Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 26, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Aon plc | |
Entity Central Index Key | 315,293 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 249,897,712 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue | ||||
Total revenue | $ 2,340 | $ 2,201 | $ 7,089 | $ 6,759 |
Expenses | ||||
Compensation and benefits | 1,419 | 1,300 | 4,337 | 4,041 |
Information technology | 109 | 99 | 295 | 281 |
Premises | 89 | 86 | 259 | 257 |
Depreciation of fixed assets | 40 | 39 | 148 | 118 |
Amortization and impairment of intangible assets | 101 | 42 | 604 | 117 |
Other general expenses | 317 | 267 | 956 | 770 |
Total operating expenses | 2,075 | 1,833 | 6,599 | 5,584 |
Operating income | 265 | 368 | 490 | 1,175 |
Interest income | 10 | 1 | 20 | 6 |
Interest expense | (70) | (70) | (211) | (212) |
Other income (expense) | (5) | 10 | (20) | 27 |
Income from continuing operations before income taxes | 200 | 309 | 279 | 996 |
Income tax expense (benefit) | 4 | 25 | (139) | 127 |
Net income from continuing operations | 196 | 284 | 418 | 869 |
Income (loss) from discontinued operations, net of tax | (4) | 42 | 857 | 102 |
Net income | 192 | 326 | 1,275 | 971 |
Less: Net income attributable to noncontrolling interests | 7 | 7 | 30 | 27 |
Net income attributable to Aon shareholders | $ 185 | $ 319 | $ 1,245 | $ 944 |
Basic net income (loss) per share attributable to Aon shareholders | ||||
Basic net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share) | $ 0.74 | $ 1.03 | $ 1.49 | $ 3.13 |
Basic net income (loss) per share attributable to Aon shareholders, discontinued operations (in dollars per share) | (0.02) | 0.16 | 3.28 | 0.38 |
Basic net income (loss) per share attributable to Aon shareholders (in dollars per share) | 0.72 | 1.19 | 4.77 | 3.51 |
Diluted net income (loss) per share attributable to Aon shareholders | ||||
Diluted net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share) | 0.73 | 1.03 | 1.48 | 3.11 |
Diluted net income (loss) per share attributable to Aon shareholders, discontinued operations (in dollars per share) | (0.01) | 0.15 | 3.26 | 0.37 |
Diluted net income (loss) per share attributable to Aon shareholders (in dollars per share) | 0.72 | 1.18 | 4.74 | 3.48 |
Cash dividends per share paid on ordinary shares (in dollars per share) | $ 0.36 | $ 0.33 | $ 1.05 | $ 0.96 |
Weighted average ordinary shares outstanding - basic (in shares) | 255.6 | 267.5 | 260.9 | 269.1 |
Weighted average ordinary shares outstanding - diluted (in shares) | 257.3 | 269.6 | 262.9 | 271 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 192 | $ 326 | $ 1,275 | $ 971 |
Less: Net income attributable to noncontrolling interests | 7 | 7 | 30 | 27 |
Net income attributable to Aon shareholders | 185 | 319 | 1,245 | 944 |
Other comprehensive income (loss), net of tax: | ||||
Change in fair value of financial instruments | 11 | 0 | 13 | (11) |
Foreign currency translation adjustments | 243 | (89) | 434 | (227) |
Postretirement benefit obligation | 18 | 18 | 56 | (132) |
Total other comprehensive income (loss) | 272 | (71) | 503 | (370) |
Less: Other comprehensive income attributable to noncontrolling interests | 7 | 0 | 3 | 0 |
Total other comprehensive income (loss) attributable to Aon shareholders | 265 | (71) | 500 | (370) |
Comprehensive income (loss) attributable to Aon shareholders | $ 450 | $ 248 | $ 1,745 | $ 574 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 749 | $ 426 |
Short-term investments | 1,640 | 290 |
Receivables, net | 2,068 | 2,106 |
Fiduciary assets | 9,292 | 8,959 |
Other current assets | 518 | 247 |
Current assets of discontinued operations | 0 | 1,118 |
Total Current Assets | 14,267 | 13,146 |
Goodwill | 7,888 | 7,410 |
Intangible assets, net | 1,341 | 1,890 |
Fixed assets, net | 545 | 550 |
Deferred tax assets | 565 | 325 |
Prepaid pension | 1,020 | 858 |
Other non-current assets | 298 | 360 |
Non-current assets of discontinued operations | 0 | 2,076 |
TOTAL ASSETS | 25,924 | 26,615 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,588 | 1,604 |
Short-term debt and current portion of long-term debt | 305 | 336 |
Fiduciary liabilities | 9,292 | 8,959 |
Other current liabilities | 1,289 | 656 |
Current liabilities of discontinued operations | 0 | 940 |
Total Current Liabilities | 12,474 | 12,495 |
Long-term debt | 5,662 | 5,869 |
Deferred tax liabilities | 83 | 101 |
Pension, other postretirement and postemployment liabilities | 1,612 | 1,760 |
Other non-current liabilities | 846 | 719 |
Non-current liabilities of discontinued operations | 0 | 139 |
TOTAL LIABILITIES | 20,677 | 21,083 |
EQUITY | ||
Ordinary shares - $0.01 nominal value Authorized: 750 shares (issued: 2017 - 250.8; 2016 - 262.0) | 3 | 3 |
Additional paid-in capital | 5,670 | 5,577 |
Retained earnings | 2,914 | 3,807 |
Accumulated other comprehensive loss | (3,412) | (3,912) |
TOTAL AON SHAREHOLDERS' EQUITY | 5,175 | 5,475 |
Noncontrolling interests | 72 | 57 |
TOTAL EQUITY | 5,247 | 5,532 |
TOTAL LIABILITIES AND EQUITY | $ 25,924 | $ 26,615 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Financial Position (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, nominal or par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares (in shares) | 750,000,000 | 750,000,000 |
Common stock, issued shares (in shares) | 250,800,000 | 262,000,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Ordinary Shares and Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss, Net of Tax | Non- controlling Interests |
Increase (Decrease) in Shareholders' Equity | |||||
Adoption of new accounting guidance | $ 49 | $ 0 | $ 49 | $ 0 | $ 0 |
Balance at January 1, 2017 | $ 5,581 | $ 5,580 | 3,856 | (3,912) | 57 |
Beginning Balance (in shares) at Dec. 31, 2016 | 262 | 262 | |||
Beginning Balance at Dec. 31, 2016 | $ 5,532 | $ 5,580 | 3,807 | (3,912) | 57 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 1,275 | 1,245 | 30 | ||
Shares issued - employee stock compensation plans (in shares) | 3.3 | ||||
Shares issued - employee stock compensation plans | (117) | $ (117) | |||
Shares purchased (in shares) | (14.5) | ||||
Shares purchased | (1,913) | (1,913) | |||
Share-based compensation expense | 214 | $ 214 | |||
Dividends to shareholders | (274) | (274) | |||
Net change in fair value of financial instruments | 13 | 13 | |||
Net foreign currency translation adjustments | 434 | 431 | 3 | ||
Net postretirement benefit obligation | 56 | 56 | |||
Purchases of shares from noncontrolling interests | (5) | $ (4) | (1) | ||
Dividends paid to noncontrolling interests on subsidiary common stock | $ (17) | (17) | |||
Ending Balance (in shares) at Sep. 30, 2017 | 250.8 | 250.8 | |||
Ending Balance at Sep. 30, 2017 | $ 5,247 | $ 5,673 | $ 2,914 | $ (3,412) | $ 72 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 1,275 | $ 971 |
Income from discontinued operations, net of income taxes | 857 | 102 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Loss (gain) from sales of businesses and investments, net | 2 | (41) |
Depreciation of fixed assets | 148 | 118 |
Amortization and impairment of intangible assets | 604 | 117 |
Share-based compensation expense | 214 | 210 |
Deferred income taxes | (208) | (7) |
Change in assets and liabilities: | ||
Fiduciary receivables | 986 | 1,538 |
Short-term investments — funds held on behalf of clients | (701) | (419) |
Fiduciary liabilities | (285) | (1,119) |
Receivables, net | 144 | 175 |
Accounts payable and accrued liabilities | (237) | (246) |
Restructuring reserves | 170 | 0 |
Current income taxes | (785) | (80) |
Pension, other postretirement and other postemployment liabilities | (142) | (70) |
Other assets and liabilities | (39) | 107 |
Cash provided by operating activities - continuing operations | 289 | 1,152 |
Cash provided by operating activities - discontinued operations | 64 | 323 |
CASH PROVIDED BY OPERATING ACTIVITIES | 353 | 1,475 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from investments | 43 | 31 |
Payments for investments | (55) | (47) |
Net sale (purchases) of short-term investments — non-fiduciary | (1,344) | (108) |
Acquisition of businesses, net of cash acquired | (172) | (198) |
Sale of businesses, net of cash sold | 4,194 | 104 |
Capital expenditures | (125) | (107) |
Cash provided by (used for) investing activities - continuing operations | 2,541 | (325) |
Cash used for investing activities - discontinued operations | (19) | (46) |
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 2,522 | (371) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Share repurchase | (1,888) | (1,037) |
Issuance of shares for employee benefit plans | (118) | (70) |
Issuance of debt | 1,651 | 2,729 |
Repayment of debt | (1,998) | (2,308) |
Cash dividends to shareholders | (274) | (258) |
Noncontrolling interests and other financing activities | (21) | (71) |
Cash used for financing activities - continuing operations | (2,648) | (1,015) |
Cash used for financing activities - discontinued operations | 0 | 0 |
CASH USED FOR FINANCING ACTIVITIES | (2,648) | (1,015) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 91 | 10 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 318 | 99 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 431 | 384 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 749 | 483 |
Supplemental disclosures: | ||
Interest paid | 195 | 196 |
Income taxes paid, net of refunds | $ 854 | $ 153 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements and Notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Condensed Consolidated Financial Statements include the accounts of Aon plc and all of its controlled subsidiaries (“Aon” or the “Company”). All intercompany accounts and transactions have been eliminated. The Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for all periods presented. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The results for the three and nine months ended September 30, 2017 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2017 . Discontinued Operations On February 9, 2017, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Tempo Acquisition, LLC (the “Buyer”), an entity formed and controlled by affiliates of The Blackstone Group L.P. Pursuant to the Purchase Agreement, the Company sold its benefits administration and business process outsourcing business (the “Divested Business”) to the Buyer and certain designated purchasers that are direct or indirect subsidiaries of the Buyer (the “Transaction”). As a result, the Divested Business’s financial results are reflected in the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Financial Position, and Condensed Consolidated Statements of Cash Flows, retrospectively, as discontinued operations beginning in the first quarter of 2017. Additionally, all of the Notes to Condensed Consolidated Financial Statements have been retrospectively restated to only include the impacts of continuing operations, unless noted otherwise. The Transaction closed on May 1, 2017. Refer to Note 3 “Discontinued Operations” for additional information. Reportable Segments Beginning in the first quarter of 2017, the Company began operating as one segment that includes all of Aon’s continuing operations, which provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines that make up our principal products and services. Refer to Note 17 “Segment Information” for additional information. As a result of these initiatives, Aon made the following changes to its presentation of the Condensed Consolidated Statement of Income beginning in the first quarter of 2017: • Commissions, fees and other and Fiduciary investment income are now reported as one Total revenue line item; and • Other general expenses has been further broken out to provide greater clarity into charges related to Information technology, Premises, Depreciation of fixed assets, and Amortization and impairment of intangible assets. Prior period comparable financial information has been reclassified to conform to this presentation. The Company believes this presentation provides greater clarity into the risks and opportunities that management believes are important and allows users of the financial statements to assess the performance in the same way as the Chief Operating Decision Maker (the “CODM”). Use of Estimates The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the financial statements in future periods. |
Accounting Principles and Pract
Accounting Principles and Practices | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Accounting Principles and Practices | Accounting Principles and Practices Adoption of New Accounting Standards Share-based Compensation In March 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period. Further, excess tax benefits are required to be classified along with other income tax cash flows as an operating activity. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. The Company adopted this guidance on January 1, 2017, with the following impacts: • An increase to Deferred tax assets on the Condensed Consolidated Statement of Financial Position of approximately $49 million through a cumulative-effect adjustment to Retained earnings for excess tax benefits not previously recognized, and • The recognition of $5 million , or $0.02 per share, income tax benefit from continuing operations related to excess tax benefits in the Condensed Consolidated Statement of Income for the three months ended September 30, 2017 , and $53 million , or $0.20 per share, for the nine months ended September 30, 2017 . Adoption of the guidance was applied prospectively on the Condensed Consolidated Statement of Cash Flows and prior period comparable information was not restated. Other elements of the guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Accounting Standards Issued But Not Yet Adopted Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued new accounting guidance on targeted improvements to accounting for hedging activities. The new guidance amends its hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the effect of a hedging instrument to be presented in the same income statement line as the hedged item. An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the period of adoption. Changes to income statement presentation and financial statement disclosures will be applied prospectively. The new guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted. The Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and the period in which it plans to adopt. Presentation of Net Periodic Pension and Postretirement Benefit Costs In March 2017, the FASB issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. An entity will apply the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Condensed Consolidated Statement of Income and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension costs and net periodic postretirement benefit cost in assets. The new guidance allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The new guidance is effective for Aon in the first quarter of 2018. The adoption of this guidance will have no impact on the total results of the Company. The presentation of results will reflect a change in Operating income offset by an equal change in Other income (expense) for the period. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued new accounting guidance on simplifying the test for goodwill impairment. Currently the standard requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. The new guidance removes Step 2. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. An entity will apply the new guidance on a prospective basis. The new guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted for annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the period of adoption and the impact that the standard will have on the Condensed Consolidated Financial Statements. Income Tax Consequences of Intercompany Transactions In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory. The guidance will require that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e., depreciated, amortized, or impaired). An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The new guidance is effective for Aon in the first quarter of 2018, and the Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements. Statement of Cash Flows In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity will no longer have discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard will be effective for the Company in the first quarter of 2018, with early adoption permitted. An entity will apply the new guidance through retrospective adjustment to all periods presented. The retrospective approach includes a practical expedient that entities may apply should retrospective adoption be impracticable; in this case, the amendments for these issues may be applied prospectively as of the earliest date practicable. The guidance will not have a material impact on the Company’s Condensed Consolidated Statements of Cash Flows. Credit Losses In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments. The new guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements, as well as the method of transition and period of adoption. Leases In February 2016, the FASB issued new accounting guidance on leases, which requires lessees to recognize assets and liabilities for most leases. Under the new guidance, a lessee should recognize in the Condensed Consolidated Statement of Financial Position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from currently effective U.S. GAAP. The new standard will be effective for the Company in the first quarter of 2019, with early adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Aon is currently evaluating the impact the standard will have on the Condensed Consolidated Financial Statements and period of adoption. Financial Assets and Liabilities In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. An entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values, including disclosure requirements, should be applied prospectively to equity investments that exist as of the date of adoption of the guidance. The guidance is effective for the Company in the first quarter of 2018 and early adoption is permitted. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and period of adoption. Revenue Recognition In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers, which, when effective, will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principal of the standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The standard is effective for Aon in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. Two methods of transition are permitted upon adoption: full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing a comparable view across all periods presented. Under the modified retrospective method, prior periods would not be restated. Rather, revenue and other disclosures for pre-2018 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. The Company will adopt this standard in the first quarter of 2018 using a modified retrospective adoption approach. A preliminary assessment to determine the impacts of the new accounting standard has been performed. The Company is currently implementing accounting and operational processes and controls to ensure compliance with the new standard, but is still evaluating the quantitative impacts the standard will have on its financial statements. However, the more significant impacts of the new standard to the Company are anticipated to be as follows: The Company currently recognizes revenue either at a point in time or over a period of time based on the transfer of value to customers or as the remuneration becomes determinable. Under the new standard, the revenue related to certain brokerage activities recognized over a period of time will be recognized on the effective date of the associated policies when control of the policy transfers to the customer. As a result, revenue from these arrangements will be recognized in earlier periods under the new standard in comparison to the current guidance and will change the timing and amount of revenue recognized for annual and interim periods. This change is anticipated to result in a significant shift in interim revenue for Reinsurance Solutions and certain other brokerage services. The Company is currently assessing the timing and measurement of revenue recognition under the new standard for certain other services, including advisory, where limited impacts are anticipated. Additionally, the new standard provides guidance on accounting for certain revenue-related costs including when to capitalize costs associated with obtaining and fulfilling a contract. The majority of these costs are currently expensed as incurred under existing U.S. GAAP. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company plans to apply a practical expedient and recognize the costs of obtaining a contract as an expense when incurred. Assets recognized for the costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is generally expected to be less than one year. The Company is quantifying the nature and amount of costs that would qualify for capitalization and the amount of amortization that will be recognized in each period. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On February 9, 2017 , the Company entered into the Purchase Agreement with Tempo Acquisition, LLC to sell its benefits administration and business process outsourcing business to the Buyer, an entity formed and controlled by affiliates of The Blackstone Group L.P., and certain designated purchasers that are direct or indirect subsidiaries of the Buyer. On May 1, 2017, the Buyer purchased all of the outstanding equity interests of the Divested Business, plus certain related assets and liabilities, for a purchase price of $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and deferred consideration of up to $500 million . Cash proceeds after customary adjustments and before taxes due were $4.2 billion . Aon and the Buyer entered into certain transaction related agreements at the closing, including two commercial agreements, a transition services agreement, certain intellectual property license agreements, sub-leases and other customary agreements. Aon expects to continue to be a significant client of the Divested Business and the Divested Business has agreed to use Aon for its broking and other services for a specified period of time. In the nine months ended September 30, 2017 , the Company recorded an estimated gain on sale, net of taxes, of $803 million and a non-cash impairment charge to its tradenames associated with the Divested Business of $380 million as these assets were not sold to the Buyer. The impairment charge is included in Amortization and impairment of intangible assets on the Condensed Consolidated Statement of Income for the nine months ended September 30, 2017 . The Company has classified the results of the Divested Business as discontinued operations in the Company’s Condensed Consolidated Statements of Income for all periods presented. Additionally, the assets and liabilities of the Divested Business were retrospectively classified as discontinued operations in the Company’s Condensed Consolidated Statements of Financial Position upon triggering held for sale criteria in February 2017. These assets and liabilities were sold on May 1, 2017. The financial results of the Divested Business for the three and nine months ended September 30, 2017 and 2016 are presented as Income from discontinued operations on the Company’s Condensed Consolidated Statements of Income. The following table presents the financial results of the Divested Business (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Revenue Total revenue $ — $ 559 $ 698 $ 1,606 Expenses Total operating expenses 14 491 640 1,443 Operating income from discontinued operations (14 ) 68 58 163 Other income (1 ) (1 ) 10 — Income from discontinued operations before income taxes (15 ) 67 68 163 Income taxes (6 ) 25 14 61 Income from discontinued operations excluding gain, net of tax (9 ) 42 54 102 Gain on sale of discontinued operations, net of tax 5 — 803 — Income from discontinued operations, net of tax $ (4 ) $ 42 $ 857 $ 102 Upon triggering held for sale criteria in February 2017, Aon ceased depreciating and amortizing all long-lived assets included in discontinued operations. No depreciation or amortization expense was recognized during the three months ended September 30, 2017 . Included within Total operating expenses for the three months ended September 30, 2016 was $18 million of depreciation of fixed assets and $30 million of intangible asset amortization. Total operating expenses for the nine months ended September 30, 2017 and 2016 include, respectively, $8 million and $53 million of depreciation of fixed assets and $11 million and $90 million of intangible asset amortization. The following table presents the aggregate carrying amounts of the classes of assets and liabilities presented as discontinued operations within the Company’s Condensed Consolidated Statements of Financial Position (in millions): September 30, 2017 (1) December 31, ASSETS Cash and cash equivalents $ — $ 5 Receivables, net — 483 Fiduciary assets — 526 Goodwill — 1,337 Intangible assets, net — 333 Fixed assets, net — 215 Other assets — 295 TOTAL ASSETS $ — $ 3,194 LIABILITIES Accounts payable and accrued liabilities $ — $ 197 Fiduciary liabilities — 526 Other liabilities — 356 TOTAL LIABILITIES $ — $ 1,079 (1) All assets and liabilities associated with the Divested Business were sold on May 1, 2017. The Company’s Condensed Consolidated Statements of Cash Flows present the operating, investing, and financing cash flows of the Divested Business as discontinued operations. Aon uses a centralized approach to cash management and financing of its operations. Prior to the closing of the Transaction, portions of the Divested Business’s cash were transferred to Aon daily, and Aon would fund the Divested Business as needed. Cash and cash equivalents of discontinued operations at September 30, 2016 was $3 million . |
Cash and Cash Equivalents and S
Cash and Cash Equivalents and Short-term Investments | 9 Months Ended |
