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 September 30, 2016
 
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 or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting 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)	 	 	
 
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 October 20, 2016 :  263,094,046

	

PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
 
Aon plc
Condensed Consolidated Statements of Income
(Unaudited)

	
																
 	 	Three Months Ended	Nine Months Ended	
(millions, except per share data)	 	September 30, 2016	 	September 30, 2015	September 30, 2016	 	September 30, 2015	
Revenue	 	 		 	 		 	 	 	
Commissions, fees and other	 	$	2,740		 	$	2,736		$	8,288		 	$	8,378		
Fiduciary investment income	 	6		 	6		16		 	16		
Total revenue	 	2,746		 	2,742		8,304		 	8,394		
Expenses	 	 		 	 		 	 	 	
Compensation and benefits	 	1,611		 	1,644		4,948		 	4,980		
Other general expenses	 	713		 	685		2,079		 	2,283		
Total operating expenses	 	2,324		 	2,329		7,027		 	7,263		
Operating income	 	422		 	413		1,277		 	1,131		
Interest income	 	1		 	3		6		 	10		
Interest expense	 	(70	)	 	(72	)	(212	)	 	(205	)	
Other income	 	9		 	8		27		 	51		
Income before income taxes	 	362		 	352		1,098		 	987		
Income taxes	 	48		 	49		177		 	155		
Net income	 	314		 	303		921		 	832		
Less: Net income attributable to noncontrolling interests	 	7		 	8		27		 	31		
Net income attributable to Aon shareholders	 	$	307		 	$	295		$	894		 	$	801		
 	 	 	 	 	 	 	 	
Basic net income per share attributable to Aon shareholders	 	$	1.15		 	$	1.05		$	3.32		 	$	2.83		
Diluted net income per share attributable to Aon shareholders	 	$	1.14		 	$	1.04		$	3.30		 	$	2.80		
Cash dividends per share paid on ordinary shares	 	$	0.33		 	$	0.30		$	0.96		 	$	0.85		
Weighted average ordinary shares outstanding - basic	 	267.5		 	280.9		269.1		 	283.2		
Weighted average ordinary shares outstanding - diluted	 	269.6		 	283.8		271.0		 	285.9		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

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Aon plc
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)

	
																
 	 	Three Months Ended	Nine Months Ended	
(millions)	 	September 30, 2016	 	September 30, 2015	September 30, 2016	 	September 30, 2015	
Net income	 	$	314		 	$	303		$	921		 	$	832		
Less: Net income attributable to noncontrolling interests	 	7		 	8		27		 	31		
Net income attributable to Aon shareholders	 	307		 	295		894		 	801		
Other comprehensive (loss) income, net of tax:	 	 		 	 		 		 	 		
Change in fair value of financial instruments	 	—		 	(10	)	(11	)	 	(11	)	
Foreign currency translation adjustments	 	(89	)	 	(229	)	(227	)	 	(376	)	
Post-retirement benefit obligation	 	18		 	18		(132	)	 	62		
Total other comprehensive loss	 	(71	)	 	(221	)	(370	)	 	(325	)	
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	(4	)	—		 	(6	)	
Total other comprehensive loss attributable to Aon shareholders	 	(71	)	 	(217	)	(370	)	 	(319	)	
Comprehensive income attributable to Aon shareholders	 	$	236		 	$	78		$	524		 	$	482		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

3

Aon plc
Condensed Consolidated Statements of Financial Position

	
									
(millions, except nominal value)	 	September 30,
2016	 	December 31,
2015	
 	 	(Unaudited)	 	 	
ASSETS	 	 		 	 		
CURRENT ASSETS	 	 		 	 		
Cash and cash equivalents	 	$	483		 	$	384		
Short-term investments	 	463		 	356		
Receivables, net	 	2,391		 	2,734		
Fiduciary assets	 	8,710		 	9,932		
Other current assets	 	424		 	329		
Total Current Assets	 	12,471		 	13,735		
Goodwill	 	8,452		 	8,448		
Intangible assets, net	 	2,038		 	2,180		
Fixed assets, net	 	738		 	765		
Non-current deferred tax assets	 	278		 	234		
Prepaid pension	 	711		 	1,033		
Other non-current assets	 	564		 	592		
TOTAL ASSETS	 	$	25,252		 	$	26,987		
 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		
LIABILITIES	 	 		 	 		
CURRENT LIABILITIES	 	 		 	 		
Accounts payable and accrued liabilities	 	$	1,477		 	$	1,772		
Short-term debt and current portion of long-term debt	 	250		 	562		
Fiduciary liabilities	 	8,710		 	9,932		
Other current liabilities	 	929		 	819		
Total Current Liabilities	 	11,366		 	13,085		
Long-term debt	 	5,910		 	5,138		
Non-current deferred tax liabilities	 	36		 	37		
Pension, other post-retirement and post-employment liabilities	 	1,687		 	1,795		
Other non-current liabilities	 	759		 	769		
TOTAL LIABILITIES	 	19,758		 	20,824		
 	 	 	 	 	
EQUITY	 	 		 	 		
Ordinary shares - $0.01 nominal value
Authorized: 750 shares (issued: 2016 - 263.5; 2015 - 269.8)	 	3		 	3		
Additional paid-in capital	 	5,522		 	5,409		
Retained earnings	 	3,702		 	4,117		
Accumulated other comprehensive loss	 	(3,793	)	 	(3,423	)	
TOTAL AON SHAREHOLDERS' EQUITY	 	5,434		 	6,106		
Noncontrolling interests	 	60		 	57		
TOTAL EQUITY	 	5,494		 	6,163		
TOTAL LIABILITIES AND EQUITY	 	$	25,252		 	$	26,987		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

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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, 2015	 	269.8		 	$	5,412		 	$	4,117		 	$	(3,423	)	 	$	57		 	$	6,163		
Net income	 	—		 	—		 	894		 	—		 	27		 	921		
Shares issued - employee benefit plans	 	0.6		 	40		 	—		 	—		 	—		 	40		
Shares issued - employee compensation	 	3.5		 	(169	)	 	—		 	—		 	—		 	(169	)	
Shares purchased	 	(10.4	)	 	—		 	(1,051	)	 	—		 	—		 	(1,051	)	
Tax benefit - employee benefit plans	 	—		 	60		 	—		 	—		 	—		 	60		
Share-based compensation expense	 	—		 	228		 	—		 	—		 	—		 	228		
Dividends to shareholders	 	—		 	—		 	(258	)	 	—		 	—		 	(258	)	
Net change in fair value of financial instruments	 	—		 	—		 	—		 	(11	)	 	—		 	(11	)	
Net foreign currency translation adjustments	 	—		 	—		 	—		 	(227	)	 	—		 	(227	)	
Net post-retirement benefit obligation	 	—		 	—		 	—		 	(132	)	 	—		 	(132	)	
Purchases of shares from noncontrolling interests	 	—		 	(46	)	 	—		 	—		 	(4	)	 	(50	)	
Dividends paid to noncontrolling interests on subsidiary common stock	 	—		 	—		 	—		 	—		 	(20	)	 	(20	)	
Balance at September 30, 2016	 	263.5		 	$	5,525		 	$	3,702		 	$	(3,793	)	 	$	60		 	$	5,494		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

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Aon plc
Condensed Consolidated Statements of Cash Flows
(Unaudited)  

									
 	 	Nine Months Ended	
(millions)	 	September 30, 2016	 	September 30, 2015	
CASH FLOWS FROM OPERATING ACTIVITIES	 	 		 	 		
Net income	 	$	921		 	$	832		
Adjustments to reconcile net income to cash provided by operating activities:	 	 		 	 		
Gain from sales of businesses and investments, net	 	(41	)	 	(29	)	
Depreciation of fixed assets	 	171		 	169		
Amortization of intangible assets	 	207		 	237		
Share-based compensation expense	 	228		 	239		
Deferred income taxes	 	(7	)	 	(83	)	
Change in assets and liabilities:	 	 		 	 		
Fiduciary receivables	 	1,538		 	795		
Short-term investments — funds held on behalf of clients	 	(438	)	 	200		
Fiduciary liabilities	 	(1,100	)	 	(995	)	
Receivables, net	 	289		 	232		
Accounts payable and accrued liabilities	 	(277	)	 	(312	)	
Current income taxes	 	(29	)	 	(69	)	
Pension, other post-retirement and other post-employment liabilities	 	(70	)	 	(191	)	
Other assets and liabilities	 	83		 	270		
CASH PROVIDED BY OPERATING ACTIVITIES	 	1,475		 	1,295		
 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 		 	 		
Proceeds from investments	 	31		 	23		
Purchases of investments	 	(47	)	 	(3	)	
Net purchases of short-term investments — non-fiduciary	 	(108	)	 	(9	)	
Acquisition of businesses, net of cash acquired	 	(198	)	 	(26	)	
Proceeds from sale of businesses	 	104		 	54		
Capital expenditures	 	(153	)	 	(225	)	
CASH USED FOR INVESTING ACTIVITIES	 	(371	)	 	(186	)	
 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 		 	 		
Share repurchase	 	(1,037	)	 	(1,150	)	
Issuance of shares for employee benefit plans	 	(70	)	 	(148	)	
Issuance of debt	 	2,729		 	3,494		
Repayment of debt	 	(2,308	)	 	(2,860	)	
Cash dividends to shareholders	 	(258	)	 	(240	)	
Noncontrolling interests and other financing activities	 	(71	)	 	(26	)	
CASH USED FOR FINANCING ACTIVITIES	 	(1,015	)	 	(930	)	
 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	10		 	(155	)	
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	99		 	24		
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	 	384		 	374		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	483		 	$	398		
 	 	 	 	 	
Supplemental disclosures:	 	 		 	 		
Interest paid	 	$	196		 	$	190		
Income taxes paid, net of refunds	 	$	153		 	$	180		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

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Notes to the 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, 2015 .  The results for the three and nine months ended September 30, 2016 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2016 .
 
Reclassification

Certain amounts in prior years' Condensed Consolidated Financial Statements and related notes have been reclassified to conform to the 2016 presentation.

Upon vesting of certain share-based payment arrangements, employees may elect to use a portion of the shares to satisfy tax withholding requirements, in which case Aon makes a payment to the taxing authority on the employee’s behalf and remits the remaining shares to the employee.   Prior to the fourth quarter of 2015, the Company presented amounts due to taxing authorities within Cash Flows From Operating Activities in the Condensed Consolidated Statements of Cash Flows.  These amounts are now included in “Issuance of shares for employee benefit plans” within Cash Flows From Financing Activities.  The Company believes this presentation provides greater clarity into the operating and financing activities of the Company as the substance and accounting for these transactions is that of a share repurchase.  It also aligns the Company’s presentation to be consistent with industry practice and share-based compensation guidance issued by the Financial Accounting Standards Board (the "FASB") in March 2016.  The amount reported in Issuance of shares for employee benefit plans was $220 million for the nine months ended September 30, 2015 .  This amount, which was reclassified from Accounts payable and accrued liabilities and Other assets and liabilities, was $103 million and $117 million , respectively, for the nine months ended September 30, 2015 .

Changes to the presentation of the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 were made related to certain line items within financing activities.  In 2016, Purchases of shares from noncontrolling interests and Dividends paid to noncontrolling interests have been aggregated in a new line item titled “Noncontrolling interests and other financing activities” within financing activities. The balances held in these line items for the nine months ended September 30, 2015 were outflows of $5 million and $21 million , respectively. Additionally, Restructuring reserves have been retrospectively reclassified to Other asset and liabilities. The balance held in Restructuring reserves for the nine months ended September 30, 2015 was an outflow of $25 million .

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
 
New Accounting Pronouncements

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. Aon does not expect the adoption of this guidance to have a material impact upon the Company's Condensed Consolidated Financial Statements.
Credit Losses
In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments. The new guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted beginning in the first quarter of 2019. Aon is currently evaluating the impact that the standard will have on its Condensed Consolidated Financial Statements, as well as the method of transition and period of adoption.
Share-based Compensation

In March 2016, the 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 guidance is effective for Aon in the first quarter of 2017 and early adoption is permitted. 

Aon expects to adopt the guidance in the first quarter of 2017 and is currently evaluating the method of transition.  The Company is also finalizing its evaluation of the impact of the new guidance, specifically the changes to the accounting and presentation of excess tax benefits, which could have a significant impact on its Condensed Consolidated Financial Statements.  This includes Income tax expense in the Condensed Consolidated Statement of Income, Additional paid-in capital in the Condensed Consolidated Statements of Financial Position, and Cash Flows from Operating Activities and Cash Flows from Financing Activities in the Condensed Consolidated Statements of Cash Flows.  The impact will be driven by the Company’s share price at the time share-based payment transactions vest in future periods. Specifically, if the Company’s share price increases between the date of grant and the vesting date of an equity award, the Company will recognize an income tax benefit, which will lower the effective tax rate. If the Company’s share price decreases between the date of grant and the vesting date, the Company will recognize an income tax provision, which will increase the effective tax rate. The Company does not expect other elements of the guidance to have a material impact on its Condensed Consolidated Financial Statements.

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

8

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 application permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Aon is currently evaluating the impact the standard will have on its Condensed Consolidated Financial Statements, as well as the method of transition and period of adoption.
Financial Assets and Liabilities

In January 2016, the FASB issued new accounting guidance on recognition and measurement of financial assets and financial liabilities. The amendments in the new guidance make targeted improvements, which include the requirement to measure equity investments with readily determinable fair values at fair value through net income, simplification of the impairment assessment for equity investments without readily determinable fair values, adjustments to existing and additional disclosure requirements, and additional tax considerations. An entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption of the guidance. The guidance is effective for the Company in the first quarter of 2018 and early adoption is permitted. Aon is currently evaluating the impact that the standard will have on the its Condensed Consolidated Financial Statements, as well as the method of transition and period of adoption.
Presentation of Deferred Taxes

In November 2015, the FASB issued new accounting guidance on the balance sheet presentation of deferred taxes, which requires that deferred tax liabilities and assets be classified as non-current. Aon early adopted this guidance in the second quarter of 2016 and retrospectively applied its requirements to all periods presented. For the year ended December 31, 2015, Aon reclassified its current deferred tax positions to non-current and netted the new balances by jurisdiction, which increased Non-current deferred tax assets by $92 million and decreased Non-current deferred tax liabilities by $139 million on the Condensed Consolidated Statement of Financial Position.

Debt Issuance Costs

In April 2015, the FASB issued new accounting guidance on the presentation of debt issuance costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. This guidance will also be applied to Aon's debt issuance costs related to its line-of-credit arrangements. This guidance was effective for Aon in the first quarter of 2016, which required retrospective application to prior year comparable periods. For the year ended December 31, 2015, Aon reclassified $4 million from Other current assets and $33 million from Other non-current assets to Long-term debt on the Condensed Consolidated Statement of Financial Position.

