England and Wales | 1-7933 | 98-1030901 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
122 Leadenhall Street, London, England (Address of Principal Executive Offices) | EC3V 4AN (Zip Code) |
Exhibit Number | Description of Exhibit | ||
99.1 | Press Release issued by Aon plc on May 9, 2017. |
Aon plc | |||
By: | /s/ Christa Davies | ||
Christa Davies | |||
Executive Vice President and Chief Financial Officer | |||
Date: | May 9, 2017 |
Exhibit Number | Description of Exhibit | |
99.1 | Press Release issued by Aon plc on May 9, 2017. |
Investor Relations |
• | Reported revenue increased 5% to $2.4 billion, with organic revenue growth of 4% |
• | Operating margin decreased 410 basis points to 14.4%, and operating margin, adjusted for certain items, increased 220 basis points to 22.3% |
• | EPS decreased 15% to $0.94, and EPS, adjusted for certain items, increased 20% to $1.45 |
• | For the first three months of 2017, cash flow from operations increased $38 million, or 26%, to $182 million, and free cash flow increased $41 million, or 38%, to $148 million |
• | Repurchased 1.1 million Class A Ordinary Shares for approximately $125 million |
• | Subsequent to the close of the quarter, the Company closed its sale of the Benefits Administration and HR Business Process Outsourcing (BPO) platform for cash consideration of $4.3 billion and additional consideration of up to $500 million |
• | Subsequent to the close of the quarter, the company announced a 9% increase to its quarterly cash dividend |
Three Months Ended | |||||||||||||||||||||||
(millions) | March 31, 2017 | March 31, 2016 | % Change | Less: Currency Impact | Less: Fiduciary Investment Income (2) | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth | ||||||||||||||||
Revenue | |||||||||||||||||||||||
Commercial Risk Solutions | $ | 984 | $ | 961 | 2 | % | (2 | )% | — | % | 2 | % | 2 | % | |||||||||
Reinsurance Solutions | 371 | 371 | — | (1 | ) | — | (1 | ) | 2 | ||||||||||||||
Retirement Solutions | 386 | 395 | (2 | ) | (4 | ) | — | (1 | ) | 3 | |||||||||||||
Health Solutions | 372 | 292 | 27 | (2 | ) | — | 15 | 14 | |||||||||||||||
Data & Analytic Services | 268 | 259 | 3 | (1 | ) | — | (1 | ) | 5 | ||||||||||||||
Elimination | — | (2 | ) | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Total revenue | $ | 2,381 | $ | 2,276 | 5 | % | (2 | )% | — | % | 3 | % | 4 | % |
Three Months Ended | |||||||||||||||
(millions, except per share data) | March 31, 2017 | March 31, 2016 | $ Change | % Change | |||||||||||
Expenses | |||||||||||||||
Compensation and benefits | $ | 1,461 | $ | 1,345 | $ | 116 | 9 | % | |||||||
Information technology | 88 | 83 | 5 | 6 | |||||||||||
Premises | 84 | 82 | 2 | 2 | |||||||||||
Depreciation of fixed assets | 54 | 38 | 16 | 42 | |||||||||||
Amortization of intangible assets | 43 | 37 | 6 | 16 | |||||||||||
Other general expenses | 308 | 271 | 37 | 14 | |||||||||||
Total operating expenses | $ | 2,038 | $ | 1,856 | $ | 182 | 10 | % |
Three Months Ended | |||||||||||
(millions) | March 31, 2017 | March 31, 2016 | % Change | ||||||||
Revenue | $ | 2,381 | $ | 2,276 | 5 | % | |||||
Expenses | 2,038 | 1,856 | 10 | ||||||||
Operating income | $ | 343 | $ | 420 | (18 | )% | |||||
Operating margin | 14.4 | % | 18.5 | % | |||||||
Operating income - adjusted | $ | 530 | $ | 457 | 16 | % | |||||
Operating margin - adjusted | 22.3 | % | 20.1 | % |
Three Months Ended | |||||||||||
(millions) | March 31, 2017 | March 31, 2016 | % Change | ||||||||
Operating income | $ | 343 | $ | 420 | (18 | )% | |||||
Interest income | 2 | 2 | — | ||||||||
Interest expense | (70 | ) | (69 | ) | 1 | ||||||
Other income (expense) | (10 | ) | 18 | (156 | ) | ||||||
Income from continuing operations before income taxes | $ | 265 | $ | 371 | (29 | )% |
Investor Contact: | Media Contact: | |
Scott Malchow | Donna Mirandola | |
Senior Vice President, Investor Relations | Senior Director, External Communications - Americas | |
+44 (0) 20 7086 0100 | 312-381-1532 |
Three Months Ended | |||||||||||
(millions, except per share data) | March 31, 2017 | March 31, 2016 | % Change | ||||||||
Revenue | |||||||||||
Total revenue | 2,381 | 2,276 | 5 | % | |||||||
Expenses | |||||||||||
Compensation and benefits | 1,461 | 1,345 | 9 | % | |||||||
Information technology | 88 | 83 | 6 | % | |||||||
Premises | 84 | 82 | 2 | % | |||||||
Depreciation of fixed assets | 54 | 38 | 42 | % | |||||||
Amortization of intangible assets | 43 | 37 | 16 | % | |||||||
Other general expenses | 308 | 271 | 14 | % | |||||||
