Aon Reports Third Quarter 2019 Results

LONDON, Oct. 25, 2019 /PRNewswire/ --

Third Quarter Key Metrics From Continuing Operations

    --  Total revenue increased 1% to $2.4 billion, with organic revenue growth
        of 5%
    --  Operating margin increased from 11.2% to 15.1%, and operating margin,
        adjusted for certain items, increased 350 basis points to 22.0%
    --  EPS increased from $0.61 to $0.93, and EPS, adjusted for certain items,
        increased 11% to $1.45
    --  For the first nine months of 2019, cash flow from operations increased
        19% to $1,163 million, and free cash flow increased 25% to $996 million

Third Quarter Highlights

    --  Repurchased 1.8 million Class A Ordinary Shares for approximately $350
        million
    --  Recently announced two key actions to accelerate our Aon United growth
        strategy which we believe will further accelerate organic growth and
        support sustainable margin expansion. Delivering Aon United program
        expands globally to further improve sales effectiveness, strengthen
        segmentation strategy and increase collaboration across solution lines
        to create more value for clients. Aon Business Services will establish
        client service hubs that use technology platforms and new capabilities
        to deliver more consistent client service and improve operational
        leverage for the firm
    --  Received an Innovation Award from Business Insurance, recognizing our
        unique intellectual property insurance liability offering that was
        developed through the use of proprietary data and analytics to address
        an area of growing client demand

Aon plc (NYSE: AON) today reported results for the three months ended September 30, 2019.

Net income from continuing operations attributable to Aon shareholders was $223 million, or $0.93 per share, compared to $149 million, or $0.61 per share, in the prior year period. Net income per share from continuing operations attributable to Aon shareholders, adjusted for certain items, increased 11% to $1.45, including an unfavorable impact of $0.02 per share if the company were to translate prior year period results at current period foreign exchange rates ("foreign currency translation"), compared to $1.31 in the prior year period. Certain items that impacted third quarter results and comparisons with the prior year period are detailed in the "Reconciliation of Non-GAAP Measures - Operating Income from Continuing Operations and Diluted Earnings Per Share" on page 10 of this press release.

"Our third quarter results reflect continued progress resulting from our Aon United initiatives, highlighted by strong organic revenue growth of 5% and substantial operating margin improvement of 350 basis points. We are building momentum year-to-date as reflected in a 200 basis point acceleration of organic revenue growth to 6%, translating into double-digit free cash flow growth," said Greg Case, Chief Executive Officer. "We continue to strategically invest in content and capability while taking progressive steps to consistently deliver the best of our global firm to clients, strengthening our ability to deliver innovation and improved financial performance that we believe will unlock significant shareholder value creation. Looking ahead, we expect strong performance in the fourth quarter to close out the year with continued progress against our goal of mid-single digit organic revenue growth or greater over the long-term."

THIRD QUARTER 2019 FINANCIAL SUMMARY
The third quarter 2019 financial results discussed herein represent performance from continuing operations unless otherwise noted.

Total revenue in the third quarter increased 1% to $2.4 billion compared to the prior year period driven by 5% organic revenue growth, partially offset by a 2% unfavorable impact from foreign currency translation and a 2% unfavorable impact from divestitures, net of acquisitions.

Total operating expenses in the third quarter decreased 3% to $2.0 billion compared to the prior year period due primarily to a $44 million favorable impact from foreign currency translation, a $34 million decrease in restructuring charges, $32 million of incremental savings related to restructuring and other operational improvement initiatives, and a $27 million decrease in expenses related to divestitures, net of acquisitions, partially offset by a $25 million non-recurring legacy litigation benefit recorded in the prior year period and an increase in expense associated with 5% organic revenue growth.

Restructuring expenses were $63 million in the third quarter, primarily driven by other costs associated with restructuring and separation initiatives and technology rationalization. As previously announced, the Company expects the total estimated costs of the program to be approximately $1,525 million. Restructuring charges are expected to be $1,350 million, including $1,250 million of cash charges and $100 million of non-cash charges. All remaining charges associated with the program will be completed by the fourth quarter of 2019. To date, the Company has incurred $1,263 million, or 94%, of the total estimated restructuring charges and $1,027 million, or 82% of the total estimated cash spend. In addition to the $1,350 million of total restructuring charges, the Company estimates $175 million of incremental capital expenditures associated with the three-year program, of which $137 million, or 78%, has been incurred to date. An analysis of restructuring and related costs by type is detailed on page 15 of this press release.

Restructuring savings in the third quarter related to restructuring and other operational improvement initiatives are estimated to be $137 million, before any potential reinvestment, an increase of $32 million compared to the prior year period. Before any potential reinvestment of savings, restructuring and other operational improvement initiatives are expected to deliver run-rate savings of $510 million annually in 2019 and run-rate savings of $535 million annually in 2020. To date, the Company has achieved $475 million, or 93%, of the total estimated annualized savings expected in 2019, before any potential reinvestment.

Foreign currency exchange rates in the third quarter had a $2 million, or $0.01 per share, unfavorable impact on U.S. GAAP net income, and a $4 million, or $0.02 per share, unfavorable impact on adjusted net income if the Company were to translate prior year quarter results at current quarter foreign exchange rates. If currency were to remain stable at today's rates, we would expect an unfavorable impact of approximately $0.04 per share, or approximately $12 million reduction of operating income, in the fourth quarter of 2019.

Effective tax rate used in our U.S. GAAP financial statements in the third quarter was 19.6%, compared to 20.1% in the prior year period. After adjusting to exclude the applicable tax impact associated with certain non-GAAP adjustments, the adjusted effective tax rate for the third quarter of 2019 increased to 21.4% compared to 12.8% in the prior year quarter, primarily driven by changes in the geographical distribution of income and a net unfavorable impact from discrete items. The adjusted effective tax rate in the prior year period included a net favorable impact from discrete items. Certain items that impacted third quarter results and comparisons with the prior year period are detailed in the "Reconciliation of Non-GAAP Measures - Operating Income from Continuing Operations and Diluted Earnings Per Share" on page 10 of this press release.

Weighted average diluted shares outstanding decreased to 239.1 million in the third quarter compared to 245.6 million in the prior year period. The Company repurchased 1.8 million Class A Ordinary Shares for approximately $350 million in the quarter. As of September 30, 2019, the Company had $2.5 billion of remaining authorization under its share repurchase program.

