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Aon Reports Fourth Quarter and Full Year 2016 Results

LONDON, Feb. 10, 2017 /PRNewswire/ --

Fourth Quarter Key Metrics and Highlights1

  • Total revenue was $3.3 billion with organic revenue growth of 3%
  • Operating margin decreased 290 basis points to 18.9%, and operating margin, adjusted for certain items, increased 210 basis points to 26.2%
  • EPS decreased 11% to $1.87, and EPS, adjusted for certain items, increased 13% to $2.56
  • The Company closed its acquisition of Stroz Friedberg, strengthening its ability to serve clients as the global leader in cyber risk mitigation
  • The Company closed its acquisition of Admix, a leading health and benefits brokerage firm in Brazil
  • Repurchased 1.8 million Class A Ordinary Shares for approximately $200 million

Full Year Key Metrics and Highlights

  • Total revenue was $11.6 billion with organic revenue growth of 3%
  • Operating margin increased 60 basis points to 16.4%, and operating margin, adjusted for certain items, increased 80 basis points to 20.8%
  • EPS increased 6% to $5.16, and EPS, adjusted for certain items, increased 7% to $6.59
  • Cash flow from operations increased 16% to a record $2.3 billion, and free cash flow increased 22% to a record $2.1 billion
  • Repurchased 12.2 million Class A Ordinary Shares for approximately $1.3 billion
  • Subsequent to the close of the fourth quarter, the Company signed a definitive agreement to sell the Benefits Administration and HR Business Process Outsourcing businesses for gross cash proceeds up to $4.8 billion, including $4.3 billion in gross cash at closing and additional consideration up to $500 million based on future performance.  Total after-tax cash proceeds are expected to be approximately $3.0 billion.

Aon plc (NYSE: AON) today reported results for the three and twelve months ended December 31, 2016.

Net income attributable to Aon shareholders was $502 million, or $1.87 per share, compared to $584 million, or $2.09 per share, for the prior year quarter.  Net income per share attributable to Aon shareholders, adjusted for certain items, increased 13% to $2.56, compared to $2.27 in the prior year quarter. Certain items that impacted fourth quarter results and comparisons with the prior year quarter are detailed in the "Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings per Share" on page 13 of this press release.

"We ended 2016 in a strong position, driving positive performance across each of our key metrics for both the fourth quarter and the full year, highlighted by growth across every major business and record operating margin in Risk Solutions," said Greg Case, President and Chief Executive Officer.  "Substantial investments in high-growth areas of our industry-leading platform, improved operational performance, and record free cash flow generation of more than $2.1 billion, continue to position the firm for increased shareholder value creation over the long-term."

1Refer to "Revision of Previously Issued Financial Statements" as disclosed in the schedules on pages 16 and 17.

FOURTH QUARTER FINANCIAL SUMMARY

Total revenue in the fourth quarter increased 1% to $3.3 billion compared to the prior year quarter driven primarily by 3% organic revenue growth, partially offset by a 2% unfavorable impact from foreign currency translation.

Total operating expenses for the fourth quarter increased 5% to $2.7 billion compared to the prior year quarter due primarily to $158 million of non-cash expenses related to certain pension settlements, $15 million of transaction costs related to the pending sale of certain assets, $6 million of transaction costs related to acquisitions, and an increase in expense to support 3% organic revenue growth, partially offset by a $67 million favorable impact from foreign currency translation, a $10 million decrease in the core expense base related to divested businesses, net of acquisitions, and a $7 million decrease in intangible asset amortization.

Depreciation expense increased 2%, or $1 million, in the fourth quarter to $61 million compared to the prior year quarter.

Intangible asset amortization expense decreased 9%, or $7 million, in the fourth quarter to $70 million compared to the prior year quarter, consisting of a $9 million decrease in HR Solutions and a $2 million increase in Risk Solutions.

Foreign currency exchange rates in the fourth quarter had a $0.04 per share, or $13 million pretax, favorable impact (+$13 million in Risk Solutions, -$6 million in HR Solutions, and +$6 million Unallocated) on GAAP net income and a $0.03 per share, or $10 million pretax, favorable impact (+$12 million in Risk Solutions, -$8 million in HR Solutions, and +$6 million Unallocated) on adjusted net income if the Company were to translate prior year quarter results at current quarter foreign exchange rates.

Effective tax rate used in the U.S. GAAP financial statements for the fourth quarter was 10.9%, compared to the prior year quarter of 15.8%.  After adjusting to exclude the applicable tax impact associated with certain non-cash pension expenses, the adjusted effective tax rate for the fourth quarter of 2016 was 14.9% compared to 17.9% in the prior year quarter, due primarily to changes in the geographic distribution of income and certain favorable discrete tax adjustments. The prior year quarter adjusted effective tax rate excludes the applicable tax impact associated with expenses related to certain legacy litigation.  These adjustments are discussed in the "Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings per Share" on page 13 of this press release.

Average diluted shares outstanding decreased 4% to 268.3 million in the fourth quarter compared to 279.3 million in the prior year quarter.  The Company repurchased 1.8 million Class A Ordinary Shares for approximately $200 million in the fourth quarter.  As of December 31, 2016, the Company had $2.8 billion of remaining authorization under its share repurchase program.  Subsequent to the close of the fourth quarter, the Board of Directors authorized a $5.0 billion increase to the existing remaining authorization under its share repurchase program.  As of February 10, 2017, the Company has approximately $7.7 billion of remaining authorization under its share repurchase program.

Cash flow from operations for 2016 increased 16%, or $317 million, compared to the prior year to a record $2.3 billion driven by an increase in underlying net income after adjusting for certain non-cash pension expenses, lower cash pension contributions, and lower cash tax payments.

Free cash flow, defined as cash flow from operations less capital expenditures, increased 22%, or $385 million, compared to the prior year to a record $2.1 billion for 2016, driven by an increase in cash flow from operations and a $68 million decrease in capital expenditures.  A reconciliation of free cash flow to cash flow from operations can be found on the "Reconciliation of Non-GAAP Measures - Organic Revenue and Free Cash Flow" on page 12 of this press release.

FOURTH QUARTER SEGMENT REVIEW1

Certain noteworthy items impacted operating income and operating margins in the fourth quarters of 2016 and 2015.  The fourth quarter segment information provided below includes supplemental information related to organic revenue, adjusted operating income and adjusted operating margin, which is described in detail on the "Reconciliation of Non-GAAP Measures - Organic Revenue and Free Cash Flow" on page 12 and "Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings per Share" on page 13 of this press release.

