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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

(Mark One)

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2024

or

 

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 1-09761

 

ARTHUR J. GALLAGHER & CO.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

36-2151613

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

2850 Golf Road, Rolling Meadows, Illinois 60008

(Address of principal executive offices) (Zip Code)

(630) 773-3800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $1.00 per share

 

AJG

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

The number of outstanding shares of the registrant’s common stock, $1.00 par value, as of March 31, 2024 was approximately 218.5 million.

 

 

 


 

Information Concerning Forward-Looking Statements

This report contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future of Arthur J Gallagher & Co. and its subsidiaries, collectively referred to herein as we, our, us, Gallagher or the company, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward‑looking statements relate to expectations or forecasts of future events. Such statements use words such as “anticipate,” “believe,” “estimate,” “expect,” “contemplate,” “forecast,” “project,” “intend,” “plan,” “potential,” and other similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “see,” “should,” “will” and “would.” You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. For example, we may use forward-looking statements when addressing topics such as: the impact of general economic conditions, including significant inflation, interest rates and market uncertainty; the effects of geopolitical volatility, including repercussions from the war in Ukraine and the Middle East; market and industry conditions, including competitive and pricing trends; acquisition strategy including the expected size of our acquisition program; the expected impact of acquisitions and dispositions and integrating recent acquisitions, including comments regarding the expected benefits of our acquisition of the Willis Towers Watson plc treaty reinsurance brokerage operations (which we refer to as Willis Re), BCHR Holdings, L.P., and its subsidiaries, dba Buck (which we refer to as Buck), Cadence Insurance, Inc. (which we refer to as Cadence Insurance), Eastern Insurance Group, LLC (which we refer to as Eastern Insurance), My Plan Manager Group Pty Ltd (which we refer to as My Plan Manager), and other acquisitions larger than our typical tuck-in acquisitions and the expected duration and costs of integrating such large acquisitions; the development and performance of our services and products; changes in the composition or level of our revenues or earnings; our cost structure and the size and outcome of cost-saving or restructuring initiatives; future capital expenditures; future debt levels and anticipated actions to be taken in connection with maturing debt; future debt to earnings ratios; the outcome of contingencies; dividend policy; pension obligations; cash flow and liquidity; capital structure and financial losses; future actions by regulators; the outcome of existing regulatory actions, audits, reviews or litigation; the impact of changes in accounting rules; financial markets; interest rates; foreign exchange rates; matters relating to our operations; income taxes; expectations regarding our investments, human capital management, including diversity and inclusion initiatives; and environmental, social and governance matters, including climate-resilience and climate-advising products and services and carbon emissions. These forward‑looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors.

Potential factors that could impact results include:

Global economic and geopolitical events, such as high inflation and related monetary policy responses including increased interest rates; a recession or economic downturn, failures of financial institutions and other counterparties or a potential United States (U.S.) government shutdown or gridlock over increasing the U.S. debt ceiling; political violence, and instability, including geo-economic fragmentation;
Economic conditions that result in financial difficulties for underwriting enterprises or lead to reduced risk-taking capital capacity, for example, as a result of large payouts related to extreme weather events, or to the failure of such enterprises, including the increased risk of errors and omissions (which we refer to as E&O) claims against us;
Risks that could negatively affect the success of our acquisition strategy, including the impact of current economic uncertainty on our ability to source, review and price acquisitions; continuing consolidation in our industry and interest in acquiring insurance brokers on the part of private equity firms and newly public insurance brokers, which makes it more difficult to identify targets and in some cases makes them more expensive; inaccurate assumptions and failure to realize expected benefits; the risk that we may not receive timely regulatory approval of pending transactions; closing risks; execution risks; integration risks; poor cultural fit; the risk of post-acquisition deterioration leading to intangible asset impairment charges; and the risk we could incur or assume unanticipated liabilities such as cybersecurity issues or those relating to violations of anti-corruption and sanctions laws;
Risks related to Willis Re, Buck, Cadence Insurance, Eastern Insurance, My Plan Manager and other acquisitions larger than our usual tuck-in acquisitions, including risks related to our ability to successfully integrate operations, the possibility that our assumptions may be inaccurate resulting in unforeseen obligations or liabilities and failure to realize the expected benefits of these acquisitions;
Damage to our reputation, including as a result of environmental, social and governance (which we refer to as ESG) matters, and the potential for the Internet and social media to magnify the effects of such reputational issues;
Failure to meet our sustainability and ESG-related aspirations, goals and initiatives or to comply with increasingly complex climate-related regulations including increased risks related to “greenwashing”;
Failure to apply technology, data analytics and artificial intelligence effectively in driving value for our clients through technology-based solutions, or failure to gain internal efficiencies and effective internal controls through the application of technology and related tools;

