ROLLING
MEADOWS, Ill., April 25,
2024 /PRNewswire/ -- Arthur
J. Gallagher & Co. (NYSE: AJG) today reported its
financial results for the quarter ended March 31, 2024.
Management will host a webcast conference call to discuss these
results on Thursday, April 25, 2024 at 5:15 p.m. ET/4:15 p.m.
CT. To listen to the call, and for printer-friendly
formats of this release and the "CFO Commentary" and "Supplemental
Quarterly Data," which may also be referenced during the call,
please visit ajg.com/IR. These documents contain both GAAP
and non-GAAP measures. Investors and other users of this
information should read carefully the section entitled "Information
Regarding Non-GAAP Measures" beginning on page 8.
Summary of Financial
Results - First Quarter
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Revenues
Before
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Diluted Net
Earnings
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Reimbursements
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Net Earnings
(Loss)
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EBITDAC
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(Loss) Per
Share
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Segment
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1st Q
24
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1st Q
23
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1st Q
24
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1st Q
23
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1st Q
24
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1st Q
23
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1st Q
24
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1st Q
23
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(in
millions)
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(in
millions)
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(in
millions)
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Brokerage, as
reported
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$
2,864.9
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$ 2,375.2
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$
652.6
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$
515.3
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$ 1,048.7
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$ 880.6
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$
2.92
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$
2.37
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Net (gains) on
divestitures
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(0.5)
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(0.2)
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(0.4)
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(0.2)
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(0.5)
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(0.2)
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-
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-
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Acquisition
integration
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-
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-
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36.4
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39.7
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48.7
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51.2
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0.16
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0.18
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Workforce and lease
termination
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-
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-
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8.7
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11.8
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11.6
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15.4
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0.04
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0.06
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Acquisition related
adjustments
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(26.0)
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-
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(8.3)
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25.6
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23.8
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11.4
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(0.02)
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0.12
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Amortization of
intangible assets
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-
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-
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116.7
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89.1
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-
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-
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0.53
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0.41
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Effective income tax
rate impact
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-
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-
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-
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(2.5)
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-
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-
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-
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(0.01)
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Levelized foreign
currency
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translation
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-
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5.2
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(0.9)
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(0.9)
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-
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-
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Brokerage, as
adjusted *
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2,838.4
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2,380.2
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805.7
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677.9
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1,132.3
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957.5
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3.63
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3.13
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Risk Management, as
reported
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352.8
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297.6
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39.3
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33.5
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70.5
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55.9
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0.18
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0.15
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Net (gains) losses on
divestitures
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0.2
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(0.1)
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0.1
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(0.1)
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0.2
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(0.1)
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-
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-
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Acquisition
integration
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-
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-
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0.5
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0.4
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0.7
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0.6
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-
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-
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Workforce and lease
termination
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-
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-
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0.9
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0.5
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1.2
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0.6
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-
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-
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Acquisition related
adjustments
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-
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-
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0.1
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0.1
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0.1
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0.1
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-
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-
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Amortization of
intangible assets
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-
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-
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4.5
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1.1
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-
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-
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0.02
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0.01
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Levelized foreign
currency
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translation
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-
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(1.1)
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-
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(0.1)
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-
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(0.2)
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-
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-
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Risk Management, as
adjusted *
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353.0
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296.4
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45.4
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35.4
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72.7
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56.9
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0.20
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0.16
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Corporate, as
reported
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0.4
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0.1
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(79.2)
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(62.2)
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(62.7)
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(61.6)
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(0.36)
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(0.28)
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Transaction-related
costs
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-
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-
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2.7
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3.3
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3.2
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4.4
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0.02
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0.01
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Corporate, as
adjusted *
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0.4
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0.1
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(76.5)
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(58.9)
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(59.5)
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(57.2)
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(0.34)
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(0.27)
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Total Company, as
reported
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$
3,218.1
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$ 2,672.9
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$
612.7
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$
486.6
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$ 1,056.5
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$ 874.9
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$
2.74
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$
2.24
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Total Company, as
adjusted *
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$
3,191.8
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$ 2,676.7
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$
774.6
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$
654.4
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$ 1,145.5
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$ 957.2
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$
3.49
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$
3.02
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Total Brokerage
& Risk
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Management, as
reported
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$
3,217.7
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$ 2,672.8
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$
691.9
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$
548.8
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$ 1,119.2
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$ 936.5
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$
3.10
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$
2.52
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Total Brokerage
& Risk
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Management, as
adjusted *
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$
3,191.4
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$ 2,676.6
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$
851.1
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$
713.3
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$ 1,205.0
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$ 1,014.4
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$
3.83
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$
3.29
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*
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For first quarter 2024,
the pretax impact of the Brokerage segment adjustments totals
$204.7 million, mostly due to non‑cash period expenses related to
intangible amortization, with a corresponding adjustment to the
provision for income taxes of $51.6 million relating to these
items. For first quarter 2024, the pretax impact of the Risk
Management segment adjustments totals $8.5 million, with a
corresponding adjustment to the provision for income taxes of
$2.4 million relating to these items. For first quarter
2024, the pretax impact of the Corporate segment adjustments totals
$3.2 million, with a corresponding adjustment to the benefit
for income taxes of $0.5 million relating to these
items. A detailed reconciliation of the 2024 and 2023
provision (benefit) for income taxes is shown on pages 12 and
13.
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(1 of 13)
"We had a great first quarter to begin 2024" said J.
Patrick Gallagher, Jr., Chairman and
CEO. "Our core brokerage and risk management segments
combined to post 20% revenue growth, including 9.4% organic revenue
growth. At the same time, we grew net earnings by 26% and
adjusted EBITDAC by 19%.
"First quarter primary insurance renewal premiums were up
7%. Property increases were up nearly 10% and casualty
increases were approaching 7%, overcoming headwinds from
professional lines like D&O and cyber. Reinsurance
carriers are broadly maintaining their discipline on pricing, terms
and conditions, while meeting increased client demand with
incremental capacity. Overall, our insurance and reinsurance
carrier partners continue to behave rationally, pushing for rate
increases where it's needed by line of business, industry and
geography.
"Customers are buying more insurance. Our first quarter
data is showing solid customer business activity and mid-term
policy endorsements, audits and cancellations combined were again
ahead of last year's levels. We are also seeing continued
labor market strength and further increases in new claims arising,
also pointing to a resilient economic backdrop for our clients.
"As I look across our business, we remain well positioned to win
new clients and retain our existing customers. I believe
we have the best team in the business, with leading talent and
expertise, stellar service, superior analytics, vast amounts of
data and a wide global reach. We are in an enviable industry
position and I am excited about the remainder of 2024 and
beyond!"
