AON PLC, 10-Q filed on 10/27/2017
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2017
Oct. 26, 2017
Document and Entity Information
 
 
Entity Registrant Name
Aon plc 
 
Entity Central Index Key
0000315293 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2017 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
249,897,712 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Revenue
 
 
 
 
Total revenue
$ 2,340 
$ 2,201 
$ 7,089 
$ 6,759 
Expenses
 
 
 
 
Compensation and benefits
1,419 
1,300 
4,337 
4,041 
Information technology
109 
99 
295 
281 
Premises
89 
86 
259 
257 
Depreciation of fixed assets
40 
39 
148 
118 
Amortization and impairment of intangible assets
101 
42 
604 
117 
Other general expenses
317 
267 
956 
770 
Total operating expenses
2,075 
1,833 
6,599 
5,584 
Operating income
265 
368 
490 
1,175 
Interest income
10 
20 
Interest expense
(70)
(70)
(211)
(212)
Other income (expense)
(5)
10 
(20)
27 
Income from continuing operations before income taxes
200 
309 
279 
996 
Income tax expense (benefit)
25 
(139)
127 
Net income from continuing operations
196 
284 
418 
869 
Income (loss) from discontinued operations, net of tax
(4)
42 
857 
102 
Net income
192 
326 
1,275 
971 
Less: Net income attributable to noncontrolling interests
30 
27 
Net income attributable to Aon shareholders
$ 185 
$ 319 
$ 1,245 
$ 944 
Basic net income (loss) per share attributable to Aon shareholders
 
 
 
 
Basic net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share)
$ 0.74 
$ 1.03 
$ 1.49 
$ 3.13 
Basic net income (loss) per share attributable to Aon shareholders, discontinued operations (in dollars per share)
$ (0.02)
$ 0.16 
$ 3.28 
$ 0.38 
Basic net income (loss) per share attributable to Aon shareholders (in dollars per share)
$ 0.72 
$ 1.19 
$ 4.77 
$ 3.51 
Diluted net income (loss) per share attributable to Aon shareholders
 
 
 
 
Diluted net income (loss) per share attributable to Aon shareholders, continuing operations (in dollars per share)
$ 0.73 
$ 1.03 
$ 1.48 
$ 3.11 
Diluted net income (loss) per share attributable to Aon shareholders, discontinued operations (in dollars per share)
$ (0.01)
$ 0.15 
$ 3.26 
$ 0.37 
Diluted net income (loss) per share attributable to Aon shareholders (in dollars per share)
$ 0.72 
$ 1.18 
$ 4.74 
$ 3.48 
Cash dividends per share paid on ordinary shares (in dollars per share)
$ 0.36 
$ 0.33 
$ 1.05 
$ 0.96 
Weighted average ordinary shares outstanding - basic (in shares)
255.6 
267.5 
260.9 
269.1 
Weighted average ordinary shares outstanding - diluted (in shares)
257.3 
269.6 
262.9 
271.0 
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 192 
$ 326 
$ 1,275 
$ 971 
Less: Net income attributable to noncontrolling interests
30 
27 
Net income attributable to Aon shareholders
185 
319 
1,245 
944 
Other comprehensive income (loss), net of tax:
 
 
 
 
Change in fair value of financial instruments
11 
13 
(11)
Foreign currency translation adjustments
243 
(89)
434 
(227)
Postretirement benefit obligation
18 
18 
56 
(132)
Total other comprehensive income (loss)
272 
(71)
503 
(370)
Less: Other comprehensive income attributable to noncontrolling interests
Total other comprehensive income (loss) attributable to Aon shareholders
265 
(71)
500 
(370)
Comprehensive income (loss) attributable to Aon shareholders
$ 450 
$ 248 
$ 1,745 
$ 574 
Condensed Consolidated Statements of Financial Position (Unaudited) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
CURRENT ASSETS
 
 
Cash and cash equivalents
$ 749 
$ 426 
Short-term investments
1,640 
290 
Receivables, net
2,068 
2,106 
Fiduciary assets
9,292 
8,959 
Other current assets
518 
247 
Current assets of discontinued operations
1,118 
Total Current Assets
14,267 
13,146 
Goodwill
7,888 
7,410 
Intangible assets, net
1,341 
1,890 
Fixed assets, net
545 
550 
Deferred tax assets
565 
325 
Prepaid pension
1,020 
858 
Other non-current assets
298 
360 
Non-current assets of discontinued operations
2,076 
TOTAL ASSETS
25,924 
26,615 
CURRENT LIABILITIES
 
 
Accounts payable and accrued liabilities
1,588 
1,604 
Short-term debt and current portion of long-term debt
305 
336 
Fiduciary liabilities
9,292 
8,959 
Other current liabilities
1,289 
656 
Current liabilities of discontinued operations
940 
Total Current Liabilities
12,474 
12,495 
Long-term debt
5,662 
5,869 
Deferred tax liabilities
83 
101 
Pension, other postretirement and postemployment liabilities
1,612 
1,760 
Other non-current liabilities
846 
719 
Non-current liabilities of discontinued operations
139 
TOTAL LIABILITIES
20,677 
21,083 
EQUITY
 
 
Ordinary shares - $0.01 nominal value Authorized: 750 shares (issued: 2017 - 250.8; 2016 - 262.0)
Additional paid-in capital
5,670 
5,577 
Retained earnings
2,914 
3,807 
Accumulated other comprehensive loss
(3,412)
(3,912)
TOTAL AON SHAREHOLDERS' EQUITY
5,175 
5,475 
Noncontrolling interests
72 
57 
TOTAL EQUITY
5,247 
5,532 
TOTAL LIABILITIES AND EQUITY
$ 25,924 
$ 26,615 
Condensed Consolidated Statements of Financial Position (Unaudited) (Parenthetical) (USD $)
Sep. 30, 2017
Dec. 31, 2016
Statement of Financial Position [Abstract]
 
 
Common stock, nominal or par value (in dollars per share)
$ 0.01 
$ 0.01 
Common stock, Authorized shares (in shares)
750,000,000 
750,000,000 
Common stock, issued shares (in shares)
250,800,000 
262,000,000 
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (USD $)
In Millions, except Share data, unless otherwise specified
Total
Ordinary Shares and Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss, Net of Tax
Non- controlling Interests
Beginning Balance at Dec. 31, 2016
$ 5,532 
$ 5,580 
$ 3,807 
$ (3,912)
$ 57 
Beginning Balance (in shares) at Dec. 31, 2016
262,000,000 
262,000,000 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Net income
1,275 
 
1,245 
 
30 
Shares issued - employee stock compensation plans (in shares)
 
3,300,000 
 
 
 
Shares issued - employee stock compensation plans
(117)
(117)
 
 
 
Shares purchased (in shares)
 
(14,500,000)
 
 
 
Shares purchased
(1,913.0)
 
(1,913.0)
 
 
Share-based compensation expense
214 
214 
 
 
 
Dividends to shareholders
(274)
 
(274)
 
 
Net change in fair value of financial instruments
13 
 
 
13 
 
Net foreign currency translation adjustments
434 
 
 
431 
Net postretirement benefit obligation
56 
 
 
56 
 
Purchases of shares from noncontrolling interests
(5)
(4)
 
 
(1)
Dividends paid to noncontrolling interests on subsidiary common stock
(17)
 
 
 
(17)
Ending Balance at Sep. 30, 2017
$ 5,247 
$ 5,673 
$ 2,914 
$ (3,412)
$ 72 
Ending Balance (in shares) at Sep. 30, 2017
250,800,000 
250,800,000 
 
 
 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Net income
$ 1,275 
$ 971 
Income from discontinued operations, net of income taxes
857 
102 
Adjustments to reconcile net income to cash provided by operating activities:
 
 
Loss (gain) from sales of businesses and investments, net
(41)
Depreciation of fixed assets
148 
118 
Amortization and impairment of intangible assets
604 
117 
Share-based compensation expense
214 
210 
Deferred income taxes
(208)
(7)
Change in assets and liabilities:
 
 
Fiduciary receivables
986 
1,538 
Short-term investments — funds held on behalf of clients
(701)
(419)
Fiduciary liabilities
(285)
(1,119)
Receivables, net
144 
175 
Accounts payable and accrued liabilities
(237)
(246)
Restructuring reserves
170 
Current income taxes
(785)
(80)
Pension, other postretirement and other postemployment liabilities
(142)
(70)
Other assets and liabilities
(39)
107 
Cash provided by operating activities - continuing operations
289 
1,152 
Cash provided by operating activities - discontinued operations
64 
323 
CASH PROVIDED BY OPERATING ACTIVITIES
353 
1,475 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Proceeds from investments
43 
31 
Payments for investments
(55)
(47)
Net sale (purchases) of short-term investments — non-fiduciary
(1,344)
(108)
Acquisition of businesses, net of cash acquired
(172)
(198)
Sale of businesses, net of cash sold
4,194 
104 
Capital expenditures
(125)
(107)
Cash provided by (used for) investing activities - continuing operations
2,541 
(325)
Cash used for investing activities - discontinued operations
(19)
(46)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
2,522 
(371)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Share repurchase
(1,888)
(1,037)
Issuance of shares for employee benefit plans
(118)
(70)
Issuance of debt
1,651 
2,729 
Repayment of debt
(1,998)
(2,308)
Cash dividends to shareholders
(274)
(258)
Noncontrolling interests and other financing activities
(21)
(71)
Cash used for financing activities - continuing operations
(2,648)
(1,015)
Cash used for financing activities - discontinued operations
CASH USED FOR FINANCING ACTIVITIES
(2,648)
(1,015)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
91 
10 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
318 
99 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
431 
384 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
749 
483 
Supplemental disclosures:
 
 
Interest paid
195 
196 
Income taxes paid, net of refunds
$ 854 
$ 153 
Basis of Presentation
Basis of Presentation
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements and Notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).  The Condensed Consolidated Financial Statements include the accounts of Aon plc and all of its controlled subsidiaries (“Aon” or the “Company”).  All intercompany accounts and transactions have been eliminated.  The Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for all periods presented.
Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.  These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.  The results for the three and nine months ended September 30, 2017 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2017.
Discontinued Operations
On February 9, 2017, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Tempo Acquisition, LLC (the “Buyer”), an entity formed and controlled by affiliates of The Blackstone Group L.P. Pursuant to the Purchase Agreement, the Company sold its benefits administration and business process outsourcing business (the “Divested Business”) to the Buyer and certain designated purchasers that are direct or indirect subsidiaries of the Buyer (the “Transaction”). As a result, the Divested Business’s financial results are reflected in the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Financial Position, and Condensed Consolidated Statements of Cash Flows, retrospectively, as discontinued operations beginning in the first quarter of 2017. Additionally, all of the Notes to Condensed Consolidated Financial Statements have been retrospectively restated to only include the impacts of continuing operations, unless noted otherwise. The Transaction closed on May 1, 2017. Refer to Note 3 “Discontinued Operations” for additional information.
Reportable Segments
Beginning in the first quarter of 2017, the Company began operating as one segment that includes all of Aon’s continuing operations, which provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines that make up our principal products and services. Refer to Note 17 “Segment Information” for additional information.
As a result of these initiatives, Aon made the following changes to its presentation of the Condensed Consolidated Statement of Income beginning in the first quarter of 2017:
Commissions, fees and other and Fiduciary investment income are now reported as one Total revenue line item; and
Other general expenses has been further broken out to provide greater clarity into charges related to Information technology, Premises, Depreciation of fixed assets, and Amortization and impairment of intangible assets.
Prior period comparable financial information has been reclassified to conform to this presentation.
The Company believes this presentation provides greater clarity into the risks and opportunities that management believes are important and allows users of the financial statements to assess the performance in the same way as the Chief Operating Decision Maker (the “CODM”).
Use of Estimates
The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments.  Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available.  Aon adjusts such estimates and assumptions when facts and circumstances dictate.  Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions.  As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.  Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the financial statements in future periods.
Accounting Principles and Practices
Accounting Principles and Practices
Accounting Principles and Practices
Adoption of New Accounting Standards
Share-based Compensation
In March 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  The new guidance requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period.  Further, excess tax benefits are required to be classified along with other income tax cash flows as an operating activity.  Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method.
The Company adopted this guidance on January 1, 2017, with the following impacts:
An increase to Deferred tax assets on the Condensed Consolidated Statement of Financial Position of approximately $49 million through a cumulative-effect adjustment to Retained earnings for excess tax benefits not previously recognized, and
The recognition of $5 million, or $0.02 per share, income tax benefit from continuing operations related to excess tax benefits in the Condensed Consolidated Statement of Income for the three months ended September 30, 2017, and $53 million, or $0.20 per share, for the nine months ended September 30, 2017.
Adoption of the guidance was applied prospectively on the Condensed Consolidated Statement of Cash Flows and prior period comparable information was not restated. Other elements of the guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
Accounting Standards Issued But Not Yet Adopted
Targeted Improvements to Accounting for Hedging Activities
In August 2017, the FASB issued new accounting guidance on targeted improvements to accounting for hedging activities. The new guidance amends its hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the effect of a hedging instrument to be presented in the same income statement line as the hedged item. An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the period of adoption. Changes to income statement presentation and financial statement disclosures will be applied prospectively. The new guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted. The Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and the period in which it plans to adopt.  
Presentation of Net Periodic Pension and Postretirement Benefit Costs
In March 2017, the FASB issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. An entity will apply the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Condensed Consolidated Statement of Income and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension costs and net periodic postretirement benefit cost in assets. The new guidance allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The new guidance is effective for Aon in the first quarter of 2018. The adoption of this guidance will have no impact on the total results of the Company.  The presentation of results will reflect a change in Operating income offset by an equal change in Other income (expense) for the period.
Simplifying the Test for Goodwill Impairment
In January 2017, the FASB issued new accounting guidance on simplifying the test for goodwill impairment. Currently the standard requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. The new guidance removes Step 2. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. An entity will apply the new guidance on a prospective basis. The new guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted for annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the period of adoption and the impact that the standard will have on the Condensed Consolidated Financial Statements.
Income Tax Consequences of Intercompany Transactions
In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory.  The guidance will require that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e., depreciated, amortized, or impaired).  An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption.  The new guidance is effective for Aon in the first quarter of 2018, and the Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements. 
Statement of Cash Flows
In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity will no longer have discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard will be effective for the Company in the first quarter of 2018, with early adoption permitted. An entity will apply the new guidance through retrospective adjustment to all periods presented. The retrospective approach includes a practical expedient that entities may apply should retrospective adoption be impracticable; in this case, the amendments for these issues may be applied prospectively as of the earliest date practicable. The guidance will not have a material impact on the Company’s Condensed Consolidated Statements of Cash Flows.
Credit Losses
In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments. The new guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements, as well as the method of transition and period of adoption.
Leases
In February 2016, the FASB issued new accounting guidance on leases, which requires lessees to recognize assets and liabilities for most leases. Under the new guidance, a lessee should recognize in the Condensed Consolidated Statement of Financial Position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from currently effective U.S. GAAP. The new standard will be effective for the Company in the first quarter of 2019, with early adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Aon is currently evaluating the impact the standard will have on the Condensed Consolidated Financial Statements and period of adoption.
Financial Assets and Liabilities
In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. An entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values, including disclosure requirements, should be applied prospectively to equity investments that exist as of the date of adoption of the guidance. The guidance is effective for the Company in the first quarter of 2018 and early adoption is permitted. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and period of adoption.
Revenue Recognition
In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers, which, when effective, will supersede nearly all existing revenue recognition guidance under U.S. GAAP.  The core principal of the standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The standard is effective for Aon in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. Two methods of transition are permitted upon adoption: full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing a comparable view across all periods presented. Under the modified retrospective method, prior periods would not be restated. Rather, revenue and other disclosures for pre-2018 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. The Company will adopt this standard in the first quarter of 2018 using a modified retrospective adoption approach.
A preliminary assessment to determine the impacts of the new accounting standard has been performed. The Company is currently implementing accounting and operational processes and controls to ensure compliance with the new standard, but is still evaluating the quantitative impacts the standard will have on its financial statements.
However, the more significant impacts of the new standard to the Company are anticipated to be as follows:
The Company currently recognizes revenue either at a point in time or over a period of time based on the transfer of value to customers or as the remuneration becomes determinable. Under the new standard, the revenue related to certain brokerage activities recognized over a period of time will be recognized on the effective date of the associated policies when control of the policy transfers to the customer. As a result, revenue from these arrangements will be recognized in earlier periods under the new standard in comparison to the current guidance and will change the timing and amount of revenue recognized for annual and interim periods. This change is anticipated to result in a significant shift in interim revenue for Reinsurance Solutions and certain other brokerage services. The Company is currently assessing the timing and measurement of revenue recognition under the new standard for certain other services, including advisory, where limited impacts are anticipated.
Additionally, the new standard provides guidance on accounting for certain revenue-related costs including when to capitalize costs associated with obtaining and fulfilling a contract. The majority of these costs are currently expensed as incurred under existing U.S. GAAP. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company plans to apply a practical expedient and recognize the costs of obtaining a contract as an expense when incurred. Assets recognized for the costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is generally expected to be less than one year. The Company is quantifying the nature and amount of costs that would qualify for capitalization and the amount of amortization that will be recognized in each period.
Discontinued Operations
Discontinued Operations
Discontinued Operations
On February 9, 2017, the Company entered into the Purchase Agreement with Tempo Acquisition, LLC to sell its benefits administration and business process outsourcing business to the Buyer, an entity formed and controlled by affiliates of The Blackstone Group L.P., and certain designated purchasers that are direct or indirect subsidiaries of the Buyer.
On May 1, 2017, the Buyer purchased all of the outstanding equity interests of the Divested Business, plus certain related assets and liabilities, for a purchase price of $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and deferred consideration of up to $500 million. Cash proceeds after customary adjustments and before taxes due were $4.2 billion.
Aon and the Buyer entered into certain transaction related agreements at the closing, including two commercial agreements, a transition services agreement, certain intellectual property license agreements, sub-leases and other customary agreements. Aon expects to continue to be a significant client of the Divested Business and the Divested Business has agreed to use Aon for its broking and other services for a specified period of time.
In the nine months ended September 30, 2017, the Company recorded an estimated gain on sale, net of taxes, of $803 million and a non-cash impairment charge to its tradenames associated with the Divested Business of $380 million as these assets were not sold to the Buyer. The impairment charge is included in Amortization and impairment of intangible assets on the Condensed Consolidated Statement of Income for the nine months ended September 30, 2017.
The Company has classified the results of the Divested Business as discontinued operations in the Company’s Condensed Consolidated Statements of Income for all periods presented. Additionally, the assets and liabilities of the Divested Business were retrospectively classified as discontinued operations in the Company’s Condensed Consolidated Statements of Financial Position upon triggering held for sale criteria in February 2017. These assets and liabilities were sold on May 1, 2017.
The financial results of the Divested Business for the three and nine months ended September 30, 2017 and 2016 are presented as Income from discontinued operations on the Company’s Condensed Consolidated Statements of Income. The following table presents the financial results of the Divested Business (in millions):
 
 
Three months ended September 30
 
Nine months ended September 30

 
2017
 
2016
 
2017
 
2016
Revenue
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$
559

 
$
698

 
$
1,606

Expenses
 
 
 
 
 
 
 
 
Total operating expenses
 
14

 
491

 
640

 
1,443

Operating income from discontinued operations
 
(14
)
 
68

 
58

 
163

Other income
 
(1
)
 
(1
)
 
10

 

Income from discontinued operations before income taxes
 
(15
)
 
67

 
68

 
163

Income taxes
 
(6
)
 
25

 
14

 
61

Income from discontinued operations excluding gain, net of tax
 
(9
)
 
42

 
54

 
102

Gain on sale of discontinued operations, net of tax
 
5

 

 
803

 

Income from discontinued operations, net of tax
 
$
(4
)
 
$
42

 
$
857

 
$
102


Upon triggering held for sale criteria in February 2017, Aon ceased depreciating and amortizing all long-lived assets included in discontinued operations. No depreciation or amortization expense was recognized during the three months ended September 30, 2017. Included within Total operating expenses for the three months ended September 30, 2016 was $18 million of depreciation of fixed assets and $30 million of intangible asset amortization. Total operating expenses for the nine months ended September 30, 2017 and 2016 include, respectively, $8 million and $53 million of depreciation of fixed assets and $11 million and $90 million of intangible asset amortization.
The following table presents the aggregate carrying amounts of the classes of assets and liabilities presented as discontinued operations within the Company’s Condensed Consolidated Statements of Financial Position (in millions):
 
 
September 30,
2017 (1)
 
December 31,
2016
ASSETS
 
 

 
 

Cash and cash equivalents
 
$

 
$
5

Receivables, net
 

 
483

Fiduciary assets
 

 
526

Goodwill
 

 
1,337

Intangible assets, net
 

 
333

Fixed assets, net
 

 
215

Other assets
 

 
295

TOTAL ASSETS
 
$

 
$
3,194

 
 
 
 
 
LIABILITIES
 
 

 
 

Accounts payable and accrued liabilities
 
$

 
$
197

Fiduciary liabilities
 

 
526

Other liabilities
 

 
356

TOTAL LIABILITIES
 
$

 
$
1,079


(1)
All assets and liabilities associated with the Divested Business were sold on May 1, 2017.
The Company’s Condensed Consolidated Statements of Cash Flows present the operating, investing, and financing cash flows of the Divested Business as discontinued operations.  Aon uses a centralized approach to cash management and financing of its operations. Prior to the closing of the Transaction, portions of the Divested Business’s cash were transferred to Aon daily, and Aon would fund the Divested Business as needed. Cash and cash equivalents of discontinued operations at September 30, 2016 was $3 million.
Cash and Cash Equivalents and Short-term Investments
Cash and Cash Equivalents and Short-term Investments
Cash and Cash Equivalents and Short-term Investments
Cash and cash equivalents include cash balances and all highly-liquid instruments with initial maturities of three months or less.  Short-term investments consist of money market funds. The estimated fair value of cash and cash equivalents and short-term investments approximates their carrying values.
At September 30, 2017, Cash and cash equivalents and Short-term investments were $2,389 million compared to $716 million at December 31, 2016, an increase of $1,673 million that was primarily related to the receipt of proceeds from the sale of the Divested Business. Of the total balances, $98 million and $82 million was restricted as to its use at September 30, 2017 and December 31, 2016, respectively. Included within the September 30, 2017 and December 31, 2016 balances, respectively, were £42.7 million ($57.5 million at September 30, 2017 exchange rates) and £43.3 million ($53.2 million at December 31, 2016 exchange rates) of operating funds required to be held by the Company in the United Kingdom by the Financial Conduct Authority, a U.K.-based regulator, which were included in Short-term investments.
Other Financial Data
Other Financial Data
Other Financial Data
Condensed Consolidated Statements of Income Information
Other Income (Expense)
Other income (expense) consists of the following (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Foreign currency remeasurement gain (loss)
$
(20
)
 
$
3

 
$
(32
)
 
$
(14
)
Gain (loss) on disposal of business

 

 
(2
)
 
41

Equity earnings
2

 
4

 
11

 
7

Gain (loss) on financial instruments
16

 
3

 
6

 
(7
)
Other
(3
)
 

 
(3
)
 

Total
$
(5
)
 
$
10

 
$
(20
)
 
$
27


Condensed Consolidated Statements of Financial Position Information
Allowance for Doubtful Accounts
An analysis of the allowance for doubtful accounts is as follows (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Balance at beginning of period
$
59

 
$
64

 
$
56

 
$
58

Provision charged to Other general expenses
5

 
4

 
16

 
15

Accounts written off, net of recoveries

 
(5
)
 
(10
)
 
(11
)
Foreign currency translation
(5
)
 

 
(3
)
 
1

Balance at end of period
$
59

 
$
63

 
$
59

 
$
63


Other Current Assets
The components of Other current assets are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Taxes receivable
$
208

 
$
100

Prepaid expenses
158

 
102

Receivables from the Divested Business (1)
124

 

Other
28

 
45

Total
$
518

 
$
247


(1)
Refer to Note 3 “Discontinued Operations” for additional information.
Other Non-Current Assets
The components of Other non-current assets are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Investments
$
44

 
$
119

Taxes receivable
88

 
82

Other
166

 
159

Total
$
298

 
$
360


Other Current Liabilities
The components of Other current liabilities are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Deferred revenue
$
331

 
$
199

Taxes payable (1)
537

 
77

Other
421

 
380

Total
$
1,289

 
$
656


(1)
Includes accrued taxes payable related to the gain on sale of the Divested Business.
Other Non-Current Liabilities
The components of Other non-current liabilities are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Taxes payable
$
333

 
$
288

Deferred revenue
45

 
49

Leases
145

 
136

Compensation and benefits
61

 
56

Other
262

 
190

Total
$
846

 
$
719

Acquisitions and Dispositions of Businesses
Acquisitions and Dispositions of Businesses
Acquisitions and Dispositions of Businesses
Acquisitions
The Company completed eight acquisitions during the nine months ended September 30, 2017 and eight acquisitions during the twelve months ended December 31, 2016. The following table includes the fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):
 
