Summary
Aon plc (AON) reported its second quarter and first half 2009 financial results, reflecting the ongoing global economic recession and its impact on the insurance and consulting industries. While total revenue experienced a slight decline due to adverse foreign currency translation and lower investment income, the company demonstrated resilience with stable organic revenue in its core businesses, particularly in Americas retail and reinsurance. Despite macroeconomic headwinds such as declining insurable risks and client cost-saving measures, Aon focused on expense discipline and achieved improvements in its year-to-date pretax margins, largely driven by a significant pension curtailment gain and restructuring savings. The company continued to integrate the Benfield merger, incurring associated restructuring costs but also realizing integration benefits. Aon also managed its financial condition effectively, reducing debt and maintaining a strong equity position, while navigating complex legal and regulatory environments. Investors should note the ongoing integration of the Benfield acquisition and the company's efforts to control costs amidst a challenging economic landscape.
Financial Highlights
50 data points| Revenue | $1.88B |
| Operating Expenses | $1.66B |
| Operating Income | $220.00M |
| Interest Expense | $26.00M |
| Net Income | $149.00M |
| EPS (Basic) | $0.52 |
| EPS (Diluted) | $0.51 |
| Shares Outstanding (Basic) | 285.40M |
| Shares Outstanding (Diluted) | 292.70M |
Key Highlights
- 1Total revenue decreased slightly year-over-year for both the quarter and the first half of 2009, primarily due to unfavorable foreign currency translation and lower investment income, partially offset by the inclusion of Benfield's revenue and acquisitions.
- 2Organic revenue remained essentially flat for both the second quarter and the first six months of 2009, indicating resilience in core operations despite the challenging economic environment.
- 3Operating expenses decreased due to favorable foreign currency translation and restructuring savings, although these were partially offset by integration costs from the Benfield merger and higher restructuring charges.
- 4Income from continuing operations attributable to Aon stockholders decreased for the second quarter but increased for the first six months, with the year-to-date improvement largely driven by a significant pension curtailment gain.
- 5Diluted earnings per share from continuing operations saw a decrease in the second quarter but an increase for the first six months, benefiting from lower share counts due to ongoing share repurchases.
- 6The company continued to manage its debt effectively, with total debt decreasing and a new senior unsecured debenture issuance to repay existing credit facility debt.
- 7Aon incurred significant restructuring charges related to both the Aon Benfield Plan and the 2007 Restructuring Plan, aimed at streamlining operations and achieving cost savings.