- 2 -


 

Risks associated with the use of artificial intelligence (which we refer to as AI) in our business operations, including regulatory, data privacy, cybersecurity, E&O and competition risks;
Failure to attract and retain experienced and qualified talent, including our senior management team, or adequately plan and execute for the succession of such leaders; increased costs resulting from increased compensation and benefits packages as a result of a tighter labor market, and negative effects from restrictions on non-competes at the state and federal level;
Substantial increase in remote work among our employees, which may affect our corporate culture, productivity, collaboration and effective communication, increase cybersecurity or data breaches risks, heighten vulnerability to solicitations by competing firms and impact our ability to recruit and retain employees that prefer fully remote or fully in person work environments;
A disaster or other significant disruption to business continuity for our own operations or those of third-parties on which we rely, including cybersecurity incidents; natural disasters; political violence and unrest in the U.S. or elsewhere around the world; for example, our substantial operations in India could be negatively impacted as a result of the dispute between India and Pakistan involving the Kashmir region, rising tensions between India and China, incidents of terrorism in India, civil unrest or other reasons;
Sustained increases in the cost of employee benefits and compensation expense;
Risks arising from our international operations and changes in international conditions, including the risks posed by political and economic uncertainty in certain countries (including repercussions from the wars in Ukraine and the Middle East), maintaining regulatory and legal compliance across multiple jurisdictions (such as those relating to violations of anti‑corruption, sanctions, and privacy laws, increasingly complex regulatory requirements related to climate change and sustainability issues and increased protectionism), tariffs, trade wars, climate change and other long-term environmental, social and governance matters and global health risks;
Risks related to changes in U.S. or foreign tax laws, including a U.S. or foreign tax rate change, potential changes in guidance related to the U.S. Inflation Reduction Act, the Organisation for Economic Co-operation and Development’s (OECD) global minimum corporate tax regime, and other local policy changes;
Competitive pressures, including as a result of innovation, in each of our businesses;
Volatility or declines in premiums or other adverse trends in the insurance industry;
The higher level of variability inherent in contingent and supplemental revenues versus standard commission revenues;
Risks particular to our benefit consulting operations, including risks related to the acquisition of Buck;
Risks particular to our third-party claims administrations operations, including risks related to the availability of RISX‑FACS®, our proprietary risk management information system, wage inflation, staffing shortages, any slowing of the trend toward outsourcing claims administration, and the concentration of large amounts of revenue with certain clients;
Climate risks, including the risk of a systemic economic crisis and disruptions to our business caused by the transition to a low-carbon economy;
Cyber-attacks or other cybersecurity incidents and the heightened risk of such attacks as a result of the wars in Ukraine and the Middle East; improper disclosure of confidential, personal or proprietary data and changes to laws and regulations governing cybersecurity and data privacy;
Unfavorable determinations related to contingencies and legal proceedings;
Violations or alleged violations of the U.S. Foreign Corrupt Practices Act (which we refer to as FCPA), the United Kingdom (U.K.) Bribery Act 2010 or other anti-corruption laws and the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act, and the outcome of any existing or future investigation, review, regulatory action or litigation;
Failure to comply with regulatory requirements, including those related to governance and control requirements in particular jurisdictions, international sanctions, including new sanctions laws as a result of the wars in Ukraine and the Middle East; laws relating to the disclosure of ESG-related matters; laws relating to the use of AI, or a change in regulations or enforcement policies that adversely affects our operations (for example, relating to insurance broker compensation methods or restrictions on non-competes);
Changes to our financial presentation from new accounting estimates and assumptions;

