AON(US:AON)2026-02-13 21:15Revenue Growth - Total revenue increased by $1.5 billion, or 9%, to $17.2 billion in 2025, reflecting 6% organic revenue growth and contributions from NFP[179] - Risk Capital revenue rose by $773 million, or 7%, to $11.3 billion, while Human Capital revenue increased by $698 million, or 13%, to $5.9 billion in 2025[179] - Total revenue increased by 9% to $17.181 billion in 2025, with organic revenue growth of 6% driven by Commercial Risk Solutions and Reinsurance Solutions[207] Net Income and Earnings - Net income reached $3.8 billion in 2025, an increase of $1.0 billion, or 38%, from 2024[179] - Adjusted diluted earnings per share was $17.07 in 2025, up by $1.47 per share, or 9%, from $15.60 in 2024[179] - Net income attributable to Aon shareholders increased by $1.0 billion to $3.7 billion, or $17.02 per diluted share, in 2025, compared to $2.7 billion, or $12.49 per diluted share, in 2024[204] Operating Performance - Operating expenses increased by $1.0 billion, or 8%, to $12.8 billion, primarily due to the inclusion of NFP's operating expenses[179] - Adjusted operating margin improved to 32.4% in 2025 from 31.5% in the prior year, driven by organic revenue growth and restructuring savings[179] - Total operating income increased by $509 million, or 13%, to $4.3 billion in 2025[194] - Adjusted operating income increased by $624 million, or 16%, to $5.563 billion in 2025, with an adjusted operating margin of 32.4%[213] Cash Flow - Free cash flow increased by $401 million, or 14%, to $3.2 billion in 2025, reflecting strong cash flows from operations[179] - Cash provided by operating activities increased to $3,481 million in 2025, up from $3,035 million in 2024, demonstrating strong operational performance[234] - The company's free cash flow for 2025 was $3,218 million, an increase from $2,817 million in 2024, reflecting improved cash generation capabilities[224] Expenses and Costs - Compensation and benefits rose by $702 million, or 8%, in 2025, mainly due to the inclusion of NFP's operating expenses[187] - Amortization and impairment of intangible assets increased by $275 million, or 55%, in 2025, primarily due to the acquisition of intangible assets from NFP[191] - Human Capital total operating expenses increased by $431 million, or 11%, to $4.5 billion in 2025, primarily due to increased compensation and benefits[196] Interest and Other Income - Interest income decreased by $48 million, or 72%, to $19 million in 2025, reflecting the investment of $5 billion of term debt proceeds used for the acquisition of NFP[197] - Interest expense increased by $27 million, or 3%, to $815 million in 2025, driven by an increase in average total debt outstanding[198] - Other income rose to $1.2 billion in 2025, compared to $348 million in 2024, mainly due to gains from the sale of the NFP Wealth business[199] Tax and Compliance - The effective tax rate for 2025 was 21.2%, compared to 21.4% in 2024, with an adjusted effective tax rate of 19.5%[219] - The Company maintained compliance with financial covenants and had no borrowings under its primary committed credit facilities as of December 31, 2025[259] Pension and Benefits - Pension contributions rose to $99 million in 2025 from $58 million in 2024, with expectations of approximately $93 million in contributions for 2026[235] - The company sponsors defined benefit pension plans in multiple countries, with significant plans located in the U.S., U.K., Netherlands, and Canada, which are closed to new entrants[289] - Changes in the value of pension obligations and plan assets are recognized in Other comprehensive income and amortized into net income as part of net periodic pension cost[291] Acquisitions and Disposals - The Company completed the sale of a significant majority of NFP's wealth businesses for total cash proceeds of $2.3 billion, recognizing a pre-tax gain of $1.2 billion[244] - Total cash consideration for acquisitions in 2025 was $394 million, down from $3.5 billion in 2024[243] Financial Position - Total current assets amounted to $3.070 billion, while total current liabilities were $14.710 billion, indicating a significant liquidity challenge[279] - As of December 31, 2025, the Company had distributable profits in excess of $30.1 billion, indicating sufficient capacity for future share repurchases or dividends[256] Risk Management - The company is exposed to foreign exchange rate risk, primarily between the U.S. dollar and currencies such as the euro, British pound, and Japanese yen, using over-the-counter options and forward contracts to mitigate this risk[328] - The company has implemented various strategies to manage risks associated with interest rates and foreign exchange rates, as detailed in its financial statements[327]