YEAR TO DATE 2019 CASH FLOW SUMMARY
Cash flow provided by operations
for the first nine months of 2019 increased 19%, or $188 million, to $1,163 million compared to the prior year period, primarily reflecting strong operational improvement. The current year period includes approximately $85 million of net cash payments in the first quarter related to legacy litigation. The prior year comparable period included an $80 million accelerated pension contribution.

Free cash flow, defined as cash flow from operations less capital expenditures, increased 25%, or $200 million, to $996 million for the first nine months of 2019 compared to the prior year period, reflecting an increase in cash flow from operations and a $12 million decrease in capital expenditures.

THIRD QUARTER 2019 REVENUE REVIEW
The third quarter revenue reviews provided below include supplemental information related to organic revenue, which is a non-GAAP measure that is described in detail in "Reconciliation of Non-GAAP Measures - Organic Revenue and Free Cash Flow" on page 9 of this press release.


                                                   Three Months Ended



       
              
                (millions) Sep 30,                          Sep 30,    
      
           %     
     
             Less:        
      
              Less:    
        
              Less:                     Organic
                                              2019                              2018      Change           Currency                  Fiduciary              Acquisitions,                  Revenue
                                                                                                           Impact                  Investment             Divestitures                   Growth
                                                                                                                                     Income                  & Other

    ---


       
              Revenue



       Commercial Risk Solutions                               $
        1,057               $
         1,029                   3%                       (2)%                         -%                     (2)%       7%



       Reinsurance Solutions                  291                               279                  4                  (1)                          1                         (1)                        5



       Retirement Solutions                   484                               501                (3)                 (2)                                                         (4)                      3



       Health Solutions                       279                               278                                         (3)                                                      1                       2



       Data & Analytic Services               271                               263                  3                  (2)                                                           2                       3



       Elimination                            (3)                              (1)               N/A                 N/A                        N/A                        N/A                       N/A

    ---


       
              Total revenue                     $
            
          2,379          $
      
           2,349                   1%                       (2)%                         -%                     (2)%       5%

    ===

Total revenue increased $30 million, or 1%, to $2,379 million, compared to the prior year period, including organic revenue growth of 5%, primarily driven by strong management of the renewal book globally in Commercial Risk Solutions and solid new business generation across the portfolio, partially offset by the unfavorable impact of certain non-recurring revenue that benefited the prior year period in Health Solutions and Data & Analytic Services.

Commercial Risk Solutions organic revenue growth of 7% was driven by strong growth across every major geography, including double-digit growth in the U.S., Canada, and Latin America, primarily driven by strong retention and management of the renewal book portfolio. On average globally, exposures and pricing were both modestly positive, resulting in a modestly positive market impact overall.

Reinsurance Solutions organic revenue growth of 5% was driven by double-digit growth globally in facultative placements and continued net new business generation globally in treaty, partially offset by a modest decline in capital markets transactions. Market impact was modestly positive to results in the third quarter.

Retirement Solutions organic revenue growth of 3% was driven by solid growth across every major business, with particular strength in core retirement driven by an increase in demand for retirement consulting in the U.S. and increased volume of actuarial services in the EMEA region.

Health Solutions organic revenue growth of 2% was driven by solid growth globally in health and benefits brokerage, highlighted by particular strength internationally. Results in the quarter were partially offset by an unfavorable impact of certain non-recurring revenue in the health care exchange business that benefited the prior year quarter, as well as the unfavorable timing of certain revenue that shifted to the fourth quarter.

Data & Analytic Services organic revenue growth of 3% was driven by growth globally across our Affinity business, as well as solid growth in Aon Client Treaty. Results in the quarter were unfavorably impacted by certain non-recurring revenue that benefited the prior year quarter.

THIRD QUARTER 2019 EXPENSE REVIEW


                                                               Three Months Ended



       
                
                  (millions)           Sep 30, 2019                   Sep 30, 2018  
       
            $             %
                                                                                                         Change          Change

    ---


       
                Expenses



       Compensation and benefits                                       $
            1,368                 $
          1,392         $
       (24) (2)%



       Information technology                                    120                             125              (5)  (4)



       Premises                                                   76                              94             (18) (19)



       Depreciation of fixed assets                               44                              40                4    10



       Amortization and impairment of intangible assets          101                             100                1     1



       Other general expenses                                    310                             336             (26)  (8)




       
                Total operating expenses                           $
            2,019                 $
          2,087         $
       (68) (3)%

    ===

Compensation and benefits expense decreased $24 million, or 2%, compared to the prior year period due primarily to $55 million of incremental savings related to restructuring and other operational improvement initiatives, a $32 million favorable impact from foreign currency translation, and an $18 million decrease in expenses related to divestitures, net of acquisitions, partially offset by an increase in expense associated with 5% organic revenue growth.

Information technology expense decreased $5 million, or 4%, compared to the prior year period due primarily to a reduction of costs as we continue to optimize our IT portfolio, including favorable contract renewals and productivity credits related to data center optimization.

Premises expense decreased $18 million, or 19%, compared to the prior year period due primarily to an $8 million decrease in restructuring charges and a reduction of costs as we continue to optimize our global real estate footprint.

Depreciation of fixed assets increased $4 million, or 10%, compared to the prior year period due primarily to a $3 million increase in restructuring charges.

Amortization and impairment of intangible assets increased $1 million, or 1%, compared to the prior year period.

Other general expenses decreased $26 million, or 8%, compared to the prior year period due primarily to a $22 million decrease in restructuring charges, a $6 million favorable impact from foreign currency translation, a $6 million decrease in expenses related to divestitures, net of acquisitions, and expense discipline, partially offset by a $25 million non-recurring legacy litigation benefit recorded in the prior year period and a $19 million decrease in savings related to restructuring and other operational improvement initiatives.

THIRD QUARTER 2019 INCOME SUMMARY
The third quarter 2019 financial results discussed herein represent performance from continuing operations unless otherwise noted. In addition, certain noteworthy items impacted adjusted operating income and adjusted operating margins in the third quarters of 2019 and 2018, which are also described in detail in "Reconciliation of Non-GAAP Measures - Operating Income from Continuing Operations and Diluted Earnings Per Share" on page 10 of this press release.