 
For the nine months ended September 30, 2017
Cash
 
$
164

Deferred and contingent consideration
 
32

Aggregate consideration transferred
 
$
196

 
 
 
Assets acquired:
 
 
Cash and cash equivalents
 
$
7

Receivables, net
 
11

Goodwill
 
121

Intangible assets, net
 
90

Fixed assets, net
 
1

Other assets
 
10

Total assets acquired
 
240

Liabilities assumed:
 
 
Current liabilities
 
18

Other non-current liabilities
 
26

Total liabilities assumed
 
44

Net assets acquired
 
$
196


The results of operations of these acquisitions are included in the Condensed Consolidated Financial Statements as of the respective acquisition dates.  The Company’s results of operations would not have been materially different if these acquisitions had been reported from the beginning of the period in which they were acquired.
2017 Acquisitions
On August 31, 2017, the Company completed the transaction to acquire Mark Kelly Insurance and Financial Services PTY LTD, an Australia-based broker servicing the insurance needs of commercial clients in and around the Townsville regional center.
On August 28, 2017, the Company completed the transaction to acquire a certain portfolio in the Charlotte office of The Hays Group, Inc. d/b/a Hays Companies.
On July 27, 2017, the Company completed the transaction to acquire Grupo Innovac Sociedad de Correduría de Seguros, S.A, an insurance broker based in Valencia, Spain.
On July 3, 2017, the Company completed the transaction to acquire PWZ AG, an independent insurance broker based in Zurich, Switzerland.
On May 31, 2017, the Company completed the transaction to acquire SchneiderGolling IFFOXX Assekuranzmakler AG and SchneiderGolling Industrie Assekuranzmaklergesellschaft mbH from SchneiderGolling Gruppe, a property and casualty broker based in Southern Germany.
On May 2, 2017, the Company completed the transaction to acquire cut-e Assessment Global Holdings Limited, a high-volume online psychometric assessments provider based in Ireland.
On March 3, 2017, the Company completed the transaction to acquire Finaccord Limited, a market research, publishing and consulting company based in the United Kingdom.
On January 19, 2017, the Company completed the transaction to acquire VERO Management AG, an insurance broker and risk advisor based in Austria.
2016 Acquisitions
On December 26, 2016, the Company completed the transaction to acquire Admix, a leading health and benefits brokerage and solutions firm based in Brazil.
On November 11, 2016 the Company completed the transaction to acquire CoCubes, a leading hiring assessment company based in India.
On October 31, 2016, the Company completed the transaction to acquire Stroz, Friedberg, Inc., a leading global cyber risk management firm based in New York City, with offices across the U.S. and in London, Zurich, Dubai and Hong Kong.
On August 19, 2016, the Company completed the transaction to acquire Cammack Health LLC, a leading health and benefits consulting firm that serves large health care organizations in the Eastern region of the U.S., including health plans, health systems and employers.
On June 1, 2016, the Company completed the transaction to acquire Univers Workplace Solutions, a leading elective benefit enrollment and communication services firm based in New Jersey.
On April 11, 2016, the Company completed the transaction to acquire Nexus Insurance Brokers Limited and Bayfair Insurance Centre Limited, insurance brokerage firms located in New Zealand.
On February 1, 2016, the Company completed the transaction to acquire Modern Survey, an employee survey and talent analytics solutions provider based in Minneapolis.
On January 1, 2016, the Company completed the transaction to acquire Globe Events Management, an insurance, retirement, and investment consulting business company based in Australia.
Dispositions
The Company completed no dispositions during the three months ended September 30, 2017 and four dispositions during the nine months ended September 30, 2017, excluding the sale of the Divested Business. Refer to Note 3 “Discontinued Operations” for further information. The Company completed no dispositions during the three months ended September 30, 2016 and four dispositions during the nine months ended September 30, 2016.
There were no gains recognized on the disposition of businesses for the three months ended September 30, 2017 and 2016, excluding the sale of the Divested Business. Total pretax losses recognized, net of gains, were $2 million for the nine months ended September 30, 2017, and total pretax gains recognized, net of losses, were $41 million for the nine months ended September 30, 2016. Gains and losses recognized as a result of a disposition are included in Other income (expense) in the Condensed Consolidated Statements of Income.
Restructuring
Restructuring
Restructuring
In 2017, Aon initiated a global restructuring plan (the “Restructuring Plan”) in connection with the sale of the Divested Business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity. The Company expects these restructuring activities and related expenses to affect continuing operations through 2019, including an estimated 2,400 to 2,850 role eliminations. The Restructuring Plan is expected to result in cumulative costs of approximately $750 million through the end of the plan, consisting of approximately $303 million in employee termination costs, $146 million in technology rationalization costs, $80 million in lease consolidation costs, $40 million in asset impairments, and $181 million in other costs, including certain separation costs associated with the sale of the Divested Business. Included in the estimated $750 million are $50 million of non-cash charges related to asset impairments and lease consolidations.
From the inception of the Restructuring Plan through September 30, 2017, the Company has eliminated 2,125 positions and incurred total expenses of $401 million for restructuring and related separation costs.  These charges are included in Compensation and benefits, Information technology, Premises, Depreciation of fixed assets, and Other general expenses in the accompanying Condensed Consolidated Statements of Income.
The following table summarizes restructuring and separation costs by type that have been incurred through September 30, 2017 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs may be revised in future periods as these assumptions are updated:
 
 
Three months ended September 30, 2017
 
Nine months ended September 30, 2017
 
Estimated Remaining Costs
 
Estimated Total Cost (1)
Workforce reduction
 
$
52

 
$
257

 
$
46

 
$
303

Technology rationalization (2)
 
12

 
22

 
124

 
146

Lease consolidation (2)
 
4

 
8

 
72

 
80

Asset impairments
 
2

 
26

 
14

 
40

Other costs associated with restructuring and separation (2) (3)
 
32

 
88

 
93

 
181

Total restructuring and related expenses
 
$
102

 
$
401

 
$
349

 
$
750

(1)
Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan.  Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives.
(2)
Contract termination costs included within Technology rationalization for the three and nine months ended September 30, 2017 were $1 million. Contract termination costs included within Lease consolidations for the three and nine months ended September 30, 2017 were $3 million and $8 million, respectively. Contract termination costs included within Other costs associated with restructuring and separation were $1 million for the three and nine months ended September 30, 2017. Total estimated contract termination costs to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, are $10 million, $80 million, and $10 million.
(3)
Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs, and consulting and legal fees. These costs are generally recognized when incurred.
The changes in the Company’s liabilities for the Restructuring Plan as of September 30, 2017 are as follows (in millions):
 
 
Restructuring Plan
Balance as of December 31, 2016
 
$

Expensed
 
369

Cash payments
 
(199
)
Foreign currency translation and other
 
17

Balance as of September 30, 2017
 
$
187

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
The changes in the net carrying amount of goodwill for the nine months ended September 30, 2017 are as follows (in millions):
Balance as of December 31, 2016
$
7,410

Goodwill related to current year acquisitions
121

Goodwill related to disposals
(1
)
Goodwill related to prior year acquisitions
(6
)
Foreign currency translation
364

Balance as of September 30, 2017
$
7,888


Other intangible assets by asset class are as follows (in millions):
 
September 30, 2017
 
December 31, 2016
 
Gross Carrying Amount
 
Accumulated
Amortization and Impairment
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated
Amortization and Impairment
 
Net Carrying Amount
Customer related and contract based
$
2,104

 
$
1,380

 
$
724

 
$
2,023

 
$
1,198

 
$
825

Tradenames(1)
1,041

 
478

 
563

 
1,027

 
7

 
1,020

Technology and other(1)
384

 
330

 
54

 
347

 
302

 
45

 Total
$
3,529

 
$
2,188

 
$
1,341

 
$
3,397

 
$
1,507

 
$
1,890


(1)
Prior to May 1, 2017, finite lived tradenames were classified within Technology and other. As of December 31, 2016, $29 million of gross carrying amount and $7 million of accumulated amortization related to finite-lived tradenames was reclassified from Technology and other to Tradenames.
In the second quarter of 2017 and in connection with the completion of the sale of the Divested Business, the Company recognized a non-cash impairment charge to the associated tradenames of $380 million. The fair value of the tradenames was determined using the Relief from Royalty Method. This impairment was included in Amortization and impairment of intangible assets on the Condensed Consolidated Statement of Income. Refer to Note 3 “Discontinued Operations” for further information.
Additionally, effective May 1, 2017 and consistent with operating as one segment, the Company implemented a three-year strategy to transition to a unified Aon brand. As a result, Aon commenced amortization of all indefinite lived tradenames and prospectively accelerated amortization of its finite-lived tradenames over the three-year period. The change in estimated useful life resulted in additional amortization expense, net of tax, to continuing operations of $34 million, or $0.13 per share, and $56 million, or $0.21 per share, in the three and nine months ended September 30, 2017, respectively.
Amortization expense and impairment charges from finite lived intangible assets was $101 million and $604 million for the three and nine months ended September 30, 2017, respectively. Amortization expense from finite lived intangible assets was $42 million and $117 million for the three and nine months ended September 30, 2016, respectively.
The estimated future amortization for finite lived intangible assets as of September 30, 2017 is as follows (in millions):
Remainder of 2017
$
117

2018
376

2019
357

2020
196

2021
89

Thereafter
206

 Total
$
1,341

Debt
Debt
Debt
Notes
During the first quarter of 2017, the CAD 375 million ($304 million at September 30, 2017 exchange rates) 4.76% Senior Notes due March 2018 were classified as Short-term debt and current portion of long-term debt in the Condensed Consolidated Statements of Financial Position as the date of maturity is less than one year.
Revolving Credit Facilities
As of September 30, 2017, Aon had one primary committed credit facility outstanding: its $900 million multi-currency U.S. credit facility expiring in February 2021 (the “2021 Facility”). On October 19, 2017, Aon entered into a $400 million multi-currency U.S. credit facility expiring in October 2022 (the “2022 Facility”). This facility replaced the Company’s previous $400 million U.S. credit facility that expired in March 2017.
The 2021 Facility includes customary representations, warranties and covenants, including financial covenants that require Aon to maintain specified ratios of adjusted consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. At September 30, 2017, Aon did not have borrowings under the 2021 Facility, and was in compliance with all covenants contained therein during the nine months ended September 30, 2017.
Commercial Paper
Aon Corporation, a wholly-owned subsidiary of Aon plc, has established a U.S. commercial paper program and a European multi-currency commercial paper program (collectively the “CP Programs”). Commercial paper may be issued in an aggregate principal amount of up to $1.3 billion under the CP Programs, allocated between the two programs as determined by management, not to exceed the amount of committed credit, which was $900 million at September 30, 2017. The U.S. commercial paper program is fully and unconditionally guaranteed by Aon plc and the European commercial paper program is fully and unconditionally guaranteed by Aon Corporation.
Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Condensed Consolidated Statements of Financial Position, is as follows (in millions):
As of
 
September 30, 2017
 
December 31, 2016
Commercial paper outstanding
 
$

 
$
329


The weighted average commercial paper outstanding and its related interest rates are as follows:
 
 
Three months ended September 30
 
Nine months ended September 30
 
 
2017
 
2016
 
2017
 
2016
Weighted average commercial paper outstanding
 
$

 
$
271

 
$
227

 
$
251

Weighted average interest rate of commercial paper outstanding
 
%
 
0.02
%
 
0.18
%
 
0.27
%
Income Taxes
Income Taxes
Income Taxes
The effective tax rate on net income from continuing operations was 2.0% and (49.8)% for the three and nine months ended September 30, 2017, respectively. The effective tax rate on net income from continuing operations was 8.1% and 12.8% for the three and nine months ended September 30, 2016, respectively. For the three months ended September 30, 2017, the Company reported tax expense of $4 million on pretax income of $200 million, which resulted in an effective tax rate of 2.0%, primarily driven by the jurisdictional distribution of income including the estimated impact of the Restructuring Program and the accelerated amortization of tradenames. For the nine months ended September 30, 2017, the Company reported a tax benefit of $139 million on pretax income of $279 million, which resulted in an effective tax rate of (49.8)%. The primary components of the year to date tax amounts were the non-cash tax benefit from the tradename impairment associated with the Divested Business and the impact of share-based payments from adoption of the new share-based compensation guidance. Refer to Note 2 “Accounting Principles and Practices” for additional details.
Shareholders' Equity
Shareholders' Equity
Shareholders’ Equity
Ordinary Shares
Aon has a share repurchase program authorized by the Company’s Board of Directors (the “Repurchase Program”) . The Repurchase Program was established in April 2012 with up to $5.0 billion in authorized repurchases, and was increased by $5.0 billion in authorized repurchases in each of November 2014 and February 2017 for a total of $15.0 billion in repurchase authorizations.
Under the Repurchase Program, Class A Ordinary Shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital.
In the three months ended September 30, 2017, the Company repurchased 5.4 million shares at an average price per share of $139.61, for a total cost of approximately $749 million and recorded an additional $3.8 million of costs associated with the repurchases to retained earnings. During the nine months ended September 30, 2017, the Company repurchased 14.5 million shares at an average price per share of $131.58, for a total cost of approximately $1.9 billion and recorded an additional $9.5 million of costs associated with the repurchases to retained earnings. Included in the 5.4 million shares and 14.5 million shares repurchased during the three and nine months ended September 30, 2017 were 165 thousand shares that did not settle until October 2017. These shares were settled at an average price per share of $146.52 and total cost of $24.2 million. In the three months ended September 30, 2016, the Company repurchased 2.7 million shares at an average price per share of $110.26 for a total cost of approximately $301 million. During the nine months ended September 30, 2016, the Company repurchased 10.4 million shares at an average price per share of $101.16, for a total cost of approximately $1.1 billion. At September 30, 2017, the remaining authorized amount for share repurchase under the Repurchase Program was $5.9 billion. Under the Repurchase Program, the Company has repurchased a total of 104.7 million shares for an aggregate cost of approximately $9.1 billion.
Net Income Per Share
Weighted average shares outstanding are as follows (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Basic weighted-average ordinary shares outstanding
255.6

 
267.5

 
260.9

 
269.1

Dilutive effect of potentially issuable shares
1.7

 
2.1

 
2.0

 
1.9

Diluted weighted-average ordinary shares outstanding
257.3

 
269.6

 
262.9

 
271.0


Potentially issuable shares are not included in the computation of diluted net income per share if their inclusion would be antidilutive. There were no shares excluded from the calculation for the three and nine months ended September 30, 2017 and 2016.
Accumulated Other Comprehensive Loss
Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):
 
Change in Fair Value of Financial Instruments (1) 
 
Foreign Currency Translation Adjustments
 
Post-Retirement Benefit Obligation (2)
 
Total
Balance at December 31, 2016
$
(37
)
 
$
(1,264
)
 
$
(2,611
)
 
$
(3,912
)
Other comprehensive income (loss) before reclassifications, net
13

 
442

 

 
455

Amounts reclassified from accumulated other comprehensive loss:
 
 


 


 


Amounts reclassified from accumulated other comprehensive income (loss)
(2
)
 
(11
)
 
80

 
67

Tax benefit (expense)
2

 

 
(24
)
 
(22
)
Amounts reclassified from accumulated other comprehensive income (loss), net

 
(11
)
 
56

 
45

Net current period other comprehensive income (loss)
13

 
431

 
56

 
500

Balance at September 30, 2017
$
(24
)
 
$
(833
)
 
$
(2,555
)
 
$
(3,412
)
(1)
Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense), Other general expenses, and Compensation and benefits. See Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivative and hedging activity.
(2)
Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Compensation and benefits.
Employee Benefits
Employee Benefits
Employee Benefits
The following table provides the components of the net periodic cost (benefit) recognized in the Condensed Consolidated Statements of Income in Compensation and benefits for Aon’s material U.K., U.S., and other significant international pension plans located in the Netherlands and Canada (in millions):
 
Three months ended September 30
 
U.K.
 
U.S.
 
Other
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Service cost
$

 
$

 
$

 
$

 
$

 
$

Interest cost
31

 
37

 
24

 
28

 
7

 
7

Expected return on plan assets, net of administration expenses
(50
)
 
(58
)
 
(34
)
 
(39
)
 
(13
)
 
(12
)
Amortization of prior-service cost

 

 

 
1

 

 

Amortization of net actuarial loss
8

 
7

 
13

 
12

 
3

 
3

Net periodic cost (benefit)
$
(11
)
 
$
(14
)
 
$
3

 
$
2

 
$
(3
)
 
$
(2
)
Loss on pension settlement

 

 

 

 

 

Total net periodic cost (benefit)
$
(11
)

$
(14
)

$
3


$
2


$
(3
)

$
(2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30
 
U.K.
 
U.S.
 
Other
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Service cost
$

 
$

 
$

 
$

 
$

 
$

Interest cost
91

 
123

 
72

 
83

 
19

 
21

Expected return on plan assets, net of administration expenses
(147
)
 
(187
)
 
(104
)
 
(117
)
 
(35
)
 
(36
)
Amortization of prior-service cost

 
1

 
1

 
2

 

 

Amortization of net actuarial loss
23

 
24

 
38

 
37

 
9

 
8

Net periodic cost (benefit)
$
(33
)
 
$
(39
)
 
$
7

 
$
5

 
$
(7
)
 
$
(7
)
Loss on pension settlement

 
61

 

 

 

 

Total net periodic cost (benefit)
$
(33
)
 
$
22

 
$
7

 
$
5

 
$
(7
)
 
$
(7
)

In March 2017, the Company approved a plan to offer a voluntary one-time lump sum payment option to certain eligible employees of the Company’s U.K. pension plans that, if accepted, would settle the Company’s pension obligation to them. A non-cash settlement charge is expected in the fourth quarter of 2017.
Contributions
The Company expects to make cash contributions of approximately $80 million, $51 million, and $18 million, based on exchange rates as of December 31, 2016, to its significant U.K., U.S., and other significant international pension plans, respectively, during 2017.  During the three months ended September 30, 2017, cash contributions of $22 million, $5 million, and $3 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the nine months ended September 30, 2017, cash contributions of $64 million, $31 million, and $14 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the three and nine months ended September 30, 2017, Aon made a non-cash contribution of approximately $80 million to its U.S. pension plan.
During the three months ended September 30, 2016, cash contributions of $19 million, $5 million, and $4 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the nine months ended September 30, 2016, cash contributions of $53 million, $24 million, and $14 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively.
Share-Based Compensation Plans
Share-Based Compensation Plans
Share-Based Compensation Plans
The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Restricted share units (“RSUs”)
$
42

 
$
40

 
$
143

 
$
136

Performance share awards (“PSAs”)
22

 
24

 
63

 
67

Employee share purchase plans
3

 
2

 
8

 
7

Total share-based compensation expense 
$
67

 
$
66

 
$
214

 
$
210


Restricted Share Units
RSUs generally vest between three and five years. The fair value of RSUs is based upon the market value of Aon ordinary shares at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all non-vested awards. Compensation expense associated with RSUs is recognized on a straight-line basis over the requisite service period. Dividend equivalents are paid on certain RSUs, based on the initial grant amount.
The following table summarizes the status of the Company’s RSUs (shares in thousands):
 
2017
 
2016
 
Shares
 
Fair Value (1)
 
Shares
 
Fair Value (1)
Non-vested at December 31
6,195

 
$
89

 
7,167

 
$
77

Granted
1,549

 
122

 
2,110

 
101

Vested
(2,294
)
 
82

 
(2,729
)
 
70

Forfeited
(590
)
 
92

 
(333
)
 
81

Non-vested at September 30
4,860

 
$
102

 
6,215

 
$
88

(1)
Represents per share weighted average fair value of award at date of grant.
Unamortized deferred compensation expense amounted to $367 million as of September 30, 2017, with a remaining weighted-average amortization period of approximately 2.1 years.
Performance Share Awards
The vesting of PSAs is contingent upon meeting a cumulative level of earnings per share performance over a three-year period. The actual issue of shares may range from 0-200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of PSAs is based upon the market price of Aon ordinary shares at the date of grant. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits expense, if necessary. Dividend equivalents are not paid on PSAs.
Information as of September 30, 2017 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the nine months ended September 30, 2017 and the years ended December 31, 2016 and 2015, respectively, is as follows (shares in thousands and dollars in millions, except fair value):
 
September 30,
2017
 
December 31,
2016
 
December 31,
2015
Target PSAs granted during period
548

 
752

 
967

Weighted average fair value per share at date of grant
$
114

 
$
100

 
$
96

Number of shares that would be issued based on current performance levels
544

 
663

 
1,362

Unamortized expense, based on current performance levels
$
51

 
$
27

 
$
11

Derivatives and Hedging
Derivatives and Hedging
Derivatives and Hedging
The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates.  To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures.  The Company does not enter into derivative transactions for trading or speculative purposes.
Foreign Exchange Risk Management
The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers denominated in a currency that differs from its functional currency, or enters into other transactions that are denominated in a currency other than its functional currency.  The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows.  These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income.
The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 30-day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income.
The notional and fair values of derivative instruments are as follows (in millions):
 
Notional Amount
 
Derivative Assets (1)
 
Derivative Liabilities (2)
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
Foreign exchange contracts
 

 
 

 
 

 
 

 
 

 
 

Accounted for as hedges
$
711

 
$
758

 
$
31

 
$
14

 
$
3

 
$
13

Not accounted for as hedges (3)
245

 
189

 

 
1

 
2

 
1

   Total
$
956

 
$
947

 
$
31

 
$
15

 
$
5

 
$
14

(1)
Included within Other current assets ($6 million at September 30, 2017 and $6 million at December 31, 2016) or Other non-current assets ($25 million at September 30, 2017 and $9 million at December 31, 2016).
(2)
Included within Other current liabilities ($3 million at September 30, 2017 and $7 million at December 31, 2016) or Other non-current liabilities ($2 million at September 30, 2017 and $7 million at December 31, 2016).
(3)
These contracts typically are for 30 day durations and are executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date.
Offsetting of derivatives assets are as follows (in millions):
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Assets Presented in the Statement of Financial Position (1)
Derivatives accounted for as hedges
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
Foreign exchange contracts
$
31

 
$
14

 
$

 
$
(1
)
 
$
31

 
$
13

(1)
Included within Other current assets ($6 million at September 30, 2017 and $4 million at December 31, 2016) or Other non-current assets ($25 million at September 30, 2017 and $9 million at December 31, 2016).
Offsetting of derivative liabilities are as follows (in millions):
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Liabilities Presented in the Statement of Financial Position (1)
 Derivatives accounted for as hedges
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
Foreign exchange contracts
 
$
3

 
$
13

 
$

 
$
(1
)
 
$
3

 
$
12


(1)
Included within Other current liabilities ($2 million at September 30, 2017 and $5 million at December 31, 2016) or Other non-current liabilities ($1 million at September 30, 2017 and $7 million at December 31, 2016).
The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017 and 2016 are as follows (in millions):
Cash Flow Hedge - Foreign Exchange Contracts
 
Location of Eventual Reclassification from Accumulated Other Comprehensive Loss
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
Three months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$

 
$
3

 
$

 
$
8

 
$
11

2016
 
10

 
(4
)
 

 
(7
)
 
(1
)
Cash Flow Hedge - Foreign Exchange Contracts
 
Location of Eventual Reclassification from Accumulated Other Comprehensive Loss
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
Nine months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$
9

 
$
5

 
$

 
$
4

 
$
18

2016
 
8

 
(9
)
 

 
(18
)
 
(19
)
Cash Flow Hedge - Foreign Exchange Contracts
 
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
Three months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$
1

 
$
(1
)
 
$

 
$
(3
)
 
$
(3
)
2016
 
1

 
(1
)
 

 
(2
)
 
(2
)
Cash Flow Hedge - Foreign Exchange Contracts
 
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
Nine months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$
14

 
$
(3
)
 
$
(1
)
 
$
(7
)
 
$
3

2016
 
2

 
(2
)
 
(1
)
 
(5
)
 
(6
)

The Company estimates that approximately $11 million of pretax losses currently included within Accumulated other comprehensive loss will be reclassified in to earnings in the next twelve months.
The amount of gain (loss) recognized in income on the ineffective portion of derivatives for the three and nine months ended September 30, 2017 and 2016 was immaterial.
During the three and nine months ended September 30, 2017, the Company recorded a gain of $8 million and $9 million, respectively, in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. During the three and nine months ended September 30, 2016, the Company recorded a gain of $2 million and $1 million, respectively, in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges.
Net Investments in Foreign Operations Risk Management
The Company uses non-derivative financial instruments to protect the value of its investments in a number of foreign subsidiaries. In 2016, the Company designated a portion of its Euro-denominated commercial paper issuances as a non-derivative hedge of the foreign currency exposure of a net investment in its European operations. The change in fair value of the designated portion of the Euro-denominated commercial paper due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustment, a component of Accumulated other comprehensive income (loss), to the extent it is effective as a hedge. The foreign currency translation adjustment of the hedged net investments that is also recorded in Accumulated other comprehensive income (loss). Ineffective portions of net investment hedges, if any, are reclassified from Accumulated other comprehensive income (loss) into earnings during the period of change.
As of September 30, 2017, the Company had no outstanding Euro-denominated commercial paper designated as a hedge of the foreign currency exposure of its net investment in its European operations. As of September 30, 2017, the unrealized gain recognized in Accumulated other comprehensive income (loss) related to the net investment non derivative hedging instrument was immaterial.
The Company did not reclassify any deferred gains or losses related to net investment hedges from Accumulated other comprehensive income (loss) to earnings during the three and nine months ended September 30, 2017. In addition, the Company did not incur any ineffectiveness related to net investment hedges during the three and nine months ended September 30, 2017.
Fair Value Measurements and Financial Instruments
Fair Value Measurements and Financial Instruments
Fair Value Measurements and Financial Instruments
Accounting standards establish a three tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows:
Level 1 — observable inputs such as quoted prices for identical assets in active markets;
Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and
Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions.
The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments:
Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. 
Equity investments consist of domestic and international equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities.
Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Consolidated Financial Statements.
Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities.
Debt is carried at outstanding principal balance, less any unamortized discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements.
The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016 (in millions):
 
 
 
Fair Value Measurements Using
 
Balance at September 30, 2017
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
Assets:
 

 
 

 
 

 
 

Money market funds (1)
$
3,091

 
$
3,091

 
$

 
$

Other investments:
 

 
 

 
 

 
 

Government bonds
1

 

 
1

 

Equity investments
11

 
7

 
4

 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
31

 

 
31

 

Liabilities:
 

 
 

 
 

 
 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
5

 

 
5

 

(1)
Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity.
(2)
Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity.
 
