Shareholders' Equity

12 Months Ended

Dec. 31, 2021

Shareholders’ Equity

Distributable Profits

The Company is required under Irish law to have available “distributable profits” to make share repurchases or pay dividends to shareholders. Distributable profits are created through the earnings of the Irish parent company and, among other methods, through intercompany dividends or a reduction in share capital approved by the High Court of Ireland. Distributable profits are not linked to a U.S. GAAP reported amount (e.g., retained earnings). On July 26, 2021, we received approval from the High Court of Ireland to complete a reduction in share premium to create distributable profits of $34.0 billion to support the payment of possible future dividends or future share repurchases, if and to the extent declared by the directors in compliance with their duties under Irish law. As of December 31, 2021 and 2020, the Company had distributable profits in excess of $32.7 billion and $0.2 billion, respectively. We believe that we have the ability to create sufficient distributable profits for the foreseeable future.

Ordinary Shares

Aon has a share repurchase program authorized by the Company’s Board of Directors. 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, June 2017, and November 2020, and by $7.5 billion in authorized repurchases in February 2022 for a total of $27.5 billion in repurchase authorizations.

Under the Repurchase Program, the Company’s 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):


	Years Ended December 31
	2021		2020
Shares repurchased	12.4		8.5
Average price per share	$	286.82	$	206.28
Costs recorded to retained earnings
Total repurchase cost	$	3,543	$	1,761
Additional associated costs	—		2
Total costs recorded to retained earnings	$	3,543	$	1,763

At December 31, 2021, the remaining authorized amount for share repurchases under the Repurchase Program was approximately $1.7 billion. Under the Repurchase Program, the Company has repurchased a total of 149.6 million shares for an aggregate cost of approximately $18.3 billion.

Weighted Average Ordinary Shares

Weighted average ordinary shares outstanding are as follows (in millions):


	Years Ended December 31
	2021	2020	2019
Basic weighted average ordinary shares outstanding	224.7	231.9	238.6
Dilutive effect of potentially issuable shares	1.4	1.2	2.0
Diluted weighted average ordinary shares outstanding	226.1	233.1	240.6

Potentially issuable shares are not included in the computation of Diluted net income per share attributable to Aon shareholders if their inclusion would be antidilutive. There were 0.3 million shares excluded from the calculation in 2021 and no shares excluded from the calculation in 2020 and 2019.

Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):


	Change in Fair Value of Financial Instruments (1)		Foreign Currency Translation Adjustments		Postretirement Benefit Obligation (2)		Total
Balance at December 31, 2018	(15)		(1,319)		(2,575)		(3,909)
Other comprehensive income (loss) before reclassifications:
Other comprehensive income (loss) before reclassifications	(10)		15		(287)		(282)
Tax benefit (expense)	1		(1)		58		58
Other comprehensive income (loss) before reclassifications, net	(9)		14		(229)		(224)
Amounts reclassified from accumulated other comprehensive income (loss):
Amounts reclassified from accumulated other comprehensive income	14		—		109		123
Tax expense	(2)		—		(21)		(23)
Amounts reclassified from accumulated other comprehensive income, net (3)	12		—		88		100
Net current period other comprehensive income (loss)	3		14		(141)		(124)
Balance at December 31, 2019	(12)		(1,305)		(2,716)		(4,033)
Other comprehensive income (loss) before reclassifications:
Other comprehensive income (loss) before reclassifications	1		258		(255)		4
Tax benefit	—		2		60		62
Other comprehensive income (loss) before reclassifications, net	1		260		(195)		66
Amounts reclassified from accumulated other comprehensive income (loss):
Amounts reclassified from accumulated other comprehensive income	15		—		125		140
Tax expense	(3)		—		(31)		(34)
Amounts reclassified from accumulated other comprehensive income, net (3)	12		—		94		106
Net current period other comprehensive income (loss)	13		260		(101)		172
Balance at December 31, 2020	$	1	$	(1,045)	$	(2,817)	$	(3,861)
Other comprehensive income (loss) before reclassifications:
Other comprehensive income (loss) before reclassifications	—		(290)		227		(63)
Tax benefit (expense)	—		2		(58)		(56)
Other comprehensive income (loss) before reclassifications, net	—		(288)		169		(119)
Amounts reclassified from accumulated other comprehensive income (loss):
Amounts reclassified from accumulated other comprehensive income	2		—		142		144
Tax expense	(1)		—		(34)		(35)
Amounts reclassified from accumulated other comprehensive income, net (3)	1		—		108		109
Net current period other comprehensive income (loss)	1		(288)		277		(10)
Balance at December 31, 2021	$	2	$	(1,333)	$	(2,540)	$	(3,871)

(1)Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Total revenue, Interest expense, and Compensation and benefits in the Consolidated Statements of Income. Refer to Note 13 “Derivatives and Hedging” for further 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) in the Consolidated Statements of Income.

(3)It is the Company’s policy to release income tax effects from Accumulated other comprehensive loss using the portfolio approach.