Consolidations

In February 2015, the FASB issued new accounting guidance on consolidations, which will eliminate the deferral granted to investment companies from applying the variable interest entities guidance and make targeted amendments to the current consolidation guidance. The new guidance applies to all entities involved with limited partnerships or similar entities and requires re-evaluation of these entities under the revised guidance, which could change previous consolidation conclusions. The guidance was effective for the Company in the first quarter of 2016. The adoption of this guidance did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Revenue Recognition

In May 2014, the FASB issued new accounting guidance 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 guidance 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 guidance 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

9

fulfill a contract. The guidance is effective for the Company in the first quarter of 2018 and early adoption is permitted beginning the first quarter of 2017. The guidance permits two methods of transition 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, revenues 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. Aon is currently evaluating the impact that the standard will have on the Company's Condensed Consolidated Financial Statements. The Company is also determining the appropriate method of transition to the guidance, but expects to adopt upon the effective date of January 1, 2018.

3.  Cash and Cash Equivalents and Short-term Investments
 
Cash and cash equivalents include cash balances and all highly liquid debt instruments with initial maturities of three months or less.  Short-term investments include certificates of deposit, money market funds and highly liquid debt instruments purchased with initial maturities in excess of three months but less than one year and are carried at amortized cost, respectively, which approximates fair value.
 
At September 30, 2016 , Cash and cash equivalents and Short-term investments were $946 million compared to $740 million at December 31, 2015 . Of the total balances, $85 million and $105 million was restricted as to its use at September 30, 2016 and December 31, 2015 , respectively. Included within the September 30, 2016 and December 31, 2015 balances, respectively, were £43.3 million ( $56.2 million at September 30, 2016 exchange rates) and £43.3 million ( $64.6 million at December 31, 2015 exchange rates) of operating funds required to be held by the Company in the U.K. by the Financial Conduct Authority, a U.K.-based regulator, which were included in Short-term investments.

4.  Other Financial Data
 
Condensed Consolidated Statements of Income Information

Other Income

Other income consists of the following (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Foreign currency remeasurement gain (loss)	$	2		 	$	16		 	$	(14	)	 	$	33		
Gain on disposal of business	—		 	—		 	41		 	20		
Equity earnings	4		 	4		 	7		 	10		
Income (loss) on financial instruments	3		 	(12	)	 	(7	)	 	(12	)	
Other	—		 	—		 	—		 	—		
Total	$	9		 	$	8		 	$	27		 	$	51		

Condensed Consolidated Statements of Financial Position Information

Allowance for Doubtful Accounts

An analysis of the allowance for doubtful accounts is as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Balance at beginning of period	$	64		 	$	65		 	$	58		 	$	74		
Provision charged to Other general expenses	5		 	1		 	17		 	12		
Accounts written off, net of recoveries	(4	)	 	(5	)	 	(11	)	 	(27	)	
Foreign currency translation	—		 	2		 	1		 	4		
Balance at end of period	$	65		 	$	63		 	$	65		 	$	63		

10

Other Current Assets

The components of Other current assets are as follows (in millions):

								
 	September 30, 2016	 	December 31, 2015	
Taxes receivable	$	169		 	$	94		
Prepaid expenses	150		 	130		
Deferred project costs	92		 	92		
Other	13		 	13		
Total	$	424		 	$	329		

Other Non-Current Assets

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

								
 	September 30, 2016	 	December 31, 2015	
Deferred project costs	$	188		 	$	210		
Investments	124		 	135		
Taxes receivable	73		 	82		
Other	179		 	165		
Total	$	564		 	$	592		
 
Other Current Liabilities

The components of Other current liabilities are as follows (in millions):

								
 	September 30, 2016	 	December 31, 2015	
Deferred revenue	$	413		 	$	394		
Taxes payable	74		 	94		
Other	442		 	331		
Total	$	929		 	$	819		

Other Non-Current Liabilities

The components of Other non-current liabilities are as follows (in millions):

								
 	September 30, 2016	 	December 31, 2015	
Taxes payable	$	268		 	$	223		
Deferred revenue	152		 	159		
Leases	169		 	166		
Compensation and benefits	56		 	59		
Other	114		 	162		
Total	$	759		 	$	769		

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5.  Acquisitions and Dispositions of Businesses
 
Acquisitions
 
The number of acquisitions completed within each reportable segment is as follows:

										
 	Three months ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Risk Solutions	1		 	—		 	3	 	2	
HR Solutions	—		 	1		 	2	 	3	
Total	1		 	1		 	5	 	5	

The following table includes the aggregate consideration transferred and the preliminary value of intangible assets recorded as a result of the Company's acquisitions (in millions):

									
 	 	Nine months ended September 30,	
 	 	2016	 	2015	
Consideration	 	$	207		 	$	26		
Intangible assets:	 	 		 	 		
Goodwill	 	$	117		 	$	18		
Other intangible assets	 	93		 	1		
     Total	 	$	210		 	$	19		
 
The results of operations of these acquisitions are included in the Condensed Consolidated Financial Statements as of the acquisition date.  The results of operations of the Company would not have been materially different if these acquisitions had been reported from the beginning of the period in which they were acquired.

Dispositions
 
The number of dispositions completed within each reportable segment is as follows:

												
 	Three months ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Risk Solutions	—		 	1		 	3		 	2		
HR Solutions	—		 	—		 	1		 	1		
Total	—		 	1		 	4		 	3		
Total pretax gains, net of losses, recognized on the disposals was insignificant for both the three months ended September 30, 2016 and September 30, 2015 . Total pretax gains, net of losses, recognized were $41 million and $20 million , respectively for the nine months ended September 30, 2016 and September 30, 2015 . Gains and losses recognized as a result of a disposition are included in Other income in the Condensed Consolidated Statements of Income.

12

6.  Goodwill and Other Intangible Assets
 
The changes in the net carrying amount of goodwill by reportable segment for the nine months ended September 30, 2016 are as follows (in millions):

												
 	Risk
Solutions	 	HR
Solutions	 	Total	
Balance as of January 1, 2016	$	5,593		 	$	2,855		 	$	8,448		
Goodwill related to current year acquisitions	112		 	5		 	117		
Goodwill related to disposals	(7	)	 	(26	)	 	(33	)	
Goodwill related to prior year acquisitions	2		 	—		 	2		
Foreign currency translation	(56	)	 	(26	)	 	(82	)	
Balance as of September 30, 2016	$	5,644		 	$	2,808		 	$	8,452		

Other intangible assets by asset class are as follows (in millions):

																								
 	September 30, 2016	 	December 31, 2015	
 	Gross Carrying Amount	 	Accumulated
Amortization	 	Net Carrying Amount	 	Gross Carrying Amount	 	Accumulated
Amortization	 	Net Carrying Amount	
Intangible assets with indefinite lives:	 		 	 		 	 		 	 		 	 		 	 		
Tradenames	$	1,019		 	$	—		 	$	1,019		 	$	1,019		 	$	—		 	$	1,019		
 	 	 	 	 	 	 	 	 	 	 	 	
Intangible assets with finite lives:	 		 	 		 	 		 	 		 	 		 	 		
Customer related and contract based	2,913		 	1,945		 	968		 	2,886		 	1,809		 	1,077		
Technology and other	540		 	489		 	51		 	541		 	457		 	84		
 Total	$	4,472		 	$	2,434		 	$	2,038		 	$	4,446		 	$	2,266		 	$	2,180		

Amortization expense from finite lived intangible assets was $72 million and $207 million , respectively, for the three and nine months ended September 30, 2016 . Amortization expense from finite lived intangible assets was $78 million and $237 million , respectively, for the three and nine months ended September 30, 2015 .
 
The estimated future amortization for finite lived intangible assets as of September 30, 2016 is as follows (in millions):

												
 	Risk Solutions	 	HR Solutions	 	Total	
Remainder of 2016	$	26		 	$	40		 	$	66		
2017	99		 	134		 	233		
2018	87		 	90		 	177		
2019	76		 	73		 	149		
2020	66		 	60		 	126		
Thereafter	155		 	113		 	268		
  Total	$	509		 	$	510		 	$	1,019		
 
7.  Debt

Revolving Credit Facilities

As of September 30, 2016 , Aon plc had two primary committed credit facilities outstanding: its $400 million U.S. credit facility expiring in March 2017 (the "2017 Facility") and its $900 million multi-currency U.S. credit facility expiring in February 2021 (the "2021 Facility").

Each of these facilities includes customary representations, warranties and covenants, including financial covenants that require Aon plc to maintain specified ratios of adjusted consolidated EBITDA to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. At September 30, 2016 , Aon plc did not have borrowings under either the 2017 Facility or the 2021 Facility, and was in compliance with all covenants contained therein during the nine months ended September 30, 2016 .

13

Commercial Paper

Aon Corporation, a wholly-owned subsidiary of Aon plc, has established a U.S. commercial paper program, which provides for commercial paper to be issued in an aggregate principal amount of up to $900 million , and a European multi-currency commercial paper program, which provides for commercial paper to be issued in an aggregate principal amount of up to €300 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 $244 million and $50 million of commercial paper outstanding at September 30, 2016 and December 31, 2015 , respectively, 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 nine months ended September 30, 2016 was $271 million and $251 million , respectively. The weighted average interest rate of the commercial paper outstanding for the three and nine months ended September 30, 2016 was 0.02% and 0.27% , respectively.

Notes

On March 1, 2016, Aon plc issued $750 million of 3.875% Senior Notes due December 2025. The Company used the proceeds of the issuance for general corporate purposes.

On May 27, 2016, $500 million of 3.125% Senior Notes due May 2016 issued by Aon Corporation matured and were repaid in full.

8.  Income Taxes
 
The effective tax rate on net income was 13.2% and 16.1% for the three and nine months ended September 30, 2016 , respectively. The effective tax rate on net income was 14.0% and 15.8% for the three and nine months ended September 30, 2015 respectively. The effective tax rate in the third quarter of 2016 was impacted by changes in the geographical distribution of income, including a reduction in forecasted U.S. income resulting from non-cash pension expenses expected in Q4, and certain favorable discrete items.

9.  Shareholders' Equity
 
Ordinary Shares
 
In April 2012, the Company's Board of Directors authorized a share repurchase program under which up to $5.0 billion of Class A Ordinary Shares may be repurchased (the "2012 Share Repurchase Program"). In November 2014, the Company's Board of Directors authorized a new $5.0 billion share repurchase program in addition to the existing program (the "2014 Share Repurchase Program" and, together, the "Repurchase Programs"). Under each program, shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital.
 
In the three months ended September 30, 2016 , the Company repurchased 2.7 million shares at an average price per share of $110.26 for a total cost of approximately $301 million under the Repurchase Programs. During the nine months ended September 30, 2016 , the Company repurchased 10.4 million shares at an average price per share of $101.16 for a total cost of approximately $1.1 billion under the Repurchase Programs. Included in the 2.7 million shares and 10.4 million shares repurchased during the three and nine months ended September 30, 2016 was 128 thousand shares that did not settle until October 2016. These shares were settled at an average price per share of $112.00 and total cost of $14.3 million . In the three months ended September 30, 2015 , the Company repurchased 6.3 million shares at an average price per share of $95.75 for a total cost of approximately $600 million . During the nine months ended September 30, 2015 , the Company repurchased 11.7 million shares at an average price per share of $98.00 for a total cost of $1.15 billion . In August 2015, the $5 billion of Class A Ordinary Shares authorized under the 2012 Share Repurchase Program was exhausted. At September 30, 2016 , the remaining authorized amount for share repurchase under the 2014 Share Repurchase Program was $3.0 billion . Under the Repurchase Programs, the Company has repurchased a total of 88.4 million shares for an aggregate cost of approximately $7.0 billion .

14

Net Income Per Share
 
Weighted average shares outstanding are as follows (in millions):

												
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Shares for basic earnings per share	267.5		 	280.9		 	269.1		 	283.2		
Common stock equivalents	2.1		 	2.9		 	1.9		 	2.7		
Shares for diluted earnings per share	269.6		 	283.8		 	271.0		 	285.9		
 
Certain ordinary share equivalents may be excluded from the computation of diluted net income per share if their inclusion would be antidilutive. There were no shares excluded from the calculation for the three and nine months ended September 30, 2016 and no shares excluded from the calculation for the three and nine months ended September 30, 2015 .

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, 2015	$	(25	)	 	$	(771	)	 	$	(2,627	)	 	$	(3,423	)	
Other comprehensive (loss) income before reclassifications, net	(16	)	 	(227	)	 	(234	)	 	(477	)	
Amounts reclassified from accumulated other comprehensive loss:	 	 			 			 			
Amounts reclassified from accumulated other comprehensive loss	7		 	—		 	136		 	143		
Tax benefit	(2	)	 	—		 	(34	)	 	(36	)	
Amounts reclassified from accumulated other comprehensive loss, net	5		 	—		 	102		 	107		
Net current period other comprehensive (loss) income	(11	)	 	(227	)	 	(132	)	 	(370	)	
Balance at September 30, 2016	$	(36	)	 	$	(998	)	 	$	(2,759	)	 	$	(3,793	)	

(1) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income , Other general expenses , and Compensation and benefits . See Note 12 "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.
In March 2016, the Company entered into an insurance contract that covers a portion of the assets within select U.K. pension schemes. The transaction resulted in a decrease in Prepaid pension assets and Accumulated other comprehensive income of $267 million as the fair value in the insurance policies was deemed to be the present value of the current obligation.

