2014 Q4 Form 10-K Financial Statement

#000119312516457703 Filed on February 10, 2016

View on sec.gov

Income Statement

Concept 2014 Q4 2014 Q3 2014 Q2
Revenue $1.245B $1.287B $1.179B
YoY Change 39.9% 53.96% 51.29%
Cost Of Revenue $897.9M $326.2M $270.5M
YoY Change 42.8% 122.06% 253.13%
Gross Profit $347.5M $960.6M $908.8M
YoY Change 32.94% 39.44% 29.29%
Gross Profit Margin 27.9% 74.65% 77.06%
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $73.60M $18.60M $16.60M
YoY Change 46.32% 30.07% 26.72%
% of Gross Profit 21.18% 1.94% 1.83%
Operating Expenses $295.5M $197.3M $179.2M
YoY Change 49.09% 48.23% 30.04%
Operating Profit $52.00M $763.3M $729.6M
YoY Change -17.72% 37.33% 29.11%
Interest Expense -$25.70M $25.90M $21.20M
YoY Change 84.89% 97.71% 78.15%
% of Operating Profit -49.42% 3.39% 2.91%
Other Income/Expense, Net
YoY Change
Pretax Income $30.30M $95.40M $111.9M
YoY Change -38.54% 11.58% 14.89%
Income Tax -$25.20M -$5.900M -$1.800M
% Of Pretax Income -83.17% -6.18% -1.61%
Net Earnings $51.50M $93.60M $109.0M
YoY Change -14.17% 25.47% 16.58%
Net Earnings / Revenue 4.14% 7.27% 9.24%
Basic Earnings Per Share $0.58 $0.71
Diluted Earnings Per Share $313.6K $0.58 $0.70
COMMON SHARES
Basic Shares Outstanding 160.2M shares 154.3M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2014 Q4 2014 Q3 2014 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $314.0M $291.0M $974.0M
YoY Change 5.37% 1.39% 305.83%
Cash & Equivalents $314.4M $290.5M $973.5M
Short-Term Investments
Other Short-Term Assets $666.7M $670.8M $360.2M
YoY Change 155.15% 157.5% 76.66%
Inventory
Prepaid Expenses $72.10M
Receivables
Other Receivables
Total Short-Term Assets $3.811B $3.972B $4.440B
YoY Change 32.54% 55.98% 70.61%
LONG-TERM ASSETS
Property, Plant & Equipment $195.4M $196.6M $193.7M
YoY Change 21.82% 32.75% 57.48%
Goodwill $3.450B $3.296B $3.028B
YoY Change 60.81% 86.07% 101.02%
Intangibles $1.776B $1.771B $1.632B
YoY Change 64.63% 92.93% 107.91%
Long-Term Investments
YoY Change
Other Assets $385.2M $399.0M $397.3M
YoY Change 20.11% 31.99% 46.82%
Total Long-Term Assets $6.199B $6.016B $5.579B
YoY Change 55.56% 75.71% 88.51%
TOTAL ASSETS
Total Short-Term Assets $3.811B $3.972B $4.440B
Total Long-Term Assets $6.199B $6.016B $5.579B
Total Assets $10.01B $9.988B $10.02B
YoY Change 45.91% 67.3% 80.14%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $2.623B $2.755B $2.819B
YoY Change 21.72% 46.86% 44.71%
Accrued Expenses $624.0M $561.0M $492.0M
YoY Change 68.19% 55.4% 73.24%
Deferred Revenue
YoY Change
Short-Term Debt $140.0M $147.0M $253.0M
YoY Change -77.8% -37.58%
Long-Term Debt Due $140.0M $147.0M $253.0M
YoY Change -77.81% -37.71%
Total Short-Term Liabilities $3.643B $3.770B $3.875B
YoY Change 10.9% 46.24% 65.34%
LONG-TERM LIABILITIES
Long-Term Debt $2.125B $2.125B $2.125B
YoY Change 157.58% 157.58% 129.73%
Other Long-Term Liabilities $937.2M $837.2M $769.7M
YoY Change 40.89% 31.82% 30.15%
Total Long-Term Liabilities $3.062B $2.962B $2.895B
YoY Change 105.49% 102.88% 90.89%
TOTAL LIABILITIES
Total Short-Term Liabilities $3.643B $3.770B $3.875B
Total Long-Term Liabilities $3.062B $2.962B $2.895B
Total Liabilities $6.705B $6.732B $6.770B
YoY Change 40.42% 66.72% 75.38%
SHAREHOLDERS EQUITY
Retained Earnings $676.0M $683.7M $648.4M
YoY Change 13.35% 17.23% 16.85%
Common Stock $2.814B $2.656B $2.547B
YoY Change 88.64% 90.97% 108.82%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $3.229B $3.256B $3.250B
YoY Change
Total Liabilities & Shareholders Equity $10.01B $9.988B $10.02B
YoY Change 45.91% 67.3% 80.14%