- 3 -


 

Intellectual property risks;
Risks related to our legacy clean energy investments, including intellectual property claims, environmental and product liability claims, environmental compliance costs and the risk of disallowance by the Internal Revenue Service of previously claimed tax credits;
The risk that our outstanding debt adversely affects our financial flexibility and restrictions and limitations in the agreements and instruments governing our debt;
The risk of credit rating downgrades;
The risk we may not be able to receive dividends or other distributions from subsidiaries, including the effects of significant changes in foreign exchange rates;
The risk of share ownership dilution when we issue common stock; and
Volatility of the price of our common stock.

 

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions, including the risk factors referred to above. Our future performance and actual results or outcomes may differ materially from those expressed in forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of, and are based on information available to us on, the date of the applicable document. Many of the factors that will determine these results are beyond our ability to control or predict. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Forward-looking statements speak only as of the date that they are made, and we do not undertake any obligation to update any such statements or release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect new information, future or unexpected events or otherwise, except as required by applicable law or regulation. In addition, historical, current and forward-looking sustainability-related or ESG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

A detailed discussion of the factors that could cause actual results to differ materially from our published expectations is contained under the heading “Risk Factors” in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, this Quarterly Report on Form 10-Q and any other reports we file with the SEC in the future.

- 4 -


 

Arthur J. Gallagher & Co.

Index

 

 

 

 

Page No.

Part I.

Financial Information

 

 

 

 

 

 

 

Item 1.

Financial Statements (Unaudited):

 

 

 

 

 

 

 

 

 

Consolidated Statement of Earnings for the Three-month Periods Ended March 31, 2024 and 2023

 

6

 

 

 

 

 

 

 

Consolidated Statement of Comprehensive Earnings for the Three-month Periods Ended March 31, 2024 and 2023

 

7

 

 

 

 

 

 

 

Consolidated Balance Sheet at March 31, 2024 and December 31, 2023

 

8

 

 

 

 

 

 

 

Consolidated Statement of Cash Flows for the Three-month Periods Ended March 31, 2024 and 2023

 

9

 

 

 

 

 

 

 

Consolidated Statement of Stockholders’ Equity for the Three-month Periods Ended March 31, 2024 and 2023

 

10-11

 

 

 

 

 

 

 

Notes to March 31, 2024 Consolidated Financial Statements

 

12-32

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

33-56

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

56-57

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

57-58

 

 

 

 

 

Part II.

Other Information

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

58

 

 

 

 

 

 

Item 1A.

Risk Factors.

 

58

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

58-59

 

 

 

 

 

 

Item 6.

Exhibits

 

59

 

 

 

 

 

 

Signature

 

60

 

- 5 -


 

Part I - Financial Information

Item 1. Financial Statements (Unaudited)

Arthur J. Gallagher & Co.

Consolidated Statement of Earnings

(Unaudited - in millions, except per share data)

 

 

Three-month period ended

 

 

March 31,

 

 

2024

 

 

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

 

Total 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

 

Basic net earnings per share

$

2.80

 

 

$

2.29

 

Diluted net earnings per share

 

2.74

 

 

 

2.24

 

Dividends declared per common share

 

0.60

 

 

 

0.55

 

 

See notes to consolidated financial statements.

- 6 -


 

Arthur J. Gallagher & Co.

Consolidated Statement of Comprehensive Earnings

(Unaudited - in millions)

 

 

Three-month period ended

 

 

March 31,

 

 

2024

 

 

2023

 

Net earnings

$

612.7

 

 

$

486.6

 

Change in pension liability, net of taxes

 

0.3

 

 

 

0.8

 

Foreign currency translation, net of taxes

 

(155.8

)

 

 

33.3

 

Change in fair value of derivative investments,
   net of taxes

 

(1.4

)

 

 

4.9

 

Comprehensive earnings

 

455.8

 

 

 

525.6

 

Comprehensive earnings attributable to
   noncontrolling interests

 

4.3

 

 

 

 

Comprehensive earnings attributable to
   controlling interests

$

451.5

 

 

$

525.6

 

 

See notes to consolidated financial statements.

