Aon Reports Fourth Quarter and Year-End Results.CHICAGO--(BUSINESS WIRE)--February 10, 1998--Aon Corporation (Aon) today announced financial results for the fourth quarter and year ended December December: see month. 31, 1997. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the (excluding special charges and realized investment gains) was $112 million in the fourth quarter, up 37% from $82 million a year earlier. Operating income per share was $0.65, up 38% from $0.47. For the full year, operating income was $402 million, up 16% from $346 million in 1996. Operating income per share was $2.30, up 17% from $1.97 last year. Fourth quarter revenue from continuing operations increased 42% to $1.5 billion in 1997 from $1.1 billion last year. Net income increased 144% to $113 million from $46 million. Net income per share for the quarter increased 160% to $0.65 from $0.25. Revenue from continuing operations for the full year increased 48% to $5.8 billion from $3.9 billion last year. Special charges of $172 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern ($0.64 per share after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) were recorded in 1997 principally due to acquisition-related restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . Net income per share for 1997 was $1.68 compared to $1.90 in 1996. Excluding special charges, EBITA EBITA Earnings Before Interest Taxes Amortization (earnings before interest, tax 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. ) for the full year was $900 million, an increase of 38% from $650 million in 1996. In reviewing 1997 results, Patrick G. Ryan Ryan may refer to: Places
"Our strong 1997 performance reflects the solid fundamentals within Aon. In a little over a year, we have acquired several outstanding brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. and consulting organizations, including Alexander & Alexander, Bain n. 1. A bath; a bagnio. Hogg hogg castrated male sheep usually 10 to 14 months old. Also used to describe an uncastrated male pig. , Jauch & Hubener, Minet and Sodarcan. Our resources have been combined to provide more efficient and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. services and the consolidation is substantially complete. The reception from our clients had been very positive. I congratulate all of our employees around the world, this is truly their success. "We have also launched several initiatives to ensure continued delivery of first-class client service, improve the use of technology and maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. the potential of our global distribution system for both existing and new products. "On February February: see month. 5, 1998, we announced an agreement to acquire Gil y Carvajal Carvajal may refer to: Personalities
"Today, we are also announcing an agreement in principle to acquire Le Blanc Le Blanc is a commune and a sous-préfecture in the Indre département of France. Geography Le Blanc is the main city of the Parc naturel régional de la Brenne, on the banks of the Creuse River. de Nicolay Nicolaymay refer to:
tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. consents and due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. . Le Blanc de Nicolay is the largest reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. broker in France and is also prominent in retail brokerage and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . Their professionalism professionalism the upholding by individuals of the principles, laws, ethics and conventions of their profession. and expertise are widely acclaimed ac·claim v. ac·claimed, ac·claim·ing, ac·claims v.tr. 1. To praise enthusiastically and often publicly; applaud. See Synonyms at praise. 2. and they will be a great addition to the Aon family. "I am also pleased with our performance in our 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. segment. Extended warranty The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. operations led the way with the introduction of several new services and new operations in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and
Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. .
"All in all this has been a very productive year." Aon Corporation is a holding company that comprises a family of insurance brokerage, consulting and insurance underwriting subsidiaries. Aon's common stock (AOC AOC, n an acronym for the Aromatherapy Organizations Council. ) 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 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. 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. . -0-
Aon Corporation
Consolidated Summary of Operations
Fourth Quarter Ended
-----------------------------------
(millions except per share data) Dec. 31, Dec. 31, Percent
1997 1996 Change
-----------------------------------
Revenue
Brokerage commissions and fees $ 955.2 $ 550.8 73.4%
Premiums earned 417.4 385.3 8.3
Net investment income 141.0 114.3 23.4
Realized investment gains 1.2 5.0 (76.0)
Other income 6.0 14.0 (57.1)
------- ------- -----
Total revenue 1,520.8 1,069.4 42.2
------- ------- -----
Benefits and Expenses
Commissions and general expenses 1,038.3 658.6 57.7
Benefits to policyholders 208.8 207.4 0.7
Amortization of deferred policy
acquisition costs 49.3 51.5 (4.3)
Amortization of intangible assets(1) 27.7 20.9 32.5
-------- ------- ------
Total benefits and expenses 1,324.1 938.4 41.1
-------- ------- ------
Income From Continuing Operations
Before Special Charges 196.7 131.0 50.2
Special Charges - 60.3 -
-------- ------- -------
Income From Continuing Operations
Before Income Tax and Minority
Interest 196.7 70.7 178.2
Provision for income tax 73.8 24.5 201.2
------- ------- -----
Income From Continuing Operations
Before Minority Interest 122.9 46.2 166.0
Minority Interest - 8.205% trust
preferred capital securities (10.0) - -
-------- ------- -----
Income From Continuing Operations 112.9 46.2 144.4
Discontinued Operations:
Income from discontinued operations,
net of tax - - -
Gain on disposal of discontinued
operations, net of tax - - -
------- ------- -------
Net Income $ 112.9 $ 46.2 144.4%
======= ======= =======
Preferred Stock Dividends (1.5) (3.6) N/A
------- ------- -------
Net Income Available for Common
Stockholders $ 111.4 $ 42.6 161.5%
======= ======= =======
Net income per share (2):
Basic net income per share $ 0.66 $ 0.26 153.8%
======= ======= =======
Dilutive net income per share $ 0.65 $ 0.25 160.0%
======= ======= =======
Average common and common equivalent
shares outstanding (2)(3) 171.3 168.9
------- -------
(1) On a tax-effected basis, amortization of intangibles would be
$21 million and $14 million for the fourth quarter ended
December 31, 1997 and 1996, respectively, and $91 million
and $50 million for the twelve months ended December 31,
1997 and 1996, respectively.