Cashflow Statement

Concept 2014 Q4 2014 Q3 2014 Q2
OPERATING ACTIVITIES
Net Income $51.50M $93.60M $109.0M
YoY Change -14.17% 25.47% 16.58%
Depreciation, Depletion And Amortization $73.60M $18.60M $16.60M
YoY Change 46.32% 30.07% 26.72%
Cash From Operating Activities $144.1M $35.40M $138.7M
YoY Change 102.1% -82.71% 513.72%
INVESTING ACTIVITIES
Capital Expenditures -$21.80M -$17.60M -$22.30M
YoY Change -8.4% -48.08% -16.17%
Acquisitions
YoY Change
Other Investing Activities -$79.20M -$431.7M -$1.395B
YoY Change -80.07% 86.64% 1216.9%
Cash From Investing Activities -$101.0M -$449.3M -$1.417B
YoY Change -76.02% 69.42% 969.36%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -33.00M -264.3M 1.494B
YoY Change -109.13% -353.89% 1054.25%
NET CHANGE
Cash From Operating Activities 144.1M 35.40M 138.7M
Cash From Investing Activities -101.0M -449.3M -1.417B
Cash From Financing Activities -33.00M -264.3M 1.494B
Net Change In Cash 10.10M -678.2M 215.4M
YoY Change -11.4% -1651.95% 1004.62%
FREE CASH FLOW
Cash From Operating Activities $144.1M $35.40M $138.7M
Capital Expenditures -$21.80M -$17.60M -$22.30M
Free Cash Flow $165.9M $53.00M $161.0M
YoY Change 74.45% -77.8% 227.24%