                                                Three Months Ended


                         (millions)     Sep 30,                          Sep 30,   
         
               %
                                           2019                              2018
                                                                                       
          Change

    ---


       
     Revenue                               $
              
          2,379          $
         2,349          1%



       
     Expenses                        2,019                             2,087           (3)



       
     Operating income                        $
              
          360            $
         262         37%




       
     Operating margin                15.1%                            11.2%

    ---

          Operating income -as adjusted           $
              
          524            $
         434         21%



          Operating margin -as adjusted   22.0%                            18.5%

    ---

Operating income increased from $262 million to $360 million, compared to the prior year period. Adjusting for certain items detailed on page 10 of this press release, operating income increased $90 million, or 21%, and operating margin increased +350 basis points to 22.0%, each compared to the prior year period. Adjusted operating income and margin primarily reflects strong organic revenue growth of 5%, increased operating leverage across the portfolio, and incremental savings from restructuring and other operational improvements of $32 million, or +140 basis points, partially offset by an unfavorable impact from foreign currency translation of $6 million. Operating income growth and operating margin expansion compared to the prior year period also reflect the absorption of near-term reinvestment of restructuring savings to support long-term Aon United growth initiatives.

Interest income increased $1 million to $1 million compared to the prior year period. Interest expense increased $9 million to $78 million compared to the prior year period reflecting higher outstanding debt. Other pension income decreased $6 million to $3 million. Other expense of $1 million primarily reflects losses related to certain company-owned life insurance plans, partially offset by net gains due to the favorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies.

DISCONTINUED OPERATIONS
Net loss
from discontinued operations was $1 million compared to $2 million in the prior year period.

Conference Call, Presentation Slides and Webcast Details

The Company will host a conference call on Friday, October 25, 2019 at 7:30 a.m., central time. Interested parties can listen to the conference call via a live audio webcast and view the presentation slides at www.aon.com.

About Aon
Aon plc (NYSE: AON) Aon is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

Safe Harbor Statement

This communication contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, future capital expenditures, growth in commissions and fees, changes to the composition or level of our revenues, cash flow and liquidity, expected tax rates, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, plans and references to future successes, are forward-looking statements. Also, when we use the words such as "anticipate", "believe", "estimate", "expect", "intend", "plan", "probably", "potential", "looking forward", or similar expressions, we are making forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward looking statements: general economic and political conditions in different countries in which Aon does business around the world, including the U.K.'s expected withdrawal from the European Union; changes in the competitive environment; fluctuations in exchange and interest rates that could influence revenue and expense; changes in global equity and fixed income markets that could affect the return on invested assets; changes in the funding status of Aon's various defined benefit pension plans and the impact of any increased pension funding resulting from those changes; the level of Aon's debt limiting financial flexibility or increasing borrowing costs; rating agency actions that could affect Aon's ability to borrow funds; volatility in our tax rate due to a variety of different factors, including U.S. tax reform; changes in estimates or assumptions on our financial statements; limits on Aon's subsidiaries to make dividend and other payments to Aon; the impact of lawsuits and other contingent liabilities and loss contingencies arising from errors and omissions and other claims against Aon; the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which Aon operates, particularly given the global scope of Aon's businesses and the possibility of conflicting regulatory requirements across jurisdictions in which Aon does 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 Aon; the failure to retain and attract qualified personnel; international risks associated with Aon's 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; Aon's ability to develop and implement new technology; the 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 Aon manages certain risks created in connection with the various services, including fiduciary and investments and other advisory services and business process outsourcing services, among others, that Aon currently provides, or will provide in the future, to clients; Aon's ability to continue, and the costs and the costs and risks associated with, growing, developing and integrating companies that it acquires or new lines of business; changes in commercial property and casualty markets, commercial premium rates or methods of compensation; changes in the health care system or our relationships with insurance carriers; Aon's ability to implement initiatives intended to yield cost savings, and the ability to achieve those cost savings; risks and uncertainties in connection with the sale of our divested business; and our ability to realize the expected benefits from our restructuring plan.

Any or all of Aon's forward-looking statements may turn out to be inaccurate, and there are no guarantees about Aon's performance. The factors identified above are not exhaustive. Aon and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Further information concerning Aon and its businesses, including factors that potentially could materially affect Aon's financial results, is contained in Aon's filings with the SEC. See Aon's Annual Report on Form 10-K for the year ended December 31, 2018 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019, and September 30, 2019 for a further discussion of these and other risks and uncertainties applicable to Aon's businesses. These factors may be revised or supplemented in subsequent reports. Aon is under no obligation, and expressly disclaims any obligation, to update or alter any forward-looking statement that it may make from time to time, whether as a result of new information, future events or otherwise.

Explanation of Non-GAAP Measures

This communication includes supplemental information related to organic revenue growth, free cash flow, adjusted operating margin, and adjusted earnings per share for continuing operations that exclude the effects of intangible asset amortization, restructuring, capital expenditures, and certain other noteworthy items that affected results for the comparable periods. Organic revenue growth includes the impact of intercompany activity and excludes foreign exchange rate changes, acquisitions, divestitures, transfers between revenue lines, fiduciary investment income, and gains or losses on derivatives accounted for as hedges. The impact of foreign exchange is determined by translating last year's revenue, expense or net income at this year's foreign exchange rates. Reconciliations to the closest U.S. GAAP measure for each non-GAAP measure presented in this press release are provided in the attached appendices. Supplemental organic revenue growth information and additional measures that exclude the effects of certain items noted above do not affect net income or any other U.S. GAAP reported amounts. Free cash flow is cash flow from operating activity less capital expenditures. The effective tax rate, as adjusted, excludes the applicable tax impact associated with expenses for estimated intangible asset amortization, restructuring, and certain other noteworthy items. Management believes that these measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors. They should be viewed in addition to, not in lieu of, the Company's Condensed Consolidated Financial Statements. Industry peers provide similar supplemental information regarding their performance, although they may not make identical adjustments.



