Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 03, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Aon plc | |
Entity Central Index Key | 315,293 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 244,512,517 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Total revenue | $ 3,090 | $ 2,381 |
Expenses | ||
Compensation and benefits | 1,616 | 1,469 |
Information technology | 115 | 88 |
Premises | 93 | 84 |
Depreciation of fixed assets | 39 | 54 |
Amortization and impairment of intangible assets | 110 | 43 |
Other general expenses | 318 | 308 |
Total operating expenses | 2,291 | 2,046 |
Operating income | 799 | 335 |
Interest income | 4 | 2 |
Interest expense | (70) | (70) |
Other income (expense) | (15) | (2) |
Income from continuing operations before income taxes | 718 | 265 |
Income taxes | 114 | 0 |
Net income from continuing operations | 604 | 265 |
Net income from discontinued operations | 6 | 40 |
Net income | 610 | 305 |
Less: Net income attributable to noncontrolling interests | 16 | 14 |
Net income attributable to Aon shareholders | $ 594 | $ 291 |
Basic net income per share attributable to Aon shareholders | ||
Basic net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share) | $ 2.37 | $ 0.95 |
Basic net income (loss) per share attributable to Aon shareholders, discontinued operations (in dollars per share) | 0.02 | 0.15 |
Basic net income (loss) per share attributable to Aon shareholders (in dollars per share) | 2.39 | 1.10 |
Diluted net income per share attributable to Aon shareholders | ||
Diluted net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share) | 2.35 | 0.94 |
Diluted net income (loss) per share attributable to Aon shareholders, discontinued operations (in dollars per share) | 0.02 | 0.15 |
Diluted net income (loss) per share attributable to Aon shareholders (in dollars per share) | 2.37 | 1.09 |
Cash dividends per share paid on ordinary shares (in dollars per share) | $ 0.36 | $ 0.33 |
Weighted average ordinary shares outstanding - basic (in shares) | 248.5 | 264.8 |
Weighted average ordinary shares outstanding - diluted (in shares) | 250.2 | 267 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 610 | $ 305 |
Less: Net income attributable to noncontrolling interests | 16 | 14 |
Net income attributable to Aon shareholders | 594 | 291 |
Other comprehensive income (loss), net of tax: | ||
Change in fair value of financial instruments | 14 | (2) |
Foreign currency translation adjustments | 247 | 147 |
Postretirement benefit obligation | 48 | 18 |
Total other comprehensive income | 309 | 163 |
Less: Other comprehensive income attributable to noncontrolling interests | 3 | 1 |
Total other comprehensive income attributable to Aon shareholders | 306 | 162 |
Comprehensive income (loss) attributable to Aon shareholders | $ 900 | $ 453 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 597 | $ 756 |
Short-term investments | 118 | 529 |
Receivables, net | 3,053 | 2,478 |
Fiduciary assets | 10,738 | 9,625 |
Other current assets | 609 | 289 |
Total Current Assets | 15,115 | 13,677 |
Goodwill | 8,550 | 8,358 |
Intangible assets, net | 1,662 | 1,733 |
Fixed assets, net | 578 | 564 |
Deferred tax assets | 296 | 389 |
Prepaid pension | 1,207 | 1,060 |
Other non-current assets | 439 | 307 |
TOTAL ASSETS | 27,847 | 26,088 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,545 | 1,961 |
Short-term debt and current portion of long-term debt | 403 | 299 |
Fiduciary liabilities | 10,738 | 9,625 |
Other current liabilities | 972 | 870 |
Total Current Liabilities | 13,658 | 12,755 |
Long-term debt | 5,697 | 5,667 |
Deferred tax liabilities | 243 | 127 |
Pension, other postretirement, and postemployment liabilities | 1,759 | 1,789 |
Other non-current liabilities | 1,105 | 1,102 |
TOTAL LIABILITIES | 22,462 | 21,440 |
EQUITY | ||
Ordinary shares - $0.01 nominal value Authorized: 750 shares (issued: 2018 - 245.2; 2017 - 247.6) | 2 | 2 |
Additional paid-in capital | 5,743 | 5,775 |
Retained earnings | 2,747 | 2,302 |
Accumulated other comprehensive loss | (3,191) | (3,496) |
TOTAL AON SHAREHOLDERS' EQUITY | 5,301 | 4,583 |
Noncontrolling interests | 84 | 65 |
TOTAL EQUITY | 5,385 | 4,648 |
TOTAL LIABILITIES AND EQUITY | $ 27,847 | $ 26,088 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Financial Position (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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) | 245,200,000 | 247,600,000 |
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 | $ 49 | |||
Balance at January 1, 2018 | 5,581 | $ 5,580 | 3,856 | $ (3,912) | $ 57 |
Beginning Balance (in shares) at Dec. 31, 2016 | 262 | ||||
Beginning Balance at Dec. 31, 2016 | 5,532 | $ 5,580 | 3,807 | (3,912) | 57 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 305 | 291 | 14 | ||
Shares issued - employee stock compensation plans (in shares) | 1.9 | ||||
Shares issued - employee stock compensation plans | (85) | $ (85) | |||
Shares purchased (in shares) | (1.1) | ||||
Shares purchased | (126) | (126) | |||
Share-based compensation expense | 75 | $ 75 | |||
Dividends to shareholders | (87) | (87) | |||
Net change in fair value of financial instruments | (2) | (2) | |||
Net foreign currency translation adjustments | 147 | 146 | 1 | ||
Net postretirement benefit obligation | 18 | 18 | |||
Ending Balance (in shares) at Mar. 31, 2017 | 262.8 | ||||
Ending Balance at Mar. 31, 2017 | 5,826 | $ 5,570 | 3,934 | (3,750) | 72 |
Increase (Decrease) in Shareholders' Equity | |||||
Adoption of new accounting guidance | 492 | 0 | 493 | (1) | 0 |
Balance at January 1, 2018 | $ 5,140 | $ 5,777 | 2,795 | (3,497) | 65 |
Beginning Balance (in shares) at Dec. 31, 2017 | 247.6 | 247.6 | |||
Beginning Balance at Dec. 31, 2017 | $ 4,648 | $ 5,777 | 2,302 | (3,496) | 65 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 610 | 594 | 16 | ||
Shares issued - employee stock compensation plans (in shares) | 1.5 | ||||
Shares issued - employee stock compensation plans | (109) | $ (109) | |||
Shares purchased (in shares) | (3.9) | ||||
Shares purchased | (553) | (553) | |||
Share-based compensation expense | 77 | $ 77 | |||
Dividends to shareholders | (89) | (89) | |||
Net change in fair value of financial instruments | 14 | 14 | |||
Net foreign currency translation adjustments | 247 | 244 | 3 | ||
Net postretirement benefit obligation | $ 48 | 48 | |||
Ending Balance (in shares) at Mar. 31, 2018 | 245.2 | 245.2 | |||
Ending Balance at Mar. 31, 2018 | $ 5,385 | $ 5,745 | $ 2,747 | $ (3,191) | $ 84 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 610 | $ 305 |
Income from discontinued operations, net of income taxes | 6 | 40 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Loss from sales of businesses, net | 1 | 2 |
Depreciation of fixed assets | 39 | 54 |
Amortization and impairment of intangible assets | 110 | 43 |
Share-based compensation expense | 77 | 78 |
Deferred income taxes | 26 | (2) |
Change in assets and liabilities: | ||
Fiduciary receivables | (605) | 337 |
Short-term investments — funds held on behalf of clients | (195) | (330) |
Fiduciary liabilities | 800 | (7) |
Receivables, net | (269) | 38 |
Accounts payable and accrued liabilities | (439) | (390) |
Restructuring reserves | (24) | 99 |
Current income taxes | 30 | (56) |
Pension, other postretirement and other postemployment liabilities | (53) | (41) |
Other assets and liabilities | 38 | 92 |
Cash provided by operating activities - continuing operations | 140 | 182 |
Cash provided by operating activities - discontinued operations | 0 | 58 |
CASH PROVIDED BY OPERATING ACTIVITIES | 140 | 240 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from investments | 17 | 25 |
Payments for investments | (11) | (9) |
Net sale of short-term investments — non-fiduciary | 415 | 94 |
Acquisition of businesses, net of cash acquired | (29) | (46) |
Sale of businesses, net of cash sold | (1) | (2) |
Capital expenditures | (45) | (34) |
Cash provided by investing activities - continuing operations | 346 | 28 |
Cash used for investing activities - discontinued operations | 0 | (15) |
CASH PROVIDED BY INVESTING ACTIVITIES | 346 | 13 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Share repurchase | (569) | (126) |
Issuance of shares for employee benefit plans | (109) | (85) |
Issuance of debt | 808 | 992 |
Repayment of debt | (704) | (950) |
Cash dividends to shareholders | (89) | (87) |
Noncontrolling interests and other financing activities | 0 | (2) |
Cash used for financing activities - continuing operations | (663) | (258) |
Cash used for financing activities - discontinued operations | 0 | 0 |
CASH USED FOR FINANCING ACTIVITIES | (663) | (258) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 18 | 25 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (159) | 20 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 756 | 431 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 597 | 451 |
Supplemental disclosures: | ||
Interest paid | 58 | 58 |
Income taxes paid, net of refunds | $ 58 | $ 58 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 . The results for the three months ended March 31, 2018 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2018 . 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 | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Accounting Principles and Practices | Accounting Principles and Practices Adoption of New Accounting Standards Presentation of Net Periodic Pension and Postretirement Benefit Costs In March 2017, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. The Company has applied the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the 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 Company has not applied the practical expedient upon adoption of this guidance. The new guidance was effective for Aon in the first quarter of 2018. The adoption of this guidance had no impact on the net income of the Company. Upon adoption of the guidance, the presentation of the results reflect a change in Operating income offset by an equal and offsetting change in Other income (expense) for the period ended March 31, 2017 as follows: Three Months Ended As Reported Adjustments As Adjusted Operating income (1) $ 343 $ (8 ) $ 335 Other income (expense) $ (10 ) $ 8 $ (2 ) (1) Reclassification from Operating income is recorded in Compensation and benefits. Income Tax Consequences of Intercompany Transactions In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory. The guidance requires that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e. depreciated, amortized, or impaired). The Company has applied the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The new guidance was effective for Aon in the first quarter of 2018. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Deferred tax assets of $23 million , an increase to Deferred tax liabilities of $12 million , and a decrease to Other non-current assets of $26 million on the Condensed Consolidated Statement of Financial Position through a cumulative adjustment of $15 million decrease to Retained earnings. For the three months ended March 31, 2018, the impact of adopting this standard on the Condensed Consolidated Statement of Income was insignificant. Statement of Cash Flows In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity no longer has discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard was effective for the Company in the first quarter of 2018. The adoption of this guidance had no impact on the Company’s Condensed Consolidated Statements of Cash Flows. Financial Assets and Liabilities In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. The Company applied the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with the exception of the amendments related to equity securities without readily determinable fair values, including disclosure requirements, which were applied prospectively. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Accumulated other comprehensive loss of $1 million on the Condensed Consolidated Statement of Financial Position through a cumulative adjustment of $1 million increase to Retained earnings. For the three months ended March 31, 2018, the impact of adopting this standard on the Condensed Consolidated Statement of Income was insignificant. Revenue Recognition In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers (the “Standard” or “ASC 606”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP (“ASC 605”). The core principal of the Standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Standard also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company elected to apply the modified retrospective adoption approach to all contracts. Under this approach, prior periods were not restated. Rather, revenues and other disclosures for prior periods were provided in the notes to the financial statements as previously reported under ASC 605, and the cumulative effect of initially applying the guidance was recognized as an adjustment to Retained earnings. The following summarizes the significant changes to the Company as a result of the adoption of ASC 606 on January 1, 2018. • The Company previously recognized revenue either at a point in time or over a period of time based on the transfer of value to customers or as the remuneration became determinable. Under ASC 606, the revenue related to certain brokerage services recognized over a period of time is recognized on the effective date of the associated policies when control of the policy transfers to the customer. As a result, revenue from these arrangements are typically recognized in earlier periods under ASC 606 in comparison to ASC 605, changing the timing and amount of revenue recognized for annual and interim periods. This change resulted in a significant shift in timing of interim revenue for the Reinsurance Solutions revenue line and, to a lesser extent, certain other brokerage services. • The Standard provides guidance on accounting for certain revenue-related costs including when to capitalize costs associated with obtaining and fulfilling a contract. The majority of these costs were previously expensed as incurred under ASC 605. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, are amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company applied a practical expedient and recognizes the costs of obtaining a contract as an expense when incurred. Assets recognized as costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, as well as other costs, are amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is generally less than one year. As a result of applying the modified retrospective method to adopt ASC 606, the following adjustments were made to the Condensed Consolidated Statement of Financial position as of January 1, 2018: December 31, January 1, (millions) As Reported Adjustments As Adjusted ASSETS Receivables, net $ 2,478 $ 252 $ 2,730 Other current assets $ 289 $ 298 $ 587 Deferred tax assets 389 (128 ) 261 Other non-current assets $ 307 $ 145 $ 452 LIABILITIES Accounts payable and accrued liabilities $ 1,961 $ 8 $ 1,969 Other current liabilities $ 870 $ 13 $ 883 Deferred tax liabilities $ 127 $ 42 $ 169 Other non-current liabilities $ 1,102 $ (3 ) $ 1,099 EQUITY Total equity $ 4,648 $ 507 $ 5,155 The following tables summarize the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the three months ended March 31, 2018. Condensed Consolidated Statement of Income Three Months Ended March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 Revenue Total revenue $ 3,090 $ (413 ) $ 2,677 Expenses Compensation and benefits $ 1,616 $ (65 ) $ 1,551 Other income (expense) $ (15 ) $ 1 $ (14 ) Income taxes $ 114 $ (82 ) $ 32 Adoption of ASC 606 for the first quarter of 2018 was an impact of $265 million on net income from continuing operations, or $1.06 per share. Condensed Consolidated Statement of Financial Position As of March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 ASSETS Receivables, net $ 3,053 $ (644 ) $ 2,409 Other current assets $ 609 $ (239 ) $ 370 Deferred tax assets $ 296 $ 130 $ 426 Other non-current assets $ 439 $ (143 ) $ 296 LIABILITIES Other current liabilities $ 972 $ (52 ) $ 920 Deferred tax liabilities $ 243 $ (68 ) $ 175 Other non-current liabilities $ 1,105 $ 3 $ 1,108 EQUITY Total equity $ 5,385 $ (779 ) $ 4,606 Condensed Consolidated Statement of Cash Flows Three Months Ended March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 610 $ (265 ) $ 345 Deferred income taxes $ 26 $ (28 ) $ (2 ) Receivables, net $ (269 ) $ 400 $ 131 Accounts payable and accrued liabilities $ (439 ) $ 8 $ (431 ) Current income taxes $ 30 $ (54 ) $ (24 ) Other assets and liabilities $ 38 $ (61 ) $ (23 ) The adoption of ASC 606 had no impact on total Cash Provided by Operating Activities. Refer to Note 3 “Revenue from Contracts with Customers” to the Condensed Consolidated Financial Statements for further information. Accounting Standards Issued But Not Yet Adopted Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued amendments related to reclassification of certain tax effects from accumulated other comprehensive income. The amendments allow a reclassification from accumulated comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. In addition, the entity is required to provide certain disclosures regarding stranded tax effects. The amendments are effective for Aon in the first quarter of 2019 and early adoption is permitted, including adoption in any interim period. The amendments should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact that the amendments will have on the Condensed Consolidated Financial Statements and the period in which it plans to adopt. 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. 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. 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. 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 its 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 current U.S. GAAP standards. The new standard will be effective for the Company in the first quarter of 2019, with early application 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. The Company is currently evaluating the period of adoption. A preliminary assessment to determine the impacts of the new accounting standard has been performed, including its impact on accounting and operational processes. The Company expects to recognize significant right of use assets and lease liabilities on its Condensed Consolidated Statements of Financial Position, but is unable to provide quantitative impacts at this time. Additionally, the Company expects to expand its disclosures around lease arrangements. The Company expects to adopt the new accounting standard in the first quarter of 2019 and is currently evaluating the practical expedients that will be applied. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company generates revenues primarily through commissions, compensation from insurance and reinsurance companies for services provided to them, and fees from clients. Commissions and fees for brokerage services vary depending upon several factors, which may include the amount of premium, the type of insurance or reinsurance coverage provided, the particular services provided to a client, insurer, or reinsurer, and the capacity in which we act. Compensation from insurance and reinsurance companies includes fees for consulting and analytics services and fees and commissions for administrative and other services provided to or on behalf of insurers. Fees from clients for advice and consulting services are dependent on the extent and value of the services provided. Payment terms are consistent with current industry practices. The Company recognizes revenue when control of the promised services are transfered to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements where control is transferred over time, an input or output method is applied that represents a faithful depiction of the progress towards completion of the performance obligation. For arrangements that include variable consideration, the Company assesses whether any amounts should be constrained. For arrangements that include multiple performance obligations, the Company allocates consideration based on their relative fair values. Costs incurred by the Company in obtaining a contract are capitalized and amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. Certain contract related costs, including pre-placement brokerage costs, are capitalized as a cost to fulfill and are amortized on a systematic basis consistent with the transfer of services to which the asset relates, which is generally less than one year. The Company has elected to apply practical expedients to not disclose the revenue related to unsatisfied performance obligations if 1) the contract has an original duration of 1 year or less, 2) the Company has recognized revenue for the amount in which it has the right to bill, and 3) the variable consideration is allocated entirely to an unsatisfied performance obligation which is recognized as a series of distinct goods or services that form a single performance obligation. Disaggregation of Revenue The following is a description of principal service lines from which the Company generates its revenue: Commercial Risk Solutions includes retail brokerage, cyber solutions, global risk consulting, and captives. Revenue primarily includes insurance commissions and fees for services rendered. Revenues will generally be recognized at a point in time upon the effective date of the underlying policy (or policies), or over the term of the arrangement to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenues are recorded net of allowances for estimated policy cancellations, which are determined based on an evaluation of historical and current cancellation data. Reinsurance Solutions includes treaty and facultative reinsurance brokerage and capital markets. Revenue primarily includes reinsurance commissions and fees for services rendered. Revenues will generally be recognized at a point in time upon the effective date of the underlying policy (or policies), or over the term of the arrangement to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Retirement Solutions includes core retirement, investment consulting, and talent, rewards & performance. Revenue consists primarily of fees paid by clients for consulting services, such as risk management strategies, health and benefits, and human capital consulting services. Revenue recognized for these arrangements are typically recognized at a point-in-time upon completion of the service or over time to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. For consulting arrangements recognized over-time, revenue will be recognized based on a measure of progress that depicts the transfer of control of the goods or services to the customer, utilizing an appropriate input or output measure. Fees paid by clients for consulting services are typically charged on an hourly, project or fixed-fee basis. Revenues from time-and-materials or cost-plus arrangements are recognized as services are performed. Reimbursements received for out-of-pocket expenses are recorded as a component of revenues. Health Solutions includes health and benefits brokerage and healthcare exchanges. Revenue primarily includes insurance commissions and fees for services rendered. For brokerage commissions, revenue is typically recognized at the effective date of the underlying policy (or policies), or over the term of the arrangement to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenues from health care exchange arrangements are typically recognized upon successful enrollment of participants, net of a reserve for estimated cancellations, assuming all five steps to recognize revenue have been met. Data & Analytic Services includes Affinity, Aon InPoint, and ReView. Revenue consists primarily of fees for services rendered and is generally recognized over the term of the arrangement to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. For Data & Analytic Services arrangements recognized over-time, revenue will be recognized based on a measure of progress that depicts the transfer of control of the goods or services to the customer, utilizing an appropriate input or output measure. The following table summarizes revenue from contracts with customers by principal service line (in millions): Three months ended March 31, 2018 Commercial Risk Solutions $ 1,184 Reinsurance Solutions 742 Retirement Solutions 424 Health Solutions 451 Data & Analytic Services 294 Elimination (5 ) Total revenue $ 3,090 Consolidated Revenue by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions): Three months ended March 31, 2018 United States $ 1,116 Americas other than United States 237 United Kingdom 484 Europe, Middle East, & Africa other than United Kingdom 979 Asia Pacific 274 Total revenue $ 3,090 Contract Costs The Company recognizes an asset for costs incurred to fulfill a contract for costs that are specifically identified and relate to a contract or anticipated contract, generate or enhance resources used in satisfying the Company’s performance obligations, and are expected to be recovered. Assets recognized as costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, as well as other costs, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates. The amortization is primarily included in Compensation and benefits on the Condensed Consolidated Statements of Income. The changes in the net carrying amount of capitalized cost to fulfill contracts with customers are as follows (in millions): Three months ended March 31, 2018 Balance at beginning of period $ 298 Additions 370 Amortization (432 ) Impairment — Foreign currency translation and other 4 Balance at end of period $ 240 The Company capitalizes incremental costs to obtain a contract with a customer that are expected to be recovered. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company has applied a practical expedient and recognized the costs of obtaining a contract as an expense when incurred. The amortization is included in Compensation and benefits on the Condensed Consolidated Statements of Income. The changes in the net carrying amount of capitalized cost to obtain contracts with customers are as follows (in millions): Three months ended March 31, 2018 Balance at beginning of period $ 145 Additions 8 Amortization (10 ) Impairment — Foreign currency translation and other 1 Balance at end of period $ 144 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On February 9, 2017, the Company entered into a Purchase Agreement with Tempo Acquisition, LLC (the “Purchase Agreement”) to sell its benefits administration and business process outsourcing business (the “Divested Business”) to an entity formed and controlled by affiliates of The Blackstone Group L.P. (the “Buyer”) and certain designated purchasers that are direct or indirect subsidiaries of the Buyer. On May 1, 2017, the Buyer purchased all of the outstanding equity interests of the Divested Business, plus certain related assets and liabilities, for a purchase price of $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and deferred consideration of up to $500 million (the “Transaction”). Cash proceeds after customary adjustments and before taxes due were $4.2 billion . Aon and the Buyer entered into certain transaction related agreements at the closing, including two commercial agreements, a transition services agreement, certain intellectual property license agreements, sub-leases, and other customary agreements. Aon expects to continue to be a significant client of the Divested Business and the Divested Business has agreed to use Aon for its broking and other services for a specified period of time. The financial results of the Divested Business for the three months ended March 31, 2018 and 2017 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 March 31 2018 2017 Revenue Total revenue $ — $ 527 Expenses Total operating expenses 3 470 Income (loss) from discontinued operations before income taxes (3 ) 57 Income tax expense (benefit) (1 ) 17 Income (loss) from discontinued operations excluding gain, net of tax (2 ) 40 Gain on sale of discontinued operations, net of tax 8 — Net income from discontinued operations $ 6 $ 40 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 March 31, 2018 . Total operating expenses for the three months ended March 31, 2017 include $8 million of depreciation of fixed assets and $11 million of intangible asset amortization. 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 March 31, 2017 was $18 million . Total proceeds received for the sale of the divested business and taxes paid as a result of the sale are recognized on the Consolidated Statements of Cash Flows in Cash provided by investing activities - continuing operations and Cash provided by operating activities - continuing operations, respectively. |
Cash and Cash Equivalents and S
Cash and Cash Equivalents and Short-term Investments | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 , Cash and cash equivalents and Short-term investments were $715 million compared to $1,285 million at December 31, 2017 , a decrease of $570 million . Of the total balances, $102 million and $96 million was restricted as to its use at March 31, 2018 and December 31, 2017 , respectively. Included within the March 31, 2018 and December 31, 2017 balances, respectively, was £42.7 million ( $60.8 million at March 31, 2018 exchange rates and $57.1 million at December 31, 2017 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31 2018 2017 Foreign currency remeasurement gain (loss) $ (16 ) $ (10 ) Loss on disposal of business (1 ) (2 ) Pension and other postretirement income 2 8 Equity earnings (losses) 1 6 Gain (loss) on financial instruments — (4 ) Other (1 ) — Total $ (15 ) $ (2 ) Condensed Consolidated Statements of Financial Position Information Allowance for Doubtful Accounts An analysis of the allowance for doubtful accounts are as follows (in millions): Three months ended March 31 2018 2017 Balance at beginning of period $ 59 $ 56 Provision charged to Other general expenses 8 6 Accounts written off, net of recoveries (3 ) (3 ) Foreign currency translation 1 2 Balance at end of period $ 65 $ 61 Other Current Assets The components of Other current assets are as follows (in millions): As of March 31, December 31, Taxes receivable $ 118 $ 114 Prepaid expenses 142 126 Receivables from the Divested Business (1) 6 28 Cost to fulfill contracts with customers (2) 240 — Other 103 21 Total $ 609 $ 289 (1) Refer to Note 4 “Discontinued Operations” for additional information. (2) Refer to Note 3 “Revenue from Contracts with Customers” for additional information. Other Non-Current Assets The components of Other non-current assets are as follows (in millions): As of March 31, December 31, Investments $ 58 $ 57 Taxes receivable 83 84 Cost to obtain contracts with customers (1) 144 — Other 154 166 Total $ 439 $ 307 (1) Refer to Note 3 “Revenue from Contracts with Customers” for additional information. Other Current Liabilities The components of Other current liabilities are as follows (in millions): As of March 31, December 31, Deferred revenue (1) $ 329 $ 311 Taxes payable (2) 164 139 Other 479 420 Total $ 972 $ 870 (1) During the three months ended March 31, 2018, $100 million was recognized in the Condensed Consolidated Statement of Income. (2) Includes a provisional estimate of $42 million for the current portion of the Transition Tax as of March 31, 2018 and December 31, 2017 . Other Non-Current Liabilities The components of Other non-current liabilities are as follows (in millions): As of March 31, December 31, Taxes payable (1) $ 538 $ 529 Deferred revenue 56 49 Leases 156 153 Compensation and benefits 62 67 Other 293 304 Total $ 1,105 $ 1,102 ( 1) Includes a provisional estimate of $222 million for the non-current portion of the Transition Tax as of March 31, 2018 and December 31, 2017 . |
Acquisitions and Dispositions o
Acquisitions and Dispositions of Businesses | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions of Businesses | Acquisitions and Dispositions of Businesses Acquisitions The Company completed three acquisitions during the three months ended March 31, 2018 and seventeen acquisitions during the twelve months ended December 31, 2017 . 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): Three months ended March 31, 2018 Cash $ 26 Deferred and contingent consideration 3 Aggregate consideration transferred $ 29 Assets acquired: Receivables, net 2 Goodwill 12 Intangible assets, net 16 Other assets 3 Total assets acquired 33 Liabilities assumed: Current liabilities 4 Total liabilities assumed 4 Net assets acquired $ 29 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. 2018 Acquisitions On March 1, 2018, the Company completed the transaction to acquire the business and assets of the trade credit business of Niche International Business Proprietary Limited, a trade credit brokerage based in Johannesburg, South Africa. On March 1, 2018, the Company completed the transaction to acquire Affinity Risk Partners (Brokers) Pty. Ltd., an insurance broker in Victoria, Australia. On January 19, 2018, the Company completed the transaction to acquire substantially all of the assets of The Burchfield Group, a provider in pharmacy benefit consulting, auditing, and health plan compliance services based in the United States. 2017 Acquisitions On December 29, 2017, the Company completed the transaction to acquire the Townsend Group, a U.S.-based provider of global investment management and advisory services primarily focused on real estate. On December 29, 2017, the Company completed the transaction to acquire Baltolink UADBB, a regional broker based in Lithuania. On December 19, 2017, the Company completed the transaction to acquire a client register of Grant Liddell Financial Advisor Services Pty Ltd in Australia. On December 1, 2017, the Company completed the transaction to acquire Henderson Insurance Brokers Limited, an independent insurance broking firm based in the United Kingdom. On November 30, 2017, the Company completed the transaction to acquire Unidelta AG, an insurance broker located in Switzerland. On October 31, 2017, the Company completed the transaction to acquire Unirobe Meeùs Groep, an insurance broker based in the Netherlands. On October 31, 2017, the Company completed the transaction to acquire Lenzi Paolo Broker di Assicurazioni S.r.l., an insurance broker based in Italy. On October 26, 2017, the Company completed the transaction to acquire Nauman Insurance Brokers Limited, an insurance broker based in New Zealand. On October 2, 2017, the Company completed the transaction to acquire Portus Consulting, an independent employee benefits firm based in the United Kingdom. On August 31, 2017, the Company completed the transaction to acquire Mark Kelly Insurance and Financial Services PTY LTD, an Australia-based broker servicing the insurance needs of commercial clients in and around the Townsville regional center. On August 28, 2017, the Company completed the transaction to acquire a certain portfolio in the Charlotte office of The Hays Group, Inc. d/b/a Hays Companies. On July 27, 2017, the Company completed the transaction to acquire Grupo Innovac Sociedad de Correduría de Seguros, S.A, an insurance broker based in Valencia, Spain. On July 3, 2017, the Company completed the transaction to acquire PWZ AG, an independent insurance broker based in Zurich, Switzerland. On May 31, 2017, the Company completed the transaction to acquire SchneiderGolling IFFOXX Assekuranzmakler AG and SchneiderGolling Industrie Assekuranzmaklergesellschaft mbH from SchneiderGolling Gruppe, a property and casualty broker based in Southern Germany. On May 2, 2017, the Company completed the transaction to acquire cut-e Assessment Global Holdings Limited, a high-volume online psychometric assessments provider based in Ireland. On March 3, 2017, the Company completed the transaction to acquire Finaccord Limited, a market research, publishing and consulting company based in the United Kingdom. On January 19, 2017, the Company completed the transaction to acquire VERO Management AG, an insurance broker and risk advisor based in Austria. Dispositions The Company completed no dispositions during the three months ended March 31, 2018 and three dispositions during the three months ended March 31, 2017 . Total pretax losses recognized were $1 million for the three months ended March 31, 2018 related to prior period transactions. Total pretax losses recognized were $2 million for the three months ended March 31, 2017 . 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 4,200 to 4,800 role eliminations. The Restructuring Plan is expected to result in cumulative costs of approximately $1,025 million through the end of the plan, consisting of approximately $450 million in employee termination costs, $130 million in technology rationalization costs, $85 million in lease consolidation costs, $50 million in non-cash asset impairments, and $310 million in other costs, including certain separation costs associated with the sale of the Divested Business. From the inception of the Restructuring Plan through March 31, 2018 , the Company has eliminated 3,123 positions and incurred total expenses of $571 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 March 31, 2018 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 March 31, 2018 Inception to Date Estimated Remaining Costs Estimated Total Cost (1) Workforce reduction $ 33 $ 332 $ 118 $ 450 Technology rationalization (2) 10 43 87 130 Lease consolidation (2) 3 11 74 85 Asset impairments 1 27 23 50 Other costs associated with restructuring and separation (2) (3) 27 158 152 310 Total restructuring and related expenses $ 74 $ 571 $ 454 $ 1,025 (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 were $1 million for the three months ended March 31, 2018 and $2 million since inception. Contract termination costs included within Lease consolidations were $2 million for the three months ended March 31, 2018 and $10 million since inception. Contract termination costs included within Other costs associated with restructuring and separation were $4 million for the three months ended March 31, 2018 and $7 million since inception. 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 $15 million , $80 million , and $80 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 March 31, 2018 are as follows (in millions): Balance as of December 31, 2017 $ 186 Expensed 74 Cash payments (98 ) Foreign currency translation and other (2 ) Balance as of March 31, 2018 $ 160 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
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 three months ended March 31, 2018 are as follows (in millions): Balance as of December 31, 2017 $ 8,358 Goodwill related to current year acquisitions 12 Goodwill related to prior year acquisitions 4 Foreign currency translation and other 176 Balance as of March 31, 2018 $ 8,550 Other intangible assets by asset class are as follows (in millions): March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization and Impairment Net Carrying Amount Gross Carrying Amount Accumulated Net Carrying Amount Customer related and contract based $ 2,615 $ 1,496 $ 1,119 $ 2,550 $ 1,415 $ 1,135 Tradenames 1,052 589 463 1,047 533 514 Technology and other 426 346 80 416 332 84 Total $ 4,093 $ 2,431 $ 1,662 $ 4,013 $ 2,280 $ 1,733 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. The estimated future amortization for finite lived intangible assets as of March 31, 2018 is as follows (in millions): Remainder of 2018 $ 332 2019 430 2020 252 2021 151 2022 101 Thereafter 396 Total $ 1,662 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Notes On March 8, 2018, the Company’s CAD 375 million ( $291 million at March 8, 2018 Exchange Rates) 4.76% Senior Note due March 2018 issued by a Canadian subsidiary of Aon Corporation matured and were repaid in full. Revolving Credit Facilities As of March 31, 2018 , Aon plc had two primary committed credit facilities outstanding: its $900 million multi-currency U.S. credit facility expiring in February 2021 (the “2021 Facility”) and its $400 million multi-currency U.S. credit facility expiring in October 2022 (the “2022 Facility”). Each of these facilities 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 March 31, 2018 , Aon did not have borrowings under the 2021 Facility or the 2022 Facility, and was in compliance with all covenants contained therein during the three months ended March 31, 2018 . Commercial Paper Aon Corporation, a wholly-owned subsidiary of Aon plc, has established a U.S. commercial paper program and Aon plc has established a European multi-currency commercial paper program (collectively, the “CP Programs”). Commercial paper may be issued in aggregate principal amounts of up to $900 million under the U.S. program and €300 million under the European program , not to exceed the amount of committed credit, which was $1.3 billion at March 31, 2018 . The U.S. commercial paper program is fully and unconditionally guaranteed by Aon plc and the European commercial paper program is fully and unconditionally guaranteed by Aon Corporation. Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Condensed Consolidated Statements of Financial Position, is as follows (in millions): As of March 31, 2018 December 31, 2017 Commercial paper outstanding $ 399 $ — The weighted average commercial paper outstanding and its related interest rates are as follows (in millions except percentages): Three months ended March 31 2018 2017 Weighted average commercial paper outstanding $ 125 $ 367 Weighted average interest rate of commercial paper outstanding (0.50 )% 0.12 % |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate on net income from continuing operations was 15.9% for the three months ended March 31, 2018 . The effective tax rate on net income from continuing operations was 0.1% for the three months ended March 31, 2017 . For the three months ended March 31, 2018 , the tax rate was primarily driven by the geographical distribution of income, changes to tax laws as a result of the Tax Cuts and Jobs Act (“U.S. Tax Reform”), and certain discrete items including the impact of share-based payments and the recognition of previously unrecognized tax benefits related to the statute of limitations expiration following an audit. For the three months ended March 31, 2017 , the tax rate was primarily driven by the geographical distribution of income, including the estimated impact of the Restructuring Program and accelerated amortization of tradenames, and the impact of share-based payments. On December 22, 2017, U.S. Tax Reform was enacted which significantly changed U.S. corporate income tax laws. Also on December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant did not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of U.S. Tax Reform in the period of enactment. SAB 118 allowed registrants to record provisional amounts during a one year measurement period. In the fourth quarter of 2017, a net provisional charge of $345 million was recorded which included the transition tax, the re-measurement of existing deferred tax balances, as well as local country income taxes, state income taxes and withholding taxes expected to be due upon repatriation of the earnings subject to the transition tax. In addition, the Company was unable to estimate the allocation between continuing and discontinued operations of the tax benefit from foreign tax credits generated in 2017 and related valuation allowance release. In the first quarter of 2018, the Company continued to analyze the impacts of U.S. Tax Reform and did not record any significant adjustments to its provisional estimates. The Company will finalize the provisional estimates by the end of 2018 after completing its reviews, analyzing guidance issued during the measurement period, and evaluating the local tax rules where the Company has pools of undistributed earnings within our complex legal entity structure. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 , the Company repurchased 3.9 million shares at an average price per share of $140.94 , for a total cost of approximately $550 million and recorded an additional $2.8 million of costs associated with the repurchases to retained earnings. In the three months ended March 31, 2017 , the Company repurchased 1.1 million shares at an average price per share of $114.46 for a total cost of approximately $125 million and recorded an additional $0.6 million of costs associated with the repurchases to retained earnings. At March 31, 2018 , the remaining authorized amount for share repurchase under the Repurchase Program was $4.9 billion . Under the Repurchase Program, the Company has repurchased a total of 112.1 million shares for an aggregate cost of approximately $10.1 billion . Net Income Per Share Weighted average ordinary shares outstanding are as follows (in millions): Three months ended March 31 2018 2017 Basic weighted average ordinary shares outstanding 248.5 264.8 Dilutive effect of potentially issuable shares 1.7 2.2 Diluted weighted average ordinary shares outstanding 250.2 267.0 Potentially issuable shares are not included in the computation of diluted net income per share if their inclusion would be antidilutive. There were 0.1 million shares excluded from the calculation for the three months ended March 31, 2018 and no shares excluded from the calculation for the three months ended March 31, 2017 . 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, 2017 $ (25 ) $ (879 ) $ (2,592 ) $ (3,496 ) Adoption of new accounting guidance (3) (1 ) — — (1 ) Balance at January 1, 2018 (26 ) (879 ) (2,592 ) (3,497 ) Other comprehensive income before reclassifications, net 11 244 22 277 Amounts reclassified from accumulated other comprehensive loss: Amounts reclassified from accumulated other comprehensive income 4 — 34 38 Tax expense (1 ) — (8 ) (9 ) Amounts reclassified from accumulated other comprehensive income, net 3 — 26 29 Net current period other comprehensive income 14 244 48 306 Balance at March 31, 2018 $ (12 ) $ (635 ) $ (2,544 ) $ (3,191 ) (1) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense) , Other general expenses , and Compensation and benefits . See Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivative and hedging activity. (2) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense). (3) Refer to Note 2 “Accounting Principles and Practices” for further information. |
