(Mark One) | ||
ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2018 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ENGLAND AND WALES (State or Other Jurisdiction of Incorporation or Organization) | 98-1030901 (I.R.S. Employer Identification No.) | |
122 LEADENHALL STREET, LONDON, ENGLAND (Address of principal executive offices) | EC3V 4AN (Zip Code) | |
+44 20 7623 5500 | ||
(Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: | ||
Title of Each Class | Name of Each Exchange on Which Registered | |
Class A Ordinary Shares, $0.01 nominal value | New York Stock Exchange |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o |
• | general economic and political conditions in the countries in which we do business around the world, including the U.K.’s expected withdrawal from the European Union; |
• | changes in the competitive environment or damage to our reputation; |
• | fluctuations in exchange and interest rates that could influence revenues and expenses; |
• | 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 or increasing borrowing costs; |
• | rating agency actions that could affect our ability to borrow funds; |
• | volatility in our tax rate due to a variety of different factors including U.S. federal income tax reform; |
• | 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 (“E&O”) 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 investment consulting and other advisory services, among others, that we currently provide, or will provide in the future, to clients; |
• | our ability to continue, and the costs and risks associated with, growing, developing and integrating companies that we acquire 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; |
• | our ability to implement initiatives intended to yield cost savings and the ability to achieve those cost savings; |
• | our risks and uncertainties in connection with the sale of the Divested Business; and |
• | our ability to realize the expected benefits from our restructuring plan. |
• | the growing availability of alternative methods for clients to meet their risk-protection needs, including a greater willingness on the part of corporations to “self-insure,” the use of so-called “captive” insurers, and the development of capital markets-based solutions and other alternative capital sources for traditional insurance and reinsurance needs that increase market capacity, increase competition, and put pressure on pricing; |
• | fluctuation in the need for insurance; |
• | the level of compensation, as a percentage of premium, that insurance carriers are willing to compensate brokers for placement activity; |
• | the growing desire of clients to move away from variable commission rates and instead compensate brokers based upon flat fees, which can negatively impact us as fees are not generally indexed for inflation and do not automatically increase with premium as does commission-based compensation; and |
• | competition from insurers seeking to sell their products directly to consumers, including online sales, without the involvement of an insurance broker. |
• | the U.S. court having had jurisdiction over the original proceedings according to English conflicts of laws principles and rules of English private international law at the time when proceedings were initiated; |
• | the U.S. proceedings not having been brought in breach of a jurisdiction or arbitration clause except with the agreement of the defendant or the defendant’s subsequent submission to the jurisdiction of the court; |
• | the U.S. judgment being final and conclusive on the merits in the sense of being final and unalterable in the court which pronounced it and being for a definite sum of money; |
• | the recognition or enforcement, as the case may be, of the U.S. judgment not contravening English public policy in a sufficiently significant way or contravening the Human Rights Act 1998 (or any subordinate legislation made thereunder, to the extent applicable); |
• | the U.S. judgment not being for a sum payable in respect of taxes, or other charges of a like nature, or in respect of a penalty or fine, or otherwise based on a U.S. law that an English court considers to be a penal or revenue law; |
• | the U.S. judgment not having been arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damages sustained, and not otherwise being a judgment contrary to section 5 of the Protection of Trading Interests Act 1980 or is a judgment based on measures designated by the Secretary of State under Section 1 of that Act; |
• | the U.S. judgment not having been obtained by fraud or in breach of English principles of natural justice; |
• | the U.S. judgment not being a judgment on a matter previously determined by an English court, or another court whose judgment is entitled to recognition (or enforcement as the case may be) in England, in proceedings involving the same parties which conflicts with an earlier judgment of such court; |
• | the party seeking enforcement (being a party who is not ordinarily resident in some part of the U.K. or resident in an EU Member State) providing security for costs, if ordered to do so by the English courts; and |
• | the English enforcement proceedings being commenced within the relevant limitation period. |
• | difficulties in staffing and managing our foreign offices, including due to unexpected wage inflation or job turnover, and the increased travel, infrastructure, and legal and compliance costs and risks associated with multiple international locations; |
• | hyperinflation in certain foreign countries; |
• | conflicting regulations in the countries in which we do business; |
• | imposition of investment requirements or other restrictions by foreign governments; |
• | longer payment cycles; |
• | greater difficulties in collecting accounts receivable; |
• | insufficient demand for our services in foreign jurisdictions; |
• | our ability to execute effective and efficient cross-border sourcing of services on behalf of our clients; |
• | the reliance on or use of third parties to perform services on behalf of the Company; |
• | disparate tax regimes; |
• | restrictions on the import and export of technologies; and |
• | trade barriers. |
Property: | Occupied Square Footage | Lease Expiration Dates | ||
200 E. Randolph Street, Chicago, Illinois | 407,000 | 2028 | ||
4 Overlook Point, Lincolnshire, Illinois | 286,000 | 2024 | ||
165 Broadway, New York, New York | 237,000 | 2028 |
Name | Age | Position | ||
Eric Andersen | 54 | Co-President. Mr. Andersen joined Aon in 1997 upon the completion of the acquisition of Minet. Mr. Andersen has served in a variety of roles during his more than 20 year career at Aon, including as Chief Executive Officer of Aon Risk Solutions Americas from 2011 to 2013, and Chief Executive Officer of Aon Benfield from September 2013 to May 2018. He was named an Executive Officer in February 2017. | ||
John Bruno | 53 | Chief Operations Officer. Mr. Bruno joined Aon in September 2014 as Executive Vice President, Enterprise Innovation & Chief Information Officer. He was named an Executive Officer in February 2017 and Chief Operations Officer in April 2017. Prior to joining Aon, Mr. Bruno held various positions at NCR Corporation, a technology company focused on assisted and self-service solutions, from 2008 to 2014, where he most recently served as Executive Vice President, Industry & Field Operations and Corporate Development. Prior to working at NCR, Mr. Bruno served in various technology positions at Goldman Sachs Group, Merrill Lynch & Co. Inc, and Symbol Technologies, Inc. | ||
Gregory C. Case | 56 | Chief Executive Officer. Mr. Case became Chief Executive Officer of Aon in April 2005. He also served as Aon’s President from April 2005 to May 2018. Prior to joining Aon, Mr. Case was a partner with McKinsey & Company, a global management consulting firm, for 17 years, most recently serving as head of the Financial Services Practice. He previously was responsible for McKinsey’s Global Insurance Practice, and was a member of McKinsey’s governing Shareholders’ Committee. Prior to joining McKinsey, Mr. Case worked for the investment banking firm of Piper, Jaffray and Hopwood and the Federal Reserve Bank of Kansas City. | ||
Christa Davies | 47 | Executive Vice President and Chief Financial Officer. Ms. Davies became Executive Vice President - Global Finance in November 2007. In March 2008, Ms. Davies assumed the additional role of Chief Financial Officer. Prior to joining Aon, Ms. Davies served for 5 years in various capacities at Microsoft Corporation, an international software company, most recently serving as Chief Financial Officer of the Platform and Services Division. Before joining Microsoft in 2002, Ms. Davies served at ninemsn, an Australian joint venture with Microsoft. | ||
Anthony Goland | 59 | Executive Vice President and Chief Innovation Officer. Mr. Goland joined Aon in September 2015 as Executive Vice President and Chief Human Resources Officer and served in that position through October 2018. Prior to joining Aon, Mr. Goland spent 30 years at McKinsey & Company, where he was a leader of the firm’s financial services, financial inclusion, and organization practices. Prior to McKinsey, he had experience with J.P. Morgan and IBM, and before that he volunteered and served as a Sergeant in the U.S. Army. | ||
Cary Grace | 50 | Chief Executive Officer, Global Retirement & Investment. Ms. Grace joined Aon in April 2012 as President of Aon Hewitt’s Strategy and Solutions group and served as the CEO of Aon’s Health Exchange Solutions prior to assuming her current role in January 2016. She was named an executive officer in May 2017. Before joining Aon, Ms. Grace spent more than 20 years with Bank of America and a predecessor to JPMorgan Chase & Co. in various business leadership positions, including leading the institutional asset advisory and mass affluent businesses. | ||
Peter Lieb | 63 | Executive Vice President, General Counsel and Company Secretary. Mr. Lieb was named Aon’s Executive Vice President and General Counsel in July 2009 and Company Secretary in November 2013. Prior to joining Aon, Mr. Lieb served as Senior Vice President, General Counsel and Secretary of NCR Corporation, a technology company focused on assisted and self-service solutions, from May 2006 to July 2009, and as Senior Vice President, General Counsel and Secretary of Symbol Technologies, Inc. from 2003 to 2006. From 1997 to 2003, Mr. Lieb served in various senior legal positions at International Paper Company, including Vice President and Deputy General Counsel. Earlier in his career, Mr. Lieb served as a law clerk to the Honorable Warren E. Burger, Chief Justice of the United States. | ||
Michael Neller | 40 | Senior Vice President and Global Controller. Mr. Neller joined Aon in August 2011 as its Vice President, Technical Accounting and Policy. From December 2011 to February 2018, Mr. Neller served as Aon’s Vice President, Deputy Global Controller. In this role, he was responsible for Aon’s Latin America and North America regions, as well as global accounting policy, corporate accounting, and external reporting. Before joining Aon, Mr. Neller served from July 2009 to August 2011 as a Senior Manager of KPMG LLP, an international public accounting firm, in its Department of Professional Practice (National Office). He was named Senior Vice President and Global Controller in February 2018. | ||
Michael O’Connor | 50 | Co-President. Mr. O’Connor joined Aon in 2008 as Chief Operating Officer of Aon Risk Solutions and was later named Chief Risk Operating Officer, Aon Risk Solutions and Aon Benfield. In 2013, he was named Chief Executive Officer, Aon Risk Solutions and served in that role until May 2018 when he was named Co-President, Aon plc. He was named an Executive Officer in February 2017. Prior to joining Aon, Mr. O’Connor was a partner at McKinsey & Company, where he served as a leader for the North America Financial Services and North America Insurance practices. | ||
John Zern | 52 | Chief Executive Officer, Aon Global Health. Mr. Zern joined Aon in 2003 as the U.S. Health Leader for Aon Risk Solutions. He has held a variety of leadership positions across Aon Risk Solutions and Aon Hewitt over his 16 years at the Company. In 2015, Mr. Zern was named Chief Executive Officer of Aon Global Health and was named an Executive Officer in May 2017. Prior to joining Aon, he held several client and people leadership positions in the U.S. health business of Marsh & McLennan Companies and at Aetna Health Plans. |
Period | Total Number of Shares Purchased | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (2) | ||||||||||
10/1/18 – 10/31/18 | 510,313 | $ | 152.79 | 510,313 | $ | 4,092,170,499 | ||||||||
11/1/18 – 11/30/18 | 439,837 | $ | 161.86 | 439,837 | $ | 4,020,978,648 | ||||||||
12/1/18 – 12/31/18 | 306,371 | $ | 154.91 | 306,371 | $ | 3,973,517,694 | ||||||||
1,256,521 | $ | 156.48 | 1,256,521 |
(1) | Does not include commissions or other costs paid to repurchase shares. |
(2) | The Repurchase Program was established in April 2012 with $5.0 billion in authorized repurchases, and was increased by $5.0 billion in authorized repurchases in each of November 2014 and February 2017, for a total of $15.0 billion in repurchase authorizations. |
(millions, except per share data) | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Income Statement Data | ||||||||||||||||||||
Total revenue from continuing operations | $ | 10,770 | $ | 9,998 | $ | 9,409 | $ | 9,480 | $ | 9,892 | ||||||||||
Income from continuing operations | 1,100 | 435 | 1,253 | 1,253 | 1,312 | |||||||||||||||
Net income from discontinued operations | 74 | 828 | 177 | 169 | 119 | |||||||||||||||
Net income | 1,174 | 1,263 | 1,430 | 1,422 | 1,431 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | 40 | 37 | 34 | 37 | 34 | |||||||||||||||
Net income attributable to Aon shareholders | $ | 1,134 | $ | 1,226 | $ | 1,396 | $ | 1,385 | $ | 1,397 | ||||||||||
Basic Net Income Per Share Attributable to Aon Shareholders | ||||||||||||||||||||
Continuing operations | $ | 4.32 | $ | 1.54 | $ | 4.55 | $ | 4.33 | $ | 4.32 | ||||||||||
Discontinued operations | 0.30 | 3.20 | 0.66 | 0.60 | 0.40 | |||||||||||||||
Net income | $ | 4.62 | $ | 4.74 | $ | 5.21 | $ | 4.93 | $ | 4.73 | ||||||||||
Diluted Net Income Per Share Attributable to Aon Shareholders | ||||||||||||||||||||
Continuing operations | $ | 4.29 | $ | 1.53 | $ | 4.51 | $ | 4.28 | $ | 4.27 | ||||||||||
Discontinued operations | 0.30 | 3.17 | 0.65 | 0.60 | 0.40 | |||||||||||||||
Net income | $ | 4.59 | $ | 4.70 | $ | 5.16 | $ | 4.88 | $ | 4.66 | ||||||||||
Balance Sheet Data | ||||||||||||||||||||
Fiduciary assets (1) | $ | 10,166 | $ | 9,625 | $ | 8,959 | $ | 9,465 | $ | 11,026 | ||||||||||
Intangible assets including goodwill | $ | 9,320 | $ | 10,091 | $ | 9,300 | $ | 8,795 | $ | 9,338 | ||||||||||
Total assets | $ | 26,422 | $ | 26,088 | $ | 26,615 | $ | 26,883 | $ | 29,572 | ||||||||||
Long-term debt | $ | 5,993 | $ | 5,667 | $ | 5,869 | $ | 5,138 | $ | 4,768 | ||||||||||
Total equity | $ | 4,219 | $ | 4,648 | $ | 5,532 | $ | 6,059 | $ | 6,527 | ||||||||||
Class A Ordinary Shares and Other Data | ||||||||||||||||||||
Dividends paid per share | $ | 1.56 | $ | 1.41 | $ | 1.29 | $ | 1.15 | $ | 0.92 | ||||||||||
At year-end: | ||||||||||||||||||||
Market price, per share | $ | 145.36 | $ | 134.00 | $ | 111.53 | $ | 92.21 | $ | 94.83 | ||||||||||
Shares outstanding | 240.1 | 247.6 | 262.0 | 269.8 | 280.0 |
(1) | Represents insurance premium receivables from clients and claims receivables from insurance carriers as well as cash and investments held in a fiduciary capacity. |
• | Revenue increased $772 million, or 8%, to $10,770 million in 2018 compared to 2017, reflecting 5% organic revenue growth, a 2% increase related to acquisitions, net of divestitures, and a 1% favorable impact from translating prior year period results at current period foreign exchange rates (“foreign currency translation”). Organic revenue growth for the year was driven by growth across every major revenue line, with particular strength in Reinsurance Solutions, Commercial Risk Solutions, and Health Solutions. |
• | Operating expenses increased $293 million, or 3%, to $9,226 million in 2018 compared to 2017 due primarily to a $172 million increase in expenses related to acquisitions, net of divestitures, a $75 million increase in expense related to legacy litigation, $71 million of accelerated amortization related to tradenames, a $59 million unfavorable impact from foreign currency translation, a $14 million increase in expense to support GDPR compliance, and an increase in expense associated with 5% organic revenue growth, partially offset by a $204 million net decrease in impairment charges, $195 million of incremental savings related to restructuring and other operational improvement initiatives, and a $28 million decrease in regulatory and compliance costs. |
• | Operating margin increased to 14.3% in 2018 from 10.7% in 2017, including an increase of 90 basis points resulting from adoption of the new revenue recognition standard in 2018. The underlying increase in operating margin from the prior year is primarily driven by organic revenue growth of 5% and strong core operational improvement, partially offset by an increase in operating expenses, described above. |
• | Due to the factors set forth above, net income from continuing operations was $1,100 million in 2018, an increase of $665 million, or 153%, from 2017. |
• | Diluted earnings per share from continuing operations was $4.29 per share during the twelve months of 2018 compared to $1.53 per share for the prior year period, including an increase of $0.32 per share resulting from the adoption of the new revenue recognition standard. |
• | Cash flow provided by operating activities was $1,686 million in 2018, an increase of $1,017 million, or 152%, from $669 million in 2017. The prior year included $940 million of cash tax payments related to the sale of the Divested Business. Strong operational improvement and working capital improvements in both receivables and payables contributed to year-over-year growth, partially offset by $145 million of incremental cash restructuring charges and $80 million of accelerated pension contributions. |
• | Organic revenue growth, a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth,” was 5% in 2018, compared to 4% organic growth in the prior year. Organic revenue growth was driven by growth across every major revenue line, with particular strength in Reinsurance Solutions, Commercial Risk Solutions, and Health Solutions. |
• | Adjusted operating margin, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 25.0% in 2018, compared to 22.8% in the prior year. The increase in adjusted |
• | Adjusted diluted earnings per share from continuing operations, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Diluted Earnings per Share,” was $8.16 per share in 2018, an increase of $1.69 per share, or 26%, from $6.47 per share in 2017. The increase demonstrates strong operational performance and effective capital management, highlighted by $1.4 billion of share repurchase during 2018, partially offset by a higher adjusted effective tax rate. |
• | Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” was $1,446 million in 2018, an increase of $960 million, or 198%, from $486 million in 2017, driven by an increase of $1,017 million in cash flow in operations, partially offset by a $57 million increase in capital expenditures, including investments in our operating model. |
Years ended December 31 | ||||||||||||
(millions) | 2018 | 2017 | 2016 | |||||||||
Revenue | ||||||||||||
Total revenue | $ | 10,770 | $ | 9,998 | $ | 9,409 | ||||||
Expenses | ||||||||||||
Compensation and benefits | 6,103 | 6,003 | 5,514 | |||||||||
Information technology | 484 | 419 | 386 | |||||||||
Premises | 370 | 348 | 343 | |||||||||
Depreciation of fixed assets | 176 | 187 | 162 | |||||||||
Amortization and impairment of intangible assets | 593 | 704 | 157 | |||||||||
Other general expenses | 1,500 | 1,272 | 1,036 | |||||||||
Total operating expenses | 9,226 | 8,933 | 7,598 | |||||||||
Operating income | 1,544 | 1,065 | 1,811 | |||||||||
Interest income | 5 | 27 | 9 | |||||||||
Interest expense | (278 | ) | (282 | ) | (282 | ) | ||||||
Other income (expense) | (25 | ) | (125 | ) | (137 | ) | ||||||
Income from continuing operations before income taxes | 1,246 | 685 | 1,401 | |||||||||
Income taxes | 146 | 250 | 148 | |||||||||
Net income from continuing operations | 1,100 | 435 | 1,253 | |||||||||
Net income from discontinued operations | 74 | 828 | 177 | |||||||||
Net income | 1,174 | 1,263 | 1,430 | |||||||||
Less: Net income attributable to noncontrolling interests | 40 | 37 | 34 | |||||||||
Net income attributable to Aon shareholders | $ | 1,134 | $ | 1,226 | $ | 1,396 |
• | The geographical distribution of income including restructuring charges, legacy litigation, and the impairment of certain assets and liabilities previously classified as held for sale as well as the post-enactment date impacts of the Tax Reform Act. |
• | Certain discrete items including the tax benefit associated with the sale of certain assets and liabilities previously classified as held for sale and the impact of share-based payments offset by the net tax expense from finalizing the impact of the enactment of the Tax Reform Act and changes in valuation allowances. |
Twelve Months Ended | ||||||||||||||||||||||||||
Dec 31, 2018 | Dec 31, 2017 | % Change | Revenue Recognition(1) | Less: Currency Impact (2) | Less: Fiduciary Investment Income (3) | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (4) | |||||||||||||||||||
Commercial Risk Solutions | $ | 4,652 | $ | 4,169 | 12 | % | — | % | 1 | % | — | % | 5 | % | 6 | % | ||||||||||
Reinsurance Solutions | 1,563 | 1,429 | 9 | (1 | ) | 2 | 1 | — | 7 | |||||||||||||||||
Retirement Solutions | 1,865 | 1,755 | 6 | — | 1 | — | 3 | 2 | ||||||||||||||||||
Health Solutions | 1,596 | 1,515 | 5 | (1 | ) | — | — | 1 | 5 | |||||||||||||||||
Data & Analytic Services | 1,105 | 1,140 | (3 | ) | — | — | — | (6 | ) | 3 | ||||||||||||||||
Elimination | (11 | ) | (10 | ) | NA | NA | NA | NA | NA | NA | ||||||||||||||||
Total revenue | $ | 10,770 | $ | 9,998 | 8 | % | — | % | 1 | % | — | % | 2 | % | 5 | % |
Twelve Months Ended | |||||||||||||||||||||||
Dec 31, 2017 | Dec 31, 2016 | % Change | Less: Currency Impact (2) | Less: Fiduciary Investment Income (3) | Less: Acquisitions, Divestitures & Other | Organic Revenue Growth (4) | |||||||||||||||||
Commercial Risk Solutions | $ | 4,169 | $ | 3,929 | 6 | % | — | % | — | % | 4 | % | 2 | % | |||||||||
Reinsurance Solutions | 1,429 | 1,361 | 5 | — | — | (1 | ) | 6 | |||||||||||||||
Retirement Solutions | 1,755 | 1,707 | 3 | (1 | ) | — | 1 | 3 | |||||||||||||||
Health Solutions | 1,515 | 1,370 | 11 | — | — | 4 | 7 | ||||||||||||||||
Data & Analytic Services | 1,140 | 1,050 | 9 | — | — | 3 | 6 | ||||||||||||||||
Elimination | (10 | ) | (8 | ) | NA | NA | NA | NA | NA | ||||||||||||||
Total revenue | $ | 9,998 | $ | 9,409 | 6 | % | — | % | — | % | 2 | % | 4 | % |
(1) | Revenue Recognition represents the impact of Aon’s adoption of the new revenue recognition standard, effective for Aon in the first quarter of 2018. |
(2) | Currency impact is determined by translating prior period's revenue at this period's foreign exchange rates. |
(3) | Fiduciary investment income for the years ended December 31, 2018, 2017, and 2016, respectively, was $53 million, $32 million, and $22 million. |
(4) | Organic revenue growth includes the impact of intercompany activity and excludes the impact of the adoption of the new revenue recognition standard, changes in foreign exchange rates, acquisitions, divestitures, transfers between revenue lines, and fiduciary investment income. |
Years ended December 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Revenue from continuing operations | $ | 10,770 | $ | 9,998 | $ | 9,409 | ||||||
Operating income from continuing operations - as reported | $ | 1,544 | $ | 1,065 | $ | 1,811 | ||||||
Amortization and impairment of intangible assets(3) | 593 | 704 | 157 | |||||||||
Restructuring | 485 | 497 | — | |||||||||
Legacy litigation | 75 | — | — | |||||||||
Regulatory and compliance matters | — | 28 | — | |||||||||
Transaction costs | — | — | 15 | |||||||||
Operating income from continuing operations - as adjusted | $ | 2,697 | $ | 2,294 | $ | 1,983 | ||||||
Operating margin from continuing operations - as reported | 14.3 | % | 10.7 | % | 19.2 | % | ||||||
Operating margin from continuing operations - as adjusted | 25.0 | % | 22.9 | % | 21.1 | % |
Year Ended December 31, 2018 | ||||||||||||
(millions, except per share data) | U.S. GAAP | Adjustments | Non-GAAP Adjusted | |||||||||
Operating income from continuing operations | $ | 1,544 | $ | 1,153 | $ | 2,697 | ||||||
Interest income | 5 | — | 5 | |||||||||
Interest expense | (278 | ) | — | (278 | ) | |||||||
Other income (expense) (1) | (25 | ) | 37 | 12 | ||||||||
Income before income taxes from continuing operations | 1,246 | 1,190 | 2,436 | |||||||||
Income taxes (2) | 146 | 233 | 379 | |||||||||
Net income from continuing operations | 1,100 | 957 | 2,057 | |||||||||
Net income (loss) from discontinued operations (3) | 74 | (82 | ) | (8 | ) | |||||||
Net income | 1,174 | 875 | 2,049 | |||||||||
Less: Net income attributable to noncontrolling interests | 40 | — | 40 | |||||||||
Net income attributable to Aon shareholders | $ | 1,134 | $ | 875 | $ | 2,009 | ||||||
Diluted net income (loss) per share attributable to Aon shareholders | ||||||||||||
Continuing operations | $ | 4.29 | $ | 3.87 | $ | 8.16 | ||||||
Discontinued operations | 0.30 | (0.33 | ) | (0.03 | ) | |||||||
Net income | $ | 4.59 | $ | 3.54 | $ | 8.13 | ||||||
Weighted average ordinary shares outstanding — diluted | 247.0 | — | 247.0 | |||||||||
Effective tax rates (3) | ||||||||||||
Continuing operations - U.S. GAAP | 11.7 | % | 15.6 | % | ||||||||
Discontinued operations - U.S. GAAP | 15,949.3 | % | 29.7 | % |
Year Ended December 31, 2017 | ||||||||||||
(millions, except per share data) | U.S. GAAP | Adjustments | Non-GAAP Adjusted | |||||||||
Operating income from continuing operations | $ | 1,065 | $ | 1,229 | $ | 2,294 | ||||||
Interest income | 27 | — | 27 | |||||||||
Interest expense | (282 | ) | — | (282 | ) | |||||||
Other income (expense) (1) | (125 | ) | 128 | 3 | ||||||||
Income before income taxes from continuing operations | 685 | 1,357 | 2,042 | |||||||||
Income taxes (2) | 250 | 55 | 305 | |||||||||
Net income from continuing operations | 435 | 1,302 | 1,737 | |||||||||
Net income (loss) from discontinued operations (3) | 828 | (772 | ) | 56 | ||||||||
Net income | 1,263 | 530 | 1,793 | |||||||||
Less: Net income attributable to noncontrolling interests | 37 | — | 37 | |||||||||
Net income attributable to Aon shareholders | $ | 1,226 | $ | 530 | $ | 1,756 | ||||||
Diluted net income (loss) per share attributable to Aon shareholders | ||||||||||||
Continuing operations | $ | 1.53 | $ | 4.99 | $ | 6.52 | ||||||
Discontinued operations | 3.17 | (2.95 | ) | 0.22 | ||||||||
Net income | $ | 4.70 | $ | 2.04 | $ | 6.74 | ||||||
Weighted average ordinary shares outstanding — diluted | 260.7 | — | 260.7 | |||||||||
Effective tax rates (3) | ||||||||||||
Continuing operations - U.S. GAAP | 36.5 | % | 14.9 | % | ||||||||
Discontinued operations - U.S. GAAP | 58.9 | % | 11.7 | % |
Year Ended December 31, 2016 | ||||||||||||
(millions, except per share data) | U.S. GAAP | Adjustments | Non-GAAP Adjusted | |||||||||
Operating income from continuing operations | $ | 1,811 | $ | 172 | $ | 1,983 | ||||||
Interest income | 9 | — | 9 | |||||||||
Interest expense | (282 | ) | — | (282 | ) | |||||||
Other income (expense) (1) | (137 | ) | 220 | 83 | ||||||||
Income before income taxes from continuing operations | 1,401 | 392 | 1,793 | |||||||||
Income taxes (2) | 148 | 102 | 250 | |||||||||
Net income from continuing operations | 1,253 | 290 | 1,543 | |||||||||
Net income from discontinued operations (3) | 177 | 94 | 271 | |||||||||
Net income | 1,430 | 384 | 1,814 | |||||||||
Less: Net income attributable to noncontrolling interests | 34 | — | 34 | |||||||||
Net income attributable to Aon shareholders | $ | 1,396 | $ | 384 | $ | 1,780 | ||||||
Diluted net income (loss) per share attributable to Aon shareholders | ||||||||||||
Continuing operations | $ | 4.51 | $ | 1.07 | $ | 5.58 | ||||||
Discontinued operations | 0.65 | 0.36 | 1.01 | |||||||||
Net income | $ | 5.16 | $ | 1.43 | $ | 6.59 | ||||||
Weighted average ordinary shares outstanding — diluted | 270.3 | — | 270.3 | |||||||||
Effective tax rates (3) | ||||||||||||
Continuing operations - U.S. GAAP | 10.6 | % | 13.9 | % | ||||||||
Discontinued operations - U.S. GAAP | 34.0 | % | 30.2 | % |
(1) | Adjusted Other income (expense) excludes Pension settlement charges of $37 million, $128 million, and $220 million, for the years ended 2018, 2017, and 2016, respectively. |
(2) | Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with estimated Restructuring Plan expenses, legacy litigation, accelerated tradename amortization, impairment charges and non-cash pension settlement charges, which are adjusted at the related jurisdictional rates. In addition, tax expense excludes the tax impacts from the sale of certain assets and liabilities previously classified as held for sale as well as the tax adjustments recorded to finalize the 2017 accounting for the enactment date impact of the Tax Reform Act recorded pursuant to SAB 118. |
(3) | Adjusted net income from discontinued operations excludes the gain on sale of discontinued operations of $82 million, $779 million, and $0 million for the years ended 2018, 2017, and 2016, respectively. Adjusted net income from discontinued operations excludes intangible asset amortization of $0 million, $11 million, and $120 million for the twelve months ended December 31, 2018, 2017, and 2016, respectively. The effective tax rate was further adjusted for the applicable tax impact associated with the gain on sale and intangible asset amortization, as applicable. |
Years Ended December 31 | 2018 | 2017 | 2016 | |||||||||
Cash Provided by Continuing Operating Activities | $ | 1,686 | $ | 669 | $ | 1,829 | ||||||
Capital Expenditures Used for Continuing Operations | (240 | ) | (183 | ) | (156 | ) | ||||||
Free Cash Flow Provided By Continuing Operations | $ | 1,446 | $ | 486 | $ | 1,673 |
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 | $ | 656 | $ | — | $ | 2,279 | $ | 2,935 | |||||||
Money market funds | — | 172 | 1,587 | 1,759 | |||||||||||
Cash and short-term investments | 656 | 172 | 3,866 | 4,694 | |||||||||||
Fiduciary receivables | — | — | 6,300 | 6,300 | |||||||||||
Total | $ | 656 | $ | 172 | $ | 10,166 | $ | 10,994 |
Years Ended December 31 | ||||||||
2018 | 2017 | |||||||
Cash provided by operating activities - continuing operations | $ | 1,686 | $ | 669 | ||||
Cash provided by investing activities - continuing operations | $ | 31 | $ | 2,806 | ||||
Cash used for financing activities - continuing operations | $ | (1,699 | ) | $ | (3,265 | ) | ||
Effect of exchange rates changes on cash and cash equivalents | $ | (118 | ) | $ | 69 |
Year Ended December 31, 2018 | Inception to Date | Estimated Remaining Costs | Estimated Total Cost (1) | |||||||||||||
Workforce reduction | $ | 115 | $ | 414 | $ | 36 | $ | 450 | ||||||||
Technology rationalization (2) | 47 | 80 | 50 | 130 | ||||||||||||
Lease consolidation (2) | 28 | 36 | 29 | 65 | ||||||||||||
Asset impairments | 13 | 39 | 11 | 50 | ||||||||||||
Other costs associated with restructuring and separation (2) (3) | 282 | 413 | 117 | 530 | ||||||||||||
Total restructuring and related expenses | $ | 485 | 982 | $ | 243 | $ | 1,225 |
(1) | Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring 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. |
(2) | Total contract termination costs incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, for the twelve months ended December 31, 2018 were $5 million, $25 million, and $85 million; and since inception of the Restructuring Plan, were $6 million, $33 million, and $88 million, respectively. Total estimated contract termination costs expected to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, are $15 million, $80 million, and $95 million. |
(3) | Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs and consulting and legal fees. These costs are generally recognized when incurred. |
Restructuring Plan | ||||
Balance at December 31, 2017 | $ | 186 | ||
Expensed | 448 | |||
Cash payments | (425 | ) | ||
Foreign currency translation and other | (8 | ) | ||
Balance at December 31, 2018 | $ | 201 |
Twelve months ended December 31 | ||||||||
2018 | 2017 (1) | |||||||
Shares repurchased | 10.0 | 18.0 | ||||||
Average price per share | $ | 143.94 | $ | 133.67 | ||||
Costs recorded to retained earnings | ||||||||
Total repurchase cost | $ | 1,447 | $ | 2,403 | ||||
Additional associated costs | 7 | 12 | ||||||
Total costs recorded to retained earnings | $ | 1,454 | $ | 2,415 |
(1) | Included in the 18.0 million shares repurchased during the twelve months ended December 31, 2017 were 0.1 million shares that did not settle until January 2018. These shares were settled at an average price per share of $134.41 and total cost of $15.9 million. |
Twelve months ended December 31 | |||||||
2018 | 2017 | ||||||
Total issuances(1) | $ | 5,400 | $ | 1,648 | |||
Total repayments | (5,118 | ) | (1,997 | ) | |||
Net issuances | $ | 282 | $ | (349 | ) |
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 |
Payments due by | |||||||||||||||||||
2019 | 2020-2021 | 2022-2023 | After 2023 | Total | |||||||||||||||
Principal payments on debt | $ | 251 | $ | 1,000 | $ | — | $ | 5,095 | $ | 6,346 | |||||||||
Interest payments on debt | 275 | 514 | 467 | 2,220 | 3,476 | ||||||||||||||
Operating leases | 303 | 474 | 330 | 472 | 1,579 | ||||||||||||||
Pension and other postretirement benefit plans | 150 | 270 | 298 | 314 | 1,032 | ||||||||||||||
Purchase obligations | 179 | 132 | 24 | 5 | 340 | ||||||||||||||
Total | $ | 1,158 | $ | 2,390 | $ | 1,119 | $ | 8,106 | $ | 12,773 |
U.K. | U.S. | Other | |||||||||
Unrecognized actuarial gains and losses | $ | 1,136 | $ | 1,708 | $ | 433 | |||||
Amortization period | 8 - 28 | 7 - 23 | 13 - 40 | ||||||||
Estimated 2019 amortization of loss | $ | 30 | $ | 55 | $ | 12 |
U.K. | U.S. | Other | |||
Expected return | 3.64% | 7.05% | 2.50 - 4.10% |
Increase (decrease) in projected benefit obligation (1) | 25 bps Change in Discount Rate | ||||||
Increase | Decrease | ||||||
U.K. plans | $ | (158 | ) | $ | 168 | ||
U.S. plans | (80 | ) | 84 | ||||
Other plans | (70 | ) | 79 |
(1) | Increases to the projected benefit obligation reflect increases to our pension obligations, while decreases in the projected benefit obligation are recoveries toward fully-funded status. A change in the discount rate has an inverse relationship to the projected benefit obligation. |
25 bps Change in Discount Rate | |||||||
Increase (decrease) in expense | Increase | Decrease | |||||
U.K. plans | $ | (2 | ) | $ | 1 | ||
U.S. plans | 1 | (1 | ) | ||||
Other plans | (1 | ) | 1 |
25 bps Change in Long-Term Rate of Return on Plan Assets | |||||||
Increase (decrease) in expense | Increase | Decrease | |||||
U.K. plans | $ | (13 | ) | $ | 13 | ||
U.S. plans | (5 | ) | 5 | ||||
Other plans | (2 | ) | 2 |
Years ended December 31 | ||||||||||||
(millions, except per share data) | 2018 | 2017 | 2016 | |||||||||
Revenue | ||||||||||||
Total revenue | $ | 10,770 | $ | 9,998 | $ | 9,409 | ||||||
Expenses | ||||||||||||
Compensation and benefits | 6,103 | 6,003 | 5,514 | |||||||||
Information technology | 484 | 419 | 386 | |||||||||
Premises | 370 | 348 | 343 | |||||||||
Depreciation of fixed assets | 176 | 187 | 162 | |||||||||
Amortization and impairment of intangible assets | 593 | 704 | 157 | |||||||||
Other general expenses | 1,500 | 1,272 | 1,036 | |||||||||
Total operating expenses | 9,226 | 8,933 | 7,598 | |||||||||
Operating income | 1,544 | 1,065 | 1,811 | |||||||||
Interest income | 5 | 27 | 9 | |||||||||
Interest expense | (278 | ) | (282 | ) | (282 | ) | ||||||
Other income (expense) | (25 | ) | (125 | ) | (137 | ) | ||||||
Income from continuing operations before income taxes | 1,246 | 685 | 1,401 | |||||||||
Income taxes | 146 | 250 | 148 | |||||||||
Net income from continuing operations | 1,100 | 435 | 1,253 | |||||||||
Net income from discontinued operations | 74 | 828 | 177 | |||||||||
Net income | 1,174 | 1,263 | 1,430 | |||||||||
Less: Net income attributable to noncontrolling interests | 40 | 37 | 34 | |||||||||
Net income attributable to Aon shareholders | $ | 1,134 | $ | 1,226 | $ | 1,396 | ||||||
Basic net income per share attributable to Aon shareholders | ||||||||||||
Continuing operations | $ | 4.32 | $ | 1.54 | $ | 4.55 | ||||||
Discontinued operations | 0.30 | 3.20 | 0.66 | |||||||||
Net income | $ | 4.62 | $ | 4.74 | $ | 5.21 | ||||||
Diluted net income per share attributable to Aon shareholders | ||||||||||||
Continuing operations | $ | 4.29 | $ | 1.53 | $ | 4.51 | ||||||
Discontinued operations | 0.30 | 3.17 | 0.65 | |||||||||
Net income | $ | 4.59 | $ | 4.70 | $ | 5.16 | ||||||
Weighted average ordinary shares outstanding - basic | 245.2 | 258.5 | 268.1 | |||||||||
Weighted average ordinary shares outstanding - diluted | 247.0 | 260.7 | 270.3 |
Years Ended December 31 | ||||||||||||
(millions) | 2018 | 2017 | 2016 | |||||||||
Net income | $ | 1,174 | $ | 1,263 | $ | 1,430 | ||||||
Less: Net income attributable to noncontrolling interests | 40 | 37 | 34 | |||||||||
Net income attributable to Aon shareholders | 1,134 | 1,226 | 1,396 | |||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Change in fair value of financial instruments | 11 | 12 | (12 | ) | ||||||||
Foreign currency translation adjustments | (444 | ) | 390 | (495 | ) | |||||||
Postretirement benefit obligation | 17 | 19 | 16 | |||||||||
Total other comprehensive income (loss) | (416 | ) | 421 | (491 | ) | |||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | (4 | ) | 5 | (2 | ) | |||||||
