Aon Reports Fourth Quarter and Full Year 1999 Results.Business Editors CHICAGO Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , IL--(BUSINESS WIRE)--Feb. 8, 2000 As expected from the Company's previous announcement on January January: see month. 10, 2000, Aon Corporation (NYSE NYSE See: New York Stock Exchange : AOC AOC, n an acronym for the Aromatherapy Organizations Council. ) today reported fourth quarter 1999 dilutive net income per share of $0.40 before special charges, down 25% from $0.53 in the year ago period. Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern special charges totaling $150 million, or $0.35 per share, reduced reported net income per share to $0.05 for the fourth quarter of 1999. Special charges taken in the quarter reflect current estimates to settle various matters: $78 million related to pension mis-selling in the U.K., and $72 million for Unicover and other litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. matters. The $78 million special charge related to pension mis-selling is primarily the result of regulations governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. benefit calculations, including the announcement by the U.K. government on December December: see month. 17, 1999. A portion of the Unicover and other litigation special charge relates to an already-settled $27 million Unicover agreement with Reliance Group Holdings, Inc. Several factors reduced earnings per share before special charges to $0.40 for the fourth quarter of 1999. Revenues from disposals of equity investments declined, interest expense increased and amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. related to acquisitions rose. Pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. from insurance brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. and other services declined. This decline was principally related to the absence of Unicover revenues in the 1999 fourth quarter, as well as lower than expected results from non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. . S. insurance brokerage operations. Fourth quarter 1999 revenue increased 10% to a record $1.9 billion from $1.7 billion in the year ago quarter. Fourth quarter 1999 reported net income after special charges was $13 million compared with $139 million in the year ago period. Revenue for the full year was a record $7.1 billion, up 9% from $6.5 billion in 1998. Full year net income after special charges decreased 35% to $352 million in 1999 from $541 million in 1998. Full year 1999 dilutive net income per share before special charges was $2.07, equaling 1998 results. Patrick G. Ryan Ryan may refer to: Places
&uot;On January 10th, we advised investors that, barring unforeseen events, earnings per share for the full year 2000 will be in the $2.10 to $2.20 range. We have received operating plans from our business units and are completing our analysis and consolidation of those plans. At the present time, I have no reason to believe that we can't hit the lower end of that earnings estimate range. &uot;We have assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. an outstanding global network to service our clients' growing and changing needs. Our focus now will turn to improving the efficiency of our operations while growing revenues organically.&uot; Aon Corporation (www.aon.com) is a holding company that comprises a family of insurance brokerage, consulting and insurance underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. subsidiaries. Aon's common stock is listed on the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Chicago and London stock exchanges London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. . This press release may contain certain statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future results, which are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors such as general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, downward commercial property and casualty premium pressures, the competitive environment and the actual cost of resolution of contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. . Further information concerning the company and its business, including factors that potentially could materially affect the company's financial results are contained in the company's filings with the Securities and Exchange Commission.
Aon Corporation
Consolidated Summary of Operations
Fourth Quarter Ended
---------------------------
(millions except per share data) Dec. 31, Dec. 31, Percent
1999 1998 Change
--------- -------- --------
Revenue
Brokerage commissions and fees...... $ 1,257 $ 1,118 12 %
Premiums and other.................. 501 435 15
Investment income................... 120 149 (19)
--------- -------- --------
Total revenue.................... 1,878 1,702 10
--------- -------- --------
Expenses
General expenses.................... 1,366 1,186 15
Benefits to policyholders........... 253 223 13
Interest expense.................... 31 23 35
Amortization of intangible assets... 38 31 23
--------- -------- --------
Total expenses................... 1,688 1,463 15
--------- -------- --------
Income Before Special Charges.......... 190 239 (21)
Special charges..................... 150 - -
--------- -------- --------
Income Before Income Tax and
Minority Interest..................... 40 239 (83)
Provision for income tax............ 17 90 (81)
--------- -------- --------
Income Before Minority Interest........ 23 149 (85)
Minority interest - 8.205%
trust preferred capital securities (10) (10) N/A
--------- -------- --------
Net Income............................. $ 13 $ 139 (91) %
========= ======== ========
Preferred stock dividends........... (1) (1) N/A
--------- -------- --------
Net Income Available for
Common Stockholders................... $ 12 $ 138 (91) %
========= ======== ========