 
 
Fair Value Measurements Using
 
Balance at December 31, 2016
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
Assets:
 

 
 

 
 

 
 

Money market funds (1)
$
1,371

 
$
1,371

 
$

 
$

Other investments:
 

 
 

 
 

 
 

Government bonds
1

 

 
1

 

Equity investments
9

 
6

 
3

 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
15

 

 
15

 

Liabilities:
 

 
 

 
 

 
 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
14

 

 
14

 

(1)
Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. 
(2)
Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. 
There were no transfers of assets or liabilities between fair value hierarchy levels in either the three and nine months ended September 30, 2017 or 2016. The Company recognized no realized or unrealized gains or losses in the Condensed Consolidated Statements of Income during either the three and nine months ended September 30, 2017 or 2016, related to assets and liabilities measured at fair value using unobservable inputs.
The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ (in millions):
 
September 30, 2017
 
December 31, 2016
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Current portion of long-term debt (1)
$
305

 
$
309

 
$

 
$

Long-term debt
5,662

 
6,227

 
5,869

 
6,264


(1)
Excludes commercial paper program.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Legal
Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits and proceedings that arise in the ordinary course of business, which frequently include errors and omissions (“E&O”) claims. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble or extraordinary damages. While Aon maintains meaningful E&O insurance and other insurance programs to provide protection against certain losses that arise in such matters, Aon has exhausted or materially depleted its coverage under some of the policies that protect the Company and, consequently, is self-insured or materially self-insured for some claims. Accruals for these exposures, and related insurance receivables, when applicable, are included in the Consolidated Statements of Financial Position and have been recognized in Other general expenses in the Consolidated Statements of Income to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Matters that are not probable and reasonably estimable are not accrued for in the financial statements.
The Company has included in the current matters described below certain matters in which (1) loss is probable, (2) loss is reasonably possible, that is, more than remote but not probable, or (3) there exists the reasonable possibility of loss greater than the accrued amount. In addition, the Company may from time to time disclose matters for which the probability of loss could be remote but the claim amounts associated with such matters are potentially significant. The reasonably possible range of loss for the matters described below for which loss is estimable, in excess of amounts that are deemed probable and estimable and therefore already accrued, is estimated to be between $0 and $0.3 billion, exclusive of any insurance coverage. These estimates are based on currently available information. As available information changes, the matters for which Aon is able to estimate may change, and the estimates themselves may change. In addition, many estimates involve significant judgment and uncertainty. For example, at the time of making an estimate, Aon may only have limited information about the facts underlying the claim, and predictions and assumptions about future court rulings and outcomes may prove to be inaccurate. Although management at present believes that the ultimate outcome of all matters described below, individually or in the aggregate, will not have a material adverse effect on the consolidated financial position of Aon, legal proceedings are subject to inherent uncertainties and unfavorable rulings or other events. Unfavorable resolutions could include substantial monetary or punitive damages imposed on Aon or its subsidiaries. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected.
Current Matters
A retail insurance brokerage subsidiary of Aon was sued on September 14, 2010 in the Chancery Court for Davidson County, Tennessee Twentieth Judicial District, at Nashville by a client, Opry Mills Mall Limited Partnership (“Opry Mills”) that sustained flood damage to its property in May 2010. The lawsuit seeks $200 million in coverage from numerous insurers with whom this Aon subsidiary placed the client’s property insurance coverage. The insurers contend that only $50 million in coverage (which has already been paid) is available for the loss because the flood event occurred on property in a high hazard flood zone. Opry Mills is seeking full coverage from the insurers for the loss and has sued this Aon subsidiary in the alternative for the same $150 million difference on various theories of professional liability if the court determines there is not full coverage. In addition, Opry Mills seeks prejudgment interest, attorneys’ fees and enhanced damages which could substantially increase Aon’s exposure. In March 2015, the trial court granted partial summary judgment in favor of plaintiffs and against the insurers, holding generally that the plaintiffs are entitled to $200 million in coverage under the language of the policies. In August 2015, a jury returned a verdict in favor of Opry Mills and against the insurers in the amount of $204 million. The insurers have appealed both of these trial court decisions. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims.
A pensions consulting and administration subsidiary of Aon provided advisory services to the Trustees of the Gleeds pension fund in the United Kingdom and, on occasion, to the relevant employer of the fund.  In April 2014, the High Court, Chancery Division, London found that certain governing documents of the fund that sought to alter the fund’s benefit structure and that had been drafted by Aon were procedurally defective and therefore invalid.  No lawsuit naming Aon as a party was filed, although a tolling agreement was entered.  The High Court decision says that the additional liabilities in the pension fund resulting from the alleged defect in governing documents amount to approximately £45 million ($61 million at September 30, 2017 exchange rates). In December 2014, the Court of Appeal granted the employer leave to appeal the High Court decision. At a hearing in October 2016, the Court of Appeal approved a settlement of the pending litigation. On October 31, 2016, the fund’s trustees and employer sued Aon in the High Court, Chancery Division, London, alleging negligence and breach of duty in relation to the governing documents. The proceedings were served on Aon on December 20, 2016. The claimants seek damages of approximately £70 million ($94 million at September 30, 2017 exchange rates). Aon believes that it has meritorious defenses and intends to vigorously defend itself against this claim.
On June 29, 2015, Lyttelton Port Company Limited (“LPC”) sued Aon New Zealand in the Christchurch Registry of the High Court of New Zealand.  LPC alleges, among other things, that Aon was negligent and in breach of contract in arranging LPC’s property insurance program for the period covering June 30, 2010, to June 30, 2011.  LPC contends that acts and omissions by Aon caused LPC to recover less than it otherwise would have from insurers for losses suffered in the 2010 and 2011 Canterbury earthquakes.  LPC claims damages of approximately NZD 184 million ($133 million at September 30, 2017 exchange rates) plus interest and costs.  Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims.
On October 3, 2017, Christchurch City Council (“CCC”) invoked arbitration to pursue a claim that it asserts against Aon New Zealand. Aon provided insurance broking services to CCC in relation to CCC’s 2010-2011 material damage and business interruption program. In December 2015, CCC settled its property and business interruption claim for its losses arising from the 2010-2011 Canterbury earthquakes against the underwriter of its material damage and business interruption program and the reinsurers of that underwriter. CCC contends that acts and omissions by Aon caused CCC to recover less in that settlement than it otherwise would have. CCC claims damages of approximately NZD 528 million ($381 million at September 30, 2017 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims.
In April 2017, the Financial Conduct Authority (the “FCA”) announced an investigation relating to suspected competition law breaches in the aviation and aerospace broking industry, which, for Aon in 2016, represented less than $100 million in global revenue.  The European Commission has now assumed jurisdiction over the investigation in place of the FCA. Other antitrust agencies outside the European Union are also conducting formal or informal investigations regarding these matters. Aon intends to work diligently with all antitrust agencies concerned to ensure they can carry out their work as efficiently as possible.  At this time, in light of the uncertainties and many variables involved, we cannot estimate the ultimate impact on our company from these investigations or any related private litigation, nor any damages, penalties, or fines related to them.   There can be no assurance that the ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity.
Aon UK Limited, an indirect wholly-owned subsidiary of the Company, is presently engaged in several internal regulatory reviews and ongoing interactions with the FCA concerning Aon UK Limited’s systems and controls. These interactions may result in additional charges above amounts accrued for to date in connection with these reviews.
Settled/Closed Matters
On June 1, 2007, the International Road Transport Union (“IRU”) sued Aon in the Geneva Tribunal of First Instance in Switzerland. IRU alleges, among other things, that, between 1995 and 2004, a business acquired by Aon and, later, an Aon subsidiary (1) accepted commissions for certain insurance placements that violated a fee agreement entered between the parties and (2) negligently failed to ask certain insurance carriers to contribute to the IRU’s risk management costs.  IRU sought damages of approximately CHF 46 million ($47 million at June 30, 2017 exchange rates) and $3 million, plus legal fees and interest of approximately $30 million. On December 2, 2014, the Geneva Tribunal of First Instance entered a judgment that accepted some, and rejected other, of IRU’s claims. The judgment awarded IRU CHF 16.8 million ($17 million at June 30, 2017 exchange rates) and $3.1 million, plus interest and adverse costs. The entire amount of the judgment, including interest through December 31, 2014, totaled CHF 27.9 million ($28 million at December 31, 2014 exchange rates) and $5 million. On January 26, 2015, in return for IRU agreeing not to appeal the bulk of its dismissed claims, the Aon subsidiary agreed not to appeal a part of the judgment and to pay IRU CHF 12.8 million ($14 million at January 31, 2015 exchange rates) and $4.7 million without Aon admitting liability. The Aon subsidiary appealed those aspects of the judgment it retained the right to appeal. IRU did not appeal. After the Geneva Appellate Court affirmed the judgment of the Geneva Tribunal of First Instance, the Aon subsidiary filed an appeal with the Swiss Federal Tribunal. By judgment issued June 16, 2017, the Swiss Federal Tribunal affirmed in part and reversed in part the appellate judgment and remanded the case to the appellate court. IRU and the Aon subsidiary agreed that the Aon subsidiary would pay IRU CHF 15.0 million ($15 million at June 30, 2017 exchange rates) and $344,000. As a result of this agreement, the legal proceedings between IRU and the Aon subsidiary have been discontinued.
Guarantees and Indemnifications
Redomestication
In connection with the redomicile of Aon’s headquarters (the “Redomestication”), the Company on April 2, 2012 entered into various agreements pursuant to which it agreed to guarantee the obligations of its subsidiaries arising under issued and outstanding debt securities. Those agreements included the (1) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (amending and restating the Indenture, dated as of September 10, 2010, between Aon Corporation and the Trustee), (2) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of December 16, 2002, between Aon Corporation and the Trustee), (3) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of January 13, 1997, as supplemented by the First Supplemental Indenture, dated as of January 13, 1997), and (4) First Supplemental Indenture, dated as of April 2, 2012, among Aon Finance N.S. 1, ULC, as issuer, Aon Corporation, as guarantor, Aon plc, as guarantor, and Computershare Trust Company of Canada, as trustee.
The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable are included in the Company’s Condensed Consolidated Financial Statements, and are recorded at fair value.
The Company expects that, as prudent business interests dictate, additional guarantees and indemnifications may be issued from time to time.
Sale of the Divested Business
In connection with the sale of the Divested Business, the Company guaranteed future operating lease commitments related to certain facilities assumed by the Buyer. The Company is obligated to perform under the guarantees if the Divested Business defaults on such leases at any time during the remainder of the lease agreements, which expire on various dates through 2024. As of September 30, 2017, the undiscounted maximum potential future payments under the lease guarantee is $104 million, with an estimated fair value of $25 million. No cash payments were made in connection to the lease commitments during the three or nine months ended September 30, 2017.
Additionally, the Company is subject to performance guarantee requirements under certain client arrangements that were assumed by the Buyer.  Should the Divested Business fail to perform as required by the terms of the arrangements, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023.  As of September 30, 2017, the undiscounted maximum potential future payments under the performance guarantees were $395 million, with an estimated fair value of $4 million. No cash payments were made in connection to the performance guarantees during the three or nine months ended September 30, 2017.
Letters of Credit
Aon has entered into a number of arrangements whereby the Company’s performance on certain obligations is guaranteed by a third party through the issuance of letters of credit (“LOCs”). The Company had total LOCs outstanding of approximately $94 million at September 30, 2017, compared to $90 million at December 31, 2016. These letters of credit cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries.
Premium Payments
The Company has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies. The maximum exposure with respect to such contractual contingent guarantees was approximately $76 million at September 30, 2017 compared to $95 million at December 31, 2016.
Segment Information
Segment Information
Segment Information
Beginning in the first quarter of 2017 and following the Transaction described in Note 3 “Discontinued Operations,” the Company began leading a set of initiatives designed to strengthen Aon and unite the firm with one portfolio of capability enabled by proprietary data and analytics and one operating model to deliver additional insight, connectivity and efficiency. These initiatives reinforce Aon’s return on invested capital (“ROIC”) decision-making process and emphasis on free cash flow. The Company is now operating as one segment that includes all of Aon’s continuing operations, which as a global professional services firm provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines which make up its principal products and services. The CODM assesses the performance of the Company and allocates resources based on one company: Aon United.
The Company’s reportable operating segment has been determined using a management approach, which is consistent with the basis and manner in which Aon’s CODM uses financial information for the purposes of allocating resources and evaluating performance.  The CODM assesses performance and allocates resources based on total Aon results against its key four metrics, including organic revenue growth, expense discipline, and collaborative behaviors that maximize value for Aon and its shareholders, regardless of which revenue line it benefits.
Prior period comparative segment information has been restated to conform with current year presentation. In prior periods, the Company did not include unallocated expenses in segment operating income, which represented corporate governance costs not allocated to the previous operating segments. These costs are now reflected within operating expenses for the current and prior period.  
Revenue from continuing operations for each of the Company’s principal product and service lines is as follows (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Commercial Risk Solutions
$
917

 
$
884

 
$
2,943

 
$
2,835

Reinsurance Solutions
355

 
329

 
1,070

 
1,032

Retirement Solutions
491

 
466

 
1,266

 
1,266

Health Solutions
293

 
265

 
977

 
838

Data & Analytic Services
289

 
260

 
842

 
794

Elimination
(5
)
 
(3
)
 
(9
)
 
(6
)
Total revenue
$
2,340

 
$
2,201

 
$
7,089

 
$
6,759


As Aon is operating as one segment, segment profit or loss is consistent with consolidated reporting as disclosed on the Condensed Consolidated Statements of Income.
The geographic distribution of Aon’s total revenue or long-lived assets did not change as a result of the change in reportable operating segments described above.
Guarantee of Registered Securities
Guarantee of Registered Securities
Guarantee of Registered Securities
As described in Note 16 “Commitments and Contingencies,” in connection with the Redomestication, Aon plc entered into various agreements pursuant to which it agreed to guarantee the obligations of Aon Corporation arising under issued and outstanding debt securities, including the 5.00% Notes due September 2020, the 8.205% Notes due January 2027, and the 6.25% Notes due September 2040 (collectively, the “Aon Corp Notes”). Aon Corporation is a 100% indirectly owned subsidiary of Aon plc. All guarantees of Aon plc are full and unconditional. There are no other subsidiaries of Aon plc that are guarantors of the Aon Corp Notes.
In addition, Aon Corporation entered into an agreement pursuant to which it agreed to guarantee the obligations of Aon plc arising under the 4.25% Notes due 2042 exchanged for Aon Corporation’s outstanding 8.205% Notes due January 2027, and also agreed to guarantee the obligations of Aon plc arising under the 4.45% Notes due 2043, the 4.00% Notes due November 2023, the 2.875% Notes due May 2026, the 3.50% Notes due June 2024, the 4.60% Notes due June 2044, the 4.75% Notes due May 2045, the 2.80% Notes due March 2021, and the 3.875% Notes due December 2025 (collectively, the “Aon plc Notes”). In each case, the guarantee of Aon Corporation is full and unconditional. There are no subsidiaries of Aon plc, other than Aon Corporation, that are guarantors of the Aon plc Notes. As a result of the existence of these guarantees, the Company has elected to present the financial information set forth in this footnote in accordance with Rule 3-10 of Regulation S-X.
The following tables set forth Condensed Consolidating Statements of Income for the three and nine months ended September 30, 2017 and 2016, Condensed Consolidating Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016, Condensed Consolidating Statements of Financial Position as of September 30, 2017 and December 31, 2016, and Condensed Consolidating Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 in accordance with Rule 3-10 of Regulation S-X. The condensed consolidating financial information includes the accounts of Aon plc, the accounts of Aon Corporation, and the combined accounts of the non-guarantor subsidiaries. The condensed consolidating financial statements are presented in all periods as a merger under common control, with Aon plc presented as the parent company in all periods prior and subsequent to the Redomestication. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions.
As described in Note 1 “Basis of Presentation,” and consistent with the Company’s Condensed Consolidated Financial Statements, the following tables present the financial results of the Divested Business as discontinued operations for all periods presented within non-guarantor Subsidiaries. The impact of intercompany transactions have been reflected within continuing operations in the Condensed Consolidating Financial Statements.
Condensed Consolidating Statement of Income
 
 
Three months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
2,340

 
$

 
$
2,340

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
25

 
20

 
1,374

 

 
1,419

Information technology
 

 

 
109

 

 
109

Premises
 

 

 
89

 

 
89

Depreciation of fixed assets
 

 

 
40

 

 
40

Amortization and impairment of intangible assets
 

 

 
101

 

 
101

Other general expenses (income)
 
1

 
1

 
315

 

 
317

Total operating expenses
 
26

 
21

 
2,028

 

 
2,075

Operating income (loss)
 
(26
)
 
(21
)
 
312

 

 
265

Interest income
 

 
18

 

 
(8
)
 
10

Interest expense
 
(53
)
 
(24
)
 
(1
)
 
8

 
(70
)
Intercompany interest income (expense)
 
3

 
(135
)
 
132

 

 

Intercompany other income (expense)
 
291

 
(271
)
 
(20
)
 

 

Other income (expense)
 
(2
)
 
14

 
(17
)
 

 
(5
)
Income (loss) from continuing operations before income taxes
 
213

 
(419
)
 
406

 

 
200

Income tax benefit (expense)
 
(8
)
 
(81
)
 
93

 

 
4

Net income (loss) from continuing operations
 
221

 
(338
)
 
313

 

 
196

Income (loss) from discontinued operations, net of tax
 

 

 
(4
)
 

 
(4
)
Net income (loss) before equity in earnings of subsidiaries
 
221

 
(338
)
 
309

 

 
192

Equity in earnings of subsidiaries, net of tax
 
(36
)
 
122

 
(216
)
 
130

 

Net income
 
185

 
(216
)
 
93

 
130

 
192

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
$
185

 
$
(216
)
 
$
86

 
$
130

 
$
185


Condensed Consolidating Statement of Income
 
 
Three months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
2,201

 
$

 
$
2,201

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
25

 
4

 
1,271

 

 
1,300

Information technology
 

 

 
99

 

 
99

Premises
 

 

 
86

 

 
86

Depreciation of fixed assets
 

 

 
39

 

 
39

Amortization and impairment of intangible assets
 

 

 
42

 

 
42

Other general expenses (income)
 
(1
)
 
3

 
265

 

 
267

Total operating expenses
 
24

 
7

 
1,802

 

 
1,833

Operating income (loss)
 
(24
)
 
(7
)
 
399

 

 
368

Interest income
 

 
4

 
5

 
(8
)
 
1

Interest expense
 
(51
)
 
(24
)
 
(3
)
 
8

 
(70
)
Intercompany interest income (expense)
 
3

 
(135
)
 
132

 

 

Intercompany other income (expense)
 
328

 
(277
)
 
(51
)
 

 

Other income (expense)
 
(5
)
 
1

 
11

 
3

 
10

Income (loss) from continuing operations before income taxes
 
251

 
(438
)
 
493

 
3

 
309

Income tax benefit (expense)
 
13

 
(93
)
 
105

 

 
25

Net income (loss) from continuing operations
 
238

 
(345
)
 
388

 
3

 
284

Income (loss) from discontinued operations, net of tax
 

 

 
42

 

 
42

Net income (loss) before equity in earnings of subsidiaries
 
238

 
(345
)
 
430

 
3

 
326

Equity in earnings of subsidiaries, net of tax
 
78

 
225

 
(120
)
 
(183
)
 

Net income
 
316

 
(120
)
 
310

 
(180
)
 
326

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
$
316

 
$
(120
)
 
$
303

 
$
(180
)
 
$
319

 

Condensed Consolidating Statement of Income
 
 
Nine months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
7,089

 
$

 
$
7,089

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
85

 
31

 
4,221

 

 
4,337

Information technology
 

 

 
295

 

 
295

Premises
 

 

 
259

 

 
259

Depreciation of fixed assets
 

 

 
148

 

 
148

Amortization and impairment of intangible assets
 

 

 
604

 

 
604

Other general expenses (income)
 
10

 
(3
)
 
949

 

 
956

Total operating expenses
 
95

 
28

 
6,476

 

 
6,599

Operating income (loss)
 
(95
)
 
(28
)
 
613

 

 
490

Interest income
 

 
35

 

 
(15
)
 
20

Interest expense
 
(144
)
 
(71
)
 
(11
)
 
15

 
(211
)
Intercompany interest income (expense)
 
10

 
(407
)
 
397

 

 

Intercompany other income (expense)
 
189

 
(280
)
 
91

 

 

Other income (expense)
 
(25
)
 
22

 
(35
)
 
18

 
(20
)
Income (loss) from continuing operations before income taxes
 
(65
)
 
(729
)
 
1,055

 
18

 
279

Income tax benefit (expense)
 
(30
)
 
(198
)
 
89

 

 
(139
)
Net income (loss) from continuing operations
 
(35
)
 
(531
)
 
966

 
18

 
418

Income (loss) from discontinued operations, net of tax
 

 

 
857

 

 
857

Net income (loss) before equity in earnings of subsidiaries
 
(35
)
 
(531
)
 
1,823

 
18

 
1,275

Equity in earnings of subsidiaries, net of tax
 
1,262

 
1,028

 
497

 
(2,787
)
 

Net income
 
1,227

 
497

 
2,320

 
(2,769
)
 
1,275

Less: Net income attributable to noncontrolling interests
 

 

 
30

 

 
30

Net income (loss) attributable to Aon shareholders
 
$
1,227

 
$
497

 
$
2,290

 
$
(2,769
)
 
$
1,245


Condensed Consolidating Statement of Income
 
 
Nine months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
6,759

 
$

 
$
6,759

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
76

 
10

 
3,955

 

 
4,041

Information technology
 

 

 
281

 

 
281

Premises
 

 

 
257

 

 
257

Depreciation of fixed assets
 

 

 
118

 

 
118

Amortization and impairment of intangible assets
 

 

 
117

 

 
117

Other general expenses (income)
 
5

 
7

 
758

 

 
770

Total operating expenses
 
81

 
17

 
5,486

 

 
5,584

Operating income (loss)
 
(81
)
 
(17
)
 
1,273

 

 
1,175

Interest income
 

 
13

 
14

 
(21
)
 
6

Interest expense
 
(145
)
 
(78
)
 
(10
)
 
21

 
(212
)
Intercompany interest income (expense)
 
10

 
(405
)
 
395

 

 

Intercompany other income (expense)
 
217

 
(292
)
 
75

 

 

Other income (expense)
 
(3
)
 
(8
)
 
39

 
(1
)
 
27

Income (loss) from continuing operations before income taxes
 
(2
)
 
(787
)
 
1,786

 
(1
)
 
996

Income tax benefit (expense)
 
(33
)
 
(219
)
 
379

 

 
127

Net income (loss) from continuing operations
 
31

 
(568
)
 
1,407

 
(1
)
 
869

Income (loss) from discontinued operations, net of tax
 

 

 
102

 

 
102

Net income (loss) before equity in earnings of subsidiaries
 
31

 
(568
)
 
1,509

 
(1
)
 
971

Equity in earnings of subsidiaries, net of tax
 
914

 
836

 
268

 
(2,018
)
 

Net income
 
945

 
268

 
1,777

 
(2,019
)
 
971

Less: Net income attributable to noncontrolling interests
 

 

 
27

 