     Investor Contact:          
     Media Contact:



     Investor Relations         
     Will Dunn



     312-381-3310               
     212-441-1819



     investor.relations@aon.com 
     will.dunn@aon.com



       
                
                  Aon plc


       Condensed Consolidated Statements of Income (Unaudited)




                                                                                       Three Months Ended                                            Nine Months Ended



       
                
                  (millions, except per share data)              Sep 30,                     Sep 30,                 %                           Sep 30,                Sep 30,                              %
                                                                                      2019                         2018         Change                                  2019                    2018
                                                                                                                                                                                                                            Change

    ---


       
                Revenue



       Total revenue                                                                        $
              2,379          $
         2,349              1%                                  $
            8,128                   $
             8,000  2%

    ---


       
                Expenses



       Compensation and benefits                                                    1,368                        1,392          (2)%          4,453                            4,502                      (1)%



       Information technology                                                         120                          125          (4)%            363                              363                                -%



       Premises                                                                        76                           94         (19)%            248                              283                     (12)%



       Depreciation of fixed assets                                                    44                           40           10%            124                              126                      (2)%



       Amortization and impairment of intangible assets                               101                          100            1%            295                              492                     (40)%



       Other general expenses                                                         310                          336          (8)%          1,000                            1,189                     (16)%



       Total operating expenses                                                     2,019                        2,087          (3)%          6,483                            6,955                      (7)%

    ---


       
                Operating income                                                  360                          262           37%          1,645                            1,045                       57%



       Interest income                                                                  1                                               -%                              4                       5              (20)%



       Interest expense                                                              (78)                        (69)          13%          (227)                           (208)                       9%



       Other income (expense)                                                           2                            1          100%              8                             (17)                   (147)%




       
                Income from continuing operations before income taxes             285                          194           47%          1,430                              825                       73%



       Income tax expense                                                              56                           39           44%            238                                9                    2,544%

    ---


       
                Net income from continuing operations                             229                          155           48%          1,192                              816                       46%

    ---


       Net income (loss) from discontinued operations                                 (1)                         (2)        (50)%            (1)                               5                    (120)%

    ---


       
                Net income                                                        228                          153           49%          1,191                              821                       45%



       Less: Net income attributable to noncontrolling interests                        6                            6                   -%                             33                      32                 3%




       
                Net income attributable to Aon shareholders                               $
              222            $
         147             51%                                  $
            1,158                     $
             789 47%

    ===




       
                Basic net income per share attributable to Aon shareholders



       Continuing operations                                                                 $
              0.94           $
         0.61             54%                                   $
            4.83                    $
             3.18 52%



       Discontinued operations                                                                                 (0.01)       (100)%                                           0.02                    (100)%




       Net income                                                                            $
              0.94           $
         0.60             57%                                   $
            4.83                    $
             3.20 51%

    ---


       
                Diluted net income per share attributable to Aon shareholders



       Continuing operations                                                                 $
              0.93           $
         0.61             52%                                   $
            4.79                    $
             3.17 51%



       Discontinued operations                                                                                 (0.01)       (100)%                                           0.02                    (100)%




       Net income                                                                            $
              0.93           $
         0.60             55%                                   $
            4.79                    $
             3.19 50%

    ---


       
                Weighted average ordinary shares outstanding - basic            236.9                        244.0          (3)%          239.9                            246.2                      (3)%

    ---


       
                Weighted average ordinary shares outstanding - diluted          239.1                        245.6          (3)%          241.9                            247.7                      (2)%

    ===




              (1)              The effective tax rate was 19.6% and
                                  20.1% for the three months ended
                                  September 30, 2019 and 2018,
                                  respectively, and 16.6% and 1.1% for
                                  the nine months ended September 30,
                                  2019 and 2018, respectively.



       
                
                  Aon plc


       Reconciliation of Non-GAAP Measures - Organic Revenue Growth and Free Cash Flow (Unaudited)


       
                Organic Revenue Growth From Continuing Operations (Unaudited)




                                                                                                       Three Months Ended



       
                
                  (millions)                                                     Sep 30,                     Sep 30,               %              Less:        
       
              Less:    
       
                Less:                       Organic
                                                                                                      2019                         2018    Change          Currency                   Fiduciary              Acquisitions,                    Revenue
                                                                                                                                                         Impact (1)                Investment              Divestitures                   Growth (3)
                                                                                                                                                                                   Income (2)                 & Other

    ---


       
                Revenue



       Commercial Risk Solutions                                                                            $
              1,057          $
            1,029                  3%                        (2)%                         -%                        (2)%       7%



       Reinsurance Solutions                                                                          291                          279                4                 (1)                           1                         (1)                           5



       Retirement Solutions                                                                           484                          501              (3)                (2)                                                          (4)                         3



       Health Solutions                                                                               279                          278                                      (3)                                                       1                          2



       Data & Analytic Services                                                                       271                          263                3                 (2)                                                            2                          3



       Elimination                                                                                    (3)                         (1)             N/A                N/A                         N/A                        N/A                          N/A

    ---


       
                Total revenue                                                                           $
              2,379          $
            2,349                  1%                        (2)%                         -%                        (2)%       5%

    ===



                                                                                                       Nine Months Ended



       
                
                  (millions)                                                     Sep 30,                     Sep 30,               %              Less:        
       
              Less:    
       
                Less:                       Organic
                                                                                                      2019                         2018    Change          Currency                   Fiduciary              Acquisitions,                    Revenue
                                                                                                                                                         Impact (1)                Investment              Divestitures                   Growth (3)
                                                                                                                                                                                   Income (2)                 & Other

    ---


       
                Revenue



       Commercial Risk Solutions                                                                            $
              3,342          $
            3,379                (1)%                        (3)%                         -%                        (4)%       6%



       Reinsurance Solutions                                                                        1,499                        1,401                7                 (2)                           1                         (1)                           9



       Retirement Solutions                                                                         1,323                        1,356              (2)                (3)                                                          (1)                         2



       Health Solutions                                                                             1,082                        1,038                4                 (4)                                                            3                          5



       Data & Analytic Services                                                                       893                          834                7                 (3)                                                            6                          4



       Elimination                                                                                   (11)                         (8)             N/A                N/A                         N/A                        N/A                          N/A

    ---


       
                Total revenue                                                                           $
              8,128          $
            8,000                  2%                        (3)%                         -%                        (1)%       6%

    ===




              (1)              Currency impact is determined by
                                  translating last year's revenue at
                                  this year's foreign exchange rates.



              (2)              Fiduciary investment income for the
                                  three months ended September 30,
                                  2019 and 2018 was $21 million and
                                  $15 million, respectively. Fiduciary
                                  investment income for the nine
                                  months ended September 30, 2019 and
                                  2018 was $58 million and $37
                                  million, respectively.