RISK SOLUTIONS

               

Less:

   

(millions)

 

Three Months Ended

     

Less:

 

Acquisitions,

   

Commissions,

Fees and Other

 

December 31,
2016

 

December 31,
 2015

 

%

Change

 

Currency

Impact

 

Divestitures,

Other

 

Organic

Revenue

Retail

 

$

1,716

 

$

1,681

 

2%

 

(2)%

 

1%

 

3%

Reinsurance

 

329

 

323

 

2

 

 

 

2

Subtotal

 

$

2,045

 

$

2,004

 

2%

 

(1)%

 

—%

 

3%

Investment Income

 

6

 

5

 

20

           

Total Revenue

 

$

2,051

 

$

2,009

 

2%

           

 

Risk Solutions total revenue for the fourth quarter increased 2% compared to the prior year quarter driven by 3% organic growth in commissions and fees, partially offset by a 1% unfavorable impact from foreign currency translation.  The Company has identified certain immaterial legacy errors related to the quarterly timing of revenue recognition within the Americas Retail brokerage business in Risk Solutions that affected quarterly revenue amounts previously reported as discussed in the "Revision of Previously Issued Financial Statements" on pages 16 and 17 of this press release.  The impact of the errors on the Company's annual revenue and organic growth is immaterial.

Retail organic revenue for the fourth quarter increased 3% reflecting revenue growth in both the Americas and International businesses.  Americas organic revenue increased 3% reflecting strong growth in Affinity and in Latin America as well as continued record new business generation in US Retail.  International organic revenue increased 2% driven by growth across every major region, highlighted by double-digit growth in Health and Benefits brokerage across Asia and EMEA, and overall strength across the Pacific driven by strong new business generation.

Reinsurance organic revenue for the fourth quarter increased 2% compared to the prior year quarter driven by new business generation in treaty and growth in facultative placements, partially offset by a decline in capital markets transactions and advisory business, as well as a modest unfavorable market impact globally.

1Refer to "Revision of Previously Issued Financial Statements" as disclosed in the schedules on pages 16 and 17.

   

Three Months Ended

   

(millions)

 

December 31,
 2016

 

December 31,
 2015

 

%

 Change

Revenue

 

$

2,051

 

$

2,009

 

2%

Expenses

           

Compensation and benefits

 

1,190

 

1,130

 

5

Other general expenses

 

406

 

388

 

5

Total operating expenses

 

1,596

 

1,518

 

5

Operating income

 

$

455

 

$

491

 

(7)%

Operating margin

 

22.2%

 

24.4%

   

Operating income - adjusted

 

$

566

 

$

517

 

9%

Operating margin - adjusted

 

27.6%

 

25.7%

   

 

Compensation and benefits for the fourth quarter increased 5%, or $60 million, compared to the prior year quarter due primarily to $83 million of non-cash expenses related to certain pension settlements and a $20 million increase in the core expense base related to acquired businesses, net of divestitures, partially offset by a $26 million favorable impact from foreign currency translation, and expense discipline.

Other general expenses for the fourth quarter increased 5%, or $18 million, compared to the prior year quarter due primarily to an increase in expense to support 3% organic revenue growth, a $12 million increase in the core expense base related to acquired businesses, net of divestitures, $6 million of transaction costs related to acquisitions, and a $2 million increase in intangible asset amortization, partially offset by a $15 million favorable impact from foreign currency translation.

Fourth quarter operating income decreased 7% to $455 million compared to the prior year quarter.  Adjusting for certain items detailed on page 13 of this press release, operating income increased 9%, or $49 million, and operating margin increased 190 basis points to 27.6%, each compared to the prior year quarter.  The increase in adjusted operating margin was driven primarily by organic revenue growth of 3%, return on investments in data and analytics across the portfolio, and a 100 basis point favorable impact from foreign currency translation, partially offset by $6 million, or -30 basis points, of transaction costs related to acquisitions.

 HR SOLUTIONS

(millions)

 

Three Months Ended

     

Less:

 

Less:

Acquisitions,

   

Commissions,

Fees and Other

 

December 31,
 2016

 

December 31,
 2015

 

%
Change

 

Currency
Impact

 

Divestitures,
Other

 

Organic
Revenue

Consulting Services

 

$

446

 

$

464

 

(4)%

 

(4)%

 

—%

 

—%

Outsourcing

 

854

 

839

 

2

 

(1)

 

(5)

 

8

Intersegment

 

(19)

 

(13)

 

N/A

 

N/A

 

N/A

 

N/A

Subtotal

 

$

1,281

 

$

1,290

 

(1)%

 

(2)%

 

(4)%

 

5%

Investment Income

 

 

 

—%

           

Total Revenue

 

$

1,281

 

$

1,290

 

(1)%

           

 

HR Solutions total revenue for the fourth quarter decreased 1% to $1.3 billion compared to the prior year quarter driven by a 4% decrease in commissions and fees related to net divestitures and a 2% unfavorable impact from foreign currency translation, partially offset by 5% organic growth in commissions and fees.

Organic revenue in Consulting Services was flat as continued growth in retirement solutions, particularly for investment consulting was offset by a decline in project-related work from the prior year quarter and a modest decline in talent and compensation consulting. Organic revenue in Outsourcing increased 8% compared to the prior year quarter due primarily to strong double-digit growth in health care exchanges and continued strength in HR BPO for cloud-based solutions, partially offset by an anticipated modest decline in benefits administration.

 

   

Three Months Ended

   

(millions)

 

December 31,
 2016

 

December 31,
 2015

 

%
Change

Revenue

 

$

1,281

 

$

1,290

 

(1)%

Expenses

           

Compensation and benefits

 

683

 

687

 

(1)

Other general expenses

 

317

 

316

 

Total operating expenses

 

1,000

 

1,003

 

Operating income

 

$

281

 

$

287

 

(2)%

Operating margin

 

21.9%

 

22.2%

   

Operating income - adjusted

 

$

363

 

$

338

 

7%

Operating margin - adjusted

 

28.3%

 

26.2%

   

 

Compensation and benefits for the fourth quarter decreased $4 million compared to the prior year quarter due primarily to a $34 million decrease in the core expense base related to divested businesses, net of acquisitions, and a $12 million favorable impact from currency translation, partially offset by an increase in expense associated with 5% organic revenue growth and $25 million of non-cash expenses related to certain pension settlements.