Total operating expenses | 2,038 | 1,856 | 10 | % | |||||||
Operating income | 343 | 420 | (18 | )% | |||||||
Interest income | 2 | 2 | — | % | |||||||
Interest expense | (70 | ) | (69 | ) | 1 | % | |||||
Other income (expense) | (10 | ) | 18 | (156 | )% | ||||||
Income from continuing operations before income taxes | 265 | 371 | (29 | )% | |||||||
Income taxes (1) | — | 59 | (100 | )% | |||||||
Income from continuing operations | 265 | 312 | (15 | )% | |||||||
Income from discontinued operations, net of tax | 40 | 25 | 60 | % | |||||||
Net income | 305 | 337 | (9 | )% | |||||||
Less: Net income attributable to noncontrolling interests | 14 | 12 | 17 | % | |||||||
Net income attributable to Aon shareholders | $ | 291 | $ | 325 | (10 | )% | |||||
Basic net income per share attributable to Aon shareholders | |||||||||||
Continuing operations | $ | 0.95 | $ | 1.11 | (14 | )% | |||||
Discontinued operations (2) | $ | 0.15 | $ | 0.09 | 67 | % | |||||
Net income | $ | 1.10 | $ | 1.20 | (8 | )% | |||||
Diluted net income per share attributable to Aon shareholders | |||||||||||
Continuing operations | $ | 0.94 | $ | 1.10 | (15 | )% | |||||
Discontinued operations (2) | $ | 0.15 | $ | 0.09 | 67 | % | |||||
Net income | $ | 1.09 | $ | 1.19 | (8 | )% | |||||
Weighted average ordinary shares outstanding - basic | 264.8 | 271.7 | (3 | )% | |||||||
Weighted average ordinary shares outstanding - diluted | 267.0 | 273.7 | (2 | )% |
(1) | The effective tax rate was 0.1% and 15.9% for the three months ended March 31, 2017 and 2016, respectively. |
(2) | Upon triggering held for sale criteria on February 9, 2017, Aon ceased depreciating and amortizing all long-lived assets included in discontinued operations. Specifically, included within Total operating expenses was $8 million and $18 million, respectively, of depreciation of fixed assets and $11 million and $30 million, respectively, of intangible asset amortization for the three months ended March 31, 2017 and 2016. |
Three Months Ended | |||||||||||||||||||||||
(millions) | March 31, 2017 | March 31, 2016 | % Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income (2) | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (3) | ||||||||||||||||
Revenue | |||||||||||||||||||||||
Commercial Risk Solutions | $ | 984 | $ | 961 | 2 | % | (2 | )% | — | % | 2 | % | 2 | % | |||||||||
Reinsurance Solutions | 371 | 371 | — | (1 | ) | — | (1 | ) | 2 | ||||||||||||||
Retirement Solutions | 386 | 395 | (2 | ) | (4 | ) | — | (1 | ) | 3 | |||||||||||||
Health Solutions | 372 | 292 | 27 | (2 | ) | — | 15 | 14 | |||||||||||||||
Data & Analytic Services | 268 | 259 | 3 | (1 | ) | — | (1 | ) | 5 | ||||||||||||||
Elimination | — | (2 | ) | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Total revenue | $ | 2,381 | $ | 2,276 | 5 | % | (2 | )% | — | % | 3 | % | 4 | % |
Three Months Ended | |||||||||||
(millions) | March 31, 2017 | March 31, 2016 | Percent Change | ||||||||
Cash Provided By Continuing Operating Activities | $ | 182 | $ | 144 | 26 | % | |||||
Capital Expenditures for Continuing Operations | (34 | ) | (37 | ) | (8 | ) | |||||
Free Cash Flow for Continuing Operations (4) | $ | 148 | $ | 107 | 38 | % |
(1) | Currency impact is determined by translating last year’s revenue at this year’s foreign exchange rates. |
(2) | Fiduciary Investment Income for the three months ended March 31, 2017 and 2016, respectively, was $6 million and $5 million. |
(3) | Organic revenue growth includes the impact of intercompany activity and excludes the impact of foreign exchange rate changes, acquisitions, divestitures, transfers between business units, fiduciary investment income, and reimbursable expenses. |
(4) | Free cash flow is defined as cash flow from operations less capital expenditures. This non-GAAP measure does not imply or represent a precise calculation of residual cash flow available for discretionary expenditures. |
Three Months Ended | |||||||||||
(millions, except percentage data) | March 31, 2017 | March 31, 2016 | Percent Change | ||||||||
Revenue from continuing operations | $ | 2,381 | $ | 2,276 | 5 | % | |||||
Operating income from continuing operations - as reported | $ | 343 | $ | 420 | (18 | )% | |||||
Amortization of intangible assets | 43 | 37 | 16 | % | |||||||
Restructuring | 144 | — | 100 | % | |||||||
Operating income from continuing operations - as adjusted | $ | 530 | $ | 457 | 16 | % | |||||
Operating margin from continuing operations - as reported | 14.4 | % | 18.5 | % | |||||||
