UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
ý       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED June 30, 2017
 
OR
 
o          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number 1-7933

Aon plc
(Exact Name of Registrant as Specified in Its Charter)

	
			
ENGLAND AND WALES	 	98-1030901	
(State or Other Jurisdiction of	 	(I.R.S. Employer	
Incorporation or Organization)	 	Identification No.)	

	
			
122 LEADENHALL STREET, LONDON, ENGLAND	 	EC3V 4AN	
(Address of Principal Executive Offices)	 	(Zip Code)	
+44 20 7623 5500
(Registrant’s Telephone Number,
Including Area Code)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES  ý   NO  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES  ý   NO  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

			
Large accelerated filer x	 	Accelerated filer o	
Non-accelerated filer o	 	Smaller reporting company o	
(Do not check if a smaller reporting company)	 	Emerging growth company o	

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o NO ý
 
Number of Class A Ordinary Shares of Aon plc, $0.01 nominal value, outstanding as of August 3, 2017 :  254,337,319

	

Table of Contents

		
PART I	
 	 	
 	Item 1. Financial Statements	
 	Aon plc Condensed Consolidated Statements of Income	
 	Aon plc Condensed Consolidated Statements of Comprehensive Income	
 	Aon plc Condensed Consolidated Statements of Financial Position	
 	Aon plc Condensed Consolidated Statement of Shareholders’ Equity	
 	Aon plc Condensed Consolidated Statements of Cash Flows	
 	Notes to Condensed Consolidated Financial Statements	
 	 	
 	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	
 	Item 3. Quantitative and Qualitative Disclosures about Market Risk	
 	Item 4. Controls and Procedures	
 	 	
PART II	
 	 	
 	Item 1. Legal Proceedings	
 	Item 1A. Risk Factors	
 	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	
 	Item 3. Default Upon Senior Securities	
 	Item 4. Mine Safety Disclosures	
 	Item 5. Other Information	
 	Item 6. Exhibits	
 	Signature	
 	Exhibit Index	

Part I Financial Information
Item 1. Financial Statements
 
Aon plc
Condensed Consolidated Statements of Income
(Unaudited)  

																	
 	 	Three Months Ended	 	Six Months Ended	
(millions, except per share data)	 	June 30, 2017	 	June 30, 2016	 	June 30, 2017	 	June 30, 2016	
Revenue	 	 		 	 		 	 	 	 	
Total revenue	 	$	2,368		 	$	2,282		 	$	4,749		 	$	4,558		
Expenses	 	 		 	 		 	 	 	 	
Compensation and benefits	 	1,457		 	1,396		 	2,918		 	2,741		
Information technology	 	98		 	99		 	186		 	182		
Premises	 	86		 	89		 	170		 	171		
Depreciation of fixed assets	 	54		 	41		 	108		 	79		
Amortization and impairment of intangible assets	 	460		 	38		 	503		 	75		
Other general expenses	 	331		 	232		 	639		 	503		
Total operating expenses	 	2,486		 	1,895		 	4,524		 	3,751		
Operating income	 	(118	)	 	387		 	225		 	807		
Interest income	 	8		 	3		 	10		 	5		
Interest expense	 	(71	)	 	(73	)	 	(141	)	 	(142	)	
Other income (expense)	 	(5	)	 	(1	)	 	(15	)	 	17		
Income (loss) from continuing operations before income taxes	 	(186	)	 	316		 	79		 	687		
Income tax expense (benefit)	 	(143	)	 	43		 	(143	)	 	102		
Net income (loss) from continuing operations	 	(43	)	 	273		 	222		 	585		
Income from discontinued operations, net of tax	 	821		 	35		 	861		 	60		
Net income	 	778		 	308		 	1,083		 	645		
Less: Net income attributable to noncontrolling interests	 	9		 	8		 	23		 	20		
Net income attributable to Aon shareholders	 	$	769		 	$	300		 	$	1,060		 	$	625		
 	 	 	 	 	 	 	 	 	
Basic net income (loss) per share attributable to Aon shareholders	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(0.20	)	 	$	0.99		 	$	0.75		 	$	2.10		
Discontinued operations	 	3.13		 	0.13		 	3.27		 	0.22		
Net income	 	$	2.93		 	$	1.12		 	$	4.02		 	$	2.32		
Diluted net income (loss) per share attributable to Aon shareholders	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(0.20	)	 	$	0.98		 	$	0.75		 	$	2.08		
Discontinued operations	 	3.13		 	0.13		 	3.24		 	0.22		
Net income	 	$	2.93		 	$	1.11		 	$	3.99		 	$	2.30		
Cash dividends per share paid on ordinary shares	 	$	0.36		 	$	0.33		 	$	0.69		 	$	0.63		
Weighted average ordinary shares outstanding - basic	 	262.4		 	268.0		 	263.6		 	269.9		
Weighted average ordinary shares outstanding - diluted	 	262.4		 	269.8		 	265.7		 	271.7		
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

2

Aon plc
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)  

																	
 	 	Three Months Ended	 	Six Months Ended	
(millions)	 	June 30, 2017	 	June 30, 2016	 	June 30, 2017	 	June 30, 2016	
Net income	 	$	778		 	$	308		 	$	1,083		 	$	645		
Less: Net income attributable to noncontrolling interests	 	9		 	8		 	23		 	20		
Net income attributable to Aon shareholders	 	$	769		 	$	300		 	$	1,060		 	$	625		
Other comprehensive income (loss), net of tax:	 	 		 	 		 	 		 	 		
Change in fair value of financial instruments	 	4		 	(4	)	 	2		 	(11	)	
Foreign currency translation adjustments	 	44		 	(59	)	 	191		 	(138	)	
Postretirement benefit obligation	 	20		 	51		 	38		 	(150	)	
Total other comprehensive income (loss)	 	68		 	(12	)	 	231		 	(299	)	
Less: Other comprehensive income attributable to noncontrolling interests	 	(5	)	 	—		 	(4	)	 	—		
Total other comprehensive income (loss) attributable to Aon shareholders	 	73		 	(12	)	 	235		 	(299	)	
Comprehensive income attributable to Aon shareholders	 	$	842		 	$	288		 	$	1,295		 	$	326		
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

3

Aon plc
Condensed Consolidated Statements of Financial Position
(Unaudited)

									
(millions, except nominal value)	 	June 30,
2017	 	December 31,
2016	
ASSETS	 	 		 	 		
CURRENT ASSETS	 	 		 	 		
Cash and cash equivalents	 	$	684		 	$	426		
Short-term investments	 	2,746		 	290		
Receivables, net	 	2,191		 	2,106		
Fiduciary assets  	 	9,582		 	8,959		
Other current assets	 	399		 	247		
Current assets of discontinued operations	 	—		 	1,118		
Total Current Assets	 	15,602		 	13,146		
Goodwill	 	7,745		 	7,410		
Intangible assets, net	 	1,402		 	1,890		
Fixed assets, net	 	556		 	550		
Deferred tax assets	 	575		 	325		
Prepaid pension	 	941		 	858		
Other non-current assets	 	368		 	360		
Non-current assets of discontinued operations	 	—		 	2,076		
TOTAL ASSETS	 	$	27,189		 	$	26,615		
 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		
LIABILITIES	 	 		 	 		
CURRENT LIABILITIES	 	 		 	 		
Accounts payable and accrued liabilities	 	$	1,423		 	$	1,604		
Short-term debt and current portion of long-term debt	 	292		 	336		
Fiduciary liabilities	 	9,582		 	8,959		
Other current liabilities	 	2,078		 	656		
Current liabilities of discontinued operations	 	—		 	940		
Total Current Liabilities	 	13,375		 	12,495		
Long-term debt	 	5,631		 	5,869		
Deferred tax liabilities	 	84		 	101		
Pension, other postretirement and postemployment liabilities	 	1,688		 	1,760		
Other non-current liabilities	 	858		 	719		
Non-current liabilities of discontinued operations	 	—		 	139		
TOTAL LIABILITIES	 	21,636		 	21,083		
 	 	 	 	 	
EQUITY	 	 		 	 		
Ordinary shares - $0.01 nominal value
Authorized: 750 shares (issued: 2017 - 255.7; 2016 - 262.0)	 	3		 	3		
Additional paid-in capital	 	5,587		 	5,577		
Retained earnings	 	3,574		 	3,807		
Accumulated other comprehensive loss	 	(3,677	)	 	(3,912	)	
TOTAL AON SHAREHOLDERS' EQUITY	 	5,487		 	5,475		
Noncontrolling interests	 	66		 	57		
TOTAL EQUITY	 	5,553		 	5,532		
TOTAL LIABILITIES AND EQUITY	 	$	27,189		 	$	26,615		
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

4

Aon plc
Condensed Consolidated Statement of Shareholders’ Equity
(Unaudited)  

																								
(millions)	 	Shares	 	Ordinary
Shares and
Additional
Paid-in Capital	 	Retained
Earnings	 	Accumulated Other
Comprehensive
Loss, Net of Tax	 	Non-
controlling
Interests	 	Total	
Balance at December 31, 2016	 	262.0		 	$	5,580		 	$	3,807		 	$	(3,912	)	 	$	57		 	$	5,532		
Adoption of new accounting guidance	 	—		 	—		 	49		 	—		 	—		 	49		
Balance at January 1, 2017	 	262.0		 	5,580		 	3,856		 	(3,912	)	 	57		 	5,581		
Net income	 	—		 	—		 	1,060		 	—		 	23		 	1,083		
Shares issued - employee stock compensation plans	 	2.9		 	(138	)	 	—		 	—		 	—		 	(138	)	
Shares purchased	 	(9.2	)	 	—		 	(1,160	)	 	—		 	—		 	(1,160	)	
Share-based compensation expense	 	—		 	148		 	—		 	—		 	—		 	148		
Dividends to shareholders	 	—		 	—		 	(182	)	 	—		 	—		 	(182	)	
Net change in fair value of financial instruments	 	—		 	—		 	—		 	2		 	—		 	2		
Net foreign currency translation adjustments	 	—		 	—		 	—		 	195		 	(4	)	 	191		
Net postretirement benefit obligation	 	—		 	—		 	—		 	38		 	—		 	38		
Purchases of shares from noncontrolling interests	 	—		 	—		 	—		 	—		 	(1	)	 	(1	)	
Dividends paid to noncontrolling interests on subsidiary common stock	 	—		 	—		 	—		 	—		 	(9	)	 	(9	)	
Balance at June 30, 2017	 	255.7		 	$	5,590		 	$	3,574		 	$	(3,677	)	 	$	66		 	$	5,553		
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

5

Aon plc
Condensed Consolidated Statements of Cash Flows
(Unaudited) 

									
 	 	Six Months Ended	
(millions)	 	June 30, 2017	 	June 30, 2016	
CASH FLOWS FROM OPERATING ACTIVITIES	 	 		 	 		
Net income	 	$	1,083		 	$	645		
Less: Income from discontinued operations, net of income taxes	 	861		 	60		
Adjustments to reconcile net income to cash provided by operating activities:	 	 		 	 		
Loss (gain) from sales of businesses and investments, net	 	3		 	(41	)	
Depreciation of fixed assets	 	108		 	79		
Amortization and impairment of intangible assets	 	503		 	75		
Share-based compensation expense	 	148		 	144		
Deferred income taxes	 	(227	)	 	15		
Change in assets and liabilities:	 	 		 	 		
Fiduciary receivables	 	10		 	96		
Short-term investments — funds held on behalf of clients	 	(286	)	 	(409	)	
Fiduciary liabilities	 	275		 	313		
Receivables, net	 	(25	)	 	46		
Accounts payable and accrued liabilities	 	(377	)	 	(335	)	
Restructuring reserves	 	178		 	—		
Current income taxes	 	(25	)	 	(62	)	
Pension, other postretirement and other postemployment liabilities	 	(101	)	 	(28	)	
Other assets and liabilities	 	30		 	79		
Cash provided by operating activities - continuing operations	 	436		 	557		
Cash provided by operating activities - discontinued operations	 	64		 	207		
CASH PROVIDED BY OPERATING ACTIVITIES	 	500		 	764		
CASH FLOWS FROM INVESTING ACTIVITIES	 	 		 	 		
Proceeds from investments	 	29		 	23		
Payments for investments	 	(32	)	 	(29	)	
Net sale (purchases) of short-term investments — non-fiduciary	 	(2,451	)	 	106		
Acquisition of businesses, net of cash acquired	 	(149	)	 	(183	)	
Sale of businesses, net of cash sold	 	4,193		 	103		
Capital expenditures	 	(82	)	 	(68	)	
Cash provided by (used for) investing activities - continuing operations	 	1,508		 	(48	)	
Cash used for investing activities - discontinued operations	 	(19	)	 	(36	)	
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	 	1,489		 	(84	)	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 		 	 		
Share repurchase	 	(1,100	)	 	(750	)	
Issuance of shares for employee benefit plans	 	(139	)	 	(87	)	
Issuance of debt	 	1,651		 	2,056		
Repayment of debt	 	(1,990	)	 	(1,632	)	
Cash dividends to shareholders	 	(182	)	 	(169	)	
Noncontrolling interests and other financing activities	 	(10	)	 	(62	)	
Cash used for financing activities - continuing operations	 	(1,770	)	 	(644	)	
Cash used for financing activities - discontinued operations	 	—		 	—		
CASH USED FOR FINANCING ACTIVITIES	 	(1,770	)	 	(644	)	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	34		 	18		
NET INCREASE IN CASH AND CASH EQUIVALENTS	 	253		 	54		
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	 	431		 	384		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	684		 	$	438		
Supplemental disclosures:	 	 		 	 		
Interest paid	 	$	144		 	$	144		
Income taxes paid, net of refunds	 	$	108		 	$	89		
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

6

Notes to Condensed Consolidated Financial Statements (Unaudited)
1.  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 six months ended June 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 Notes to the 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 as a global professional services firm 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.

7

2. 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 $19 million , or $0.07 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 June 30, 2017 , and $48 million , or $0.18 per share, for the six months ended June 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
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 income statement 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 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 the second step of the test. An entity will apply a one-step quantitative test and record the amount of

8

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 impact and period of adoption 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, 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 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.

9

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 and is evaluating both methods of transition; however, it is currently anticipated that a modified retrospective adoption approach will be used.
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 that will be impacted by 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 for certain brokerage activities over a period of time either due to the transfer of value to customers or as the remuneration becomes determinable. Under the new standard, this revenue 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. The Company is currently assessing the timing and measurement of revenue recognition under the new standard for certain other services.
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. These costs are currently expensed as incurred under existing U.S. GAAP. Assets recognized for the costs to obtain a contract 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 as costs to fulfill a contract will be amortized on a systematic basis that is consistent with the transfer of the services to which the asset relates, which is expected to commonly be a period of 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.

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3.  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, for a purchase price of (i) $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and (ii) deferred consideration of up to $500 million , plus the assumption of certain liabilities. 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 second quarter of 2017, the Company recorded an estimated gain on sale, net of taxes, of $798 million and a non-cash impairment charge to its tradename associated with the Divested Business of $380 million as this asset was 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 three and six months ended June 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 six months ended June 30, 2017 and 2016 are presented as Income from discontinued operations on the Company’s Condensed Consolidated Statements of Income. The following table presents financial results of the Divested Business (in millions):

																	
 	 	Three months ended June 30	 	Six months ended June 30	
	 	2017	 	2016	 	2017	 	2016	
Revenue	 	 	 	 	 	 	 	 	
Total revenue	 	$	171		 	$	518		 	$	698		 	$	1,047		
Expenses	 	 	 	 	 	 	 	 	
Total operating expenses (1)	 	156		 	466		 	626		 	952		
Operating Income from discontinued operations	 	15		 	52		 	72		 	95		
Other income	 	11		 	1		 	11		 	1		
Income from discontinued operations before income taxes	 	26		 	53		 	83		 	96		
Income taxes	 	3		 	18		 	20		 	36		
Income from discontinued operations excluding gain, net of tax	 	23		 	35		 	63		 	60		
Gain on sale of discontinued operations, net of tax	 	798		 	—		 	798		 	—		
Income from discontinued operations, net of tax	 	$	821		 	$	35		 	$	861		 	$	60		

(1)	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 June 30, 2017. Included within total operating expenses for the three months ended June 30, 2016 was $17 million of depreciation of fixed assets and $30 million of intangible asset amortization. Total operating expenses for the six months ended June 30, 2017 and 2016 include, respectively, $8 million and $35 million of depreciation of fixed assets and $11 million and $60 million of intangible asset amortization.	

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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):

									
 	 	June 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 June 30, 2016 was $4 million .
4.  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 June 30, 2017 , Cash and cash equivalents and Short-term investments were $3,430 million compared to $716 million at December 31, 2016 , an increase of $2,714 million that was primarily related to the receipt of proceeds from the sale of the Divested Business. Of the total balances, $91 million and $82 million was restricted as to its use at June 30, 2017 and December 31, 2016 , respectively. Included within the June 30, 2017 and December 31, 2016 balances, respectively, were £42.7 million ( $54.3 million at June 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.

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5.  Other Financial Data
Condensed Consolidated Statements of Income Information
Other Income (Expense)
Other income (expense) consists of the following (in millions):

																
 	Three months ended June 30	 	Six months ended June 30	
 	2017	 	2016	 	2017	 	2016	
Foreign currency remeasurement gain (loss)	$	(2	)	 	$	—		 	$	(12	)	 	$	(17	)	
Gain (loss) on disposal of business	—		 	6		 	(2	)	 	41		
Equity earnings	3		 	1		 	9		 	3		
Loss on financial instruments	(6	)	 	(8	)	 	(10	)	 	(10	)	
Total	$	(5	)	 	$	(1	)	 	$	(15	)	 	$	17		
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 June 30	 	Six months ended June 30	
 	2017	 	2016	 	2017	 	2016	
Balance at beginning of period	$	61		 	$	62		 	$	56		 	$	58		
Provision charged to Other general expenses	5		 	6		 	11		 	11		
Accounts written off, net of recoveries	(7	)	 	(4	)	 	(10	)	 	(6	)	
Foreign currency translation	—		 	—		 	2		 	1		
Balance at end of period	$	59		 	$	64		 	$	59		 	$	64		
Other Current Assets
The components of Other current assets are as follows (in millions):

								
As of	June 30, 2017	 	December 31, 2016	
Taxes receivable	$	152		 	$	100		
Prepaid expenses	143		 	102		
Receivables from the Divested Business (1)	78		 	—		
Other	26		 	45		
Total	$	399		 	$	247		

(1)	Refer to Note 3 “Discontinued Operations” for additional information.	

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Other Non-Current Assets
The components of Other non-current assets are as follows (in millions):

								
As of	June 30, 2017	 	December 31, 2016	
Investments	$	122		 	$	119		
Taxes receivable	88		 	82		
Other	158		 	159		
Total	$	368		 	$	360		
Other Current Liabilities
The components of Other current liabilities are as follows (in millions):

								
As of	June 30, 2017	 	December 31, 2016	
Deferred revenue	$	377		 	$	199		
Taxes payable (1)	1,254		 	77		
Other	447		 	380		
Total	$	2,078		 	$	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	June 30, 2017	 	December 31, 2016	
Taxes payable	$	326		 	$	288		
Deferred revenue	46		 	49		
Leases	140		 	136		
Compensation and benefits	59		 	56		
Other	287		 	190		
Total	$	858		 	$	719		

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6. Acquisitions and Dispositions of Businesses
Acquisitions
The Company completed four acquisitions during the six months ended June 30, 2017 and eight acquisitions during the twelve months ended December 31, 2016 . The following table includes the preliminary fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):

					
 	 	June 30, 2017	
Cash	 	$	148		
Deferred and contingent consideration	 	28		
Aggregate consideration transferred	 	176		
Assets acquired:	 	 	
Cash and cash equivalents	 	5		
Receivables, net	 	11		
Goodwill	 	119		
Intangible assets, net	 	69		
Fixed assets, net	 	1		
Other assets	 	8		
Total assets acquired	 	213		
Liabilities assumed:	 	 	
Current liabilities	 	15		
Other liabilities	 	22		
Total liabilities assumed	 	37		
Net assets acquired	 	$	176		
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 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.

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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 one disposition during the three months ended June 30, 2017 and four dispositions during the six months ended June 30, 2017 , excluding the sale of the Divested Business. Refer to Note 3 “Discontinued Operations” for further information. The Company completed two dispositions during the three months ended June 30, 2016 and four dispositions during the six months ended June 30, 2016 .
There were no gains recognized on the disposition of businesses for the three months ended June 30, 2017, excluding the sale of the Divested Business. Total pretax gains recognized, net of losses, were $6 million for the three months ended June 30, 2016 . Total pretax losses recognized, net of gains, were $2 million for the six months ended June 30, 2017 , and total pretax gains recognized, net of losses, were $41 million for the six months ended June 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.
7. 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. Based on assumptions built into the Restructuring Plan at inception, the Company expected 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 estimated non-cash charges related to asset impairments and lease consolidations.
From the inception of the Restructuring Plan through June 30, 2017 , 1,785 positions have been eliminated and total expenses of $299 million have been incurred 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 summarizes restructuring and separation costs by type that have been incurred through June 30, 2017 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated cost may be revised in future periods as these assumptions are updated:

																	
 	 	Three months ended June 30, 2017	 	Six months ended June 30, 2017	 	Estimated Remaining Costs	 	Estimated Total Cost (1)	
Workforce reduction	 	$	102		 	$	205		 	$	98		 	$	303		
Technology rationalization (2)	 	7		 	10		 	136		 	146		
Lease consolidation (2)	 	1		 	4		 	76		 	80		
Asset impairments	 	11		 	24		 	16		 	40		
Other costs associated with restructuring and separation (2) (3)	 	34		 	56		 	125		 	181		
Total restructuring and related expenses	 	$	155		 	$	299		 	$	451		 	$	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.	

16

		
(2)	Contract termination costs included within Lease consolidations for the three and six months ended June 30, 2017 were $1 million and $5 million , respectively. No other contract termination costs were incurred through June 30, 2017 . Total estimated contract termination costs to be incurred under the Restructuring Plan associated with Technology rationalizations and Lease consolidations, respectively, are $9 million and $80 million .	