15

10.  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 September 30,	
 	U.K.	 	U.S.	 	Other	
 	2016	 	2015	 	2016	 	2015	 	2016	 	2015	
Service cost	$	—		 	$	—		 	$	—		 	$	—		 	$	—		 	$	—		
Interest cost	37		 	50		 	28		 	33		 	7		 	8		
Expected return on plan assets, net of administration expenses	(58	)	 	(77	)	 	(39	)	 	(38	)	 	(12	)	 	(12	)	
Amortization of prior-service cost	—		 	—		 	1		 	—		 	—		 	—		
Amortization of net actuarial loss	7		 	11		 	12		 	14		 	3		 	2		
Net periodic (benefit) cost	(14	)	 	(16	)	 	2		 	9		 	(2	)	 	(2	)	
Loss on pension settlement	—		 	—		 	—		 	—		 	—		 	—		
Curtailment gain and other	—		 	—		 	—		 	—		 	—		 	—		
Total net periodic cost (benefit)	$	(14	)		$	(16	)		$	2			$	9			$	(2	)		$	(2	)	
 	 	 	 	 	 	 	 	 	 	 	 	
 	Nine months ended September 30,	
 	U.K.	 	U.S.	 	Other	
 	2016	 	2015	 	2016	 	2015	 	2016	 	2015	
Service cost	$	—		 	$	—		 	$	—		 	$	2		 	$	—		 	$	—		
Interest cost	123		 	149		 	83		 	99		 	21		 	25		
Expected return on plan assets, net of administration expenses	(187	)	 	(229	)	 	(117	)	 	(115	)	 	(36	)	 	(37	)	
Amortization of prior-service cost	1		 	—		 	2		 	—		 	—		 	—		
Amortization of net actuarial loss	24		 	31		 	37		 	41		 	8		 	8		
Net periodic (benefit) cost	(39	)	 	(49	)	 	5		 	27		 	(7	)	 	(4	)	
Loss on pension settlement	61		 	—		 	—		 	—		 	—		 	—		
Curtailment gain and other	—		 	—		 	—		 	(1	)	 	—		 	—		
Total net periodic cost (benefit)	$	22		 	$	(49	)	 	$	5		 	$	26		 	$	(7	)	 	$	(4	)	

Beginning in 2016, the Company has elected to utilize a full yield curve approach in the estimation of the service and interest cost components of net periodic pension and post-retirement benefit cost for Aon's major pension and other post-retirement benefit plans by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. In 2015 and prior years, the Company estimated these components of net periodic pension and post-retirement benefit cost by applying a single weighted-average discount rate, derived from the yield curve used to measure the benefit obligation at the beginning of the period. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. This change does not affect the measurement of the projected benefit obligation as the change in the service cost and interest cost is completely offset in the actuarial (gain) loss recorded in other comprehensive income. The Company accounted for this change as a change in estimate and, accordingly, will account for it prospectively.

In March 2016, the Company announced a plan to offer a voluntary one-time lump sum payment option to certain eligible former employees under one of the Company’s U.K. pension plans, that if accepted, would settle the Company’s pension obligations to them. The lump sum cash payment offer closed during the second quarter of 2016. In total, lump sum payments from plan assets of  £116 million ( $159 million using June 30, 2016 exchange rates) were paid. As a result of this settlement, the Company remeasured the assets and liabilities of the U.K. pension plan during the second quarter of 2016, which in aggregate resulted in a net reduction to the projected benefit obligation of  £103 million ( $141 million using June 30, 2016 exchange rates) as well as a non-cash settlement charge of  £42 million ( $61 million using average June 2016 exchange rate) in the second quarter of 2016.

16

In August 2016, the Company announced a plan to offer a voluntary one-time lump sum payment option to certain eligible former employees under one of the Company's U.S. pension plans, that if accepted, would settle the Company's pension obligations to them. As of September 30, 2016, the offer was still open and a settlement charge is expected in the fourth quarter.

Contributions

The Company expects to contribute approximately $79 million , $54 million , and $17 million , based on exchange rates as of December 31, 2015, to its significant U.K., U.S., and other significant international pension plans, respectively, during 2016. During the three months ended September 30, 2016 , contributions of $19 million , $5 million , and $4 million were made to the Company's significant U.K., U.S., and other significant international pension plans, respectively. During the nine months ended September 30, 2016 , contributions of $53 million , $24 million , and $14 million were made to the Company's significant U.K., U.S., and other significant international pension plans, respectively.

During the three months ended September 30, 2015 , contributions of $16 million , $41 million , and $3 million  were made to the Company's significant U.K., U.S., and other significant international pension plans, respectively. During the nine months ended September 30, 2015 , contributions of $50 million , $103 million , and $11 million  were made to the Company's significant U.K., U.S., and other significant international pension plans, respectively.
 
11.  Share-Based Compensation Plans
 
The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions): 

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Restricted share units ("RSUs")	$	44		 	$	44		 	$	149		 	$	153		
Performance share awards ("PSAs")	25		 	28		 	70		 	77		
Share options	—		 	—		 	—		 	—		
Employee share purchase plans	3		 	3		 	9		 	9		
Total share-based compensation expense	$	72		 	$	75		 	$	228		 	$	239		
 
Restricted Share Units
 
A summary of the status of the Company's RSUs is as follows (shares in thousands):

														
 	Nine months ended September 30,	
 	2016	 	2015	
 	Shares	 	Fair Value (1)	 	Shares	 	Fair Value (1)	
Non-vested at beginning of period	7,169		 	$	77		 	8,381		 	$	63		
Granted	2,108		 	101		 	2,298		 	98		
Vested	(2,729	)	 	70		 	(3,217	)	 	58		
Forfeited	(333	)	 	81		 	(228	)	 	70		
Non-vested at end of period	6,215		 	$	88		 	7,234		 	$	77		

(1)	Represents per share weighted-average fair value of award at date of grant.	

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 performance conditions are not considered in the determination of the grant date fair value for these awards. The fair value of PSAs is based upon the market price of an Aon ordinary share at the date of grant. Compensation expense is recognized over the performance period based on management's estimate of the number of awards expected to vest. Compensation expense is adjusted to reflect the actual number of shares issued at the end of the programs. 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. Dividend equivalents are not paid on PSAs.

17

Information as of September 30, 2016 regarding the Company's target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the nine months ended September 30, 2016 and the years ended December 31, 2015 and 2014 , respectively, is as follows (shares in thousands, dollars in millions, except fair value):

												
 	2016	 	2015	 	2014	
Target PSAs granted during period	783		 	993		 	816		
Weighted average fair value per share at date of grant	$	100		 	$	96		 	$	81		
Number of shares that would be issued based on current performance levels	779		 	959		 	1,541		
Unamortized expense, based on current performance levels	$	64		 	$	40		 	$	11		
 
Share Options
 
The Company did not grant any share options during either the nine months ended September 30, 2016 or the nine months ended September 30, 2015 .
 
A summary of the status of the Company's share options and related information is as follows (shares in thousands):

														
 	Nine months ended September 30,	
 	2016	 	2015	
 	Shares	 	Weighted- Average
Exercise Price	 	Shares	 	Weighted- Average
Exercise Price	
Beginning outstanding	837		 	$	40		 	2,300		 	$	32		
Granted	—		 	—		 	—		 	—		
Exercised	(286	)	 	38		 	(1,432	)	 	27		
Forfeited and expired	(4	)	 	42		 	(13	)	 	39		
Outstanding at end of period	547		 	41		 	855		 	40		
Exercisable at end of period	547		 	41		 	855		 	40		
 
The weighted average remaining contractual life, in years, of outstanding options was 2.2 years and 2.6 years at September 30, 2016 and 2015 , respectively.
 
The aggregate intrinsic value represents the total pretax intrinsic value, based on options with an exercise price less than the Company's closing share price of $112.49 as of September 30, 2016 , which would have been received by the option holders had those option holders exercised their options as of that date.  At September 30, 2016 , the aggregate intrinsic value of options outstanding, all of which were exercisable, was $39 million .
 
Other information related to the Company's share options is as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Aggregate intrinsic value of stock options exercised	$	1		 	$	3		 	$	18		 	$	103		
Cash received from the exercise of stock options	—		 	1		 	11		 	39		
Tax benefit realized from the exercise of stock options	1		 	1		 	5		 	36		
 
Unamortized deferred compensation expense, which includes both options and RSUs, amounted to $416 million as of September 30, 2016 , with a remaining weighted-average amortization period of approximately 2.1 years.

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12.  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 in the Condensed Consolidated Statements of Income.
 
The notional and fair values of derivative instruments are as follows (in millions):

																								
 	Notional Amount	 	Derivative Assets (1)	 	Derivative Liabilities (2)	
 	September 30,
2016	 	December 31,
2015	 	September 30,
2016	 	December 31,
2015	 	September 30,
2016	 	December 31,
2015	
Foreign exchange contracts:	 		 	 		 	 		 	 		 	 		 	 		
Accounted for as hedges	$	794		 	$	778		 	$	15		 	$	32		 	$	9		 	$	18		
Not accounted for as hedges (3)	209		 	280		 	—		 	—		 	—		 	—		
   Total	$	1,003		 	$	1,058		 	$	15		 	$	32		 	$	9		 	$	18		

(1)	Included within Other current assets ( $5 million at September 30, 2016 and $15 million  at December 31, 2015 ) or Other non-current assets ( $10 million at September 30, 2016 and $17 million  at December 31, 2015 ).	
		
(2)	Included within Other current liabilities ( $5 million at September 30, 2016 and $13 million  at December 31, 2015 ) or Other non-current liabilities ( $4 million at September 30, 2016 and $5 million  at December 31, 2015 ).	
		
(3)	These contracts typically are for 30 day durations 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:	September 30,
2016	 	December 31,
2015	 	September 30,
2016	 	December 31,
2015	 	September 30,
2016	 	December 31,
2015	
Foreign exchange contracts	$	15		 	$	32		 	$	(1	)	 	$	(13	)	 	$	14		 	$	19		

(1) Included within Other current assets ( $4 million at September 30, 2016 and $6 million  at December 31, 2015 ) or Other non-current assets ( $10 million at September 30, 2016 and $13 million  at December 31, 2015 ).

19

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:	 	September 30,
2016	 	December 31,
2015	 	September 30,
2016	 	December 31,
2015	 	September 30,
2016	 	December 31,
2015	
Foreign exchange contracts	 	$	9		 	$	18		 	$	(1	)	 	$	(13	)	 	$	8		 	$	5		

(1) Included within Other current liabilities ( $4 million at September 30, 2016 and $4 million  at December 31, 2015 ) or Other non-current liabilities ( $4 million at September 30, 2016 and $1 million  at December 31, 2015 ).

The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2016 and 2015 are as follows (in millions): 

																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Location of future reclassification from Accumulated Other Comprehensive Loss	 	Gain (Loss) Recognized in Accumulated Other Comprehensive Loss:	
Three months ended September 30,	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income (Expense)	 	Total	
2016	 	$	10		 	$	(4	)	 	$	—		 	$	(7	)	 	$	(1	)	
2015	 	(8	)	 	(2	)	 	—		 	(4	)	 	(14	)	

																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Location of future reclassification from Accumulated Other Comprehensive Loss	 	Gain (Loss) Recognized in Accumulated Other Comprehensive Loss:	
Nine months ended September 30,	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income (Expense)	 	Total	
2016	 	$	8		 	$	(9	)	 	$	—		 	$	(18	)	 	$	(19	)	
2015	 	(2	)	 	(1	)	 	—		 	2		 	(1	)	

	
																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion):	
Three months ended September 30,	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income	 	Total	
2016	 	$	1		 	$	(1	)	 	$	—		 	$	(2	)	 	$	(2	)	
2015	 	2		 	—		 	(2	)	 	—		 	—		

																					
Cash Flow Hedge - Foreign Exchange Contracts	 	Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion):	
Nine months ended September 30,	 	Compensation and Benefits	 	Other General Expenses	 	Interest Expense	 	Other Income	 	Total	
2016	 	$	2		 	$	(2	)	 	$	(1	)	 	$	(5	)	 	$	(6	)	
2015	 	3		 	(1	)	 	(6	)	 	(3	)	 	(7	)	
The Company estimates that approximately $11 million of pretax losses currently included within Accumulated other comprehensive loss will be reclassified into earnings in the next twelve months.
 
The amount of gain (loss) recognized in income on the ineffective portion of derivatives for the three and nine months ended September 30, 2016 and 2015 was insignificant.
 
During the three and nine months ended September 30, 2016 , the Company recorded a gain of $2 million and $1 million , respectively, in Other income for foreign exchange derivatives not designated or qualifying as hedges. During the three and nine months ended September 30, 2015 , the Company recorded a gain of $15 million and $6 million , respectively, in Other income for foreign exchange derivatives not designated or qualifying as hedges.

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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. Beginning in June 2016, the Company designated its Euro-denominated commercial paper issuances as a non-derivative hedge of a net investment in its European operations. The change in the carrying value of the designated portion of the Euro-denominated commercial paper due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustment, a component of Accumulated other comprehensive income (loss), offsetting the foreign currency translation adjustment of the hedged net investments that is also recorded in Accumulated other comprehensive income (loss). Any ineffective portions of net investment hedges are reclassified from Accumulated other comprehensive income (loss) into earnings during the period of change.

As of September 30, 2016 , the Company has €217 million ( $244 million at September 30, 2016 exchange rates) of outstanding Euro-denominated commercial paper designated as a hedge of its net investment in its European operations. The weighted average commercial paper outstanding for the three months ended September 30, 2016 was €217 million and since inception of the hedge was €177 million . As of September 30, 2016 , the associated gain recognized in Accumulated other comprehensive income (loss) related to the net investment hedge was $1 million .

The Company did not reclassify any deferred gains or losses related to net investment hedges from Accumulated other comprehensive income (loss) to earnings during the  three and nine months ended September 30, 2016 . In addition, the Company did not have any ineffectiveness related to net investment hedges during the  three and nine ended September 30, 2016 .
 
13.  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 are carried at cost as an approximation of fair value. Based on market convention, the Company considers cost a practical and expedient measure of fair value.
 
Equity investments consist of domestic and international equity securities valued using the closing stock price on a national securities exchange. 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 on a sample basis, independently verifies the observable inputs for Level 2 equity securities.
 
Fixed income investments consist of corporate and government bonds. Corporate and government 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. The Company obtains a detailed understanding of the models, inputs, and assumptions used in developing prices provided by its vendors. This understanding includes discussions with valuation resources at the vendor. During these discussions, the Company uses a fair value measurement questionnaire, which is part of the Company's internal controls over financial reporting, to obtain the information necessary to assert the model, inputs and assumptions used to comply with U.S. GAAP, including disclosure requirements. The Company also obtains observable inputs from the pricing vendor and 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 have historically not been material to the fair value estimates used in the Condensed Consolidated Financial Statements.

21

Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities.
 
Debt is carried at outstanding principal balance, less any unamortized discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements.
 
The following tables present the categorization of the Company's assets and liabilities that are measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015 (in millions):

																
 	 	 	Fair Value Measurements Using	
 	Balance at September 30, 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)	$	1,525		 	$	1,525		 	$	—		 	$	—		
Other investments:	 		 	 		 	 		 	 		
Government bonds	1		 	—		 	1		 	—		
Equity investments	8		 	6		 	2		 	—		
Derivatives (2):	 		 	 		 	 		 	 		
Foreign exchange contracts	15		 	—		 	15		 	—		
Liabilities:	 		 	 		 	 		 	 		
Derivatives:	 		 	 		 	 		 	 		
Foreign exchange contracts	9		 	—		 	9		 	—		
  
(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) See Note 12 "Derivatives and Hedging" for additional information regarding the Company's derivative and hedging activity.