Total other comprehensive income (loss) attributable to Aon shareholders | (412 | ) | 416 | (489 | ) | |||||||
Comprehensive income attributable to Aon shareholders | $ | 722 | $ | 1,642 | $ | 907 |
As of December 31 | ||||||||
(millions, except nominal value) | 2018 | 2017 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 656 | $ | 756 | ||||
Short-term investments | 172 | 529 | ||||||
Receivables, net | 2,760 | 2,478 | ||||||
Fiduciary assets | 10,166 | 9,625 | ||||||
Other current assets | 618 | 289 | ||||||
Total current assets | 14,372 | 13,677 | ||||||
Goodwill | 8,171 | 8,358 | ||||||
Intangible assets, net | 1,149 | 1,733 | ||||||
Fixed assets, net | 588 | 564 | ||||||
Deferred tax assets | 561 | 389 | ||||||
Prepaid pension | 1,133 | 1,060 | ||||||
Other non-current assets | 448 | 307 | ||||||
Total assets | $ | 26,422 | $ | 26,088 | ||||
Liabilities and equity | ||||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 1,943 | $ | 1,961 | ||||
Short-term debt and current portion of long-term debt | 251 | 299 | ||||||
Fiduciary liabilities | 10,166 | 9,625 | ||||||
Other current liabilities | 936 | 870 | ||||||
Total current liabilities | 13,296 | 12,755 | ||||||
Long-term debt | 5,993 | 5,667 | ||||||
Deferred tax liabilities | 181 | 127 | ||||||
Pension, other postretirement, and postemployment liabilities | 1,636 | 1,789 | ||||||
Other non-current liabilities | 1,097 | 1,102 | ||||||
Total liabilities | 22,203 | 21,440 | ||||||
Equity | ||||||||
Ordinary shares - $0.01 nominal value Authorized: 750 shares (issued: 2018 - 240.1; 2017 - 247.6) | 2 | 2 | ||||||
Additional paid-in capital | 5,965 | 5,775 | ||||||
Retained earnings | 2,093 | 2,302 | ||||||
Accumulated other comprehensive loss | (3,909 | ) | (3,496 | ) | ||||
Total Aon shareholders' equity | 4,151 | 4,583 | ||||||
Noncontrolling interests | 68 | 65 | ||||||
Total equity | 4,219 | 4,648 | ||||||
Total liabilities and equity | $ | 26,422 | $ | 26,088 |
(millions) | Shares | Ordinary Shares and Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss, Net of Tax | Non-controlling Interests | Total | |||||||||||||||||
Balance at January 1, 2016 | 269.8 | $ | 5,412 | $ | 4,013 | $ | (3,423 | ) | $ | 57 | $ | 6,059 | |||||||||||
Net income | — | — | 1,396 | — | 34 | 1,430 | |||||||||||||||||
Shares issued — employee stock compensation plans | 4.3 | (125 | ) | — | — | — | (125 | ) | |||||||||||||||
Shares purchased | (12.1 | ) | — | (1,257 | ) | — | — | (1,257 | ) | ||||||||||||||
Tax benefit — employee benefit plans | — | (4 | ) | — | — | — | (4 | ) | |||||||||||||||
Share-based compensation expense | — | 331 | — | — | — | 331 | |||||||||||||||||
Dividends to shareholders ($1.29 per share) | — | — | (345 | ) | — | — | (345 | ) | |||||||||||||||
Net change in fair value of financial instruments | — | — | — | (12 | ) | — | (12 | ) | |||||||||||||||
Net foreign currency translation adjustments | — | — | — | (493 | ) | (2 | ) | (495 | ) | ||||||||||||||
Net postretirement benefit obligation | — | — | — | 16 | — | 16 | |||||||||||||||||
Net purchases of shares from noncontrolling interests | — | (34 | ) | — | — | (4 | ) | (38 | ) | ||||||||||||||
Dividends paid to noncontrolling interests on subsidiary common stock | — | — | — | — | (28 | ) | (28 | ) | |||||||||||||||
Balance at December 31, 2016 | 262.0 | 5,580 | 3,807 | (3,912 | ) | 57 | 5,532 | ||||||||||||||||
Adoption of new accounting guidance | — | — | 49 | — | — | 49 | |||||||||||||||||
Balance at January 1, 2017 | 262.0 | 5,580 | 3,856 | (3,912 | ) | 57 | 5,581 | ||||||||||||||||
Net income | — | — | 1,226 | — | 37 | 1,263 | |||||||||||||||||
Shares issued — employee stock compensation plans | 3.6 | (120 | ) | (1 | ) | — | — | (121 | ) | ||||||||||||||
Shares purchased | (18.0 | ) | — | (2,415 | ) | — | — | (2,415 | ) | ||||||||||||||
Share-based compensation expense | — | 321 | — | — | — | 321 | |||||||||||||||||
Dividends to shareholders ($1.41 per share) | — | — | (364 | ) | — | — | (364 | ) | |||||||||||||||
Net change in fair value of financial instruments | — | — | — | 12 | — | 12 | |||||||||||||||||
Net foreign currency translation adjustments | — | — | — | 385 | 5 | 390 | |||||||||||||||||
Net postretirement benefit obligation | — | — | — | 19 | — | 19 | |||||||||||||||||
Net purchases of shares from noncontrolling interests | — | (4 | ) | — | — | (7 | ) | (11 | ) | ||||||||||||||
Dividends paid to noncontrolling interests on subsidiary common stock | — | — | — | — | (27 | ) | (27 | ) | |||||||||||||||
Balance at December 31, 2017 | 247.6 | 5,777 | 2,302 | (3,496 | ) | 65 | 4,648 | ||||||||||||||||
Adoption of new accounting guidance | — | — | 493 | (1 | ) | — | 492 | ||||||||||||||||
Balance at January 1, 2018 | 247.6 | 5,777 | 2,795 | (3,497 | ) | 65 | 5,140 | ||||||||||||||||
Net income | — | — | 1,134 | — | 40 | 1,174 | |||||||||||||||||
Shares issued — employee stock compensation plans | 2.5 | (148 | ) | — | — | — | (148 | ) | |||||||||||||||
Shares purchased | (10.0 | ) | — | (1,454 | ) | — | — | (1,454 | ) | ||||||||||||||
Share-based compensation expense | — | 338 | — | — | — | 338 | |||||||||||||||||
Dividends to shareholders ($1.56 per share) | — | — | (382 | ) | — | — | (382 | ) | |||||||||||||||
Net change in fair value of financial instruments | — | — | — | 11 | — | 11 | |||||||||||||||||
Net foreign currency translation adjustments | — | — | — | (440 | ) | (4 | ) | (444 | ) | ||||||||||||||
Net postretirement benefit obligation | — | — | — | 17 | — | 17 | |||||||||||||||||
Net purchases of shares from noncontrolling interests | — | — | — | — | (1 | ) | (1 | ) | |||||||||||||||
Dividends paid to noncontrolling interests on subsidiary common stock | — | — | — | (32 | ) | (32 | ) | ||||||||||||||||
Balance at December 31, 2018 | 240.1 | $ | 5,967 | $ | 2,093 | $ | (3,909 | ) | $ | 68 | $ | 4,219 |
Years ended December 31 | ||||||||||||
(millions) | 2018 | 2017 | 2016 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 1,174 | $ | 1,263 | $ | 1,430 | ||||||
Less: Income from discontinued operations, net of income taxes | 74 | 828 | 177 | |||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||
Loss (gain) from sales of businesses and investments, net | 6 | 16 | (39 | ) | ||||||||
Depreciation of fixed assets | 176 | 187 | 162 | |||||||||
Amortization and impairment of intangible assets | 593 | 704 | 157 | |||||||||
Share-based compensation expense | 338 | 319 | 306 | |||||||||
Deferred income taxes | (225 | ) | (18 | ) | (24 | ) | ||||||
Change in assets and liabilities: | ||||||||||||
Fiduciary receivables | (679 | ) | 171 | 595 | ||||||||
Short-term investments — funds held on behalf of clients | (320 | ) | (135 | ) | (540 | ) | ||||||
Fiduciary liabilities | 999 | (36 | ) | (55 | ) | |||||||
Receivables, net | (127 | ) | (254 | ) | (105 | ) | ||||||
Accounts payable and accrued liabilities | 25 | 96 | 53 | |||||||||
Restructuring reserves | 23 | 172 | — | |||||||||
Current income taxes | 34 | (914 | ) | (42 | ) | |||||||
Pension, other postretirement and other postemployment liabilities | (259 | ) | (66 | ) | 42 | |||||||
Other assets and liabilities | 2 | (8 | ) | 66 | ||||||||
Cash provided by operating activities - continuing operations | 1,686 | 669 | 1,829 | |||||||||
Cash provided by operating activities - discontinued operations | — | 65 | 497 | |||||||||
Cash provided by operating activities | 1,686 | 734 | 2,326 | |||||||||
Cash flows from investing activities | ||||||||||||
Proceeds from investments | 71 | 68 | 43 | |||||||||
Payments for investments | (80 | ) | (64 | ) | (64 | ) | ||||||
Net sales (purchases) of short-term investments — non-fiduciary | 348 | (232 | ) | 61 | ||||||||
Acquisition of businesses, net of cash acquired | (58 | ) | (1,029 | ) | (879 | ) | ||||||
Sale of businesses, net of cash sold | (10 | ) | 4,246 | 107 | ||||||||
Capital expenditures | (240 | ) | (183 | ) | (156 | ) | ||||||
Cash provided by (used for) investing activities - continuing operations | 31 | 2,806 | (888 | ) | ||||||||
Cash used for investing activities - discontinued operations | — | (19 | ) | (66 | ) | |||||||
Cash provided by (used for) investing activities | 31 | 2,787 | (954 | ) | ||||||||
Cash flows from financing activities | ||||||||||||
Share repurchase | (1,470 | ) | (2,399 | ) | (1,257 | ) | ||||||
Issuance of shares for employee benefit plans | (149 | ) | (121 | ) | (129 | ) | ||||||
Issuance of debt | 5,754 | 1,654 | 3,467 | |||||||||
Repayment of debt | (5,417 | ) | (1,999 | ) | (2,945 | ) | ||||||
Cash dividends to shareholders | (382 | ) | (364 | ) | (345 | ) | ||||||
Noncontrolling interests and other financing activities | (35 | ) | (36 | ) | (77 | ) | ||||||
Cash used for financing activities - continuing operations | (1,699 | ) | (3,265 | ) | (1,286 | ) | ||||||
Cash used for financing activities - discontinued operations | — | — | — | |||||||||
Cash used for financing activities | (1,699 | ) | (3,265 | ) | (1,286 | ) | ||||||
Effect of exchange rates on cash and cash equivalents | (118 | ) | 69 | (39 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | (100 | ) | 325 | 47 | ||||||||
Cash and cash equivalents at beginning of period | 756 | 431 | 384 | |||||||||
Cash and cash equivalents at end of period | $ | 656 | $ | 756 | $ | 431 | ||||||
Supplemental disclosures: | ||||||||||||
Interest paid | $ | 266 | $ | 272 | $ | 272 | ||||||
Income taxes paid, net of refunds | $ | 337 | $ | 1,182 | $ | 218 |
Asset Description | Expected Life | |
Software | Lesser of the life of an associated license, or 4 to 7 years | |
Leasehold improvements | Lesser of estimated useful life or lease term, not to exceed 10 years | |
Furniture, fixtures and equipment | 4 to 10 years | |
Computer equipment | 4 to 6 years | |
Buildings | 35 years | |
Automobiles | 6 years |
Intangible Asset Description | Amortization Basis | Expected Life | ||
Customer-related and contract-based | In line with underlying cash flows | 7 to 20 years | ||
Tradenames | Straight-line | 1 to 3 years | ||
Technology and other | Straight-line | 5 to 7 years |
Years ended December 31 | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
As Reported | Adjustments | As Adjusted | As Reported | Adjustments | As Adjusted | |||||||||||||||||||
Operating income (loss) (1) | $ | 979 | $ | 86 | $ | 1,065 | $ | 1,638 | $ | 173 | $ | 1,811 | ||||||||||||
Other income (expense) | $ | (39 | ) | $ | (86 | ) | $ | (125 | ) | $ | 36 | $ | (173 | ) | $ | (137 | ) |
(1) | Reclassification from Operating income is recorded in Compensation and benefits. |
• | The Company previously recognized revenue either at a point in time or over a period of time based on the transfer of value to customers or as the remuneration became determinable. Under ASC 606, the revenue related to certain brokerage services recognized over a period of time is recognized on the effective date of the associated policies when control of the policy transfers to the customer. As a result, revenue from these arrangements are typically recognized in earlier periods under ASC 606 in comparison to ASC 605, changing the timing and amount of revenue recognized for annual and interim periods. This change resulted in a significant shift in timing of interim revenue for the Reinsurance Solutions revenue line and, to a lesser extent, certain other brokerage services. |
• | The Standard provides guidance on accounting for certain revenue-related costs including when to capitalize costs associated with obtaining and fulfilling a contract. The majority of these costs were previously expensed as incurred under ASC 605. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, are amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company applied a practical expedient and recognizes the costs of obtaining a contract as an expense when incurred. Assets recognized as costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, as well as other costs, are amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is generally less than one year. |
December 31, 2017 | January 1, 2018 | |||||||||||
(millions) | As Reported | Adjustments | As Adjusted | |||||||||
Assets | ||||||||||||
Receivables, net | $ | 2,478 | $ | 252 | $ | 2,730 | ||||||
Other current assets | $ | 289 | $ | 298 | $ | 587 | ||||||
Deferred tax assets | $ | 389 | $ | (128 | ) | $ | 261 | |||||
Other non-current assets | $ | 307 | $ | 145 | $ | 452 | ||||||
Liabilities | ||||||||||||
Accounts payable and accrued liabilities | $ | 1,961 | $ | 8 | $ | 1,969 | ||||||
Other current liabilities | $ | 870 | $ | 13 | $ | 883 | ||||||
Deferred tax liabilities | $ | 127 | $ | 42 | $ | 169 | ||||||
Other non-current liabilities | $ | 1,102 | $ | (3 | ) | $ | 1,099 | |||||
Equity | ||||||||||||
Total equity | $ | 4,648 | $ | 507 | $ | 5,155 |
Twelve months ended December 31, 2018 | ||||||||||||
(millions) | As Reported | Adjustments | Balances Without Adoption of ASC 606 | |||||||||
Revenue | ||||||||||||
Total revenue | $ | 10,770 | $ | (61 | ) | $ | 10,709 | |||||
Expenses | ||||||||||||
Compensation and benefits | $ | 6,103 | $ | 51 | $ | 6,154 | ||||||
Other general expenses | $ | 1,500 | $ | (1 | ) | $ | 1,499 | |||||
Other income (expense) | $ | (25 | ) | $ | 1 | $ | (24 | ) | ||||
Income taxes | $ | 146 | $ | (34 | ) | $ | 112 |
As of December 31, 2018 | ||||||||||||
(millions) | As Reported | Adjustments | Balances Without Adoption of ASC 606 | |||||||||
Assets | ||||||||||||
Receivables, net | $ | 2,760 | $ | (301 | ) | $ | 2,459 | |||||
Other current assets | $ | 618 | $ | (319 | ) | $ | 299 | |||||
Deferred tax assets | $ | 561 | $ | 137 | $ | 698 | ||||||
Other non-current assets | $ | 448 | $ | (155 | ) | $ | 293 | |||||
Liabilities | ||||||||||||
Other current liabilities | $ | 936 | $ | (43 | ) | $ | 893 | |||||
Deferred tax liabilities | $ | 181 | $ | (28 | ) | $ | 153 | |||||
Other non-current liabilities | $ | 1,097 | $ | 2 | $ | 1,099 | ||||||
Equity | ||||||||||||
Total equity | $ | 4,219 | $ | (569 | ) | $ | 3,650 |
Twelve months ended December 31, 2018 | ||||||||||||
(millions) | As Reported | Adjustments | Balances Without Adoption of ASC 606 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 1,174 | $ | (78 | ) | $ | 1,096 | |||||
Receivables, net | $ | (127 | ) | $ | 49 | $ | (78 | ) | ||||
Accounts payable and accrued liabilities | $ | 25 | $ | 8 | $ | 33 | ||||||
Current income taxes | $ | 34 | $ | (34 | ) | $ | — | |||||
Other assets and liabilities | $ | 2 | $ | 55 | $ | 57 |
Years ended December 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Commercial Risk Solutions | $ | 4,652 | $ | 4,169 | $ | 3,929 | ||||||
Reinsurance Solutions | 1,563 | 1,429 | 1,361 | |||||||||
Retirement Solutions | 1,865 | 1,755 | 1,707 | |||||||||
Health Solutions | 1,596 | 1,515 | 1,370 | |||||||||
Data & Analytic Services | 1,105 | 1,140 | 1,050 | |||||||||
Elimination | (11 | ) | (10 | ) | (8 | ) | ||||||
Total revenue | $ | 10,770 | $ | 9,998 | $ | 9,409 |
Years ended December 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
United States | $ | 4,677 | $ | 4,425 | $ | 3,981 | ||||||
Americas other than United States | 940 | 976 | 899 | |||||||||
United Kingdom | 1,555 | 1,436 | 1,354 | |||||||||
Europe, Middle East, & Africa other than United Kingdom | 2,413 | 2,025 | 1,760 | |||||||||
Asia Pacific | 1,185 | 1,136 | 1,415 | |||||||||
Total revenue | $ | 10,770 | $ | 9,998 | $ | 9,409 |
2018 | ||||
Balance at beginning of period (1) | $ | 298 | ||
Additions | 1,504 | |||
Amortization | (1,465 | ) | ||
Impairment | — | |||
Foreign currency translation and other | (8 | ) | ||
Balance at end of period | $ | 329 |
(1) | Upon adoption of the new revenue recognition standard on January 1, 2018, Aon capitalized $298 million of costs to fulfill contracts with customers. |
2018 | ||||
Balance at beginning of period (1) | $ | 145 | ||
Additions | 53 | |||
Amortization | (41 | ) | ||
Impairment | — | |||
Foreign currency translation and other | (1 | ) | ||
Balance at end of period | $ | 156 |
(1) | Upon adoption of the new revenue recognition standard on January 1, 2018, Aon capitalized $145 million of costs to obtain contracts with customers. |
Years ended December 31 | |||||||||||
2018 | 2017 | 2016 | |||||||||
Foreign currency remeasurement | $ | 25 | $ | (37 | ) | $ | (2 | ) | |||
Disposal of business | (6 | ) | (16 | ) | 39 | ||||||
Pension and other postretirement | 1 | (86 | ) | (173 | ) | ||||||
Equity earnings | 4 | 12 | 13 | ||||||||
Financial instruments | (49 | ) | 2 | (14 | ) | ||||||
Total | $ | (25 | ) | $ | (125 | ) | $ | (137 | ) |
2018 | 2017 | 2016 | |||||||||
Balance at January 1 | $ | 59 | $ | 56 | $ | 58 | |||||
Provision charged to Other general expenses | 24 | 18 | 10 | ||||||||
Accounts written off, net of recoveries | (25 | ) | (18 | ) | (15 | ) | |||||
Foreign currency translation | 4 | 3 | 3 | ||||||||
Balance at December 31 | $ | 62 | $ | 59 | $ | 56 |
As of December 31 | 2018 | 2017 | |||||
Costs to fulfill contracts with customers (1) | $ | 329 | $ | — | |||
Taxes receivable | 113 | 114 | |||||
Prepaid expenses | 97 | 126 | |||||
Receivables from the Divested Business (2) | 12 | 28 | |||||
Other | 67 | 21 | |||||
Total | $ | 618 | $ | 289 |
(1) | Refer to Note 3 “Revenue from Contracts with Customers” for further information. |
(2) | Refer to Note 5 “Discontinued Operations” for further information. |
As of December 31 | 2018 | 2017 | |||||
Software | $ | 693 | $ | 680 | |||
Leasehold improvements | 334 | 349 | |||||
Computer equipment | 279 | 295 | |||||
Furniture, fixtures and equipment | 228 | 240 | |||||
Construction in progress | 154 | 79 | |||||
Other | 45 | 90 | |||||
Fixed assets, gross | 1,733 | 1,733 | |||||
Less: Accumulated depreciation | 1,145 | 1,169 | |||||
Fixed assets, net | $ | 588 | $ | 564 |
As of December 31 | 2018 | 2017 | |||||
Costs to obtain contracts with customers (1) | $ | 156 | $ | — | |||
Investments | 54 | 57 | |||||
Taxes receivable | 100 | 84 | |||||
Other | 138 | 166 | |||||
Total | $ | 448 | $ | 307 |
As of December 31 | 2018 | 2017 | |||||
Deferred revenue (1) | $ | 251 | $ | 311 | |||
Taxes payable (2) | 83 | 139 | |||||
Other | 602 | 420 | |||||
Total | $ | 936 | $ | 870 |
(1) | During the twelve months ended December 31, 2018, $487 million was recognized in the Consolidated Statements of Income. |
(2) | Includes $42 million for the current portion of the Transition Tax as of December 31, 2017. Refer to Note 11 “Income Taxes” for further information on the Transition Tax. |
As of December 31 | 2018 | 2017 | |||||
Taxes payable (1) | $ | 585 | $ | 529 | |||
Leases | 169 | 153 | |||||
Compensation and benefits | 56 | 67 | |||||
Deferred revenue | 65 | 49 | |||||
Other | 222 | 304 | |||||
Total | $ | 1,097 | $ | 1,102 |
(1) | Includes $240 million and $222 million for the non-current portion of the Transition Tax, as of December 31, 2018 and December 31, 2017, respectively. Refer to Note 11 “Income Taxes” for further information on the Transition Tax. |
Years ended December 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Revenue | ||||||||||||
Total revenue | $ | — | $ | 698 | $ | 2,218 | ||||||
Expenses | ||||||||||||
Total operating expenses | 12 | 656 | 1,950 | |||||||||
Operating Income from discontinued operations | (12 | ) | 42 | 268 | ||||||||
Other income | — | 10 | — | |||||||||
Income from discontinued operations before income taxes | (12 | ) | 52 | 268 | ||||||||
Income tax expense (benefit) | (4 | ) | 3 | 91 | ||||||||
Net income (loss) from discontinued operations, excluding gain | (8 | ) | 49 | 177 | ||||||||
Gain on sale of discontinued operations, net of tax | 82 | 779 | — | |||||||||
Net income from discontinued operations | $ | 74 | $ | 828 | $ | 177 |
Year Ended December 31, 2018 | Inception to Date | Estimated Remaining Costs | Estimated Total Cost (1) | |||||||||||||
Workforce reduction | $ | 115 | $ | 414 | $ | 36 | $ | 450 | ||||||||
Technology rationalization (2) | 47 | 80 | 50 | 130 | ||||||||||||
Lease consolidation (2) | 28 | 36 | 29 | 65 | ||||||||||||
Asset impairments | 13 | 39 | 11 | 50 | ||||||||||||
Other costs associated with restructuring and separation (2) (3) | 282 | 413 | 117 | 530 | ||||||||||||
Total restructuring and related expenses | $ | 485 | 982 | $ | 243 | $ | 1,225 |
(1) | Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring 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. |
(2) | Total contract termination costs incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, for the twelve months ended December 31, 2018 were $5 million, $25 million, and $85 million; and since inception of the Restructuring Plan, were $6 million, $33 million, and $88 million, respectively. Total estimated contract termination costs expected to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, are $15 million, $80 million, and $95 million. |
(3) | Other costs associated with the Restructuring Plan include primarily those to separate the Divested Business, as well as moving costs and consulting and legal fees. These costs are generally recognized when incurred. |
Restructuring Plan | ||||
Balance at December 31, 2017 | $ | 186 | ||
Expensed | 448 | |||
Cash payments | (425 | ) | ||
Foreign currency translation and other | (8 | ) | ||
Balance at December 31, 2018 | $ | 201 |
For the year ended December 31, 2018 | |||
Consideration transferred | |||
Cash | $ | 55 | |
Deferred and contingent consideration | 18 | ||
Aggregate consideration transferred | $ | 73 | |
Assets acquired | |||
Cash and cash equivalents | $ | 1 | |
Receivables, net | 4 | ||
Goodwill | 38 | ||
Intangible assets, net | 34 | ||
Other assets | 4 | ||
Total assets acquired | 81 | ||
Liabilities assumed | |||
Current liabilities | 6 | ||
Other liabilities | 2 | ||
Total liabilities assumed | 8 | ||
Net assets acquired | $ | 73 |
Balance as of January 1, 2017 | $ | 7,410 | |
Goodwill related to current year acquisitions | 619 | ||
Goodwill related to disposals | (5 | ) | |
Goodwill related to prior year acquisitions | (13 | ) | |
Foreign currency translation | 347 | ||
Balance as of December 31, 2017 | $ | 8,358 | |
Goodwill related to current year acquisitions | 38 | ||
Goodwill related to disposals | (2 | ) | |
Goodwill related to prior year acquisitions | 4 | ||
Foreign currency translation | (227 | ) | |
Balance as of December 31, 2018 | $ | 8,171 |
As of December 31 | |||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization and Impairment | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization and Impairment | Net Carrying Amount | ||||||||||||||||||
Customer related and contract based | 2,240 | 1,444 | 796 | 2,550 | 1,415 | 1,135 | |||||||||||||||||
Tradenames | 1,027 | 740 | 287 | 1,047 | 533 | 514 | |||||||||||||||||
Technology and other | 391 | 325 | 66 | 416 | 332 | 84 | |||||||||||||||||
Total | $ | 3,658 | $ | 2,509 | $ | 1,149 | $ | 4,013 | $ | 2,280 | $ | 1,733 |
Estimated Future Amortization | ||||
For the years ended | ||||
2019 | $ | 385 | ||
2020 | 219 | |||
2021 | 126 | |||
2022 | 84 | |||
2023 | 72 | |||
Thereafter | 263 | |||
Total | $ | 1,149 |
As of December 31 | 2018 | 2017 | |||||
3.875% Senior Notes due December 2025 | 746 | 745 | |||||
5.00% Senior Notes due September 2020 | 599 | 598 | |||||
3.50% Senior Notes due June 2024 | 596 | 595 | |||||
4.75% Senior Notes due May 2045 | 592 | 592 | |||||
2.875% Senior Notes due May 2026 (EUR 500M) | 562 | 587 | |||||
4.60% Senior Notes due June 2044 | 544 | 544 | |||||
8.205% Junior Subordinated Notes due January 2027 | 521 | 521 | |||||
2.80% Senior Notes due March 2021 | 398 | 398 | |||||
4.00% Senior Notes due November 2023 | 348 | 348 | |||||
4.50% Senior Notes due December 2028 | 347 | — | |||||
6.25% Senior Notes due September 2040 | 296 | 296 | |||||
4.76% Senior Notes due March 2018 (CAD 375M) | — | 296 | |||||
4.45% Senior Notes due May 2043 | 246 | 246 | |||||
4.25% Senior Notes due December 2042 | 198 | 197 | |||||
Commercial paper | 250 | — | |||||
Other | 1 | 3 | |||||
Total debt | 6,244 | 5,966 | |||||
Less: Short-term and current portion of long-term debt | 251 | 299 | |||||
Total long-term debt | $ | 5,993 | $ | 5,667 |
2019 | $ | 251 | |
2020 | 600 | ||
2021 | 400 | ||
2022 | — | ||
2023 | — | ||
Thereafter | 5,095 | ||
Total Repayments | 6,346 | ||
Unamortized discounts, premiums, and debt issuance costs | (102 | ) | |
Total Debt | $ | 6,244 |
As of December, 31 | 2018 | 2017 | ||||||
Commercial paper outstanding | $ | 250 | $ | — |
Years ended December 31 | 2018 | 2017 | ||||||
Weighted average commercial paper outstanding | $ | 580 | $ | 170 | ||||
Weighted average interest rate of commercial paper outstanding | 84 | % | 0.18 | % |
Years Ended December 31 | 2018 | 2017 | 2016 | ||||||||
Rental expense | $ | 374 | $ | 377 | $ | 358 | |||||
Sub lease rental income | (45 | ) | (57 | ) | (52 | ) | |||||
Net rental expense | $ | 329 | $ | 320 | $ | 306 |
Year Ended December 31, 2018 | Gross rental commitments | Rentals from subleases | Net rental commitments | ||||||||
2019 | $ | 303 | $ | (34 | ) | $ | 269 | ||||
2020 | 253 | (30 | ) | 223 | |||||||
2021 | 221 | (30 | ) | 191 | |||||||
2022 | 182 | (30 | ) | 152 | |||||||
2023 | 148 | (12 | ) | 136 | |||||||
Thereafter | 472 | (5 | ) | 467 | |||||||
Total minimum payments required | $ | 1,579 | $ | (141 | ) | $ | 1,438 |
Years ended December 31 | 2018 | 2017 | Total | ||||||
Transition tax (1) | $ | 36 | $ | 264 | $ | 300 | |||
Re-measurement of deferred tax balances (2) | (8 | ) | 86 | 78 | |||||
Indefinite reinvestment assertion (3) | 1 | (5 | ) | (4 | ) | ||||
Allocation of tax benefit from foreign tax credits (4) | 59 | — | 59 | ||||||
Total income tax expense (benefit) | $ | 88 | $ | 345 | $ | 433 |
(1) | Reflects the Transition Tax on the post-1986 earnings and profits and related foreign tax credits of U.S.-owned foreign subsidiaries as of November 2, 2017 and December 31, 2017, whichever is higher. |
(2) | Reflects the re-measurement of deferred tax assets and liabilities as a result of the reduction in the U.S. corporate income tax rate from 35% to 21%. |
(3) | Reflects the accrual for local country income taxes, state income taxes and withholding taxes as a result of the change in its indefinite reinvestment assertion such that the Company is generally no longer indefinitely reinvested on the earnings subject to the Transition Tax. |
(4) | Reflects the allocation of tax expense from discontinued operations to continuing operations related to the utilization of foreign tax credits in the tax year ended December 31, 2017. Without the income from discontinued operations, these foreign tax credits would have required a valuation allowance. |
Years ended December 31 | 2018 | 2017 | 2016 | ||||||||
Income before income taxes: | |||||||||||
U.K. | $ | (240 | ) | $ | (420 | ) | $ | (201 | ) | ||
U.S. | (601 | ) | (765 | ) | (329 | ) | |||||
Other | 2,087 | 1,870 | 1,931 | ||||||||
Total | $ | 1,246 | $ | 685 | $ | 1,401 | |||||
Income tax expense (benefit): | |||||||||||
Current: | |||||||||||
U.K. | $ | 21 | $ | 1 | $ | (54 | ) | ||||
U.S. federal | 101 | 48 | 88 | ||||||||
U.S. state and local | 35 | 18 | 7 | ||||||||
Other | 214 | 201 | 207 | ||||||||
Total current tax expense | $ | 371 | $ | 268 | $ | 248 | |||||
Deferred tax expense (benefit): | |||||||||||
U.K. | $ | 19 | $ | (5 | ) | $ | 59 | ||||
U.S. federal | (165 | ) | 12 | (110 | ) | ||||||
U.S. state and local | (56 | ) | (35 | ) | (9 | ) | |||||
Other | (23 | ) | 10 | (40 | ) | ||||||
Total deferred tax benefit | $ | (225 | ) | $ | (18 | ) | $ | (100 | ) | ||
Total income tax expense | $ | 146 | $ | 250 | $ | 148 |
Years ended December 31 | 2018 | 2017 | 2016 | ||
Statutory tax rate | 19.0% | 19.3% | 20.0% | ||
U.S. state income taxes, net of U.S. federal benefit | (0.4) | (1.5) | 0.4 | ||
Taxes on international operations (1) | (7.3) | (30.3) | (12.2) | ||
Nondeductible expenses | 2.7 | 3.4 | 1.4 | ||
Adjustments to prior year tax requirements | 0.9 | 2.0 | (1.2) | ||
Adjustments to valuation allowances | 3.8 | (1.8) | (2.2) | ||
Change in uncertain tax positions | 0.9 | 1.6 | 3.2 | ||
Excess tax benefits related to shared based compensation (2) | (3.6) | (8.0) | — | ||
U.S. Tax Reform impact (3) | 7.1 | 51.2 | — | ||
Loss on disposition | (10.2) | — | — | ||
Other — net | (1.2) | 0.6 | 1.2 | ||
Effective tax rate | 11.7% | 36.5% | 10.6% |
(1) | The Company determines the adjustment for taxes on international operations based on the difference between the statutory tax rate applicable to earnings in each foreign jurisdiction and the enacted rate of 19.0%, 19.3% and 20.0% at December 31, 2018, 2017, and 2016, respectively. The benefit to the Company’s effective income tax rate from taxes on international operations relates to benefits from lower-taxed global operations, primarily due to the use of global funding structures and the tax holiday in Singapore. The impact decreased from 2017 to 2018 primarily as a result of the decrease in the U.S. federal tax rate. |
(2) | With the adoption of ASU 2016-09 in 2017, excess tax benefits and deficiencies from share-based payment transactions are recognized as income tax expense or benefit in the Company’s Consolidated Statements of Income. |
(3) | The impact of the Tax Reform Act including the Transition Tax, the re-measurement of U.S. deferred tax assets and liabilities from 35% to 21%, withholding tax accruals, and the allocation of tax benefit between continuing operations and discontinued operations related to utilization of foreign tax credits. |
As of December 31 | 2018 | 2017 | |||||
Deferred tax assets: | |||||||
Net operating loss, capital loss, interest, and tax credit carryforwards | $ | 563 | $ | 362 | |||
Employee benefit plans | 351 | 424 | |||||
Other accrued expenses | 98 | 65 | |||||
Investment basis differences | 28 | 35 | |||||
Deferred revenue | 29 | 20 | |||||
Tradename liability | — | 12 | |||||
Lease and service guarantees | 5 | 6 | |||||
Brokerage fee arrangements | — | 4 | |||||
Other | 46 | 49 | |||||
Total | 1,120 | 977 | |||||
Valuation allowance on deferred tax assets | (171 | ) | (136 | ) | |||
Total | $ | 949 | $ | 841 | |||
Deferred tax liabilities: | |||||||
Intangibles and property, plant and equipment | $ | (310 | ) | $ | (436 | ) | |
Deferred costs | (143 | ) | (32 | ) | |||
Unremitted earnings | (30 | ) | (39 | ) | |||
Unrealized foreign exchange gains | (26 | ) | (22 | ) | |||
Other accrued expenses | (36 | ) | (12 | ) | |||
Other | (24 | ) | (38 | ) | |||
Total | $ | (569 | ) | $ | (579 | ) | |
Net deferred tax asset | $ | 380 | $ | 262 |
As of December 31 | 2018 | 2017 | |||||
Deferred tax assets — non-current | $ | 561 | $ | 389 | |||
Deferred tax liabilities — non-current | (181 | ) | (127 | ) | |||
Net deferred tax asset | $ | 380 | $ | 262 |
As of December 31 | 2018 | 2017 | |||||
U.K. | |||||||
Operating loss carryforwards | $ | 541 | $ | 675 | |||
Capital loss carryforwards | 400 | 415 | |||||
Interest carryforwards | 53 | — | |||||
U.S. | |||||||
Federal operating loss carryforwards | $ | 2 | $ | 36 | |||
Federal capital loss carryforwards & carryback | 367 | — | |||||
Federal interest carryforwards | 424 | — | |||||
State operating loss carryforwards | $ | 315 | $ | 412 | |||
State capital loss carryforwards & carryback | 221 | — | |||||
State interest carryforwards | 227 | — | |||||
Other Non-U.S. | |||||||
Operating loss carryforwards | $ | 369 | $ | 392 | |||
Capital loss carryforwards (1) | 30 | 36 | |||||
Interest carryforwards (1) | 186 | 196 |
(1) | Prior to 2018, interest carryforwards in non-U.S. jurisdictions were classified within capital loss carryforwards. As of December 31, 2017, $196 million was reclassified from capital loss carryforwards to interest carryforwards. |
2018 | 2017 | ||||||
Balance at January 1 | $ | 280 | $ | 278 | |||
Additions based on tax positions related to the current year | 18 | 25 | |||||
Additions for tax positions of prior years | 10 | 12 | |||||
Reductions for tax positions of prior years | (24 | ) | (26 | ) | |||
Settlements | — | (6 | ) | ||||
Business combinations | 1 | — | |||||
Lapse of statute of limitations | (6 | ) | (7 | ) | |||
Foreign currency translation | — | 4 | |||||
Balance at December 31 | $ | 279 | $ | 280 |
Twelve months ended December 31 | ||||||||
2018 | 2017 (1) | |||||||
Shares repurchased | 10.0 | 18.0 | ||||||
Average price per share | $ | 143.94 | $ | 133.67 | ||||
Costs recorded to retained earnings | ||||||||
Total repurchase cost | $ | 1,447 | $ | 2,403 | ||||
Additional associated costs | 7 | 12 | ||||||
Total costs recorded to retained earnings | $ | 1,454 | $ | 2,415 |
(1) | Included in the 18.0 million shares repurchased during the twelve months ended December 31, 2017 were 0.1 million shares that did not settle until January 2018. These shares were settled at an average price per share of $134.41 and total cost of $15.9 million. |
Years ended December 31 | 2018 | 2017 | 2016 | |||||
Basic weighted-average ordinary shares outstanding | 245.2 | 258.5 | 268.1 | |||||
Dilutive effect of potentially issuable shares | 1.8 | 2.2 | 2.2 | |||||
Diluted weighted-average ordinary shares outstanding | 247.0 | 260.7 | 270.3 |
Change in Fair Value of Financial Instruments (1) | Foreign Currency Translation Adjustments | Postretirement Benefit Obligation (2) | Total | ||||||||||||
Balance at January 1, 2016 | $ | (25 | ) | $ | (771 | ) | $ | (2,627 | ) | $ | (3,423 | ) | |||
Other comprehensive income (loss) before reclassifications: | |||||||||||||||
Other comprehensive income (loss) before reclassifications | (25 | ) | (490 | ) | (276 | ) | (791 | ) | |||||||
Tax benefit (expense) | 6 | (3 | ) | 74 | 77 | ||||||||||
Other comprehensive income (loss) before reclassifications, net | (19 | ) | (493 | ) | (202 | ) | (714 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income (loss): | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 10 | — | 322 | 332 | |||||||||||
Tax benefit (expense) | (3 | ) | — | (104 | ) | (107 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net | 7 | — | 218 | 225 | |||||||||||
Net current period other comprehensive income (loss) | (12 | ) | (493 | ) | 16 | (489 | ) | ||||||||
Balance at December 31, 2016 | (37 | ) | (1,264 | ) | (2,611 | ) | (3,912 | ) | |||||||
Other comprehensive income (loss) before reclassifications | |||||||||||||||
Other comprehensive income (loss) before reclassifications | 18 | 397 | (220 | ) | 195 | ||||||||||
Tax benefit (expense) | (3 | ) | (5 | ) | 55 | 47 | |||||||||
Other comprehensive income (loss) before reclassifications, net | 15 | 392 | (165 | ) | 242 | ||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (2 | ) | (7 | ) | 236 | 227 | |||||||||
Tax benefit (expense) | (1 | ) | — | (52 | ) | (53 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net | (3 | ) | (7 | ) | 184 | 174 | |||||||||
Net current period other comprehensive income (loss) | 12 | 385 | 19 | 416 | |||||||||||
Balance at December 31, 2017 | (25 | ) | (879 | ) | (2,592 | ) | (3,496 | ) | |||||||
Adoption of new accounting guidance (3) | (1 | ) | — | — | (1 | ) | |||||||||
Balance at January 1, 2018 | (26 | ) | (879 | ) | (2,592 | ) | (3,497 | ) | |||||||
Other comprehensive income (loss) before reclassifications | |||||||||||||||
Other comprehensive income (loss) before reclassifications | (15 | ) | (437 | ) | (124 | ) | (576 | ) | |||||||
Tax benefit (expense) | 18 | (3 | ) | 28 | 43 | ||||||||||
Other comprehensive income (loss) before reclassifications, net | 3 | (440 | ) | (96 | ) | (533 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 11 | — | 146 | 157 | |||||||||||
Tax benefit (expense) | (3 | ) | — | (33 | ) | (36 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net | 8 | — | 113 | 121 | |||||||||||
Net current period other comprehensive income (loss) | 11 | (440 | ) | 17 | (412 | ) | |||||||||
Balance at December 31, 2018 | $ | (15 | ) | $ | (1,319 | ) | $ | (2,575 | ) | $ | (3,909 | ) |
(1) | Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense), Other general expenses, and Compensation and benefits. See Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivative and hedging activity. |
(2) | Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense). |
(3) | Refer to Note 2 “Summary of Significant Accounting Principles and Practices ” for further information. |
Years ended December 31 | 2018 | 2017 | 2016 | ||||||||
U.S. | $ | 98 | $ | 105 | $ | 121 | |||||
U.K. | 45 | 43 | 43 | ||||||||
Netherlands and Canada | 25 | 25 | 27 | ||||||||
Total | $ | 168 | $ | 173 | $ | 191 |
U.K. | U.S. | Other | |||||||||||||||||||||
(millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Change in projected benefit obligation | |||||||||||||||||||||||
At January 1 | $ | 4,893 | $ | 4,874 | $ | 3,155 | $ | 2,902 | $ | 1,401 | $ | 1,227 | |||||||||||
Service cost | — | — | — | — | — | — | |||||||||||||||||
Interest cost | 109 | 123 | 99 | 96 | 27 | 26 | |||||||||||||||||
Plan amendment | 13 | — | — | — | — | — | |||||||||||||||||
Settlements | (176 | ) | (496 | ) | — | — | — | — | |||||||||||||||
Actuarial loss (gain) | (297 | ) | 100 | (221 | ) | 309 | (47 | ) | 49 | ||||||||||||||
Benefit payments | (160 | ) | (146 | ) | (156 | ) | (152 | ) | (43 | ) | (39 | ) | |||||||||||
Foreign currency impact | (253 | ) | 438 | — | — | (67 | ) | 138 | |||||||||||||||
At December 31 | $ | 4,129 | $ | 4,893 | $ | 2,877 | $ | 3,155 | $ | 1,271 | $ | 1,401 | |||||||||||
Accumulated benefit obligation at end of year | $ | 4,129 | $ | 4,893 | $ | 2,877 | $ | 3,155 | $ | 1,247 | $ | 1,373 | |||||||||||
Change in fair value of plan assets | |||||||||||||||||||||||
At January 1 | $ | 5,906 | $ | 5,675 | $ | 1,958 | $ | 1,683 | $ | 1,256 | $ | 1,076 | |||||||||||
Actual return on plan assets | (125 | ) | 274 | (141 | ) | 308 | (19 | ) | 70 | ||||||||||||||
Employer contributions | 97 | 86 | 135 | 119 | 20 | 21 | |||||||||||||||||
Settlements | (176 | ) | (496 | ) | — | — | — | — | |||||||||||||||
Benefit payments | (160 | ) | (146 | ) | (156 | ) | (152 | ) | (43 | ) | (39 | ) | |||||||||||
Foreign currency impact | (317 | ) | 513 | — | — | (59 | ) | 128 | |||||||||||||||
At December 31 | $ | 5,225 | $ | 5,906 | $ | 1,796 | $ | 1,958 | $ | 1,155 | $ | 1,256 | |||||||||||
Market related value at end of year | $ | 5,225 | $ | 5,906 | $ | 1,981 | $ | 1,926 | $ | 1,155 | $ | 1,256 | |||||||||||
Amount recognized in Statement of Financial Position at December 31 | |||||||||||||||||||||||