(3)	Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs, and consulting and legal fees. These costs are generally recognized when incurred.	
The changes in the Company’s liabilities for the Restructuring Plan as of June 30, 2017 are as follows (in millions): 

					
 	 	Restructuring Plan	
Balance at January 1, 2017	 	$	—		
Expensed	 	272		
Cash payments	 	(94	)	
Foreign currency translation and other	 	—		
Balance at June 30, 2017	 	$	178		
8. Goodwill and Other Intangible Assets
The changes in the net carrying amount of goodwill for the six months ended June 30, 2017 are as follows (in millions):

				
 	 	
Balance as of January 1, 2017	$	7,410		
Goodwill related to current year acquisitions	119		
Goodwill related to disposals	(1	)	
Goodwill related to prior year acquisitions	24		
Foreign currency translation	193		
Balance as of June 30, 2017	$	7,745		
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.
Other intangible assets by asset class are as follows (in millions):

																								
 	June 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	2,050		 	1,307		 	743		 	2,023		 	1,198		 	825		
Tradenames (1)	$	1,037		 	$	423		 	$	614		 	$	1,027		 	$	7		 	$	1,020		
Technology and other (1)	366		 	321		 	45		 	347		 	302		 	45		
 Total	$	3,453		 	$	2,051		 	$	1,402		 	$	3,397		 	$	1,507		 	$	1,890		

(1)	Prior to May 1, 2017, finite lived tradenames were classified within Technology and other. For the period ended 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.	
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 $22 million , or $0.09 per share, additional amortization expense, net of tax, to continuing operations in the three months ended June 30, 2017.
Amortization expense and impairment charges from finite lived intangible assets was $460 million and $503 million for the three and six months ended June 30, 2017 , respectively. Amortization expense from finite lived intangible assets was $38 million and $75 million for the three and six months ended June 30, 2016 , respectively.

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The estimated future amortization for finite lived intangible assets as of June 30, 2017 is as follows (in millions): 

				
 	As of
June 30, 2017	
Remainder of 2017	$	206		
2018	370		
2019	351		
2020	192		
2021	83		
Thereafter	200		
  Total	$	1,402		
9. Debt
Notes
During the six months ended June 30, 2017, CAD 375 million ( $283 million at June 30, 2017 rates) 4.76% Senior Notes due March 2018 were classified as Short-term debt and current portion of long-term debt in the Consolidated Statements of Financial Position as the date of maturity is less than one year.
Revolving Credit Facilities
As of June 30, 2017 , Aon plc had one primary committed credit facility outstanding: its $900 million multi-currency U.S. credit facility expiring in February 2021 (the “2021 Facility”). The Company’s $400 million U.S. credit facility expired in March 2017.
The 2021 Facility includes customary representations, warranties and covenants, including financial covenants that require Aon plc 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 June 30, 2017 , Aon plc did not have borrowings under the 2021 Facility, and was in compliance with all covenants contained therein during the six months ended June 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 (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, currently $900 million . 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. In the aggregate, the Company had no commercial paper outstanding at June 30, 2017 and $329 million of commercial paper outstanding at December 31, 2016 , which is included in Short-term debt and current portion of long-term debt in the Company’s Condensed Consolidated Statements of Financial Position. The weighted average commercial paper outstanding for the three and six months ended June 30, 2017 was $318 million and $342 million , respectively. The weighted average commercial paper outstanding for the three and six months ended June 30, 2016 was $304 million and $240 million , respectively. The weighted average interest rate of the commercial paper outstanding for the three and six months ended June 30, 2017 was 0.26% and 0.18% , respectively. The weighted average interest rate of the commercial paper outstanding for the three and six months ended June 30, 2016 was 0.59% and 0.41% , respectively.
10. Income Taxes
The effective tax rate on net income (loss) from continuing operations was 76.9% and (181.0)% for the three and six months ended June 30, 2017 , respectively. The effective tax rate on net income (loss) from continuing operations was 13.6% and 14.8% for the three and six months ended June 30, 2016 , respectively. In the second quarter of 2017 , the Company reported a tax benefit of $143 million on a pretax loss of $186 million , which resulted in an effective tax rate of 76.9% . For the six months ended June 30, 2017 , the Company reported a tax benefit of $143 million on pretax income of $79 million , which resulted in an effective tax rate of (181.0)% . The primary components of the quarter to date and 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.

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11. 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 increased in November 2014 and February 2017 by incremental increases of $5.0 billion in authorized repurchases at each of those times.
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 June 30, 2017 , the Company repurchased 8.0 million shares at an average price per share of $128.54 , for a total cost of approximately $1.0 billion . The Company recorded an additional $5.1 million of costs associated with the repurchases to retained earnings during the quarter. During the six months ended June 30, 2017 , the Company repurchased 9.1 million shares at an average price per share of $126.85 , for a total cost of approximately $1.2 billion . The Company recorded an additional $5.8 million of costs associated with the repurchases to retained earnings during the six months ended June 30, 2017. Included in the 8.0 million shares and 9.1 million shares repurchased during the three and six months ended June 30, 2017 were 450 thousand shares that did not settle until July 2017. These shares were settled at an average price per share of $133.24 and total cost of $60.0 million . In the three months ended June 30, 2016 , the Company did not repurchase shares under the Repurchase Program. During the six months ended June 30, 2016 , the Company repurchased 7.7 million shares at an average price per share of $97.92 , for a total cost of approximately $750 million . At June 30, 2017 , the remaining authorized amount for share repurchase under the Repurchase Program was $6.7 billion . Under the Repurchase Program, the Company has repurchased a total of 99.3 million shares for an aggregate cost of approximately $8.3 billion .
Net Income (Loss) Per Share
Weighted average shares outstanding are as follows (in millions):

												
 	Three months ended June 30	 	Six months ended June 30	
 	2017	 	2016	 	2017	 	2016	
Basic weighted-average ordinary shares outstanding	262.4		 	268.0		 	263.6		 	269.9		
Dilutive effect of potentially issuable shares	—		 	1.8		 	2.1		 	1.8		
Diluted weighted-average ordinary shares outstanding	262.4		 	269.8		 	265.7		 	271.7		
Potentially issuable shares are not included in the computation of diluted net income (loss) per share if their inclusion would be antidilutive. Due to the net loss for the three months ended June 30, 2017, 1.9 million shares were excluded from the calculation. There were 0.2 million shares excluded from the calculation for the six months ended June 30, 2017 . There were no shares and 0.3 million shares excluded from the calculation for the three and six months ended June 30, 2016 , respectively.

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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	5		 	206		 	—		 	211		
Amounts reclassified from accumulated other comprehensive loss:	 	 			 			 			
Amounts reclassified from accumulated other comprehensive income (loss)	(6	)	 	(11	)	 	54		 	37		
Tax benefit (expense)	3		 	—		 	(16	)	 	(13	)	
Amounts reclassified from accumulated other comprehensive income (loss), net	(3	)	 	(11	)	 	38		 	24		
Net current period other comprehensive income (loss)	2		 	195		 	38		 	235		
Balance at June 30, 2017	$	(35	)	 	$	(1,069	)	 	$	(2,573	)	 	$	(3,677	)	

(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.	

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12. Employee Benefits
The following table provides the components of the net periodic (benefit) cost 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 June 30	
 	U.K.	 	U.S.	 	Other	
 	2017	 	2016	 	2017	 	2016	 	2017	 	2016	
Service cost	$	—		 	$	—		 	$	—		 	$	—		 	$	—		 	$	—		
Interest cost	30		 	43		 	24		 	28		 	6		 	7		
Expected return on plan assets, net of administration expenses	(49	)	 	(65	)	 	(35	)	 	(39	)	 	(11	)	 	(12	)	
Amortization of prior-service cost	—		 	1		 	1		 	1		 	—		 	—		
Amortization of net actuarial loss	8		 	9		 	12		 	12		 	3		 	3		
Net periodic cost (benefit)	$	(11	)	 	$	(12	)	 	$	2		 	$	2		 	$	(2	)	 	$	(2	)	
Loss on pension settlement	—		 	61		 	—		 	—		 	—		 	—		
Total net periodic cost (benefit)	$	(11	)		$	49			$	2			$	2			$	(2	)		$	(2	)	
 	 	 	 	 	 	 	 	 	 	 	 	
 	Six months ended June 30	
 	U.K.	 	U.S.	 	Other	
 	2017	 	2016	 	2017	 	2016	 	2017	 	2016	
Service cost	$	—		 	$	—		 	$	—		 	$	—		 	$	—		 	$	—		
Interest cost	60		 	86		 	48		 	55		 	12		 	14		
Expected return on plan assets, net of administration expenses	(97	)	 	(129	)	 	(70	)	 	(78	)	 	(22	)	 	(24	)	
Amortization of prior-service cost	—		 	1		 	1		 	1		 	—		 	—		
Amortization of net actuarial loss	15		 	17		 	25		 	25		 	6		 	5		
Net periodic cost (benefit)	$	(22	)	 	$	(25	)	 	$	4		 	$	3		 	$	(4	)	 	$	(5	)	
Loss on pension settlement	—		 	61		 	—		 	—		 	—		 	—		
Total net periodic cost (benefit)	$	(22	)	 	$	36		 	$	4		 	$	3		 	$	(4	)	 	$	(5	)	
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.  On July 1, 2017, the Company made a non-cash contribution of approximately $80 million to its U.S. pension plan. During the three months ended June 30, 2017 , cash contributions of $26 million , $13 million , and $9 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the six months ended June 30, 2017 , cash contributions of $42 million , $26 million , and $11 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively.
During the three months ended June 30, 2016 , cash contributions of $17 million , $6 million , and $3 million  were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the six months ended June 30, 2016 , cash contributions of $34 million , $19 million , and $10 million  were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively.

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13. 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 June 30	 	Six months ended June 30	
 	2017	 	2016	 	2017	 	2016	
Restricted share units (“RSUs”)	$	46		 	$	40		 	$	101		 	$	97		
Performance share awards (“PSAs”)	21		 	24		 	40		 	43		
Employee share purchase plans	2		 	1		 	6		 	5		
Total share-based compensation expense  	$	69		 	$	65		 	$	147		 	$	145		
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, including shares related to the Divested Business (shares in thousands):

														
 	Six months ended June 30	
 	2017	 	2016	
 	Shares	 	Fair Value  (1)	 	Shares	 	Fair Value  (1)	
Non-vested at beginning of period	6,195		 	$	89		 	7,167		 	$	77		
Granted	1,497		 	121		 	2,025		 	101		
Vested	(2,172	)	 	82		 	(2,581	)	 	70		
Forfeited	(522	)	 	92		 	(213	)	 	79		
Non-vested at end of period	4,998		 	$	101		 	6,398		 	$	87		

(1)	Represents per share weighted-average fair value of award at date of grant.	
Unamortized deferred compensation expense amounted to $409 million as of June 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 an Aon ordinary share 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 June 30, 2017 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the six months ended June 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):

												
 	June 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	547		 	667		 	1,364		
Unamortized expense, based on current performance levels	$	57		 	$	33		 	$	21		

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14. 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)	
 	June 30,
2017	 	December 31,
2016	 	June 30,
2017	 	December 31,
2016	 	June 30,
2017	 	December 31,
2016	
Foreign exchange contracts:	 		 	 		 	 		 	 		 	 		 	 		
Accounted for as hedges	$	531		 	$	758		 	$	12		 	$	14		 	$	6		 	$	13		
Not accounted for as hedges (3)	237		 	189		 	—		 	1		 	1		 	1		
   Total	$	768		 	$	947		 	$	12		 	$	15		 	$	7		 	$	14		

(1)	Included within Other current assets ( $2 million at June 30, 2017 and $6 million  at December 31, 2016 ) or Other non-current assets ( $10 million at June 30, 2017 and $9 million  at December 31, 2016 ).	

(2)	Included within Other current liabilities ( $4 million at June 30, 2017 and $7 million  at December 31, 2016 ) or Other non-current liabilities ( $3 million at June 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 financial assets and 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:	June 30,
2017	 	December 31,
2016	 	June 30,
2017	 	December 31,
2016	 	June 30,
2017	 	December 31,
2016	
Foreign exchange contracts	$	12		 	$	14		 	$	—		 	$	(1	)	 	$	12		 	$	13		

(1)	Included within Other current assets ( $2 million at June 30, 2017 and $4 million  at December 31, 2016 ) or Other non-current assets ( $10 million at June 30, 2017 and $9 million  at December 31, 2016 ).	

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Offsetting of financial liabilities and 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:	 	June 30,
2017	 	December 31,
2016	 	June 30,
2017	 	December 31,
2016	 	June 30,
2017	 	December 31,
2016	
Foreign exchange contracts	 	$	6		 	$	13		 	$	—		 	$	(1	)	 	$	6		 	$	12		

(1)	Included within Other current liabilities ( $4 million at June 30, 2017 and $5 million  at December 31, 2016 ) or Other non-current liabilities ( $2 million at June 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 six months ended June 30, 2017 and 2016 are as follows (in millions): 

																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Location of reclassification from Accumulated Other Comprehensive Loss	 	Gain (Loss) Recognized in Accumulated Other Comprehensive Loss:	
Three months ended June 30	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income (Expense)	 	Total	
2017	 	$	1		 	$	1		 	$	—		 	$	(1	)	 	$	1		
2016	 	—		 	(2	)	 	—		 	(6	)	 	(8	)	

																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Location of reclassification from Accumulated Other Comprehensive Loss	 	Gain (Loss) Recognized in Accumulated Other Comprehensive Loss:	
Six months ended June 30	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income (Expense)	 	Total	
2017	 	$	9		 	$	2		 	$	—		 	$	(4	)	 	$	7		
2016	 	(2	)	 	(5	)	 	—		 	(11	)	 	(18	)	

																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion):	
Three months ended June 30	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income	 	Total	
2017	 	$	—		 	$	(1	)	 	$	(1	)	 	$	(2	)	 	$	(4	)	
2016	 	—		 	(1	)	 	(1	)	 	(2	)	 	(4	)	

																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion):	
Six months ended June 30	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income	 	Total	
2017	 	$	13		 	$	(2	)	 	$	(1	)	 	$	(4	)	 	$	6		
2016	 	1		 	(1	)	 	(1	)	 	(3	)	 	(4	)	
The Company estimates that approximately $14 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 six months ended June 30, 2017 and 2016 was immaterial.
During the three and six months ended June 30, 2017 , the Company recorded a loss of $1 million and a gain of $0.4 million , respectively, in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. During the three and six months ended June 30, 2016 , the Company recorded a loss 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

24

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 June 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 June 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 six months ended June 30, 2017 . In addition, the Company did not incur any ineffectiveness related to net investment hedges during the  three and six months ended June 30, 2017 .
15. 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.

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The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2017 and December 31, 2016 (in millions):

																
 	 	 	Fair Value Measurements Using	
 	Balance at June 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)	$	4,117		 	$	4,117		 	$	—		 	$	—		
Other investments:	 		 	 		 	 		 	 		
Government bonds	1		 	—		 	1		 	—		
Equity investments	10		 	6		 	4		 	—		
Derivatives: (2)	 		 	 		 	 		 	 		
Foreign exchange contracts	12		 	—		 	12		 	—		
Liabilities:	 		 	 		 	 		 	 		
Derivatives:	 		 	 		 	 		 	 		
Foreign exchange contracts	7		 	—		 	7		 	—		

(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:	 		 	 		 	 		 	 		
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 six months ended June 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 six months ended  June 30, 2017 or 2016 , related to assets and liabilities measured at fair value using unobservable inputs.

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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):

																
 	June 30, 2017	 	December 31, 2016	
 	Carrying Value	 	Fair Value	 	Carrying Value	 	Fair Value	
Current portion of long-term debt (1)	$	292		 	$	298		 	$	—		 	$	—		
Long-term debt	5,631		 	6,163		 	5,869		 	6,264		

(1)	Excludes commercial paper program	
16. 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.
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

27

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 will 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 will be discontinued.
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 ( $57 million at June 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 ( $89 million at June 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 ( $134 million at June 30, 2017 exchange rates) plus interest and costs.  Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims.
The Financial Conduct Authority (the “FCA”) commenced 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.  Other regulatory agencies may also be conducting formal or informal investigations regarding these matters. In such case,  Aon intends to work diligently with the FCA and other regulatory agencies 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 in the second quarter in connection with these reviews.
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

28

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 the leases at any time during the remainder of the lease agreements, which expire on various dates through 2024. As of June 30, 2017 , the undiscounted maximum potential future payments under the lease guarantee is $108 million , with an estimated fair value of $39 million .
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 arrangement, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023.  As of June 30, 2017 , the undiscounted maximum potential future payments under the performance guarantees were $401 million , with an estimated fair value of $4 million .
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 $89 million at June 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 $88 million at June 30, 2017 compared to $95 million at December 31, 2016 .
17. 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.  

29

Revenue from continuing operations for each of the Company’s principal product and service lines is as follows (in millions):

																
 	Three months ended June 30	 	Six months ended June 30	
 	2017	 	2016	 	2017	 	2016	
Commercial Risk Solutions	$	1,042		 	$	990		 	$	2,026		 	$	1,951		
Reinsurance Solutions	344		 	332		 	715		 	703		
Retirement Solutions	389		 	405		 	775		 	800		
Health Solutions	312		 	281		 	684		 	573		
Data & Analytic Services	285		 	275		 	553		 	534		
Elimination	(4	)	 	(1	)	 	(4	)	 	(3	)	
Total revenue	2,368		 	2,282		 	4,749		 	4,558		
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.
18. 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 six months ended June 30, 2017 and 2016 , Condensed Consolidating Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2016 , Condensed Consolidating Statements of Financial Position as of June 30, 2017 and December 31, 2016 , and Condensed Consolidating Statements of Cash Flows for the six months ended June 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.

30

Condensed Consolidating Statement of Income 

																					
 	 	Three months ended June 30, 2017	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	—		 	$	—		 	$	2,368		 	$	—		 	$	2,368		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	8		 	5		 	1,444		 	—		 	1,457		
Information technology	 	—		 	—		 	98		 	—		 	98		
Premises	 	—		 	—		 	86		 	—		 	86		
Depreciation of fixed assets	 	—		 	—		 	54		 	—		 	54		
Amortization and impairment of intangible assets	 	—		 	—		 	460		 	—		 	460		
Other general expenses (income)	 	4		 	(6	)	 	333		 	—		 	331		
Total operating expenses (income)	 	12		 	(1	)	 	2,475		 	—		 	2,486		
Operating income (loss)	 	(12	)	 	1		 	(107	)	 	—		 	(118	)	
Interest income	 	—		 	11		 	2		 	(5	)	 	8		
Interest expense	 	(46	)	 	(23	)	 	(7	)	 	5		 	(71	)	
Intercompany interest income (expense)	 	4		 	(136	)	 	132		 	—		 	—		
Intercompany other income (expense)	 	(53	)	 	(16	)	 	69		 	—		 	—		
Other income (expense)	 	(12	)	 	(4	)	 	1		 	10		 	(5	)	
Income from continuing operations before income taxes	 	(119	)	 	(167	)	 	90		 	10		 	(186	)	
Income tax benefit	 	(8	)	 	(63	)	 	(72	)	 	—		 	(143	)	
Net income (loss) from continuing operations	 	(111	)	 	(104	)	 	162		 	10		 	(43	)	
Income from discontinued operations, net of tax	 	—		 	—		 	821		 	—		 	821		
net income (loss) before equity in earnings of subsidiaries	 	(111	)	 	(104	)	 	983		 	10		 	778		
Equity in earnings of subsidiaries, net of tax	 	870		 	635		 	531		 	(2,036	)	 	—		
Net income	 	759		 	531		 	1,514		 	(2,026	)	 	778		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	9		 	—		 	9		
Net income attributable to Aon shareholders	 	$	759		 	$	531		 	$	1,505		 	$	(2,026	)	 	$	769		

31

Condensed Consolidating Statement of Income 

																					
 	 	Three months ended June 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	—		 	$	—		 	$	2,282		 	$	—		 	$	2,282		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	8		 	3		 	1,385		 	—		 	1,396		
Information technology	 	—		 	—		 	99		 	—		 	99		
Premises	 	—		 	—		 	89		 	—		 	89		
Depreciation of fixed assets	 	—		 	—		 	41		 	—		 	41		
Amortization and impairment of intangible assets	 	—		 	—		 	38		 	—		 	38		
Other general expenses (income)	 	(1	)	 	2		 	231		 	—		 	232		
Total operating expenses	 	7		 	5		 	1,883		 	—		 	1,895		
Operating income (loss)	 	(7	)	 	(5	)	 	399		 	—		 	387		
Interest income	 	—		 	4		 	5		 	(6	)	 	3		
Interest expense	 	(49	)	 	(26	)	 	(4	)	 	6		 	(73	)	
Intercompany interest income (expense)	 	3		 	(137	)	 	134		 	—		 	—		
Intercompany other income (expense)	 	(57	)	 	(16	)	 	73		 	—		 	—		
Other income (expense)	 	2		 	(4	)	 	5		 	(4	)	 	(1	)	
Income (loss) from continuing operations before income taxes	 	(108	)	 	(184	)	 	612		 	(4	)	 	316		
Income tax expense (benefit)	 	(20	)	 	(64	)	 	127		 	—		 	43		
Net income (loss) from continuing operations	 	(88	)	 	(120	)	 	485		 	(4	)	 	273		
Income from discontinued operations, net of tax	 	—		 	—		 	35		 	—		 	35		
Net income (loss) before equity in earnings of subsidiaries	 	(88	)	 	(120	)	 	520		 	(4	)	 	308		
Equity in earnings of subsidiaries, net of tax	 	392		 	255		 	135		 	(782	)	 	—		
Net income	 	304		 	135		 	655		 	(786	)	 	308		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	8		 	—		 	8		
Net income attributable to Aon shareholders	 	$	304		 	$	135		 	$	647		 	$	(786	)	 	$	300		