Other general expenses for the fourth quarter increased $1 million compared to the prior year quarter due primarily to an increase in expense to support 5% organic growth and $15 million of transaction costs related to the pending sale of certain assets, partially offset by a $9 million decrease in intangible asset amortization, an $8 million decrease in the core expense base related to divested businesses, net of acquisitions, a $7 million favorable impact from foreign currency translation, and expense discipline.

Fourth quarter operating income decreased 2% to $281 million compared to the prior year quarter.  Adjusting for certain items detailed on page 13 of this press release, operating income increased 7%, or $25 million, and operating margin increased 210 basis points to 28.3%, each compared to the prior year quarter.  The increase in adjusted operating margin was primarily driven by solid organic revenue growth of 5% and expense discipline, partially offset by an $8 million, or -10 basis point, unfavorable impact from foreign currency translation.

INCOME BEFORE INCOME TAXES1 

   

Three Months Ended

   

(millions)

 

December 31,
 2016

 

December 31,
 2015

 

%
Change

Risk Solutions

 

$

455

 

$

491

 

(7)%

HR Solutions

 

281

 

287

 

(2)

Unallocated expense

 

(107)

 

(61)

 

75

Operating income

 

$

629

 

$

717

 

(12)%

Interest income

 

3

 

4

 

(25)

Interest expense

 

(70)

 

(68)

 

3

Other income

 

9

 

49

 

(82)

Income before income taxes

 

$

571

 

$

702

 

(19)%

 

Unallocated expense for the fourth quarter increased $46 million to $107 million compared to the prior year quarter primarily due to $50 million of non-cash expenses related to certain pension settlements.  Interest income decreased $1 million to $3 million compared to the prior year quarter.  Interest expense increased $2 million to $70 million compared to the prior year quarter due primarily to an increase in total debt outstanding.  Other income of $9 million primarily includes net gains due to the favorable impact of exchange rates on the remeasurement of monetary assets and liabilities in non-functional currencies. The prior year quarter primarily includes net gains on the sale of a certain business, partially offset by the unfavorable impact of exchange rates on the remeasurement of monetary assets and liabilities in non-functional currencies.

2016 FULL YEAR SUMMARY

Total revenue for 2016 was $11.6 billion due to a 2% decrease in commissions and fees related to divestitures, net of acquisitions, and a 2% unfavorable impact from foreign currency translation, each compared to the prior year, partially offset by 3% organic growth in commissions and fees. Risk Solutions total revenue increased 1% to $7.5 billion and HR Solutions total revenue decreased 3% to $4.2 billion.

Net income attributable to Aon shareholders for 2016 increased 1% to $1.4 billion compared to the prior year.  Net income attributable to Aon shareholders, adjusted for certain items, increased 2% to $1.8 billion.  Certain items that impacted full year results and comparisons against the prior year are detailed in the "Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings per Share" on page 13 of this press release.

Net income per share attributable to Aon shareholders for 2016 increased 6% to $5.16 per share compared to $4.88 per share for the prior year.  Net income attributable to Aon shareholders, adjusted for certain items, increased 7% to $6.59 per share compared to $6.18 per share for the prior year. The prior year included $100 million of other income, primarily reflecting the sale of certain businesses and foreign currency gains, which was a $64 million, or $0.19 per share, net benefit when comparing to $36 million of other income in 2016. Certain items that impacted full year results and comparisons against the prior year are detailed in the "Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings per Share" on page 13 of this press release.

During 2016, the Company repurchased approximately 12.2 million Class A Ordinary Shares for $1.3 billion at an average price of $102.66 per share.

1 Refer to "Revision of Previously Issued Financial Statements" as disclosed in the schedules on pages 16 and 17.

Conference Call, Presentation Slides and Webcast Details

The Company will host a conference call on Friday, February 10, 2017 at 7:30 a.m., central time.  Interested parties can listen to the conference call via a live audio webcast and view the presentation slides at www.aon.com.

About Aon

Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 72,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative risk and people solutions. For further information on our capabilities and to learn how we empower results for clients, please visit: http://aon.mediaroom.com.

Safe Harbor Statement

This communication contain certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations or forecasts of future events. They use words such as "anticipate," "believe," "estimate," "expect," "forecast," "project," "intend," "plan," "probably," "potential," "looking forward" and other similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would." You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. For example, we may use forward-looking statements when addressing topics such as: market and industry conditions, including competitive and pricing trends; changes in our business strategies and methods of generating revenue; the development and performance of our services and products; changes in the composition or level of our revenues; our cost structure and the outcome of cost-saving or restructuring initiatives; the outcome of contingencies; dividend policy; the expected impact of acquisitions and dispositions; pension obligations; cash flow and liquidity; expected effective tax rate; future actions by regulators; and the impact of changes in accounting rules. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors.

The following factors, among others, could cause actual results to differ from those set forth in the forward looking statements:  general economic and political conditions in different countries in which Aon does business around the world; changes in the competitive environment; fluctuations in exchange and interest rates that could influence revenue and expense; changes in global equity and fixed income markets that could affect the return on invested assets; changes in the funding status of Aon's various defined benefit pension plans and the impact of any increased pension funding resulting from those changes; the level of Aon's debt limiting financial flexibility; rating agency actions that could affect Aon's ability to borrow funds; the effect of the change in global headquarters and jurisdiction of incorporation, including differences in the anticipated benefits; changes in estimates or assumptions on our financial statements; limits on Aon's subsidiaries to make dividend and other payments to Aon; the impact of lawsuits and other contingent liabilities and loss contingencies arising from errors and omissions and other claims against Aon; the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which Aon operates, particularly given the global scope of Aon's  businesses and the possibility of conflicting regulatory requirements across jurisdictions in which Aon does business; the impact of any investigations brought by regulatory authorities in the U.S., U.K. and other countries; the impact of any inquiries relating to compliance with the U.S. Foreign Corrupt Practices Act and non-U.S. anti-corruption laws and with U.S. and non-U.S. trade sanctions regimes; failure to protect intellectual property rights or allegations that we infringe on the intellectual property rights of others; the effects of English law on our operating flexibility and the enforcement of judgments against Aon; the failure to retain and attract qualified personnel; international risks associated with Aon's global operations; the effect or natural or man-made disasters; the potential of a system or network breach or disruption resulting in operational interruption or improper disclosure of personal data; Aon's ability to develop and implement new technology; the damage to our reputation among clients, markets or third parties; the actions taken by third parties that preform aspects of our business operations and client services;  the extent to which Aon manages certain risks created in connection with the various services, including fiduciary and investments and other advisory services and business process outsourcing services, among others, that Aon currently provides, or will provide in the future, to clients; Aon's ability to grow, develop and integrate companies that it acquires or new lines of business; changes in commercial property and casualty markets, commercial premium rates or methods of compensation; changes in the health care system or our relationships with insurance carriers; and Aon's ability to implement initiatives intended to yield cost savings, and the ability to achieve those cost savings.