- 7 -


 

Arthur J. Gallagher & Co.

Consolidated Balance Sheet

(Unaudited - in millions)

 

 

 

March 31,
2024

 

 

December 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 shares in 2024 and 216.7 shares in 2023

 

 

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

)

Stockholders' equity attributable to controlling interests

 

 

11,300.8

 

 

 

10,775.3

 

Stockholders' equity attributable to 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

 

 

See notes to consolidated financial statements.

- 8 -


 

Arthur J. Gallagher & Co.

Consolidated Statement of Cash Flows

(Unaudited - in millions)

 

 

 

Three-month period ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings

 

$

612.7

 

 

$

486.6

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

207.7

 

 

 

159.4

 

Change in estimated acquisition earnout payables

 

 

(16.1

)

 

 

41.8

 

Amortization of deferred compensation and restricted stock

 

 

27.2

 

 

 

22.9

 

Stock-based and other noncash compensation expense

 

 

11.1

 

 

 

3.8

 

Payments on acquisition earnouts in excess of original estimates

 

 

(10.9

)

 

 

(35.3

)

Provision for deferred income taxes

 

 

55.7

 

 

 

31.9

 

Effect of changes in foreign exchange rates

 

 

(1.1

)

 

 

0.3

 

Net change in accounts receivable, net

 

 

(471.9

)

 

 

(642.2

)

Net change in deferred revenue

 

 

80.1

 

 

 

74.7

 

Net change in other current assets

 

 

(8.7

)

 

 

17.3

 

Net change in accrued compensation and other accrued liabilities

 

 

344.0

 

 

 

298.1

 

Net change in income taxes payable

 

 

(3.3

)

 

 

21.0

 

Net change in other noncurrent assets and liabilities

 

 

(37.2

)

 

 

(51.8

)

Net cash provided by operating activities

 

 

789.3

 

 

 

428.5

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(29.7

)

 

 

(29.7

)

Cash paid for acquisitions, net of cash and restricted cash acquired

 

 

(251.2

)

 

 

(311.4

)

Net proceeds from sales of operations/books of business

 

 

0.1

 

 

 

0.1

 

Net funding of investment transactions

 

 

0.1

 

 

 

0.4

 

Net funding of premium finance loans

 

 

88.8

 

 

 

84.0

 

Net cash used by investing activities

 

 

(191.9

)

 

 

(256.6

)

Cash flows from financing activities:

 

 

 

 

 

 

Payments on acquisition earnouts

 

 

(45.1

)

 

 

(66.6

)

Proceeds from issuance of common stock

 

 

52.0

 

 

 

30.3

 

Payments to noncontrolling interests

 

 

(3.1

)

 

 

(0.7

)

Dividends paid

 

 

(130.7

)

 

 

(117.4

)

Net change in fiduciary assets and liabilities

 

 

(205.8

)

 

 

311.8

 

Net borrowings on premium financing debt facility

 

 

(92.4

)

 

 

(83.7

)

Borrowings on line of credit facility

 

 

1,078.2

 

 

 

605.0

 

Repayments on line of credit facility

 

 

(1,215.0

)

 

 

(665.0

)

Net borrowings of corporate related long-term debt

 

 

567.2

 

 

 

893.7

 

Debt acquisition costs

 

 

(9.3

)

 

 

(9.3

)

Settlements on terminated interest rate swaps

 

 

(1.4

)

 

 

60.0

 

Net cash (used) provided by financing activities

 

 

(5.4

)

 

 

958.1

 

Effect of changes in foreign exchange rates on cash, cash equivalents,
   restricted cash and fiduciary cash

 

 

(54.5

)

 

 

(3.2

)

Net increase in cash, cash equivalents, restricted cash and fiduciary cash

 

 

537.5

 

 

 

1,126.8

 

Cash, cash equivalents, restricted cash and fiduciary cash at beginning of period

 

 

6,543.3

 

 

 

4,964.2

 

Cash, cash equivalents, restricted cash and fiduciary cash at end of period

 

$

7,080.8

 

 

$

6,091.0

 

See notes to consolidated financial statements.