32

Condensed Consolidating Statement of Income 

																					
 	 	Six months ended June 30, 2017	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	—		 	$	—		 	$	4,749		 	$	—		 	$	4,749		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	60		 	11		 	2,847		 	—		 	2,918		
Information technology	 	—		 	—		 	186		 	—		 	186		
Premises	 	—		 	—		 	170		 	—		 	170		
Depreciation of fixed assets	 	—		 	—		 	108		 	—		 	108		
Amortization and impairment of intangible assets	 	—		 	—		 	503		 	—		 	503		
Other general expenses (income)	 	9		 	(4	)	 	634		 	—		 	639		
Total operating expenses	 	69		 	7		 	4,448		 	—		 	4,524		
Operating income (loss)	 	(69	)	 	(7	)	 	301		 	—		 	225		
Interest income	 	—		 	17		 	—		 	(7	)	 	10		
Interest expense	 	(91	)	 	(47	)	 	(10	)	 	7		 	(141	)	
Intercompany interest income (expense)	 	7		 	(272	)	 	265		 	—		 	—		
Intercompany other income (expense)	 	(102	)	 	(9	)	 	111		 	—		 	—		
Other income (expense)	 	(23	)	 	8		 	(18	)	 	18		 	(15	)	
Income (loss) from continuing operations before income taxes	 	(278	)	 	(310	)	 	649		 	18		 	79		
Income tax benefit	 	(22	)	 	(117	)	 	(4	)	 	—		 	(143	)	
Net income (loss) from continuing operations	 	(256	)	 	(193	)	 	653		 	18		 	222		
Income from discontinued operations, net of tax	 	—		 	—		 	861		 	—		 	861		
Net income (loss) before equity in earnings of subsidiaries	 	(256	)	 	(193	)	 	1,514		 	18		 	1,083		
Equity in earnings of subsidiaries, net of tax	 	1,298		 	906		 	713		 	(2,917	)	 	—		
Net income	 	1,042		 	713		 	2,227		 	(2,899	)	 	1,083		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	23		 	—		 	23		
Net income attributable to Aon shareholders	 	$	1,042		 	$	713		 	$	2,204		 	$	(2,899	)	 	$	1,060		

33

Condensed Consolidating Statement of Income 

																					
 	 	Six months ended June 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	—		 	$	—		 	$	4,558		 	$	—		 	$	4,558		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	51		 	6		 	2,684		 	—		 	2,741		
Information technology	 	—		 	—		 	182		 	—		 	182		
Premises	 	—		 	—		 	171		 	—		 	171		
Depreciation of fixed assets	 	—		 	—		 	79		 	—		 	79		
Amortization and impairment of intangible assets	 	—		 	—		 	75		 	—		 	75		
Other general expenses	 	6		 	4		 	493		 	—		 	503		
Total operating expenses	 	57		 	10		 	3,684		 	—		 	3,751		
Operating income (loss)	 	(57	)	 	(10	)	 	874		 	—		 	807		
Interest income	 	—		 	9		 	9		 	(13	)	 	5		
Interest expense	 	(94	)	 	(54	)	 	(7	)	 	13		 	(142	)	
Intercompany interest income (expense)	 	7		 	(270	)	 	263		 	—		 	—		
Intercompany other income (expense)	 	(111	)	 	(15	)	 	126		 	—		 	—		
Other income (expense)	 	2		 	(9	)	 	28		 	(4	)	 	17		
Income (loss) from continuing operations before income taxes	 	(253	)	 	(349	)	 	1,293		 	(4	)	 	687		
Income tax expense (benefit)	 	(46	)	 	(126	)	 	274		 	—		 	102		
Net income (loss) from continuing operations	 	(207	)	 	(223	)	 	1,019		 	(4	)	 	585		
Income from discontinued operations, net of tax	 	—		 	—		 	60		 	—		 	60		
Net income (loss) before equity in earnings of subsidiaries	 	(207	)	 	(223	)	 	1,079		 	(4	)	 	645		
Equity in earnings of subsidiaries, net of tax	 	836		 	611		 	388		 	(1,835	)	 	—		
Net income	 	629		 	388		 	1,467		 	(1,839	)	 	645		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	20		 	—		 	20		
Net income attributable to Aon shareholders	 	$	629		 	$	388		 	$	1,447		 	$	(1,839	)	 	$	625		

34

Condensed Consolidating Statement of Comprehensive Income 

																					
 	 	Three months ended June 30, 2017	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	759		 	$	531		 	$	1,514		 	$	(2,026	)	 	$	778		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	9		 	—		 	9		
Net income attributable to Aon shareholders	 	759		 	531		 	1,505		 	(2,026	)	 	769		
Other comprehensive income, net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	2		 	2		 	—		 	4		
Foreign currency translation adjustments	 	—		 	—		 	54		 	(10	)	 	44		
Post-retirement benefit obligation	 	—		 	8		 	12		 	—		 	20		
Total other comprehensive income	 	—		 	10		 	68		 	(10	)	 	68		
Equity in other comprehensive income of subsidiaries, net of tax	 	83		 	71		 	81		 	(235	)	 	—		
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	—		 	(5	)	 	—		 	(5	)	
Total other comprehensive income attributable to Aon shareholders	 	83		 	81		 	154		 	(245	)	 	73		
Comprehensive income attributable to Aon shareholders	 	$	842		 	$	612		 	$	1,659		 	$	(2,271	)	 	$	842		
Condensed Consolidating Statement of Comprehensive Income 

																					
 	 	Three months ended June 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	304		 	$	135		 	$	655		 	$	(786	)	 	$	308		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	8		 	—		 	8		
Net income attributable to Aon shareholders	 	304		 	135		 	647		 	(786	)	 	300		
Other comprehensive income (loss), net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	2		 	(6	)	 	—		 	(4	)	
Foreign currency translation adjustments	 	(2	)	 	10		 	(71	)	 	4		 	(59	)	
Post-retirement benefit obligation	 	—		 	3		 	48		 	—		 	51		
Total other comprehensive income (loss)	 	(2	)	 	15		 	(29	)	 	4		 	(12	)	
Equity in other comprehensive loss of subsidiaries, net of tax	 	(14	)	 	(28	)	 	(13	)	 	55		 	—		
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	—		 	—		 	—		 	—		
Total other comprehensive loss attributable to Aon shareholders	 	(16	)	 	(13	)	 	(42	)	 	59		 	(12	)	
Comprehensive income attributable to Aon Shareholders	 	$	288		 	$	122		 	$	605		 	$	(727	)	 	$	288		

35

Condensed Consolidating Statement of Comprehensive Income 

																					
 	 	Six months ended June 30, 2017	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	1,042		 	$	713		 	$	2,227		 	$	(2,899	)	 	$	1,083		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	23		 	—		 	23		
Net income attributable to Aon shareholders	 	1,042		 	713		 	2,204		 	(2,899	)	 	1,060		
Other comprehensive income, net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	—		 	2		 	—		 	2		
Foreign currency translation adjustments	 	—		 	—		 	209		 	(18	)	 	191		
Post-retirement benefit obligation	 	—		 	16		 	22		 	—		 	38		
Total other comprehensive income	 	—		 	16		 	233		 	(18	)	 	231		
Equity in other comprehensive income of subsidiaries, net of tax	 	253		 	235		 	251		 	(739	)	 	—		
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	—		 	(4	)	 	—		 	(4	)	
Total other comprehensive income attributable to Aon shareholders	 	253		 	251		 	488		 	(757	)	 	235		
Comprehensive income attributable to Aon shareholders	 	$	1,295		 	$	964		 	$	2,692		 	$	(3,656	)	 	$	1,295		
Condensed Consolidating Statement of Comprehensive Income 

																					
 	 	Six months ended June 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	629		 	$	388		 	$	1,467		 	$	(1,839	)	 	$	645		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	20		 	—		 	20		
Net income attributable to Aon shareholders	 	629		 	388		 	1,447		 	(1,839	)	 	625		
Other comprehensive income (loss), net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	—		 	(11	)	 	—		 	(11	)	
Foreign currency translation adjustments	 	(2	)	 	21		 	(161	)	 	4		 	(138	)	
Post-retirement benefit obligation	 	—		 	16		 	(166	)	 	—		 	(150	)	
Total other comprehensive income (loss)	 	(2	)	 	37		 	(338	)	 	4		 	(299	)	
Equity in other comprehensive loss of subsidiaries, net of tax	 	(301	)	 	(342	)	 	(305	)	 	948		 	—		
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	—		 	—		 	—		 	—		
Total other comprehensive loss attributable to Aon shareholders	 	(303	)	 	(305	)	 	(643	)	 	952		 	(299	)	
Comprehensive income (loss) attributable to Aon Shareholders	 	$	326		 	$	83		 	$	804		 	$	(887	)	 	$	326		

36

Condensed Consolidating Statement of Financial Position 

																					
 	 	As of June 30, 2017	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
ASSETS	 	 		 	 		 	 		 	 		 	 		
Cash and cash equivalents	 	$	—		 	$	2,675		 	$	801		 	$	(2,792	)	 	$	684		
Short-term investments	 	—		 	2,580		 	166		 	—		 	2,746		
Receivables, net	 	—		 	4		 	2,187		 	—		 	2,191		
Fiduciary assets	 	—		 	—		 	9,582		 	—		 	9,582		
Intercompany receivables	 	106		 	4,176		 	12,476		 	(16,758	)	 	—		
Other current assets	 	—		 	37		 	362		 	—		 	399		
Current assets of discontinued operations	 	—		 	—		 	—		 	—		 	—		
Total Current Assets	 	106		 	9,472		 	25,574		 	(19,550	)	 	15,602		
Goodwill	 	—		 	—		 	7,745		 	—		 	7,745		
Intangible assets, net	 	—		 	—		 	1,402		 	—		 	1,402		
Fixed assets, net	 	—		 	—		 	556		 	—		 	556		
Deferred tax assets	 	134		 	676		 	169		 	(404	)	 	575		
Intercompany receivables	 	380		 	261		 	8,729		 	(9,370	)	 	—		
Prepaid pension	 	—		 	5		 	936		 	—		 	941		
Other non-current assets	 	2		 	121		 	245		 	—		 	368		
Investment in subsidiary	 	11,677		 	16,596		 	532		 	(28,805	)	 	—		
Non-current assets of discontinued operations	 	—		 	—		 	—		 	—		 	—		
TOTAL ASSETS	 	$	12,299		 	$	27,131		 	$	45,888		 	$	(58,129	)	 	$	27,189		
 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		 	 		 	 		 	 		
Accounts payable and accrued liabilities	 	$	2,336		 	$	38		 	$	1,841		 	$	(2,792	)	 	$	1,423		
Short-term debt and current portion of long-term debt	 	—		 	2		 	290		 	—		 	292		
Fiduciary liabilities	 	—		 	—		 	9,582		 	—		 	9,582		
Intercompany payables	 	186		 	14,770		 	1,802		 	(16,758	)	 	—		
Other current liabilities	 	60		 	54		 	1,964		 	—		 	2,078		
Current liabilities of discontinued operations	 	—		 	—		 	—		 	—		 	—		
Total Current Liabilities	 	2,582		 	14,864		 	15,479		 	(19,550	)	 	13,375		
Long-term debt	 	4,216		 	1,414		 	1		 	—		 	5,631		
Deferred tax liabilities	 	—		 	—		 	488		 	(404	)	 	84		
Pension, other post-retirement and other post-employment liabilities	 	—		 	1,307		 	381		 	—		 	1,688		
Intercompany payables	 	—		 	8,895		 	475		 	(9,370	)	 	—		
Other non-current liabilities	 	14		 	119		 	725		 	—		 	858		
Non-current liabilities of discontinued operations	 	—		 	—		 	—		 	—		 	—		
TOTAL LIABILITIES	 	6,812		 	26,599		 	17,549		 	(29,324	)	 	21,636		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL AON SHAREHOLDERS’ EQUITY	 	5,487		 	532		 	28,273		 	(28,805	)	 	5,487		
Noncontrolling interests	 	—		 	—		 	66		 	—		 	66		
TOTAL EQUITY	 	5,487		 	532		 	28,339		 	(28,805	)	 	5,553		
TOTAL LIABILITIES AND EQUITY	 	$	12,299		 	$	27,131		 	$	45,888		 	$	(58,129	)	 	$	27,189		

37

Condensed Consolidating Statement of Financial Position 

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

38

Condensed Consolidating Statement of Cash Flows

																					
 	 	Six months ended June 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	 	$	(118	)	 	$	999		 	$	1,056		 	$	(1,501	)	 	$	436		
Cash provided by operating activities - discontinued operations	 	—		 	—		 	64		 	—		 	64		
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	 	(118	)	 	999		 	1,120		 	(1,501	)	 	500		
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Proceeds from investments	 	—		 	567		 	6		 	(544	)	 	29		
Payments for investments	 	(16	)	 	(15	)	 	(558	)	 	557		 	(32	)	
Net purchases of short-term investments - non-fiduciary	 	—		 	(2,440	)	 	(11	)	 	—		 	(2,451	)	
Acquisition of businesses, net of cash acquired	 	—		 	2		 	(151	)	 	—		 	(149	)	
Sale of businesses, net of cash sold	 	—		 	—		 	4,193		 	—		 	4,193		
Capital expenditures	 	—		 	—		 	(82	)	 	—		 	(82	)	
Cash provided by (used for) investing activities - continuing operations	 	(16	)	 	(1,886	)	 	3,397		 	13		 	1,508		
Cash used for investing activities - discontinued operations	 	—		 	—		 	(19	)	 	—		 	(19	)	
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	 	(16	)	 	(1,886	)	 	3,378		 	13		 	1,489		
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Share repurchase	 	(1,100	)	 	—		 	—		 	—		 	(1,100	)	
Advances from (to) affiliates	 	1,846		 	1,977		 	(4,381	)	 	558		 	—		
Issuance of shares for employee benefit plans	 	(139	)	 	—		 	—		 	—		 	(139	)	
Issuance of debt	 	544		 	1,102		 	5		 	—		 	1,651		
Repayment of debt	 	(835	)	 	(1,150	)	 	(5	)	 	—		 	(1,990	)	
Cash dividends to shareholders	 	(182	)	 	—		 	—		 	—		 	(182	)	
Noncontrolling interests and other financing activities	 	—		 	—		 	(10	)	 	—		 	(10	)	
Cash provided by (used for) financing activities - continuing operations	 	134		 	1,929		 	(4,391	)	 	558		 	(1,770	)	
Cash used for financing activities - discontinued operations	 	—		 	—		 	—		 	—		 	—		
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	 	134		 	1,929		 	(4,391	)	 	558		 	(1,770	)	
 	 	 	 	 	 	 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	—		 	—		 	34		 	—		 	34		
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	—		 	1,042		 	141		 	(930	)	 	253		
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (1)	 	—		 	1,633		 	660		 	(1,862	)	 	431		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	—		 	$	2,675		 	$	801		 	$	(2,792	)	 	$	684		

(1)	Includes $5 million of discontinued operations at December 31, 2016.	

39

Condensed Consolidating Statement of Cash Flows

																					
 	 	Six months ended June 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	 	$	237		 	$	(625	)	 	$	949		 	$	(4	)	 	$	557		
Cash provided by operating activities - discontinued operations	 	—		 	—		 	207		 	—		 	207		
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	 	237		 	(625	)	 	1,156		 	(4	)	 	764		
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Proceeds from investments	 	—		 	14		 	9		 	—		 	23		
Payments for investments	 	—		 	(13	)	 	(16	)	 	—		 	(29	)	
Net sales of short-term investments - non-fiduciary	 	—		 	92		 	14		 	—		 	106		
Acquisition of businesses, net of cash acquired	 	—		 	—		 	(183	)	 	—		 	(183	)	
Sale of businesses, net of cash sold	 	—		 	—		 	103		 	—		 	103		
Capital expenditures	 	—		 	—		 	(68	)	 	—		 	(68	)	
Cash provided by (used for) investing activities - continuing operations	 	—		 	93		 	(141	)	 	—		 	(48	)	
Cash used for investing activities - discontinued operations	 	—		 	—		 	(36	)	 	—		 	(36	)	
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	 	—		 	93		 	(177	)	 	—		 	(84	)	
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Share repurchase	 	(750	)	 	—		 	—		 	—		 	(750	)	
Advances from (to) affiliates	 	(211	)	 	348		 	(321	)	 	184		 	—		
Issuance of shares for employee benefit plans	 	(87	)	 	—		 	—		 	—		 	(87	)	
Issuance of debt	 	1,239		 	817		 	—		 	—		 	2,056		
Repayment of debt	 	(259	)	 	(1,367	)	 	(6	)	 	—		 	(1,632	)	
Cash dividends to shareholders	 	(169	)	 	—		 	—		 	—		 	(169	)	
Noncontrolling interests and other financing activities	 	—		 	—		 	(62	)	 	—		 	(62	)	
Cash used for financing activities - continuing operations	 	(237	)	 	(202	)	 	(389	)	 	184		 	(644	)	
Cash used for financing activities - discontinued operations	 	—		 	—		 	—		 	—		 	—		
CASH USED FOR FINANCING ACTIVITIES	 	(237	)	 	(202	)	 	(389	)	 	184		 	(644	)	
 	 	 	 	 	 	 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	—		 	—		 	18		 	—		 	18		
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	—		 	(734	)	 	608		 	180		 	54		
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)	 	$	—		 	$	1,349		 	$	1,850		 	$	(2,761	)	 	$	438		

(1)	Includes $2 million of discontinued operations at December 31, 2015.	

(2)	Includes $4 million of discontinued operations at June 30, 2016.	

40

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE SUMMARY OF SECOND QUARTER 2017 FINANCIAL RESULTS
Aon is a leading global professional services firm providing a broad range of risk, retirement, and health solutions underpinned by proprietary data and analytics. Management is 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. The divestiture of the benefits administration and business process outsourcing platform represents the next step of our strategy, which is consistent with our journey towards offering advice and solutions, and further aligning Aon’s portfolio around clients’ highest priorities. Further, it reinforces our return on invested capital (“ROIC”) decision-making process and emphasis on free cash flow.
Discontinued Operations
On February 9, 2017 , the Company entered into a 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 in each of the Divested Business’ subsidiaries, plus certain related assets, for a purchase price of (i) $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and (ii) deferred consideration of up to $500 million , plus the assumption of certain liabilities. Cash proceeds from the sale, before taxes and after customary adjustments as set forth in the Purchase Agreement, 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 second quarter of 2017 , the Company recorded a gain on sale, net of taxes, of $798 million and a non-cash impairment charge to its tradenames associated with the Divested Business of $380 million as this asset was not sold to the Buyer. Additionally, effective May 1, 2017, consistent with operating as one segment, the Company has 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 accelerated amortization and impairment charge are included in Amortization and impairment of intangible assets on the Condensed Consolidated Statement of Income.
Business Overview
Beginning in the first quarter of 2017, following the classification of the Divested Business as a discontinued operation, the Company began 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 principal products and service revenue lines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions, and Data & Analytic Services.
Commercial Risk Solutions
Commercial Risk Solutions includes retail brokerage, cyber solutions, global risk consulting, and captives.  In retail brokerage, our team of expert risk advisors applies a client-focused approach to commercial risk products and services that leverage Aon’s global network of resources, industry-leading data and analytics, and specialized expertise.  Cyber solutions is one of the industry’s premier resources in cyber risk management. Our strategic focus extends to identify and protect critical digital assets supported by best-in-class transactional capabilities, enhanced coverage expertise, deep carrier relationships, and incident response expertise.  Global risk consulting is a world leading provider of risk consulting services supporting clients to better understand and manage their risk profile through identifying and quantifying the risks they face. We assist clients with the selection and implementation of the appropriate risk transfer, risk retention, and risk mitigation solutions, and ensure the continuity of their operations through claims consulting.  Captives is a leading global captive insurance solutions provider that manages over 1,100 insurance entities worldwide including captives, protected segregated and incorporated cell facilities, as well as entities that support ILS and specialist insurance and reinsurance companies.

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Reinsurance Solutions
Reinsurance Solutions includes treaty and facultative reinsurance brokerage and capital markets.  Treaty reinsurance brokerage addresses underwriting and capital objectives on a portfolio level, allowing our clients to more effectively manage the combination of premium growth, return on capital and rating agency interests. This includes the development of more competitive, innovative and efficient risk transfer options.  Facultative reinsurance brokerage empowers clients to better understand, manage and transfer risk through innovative facultative solutions and provides the most efficient access to the global facultative markets. Capital markets is a global investment bank with expertise in M&A, capital raising, strategic advice, restructuring, recapitalization services, and insurance-linked securities.  We work with insurers, reinsurers, investment firms, banks, and corporations to manage complex commercial issues through the provision of corporate finance advisory services, capital markets solutions, and innovative risk management products.
Retirement Solutions

Retirement Solutions includes core retirement, investment consulting, and talent, rewards & performance.  Retirement consulting specializes in providing organizations across the globe with strategic design consulting on their retirement programs, actuarial services, and risk management, including pension de-risking, governance, integrated pension administration. and legal and compliance consulting. Investment consulting provides public and private companies and other institutions with advice on developing and maintaining investment programs across a broad range of plan types; including defined benefit plans, defined contribution plans, endowments and foundations.  Our delegated investment solutions offer ongoing management of investment programs and fiduciary responsibilities either in a partial or full discretionary model for multiple asset owners. It partners with clients to deliver our scale and experience to help them effectively manage their investments, risk, and governance and potentially lower costs. Talent, rewards & performance delivers advice and solutions that help clients accelerate business outcomes by improving the performance of their people.  It supports the full employee lifecycle from assessment and selection of the right talent, optimized deployment and engagement to the design, alignment and benchmarking of compensation to business strategy and performance outcomes.
Health Solutions
Health Solutions includes heath and benefits brokerage and healthcare exchanges.  Health and benefits brokerage partners with employers to develop innovative, customized benefits strategies that help manage risk, drive engagement, and promote accountability.  Our private health exchange solutions help employers transform how they sponsor, structure, and deliver health benefits by building and operating a cost effective alternative to traditional employee and retiree healthcare. We seek outcomes of reduced employer costs, risk and volatility, alongside greater coverage and plan choices for individual participants.
Data & Analytic Services
Data & Analytic Services includes Affinity, Aon InPoint, and ReView.  Affinity specializes in developing, marketing and administering customized insurance programs and specialty market solutions for affinity organizations and their members or affiliates.  Aon InPoint draws on Aon’s proprietary database (Global Risk Insight Platform) and is dedicated to making insurers more competitive through providing data, analytics, engagement and consulting.  ReView draws on Aon’s proprietary database and broker market knowledge to provide advisory services analysis and benchmarking to help reinsurers more effectively meet the needs of cedents through the development of more competitive, innovative and efficient risk transfer options.
Financial Results
The following is a summary of our second quarter and first six months of 2017 financial results from continuing operations:

•	For the second quarter of 2017 , revenue increased 4% , or $86 million , to $2.4 billion compared to the prior year period due primarily to organic revenue growth of 3% and a 3% increase related to acquisitions, net of divestitures, partially offset by a 2% unfavorable impact from foreign currency exchange rates. For the first six months ended June 30, 2017 , revenue increased 4% compared to the prior year period due primarily to organic revenue growth of 4%  and a 2%  increase related to acquisitions, net of divestitures, partially offset by a 2% unfavorable impact from foreign currency exchange rates.	