Brokerage Segment
Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars
in millions):
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Organic Revenues (Non-GAAP)
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1st Q
2024
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1st Q
2023
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Base Commissions and Fees
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Commissions and
fees, as reported
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$
2,600.3
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$
2,160.1
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Less commissions and
fees from acquisitions
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(244.2)
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-
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Levelized foreign
currency translation
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-
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6.0
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Organic base
commissions and fees
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$
2,356.1
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$
2,166.1
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Organic change in base
commissions and fees
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8.8 %
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Supplemental Revenues
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Supplemental
revenues, as reported
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$
93.9
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$
81.6
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Less supplemental
revenues from acquisitions
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(2.3)
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-
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Levelized foreign
currency translation
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-
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|
0.4
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Organic supplemental
revenues
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$
91.6
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$
82.0
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Organic change in
supplemental revenues
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11.7 %
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Contingent Revenues
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Contingent revenues,
as reported
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$
86.0
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$
71.8
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Less contingent
revenues from acquisitions
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(7.2)
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-
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Levelized foreign
currency translation
|
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-
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|
0.2
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|
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Organic contingent
revenues
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$
78.8
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$
72.0
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Organic change in
contingent revenues
|
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9.4 %
|
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|
|
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|
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Total reported
commissions, fees, supplemental
|
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revenues and
contingent revenues
|
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$
2,780.2
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$
2,313.5
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Less commissions, fees,
supplemental revenues
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and contingent revenues
from acquisitions
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(253.7)
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-
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Levelized foreign
currency translation
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-
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6.6
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Total organic
commissions, fees, supplemental
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revenues and
contingent revenues
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$
2,526.5
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$
2,320.1
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Total organic
change
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8.9 %
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Acquisition
Activity
|
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1st Q
2024
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1st Q
2023
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Number of acquisitions
closed *
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12
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10
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Estimated annualized
revenues acquired (in millions)
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$
69.2
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$
69.0
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*
|
In the first quarter of
2024, Gallagher issued 357,000 shares of its common stock directly
to sellers in connection with tax-free exchange
acquisitions.
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(2 of 13)
Brokerage Segment
Reported GAAP to Adjusted Non-GAAP Reconciliations (continued)
(dollars in millions):
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Compensation Expense and
Ratios
|
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1st Q
2024
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1st Q
2023
|
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|
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Compensation
expense, as reported
|
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$
1,476.8
|
|
$
1,206.1
|
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Acquisition
integration
|
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(24.5)
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(34.1)
|
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Workforce and lease
termination related charges
|
|
(10.4)
|
|
(13.4)
|
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Acquisition related
adjustments
|
|
(49.8)
|
|
(11.4)
|
|
Levelized foreign
currency translation
|
|
-
|
|
5.7
|
|
|
|
|
|
|
|
|
|
Compensation
expense, as adjusted
|
|
$
1,392.1
|
|
$
1,152.9
|
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|
|
|
|
|
|
Reported compensation
expense ratios using reported
|
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|
|
|
|
revenues on page
1
|
*
|
51.6 %
|
|
50.8 %
|
|
Adjusted compensation
expense ratios using adjusted
|
|
|
|
|
|
|
revenues on page
1
|
**
|
49.0 %
|
|
48.4 %
|
|
|
|
|
|
|
|
|
|
*
|
Reported first quarter
2024 compensation ratio was 0.8 pts higher than first quarter
2023. This ratio was primarily impacted by certain 2023
acquisitions that run a higher compensation ratio, as well as
increased acquisition related adjustments, partially offset by
lower integration costs.
|
**
|
Adjusted first quarter
2024 compensation ratio was 0.6 pts higher than first quarter
2023. This ratio was primarily impacted by certain 2023
acquisitions that run a higher compensation ratio.
|
Operating Expense and Ratios
|
|
|
|
|
|
1st Q
2024
|
|
1st Q
2023
|
|
|
|
|
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|
|
|
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|
|
Operating expense,
as reported
|
|
|
|
|
|
$
339.4
|
|
$
288.5
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
integration
|
|
|
|
|
|
(24.2)
|
|
(17.1)
|
Workforce and lease
termination related charges
|
|
|
|
|
|
(1.2)
|
|
(2.0)
|
Levelized foreign
currency translation
|
|
|
|
|
|
-
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense,
as adjusted
|
|
|
|
|
|
$
314.0
|
|
$
269.8
|
|
|
|
|
|
|
|
|
|
|
|
Reported operating
expense ratios using reported
|
|
|
|
|
|
|
|
|
|
revenues on page
1
|
|
|
|
|
*
|
11.9 %
|
|
12.2 %
|
Adjusted operating
expense ratios using adjusted
|
|
|
|
|
|
|
|
|
|
revenues on page
1
|
|
|
|
|
**
|
11.1 %
|
|
11.3 %
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Reported first quarter
2024 operating expense ratio was 0.3 pts lower than first quarter
2023. This ratio was primarily impacted by savings in real
estate expenses related to office consolidations, partially
offset by higher integration costs.
|
**
|
Adjusted first quarter
2024 operating expense ratio was 0.2 pts lower than first quarter
2023. This ratio was primarily impacted by savings in real
estate expenses related to office consolidations.
|
(3 of 13)
Brokerage Segment
Reported GAAP to Adjusted Non-GAAP Reconciliations (continued)
(dollars in millions):
|
|
Net Earnings to Adjusted EBITDAC
(Non-GAAP)
|
|
1st Q
2024
|
|
1st Q
2023
|
|
|
|
|
|
|
|
Net earnings, as
reported
|
|
$
652.6
|
|
$
515.3
|
Provision for income
taxes
|
|
223.5
|
|
175.6
|
Depreciation
|
|
32.8
|
|
27.9
|
Amortization
|
|
156.0
|
|
120.2
|
Change in estimated
acquisition earnout payables
|
|
(16.2)
|
|
41.6
|
|
|
|
|
|
|
|
EBITDAC
|
|
1,048.7
|
|
880.6
|
|
|
|
|
|
|
|
Net (gains) on
divestitures
|
|
(0.5)
|
|
(0.2)
|
Acquisition
integration
|
|
48.7
|
|
51.2
|
Workforce and lease
termination related charges
|
|
11.6
|
|
15.4
|
Acquisition related
adjustments
|
|
23.8
|
|
11.4
|
Levelized foreign
currency translation
|
|
-
|
|
(0.9)
|
|
|
|
|
|
|
|
EBITDAC, as
adjusted
|
|
$
1,132.3
|
|
$
957.5
|
|
|
|
|
|
|
|
Net earnings margin, as
reported using reported
|
|
|
|
|
|
revenues on page
1
|
|
22.8 %
|
|
21.7 %
|
EBITDAC margin, as
adjusted using adjusted
|
|
|
|
|
|
revenues on page
1
|
*
|
39.9 %
|
|
40.2 %
|
|
|
*
|
The roll-in of M&A,
which naturally runs at lower margins, impacted the year over year
change in first quarter EBITDAC margin by approximately 90 basis
points.