Operating margin from continuing operations - as adjusted | 22.3 | % | 20.1 | % |
Three Months Ended | |||||||||||
(millions, except per share data) | March 31, 2017 | March 31, 2016 | Percent Change | ||||||||
Operating income from continuing operations - as adjusted | $ | 530 | $ | 457 | 16 | % | |||||
Interest income | 2 | 2 | — | % | |||||||
Interest expense | (70 | ) | (69 | ) | 1 | % | |||||
Other income (expense) | (10 | ) | 18 | (156 | )% | ||||||
Income before income taxes from continuing operations - as adjusted | 452 | 408 | 11 | % | |||||||
Income taxes (2) | 50 | 64 | (22 | )% | |||||||
Income from continuing operations - as adjusted | 402 | 344 | 17 | % | |||||||
Adjusted income from discontinued operations, net of tax (3) | 48 | 48 | — | % | |||||||
Net income - as adjusted | 450 | 392 | 15 | % | |||||||
Less: Net income attributable to noncontrolling interests | 14 | 12 | 17 | % | |||||||
Net income attributable to Aon shareholders - as adjusted | $ | 436 | $ | 380 | 15 | % | |||||
Diluted earnings per share attributable to Aon shareholders | |||||||||||
Continuing operations - as adjusted | $ | 1.45 | $ | 1.21 | 20 | % | |||||
Discontinued operations - as adjusted | $ | 0.18 | $ | 0.18 | — | % | |||||
Net income - as adjusted | $ | 1.63 | $ | 1.39 | 17 | % | |||||
Weighted average ordinary shares outstanding - diluted | 267.0 | 273.7 |
(1) | Certain noteworthy items impacting operating income in 2017 and 2016 are described in this schedule. The items shown with the caption “as adjusted” are non-GAAP measures. |
(2) | The effective tax rates used in the U.S. GAAP financial statements for continuing operations were 0.1% and 15.9% for the three months ended March 31, 2017 and 2016, respectively. After adjusting to exclude the applicable tax impact associated with restructuring, anticipated non-cash pension settlements in the fourth quarter, and amortization, the adjusted effective tax rates for continuing operations were 11.1% and 15.7% for the three months ended March 31, 2017 and 2016, respectively. |
(3) | Adjusted income from discontinued operations, net of tax, excludes intangible asset amortization on discontinued operations of $11 million and $30 million, respectively, for the three months ended March 31, 2017 and 2016. The effective tax rates used in the U.S. GAAP financial statements for discontinued operation were 29.8% and 41.9% for the three months ended March 31, 2017 and 2016, respectively. After adjusting to exclude the applicable tax impact associated with amortization, the adjusted effective tax rates for discontinued operations were 29.4% and 34.2% for the three months ended March 31, 2017 and 2016, respectively. |
As of | ||||||||
(millions) | March 31, 2017 | December 31, 2016 | ||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 433 | $ | 426 | ||||
Short-term investments | 200 | 290 | ||||||
Receivables, net | 2,103 | 2,106 | ||||||
Fiduciary assets (1) | 9,162 | 8,959 | ||||||
Other current assets | 309 | 247 | ||||||
Current assets of discontinued operations | 3,186 | 1,118 | ||||||
Total Current Assets | 15,393 | 13,146 | ||||||
Goodwill | 7,544 | 7,410 | ||||||
Intangible assets, net | 1,886 | 1,890 | ||||||
Fixed assets, net | 536 | 550 | ||||||
Deferred tax assets | 351 | 325 | ||||||
Prepaid pension | 893 | 858 | ||||||
Other non-current assets | 379 | 360 | ||||||
Non-current assets of discontinued operations | — | 2,076 | ||||||
TOTAL ASSETS | $ | 26,982 | $ | 26,615 | ||||
LIABILITIES AND EQUITY | ||||||||
LIABILITIES | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 1,332 | $ | 1,604 | ||||
Short-term debt and current portion of long-term debt | 667 | 336 | ||||||
Fiduciary liabilities | 9,162 | 8,959 | ||||||
Other current liabilities | 773 | 656 | ||||||
Current liabilities of discontinued operations | 1,036 | 940 | ||||||
Total Current Liabilities | 12,970 | 12,495 | ||||||
Long-term debt | 5,610 | 5,869 | ||||||
Deferred tax liabilities | 112 | 101 | ||||||
Pension, other postretirement and postemployment liabilities | 1,731 | 1,760 | ||||||
Other non-current liabilities | 733 | 719 | ||||||
Non-current liabilities of discontinued operations | — | 139 | ||||||
TOTAL LIABILITIES | 21,156 | 21,083 | ||||||
EQUITY | ||||||||
Ordinary shares - $0.01 nominal value | 3 | 3 | ||||||
Additional paid-in capital | 5,567 | 5,577 | ||||||
Retained earnings | 3,934 | 3,807 | ||||||
Accumulated other comprehensive loss | (3,750 | ) | (3,912 | ) | ||||
