Aon Reports Fourth Quarter and Year-End Results.CHICAGO--(BUSINESS WIRE)--Feb. 9, 1999--Aon Corporation (Aon) today announced financial results for the fourth quarter and year ended December December: see month. 31, 1998. Fourth quarter revenue increased 12% to $1.7 billion in 1998 from $1.5 billion in 1997. Net income increased 23% to $139 million from $113 million. For the quarter, dilutive net income per share was $0.79, up 22% from $0.65 in 1997. Revenue for the full year was $6.5 billion, up 13% from $5.8 billion in 1997. Net income increased 81% to $541 million in 1998 from $299 million, including 1997 special charges. For the full year, 1998 dilutive net income per share was $3.11, an increase of 34% over $2.32 before 1997 special charges. Patrick G. Ryan Ryan may refer to: Places
pleased with the 1998 results. We have achieved solid revenue growth and improved margins. "Looking ahead to the first quarter of 1999, we are considering a package of changes designed to create operating efficiencies to help position Aon for growth despite the challenging trading environment," said Mr. Ryan. "If approved and implemented, these changes could require a first quarter 1999 pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern special charge in the range of $100 to $150 million. The actual charge will be a function of decisions to be made later in the quarter and a refinement of estimates." Aon Corporation is a holding company that comprises a family of insurance brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. , 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 (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. . 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 and the competitive environment. 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
1998 1997 Change
------------------------------------
Revenue
Brokerage commissions and fees $ 1,118.2 $ 955.2 17.1 %
Premiums and other 434.8 423.4 2.7
Investment income 148.7 142.2 4.6
--------- ------- ----------
Total revenue (1) 1,701.7 1,520.8 11.9
--------- ------- ----------
Expenses
General expenses 1,185.4 1,067.4 11.1
Benefits to policyholders 223.3 208.8 6.9
Interest expense 23.7 20.2 17.3
Amortization of intangible assets 31.2 27.7 12.6
--------- ------- ----------
Total expenses (1) 1,463.6 1,324.1 10.5
--------- ------- ----------
Income Before Special Charges 238.1 196.7 21.0
Special charges - - -
--------- ------- ----------
Income Before Income Tax and
Minority Interest 238.1 196.7 21.0
Provision for income tax 89.3 73.8 21.0
--------- ------- ----------
Income Before Minority Interest 148.8 122.9 21.1
Minority interest - 8.205%
trust preferred capital
securities (10.2) (10.0) N/A
--------- ------- ----------
Net Income $ 138.6 $ 112.9 22.8 %
========= ======= ==========
Preferred stock dividends (0.7) (1.5) N/A
--------- ------- ----------
Net Income Available for Common
Stockholders $ 137.9 $ 111.4 23.8 %
========= ======= ==========
Net Income Per Share:
Basic net income per share $ 0.81 $ 0.66 22.7 %
========= ======= ==========
Dilutive net income per share:
Net income excluding special
charges $ 0.79 $ 0.65 21.5 %
Special charges - - -
--------- ------- ----------
Dilutive net income per share $ 0.79 $ 0.65 21.5 %
========= ======= ==========
Dilutive average common and
common equivalent shares
outstanding 173.8 171.3
--------- -------
Twelve Months Ended
------------------------------------
Dec. 31, Dec. 31, Percent
1998 1997 Change
------------------------------------
Revenue
Brokerage commissions and fees $ 4,197.2 $ 3,605.2 16.4 %
Premiums and other 1,706.2 1,645.1 3.7
Investment income 589.5 500.3 17.8
--------- --------- ----------
Total revenue (1) 6,492.9 5,750.6 12.9
--------- --------- ----------
Expenses
General expenses 4,456.8 4,004.5 11.3
Benefits to policyholders 895.9 842.3 6.4
Interest expense 87.2 69.5 25.5
Amortization of intangible assets 122.6 120.7 1.6
--------- --------- ----------
Total expenses (1) 5,562.5 5,037.0 10.4
--------- --------- ----------
Income Before Special Charges 930.4 713.6 30.4
Special charges - 172.0 -
--------- --------- ----------
Income Before Income Tax and
Minority Interest 930.4 541.6 71.8
Provision for income tax 348.9 203 ----------
Income Before Minority Interest (41.0) (39.7)
N/A
--------- --------- =========
==========
Preferred stock di7.9 $ 287.2 87.3 %
========= ========= ==========
Basic net income per share $ 3.16 $ 1.71 84.8 %
Net income excluding special
charg-----
Dilutive net income per
s outstanding 172.9 170.5
--------- --------
(1) Prior period revenue and expenses have been restatBusiness Segments
1998 1997 Change
14.3 $ 856.4 18.4 %
Consulti 262.4 2.2
Extended warranty 161.9 154.8 4.6
Ot-----
Total 495evenue 1,701.7
1,520.8 11.9
-------- -- $ 168.6 $
115.6 45.8 % 115.6 45.8
Consulting -----
Including special charges 25cial charges -
- -
-------- ------- ----------
Including special charges (29.8) (8.7) N/A
-------- ------- ----------
Total income before
income tax $ 238.1 $ 196.7 21.0 %
======== ======= ==========
Twelve Months Ended
--------------------------------------
Dec. 31, Dec. 31, Percent
1998 1997 Change
--------------------------------------
Revenue (1)
Insurance brokerage and
other services (2) $3,781.8 $3,221.3 17.4 %
Consulting (3) 615.2 552.5 11.3
Insurance underwriting:
Direct sales - life, accident
and health 1,052.8 1,035.3 1.7
Extended warranty 642.5 574.0 11.9
Other 250.5 248.5 0.8
--------- -------- -----------
Total 1,945.8 1,857.8 4.7
Corporate and other 150.1 119.0 26.1
--------- -------- -----------
Total revenue 6,492.9 5,750.6 12.9
--------- -------- -----------
Income Before Income Tax (1)
Insurance brokerage and
other services $ 662.5 $ 435.5 52.1 %
Special charges - (132.1) -
--------- -------- ----------
Including special charges 662.5 303.4 118.4
Consulting 68.2 58.2 17.2
Special charges - (12.9) -
--------- -------- ----------
Including special charges 68.2 45.3 50.6
Insurance underwriting 282.8 278.2 1.7
Corporate and other (83.1) (58.3) N/A
Special charges - (27.0) -
--------- -------- ----------
Including special charges (83.1) (85.3) N/A
--------- -------- ----------
Total income before
income tax $ 930.4 $ 541.6 71.8 %
========= ======== ==========
(1) The Company adopted Statement of Financial Accounting Standards
No. 131 "Disclosure about Segments of an Enterprise and Related
Information" effective December 31, 1998. Accordingly, all
prior period segment results have been restated.
(2) Includes investment income of $56 million and $46 million for
the fourth quarter ended December 31, 1998 and 1997,
respectively, and $194 million and $163 million for the twelve
months ended December 31, 1998 and 1997, respectively.
(3) Includes investment income of $1 million and $2 million for the
fourth quarter ended December 31, 1998 and 1997, respectively,
and $6 million for the twelve months ended December 31,
1998 and 1997, respectively.
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