Employee Benefits
Employee Benefits | 3 Months Ended |
Mar. 31, 2018 | |
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 for Aon’s material U.K., U.S., and other significant international pension plans located in the Netherlands and Canada. Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions): Three months ended March 31 U.K. U.S. Other 2018 2017 2018 2017 2018 2017 Service cost $ — $ — $ — $ — $ — $ — Interest cost 29 30 25 24 7 6 Expected return on plan assets, net of administration expenses (51 ) (48 ) (36 ) (35 ) (12 ) (11 ) Amortization of net actuarial loss 8 7 15 13 3 3 Net periodic cost (benefit) (14 ) (11 ) 4 2 (2 ) (2 ) Loss on pension settlement 7 — — — — — Total net periodic cost (benefit) $ (7 ) $ (11 ) $ 4 $ 2 $ (2 ) $ (2 ) In March 2017, the Company approved a plan to offer a voluntary one-time lump sum payment option to certain eligible employees of the Company’s U.K. pension plans that, if accepted, would settle the Company’s pension obligations to them. The lump sum cash payment offer will close during 2018. In total for 2018, lump sum payments from plan assets of £48 million ( $68 million using March 31, 2018 exchange rates) were paid. As a result of this settlement, the Company remeasured the assets and liabilities of the U.K. pension plan during the first quarter of 2018, which in aggregate resulted in a reduction to the projected benefit obligation of £44 million ( $63 million using March 31, 2018 exchange rates) as well as a non-cash settlement charge of £5 million ( $7 million using average March 31, 2018 exchange rate) in the first quarter of 2018. Additional non-cash settlement charges are expected in 2018. Contributions The Company expects to make cash contributions of approximately $92 million , $63 million , and $22 million , based on exchange rates as of December 31, 2017 , to its significant U.K., U.S., and other significant international pension plans, respectively, during 2018. During the three months ended March 31, 2018 , cash contributions of $23 million , $17 million , and $8 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the three months ended March 31, 2017 , cash contributions of $16 million , $13 million , and $2 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31 2018 2017 Restricted share units (“RSUs”) $ 58 $ 55 Performance share awards (“PSAs”) 16 19 Employee share purchase plans 3 4 Total share-based compensation expense $ 77 $ 78 Restricted Share Units RSUs generally vest between three and five years. The fair value of RSUs is based upon the market value of Aon plc ordinary shares at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all non-vested awards. Compensation expense associated with RSUs is recognized on a straight-line basis over the requisite service period. Dividend equivalents are paid on certain RSUs, based on the initial grant amount. The following table summarizes the status of the Company’s RSUs, including shares related to the Divested Business (shares in thousands, except fair value): 2018 2017 Shares Fair Value at Date of Grant Shares Fair Value at Date of Grant Non-vested at beginning of period 4,849 $ 104 6,195 $ 89 Granted 505 144 614 119 Vested (806 ) 101 (960 ) 90 Forfeited (63 ) 105 (50 ) 91 Non-vested at end of period 4,485 $ 109 5,799 $ 92 Unamortized deferred compensation expense amounted to $352 million as of March 31, 2018 , with a remaining weighted-average amortization period of approximately 2.0 years . Performance Share Awards The vesting of PSAs is contingent upon meeting a cumulative level of earnings per share related performance over a three -year period. The actual issue of shares may range from 0 - 200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of PSAs is based upon the market price of Aon plc ordinary shares at the date of grant. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits in the Condensed Consolidated Statements of Income, if necessary. Dividend equivalents are not paid on PSAs. Information as of March 31, 2018 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the three months ended March 31, 2018 and the years ended December 31, 2017 and 2016 , respectively, is as follows (shares in thousands and dollars in millions, except fair value): March 31, December 31, December 31, Target PSAs granted during period 561 548 750 Weighted average fair value per share at date of grant $ 135 $ 114 $ 100 Number of shares that would be issued based on current performance levels 561 942 745 Unamortized expense, based on current performance levels $ 75 $ 68 $ 19 |
Derivatives and Hedging
Derivatives and Hedging | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the 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 Net Amount of Derivative Assets Presented in the Statements of Financial Position (1) Net Amount of Derivative Liabilities Presented in the Statements of Financial Position (2) March 31, December 31, March 31, December 31, March 31, December 31, Foreign exchange contracts Accounted for as hedges $ 758 $ 701 $ 45 $ 31 $ 1 $ 3 Not accounted for as hedges (3) 329 254 1 1 1 3 Total $ 1,087 $ 955 $ 46 $ 32 $ 2 $ 6 (1) Included within Other current assets ( $13 million at March 31, 2018 and $9 million at December 31, 2017 ) or Other non-current assets ( $33 million at March 31, 2018 and $23 million at December 31, 2017 ). (2) Included within Other current liabilities ( $1 million at March 31, 2018 and $3 million at December 31, 2017 ) or Other non-current liabilities ( $1 million at March 31, 2018 and $3 million at December 31, 2017 ). (3) These contracts typically are for 30 day durations and executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date. The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements are as follows (in millions): Three Months Ended March 31, 2018 March 31, 2017 Gain (Loss) Recognized in Accumulated Other Comprehensive Loss $ 14 $ 6 Location of future reclassification from Accumulated Other Comprehensive Loss Compensation and benefits $ — $ 8 Other general expenses $ 4 $ 1 Other income (expense) $ 10 $ (3 ) The amounts of derivative gains (loss) reclassified from Accumulated other comprehensive loss into the Condensed Consolidated Statements of Income (effective portion) are as follows (in millions): Three Months Ended March 31, 2018 March 31, 2017 Compensation and benefits $ 1 $ 13 Other general expenses (1 ) (1 ) Interest expense (1 ) — Other income (expense) (3 ) (2 ) Total $ (4 ) $ 10 The Company estimates that approximately $2 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 months ended March 31, 2018 and 2017 was insignificant. During the three months ended March 31, 2018 , the Company recorded a gain of $9 million in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. During the three months ended March 31, 2017 , the Company recorded a gain of $1 million in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. Net Investments in Foreign Operations Risk Management The Company uses non-derivative financial instruments to protect the value of its investments in a number of foreign subsidiaries. In 2016, the Company designated a portion of its Euro-denominated commercial paper issuances as a non-derivative hedge of the foreign currency exposure of a net investment in its European operations. The change in fair value of the designated portion of the Euro-denominated commercial paper due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustment, a component of Accumulated other comprehensive loss, to the extent it is effective as a hedge. The foreign currency translation adjustment of the hedged net investments that is also recorded in Accumulated other comprehensive loss. Ineffective portions of net investment hedges, if any, are reclassified from Accumulated other comprehensive loss into earnings during the period of change. As of March 31, 2018 , the Company has €220 million ( $274 million at March 31, 2018 exchange rates) of outstanding Euro-denominated commercial paper designated as a hedge of the foreign currency exposure of its net investment in its European operations. As of March 31, 2018 , the unrealized loss recognized in Accumulated other comprehensive loss related to the net investment non derivative hedging instrument was $3 million . The Company did not reclassify any deferred gains or losses related to net investment hedges from Accumulated other comprehensive loss to earnings during the three months ended March 31, 2018 and 2017. In addition, the Company did not incur any ineffectiveness related to net investment hedges during the three months ended March 31, 2018 and 2017. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
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 Condensed 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 March 31, 2018 and December 31, 2017 (in millions): Fair Value Measurements Using Balance at March 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 1,502 $ 1,502 $ — $ — Other investments: Government bonds $ 1 $ — $ 1 $ — Equity investments $ 3 $ — $ 3 $ — Derivatives: (2) Gross foreign exchange contracts $ 54 $ — $ 54 $ — Liabilities: Derivatives: (2) Gross foreign exchange contracts $ 8 $ — $ 8 $ — (1) Included within Fiduciary assets or Short-term investments in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. Fair Value Measurements Using Balance at December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 1,847 $ 1,847 $ — $ — Other investments: Government bonds $ 1 $ — $ 1 $ — Equity investments $ 4 $ — $ 4 $ — Derivatives: (2) Gross foreign exchange contracts $ 33 $ — $ 33 $ — Liabilities: Derivatives: (2) Gross foreign exchange contracts $ 6 $ — $ 6 $ — (1) Included within Fiduciary assets or Short-term investments in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. There were no transfers of assets or liabilities between fair value hierarchy levels in either the three months ended March 31, 2018 or 2017 . The Company recognized no realized or unrealized gains or losses in the Condensed Consolidated Statements of Income during either the three months ended March 31, 2018 or 2017 , 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): March 31, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value Current portion of long-term debt $ — $ — $ 299 $ 301 Long-term debt $ 5,697 $ 6,077 $ 5,667 $ 6,267 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
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 Condensed Consolidated Statements of Financial Position and have been recognized in Other general expenses in the Condensed 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 . On January 26, 2018, the Tennessee Court of Appeals reversed and remanded, reversing summary judgment in favor of plaintiffs and concluding that coverage is limited to $50 million . 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 ( $64 million at March 31, 2018 exchange rates). In December 2014, the Court of Appeal granted the employer leave to appeal the High Court decision. At a hearing in October 2016, the Court of Appeal approved a settlement of the pending litigation. On October 31, 2016, the fund’s trustees and employer sued Aon in the High Court, Chancery Division, London, alleging negligence and breach of duty in relation to the governing documents. The proceedings were served on Aon on December 20, 2016. The claimants seek damages of approximately £70 million ( $100 million at March 31, 2018 exchange rates). In February 2018, the claimants instructed new lawyers and notified Aon that the claimants intend to add their previous lawyers as defendants to the Aon lawsuit. Claimants will allege that the previous lawyers were responsible for some of the losses sought from Aon because the lawyers gave negligent legal advice during the course of the High Court and Court of Appeal proceedings. The addition of the new parties will delay any potential trial until 2019. Aon believes that it has meritorious defenses and intends to vigorously defend itself against this claim. On June 29, 2015, Lyttelton Port Company Limited (“LPC”) sued Aon New Zealand in the Christchurch Registry of the High Court of New Zealand. LPC alleges, among other things, that Aon was negligent and in breach of contract in arranging LPC’s property insurance program for the period covering June 30, 2010, to June 30, 2011. LPC contends that acts and omissions by Aon caused LPC to recover less than it otherwise would have from insurers for losses suffered in the 2010 and 2011 Canterbury earthquakes. LPC claims damages of approximately NZD 184 million ( $134 million at March 31, 2018 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. On October 3, 2017, Christchurch City Council (“CCC”) invoked arbitration to pursue a claim that it asserts against Aon New Zealand. Aon provided insurance broking services to CCC in relation to CCC’s 2010-2011 material damage and business interruption program. In December 2015, CCC settled its property and business interruption claim for its losses arising from the 2010-2011 Canterbury earthquakes against the underwriter of its material damage and business interruption program and the reinsurers of that underwriter. CCC contends that acts and omissions by Aon caused CCC to recover less in that settlement than it otherwise would have. CCC claims damages of approximately NZD 528 million ( $385 million at March 31, 2018 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. 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 March 31, 2018 , the undiscounted maximum potential future payments under the lease guarantee is $97 million , with an estimated fair value of $22 million . No cash payments were made in connection to the lease commitments during the three months ended March 31, 2018 . Additionally, the Company is subject to performance guarantee requirements under certain client arrangements that were assumed by the Buyer. Should the Divested Business fail to perform as required by the terms of the arrangements, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023. As of March 31, 2018 , the undiscounted maximum potential future payments under the performance guarantees were $206 million , with an estimated fair value of $1 million . No cash payments were made in connection to the performance guarantees during the three months ended March 31, 2018 . Letters of Credit Aon has entered into a number of arrangements whereby the Company’s performance on certain obligations is guaranteed by a third party through the issuance of letters of credit (“LOCs”). The Company had total LOCs outstanding of approximately $117 million at March 31, 2018 , compared to $96 million at December 31, 2017 . These letters of credit cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries. Premium Payments The Company has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies. The maximum exposure with respect to such contractual contingent guarantees was approximately $68 million at March 31, 2018 compared to $95 million at December 31, 2017 . |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates as one segment that includes all of Aon’s continuing operations, which as a global professional services firm provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines which make up its principal products and services. The CODM assesses the performance of the Company and allocates resources based on one Segment: Aon United. The Company’s reportable operating segment has been determined using a management approach, which is consistent with the basis and manner in which Aon’s CODM uses financial information for the purposes of allocating resources and evaluating performance. The CODM assesses performance and allocates resources based on total Aon results against its key four metrics, including organic revenue growth, expense discipline, and collaborative behaviors that maximize value for Aon and its shareholders, regardless of which revenue line it benefits. As Aon operates as one segment, segment profit or loss is consistent with consolidated reporting as disclosed on the Condensed Consolidated Statements of Income. |
Guarantee of Registered Securit
Guarantee of Registered Securities | 3 Months Ended |
Mar. 31, 2018 | |
Guarantee of Registered Securities [Abstract] | |