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

Explanation of Non-GAAP Measures

This communication includes supplemental information related to organic revenue, free cash flow, adjusted operating margin, adjusted earnings per share, and adjusted effective tax rate that exclude the effects of intangible asset amortization, capital expenditures, transaction costs and certain other noteworthy items that affected results for the comparable periods.  Organic revenue excludes from reported revenues the impact of foreign exchange, acquisitions, divestitures, transfers between business units, reimbursable expenses and unusual items.  The impact of foreign exchange is determined by translating last year's revenue, expense or net income at this year's foreign exchange rates.  Reconciliations are provided in the attached schedules.  Supplemental organic revenue information and additional measures that exclude the effects of the restructuring charges and certain other items do not affect net income or any other GAAP reported amounts.  Free cash flow is cash flow from operating activity less capital expenditures. The effective tax rate, as adjusted, excludes the applicable tax impact associated with expenses for legacy litigation. Management believes that these measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors.  They should be viewed in addition to, not in lieu of, the Company's Consolidated Financial Statements.  Industry peers provide similar supplemental information regarding their performance, although they may not make identical adjustments.

 

Investor Contact:

 

Media Contact:

Scott Malchow

 

Donna Mirandola

Senior Vice President, Investor Relations

 

Senior Director, External Communications - Americas

+44 (0) 20 7086 0100

 

+1 312-381-1532

 

Aon plc

                               

Consolidated Statements of Income (Unaudited)

                       
                                 

(millions, except per share data)

 

Three Months Ended

 

Twelve Months Ended

Revenue

 

December 31,
 2016

 

December 31,
 2015

 

Percent

Change

 

December 31,
 2016

 

December 31,
 2015

 

Percent

Change

 Commissions, fees and other

 

$

3,317

 

$

3,283

 

1%

 

$

11,605

 

$

11,661

 

—%

Fiduciary investment income

 

6

 

5

 

20

 

22

 

21

 

5

Total revenue

 

3,323

 

3,288

 

1

 

11,627

 

11,682

 

Expenses

                       

Compensation and benefits

 

1,966

 

1,857

 

6

 

6,914

 

6,837

 

1

Other general expenses

 

728

 

714

 

2

 

2,807

 

2,997

 

(6)

Total operating expenses

 

2,694

 

2,571

 

5

 

9,721

 

9,834

 

(1)

Operating income

 

629

 

717

 

(12)

 

1,906

 

1,848

 

3

Interest income

 

3

 

4

 

(25)

 

9

 

14

 

(36)

Interest expense

 

(70)

 

(68)

 

3

 

(282)

 

(273)

 

3

Other income

 

9

 

49

 

(82)

 

36

 

100

 

(64)

Income before income taxes

 

571

 

702

 

(19)

 

1,669

 

1,689

 

(1)

Income taxes

 

62

 

112

 

(45)

 

239

 

267

 

(10)

Net income

 

509

 

590

 

(14)

 

1,430

 

1,422

 

1

Less: Net income attributable to noncontrolling interests

 

7

 

6

 

17

 

34

 

37

 

(8)

Net income attributable to Aon shareholders

 

$

502

 

$

584

 

(14)%

 

$

1,396

 

$

1,385

 

1%

                         

Basic net income per share attributable to Aon shareholders

 

$

1.89

 

$

2.12

 

(11)%

 

$

5.21

 

$

4.93

 

6%

Diluted net income per share attributable to Aon shareholders

 

$

1.87

 

$

2.09

 

(11)

 

$

5.16

 

$

4.88

 

6

Weighted average ordinary shares outstanding - diluted

 

268.3

 

279.3

 

(4)%

 

270.3

 

283.8

 

(5)%

   

(1)

The effective tax rate is 10.9% and 15.8% for the three months ended December 31, 2016 and 2015, respectively, and 14.3% and 15.8% for the twelve months ended December 31, 2016 and 2015, respectively.

 

 

 

Aon plc

   

Revenue (Unaudited)

   
   

Three Months Ended

 

Twelve Months Ended

(millions)

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent

Change

 

Organic

Revenue

Growth (1)

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent
Change

 

Organic
Revenue
Growth (1)

Commissions, Fees and Other

                                       

Risk Solutions

 

$

2,045

 

$

2,004

 

2%

 

3%

 

$

7,463

 

$

7,405

 

1%

 

3%

HR Solutions

 

1,281

 

1,290

 

(1)

 

5

 

4,183

 

4,303

 

(3)

 

3

Total Operating Segments

 

$

3,326

 

$

3,294

 

1%

 

3%

 

$

11,646

 

$

11,708

 

(1)%

 

3%

Fiduciary Investment Income

                               

Risk Solutions

 

$

6

 

$

5

 

20%

     

$

22

 

$

21

 

5%

   

HR Solutions

 

 

 

     

 

 

   

Total Operating Segments

 

$

6

 

$

5

 

20%

     

$

22

 

$

21

 

5%

   

Total Revenue

                               

Risk Solutions

 

$

2,051

 

$

2,009

 

2%

     

$

7,485

 

$

7,426

 

1%

   

HR Solutions

 

1,281

 

1,290

 

(1)

     

4,183

 

4,303

 

(3)

   

Intersegment

 

(9)

 

(11)

 

(18)

     

(41)

 

(47)

 

(13)

   

Total

 

$

3,323

 

$

3,288

 

1%

     

$

11,627

 

$

11,682

 

—%

   
   

(1)

Organic revenue excludes the impact of foreign exchange, acquisitions, divestitures, transfers, reimbursable expenses and unusual items. Change in organic revenue, a non-GAAP measure, is reconciled to the corresponding U.S. GAAP percent change in revenue on page 12 of this release.