(2) The Company adopted Statement of Financial Accounting Standards
No. 128 "Earnings Per Share" effective December 31, 1997 and
announced a three-for-two stock split effective May 14, 1997.
Accordingly, all prior period net income per share amounts have
been restated.
(3) Represents the dilutive average common and common stock
equivalent shares outstanding
-0-
Twelve Months Ended
----------------------------------
(millions except per share data) Dec. 31, Dec. 31, Percent
1997 1996 Change
----------------------------------
Revenue
Brokerage commissions and fees $ 3,605.2 $ 1,918.8 87.9%
Premiums earned 1,608.9 1,526.7 5.4
Net investment income 494.0 384.0 28.6
Realized investment gains 6.3 8.1 (22.2)
Other income 36.2 50.6 (28.5)
----------- ---------- --------
Total revenue 5,750.6 3,888.2 47.9
----------- ---------- --------
Benefits and Expenses
Commissions and general expenses 3,865.8 2,278.2 69.7
Benefits to policyholders 842.3 789.5 6.7
Amortization of deferred policy 208.2 207.9 0.1
acquisition costs
Amortization of intangible assets (1) 120.7 76.5 57.8
----------- ---------- -------
Total benefits and expenses 5,037.0 3,352.1 50.3
----------- ---------- -------
Income From Continuing Operations Before
Special Charges 713.6 536.1 33.1
Special Charges 172.0 90.5 90.1
-------- -------- ------
Income From Continuing Operations
Before Income Tax and Minority
Interest 541.6 445.6 21.5
Provision for income tax 203.1 153.8 32.1
-------- -------- --------
Income From Continuing Operations
Before Minority Interest 338.5 291.8 16.0
Minority Interest - 8.205% trust
preferred capital securities (39.7) - -
-------- -------- -------
Income From Continuing Operations 298.8 291.8 2.4
Discontinued Operations:
Income from discontinued operations,
net of tax - 22.4 -
Gain on disposal of discontinued
operations, net of tax - 21.0 -
------- -------- --------
Net Income $ 298.8 $ 335.2 (10.9)%
======= ======== ========
Preferred Stock Dividends (11.6) (18.8) N/A
------- -------- --------
Net Income Available for Common
Stockholders $ 287.2 $ 316.4 (9.2)%
======= ======= =======
Net income per share (2):
Basic net income per share $ 1.71 $ 1.93 (11.4)%
======= ======= =======
Dilutive net income per share $ 1.68 $ 1.90 (11.6)%
======= ======= =======
Average common and common equivalent
shares outstanding (2)(3) 170.5 168.9
------- -------
(1) On a tax-effected basis, amortization of intangibles would be
$21 million and $14 million for the fourth quarter ended
December 31, 1997 and 1996, respectively, and $91 million
and $50 million for the twelve months ended December 31, 1997 and
1996, respectively.
(2) The Company adopted Statement of Financial Accounting Standards
No. 128 "Earnings Per Share" effective December 31, 1997 and
announced a three-for-two stock split effective May 14, 1997.
Accordingly, all prior period net income per share amounts have
been restated.
(3) Represents the dilutive average common and common stock
equivalent shares outstanding
-0-
Aon Corporation
Major Lines of Business - Continuing Operations
(millions except per share data)
Fourth Quarter Ended
-----------------------------------------
Dec. 31, Dec. 31, Percent
1997 1996 Change
-----------------------------------------
Revenue
-------
Insurance brokerage
and consulting services $ 1,003.4 $ 583.6 71.9%
Insurance underwriting 479.8 450.8 6.4
Corporate and other 37.6 35.0 7.4
---------- ------- -----
Total revenue $ 1,520.8 $ 1,069.4 42.2%
========== ======= =====
Income Before Income Tax
------------------------
Insurance brokerage and
consulting services $ 134.8 $ 59.2 127.7%
Special charges -- (52.9) --
---------- ---------- --------
Including special charges 134.8 6.3 +500.0
Insurance underwriting 70.6 68.6 2.9
Special charges -- (5.4) --
---------- ---------- --------
Including special charges 70.6 63.2 11.7
Corporate and other (8.7) 3.2 N/A
Special charges -- (2.0) --
---------- ---------- --------
Including special charges (8.7) 1.2 N/A
---------- ---------- --------
Total income before
income tax $ 196.7 $ 70.7 178.2%
========== ========== ========
Dilutive Net Income Per Share (1)
-----------------------------
Operating income from continuing
operations before special charges $ 0.65 $ 0.47 38.3%
Special charges - (0.24) -
Realized investment gains - 0.02 -
Income from discontinued operations - - -
Gain on disposal of discontinued
operations - - -
---------- --------- -------
Dilutive net income per share $ 0.65 $ 0.25 160.0%
========== ========= =======
(1) Reflects the three-for-two stock split on May 14, 1997.
