10-QPeriod: Q2 FY2013

Aon plc Quarterly Report for Q2 Ended Jun 30, 2013

Filed July 26, 2013For Securities:AON

Summary

Aon plc's Q2 2013 10-Q filing reveals a 3% increase in total revenue to $2.9 billion, driven by organic growth in both Risk Solutions (3%) and HR Solutions (2%). While net income attributable to Aon shareholders saw a slight decrease of 2% to $241 million for the quarter, year-to-date net income increased by 4% to $502 million. The company highlighted strong cash flow from operations, which increased by 44% year-over-year to $387 million for the first six months. Significant restructuring charges related to the Aon Hewitt plan continued, with the company finalizing additional actions and expecting cumulative costs of $411 million. Despite some headwinds like economic weakness in Europe and pricing pressures in benefits administration, Aon maintained a robust balance sheet and financial flexibility, with substantial capacity for share repurchases and debt management.

Financial Highlights

51 data points
Beta

Revenue

$2.90B

Net Income

$241.00M

8.3% Net Margin

EPS (Diluted)

$0.76

Total Assets

$30.06B

Cash & Equivalents

$266.00M

Free Cash Flow

$271.00M

Financial Statements
Beta
Revenue$2.90B
Operating Expenses$2.52B
Operating Income$382.00M
Interest Expense$48.00M
Net Income$241.00M
EPS (Basic)$0.77
EPS (Diluted)$0.76
Shares Outstanding (Basic)313.70M
Shares Outstanding (Diluted)317.10M

Key Highlights

  • 1Total revenue increased by 3% to $2.9 billion for the quarter, driven by 3% organic revenue growth in Risk Solutions and 2% in HR Solutions.
  • 2Net income attributable to Aon shareholders was $241 million for the quarter, a slight decrease of 2% year-over-year, but year-to-date net income increased by 4% to $502 million.
  • 3Operating income from continuing operations for the quarter was $382 million, a decrease of 3% from the prior year, reflecting increased operating expenses.
  • 4Cash flow from operating activities significantly improved, increasing by 44% to $387 million for the first six months of 2013 compared to the same period in 2012.
  • 5The company continued its restructuring efforts under the Aon Hewitt Plan, incurring $53 million in charges during the quarter and noting total expected costs of $411 million.
  • 6Aon repurchased approximately 3.5 million shares for $225 million in the second quarter of 2013 as part of its $5 billion share repurchase program.
  • 7The company maintained strong liquidity with $573 million in cash and short-term investments and an undrawn $1.2 billion credit facility.

Frequently Asked Questions

Aon's revenue growth of 3% to $2.9 billion in Q2 2013 was primarily driven by organic revenue growth of 3% in its Risk Solutions segment and 2% in its HR Solutions segment.

Net income attributable to Aon shareholders decreased by 2% to $241 million in Q2 2013. This was influenced by a slight decrease in operating income, partly due to increased operating expenses and restructuring charges, which offset the revenue growth.

Aon continued to incur charges related to the Aon Hewitt restructuring plan, with $53 million recorded in Q2 2013. The company expects total cumulative costs for this plan to reach $411 million and is forecasting significant annual savings from these initiatives.

Aon demonstrated strong cash flow from operations and continued its share repurchase program, buying back approximately 3.5 million shares for $225 million in Q2 2013 under its $5 billion authorization. The company also continued to pay dividends.