion.
6Risk and Insurance Brokerage Services remain the dominant segment, accounting for 82% of operating segment revenue, with growth driven by international markets and reinsurance brokerage.
7Consulting Services revenue increased by 9%, offsetting a decline in Outsourcing revenue, leading to overall segment revenue growth.

Aon plc Quarterly Report for Q1 Ended Mar 31, 2008

Summary

Key Highlights

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