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CY2015 dei Document Fiscal Period Focus
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FY
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<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Nature of Operations -</b> Arthur J. Gallagher&#xA0;&amp; Co. and its subsidiaries, collectively referred to herein as we, our, us or the company, provide insurance brokerage and risk management services to a wide variety of commercial, industrial, institutional and governmental organizations through three reportable operating segments. Commission and fee revenue generated by the brokerage segment is primarily related to the negotiation and placement of insurance for our clients. Fee revenue generated by the risk management segment is primarily related to claims management, information management, risk control consulting (loss control) services and appraisals in the property/casualty market. Investment income and other revenue are generated from our premium financing operations and our investment portfolio, which includes invested cash and restricted funds, as well as clean energy and other investments. We are headquartered in Itasca, Illinois, have operations in 31 countries and offer client-service capabilities in more than 150&#xA0;countries globally through a network of correspondent insurance brokers and consultants.</font></p> </div>
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2015
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<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Basis of Presentation -</b> The accompanying consolidated financial statements include our accounts and all of our majority-owned subsidiaries (50% or greater ownership). Substantially all of our investments in partially owned entities in which our ownership is less than 50% are accounted for using the equity method based on the legal form of our ownership interest and the applicable ownership percentage of the entity. However, in situations where a less than 50%-owned investment has been determined to be a variable interest entity (which we refer to as a VIE) and we are deemed to be the primary beneficiary in accordance with the variable interest model of consolidation, we will consolidate the investment into our consolidated financial statements. For partially owned entities accounted for using the equity method, our share of the net earnings of these entities is included in consolidated net earnings. All material intercompany accounts and transactions have been eliminated in consolidation.</font></p> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: Times New Roman" size="2">In the preparation of our consolidated financial statements as of December&#xA0;31, 2015, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition in our consolidated financial statements and/or disclosure in the notes thereto.</font></p> </div>
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CY2015 dei Document Type
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CY2015 dei Current Fiscal Year End Date
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CY2015 dei Entity Current Reporting Status
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CY2015 dei Entity Registrant Name
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GALLAGHER ARTHUR J & CO
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Eligible participants had from September 12, 2014 to November 30, 2014 to accept the offer, and the lump-sum payments were made in November and December of 2014, and the accelerated reduced annuity payments began as of December 1, 2014.
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<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Reclassification -</b> In first quarter 2015, we transferred management of a claims handling operation from the brokerage segment to the risk management segment. We made the applicable segment reclassifications to the prior-period amounts to conform to the current period presentation. The changes in the segment structure affect only the manner in which the results for the reportable segments were previously reported. These reclassifications did not impact our previously reported consolidated net earnings or financial position.</font></p> </div>
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CY2015 dei Document Period End Date
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2015-12-31
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<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Use of Estimates -</b> The preparation of our consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.</font></p> </div>
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2.07
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1300000
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2000000
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11500000
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32300000
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0
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354600000
CY2015 us-gaap Income Tax Reconciliation State And Local Income Taxes
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10200000
CY2015 ajg Number Of Countries In Which Company Has Operations
NumberOfCountriesInWhichCompanyHasOperations
31 Country
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400000
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22700000
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367800000
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1750 Employees
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-4900000
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565400000
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P7Y
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18200000
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306000 sqft
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1310800000
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400000
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49600000
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-217800000
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40600000
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AmountOfCommitmentExpirationOffBalanceSheetCommitmentsWithinYearThereafter
25700000
CY2015 ajg Deferred Equity Participation Plan Distributions To Key Executives Age
DeferredEquityParticipationPlanDistributionsToKeyExecutivesAge
Age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) or upon or after their actual retirement
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3000000
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93700000
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P1Y
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5300000
CY2015 ajg Commissions
Commissions
2338700000
CY2015 ajg Defined Benefit Plan Assumptions Used Calculating Benefit Obligation Expected Long Term Return On Plan Assets