Guarantee of Registered Securities | Guarantee of Registered Securities As described in Note 17 “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 Corporation 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 Corporation 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”). All guarantees of Aon Corporation are 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 months ended March 31, 2018 and 2017 , Condensed Consolidating Statements of Comprehensive Income for the three months ended March 31, 2018 and 2017 , Condensed Consolidating Statements of Financial Position as of March 31, 2018 and December 31, 2017 , and Condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2018 and 2017 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. Condensed Consolidating Statement of Income Three months ended March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenue Total revenue $ — $ — $ 3,090 $ — $ 3,090 Expenses Compensation and benefits 19 1 1,596 — 1,616 Information technology — — 115 — 115 Premises — — 93 — 93 Depreciation of fixed assets — — 39 — 39 Amortization and impairment of intangible assets — — 110 — 110 Other general expenses 1 — 317 — 318 Total operating expenses 20 1 2,270 — 2,291 Operating income (loss) (20 ) (1 ) 820 — 799 Interest income — 14 — (10 ) 4 Interest expense (49 ) (24 ) (7 ) 10 (70 ) Intercompany interest income (expense) 4 (128 ) 124 — — Intercompany other income (expense) (71 ) (5 ) 76 — — Other income (expense) (7 ) (6 ) (5 ) 3 (15 ) Income (loss) from continuing operations before income taxes (143 ) (150 ) 1,008 3 718 Income tax expense (benefit) (16 ) (27 ) 157 — 114 Net income (loss) from continuing operations (127 ) (123 ) 851 3 604 Income from discontinued operations, net of tax — — 6 — 6 Net income (loss) before equity in earnings of subsidiaries (127 ) (123 ) 857 3 610 Equity in earnings of subsidiaries, net of tax 718 704 581 (2,003 ) — Net income 591 581 1,438 (2,000 ) 610 Less: Net income attributable to noncontrolling interests — — 16 — 16 Net income attributable to Aon shareholders $ 591 $ 581 $ 1,422 $ (2,000 ) $ 594 Condensed Consolidating Statement of Income Three months ended March 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenue Total revenue $ — $ — $ 2,381 $ — $ 2,381 Expenses Compensation and benefits 52 3 1,414 — 1,469 Information technology — — 88 — 88 Premises — — 84 — 84 Depreciation of fixed assets — — 54 — 54 Amortization and impairment of intangible assets — — 43 — 43 Other general expenses 5 2 301 — 308 Total operating expenses 57 5 1,984 — 2,046 Operating income (loss) (57 ) (5 ) 397 — 335 Interest income — 6 (2 ) (2 ) 2 Interest expense (45 ) (24 ) (3 ) 2 (70 ) Intercompany interest income (expense) 3 (136 ) 133 — — Intercompany other income (expense) (50 ) 7 43 — — Other income (expense) (10 ) 9 (9 ) 8 (2 ) Income (loss) from continuing operations before income taxes (159 ) (143 ) 559 8 265 Income tax expense (benefit) (14 ) (54 ) 68 — — Net income (loss) from continuing operations (145 ) (89 ) 491 8 265 Income from discontinued operations, net of tax — — 40 — 40 Net income (loss) before equity in earnings of subsidiaries (145 ) (89 ) 531 8 305 Equity in earnings of subsidiaries, net of tax 428 271 182 (881 ) — Net income 283 182 713 (873 ) 305 Less: Net income attributable to noncontrolling interests — — 14 — 14 Net income attributable to Aon shareholders $ 283 $ 182 $ 699 $ (873 ) $ 291 Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income $ 591 $ 581 $ 1,438 $ (2,000 ) $ 610 Less: Net income attributable to noncontrolling interests — — 16 — 16 Net income attributable to Aon shareholders 591 581 1,422 (2,000 ) 594 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 3 11 — 14 Foreign currency translation adjustments — — 250 (3 ) 247 Postretirement benefit obligation — 11 37 — 48 Total other comprehensive income — 14 298 (3 ) 309 Equity in other comprehensive income of subsidiaries, net of tax 309 285 299 (893 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 3 — 3 Total other comprehensive income attributable to Aon shareholders 309 299 594 (896 ) 306 Comprehensive income attributable to Aon shareholders $ 900 $ 880 $ 2,016 $ (2,896 ) $ 900 Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income $ 283 $ 182 $ 713 $ (873 ) $ 305 Less: Net income attributable to noncontrolling interests — — 14 — 14 Net income attributable to Aon shareholders 283 182 699 (873 ) 291 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — (2 ) — — (2 ) Foreign currency translation adjustments — — 155 (8 ) 147 Postretirement benefit obligation — 8 10 — 18 Total other comprehensive income — 6 165 (8 ) 163 Equity in other comprehensive income of subsidiaries, net of tax 170 164 170 (504 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 1 — 1 Total other comprehensive income attributable to Aon shareholders 170 170 334 (512 ) 162 Comprehensive income attributable to Aon shareholders $ 453 $ 352 $ 1,033 $ (1,385 ) $ 453 Condensed Consolidating Statement of Financial Position As of March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ — $ 2,603 $ 640 $ (2,646 ) $ 597 Short-term investments — 1 117 — 118 Receivables, net — 1 3,052 — 3,053 Fiduciary assets — — 10,738 — 10,738 Current intercompany receivables 186 2,355 10,953 (13,494 ) — Other current assets 1 19 589 — 609 Total Current Assets 187 4,979 26,089 (16,140 ) 15,115 Goodwill — — 8,550 — 8,550 Intangible assets, net — — 1,662 — 1,662 Fixed assets, net — — 578 — 578 Deferred tax assets 99 391 57 (251 ) 296 Non-current intercompany receivables 426 261 8,247 (8,934 ) — Prepaid pension — 6 1,201 — 1,207 Other non-current assets 1 32 406 — 439 Investment in subsidiary 10,406 19,124 1,311 (30,841 ) — TOTAL ASSETS $ 11,119 $ 24,793 $ 48,101 $ (56,166 ) $ 27,847 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 896 $ 12 $ 3,283 $ (2,646 ) $ 1,545 Short-term debt and current portion of long-term debt 374 26 3 — 403 Fiduciary liabilities — — 10,738 — 10,738 Current intercompany payables 262 12,098 1,134 (13,494 ) — Other current liabilities — 65 907 — 972 Total Current Liabilities 1,532 12,201 16,065 (16,140 ) 13,658 Long-term debt 4,282 1,414 1 — 5,697 Deferred tax liabilities — — 494 (251 ) 243 Pension, other postretirement and other post-employment liabilities — 1,365 394 — 1,759 Non-current intercompany payables — 8,412 522 (8,934 ) — Other non-current liabilities 4 90 1,011 — 1,105 TOTAL LIABILITIES 5,818 23,482 18,487 (25,325 ) 22,462 TOTAL AON SHAREHOLDERS’ EQUITY 5,301 1,311 29,530 (30,841 ) 5,301 Noncontrolling interests — — 84 — 84 TOTAL EQUITY 5,301 1,311 29,614 (30,841 ) 5,385 TOTAL LIABILITIES AND EQUITY $ 11,119 $ 24,793 $ 48,101 $ (56,166 ) $ 27,847 Condensed Consolidating Statement of Financial Position As of December 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ 1 $ 2,524 $ 793 $ (2,562 ) $ 756 Short-term investments — 355 174 — 529 Receivables, net — 2 2,476 — 2,478 Fiduciary assets — — 9,625 — 9,625 Current intercompany receivables 165 1,046 10,824 (12,035 ) — Other current assets 1 29 259 — 289 Total Current Assets 167 3,956 24,151 (14,597 ) 13,677 Goodwill — — 8,358 — 8,358 Intangible assets, net — — 1,733 — 1,733 Fixed assets, net — — 564 — 564 Deferred tax assets 99 396 143 (249 ) 389 Non-current intercompany receivables 414 261 8,232 (8,907 ) — Prepaid pension — 6 1,054 — 1,060 Other non-current assets 1 35 271 — 307 Investment in subsidiary 8,884 17,910 20 (26,814 ) — TOTAL ASSETS $ 9,565 $ 22,564 $ 44,526 $ (50,567 ) $ 26,088 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 574 $ 36 $ 3,913 $ (2,562 ) $ 1,961 Short-term debt and current portion of long-term debt — — 299 — 299 Fiduciary liabilities — — 9,625 — 9,625 Current intercompany payables 130 11,149 756 (12,035 ) — Other current liabilities 16 64 790 — 870 Total Current Liabilities 720 11,249 15,383 (14,597 ) 12,755 Long-term debt 4,251 1,415 1 — 5,667 Deferred tax liabilities — — 376 (249 ) 127 Pension, other postretirement and other post-employment liabilities — 1,391 398 — 1,789 Non-current intercompany payables — 8,398 509 (8,907 ) — Other non-current liabilities 11 91 1,000 — 1,102 TOTAL LIABILITIES 4,982 22,544 17,667 (23,753 ) 21,440 TOTAL AON SHAREHOLDERS’ EQUITY 4,583 20 26,794 (26,814 ) 4,583 Noncontrolling interests — — 65 — 65 TOTAL EQUITY 4,583 20 26,859 (26,814 ) 4,648 TOTAL LIABILITIES AND EQUITY $ 9,565 $ 22,564 $ 44,526 $ (50,567 ) $ 26,088 Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ (21 ) $ 626 $ 277 $ (742 ) $ 140 Cash provided by operating activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (21 ) 626 277 (742 ) 140 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 10 7 — 17 Payments for investments (1 ) (5 ) (6 ) 1 (11 ) Net purchases of short-term investments - non-fiduciary — 355 60 — 415 Acquisition of businesses, net of cash acquired — — (29 ) — (29 ) Sale of businesses, net of cash sold — — (1 ) — (1 ) Capital expenditures — — (45 ) — (45 ) Cash provided by (used for) investing activities - continuing operations (1 ) 360 (14 ) 1 346 Cash used for investing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (1 ) 360 (14 ) 1 346 CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (569 ) — — — (569 ) Advances from (to) affiliates 418 (933 ) (142 ) 657 — Issuance of shares for employee benefit plans (109 ) — — — (109 ) Issuance of debt 431 375 2 — 808 Repayment of debt (61 ) (349 ) (294 ) — (704 ) Cash dividends to shareholders (89 ) — — — (89 ) Noncontrolling interests and other financing activities — — — — — Cash provided by (used for) financing activities - continuing operations 21 (907 ) (434 ) 657 (663 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 21 (907 ) (434 ) 657 (663 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 18 — 18 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1 ) 79 (153 ) (84 ) (159 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1 2,524 793 (2,562 ) 756 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ — $ 2,603 $ 640 $ (2,646 ) $ 597 Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ (28 ) $ 1,117 $ 533 $ (1,440 ) $ 182 Cash provided by operating activities - discontinued operations — — 58 — 58 CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (28 ) 1,117 591 (1,440 ) 240 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 565 4 (544 ) 25 Payments for investments — (4 ) (546 ) 541 (9 ) Net sales of short-term investments - non-fiduciary — 94 — — 94 Acquisition of businesses, net of cash acquired — — (46 ) — (46 ) Sale of businesses, net of cash sold — — (2 ) — (2 ) Capital expenditures — — (34 ) — (34 ) Cash provided by (used for) investing activities - continuing operations — 655 (624 ) (3 ) 28 Cash used for investing activities - discontinued operations — — (15 ) — (15 ) CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES — 655 (639 ) (3 ) 13 CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (126 ) — — — (126 ) Advances from (to) affiliates 290 (1,990 ) (17 ) 1,717 — Issuance of shares for employee benefit plans (85 ) — — — (85 ) Issuance of debt 457 535 — — 992 Repayment of debt (421 ) (525 ) (4 ) — (950 ) Cash dividends to shareholders (87 ) — — — (87 ) Noncontrolling interests and other financing activities — — (2 ) — (2 ) Cash provided by (used for) financing activities - continuing operations 28 (1,980 ) (23 ) 1,717 (258 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 28 (1,980 ) (23 ) 1,717 (258 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 25 — 25 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS — (208 ) (46 ) 274 20 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (1) — 1,633 660 (1,862 ) 431 CASH AND CASH EQUIVALENTS AT END OF PERIOD (2) $ — $ 1,425 $ 614 $ (1,588 ) $ 451 (1) Includes $5 million of discontinued operations at December 31, 2016. (2) Includes $18 million of discontinued operations at March 31, 2017. |
Accounting Principles and Pra27
Accounting Principles and Practices (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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 Presentation of Net Periodic Pension and Postretirement Benefit Costs In March 2017, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. The Company has applied the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the 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 Company has not applied the practical expedient upon adoption of this guidance. The new guidance was effective for Aon in the first quarter of 2018. The adoption of this guidance had no impact on the net income of the Company. Upon adoption of the guidance, the presentation of the results reflect a change in Operating income offset by an equal and offsetting change in Other income (expense) for the period ended March 31, 2017 as follows: Three Months Ended As Reported Adjustments As Adjusted Operating income (1) $ 343 $ (8 ) $ 335 Other income (expense) $ (10 ) $ 8 $ (2 ) (1) Reclassification from Operating income is recorded in Compensation and benefits. Income Tax Consequences of Intercompany Transactions In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory. The guidance requires that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e. depreciated, amortized, or impaired). The Company has applied the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The new guidance was effective for Aon in the first quarter of 2018. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Deferred tax assets of $23 million , an increase to Deferred tax liabilities of $12 million , and a decrease to Other non-current assets of $26 million on the Condensed Consolidated Statement of Financial Position through a cumulative adjustment of $15 million decrease to Retained earnings. For the three months ended March 31, 2018, the impact of adopting this standard on the Condensed Consolidated Statement of Income was insignificant. Statement of Cash Flows In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity no longer has discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard was effective for the Company in the first quarter of 2018. The adoption of this guidance had no impact on the Company’s Condensed Consolidated Statements of Cash Flows. Financial Assets and Liabilities In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. The Company applied the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with the exception of the amendments related to equity securities without readily determinable fair values, including disclosure requirements, which were applied prospectively. Upon the adoption of this guidance on January 1, 2018, the Company recognized an increase to Accumulated other comprehensive loss of $1 million on the Condensed Consolidated Statement of Financial Position through a cumulative adjustment of $1 million increase to Retained earnings. For the three months ended March 31, 2018, the impact of adopting this standard on the Condensed Consolidated Statement of Income was insignificant. Revenue Recognition In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers (the “Standard” or “ASC 606”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP (“ASC 605”). The core principal of the Standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Standard also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company elected to apply the modified retrospective adoption approach to all contracts. Under this approach, prior periods were not restated. Rather, revenues and other disclosures for prior periods were provided in the notes to the financial statements as previously reported under ASC 605, and the cumulative effect of initially applying the guidance was recognized as an adjustment to Retained earnings. The following summarizes the significant changes to the Company as a result of the adoption of ASC 606 on January 1, 2018. • The Company previously recognized revenue either at a point in time or over a period of time based on the transfer of value to customers or as the remuneration became determinable. Under ASC 606, the revenue related to certain brokerage services recognized over a period of time is recognized on the effective date of the associated policies when control of the policy transfers to the customer. As a result, revenue from these arrangements are typically recognized in earlier periods under ASC 606 in comparison to ASC 605, changing the timing and amount of revenue recognized for annual and interim periods. This change resulted in a significant shift in timing of interim revenue for the Reinsurance Solutions revenue line and, to a lesser extent, certain other brokerage services. • The Standard provides guidance on accounting for certain revenue-related costs including when to capitalize costs associated with obtaining and fulfilling a contract. The majority of these costs were previously expensed as incurred under ASC 605. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, are amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company applied a practical expedient and recognizes the costs of obtaining a contract as an expense when incurred. Assets recognized as costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, as well as other costs, are amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is generally less than one year. As a result of applying the modified retrospective method to adopt ASC 606, the following adjustments were made to the Condensed Consolidated Statement of Financial position as of January 1, 2018: December 31, January 1, (millions) As Reported Adjustments As Adjusted ASSETS Receivables, net $ 2,478 $ 252 $ 2,730 Other current assets $ 289 $ 298 $ 587 Deferred tax assets 389 (128 ) 261 Other non-current assets $ 307 $ 145 $ 452 LIABILITIES Accounts payable and accrued liabilities $ 1,961 $ 8 $ 1,969 Other current liabilities $ 870 $ 13 $ 883 Deferred tax liabilities $ 127 $ 42 $ 169 Other non-current liabilities $ 1,102 $ (3 ) $ 1,099 EQUITY Total equity $ 4,648 $ 507 $ 5,155 The following tables summarize the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the three months ended March 31, 2018. Condensed Consolidated Statement of Income Three Months Ended March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 Revenue Total revenue $ 3,090 $ (413 ) $ 2,677 Expenses Compensation and benefits $ 1,616 $ (65 ) $ 1,551 Other income (expense) $ (15 ) $ 1 $ (14 ) Income taxes $ 114 $ (82 ) $ 32 Adoption of ASC 606 for the first quarter of 2018 was an impact of $265 million on net income from continuing operations, or $1.06 per share. Condensed Consolidated Statement of Financial Position As of March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 ASSETS Receivables, net $ 3,053 $ (644 ) $ 2,409 Other current assets $ 609 $ (239 ) $ 370 Deferred tax assets $ 296 $ 130 $ 426 Other non-current assets $ 439 $ (143 ) $ 296 LIABILITIES Other current liabilities $ 972 $ (52 ) $ 920 Deferred tax liabilities $ 243 $ (68 ) $ 175 Other non-current liabilities $ 1,105 $ 3 $ 1,108 EQUITY Total equity $ 5,385 $ (779 ) $ 4,606 Condensed Consolidated Statement of Cash Flows Three Months Ended March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 610 $ (265 ) $ 345 Deferred income taxes $ 26 $ (28 ) $ (2 ) Receivables, net $ (269 ) $ 400 $ 131 Accounts payable and accrued liabilities $ (439 ) $ 8 $ (431 ) Current income taxes $ 30 $ (54 ) $ (24 ) Other assets and liabilities $ 38 $ (61 ) $ (23 ) The adoption of ASC 606 had no impact on total Cash Provided by Operating Activities. Refer to Note 3 “Revenue from Contracts with Customers” to the Condensed Consolidated Financial Statements for further information. Accounting Standards Issued But Not Yet Adopted Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued amendments related to reclassification of certain tax effects from accumulated other comprehensive income. The amendments allow a reclassification from accumulated comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. In addition, the entity is required to provide certain disclosures regarding stranded tax effects. The amendments are effective for Aon in the first quarter of 2019 and early adoption is permitted, including adoption in any interim period. The amendments should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact that the amendments will have on the Condensed Consolidated Financial Statements and the period in which it plans to adopt. 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. 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. 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. 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 its 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 current U.S. GAAP standards. The new standard will be effective for the Company in the first quarter of 2019, with early application 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. The Company is currently evaluating the period of adoption. A preliminary assessment to determine the impacts of the new accounting standard has been performed, including its impact on accounting and operational processes. The Company expects to recognize significant right of use assets and lease liabilities on its Condensed Consolidated Statements of Financial Position, but is unable to provide quantitative impacts at this time. Additionally, the Company expects to expand its disclosures around lease arrangements. The Company expects to adopt the new accounting standard in the first quarter of 2019 and is currently evaluating the practical expedients that will be applied. |
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 or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the 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 Condensed 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. |
Accounting Principles and Pra28
Accounting Principles and Practices Accounting Principles and Practices (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following tables summarize the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the three months ended March 31, 2018. Condensed Consolidated Statement of Income Three Months Ended March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 Revenue Total revenue $ 3,090 $ (413 ) $ 2,677 Expenses Compensation and benefits $ 1,616 $ (65 ) $ 1,551 Other income (expense) $ (15 ) $ 1 $ (14 ) Income taxes $ 114 $ (82 ) $ 32 As a result of applying the modified retrospective method to adopt ASC 606, the following adjustments were made to the Condensed Consolidated Statement of Financial position as of January 1, 2018: December 31, January 1, (millions) As Reported Adjustments As Adjusted ASSETS Receivables, net $ 2,478 $ 252 $ 2,730 Other current assets $ 289 $ 298 $ 587 Deferred tax assets 389 (128 ) 261 Other non-current assets $ 307 $ 145 $ 452 LIABILITIES Accounts payable and accrued liabilities $ 1,961 $ 8 $ 1,969 Other current liabilities $ 870 $ 13 $ 883 Deferred tax liabilities $ 127 $ 42 $ 169 Other non-current liabilities $ 1,102 $ (3 ) $ 1,099 EQUITY Total equity $ 4,648 $ 507 $ 5,155 Condensed Consolidated Statement of Financial Position As of March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 ASSETS Receivables, net $ 3,053 $ (644 ) $ 2,409 Other current assets $ 609 $ (239 ) $ 370 Deferred tax assets $ 296 $ 130 $ 426 Other non-current assets $ 439 $ (143 ) $ 296 LIABILITIES Other current liabilities $ 972 $ (52 ) $ 920 Deferred tax liabilities $ 243 $ (68 ) $ 175 Other non-current liabilities $ 1,105 $ 3 $ 1,108 EQUITY Total equity $ 5,385 $ (779 ) $ 4,606 Three Months Ended March 31, 2018 (millions) As Reported Adjustments Balances Without Adoption of ASC 606 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 610 $ (265 ) $ 345 Deferred income taxes $ 26 $ (28 ) $ (2 ) Receivables, net $ (269 ) $ 400 $ 131 Accounts payable and accrued liabilities $ (439 ) $ 8 $ (431 ) Current income taxes $ 30 $ (54 ) $ (24 ) Other assets and liabilities $ 38 $ (61 ) $ (23 ) Upon adoption of the guidance, the presentation of the results reflect a change in Operating income offset by an equal and offsetting change in Other income (expense) for the period ended March 31, 2017 as follows: Three Months Ended As Reported Adjustments As Adjusted Operating income (1) $ 343 $ (8 ) $ 335 Other income (expense) $ (10 ) $ 8 $ (2 ) (1) Reclassification from Operating income is recorded in Compensation and benefits. |
