|
ENGLAND AND WALES
|
|
98-1030901
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer
|
Incorporation or Organization)
|
|
Identification No.)
|
122 LEADENHALL STREET, LONDON, ENGLAND
|
|
EC3V 4AN
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
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(Do not check if a smaller reporting company)
|
|
|
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
(millions, except per share data)
|
|
June 30, 2016
|
|
June 30, 2015
|
June 30, 2016
|
|
June 30, 2015
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
||||||
Commissions, fees and other
|
|
$
|
2,761
|
|
|
$
|
2,800
|
|
$
|
5,548
|
|
|
$
|
5,642
|
|
Fiduciary investment income
|
|
5
|
|
|
5
|
|
10
|
|
|
10
|
|
||||
Total revenue
|
|
2,766
|
|
|
2,805
|
|
5,558
|
|
|
5,652
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||
Compensation and benefits
|
|
1,688
|
|
|
1,653
|
|
3,337
|
|
|
3,336
|
|
||||
Other general expenses
|
|
673
|
|
|
875
|
|
1,366
|
|
|
1,598
|
|
||||
Total operating expenses
|
|
2,361
|
|
|
2,528
|
|
4,703
|
|
|
4,934
|
|
||||
Operating income
|
|
405
|
|
|
277
|
|
855
|
|
|
718
|
|
||||
Interest income
|
|
3
|
|
|
4
|
|
5
|
|
|
7
|
|
||||
Interest expense
|
|
(73
|
)
|
|
(68
|
)
|
(142
|
)
|
|
(133
|
)
|
||||
Other income
|
|
—
|
|
|
1
|
|
18
|
|
|
43
|
|
||||
Income before income taxes
|
|
335
|
|
|
214
|
|
736
|
|
|
635
|
|
||||
Income taxes
|
|
55
|
|
|
26
|
|
129
|
|
|
106
|
|
||||
Net income
|
|
280
|
|
|
188
|
|
607
|
|
|
529
|
|
||||
Less: Net income attributable to noncontrolling interests
|
|
8
|
|
|
10
|
|
20
|
|
|
23
|
|
||||
Net income attributable to Aon shareholders
|
|
$
|
272
|
|
|
$
|
178
|
|
$
|
587
|
|
|
$
|
506
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share attributable to Aon shareholders
|
|
$
|
1.01
|
|
|
$
|
0.63
|
|
$
|
2.17
|
|
|
$
|
1.78
|
|
Diluted net income per share attributable to Aon shareholders
|
|
$
|
1.01
|
|
|
$
|
0.62
|
|
$
|
2.16
|
|
|
$
|
1.76
|
|
Cash dividends per share paid on ordinary shares
|
|
$
|
0.33
|
|
|
$
|
0.30
|
|
$
|
0.63
|
|
|
$
|
0.55
|
|
Weighted average ordinary shares outstanding - basic
|
|
268.0
|
|
|
284.5
|
|
269.9
|
|
|
284.3
|
|
||||
Weighted average ordinary shares outstanding - diluted
|
|
269.8
|
|
|
286.7
|
|
271.7
|
|
|
286.9
|
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
(millions)
|
|
June 30, 2016
|
|
June 30, 2015
|
June 30, 2016
|
|
June 30, 2015
|
||||||||
Net income
|
|
$
|
280
|
|
|
$
|
188
|
|
$
|
607
|
|
|
$
|
529
|
|
Less: Net income attributable to noncontrolling interests
|
|
8
|
|
|
10
|
|
20
|
|
|
23
|
|
||||
Net income attributable to Aon shareholders
|
|
$
|
272
|
|
|
$
|
178
|
|
587
|
|
|
506
|
|
||
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of financial instruments
|
|
(4
|
)
|
|
(6
|
)
|
(11
|
)
|
|
(1
|
)
|
||||
Foreign currency translation adjustments
|
|
(59
|
)
|
|
175
|
|
(138
|
)
|
|
(147
|
)
|
||||
Post-retirement benefit obligation
|
|
51
|
|
|
21
|
|
(150
|
)
|
|
44
|
|
||||
Total other comprehensive (loss) income
|
|
(12
|
)
|
|
190
|
|
(299
|
)
|
|
(104
|
)
|
||||
Less: Other comprehensive loss attributable to noncontrolling interests
|
|
—
|
|
|
(1
|
)
|
—
|
|
|
(2
|
)
|
||||
Total other comprehensive (loss) income attributable to Aon shareholders
|
|
(12
|
)
|
|
191
|
|
(299
|
)
|
|
(102
|
)
|
||||
Comprehensive income attributable to Aon shareholders
|
|
$
|
260
|
|
|
$
|
369
|
|
$
|
288
|
|
|
$
|
404
|
|
(millions)
|
|
Shares
|
|
Ordinary
Shares and Additional Paid-in Capital |
|
Retained
Earnings |
|
Accumulated Other
Comprehensive Loss, Net of Tax |
|
Non-
controlling Interests |
|
Total
|
|||||||||||
Balance at December 31, 2015
|
|
269.8
|
|
|
$
|
5,412
|
|
|
$
|
4,117
|
|
|
$
|
(3,423
|
)
|
|
$
|
57
|
|
|
$
|
6,163
|
|
Net income
|
|
—
|
|
|
—
|
|
|
587
|
|
|
—
|
|
|
20
|
|
|
607
|
|
|||||
Shares issued - employee benefit plans
|
|
0.3
|
|
|
18
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Shares issued - employee compensation
|
|
3.4
|
|
|
(163
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(163
|
)
|
|||||
Shares purchased
|
|
(7.7
|
)
|
|
—
|
|
|
(750
|
)
|
|
—
|
|
|
—
|
|
|
(750
|
)
|
|||||
Tax benefit - employee benefit plans
|
|
—
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|||||
Share-based compensation expense
|
|
—
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|||||
Dividends to shareholders
|
|
—
|
|
|
—
|
|
|
(169
|
)
|
|
—
|
|
|
—
|
|
|
(169
|
)
|
|||||
Net change in fair value of financial instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Net foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
(138
|
)
|
|||||
Net post-retirement benefit obligation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
(150
|
)
|
|||||
Purchases of shares from noncontrolling interests
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(47
|
)
|
|||||
Dividends paid to noncontrolling interests on subsidiary common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||
Balance at June 30, 2016
|
|
265.8
|
|
|
$
|
5,437
|
|
|
$
|
3,784
|
|
|
$
|
(3,722
|
)
|
|
$
|
62
|
|
|
$
|
5,561
|
|
|
|
Six Months Ended
|
||||||
(millions)
|
|
June 30, 2016
|
|
June 30, 2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
||
Net income
|
|
$
|
607
|
|
|
$
|
529
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
||
Gain from sales of businesses and investments, net
|
|
(41
|
)
|
|
(20
|
)
|
||
Depreciation of fixed assets
|
|
114
|
|
|
113
|
|
||
Amortization of intangible assets
|
|
135
|
|
|
159
|
|
||
Share-based compensation expense
|
|
155
|
|
|
164
|
|
||
Deferred income taxes
|
|
15
|
|
|
16
|
|
||
Change in assets and liabilities:
|
|
|
|
|
|
|
||
Fiduciary receivables
|
|
96
|
|
|
(116
|
)
|
||
Short-term investments — funds held on behalf of clients
|
|
(449
|
)
|
|
52
|
|
||
Fiduciary liabilities
|
|
353
|
|
|
64
|
|
||
Receivables, net
|
|
175
|
|
|
59
|
|
||
Accounts payable and accrued liabilities
|
|
(389
|
)
|
|
(387
|
)
|
||
Current income taxes
|
|
(35
|
)
|
|
(152
|
)
|
||
Pension, other post-retirement and other post-employment liabilities
|
|
(28
|
)
|
|
(122
|
)
|
||
Other assets and liabilities
|
|
56
|
|
|
219
|
|
||
CASH PROVIDED BY OPERATING ACTIVITIES
|
|
764
|
|
|
578
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
||
Proceeds from investments
|
|
23
|
|
|
10
|
|
||
Purchases of investments
|
|
(29
|
)
|
|
(1
|
)
|
||
Net (purchases) sales of short-term investments — non-fiduciary
|
|
106
|
|
|
(97
|
)
|
||
Acquisition of businesses, net of cash acquired
|
|
(183
|
)
|
|
(23
|
)
|
||
Proceeds from sale of businesses
|
|
103
|
|
|
52
|
|
||
Capital expenditures
|
|
(104
|
)
|
|
(142
|
)
|
||
CASH USED FOR INVESTING ACTIVITIES
|
|
(84
|
)
|
|
(201
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
||
Share repurchase
|
|
(750
|
)
|
|
(550
|
)
|
||
Issuance of shares for employee benefit plans
|
|
(87
|
)
|
|
(161
|
)
|
||
Issuance of debt
|
|
2,056
|
|
|
2,445
|
|
||
Repayment of debt
|
|
(1,632
|
)
|
|
(1,896
|
)
|
||
Cash dividends to shareholders
|
|
(169
|
)
|
|
(156
|
)
|
||
Noncontrolling interests and other financing activities
|
|
(62
|
)
|
|
(23
|
)
|
||
CASH USED FOR FINANCING ACTIVITIES
|
|
(644
|
)
|
|
(341
|
)
|
||
|
|
|
|
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
|
18
|
|
|
(43
|
)
|
||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
54
|
|
|
(7
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
384
|
|
|
374
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
438
|
|
|
$
|
367
|
|
|
|
|
|
|
||||
Supplemental disclosures:
|
|
|
|
|
|
|
||
Interest paid
|
|
$
|
144
|
|
|
$
|
128
|
|
Income taxes paid, net of refunds
|
|
$
|
89
|
|
|
$
|
118
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Foreign currency remeasurement (loss) gain
|
$
|
1
|
|
|
$
|
(7
|
)
|
|
$
|
(16
|
)
|
|
$
|
17
|
|
Gain on disposal of business
|
6
|
|
|
1
|
|
|
41
|
|
|
20
|
|
||||
Equity earnings
|
1
|
|
|
4
|
|
|
3
|
|
|
6
|
|
||||
Income (loss) on financial instruments
|
(8
|
)
|
|
3
|
|
|
(10
|
)
|
|
—
|
|
||||
Total
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
18
|
|
|
$
|
43
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Balance at beginning of period
|
$
|
62
|
|
|
$
|
70
|
|
|
$
|
58
|
|
|
$
|
74
|
|
Provision charged to Other general expenses
|
6
|
|
|
3
|
|
|
12
|
|
|
11
|
|
||||
Accounts written off, net of recoveries
|
(4
|
)
|
|
(13
|
)
|
|
(7
|
)
|
|
(22
|
)
|
||||
Foreign currency translation
|
—
|
|
|
5
|
|
|
1
|
|
|
2
|
|
||||
Balance at end of period
|
$
|
64
|
|
|
$
|
65
|
|
|
$
|
64
|
|
|
$
|
65
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Taxes receivable
|
$
|
146
|
|
|
$
|
94
|
|
Prepaid expenses
|
152
|
|
|
130
|
|
||
Deferred project costs
|
94
|
|
|
92
|
|
||
Other
|
3
|
|
|
13
|
|
||
Total
|
$
|
395
|
|
|
$
|
329
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Deferred project costs
|
$
|
200
|
|
|
$
|
210