- 9 -


 

Arthur J. Gallagher & Co.

Consolidated Statement of Stockholders’ Equity

(Unaudited - in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Retained

 

 

Comprehensive

 

 

Noncontrolling

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Par Value

 

 

Earnings

 

 

Loss

 

 

Interests

 

 

Total

 

Balance at December 31, 2023

 

 

216.7

 

 

$

216.7

 

 

$

7,297.8

 

 

$

4,052.9

 

 

$

(792.1

)

 

$

40.0

 

 

$

10,815.3

 

Net earnings

 

 

 

 

 

 

 

 

 

 

 

608.4

 

 

 

 

 

 

4.3

 

 

 

612.7

 

Net purchase of subsidiary shares
   from noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.3

)

 

 

(0.3

)

Dividends paid to noncontrolling
   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.6

)

 

 

(0.6

)

Net change in pension asset/
   liability, net of taxes of
   $
0.1 million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.3

 

 

 

 

 

 

0.3

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(155.8

)

 

 

 

 

 

(155.8

)

Change in fair value of derivative
   instruments, net of taxes of
   $(
0.4) million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.4

)

 

 

 

 

 

(1.4

)

Compensation expense related to
   stock option plan grants

 

 

 

 

 

 

 

 

15.1

 

 

 

 

 

 

 

 

 

 

 

 

15.1

 

Common stock issued in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Seven purchase transactions

 

 

0.4

 

 

 

0.4

 

 

 

87.9

 

 

 

 

 

 

 

 

 

 

 

 

88.3

 

Stock option plans

 

 

0.6

 

 

 

0.6

 

 

 

39.3

 

 

 

 

 

 

 

 

 

 

 

 

39.9

 

Employee stock purchase plan

 

 

0.1

 

 

 

0.1

 

 

 

12.1

 

 

 

 

 

 

 

 

 

 

 

 

12.2

 

Shares issued to benefit plans

 

 

0.4

 

 

 

0.4

 

 

 

98.1

 

 

 

 

 

 

 

 

 

 

 

 

98.5

 

Deferred compensation and
   restricted stock

 

 

0.3

 

 

 

0.3

 

 

 

(48.3

)

 

 

 

 

 

 

 

 

 

 

 

(48.0

)

Cash dividends declared on
   common stock

 

 

 

 

 

 

 

 

 

 

 

(132.0

)

 

 

 

 

 

 

 

 

(132.0

)

Balance at March 31, 2024

 

 

218.5

 

 

$

218.5

 

 

$

7,502.0

 

 

$

4,529.3

 

 

$

(949.0

)

 

$

43.4

 

 

$

11,344.2

 

 

 

See notes to consolidated financial statements.

 

 

- 10 -


 

Arthur J. Gallagher & Co.
Consolidated Statement of Stockholders’ Equity
(Unaudited - in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Retained

 

 

Comprehensive

 

 

Noncontrolling

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Par Value

 

 

Earnings

 

 

Loss

 

 

Interests

 

 

Total

 

Balance at December 31, 2022

 

 

211.9

 

 

$

211.9

 

 

$

6,509.9

 

 

$

3,562.2

 

 

$

(1,140.4

)

 

$

46.6

 

 

$

9,190.2

 

Net earnings

 

 

 

 

 

 

 

 

 

 

 

486.5

 

 

 

 

 

 

0.1

 

 

 

486.6

 

Net purchase of subsidiary shares
   from noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5.4

)

 

 

(5.4

)

Dividends paid to noncontrolling
   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.7

)

 

 

(0.7

)

Net change in pension asset/
   liability, net of taxes of
   $
0.2 million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.8

 

 

 

 

 

 

0.8

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33.3

 

 

 

(0.1

)

 

 

33.2

 

Change in fair value of derivative
   instruments, net of taxes of
   $
1.3 million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.9