Revenue from Contracts with C29
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Consolidated Revenue by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions): Three months ended March 31, 2018 United States $ 1,116 Americas other than United States 237 United Kingdom 484 Europe, Middle East, & Africa other than United Kingdom 979 Asia Pacific 274 Total revenue $ 3,090 The following table summarizes revenue from contracts with customers by principal service line (in millions): Three months ended March 31, 2018 Commercial Risk Solutions $ 1,184 Reinsurance Solutions 742 Retirement Solutions 424 Health Solutions 451 Data & Analytic Services 294 Elimination (5 ) Total revenue $ 3,090 |
Capitalized Contract Cost | The changes in the net carrying amount of capitalized cost to fulfill contracts with customers are as follows (in millions): Three months ended March 31, 2018 Balance at beginning of period $ 298 Additions 370 Amortization (432 ) Impairment — Foreign currency translation and other 4 Balance at end of period $ 240 The changes in the net carrying amount of capitalized cost to obtain contracts with customers are as follows (in millions): Three months ended March 31, 2018 Balance at beginning of period $ 145 Additions 8 Amortization (10 ) Impairment — Foreign currency translation and other 1 Balance at end of period $ 144 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | The following table presents the financial results of the Divested Business (in millions): Three months ended March 31 2018 2017 Revenue Total revenue $ — $ 527 Expenses Total operating expenses 3 470 Income (loss) from discontinued operations before income taxes (3 ) 57 Income tax expense (benefit) (1 ) 17 Income (loss) from discontinued operations excluding gain, net of tax (2 ) 40 Gain on sale of discontinued operations, net of tax 8 — Net income from discontinued operations $ 6 $ 40 |
Other Financial Data (Tables)
Other Financial Data (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Financial Data [Abstract] | |
Schedule of Other Income (Expense) | Other income (expense) consists of the following (in millions): Three months ended March 31 2018 2017 Foreign currency remeasurement gain (loss) $ (16 ) $ (10 ) Loss on disposal of business (1 ) (2 ) Pension and other postretirement income 2 8 Equity earnings (losses) 1 6 Gain (loss) on financial instruments — (4 ) Other (1 ) — Total $ (15 ) $ (2 ) |
Schedule of Allowance for Doubtful Accounts | An analysis of the allowance for doubtful accounts are as follows (in millions): Three months ended March 31 2018 2017 Balance at beginning of period $ 59 $ 56 Provision charged to Other general expenses 8 6 Accounts written off, net of recoveries (3 ) (3 ) Foreign currency translation 1 2 Balance at end of period $ 65 $ 61 |
Schedule of Other Current Assets | The components of Other current assets are as follows (in millions): As of March 31, December 31, Taxes receivable $ 118 $ 114 Prepaid expenses 142 126 Receivables from the Divested Business (1) 6 28 Cost to fulfill contracts with customers (2) 240 — Other 103 21 Total $ 609 $ 289 (1) Refer to Note 4 “Discontinued Operations” for additional information. (2) Refer to Note 3 “Revenue from Contracts with Customers” for additional information. |
Schedule of Other Non-current Assets | The components of Other non-current assets are as follows (in millions): As of March 31, December 31, Investments $ 58 $ 57 Taxes receivable 83 84 Cost to obtain contracts with customers (1) 144 — Other 154 166 Total $ 439 $ 307 (1) Refer to Note 3 “Revenue from Contracts with Customers” for additional information. |
Schedule of Other Current Liabilities | The components of Other current liabilities are as follows (in millions): As of March 31, December 31, Deferred revenue (1) $ 329 $ 311 Taxes payable (2) 164 139 Other 479 420 Total $ 972 $ 870 (1) During the three months ended March 31, 2018, $100 million was recognized in the Condensed Consolidated Statement of Income. (2) Includes a provisional estimate of $42 million for the current portion of the Transition Tax as of March 31, 2018 and December 31, 2017 . |
Schedule of Other Non-current Liabilities | The components of Other non-current liabilities are as follows (in millions): As of March 31, December 31, Taxes payable (1) $ 538 $ 529 Deferred revenue 56 49 Leases 156 153 Compensation and benefits 62 67 Other 293 304 Total $ 1,105 $ 1,102 ( 1) Includes a provisional estimate of $222 million for the non-current portion of the Transition Tax as of March 31, 2018 and December 31, 2017 . |
Acquisitions and Dispositions32
Acquisitions and Dispositions of Businesses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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): Three months ended March 31, 2018 Cash $ 26 Deferred and contingent consideration 3 Aggregate consideration transferred $ 29 Assets acquired: Receivables, net 2 Goodwill 12 Intangible assets, net 16 Other assets 3 Total assets acquired 33 Liabilities assumed: Current liabilities 4 Total liabilities assumed 4 Net assets acquired $ 29 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table summarizes restructuring and separation costs by type that have been incurred through March 31, 2018 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 March 31, 2018 Inception to Date Estimated Remaining Costs Estimated Total Cost (1) Workforce reduction $ 33 $ 332 $ 118 $ 450 Technology rationalization (2) 10 43 87 130 Lease consolidation (2) 3 11 74 85 Asset impairments 1 27 23 50 Other costs associated with restructuring and separation (2) (3) 27 158 152 310 Total restructuring and related expenses $ 74 $ 571 $ 454 $ 1,025 (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 were $1 million for the three months ended March 31, 2018 and $2 million since inception. Contract termination costs included within Lease consolidations were $2 million for the three months ended March 31, 2018 and $10 million since inception. Contract termination costs included within Other costs associated with restructuring and separation were $4 million for the three months ended March 31, 2018 and $7 million since inception. 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 $15 million , $80 million , and $80 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 March 31, 2018 are as follows (in millions): Balance as of December 31, 2017 $ 186 Expensed 74 Cash payments (98 ) Foreign currency translation and other (2 ) Balance as of March 31, 2018 $ 160 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Net Carrying Amount of Goodwill by Operating Segment | The changes in the net carrying amount of goodwill for the three months ended March 31, 2018 are as follows (in millions): Balance as of December 31, 2017 $ 8,358 Goodwill related to current year acquisitions 12 Goodwill related to prior year acquisitions 4 Foreign currency translation and other 176 Balance as of March 31, 2018 $ 8,550 |
Schedule of Other Intangible Assets by Asset Class | Other intangible assets by asset class are as follows (in millions): March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization and Impairment Net Carrying Amount Gross Carrying Amount Accumulated Net Carrying Amount Customer related and contract based $ 2,615 $ 1,496 $ 1,119 $ 2,550 $ 1,415 $ 1,135 Tradenames 1,052 589 463 1,047 533 514 Technology and other 426 346 80 416 332 84 Total $ 4,093 $ 2,431 $ 1,662 $ 4,013 $ 2,280 $ 1,733 |
Schedule of Estimated Future Amortization Expense on Intangible Assets | The estimated future amortization for finite lived intangible assets as of March 31, 2018 is as follows (in millions): Remainder of 2018 $ 332 2019 430 2020 252 2021 151 2022 101 Thereafter 396 Total $ 1,662 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | 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 March 31, 2018 December 31, 2017 Commercial paper outstanding $ 399 $ — The weighted average commercial paper outstanding and its related interest rates are as follows (in millions except percentages): Three months ended March 31 2018 2017 Weighted average commercial paper outstanding $ 125 $ 367 Weighted average interest rate of commercial paper outstanding (0.50 )% 0.12 % |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Components of Weighted Average Number of Shares | Weighted average ordinary shares outstanding are as follows (in millions): Three months ended March 31 2018 2017 Basic weighted average ordinary shares outstanding 248.5 264.8 Dilutive effect of potentially issuable shares 1.7 2.2 Diluted weighted average ordinary shares outstanding 250.2 267.0 |
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, 2017 $ (25 ) $ (879 ) $ (2,592 ) $ (3,496 ) Adoption of new accounting guidance (3) (1 ) — — (1 ) Balance at January 1, 2018 (26 ) (879 ) (2,592 ) (3,497 ) Other comprehensive income before reclassifications, net 11 244 22 277 Amounts reclassified from accumulated other comprehensive loss: Amounts reclassified from accumulated other comprehensive income 4 — 34 38 Tax expense (1 ) — (8 ) (9 ) Amounts reclassified from accumulated other comprehensive income, net 3 — 26 29 Net current period other comprehensive income 14 244 48 306 Balance at March 31, 2018 $ (12 ) $ (635 ) $ (2,544 ) $ (3,191 ) (1) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense) , Other general expenses , and Compensation and benefits . See Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivative and hedging activity. (2) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense). (3) Refer to Note 2 “Accounting Principles and Practices” for further information. |
Employee Benefits (Tables)
Employee Benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 for Aon’s material U.K., U.S., and other significant international pension plans located in the Netherlands and Canada. Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions): Three months ended March 31 U.K. U.S. Other 2018 2017 2018 2017 2018 2017 Service cost $ — $ — $ — $ — $ — $ — Interest cost 29 30 25 24 7 6 Expected return on plan assets, net of administration expenses (51 ) (48 ) (36 ) (35 ) (12 ) (11 ) Amortization of net actuarial loss 8 7 15 13 3 3 Net periodic cost (benefit) (14 ) (11 ) 4 2 (2 ) (2 ) Loss on pension settlement 7 — — — — — Total net periodic cost (benefit) $ (7 ) $ (11 ) $ 4 $ 2 $ (2 ) $ (2 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based compensation expense recognized in continuing operations | The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions): Three months ended March 31 2018 2017 Restricted share units (“RSUs”) $ 58 $ 55 Performance share awards (“PSAs”) 16 19 Employee share purchase plans 3 4 Total share-based compensation expense $ 77 $ 78 |
Restricted share unit activity | The following table summarizes the status of the Company’s RSUs, including shares related to the Divested Business (shares in thousands, except fair value): 2018 2017 Shares Fair Value at Date of Grant Shares Fair Value at Date of Grant Non-vested at beginning of period 4,849 $ 104 6,195 $ 89 Granted 505 144 614 119 Vested (806 ) 101 (960 ) 90 Forfeited (63 ) 105 (50 ) 91 Non-vested at end of period 4,485 $ 109 5,799 $ 92 |
Performance-based plans | Information as of March 31, 2018 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the three months ended March 31, 2018 and the years ended December 31, 2017 and 2016 , respectively, is as follows (shares in thousands and dollars in millions, except fair value): March 31, December 31, December 31, Target PSAs granted during period 561 548 750 Weighted average fair value per share at date of grant $ 135 $ 114 $ 100 Number of shares that would be issued based on current performance levels 561 942 745 Unamortized expense, based on current performance levels $ 75 $ 68 $ 19 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional and fair values of derivative instruments | The notional and fair values of derivative instruments are as follows (in millions): Notional Amount Net Amount of Derivative Assets Presented in the Statements of Financial Position (1) Net Amount of Derivative Liabilities Presented in the Statements of Financial Position (2) March 31, December 31, March 31, December 31, March 31, December 31, Foreign exchange contracts Accounted for as hedges $ 758 $ 701 $ 45 $ 31 $ 1 $ 3 Not accounted for as hedges (3) 329 254 1 1 1 3 Total $ 1,087 $ 955 $ 46 $ 32 $ 2 $ 6 (1) Included within Other current assets ( $13 million at March 31, 2018 and $9 million at December 31, 2017 ) or Other non-current assets ( $33 million at March 31, 2018 and $23 million at December 31, 2017 ). (2) Included within Other current liabilities ( $1 million at March 31, 2018 and $3 million at December 31, 2017 ) or Other non-current liabilities ( $1 million at March 31, 2018 and $3 million at December 31, 2017 ). (3) These contracts typically are for 30 day durations and executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date. |
Derivative gains (losses) | The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements are as follows (in millions): Three Months Ended March 31, 2018 March 31, 2017 Gain (Loss) Recognized in Accumulated Other Comprehensive Loss $ 14 $ 6 Location of future reclassification from Accumulated Other Comprehensive Loss Compensation and benefits $ — $ 8 Other general expenses $ 4 $ 1 Other income (expense) $ 10 $ (3 ) The amounts of derivative gains (loss) reclassified from Accumulated other comprehensive loss into the Condensed Consolidated Statements of Income (effective portion) are as follows (in millions): Three Months Ended March 31, 2018 March 31, 2017 Compensation and benefits $ 1 $ 13 Other general expenses (1 ) (1 ) Interest expense (1 ) — Other income (expense) (3 ) (2 ) Total $ (4 ) $ 10 |
Fair Value Measurements and F40
Fair Value Measurements and Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2018 and December 31, 2017 (in millions): Fair Value Measurements Using Balance at March 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 1,502 $ 1,502 $ — $ — Other investments: Government bonds $ 1 $ — $ 1 $ — Equity investments $ 3 $ — $ 3 $ — Derivatives: (2) Gross foreign exchange contracts $ 54 $ — $ 54 $ — Liabilities: Derivatives: (2) Gross foreign exchange contracts $ 8 $ — $ 8 $ — (1) Included within Fiduciary assets or Short-term investments in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. Fair Value Measurements Using Balance at December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 1,847 $ 1,847 $ — $ — Other investments: Government bonds $ 1 $ — $ 1 $ — Equity investments $ 4 $ — $ 4 $ — Derivatives: (2) Gross foreign exchange contracts $ 33 $ — $ 33 $ — Liabilities: Derivatives: (2) Gross foreign exchange contracts $ 6 $ — $ 6 $ — (1) Included within Fiduciary assets or Short-term investments in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. |
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): March 31, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value Current portion of long-term debt $ — $ — $ 299 $ 301 Long-term debt $ 5,697 $ 6,077 $ 5,667 $ 6,267 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of reconciliation of segment income before tax to income from continuing operations before income taxes |
Guarantee of Registered Secur42
Guarantee of Registered Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Guarantee of Registered Securities [Abstract] | |
Condensed Consolidating Statements of Income | Condensed Consolidating Statement of Income Three months ended March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenue Total revenue $ — $ — $ 3,090 $ — $ 3,090 Expenses Compensation and benefits 19 1 1,596 — 1,616 Information technology — — 115 — 115 Premises — — 93 — 93 Depreciation of fixed assets — — 39 — 39 Amortization and impairment of intangible assets — — 110 — 110 Other general expenses 1 — 317 — 318 Total operating expenses 20 1 2,270 — 2,291 Operating income (loss) (20 ) (1 ) 820 — 799 Interest income — 14 — (10 ) 4 Interest expense (49 ) (24 ) (7 ) 10 (70 ) Intercompany interest income (expense) 4 (128 ) 124 — — Intercompany other income (expense) (71 ) (5 ) 76 — — Other income (expense) (7 ) (6 ) (5 ) 3 (15 ) Income (loss) from continuing operations before income taxes (143 ) (150 ) 1,008 3 718 Income tax expense (benefit) (16 ) (27 ) 157 — 114 Net income (loss) from continuing operations (127 ) (123 ) 851 3 604 Income from discontinued operations, net of tax — — 6 — 6 Net income (loss) before equity in earnings of subsidiaries (127 ) (123 ) 857 3 610 Equity in earnings of subsidiaries, net of tax 718 704 581 (2,003 ) — Net income 591 581 1,438 (2,000 ) 610 Less: Net income attributable to noncontrolling interests — — 16 — 16 Net income attributable to Aon shareholders $ 591 $ 581 $ 1,422 $ (2,000 ) $ 594 Condensed Consolidating Statement of Income Three months ended March 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenue Total revenue $ — $ — $ 2,381 $ — $ 2,381 Expenses Compensation and benefits 52 3 1,414 — 1,469 Information technology — — 88 — 88 Premises — — 84 — 84 Depreciation of fixed assets — — 54 — 54 Amortization and impairment of intangible assets — — 43 — 43 Other general expenses 5 2 301 — 308 Total operating expenses 57 5 1,984 — 2,046 Operating income (loss) (57 ) (5 ) 397 — 335 Interest income — 6 (2 ) (2 ) 2 Interest expense (45 ) (24 ) (3 ) 2 (70 ) Intercompany interest income (expense) 3 (136 ) 133 — — Intercompany other income (expense) (50 ) 7 43 — — Other income (expense) (10 ) 9 (9 ) 8 (2 ) Income (loss) from continuing operations before income taxes (159 ) (143 ) 559 8 265 Income tax expense (benefit) (14 ) (54 ) 68 — — Net income (loss) from continuing operations (145 ) (89 ) 491 8 265 Income from discontinued operations, net of tax — — 40 — 40 Net income (loss) before equity in earnings of subsidiaries (145 ) (89 ) 531 8 305 Equity in earnings of subsidiaries, net of tax 428 271 182 (881 ) — Net income 283 182 713 (873 ) 305 Less: Net income attributable to noncontrolling interests — — 14 — 14 Net income attributable to Aon shareholders $ 283 $ 182 $ 699 $ (873 ) $ 291 |
Condensed Consolidating Statements of Comprehensive Income | Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income $ 591 $ 581 $ 1,438 $ (2,000 ) $ 610 Less: Net income attributable to noncontrolling interests — — 16 — 16 Net income attributable to Aon shareholders 591 581 1,422 (2,000 ) 594 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — 3 11 — 14 Foreign currency translation adjustments — — 250 (3 ) 247 Postretirement benefit obligation — 11 37 — 48 Total other comprehensive income — 14 298 (3 ) 309 Equity in other comprehensive income of subsidiaries, net of tax 309 285 299 (893 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 3 — 3 Total other comprehensive income attributable to Aon shareholders 309 299 594 (896 ) 306 Comprehensive income attributable to Aon shareholders $ 900 $ 880 $ 2,016 $ (2,896 ) $ 900 Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income $ 283 $ 182 $ 713 $ (873 ) $ 305 Less: Net income attributable to noncontrolling interests — — 14 — 14 Net income attributable to Aon shareholders 283 182 699 (873 ) 291 Other comprehensive income (loss), net of tax: Change in fair value of financial instruments — (2 ) — — (2 ) Foreign currency translation adjustments — — 155 (8 ) 147 Postretirement benefit obligation — 8 10 — 18 Total other comprehensive income — 6 165 (8 ) 163 Equity in other comprehensive income of subsidiaries, net of tax 170 164 170 (504 ) — Less: Other comprehensive income attributable to noncontrolling interests — — 1 — 1 Total other comprehensive income attributable to Aon shareholders 170 170 334 (512 ) 162 Comprehensive income attributable to Aon shareholders $ 453 $ 352 $ 1,033 $ (1,385 ) $ 453 |