Funded status | $ | 1,096 | $ | 1,013 | $ | (1,081 | ) | $ | (1,197 | ) | $ | (116 | ) | $ | (145 | ) | |||||||
Unrecognized prior-service cost | 30 | 19 | 3 | 5 | (7 | ) | (7 | ) | |||||||||||||||
Unrecognized loss | 1,106 | 1,217 | 1,705 | 1,701 | 440 | 459 | |||||||||||||||||
Net amount recognized | $ | 2,232 | $ | 2,249 | $ | 627 | $ | 509 | $ | 317 | $ | 307 |
U.K. | U.S. | Other | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Prepaid benefit cost (1) | $ | 1,113 | $ | 1,034 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Accrued benefit liability - current(2) | (1 | ) | (1 | ) | (46 | ) | (43 | ) | (5 | ) | (5 | ) | |||||||||||
Accrued benefit liability - non-current(3) | (16 | ) | (20 | ) | (1,035 | ) | (1,154 | ) | (111 | ) | (140 | ) | |||||||||||
Accumulated other comprehensive loss | 1,136 | 1,236 | 1,708 | 1,706 | 433 | 452 | |||||||||||||||||
Net amount recognized | $ | 2,232 | $ | 2,249 | $ | 627 | $ | 509 | $ | 317 | $ | 307 |
(1) | Included in Prepaid pension |
(2) | Included in Other current liabilities |
(3) | Included in Pension, other postretirement, and postemployment liabilities |
U.K. | U.S. | Other | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Net loss | $ | 1,106 | $ | 1,217 | $ | 1,705 | $ | 1,701 | $ | 440 | $ | 459 | |||||||||||
Prior service cost (income) | 30 | 19 | 3 | 5 | (7 | ) | (7 | ) | |||||||||||||||
Total | $ | 1,136 | $ | 1,236 | $ | 1,708 | $ | 1,706 | $ | 433 | $ | 452 |
U.K. | U.S. | Other | |||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Interest cost | 109 | 123 | 158 | 99 | 96 | 111 | 27 | 26 | 29 | ||||||||||||||||||||||||||
Expected return on plan assets, net of administration expenses | (192 | ) | (199 | ) | (243 | ) | (144 | ) | (140 | ) | (156 | ) | (45 | ) | (47 | ) | (48 | ) | |||||||||||||||||
Amortization of prior-service cost | 1 | 1 | 2 | 2 | 2 | 2 | — | — | — | ||||||||||||||||||||||||||
Amortization of net actuarial loss | 28 | 31 | 31 | 59 | 50 | 50 | 12 | 11 | 10 | ||||||||||||||||||||||||||
Net periodic benefit (income) cost | (54 | ) | (44 | ) | (52 | ) | 16 | 8 | 7 | (6 | ) | (10 | ) | (9 | ) | ||||||||||||||||||||
Settlement expense | 37 | 125 | 61 | — | — | 158 | — | — | — | ||||||||||||||||||||||||||
Total net periodic benefit cost (income) | $ | (17 | ) | $ | 81 | $ | 9 | $ | 16 | $ | 8 | $ | 165 | $ | (6 | ) | $ | (10 | ) | $ | (9 | ) |
U.K. | U.S. (1) | Other | |||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||
Discount rate | 2.95% | 2.63% | 3.92 - 4.26% | 3.27 - 3.61% | 1.89 - 3.88% | 1.78 - 3.39% | |||||
Rate of compensation increase | 3.73 - 4.23% | 3.70 - 4.20% | N/A | N/A | 1.00 - 3.00% | 1.00 - 3.00% | |||||
Underlying price inflation | 1.88% | 1.87% | N/A | N/A | 2.00% | 2.00% |
(1) | U.S. pension plans are frozen and therefore not impacted by compensation increases or price inflation. |
U.K. | U.S. | Other | |||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||
Discount rate | 2.63% | 2.77% | 3.96% | 3.27 - 3.61% | 3.53 - 4.11% | 3.69 - 4.43% | 1.78 - 3.39% | 1.85 - 3.81% | 2.43 - 3.96% | ||||||||
Expected return on plan assets, net of administration expenses | 3.34% | 3.36% | 4.55% | 7.71% | 7.88% | 7.81% | 1.70 - 4.85% | 2.68 - 5.15% | 3.47 - 4.95% | ||||||||
Rate of compensation increase | 3.70 - 4.20% | 3.70 - 4.20% | 3.63 - 4.13% | N/A | N/A | N/A | 1.00 - 3.00% | 1.00 - 3.50% | 2.00 - 3.50% |
Fair Value Measurements Using | |||||||||||||||
Asset Category | Balance at December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Cash and cash equivalents (1) | $ | 130 | $ | 130 | $ | — | $ | — | |||||||
Equity investments: | |||||||||||||||
Large cap domestic | 294 | 294 | — | — | |||||||||||
Small cap domestic | 14 | 14 | — | — | |||||||||||
International | 76 | 76 | — | — | |||||||||||
Equity derivatives | (14 | ) | — | (14 | ) | — | |||||||||
Pooled funds: | |||||||||||||||
International (2) | 235 | — | — | — | |||||||||||
Large cap domestic (2) | 8 | — | — | — | |||||||||||
Small cap domestic (2) | 42 | — | — | — | |||||||||||
Fixed income investments: (3) | |||||||||||||||
Corporate bonds | 111 | — | 111 | — | |||||||||||
Government and agency bonds | 126 | 95 | 31 | — | |||||||||||
Asset-backed securities | 2 | — | 2 | — | |||||||||||
Pooled funds: | |||||||||||||||
Government and agency bonds (2) | 95 | — | — | — | |||||||||||
Corporate bonds (2) | 322 | — | — | — | |||||||||||
Other investments: | |||||||||||||||
Real estate and REITs (4) | 78 | 78 | — | — | |||||||||||
Alternative investments (2) (5) | 277 | — | — | — | |||||||||||
Total | $ | 1,796 | $ | 687 | $ | 130 | $ | — |
(1) | Consists of cash and institutional short-term investment funds. |
(2) | Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note. |
(3) | Consists of corporate and government bonds, asset-backed securities, and fixed-income derivatives. |
(4) | Consists of exchange traded real estate investment trusts (“REITs”). |
(5) | Consists of limited partnerships, private equity, and hedge funds. |
Fair Value Measurements Using | |||||||||||||||
Asset Category | Balance at December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Cash and cash equivalents (1) | $ | 56 | $ | 56 | $ | — | $ | — | |||||||
Equity investments: | |||||||||||||||
Large cap domestic | 313 | 313 | — | — | |||||||||||
Small cap domestic | 17 | 17 | — | — | |||||||||||
International | 90 | 90 | — | — | |||||||||||
Equity derivatives | 111 | — | 111 | — | |||||||||||
Pooled funds: | |||||||||||||||
International (2) | 270 | — | — | — | |||||||||||
Large cap domestic (2) | 12 | — | — | — | |||||||||||
Small cap domestic (2) | 114 | — | — | — | |||||||||||
Fixed income investments: (3) | |||||||||||||||
Corporate bonds | 110 | — | 110 | — | |||||||||||
Government and agency bonds | 148 | 114 | 34 | — | |||||||||||
Pooled funds: | |||||||||||||||
Corporate bonds (2) | 290 | — | — | — | |||||||||||
Other investments: | |||||||||||||||
Real estate and REITs (4) | 82 | 82 | — | — | |||||||||||
Alternative investments (2) (5) | 345 | — | — | — | |||||||||||
Total | $ | 1,958 | $ | 672 | $ | 255 | $ | — |
(1) | Consists of cash and institutional short-term investment funds. |
(2) | Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note. |
(3) | Consists of corporate and government bonds, asset-backed securities, and fixed-income derivatives. |
(4) | Consists of exchange traded REITs. |
(5) | Consists of limited partnerships, private equity, and hedge funds. |
Fair Value Measurements Using | |||||||||||||||
Balance at December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash and cash equivalents (1) | $ | 96 | $ | 96 | $ | — | $ | — | |||||||
Equity investments: | |||||||||||||||
Pooled funds: | |||||||||||||||
Global (2) | 209 | — | — | — | |||||||||||
Europe (2) | 3 | — | — | — | |||||||||||
Fixed income investments: (3) | |||||||||||||||
Derivatives (4) | (949 | ) | — | (949 | ) | — | |||||||||
Fixed income securities (5) | 2,446 | 2,079 | 367 | — | |||||||||||
Annuities | 1,688 | — | — | 1,688 | |||||||||||
Pooled funds: | |||||||||||||||
Derivatives (2) | 39 | — | — | — | |||||||||||
Fixed income securities (2) | 850 | — | — | — | |||||||||||
Other investments: | |||||||||||||||
Real estate (2) (6) | 149 | — | — | — | |||||||||||
Alternative investments (2) (7) | 694 | — | — | — | |||||||||||
Total | $ | 5,225 | $ | 2,175 | $ | (582 | ) | $ | 1,688 |
(1) | Consists of cash and institutional short-term investment funds. |
(2) | Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note. |
(3) | Consists of various equity, fixed income, commodity, and real estate mutual fund type investment vehicles. |
(4) | Consists of equity securities and equity derivatives, including repurchase agreements. |
(5) | Consists of corporate and government bonds. |
(6) | Consists of property funds and trusts holding direct real estate investments. |
(7) | Consists of limited partnerships, private equity, and hedge funds. |
Fair Value Measurements Using | |||||||||||||||
Balance at December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash and cash equivalents (1) | $ | 209 | $ | 209 | $ | — | $ | — | |||||||
Equity investments: | |||||||||||||||
Pooled funds: | |||||||||||||||
Global (2) | 401 | — | — | — | |||||||||||
Europe (2) | 6 | — | — | — | |||||||||||
Fixed income investments: (3) | |||||||||||||||
Derivatives (4) | (771 | ) | — | (771 | ) | — | |||||||||
Fixed income securities (5) | 2,787 | 2,362 | 425 | — | |||||||||||
Annuities | 1,909 | — | — | 1,909 | |||||||||||
Pooled funds: | |||||||||||||||
Derivatives (2) | 57 | — | — | — | |||||||||||
Fixed income securities (2) | 251 | — | — | — | |||||||||||
Other investments: | |||||||||||||||
Real estate (2) (6) | 146 | — | — | — | |||||||||||
Alternative investments (2) (7) | 911 | — | — | — | |||||||||||
Total | $ | 5,906 | $ | 2,571 | $ | (346 | ) | $ | 1,909 |
(1) | Consists of cash and institutional short-term investment funds. |
(2) | Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note. |
(3) | Consists of various equity, fixed income, commodity, and real estate mutual fund type investment vehicles. |
(4) | Consists of equity securities and equity derivatives, including repurchase agreements. |
(5) | Consists of corporate and government bonds. |
(6) | Consists of property funds and trusts holding direct real estate investments. |
(7) | Consists of limited partnerships, private equity, and hedge funds. |
Fair Value Measurements Using Level 3 Inputs | Annuities | ||
Balance at January 1, 2017 | $ | 1,773 | |
Actual return on plan assets: | |||
Relating to assets still held at December 31, 2017 | (66 | ) | |
Purchases, sales and settlements—net | 45 | ||
Foreign exchange | 157 | ||
Balance at December 31, 2017 | 1,909 | ||
Actual return on plan assets: | |||
Relating to assets still held at December 31, 2018 | (122 | ) | |
Purchases, sales and settlements—net | 7 | ||
Foreign exchange | (106 | ) | |
Balance at December 31, 2018 | $ | 1,688 |
Fair Value Measurements Using | |||||||||||||||
Balance at December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash and cash equivalents | $ | 10 | $ | 10 | $ | — | $ | — | |||||||
Equity investments: | |||||||||||||||
Pooled funds: | |||||||||||||||
Global (1) | 281 | — | — | — | |||||||||||
Fixed income investments: | |||||||||||||||
Derivatives (2) | 9 | — | 9 | — | |||||||||||
Pooled funds: | |||||||||||||||
Fixed income securities (1) | 766 | — | — | — | |||||||||||
Derivatives (1)(2) | 16 | — | — | — | |||||||||||
Other investments: | |||||||||||||||
Alternative investments (1) (3) | 63 | — | — | — | |||||||||||
Pooled funds: | |||||||||||||||
REITs (1) (4) | 10 | — | — | — | |||||||||||
Total | $ | 1,155 | $ | 10 | $ | 9 | $ | — |
(1) | Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note. |
(2) | Consists of corporate and government bonds and fixed-income derivatives. |
(3) | Consists of limited partnerships, private equity, and hedge funds. |
(4) | Consists of property funds and trusts holding direct real estate investments. |
Fair Value Measurements Using | |||||||||||||||
Balance at December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash and cash equivalents | $ | 11 | $ | 11 | $ | — | $ | — | |||||||
Equity investments: | |||||||||||||||
Pooled funds: | |||||||||||||||
Global (1) | 370 | — | — | — | |||||||||||
North America (1) | 26 | — | — | — | |||||||||||
Fixed income investments: | |||||||||||||||
Fixed income securities (2) | 211 | — | 211 | — | |||||||||||
Derivatives (2) | 40 | — | 40 | — | |||||||||||
Pooled funds: | |||||||||||||||
Fixed income securities (1) | 566 | — | — | — | |||||||||||
Other investments: | |||||||||||||||
Alternative investments (1) (3) | 26 | — | — | — | |||||||||||
Pooled funds: | |||||||||||||||
REITs (1) (4) | 6 | — | — | — | |||||||||||
Total | $ | 1,256 | $ | 11 | $ | 251 | $ | — |
(1) | Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note. |
(2) | Consists of corporate and government bonds and fixed-income derivatives. |
(3) | Consists of limited partnerships, private equity, and hedge funds. |
(4) | Consists of property funds and trusts holding direct real estate investments. |
U.K. | U.S. | Other | ||||||||||
2019 | $ | 137 | $ | 178 | $ | 42 | ||||||
2020 | 139 | 182 | 43 | |||||||||
2021 | 144 | 185 | 44 | |||||||||
2022 | 149 | 187 | 45 | |||||||||
2023 | 152 | 177 | 46 | |||||||||
2024 – 2028 | 795 | 879 | 248 |
2018 | 2017 | ||||||
Accumulated projected benefit obligation | $ | 91 | $ | 99 | |||
Fair value of plan assets | 14 | 17 | |||||
Funded status | (77 | ) | (82 | ) | |||
Unrecognized prior-service credit | (1 | ) | (1 | ) | |||
Unrecognized (gain) loss | (6 | ) | (3 | ) | |||
Net amount recognized | $ | (84 | ) | $ | (86 | ) |
2018 | 2017 | 2016 | |||
Net periodic benefit cost recognized (millions) | $3 | $1 | $5 | ||
Weighted-average discount rate used to determine future benefit obligations | 3.91 - 4.26% | 3.32 - 3.64% | 3.71 - 4.15% | ||
Weighted-average discount rate used to determine net periodic benefit costs | 3.32 - 3.64% | 3.71 - 4.15% | 3.99 - 4.33% |
• | To contribute $5 million to fund significant other postretirement benefit plans during 2019. |
• | Estimated future benefit payments will be approximately $5 million each year for 2019 through 2023, and $25 million in aggregate for 2024-2028. |
Years ended December 31 | 2018 | 2017 | 2016 | ||||||||
Restricted share units (“RSUs”) | $ | 186 | $ | 182 | $ | 176 | |||||
Performance share awards ("PSAs") | 143 | 127 | 120 | ||||||||
Employee share purchase plans | 9 | 10 | 10 | ||||||||
Total share-based compensation expense | 338 | 319 | 306 | ||||||||
Tax benefit | 74 | 73 | 90 | ||||||||
Share-based compensation expense, net of tax | $ | 264 | $ | 246 | $ | 216 |
2018 | 2017 | 2016 | ||||||||||||||||||
Years ended December 31 | Shares | Fair Value at Date of Grant | Shares | Fair Value at Date of Grant | Shares | Fair Value at Date of Grant | ||||||||||||||
Non-vested at beginning of year | 4,849 | $ | 104 | 6,195 | $ | 89 | 7,167 | $ | 77 | |||||||||||
Granted | 1,500 | 141 | 1,700 | 123 | 2,252 | 101 | ||||||||||||||
Vested | (1,943 | ) | 97 | (2,407 | ) | 82 | (2,845 | ) | 70 | |||||||||||
Forfeited | (198 | ) | 114 | (639 | ) | 93 | (379 | ) | 82 | |||||||||||
Non-vested at end of year | 4,208 | $ | 120 | 4,849 | $ | 104 | 6,195 | $ | 89 |
2018 | 2017 | 2016 | |||||||||
Target PSAs granted during period | 564 | 548 | 750 | ||||||||
Weighted average fair value per share at date of grant | $ | 134 | $ | 114 | $ | 100 | |||||
Number of shares that would be issued based on current performance levels | 840 | 1,068 | 1,122 | ||||||||
Unamortized expense, based on current performance levels | $ | 81 | $ | 44 | $ | — |
Notional Amount | Net Amount of Derivative Assets Presented in the Statements of Financial Position (1) | Net Amount of Derivative Liabilities Presented in the Statements of Financial Position (2) | |||||||||||||||||||||
As of December 31 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||
Accounted for as hedges | $ | 646 | $ | 701 | $ | 17 | $ | 31 | $ | 2 | $ | 3 | |||||||||||
Not accounted for as hedges (3) | 269 | 254 | 1 | 1 | 6 | 3 | |||||||||||||||||
Total | $ | 915 | $ | 955 | $ | 18 | $ | 32 | $ | 8 | $ | 6 |
(1) | Included within Other current assets ($3 million in 2018 and $9 million in 2017) or Other non-current assets ($15 million in 2018 and $23 million in 2017). |
(2) | Included within Other current liabilities ($5 million in 2018 and $3 million in 2017) or Other non-current liabilities ($3 million in 2018 and $3 million in 2017). |
(3) | These contracts typically are for 30-day durations and executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date. |
2018 | 2017 | 2016 | ||||||||||
Gain (Loss) recognized in Accumulated other comprehensive loss | $ | (18 | ) | $ | 18 | $ | (25 | ) | ||||
Location of future reclassification from Accumulated other comprehensive loss | ||||||||||||
Compensation and benefits | $ | (5 | ) | $ | 12 | $ | 8 | |||||
Other general expenses | $ | 3 | $ | 4 | $ | (13 | ) | |||||
Other income (expense) (1) | $ | (16 | ) | $ | 2 | $ | (20 | ) |
(1) | With the adoption of new derivative guidance in 2019, gains (losses) on derivatives accounted for as hedges will be recognized in Total revenue in the Company’s Consolidated Statements of Income rather than Other income (expense). Refer to Note 2 “Summary of Significant Accounting Principles and Practices” for additional details. |
Years Ended December 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Compensation and benefits | $ | 1 | $ | 14 | $ | 2 | ||||||
Other general expenses | (2 | ) | (5 | ) | (4 | ) | ||||||
Interest expense | (2 | ) | (1 | ) | (1 | ) | ||||||
Other income (expense) | (8 | ) | (9 | ) | (7 | ) | ||||||
Total | $ | (11 | ) | $ | (1 | ) | $ | (10 | ) |
• | 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 December 31, 2018 | 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) | $ | 1,759 | $ | 1,759 | $ | — | $ | — | |||||||
Other investments | |||||||||||||||
Government bonds | $ | 1 | $ | — | $ | 1 | $ | — | |||||||
Equity investments | $ | 2 | $ | — | $ | 2 | $ | — | |||||||
Derivatives (2) | |||||||||||||||
Gross foreign exchange contracts | $ | 21 | $ | — | $ | 21 | $ | — | |||||||
Liabilities | |||||||||||||||
Derivatives (2) | |||||||||||||||
Gross foreign exchange contracts | $ | 12 | $ | — | $ | 12 | $ | — |
(1) | Included within Fiduciary assets or Short-term investments in the Consolidated Statements of Financial Position, depending on their nature and initial maturity. |
(2) | Refer to Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. |
Fair Value Measurements Using | |||||||||||||||
Balance at December 31, 2017 | 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) | $ | 1,847 | $ | 1,847 | $ | — | $ | — | |||||||
Other investments | |||||||||||||||
Government bonds | $ | 1 | $ | — | $ | 1 | $ | — | |||||||
Equity investments | $ | 4 | $ | — | $ | 4 | $ | — | |||||||
Derivatives (2) | |||||||||||||||
Gross foreign exchange contracts | $ | 33 | $ | — | $ | 33 | $ | — | |||||||
Liabilities | |||||||||||||||
Derivatives (2) | |||||||||||||||
Gross foreign exchange contracts | $ | 6 | $ | — | $ | 6 | $ | — |
(1) | Included within Fiduciary assets or Short-term investments in the Consolidated Statements of Financial Position, depending on their nature and initial maturity. |
(2) | Refer to Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. |
2018 | 2017 | ||||||||||||||
As of December 31 | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 299 | $ | 301 | |||||||
Long-term debt | $ | 5,993 | $ | 6,159 | $ | 5,667 | $ | 6,267 |
Years ended December 31 | Total | United States | Americas other than U.S. | United Kingdom | Europe, Middle East, & Africa | Asia Pacific | |||||||||||||||||
2018 | $ | 588 | $ | 288 | $ | 44 | $ | 58 | $ | 101 | $ | 97 | |||||||||||
2017 | $ | 564 | $ | 239 | $ | 47 | $ | 68 | $ | 114 | $ | 96 |
Year Ended December 31, 2018 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Revenue | ||||||||||||||||||||
Total revenue | $ | — | $ | — | $ | 10,770 | $ | — | $ | 10,770 | ||||||||||
Expenses | ||||||||||||||||||||
Compensation and benefits | 74 | (1 | ) | 6,030 | — | 6,103 | ||||||||||||||
Information technology | — | — | 484 | — | 484 | |||||||||||||||
Premises | — | — | 370 | — | 370 | |||||||||||||||
Depreciation of fixed assets | — | — | 176 | — | 176 | |||||||||||||||
Amortization and impairment of intangible assets | — | — | 593 | — | 593 | |||||||||||||||
Other general expenses (income) | 4 | 64 | 1,432 | — | 1,500 | |||||||||||||||
Total operating expenses | 78 | 63 | 9,085 | — | 9,226 | |||||||||||||||
Operating income (loss) | (78 | ) | (63 | ) | 1,685 | — | 1,544 | |||||||||||||
Interest income | — | 58 | — | (53 | ) | 5 | ||||||||||||||
Interest expense | (203 | ) | (101 | ) | (27 | ) | 53 | (278 | ) | |||||||||||
Intercompany interest income (expense) | 15 | (514 | ) | 499 | — | — | ||||||||||||||
Intercompany other income (expense) | 97 | (399 | ) | 302 | — | — | ||||||||||||||
Other income (expense) | 9 | (48 | ) | 35 | (21 | ) | (25 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes | (160 | ) | (1,067 | ) | 2,494 | (21 | ) | 1,246 | ||||||||||||
Income tax expense (benefit) | (60 | ) | (192 | ) | 398 | — | 146 | |||||||||||||
Net income (loss) from continuing operations | (100 | ) | (875 | ) | 2,096 | (21 | ) | 1,100 | ||||||||||||
Net Income from discontinued operations | — | — | 74 | — | 74 | |||||||||||||||
Net income (loss) before equity in earnings of subsidiaries | (100 | ) | (875 | ) | 2,170 | (21 | ) | 1,174 | ||||||||||||
Equity in earnings of subsidiaries | 1,255 | 1,004 | 129 | (2,388 | ) | — | ||||||||||||||
Net income | 1,155 | 129 | 2,299 | (2,409 | ) | 1,174 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 40 | — | 40 | |||||||||||||||
Net income attributable to Aon shareholders | $ | 1,155 | $ | 129 | $ | 2,259 | $ | (2,409 | ) | $ | 1,134 |
Year Ended December 31, 2017 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Revenue | ||||||||||||||||||||
Total revenue | $ | — | $ | — | $ | 9,998 | $ | — | $ | 9,998 | ||||||||||
Expenses | ||||||||||||||||||||
Compensation and benefits | 150 | 26 | 5,827 | — | 6,003 | |||||||||||||||
Information technology | — | — | 419 | — | 419 | |||||||||||||||
Premises | — | — | 348 | — | 348 | |||||||||||||||
Depreciation of fixed assets | — | — | 187 | — | 187 | |||||||||||||||
Amortization and impairment of intangible assets | — | — | 704 | — | 704 | |||||||||||||||
Other general expenses (income) | 12 | (6 | ) | 1,266 | — | 1,272 | ||||||||||||||
Total operating expenses | 162 | 20 | 8,751 | — | 8,933 | |||||||||||||||
Operating income (loss) | (162 | ) | (20 | ) | 1,247 | — | 1,065 | |||||||||||||
Interest income | — | 52 | 4 | (29 | ) | 27 | ||||||||||||||
Interest expense | (202 | ) | (94 | ) | (15 | ) | 29 | (282 | ) | |||||||||||
Intercompany interest income (expense) | 14 | (543 | ) | 529 | — | — | ||||||||||||||
Intercompany other income (expense) | 247 | (411 | ) | 164 | — | — | ||||||||||||||
Other income (expense) | (27 | ) | 12 | (128 | ) | 18 | (125 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes | (130 | ) | (1,004 | ) | 1,801 | 18 | 685 | |||||||||||||
Income tax expense (benefit) | (43 | ) | (110 | ) | 403 | — | 250 | |||||||||||||
Net income (loss) from continuing operations | (87 | ) | (894 | ) | 1,398 | 18 | 435 | |||||||||||||
Net Income from discontinued operations | — | — | 828 | — | 828 | |||||||||||||||
Net income (loss) before equity in earnings of subsidiaries | (87 | ) | (894 | ) | 2,226 | 18 | 1,263 | |||||||||||||
Equity in earnings of subsidiaries | 1,295 | 1,121 | 227 | (2,643 | ) | — | ||||||||||||||
Net income | 1,208 | 227 | 2,453 | (2,625 | ) | 1,263 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 37 | — | 37 | |||||||||||||||
Net income attributable to Aon shareholders | $ | 1,208 | $ | 227 | $ | 2,416 | $ | (2,625 | ) | $ | 1,226 |
Year Ended December 31, 2016 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Revenue | ||||||||||||||||||||
Total revenue | $ | — | $ | — | $ | 9,409 | $ | — | $ | 9,409 | ||||||||||
Expenses | ||||||||||||||||||||
Compensation and benefits | 130 | 6 | 5,378 | — | 5,514 | |||||||||||||||
Information technology | — | — | 386 | — | 386 | |||||||||||||||
Premises | — | — | 343 | — | 343 | |||||||||||||||
Depreciation of fixed assets | — | — | 162 | — | 162 | |||||||||||||||
Amortization and impairment of intangible assets | — | 157 | — | 157 | ||||||||||||||||
Other general expenses (income) | — | 2 | 1,034 | — | 1,036 | |||||||||||||||
Total operating expenses | 130 | 8 | 7,460 | — | 7,598 | |||||||||||||||
Operating income (loss) | (130 | ) | (8 | ) | 1,949 | — | 1,811 | |||||||||||||
Interest income | — | 16 | 22 | (29 | ) | 9 | ||||||||||||||
Interest expense | (196 | ) | (101 | ) | (14 | ) | 29 | (282 | ) | |||||||||||
Intercompany interest income (expense) | 14 | (541 | ) | 527 | — | — | ||||||||||||||
Intercompany other income (expense) | 274 | (361 | ) | 87 | — | — | ||||||||||||||
Other income (expense) | 15 | (170 | ) | 36 | (18 | ) | (137 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes | (23 | ) | (1,165 | ) | 2,607 | (18 | ) | 1,401 | ||||||||||||
Income tax expense (benefit) | (55 | ) | (325 | ) | 528 | — | 148 | |||||||||||||
Net income (loss) from continuing operations | 32 | (840 | ) | 2,079 | (18 | ) | 1,253 | |||||||||||||
Net Income from discontinued operations | — | — | 177 | — | 177 | |||||||||||||||
Net income (loss) before equity in earnings of subsidiaries | 32 | (840 | ) | 2,256 | (18 | ) | 1,430 | |||||||||||||
Equity in earnings of subsidiaries | 1,382 | 1,249 | 409 | (3,040 | ) | — | ||||||||||||||
Net income | 1,414 | 409 | 2,665 | (3,058 | ) | 1,430 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 34 | — | 34 | |||||||||||||||
Net income attributable to Aon shareholders | $ | 1,414 | $ | 409 | $ | 2,631 | $ | (3,058 | ) | $ | 1,396 |
Year Ended December 31, 2018 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Net income | $ | 1,155 | $ | 129 | $ | 2,299 | $ | (2,409 | ) | $ | 1,174 | |||||||||
Less: Net income attributable to noncontrolling interests | — | — | 40 | — | 40 | |||||||||||||||
Net income attributable to Aon shareholders | 1,155 | 129 | 2,259 | (2,409 | ) | 1,134 | ||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Change in fair value of financial instruments | — | — | 11 | — | 11 | |||||||||||||||
Foreign currency translation adjustments | — | — | (465 | ) | 21 | (444 | ) | |||||||||||||
Postretirement benefit obligation | — | (2 | ) | 19 | — | 17 | ||||||||||||||
Total other comprehensive income (loss) | — | (2 | ) | (435 | ) | 21 | (416 | ) | ||||||||||||
Equity in other comprehensive income (loss) of subsidiaries, net of tax | (433 | ) | (415 | ) | (417 | ) | 1,265 | — | ||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | — | — | (4 | ) | — | (4 | ) | |||||||||||||
Total other comprehensive income (loss) attributable to Aon shareholders | (433 | ) | (417 | ) | (848 | ) | 1,286 | (412 | ) | |||||||||||
Comprehensive income (loss) attributable to Aon shareholders | $ | 722 | $ | (288 | ) | $ | 1,411 | $ | (1,123 | ) | $ | 722 |
Year Ended December 31, 2017 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Net income | $ | 1,208 | $ | 227 | $ | 2,453 | $ | (2,625 | ) | $ | 1,263 | |||||||||
Less: Net income attributable to noncontrolling interests | — | — | 37 | — | 37 | |||||||||||||||
Net income attributable to Aon shareholders | 1,208 | 227 | 2,416 | (2,625 | ) | 1,226 | ||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Change in fair value of financial instruments | — | 3 | 9 | — | 12 | |||||||||||||||
Foreign currency translation adjustments | — | — | 408 | (18 | ) | 390 | ||||||||||||||
Postretirement benefit obligation | — | (101 | ) | 120 | — | 19 | ||||||||||||||
Total other comprehensive income (loss) | — | (98 | ) | 537 | (18 | ) | 421 | |||||||||||||
Equity in other comprehensive income (loss) of subsidiaries, net of tax | 434 | 515 | 417 | (1,366 | ) | — | ||||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | — | — | 5 | — | 5 | |||||||||||||||
Total other comprehensive income (loss) attributable to Aon shareholders | 434 | 417 | 949 | (1,384 | ) | 416 | ||||||||||||||
Comprehensive income (loss) attributable to Aon shareholders | $ | 1,642 | $ | 644 | $ | 3,365 | $ | (4,009 | ) | $ | 1,642 |
Year Ended December 31, 2016 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Net income | $ | 1,414 | $ | 409 | $ | 2,665 | $ | (3,058 | ) | $ | 1,430 | |||||||||
Less: Net income attributable to noncontrolling interests | — | — | 34 | — | 34 | |||||||||||||||
Net income attributable to Aon shareholders | 1,414 | 409 | 2,631 | (3,058 | ) | 1,396 | ||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Change in fair value of financial instruments | — | (1 | ) | (11 | ) | — | (12 | ) | ||||||||||||
Foreign currency translation adjustments | (2 | ) | 21 | (532 | ) | 18 | (495 | ) | ||||||||||||
Postretirement benefit obligation | — | 68 | (52 | ) | — | 16 | ||||||||||||||
Total other comprehensive income (loss) | (2 | ) | 88 | (595 | ) | 18 | (491 | ) | ||||||||||||
Equity in other comprehensive income (loss) of subsidiaries, net of tax | (505 | ) | (547 | ) | (459 | ) | 1,511 | — | ||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | — | — | (2 | ) | — | (2 | ) | |||||||||||||
Total other comprehensive income (loss) attributable to Aon shareholders | (507 | ) | (459 | ) | (1,052 | ) | 1,529 | (489 | ) | |||||||||||
Comprehensive income (loss) attributable to Aon shareholders | $ | 907 | $ | (50 | ) | $ | 1,579 | $ | (1,529 | ) | $ | 907 |
As of December 31, 2018 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 862 | $ | 575 | $ | (781 | ) | $ | 656 | |||||||||
Short-term investments | — | 56 | 116 | — | 172 | |||||||||||||||
Receivables, net | — | — | 2,760 | — | 2,760 | |||||||||||||||
Fiduciary assets | — | — | 10,166 | — | 10,166 | |||||||||||||||
Intercompany receivables | 191 | 897 | 11,454 | (12,542 | ) | — | ||||||||||||||
Other current assets | — | 16 | 602 | — | 618 | |||||||||||||||
Total current assets | 191 | 1,831 | 25,673 | (13,323 | ) | 14,372 | ||||||||||||||
Goodwill | — | — | 8,171 | — | 8,171 | |||||||||||||||
Intangible assets, net | — | — | 1,149 | — | 1,149 | |||||||||||||||
Fixed assets, net | — | — | 588 | — | 588 | |||||||||||||||
Deferred tax assets | 94 | 467 | 144 | (144 | ) | 561 | ||||||||||||||
Intercompany receivables | 403 | 261 | 7,405 | (8,069 | ) | — | ||||||||||||||
Prepaid pension | — | 5 | 1,128 | — | 1,133 | |||||||||||||||
Other non-current assets | 1 | 30 | 417 | — | 448 | |||||||||||||||
Investment in subsidiary | 8,433 | 19,065 | (897 | ) | (26,601 | ) | — | |||||||||||||
Total assets | $ | 9,122 | $ | 21,659 | $ | 43,778 | $ | (48,137 | ) | $ | 26,422 | |||||||||
Liabilities and equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 274 | $ | 70 | $ | 2,380 | $ | (781 | ) | $ | 1,943 | |||||||||
Short-term debt and current portion of long-term debt | 250 | — | 1 | — | 251 | |||||||||||||||
Fiduciary liabilities | — | — | 10,166 | — | 10,166 | |||||||||||||||
Intercompany payables | 213 | 11,695 | 634 | (12,542 | ) | — | ||||||||||||||
Other current liabilities | — | 69 | 867 | — | 936 | |||||||||||||||
Total current liabilities | 737 | 11,834 | 14,048 | (13,323 | ) | 13,296 | ||||||||||||||
Long-term debt | 4,231 | 1,762 | — | — | 5,993 | |||||||||||||||
Deferred tax liabilities | — | — | 325 | (144 | ) | 181 | ||||||||||||||
Pension, other postretirement and other post-employment liabilities | — | 1,275 | 361 | — | 1,636 | |||||||||||||||
Intercompany payables | — | 7,570 | 499 | (8,069 | ) | — | ||||||||||||||
Other non-current liabilities | 3 | 115 | 979 | — | 1,097 | |||||||||||||||
Total liabilities | 4,971 | 22,556 | 16,212 | (21,536 | ) | 22,203 | ||||||||||||||
Total Aon shareholders' equity | 4,151 | (897 | ) | 27,498 | (26,601 | ) | 4,151 | |||||||||||||
Noncontrolling interests | — | — | 68 | — | 68 | |||||||||||||||
Total equity | 4,151 | (897 | ) | 27,566 | (26,601 | ) | 4,219 | |||||||||||||
Total liabilities and equity | $ | 9,122 | $ | 21,659 | $ | 43,778 | $ | (48,137 | ) | $ | 26,422 |
As of December 31, 2017 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | 2,524 | $ | 793 | $ | (2,562 | ) | $ | 756 | |||||||||
Short-term investments | — | 355 | 174 | — | 529 | |||||||||||||||
Receivables, net | — | 2 | 2,476 | — | 2,478 | |||||||||||||||
Fiduciary assets | — | — | 9,625 | — | 9,625 | |||||||||||||||
Intercompany receivables | 165 | 1,046 | 10,824 | (12,035 | ) | — | ||||||||||||||
Other current assets | 1 | 29 | 259 | — | 289 | |||||||||||||||
Total current assets | 167 | 3,956 | 24,151 | (14,597 | ) | 13,677 | ||||||||||||||
Goodwill | — | — | 8,358 | — | 8,358 | |||||||||||||||
Intangible assets, net | — | — | 1,733 | — | 1,733 | |||||||||||||||
Fixed assets, net | — | — | 564 | — | 564 | |||||||||||||||
Deferred tax assets | 99 | 396 | 143 | (249 | ) | 389 | ||||||||||||||
Intercompany receivables | 414 | 261 | 8,232 | (8,907 | ) | — | ||||||||||||||
Prepaid pension | — | 6 | 1,054 | — | 1,060 | |||||||||||||||
Other non-current assets | 1 | 35 | 271 | — | 307 | |||||||||||||||
Investment in subsidiary | 8,884 | 17,799 | (91 | ) | (26,592 | ) | — | |||||||||||||
Total assets | $ | 9,565 | $ | 22,453 | $ | 44,415 | $ | (50,345 | ) | $ | 26,088 | |||||||||
Liabilities and equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 574 | $ | 36 | $ | 3,913 | $ | (2,562 | ) | $ | 1,961 | |||||||||
Short-term debt and current portion of long-term debt | — | — | 299 | — | 299 | |||||||||||||||
Fiduciary liabilities | — | — | 9,625 | — | 9,625 | |||||||||||||||
Intercompany payables | 130 | 11,149 | 756 | (12,035 | ) | — | ||||||||||||||
Other current liabilities | 16 | 64 | 790 | — | 870 | |||||||||||||||
Total current liabilities | 720 | 11,249 | 15,383 | (14,597 | ) | 12,755 | ||||||||||||||
Long-term debt | 4,251 | 1,415 | 1 | — | 5,667 | |||||||||||||||
Deferred tax liabilities | — | — | 376 | (249 | ) | 127 | ||||||||||||||
Pension, other postretirement and other post-employment liabilities | — | 1,391 | 398 | — | 1,789 | |||||||||||||||
Intercompany payables | — | 8,398 | 509 | (8,907 | ) | — | ||||||||||||||
Other non-current liabilities | 11 | 91 | 1,000 | — | 1,102 | |||||||||||||||
Total liabilities | 4,982 | 22,544 | 17,667 | (23,753 | ) | 21,440 | ||||||||||||||
Total Aon shareholders' equity | 4,583 | (91 | ) | 26,683 | (26,592 | ) | 4,583 | |||||||||||||
Noncontrolling interests | — | — | 65 | — | 65 | |||||||||||||||
Total equity | 4,583 | (91 | ) | 26,748 | (26,592 | ) | 4,648 | |||||||||||||
Total liabilities and equity | $ | 9,565 | $ | 22,453 | $ | 44,415 | $ | (50,345 | ) | $ | 26,088 |
Year Ended December 31, 2018 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Cash provided by (used for) operating activities - continuing operations | $ | 1,575 | $ | 3 | $ | 3,608 | $ | (3,500 | ) | $ | 1,686 | |||||||||
Cash provided by operating activities - discontinued operations | — | — | — | — | — | |||||||||||||||
Cash provided by (used for) operating activities | 1,575 | 3 | 3,608 | (3,500 | ) | 1,686 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from investments | — | 24 | 955 | (908 | ) | 71 | ||||||||||||||
Payments for investments | (13 | ) | (47 | ) | (33 | ) | 13 | (80 | ) | |||||||||||
Net purchases (sales) of short-term investments - non-fiduciary | — | 299 | 49 | — | 348 | |||||||||||||||
Acquisition of businesses, net of cash acquired | — | — | (58 | ) | — | (58 | ) | |||||||||||||
Sale of businesses, net of cash sold | — | — | (10 | ) | — | (10 | ) | |||||||||||||
Capital expenditures | — | — | (240 | ) | — | (240 | ) | |||||||||||||
Cash provided by (used for) investing activities - continuing operations | (13 | ) | 276 | 663 | (895 | ) | 31 | |||||||||||||
Cash used for investing activities - discontinued operations | — | — | — | — | — | |||||||||||||||
Cash provided by (used for) investing activities | (13 | ) | 276 | 663 | (895 | ) | 31 | |||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Share repurchase | (1,470 | ) | — | — | — | (1,470 | ) | |||||||||||||
Advances from (to) affiliates | 156 | (2,291 | ) | (4,041 | ) | 6,176 | — | |||||||||||||
Issuance of shares for employee benefit plans | (149 | ) | — | — | — | (149 | ) | |||||||||||||
Issuance of debt | 1,723 | 4,028 | 3 | — | 5,754 | |||||||||||||||
Repayment of debt | (1,441 | ) | (3,678 | ) | (298 | ) | — | (5,417 | ) | |||||||||||
Cash dividends to shareholders | (382 | ) | — | — | — | (382 | ) | |||||||||||||
Noncontrolling interests and other financing activities | — | (35 | ) | — | (35 | ) | ||||||||||||||
Cash provided by (used for) financing activities - continuing operations | (1,563 | ) | (1,941 | ) | (4,371 | ) | 6,176 | (1,699 | ) | |||||||||||
Cash used for financing activities - discontinued operations | — | — | — | — | — | |||||||||||||||
Cash provided by (used for) financing activities | (1,563 | ) | (1,941 | ) | (4,371 | ) | 6,176 | (1,699 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (118 | ) | — | (118 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | (1 | ) | (1,662 | ) | (218 | ) | 1,781 | (100 | ) | |||||||||||
Cash and cash equivalents at beginning of year | 1 | 2,524 | 793 | (2,562 | ) | 756 | ||||||||||||||
Cash and cash equivalents at end of year | $ | — | $ | 862 | $ | 575 | $ | (781 | ) | $ | 656 |
Year Ended December 31, 2017 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Cash provided by (used for) operating activities - continuing operations | $ | 2,787 | $ | 503 | $ | 2,010 | $ | (4,631 | ) | $ | 669 | |||||||||
Cash provided by operating activities - discontinued operations | — | — | 65 | — | 65 | |||||||||||||||
Cash provided by (used for) operating activities | 2,787 | 503 | 2,075 | (4,631 | ) | 734 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from investments | 224 | 587 | 582 | (1,325 | ) | 68 | ||||||||||||||
Payments for investments | (261 | ) | (29 | ) | (576 | ) | 802 | (64 | ) | |||||||||||
Net purchases (sales) of short-term investments - non-fiduciary | — | (215 | ) | (17 | ) | — | (232 | ) | ||||||||||||
Acquisition of businesses, net of cash acquired | — | — | (1,029 | ) | — | (1,029 | ) | |||||||||||||
Sale of businesses, net of cash sold | — | — | 4,246 | — | 4,246 | |||||||||||||||
Capital expenditures | — | — | (183 | ) | — | (183 | ) | |||||||||||||
Cash provided by (used for) investing activities - continuing operations | (37 | ) | 343 | 3,023 | (523 | ) | 2,806 | |||||||||||||
Cash used for investing activities - discontinued operations | — | — | (19 | ) | — | (19 | ) | |||||||||||||
Cash provided by (used for) investing activities | (37 | ) | 343 | 3,004 | (523 | ) | 2,787 | |||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Share repurchase | (2,399 | ) | — | — | — | (2,399 | ) | |||||||||||||
Advances from (to) affiliates | 426 | 95 | (4,975 | ) | 4,454 | — | ||||||||||||||
Issuance of shares for employee benefit plans | (121 | ) | — | — | — | (121 | ) | |||||||||||||
Issuance of debt | 544 | 1,100 | 10 | — | 1,654 | |||||||||||||||
Repayment of debt | (835 | ) | (1,150 | ) | (14 | ) | — | (1,999 | ) | |||||||||||
Cash dividends to shareholders | (364 | ) | — | — | — | (364 | ) | |||||||||||||