|
Risk Management
Segment Reported GAAP to Adjusted Non-GAAP
Reconciliations (dollars in millions):
|
|
Organic Revenues (Non-GAAP)
|
|
1st Q
2024
|
|
1st Q
2023
|
|
|
|
|
|
|
|
Fees
|
|
$
341.9
|
|
$
288.8
|
International
performance bonus fees
|
|
2.6
|
|
4.2
|
|
|
|
|
|
|
|
Fees as
reported
|
|
344.5
|
|
293.0
|
|
|
|
|
|
|
|
Less fees from
acquisitions
|
|
(13.7)
|
|
-
|
Levelized foreign
currency translation
|
|
-
|
|
(1.1)
|
|
|
|
|
|
|
|
Organic
fees
|
|
$
330.8
|
|
$
291.9
|
|
|
|
|
|
|
|
Organic change in
fees
|
|
13.3 %
|
|
|
(4 of 13)
Risk Management
Segment Reported GAAP to Adjusted Non-GAAP Reconciliations
(continued) (dollars in millions):
|
|
Compensation Expense and
Ratios
|
|
1st Q
2024
|
|
1st Q
2023
|
|
|
|
|
|
|
|
Compensation
expense, as reported
|
|
$
213.9
|
|
$
179.8
|
|
|
|
|
|
|
|
Acquisition
integration
|
|
(0.6)
|
|
(0.6)
|
Workforce and lease
termination related charges
|
|
(0.8)
|
|
(0.4)
|
Acquisition related
adjustments
|
|
(0.1)
|
|
(0.1)
|
Levelized foreign
currency translation
|
|
-
|
|
(0.8)
|
|
|
|
|
|
|
|
Compensation
expense, as adjusted
|
|
$
212.4
|
|
$
177.9
|
|
|
|
|
|
|
|
Reported compensation
expense ratios using reported
|
|
|
|
|
|
revenues (before
reimbursements) on page 1
|
*
|
60.6 %
|
|
60.4 %
|
|
|
|
|
|
|
|
Adjusted compensation
expense ratios using adjusted
|
|
|
|
|
|
revenues (before
reimbursements) on page 1
|
*
|
60.2 %
|
|
60.0 %
|
|
|
*
|
Reported first quarter
2024 compensation ratio was 0.2 pts higher than first quarter 2023.
Adjusted first quarter 2024 compensation ratio was
0.2 pts higher than first quarter 2023. Both ratios were
primarily impacted by increased incentive compensation, partially
offset by savings related to headcount controls.
|
Operating Expense and Ratios
|
|
1st Q
2024
|
|
1st Q
2023
|
|
|
|
|
|
|
|
Operating expense,
as reported
|
|
$
68.4
|
|
$
61.9
|
|
|
|
|
|
|
|
Acquisition
integration
|
|
(0.1)
|
|
-
|
Workforce and lease
termination related charges
|
|
(0.4)
|
|
(0.2)
|
Levelized foreign
currency translation
|
|
-
|
|
(0.1)
|
|
|
|
|
|
|
|
Operating expense,
as adjusted
|
|
$
67.9
|
|
$
61.6
|
|
|
|
|
|
|
|
Reported operating
expense ratios using reported
|
|
|
|
|
|
revenues (before
reimbursements) on page 1
|
*
|
19.4 %
|
|
20.8 %
|
|
|
|
|
|
|
|
Adjusted operating
expense ratios using reported
|
|
|
|
|
|
revenues (before
reimbursements) on page 1
|
*
|
19.2 %
|
|
20.8 %
|
|
|
*
|
Reported first quarter
2024 operating expense ratio was 1.4 pts lower than first quarter
2023. Adjusted first quarter 2024 operating expense ratio was
1.6 pts lower than first quarter 2023. Both ratios were
primarily impacted by savings in client-related
expenses.
|
Net Earnings to Adjusted EBITDAC
(Non-GAAP)
|
|
1st Q
2024
|
|
1st Q
2023
|
|
|
|
|
|
|
|
Net earnings, as
reported
|
|
$
39.3
|
|
$
33.5
|
Provision for income
taxes
|
|
13.9
|
|
12.0
|
Depreciation
|
|
10.9
|
|
8.7
|
Amortization
|
|
6.3
|
|
1.5
|
Change in estimated
acquisition earnout payables
|
|
0.1
|
|
0.2
|
|
|
|
|
|
|
|
EBITDAC
|
|
70.5
|
|
55.9
|
|
|
|
|
|
|
|
Net (gains) losses on
divestitures
|
|
0.2
|
|
(0.1)
|
Acquisition
integration
|
|
0.7
|
|
0.6
|
Workforce and lease
termination related charges
|
|
1.2
|
|
0.6
|
Acquisition related
adjustments
|
|
0.1
|
|
0.1
|
Levelized foreign
currency translation
|
|
-
|
|
(0.2)
|
|
|
|
|
|
|
|
EBITDAC, as
adjusted
|
|
$
72.7
|
|
$
56.9
|
|
|
|
|
|
|
|
Net earnings margin, as
reported using reported
|
|
|
|
|
|
revenues (before
reimbursements) on page 1
|
|
11.1 %
|
|
11.3 %
|
|
|
|
|
|
|
|
EBITDAC margin, as
adjusted using adjusted
|
|
|
|
|
|
revenues (before
reimbursements) on page 1
|
|
20.6 %
|
|
19.2 %
|
(5 of 13)
Corporate
Segment Reported GAAP Information (dollars
in millions):
|
|
|
|
|
|
|
2024
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
|
|
|
|
Net
Earnings
|
|
|
|
|
|
|
|
(Loss)
|
|
|
|
|
|
(Loss)
|
|
|
|
|
|
Income
|
|
Attributable
to
|
|
|
|
Income
|
|
Attributable
to
|
|
|
|
Pretax
|
|
Tax
|
|
Controlling
|
|
Pretax
|
|
Tax
|
|
Controlling
|
1st
Quarter
|
|
Loss
|
|
Benefit
|
|
Interests
|
|
Loss
|
|
Benefit
|
|
Interests
|
Components of
Corporate Segment, as reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and banking
costs
|
|
$ (93.1)
|
|
$ 24.2
|
|
$
(68.9)
|
|
$ (68.7)
|
|
$ 17.9
|
|
$
(50.8)
|
Clean energy related
(1)
|
|
(1.9)
|
|
0.5
|
|
(1.4)
|
|
(2.2)
|
|
0.6
|
|
(1.6)
|
Acquisition costs
(2)
|
|
(4.7)
|
|
0.8
|
|
(3.9)
|
|
(9.5)
|
|
1.5
|
|
(8.0)
|
Corporate
(3)
|
|
(56.9)
|
|
51.9
|
|
(5.0)
|
|
(49.5)
|
|
48.4
|
|
(1.1)
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Reported 1st
Quarter
|
|
(156.6)
|
|
77.4
|
|
(79.2)
|
|
(129.9)
|
|
68.4
|
|
(61.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction-related
costs (2)
|
|
3.2
|
|
(0.5)
|
|
2.7
|
|
4.4
|
|
(1.1)
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of
Corporate Segment, as adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and banking
costs
|
|
(93.1)
|
|
24.2
|
|
(68.9)
|
|
(68.7)
|
|
17.9
|
|
(50.8)
|
Clean energy related
(1)
|
|
(1.9)
|
|
0.5
|
|
(1.4)
|
|
(2.2)
|
|
0.6
|
|
(1.6)
|
Acquisition
costs
|
|
(1.5)
|
|
0.3
|
|
(1.2)
|
|
(5.1)
|
|
0.4
|
|
(4.7)
|
Corporate
(3)
|
|
(56.9)
|
|
51.9
|
|
(5.0)
|
|
(49.5)
|
|
48.4
|
|
(1.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted 1st
Quarter
|
|
$
(153.4)
|
|
$ 76.9
|
|
$
(76.5)
|
|
$
(125.5)
|
|
$ 67.3
|
|
$
(58.2)
|
|
|
(1)
|
Pretax loss for the
first quarter is presented net of amounts attributable to
noncontrolling interests of zero in 2024 and $(0.7) million in
2023.