																
 	 	 	Fair Value Measurements Using	
 	Balance at December 31, 2015	 	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)	$	1,396		 	$	1,396		 	$	—		 	$	—		
Other investments:	 		 	 		 	 		 	 		
Government bonds	1		 	—		 	1		 	—		
Equity investments	10		 	6		 	4		 	—		
Derivatives (2):	 		 	 		 	 		 	 		
Foreign exchange contracts	32		 	—		 	32		 	—		
Liabilities:	 		 	 		 	 		 	 		
Derivatives:	 		 	 		 	 		 	 		
Foreign exchange contracts	18		 	—		 	18		 	—		
  
(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) See Note 12 "Derivatives and Hedging" for additional information regarding the Company's derivative and hedging activity.
 
There were no transfers of assets or liabilities between fair value hierarchy levels in either the three and nine months ended September 30, 2016 or 2015 . The Company recognized no realized or unrealized gains or losses in the Condensed Consolidated Statements of Income during either the three and nine months ended  September 30, 2016 or 2015 , related to assets and liabilities measured at fair value using unobservable inputs.

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The fair value of Long-term debt is classified as Level 2 of the fair value hierarchy. The following table discloses the Company's financial instruments where the carrying amounts and fair values differ (in millions):

																
 	September 30, 2016	 	December 31, 2015	
 	Carrying Value	 	Fair Value	 	Carrying Value	 	Fair Value	
Long-term debt	$	5,910		 	$	6,568		 	$	5,138		 	$	5,386		

14.  Commitments and Contingencies
 
Legal
 
Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits and proceedings that arise in the ordinary course of business, which frequently include errors and omissions ("E&O") claims. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble or extraordinary damages. While Aon maintains meaningful E&O insurance and other insurance programs to provide protection against certain losses that arise in such matters, Aon has exhausted or materially depleted its coverage under some of the policies that protect the Company and, consequently, is self-insured or materially self-insured for some claims. Accruals for these exposures, and related insurance receivables, when applicable, are included in the Condensed Consolidated Statements of Financial Position and have been recognized in Other general expenses in the Condensed Consolidated Statements of Income to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Matters that are not probable and reasonably estimable are not accrued for in the financial statements.

We have included in the 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, we 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, in excess of amounts that are deemed probable and estimable and therefore already accrued, is estimated to be between $0 and $0.2 billion , exclusive of any insurance coverage. These estimates are based on currently available information. As available information changes, the matters for which Aon is able to estimate may change, and the estimates themselves may change. In addition, many estimates involve significant judgment and uncertainty. For example, at the time of making an estimate, Aon may only have limited information about the facts underlying the claim, and predictions and assumptions about future court rulings and outcomes may prove to be inaccurate. Although management at present believes that the ultimate outcome of all matters described below, individually or in the aggregate, will not have a material adverse effect on the consolidated financial position of Aon, legal proceedings are subject to inherent uncertainties and unfavorable rulings or other events. Unfavorable resolutions could include substantial monetary or punitive damages imposed on Aon or its subsidiaries. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected.
 
Current Matters

A retail insurance brokerage subsidiary of Aon was sued on September 14, 2010 in the Chancery Court for Davidson County, Tennessee, Twentieth Judicial District, at Nashville by a client, Opry Mills Mall Limited Partnership ("Opry Mills") that sustained flood damage to its property in May 2010. The lawsuit seeks $200 million in coverage from numerous insurers with whom this Aon subsidiary placed the client's property insurance coverage. The insurers contend that only $50 million in coverage (which has already been paid) is available for the loss because the flood event occurred on property in a high hazard flood zone. Opry Mills is seeking full coverage from the insurers for the loss and has sued this Aon subsidiary in the alternative for the same $150 million difference on various theories of professional liability if the court determines there is not full coverage. In addition, Opry Mills seeks prejudgment interest, attorneys' fees and enhanced damages which could substantially increase Aon's exposure. In March 2015, the trial court granted partial summary judgment in favor of plaintiffs
and against the insurers, holding generally that the plaintiffs are entitled to $200 million in coverage under the language of the policies. In August 2015, a jury returned a verdict in favor of Opry Mills and against the insurers in the amount of $204 million . The insurers have appealed both of these trial court decisions. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims.
 
A pensions consulting and administration subsidiary of Hewitt before its acquisition by Aon provided advisory services to the trustees of the Philips UK pension fund and the relevant employer of fund beneficiaries. On January 2, 2014, Philips Pension Trustees Limited and Philips Electronics UK Limited (together, "Philips") sued Aon in the High Court, Chancery Division, London alleging negligence and breach of duty. The proceedings assert Philips' right to claim damages related to Philips' use of a credit default swap hedging strategy pursuant to the supply of the advisory services, which is said to have resulted in

23

substantial damages to Philips. Philips sought approximately £189 million ( $245 million at September 30, 2016 exchange rates), plus interest and costs. In June 2015, the High Court ordered Philips to clarify several aspects of its claim. In its clarification, Philips increased the amount of its claim to £290 million ( $376 million at September 30, 2016 exchange rates), plus interest and costs. In October 2016, all parties reached an agreement to settle this case (subject only to negotiating the terms of a final, written agreement).  The terms of this settlement will not have a material impact on Aon's results of operations or financial condition.

On June 1, 2007, the International Road Transport Union ("IRU") sued Aon in the Geneva Tribunal of First Instance in Switzerland. IRU alleges, among other things, that, between 1995 and 2004, a business acquired by Aon and, later, an Aon subsidiary (1) accepted commissions for certain insurance placements that violated a fee agreement entered between the parties and (2) negligently failed to ask certain insurance carriers to contribute to the IRU's risk management costs.  IRU sought damages of approximately CHF 46 million ( $47 million at September 30, 2016 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 September 30, 2016 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 ( $29 million at September 30, 2016 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. The Geneva Appellate Court affirmed the judgment of the Geneva Tribunal of First Instance. The Aon subsidiary filed an appeal to the Swiss Supreme Court. The Aon subsidiary's maximum liability on appeal is limited to CHF 8.7 million ( $9 million at September 30, 2016 exchange rates) and $115,000 (plus interest and costs) beyond what the subsidiary has already paid.

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 has been filed, although a tolling agreement has been 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 ( $58 million at September 30, 2016 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.  The fund actuary must still calculate the cost of the settlement to the fund in light of, among other things, changed market conditions since the original High Court judgment in 2014.  The tolling agreement with Aon remains in place. Aon believes that it has meritorious defenses and intends to vigorously defend itself against this potential 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 2010/2011 Canterbury Earthquakes.  LPC claims damages of approximately NZD 184 million ( $134 million at September 30, 2016 exchange rates) plus interest and costs.  Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims.
 
In addition, from time to time, Aon's clients may bring claims and take legal action pertaining to the performance of fiduciary responsibilities. Whether client claims and legal action related to the Company's performance of fiduciary responsibilities are founded or unfounded, if such claims and legal actions are resolved in a manner unfavorable to the Company, they may adversely affect Aon's financial results and materially impair the market perception of the Company and that of its products and services.
 
Guarantees and Indemnifications
 
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

24

Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of January 13, 1997, as supplemented by the First Supplemental Indenture, dated as of January 13, 1997), and (4) First Supplemental Indenture, dated as of April 2, 2012, among Aon Finance N.S. 1, ULC, as issuer, Aon Corporation, as guarantor, Aon plc, as guarantor, and Computershare Trust Company of Canada, as trustee.
 
The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable are included in the Company's Condensed Consolidated Financial Statements, and are recorded at fair value.

The Company expects that, as prudent business interests dictate, additional guarantees and indemnifications may be issued from time to time.

Letters of Credit
 
The Company had total letters of credit ("LOCs") outstanding of approximately $91 million at September 30, 2016 , compared to $58 million at December 31, 2015 . 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 the Company's own workers compensation program. The Company has also issued LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries.
 
Commitments

The Company has provided commitments to fund certain limited partnerships in which it has an interest in the event that the general partners request funding. Some of these commitments have specific expiration dates and the maximum potential funding under these commitments was $10 million at September 30, 2016 compared to $12 million at June 30, 2016 and December 31, 2015 . During the three and nine months ended September 30, 2016 , the company funded $2 million of these commitments.
 
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 $82 million at September 30, 2016 compared to $104 million at December 31, 2015 .
 
15. Segment Information
 
The Company has two reportable segments:  Risk Solutions and HR Solutions.  Unallocated income and expenses, when combined with the operating segments and after the elimination of intersegment revenues and expenses, equal the amounts in the Condensed Consolidated Financial Statements.
 
Reportable operating segments have been determined using a management approach, which is consistent with the basis and manner in which Aon's chief operating decision-maker ("CODM") uses financial information for the purposes of allocating resources and evaluating performance.  The CODM assesses performance based on operating income and generally accounts for inter-segment revenue as if the revenue were from third parties and at what management believes are current market prices.  The Company does not present net assets by segment as this information is not reviewed by the CODM.
 
Risk Solutions acts as an advisor and insurance and reinsurance broker, helping clients manage their risks, via consultation, as well as negotiation and placement of insurance risk with insurance carriers through Aon's global distribution network.
 
HR Solutions partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance by designing, implementing, communicating and administering a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.

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Aon's total revenue is as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016		2015	 	2016	 	2015	
Risk Solutions	$	1,715		 	$	1,689		 	$	5,434		 	$	5,417		
HR Solutions	1,041		 	1,064		 	2,902		 	3,013		
Intersegment eliminations	(10	)	 	(11	)	 	(32	)	 	(36	)	
Total revenue	$	2,746		 	$	2,742		 	$	8,304		 	$	8,394		

Commissions, fees and other revenues by product are as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Retail brokerage	$	1,377		 	$	1,352		 	$	4,380		 	$	4,363		
Reinsurance brokerage	332		 	331		 	1,038		 	1,038		
Total Risk Solutions Segment	1,709		 	1,683		 	5,418		 	5,401		
Consulting services	459		 	460		 	1,216		 	1,222		
Outsourcing	593		 	616		 	1,703		 	1,819		
Intrasegment	(11	)	 	(12	)	 	(17	)	 	(28	)	
Total HR Solutions Segment	1,041		 	1,064		 	2,902		 	3,013		
Intersegment	(10	)	 	(11	)	 	(32	)	 	(36	)	
Total commissions, fees and other revenue	$	2,740		 	$	2,736		 	$	8,288		 	$	8,378		
 
Fiduciary investment income by segment is as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Risk Solutions	$	6		 	$	6		 	$	16		 	$	16		
HR Solutions	—		 	—		 	—		 	—		
Total fiduciary investment income	$	6		 	$	6		 	$	16		 	$	16		
 
A reconciliation of segment operating income before tax to income before income taxes is as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Risk Solutions	$	330		 	$	324		 	$	1,132		 	$	1,015		
HR Solutions	134		 	134		 	276		 	249		
Segment income before income taxes	464		 	458		 	1,408		 	1,264		
Unallocated expenses	(42	)	 	(45	)	 	(131	)	 	(133	)	
Interest income	1		 	3		 	6		 	10		
Interest expense	(70	)	 	(72	)	 	(212	)	 	(205	)	
Other income	9		 	8		 	27		 	51		
Income before income taxes	$	362		 	$	352		 	$	1,098		 	$	987		
 
Unallocated expenses include administrative or other costs not attributable to the reportable segments, such as corporate governance costs. Interest income represents income earned primarily on operating cash balances and certain income producing securities. Interest expense represents the cost of debt obligations.
 
Other income consists of equity earnings, realized gains or losses on the sale of investments, gains or losses on the disposal of businesses, gains or losses on derivatives, and gains or losses on foreign currency transactions.

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16.  Guarantee of Registered Securities
 
As described in Note 14, 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. 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 debt. In addition, Aon Corporation entered into an agreement pursuant to which it agreed to guarantee the obligations of Aon plc arising under the 4.250% 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 2.8% Notes due 2021, 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, and the 3.875% Notes due December 2025. 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 4.250% Notes due 2042, the 4.45% Notes due 2043, the 4.00% Notes due 2023, the 2.875% Notes due 2026, the 3.50% Notes due 2024, the 4.60% Notes due 2044, or the 4.75% Notes due 2045. As a result of the existence of these guarantees, the Company is required by Rule 3-10 of Regulation S-X to present the financial information set forth in this footnote.
 
The following tables set forth condensed consolidating statements of income for the three and nine months ended September 30, 2016 and 2015 , condensed consolidating statements of comprehensive income for the three and nine months ended September 30, 2016 and 2015 , condensed consolidating statements of financial position as of September 30, 2016 and December 31, 2015 , and condensed consolidating statements of cash flows for the nine months ended September 30, 2016 and 2015 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.

In January 2015, Aon plc transferred its ownership of all of its directly held subsidiaries to Aon Global Holdings Limited, an intermediate holding company. The financial results of Aon Global Holdings Limited are included in the Other Non-Guarantor Subsidiaries column of the Condensed Consolidating Financial Statements. The Company has reflected the transfer of Aon Corporation from Aon plc to Aon Global Holdings Limited below for all periods presented.