 

 

Aon plc

                             

Segments (Unaudited)

                       
                                 

Risk Solutions

                               
   

Three Months Ended

 

Twelve Months Ended

(millions)

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent
Change

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent
Change

Revenue

                               

 Commissions, fees and other

 

$

2,045

 

$

2,004

 

2%

 

$

7,463

 

$

7,405

 

1%

Fiduciary investment income

 

6

 

5

 

20

 

22

 

21

 

5

Total revenue

 

2,051

 

2,009

 

2

 

7,485

 

7,426

 

1

Expenses

                       

Compensation and benefits

 

1,190

 

1,130

 

5

 

4,305

 

4,180

 

3

Other general expenses

 

406

 

388

 

5

 

1,593

 

1,740

 

(8)

Total operating expenses

 

1,596

 

1,518

 

5

 

5,898

 

5,920

 

Operating income

 

$

455

 

$

491

 

(7)%

 

$

1,587

 

$

1,506

 

5%

                         

Operating margin

 

22.2%

 

24.4%

     

21.2%

 

20.3%

   

 

 

HR Solutions

                               
   

Three Months Ended

 

Twelve Months Ended

(millions)

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent
Change

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent
Change

Revenue

                               

 Commissions, fees and other

 

$

1,281

 

$

1,290

 

(1)%

 

$

4,183

 

$

4,303

 

(3)%

Fiduciary investment income

 

 

 

N/A

 

 

 

N/A

Total revenue

 

1,281

 

1,290

 

(1)

 

4,183

 

4,303

 

(3)

Expenses

                       

Compensation and benefits

 

683

 

687

 

(1)

 

2,437

 

2,547

 

(4)

Other general expenses

 

317

 

316

 

 

1,189

 

1,220

 

(3)

Total operating expenses

 

1,000

 

1,003

 

 

3,626

 

3,767

 

(4)

Operating income

 

$

281

 

$

287

 

(2)%

 

$

557

 

$

536

 

4%

                         

Operating margin

 

21.9%

 

22.2%

     

13.3%

 

12.5%

   

 

 

Total Operating Income (Loss)

                       
                                 
   

Three Months Ended

 

Twelve Months Ended

(millions)

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent
Change

 

Dec 31,
 2016

 

Dec 31,
 2015

 

Percent
Change

Risk Solutions

 

$

455

 

$

491

 

(7)%

 

$

1,587

 

$

1,506

 

5%

HR Solutions

 

281

 

287

 

(2)

 

557

 

536

 

4

Unallocated expense

 

(107)

 

(61)

 

75

 

(238)

 

(194)

 

23

Total operating income

 

$

629

 

$

717

 

(12)%

 

$

1,906

 

$

1,848

 

3%

                         

Total operating margin

 

18.9%

 

21.8%

     

16.4%

 

15.8%

   

 

 

Aon plc

                       

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

       
                         

Organic Revenue (Unaudited)

                   
   

Three Months Ended

(millions)

 

December 31,
 2016

 

December 31,
 2015

 

Percent

Change

 

Less:

Currency

Impact (1)

 

Less: Acquisitions,

Divestitures &
Other

 

Organic

Revenue

Growth (2)

Commissions, Fees and Other

                       

Risk Solutions Segment:

                       

Retail brokerage

                       

Americas

 

$

1,005

 

$

965

 

4%

 

(1)%

 

2%

 

3%

International

 

711

 

716

 

(1)

 

(3)

 

 

2

Total Retail brokerage

 

1,716

 

1,681

 

2

 

(2)

 

1

 

3

Reinsurance brokerage

 

329

 

323

 

2

 

 

 

2

Total Risk Solutions

 

2,045

 

2,004

 

2

 

(1)

 

 

3

HR Solutions Segment:

                       

Consulting services

 

446

 

464

 

(4)

 

(4)

 

 

Outsourcing

 

854

 

839

 

2

 

(1)

 

(5)

 

8

Intrasegment

 

(19)

 

(13)

 

N/A

 

N/A

 

N/A

 

N/A

Total HR Solutions

 

1,281

 

1,290

 

(1)

 

(2)

 

(4)

 

5

Total Operating Segments

 

$

3,326

 

$

3,294

 

1%

 

(2)%

 

—%

 

3%

 

   

Twelve Months Ended

(millions)

 

December 31,
 2016

 

December 31,
 2015

 

Percent

Change

 

Less:

Currency

Impact (1)

 

Less: Acquisitions,

Divestitures &
Other

 

Organic

Revenue

Growth (2)

Commissions, Fees and Other

                       

Risk Solutions Segment:

                       

Retail brokerage

                       

Americas

 

$

3,357

 

$

3,294

 

2%

 

(2)%

 

—%

 

4%

International

 

2,739

 

2,750

 

 

(3)

 

 

3

Total Retail brokerage

 

6,096

 

6,044

 

1

 

(3)

 

 

4

Reinsurance brokerage

 

1,367

 

1,361

 

 

(1)

 

 

1

Total Risk Solutions

 

7,463

 

7,405

 

1

 

(2)

 

 

3

HR Solutions Segment:

                       

Consulting services

 

1,662

 

1,686

 

(1)

 

(3)

 

 

2

Outsourcing

 

2,557

 

2,658

 

(4)

 

(1)

 

(7)

 

4

Intrasegment

 

(36)

 

(41)

 

N/A

 

N/A

 

N/A

 

N/A

Total HR Solutions

 

4,183

 

4,303

 

(3)

 

(2)

 

(4)

 

3

Total Operating Segments

 

$

11,646

 

$

11,708

 

(1)%

 

(2)%

 

(2)%

 

3%

 

 

Free Cash Flow (Unaudited)

   

Twelve Months Ended

(millions)

 

December 31,
 2016

 

December 31,
 2015

 

Percent
Change

Cash Provided By Operating Activities

 

$

2,326

 

$

2,009

 

16%

Less: Capital Expenditures

 

(222)

 

(290)

 

(23)

Free Cash Flow (3)

 

$

2,104

 

$

1,719

 

22%

   

(1)

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

(2)

Organic revenue excludes the impact of foreign exchange, acquisitions, divestitures, transfers, reimbursable expenses and unusual items.