Sep. 30, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash and Cash Equivalents and Short-term Investments | Cash and Cash Equivalents and Short-term Investments Cash and cash equivalents include cash balances and all highly-liquid instruments with initial maturities of three months or less. Short-term investments consist of money market funds. The estimated fair value of cash and cash equivalents and short-term investments approximates their carrying values. At September 30, 2017 , Cash and cash equivalents and Short-term investments were $2,389 million compared to $716 million at December 31, 2016 , an increase of $1,673 million that was primarily related to the receipt of proceeds from the sale of the Divested Business. Of the total balances, $98 million and $82 million was restricted as to its use at September 30, 2017 and December 31, 2016 , respectively. Included within the September 30, 2017 and December 31, 2016 balances, respectively, were £42.7 million ( $57.5 million at September 30, 2017 exchange rates) and £43.3 million ( $53.2 million at December 31, 2016 exchange rates) of operating funds required to be held by the Company in the United Kingdom by the Financial Conduct Authority, a U.K.-based regulator, which were included in Short-term investments. |
Other Financial Data
Other Financial Data | 9 Months Ended |
Sep. 30, 2017 | |
Other Financial Data [Abstract] | |
Other Financial Data | Other Financial Data Condensed Consolidated Statements of Income Information Other Income (Expense) Other income (expense) consists of the following (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Foreign currency remeasurement gain (loss) $ (20 ) $ 3 $ (32 ) $ (14 ) Gain (loss) on disposal of business — — (2 ) 41 Equity earnings 2 4 11 7 Gain (loss) on financial instruments 16 3 6 (7 ) Other (3 ) — (3 ) — Total $ (5 ) $ 10 $ (20 ) $ 27 Condensed Consolidated Statements of Financial Position Information Allowance for Doubtful Accounts An analysis of the allowance for doubtful accounts is as follows (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Balance at beginning of period $ 59 $ 64 $ 56 $ 58 Provision charged to Other general expenses 5 4 16 15 Accounts written off, net of recoveries — (5 ) (10 ) (11 ) Foreign currency translation (5 ) — (3 ) 1 Balance at end of period $ 59 $ 63 $ 59 $ 63 Other Current Assets The components of Other current assets are as follows (in millions): As of September 30, 2017 December 31, 2016 Taxes receivable $ 208 $ 100 Prepaid expenses 158 102 Receivables from the Divested Business (1) 124 — Other 28 45 Total $ 518 $ 247 (1) Refer to Note 3 “Discontinued Operations” for additional information. Other Non-Current Assets The components of Other non-current assets are as follows (in millions): As of September 30, 2017 December 31, 2016 Investments $ 44 $ 119 Taxes receivable 88 82 Other 166 159 Total $ 298 $ 360 Other Current Liabilities The components of Other current liabilities are as follows (in millions): As of September 30, 2017 December 31, 2016 Deferred revenue $ 331 $ 199 Taxes payable (1) 537 77 Other 421 380 Total $ 1,289 $ 656 (1) Includes accrued taxes payable related to the gain on sale of the Divested Business. Other Non-Current Liabilities The components of Other non-current liabilities are as follows (in millions): As of September 30, 2017 December 31, 2016 Taxes payable $ 333 $ 288 Deferred revenue 45 49 Leases 145 136 Compensation and benefits 61 56 Other 262 190 Total $ 846 $ 719 |
Acquisitions and Dispositions o
Acquisitions and Dispositions of Businesses | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions of Businesses | Acquisitions and Dispositions of Businesses Acquisitions The Company completed eight acquisitions during the nine months ended September 30, 2017 and eight acquisitions during the twelve months ended December 31, 2016 . The following table includes the fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions): For the nine months ended September 30, 2017 Cash $ 164 Deferred and contingent consideration 32 Aggregate consideration transferred $ 196 Assets acquired: Cash and cash equivalents $ 7 Receivables, net 11 Goodwill 121 Intangible assets, net 90 Fixed assets, net 1 Other assets 10 Total assets acquired 240 Liabilities assumed: Current liabilities 18 Other non-current liabilities 26 Total liabilities assumed 44 Net assets acquired $ 196 The results of operations of these acquisitions are included in the Condensed Consolidated Financial Statements as of the respective acquisition dates. The Company’s results of operations would not have been materially different if these acquisitions had been reported from the beginning of the period in which they were acquired. 2017 Acquisitions On August 31, 2017, the Company completed the transaction to acquire Mark Kelly Insurance and Financial Services PTY LTD, an Australia-based broker servicing the insurance needs of commercial clients in and around the Townsville regional center. On August 28, 2017, the Company completed the transaction to acquire a certain portfolio in the Charlotte office of The Hays Group, Inc. d/b/a Hays Companies. On July 27, 2017, the Company completed the transaction to acquire Grupo Innovac Sociedad de Correduría de Seguros, S.A, an insurance broker based in Valencia, Spain. On July 3, 2017, the Company completed the transaction to acquire PWZ AG, an independent insurance broker based in Zurich, Switzerland. On May 31, 2017, the Company completed the transaction to acquire SchneiderGolling IFFOXX Assekuranzmakler AG and SchneiderGolling Industrie Assekuranzmaklergesellschaft mbH from SchneiderGolling Gruppe, a property and casualty broker based in Southern Germany. On May 2, 2017, the Company completed the transaction to acquire cut-e Assessment Global Holdings Limited, a high-volume online psychometric assessments provider based in Ireland. On March 3, 2017, the Company completed the transaction to acquire Finaccord Limited, a market research, publishing and consulting company based in the United Kingdom. On January 19, 2017, the Company completed the transaction to acquire VERO Management AG, an insurance broker and risk advisor based in Austria. 2016 Acquisitions On December 26, 2016, the Company completed the transaction to acquire Admix, a leading health and benefits brokerage and solutions firm based in Brazil. On November 11, 2016 the Company completed the transaction to acquire CoCubes, a leading hiring assessment company based in India. On October 31, 2016, the Company completed the transaction to acquire Stroz, Friedberg, Inc., a leading global cyber risk management firm based in New York City, with offices across the U.S. and in London, Zurich, Dubai and Hong Kong. On August 19, 2016, the Company completed the transaction to acquire Cammack Health LLC, a leading health and benefits consulting firm that serves large health care organizations in the Eastern region of the U.S., including health plans, health systems and employers. On June 1, 2016, the Company completed the transaction to acquire Univers Workplace Solutions, a leading elective benefit enrollment and communication services firm based in New Jersey. On April 11, 2016, the Company completed the transaction to acquire Nexus Insurance Brokers Limited and Bayfair Insurance Centre Limited, insurance brokerage firms located in New Zealand. On February 1, 2016, the Company completed the transaction to acquire Modern Survey, an employee survey and talent analytics solutions provider based in Minneapolis. On January 1, 2016, the Company completed the transaction to acquire Globe Events Management, an insurance, retirement, and investment consulting business company based in Australia. Dispositions The Company completed no dispositions during the three months ended September 30, 2017 and four dispositions during the nine months ended September 30, 2017 , excluding the sale of the Divested Business. Refer to Note 3 “Discontinued Operations” for further information. The Company completed no dispositions during the three months ended September 30, 2016 and four dispositions during the nine months ended September 30, 2016 . There were no gains recognized on the disposition of businesses for the three months ended September 30, 2017 and 2016 , excluding the sale of the Divested Business. Total pretax losses recognized, net of gains, were $2 million for the nine months ended September 30, 2017 , and total pretax gains recognized, net of losses, were $41 million for the nine months ended September 30, 2016 . Gains and losses recognized as a result of a disposition are included in Other income (expense) in the Condensed Consolidated Statements of Income. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In 2017, Aon initiated a global restructuring plan (the “Restructuring Plan”) in connection with the sale of the Divested Business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity. The Company expects these restructuring activities and related expenses to affect continuing operations through 2019, including an estimated 2,400 to 2,850 role eliminations. The Restructuring Plan is expected to result in cumulative costs of approximately $750 million through the end of the plan, consisting of approximately $303 million in employee termination costs, $146 million in technology rationalization costs, $80 million in lease consolidation costs, $40 million in asset impairments, and $181 million in other costs, including certain separation costs associated with the sale of the Divested Business. Included in the estimated $750 million are $50 million of non-cash charges related to asset impairments and lease consolidations. From the inception of the Restructuring Plan through September 30, 2017 , the Company has eliminated 2,125 positions and incurred total expenses of $401 million for restructuring and related separation costs. These charges are included in Compensation and benefits, Information technology, Premises, Depreciation of fixed assets, and Other general expenses in the accompanying Condensed Consolidated Statements of Income. The following table summarizes restructuring and separation costs by type that have been incurred through September 30, 2017 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs may be revised in future periods as these assumptions are updated: Three months ended September 30, 2017 Nine months ended September 30, 2017 Estimated Remaining Costs Estimated Total Cost (1) Workforce reduction $ 52 $ 257 $ 46 $ 303 Technology rationalization (2) 12 22 124 146 Lease consolidation (2) 4 8 72 80 Asset impairments 2 26 14 40 Other costs associated with restructuring and separation (2) (3) 32 88 93 181 Total restructuring and related expenses $ 102 $ 401 $ 349 $ 750 (1) Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan. Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives. (2) Contract termination costs included within Technology rationalization for the three and nine months ended September 30, 2017 were $1 million . Contract termination costs included within Lease consolidations for the three and nine months ended September 30, 2017 were $3 million and $8 million , respectively. Contract termination costs included within Other costs associated with restructuring and separation were $1 million for the three and nine months ended September 30, 2017 . Total estimated contract termination costs to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, are $10 million , $80 million , and $10 million . (3) Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs, and consulting and legal fees. These costs are generally recognized when incurred. The changes in the Company’s liabilities for the Restructuring Plan as of September 30, 2017 are as follows (in millions): Restructuring Plan Balance as of December 31, 2016 $ — Expensed 369 Cash payments (199 ) Foreign currency translation and other 17 Balance as of September 30, 2017 $ 187 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the net carrying amount of goodwill for the nine months ended September 30, 2017 are as follows (in millions): Balance as of December 31, 2016 $ 7,410 Goodwill related to current year acquisitions 121 Goodwill related to disposals (1 ) Goodwill related to prior year acquisitions (6 ) Foreign currency translation 364 Balance as of September 30, 2017 $ 7,888 Other intangible assets by asset class are as follows (in millions): September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization and Impairment Net Carrying Amount Gross Carrying Amount Accumulated Net Carrying Amount Customer related and contract based $ 2,104 $ 1,380 $ 724 $ 2,023 $ 1,198 $ 825 Tradenames (1) 1,041 478 563 1,027 7 1,020 Technology and other (1) 384 330 54 347 302 45 Total $ 3,529 $ 2,188 $ 1,341 $ 3,397 $ 1,507 $ 1,890 (1) Prior to May 1, 2017, finite lived tradenames were classified within Technology and other. As of December 31, 2016, $29 million of gross carrying amount and $7 million of accumulated amortization related to finite-lived tradenames was reclassified from Technology and other to Tradenames. In the second quarter of 2017 and in connection with the completion of the sale of the Divested Business, the Company recognized a non-cash impairment charge to the associated tradenames of $380 million . The fair value of the tradenames was determined using the Relief from Royalty Method. This impairment was included in Amortization and impairment of intangible assets on the Condensed Consolidated Statement of Income. Refer to Note 3 “Discontinued Operations” for further information. Additionally, effective May 1, 2017 and consistent with operating as one segment, the Company implemented a three -year strategy to transition to a unified Aon brand. As a result, Aon commenced amortization of all indefinite lived tradenames and prospectively accelerated amortization of its finite-lived tradenames over the three -year period. The change in estimated useful life resulted in additional amortization expense, net of tax, to continuing operations of $34 million , or $0.13 per share, and $56 million , or $0.21 per share, in the three and nine months ended September 30, 2017 , respectively. Amortization expense and impairment charges from finite lived intangible assets was $101 million and $604 million for the three and nine months ended September 30, 2017 , respectively. Amortization expense from finite lived intangible assets was $42 million and $117 million for the three and nine months ended September 30, 2016 , respectively. The estimated future amortization for finite lived intangible assets as of September 30, 2017 is as follows (in millions): Remainder of 2017 $ 117 2018 376 2019 357 2020 196 2021 89 Thereafter 206 Total $ 1,341 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Notes During the first quarter of 2017 , the CAD 375 million ( $304 million at September 30, 2017 exchange rates) 4.76% Senior Notes due March 2018 were classified as Short-term debt and current portion of long-term debt in the Condensed Consolidated Statements of Financial Position as the date of maturity is less than one year. Revolving Credit Facilities As of September 30, 2017 , Aon had one primary committed credit facility outstanding: its $900 million multi-currency U.S. credit facility expiring in February 2021 (the “2021 Facility”). On October 19, 2017, Aon entered into a $400 million multi-currency U.S. credit facility expiring in October 2022 (the “2022 Facility”). This facility replaced the Company’s previous $400 million U.S. credit facility that expired in March 2017 . The 2021 Facility includes customary representations, warranties and covenants, including financial covenants that require Aon to maintain specified ratios of adjusted consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. At September 30, 2017 , Aon did not have borrowings under the 2021 Facility, and was in compliance with all covenants contained therein during the nine months ended September 30, 2017 . Commercial Paper Aon Corporation, a wholly-owned subsidiary of Aon plc, has established a U.S. commercial paper program and a European multi-currency commercial paper program (collectively the “CP Programs”). Commercial paper may be issued in an aggregate principal amount of up to $1.3 billion under the CP Programs, allocated between the two programs as determined by management, not to exceed the amount of committed credit, which was $900 million at September 30, 2017. The U.S. commercial paper program is fully and unconditionally guaranteed by Aon plc and the European commercial paper program is fully and unconditionally guaranteed by Aon Corporation. Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Condensed Consolidated Statements of Financial Position, is as follows (in millions): As of September 30, 2017 December 31, 2016 Commercial paper outstanding $ — $ 329 The weighted average commercial paper outstanding and its related interest rates are as follows: Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Weighted average commercial paper outstanding $ — $ 271 $ 227 $ 251 Weighted average interest rate of commercial paper outstanding — % 0.02 % 0.18 % 0.27 % |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate on net income from continuing operations was 2.0% and (49.8)% for the three and nine months ended September 30, 2017 , respectively. The effective tax rate on net income from continuing operations was 8.1% and 12.8% for the three and nine months ended September 30, 2016 , respectively. For the three months ended September 30, 2017 , the Company reported tax expense of $4 million on pretax income of $200 million , which resulted in an effective tax rate of 2.0% , primarily driven by the jurisdictional distribution of income including the estimated impact of the Restructuring Program and the accelerated amortization of tradenames. For the nine months ended September 30, 2017 , the Company reported a tax benefit of $139 million on pretax income of $279 million , which resulted in an effective tax rate of (49.8)% . The primary components of the year to date tax amounts were the non-cash tax benefit from the tradename impairment associated with the Divested Business and the impact of share-based payments from adoption of the new share-based compensation guidance. Refer to Note 2 “Accounting Principles and Practices” for additional details. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Ordinary Shares Aon has a share repurchase program authorized by the Company’s Board of Directors (the “Repurchase Program”) . The Repurchase Program was established in April 2012 with up to $5.0 billion in authorized repurchases, and was increased by $5.0 billion in authorized repurchases in each of November 2014 and February 2017 for a total of $15.0 billion in repurchase authorizations. Under the Repurchase Program, Class A Ordinary Shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital. In the three months ended September 30, 2017 , the Company repurchased 5.4 million shares at an average price per share of $139.61 , for a total cost of approximately $749 million and recorded an additional $3.8 million of costs associated with the repurchases to retained earnings. During the nine months ended September 30, 2017 , the Company repurchased 14.5 million shares at an average price per share of $131.58 , for a total cost of approximately $1.9 billion and recorded an additional $9.5 million of costs associated with the repurchases to retained earnings. Included in the 5.4 million shares and 14.5 million shares repurchased during the three and nine months ended September 30, 2017 were 165 thousand shares that did not settle until October 2017. These shares were settled at an average price per share of $146.52 and total cost of $24.2 million . In the three months ended September 30, 2016 , the Company repurchased 2.7 million shares at an average price per share of $110.26 for a total cost of approximately $301 million . During the nine months ended September 30, 2016 , the Company repurchased 10.4 million shares at an average price per share of $101.16 , for a total cost of approximately $1.1 billion . At September 30, 2017 , the remaining authorized amount for share repurchase under the Repurchase Program was $5.9 billion . Under the Repurchase Program, the Company has repurchased a total of 104.7 million shares for an aggregate cost of approximately $9.1 billion . Net Income Per Share Weighted average shares outstanding are as follows (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Basic weighted-average ordinary shares outstanding 255.6 267.5 260.9 269.1 Dilutive effect of potentially issuable shares 1.7 2.1 2.0 1.9 Diluted weighted-average ordinary shares outstanding 257.3 269.6 262.9 271.0 Potentially issuable shares are not included in the computation of diluted net income per share if their inclusion would be antidilutive. There were no shares excluded from the calculation for the three and nine months ended September 30, 2017 and 2016 . Accumulated Other Comprehensive Loss Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions): Change in Fair Value of Financial Instruments (1) Foreign Currency Translation Adjustments Post-Retirement Benefit Obligation (2) Total Balance at December 31, 2016 $ (37 ) $ (1,264 ) $ (2,611 ) $ (3,912 ) Other comprehensive income (loss) before reclassifications, net 13 442 — 455 Amounts reclassified from accumulated other comprehensive loss: Amounts reclassified from accumulated other comprehensive income (loss) (2 ) (11 ) 80 67 Tax benefit (expense) 2 — (24 ) (22 ) Amounts reclassified from accumulated other comprehensive income (loss), net — (11 ) 56 45 Net current period other comprehensive income (loss) 13 431 56 500 Balance at September 30, 2017 $ (24 ) $ (833 ) $ (2,555 ) $ (3,412 ) (1) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense) , Other general expenses , and Compensation and benefits . See Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivative and hedging activity. (2) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Compensation and benefits. |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits The following table provides the components of the net periodic cost (benefit) recognized in the Condensed Consolidated Statements of Income in Compensation and benefits for Aon’s material U.K., U.S., and other significant international pension plans located in the Netherlands and Canada (in millions): Three months ended September 30 U.K. U.S. Other 2017 2016 2017 2016 2017 2016 Service cost $ — $ — $ — $ — $ — $ — Interest cost 31 37 24 28 7 7 Expected return on plan assets, net of administration expenses (50 ) (58 ) (34 ) (39 ) (13 ) (12 ) Amortization of prior-service cost — — — 1 — — Amortization of net actuarial loss 8 7 13 12 3 3 Net periodic cost (benefit) $ (11 ) $ (14 ) $ 3 $ 2 $ (3 ) $ (2 ) Loss on pension settlement — — — — — — Total net periodic cost (benefit) $ (11 ) $ (14 ) $ 3 $ 2 $ (3 ) $ (2 ) Nine months ended September 30 U.K. U.S. Other 2017 2016 2017 2016 2017 2016 Service cost $ — $ — $ — $ — $ — $ — Interest cost 91 123 72 83 19 21 Expected return on plan assets, net of administration expenses (147 ) (187 ) (104 ) (117 ) (35 ) (36 ) Amortization of prior-service cost — 1 1 2 — — Amortization of net actuarial loss 23 24 38 37 9 8 Net periodic cost (benefit) $ (33 ) $ (39 ) $ 7 $ 5 $ (7 ) $ (7 ) Loss on pension settlement — 61 — — — — Total net periodic cost (benefit) $ (33 ) $ 22 $ 7 $ 5 $ (7 ) $ (7 ) In March 2017, the Company approved a plan to offer a voluntary one-time lump sum payment option to certain eligible employees of the Company’s U.K. pension plans that, if accepted, would settle the Company’s pension obligation to them. A non-cash settlement charge is expected in the fourth quarter of 2017. Contributions The Company expects to make cash contributions of approximately $80 million , $51 million , and $18 million , based on exchange rates as of December 31, 2016 , to its significant U.K., U.S., and other significant international pension plans, respectively, during 2017. During the three months ended September 30, 2017 , cash contributions of $22 million , $5 million , and $3 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the nine months ended September 30, 2017 , cash contributions of $64 million , $31 million , and $14 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the three and nine months ended September 30, 2017 , Aon made a non-cash contribution of approximately $80 million to its U.S. pension plan. During the three months ended September 30, 2016 , cash contributions of $19 million , $5 million , and $4 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the nine months ended September 30, 2016 , cash contributions of $53 million , $24 million , and $14 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Restricted share units (“RSUs”) $ 42 $ 40 $ 143 $ 136 Performance share awards (“PSAs”) 22 24 63 67 Employee share purchase plans 3 2 8 7 Total share-based compensation expense $ 67 $ 66 $ 214 $ 210 Restricted Share Units RSUs generally vest between three and five years. The fair value of RSUs is based upon the market value of Aon ordinary shares at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all non-vested awards. Compensation expense associated with RSUs is recognized on a straight-line basis over the requisite service period. Dividend equivalents are paid on certain RSUs, based on the initial grant amount. The following table summarizes the status of the Company’s RSUs (shares in thousands): 2017 2016 Shares Fair Value (1) Shares Fair Value (1) Non-vested at December 31 6,195 $ 89 7,167 $ 77 Granted 1,549 122 2,110 101 Vested (2,294 ) 82 (2,729 ) 70 Forfeited (590 ) 92 (333 ) 81 Non-vested at September 30 4,860 $ 102 6,215 $ 88 (1) Represents per share weighted average fair value of award at date of grant. Unamortized deferred compensation expense amounted to $367 million as of September 30, 2017 , with a remaining weighted-average amortization period of approximately 2.1 years . Performance Share Awards The vesting of PSAs is contingent upon meeting a cumulative level of earnings per share performance over a three -year period. The actual issue of shares may range from 0 - 200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of PSAs is based upon the market price of Aon ordinary shares at the date of grant. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits expense, if necessary. Dividend equivalents are not paid on PSAs. Information as of September 30, 2017 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the nine months ended September 30, 2017 and the years ended December 31, 2016 and 2015 , respectively, is as follows (shares in thousands and dollars in millions, except fair value): September 30, December 31, December 31, Target PSAs granted during period 548 752 967 Weighted average fair value per share at date of grant $ 114 $ 100 $ 96 Number of shares that would be issued based on current performance levels 544 663 1,362 Unamortized expense, based on current performance levels $ 51 $ 27 $ 11 |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers denominated in a currency that differs from its functional currency, or enters into other transactions that are denominated in a currency other than its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income. The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 30 -day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income. The notional and fair values of derivative instruments are as follows (in millions): Notional Amount Derivative Assets (1) Derivative Liabilities (2) September 30, December 31, September 30, December 31, September 30, December 31, Foreign exchange contracts Accounted for as hedges $ 711 $ 758 $ 31 $ 14 $ 3 $ 13 Not accounted for as hedges (3) 245 189 — 1 2 1 Total $ 956 $ 947 $ 31 $ 15 $ 5 $ 14 (1) Included within Other current assets ( $6 million at September 30, 2017 and $6 million at December 31, 2016 ) or Other non-current assets ( $25 million at September 30, 2017 and $9 million at December 31, 2016 ). (2) Included within Other current liabilities ( $3 million at September 30, 2017 and $7 million at December 31, 2016 ) or Other non-current liabilities ( $2 million at September 30, 2017 and $7 million at December 31, 2016 ). (3) These contracts typically are for 30 day durations and are executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date. Offsetting of derivatives assets are as follows (in millions): Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position (1) Derivatives accounted for as hedges September 30, December 31, September 30, December 31, September 30, December 31, Foreign exchange contracts $ 31 $ 14 $ — $ (1 ) $ 31 $ 13 (1) Included within Other current assets ( $6 million at September 30, 2017 and $4 million at December 31, 2016 ) or Other non-current assets ( $25 million at September 30, 2017 and $9 million at December 31, 2016 ). Offsetting of derivative liabilities are as follows (in millions): Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position (1) Derivatives accounted for as hedges September 30, December 31, September 30, December 31, September 30, December 31, Foreign exchange contracts $ 3 $ 13 $ — $ (1 ) $ 3 $ 12 (1) Included within Other current liabilities ( $2 million at September 30, 2017 and $5 million at December 31, 2016 ) or Other non-current liabilities ( $1 million at September 30, 2017 and $7 million at December 31, 2016 ). The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017 and 2016 are as follows (in millions): Cash Flow Hedge - Foreign Exchange Contracts Location of Eventual Reclassification from Accumulated Other Comprehensive Loss Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss Three months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ — $ 3 $ — $ 8 $ 11 2016 10 (4 ) — (7 ) (1 ) Cash Flow Hedge - Foreign Exchange Contracts Location of Eventual Reclassification from Accumulated Other Comprehensive Loss Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss Nine months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ 9 $ 5 $ — $ 4 $ 18 2016 8 (9 ) — (18 ) (19 ) Cash Flow Hedge - Foreign Exchange Contracts Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Three months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ 1 $ (1 ) $ — $ (3 ) $ (3 ) 2016 1 (1 ) — (2 ) (2 ) Cash Flow Hedge - Foreign Exchange Contracts Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Nine months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ 14 $ (3 ) $ (1 ) $ (7 ) $ 3 2016 2 (2 ) (1 ) (5 ) (6 ) The Company estimates that approximately $11 million of pretax losses currently included within Accumulated other comprehensive loss will be reclassified in to earnings in the next twelve months. The amount of gain (loss) recognized in income on the ineffective portion of derivatives for the three and nine months ended September 30, 2017 and 2016 was immaterial. During the three and nine months ended September 30, 2017 , the Company recorded a gain of $8 million and $9 million , respectively, in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. During the three and nine months ended September 30, 2016 , the Company recorded a gain of $2 million and $1 million , respectively, in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. Net Investments in Foreign Operations Risk Management The Company uses non-derivative financial instruments to protect the value of its investments in a number of foreign subsidiaries. In 2016, the Company designated a portion of its Euro-denominated commercial paper issuances as a non-derivative hedge of the foreign currency exposure of a net investment in its European operations. The change in fair value of the designated portion of the Euro-denominated commercial paper due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustment, a component of Accumulated other comprehensive income (loss), to the extent it is effective as a hedge. The foreign currency translation adjustment of the hedged net investments that is also recorded in Accumulated other comprehensive income (loss). Ineffective portions of net investment hedges, if any, are reclassified from Accumulated other comprehensive income (loss) into earnings during the period of change. As of September 30, 2017 , the Company had no outstanding Euro-denominated commercial paper designated as a hedge of the foreign currency exposure of its net investment in its European operations. As of September 30, 2017 , the unrealized gain recognized in Accumulated other comprehensive income (loss) related to the net investment non derivative hedging instrument was immaterial. The Company did not reclassify any deferred gains or losses related to net investment hedges from Accumulated other comprehensive income (loss) to earnings during the three and nine months ended September 30, 2017 . In addition, the Company did not incur any ineffectiveness related to net investment hedges during the three and nine months ended September 30, 2017 . |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Accounting standards establish a three tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows: • Level 1 — observable inputs such as quoted prices for identical assets in active markets; • Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and • Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions. The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments: Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. Equity investments consist of domestic and international equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities. Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Consolidated Financial Statements. Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities. Debt is carried at outstanding principal balance, less any unamortized discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements. The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016 (in millions): Fair Value Measurements Using Balance at September 30, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 3,091 $ 3,091 $ — $ — Other investments: Government bonds 1 — 1 — Equity investments 11 7 4 — Derivatives: (2) Foreign exchange contracts 31 — 31 — Liabilities: Derivatives: (2) Foreign exchange contracts 5 — 5 — (1) Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. Fair Value Measurements Using Balance at December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 1,371 $ 1,371 $ — $ — Other investments: Government bonds 1 — 1 — Equity investments 9 6 3 — Derivatives: (2) Foreign exchange contracts 15 — 15 — Liabilities: Derivatives: (2) Foreign exchange contracts 14 — 14 — (1) Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. There were no transfers of assets or liabilities between fair value hierarchy levels in either the three and nine months ended September 30, 2017 or 2016 . The Company recognized no realized or unrealized gains or losses in the Condensed Consolidated Statements of Income during either the three and nine months ended September 30, 2017 or 2016 , related to assets and liabilities measured at fair value using unobservable inputs. The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ (in millions): September 30, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Current portion of long-term debt (1) $ 305 $ 309 $ — $ — Long-term debt 5,662 6,227 5,869 6,264 (1) Excludes commercial paper program. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits and proceedings that arise in the ordinary course of business, which frequently include errors and omissions (“E&O”) claims. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble or extraordinary damages. While Aon maintains meaningful E&O insurance and other insurance programs to provide protection against certain losses that arise in such matters, Aon has exhausted or materially depleted its coverage under some of the policies that protect the Company and, consequently, is self-insured or materially self-insured for some claims. Accruals for these exposures, and related insurance receivables, when applicable, are included in the Consolidated Statements of Financial Position and have been recognized in Other general expenses in the Consolidated Statements of Income to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Matters that are not probable and reasonably estimable are not accrued for in the financial statements. The Company has included in the current matters described below certain matters in which (1) loss is probable, (2) loss is reasonably possible, that is, more than remote but not probable, or (3) there exists the reasonable possibility of loss greater than the accrued amount. In addition, the Company may from time to time disclose matters for which the probability of loss could be remote but the claim amounts associated with such matters are potentially significant. The reasonably possible range of loss for the matters described below for which loss is estimable, in excess of amounts that are deemed probable and estimable and therefore already accrued, is estimated to be between $0 and $0.3 billion , exclusive of any insurance coverage. These estimates are based on currently available information. As available information changes, the matters for which Aon is able to estimate may change, and the estimates themselves may change. In addition, many estimates involve significant judgment and uncertainty. For example, at the time of making an estimate, Aon may only have limited information about the facts underlying the claim, and predictions and assumptions about future court rulings and outcomes may prove to be inaccurate. Although management at present believes that the ultimate outcome of all matters described below, individually or in the aggregate, will not have a material adverse effect on the consolidated financial position of Aon, legal proceedings are subject to inherent uncertainties and unfavorable rulings or other events. Unfavorable resolutions could include substantial monetary or punitive damages imposed on Aon or its subsidiaries. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected. Current Matters A retail insurance brokerage subsidiary of Aon was sued on September 14, 2010 in the Chancery Court for Davidson County, Tennessee Twentieth Judicial District, at Nashville by a client, Opry Mills Mall Limited Partnership (“Opry Mills”) that sustained flood damage to its property in May 2010. The lawsuit seeks $200 million in coverage from numerous insurers with whom this Aon subsidiary placed the client’s property insurance coverage. The insurers contend that only $50 million in coverage (which has already been paid) is available for the loss because the flood event occurred on property in a high hazard flood zone. Opry Mills is seeking full coverage from the insurers for the loss and has sued this Aon subsidiary in the alternative for the same $150 million difference on various theories of professional liability if the court determines there is not full coverage. In addition, Opry Mills seeks prejudgment interest, attorneys’ fees and enhanced damages which could substantially increase Aon’s exposure. In March 2015, the trial court granted partial summary judgment in favor of plaintiffs and against the insurers, holding generally that the plaintiffs are entitled to $200 million in coverage under the language of the policies. In August 2015, a jury returned a verdict in favor of Opry Mills and against the insurers in the amount of $204 million . The insurers have appealed both of these trial court decisions. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims. A pensions consulting and administration subsidiary of Aon provided advisory services to the Trustees of the Gleeds pension fund in the United Kingdom and, on occasion, to the relevant employer of the fund. In April 2014, the High Court, Chancery Division, London found that certain governing documents of the fund that sought to alter the fund’s benefit structure and that had been drafted by Aon were procedurally defective and therefore invalid. No lawsuit naming Aon as a party was filed, although a tolling agreement was entered. The High Court decision says that the additional liabilities in the pension fund resulting from the alleged defect in governing documents amount to approximately £45 million ( $61 million at September 30, 2017 exchange rates). In December 2014, the Court of Appeal granted the employer leave to appeal the High Court decision. At a hearing in October 2016, the Court of Appeal approved a settlement of the pending litigation. On October 31, 2016, the fund’s trustees and employer sued Aon in the High Court, Chancery Division, London, alleging negligence and breach of duty in relation to the governing documents. The proceedings were served on Aon on December 20, 2016. The claimants seek damages of approximately £70 million ( $94 million at September 30, 2017 exchange rates). Aon believes that it has meritorious defenses and intends to vigorously defend itself against this claim. On June 29, 2015, Lyttelton Port Company Limited (“LPC”) sued Aon New Zealand in the Christchurch Registry of the High Court of New Zealand. LPC alleges, among other things, that Aon was negligent and in breach of contract in arranging LPC’s property insurance program for the period covering June 30, 2010, to June 30, 2011. LPC contends that acts and omissions by Aon caused LPC to recover less than it otherwise would have from insurers for losses suffered in the 2010 and 2011 Canterbury earthquakes. LPC claims damages of approximately NZD 184 million ( $133 million at September 30, 2017 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. On October 3, 2017, Christchurch City Council (“CCC”) invoked arbitration to pursue a claim that it asserts against Aon New Zealand. Aon provided insurance broking services to CCC in relation to CCC’s 2010-2011 material damage and business interruption program. In December 2015, CCC settled its property and business interruption claim for its losses arising from the 2010-2011 Canterbury earthquakes against the underwriter of its material damage and business interruption program and the reinsurers of that underwriter. CCC contends that acts and omissions by Aon caused CCC to recover less in that settlement than it otherwise would have. CCC claims damages of approximately NZD 528 million ( $381 million at September 30, 2017 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. In April 2017, the Financial Conduct Authority (the “FCA”) announced an investigation relating to suspected competition law breaches in the aviation and aerospace broking industry, which, for Aon in 2016, represented less than $100 million in global revenue. The European Commission has now assumed jurisdiction over the investigation in place of the FCA. Other antitrust agencies outside the European Union are also conducting formal or informal investigations regarding these matters. Aon intends to work diligently with all antitrust agencies concerned to ensure they can carry out their work as efficiently as possible. At this time, in light of the uncertainties and many variables involved, we cannot estimate the ultimate impact on our company from these investigations or any related private litigation, nor any damages, penalties, or fines related to them. There can be no assurance that the ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity. Aon UK Limited, an indirect wholly-owned subsidiary of the Company, is presently engaged in several internal regulatory reviews and ongoing interactions with the FCA concerning Aon UK Limited’s systems and controls. These interactions may result in additional charges above amounts accrued for to date in connection with these reviews. Settled/Closed Matters On June 1, 2007, the International Road Transport Union (“IRU”) sued Aon in the Geneva Tribunal of First Instance in Switzerland. IRU alleges, among other things, that, between 1995 and 2004, a business acquired by Aon and, later, an Aon subsidiary (1) accepted commissions for certain insurance placements that violated a fee agreement entered between the parties and (2) negligently failed to ask certain insurance carriers to contribute to the IRU’s risk management costs. IRU sought damages of approximately CHF 46 million ( $47 million at June 30, 2017 exchange rates) and $3 million , plus legal fees and interest of approximately $30 million . On December 2, 2014, the Geneva Tribunal of First Instance entered a judgment that accepted some, and rejected other, of IRU’s claims. The judgment awarded IRU CHF 16.8 million ( $17 million at June 30, 2017 exchange rates) and $3.1 million , plus interest and adverse costs. The entire amount of the judgment, including interest through December 31, 2014, totaled CHF 27.9 million ( $28 million at December 31, 2014 exchange rates) and $5 million . On January 26, 2015, in return for IRU agreeing not to appeal the bulk of its dismissed claims, the Aon subsidiary agreed not to appeal a part of the judgment and to pay IRU CHF 12.8 million ( $14 million at January 31, 2015 exchange rates) and $4.7 million without Aon admitting liability. The Aon subsidiary appealed those aspects of the judgment it retained the right to appeal. IRU did not appeal. After the Geneva Appellate Court affirmed the judgment of the Geneva Tribunal of First Instance, the Aon subsidiary filed an appeal with the Swiss Federal Tribunal. By judgment issued June 16, 2017, the Swiss Federal Tribunal affirmed in part and reversed in part the appellate judgment and remanded the case to the appellate court. IRU and the Aon subsidiary agreed that the Aon subsidiary would pay IRU CHF 15.0 million ( $15 million at June 30, 2017 exchange rates) and $344,000 . As a result of this agreement, the legal proceedings between IRU and the Aon subsidiary have been discontinued. Guarantees and Indemnifications Redomestication In connection with the redomicile of Aon’s headquarters (the “Redomestication”), the Company on April 2, 2012 entered into various agreements pursuant to which it agreed to guarantee the obligations of its subsidiaries arising under issued and outstanding debt securities. Those agreements included the (1) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (amending and restating the Indenture, dated as of September 10, 2010, between Aon Corporation and the Trustee), (2) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of December 16, 2002, between Aon Corporation and the Trustee), (3) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of January 13, 1997, as supplemented by the First Supplemental Indenture, dated as of January 13, 1997), and (4) First Supplemental Indenture, dated as of April 2, 2012, among Aon Finance N.S. 1, ULC, as issuer, Aon Corporation, as guarantor, Aon plc, as guarantor, and Computershare Trust Company of Canada, as trustee. The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable are included in the Company’s Condensed Consolidated Financial Statements, and are recorded at fair value. The Company expects that, as prudent business interests dictate, additional guarantees and indemnifications may be issued from time to time. Sale of the Divested Business In connection with the sale of the Divested Business, the Company guaranteed future operating lease commitments related to certain facilities assumed by the Buyer. The Company is obligated to perform under the guarantees if the Divested Business defaults on such leases at any time during the remainder of the lease agreements, which expire on various dates through 2024. As of September 30, 2017 , the undiscounted maximum potential future payments under the lease guarantee is $104 million , with an estimated fair value of $25 million . No cash payments were made in connection to the lease commitments during the three or nine months ended September 30, 2017 . Additionally, the Company is subject to performance guarantee requirements under certain client arrangements that were assumed by the Buyer. Should the Divested Business fail to perform as required by the terms of the arrangements, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023. As of September 30, 2017 , the undiscounted maximum potential future payments under the performance guarantees were $395 million , with an estimated fair value of $4 million . No cash payments were made in connection to the performance guarantees during the three or nine months ended September 30, 2017 . Letters of Credit Aon has entered into a number of arrangements whereby the Company’s performance on certain obligations is guaranteed by a third party through the issuance of letters of credit (“LOCs”). The Company had total LOCs outstanding of approximately $94 million at September 30, 2017 , compared to $90 million at December 31, 2016 . These letters of credit cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries. Premium Payments The Company has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies. The maximum exposure with respect to such contractual contingent guarantees was approximately $76 million at September 30, 2017 compared to $95 million at December 31, 2016 . |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Beginning in the first quarter of 2017 and following the Transaction described in Note 3 “Discontinued Operations,” the Company began leading a set of initiatives designed to strengthen Aon and unite the firm with one portfolio of capability enabled by proprietary data and analytics and one operating model to deliver additional insight, connectivity and efficiency. These initiatives reinforce Aon’s return on invested capital (“ROIC”) decision-making process and emphasis on free cash flow. The Company is now operating as one segment that includes all of Aon’s continuing operations, which as a global professional services firm provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines which make up its principal products and services. The CODM assesses the performance of the Company and allocates resources based on one company: Aon United. The Company’s reportable operating segment has been determined using a management approach, which is consistent with the basis and manner in which Aon’s CODM uses financial information for the purposes of allocating resources and evaluating performance. The CODM assesses performance and allocates resources based on total Aon results against its key four metrics, including organic revenue growth, expense discipline, and collaborative behaviors that maximize value for Aon and its shareholders, regardless of which revenue line it benefits. Prior period comparative segment information has been restated to conform with current year presentation. In prior periods, the Company did not include unallocated expenses in segment operating income, which represented corporate governance costs not allocated to the previous operating segments. These costs are now reflected within operating expenses for the current and prior period. Revenue from continuing operations for each of the Company’s principal product and service lines is as follows (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Commercial Risk Solutions $ 917 $ 884 $ 2,943 $ 2,835 Reinsurance Solutions 355 329 1,070 1,032 Retirement Solutions 491 466 1,266 1,266 Health Solutions 293 265 977 838 Data & Analytic Services 289 260 842 794 Elimination (5 ) (3 ) (9 ) (6 ) Total revenue $ 2,340 $ 2,201 $ 7,089 $ 6,759 As Aon is operating as one segment, segment profit or loss is consistent with consolidated reporting as disclosed on the Condensed Consolidated Statements of Income. The geographic distribution of Aon’s total revenue or long-lived assets did not change as a result of the change in reportable operating segments described above. |
Guarantee of Registered Securit
Guarantee of Registered Securities | 9 Months Ended |
Sep. 30, 2017 | |
Guarantee of Registered Securities [Abstract] | |