Noncontrolling interests and other financing activities | — | — | (36 | ) | — | (36 | ) | |||||||||||||
Cash provided by (used for) financing activities - continuing operations | (2,749 | ) | 45 | (5,015 | ) | 4,454 | (3,265 | ) | ||||||||||||
Cash used for financing activities - discontinued operations | — | — | — | — | — | |||||||||||||||
Cash provided by (used for) financing activities | (2,749 | ) | 45 | (5,015 | ) | 4,454 | (3,265 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 69 | — | 69 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 1 | 891 | 133 | (700 | ) | 325 | ||||||||||||||
Cash and cash equivalents at beginning of year (1) | — | 1,633 | 660 | (1,862 | ) | 431 | ||||||||||||||
Cash and cash equivalents at end of year (2) | $ | 1 | $ | 2,524 | $ | 793 | $ | (2,562 | ) | $ | 756 |
(1) | Includes $5 million of discontinued operations at December 31, 2016. |
(2) | Includes $0 million of discontinued operations at December 31, 2017 |
Year Ended December 31, 2016 | ||||||||||||||||||||
(millions) | Aon plc | Aon Corporation | Other Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Cash provided by (used for) operating activities - continuing operations | $ | 2,705 | $ | (536 | ) | $ | 2,768 | $ | (3,108 | ) | $ | 1,829 | ||||||||
Cash provided by operating activities - discontinued operations | — | — | 497 | — | 497 | |||||||||||||||
Cash provided by (used for) operating activities | 2,705 | (536 | ) | 3,265 | (3,108 | ) | 2,326 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from investments | — | 316 | 15 | (288 | ) | 43 | ||||||||||||||
Payments for investments | — | (35 | ) | (29 | ) | — | (64 | ) | ||||||||||||
Net purchases (sales) of short-term investments - non-fiduciary | — | 70 | (9 | ) | — | 61 | ||||||||||||||
Acquisition of businesses, net of cash acquired | — | (335 | ) | (608 | ) | 64 | (879 | ) | ||||||||||||
Sale of businesses, net of cash sold | — | — | 171 | (64 | ) | 107 | ||||||||||||||
Capital expenditures | — | — | (156 | ) | — | (156 | ) | |||||||||||||
Cash provided by (used for) investing activities - continuing operations | — | 16 | (616 | ) | (288 | ) | (888 | ) | ||||||||||||
Cash used for investing activities - discontinued operations | — | — | (66 | ) | — | (66 | ) | |||||||||||||
Cash provided by (used for) investing activities | — | 16 | (682 | ) | (288 | ) | (954 | ) | ||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Share repurchase | (1,257 | ) | — | — | — | (1,257 | ) | |||||||||||||
Advances from (to) affiliates | (2,008 | ) | 570 | (3,037 | ) | 4,475 | — | |||||||||||||
Issuance of shares for employee benefit plans | (129 | ) | — | — | — | (129 | ) | |||||||||||||
Issuance of debt | 1,879 | 1,588 | — | — | 3,467 | |||||||||||||||
Repayment of debt | (845 | ) | (2,088 | ) | (12 | ) | — | (2,945 | ) | |||||||||||
Cash dividends to shareholders | (345 | ) | — | — | — | (345 | ) | |||||||||||||
Noncontrolling interests and other financing activities | — | — | (77 | ) | — | (77 | ) | |||||||||||||
Cash provided by (used for) financing activities - continuing operations | (2,705 | ) | 70 | (3,126 | ) | 4,475 | (1,286 | ) | ||||||||||||
Cash used for financing activities - discontinued operations | — | — | — | — | — | |||||||||||||||
Cash provided by (used for) financing activities | (2,705 | ) | 70 | (3,126 | ) | 4,475 | (1,286 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (39 | ) | — | (39 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | — | (450 | ) | (582 | ) | 1,079 | 47 | |||||||||||||
Cash and cash equivalents at beginning of year (1) | — | 2,083 | 1,242 | (2,941 | ) | 384 | ||||||||||||||
Cash and cash equivalents at end of year (2) | $ | — | $ | 1,633 | $ | 660 | $ | (1,862 | ) | $ | 431 |
(1) | Includes $2 million of discontinued operations at December 31, 2015. |
(2) | Includes $5 million of discontinued operations at December 31, 2016 |
1Q | 2Q | 3Q | 4Q | 2018 | |||||||||||||||
Income Statement Data | |||||||||||||||||||
Total revenue | $ | 3,090 | $ | 2,561 | $ | 2,349 | $ | 2,770 | $ | 10,770 | |||||||||
Operating income | 799 | (16 | ) | 262 | 499 | 1,544 | |||||||||||||
Net income from continuing operations | 604 | 57 | 155 | 284 | 1,100 | ||||||||||||||
Income from discontinued operations, net of tax | 6 | 1 | (2 | ) | 69 | 74 | |||||||||||||
Net income | 610 | 58 | 153 | 353 | 1,174 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | 16 | 10 | 6 | 8 | 40 | ||||||||||||||
Net income attributable to Aon shareholders | $ | 594 | $ | 48 | $ | 147 | $ | 345 | $ | 1,134 | |||||||||
Per Share Data | |||||||||||||||||||
Basic net income per share attributable to Aon shareholders | |||||||||||||||||||
Continuing operations | $ | 2.37 | $ | 0.19 | $ | 0.61 | $ | 1.14 | $ | 4.32 | |||||||||
Discontinued operations | 0.02 | 0.01 | (0.01 | ) | 0.28 | 0.30 | |||||||||||||
Net income | $ | 2.39 | $ | 0.20 | $ | 0.60 | $ | 1.42 | $ | 4.62 | |||||||||
Diluted net income per share attributable to Aon shareholders | |||||||||||||||||||
Continuing operations | $ | 2.35 | $ | 0.19 | $ | 0.61 | $ | 1.13 | $ | 4.29 | |||||||||
Discontinued operations | 0.02 | — | (0.01 | ) | 0.28 | 0.30 | |||||||||||||
Net income | $ | 2.37 | $ | 0.19 | $ | 0.60 | $ | 1.41 | $ | 4.59 |
1Q | 2Q | 3Q | 4Q | 2017 | |||||||||||||||
Income Statement Data | |||||||||||||||||||
Total revenue | $ | 2,381 | $ | 2,368 | $ | 2,340 | $ | 2,909 | $ | 9,998 | |||||||||
Operating income | 335 | (127 | ) | 256 | 601 | 1,065 | |||||||||||||
Net income from continuing operations | 265 | (43 | ) | 196 | 17 | 435 | |||||||||||||
Income from discontinued operations, net of tax | 40 | 821 | (4 | ) | (29 | ) | 828 | ||||||||||||
Net income | 305 | 778 | 192 | (12 | ) | 1,263 | |||||||||||||
Less: Net income attributable to noncontrolling interests | 14 | 9 | 7 | 7 | 37 | ||||||||||||||
Net income attributable to Aon shareholders | $ | 291 | $ | 769 | $ | 185 | $ | (19 | ) | $ | 1,226 | ||||||||
Per Share Data | |||||||||||||||||||
Basic net income per share attributable to Aon shareholders | |||||||||||||||||||
Continuing operations | $ | 0.95 | $ | (0.20 | ) | $ | 0.74 | $ | 0.04 | $ | 1.54 | ||||||||
Discontinued operations | 0.15 | 3.13 | (0.02 | ) | (0.12 | ) | 3.20 | ||||||||||||
Net income | $ | 1.10 | $ | 2.93 | $ | 0.72 | $ | (0.08 | ) | $ | 4.74 | ||||||||
Diluted net income per share attributable to Aon shareholders | |||||||||||||||||||
Continuing operations | $ | 0.94 | $ | (0.20 | ) | $ | 0.73 | $ | 0.04 | $ | 1.53 | ||||||||
Discontinued operations | 0.15 | 3.13 | (0.01 | ) | (0.11 | ) | 3.17 | ||||||||||||
Net income | $ | 1.09 | $ | 2.93 | $ | 0.72 | $ | (0.07 | ) | $ | 4.70 |
(a) | (1) and (2). The following documents have been included in Part II, Item 8. | |
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on Financial Statements | ||
Consolidated Statements of Financial Position — As of December 31, 2017 and 2016 | ||
Consolidated Statements of Income — Years Ended December 31, 2017, 2016 and 2015 | ||
Consolidated Statements of Comprehensive Income — Years Ended December 31, 2017, 2016 and 2015 | ||
Consolidated Statements of Shareholders’ Equity — Years Ended December 31, 2017, 2016 and 2015 | ||
Consolidated Statements of Cash Flows — Years Ended December 31, 2017, 2016 and 2015 | ||
Notes to Consolidated Financial Statements |
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on Internal Control over Financial Reporting |
(a)(3). List of Exhibits (numbered in accordance with Item 601 of Regulation S-K) | |||
Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession. | |||
2.1* | |||
Articles of Association. | |||
3.1* | |||
Instruments Defining the Rights of Security Holders, Including Indentures. | |||
4.1* | |||
4.2* | Capital Securities Guarantee Agreement dated as of January 13, 1997 between Aon and The Bank of New York, as Guarantee Trustee — incorporated by reference to Exhibit 4.8 to Aon’s Registration Statement on Form S-4 (File No. 333-21237) filed on February 6, 1997. | ||
4.3* | Capital Securities Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon, Aon Capital A, Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. — incorporated by reference to Exhibit 4.10 to Aon’s Registration Statement on Form S-4 (File No. 333-21237) filed on February 6, 1997. | ||
4.4* | Debenture Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon, Aon Capital A, Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. — incorporated by reference to Exhibit 4.11 to Aon’s Registration Statement on Form S-4 (File No. 333-21237) filed on February 6, 1997. | ||
4.5* | Guarantee Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon, Aon Capital A, Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. — incorporated by reference to Exhibit 4.12 to Aon’s Registration Statement on Form S-4 (File No. 333-21237) filed on February 6, 1997. | ||
4.6* | |||
4.7* | |||
4.8* | |||
4.9* | |||
4.10* | |||
4.11* | |||
4.12* | |||
4.13* | |||
4.14* | |||
4.15* | |||
4.16* | |||
4.17* | |||
4.18* | |||
4.19* | |||
4.20* | |||
4.21* | |||
4.22* | |||
4.23* | |||
4.24* | |||
Material Contracts. | |||
10.1* | |||
10.2* | |||
10.3* | |||
10.4* | |||
10.5* | |||
10.6* | |||
10.7* | |||
10.8* | |||
10.9*# | |||
10.10*# | |||
10.11*# | |||
10.12*# | |||
10.13*# | |||
10.14*# | |||
10.15*# | |||
10.16*# | |||
10.17*# | |||
10.18*# | |||
10.19*# | |||
10.20*# | |||
10.21*# | |||
10.22*# | |||
10.23*# | |||
10.24*# | |||
10.25*# | |||
10.26*# | |||
10.27*# | |||
10.28*# | |||
10.29*# | |||
10.30*# | |||
10.31*# | |||
10.32*# | |||
10.33*# | |||
10.34*# | |||
10.35*# | |||
10.36*# | |||
10.37*# | |||
10.38*# | |||
10.39*# | |||
10.40*# | |||
10.41*# | |||
10.42*# | |||
10.43*# | |||
10.44*# | |||
10.45*# | |||
10.46*# | |||
10.47*# | |||
10.48*# | |||
10.49*# | |||
10.50*# | |||
10.51*# | |||
10.52*# | |||
10.53*# | |||
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10.55*# | |||
10.56*# | |||
10.57*# | |||
10.58*# |
Subsidiaries of the Registrant. | |||
21 | |||
Consents of Experts and Counsel. | |||
23 | |||
Rule 13a-14(a)/15d-14(a) Certifications. | |||
31.1. | |||
31.2. | |||
Section 1350 Certifications. | |||
32.1. | |||
32.2. | |||
XBRL Exhibits. | |||
Interactive Data Files. The following materials are filed electronically with this Annual Report on Form 10-K: | |||
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. |
Aon plc | |||||
By: | /s/ GREGORY C. CASE | ||||
Gregory C. Case, Chief Executive Officer | |||||
Date: | February 19, 2019 |
Signature | Title | Date | ||
/s/ GREGORY C. CASE | Chief Executive Officer and Director (Principal Executive Officer) | February 19, 2019 | ||
Gregory C. Case | ||||
/s/ LESTER B. KNIGHT | Non-Executive Chairman and Director | February 19, 2019 | ||
Lester B. Knight | ||||
/s/ JIN-YONG CAI | Director | February 19, 2019 | ||
Jin-Yong Cai | ||||
/s/ JEFFREY C. CAMPBELL | Director | February 19, 2019 | ||
Jeffrey C. Campbell | ||||
/s/ FULVIO CONTI | Director | February 19, 2019 | ||
Fulvio Conti | ||||
/s/ CHERYL A. FRANCIS | Director | February 19, 2019 | ||
Cheryl A. Francis | ||||
/s/ J. MICHAEL LOSH | Director | February 19, 2019 | ||
J. Michael Losh | ||||
/s/ RICHARD B. MYERS | Director | February 19, 2019 | ||
Richard B. Myers | ||||
/s/ RICHARD C. NOTEBAERT | Director | February 19, 2019 | ||
Richard C. Notebaert | ||||
/s/ GLORIA SANTONA | Director | February 19, 2019 | ||
Gloria Santona | ||||
/s/ CAROLYN Y. WOO | Director | February 19, 2019 | ||
Carolyn Y. Woo | ||||
/s/ CHRISTA DAVIES | Chief Financial Officer (Principal Financial Officer) | February 19, 2019 | ||
Christa Davies | ||||
/s/ MICHAEL NELLER | Global Controller (Principal Accounting Officer) | February 19, 2019 | ||
Michael Neller |
Name | Country | State/Province | ||
Aon Angola Corretores de Seguros Limitada | Angola | |||
Admiseg SA | Argentina | |||
Aon Affinity Argentina S.A. | Argentina | |||
Aon Benfield Argentina S.A. | Argentina | |||
Aon Risk Services Argentina S.A. | Argentina | |||
Aon Soluciones S.A. | Argentina | |||
Asevasa Argentina S.A. | Argentina | |||
Marinaro Dundas S.A. | Argentina | |||
SN Re S.A. | Argentina | |||
Swire Blanch MSTC II SA | Argentina | |||
Swire Blanch MSTC SA | Argentina | |||
Aon Aruba N.V. | Aruba | |||
Aon Captive Services Aruba N.V. | Aruba | |||
Affinity Risk Partners (Brokers) Pty Ltd | Australia | |||
Aon Australia Group Pty Ltd | Australia | |||
Aon Australian Holdco 1 Pty Ltd | Australia | |||
Aon Australian Holdco 2 Pty Ltd | Australia | |||
Aon Australian Holdco 3 Pty Ltd | Australia | |||
Aon Benfield Australia Limited | Australia | |||
Aon Charitable Foundation Pty Ltd | Australia | |||
Aon Consolidation Group Pty Ltd | Australia | |||
Aon Corporation Australia Limited | Australia | |||
Aon Group Pty Ltd | Australia | |||
Aon Hewitt Financial Advice Limited | Australia | |||
Aon Hewitt Limited | Australia | |||
Aon Holdings Australia Pty Limited | Australia | |||
Aon Product Design & Development Australia Pty Limited | Australia | |||
Aon Risk & Asset Management Pty Ltd | Australia | |||
Aon Risk Services Australia Limited | Australia | |||
Aon Services Pty Ltd. | Australia | |||
Aon Superannuation Pty Limited | Australia | |||
Cut-e Australia Pty Limited | Australia | |||
Hewitt Associates Pty Ltd | Australia | |||
HIA Insurance Services Pty Ltd. | Australia | |||
One Underwriting Pty Ltd | Australia | |||
Aon Austria GmbH | Austria | |||
Aon Holdings Austria GmbH | Austria | |||
Aon Jauch & Hübener Gesellschaft m.b.H. | Austria | |||
Aon Bahrain W.L.L. | Bahrain | |||
Aon Insurance Managers (Barbados) Ltd. | Barbados | |||
Agenion N.V./SA | Belgium | |||
Aon Belgium B.V.B.A. | Belgium | |||
Crion N.V. | Belgium | |||
Probabilitas N.V./SA | Belgium | |||
Aon (Bermuda) Ltd. | Bermuda |
Name | Country | State/Province | ||
Aon Benfield Group Limited | Bermuda | |||
Aon Bermuda Holding Company Limited | Bermuda | |||
Aon Bermuda QI Holdings Ltd. | Bermuda | |||
Aon Delta Bermuda Ltd. | Bermuda | |||
Aon Finance Bermuda 1 Ltd. | Bermuda | |||
Aon Finance Bermuda 2 Ltd. | Bermuda | |||
Aon Group (Bermuda) Ltd. | Bermuda | |||
Aon Hewitt (Bermuda) Ltd. | Bermuda | |||
Aon Insurance Managers (Bermuda) Ltd | Bermuda | |||
Aon Underwriting Managers (Bermuda) Ltd. | Bermuda | |||
Benfield Investment Holdings Limited | Bermuda | |||
Benfield Juniperus Holdings Limited | Bermuda | |||
International Risk Management Group Ltd | Bermuda | |||
White Rock Insurance (Americas) Ltd. | Bermuda | |||
White Rock Insurance (SAC) Ltd. | Bermuda | |||
White Rock Services (Bermuda) Ltd. | Bermuda | |||
Aon Bolivia S.A. Corredores de Seguros | Bolivia | |||
Aon Consulting Bolivia S.R.L. | Bolivia | |||
Aon Re Bolivia S.A. Corredores de Reaseguros | Bolivia | |||
Aon Botswana (Pty) Ltd. | Botswana | |||
Aon Holdings Botswana (Pty) Ltd | Botswana | |||
Aon Risk Management (Pty) Ltd | Botswana | |||
Adm Administradora de Beneficios Ltda. | Brazil | |||
Admix - Administracao, Consultoria, Participacoes e Corretora de Seguros de Vida Ltda. | Brazil | |||
Aon Affinity Administradora de Beneficios Ltda. | Brazil | |||
Aon Affinity do Brasil Servicos e Corretora de Seguros Ltda. | Brazil | |||
Aon Affinity Servicos e Participacoes Ltda. | Brazil | |||
Aon Benfield Brasil Corretora de Resseguros Ltda. | Brazil | |||
Aon Holdings Corretores de Seguros Ltda. | Brazil | |||
Associação Instituto Aon | Brazil | |||
Benfield do Brasil Participacoes Ltda. (dormant) | Brazil | |||
Farmaseg - Solucoes, Assistencia e Servicos Empresariais Ltda. | Brazil | |||
Hewitt Associates Administradora e Corretora de Seguros Ltda. | Brazil | |||
Hewitt Associates Servicos de Recursos Humanos Ltda. | Brazil | |||
6824625 Canada Ltd. | Canada | |||
7193599 Canada Inc. | Canada | |||
Aon Benfield Canada ULC | Canada | |||
Aon Canada Holdings N.S. ULC | Canada | |||
Aon Canada Inc. | Canada | |||
Aon Canada Intermediaries GP | Canada | |||
Aon CANZ Holdings N.S. ULC | Canada | |||
Aon Direct Group Inc. | Canada | |||
Aon Finance Canada 1 Corp. | Canada | |||
Aon Finance Canada 2 Corp. | Canada | |||
Aon Finance International N.S. ULC | Canada | |||
Aon Finance N.S. 1, ULC | Canada | |||
Aon Finance N.S. 5, ULC | Canada |
Name | Country | State/Province | ||
Aon Finance N.S. 8, ULC | Canada | |||
Aon Hewitt Inc. | Canada | |||
Aon Hewitt Investment Management Inc. | Canada | |||
Aon Parizeau Inc. | Canada | |||
Aon Reed Stenhouse Inc. | Canada | |||
Aon Risk Services Canada Inc. | Canada | |||
Aon Securities Investment Management Inc. | Canada | |||
Coles Hewitt Partnership | Canada | |||
Groupe-Conseil Aon Inc. | Canada | |||
Hewitt Amalco 3 ULC | Canada | |||
Hewitt Amalco 4 ULC | Canada | |||
Hewitt Amalco 5 ULC | Canada | |||
Hewitt Associates (a partnership) | Canada | |||
Hewitt Associates Corp. | Canada | |||
Hewitt Holdings Canada Company | Canada | |||
Hewitt Management Ltd. | Canada | |||
Hewitt Western Management Amalco Inc. | Canada | |||
IAO Actuarial Consulting Services Canada Inc. | Canada | |||
J. Allan Brown Consultants, Inc. | Canada | |||
K & K Insurance Brokers, Inc. Canada | Canada | |||
Linx Underwriting Solutions Inc. | Canada | |||
M.A. Shakeel Management Ltd. Amalco | Canada | |||
Minet Inc. | Canada | |||
USLP Underwriting Solutions LP | Canada | |||
Aon Insurance Managers (Cayman) Ltd. | Cayman Islands | |||
Aon Risk Solutions (Cayman) Ltd. | Cayman Islands | |||
Harbourview West Lake Co-Invest (GP) LP | Cayman Islands | |||
Townsend HWL GP, Ltd. | Cayman Islands | |||
Aon Affinity Chile Ltda. | Chile | |||
Aon Benfield (Chile) Corredores de Reaseguros Ltda. | Chile | |||
Aon Consulting (Chile) Limitada | Chile | |||
Aon Risk Services (Chile) Corredores de Seguros Limitada | Chile | |||
Aon Risk Services Holdings (Chile ) Ltda. | Chile | |||
Asevasa Chile Peritaciones e Ingenieria de Riesgos, S.A. | Chile | |||
Benfield Corredores de Reaseguro Ltda. | Chile | |||
Inversiones Benfield Chile Ltda. | Chile | |||
Aon Hewitt Consulting (Shanghai) Co., Ltd. | China | |||
Aon-COFCO Insurance Brokers Co., Ltd. | China | |||
Shanghai Kayi Information Technology Co., Ltd | China | |||
Aon Affinity Colombia Ltda. Agencia de Seguros | Colombia | |||
Aon Benfield Colombia Limitada Corredores de Reaseguros | Colombia | |||
Aon Risk Services Colombia SA Corredores de Seguros | Colombia | |||
Salud, Riesgos y Recursos Humanos Consultores Ltda. (former Aon Corporte Advisors Ltda.) | Colombia | |||
Tecsefin, S.A. en liquidacion | Colombia | |||
Alexander Insurance Managers (Netherlands Antilles) N.V. | Curacao | |||
Aon Antillen N.V. | Curacao | |||
Aon Captive Services Antilles N.V. | Curacao |
Name | Country | State/Province | ||
Aon Holdings Antillen N.V. | Curacao | |||
Aon Insurance Managers (Antilles) N.V. | Curacao | |||
Aon Cyprus Insurance Broker Company Limited | Cyprus | |||
Aon Central and Eastern Europe a.s. | Czech Rep. | |||
ADIS A/S | Denmark | |||
Aon Denmark A/S | Denmark | |||
Aon Riskminder A/S | Denmark | |||
Cut-e Danmark A/S | Denmark | |||
Optica Agency A/S | Denmark | |||
Aon Consulting Ecuador S.A. | Ecuador | |||
Aon Risk Services Ecuador S.A. Agencia Asesora Productora de Seguros | Ecuador | |||
Riskikonsultatsioonide OÜ | Estonia | |||
Aon (Fiji) Ltd. | Fiji | |||
Aon Finland Oy | Finland | |||
Cut-e Finland Oy | Finland | |||
Aon France | France | |||
Aon Holdings France SNC | France | |||
Hewitt Associates SAS | France | |||
International Space Brokers France | France | |||
Kloud S.à.r.l. | France | |||
Aon Beteiligungsmanagement Deutschland GmbH & Co. KG | Germany | |||
Aon Credit International Insurance Broker GmbH | Germany | |||
Aon Deutschland Beteiligungs GmbH | Germany | |||
Aon Hewitt GmbH | Germany | |||
Aon Hewitt Trust Solutions GmbH | Germany | |||
Aon Holding Deutschland GmbH | Germany | |||
Aon Pensions Insurance Brokers GmbH | Germany | |||
Aon Risiko & Unternehmensberatungs GmbH | Germany | |||
Aon Versicherungsberatungs GmbH | Germany | |||
Aon Versicherungsmakler Deutschland GmbH | Germany | |||
Cut-e GmbH | Germany | |||
Hamburger Gesellschaft zur Forderung des Versicherungswesens mbH | Germany | |||
One Underwriting Agency GmbH | Germany | |||
PRORÜCK Ruckversicherungs Aktiengesellschaft | Germany | |||
SG IFFOXX Assekuranzmaklergesellschaft mbH | Germany | |||
UNIT Versicherungsmakler GmbH | Germany | |||
UnitedPensions Deutschland AG | Germany | |||
Wannet Sports Insurance GmbH | Germany | |||
Aon Insurance Managers Gibraltar Ltd. | Gibraltar | |||
White Rock Insurance (Gibraltar) PCC Ltd. | Gibraltar | |||
Aon Greece S.A. | Greece | |||
Aon Insurance Micronesia (Guam) Inc | Guam (Micronesia) | |||
Aon Insurance Managers (Guernsey) Ltd. | Guernsey | |||
Aon Insurance Managers (Holdings) Ltd. | Guernsey | |||
Aon PMI International Limited | Guernsey | |||
Aon Services (Guernsey) Ltd | Guernsey | |||
Lake Erie Real Estate General Partner Limited | Guernsey | |||
Lincolnshire Insurance Company PCC Limited | Guernsey |
Name | Country | State/Province | ||
Lombard Trustee Company Limited | Guernsey | |||
Townsend Lake Constance GP Limited | Guernsey | |||
White Rock Insurance (Guernsey) ICC Limited | Guernsey | |||
White Rock Insurance Company PCC Ltd. | Guernsey | |||
Aon (CR) Insurance Agencies Company Limited | Hong Kong | |||
Aon Agencies Hong Kong Limited | Hong Kong | |||
Aon Assurance Agencies Hong Kong Limited | Hong Kong | |||
Aon Benfield China Limited | Hong Kong | |||
Aon Commercial Insurance Agencies Hong Kong Limited | Hong Kong | |||
Aon Enterprise Insurance Agencies Hong Kong Limited | Hong Kong | |||
Aon Hewitt Hong Kong Limited | Hong Kong | |||
Aon Holdings Hong Kong Limited | Hong Kong | |||
Aon Hong Kong Limited | Hong Kong | |||
Aon Insurance Agencies (HK) Limited | Hong Kong | |||
Aon Insurance Management Agencies (HK) Limited | Hong Kong | |||
Aon Insurance Underwriting Agencies Hong Kong Limited | Hong Kong | |||
Aon Product Risk Services Hong Kong Limited | Hong Kong | |||
Aon Securities (Hong Kong) Limited | Hong Kong | |||
Aon Services Hong Kong Limited | Hong Kong | |||
Aon Underwriting Agencies (HK) Limited | Hong Kong | |||
Asian Reinsurance Underwriters Limited | Hong Kong | |||
Contingency Insurance Brokers Limited | Hong Kong | |||
Cut-e Assessment (Hong Kong) Limited | Hong Kong | |||
Essar Insurance Services Limited | Hong Kong | |||
EW Blanch Limited | Hong Kong | |||
Stroz Friedberg (Asia) Limited | Hong Kong | |||
Townsend Group Asia Limited | Hong Kong | |||
Aon Hungary Insurance Brokers Risk and Human Consulting LLC | Hungary | |||
Aon Consulting Private Limited | India | |||
Cocubes Technologies Private Limited | India | |||
PT Aon Benfield Indonesia | Indonesia | |||
PT Aon Hewitt Indonesia | Indonesia | |||
PT Aon Indonesia | Indonesia | |||
Aeropeople Limited | Ireland | |||
Aon Broking Technology Limited | Ireland | |||
Aon Centre for Innovation and Analytics Ltd | Ireland | |||
Aon Commercial Services and Operations Ireland Limited | Ireland | |||
Aon Commercial Services Ireland Limited | Ireland | |||
Aon Corporate Services Limited | Ireland | |||
Aon Global Risk Research Limited | Ireland | |||
Aon Hewitt (Ireland) Limited | Ireland | |||
Aon Hewitt Management Company Limited | Ireland | |||
Aon Insurance Managers (Dublin) Ltd. | Ireland | |||
Aon Insurance Managers (Shannon) Limited | Ireland | |||
Aon Investment Holdings Ireland Limited | Ireland | |||
Aon MacDonagh Boland Group Ltd | Ireland | |||
Bacon & Woodrow Partnerships (Ireland) Limited | Ireland | |||
Beaubien Finance Ireland Limited | Ireland |
Name | Country | State/Province | ||
Becketts (Trustees) Limited | Ireland | |||
Becketts Limited | Ireland | |||
Beech Hill Pension Trustees Ltd | Ireland | |||
Benton Finance Ireland Limited | Ireland | |||
Cut-e Assessment Global Holdings | Ireland | |||
Cut-e Assessment Solutions Europe Limited | Ireland | |||
Cut-e Ireland Limited | Ireland | |||
Delany Bacon & Woodrow Partnership | Ireland | |||
MacDonagh Boland Crotty MacRedmond Ltd | Ireland | |||
Private Client Trustees Ltd. | Ireland | |||
Randolph Finance Unlimited Company | Ireland | |||
The Aon Ireland Mastertrustee Limited | Ireland | |||
Aon Treasury Ireland Limited | Ireland | |||
Aon (Isle of Man) Limited | Isle of Man | |||
Aon Corporate Services (Isle of Man) Limited | Isle of Man | |||
Aon Holdings (Isle of Man) Limited | Isle of Man | |||
Aon Insurance Managers (Isle of Man) Ltd. | Isle of Man | |||
White Rock Insurance PCC (Isle of Man) Limited | Isle of Man | |||
Aon Benfield Israel Limited | Israel | |||
Aon Holdings Israel Ltd. | Israel | |||
Aon Israel Insurance Brokerage Ltd. | Israel | |||
I. Beck Insurance Agency (1994) Ltd. | Israel | |||
National Insurance Office Ltd. | Israel | |||
Ronnie Elementary Insurance Agency Ltd | Israel | |||
Aon Benfield Italia S.p.A. | Italy | |||
Aon Hewitt Risk & Consulting S.r.l. | Italy | |||
Aon Italia S.r.l. | Italy | |||
Aon S.p.A. Insurance & Reinsurance Brokers | Italy | |||
Asscom Insurance Brokers S.r.l. | Italy | |||
Coverall S.r.l. Insurance and Reinsurance Underwriting Agency | Italy | |||
Ge.f.it. S.r.l. | Italy | |||
Gefass S.r.l. | Italy | |||
Global Safe Insurance Brokers S.r.l. | Italy | |||
Praesidium S.p.A. - Soluzioni Assicurative per il Management | Italy | |||
US Underwriting Solutions S.r.l. | Italy | |||
Aon Benfield Japan Ltd | Japan | |||
Aon Hewitt Japan Ltd. | Japan | |||
Aon Holdings Japan Ltd | Japan | |||
Aon Japan Ltd | Japan | |||
Townsend Re Global GP Limited | Jersey | |||
Aon Consulting Kazakhstan LLP | Kazakhstan | |||
Insurance Broker Aon Kazakhstan LLP | Kazakhstan | |||
Aon Hewitt Consulting Korea Inc. | Korea | |||
Aon Korea Inc. | Korea | |||
Aon Insurance Managers (Liechtenstein) AG | Liechtenstein | |||
UAB One Underwriting | Lithuania | |||
UADBB Aon Baltic | Lithuania | |||
Aon Finance Luxembourg S.à.r.l. | Luxembourg |
Name | Country | State/Province | ||
Aon Global Risk Consulting Luxembourg S.à.r.l. | Luxembourg | |||
Aon Holdings Luxembourg S.à.r.l. | Luxembourg | |||
Aon Insurance Managers (Luxembourg) S.A. | Luxembourg | |||
Aon Neudorf Finance S.à.r.l. | Luxembourg | |||
Aon Re Canada Holdings SARL | Luxembourg | |||
TTG Cayuga Bavaria Intermediate 2 S.à.r.l | Luxembourg | |||
Aon Insurance Agencies (Macau) Limited | Macau | |||
Aon Benfield Malaysia Limited | Malaysia | |||
Aon Hewitt Malaysia Sdn Bhd | Malaysia | |||
Aon Insurance Brokers (Malaysia) Sdn Bhd | Malaysia | |||
Aon Insurance Managers (Malta) PCC Limited | Malta | |||
Aon Services (Malta) Ltd | Malta | |||
White Rock Insurance (Europe) PCC Limited | Malta | |||
White Rock Insurance (Netherlands) PCC Limited | Malta | |||
Aon Hewitt Ltd. | Mauritius | |||
Aon Mauritius Holdings | Mauritius | |||
Aon Affinity Mexico Agente de Seguros y de Fianzas, S.A. de C.V. | Mexico | |||
Aon Affinity Mexico, S.A. de C.V. | Mexico | |||
Aon Benfield Mexico Intermediario de Reaseguro SA de CV | Mexico | |||
Aon Life, Agente de Seguros, S.A. de C.V. | Mexico | |||
Aon Mexico Business Support SA de CV | Mexico | |||
Aon Mexico Holdings, S. de R.L. de C.V. | Mexico | |||
Aon Risk Solutions Agente de Seguros y de Fianzas SA de CV | Mexico | |||
Asevasa Mexico, S.A. de C.V. | Mexico | |||
Hewitt Associates, S.C. | Mexico | |||
Hewitt Beneficios Agente de Seguros y de Fianzas, S.A. de C.V. | Mexico | |||
Aon Acore Sarl | Morocco | |||
Casablanca Intermediation Company Sarl | Morocco | |||
Glenrand M I B (Moçambique) Corretores de Seguros Limitada | Mozambique | |||
Alexander & Alexander Holding B.V. | Netherlands | |||
Aon Americas Holdings BV | Netherlands | |||
Aon APAC Holdings B.V. | Netherlands | |||
Aon CANZ Holdings B.V. | Netherlands | |||
Aon Cash Management B.V. | Netherlands | |||
Aon Corporation EMEA B.V. | Netherlands | |||
Aon Global Risk Consulting B.V. | Netherlands | |||
Aon Groep Nederland B.V. | Netherlands | |||
Aon Group Holdings International 1 B.V. | Netherlands | |||
Aon Group Holdings International 2 B.V. | Netherlands | |||
Aon Group International N.V. | Netherlands | |||
Aon Hewitt Risk & Financial Management B.V. | Netherlands | |||
Aon Holdings B.V. | Netherlands | |||
Aon Holdings International B.V. | Netherlands | |||
Aon Holdings Mid Europe B.V. | Netherlands | |||
Aon International Coöperatief U.A. | Netherlands | |||
Aon Latam Holdings N.V. | Netherlands | |||
Aon Lead QI B.V. | Netherlands | |||
Aon Meeus Assurantiën B.V. | Netherlands |
Name | Country | State/Province | ||
Aon Nederland C.V. | Netherlands | |||
Aon Netherlands Operations B.V. | Netherlands | |||
Aon Real Estate B.V. | Netherlands | |||
Aon Risk Services EMEA B.V. | Netherlands | |||
Aon Trust Services B.V. | Netherlands | |||
B.V. Assurantiekantoor Langeveldt-Schroder | Netherlands | |||
Bekouw Mendes C.V. | Netherlands | |||
Celinvest Amsterdam B.V. | Netherlands | |||
Exploitatiemaatschappij Beukenlaan 68-72 B.V. | Netherlands | |||
One Underwriting B.V. | Netherlands | |||
One Underwriting Health B.V. | Netherlands | |||
Sheppard Netherlands B.V. | Netherlands | |||
Wannet Speciale Verzekeringen B.V. | Netherlands | |||
Aon Benfield New Zealand Limited | New Zealand | |||
Aon Holdings New Zealand | New Zealand | |||
Aon New Zealand | New Zealand | |||
Aon New Zealand Group ULC | New Zealand | |||
Aon Product Design and Development New Zealand Limited | New Zealand | |||
Aon Saver Limited | New Zealand | |||
Superannuation Management Nominees Limited | New Zealand | |||
Aon Norway AS | Norway | |||
Cut-e Nordic AS | Norway | |||
Cut-e Norge AS | Norway | |||
Aon Majan LLC | Oman | |||
Aon Insurance Brokers (Pvt) Ltd. | Pakistan | |||
Aon Benfield Panama, S.A. | Panama | |||
Aon Broking Services SA | Panama | |||
Asevasa Caricam, S.A. | Panama | |||
Asevasa Panama, S.A. | Panama | |||
Aon Hewitt (PNG) Ltd. | Papua new Guinea | |||
Aon Risk Services (PNG) Ltd. | Papua new Guinea | |||
Aon Superannuation (PNG) Limited | Papua new Guinea | |||
Aon Benfield Peru Corredores de Reaseguros SA | Peru | |||
Aon Graña Peru Corredores de Seguros SA | Peru | |||
Aon Soluciones, S.A.C. | Peru | |||
Aon Insurance and Reinsurance Brokers Philippines Inc. | Philippines | |||
Aon Polska Services Sp. z o.o. | Poland | |||
Aon Polska Sp. z o.o. | Poland | |||
Aon Sp. z o.o. | Poland | |||
Aon Portugal - Consultores, Unipessoal, Lda. | Portugal | |||
Aon Portugal - Corretores de Seguros, S.A. | Portugal | |||
Aon Re Bertoldi - Corretagem de Resseguros S.A. | Portugal | |||
Inspiring Benefits Portugal, Unipessoal Lda | Portugal | |||
Aon Qatar LLC | Qatar | |||
Aon Consulting Romania SRL | Romania | |||
Aon Romania Broker de Asigurare - Reasigurare SRL | Romania | |||
Aon Rus Insurance Brokers LLC | Russia | |||
Aon Rus LLC | Russia |
Name | Country | State/Province | ||
Aon Sint Maarten N.V. | Saint Martin | |||
Aon Insurance Micronesia (Saipan) Inc | Saipan (Micronesia) | |||
Aon Hewitt Saudi Arabia LLC | Saudi Arabia | |||
Aon Saudi Arabia LLC | Saudi Arabia | |||
Alexander & Alexander (Asia) Holdings Pte Ltd | Singapore | |||
Aon Benfield Asia Pte. Ltd. | Singapore | |||
Aon Hewitt Singapore Pte. Ltd. | Singapore | |||
Aon Hewitt Wealth Management Pte. Ltd. | Singapore | |||
Aon Insurance Agencies Pte Ltd | Singapore | |||
Aon Insurance Managers (Singapore) Pte Ltd | Singapore | |||
Aon Randolph Singapore Pte. Ltd. | Singapore | |||
Aon Singapore (Broking Centre) Pte. Ltd. | Singapore | |||
Aon Singapore Center for Innovation, Strategy and Management Pte. Ltd. | Singapore | |||
Aon Singapore Pte. Ltd. | Singapore | |||
Cut-e Consulting Singapore Pte Limited | Singapore | |||
Stenhouse (South East Asia) Private Limited | Singapore | |||
Aon Benfield Bratislava s.r.o. | Slovak Republic | |||
Aon Central and Eastern Europe, organizacna zlozka | Slovak Republic | |||
Aon Consulting South Africa (Pty) Ltd. | South Africa | |||
Aon Holdings Sub-Sahara Africa (Pty) Ltd. | South Africa | |||
Aon Limpopo (Pty) Ltd. | South Africa | |||
Aon Re Africa (Pty) Limited | South Africa | |||
Aon South Africa (Pty) Ltd. | South Africa | |||
Aon Worldaware (Pty) Ltd. | South Africa | |||
Claims Fulfilment Company (Pty) Ltd. | South Africa | |||
Mafube Risk and Insurance Consultants (Pty) Ltd. | South Africa | |||
Aon Benfield Iberia Correduria de Reaseguros, S.A.U. | Spain | |||
Aon Gil y Carvajal, S.A.U. Correduria de Seguros | Spain | |||
Aon Hewitt España S.A.U. | Spain | |||
Aon Management Solutions, S.A.U. | Spain | |||
Aon Marketing Directo, S.A.U. | Spain | |||
Aon Southern Europe y Cia, S.L. | Spain | |||
Asevasa Asesoramiento y Valoraciones S.A.U. | Spain | |||
Fundación Aon España | Spain | |||
Grupo Innovac Sociedad Correduria de Seguros S.A. | Spain | |||
Inspiring Benefits, S.L. | Spain | |||
One Underwriting Agencia de Suscripción S.L | Spain | |||
Aon Swaziland (Pty) Ltd | Swaziland | |||
Aon Global Risk Consulting AB | Sweden | |||
Aon Hewitt AB | Sweden | |||
Aon Sweden AB | Sweden | |||
Cut-e Sverige AB | Sweden | |||
Aon Insurance Managers (Switzerland) AG | Switzerland | |||
Aon Schweiz AG | Switzerland | |||
Inpoint Switzerland GmbH | Switzerland | |||
PWZ AG | Switzerland | |||
Stroz Friedberg GmbH | Switzerland | |||
Unidelta AG | Switzerland |
Name | Country | State/Province | ||
Aon Management Consulting Taiwan Ltd. | Taiwan | |||
Aon Taiwan Ltd. | Taiwan | |||
Aon (Thailand) Limited | Thailand | |||
Aon Consulting (Thailand) Limited | Thailand | |||
Aon Group (Thailand) Limited | Thailand | |||
Aon Hewitt (Thailand) Ltd. | Thailand | |||
Aon Re (Thailand) Limited | Thailand | |||
Aon Risk Services (Thailand) Limited | Thailand | |||
A.B. Insurances Limited | Trinidad and Tobago | |||
AIB Services Limited | Trinidad and Tobago | |||
Aon Energy Caribbean Limited | Trinidad and Tobago | |||
Cardea Health Solutions Limited | Trinidad and Tobago | |||
Aon Danismanlik Hizmetleri AS | Turkey | |||
Aon Sigorta ve Reasurans Brokerligi ve A.S. | Turkey | |||
Acumen Credit Insurance Brokers Limited | U.K. | |||
Affinity Group Insurance Services Limited | U.K. | |||
Agility Credit Insurance Brokers Limited | U.K. | |||
Alexander Clay | U.K. | |||
Aon 180412 Limited (in liquidation) | U.K. | |||
Aon Adjudication Services Limited | U.K. | |||
Aon ANZ Holdings Limited | U.K. | |||
Aon Benfield Limited | U.K. | |||
Aon Consulting Financial Services Limited | U.K. | |||
Aon Consulting Limited | U.K. | |||
Aon DC Trustee Limited | U.K. | |||
Aon Delta UK Limited | U.K. | |||
Aon Global Holdings 1 Limited | U.K. | |||
Aon Global Holdings 2 Limited | U.K. | |||
Aon Global Holdings 3 Limited [In strike-off] | U.K. | |||
Aon Global Holdings Limited | U.K. | |||
Aon Global Operations plc | U.K. | |||
Aon Hewitt Limited | U.K. | |||
Aon Hewitt US Holdings Limited | U.K. | |||
Aon Holdings Limited | U.K. | |||
Aon Overseas Holdings Limited | U.K. | |||
Aon Pension Trustees Limited | U.K. | |||
Aon Risk Services (NI) Limited | U.K. | |||
Aon Securities Limited | U.K. | |||
Aon Southern Europe UK Limited | U.K. | |||
Aon Trust Corporation Limited | U.K. | |||
Aon UK Group Limited | U.K. | |||
Aon UK Holdings Intermediaries Limited | U.K. | |||
Aon UK Limited | U.K. | |||
Aon UK Trustees Limited | U.K. | |||
Aon US & International Holdings Limited | U.K. | |||
Bacon & Woodrow Partnerships Limited | U.K. | |||
Bain Hogg Group Limited (in liquidation) | U.K. | |||
Bankassure Insurance Services Limited | U.K. |
Name | Country | State/Province | ||
Beaubien Finance Limited | U.K. | |||
Beaubien UK Finance Limited | U.K. | |||
Benton Finance Limited | U.K. | |||
Contractsure Limited | U.K. | |||
CoSec 2000 Limited | U.K. | |||
Credit Insurance Brokers (Reynolds) Limited | U.K. | |||
Cut-e (UK) Limited | U.K. | |||
Denney O'Hara (Life & Pensions) Limited | U.K. | |||
Doveland Services Limited | U.K. | |||
E. W. Blanch Holdings Limited | U.K. | |||
E. W. Blanch Investments Limited | U.K. | |||
Farmsure Limited [In strike-off] | U.K. | |||
Gotham Digital Science Ltd. | U.K. | |||
Hall Rhodes Holdings Limited | U.K. | |||
Hall Rhodes Limited | U.K. | |||
Henderson Corporate Insurance Brokers Limited | U.K. | |||
Henderson Insurance Brokers Limited | U.K. | |||
Henderson Insurance Partnership Limited [In strike-off] | U.K. | |||
Henderson Risk Management Limited | U.K. | |||
Hewitt Associates Outsourcing Limited | U.K. | |||
Hewitt Risk Management Services Limited | U.K. | |||
Hogg Group Limited | U.K. | |||
Insuractive Limited [In strike-off] | U.K. | |||
International Space Brokers Europe Limited | U.K. | |||
International Space Brokers Limited | U.K. | |||
Jenner Fenton Slade Limited | U.K. | |||
John Reynolds & Company (Credit Insurance) Limited | U.K. | |||
John Reynolds & Company (Insurances) Limited | U.K. | |||
John Reynolds & Company (Life & Pensions) Limited | U.K. | |||
Krumlin Hall Limited | U.K. | |||
McLagan (Aon) Limited | U.K. | |||
Minet Consultancy Services Ltd | U.K. | |||
Minet Group | U.K. | |||
NBS Nominees Limited | U.K. | |||
Optimum Risk Solutions Limited | U.K. | |||
P.G. Bradley & Co Limited | U.K. | |||
Portus Consulting (Leamington) Limited | U.K. | |||
Portus Consulting Limited | U.K. | |||
Portus Online LLP | U.K. | |||
Rasini Vigano Limited | U.K. | |||
Richard Kiddle (Insurance Brokers) Limited | U.K. | |||
SLE Worldwide Limited | U.K. | |||
Sports Insure Limited [In strike-off] | U.K. | |||
Stroz Friedberg Limited | U.K. | |||
Suresport Limited [In strike-off] | U.K. | |||
The Aon MasterTrustee Limited | U.K. | |||
The John Reynolds Company Limited | U.K. | |||
Townsend Group Europe Ltd. | U.K. |
Name | Country | State/Province | ||
UK Credit Insurance Specialists Limited | U.K. | |||
Access Plans USA, Inc. | Oklahoma | U.S. | ||
Affinity Insurance Services, Inc. | Pennsylvania | U.S. | ||
AIS Affinity Insurance Agency, Inc. | California | U.S. | ||
AIS Insurance Agency, Inc. | Washington | U.S. | ||
Alexander Reinsurance Intermediaries, Inc. | New York | U.S. | ||
Allen Insurance Associates, Inc. | California | U.S. | ||
Alliance HealthCard of Florida, Inc. | Georgia | U.S. | ||
Alliance HealthCard, Inc. | Georgia | U.S. | ||
American Insurance Services Corp. | Texas | U.S. | ||
American Special Risk Insurance Company | Delaware | U.S. | ||
AMXH, LLC | Delaware | U.S. | ||
Aon Benefit Solutions Inc. | Oklahoma | U.S. | ||
Aon Benfield Fac Inc. | Illinois | U.S. | ||
Aon Benfield Global, Inc. | Delaware | U.S. | ||
Aon Benfield Inc. | Illinois | U.S. | ||
Aon Benfield Puerto Rico Inc. | Puerto Rico | U.S. | ||