|
|
Investments
|
127
|
|
|
135
|
|
||
Taxes receivable
|
81
|
|
|
82
|
|
||
Other
|
168
|
|
|
165
|
|
||
Total
|
$
|
576
|
|
|
$
|
592
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Deferred revenue
|
$
|
433
|
|
|
$
|
394
|
|
Taxes payable
|
67
|
|
|
94
|
|
||
Other
|
372
|
|
|
331
|
|
||
Total
|
$
|
872
|
|
|
$
|
819
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Taxes payable
|
$
|
260
|
|
|
$
|
223
|
|
Deferred revenue
|
151
|
|
|
159
|
|
||
Leases
|
172
|
|
|
166
|
|
||
Compensation and benefits
|
59
|
|
|
59
|
|
||
Other
|
125
|
|
|
162
|
|
||
Total
|
$
|
767
|
|
|
$
|
769
|
|
|
Three months ended June 30,
|
Six Months Ended June 30,
|
|||||
|
2016
|
|
2015
|
2016
|
|
2015
|
|
Risk Solutions
|
2
|
|
|
1
|
2
|
|
2
|
HR Solutions
|
—
|
|
|
1
|
2
|
|
2
|
Total
|
2
|
|
|
2
|
4
|
|
4
|
|
|
Six months ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Consideration
|
|
$
|
190
|
|
|
$
|
23
|
|
Intangible assets:
|
|
|
|
|
|
|
||
Goodwill
|
|
$
|
110
|
|
|
$
|
16
|
|
Other intangible assets
|
|
82
|
|
|
1
|
|
||
Total
|
|
$
|
192
|
|
|
$
|
17
|
|
|
Three months ended June 30,
|
Six Months Ended June 30,
|
||||||||
|
2016
|
|
2015
|
2016
|
|
2015
|
||||
Risk Solutions
|
2
|
|
|
—
|
|
3
|
|
|
1
|
|
HR Solutions
|
—
|
|
|
—
|
|
1
|
|
|
1
|
|
Total
|
2
|
|
|
—
|
|
4
|
|
|
2
|
|
|
Risk
Solutions
|
|
HR
Solutions
|
|
Total
|
||||||
Balance as of January 1, 2016
|
$
|
5,593
|
|
|
$
|
2,855
|
|
|
$
|
8,448
|
|
Goodwill related to current year acquisitions
|
106
|
|
|
4
|
|
|
110
|
|
|||
Goodwill related to disposals
|
(7
|
)
|
|
(26
|
)
|
|
(33
|
)
|
|||
Goodwill related to prior year acquisitions
|
2
|
|
|
—
|
|
|
2
|
|
|||
Foreign currency translation
|
(40
|
)
|
|
(14
|
)
|
|
(54
|
)
|
|||
Balance as of June 30, 2016
|
$
|
5,654
|
|
|
$
|
2,819
|
|
|
$
|
8,473
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
||||||||||||
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tradenames
|
$
|
1,019
|
|
|
$
|
—
|
|
|
$
|
1,019
|
|
|
$
|
1,019
|
|
|
$
|
—
|
|
|
$
|
1,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer related and contract based
|
2,923
|
|
|
1,899
|
|
|
1,024
|
|
|
2,886
|
|
|
1,809
|
|
|
1,077
|
|
||||||
Technology and other
|
542
|
|
|
478
|
|
|
64
|
|
|
541
|
|
|
457
|
|
|
84
|
|
||||||
Total
|
$
|
4,484
|
|
|
$
|
2,377
|
|
|
$
|
2,107
|
|
|
$
|
4,446
|
|
|
$
|
2,266
|
|
|
$
|
2,180
|
|
|
Risk Solutions
|
|
HR Solutions
|
|
Total
|
||||||
Remainder of 2016
|
$
|
44
|
|
|
$
|
103
|
|
|
$
|
147
|
|
2017
|
81
|
|
|
147
|
|
|
228
|
|
|||
2018
|
73
|
|
|
99
|
|
|
172
|
|
|||
2019
|
66
|
|
|
79
|
|
|
145
|
|
|||
2020
|
58
|
|
|
65
|
|
|
123
|
|
|||
Thereafter
|
157
|
|
|
116
|
|
|
273
|
|
|||
Total
|
$
|
479
|
|
|
$
|
609
|
|
|
$
|
1,088
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Shares for basic earnings per share
|
268.0
|
|
|
284.5
|
|
|
269.9
|
|
|
284.3
|
|
Common stock equivalents
|
1.8
|
|
|
2.2
|
|
|
1.8
|
|
|
2.6
|
|
Shares for diluted earnings per share
|
269.8
|
|
|
286.7
|
|
|
271.7
|
|
|
286.9
|
|
|
Change in Fair Value of Financial Instruments (1)
|
|
Foreign Currency Translation Adjustments
|
|
Post-Retirement Benefit Obligation (2)
|
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
(25
|
)
|
|
$
|
(771
|
)
|
|
$
|
(2,627
|
)
|
|
$
|
(3,423
|
)
|
Other comprehensive (loss) income before reclassifications, net
|
(14
|
)
|
|
(138
|
)
|
|
(234
|
)
|
|
(386
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
4
|
|
|
—
|
|
|
110
|
|
|
114
|
|
||||
Tax benefit
|
(1
|
)
|
|
—
|
|
|
(26
|
)
|
|
(27
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss, net
|
3
|
|
|
—
|
|
|
84
|
|
|
87
|
|
||||
Net current period other comprehensive (loss) income
|
(11
|
)
|
|
(138
|
)
|
|
(150
|
)
|
|
(299
|
)
|
||||
Balance at June 30, 2016
|
$
|
(36
|
)
|
|
$
|
(909
|
)
|
|
$
|
(2,777
|
)
|
|
$
|
(3,722
|
)
|
|
Three months ended June 30,
|
||||||||||||||||||||||
|
U.K.
|
|
U.S.
|
|
Other
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
43
|
|
|
50
|
|
|
28
|
|
|
33
|
|
|
7
|
|
|
9
|
|
||||||
Expected return on plan assets, net of administration expenses
|
(65
|
)
|
|
(77
|
)
|
|
(39
|
)
|
|
(38
|
)
|
|
(12
|
)
|
|
(13
|
)
|
||||||
Amortization of prior-service cost
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net actuarial loss
|
9
|
|
|
10
|
|
|
12
|
|
|
13
|
|
|
3
|
|
|
3
|
|
||||||
Net periodic (benefit) cost
|
(12
|
)
|
|
(17
|
)
|
|
2
|
|
|
9
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Loss on pension settlement
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment gain and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net periodic cost (benefit)
|
$
|
49
|
|
|
$
|
(17
|
)
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six months ended June 30,
|
||||||||||||||||||||||
|
U.K.
|
|
U.S.
|
|
Other
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
86
|
|
|
99
|
|
|
55
|
|
|
66
|
|
|
14
|
|
|
17
|
|
||||||
Expected return on plan assets, net of administration expenses
|
(129
|
)
|
|
(152
|
)
|
|
(78
|
)
|
|
(77
|
)
|
|
(24
|
)
|
|
(25
|
)
|
||||||
Amortization of prior-service cost
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net actuarial loss
|
17
|
|
|
20
|
|
|
25
|
|
|
27
|
|
|
5
|
|
|
6
|
|
||||||
Net periodic (benefit) cost
|
(25
|
)
|
|
(33
|
)
|
|
3
|
|
|
18
|
|
|
(5
|
)
|
|
(2
|
)
|
||||||
Loss on pension settlement
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment gain and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||
Total net periodic cost (benefit)
|
$
|
36
|
|
|
$
|
(33
|
)
|
|
$
|
3
|
|
|
$
|
17
|
|
|
$
|
(5
|
)
|
|
$
|
(2
|
)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Restricted share units ("RSUs")
|
$
|
44
|
|
|
$
|
44
|
|
|
$
|
105
|
|
|
$
|
109
|
|
Performance share awards ("PSAs")
|
25
|
|
|
28
|
|
|
45
|
|
|
49
|
|
||||
Share options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Employee share purchase plans
|
2
|
|
|
2
|
|
|
6
|
|
|
6
|
|
||||
Total share-based compensation expense
|
$
|
71
|
|
|
$
|
74
|
|
|
$
|
156
|
|
|
$
|
164
|
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Shares
|
|
Fair Value (1)
|
|
Shares
|
|
Fair Value (1)
|
||||||
Non-vested at beginning of period
|
7,169
|
|
|
$
|
77
|
|
|
8,381
|
|
|
$
|
63
|
|
Granted
|
2,023
|
|
|
101
|
|
|
2,144
|
|
|
98
|
|
||
Vested
|
(2,581
|
)
|
|
70
|
|
|
(3,037
|
)
|
|
58
|
|
||
Forfeited
|
(213
|
)
|
|
79
|
|
|
(130
|
)
|
|
67
|
|
||
Non-vested at end of period
|
6,398
|
|
|
87
|
|
|
7,358
|
|
|
76
|
|
(1)
|
Represents per share weighted-average fair value of award at date of grant.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Target PSAs granted during period
|
783
|
|
|
993
|
|
|
816
|
|
|||
Weighted average fair value per share at date of grant
|
$
|
101
|
|
|
$
|
96
|
|
|
$
|
81
|
|
Number of shares that would be issued based on current performance levels
|
772
|
|
|
963
|
|
|
1,552
|
|
|||
Unamortized expense, based on current performance levels
|
$
|
71
|
|
|
$
|
49
|
|
|
$
|
21
|
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Shares
|
|
Weighted- Average
Exercise Price
|
|
Shares
|
|
Weighted- Average
Exercise Price
|
||||||
Beginning outstanding
|
837
|
|
|
$
|
40
|
|
|
2,300
|
|
|
$
|
32
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(271
|
)
|
|
38
|
|
|
(1,388
|
)
|
|
27
|
|
||
Forfeited and expired
|
(5
|
)
|
|
42
|
|
|
(13
|
)
|
|
39
|
|
||
Outstanding at end of period
|
561
|
|
|
41
|
|
|
899
|
|
|
39
|
|
||
Exercisable at end of period
|
561
|
|
|
41
|
|
|
899
|
|
|
39
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Aggregate intrinsic value of stock options exercised
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
17
|
|
|
$
|
100
|
|
Cash received from the exercise of stock options
|
6
|
|
|
4
|
|
|
11
|
|
|
38
|
|
||||
Tax benefit realized from the exercise of stock options
|
2
|
|
|
1
|
|
|
4
|
|
|
35
|
|
|
Notional Amount
|
|
Derivative Assets (1)
|
|
Derivative Liabilities (2)
|
||||||||||||||||||
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||||
Foreign exchange contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounted for as hedges
|
$
|
808
|
|
|
$
|
778
|
|
|
$
|
16
|
|
|
$
|
32
|
|
|
$
|
12
|
|
|
$
|
18
|
|
Not accounted for as hedges (3)
|
201
|
|
|
280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
1,009
|
|
|
$
|
1,058
|
|
|
$
|
16
|
|
|
$
|
32
|
|
|
$
|
12
|
|
|
$
|
18
|
|
(1)
|
Included within Other current assets (
$5 million
at
June 30, 2016
and
$15 million
at
December 31, 2015
) or Other non-current assets (
$11 million
at
June 30, 2016
and
$17 million
at
December 31, 2015
).
|
(2)
|
Included within Other current liabilities (
$8 million
at
June 30, 2016
and
$13 million
at
December 31, 2015
) or Other non-current liabilities (
$4 million
at
June 30, 2016
and
$5 million
at
December 31, 2015
).
|
(3)
|
These contracts typically are for
30
day durations are executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date.