              (3)              Organic revenue growth includes the
                                  impact of intercompany activity and
                                  excludes the impact of changes in
                                  foreign exchange rates, fiduciary
                                  investment income, acquisitions,
                                  divestitures, transfers between
                                  revenue lines, and gains or losses
                                  on derivatives accounted for as
                                  hedges.



       
                Free Cash Flow from Operations (Unaudited)




                                                                       Nine Months Ended



       
                
                  (millions)                  Sep 30, 2019                   Sep 30, 2018           %
                                                                                                               Change

    ---


       Cash Provided by Operating Activities                                  $
            1,163              $
       975    19%



       Capital Expenditures Used for Operations                       (167)                          (179)     (7)



       
                Free Cash Flow Provided by Operations (1)                   $
            996              $
       796    25%

    ===




              (1)              Free cash flow is defined as cash
                                  flow from operations less capital
                                  expenditures. This non-GAAP
                                  measure does not imply or
                                  represent a precise calculation
                                  of residual cash flow available
                                  for discretionary expenditures.



       
                
                  Aon plc


       Reconciliation of Non-GAAP Measures - Operating Income from Continuing Operations and Diluted Earnings Per Share (Unaudited) (1)




                                                                                                                                             Three Months Ended                                     Nine Months Ended



       
                
                  (millions, except percentages)                                                                       Sep 30,                     Sep 30,               %                      Sep 30,      Sep 30,          %
                                                                                                                                            2019                         2018                                          2019          2018
                                                                                                                                                                                         Change                                               Change

    ---


       
                Revenue from continuing operations                                                                                            $
              2,379          $
       2,349         1%                         $
           8,128 $
            8,000  2%






       
                Operating income from continuing operations                                                                                     $
              360            $
       262        37%                         $
           1,645 $
            1,045 57%



       Amortization and impairment of intangible assets (2)                                                                                 101                          100                                           295           492



       Restructuring                                                                                                                         63                           97                                           281           366



       Legacy Litigation                                                                                                                                               (25)                                                        78



       
                Operating income from continuing operations - as adjusted                                                                       $
              524            $
       434        21%                         $
           2,221 $
            1,981 12%

    ---


       
                Operating margin from continuing operations                                                                           15.1%                       11.2%                                        20.2%        13.1%



       
                Operating margin from continuing operations - as adjusted                                                             22.0%                       18.5%                                        27.3%        24.8%

    ---


                                                                                                             Three Months Ended                                           Nine Months Ended



       
                
                  (millions, except percentages)                                        Sep 30,                    Sep 30,                 %                          Sep 30,                 Sep 30,                        %
                                                                                                             2019                        2018                                                2019                     2018
                                                                                                                                                           Change                                                                             Change

    ---


       
                Operating income from continuing operations - as adjusted                                       $
              524           $
         434             21%                                   $
            2,221               $
            1,981 12%



       Interest income                                                                                         1                                    100%              4                                 5                      (20)%



       Interest expense                                                                                     (78)                       (69)         13%          (227)                            (208)                        9%



       Other income (expense):



       Other income (expense) - pensions - as adjusted (3)                                                     3                           9        (67)%             12                                27                      (56)%



       Other income (expense) - other                                                                        (1)                          1       (200)%            (4)                             (12)                     (67)%




       Total Other income (expense) - as adjusted (3)                                                          2                          10        (80)%              8                                15                      (47)%




       
                Income before income taxes from continuing operations - as adjusted                      449                         375          20%          2,006                             1,793                        12%



       Income tax expense (4)                                                                                 96                          48         100%            365                               273                        34%




       
                Net income from continuing operations - as adjusted                                      353                         327           8%          1,641                             1,520                         8%



       Less: Net income attributable to noncontrolling interests                                               6                           6                  -%                             33                       32              3%




       
                Net income attributable to Aon shareholders from continuing operations - as adjusted     347                         321           8%          1,608                             1,488                         8%




       
                Net income (loss) from discontinued operations - as adjusted (5)                         (1)                        (2)       (50)%            (1)                              (4)                     (75)%




       
                Net income attributable to Aon shareholders -  as adjusted                                      $
              346           $
         319              8%                                   $
            1,607               $
            1,484  8%

    ===


       
                Diluted net income (loss) per share attributable to Aon shareholders



       Continuing operations - as adjusted                                                                         $
              1.45          $
         1.31             11%                                    $
            6.64                $
            6.01 10%



       Discontinued operations - as adjusted                                                                                         (0.01)      (100)%                                          (0.02)                    (100)%




       
                Net income attributable to Aon shareholders - as adjusted                                      $
              1.45          $
         1.30             12%                                    $
            6.64                $
            5.99 11%

    ---


       
                Weighted average ordinary shares outstanding - diluted                                 239.1                       245.6         (3)%          241.9                             247.7                       (2)%

    ===


       
                Effective Tax Rates (4)



       Continuing Operations - U.S. GAAP                                                                   19.6%                      20.1%                                              16.6%                    1.1%



       Continuing Operations - Non-GAAP                                                                    21.4%                      12.8%                                              18.2%                   15.2%



       Discontinued Operations - U.S. GAAP                                                                 26.0%                      21.3%                                              50.4%                    8.8%



       Discontinued Operations - Non-GAAP                                                                  26.0%                      26.7%                                              50.4%                   36.5%

    ---




              (1)              Certain noteworthy items
                                  impacting operating income in
                                  2019 and 2018 are described in
                                  this schedule. The items shown
                                  with the caption "as adjusted"
                                  are non-GAAP measures.



              (2)              Included in the nine months
                                  ended September 30, 2018 was a
                                  $176 million non-cash
                                  impairment charge taken on
                                  certain assets and liabilities
                                  held for sale.



              (3)              Adjusted Other income (expense)
                                  excludes Pension settlement
                                  charges of $9 million and $32
                                  million for three and nine
                                  months ended September 30,
                                  2018, respectively.



              (4)              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
                                  rate. In addition, tax expense
                                  excludes the tax impacts of the
                                  sale of the disposal group and
                                  enactment date impacts of U.S.
                                  Tax Reform.



              (5)              Adjusted income from
                                  discontinued operations, net of
                                  tax, excludes the gain on sale
                                  of discontinued operations of
                                  $9 million for the nine months
                                  ended September 30, 2018. The
                                  effective tax rate was further
                                  adjusted for the applicable tax
                                  impact associated with the gain
                                  on sale, as applicable.



