Net income attributable to Aon stockholders was $144 million or $0.51 per share, compared to $120 million or $0.41 per share for the prior year quarter. Net income attributable to Aon stockholders from continuing operations increased 23% to $144 million or $0.51 per share, compared to $117 million or $0.40 per share for the prior year quarter. Net income per share attributable to Aon stockholders from continuing operations, excluding certain items, decreased 6% to $0.61 compared to $0.65 for the prior year quarter. Certain items that impacted third quarter results and comparisons with the prior year quarter are detailed in the reconciliation of non-GAAP measures on page 12 of this press release.
"Our third quarter results reflect solid operational performance against a challenging global economy. We delivered four percent organic revenue growth and a 150 basis point increase in margin in our Consulting segment and continued to improve the run-rate of organic revenue in our retail Brokerage business," said Greg Case, president and chief executive officer. "Our GRIP platform, Aon Broking initiatives and benefits related to the restructuring programs are expected to deliver long-term growth and significant margin improvement in our Brokerage segment. We also are excited about the recently completed merger of Hewitt with Aon Consulting, which substantially strengthens our position as the preeminent global professional services firm focused on risk and people. Aon Hewitt's senior leadership team is fully in place, the integration is well underway and support from clients around the globe has been exceptional."
THIRD QUARTER FINANCIAL SUMMARY
Total revenue was similar to the prior year quarter at $1.8 billion due to a 2% increase from acquisitions, primarily Allied North America, net of dispositions, offset by a 1% decrease from foreign currency translation and a 6% decline in fiduciary investment income.
Total operating expenses decreased 4% or $62 million to $1.5 billion due primarily to a $91 million decrease in restructuring related expenses, benefits related to the 2007 and Aon Benfield restructuring programs and an estimated $30 million favorable impact from foreign currency translation, partially offset by the inclusion of operating expenses related to recent acquisitions and $19 million of costs associated with the merger of Hewitt with Aon Consulting.
Restructuring expenses were $8 million in the third quarter compared to $99 million in the prior year quarter. Including the third quarter expenses, the Company has now incurred 100% of the $749 million of total costs necessary to deliver the remaining savings under the 2007 restructuring program and 84% of the $155 million of total costs necessary to deliver the remaining savings under the Aon Benfield restructuring program. An analysis of restructuring-related expenses by segment and type are detailed on page 13 of this release.
Restructuring savings in the third quarter related to the 2007 restructuring program are estimated at $125 million compared to $68 million in the prior year quarter. Of the estimated restructuring savings in the third quarter, $105 million were related to the Brokerage segment primarily from workforce reductions. Before any potential reinvestment of savings, the 2007 restructuring program is expected to deliver $536 million of annualized run-rate cost savings by the end of 2010.
Restructuring savings in the third quarter related to the Aon Benfield restructuring program are estimated at $27 million compared to $14 million in the
prior year quarter. Before any potential reinvestment of savings, the Benfield restructuring program is expected to deliver cumulative cost savings of $122 million in 2011.
Currency fluctuations in the third quarter favorably impacted adjusted net income from continuing operations by $0.02 per diluted share when the
Company translates prior year quarter results at current quarter foreign exchange rates.
Effective tax rate on net income from continuing operations increased to 29.4% in the third quarter compared to 26.7% in the prior year quarter due primarily to certain deferred tax adjustments. The underlying tax rate on continuing operations is estimated to be approximately 30% for the fourth quarter 2010 including the impact of the Hewitt merger.
Average diluted shares outstanding decreased to 282.2 million in the third quarter compared to 292.1 million in the prior year quarter due primarily to the Company's share repurchase program. The company has approximately $165 million remaining under the share repurchase program previously authorized in 2005 and $2 billion under the share repurchase program previously authorized in 2010.