|
(2)
|
Gallagher incurred
transaction-related costs, which include legal, consulting,
employee compensation and other professional fees primarily
associated with its acquisitions of the Willis Towers Watson treaty
reinsurance brokerage operations, the acquisition of Buck, which
closed on April 3, 2023, and the acquisitions of Cadence Insurance,
Eastern Insurance Group and My Plan Manager, all of which closed in
fourth quarter 2023.
|
(3)
|
Corporate pretax loss
includes a net unrealized foreign exchange remeasurement gain of
$0.6 million in first quarter 2024 and a net unrealized foreign
exchange remeasurement loss of ($0.1) million in first quarter
2023.
|
Interest and banking costs and debt - At
March 31, 2024, Gallagher had $4,550.0 million of borrowings from public
debt, $3,523.0 million of
borrowings from private placements and $108.2 million of borrowings under its line
of credit facility. In addition, Gallagher had $184.3 million outstanding under a revolving
loan facility that provides funding for premium finance
receivables, which are fully collateralized by the underlying
premiums held by insurance carriers, and as such are excluded from
its debt covenant computations. As previously disclosed, on
February 12, 2024, Gallagher closed and funded an offering of
$1.0 billion of unsecured senior
notes in two tranches. The $500.0 million aggregate principal amount of
5.45% Senior Notes is due in 2034 and the $500.0 million aggregate principal amount of
5.75% Senior Notes is due in 2054. The weighted average
interest rate is 5.71% per annum after giving effect to
underwriting costs and a net hedge loss. Interest and banking
costs in first quarter 2024 are higher than the same period in 2023
primarily due to the debt issuances that occurred in fourth quarter
2023 and first quarter 2024.
(6 of 13)
Clean energy related - For 2024, this consists of
operating results related to Gallagher's investments in new clean
energy projects.
Acquisition costs - Consists mostly of external
professional fees and other due diligence costs related to
acquisitions. On occasion, Gallagher enters into forward
currency hedges for the purchase price of committed, but not yet
funded, acquisitions with funding requirements in currencies other
than the U.S. dollar. The gains or losses, if any, associated
with these hedge transactions are also included in acquisition
costs.
Corporate - Consists of overhead allocations mostly
related to corporate staff compensation, other corporate level
activities, and net unrealized foreign exchange
remeasurement. In addition, it includes the tax expense
related to the partial taxation of foreign earnings, nondeductible
executive compensation and entertainment expenses, the tax benefit
from the vesting of employee equity awards, as well as other
permanent or discrete tax items not reflected in the provision for
income taxes in the Brokerage and Risk Management
segments.
Income Taxes - Gallagher allocates the provision for
income taxes to its Brokerage and Risk Management segments using
the local country statutory rates. Gallagher's consolidated
effective tax rate for the quarters ended March 31, 2024 and 2023 were 20.7% and 19.7%,
respectively.
Webcast Conference Call - Gallagher will host a
webcast conference call on Thursday, April 25, 2024 at
5:15 p.m. ET/4:15 p.m. CT. To listen to this call,
please go to Arthur J. Gallagher
& Co. - Events & Presentations (ajg.com). The call
will be available for replay at such website for at least 90
days.
About Arthur J. Gallagher
& Co.
Arthur J. Gallagher
& Co., a global insurance brokerage, risk management and
consulting services firm, is headquartered in Rolling Meadows, Illinois. Gallagher
provides these services in approximately 130 countries around the
world through its owned operations and a network of correspondent
brokers and consultants.
Information Concerning Forward-Looking Statements
This
press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of
1995. When used in this press release, the words
"anticipates," "believes," "contemplates," "see," "should,"
"could," "will," "estimates," "expects," "intends," "plans" and
variations thereof and similar expressions, are intended to
identify forward-looking statements. Examples of
forward-looking statements include, but are not limited to,
anticipated future results or performance of any segment or
Gallagher as a whole; statements regarding changes in its expenses
in the next several quarters; the impact of foreign currency on its
results; integration costs; workforce and lease termination costs;
amortization of intangibles; depreciation; change in estimated
earnout payables; effective tax rate; earnings from continuing
operations attributable to noncontrolling interests; the premium
rate environment and the state of insurance markets; and the
economic environment.
Gallagher's actual results may differ materially from those
contemplated by the forward-looking statements. Readers are
therefore cautioned against relying on any of the forward-looking
statements, which are neither statements of historical fact nor
guarantees or assurances of future performance.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include
global economic and geopolitical events, including, among others,
high inflation and related monetary policy responses, failures of
financial institutions and other counterparties, potential U.S.
government shutdowns, and political violence and instability, such
as the wars in Ukraine and the
Middle East; its actual
acquisition opportunities, including closing risks related to
pending acquisitions; risks with respect to acquisitions larger
than its usual tuck-in acquisitions, such as the acquisition of
Willis Towers Watson treaty reinsurance brokerage operations, Buck,
Cadence Insurance, Eastern Insurance Group and My Plan Manager,
including risks related to its ability to successfully integrate
operations; the possibility that its assumptions may be inaccurate
resulting in unforeseen obligations or liabilities and failure to
realize the expected benefits of these acquisitions; damage to its
reputation due to negative perceptions or publicity, including as a
result of amplifying effects that the Internet and social media may
have on such perceptions, and reputational issues related to its
ESG-related activities and compliance with increasingly complex
climate-related regulations, such as risks related to
"greenwashing"; cybersecurity-related risks; its ability to apply
technology, data analytics and artificial intelligence effectively
and potential increased costs resulting from such activities; risks
associated with the use of artificial intelligence in its business
operations, including regulatory, data privacy, cybersecurity,
E&O and competition risks; heightened competition for talent
and increased compensation costs; disasters or other business
interruptions, including with respect to its operations in
India; risks related to its
international operations, such as those related to regulatory, tax,
ESG, sanctions and anti-corruption compliance; changes to data
privacy and protection laws and regulations; foreign exchange
rates; changes in accounting standards; changes in premium rates
and in insurance markets generally, including developments in the
reinsurance and insurance-linked securities markets and potential
litigation that may arise as a result of such developments; tax,
environmental or other compliance risks related to its legacy clean
energy investments; its inability to receive dividends or other
distributions from subsidiaries; and changes in the insurance
brokerage industry's competitive landscape.
(7 of 13)
Please refer to Gallagher's filings with the Securities and
Exchange Commission, including Item 1A, "Risk Factors," of its
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and its subsequently filed
Quarterly Reports on Form 10-Q for a more detailed discussion of
these and other factors that could impact its forward-looking
statements. Any forward-looking statement made by Gallagher
in this press release speaks only as of the date on which it is
made. Except as required by applicable law, Gallagher does
not undertake to update the information included herein or the
corresponding earnings release posted on Gallagher's website.