DefinedBenefitPlanAssumptionsUsedCalculatingBenefitObligationExpectedLongTermReturnOnPlanAssets
0.0725 pure
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P4Y
CY2015 ajg Effective Income Tax Rate Reconciliation Changes In Unrecognized Tax Benefits Related To Resolution Of Federal And State Audits Expiration Of Various Statutes Of Limitations And Other Items
EffectiveIncomeTaxRateReconciliationChangesInUnrecognizedTaxBenefitsRelatedToResolutionOfFederalAndStateAuditsExpirationOfVariousStatutesOfLimitationsAndOtherItems
0.010 pure
CY2015 ajg Weighted Average Number Of Common And Common Equivalent Shares Outstanding
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173200000 shares
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5 Plant
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2018-02-28
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150 Country
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P10Y
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90 days or less
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7400000
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16200000
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9200000
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27000000
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0.60 pure
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RecordedEarnOutPayable
57600000
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-0.017 pure
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BusinessCombinationAggregateEarnoutObligationRecordedMaximum
229700000
CY2015 ajg Defined Benefit Plan Discretionary Contributions By Employer
DefinedBenefitPlanDiscretionaryContributionsByEmployer
0
CY2015 ajg Deferred Compensation And Restricted Stock
DeferredCompensationAndRestrictedStock
6200000
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CollateralizedDelinquencyReceivablesPeriod
P7D
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DefinedBenefitPlanMinimumContributionByEmployer
0
CY2015 ajg Tax Expense From Issuance Of Common Stock
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5300000
CY2015 ajg Options To Purchase Common Stock Shares Outstanding
OptionsToPurchaseCommonStockSharesOutstanding
3500000 shares
CY2015 ajg Supplemental Commissions
SupplementalCommissions
125500000
CY2015 ajg Amount Of Commitment Expiration Off Balance Sheet Commitments Within Year Four
AmountOfCommitmentExpirationOffBalanceSheetCommitmentsWithinYearFour
1900000
CY2015 ajg Purchase Of Subsidiary Shares From Noncontrolling Interest
PurchaseOfSubsidiarySharesFromNoncontrollingInterest
-15000000
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AmountOfCommitmentExpirationOffBalanceSheetCommitments
62800000
CY2015 ajg Insurance Contracts Premium Financing Terms
InsuranceContractsPremiumFinancingTerms
Premium financing contracts are structured to minimize potential bad debt expense to us. Such receivables are generally considered delinquent after seven days of the payment due date. In normal course, insurance policies are cancelled within one month of the contractual payment due date if the payment remains delinquent.
us-gaap Number Of Businesses Acquired
NumberOfBusinessesAcquired
383 Entity
CY2014Q1 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.36
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IncomeLossFromContinuingOperationsPerBasicShare
0.37
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NetIncomeLoss
49300000
CY2014Q1 us-gaap Revenues
Revenues
915000000
CY2014Q1 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
53900000
CY2014Q1 us-gaap Benefits Losses And Expenses
BenefitsLossesAndExpenses
861100000
CY2015Q1 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.13
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IncomeLossFromContinuingOperationsPerBasicShare
0.13
CY2015Q1 us-gaap Net Income Loss
NetIncomeLoss
21900000
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Revenues
1231300000
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IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
30900000
CY2015Q1 us-gaap Benefits Losses And Expenses
BenefitsLossesAndExpenses
1200400000
CY2014Q2 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.70
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IncomeLossFromContinuingOperationsPerBasicShare
0.71
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NetIncomeLoss
109000000
CY2014Q2 us-gaap Revenues
Revenues
1179300000
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IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
111900000
CY2014Q2 us-gaap Benefits Losses And Expenses
BenefitsLossesAndExpenses
1067400000
CY2015Q2 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.81
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IncomeLossFromContinuingOperationsPerBasicShare
0.82
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139300000
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1371400000
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128500000
CY2015Q2 us-gaap Benefits Losses And Expenses
BenefitsLossesAndExpenses
1242900000
CY2014Q3 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.58
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IncomeLossFromContinuingOperationsPerBasicShare
0.58
CY2014Q3 us-gaap Net Income Loss
NetIncomeLoss
93600000
CY2014Q3 us-gaap Revenues
Revenues
1286800000
CY2014Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
95400000
CY2014Q3 us-gaap Benefits Losses And Expenses
BenefitsLossesAndExpenses
1191400000
CY2015Q3 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.75
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IncomeLossFromContinuingOperationsPerBasicShare
0.76
CY2015Q3 us-gaap Net Income Loss
NetIncomeLoss
133300000
CY2015Q3 us-gaap Revenues
Revenues
1454800000
CY2015Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
105700000
CY2015Q3 us-gaap Benefits Losses And Expenses
BenefitsLossesAndExpenses
1349100000
CY2014Q4 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.31
CY2014Q4 us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
0.32
CY2014Q4 us-gaap Net Income Loss
NetIncomeLoss
51500000
CY2014Q4 us-gaap Revenues
Revenues
1245400000
CY2014Q4 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
30300000
CY2014Q4 us-gaap Defined Benefit Plan Benefits Paid
DefinedBenefitPlanBenefitsPaid
43300000
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BenefitsLossesAndExpenses
1215100000
CY2014Q4 ajg Defined Benefit Plan Settlements Benefit Obligation Before Tax
DefinedBenefitPlanSettlementsBenefitObligationBeforeTax
12000000
CY2015Q4 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.35
CY2015Q4 us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
0.35
CY2015Q4 us-gaap Net Income Loss
NetIncomeLoss
62300000
CY2015Q4 us-gaap Revenues
Revenues
1334900000
CY2015Q4 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
28400000
CY2015Q4 us-gaap Benefits Losses And Expenses
BenefitsLossesAndExpenses
1306500000

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