•	Operating expenses for the second quarter of 2017 were $2.5 billion , an increase of $591 million compared to the prior year period. The increase was due primarily to a $380 million non-cash impairment charge to the tradenames associated with the Divested Business, $ 155 million of restructuring costs, a $62 million increase in operating expenses related to acquisitions, net of divestitures, $35 million of accelerated amortization related to tradenames to move to the one Aon United brand, $34 million of costs related to regulatory and compliance matters, and an $8 million increase in intangible asset amortization from previous acquisitions, partially offset by $62 million of expense related to certain non-cash pension settlements in the prior year period, a $50 million favorable impact from currency translation and $44 million	

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of savings related to restructuring and other operational improvement initiatives. Operating expenses for the first six months of 2017 increased $773 million compared to the prior year period primarily due to a $380 million non-cash impairment charge to the tradenames associated with the Divested Business, $299 million of restructuring costs, a $121 million increase in operating expenses related to acquisitions, net of divestitures, $35 million of accelerated amortization related to tradenames to move to the one Aon United brand, $34 million of costs related to regulatory and compliance matters, and a $15 million increase in intangible asset amortization from previous acquisitions, partially offset by a $92 million favorable impact from foreign currency exchange rates, $62 million of expense related to certain non-cash pension settlements in the prior year period, and $54 million of savings related to restructuring and other operational improvement initiatives.

•	Operating margin decreased to (5.0)% in the second quarter of 2017 from 17.0% in the prior year period. The decrease compared to the prior year period was driven by an increase in expense due to the factors listed above, partially offset by organic revenue growth of 3% . The decrease from the prior year period and first six months of 2017 was driven by an increase in expense due to the factors listed above, partially offset by organic revenue growth of 4% .	

•	Due to the factors set forth above, income from continuing operations decreased $316 million , or 116% , to net loss of $43 million for the second quarter of 2017 compared to the prior year period. During the first six months of 2017 , income from continuing operations decreased $363 million , or 62% , to $222 million compared to the first six months of 2016 .	

•	Cash flow provided by operating activities was $436 million for the first six months of 2017 , a decrease of $121 million  from $557 million in the prior year period. The decrease was driven primarily by $94 million of restructuring payments and $44 million of transaction related costs.	
We focus on four key non-GAAP metrics that we communicate to shareholders: organic revenue growth, adjusted operating margin, adjusted diluted earnings per share, and free cash flow.  These non-GAAP metrics should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto. The following is our measure of performance against these four metrics from continuing operations for the second quarter of 2017 :

•	Organic revenue growth, a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth,” was 3% for the second quarter, comparable to the organic growth from the prior year period. Organic revenue growth was 4% for the first six months of 2017 , an increase from 3% in the prior year period.	

•	Adjusted operating margin, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 22.4% for the second quarter of 2017 .  Adjusted operating margin was 21.3% for the prior year period. For the first six months of 2017 , adjusted operating margin was 22.3% as compared to 20.7% for the prior year period. The increases primarily reflect restructuring savings, organic revenue growth, and underlying operational improvement, partially offset by expenses related to reinvestment.	

•	Adjusted diluted earnings per share from continuing operations, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Diluted Earnings per Share,” was $1.45 per share for the second quarter of 2017 and $2.90 in the first six months of 2017 , compared to $1.28 per share and $2.50 per share for the respective prior year periods.	

•	Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” decreased in the first six months of 2017 by $135 million , or 28% from the prior year period, to $354 million , driven by a decrease of $121 million in cash flow from operations and an increase of $14 million in capital expenditures, including investments in our operating model.	

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REVIEW OF CONSOLIDATED RESULTS  
Summary of Results
Our consolidated results are as follow:

																	
 	 	Three Months Ended	 	Six Months Ended	
(millions)	 	June 30, 2017	 	June 30, 2016	 	June 30, 2017	 	June 30, 2016	
Revenue	 	 		 	 		 	 	 	 	
Total revenue	 	$	2,368		 	$	2,282		 	$	4,749		 	$	4,558		
Expenses	 	 		 	 		 	 	 	 	
Compensation and benefits	 	1,457		 	1,396		 	2,918		 	2,741		
Information technology	 	98		 	99		 	186		 	182		
Premises	 	86		 	89		 	170		 	171		
Depreciation of fixed assets	 	54		 	41		 	108		 	79		
Amortization and impairment of intangible assets	 	460		 	38		 	503		 	75		
Other general expenses	 	331		 	232		 	639		 	503		
Total operating expenses	 	2,486		 	1,895		 	4,524		 	3,751		
Operating income	 	(118	)	 	387		 	225		 	807		
Interest income	 	8		 	3		 	10		 	5		
Interest expense	 	(71	)	 	(73	)	 	(141	)	 	(142	)	
Other income (expense)	 	(5	)	 	(1	)	 	(15	)	 	17		
Income (loss) from continuing operations before income taxes	 	(186	)	 	316		 	79		 	687		
Income tax expense (benefit)	 	(143	)	 	43		 	(143	)	 	102		
Net income (loss) from continuing operations	 	(43	)	 	273		 	222		 	585		
Income from discontinued operations, net of tax	 	821		 	35		 	861		 	60		
Net income	 	778		 	308		 	1,083		 	645		
Less: Net income attributable to noncontrolling interests	 	9		 	8		 	23		 	20		
Net income attributable to Aon shareholders	 	$	769		 	$	300		 	$	1,060		 	$	625		
Revenue  
Total revenue increased by 4% , or $86 million , in the second quarter 2017 compared to the second quarter 2016 .  This change reflects 3% organic growth and a 3% increase related to acquisitions, net of divestitures, partially offset by a 2% unfavorable impact from foreign currency exchange rates. For the first six months of 2017 , revenue increased 4% , or $191 million , compared to the prior year period. This change reflects 4% organic growth and a 2% increase related to acquisitions, net of divestitures, partially offset by a 2% unfavorable impact from foreign currency exchange rates.
Commercial Risk Solutions organic revenue growth was 2% in the second quarter and first six months of 2017 compared to the prior year periods driven by solid growth across the U.S., EMEA, and Pacific regions, partially offset by a decline in Latin America.
Reinsurance Solutions organic revenue growth was 6% in the second quarter of 2017 and 4% in the first six  months of 2017 compared to the prior year periods driven by strong growth in capital markets, as well as growth in facultative placements and net new business generation in treaty, partially offset by an unfavorable market impact globally.
Retirement Solutions organic revenue growth was 1%  in the second quarter of 2017 compared to the second quarter 2016 driven by continued growth in investment consulting, primarily for delegated investment management, partially offset by a decline in our talent practice. Organic revenue growth was 2% in the first six  months of 2017 compared to the prior year period driven by growth in investment consulting, primarily for delegated investment management.
Health Solutions organic revenue growth was 5% in the second quarter of 2017 compared to the second quarter 2016 driven by solid growth globally in health & benefits brokerage, highlighted by strong growth in the U.S., Asia, and EMEA regions. Organic revenue growth was 9% for the first six  months of 2017 compared to the prior year period driven by solid growth globally in health & benefits brokerage, as well as growth in health care exchanges.

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Data & Analytic Services organic revenue growth was 4% in both the second quarter and first six months of 2017 compared to the prior year periods driven by strong growth across Affinity, with particular strength in the U.S.
Compensation and Benefits
Compensation and benefits increased $61 million , or 4% , in the second quarter of 2017 compared to the second quarter of 2016 . This increase was primarily driven by $102 million of restructuring costs, a $38 million increase in expenses related to acquisitions, net of divestitures, and an increase in expense associated with 3% organic revenue growth, partially offset by $62 million of expense related to certain non-cash pension settlements in the prior year period, a $38 million favorable impact from foreign currency translation, and $24 million of savings related to restructuring and other operational improvement initiatives. For the first six months of 2017 , compensation and benefits increased $177 million , or 6% , compared to the first six months of 2016 . The increase was primarily driven by $205 million of restructuring costs and a $73 million increase in expenses related to acquisitions, net of divestitures, partially offset by a $67 million favorable impact from foreign currency translation, $62 million of expense related to certain non-cash pension settlements in the prior year period, and $30 million of savings related to restructuring and other operational improvement initiatives.
Information Technology
Information technology, which represents costs associated with supporting and maintaining our infrastructure, decreased $1 million , or 1% , in the second quarter of 2017 compared to the second quarter of 2016 . This decrease was primarily driven by $12 million of savings related to restructuring and other operational improvement initiatives and a $2 million favorable impact from foreign currency translation, partially offset by $7 million of restructuring costs. For the first six months of 2017 , information technology increased $4 million , or 2% , compared to the prior year period. This increase was primarily driven by $10 million of restructuring charges, partially offset by $17 million of savings related to restructuring and other operational improvement initiatives.
Premises
Premises, which represents the cost of occupying offices in various locations throughout the world, decreased $3 million , or 3% , in the second quarter of 2017 compared to the second quarter 2016 . This decrease was primarily driven by a $2 million favorable impact from foreign currency translation and $1 million of savings related to restructuring and other operational improvement initiatives, partially offset by $1 million of restructuring costs. For the first six months of 2017 , premises decreased $1 million , or 1% , compared to the first six months of 2016 . This decrease was primarily driven by a $4 million favorable impact from foreign currency translation and $1 million of savings related to restructuring and other operational improvement initiatives, partially offset by $4 million of restructuring costs.
Depreciation of Fixed Assets
Depreciation of fixed assets primarily relates to software, leasehold improvements, furniture, fixtures and equipment, computer equipment, buildings, and automobiles. Depreciation of fixed assets increased $13 million , or 32% , in the second quarter of 2017 compared to the second quarter 2016 . This increase was primarily driven by $11 million of restructuring costs. For the first six months of 2017 , depreciation of fixed assets increased $29 million , or 37% , compared to the first six months of 2016 . This increase was primarily driven by $24 million of restructuring costs.
Amortization and Impairment of Intangibles Assets
Amortization and impairment of intangibles primarily relates to finite-lived tradenames and customer-related, contract-based, and technology assets. Amortization and impairment of intangibles increased $422 million , or 1,111% , in the second quarter of 2017 compared to the second quarter 2016 and increased $428 million for the first six months of 2017 compared to the prior year period due to a $380 million non-cash impairment charge to the tradenames associated with the sale of the Divested Business and $35 million of accelerated amortization related to tradenames.
Other General Expenses
Other general expenses in the second quarter of 2017 increased $99 million , or 43% , compared to the second quarter of 2016 . This increase was due primarily to $34 million of restructuring costs, $34 million of costs related to regulatory and compliance matters, and a $16 million increase in operating expenses related to acquisitions, net of divestitures, partially offset by $7 million of savings from restructuring and other operational improvement initiatives and a $6 million favorable impact from foreign currency translation. For the first six months of 2017 , other general expenses increased $136 million , or 27% , compared to the prior year period. This increase was primarily driven by $56 million of restructuring costs, $34 million of costs related to regulatory and compliance matters, and a $32 million increase in operating expenses related to acquisitions, net of divestitures, partially offset by a $13 million favorable impact from foreign currency translation and $7 million of savings related to restructuring and other operational improvement initiatives.

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Interest Income
Interest income represents income earned on operating cash balances and other income-producing investments.  It does not include interest earned on funds held on behalf of clients.  During the second quarter of 2017 , Interest income was $8 million , compared to $3 million during the prior year period. For the first six months of 2017 , Interest income was $10 million , compared to $5 million during the prior year period. The increase in both periods reflects additional income earned on the proceeds from the sale of the Divested Business.
Interest Expense
Interest expense, which represents the cost of our debt obligations, was $71 million during the second quarter of 2017 , a decrease from $73 million for the prior year period. For the first six months of 2017 , Interest expense was $141 million a decrease from $142 million for the prior year period. The decrease in both periods reflects a modest decrease in total debt outstanding.
Other Income (Expense)
Other expense was $5 million for the second quarter of 2017 , compared to $1 million for the second quarter of 2016 .  Other expense for the second quarter of 2017 primarily includes losses on certain foreign exchange hedging programs. Other expense of $1 million in the second quarter of 2016 primarily included losses on certain foreign exchange hedging programs and long-term investments, partially offset by the sale of a certain business.
Other expense was $15 million for the first six months of 2017 , compared to other income of $17 million for the prior year period.  Other expense for the first six months of 2017 primarily includes net losses due to the unfavorable impact of exchange rates on the remeasurement of monetary assets and liabilities in non-functional currencies and losses on certain foreign exchange hedging programs. Other income of $17 million in the first six months of 2016 primarily included $41 million of net gains on the sale of certain businesses, partially offset by a $17 million loss on the remeasurement of monetary assets and liabilities in non-functional currencies, and losses on certain foreign exchange hedging programs.
Income From Continuing Operations before Income Taxes
Due to the factors discussed above, income from continuing operations before income taxes for the second quarter of 2017 was $(186) million , a 159% decrease from $316 million in the second quarter of 2016 , and was $79 million for the first six months of 2017 , an 89% decrease from $687 million from the first six months of 2016 .
Income Taxes From Continuing Operations
The effective tax rate on net income from continuing operations was 76.9% and 13.6% for the second quarters of 2017 and 2016 , respectively. The effective tax rate on net income from continuing operations was (181.0)% and 14.8% for the six months ended June 30, 2017 and 2016 , respectively. For the six months ended June 30, 2017 , the Company reported a tax benefit of $143 million on pretax income of $79 million , which resulted in an effective tax rate of (181.0)% . The primary components of this tax amount 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.
Income from Discontinued Operations, Net of Tax
On February 9, 2017, the Company entered into a Purchase Agreement with Tempo Acquisition, LLC to sell its benefits administration and business process outsourcing business. The Company has retrospectively classified the results of the Divested Business as discontinued operations in the Company’s Condensed Consolidated Statements of Income for all periods presented. Income from discontinued operations, net of tax, increased $786 million in the second quarter of 2017 as compared to the prior year period. The increase is primarily driven by a $798 million gain on sale of the Divested Business. Income from discontinued operations, net of tax, increased $801 million in the first six months of 2017 as compared to the prior year period. The increase is primarily driven by a $798 million gain on sale of the Divested Business.
Net Income Attributable to Aon Shareholders  
Net income attributable to Aon shareholders for the three months ended June 30, 2017 increased to $769 million , or $2.93 per diluted share, from $300 million , or $1.11 per diluted share, in the prior year period. Net income attributable to Aon shareholders for the six months of 2017 increased to $1,060 million , or $3.99 per diluted share, from $625 million , or $2.30 per diluted share, in the prior year period.
Non-GAAP Metrics
In our discussion of consolidated results, we sometimes refer to certain non-GAAP supplemental information derived from consolidated financial information specifically related to organic revenue growth, adjusted operating margin, adjusted diluted

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earnings per share, free cash flow, and the impact of foreign exchange rate fluctuations on operating results. This non-GAAP supplemental information should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto.
Organic Revenue Growth
We use supplemental information related to organic revenue growth to help us and our investors evaluate business growth from existing operations.  Organic revenue growth is a non-GAAP measure that includes the impact of intercompany activity and excludes the impact of changes in foreign exchange rate, acquisitions, divestitures, transfers between subsidiaries, fiduciary investment income, and reimbursable expenses.  This supplemental information related to organic revenue growth represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto.  Industry peers provide similar supplemental information about their revenue performance, although they may not make identical adjustments.  A reconciliation of this non-GAAP measure to the reported Total revenue is as follows (in millions, except percentages):

																								
 	 	Three Months Ended	
 	 	June 30, 2017	 	June 30, 2016	 	%
Change	 	Less:
Currency
Impact  (1)	 	Less: Fiduciary Investment Income (2)	 	Less: Acquisitions,
Divestitures & Other	 	Organic
Revenue
Growth  (3)	
Revenue	 	 		 	 		 	 		 	 		 	 	 	 		 	 		
Commercial Risk Solutions	 	$	1,042		 	$	990		 	5	 %	 	(1	)%	 	—	%	 	4	 %	 	2	%	
Reinsurance Solutions	 	344		 	332		 	4		 	(1	)	 	—		 	(1	)	 	6		
Retirement Solutions	 	389		 	405		 	(4	)	 	(4	)	 	—		 	(1	)	 	1		
Health Solutions	 	312		 	281		 	11		 	(1	)	 	—		 	7		 	5		
Data & Analytic Services	 	285		 	275		 	4		 	(1	)	 	—		 	1		 	4		
Elimination	 	(4	)	 	(1	)	 	N/A		 	N/A		 	N/A		 	N/A		 	N/A		
Total revenue	 	$	2,368		 	$	2,282		 	4	 %	 	(2	)%	 	—	%	 	3	 %	 	3	%	

																								
 	 	Six Months Ended	
 	 	June 30, 2017	 	June 30, 2016	 	%
Change	 	Less:
Currency
Impact  (1)	 	Less: Fiduciary Investment Income (2)	 	Less: Acquisitions,
Divestitures & Other	 	Organic
Revenue
Growth  (3)	
Revenue	 	 		 	 		 	 		 	 		 	 	 	 		 	 		
Commercial Risk Solutions	 	$	2,026		 	$	1,951		 	4	 %	 	(1	)%	 	—	%	 	3	 %	 	2	%	
Reinsurance Solutions	 	715		 	703		 	2		 	(1	)	 	—		 	(1	)	 	4		
Retirement Solutions	 	775		 	800		 	(3	)	 	(4	)	 	—		 	(1	)	 	2		
Health Solutions	 	684		 	573		 	19		 	(2	)	 	—		 	12		 	9		
Data & Analytic Services	 	553		 	534		 	4		 	(1	)	 	—		 	1		 	4		
Elimination	 	(4	)	 	(3	)	 	N/A		 	N/A		 	N/A		 	N/A		 	N/A		
Total revenue	 	$	4,749		 	$	4,558		 	4	 %	 	(2	)%	 	—	%	 	2	 %	 	4	%	

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

(2)	Fiduciary investment income for the three months ended June 30, 2017 and 2016 , respectively, was $7 million and $5 million. Fiduciary Investment Income for the six months ended June 30, 2017 and 2016 , respectively, was $13 million and $10 million.	

(3)	Organic revenue growth includes the impact of intercompany activity and excludes the impact of changes in foreign exchange rates, acquisitions, divestitures, transfers between business units, fiduciary investment income, and reimbursable expenses.	
Adjusted Operating Margin
We use adjusted operating margin as a non-GAAP measure of core operating performance of the Company.  Adjusted operating margin excludes the impact of certain items, as listed below, because management does not believe these expenses reflect our core operating performance. This supplemental information related to adjusted operating margin represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto.

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A reconciliation of this non-GAAP measure to the reported operating margin is as follows (in millions, except percentages):

																	
 	 	Three Months Ended	 	Six Months Ended	
 	 	June 30,
2017	 	June 30,
2016	 	June 30,
2017	 	June 30,
2016	
Revenue from continuing operations	 	$	2,368		 	$	2,282		 	$	4,749		 	$	4,558		
 	 	 	 	 	 	 	 	 	
Operating income from continuing operations - as reported	 	$	(118	)	 	$	387		 	$	225		 	$	807		
Amortization and impairment of intangible assets	 	460		 	38		 	503		 	75		
Restructuring	 	155		 	—		 	299		 	—		
Regulatory and compliance matters	 	34		 	—		 	34		 	—		
Pension settlement	 	—		 	62		 	—		 	62		
Operating income income from continuing operations - as adjusted	 	$	531		 	$	487		 	$	1,061		 	$	944		
 	 	 	 	 	 	 	 	 	
Operating margin from continuing operations - as reported	 	(5.0	)%	 	17.0	%	 	4.7	%	 	17.7	%	
Operating margin from continuing operations - as adjusted	 	22.4	 %	 	21.3	%	 	22.3	%	 	20.7	%	
Adjusted Diluted Earnings per Share
We use adjusted diluted earnings per share as a non-GAAP measure of our core operating performance. Adjusted diluted earnings per share excludes the items identified above, along with related income taxes, because management does not believe these expenses are representative of our core earnings. This supplemental information related to adjusted diluted earnings per share represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto.
A reconciliation of this non-GAAP measure to the reported Diluted earnings per share is as follows: 

												
 	 	Three Months Ended June 30, 2017	
(millions, except per share data)	 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income from continuing operations	 	$	(118	)	 	649		 	$	531		
Interest income	 	8		 	—		 	8		
Interest expense	 	(71	)	 	—		 	(71	)	
Other income	 	(5	)	 	—		 	(5	)	
Income before income taxes from continuing operations	 	(186	)	 	649		 	463		
Income taxes (1)	 	(143	)	 	215		 	72		
Net income from continuing operations	 	(43	)	 	434		 	391		
Income from discontinued operations, net of tax (2)	 	821		 	(799	)	 	22		
Net income	 	778		 	(365	)	 	413		
Less: Net income attributable to noncontrolling interests	 	9		 	—		 	9		
Net income attributable to Aon shareholders	 	$	769		 	(365	)	 	$	404		
 	 	 	 	 	 	 	
Diluted net income (loss) per share attributable to Aon shareholders
	 	 	 	 	 	 	
Continuing operations	 	$	(0.20	)	 	1.65		 	$	1.45		
Discontinued operations	 	$	3.13		 	(3.05	)	 	$	0.08		
Net income	 	$	2.93		 	(1.40	)	 	$	1.53		
 	 	 	 	 	 	 	
Weighted average ordinary shares outstanding - diluted	 	262.4		 	1.9		 	264.3		

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 	 	Three Months Ended June 30, 2016	
(millions, except per share data)	 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income from continuing operations	 	$	387		 	100		 	$	487		
Interest income	 	3		 	—		 	3		
Interest expense	 	(73	)	 	—		 	(73	)	
Other income	 	(1	)	 	—		 	(1	)	
Income before income taxes from continuing operations	 	316		 	100		 	416		
Income taxes (1)	 	43		 	19		 	62		
Net income from continuing operations	 	273		 	81		 	354		
Income from discontinued operations, net of tax (2)	 	35		 	23		 	58		
Net income	 	308		 	104		 	412		
Less: Net income attributable to noncontrolling interests	 	8		 	—		 	8		
Net income attributable to Aon shareholders	 	$	300		 	104		 	$	404		
 	 	 	 	 	 	 	
