Aon plc Quarterly Report for Q2 Ended Jun 30, 2016

Summary

Aon plc reported solid financial results for the period ending June 30, 2016. Revenue for the second quarter decreased slightly by 1% to $2.8 billion, impacted by unfavorable foreign currency exchange rates and divestitures, but was partially offset by a 3% organic revenue growth. For the six-month period, revenue decreased 2% to $5.6 billion, also affected by currency headwinds and divestitures, but supported by 3% organic growth. Net income attributable to Aon shareholders saw a significant increase, rising 53% to $272 million for the second quarter and 16% to $587 million for the six-month period. This improvement was driven by lower operating expenses, including a notable decrease related to legacy litigation settlements and favorable foreign currency impacts, alongside continued organic growth. The company also demonstrated strong free cash flow generation, increasing 51% to $660 million for the first six months of the year, reflecting improved operating cash flows and reduced capital expenditures.

Key Highlights

• 1Revenue for Q2 2016 was $2.766 billion, a slight decrease of 1% from $2.805 billion in Q2 2015, driven by organic growth offset by currency headwinds and divestitures.
• 2Net income attributable to Aon shareholders increased significantly by 53% to $272 million in Q2 2016, compared to $178 million in Q2 2015.
• 3Diluted EPS increased to $1.01 in Q2 2016 from $0.62 in Q2 2015, a substantial improvement.
• 4Operating expenses decreased by 7% in Q2 2016, largely due to lower legacy litigation settlement expenses and favorable foreign currency impacts.
• 5Cash flow from operations for the first six months of 2016 increased by 32% to $764 million, demonstrating robust cash generation.
• 6The company repurchased $750 million of shares in the first six months of 2016, indicating a commitment to returning capital to shareholders.

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