Net Income Per Share (1):
Basic net income per share.......... $ 0.05 $ 0.54 (91) %
========= ======== ========
Dilutive net income per share:
Net income before
special charges................ $ 0.40 $ 0.53 (25) %
Special charges................. (0.35) - -
--------- -------- --------
Dilutive net income
per share................... $ 0.05 $ 0.53 (91) %
========= ======== ========
Dilutive average common and
common equivalent shares
outstanding (1)..................... 261.4 260.7
--------- --------
Twelve Months Ended
---------------------------
(millions except per share data) Dec. 31, Dec. 31, Percent
1999 1998 Change
--------- -------- --------
Revenue
Brokerage commissions and fees...... $ 4,639 $ 4,197 11 %
Premiums and other.................. 1,854 1,706 9
Investment income................... 577 590 (2)
--------- -------- --------
Total revenue.................... 7,070 6,493 9
--------- -------- --------
Expenses
General expenses.................... 4,901 4,457 10
Benefits to policyholders........... 973 896 9
Interest expense.................... 105 87 21
Amortization of intangible assets... 143 122 17
--------- -------- --------
Total expenses................... 6,122 5,562 10
--------- -------- --------
Income Before Special Charges.......... 948 931 2
Special charges..................... 313 - -
--------- -------- --------
Income Before Income Tax and
Minority Interest..................... 635 931 (32)
Provision for income tax............ 243 349 (30)
--------- -------- --------
Income Before Minority Interest........ 392 582 (33)
Minority interest - 8.205%
trust preferred capital securities (40) (41) N/A
--------- -------- --------
Net Income............................. $ 352 $ 541 (35) %
========= ======== ========
Preferred stock dividends........... (3) (3) N/A
--------- -------- --------
Net Income Available for
Common Stockholders................... $ 349 $ 538 (35) %
========= ======== ========
Net Income Per Share (1):
Basic net income per share.......... $ 1.35 $ 2.11 (36) %
========= ======== ========
Dilutive net income per share:
Net income before
special charges................ $ 2.07 $ 2.07 - %
Special charges................. (0.74) - -
--------- -------- --------
Dilutive net income
per share................... $ 1.33 $ 2.07 (36) %
========= ======== ========
Dilutive average common and
common equivalent shares
outstanding (1)..................... 262.7 259.4
--------- --------
(1) Reflects the three-for-two stock split effective May 4, 1999.
Aon Corporation
Business Segments
Fourth Quarter Ended
---------------------------
(millions) Dec. 31, Dec. 31, Percent
1999 1998 Change
--------- -------- --------
Revenue
-------
Insurance brokerage and
other services (1)................ $ 1,115 $ 1,015 10 %
Consulting (2)..................... 181 160 13
Insurance underwriting:
Direct sales - life,
accident and health......... 283 268 6
Extended warranty............ 192 163 18
Specialty and other.......... 92 65 42
--------- -------- --------
Total................... 567 496 14
Corporate and other................ 15 31 (52)
--------- -------- --------
Total revenue.................... $ 1,878 $ 1,702 10 %
========= ======== ========
Income Before Income Tax
------------------------
Insurance brokerage and
other services.................... $ 149 $ 169 (12) %
Special charges.................. (72) - -
--------- -------- --------
Including special charges........ 77 169 (54)
Consulting......................... 29 25 16
Special charges.................. (78) - -
--------- -------- --------
Including special charges........ (49) 25 N/A
Insurance underwriting............. 76 75 1
Corporate and other................ (64) (30) N/A
--------- -------- --------
Total income before income
tax excluding special charges 190 239 (21)
Special charges.................. (150) - -
--------- -------- --------
Total income before income tax... $ 40 $ 239 (83) %
========= ======== ========
Twelve Months Ended
---------------------------
(millions) Dec. 31, Dec. 31, Percent
1999 1998 Change
--------- -------- --------
Revenue
-------
Insurance brokerage and
other services (1)................ $ 4,144 $ 3,782 10 %
Consulting (2)..................... 656 615 7
Insurance underwriting:
Direct sales - life,
accident and health......... 1,098 1,053 4
Extended warranty............ 730 643 14
Specialty and other.......... 278 250 11
--------- -------- --------
Total................... 2,106 1,946 8
Corporate and other................ 164 150 9
--------- -------- --------
Total revenue.................... $ 7,070 $ 6,493 9 %
========= ======== ========
Income Before Income Tax
------------------------
Insurance brokerage and
other services.................... $ 684 $ 663 3 %
Special charges.................. (191) - -
--------- -------- --------
Including special charges........ 493 663 (26)
Consulting......................... 80 68 18
Special charges.................. (122) - -
--------- -------- --------
Including special charges........ (42) 68 N/A
Insurance underwriting............. 290 283 2
Corporate and other................ (106) (83) N/A
--------- -------- --------
Total income before income
tax excluding special charges... 948 931 2
Special charges.................. (313) - -
--------- -------- --------
Total income before income tax... $ 635 $ 931 (32) %
========= ======== ========
(1) Includes investment income of $39 million and $56 million for the
fourth quarter ended December 31, 1999 and 1998, respectively,
and $159 million and $194 million for the twelve months ended
December 31, 1999 and 1998, respectively.
(2) Includes investment income of $1 million for the fourth quarters
ended December 31, 1999 and 1998, and $3 million and $6 million
for the twelve months ended December 31, 1999 and 1998,
respectively.
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