Diluted net income per share attributable to Aon shareholders	 	 	 	 	 	 	
Continuing operations	 	$	0.98		 	0.30		 	$	1.28		
Discontinued operations	 	$	0.13		 	0.09		 	$	0.22		
Net income	 	$	1.11		 	0.39		 	$	1.50		
 	 	 	 	 	 	 	
Weighted average ordinary shares outstanding - diluted	 	269.8		 	—		 	269.8		

	
												
 	 	Six Months Ended June 30, 2017	
(millions, except per share data)	 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income from continuing operations	 	$	225		 	836		 	$	1,061		
Interest income	 	10		 	—		 	10		
Interest expense	 	(141	)	 	—		 	(141	)	
Other income	 	(15	)	 	—		 	(15	)	
Income before income taxes from continuing operations	 	79		 	836		 	915		
Income taxes (1)	 	(143	)	 	265		 	122		
Net income from continuing operations	 	222		 	571		 	793		
Income from discontinued operations, net of tax (2)	 	861		 	(791	)	 	70		
Net income	 	1,083		 	(220	)	 	863		
Less: Net income attributable to noncontrolling interests	 	23		 	—		 	23		
Net income attributable to Aon shareholders	 	$	1,060		 	(220	)	 	$	840		
 	 	 	 	 	 	 	
Diluted net income per share attributable to Aon shareholders	 	 	 	 	 	 	
Continuing operations	 	$	0.75		 	2.15		 	$	2.90		
Discontinued operations	 	$	3.24		 	(2.98	)	 	$	0.26		
Net income	 	$	3.99		 	(0.83	)	 	$	3.16		
 	 	 	 	 	 	 	
Weighted average ordinary shares outstanding - diluted	 	265.7		 	—		 	265.7		

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 	 	Six Months Ended June 30, 2016	
(millions, except per share data)	 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income from continuing operations	 	$	807		 	137		 	$	944		
Interest income	 	5		 	—		 	5		
Interest expense	 	(142	)	 	—		 	(142	)	
Other income	 	17		 	—		 	17		
Income before income taxes from continuing operations	 	687		 	137		 	824		
Income taxes (1)	 	102		 	24		 	126		
Net income from continuing operations	 	585		 	113		 	698		
Income from discontinued operations, net of tax (2)	 	60		 	46		 	106		
Net income	 	645		 	159		 	804		
Less: Net income attributable to noncontrolling interests	 	20		 	—		 	20		
Net income attributable to Aon shareholders	 	$	625		 	159		 	$	784		
 	 	 	 	 	 	 	
Diluted net income per share attributable to Aon shareholders
	 	 	 	 	 	 	
Continuing operations	 	$	2.08		 	0.42		 	$	2.50		
Discontinued operations	 	$	0.22		 	0.17		 	$	0.39		
Net income	 	$	2.30		 	0.59		 	$	2.89		
 	 	 	 	 	 	 	
Weighted average ordinary shares outstanding - diluted	 	271.7		 	—		 	271.7		

(1)	The effective tax rates used in the U.S. GAAP financial statements for continuing operations were 76.9%  and (181.0)% , respectively, for the three and six months ended June 30, 2017 . Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with estimated restructuring expenses, accelerated tradename amortization, impairment charges, regulatory and compliance provisions, and non-cash pension settlement charges anticipated in Q4 2017, which are adjusted at the related jurisdictional rate. After adjusting to exclude the applicable tax impact, the adjusted effective tax rates for continuing operations were 15.6% and 13.3% , respectively, for the three and six months ended June 30, 2017 . The effective tax rates used in the U.S. GAAP financial statements for continuing operations were 13.6% and 14.8% , respectively, for the three and six months ended 2016 . Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with non-cash pension charges settled in Q2 2016, which are adjusted at the related jurisdictional rate. After adjusting to exclude the applicable tax impact, the adjusted effective tax rates for continuing operations were 14.9% and 15.3% , respectively, for the three and six months ended 2016 .	

(2)	Adjusted income from discontinued operations, net of tax, excludes the gain on sale and intangible asset amortization on discontinued operations of $1,972 million and $0 million, respectively, for the three months ended June 30, 2017 and $1,972 million and $11 million for the six months ended June 30, 2017. The effective tax rates used in the U.S. GAAP financial statements for discontinued operation were 59.0% and 58.1% , respectively, for the three months and six months ended June 30, 2017 . After adjusting to exclude the applicable tax impact associated with the gain on sale and intangible asset amortization, the adjusted effective tax rates for discontinued operations were 16.2% and 25.9% , respectively, for the three months and six months ended June 30, 2017 . Adjusted income from discontinued operations, net of tax, excludes intangible asset amortization on discontinued operations of $30 million and $60 million , respectively, for the three months and six months ended June 30, 2016 . The effective tax rates used in the U.S. GAAP financial statements for discontinued operation were 34.0% and 37.5% for the three and six months ended 2016 , respectively. After adjusting to exclude the applicable tax impact associated with amortization, the adjusted effective tax rates for discontinued operations were 30.1% and 32.1% for the three and six months ended 2016 , respectively.	

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Free Cash Flow
We use free cash flow, defined as cash flow provided by operations less capital expenditures, as a non-GAAP measure of our core operating performance and cash-generating capabilities of our business operations. This supplemental information related to free cash flow represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures. A reconciliation of this non-GAAP measure to the reported cash provided by continuing operating activities is as follows (in millions, except percentages):

												
 	 	Six Months Ended	
 	 	June 30, 2017	 	June 30, 2016	 	Percent
Change	
Cash Provided by Continuing Operating Activities	 	$	436		 	$	557		 	(22	)%	
Capital Expenditures Used for Continuing Operations	 	(82	)	 	(68	)	 	21		
Free Cash Flow Provided By Continuing Operations  	 	$	354		 	$	489		 	(28	)%	
Impact of Foreign Exchange Rate Fluctuations  
Because we conduct business in more than 100 countries, foreign exchange rate fluctuations have a significant impact on our business.  Foreign exchange rate movements may be significant and may distort true period-to-period comparisons of changes in revenue or pretax income.  Therefore, to give financial statement users meaningful information about our operations, we have provided an illustration of the impact of foreign currency exchange rates on our financial results.  The methodology used to calculate this impact isolates the impact of the change in currencies between periods by translating the prior year quarter’s revenue, expenses, and net income using the current quarter’s foreign exchange rates. 
Translating prior year quarter results at current quarter foreign exchange rates, currency fluctuations had a favorable impact of $0.05 on net income per diluted share during the three and six months ended June 30, 2017 . Currency fluctuations had no impact and an unfavorable impact of $0.05 , respectively, on net income per diluted share during the three and six months ended June 30, 2016 . Currency fluctuations had a favorable impact of $0.02 and $0.01 , respectively, on adjusted net income per diluted share during the three and six months ended June 30, 2017 and no impact and an unfavorable impact of $0.05 , on adjusted net income per diluted share during the three and six months ended June 30, 2016 . These translations are performed for comparative and illustrative purposes only and do not impact the accounting policies or practices for amounts included in the Condensed Consolidated Financial Statements.
Restructuring Plan
In 2017, we 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. We expect 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 real estate 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 is $50 million of estimated non-cash charges related to asset impairments and lease consolidations. We estimate that our annualized savings from the Restructuring Plan will be approximately $400 million by the end of 2019.
From the inception of the Restructuring Plan through June 30, 2017 , approximately 1,785 positions have been eliminated and a total of $299 million of restructuring and related separation charges have been incurred.  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.

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The following summarizes restructuring and separation costs by type that have been incurred through June 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 June 30, 2017	 	Six months ended June 30, 2017	 	Estimated Remaining Costs	 	Estimated Total Cost (1)	
Workforce reduction	 	$	102		 	$	205		 	$	98		 	$	303		
Technology rationalization (2)	 	7		 	10		 	136		 	146		
Lease consolidation (2)	 	1		 	4		 	76		 	80		
Asset impairments	 	11		 	24		 	16		 	40		
Other costs associated with restructuring and separation (2) (3)	 	34		 	56		 	125		 	181		
Total restructuring and related expenses	 	$	155		 	$	299		 	$	451		 	$	750		

(1)	Actual costs, when incurred, may vary due to changes in the assumptions built into this plan.  Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives.	

(2)	Contract termination costs included within Lease consolidations for the three and six months ended June 30, 2017 were $1 million and $5 million , respectively. No other contract termination costs were incurred through June 30, 2017 . Total estimated contract termination costs to be incurred under the Restructuring Plan associated with Technology rationalizations and Lease consolidations, respectively, are $9 million and $80 million .	

(3)	Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs and consulting and legal fees. These costs are generally recognized when incurred.	
As of June 30, 2017 , our liabilities for the Restructuring Plan were as follows (in millions): 

					
 	 	Restructuring Plan	
Balance at January 1, 2017	 	$	—		
Expensed	 	272		
Cash payments	 	(94	)	
Foreign currency translation and other	 	—		
Balance at June 30, 2017	 	$	178		
LIQUIDITY AND FINANCIAL CONDITION
Liquidity
Executive Summary
We believe that our balance sheet and strong cash flow provide us with adequate liquidity.  Our primary sources of liquidity are cash flow from operations, available cash reserves, and debt capacity available under our credit facility.  Our primary uses of liquidity are operating expenses, capital expenditures, acquisitions, share repurchases, pension obligations, and shareholder dividends. We believe that cash flows from operations, available credit facilities and the capital markets will be sufficient to meet our liquidity needs, including principal and interest payments on debt obligations, capital expenditures, pension contributions, and anticipated working capital requirements, for the foreseeable future.
Cash on our balance sheet includes funds available for general corporate purposes, as well as amounts restricted as to their use.  Funds held on behalf of clients in a fiduciary capacity are segregated and shown together with uncollected insurance premiums in Fiduciary assets in the Condensed Consolidated Statements of Financial Position, with a corresponding amount in Fiduciary liabilities. Fiduciary funds generally cannot be used for general corporate purposes, and are not a source of liquidity for us.
Operating Activities
Net cash provided by operating activities during the six months ended June 30, 2017 decreased $264 million , or 35% , to $500 million from the prior year period. Net cash provided by operating activities for continuing operations during the six months ended June 30, 2017 decreased $121 million , or 22% , from the prior year period to $436 million . Net cash provided by operating activities for discontinued operations during the six months ended June 30, 2017 decreased $143 million , or 69% , from the prior year period to $64 million . These amounts represent net income reported, as adjusted for gains or losses on sales of businesses,

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financial instruments and foreign exchange, and our non-cash expenses, which include share-based compensation, depreciation, and amortization and impairments, as well as changes in working capital that relate primarily to the timing of payments of accounts payable and accrued liabilities and collection of receivables. The total decrease in operating cash from the prior year was primarily driven by lower net income and increases in pension contributions.
Pension contributions were $79 million for the six months ended June 30, 2017 , as compared to $63 million for the six months ended June 30, 2016 . For the remainder of 2017 , we expect to contribute approximately $70 million in cash to our pension plans, with the majority attributable to non-U.S. pension plans, which are subject to changes in foreign exchange rates.  On July 1, 2017, the Company made non-cash contributions of approximately $80 million to its U.S. pension plan.
We expect cash generated by operations for 2017 to be sufficient to service our debt and contractual obligations, finance capital expenditures, continue purchases of shares under the Repurchase Program, and continue to pay dividends to our shareholders.  Although cash from operations is expected to be sufficient to service these activities, we have the ability to access the commercial paper markets or borrow under our credit facility to accommodate any timing differences in cash flows.  We have a committed credit facility totaling $900 million , all of which was available at June 30, 2017 , and can access this facility on a same day or next day basis.  Additionally, under current market conditions, we believe that we could access capital markets to obtain debt financing for longer-term funding, if needed.
Investing Activities
Cash flow provided by investing activities was $1,489 million during the six months ended June 30, 2017 . During the six months ended June 30, 2017 , cash flow provided by investing activities in continuing operations was $1,508 million and cash flow used for investing activities in discontinued operations was $19 million . The primary driver of the total cash flow provided by investing activities was $4,193 million of sales of businesses, net of cash sold, offset by $2,451 million in net purchases of short-term investments, $149 million of acquisitions of businesses, net of cash acquired, and $101 million of capital expenditures in continuing and discontinued operations, and $3 million of net purchases of long-term investments. The gains and losses corresponding to cash flows provided by the net sales of long-term investments are recognized in Other income (expense) in the Condensed Consolidated Statements of Income.
Cash flow used for investing activities was $84 million during the six months ended June 30, 2016 . During the six months ended June 30, 2016 , cash flow used for investing activities in continuing operations was $48 million and cash flow used for investing activities in discontinued operations was $36 million . The primary drivers of the total cash flow used for investing activities were $183 million of acquisitions of businesses, net of cash acquired, $104 million of capital expenditures in continuing and discontinued operations, and $6 million of net purchases of long-term investments, offset by $106 million in net sales of short-term investments and $103 million in proceeds from the sale of businesses.
Financing Activities
Cash flow used for financing activities during the six months ended June 30, 2017 was $1,770 million , all of which was related to continuing operations. The primary drivers of the cash flow used for financing activities were $1,100 million of share repurchases, $339 million of repayments of debt, net of issuances , $182 million of dividends paid to shareholders, $139 million in net cash payments related to issuance of shares, and $10 million of transactions with noncontrolling interests and other financing activities.
Cash flow used for financing activities during the six months ended June 30, 2016 was $644 million , all of which was related to continuing operations. The primary drivers of cash flow used for financing activities were $750 million of share repurchases, $169 million of dividends paid to shareholders, $87 million in net cash payments related to issuance of shares, and $62 million of transactions with noncontrolling interests and other financing activities, partially offset by $424 million of issuances of debt, net of repayments.
Cash and Investments
At June 30, 2017 , our Cash and cash equivalents and Short-term investments were $3,430 million , an increase of $2,714 million from December 31, 2016 . This increase was primarily related to $4,193 million received in connection with the Divested Business and $500 million cash provided by operations, partially offset by $1,100 million in share repurchases, $339 million in repayments of debt issuances, net of issuances, $182 million in dividends, $149 million in acquisitions of businesses, net of cash acquired, and $101 million of capital expenditures.  Of the total balance at June 30, 2017 , $91 million was restricted as to its use, which was comprised of £42.7 million ( $54.3 million at June 30, 2017 exchange rates) of operating funds in the U.K., as required by the Financial Conduct Authority, and $37 million held as collateral for various business purposes.  At June 30, 2017 , $5.3 billion of Cash and cash equivalents and Short-term investments were held in the U.S. and overdrawn Cash and cash equivalents and Short-term investments of $1.9 billion were held in other countries. We maintain multicurrency cash pools with third-party banks in which various Aon entities participate. Individual Aon entities are permitted to overdraw on their individual accounts provided

53

the overall global balance does not fall below zero. At June 30, 2017 , non-U.S. cash balances of one or more entities were negative; however, the overall balance was positive.
Of the total balance of Cash and cash equivalents and Short-term investments at December 31, 2016 , $82 million was restricted as to its use, which was comprised of £43.3 million ( $53.2 million at December 31, 2016 exchange rates) of operating funds in the U.K., as required by the Financial Conduct Authority, and $29 million held as collateral for various business purposes. At December 31, 2016 , $1.9 billion of cash and cash equivalents and short-term investments were held in the U.S. and overdrawn Cash and cash equivalents and Short-term investments of $1.2 billion were held in other countries.
In our capacity as an insurance broker or agent, we collect premiums from insureds and, after deducting our commission, remit the premiums to the respective insurance underwriter.  We also collect claims or refunds from underwriters on behalf of insureds, which are then returned to the insureds.  Unremitted insurance premiums and claims are held by us in a fiduciary capacity.  In addition, some of our outsourcing agreements require us to hold funds on behalf of clients to pay obligations on their behalf.  The levels of fiduciary assets and liabilities can fluctuate significantly, depending on when we collect premiums, claims, and refunds, make payments to underwriters and insureds, collect funds from clients and make payments on their behalf, and the movement of foreign currency exchange rates.  Fiduciary assets, because of their nature, are generally invested in very liquid securities with highly-rated, credit-worthy financial institutions.  In our Condensed Consolidated Statements of Financial Position, the amounts we report for Fiduciary assets and Fiduciary liabilities are equal.  Our Fiduciary assets included cash and short-term investments of $3.7 billion and $3.3 billion at June 30, 2017 and December 31, 2016 , respectively, and fiduciary receivables of $5.9 billion and $5.7 billion at June 30, 2017 and December 31, 2016 , respectively.  While we earn investment income on the fiduciary assets held in cash and investments, the cash and investments cannot be used for general corporate purposes.
As disclosed in Note 13 “Fair Value Measurements and Financial Instruments” of Notes to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this report, the majority of our investments carried at fair value are money market funds.  These money market funds are held throughout the world with various financial institutions.  We are not aware of any market liquidity issues that would materially impact the fair value of these investments.
At June 30, 2017 , our investments in money market funds had a fair value of $4.1 billion and are reported as Short-term investments or Fiduciary assets in the Condensed Consolidated Statements of Financial Position depending on their nature.

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The following table summarizes our Fiduciary assets, non-fiduciary Cash and cash equivalents, and Short-term investments at June 30, 2017 (in millions):

																	
 	 	Statement of Financial Position Classification	 	 	
Asset Type	 	Cash and Cash
Equivalents	 	Short-term
Investments	 	Fiduciary
Assets	 	Total	
Certificates of deposit, bank deposits or time deposits	 	$	684		 	$	—		 	$	2,341		 	$	3,025		
Money market funds  	 	—		 	2,746		 	1,371		 	4,117		
Cash and short-term investments	 	684		 	2,746		 	3,712		 	7,142		
Fiduciary receivables	 	—		 	—		 	5,870		 	5,870		
Total	 	$	684		 	$	2,746		 	$	9,582		 	$	13,012		
Share Repurchase Program  
The Company has a share repurchase program authorized by its Board of Directors (the “Repurchase Program”). The Repurchase Program was established in April 2012 with up to $5.0 billion in authorized repurchases and increased in November 2014 and February 2017 by incremental increases of $5.0 billion in authorized repurchases at each of those times.
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 second quarter of 2017 , we repurchased 8.0 million shares at an average price per share of $128.54 for a total cost of $1.0 billion . We recorded an additional $5.1 million of costs associated with the repurchases to retained earnings during the quarter. During the six months ended June 30, 2017 , we repurchased 9.1 million shares at an average price per share of $126.85 , for a total cost of $1.2 billion . The Company recorded an additional $5.8 million of costs associated with the repurchases to retained earnings during the six months ended June 30, 2017. Included in the 8.0 million shares and 9.1 million shares repurchased during the three and six months ended June 30, 2017 was 450 thousand shares that did not settle until July 2017. These shares were settled at an average price per share of $133.24 and total cost of $60.0 million . In the second quarter of 2016 , the Company did not repurchase shares under the Repurchase Program. During the six months ended June 30, 2016 , we repurchased 7.7 million shares at an average price per share of $97.92 for a total cost of approximately $750 million .
At June 30, 2017 , the remaining authorized amount for share repurchase under the Repurchase Program is approximately $6.7 billion . Under the Repurchase Program, we have repurchased a total of 99.3 million shares for an aggregate cost of approximately $8.3 billion .
For information regarding share repurchases made during the second quarter of 2017 , see Part II, Item 2 of this report.
Distributable Reserves
As a U.K. company incorporated in England and Wales, we are required under U.K. law to have available “distributable reserves” to make share repurchases or pay dividends to shareholders. Distributable reserves are created through the earnings of the U.K. parent company. Distributable reserves are not linked to a U.S. GAAP reported amount (e.g., retained earnings). As of June 30, 2017 and December 31, 2016 , we had distributable reserves in excess of $2.7 billion and $1.6 billion , respectively. We believe that we will have sufficient distributable reserves to fund shareholder dividends, if and to the extent declared, for the foreseeable future.
Borrowings
Total debt at June 30, 2017 was $5.9 billion , which represents a decrease of $282 million compared to December 31, 2016 . Commercial paper activity during the three and six months ended June 30, 2017 included total issuances of $654 million and $1,648 million , respectively, compared to $1,008 million and $1,308 million , respectively, for the three and six months ended June 30, 2016 , offset by repayments of $1,050 million and $1,997 million , respectively, during the three and six months ended June 30, 2017 , compared to $953 million and $1,125 million , respectively, for the three and six months ended June 30, 2016 . The proceeds of the commercial paper issuances were used primarily for short-term working capital needs.

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Credit Facilities
As of June 30, 2017 , Aon plc had one primary committed credit facility outstanding: its $900 million multi-currency U.S. credit facility expiring in February 2021 (the “2021 Facility”). Our $400 million U.S. credit facility expired in March 2017. The 2021 facility is intended to support our commercial paper obligations and our general working capital needs.  In addition, this facility includes customary representations, warranties and covenants, including financial covenants that require us to maintain specified ratios of adjusted consolidated EBITDA to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, tested quarterly.  During the second quarter of 2017, Aon amended the consolidated EBITDA definition within our 2021 Facility to exclude non-cash pension expenses and restructuring charges, not to exceed the total estimated costs of $750 million. At June 30, 2017 , we had no borrowings under, and were in compliance with, these financial covenants and all other covenants contained in the 2021 Facility during the three and six months ended June 30, 2017 .
Our total debt-to-EBITDA ratio at June 30, 2017 and 2016 based on a rolling twelve months is calculated as follows (in millions):

								
 	Rolling twelve months ended	
 	June 30,	
 	2017	 	2016	
Net income	$	890		 	$	1,304		
Interest expense	281		 	282		
Income taxes	(97	)	 	200		
Depreciation of fixed assets	191		 	161		
Amortization and impairment of intangible assets	585		 	159		
Restructuring charges	275		 	—		
Non-cash pension expense	125		 	36		
Total EBITDA	$	2,250		 	$	2,142		
Total Debt	$	5,923		 	$	6,158		
Total debt-to-EBITDA ratio	2.6	 	2.9	
The debt-to-EBITDA ratio was retrospectively restated to exclude the impact of discontinued operations related to the sale of the Divested Business. Refer to Note 3 “Discontinued Operations” of Notes to Condensed Consolidated Financial Statements for further information.
We use EBITDA for continuing operations, as defined by our financial covenants, as a non-GAAP measure. This supplemental information related to EBITDA represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto.
Shelf Registration Statement
On September 3, 2015, we filed a shelf registration statement with the U.S. Securities and Exchange Commission (the “SEC”), registering the offer and sale from time to time of an indeterminate amount of, among other securities, debt securities, preference shares, Class A Ordinary Shares and convertible securities. Our ability to access the market as a source of liquidity is dependent on investor demand, market conditions and other factors.
Rating Agency Ratings
The major rating agencies’ ratings of our debt at August 4, 2017 appear in the table below. 