Condensed Consolidating Statements of Financial Position | Condensed Consolidating Statement of Financial Position As of March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ — $ 2,603 $ 640 $ (2,646 ) $ 597 Short-term investments — 1 117 — 118 Receivables, net — 1 3,052 — 3,053 Fiduciary assets — — 10,738 — 10,738 Current intercompany receivables 186 2,355 10,953 (13,494 ) — Other current assets 1 19 589 — 609 Total Current Assets 187 4,979 26,089 (16,140 ) 15,115 Goodwill — — 8,550 — 8,550 Intangible assets, net — — 1,662 — 1,662 Fixed assets, net — — 578 — 578 Deferred tax assets 99 391 57 (251 ) 296 Non-current intercompany receivables 426 261 8,247 (8,934 ) — Prepaid pension — 6 1,201 — 1,207 Other non-current assets 1 32 406 — 439 Investment in subsidiary 10,406 19,124 1,311 (30,841 ) — TOTAL ASSETS $ 11,119 $ 24,793 $ 48,101 $ (56,166 ) $ 27,847 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 896 $ 12 $ 3,283 $ (2,646 ) $ 1,545 Short-term debt and current portion of long-term debt 374 26 3 — 403 Fiduciary liabilities — — 10,738 — 10,738 Current intercompany payables 262 12,098 1,134 (13,494 ) — Other current liabilities — 65 907 — 972 Total Current Liabilities 1,532 12,201 16,065 (16,140 ) 13,658 Long-term debt 4,282 1,414 1 — 5,697 Deferred tax liabilities — — 494 (251 ) 243 Pension, other postretirement and other post-employment liabilities — 1,365 394 — 1,759 Non-current intercompany payables — 8,412 522 (8,934 ) — Other non-current liabilities 4 90 1,011 — 1,105 TOTAL LIABILITIES 5,818 23,482 18,487 (25,325 ) 22,462 TOTAL AON SHAREHOLDERS’ EQUITY 5,301 1,311 29,530 (30,841 ) 5,301 Noncontrolling interests — — 84 — 84 TOTAL EQUITY 5,301 1,311 29,614 (30,841 ) 5,385 TOTAL LIABILITIES AND EQUITY $ 11,119 $ 24,793 $ 48,101 $ (56,166 ) $ 27,847 Condensed Consolidating Statement of Financial Position As of December 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ 1 $ 2,524 $ 793 $ (2,562 ) $ 756 Short-term investments — 355 174 — 529 Receivables, net — 2 2,476 — 2,478 Fiduciary assets — — 9,625 — 9,625 Current intercompany receivables 165 1,046 10,824 (12,035 ) — Other current assets 1 29 259 — 289 Total Current Assets 167 3,956 24,151 (14,597 ) 13,677 Goodwill — — 8,358 — 8,358 Intangible assets, net — — 1,733 — 1,733 Fixed assets, net — — 564 — 564 Deferred tax assets 99 396 143 (249 ) 389 Non-current intercompany receivables 414 261 8,232 (8,907 ) — Prepaid pension — 6 1,054 — 1,060 Other non-current assets 1 35 271 — 307 Investment in subsidiary 8,884 17,910 20 (26,814 ) — TOTAL ASSETS $ 9,565 $ 22,564 $ 44,526 $ (50,567 ) $ 26,088 LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 574 $ 36 $ 3,913 $ (2,562 ) $ 1,961 Short-term debt and current portion of long-term debt — — 299 — 299 Fiduciary liabilities — — 9,625 — 9,625 Current intercompany payables 130 11,149 756 (12,035 ) — Other current liabilities 16 64 790 — 870 Total Current Liabilities 720 11,249 15,383 (14,597 ) 12,755 Long-term debt 4,251 1,415 1 — 5,667 Deferred tax liabilities — — 376 (249 ) 127 Pension, other postretirement and other post-employment liabilities — 1,391 398 — 1,789 Non-current intercompany payables — 8,398 509 (8,907 ) — Other non-current liabilities 11 91 1,000 — 1,102 TOTAL LIABILITIES 4,982 22,544 17,667 (23,753 ) 21,440 TOTAL AON SHAREHOLDERS’ EQUITY 4,583 20 26,794 (26,814 ) 4,583 Noncontrolling interests — — 65 — 65 TOTAL EQUITY 4,583 20 26,859 (26,814 ) 4,648 TOTAL LIABILITIES AND EQUITY $ 9,565 $ 22,564 $ 44,526 $ (50,567 ) $ 26,088 |
Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2018 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ (21 ) $ 626 $ 277 $ (742 ) $ 140 Cash provided by operating activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (21 ) 626 277 (742 ) 140 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 10 7 — 17 Payments for investments (1 ) (5 ) (6 ) 1 (11 ) Net purchases of short-term investments - non-fiduciary — 355 60 — 415 Acquisition of businesses, net of cash acquired — — (29 ) — (29 ) Sale of businesses, net of cash sold — — (1 ) — (1 ) Capital expenditures — — (45 ) — (45 ) Cash provided by (used for) investing activities - continuing operations (1 ) 360 (14 ) 1 346 Cash used for investing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (1 ) 360 (14 ) 1 346 CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (569 ) — — — (569 ) Advances from (to) affiliates 418 (933 ) (142 ) 657 — Issuance of shares for employee benefit plans (109 ) — — — (109 ) Issuance of debt 431 375 2 — 808 Repayment of debt (61 ) (349 ) (294 ) — (704 ) Cash dividends to shareholders (89 ) — — — (89 ) Noncontrolling interests and other financing activities — — — — — Cash provided by (used for) financing activities - continuing operations 21 (907 ) (434 ) 657 (663 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 21 (907 ) (434 ) 657 (663 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 18 — 18 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1 ) 79 (153 ) (84 ) (159 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1 2,524 793 (2,562 ) 756 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ — $ 2,603 $ 640 $ (2,646 ) $ 597 Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2017 (millions) Aon plc Aon Corporation Other Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Cash provided by (used for) operating activities - continuing operations $ (28 ) $ 1,117 $ 533 $ (1,440 ) $ 182 Cash provided by operating activities - discontinued operations — — 58 — 58 CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (28 ) 1,117 591 (1,440 ) 240 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investments — 565 4 (544 ) 25 Payments for investments — (4 ) (546 ) 541 (9 ) Net sales of short-term investments - non-fiduciary — 94 — — 94 Acquisition of businesses, net of cash acquired — — (46 ) — (46 ) Sale of businesses, net of cash sold — — (2 ) — (2 ) Capital expenditures — — (34 ) — (34 ) Cash provided by (used for) investing activities - continuing operations — 655 (624 ) (3 ) 28 Cash used for investing activities - discontinued operations — — (15 ) — (15 ) CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES — 655 (639 ) (3 ) 13 CASH FLOWS FROM FINANCING ACTIVITIES Share repurchase (126 ) — — — (126 ) Advances from (to) affiliates 290 (1,990 ) (17 ) 1,717 — Issuance of shares for employee benefit plans (85 ) — — — (85 ) Issuance of debt 457 535 — — 992 Repayment of debt (421 ) (525 ) (4 ) — (950 ) Cash dividends to shareholders (87 ) — — — (87 ) Noncontrolling interests and other financing activities — — (2 ) — (2 ) Cash provided by (used for) financing activities - continuing operations 28 (1,980 ) (23 ) 1,717 (258 ) Cash used for financing activities - discontinued operations — — — — — CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 28 (1,980 ) (23 ) 1,717 (258 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 25 — 25 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS — (208 ) (46 ) 274 20 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (1) — 1,633 660 (1,862 ) 431 CASH AND CASH EQUIVALENTS AT END OF PERIOD (2) $ — $ 1,425 $ 614 $ (1,588 ) $ 451 (1) Includes $5 million of discontinued operations at December 31, 2016. (2) Includes $18 million of discontinued operations at March 31, 2017. |
Accounting Principles and Pra43
Accounting Principles and Practices - Schedule of Changes in Accounting Principle (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating income | $ 799 | $ 335 |
Other income (expense) | $ (15) | (2) |
As Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating income | 343 | |
Other income (expense) | (10) | |
Accounting Standards Update 2017-07 | Adjustments | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating income | (8) | |
Other income (expense) | $ 8 |
Accounting Principles and Pra44
Accounting Principles and Practices (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred tax assets | $ 296 | $ 261 | $ 389 | |
Deferred tax liabilities | 243 | 169 | 127 | |
Other non-current assets | $ 439 | $ 452 | 307 | |
Adoption of new accounting guidance | 492 | $ 49 | ||
Accounting Standards Update 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred tax assets | 23 | |||
Deferred tax liabilities | 12 | |||
Other non-current assets | (26) | |||
Accumulated Other Comprehensive Loss, Net of Tax | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Adoption of new accounting guidance | (1) | |||
Accumulated Other Comprehensive Loss, Net of Tax | Accounting Standards Update 2016-01 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Adoption of new accounting guidance | (1) | |||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Adoption of new accounting guidance | 493 | $ 49 | ||
Retained Earnings | Accounting Standards Update 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Adoption of new accounting guidance | (15) | |||
Retained Earnings | Accounting Standards Update 2016-01 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Adoption of new accounting guidance | $ 1 |
Accounting Principles and Pra45
Accounting Principles and Practices - Schedule of Changes to Balance Sheet for Topic 606 (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | |||||
Receivables, net | $ 3,053 | $ 2,730 | $ 2,478 | ||
Other current assets | 609 | 587 | 289 | ||
Deferred tax assets | 296 | 261 | 389 | ||
LIABILITIES | |||||
Other non-current assets | 439 | 452 | 307 | ||
Accounts payable and accrued liabilities | 1,545 | 1,969 | 1,961 | ||
Other current liabilities | 972 | 883 | 870 | ||
Deferred tax liabilities | 243 | 169 | 127 | ||
Other non-current liabilities | 1,105 | 1,099 | 1,102 | ||
EQUITY | |||||
Total equity | 5,385 | 5,155 | 4,648 | $ 5,826 | $ 5,532 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||||
ASSETS | |||||
Receivables, net | 2,478 | ||||
Other current assets | 289 | ||||
Deferred tax assets | 389 | ||||
LIABILITIES | |||||
Other non-current assets | 307 | ||||
Accounts payable and accrued liabilities | 1,961 | ||||
Other current liabilities | 870 | ||||
Deferred tax liabilities | 127 | ||||
Other non-current liabilities | 1,102 | ||||
EQUITY | |||||
Total equity | $ 4,648 | ||||
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | |||||
ASSETS | |||||
Receivables, net | 2,409 | ||||
Other current assets | 370 | ||||
Deferred tax assets | 426 | ||||
LIABILITIES | |||||
Other non-current assets | 296 | ||||
Other current liabilities | 920 | ||||
Deferred tax liabilities | 175 | ||||
Other non-current liabilities | 1,108 | ||||
EQUITY | |||||
Total equity | 4,606 | ||||
Accounting Standards Update 2014-09 | Adjustments | |||||
ASSETS | |||||
Receivables, net | (644) | 252 | |||
Other current assets | (239) | 298 | |||
Deferred tax assets | 130 | (128) | |||
LIABILITIES | |||||
Other non-current assets | (143) | 145 | |||
Accounts payable and accrued liabilities | 8 | ||||
Other current liabilities | (52) | 13 | |||
Deferred tax liabilities | (68) | 42 | |||
Other non-current liabilities | 3 | (3) | |||
EQUITY | |||||
Total equity | $ (779) | $ 507 |
Accounting Principles and Pra46
Accounting Principles and Practices - Schedule of Impact of Topic 606 on Statement of Income (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Total revenue | $ 3,090 | $ 2,381 |
Expenses | ||
Compensation and benefits | 1,616 | 1,469 |
Other income (expense) | (15) | (2) |
Income taxes | 114 | 0 |
Net income from continuing operations | $ 604 | $ 265 |
Basic net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share) | $ 2.37 | $ 0.95 |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue | ||
Total revenue | $ 2,677 | |
Expenses | ||
Compensation and benefits | 1,551 | |
Other income (expense) | (14) | |
Income taxes | 32 | |
Accounting Standards Update 2014-09 | Adjustments | ||
Revenue | ||
Total revenue | (413) | |
Expenses | ||
Compensation and benefits | (65) | |
Other income (expense) | 1 | |
Income taxes | (82) | |
Net income from continuing operations | $ 265 | |
Basic net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share) | $ 1.06 |
Accounting Principles and Pra47
Accounting Principles and Practices - Schedule of Impact of Topic 606 on Cash Flow Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 610 | $ 305 |
Deferred income taxes | 26 | (2) |
Receivables, net | (269) | 38 |
Accounts payable and accrued liabilities | (439) | (390) |
Current income taxes | 30 | (56) |
Other assets and liabilities | 38 | $ 92 |
Accounting Standards Update 2014-09 | Adjustments | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | (265) | |
Deferred income taxes | (28) | |
Receivables, net | 400 | |
Accounts payable and accrued liabilities | 8 | |
Current income taxes | (54) | |
Other assets and liabilities | (61) | |
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | 345 | |
Deferred income taxes | (2) | |
Receivables, net | 131 | |
Accounts payable and accrued liabilities | (431) | |
Current income taxes | (24) | |
Other assets and liabilities | $ (23) |
Revenue from Contracts with C48
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 3,090 | $ 2,381 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,116 | |
Americas other than United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 237 | |
United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 484 | |
Europe, Middle East, & Africa other than United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 979 | |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 274 | |
Operating Segments | Commercial Risk Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,184 | |
Operating Segments | Reinsurance Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 742 | |
Operating Segments | Retirement Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 424 | |
Operating Segments | Health Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 451 | |
Operating Segments | Data & Analytic Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 294 | |
Intersegment Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ (5) |
Revenue from Contracts with C49
Revenue from Contracts with Customers - Contract Assets Rollforward (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Capitalized Cost To Fulfill Customer Contracts | |
Change in Capitalized Contract Costs | |
Balance at beginning of period | $ 298 |
Additions | 370 |
Amortization | (432) |
Impairment | 0 |
Foreign currency and other | 4 |
Balance at end of period | 240 |
Capitalized Cost To Obtain Customer Contracts | |
Change in Capitalized Contract Costs | |
Balance at beginning of period | 145 |
Additions | 8 |
Amortization | (10) |
Impairment | 0 |
Foreign currency and other | 1 |
Balance at end of period | $ 144 |
Discontinued Operations (Detail
Discontinued Operations (Details) | May 01, 2017USD ($)agreement | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Dispositions | ||||
Cash and cash equivalents from discontinued operations | $ 18,000,000 | $ 5,000,000 | ||
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 | $ 8,000,000 | 0 | ||
Depreciation and amortization | $ 0 | |||
Depreciation of fixed assets | 8,000,000 | |||
Amortization of intangible assets | 11,000,000 | |||
Cash and cash equivalents from discontinued operations | $ 18,000,000 | |||
Maximum | Tempo Business | Discontinued Operations, Disposed of by Sale | ||||
Dispositions | ||||
Purchase price | 4,200,000,000 | |||
Deferred consideration | $ 500,000,000 |
Discontinued Operations Income
Discontinued Operations Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Expenses | ||
Net income from discontinued operations | $ 6 | $ 40 |
Tempo Business | Discontinued Operations, Disposed of by Sale | ||
Revenue | ||
Total revenue | 0 | 527 |
Expenses | ||
Total operating expenses | 3 | 470 |
Income (loss) from discontinued operations before income taxes | (3) | 57 |
Income tax expense (benefit) | (1) | 17 |
Income (loss) from discontinued operations excluding gain, net of tax | (2) | 40 |
Gain on sale of discontinued operations, net of tax | 8 | 0 |
Net income from discontinued operations | $ 6 | $ 40 |
Cash and Cash Equivalents and52
Cash and Cash Equivalents and Short-term Investments (Details) £ in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2018GBP (£) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | ||||
Cash and cash equivalents and short-term investments | $ 715 | $ 1,285 | ||
Cash and cash equivalents and short term investments, period increase (decrease) | $ (570) | |||
Restricted cash | 102 | 96 | ||
Operating funds in U.K. | £ 42.7 | $ 60.8 | $ 57.1 |
Other Financial Data - Schedule
Other Financial Data - Schedule of Other Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other (Expense) Income | ||
Foreign currency remeasurement gain (loss) | $ (16) | $ (10) |
Loss on disposal of business | (1) | (2) |
Pension and other postretirement income | 2 | 8 |
Equity earnings (losses) | 1 | 6 |
Gain (loss) on financial instruments | 0 | (4) |
Other | (1) | 0 |
Total | $ (15) | $ (2) |
Other Financial Data - Schedu54
Other Financial Data - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at beginning of period | $ 59 | $ 56 |
Provision charged to Other general expenses | 8 | 6 |
Accounts written off, net of recoveries | (3) | (3) |
Foreign currency translation | 1 | 2 |
Balance at end of period | $ 65 | $ 61 |
Other Financial Data - Schedu55
Other Financial Data - Schedule of Other Current Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Financial Data [Abstract] | |||
Taxes receivable | $ 118 | $ 114 | |
Prepaid expenses | 142 | 126 | |
Receivables from divested business | 6 | 28 | |
Cost to fulfill contracts with customers | 240 | 0 | |
Other | 103 | 21 | |
Total | $ 609 | $ 587 | $ 289 |
Other Financial Data - Schedu56
Other Financial Data - Schedule of Other Non-current Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Financial Data [Abstract] | |||
Investments | $ 58 | $ 57 | |
Taxes receivable | 83 | 84 | |
Cost to obtain contracts with customers (1) | 144 | 0 | |
Other | 154 | 166 | |
Total | $ 439 | $ 452 | $ 307 |
Other Financial Data - Schedu57
Other Financial Data - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Other Financial Data [Abstract] | |||
Deferred revenue | $ 329 | $ 311 | |
Taxes payable | 164 | 139 | |
Other | 479 | 420 | |
Total | 972 | $ 883 | 870 |
Revenue recognized from deferred revenue | 100 | ||
Current portion of transition tax | $ 42 | $ 42 |
Other Financial Data - Schedu58
Other Financial Data - Schedule of Other Non-current Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Financial Data [Abstract] | |||
Taxes payable | $ 538 | $ 529 | |
Deferred revenue | 56 | 49 | |
Leases | 156 | 153 | |
Compensation and benefits | 62 | 67 | |
Other | 293 | 304 | |
Total | 1,105 | $ 1,099 | 1,102 |
Noncurrent portion of transition tax | $ 222 | $ 222 |
Acquisitions and Dispositions59
Acquisitions and Dispositions of Businesses - Acquisitions (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($)acquisition | Dec. 31, 2017USD ($)acquisition | |
Business Acquisition | ||
Number of business acquired under business combination | acquisition | 3 | 17 |
Assets acquired: | ||
Goodwill | $ 8,550 | $ 8,358 |
2018 Acquisitions | ||
Business Combination, Consideration Transferred [Abstract] | ||
Cash | 26 | |
Deferred and contingent consideration | 3 | |
Aggregate consideration transferred | 29 | |
Assets acquired: | ||
Receivables, net | 2 | |
Goodwill | 12 | |
Intangible assets, net | 16 | |
Other assets | 3 | |
Total assets acquired | 33 | |
Liabilities assumed: | ||
Current liabilities | 4 | |
Total liabilities assumed | 4 | |
Net assets acquired | $ 29 |
Acquisitions and Dispositions60
Acquisitions and Dispositions of Businesses - Dispositions (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)disposal | Mar. 31, 2017USD ($)disposal | |
Dispositions | ||
Gain (loss) on disposal of business | $ | $ 1 | $ 2 |
Disposal Group, Not Discontinued Operations | ||
Dispositions | ||
Number of dispositions | disposal | 0 | 3 |
Restructuring Narrative (Detail
Restructuring Narrative (Details) - 2017 Plan $ in Millions | 3 Months Ended | 15 Months Ended |
Mar. 31, 2018USD ($)job_elimination | Mar. 31, 2018USD ($)job_elimination | |
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | $ 1,025 | $ 1,025 |
Number of positions eliminated to date | job_elimination | 3,123 | |
Costs incurred | 74 | $ 571 |
Workforce reduction | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 450 | 450 |
Costs incurred | 33 | 332 |
Technology rationalization | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 130 | 130 |
Costs incurred | 10 | 43 |
Lease consolidation | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 85 | 85 |
Costs incurred | 3 | 11 |
Asset impairments | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 50 | 50 |
Costs incurred | 1 | 27 |
Other Restructuring | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected total cost | 310 | 310 |
Costs incurred | $ 27 | $ 158 |
Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected number of positions eliminated | job_elimination | 4,200 | |
Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected number of positions eliminated | job_elimination | 4,800 |
Restructuring - Schedule of Re
Restructuring - Schedule of Restructuring and Related Expenses (Details) $ in Millions | 3 Months Ended | 15 Months Ended |
Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Estimated Remaining Costs | $ 454 | $ 454 |
2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 74 | 571 |
Expected total cost | 1,025 | 1,025 |
Workforce reduction | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 33 | 332 |
Estimated Remaining Costs | 118 | 118 |
Expected total cost | 450 | 450 |
Technology rationalization | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 10 | 43 |
Estimated Remaining Costs | 87 | 87 |
Expected total cost | 130 | 130 |
Contract termination costs incurred | 0 | 2 |
Expected contract termination cost remaining | 15 | 15 |
Lease consolidation | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 3 | 11 |
Estimated Remaining Costs | 74 | 74 |
Expected total cost | 85 | 85 |
Contract termination costs incurred | 2 | 10 |
Expected contract termination cost remaining | 80 | 80 |
Asset impairments | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 1 | 27 |
Estimated Remaining Costs | 23 | 23 |
Expected total cost | 50 | 50 |
Other Restructuring | 2017 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred | 27 | 158 |
Estimated Remaining Costs | 152 | 152 |
Expected total cost | 310 | 310 |
Contract termination costs incurred | 4 | 7 |
Expected contract termination cost remaining | $ 80 | $ 80 |
Restructuring - Schedule of 63
Restructuring - Schedule of Restructuring Reserve (Details) - 2017 Plan $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Plan | |
Balance as of December 31, 2017 | $ 186 |
Expensed | 74 |
Cash payments | (98) |
Foreign currency translation and other | (2) |
Balance as of March 31, 2018 | $ 160 |
Goodwill and Other Intangible64
Goodwill and Other Intangible Assets Rollforward (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Changes in the net carrying amount of goodwill by operating segment | |
Beginning balance | $ 8,358 |