TOTAL AON SHAREHOLDERS' EQUITY | 5,754 | 5,475 | ||||||
Noncontrolling interests | 72 | 57 | ||||||
TOTAL EQUITY | 5,826 | 5,532 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 26,982 | $ | 26,615 |
(1) | Includes cash and short-term investments of $3,691 million and $3,290 million for the periods ended March 31, 2017 and December 31, 2016, respectively. |
Three Months Ended | ||||||||
(millions) | March 31, 2017 | March 31, 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 305 | $ | 337 | ||||
Less: Income from discontinued operations, net of income taxes | 40 | 25 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Loss (gain) from sales of businesses and investments, net | 2 | (35 | ) | |||||
Depreciation of fixed assets | 54 | 38 | ||||||
Amortization of intangible assets | 43 | 37 | ||||||
Share-based compensation expense | 78 | 79 | ||||||
Deferred income taxes | (2 | ) | 23 | |||||
Change in assets and liabilities: | ||||||||
Fiduciary receivables | 337 | 399 | ||||||
Short-term investments — funds held on behalf of clients | (330 | ) | (242 | ) | ||||
Fiduciary liabilities | (7 | ) | (157 | ) | ||||
Receivables, net | 38 | 33 | ||||||
Accounts payable and accrued liabilities | (390 | ) | (307 | ) | ||||
Restructuring reserves | 99 | — | ||||||
Current income taxes | (56 | ) | (45 | ) | ||||
Pension, other postretirement and other postemployment liabilities | (41 | ) | (50 | ) | ||||
Other assets and liabilities | 92 | 59 | ||||||
Net cash provided by operating activities - continuing operations | 182 | 144 | ||||||
Net cash provided by operating activities - discontinued operations | 58 | 129 | ||||||
CASH PROVIDED BY OPERATING ACTIVITIES | 240 | 273 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Proceeds from investments | 25 | 13 | ||||||
Purchases of investments | (9 | ) | (14 | ) | ||||
Net sale (purchases) of short-term investments — non-fiduciary | 94 | (227 | ) | |||||
Acquisition of businesses, net of cash acquired | (46 | ) | (16 | ) | ||||
Sale of businesses, net of cash sold | (2 | ) | 97 | |||||
Capital expenditures | (34 | ) | (37 | ) | ||||
Net cash provided by (used for) investing activities - continuing operations | 28 | (184 | ) | |||||
Net cash used for investing activities - discontinued operations | (15 | ) | (15 | ) | ||||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 13 | (199 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Share repurchase | (126 | ) | (685 | ) | ||||
Issuance of shares for employee benefit plans | (85 | ) | (65 | ) | ||||
Issuance of debt | 992 | 1,045 | ||||||
Repayment of debt | (950 | ) | (175 | ) | ||||
Cash dividends to shareholders | (87 | ) | (82 | ) | ||||
Noncontrolling interests and other financing activities | (2 | ) | (42 | ) | ||||
Net cash provided by financing activities - continuing operations | (258 | ) | (4 | ) | ||||
Net cash provided by financing activities - discontinued operations | — | — | ||||||
CASH USED FOR FINANCING ACTIVITIES | (258 | ) | (4 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 25 | 11 | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 20 | 81 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 431 | 384 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD (1) | $ | 451 | $ | 465 |
(1) | Includes $18 million and $3 million of discontinued operations at March 31, 2017 and March 31, 2016, respectively. |
Actuals First Quarter 2017 | Estimated Remaining Costs | Estimated Total Cost (2) | ||||||||||
Workforce reduction | $ | 103 | $ | 104 | $ | 207 | ||||||
IT rationalization | 3 | 143 | 146 | |||||||||
Lease consolidation | 3 | 173 | 176 | |||||||||
Asset impairments | 13 | 27 | 40 | |||||||||
Other costs associated with restructuring (3) | 22 | 159 | 181 | |||||||||
Total restructuring and related expenses | 144 | 606 | 750 |
(1) | In the Condensed Consolidated Statements of Income, workforce reductions are included in “Compensation and benefits,” IT rationalization is included in “Information technology,” lease consolidations are included in “Premises,” asset impairments are included in “Depreciation of fixed assets,” and other costs associated with restructuring are included in “Other general expenses” depending on the nature of the expense. |
(2) | Actual costs, when incurred, may vary due to changes in the assumptions built into this plan. Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives. |