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Statement of Financial Position
|
|
Net Amounts of Assets Presented in the Statement of Financial Position (1)
|
||||||||||||||||||
Derivatives accounted for as hedges:
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||||
Foreign exchange contracts
|
$
|
16
|
|
|
$
|
32
|
|
|
$
|
(5
|
)
|
|
$
|
(13
|
)
|
|
$
|
11
|
|
|
$
|
19
|
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Statement of Financial Position
|
|
Net Amounts of Liabilities Presented in the Statement of Financial Position (1)
|
||||||||||||||||||
Derivatives accounted for as hedges:
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||||
Foreign exchange contracts
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
(5
|
)
|
|
$
|
(13
|
)
|
|
$
|
7
|
|
|
$
|
5
|
|
Cash Flow Hedge - Foreign Exchange Contracts
|
|
Location of future reclassification from Accumulated Other Comprehensive Loss
|
|
Gain (Loss) Recognized in Accumulated Other Comprehensive Loss:
|
||||||||||||||||
Three months ended June 30,
|
|
Compensation and Benefits
|
|
Other General Expenses
|
|
Interest Expense
|
|
Other Income (Expense)
|
|
Total
|
||||||||||
2016
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
2015
|
|
1
|
|
|
3
|
|
|
—
|
|
|
10
|
|
|
14
|
|
Cash Flow Hedge - Foreign Exchange Contracts
|
|
Location of future reclassification from Accumulated Other Comprehensive Loss
|
|
Gain (Loss) Recognized in Accumulated Other Comprehensive Loss:
|
||||||||||||||||
Six months ended June 30,
|
|
Compensation and Benefits
|
|
Other General Expenses
|
|
Interest Expense
|
|
Other Income (Expense)
|
|
Total
|
||||||||||
2016
|
|
$
|
(2
|
)
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
(18
|
)
|
2015
|
|
6
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
13
|
|
Cash Flow Hedge - Foreign Exchange Contracts
|
|
Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion):
|
||||||||||||||||||
Three months ended June 30,
|
|
Compensation and Benefits
|
|
Other General Expenses
|
|
Interest Expense
|
|
Other Income
|
|
Total
|
||||||||||
2016
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
2015
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
|
5
|
|
|
3
|
|
Cash Flow Hedge - Foreign Exchange Contracts
|
|
Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion):
|
||||||||||||||||||
Six months ended June 30,
|
|
Compensation and Benefits
|
|
Other General Expenses
|
|
Interest Expense
|
|
Other Income
|
|
Total
|
||||||||||
2016
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
2015
|
|
1
|
|
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(7
|
)
|
•
|
Level 1 — observable inputs such as quoted prices for identical assets in active markets;
|
•
|
Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and
|
•
|
Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions.
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
Balance at June 30, 2016
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds (1)
|
$
|
1,483
|
|
|
$
|
1,483
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Government bonds
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Equity investments
|
10
|
|
|
6
|
|
|
4
|
|
|
—
|
|
||||
Derivatives (2):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
Balance at December 31, 2015
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds (1)
|
$
|
1,396
|
|
|
$
|
1,396
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Government bonds
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Equity investments
|
10
|
|
|
6
|
|
|
4
|
|
|
—
|
|
||||
Derivatives (2):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
32
|
|
|
—
|
|
|
32
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Long-term debt
|
$
|
5,907
|
|
|
$
|
6,448
|
|
|
$
|
5,138
|
|
|
$
|
5,386
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Risk Solutions
|
$
|
1,847
|
|
|
$
|
1,833
|
|
|
$
|
3,719
|
|
|
$
|
3,728
|
|
HR Solutions
|
931
|
|
|
979
|
|
|
1,861
|
|
|
1,949
|
|
||||
Intersegment eliminations
|
(12
|
)
|
|
(7
|
)
|
|
(22
|
)
|
|
(25
|
)
|
||||
Total revenue
|
$
|
2,766
|
|
|
$
|
2,805
|
|
|
$
|
5,558
|
|
|
$
|
5,652
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Retail brokerage
|
$
|
1,508
|
|
|
$
|
1,498
|
|
|
$
|
3,003
|
|
|
$
|
3,011
|
|
Reinsurance brokerage
|
334
|
|
|
330
|
|
|
706
|
|
|
707
|
|
||||
Total Risk Solutions Segment
|
1,842
|
|
|
1,828
|
|
|
3,709
|
|
|
3,718
|
|
||||
Consulting services
|
383
|
|
|
391
|
|
|
757
|
|
|
762
|
|
||||
Outsourcing
|
550
|
|
|
599
|
|
|
1,110
|
|
|
1,203
|
|
||||
Intrasegment
|
(2
|
)
|
|
(11
|
)
|
|
(6
|
)
|
|
(16
|
)
|
||||
Total HR Solutions Segment
|
931
|
|
|
979
|
|
|
1,861
|
|
|
1,949
|
|
||||
Intersegment
|
(12
|
)
|
|
(7
|
)
|
|
(22
|
)
|
|
(25
|
)
|
||||
Total commissions, fees and other revenue
|
$
|
2,761
|
|
|
$
|
2,800
|
|
|
$
|
5,548
|
|
|
$
|
5,642
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Risk Solutions
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
10
|
|
HR Solutions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fiduciary investment income
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Risk Solutions
|
$
|
373
|
|
|
$
|
279
|
|
|
$
|
802
|
|
|
$
|
691
|
|
HR Solutions
|
75
|
|
|
39
|
|
|
142
|
|
|
115
|
|
||||
Segment income before income taxes
|
448
|
|
|
318
|
|
|
944
|
|
|
806
|
|
||||
Unallocated expenses
|
(43
|
)
|
|
(41
|
)
|
|
(89
|
)
|
|
(88
|
)
|
||||
Interest income
|
3
|
|
|
4
|
|
|
5
|
|
|
7
|
|
||||
Interest expense
|
(73
|
)
|
|
(68
|
)
|
|
(142
|
)
|
|
(133
|
)
|
||||
Other income
|
—
|
|
|
1
|
|
|
18
|
|
|
43
|
|
||||
Income before income taxes
|
$
|
335
|
|
|
$
|
214
|
|
|
$
|
736
|
|
|
$
|
635
|
|
|
|
Three months ended June 30, 2016
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions, fees and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,761
|
|
|
$
|
—
|
|
|
$
|
2,761
|
|
Fiduciary investment income
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total revenue
|
|
—
|
|
|
—
|
|
|
2,766
|
|
|
—
|
|
|
2,766
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
8
|
|
|
3
|
|
|
1,677
|
|
|
—
|
|
|
1,688
|
|
|||||
Other general expenses
|
|
(1
|
)
|
|
2
|
|
|
672
|
|
|
—
|
|
|
673
|
|
|||||
Total operating expenses
|
|
7
|
|
|
5
|
|
|
2,349
|
|
|
—
|
|
|
2,361
|
|
|||||
Operating (loss) income
|
|
(7
|
)
|
|
(5
|
)
|
|
417
|
|
|
—
|
|
|
405
|
|
|||||
Interest income
|
|
—
|
|
|
4
|
|
|
5
|
|
|
(6
|
)
|
|
3
|
|
|||||
Interest expense
|
|
(49
|
)
|
|
(26
|
)
|
|
(4
|
)
|
|
6
|
|
|
(73
|
)
|
|||||
Intercompany interest income (expense)
|
|
3
|
|
|
(137
|
)
|
|
134
|
|
|
—
|
|
|
—
|
|
|||||
Intercompany other (expense) income
|
|
(57
|
)
|
|
(16
|
)
|
|
73
|
|
|
—
|
|
|
—
|
|
|||||
Other income (loss)
|
|
2
|
|
|
(4
|
)
|
|
6
|
|
|
(4
|
)
|
|
—
|
|
|||||
(Loss) income before taxes
|
|
(108
|
)
|
|
(184
|
)
|
|
631
|
|
|
(4
|
)
|
|
335
|
|
|||||
Income tax (benefit) expense
|
|
(21
|
)
|
|
(64
|
)
|
|
140
|
|
|
—
|
|
|
55
|
|
|||||
(Loss) income before equity in earnings of subsidiaries
|
|
(87
|
)
|
|
(120
|
)
|
|
491
|
|
|
(4
|
)
|
|
280
|
|
|||||
Equity in earnings of subsidiaries, net of tax
|
|
363
|
|
|
236
|
|
|
116
|
|
|
(715
|
)
|
|
—
|
|
|||||
Net income
|
|
276
|
|
|
116
|
|
|
607
|
|
|
(719
|
)
|
|
280
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
276
|
|
|
$
|
116
|
|
|
$
|
599
|
|
|
$
|
(719
|
)
|
|
$
|
272
|
|
|
|
Three months ended June 30, 2015
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions, fees and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,800
|
|
|
$
|
—
|
|
|
$
|
2,800
|
|
Fiduciary investment income
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total revenue
|
|
—
|
|
|
—
|
|
|
2,805
|
|
|
—
|
|
|
2,805
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
5
|
|
|
10
|
|
|
1,638
|
|
|
—
|
|
|
1,653
|
|
|||||
Other general expenses
|
|
(4
|
)
|
|
2
|
|
|
877
|
|
|
—
|
|
|
875
|
|
|||||
Total operating expenses
|
|
1
|
|
|
12
|
|
|
2,515
|
|
|
—
|
|
|
2,528
|
|
|||||
Operating (loss) income
|
|
(1
|
)
|
|
(12
|
)
|
|
290
|
|
|
—
|
|
|
277
|
|
|||||
Interest income
|
|
(5
|
)
|
|
4
|
|
|
5
|
|
|
—
|
|
|
4
|
|
|||||
Interest expense
|
|
(29
|
)
|
|
(33
|
)
|
|
(6
|
)
|
|
—
|
|
|
(68
|
)
|
|||||
Intercompany interest income (expense)
|
|
119
|
|
|
(116
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||||
Intercompany other (expense) income
|
|
(56
|
)
|
|
(15
|
)
|
|
71
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|||||
Income (loss) before taxes
|
|
27
|
|
|
(172
|
)
|
|
359
|
|
|
—
|
|
|
214
|
|
|||||
Income tax expense (benefit)
|
|
6
|
|
|
(66
|
)
|
|
86
|
|
|
—
|
|
|
26
|
|
|||||
Income (loss) before equity in earnings of subsidiaries
|
|
21
|
|
|
(106
|
)
|
|
273
|
|
|
—
|
|
|
188
|
|
|||||
Equity in earnings of subsidiaries, net of tax
|
|
157
|
|
|
170
|
|
|
64
|
|
|
(391
|
)
|
|
—
|
|
|||||
Net income
|
|
178
|
|
|
64
|
|
|
337
|
|
|
(391
|
)
|
|
188
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
178
|
|
|
$
|
64
|
|
|
$
|
327
|
|
|
$
|
(391
|
)
|
|
$
|
178
|
|
|
|
Six months ended June 30, 2016
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions, fees and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,548
|
|
|
$
|
—
|
|
|
$
|
5,548
|
|
Fiduciary investment income
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Total revenue
|
|
—
|
|
|
—
|
|
|
5,558
|
|
|
—
|
|
|
5,558