Information Regarding Non-GAAP Measures
In addition to
reporting financial results in accordance with GAAP, this press
release provides information regarding EBITDAC, EBITDAC margin,
adjusted EBITDAC, adjusted EBITDAC margin, diluted net earnings per
share, as adjusted (adjusted EPS), adjusted revenue, adjusted
compensation and operating expenses, adjusted compensation expense
ratio, adjusted operating expense ratio and organic
revenue. These measures are not in accordance with, or an
alternative to, the GAAP information provided in this press
release. Gallagher's management believes that these
presentations provide useful information to management, analysts
and investors regarding financial and business trends relating to
Gallagher's results of operations and financial condition or
because they provide investors with measures that its chief
operating decision maker uses when reviewing Gallagher's
performance. See further below for definitions and additional
reasons each of these measures is useful to investors.
Gallagher's industry peers may provide similar supplemental
non-GAAP information with respect to one or more of these measures,
although they may not use the same or comparable terminology and
may not make identical adjustments. The non-GAAP information
provided by Gallagher should be used in addition to, but not as a
substitute for, the GAAP information provided. As disclosed
in its most recent Proxy Statement, Gallagher makes determinations
regarding certain elements of executive officer incentive
compensation, performance share awards and annual cash incentive
awards, partly on the basis of measures related to adjusted
EBITDAC.
Adjusted Non-GAAP presentation - Gallagher believes
that the adjusted non-GAAP presentations of the current and prior
period information presented in this earnings release provide
stockholders and other interested persons with useful information
regarding certain financial metrics of Gallagher that may assist
such persons in analyzing Gallagher's operating results as
they develop a future earnings outlook for Gallagher. The
after-tax amounts related to the adjustments were computed using
the normalized effective tax rate for each respective period.
See pages 12 and 13 for a reconciliation of the adjustments
made to income taxes.
- Adjusted measures - Revenues (for the Brokerage
segment), revenues before reimbursements (for the Risk Management
segment), net earnings, compensation expense and operating expense,
respectively, each adjusted to exclude the following, as
applicable:
-
- Net gains (losses) on divestitures, which are primarily net
proceeds received related to sales of books of business and other
divestiture transactions, such as the disposal of a business
through sale or closure.
- Acquisition integration costs, which include costs related to
certain large acquisitions (including the acquisitions of the
Willis Towers Watson treaty reinsurance brokerage operations, Buck,
Cadence Insurance, Eastern Insurance Group and My Plan Manager),
outside the scope of the usual tuck-in strategy, not expected to
occur on an ongoing basis in the future once Gallagher fully
assimilates the applicable acquisition. These costs are typically
associated with redundant workforce, compensation expense related
to amortization of certain retention bonus arrangements, extra
lease space, duplicate services and external costs incurred to
assimilate the acquisition into its IT related systems.
- Transaction-related costs, which are primarily associated with
the acquisitions of the Willis Towers Watson treaty reinsurance
brokerage operations, Buck, Cadence Insurance, Eastern Insurance
Group and My Plan Manager. These include costs related to
regulatory filings, legal and accounting services, insurance and
incentive compensation.
- Workforce related charges, which primarily include severance
costs (either accrued or paid) related to employee terminations and
other costs associated with redundant workforce.
- Lease termination related charges, which primarily include
costs related to terminations of real estate leases and abandonment
of leased space.
- Acquisition related adjustments principally relate to changes
in estimated acquisition earnout payables adjustments and
acquisition related compensation charges. In addition, from
time to time may include changes in balance sheet estimates arising
from conforming accounting principles, purchase-related true-ups
and other balance sheet adjustments made after the closing date;
the net impact of these on first quarter 2024 results was
approximately $26 million of revenues
and approximately $28 million of
compensation expense.
- Amortization of intangible assets, which reflects the
amortization of customer/expiration lists, non-compete agreements,
trade names and other intangible assets acquired through
Gallagher's merger and acquisition strategy, the impact to
amortization expense of acquisition valuation adjustments to these
assets as well as non-cash impairment charges.
- The impact of foreign currency translation, as applicable. The
amounts excluded with respect to foreign currency translation are
calculated by applying current year foreign exchange rates to the
same period in the prior year.
- Effective income tax rate impact, which levelizes the prior
year for the change in current year tax rates.
(8 of 13)
- Adjusted ratios - Adjusted compensation expense and
adjusted operating expense, respectively, each divided by adjusted
revenues.
Non-GAAP Earnings Measures
- EBITDAC and EBITDAC margin - EBITDAC is net
earnings before interest, income taxes, depreciation, amortization
and the change in estimated acquisition earnout payables and
EBITDAC margin is EBITDAC divided by total revenues (for the
Brokerage segment) and revenues before reimbursements (for the Risk
Management segment). These measures for the Brokerage and Risk
Management segments provide a meaningful representation of
Gallagher's operating performance for the overall business and
provide a meaningful way to measure its financial performance on an
ongoing basis.
- EBITDAC, as Adjusted and EBITDAC Margin, as
Adjusted - Adjusted EBITDAC is EBITDAC adjusted to exclude net
gains on divestitures, acquisition integration costs, workforce
related charges, lease termination related charges, acquisition
related adjustments, transaction related costs, legal and tax
related costs, and the period-over-period impact of foreign
currency translation, as applicable, and Adjusted EBITDAC margin is
Adjusted EBITDAC divided by total adjusted revenues (defined
above). These measures for the Brokerage and Risk Management
segments provide a meaningful representation of Gallagher's
operating performance, and are also presented to improve the
comparability of its results between periods by eliminating the
impact of the items that have a high degree of variability.
- EPS, as Adjusted and Net Earnings, as Adjusted -
Adjusted net earnings have been adjusted to exclude the after-tax
impact of net gains on divestitures, acquisition integration costs,
the impact of foreign currency translation, workforce related
charges, lease termination related charges, acquisition related
adjustments, transaction related costs, amortization of intangible
assets, legal and tax related costs and effective income tax rate
impact, as applicable. Adjusted EPS is Adjusted Net Earnings
divided by diluted weighted average shares outstanding. This
measure provides a meaningful representation of Gallagher's
operating performance (and as such should not be used as a measure
of Gallagher's liquidity), and for the overall business is also
presented to improve the comparability of its results between
periods by eliminating the impact of the items that have a high
degree of variability.
Organic Revenues (a non-GAAP measure) - For the
Brokerage segment, organic change in base commission and fee
revenues, supplemental revenues and contingent revenues exclude the
first twelve months of such revenues generated from acquisitions
and such revenues related to divested operations in each year
presented. These revenues are excluded from organic revenues
in order to help interested persons analyze the revenue growth
associated with the operations that were a part of Gallagher in
both the current and prior period. In addition, organic
change in base commission and fee revenues, supplemental revenues
and contingent revenues excludes the period-over-period impact of
foreign currency translation to improve the comparability of its
results between periods. For the Risk Management segment,
organic change in fee revenues excludes the first twelve months of
such revenues generated from acquisitions and such revenues related
to divested operations in each year presented. In addition,
change in organic growth in fee revenues excludes the
period-over-period impact of foreign currency translation to
improve the comparability of its results between periods.
These revenue items are excluded from organic revenues in order
to determine a comparable, but non-GAAP, measurement of revenue
growth that is associated with the revenue sources that are
expected to continue in the current year and beyond, as well as
eliminating the impact of the items that have a high degree of
variability. Gallagher has historically viewed organic
revenue growth as an important indicator when assessing and
evaluating the performance of its Brokerage and Risk Management
segments. Gallagher also believes that using this non-GAAP
measure allows readers of its financial statements to measure,
analyze and compare the growth from its Brokerage and Risk
Management segments in a meaningful and consistent manner.