Aon Brazil Holdings, LLC | Delaware | U.S. | ||
Aon Chile Holdings, LLC | Delaware | U.S. | ||
Aon Consulting & Insurance Services | California | U.S. | ||
Aon Consulting, Inc. | New Jersey | U.S. | ||
Aon Consulting, Inc. | New York | U.S. | ||
Aon Corporation | Delaware | U.S. | ||
Aon Edge Insurance Agency, Inc. | Florida | U.S. | ||
Aon Finance US 1, LLC | Delaware | U.S. | ||
Aon Finance US 2, LLC | Delaware | U.S. | ||
Aon Financial & Insurance Solutions, Inc. | California | U.S. | ||
Aon Group, Inc. | Maryland | U.S. | ||
Aon Hewitt Health Market Insurance Solutions Inc. | California | U.S. | ||
Aon Hewitt Investment Consulting, Inc. | Illinois | U.S. | ||
Aon Insurance Managers (Puerto Rico) Inc. | Puerto Rico | U.S. | ||
Aon Insurance Managers (USA) Inc. | Vermont | U.S. | ||
Aon Insurance Managers (USVI), Inc. | US Virgin Islands | U.S. | ||
Aon International Energy, Inc. | Texas | U.S. | ||
Aon International Holdings, Inc. | Maryland | U.S. | ||
Aon Life Agency of Texas, Inc. | Texas | U.S. | ||
Aon Life Insurance Company | Vermont | U.S. | ||
Aon Mexico Holdings, LLC | Delaware | U.S. | ||
Aon PHI Acquisition Corporation of California | California | U.S. | ||
Aon Premium Finance, LLC | Delaware | U.S. | ||
Aon Private Risk Management Insurance Agency, Inc. | Illinois | U.S. | ||
Aon Private Risk Management of California Insurance Agency, Inc. | California | U.S. | ||
Aon Property Risk Consulting, Inc. | New York | U.S. | ||
Aon Realty Services, Inc. | Pennsylvania | U.S. | ||
Aon Retirement Plan Advisors, LLC | Delaware | U.S. | ||
Aon Risk Consultants, Inc. | Illinois | U.S. | ||
Aon Risk Insurance Services West, Inc. | California | U.S. | ||
Aon Risk Services (Holdings) of Latin America, Inc. | Delaware | U.S. |
Name | Country | State/Province | ||
Aon Risk Services (Holdings) of the Americas, Inc. | Illinois | U.S. | ||
Aon Risk Services Central, Inc. | Illinois | U.S. | ||
Aon Risk Services Companies, Inc. | Maryland | U.S. | ||
Aon Risk Services Northeast, Inc. | New York | U.S. | ||
Aon Risk Services South, Inc. | North Carolina | U.S. | ||
Aon Risk Services Southwest, Inc. | Texas | U.S. | ||
Aon Risk Services, Inc. of Florida | Florida | U.S. | ||
Aon Risk Services, Inc. of Hawaii | Hawaii | U.S. | ||
Aon Risk Services, Inc. of Maryland | Maryland | U.S. | ||
Aon Risk Services, Inc. of Washington, D.C. | District of Columbia | U.S. | ||
Aon Risk Solutions of Puerto Rico, Inc. | Puerto Rico | U.S. | ||
Aon Securities LLC | Delaware | U.S. | ||
Aon Service Corporation | Illinois | U.S. | ||
Aon Services Group, Inc. | Delaware | U.S. | ||
Aon Special Risk Resources, Inc. | Delaware | U.S. | ||
Aon TC Holdings, Inc. | New Jersey | U.S. | ||
Aon Trust Company LLC | Illinois | U.S. | ||
Aon Underwriting Managers, Inc. | Delaware | U.S. | ||
Aon US Holdings 2, Inc. | Delaware | U.S. | ||
Aon US Holdings, Inc. | Delaware | U.S. | ||
Aon Ward Financial Corporation | Ohio | U.S. | ||
Aon/Albert G. Ruben Insurance Services, Inc. | California | U.S. | ||
ARM International Corp. | New York | U.S. | ||
ARM International Insurance Agency Corp. | Ohio | U.S. | ||
ARMRISK CORP. | New Jersey | U.S. | ||
AS Holdings, Inc. | Delaware | U.S. | ||
ASPN Insurance Agency, LLC | Delaware | U.S. | ||
Association of Rural and Small Town Americans | Missouri | U.S. | ||
Assurance Licensing Services, Inc. | Illinois | U.S. | ||
B E P International Corp. | New Jersey | U.S. | ||
Benefit Marketing Solutions, L.L.C. | Oklahoma | U.S. | ||
Benfield Advisory Inc. | Delaware | U.S. | ||
Benfield Finance (London) LLC | Delaware | U.S. | ||
Blanch Americas Inc. | Delaware | U.S. | ||
BMS Insurance Agency, L.L.C. | Oklahoma | U.S. | ||
Bowes & Company, Inc., of New York | New York | U.S. | ||
Cammack Health LLC | New York | U.S. | ||
Cananwill Corporation | Delaware | U.S. | ||
Cananwill, Inc. | California | U.S. | ||
Cananwill, Inc. | Pennsylvania | U.S. | ||
CEREP III Secondary Manager, LLC | Delaware | U.S. | ||
CFSSG Real Estate Partners I, LLC | Delaware | U.S. | ||
CFSSG Real Estate Partners II, LLC | Delaware | U.S. | ||
CIF-H GP LLC | Delaware | U.S. | ||
Citadel Insurance Managers, Inc. | California | U.S. | ||
Coalition for Benefits Equality and Choice | California | U.S. | ||
Custom Benefit Programs, Inc. | New Jersey | U.S. | ||
cut-e USA Inc. | New York | U.S. |
Name | Country | State/Province | ||
E.W. Blanch Capital Risk Solutions, Inc. | Delaware | U.S. | ||
E.W. Blanch International Inc. | Delaware | U.S. | ||
Elysium Digital IP Products, LLC | Delaware | U.S. | ||
Elysium Digital, L.L.C. | Delaware | U.S. | ||
Ennis Knupp Secondary Market Services, LLC | Delaware | U.S. | ||
Financial & Professional Risk Solutions, Inc. | Illinois | U.S. | ||
Futurity Group, Inc. | Nevada | U.S. | ||
Gotham Digital Science, LLC | Delaware | U.S. | ||
Grant Park Capital, LLC | Delaware | U.S. | ||
GTCR/AAM Blocker Corp. | Delaware | U.S. | ||
Health Index Advisors LLC | Delaware | U.S. | ||
Healthy Paws Pet Insurance LLC | Washington | U.S. | ||
Hewitt Insurance Brokerage LLC | Delaware | U.S. | ||
Hewitt Insurance, Inc. | Puerto Rico | U.S. | ||
Hewitt International Holdings LLC | Delaware | U.S. | ||
Hogg Robinson North America, Inc. | Delaware | U.S. | ||
Huntington T. Block Insurance Agency, Inc. | District of Columbia | U.S. | ||
Impact Forecasting, L.L.C. | Illinois | U.S. | ||
INPOINT, INC. | Illinois | U.S. | ||
International Risk Management (Americas), Inc. | Ohio | U.S. | ||
International Space Brokers, Inc. | Virginia | U.S. | ||
IRM/GRC Holding Inc. | Delaware | U.S. | ||
J H Minet Puerto Rico Inc. | Puerto Rico | U.S. | ||
JDPT Manager, LLC | Delaware | U.S. | ||
Johnson Rooney Welch, Inc. | California | U.S. | ||
K & K Insurance Group of Florida, Inc. | Florida | U.S. | ||
K & K Insurance Group, Inc. | Indiana | U.S. | ||
K2 Technologies Inc. | California | U.S. | ||
KVT GP, LLC | Delaware | U.S. | ||
Lake Tahoe GP, LLC | Delaware | U.S. | ||
Lake Tahoe II GP, LLC | Delaware | U.S. | ||
Lake Tahoe III GP, LLC | Delaware | U.S. | ||
Lake Tahoe IV GP, LLC | Delaware | U.S. | ||
McLagan Partners Asia, Inc. | Delaware | U.S. | ||
McLagan Partners, Inc. | Delaware | U.S. | ||
Membership Leasing Trust | Delaware | U.S. | ||
Minet Holdings Inc. | New York | U.S. | ||
Minet Re North America, Inc. | Georgia | U.S. | ||
Modern Survey, Inc. | Minnesota | U.S. | ||
Muirfield Underwriters, Ltd. | Delaware | U.S. | ||
Paragon Strategic Solutions Inc. | Delaware | U.S. | ||
PathWise Solutions LLC | Delaware | U.S. | ||
Penn Square Manager 1, LLC | Delaware | U.S. | ||
Penn Square Manager II, LLC | Delaware | U.S. | ||
PGOF Manager 1, LLC | Ohio | U.S. | ||
Premier Auto Finance, Inc. | Delaware | U.S. | ||
Private Equity Partnership Structures I, LLC | Delaware | U.S. | ||
Protective Marketing Enterprises, Inc. | Tennessee | U.S. |
Name | Country | State/Province | ||
Redwoods Dental Underwriters, Inc. | North Carolina | U.S. | ||
SA Special Situations General Partner, LLC | Delaware | U.S. | ||
Scritch Inc. | Texas | U.S. | ||
Specialty Benefits, Inc. | Indiana | U.S. | ||
Strategic Manager-III, LLC | Delaware | U.S. | ||
Stroz Friedberg Inc. | Delaware | U.S. | ||
Stroz Friedberg, LLC | New York | U.S. | ||
The Key West Saxon Group, LLC | Florida | U.S. | ||
The Townsend Group, LLC | Ohio | U.S. | ||
Townsend Alpha Manager I, LLC | Delaware | U.S. | ||
Townsend Alpha Manager II, LLC | Delaware | U.S. | ||
Townsend Alpha Manager III, LLC | Delaware | U.S. | ||
Townsend Holdings LLC | Delaware | U.S. | ||
Townsend REF GP, LLC | Delaware | U.S. | ||
Townsend SO Manager I, LLC | Delaware | U.S. | ||
TTG BRPTP GP, LLC | Delaware | U.S. | ||
TTG Core Plus Investments, LLC | Delaware | U.S. | ||
TTG German Investments I, LLC | Ohio | U.S. | ||
TTG Investments II, LLC | Delaware | U.S. | ||
TTG Irish Investments I, LLC | Delaware | U.S. | ||
TTG Manager, LLC | Delaware | U.S. | ||
Underwriters Marine Services, Inc. | Louisiana | U.S. | ||
Ward Financial Group, Inc. | Ohio | U.S. | ||
West Lake General Partner, LLC | Delaware | U.S. | ||
West Lake II GP, LLC | Delaware | U.S. | ||
Wexford Underwriting Managers, Inc. | Delaware | U.S. | ||
White Rock USA Ltd. | Vermont | U.S. | ||
Worldwide Integrated Services Company | Texas | U.S. | ||
Wrapid Specialty, Inc. | California | U.S. | ||
WT Government Services, LLC | Delaware | U.S. | ||
WT Technologies, LLC | Delaware | U.S. | ||
Aon Ukraine LLC | Ukraine | |||
Aon (DIFC) Gulf Limited | United Arab Emirates | |||
Aon Benfield Middle East Limited | United Arab Emirates | |||
Aon Hewitt Middle East Limited | United Arab Emirates | |||
Aon Middle East Co LLC | United Arab Emirates | |||
Aon Retirement Solutions Limited | United Arab Emirates | |||
Cut-e Consult DMCC | United Arab Emirates | |||
Stroz Friedberg Risk Management Limited | United Arab Emirates | |||
Aon Benfield Latin America SA | Uruguay | |||
Marinaro Dundas SA | Uruguay | |||
Administradora Aon, C.A. | Venezuela | |||
Aon Group Venezuela, Corretaje de Reaseguros, C.A. | Venezuela |
Name | Country | State/Province | ||
Aon Risk Services Venezuela, Corretaje de Seguros C.A. | Venezuela | |||
Aon Vietnam Limited | Vietnam |
Registration Statement | ||||
Form | Number | Purpose | ||
S-8 | 333-55773 | Pertaining to Aon's stock award plan, stock option plan, and employee stock purchase plan | ||
S-4 | 333-168320 | Pertaining to the registration of 4,545,566 shares of common stock registered on Post Effective Amendment No. 1 related to the Amended and Restated Global Stock and Incentive Compensation Plan of Hewitt Associates, Inc. | ||
S-8 | 333-103344 | Pertaining to the Aon Stock Incentive Plan | ||
S-8 | 333-106584 | Pertaining to Aon's deferred compensation plan | ||
S-8 | 333-145928 | Pertaining to the Aon Stock Incentive Plan | ||
S-8 | 333-145930 | Pertaining to the registration of common stock underlying equity securities issued to Aon's president and chief executive officer | ||
S-8 | 333-174788 | Pertaining to Aon's 2011 stock incentive plan and 2011 employee stock purchase plan | ||
S-4 | 333-178991 | Pertaining to the registration of 355,110,708 Class A Ordinary Shares of Aon Global Limited, and in the related Proxy Statement / Prospectus of Aon Global and Aon Corporation contained therein | ||
S-3 | 333-227514 | Pertaining to the registration of debt securities, guarantees, preference shares, Class A Ordinary Shares, Convertible Securities, share purchase contracts and share purchase units of Aon plc and debt securities and guarantees of Aon Corporation | ||
S-8 | 333-184999 | Pertaining to Aon plc Company Share Save Plan | ||
S-8 | 333-199759 | Pertaining to the registration of an additional 9,000,000 Class A Ordinary Shares to be issued pursuant to the Aon plc 2011 Incentive Plan |
1. | I have reviewed this annual report on Form 10-K 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. |
/s/ GREGORY C. CASE | |||
Date: | February 19, 2019 | Gregory C. Case Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K 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. |
/s/ CHRISTA DAVIES | |||
Date: | February 19, 2019 | Christa Davies Chief Financial Officer |
/s/ GREGORY C. CASE | ||
Gregory C. Case Chief Executive Officer | ||
February 19, 2019 |
/s/ CHRISTA DAVIES | ||
Christa Davies Chief Financial Officer | ||
February 19, 2019 |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 15, 2019 |
Jun. 29, 2018 |
|
Document and Entity Information | |||
Entity Registrant Name | Aon plc | ||
Entity Central Index Key | 0000315293 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 239,999,442 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 33,332,666,779 |
Consolidated Statements of Financial Position (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Ordinary shares, nominal or par value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, Authorized shares | 750,000,000 | 750,000,000 |
Ordinary shares, issued shares | 240,100,000 | 247,600,000 |
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Stockholders' Equity [Abstract] | |||
Dividends (in dollars per share) | $ 1.56 | $ 1.41 | $ 1.29 |
Basis of Presentation |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Financial Statements include the accounts of Aon and its controlled subsidiaries. Intercompany accounts and transactions have been eliminated. The Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for all periods presented. Use of Estimates The preparation of the accompanying Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the Financial Statements in future periods. |
Summary of Significant Accounting Principles and Practices |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Principles and Practices | Summary of Significant Accounting Principles and Practices Principles of Consolidation The accompanying consolidated financial statements include the accounts of Aon plc and those entities in which the Company has a controlling financial interest. To determine if Aon holds a controlling financial interest in an entity, the Company first evaluates if it is required to apply the variable interest entity (VIE) model to the entity, otherwise, the entity is evaluated under the voting interest model. Where Aon holds rights that give it the power to direct the activities of a VIE that most significantly impact the VIE's economic performance, combined with a variable interest that gives the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company has a controlling financial interest in that VIE. Aon holds a controlling financial interest in entities that are not VIEs where it, directly or indirectly, holds more than 50% of the voting rights or where it exercises control through substantive participating rights or as a general partner. Revenue Recognition The Company generates revenues primarily through commissions, compensation from insurance and reinsurance companies for services provided to them, and fees from customers. Commissions and fees for brokerage services vary depending upon several factors, which may include the amount of premium, the type of insurance or reinsurance coverage provided, the particular services provided to a client, insurer, or reinsurer, and the capacity in which the Company acts. Compensation from insurance and reinsurance companies includes: (1) fees for consulting and analytics services and (2) fees and commissions for administrative and other services provided to or on behalf of insurers. In Aon’s capacity as an insurance and reinsurance broker, the service promised to the customer is placement of an effective insurance or reinsurance policy, respectively. At the completion of the insurance or reinsurance policy placement process once coverage is effective, the customer has obtained control over the services promised by the Company. Judgment is not typically required when assessing whether the coverage is effective. Fees from clients for advice and consulting services are dependent on the extent and value of the services provided. Payment terms for the Company’s principal service lines are discussed below; the Company believes these terms are consistent with current industry practices. Significant financing components are typically not present in Aon’s arrangements. The Company recognizes revenue when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements where control is transferred over time, an input or output method is applied that represents a faithful depiction of the progress towards completion of the performance obligation. For arrangements that include variable consideration, the Company assesses whether any amounts should be constrained. For arrangements that include multiple performance obligations, the Company allocates consideration based on their relative fair values. Costs incurred by the Company in obtaining a contract are capitalized and amortized on a systematic basis that is consistent with the transfer of control of the services to which the asset relates, considering anticipated renewals when applicable. Certain contract related costs, including pre-placement brokerage costs, are capitalized as a cost to fulfill and are amortized on a systematic basis consistent with the transfer of control of the services to which the asset relates, which is generally less than one year. The Company has elected to apply practical expedients to not disclose the revenue related to unsatisfied performance obligations if (1) the contract has an original duration of 1 year or less, (2) the Company has recognized revenue for the amount in which it has the right to bill, and (3) the variable consideration is allocated entirely to an unsatisfied performance obligation which is recognized as a series of distinct goods or services that form a single performance obligation. Disaggregation of Revenue The following is a description of principal service lines from which the Company generates its revenue: Commercial Risk Solutions includes retail brokerage, cyber solutions, global risk consulting, and captives. Revenue primarily includes insurance commissions and fees for services rendered. Revenue is predominantly recognized at a point in time upon the effective date of the underlying policy, or for a limited number of arrangements, over the term of the arrangement using output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements recognized over time, various output measures, including units transferred and time elapsed, are utilized to provide a faithful depiction of the progress towards completion of the performance obligation. Revenue is recorded net of allowances for estimated policy cancellations, which are determined based on an evaluation of historical and current cancellation data. Commissions and fees for brokerage services may be invoiced near the effective date of the underlying policy or over the term of the arrangement in installments during the policy period. Reinsurance Solutions includes treaty and facultative reinsurance brokerage and capital markets. Revenue primarily includes reinsurance commissions and fees for services rendered. Revenue is predominantly recognized at a point in time upon the effective date of the underlying policy (or policies), or for a limited number of arrangements, over the term of the arrangement using output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements recognized over time, various output measures, including units delivered and time elapsed, are utilized to provide a faithful depiction of the progress towards completion of the performance obligation. Commissions and fees for brokerage services may be invoiced at the inception of the reinsurance period for certain reinsurance brokerage, or more commonly, over the term of the arrangement in installments based on deposit or minimum premiums for most treaty reinsurance arrangements. Retirement Solutions includes core retirement, investment consulting, and talent, rewards & performance. Revenue consists primarily of fees paid by customers for consulting services, such as risk management strategies, health and benefits, and human capital consulting services. Revenue recognized for these arrangements is predominantly recognized over the term of the arrangement using input or output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services, or for certain arrangements, at a point in time upon completion of the services. For consulting arrangements recognized over time, revenue will be recognized based on a measure of progress that depicts the transfer of control of the services to the customer, utilizing an appropriate input or output measure to provide a reasonable assessment of the progress towards completion of the performance obligation including units delivered or time elapsed. Fees paid by customers for consulting services are typically charged on an hourly, project or fixed-fee basis, and revenue for these arrangements is typically recognized based on time incurred, days elapsed, or reports delivered. Revenue from time-and-materials or cost-plus arrangements are recognized as services are performed using input or output measures to provide a reasonable assessment of the progress towards completion of the performance obligation including hours worked, and revenue for these arrangements is typically recognized based on time and materials incurred. Reimbursements received for out-of-pocket expenses are recorded as a component of revenue. Payment terms vary but are typically over the contract term in installments. Health Solutions includes health and benefits brokerage and health care exchanges. Revenue primarily includes insurance commissions and fees for services rendered. For brokerage commissions, revenue is predominantly recognized at the effective date of the underlying policy (or policies), or for a limited number of arrangements, over the term of the arrangement to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services using input or output measures, including units delivered or time elapsed, to provide a faithful depiction of the progress towards completion of the performance obligation. Revenue from health care exchange arrangements are typically recognized upon successful enrollment of participants, net of a reserve for estimated cancellations. Commissions and fees for brokerage services may be invoiced at the effective date of the underlying policy or over the term of the arrangement in installments during the policy period. Payment terms for other services vary but are typically over the contract term in installments. Data & Analytic Services includes Affinity, Aon InPoint, and ReView. Revenue consists primarily of fees for services rendered and is generally recognized over the term of the arrangement to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. Payment terms vary but are typically over the contract term in installments. For Data & Analytic Services arrangements recognized over time, revenue will be recognized based on a measure of progress that depicts the transfer of control of the services to the customer, utilizing an appropriate input or output measure to provide a faithful depiction of the progress towards completion of the performance obligation, including units delivered or time elapsed. Input and output measures utilized vary based on the arrangement but typically include reports provided or days elapsed. Share-Based Compensation Costs Share-based payments to employees, including grants of restricted share units and performance share awards, are measured based on estimated grant date fair value. The Company recognizes compensation expense over the requisite service period for awards expected to ultimately vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. Pension and Other Postretirement Benefits The Company records net periodic cost relating to its pension and other postretirement benefit plans based on calculations that include various actuarial assumptions, including discount rates, assumed rates of return on plan assets, inflation rates, mortality rates, compensation increases, and turnover rates. The Company reviews its actuarial assumptions on an annual basis and modifies these assumptions based on current rates and trends. The effects of gains, losses, and prior service costs and credits are amortized over future service periods or future estimated lives if the plans are frozen. The funded status of each plan, calculated as the fair value of plan assets less the benefit obligation, is reflected in the Company’s Consolidated Statements of Financial Position using a December 31 measurement date. Net Income per Share Basic net income per share is computed by dividing net income available to ordinary shareholders by the weighted-average number of ordinary shares outstanding, including participating securities, which consist of unvested share awards with non-forfeitable rights to dividends. Diluted net income per share is computed by dividing net income available to ordinary shareholders by the weighted-average number of ordinary shares outstanding, which have been adjusted for the dilutive effect of potentially issuable ordinary shares, including certain contingently issuable shares. The diluted earnings per share calculation reflects the more dilutive effect of either (1) the two-class method that assumes that the participating securities have not been exercised, or (2) the treasury stock method. Potentially issuable shares are not included in the computation of diluted income per share if their inclusion would be antidilutive. Cash and Cash Equivalents and Short-term Investments Cash and cash equivalents include cash balances and all highly liquid investments with initial maturities of three months or less. Short-term investments consist of money market funds. The estimated fair value of Cash and cash equivalents and Short-term investments approximates their carrying values. At December 31, 2018, Cash and cash equivalents and Short-term investments totaled $828 million compared to $1,285 million at December 31, 2017. Of the total balance, $91 million and $96 million was restricted as to its use at December 31, 2018 and 2017, respectively. Included within the December 31, 2018 and 2017 balances, respectively, were £42.7 million ($53.9 million at December 31, 2018 exchanges rates) and £42.7 million ($57.1 million at December 31, 2017 exchange rates) of operating funds required to be held by the Company in the U.K. by the FCA, which were included in Short-term investments. Fiduciary Assets and Liabilities In its capacity as an insurance agent and broker, Aon collects premiums from insureds and, after deducting its commission, remits the premiums to the respective insurers. Aon also collects claims or refunds from insurers on behalf of insureds. Uncollected premiums from insureds and uncollected claims or refunds from insurers are recorded as Fiduciary assets in the Company’s Consolidated Statements of Financial Position. Unremitted insurance premiums and claims are held in a fiduciary capacity and the obligation to remit these funds is recorded as Fiduciary liabilities in the Company’s Consolidated Statements of Financial Position. Aon held fiduciary assets for premiums collected from insureds but not yet remitted to insurance companies and claims collected from insurance companies but not yet remitted to insureds of $3.9 billion and $3.7 billion at December 31, 2018 and 2017, respectively. These funds and a corresponding liability are included in Fiduciary assets and Fiduciary liabilities, respectively, in the accompanying Consolidated Statements of Financial Position. Allowance for Doubtful Accounts The Company’s allowance for doubtful accounts with respect to receivables is based on a combination of factors, including evaluation of historical write-offs, aging of balances, and other qualitative and quantitative analyses. Receivables, net included an allowance for doubtful accounts of $62 million and $59 million at December 31, 2018 and 2017, respectively. Fixed Assets Fixed assets are stated at cost, less accumulated depreciation. Included in this category is internal use software, which is software that is acquired, internally-developed or modified solely to meet internal needs, with no plan to market externally. Costs related to directly obtaining, developing, or upgrading internal use software are capitalized. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are generally as follows:
Goodwill and Intangible Assets Goodwill represents the excess of acquisition cost over the fair value of the net assets in the acquisition of a business. Goodwill is allocated to various reporting units. Upon disposition of a business entity, goodwill is allocated to the disposed entity based on the fair value of that entity compared to the fair value of the reporting unit in which it was included. Goodwill is not amortized, but instead is tested for impairment at least annually. The goodwill impairment test is performed at the reporting unit level. The Company may initially perform a qualitative analysis to determine if it is more likely than not that the goodwill balance is impaired. If a qualitative assessment is not performed or if a determination is made that it is not more likely than not that their value of the reporting unit exceeds its carrying amount, then the Company will perform a two-step quantitative analysis. First, the fair value of each reporting unit is compared to its carrying value. If the fair value of the reporting unit is less than its carrying value, the Company performs a hypothetical purchase price allocation based on the reporting unit’s fair value to determine the fair value of the reporting unit’s goodwill. Any resulting difference will be a charge to Amortization and impairment of intangible assets in the Consolidated Statements of Income in the period in which the determination is made. Fair value is determined using a combination of present value techniques and market prices of comparable businesses. We classify our intangible assets acquired as either tradenames, customer-related and contract-based, or technology and other. Amortization basis and estimated useful lives by intangible asset type are generally as follows:
Derivatives Derivative instruments are recognized in the Consolidated Statements of Financial Position at fair value. Where the Company has entered into master netting agreements with counterparties, the derivative positions are netted by counterparties and are reported accordingly in Other assets or Other liabilities. Changes in the fair value of derivative instruments are recognized in earnings each period, unless the derivative is designated and qualifies as a cash flow or net investment hedge. The Company has historically designated the following hedging relationships for certain transactions: (1) a hedge of the change in fair value of a recognized asset or liability or firm commitment (“fair value hedge”), (2) a hedge of the variability in cash flows from a recognized variable-rate asset or liability or forecasted transaction (“cash flow hedge”), and (3) a hedge of the net investment in a foreign operation (“net investment hedge”). In order for a derivative to qualify for hedge accounting, the derivative must be formally designated as a fair value, cash flow, or a net investment hedge by documenting the relationship between the derivative and the hedged item. The documentation must include a description of the hedging instrument, the hedged item, the risk being hedged, Aon’s risk management objective and strategy for undertaking the hedge, the method for assessing the effectiveness of the hedge, and the method for measuring hedge ineffectiveness. Additionally, the hedge relationship must be expected to be highly effective at offsetting changes in either the fair value or cash flows of the hedged item at both the inception of the hedge and on an ongoing basis. Aon assesses the ongoing effectiveness of its hedges and measures and records hedge ineffectiveness, if any, at the end of each quarter or more frequently if facts and circumstances require. For a derivative designated as a fair value hedging instrument, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. The effect is to reflect in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value. For a cash flow hedge that qualifies for hedge accounting, the effective portion of the change in fair value of a hedging instrument is recognized in Other comprehensive income (“OCI”) and subsequently reclassified to earnings in the same period the hedged item impacts earnings. The ineffective portion of the change in fair value is recognized immediately in earnings. For a net investment hedge, the effective portion of the change in fair value of the hedging instrument is recognized in OCI as part of the cumulative translation adjustment, while the ineffective portion is recognized immediately in earnings. Changes in the fair value of a derivative that is not designated as part of a hedging relationship (commonly referred to as an “economic hedge”) are recorded in Other income (expense) in the Consolidated Statements of Income. The Company discontinues hedge accounting prospectively when (1) the derivative expires or is sold, terminated, or exercised, (2) the qualifying criteria are no longer met, or (3) management removes the designation of the hedging relationship. Foreign Currency Certain of the Company’s non-U.S. operations use their respective local currency as their functional currency. These operations that do not have the U.S. dollar as their functional currency translate their financial statements at the current rates of exchange in effect at the balance sheet date and revenues and expenses using rates that approximate those in effect during the period. The resulting translation adjustments are included in Net foreign currency translation adjustments within the Consolidated Statements of Shareholders’ Equity. Further, for all entities, gains and losses from the remeasurement of monetary assets and liabilities that are denominated in a non-functional currency of that entity are included in Other income (expense) within the Consolidated Statements of Income. Income Taxes Deferred income taxes are recognized for the effect of temporary differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted marginal tax rates and laws that are currently in effect. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in the period when the rate change is enacted. Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be objectively verified. Deferred tax assets are realized by having sufficient future taxable income to allow the related tax benefits to reduce taxes otherwise payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carry-forwards, taxable income in carry-back years, and tax planning strategies that are both prudent and feasible. The Company recognizes the effect of income tax positions only if sustaining those positions is more likely than not. Tax positions that meet the more likely than not recognition threshold but are not highly certain are initially and subsequently measured based on the largest amount of benefit that is greater than 50% likely of being realized upon settlement with the taxing authority. Only information that is available at the reporting date is considered in the Company’s recognition and measurement analysis, and events or changes in facts and circumstances are accounted for in the period in which the event or change in circumstance occurs. The Company records penalties and interest related to unrecognized tax benefits in Income taxes in the Company’s Consolidated Statements of Income. New Accounting Pronouncements Adoption of New Accounting Standards Presentation of Net Periodic Pension and Postretirement Benefit Costs In March 2017, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. The Company has applied the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Consolidated Statement of Income, and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension costs and net periodic postretirement benefit cost in assets. The new guidance allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company did not apply the practical expedient upon adoption of this guidance. The new guidance was effective for Aon in the first quarter of 2018. The adoption of this guidance had no impact on the net income of the Company. Upon adoption of the guidance, the presentation of the results reflect a change in Operating income (loss) offset by an equal and offsetting change in Other income (expense) for each period, as follows:
Income Tax Consequences of Intercompany Transactions In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory. The guidance requires that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e. depreciated, amortized, or impaired). The Company has applied the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The new guidance was effective for Aon in the first quarter of 2018. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Deferred tax assets of $23 million, an increase to Deferred tax liabilities of $12 million, and a decrease to Other non-current assets of $26 million on the Consolidated Statement of Financial Position through a cumulative adjustment of $15 million decrease to Retained earnings. For the twelve months ended December 31, 2018, the impact of adopting this guidance on the Consolidated Statement of Income was insignificant. Statement of Cash Flows In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity no longer has discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard was effective for the Company in the first quarter of 2018. The adoption of this guidance had no impact on the Company’s Consolidated Statements of Cash Flows. Financial Assets and Liabilities In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. The Company applied the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with the exception of the amendments related to equity securities without readily determinable fair values, including disclosure requirements, which were applied prospectively. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Accumulated other comprehensive loss of $1 million on the Consolidated Statement of Financial Position through a cumulative adjustment of $1 million increase to Retained earnings. For the twelve months ended December 31, 2018, the impact of adopting this guidance on the Consolidated Statement of Income was insignificant. Revenue Recognition In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers (the “Standard” or “ASC 606”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP (“ASC 605”). The core principal of the Standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Standard also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company elected to apply the modified retrospective adoption approach to all contracts. Under this approach, prior periods were not restated. Rather, revenues and other disclosures for prior periods were provided in the notes to the financial statements as previously reported under ASC 605, and the cumulative effect of initially applying the guidance was recognized as an adjustment to Retained earnings. The following summarizes the significant changes to the Company as a result of the adoption of ASC 606 on January 1, 2018.