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
51
|
|
|
6
|
|
|
3,280
|
|
|
—
|
|
|
3,337
|
|
|||||
Other general expenses
|
|
6
|
|
|
4
|
|
|
1,356
|
|
|
—
|
|
|
1,366
|
|
|||||
Total operating expenses
|
|
57
|
|
|
10
|
|
|
4,636
|
|
|
—
|
|
|
4,703
|
|
|||||
Operating (loss) income
|
|
(57
|
)
|
|
(10
|
)
|
|
922
|
|
|
—
|
|
|
855
|
|
|||||
Interest income
|
|
—
|
|
|
9
|
|
|
9
|
|
|
(13
|
)
|
|
5
|
|
|||||
Interest expense
|
|
(94
|
)
|
|
(54
|
)
|
|
(7
|
)
|
|
13
|
|
|
(142
|
)
|
|||||
Intercompany interest income (expense)
|
|
7
|
|
|
(270
|
)
|
|
263
|
|
|
—
|
|
|
—
|
|
|||||
Intercompany other (expense) income
|
|
(111
|
)
|
|
(15
|
)
|
|
126
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
|
2
|
|
|
(9
|
)
|
|
29
|
|
|
(4
|
)
|
|
18
|
|
|||||
(Loss) income before taxes
|
|
(253
|
)
|
|
(349
|
)
|
|
1,342
|
|
|
(4
|
)
|
|
736
|
|
|||||
Income tax (benefit) expense
|
|
(47
|
)
|
|
(126
|
)
|
|
302
|
|
|
—
|
|
|
129
|
|
|||||
(Loss) income before equity in earnings of subsidiaries
|
|
(206
|
)
|
|
(223
|
)
|
|
1,040
|
|
|
(4
|
)
|
|
607
|
|
|||||
Equity in earnings of subsidiaries, net of tax
|
|
797
|
|
|
603
|
|
|
380
|
|
|
(1,780
|
)
|
|
—
|
|
|||||
Net income
|
|
591
|
|
|
380
|
|
|
1,420
|
|
|
(1,784
|
)
|
|
607
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
591
|
|
|
$
|
380
|
|
|
$
|
1,400
|
|
|
$
|
(1,784
|
)
|
|
$
|
587
|
|
|
|
Six months ended June 30, 2015
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions, fees and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,642
|
|
|
$
|
—
|
|
|
$
|
5,642
|
|
Fiduciary investment income
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Total revenue
|
|
—
|
|
|
—
|
|
|
5,652
|
|
|
—
|
|
|
5,652
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
|
57
|
|
|
21
|
|
|
3,258
|
|
|
—
|
|
|
3,336
|
|
|||||
Other general expenses
|
|
9
|
|
|
4
|
|
|
1,585
|
|
|
—
|
|
|
1,598
|
|
|||||
Total operating expenses
|
|
66
|
|
|
25
|
|
|
4,843
|
|
|
—
|
|
|
4,934
|
|
|||||
Operating (loss) income
|
|
(66
|
)
|
|
(25
|
)
|
|
809
|
|
|
—
|
|
|
718
|
|
|||||
Interest income
|
|
(9
|
)
|
|
7
|
|
|
9
|
|
|
—
|
|
|
7
|
|
|||||
Interest expense
|
|
(54
|
)
|
|
(68
|
)
|
|
(11
|
)
|
|
—
|
|
|
(133
|
)
|
|||||
Intercompany interest income (expense)
|
|
239
|
|
|
(221
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|||||
Intercompany other (expense) income
|
|
(106
|
)
|
|
(23
|
)
|
|
129
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
|
1
|
|
|
8
|
|
|
34
|
|
|
—
|
|
|
43
|
|
|||||
Income (loss) before taxes
|
|
5
|
|
|
(322
|
)
|
|
952
|
|
|
—
|
|
|
635
|
|
|||||
Income tax expense (benefit)
|
|
1
|
|
|
(117
|
)
|
|
222
|
|
|
—
|
|
|
106
|
|
|||||
Income (loss) before equity in earnings of subsidiaries
|
|
4
|
|
|
(205
|
)
|
|
730
|
|
|
—
|
|
|
529
|
|
|||||
Equity in earnings of subsidiaries, net of tax
|
|
502
|
|
|
571
|
|
|
366
|
|
|
(1,439
|
)
|
|
—
|
|
|||||
Net income
|
|
506
|
|
|
366
|
|
|
1,096
|
|
|
(1,439
|
)
|
|
529
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
506
|
|
|
$
|
366
|
|
|
$
|
1,073
|
|
|
$
|
(1,439
|
)
|
|
$
|
506
|
|
|
|
Three months ended June 30, 2016
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Net income
|
|
$
|
276
|
|
|
$
|
116
|
|
|
$
|
607
|
|
|
$
|
(719
|
)
|
|
$
|
280
|
|
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
276
|
|
|
$
|
116
|
|
|
$
|
599
|
|
|
$
|
(719
|
)
|
|
$
|
272
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in fair value of financial instruments
|
|
—
|
|
|
2
|
|
|
(6
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Foreign currency translation adjustments
|
|
(2
|
)
|
|
10
|
|
|
(71
|
)
|
|
4
|
|
|
(59
|
)
|
|||||
Post-retirement benefit obligation
|
|
—
|
|
|
3
|
|
|
48
|
|
|
—
|
|
|
51
|
|
|||||
Total other comprehensive loss
|
|
(2
|
)
|
|
15
|
|
|
(29
|
)
|
|
4
|
|
|
(12
|
)
|
|||||
Equity in other comprehensive loss of subsidiaries, net of tax
|
|
(14
|
)
|
|
(31
|
)
|
|
(16
|
)
|
|
61
|
|
|
—
|
|
|||||
Less: Other comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total other comprehensive loss attributable to Aon shareholders
|
|
(16
|
)
|
|
(16
|
)
|
|
(45
|
)
|
|
65
|
|
|
(12
|
)
|
|||||
Comprehensive income attributable to Aon shareholders
|
|
$
|
260
|
|
|
$
|
100
|
|
|
$
|
554
|
|
|
$
|
(654
|
)
|
|
$
|
260
|
|
|
|
Three months ended June 30, 2015
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Net income
|
|
$
|
178
|
|
|
$
|
64
|
|
|
$
|
337
|
|
|
$
|
(391
|
)
|
|
$
|
188
|
|
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
178
|
|
|
$
|
64
|
|
|
$
|
327
|
|
|
$
|
(391
|
)
|
|
$
|
178
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in fair value of financial instruments
|
|
—
|
|
|
2
|
|
|
(8
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Foreign currency translation adjustments
|
|
—
|
|
|
4
|
|
|
171
|
|
|
—
|
|
|
175
|
|
|||||
Post-retirement benefit obligation
|
|
—
|
|
|
9
|
|
|
12
|
|
|
—
|
|
|
21
|
|
|||||
Total other comprehensive (loss) income
|
|
—
|
|
|
15
|
|
|
175
|
|
|
—
|
|
|
190
|
|
|||||
Equity in other comprehensive income of subsidiaries, net of tax
|
|
191
|
|
|
173
|
|
|
188
|
|
|
(552
|
)
|
|
—
|
|
|||||
Less: Other comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Total other comprehensive income attributable to Aon shareholders
|
|
191
|
|
|
188
|
|
|
364
|
|
|
(552
|
)
|
|
191
|
|
|||||
Comprehensive income attributable to Aon Shareholders
|
|
$
|
369
|
|
|
$
|
252
|
|
|
$
|
691
|
|
|
$
|
(943
|
)
|
|
$
|
369
|
|
|
|
Six months ended June 30, 2016
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Net income
|
|
$
|
591
|
|
|
$
|
380
|
|
|
$
|
1,420
|
|
|
$
|
(1,784
|
)
|
|
$
|
607
|
|
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
591
|
|
|
$
|
380
|
|
|
$
|
1,400
|
|
|
$
|
(1,784
|
)
|
|
$
|
587
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in fair value of financial instruments
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Foreign currency translation adjustments
|
|
(2
|
)
|
|
21
|
|
|
(161
|
)
|
|
4
|
|
|
(138
|
)
|
|||||
Post-retirement benefit obligation
|
|
—
|
|
|
16
|
|
|
(166
|
)
|
|
—
|
|
|
(150
|
)
|
|||||
Total other comprehensive loss
|
|
(2
|
)
|
|
37
|
|
|
(338
|
)
|
|
4
|
|
|
(299
|
)
|
|||||
Equity in other comprehensive loss of subsidiaries, net of tax
|
|
(301
|
)
|
|
(345
|
)
|
|
(308
|
)
|
|
954
|
|
|
—
|
|
|||||
Less: Other comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total other comprehensive loss attributable to Aon shareholders
|
|
(303
|
)
|
|
(308
|
)
|
|
(646
|
)
|
|
958
|
|
|
(299
|
)
|
|||||
Comprehensive income attributable to Aon shareholders
|
|
$
|
288
|
|
|
$
|
72
|
|
|
$
|
754
|
|
|
$
|
(826
|
)
|
|
$
|
288
|
|
|
|
Six months ended June 30, 2015
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
Net income
|
|
$
|
506
|
|
|
$
|
366
|
|
|
$
|
1,096
|
|
|
$
|
(1,439
|
)
|
|
$
|
529
|
|
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||
Net income attributable to Aon shareholders
|
|
$
|
506
|
|
|
$
|
366
|
|
|
$
|
1,073
|
|
|
$
|
(1,439
|
)
|
|
$
|
506
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in fair value of financial instruments
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Foreign currency translation adjustments
|
|
—
|
|
|
(19
|
)
|
|
(128
|
)
|
|
—
|
|
|
(147
|
)
|
|||||
Post-retirement benefit obligation
|
|
—
|
|
|
17
|
|
|
27
|
|
|
—
|
|
|
44
|
|
|||||
Total other comprehensive (loss) income
|
|
—
|
|
|
(1
|
)
|
|
(103
|
)
|
|
—
|
|
|
(104
|
)
|
|||||
Equity in other comprehensive income of subsidiaries, net of tax
|
|
(102
|
)
|
|
(94
|
)
|
|
(95
|
)
|
|
291
|
|
|
—
|
|
|||||
Less: Other comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Total other comprehensive income attributable to Aon shareholders
|
|
(102
|
)
|
|
(95
|
)
|
|
(196
|
)
|
|
291
|
|
|
(102
|
)
|
|||||
Comprehensive income attributable to Aon Shareholders
|
|
$
|
404
|
|
|
$
|
271
|
|
|
$
|
877
|
|
|
$
|
(1,148
|
)
|
|
$
|
404
|
|
|
|
As of June 30, 2016
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
1,349
|
|
|
$
|
1,850
|
|
|
$
|
(2,761
|
)
|
|
$
|
438
|
|
Short-term investments
|
|
—
|
|
|
118
|
|
|
133
|
|
|
—
|
|
|
251
|
|
|||||
Receivables, net
|
|
—
|
|
|
1
|
|
|
2,515
|
|
|
—
|
|
|
2,516
|
|
|||||
Fiduciary assets
|
|
—
|
|
|
—
|
|
|
10,201
|
|
|
—
|
|
|
10,201
|
|
|||||
Intercompany receivables
|
|
55
|
|
|
4,847
|
|
|
9,436
|
|
|
(14,338
|
)
|
|
—
|
|
|||||
Other current assets
|
|
—
|
|
|
24
|
|
|
371
|
|
|
—
|
|
|
395
|
|
|||||
Total Current Assets
|
|
55
|
|
|
6,339
|
|
|
24,506
|
|
|
(17,099
|
)
|
|
13,801
|
|
|||||
Goodwill
|
|
—
|
|
|
—
|
|
|
8,473
|
|
|
—
|
|
|
8,473
|
|
|||||
Intangible assets, net
|
|
—
|
|
|
—
|
|
|
2,107
|
|
|
—
|
|
|
2,107
|
|
|||||
Fixed assets, net
|
|
—
|
|
|
—
|
|
|
751
|
|
|
—
|
|
|
751
|
|
|||||
Non-current deferred tax assets
|
|
154
|
|
|
746
|
|
|
176
|
|
|
(811
|
)
|
|
265
|
|
|||||
Intercompany receivables
|
|
378
|
|
|
262
|
|
|
8,711
|
|
|
(9,351
|
)
|
|
—
|
|
|||||
Prepaid pension
|
|
—
|
|
|
6
|
|
|
714
|
|
|
—
|
|
|
720
|
|
|||||
Other non-current assets
|
|
—
|
|
|
111
|
|
|
465
|
|
|
—
|
|
|
576
|
|
|||||
Investment in subsidiary
|
|
12,315
|
|
|
16,914
|
|
|
277
|
|
|
(29,506
|
)
|
|
—
|
|
|||||
TOTAL ASSETS
|
|
$
|
12,902
|
|
|
$
|
24,378
|
|
|
$
|
46,180
|
|
|
$
|
(56,767
|
)
|
|
$
|
26,693
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
|
$
|
2,803
|
|
|
$
|