Guarantee of Registered Securities | Guarantee of Registered Securities As described in Note 16 “Commitments and Contingencies,” in connection with the Redomestication, Aon plc entered into various agreements pursuant to which it agreed to guarantee the obligations of Aon Corporation arising under issued and outstanding debt securities, including the 5.00% Notes due September 2020, the 8.205% Notes due January 2027, and the 6.25% Notes due September 2040 (collectively, the “Aon Corp Notes”). Aon Corporation is a 100% indirectly owned subsidiary of Aon plc. All guarantees of Aon plc are full and unconditional. There are no other subsidiaries of Aon plc that are guarantors of the Aon Corp Notes. In addition, Aon Corporation entered into an agreement pursuant to which it agreed to guarantee the obligations of Aon plc arising under the 4.25% Notes due 2042 exchanged for Aon Corporation’s outstanding 8.205% Notes due January 2027, and also agreed to guarantee the obligations of Aon plc arising under the 4.45% Notes due 2043, the 4.00% Notes due November 2023, the 2.875% Notes due May 2026, the 3.50% Notes due June 2024, the 4.60% Notes due June 2044, the 4.75% Notes due May 2045, the 2.80% Notes due March 2021, and the 3.875% Notes due December 2025 (collectively, the “Aon plc Notes”). In each case, the guarantee of Aon Corporation is full and unconditional. There are no subsidiaries of Aon plc, other than Aon Corporation, that are guarantors of the Aon plc Notes. As a result of the existence of these guarantees, the Company has elected to present the financial information set forth in this footnote in accordance with Rule 3-10 of Regulation S-X. The following tables set forth Condensed Consolidating Statements of Income for the three and nine months ended September 30, 2017 and 2016 , Condensed Consolidating Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016 , Condensed Consolidating Statements of Financial Position as of September 30, 2017 and December 31, 2016 , and Condensed Consolidating Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 in accordance with Rule 3-10 of Regulation S-X. The condensed consolidating financial information includes the accounts of Aon plc, the accounts of Aon Corporation, and the combined accounts of the non-guarantor subsidiaries. The condensed consolidating financial statements are presented in all periods as a merger under common control, with Aon plc presented as the parent company in all periods prior and subsequent to the Redomestication. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions. As described in Note 1 “Basis of Presentation,” and consistent with the Company’s Condensed Consolidated Financial Statements, the following tables present the financial results of the Divested Business as discontinued operations for all periods presented within non-guarantor Subsidiaries. The impact of intercompany transactions have been reflected within continuing operations in the Condensed Consolidating Financial Statements. Condensed Consolidating Statement of Income Three months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 2,340 $ — $ 2,340 Expenses Compensation and benefits 25 20 1,374 — 1,419 Information technology — — 109 — 109 Premises — — 89 — 89 Depreciation of fixed assets — — 40 — 40 Amortization and impairment of intangible assets — — 101 — 101 Other general expenses (income) 1 1 315 — 317 Total operating expenses 26 21 2,028 — 2,075 Operating income (loss) (26 ) (21 ) 312 — 265 Interest income — 18 — (8 ) 10 Interest expense (53 ) (24 ) (1 ) 8 (70 ) Intercompany interest income (expense) 3 (135 ) 132 — — Intercompany other income (expense) 291 (271 ) (20 ) — — Other income (expense) (2 ) 14 (17 ) — (5 ) Income (loss) from continuing operations before income taxes 213 (419 ) 406 — 200 Income tax benefit (expense) (8 ) (81 ) 93 — 4 Net income (loss) from continuing operations 221 (338 ) 313 — 196 Income (loss) from discontinued operations, net of tax — — (4 ) — (4 ) Net income (loss) before equity in earnings of subsidiaries 221 (338 ) 309 — 192 Equity in earnings of subsidiaries, net of tax (36 ) 122 (216 ) 130 — Net income 185 (216 ) 93 130 192 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders $ 185 $ (216 ) $ 86 $ 130 $ 185 Condensed Consolidating Statement of Income Three months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 2,201 $ — $ 2,201 Expenses Compensation and benefits 25 4 1,271 — 1,300 Information technology — — 99 — 99 Premises — — 86 — 86 Depreciation of fixed assets — — 39 — 39 Amortization and impairment of intangible assets — — 42 — 42 Other general expenses (income) (1 ) 3 265 — 267 Total operating expenses 24 7 1,802 — 1,833 Operating income (loss) (24 ) (7 ) 399 — 368 Interest income — 4 5 (8 ) 1 Interest expense (51 ) (24 ) (3 ) 8 (70 ) Intercompany interest income (expense) 3 (135 ) 132 — — Intercompany other income (expense) 328 (277 ) (51 ) — — Other income (expense) (5 ) 1 11 3 10 Income (loss) from continuing operations before income taxes 251 (438 ) 493 3 309 Income tax benefit (expense) 13 (93 ) 105 — 25 Net income (loss) from continuing operations 238 (345 ) 388 3 284 Income (loss) from discontinued operations, net of tax — — 42 — 42 Net income (loss) before equity in earnings of subsidiaries 238 (345 ) 430 3 326 Equity in earnings of subsidiaries, net of tax 78 225 (120 ) (183 ) — Net income 316 (120 ) 310 (180 ) 326 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders $ 316 $ (120 ) $ 303 $ (180 ) $ 319 Condensed Consolidating Statement of Income Nine months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 7,089 $ — $ 7,089 Expenses Compensation and benefits 85 31 4,221 — 4,337 Information technology — — 295 — 295 Premises — — 259 — 259 Depreciation of fixed assets — — 148 — 148 Amortization and impairment of intangible assets — — 604 — 604 Other general expenses (income) 10 (3 ) 949 — 956 Total operating expenses 95 28 6,476 — 6,599 Operating income (loss) (95 ) (28 ) 613 — 490 Interest income — 35 — (15 ) 20 Interest expense (144 ) (71 ) (11 ) 15 (211 ) Intercompany interest income (expense) 10 (407 ) 397 — — Intercompany other income (expense) 189 (280 ) 91 — — Other income (expense) (25 ) 22 (35 ) 18 (20 ) Income (loss) from continuing operations before income taxes (65 ) (729 ) 1,055 18 279 Income tax benefit (expense) (30 ) (198 ) 89 — (139 ) Net income (loss) from continuing operations (35 ) (531 ) 966 18 418 Income (loss) from discontinued operations, net of tax — — 857 — 857 Net income (loss) before equity in earnings of subsidiaries (35 ) (531 ) 1,823 18 1,275 Equity in earnings of subsidiaries, net of tax 1,262 1,028 497 (2,787 ) — Net income 1,227 497 2,320 (2,769 ) 1,275 Less: Net income attributable to noncontrolling interests — — 30 — 30 Net income (loss) attributable to Aon shareholders $ 1,227 $ 497 $ 2,290 $ (2,769 ) $ 1,245 Condensed Consolidating Statement of Income Nine months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 6,759 $ — $ 6,759 Expenses Compensation and benefits 76 10 3,955 — 4,041 Information technology — — 281 — 281 Premises — — 257 — 257 Depreciation of fixed assets — — 118 — 118 Amortization and impairment of intangible assets — — 117 — 117 Other general expenses (income) 5 7 758 — 770 Total operating expenses 81 17 5,486 — 5,584 Operating income (loss) (81 ) (17 ) 1,273 — 1,175 Interest income — 13 14 (21 ) 6 Interest expense (145 ) (78 ) (10 ) 21 (212 ) Intercompany interest income (expense) 10 (405 ) 395 — — Intercompany other income (expense) 217 (292 ) 75 — — Other income (expense) (3 ) (8 ) 39 (1 ) 27 Income (loss) from continuing operations before income taxes (2 ) (787 ) 1,786 (1 ) 996 Income tax benefit (expense) (33 ) (219 ) 379 — 127 Net income (loss) from continuing operations 31 (568 ) 1,407 (1 ) 869 Income (loss) from discontinued operations, net of tax — — 102 — 102 Net income (loss) before equity in earnings of subsidiaries 31 (568 ) 1,509 (1 ) 971 Equity in earnings of subsidiaries, net of tax 914 836 268 (2,018 ) — Net income 945 268 1,777 (2,019 ) 971 Less: Net income attributable to noncontrolling interests — — 27 — 27 Net income (loss) attributable to Aon shareholders $ 945 $ 268 $ 1,750 $ (2,019 ) $ 944 Condensed Consolidating Statement of Comprehensive Income Three months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 185 $ (216 ) $ 93 $ 130 $ 192 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders 185 (216 ) 86 130 185 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 3 8 — 11 Foreign currency translation adjustments — — 243 — 243 Post-retirement benefit obligation — 7 11 — 18 Total other comprehensive income (loss) — 10 262 — 272 Equity in other comprehensive income (loss) of subsidiaries, net of tax 265 245 255 (765 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 7 — 7 Total other comprehensive income (loss) attributable to Aon shareholders 265 255 510 (765 ) 265 Comprehensive income (loss) attributable to Aon shareholders $ 450 $ 39 $ 596 $ (635 ) $ 450 Condensed Consolidating Statement of Comprehensive Income Three months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 316 $ (120 ) $ 310 $ (180 ) $ 326 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders 316 (120 ) 303 (180 ) 319 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 1 (1 ) — — Foreign currency translation adjustments — 1 (87 ) (3 ) (89 ) Post-retirement benefit obligation — 7 11 — 18 Total other comprehensive income (loss) — 9 (77 ) (3 ) (71 ) Equity in other comprehensive income (loss) of subsidiaries, net of tax (68 ) (83 ) (74 ) 225 — Less: Other comprehensive income attributable to noncontrolling interests — — — — — Total other comprehensive income (loss) attributable to Aon shareholders (68 ) (74 ) (151 ) 222 (71 ) Comprehensive income (loss) attributable to Aon shareholders $ 248 $ (194 ) $ 152 $ 42 $ 248 Condensed Consolidating Statement of Comprehensive Income Nine months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 1,227 $ 497 $ 2,320 $ (2,769 ) $ 1,275 Less: Net income attributable to noncontrolling interests — — 30 — 30 Net income (loss) attributable to Aon shareholders 1,227 497 2,290 (2,769 ) 1,245 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 3 10 — 13 Foreign currency translation adjustments — — 452 (18 ) 434 Post-retirement benefit obligation — 23 33 — 56 Total other comprehensive income (loss) — 26 495 (18 ) 503 Equity in other comprehensive income (loss) of subsidiaries, net of tax 518 480 506 (1,504 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 3 — 3 Total other comprehensive income (loss) attributable to Aon shareholders 518 506 998 (1,522 ) 500 Comprehensive income (loss) attributable to Aon shareholders $ 1,745 $ 1,003 $ 3,288 $ (4,291 ) $ 1,745 Condensed Consolidating Statement of Comprehensive Income Nine months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 945 $ 268 $ 1,777 $ (2,019 ) $ 971 Less: Net income attributable to noncontrolling interests — — 27 — 27 Net income (loss) attributable to Aon shareholders 945 268 1,750 (2,019 ) 944 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 1 (12 ) — (11 ) Foreign currency translation adjustments (2 ) 22 (248 ) 1 (227 ) Post-retirement benefit obligation — 23 (155 ) — (132 ) Total other comprehensive income (loss) (2 ) 46 (415 ) 1 (370 ) Equity in other comprehensive income (loss) of subsidiaries, net of tax (369 ) (425 ) (379 ) 1,173 — Less: Other comprehensive income attributable to noncontrolling interests — — — — — Total other comprehensive income (loss) attributable to Aon shareholders (371 ) (379 ) (794 ) 1,174 (370 ) Comprehensive income (loss) attributable to Aon shareholders $ 574 $ (111 ) $ 956 $ (845 ) $ 574 Condensed Consolidating Statement of Financial Position As of September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ — $ 3,110 $ 802 $ (3,163 ) $ 749 Short-term investments — 1,467 173 — 1,640 Receivables, net — 2 2,066 — 2,068 Fiduciary assets — — 9,292 — 9,292 Intercompany receivables 110 4,860 12,436 (17,406 ) — Other current assets — 37 481 — 518 Current assets of discontinued operations — — — — — Total Current Assets 110 9,476 25,250 (20,569 ) 14,267 Goodwill — — 7,888 — 7,888 Intangible assets, net — — 1,341 — 1,341 Fixed assets, net — — 545 — 545 Deferred tax assets 135 664 173 (407 ) 565 Intercompany receivables 391 261 8,728 (9,380 ) — Prepaid pension — 5 1,015 — 1,020 Other non-current assets 1 49 248 — 298 Investment in subsidiary 11,900 17,748 509 (30,157 ) — Non-current assets of discontinued operations — — — — — TOTAL ASSETS $ 12,537 $ 28,203 $ 45,697 $ (60,513 ) $ 25,924 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 2,929 $ 37 $ 1,785 $ (3,163 ) $ 1,588 Short-term debt and current portion of long-term debt — — 305 — 305 Fiduciary liabilities — — 9,292 — 9,292 Intercompany payables 147 15,951 1,308 (17,406 ) — Other current liabilities 24 54 1,211 — 1,289 Current liabilities of discontinued operations — — — — — Total Current Liabilities 3,100 16,042 13,901 (20,569 ) 12,474 Long-term debt 4,247 1,414 1 — 5,662 Deferred tax liabilities — — 490 (407 ) 83 Pension, other post-retirement and other post-employment liabilities — 1,234 378 — 1,612 Intercompany payables — 8,894 486 (9,380 ) — Other non-current liabilities 15 110 721 — 846 Non-current liabilities of discontinued operations — — — — — TOTAL LIABILITIES 7,362 27,694 15,977 (30,356 ) 20,677 TOTAL AON SHAREHOLDERS’ EQUITY 5,175 509 29,648 (30,157 ) 5,175 Noncontrolling interests — — 72 — 72 TOTAL EQUITY 5,175 509 29,720 (30,157 ) 5,247 TOTAL LIABILITIES AND EQUITY $ 12,537 $ 28,203 $ 45,697 $ (60,513 ) $ 25,924 Condensed Consolidating Statement of Financial Position As of December 31, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ — $ 1,633 $ 655 $ (1,862 ) $ 426 Short-term investments — 140 150 — 290 Receivables, net — 3 2,103 — 2,106 Fiduciary assets — — 8,959 — 8,959 Intercompany receivables 105 1,880 9,825 (11,810 ) — Other current assets — 25 222 — 247 Current assets of discontinued operations — — 1,118 — 1,118 Total Current Assets 105 3,681 23,032 (13,672 ) 13,146 Goodwill — — 7,410 — 7,410 Intangible assets, net — — 1,890 — 1,890 Fixed assets, net — — 550 — 550 Deferred tax assets 134 726 171 (706 ) 325 Intercompany receivables 366 261 8,711 (9,338 ) — Prepaid pension — 5 853 — 858 Other non-current assets 2 119 239 — 360 Investment in subsidiary 10,107 17,131 (356 ) (26,882 ) — Non-current assets of discontinued operations — — 2,076 — 2,076 TOTAL ASSETS $ 10,714 $ 21,923 $ 44,576 $ (50,598 ) $ 26,615 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 585 $ 44 $ 2,837 $ (1,862 ) $ 1,604 Short-term debt and current portion of long-term debt 279 50 7 — 336 Fiduciary liabilities — — 8,959 — 8,959 Intercompany payables 142 10,399 1,269 (11,810 ) — Other current liabilities — 63 593 — 656 Current liabilities of discontinued operations — — 940 — 940 Total Current Liabilities 1,006 10,556 14,605 (13,672 ) 12,495 Long-term debt 4,177 1,413 279 — 5,869 Deferred tax liabilities — — 759 (658 ) 101 Pension, other post-retirement and other post-employment liabilities — 1,356 404 — 1,760 Intercompany payables — 8,877 461 (9,338 ) — Other non-current liabilities 8 77 634 — 719 Non-current liabilities of discontinued operations — — 139 — 139 TOTAL LIABILITIES 5,191 22,279 17,281 (23,668 ) 21,083 TOTAL AON SHAREHOLDERS’ EQUITY 5,523 (356 ) 27,238 (26,930 ) 5,475 Noncontrolling interests — — 57 — 57 TOTAL EQUITY 5,523 (356 ) 27,295 (26,930 ) 5,532 TOTAL LIABILITIES AND EQUITY $ 10,714 $ 21,923 $ 44,576 $ (50,598 ) $ 26,615 Condensed Consolidating Statement of Cash Flows Nine months ended September 30, 2017 Aon Aon Other Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ (135 ) $ 999 $ 987 $ (1,562 ) $ 289 Cash provided by operating activities - discontinued operations — — 64 — 64 CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (135 ) 999 1,051 (1,562 ) 353 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 576 11 (544 ) 43 Payments for investments (16 ) (25 ) (571 ) 557 (55 ) Net purchases of short-term investments - non-fiduciary — (1,328 ) (16 ) — (1,344 ) Acquisition of businesses, net of cash acquired — 1 (173 ) — (172 ) Sale of businesses, net of cash sold — — 4,194 — 4,194 Capital expenditures — — (125 ) — (125 ) Cash provided by (used for) investing activities - continuing operations (16 ) (776 ) 3,320 13 2,541 Cash used for investing activities - discontinued operations — — (19 ) — (19 ) CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (16 ) (776 ) 3,301 13 2,522 CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (1,888 ) — — — (1,888 ) Advances from (to) affiliates 2,722 1,304 (4,274 ) 248 — Issuance of shares for employee benefit plans (118 ) — — — (118 ) Issuance of debt 544 1,100 7 — 1,651 Repayment of debt (835 ) (1,150 ) (13 ) — (1,998 ) Cash dividends to shareholders (274 ) — — — (274 ) Noncontrolling interests and other financing activities — — (21 ) — (21 ) Cash provided by (used for) financing activities - continuing operations 151 1,254 (4,301 ) 248 (2,648 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 151 1,254 (4,301 ) 248 (2,648 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 91 — 91 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS — 1,477 142 (1,301 ) 318 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (1) — 1,633 660 (1,862 ) 431 CASH AND CASH EQUIVALENTS AT END OF PERIOD (2) $ — $ 3,110 $ 802 $ (3,163 ) $ 749 (1) Includes $5 million of discontinued operations at December 31, 2016. (2) There was no cash held by discontinued operations at September 30, 2017 . Condensed Consolidating Statement of Cash Flows Nine months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ 219 $ (664 ) $ 1,597 $ — $ 1,152 Cash provided by operating activities - discontinued operations — — 323 — 323 CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 219 (664 ) 1,920 — 1,475 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 19 12 — 31 Payments for investments — (25 ) (22 ) — (47 ) Net sales of short-term investments - non-fiduciary — (99 ) (9 ) — (108 ) Acquisition of businesses, net of cash acquired — — (198 ) — (198 ) Sale of businesses, net of cash sold — — 104 — 104 Capital expenditures — — (107 ) — (107 ) Cash provided by (used for) investing activities - continuing operations — (105 ) (220 ) — (325 ) Cash used for investing activities - discontinued operations — — (46 ) — (46 ) CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES — (105 ) (266 ) — (371 ) CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (1,037 ) — — — (1,037 ) Advances from (to) affiliates 166 356 (670 ) 148 — Issuance of shares for employee benefit plans (70 ) — — — (70 ) Issuance of debt 1,588 1,141 — — 2,729 Repayment of debt (608 ) (1,692 ) (8 ) — (2,308 ) Cash dividends to shareholders (258 ) — — — (258 ) Noncontrolling interests and other financing activities — — (71 ) — (71 ) Cash provided by (used for) financing activities - continuing operations (219 ) (195 ) (749 ) 148 (1,015 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (219 ) (195 ) (749 ) 148 (1,015 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 10 — 10 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS — (964 ) 915 148 99 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR(1) — 2,083 1,242 (2,941 ) 384 CASH AND CASH EQUIVALENTS AT END OF PERIOD(2) $ — $ 1,119 $ 2,157 $ (2,793 ) $ 483 (1) Includes $2 million of discontinued operations at December 31, 2015. (2) Includes $3 million of discontinued operations at September 30, 2016. |
Accounting Principles and Pra26
Accounting Principles and Practices (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited Condensed Consolidated Financial Statements and Notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Condensed Consolidated Financial Statements include the accounts of Aon plc and all of its controlled subsidiaries (“Aon” or the “Company”). All intercompany accounts and transactions have been eliminated. The Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for all periods presented. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. |
Use of Estimates | Use of Estimates The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the financial statements in future periods. |
New Accounting Standards | Adoption of New Accounting Standards Share-based Compensation In March 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period. Further, excess tax benefits are required to be classified along with other income tax cash flows as an operating activity. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. The Company adopted this guidance on January 1, 2017, with the following impacts: • An increase to Deferred tax assets on the Condensed Consolidated Statement of Financial Position of approximately $49 million through a cumulative-effect adjustment to Retained earnings for excess tax benefits not previously recognized, and • The recognition of $5 million , or $0.02 per share, income tax benefit from continuing operations related to excess tax benefits in the Condensed Consolidated Statement of Income for the three months ended September 30, 2017 , and $53 million , or $0.20 per share, for the nine months ended September 30, 2017 . Adoption of the guidance was applied prospectively on the Condensed Consolidated Statement of Cash Flows and prior period comparable information was not restated. Other elements of the guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Accounting Standards Issued But Not Yet Adopted Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued new accounting guidance on targeted improvements to accounting for hedging activities. The new guidance amends its hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the effect of a hedging instrument to be presented in the same income statement line as the hedged item. An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the period of adoption. Changes to income statement presentation and financial statement disclosures will be applied prospectively. The new guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted. The Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and the period in which it plans to adopt. Presentation of Net Periodic Pension and Postretirement Benefit Costs In March 2017, the FASB issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. An entity will apply the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Condensed Consolidated Statement of Income and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension costs and net periodic postretirement benefit cost in assets. The new guidance allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The new guidance is effective for Aon in the first quarter of 2018. The adoption of this guidance will have no impact on the total results of the Company. The presentation of results will reflect a change in Operating income offset by an equal change in Other income (expense) for the period. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued new accounting guidance on simplifying the test for goodwill impairment. Currently the standard requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. The new guidance removes Step 2. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. An entity will apply the new guidance on a prospective basis. The new guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted for annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the period of adoption and the impact that the standard will have on the Condensed Consolidated Financial Statements. Income Tax Consequences of Intercompany Transactions In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory. The guidance will require that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e., depreciated, amortized, or impaired). An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The new guidance is effective for Aon in the first quarter of 2018, and the Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements. Statement of Cash Flows In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity will no longer have discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard will be effective for the Company in the first quarter of 2018, with early adoption permitted. An entity will apply the new guidance through retrospective adjustment to all periods presented. The retrospective approach includes a practical expedient that entities may apply should retrospective adoption be impracticable; in this case, the amendments for these issues may be applied prospectively as of the earliest date practicable. The guidance will not have a material impact on the Company’s Condensed Consolidated Statements of Cash Flows. Credit Losses In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments. The new guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements, as well as the method of transition and period of adoption. Leases In February 2016, the FASB issued new accounting guidance on leases, which requires lessees to recognize assets and liabilities for most leases. Under the new guidance, a lessee should recognize in the Condensed Consolidated Statement of Financial Position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from currently effective U.S. GAAP. The new standard will be effective for the Company in the first quarter of 2019, with early adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Aon is currently evaluating the impact the standard will have on the Condensed Consolidated Financial Statements and period of adoption. Financial Assets and Liabilities In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. An entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values, including disclosure requirements, should be applied prospectively to equity investments that exist as of the date of adoption of the guidance. The guidance is effective for the Company in the first quarter of 2018 and early adoption is permitted. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and period of adoption. Revenue Recognition In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers, which, when effective, will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principal of the standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The standard is effective for Aon in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. Two methods of transition are permitted upon adoption: full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing a comparable view across all periods presented. Under the modified retrospective method, prior periods would not be restated. Rather, revenue and other disclosures for pre-2018 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. The Company will adopt this standard in the first quarter of 2018 using a modified retrospective adoption approach. A preliminary assessment to determine the impacts of the new accounting standard has been performed. The Company is currently implementing accounting and operational processes and controls to ensure compliance with the new standard, but is still evaluating the quantitative impacts the standard will have on its financial statements. However, the more significant impacts of the new standard to the Company are anticipated to be as follows: The Company currently recognizes revenue either at a point in time or over a period of time based on the transfer of value to customers or as the remuneration becomes determinable. Under the new standard, the revenue related to certain brokerage activities recognized over a period of time will be recognized on the effective date of the associated policies when control of the policy transfers to the customer. As a result, revenue from these arrangements will be recognized in earlier periods under the new standard in comparison to the current guidance and will change the timing and amount of revenue recognized for annual and interim periods. This change is anticipated to result in a significant shift in interim revenue for Reinsurance Solutions and certain other brokerage services. The Company is currently assessing the timing and measurement of revenue recognition under the new standard for certain other services, including advisory, where limited impacts are anticipated. Additionally, the new standard provides guidance on accounting for certain revenue-related costs including when to capitalize costs associated with obtaining and fulfilling a contract. The majority of these costs are currently expensed as incurred under existing U.S. GAAP. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company plans to apply a practical expedient and recognize the costs of obtaining a contract as an expense when incurred. Assets recognized for the costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is generally expected to be less than one year. The Company is quantifying the nature and amount of costs that would qualify for capitalization and the amount of amortization that will be recognized in each period. |