(3)

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

 

 

Aon plc

                                               

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

           
                                                 
   

Three Months Ended December 31, 2016

 

Twelve Months Ended December 31, 2016

(millions)

 

Risk
Solutions

 

HR
Solutions

 

Unallocated
Income &
Expense

 

Total

 

Risk
Solutions

 

HR
Solutions

 

Unallocated
Income &
Expense

 

Total

Revenue

 

$

2,051

 

$

1,281

 

$

(9)

 

$

3,323

 

$

7,485

 

$

4,183

 

$

(41)

 

$

11,627

                                 

Operating income (loss) - as reported

 

$

455

 

$

281

 

$

(107)

 

$

629

 

$

1,587

 

$

557

 

$

(238)

 

$

1,906

Intangible asset amortization

 

28

 

42

 

 

70

 

105

 

172

 

 

277

Pension Settlements

 

83

 

25

 

50

 

158

 

144

 

26

 

50

 

220

Transaction Costs

 

$

 

$

15

 

$

 

$

15

 

$

 

$

15

 

$

 

$

15

Operating income (loss) - as adjusted

 

$

566

 

$

363

 

$

(57)

 

$

872

 

$

1,836

 

$

770

 

$

(188)

 

$

2,418

                                 

Operating margins - as adjusted

 

27.6%

 

28.3%

 

N/A

 

26.2%

 

24.5%

 

18.4%

 

N/A

 

20.8%

 

   

Three Months Ended December 31, 2015

 

Twelve Months Ended December 31, 2015

(millions)

 

Risk

Solutions

 

HR

Solutions

 

Unallocated

Income &

Expense

 

Total

 

Risk

Solutions

 

HR

Solutions

 

Unallocated

Income &

Expense

 

Total

Revenue

 

$

2,009

 

$

1,290

 

$

(11)

 

$

3,288

 

$

7,426

 

$

4,303

 

$

(47)

 

$

11,682

                                 

Operating income (loss) - as reported

 

$

491

 

$

287

 

$

(61)

 

$

717

 

$

1,506

 

$

536

 

$

(194)

 

$

1,848

Intangible asset amortization

 

26

 

51

 

 

77

 

109

 

205

 

 

314

Legacy litigation

 

 

 

 

 

137

 

39

 

 

176

Operating income (loss) - as adjusted

 

$

517

 

$

338

 

$

(61)

 

$

794

 

$

1,752

 

$

780

 

$

(194)

 

$

2,338

                                 

Operating margins - as adjusted

 

25.7%

 

26.2%

 

N/A

 

24.1%

 

23.6%

 

18.1%

 

N/A

 

20.0%

 

 

   

Three Months Ended December 31,

 

Twelve Months Ended December 31,

(millions except per share data)

 

2016

 

2015

 

2016

 

2015

Operating income - as adjusted

 

$

872

 

$

794

 

$

2,418

 

$

2,338

Interest income

 

3

 

4

 

9

 

14

Interest expense

 

(70)

 

(68)

 

(282)

 

(273)

Other income

 

9

 

49

 

36

 

100

                 

Income before income taxes - as adjusted

 

814

 

779

 

2,181

 

2,179

Income taxes (2)

 

121

 

140

 

367

 

389

Net income - as adjusted

 

693

 

639

 

1,814

 

1,790

Less: Net income attributable to noncontrolling interests

 

7

 

6

 

34

 

37

Net income attributable to Aon shareholders - as adjusted

 

$

686

 

$

633

 

$

1,780

 

$

1,753

                 

Diluted earnings per share - as adjusted

 

$

2.56

 

$

2.27

 

$

6.59

 

$

6.18

                 

Weighted average ordinary shares outstanding - diluted

 

268.3

 

279.3

 

270.3

 

283.8

   

(1)

Certain noteworthy items impacting operating income in 2016 and 2015 are described in this schedule. The items shown with the caption "as adjusted" are non-GAAP measures.

(2)

The effective tax rate used in the U.S. GAAP financial statements were 10.9% and 15.8% for the three months ended December 31, 2016 and 2015, respectively, and 14.3% and 15.8% for the twelve months ended December 31, 2016 and 2015, respectively.  Reconciling items are generally taxed at the effective tax rate.  However, after adjusting to exclude the applicable tax impact associated with non-cash pension expenses, the adjusted effective tax rates for the fourth quarter and twelve months ended December 31, 2016 were 14.9% and 16.8%, respectively. After adjusting the underlying annual tax rate to exclude the impact associated with expenses for legacy litigation in the second quarter, the adjusted effective tax rates for both the fourth quarter and twelve months of 2015 was 17.9%.

 

 

 

Aon plc

   

Condensed Consolidated Statements of Financial Position (Unaudited)

   
         
   

As of

(millions)

 

December 31,
 2016

 

December 31,
2015 (1)

       

(As revised)

ASSETS

       

Current Assets

       

Cash and cash equivalents

 

$

431

 

$

384

Short-term investments

 

290

 

356

Receivables, net

 

2,589

 

2,564

Fiduciary assets

 

9,485

 

9,932

Other current assets

 

351

 

329

Total Current Assets

 

13,146

 

13,565

Goodwill

 

8,747

 

8,448

Intangible assets, net

 

2,223

 

2,180

Fixed assets, net

 

765

 

765

Non-current deferred tax assets

 

322

 

300

Prepaid pension

 

858

 

1,033

Other non-current assets

 

554

 

592

Total Assets

 

$

26,615

 

$

26,883

         

LIABILITIES AND EQUITY

       

Current Liabilities

       

Accounts payable and accrued liabilities

 

$

1,801

 

$

1,772

Short-term debt and current portion of long-term debt

 

336

 

562

Fiduciary liabilities

 

9,485

 

9,932

Other current liabilities

 

873

 

819

Total Current Liabilities

 

12,495

 

13,085

Long-term debt

 

5,869

 

5,138

Non-current deferred tax liabilities

 

101

 

37

Pension, other post-retirement and other post-employment liabilities

 

1,774

 

1,795

Other non-current liabilities

 

844

 

769

Total Liabilities

 

21,083

 

20,824

         

EQUITY

       

Shareholders' Equity

       

Ordinary shares ($0.01 nominal value)

 

3

 

3

Additional paid-in capital

 

5,577

 

5,409

Retained earnings

 

3,807

 

4,013

Accumulated other comprehensive loss

 

(3,912)

 

(3,423)

Total Aon Shareholders' Equity

 

5,475

 

6,002

Noncontrolling interests

 

57

 

57

Total Equity

 

5,532

 

6,059

Total Liabilities and Equity

 

$

26,615

 

$

26,883

(1)

Refer to "Revision of Previously Issued Financial Statements" as disclosed in the schedules on pages 16 and 17.