45
|
|
|
$
|
1,286
|
|
|
$
|
(2,761
|
)
|
|
$
|
1,373
|
|
Short-term debt and current portion of long-term debt
|
|
241
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
251
|
|
|||||
Fiduciary liabilities
|
|
—
|
|
|
—
|
|
|
10,201
|
|
|
—
|
|
|
10,201
|
|
|||||
Intercompany payables
|
|
147
|
|
|
12,357
|
|
|
1,834
|
|
|
(14,338
|
)
|
|
—
|
|
|||||
Other current liabilities
|
|
1
|
|
|
60
|
|
|
811
|
|
|
—
|
|
|
872
|
|
|||||
Total Current Liabilities
|
|
3,192
|
|
|
12,462
|
|
|
14,142
|
|
|
(17,099
|
)
|
|
12,697
|
|
|||||
Long-term debt
|
|
4,205
|
|
|
1,413
|
|
|
289
|
|
|
—
|
|
|
5,907
|
|
|||||
Non-current deferred tax liabilities
|
|
—
|
|
|
—
|
|
|
850
|
|
|
(811
|
)
|
|
39
|
|
|||||
Pension, other post-retirement and other post-employment liabilities
|
|
—
|
|
|
1,284
|
|
|
438
|
|
|
—
|
|
|
1,722
|
|
|||||
Intercompany payables
|
|
—
|
|
|
8,878
|
|
|
473
|
|
|
(9,351
|
)
|
|
—
|
|
|||||
Other non-current liabilities
|
|
6
|
|
|
64
|
|
|
697
|
|
|
—
|
|
|
767
|
|
|||||
TOTAL LIABILITIES
|
|
7,403
|
|
|
24,101
|
|
|
16,889
|
|
|
(27,261
|
)
|
|
21,132
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL AON SHAREHOLDERS' EQUITY
|
|
5,499
|
|
|
277
|
|
|
29,229
|
|
|
(29,506
|
)
|
|
5,499
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
|||||
TOTAL EQUITY
|
|
5,499
|
|
|
277
|
|
|
29,291
|
|
|
(29,506
|
)
|
|
5,561
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
12,902
|
|
|
$
|
24,378
|
|
|
$
|
46,180
|
|
|
$
|
(56,767
|
)
|
|
$
|
26,693
|
|
|
|
As of December 31, 2015
|
||||||||||||||||||
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
Aon
|
|
Aon
|
|
Non-Guarantor
|
|
Consolidating
|
|
|
||||||||||
(millions)
|
|
plc
|
|
Corporation
|
|
Subsidiaries
|
|
Adjustments
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
2,083
|
|
|
$
|
1,242
|
|
|
$
|
(2,941
|
)
|
|
$
|
384
|
|
Short-term investments
|
|
—
|
|
|
209
|
|
|
147
|
|
|
—
|
|
|
356
|
|
|||||
Receivables, net
|
|
1
|
|
|
—
|
|
|
2,733
|
|
|
—
|
|
|
2,734
|
|
|||||
Fiduciary assets
|
|
—
|
|
|
—
|
|
|
9,932
|
|
|
—
|
|
|
9,932
|
|
|||||
Intercompany receivables
|
|
432
|
|
|
1,950
|
|
|
7,957
|
|
|
(10,339
|
)
|
|
—
|
|
|||||
Other current assets
|
|
—
|
|
|
19
|
|
|
310
|
|
|
—
|
|
|
329
|
|
|||||
Total Current Assets
|
|
433
|
|
|
4,261
|
|
|
22,321
|
|
|
(13,280
|
)
|
|
13,735
|
|
|||||
Goodwill
|
|
—
|
|
|
—
|
|
|
8,448
|
|
|
—
|
|
|
8,448
|
|
|||||
Intangible assets, net
|
|
—
|
|
|
—
|
|
|
2,180
|
|
|
—
|
|
|
2,180
|
|
|||||
Fixed assets, net
|
|
—
|
|
|
—
|
|
|
765
|
|
|
—
|
|
|
765
|
|
|||||
Intercompany receivables
|
|
375
|
|
|
526
|
|
|
8,633
|
|
|
(9,534
|
)
|
|
—
|
|
|||||
Non-current deferred tax assets
|
|
154
|
|
|
756
|
|
|
141
|
|
|
(817
|
)
|
|
234
|
|
|||||
Prepaid pension
|
|
—
|
|
|
6
|
|
|
1,027
|
|
|
—
|
|
|
1,033
|
|
|||||
Other non-current assets
|
|
—
|
|
|
119
|
|
|
557
|
|
|
(84
|
)
|
|
592
|
|
|||||
Investment in subsidiary
|
|
11,804
|
|
|
16,534
|
|
|
369
|
|
|
(28,707
|
)
|
|
—
|
|
|||||
TOTAL ASSETS
|
|
$
|
12,766
|
|
|
$
|
22,202
|
|
|
$
|
44,441
|
|
|
$
|
(52,422
|
)
|
|
$
|
26,987
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
|
$
|
2,988
|
|
|
$
|
45
|
|
|
$
|
1,680
|
|
|
$
|
(2,941
|
)
|
|
$
|
1,772
|
|
Short-term debt and current portion of long-term debt
|
|
—
|
|
|
550
|
|
|
12
|
|
|
—
|
|
|
562
|
|
|||||
Fiduciary liabilities
|
|
—
|
|
|
—
|
|
|
9,932
|
|
|
—
|
|
|
9,932
|
|
|||||
Intercompany payables
|
|
167
|
|
|
9,518
|
|
|
654
|
|
|
(10,339
|
)
|
|
—
|
|
|||||
Other current liabilities
|
|
47
|
|
|
56
|
|
|
716
|
|
|
—
|
|
|
819
|
|
|||||
Total Current Liabilities
|
|
3,202
|
|
|
10,169
|
|
|
12,994
|
|
|
(13,280
|
)
|
|
13,085
|
|
|||||
Long-term debt
|
|
3,451
|
|
|
1,412
|
|
|
275
|
|
|
—
|
|
|
5,138
|
|
|||||
Non-current deferred tax liabilities
|
|
—
|
|
|
—
|
|
|
855
|
|
|
(818
|
)
|
|
37
|
|
|||||
Pension, other post-retirement and other post-employment liabilities
|
|
—
|
|
|
1,313
|
|
|
482
|
|
|
—
|
|
|
1,795
|
|
|||||
Intercompany payables
|
|
—
|
|
|
8,799
|
|
|
735
|
|
|
(9,534
|
)
|
|
—
|
|
|||||
Other non-current liabilities
|
|
7
|
|
|
140
|
|
|
705
|
|
|
(83
|
)
|
|
769
|
|
|||||
TOTAL LIABILITIES
|
|
6,660
|
|
|
21,833
|
|
|
16,046
|
|
|
(23,715
|
)
|
|
20,824
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL AON SHAREHOLDERS' EQUITY
|
|
6,106
|
|
|
369
|
|
|
28,338
|
|
|
(28,707
|
)
|
|
6,106
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
|||||
TOTAL EQUITY
|
|
6,106
|
|
|
369
|
|
|
28,395
|
|
|
(28,707
|
)
|
|
6,163
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
12,766
|
|
|
$
|
22,202
|
|
|
$
|
44,441
|
|
|
$
|
(52,422
|
)
|
|
$
|
26,987
|
|
•
|
For the
second
quarter of
2016
, revenue
decreased
$39 million
, or
1%
, to
$2.8 billion
compared to the prior year period due primarily to a
2%
unfavorable impact from foreign currency exchange rates and a
2%
decrease in commissions and fees related to net divestitures, partially offset by organic revenue growth of
3%
. For the first
six
months ended
June 30, 2016
, revenue
decreased
2%
compared to the prior year period due primarily to a
3%
unfavorable impact from foreign currency exchange rates and a
2%
decrease in commissions and fees related to net divestitures, partially offset by organic revenue growth of
3%
. In Risk Solutions, organic revenue growth in the
second
quarter and first
six
months of
2016
was driven by strong organic growth in Retail brokerage across both the Americas and International businesses, as well as modest growth in Reinsurance compared to the prior year periods. The HR Solutions segment for the
second
quarter and first
six
months of
2016
had modest organic growth in Consulting compared to the prior year periods.
|
•
|
Operating expenses for the
second
quarter of
2016
were
$2.4 billion
,
a decrease
of
$167 million
, or
7%
, compared to the prior year period. The
decrease
was primarily due to a $176 million decrease in expense related to certain legacy litigation settlements in the prior year quarter, a $52 million decrease in expenses related to net divestitures, a $49 million favorable impact from foreign currency translation, and an $11 million decrease in intangible asset amortization, partially offset by a $62 million increase in expense related to certain pension settlements and an increase in expense to support
3%
organic revenue growth. Operating expenses for the first
six
months of
2016
decreased
by
$231 million
compared to the prior year period primarily due to a $176 million decrease in expense related to certain legacy litigation settlements in the prior year period, a $131 million favorable impact from foreign currency exchange rates, a $93 million decrease in expenses related to acquisitions, net of divestitures, and a $24 million decrease in intangible asset amortization, partially offset by a $62 million increase in expense related to certain pension settlements, $20 million of transaction and portfolio repositioning related costs in HR Solutions associated with the sale of certain businesses, and an increase in expense to support the
3%
organic growth.
|
•
|
Operating margin
increased
to
14.6%
in the
second
quarter
2016
from
9.9%
in the prior year period. Operating Margin for the first
six
months of
2016
was
15.4%
as compared to
12.7%
for the same period in
2015
. The
increase
in operating margin from the prior year period and first six months of 2016 was driven by organic revenue growth of
3%
, return on investments, and a favorable impact from changes in foreign currency exchange rates, partially offset by an increase in expense. Operating margin for Risk Solutions
increased
500 basis points from
15.2%
in the
second
quarter
2015
to
20.2%
in the
second
quarter
2016
and 310 basis points from
18.5%
for the first
six
months of
2015
to
21.6%
for the first
six
months of
2016
. Operating margin for HR Solutions
increased
410 basis points from
4.0%
in the
second
quarter
2015
to
8.1%
in the
second
quarter
2016
and 170 basis points from
5.9%
for the first
six
months of
2015
to
7.6%
for the first
six
months of
2016
.
|
•
|
Due to the factors set forth above, Net income attributable to Aon shareholders
increased
$94 million
, or
53%
, to
$272 million
for the
second
quarter
2016
compared to the
second
quarter
2015
. During the first
six
months of
2016
, Net income attributable to sharesholders
increased
$81 million
or
16%
, to
587 million
in compared to the first
six
months of
2015
.
|
•
|
Cash flow
provided by
operating activities was
$764 million
for the first
six
months of
2016
,
an increase
of
$186 million
from
$578 million
provided by
operating activities in the first
six
months of
2015
. The
increase
was driven by an increase in net income, a decrease in cash tax payments, a decline in cash paid for pension contributions, and underlying working capital improvements.
|
•
|
Organic revenue growth, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Organic Revenue," was
3%
for the
second
quarter and first
six
months of
2016
, an increase over 2% organic growth in the prior year
second
quarter and first
six
months of
2015
. In Risk Solutions, organic revenue growth was driven by strong growth in Retail brokerage across both the Americas and International businesses, as well as modest growth in Reinsurance organic revenue. HR Solutions had modest organic growth in Consulting.