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Condensed Consolidating Statement of Income

																					
 	 	Three months ended September 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Commissions, fees and other	 	$	—		 	$	—		 	$	2,740		 	$	—		 	$	2,740		
Fiduciary investment income	 	—		 	—		 	6		 	—		 	6		
Total revenue	 	—		 	—		 	2,746		 	—		 	2,746		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	25		 	4		 	1,582		 	—		 	1,611		
Other general expenses	 	(1	)	 	3		 	711		 	—		 	713		
Total operating expenses	 	24		 	7		 	2,293		 	—		 	2,324		
Operating (loss) income	 	(24	)	 	(7	)	 	453		 	—		 	422		
Interest income	 	—		 	4		 	5		 	(8	)	 	1		
Interest expense	 	(51	)	 	(24	)	 	(3	)	 	8		 	(70	)	
Intercompany interest income (expense)	 	3		 	(135	)	 	132		 	—		 	—		
Intercompany other income (expense)	 	328		 	(277	)	 	(51	)	 	—		 	—		
Other (loss) income	 	(5	)	 	1		 	10		 	3		 	9		
Income (loss) before taxes	 	251		 	(438	)	 	546		 	3		 	362		
Income tax expense (benefit)	 	14		 	(93	)	 	127		 	—		 	48		
Income (loss) before equity in earnings of subsidiaries	 	237		 	(345	)	 	419		 	3		 	314		
Equity in earnings (loss) of subsidiaries, net of tax	 	67		 	209		 	(136	)	 	(140	)	 	—		
Net income (loss)	 	304		 	(136	)	 	283		 	(137	)	 	314		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	7		 	—		 	7		
Net income (loss) attributable to Aon shareholders	 	$	304		 	$	(136	)	 	$	276		 	$	(137	)	 	$	307		

28

Condensed Consolidating Statement of Income  

																					
 	 	Three months ended September 30, 2015	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Commissions, fees and other	 	$	—		 	$	—		 	$	2,736		 	$	—		 	$	2,736		
Fiduciary investment income	 	—		 	—		 	6		 	—		 	6		
Total revenue	 	—		 	—		 	2,742		 	—		 	2,742		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	28		 	8		 	1,608		 	—		 	1,644		
Other general expenses	 	1		 	3		 	681		 	—		 	685		
Total operating expenses	 	29		 	11		 	2,289		 	—		 	2,329		
Operating (loss) income	 	(29	)	 	(11	)	 	453		 	—		 	413		
Interest income	 	(5	)	 	4		 	4		 	—		 	3		
Interest expense	 	(33	)	 	(34	)	 	(5	)	 	—		 	(72	)	
Intercompany interest income (expense)	 	119		 	(128	)	 	9		 	—		 	—		
Intercompany other (expense) income	 	(57	)	 	(17	)	 	74		 	—		 	—		
Other income	 	—		 	2		 	6		 	—		 	8		
(Loss) income before taxes	 	(5	)	 	(184	)	 	541		 	—		 	352		
Income tax (benefit) expense	 	(1	)	 	(63	)	 	113		 	—		 	49		
(Loss) Income before equity in earnings of subsidiaries	 	(4	)	 	(121	)	 	428		 	—		 	303		
Equity in earnings of subsidiaries, net of tax	 	299		 	355		 	234		 	(888	)	 	—		
Net income	 	295		 	234		 	662		 	(888	)	 	303		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	8		 	—		 	8		
Net income attributable to Aon shareholders	 	$	295		 	$	234		 	$	654		 	$	(888	)	 	$	295		

29

Condensed Consolidating Statement of Income  

																					
 	 	Nine months ended September 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Commissions, fees and other	 	$	—		 	$	—		 	$	8,288		 	$	—		 	$	8,288		
Fiduciary investment income	 	—		 	—		 	16		 	—		 	16		
Total revenue	 	—		 	—		 	8,304		 	—		 	8,304		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	76		 	10		 	4,862		 	—		 	4,948		
Other general expenses	 	5		 	7		 	2,067		 	—		 	2,079		
Total operating expenses	 	81		 	17		 	6,929		 	—		 	7,027		
Operating (loss) income	 	(81	)	 	(17	)	 	1,375		 	—		 	1,277		
Interest income	 	—		 	13		 	14		 	(21	)	 	6		
Interest expense	 	(145	)	 	(78	)	 	(10	)	 	21		 	(212	)	
Intercompany interest income (expense)	 	10		 	(405	)	 	395		 	—		 	—		
Intercompany other income (expense)	 	217		 	(292	)	 	75		 	—		 	—		
Other (expense) income	 	(3	)	 	(8	)	 	39		 	(1	)	 	27		
(Loss) income before taxes	 	(2	)	 	(787	)	 	1,888		 	(1	)	 	1,098		
Income tax (benefit) expense	 	(33	)	 	(219	)	 	429		 	—		 	177		
Income (loss) before equity in earnings of subsidiaries	 	31		 	(568	)	 	1,459		 	(1	)	 	921		
Equity in earnings of subsidiaries, net of tax	 	864		 	812		 	244		 	(1,920	)	 	—		
Net income	 	895		 	244		 	1,703		 	(1,921	)	 	921		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	27		 	—		 	27		
Net income attributable to Aon shareholders	 	$	895		 	$	244		 	$	1,676		 	$	(1,921	)	 	$	894		

30

Condensed Consolidating Statement of Income  

																					
 	 	Nine months ended September 30, 2015	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 	 	 	 	 	 	 	 	 	
Commissions, fees and other	 	$	—		 	$	—		 	$	8,378		 	$	—		 	$	8,378		
Fiduciary investment income	 	—		 	—		 	16		 	—		 	16		
Total revenue	 	—		 	—		 	8,394		 	—		 	8,394		
Expenses	 	 	 	 	 	 	 	 	 	 	
Compensation and benefits	 	85		 	29		 	4,866		 	—		 	4,980		
Other general expenses	 	10		 	6		 	2,267		 	—		 	2,283		
Total operating expenses	 	95		 	35		 	7,133		 	—		 	7,263		
Operating (loss) income	 	(95	)	 	(35	)	 	1,261		 	—		 	1,131		
Interest income	 	(14	)	 	10		 	14		 	—		 	10		
Interest expense	 	(87	)	 	(101	)	 	(17	)	 	—		 	(205	)	
Intercompany interest income (expense)	 	358		 	(349	)	 	(9	)	 	—		 	—		
Intercompany other (expense) income	 	(162	)	 	(40	)	 	202		 	—		 	—		
Other income	 	—		 	10		 	41		 	—		 	51		
(Loss) income before taxes	 	—		 	(505	)	 	1,492		 	—		 	987		
Income tax (benefit) expense	 	—		 	(180	)	 	335		 	—		 	155		
(Loss) income before equity in earnings of subsidiaries	 	—		 	(325	)	 	1,157		 	—		 	832		
Equity in earnings of subsidiaries, net of tax	 	801		 	925		 	600		 	(2,326	)	 	—		
Net income	 	801		 	600		 	1,757		 	(2,326	)	 	832		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	31		 	—		 	31		
Net income attributable to Aon shareholders	 	$	801		 	$	600		 	$	1,726		 	$	(2,326	)	 	$	801		

31

Condensed Consolidating Statement of Comprehensive Income

																					
 	 	Three months ended September 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income (loss)	 	$	304		 	$	(136	)	 	$	283		 	$	(137	)	 	$	314		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	7		 	—		 	7		
Net income (loss) attributable to Aon shareholders	 	304		 	(136	)	 	276		 	(137	)	 	307		
Other comprehensive (loss) income, net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	1		 	(1	)	 	—		 	—		
Foreign currency translation adjustments	 	—		 	1		 	(87	)	 	(3	)	 	(89	)	
Post-retirement benefit obligation	 	—		 	7		 	11		 	—		 	18		
Total other comprehensive income (loss)	 	—		 	9		 	(77	)	 	(3	)	 	(71	)	
Equity in other comprehensive loss of subsidiaries, net of tax	 	(68	)	 	(81	)	 	(72	)	 	221		 	—		
Less: Other comprehensive income attributable to noncontrolling interests	 	—		 	—		 	—		 	—		 	—		
Total other comprehensive loss attributable to Aon shareholders	 	(68	)	 	(72	)	 	(149	)	 	218		 	(71	)	
Comprehensive income (loss) attributable to Aon shareholders	 	$	236		 	$	(208	)	 	$	127		 	$	81		 	$	236		

Condensed Consolidating Statement of Comprehensive Income

																					
 	 	Three months ended September 30, 2015	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	295		 	$	234		 	$	662		 	$	(888	)	 	$	303		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	8		 	—		 	8		
Net income attributable to Aon shareholders	 	295		 	234		 	654		 	(888	)	 	295		
Other comprehensive income (loss), net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	(1	)	 	(9	)	 	—		 	(10	)	
Foreign currency translation adjustments	 	—		 	(24	)	 	(205	)	 	—		 	(229	)	
Post-retirement benefit obligation	 	—		 	8		 	10		 	—		 	18		
Total other comprehensive loss	 	—		 	(17	)	 	(204	)	 	—		 	(221	)	
Equity in other comprehensive loss of subsidiaries, net of tax	 	(217	)	 	(196	)	 	(213	)	 	626		 	—		
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	—		 	(4	)	 	—		 	(4	)	
Total other comprehensive loss attributable to Aon shareholders	 	(217	)	 	(213	)	 	(413	)	 	626		 	(217	)	
Comprehensive income attributable to Aon Shareholders	 	$	78		 	$	21		 	$	241		 	$	(262	)	 	$	78		

32

Condensed Consolidating Statement of Comprehensive Income

																					
 	 	Nine months ended September 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	895		 	$	244		 	$	1,703		 	$	(1,921	)	 	$	921		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	27		 	—		 	27		
Net income attributable to Aon shareholders	 	895		 	244		 	1,676		 	(1,921	)	 	894		
Other comprehensive (loss) income, net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	1		 	(12	)	 	—		 	(11	)	
Foreign currency translation adjustments	 	(2	)	 	22		 	(248	)	 	1		 	(227	)	
Post-retirement benefit obligation	 	—		 	23		 	(155	)	 	—		 	(132	)	
Total other comprehensive (loss) income	 	(2	)	 	46		 	(415	)	 	1		 	(370	)	
Equity in other comprehensive loss of subsidiaries, net of tax	 	(369	)	 	(426	)	 	(380	)	 	1,175		 	—		
Less: Other comprehensive income attributable to noncontrolling interests	 	—		 	—		 	—		 	—		 	—		
Total other comprehensive loss attributable to Aon shareholders	 	(371	)	 	(380	)	 	(795	)	 	1,176		 	(370	)	
Comprehensive income (loss) attributable to Aon shareholders	 	$	524		 	$	(136	)	 	$	881		 	$	(745	)	 	$	524		

Condensed Consolidating Statement of Comprehensive Income

																					
 	 	Nine months ended September 30, 2015	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	801		 	$	600		 	$	1,757		 	$	(2,326	)	 	$	832		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	31		 	—		 	31		
Net income attributable to Aon shareholders	 	801		 	600		 	1,726		 	(2,326	)	 	801		
Other comprehensive income (loss), net of tax:	 	 	 	 	 	 	 	 	 	 	
Change in fair value of financial instruments	 	—		 	—		 	(11	)	 	—		 	(11	)	
Foreign currency translation adjustments	 	—		 	(43	)	 	(333	)	 	—		 	(376	)	
Post-retirement benefit obligation	 	—		 	25		 	37		 	—		 	62		
Total other comprehensive loss	 	—		 	(18	)	 	(307	)	 	—		 	(325	)	
Equity in other comprehensive loss of subsidiaries, net of tax	 	(319	)	 	(290	)	 	(308	)	 	917		 	—		
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	—		 	(6	)	 	—		 	(6	)	
Total other comprehensive loss attributable to Aon shareholders	 	(319	)	 	(308	)	 	(609	)	 	917		 	(319	)	
Comprehensive income attributable to Aon Shareholders	 	$	482		 	$	292		 	$	1,117		 	$	(1,409	)	 	$	482		

33

Condensed Consolidating Statement of Financial Position  

																					
 	 	As of September 30, 2016	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
ASSETS	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	—		 	$	1,119		 	$	2,157		 	$	(2,793	)	 	$	483		
Short-term investments	 	—		 	308		 	155		 	—		 	463		
Receivables, net	 	—		 	—		 	2,391		 	—		 	2,391		
Fiduciary assets	 	—		 	—		 	8,710		 	—		 	8,710		
Intercompany receivables	 	63		 	5,740		 	10,320		 	(16,123	)	 	—		
Other current assets	 	—		 	29		 	395		 	—		 	424		
Total Current Assets	 	63		 	7,196		 	24,128		 	(18,916	)	 	12,471		
Goodwill	 	—		 	—		 	8,452		 	—		 	8,452		
Intangible assets, net	 	—		 	—		 	2,038		 	—		 	2,038		
Fixed assets, net	 	—		 	—		 	738		 	—		 	738		
Non-current deferred tax assets	 	154		 	737		 	164		 	(777	)	 	278		
Intercompany receivables	 	381		 	262		 	8,712		 	(9,355	)	 	—		
Prepaid pension	 	—		 	6		 	705		 	—		 	711		
Other non-current assets	 	—		 	126		 	438		 	—		 	564		
Investment in subsidiary	 	12,313		 	17,115		 	9		 	(29,437	)	 	—		
TOTAL ASSETS	 	$	12,911		 	$	25,442		 	$	45,384		 	$	(58,485	)	 	$	25,252		
 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accrued liabilities	 	$	2,865		 	$	18		 	$	1,387		 	$	(2,793	)	 	$	1,477		
Short-term debt and current portion of long-term debt	 	244		 	—		 	6		 	—		 	250		
Fiduciary liabilities	 	—		 	—		 	8,710		 	—		 	8,710		
Intercompany payables	 	134		 	13,716		 	2,273		 	(16,123	)	 	—		
Other current liabilities	 	14		 	61		 	854		 			 	929		
Total Current Liabilities	 	3,257		 	13,795		 	13,230		 	(18,916	)	 	11,366		
Long-term debt	 	4,213		 	1,414		 	283		 	—		 	5,910		
Non-current deferred tax liabilities	 	—		 	—		 	813		 	(777	)	 	36		
Pension, other post-retirement and other post-employment liabilities	 	—		 	1,275		 	412		 	—		 	1,687		
Intercompany payables	 	—		 	8,879		 	476		 	(9,355	)	 	—		
Other non-current liabilities	 	7		 	70		 	682		 	—		 	759		
TOTAL LIABILITIES	 	7,477		 	25,433		 	15,896		 	(29,048	)	 	19,758		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL AON SHAREHOLDERS' EQUITY	 	5,434		 	9		 	29,428		 	(29,437	)	 	5,434		
Noncontrolling interests	 	—		 	—		 	60		 	—		 	60		
TOTAL EQUITY	 	5,434		 	9		 	29,488		 	(29,437	)	 	5,494		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL LIABILITIES AND EQUITY	 	$	12,911		 	$	25,442		 	$	45,384		 	$	(58,485	)	 	$	25,252		