(3) | Other costs associated with the Restructuring Plan, including costs to separate the Divested Business, as well as moving costs, consulting and legal fees. These costs are generally recognized when incurred. |
Three Months Ended | |||||||||||||||||||||
(millions) | Mar 31, 2014 | Mar 31, 2013 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 1,107 | $ | 1,136 | (3)% | (1 | )% | — | % | (3)% | 1 | % | |||||||||
Reinsurance Solutions | 410 | 403 | 2% | (1 | )% | — | % | —% | 3 | % | |||||||||||
Retirement Solutions | 455 | 434 | 5% | 1 | % | — | % | 1% | 3 | % | |||||||||||
Health Solutions | 260 | 236 | 10% | (1 | )% | — | % | 7% | 4 | % | |||||||||||
Data & Analytic Services | 241 | 224 | 8% | (1 | )% | — | % | (1)% | 10 | % | |||||||||||
Elimination | (6 | ) | (7 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 2,467 | $ | 2,426 | 2% | (1 | )% | — | % | —% | 3 | % |
Three Months Ended | |||||||||||||||||||||
(millions) | Jun 30, 2014 | Jun 30, 2013 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 1,135 | $ | 1,150 | (1)% | — | % | — | % | (2)% | 1 | % | |||||||||
Reinsurance Solutions | 361 | 379 | (5)% | — | % | — | % | (1)% | (4 | )% | |||||||||||
Retirement Solutions | 461 | 441 | 5% | 2 | % | — | % | —% | 3 | % | |||||||||||
Health Solutions | 249 | 224 | 11% | 1 | % | — | % | 5% | 5 | % | |||||||||||
Data & Analytic Services | 241 | 230 | 5% | 1 | % | — | % | (1)% | 5 | % | |||||||||||
Elimination | (3 | ) | (3 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 2,444 | $ | 2,421 | 1% | — | % | — | % | —% | 1 | % |
Three Months Ended | |||||||||||||||||||||
(millions) | Sep 30, 2014 | Sep 30, 2013 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 998 | $ | 1,025 | (3)% | — | % | — | % | (3)% | — | % | |||||||||
Reinsurance Solutions | 373 | 390 | (4)% | — | % | — | % | 1% | (5 | )% | |||||||||||
Retirement Solutions | 517 | 451 | 15% | 2 | % | — | % | —% | 13 | % | |||||||||||
Health Solutions | 221 | 193 | 15% | — | % | — | % | 9% | 6 | % | |||||||||||
Data & Analytic Services | 256 | 223 | 15% | 1 | % | — | % | 8% | 6 | % | |||||||||||
Elimination | (4 | ) | (4 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 2,361 | $ | 2,278 | 4% | — | % | — | % | 1% | 3 | % |
Three Months Ended | |||||||||||||||||||||
(millions) | Dec 31, 2014 | Dec 31, 2013 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 1,138 | $ | 1,188 | (4)% | (5 | )% | — | % | (1)% | 2 | % | |||||||||
Reinsurance Solutions | 335 | 340 | (1)% | (4 | )% | — | % | —% | 3 | % | |||||||||||
Retirement Solutions | 512 | 505 | 1% | (2 | )% | — | % | (1)% | 4 | % | |||||||||||
Health Solutions | 376 | 283 | 33% | (3 | )% | — | % | 7% | 29 | % | |||||||||||
Data & Analytic Services | 264 | 233 | 13% | (3 | )% | — | % | 10% | 6 | % | |||||||||||
Elimination | (5 | ) | (4 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 2,620 | $ | 2,545 | 3% | (4 | )% | — | % | 1% | 6 | % |
Twelve Months Ended | |||||||||||||||||||||
(millions) | Dec 31, 2014 | Dec 31, 2013 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 4,378 | $ | 4,499 | (3)% | (2 | )% | — | % | (2)% | 1 | % | |||||||||
Reinsurance Solutions | 1,479 | 1,512 | (2)% | (1 | )% | — | % | —% | (1 | )% | |||||||||||
Retirement Solutions | 1,945 | 1,831 | 6% | 1 | % | — | % | (1)% | 6 | % | |||||||||||
Health Solutions | 1,106 | 936 | 18% | (1 | )% | — | % | 7% | 12 | % | |||||||||||
Data & Analytic Services | 1,002 | 910 | 10% | (1 | )% | — | % | 4% | 7 | % | |||||||||||
Elimination | (18 | ) | (18 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 9,892 | $ | 9,670 | 2% | (1 | )% | — | % | —% | 3 | % |
(1) | Currency impact is determined by translating last year’s revenue at this year’s foreign exchange rates. |
(2) | Organic revenue growth includes the impact of intrasegment elimination activity and excludes the impact of foreign exchange rate changes, acquisitions, divestitures, transfers between business units, fiduciary investment income, and reimbursable expenses. |
Three Months Ended | |||||||||||||||||||||
(millions) | Mar 31, 2015 | Mar 31, 2014 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 1,014 | $ | 1,107 | (8)% | (9 | )% | — | % | (2)% | 3 | % | |||||||||
Reinsurance Solutions | 377 | 410 | (8)% | (6 | )% | — | % | —% | (2 | )% | |||||||||||
Retirement Solutions | 438 | 455 | (4)% | (6 | )% | — | % | —% | 2 | % | |||||||||||
Health Solutions | 283 | 260 | 9% | (8 | )% | — | % | 7% | 10 | % | |||||||||||
Data & Analytic Services | 254 | 241 | 5% | (7 | )% | — | % | 10% | 2 | % | |||||||||||