 
27

Net income (loss) attributable to Aon shareholders
 
$
945

 
$
268

 
$
1,750

 
$
(2,019
)
 
$
944


Condensed Consolidating Statement of Comprehensive Income
 
 
Three months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
185

 
$
(216
)
 
$
93

 
$
130

 
$
192

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
185

 
(216
)
 
86

 
130

 
185

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
3

 
8

 

 
11

Foreign currency translation adjustments
 

 

 
243

 

 
243

Post-retirement benefit obligation
 

 
7

 
11

 

 
18

Total other comprehensive income (loss)
 

 
10

 
262

 

 
272

Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
265

 
245

 
255

 
(765
)
 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 
7

 

 
7

Total other comprehensive income (loss) attributable to Aon shareholders
 
265

 
255

 
510

 
(765
)
 
265

Comprehensive income (loss) attributable to Aon shareholders
 
$
450

 
$
39

 
$
596

 
$
(635
)
 
$
450

Condensed Consolidating Statement of Comprehensive Income
 
 
Three months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
316

 
$
(120
)
 
$
310

 
$
(180
)
 
$
326

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
316

 
(120
)
 
303

 
(180
)
 
319

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
1

 
(1
)
 

 

Foreign currency translation adjustments
 

 
1

 
(87
)
 
(3
)
 
(89
)
Post-retirement benefit obligation
 

 
7

 
11

 

 
18

Total other comprehensive income (loss)
 

 
9

 
(77
)
 
(3
)
 
(71
)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
(68
)
 
(83
)
 
(74
)
 
225

 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 

 

 

Total other comprehensive income (loss) attributable to Aon shareholders
 
(68
)
 
(74
)
 
(151
)
 
222

 
(71
)
Comprehensive income (loss) attributable to Aon shareholders
 
$
248

 
$
(194
)
 
$
152

 
$
42

 
$
248


Condensed Consolidating Statement of Comprehensive Income
 
 
Nine months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
1,227

 
$
497

 
$
2,320

 
$
(2,769
)
 
$
1,275

Less: Net income attributable to noncontrolling interests
 

 

 
30

 

 
30

Net income (loss) attributable to Aon shareholders
 
1,227

 
497

 
2,290

 
(2,769
)
 
1,245

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
3

 
10

 

 
13

Foreign currency translation adjustments
 

 

 
452

 
(18
)
 
434

Post-retirement benefit obligation
 

 
23

 
33

 

 
56

Total other comprehensive income (loss)
 

 
26

 
495

 
(18
)
 
503

Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
518

 
480

 
506

 
(1,504
)
 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 
3

 

 
3

Total other comprehensive income (loss) attributable to Aon shareholders
 
518

 
506

 
998

 
(1,522
)
 
500

Comprehensive income (loss) attributable to Aon shareholders
 
$
1,745

 
$
1,003

 
$
3,288

 
$
(4,291
)
 
$
1,745

Condensed Consolidating Statement of Comprehensive Income
 
 
Nine months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
945

 
$
268

 
$
1,777

 
$
(2,019
)
 
$
971

Less: Net income attributable to noncontrolling interests
 

 

 
27

 

 
27

Net income (loss) attributable to Aon shareholders
 
945

 
268

 
1,750

 
(2,019
)
 
944

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
1

 
(12
)
 

 
(11
)
Foreign currency translation adjustments
 
(2
)
 
22

 
(248
)
 
1

 
(227
)
Post-retirement benefit obligation
 

 
23

 
(155
)
 

 
(132
)
Total other comprehensive income (loss)
 
(2
)
 
46

 
(415
)
 
1

 
(370
)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
(369
)
 
(425
)
 
(379
)
 
1,173

 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 

 

 

Total other comprehensive income (loss) attributable to Aon shareholders
 
(371
)
 
(379
)
 
(794
)
 
1,174

 
(370
)
Comprehensive income (loss) attributable to Aon shareholders
 
$
574

 
$
(111
)
 
$
956

 
$
(845
)
 
$
574



Condensed Consolidating Statement of Financial Position
 
 
As of September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
ASSETS
 
 

 
 

 
 

 
 

 
 

CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
3,110

 
$
802

 
$
(3,163
)
 
$
749

Short-term investments
 

 
1,467

 
173

 

 
1,640

Receivables, net
 

 
2

 
2,066

 

 
2,068

Fiduciary assets
 

 

 
9,292

 

 
9,292

Intercompany receivables
 
110

 
4,860

 
12,436

 
(17,406
)
 

Other current assets
 

 
37

 
481

 

 
518

Current assets of discontinued operations
 

 

 

 

 

Total Current Assets
 
110

 
9,476

 
25,250

 
(20,569
)
 
14,267

Goodwill
 

 

 
7,888

 

 
7,888

Intangible assets, net
 

 

 
1,341

 

 
1,341

Fixed assets, net
 

 

 
545

 

 
545

Deferred tax assets
 
135

 
664

 
173

 
(407
)
 
565

Intercompany receivables
 
391

 
261

 
8,728

 
(9,380
)
 

Prepaid pension
 

 
5

 
1,015

 

 
1,020

Other non-current assets
 
1

 
49

 
248

 

 
298

Investment in subsidiary
 
11,900

 
17,748

 
509

 
(30,157
)
 

Non-current assets of discontinued operations
 

 

 

 

 

TOTAL ASSETS
 
$
12,537

 
$
28,203

 
$
45,697

 
$
(60,513
)
 
$
25,924

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

LIABILITIES
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
2,929

 
$
37

 
$
1,785

 
$
(3,163
)
 
$
1,588

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

 

 
305

 

 
305

Fiduciary liabilities
 

 

 
9,292

 

 
9,292

Intercompany payables
 
147

 
15,951

 
1,308

 
(17,406
)
 

Other current liabilities
 
24

 
54

 
1,211

 

 
1,289

Current liabilities of discontinued operations
 

 

 

 

 

Total Current Liabilities
 
3,100

 
16,042

 
13,901

 
(20,569
)
 
12,474

Long-term debt
 
4,247

 
1,414

 
1

 

 
5,662

Deferred tax liabilities
 

 

 
490

 
(407
)
 
83

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

 
1,234

 
378

 

 
1,612

Intercompany payables
 

 
8,894

 
486

 
(9,380
)
 

Other non-current liabilities
 
15

 
110

 
721

 

 
846

Non-current liabilities of discontinued operations
 

 

 

 

 

TOTAL LIABILITIES
 
7,362

 
27,694

 
15,977

 
(30,356
)
 
20,677

 
 
 
 
 
 
 
 
 
 
 
TOTAL AON SHAREHOLDERS’ EQUITY
 
5,175

 
509

 
29,648

 
(30,157
)
 
5,175

Noncontrolling interests
 

 

 
72

 

 
72

TOTAL EQUITY
 
5,175

 
509

 
29,720

 
(30,157
)
 
5,247

TOTAL LIABILITIES AND EQUITY
 
$
12,537

 
$
28,203

 
$
45,697

 
$
(60,513
)
 
$
25,924

Condensed Consolidating Statement of Financial Position
 
 
As of December 31, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
ASSETS
 
 

 
 

 
 

 
 

 
 

CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
1,633

 
$
655

 
$
(1,862
)
 
$
426

Short-term investments
 

 
140

 
150

 

 
290

Receivables, net
 

 
3

 
2,103

 

 
2,106

Fiduciary assets
 

 

 
8,959

 

 
8,959

Intercompany receivables
 
105

 
1,880

 
9,825

 
(11,810
)
 

Other current assets
 

 
25

 
222

 

 
247

Current assets of discontinued operations
 

 

 
1,118

 

 
1,118

Total Current Assets
 
105

 
3,681

 
23,032

 
(13,672
)
 
13,146

Goodwill
 

 

 
7,410

 

 
7,410

Intangible assets, net
 

 

 
1,890

 

 
1,890

Fixed assets, net
 

 

 
550

 

 
550

Deferred tax assets
 
134

 
726

 
171

 
(706
)
 
325

Intercompany receivables
 
366

 
261

 
8,711

 
(9,338
)
 

Prepaid pension
 

 
5

 
853

 

 
858

Other non-current assets
 
2

 
119

 
239

 

 
360

Investment in subsidiary
 
10,107

 
17,131

 
(356
)
 
(26,882
)
 

Non-current assets of discontinued operations
 

 

 
2,076

 

 
2,076

TOTAL ASSETS
 
$
10,714

 
$
21,923

 
$
44,576

 
$
(50,598
)
 
$
26,615

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

LIABILITIES
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
585

 
$
44

 
$
2,837

 
$
(1,862
)
 
$
1,604

Short-term debt and current portion of long-term debt
 
279

 
50

 
7

 

 
336

Fiduciary liabilities
 

 

 
8,959

 

 
8,959

Intercompany payables
 
142

 
10,399

 
1,269

 
(11,810
)
 

Other current liabilities
 

 
63

 
593

 

 
656

Current liabilities of discontinued operations
 

 

 
940

 

 
940

Total Current Liabilities
 
1,006

 
10,556

 
14,605

 
(13,672
)
 
12,495

Long-term debt
 
4,177

 
1,413

 
279

 

 
5,869

Deferred tax liabilities
 

 

 
759

 
(658
)
 
101

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

 
1,356

 
404

 

 
1,760

Intercompany payables
 

 
8,877

 
461

 
(9,338
)
 

Other non-current liabilities
 
8

 
77

 
634

 

 
719

Non-current liabilities of discontinued operations
 

 

 
139

 

 
139

TOTAL LIABILITIES
 
5,191

 
22,279

 
17,281

 
(23,668
)
 
21,083

 
 
 
 
 
 
 
 
 
 
 
TOTAL AON SHAREHOLDERS’ EQUITY
 
5,523

 
(356
)
 
27,238

 
(26,930
)
 
5,475

Noncontrolling interests
 

 

 
57

 

 
57

TOTAL EQUITY
 
5,523

 
(356
)
 
27,295

 
(26,930
)
 
5,532

TOTAL LIABILITIES AND EQUITY
 
$
10,714

 
$
21,923

 
$
44,576

 
$
(50,598
)
 
$
26,615


Condensed Consolidating Statement of Cash Flows
 
 
Nine months ended September 30, 2017
 
 
Aon
 
Aon
 
Other
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
 
 

 
 

 
 

 
 

 
 

Cash provided by (used for) operating activities - continuing operations
 
$
(135
)
 
$
999

 
$
987

 
$
(1,562
)
 
$
289

Cash provided by operating activities - discontinued operations
 

 

 
64

 

 
64

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
 
(135
)
 
999

 
1,051

 
(1,562
)
 
353

 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Proceeds from investments
 

 
576

 
11

 
(544
)
 
43

Payments for investments
 
(16
)
 
(25
)
 
(571
)
 
557

 
(55
)
Net purchases of short-term investments - non-fiduciary
 

 
(1,328
)
 
(16
)
 

 
(1,344
)
Acquisition of businesses, net of cash acquired
 

 
1

 
(173
)
 

 
(172
)
Sale of businesses, net of cash sold
 

 

 
4,194

 

 
4,194

Capital expenditures
 

 

 
(125
)
 

 
(125
)
Cash provided by (used for) investing activities - continuing operations
 
(16
)
 
(776
)
 
3,320

 
13

 
2,541

Cash used for investing activities - discontinued operations
 

 

 
(19
)
 

 
(19
)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
 
(16
)
 
(776
)
 
3,301

 
13

 
2,522

 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Share repurchase
 
(1,888
)
 

 

 

 
(1,888
)
Advances from (to) affiliates
 
2,722

 
1,304

 
(4,274
)
 
248

 

Issuance of shares for employee benefit plans
 
(118
)
 

 

 

 
(118
)
Issuance of debt
 
544

 
1,100

 
7

 

 
1,651

Repayment of debt
 
(835
)
 
(1,150
)
 
(13
)
 

 
(1,998
)
Cash dividends to shareholders
 
(274
)
 

 

 

 
(274
)
Noncontrolling interests and other financing activities
 

 

 
(21
)
 

 
(21
)
Cash provided by (used for) financing activities - continuing operations
 
151

 
1,254

 
(4,301
)
 
248

 
(2,648
)
Cash used for financing activities - discontinued operations
 

 

 

 

 

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
 
151

 
1,254

 
(4,301
)
 
248

 
(2,648
)
 
 
 
 
 
 
 
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 

 

 
91

 

 
91

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 

 
1,477

 
142

 
(1,301
)
 
318

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (1)
 

 
1,633

 
660

 
(1,862
)
 
431

CASH AND CASH EQUIVALENTS AT END OF PERIOD (2)
 
$

 
$
3,110

 
$
802

 
$
(3,163
)
 
$
749

(1)
Includes $5 million of discontinued operations at December 31, 2016.
(2)
There was no cash held by discontinued operations at September 30, 2017.

Condensed Consolidating Statement of Cash Flows
 
 
Nine months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions) 
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
 
 

 
 

 
 

 
 

 
 

Cash provided by (used for) operating activities - continuing operations
 
$
219

 
$
(664
)
 
$
1,597

 
$

 
$
1,152

Cash provided by operating activities - discontinued operations
 

 

 
323

 

 
323

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
 
219

 
(664
)
 
1,920

 

 
1,475

 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Proceeds from investments
 

 
19

 
12

 

 
31

Payments for investments
 

 
(25
)
 
(22
)
 

 
(47
)
Net sales of short-term investments - non-fiduciary
 

 
(99
)
 
(9
)
 

 
(108
)
Acquisition of businesses, net of cash acquired
 

 

 
(198
)
 

 
(198
)
Sale of businesses, net of cash sold
 

 

 
104

 

 
104

Capital expenditures
 

 

 
(107
)
 

 
(107
)
Cash provided by (used for) investing activities - continuing operations
 

 
(105
)
 
(220
)
 

 
(325
)
Cash used for investing activities - discontinued operations
 

 

 
(46
)
 

 
(46
)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
 

 
(105
)
 
(266
)
 

 
(371
)
 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Share repurchase
 
(1,037
)
 

 

 

 
(1,037
)
Advances from (to) affiliates
 
166

 
356

 
(670
)
 
148

 

Issuance of shares for employee benefit plans
 
(70
)
 

 

 

 
(70
)
Issuance of debt
 
1,588

 
1,141

 

 

 
2,729

Repayment of debt
 
(608
)
 
(1,692
)
 
(8
)
 

 
(2,308
)
Cash dividends to shareholders
 
(258
)
 

 

 

 
(258
)
Noncontrolling interests and other financing activities
 

 

 
(71
)
 

 
(71
)
Cash provided by (used for) financing activities - continuing operations
 
(219
)
 
(195
)
 
(749
)
 
148

 
(1,015
)
Cash used for financing activities - discontinued operations
 

 

 

 

 

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
 
(219
)
 
(195
)
 
(749
)
 
148

 
(1,015
)
 
 
 
 
 
 
 
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 

 

 
10

 

 
10

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 

 
(964
)
 
915

 
148

 
99

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR(1)
 

 
2,083

 
1,242

 
(2,941
)
 
384

CASH AND CASH EQUIVALENTS AT END OF PERIOD(2)
 
$

 
$
1,119

 
$
2,157

 
$
(2,793
)
 
$
483


(1)
Includes $2 million of discontinued operations at December 31, 2015.
(2)
Includes $3 million of discontinued operations at September 30, 2016.
Accounting Principles and Practices (Policies)
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
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.
Adoption of New Accounting Standards
Share-based Compensation
In March 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  The new guidance requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period.  Further, excess tax benefits are required to be classified along with other income tax cash flows as an operating activity.  Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method.
The Company adopted this guidance on January 1, 2017, with the following impacts:
An increase to Deferred tax assets on the Condensed Consolidated Statement of Financial Position of approximately $49 million through a cumulative-effect adjustment to Retained earnings for excess tax benefits not previously recognized, and
The recognition of $5 million, or $0.02 per share, income tax benefit from continuing operations related to excess tax benefits in the Condensed Consolidated Statement of Income for the three months ended September 30, 2017, and $53 million, or $0.20 per share, for the nine months ended September 30, 2017.
Adoption of the guidance was applied prospectively on the Condensed Consolidated Statement of Cash Flows and prior period comparable information was not restated. Other elements of the guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
Accounting Standards Issued But Not Yet Adopted
Targeted Improvements to Accounting for Hedging Activities
In August 2017, the FASB issued new accounting guidance on targeted improvements to accounting for hedging activities. The new guidance amends its hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the effect of a hedging instrument to be presented in the same income statement line as the hedged item. An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the period of adoption. Changes to income statement presentation and financial statement disclosures will be applied prospectively. The new guidance is effective for Aon in the first quarter of 2019 and early adoption is permitted. The Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and the period in which it plans to adopt.  
Presentation of Net Periodic Pension and Postretirement Benefit Costs
In March 2017, the FASB issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. An entity will apply the new guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Condensed Consolidated Statement of Income and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension costs and net periodic postretirement benefit cost in assets. The new guidance allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The new guidance is effective for Aon in the first quarter of 2018. The adoption of this guidance will have no impact on the total results of the Company.  The presentation of results will reflect a change in Operating income offset by an equal change in Other income (expense) for the period.
Simplifying the Test for Goodwill Impairment
In January 2017, the FASB issued new accounting guidance on simplifying the test for goodwill impairment. Currently the standard requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. The new guidance removes Step 2. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. An entity will apply the new guidance on a prospective basis. The new guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted for annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the period of adoption and the impact that the standard will have on the Condensed Consolidated Financial Statements.
Income Tax Consequences of Intercompany Transactions
In October 2016, the FASB issued new accounting guidance on the income tax consequences of intra-entity asset transfers other than inventory.  The guidance will require that the seller and buyer recognize the consolidated current and deferred income tax consequences of a transaction in the period the transaction occurs rather than deferring to a future period and recognizing those consequences when the asset has been sold to an outside party or otherwise recovered through use (i.e., depreciated, amortized, or impaired).  An entity will apply the new guidance on a modified retrospective basis with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption.  The new guidance is effective for Aon in the first quarter of 2018, and the Company is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements. 
Statement of Cash Flows
In August 2016, the FASB issued new accounting guidance on the classification of certain cash receipts and cash payments. Under the new guidance, an entity will no longer have discretion to choose the classification for a number of transactions, including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard will be effective for the Company in the first quarter of 2018, with early adoption permitted. An entity will apply the new guidance through retrospective adjustment to all periods presented. The retrospective approach includes a practical expedient that entities may apply should retrospective adoption be impracticable; in this case, the amendments for these issues may be applied prospectively as of the earliest date practicable. The guidance will not have a material impact on the Company’s Condensed Consolidated Statements of Cash Flows.
Credit Losses
In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments. The new guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements, as well as the method of transition and period of adoption.
Leases
In February 2016, the FASB issued new accounting guidance on leases, which requires lessees to recognize assets and liabilities for most leases. Under the new guidance, a lessee should recognize in the Condensed Consolidated Statement of Financial Position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from currently effective U.S. GAAP. The new standard will be effective for the Company in the first quarter of 2019, with early adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Aon is currently evaluating the impact the standard will have on the Condensed Consolidated Financial Statements and period of adoption.
Financial Assets and Liabilities
In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. An entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values, including disclosure requirements, should be applied prospectively to equity investments that exist as of the date of adoption of the guidance. The guidance is effective for the Company in the first quarter of 2018 and early adoption is permitted. Aon is currently evaluating the impact that the standard will have on the Condensed Consolidated Financial Statements and period of adoption.
Revenue Recognition
In May 2014, the FASB issued a new accounting standard on revenue from contracts with customers, which, when effective, will supersede nearly all existing revenue recognition guidance under U.S. GAAP.  The core principal of the standard is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The standard is effective for Aon in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. Two methods of transition are permitted upon adoption: full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing a comparable view across all periods presented. Under the modified retrospective method, prior periods would not be restated. Rather, revenue and other disclosures for pre-2018 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. The Company will adopt this standard in the first quarter of 2018 using a modified retrospective adoption approach.
A preliminary assessment to determine the impacts of the new accounting standard has been performed. The Company is currently implementing accounting and operational processes and controls to ensure compliance with the new standard, but is still evaluating the quantitative impacts the standard will have on its financial statements.
However, the more significant impacts of the new standard to the Company are anticipated to be as follows:
The Company currently recognizes revenue either at a point in time or over a period of time based on the transfer of value to customers or as the remuneration becomes determinable. Under the new standard, the revenue related to certain brokerage activities recognized over a period of time will be recognized on the effective date of the associated policies when control of the policy transfers to the customer. As a result, revenue from these arrangements will be recognized in earlier periods under the new standard in comparison to the current guidance and will change the timing and amount of revenue recognized for annual and interim periods. This change is anticipated to result in a significant shift in interim revenue for Reinsurance Solutions and certain other brokerage services. The Company is currently assessing the timing and measurement of revenue recognition under the new standard for certain other services, including advisory, where limited impacts are anticipated.
Additionally, the new standard provides guidance on accounting for certain revenue-related costs including when to capitalize costs associated with obtaining and fulfilling a contract. The majority of these costs are currently expensed as incurred under existing U.S. GAAP. Assets recognized for the costs to obtain a contract, which includes certain sales commissions, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, considering anticipated renewals when applicable. For situations where the renewal period is one year or less and renewal costs are commensurate with the initial contract, the Company plans to apply a practical expedient and recognize the costs of obtaining a contract as an expense when incurred. Assets recognized for the costs to fulfill a contract, which includes internal costs related to pre-placement broking activities, will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is generally expected to be less than one year. The Company is quantifying the nature and amount of costs that would qualify for capitalization and the amount of amortization that will be recognized in each period.
The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates.  To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures.  The Company does not enter into derivative transactions for trading or speculative purposes.
Foreign Exchange Risk Management
The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers denominated in a currency that differs from its functional currency, or enters into other transactions that are denominated in a currency other than its functional currency.  The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows.  These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income.
The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 30-day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income.
The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments:
Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. 
Equity investments consist of domestic and international equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities.
Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Consolidated Financial Statements.
Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities.
Debt is carried at outstanding principal balance, less any unamortized discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements.
Discontinued Operations (Tables)
Discontinued Operations
The following table presents the financial results of the Divested Business (in millions):
 
 
Three months ended September 30
 
Nine months ended September 30

 
2017
 
2016
 
2017
 
2016
Revenue
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$
559

 
$
698

 
$
1,606

Expenses
 
 
 
 
 
 
 
 
Total operating expenses
 
14

 
491

 
640

 
1,443

Operating income from discontinued operations
 
(14
)
 
68

 
58

 
163

Other income
 
(1
)
 
(1
)
 
10

 

Income from discontinued operations before income taxes
 
(15
)
 
67

 
68

 
163

Income taxes
 
(6
)
 
25

 
14

 
61

Income from discontinued operations excluding gain, net of tax
 
(9
)
 
42

 
54

 
102

Gain on sale of discontinued operations, net of tax
 
5

 

 
803

 

Income from discontinued operations, net of tax
 
$
(4
)
 
$
42

 
$
857

 
$
102

The following table presents the aggregate carrying amounts of the classes of assets and liabilities presented as discontinued operations within the Company’s Condensed Consolidated Statements of Financial Position (in millions):
 
 
September 30,
2017 (1)
 
December 31,
2016
ASSETS
 
 

 
 

Cash and cash equivalents
 
$

 
$
5

Receivables, net
 

 
483

Fiduciary assets
 

 
526

Goodwill
 

 
1,337

Intangible assets, net
 

 
333

Fixed assets, net
 

 
215

Other assets
 

 
295

TOTAL ASSETS
 
$

 
$
3,194

 
 
 
 
 
LIABILITIES
 
 

 
 

Accounts payable and accrued liabilities
 
$

 
$
197

Fiduciary liabilities
 

 
526

Other liabilities
 

 
356

TOTAL LIABILITIES
 
$

 
$
1,079


(1)
All assets and liabilities associated with the Divested Business were sold on May 1, 2017.
Other Financial Data (Tables)
Other income (expense) consists of the following (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Foreign currency remeasurement gain (loss)
$
(20
)
 
$
3

 
$
(32
)
 
$
(14
)
Gain (loss) on disposal of business

 

 
(2
)
 
41

Equity earnings
2

 
4

 
11

 
7

Gain (loss) on financial instruments
16

 
3

 
6

 
(7
)
Other
(3
)
 

 
(3
)
 

Total
$
(5
)
 
$
10

 
$
(20
)
 
$
27

An analysis of the allowance for doubtful accounts is as follows (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Balance at beginning of period
$
59

 
$
64

 
$
56

 
$
58

Provision charged to Other general expenses
5

 
4

 
16

 
15

Accounts written off, net of recoveries

 
(5
)
 
(10
)
 
(11
)
Foreign currency translation
(5
)
 

 
(3
)
 
1

Balance at end of period
$
59

 
$
63

 
$
59

 
$
63

The components of Other current assets are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Taxes receivable
$
208

 
$
100

Prepaid expenses
158

 
102

Receivables from the Divested Business (1)
124

 