|
•
|
Adjusted operating margin, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Adjusted Operating Margin," was
19.3%
for Aon overall,
24.9%
for the Risk Solutions segment, and
12.8%
for the HR Solutions segment for the
second
quarter
2016
. Adjusted operating margin was
19.0%
for Aon overall,
24.2%
for the Risk Solutions segment, and
13.2%
for the HR Solutions segment for the
second
quarter
2015
. For the first
six
months of
2016
, adjusted operating margin was
18.9%
for Aon overall,
24.5%
for the Risk Solutions segment, and
12.3%
for the HR Solutions operating segment. For the first
six
months of
2015
, adjusted operating margin was
18.6%
for Aon overall,
23.7%
for the Risk Solutions segment, and
13.2%
for the HR Solutions segment. The increase in adjusted operating margin for the Risk Solutions segment in the
second
quarter and first six months of 2016 as compared to the prior year period primarily reflected organic revenue growth of
3%
, a favorable impact from foreign currency exchange rates, and return on investments in data and analytics. In the HR Solutions segment in the
second
quarter of
2016
, the operating margin decline was primarily driven by an increase in expense to support future growth, partially offset by organic revenue growth of
1%
. For the first
six
months of
2016
, the decrease in adjusted operating margin as compared to the prior year period was primarily driven by $20 million of transaction and portfolio repositioning related costs associated with the sale of certain businesses and increase in expense to support future growth, partially offset by organic growth of
2%
.
|
•
|
Adjusted diluted earnings per share from net income attributable to Aon's shareholders, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Adjusted Diluted Earnings per Share," was
$1.39
per share in the
second
quarter and
$2.75
per share in the first
six
months of
2016
, compared to
$1.31
per share in the
second
quarter and
$2.67
per share in the first
six
months of
2015
.
|
•
|
Free cash flow, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Free Cash Flow,"
increased
$224 million
, or
51%
, to
$660 million
from the prior year period, driven by a
32%
increase in cash flow from operations and
a decrease
of
$38 million
in capital expenditures.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Commissions, fees and other
|
$
|
2,761
|
|
|
$
|
2,800
|
|
|
$
|
5,548
|
|
|
$
|
5,642
|
|
Fiduciary investment income
|
5
|
|
|
5
|
|
|
10
|
|
|
10
|
|
||||
Total revenue
|
2,766
|
|
|
2,805
|
|
|
5,558
|
|
|
5,652
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Compensation and benefits
|
1,688
|
|
|
1,653
|
|
|
3,337
|
|
|
3,336
|
|
||||
Other general expenses
|
673
|
|
|
875
|
|
|
1,366
|
|
|
1,598
|
|
||||
Total operating expenses
|
2,361
|
|
|
2,528
|
|
|
4,703
|
|
|
4,934
|
|
||||
Operating income
|
405
|
|
|
277
|
|
|
855
|
|
|
718
|
|
||||
Interest income
|
3
|
|
|
4
|
|
|
5
|
|
|
7
|
|
||||
Interest expense
|
(73
|
)
|
|
(68
|
)
|
|
(142
|
)
|
|
(133
|
)
|
||||
Other income
|
—
|
|
|
1
|
|
|
18
|
|
|
43
|
|
||||
Income before income taxes
|
335
|
|
|
214
|
|
|
736
|
|
|
635
|
|
||||
Income taxes
|
55
|
|
|
26
|
|
|
129
|
|
|
106
|
|
||||
Net income
|
280
|
|
|
188
|
|
|
607
|
|
|
529
|
|
||||
Less: Net income attributable to noncontrolling interests
|
8
|
|
|
10
|
|
|
20
|
|
|
23
|
|
||||
Net income attributable to Aon shareholders
|
$
|
272
|
|
|
$
|
178
|
|
|
$
|
587
|
|
|
$
|
506
|
|
|
Three months ended June 30, 2016
|
||||||||||
|
Total Aon (1)
|
|
Risk Solutions
|
|
HR Solutions
|
||||||
Revenue — U.S. GAAP
|
$
|
2,766
|
|
|
$
|
1,847
|
|
|
$
|
931
|
|
Operating income — U.S. GAAP
|
$
|
405
|
|
|
$
|
373
|
|
|
$
|
75
|
|
Intangible asset amortization
|
68
|
|
|
25
|
|
|
43
|
|
|||
Pension Settlement
|
62
|
|
|
61
|
|
|
1
|
|
|||
Operating income — as adjusted
|
$
|
535
|
|
|
$
|
459
|
|
|
$
|
119
|
|
Operating margins — U.S. GAAP
|
14.6
|
%
|
|
20.2
|
%
|
|
8.1
|
%
|
|||
Operating margins — as adjusted
|
19.3
|
%
|
|
24.9
|
%
|
|
12.8
|
%
|
|||
|
|
|
|
|
|
||||||
|
Six months ended June 30, 2016
|
||||||||||
|
Total Aon (1)
|
|
Risk Solutions
|
|
HR Solutions
|
||||||
Revenue — U.S. GAAP
|
$
|
5,558
|
|
|
$
|
3,719
|
|
|
$
|
1,861
|
|
Operating income — U.S. GAAP
|
$
|
855
|
|
|
$
|
802
|
|
|
$
|
142
|
|
Intangible asset amortization
|
135
|
|
|
49
|
|
|
86
|
|
|||
Pension Settlement
|
62
|
|
|
61
|
|
|
1
|
|
|||
Operating income — as adjusted
|
$
|
1,052
|
|
|
$
|
912
|
|
|
$
|
229
|
|
Operating margins — U.S. GAAP
|
15.4
|
%
|
|
21.6
|
%
|
|
7.6
|
%
|
|||
Operating margins — as adjusted
|
18.9
|
%
|
|
24.5
|
%
|
|
12.3
|
%
|
|
Three months ended June 30, 2016
|
||||||||||
|
U.S. GAAP
|
|
Adjustments
|
|
As Adjusted
|
||||||
Operating income
|
$
|
405
|
|
|
$
|
130
|
|
|
$
|
535
|
|
Interest income
|
3
|
|
|
—
|
|
|
3
|
|
|||
Interest expense
|
(73
|
)
|
|
—
|
|
|
(73
|
)
|
|||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income before income taxes
|
335
|
|
|
130
|
|
|
465
|
|
|||
Income taxes
|
55
|
|
|
26
|
|
|
81
|
|
|||
Net income
|
280
|
|
|
104
|
|
|
384
|
|
|||
Less: Net income attributable to noncontrolling interests
|
8
|
|
|
—
|
|
|
8
|
|
|||
Net income attributable to Aon shareholders
|
$
|
272
|
|
|
$
|
104
|
|
|
$
|
376
|
|
Diluted earnings per share
|
$
|
1.01
|
|
|
$
|
0.38
|
|
|
$
|
1.39
|
|
Weighted average ordinary shares outstanding — diluted
|
269.8
|
|
|
—
|
|
|
269.8
|
|
|||
|
|
|
|
|
|
||||||
|
Six months ended June 30, 2016
|
||||||||||
|
U.S. GAAP
|
|
Adjustments
|
|
As Adjusted
|
||||||
Operating income
|
$
|
855
|
|
|
$
|
197
|
|
|
$
|
1,052
|
|
Interest income
|
5
|
|
|
—
|
|
|
5
|
|
|||
Interest expense
|
(142
|
)
|
|
—
|
|
|
(142
|
)
|
|||
Other income
|
18
|
|
|
—
|
|
|
18
|
|
|||
Income before income taxes
|
736
|
|
|
197
|
|
|
933
|
|
|||
Income taxes
|
129
|
|
|
38
|
|
|
167
|
|
|||
Net income
|
607
|
|
|
159
|
|
|
766
|
|
|||
Less: Net income attributable to noncontrolling interests
|
20
|
|
|
—
|
|
|
20
|
|
|||
Net income attributable to Aon shareholders
|
$
|
587
|
|
|
$
|
159
|
|
|
$
|
746
|
|
Diluted earnings per share
|
$
|
2.16
|
|
|
$
|
0.59
|
|
|
$
|
2.75
|
|
Weighted average ordinary shares outstanding — diluted
|
271.7
|
|
|
—
|
|
|
271.7
|
|
|
Three months ended June 30, 2015
|
||||||||||
|
U.S. GAAP
|
|
Adjustments
|
|
As Adjusted
|
||||||
Operating income
|
$
|
277
|
|
|
$
|
255
|
|
|
$
|
532
|
|
Interest income
|
4
|
|
|
—
|
|
|
4
|
|
|||
Interest expense
|
(68
|
)
|
|
—
|
|
|
(68
|
)
|
|||
Other income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Income before income taxes
|
214
|
|
|
255
|
|
|
469
|
|
|||
Income taxes
|
26
|
|
|
58
|
|
|
84
|
|
|||
Net income
|
188
|
|
|
197
|
|
|
385
|
|
|||
Less: Net income attributable to noncontrolling interests
|
10
|
|
|
—
|
|
|
10
|
|
|||
Net income attributable to Aon shareholders
|
$
|
178
|
|
|
$
|
197
|
|
|
$
|
375
|
|
Diluted earnings per share
|
$
|
0.62
|
|
|
$
|
0.69
|
|
|
$
|
1.31
|
|
Weighted average ordinary shares outstanding — diluted
|
286.7
|
|
|
—
|
|
|
286.7
|
|
|||
|
|
|
|
|
|
||||||
|
Six months ended June 30, 2015
|
||||||||||
|
U.S. GAAP
|
|
Adjustments
|
|
As Adjusted
|
||||||
Operating income
|
$
|
718
|
|
|
$
|
335
|
|
|
$
|
1,053
|
|
Interest income
|
7
|
|
|
—
|
|
|
7
|
|
|||
Interest expense
|
(133
|
)
|
|
—
|
|
|
(133
|
)
|
|||
Other income
|
43
|
|
|
—
|
|
|
43
|
|
|||
Income before income taxes
|
635
|
|
|
335
|
|
|
970
|
|
|||
Income taxes
|
106
|
|
|
74
|
|
|
180
|
|
|||
Net income
|
529
|
|
|
261
|
|
|
790
|
|
|||
Less: Net income attributable to noncontrolling interests
|
23
|
|
|
—
|
|
|
23
|
|
|||
Net income attributable to Aon shareholders
|
$
|
506
|
|
|
$
|
261
|
|
|
$
|
767
|
|
Diluted earnings per share
|
$
|
1.76
|
|
|
$
|
0.91
|
|
|
$
|
2.67
|
|
Weighted average ordinary shares outstanding — diluted
|
286.9
|
|
|
—
|
|
|
286.9
|
|
|
Six months ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash provided by operating activities - U.S. GAAP
|
$
|
764
|
|
|
$
|
578
|
|
Less: Capital expenditures
|
(104
|
)
|
|
(142
|
)
|
||
Free cash flow
|
$
|
660
|
|
|
$
|
436
|
|
|
|
Statement of Financial Position Classification
|
|
|
||||||||||||
Asset Type
|
|
Cash and Cash
Equivalents
|
|
Short-term
Investments
|
|
Fiduciary
Assets
|
|
Total
|
||||||||
Certificates of deposit, bank deposits or time deposits
|
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
2,582
|
|
|
$
|
3,020
|
|
Money market funds
|
|
—
|
|
|
251
|
|
|
1,232
|
|
|
1,483
|
|
||||
Other investments due within one year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash and short-term investments
|
|
438
|
|
|
251
|
|
|
3,814
|
|
|
4,503
|
|
||||
Fiduciary receivables
|
|
—
|
|
|
—
|
|
|
6,387
|
|
|
6,387
|
|
||||
Total
|
|
$
|
438
|
|
|
$
|
251
|
|
|
$
|
10,201
|
|
|
$
|
10,890
|
|
|
For the twelve months ended June 30,
|
||||
|
2016
|
|
2015
|
||
Net income
|
1,500
|
|
|
1,311
|
|
Interest expense
|
282
|
|
|
265
|
|
Income taxes
|
290
|
|
|
295
|
|
Depreciation of fixed assets
|
230
|
|
|
233
|
|
Amortization of intangible assets
|
290
|
|
|
338
|
|
Total EBITDA
|
2,592
|
|
|
2,442
|
|
|
|
|
|
||
Total Debt
|
6,158
|
|
|
6,061
|
|
|
|
|
|
||
Total debt-to-EBITDA ratio
|
2.4
|
|
2.5
|
|
Ratings
|
|
|
||
|
Senior Long-term Debt
|
|
Commercial Paper
|
|
Outlook
|
Standard & Poor's
|
A-
|
|
A-2
|
|
Stable
|
Moody's Investor Services
|
Baa2
|
|
P-2
|
|
Stable
|
Fitch, Inc.