Goodwill related to current year acquisitions | 12 |
Goodwill related to prior year acquisitions | 4 |
Foreign currency translation and other | 176 |
Ending balance | $ 8,550 |
Goodwill and Other Intangible65
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Intangible assets with finite lives | |||
Gross Carrying Amount | $ 4,093 | $ 4,013 | |
Accumulated Amortization and Impairment | 2,431 | 2,280 | |
Net Carrying Amount | 1,662 | 1,733 | |
Estimated amortization for intangible assets | |||
Remainder of 2018 | 332 | ||
2,019 | 430 | ||
2,020 | 252 | ||
2,021 | 151 | ||
2,022 | 101 | ||
Thereafter | 396 | ||
Total | 1,662 | ||
Customer related and contract based | |||
Intangible assets with finite lives | |||
Gross Carrying Amount | 2,615 | 2,550 | |
Accumulated Amortization and Impairment | 1,496 | 1,415 | |
Net Carrying Amount | 1,119 | 1,135 | |
Tradenames | |||
Intangible assets with finite lives | |||
Gross Carrying Amount | 1,052 | 1,047 | |
Accumulated Amortization and Impairment | 589 | 533 | |
Net Carrying Amount | 463 | 514 | |
Technology and other | |||
Intangible assets with finite lives | |||
Gross Carrying Amount | 426 | 416 | |
Accumulated Amortization and Impairment | 346 | 332 | |
Net Carrying Amount | $ 80 | $ 84 | |
Discontinued Operations, Disposed of by Sale | Tempo Business | Tradenames | |||
Intangible assets with finite lives | |||
Impairment of tradename | $ 380 |
Debt Narrative (Details)
Debt Narrative (Details) | Mar. 08, 2018USD ($) | Mar. 31, 2018EUR (€)credit_facility | Mar. 31, 2018USD ($)credit_facility | Mar. 08, 2018CAD ($) | Mar. 08, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Short-term debt and current portion of long-term debt | $ 403,000,000 | $ 299,000,000 | ||||
Number of credit facilities | credit_facility | 2 | 2 | ||||
4.76% Senior Notes Due March 2018 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Short-term debt and current portion of long-term debt | $ 375,000,000 | $ 291,000,000 | ||||
Debt interest rate percentage (as a percent) | 4.76% | 4.76% | ||||
Extinguishment of debt | $ 375,000,000 | |||||
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 October 2022 | 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, current borrowing capacity | 1,300,000,000 | |||||
United States | Commercial paper | Commercial Paper Programs | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 900,000,000 | |||||
Europe | Commercial paper | Commercial Paper Programs | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | € | € 300,000,000 |
Debt Schedule of Commercial Pap
Debt Schedule of Commercial Paper (Details) - Commercial paper - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Commercial paper outstanding | $ 399 | $ 0 | |
Weighted average commercial paper outstanding | $ 125 | $ 367 | |
Weighted average interest rate of commercial paper outstanding | (0.50%) | 0.12% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 15.90% | 0.10% | |
Income taxes | $ 114 | $ 0 | |
Income from continuing operations before income taxes | $ 718 | $ 265 | |
Provisional income tax expense | $ 345 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 3 Months Ended | 72 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Feb. 28, 2017 | Nov. 30, 2014 | Apr. 30, 2012 | |
Common Stock Programs | ||||||
Shares purchased (in shares) | 112,100,000 | |||||
Total cost of shares purchased | $ 553,000,000 | $ 126,000,000 | $ 10,100,000,000 | |||
Treasury stock acquired, additional transaction costs | $ 2,800,000 | $ 600,000 | ||||
Weighted average shares outstanding | ||||||
Shares for basic earnings per share (in shares) | 248,500,000 | 264,800,000 | ||||
Dilutive effect of potentially issuable shares (in shares) | 1,700,000 | 2,200,000 | ||||
Shares for diluted earnings per share (in shares) | 250,200,000 | 267,000,000 | ||||
Number of shares excluded from the calculation of diluted earnings per share (in shares) | 100,000 | 0 | ||||
Share Repurchase Program of 2014 | ||||||
Common Stock Programs | ||||||
Share repurchase authorization limit (up to) | $ 15,000,000,000 | 15,000,000,000 | $ 5,000,000,000 | $ 5,000,000,000 | ||
Share repurchase, remaining authorization limit (in shares) | $ 4,900,000,000 | $ 4,900,000,000 | ||||
2012 - Share Repurchase Program | ||||||
Common Stock Programs | ||||||
Share repurchase authorization limit (up to) | $ 5,000,000,000 | |||||
Shares purchased (in shares) | 3,900,000 | 1,100,000 | ||||
Average price per share of stock repurchased (in dollars per share) | $ 140.94 | $ 114.46 | ||||
Total cost of shares purchased | $ 550,000,000 | $ 125,000,000 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 5,385 | $ 5,826 | $ 5,155 | $ 4,648 | $ 5,532 |
Adoption of new accounting guidance | 492 | $ 49 | |||
Other comprehensive income before reclassifications, net | 277 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income | 38 | ||||
Tax expense | (9) | ||||
Amounts reclassified from accumulated other comprehensive income, net | 29 | ||||
Total other comprehensive income attributable to Aon shareholders | 306 | $ 162 | |||
Total | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (3,191) | (3,497) | |||
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 | (12) | (26) | |||
Other comprehensive income before reclassifications, net | 11 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income | 4 | ||||
Tax expense | (1) | ||||
Amounts reclassified from accumulated other comprehensive income, net | 3 | ||||
Total other comprehensive income attributable to Aon shareholders | 14 | ||||
Foreign Currency Translation Adjustments | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (635) | (879) | |||
Other comprehensive income before reclassifications, net | 244 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income | 0 | ||||
Tax expense | 0 | ||||
Amounts reclassified from accumulated other comprehensive income, net | 0 | ||||
Total other comprehensive income attributable to Aon shareholders | 244 | ||||
Post-Retirement Benefit Obligation | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (2,544) | (2,592) | |||
Other comprehensive income before reclassifications, net | 22 | ||||
Amounts reclassified from accumulated other comprehensive loss: | |||||
Amounts reclassified from accumulated other comprehensive income | 34 | ||||
Tax expense | (8) | ||||
Amounts reclassified from accumulated other comprehensive income, net | 26 | ||||
Total other comprehensive income attributable to Aon shareholders | $ 48 | ||||
As Reported | Total | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (3,496) | ||||
As Reported | 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 | (25) | ||||
As Reported | Foreign Currency Translation Adjustments | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (879) | ||||
As Reported | Post-Retirement Benefit Obligation | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | (2,592) | ||||
Accounting Standards Update 2016-01 | Total | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Adoption of new accounting guidance | (1) | ||||
Accounting Standards Update 2016-01 | Change in Fair Value of Financial Instruments | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Adoption of new accounting guidance | (1) | ||||
Accounting Standards Update 2016-01 | Foreign Currency Translation Adjustments | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Adoption of new accounting guidance | 0 | ||||
Accounting Standards Update 2016-01 | Post-Retirement Benefit Obligation | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Adoption of new accounting guidance | $ 0 |
Employee Benefits (Details)
Employee Benefits (Details) £ in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018GBP (£) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
U.K. | |||
Defined Benefit Plan Disclosure | |||
Service cost | $ 0 | $ 0 | |
Interest cost | 29 | 30 | |
Expected return on plan assets, net of administration expenses | (51) | (48) | |
Amortization of net actuarial loss | 8 | 7 | |
Net periodic cost (benefit) | (14) | (11) | |
Loss on pension settlement | 7 | 0 | |
Total net periodic cost (benefit) | (7) | (11) | |
Estimate of contributions to defined benefit pension plans for the current fiscal year | 92 | ||
Contributions made to defined benefit pension plans | 23 | 16 | |
U.S. | |||
Defined Benefit Plan Disclosure | |||
Service cost | 0 | 0 | |
Interest cost | 25 | 24 | |
Expected return on plan assets, net of administration expenses | (36) | (35) | |
Amortization of net actuarial loss | 15 | 13 | |
Net periodic cost (benefit) | 4 | 2 | |
Loss on pension settlement | 0 | 0 | |
Total net periodic cost (benefit) | 4 | 2 | |
Estimate of contributions to defined benefit pension plans for the current fiscal year | 63 | ||
Contributions made to defined benefit pension plans | 17 | 13 | |
Other International Plan | |||
Defined Benefit Plan Disclosure | |||
Service cost | 0 | 0 | |
Interest cost | 7 | 6 | |
Expected return on plan assets, net of administration expenses | (12) | (11) | |
Amortization of net actuarial loss | 3 | 3 | |
Net periodic cost (benefit) | (2) | (2) | |
Loss on pension settlement | 0 | 0 | |
Total net periodic cost (benefit) | (2) | (2) | |
Estimate of contributions to defined benefit pension plans for the current fiscal year | 22 | ||
Contributions made to defined benefit pension plans | 8 | $ 2 | |
Pension Plan | U.K. | |||
Defined Benefit Plan Disclosure | |||
Payment for settlement | £ 48 | 68 | |
Benefit obligation period increase (decrease) | (44) | (63) | |
Benefit obligation, (increase) decrease for settlement | £ 5 | $ 7 |
Share-Based Compensation Plan72
Share-Based Compensation Plans - Share-based compensation expenses recognized (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 77 | $ 78 |
Restricted share units (“RSUs”) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 58 | 55 |
Performance share awards (“PSAs”) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 16 | 19 |
Employee share purchase plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 3 | $ 4 |
Share-Based Compensation Plan73
Share-Based Compensation Plans - Restricted share unit activity (Details) - Restricted share units (“RSUs”) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Non-vested share awards (in shares) | |||
Non-vested at beginning of period (in shares) | 4,849 | 6,195 | 6,195 |
Granted (in shares) | 505 | 614 | |
Vested (in shares) | (806) | (960) | |
Forfeited (in shares) | (63) | (50) | |
Non-vested at end of period (in shares) | 4,485 | 5,799 | 4,849 |
Weighted Average Fair value | |||
Non-vested at beginning of period (in dollars per share) | $ 104 | $ 89 | $ 89 |
Granted (in dollars per share) | 144 | 119 | |
Vested (in dollars per share) | 101 | 90 | |
Forfeited (in dollars per share) | 105 | 91 | |
Non-vested at end of period (in dollars per share) | $ 109 | $ 92 | $ 104 |
Unamortized deferred compensation expense | $ 352 | ||
Remaining weighted-average amortization period (in years) | 2 years 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 Plan74
Share-Based Compensation Plans - Performance Share Awards Narrative (Details) - Performance Shares | 3 Months Ended |
Mar. 31, 2018 | |
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 Plan75
Share-Based Compensation Plans - Schedule of Performance-based plans (Details) - Performance Shares - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target PSAs granted during period (in shares) | 561 | 548 | 750 |
Weighted average fair value per share at date of grant (in dollars per share) | $ 135 | $ 114 | $ 100 |
Number of shares that would be issued based on current performance levels (in shares) | 561 | 942 | 745 |
Unamortized expense, based on current performance levels | $ 75 | $ 68 | $ 19 |
Derivatives and Hedging - Forei
Derivatives and Hedging - Foreign Exchange Risk Management Narrative (Details) | 3 Months Ended |
Mar. 31, 2018 | |
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 - Notio
Derivatives and Hedging - Notional and fair values of derivative instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivatives, Fair Value | ||
Notional Amount | $ 1,087 | $ 955 |
Derivative Assets | 46 | 32 |
Derivative Liabilities | $ 2 | 6 |
Term of derivative contract | 30 days | |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Assets | $ 13 | 9 |
Other Noncurrent Assets | ||
Derivatives, Fair Value | ||
Derivative Assets | 33 | 23 |
Other Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 1 | 3 |
Other Noncurrent Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 1 | 3 |
Derivatives accounted for as hedges | Gross foreign exchange contracts | ||
Derivatives, Fair Value | ||
Notional Amount | 758 | 701 |
Derivative Assets | 45 | 31 |
Derivative Liabilities | 1 | 3 |
Not Designated as Hedging Instrument | Gross foreign exchange contracts | ||
Derivatives, Fair Value | ||
Notional Amount | 329 | 254 |
Derivative Assets | 1 | 1 |
Derivative Liabilities | $ 1 | $ 3 |
Derivatives and Hedging - Sched
Derivatives and Hedging - Schedule of amounts of derivative gains (losses) recognized in the Consolidated Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss | $ 14 | $ 6 |
Hedge gain (loss) to be reclassified during next twelve months | (2) | |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | (4) | 10 |
Compensation and benefits | ||
Derivative [Line Items] | ||
Hedge gain (loss) to be reclassified during next twelve months | 0 | 8 |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | 1 | 13 |
Other General Expenses | ||
Derivative [Line Items] | ||
Hedge gain (loss) to be reclassified during next twelve months | 4 | 1 |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | (1) | (1) |
Interest expense | ||
Derivative [Line Items] | ||
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | (1) | 0 |
Other Income (Expense) | ||
Derivative [Line Items] | ||
Hedge gain (loss) to be reclassified during next twelve months | 10 | (3) |
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | $ (3) | $ (2) |
Derivatives and Hedging - Inter
Derivatives and Hedging - Interest Rate Management Risk Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Estimated pretax losses currently included within Accumulated Other Comprehensive Loss that will be reclassified to earnings in next twelve months | $ 2 | |
Not Designated as Hedging Instrument | Gross foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative gain (loss) | $ 9 | $ 1 |
Derivatives and Hedging - For80
Derivatives and Hedging - Foreign Hedge (Details) - 3 months ended Mar. 31, 2018 $ in Millions | USD ($) | EUR (€) | USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Fair value of hedge of net investment of foreign operations | € 220,000,000 | $ 274 | |
Effective portion of gain reclassified from Accumulated OCI into income | $ 3 |
Fair Value Measurements and F81
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 | Mar. 31, 2018 | Dec. 31, 2017 |
Money market funds and highly liquid debt securities | ||
Assets: | ||
Money market funds and highly liquid debt securities | $ 1,502 | $ 1,847 |
Government bonds | ||
Assets: | ||
Other investments: | 1 | 1 |
Equity investments | ||
Assets: | ||
Other investments: | 3 | 4 |
Gross foreign exchange contracts | ||
Assets: | ||
Derivatives | 54 | 33 |
Liabilities: | ||
Derivatives | 8 | 6 |
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 | 1,502 | 1,847 |
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: | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Gross foreign exchange contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 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: | 3 | 4 |
Significant Other Observable Inputs (Level 2) | Gross foreign exchange contracts | ||
Assets: | ||
Derivatives | 54 | 33 |
Liabilities: | ||
Derivatives | 8 | 6 |
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) | Gross foreign exchange contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | $ 0 | $ 0 |
Fair Value Measurements and F82
Fair Value Measurements and Financial Instruments - Schedule of financial instruments where the carrying amounts and fair values differ (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Fair value of financial instrument | ||
Current portion of long-term debt | $ 0 | $ 299 |
Long-term debt | 5,697 | 5,667 |
Fair Value | Fair Value, Inputs, Level 2 | ||
Fair value of financial instrument | ||
Current portion of long-term debt | 0 | 301 |
Long-term debt | $ 6,077 | $ 6,267 |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) £ in Millions, $ in Millions | Mar. 31, 2018USD ($) | Jan. 26, 2018USD ($) | Oct. 03, 2017NZD ($) | Dec. 20, 2016GBP (£) | Jun. 29, 2015NZD ($) | Sep. 14, 2010USD ($) | Aug. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Apr. 30, 2014GBP (£) |
Legal, Guarantees and Indemnifications | |||||||||||||
Revenue | $ 3,090,000,000 | $ 2,381,000,000 | |||||||||||
Maximum potential funding under commitments | $ 68,000,000 | 68,000,000 | $ 95,000,000 | ||||||||||
Letters of credit outstanding | 117,000,000 | 117,000,000 | $ 96,000,000 | ||||||||||
Potential Claim for Pension Advisory Services | |||||||||||||
Legal, Guarantees and Indemnifications | |||||||||||||
Estimate of possible loss | 64,000,000 | 64,000,000 | £ 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 | $ 50,000,000 | $ 204,000,000 | $ 200,000,000 | ||||||||||
Pending Litigation | Trustees Of Gleeds Pension Fund 2016 | |||||||||||||
Legal, Guarantees and Indemnifications | |||||||||||||
Estimate of possible loss | 100,000,000 | 100,000,000 | |||||||||||
Damages sought | £ | £ 70 | ||||||||||||
Pending Litigation | Lyttleton Port Company Limited | |||||||||||||
Legal, Guarantees and Indemnifications | |||||||||||||
Damages sought | 134,000,000 | $ 184 | |||||||||||
Pending Litigation | Christchurch City Council | |||||||||||||
Legal, Guarantees and Indemnifications | |||||||||||||
Damages sought | 385,000,000 | $ 528 | |||||||||||
Minimum | |||||||||||||
Legal, Guarantees and Indemnifications | |||||||||||||
Estimate of possible loss | 0 | 0 | |||||||||||
Maximum | |||||||||||||
Legal, Guarantees and Indemnifications | |||||||||||||
Estimate of possible loss | 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 | 22,000,000 | 22,000,000 | |||||||||||
Loss contingency accrual payments | 0 | ||||||||||||
Maximum potential funding under commitments | 96,700,000 | 96,700,000 | |||||||||||
Discontinued Operations, Disposed of by Sale | Tempo Business | Performance Guarantee | |||||||||||||
Legal, Guarantees and Indemnifications | |||||||||||||
Guarantor obligations, current carrying value | 1,000,000 | 1,000,000 | |||||||||||
Loss contingency accrual payments | 0 | ||||||||||||
Maximum potential funding under commitments | $ 206,000,000 | $ 206,000,000 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | |
Mar. 31, 2018segmentmetricrevenue_line | Mar. 31, 2017segment | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 1 | |
Number of revenue lines | revenue_line | 5 | |
Number of performance metrics | metric | 4 | |
Number of operating segments | 1 |
Guarantee of Registered Secur85
Guarantee of Registered Securities (Narrative) (Details) | Mar. 31, 2018 |
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 Secur86
Guarantee of Registered Securities - Condensed Consolidating Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Total revenue | $ 3,090 | $ 2,381 |
Expenses | ||
Compensation and benefits | 1,616 | 1,469 |
Information technology | 115 | 88 |
Premises | 93 | 84 |
Depreciation of fixed assets | 39 | 54 |
Amortization and impairment of intangible assets | 110 | 43 |
Other general expenses | 318 | 308 |
Total operating expenses | 2,291 | 2,046 |
Operating income | 799 | 335 |
Interest income | 4 | 2 |
Interest expense | (70) | (70) |
Intercompany interest income (expense) | 0 | 0 |
Intercompany other income (expense) | 0 | 0 |
Other income (expense) | (15) | (2) |
Income from continuing operations before income taxes | 718 | 265 |
Income tax expense (benefit) | 114 | 0 |
Net income from continuing operations | 604 | 265 |
Net income from discontinued operations | 6 | 40 |
Net income (loss) before equity in earnings of subsidiaries | 610 | 305 |
Equity in earnings of subsidiaries, net of tax | 0 | 0 |
Net income | 610 | 305 |
Less: Net income attributable to noncontrolling interests | 16 | 14 |
Net income attributable to Aon shareholders | 594 | 291 |
Aon plc | ||
Revenue | ||
Total revenue | 0 | 0 |
Expenses | ||
Compensation and benefits | 19 | 52 |
Information technology | 0 | 0 |
Premises | 0 | 0 |
Depreciation of fixed assets | 0 | 0 |
Amortization and impairment of intangible assets | 0 | 0 |
Other general expenses | 1 | 5 |
Total operating expenses | 20 | 57 |
Operating income | (20) | (57) |
Interest income | 0 | 0 |
Interest expense | (49) | (45) |
Intercompany interest income (expense) | 4 | 3 |
Intercompany other income (expense) | (71) | (50) |
Other income (expense) | (7) | (10) |
Income from continuing operations before income taxes | (143) | (159) |
Income tax expense (benefit) | (16) | (14) |
Net income from continuing operations | (127) | (145) |
Net income from discontinued operations | 0 | 0 |
Net income (loss) before equity in earnings of subsidiaries | (127) | (145) |
Equity in earnings of subsidiaries, net of tax | 718 | 428 |
Net income | 591 | 283 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Aon shareholders | 591 | 283 |
Aon Corporation | ||
Revenue | ||
Total revenue | 0 | 0 |
Expenses | ||
Compensation and benefits | 1 | 3 |
Information technology | 0 | 0 |
Premises | 0 | 0 |
Depreciation of fixed assets | 0 | 0 |
Amortization and impairment of intangible assets | 0 | 0 |
Other general expenses | 0 | 2 |