						
 	Ratings	 	 	
 	Senior Long-term Debt	 	Commercial Paper	 	Outlook	
Standard & Poor’s	A-	 	A-2	 	Stable	
Moody’s Investor Services	Baa2	 	P-2	 	Stable	
Fitch, Inc.	BBB+	 	F-2	 	Stable	
A downgrade in the credit ratings of our senior debt and commercial paper could increase our borrowing costs, reduce or eliminate our access to capital, reduce our financial flexibility, increase our commercial paper interest rates, or restrict our access to the commercial paper market altogether, and/or impact future pension contribution requirements.

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Guarantees and Indemnifications
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 the leases at any time during the remainder of the lease agreements, which expire on various dates through 2024. As of June 30, 2017 , the undiscounted maximum potential future payments under the lease guarantee were $108 million , with an estimated fair value of $39 million .
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 arrangement, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023.  As of June 30, 2017 , the undiscounted maximum potential future payments under the performance guarantees were $401 million , with an estimated fair value of $4 million .
Letters of Credit and Other Guarantees
We have entered into a number of arrangements whereby our performance on certain obligations is guaranteed by a third party through the issuance of a letter of credit (“LOCs”). We had total LOCs outstanding of approximately $89 million at June 30, 2017 , compared to $90 million at December 31, 2016 . These LOCs cover the beneficiaries related to certain of our U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for our own workers compensation program. We also have obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at our international subsidiaries.
We have 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 $88 million at June 30, 2017 , compared to $95 million at December 31, 2016 .
Other Liquidity Matters
We do not have significant exposure related to off-balance sheet arrangements. Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. See “Information Concerning Forward-Looking Statements” below.
Financial Condition
At June 30, 2017 , our net assets representing total assets minus total liabilities were $5.6 billion , an increase from $5.5 billion at December 31, 2016 . The increase was due primarily to Net income of $1,083 million , a decrease of $235 million in Accumulated other comprehensive loss, and an increase of $49 million due to the adoption of the share-based compensation guidance in the first quarter of 2017 , partially offset by $1,160 million of share repurchases and $182 million of dividend payments for the six months ended June 30, 2017 .  Working capital increased by $1,576 million to $2,227 million from December 31, 2016 .
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss decreased $235 million to $3,677 million at June 30, 2017 as compared to $3,912 million at December 31, 2016 , which was primarily driven by the following:

•	positive net foreign currency translation adjustments of $195 million , which are attributable to the weakening of the U.S. dollar against certain foreign currencies,	

•	an increase of $38 million in net post-retirement benefit obligations, and	

•	net financial instrument gains of $2 million .	
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no changes in our critical accounting policies, which include revenue recognition, pensions, goodwill and other intangible assets, contingencies, share-based payments, and income taxes, as discussed in our 2016 Annual Report on Form 10-K, other than those described below.

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Restructuring
Workforce reduction costs
The method used to account for workforce reduction costs depends on whether the costs result from an ongoing severance plan or are one-time costs. We account for relevant expenses as severance costs when we have an established severance policy, statutory requirements dictate the severance amounts, or we have an established pattern of paying by a specific formula. We recognize these costs when the likelihood of future settlement is probable and the amount of the related benefit is reasonably estimable, or on a straight-line basis over the remaining service period, if applicable.
We estimate our one-time workforce reduction costs related to exit and disposal activities not resulting from an ongoing severance plan based on the benefits available to the employees being terminated. We recognize these costs when we identify the specific classification (or functions) and locations of the employees being terminated, notify the employees who might be included in the termination, and expect to terminate employees within the legally required notification period. When employees are receiving incentives to stay beyond the legally required notification period, we record the cost of their severance over the remaining service period.
Lease consolidation costs
Where we have provided notice of cancellation pursuant to a lease agreement or abandoned space and have no intention of reoccupying it, we recognize a loss. The loss reflects our best estimate of the net present value of the future cash flows associated with the lease at the date we provide notice of cancellation in accordance with contractual terms, vacate the property, or sign a sublease arrangement. To determine the loss, we estimate sublease income based on current market quotes for similar properties. When we finalize definitive agreements with the sublessee, we adjust our sublease losses for actual outcomes.
Fair value concepts of one-time workforce reduction costs and lease losses
Accounting guidance requires that our exit and disposal accruals reflect the fair value of the liability. Where material, we discount the lease loss calculations to arrive at their net present value. Most workforce reductions happen over a short span of time, so no discounting is necessary.
For the remaining lease term, we decrease the liability for payments and increase the liability for accretion of the discount, if material. The discount reflects our incremental borrowing rate, which matches the lifetime of the liability. Significant changes in the discount rate selected or the estimations of sublease income in the case of leases could impact the amounts recorded.
Asset impairments
Asset impairments are accounted for in the period when they become known. Furthermore, we record impairments by reducing the book value to the net present value of future cash flows (in situations where the asset had an identifiable cash flow stream) or accelerating the depreciation to reflect the revised useful life. Asset impairments are included in Depreciation in the Condensed Consolidated Statements of Income.
Other associated costs of exit and disposal activities
We recognize other costs associated with exit and disposal activities as they are incurred, including separation costs, moving costs and consulting and legal fees.
NEW ACCOUNTING PRONOUNCEMENTS
Note 2 “Accounting Principles and Practices” to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this report contains a discussion of recently issued accounting pronouncements and their impact or future potential impact on our financial results, if determinable.

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

•	general economic and political conditions in different countries in which we do business around the world;	

•	changes in the competitive environment;	

•	fluctuations in exchange and interest rates that could influence revenues and expenses;	

•	changes in global equity and fixed income markets that could affect the return on invested assets;	

•	changes in the funding status of our various defined benefit pension plans and the impact of any increased pension funding resulting from those changes;	

•	the level of our debt limiting financial flexibility or increasing borrowing costs;	

•	rating agency actions that could affect our ability to borrow funds;	

•	the effect of the change in global headquarters and jurisdiction of incorporation, including differences in the anticipated benefits;	

•	changes in estimates or assumptions on our financial statements;	

•	limits on our subsidiaries to make dividend and other payments to us;	

•	the impact of lawsuits and other contingent liabilities and loss contingencies arising from errors and omissions and other claims against us;	

•	the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which we operate, particularly given the global scope of our businesses and the possibility of conflicting regulatory requirements across jurisdictions in which we do business;	

•	the impact of any investigations brought by regulatory authorities in the U.S., U.K. and other countries;	

•	the impact of any inquiries relating to compliance with the U.S. Foreign Corrupt Practices Act and non-U.S. anti-corruption laws and with U.S. and non-U.S. trade sanctions regimes;	

•	failure to protect intellectual property rights or allegations that we infringe on the intellectual property rights of others;	

•	the effects of English law on our operating flexibility and the enforcement of judgments against us;	

•	the failure to retain and attract qualified personnel;	

•	international risks associated with our global operations;	

•	the effect of natural or man-made disasters;	

•	the potential of a system or network breach or disruption resulting in operational interruption or improper disclosure of personal data;	

•	our ability to develop and implement new technology;	

59

		
•	damage to our reputation among clients, markets or third parties;	

•	the actions taken by third parties that perform aspects of our business operations and client services;	

•	the extent to which we manage certain risks created in connection with the various services, including fiduciary and investments and other advisory services and business process outsourcing services, among others, that we currently provide, or will provide in the future, to clients;	

•	our ability to continue, and the costs associated with, growing, developing and integrating companies that we acquire or new lines of business;	

•	changes in commercial property and casualty markets, commercial premium rates or methods of compensation;	

•	changes in the health care system or our relationships with insurance carriers;	

•	our ability to implement initiatives intended to yield cost savings and the ability to achieve those cost savings;	

•	our risks and uncertainties in connection with the sale of our Benefits Administration and HR Business Process Outsourcing business; and	

•	our ability to realize the expected benefits from our restructuring plan.	
Any or all of our forward-looking statements may turn out to be inaccurate, and there are no guarantees about our performance.  The factors identified above are not exhaustive.  Aon and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently.  Accordingly, readers should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made.  We are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statement that we may make from time to time, whether as a result of new information, future events or otherwise.  Further information about factors that could materially affect Aon, including our results of operations and financial condition, is contained in Part III, Item 1A Risk Factors of this report and in the “Risk Factors” section in Part I, “Item 1A Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2016 . These factors may be revised or supplemented in subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
Item 3.  Quantitative and Qualitative Disclosures about Market Risk  
We are exposed to potential fluctuations in earnings, cash flows and the fair value of certain of our assets and liabilities due to changes in interest rates and foreign exchange rates.  To manage the risk from these exposures, we enter into a variety of derivative instruments.  We do not enter into derivatives or financial instruments for trading or speculative purposes.
The following discussion describes our specific exposures and the strategies we use to manage these risks. There have been no changes in our critical accounting policies for financial instruments and derivatives as discussed in our 2016 Annual Report on Form 10-K.
Foreign Exchange Risk
We are subject to foreign exchange rate risk. Our primary exposures include exchange rates between the U.S. Dollar and the Euro, the British Pound, the Canadian Dollar, the Australian Dollar, and the Indian Rupee.  We use over-the-counter options and forward contracts to reduce the impact of foreign currency risk to our financial statements.
Additionally, some of our non-U.S. brokerage subsidiaries receive revenue in currencies that differ from their functional currencies.  Our U.K. subsidiaries earn a portion of their revenue in U.S. Dollars and Euros, but most of their expenses are incurred in British Pounds.  At June 30, 2017 , we have hedged approximately 45% of our U.K. subsidiaries’ expected exposures to both U.S. Dollar and Euro transactions for the years ending December 31, 2017 and 2018 , respectively. We generally do not hedge exposures beyond three years.
We also use forward contracts to economically hedge foreign exchange risk associated with monetary balance sheet exposures, such as inter-company notes and short-term assets and liabilities that are denominated in a non-functional currency and are subject to remeasurement.
The translated value of revenue and expense from our international brokerage operations are subject to fluctuations in foreign exchange rates. If we were to translate prior year results at current quarter exchange rates, diluted earnings per share would have a favorable impact of $0.05 during the three and six months ended June 30, 2017 .  Further, adjusted diluted earnings per share, a non-GAAP measure as defined and reconciled under the caption “Review of Consolidated Results — Adjusted Diluted Earnings Per Share” would have a favorable impact of $0.02 and $0.01 , respectively, during the three and six months ended June 30, 2017 if we were to translate prior year results at current quarter exchange rates.

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Interest Rate Risk
Our fiduciary investment income is affected by changes in international and domestic short-term interest rates.  We monitor our net exposure to short-term interest rates and, as appropriate, hedge our exposure with various derivative financial instruments.  This activity primarily relates to brokerage funds held on behalf of clients in the U.S. and in continental Europe. A decrease in global short-term interest rates adversely affects our fiduciary investment income.
Item 4.   Controls and Procedures
Evaluation of disclosure controls and procedures.  We have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report of June 30, 2017 .  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective such that the information relating to Aon, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in appropriate statute, SEC rules and forms, and is accumulated and communicated to Aon’s management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting.  No changes in Aon’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the quarter ended  June 30, 2017  that have materially affected, or that are reasonably likely to materially affect, Aon’s internal control over financial reporting.

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Part II Other Information
 
Item 1. Legal Proceedings  
See Note 16 “Commitments and Contingencies — Legal” to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this report, which is incorporated by reference herein.
Item 1A. Risk Factors
The risk factors set forth in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2016 reflect certain risks associated with existing and potential lines of business and contain “forward-looking statements” as discussed in Part I, Item 2 of this report.  Readers should consider them in addition to the other information contained in this report as our business, financial condition or results of operations could be adversely affected if any of these risks actually occur.
Except as otherwise described below, there were no material changes to the risk factors previously disclosed in our 2016 From 10-k.
We have added the risk factor “We may not realize all of the expected benefits from our restructuring plan.”
We have replaced the risk factor, “We are subject to various risks and uncertainties in connection with the pending sale of our Benefits and Administration and HR Business Process Outsourcing (BPO) Platform” with “We are subject to various risks and uncertainties in connection with the sale of our Benefits Administration and HR Business Process Outsourcing business.”
We may not realize all of the expected benefits from our restructuring plan.
In 2017, we initiated a global restructuring plan (the “Restructuring Plan”) in connection with the sale of our benefits administration and business process outsourcing business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight and connectivity. We expect 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 Restructuring Plan, consisting of approximately $303 million in employee termination costs, $146 million in IT rationalization costs, $80 million in real estate realization costs, $40 million in asset impairment costs and $181 million in other costs associated with the restructuring. Included in the estimated $750 million is $50 million of estimated non-cash charges related to asset impairments and lease consolidations.
We estimate that our annualized savings from the Restructuring Plan will be approximately $400 million by the end of 2019. Actual total costs, savings and timing of the Restructuring Plan may vary from these estimates due to changes in the scope or assumptions underlying the Restructuring Plan.  We therefore cannot assure that we will achieve the targeted savings. Unanticipated costs or unrealized savings in connection with the Restructuring Plan could adversely affect our results of operations and financial condition.
We are subject to various risks and uncertainties in connection with the sale of our Benefits Administration and HR Business Process Outsourcing business.

On February 9, 2017, we entered into a Purchase Agreement with Tempo Acquisition, LLC to sell our benefits administration and business process outsourcing business to the Buyer, an entity controlled by affiliates of The Blackstone Group L.P. On May 1, 2017, the transaction was consummated and the Buyer purchased all of the outstanding equity interests in each of the Divested Business’s subsidiaries, plus certain related assets, for a purchase price of (i) $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and (ii) deferred consideration of up to $500 million, plus the assumption of certain liabilities.

The Transaction carries inherent risks, including the risk that Aon will not earn the $500 million of additional consideration or otherwise realize the intended value of the Transaction, as well as risks connected with separating the Divested Business from Aon. Because the Divested Business represented 19% of our gross revenues for the fiscal year 2016, our results of operations and financial condition may be materially adversely affected, or may not be accretive to adjusted earnings per share as anticipated, if we fail to effectively reduce our overhead costs to reflect the reduced scale of operations or fail to grow our other business as expected. Additionally, the separation of the Divested Businesses from the rest of Aon’s business will require significant resources, which may disrupt operations or divert management’s attention from Aon’s day-today operations and efforts to grow our other businesses.

Furthermore, we have entered into ongoing commercial arrangements with the Buyer.  If we do not realize the intended benefits of these arrangements, it could affect our results of operations or adversely affect our relationship with clients, partners, colleagues

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and other third parties.  Additionally, if the Divested Business does not deliver the level of service to which our clients and partners are accustomed, it could adversely affect our relationships with such third parties.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  
Issuer Purchases of Equity Securities.
The following information relates to the purchase of equity securities by Aon or any affiliated purchaser during each month within the second quarter of 2017 :

															
Period	 	Total Number of Shares Purchased	 	Average Price Paid per Share (1)	 	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	 	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)(2)	
4/1/17 - 4/30/17	 	837,564		 	$	119.39		 	837,564		 	$	7,598,328,724		
5/1/17 - 5/31/17	 	3,877,896		 	126.34		 	3,877,896		 	7,108,403,638		
6/1/17 - 6/30/17	 	3,296,735		 	133.45		 	3,296,735		 	6,668,439,388		
Total	 	8,012,195		 	$	128.54		 	8,012,195		 	$	6,668,439,388		

(1)	Does not include commissions or other costs paid to repurchase shares.	

(2)	Our board of directors authorized the Company’s share repurchase program in April 2012. In November 2014 and February 2017, our board of directors authorized incremental increases of $5.0 billion each time. During the second quarter of 2017 , we repurchased 8.0 million shares at an average price per share of $128.54 for a total cost of $1.0 billion . Included in the 8.0 million shares repurchased was 450 thousand shares, which are included in the above table, that did not settle until July 2017. These shares were settled at an average price per share of $133.24 and total cost of $60.0 million .	
We did not make any unregistered sales of equity in the second quarter.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits  
Exhibits — The exhibits filed with this report are listed on the attached Exhibit Index.

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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			
 	Aon plc	
 	(Registrant)	
 	 	
August 4, 2017	By:	/s/ Laurel Meissner	
 	LAUREL MEISSNER	
 	SENIOR VICE PRESIDENT AND	
 	GLOBAL CONTROLLER	
 	(Principal Accounting Officer and duly authorized officer of Registrant)	

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Exhibit Index

			
Exhibit Number	 	Description of Exhibit	
10.1	 	Second Amendment to the Aon Deferred Compensation Plan, effective April 19, 2017.	
10.2	 	Transition and Separation Agreement entered into between Aon Corporation and Kristi Savacool, dated April 25, 2017.	
10.3	 	Amendment No. 1 to the Credit Agreement among Aon plc, Aon Corporation and Aon UK Limited, the banks, financial institutions and other institutional lenders party to the Credit Agreement, dated June 21, 2017.	
12.1	 	Statement regarding Computation of Ratio of Earnings to Fixed Charges.	
31.1	 	Certification of CEO.	
31.2	 	Certification of CFO.	
32.1	 	Certification of CEO Pursuant to section 1350 of Title 18 of the United States Code.	
32.2	 	Certification of CFO Pursuant to section 1350 of Title 18 of the United States Code.	
101	 	Interactive Data Files. The following materials are filed electronically with this Quarterly Report on Form 10-Q:	
 	 	101.INS XBRL Report Instance Document	
 	 	101.SCH XBRL Taxonomy Extension Schema Document	
 	 	101.CAL XBRL Taxonomy Calculation Linkbase Document	
 	 	101.DEF XBRL Taxonomy Definition Linkbase Document	
 	 	101.PRE XBRL Taxonomy Presentation Linkbase Document	
 	 	101.LAB XBRL Taxonomy Calculation Linkbase Document	

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EXHIBIT 10.1

SECOND AMENDMENT TO THE 
 AON DEFERRED COMPENSATION PLAN
This Second Amendment (the “Amendment”) to the Aon Deferred Compensation Plan, as amended and restated effective November 17, 2016 (the “Plan”), is adopted by Aon Corporation, a Delaware corporation (the “Company”) and wholly owned subsidiary of Aon plc (“Aon”), to be effective as set forth below.
RECITALS
WHEREAS, pursuant to Section 6.05 of the Plan, the Board of Directors of the Company (the “Board”) has the authority to amend the Plan, and, pursuant to Section 1.04 of the Plan, the Organization and Compensation Committee of Aon (the “OCC“) has authority to act for the Board with respect to the Plan; and
WHEREAS, pursuant to resolutions of the OCC dated March 30, 2017, the OCC has delegated authority to Company management authority to amend the Plan in the manner set forth below.
NOW, THEREFORE, pursuant to such delegation of authority by the OCC, the Plan is hereby amended, effective as of the date hereof, by adding the following as a new Supplement A to the Plan:
SUPPLEMENT A
SPECIAL PROVISIONS IN CONNECTION WITH PLAN SPIN-OFF

Pursuant to the purchase agreement entered into between Aon plc and Tempo Acquisition, LLC dated as of February 9, 2017 (the “Purchase Agreement”), upon the closing of the transactions contemplated by the Purchase Agreement, the Plan will spin off the benefit obligations associated with the “Transferred Participants” (as defined below) to the Hewitt Associates LLC Deferred Compensation Plan (the “Newco Plan”) established by Hewitt Associates LLC (“Newco”).
A “Transferred Participant” is any individual who (i) after taking into account any employment transfers contemplated by the Purchase Agreement, is employed by Newco or any of its subsidiaries immediately after the “Closing Date” (as defined in the Purchase Agreement), and (ii) immediately prior to the Closing Date, either had an Account under the Plan or had made a valid deferral election under Section 3 of the Plan.
Notwithstanding any provision in this Plan to the contrary, it is the intent of the Company that, with respect to any Transferred Participant, the associated benefit obligations, elections (including elections to defer compensation, notional investment elections, and distribution elections) and beneficiary designations under the Plan be transferred from the Plan to the Newco Plan, and the provisions in this Plan shall be interpreted consistent with such intent. For the avoidance of doubt, the transactions contemplated by the Purchase Agreement do not constitute a “separation from service” for purposes of Section 409A of the Code, with respect to any Transferred Participant. Effective as of the Closing Date, Transferred Participants shall cease to be Participants in the Plan.
Notwithstanding any provision in the Plan to the contrary, the Committee shall have the authority to make any other modifications to the extent necessary or appropriate to satisfy the intent of the Plan spin-off described above.

1

EXHIBIT 10.1

IN WITNESS WHEREOF , the Company has caused this Second Amendment to be executed on its behalf by its duly authorized officers, this 19 th day of April, 2017.

AON CORPORATION                    

By:                            

___/s/ Anthony Goland___________________________                
Anthony Goland
Executive Vice President and
Chief Human Resources Officer

2

EXHIBIT 10.2

TRANSITION AND SEPARATION AGREEMENT
This Transition and Separation Agreement (this “ Agreement ”), effective as of April 25, 2017 (the “ Effective Date ”), is entered into by and between Aon Corporation, a Delaware corporation (the “ Company ”), and Kristi Savacool (the “ Executive ”).
WHEREAS, the Company and the Executive previously entered into an employment agreement effective February 24, 2015 (the “ Prior Agreement ”);
WHEREAS, the Company desires to enter into an agreement regarding the Executive’s continued employment from the Effective Date to December 31, 2017 (the “ Transition Period ”), the Executive’s separation from employment with the Company and its affiliates to be effective December 31, 2017 (the “ Separation Date ”), and the Executive’s release of claims, upon the terms and conditions set forth herein; and
WHEREAS, upon execution of this Agreement by the Company and the Executive, the Prior Agreement shall be superseded and replaced in its entirety and shall have no further force or effect (except as otherwise explicitly set forth herein).
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows:

1.	Transition . The Company will employ the Executive during the Transition Period under the title of Special Advisor to the CEO.	

2.	Responsibilities . During the Transition Period, the Executive will report to the Chief Executive Officer of the Company (the “ CEO ”), and her responsibilities will focus on oversight of the separation of the outsourcing business in a manner that delivers full value capture for all parties, and such other special projects and other responsibilities as determined by mutual agreement with the CEO. In addition, during the Transition Period, the Executive will work toward achievement of the Transition Goals as set forth in Section 5(b).	