Other
28

 
45

Total
$
518

 
$
247


(1)
Refer to Note 3 “Discontinued Operations” for additional information.
The components of Other non-current assets are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Investments
$
44

 
$
119

Taxes receivable
88

 
82

Other
166

 
159

Total
$
298

 
$
360

The components of Other current liabilities are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Deferred revenue
$
331

 
$
199

Taxes payable (1)
537

 
77

Other
421

 
380

Total
$
1,289

 
$
656


(1)
Includes accrued taxes payable related to the gain on sale of the Divested Business.
The components of Other non-current liabilities are as follows (in millions):
As of
September 30, 2017
 
December 31, 2016
Taxes payable
$
333

 
$
288

Deferred revenue
45

 
49

Leases
145

 
136

Compensation and benefits
61

 
56

Other
262

 
190

Total
$
846

 
$
719

Acquisitions and Dispositions of Businesses (Tables)
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table includes the fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):
 
 
For the nine months ended September 30, 2017
Cash
 
$
164

Deferred and contingent consideration
 
32

Aggregate consideration transferred
 
$
196

 
 
 
Assets acquired:
 
 
Cash and cash equivalents
 
$
7

Receivables, net
 
11

Goodwill
 
121

Intangible assets, net
 
90

Fixed assets, net
 
1

Other assets
 
10

Total assets acquired
 
240

Liabilities assumed:
 
 
Current liabilities
 
18

Other non-current liabilities
 
26

Total liabilities assumed
 
44

Net assets acquired
 
$
196

Restructuring (Tables)
The following table summarizes restructuring and separation costs by type that have been incurred through September 30, 2017 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs may be revised in future periods as these assumptions are updated:
 
 
Three months ended September 30, 2017
 
Nine months ended September 30, 2017
 
Estimated Remaining Costs
 
Estimated Total Cost (1)
Workforce reduction
 
$
52

 
$
257

 
$
46

 
$
303

Technology rationalization (2)
 
12

 
22

 
124

 
146

Lease consolidation (2)
 
4

 
8

 
72

 
80

Asset impairments
 
2

 
26

 
14

 
40

Other costs associated with restructuring and separation (2) (3)
 
32

 
88

 
93

 
181

Total restructuring and related expenses
 
$
102

 
$
401

 
$
349

 
$
750

(1)
Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan.  Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives.
(2)
Contract termination costs included within Technology rationalization for the three and nine months ended September 30, 2017 were $1 million. Contract termination costs included within Lease consolidations for the three and nine months ended September 30, 2017 were $3 million and $8 million, respectively. Contract termination costs included within Other costs associated with restructuring and separation were $1 million for the three and nine months ended September 30, 2017. Total estimated contract termination costs to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, are $10 million, $80 million, and $10 million.
(3)
Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs, and consulting and legal fees. These costs are generally recognized when incurred.
The changes in the Company’s liabilities for the Restructuring Plan as of September 30, 2017 are as follows (in millions):
 
 
Restructuring Plan
Balance as of December 31, 2016
 
$

Expensed
 
369

Cash payments
 
(199
)
Foreign currency translation and other
 
17

Balance as of September 30, 2017
 
$
187

Goodwill and Other Intangible Assets (Tables)
The changes in the net carrying amount of goodwill for the nine months ended September 30, 2017 are as follows (in millions):
Balance as of December 31, 2016
$
7,410

Goodwill related to current year acquisitions
121

Goodwill related to disposals
(1
)
Goodwill related to prior year acquisitions
(6
)
Foreign currency translation
364

Balance as of September 30, 2017
$
7,888

Other intangible assets by asset class are as follows (in millions):
 
September 30, 2017
 
December 31, 2016
 
Gross Carrying Amount
 
Accumulated
Amortization and Impairment
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated
Amortization and Impairment
 
Net Carrying Amount
Customer related and contract based
$
2,104

 
$
1,380

 
$
724

 
$
2,023

 
$
1,198

 
$
825

Tradenames(1)
1,041

 
478

 
563

 
1,027

 
7

 
1,020

Technology and other(1)
384

 
330

 
54

 
347

 
302

 
45

 Total
$
3,529

 
$
2,188

 
$
1,341

 
$
3,397

 
$
1,507

 
$
1,890


(1)
Prior to May 1, 2017, finite lived tradenames were classified within Technology and other. As of December 31, 2016, $29 million of gross carrying amount and $7 million of accumulated amortization related to finite-lived tradenames was reclassified from Technology and other to Tradenames.
The estimated future amortization for finite lived intangible assets as of September 30, 2017 is as follows (in millions):
Remainder of 2017
$
117

2018
376

2019
357

2020
196

2021
89

Thereafter
206

 Total
$
1,341

Debt (Tables)
Schedule of Long-term Debt Instruments [Table Text Block]
The weighted average commercial paper outstanding and its related interest rates are as follows:
 
 
Three months ended September 30
 
Nine months ended September 30
 
 
2017
 
2016
 
2017
 
2016
Weighted average commercial paper outstanding
 
$

 
$
271

 
$
227

 
$
251

Weighted average interest rate of commercial paper outstanding
 
%
 
0.02
%
 
0.18
%
 
0.27
%
Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Condensed Consolidated Statements of Financial Position, is as follows (in millions):
As of
 
September 30, 2017
 
December 31, 2016
Commercial paper outstanding
 
$

 
$
329

Shareholders' Equity (Tables)
Weighted average shares outstanding are as follows (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Basic weighted-average ordinary shares outstanding
255.6

 
267.5

 
260.9

 
269.1

Dilutive effect of potentially issuable shares
1.7

 
2.1

 
2.0

 
1.9

Diluted weighted-average ordinary shares outstanding
257.3

 
269.6

 
262.9

 
271.0

Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):
 
Change in Fair Value of Financial Instruments (1) 
 
Foreign Currency Translation Adjustments
 
Post-Retirement Benefit Obligation (2)
 
Total
Balance at December 31, 2016
$
(37
)
 
$
(1,264
)
 
$
(2,611
)
 
$
(3,912
)
Other comprehensive income (loss) before reclassifications, net
13

 
442

 

 
455

Amounts reclassified from accumulated other comprehensive loss:
 
 


 


 


Amounts reclassified from accumulated other comprehensive income (loss)
(2
)
 
(11
)
 
80

 
67

Tax benefit (expense)
2

 

 
(24
)
 
(22
)
Amounts reclassified from accumulated other comprehensive income (loss), net

 
(11
)
 
56

 
45

Net current period other comprehensive income (loss)
13

 
431

 
56

 
500

Balance at September 30, 2017
$
(24
)
 
$
(833
)
 
$
(2,555
)
 
$
(3,412
)
(1)
Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense), Other general expenses, and Compensation and benefits. See Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivative and hedging activity.
(2)
Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Compensation and benefits.
Employee Benefits (Tables)
Components of net periodic benefit cost for the pension plans
The following table provides the components of the net periodic cost (benefit) recognized in the Condensed Consolidated Statements of Income in Compensation and benefits for Aon’s material U.K., U.S., and other significant international pension plans located in the Netherlands and Canada (in millions):
 
Three months ended September 30
 
U.K.
 
U.S.
 
Other
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Service cost
$

 
$

 
$

 
$

 
$

 
$

Interest cost
31

 
37

 
24

 
28

 
7

 
7

Expected return on plan assets, net of administration expenses
(50
)
 
(58
)
 
(34
)
 
(39
)
 
(13
)
 
(12
)
Amortization of prior-service cost

 

 

 
1

 

 

Amortization of net actuarial loss
8

 
7

 
13

 
12

 
3

 
3

Net periodic cost (benefit)
$
(11
)
 
$
(14
)
 
$
3

 
$
2

 
$
(3
)
 
$
(2
)
Loss on pension settlement

 

 

 

 

 

Total net periodic cost (benefit)
$
(11
)

$
(14
)

$
3


$
2


$
(3
)

$
(2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30
 
U.K.
 
U.S.
 
Other
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Service cost
$

 
$

 
$

 
$

 
$

 
$

Interest cost
91

 
123

 
72

 
83

 
19

 
21

Expected return on plan assets, net of administration expenses
(147
)
 
(187
)
 
(104
)
 
(117
)
 
(35
)
 
(36
)
Amortization of prior-service cost

 
1

 
1

 
2

 

 

Amortization of net actuarial loss
23

 
24

 
38

 
37

 
9

 
8

Net periodic cost (benefit)
$
(33
)
 
$
(39
)
 
$
7

 
$
5

 
$
(7
)
 
$
(7
)
Loss on pension settlement

 
61

 

 

 

 

Total net periodic cost (benefit)
$
(33
)
 
$
22

 
$
7

 
$
5

 
$
(7
)
 
$
(7
)
Share-Based Compensation Plans (Tables)
The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Restricted share units (“RSUs”)
$
42

 
$
40

 
$
143

 
$
136

Performance share awards (“PSAs”)
22

 
24

 
63

 
67

Employee share purchase plans
3

 
2

 
8

 
7

Total share-based compensation expense 
$
67

 
$
66

 
$
214

 
$
210

The following table summarizes the status of the Company’s RSUs (shares in thousands):
 
2017
 
2016
 
Shares
 
Fair Value (1)
 
Shares
 
Fair Value (1)
Non-vested at December 31
6,195

 
$
89

 
7,167

 
$
77

Granted
1,549

 
122

 
2,110

 
101

Vested
(2,294
)
 
82

 
(2,729
)
 
70

Forfeited
(590
)
 
92

 
(333
)
 
81

Non-vested at September 30
4,860

 
$
102

 
6,215

 
$
88

(1)
Represents per share weighted average fair value of award at date of grant.
Information as of September 30, 2017 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the nine months ended September 30, 2017 and the years ended December 31, 2016 and 2015, respectively, is as follows (shares in thousands and dollars in millions, except fair value):
 
September 30,
2017
 
December 31,
2016
 
December 31,
2015
Target PSAs granted during period
548

 
752

 
967

Weighted average fair value per share at date of grant
$
114

 
$
100

 
$
96

Number of shares that would be issued based on current performance levels
544

 
663

 
1,362

Unamortized expense, based on current performance levels
$
51

 
$
27

 
$
11

Derivatives and Hedging (Tables)
The notional and fair values of derivative instruments are as follows (in millions):
 
Notional Amount
 
Derivative Assets (1)
 
Derivative Liabilities (2)
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
Foreign exchange contracts
 

 
 

 
 

 
 

 
 

 
 

Accounted for as hedges
$
711

 
$
758

 
$
31

 
$
14

 
$
3

 
$
13

Not accounted for as hedges (3)
245

 
189

 

 
1

 
2

 
1

   Total
$
956

 
$
947

 
$
31

 
$
15

 
$
5

 
$
14

(1)
Included within Other current assets ($6 million at September 30, 2017 and $6 million at December 31, 2016) or Other non-current assets ($25 million at September 30, 2017 and $9 million at December 31, 2016).
(2)
Included within Other current liabilities ($3 million at September 30, 2017 and $7 million at December 31, 2016) or Other non-current liabilities ($2 million at September 30, 2017 and $7 million at December 31, 2016).
(3)
These contracts typically are for 30 day durations and are executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date.
Offsetting of derivatives assets are as follows (in millions):
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Assets Presented in the Statement of Financial Position (1)
Derivatives accounted for as hedges
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
Foreign exchange contracts
$
31

 
$
14

 
$

 
$
(1
)
 
$
31

 
$
13

(1)
Included within Other current assets ($6 million at September 30, 2017 and $4 million at December 31, 2016) or Other non-current assets ($25 million at September 30, 2017 and $9 million at December 31, 2016).
Offsetting of derivative liabilities are as follows (in millions):
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Liabilities Presented in the Statement of Financial Position (1)
 Derivatives accounted for as hedges
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
Foreign exchange contracts
 
$
3

 
$
13

 
$

 
$
(1
)
 
$
3

 
$
12


(1)
Included within Other current liabilities ($2 million at September 30, 2017 and $5 million at December 31, 2016) or Other non-current liabilities ($1 million at September 30, 2017 and $7 million at December 31, 2016).
The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017 and 2016 are as follows (in millions):
Cash Flow Hedge - Foreign Exchange Contracts
 
Location of Eventual Reclassification from Accumulated Other Comprehensive Loss
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
Three months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$

 
$
3

 
$

 
$
8

 
$
11

2016
 
10

 
(4
)
 

 
(7
)
 
(1
)
Cash Flow Hedge - Foreign Exchange Contracts
 
Location of Eventual Reclassification from Accumulated Other Comprehensive Loss
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
Nine months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$
9

 
$
5

 
$

 
$
4

 
$
18

2016
 
8

 
(9
)
 

 
(18
)
 
(19
)
Cash Flow Hedge - Foreign Exchange Contracts
 
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
Three months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$
1

 
$
(1
)
 
$

 
$
(3
)
 
$
(3
)
2016
 
1

 
(1
)
 

 
(2
)
 
(2
)
Cash Flow Hedge - Foreign Exchange Contracts
 
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
Nine months ended September 30
 
Compensation and Benefits
 
Other General Expenses
 
Interest Expense
 
Other Income (Expense)
 
Total
2017
 
$
14

 
$
(3
)
 
$
(1
)
 
$
(7
)
 
$
3

2016
 
2

 
(2
)
 
(1
)
 
(5
)
 
(6
)

Fair Value Measurements and Financial Instruments (Tables)
The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016 (in millions):
 
 
 
Fair Value Measurements Using
 
Balance at September 30, 2017
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
Assets:
 

 
 

 
 

 
 

Money market funds (1)
$
3,091

 
$
3,091

 
$

 
$

Other investments:
 

 
 

 
 

 
 

Government bonds
1

 

 
1

 

Equity investments
11

 
7

 
4

 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
31

 

 
31

 

Liabilities:
 

 
 

 
 

 
 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
5

 

 
5

 

(1)
Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity.
(2)
Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity.
 
 
 
Fair Value Measurements Using
 
Balance at December 31, 2016
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
Assets:
 

 
 

 
 

 
 

Money market funds (1)
$
1,371

 
$
1,371

 
$

 
$

Other investments:
 

 
 

 
 

 
 

Government bonds
1

 

 
1

 

Equity investments
9

 
6

 
3

 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
15

 

 
15

 

Liabilities:
 

 
 

 
 

 
 

Derivatives: (2)
 

 
 

 
 

 
 

Foreign exchange contracts
14

 

 
14

 

(1)
Included within Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. 
(2)
Refer to Note 14 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity.
The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ (in millions):
 
September 30, 2017
 
December 31, 2016
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Current portion of long-term debt (1)
$
305

 
$
309

 
$

 
$

Long-term debt
5,662

 
6,227

 
5,869

 
6,264


(1)
Excludes commercial paper program
Segment Information (Tables)
Schedule of reconciliation of segment income before tax to income from continuing operations before income taxes
Revenue from continuing operations for each of the Company’s principal product and service lines is as follows (in millions):
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
Commercial Risk Solutions
$
917

 
$
884

 
$
2,943

 
$
2,835

Reinsurance Solutions
355

 
329

 
1,070

 
1,032

Retirement Solutions
491

 
466

 
1,266

 
1,266

Health Solutions
293

 
265

 
977

 
838

Data & Analytic Services
289

 
260

 
842

 
794

Elimination
(5
)
 
(3
)
 
(9
)
 
(6
)
Total revenue
$
2,340

 
$
2,201

 
$
7,089

 
$
6,759

Guarantee of Registered Securities (Tables)
Condensed Consolidating Statement of Income
 
 
Three months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
2,340

 
$

 
$
2,340

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
25

 
20

 
1,374

 

 
1,419

Information technology
 

 

 
109

 

 
109

Premises
 

 

 
89

 

 
89

Depreciation of fixed assets
 

 

 
40

 

 
40

Amortization and impairment of intangible assets
 

 

 
101

 

 
101

Other general expenses (income)
 
1

 
1

 
315

 

 
317

Total operating expenses
 
26

 
21

 
2,028

 

 
2,075

Operating income (loss)
 
(26
)
 
(21
)
 
312

 

 
265

Interest income
 

 
18

 

 
(8
)
 
10

Interest expense
 
(53
)
 
(24
)
 
(1
)
 
8

 
(70
)
Intercompany interest income (expense)
 
3

 
(135
)
 
132

 

 

Intercompany other income (expense)
 
291

 
(271
)
 
(20
)
 

 

Other income (expense)
 
(2
)
 
14

 
(17
)
 

 
(5
)
Income (loss) from continuing operations before income taxes
 
213

 
(419
)
 
406

 

 
200

Income tax benefit (expense)
 
(8
)
 
(81
)
 
93

 

 
4

Net income (loss) from continuing operations
 
221

 
(338
)
 
313

 

 
196

Income (loss) from discontinued operations, net of tax
 

 

 
(4
)
 

 
(4
)
Net income (loss) before equity in earnings of subsidiaries
 
221

 
(338
)
 
309

 

 
192

Equity in earnings of subsidiaries, net of tax
 
(36
)
 
122

 
(216
)
 
130

 

Net income
 
185

 
(216
)
 
93

 
130

 
192

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
$
185

 
$
(216
)
 
$
86

 
$
130

 
$
185


Condensed Consolidating Statement of Income
 
 
Three months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
2,201

 
$

 
$
2,201

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
25

 
4

 
1,271

 

 
1,300

Information technology
 

 

 
99

 

 
99

Premises
 

 

 
86

 

 
86

Depreciation of fixed assets
 

 

 
39

 

 
39

Amortization and impairment of intangible assets
 

 

 
42

 

 
42

Other general expenses (income)
 
(1
)
 
3

 
265

 

 
267

Total operating expenses
 
24

 
7

 
1,802

 

 
1,833

Operating income (loss)
 
(24
)
 
(7
)
 
399

 

 
368

Interest income
 

 
4

 
5

 
(8
)
 
1

Interest expense
 
(51
)
 
(24
)
 
(3
)
 
8

 
(70
)
Intercompany interest income (expense)
 
3

 
(135
)
 
132

 

 

Intercompany other income (expense)
 
328

 
(277
)
 
(51
)
 

 

Other income (expense)
 
(5
)
 
1

 
11

 
3

 
10

Income (loss) from continuing operations before income taxes
 
251

 
(438
)
 
493

 
3

 
309

Income tax benefit (expense)
 
13

 
(93
)
 
105

 

 
25

Net income (loss) from continuing operations
 
238

 
(345
)
 
388

 
3

 
284

Income (loss) from discontinued operations, net of tax
 

 

 
42

 

 
42

Net income (loss) before equity in earnings of subsidiaries
 
238

 
(345
)
 
430

 
3

 
326

Equity in earnings of subsidiaries, net of tax
 
78

 
225

 
(120
)
 
(183
)
 

Net income
 
316

 
(120
)
 
310

 
(180
)
 
326

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
$
316

 
$
(120
)
 
$
303

 
$
(180
)
 
$
319

 

Condensed Consolidating Statement of Income
 
 
Nine months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
7,089

 
$

 
$
7,089

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
85

 
31

 
4,221

 

 
4,337

Information technology
 

 

 
295

 

 
295

Premises
 

 

 
259

 

 
259

Depreciation of fixed assets
 

 

 
148

 

 
148

Amortization and impairment of intangible assets
 

 

 
604

 

 
604

Other general expenses (income)
 
10

 
(3
)
 
949

 

 
956

Total operating expenses
 
95

 
28

 
6,476

 

 
6,599

Operating income (loss)
 
(95
)
 
(28
)
 
613

 

 
490

Interest income
 

 
35

 

 
(15
)
 
20

Interest expense
 
(144
)
 
(71
)
 
(11
)
 
15

 
(211
)
Intercompany interest income (expense)
 
10

 
(407
)
 
397

 

 

Intercompany other income (expense)
 
189

 
(280
)
 
91

 

 

Other income (expense)
 
(25
)
 
22

 
(35
)
 
18

 
(20
)
Income (loss) from continuing operations before income taxes
 
(65
)
 
(729
)
 
1,055

 
18

 
279

Income tax benefit (expense)
 
(30
)
 
(198
)
 
89

 

 
(139
)
Net income (loss) from continuing operations
 
(35
)
 
(531
)
 
966

 
18

 
418

Income (loss) from discontinued operations, net of tax
 

 

 
857

 

 
857

Net income (loss) before equity in earnings of subsidiaries
 
(35
)
 
(531
)
 
1,823

 
18

 
1,275

Equity in earnings of subsidiaries, net of tax
 
1,262

 
1,028

 
497

 
(2,787
)
 

Net income
 
1,227

 
497

 
2,320

 
(2,769
)
 
1,275

Less: Net income attributable to noncontrolling interests
 

 

 
30

 

 
30

Net income (loss) attributable to Aon shareholders
 
$
1,227

 
$
497

 
$
2,290

 
$
(2,769
)
 
$
1,245


Condensed Consolidating Statement of Income
 
 
Nine months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Revenue
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$

 
$

 
$
6,759

 
$

 
$
6,759

Expenses
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
76

 
10

 
3,955

 

 
4,041

Information technology
 

 

 
281

 

 
281

Premises
 

 

 
257

 

 
257

Depreciation of fixed assets
 

 

 
118

 

 
118

Amortization and impairment of intangible assets
 

 

 
117

 

 
117

Other general expenses (income)
 
5

 
7

 
758

 

 
770

Total operating expenses
 
81

 
17

 
5,486

 

 
5,584

Operating income (loss)
 
(81
)
 
(17
)
 
1,273

 

 
1,175

Interest income
 

 
13

 
14

 
(21
)
 
6

Interest expense
 
(145
)
 
(78
)
 
(10
)
 
21

 
(212
)
Intercompany interest income (expense)
 
10

 
(405
)
 
395

 

 

Intercompany other income (expense)
 
217

 
(292
)
 
75

 

 

Other income (expense)
 
(3
)
 
(8
)
 
39

 
(1
)
 
27

Income (loss) from continuing operations before income taxes
 
(2
)
 
(787
)
 
1,786

 
(1
)
 
996

Income tax benefit (expense)
 
(33
)
 
(219
)
 
379

 

 
127

Net income (loss) from continuing operations
 
31

 
(568
)
 
1,407

 
(1
)
 
869

Income (loss) from discontinued operations, net of tax
 

 

 
102

 

 
102

Net income (loss) before equity in earnings of subsidiaries
 
31

 
(568
)
 
1,509

 
(1
)
 
971

Equity in earnings of subsidiaries, net of tax
 
914

 
836

 
268

 
(2,018
)
 

Net income
 
945

 
268

 
1,777

 
(2,019
)
 
971

Less: Net income attributable to noncontrolling interests
 

 

 
27

 

 
27

Net income (loss) attributable to Aon shareholders
 
$
945

 
$
268

 
$
1,750

 
$
(2,019
)
 
$
944


Condensed Consolidating Statement of Comprehensive Income
 
 
Three months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
185

 
$
(216
)
 
$
93

 
$
130

 
$
192

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
185

 
(216
)
 
86

 
130

 
185

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
3

 
8

 

 
11

Foreign currency translation adjustments
 

 

 
243

 

 
243

Post-retirement benefit obligation
 

 
7

 
11

 

 
18

Total other comprehensive income (loss)
 

 
10

 
262

 

 
272

Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
265

 
245

 
255

 
(765
)
 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 
7

 

 
7

Total other comprehensive income (loss) attributable to Aon shareholders
 
265

 
255

 
510

 
(765
)
 
265

Comprehensive income (loss) attributable to Aon shareholders
 
$
450

 
$
39

 
$
596

 
$
(635
)
 
$
450

Condensed Consolidating Statement of Comprehensive Income
 
 
Three months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
316

 
$
(120
)
 
$
310

 
$
(180
)
 
$
326

Less: Net income attributable to noncontrolling interests
 

 

 
7

 

 
7

Net income (loss) attributable to Aon shareholders
 
316

 
(120
)
 
303

 
(180
)
 
319

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
1

 
(1
)
 

 

Foreign currency translation adjustments
 

 
1

 
(87
)
 
(3
)
 
(89
)
Post-retirement benefit obligation
 

 
7

 
11

 

 
18

Total other comprehensive income (loss)
 

 
9

 
(77
)
 
(3
)
 
(71
)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
(68
)
 
(83
)
 
(74
)
 
225

 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 

 

 

Total other comprehensive income (loss) attributable to Aon shareholders
 
(68
)
 
(74
)
 
(151
)
 
222

 
(71
)
Comprehensive income (loss) attributable to Aon shareholders
 
$
248

 
$
(194
)
 
$
152

 
$
42

 
$
248


Condensed Consolidating Statement of Comprehensive Income
 
 
Nine months ended September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
1,227

 
$
497

 
$
2,320

 
$
(2,769
)
 
$
1,275

Less: Net income attributable to noncontrolling interests
 

 

 
30

 

 
30

Net income (loss) attributable to Aon shareholders
 
1,227

 
497

 
2,290

 
(2,769
)
 
1,245

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
3

 
10

 

 
13

Foreign currency translation adjustments
 

 

 
452

 
(18
)
 
434

Post-retirement benefit obligation
 

 
23

 
33

 

 
56

Total other comprehensive income (loss)
 