Total operating expenses | 1 | 5 |
Operating income | (1) | (5) |
Interest income | 14 | 6 |
Interest expense | (24) | (24) |
Intercompany interest income (expense) | (128) | (136) |
Intercompany other income (expense) | (5) | 7 |
Other income (expense) | (6) | 9 |
Income from continuing operations before income taxes | (150) | (143) |
Income tax expense (benefit) | (27) | (54) |
Net income from continuing operations | (123) | (89) |
Net income from discontinued operations | 0 | 0 |
Net income (loss) before equity in earnings of subsidiaries | (123) | (89) |
Equity in earnings of subsidiaries, net of tax | 704 | 271 |
Net income | 581 | 182 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Aon shareholders | 581 | 182 |
Other Non-Guarantor Subsidiaries | ||
Revenue | ||
Total revenue | 3,090 | 2,381 |
Expenses | ||
Compensation and benefits | 1,596 | 1,414 |
Information technology | 115 | 88 |
Premises | 93 | 84 |
Depreciation of fixed assets | 39 | 54 |
Amortization and impairment of intangible assets | 110 | 43 |
Other general expenses | 317 | 301 |
Total operating expenses | 2,270 | 1,984 |
Operating income | 820 | 397 |
Interest income | 0 | (2) |
Interest expense | (7) | (3) |
Intercompany interest income (expense) | 124 | 133 |
Intercompany other income (expense) | 76 | 43 |
Other income (expense) | (5) | (9) |
Income from continuing operations before income taxes | 1,008 | 559 |
Income tax expense (benefit) | 157 | 68 |
Net income from continuing operations | 851 | 491 |
Net income from discontinued operations | 6 | 40 |
Net income (loss) before equity in earnings of subsidiaries | 857 | 531 |
Equity in earnings of subsidiaries, net of tax | 581 | 182 |
Net income | 1,438 | 713 |
Less: Net income attributable to noncontrolling interests | 16 | 14 |
Net income attributable to Aon shareholders | 1,422 | 699 |
Consolidation Adjustments | ||
Revenue | ||
Total revenue | 0 | 0 |
Expenses | ||
Compensation and benefits | 0 | 0 |
Information technology | 0 | 0 |
Premises | 0 | 0 |
Depreciation of fixed assets | 0 | 0 |
Amortization and impairment of intangible assets | 0 | 0 |
Other general expenses | 0 | 0 |
Total operating expenses | 0 | 0 |
Operating income | 0 | 0 |
Interest income | (10) | (2) |
Interest expense | 10 | 2 |
Intercompany interest income (expense) | 0 | 0 |
Intercompany other income (expense) | 0 | 0 |
Other income (expense) | 3 | 8 |
Income from continuing operations before income taxes | 3 | 8 |
Income tax expense (benefit) | 0 | 0 |
Net income from continuing operations | 3 | 8 |
Net income from discontinued operations | 0 | 0 |
Net income (loss) before equity in earnings of subsidiaries | 3 | 8 |
Equity in earnings of subsidiaries, net of tax | (2,003) | (881) |
Net income | (2,000) | (873) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Aon shareholders | $ (2,000) | $ (873) |
Guarantee of Registered Secur87
Guarantee of Registered Securities - Condensed Consolidating Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net income | $ 610 | $ 305 |
Less: Net income attributable to noncontrolling interests | 16 | 14 |
Net income attributable to Aon shareholders | 594 | 291 |
Change in fair value of financial instruments | 14 | (2) |
Foreign currency translation adjustments | 247 | 147 |
Postretirement benefit obligation | 48 | 18 |
Total other comprehensive (loss) income | 309 | 163 |
Equity in other comprehensive income of subsidiaries, net of tax | 0 | 0 |
Less: Other comprehensive loss attributable to noncontrolling interests | 3 | 1 |
Total other comprehensive income attributable to Aon shareholders | 306 | 162 |
Comprehensive income (loss) attributable to Aon shareholders | 900 | 453 |
Aon plc | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net income | 591 | 283 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Aon shareholders | 591 | 283 |
Change in fair value of financial instruments | 0 | 0 |
Foreign currency translation adjustments | 0 | 0 |
Postretirement benefit obligation | 0 | 0 |
Total other comprehensive (loss) income | 0 | 0 |
Equity in other comprehensive income of subsidiaries, net of tax | 309 | 170 |
Less: Other comprehensive loss attributable to noncontrolling interests | 0 | 0 |
Total other comprehensive income attributable to Aon shareholders | 309 | 170 |
Comprehensive income (loss) attributable to Aon shareholders | 900 | 453 |
Aon Corporation | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net income | 581 | 182 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Aon shareholders | 581 | 182 |
Change in fair value of financial instruments | 3 | (2) |
Foreign currency translation adjustments | 0 | 0 |
Postretirement benefit obligation | 11 | 8 |
Total other comprehensive (loss) income | 14 | 6 |
Equity in other comprehensive income of subsidiaries, net of tax | 285 | 164 |
Less: Other comprehensive loss attributable to noncontrolling interests | 0 | 0 |
Total other comprehensive income attributable to Aon shareholders | 299 | 170 |
Comprehensive income (loss) attributable to Aon shareholders | 880 | 352 |
Other Non-Guarantor Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net income | 1,438 | 713 |
Less: Net income attributable to noncontrolling interests | 16 | 14 |
Net income attributable to Aon shareholders | 1,422 | 699 |
Change in fair value of financial instruments | 11 | 0 |
Foreign currency translation adjustments | 250 | 155 |
Postretirement benefit obligation | 37 | 10 |
Total other comprehensive (loss) income | 298 | 165 |
Equity in other comprehensive income of subsidiaries, net of tax | 299 | 170 |
Less: Other comprehensive loss attributable to noncontrolling interests | 3 | 1 |
Total other comprehensive income attributable to Aon shareholders | 594 | 334 |
Comprehensive income (loss) attributable to Aon shareholders | 2,016 | 1,033 |
Consolidation Adjustments | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net income | (2,000) | (873) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Aon shareholders | (2,000) | (873) |
Change in fair value of financial instruments | 0 | 0 |
Foreign currency translation adjustments | (3) | (8) |
Postretirement benefit obligation | 0 | 0 |
Total other comprehensive (loss) income | (3) | (8) |
Equity in other comprehensive income of subsidiaries, net of tax | (893) | (504) |
Less: Other comprehensive loss attributable to noncontrolling interests | 0 | 0 |
Total other comprehensive income attributable to Aon shareholders | (896) | (512) |
Comprehensive income (loss) attributable to Aon shareholders | $ (2,896) | $ (1,385) |
Guarantee of Registered Secur88
Guarantee of Registered Securities - Condensed Consolidating Statement of Financial Position (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | |||||
Cash and cash equivalents | $ 597 | $ 756 | |||
Short-term investments | 118 | 529 | |||
Receivables, net | 3,053 | $ 2,730 | 2,478 | ||
Fiduciary assets | 10,738 | 9,625 | |||
Current intercompany receivables | 0 | 0 | |||
Other current assets | 609 | 587 | 289 | ||
Total Current Assets | 15,115 | 13,677 | |||
Goodwill | 8,550 | 8,358 | |||
Intangible assets, net | 1,662 | 1,733 | |||
Fixed assets, net | 578 | 564 | |||
Deferred tax assets | 296 | 261 | 389 | ||
Non-current intercompany receivables | 0 | 0 | |||
Prepaid pension | 1,207 | 1,060 | |||
Other non-current assets | 439 | 452 | 307 | ||
Investment in subsidiary | 0 | 0 | |||
TOTAL ASSETS | 27,847 | 26,088 | |||
CURRENT LIABILITIES | |||||
Accounts payable and accrued liabilities | 1,545 | 1,969 | 1,961 | ||
Short-term debt and current portion of long-term debt | 403 | 299 | |||
Fiduciary liabilities | 10,738 | 9,625 | |||
Current intercompany payables | 0 | 0 | |||
Other current liabilities | 972 | 883 | 870 | ||
Total Current Liabilities | 13,658 | 12,755 | |||
Long-term debt | 5,697 | 5,667 | |||
Deferred tax liabilities | 243 | 169 | 127 | ||
Pension, other postretirement, and postemployment liabilities | 1,759 | 1,789 | |||
Non-current intercompany payables | 0 | 0 | |||
Other non-current liabilities | 1,105 | 1,099 | 1,102 | ||
TOTAL LIABILITIES | 22,462 | 21,440 | |||
TOTAL AON SHAREHOLDERS’ EQUITY | 5,301 | 4,583 | |||
Noncontrolling interests | 84 | 65 | |||
TOTAL EQUITY | 5,385 | $ 5,155 | 4,648 | $ 5,826 | $ 5,532 |
TOTAL LIABILITIES AND EQUITY | 27,847 | 26,088 | |||
Aon plc | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | 0 | 1 | |||
Short-term investments | 0 | 0 | |||
Receivables, net | 0 | 0 | |||
Fiduciary assets | 0 | 0 | |||
Current intercompany receivables | 186 | 165 | |||
Other current assets | 1 | 1 | |||
Total Current Assets | 187 | 167 | |||
Goodwill | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Fixed assets, net | 0 | 0 | |||
Deferred tax assets | 99 | 99 | |||
Non-current intercompany receivables | 426 | 414 | |||
Prepaid pension | 0 | 0 | |||
Other non-current assets | 1 | 1 | |||
Investment in subsidiary | 10,406 | 8,884 | |||
TOTAL ASSETS | 11,119 | 9,565 | |||
CURRENT LIABILITIES | |||||
Accounts payable and accrued liabilities | 896 | 574 | |||
Short-term debt and current portion of long-term debt | 374 | 0 | |||
Fiduciary liabilities | 0 | 0 | |||
Current intercompany payables | 262 | 130 | |||
Other current liabilities | 0 | 16 | |||
Total Current Liabilities | 1,532 | 720 | |||
Long-term debt | 4,282 | 4,251 | |||
Deferred tax liabilities | 0 | 0 | |||
Pension, other postretirement, and postemployment liabilities | 0 | 0 | |||
Non-current intercompany payables | 0 | 0 | |||
Other non-current liabilities | 4 | 11 | |||
TOTAL LIABILITIES | 5,818 | 4,982 | |||
TOTAL AON SHAREHOLDERS’ EQUITY | 5,301 | 4,583 | |||
Noncontrolling interests | 0 | 0 | |||
TOTAL EQUITY | 5,301 | 4,583 | |||
TOTAL LIABILITIES AND EQUITY | 11,119 | 9,565 | |||
Aon Corporation | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | 2,603 | 2,524 | |||
Short-term investments | 1 | 355 | |||
Receivables, net | 1 | 2 | |||
Fiduciary assets | 0 | 0 | |||
Current intercompany receivables | 2,355 | 1,046 | |||
Other current assets | 19 | 29 | |||
Total Current Assets | 4,979 | 3,956 | |||
Goodwill | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Fixed assets, net | 0 | 0 | |||
Deferred tax assets | 391 | 396 | |||
Non-current intercompany receivables | 261 | 261 | |||
Prepaid pension | 6 | 6 | |||
Other non-current assets | 32 | 35 | |||
Investment in subsidiary | 19,124 | 17,910 | |||
TOTAL ASSETS | 24,793 | 22,564 | |||
CURRENT LIABILITIES | |||||
Accounts payable and accrued liabilities | 12 | 36 | |||
Short-term debt and current portion of long-term debt | 26 | 0 | |||
Fiduciary liabilities | 0 | 0 | |||
Current intercompany payables | 12,098 | 11,149 | |||
Other current liabilities | 65 | 64 | |||
Total Current Liabilities | 12,201 | 11,249 | |||
Long-term debt | 1,414 | 1,415 | |||
Deferred tax liabilities | 0 | 0 | |||
Pension, other postretirement, and postemployment liabilities | 1,365 | 1,391 | |||
Non-current intercompany payables | 8,412 | 8,398 | |||
Other non-current liabilities | 90 | 91 | |||
TOTAL LIABILITIES | 23,482 | 22,544 | |||
TOTAL AON SHAREHOLDERS’ EQUITY | 1,311 | 20 | |||
Noncontrolling interests | 0 | 0 | |||
TOTAL EQUITY | 1,311 | 20 | |||
TOTAL LIABILITIES AND EQUITY | 24,793 | 22,564 | |||
Other Non-Guarantor Subsidiaries | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | 640 | 793 | |||
Short-term investments | 117 | 174 | |||
Receivables, net | 3,052 | 2,476 | |||
Fiduciary assets | 10,738 | 9,625 | |||
Current intercompany receivables | 10,953 | 10,824 | |||
Other current assets | 589 | 259 | |||
Total Current Assets | 26,089 | 24,151 | |||
Goodwill | 8,550 | 8,358 | |||
Intangible assets, net | 1,662 | 1,733 | |||
Fixed assets, net | 578 | 564 | |||
Deferred tax assets | 57 | 143 | |||
Non-current intercompany receivables | 8,247 | 8,232 | |||
Prepaid pension | 1,201 | 1,054 | |||
Other non-current assets | 406 | 271 | |||
Investment in subsidiary | 1,311 | 20 | |||
TOTAL ASSETS | 48,101 | 44,526 | |||
CURRENT LIABILITIES | |||||
Accounts payable and accrued liabilities | 3,283 | 3,913 | |||
Short-term debt and current portion of long-term debt | 3 | 299 | |||
Fiduciary liabilities | 10,738 | 9,625 | |||
Current intercompany payables | 1,134 | 756 | |||
Other current liabilities | 907 | 790 | |||
Total Current Liabilities | 16,065 | 15,383 | |||
Long-term debt | 1 | 1 | |||
Deferred tax liabilities | 494 | 376 | |||
Pension, other postretirement, and postemployment liabilities | 394 | 398 | |||
Non-current intercompany payables | 522 | 509 | |||
Other non-current liabilities | 1,011 | 1,000 | |||
TOTAL LIABILITIES | 18,487 | 17,667 | |||
TOTAL AON SHAREHOLDERS’ EQUITY | 29,530 | 26,794 | |||
Noncontrolling interests | 84 | 65 | |||
TOTAL EQUITY | 29,614 | 26,859 | |||
TOTAL LIABILITIES AND EQUITY | 48,101 | 44,526 | |||
Consolidation Adjustments | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | (2,646) | (2,562) | |||
Short-term investments | 0 | 0 | |||
Receivables, net | 0 | 0 | |||
Fiduciary assets | 0 | 0 | |||
Current intercompany receivables | (13,494) | (12,035) | |||
Other current assets | 0 | 0 | |||
Total Current Assets | (16,140) | (14,597) | |||
Goodwill | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Fixed assets, net | 0 | 0 | |||
Deferred tax assets | (251) | (249) | |||
Non-current intercompany receivables | (8,934) | (8,907) | |||
Prepaid pension | 0 | 0 | |||
Other non-current assets | 0 | 0 | |||
Investment in subsidiary | (30,841) | (26,814) | |||
TOTAL ASSETS | (56,166) | (50,567) | |||
CURRENT LIABILITIES | |||||
Accounts payable and accrued liabilities | (2,646) | (2,562) | |||
Short-term debt and current portion of long-term debt | 0 | 0 | |||
Fiduciary liabilities | 0 | 0 | |||
Current intercompany payables | (13,494) | (12,035) | |||
Other current liabilities | 0 | 0 | |||
Total Current Liabilities | (16,140) | (14,597) | |||
Long-term debt | 0 | 0 | |||
Deferred tax liabilities | (251) | (249) | |||
Pension, other postretirement, and postemployment liabilities | 0 | 0 | |||
Non-current intercompany payables | (8,934) | (8,907) | |||
Other non-current liabilities | 0 | 0 | |||
TOTAL LIABILITIES | (25,325) | (23,753) | |||
TOTAL AON SHAREHOLDERS’ EQUITY | (30,841) | (26,814) | |||
Noncontrolling interests | 0 | 0 | |||
TOTAL EQUITY | (30,841) | (26,814) | |||
TOTAL LIABILITIES AND EQUITY | $ (56,166) | $ (50,567) |
Guarantee of Registered Secur89
Guarantee of Registered Securities - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Cash provided by operating activities - continuing operations | $ 140 | $ 182 | |
Cash provided by operating activities - discontinued operations | 0 | 58 | |
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 140 | 240 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from investments | 17 | 25 | |
Payments for investments | (11) | (9) | |
Net purchases of short-term investments - non-fiduciary | 415 | 94 | |
Acquisition of businesses, net of cash acquired | (29) | (46) | |
Sale of businesses, net of cash sold | (1) | (2) | |
Capital expenditures | (45) | (34) | |
Cash provided by (used for) investing activities - continuing operations | 346 | 28 | |
Cash used for investing activities - discontinued operations | 0 | (15) | |
CASH PROVIDED BY INVESTING ACTIVITIES | 346 | 13 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Share repurchase | (569) | (126) | |
Advances from (to) affiliates | 0 | 0 | |
Issuance of shares for employee benefit plans | (109) | (85) | |
Issuance of debt | 808 | 992 | |
Repayment of debt | (704) | (950) | |
Cash dividends to shareholders | (89) | (87) | |
Noncontrolling interests and other financing activities | 0 | (2) | |
Cash provided by (used for) financing activities - continuing operations | (663) | (258) | |
Cash used for financing activities - discontinued operations | 0 | 0 | |
CASH USED FOR FINANCING ACTIVITIES | (663) | (258) | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 18 | 25 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (159) | 20 | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 756 | 431 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 597 | 451 | |
Cash and cash equivalents from discontinued operations | 18 | $ 5 | |
Aon plc | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Cash provided by operating activities - continuing operations | (21) | (28) | |
Cash provided by operating activities - discontinued operations | 0 | 0 | |
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | (21) | (28) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from investments | 0 | 0 | |
Payments for investments | (1) | 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 | (1) | 0 | |
Cash used for investing activities - discontinued operations | 0 | 0 | |
CASH PROVIDED BY INVESTING ACTIVITIES | (1) | 0 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Share repurchase | (569) | (126) | |
Advances from (to) affiliates | 418 | 290 | |
Issuance of shares for employee benefit plans | (109) | (85) | |
Issuance of debt | 431 | 457 | |
Repayment of debt | (61) | (421) | |
Cash dividends to shareholders | (89) | (87) | |
Noncontrolling interests and other financing activities | 0 | 0 | |
Cash provided by (used for) financing activities - continuing operations | 21 | 28 | |
Cash used for financing activities - discontinued operations | 0 | 0 | |
CASH USED FOR FINANCING ACTIVITIES | 21 | 28 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1) | 0 | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1 | 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 | 626 | 1,117 | |
Cash provided by operating activities - discontinued operations | 0 | 0 | |
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 626 | 1,117 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from investments | 10 | 565 | |
Payments for investments | (5) | (4) | |
Net purchases of short-term investments - non-fiduciary | 355 | 94 | |
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 | 360 | 655 | |
Cash used for investing activities - discontinued operations | 0 | 0 | |
CASH PROVIDED BY INVESTING ACTIVITIES | 360 | 655 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Share repurchase | 0 | 0 | |
Advances from (to) affiliates | (933) | (1,990) | |
Issuance of shares for employee benefit plans | 0 | 0 | |
Issuance of debt | 375 | 535 | |
Repayment of debt | (349) | (525) | |
Cash dividends to shareholders | 0 | 0 | |
Noncontrolling interests and other financing activities | 0 | 0 | |
Cash provided by (used for) financing activities - continuing operations | (907) | (1,980) | |
Cash used for financing activities - discontinued operations | 0 | 0 | |
CASH USED FOR FINANCING ACTIVITIES | (907) | (1,980) | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 79 | (208) | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 2,524 | 1,633 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 2,603 | 1,425 | |
Other Non-Guarantor Subsidiaries | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Cash provided by operating activities - continuing operations | 277 | 533 | |
Cash provided by operating activities - discontinued operations | 0 | 58 | |
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 277 | 591 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from investments | 7 | 4 | |
Payments for investments | (6) | (546) | |
Net purchases of short-term investments - non-fiduciary | 60 | 0 | |
Acquisition of businesses, net of cash acquired | (29) | (46) | |
Sale of businesses, net of cash sold | (1) | (2) | |
Capital expenditures | (45) | (34) | |
Cash provided by (used for) investing activities - continuing operations | (14) | (624) | |
Cash used for investing activities - discontinued operations | 0 | (15) | |
CASH PROVIDED BY INVESTING ACTIVITIES | (14) | (639) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Share repurchase | 0 | 0 | |
Advances from (to) affiliates | (142) | (17) | |
Issuance of shares for employee benefit plans | 0 | 0 | |
Issuance of debt | 2 | 0 | |
Repayment of debt | (294) | (4) | |
Cash dividends to shareholders | 0 | 0 | |
Noncontrolling interests and other financing activities | 0 | (2) | |
Cash provided by (used for) financing activities - continuing operations | (434) | (23) | |
Cash used for financing activities - discontinued operations | 0 | 0 | |
CASH USED FOR FINANCING ACTIVITIES | (434) | (23) | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 18 | 25 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (153) | (46) | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 793 | 660 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 640 | 614 | |
Consolidation Adjustments | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Cash provided by operating activities - continuing operations | (742) | (1,440) | |
Cash provided by operating activities - discontinued operations | 0 | 0 | |
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | (742) | (1,440) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from investments | 0 | (544) | |
Payments for investments | 1 | 541 | |
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 | 1 | (3) | |
Cash used for investing activities - discontinued operations | 0 | 0 | |
CASH PROVIDED BY INVESTING ACTIVITIES | 1 | (3) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Share repurchase | 0 | 0 | |
Advances from (to) affiliates | 657 | 1,717 | |
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 | 657 | 1,717 | |
Cash used for financing activities - discontinued operations | 0 | 0 | |
CASH USED FOR FINANCING ACTIVITIES | 657 | 1,717 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (84) | 274 | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | (2,562) | (1,862) | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ (2,646) | $ (1,588) |