Reconciliation of Non-GAAP Information Presented to GAAP
Measures - This press release includes tabular
reconciliations to the most comparable GAAP measures, as follows:
for EBITDAC (on pages 10 and 11), for adjusted revenues,
adjusted EBITDAC and adjusted diluted net earnings per share (on
page 1), for organic revenue measures (on pages 2 and 4,
respectively, for the Brokerage and Risk Management segments), for
adjusted compensation and operating expenses and adjusted EBITDAC
margin (on pages 4 and 5, respectively, for the Brokerage and
Risk Management segments).
(9 of 13)
Arthur J. Gallagher & Co.
|
Reported Statement of Earnings and EBITDAC - 1st
Quarter March 31,
|
(Unaudited - in
millions except per share, percentage and workforce
data)
|
|
|
|
|
|
|
|
|
|
1st Q
Ended
|
|
1st Q
Ended
|
Brokerage
Segment
|
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
|
|
|
|
|
Commissions
|
|
$
1,993.6
|
|
$
1,747.4
|
Fees
|
|
606.7
|
|
412.7
|
Supplemental
revenues
|
|
93.9
|
|
81.6
|
Contingent
revenues
|
|
86.0
|
|
71.8
|
Interest income,
premium finance revenues and other income
|
|
84.7
|
|
61.7
|
Total revenues
|
|
2,864.9
|
|
2,375.2
|
|
|
|
|
|
|
Compensation
|
|
1,476.8
|
|
1,206.1
|
Operating
|
|
339.4
|
|
288.5
|
Depreciation
|
|
32.8
|
|
27.9
|
Amortization
|
|
156.0
|
|
120.2
|
Change in estimated
acquisition earnout payables
|
|
(16.2)
|
|
41.6
|
Expenses
|
|
1,988.8
|
|
1,684.3
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
876.1
|
|
690.9
|
Provision for income
taxes
|
|
223.5
|
|
175.6
|
|
|
|
|
|
|
Net
earnings
|
|
652.6
|
|
515.3
|
Net earnings
attributable to noncontrolling interests
|
|
4.3
|
|
0.8
|
|
|
|
|
|
|
Net earnings
attributable to controlling interests
|
|
$
648.3
|
|
$
514.5
|
|
|
|
|
|
|
EBITDAC
|
|
|
|
|
Net earnings
|
|
$
652.6
|
|
$
515.3
|
Provision for income
taxes
|
|
223.5
|
|
175.6
|
Depreciation
|
|
32.8
|
|
27.9
|
Amortization
|
|
156.0
|
|
120.2
|
Change in estimated
acquisition earnout payables
|
|
(16.2)
|
|
41.6
|
|
|
|
|
|
|
EBITDAC
|
|
$
1,048.7
|
|
$
880.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Q
Ended
|
|
1st Q
Ended
|
Risk Management
Segment
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
|
|
|
|
|
Fees
|
|
$
344.5
|
|
$
293.0
|
Interest income and
other income
|
|
8.3
|
|
4.6
|
Revenues before reimbursements
|
|
352.8
|
|
297.6
|
Reimbursements
|
|
38.6
|
|
33.2
|
Total revenues
|
|
391.4
|
|
330.8
|
|
|
|
|
|
|
Compensation
|
|
213.9
|
|
179.8
|
Operating
|
|
68.4
|
|
61.9
|
Reimbursements
|
|
38.6
|
|
33.2
|
Depreciation
|
|
10.9
|
|
8.7
|
Amortization
|
|
6.3
|
|
1.5
|
Change in estimated
acquisition earnout payables
|
|
0.1
|
|
0.2
|
Expenses
|
|
338.2
|
|
285.3
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
53.2
|
|
45.5
|
Provision for income
taxes
|
|
13.9
|
|
12.0
|
|
|
|
|
|
|
Net
earnings
|
|
39.3
|
|
33.5
|
Net earnings
attributable to noncontrolling interests
|
|
-
|
|
-
|
|
|
|
|
|
|
Net earnings
attributable to controlling interests
|
|
$
39.3
|
|
$
33.5
|
|
|
|
|
|
|
EBITDAC
|
|
|
|
|
Net
earnings
|
|
$
39.3
|
|
$
33.5
|
Provision for income
taxes
|
|
13.9
|
|
12.0
|
Depreciation
|
|
10.9
|
|
8.7
|
Amortization
|
|
6.3
|
|
1.5
|
Change in estimated
acquisition earnout payables
|
|
0.1
|
|
0.2
|
|
|
|
|
|
|
EBITDAC
|
|
$
70.5
|
|
$
55.9
|
|
|
|
|
|
|
See "Information
Regarding Non-GAAP Measures" beginning on page 8 of 13.
|
|
|
|
|
|
|
|
|
|
|
(10 of 13)
|
Arthur J. Gallagher & Co.
|
Reported Statement of Earnings and EBITDAC - 1st
Quarter March 31,
|
(Unaudited - in
millions except share and per share data)
|
|
|
|
|
|
|
|
|
|
1st Q
Ended
|
|
1st Q
Ended
|
Corporate
Segment
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
|
|
|
|
|
Other income
|
|
$
0.4
|
|
$
0.1
|
|
Total
revenues
|
|
0.4
|
|
0.1
|
|
|
|
|
|
|
Compensation
|
|
35.2
|
|
29.6
|
Operating
|
|
27.9
|
|
32.1
|
Interest
|
|
92.2
|
|
67.9
|
Depreciation
|
|
1.7
|
|
1.1
|
|
Expenses
|
|
157.0
|
|
130.7
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(156.6)
|
|
(130.6)
|
Benefit for income
taxes
|
|
(77.4)
|
|
(68.4)
|
|
|
|
|
|
|
Net loss
|
|
(79.2)
|
|
(62.2)
|
Net loss attributable
to noncontrolling interests
|
|
-
|
|
(0.7)
|
|
|
|
|
|
|
Net loss
attributable to controlling interests
|
|
$
(79.2)
|
|
$
(61.5)
|
|
|
|
|
|
|
EBITDAC
|
|
|
|
|
Net loss
|
|
$
(79.2)
|
|
$
(62.2)
|
Benefit for income
taxes
|
|
(77.4)
|
|
(68.4)
|
Interest
|
|
92.2
|
|
67.9
|
Depreciation
|
|
1.7
|
|
1.1
|
|
|
|
|
|
|
EBITDAC
|
|
$
(62.7)
|
|
$
(61.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Q
Ended
|
|
1st Q
Ended
|
Total
Company
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
|
|
|
|
|
Commissions
|
|
$
1,993.6
|
|
$
1,747.4
|
Fees
|
|
951.2
|
|
705.7
|
Supplemental
revenues
|
|
93.9
|
|
81.6
|
Contingent
revenues
|
|
86.0
|
|
71.8
|
Interest income,
premium finance revenues and other income
|
|
93.4
|
|
66.4
|
|
Revenues before
reimbursements
|
|
3,218.1
|
|
2,672.9
|
Reimbursements
|
|
38.6
|
|
33.2
|
|
Total
revenues
|
|
3,256.7
|
|
2,706.1
|
|
|
|
|
|
|
Compensation
|
|
1,725.9
|
|
1,415.5
|
Operating
|
|
435.7
|
|
382.5
|
Reimbursements
|
|
38.6
|
|
33.2
|
Interest
|
|
92.2
|
|
67.9
|
Depreciation
|
|
45.4
|
|
37.7
|
Amortization
|
|
162.3
|
|
121.7
|
Change in estimated
acquisition earnout payables
|
|
(16.1)
|
|
41.8
|
|
Expenses
|
|
2,484.0
|
|
2,100.3
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
772.7
|
|
605.8
|
Provision for income
taxes
|
|
160.0
|
|
119.2
|
|
|
|
|
|
|
Net earnings
|
|
612.7
|
|
486.6
|
Net earnings
attributable to noncontrolling interests
|
|
4.3
|
|
0.1
|
|
|
|
|
|
|
Net earnings
attributable to controlling interests
|
|
$
608.4
|
|
$
486.5
|
|
|
|
|
|
|
Diluted net earnings
per share
|
|
$
2.74
|
|
$
2.24
|
|
|
|
|
|
|
Dividends declared per
share
|
|
$
0.60
|
|
$
0.55
|
|
|
|
|
|
|
EBITDAC
|
|
|
|
|
Net earnings
|
|
$
612.7
|
|
$
486.6
|
Provision for income
taxes
|
|
160.0
|
|
119.2
|
Interest
|
|
92.2
|
|
67.9
|
Depreciation
|
|
45.4
|
|
37.7
|
Amortization
|
|
162.3
|
|
121.7
|
Change in estimated
acquisition earnout payables
|
|
(16.1)
|
|
41.8
|
|
|
|
|
|
|
EBITDAC
|
|
$
1,056.5
|
|
$
874.9
|
|
|
|
|
|
|
See "Information
Regarding Non-GAAP Measures" beginning on page 8 of 13.