|
BBB+
|
|
F-2
|
|
Stable
|
•
|
negative
net foreign currency translation adjustments of
$138 million
, which are attributable to the
strengthening
of the U.S. dollar against certain foreign currencies,
|
•
|
an increase
of
$150 million
in net post-retirement benefit obligations, and
|
•
|
net financial instrument
losses
of
$11 million
.
|
•
|
Risk Solutions
acts as an advisor and insurance and reinsurance broker, helping clients manage their risks, via consultation, as well as negotiation and placement of insurance risk with insurance carriers through our global distribution network.
|
•
|
HR Solutions
partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance by designing, implementing, communicating and administering a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(millions, except percentage data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
1,847
|
|
|
$
|
1,833
|
|
|
$
|
3,719
|
|
|
$
|
3,728
|
|
Operating income
|
373
|
|
|
279
|
|
|
802
|
|
|
691
|
|
||||
Operating margin
|
20.2
|
%
|
|
15.2
|
%
|
|
21.6
|
%
|
|
18.5
|
%
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Retail brokerage:
|
|
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
830
|
|
|
$
|
837
|
|
|
$
|
1,538
|
|
|
$
|
1,550
|
|
International (1)
|
678
|
|
|
661
|
|
|
1,465
|
|
|
1,461
|
|
||||
Total retail brokerage
|
1,508
|
|
|
1,498
|
|
|
3,003
|
|
|
3,011
|
|
||||
Reinsurance brokerage
|
334
|
|
|
330
|
|
|
706
|
|
|
707
|
|
||||
Total
|
$
|
1,842
|
|
|
$
|
1,828
|
|
|
$
|
3,709
|
|
|
$
|
3,718
|
|
Three months ended June 30, 2016
|
|
Percent Change
|
|
Less: Currency Impact
|
|
Less: Acquisitions, Divestitures & Other
|
|
Organic Revenue
|
||||
Retail brokerage:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
(1
|
)%
|
|
(3
|
)%
|
|
—
|
%
|
|
2
|
%
|
International (1)
|
|
3
|
|
|
(2
|
)
|
|
(1
|
)
|
|
6
|
|
Total retail brokerage
|
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
4
|
|
Reinsurance brokerage
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total
|
|
1
|
%
|
|
(2
|
)%
|
|
—
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
||||
Six months ended June 30,
|
|
Percent Change
|
|
Less: Currency Impact
|
|
Less: Acquisitions, Divestitures & Other
|
|
Organic Revenue
|
||||
Retail brokerage:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
(1
|
)%
|
|
(3
|
)%
|
|
(1
|
)%
|
|
3
|
%
|
International (1)
|
|
—
|
|
|
(4
|
)
|
|
(1
|
)
|
|
5
|
|
Total retail brokerage
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
4
|
|
Reinsurance brokerage
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
Total
|
|
—
|
%
|
|
(3
|
)%
|
|
—
|
%
|
|
3
|
%
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(millions, except percentage data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
931
|
|
|
$
|
979
|
|
|
$
|
1,861
|
|
|
$
|
1,949
|
|
Operating income
|
75
|
|
|
39
|
|
|
142
|
|
|
115
|
|
||||
Operating margin
|
8.1
|
%
|
|
4.0
|
%
|
|
7.6
|
%
|
|
5.9
|
%
|
·
|
Retirement
specializes in global actuarial services, defined contribution consulting, tax and ERISA consulting, and pension administration.
|
·
|
Compensation
focuses on compensatory advisory/counsel including: compensation planning design, executive reward strategies, salary survey and benchmarking, market share studies and sales force effectiveness, with special expertise in the financial services and technology industries.
|
·
|
Strategic Human Capital
delivers advice to complex global organizations on talent, change and organizational effectiveness issues, including talent strategy and acquisition, executive on-boarding, performance management, leadership assessment and development, communication strategy, workforce training and change management.
|
·
|
Investment consulting
advises public and private companies, other institutions and trustees on developing and maintaining investment programs across a broad range of plan types, including defined benefit plans, defined contribution plans, endowments and foundations.
|
·
|
Benefits Administration
applies our human resource expertise primarily through defined benefit (pension), defined contribution (401(k)), and health and welfare administrative services. Our model replaces the resource-intensive processes once required to administer benefit plans with more efficient, effective, and less costly solutions.
|
·
|
Exchanges
is building and operating healthcare exchanges that provide employers with a cost effective alternative to traditional employee and retiree healthcare, while helping individuals select the insurance that best meets their needs.
|
·
|
Human Resource Business Processing Outsourcing ("HR BPO")
provides market-leading solutions to manage employee data; administers benefits, payroll and other human resources processes; and records and manages talent, workforce and other core human resource process transactions as well as other complementary services such as flexible spending, dependent audit and participant advocacy.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Consulting services
|
$
|
383
|
|
|
$
|
391
|
|
|
$
|
757
|
|
|
$
|
762
|
|
Outsourcing
|
550
|
|
|
599
|
|
|
1,110
|
|
|
1,203
|
|
||||
Intrasegment
|
(2
|
)
|
|
(11
|
)
|
|
(6
|
)
|
|
(16
|
)
|
||||
Total
|
$
|
931
|
|
|
$
|
979
|
|
|
$
|
1,861
|
|
|
$
|
1,949
|
|
Three months ended June 30, 2016
|
|
Percent Change
|
|
Less: Currency Impact
|
|
Less: Acquisitions, Divestitures & Other
|
|
Organic Revenue
|
||||
Consulting services
|
|
(2
|
)%
|
|
(2
|
)%
|
|
(1
|
)%
|
|
1
|
%
|
Outsourcing
|
|
(8
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
Total
|
|
(5
|
)%
|
|
(1
|
)%
|
|
(5
|
)%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
||||
Six months ended June 30,
|
|
Percent Change
|
|
Less: Currency Impact
|
|
Less: Acquisitions, Divestitures & Other
|
|
Organic Revenue
|
||||
Consulting services
|
|
(1
|
)%
|
|
(2
|
)%
|
|
(1
|
)%
|
|
2
|
%
|
Outsourcing
|
|
(8
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
Total
|
|
(5
|
)%
|
|
(2
|
)%
|
|
(5
|
)%
|
|
2
|
%
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
||||||
Risk Solutions
|
$
|
373
|
|
|
$
|
279
|
|
|
$
|
802
|
|
|
$
|
691
|
|
HR Solutions
|
75
|
|
|
39
|
|
|
142
|
|
|
115
|
|
||||
Unallocated
|
(43
|
)
|
|
(41
|
)
|
|
(89
|
)
|
|
(88
|
)
|
||||
Operating income
|
405
|
|
|
277
|
|
|
855
|
|
|
718
|
|
||||
Interest income
|
3
|
|
|
4
|
|
|
5
|
|
|
7
|
|
||||
Interest expense
|
(73
|
)
|
|
(68
|
)
|
|
(142
|
)
|
|
(133
|
)
|
||||
Other income
|
—
|
|
|
1
|
|
|
18
|
|
|
43
|
|
||||
Income before income taxes
|
$
|
335
|
|
|
$
|
214
|
|
|
$
|
736
|
|
|
$
|
635
|
|
•
|
general economic and political conditions in different countries in which we do business around the world;
|
•
|
changes in the competitive environment;
|
•
|
fluctuations in exchange and interest rates, including negative yield in some jurisdictions, that could influence revenue and expense;
|
•
|
changes in global equity and fixed income markets that could affect the return on invested assets;
|
•
|
changes in the funding status of our various defined benefit pension plans and the impact of any increased pension funding resulting from those changes;
|
•
|
the level of our debt limiting financial flexibility;
|
•
|
rating agency actions that could affect our ability to borrow funds;
|
•
|
the effect of the change in global headquarters and jurisdiction of incorporation, including differences in the anticipated benefits;
|
•
|
changes in estimates or assumptions on our financial statements;
|
•
|
limits on our subsidiaries to make dividend and other payments to us;
|
•
|
the impact of lawsuits and other contingent liabilities and loss contingencies arising from errors and omissions and other claims against us;
|
•
|
the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which we operate, particularly given the global scope of our businesses and the possibility of conflicting regulatory requirements across jurisdictions in which we do business;
|
•
|
the impact of any investigations brought by regulatory authorities in the U.S., U.K. and other countries;
|
•
|
the impact of any inquiries relating to compliance with the U.S. Foreign Corrupt Practices Act and non-U.S. anti-corruption laws and with U.S. and non-U.S. trade sanctions regimes;
|
•
|
failure to protect intellectual property rights or allegations that we infringe on the intellectual property rights of others;
|
•
|
the effects of English law on our operating flexibility and the enforcement of judgments against us;
|
•
|
the failure to retain and attract qualified personnel;
|
•
|
international risks associated with our global operations;
|
•
|
the effect of natural or man-made disasters;
|
•
|
the potential of a system or network breach or disruption resulting in operational interruption or improper disclosure of personal data;
|
•
|
our ability to develop and implement new technology;
|
•
|
damage to our reputation among clients, markets or third parties;
|
•
|
the actions taken by third parties that perform aspects of our business operations and client services;
|
•
|
the extent to which we manage certain risks created in connection with the various services, including fiduciary and investments and other advisory services and business process outsourcing services, among others, that we currently provide, or will provide in the future, to clients;
|
•
|
our ability to grow, develop and integrate companies that it acquires or new lines of business;
|
•
|
changes in commercial property and casualty markets, commercial premium rates or methods of compensation;
|
•
|
changes in the health care system or our relationships with insurance carriers; and
|
•
|
our ability to implement initiatives intended to yield cost savings and the ability to achieve those cost savings.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
|
||||||
4/1/16 - 4/30/16
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
3,324,314,629
|
|
5/1/16 - 5/31/16
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,324,314,629
|
|
||
6/1/16 - 6/30/16
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,324,314,629
|
|
||
Total
|
|
—
|
|
|
|
|
—
|
|
|
$
|
3,324,314,629
|
|
|
Aon plc
|
|
|
(Registrant)
|
|
|
|
|
July 29, 2016
|
By:
|
/s/ Laurel Meissner
|
|
LAUREL MEISSNER
|
|
|
SENIOR VICE PRESIDENT AND
|
|
|
GLOBAL CONTROLLER
|
|
|
(Principal Accounting Officer and duly authorized officer of Registrant)
|
Exhibit Number
|
|
Description of Exhibit
|
10.1
|
|
International Assignment Letter with Gregory C. Case, effective July 1, 2016.
|
10.2
|
|
International Assignment Letter with Christa Davies, effective July 1, 2016.