As a result of applying the modified retrospective method to adopt ASC 606, the following adjustments were made to the Consolidated Statement of Financial Position as of January 1, 2018:
The following tables summarize the impacts of adopting ASC 606 on the Company’s Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the twelve months ended December 31, 2018. Consolidated Statement of Income
Adoption of ASC 606 had a favorable impact of $78 million on net income from continuing operations, or $0.32 per share, for the twelve months ended December 31, 2018. Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
The adoption of ASC 606 had no impact on total Cash provided by operating activities. Refer to Note 3 “Revenue from Contracts with Customers” for further information. Accounting Standards Issued but Not Yet Adopted Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued new accounting guidance related to the disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans. The guidance requires sponsors of these plans to provide additional disclosures, including weighted-average interest rates used in the entity’s cash balance pension plans and a narrative description of reasons for any significant gains or losses impacting the benefit obligation for the period, and eliminates certain previous disclosure requirements. The guidance is effective for Aon in the first quarter of 2021 with early adoption permitted and will be applied retrospectively. The Company is currently evaluating the impact that the guidance will have on the Financial Statements and the period of adoption. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued new accounting guidance related to reclassification of certain tax effects from accumulated other comprehensive income. The guidance allows a reclassification from accumulated comprehensive income to retained earnings for stranded tax effects resulting from the Tax Reform Act. In addition, the entity is required to provide certain disclosures regarding stranded tax effects. The guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted, including adoption in any interim period. The guidance should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. The Company does not anticipate electing to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings and will adopt the disclosure guidance in the first quarter of 2019. Refer to Note 11 “Income Taxes” for further discussion of the Tax Reform Act. Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued new accounting guidance on targeted improvements to accounting for hedging activities. The new guidance amends its hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the effect of a hedging instrument to be presented in the same income statement line as the hedged item. Further, in December 2018, the FASB issued additional guidance which added to the list of U.S. benchmark interest rates that are eligible to be hedged, the Overnight Index Swap (“OIS”) rate based on the Secured Overnight Financing Rate. Thus, entities may designate the OIS rate in hedging relationships they enter into on or after the date of adoption of this guidance. An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the period of adoption. Changes to income statement presentation and financial statement disclosures will be applied prospectively. The new guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted. The Company will adopt the new guidance in the first quarter of 2019 and does not expect a significant impact on the Financial Statements. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued new accounting guidance on simplifying the test for goodwill impairment. Currently the standard requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. The new guidance removes Step 2, resulting in an entity applying a line-step quantitative test and will record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. An entity will apply the new guidance on a prospective basis. The new guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. The Company is currently evaluating the period of adoption, but does not expect a significant impact on the Financial Statements. Credit Losses In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments. The new guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. The Company is currently evaluating the impact that the standard will have on the Financial Statements and period of adoption. Leases In February 2016, the FASB issued a new accounting standard on leases, which requires lessees to recognize assets and liabilities for most leases. Under the new standard, a lessee is required to recognize in the Consolidated Statement of Financial Position liabilities to make future lease payments and right-of-use assets representing its right to use the underlying assets for the lease term. The recognition, measurement, timing, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current U.S. GAAP standards. The new standard is effective for the Company in the first quarter of 2019, with early adoption permitted and must be applied using a modified retrospective transition approach. In July 2018, the FASB amended this guidance and provided an additional transition method with which to adopt the guidance. Under the additional transition method, entities may elect to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption. Under this transition method, an entity's reporting for the comparative periods prior to adoption presented in the financial statements would continue to be in accordance with current lease guidance and thus not restated. The Company will adopt the new standard as of January 1, 2019 using the cumulative-effect adjustment transition method approved by the FASB. Additionally, the Company will provide expanded lease disclosures required under the new standard in the first quarter of 2019, including both qualitative and quantitative information. The modified retrospective approach includes several optional practical expedients that entities may elect to apply upon transition. The Company has determined it will elect the package of practical expedients permitted under the transition guidance within the new standard, which allows a lessee to carryforward their population of existing leases, the classification of each lease, as well as the treatment of initial direct costs as of the period of adoption. In addition, the Company will elect the practical expedient related to lease and non-lease components, as an accounting policy election for all asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component. Furthermore, the Company has made a policy election to not recognize right-of-use assets and lease liabilities that arise from leases with an initial term of twelve months or less on the Consolidated Statements of Financial Position. Lastly, the Company has determined it will not elect the practical expedient related to hindsight in determining the lease term and in assessing impairment of right-of-use assets. The Company will implement the standard as of January 1, 2019 and has executed a comprehensive approach to identify arrangements that may contain a lease, has performed completeness assessments over the identified lease population, and has implemented system solutions and processes to appropriately account for the lease right-of-use assets and lease liabilities upon transition and an ongoing basis. Further, control activities related to the adoption of this standard as well as ongoing transactional processes and procedures have been designed and begun to be implemented to ensure compliance with the new standard. The Company expects to recognize lease liabilities ranging from approximately $1.3 billion to $1.5 billion and corresponding right-of-use assets ranging from $1.1 billion to $1.3 billion on the Consolidated Statements of Financial Position upon the adoption of this standard. The Company does not anticipate that the new standard will have a significant impact on the Consolidated Statements of Income or the Consolidated Statements of Cash Flows. |
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Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The following table summarizes revenue from contracts with customers by principal service line (in millions):
Consolidated revenue from contracts with customers by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions):
Contract Costs The Company recognizes an asset for costs incurred to fulfill a contract for costs that are specifically identified and relate to a contract or anticipated contract, generate or enhance resources used in satisfying the Company’s performance obligations, and are expected to be recovered. Assets recognized as costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, as well as other costs, are amortized on a systematic basis that is consistent with the transfer of control of the services to which the asset relates. The amortization is primarily included in Compensation and benefits on the Consolidated Statements of Income. An analysis of the changes in the net carrying amount of costs to fulfill contracts with customers is as follows (in millions):
The Company capitalizes incremental costs to obtain a contract with a customer that are expected to be recovered. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, will be amortized on a systematic basis that is consistent with the transfer of control of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company has applied a practical expedient and recognized the costs of obtaining a contract as an expense when incurred. The amortization is primarily included in Compensation and benefits on the Consolidated Statements of Income. An analysis of the changes in the net carrying amount of costs to obtain contracts with customers is as follows (in millions):
Please refer to Note 2 “Summary of Significant Accounting Principles and Practices” for further information regarding the Company’s revenue recognition policy. |
Other Financial Data |
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Other Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Financial Data | Other Financial Data Consolidated Statements of Income Information Other Income (Expense) Other income (expense) consists of the following (in millions):
Consolidated Statements of Financial Position Information Allowance for Doubtful Accounts An analysis of the allowance for doubtful accounts is as follows (in millions):
Other Current Assets The components of Other current assets are as follows (in millions):
Fixed Assets, net The components of Fixed assets, net are as follows (in millions):
Depreciation expense, which includes software amortization, was $176 million, $187 million, and $162 million for the years ended December 31, 2018, 2017, and 2016, respectively. Other Non-Current Assets The components of Other non-current assets are as follows (in millions):
(1) Refer to Note 3 “Revenue from Contracts with Customers” for further information. Other Current Liabilities The components of Other current liabilities are as follows (in millions):
Other Non-Current Liabilities The components of Other non-current liabilities are as follows (in millions):
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On February 9, 2017, the Company entered into a Purchase Agreement with Tempo Acquisition, LLC (the “Purchase Agreement”) to sell the Divested Business to an entity formed and controlled by affiliates of The Blackstone Group L.P. (the “Buyer”) and certain designated purchasers that are direct or indirect subsidiaries of the Buyer. On May 1, 2017, the Buyer purchased all of the outstanding equity interests of the Divested Business, plus certain related assets and liabilities, for a purchase price of $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and deferred consideration of up to $500 million. Cash proceeds after customary adjustments and before taxes due were $4.2 billion. Aon and the Buyer entered into certain transaction related agreements at the closing, including two commercial agreements, a transition services agreement, certain intellectual property license agreements, sub-leases, and other customary agreements. Aon expects to continue to be a significant client of the Divested Business and the Divested Business has agreed to use Aon for its broking and other services for a specified period of time. The financial results of the Divested Business for the years ended December 31, 2018, 2017, and 2016 are presented as Net income from discontinued operations on the Company’s Consolidated Statements of Income. The following table presents the financial results of the Divested Business (in millions):
Upon triggering held for sale criteria in February 2017, Aon ceased depreciating and amortizing all long-lived assets included in discontinued operations. Total operating expenses for the years ended December 31, 2017, and 2016 include, respectively, $8 million and $70 million of depreciation of fixed assets and $11 million and $120 million of intangible asset amortization for the time prior to the Company triggering held for sale criteria. The Company’s Consolidated Statements of Cash Flows present the operating, investing, and financing cash flows of the Divested Business as discontinued operations. Aon uses a centralized approach to cash management and financing of its operations. Prior to the closing of the Transaction, portions of the Divested Business’s cash were transferred to Aon daily, and Aon would fund the Divested Business as needed. There were no Cash and cash equivalents of discontinued operations at December 31, 2017. Total proceeds received for the sale of the Divested Business and taxes paid as a result of the sale are recognized on the Consolidated Statements of Cash Flows in Cash provided by investing activities - continuing operations and Cash provided by operating activities - continuing operations, respectively. |
Restructuring |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring In 2017, Aon initiated a global restructuring plan (the “Restructuring Plan”) in connection with the sale of the Divested Business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity. The Company expects these restructuring activities and related expenses to affect continuing operations through the fourth quarter of 2019, including an estimated 4,800 to 5,400 role eliminations. In the fourth quarter of 2018, Aon expanded the Restructuring Plan, which resulted in additional expected costs of approximately $200 million, consisting of $150 million of cash investment and $50 million of non-cash charges. The Restructuring Plan is expected to result in cumulative costs of approximately $1,225 million through the end of the plan, consisting of approximately $450 million in employee termination costs, $130 million in technology rationalization costs, $65 million in lease consolidation costs, $50 million in non-cash asset impairments, and $530 million in other costs, including certain separation costs associated with the sale of the Divested Business. From the inception of the Restructuring Plan through December 31, 2018, the Company has eliminated 4,366 positions and incurred total expenses of $982 million for restructuring and related separation costs. These charges are included in Compensation and benefits, Information technology, Premises, Depreciation of fixed assets, and Other general expenses in the accompanying Consolidated Statements of Income. The following table summarizes restructuring and separation costs by type that have been incurred through December 31, 2018 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs by type may be revised in future periods as these assumptions are updated:
The changes in the Company’s liabilities for the Restructuring Plan as of December 31, 2018 are as follows (in millions):
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Acquisitions and Dispositions of Businesses |
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Business Combinations and Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Dispositions of Businesses | Acquisitions and Dispositions of Businesses Acquisitions The Company completed eight acquisitions during the year ended December 31, 2018 and seventeen acquisitions during the year ended December 31, 2017. The following table includes the preliminary fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):
Intangible assets are primarily customer-related and contract-based assets. Those intangible assets acquired as part of a business acquisition in 2018 had a weighted average useful economic life of 7 years. Acquisition related costs incurred and recognized within Other general expenses for the year ended December 31, 2018 were $2 million. Total revenue for these acquisitions included in the Company’s Consolidated Statement of Income for the year ended December 31, 2018 was approximately $17 million. The results of operations of these acquisitions are included in the Consolidated Financial Statements as of the respective acquisition dates. The results of operations of the Company would not have been materially different if these acquisitions had been reported from the beginning of the period in which they were acquired. 2018 Acquisitions On December 31, 2018, the Company completed the transaction to acquire certain assets of Bill Beatty Insurance Agency, Inc. based in the United States. On November 15, 2018, the Company completed the transaction to acquire certain business and assets of North Harbour Insurance Services (1985) Limited, a New Zealand-based firm. On October 25, 2018, the Company completed the transaction to acquire 100% capital of GEFASS S.R.L and GE.F.IT S.R.L., Italy-based firms specialized in Bancassurance schemes. On May 9, 2018, the Company completed the transaction to acquire certain assets of 601West, a division of Lee & Hayes, P.L.L.C. based in the United States. On April 24, 2018, the Company completed the transaction to acquire Inspiring Benefits, S.L., a Spain-based firm specialized in employee loyalty, wellbeing, and rewards programs. On March 1, 2018, the Company completed the transaction to acquire the business and assets of the trade credit business of Niche International Business Proprietary Limited, a trade credit brokerage based in Johannesburg, South Africa. On March 1, 2018, the Company completed the transaction to acquire Affinity Risk Partners (Brokers) Pty. Ltd., an insurance broker in Victoria, Australia. On January 19, 2018, the Company completed the transaction to acquire substantially all of the assets of The Burchfield Group, a provider in pharmacy benefit consulting, auditing, and health plan compliance services based in the United States. 2017 Acquisitions On December 29, 2017, the Company completed the transaction to acquire the Townsend Group, a U.S.-based provider of global investment management and advisory services primarily focused on real estate. On December 29, 2017, the Company completed the transaction to acquire Baltolink UADBB, a regional broker based in Lithuania. On December 19, 2017, the Company completed the transaction to acquire a client register of Grant Liddell Financial Advisor Services Pty Ltd in Australia. On December 1, 2017, the Company completed the transaction to acquire Henderson Insurance Brokers Limited, an independent insurance broking firm based in the United Kingdom. On November 30, 2017, the Company completed the transaction to acquire Unidelta AG, an insurance broker located in Switzerland. On October 31, 2017, the Company completed the transaction to acquire Unirobe Meeùs Groep, an insurance broker based in the Netherlands. On October 31, 2017, the Company completed the transaction to acquire Lenzi Paolo Broker di Assicurazioni S.r.l., an insurance broker based in Italy. On October 26, 2017, the Company completed the transaction to acquire Nauman Insurance Brokers Limited, an insurance broker based in New Zealand. On October 2, 2017, the Company completed the transaction to acquire Portus Consulting, an independent employee benefits firm based in the United Kingdom. On August 31, 2017, the Company completed the transaction to acquire Mark Kelly Insurance and Financial Services PTY LTD, an Australia-based broker servicing the insurance needs of commercial clients in and around the Townsville regional center. On August 28, 2017, the Company completed the transaction to acquire a certain portfolio in the Charlotte office of The Hays Group, Inc. d/b/a Hays Companies. On July 27, 2017, the Company completed the transaction to acquire Grupo Innovac Sociedad de Correduría de Seguros, S.A, an insurance broker based in Valencia, Spain. On July 3, 2017, the Company completed the transaction to acquire PWZ AG, an independent insurance broker based in Zurich, Switzerland. On May 31, 2017, the Company completed the transaction to acquire SchneiderGolling IFFOXX Assekuranzmakler AG and SchneiderGolling Industrie Assekuranzmaklergesellschaft mbH from SchneiderGolling Gruppe, a property and casualty broker based in Southern Germany. On May 2, 2017, the Company completed the transaction to acquire cut-e Assessment Global Holdings Limited, a high-volume online psychometric assessments provider based in Ireland. On March 3, 2017, the Company completed the transaction to acquire Finaccord Limited, a market research, publishing and consulting company based in the United Kingdom. On January 19, 2017, the Company completed the transaction to acquire VERO Management AG, an insurance broker and risk advisor based in Austria. Dispositions The Company completed four dispositions during the year ended December 31, 2018. The Company completed nine dispositions during the year ended December 31, 2017, excluding the sale of the Divested Business, and five dispositions during the year ended December 31, 2016. Total pretax losses, net of gains, for the year ended December 31, 2018 was $6 million. Total pretax gains, net of losses, for the years ended December 31, 2017, and 2016, were $16 million and $39 million, respectively. Gains and losses recognized as a result of a disposition are included in Other income (expense) in the Consolidated Statements of Income. During the third quarter of 2018, Aon disposed of certain assets and liabilities that were previously classified as held for sale due to management’s decision to exit certain operations. In the second quarter of 2018, a non-cash impairment charge of $176 million was recognized to write down the assets and liabilities to a fair value less cost-to-sell of $47 million and $41 million, respectively. The impairment charge was recognized in Amortization and impairment of intangible assets on the Consolidated Statement of Income. Adjustments to the non-cash impairment charge in the third and fourth quarters were insignificant. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the net carrying amount of goodwill for the years ended December 31, 2018 and 2017, respectively, are as follows (in millions):
Other intangible assets by asset class are as follows (in millions):
In the second quarter of 2017, and in connection with the completion of the sale of the Divested Business, the Company recognized a non-cash impairment charge to the associated tradenames of $380 million. The fair value of the tradenames was determined using the Relief from Royalty Method. This impairment was included in Amortization and impairment of intangible assets on the Consolidated Statement of Income. Refer to Note 5 “Discontinued Operations” for further information. Amortization expense and impairment charges from finite lived intangible assets were $593 million, $704 million, and $157 million for the years ended December 31, 2018, 2017, and 2016, respectively. The estimated future amortization for finite-lived intangible assets as of December 31, 2018 is as follows (in millions):
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following is a summary of outstanding debt (in millions):
Notes On December 3, 2018, Aon Corporation issued $350 million 4.50% Senior Notes due December 2028. The Company used the net proceeds of the offering to pay down a portion of outstanding commercial paper and for general corporate purposes. On March 8, 2018 the Company’s CAD $375 million ($291 million at March 8, 2018 Exchange Rates) 4.76% Senior Notes due March 2018 issued by a Canadian subsidiary of Aon Corporation matured and was repaid in full. Each of the notes issued by Aon plc is fully and unconditionally guaranteed by Aon Corporation, and each of the notes issued by Aon Corporation is fully and unconditionally guaranteed by Aon plc. Refer to Note 19 “Guarantee of Registered Securities” for additional information regarding guarantees of outstanding debt securities. Each of the notes described and identified in the table above contains customary representations, warranties, and covenants, and the Company was in compliance with all such covenants as of December 31, 2018. Repayments of total debt are as follows (in millions):
Revolving Credit Facilities As of December 31, 2018, Aon plc had two primary committed credit facilities outstanding: its $900 million multi-currency U.S. credit facility expiring in February 2021 (the “2021 Facility”) and its $400 million multi-currency U.S. credit facility expiring in October 2022 (the “2022 Facility”). On February 2, 2019, the Company extended the 2021 Facility by one year, and it will now expire in February 2022. Each of these facilities includes customary representations, warranties, and covenants, including financial covenants that require Aon plc to maintain specified ratios of adjusted consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. At December 31, 2018, Aon plc did not have borrowings under either the 2021 Facility or the 2022 Facility, and was in compliance with all covenants contained therein during the twelve months ended December 31, 2018. Commercial Paper Aon Corporation, a wholly owned subsidiary of Aon plc, has established a U.S. commercial paper program, and Aon plc has established a European multi-currency commercial paper program (collectively, the “CP Programs”). Commercial paper may be issued in aggregate principal amounts of up to $600 million under the U.S. program and €525 million under the European program, not to exceed the amount of the Company’s committed credit, which was $1.3 billion at December 31, 2018. The U.S. commercial paper program is fully and unconditionally guaranteed by Aon plc and the European commercial paper program is fully and unconditionally guaranteed by Aon Corporation. Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Consolidated Statements of Financial Position, is as follows (in millions):
The weighted average commercial paper outstanding and its related interest rates are as follows:
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Lease Commitments |
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Leases, Operating [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Commitments | Lease Commitments The Company leases office facilities, equipment, and automobiles under non-cancelable operating leases. These leases expire at various dates, may contain renewal and expansion options, and do not contain restrictions concerning dividends or incurring additional debt. In addition to base rental costs, occupancy lease agreements generally provide for rent escalations resulting from increased assessments for real estate taxes and other charges. The total amount of the minimum rent is expensed on a straight-line basis over the lease term. The Company’s lease obligations are primarily for the use of office space and certain real-estate properties are subleased to third parties. Rental expenses (including amounts applicable to taxes, insurance, and maintenance) for operating leases are as follows (in millions):
At December 31, 2018, future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows (in millions):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes On December 22, 2017, the Tax Reform Act was enacted into law and the new legislation contained several key tax provisions that impacted the Company, including a reduction of the corporate income tax rate to 21% effective for tax years beginning after December 31, 2017 and a one-time mandatory transition tax on accumulated foreign earnings (the “Transition Tax”), among others. Also on December 22, 2017, the Securities and Exchange Commission (the “SEC”) staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant did not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act in the period of enactment. SAB 118 allowed registrants to record provisional amounts during a one-year measurement period. In the fourth quarter of 2017, a net provisional charge of $345 million was recorded which included the Transition Tax, the re-measurement of existing deferred tax balances, as well as local country income taxes, state income taxes and withholding taxes expected to be due upon repatriation of the earnings subject to the Transition Tax. In addition, at that time the Company was unable to estimate the allocation between continuing and discontinued operations of the tax benefit from foreign tax credits utilized in 2017. In the fourth quarter of 2018, the Company finalized its accounting for enactment date income tax effects of the Tax Reform Act after analyzing guidance issued during the measurement period, completing its reviews, filing its tax returns, and evaluating the local tax rules. The following table presents the impact of the accounting for the enactment of the Tax Reform Act on income tax expense (benefit) from continuing operations in our Consolidated Statements of Income for the years ended December 31, 2018 and 2017.
The payable balance for the Transition Tax was $240 million and $264 million as of December 31, 2018 and 2017, respectively. The change in liability is primarily attributable to updating the calculations pursuant to guidance issued during the measurement period and cash payments made during the year. The Company has elected to pay the liability in installments which are due through 2024. Other significant provisions of the Tax Reform Act that impact income taxes include: additional limitations on the timing of the deductibility of interest payable to related and unrelated lenders, further limitations on the deductibility of executive compensation, an alternative Base Erosion and Anti-Abuse Tax that limits deductions for certain amounts payable to foreign affiliates, and an additional U.S. tax on certain future foreign subsidiary earnings, whether or not distributed, (i.e., global intangible low-taxed income or “GILTI”). The Company has elected to account for GILTI in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the year ended December 31, 2018. Income before income tax from continuing operations and the provision for income tax from continuing operations consist of the following (in millions):
Income before income taxes shown above is based on the location of the business unit to which such earnings are attributable for tax purposes. In addition, because the earnings shown above may, in some cases, be subject to taxation in more than one country, the income tax provision shown above as U.K., U.S. or Other may not correspond to the geographic attribution of the earnings. The Company performs a reconciliation of the income tax provisions based on its domicile and statutory rate at each reporting period. The 2018, 2017, and 2016 reconciliations are based on the U.K. statutory corporate tax rate of 19.0%, 19.3%, and 20.0%, respectively. The reconciliation to the provisions from continuing operations reflected in the Consolidated Financial Statements is as follows:
For the tax impact of discontinued operations, see Note 5 “Discontinued Operations”. The components of the Company’s deferred tax assets and liabilities are as follows (in millions):
Deferred income taxes (assets and liabilities have been netted by jurisdiction) have been classified in the Consolidated Statements of Financial Position as follows (in millions):
Valuation allowances have been established primarily with regard to the tax benefits of certain net operating loss and capital loss carryforwards. Valuation allowances increased by $35 million as of December 31, 2018, when compared to December 31, 2017. The change is primarily attributable to capital loss carryforwards generated by the 2018 tax loss on disposition for which utilization is subject to limitation. The Company generally intends to limit distributions from foreign subsidiaries to earnings previously taxed in the U.S., primarily as a result of the Transition Tax, or GILTI. As of December 31, 2018, the Company has accrued $30 million for local country income taxes, withholding taxes and state income taxes on those undistributed earnings that are not indefinitely reinvested. The Company has not provided for deferred taxes on outside basis differences in our investments in our foreign subsidiaries that are unrelated to these accumulated undistributed earnings, as these outside basis differences are indefinitely reinvested. A determination of the unrecognized deferred taxes related to these other components of our outside basis differences is not practicable. The Company had the following net operating loss, capital loss, and interest carryforwards (in millions):
The U.K. operating losses, capital losses, and interest each have an indefinite carryforward period. The federal operating loss carryforwards as of December 31, 2018 expire at various dates from 2034 to 2037 and the state operating losses as of December 31, 2018 expire at various dates from 2019 to 2038. The federal capital losses can be carried back to 2015 or carried forward until 2023. State capital losses can be carried back to 2015 in certain jurisdictions or carried forward until 2023. Federal and state interest carryforwards have indefinite carryforward periods. Operating and capital losses in other non-U.S. jurisdictions have various carryforward periods and will begin to expire in 2019. The interest carryforwards in other non-U.S. jurisdictions have indefinite carryforward periods. During 2012, the Company was granted a tax holiday for the period from October 1, 2012 through September 30, 2022, with respect to withholding taxes and certain income derived from services in Singapore. This tax holiday and reduced withholding tax rate may be extended when certain conditions are met or may be terminated early if certain conditions are not met. The benefit realized was approximately $77 million, $45 million, and $46 million during the years ended December 31, 2018, 2017, and 2016, respectively. The impact of this tax holiday on diluted earnings per share was $0.31, $0.17, and $0.17 during the years ended December 31, 2018, 2017, and 2016, respectively. Uncertain Tax Positions The following is a reconciliation of the Company’s beginning and ending amount of uncertain tax positions (in millions):
The Company’s liability for uncertain tax positions as of December 31, 2018, 2017, and 2016, includes $228 million, $219 million, and $240 million, respectively, related to amounts that would impact the effective tax rate if recognized. It is possible that the amount of unrecognized tax benefits may change in the next twelve months; however, the Company does not expect the change to have a significant impact on its consolidated statements of income or consolidated balance sheets. These changes may be the result of settlements of ongoing audits. At this time, an estimate of the range of the reasonably possible outcomes within the twelve months cannot be made. The Company recognizes interest and penalties related to uncertain tax positions in its provision for income taxes. The Company accrued potential interest and penalties of $22 million, $11 million, and $15 million in 2018, 2017, and 2016, respectively. The Company recorded a liability for interest and penalties of $77 million, $55 million, and $48 million as of December 31, 2018, 2017, and 2016, respectively. The Company and its subsidiaries file income tax returns in their respective jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through 2007. Material U.S. state and local income tax jurisdiction examinations have been concluded for years through 2005. The Company has concluded income tax examinations in its primary non-U.S. jurisdictions through 2010. |
Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity Distributable Reserves As a company incorporated in England and Wales, Aon is required under U.K. law to have available “distributable reserves” to make share repurchases or pay dividends to shareholders. Distributable reserves may be created through the earnings of the U.K. parent company and, among other methods, through a reduction in share capital approved by the courts of England and Wales. Distributable reserves are not directly linked to a U.S. GAAP reported amount (e.g., retained earnings). As of December 31, 2018 and 2017, the Company had distributable reserves in excess of $2.2 billion and $1.2 billion, respectively. Ordinary Shares Aon has a share repurchase program authorized by the Company’s Board of Directors (the “Repurchase Program”). The Repurchase Program was established in April 2012 with $5.0 billion in authorized repurchases, and was increased by $5.0 billion in authorized repurchases in each of November 2014 and February 2017 for a total of $15.0 billion in repurchase authorizations. Under the Repurchase Program, Class A Ordinary Shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital. The following table summarizes the Company’s Share Repurchase activity (in millions, except per share data):
At December 31, 2018, the remaining authorized amount for share repurchase under the Repurchase Program was $4.0 billion. Under the Repurchase Program, the Company has repurchased a total of 118.3 million shares for an aggregate cost of approximately $11.0 billion. Net Income Per Share Weighted average ordinary shares outstanding are as follows (in millions):
Potentially issuable shares are not included in the computation of diluted net income per share if its inclusion would be antidilutive. There were no shares excluded from the calculation in 2018, 2017, or 2016. Dividends During 2018, 2017, and 2016, the Company paid dividends of $382 million, $364 million, and $345 million, respectively, to holders of its Class A Ordinary Shares. Dividends paid per Class A Ordinary Share were $1.56, $1.41 and $1.29 for the years ended December 31, 2018, 2017, and 2016 respectively. Accumulated Other Comprehensive Loss Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):
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Employee Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | Employee Benefits Defined Contribution Savings Plans Aon maintains defined contribution savings plans for the benefit of its employees. The expense recognized for these plans is included in Compensation and benefits in the Consolidated Statements of Income. The expense for the significant plans in the U.S., U.K., Netherlands and Canada is as follows (in millions):
Pension and Other Postretirement Benefits The Company sponsors defined benefit pension and postretirement health and welfare plans that provide retirement, medical, and life insurance benefits. The postretirement health care plans are contributory, with retiree contributions adjusted annually, and the life insurance and pension plans are generally noncontributory. The significant U.S., U.K., Netherlands and Canadian pension plans are closed to new entrants. Pension Plans The following tables provide a reconciliation of the changes in the projected benefit obligations and fair value of assets for the years ended December 31, 2018 and 2017 and a statement of the funded status as of December 31, 2018 and 2017, for the material U.K., U.S., and other major plans, which are located in the Netherlands, and Canada. These plans represent approximately 90% of the Company’s projected benefit obligations.