Derivatives | The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers denominated in a currency that differs from its functional currency, or enters into other transactions that are denominated in a currency other than its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income. The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 30 -day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income. |
Fair Value Measurement | The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments: Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. Equity investments consist of domestic and international equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities. Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Consolidated Financial Statements. Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities. Debt is carried at outstanding principal balance, less any unamortized discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | The following table presents the financial results of the Divested Business (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Revenue Total revenue $ — $ 559 $ 698 $ 1,606 Expenses Total operating expenses 14 491 640 1,443 Operating income from discontinued operations (14 ) 68 58 163 Other income (1 ) (1 ) 10 — Income from discontinued operations before income taxes (15 ) 67 68 163 Income taxes (6 ) 25 14 61 Income from discontinued operations excluding gain, net of tax (9 ) 42 54 102 Gain on sale of discontinued operations, net of tax 5 — 803 — Income from discontinued operations, net of tax $ (4 ) $ 42 $ 857 $ 102 The following table presents the aggregate carrying amounts of the classes of assets and liabilities presented as discontinued operations within the Company’s Condensed Consolidated Statements of Financial Position (in millions): September 30, 2017 (1) December 31, ASSETS Cash and cash equivalents $ — $ 5 Receivables, net — 483 Fiduciary assets — 526 Goodwill — 1,337 Intangible assets, net — 333 Fixed assets, net — 215 Other assets — 295 TOTAL ASSETS $ — $ 3,194 LIABILITIES Accounts payable and accrued liabilities $ — $ 197 Fiduciary liabilities — 526 Other liabilities — 356 TOTAL LIABILITIES $ — $ 1,079 (1) All assets and liabilities associated with the Divested Business were sold on May 1, 2017. |
Other Financial Data (Tables)
Other Financial Data (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Financial Data [Abstract] | |
Schedule of Other Income (Expense) | Other income (expense) consists of the following (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Foreign currency remeasurement gain (loss) $ (20 ) $ 3 $ (32 ) $ (14 ) Gain (loss) on disposal of business — — (2 ) 41 Equity earnings 2 4 11 7 Gain (loss) on financial instruments 16 3 6 (7 ) Other (3 ) — (3 ) — Total $ (5 ) $ 10 $ (20 ) $ 27 |
Schedule of Allowance for Doubtful Accounts | An analysis of the allowance for doubtful accounts is as follows (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Balance at beginning of period $ 59 $ 64 $ 56 $ 58 Provision charged to Other general expenses 5 4 16 15 Accounts written off, net of recoveries — (5 ) (10 ) (11 ) Foreign currency translation (5 ) — (3 ) 1 Balance at end of period $ 59 $ 63 $ 59 $ 63 |
Schedule of Other Current Assets | The components of Other current assets are as follows (in millions): As of September 30, 2017 December 31, 2016 Taxes receivable $ 208 $ 100 Prepaid expenses 158 102 Receivables from the Divested Business (1) 124 — Other 28 45 Total $ 518 $ 247 (1) Refer to Note 3 “Discontinued Operations” for additional information. |
Schedule of Other Non-current Assets | The components of Other non-current assets are as follows (in millions): As of September 30, 2017 December 31, 2016 Investments $ 44 $ 119 Taxes receivable 88 82 Other 166 159 Total $ 298 $ 360 |
Schedule of Other Current Liabilities | The components of Other current liabilities are as follows (in millions): As of September 30, 2017 December 31, 2016 Deferred revenue $ 331 $ 199 Taxes payable (1) 537 77 Other 421 380 Total $ 1,289 $ 656 (1) Includes accrued taxes payable related to the gain on sale of the Divested Business. |
Schedule of Other Non-current Liabilities | The components of Other non-current liabilities are as follows (in millions): As of September 30, 2017 December 31, 2016 Taxes payable $ 333 $ 288 Deferred revenue 45 49 Leases 145 136 Compensation and benefits 61 56 Other 262 190 Total $ 846 $ 719 |
Acquisitions and Dispositions29
Acquisitions and Dispositions of Businesses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table includes the fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions): For the nine months ended September 30, 2017 Cash $ 164 Deferred and contingent consideration 32 Aggregate consideration transferred $ 196 Assets acquired: Cash and cash equivalents $ 7 Receivables, net 11 Goodwill 121 Intangible assets, net 90 Fixed assets, net 1 Other assets 10 Total assets acquired 240 Liabilities assumed: Current liabilities 18 Other non-current liabilities 26 Total liabilities assumed 44 Net assets acquired $ 196 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table summarizes restructuring and separation costs by type that have been incurred through September 30, 2017 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs may be revised in future periods as these assumptions are updated: Three months ended September 30, 2017 Nine months ended September 30, 2017 Estimated Remaining Costs Estimated Total Cost (1) Workforce reduction $ 52 $ 257 $ 46 $ 303 Technology rationalization (2) 12 22 124 146 Lease consolidation (2) 4 8 72 80 Asset impairments 2 26 14 40 Other costs associated with restructuring and separation (2) (3) 32 88 93 181 Total restructuring and related expenses $ 102 $ 401 $ 349 $ 750 (1) Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan. Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives. (2) Contract termination costs included within Technology rationalization for the three and nine months ended September 30, 2017 were $1 million . Contract termination costs included within Lease consolidations for the three and nine months ended September 30, 2017 were $3 million and $8 million , respectively. Contract termination costs included within Other costs associated with restructuring and separation were $1 million for the three and nine months ended September 30, 2017 . Total estimated contract termination costs to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, are $10 million , $80 million , and $10 million . (3) Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs, and consulting and legal fees. These costs are generally recognized when incurred. |
Schedule of Restructuring Reserve by Type of Cost | The changes in the Company’s liabilities for the Restructuring Plan as of September 30, 2017 are as follows (in millions): Restructuring Plan Balance as of December 31, 2016 $ — Expensed 369 Cash payments (199 ) Foreign currency translation and other 17 Balance as of September 30, 2017 $ 187 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Net Carrying Amount of Goodwill by Operating Segment | The changes in the net carrying amount of goodwill for the nine months ended September 30, 2017 are as follows (in millions): Balance as of December 31, 2016 $ 7,410 Goodwill related to current year acquisitions 121 Goodwill related to disposals (1 ) Goodwill related to prior year acquisitions (6 ) Foreign currency translation 364 Balance as of September 30, 2017 $ 7,888 |
Schedule of Other Intangible Assets by Asset Class | Other intangible assets by asset class are as follows (in millions): September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization and Impairment Net Carrying Amount Gross Carrying Amount Accumulated Net Carrying Amount Customer related and contract based $ 2,104 $ 1,380 $ 724 $ 2,023 $ 1,198 $ 825 Tradenames (1) 1,041 478 563 1,027 7 1,020 Technology and other (1) 384 330 54 347 302 45 Total $ 3,529 $ 2,188 $ 1,341 $ 3,397 $ 1,507 $ 1,890 (1) Prior to May 1, 2017, finite lived tradenames were classified within Technology and other. As of December 31, 2016, $29 million of gross carrying amount and $7 million of accumulated amortization related to finite-lived tradenames was reclassified from Technology and other to Tradenames. |
Schedule of Estimated Future Amortization Expense on Intangible Assets | The estimated future amortization for finite lived intangible assets as of September 30, 2017 is as follows (in millions): Remainder of 2017 $ 117 2018 376 2019 357 2020 196 2021 89 Thereafter 206 Total $ 1,341 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | The weighted average commercial paper outstanding and its related interest rates are as follows: Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Weighted average commercial paper outstanding $ — $ 271 $ 227 $ 251 Weighted average interest rate of commercial paper outstanding — % 0.02 % 0.18 % 0.27 % Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Condensed Consolidated Statements of Financial Position, is as follows (in millions): As of September 30, 2017 December 31, 2016 Commercial paper outstanding $ — $ 329 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Components of Weighted Average Number of Shares | Weighted average shares outstanding are as follows (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Basic weighted-average ordinary shares outstanding 255.6 267.5 260.9 269.1 Dilutive effect of potentially issuable shares 1.7 2.1 2.0 1.9 Diluted weighted-average ordinary shares outstanding 257.3 269.6 262.9 271.0 |
Components of Accumulated Other Comprehensive Loss, Net of Related Tax | Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions): Change in Fair Value of Financial Instruments (1) Foreign Currency Translation Adjustments Post-Retirement Benefit Obligation (2) Total Balance at December 31, 2016 $ (37 ) $ (1,264 ) $ (2,611 ) $ (3,912 ) Other comprehensive income (loss) before reclassifications, net 13 442 — 455 Amounts reclassified from accumulated other comprehensive loss: Amounts reclassified from accumulated other comprehensive income (loss) (2 ) (11 ) 80 67 Tax benefit (expense) 2 — (24 ) (22 ) Amounts reclassified from accumulated other comprehensive income (loss), net — (11 ) 56 45 Net current period other comprehensive income (loss) 13 431 56 500 Balance at September 30, 2017 $ (24 ) $ (833 ) $ (2,555 ) $ (3,412 ) (1) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense) , Other general expenses , and Compensation and benefits . See Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivative and hedging activity. (2) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Compensation and benefits. |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Components of net periodic benefit cost for the pension plans | The following table provides the components of the net periodic cost (benefit) recognized in the Condensed Consolidated Statements of Income in Compensation and benefits for Aon’s material U.K., U.S., and other significant international pension plans located in the Netherlands and Canada (in millions): Three months ended September 30 U.K. U.S. Other 2017 2016 2017 2016 2017 2016 Service cost $ — $ — $ — $ — $ — $ — Interest cost 31 37 24 28 7 7 Expected return on plan assets, net of administration expenses (50 ) (58 ) (34 ) (39 ) (13 ) (12 ) Amortization of prior-service cost — — — 1 — — Amortization of net actuarial loss 8 7 13 12 3 3 Net periodic cost (benefit) $ (11 ) $ (14 ) $ 3 $ 2 $ (3 ) $ (2 ) Loss on pension settlement — — — — — — Total net periodic cost (benefit) $ (11 ) $ (14 ) $ 3 $ 2 $ (3 ) $ (2 ) Nine months ended September 30 U.K. U.S. Other 2017 2016 2017 2016 2017 2016 Service cost $ — $ — $ — $ — $ — $ — Interest cost 91 123 72 83 19 21 Expected return on plan assets, net of administration expenses (147 ) (187 ) (104 ) (117 ) (35 ) (36 ) Amortization of prior-service cost — 1 1 2 — — Amortization of net actuarial loss 23 24 38 37 9 8 Net periodic cost (benefit) $ (33 ) $ (39 ) $ 7 $ 5 $ (7 ) $ (7 ) Loss on pension settlement — 61 — — — — Total net periodic cost (benefit) $ (33 ) $ 22 $ 7 $ 5 $ (7 ) $ (7 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based compensation expense recognized in continuing operations | The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Restricted share units (“RSUs”) $ 42 $ 40 $ 143 $ 136 Performance share awards (“PSAs”) 22 24 63 67 Employee share purchase plans 3 2 8 7 Total share-based compensation expense $ 67 $ 66 $ 214 $ 210 |
Restricted share unit activity | The following table summarizes the status of the Company’s RSUs (shares in thousands): 2017 2016 Shares Fair Value (1) Shares Fair Value (1) Non-vested at December 31 6,195 $ 89 7,167 $ 77 Granted 1,549 122 2,110 101 Vested (2,294 ) 82 (2,729 ) 70 Forfeited (590 ) 92 (333 ) 81 Non-vested at September 30 4,860 $ 102 6,215 $ 88 (1) Represents per share weighted average fair value of award at date of grant. |
Performance-based plans | Information as of September 30, 2017 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the nine months ended September 30, 2017 and the years ended December 31, 2016 and 2015 , respectively, is as follows (shares in thousands and dollars in millions, except fair value): September 30, December 31, December 31, Target PSAs granted during period 548 752 967 Weighted average fair value per share at date of grant $ 114 $ 100 $ 96 Number of shares that would be issued based on current performance levels 544 663 1,362 Unamortized expense, based on current performance levels $ 51 $ 27 $ 11 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional and fair values of derivative instruments | The notional and fair values of derivative instruments are as follows (in millions): Notional Amount Derivative Assets (1) Derivative Liabilities (2) September 30, December 31, September 30, December 31, September 30, December 31, Foreign exchange contracts Accounted for as hedges $ 711 $ 758 $ 31 $ 14 $ 3 $ 13 Not accounted for as hedges (3) 245 189 — 1 2 1 Total $ 956 $ 947 $ 31 $ 15 $ 5 $ 14 (1) Included within Other current assets ( $6 million at September 30, 2017 and $6 million at December 31, 2016 ) or Other non-current assets ( $25 million at September 30, 2017 and $9 million at December 31, 2016 ). (2) Included within Other current liabilities ( $3 million at September 30, 2017 and $7 million at December 31, 2016 ) or Other non-current liabilities ( $2 million at September 30, 2017 and $7 million at December 31, 2016 ). (3) These contracts typically are for 30 day durations and are executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date. Offsetting of derivatives assets are as follows (in millions): Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position (1) Derivatives accounted for as hedges September 30, December 31, September 30, December 31, September 30, December 31, Foreign exchange contracts $ 31 $ 14 $ — $ (1 ) $ 31 $ 13 (1) Included within Other current assets ( $6 million at September 30, 2017 and $4 million at December 31, 2016 ) or Other non-current assets ( $25 million at September 30, 2017 and $9 million at December 31, 2016 ). Offsetting of derivative liabilities are as follows (in millions): Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position (1) Derivatives accounted for as hedges September 30, December 31, September 30, December 31, September 30, December 31, Foreign exchange contracts $ 3 $ 13 $ — $ (1 ) $ 3 $ 12 (1) Included within Other current liabilities ( $2 million at September 30, 2017 and $5 million at December 31, 2016 ) or Other non-current liabilities ( $1 million at September 30, 2017 and $7 million at December 31, 2016 ). |
Derivative gains (losses) | The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017 and 2016 are as follows (in millions): Cash Flow Hedge - Foreign Exchange Contracts Location of Eventual Reclassification from Accumulated Other Comprehensive Loss Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss Three months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ — $ 3 $ — $ 8 $ 11 2016 10 (4 ) — (7 ) (1 ) Cash Flow Hedge - Foreign Exchange Contracts Location of Eventual Reclassification from Accumulated Other Comprehensive Loss Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss Nine months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ 9 $ 5 $ — $ 4 $ 18 2016 8 (9 ) — (18 ) (19 ) Cash Flow Hedge - Foreign Exchange Contracts Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Three months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ 1 $ (1 ) $ — $ (3 ) $ (3 ) 2016 1 (1 ) — (2 ) (2 ) Cash Flow Hedge - Foreign Exchange Contracts Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Nine months ended September 30 Compensation and Benefits Other General Expenses Interest Expense Other Income (Expense) Total 2017 $ 14 $ (3 ) $ (1 ) $ (7 ) $ 3 2016 2 (2 ) (1 ) (5 ) (6 ) |
Fair Value Measurements and F37
Fair Value Measurements and Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016 (in millions): Fair Value Measurements Using Balance at September 30, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 3,091 $ 3,091 $ — $ — Other investments: Government bonds 1 — 1 — Equity investments 11 7 4 — Derivatives: (2) Foreign exchange contracts 31 — 31 — Liabilities: Derivatives: (2) Foreign exchange contracts 5 — 5 — (1) Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. Fair Value Measurements Using Balance at December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 1,371 $ 1,371 $ — $ — Other investments: Government bonds 1 — 1 — Equity investments 9 6 3 — Derivatives: (2) Foreign exchange contracts 15 — 15 — Liabilities: Derivatives: (2) Foreign exchange contracts 14 — 14 — (1) Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. |
Schedule of financial instruments where the carrying amounts and fair values differ | The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ (in millions): September 30, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Current portion of long-term debt (1) $ 305 $ 309 $ — $ — Long-term debt 5,662 6,227 5,869 6,264 (1) Excludes commercial paper program |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of reconciliation of segment income before tax to income from continuing operations before income taxes | Revenue from continuing operations for each of the Company’s principal product and service lines is as follows (in millions): Three months ended September 30 Nine months ended September 30 2017 2016 2017 2016 Commercial Risk Solutions $ 917 $ 884 $ 2,943 $ 2,835 Reinsurance Solutions 355 329 1,070 1,032 Retirement Solutions 491 466 1,266 1,266 Health Solutions 293 265 977 838 Data & Analytic Services 289 260 842 794 Elimination (5 ) (3 ) (9 ) (6 ) Total revenue $ 2,340 $ 2,201 $ 7,089 $ 6,759 |
Guarantee of Registered Secur39
Guarantee of Registered Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Guarantee of Registered Securities [Abstract] | |
Condensed Consolidating Statements of Income | Condensed Consolidating Statement of Income Three months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 2,340 $ — $ 2,340 Expenses Compensation and benefits 25 20 1,374 — 1,419 Information technology — — 109 — 109 Premises — — 89 — 89 Depreciation of fixed assets — — 40 — 40 Amortization and impairment of intangible assets — — 101 — 101 Other general expenses (income) 1 1 315 — 317 Total operating expenses 26 21 2,028 — 2,075 Operating income (loss) (26 ) (21 ) 312 — 265 Interest income — 18 — (8 ) 10 Interest expense (53 ) (24 ) (1 ) 8 (70 ) Intercompany interest income (expense) 3 (135 ) 132 — — Intercompany other income (expense) 291 (271 ) (20 ) — — Other income (expense) (2 ) 14 (17 ) — (5 ) Income (loss) from continuing operations before income taxes 213 (419 ) 406 — 200 Income tax benefit (expense) (8 ) (81 ) 93 — 4 Net income (loss) from continuing operations 221 (338 ) 313 — 196 Income (loss) from discontinued operations, net of tax — — (4 ) — (4 ) Net income (loss) before equity in earnings of subsidiaries 221 (338 ) 309 — 192 Equity in earnings of subsidiaries, net of tax (36 ) 122 (216 ) 130 — Net income 185 (216 ) 93 130 192 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders $ 185 $ (216 ) $ 86 $ 130 $ 185 Condensed Consolidating Statement of Income Three months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 2,201 $ — $ 2,201 Expenses Compensation and benefits 25 4 1,271 — 1,300 Information technology — — 99 — 99 Premises — — 86 — 86 Depreciation of fixed assets — — 39 — 39 Amortization and impairment of intangible assets — — 42 — 42 Other general expenses (income) (1 ) 3 265 — 267 Total operating expenses 24 7 1,802 — 1,833 Operating income (loss) (24 ) (7 ) 399 — 368 Interest income — 4 5 (8 ) 1 Interest expense (51 ) (24 ) (3 ) 8 (70 ) Intercompany interest income (expense) 3 (135 ) 132 — — Intercompany other income (expense) 328 (277 ) (51 ) — — Other income (expense) (5 ) 1 11 3 10 Income (loss) from continuing operations before income taxes 251 (438 ) 493 3 309 Income tax benefit (expense) 13 (93 ) 105 — 25 Net income (loss) from continuing operations 238 (345 ) 388 3 284 Income (loss) from discontinued operations, net of tax — — 42 — 42 Net income (loss) before equity in earnings of subsidiaries 238 (345 ) 430 3 326 Equity in earnings of subsidiaries, net of tax 78 225 (120 ) (183 ) — Net income 316 (120 ) 310 (180 ) 326 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders $ 316 $ (120 ) $ 303 $ (180 ) $ 319 Condensed Consolidating Statement of Income Nine months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 7,089 $ — $ 7,089 Expenses Compensation and benefits 85 31 4,221 — 4,337 Information technology — — 295 — 295 Premises — — 259 — 259 Depreciation of fixed assets — — 148 — 148 Amortization and impairment of intangible assets — — 604 — 604 Other general expenses (income) 10 (3 ) 949 — 956 Total operating expenses 95 28 6,476 — 6,599 Operating income (loss) (95 ) (28 ) 613 — 490 Interest income — 35 — (15 ) 20 Interest expense (144 ) (71 ) (11 ) 15 (211 ) Intercompany interest income (expense) 10 (407 ) 397 — — Intercompany other income (expense) 189 (280 ) 91 — — Other income (expense) (25 ) 22 (35 ) 18 (20 ) Income (loss) from continuing operations before income taxes (65 ) (729 ) 1,055 18 279 Income tax benefit (expense) (30 ) (198 ) 89 — (139 ) Net income (loss) from continuing operations (35 ) (531 ) 966 18 418 Income (loss) from discontinued operations, net of tax — — 857 — 857 Net income (loss) before equity in earnings of subsidiaries (35 ) (531 ) 1,823 18 1,275 Equity in earnings of subsidiaries, net of tax 1,262 1,028 497 (2,787 ) — Net income 1,227 497 2,320 (2,769 ) 1,275 Less: Net income attributable to noncontrolling interests — — 30 — 30 Net income (loss) attributable to Aon shareholders $ 1,227 $ 497 $ 2,290 $ (2,769 ) $ 1,245 Condensed Consolidating Statement of Income Nine months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Revenue Total revenue $ — $ — $ 6,759 $ — $ 6,759 Expenses Compensation and benefits 76 10 3,955 — 4,041 Information technology — — 281 — 281 Premises — — 257 — 257 Depreciation of fixed assets — — 118 — 118 Amortization and impairment of intangible assets — — 117 — 117 Other general expenses (income) 5 7 758 — 770 Total operating expenses 81 17 5,486 — 5,584 Operating income (loss) (81 ) (17 ) 1,273 — 1,175 Interest income — 13 14 (21 ) 6 Interest expense (145 ) (78 ) (10 ) 21 (212 ) Intercompany interest income (expense) 10 (405 ) 395 — — Intercompany other income (expense) 217 (292 ) 75 — — Other income (expense) (3 ) (8 ) 39 (1 ) 27 Income (loss) from continuing operations before income taxes (2 ) (787 ) 1,786 (1 ) 996 Income tax benefit (expense) (33 ) (219 ) 379 — 127 Net income (loss) from continuing operations 31 (568 ) 1,407 (1 ) 869 Income (loss) from discontinued operations, net of tax — — 102 — 102 Net income (loss) before equity in earnings of subsidiaries 31 (568 ) 1,509 (1 ) 971 Equity in earnings of subsidiaries, net of tax 914 836 268 (2,018 ) — Net income 945 268 1,777 (2,019 ) 971 Less: Net income attributable to noncontrolling interests — — 27 — 27 Net income (loss) attributable to Aon shareholders $ 945 $ 268 $ 1,750 $ (2,019 ) $ 944 |