Elimination | (8 | ) | (6 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 2,358 | $ | 2,467 | (4)% | (8 | )% | — | % | 1% | 3 | % |
Three Months Ended | |||||||||||||||||||||
(millions) | Jun 30, 2015 | Jun 30, 2014 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 1,027 | $ | 1,135 | (10)% | (9 | )% | — | % | (3)% | 2 | % | |||||||||
Reinsurance Solutions | 329 | 361 | (9)% | (7 | )% | — | % | —% | (2 | )% | |||||||||||
Retirement Solutions | 450 | 461 | (2)% | (6 | )% | — | % | 2% | 2 | % | |||||||||||
Health Solutions | 252 | 249 | 1% | (7 | )% | — | % | 5% | 3 | % | |||||||||||
Data & Analytic Services | 258 | 241 | 7% | (7 | )% | — | % | 12% | 2 | % | |||||||||||
Elimination | — | (3 | ) | N/A | N/A | N/A | N/A | N/A | |||||||||||||
Total revenue | $ | 2,316 | $ | 2,444 | (5)% | (8 | )% | — | % | 1% | 2 | % |
Three Months Ended | |||||||||||||||||||||
(millions) | Sep 30, 2015 | Sep 30, 2014 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 883 | $ | 998 | (12)% | (10 | )% | — | % | (2)% | — | % | |||||||||
Reinsurance Solutions | 329 | 373 | (12)% | (7 | )% | — | % | —% | (5 | )% | |||||||||||
Retirement Solutions | 509 | 517 | (2)% | (6 | )% | — | % | —% | 4 | % | |||||||||||
Health Solutions | 233 | 221 | 5% | (7 | )% | — | % | 1% | 11 | % | |||||||||||
Data & Analytic Services | 254 | 256 | (1)% | (6 | )% | — | % | 1% | 4 | % | |||||||||||
Elimination | (2 | ) | (4 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 2,206 | $ | 2,361 | (7)% | (8 | )% | — | % | (1)% | 2 | % |
Three Months Ended | |||||||||||||||||||||
(millions) | Dec 31, 2015 | Dec 31, 2014 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 1,105 | $ | 1,138 | (3)% | (8 | )% | — | % | (2)% | 7 | % | |||||||||
Reinsurance Solutions | 323 | 335 | (4)% | (5 | )% | — | % | —% | 1 | % | |||||||||||
Retirement Solutions | 519 | 512 | 1% | (5 | )% | — | % | —% | 6 | % | |||||||||||
Health Solutions | 399 | 376 | 6% | (4 | )% | — | % | 3% | 7 | % | |||||||||||
Data & Analytic Services | 255 | 264 | (3)% | (5 | )% | — | % | —% | 2 | % | |||||||||||
Elimination | (1 | ) | (5 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 2,600 | $ | 2,620 | (1)% | (6 | )% | — | % | (1)% | 6 | % |
Twelve Months Ended | |||||||||||||||||||||
(millions) | Dec 31, 2015 | Dec 31, 2014 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 4,029 | $ | 4,378 | (8)% | (9 | )% | — | % | (2)% | 3 | % | |||||||||
Reinsurance Solutions | 1,358 | 1,479 | (8)% | (6 | )% | — | % | —% | (2 | )% | |||||||||||
Retirement Solutions | 1,916 | 1,945 | (1)% | (6 | )% | — | % | 2% | 3 | % | |||||||||||
Health Solutions | 1,167 | 1,106 | 6% | (6 | )% | — | % | 4% | 8 | % | |||||||||||
Data & Analytic Services | 1,021 | 1,002 | 2% | (6 | )% | — | % | 6% | 2 | % | |||||||||||
Elimination | (11 | ) | (18 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 9,480 | $ | 9,892 | (4)% | (7 | )% | — | % | —% | 3 | % |
(1) | Currency impact is determined by translating last year’s revenue at this year’s foreign exchange rates. |
(2) | Organic revenue growth includes the impact of intrasegment elimination activity and excludes the impact of foreign exchange rate changes, acquisitions, divestitures, transfers between business units, fiduciary investment income, and reimbursable expenses. |
Three Months Ended | ||||||||||||||||||
(millions) | Mar 31, 2016 | Mar 31, 2015 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | |||||||||||
Commercial Risk Solutions | $ | 961 | $ | 1,014 | (5)% | (5)% | —% | (3)% | 3% | |||||||||
Reinsurance Solutions | 371 | 377 | (2)% | (2)% | —% | —% | —% | |||||||||||
Retirement Solutions | 395 | 438 | (10)% | (4)% | —% | (8)% | 2% | |||||||||||
Health Solutions | 292 | 283 | 3% | (4)% | —% | 6% | 1% | |||||||||||
Data & Analytic Services | 259 | 254 | 2% | (3)% | —% | —% | 5% | |||||||||||
Elimination | (2 | ) | (8 | ) | N/A | N/A | N/A | N/A | N/A | |||||||||
Total revenue | $ | 2,276 | $ | 2,358 | (3)% | (4)% | —% | (1)% | 2% |
Three Months Ended | ||||||||||||||||||
(millions) | Jun 30, 2016 | Jun 30, 2015 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | |||||||||||
Commercial Risk Solutions | $ | 990 | $ | 1,027 | (4)% | (3)% | —% | (3)% | 2% | |||||||||
Reinsurance Solutions | 332 | 329 | 1% | —% | —% | 1% | —% | |||||||||||
Retirement Solutions | 405 | 450 | (10)% | (3)% | —% | (10)% | 3% | |||||||||||
Health Solutions | 281 | 252 | 12% | (3)% | —% | 8% | 7% | |||||||||||
Data & Analytic Services | 275 | 258 | 7% | (1)% | —% | —% | 8% | |||||||||||
Elimination | (1 | ) | — | N/A | N/A | N/A | N/A | N/A | ||||||||||