In September 2018, the Company made a cash contribution of $100 million to the qualified U.S. pension plan, which allowed the pension contribution tax deduction to be taken at the 2017 federal tax rate of 35%. In July 2017, the Company made a non-cash contribution of approximately $80 million to its U.S. pension plan. Amounts recognized in the Consolidated Statements of Financial Position consist of (in millions):
Amounts recognized in Accumulated other comprehensive loss (income) that have not yet been recognized as components of net periodic benefit cost at December 31, 2018 and 2017 consist of (in millions):
In 2018, U.S. plans with a projected benefit obligation (“PBO”) and an accumulated benefit obligation (“ABO”) in excess of the fair value of plan assets had a PBO of $2.9 billion, an ABO of $2.9 billion, and plan assets with a fair value of $1.8 billion. U.K. plans with a PBO in excess of the fair value of plan assets had a PBO of $47 million and plan assets with a fair value of $30 million, and U.K. plans with an ABO in excess of the fair value of plan assets had an ABO of $47 million and plan assets with a fair value of $30 million. Other plans with a PBO in excess of the fair value of plan assets had a PBO of $1.2 billion and plan assets with a fair value of $1.1 billion, and other plans with an ABO in excess of the fair value of plan assets had an ABO of $363 million and plan assets with a fair value of $271 million. In 2017, U.S. plans with a PBO and an ABO in excess of the fair value of plan assets had a PBO of $3.2 billion, an ABO of $3.2 billion, and plan assets of $2.0 billion. U.K. plans with a PBO in excess of the fair value of plan assets had a PBO of $52 million and plan assets with a fair value of $30 million, and plans with an ABO in excess of the fair value of plan assets had an ABO of $52 million and plan assets with a fair value of $30 million. Other plans with a PBO in excess of the fair value of plan assets had a PBO of $1.4 billion and plan assets with a fair value of $1.2 billion, and plans with an ABO in excess of the fair value of plan assets had an ABO of $1.3 billion and plan assets with a fair value of $1.2 billion. Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions):
The Company uses a full-yield curve approach in the estimation of the service and interest cost components of net periodic pension and postretirement benefit cost for its major pension and other postretirement benefit plans; this was obtained by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. In March 2017, the Company approved a plan to offer a voluntary one-time lump sum payment option to certain eligible employees of the Company’s U.K. pension plans that, if accepted, would settle the Company’s pension obligations to them. The lump sum cash payment offer closed during 2018. As of December 31, 2018, lump sum payments from plan assets of £139 million ($176 million using December 31, 2018 exchange rates) were paid. As a result of this settlement, the Company remeasured the assets and liabilities of the U.K. pension plan during the fourth quarter of 2018, which in aggregate resulted in a reduction to the projected benefit obligation of £122 million ($154 million using December 31, 2018 exchange rates) as well as a non-cash settlement charge of £28 million ($37 million using average exchange rates) for the year ended December 31, 2018. In total for 2017, lump sum payments from plan assets of £371 million ($496 million using December 31, 2017 exchange rates) were paid. As a result of this settlement, the Company remeasured the assets and liabilities of the U.K. pension plan during the fourth quarter of 2017, which in aggregate resulted in a reduction to the projected benefit obligation of £325 million ($434 million using December 31, 2017 exchange rates) as well as a non-cash settlement charge of £93 million ($125 million using average December 31, 2017 exchange rate) in the fourth quarter of 2017. In March 2016, the Company announced a plan to offer a voluntary one-time lump sum payment option to certain eligible former employees under one of the Company’s U.K. pension plans that, if accepted, would settle the Company’s pension obligations to them. The lump sum cash payment offer closed during the second quarter of 2016. In total, lump sum payments from plan assets of £116 million ($159 million using June 30, 2016 exchange rates) were paid. As a result of this settlement, the Company remeasured the assets and liabilities of the U.K. pension plan during the second quarter of 2016, which in aggregate resulted in a reduction to the projected benefit obligation of £103 million ($141 million using June 30, 2016 Exchange rates) as well as a non-cash settlement charge of £42 million ($61 million using average June 30, 2016 exchange rate) in the second quarter of 2016. In August 2016, the Company announced a plan to offer a voluntary one-time lump sum payment option to certain eligible former employees under one of the Company’s U.S. pension plans, that if accepted, would settle the Company’s pension obligations to them. The lump sum cash payment offer closed during the fourth quarter of 2016. In total, lump sum payments from plan assets of $281 million were paid. As a result of this settlement, the Company remeasured the assets and liabilities of the U.S. pension plan during the fourth quarter of 2016, which in aggregate resulted in a reduction to the projected benefit obligation of $325 million as well as a non-cash settlement charge of $158 million in the fourth quarter of 2016. The weighted-average assumptions used to determine benefit obligations are as follows:
The weighted-average assumptions used to determine the net periodic benefit cost are as follows:
The amounts in Accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2019, not including voluntary one-time lump sum payments, are $55 million in the U.S. and $42 million outside the U.S. Expected Return on Plan Assets To determine the expected long-term rate of return on plan assets, the historical performance, investment community forecasts and current market conditions are analyzed to develop expected returns for each asset class used by the plans. The expected returns for each asset class are weighted by the target allocations of the plans. The expected return of 7.71% on U.S. plan assets reflects a portfolio that is seeking asset growth through a higher equity allocation while maintaining prudent risk levels. The portfolio contains certain assets that have historically resulted in higher returns, as well as other financial instruments to minimize downside risk. No plan assets are expected to be returned to the Company during 2019. Fair value of plan assets The Company determined the fair value of plan assets through numerous procedures based on the asset class and available information. Refer to Note 16 “Fair Value Measurements and Financial Instruments” for a description of the procedures performed to determine the fair value of the plan assets. The fair values of the Company’s U.S. pension plan assets at December 31, 2018 and December 31, 2017, by asset category, are as follows (in millions):
The fair values of the Company’s major U.K. pension plan assets at December 31, 2018 and December 31, 2017, by asset category, are as follows (in millions):
The following table presents the changes in the Level 3 fair-value category in the Company’s U.K. pension plans for the years ended December 31, 2018 and December 31, 2017 (in millions):
The fair values of the Company’s other major pension plan assets at December 31, 2018 and December 31, 2017, by asset category, are as follows (in millions):
Investment Policy and Strategy The U.S. investment policy, as established by the Aon Retirement Plan Governance and Investment Committee (“RPGIC”), seeks reasonable asset growth at prudent risk levels within target allocations, which are 50% equity investments, 27% fixed income investments, and 23% other investments. Aon believes that plan assets are well-diversified and are of appropriate quality. The investment portfolio asset allocation is reviewed quarterly and re-balanced to be within policy target allocations. The investment policy is reviewed at least annually and revised, as deemed appropriate by the RPGIC. The investment policies for international plans are generally established by the local pension plan trustees and seek to maintain the plans’ ability to meet liabilities and to comply with local minimum funding requirements. Plan assets are invested in diversified portfolios that provide adequate levels of return at an acceptable level of risk. The investment policies are reviewed at least annually and revised, as deemed appropriate to ensure that the objectives are being met. At December 31, 2018, the weighted average targeted allocation for the U.K. and non-U.S. plans was 12% for equity investments, 79% for fixed income investments, and 9% for other investments. Cash Flows Contributions Based on current assumptions, in 2019, the Company expects to contribute approximately $80 million, $46 million, and $19 million to its U.K., U.S. and other significant international pension plans, respectively. Estimated Future Benefit Payments Estimated future benefit payments for plans, not including voluntary one-time lump sum payments, are as follows at December 31, 2018 (in millions):
U.S. and Canadian Other Postretirement Benefits The following table provides an overview of the accumulated projected benefit obligation, fair value of plan assets, funded status and net amount recognized as of December 31, 2018 and 2017 for the Company’s other significant postretirement benefit plans located in the U.S. and Canada (in millions):
Other information related to the Company’s other postretirement benefit plans are as follows:
Amounts recognized in Accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost at December 31, 2018 are $1 million and $6 million of prior service credit and net gain, respectively. The amount in Accumulated other comprehensive income expected to be recognized as a component of net periodic benefit cost during 2019 is $1.7 million and $0.1 million of net gain and prior service credit, respectively. Based on current assumptions, the Company expects:
The accumulated postretirement benefit obligation is increased by $5 million and decreased by $5 million by a respective 1% increase or decrease to the assumed health care trend rate. The service cost and interest cost components of net periodic benefits cost is increased by $0.5 million and decreased by $0.4 million by a respective 1% increase or decrease to the assumed health care trend rate. For most of the participants in the U.S. plan, Aon’s liability for future plan cost increases for pre-65 and Medical Supplement plan coverage is limited to 5% per annum. Although the net employer trend rates range from 4% to 7% per year, because of this cap, these plans are effectively limited to 5% per year in the future. |
Share-Based Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans | Share-Based Compensation Plans The following table summarizes share-based compensation expense recognized in the Consolidated Statements of Income in Compensation and benefits (in millions):
Restricted Share Units RSUs generally vest between three and five years. The fair value of RSUs is based upon the market value of Aon plc ordinary shares at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all non-vested awards. Compensation expense associated with RSUs is recognized on a straight-line basis over the requisite service period. Dividend equivalents are paid on certain RSUs, based on the initial grant amount. The following table summarizes the status of the Company’s RSUs, including shares related to the Divested Business (shares in thousands, except fair value):
The fair value of RSUs that vested during 2018, 2017 and 2016 was $189 million, $197 million, and $200 million, respectively. Unamortized deferred compensation expense was $346 million as of December 31, 2018, with a remaining weighted-average amortization period of approximately 2.1 years. Performance Share Awards The vesting of PSAs is contingent upon meeting a cumulative level of earnings per share related performance over a three-year period. The actual issue of shares may range from 0-200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of PSAs is based upon the market price of Aon plc ordinary shares at the date of grant. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits expense in the Consolidated Statements of Income, if necessary. Dividend equivalents are not paid on PSAs. The following table summarizes the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the years ended December 31, 2018, 2017, and 2016 (shares in thousands and dollars in millions, except fair value):
During 2018, the Company issued approximately 1.0 million shares in connection with performance achievements related to the 2015-2017 Leadership Performance Plan (“LPP”) cycle. During 2017, the Company issued approximately 0.9 million shares in connection with performance achievements related to the 2014-2016 LPP cycle. During 2016, the Company issued approximately 1.3 million shares in connection with performance achievements related to the 2013-2015 LPP cycle. |
Derivatives and Hedging |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging | Derivatives and Hedging The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross-currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income. The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 30-day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Consolidated Statements of Income. The notional and fair values of derivative instruments are as follows (in millions):
The amounts of derivative gains (losses) recognized in the Consolidated Financial Statements are as follows (in millions):
The amounts of derivative gains (losses) reclassified from Accumulated other comprehensive loss into Consolidated Statements of Income (effective portion) are as follows (in millions):
The Company estimates that approximately $13 million of pretax losses currently included within Accumulated other comprehensive loss will be reclassified in to earnings in the next twelve months. The amount of gain (loss) recognized in income on the ineffective portion of derivatives for 2018, 2017, and 2016 was insignificant. The Company recorded a loss of $27 million for 2018, a gain of $7 million in 2017, and an insignificant loss in 2016 in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. Net Investments in Foreign Operations Risk Management The Company uses non-derivative financial instruments to protect the value of its investments in a number of foreign subsidiaries. In 2016, the Company designated a portion of its euro-denominated commercial paper issuances as a non-derivative hedge of the foreign currency exposure of a net investment in its European operations. The change in fair value of the designated portion of the euro-denominated commercial paper due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustment, a component of Accumulated other comprehensive loss, to the extent it is effective as a hedge. The foreign currency translation adjustment of the hedged net investments is also recorded in Accumulated other comprehensive loss. Ineffective portions of net investment hedges, if any, are reclassified from Accumulated other comprehensive loss into earnings during the period of change. As of December 31, 2018, the Company has €220 million ($250 million at December 31, 2018 exchange rates) of outstanding euro-denominated commercial paper designated as a hedge of the foreign currency exposure of its net investment in its European operations. As of December 31, 2018, the unrealized gain recognized in Accumulated other comprehensive loss related to the net investment non derivative hedging instrument was $21 million. The Company did not reclassify any deferred gains or losses related to net investment hedges from Accumulated other comprehensive loss to earnings for 2018, 2017 and 2016. In addition, the Company did not incur any ineffectiveness related to net investment hedges during 2018, 2017 and 2016. |
Fair Value Measurements and Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Accounting standards establish a three tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows:
The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments, including pension assets (refer to Note 13 “Employee Benefits”): Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. Cash and cash equivalents consist of cash and institutional short-term investment funds. The Company reviews the short-term investment funds to obtain reasonable assurance that the fund net asset value is $1 per share. Equity investments consist of domestic and international equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities. Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Consolidated Financial Statements. Pooled funds consist of various equity, fixed income, commodity, and real estate mutual fund type investment vehicles. Pooled investment funds fair value is estimated based on the proportionate share ownership in the underlying net assets of the investment, which is based on the fair value of the underlying securities that trade on a national securities exchange. The Company gains an understanding of the investment guidelines and valuation policies of the fund and discusses fund performance with pooled fund managers. The Company obtains audited fund manager financial statements, when available. If the pooled fund is designed to replicate a publicly traded index, the Company compares the performance of the fund to the index to assess the reasonableness of the fair value measurement. Alternative investments consist of limited partnerships, private equity, and hedge funds. Alternative investment fair value is generally estimated based on the proportionate share ownership in the underlying net assets of the investment as determined by the general partner or investment manager. The valuations are based on various factors depending on investment strategy, proprietary models, and specific financial data or projections. The Company obtains audited fund manager financial statements, when available. The Company obtains a detailed understanding of the models, inputs, and assumptions used in developing prices provided by the investment managers (or appropriate party) through regular discussions. The Company also obtains the investment manger’s valuation policies and assesses the assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates in the Consolidated Financial Statements. Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities. Annuity contracts consist of insurance group annuity contracts purchased to match the pension benefit payment stream owed to certain selected plan participant demographics within a few major U.K. defined benefit plans. Annuity contracts are valued using a discounted cash flow model utilizing assumptions such as discount rate, mortality, and inflation. Real estate and REITs consist of publicly traded real estate investment trusts (“REITs”) and direct real estate investments. Level 1 REITs are valued using the closing stock price on a national securities exchange. Non Level 1 values are based on the proportionate share of ownership in the underlying net asset value as determined by the investment manager. The Company independently reviews the listing of Level 1 REIT securities in the portfolio and agrees the closing stock prices to a national securities exchange. The Company gains an understanding of the investment guidelines and valuation policies of the non Level 1 real estate funds and discusses performance with the fund managers. The Company obtains audited fund manager financial statements, when available. See the description of “Alternative investments” for further detail on valuation procedures surrounding non Level 1 REITs. Debt is carried at outstanding principal balance, less any unamortized issuance costs, discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements. The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2018 and December 31, 2017 (in millions):
There were no transfers of assets or liabilities between fair value hierarchy levels during 2018 or 2017. The Company recognized no realized or unrealized gains or losses in the Consolidated Statements of Income related to assets and liabilities measured at fair value using unobservable inputs in 2018, 2017, or 2016. The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table provides the carrying value and fair value for the Company’s term debt (in millions):
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Claims, Lawsuits and Other Contingencies |
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Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Claims, Lawsuits, and Other Contingencies | Claims, Lawsuits, and Other Contingencies Legal Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits and proceedings that arise in the ordinary course of business, which include E&O claims. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble or extraordinary damages. While Aon maintains meaningful E&O insurance and other insurance programs to provide protection against certain losses that arise in such matters, Aon has exhausted or materially depleted its coverage under some of the policies that protect the Company and, consequently, is self-insured or materially self-insured for some claims. Accruals for these exposures, and related insurance receivables, when applicable, are included in the Consolidated Statements of Financial Position and have been recognized in Other general expenses in the Consolidated Statements of Income to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Matters that are not probable and reasonably estimable are not accrued for in the financial statements. The Company has included in the current matters described below certain matters in which (1) loss is probable, (2) loss is reasonably possible; that is, more than remote but not probable, or (3) there exists the reasonable possibility of loss greater than the accrued amount. In addition, the Company may from time to time disclose matters for which the probability of loss could be remote but the claim amounts associated with such matters are potentially significant. The reasonably possible range of loss for the matters described below, in excess of amounts that are deemed probable and estimable and therefore already accrued, is estimated to be between $0 and $0.2 billion, exclusive of any insurance coverage. These estimates are based on currently available information. As available information changes, the matters for which Aon is able to estimate may change, and the estimates themselves may change. In addition, many estimates involve significant judgment and uncertainty. For example, at the time of making an estimate, Aon may only have limited information about the facts underlying the claim, and predictions and assumptions about future court rulings and outcomes may prove to be inaccurate. Although management at present believes that the ultimate outcome of all matters described below, individually or in the aggregate, will not have a material adverse effect on the consolidated financial position of Aon, legal proceedings are subject to inherent uncertainties and unfavorable rulings or other events. Unfavorable resolutions could include substantial monetary or punitive damages imposed on Aon or its subsidiaries. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected. Current Matters A pensions consulting and administration subsidiary of Aon provided advisory services to the Trustees of the Gleeds pension fund in the United Kingdom and, on occasion, to the relevant employer of the fund. In April 2014, the High Court, Chancery Division, London found that certain governing documents of the fund that sought to alter the fund’s benefit structure and that had been drafted by Aon were procedurally defective and therefore invalid. No lawsuit naming Aon as a party was filed, although a tolling agreement was entered. The High Court decision says that the additional liabilities in the pension fund resulting from the alleged defect in governing documents amount to approximately £45 million ($57 million at December 31, 2018 exchange rates). In December 2014, the Court of Appeal granted the employer leave to appeal the High Court decision. At a hearing in October 2016, the Court of Appeal approved a settlement of the pending litigation. On October 31, 2016, the fund’s trustees and employer sued Aon in the High Court, Chancery Division, London, alleging negligence and breach of duty in relation to the governing documents. The proceedings were served on Aon on December 20, 2016. The claimants seek damages of approximately £70 million ($88 million at December 31, 2018 exchange rates). In February 2018, the claimants instructed new lawyers and in May 2018 added their previous lawyers as defendants to the Aon lawsuit. The claimants allege that the previous lawyers were responsible for some of the losses sought from Aon because the lawyers gave negligent legal advice during the High Court and Court of Appeal proceedings. The trial of this matter has been set for November 2019. Aon believes that it has meritorious defenses and intends to vigorously defend itself against this claim. On June 29, 2015, Lyttelton Port Company Limited (“LPC”) sued Aon New Zealand in the Christchurch Registry of the High Court of New Zealand. LPC alleges, among other things, that Aon was negligent and in breach of contract in arranging LPC’s property insurance program for the period covering June 30, 2010, to June 30, 2011. LPC contends that acts and omissions by Aon caused LPC to recover less than it otherwise would have from insurers for losses suffered in the 2010 and 2011 Canterbury earthquakes. LPC claims damages of approximately NZD $184 million ($124 million at December 31, 2018 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. On October 3, 2017, Christchurch City Council (“CCC”) invoked arbitration to pursue a claim that it asserts against Aon New Zealand. Aon provided insurance broking services to CCC in relation to CCC’s 2010-2011 material damage and business interruption program. In December 2015, CCC settled its property and business interruption claim for its losses arising from the 2010-2011 Canterbury earthquakes against the underwriter of its material damage and business interruption program and the reinsurers of that underwriter. CCC contends that acts and omissions by Aon caused CCC to recover less in that settlement than it otherwise would have. CCC claims damages of approximately NZD $528 million ($355 million at December 31, 2018 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. A retail insurance brokerage subsidiary of Aon was sued on September 6, 2018 in the United States District Court for the Southern District of New York by a client, Pilkington North America, Inc., that sustained damage from a tornado to its Ottawa, Illinois property. The lawsuit seeks between $45 million and $85 million in property and business interruption damages from either its insurer or Aon. The insurer contends that insurance proceeds were limited to $15 million in coverage by a windstorm sub-limit purportedly contained in the policy procured by Aon for Pilkington. The insurer therefore has tendered $15 million to Pilkington and denied coverage for the remainder of the loss. Pilkington sued the insurer and Aon seeking full coverage for the loss from the insurer or, in the alternative, seeking the same damages against Aon on various theories of professional liability if the court finds that the $15 million sub-limit applies to the claim. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims. In April 2017, the FCA announced an investigation relating to suspected competition law breaches in the aviation and aerospace broking industry, which, for Aon in 2016, represented less than $100 million in global revenue. The European Commission has now assumed jurisdiction over the investigation in place of the FCA. Other antitrust agencies outside the European Union are also conducting formal or informal investigations regarding these matters. Aon intends to work diligently with all antitrust agencies concerned to ensure they can carry out their work as efficiently as possible. At this time, in light of the uncertainties and many variables involved, Aon cannot estimate the ultimate impact on our company from these investigations or any related private litigation, nor any damages, penalties, or fines related to them. There can be no assurance that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. Settled/Closed Matters A retail insurance brokerage subsidiary of Aon was sued on September 14, 2010 in the Chancery Court for Davidson County, Tennessee Twentieth Judicial District, at Nashville by a client, Opry Mills Mall Limited Partnership (“Opry Mills”), that sustained flood damage to its property in May 2010. The lawsuit sought $200 million in coverage from numerous insurers with whom this Aon subsidiary placed the client’s property insurance coverage. The insurers contended that only $50 million in coverage (which had already been paid) was available for the loss because the flood event occurred on property in a high hazard flood zone. Opry Mills sought full coverage from the insurers for the loss and sued this Aon subsidiary in the alternative for the same $150 million difference on various theories of professional liability if the court determined there was not full coverage. In addition, Opry Mills sought prejudgment interest, attorneys’ fees and enhanced damages which could have substantially increased Aon’s exposure. In March 2015, the trial court granted partial summary judgment in favor of plaintiffs and against the insurers, holding generally that the plaintiffs are entitled to $200 million in coverage under the language of the policies. In August 2015, a jury returned a verdict in favor of Opry Mills and against the insurers in the amount of $204 million. On January 26, 2018, the Tennessee Court of Appeals reversed and remanded, reversing summary judgment in favor of plaintiffs and concluding that coverage is limited to $50 million. In December 2018, the parties reach an agreement to settle this case, and the settlement is now concluded. The terms of this settlement did not have a significant impact on Aon’s results of operations or financial condition. Guarantees and Indemnifications The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable are included in the Company’s Consolidated Financial Statements, and are recorded at fair value. The Company expects that, as prudent business interests dictate, additional guarantees and indemnifications may be issued from time to time. Redomestication In connection with the Redomestication, the Company on April 2, 2012 entered into various agreements pursuant to which it agreed to guarantee the obligations of its subsidiaries arising under issued and outstanding debt securities. Those agreements included the (1) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (amending and restating the Indenture, dated as of September 10, 2010, between Aon Corporation and the Trustee), (2) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of December 16, 2002, between Aon Corporation and the Trustee), and (3) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of January 13, 1997, as supplemented by the First Supplemental Indenture, dated as of January 13, 1997). Sale of the Divested Business In connection with the sale of the Divested Business, the Company guaranteed future operating lease commitments related to certain facilities assumed by the Buyer. The Company is obligated to perform under the guarantees if the Divested Business defaults on such leases at any time during the remainder of the lease agreements, which expire on various dates through 2025. As of December 31, 2018, the undiscounted maximum potential future payments under the lease guarantee is $85 million, with an estimated fair value of $17 million. No cash payments were made in connection to the lease commitments during 2018. Additionally, the Company is subject to performance guarantee requirements under certain client arrangements that were assumed by the Buyer. Should the Divested Business fail to perform as required by the terms of the arrangements, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023. As of December 31, 2018, the undiscounted maximum potential future payments under the performance guarantees were $188 million, with an estimated fair value of $1 million. No cash payments were made in connection to the lease commitments during 2018. Letters of Credit Aon has entered into a number of arrangements whereby the Company’s performance on certain obligations is guaranteed by a third party through the issuance of a letter of credit (“LOCs”). The Company had total LOCs outstanding of approximately $83 million at December 31, 2018, compared to $96 million at December 31, 2017. These letters of credit cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries. Premium Payments The Company has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies. The maximum exposure with respect to such contractual contingent guarantees was approximately $103 million at December 31, 2018, compared to $95 million at December 31, 2017. |
Segment Information |
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Segment Information | Segment Information The Company operates as one segment that includes all of Aon’s continuing operations, which as a global professional services firm provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines which make up its principal products and services. The Chief Operating Decision Maker (the “CODM”) assesses the performance of the Company and allocates resources based on one segment: Aon United. The Company’s reportable operating segment has been determined using a management approach, which is consistent with the basis and manner in which Aon’s CODM uses financial information for the purposes of allocating resources and evaluating performance. The CODM assesses performance and allocates resources based on total Aon results against its key four metrics, including organic revenue growth, expense discipline, and collaborative behaviors that maximize value for Aon and its shareholders, regardless of which revenue line it benefits. As Aon operates as one segment, segment profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income. Refer to Note 3 “Revenue from Contracts with Customers” for further information on revenue by principal service line. Consolidated Non-current assets by geographic area are as follows (in millions):
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Guarantee of Registered Securities |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantee of Registered Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantee of Registered Securities | Guarantee of Registered Securities As described in Note 17 “Claims, Lawsuits, and Other Contingencies,” in connection with the Redomestication, Aon plc entered into various agreements pursuant to which it agreed to guarantee the obligations of Aon Corporation arising under issued and outstanding debt securities, including the 5.00% Notes due September 2020, the 8.205% Notes due January 2027, and the 6.25% Notes due September 2040 (collectively, the “Aon Corp Notes”). Additionally, Aon plc has agreed to guarantee the obligations of Aon Corporation arising under the 4.50% Senior Notes due 2028. Aon Corporation is a 100% indirectly owned subsidiary of Aon plc. All guarantees of Aon plc are full and unconditional. There are no other subsidiaries of Aon plc that are guarantors of the Aon Corp Notes. In addition, Aon Corporation entered into an agreement pursuant to which it agreed to guarantee the obligations of Aon plc arising under the 4.25% Notes due 2042 exchanged for Aon Corporation’s outstanding 8.205% Notes due January 2027 and has also agreed to guarantee the obligations of Aon plc arising under the 4.45% Notes due 2043, the 4.00% Notes due November 2023, the 2.875% Notes due May 2026, the 3.50% Notes due June 2024, the 4.60% Notes due June 2044, the 4.75% Notes due May 2045, the 2.80% Notes due March 2021, and the 3.875% Notes due December 2025 (collectively, the “Aon plc Notes”). In each case, the guarantee of Aon Corporation is full and unconditional. There are no subsidiaries of Aon plc, other than Aon Corporation, that are guarantors of the Aon plc Notes. As a result of the existence of these guarantees, the Company has elected to present the financial information set forth in this footnote in accordance with Rule 3-10 of Regulation S-X. In December 2018, Aon plc obtained direct ownership in two subsidiaries that were previously indirectly owned by Aon Corporation. The financial results of both subsidiaries are included in the Other Non-Guarantor Subsidiaries column of the Condensed Consolidating Financial Statements. The Company has reflected this transfer on the Condensed Consolidating Statements of Income and Condensed Consolidating Statements of Comprehensive Income for the periods ended December 31, 2017 and 2016 and the Condensed Consolidating Statement of Financial Position for the period ended December 31, 2017. The following tables set forth Condensed Consolidating Statements of Income and Condensed Consolidating Statements of Comprehensive Income for the years ended December 31, 2018, 2017, and 2016, Condensed Consolidating Statements of Financial Position as of December 31, 2018 and December 31, 2017, and Condensed Consolidating Statements of Cash Flows for the years ended December 31, 2018, 2017, and 2016, in accordance with Rule 3-10 of Regulation S-X. The condensed consolidating financial information includes the accounts of Aon plc, the accounts of Aon Corporation, and the combined accounts of the non-guarantor subsidiaries. The condensed consolidating financial statements are presented in all periods as a merger under common control. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions. Condensed Consolidating Statement of Income
Condensed Consolidating Statement of Income
Condensed Consolidating Statement of Income
Condensed Consolidating Statement of Comprehensive Income
Condensed Consolidating Statement of Comprehensive Income
Condensed Consolidating Statement of Comprehensive Income
Condensed Consolidating Statement of Financial Position
Condensed Consolidating Statement of Financial Position
Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
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Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) Selected quarterly financial data for the years ended December 31, 2018 and 2017 are as follows (in millions, except per share data):
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Summary of Significant Accounting Principles and Practices (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Accounting | The accompanying Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Financial Statements include the accounts of Aon and its controlled subsidiaries. Intercompany accounts and transactions have been eliminated. The Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for all periods presented. |
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Use of Estimates | Use of Estimates The preparation of the accompanying Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the Financial Statements in future periods. |
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Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Aon plc and those entities in which the Company has a controlling financial interest. To determine if Aon holds a controlling financial interest in an entity, the Company first evaluates if it is required to apply the variable interest entity (VIE) model to the entity, otherwise, the entity is evaluated under the voting interest model. Where Aon holds rights that give it the power to direct the activities of a VIE that most significantly impact the VIE's economic performance, combined with a variable interest that gives the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company has a controlling financial interest in that VIE. Aon holds a controlling financial interest in entities that are not VIEs where it, directly or indirectly, holds more than 50% of the voting rights or where it exercises control through substantive participating rights or as a general partner. |
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Revenue Recognition | Revenue Recognition The Company generates revenues primarily through commissions, compensation from insurance and reinsurance companies for services provided to them, and fees from customers. Commissions and fees for brokerage services vary depending upon several factors, which may include the amount of premium, the type of insurance or reinsurance coverage provided, the particular services provided to a client, insurer, or reinsurer, and the capacity in which the Company acts. Compensation from insurance and reinsurance companies includes: (1) fees for consulting and analytics services and (2) fees and commissions for administrative and other services provided to or on behalf of insurers. In Aon’s capacity as an insurance and reinsurance broker, the service promised to the customer is placement of an effective insurance or reinsurance policy, respectively. At the completion of the insurance or reinsurance policy placement process once coverage is effective, the customer has obtained control over the services promised by the Company. Judgment is not typically required when assessing whether the coverage is effective. Fees from clients for advice and consulting services are dependent on the extent and value of the services provided. Payment terms for the Company’s principal service lines are discussed below; the Company believes these terms are consistent with current industry practices. Significant financing components are typically not present in Aon’s arrangements. The Company recognizes revenue when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements where control is transferred over time, an input or output method is applied that represents a faithful depiction of the progress towards completion of the performance obligation. For arrangements that include variable consideration, the Company assesses whether any amounts should be constrained. For arrangements that include multiple performance obligations, the Company allocates consideration based on their relative fair values. Costs incurred by the Company in obtaining a contract are capitalized and amortized on a systematic basis that is consistent with the transfer of control of the services to which the asset relates, considering anticipated renewals when applicable. Certain contract related costs, including pre-placement brokerage costs, are capitalized as a cost to fulfill and are amortized on a systematic basis consistent with the transfer of control of the services to which the asset relates, which is generally less than one year. The Company has elected to apply practical expedients to not disclose the revenue related to unsatisfied performance obligations if (1) the contract has an original duration of 1 year or less, (2) the Company has recognized revenue for the amount in which it has the right to bill, and (3) the variable consideration is allocated entirely to an unsatisfied performance obligation which is recognized as a series of distinct goods or services that form a single performance obligation. Disaggregation of Revenue The following is a description of principal service lines from which the Company generates its revenue: Commercial Risk Solutions includes retail brokerage, cyber solutions, global risk consulting, and captives. Revenue primarily includes insurance commissions and fees for services rendered. Revenue is predominantly recognized at a point in time upon the effective date of the underlying policy, or for a limited number of arrangements, over the term of the arrangement using output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements recognized over time, various output measures, including units transferred and time elapsed, are utilized to provide a faithful depiction of the progress towards completion of the performance obligation. Revenue is recorded net of allowances for estimated policy cancellations, which are determined based on an evaluation of historical and current cancellation data. Commissions and fees for brokerage services may be invoiced near the effective date of the underlying policy or over the term of the arrangement in installments during the policy period. Reinsurance Solutions includes treaty and facultative reinsurance brokerage and capital markets. Revenue primarily includes reinsurance commissions and fees for services rendered. Revenue is predominantly recognized at a point in time upon the effective date of the underlying policy (or policies), or for a limited number of arrangements, over the term of the arrangement using output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements recognized over time, various output measures, including units delivered and time elapsed, are utilized to provide a faithful depiction of the progress towards completion of the performance obligation. Commissions and fees for brokerage services may be invoiced at the inception of the reinsurance period for certain reinsurance brokerage, or more commonly, over the term of the arrangement in installments based on deposit or minimum premiums for most treaty reinsurance arrangements. Retirement Solutions includes core retirement, investment consulting, and talent, rewards & performance. Revenue consists primarily of fees paid by customers for consulting services, such as risk management strategies, health and benefits, and human capital consulting services. Revenue recognized for these arrangements is predominantly recognized over the term of the arrangement using input or output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services, or for certain arrangements, at a point in time upon completion of the services. For consulting arrangements recognized over time, revenue will be recognized based on a measure of progress that depicts the transfer of control of the services to the customer, utilizing an appropriate input or output measure to provide a reasonable assessment of the progress towards completion of the performance obligation including units delivered or time elapsed. Fees paid by customers for consulting services are typically charged on an hourly, project or fixed-fee basis, and revenue for these arrangements is typically recognized based on time incurred, days elapsed, or reports delivered. Revenue from time-and-materials or cost-plus arrangements are recognized as services are performed using input or output measures to provide a reasonable assessment of the progress towards completion of the performance obligation including hours worked, and revenue for these arrangements is typically recognized based on time and materials incurred. Reimbursements received for out-of-pocket expenses are recorded as a component of revenue. Payment terms vary but are typically over the contract term in installments. Health Solutions includes health and benefits brokerage and health care exchanges. Revenue primarily includes insurance commissions and fees for services rendered. For brokerage commissions, revenue is predominantly recognized at the effective date of the underlying policy (or policies), or for a limited number of arrangements, over the term of the arrangement to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services using input or output measures, including units delivered or time elapsed, to provide a faithful depiction of the progress towards completion of the performance obligation. Revenue from health care exchange arrangements are typically recognized upon successful enrollment of participants, net of a reserve for estimated cancellations. Commissions and fees for brokerage services may be invoiced at the effective date of the underlying policy or over the term of the arrangement in installments during the policy period. Payment terms for other services vary but are typically over the contract term in installments. Data & Analytic Services includes Affinity, Aon InPoint, and ReView. Revenue consists primarily of fees for services rendered and is generally recognized over the term of the arrangement to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. Payment terms vary but are typically over the contract term in installments. For Data & Analytic Services arrangements recognized over time, revenue will be recognized based on a measure of progress that depicts the transfer of control of the services to the customer, utilizing an appropriate input or output measure to provide a faithful depiction of the progress towards completion of the performance obligation, including units delivered or time elapsed. Input and output measures utilized vary based on the arrangement but typically include reports provided or days elapsed. Contract Costs The Company recognizes an asset for costs incurred to fulfill a contract for costs that are specifically identified and relate to a contract or anticipated contract, generate or enhance resources used in satisfying the Company’s performance obligations, and are expected to be recovered. Assets recognized as costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, as well as other costs, are amortized on a systematic basis that is consistent with the transfer of control of the services to which the asset relates. The amortization is primarily included in Compensation and benefits on the Consolidated Statements of Income. The Company capitalizes incremental costs to obtain a contract with a customer that are expected to be recovered. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, will be amortized on a systematic basis that is consistent with the transfer of control of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company has applied a practical expedient and recognized the costs of obtaining a contract as an expense when incurred. The amortization is primarily included in Compensation and benefits on the Consolidated Statements of Income. |
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Share-Based Compensation Costs | Share-Based Compensation Costs Share-based payments to employees, including grants of restricted share units and performance share awards, are measured based on estimated grant date fair value. The Company recognizes compensation expense over the requisite service period for awards expected to ultimately vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. |
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Pension and Other Post-Retirement Benefits | Pension and Other Postretirement Benefits The Company records net periodic cost relating to its pension and other postretirement benefit plans based on calculations that include various actuarial assumptions, including discount rates, assumed rates of return on plan assets, inflation rates, mortality rates, compensation increases, and turnover rates. The Company reviews its actuarial assumptions on an annual basis and modifies these assumptions based on current rates and trends. The effects of gains, losses, and prior service costs and credits are amortized over future service periods or future estimated lives if the plans are frozen. The funded status of each plan, calculated as the fair value of plan assets less the benefit obligation, is reflected in the Company’s Consolidated Statements of Financial Position using a December 31 measurement date. |
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Net Income per Share | Net Income per Share Basic net income per share is computed by dividing net income available to ordinary shareholders by the weighted-average number of ordinary shares outstanding, including participating securities, which consist of unvested share awards with non-forfeitable rights to dividends. Diluted net income per share is computed by dividing net income available to ordinary shareholders by the weighted-average number of ordinary shares outstanding, which have been adjusted for the dilutive effect of potentially issuable ordinary shares, including certain contingently issuable shares. The diluted earnings per share calculation reflects the more dilutive effect of either (1) the two-class method that assumes that the participating securities have not been exercised, or (2) the treasury stock method. Potentially issuable shares are not included in the computation of diluted income per share if their inclusion would be antidilutive. |
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Cash and Cash Equivalents and Short-term Investments | Cash and Cash Equivalents and Short-term Investments Cash and cash equivalents include cash balances and all highly liquid investments with initial maturities of three months or less. Short-term investments consist of money market funds. The estimated fair value of Cash and cash equivalents and Short-term investments approximates their carrying values. |
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Fiduciary Assets and Liabilities | Fiduciary Assets and Liabilities In its capacity as an insurance agent and broker, Aon collects premiums from insureds and, after deducting its commission, remits the premiums to the respective insurers. Aon also collects claims or refunds from insurers on behalf of insureds. Uncollected premiums from insureds and uncollected claims or refunds from insurers are recorded as Fiduciary assets in the Company’s Consolidated Statements of Financial Position. Unremitted insurance premiums and claims are held in a fiduciary capacity and the obligation to remit these funds is recorded as Fiduciary liabilities in the Company’s Consolidated Statements of Financial Position. |
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company’s allowance for doubtful accounts with respect to receivables is based on a combination of factors, including evaluation of historical write-offs, aging of balances, and other qualitative and quantitative analyses. |
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Fixed Assets | Fixed Assets Fixed assets are stated at cost, less accumulated depreciation. Included in this category is internal use software, which is software that is acquired, internally-developed or modified solely to meet internal needs, with no plan to market externally. Costs related to directly obtaining, developing, or upgrading internal use software are capitalized. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are generally as follows:
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of acquisition cost over the fair value of the net assets in the acquisition of a business. Goodwill is allocated to various reporting units. Upon disposition of a business entity, goodwill is allocated to the disposed entity based on the fair value of that entity compared to the fair value of the reporting unit in which it was included. Goodwill is not amortized, but instead is tested for impairment at least annually. The goodwill impairment test is performed at the reporting unit level. The Company may initially perform a qualitative analysis to determine if it is more likely than not that the goodwill balance is impaired. If a qualitative assessment is not performed or if a determination is made that it is not more likely than not that their value of the reporting unit exceeds its carrying amount, then the Company will perform a two-step quantitative analysis. First, the fair value of each reporting unit is compared to its carrying value. If the fair value of the reporting unit is less than its carrying value, the Company performs a hypothetical purchase price allocation based on the reporting unit’s fair value to determine the fair value of the reporting unit’s goodwill. Any resulting difference will be a charge to Amortization and impairment of intangible assets in the Consolidated Statements of Income in the period in which the determination is made. Fair value is determined using a combination of present value techniques and market prices of comparable businesses. We classify our intangible assets acquired as either tradenames, customer-related and contract-based, or technology and other. Amortization basis and estimated useful lives by intangible asset type are generally as follows:
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Derivatives | Derivatives Derivative instruments are recognized in the Consolidated Statements of Financial Position at fair value. Where the Company has entered into master netting agreements with counterparties, the derivative positions are netted by counterparties and are reported accordingly in Other assets or Other liabilities. Changes in the fair value of derivative instruments are recognized in earnings each period, unless the derivative is designated and qualifies as a cash flow or net investment hedge. The Company has historically designated the following hedging relationships for certain transactions: (1) a hedge of the change in fair value of a recognized asset or liability or firm commitment (“fair value hedge”), (2) a hedge of the variability in cash flows from a recognized variable-rate asset or liability or forecasted transaction (“cash flow hedge”), and (3) a hedge of the net investment in a foreign operation (“net investment hedge”). In order for a derivative to qualify for hedge accounting, the derivative must be formally designated as a fair value, cash flow, or a net investment hedge by documenting the relationship between the derivative and the hedged item. The documentation must include a description of the hedging instrument, the hedged item, the risk being hedged, Aon’s risk management objective and strategy for undertaking the hedge, the method for assessing the effectiveness of the hedge, and the method for measuring hedge ineffectiveness. Additionally, the hedge relationship must be expected to be highly effective at offsetting changes in either the fair value or cash flows of the hedged item at both the inception of the hedge and on an ongoing basis. Aon assesses the ongoing effectiveness of its hedges and measures and records hedge ineffectiveness, if any, at the end of each quarter or more frequently if facts and circumstances require. For a derivative designated as a fair value hedging instrument, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. The effect is to reflect in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value. For a cash flow hedge that qualifies for hedge accounting, the effective portion of the change in fair value of a hedging instrument is recognized in Other comprehensive income (“OCI”) and subsequently reclassified to earnings in the same period the hedged item impacts earnings. The ineffective portion of the change in fair value is recognized immediately in earnings. For a net investment hedge, the effective portion of the change in fair value of the hedging instrument is recognized in OCI as part of the cumulative translation adjustment, while the ineffective portion is recognized immediately in earnings. Changes in the fair value of a derivative that is not designated as part of a hedging relationship (commonly referred to as an “economic hedge”) are recorded in Other income (expense) in the Consolidated Statements of Income. The Company discontinues hedge accounting prospectively when (1) the derivative expires or is sold, terminated, or exercised, (2) the qualifying criteria are no longer met, or (3) management removes the designation of the hedging relationship. |
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Foreign Currency | Foreign Currency Certain of the Company’s non-U.S. operations use their respective local currency as their functional currency. These operations that do not have the U.S. dollar as their functional currency translate their financial statements at the current rates of exchange in effect at the balance sheet date and revenues and expenses using rates that approximate those in effect during the period. The resulting translation adjustments are included in Net foreign currency translation adjustments within the Consolidated Statements of Shareholders’ Equity. Further, for all entities, gains and losses from the remeasurement of monetary assets and liabilities that are denominated in a non-functional currency of that entity are included in Other income (expense) within the Consolidated Statements of Income. |
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Income Taxes | Income Taxes Deferred income taxes are recognized for the effect of temporary differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted marginal tax rates and laws that are currently in effect. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in the period when the rate change is enacted. Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be objectively verified. Deferred tax assets are realized by having sufficient future taxable income to allow the related tax benefits to reduce taxes otherwise payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carry-forwards, taxable income in carry-back years, and tax planning strategies that are both prudent and feasible. The Company recognizes the effect of income tax positions only if sustaining those positions is more likely than not. Tax positions that meet the more likely than not recognition threshold but are not highly certain are initially and subsequently measured based on the largest amount of benefit that is greater than 50% likely of being realized upon settlement with the taxing authority. Only information that is available at the reporting date is considered in the Company’s recognition and measurement analysis, and events or changes in facts and circumstances are accounted for in the period in which the event or change in circumstance occurs. The Company records penalties and interest related to unrecognized tax benefits in Income taxes in the Company’s Consolidated Statements of Income. |
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New Accounting Pronouncements | New Accounting Pronouncements Adoption of New Accounting Standards Presentation of Net Periodic Pension and Postretirement Benefit Costs In March 2017, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. The Company has applied the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Consolidated Statement of Income, and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension costs and net periodic postretirement benefit cost in assets. The new guidance allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company did not apply the practical expedient upon adoption of this guidance. The new guidance was effective for Aon in the first quarter of 2018. The adoption of this guidance had no impact on the net income of the Company. Upon adoption of the guidance, the presentation of the results reflect a change in Operating income (loss) offset by an equal and offsetting change in Other income (expense) for each period, as follows:
Income Tax Consequences of Intercompany Transactions In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory. The guidance requires that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e. depreciated, amortized, or impaired). The Company has applied the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The new guidance was effective for Aon in the first quarter of 2018. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Deferred tax assets of $23 million, an increase to Deferred tax liabilities of $12 million, and a decrease to Other non-current assets of $26 million on the Consolidated Statement of Financial Position through a cumulative adjustment of $15 million decrease to Retained earnings. For the twelve months ended December 31, 2018, the impact of adopting this guidance on the Consolidated Statement of Income was insignificant. Statement of Cash Flows In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity no longer has discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard was effective for the Company in the first quarter of 2018. The adoption of this guidance had no impact on the Company’s Consolidated Statements of Cash Flows. Financial Assets and Liabilities In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. The Company applied the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with the exception of the amendments related to equity securities without readily determinable fair values, including disclosure requirements, which were applied prospectively. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Accumulated other comprehensive loss of $1 million on the Consolidated Statement of Financial Position through a cumulative adjustment of $1 million increase to Retained earnings. For the twelve months ended December 31, 2018, the impact of adopting this guidance on the Consolidated Statement of Income was insignificant. Revenue Recognition In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers (the “Standard” or “ASC 606”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP (“ASC 605”). The core principal of the Standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Standard also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company elected to apply the modified retrospective adoption approach to all contracts. Under this approach, prior periods were not restated. Rather, revenues and other disclosures for prior periods were provided in the notes to the financial statements as previously reported under ASC 605, and the cumulative effect of initially applying the guidance was recognized as an adjustment to Retained earnings. The following summarizes the significant changes to the Company as a result of the adoption of ASC 606 on January 1, 2018.