Condensed Consolidating Statements of Comprehensive Income | Condensed Consolidating Statement of Comprehensive Income Three months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 185 $ (216 ) $ 93 $ 130 $ 192 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders 185 (216 ) 86 130 185 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 3 8 — 11 Foreign currency translation adjustments — — 243 — 243 Post-retirement benefit obligation — 7 11 — 18 Total other comprehensive income (loss) — 10 262 — 272 Equity in other comprehensive income (loss) of subsidiaries, net of tax 265 245 255 (765 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 7 — 7 Total other comprehensive income (loss) attributable to Aon shareholders 265 255 510 (765 ) 265 Comprehensive income (loss) attributable to Aon shareholders $ 450 $ 39 $ 596 $ (635 ) $ 450 Condensed Consolidating Statement of Comprehensive Income Three months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 316 $ (120 ) $ 310 $ (180 ) $ 326 Less: Net income attributable to noncontrolling interests — — 7 — 7 Net income (loss) attributable to Aon shareholders 316 (120 ) 303 (180 ) 319 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 1 (1 ) — — Foreign currency translation adjustments — 1 (87 ) (3 ) (89 ) Post-retirement benefit obligation — 7 11 — 18 Total other comprehensive income (loss) — 9 (77 ) (3 ) (71 ) Equity in other comprehensive income (loss) of subsidiaries, net of tax (68 ) (83 ) (74 ) 225 — Less: Other comprehensive income attributable to noncontrolling interests — — — — — Total other comprehensive income (loss) attributable to Aon shareholders (68 ) (74 ) (151 ) 222 (71 ) Comprehensive income (loss) attributable to Aon shareholders $ 248 $ (194 ) $ 152 $ 42 $ 248 Condensed Consolidating Statement of Comprehensive Income Nine months ended September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 1,227 $ 497 $ 2,320 $ (2,769 ) $ 1,275 Less: Net income attributable to noncontrolling interests — — 30 — 30 Net income (loss) attributable to Aon shareholders 1,227 497 2,290 (2,769 ) 1,245 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 3 10 — 13 Foreign currency translation adjustments — — 452 (18 ) 434 Post-retirement benefit obligation — 23 33 — 56 Total other comprehensive income (loss) — 26 495 (18 ) 503 Equity in other comprehensive income (loss) of subsidiaries, net of tax 518 480 506 (1,504 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 3 — 3 Total other comprehensive income (loss) attributable to Aon shareholders 518 506 998 (1,522 ) 500 Comprehensive income (loss) attributable to Aon shareholders $ 1,745 $ 1,003 $ 3,288 $ (4,291 ) $ 1,745 Condensed Consolidating Statement of Comprehensive Income Nine months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated Net income (loss) $ 945 $ 268 $ 1,777 $ (2,019 ) $ 971 Less: Net income attributable to noncontrolling interests — — 27 — 27 Net income (loss) attributable to Aon shareholders 945 268 1,750 (2,019 ) 944 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 1 (12 ) — (11 ) Foreign currency translation adjustments (2 ) 22 (248 ) 1 (227 ) Post-retirement benefit obligation — 23 (155 ) — (132 ) Total other comprehensive income (loss) (2 ) 46 (415 ) 1 (370 ) Equity in other comprehensive income (loss) of subsidiaries, net of tax (369 ) (425 ) (379 ) 1,173 — Less: Other comprehensive income attributable to noncontrolling interests — — — — — Total other comprehensive income (loss) attributable to Aon shareholders (371 ) (379 ) (794 ) 1,174 (370 ) Comprehensive income (loss) attributable to Aon shareholders $ 574 $ (111 ) $ 956 $ (845 ) $ 574 |
Condensed Consolidating Statements of Financial Position | Condensed Consolidating Statement of Financial Position As of September 30, 2017 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ — $ 3,110 $ 802 $ (3,163 ) $ 749 Short-term investments — 1,467 173 — 1,640 Receivables, net — 2 2,066 — 2,068 Fiduciary assets — — 9,292 — 9,292 Intercompany receivables 110 4,860 12,436 (17,406 ) — Other current assets — 37 481 — 518 Current assets of discontinued operations — — — — — Total Current Assets 110 9,476 25,250 (20,569 ) 14,267 Goodwill — — 7,888 — 7,888 Intangible assets, net — — 1,341 — 1,341 Fixed assets, net — — 545 — 545 Deferred tax assets 135 664 173 (407 ) 565 Intercompany receivables 391 261 8,728 (9,380 ) — Prepaid pension — 5 1,015 — 1,020 Other non-current assets 1 49 248 — 298 Investment in subsidiary 11,900 17,748 509 (30,157 ) — Non-current assets of discontinued operations — — — — — TOTAL ASSETS $ 12,537 $ 28,203 $ 45,697 $ (60,513 ) $ 25,924 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 2,929 $ 37 $ 1,785 $ (3,163 ) $ 1,588 Short-term debt and current portion of long-term debt — — 305 — 305 Fiduciary liabilities — — 9,292 — 9,292 Intercompany payables 147 15,951 1,308 (17,406 ) — Other current liabilities 24 54 1,211 — 1,289 Current liabilities of discontinued operations — — — — — Total Current Liabilities 3,100 16,042 13,901 (20,569 ) 12,474 Long-term debt 4,247 1,414 1 — 5,662 Deferred tax liabilities — — 490 (407 ) 83 Pension, other post-retirement and other post-employment liabilities — 1,234 378 — 1,612 Intercompany payables — 8,894 486 (9,380 ) — Other non-current liabilities 15 110 721 — 846 Non-current liabilities of discontinued operations — — — — — TOTAL LIABILITIES 7,362 27,694 15,977 (30,356 ) 20,677 TOTAL AON SHAREHOLDERS’ EQUITY 5,175 509 29,648 (30,157 ) 5,175 Noncontrolling interests — — 72 — 72 TOTAL EQUITY 5,175 509 29,720 (30,157 ) 5,247 TOTAL LIABILITIES AND EQUITY $ 12,537 $ 28,203 $ 45,697 $ (60,513 ) $ 25,924 Condensed Consolidating Statement of Financial Position As of December 31, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ — $ 1,633 $ 655 $ (1,862 ) $ 426 Short-term investments — 140 150 — 290 Receivables, net — 3 2,103 — 2,106 Fiduciary assets — — 8,959 — 8,959 Intercompany receivables 105 1,880 9,825 (11,810 ) — Other current assets — 25 222 — 247 Current assets of discontinued operations — — 1,118 — 1,118 Total Current Assets 105 3,681 23,032 (13,672 ) 13,146 Goodwill — — 7,410 — 7,410 Intangible assets, net — — 1,890 — 1,890 Fixed assets, net — — 550 — 550 Deferred tax assets 134 726 171 (706 ) 325 Intercompany receivables 366 261 8,711 (9,338 ) — Prepaid pension — 5 853 — 858 Other non-current assets 2 119 239 — 360 Investment in subsidiary 10,107 17,131 (356 ) (26,882 ) — Non-current assets of discontinued operations — — 2,076 — 2,076 TOTAL ASSETS $ 10,714 $ 21,923 $ 44,576 $ (50,598 ) $ 26,615 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 585 $ 44 $ 2,837 $ (1,862 ) $ 1,604 Short-term debt and current portion of long-term debt 279 50 7 — 336 Fiduciary liabilities — — 8,959 — 8,959 Intercompany payables 142 10,399 1,269 (11,810 ) — Other current liabilities — 63 593 — 656 Current liabilities of discontinued operations — — 940 — 940 Total Current Liabilities 1,006 10,556 14,605 (13,672 ) 12,495 Long-term debt 4,177 1,413 279 — 5,869 Deferred tax liabilities — — 759 (658 ) 101 Pension, other post-retirement and other post-employment liabilities — 1,356 404 — 1,760 Intercompany payables — 8,877 461 (9,338 ) — Other non-current liabilities 8 77 634 — 719 Non-current liabilities of discontinued operations — — 139 — 139 TOTAL LIABILITIES 5,191 22,279 17,281 (23,668 ) 21,083 TOTAL AON SHAREHOLDERS’ EQUITY 5,523 (356 ) 27,238 (26,930 ) 5,475 Noncontrolling interests — — 57 — 57 TOTAL EQUITY 5,523 (356 ) 27,295 (26,930 ) 5,532 TOTAL LIABILITIES AND EQUITY $ 10,714 $ 21,923 $ 44,576 $ (50,598 ) $ 26,615 |
Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statement of Cash Flows Nine months ended September 30, 2017 Aon Aon Other Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ (135 ) $ 999 $ 987 $ (1,562 ) $ 289 Cash provided by operating activities - discontinued operations — — 64 — 64 CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (135 ) 999 1,051 (1,562 ) 353 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 576 11 (544 ) 43 Payments for investments (16 ) (25 ) (571 ) 557 (55 ) Net purchases of short-term investments - non-fiduciary — (1,328 ) (16 ) — (1,344 ) Acquisition of businesses, net of cash acquired — 1 (173 ) — (172 ) Sale of businesses, net of cash sold — — 4,194 — 4,194 Capital expenditures — — (125 ) — (125 ) Cash provided by (used for) investing activities - continuing operations (16 ) (776 ) 3,320 13 2,541 Cash used for investing activities - discontinued operations — — (19 ) — (19 ) CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (16 ) (776 ) 3,301 13 2,522 CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (1,888 ) — — — (1,888 ) Advances from (to) affiliates 2,722 1,304 (4,274 ) 248 — Issuance of shares for employee benefit plans (118 ) — — — (118 ) Issuance of debt 544 1,100 7 — 1,651 Repayment of debt (835 ) (1,150 ) (13 ) — (1,998 ) Cash dividends to shareholders (274 ) — — — (274 ) Noncontrolling interests and other financing activities — — (21 ) — (21 ) Cash provided by (used for) financing activities - continuing operations 151 1,254 (4,301 ) 248 (2,648 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 151 1,254 (4,301 ) 248 (2,648 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 91 — 91 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS — 1,477 142 (1,301 ) 318 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (1) — 1,633 660 (1,862 ) 431 CASH AND CASH EQUIVALENTS AT END OF PERIOD (2) $ — $ 3,110 $ 802 $ (3,163 ) $ 749 (1) Includes $5 million of discontinued operations at December 31, 2016. (2) There was no cash held by discontinued operations at September 30, 2017 . Condensed Consolidating Statement of Cash Flows Nine months ended September 30, 2016 Other Aon Aon Non-Guarantor Consolidating (millions) plc Corporation Subsidiaries Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ 219 $ (664 ) $ 1,597 $ — $ 1,152 Cash provided by operating activities - discontinued operations — — 323 — 323 CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 219 (664 ) 1,920 — 1,475 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 19 12 — 31 Payments for investments — (25 ) (22 ) — (47 ) Net sales of short-term investments - non-fiduciary — (99 ) (9 ) — (108 ) Acquisition of businesses, net of cash acquired — — (198 ) — (198 ) Sale of businesses, net of cash sold — — 104 — 104 Capital expenditures — — (107 ) — (107 ) Cash provided by (used for) investing activities - continuing operations — (105 ) (220 ) — (325 ) Cash used for investing activities - discontinued operations — — (46 ) — (46 ) CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES — (105 ) (266 ) — (371 ) CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (1,037 ) — — — (1,037 ) Advances from (to) affiliates 166 356 (670 ) 148 — Issuance of shares for employee benefit plans (70 ) — — — (70 ) Issuance of debt 1,588 1,141 — — 2,729 Repayment of debt (608 ) (1,692 ) (8 ) — (2,308 ) Cash dividends to shareholders (258 ) — — — (258 ) Noncontrolling interests and other financing activities — — (71 ) — (71 ) Cash provided by (used for) financing activities - continuing operations (219 ) (195 ) (749 ) 148 (1,015 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (219 ) (195 ) (749 ) 148 (1,015 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 10 — 10 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS — (964 ) 915 148 99 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR(1) — 2,083 1,242 (2,941 ) 384 CASH AND CASH EQUIVALENTS AT END OF PERIOD(2) $ — $ 1,119 $ 2,157 $ (2,793 ) $ 483 (1) Includes $2 million of discontinued operations at December 31, 2015. (2) Includes $3 million of discontinued operations at September 30, 2016. |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | 9 Months Ended |
Sep. 30, 2017segmentrevenue_line | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |
Number of reportable segments | segment | 1 |
Number of revenue lines | 5 |
Commissions, Fees and Other and Fiduciary Investment Income | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |
Number of revenue lines | 1 |
Accounting Principles and Pra41
Accounting Principles and Practices (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of new accounting guidance | $ 49 | ||
Deferred tax assets | $ 565 | $ 565 | 325 |
Excess tax benefit amount | $ 5 | $ 53 | |
Accounting Standards Update 2016-09, Excess Tax Benefit Component | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax assets | 49 | ||
Income (loss) from extraordinary items, tax effect, (in dollars per share) | $ 0.02 | $ 0.20 | |
Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of new accounting guidance | 49 | ||
Retained Earnings | Accounting Standards Update 2016-09, Excess Tax Benefit Component | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of new accounting guidance | $ 49 |
Discontinued Operations (Detail
Discontinued Operations (Details) | May 01, 2017USD ($)agreement | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Dispositions | ||||||||
Cash and cash equivalents | $ 0 | $ 3,000,000 | $ 0 | $ 3,000,000 | $ 5,000,000 | $ 2,000,000 | ||
Tempo Business | ||||||||
Dispositions | ||||||||
Number of commercial agreements | agreement | 2 | |||||||
Tempo Business | Discontinued Operations, Disposed of by Sale | ||||||||
Dispositions | ||||||||
Purchase price | $ 4,300,000,000 | |||||||
Gain on sale of discontinued operations, net of tax | 5,000,000 | 0 | 803,000,000 | 0 | ||||
Depreciation and amortization | 0 | |||||||
Depreciation of fixed assets | 18,000,000 | 8,000,000 | 53,000,000 | |||||
Amortization of intangible assets | $ 30,000,000 | 11,000,000 | $ 90,000,000 | |||||
Cash and cash equivalents | $ 0 | 0 | $ 5,000,000 | |||||
Maximum | Tempo Business | Discontinued Operations, Disposed of by Sale | ||||||||
Dispositions | ||||||||
Purchase price | 4,200,000,000 | |||||||
Deferred consideration | $ 500,000,000 | |||||||
Trade Names | Tempo Business | Discontinued Operations, Disposed of by Sale | ||||||||
Dispositions | ||||||||
Impairment of tradename | $ 380,000,000 | $ 380,000,000 |
Discontinued Operations Income
Discontinued Operations Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Expenses | ||||
Income from discontinued operations, net of tax | $ (4) | $ 42 | $ 857 | $ 102 |
Tempo Business | Discontinued Operations, Disposed of by Sale | ||||
Revenue | ||||
Total revenue | 0 | 559 | 698 | 1,606 |
Expenses | ||||
Total operating expenses | 14 | 491 | 640 | 1,443 |
Operating income from discontinued operations | (14) | 68 | 58 | 163 |
Other income | (1) | (1) | 10 | 0 |
Income from discontinued operations before income taxes | (15) | 67 | 68 | 163 |
Income taxes | (6) | 25 | 14 | 61 |
Income from discontinued operations excluding gain, net of tax | (9) | 42 | 54 | 102 |
Gain on sale of discontinued operations, net of tax | 5 | 0 | 803 | 0 |
Income from discontinued operations, net of tax | $ (4) | $ 42 | $ 857 | $ 102 |
Discontinued Operations Balance
Discontinued Operations Balance Sheet (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 0 | $ 5,000,000 | $ 3,000,000 | $ 2,000,000 |
Receivables, net | 124,000,000 | 0 | ||
Tempo Business | Discontinued Operations, Disposed of by Sale | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 5,000,000 | ||
Receivables, net | 0 | 483,000,000 | ||
Fiduciary assets | 0 | 526,000,000 | ||
Goodwill | 0 | 1,337,000,000 | ||
Intangible assets, net | 0 | 333,000,000 | ||
Fixed assets, net | 0 | 215,000,000 | ||
Other assets | 0 | 295,000,000 | ||
TOTAL ASSETS | 0 | 3,194,000,000 | ||
LIABILITIES | ||||
Accounts payable and accrued liabilities | 0 | 197,000,000 | ||
Fiduciary liabilities | 0 | 526,000,000 | ||
Other liabilities | 0 | 356,000,000 | ||
TOTAL LIABILITIES | $ 0 | $ 1,079,000,000 |
Cash and Cash Equivalents and45
Cash and Cash Equivalents and Short-term Investments (Details) £ in Millions, $ in Millions | 9 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2017GBP (£) | Sep. 30, 2017USD ($) | Dec. 31, 2016GBP (£) | Dec. 31, 2016USD ($) | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |||||
Cash and cash equivalents and short-term investments | $ 2,389 | $ 716 | |||
Cash and cash equivalents and short term investments, period increase (decrease) | $ 1,673 | ||||
Restricted cash | 98 | 82 | |||
Operating funds in U.K. | £ 42.7 | $ 57.5 | £ 43.3 | $ 53.2 |
Other Financial Data - Schedule
Other Financial Data - Schedule of Other Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other (Expense) Income | ||||
Foreign currency remeasurement gain (loss) | $ (20,000,000) | $ 3,000,000 | $ (32,000,000) | $ (14,000,000) |
Gain (loss) on disposal of business | 0 | 0 | (2,000,000) | 41,000,000 |
Equity earnings | 2,000,000 | 4,000,000 | 11,000,000 | 7,000,000 |
Gain (loss) on financial instruments | 16,000,000 | 3,000,000 | 6,000,000 | (7,000,000) |
Other | (3,000,000) | 0 | (3,000,000) | 0 |
Total | $ (5,000,000) | $ 10,000,000 | $ (20,000,000) | $ 27,000,000 |
Other Financial Data - Schedu47
Other Financial Data - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Balance at beginning of period | $ 59 | $ 64 | $ 56 | $ 58 |
Provision charged to Other general expenses | 5 | 4 | 16 | 15 |
Accounts written off, net of recoveries | 0 | (5) | (10) | (11) |
Foreign currency translation | (5) | 0 | (3) | 1 |
Balance at end of period | $ 59 | $ 63 | $ 59 | $ 63 |
Other Financial Data - Schedu48
Other Financial Data - Schedule of Other Current Assets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Other Financial Data [Abstract] | ||
Taxes receivable | $ 208 | $ 100 |
Prepaid expenses | 158 | 102 |
Receivables from Divested Business | 124 | 0 |
Other | 28 | 45 |
Total | $ 518 | $ 247 |
Other Financial Data - Schedu49
Other Financial Data - Schedule of Other Non-current Assets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Other Financial Data [Abstract] | ||
Investments | $ 44 | $ 119 |
Taxes receivable | 88 | 82 |
Other | 166 | 159 |
Total | $ 298 | $ 360 |
Other Financial Data - Schedu50
Other Financial Data - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Other Financial Data [Abstract] | ||
Deferred revenue | $ 331 | $ 199 |
Taxes payable (1) | 537 | 77 |
Other | 421 | 380 |
Total | $ 1,289 | $ 656 |
Other Financial Data - Schedu51
Other Financial Data - Schedule of Other Non-current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Other Financial Data [Abstract] | ||
Taxes payable | $ 333 | $ 288 |
Deferred revenue | 45 | 49 |
Leases | 145 | 136 |
Compensation and benefits | 61 | 56 |
Other | 262 | 190 |
Total | $ 846 | $ 719 |
Acquisitions and Dispositions52
Acquisitions and Dispositions of Businesses - Acquisitions (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)acquisition | Dec. 31, 2016USD ($)acquisition | |
Business Acquisition | ||
Number of business acquired under business combination | acquisition | 8 | 8 |
Assets acquired: | ||
Goodwill | $ 7,888 | $ 7,410 |
2017 Acquisitions | ||
Business Combination, Consideration Transferred [Abstract] | ||
Cash | 164 | |
Deferred and contingent consideration | 32 | |
Aggregate consideration transferred | 196 | |
Assets acquired: | ||
Cash and cash equivalents | 7 | |
Receivables, net | 11 | |
Goodwill | 121 | |
Intangible assets, net | 90 | |
Fixed assets, net | 1 | |
Other assets | 10 | |
Total assets acquired | 240 | |
Liabilities assumed: | ||
Current liabilities | 18 | |
Other non-current liabilities | 26 | |
Total liabilities assumed | 44 | |
Net assets acquired | $ 196 |
Acquisitions and Dispositions53
Acquisitions and Dispositions of Businesses - Dispositions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)disposal | Sep. 30, 2016USD ($)disposal | Sep. 30, 2017USD ($)disposal | Sep. 30, 2016USD ($)disposal | |
Dispositions | ||||
Gain (loss) on disposal of business | $ | $ 0 | $ 0 | $ (2,000,000) | $ 41,000,000 |
Disposal Group, Not Discontinued Operations [Member] | ||||
Dispositions | ||||
Number of dispositions | disposal | 0 | 0 | 4 | 4 |
Restructuring Narrative (Detail
Restructuring Narrative (Details) - 2017 Plan $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($)job_elimination | |
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | $ 750 | $ 750 |
Number of positions eliminated to date | job_elimination | 2,125 | |
Costs incurred | 102 | $ 401 |
Workforce reduction | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 303 | 303 |
Costs incurred | 52 | 257 |
Technology rationalization | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 146 | 146 |
Costs incurred | 12 | 22 |
Lease consolidation | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 80 | 80 |
Costs incurred | 4 | 8 |
Asset impairments | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 40 | 40 |
Costs incurred | 2 | 26 |
Other Restructuring | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 181 | 181 |
Costs incurred | 32 | 88 |
Non-cash charges for asset impairments and lease consolidations | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | $ 50 | $ 50 |
Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected number of positions eliminated | job_elimination | 2,400 | |
Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected number of positions eliminated | job_elimination | 2,850 |
Restructuring - Schedule of Re
Restructuring - Schedule of Restructuring and Related Expenses (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Estimated Remaining Costs | $ 349 | $ 349 |
2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 102 | 401 |
Expected total cost | 750 | 750 |
Workforce reduction | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 52 | 257 |
Estimated Remaining Costs | 46 | 46 |
Expected total cost | 303 | 303 |
Technology rationalization | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 12 | 22 |
Estimated Remaining Costs | 124 | 124 |
Expected total cost | 146 | 146 |
Contract termination costs incurred | 1 | 1 |
Expected contract termination cost remaining | 10 | 10 |
Lease consolidation | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 4 | 8 |
Estimated Remaining Costs | 72 | 72 |
Expected total cost | 80 | 80 |
Contract termination costs incurred | 3 | 8 |
Expected contract termination cost remaining | 80 | 80 |
Asset impairments | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 2 | 26 |
Estimated Remaining Costs | 14 | 14 |
Expected total cost | 40 | 40 |
Other Restructuring | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 32 | 88 |
Estimated Remaining Costs | 93 | 93 |
Expected total cost | 181 | 181 |
Contract termination costs incurred | 1 | |
Expected contract termination cost remaining | $ 10 | $ 10 |
Restructuring - Schedule of 56
Restructuring - Schedule of Restructuring Reserve (Details) - 2017 Plan $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring Plan | |
Balance as of December 31, 2016 | $ 0 |
Expensed | 369 |
Cash payments | (199) |
Foreign currency translation and other | 17 |
Balance as of September 30, 2017 | $ 187 |
Goodwill and Other Intangible57
Goodwill and Other Intangible Assets Rollforward (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Changes in the net carrying amount of goodwill by operating segment | |
Beginning balance | $ 7,410 |
Goodwill related to current year acquisitions | 121 |
Goodwill related to disposals | (1) |
Goodwill related to prior year acquisitions | (6) |
Foreign currency translation | 364 |
Ending balance | $ 7,888 |
Goodwill and Other Intangible58
Goodwill and Other Intangible Assets (Details 2) $ / shares in Units, $ in Millions | May 01, 2017 | Sep. 30, 2017USD ($)$ / shares | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2017USD ($)segment$ / shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Intangible assets with finite lives | ||||||||
Gross Carrying Amount | $ 3,529 | $ 3,529 | $ 3,529 | $ 3,397 | ||||
Accumulated Amortization and Impairment | 2,188 | 2,188 | 2,188 | 1,507 | ||||
Net Carrying Amount | 1,341 | $ 1,341 | $ 1,341 | 1,890 | ||||
Number of segments | segment | 1 | 1 | ||||||
Brand transition period | 3 years | |||||||
Amortization and impairment of intangible assets | 101 | $ 42 | $ 604 | $ 117 | ||||
Estimated amortization for intangible assets | ||||||||
Remainder of 2017 | 117 | $ 117 | 117 | |||||
2,018 | 376 | 376 | 376 | |||||
2,019 | 357 | 357 | 357 | |||||
2,020 | 196 | 196 | 196 | |||||
2,021 | 89 | 89 | 89 | |||||
Thereafter | 206 | 206 | 206 | |||||
Total | 1,341 | 1,341 | 1,341 | |||||
Customer related and contract based | ||||||||
Intangible assets with finite lives | ||||||||
Gross Carrying Amount | 2,104 | 2,104 | 2,104 | 2,023 | ||||
Accumulated Amortization and Impairment | 1,380 | 1,380 | 1,380 | 1,198 | ||||
Net Carrying Amount | 724 | 724 | 724 | 825 | ||||
Tradenames | ||||||||
Intangible assets with finite lives | ||||||||
Gross Carrying Amount | 1,041 | 1,041 | 1,041 | 1,027 | ||||
Accumulated Amortization and Impairment | 478 | 478 | 478 | 7 | ||||
Net Carrying Amount | 563 | 563 | 563 | 1,020 | ||||
Finite-lived intangible asset, useful life | 3 years | |||||||
Technology and other | ||||||||
Intangible assets with finite lives | ||||||||
Gross Carrying Amount | 384 | 384 | 384 | 347 | ||||
Accumulated Amortization and Impairment | 330 | 330 | 330 | 302 | ||||
Net Carrying Amount | 54 | $ 54 | 54 | 45 | ||||
Gross intangible assets reclassified | 29 | |||||||
Accumulated amortization reclassified | $ 7 | |||||||
Discontinued Operations, Disposed of by Sale | Tempo Business | Tradenames | ||||||||
Intangible assets with finite lives | ||||||||
Impairment of tradename | $ 380 | 380 | ||||||
Indefinite-lived intangible assets, additional amortization expense | $ 34 | $ 56 | ||||||
Additional amortization per share (in dollars per share) | $ / shares | $ 0.13 | $ 0.21 |
Debt Narrative (Details)
Debt Narrative (Details) CAD in Millions | 9 Months Ended | ||||
Sep. 30, 2017USD ($)credit_facilityprogram | Oct. 19, 2017USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2017CAD | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |||||
Short-term debt and current portion of long-term debt | $ 305,000,000 | $ 336,000,000 | |||
Number of credit facilities | credit_facility | 1 | ||||
Number of commercial paper programs | program | 2 | ||||
4.76% Senior Notes Due March 2018 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Short-term debt and current portion of long-term debt | $ 304,000,000 | CAD 375 | |||
Debt interest rate percentage (as a percent) | 4.76% | ||||
Credit Facility Expiring February 2021 | |||||
Debt Instrument [Line Items] | |||||
Borrowings | $ 0 | ||||
Foreign Line of Credit | 2020 Facility | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 900,000,000 | ||||