       
                
                  Aon plc


       Pro Forma Historical Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings Per Share from Continuing Operations as Adjusted for Changes in Accounting Guidance (Unaudited) (1)(2)




                                                                                                                                                                                                                                                   
              
              Pro Forma Periods                                                                                                                        
              
         Reported Periods



                                                                                                                                                                                                                        
         
            Three Months Ended (5)                                            Full Year                                         
            
             Three Months Ended (6)                                                           Full Year                     Three Months Ended (7)

                                                                                                                                                                                                                                                                                                           2017 (5)                                                                                                                                              2018 (6)




       
                
                  (millions, except per share data)                                                                                                                                           Mar 31,         Jun 30,                         Sep 30,                       Dec 31,                             Mar 31,     Jun 30,           Sep 30,                        Dec 31,             Mar 31,                    Jun 30,                     Sep 30,
                                                                                                                                                                                                                   2017             2017                             2017                           2017                                 2018         2018               2018                            2018                 2019                        2019                        2019

    ---                                                                                                                                                                                                                                                                                                                                                                                                                                                                        ---


       
                Revenue



       Commercial Risk Solutions                                                                                                                                                                                           $
          989                                                  $
          1,041                         $
           915                $
            1,218                                    $
             4,163                                                          $
             1,184                 $
       1,166 $
       1,029 $
       1,273  $
       4,652 $
       1,118 $
       1,167 $
        1,057



       Reinsurance Solutions                                                                                                                                                                                       671              345                              257                            153               1,426                           742                380                             279                  162                       1,563                         788                 420           291



       Retirement Solutions                                                                                                                                                                                        385              388                              492                            489               1,754                           424                431                             501                  509                       1,865                         420                 419           484



       Health Solutions                                                                                                                                                                                            428              281                              277                            526               1,512                           451                309                             278                  558                       1,596                         486                 317           279



       Data & Analytic Services                                                                                                                                                                                    273              281                              287                            299               1,140                           294                277                             263                  271                       1,105                         336                 286           271



       Elimination                                                                                                                                                                                                   -             (4)                             (5)                           (1)               (10)                          (5)               (2)                            (1)                 (3)                       (11)                          (5)              (3)            (3)

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               ---


       Total revenue                                                                                                                                                                                                     $
          2,746                                                  $
          2,332                       $
           2,223                $
            2,684                                    $
             9,985                                                          $
             3,090                 $
       2,561 $
       2,349 $
       2,770 $
       10,770 $
       3,143 $
       2,606 $
        2,379

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              ---


       
                Expenses



       Compensation and benefits                                                                                                                                                                                 1,548            1,471                            1,420                          1,568               6,007                         1,616              1,494                           1,392                1,601                       6,103                       1,584               1,501         1,368



       Information technology                                                                                                                                                                                       88               98                              109                            124                 419                           115                123                             125                  121                         484                         117                 126           120



       Premises                                                                                                                                                                                                     84               86                               89                             89                 348                            93                 96                              94                   87                         370                          87                  85            76



       Depreciation of fixed assets                                                                                                                                                                                 54               54                               40                             39                 187                            39                 47                              40                   50                         176                          40                  40            44



       Amortization of intangible assets                                                                                                                                                                            43              460                              101                            100                 704                           110                282                             100                  101                         593                          97                  97           101



       Other general expenses                                                                                                                                                                                      307              330                              307                            328               1,272                           318                535                             336                  311                       1,500                         346                 344           310

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               ---


       Total operating expenses                                                                                                                                                                                  2,124            2,499                            2,066                          2,248               8,937                         2,291              2,577                           2,087                2,271                       9,226                       2,271               2,193         2,019




       
                Operating income                                                                                                                                                                               622            (167)                             157                            436               1,048                           799               (16)                            262                  499                       1,544                         872                 413           360



       Amortization of intangible assets                                                                                                                                                                            43              460                              101                            100                 704                           110                282                             100                  101                         593                          97                  97           101



       Restructuring                                                                                                                                                                                               144              155                              102                             96                 497                            74                195                              97                  119                         485                          91                 127            63



       Legacy Litigation                                                                                                                                                                                             -                                                                                                                                             103                            (25)                 (3)                         75



       Regulatory and compliance matters                                                                                                                                                                             -              34                                8                           (14)                 28



       
                Operating income - as adjusted                                                                                                                                                                 809              482                              368                            618               2,277                           983                564                             434                  716                       2,697                       1,060                 637           524

    ---                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        ---


       
                Operating margin from continuing operations - as adjusted                                                                                                                                    29.5%           20.7%                           16.6%                         23.0%              22.8%                        31.8%             22.0%                          18.5%               25.8%                      25.0%                        33.7%            24.4%          22.0%

    ---


       Interest income                                                                                                                                                                                               2                8                               10                              7                  27                             4                  1                                                                              5                           2                   1             1



       Interest expense                                                                                                                                                                                           (70)            (71)                            (70)                          (71)              (282)                         (70)              (69)                           (69)                (70)                      (278)                         (72)             (77)           (78)



       Other income (expense):



       Other income (expense) - pensions - as adjusted (3)                                                                                                                                                           8                9                                9                             16                  42                             9                  9                               9                   11                          38                           4                   5             3



       Other income (expense) - other - as adjusted (4)                                                                                                                                                           (10)             (5)                             (5)                          (19)               (39)                         (17)                 4                               1                 (14)                       (26)                          (4)                1             (1)

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               ---


       Total Other income (expense) - as adjusted (3)(4)                                                                                                                                                           (2)               4                                4                            (3)                  3                           (8)                13                              10                  (3)                         12                                              6             2

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               ---


       
                Income before income taxes from continuing operations - as adjusted                                                                                                                            739              423                              312                            551               2,025                           909                509                             375                  643                       2,436                         990                 567           449



       Income taxes                                                                                                                                                                                                 98               68                               54                             81                 301                           150                 75                              48                  106                         379                         167                 102            96

    ---


       
                Income from continuing operations - as adjusted                                                                                                                                                641              355                              258                            470               1,724                           759                434                             327                  537                       2,057                         823                 465           353



       Less: Net income attributable to noncontrolling interests                                                                                                                                                    14                9                                7                              7                  37                            16                 10                               6                    8                          40                          17                  10             6