As a result of applying the modified retrospective method to adopt ASC 606, the following adjustments were made to the Consolidated Statement of Financial Position as of January 1, 2018:
The following tables summarize the impacts of adopting ASC 606 on the Company’s Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the twelve months ended December 31, 2018. Consolidated Statement of Income
Adoption of ASC 606 had a favorable impact of $78 million on net income from continuing operations, or $0.32 per share, for the twelve months ended December 31, 2018. Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
The adoption of ASC 606 had no impact on total Cash provided by operating activities. Refer to Note 3 “Revenue from Contracts with Customers” for further information. Accounting Standards Issued but Not Yet Adopted Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued new accounting guidance related to the disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans. The guidance requires sponsors of these plans to provide additional disclosures, including weighted-average interest rates used in the entity’s cash balance pension plans and a narrative description of reasons for any significant gains or losses impacting the benefit obligation for the period, and eliminates certain previous disclosure requirements. The guidance is effective for Aon in the first quarter of 2021 with early adoption permitted and will be applied retrospectively. The Company is currently evaluating the impact that the guidance will have on the Financial Statements and the period of adoption. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued new accounting guidance related to reclassification of certain tax effects from accumulated other comprehensive income. The guidance allows a reclassification from accumulated comprehensive income to retained earnings for stranded tax effects resulting from the Tax Reform Act. In addition, the entity is required to provide certain disclosures regarding stranded tax effects. The guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted, including adoption in any interim period. The guidance should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. The Company does not anticipate electing to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings and will adopt the disclosure guidance in the first quarter of 2019. Refer to Note 11 “Income Taxes” for further discussion of the Tax Reform Act. Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued new accounting guidance on targeted improvements to accounting for hedging activities. The new guidance amends its hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the effect of a hedging instrument to be presented in the same income statement line as the hedged item. Further, in December 2018, the FASB issued additional guidance which added to the list of U.S. benchmark interest rates that are eligible to be hedged, the Overnight Index Swap (“OIS”) rate based on the Secured Overnight Financing Rate. Thus, entities may designate the OIS rate in hedging relationships they enter into on or after the date of adoption of this guidance. An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the period of adoption. Changes to income statement presentation and financial statement disclosures will be applied prospectively. The new guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted. The Company will adopt the new guidance in the first quarter of 2019 and does not expect a significant impact on the Financial Statements. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued new accounting guidance on simplifying the test for goodwill impairment. Currently the standard requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. The new guidance removes Step 2, resulting in an entity applying a line-step quantitative test and will record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. An entity will apply the new guidance on a prospective basis. The new guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. The Company is currently evaluating the period of adoption, but does not expect a significant impact on the Financial Statements. Credit Losses In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments. The new guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. The Company is currently evaluating the impact that the standard will have on the Financial Statements and period of adoption. Leases In February 2016, the FASB issued a new accounting standard on leases, which requires lessees to recognize assets and liabilities for most leases. Under the new standard, a lessee is required to recognize in the Consolidated Statement of Financial Position liabilities to make future lease payments and right-of-use assets representing its right to use the underlying assets for the lease term. The recognition, measurement, timing, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current U.S. GAAP standards. The new standard is effective for the Company in the first quarter of 2019, with early adoption permitted and must be applied using a modified retrospective transition approach. In July 2018, the FASB amended this guidance and provided an additional transition method with which to adopt the guidance. Under the additional transition method, entities may elect to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption. Under this transition method, an entity's reporting for the comparative periods prior to adoption presented in the financial statements would continue to be in accordance with current lease guidance and thus not restated. The Company will adopt the new standard as of January 1, 2019 using the cumulative-effect adjustment transition method approved by the FASB. Additionally, the Company will provide expanded lease disclosures required under the new standard in the first quarter of 2019, including both qualitative and quantitative information. The modified retrospective approach includes several optional practical expedients that entities may elect to apply upon transition. The Company has determined it will elect the package of practical expedients permitted under the transition guidance within the new standard, which allows a lessee to carryforward their population of existing leases, the classification of each lease, as well as the treatment of initial direct costs as of the period of adoption. In addition, the Company will elect the practical expedient related to lease and non-lease components, as an accounting policy election for all asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component. Furthermore, the Company has made a policy election to not recognize right-of-use assets and lease liabilities that arise from leases with an initial term of twelve months or less on the Consolidated Statements of Financial Position. Lastly, the Company has determined it will not elect the practical expedient related to hindsight in determining the lease term and in assessing impairment of right-of-use assets. The Company will implement the standard as of January 1, 2019 and has executed a comprehensive approach to identify arrangements that may contain a lease, has performed completeness assessments over the identified lease population, and has implemented system solutions and processes to appropriately account for the lease right-of-use assets and lease liabilities upon transition and an ongoing basis. Further, control activities related to the adoption of this standard as well as ongoing transactional processes and procedures have been designed and begun to be implemented to ensure compliance with the new standard. The Company expects to recognize lease liabilities ranging from approximately $1.3 billion to $1.5 billion and corresponding right-of-use assets ranging from $1.1 billion to $1.3 billion on the Consolidated Statements of Financial Position upon the adoption of this standard. The Company does not anticipate that the new standard will have a significant impact on the Consolidated Statements of Income or the Consolidated Statements of Cash Flows. |
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Fair Value Measurements | Accounting standards establish a three tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows:
The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments, including pension assets (refer to Note 13 “Employee Benefits”): Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. Cash and cash equivalents consist of cash and institutional short-term investment funds. The Company reviews the short-term investment funds to obtain reasonable assurance that the fund net asset value is $1 per share. Equity investments consist of domestic and international equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities. Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Consolidated Financial Statements. Pooled funds consist of various equity, fixed income, commodity, and real estate mutual fund type investment vehicles. Pooled investment funds fair value is estimated based on the proportionate share ownership in the underlying net assets of the investment, which is based on the fair value of the underlying securities that trade on a national securities exchange. The Company gains an understanding of the investment guidelines and valuation policies of the fund and discusses fund performance with pooled fund managers. The Company obtains audited fund manager financial statements, when available. If the pooled fund is designed to replicate a publicly traded index, the Company compares the performance of the fund to the index to assess the reasonableness of the fair value measurement. Alternative investments consist of limited partnerships, private equity, and hedge funds. Alternative investment fair value is generally estimated based on the proportionate share ownership in the underlying net assets of the investment as determined by the general partner or investment manager. The valuations are based on various factors depending on investment strategy, proprietary models, and specific financial data or projections. The Company obtains audited fund manager financial statements, when available. The Company obtains a detailed understanding of the models, inputs, and assumptions used in developing prices provided by the investment managers (or appropriate party) through regular discussions. The Company also obtains the investment manger’s valuation policies and assesses the assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates in the Consolidated Financial Statements. Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities. Annuity contracts consist of insurance group annuity contracts purchased to match the pension benefit payment stream owed to certain selected plan participant demographics within a few major U.K. defined benefit plans. Annuity contracts are valued using a discounted cash flow model utilizing assumptions such as discount rate, mortality, and inflation. Real estate and REITs consist of publicly traded real estate investment trusts (“REITs”) and direct real estate investments. Level 1 REITs are valued using the closing stock price on a national securities exchange. Non Level 1 values are based on the proportionate share of ownership in the underlying net asset value as determined by the investment manager. The Company independently reviews the listing of Level 1 REIT securities in the portfolio and agrees the closing stock prices to a national securities exchange. The Company gains an understanding of the investment guidelines and valuation policies of the non Level 1 real estate funds and discusses performance with the fund managers. The Company obtains audited fund manager financial statements, when available. See the description of “Alternative investments” for further detail on valuation procedures surrounding non Level 1 REITs. Debt is carried at outstanding principal balance, less any unamortized issuance costs, discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements. |
Summary of Significant Accounting Principles and Practices (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated useful lives of assets | Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are generally as follows:
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Schedule of other intangible assets by asset class | Amortization basis and estimated useful lives by intangible asset type are generally as follows:
Other intangible assets by asset class are as follows (in millions):
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Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Consolidated Statement of Financial Position
The following tables summarize the impacts of adopting ASC 606 on the Company’s Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the twelve months ended December 31, 2018. Consolidated Statement of Income
As a result of applying the modified retrospective method to adopt ASC 606, the following adjustments were made to the Consolidated Statement of Financial Position as of January 1, 2018:
Upon adoption of the guidance, the presentation of the results reflect a change in Operating income (loss) offset by an equal and offsetting change in Other income (expense) for each period, as follows:
Consolidated Statement of Cash Flows
As a result of applying the modified retrospective method to adopt ASC 606, the following adjustments were made to the Consolidated Statement of Financial Position as of January 1, 2018:
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Revenue from Contracts with Customers (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table summarizes revenue from contracts with customers by principal service line (in millions):
Consolidated revenue from contracts with customers by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions):
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Capitalized Contract Cost | An analysis of the changes in the net carrying amount of costs to obtain contracts with customers is as follows (in millions):
An analysis of the changes in the net carrying amount of costs to fulfill contracts with customers is as follows (in millions):
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Other Financial Data (Tables) |
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Other Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (Expense) | Other income (expense) consists of the following (in millions):
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Schedule of Allowance for Doubtful Accounts | An analysis of the allowance for doubtful accounts is as follows (in millions):
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Schedule of Other Current Assets | The components of Other current assets are as follows (in millions):
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Components of Fixed assets, net | The components of Fixed assets, net are as follows (in millions):
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Schedule of Other Non-current Assets | The components of Other non-current assets are as follows (in millions):
(1) Refer to Note 3 “Revenue from Contracts with Customers” for further information. |
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Schedule of Other Current Liabilities | The components of Other current liabilities are as follows (in millions):
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Schedule of Other Non-current Liabilities | The components of Other non-current liabilities are as follows (in millions):
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Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | The following table presents the financial results of the Divested Business (in millions):
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Restructuring Restructuring and Related Activities (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The following table summarizes restructuring and separation costs by type that have been incurred through December 31, 2018 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs by type may be revised in future periods as these assumptions are updated:
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Schedule of Restructuring Reserve by Type of Cost | The changes in the Company’s liabilities for the Restructuring Plan as of December 31, 2018 are as follows (in millions):
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Acquisitions and Dispositions of Businesses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations and Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consideration transferred and preliminary value of intangible assets | The following table includes the preliminary fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):
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Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the net carrying amount of goodwill by operating segment | The changes in the net carrying amount of goodwill for the years ended December 31, 2018 and 2017, respectively, are as follows (in millions):
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Schedule of other intangible assets by asset class | Amortization basis and estimated useful lives by intangible asset type are generally as follows:
Other intangible assets by asset class are as follows (in millions):
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Schedule of estimated future amortization expense on intangible assets | The estimated future amortization for finite-lived intangible assets as of December 31, 2018 is as follows (in millions):
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of outstanding debt | The following is a summary of outstanding debt (in millions):
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Repayments of long-term debt | Repayments of total debt are as follows (in millions):
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Schedule of Commercial Paper | The weighted average commercial paper outstanding and its related interest rates are as follows:
Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Consolidated Statements of Financial Position, is as follows (in millions):
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Lease Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases, Operating [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rental expenses for operating leases | Rental expenses (including amounts applicable to taxes, insurance, and maintenance) for operating leases are as follows (in millions):
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Future minimum rental payments under operating leases for continuing operations that have initial or remaining noncancelable lease terms in excess of one year, net of sublease rental income | At December 31, 2018, future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows (in millions):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of Tax Cuts and Jobs Act of 2017 | The following table presents the impact of the accounting for the enactment of the Tax Reform Act on income tax expense (benefit) from continuing operations in our Consolidated Statements of Income for the years ended December 31, 2018 and 2017.
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Income from continuing operations before income tax | Income before income tax from continuing operations and the provision for income tax from continuing operations consist of the following (in millions):
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Reconciliation of the income tax provisions based on the U.S. statutory corporate tax rate to the provisions reflected in the Consolidated Financial Statements | The reconciliation to the provisions from continuing operations reflected in the Consolidated Financial Statements is as follows:
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Components of Aon's deferred tax assets and liabilities | The components of the Company’s deferred tax assets and liabilities are as follows (in millions):
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Deferred income taxes (assets and liabilities netted by jurisdiction) as classified in the Consolidated Statements of Financial Position | Deferred income taxes (assets and liabilities have been netted by jurisdiction) have been classified in the Consolidated Statements of Financial Position as follows (in millions):
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Summary of operating and capital loss carryforwards | The Company had the following net operating loss, capital loss, and interest carryforwards (in millions):
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Reconciliation of the beginning and ending amount of unrecognized tax benefits | The following is a reconciliation of the Company’s beginning and ending amount of uncertain tax positions (in millions):
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Repurchase Agreements | The following table summarizes the Company’s Share Repurchase activity (in millions, except per share data):
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Schedule of components of weighted average number of shares outstanding | Weighted average ordinary shares outstanding are as follows (in millions):
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Components of Accumulated other comprehensive loss, net of related tax | Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):
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Employee Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expense recognized for defined contribution savings plans, included in compensation and benefits and discontinued operations in the consolidated statements of income | The expense for the significant plans in the U.S., U.K., Netherlands and Canada is as follows (in millions):
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Reconciliation of the changes in the benefit obligations and fair value of assets and a statement of the funded status | The following table provides an overview of the accumulated projected benefit obligation, fair value of plan assets, funded status and net amount recognized as of December 31, 2018 and 2017 for the Company’s other significant postretirement benefit plans located in the U.S. and Canada (in millions):
The following tables provide a reconciliation of the changes in the projected benefit obligations and fair value of assets for the years ended December 31, 2018 and 2017 and a statement of the funded status as of December 31, 2018 and 2017, for the material U.K., U.S., and other major plans, which are located in the Netherlands, and Canada. These plans represent approximately 90% of the Company’s projected benefit obligations.
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Amounts recognized in the Consolidated Statements of Financial Position | Amounts recognized in the Consolidated Statements of Financial Position consist of (in millions):
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Amounts recognized in Accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost | Amounts recognized in Accumulated other comprehensive loss (income) that have not yet been recognized as components of net periodic benefit cost at December 31, 2018 and 2017 consist of (in millions):
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Components of net periodic benefit cost for the pension plans | Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions):
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Weighted-average assumptions used to determine future benefit obligations and net periodic benefit cost | The weighted-average assumptions used to determine benefit obligations are as follows:
The weighted-average assumptions used to determine the net periodic benefit cost are as follows:
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Fair values of pension plan assets | The fair values of the Company’s major U.K. pension plan assets at December 31, 2018 and December 31, 2017, by asset category, are as follows (in millions):
The fair values of the Company’s U.S. pension plan assets at December 31, 2018 and December 31, 2017, by asset category, are as follows (in millions):
The fair values of the Company’s other major pension plan assets at December 31, 2018 and December 31, 2017, by asset category, are as follows (in millions):
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Changes in the Level 3 fair-value category | The following table presents the changes in the Level 3 fair-value category in the Company’s U.K. pension plans for the years ended December 31, 2018 and December 31, 2017 (in millions):
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Estimated Future Benefit Payments | Estimated future benefit payments for plans, not including voluntary one-time lump sum payments, are as follows at December 31, 2018 (in millions):
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Other information related to the Company's other post-retirement benefit plans | Other information related to the Company’s other postretirement benefit plans are as follows:
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Share-Based Compensation Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense recognized in continuing operations | The following table summarizes share-based compensation expense recognized in the Consolidated Statements of Income in Compensation and benefits (in millions):
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Restricted share unit activity | The following table summarizes the status of the Company’s RSUs, including shares related to the Divested Business (shares in thousands, except fair value):
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Performance-based plans | The following table summarizes the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the years ended December 31, 2018, 2017, and 2016 (shares in thousands and dollars in millions, except fair value):
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Derivatives and Hedging (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional and fair values of derivative instruments | The notional and fair values of derivative instruments are as follows (in millions):
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Derivative gains (losses) | The amounts of derivative gains (losses) recognized in the Consolidated Financial Statements are as follows (in millions):
The amounts of derivative gains (losses) reclassified from Accumulated other comprehensive loss into Consolidated Statements of Income (effective portion) are as follows (in millions):
|
Fair Value Measurements and Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities that are measured at fair value on a recurring basis | The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2018 and December 31, 2017 (in millions):
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Schedule of financial instruments where the carrying amounts and fair values differ | The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table provides the carrying value and fair value for the Company’s term debt (in millions):
|
Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | Consolidated Non-current assets by geographic area are as follows (in millions):
|
Guarantee of Registered Securities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantee of Registered Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Income | Condensed Consolidating Statement of Income
Condensed Consolidating Statement of Income
Condensed Consolidating Statement of Income
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Condensed Consolidating Statement of Comprehensive Income | Condensed Consolidating Statement of Comprehensive Income
Condensed Consolidating Statement of Comprehensive Income
Condensed Consolidating Statement of Comprehensive Income
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Condensed Consolidating Statement of Financial Position | Condensed Consolidating Statement of Financial Position
Condensed Consolidating Statement of Financial Position
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Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
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Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data | Selected quarterly financial data for the years ended December 31, 2018 and 2017 are as follows (in millions, except per share data):
|
Summary of Significant Accounting Principles and Practices Schedule Of Change In Presentation (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Operating income (loss) | $ 499 | $ 262 | $ (16) | $ 799 | $ 601 | $ 256 | $ (127) | $ 335 | $ 1,544 | $ 1,065 | $ 1,811 |
Other income (expense) | (125) | (137) | |||||||||
As Reported | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Operating income (loss) | 979 | 1,638 | |||||||||
Other income (expense) | (39) | 36 | |||||||||
Adjustments | Accounting Standards Update 2017-07 | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Operating income (loss) | 86 | 173 | |||||||||
Other income (expense) | $ (86) | $ (173) |
Summary of Significant Accounting Principles and Practices - Schedule of Topic 606 Impact on the Income Statement (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenue | |||||||||||
Total revenue | $ 2,770 | $ 2,349 | $ 2,561 | $ 3,090 | $ 2,909 | $ 2,340 | $ 2,368 | $ 2,381 | $ 10,770 | $ 9,998 | $ 9,409 |
Expenses | |||||||||||
Compensation and benefits | 6,103 | 6,003 | 5,514 | ||||||||
Other general expenses | 1,500 | 1,272 | 1,036 | ||||||||
Other income (expense) | (25) | (125) | (137) | ||||||||
Income taxes | 146 | $ 250 | $ 148 | ||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||||||||
Revenue | |||||||||||
Total revenue | (61) | ||||||||||
Expenses | |||||||||||
Compensation and benefits | 51 | ||||||||||
Other general expenses | (1) | ||||||||||
Other income (expense) | 1 | ||||||||||
Income taxes | (34) | ||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Revenue | |||||||||||
Total revenue | 10,709 | ||||||||||
Expenses | |||||||||||
Compensation and benefits | 6,154 | ||||||||||
Other general expenses | 1,499 | ||||||||||
Other income (expense) | (24) | ||||||||||
Income taxes | $ 112 |
Revenue from Contracts with Customers - Contract Assets Rollforward (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Capitalized Cost To Fulfill Customer Contracts | |
Change in Capitalized Contract Costs | |
Balance at beginning of period | $ 298 |
Additions | 1,504 |
Amortization | (1,465) |
Impairment | 0 |
Foreign currency translation and other | (8) |
Balance at end of period | 329 |
Capitalized Cost To Obtain Customer Contracts | |
Change in Capitalized Contract Costs | |
Balance at beginning of period | 145 |
Additions | 53 |
Amortization | (41) |
Impairment | 0 |
Foreign currency translation and other | (1) |
Balance at end of period | $ 156 |
Other Financial Data - Schedule of Other Income (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other Financial Data [Abstract] | |||
Foreign currency remeasurement | $ 25 | $ (37) | $ (2) |
Disposal of business | (6) | (16) | 39 |
Pension and other postretirement | 1 | (86) | (173) |
Equity earnings | 4 | 12 | 13 |
Financial instruments | (49) | 2 | (14) |
Other income | $ (25) | $ (125) | $ (137) |
Other Financial Data - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at January 1 | $ 59 | $ 56 | $ 58 |
Provision charged to Other general expenses | 24 | 18 | 10 |
Accounts written off, net of recoveries | (25) | (18) | (15) |
Foreign currency translation | 4 | 3 | 3 |
Balance at December 31 | $ 62 | $ 59 | $ 56 |
Other Financial Data - Schedule of Other Current Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Other Financial Data [Abstract] | |||
Costs to fulfill contracts with customers | $ 329 | $ 0 | |
Taxes receivable | 113 | 114 | |
Prepaid expenses | 97 | 126 | |
Receivables from the Divested Business | 12 | 28 | |
Other | 67 | 21 | |
Total | $ 618 | $ 587 | $ 289 |
Other Financial Data - Components of Fixed Assets, Net (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fixed Assets, net | |||
Fixed assets, gross | $ 1,733 | $ 1,733 | |
Less: Accumulated depreciation | 1,145 | 1,169 | |
Fixed assets, net | 588 | 564 | |
Depreciation of fixed assets | 176 | 187 | $ 162 |
Software | |||
Fixed Assets, net | |||
Fixed assets, gross | 693 | 680 | |
Leasehold improvements | |||
Fixed Assets, net | |||
Fixed assets, gross | 334 | 349 | |
Computer equipment | |||
Fixed Assets, net | |||
Fixed assets, gross | 279 | 295 | |
Furniture, fixtures and equipment | |||
Fixed Assets, net | |||
Fixed assets, gross | 228 | 240 | |
Construction in progress | |||
Fixed Assets, net | |||
Fixed assets, gross | 154 | 79 | |
Other | |||
Fixed Assets, net | |||
Fixed assets, gross | $ 45 | $ 90 |
Other Financial Data - Schedule of Other Non-current Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Other Financial Data [Abstract] | |||
Deferred revenue | $ 156 | $ 0 | |
Investments | 54 | 57 | |
Taxes receivable | 100 | 84 | |
Other | 138 | 166 | |
Total | $ 448 | $ 452 | $ 307 |
Other Financial Data - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
Other Financial Data [Abstract] | |||
Deferred revenue | $ 251 | $ 311 | |
Taxes payable | 83 | 139 | |
Other | 602 | 420 | |
Total | 936 | $ 883 | 870 |
Deferred revenue recognized | $ 487 | ||
Current portion of transition tax liability | $ 42 |
Other Financial Data - Schedule of Other Non-Current Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Other Financial Data [Abstract] | |||
Taxes payable | $ 585 | $ 529 | |
Leases | 169 | 153 | |
Compensation and benefits | 56 | 67 | |
Deferred revenue | 65 | 49 | |
Other | 222 | 304 | |
Total other non-current liabilities | 1,097 | $ 1,099 | 1,102 |
Transition tax for accumulated foreign earnings, noncurrent | $ 240 | $ 222 |
Discontinued Operations - Income Statement (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Expenses | |||||||||||
Net income from discontinued operations | $ 69 | $ (2) | $ 1 | $ 6 | $ (29) | $ (4) | $ 821 | $ 40 | $ 74 | $ 828 | $ 177 |
Tempo Business | Discontinued Operations | |||||||||||
Revenue | |||||||||||
Total revenue | 0 | 698 | 2,218 | ||||||||
Expenses | |||||||||||
Total operating expenses | 12 | 656 | 1,950 | ||||||||
Operating Income from discontinued operations | (12) | 42 | 268 | ||||||||
Other income | 0 | 10 | 0 | ||||||||
Income from discontinued operations before income taxes | (12) | 52 | 268 | ||||||||
Income tax expense (benefit) | (4) | 3 | 91 | ||||||||
Net income (loss) from discontinued operations, excluding gain | (8) | 49 | 177 | ||||||||
Gain on sale of discontinued operations, net of tax | 82 | 779 | 0 | ||||||||
Net income from discontinued operations | $ 74 | $ 828 | $ 177 |
Restructuring - Schedule of Restructuring Reserve (Details) - 2017 Plan $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Restructuring reserve, beginning balance | $ 186 |
Expensed | 448 |
Cash payments | (425) |
Foreign currency translation and other | (8) |
Restructuring reserve, ending balance | $ 201 |
Acquisitions and Dispositions of Businesses - Acquisitions Narrative (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
acquisition
|
Dec. 31, 2017
acquisition
|
|
Business Acquisition | ||
Number of business acquired under business combination | acquisition | 8 | 17 |
Weighted average useful life | 7 years | |
2018 Acquisitions | ||
Business Acquisition | ||
Revenues from acquisitions included in the Company's Consolidated Statement of Income | $ 17 | |
Other general expenses | 2018 Acquisitions | ||
Business Acquisition | ||
Acquisition related costs | $ 2 |
Acquisitions and Dispositions of Businesses - Acquisitions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Assets acquired | |||
Goodwill | $ 8,171 | $ 8,358 | $ 7,410 |
2018 Acquisitions | |||
Consideration transferred | |||
Cash | 55 | ||
Deferred and contingent consideration | 18 | ||
Aggregate consideration transferred | 73 | ||
Assets acquired | |||
Cash and cash equivalents | 1 | ||
Receivables, net | 4 | ||
Goodwill | 38 | ||
Intangible assets, net | 34 | ||
Other assets | 4 | ||
Total assets acquired | 81 | ||
Liabilities assumed | |||
Current liabilities | 6 | ||
Other liabilities | 2 | ||
Total liabilities assumed | 8 | ||
Net assets acquired | $ 73 |
Goodwill and Other Intangible Assets - Schedule of changes in the net carrying amount of goodwill (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Changes in the net carrying amount of goodwill by operating segment (in millions) | ||
Balance at the beginning of the period | $ 8,358 | $ 7,410 |
Goodwill related to current year acquisitions | 38 | 619 |
Goodwill related to disposals | (2) | (5) |
Goodwill related to prior year acquisitions | 4 | (13) |
Foreign currency translation | (227) | 347 |
Balance at the end of the period | $ 8,171 | $ 8,358 |
Goodwill and Other Intangible Assets - Schedule of other intangible assets by asset class (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,658 | $ 4,013 |
Accumulated Amortization and Impairment | 2,509 | 2,280 |
Net Carrying Amount | 1,149 | 1,733 |
Customer related and contract based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,240 | 2,550 |
Accumulated Amortization and Impairment | 1,444 | 1,415 |
Net Carrying Amount | 796 | 1,135 |
Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,027 | 1,047 |
Accumulated Amortization and Impairment | 740 | 533 |
Net Carrying Amount | 287 | 514 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 391 | 416 |
Accumulated Amortization and Impairment | 325 | 332 |
Net Carrying Amount | $ 66 | $ 84 |
Goodwill and Other Intangible Assets Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization and impairment of intangible assets | $ 593 | $ 704 | $ 157 | |
Discontinued Operations | Tempo Business | Tradenames | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets associated with divested business | $ 380 |
Goodwill and Other Intangible Assets - Schedule of estimated future amortization expense on intangible assets (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 385 |
2020 | 219 |
2021 | 126 |
2022 | 84 |
2023 | 72 |
Thereafter | 263 |
Total future amortization of intangible assets | $ 1,149 |
Debt - Repayments of long-term debt (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Debt Disclosure [Abstract] | |
2019 | $ 251 |
2020 | 600 |
2021 | 400 |
2022 | 0 |
2023 | 0 |
Thereafter | 5,095 |
Total Repayments | 6,346 |
Unamortized discounts, premiums, and debt issuance costs | (102) |
Total Debt | $ 6,244 |
Debt - Schedule of Commercial Paper (Details) - Commercial Paper - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Line of Credit Facility [Line Items] | ||
Commercial paper outstanding | $ 250 | $ 0 |
Weighted average commercial paper outstanding | $ 580 | $ 170 |
Weighted average interest rate of commercial paper outstanding | 84.00% | 0.18% |
Lease Commitments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Rental expenses for operating leases | |||
Rental expense | $ 374 | $ 377 | $ 358 |
Sub lease rental income | (45) | (57) | (52) |
Net rental expense | 329 | $ 320 | $ 306 |
Future minimum rental payments under operating leases | |||
Gross rental commitment 2019 | 303 | ||
Gross rental commitment 2020 | 253 | ||
Gross rental commitment 2021 | 221 | ||
Gross rental commitment 2022 | 182 | ||
Gross rental commitment 2023 | 148 | ||
Gross rental commitment thereafter | 472 | ||
Total gross rental commitments | 1,579 | ||
Sublease income 2019 | (34) | ||
Sublease income 2020 | (30) | ||
Sublease income 2021 | (30) | ||
Sublease income 2022 | (30) | ||
Sublease income 2023 | (12) | ||
Sublease income thereafter | (5) | ||
Total future sublease income | (141) | ||
Net rental commitment 2019 | 269 | ||
Net rental commitment 2020 | 223 | ||
Net rental commitment 2021 | 191 | ||
Net rental commitment 2022 | 152 | ||
Net rental commitment 2023 | 136 | ||
Net rental commitment thereafter | 467 | ||
Total minimum payments required | $ 1,438 |
Income Taxes - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Operating Loss Carryforwards [Line Items] | ||||
Total provision (benefit) from income taxes | $ 345 | |||
Transition tax payable | 264 | $ 240 | $ 264 | |
Estimated transition tax | 264 | |||
Estimated tax expense for the re-measurement of deferred tax assets and liabilities | $ 86 | |||
Statutory tax rate | 19.00% | 19.30% | 20.00% | |
Decrease in valuation allowance | $ 35 | |||
Benefit realized from tax holiday granted | $ 77 | $ 45 | $ 46 | |
Earnings per share impact of tax holiday (in dollars per share) | $ 0.31 | $ 0.17 | $ 0.17 | |
Unrecognized tax benefits that would impact effective tax rate | 219 | $ 228 | $ 219 | $ 240 |
Accrued potential interest and penalties | 22 | 11 | 15 | |
Liability recorded for interest and penalties | 55 | 77 | 55 | $ 48 |
Unremitted earnings | $ 39 | $ 30 | $ 39 |
Income Taxes - Schedule of Impact of Tax Cuts and Jobs Act of 2017 (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | 24 Months Ended | |
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Transition tax | $ 36 | |||
Re-measurement of deferred tax balances | (8) | |||
Indefinite reinvestment assertion | 1 | |||
Allocation of tax benefit from foreign tax credits | 59 | |||
Total income tax expense (benefit) | $ 88 | |||
Transition tax | $ 264 | |||
Re-measurement of deferred tax balances | 86 | |||
Indefinite reinvestment assertion | $ (5) | |||
Total income tax expense (benefit) | $ 345 | |||
Transition tax | $ 300 | |||
Re-measurement of deferred tax balances | 78 | |||
Indefinite reinvestment assertion | (4) | |||
Allocation of tax benefit from foreign tax credits | 59 | |||
Total income tax expense (benefit) | $ 433 |
Income Taxes - Components of Aon's deferred tax assets and liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred tax assets: | ||
Net operating loss, capital loss, interest, and tax credit carryforwards | $ 563 | $ 362 |
Employee benefit plans | 351 | 424 |
Other accrued expenses | 98 | 65 |
Investment basis differences | 28 | 35 |
Deferred revenue | 29 | 20 |
Tradename liability | 0 | 12 |
Lease and service guarantees | 5 | 6 |
Brokerage fee arrangements | 0 | 4 |
Other | 46 | 49 |
Total | 1,120 | 977 |
Valuation allowance on deferred tax assets | (171) | (136) |
Total | 949 | 841 |
Deferred tax liabilities: | ||
Intangibles and property, plant and equipment | (310) | (436) |
Deferred costs | (143) | (32) |
Unremitted earnings | (30) | (39) |
Unrealized foreign exchange gains | (26) | (22) |
Other accrued expenses | (36) | (12) |
Other | (24) | (38) |
Total | (569) | (579) |
Net deferred tax asset | $ 380 | $ 262 |
Income Taxes - Deferred income taxes (assets and liabilities netted by jurisdiction) as classified in the Consolidated Statements of Financial Position (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred income taxes | ||
Deferred tax assets — non-current | $ 561 | $ 389 |
Deferred tax liabilities — non-current | (181) | (127) |
Net deferred tax asset | $ 380 | $ 262 |
Income Taxes Operating Loss Carryforwards (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Operating Loss Carryforwards [Line Items] | ||
Interest carryforwards | $ 196 | |
U.K. | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 541 | 675 |
Interest carryforwards | 400 | 415 |
Interest carryforwards | 53 | 0 |
U.S. Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 2 | 36 |
Interest carryforwards | 367 | 0 |
Interest carryforwards | 424 | 0 |
U.S. State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 315 | 412 |
Interest carryforwards | 221 | 0 |
Interest carryforwards | 227 | 0 |
Other | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 369 | 392 |
Interest carryforwards | 30 | 36 |
Interest carryforwards | $ 186 | $ 196 |
Income Taxes - Reconciliation of the beginning and ending amount of unrecognized tax benefits (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Reconciliation of the Company's beginning and ending amount of unrecognized tax benefits | ||
Balance at the beginning of the period | $ 280 | $ 278 |
Additions based on tax positions related to the current year | 18 | 25 |
Additions for tax positions of prior years | 10 | 12 |
Reductions for tax positions of prior years | (24) | (26) |
Settlements | 0 | (6) |
Business combinations | 1 | 0 |
Lapse of statute of limitations | (6) | (7) |
Foreign currency translation, increase | 0 | 4 |
Balance at the end of the period | $ 279 | $ 280 |
Shareholders' Equity - Distributable Reserves Narrative (Details) - USD ($) $ in Billions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Equity [Abstract] | ||
Distributable reserves available amount | $ 2.2 | $ 1.2 |
Shareholders' Equity - Schedule of weighted average shares outstanding (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Equity [Abstract] | |||
Basic weighted-average ordinary shares outstanding | 245,200,000 | 258,500,000 | 268,100,000 |
Dilutive effect of potentially issuable shares | 1,800,000 | 2,200,000 | 2,200,000 |
Diluted weighted-average ordinary shares outstanding | 247,000,000 | 260,700,000 | 270,300,000 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 0 |
Shareholders' Equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Equity [Abstract] | |||
Cash dividends to shareholders | $ 382 | $ 364 | $ 345 |
Dividends paid per share (in dollars per share) | $ 1.56 | $ 1.41 | $ 1.29 |
Employee Benefits - Schedule of expense recognized in Compensation and benefit in the Consolidated Statements of Income (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expense recognized for defined contribution savings plans | $ 168 | $ 173 | $ 191 |
U.S. | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expense recognized for defined contribution savings plans | 98 | 105 | 121 |
U.K. | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expense recognized for defined contribution savings plans | 45 | 43 | 43 |
Netherlands and Canada | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expense recognized for defined contribution savings plans | $ 25 | $ 25 | $ 27 |
Employee Benefits - Expected Return on Plan Assets Narrative (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
U.S. | Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expected return on plan assets, net of administration expenses | 7.71% | 7.88% | 7.81% |
Employee Benefits - Schedule of changes in Level 3 fair value for U.K. Pension Plans (Details) - Pension Plan - U.K. - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Actual return on plan assets: | ||
Balance at the beginning of the period | $ 5,906 | $ 5,675 |
Foreign exchange | 317 | (513) |
Balance at the end of the period | 5,225 | 5,906 |
Annuities | ||
Actual return on plan assets: | ||
Balance at the beginning of the period | 1,909 | |
Balance at the end of the period | 1,688 | 1,909 |
Significant Unobservable Inputs (Level 3) | ||
Actual return on plan assets: | ||
Balance at the beginning of the period | 1,909 | |
Balance at the end of the period | 1,688 | 1,909 |
Significant Unobservable Inputs (Level 3) | Annuities | ||
Actual return on plan assets: | ||
Balance at the beginning of the period | 1,909 | 1,773 |
Relating to assets still held at the end of the year | (122) | (66) |
Purchases, sales and settlements—net | 7 | 45 |
Foreign exchange | (106) | 157 |
Balance at the end of the period | $ 1,688 | $ 1,909 |
Employee Benefits - Cash Flows Narrative (Details) - Pension Plan $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
U.S. | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Expected employer contributions during next fiscal year | $ 80 |
U.K. | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Expected employer contributions during next fiscal year | 46 |
Other | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Expected employer contributions during next fiscal year | $ 19 |
Employee Benefits - Estimated Future Benefit Payments (Details) - Pension Plan $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
U.K. | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2019 | $ 137 |
2020 | 139 |
2021 | 144 |
2022 | 149 |
2023 | 152 |
2024 - 2028 | 795 |
U.S. | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2019 | 178 |
2020 | 182 |
2021 | 185 |
2022 | 187 |
2023 | 177 |
2024 - 2028 | 879 |
Other | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2019 | 42 |
2020 | 43 |
2021 | 44 |
2022 | 45 |
2023 | 46 |
2024 - 2028 | $ 248 |
Employee Benefits - Overview of the accumulated benefit obligation, fair value of plan assets, funded status and net amount recognized for U.S. and Canadian Other Post-Retirement Benefits (Details) - U.S. and Canadian Other Post-Retirement Benefits - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Accumulated projected benefit obligation | $ 91 | $ 99 |
Fair value of plan assets | 14 | 17 |
Funded status | (77) | (82) |
Unrecognized prior-service credit | (1) | (1) |
Unrecognized loss | (6) | (3) |
Net amount recognized | $ (84) | $ (86) |
Employee Benefits - Schedule of Other information related to Company's other post-retirement plan's (Details) - U.S. and Canadian Other Post-Retirement Benefits - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Net periodic benefit cost recognized (millions) | $ 3 | $ 1 | $ 5 |
Minimum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Weighted-average discount rate used to determine future benefit obligations | 3.91% | 3.32% | 3.71% |
Weighted-average discount rate used to determine net periodic benefit costs | 3.32% | 3.71% | 3.99% |
Maximum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Weighted-average discount rate used to determine future benefit obligations | 4.26% | 3.64% | 4.15% |
Weighted-average discount rate used to determine net periodic benefit costs | 3.64% | 4.15% | 4.33% |
Share-Based Compensation Plans - Share-based compensation expense recognized in continuing operations (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 338 | $ 319 | $ 306 |
Tax benefit | 74 | 73 | 90 |
Share-based compensation expense, net of tax | 264 | 246 | 216 |
Employee share purchase plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 9 | 10 | 10 |
Restricted share units (“RSUs”) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 186 | 182 | 176 |
Performance share awards (PSAs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 143 | $ 127 | $ 120 |
Share-Based Compensation Plans - Restricted Share Units Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average remaining amortization period (in years) | 2 years 1 month | ||
Restricted share units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of RSUs vested during the period | $ 189 | $ 197 | $ 200 |
Unamortized deferred compensation | $ 346 | ||
Restricted share units (RSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Restricted share units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years |
Share-Based Compensation Plans - Summary of the status of the Company's RSUs (Details) - Restricted share units (“RSUs”) - $ / shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Non-vested share awards | |||
Non-vested at beginning of period (in shares) | 4,849 | 6,195 | 7,167 |
Granted (in shares) | 1,500 | 1,700 | 2,252 |
Vested (in shares) | (1,943) | (2,407) | (2,845) |
Forfeited (in shares) | (198) | (639) | (379) |
Non-vested at end of period (in shares) | 4,208 | 4,849 | 6,195 |
Weighted Average Fair value | |||
Non-vested at beginning of period (in dollars per share) | $ 104 | $ 89 | $ 77 |
Granted (in dollars per share) | 141 | 123 | 101 |
Vested (in dollars per share) | 97 | 82 | 70 |
Forfeited (in dollars per share) | 114 | 93 | 82 |
Non-vested at end of period (in dollars per share) | $ 120 | $ 104 | $ 89 |
Share-Based Compensation Plans - Schedule of Performance-based plans (Details) - Performance-based Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target PSAs granted (in shares) | 564 | 548 | 750 |
Fair value (in dollars per share) | $ 134 | $ 114 | $ 100 |
Number of shares that would be issued based on current performance levels (in shares) | 840 | 1,068 | 1,122 |
Unamortized expense, based on current performance levels | $ 81 | $ 44 | $ 0 |
Derivatives and Hedging - Notional and fair values of derivative instruments (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Other Current Assets | ||
Derivative [Line Items] | ||
Derivative assets | $ 3 | $ 9 |
Other Noncurrent Assets | ||
Derivative [Line Items] | ||
Derivative assets | 15 | 23 |
Other Current Liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | 5 | 3 |
Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | 3 | 3 |
Accounted for as hedges | Gross foreign exchange contracts | ||
Derivative [Line Items] | ||
Notional Amount | 646 | 701 |
Derivative assets | 17 | 31 |
Derivative liabilities | 2 | 3 |
Not accounted for as hedges | ||
Derivative [Line Items] | ||
Notional Amount | 915 | 955 |
Derivative assets | 18 | 32 |
Derivative liabilities | 8 | 6 |
Not accounted for as hedges | Gross foreign exchange contracts | ||
Derivative [Line Items] | ||
Notional Amount | 269 | 254 |
Derivative assets | 1 | 1 |
Derivative liabilities | $ 6 | $ 3 |
Term of contract ( in days) | 30 days |
Fair Value Measurements and Financial Instruments - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value Disclosures [Abstract] | |||
Unrealized gain (loss) | $ 0 | $ 0 | $ 0 |
Fair Value Measurements and Financial Instruments - Schedule of financial instruments where the carrying amounts and fair values differ (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair value of financial instrument | ||
Current portion of long-term debt | $ 0 | $ 299 |
Fair value current portion of long-term debt | 0 | 301 |
Long-term debt | 5,993 | 5,667 |
Fair value of long term debt | $ 6,159 | $ 6,267 |
Claims, Lawsuits, and Other Contingencies - Guarantees and Indemnifications Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Loss Contingencies [Line Items] | ||
Maximum potential funding under commitments | $ 103 | $ 95 |
Discontinued Operations, Disposed of by Sale | Tempo Business | Property Lease Guarantee | ||
Loss Contingencies [Line Items] | ||
Maximum potential funding under commitments | 85 | |
Guarantor obligations, current carrying value | 17 | |
Discontinued Operations, Disposed of by Sale | Tempo Business | Performance Guarantee | ||
Loss Contingencies [Line Items] | ||
Maximum potential funding under commitments | 188 | |
Guarantor obligations, current carrying value | $ 1 |
Claims, Lawsuits, and Other Contingencies - Letters of Credit Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Letters of credit outstanding | $ 83 | $ 96 |
Claims, Lawsuits, and Other Contingencies - Premium Payments (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Maximum potential funding under commitments | $ 103 | $ 95 |
Segment Information - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
segment
metric
revenue_line
| |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 1 |
Number of revenue lines | revenue_line | 5 |
Number of performance metrics measured | metric | 4 |
Segment Information - Schedule of consolidated non-current assets by geographic area (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Noncurrent assets | $ 588 | $ 564 |
U.S. | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Noncurrent assets | 288 | 239 |
Americas other than U.S. | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Noncurrent assets | 44 | 47 |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Noncurrent assets | 58 | 68 |
Europe, Middle East, & Africa | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Noncurrent assets | 101 | 114 |
Asia Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Noncurrent assets | $ 97 | $ 96 |
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 2,770 | $ 2,349 | $ 2,561 | $ 3,090 | $ 2,909 | $ 2,340 | $ 2,368 | $ 2,381 | $ 10,770 | $ 9,998 | $ 9,409 |
Operating income | 499 | 262 | (16) | 799 | 601 | 256 | (127) | 335 | 1,544 | 1,065 | 1,811 |
Net income from continuing operations | 284 | 155 | 57 | 604 | 17 | 196 | (43) | 265 | 1,100 | 435 | 1,253 |
Net income from discontinued operations | 69 | (2) | 1 | 6 | (29) | (4) | 821 | 40 | 74 | 828 | 177 |
Net income | 353 | 153 | 58 | 610 | (12) | 192 | 778 | 305 | 1,174 | 1,263 | 1,430 |
Less: Net income attributable to noncontrolling interests | 8 | 6 | 10 | 16 | 7 | 7 | 9 | 14 | 40 | 37 | 34 |
Net income attributable to Aon shareholders | $ 345 | $ 147 | $ 48 | $ 594 | $ (19) | $ 185 | $ 769 | $ 291 | $ 1,134 | $ 1,226 | $ 1,396 |
Basic net income per share attributable to Aon shareholders | |||||||||||
Basic net income per share attributable to Aon shareholders, continuing operations (in dollars per share) | $ 1.14 | $ 0.61 | $ 0.19 | $ 2.37 | $ 0.04 | $ 0.74 | $ (0.20) | $ 0.95 | $ 4.32 | $ 1.54 | $ 4.55 |
Basic net income per share attributable to Aon shareholders, discontinued operations (in dollars per share) | 0.28 | (0.01) | 0.01 | 0.02 | (0.12) | (0.02) | 3.13 | 0.15 | 0.30 | 3.20 | 0.66 |
Basic net income per share attributable to Aon shareholders (in dollars per share) | 1.42 | 0.60 | 0.20 | 2.39 | (0.08) | 0.72 | 2.93 | 1.10 | 4.62 | 4.74 | 5.21 |
Diluted net income per share attributable to Aon shareholders | |||||||||||
Diluted net income per share attributable to Aon shareholders, continuing operations (in dollars per share) | 1.13 | 0.61 | 0.19 | 2.35 | 0.04 | 0.73 | (0.20) | 0.94 | 4.29 | 1.53 | 4.51 |
Diluted net income per share attributable to Aon shareholders, discontinued operations (in dollars per share) | 0.28 | (0.01) | 0.00 | 0.02 | (0.11) | (0.01) | 3.13 | 0.15 | 0.30 | 3.17 | 0.65 |
Diluted net income per share attributable to Aon shareholders (in dollars per share) | $ 1.41 | $ 0.60 | $ 0.19 | $ 2.37 | $ (0.07) | $ 0.72 | $ 2.93 | $ 1.09 | $ 4.59 | $ 4.70 | $ 5.16 |
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