|
|
|
|
|
|
|
|
|
|
|
(11 of 13)
|
Arthur J. Gallagher & Co.
|
Consolidated Balance Sheet
|
(Unaudited - in
millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar 31,
2024
|
|
Dec 31,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
$
1,762.6
|
|
$
971.5
|
Fiduciary
assets
|
|
|
|
|
|
|
|
|
|
|
|
35,156.1
|
|
26,907.9
|
Accounts receivable,
net
|
|
|
|
|
|
|
|
|
|
|
|
4,148.7
|
|
3,786.6
|
Other current
assets
|
|
|
|
|
|
|
|
|
|
|
|
412.1
|
|
450.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
|
|
|
|
|
|
|
|
|
41,479.5
|
|
32,116.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed assets -
net
|
|
|
|
|
|
|
|
|
|
|
|
704.8
|
|
726.4
|
Deferred income taxes
(includes tax credit carryforwards of $821.3 in 2024 and $867.4 in
2023)
|
|
|
|
|
|
|
|
|
|
|
|
1,054.9
|
|
1,132.3
|
Other noncurrent
assets
|
|
|
|
|
|
|
|
|
|
|
|
1,197.0
|
|
1,131.8
|
Right-of-use
assets
|
|
|
|
|
|
|
|
|
|
|
|
385.9
|
|
400.3
|
Goodwill
|
|
|
|
|
|
|
|
|
|
|
|
11,532.1
|
|
11,475.6
|
Amortizable intangible
assets - net
|
|
|
|
|
|
|
|
|
|
|
|
4,621.7
|
|
4,633.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
$
60,975.9
|
|
$
51,615.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiduciary
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
$
35,156.1
|
|
$
26,907.9
|
Accrued compensation
and other current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
3,467.3
|
|
2,553.1
|
Deferred revenue -
current
|
|
|
|
|
|
|
|
|
|
|
|
720.6
|
|
644.7
|
Premium financing
debt
|
|
|
|
|
|
|
|
|
|
|
|
184.3
|
|
289.0
|
Corporate related
borrowings - current
|
|
|
|
|
|
|
|
|
|
|
|
108.2
|
|
670.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
39,636.5
|
|
31,064.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate related
borrowings - noncurrent
|
|
|
|
|
|
|
|
|
|
|
|
7,989.6
|
|
7,006.0
|
Deferred revenue -
noncurrent
|
|
|
|
|
|
|
|
|
|
|
|
64.7
|
|
61.5
|
Lease liabilities -
noncurrent
|
|
|
|
|
|
|
|
|
|
|
|
338.0
|
|
352.2
|
Other noncurrent
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
1,602.9
|
|
2,316.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
49,631.7
|
|
40,800.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock - issued
and outstanding
|
|
|
|
|
|
|
|
|
|
|
|
218.5
|
|
216.7
|
Capital in excess of
par value
|
|
|
|
|
|
|
|
|
|
|
|
7,502.0
|
|
7,297.8
|
Retained
earnings
|
|
|
|
|
|
|
|
|
|
|
|
4,529.3
|
|
4,052.9
|
Accumulated other
comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
(949.0)
|
|
(792.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total controlling
interests stockholders' equity
|
|
|
|
|
|
|
|
|
|
11,300.8
|
|
10,775.3
|
Noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
43.4
|
|
40.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
11,344.2
|
|
10,815.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
$
60,975.9
|
|
$
51,615.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arthur J. Gallagher & Co.