34

Condensed Consolidating Statement of Financial Position

																					
 	 	As of December 31, 2015	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
ASSETS	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	—		 	$	2,083		 	$	1,242		 	$	(2,941	)	 	$	384		
Short-term investments	 	—		 	209		 	147		 	—		 	356		
Receivables, net	 	1		 	—		 	2,733		 	—		 	2,734		
Fiduciary assets	 	—		 	—		 	9,932		 	—		 	9,932		
Intercompany receivables	 	432		 	1,950		 	7,957		 	(10,339	)	 	—		
Other current assets	 	—		 	19		 	310		 	—		 	329		
Total Current Assets	 	433		 	4,261		 	22,321		 	(13,280	)	 	13,735		
Goodwill	 	—		 	—		 	8,448		 	—		 	8,448		
Intangible assets, net	 	—		 	—		 	2,180		 	—		 	2,180		
Fixed assets, net	 	—		 	—		 	765		 	—		 	765		
Intercompany receivables	 	375		 	526		 	8,633		 	(9,534	)	 	—		
Non-current deferred tax assets	 	154		 	756		 	141		 	(817	)	 	234		
Prepaid pension	 	—		 	6		 	1,027		 	—		 	1,033		
Other non-current assets	 	—		 	119		 	557		 	(84	)	 	592		
Investment in subsidiary	 	11,804		 	16,534		 	369		 	(28,707	)	 	—		
TOTAL ASSETS	 	$	12,766		 	$	22,202		 	$	44,441		 	$	(52,422	)	 	$	26,987		
 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accrued liabilities	 	$	2,988		 	$	45		 	$	1,680		 	$	(2,941	)	 	$	1,772		
Short-term debt and current portion of long-term debt	 	—		 	550		 	12		 	—		 	562		
Fiduciary liabilities	 	—		 	—		 	9,932		 	—		 	9,932		
Intercompany payables	 	167		 	9,518		 	654		 	(10,339	)	 	—		
Other current liabilities	 	47		 	56		 	716		 	—		 	819		
Total Current Liabilities	 	3,202		 	10,169		 	12,994		 	(13,280	)	 	13,085		
Long-term debt	 	3,451		 	1,412		 	275		 	—		 	5,138		
Non-current deferred tax liabilities	 	—		 	—		 	855		 	(818	)	 	37		
Pension, other post-retirement and other post-employment liabilities	 	—		 	1,313		 	482		 	—		 	1,795		
Intercompany payables	 	—		 	8,799		 	735		 	(9,534	)	 	—		
Other non-current liabilities	 	7		 	140		 	705		 	(83	)	 	769		
TOTAL LIABILITIES	 	6,660		 	21,833		 	16,046		 	(23,715	)	 	20,824		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL AON SHAREHOLDERS' EQUITY	 	6,106		 	369		 	28,338		 	(28,707	)	 	6,106		
Noncontrolling interests	 	—		 	—		 	57		 	—		 	57		
TOTAL EQUITY	 	6,106		 	369		 	28,395		 	(28,707	)	 	6,163		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL LIABILITIES AND EQUITY	 	$	12,766		 	$	22,202		 	$	44,441		 	$	(52,422	)	 	$	26,987		

35

Condensed Consolidating Statement of Cash Flows

																					
 	 	Nine months ended September 30, 2016	
 	 	Aon	 	Aon	 	Other
Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
CASH FLOWS FROM OPERATING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
CASH PROVIDED BY (USED FORD) OPERATING ACTIVITIES	 	$	219		 	$	(664	)	 	$	1,920		 	$	—		 	$	1,475		
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Proceeds from investments	 	—		 	19		 	12		 	—		 	31		
Purchases of investments	 	—		 	(25	)	 	(22	)	 	—		 	(47	)	
Net purchases of short-term investments - non-fiduciary	 	—		 	(99	)	 	(9	)	 	—		 	(108	)	
Acquisition of businesses, net of cash acquired	 	—		 	—		 	(198	)	 	—		 	(198	)	
Proceeds from sale of businesses	 	—		 	—		 	104		 	—		 	104		
Capital expenditures	 	—		 	—		 	(153	)	 	—		 	(153	)	
CASH USED FOR INVESTING ACTIVITIES	 	—		 	(105	)	 	(266	)	 	—		 	(371	)	
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Share repurchase	 	(1,037	)	 	—		 	—		 	—		 	(1,037	)	
Advances from (to) affiliates	 	166		 	356		 	(670	)	 	148		 	—		
Issuance of shares for employee benefit plans	 	(70	)	 	—		 	—		 	—		 	(70	)	
Issuance of debt	 	1,588		 	1,141		 	—		 	—		 	2,729		
Repayment of debt	 	(608	)	 	(1,692	)	 	(8	)	 	—		 	(2,308	)	
Cash dividends to shareholders	 	(258	)	 	—		 	—		 	—		 	(258	)	
Noncontrolling interests and other financing activities	 	—		 	—		 	(71	)	 	—		 	(71	)	
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES	 	(219	)	 	(195	)	 	(749	)	 	148		 	(1,015	)	
 	 	 	 	 	 	 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	—		 	—		 	10		 	—		 	10		
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	 	—		 	(964	)	 	915		 	148		 	99		
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	 	—		 	2,083		 	1,242		 	(2,941	)	 	384		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	—		 	$	1,119		 	$	2,157		 	$	(2,793	)	 	$	483		

36

Condensed Consolidating Statement of Cash Flows

																					
 	 	Nine months ended September 30, 2015	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions) 	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
CASH FLOWS FROM OPERATING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	 	$	251		 	$	(624	)	 	$	1,668		 	$	—		 	$	1,295		
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Proceeds from investments	 	—		 	3		 	20		 	—		 	23		
Purchases of investments	 	—		 	(1	)	 	(2	)	 	—		 	(3	)	
Net (purchases) sales of short-term investments - non-fiduciary	 	—		 	(51	)	 	42		 	—		 	(9	)	
Acquisition of businesses, net of cash acquired	 	—		 	—		 	(26	)	 	—		 	(26	)	
Proceeds from sale of businesses	 	—		 	—		 	54		 	—		 	54		
Capital expenditures	 	—		 	—		 	(225	)	 	—		 	(225	)	
CASH USED FOR INVESTING ACTIVITIES	 	—		 	(49	)	 	(137	)	 	—		 	(186	)	
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	
Share repurchase	 	(1,150	)	 	—		 	—		 	—		 	(1,150	)	
Advances from (to) affiliates	 	630		 	451		 	(1,616	)	 	535		 	—		
Issuance of shares for employee benefit plans	 	(148	)	 	—		 	—		 	—		 	(148	)	
Issuance of debt	 	768		 	2,720		 	6		 	—		 	3,494		
Repayment of debt	 	(111	)	 	(2,735	)	 	(14	)	 	—		 	(2,860	)	
Cash dividends to shareholders	 	(240	)	 	—		 	—		 	—		 	(240	)	
Noncontrolling interests and other financing activities	 	—		 	—		 	(26	)	 	—		 	(26	)	
CASH (USED FOR) PROVIDED BY
FINANCING ACTIVITIES	 	(251	)	 	436		 	(1,650	)	 	535		 	(930	)	
 	 	 	 	 	 	 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	—		 	—		 	(155	)	 	—		 	(155	)	
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	 	—		 	(237	)	 	(274	)	 	535		 	24		
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	 	—		 	2,727		 	1,361		 	(3,714	)	 	374		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	—		 	$	2,490		 	$	1,087		 	$	(3,179	)	 	$	398		

37

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
 
EXECUTIVE SUMMARY OF THIRD QUARTER 2016 FINANCIAL RESULTS
 
During the third quarter of 2016 , we continued to face certain headwinds that adversely impacted our business in prior periods. These headwinds included a negative market impact in our Reinsurance business in Risk Solutions and fragile macroeconomic conditions in various regions globally.
 
The following is a summary of our third quarter and first nine months of 2016 financial results:

•	For the third quarter of 2016 , revenue increased $4 million to $2.7 billion compared to the prior year period due primarily to organic revenue growth of 4% , which was offset by a 2% unfavorable impact from foreign currency exchange rates and a 2% decrease in commissions and fees related to divestitures, net of acquisitions. For the first nine months ended September 30, 2016 , revenue decreased 1% compared to the prior year period due primarily to a 2% unfavorable impact from foreign currency exchange rates and a 2% decrease in commissions and fees related to net divestitures, partially offset by organic revenue growth of 3% . In Risk Solutions, organic revenue growth in the third quarter and first nine months of 2016 was driven by strong organic growth in Retail brokerage, including growth in both the Americas and International businesses, as well as modest growth in Reinsurance compared to the prior year periods. The HR Solutions segment had strong organic growth in both Consulting and Outsourcing for the third quarter and modest organic revenue growth for the first nine months when compared to the prior year periods.	

•	Operating expenses for the third quarter of 2016 were $2.3 billion , a decrease of $5 million compared to the prior year period. The decrease was primarily due to a $50 million favorable impact from foreign currency translation, a $41 million decrease in expenses related to divestitures, net of acquisitions, and a $6 million decrease in intangible asset amortization, partially offset by an increase in expense to support 4% organic revenue growth, an unfavorable impact from the timing of certain compensation expenses in the Risk Solutions segment, an increase in errors and omissions expenses, and $7 million of certain legacy information technology contract costs. Operating expenses for the first nine months of 2016 decreased by $236 million compared to the prior year period primarily due to a $181 million favorable impact from foreign currency exchange rates, a $176 million decrease in expense related to certain legacy litigation settlements in the prior year period, a $134 million decrease in expenses related to acquisitions, net of divestitures, and a $30 million decrease in intangible asset amortization, partially offset by a $62 million increase in expense related to certain pension settlements, $20 million of transaction and portfolio repositioning related costs in HR Solutions associated with the sale of certain businesses, an increase in expense to support the 3% organic growth, and $7 million of certain legacy information technology contract costs.	

•	Operating margin increased to 15.4% in the third quarter 2016 from 15.1% in the prior year quarter. Operating Margin for the first nine months of 2016 was 15.4% as compared to 13.5% for the same period in 2015 . The increase in operating margin for the third quarter and first nine months of 2016 was driven by organic revenue growth of 3% and return on investments, partially offset by an increase in expense due to the factors listed above. Operating margin for Risk Solutions remained flat at 19.2% for the third quarter 2016 as compared to the third quarter 2015 and increased 210 basis points from 18.7% for the first nine months of 2015 to 20.8% for the first nine months of 2016 . Operating margin for HR Solutions increased 30 basis points from 12.6% in the third quarter 2015 to 12.9% in the third quarter 2016 and 120 basis points from 8.3% for the first nine months of 2015 to 9.5% for the first nine months of 2016 .	

•	Due to the factors set forth above, Net income attributable to Aon shareholders increased $12 million , or 4% , to $307 million for the third quarter 2016 compared to the third quarter 2015 . During the first nine months of 2016 , Net income attributable to shareholders increased $93 million or 12% , to $894 million compared to the first nine months of 2015 .	

•	Cash flow provided by operating activities was $1,475 million for the first nine months of 2016 , an increase of $180 million from $1,295 million provided by operating activities in the first nine months of 2015 . The increase was driven by lower pension contributions, an increase in net income, underlying working capital improvements, and lower cash tax payments.	

•	Subsequent to the close of the quarter, the Company announced it had entered into an agreement to acquire Stroz Friedberg, a leading global risk management firm, strengthening Aon Risk Solutions' ability to serve clients as the global leader in cyber risk mitigation. Aon expects to recognize approximately $6 million in transaction costs related to this acquisition in the fourth quarter of 2016.	

38

We focus on four key non-GAAP metrics that we communicate to shareholders: organic revenue, adjusted operating margins, 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 for the third quarter of 2016 :

•	Organic revenue growth, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Organic Revenue," was 4% for the third quarter and 3% for the first nine months of 2016 , an increase over 2% organic growth in the prior year third quarter and first nine months of 2015 . In both periods, Risk Solutions organic revenue growth was driven by strong growth in Retail brokerage across both the Americas and International businesses, as well as modest growth in Reinsurance organic revenue. HR Solutions had strong organic revenue growth in both Consulting and Outsourcing for the third quarter and modest organic revenue growth for the first nine months of 2016 .	

•	Adjusted operating margin, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Adjusted Operating Margin," was 18.0% for Aon overall, 20.9% for the Risk Solutions segment, and 17.1% for the HR Solutions segment for the third quarter 2016 .  Adjusted operating margin was 17.9% for Aon overall, 20.8% for the Risk Solutions segment, and 17.4% for the HR Solutions segment for the third quarter 2015 . For the first nine months of 2016 , adjusted operating margin was 18.6% for Aon overall, 23.4% for the Risk Solutions segment, and 14.0% for the HR Solutions operating segment. For the first nine months of 2015 , adjusted operating margin was 18.4% for Aon overall, 22.8% for the Risk Solutions segment, and 14.7% for the HR Solutions segment. The increase in adjusted operating margin for the Risk Solutions segment in the third quarter of 2016 as compared to the prior year quarter primarily reflects organic revenue growth of 3% , an 80 basis point favorable impact from foreign currency exchange rates, and a return on investments in data and analytics, partially offset by an unfavorable impact from the timing of certain compensation expenses and a 50 basis point unfavorable impact from an increase in errors and omissions expenses. The increase in adjusted operating margin for the Risk Solutions segment for the first nine months 2016 as compared to the prior year period primarily reflects organic revenue growth of 3% , a 50 basis point favorable impact from foreign currency exchange rates, and a return on investments in data and analytics, partially offset by an unfavorable impact from the timing of certain compensation expenses. In the HR Solutions segment in the third quarter of 2016 , the operating margin decline compared to the prior year quarter was primarily driven by a 70 basis point unfavorable impact related to previous portfolio repositioning activity, a 70 basis point unfavorable impact related to certain legacy information technology contract costs, and a 20 basis point unfavorable impact from foreign currency translation, partially offset by organic revenue growth of 4% . For the first nine months of 2016 , the decrease in adjusted operating margin as compared to the prior year period in the HR Solutions segment was primarily driven by an unfavorable impact from foreign currency exchange rates, an unfavorable impact related to previous portfolio repositioning activity, and certain legacy information technology contract costs, partially offset by organic growth of 3% .	

•	Adjusted diluted earnings per share from net income attributable to Aon's shareholders, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Adjusted Diluted Earnings per Share," was $1.29 per share in the third quarter and $4.04 per share in the first nine months of 2016 , compared to $1.24 per share in the third quarter and $3.92 per share in the first nine months of 2015 .	

•	Free cash flow, a non-GAAP measure as defined under the caption "Review of Consolidated Results — Free Cash Flow," increased in the first nine months of 2016 $252 million , or 24% , to $1,322 million from the prior year period, driven by a $180 million increase in cash flow from operations and a decrease of $72 million in capital expenditures.	

39

REVIEW OF CONSOLIDATED RESULTS
 
Summary of Results
 
Our consolidated results of operations follow (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Revenue:	 		 	 		 	 	 	 	
Commissions, fees and other	$	2,740		 	$	2,736		 	$	8,288		 	$	8,378		
Fiduciary investment income	6		 	6		 	16		 	16		
Total revenue	2,746		 	2,742		 	8,304		 	8,394		
Expenses:	 		 	 		 	 	 	 	
Compensation and benefits	1,611		 	1,644		 	4,948		 	4,980		
Other general expenses	713		 	685		 	2,079		 	2,283		
Total operating expenses	2,324		 	2,329		 	7,027		 	7,263		
Operating income	422		 	413		 	1,277		 	1,131		
Interest income	1		 	3		 	6		 	10		
Interest expense	(70	)	 	(72	)	 	(212	)	 	(205	)	
Other income	9		 	8		 	27		 	51		
Income before income taxes	362		 	352		 	1,098		 	987		
Income taxes	48		 	49		 	177		 	155		
Net income	314		 	303		 	921		 	832		
Less: Net income attributable to noncontrolling interests	7		 	8		 	27		 	31		
Net income attributable to Aon shareholders	$	307		 	$	295		 	$	894		 	$	801		
 
Revenue
 
Total revenue increased by $4 million in the third quarter 2016 compared to the third quarter 2015 .  This change resulted from a $26 million increase in Risk Solutions and a $23 million decrease in HR Solutions, excluding intersegment eliminations. The results of the Risk Solutions segment reflected 3% organic growth in commissions and fees and a 1% increase in fees and commissions related to acquisitions, net of divestitures, partially offset by a 2% unfavorable impact from foreign currency exchange rates. The decrease in HR Solutions revenue was driven by a 4% decrease in fees and commissions related to net divestitures and a 2% unfavorable impact from foreign currency exchange rates, partially offset by 4% organic revenue growth.