-0-
(millions except per share data)
Twelve Months Ended
------------------------------------
Dec. 31, Dec. 31, Percent
1997 1996 Change
------------------------------------
Revenue
-------
Insurance brokerage and
consulting services $ 3,773.8 $ 2,002.3 88.5%
Insurance underwriting 1,857.8 1,773.9 4.7
Corporate and other 119.0 112.0 6.3
-------- -------- ----
Total revenue $ 5,750.6 $ 3,888.2 47.9%
======== ======== ====
Income Before Income Tax
------------------------
Insurance brokerage and
consulting services $ 493.7 $ 257.3 91.9%
Special charges (145.0) (75.3) N/A
-------- -------- ------
Including special charges 348.7 182.0 91.6
Insurance underwriting 278.2 264.2 5.3
Special charges -- (11.8) --
-------- -------- ------
Including special charges 278.2 252.4 10.2
Corporate and other (58.3) 14.6 N/A
Special charges (27.0) (3.4) N/A
-------- -------- ------
Including special charges (85.3) 11.2 N/A
-------- -------- ------
Total income before income tax $ 541.6 $ 445.6 21.5%
======== ======== ======
Dilutive Net Income Per Share (1)
-----------------------------
Operating income from continuing
operations before
special charges $ 2.30 $ 1.97 16.8%
Special charges (0.64) (0.36) N/A
Realized investment gains 0.02 0.03 (33.3)
Income from discontinued operations - 0.13 -
Gain on disposal of discontinued
operations - 0.13 -
-------- -------- ------
Dilutive net income per share $ 1.68 $ 1.90 (11.6)%
======== ======== ======
(1) Reflects the three-for-two stock split on May 14, 1997.
-0-
Aon Corporation
Revenue By Major Product Line - Continuing Operations
Fourth Quarter Ended
-------------------------------------
(millions) Dec. 31, Dec. 31, Percent
1997 1996 Change
-------------------------------------
Insurance brokerage and
-----------------------
consulting services
-------------------
Insurance and other services $ 856.4 $ 517.2 65.6%
Consulting 147.0 66.4 121.4
--------- --------- --------
Total revenue (1) $ 1,003.4 $ 583.6 71.9%
========= ========= ========
Insurance underwriting
----------------------
Direct sales - life, accident
and health $ 262.4 $ 263.1 (0.3)%
Extended warranty 154.8 124.8 24.0
Other 62.6 62.9 (0.5)
--------- --------- --------
Total revenue $ 479.8 $ 450.8 6.4%
========= ========= ========
Corporate and other
-------------------
Investment income on capital
and other $ 36.4 $ 30.0 21.3%
Realized investment gains 1.2 5.0 (76.0)
--------- --------- --------
Total revenue $ 37.6 $ 35.0 7.4%
========= ========= ========
(1) Includes net investment income, primarily relating to fiduciary
funds, of $48 million and $33 million for the fourth quarter
ended December 31, 1997 and 1996, respectively, and $169 million
and $83 million for the twelve months ended December 31, 1997
and 1996, respectively.
-0-
Twelve Months Ended
--------------------------------------
(millions) Dec. 31, Dec. 31, Percent
1997 1996 Change
------------- ------------- -------
Insurance brokerage and
-----------------------
consulting services
-------------------
Insurance and other services $ 3,221.3 $ 1,728.5 86.4%
Consulting 552.5 273.8 101.8
--------- --------- -------
Total revenue (1) $ 3,773.8 $ 2,002.3 88.5%
========= ========= =======
Insurance underwriting
----------------------
Direct sales - life, accident
and health $ 1,035.3 $ 1,029.5 0.6%
Extended warranty 574.0 464.4 23.6
Other 248.5 280.0 (11.3)
--------- --------- -------
Total revenue $ 1,857.8 $ 1,773.9 4.7%
========= ========= =======
Corporate and other
-------------------
Investment income on capital
and other $ 112.7 $ 103.9 8.5%
Realized investment gains 6.3 8.1 (22.2)
--------- --------- -------
Total revenue $ 119.0 $ 112.0 6.3%
========= ========= =======
(1) Includes net investment income, primarily relating to fiduciary
funds, of $48 million and $33 million for the fourth quarter
ended December 31, 1997 and 1996, respectively, and $169 million
and $83 million for the twelve months ended December 31, 1997
and 1996, respectively.
CONTACT: Aon Corporation, Chicago John F. Roskopf Director, Financial Relations 312-701-3983 |
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