(2)

Includes short-term investments:  2016 - $3,816 million, 2015 - $3,394 million

 

 

Aon plc

         

Consolidated Statements of Cash Flows (Unaudited)

       
           
           

(millions)

Years ended December 31

 

2016

 

2015

     

(Unaudited)

   

CASH FLOWS FROM OPERATING ACTIVITIES

         

Net income

 

$

1,430

 

$

1,422

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

       

Gain from sales of businesses and investments, net

 

(39)

 

(81)

Depreciation of fixed assets

 

232

 

229

Amortization of intangible assets

 

277

 

314

Share-based compensation expense

 

331

 

340

Deferred income taxes

 

(24)

 

(223)

Change in assets and liabilities:

       

Fiduciary receivables

 

594

 

599

Short-term investments — funds held on behalf of clients

 

(598)

 

350

Fiduciary liabilities

 

4

 

(949)

Receivables, net

 

(86)

 

(83)

Accounts payable and accrued liabilities

 

64

 

87

Current income taxes

 

49

 

116

Pension, other post-retirement and other post-employment liabilities

 

42

 

(230)

Other assets and liabilities

 

50

 

118

CASH PROVIDED BY OPERATING ACTIVITIES

   

2,326

 

2,009

           

CASH FLOWS FROM INVESTING ACTIVITIES

         

Proceeds from investments

   

43

 

220

Payments for investments

   

(64)

 

(266)

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

   

61

 

9

Acquisition of businesses, net of cash acquired

   

(879)

 

(16)

Proceeds from sale of businesses

   

107

 

205

Capital expenditures

   

(222)

 

(290)

CASH USED FOR INVESTING ACTIVITIES

   

(954)

 

(138)

           

CASH FLOWS FROM FINANCING ACTIVITIES

         

Share repurchase

   

(1,257)

 

(1,550)

Issuance of shares for employee benefit plans

   

(129)

 

(30)

Issuance of debt

   

3,467

 

5,351

Repayment of debt

   

(2,945)

 

(5,098)

Cash dividends to shareholders

   

(345)

 

(323)

Noncontrolling interests and other financing activities

   

(77)

 

(39)

CASH USED FOR FINANCING ACTIVITIES

   

(1,286)

 

(1,689)

           

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

(39)

 

(172)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

   

47

 

10

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

   

384

 

374

CASH AND CASH EQUIVALENTS AT END OF YEAR

   

$

431

 

$

384

 

Aon plc

Revision of Previously Issued Financial Statements (in millions, except per share data)

During the fourth quarter of 2016, the Company identified legacy immaterial errors related to the quarterly timing of revenue recognition for certain brokerage fee agreements in our Americas Retail Brokerage business in Risk Solutions, primarily impacting US Retail. Historically, revenue for these arrangements was typically recognized upon signing an agreement with a customer; however, in some cases, a portion of the arrangement's revenue should have been recognized in subsequent quarters upon the placement of effective policies.  This historical practice resulted in over-recognizing revenue in the fourth quarter and under-recognizing revenue in the first, second, and third quarters of each year. The revised quarterly revenue disclosures included in the schedules of this press release align with the appropriate practice and will be used going forward as reported amounts for the corresponding period.

The impact to the Consolidated Statements of Financial Position was a decrease of $170 million to Net receivables, an increase of $66 million to Non-current deferred tax assets, and a decrease of $104 million to Retained earnings in all periods presented.  The impact to full year Organic Revenue, Consolidated Statements of Income and Cash Flows was immaterial and therefore remain unchanged.

       
 

US GAAP

 

Non GAAP - as adjusted (1)

(As reported)

1Q

 

2Q

 

3Q

 

4Q

 

2016

 

1Q

 

2Q

 

3Q

 

4Q

 

2016

INCOME STATEMENT DATA

                                                         

Commissions, fees and other revenue

$

2,787

 

$

2,761

 

$

2,740

 

$

3,317

 

$

11,605

 

$

2,787

 

$

2,761

 

$

2,740

 

$

3,317

 

$

11,605

Fiduciary investment income

5

 

5

 

6

 

6

 

22

 

5

 

5

 

6

 

6

 

22

Total revenue

2,792

 

2,766

 

2,746

 

3,323

 

11,627

 

2,792

 

2,766

 

2,746

 

3,323

 

11,627

Operating income

450

 

405

 

422

 

629

 

1,906

 

517

 

535

 

494

 

872

 

2,418

Net income

327

 

280

 

314

 

509

 

1,430

 

382

 

384

 

355

 

693

 

1,814

Less: Net income attributable to noncontrolling interests

12

 

8

 

7

 

7

 

34

 

12

 

8

 

7

 

7

 

34

Net income attributable to Aon shareholders

$

315

 

$

272

 

$

307

 

$

502

 

$

1,396

 

$

370

 

$

376

 

$

348

 

$

686

 

$

1,780

PER SHARE DATA

                                     

Basic net income per share attributable to Aon shareholders

$

1.16

 

$

1.01

 

$

1.15

 

$

1.89

 

$

5.21

                   

Diluted net income per share attributable to Aon shareholders

$

1.15

 

$

1.01

 

$

1.14

 

$

1.87

 

$

5.16

 

$

1.35

 

$

1.39

 

$

1.29

 

$

2.56

 

$

6.59

(Effect of revision)

                                                         

INCOME STATEMENT DATA

                                                         

Commissions, fees and other revenue

$

13

 

$

34

 

$

14

 

$

(61)

 

$

 

$

13

 

$

34

 

$

14

 

$

(61)

 

$

Fiduciary investment income

 

 

 

 

 

 

 

 

 

Total revenue

13

 

34

 

14

 

(61)

 

 

13

 

34

 

14

 

(61)

 

Operating income

13

 

34

 

14

 

(61)

 

 

13

 

34

 

14

 

(61)

 

Net income

10

 

28

 

12

 

(50)

 

 

10

 

28

 

12

 

(50)

 

Less: Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

 

Net income attributable to Aon shareholders

$

10

 

$

28

 

$

12

 

$

(50)

 

$

 

$

10

 

$

28

 

$

12

 

$

(50)

 

$

PER SHARE DATA

                                     

Basic net income per share attributable to Aon shareholders

$

0.04

 

$

0.11

 

$

0.04

 

$

(0.19)

 

$

                   

Diluted net income per share attributable to Aon shareholders

$

0.04

 

$

0.10

 

$

0.04

 

$

(0.19)

 

$

 

$

0.04

 

$

0.10

 

$

0.04

 

$

(0.19)

 

$

(As revised)