Total revenue | $ | 2,282 | $ | 2,316 | (1)% | (2)% | —% | (2)% | 3% |
Three Months Ended | ||||||||||||||||||
(millions) | Sep 30, 2016 | Sep 30, 2015 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | |||||||||||
Commercial Risk Solutions | $ | 884 | $ | 883 | —% | (2)% | —% | (2)% | 4% | |||||||||
Reinsurance Solutions | 329 | 329 | —% | (1)% | —% | 1% | —% | |||||||||||
Retirement Solutions | 466 | 509 | (8)% | (4)% | —% | (8)% | 4% | |||||||||||
Health Solutions | 265 | 233 | 14% | (3)% | —% | 10% | 7% | |||||||||||
Data & Analytic Services | 260 | 254 | 2% | (1)% | —% | (2)% | 5% | |||||||||||
Elimination | (3 | ) | (2 | ) | N/A | N/A | N/A | N/A | N/A | |||||||||
Total revenue | $ | 2,201 | $ | 2,206 | —% | (2)% | —% | (2)% | 4% |
Three Months Ended | ||||||||||||||||||
(millions) | Dec 31, 2016 | Dec 31, 2015 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | |||||||||||
Commercial Risk Solutions | $ | 1,094 | $ | 1,105 | (1)% | (2)% | —% | 1% | —% | |||||||||
Reinsurance Solutions | 329 | 323 | 2% | —% | —% | 1% | 1% | |||||||||||
Retirement Solutions | 441 | 519 | (15)% | (5)% | —% | (8)% | (2)% | |||||||||||
Health Solutions | 532 | 399 | 33% | (2)% | —% | 5% | 30% | |||||||||||
Data & Analytic Services | 256 | 255 | —% | (2)% | —% | (2)% | 4% | |||||||||||
Elimination | (2 | ) | (1 | ) | N/A | N/A | N/A | N/A | N/A | |||||||||
Total revenue | $ | 2,650 | $ | 2,600 | 2% | (2)% | —% | (1)% | 5% |
Twelve Months Ended | |||||||||||||||||||||
(millions) | Dec 31, 2016 | Dec 31, 2015 | Percent Change | Less: Currency Impact (1) | Less: Fiduciary Investment Income | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (2) | ||||||||||||||
Commercial Risk Solutions | $ | 3,929 | $ | 4,029 | (2)% | (3 | )% | — | % | (1)% | 2 | % | |||||||||
Reinsurance Solutions | 1,361 | 1,358 | —% | (1 | )% | — | % | —% | 1 | % | |||||||||||
Retirement Solutions | 1,707 | 1,916 | (11)% | (4 | )% | — | % | (9)% | 2 | % | |||||||||||
Health Solutions | 1,370 | 1,167 | 17% | (3 | )% | — | % | 7% | 13 | % | |||||||||||
Data & Analytic Services | 1,050 | 1,021 | 3% | (2 | )% | — | % | (1)% | 6 | % | |||||||||||
Elimination | (8 | ) | (11 | ) | N/A | N/A | N/A | N/A | N/A | ||||||||||||
Total revenue | $ | 9,409 | $ | 9,480 | (1)% | (3 | )% | — | % | (2)% | 4 | % |
(1) | Currency impact is determined by translating last year’s revenue at this year’s foreign exchange rates. |
(2) | Organic revenue growth includes the impact of intrasegment elimination activity and excludes the impact of foreign exchange rate changes, acquisitions, divestitures, transfers between business units, fiduciary investment income, and reimbursable expenses. |
Full Year 2014 (2) | Three Months Ended (3) | Full Year 2015 (4) | Three Months Ended (5) | Full Year 2016 (5) | ||||||||||||||||||||||||||||||||||||||||
(millions, except per share data) | Mar 31, 2015 | Jun 30, 2015 | Sep 30, 2015 | Dec 31, 2015 | Mar 31, 2016 | Jun 30, 2016 | Sep 30, 2016 | Dec 31, 2016 | ||||||||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||||||
Commercial Risk Solutions | $ | 4,378 | $ | 1,014 | $ | 1,027 | $ | 883 | $ | 1,105 | $ | 4,029 | $ | 961 | $ | 990 | $ | 884 | $ | 1,094 | $ | 3,929 | ||||||||||||||||||||||
Reinsurance Solutions | 1,479 | 377 | 329 | 329 | 323 | 1,358 | 371 | 332 | 329 | 329 | 1,361 | |||||||||||||||||||||||||||||||||
Retirement Solutions | 1,945 | 438 | 450 | 509 | 519 | 1,916 | 395 | 405 | 466 | 441 | 1,707 | |||||||||||||||||||||||||||||||||
Health Solutions | 1,106 | 283 | 252 | 233 | 399 | 1,167 | 292 | 281 | 265 | 532 | 1,370 | |||||||||||||||||||||||||||||||||
Data & Analytic Services | 1,002 | 254 | 258 | 254 | 255 | 1,021 | 259 | 275 | 260 | 256 | 1,050 | |||||||||||||||||||||||||||||||||
Elimination | (18 | ) | (8 | ) | — | (2 | ) | (1 | ) | (11 | ) | (2 | ) | (1 | ) | (3 | ) | (2 | ) | (8 | ) | |||||||||||||||||||||||
Total revenue | $ | 9,892 | $ | 2,358 | $ | 2,316 | $ | 2,206 | $ | 2,600 | $ | 9,480 | $ | 2,276 | $ | 2,282 | $ | 2,201 | $ | 2,650 | $ | 9,409 | ||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||||||||||||||
Compensation and benefits | 5,780 | 1,384 | 1,353 | 1,332 | 1,536 | 5,605 | 1,345 | 1,396 | 1,300 | 1,646 | 5,687 | |||||||||||||||||||||||||||||||||
Information technology | 430 | 92 | 85 | 92 | 99 | 368 | 83 | 89 | 93 | 100 | 365 | |||||||||||||||||||||||||||||||||
Premises | 399 | 97 | 90 | 79 | 88 | 354 | 82 | 85 | 84 | 84 | 335 | |||||||||||||||||||||||||||||||||