Credit Facility Expiring March 2017 | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 | ||||
Commercial paper | Commercial Paper Programs | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 1,300,000,000 | ||||
Line of credit facility, current borrowing capacity | $ 900,000,000 | ||||
Subsequent Event | Credit Facility Expiring October 2022 | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 |
Debt Schedule of Commercial Pap
Debt Schedule of Commercial Paper (Details) - Commercial paper - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||||
Commercial paper outstanding | $ 0 | $ 0 | $ 329 | ||
Weighted average commercial paper outstanding | $ 0 | $ 271 | $ 227 | $ 251 | |
Weighted average interest rate of commercial paper outstanding | 0.00% | 0.02% | 0.18% | 0.27% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 2.00% | 8.10% | (49.80%) | 12.80% |
Income tax expense (benefit) | $ 4 | $ 25 | $ (139) | $ 127 |
Income from continuing operations before income taxes | $ 200 | $ 309 | $ 279 | $ 996 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 66 Months Ended | |||||
Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Feb. 28, 2017 | Nov. 30, 2014 | Apr. 30, 2012 | |
Common Stock Programs | |||||||||
Shares purchased (in shares) | 104,700,000 | ||||||||
Total cost of shares purchased | $ 1,913,000,000 | $ 9,100,000,000 | |||||||
Treasury stock acquired, additional transaction costs | $ 3,800,000 | $ 9,500,000 | |||||||
Weighted average shares outstanding | |||||||||
Shares for basic earnings per share (in shares) | 255,600,000 | 267,500,000 | 260,900,000 | 269,100,000 | |||||
Dilutive effect of potentially issuable shares (in shares) | 1,700,000 | 2,100,000 | 2,000,000 | 1,900,000 | |||||
Shares for diluted earnings per share (in shares) | 257,300,000 | 269,600,000 | 262,900,000 | 271,000,000 | |||||
Number of shares excluded from the calculation of diluted earnings per share (in shares) | 0 | 0 | 0 | 0 | |||||
Share Repurchase Program of 2014 | |||||||||
Common Stock Programs | |||||||||
Share repurchase authorization limit (up to) | $ 15,000,000,000 | $ 15,000,000,000 | 15,000,000,000 | $ 5,000,000,000 | $ 5,000,000,000 | ||||
Share repurchase, remaining authorization limit (in shares) | $ 5,900,000,000 | $ 5,900,000,000 | $ 5,900,000,000 | ||||||
2012 - Share Repurchase Program | |||||||||
Common Stock Programs | |||||||||
Share repurchase authorization limit (up to) | $ 5,000,000,000 | ||||||||
Shares purchased (in shares) | 5,400,000 | 2,700,000 | 14,500,000 | 10,400,000 | |||||
Average price per share of stock repurchased (in dollars per share) | $ 139.61 | $ 110.26 | $ 131.58 | $ 101.16 | |||||
Total cost of shares purchased | $ 749,000,000 | $ 301,000,000 | $ 1,900,000,000 | $ 1,100,000,000 | |||||
Subsequent Event | 2012 - Share Repurchase Program | |||||||||
Common Stock Programs | |||||||||
Shares purchased (in shares) | 165,000 | ||||||||
Average price per share of stock repurchased (in dollars per share) | $ 146.52 | ||||||||
Total cost of shares purchased | $ 24,200,000 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 5,247 | $ 5,247 | $ 5,532 | ||
Other comprehensive income (loss) before reclassifications, net | 455 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 67 | ||||
Tax benefit (expense) | (22) | ||||
Amounts reclassified from accumulated other comprehensive income (loss), net | 45 | ||||
Total other comprehensive income (loss) attributable to Aon shareholders | 265 | $ (71) | 500 | $ (370) | |
Total | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (3,412) | (3,412) | (3,912) | ||
Change in Fair Value of Financial Instruments | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (24) | (24) | (37) | ||
Other comprehensive income (loss) before reclassifications, net | 13 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | (2) | ||||
Tax benefit (expense) | 2 | ||||
Amounts reclassified from accumulated other comprehensive income (loss), net | 0 | ||||
Total other comprehensive income (loss) attributable to Aon shareholders | 13 | ||||
Foreign Currency Translation Adjustments | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (833) | (833) | (1,264) | ||
Other comprehensive income (loss) before reclassifications, net | 442 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | (11) | ||||
Tax benefit (expense) | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss), net | (11) | ||||
Total other comprehensive income (loss) attributable to Aon shareholders | 431 | ||||
Post-Retirement Benefit Obligation | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ (2,555) | (2,555) | $ (2,611) | ||
Other comprehensive income (loss) before reclassifications, net | 0 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 80 | ||||
Tax benefit (expense) | (24) | ||||
Amounts reclassified from accumulated other comprehensive income (loss), net | 56 | ||||
Total other comprehensive income (loss) attributable to Aon shareholders | $ 56 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
U.K. | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 31 | 37 | 91 | 123 |
Expected return on plan assets, net of administration expenses | (50) | (58) | (147) | (187) |
Amortization of prior-service cost | 0 | 0 | 0 | 1 |
Amortization of net actuarial loss | 8 | 7 | 23 | 24 |
Net periodic cost (benefit) | (11) | (14) | (33) | (39) |
Loss on pension settlement | 0 | 0 | 0 | 61 |
Total net periodic cost (benefit) | (11) | (14) | (33) | 22 |
Estimate of contributions to defined benefit pension plans for the current fiscal year | 80 | 80 | ||
Contributions made to defined benefit pension plans | 22 | 19 | 64 | 53 |
U.S. | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 24 | 28 | 72 | 83 |
Expected return on plan assets, net of administration expenses | (34) | (39) | (104) | (117) |
Amortization of prior-service cost | 0 | 1 | 1 | 2 |
Amortization of net actuarial loss | 13 | 12 | 38 | 37 |
Net periodic cost (benefit) | 3 | 2 | 7 | 5 |
Loss on pension settlement | 0 | 0 | 0 | 0 |
Total net periodic cost (benefit) | 3 | 2 | 7 | 5 |
Estimate of contributions to defined benefit pension plans for the current fiscal year | 51 | 51 | ||
Non-cash contributions by employer | 80 | 80 | ||
Contributions made to defined benefit pension plans | 5 | 5 | 31 | 24 |
Other International Plan [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 7 | 7 | 19 | 21 |
Expected return on plan assets, net of administration expenses | (13) | (12) | (35) | (36) |
Amortization of prior-service cost | 0 | 0 | 0 | 0 |
Amortization of net actuarial loss | 3 | 3 | 9 | 8 |
Net periodic cost (benefit) | (3) | (2) | (7) | (7) |
Loss on pension settlement | 0 | 0 | 0 | 0 |
Total net periodic cost (benefit) | (3) | (2) | (7) | (7) |
Estimate of contributions to defined benefit pension plans for the current fiscal year | 18 | 18 | ||
Contributions made to defined benefit pension plans | $ 3 | $ 4 | $ 14 | $ 14 |
Share-Based Compensation Plan65
Share-Based Compensation Plans - Share-based compensation expenses recognized (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 67 | $ 66 | $ 214 | $ 210 |
Restricted share units (“RSUs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 42 | 40 | 143 | 136 |
Performance share awards (“PSAs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 22 | 24 | 63 | 67 |
Employee share purchase plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 3 | $ 2 | $ 8 | $ 7 |
Share-Based Compensation Plan66
Share-Based Compensation Plans - Restricted share unit activity (Details) - Restricted share units (“RSUs”) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Non-vested share awards (in shares) | |||
Non-vested at beginning of period (in shares) | 6,195 | 7,167 | 7,167 |
Granted (in shares) | 1,549 | 2,110 | |
Vested (in shares) | (2,294) | (2,729) | |
Forfeited (in shares) | (590) | (333) | |
Non-vested at end of period (in shares) | 4,860 | 6,215 | 6,195 |
Weighted Average Fair value | |||
Non-vested at beginning of period (in dollars per share) | $ 89 | $ 77 | $ 77 |
Granted (in dollars per share) | 122 | 101 | |
Vested (in dollars per share) | 82 | 70 | |
Forfeited (in dollars per share) | 92 | 81 | |
Non-vested at end of period (in dollars per share) | $ 102 | $ 88 | $ 89 |
Unamortized deferred compensation expense | $ 367 | ||
Remaining weighted-average amortization period (in years) | 2 years 1 month 6 days | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years |
Share-Based Compensation Plan67
Share-Based Compensation Plans - Performance Share Awards Narrative (Details) - Performance Shares | 9 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting conditions period (in years) | 3 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued, percent | 0.00% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued, percent | 200.00% |
Share-Based Compensation Plan68
Share-Based Compensation Plans - Schedule of Performance-based plans (Details) - Performance Shares - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target PSAs granted during period (in shares) | 548 | 752 | 967 |
Weighted average fair value per share at date of grant (in dollars per share) | $ 114 | $ 100 | $ 96 |
Number of shares that would be issued based on current performance levels (in shares) | 544 | 663 | 1,362 |
Unamortized expense, based on current performance levels | $ 51 | $ 27 | $ 11 |
Derivatives and Hedging - Forei
Derivatives and Hedging - Foreign Exchange Risk Management Narrative (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Cash Flow Hedging | |
Derivative [Line Items] | |
Foreign currency exposures, maximum average hedging period (less than) | 2 years |
Not Designated as Hedging Instrument | |
Derivative [Line Items] | |
Foreign currency exposures, maximum hedging period (up to) | 1 year |
Derivatives and Hedging - Inter
Derivatives and Hedging - Interest Rate Management Risk Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative [Line Items] | ||||
Estimated pretax losses currently included within Accumulated Other Comprehensive Loss that will be reclassified to earnings in next twelve months | $ 11 | $ 11 | ||
Not Designated as Hedging Instrument | Foreign exchange contracts | ||||
Derivative [Line Items] | ||||
Derivative gain (loss) | $ 8 | $ 2 | $ 9 | $ 1 |
Derivatives and Hedging - Notio
Derivatives and Hedging - Notional and fair values of derivative instruments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value | ||
Notional Amount | $ 956 | $ 947 |
Derivative Assets | 31 | 15 |
Derivative Liabilities | $ 5 | 14 |
Term of derivative contract | 30 days | |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Assets | $ 6 | 6 |
Amount not offset against collateral, derivative asset | 6 | 4 |
Other Noncurrent Assets | ||
Derivatives, Fair Value | ||
Derivative Assets | 25 | 9 |
Amount not offset against collateral, derivative asset | 25 | 9 |
Other Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 3 | 7 |
Amount not offset against collateral, derivative liabilities | 2 | 5 |
Other Noncurrent Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 2 | 7 |
Amount not offset against collateral, derivative liabilities | 1 | 7 |
Derivatives accounted for as hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Notional Amount | 711 | 758 |
Derivative Assets | 31 | 14 |
Derivative Liabilities | 3 | 13 |
Gross Amounts Offset in the Statement of Financial Position | 0 | (1) |
Net Amounts of Assets Presented in the Statement of Financial Position | 31 | 13 |
Gross Amounts Offset in the Statement of Financial Position | 0 | (1) |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 3 | 12 |
Not Designated as Hedging Instrument | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Notional Amount | 245 | 189 |
Derivative Assets | 0 | 1 |
Derivative Liabilities | $ 2 | $ 1 |
Derivatives and Hedging - Sched
Derivatives and Hedging - Schedule of amounts of derivative gains (losses) recognized in the Consolidated Financial Statements (Details) - Cash Flow Hedging - Foreign exchange contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative [Line Items] | ||||
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss | $ 11 | $ (1) | $ 18 | $ (19) |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | (3) | (2) | 3 | (6) |
Compensation and benefits | ||||
Derivative [Line Items] | ||||
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss | 0 | 10 | 9 | 8 |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | 1 | 1 | 14 | 2 |
Other General Expenses | ||||
Derivative [Line Items] | ||||
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss | 3 | (4) | 5 | (9) |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | (1) | (1) | (3) | (2) |
Interest Expense | ||||
Derivative [Line Items] | ||||
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss | 0 | 0 | 0 | 0 |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | 0 | 0 | (1) | (1) |
Other Income (Expense) | ||||
Derivative [Line Items] | ||||
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss | 8 | (7) | 4 | (18) |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | $ (3) | $ (2) | $ (7) | $ (5) |
Derivatives and Hedging - For73
Derivatives and Hedging - Foreign Hedge (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of hedge of net investment of foreign operations | $ 0 |
Effective portion of gain reclassified from Accumulated OCI into income | $ 0 |
Fair Value Measurements and F74
Fair Value Measurements and Financial Instruments - Schedule of assets and liabilities that are measured at fair value on a recurring basis (Details) - Recurring - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Money market funds and highly liquid debt securities | ||
Assets: | ||
Money market funds and highly liquid debt securities | $ 3,091 | $ 1,371 |
Government bonds | ||
Assets: | ||
Other investments: | 1 | 1 |
Equity investments | ||
Assets: | ||
Other investments: | 11 | 9 |
Foreign exchange contracts | ||
Assets: | ||
Derivatives | 31 | 15 |
Liabilities: | ||
Derivatives: (2) | 5 | 14 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds and highly liquid debt securities | ||
Assets: | ||
Money market funds and highly liquid debt securities | 3,091 | 1,371 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Government bonds | ||
Assets: | ||
Other investments: | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity investments | ||
Assets: | ||
Other investments: | 7 | 6 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives: (2) | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Money market funds and highly liquid debt securities | ||
Assets: | ||
Money market funds and highly liquid debt securities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Government bonds | ||
Assets: | ||
Other investments: | 1 | 1 |
Significant Other Observable Inputs (Level 2) | Equity investments | ||
Assets: | ||
Other investments: | 4 | 3 |
Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ||
Assets: | ||
Derivatives | 31 | 15 |
Liabilities: | ||
Derivatives: (2) | 5 | 14 |
Significant Unobservable Inputs (Level 3) | Money market funds and highly liquid debt securities | ||
Assets: | ||
Money market funds and highly liquid debt securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Government bonds | ||
Assets: | ||
Other investments: | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity investments | ||
Assets: | ||
Other investments: | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Foreign exchange contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives: (2) | $ 0 | $ 0 |
Fair Value Measurements and F75
Fair Value Measurements and Financial Instruments - Schedule of financial instruments where the carrying amounts and fair values differ (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying Value | ||
Fair value of financial instrument | ||
Current portion of long-term debt | $ 305 | $ 0 |
Long-term debt | 5,662 | 5,869 |
Fair Value | Fair Value, Inputs, Level 2 | ||
Fair value of financial instrument | ||
Current portion of long-term debt | 309 | 0 |
Long-term debt | $ 6,227 | $ 6,264 |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) £ in Millions, NZD in Millions | Oct. 03, 2017NZD | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Dec. 20, 2016GBP (£) | Jun. 29, 2015NZD | Jan. 31, 2015USD ($) | Jan. 26, 2015USD ($) | Jan. 26, 2015CHF (SFr) | Dec. 31, 2014USD ($) | Dec. 02, 2014USD ($) | Dec. 02, 2014CHF (SFr) | Sep. 14, 2010USD ($) | Jun. 01, 2007USD ($) | Jun. 01, 2007CHF (SFr) | Aug. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014CHF (SFr) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Apr. 30, 2014GBP (£) |
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Revenue | $ 2,340,000,000 | $ 2,201,000,000 | $ 7,089,000,000 | $ 6,759,000,000 | ||||||||||||||||||||
Maximum potential funding under commitments | $ 76,000,000 | 76,000,000 | 76,000,000 | $ 95,000,000 | ||||||||||||||||||||
Letters of credit outstanding | 94,000,000 | 94,000,000 | 94,000,000 | 90,000,000 | ||||||||||||||||||||
Potential Claim for Pension Advisory Services | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Estimate of possible loss | 61,000,000 | 61,000,000 | 61,000,000 | £ 45 | ||||||||||||||||||||
Opry Mills Mall Limited Partnership | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Damages sought | $ 200,000,000 | |||||||||||||||||||||||
Amount of coverage for damages contended by the insurers | 50,000,000 | |||||||||||||||||||||||
Difference amount of damages sought by the client | $ 150,000,000 | |||||||||||||||||||||||
Damages awarded | $ 204,000,000 | $ 200,000,000 | ||||||||||||||||||||||
International Road Transport Union | Litigation Award | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Damages sought | $ 47,000,000 | SFr 46,000,000 | ||||||||||||||||||||||
Damages awarded | $ 28,000,000 | SFr 27,900,000 | ||||||||||||||||||||||
Damages awarded excluding interest and costs | 17,000,000 | SFr 16,800,000 | ||||||||||||||||||||||
Case settlement amount | $ 14,000,000 | SFr 12,800,000 | ||||||||||||||||||||||
Settlement, maximum liability | $ 15,000,000 | SFr 15,000,000 | ||||||||||||||||||||||
International Road Transport Union | Litigation USD Denominated Award | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Damages sought | $ 3,000,000 | |||||||||||||||||||||||
Damages awarded | $ 5,000,000 | |||||||||||||||||||||||
Damages awarded excluding interest and costs | $ 3,100,000 | |||||||||||||||||||||||
Case settlement amount | $ 4,700,000 | |||||||||||||||||||||||
Settlement, maximum liability | $ 344,000 | |||||||||||||||||||||||
International Road Transport Union | Litigation Expenses and Interest | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Damages sought | $ 30,000,000 | |||||||||||||||||||||||
Pending Litigation | Trustees Of Gleeds Pension Fund 2016 | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Estimate of possible loss | 94,000,000 | 94,000,000 | 94,000,000 | |||||||||||||||||||||
Damages sought | £ | £ 70 | |||||||||||||||||||||||
Pending Litigation | Lyttleton Port Company Limited | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Damages sought | 133,000,000 | NZD 184 | ||||||||||||||||||||||
Pending Litigation | Christchurch City Council | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Damages sought | 381,000,000 | |||||||||||||||||||||||
Minimum | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Estimate of possible loss | 0 | 0 | 0 | |||||||||||||||||||||
Maximum | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Estimate of possible loss | 300,000,000 | 300,000,000 | 300,000,000 | |||||||||||||||||||||
Aviation and Aerospace Broking Industry | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Revenue | $ 100,000,000 | |||||||||||||||||||||||
Discontinued Operations, Disposed of by Sale | Tempo Business | Property Lease Guarantee | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Guarantor obligations, current carrying value | 25,000,000 | 25,000,000 | 25,000,000 | |||||||||||||||||||||
Loss contingency accrual payments | 0 | 0 | ||||||||||||||||||||||
Maximum potential funding under commitments | 104,000,000 | 104,000,000 | 104,000,000 | |||||||||||||||||||||
Discontinued Operations, Disposed of by Sale | Tempo Business | Performance Guarantee | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Guarantor obligations, current carrying value | 4,000,000 | 4,000,000 | 4,000,000 | |||||||||||||||||||||
Loss contingency accrual payments | 0 | 0 | ||||||||||||||||||||||
Maximum potential funding under commitments | $ 395,000,000 | $ 395,000,000 | $ 395,000,000 | |||||||||||||||||||||
Subsequent Event | Pending Litigation | Christchurch City Council | ||||||||||||||||||||||||
Legal, Guarantees and Indemnifications | ||||||||||||||||||||||||
Damages sought | NZD | NZD 528 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 5 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017segment | Sep. 30, 2017USD ($)segmentrevenue_line | Sep. 30, 2016USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 1 | ||||
Number of revenue lines | revenue_line | 5 | ||||
Number of operating segments | segment | 1 | 1 | |||
Total revenue | $ 2,340 | $ 2,201 | $ 7,089 | $ 6,759 | |
Intersegment Eliminations | |||||
Segment Reporting Information | |||||
Total revenue | (5) | (3) | (9) | (6) | |
Commercial Risk Solutions | Operating Segments | |||||
Segment Reporting Information | |||||
Total revenue | 917 | 884 | 2,943 | 2,835 | |
Reinsurance Solutions | Operating Segments | |||||
Segment Reporting Information | |||||
Total revenue | 355 | 329 | 1,070 | 1,032 | |
Retirement Solutions | Operating Segments | |||||
Segment Reporting Information | |||||
Total revenue | 491 | 466 | 1,266 | 1,266 | |
Health Solutions | Operating Segments | |||||
Segment Reporting Information | |||||
Total revenue | 293 | 265 | 977 | 838 | |
Data & Analytic Services | Operating Segments | |||||
Segment Reporting Information | |||||
Total revenue | $ 289 | $ 260 | $ 842 | $ 794 |
Guarantee of Registered Secur78
Guarantee of Registered Securities (Narrative) (Details) | Sep. 30, 2017 |
Aon plc | |
Condensed Financial Statements, Captions [Line Items] | |
Parent company's percentage ownership of guarantors | 100.00% |
5.00% Senior notes due September 2020 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 5.00% |
8.205% Junior subordinated deferrable interest debentures due January 2027 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 8.205% |
6.25% Senior notes due September 2040 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 6.25% |
4.250% Senior notes due 2042 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 4.25% |
4.45% notes due 2043 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 4.45% |
4.00% notes due 2023 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 4.00% |
2.875% notes due 2026 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 2.875% |
3.50% Notes due June 2024 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 3.50% |
4.60% notes due May 2044 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 4.60% |
4.75% Notes Due May 2045 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 4.75% |
2.80% Senior Notes Due 2021 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 2.80% |
3.875% due in December 2025 | |
Condensed Financial Statements, Captions [Line Items] | |
Debt interest rate percentage (as a percent) | 3.875% |
Guarantee of Registered Secur79
Guarantee of Registered Securities - Condensed Consolidating Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue | ||||
Total revenue | $ 2,340 | $ 2,201 | $ 7,089 | $ 6,759 |
Expenses | ||||
Compensation and benefits | 1,419 | 1,300 | 4,337 | 4,041 |
Information technology | 109 | 99 | 295 | 281 |
Premises | 89 | 86 | 259 | 257 |
Depreciation of fixed assets | 40 | 39 | 148 | 118 |
Amortization and impairment of intangible assets | 101 | 42 | 604 | 117 |
Other general expenses | 317 | 267 | 956 | 770 |
Total operating expenses | 2,075 | 1,833 | 6,599 | 5,584 |
Operating income | 265 | 368 | 490 | 1,175 |
Interest income | 10 | 1 | 20 | 6 |
Interest expense | (70) | (70) | (211) | (212) |
Intercompany interest income (expense) | 0 | 0 | 0 | 0 |
Intercompany other income (expense) | 0 | 0 | 0 | 0 |
Other income (expense) | (5) | 10 | (20) | 27 |
Income from continuing operations before income taxes | 200 | 309 | 279 | 996 |
Income tax benefit (expense) | 4 | 25 | (139) | 127 |
Net income from continuing operations | 196 | 284 | 418 | 869 |
Income (loss) from discontinued operations, net of tax | (4) | 42 | 857 | 102 |
Net income (loss) before equity in earnings of subsidiaries | 192 | 326 | 1,275 | 971 |
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | 0 |
Net income | 192 | 326 | 1,275 | 971 |
Less: Net income attributable to noncontrolling interests | 7 | 7 | 30 | 27 |
Net income attributable to Aon shareholders | 185 | 319 | 1,245 | 944 |
Aon plc | ||||
Revenue | ||||
Total revenue | 0 | 0 | 0 | 0 |
Expenses | ||||
Compensation and benefits | 25 | 25 | 85 | 76 |
Information technology | 0 | 0 | 0 | 0 |
Premises | 0 | 0 | 0 | 0 |
Depreciation of fixed assets | 0 | 0 | 0 | 0 |
Amortization and impairment of intangible assets | 0 | 0 | 0 | 0 |
Other general expenses | 1 | (1) | 10 | 5 |
Total operating expenses | 26 | 24 | 95 | 81 |
Operating income | (26) | (24) | (95) | (81) |
Interest income | 0 | 0 | 0 | 0 |
Interest expense | (53) | (51) | (144) | (145) |
Intercompany interest income (expense) | 3 | 3 | 10 | 10 |
Intercompany other income (expense) | 291 | 328 | 189 | 217 |
Other income (expense) | (2) | (5) | (25) | (3) |
Income from continuing operations before income taxes | 213 | 251 | (65) | (2) |
Income tax benefit (expense) | (8) | 13 | (30) | (33) |
Net income from continuing operations | 221 | 238 | (35) | 31 |
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Net income (loss) before equity in earnings of subsidiaries | 221 | 238 | (35) | 31 |
Equity in earnings of subsidiaries, net of tax | (36) | 78 | 1,262 | 914 |
Net income | 185 | 316 | 1,227 | 945 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Aon shareholders | 185 | 316 | 1,227 | 945 |
Aon Corporation | ||||
Revenue | ||||
Total revenue | 0 | 0 | 0 | 0 |
Expenses | ||||
Compensation and benefits | 20 | 4 | 31 | 10 |
Information technology | 0 | 0 | 0 | 0 |
Premises | 0 | 0 | 0 | 0 |