First the first nine months of 2016 , revenue decreased 1% , or $90 million , compared to the prior year period. This change consists of a $17 million increase in the Risk Solutions segment and a $111 million decrease in the HR Solutions segment. The results of the Risk Solutions segment reflected 3% organic growth in commissions and fees, partially offset by a 3% unfavorable impact from foreign currency exchange rates. The decrease in HR Solutions revenue was driven by a 5% decrease in fees and commissions related to net divestitures and a 2% unfavorable impact from foreign currency exchange rates, partially offset by 3% organic growth.

Compensation and Benefits
 
Compensation and benefits decreased $33 million , or 2% , in the third quarter of 2016 compared to the third quarter 2015 . This decrease was primarily driven by a $34 million favorable impact from foreign currency exchange rates and a $27 million decrease in expenses related to net divestitures, partially offset by an increase in expense associated with 4% organic revenue growth and the unfavorable timing of certain compensation expenses in the Risk Solutions segment.

Compensation and benefits decreased $32 million compared to the first nine months of 2015 . The decrease was primarily driven by a $126 million favorable impact from foreign currency exchange rates and an $88 million favorable impact related to net divestitures, partially offset by a $62 million increase in expenses related to certain pension settlements, $20 million of transaction and portfolio repositioning costs primarily associated with the sale of certain businesses, and an increase in expense to support 3% organic growth.

40

Other General Expenses
 
Other general expenses in the third quarter of 2016 increased $28 million , or 4% , compared to the third quarter 2015 . This increase was due primarily to an increase in expense to support 4% organic revenue growth, an increase in errors and omissions expenses, and $7 million of certain legacy information technology contract costs, partially offset by a $16 million favorable impact from foreign currency exchange rates, a $14 million decrease in expenses related to net divestitures, and a $6 million decrease in intangible asset amortization.

Other general expenses in the first nine months of 2016 decreased $204 million , or 9% , compared to the first nine months of 2015 . This decrease was due primarily to a $176 million decrease in expense related to certain legacy litigation settlements in the prior year quarter, a $55 million favorable impact from foreign currency exchange rates, a $46 million decrease in expenses related to net divestitures, and a $30 million decrease in intangible asset amortization, partially offset by an increase in expense to support 3% organic revenue growth and $7 million of certain legacy information technology contract costs.

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 third quarter 2016 , Interest income decreased $2 million to $1 million compared to the third quarter 2015 . For the first nine months of 2016 , Interest income decreased $4 million to $6 million compared to the first nine months of 2015 .

Interest Expense
 
Interest expense, which represents the cost of our debt obligations, decreased $2 million during the third quarter 2016 compared to the third quarter of 2015 and increased $7 million during the first nine months compared to the first nine months of 2015 . The increase in interest expense for the first nine months of 2016 is due to the overlap of $750 million of notes issued in the first quarter of 2016 for notes that matured in the second quarter of 2016.

Other Income

Other income was $9 million for the third quarter of 2016 , compared to $8 million for the third quarter of 2015 .  Other income for both the third quarter of 2016 includes net gains on certain long-term investments. Other income of $8 million in the third quarter 2015 primarily includes $16 million of foreign currency remeasurement gains, partially offset by losses on certain long-term investments.

Other income was $27 million for the first nine months of 2016 , compared to $51 million for the first nine months of 2015 .  Other income for the first nine months of 2016 includes $41 million of gains on the sale of certain businesses, partially offset by a $14 million foreign currency remeasurement net losses. Other income of $51 million in the first nine months of 2015 primarily includes $20 million of gains on the sale of businesses, and $33 million of foreign currency remeasurement net gains.

Income before Income Taxes
 
Income before income taxes for the third quarter of 2016 was $362 million , a 3% increase from $352 million in the third quarter of 2015 . Income before income taxes for the first nine months of 2016 was $1,098 million , an 11% increase from $987 million from the first nine months of 2015 .

Income Taxes
 
The effective tax rate on net income was 13.2% and 14.0% for the quarters ended September 30, 2016 and 2015 , respectively. The effective tax rate on net income was 16.1% and 15.8% for the nine months ended September 30, 2016 and 2015 , respectively. The effective tax rate for the nine months ended September 30, 2016 was impacted by changes in the geographical distribution of income, including a reduction in forecasted U.S. income resulting from non-cash pension expenses expected in Q4, and certain discrete items.

41

Net Income Attributable to Aon Shareholders  

Net income attributable to Aon shareholders for the three months ended September 30, 2016 increased to $307 million , or $1.14 per diluted share, from $295 million , or $1.04 per diluted share, in the prior year period. Net income attributable to Aon shareholders for the first nine months of 2016 increased to $894 million , or $3.30 per diluted share, from $801 million , or $2.80 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 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
 
We use supplemental information related to organic revenue to help us and our investors evaluate business growth from existing operations.  Organic revenue is a non-GAAP measure that includes the impact of intersegment and intrasegment activity and excludes the impact of foreign exchange rate changes, acquisitions, divestitures, transfers between business units, 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.  Reconciliations of this non-GAAP measure, organic revenue growth percentages, to the reported Commissions, fees, have been provided under the "Review by Segment" caption below.
 
Adjusted Operating Margin
 
We use adjusted operating margin as a non-GAAP measure of core operating performance of our Risk Solutions and HR Solutions segments.  Adjusted operating margin excludes the impact of certain items, including intangible asset amortization, 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.

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

												
 	Three months ended September 30, 2016	
 	Total Aon (1)	 	Risk Solutions	 	HR Solutions	
Revenue — U.S. GAAP	$	2,746		 	$	1,715		 	$	1,041		
Operating income — U.S. GAAP	$	422		 	$	330		 	$	134		
Intangible asset amortization	72		 	28		 	44		
Pension Settlement	—		 	—		 	—		
Operating income — as adjusted	$	494		 	$	358		 	$	178		
Operating margins — U.S. GAAP	15.4	%	 	19.2	%	 	12.9	%	
Operating margins — as adjusted	18.0	%	 	20.9	%	 	17.1	%	
 	 	 	 	 	 	
 	Nine months ended September 30, 2016	
 	Total Aon (1)	 	Risk Solutions	 	HR Solutions	
Revenue — U.S. GAAP	$	8,304		 	$	5,434		 	$	2,902		
Operating income — U.S. GAAP	$	1,277		 	$	1,132		 	$	276		
Intangible asset amortization	207		 	77		 	130		
Pension Settlement	62		 	61		 	1		
Operating income — as adjusted	$	1,546		 	$	1,270		 	$	407		
Operating margins — U.S. GAAP	15.4	%	 	20.8	%	 	9.5	%	
Operating margins — as adjusted	18.6	%	 	23.4	%	 	14.0	%	

42

	
												
 	Three months ended September 30, 2015	
 	Total Aon (1)	 	Risk Solutions	 	HR Solutions	
Revenue — U.S. GAAP	$	2,742		 	$	1,689		 	$	1,064		
Operating income — U.S. GAAP	$	413		 	$	324		 	$	134		
Intangible asset amortization	78		 	27		 	51		
Legacy Litigation	—		 	—		 	—		
Operating income — as adjusted	$	491		 	$	351		 	$	185		
Operating margins — U.S. GAAP	15.1	%	 	19.2	%	 	12.6	%	
Operating margins — as adjusted	17.9	%	 	20.8	%	 	17.4	%	
 	 	 	 	 	 	
 	Nine months ended September 30, 2015	
 	Total Aon (1)	 	Risk Solutions	 	HR Solutions	
Revenue — U.S. GAAP	$	8,394		 	$	5,417		 	$	3,013		
Operating income — U.S. GAAP	$	1,131		 	$	1,015		 	$	249		
Intangible asset amortization	237		 	83		 	154		
Legacy Litigation	176		 	137		 	39		
Operating income — as adjusted	$	1,544		 	$	1,235		 	$	442		
Operating margins — U.S. GAAP	13.5	%	 	18.7	%	 	8.3	%	
Operating margins — as adjusted	18.4	%	 	22.8	%	 	14.7	%	
 	 	 	 	 	 	
(1) Includes unallocated expenses and the elimination of inter-segment revenue.	

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 impact of intangible asset amortization, 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.

The effective tax rates used in the U.S. GAAP financial statements were 13.2% and 14.0% for the three months ended September 30, 2016 and 2015 , respectively, and 16.1% and 15.8% for the nine months ended September 30, 2016 and 2015 , respectively. After adjusting to exclude the applicable tax impact associated with non-cash pension expenses, the adjusted effective tax rates for the third quarter and first nine months of 2016 were 18.2% and 18.0%, respectively. After adjusting to exclude the applicable tax impact associated with expenses for legacy litigation, the adjusted effective tax rates for the third quarter and first nine months of 2015 were 16.0% and 17.8%, respectively.

43

Reconciliations of this non-GAAP measure to the reported diluted earnings per share are as follows (in millions, except per share data): 

												
 	Three months ended September 30, 2016	
 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income	$	422		 	$	72		 	$	494		
Interest income	1		 	—		 	1		
Interest expense	(70	)	 	—		 	(70	)	
Other income	9		 	—		 	9		
Income before income taxes	362		 	72		 	434		
Income taxes	48		 	31		 	79		
Net income	314		 	41		 	355		
Less: Net income attributable to noncontrolling interests	7		 	—		 	7		
Net income attributable to Aon shareholders	$	307		 	$	41		 	$	348		
Diluted earnings per share	$	1.14		 	$	0.15		 	$	1.29		
Weighted average ordinary shares outstanding — diluted	269.6		 	—		 	269.6		
 	 	 	 	 	 	
 	Nine months ended September 30, 2016	
 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income	$	1,277		 	$	269		 	$	1,546		
Interest income	6		 	—		 	6		
Interest expense	(212	)	 	—		 	(212	)	
Other income	27		 	—		 	27		
Income before income taxes	1,098		 	269		 	1,367		
Income taxes	177		 	69		 	246		
Net income	921		 	200		 	1,121		
Less: Net income attributable to noncontrolling interests	27		 	—		 	27		
Net income attributable to Aon shareholders	$	894		 	$	200		 	$	1,094		
Diluted earnings per share	$	3.30		 	$	0.74		 	$	4.04		
Weighted average ordinary shares outstanding — diluted	271.0		 	—		 	271.0		

44

	
												
 	Three months ended September 30, 2015	
 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income	$	413		 	$	78		 	$	491		
Interest income	3		 	—		 	3		
Interest expense	(72	)	 	—		 	(72	)	
Other income	8		 	—		 	8		
Income before income taxes	352		 	78		 	430		
Income taxes	49		 	20		 	69		
Net income	303		 	58		 	361		
Less: Net income attributable to noncontrolling interests	8		 	—		 	8		
Net income attributable to Aon shareholders	$	295		 	$	58		 	$	353		
Diluted earnings per share	$	1.04		 	$	0.20		 	$	1.24		
Weighted average ordinary shares outstanding — diluted	283.8		 	—		 	283.8		
 	 	 	 	 	 	
 	Nine months ended September 30, 2015	
 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating income	$	1,131		 	$	413		 	$	1,544		
Interest income	10		 	—		 	10		
Interest expense	(205	)	 	—		 	(205	)	
Other income	51		 	—		 	51		
Income before income taxes	987		 	413		 	1,400		
Income taxes	155		 	94		 	249		
Net income	832		 	319		 	1,151		
Less: Net income attributable to noncontrolling interests	31		 	—		 	31		
Net income attributable to Aon shareholders	$	801		 	$	319		 	$	1,120		
Diluted earnings per share	$	2.80		 	$	1.12		 	$	3.92		
Weighted average ordinary shares outstanding — diluted	285.9		 	—		 	285.9		

Free Cash Flow

We use free cash flow, defined as cash flow provided by operations minus capital expenditures, as a non-GAAP measure of our core operating performance. 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 cash flow provided by operations is as follows (in millions):

								
 	Nine months ended September 30,	
 	2016	 	2015	
Cash provided by operating activities - U.S. GAAP	$	1,475		 	$	1,295		
Less: Capital expenditures	(153	)	 	(225	)	
Free cash flow	$	1,322		 	$	1,070		

Impact of Foreign Exchange Rate Fluctuations
 
Because we conduct business in more than 120 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. 

45

Translating prior year quarter results at current quarter foreign exchange rates, currency fluctuations had a favorable impact of approximately $0.02 and an unfavorable impact of $0.03 on net income per diluted share during the three and nine months ended September 30, 2016 , respectively, and an unfavorable impact of $0.08 and $0.29 on adjusted net income per diluted share during the three and nine months ended September 30, 2015 , respectively. Currency fluctuations had a favorable impact of $0.01 and an unfavorable impact of $0.04 on adjusted net income per diluted share during the three and nine months ended September 30, 2016 , respectively, and an unfavorable impact of $0.09 and $0.31 on adjusted net income per diluted share during the three and nine months ended September 30, 2015 , respectively. 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.

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 various credit facilities.  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 nine months ended September 30, 2016 increased $180 million , or 14% , to $1,475 million from the prior year period. This amount represents net income reported by the Company, as adjusted for gains or losses on sales of business, financial instruments and foreign exchange, and our non-cash expenses, which include share-based compensation, depreciation, and amortization, 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 increase from the prior year was primarily driven by increased net income and reductions in pension contributions, as well as working capital improvements.

Pension contributions were $91 million for the nine months ended September 30, 2016 as compared to $164 million for the nine months ended September 30, 2015 . For the remainder of 2016 , we expect to contribute approximately $59 million to our pension plans, with the majority attributable to non-U.S. pension plans, which are subject to changes in foreign exchange rates.
 
We expect cash generated by operations for 2016 to be sufficient to service our debt and contractual obligations, finance capital expenditures, continue purchases of shares under the Repurchase Programs, 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 facilities to accommodate any timing differences in cash flows.  We have committed credit facilities totaling $1.3 billion , of which all $1.3 billion was available at September 30, 2016 , and can access these facilities 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 used for investing activities was $371 million during the nine months ended September 30, 2016 . The primary drivers of the cash flow used for investing activities were $153 million of capital expenditures, $198 million of acquisitions of businesses, net of cash acquired, $108 million in net purchases of short-term investments, and $16 million of net purchases of investments, offset by $104 million in proceeds from the sale of businesses. The gains and losses corresponding to cash flows provided by the net sales of long-term investments are recognized in Other income in the Condensed Consolidated Statements of Income.