 
26

 
495

 
(18
)
 
503

Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
518

 
480

 
506

 
(1,504
)
 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 
3

 

 
3

Total other comprehensive income (loss) attributable to Aon shareholders
 
518

 
506

 
998

 
(1,522
)
 
500

Comprehensive income (loss) attributable to Aon shareholders
 
$
1,745

 
$
1,003

 
$
3,288

 
$
(4,291
)
 
$
1,745

Condensed Consolidating Statement of Comprehensive Income
 
 
Nine months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
Net income (loss)
 
$
945

 
$
268

 
$
1,777

 
$
(2,019
)
 
$
971

Less: Net income attributable to noncontrolling interests
 

 

 
27

 

 
27

Net income (loss) attributable to Aon shareholders
 
945

 
268

 
1,750

 
(2,019
)
 
944

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
Change in fair value of financial instruments
 

 
1

 
(12
)
 

 
(11
)
Foreign currency translation adjustments
 
(2
)
 
22

 
(248
)
 
1

 
(227
)
Post-retirement benefit obligation
 

 
23

 
(155
)
 

 
(132
)
Total other comprehensive income (loss)
 
(2
)
 
46

 
(415
)
 
1

 
(370
)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
 
(369
)
 
(425
)
 
(379
)
 
1,173

 

Less: Other comprehensive income attributable to noncontrolling interests
 

 

 

 

 

Total other comprehensive income (loss) attributable to Aon shareholders
 
(371
)
 
(379
)
 
(794
)
 
1,174

 
(370
)
Comprehensive income (loss) attributable to Aon shareholders
 
$
574

 
$
(111
)
 
$
956

 
$
(845
)
 
$
574

Condensed Consolidating Statement of Financial Position
 
 
As of September 30, 2017
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
ASSETS
 
 

 
 

 
 

 
 

 
 

CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
3,110

 
$
802

 
$
(3,163
)
 
$
749

Short-term investments
 

 
1,467

 
173

 

 
1,640

Receivables, net
 

 
2

 
2,066

 

 
2,068

Fiduciary assets
 

 

 
9,292

 

 
9,292

Intercompany receivables
 
110

 
4,860

 
12,436

 
(17,406
)
 

Other current assets
 

 
37

 
481

 

 
518

Current assets of discontinued operations
 

 

 

 

 

Total Current Assets
 
110

 
9,476

 
25,250

 
(20,569
)
 
14,267

Goodwill
 

 

 
7,888

 

 
7,888

Intangible assets, net
 

 

 
1,341

 

 
1,341

Fixed assets, net
 

 

 
545

 

 
545

Deferred tax assets
 
135

 
664

 
173

 
(407
)
 
565

Intercompany receivables
 
391

 
261

 
8,728

 
(9,380
)
 

Prepaid pension
 

 
5

 
1,015

 

 
1,020

Other non-current assets
 
1

 
49

 
248

 

 
298

Investment in subsidiary
 
11,900

 
17,748

 
509

 
(30,157
)
 

Non-current assets of discontinued operations
 

 

 

 

 

TOTAL ASSETS
 
$
12,537

 
$
28,203

 
$
45,697

 
$
(60,513
)
 
$
25,924

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

LIABILITIES
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
2,929

 
$
37

 
$
1,785

 
$
(3,163
)
 
$
1,588

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

 

 
305

 

 
305

Fiduciary liabilities
 

 

 
9,292

 

 
9,292

Intercompany payables
 
147

 
15,951

 
1,308

 
(17,406
)
 

Other current liabilities
 
24

 
54

 
1,211

 

 
1,289

Current liabilities of discontinued operations
 

 

 

 

 

Total Current Liabilities
 
3,100

 
16,042

 
13,901

 
(20,569
)
 
12,474

Long-term debt
 
4,247

 
1,414

 
1

 

 
5,662

Deferred tax liabilities
 

 

 
490

 
(407
)
 
83

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

 
1,234

 
378

 

 
1,612

Intercompany payables
 

 
8,894

 
486

 
(9,380
)
 

Other non-current liabilities
 
15

 
110

 
721

 

 
846

Non-current liabilities of discontinued operations
 

 

 

 

 

TOTAL LIABILITIES
 
7,362

 
27,694

 
15,977

 
(30,356
)
 
20,677

 
 
 
 
 
 
 
 
 
 
 
TOTAL AON SHAREHOLDERS’ EQUITY
 
5,175

 
509

 
29,648

 
(30,157
)
 
5,175

Noncontrolling interests
 

 

 
72

 

 
72

TOTAL EQUITY
 
5,175

 
509

 
29,720

 
(30,157
)
 
5,247

TOTAL LIABILITIES AND EQUITY
 
$
12,537

 
$
28,203

 
$
45,697

 
$
(60,513
)
 
$
25,924

Condensed Consolidating Statement of Financial Position
 
 
As of December 31, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
ASSETS
 
 

 
 

 
 

 
 

 
 

CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
1,633

 
$
655

 
$
(1,862
)
 
$
426

Short-term investments
 

 
140

 
150

 

 
290

Receivables, net
 

 
3

 
2,103

 

 
2,106

Fiduciary assets
 

 

 
8,959

 

 
8,959

Intercompany receivables
 
105

 
1,880

 
9,825

 
(11,810
)
 

Other current assets
 

 
25

 
222

 

 
247

Current assets of discontinued operations
 

 

 
1,118

 

 
1,118

Total Current Assets
 
105

 
3,681

 
23,032

 
(13,672
)
 
13,146

Goodwill
 

 

 
7,410

 

 
7,410

Intangible assets, net
 

 

 
1,890

 

 
1,890

Fixed assets, net
 

 

 
550

 

 
550

Deferred tax assets
 
134

 
726

 
171

 
(706
)
 
325

Intercompany receivables
 
366

 
261

 
8,711

 
(9,338
)
 

Prepaid pension
 

 
5

 
853

 

 
858

Other non-current assets
 
2

 
119

 
239

 

 
360

Investment in subsidiary
 
10,107

 
17,131

 
(356
)
 
(26,882
)
 

Non-current assets of discontinued operations
 

 

 
2,076

 

 
2,076

TOTAL ASSETS
 
$
10,714

 
$
21,923

 
$
44,576

 
$
(50,598
)
 
$
26,615

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

LIABILITIES
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
585

 
$
44

 
$
2,837

 
$
(1,862
)
 
$
1,604

Short-term debt and current portion of long-term debt
 
279

 
50

 
7

 

 
336

Fiduciary liabilities
 

 

 
8,959

 

 
8,959

Intercompany payables
 
142

 
10,399

 
1,269

 
(11,810
)
 

Other current liabilities
 

 
63

 
593

 

 
656

Current liabilities of discontinued operations
 

 

 
940

 

 
940

Total Current Liabilities
 
1,006

 
10,556

 
14,605

 
(13,672
)
 
12,495

Long-term debt
 
4,177

 
1,413

 
279

 

 
5,869

Deferred tax liabilities
 

 

 
759

 
(658
)
 
101

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

 
1,356

 
404

 

 
1,760

Intercompany payables
 

 
8,877

 
461

 
(9,338
)
 

Other non-current liabilities
 
8

 
77

 
634

 

 
719

Non-current liabilities of discontinued operations
 

 

 
139

 

 
139

TOTAL LIABILITIES
 
5,191

 
22,279

 
17,281

 
(23,668
)
 
21,083

 
 
 
 
 
 
 
 
 
 
 
TOTAL AON SHAREHOLDERS’ EQUITY
 
5,523

 
(356
)
 
27,238

 
(26,930
)
 
5,475

Noncontrolling interests
 

 

 
57

 

 
57

TOTAL EQUITY
 
5,523

 
(356
)
 
27,295

 
(26,930
)
 
5,532

TOTAL LIABILITIES AND EQUITY
 
$
10,714

 
$
21,923

 
$
44,576

 
$
(50,598
)
 
$
26,615

Condensed Consolidating Statement of Cash Flows
 
 
Nine months ended September 30, 2017
 
 
Aon
 
Aon
 
Other
Non-Guarantor
 
Consolidating
 
 
(millions)
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
 
 

 
 

 
 

 
 

 
 

Cash provided by (used for) operating activities - continuing operations
 
$
(135
)
 
$
999

 
$
987

 
$
(1,562
)
 
$
289

Cash provided by operating activities - discontinued operations
 

 

 
64

 

 
64

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
 
(135
)
 
999

 
1,051

 
(1,562
)
 
353

 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Proceeds from investments
 

 
576

 
11

 
(544
)
 
43

Payments for investments
 
(16
)
 
(25
)
 
(571
)
 
557

 
(55
)
Net purchases of short-term investments - non-fiduciary
 

 
(1,328
)
 
(16
)
 

 
(1,344
)
Acquisition of businesses, net of cash acquired
 

 
1

 
(173
)
 

 
(172
)
Sale of businesses, net of cash sold
 

 

 
4,194

 

 
4,194

Capital expenditures
 

 

 
(125
)
 

 
(125
)
Cash provided by (used for) investing activities - continuing operations
 
(16
)
 
(776
)
 
3,320

 
13

 
2,541

Cash used for investing activities - discontinued operations
 

 

 
(19
)
 

 
(19
)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
 
(16
)
 
(776
)
 
3,301

 
13

 
2,522

 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Share repurchase
 
(1,888
)
 

 

 

 
(1,888
)
Advances from (to) affiliates
 
2,722

 
1,304

 
(4,274
)
 
248

 

Issuance of shares for employee benefit plans
 
(118
)
 

 

 

 
(118
)
Issuance of debt
 
544

 
1,100

 
7

 

 
1,651

Repayment of debt
 
(835
)
 
(1,150
)
 
(13
)
 

 
(1,998
)
Cash dividends to shareholders
 
(274
)
 

 

 

 
(274
)
Noncontrolling interests and other financing activities
 

 

 
(21
)
 

 
(21
)
Cash provided by (used for) financing activities - continuing operations
 
151

 
1,254

 
(4,301
)
 
248

 
(2,648
)
Cash used for financing activities - discontinued operations
 

 

 

 

 

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
 
151

 
1,254

 
(4,301
)
 
248

 
(2,648
)
 
 
 
 
 
 
 
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 

 

 
91

 

 
91

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 

 
1,477

 
142

 
(1,301
)
 
318

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (1)
 

 
1,633

 
660

 
(1,862
)
 
431

CASH AND CASH EQUIVALENTS AT END OF PERIOD (2)
 
$

 
$
3,110

 
$
802

 
$
(3,163
)
 
$
749

(1)
Includes $5 million of discontinued operations at December 31, 2016.
(2)
There was no cash held by discontinued operations at September 30, 2017.

Condensed Consolidating Statement of Cash Flows
 
 
Nine months ended September 30, 2016
 
 
 
 
 
 
Other
 
 
 
 
 
 
Aon
 
Aon
 
Non-Guarantor
 
Consolidating
 
 
(millions) 
 
plc
 
Corporation
 
Subsidiaries
 
Adjustments
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
 
 

 
 

 
 

 
 

 
 

Cash provided by (used for) operating activities - continuing operations
 
$
219

 
$
(664
)
 
$
1,597

 
$

 
$
1,152

Cash provided by operating activities - discontinued operations
 

 

 
323

 

 
323

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
 
219

 
(664
)
 
1,920

 

 
1,475

 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Proceeds from investments
 

 
19

 
12

 

 
31

Payments for investments
 

 
(25
)
 
(22
)
 

 
(47
)
Net sales of short-term investments - non-fiduciary
 

 
(99
)
 
(9
)
 

 
(108
)
Acquisition of businesses, net of cash acquired
 

 

 
(198
)
 

 
(198
)
Sale of businesses, net of cash sold
 

 

 
104

 

 
104

Capital expenditures
 

 

 
(107
)
 

 
(107
)
Cash provided by (used for) investing activities - continuing operations
 

 
(105
)
 
(220
)
 

 
(325
)
Cash used for investing activities - discontinued operations
 

 

 
(46
)
 

 
(46
)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
 

 
(105
)
 
(266
)
 

 
(371
)
 
 
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Share repurchase
 
(1,037
)
 

 

 

 
(1,037
)
Advances from (to) affiliates
 
166

 
356

 
(670
)
 
148

 

Issuance of shares for employee benefit plans
 
(70
)
 

 

 

 
(70
)
Issuance of debt
 
1,588

 
1,141

 

 

 
2,729

Repayment of debt
 
(608
)
 
(1,692
)
 
(8
)
 

 
(2,308
)
Cash dividends to shareholders
 
(258
)
 

 

 

 
(258
)
Noncontrolling interests and other financing activities
 

 

 
(71
)
 

 
(71
)
Cash provided by (used for) financing activities - continuing operations
 
(219
)
 
(195
)
 
(749
)
 
148

 
(1,015
)
Cash used for financing activities - discontinued operations
 

 

 

 

 

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
 
(219
)
 
(195
)
 
(749
)
 
148

 
(1,015
)
 
 
 
 
 
 
 
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 

 

 
10

 

 
10

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 

 
(964
)
 
915

 
148

 
99

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR(1)
 

 
2,083

 
1,242

 
(2,941
)
 
384

CASH AND CASH EQUIVALENTS AT END OF PERIOD(2)
 
$

 
$
1,119

 
$
2,157

 
$
(2,793
)
 
$
483


(1)
Includes $2 million of discontinued operations at December 31, 2015.
(2)
Includes $3 million of discontinued operations at September 30, 2016.
Basis of Presentation - Narrative (Details)
9 Months Ended
Sep. 30, 2017
revenue_line
segment
Segment Reporting, Revenue Reconciling Item [Line Items]
 
Number of reportable segments
Number of revenue lines
Commissions, Fees and Other and Fiduciary Investment Income
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
Number of revenue lines
Accounting Principles and Practices (Narrative) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2017
Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Adoption of new accounting guidance
 
 
$ 49 
Deferred tax assets
565 
565 
325 
Excess tax benefit amount
53 
 
Accounting Standards Update 2016-09, Excess Tax Benefit Component
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Deferred tax assets
 
 
49 
Income (loss) from extraordinary items, tax effect, (in dollars per share)
$ 0.02 
$ 0.20 
 
Retained Earnings
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Adoption of new accounting guidance
 
 
49 
Retained Earnings |
Accounting Standards Update 2016-09, Excess Tax Benefit Component
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Adoption of new accounting guidance
 
 
$ 49 
Discontinued Operations (Details) (USD $)
0 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Dec. 31, 2015
May 1, 2017
Tempo Business
agreement
Sep. 30, 2017
Tempo Business
Discontinued Operations, Disposed of by Sale
Sep. 30, 2016
Tempo Business
Discontinued Operations, Disposed of by Sale
Sep. 30, 2017
Tempo Business
Discontinued Operations, Disposed of by Sale
Sep. 30, 2016
Tempo Business
Discontinued Operations, Disposed of by Sale
May 1, 2017
Tempo Business
Discontinued Operations, Disposed of by Sale
Dec. 31, 2016
Tempo Business
Discontinued Operations, Disposed of by Sale
May 1, 2017
Maximum
Tempo Business
Discontinued Operations, Disposed of by Sale
Jun. 30, 2017
Trade Names
Tempo Business
Discontinued Operations, Disposed of by Sale
Sep. 30, 2017
Trade Names
Tempo Business
Discontinued Operations, Disposed of by Sale
Dispositions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price
 
 
 
 
 
 
 
 
 
$ 4,300,000,000 
 
$ 4,200,000,000 
 
 
Deferred consideration
 
 
 
 
 
 
 
 
 
 
 
500,000,000 
 
 
Number of commercial agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on sale of discontinued operations, net of tax
 
 
 
 
 
5,000,000 
803,000,000 
 
 
 
 
 
Impairment of tradename
 
 
 
 
 
 
 
 
 
 
 
 
380,000,000 
380,000,000 
Depreciation and amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation of fixed assets
 
 
 
 
 
 
18,000,000 
8,000,000 
53,000,000 
 
 
 
 
 
Amortization of intangible assets
 
 
 
 
 
 
30,000,000 
11,000,000 
90,000,000 
 
 
 
 
 
Cash and cash equivalents
$ 0 
$ 5,000,000 
$ 3,000,000 
$ 2,000,000 
 
$ 0 
 
$ 0 
 
 
$ 5,000,000 
 
 
 
Discontinued Operations Income Statement (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Expenses
 
 
 
 
Income from discontinued operations, net of tax
$ (4)
$ 42 
$ 857 
$ 102 
Tempo Business |
Discontinued Operations, Disposed of by Sale
 
 
 
 
Revenue
 
 
 
 
Total revenue
559 
698 
1,606 
Expenses
 
 
 
 
Total operating expenses
14 
491 
640 
1,443 
Operating income from discontinued operations
(14)
68 
58 
163 
Other income
(1)
(1)
10 
Income from discontinued operations before income taxes
(15)
67 
68 
163 
Income taxes
(6)
25 
14 
61 
Income from discontinued operations excluding gain, net of tax
(9)
42 
54 
102 
Gain on sale of discontinued operations, net of tax
803 
Income from discontinued operations, net of tax
$ (4)
$ 42 
$ 857 
$ 102 
Discontinued Operations Balance Sheet (Details) (USD $)
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Dec. 31, 2015
ASSETS
 
 
 
 
Cash and cash equivalents
$ 0 
$ 5,000,000 
$ 3,000,000 
$ 2,000,000 
Receivables, net
124,000,000 
 
 
Tempo Business |
Discontinued Operations, Disposed of by Sale
 
 
 
 
ASSETS
 
 
 
 
Cash and cash equivalents
5,000,000 
 
 
Receivables, net
483,000,000 
 
 
Fiduciary assets
526,000,000 
 
 
Goodwill
1,337,000,000 
 
 
Intangible assets, net
333,000,000 
 
 
Fixed assets, net
215,000,000 
 
 
Other assets
295,000,000 
 
 
TOTAL ASSETS
3,194,000,000 
 
 
LIABILITIES
 
 
 
 
Accounts payable and accrued liabilities
197,000,000 
 
 
Fiduciary liabilities
526,000,000 
 
 
Other liabilities
356,000,000 
 
 
TOTAL LIABILITIES
$ 0 
$ 1,079,000,000 
 
 
Cash and Cash Equivalents and Short-term Investments (Details)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
USD ($)
Sep. 30, 2017
GBP (Ł)
Dec. 31, 2016
USD ($)
Dec. 31, 2016
GBP (Ł)
Cash, Cash Equivalents, and Short-term Investments [Abstract]
 
 
 
 
Cash and cash equivalents and short-term investments
$ 2,389 
 
$ 716 
 
Cash and cash equivalents and short term investments, period increase (decrease)
1,673 
 
 
 
Restricted cash
98 
 
82 
 
Operating funds in U.K.
$ 57.5 
Ł 42.7 
$ 53.2 
Ł 43.3 
Other Financial Data - Schedule of Other Income (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Other (Expense) Income
 
 
 
 
Foreign currency remeasurement gain (loss)
$ (20,000,000)
$ 3,000,000 
$ (32,000,000)
$ (14,000,000)
Gain (loss) on disposal of business
(2,000,000)
41,000,000 
Equity earnings
2,000,000 
4,000,000 
11,000,000 
7,000,000 
Gain (loss) on financial instruments
16,000,000 
3,000,000 
6,000,000 
(7,000,000)
Other
(3,000,000)
(3,000,000)
Total
$ (5,000,000)
$ 10,000,000 
$ (20,000,000)
$ 27,000,000 
Other Financial Data - Schedule of Allowance for Doubtful Accounts (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Allowance for Doubtful Accounts Receivable [Roll Forward]
 
 
 
 
Balance at beginning of period
$ 59 
$ 64 
$ 56 
$ 58 
Provision charged to Other general expenses
16 
15 
Accounts written off, net of recoveries
(5)
(10)
(11)
Foreign currency translation
(5)
(3)
Balance at end of period
$ 59 
$ 63 
$ 59 
$ 63 
Other Financial Data - Schedule of Other Current Assets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Other Financial Data [Abstract]
 
 
Taxes receivable
$ 208 
$ 100 
Prepaid expenses
158 
102 
Receivables from Divested Business
124 
Other
28 
45 
Total
$ 518 
$ 247 
Other Financial Data - Schedule of Other Non-current Assets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Other Financial Data [Abstract]
 
 
Investments
$ 44 
$ 119 
Taxes receivable
88 
82 
Other
166 
159 
Total
$ 298 
$ 360 
Other Financial Data - Schedule of Other Current Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Other Financial Data [Abstract]
 
 
Deferred revenue
$ 331 
$ 199 
Taxes payable (1)
537 
77 
Other
421 
380 
Total
$ 1,289 
$ 656 
Other Financial Data - Schedule of Other Non-current Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Other Financial Data [Abstract]
 
 
Taxes payable
$ 333 
$ 288 
Deferred revenue
45 
49 
Leases
145 
136 
Compensation and benefits
61 
56 
Other
262 
190 
Total
$ 846 
$ 719 
Acquisitions and Dispositions of Businesses - Acquisitions (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2017
acquisition
Dec. 31, 2016
acquisition
Business Acquisition
 
 
Number of business acquired under business combination
Assets acquired:
 
 
Goodwill
$ 7,888 
$ 7,410 
2017 Acquisitions
 
 
Business Combination, Consideration Transferred [Abstract]
 
 
Cash
164 
 
Deferred and contingent consideration
32 
 
Aggregate consideration transferred
196 
 
Assets acquired:
 
 
Cash and cash equivalents
 
Receivables, net
11 
 
Goodwill
121 
 
Intangible assets, net
90 
 
Fixed assets, net
 
Other assets
10 
 
Total assets acquired
240 
 
Liabilities assumed:
 
 
Current liabilities
18 
 
Other non-current liabilities
26 
 
Total liabilities assumed
44 
 
Net assets acquired
$ 196 
 
Acquisitions and Dispositions of Businesses - Dispositions (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dispositions
 
 
 
 
Gain (loss) on disposal of business
$ 0 
$ 0 
$ (2,000,000)
$ 41,000,000 
Disposal Group, Not Discontinued Operations [Member]
 
 
 
 
Dispositions
 
 
 
 
Number of dispositions
Restructuring Narrative (Details) (2017 Plan, USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2017
job_elimination
Restructuring Cost and Reserve [Line Items]
 
 
Expected total cost
$ 750 
$ 750 
Number of positions eliminated to date
 
2,125 
Costs incurred
102 
401 
Workforce reduction
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected total cost
303 
303 
Costs incurred
52 
257 
Technology rationalization
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected total cost
146 
146 
Costs incurred
12 
22 
Lease consolidation
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected total cost
80 
80 
Costs incurred
Asset impairments
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected total cost
40 
40 
Costs incurred
26 
Other Restructuring
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected total cost
181 
181 
Costs incurred
32 
88 
Non-cash charges for asset impairments and lease consolidations
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected total cost
$ 50 
$ 50 
Minimum
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected number of positions eliminated
 
2,400 
Maximum
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Expected number of positions eliminated
 
2,850 
Restructuring - Schedule of Restructuring Reserve (Details) (2017 Plan, USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
2017 Plan
 
Restructuring Plan
 
Balance as of December 31, 2016
$ 0 
Expensed
369 
Cash payments
(199)
Foreign currency translation and other
17 
Balance as of September 30, 2017
$ 187 
Goodwill and Other Intangible Assets Rollforward (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Changes in the net carrying amount of goodwill by operating segment
 
Beginning balance
$ 7,410 
Goodwill related to current year acquisitions
121 
Goodwill related to disposals
(1)
Goodwill related to prior year acquisitions
(6)
Foreign currency translation
364 
Ending balance
$ 7,888 
Goodwill and Other Intangible Assets (Details 2) (USD $)
In Millions, except Per Share data, unless otherwise specified
0 Months Ended 3 Months Ended 5 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended
May 1, 2017
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
segment
Sep. 30, 2017
segment
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2017
Customer related and contract based
Dec. 31, 2016
Customer related and contract based
May 1, 2017
Tradenames
Sep. 30, 2017
Tradenames
Dec. 31, 2016
Tradenames
Sep. 30, 2017
Technology and other
Dec. 31, 2016
Technology and other
Sep. 30, 2017
Discontinued Operations, Disposed of by Sale
Tempo Business
Tradenames
Jun. 30, 2017
Discontinued Operations, Disposed of by Sale
Tempo Business
Tradenames
Sep. 30, 2017
Discontinued Operations, Disposed of by Sale
Tempo Business
Tradenames
Intangible assets with finite lives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of tradename
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 380 
$ 380 
Gross Carrying Amount
 
3,529 
 
3,529 
3,529 
 
3,397 
2,104 
2,023 
 
1,041 
1,027 
384 
347 
 
 
 
Accumulated Amortization and Impairment
 
2,188 
 
2,188 
2,188 
 
1,507 
1,380 
1,198 
 
478 
330 
302 
 
 
 
Net Carrying Amount
 
1,341 
 
1,341 
1,341 
 
1,890 
724 
825 
 
563 
1,020 
54 
45 
 
 
 
Gross intangible assets reclassified
 
 
 
 
 