3.	Salary and Benefits .	

a.	Base Salary . During the Transition Period, the Company will pay the Executive a base salary at a rate of $800,000 per year (the “ Base Salary ”), payable in accordance with the Company’s payroll policies.	

b.	Employee Benefits . During the Transition Period, the Executive will be entitled to participate in the Company’s employee benefit plans generally available to senior employees of the Company, in accordance with the terms of such plans, including the Northwestern Executive Health Plan. Nothing in this Agreement will require the Company to establish, maintain, or continue any of the benefits already in existence or hereafter adopted for senior employees	

	

of the Company, and nothing in this Agreement will restrict the right of the Company to amend, modify, or terminate such programs.

c.	Executive Relocation . The Company will relocate the Executive from one residence in Illinois to one new residence in Nevada or Washington, in accordance with the Aon Senior Executive Domestic Transfer Policy. In addition, the Company will provide price protection for the sale of the Executive’s Illinois residence of up to $300,000 gross as compared to the original purchase price.	

d.	Legal Fees . The Company will pay the legal fees incurred by Executive in connection with the negotiation and execution of this Agreement, up to a maximum amount of $25,000.	

e.	Expense Reimbursement . In accordance with Company policies and procedures and on prescribed Company forms, the Company will reimburse the Executive for all proper expenses incurred by the Executive in the performance of her duties hereunder.	

4.	Separation .	

a.	Separation on the Separation Date . Unless earlier terminated as provided herein, the Executive’s employment with the Company shall terminate on the Separation Date. Such termination on the Separation Date shall be deemed a termination of employment “without Cause” by mutual agreement for purposes of this Agreement and the Company’s compensation and benefit plans. The Company will pay the Executive (i) all accrued but unpaid base salary and vested benefits (subject to Section 5) as of the Separation Date, payable in accordance with the applicable Company policy, plan, or program, and (ii) subject to the terms and conditions set forth in Sections 5 and 6, the payments and benefits set forth in Sections 5 and 6. The Executive’s eligibility to participate in the Company’s employee benefit plans generally available to senior employees of the Company, including without limitation health care plans, shall terminate as of the Separation Date, subject to any applicable rights pursuant to COBRA.	

b.	Separation	

i.	Death or Disability . In the event of the death or total disability of the Executive (as defined under the Aon Long Term Disability Plan or its successor plan), or in the event that the Executive becomes otherwise disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of the Executive’s duties and responsibilities for one hundred eighty (180) consecutive calendar days, in each case occurring:	

(1)	Prior to July 1, 2017, then the Executive (or her beneficiary per Section 9(b) below) shall receive unpaid Agreement Payments (as defined below), but with each Agreement Payment discounted by 20%, and with each such Agreement Payment paid on the date that it would have been paid had the Executive not died or become disabled; or	

		
(2)	On or after July 1, 2017 and until the Separation Date, then the Executive (or her beneficiary per Section 9(b) below) shall receive unpaid Agreement Payments, without discount, and paid on the date that it would have been paid had the Executive not died or become disabled.	
For purposes of this Section 4(b)(i), the term “ Agreement Payments ” shall mean all Base Salary through the Transition Period, any outstanding amounts under Sections 3(c), 3(d), or 3(e), and all payments and benefits set forth in Sections 5 and 6.

ii.	By the Executive . During the Transition Period, this Agreement and the Executive’s employment hereunder may be terminated by the Executive on no less than thirty (30) days advance notice by the Executive. The notice will specify the termination date, provided that the Company may require the Executive to leave Company premises immediately upon giving of notice. In the event of such a termination, the Company will pay Executive all accrued by unpaid Base Salary and vested benefits as of the termination date, payable in accordance with the applicable Company policy, plan, or program.	

iii.	For Cause . During the Term, the Company may terminate this Agreement for Cause, effective immediately by written notice of termination given to the Executive setting forth the basis for such termination. For the purposes of this Agreement, “ Cause ” will mean the Executive’s: (A) performing a deliberate act of dishonesty, fraud, theft, embezzlement, or misappropriation involving the Executive’s employment with the Company, or breach of the duty of loyalty to the Company; (B) performing an act of race, sex, national origin, religion, disability, or age-based discrimination, or sexual harassment, which after investigation, the Company reasonably concludes will result in material exposure to the Company’s business reputation or counsel to the Company reasonably concludes will result in material liability being imposed on the Company and/or the Executive; (C) material violation of the Company’s written policies and procedures including, but not limited to, the Aon Code of Business Conduct; (D) material non-compliance with the terms of this Agreement, including but not limited to Section 8, which is not cured within twenty (20) days after written notice (with specificity as to the noncompliance) is given to the Executive; or (E) admission or conviction of, or a plea of nolo contendere, to a felony or any crime involving moral turpitude or misrepresentation. In the event of a termination for Cause, the Company will only be required to pay or provide to the Executive all accrued but unpaid Base Salary and benefits as of the date of such termination; provided, however, that in such event the Executive will not be waiving her rights or entitlements pursuant to any employee benefit plan or program or equity plan or agreement.	

c.	Effecting Termination on the Separation Date . As of the Separation Date, the Executive agrees that the Secretary of the Company may, as an irrevocable proxy and in the Executive’s	

name and stead, execute all documents and things which the Company deems necessary and desirable to effect the Executive’s resignation as an officer or director of the Company or any of its affiliates, parent companies, or subsidiaries.

d.	Obligations Upon Separation . Upon the Separation Date, the obligations of the parties under this Agreement and the Prior Agreement will cease, except as otherwise explicitly set forth in this Agreement. The Executive will continue to be indemnified and held harmless to the maximum extent provided under the Company’s charter, by-laws and applicable law for her acts and omissions to act through the Separation Date, which indemnification shall survive her termination of employment. Executive will continue to be insured under policies of directors and officers liability insurance to the fullest extent provided for former officers or directors under the applicable policy(ies); provided, such insurance coverage may be terminated if Aon terminates coverage generally for all officers and directors. Nothing in this Agreement or its Exhibits waives the Executive’s right to make any claim under any director and officer liability insurance coverage provided by the Company for acts or omissions by Executive while an executive officer of the Company or any affiliate.	

e.	Copy of Restrictive Covenants . The Executive agrees that, prior to the commencement of any new employment in the insurance brokerage, reinsurance brokerage or human capital consulting business, the Executive will furnish the prospective new employer with a complete and accurate copy of the text of the restrictive covenant obligation the Executive has to Aon (the “ Restrictive Covenant Text ”) under Section 8 of this Agreement. The Executive also agrees that the Company may advise any prospective new employer of the existence and terms of such restrictive covenants and furnish the prospective new employer with a copy of the Restrictive Covenant Text.	

5.	Separation Payments . Contingent upon the Executive’s (a) continued employment with the Company through the Separation Date, (b) continued compliance with the provisions of Section 8 herein, and (c) execution and return (and non-revocation) of a general release of claims agreement in the form attached hereto as Exhibit A (the “ Release ”) within 21 calendar days after receiving such agreement (but not before the Separation Date), the Executive shall be eligible to receive, in addition to the other benefits and consideration conferred upon her by virtue of this Agreement, the following payments and benefits in exchange for her remaining employed during the Transition Period, agreeing to the restrictive covenants in Section 8, and agreeing to the other terms and conditions in this Agreement (the “ Separation Payments ”):	

a.	A cash payment in the amount of $3,000,000 in recognition of exemplary leadership and contributions during 2017, payable as follows: (i) $2,200,000 no earlier than January 1, 2018 and no later than February 28, 2018; and (ii) $800,000 payable on July 1, 2018; and	

b.	A discretionary cash payment in an amount up to $3,000,000, payable no earlier than January 1, 2018 and no later than March 15, 2018. The actual amount will be determined by the Company’s CEO through a qualitative, holistic assessment of Executive’s overall performance, including, without limitation, consideration of facts such as:	

		
i.	The retention by the Company and by Tempo (as defined below) of designated “white glove” clients at 2017 year-over-year recurring revenue, considering pre-deal book of business retention rate;	

ii.	The overall success of the Company’s Tempo divestiture; and	

iii.	Effective transition of Aon Hewitt to Aon target model.	
For purposes of this Section 5(b), the term “ Tempo ” shall mean the business to be formed by the buyer in connection with Aon’s sale of its benefits administration and HR BPO platform, and any successor to that business.

6.	Equity Awards . The Executive’s equity awards issued under the Aon plc Amended and Restated 2011 Incentive Plan in connection with the Leadership Performance Program (“ LPP ”) for the 2014-2016 performance cycle (“ LPP9 ”), the 2015-2017 performance cycle (“ LPP10 ”), and the 2015-2018 performance cycle (“ LPP11 ”) will continue to be governed by the terms and conditions of the applicable plan documents. Notwithstanding the foregoing provisions of this Section 6 and anything to the contrary contained in the LPP10 or LPP11 plan documents, and contingent upon the Executive’s (a) continued employment with the Company through the Separation Date, (b) continued compliance with the provisions of Section 8 herein, and (c) execution and return (and non-revocation) of the Release, the Executive’s LPP10 and LPP11 awards shall be determined and paid as though the Executive had continued employment with the Company through the payment date. The Executive’s Incentive Stock Plan (“ ISP ”) awards for 2014, 2015 and 2016 will continue to be governed by the terms and conditions of the applicable plan documents.	

7.	Acknowledgments . The Executive understands and agrees that she would not otherwise be eligible for, or entitled to, any of the payments or other benefits set forth in this Agreement if she did not enter into this Agreement. Further, by signing this Agreement, the Executive agrees that she is not entitled to any additional payments and/or benefits that are not specifically listed in this Agreement including, but not limited to, any benefits under the Prior Agreement, any benefits under any tax equalization policy, and/or any applicable Aon bonus or incentive plan, except for those payments or benefits in which she has a vested right pursuant to the terms of the applicable plans or agreements, and applicable law.	

8.	Restrictive Covenants .	

a.	General . The Executive acknowledges that in the course of her employment with the Company and any predecessor or affiliated company, the Executive has become familiar with trade secret and other confidential information concerning the Company and their subsidiaries (collectively “ Aon ”). The Executive further acknowledges and agrees that her services as a senior executive of the Company have been, and are, of special, unique, and extraordinary value to the Company and its affiliates.	

		
b.	Noncompetition .	

i.	The Executive agrees that for a period of two years after the Separation Date (the “ Noncompetition Period ”) the Executive will not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership or as an officer director, stockholder, investor or employee of or consultant to any other corporation or enterprise or otherwise, (x) engage or be engaged, or assist any other person, firm, corporation or enterprise in engaging or being engaged, in the business of insurance brokerage, reinsurance brokerage, employee benefits brokerage and benefits and human resources consulting and administration and cloud-based human resources solutions or deployment (the “ Specified Business ”) provided that such Specified Business represents, or is reasonably expected to represent, the greater of $400 million dollars or at least 55% of the business’ annual gross revenue, respectively, in the fiscal year prior to the Executive becoming affiliated with such entity or in the fiscal year of such affiliation (the “ Limits ”) or (y) provide services to (A) a Listed Major Competitor (as defined below), or a successor in interest to all or substantially all of the assets of a Listed Major Competitor, within a business unit or division that engages in a Specified Business or would be a Specified Business if the definition of “ Specified Business ” included human resources business process outsourcing services or (B) any business (or any entity owning such business) which is spun-off or otherwise disposed of by a Listed Major competitor if (I) such spun-off or otherwise disposed business is a Specified Business or would be a Specified Business if the definition of “Specified Business” included human resources business process outsourcing services and (II) the Limits are satisfied, with the Limits being calculated based only on the spun-off or otherwise disposed business. Service to a business unit or division of a Listed Major Competitor that is not a business unit or division described in (A) above shall not be a violation of this Section 8(b). This restriction will apply in any geographic area in which the Company or any of its subsidiaries is then conducting such business.	

ii.	Without limiting the generality of the foregoing prohibition, the following businesses are the “ Listed Major Competitors ”: Marsh & McLennan Companies, Inc.; Willis Group Holdings Limited; Towers Watson & Co.; the Hay Group; Xerox Corporation; Fidelity Investments; Accenture pic; International Business Machines Corporation; and any entity that satisfies the criteria in the following sentence. A Listed Major Competitor shall also include any entity that is involved in human resources business process outsourcing services (x) in which more than 50% of the voting power to elect directors is owned by private equity funds, directly or indirectly, and (y) that has indicated (by words or actions) that its intent is to become a significant competitor to the Company with respect to human resources business process outsourcing services generally.	

		
iii.	For purposes of this Section 8(b): (x) “benefits and human resources administration” means providing recordkeeping services to and for retirement plans and health and other welfare benefit plans and designing, implementing and maintaining health care exchanges for retiree and active populations under health and other welfare benefit plans, whether independent or as part of a health insurance provider service (e.g., Aetna, Blue Cross Blue Shield, etc.) or health care provider (e.g., Kaiser or UPMC); (y) “benefits and human resources consulting” means providing consulting or actuarial services to clients in their capacity as employers and/or sponsors of retirement plans and health and other welfare plans, including investment consulting and delegated investment consulting for retirement plans and pension risk transfer advice and execution, but shall not include management consulting services; and (z) neither payroll services nor outsourcing services (other than the aforesaid recordkeeping or consulting to employers and/or sponsors as to selection of vendors) shall be within the meaning of “benefits and human resources consulting and administration.”	

iv.	Furthermore, in calculating the Limits, any entity’s revenues from subsegments of a segment of the Company that represents less than 10% of the revenues of Aon Hewitt in the fiscal year prior to the termination of the Executive’s employment with the Company shall not be considered as revenues of the Specified Businesses.	

c.	Nonsolicitation . The Executive further agrees that during the Noncompetition Period the Executive will not in any manner, directly or indirectly, induce or attempt to induce any employee of Aon to terminate or abandon his or her employment with Aon for any purpose whatsoever.	

d.	Exceptions . Nothing in this Section 8 will prohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investment company or (ii) a passive owner of note more than two percent of the outstanding stock of any class of a corporation, any securities of which are publicly traded, so long as the Executive has no active participation in the business of such corporation.	

e.	Trade Secrets and Confidential Information . The Executive acknowledges that Aon’s business depends to a significant degree upon the possession of confidential, proprietary and trade secret information which is not generally known to others, and that the profitability of the business of Aon requires that this information remain proprietary to Aon.	
The Executive will not, except as required in the course of employment by the Company, disclose or use during or subsequent to the course of employment, any trade secrets or confidential or proprietary information relating to the business of Aon of which the Executive becomes aware by reason of being employed by the Company or to which the Executive gains access during her employment by the Company and which has not been publicly disclosed (other than by the Executive in breach of this provision). Such information includes client and customer lists, data, records, computer programs, manuals, processes, methods

and intangible rights which are either developed by the Executive during the course of employment or to which the Executive has access. All records and equipment and other materials relating in any way to any confidential information relating to clients or to the business of Aon will be and remain the sole property of Aon during and after the end of employment. Notwithstanding the foregoing, the Executive may comply with legal process or governmental inquiry after, to the extent legally permitted, giving Aon written notice of record thereof.

f.	Inventions . The Executive hereby assigns to the Company her entire right, title and interest in and to all discoveries and improvements, patentable or otherwise, trade secrets and ideas writings and copyrightable material, which may be conceived by the Executive or developed or acquired by the Executive during the Term of Employment, which may pertain directly or indirectly to the business of Aon. The Executive agrees to disclose fully all such developments to the Company upon its request, which disclosure will be made in writing promptly following any such request. The Executive will, upon the Company’s request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to enable Aon to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks, and copyrights in all countries.	

g.	Reformation . If, at any time of enforcement of this Section 8, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope, or geographical area reasonable under such circumstances will be substituted for the stated period, scope or area and that the court will be allowed to revise the restrictions contained herein to cover the maximum period, scope, and area permitted by law. This Agreement will not authorize a court to increase or broaden any of the restrictions of this Section 8.	

h.	Consideration; Breach . The Company and the Executive agree that the payments to be made by the Company to the Executive pursuant to Sections 3 and 5 hereof will be made and provided expressly in consideration of the Executive’s agreements contained in, and continued compliance with, this Section 8. In the event that the Company determines that the Executive has committed a material breach of any provision of Section 8 hereof, on written notice to the Executive setting forth the basis for such determination, the Company will be entitled immediately to terminate making all remaining payments and providing all remaining benefits pursuant to Sections 3 and 5 hereof and upon such termination the Company will have no further liability to the Executive under this Agreement; provided, however, that if a court of law determines that no such material breach occurred, the Company will be obligated to make such payments in a timely manner.	

i.	Company’s Right to Injunctive Relief . The Executive acknowledges that the Executive’s services to the Company are of a unique character which gives them a special value to the Company, the loss of which cannot reasonably or adequately be compensated in damages in an action at law, and that a breach of Section 8 of this Agreement will result in irreparable and continuing harm to the Company and that therefore, in addition to any other remedy	

which the Company may have at law or in equity, the Company will be entitled to injunctive relief for a breach of this Agreement by the Executive.

j.	Return of Property . Upon the Separation Date or upon the Company’s request (whichever is earlier), the Executive will promptly return to the Company all materials and all copies or tangible embodiments of materials involving any confidential information in the Executive’s possession or control, except as otherwise provided by law or in Section 12 below. Notwithstanding the foregoing, and contingent upon satisfying the Company’s security protocols, Executive will be permitted to retain Company-provided laptop and mobile phone after the Separation Date.	

9.	Mergers and Consolidations; Assignability .	

a.	The rights and obligations under this Agreement will inure to the benefit of and be binding upon the Company and its successors and assigns. This Agreement will not be assignable by the Executive, but in the event of the Executive’s death it will be binding upon and inure to the benefit of the Executive’s beneficiary (per Section 9(b) below) and legal representatives to the extent required to effectuate its terms.	

b.	With the exception of compensation in respect of Equity Awards referenced in Section 6, which will continue to be governed by the respective Plan documents, the Executive may name a beneficiary or beneficiaries to receive any Agreement Payments following the Executive’s death by giving the Company written notice thereof. In the event there is no such named beneficiary, or no surviving named beneficiary, such compensation and benefits shall be paid to the Executive’s surviving spouse, or, if none, to the Executive’s estate.	

10.	Release .	

a.	For and in consideration of the payments and benefits provided, or to be provided, to the Executive under this Agreement, the Executive, and anyone claiming through her or on her behalf, hereby waives and releases the Released Parties (as defined below) with respect to any and all claims, whether currently known or unknown, that the Executive now has or ever has had against a Released Party arising from or related to any act, omission, or thing occurring or existing at any time prior to or on the date on which the Executive signs this Agreement. “ Released Parties ” include (A) the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, affiliates, and other related entities, (B) each of the foregoing entities’ and persons’ past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, members, associates, agents, executives, employees, and attorneys, and (C) the predecessors, successors and assigns of each of the foregoing persons and entities. Without limiting the generality of the foregoing, the claims waived and released by the Executive hereunder include, but are not limited to:	

i.	All claims arising out of or related in any way to her employment, compensation, other terms and conditions of employment, or termination from employment, including, without limitation, claims with respect to any advance notice of	

termination and claims arising out of the Prior Agreements or any other employment agreements, change in control agreements, bonus plans, incentive plans or awards, severance plans or policies, stock plans or policies, relocation letters or any other employee benefit plans;

ii.	All claims that were or could have been asserted by the Executive or on her behalf: (A) in any federal, state, or local court, commission, or agency; or (B) under any common law theory (including without limitation all claims for breach of contract (oral, written or implied), wrongful termination, defamation, invasion of privacy, infliction of emotional distress, tortious interference, fraud, estoppel, unjust enrichment, and any other contract, tort or other common law claim of any kind); and	

iii.	All claims that were or could have been asserted by the Executive or on her behalf under: (A) the Age Discrimination in Employment Act (the “ ADEA ”) and the Older Worker Benefit Protection Act (the “ OWBPA ”); and (B) any other federal, state, local, employment, services or other law, regulation, ordinance, constitutional provision, executive order or other source of law, including without limitation under any of the following laws, as amended from time to time: Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981 & 1981a, the Americans with Disabilities Act, the Equal Pay Act, Executive Retirement Income Security Act, the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act and all applicable state, county or other local fair employment laws.	

b.	Exceptions . Notwithstanding the foregoing, the releases and waivers in this Agreement shall not apply to any claim for unemployment or workers’ compensation, any claim for vested benefits under any employee benefit plan, any claim that by law is non-waivable, any claim as a stockholder of Aon plc, or any claim to rights pursuant to this Agreement (including, without limitation, the last sentence of Section 4(d), Section 5, Section 6, and the last sentence of Section 7).	

c.	No Further Obligations; Additional Representations . In the event of any further proceedings based upon any released matter, Aon shall have no further monetary or other obligation of any kind to the Executive, and the Executive hereby waives any such monetary or other recovery (provided that nothing limits the Executive’s rights under Section 12 below). The Executive represents and warrants that: (i) there has not been filed by the Executive or on the Executive’s behalf any legal or other proceedings against any of the Released Parties (provided, however, that the Executive need not disclose to the Company, and the foregoing representation and warranty in this subpart (c) does not apply to, conduct or matters described in Section 12 below); (ii) the Executive is the sole owner of the claims that are released in this Section 10; (iii) none of these claims has been transferred or assigned or caused to be transferred or assigned to any other person, firm or other legal entity; and (iv) the Executive	

has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement.

d.	Specific Rights Under OWBPA . They Executive understands and agrees that: (i) this is the full and final release of all claims against the Company and the other Released Parties through the date she signs this Agreement; (ii) the Executive knowingly and voluntarily releases claims hereunder for valuable consideration; (iii) the Executive hereby is and has been advised of her right to have her attorney review this Agreement before signing it; (iv) the Executive has twenty-one (21) days to consider whether to sign this Agreement; and (v) the Executive may, at her sole option, revoke this Agreement upon written notice within seven (7) days after signing it. This Agreement will not become effective until this seven (7) day period has expired and will be void if she revokes it within such period. Although the Executive is releasing claims that she may have under the ADEA and the OWBPA, she understands that she may challenge the knowing and voluntary nature of this Agreement under the OWBPA and the ADEA before a court, the EEOC, the NLRB, or any other federal state or local agency charged with the enforcement of any employment laws.	