    ---                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        ---


       
                Net income attributable to Aon shareholders from continuing operations - as adjusted                                                                                                                   $
          627                                                    $
          346                         $
           251                  $
            463                                    $
             1,687                                                            $
             743                   $
       424   $
       321   $
       529  $
       2,017   $
       806   $
       455   $
        346

    ===


       
                Diluted earnings per share from continuing operations - as adjusted                                                                                                                                   $
          2.35                                                   $
          1.31                        $
           0.98                 $
            1.82                                     $
             6.47                                                           $
             2.97                  $
       1.71  $
       1.31  $
       2.16   $
       8.16  $
       3.31  $
       1.87  $
        1.45

    ===                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       ===


       
                Weighted average ordinary shares outstanding - diluted                                                                                                                                       267.0            264.3                            257.3                          254.5               260.7                         250.2              247.4                           245.6                245.0                       247.0                       243.7               242.8         239.1

    ===                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        ===



          Notes



     (1)       Certain noteworthy items impacting
                  operating income in 2017, 2018,
                  and 2019, are described in this
                  schedule. The items shown with the
                  caption "as adjusted" are non-
                  GAAP measures.



     (2)       The 2017 historical periods
                  presented above have been adjusted
                  retrospectively to reflect Aon's
                  adoption of the new revenue
                  recognition standard in the first
                  quarter of 2018. For a complete
                  reconciliation of prior period
                  reported balances to the pro forma
                  adjusted balances above, please
                  refer to our press release issued
                  on February 2, 2018.



     (3)       Adjusted Other income (expense)
                  excludes pension settlement
                  charges taken within each
                  respective period. Pension
                  settlement charges were $128
                  million for the three and twelve
                  months ended December 31, 2017.
                  Pension settlement charges were $7
                  million, $16 million, $9 million,
                  and $5 million, respectively, for
                  the three months ended March 31,
                  2018, June 30, 2018, September 30,
                  2018, and December 31, 2018, and
                  $37 million for the twelve months
                  ended December 31, 2018.



     (4)       For illustrative purposes, the
                  impact of the total foreign
                  currency related to the new
                  revenue accounting guidance is
                  excluded from the Pro Forma
                  financial statements. The impact
                  on Other income (expense) of
                  foreign currency due to this new
                  guidance was $(2) million, $(4)
                  million, $(6) million, and $1
                  million, respectively, for the
                  three months ended March 31, 2017,
                  June 30, 2017, September 30, 2017,
                  and December 31, 2017, and $(11)
                  million for the twelve months
                  ended December 31, 2017.



     (5)       The non-GAAP effective tax rates
                  reported were 11.1%, 15.6%, 17.5%,
                  and 15.5%, respectively, for the
                  three months ended March 31, 2017,
                  June 30, 2017, September 30, 2017,
                  and December 31, 2017, and 14.9%
                  for the twelve months ended
                  December 31, 2017. Adjusted items
                  are generally taxed at the
                  estimated annual effective tax
                  rate, except for the applicable
                  tax impact associated with
                  estimated restructuring expenses,
                  accelerated tradename
                  amortization, impairment charges,
                  regulatory and compliance
                  provisions, and non-cash pension
                  settlements, which are adjusted at
                  the related jurisdictional rate.
                  In addition, tax expense excludes
                  the provisional estimates of the
                  impact of U.S. Tax Reform. The
                  non-GAAP effective tax rates for
                  continuing operations, adjusted
                  for the change in accounting
                  guidance were 13.3%, 16.1%, 17.3%,
                  and 14.7% for the three months
                  ended March 31, 2017, June 30,
                  2017, September 30, 2017, and
                  December 31, 2017, and 14.9% for
                  the twelve months ended December
                  31, 2017.



     (6)       The non-GAAP effective tax rates
                  reported were 16.5%, 14.7%, 12.8%,
                  and 16.5% respectively, for the
                  three months ended March 31, 2018,
                  June 30, 2018, September 30, 2018,
                  and December 31, 2018 and 15.6%
                  for the twelve months ended
                  December 31, 2018. Adjusted items
                  are generally taxed at the
                  estimated annual effective tax
                  rate, except for the applicable
                  tax impact associated with
                  estimated restructuring expenses,
                  legacy litigation, accelerated
                  tradename amortization, impairment
                  charges, and non-cash pension
                  settlement charges, which are
                  adjusted at the related
                  jurisdictional rate. In addition,
                  tax expense excludes the tax
                  impacts of the sale of certain
                  assets and liabilities previously
                  classified as held for sale, as
                  well as enactment date impacts of
                  US Tax Reform.



     (7)       The non-GAAP effective tax rates
                  reported were 16.9%, 18.0%, and
                  21.4%, respectively, for the three
                  months ended March 31, 2019, June
                  30, 2019, and September 30, 2019,
                  and 18.2% for the nine months
                  ended September 30, 2019. Adjusted
                  items are generally taxed at the
                  estimated annual effective tax
                  rate, except for the applicable
                  tax impact associated with
                  estimated restructuring expenses
                  and accelerated tradename
                  amortization, which are adjusted
                  at the related jurisdictional
                  rate. In addition, the tax expense
                  excludes the tax impacts of
                  payment of certain legacy
                  litigation and enactment date
                  impacts of the Tax Cuts and Jobs
                  Act of 2017.