 
 
 
 
 
 
 
 
29 
 
 
 
Accumulated amortization reclassified
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brand transition period
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-lived intangible asset, useful life
 
 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
Indefinite-lived intangible assets, additional amortization expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34 
 
56 
Additional amortization per share (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.13 
 
$ 0.21 
Amortization and impairment of intangible assets
 
101 
42 
 
604 
117 
 
 
 
 
 
 
 
 
 
 
 
Estimated amortization for intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remainder of 2017
 
117 
 
117 
117 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
376 
 
376 
376 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
357 
 
357 
357 
 
 
 
 
 
 
 
 
 
 
 
 
2020
 
196 
 
196 
196 
 
 
 
 
 
 
 
 
 
 
 
 
2021
 
89 
 
89 
89 
 
 
 
 
 
 
 
 
 
 
 
 
Thereafter
 
206 
 
206 
206 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$ 1,341 
 
$ 1,341 
$ 1,341 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Narrative (Details)
9 Months Ended
Sep. 30, 2017
USD ($)
program
credit_facility
Dec. 31, 2016
USD ($)
Sep. 30, 2017
4.76% Senior Notes Due March 2018
Senior Notes
USD ($)
Mar. 31, 2017
4.76% Senior Notes Due March 2018
Senior Notes
CAD ($)
Sep. 30, 2017
Credit Facility Expiring February 2021
USD ($)
Sep. 30, 2017
Foreign Line of Credit
2020 Facility
Line of Credit
USD ($)
Mar. 31, 2017
Credit Facility Expiring March 2017
Line of Credit
USD ($)
Sep. 30, 2017
Commercial paper
Commercial Paper Programs
USD ($)
Oct. 19, 2017
Subsequent Event
Credit Facility Expiring October 2022
Line of Credit
USD ($)
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
Short-term debt and current portion of long-term debt
$ 305,000,000 
$ 336,000,000 
$ 304,000,000 
$ 375,000,000 
 
 
 
 
 
Debt interest rate percentage (as a percent)
 
 
4.76% 
 
 
 
 
 
 
Number of credit facilities
 
 
 
 
 
 
 
 
Line of credit facility, maximum borrowing capacity
 
 
 
 
 
900,000,000 
400,000,000 
1,300,000,000 
400,000,000 
Borrowings
 
 
 
 
 
 
 
 
Number of commercial paper programs
 
 
 
 
 
 
 
 
Line of credit facility, current borrowing capacity
 
 
 
 
 
 
 
$ 900,000,000 
 
Debt Schedule of Commercial Paper (Details) (Commercial paper, USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Commercial paper
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
Commercial paper outstanding
$ 0 
 
$ 0 
 
$ 329 
Weighted average commercial paper outstanding
$ 0 
$ 271 
$ 227 
$ 251 
 
Weighted average interest rate of commercial paper outstanding
0.00% 
0.02% 
0.18% 
0.27% 
 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Tax Disclosure [Abstract]
 
 
 
 
Effective income tax rate
2.00% 
8.10% 
(49.80%)
12.80% 
Income tax expense (benefit)
$ 4 
$ 25 
$ (139)
$ 127 
Income from continuing operations before income taxes
$ 200 
$ 309 
$ 279 
$ 996 
Shareholders' Equity (Details) (USD $)
3 Months Ended 9 Months Ended 66 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2017
Share Repurchase Program of 2014
Feb. 28, 2017
Share Repurchase Program of 2014
Nov. 30, 2014
Share Repurchase Program of 2014
Sep. 30, 2017
2012 - Share Repurchase Program
Sep. 30, 2016
2012 - Share Repurchase Program
Sep. 30, 2017
2012 - Share Repurchase Program
Sep. 30, 2016
2012 - Share Repurchase Program
Apr. 30, 2012
2012 - Share Repurchase Program
Oct. 31, 2017
Subsequent Event
2012 - Share Repurchase Program
Common Stock Programs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share repurchase authorization limit (up to)
 
 
 
 
 
$ 15,000,000,000.0 
$ 5,000,000,000.0 
$ 5,000,000,000.0 
 
 
 
 
$ 5,000,000,000.0 
 
Shares purchased (in shares)
 
 
 
 
104,700,000 
 
 
 
5,400,000 
2,700,000 
14,500,000 
10,400,000 
 
165,000 
Average price per share of stock repurchased (in dollars per share)
 
 
 
 
 
 
 
 
$ 139.61 
$ 110.26 
$ 131.58 
$ 101.16 
 
$ 146.52 
Total cost of shares purchased
 
 
1,913,000,000 
 
9,100,000,000 
 
 
 
749,000,000 
301,000,000 
1,900,000,000 
1,100,000,000 
 
24,200,000 
Treasury stock acquired, additional transaction costs
3,800,000 
 
9,500,000 
 
 
 
 
 
 
 
 
 
 
 
Share repurchase, remaining authorization limit (in shares)
 
 
 
 
 
$ 5,900,000,000 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares for basic earnings per share (in shares)
255,600,000 
267,500,000 
260,900,000 
269,100,000 
 
 
 
 
 
 
 
 
 
 
Dilutive effect of potentially issuable shares (in shares)
1,700,000 
2,100,000 
2,000,000 
1,900,000 
 
 
 
 
 
 
 
 
 
 
Shares for diluted earnings per share (in shares)
257,300,000 
269,600,000 
262,900,000 
271,000,000 
 
 
 
 
 
 
 
 
 
 
Number of shares excluded from the calculation of diluted earnings per share (in shares)
 
 
 
 
 
 
 
 
 
 
Shareholders' Equity (Details 2) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
 
 
 
Stockholders' equity, including portion attributable to noncontrolling interest
$ 5,247 
 
$ 5,247 
 
$ 5,532 
Other comprehensive income (loss) before reclassifications, net
 
 
455 
 
 
Amounts reclassified from accumulated other comprehensive loss:
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 
 
67 
 
 
Tax benefit (expense)
 
 
(22)
 
 
Amounts reclassified from accumulated other comprehensive income (loss), net
 
 
45 
 
 
Total other comprehensive income (loss) attributable to Aon shareholders
265 
(71)
500 
(370)
 
Total
 
 
 
 
 
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
 
 
 
Stockholders' equity, including portion attributable to noncontrolling interest
(3,412)
 
(3,412)
 
(3,912)
Change in Fair Value of Financial Instruments
 
 
 
 
 
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
 
 
 
Stockholders' equity, including portion attributable to noncontrolling interest
(24)
 
(24)
 
(37)
Other comprehensive income (loss) before reclassifications, net
 
 
13 
 
 
Amounts reclassified from accumulated other comprehensive loss:
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 
 
(2)
 
 
Tax benefit (expense)
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss), net
 
 
 
 
Total other comprehensive income (loss) attributable to Aon shareholders
 
 
13 
 
 
Foreign Currency Translation Adjustments
 
 
 
 
 
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
 
 
 
Stockholders' equity, including portion attributable to noncontrolling interest
(833)
 
(833)
 
(1,264)
Other comprehensive income (loss) before reclassifications, net
 
 
442 
 
 
Amounts reclassified from accumulated other comprehensive loss:
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 
 
(11)
 
 
Tax benefit (expense)
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss), net
 
 
(11)
 
 
Total other comprehensive income (loss) attributable to Aon shareholders
 
 
431 
 
 
Post-Retirement Benefit Obligation
 
 
 
 
 
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
 
 
 
 
 
Stockholders' equity, including portion attributable to noncontrolling interest
(2,555)
 
(2,555)
 
(2,611)
Other comprehensive income (loss) before reclassifications, net
 
 
 
 
Amounts reclassified from accumulated other comprehensive loss:
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 
 
80 
 
 
Tax benefit (expense)
 
 
(24)
 
 
Amounts reclassified from accumulated other comprehensive income (loss), net
 
 
56 
 
 
Total other comprehensive income (loss) attributable to Aon shareholders
 
 
$ 56 
 
 
Employee Benefits (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
U.K.
 
 
 
 
Defined Benefit Plan Disclosure
 
 
 
 
Service cost
$ 0 
$ 0 
$ 0 
$ 0 
Interest cost
31 
37 
91 
123 
Expected return on plan assets, net of administration expenses
(50)
(58)
(147)
(187)
Amortization of prior-service cost
Amortization of net actuarial loss
23 
24 
Net periodic cost (benefit)
(11)
(14)
(33)
(39)
Loss on pension settlement
61 
Total net periodic cost (benefit)
(11)
(14)
(33)
22 
Estimate of contributions to defined benefit pension plans for the current fiscal year
80 
 
80 
 
Contributions made to defined benefit pension plans
22 
19 
64 
53 
U.S.
 
 
 
 
Defined Benefit Plan Disclosure
 
 
 
 
Service cost
Interest cost
24 
28 
72 
83 
Expected return on plan assets, net of administration expenses
(34)
(39)
(104)
(117)
Amortization of prior-service cost
Amortization of net actuarial loss
13 
12 
38 
37 
Net periodic cost (benefit)
Loss on pension settlement
Total net periodic cost (benefit)
Estimate of contributions to defined benefit pension plans for the current fiscal year
51 
 
51 
 
Non-cash contributions by employer
80 
 
80 
 
Contributions made to defined benefit pension plans
31 
24 
Other International Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure
 
 
 
 
Service cost
Interest cost
19 
21 
Expected return on plan assets, net of administration expenses
(13)
(12)
(35)
(36)
Amortization of prior-service cost
Amortization of net actuarial loss
Net periodic cost (benefit)
(3)
(2)
(7)
(7)
Loss on pension settlement
Total net periodic cost (benefit)
(3)
(2)
(7)
(7)
Estimate of contributions to defined benefit pension plans for the current fiscal year
18 
 
18 
 
Contributions made to defined benefit pension plans
$ 3 
$ 4 
$ 14 
$ 14 
Share-Based Compensation Plans - Share-based compensation expenses recognized (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Total share-based compensation expense
$ 67 
$ 66 
$ 214 
$ 210 
Restricted share units (“RSUs”)
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Total share-based compensation expense
42 
40 
143 
136 
Performance share awards (“PSAs”)
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Total share-based compensation expense
22 
24 
63 
67 
Employee share purchase plans
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Total share-based compensation expense
$ 3 
$ 2 
$ 8 
$ 7 
Share-Based Compensation Plans - Restricted share unit activity (Details) (Restricted share units (“RSUs”), USD $)
In Millions, except Share data in Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Non-vested share awards (in shares)
 
 
Non-vested at beginning of period (in shares)
6,195 
7,167 
Granted (in shares)
1,549 
2,110 
Vested (in shares)
(2,294)
(2,729)
Forfeited (in shares)
(590)
(333)
Non-vested at end of period (in shares)
4,860 
6,215 
Weighted Average Fair value
 
 
Non-vested at beginning of period (in dollars per share)
$ 89 
$ 77 
Granted (in dollars per share)
$ 122 
$ 101 
Vested (in dollars per share)
$ 82 
$ 70 
Forfeited (in dollars per share)
$ 92 
$ 81 
Non-vested at end of period (in dollars per share)
$ 102 
$ 88 
Unamortized deferred compensation expense
$ 367 
 
Remaining weighted-average amortization period (in years)
2 years 1 month 6 days 
 
Minimum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Award vesting period
3 years 
 
Maximum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Award vesting period
5 years 
 
Share-Based Compensation Plans - Performance Share Awards Narrative (Details) (Performance Shares)
9 Months Ended
Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Vesting conditions period (in years)
3 years 
Minimum
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Shares issued, percent
0.00% 
Maximum
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Shares issued, percent
200.00% 
Share-Based Compensation Plans - Schedule of Performance-based plans (Details) (Performance Shares, USD $)
In Millions, except Share data in Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Dec. 31, 2015
Performance Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Target PSAs granted during period (in shares)
548 
752 
967 
Weighted average fair value per share at date of grant (in dollars per share)
$ 114 
$ 100 
$ 96 
Number of shares that would be issued based on current performance levels (in shares)
544 
663 
1,362 
Unamortized expense, based on current performance levels
$ 51 
$ 27 
$ 11 
Derivatives and Hedging - Foreign Exchange Risk Management Narrative (Details)
9 Months Ended
Sep. 30, 2017
Cash Flow Hedging
 
Derivative [Line Items]
 
Foreign currency exposures, maximum average hedging period (less than)
2 years 
Not Designated as Hedging Instrument
 
Derivative [Line Items]
 
Foreign currency exposures, maximum hedging period (up to)
1 year 
Derivatives and Hedging - Interest Rate Management Risk Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative [Line Items]
 
 
 
 
Estimated pretax losses currently included within Accumulated Other Comprehensive Loss that will be reclassified to earnings in next twelve months
$ 11 
 
$ 11 
 
Not Designated as Hedging Instrument |
Foreign exchange contracts
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative gain (loss)
$ 8 
$ 2 
$ 9 
$ 1 
Derivatives and Hedging - Notional and fair values of derivative instruments (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Derivatives, Fair Value
 
 
Notional Amount
$ 956 
$ 947 
Derivative Assets
31 
15 
Derivative Liabilities
14 
Term of derivative contract
30 days 
 
Other Current Assets
 
 
Derivatives, Fair Value
 
 
Derivative Assets
Amount not offset against collateral, derivative asset
Other Noncurrent Assets
 
 
Derivatives, Fair Value
 
 
Derivative Assets
25 
Amount not offset against collateral, derivative asset
25 
Other Current Liabilities
 
 
Derivatives, Fair Value
 
 
Derivative Liabilities
Amount not offset against collateral, derivative liabilities
Other Noncurrent Liabilities
 
 
Derivatives, Fair Value
 
 
Derivative Liabilities
Amount not offset against collateral, derivative liabilities
Derivatives accounted for as hedges |
Foreign exchange contracts
 
 
Derivatives, Fair Value
 
 
Notional Amount
711 
758 
Derivative Assets
31 
14 
Derivative Liabilities
13 
Gross Amounts Offset in the Statement of Financial Position
(1)
Net Amounts of Assets Presented in the Statement of Financial Position
31 
13 
Gross Amounts Offset in the Statement of Financial Position
(1)
Net Amounts of Liabilities Presented in the Statement of Financial Position
12 
Not Designated as Hedging Instrument |
Foreign exchange contracts
 
 
Derivatives, Fair Value
 
 
Notional Amount
245 
189 
Derivative Assets
Derivative Liabilities
$ 2 
$ 1 
Derivatives and Hedging - Schedule of amounts of derivative gains (losses) recognized in the Consolidated Financial Statements (Details) (Cash Flow Hedging, Foreign exchange contracts, USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative [Line Items]
 
 
 
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
$ 11 
$ (1)
$ 18 
$ (19)
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
(3)
(2)
(6)
Compensation and benefits
 
 
 
 
Derivative [Line Items]
 
 
 
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
10 
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
14 
Other General Expenses
 
 
 
 
Derivative [Line Items]
 
 
 
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
(4)
(9)
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
(1)
(1)
(3)
(2)
Interest Expense
 
 
 
 
Derivative [Line Items]
 
 
 
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
(1)
(1)
Other Income (Expense)
 
 
 
 
Derivative [Line Items]
 
 
 
 
Gain (Loss) Currently Recognized in Accumulated Other Comprehensive Loss
(7)
(18)
Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
$ (3)
$ (2)
$ (7)
$ (5)
Derivatives and Hedging - Foreign Hedge (Details) (USD $)
9 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
Fair value of hedge of net investment of foreign operations
$ 0 
Effective portion of gain reclassified from Accumulated OCI into income
$ 0 
Fair Value Measurements and Financial Instruments - Schedule of assets and liabilities that are measured at fair value on a recurring basis (Details) (Recurring, USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Money market funds and highly liquid debt securities
 
 
Assets:
 
 
Money market funds and highly liquid debt securities
$ 3,091 
$ 1,371 
Government bonds
 
 
Assets:
 
 
Other investments:
Equity investments
 
 
Assets:
 
 
Other investments:
11 
Foreign exchange contracts
 
 
Assets:
 
 
Derivatives
31 
15 
Liabilities:
 
 
Derivatives: (2)
14 
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Money market funds and highly liquid debt securities
 
 
Assets:
 
 
Money market funds and highly liquid debt securities
3,091 
1,371 
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Government bonds
 
 
Assets:
 
 
Other investments:
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Equity investments
 
 
Assets:
 
 
Other investments:
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Foreign exchange contracts
 
 
Assets:
 
 
Derivatives
Liabilities:
 
 
Derivatives: (2)
Significant Other Observable Inputs (Level 2) |
Money market funds and highly liquid debt securities
 
 
Assets:
 
 
Money market funds and highly liquid debt securities
Significant Other Observable Inputs (Level 2) |
Government bonds
 
 
Assets:
 
 
Other investments:
Significant Other Observable Inputs (Level 2) |
Equity investments
 
 
Assets:
 
 
Other investments:
Significant Other Observable Inputs (Level 2) |
Foreign exchange contracts
 
 
Assets:
 
 
Derivatives
31 
15 
Liabilities:
 
 
Derivatives: (2)
14 
Significant Unobservable Inputs (Level 3) |
Money market funds and highly liquid debt securities
 
 
Assets:
 
 
Money market funds and highly liquid debt securities
Significant Unobservable Inputs (Level 3) |
Government bonds
 
 
Assets:
 
 
Other investments:
Significant Unobservable Inputs (Level 3) |
Equity investments
 
 
Assets:
 
 
Other investments:
Significant Unobservable Inputs (Level 3) |
Foreign exchange contracts
 
 
Assets:
 
 
Derivatives
Liabilities:
 
 
Derivatives: (2)
$ 0 
$ 0 
Fair Value Measurements and Financial Instruments - Schedule of financial instruments where the carrying amounts and fair values differ (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Carrying Value
 
 
Fair value of financial instrument
 
 
Current portion of long-term debt
$ 305 
$ 0 
Long-term debt
5,662 
5,869 
Fair Value |
Fair Value, Inputs, Level 2
 
 
Fair value of financial instrument
 
 
Current portion of long-term debt
309 
Long-term debt
$ 6,227 
$ 6,264 
Commitments and Contingencies Narrative (Details)
3 Months Ended 9 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Dec. 31, 2016
USD ($)
Sep. 30, 2017
Potential Claim for Pension Advisory Services
USD ($)
Apr. 30, 2014
Potential Claim for Pension Advisory Services
GBP (Ł)
Sep. 14, 2010
Opry Mills Mall Limited Partnership
USD ($)
Aug. 31, 2015
Opry Mills Mall Limited Partnership
USD ($)
Mar. 31, 2015
Opry Mills Mall Limited Partnership
USD ($)
Jun. 30, 2017
International Road Transport Union
Litigation Award
USD ($)
Jan. 31, 2015
International Road Transport Union
Litigation Award
USD ($)
Jan. 26, 2015
International Road Transport Union
Litigation Award
CHF
Dec. 31, 2014
International Road Transport Union
Litigation Award
USD ($)
Dec. 2, 2014
International Road Transport Union
Litigation Award
CHF
Jun. 1, 2007
International Road Transport Union
Litigation Award
CHF
Dec. 31, 2014
International Road Transport Union
Litigation Award
CHF
Jan. 26, 2015
International Road Transport Union
Litigation USD Denominated Award
USD ($)
Dec. 2, 2014
International Road Transport Union
Litigation USD Denominated Award
USD ($)
Jun. 1, 2007
International Road Transport Union
Litigation USD Denominated Award
USD ($)
Dec. 31, 2014
International Road Transport Union
Litigation USD Denominated Award
USD ($)
Jun. 1, 2007
International Road Transport Union
Litigation Expenses and Interest
USD ($)
Dec. 20, 2016
Pending Litigation
Trustees Of Gleeds Pension Fund 2016
GBP (Ł)
Sep. 30, 2017
Pending Litigation
Trustees Of Gleeds Pension Fund 2016
USD ($)
Sep. 30, 2017
Pending Litigation
Lyttleton Port Company Limited
USD ($)
Jun. 29, 2015
Pending Litigation
Lyttleton Port Company Limited
NZD ($)
Sep. 30, 2017
Pending Litigation
Christchurch City Council
USD ($)
Sep. 30, 2017
Minimum
USD ($)
Sep. 30, 2017
Maximum
USD ($)
Dec. 31, 2016
Aviation and Aerospace Broking Industry
USD ($)
Sep. 30, 2017
Discontinued Operations, Disposed of by Sale
Tempo Business
Property Lease Guarantee
USD ($)
Sep. 30, 2017
Discontinued Operations, Disposed of by Sale
Tempo Business
Property Lease Guarantee
USD ($)
Sep. 30, 2017
Discontinued Operations, Disposed of by Sale
Tempo Business
Performance Guarantee
USD ($)
Sep. 30, 2017
Discontinued Operations, Disposed of by Sale
Tempo Business
Performance Guarantee
USD ($)
Oct. 3, 2017
Subsequent Event
Pending Litigation
Christchurch City Council
NZD ($)
Legal, Guarantees and Indemnifications
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimate of possible loss
 
 
 
 
 
$ 61,000,000 
Ł 45,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 94,000,000 
 
 
 
$ 0 
$ 300,000,000 
 
 
 
 
 
 
Damages sought
 
 
 
 
 
 
 
200,000,000 
 
 
47,000,000 
 
 
 
 
46,000,000 
 
 
 
3,000,000 
 
30,000,000 
70,000,000 
 
133,000,000 
184,000,000 
381,000,000 
 
 
 
 
 
 
 
528,000,000 
Amount of coverage for damages contended by the insurers
 
 
 
 
 
 
 
50,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Difference amount of damages sought by the client
 
 
 
 
 
 
 
150,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Damages awarded
 
 
 
 
 
 
 
 
204,000,000 
200,000,000 
 
 
 
28,000,000 
 
 
27,900,000 
 
 
 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Damages awarded excluding interest and costs
 
 
 
 
 
 
 
 
 
 
17,000,000 
 
 
 
16,800,000 
 
 
 
3,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Case settlement amount
 
 
 
 
 
 
 
 
 
 
 
14,000,000 
12,800,000 
 
 
 
 
4,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement, maximum liability
 
 
 
 
 
 
 
 
 
 
15,000,000 
 
15,000,000.0 
 
 
 
 
344,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
2,340,000,000 
2,201,000,000 
7,089,000,000 
6,759,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
Guarantor obligations, current carrying value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25,000,000 
25,000,000 
4,000,000 
4,000,000 
 
Loss contingency accrual payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum potential funding under commitments
76,000,000 
 
76,000,000 
 
95,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
104,000,000 
104,000,000 
395,000,000 
395,000,000 
 
Letters of credit outstanding
$ 94,000,000 
 
$ 94,000,000 
 
$ 90,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 5 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
segment
Sep. 30, 2017
revenue_line
segment
Sep. 30, 2016
Segment Reporting Information
 
 
 
 
 
Number of reportable segments
 
 
 
 
Number of revenue lines
 
 
 
 
Number of operating segments
 
 
 
Total revenue
$ 2,340 
$ 2,201 
 
$ 7,089 
$ 6,759 
Intersegment Eliminations
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
Total revenue
(5)
(3)
 
(9)
(6)
Commercial Risk Solutions |
Operating Segments
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
Total revenue
917 
884 
 
2,943 
2,835 
Reinsurance Solutions |
Operating Segments
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
Total revenue
355 
329 
 
1,070 
1,032 
Retirement Solutions |
Operating Segments
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
Total revenue
491 
466 
 
1,266 
1,266 
Health Solutions |
Operating Segments
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
Total revenue
293 
265 
 
977 
838 
Data & Analytic Services |
Operating Segments
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
Total revenue
$ 289 
$ 260 
 
$ 842 
$ 794 
Guarantee of Registered Securities (Narrative) (Details)
Sep. 30, 2017
Aon plc
 
Condensed Financial Statements, Captions [Line Items]
 
Parent company's percentage ownership of guarantors
100.00% 
5.00% Senior notes due September 2020
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
5.00% 
8.205% Junior subordinated deferrable interest debentures due January 2027
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
8.205% 
6.25% Senior notes due September 2040
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
6.25% 
4.250% Senior notes due 2042
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
4.25% 
4.45% notes due 2043
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
4.45% 
4.00% notes due 2023
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
4.00% 
2.875% notes due 2026
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
2.875% 
3.50% Notes due June 2024
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
3.50% 
4.60% notes due May 2044
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
4.60% 
4.75% Notes Due May 2045
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
4.75% 
2.80% Senior Notes Due 2021
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
2.80% 
3.875% due in December 2025
 
Condensed Financial Statements, Captions [Line Items]
 
Debt interest rate percentage (as a percent)
3.875% 
Guarantee of Registered Securities - Condensed Consolidating Statement of Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Revenue
 
 
 
 
Total revenue
$ 2,340 
$ 2,201 
$ 7,089 
$ 6,759 
Expenses
 
 
 