11.	Future Conduct . The Executive agrees that she shall refrain from, and the Company agrees that it shall use reasonable efforts to refrain from, all conduct, verbal or otherwise, that disparages or damages the reputation, goodwill, or standing in the community of the other such party or, with respect to the Executive’s conduct any of the other Released Parties, provided that nothing herein shall prohibit the Executive from exercising her rights detailed in Section 12 or prohibit either party from giving truthful testimony or evidence to a governmental entity, or if properly subpoenaed or otherwise required to do so under applicable law. The Executive agrees that she has no present or future right to employment with the Company or any of the other Released Parties. Subject to and except as otherwise provided in Section 12 of this Agreement the Executive shall cooperate fully with the Company and the other Released Parties in transitioning her responsibilities as requested by the Company.	
The Executive agrees, subject to the advice of legal counsel, to voluntarily make herself reasonably available to the Company and its legal counsel, at the Company’s request, without the necessity of obtaining a subpoena or court order, in the Company’s investigation, preparation, prosecution and/or defense of any actual or potential legal proceeding, regulatory action, or internal matter. Subject to the advice of legal counsel, the Executive agrees to provide any information reasonably within the Executive’s recollection. If the Executive is required to devote more than one business day per quarter to fulfilling her obligations under this provision, then the Company shall pay her a per diem fee for any partial or full days in excess of one day per quarter spent providing services under this provision, at a per diem rate based on the annual rate of compensation in effect for the Executive at the time the Executive’s employment terminated. Payment or reimbursement of the Executive’s expenses will be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement, or in-kind benefits provided, in any year will not affect the amount of such expenses eligible for payment or reimbursement, or in-kind benefits to be provided, in any other

year. Additionally, any right to expense reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit.

12.	Protected Rights . Nothing in this Agreement is intended to limit in any way the Executive’s right or ability to report possible violations of law or regulation to, or file a charge or complaint with, the U.S. Securities and Exchange Commission, the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, or other federal, state or local agencies or commissions (collectively, “ Government Agencies ”). The Executive further understands that nothing in this Agreement limits the Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agencies, including providing documents or other information, without notice to the Company. Nothing in this Agreement shall limit the Executive’s ability to disclose in confidence trade secrets to Government Agencies, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law or to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure. This Agreement does not limit the Executive’s ability to receive an award from a Government Agency for information provided by the Executive to such Government Agency.	

13.	Miscellaneous .	

a.	Integration; Amendment; Counterparts . Except as is otherwise provided herein, this Agreement contains all of the terms and conditions agreed upon by the parties relating to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements, negotiations, correspondence, undertakings and communications of the parties, whether oral or written, respecting the subject matter of this Agreement; provided , however , that the parties specifically acknowledge that the Change in Control Agreement between the parties, dated February 24, 2015, is not superseded by this Agreement. This Agreement may not be amended, altered, or modified without the prior written consent of both parties and such instrument must acknowledge that it is an amendment or modification of this Agreement. This Agreement may be executed in two counterparts, each of which will be deemed an original and both of which together will constitute one and the same instrument. Any signature delivered via .pdf file shall be the same as an original signature.	

b.	Waiver . Waiver of any term or condition of this Agreement by any party will not be construed as a waiver of a subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement. Any waiver must be in writing.	

c.	Captions . The captions in this Agreement are not part of its provisions, are merely for reference and have no force or effect. If any caption is inconsistent with any provision of this Agreement, such provision will govern.	

d.	Governing Law . The validity, interpretation, construction, performance, enforcement and remedies of, or relating to, this Agreement, and the rights and obligations of the parties hereunder, will be governed by and construed in accordance with the substantive laws of	

the State of Illinois, without regard to the conflict of law principles, rules or statutes of any jurisdiction. The parties hereby irrevocably consent to, and agree not to object or assert any defense or challenge to, the jurisdiction and venue of the federal and state courts located in Chicago, Illinois, and agree that any claim which may be brought in a court of law or equity may be brought in any such Chicago, Illinois court.

e.	Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held by a court of competent jurisdiction to be prohibited or unenforceable for any reason, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.	

f.	Notice . All notices given hereunder will be in writing and will be sent by registered or certified mail or delivered by hand and, if intended for the Company, will be addressed to it or delivered to it at its principal office for the attention of the Chief Human Resources Officer of the Company. If intended for the Executive, notices will be delivered personally or will be addressed (if sent by mail) to the Executive’s then current residence address as shown on the Company’s records, or to such other address as the Executive directs in a notice to the Company. All notices will be deemed to be given on the date received at the address of the addressee or, if delivered personally, on the date delivered.	

g.	Code Section 409A . The parties intend that this Agreement and the benefits provided hereunder be interpreted and construed to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and all regulatory and interpretative guidance issued thereunder (“ Code Section 409A ”) to the extent applicable thereto. The time and form of payment of incentive compensation, disability benefits, severance payments, expense reimbursements and payments of in-kind benefits described herein will be made in accordance with the applicable sections of this Agreement, provided that with respect to termination of employment for reasons other than death, the payment at such time can be characterized as a “short-term deferral” for purposes of Code Section 409A or as otherwise exempt from the provisions of Code Section 409A, or if any portion of the payment cannot be so characterized, and the Executive is a “specified employee” under Code Section 409A, such portion of the payment will be delayed until the earlier to occur of the Executive’s death or the date that is six months and one day following the Executive’s termination of employment (the “ Delay Period ”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this section will be paid or reimbursed to the Executive in a lump sum, and any remaining payments due under this Agreement will be payable at the same time and in the same form as such amounts would have been paid. Further, if the Executive is a “specified employee” and if any equity-based awards granted to the Executive by the Company, pursuant to this Agreement or otherwise, continue to vest upon the Executive’s termination of employment, and are deemed a “deferral of compensation” (as such term is described under Code Section 409A), the equity-based awards will not be settled or released until the expiration of the Delay Period. For purposes of applying the provisions of Code Section 409A, each separately identifiable amount to which the Executive is entitled will be treated	

as a separate payment. The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Agreement, including but not limited to any restricted stock unit or other equity-based award, payment or amount that provides for the “deferral of compensation” (as such term is described under Code Section 409A), may not be accelerated except as otherwise permitted under Code Section 409A and the guidance and Treasury regulations issued thereunder.
All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Code Section 409A, including, where applicable, the requirement that (A) any reimbursement is for expenses actually incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (B) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (C) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (D) the right to reimbursement is not subject to liquidation or exchange for another benefit.
For purposes of this Agreement, the terms “retirement,” “termination of employment,” “terminated,” “termination,” “this Agreement will be terminated” and variations thereof, as used in this Agreement, are intended to mean a termination of employment that constitutes a “separation from service” under Code Section 409A.
If the sixty (60)-day period following a “separation from service” begins in one calendar year and ends in a second calendar year (a “ Crossover 60-Day Period ”) and if there are payments due the Executive that are subject to Code Section 409A (and not exempt from Code Section 409A) that are: (i) conditioned on the Executive signing and not revoking a release of claims and (ii) otherwise due to be paid during the portion of the Crossover 60-Day Period that falls within the first year, then such payments will be delayed and paid in a lump sum during the portion of the Crossover 60-Day Period that falls within the second year.
Although the Company intends to administer the Agreement so that it will comply with the requirements of Code Section 409A, the Company does not represent or warrant that the Agreement will comply with Code Section 409A or any other provision of federal, state, local, or non-United States law. Neither the Company, its subsidiaries, nor their respective directors, officers, Executives or advisers will be liable to the Executive (or any other individual claiming a benefit through the Executive) for any tax, interest, or penalties the Executive may owe as a result of compensation paid under the Agreement, and the Company and its subsidiaries will have no obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes pursuant to Code Section 409A.
The provisions of this Agreement will be construed in a manner in favor of complying with any applicable requirements of Code Section 409A to avoid taxation under Code Section 409A. If any compensation or benefits provided by this Agreement result in the application

of Code Section 409A, the Company will modify this Agreement in the least restrictive manner necessary in order to comply with the provisions of Code Section 409A, other applicable provisions of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions and, in each case, without material diminution in the value of the payments or benefits to the Executive.

IN WITNESS WHEREOF , the parties hereto have executed this Agreement and intend to be bound by its terms.

		
 	AON CORPORATION
By:       
Printed Name:    
Its:       
Date:    	

I have read the above Agreement and understand and agree to be bound by its terms.

		

 Kristi Savacool
Date:    	

EXHIBIT A
GENERAL RELEASE OF CLAIMS
This General Release of Claims Agreement (this “Release”) is entered into by and between Aon Corporation, a Delaware corporation (the “Company”), and Kristi Savacool (the “Executive”).
WHEREAS, the Company and the Executive previously entered into a Transition and Separation Agreement executed by the Executive on April 25, 2017 (the “Agreement”); and
WHEREAS, Sections 5 and 6 of the Agreement provide that certain payments and benefits are to be paid or provided to the Executive in exchange for, and contingent upon, among other things, the Executive’s execution (and non-revocation) of this Release as set forth in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in the Agreement and herein and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows:

1.	Release . The Executive, and anyone claiming through her or on her behalf, hereby waives and releases the Released Parties (as defined below) with respect to any and all claims, whether currently known or unknown, that the Executive now has or ever has had against a Released Party arising from or related to any act, omission, or thing occurring or existing at any time prior to or on the date on which the Executive signs this Release. “Released Parties” include (A) the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, affiliates, and other related entities, (B) each of the foregoing entities’ and persons’ past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, members, associates, agents, executives, employees, and attorneys, and (C) the predecessors, successors and assigns of each of the foregoing persons and entities. Without limiting the generality of the foregoing, the claims waived and released by the Executive hereunder include, but are not limited to:	

a.	All claims arising out of or related in any way to her employment, compensation, other terms and conditions of employment, or termination from employment, including, without limitation, claims arising out of any employment agreements, change in control agreements, bonus plans, incentive plans or awards, severance plans or policies, stock plans or policies, relocation letters or any other employee benefit plans; and	

b.	All claims that were or could have been asserted by the Executive or on her behalf: (i) in any federal, state, or local court, commission, or agency; or (ii) under any common law theory (including without limitation all claims for breach of contract (oral, written or implied), wrongful termination, defamation, invasion of privacy, infliction of emotional distress, tortious interference, fraud, estoppel, unjust enrichment, and any other contract, tort or other common law claim of any kind); and	

c.	All claims that were or could have been asserted by the Executive or on her behalf under: (i) the Age Discrimination in Employment Act (the “ADEA”) and the Older Worker Benefit	

Protection Act (the “OWBPA”); and (ii) any other federal, state, local, employment, services or other law, regulation, ordinance, constitutional provision, executive order or other source of law, including without limitation under any of the following laws, as amended from time to time: Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981 & 1981a, the Americans with Disabilities Act, the Equal Pay Act, Employee Retirement Income Security Act, the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act and all applicable state, county or other local fair employment laws.

2.	Exceptions . Notwithstanding the foregoing, the releases and waivers in this Release shall not apply to any claim: (A) for unemployment or workers’ compensation, (B) for vested benefits under any employee benefit plan, (C) that by law is non-waivable, (D) for payments or benefits under Section 5, 6, or 7 of the Agreement, (E) as a stockholder of Aon plc, or (F) for indemnification pursuant to Section 4(d) of the Agreement or applicable law and for coverage as an insured under directors and officers liability insurance.	

3.	No Further Obligations; Additional Representations . In the event of any further proceedings based upon any released matter, the Company, its affiliates, parent companies, and subsidiaries (collectively, “Aon”) shall have no further monetary or other obligation of any kind to the Executive, and the Executive hereby waives any such monetary or other recovery (provided that nothing limits the Executive’s rights under Section 5 below). The Executive represents and warrants that: (A) there has not been filed by the Executive or on the Executive’s behalf any legal or other proceedings against any of the Released Parties (provided, however, that the Executive need not disclose to the Company, and the foregoing representation and warranty in this subpart (A) does not apply to, conduct or matters described in Section 5 below); (B) the Executive is the sole owner of the claims that are released in Section 1 above; (C) none of these claims has been transferred or assigned or caused to be transferred or assigned to any other person, firm or other legal entity; and (D) the Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Release.	

4.	Specific Rights Under OWBPA . The Executive understands and agrees that: (A) this is the full and final release of all claims against Aon through the date she signs this Release; (B) the Executive knowingly and voluntarily releases claims hereunder for valuable consideration; (C) the Executive hereby is and has been advised of her right to have her attorney review this Release before signing it; (D) the Executive has twenty-one (21) days to consider whether to sign this Release; and (E) the Executive may, at her sole option, revoke this Release upon written notice within seven (7) days after signing it. This Release will not become effective until this seven (7) day period has expired and will be void if she revokes it within such period. Although the Executive is releasing claims that she may have under the ADEA and the OWBPA, she understands that she may challenge the knowing and voluntary nature of this Release under the OWBPA and the ADEA before a court, the EEOC, the NLRB, or any other federal state or local agency charged with the enforcement of any employment laws.	

		
5.	Protected Rights . Nothing in this Release is intended to limit in any way the Executive’s right or ability to report possible violations of law or regulation to, or file a charge or complaint with, the U.S. Securities and Exchange Commission, the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, or other federal, state or local agencies or commissions (collectively, “Government Agencies”). The Executive further understands that nothing in this Release limits the Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Release does not limit the Executive’s ability to receive an award from a Government Agency for information provided by the Executive to such Government Agency.	
IN WITNESS WHEREOF , the parties hereto have executed this Release and intend to be bound by its terms.

		
 	AON CORPORATION
By:       
Printed Name:    
Its:       
Date:    	

I have read the above Release and understand and agree to be bound by its terms.

		

 Kristi Savacool
Date:      	

EXHIBIT 10.3

AMENDMENT NO. 1 TO THE
CREDIT AGREEMENT
Dated as of June 21, 2017
AMENDMENT NO. 1 TO THE CREDIT AGREEMENT among AON PLC, a public limited company organized under the laws of England and Wales (the “ Parent ”), AON CORPORATION, a Delaware corporation (“ Aon Corporation ”), AON UK LIMITED, a private limited company organized under the laws of England and Wales (“ Aon UK ”, and together with the Parent and Aon corporation, the “ Borrowers ”), the banks, financial institutions and other institutional lenders parties to the Credit Agreement referred to below (collectively, the “ Lenders ”) and CITIBANK, N.A., as administrative agent (the “ Administrative Agent ”) for the Lenders.
PRELIMINARY STATEMENTS:
1.    The Borrowers, the Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of February 2, 2015 (the “Credit Agreement”); and
2.    The Borrowers have requested that the Lenders amend certain provisions of the Credit Agreement, and the Lenders whose signatures appear below, constituting at least the Required Lenders, are willing to amend the Credit Agreement on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Defined Terms.  Capitalized terms used but not otherwise defined herein (including in the recitals hereto) have the meanings assigned to them in the Credit Agreement.
SECTION 2.      Amendments to the Credit Agreement.  (%2) Section 1.1 of the Credit Agreement is hereby amended as follows:
(i)      The definition of “Alternate Base Rate” is hereby amended by adding to the end of clause (c) thereof the following proviso:
provided, that if the rate referenced in this clause (c) is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
(ii)      The first paragraph of the definition of “Consolidated Adjusted EBITDA” is hereby amended and restated in its entirety to read as follows:
“ Consolidated Adjusted EBITDA ” means, for any Measurement Period, Consolidated Net Income for such period plus, to the extent deducted from revenues

NYDOCS02/1124025.2A

in determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv) amortization, (v) extraordinary losses, (vi) the non-cash portion of pension expense, (vii) restructuring related cash and non-cash fees, charges and expenses paid or incurred by the Parent or any Subsidiary (including employee termination costs, technology realization costs, real estate consolidation costs, asset impairments) in connection with the “Restructuring Plan” described in the Quarterly Report on From 10-Q filed by the Parent with the SEC for the quarterly period ended on March 31, 2017 and (viii) acquisition related cash and non-cash fees, charges and expenses paid or incurred by the Parent or any Subsidiary (including costs of issuance or repayment of debt, issuance of equity interests, refinancing transactions, modification or amendment of any debt instrument or restructuring expenses, charges or reserves) (including any transaction undertaken but not completed), in an aggregate amount not to exceed $75,000,000 for the period from the Effective Date through the latest Facility Termination Date, minus, to the extent included in Consolidated Net Income, extraordinary gains, all calculated, for the Consolidated Group, in each case on a consolidated basis; provided that, notwithstanding the foregoing provisions of this definition, no amounts shall be added pursuant to clauses (i) through (viii) for any losses, costs, expenses or other charges resulting from the settlement of any Disclosed Claims or any payments in respect of any judgments or other orders thereon or any restructuring or other charges in connection therewith or relating thereto.
(iii)      The definition of “Federal Funds Effective Rate” is hereby amended by (i) deleting the phrase “arranged by Federal funds brokers” and (ii) adding to the end thereof the following proviso:
provided, that if the Federal Funds Effective Rate is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
(iv)      The following new defined terms are hereby inserted in the appropriate alphabetical order:
“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“ EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a

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NYDOCS02/1124025.2A

subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“ EEA Resolution Authority ” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

(b)	A new Section 9.14 is added to read as follows:	
9.14. Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in this Agreement, any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under this Agreement or any other Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)    the effects of any Bail-In Action on any such liability, including, if applicable:
(i)      a reduction in full or in part or cancellation of any such liability;
(ii)      a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will

3    
NYDOCS02/1124025.2A

be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any Note; or
(iii)      the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
SECTION 1.      Representations and Warranties.  The Borrowers hereby represent and warrant to the Administrative Agent and to each of the Lenders, as of the date hereof (as defined below), that:
(a)      The execution, delivery and performance by each Borrower of this Amendment have been duly authorized by all necessary corporate or other organizational and, if required, stockholder or other equityholder action. This Amendment has been duly executed and delivered by each Borrower and this Amendment and the Credit Agreement, as amended by this Amendment, constitute legal, valid and binding obligations of each Borrower, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b)      The representations and warranties contained in Article V of the Credit Agreement (other than Section 5.6 and 5.8(a) thereof) ) are true and correct (in all respects to the extent qualified by “material” or “material adverse effect” and in all material respects to the extent not so qualified), both immediately before and immediately after giving effect to this Amendment (or, to the extent that any such representation and warranty specifically refers to an earlier date, as of such earlier date).
(c)      There exists no Default or Unmatured Default and none would result from this Amendment.
SECTION 2.      Effectiveness.  This Amendment shall become effective as of the date hereof so long as the Administrative Agent shall have received duly executed counterparts hereof that, when taken together, bear the authorized signatures of the Borrowers and Lenders constituting at least the Required Lenders.
SECTION 3.      Effect of Amendment. (%2) Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrowers to a consent to, or a waiver, amendment, modification

4    
NYDOCS02/1124025.2A

or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances.
(a)      On and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each reference to the Credit Agreement in any other Loan Document shall be deemed to be a reference to the Credit Agreement as amended hereby. This Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.
SECTION 1.      Applicable Law.  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 2.      Counterparts.  This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic imaging shall be as effective as delivery of a manually executed counterpart of this Amendment.
SECTION 3.      Headings.  The Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

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NYDOCS02/1124025.2A

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the date first above written.

	
		
AON PLC,
	
by	
 	 	
 	Name:
Title:	

	
		
AON CORPORATION,
	
by	
 	 	
 	Name:
Title:	

	
		
AON UK LIMITED,
	
by	
 	 	
 	Name:
Title:	

	
		
CITIBANK, N.A., individually and as Administrative Agent,
	
by	
 	 	
 	Name:
Title:

	

6    
NYDOCS02/1124025.2A

	
		
Name of Institution:
	
by	
 	 	
 	Name:
Title:	

	
		
Name of Institution:
	
by	
 	 	
 	Name:
Title:	

7    
NYDOCS02/1124025.2A

Exhibit 12.1
Aon plc and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Fixed Charges

	
																									
 	 	Six Months Ended June 30	 	Years Ended December 31,	
(millions except ratio)	 	2017	 	2016	 	2016	 	2015	 	2014	 	2013	
Income from continuing operations before income taxes and noncontrolling interests	 	$	79		 	$	687		 	$	1,401		 	$	1,428		 	$	1,559		 	$	1,347		
Less: Equity in earnings on less than 50% owned entities	 	9		 	3		 	13		 	13		 	12		 	20		
Add back fixed charges:	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on indebtedness	 	141		 	142		 	282		 	273		 	255		 	210		
     Interest on uncertain tax positions	 	—		 	—		 	—		 	—		 	4		 	5		
     Portion of rents representative of interest factor	 	16		 	16		 	28		 	33		 	40		 	40		
          Income as adjusted	 	$	227		 	$	842		 	$	1,698		 	$	1,721		 	$	1,846		 	$	1,582		
Fixed charges:	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on indebtedness	 	$	141		 	$	142		 	$	282		 	$	273		 	$	255		 	$	210		
     Interest on uncertain tax positions	 	—		 	—		 	—		 	—		 	4		 	5		
     Portion of rents representative of interest factor	 	16		 	16		 	28		 	33		 	40		 	40		
          Total fixed charges	 	$	157		 	$	158		 	$	310		 	$	306		 	$	299		 	$	255		
Ratio of earnings to fixed charges	 	1.4		 	5.3		 	5.5		 	5.6		 	6.2			6.2		

Exhibit 31.1
CERTIFICATIONS
I, Gregory C. Case, the Chief Executive Officer of Aon plc, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Aon plc;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

			
Date:	August 4, 2017	/s/ GREGORY C. CASE	
 	 	Gregory C. Case
Chief Executive Officer	

Exhibit 31.2
CERTIFICATIONS
I, Christa Davies, the Chief Financial Officer of Aon plc, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Aon plc;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

	
			
Date:	August 4, 2017	/s/ CHRISTA DAVIES	
 	 	Christa Davies
Chief Financial Officer	

Exhibit 32.1
Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code
I, Gregory C. Case, the Chief Executive Officer of Aon plc (the “ Company ”), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2017 (the “ Report ”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		
 	/s/ GREGORY C. CASE	
 	Gregory C. Case
Chief Executive Officer	
 	August 4, 2017	

Exhibit 32.2
Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code
I, Christa Davies, the Chief Financial Officer of Aon plc (the “ Company ”), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2017 (the “ Report ”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		
 	/s/ CHRISTA DAVIES	
 	Christa Davies
Chief Financial Officer	
 	August 4, 2017