Depreciation of fixed assets | 0 | 0 | 0 | 0 |
Amortization and impairment of intangible assets | 0 | 0 | 0 | 0 |
Other general expenses | 1 | 3 | (3) | 7 |
Total operating expenses | 21 | 7 | 28 | 17 |
Operating income | (21) | (7) | (28) | (17) |
Interest income | 18 | 4 | 35 | 13 |
Interest expense | (24) | (24) | (71) | (78) |
Intercompany interest income (expense) | (135) | (135) | (407) | (405) |
Intercompany other income (expense) | (271) | (277) | (280) | (292) |
Other income (expense) | 14 | 1 | 22 | (8) |
Income from continuing operations before income taxes | (419) | (438) | (729) | (787) |
Income tax benefit (expense) | (81) | (93) | (198) | (219) |
Net income from continuing operations | (338) | (345) | (531) | (568) |
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Net income (loss) before equity in earnings of subsidiaries | (338) | (345) | (531) | (568) |
Equity in earnings of subsidiaries, net of tax | 122 | 225 | 1,028 | 836 |
Net income | (216) | (120) | 497 | 268 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Aon shareholders | (216) | (120) | 497 | 268 |
Other Non-Guarantor Subsidiaries | ||||
Revenue | ||||
Total revenue | 2,340 | 2,201 | 7,089 | 6,759 |
Expenses | ||||
Compensation and benefits | 1,374 | 1,271 | 4,221 | 3,955 |
Information technology | 109 | 99 | 295 | 281 |
Premises | 89 | 86 | 259 | 257 |
Depreciation of fixed assets | 40 | 39 | 148 | 118 |
Amortization and impairment of intangible assets | 101 | 42 | 604 | 117 |
Other general expenses | 315 | 265 | 949 | 758 |
Total operating expenses | 2,028 | 1,802 | 6,476 | 5,486 |
Operating income | 312 | 399 | 613 | 1,273 |
Interest income | 0 | 5 | 0 | 14 |
Interest expense | (1) | (3) | (11) | (10) |
Intercompany interest income (expense) | 132 | 132 | 397 | 395 |
Intercompany other income (expense) | (20) | (51) | 91 | 75 |
Other income (expense) | (17) | 11 | (35) | 39 |
Income from continuing operations before income taxes | 406 | 493 | 1,055 | 1,786 |
Income tax benefit (expense) | 93 | 105 | 89 | 379 |
Net income from continuing operations | 313 | 388 | 966 | 1,407 |
Income (loss) from discontinued operations, net of tax | (4) | 42 | 857 | 102 |
Net income (loss) before equity in earnings of subsidiaries | 309 | 430 | 1,823 | 1,509 |
Equity in earnings of subsidiaries, net of tax | (216) | (120) | 497 | 268 |
Net income | 93 | 310 | 2,320 | 1,777 |
Less: Net income attributable to noncontrolling interests | 7 | 7 | 30 | 27 |
Net income attributable to Aon shareholders | 86 | 303 | 2,290 | 1,750 |
Consolidation Adjustments | ||||
Revenue | ||||
Total revenue | 0 | 0 | 0 | 0 |
Expenses | ||||
Compensation and benefits | 0 | 0 | 0 | 0 |
Information technology | 0 | 0 | 0 | 0 |
Premises | 0 | 0 | 0 | 0 |
Depreciation of fixed assets | 0 | 0 | 0 | 0 |
Amortization and impairment of intangible assets | 0 | 0 | 0 | 0 |
Other general expenses | 0 | 0 | 0 | 0 |
Total operating expenses | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest income | (8) | (8) | (15) | (21) |
Interest expense | 8 | 8 | 15 | 21 |
Intercompany interest income (expense) | 0 | 0 | 0 | 0 |
Intercompany other income (expense) | 0 | 0 | 0 | 0 |
Other income (expense) | 0 | 3 | 18 | (1) |
Income from continuing operations before income taxes | 0 | 3 | 18 | (1) |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Net income from continuing operations | 0 | 3 | 18 | (1) |
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Net income (loss) before equity in earnings of subsidiaries | 0 | 3 | 18 | (1) |
Equity in earnings of subsidiaries, net of tax | 130 | (183) | (2,787) | (2,018) |
Net income | 130 | (180) | (2,769) | (2,019) |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Aon shareholders | $ 130 | $ (180) | $ (2,769) | $ (2,019) |
Guarantee of Registered Secur80
Guarantee of Registered Securities - Condensed Consolidating Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | $ 192 | $ 326 | $ 1,275 | $ 971 |
Net income (loss) before equity in earnings of subsidiaries | 192 | 326 | 1,275 | 971 |
Less: Net income attributable to noncontrolling interests | 7 | 7 | 30 | 27 |
Net income attributable to Aon shareholders | 185 | 319 | 1,245 | 944 |
Change in fair value of financial instruments | 11 | 0 | 13 | (11) |
Foreign currency translation adjustments | 243 | (89) | 434 | (227) |
Postretirement benefit obligation | 18 | 18 | 56 | (132) |
Total other comprehensive (loss) income | 272 | (71) | 503 | (370) |
Equity in other comprehensive income (loss) of subsidiaries, net of tax | 0 | 0 | 0 | 0 |
Less: Other comprehensive loss attributable to noncontrolling interests | 7 | 0 | 3 | 0 |
Total other comprehensive income (loss) attributable to Aon shareholders | 265 | (71) | 500 | (370) |
Comprehensive income (loss) attributable to Aon shareholders | 450 | 248 | 1,745 | 574 |
Aon plc | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 185 | 316 | 1,227 | 945 |
Net income (loss) before equity in earnings of subsidiaries | 221 | 238 | (35) | 31 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Aon shareholders | 185 | 316 | 1,227 | 945 |
Change in fair value of financial instruments | 0 | 0 | 0 | 0 |
Foreign currency translation adjustments | 0 | 0 | 0 | (2) |
Postretirement benefit obligation | 0 | 0 | 0 | 0 |
Total other comprehensive (loss) income | 0 | 0 | 0 | (2) |
Equity in other comprehensive income (loss) of subsidiaries, net of tax | 265 | (68) | 518 | (369) |
Less: Other comprehensive loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss) attributable to Aon shareholders | 265 | (68) | 518 | (371) |
Comprehensive income (loss) attributable to Aon shareholders | 450 | 248 | 1,745 | 574 |
Aon Corporation | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | (216) | (120) | 497 | 268 |
Net income (loss) before equity in earnings of subsidiaries | (338) | (345) | (531) | (568) |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Aon shareholders | (216) | (120) | 497 | 268 |
Change in fair value of financial instruments | 3 | 1 | 3 | 1 |
Foreign currency translation adjustments | 0 | 1 | 0 | 22 |
Postretirement benefit obligation | 7 | 7 | 23 | 23 |
Total other comprehensive (loss) income | 10 | 9 | 26 | 46 |
Equity in other comprehensive income (loss) of subsidiaries, net of tax | 245 | (83) | 480 | (425) |
Less: Other comprehensive loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss) attributable to Aon shareholders | 255 | (74) | 506 | (379) |
Comprehensive income (loss) attributable to Aon shareholders | 39 | (194) | 1,003 | (111) |
Other Non-Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 93 | 310 | 2,320 | 1,777 |
Net income (loss) before equity in earnings of subsidiaries | 309 | 430 | 1,823 | 1,509 |
Less: Net income attributable to noncontrolling interests | 7 | 7 | 30 | 27 |
Net income attributable to Aon shareholders | 86 | 303 | 2,290 | 1,750 |
Change in fair value of financial instruments | 8 | (1) | 10 | (12) |
Foreign currency translation adjustments | 243 | (87) | 452 | (248) |
Postretirement benefit obligation | 11 | 11 | 33 | (155) |
Total other comprehensive (loss) income | 262 | (77) | 495 | (415) |
Equity in other comprehensive income (loss) of subsidiaries, net of tax | 255 | (74) | 506 | (379) |
Less: Other comprehensive loss attributable to noncontrolling interests | 7 | 0 | 3 | 0 |
Total other comprehensive income (loss) attributable to Aon shareholders | 510 | (151) | 998 | (794) |
Comprehensive income (loss) attributable to Aon shareholders | 596 | 152 | 3,288 | 956 |
Consolidation Adjustments | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 130 | (180) | (2,769) | (2,019) |
Net income (loss) before equity in earnings of subsidiaries | 0 | 3 | 18 | (1) |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Aon shareholders | 130 | (180) | (2,769) | (2,019) |
Change in fair value of financial instruments | 0 | 0 | 0 | 0 |
Foreign currency translation adjustments | 0 | (3) | (18) | 1 |
Postretirement benefit obligation | 0 | 0 | 0 | 0 |
Total other comprehensive (loss) income | 0 | (3) | (18) | 1 |
Equity in other comprehensive income (loss) of subsidiaries, net of tax | (765) | 225 | (1,504) | 1,173 |
Less: Other comprehensive loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss) attributable to Aon shareholders | (765) | 222 | (1,522) | 1,174 |
Comprehensive income (loss) attributable to Aon shareholders | $ (635) | $ 42 | $ (4,291) | $ (845) |
Guarantee of Registered Secur81
Guarantee of Registered Securities - Condensed Consolidating Statement of Financial Position (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS : | ||
Cash and cash equivalents | $ 749 | $ 426 |
Short-term investments | 1,640 | 290 |
Receivables, net | 2,068 | 2,106 |
Fiduciary assets | 9,292 | 8,959 |
Intercompany receivables | 0 | 0 |
Other current assets | 518 | 247 |
Current assets of discontinued operations | 0 | 1,118 |
Total Current Assets | 14,267 | 13,146 |
Goodwill | 7,888 | 7,410 |
Intangible assets, net | 1,341 | 1,890 |
Fixed assets, net | 545 | 550 |
Deferred tax assets | 565 | 325 |
Intercompany receivables | 0 | 0 |
Prepaid pension | 1,020 | 858 |
Other non-current assets | 298 | 360 |
Investment in subsidiary | 0 | 0 |
Non-current assets of discontinued operations | 0 | 2,076 |
TOTAL ASSETS | 25,924 | 26,615 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,588 | 1,604 |
Short-term debt and current portion of long-term debt | 305 | 336 |
Fiduciary liabilities | 9,292 | 8,959 |
Intercompany payables | 0 | 0 |
Other current liabilities | 1,289 | 656 |
Current liabilities of discontinued operations | 0 | 940 |
Total Current Liabilities | 12,474 | 12,495 |
Long-term debt | 5,662 | 5,869 |
Deferred tax liabilities | 83 | 101 |
Pension, other postretirement and postemployment liabilities | 1,612 | 1,760 |
Intercompany payables | 0 | 0 |
Other non-current liabilities | 846 | 719 |
Non-current liabilities of discontinued operations | 0 | 139 |
TOTAL LIABILITIES | 20,677 | 21,083 |
TOTAL AON SHAREHOLDERS’ EQUITY | 5,175 | 5,475 |
Noncontrolling interests | 72 | 57 |
TOTAL EQUITY | 5,247 | 5,532 |
TOTAL LIABILITIES AND EQUITY | 25,924 | 26,615 |
Aon plc | ||
CURRENT ASSETS : | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Receivables, net | 0 | 0 |
Fiduciary assets | 0 | 0 |
Intercompany receivables | 110 | 105 |
Other current assets | 0 | 0 |
Current assets of discontinued operations | 0 | 0 |
Total Current Assets | 110 | 105 |
Goodwill | 0 | 0 |
Intangible assets, net | 0 | 0 |
Fixed assets, net | 0 | 0 |
Deferred tax assets | 135 | 134 |
Intercompany receivables | 391 | 366 |
Prepaid pension | 0 | 0 |
Other non-current assets | 1 | 2 |
Investment in subsidiary | 11,900 | 10,107 |
Non-current assets of discontinued operations | 0 | 0 |
TOTAL ASSETS | 12,537 | 10,714 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 2,929 | 585 |
Short-term debt and current portion of long-term debt | 0 | 279 |
Fiduciary liabilities | 0 | 0 |
Intercompany payables | 147 | 142 |
Other current liabilities | 24 | 0 |
Current liabilities of discontinued operations | 0 | 0 |
Total Current Liabilities | 3,100 | 1,006 |
Long-term debt | 4,247 | 4,177 |
Deferred tax liabilities | 0 | 0 |
Pension, other postretirement and postemployment liabilities | 0 | 0 |
Intercompany payables | 0 | 0 |
Other non-current liabilities | 15 | 8 |
Non-current liabilities of discontinued operations | 0 | 0 |
TOTAL LIABILITIES | 7,362 | 5,191 |
TOTAL AON SHAREHOLDERS’ EQUITY | 5,175 | 5,523 |
Noncontrolling interests | 0 | 0 |
TOTAL EQUITY | 5,175 | 5,523 |
TOTAL LIABILITIES AND EQUITY | 12,537 | 10,714 |
Aon Corporation | ||
CURRENT ASSETS : | ||
Cash and cash equivalents | 3,110 | 1,633 |
Short-term investments | 1,467 | 140 |
Receivables, net | 2 | 3 |
Fiduciary assets | 0 | 0 |
Intercompany receivables | 4,860 | 1,880 |
Other current assets | 37 | 25 |
Current assets of discontinued operations | 0 | 0 |
Total Current Assets | 9,476 | 3,681 |
Goodwill | 0 | 0 |
Intangible assets, net | 0 | 0 |
Fixed assets, net | 0 | 0 |
Deferred tax assets | 664 | 726 |
Intercompany receivables | 261 | 261 |
Prepaid pension | 5 | 5 |
Other non-current assets | 49 | 119 |
Investment in subsidiary | 17,748 | 17,131 |
Non-current assets of discontinued operations | 0 | 0 |
TOTAL ASSETS | 28,203 | 21,923 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 37 | 44 |
Short-term debt and current portion of long-term debt | 0 | 50 |
Fiduciary liabilities | 0 | 0 |
Intercompany payables | 15,951 | 10,399 |
Other current liabilities | 54 | 63 |
Current liabilities of discontinued operations | 0 | 0 |
Total Current Liabilities | 16,042 | 10,556 |
Long-term debt | 1,414 | 1,413 |
Deferred tax liabilities | 0 | 0 |
Pension, other postretirement and postemployment liabilities | 1,234 | 1,356 |
Intercompany payables | 8,894 | 8,877 |
Other non-current liabilities | 110 | 77 |
Non-current liabilities of discontinued operations | 0 | 0 |
TOTAL LIABILITIES | 27,694 | 22,279 |
TOTAL AON SHAREHOLDERS’ EQUITY | 509 | (356) |
Noncontrolling interests | 0 | 0 |
TOTAL EQUITY | 509 | (356) |
TOTAL LIABILITIES AND EQUITY | 28,203 | 21,923 |
Other Non-Guarantor Subsidiaries | ||
CURRENT ASSETS : | ||
Cash and cash equivalents | 802 | 655 |
Short-term investments | 173 | 150 |
Receivables, net | 2,066 | 2,103 |
Fiduciary assets | 9,292 | 8,959 |
Intercompany receivables | 12,436 | 9,825 |
Other current assets | 481 | 222 |
Current assets of discontinued operations | 0 | 1,118 |
Total Current Assets | 25,250 | 23,032 |
Goodwill | 7,888 | 7,410 |
Intangible assets, net | 1,341 | 1,890 |
Fixed assets, net | 545 | 550 |
Deferred tax assets | 173 | 171 |
Intercompany receivables | 8,728 | 8,711 |
Prepaid pension | 1,015 | 853 |
Other non-current assets | 248 | 239 |
Investment in subsidiary | 509 | (356) |
Non-current assets of discontinued operations | 0 | 2,076 |
TOTAL ASSETS | 45,697 | 44,576 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,785 | 2,837 |
Short-term debt and current portion of long-term debt | 305 | 7 |
Fiduciary liabilities | 9,292 | 8,959 |
Intercompany payables | 1,308 | 1,269 |
Other current liabilities | 1,211 | 593 |
Current liabilities of discontinued operations | 0 | 940 |
Total Current Liabilities | 13,901 | 14,605 |
Long-term debt | 1 | 279 |
Deferred tax liabilities | 490 | 759 |
Pension, other postretirement and postemployment liabilities | 378 | 404 |
Intercompany payables | 486 | 461 |
Other non-current liabilities | 721 | 634 |
Non-current liabilities of discontinued operations | 0 | 139 |
TOTAL LIABILITIES | 15,977 | 17,281 |
TOTAL AON SHAREHOLDERS’ EQUITY | 29,648 | 27,238 |
Noncontrolling interests | 72 | 57 |
TOTAL EQUITY | 29,720 | 27,295 |
TOTAL LIABILITIES AND EQUITY | 45,697 | 44,576 |
Consolidation Adjustments | ||
CURRENT ASSETS : | ||
Cash and cash equivalents | (3,163) | (1,862) |
Short-term investments | 0 | 0 |
Receivables, net | 0 | 0 |
Fiduciary assets | 0 | 0 |
Intercompany receivables | (17,406) | (11,810) |
Other current assets | 0 | 0 |
Current assets of discontinued operations | 0 | 0 |
Total Current Assets | (20,569) | (13,672) |
Goodwill | 0 | 0 |
Intangible assets, net | 0 | 0 |
Fixed assets, net | 0 | 0 |
Deferred tax assets | (407) | (706) |
Intercompany receivables | (9,380) | (9,338) |
Prepaid pension | 0 | 0 |
Other non-current assets | 0 | 0 |
Investment in subsidiary | (30,157) | (26,882) |
Non-current assets of discontinued operations | 0 | 0 |
TOTAL ASSETS | (60,513) | (50,598) |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | (3,163) | (1,862) |
Short-term debt and current portion of long-term debt | 0 | 0 |
Fiduciary liabilities | 0 | 0 |
Intercompany payables | (17,406) | (11,810) |
Other current liabilities | 0 | 0 |
Current liabilities of discontinued operations | 0 | 0 |
Total Current Liabilities | (20,569) | (13,672) |
Long-term debt | 0 | 0 |
Deferred tax liabilities | (407) | (658) |
Pension, other postretirement and postemployment liabilities | 0 | 0 |
Intercompany payables | (9,380) | (9,338) |
Other non-current liabilities | 0 | 0 |
Non-current liabilities of discontinued operations | 0 | 0 |
TOTAL LIABILITIES | (30,356) | (23,668) |
TOTAL AON SHAREHOLDERS’ EQUITY | (30,157) | (26,930) |
Noncontrolling interests | 0 | 0 |
TOTAL EQUITY | (30,157) | (26,930) |
TOTAL LIABILITIES AND EQUITY | $ (60,513) | $ (50,598) |
Guarantee of Registered Secur82
Guarantee of Registered Securities - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Cash provided by operating activities - continuing operations | $ 289,000,000 | $ 1,152,000,000 | ||
Cash provided by operating activities - discontinued operations | 64,000,000 | 323,000,000 | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 353,000,000 | 1,475,000,000 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from investments | 43,000,000 | 31,000,000 | ||
Payments for investments | (55,000,000) | (47,000,000) | ||
Net purchases of short-term investments - non-fiduciary | (1,344,000,000) | (108,000,000) | ||
Acquisition of businesses, net of cash acquired | (172,000,000) | (198,000,000) | ||
Sale of businesses, net of cash sold | 4,194,000,000 | 104,000,000 | ||
Capital expenditures | (125,000,000) | (107,000,000) | ||
Cash provided by (used for) investing activities - continuing operations | 2,541,000,000 | (325,000,000) | ||
Cash used for investing activities - discontinued operations | (19,000,000) | (46,000,000) | ||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 2,522,000,000 | (371,000,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Share repurchase | (1,888,000,000) | (1,037,000,000) | ||
Advances from (to) affiliates | 0 | 0 | ||
Issuance of shares for employee benefit plans | (118,000,000) | (70,000,000) | ||
Issuance of debt | 1,651,000,000 | 2,729,000,000 | ||
Repayment of debt | (1,998,000,000) | (2,308,000,000) | ||
Cash dividends to shareholders | (274,000,000) | (258,000,000) | ||
Noncontrolling interests and other financing activities | (21,000,000) | (71,000,000) | ||
Cash provided by (used for) financing activities - continuing operations | (2,648,000,000) | (1,015,000,000) | ||
Cash used for financing activities - discontinued operations | 0 | 0 | ||
CASH USED FOR FINANCING ACTIVITIES | (2,648,000,000) | (1,015,000,000) | ||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 91,000,000 | 10,000,000 | ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 318,000,000 | 99,000,000 | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 431,000,000 | 384,000,000 | ||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 749,000,000 | 483,000,000 | ||
Cash and cash equivalents from discontinued operations | 0 | 3,000,000 | $ 5,000,000 | $ 2,000,000 |
Aon plc | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Cash provided by operating activities - continuing operations | (135,000,000) | 219,000,000 | ||
Cash provided by operating activities - discontinued operations | 0 | 0 | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | (135,000,000) | 219,000,000 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from investments | 0 | 0 | ||
Payments for investments | (16,000,000) | 0 | ||
Net purchases of short-term investments - non-fiduciary | 0 | 0 | ||
Acquisition of businesses, net of cash acquired | 0 | 0 | ||
Sale of businesses, net of cash sold | 0 | 0 | ||
Capital expenditures | 0 | 0 | ||
Cash provided by (used for) investing activities - continuing operations | (16,000,000) | 0 | ||
Cash used for investing activities - discontinued operations | 0 | 0 | ||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | (16,000,000) | 0 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Share repurchase | (1,888,000,000) | (1,037,000,000) | ||
Advances from (to) affiliates | 2,722,000,000 | 166,000,000 | ||
Issuance of shares for employee benefit plans | (118,000,000) | (70,000,000) | ||
Issuance of debt | 544,000,000 | 1,588,000,000 | ||
Repayment of debt | (835,000,000) | (608,000,000) | ||
Cash dividends to shareholders | (274,000,000) | (258,000,000) | ||
Noncontrolling interests and other financing activities | 0 | 0 | ||
Cash provided by (used for) financing activities - continuing operations | 151,000,000 | (219,000,000) | ||
Cash used for financing activities - discontinued operations | 0 | 0 | ||
CASH USED FOR FINANCING ACTIVITIES | 151,000,000 | (219,000,000) | ||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 0 | 0 | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 0 | 0 | ||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 0 | 0 | ||
Aon Corporation | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Cash provided by operating activities - continuing operations | 999,000,000 | (664,000,000) | ||
Cash provided by operating activities - discontinued operations | 0 | 0 | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 999,000,000 | (664,000,000) | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from investments | 576,000,000 | 19,000,000 | ||
Payments for investments | (25,000,000) | (25,000,000) | ||
Net purchases of short-term investments - non-fiduciary | (1,328,000,000) | (99,000,000) | ||
Acquisition of businesses, net of cash acquired | 1,000,000 | 0 | ||
Sale of businesses, net of cash sold | 0 | 0 | ||
Capital expenditures | 0 | 0 | ||
Cash provided by (used for) investing activities - continuing operations | (776,000,000) | (105,000,000) | ||
Cash used for investing activities - discontinued operations | 0 | 0 | ||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | (776,000,000) | (105,000,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Share repurchase | 0 | 0 | ||
Advances from (to) affiliates | 1,304,000,000 | 356,000,000 | ||
Issuance of shares for employee benefit plans | 0 | 0 | ||
Issuance of debt | 1,100,000,000 | 1,141,000,000 | ||
Repayment of debt | (1,150,000,000) | (1,692,000,000) | ||
Cash dividends to shareholders | 0 | 0 | ||
Noncontrolling interests and other financing activities | 0 | 0 | ||
Cash provided by (used for) financing activities - continuing operations | 1,254,000,000 | (195,000,000) | ||
Cash used for financing activities - discontinued operations | 0 | 0 | ||
CASH USED FOR FINANCING ACTIVITIES | 1,254,000,000 | (195,000,000) | ||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,477,000,000 | (964,000,000) | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,633,000,000 | 2,083,000,000 | ||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 3,110,000,000 | 1,119,000,000 | ||
Other Non-Guarantor Subsidiaries | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Cash provided by operating activities - continuing operations | 987,000,000 | 1,597,000,000 | ||
Cash provided by operating activities - discontinued operations | 64,000,000 | 323,000,000 | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 1,051,000,000 | 1,920,000,000 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from investments | 11,000,000 | 12,000,000 | ||
Payments for investments | (571,000,000) | (22,000,000) | ||
Net purchases of short-term investments - non-fiduciary | (16,000,000) | (9,000,000) | ||
Acquisition of businesses, net of cash acquired | (173,000,000) | (198,000,000) | ||
Sale of businesses, net of cash sold | 4,194,000,000 | 104,000,000 | ||
Capital expenditures | (125,000,000) | (107,000,000) | ||
Cash provided by (used for) investing activities - continuing operations | 3,320,000,000 | (220,000,000) | ||
Cash used for investing activities - discontinued operations | (19,000,000) | (46,000,000) | ||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 3,301,000,000 | (266,000,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Share repurchase | 0 | 0 | ||
Advances from (to) affiliates | (4,274,000,000) | (670,000,000) | ||
Issuance of shares for employee benefit plans | 0 | 0 | ||
Issuance of debt | 7,000,000 | 0 | ||
Repayment of debt | (13,000,000) | (8,000,000) | ||
Cash dividends to shareholders | 0 | 0 | ||
Noncontrolling interests and other financing activities | (21,000,000) | (71,000,000) | ||
Cash provided by (used for) financing activities - continuing operations | (4,301,000,000) | (749,000,000) | ||
Cash used for financing activities - discontinued operations | 0 | 0 | ||
CASH USED FOR FINANCING ACTIVITIES | (4,301,000,000) | (749,000,000) | ||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 91,000,000 | 10,000,000 | ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 142,000,000 | 915,000,000 | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 660,000,000 | 1,242,000,000 | ||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 802,000,000 | 2,157,000,000 | ||
Consolidation Adjustments | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Cash provided by operating activities - continuing operations | (1,562,000,000) | 0 | ||
Cash provided by operating activities - discontinued operations | 0 | 0 | ||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | (1,562,000,000) | 0 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from investments | (544,000,000) | 0 | ||
Payments for investments | 557,000,000 | 0 | ||
Net purchases of short-term investments - non-fiduciary | 0 | 0 | ||
Acquisition of businesses, net of cash acquired | 0 | 0 | ||
Sale of businesses, net of cash sold | 0 | 0 | ||
Capital expenditures | 0 | 0 | ||
Cash provided by (used for) investing activities - continuing operations | 13,000,000 | 0 | ||
Cash used for investing activities - discontinued operations | 0 | 0 | ||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES | 13,000,000 | 0 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Share repurchase | 0 | 0 | ||
Advances from (to) affiliates | 248,000,000 | 148,000,000 | ||
Issuance of shares for employee benefit plans | 0 | 0 | ||
Issuance of debt | 0 | 0 | ||
Repayment of debt | 0 | 0 | ||
Cash dividends to shareholders | 0 | 0 | ||
Noncontrolling interests and other financing activities | 0 | 0 | ||
Cash provided by (used for) financing activities - continuing operations | 248,000,000 | 148,000,000 | ||
Cash used for financing activities - discontinued operations | 0 | 0 | ||
CASH USED FOR FINANCING ACTIVITIES | 248,000,000 | 148,000,000 | ||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,301,000,000) | 148,000,000 | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | (1,862,000,000) | (2,941,000,000) | ||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ (3,163,000,000) | $ (2,793,000,000) |