 
Compensation and benefits
1,419 
1,300 
4,337 
4,041 
Information technology
109 
99 
295 
281 
Premises
89 
86 
259 
257 
Depreciation of fixed assets
40 
39 
148 
118 
Amortization and impairment of intangible assets
101 
42 
604 
117 
Other general expenses
317 
267 
956 
770 
Total operating expenses
2,075 
1,833 
6,599 
5,584 
Operating income
265 
368 
490 
1,175 
Interest income
10 
20 
Interest expense
(70)
(70)
(211)
(212)
Intercompany interest income (expense)
Intercompany other income (expense)
Other income (expense)
(5)
10 
(20)
27 
Income from continuing operations before income taxes
200 
309 
279 
996 
Income tax benefit (expense)
25 
(139)
127 
Net income from continuing operations
196 
284 
418 
869 
Income (loss) from discontinued operations, net of tax
(4)
42 
857 
102 
Net income (loss) before equity in earnings of subsidiaries
192 
326 
1,275 
971 
Equity in earnings of subsidiaries, net of tax
Net income
192 
326 
1,275 
971 
Less: Net income attributable to noncontrolling interests
30 
27 
Net income attributable to Aon shareholders
185 
319 
1,245 
944 
Aon plc
 
 
 
 
Revenue
 
 
 
 
Total revenue
Expenses
 
 
 
 
Compensation and benefits
25 
25 
85 
76 
Information technology
Premises
Depreciation of fixed assets
Amortization and impairment of intangible assets
Other general expenses
(1)
10 
Total operating expenses
26 
24 
95 
81 
Operating income
(26)
(24)
(95)
(81)
Interest income
Interest expense
(53)
(51)
(144)
(145)
Intercompany interest income (expense)
10 
10 
Intercompany other income (expense)
291 
328 
189 
217 
Other income (expense)
(2)
(5)
(25)
(3)
Income from continuing operations before income taxes
213 
251 
(65)
(2)
Income tax benefit (expense)
(8)
13 
(30)
(33)
Net income from continuing operations
221 
238 
(35)
31 
Income (loss) from discontinued operations, net of tax
Net income (loss) before equity in earnings of subsidiaries
221 
238 
(35)
31 
Equity in earnings of subsidiaries, net of tax
(36)
78 
1,262 
914 
Net income
185 
316 
1,227 
945 
Less: Net income attributable to noncontrolling interests
Net income attributable to Aon shareholders
185 
316 
1,227 
945 
Aon Corporation
 
 
 
 
Revenue
 
 
 
 
Total revenue
Expenses
 
 
 
 
Compensation and benefits
20 
31 
10 
Information technology
Premises
Depreciation of fixed assets
Amortization and impairment of intangible assets
Other general expenses
(3)
Total operating expenses
21 
28 
17 
Operating income
(21)
(7)
(28)
(17)
Interest income
18 
35 
13 
Interest expense
(24)
(24)
(71)
(78)
Intercompany interest income (expense)
(135)
(135)
(407)
(405)
Intercompany other income (expense)
(271)
(277)
(280)
(292)
Other income (expense)
14 
22 
(8)
Income from continuing operations before income taxes
(419)
(438)
(729)
(787)
Income tax benefit (expense)
(81)
(93)
(198)
(219)
Net income from continuing operations
(338)
(345)
(531)
(568)
Income (loss) from discontinued operations, net of tax
Net income (loss) before equity in earnings of subsidiaries
(338)
(345)
(531)
(568)
Equity in earnings of subsidiaries, net of tax
122 
225 
1,028 
836 
Net income
(216)
(120)
497 
268 
Less: Net income attributable to noncontrolling interests
Net income attributable to Aon shareholders
(216)
(120)
497 
268 
Other Non-Guarantor Subsidiaries
 
 
 
 
Revenue
 
 
 
 
Total revenue
2,340 
2,201 
7,089 
6,759 
Expenses
 
 
 
 
Compensation and benefits
1,374 
1,271 
4,221 
3,955 
Information technology
109 
99 
295 
281 
Premises
89 
86 
259 
257 
Depreciation of fixed assets
40 
39 
148 
118 
Amortization and impairment of intangible assets
101 
42 
604 
117 
Other general expenses
315 
265 
949 
758 
Total operating expenses
2,028 
1,802 
6,476 
5,486 
Operating income
312 
399 
613 
1,273 
Interest income
14 
Interest expense
(1)
(3)
(11)
(10)
Intercompany interest income (expense)
132 
132 
397 
395 
Intercompany other income (expense)
(20)
(51)
91 
75 
Other income (expense)
(17)
11 
(35)
39 
Income from continuing operations before income taxes
406 
493 
1,055 
1,786 
Income tax benefit (expense)
93 
105 
89 
379 
Net income from continuing operations
313 
388 
966 
1,407 
Income (loss) from discontinued operations, net of tax
(4)
42 
857 
102 
Net income (loss) before equity in earnings of subsidiaries
309 
430 
1,823 
1,509 
Equity in earnings of subsidiaries, net of tax
(216)
(120)
497 
268 
Net income
93 
310 
2,320 
1,777 
Less: Net income attributable to noncontrolling interests
30 
27 
Net income attributable to Aon shareholders
86 
303 
2,290 
1,750 
Consolidation Adjustments
 
 
 
 
Revenue
 
 
 
 
Total revenue
Expenses
 
 
 
 
Compensation and benefits
Information technology
Premises
Depreciation of fixed assets
Amortization and impairment of intangible assets
Other general expenses
Total operating expenses
Operating income
Interest income
(8)
(8)
(15)
(21)
Interest expense
15 
21 
Intercompany interest income (expense)
Intercompany other income (expense)
Other income (expense)
18 
(1)
Income from continuing operations before income taxes
18 
(1)
Income tax benefit (expense)
Net income from continuing operations
18 
(1)
Income (loss) from discontinued operations, net of tax
Net income (loss) before equity in earnings of subsidiaries
18 
(1)
Equity in earnings of subsidiaries, net of tax
130 
(183)
(2,787)
(2,018)
Net income
130 
(180)
(2,769)
(2,019)
Less: Net income attributable to noncontrolling interests
Net income attributable to Aon shareholders
$ 130 
$ (180)
$ (2,769)
$ (2,019)
Guarantee of Registered Securities - Condensed Consolidating Statement of Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income (loss)
$ 192 
$ 326 
$ 1,275 
$ 971 
Net income (loss) before equity in earnings of subsidiaries
192 
326 
1,275 
971 
Less: Net income attributable to noncontrolling interests
30 
27 
Net income attributable to Aon shareholders
185 
319 
1,245 
944 
Change in fair value of financial instruments
11 
13 
(11)
Foreign currency translation adjustments
243 
(89)
434 
(227)
Postretirement benefit obligation
18 
18 
56 
(132)
Total other comprehensive (loss) income
272 
(71)
503 
(370)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
Less: Other comprehensive loss attributable to noncontrolling interests
Total other comprehensive income (loss) attributable to Aon shareholders
265 
(71)
500 
(370)
Comprehensive income (loss) attributable to Aon shareholders
450 
248 
1,745 
574 
Aon plc
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income (loss)
185 
316 
1,227 
945 
Net income (loss) before equity in earnings of subsidiaries
221 
238 
(35)
31 
Less: Net income attributable to noncontrolling interests
Net income attributable to Aon shareholders
185 
316 
1,227 
945 
Change in fair value of financial instruments
Foreign currency translation adjustments
(2)
Postretirement benefit obligation
Total other comprehensive (loss) income
(2)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
265 
(68)
518 
(369)
Less: Other comprehensive loss attributable to noncontrolling interests
Total other comprehensive income (loss) attributable to Aon shareholders
265 
(68)
518 
(371)
Comprehensive income (loss) attributable to Aon shareholders
450 
248 
1,745 
574 
Aon Corporation
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income (loss)
(216)
(120)
497 
268 
Net income (loss) before equity in earnings of subsidiaries
(338)
(345)
(531)
(568)
Less: Net income attributable to noncontrolling interests
Net income attributable to Aon shareholders
(216)
(120)
497 
268 
Change in fair value of financial instruments
Foreign currency translation adjustments
22 
Postretirement benefit obligation
23 
23 
Total other comprehensive (loss) income
10 
26 
46 
Equity in other comprehensive income (loss) of subsidiaries, net of tax
245 
(83)
480 
(425)
Less: Other comprehensive loss attributable to noncontrolling interests
Total other comprehensive income (loss) attributable to Aon shareholders
255 
(74)
506 
(379)
Comprehensive income (loss) attributable to Aon shareholders
39 
(194)
1,003 
(111)
Other Non-Guarantor Subsidiaries
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income (loss)
93 
310 
2,320 
1,777 
Net income (loss) before equity in earnings of subsidiaries
309 
430 
1,823 
1,509 
Less: Net income attributable to noncontrolling interests
30 
27 
Net income attributable to Aon shareholders
86 
303 
2,290 
1,750 
Change in fair value of financial instruments
(1)
10 
(12)
Foreign currency translation adjustments
243 
(87)
452 
(248)
Postretirement benefit obligation
11 
11 
33 
(155)
Total other comprehensive (loss) income
262 
(77)
495 
(415)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
255 
(74)
506 
(379)
Less: Other comprehensive loss attributable to noncontrolling interests
Total other comprehensive income (loss) attributable to Aon shareholders
510 
(151)
998 
(794)
Comprehensive income (loss) attributable to Aon shareholders
596 
152 
3,288 
956 
Consolidation Adjustments
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income (loss)
130 
(180)
(2,769)
(2,019)
Net income (loss) before equity in earnings of subsidiaries
18 
(1)
Less: Net income attributable to noncontrolling interests
Net income attributable to Aon shareholders
130 
(180)
(2,769)
(2,019)
Change in fair value of financial instruments
Foreign currency translation adjustments
(3)
(18)
Postretirement benefit obligation
Total other comprehensive (loss) income
(3)
(18)
Equity in other comprehensive income (loss) of subsidiaries, net of tax
(765)
225 
(1,504)
1,173 
Less: Other comprehensive loss attributable to noncontrolling interests
Total other comprehensive income (loss) attributable to Aon shareholders
(765)
222 
(1,522)
1,174 
Comprehensive income (loss) attributable to Aon shareholders
$ (635)
$ 42 
$ (4,291)
$ (845)
Guarantee of Registered Securities - Condensed Consolidating Statement of Financial Position (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
CURRENT ASSETS :
 
 
Cash and cash equivalents
$ 749 
$ 426 
Short-term investments
1,640 
290 
Receivables, net
2,068 
2,106 
Fiduciary assets
9,292 
8,959 
Intercompany receivables
Other current assets
518 
247 
Current assets of discontinued operations
1,118 
Total Current Assets
14,267 
13,146 
Goodwill
7,888 
7,410 
Intangible assets, net
1,341 
1,890 
Fixed assets, net
545 
550 
Deferred tax assets
565 
325 
Intercompany receivables
Prepaid pension
1,020 
858 
Other non-current assets
298 
360 
Investment in subsidiary
Non-current assets of discontinued operations
2,076 
TOTAL ASSETS
25,924 
26,615 
CURRENT LIABILITIES
 
 
Accounts payable and accrued liabilities
1,588 
1,604 
Short-term debt and current portion of long-term debt
305 
336 
Fiduciary liabilities
9,292 
8,959 
Intercompany payables
Other current liabilities
1,289 
656 
Current liabilities of discontinued operations
940 
Total Current Liabilities
12,474 
12,495 
Long-term debt
5,662 
5,869 
Deferred tax liabilities
83 
101 
Pension, other postretirement and postemployment liabilities
1,612 
1,760 
Intercompany payables
Other non-current liabilities
846 
719 
Non-current liabilities of discontinued operations
139 
TOTAL LIABILITIES
20,677 
21,083 
TOTAL AON SHAREHOLDERS’ EQUITY
5,175 
5,475 
Noncontrolling interests
72 
57 
TOTAL EQUITY
5,247 
5,532 
TOTAL LIABILITIES AND EQUITY
25,924 
26,615 
Aon plc
 
 
CURRENT ASSETS :
 
 
Cash and cash equivalents
Short-term investments
Receivables, net
Fiduciary assets
Intercompany receivables
110 
105 
Other current assets
Current assets of discontinued operations
Total Current Assets
110 
105 
Goodwill
Intangible assets, net
Fixed assets, net
Deferred tax assets
135 
134 
Intercompany receivables
391 
366 
Prepaid pension
Other non-current assets
Investment in subsidiary
11,900 
10,107 
Non-current assets of discontinued operations
TOTAL ASSETS
12,537 
10,714 
CURRENT LIABILITIES
 
 
Accounts payable and accrued liabilities
2,929 
585 
Short-term debt and current portion of long-term debt
279 
Fiduciary liabilities
Intercompany payables
147 
142 
Other current liabilities
24 
Current liabilities of discontinued operations
Total Current Liabilities
3,100 
1,006 
Long-term debt
4,247 
4,177 
Deferred tax liabilities
Pension, other postretirement and postemployment liabilities
Intercompany payables
Other non-current liabilities
15 
Non-current liabilities of discontinued operations
TOTAL LIABILITIES
7,362 
5,191 
TOTAL AON SHAREHOLDERS’ EQUITY
5,175 
5,523 
Noncontrolling interests
TOTAL EQUITY
5,175 
5,523 
TOTAL LIABILITIES AND EQUITY
12,537 
10,714 
Aon Corporation
 
 
CURRENT ASSETS :
 
 
Cash and cash equivalents
3,110 
1,633 
Short-term investments
1,467 
140 
Receivables, net
Fiduciary assets
Intercompany receivables
4,860 
1,880 
Other current assets
37 
25 
Current assets of discontinued operations
Total Current Assets
9,476 
3,681 
Goodwill
Intangible assets, net
Fixed assets, net
Deferred tax assets
664 
726 
Intercompany receivables
261 
261 
Prepaid pension
Other non-current assets
49 
119 
Investment in subsidiary
17,748 
17,131 
Non-current assets of discontinued operations
TOTAL ASSETS
28,203 
21,923 
CURRENT LIABILITIES
 
 
Accounts payable and accrued liabilities
37 
44 
Short-term debt and current portion of long-term debt
50 
Fiduciary liabilities
Intercompany payables
15,951 
10,399 
Other current liabilities
54 
63 
Current liabilities of discontinued operations
Total Current Liabilities
16,042 
10,556 
Long-term debt
1,414 
1,413 
Deferred tax liabilities
Pension, other postretirement and postemployment liabilities
1,234 
1,356 
Intercompany payables
8,894 
8,877 
Other non-current liabilities
110 
77 
Non-current liabilities of discontinued operations
TOTAL LIABILITIES
27,694 
22,279 
TOTAL AON SHAREHOLDERS’ EQUITY
509 
(356)
Noncontrolling interests
TOTAL EQUITY
509 
(356)
TOTAL LIABILITIES AND EQUITY
28,203 
21,923 
Other Non-Guarantor Subsidiaries
 
 
CURRENT ASSETS :
 
 
Cash and cash equivalents
802 
655 
Short-term investments
173 
150 
Receivables, net
2,066 
2,103 
Fiduciary assets
9,292 
8,959 
Intercompany receivables
12,436 
9,825 
Other current assets
481 
222 
Current assets of discontinued operations
1,118 
Total Current Assets
25,250 
23,032 
Goodwill
7,888 
7,410 
Intangible assets, net
1,341 
1,890 
Fixed assets, net
545 
550 
Deferred tax assets
173 
171 
Intercompany receivables
8,728 
8,711 
Prepaid pension
1,015 
853 
Other non-current assets
248 
239 
Investment in subsidiary
509 
(356)
Non-current assets of discontinued operations
2,076 
TOTAL ASSETS
45,697 
44,576 
CURRENT LIABILITIES
 
 
Accounts payable and accrued liabilities
1,785 
2,837 
Short-term debt and current portion of long-term debt
305 
Fiduciary liabilities
9,292 
8,959 
Intercompany payables
1,308 
1,269 
Other current liabilities
1,211 
593 
Current liabilities of discontinued operations
940 
Total Current Liabilities
13,901 
14,605 
Long-term debt
279 
Deferred tax liabilities
490 
759 
Pension, other postretirement and postemployment liabilities
378 
404 
Intercompany payables
486 
461 
Other non-current liabilities
721 
634 
Non-current liabilities of discontinued operations
139 
TOTAL LIABILITIES
15,977 
17,281 
TOTAL AON SHAREHOLDERS’ EQUITY
29,648 
27,238 
Noncontrolling interests
72 
57 
TOTAL EQUITY
29,720 
27,295 
TOTAL LIABILITIES AND EQUITY
45,697 
44,576 
Consolidation Adjustments
 
 
CURRENT ASSETS :
 
 
Cash and cash equivalents
(3,163)
(1,862)
Short-term investments
Receivables, net
Fiduciary assets
Intercompany receivables
(17,406)
(11,810)
Other current assets
Current assets of discontinued operations
Total Current Assets
(20,569)
(13,672)
Goodwill
Intangible assets, net
Fixed assets, net
Deferred tax assets
(407)
(706)
Intercompany receivables
(9,380)
(9,338)
Prepaid pension
Other non-current assets
Investment in subsidiary
(30,157)
(26,882)
Non-current assets of discontinued operations
TOTAL ASSETS
(60,513)
(50,598)
CURRENT LIABILITIES
 
 
Accounts payable and accrued liabilities
(3,163)
(1,862)
Short-term debt and current portion of long-term debt
Fiduciary liabilities
Intercompany payables
(17,406)
(11,810)
Other current liabilities
Current liabilities of discontinued operations
Total Current Liabilities
(20,569)
(13,672)
Long-term debt
Deferred tax liabilities
(407)
(658)
Pension, other postretirement and postemployment liabilities
Intercompany payables
(9,380)
(9,338)
Other non-current liabilities
Non-current liabilities of discontinued operations
TOTAL LIABILITIES
(30,356)
(23,668)
TOTAL AON SHAREHOLDERS’ EQUITY
(30,157)
(26,930)
Noncontrolling interests
TOTAL EQUITY
(30,157)
(26,930)
TOTAL LIABILITIES AND EQUITY
$ (60,513)
$ (50,598)
Guarantee of Registered Securities - Condensed Consolidating Statement of Cash Flows (Details) (USD $)
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Cash provided by operating activities - continuing operations
$ 289,000,000 
$ 1,152,000,000 
Cash provided by operating activities - discontinued operations
64,000,000 
323,000,000 
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
353,000,000 
1,475,000,000 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Proceeds from investments
43,000,000 
31,000,000 
Payments for investments
(55,000,000)
(47,000,000)
Net purchases of short-term investments - non-fiduciary
(1,344,000,000)
(108,000,000)
Acquisition of businesses, net of cash acquired
(172,000,000)
(198,000,000)
Sale of businesses, net of cash sold
4,194,000,000 
104,000,000 
Capital expenditures
(125,000,000)
(107,000,000)
Cash provided by (used for) investing activities - continuing operations
2,541,000,000 
(325,000,000)
Cash used for investing activities - discontinued operations
(19,000,000)
(46,000,000)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
2,522,000,000 
(371,000,000)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Share repurchase
(1,888,000,000)
(1,037,000,000)
Advances from (to) affiliates
Issuance of shares for employee benefit plans
(118,000,000)
(70,000,000)
Issuance of debt
1,651,000,000 
2,729,000,000 
Repayment of debt
(1,998,000,000)
(2,308,000,000)
Cash dividends to shareholders
(274,000,000)
(258,000,000)
Noncontrolling interests and other financing activities
(21,000,000)
(71,000,000)
Cash provided by (used for) financing activities - continuing operations
(2,648,000,000)
(1,015,000,000)
Cash used for financing activities - discontinued operations
CASH USED FOR FINANCING ACTIVITIES
(2,648,000,000)
(1,015,000,000)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
91,000,000 
10,000,000 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
318,000,000 
99,000,000 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
431,000,000 
384,000,000 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
749,000,000 
483,000,000 
Cash and cash equivalents from discontinued operations
3,000,000 
Aon plc
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Cash provided by operating activities - continuing operations
(135,000,000)
219,000,000 
Cash provided by operating activities - discontinued operations
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
(135,000,000)
219,000,000 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Proceeds from investments
Payments for investments
(16,000,000)
Net purchases of short-term investments - non-fiduciary
Acquisition of businesses, net of cash acquired
Sale of businesses, net of cash sold
Capital expenditures
Cash provided by (used for) investing activities - continuing operations
(16,000,000)
Cash used for investing activities - discontinued operations
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
(16,000,000)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Share repurchase
(1,888,000,000)
(1,037,000,000)
Advances from (to) affiliates
2,722,000,000 
166,000,000 
Issuance of shares for employee benefit plans
(118,000,000)
(70,000,000)
Issuance of debt
544,000,000 
1,588,000,000 
Repayment of debt
(835,000,000)
(608,000,000)
Cash dividends to shareholders
(274,000,000)
(258,000,000)
Noncontrolling interests and other financing activities
Cash provided by (used for) financing activities - continuing operations
151,000,000 
(219,000,000)
Cash used for financing activities - discontinued operations
CASH USED FOR FINANCING ACTIVITIES
151,000,000 
(219,000,000)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT END OF PERIOD
Aon Corporation
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Cash provided by operating activities - continuing operations
999,000,000 
(664,000,000)
Cash provided by operating activities - discontinued operations
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
999,000,000 
(664,000,000)
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Proceeds from investments
576,000,000 
19,000,000 
Payments for investments
(25,000,000)
(25,000,000)
Net purchases of short-term investments - non-fiduciary
(1,328,000,000)
(99,000,000)
Acquisition of businesses, net of cash acquired
1,000,000 
Sale of businesses, net of cash sold
Capital expenditures
Cash provided by (used for) investing activities - continuing operations
(776,000,000)
(105,000,000)
Cash used for investing activities - discontinued operations
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
(776,000,000)
(105,000,000)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Share repurchase
Advances from (to) affiliates
1,304,000,000 
356,000,000 
Issuance of shares for employee benefit plans
Issuance of debt
1,100,000,000 
1,141,000,000 
Repayment of debt
(1,150,000,000)
(1,692,000,000)
Cash dividends to shareholders
Noncontrolling interests and other financing activities
Cash provided by (used for) financing activities - continuing operations
1,254,000,000 
(195,000,000)
Cash used for financing activities - discontinued operations
CASH USED FOR FINANCING ACTIVITIES
1,254,000,000 
(195,000,000)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1,477,000,000 
(964,000,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
1,633,000,000 
2,083,000,000 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
3,110,000,000 
1,119,000,000 
Other Non-Guarantor Subsidiaries
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Cash provided by operating activities - continuing operations
987,000,000 
1,597,000,000 
Cash provided by operating activities - discontinued operations
64,000,000 
323,000,000 
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
1,051,000,000 
1,920,000,000 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Proceeds from investments
11,000,000 
12,000,000 
Payments for investments
(571,000,000)
(22,000,000)
Net purchases of short-term investments - non-fiduciary
(16,000,000)
(9,000,000)
Acquisition of businesses, net of cash acquired
(173,000,000)
(198,000,000)
Sale of businesses, net of cash sold
4,194,000,000 
104,000,000 
Capital expenditures
(125,000,000)
(107,000,000)
Cash provided by (used for) investing activities - continuing operations
3,320,000,000 
(220,000,000)
Cash used for investing activities - discontinued operations
(19,000,000)
(46,000,000)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
3,301,000,000 
(266,000,000)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Share repurchase
Advances from (to) affiliates
(4,274,000,000)
(670,000,000)
Issuance of shares for employee benefit plans
Issuance of debt
7,000,000 
Repayment of debt
(13,000,000)
(8,000,000)
Cash dividends to shareholders
Noncontrolling interests and other financing activities
(21,000,000)
(71,000,000)
Cash provided by (used for) financing activities - continuing operations
(4,301,000,000)
(749,000,000)
Cash used for financing activities - discontinued operations
CASH USED FOR FINANCING ACTIVITIES
(4,301,000,000)
(749,000,000)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
91,000,000 
10,000,000 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
142,000,000 
915,000,000 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
660,000,000 
1,242,000,000 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
802,000,000 
2,157,000,000 
Consolidation Adjustments
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Cash provided by operating activities - continuing operations
(1,562,000,000)
Cash provided by operating activities - discontinued operations
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
(1,562,000,000)
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Proceeds from investments
(544,000,000)
Payments for investments
557,000,000 
Net purchases of short-term investments - non-fiduciary
Acquisition of businesses, net of cash acquired
Sale of businesses, net of cash sold
Capital expenditures
Cash provided by (used for) investing activities - continuing operations
13,000,000 
Cash used for investing activities - discontinued operations
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
13,000,000 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Share repurchase
Advances from (to) affiliates
248,000,000 
148,000,000 
Issuance of shares for employee benefit plans
Issuance of debt
Repayment of debt
Cash dividends to shareholders
Noncontrolling interests and other financing activities
Cash provided by (used for) financing activities - continuing operations
248,000,000 
148,000,000 
Cash used for financing activities - discontinued operations
CASH USED FOR FINANCING ACTIVITIES
248,000,000 
148,000,000 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(1,301,000,000)
148,000,000 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
(1,862,000,000)
(2,941,000,000)
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ (3,163,000,000)
$ (2,793,000,000)