                                     

INCOME STATEMENT DATA

                                     

Commissions, fees and other revenue

$

2,800

 

$

2,795

 

$

2,754

 

$

3,256

 

$

11,605

 

$

2,800

 

$

2,795

 

$

2,754

 

$

3,256

 

$

11,605

Fiduciary investment income

5

 

5

 

6

 

6

 

22

 

5

 

5

 

6

 

6

 

22

Total revenue

2,805

 

2,800

 

2,760

 

3,262

 

11,627

 

2,805

 

2,800

 

2,760

 

3,262

 

11,627

Operating income

463

 

439

 

436

 

568

 

1,906

 

530

 

569

 

508

 

811

 

2,418

Net income

337

 

308

 

326

 

459

 

1,430

 

392

 

412

 

367

 

643

 

1,814

Less: Net income attributable to noncontrolling interests

12

 

8

 

7

 

7

 

34

 

12

 

8

 

7

 

7

 

34

Net income attributable to Aon shareholders

$

325

 

$

300

 

$

319

 

$

452

 

$

1,396

 

$

380

 

$

404

 

$

360

 

$

636

 

$

1,780

PER SHARE DATA

                                     

Basic net income per share attributable to Aon shareholders

$

1.20

 

$

1.12

 

$

1.19

 

$

1.70

 

$

5.21

                   

Diluted net income per share attributable to Aon shareholders

$

1.19

 

$

1.11

 

$

1.18

 

$

1.68

 

$

5.16

 

$

1.39

 

$

1.49

 

$

1.33

 

$

2.37

 

$

6.59

(1)

Refer to Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings Per Share for adjustments to operating income, net income, and diluted earnings per share on page 13.

 

       
 

US GAAP

 

Non GAAP - as adjusted (1)

(As reported)

1Q

 

2Q

 

3Q

 

4Q

 

2015

 

1Q

 

2Q

 

3Q

 

4Q

 

2015

INCOME STATEMENT DATA

                                                         

 Commissions, fees and other revenue

$

2,842

 

$

2,800

 

$

2,736

 

$

3,283

 

$

11,661

 

$

2,842

 

$

2,800

 

$

2,736

 

$

3,283

 

$

11,661

Fiduciary investment income

5

 

5

 

6

 

5

 

21

 

5

 

5

 

6

 

5

 

21

Total revenue

2,847

 

2,805

 

2,742

 

3,288

 

11,682

 

2,847

 

2,805

 

2,742

 

3,288

 

11,682

Operating income

441

 

277

 

413

 

717

 

1,848

 

521

 

532

 

491

 

794

 

2,338

Net income

341

 

188

 

303

 

590

 

1,422

 

405

 

385

 

361

 

639

 

1,790

Less: Net income attributable to noncontrolling interests

13

 

10

 

8

 

6

 

37

 

13

 

10

 

8

 

6

 

37

Net income attributable to Aon shareholders

$

328

 

$

178

 

$

295

 

$

584

 

$

1,385

 

$

392

 

$

375

 

$

353

 

$

633

 

$

1,753

PER SHARE DATA

                                     

Basic net income per share attributable to Aon shareholders

$

1.15

 

$

0.63

 

$

1.05

 

$

2.12

 

$

4.93

                   

Diluted net income per share attributable to Aon shareholders

$

1.14

 

$

0.62

 

$

1.04

 

$

2.09

 

$

4.88

 

$

1.37

 

$

1.31

 

$

1.24

 

$

2.27

 

$

6.18

(Effect of revision)

                                     

INCOME STATEMENT DATA

                                     

Commissions, fees and other revenue

$

20

 

$

31

 

$

10

 

$

(61)

 

$

 

$

20

 

$

31

 

$

10

 

$

(61)

 

$

Fiduciary investment income

 

 

 

 

 

 

 

 

 

Total revenue

20

 

31

 

10

 

(61)

 

 

20

 

31

 

10

 

(61)

 

Operating income

20

 

31

 

10

 

(61)

 

 

20

 

31

 

10

 

(61)

 

Net income

16

 

26

 

8

 

(50)

 

 

16

 

26

 

8

 

(50)

 

Less: Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

 

Net income attributable to Aon shareholders

$

16

 

$

26

 

$

8

 

$

(50)

 

$

 

$

16

 

$

26

 

$

8

 

$

(50)

 

$

PER SHARE DATA

                                     

Basic net income per share attributable to Aon shareholders

$

0.06

 

$

0.09

 

$

0.03

 

$

(0.18)

 

$

                   

Diluted net income per share attributable to Aon shareholders

$

0.06

 

$

0.09

 

$

0.03

 

$

(0.18)

 

$

 

$

0.05

 

$

0.09

 

$

0.03

 

$

(0.18)

 

$

(As revised)

                                     

INCOME STATEMENT DATA

                                     

Commissions, fees and other revenue

$

2,862

 

$

2,831

 

$

2,746

 

$

3,222

 

$

11,661

 

$

2,862

 

$

2,831

 

$

2,746

 

$

3,222

 

$

11,661

Fiduciary investment income

5

 

5

 

6

 

5

 

21

 

5

 

5

 

6

 

5

 

21

Total revenue

2,867

 

2,836

 

2,752

 

3,227

 

11,682

 

2,867

 

2,836

 

2,752

 

3,227

 

11,682

Operating income

461

 

308

 

423

 

656

 

1,848

 

541

 

563

 

501

 

733

 

2,338

Net income

357

 

214

 

311

 

540

 

1,422

 

421

 

411

 

369

 

589

 

1,790

Less: Net income attributable to noncontrolling interests

13

 

10

 

8

 

6

 

37

 

13

 

10

 

8

 

6

 

37

Net income attributable to Aon shareholders

$

344

 

$

204

 

$

303

 

$

534

 

$

1,385

 

$

408

 

$

401

 

$

361

 

$

583

 

$

1,753

PER SHARE DATA

                                     

Basic net income per share attributable to Aon shareholders

$

1.21

 

$

0.72

 

$

1.08

 

$

1.94

 

$

4.93

                   

Diluted net income per share attributable to Aon shareholders

$

1.20

 

$

0.71

 

$

1.07

 

$

1.91

 

$

4.88

 

$

1.42

 

$

1.40

 

$

1.27

 

$

2.09

 

$

6.18

   

(1)

Refer to Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings Per Share for adjustments to operating income, net income, and diluted earnings per share on page 13.

 

 

SOURCE Aon plc



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