Depreciation of fixed assets | 179 | 39 | 43 | 39 | 43 | 164 | 38 | 41 | 39 | 44 | 162 | |||||||||||||||||||||||||||||||||
Amortization of intangible assets | 194 | 45 | 44 | 42 | 42 | 173 | 37 | 38 | 42 | 40 | 157 | |||||||||||||||||||||||||||||||||
Other general expenses | 1,148 | 267 | 441 | 262 | 259 | 1,229 | 271 | 246 | 275 | 273 | 1,065 | |||||||||||||||||||||||||||||||||
Total operating expenses | 8,130 | 1,924 | 2,056 | 1,846 | 2,067 | 7,893 | 1,856 | 1,895 | 1,833 | 2,187 | 7,771 | |||||||||||||||||||||||||||||||||
Operating income - as reported | 1,762 | 434 | 260 | 360 | 533 | 1,587 | 420 | 387 | 368 | 463 | 1,638 | |||||||||||||||||||||||||||||||||
Amortization of intangible assets | 194 | 45 | 44 | 42 | 42 | 173 | 37 | 38 | 42 | 40 | 157 | |||||||||||||||||||||||||||||||||
Legacy litigation | 35 | — | 176 | — | — | 176 | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Pension settlements | — | — | — | — | — | — | — | 62 | — | 158 | 220 | |||||||||||||||||||||||||||||||||
Transaction costs | — | — | — | — | — | — | — | — | — | 15 | 15 | |||||||||||||||||||||||||||||||||
Operating income - as adjusted | 1,991 | 479 | 480 | 402 | 575 | 1,936 | 457 | 487 | 410 | 676 | 2,030 | |||||||||||||||||||||||||||||||||
Operating margin from continuing operations - as adjusted | 20.1 | % | 20.3 | % | 20.7 | % | 18.2 | % | 22.1 | % | 20.4 | % | 20.1 | % | 21.3 | % | 18.6 | % | 25.5 | % | 21.6 | % | ||||||||||||||||||||||
Interest income | 10 | 3 | 4 | 3 | 4 | 14 | 2 | 3 | 1 | 3 | 9 | |||||||||||||||||||||||||||||||||
Interest expense | (255 | ) | (65 | ) | (68 | ) | (72 | ) | (68 | ) | (273 | ) | (69 | ) | (73 | ) | (70 | ) | (70 | ) | (282 | ) | ||||||||||||||||||||||
Other income (expense) | 42 | 42 | 1 | 8 | 49 | 100 | 18 | (1 | ) | 10 | 9 | 36 | ||||||||||||||||||||||||||||||||
Income before income taxes - as adjusted | 1,788 | 459 | 417 | 341 | 560 | 1,777 | 408 | 416 | 351 | 618 | 1,793 | |||||||||||||||||||||||||||||||||
Income taxes | 284 | N/A | N/A | N/A | N/A | 264 | 64 | 62 | 50 | 74 | 250 | |||||||||||||||||||||||||||||||||
Income from continuing operations - as adjusted | 1,504 | N/A | N/A | N/A | N/A | 1,513 | 344 | 354 | 301 | 544 | 1,543 | |||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 34 | N/A | N/A | N/A | N/A | 37 | 12 | 8 | 7 | 7 | 34 | |||||||||||||||||||||||||||||||||
Net income from continuing operations attributable to Aon shareholders - as adjusted | $ | 1,470 | N/A | N/A | N/A | N/A | $ | 1,476 | $ | 332 | $ | 346 | $ | 294 | $ | 537 | $ | 1,509 | ||||||||||||||||||||||||||
Diluted earnings per share from continuing operations - as adjusted | $ | 4.91 | N/A | N/A | N/A | N/A | $ | 5.20 | $ | 1.21 | $ | 1.28 | $ | 1.09 | $ | 2.00 | $ | 5.58 | ||||||||||||||||||||||||||
Weighted average ordinary shares outstanding - diluted | 299.6 | 287.1 | 286.7 | 283.8 | 279.3 | 283.8 | 273.7 | 269.8 | 269.6 | 268.3 | 270.3 |
(1) | Certain noteworthy items impacting operating income in 2016, 2015, and 2014 are described in this schedule. The items shown with the caption “as adjusted” are non-GAAP measures. |
(2) | The effective tax rate for continuing operations is 15.9% for the twelve months ended December 31, 2014. Adjusted items are taxed at the estimated annual effective tax rate. |
(3) | The non-GAAP effective tax rate is not provided on a quarterly basis for 2015. |
(4) | The effective tax rate used in the U.S. GAAP financial statements for continuing operations was 12.3% for the twelve months ended December 31, 2015. Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with legacy litigation which was adjusted at the related jurisdictional rate. The non-GAAP effective tax rate for continuing operations, adjusted for these non-GAAP items, was 14.9% for the twelve months ended December 31, 2015. |
(5) | The effective tax rates used in the U.S. GAAP financial statements for continuing operations were 15.9%, 13.6%, 8.1%, and 5.2%, respectively, for the three months ended March 31, 2016, June 30, 2016, September 30, 2016, and December 31, 2016, and 10.6% for the twelve months ended December 31, 2016. Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with non-cash pension settlements and transaction costs which are adjusted at the related jurisdictional rate. The non-GAAP effective tax rates for continuing operations, adjusted for these items, were 15.7%, 14.9%, 14.2%, and 12.0% for the three months ended March 31, 2016, June 30, 2016, September 30, 2016, and December 31, 2016, and 13.9% for the twelve months ended December 31, 2016. |