|
Other Information
|
(Unaudited - data is
rounded where indicated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Q
Ended
|
|
4th Q
Ended
|
|
1st Q
Ended
|
OTHER
INFORMATION
|
|
|
|
|
|
|
|
|
|
Mar 31,
2024
|
|
Dec 31,
2023
|
|
Mar 31,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding (000s)
|
|
|
|
|
|
|
|
217,464
|
|
216,326
|
|
212,778
|
Diluted weighted
average shares outstanding (000s)
|
|
|
|
|
|
|
|
221,957
|
|
221,104
|
|
216,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of common shares
outstanding at end of period (000s)
|
|
|
|
|
|
218,516
|
|
216,686
|
|
214,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workforce at end of
period (includes acquisitions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage
|
|
|
|
|
|
|
|
|
|
39,989
|
|
39,337
|
|
33,623
|
|
Risk
Management
|
|
|
|
|
|
|
|
|
|
9,832
|
|
9,747
|
|
8,804
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
52,980
|
|
52,118
|
|
45,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per
Share (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited - in
millions except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
Net
Earnings
|
|
|
|
|
|
|
|
Earnings
|
|
Provision
|
|
|
|
(Loss)
|
|
(Loss)
|
|
Diluted
Net
|
|
|
|
|
|
(Loss)
|
|
(Benefit)
|
|
|
|
Attributable
to
|
|
Attributable
to
|
|
Earnings
|
|
|
|
|
|
Before
Income
|
|
for
Income
|
|
Net
Earnings
|
|
Noncontrolling
|
|
Controlling
|
|
(Loss)
|
|
|
|
|
|
Taxes
|
|
Taxes
|
|
(Loss)
|
|
Interests
|
|
Interests
|
|
per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Q Ended March
31, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage, as
reported
|
|
|
|
$
876.1
|
|
$
223.5
|
|
$
652.6
|
|
$
4.3
|
|
$
648.3
|
|
$
2.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (gains) on
divestitures
|
|
|
|
(0.5)
|
|
(0.1)
|
|
(0.4)
|
|
-
|
|
(0.4)
|
|
-
|
Acquisition
integration
|
|
|
|
48.7
|
|
12.3
|
|
36.4
|
|
-
|
|
36.4
|
|
0.16
|
Workforce and lease
termination
|
|
|
|
11.6
|
|
2.9
|
|
8.7
|
|
-
|
|
8.7
|
|
0.04
|
Acquisition related
adjustments
|
|
|
|
(11.1)
|
|
(2.8)
|
|
(8.3)
|
|
(3.0)
|
|
(5.3)
|
|
(0.02)
|
Amortization of
intangible assets
|
|
|
|
156.0
|
|
39.3
|
|
116.7
|
|
-
|
|
116.7
|
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage, as
adjusted
|
|
|
|
$
1,080.8
|
|
$
275.1
|
|
$
805.7
|
|
$
1.3
|
|
$
804.4
|
|
$
3.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management, as
reported
|
|
|
|
$
53.2
|
|
$
13.9
|
|
$
39.3
|
|
$
-
|
|
$
39.3
|
|
$
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses on
divestitures
|
|
|
|
0.2
|
|
0.1
|
|
0.1
|
|
-
|
|
0.1
|
|
-
|
Acquisition
integration
|
|
|
|
0.7
|
|
0.2
|
|
0.5
|
|
-
|
|
0.5
|
|
-
|
Workforce and lease
termination
|
|
|
|
1.2
|
|
0.3
|
|
0.9
|
|
-
|
|
0.9
|
|
-
|
Acquisition related
adjustments
|
|
|
|
0.1
|
|
-
|
|
0.1
|
|
-
|
|
0.1
|
|
-
|
Amortization of
intangible assets
|
|
|
|
6.3
|
|
1.8
|
|
4.5
|
|
-
|
|
4.5
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management, as
adjusted
|
|
|
|
$
61.7
|
|
$
16.3
|
|
$
45.4
|
|
$
-
|
|
$
45.4
|
|
$
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate, as
reported
|
|
|
|
$
(156.6)
|
|
$
(77.4)
|
|
$
(79.2)
|
|
$
-
|
|
$
(79.2)
|
|
$
(0.36)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction-related
costs
|
|
|
|
3.2
|
|
0.5
|
|
2.7
|
|
-
|
|
2.7
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate, as
adjusted
|
|
|
|
$
(153.4)
|
|
$
(76.9)
|
|
$
(76.5)
|
|
$
-
|
|
$
(76.5)
|
|
$
(0.34)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See "Information
Regarding Non-GAAP Measures" beginning on page 8 of 13.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12 of 13)
|
Reconciliation of
Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per
Share (Unaudited) - Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited - in
millions except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
Net
Earnings
|
|
|
|
|
|
|
|
Earnings
|
|
Provision
|
|
|
|
(Loss)
|
|
(Loss)
|
|
Diluted
Net
|
|
|
|
|
|
(Loss)
|
|
(Benefit)
|
|
|
|
Attributable
to
|
|
Attributable
to
|
|
Earnings
|
|
|
|
|
|
Before
Income
|
|
for
Income
|
|
Net
Earnings
|
|
Noncontrolling
|
|
Controlling
|
|
(Loss)
|
|
|
|
|
|
Taxes
|
|
Taxes
|
|
(Loss)
|
|
Interests
|
|
Interests
|
|
per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Q Ended March
31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage, as
reported
|
|
|
|
$
690.9
|
|
$
175.6
|
|
$
515.3
|
|
$
0.8
|
|
$
514.5
|
|
$
2.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (gains) on
divestitures
|
|
|
|
(0.2)
|
|
-
|
|
(0.2)
|
|
-
|
|
(0.2)
|
|
-
|
Acquisition
integration
|
|
|
|
51.2
|
|
11.5
|
|
39.7
|
|
-
|
|
39.7
|
|
0.18
|
Workforce and lease
termination
|
|
|
|
15.5
|
|
3.7
|
|
11.8
|
|
-
|
|
11.8
|
|
0.06
|
Acquisition related
adjustments
|
|
|
|
33.4
|
|
7.8
|
|
25.6
|
|
-
|
|
25.6
|
|
0.12
|
Amortization of
intangible assets
|
|
|
|
120.2
|
|
31.1
|
|
89.1
|
|
-
|
|
89.1
|
|
0.41
|
Effective income tax
rate impact
|
|
|
|
-
|
|
2.5
|
|
(2.5)
|
|
-
|
|
(2.5)
|
|
(0.01)
|
Levelized foreign
currency translation
|
|
|
|
(1.1)
|
|
(0.2)
|
|
(0.9)
|
|
-
|
|
(0.9)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage, as
adjusted
|
|
|
|
$
909.9
|
|
$
232.0
|
|
$
677.9
|
|
$
0.8
|
|
$
677.1
|
|
$
3.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management, as
reported
|
|
|
|
$
45.5
|
|
$
12.0
|
|
$
33.5
|
|
$
-
|
|
$
33.5
|
|
$
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (gains) on
divestitures
|
|
|
|
(0.1)
|
|
-
|
|
(0.1)
|
|
-
|
|
(0.1)
|
|
-
|
Acquisition
integration
|
|
|
|
0.6
|
|
0.2
|
|
0.4
|
|
-
|
|
0.4
|
|
-
|
Workforce and lease
termination
|
|
|
|
0.6
|
|
0.1
|
|
0.5
|
|
-
|
|
0.5
|
|
-
|
Acquisition related
adjustments
|
|
|
|
0.1
|
|
-
|
|
0.1
|
|
-
|
|
0.1
|
|
-
|
Amortization of
intangible assets
|
|
|
|
1.5
|
|
0.4
|
|
1.1
|
|
-
|
|
1.1
|
|
0.01
|
Levelized foreign
currency translation
|
|
|
|
(0.1)
|
|
-
|
|
(0.1)
|
|
-
|
|
(0.1)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management, as
adjusted
|
|
|
|
$
48.1
|
|
$
12.7
|
|
$
35.4
|
|
$
-
|
|
$
35.4
|
|
$
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate, as
reported
|
|
|
|
$
(130.6)
|
|
$
(68.4)
|
|
$
(62.2)
|
|
$
(0.7)
|
|
$
(61.5)
|
|
$
(0.28)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction-related
costs
|
|
|
|
4.4
|
|
1.1
|
|
3.3
|
|
-
|
|
3.3
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate, as
adjusted
|
|
|
|
$
(126.2)
|
|
$
(67.3)
|
|
$
(58.9)
|
|
$
(0.7)
|
|
$
(58.2)
|
|
$
(0.27)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See "Information
Regarding Non-GAAP Measures" on page 8 of 13.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ray Iardella
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President -
Investor Relations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
630-285-3661 or
ray_iardella@ajg.com
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13 of 13)
View original
content:https://www.prnewswire.com/news-releases/arthur-j-gallagher--co-announces-first-quarter-2024-financial-results-302128029.html
SOURCE Arthur J. Gallagher &
Co.