       
                
                  Aon plc


       Condensed Consolidated Statements of Financial Position (Unaudited)




                                                                                    
            
          As of



       
                
                  (millions)                              September 30,                 December 31,
                                                                                     2019                          2018

    ---


       
                ASSETS



       
                Current assets



       Cash and cash equivalents                                                            $
        602                              $
        656



       Short-term investments                                                        177                                    172



       Receivables, net                                                            2,866                                  2,760



       Fiduciary assets (1)                                                       11,041                                 10,166



       Other current assets                                                          631                                    618




       
                Total current assets                                          15,317                                 14,372



       Goodwill                                                                    8,071                                  8,171



       Intangible assets, net                                                        874                                  1,149



       Fixed assets, net                                                             606                                    588



       Operating lease right-of-use assets                                           913



       Deferred tax assets                                                           611                                    561



       Prepaid pension                                                             1,213                                  1,133



       Other non-current assets                                                      562                                    448



       
                Total assets                                                         $
        28,167                           $
        26,422

    ===




       
                Liabilities and equity



       
                Liabilities



       
                Current liabilities



       Accounts payable and accrued liabilities                                           $
        1,499                            $
        1,943



       Short-term debt and current portion of long-term debt                       1,148                                    251



       Fiduciary liabilities                                                      11,041                                 10,166



       Other current liabilities                                                   1,163                                    936




       
                Total current liabilities                                     14,851                                 13,296



       Long-term debt                                                              6,120                                  5,993



       Non-current operating lease liabilities                                       922



       Deferred tax liabilities                                                      209                                    181



       Pension, other postretirement, and postemployment liabilities               1,551                                  1,636



       Other non-current liabilities                                                 953                                  1,097




       
                Total liabilities                                             24,606                                 22,203

    ---




       
                Equity



       Ordinary shares - $0.01 nominal value                                           2                                      2



       Additional paid-in capital                                                  6,084                                  5,965



       Retained earnings                                                           1,436                                  2,093



       Accumulated other comprehensive loss                                      (4,030)                               (3,909)




       
                Total Aon shareholders' equity                                 3,492                                  4,151



       Noncontrolling interests                                                       69                                     68




       
                Total equity                                                   3,561                                  4,219



       
                Total liabilities and equity                                         $
        28,167                           $
        26,422

    ===




              (1)              Includes cash and short-term
                                  investments of $5,058 million and
                                  $3,866 million for the periods ended
                                  September 30, 2019 and December 31,
                                  2018, respectively.



       
                
                  Aon plc


       Condensed Consolidated Statements of Cash Flows (Unaudited)




                                                                                                         Nine Months Ended



       
                
                  (millions)                                        September 30,                        September 30,
                                                                                               2019                                  2018

    ---


       
                Cash flows from operating activities



       Net income                                                                                  $
         1,191                                   $
     821



       Less: Net income (loss) from discontinued operations                                    (1)                                             5



       Adjustments to reconcile net income to cash provided by operating activities:



       (Gain) loss from sales of businesses, net                                               (8)                                             4



       Depreciation of fixed assets                                                            124                                            126



       Amortization and impairment of intangible assets                                        295                                            492



       Share-based compensation expense                                                        252                                            214



       Deferred income taxes                                                                  (44)                                         (128)



       Change in assets and liabilities:



       Fiduciary receivables                                                                   174                                            766



       Short-term investments - funds held on behalf of clients                            (1,285)                                         (731)



       Fiduciary liabilities                                                                 1,111                                           (35)



       Receivables, net                                                                      (167)                                          (11)



       Accounts payable and accrued liabilities                                              (385)                                         (331)



       Restructuring reserves                                                                 (62)                                            14



       Current income taxes                                                                      3                                          (137)



       Pension, other postretirement and postemployment liabilities                          (127)                                         (223)



       Other assets and liabilities                                                             90                                            139




       
                Cash provided by operating activities                                    1,163                                            975

    ---


       
                Cash flows from investing activities



       Proceeds from investments                                                                33                                             30



       Payments for investments                                                               (94)                                          (65)



       Net sales (purchases) of short-term investments - non-fiduciary                         (7)                                           356



       Acquisition of businesses, net of cash acquired                                        (39)                                          (50)



       Sale of businesses, net of cash sold                                                     43                                            (8)



       Capital expenditures                                                                  (167)                                         (179)




       
                Cash provided by (used for) investing activities                         (231)                                            84

    ---


       
                Cash flows from financing activities



       Share repurchase                                                                    (1,507)                                       (1,272)



       Issuance of shares for employee benefit plans                                         (133)                                         (139)



       Issuance of debt                                                                      4,918                                          3,960



       Repayment of debt                                                                   (3,858)                                       (3,498)



       Cash dividends to shareholders                                                        (307)                                         (285)



       Noncontrolling interests and other financing activities                                (81)                                          (21)




       
                Cash used for financing activities                                       (968)                                       (1,255)

    ---


       
                Effect of exchange rates on cash and cash equivalents                     (18)                                          (76)




       
                Net decrease in cash and cash equivalents                                 (54)                                         (272)



       
                Cash and cash equivalents at beginning of period                           656                                            756



       
                Cash and cash equivalents at end of period                                       $
         602                                   $
     484

    ===



       
                
                  Aon plc


       Restructuring Plan (Unaudited) (1)




                                                                                 Three Months Ended                    Nine Months Ended             Inception                       Estimated                 Estimated
                                                                     September 30, 2019                    September 30, 2019                to Date                  Remaining Costs            Total Cost (2)




       Workforce reduction                                                                          $
      9                                                     $
     111                                                      $
     525         $
     25          $
     550



       Technology rationalization                                                               14                                       29                                                 109                                16    125



       Lease consolidation                                                                       3                                       17                                                  53                                27     80



       Asset impairments                                                                         5                                        7                                                  46                                 4     50



       Other costs associated with restructuring and separation (3)                             32                                      117                                                 530                                15    545




       Total restructuring and related expenses                                                    $
      63                                                     $
     281                                                1,263         $
     87        $
     1,350

    ===




              (1)              In the Condensed Consolidated
                                  Statements of Income, workforce
                                  reductions are included in
                                  "Compensation and benefits," IT
                                  rationalization is included in
                                  "Information technology," lease
                                  consolidations are included in
                                  "Premises," asset impairments are
                                  included in "Depreciation of fixed
                                  assets," and other costs associated
                                  with restructuring are included in
                                  "Other general expenses" depending on
                                  the nature of the expense.



              (2)              Actual costs, when incurred, may vary
                                  due to changes in the assumptions
                                  built into this plan. Significant
                                  assumptions that may change when plans
                                  are finalized and implemented include,
                                  but are not limited to, changes in
                                  severance calculations, changes in the
                                  assumptions underlying sublease loss
                                  calculations due to changing market
                                  conditions, and changes in the overall
                                  analysis that might cause the Company
                                  to add or cancel component
                                  initiatives. Estimated allocations
                                  between expense categories may be
                                  revised in future periods as these
                                  assumptions are updated. Estimated
                                  Total Cost includes $100 million of
                                  non-cash charges.



              (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.

View original content:http://www.prnewswire.com/news-releases/aon-reports-third-quarter-2019-results-300945318.html

SOURCE Aon plc