|
10.3
|
|
International Assignment Letter with Stephen P. McGill, effective July 1, 2016.
|
10.4
|
|
International Assignment Letter with Peter Lieb, effective July 1, 2016.
|
12.1
|
|
Statement regarding Computation of Ratio of Earnings to Fixed Charges.
|
31.1
|
|
Certification of CEO.
|
31.2
|
|
Certification of CFO.
|
32.1
|
|
Certification of CEO Pursuant to section 1350 of Title 18 of the United States Code.
|
32.2
|
|
Certification of CFO Pursuant to section 1350 of Title 18 of the United States Code.
|
101
|
|
Interactive Data Files. The following materials are filed electronically with this Quarterly Report on Form 10-Q:
|
|
|
101.INS XBRL Report Instance Document
|
|
|
101.SCH XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL XBRL Taxonomy Calculation Linkbase Document
|
|
|
101.DEF XBRL Taxonomy Definition Linkbase Document
|
|
|
101.PRE XBRL Taxonomy Presentation Linkbase Document
|
|
|
101.LAB XBRL Taxonomy Calculation Linkbase Document
|
1.
|
Introduction
|
2.
|
International Assignment Duration
|
3.
|
Immigration
|
4.
|
Changes to Compensation Arrangements
|
4.1
|
Foreign Service Allowance
|
4.2
|
Housing Allowance
|
4.3
|
Cost of Living Allowance
|
4.4
|
Tax Preparation Services
|
5.
|
Hours of Work and Holidays
|
6.
|
Repayment Agreement
|
7.
|
Termination of Employment
|
•
|
Your cost of living allowance will continue until the Termination Date.
|
•
|
Your housing allowance will continue until the later to occur of (1) the Termination Date or (2) the date of termination or expiration of any agreement, commitment or arrangement pursuant to which you have obtained such housing or car; provided, however, that if the Company requires you to leave the premises on the Notice Date or otherwise informs you that you will not be required to perform any further services prior to the Termination Date, that you will not take any action thereafter to extend such agreement, commitment, or arrangement other than to extend the arrangement to the Termination Date, and that you will use your reasonable efforts to mitigate the cost of termination of any such agreement, commitment, or arrangement following the Termination Date (but without obligation for you to incur cost in doing so).
|
•
|
Your enhanced tax preparation and financial planning benefits will continue for all periods in which you receive income attributable to the period of your International Assignment (including all compensation, earnings recognized on the granting or vesting of equity-based awards and benefits received under or contemplated by your Employment Agreement or this Letter before or after your Termination Date) and such benefits will be considered earned and vested on the Termination Date.
|
8.
|
Completion of International Assignment
|
9.
|
Repatriation Assistance
|
10.
|
Third Party Beneficiary
|
11.
|
No Waiver
|
12.
|
Withholding and Deductions
|
13.
|
Code Section 409A
|
14.
|
Governing Law
|
1.
|
Introduction
|
2.
|
International Assignment Duration
|
3.
|
Immigration
|
4.
|
Changes to Compensation Arrangements
|
4.1
|
Foreign Service Allowance
|
4.2
|
Housing Allowance
|
4.3
|
Cost of Living Allowance
|
4.4
|
School Tuition Allowance
|
4.5
|
Car Allowance
|
4.6
|
Income Taxes Payable in the U.K. (Equalization Tax)
|
4.7
|
Tax Preparation Services
|
5.
|
Hours of Work and Holidays
|
6.
|
Repayment Agreement
|
7.
|
Termination of Employment
|
•
|
Your cost of living allowance (and all tax gross-ups thereon) will continue until the Termination Date.
|
•
|
Your housing and car allowances (and all tax gross-ups thereon) will continue until the later to occur of (1) the Termination Date, or (2) the date of termination or expiration of any agreement, commitment, or arrangement pursuant to which you have obtained such housing or car; provided, however, that if the Company requires you to leave the premises on the Notice Date or otherwise informs you that you will not be required to perform any further services prior to the Termination Date, that you will not take any action thereafter to extend such agreement, commitment or arrangement other than to extend the arrangement to the Termination Date, and that you will use your reasonable efforts to mitigate the cost of termination of any such agreement, commitment or arrangement following the Termination Date (but without obligation for you to incur cost in doing so).
|
•
|
Your enhanced tax preparation, financial planning benefits (and all tax gross-ups thereon), and tax equalization benefits will continue for all periods in which you receive income attributable to the period of your International Assignment (including all compensation, earnings recognized on the granting or vesting of equity-based awards, and benefits received under or contemplated by your Employment Agreement, the Executive Committee Combined Severance and Change in Control Plan (as amended from time to time), or this Letter before or after the Termination Date), and such benefits will be considered earned and vested on the Termination Date.
|
8.
|
Completion of International Assignment
|
9.
|
Repatriation Assistance
|
10.
|
Third Party Beneficiary
|
11.
|
No Waiver
|
12.
|
Withholding and Deductions
|
13.
|
Code Section 409A
|
14.
|
Governing Law
|
1.
|
Introduction
|
2.
|
International Assignment Duration
|
3.
|
Immigration
|
4.
|
Changes to Compensation Arrangements
|
4.1
|
Cost of Living Allowance
|
4.2
|
Car Allowance
|
4.3
|
Income Taxes Payable in the U.K. (Equalization Tax)
|
4.4
|
Tax Preparation Services
|
5.
|
Hours of Work and Holidays
|
6.
|
Repayment Agreement
|
7.
|
Termination of Employment
|
•
|
Your cost of living allowance (and all tax gross-ups thereon) will continue until the Termination Date.
|
•
|
Your car allowance (and all tax gross-ups thereon) will continue until the later to occur of (1) the Termination Date or (2) the date of termination or expiration of any agreement, commitment or arrangement pursuant to which you have obtained such housing or car; provided, however, that if the Company requires you to leave the premises on the Notice Date or otherwise informs you that you will not be required to perform any further services prior to the Termination Date, that you will not take any action thereafter to extend such agreement, commitment, or arrangement other than to extend the arrangement to the Termination Date, and that you will use your reasonable efforts to mitigate the cost of termination of any such agreement, commitment, or arrangement following the Termination Date (but without obligation for you to incur cost in doing so).
|
•
|
Your enhanced tax preparation, financial planning benefits (and all tax gross-ups thereon), and tax equalization benefits will continue for all periods in which you receive income attributable to the period of your International Assignment (including all compensation, earnings recognized on the granting or vesting of equity-based awards, and benefits received under or contemplated by your Employment Agreement, the Executive Committee Combined Severance and Change in Control Plan (as amended from time to time), or this Letter before or after the Termination Date), and such benefits will be considered earned and vested on the Termination Date.
|
8.
|
Completion of International Assignment
|
9.
|
Repatriation Assistance
|
10.
|
Third Party Beneficiary
|
11.
|
No Waiver
|
12.
|
Withholding and Deductions
|
13.
|
Code Section 409A
|
14.
|
Governing Law
|
1.
|
Introduction
|
2.
|
International Assignment Duration
|
3.
|
Immigration
|
4.
|
Changes to Compensation Arrangements
|
4.1
|
Foreign Service Allowance
|
4.2
|
Housing Allowance
|
4.3
|
Cost of Living Allowance
|
4.4
|
Car Allowance
|
4.5
|
Home Leave Allowance
|
4.6
|
Income Taxes Payable in the U.K. (Equalization Tax)
|
4.7
|
Tax Preparation Services
|
5.
|
Hours of Work and Holidays
|
6.
|
Repayment Agreement
|
7.
|
Termination of Employment
|
•
|
Your cost of living and home leave allowances (and all tax gross-ups thereon) will continue until the Termination Date.
|
•
|
Your housing and car allowances (and all tax gross-ups thereon) will continue until the later to occur of (1) the Termination Date or (2) the date of termination or expiration of any agreement, commitment or arrangement pursuant to which you have obtained such housing or car; provided, however, that if the Company requires you to leave the premises on the Notice Date or otherwise informs you that you will not be required to perform any further services prior to the Termination Date, that you will not take any action thereafter to extend such agreement, commitment, or arrangement other than to extend the arrangement to the Termination Date, and that you will use your reasonable efforts to mitigate the cost of termination of any such agreement, commitment, or arrangement following the Termination Date (but without obligation for you to incur cost in doing so).
|
•
|
Your enhanced tax preparation, financial planning benefits (and all tax gross-ups thereon), and tax equalization benefits will continue for all periods in which you receive income attributable to the period of your International Assignment (including all compensation, earnings recognized on the granting or vesting of equity-based awards, and benefits received under or contemplated by your Employment Agreement, the Executive Committee Combined Severance and Change in Control Plan (as amended from time to time), or this Letter before or after the Termination Date), and such benefits will be considered earned and vested on the Termination Date.
|
8.
|
Completion of International Assignment
|
9.
|
Repatriation Assistance
|
10.
|
Third Party Beneficiary
|
11.
|
No Waiver
|
12.
|
Withholding and Deductions
|
13.
|
Code Section 409A
|
14.
|
Governing Law
|
|
|
Six Months Ended June 30,
|
|
Years Ended December 31,
|
||||||||||||||||||||
(millions except ratio)
|
|
2016
|
|
2015
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Income from continuing operations before income taxes and noncontrolling interests (1)
|
|
$
|
736
|
|
|
$
|
635
|
|
|
$
|
1,689
|
|
|
$
|
1,765
|
|
|
$
|
1,538
|
|
|
$
|
1,380
|
|
Less: Equity in earnings on less than 50% owned entities
|
|
3
|
|
|
6
|
|
|
13
|
|
|
12
|
|
|
20
|
|
|
13
|
|
||||||
Add back fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on indebtedness
|
|
142
|
|
|
133
|
|
|
273
|
|
|
255
|
|
|
210
|
|
|
228
|
|
||||||
Interest on uncertain tax positions
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
4
|
|
|
5
|
|
|
5
|
|
||||||
Portion of rents representative of interest factor
|
|
17
|
|
|
22
|
|
|
45
|
|
|
50
|
|
|
52
|
|
|
42
|
|
||||||
Income as adjusted
|
|
$
|
892
|
|
|
$
|
782
|
|
|
$
|
1,994
|
|
|
$
|
2,062
|
|
|
$
|
1,785
|
|
|
$
|
1,642
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on indebtedness
|
|
$
|
142
|
|
|
$
|
133
|
|
|
$
|
273
|
|
|
$
|
255
|
|
|
$
|
210
|
|
|
$
|
228
|
|
Interest on uncertain tax positions
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
4
|
|
|
5
|
|
|
5
|
|
||||||
Portion of rents representative of interest factor
|
|
17
|
|
|
22
|
|
|
45
|
|
|
50
|
|
|
52
|
|
|
42
|
|
||||||
Total fixed charges
|
|
$
|
159
|
|
|
$
|
153
|
|
|
$
|
318
|
|
|
$
|
309
|
|
|
$
|
267
|
|
|
$
|
275
|
|
Ratio of earnings to fixed charges
|
|
5.6
|
|
|
5.1
|
|
|
6.3
|
|
|
6.7
|
|
|
6.7
|
|
|
6.0
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Aon plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
July 29, 2016
|
/s/ GREGORY C. CASE
|
|
|
Gregory C. Case
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Aon plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
July 29, 2016
|
/s/ CHRISTA DAVIES
|
|
|
Christa Davies
Chief Financial Officer
|
|
/s/ GREGORY C. CASE
|
|
Gregory C. Case
Chief Executive Officer
|
|
July 29, 2016
|
|
/s/ CHRISTA DAVIES
|
|
Christa Davies
Chief Financial Officer
|
|
July 29, 2016
|