46

Cash flow used for investing activities was $186 million during the nine months ended September 30, 2015 . The primary drivers of the cash flow used for investing activities were $9 million in net purchases of short-term investments, $225 million of capital expenditures, and $26 million of acquisitions of businesses, net of cash acquired, offset by $54 million in proceeds from the sale of businesses and $20 million of net proceeds from investments.
 
Financing Activities
 
Cash flow used for financing activities during the nine months ended September 30, 2016 was $1,015 million . The primary drivers of the cash flow used for financing activities were $1,037 million of share repurchases, $258 million of dividends paid to shareholders, $70 million in net cash payments related to issuance of shares, and $71 million of transactions with noncontrolling interests and other financing activities, partially offset by $421 million of issuances of debt, net of repayments .
 
Cash flow used for financing activities during the nine months ended September 30, 2015 was $930 million . The primary drivers of cash flow used for financing activities were $1,150 million of share repurchases, $240 million of dividends paid to shareholders, $148 million in net cash payments related to issuance of shares, and $26 million of transactions with noncontrolling interests and other financing activities, partially offset by $634 million of issuances of debt, net of repayments.
 
As a U.K. incorporated company, 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 September 30, 2016 and December 31, 2015 , we had distributable reserves in excess of $1.9 billion and $2.1 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.
 
Cash and Investments
 
At September 30, 2016 , our cash and cash equivalents and short-term investments were $946 million , an increase of $206 million from December 31, 2015 . This increase was primarily related to $1,475 million cash provided by operations and $421 million in proceeds from debt issuances, net of repayments, and $104 million in proceeds from the sale of businesses, partially offset by $1,037 million in share repurchases, $153 million of capital expenditures, $198 million in acquisitions of businesses, net of cash acquired, and $258 million in dividends, and $108 million in net sales of short-term investments.  Of the total balance as of September 30, 2016 , $85 million was restricted as to its use, which was comprised of $56 million 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 September 30, 2016 , $1.6 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 $622 million were held in other countries. We maintain multicurrency cash pools with a third-party banks in which various Aon entities participate. Individual Aon entities are permitted to overdraw on their individual accounts provided the overall global balance does not fall below zero. At September 30, 2016 , 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 as of December 31, 2015 , $105 million was restricted as to its use, which was comprised of $65 million of operating funds in the U.K., as required by the Financial Conduct Authority, and $40 million held as collateral for various business purposes. At December 31, 2015 , $2.6 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.
 
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 $3.8 billion and $3.4 billion at September 30, 2016 and December 31, 2015 , respectively, and fiduciary receivables of $4.9 billion and $6.5 billion at September 30, 2016 and December 31, 2015 , 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.

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As disclosed in Note 13 "Fair Value Measurements and Financial Instruments" of the 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.  The Company's investments in money market funds are carried at cost as an approximation of fair value.  Consistent with market convention, we consider cost a practical and expedient measure of fair value.  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 September 30, 2016 , our investments in money market funds had a fair value of $1.5 billion and are reported as Short-term investments or Fiduciary assets in the Condensed Consolidated Statements of Financial Position depending on their nature.

The following table summarizes our Fiduciary assets, non-fiduciary Cash and cash equivalents, and Short-term investments at September 30, 2016 (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	 	$	483		 	$	—		 	$	2,718		 	$	3,201		
Money market funds  	 	—		 	463		 	1,062		 	1,525		
Other investments due within one year	 	—		 	—		 	—		 	—		
Cash and short-term investments	 	483		 	463		 	3,780		 	4,726		
Fiduciary receivables	 	—		 	—		 	4,930		 	4,930		
Total	 	$	483		 	$	463		 	$	8,710		 	$	9,656		

Share Repurchase Program
 
In April 2012, our Board of Directors authorized the 2012 Share Repurchase Program under which up to $5.0 billion of Class A Ordinary Shares may be repurchased. In November 2014, our Board of Directors authorized the 2014 Share Repurchase Program pursuant to which up to $5.0 billion may be repurchased in addition to the $5.0 billion authorized under the 2012 Share Repurchase Program. Under each program, shares may be repurchased through the open market or in privately negotiated transactions, based on prevailing market conditions, funded from available capital.

In the third quarter of 2016, the Company repurchased 2.7 million shares at an average price per share of $110.26 for a total cost of $301 million. During the nine months ended September 30, 2016, we repurchased 10.4 million shares at an average price per share of $101.16 for a total cost of approximately $1.1 billion. Included in the 2.7 million shares and 10.4 million shares repurchased during the three and nine months ended September 30, 2016 was 128 thousand shares that did not settle until October 2016. These shares were settled at an average price per share of $112.00 and total cost of $14.3 million. In the third quarter of 2015 , the Company repurchased 6.3 million shares at an average price per share of $95.75 for a total cost of approximately $600 million . During the nine months ended September 30, 2015, we repurchased 11.7 million shares at an average price per share of $98.00 for a total cost of approximately $1.15 billion.

In August 2015, the $5 billion of Class A Ordinary Shares authorized under the 2012 Share Repurchase Program was exhausted. At September 30, 2016 , the remaining authorized amount for share repurchase under the 2014 Share Repurchase Program is approximately $3.0 billion . Under the Repurchase Programs, the Company has repurchased a total of 88.4 million shares for an aggregate cost of approximately $7.0 billion .
 
For information regarding share repurchases made during the third quarter of 2016 , see Part II, Item 2 of this report.

Borrowings
 
Total debt at September 30, 2016 was $6.2 billion , which represents an increase of $460 million compared to December 31, 2015 . This increase is primarily due to the issuance of $750 million of 3.875% Senior Notes due December 2025 and an increase in commercial paper outstanding of $194 million , partially offset by the repayment of $500 million of 3.125% Senior Notes due May 2016, which matured in May 2016. Commercial paper activity during the three and nine months ended September 30, 2016 included total issuances of $0.7 billion and $2.0 billion , respectively, compared to $1.0 billion and $2.9 billion for the three and nine months ended September 30, 2015 , respectively. The proceeds of the commercial paper issuances were used primarily for short-term working capital needs.

48

On March 1, 2016, Aon plc issued $750 million of 3.875% Senior Notes due December 2025. We used the proceeds of the issuance for general corporate purposes.

On May 27, 2016, $500 million of 3.125% Senior Notes due 2016 issued by Aon Corporation matured and were repaid.
 
Credit Facilities
 
As of September 30, 2016 , Aon plc had two primary committed credit facilities outstanding: its $400 million U.S. credit facility expiring in March 2017 (the "2017 Facility") and its $900 million multi-currency U.S. credit facility originally expiring in February 2020. Effective February 2, 2016, the $900 million multi-currency U.S. credit facility terms were extended for one year and will now expire on February 2, 2021 (the "2021 Facility"). Each of these facilities is intended to support our commercial paper obligations and our general working capital needs.  In addition, each of these facilities 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.  At September 30, 2016 , we had no borrowings under, and were in compliance with, these financial covenants and all other covenants contained in the 2017 Facility and the 2021 Facility during the three and nine months ended September 30, 2016 . Aon is currently evaluating its alternatives in connection with its expiring 2017 Facility.
Our total debt-to-EBITDA ratio at September 30, 2016 and 2015 based on a rolling twelve months is calculated as follows:

								
 	Twelve months ended	
 	September 30,	
 	2016	 	2015	
Net income	$	1,511		 	$	1,299		
Interest expense	280		 	272		
Income taxes	289		 	269		
Depreciation of fixed assets	231		 	228		
Amortization of intangible assets	284		 	326		
Total EBITDA	$	2,595		 	$	2,394		
 	 	 	 	
Total Debt	$	6,160		 	$	6,126		
 	 	 	 	
Total debt-to-EBITDA ratio	2.4	 	2.6	
We use EBITDA, 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 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.

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Rating Agency Ratings
 
The major rating agencies' ratings of our debt at October 28, 2016 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.
 
Letters of Credit and Other Guarantees
 
We had total LOCs outstanding of approximately $91 million at September 30, 2016 , compared to $58 million at December 31, 2015 . These letters of credit 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 issued 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 $82 million at September 30, 2016 , compared to $104 million at December 31, 2015 .
 
We have provided commitments to fund certain limited partnerships in which we have an interest in the event that the general partners request funding.  Some of these commitments have specific expiration dates and the maximum potential funding under these commitments was $10 million at September 30, 2016 compared to $12 million at June 30, 2016 and December 31, 2015 . During the three and nine months ended September 30, 2016 , the company funded $2 million million of these commitments.

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 September 30, 2016 , our net assets were $5.5 billion , representing total assets minus total liabilities, a decrease from $6.2 billion at December 31, 2015 . The decrease was due primarily to $1,051 million of share repurchases, $258 million of dividend payments, and an increase of $370 million in Accumulated other comprehensive loss related primarily to foreign currency translation adjustment and post-retirement benefit obligations, partially offset by Net income of $921 million for the nine months ended September 30, 2016 .  Working capital increased by $455 million to $1,105 million from December 31, 2015 .
 
Accumulated Other Comprehensive Loss
 
Accumulated other comprehensive loss increased $370 million to $3,793 million at September 30, 2016 as compared to $3,423 million at December 31, 2015 , which was primarily driven by the following:

•	negative net foreign currency translation adjustments of $227 million , which are attributable to the strengthening of the U.S. dollar against certain foreign currencies,	
		
•	an increase of $132 million in net post-retirement benefit obligations, and	
		
•	net financial instrument losses of $11 million .	

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REVIEW BY SEGMENT
 
General
 
We serve clients through the following segments:

•	Risk Solutions acts as an advisor and insurance and reinsurance broker, helping clients manage their risks, via consultation, as well as negotiation and placement of insurance risk with insurance carriers through our global distribution network.	

•	HR Solutions partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance by designing, implementing, communicating and administering a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.	
 
Risk Solutions

																
 	Three months ended September 30,	 	Nine months ended September 30,	
(millions, except percentage data)	2016	 	2015	 	2016	 	2015	
Revenue	$	1,715		 	$	1,689		 	$	5,434		 	$	5,417		
Operating income	330		 	324		 	1,132		 	1,015		
Operating margin	19.2	%	 	19.2	%	 	20.8	%	 	18.7	%	
 
The demand for property and casualty insurance generally rises as the overall level of economic activity increases and generally falls as such activity decreases, affecting both the commissions and fees generated by our brokerage business. The economic activity that impacts property and casualty insurance is described as exposure units, and is most closely correlated with employment levels, corporate revenue and asset values.  During the first nine months of 2016 , pricing was modestly negative on average globally, and we still consider this a "soft market."  In a soft market, premium rates flatten or decrease, along with commission revenues, due to increased competition for market share among insurance carriers or increased underwriting capacity.  Changes in premiums have a direct and potentially material impact on the insurance brokerage industry, as commission revenues are generally based on a percentage of the premiums paid by insureds.
 
Additionally, continuing into the third quarter of 2016 , we faced difficult conditions as a result of continued weakness in the global economy and the repricing of credit risk.  Weak economic conditions in many markets around the globe have reduced our customers' demand for our retail brokerage and reinsurance brokerage products, which have had a negative impact on our operational results.
 
Risk Solutions generated approximately 62% of our consolidated total revenues in the third quarter. Revenues are generated primarily through fees paid by clients, commissions and fees paid by insurance and reinsurance companies, and investment income on funds held on behalf of clients.  Our revenues vary from quarter to quarter throughout the year as a result of the timing of our clients' policy renewals, the net effect of new and lost business, the timing of services provided to our clients, and the income we earn on investments, which is heavily influenced by short-term interest rates.
 
We operate in a highly competitive industry and compete with many retail insurance brokerage and agency firms, as well as with individual brokers, agents, and direct writers of insurance coverage.  Specifically, we address the highly specialized product development and risk management needs of commercial enterprises, professional groups, insurance companies, governments, health care providers, and non-profit groups, among others; provide Affinity products for professional liability, life, disability income, and personal lines for individuals, associations, and businesses; provide products and services via Inpoint; provide reinsurance services to insurance and reinsurance companies and other risk assumption entities by acting as brokers or intermediaries on all classes of reinsurance; provide capital management transaction and advisory products and services, including mergers and acquisitions and other financial advisory services, capital raising, contingent capital financing, insurance-linked securitizations and derivative applications; provide managing underwriting to independent agents and brokers as well as corporate clients; provide risk consulting, actuarial, loss prevention, and administrative services to businesses and consumers; and manage captive insurance companies.

51

Revenue
 
Commissions, fees and other revenue for Risk Solutions were as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Retail brokerage:	 		 	 		 	 	 	 	
Americas	$	814		 	$	779		 	$	2,352		 	$	2,329		
International (1)	563		 	573		 	2,028		 	2,034		
Total retail brokerage	1,377		 	1,352		 	4,380		 	4,363		
Reinsurance brokerage	332		 	331		 	1,038		 	1,038		
Total	$	1,709		 	$	1,683		 	$	5,418		 	$	5,401		
  
(1) Includes the U.K., Europe, Middle East, Africa and Asia Pacific.
 
Commissions, fees and other revenue for Risk Solutions increased $26 million , or 2% , in the third quarter 2016 compared to the third quarter 2015 . The increase in revenue was driven by 3% organic growth and a 1% increase in commissions and fees related to acquisitions, net of divestitures, partially offset by a 2% unfavorable impact from foreign currency exchange rates. During the first nine months of 2016 , commissions, fees, and other revenue increased $17 million as compared to the first nine months of 2015 due to a 3% unfavorable impact from foreign currency exchange rates, offset by 3% organic growth.
 
Reconciliation of organic revenue growth to reported commissions, fees and other revenue growth for 2016 versus 2015 is as follows:

													
Three months ended September 30, 2016	 	Percent Change	 	Less: Currency Impact	 	Less: Acquisitions, Divestitures & Other	 	Organic Revenue	
Retail brokerage:	 	 		 	 		 	 		 	 		
Americas	 	4	 %	 	(2	)%	 	1	 %	 	5	%	
International (1)	 	(2	)	 	(2	)	 	(2	)	 	2		
Total retail brokerage	 	2		 	(2	)	 	—		 	4		
Reinsurance brokerage	 	—		 	(1	)	 	—		 	1		
Total	 	2	 %	 	(2	)%	 	1	 %	 	3	%	
 	 	 	 	 	 	 	 	 	
Nine months ended September 30, 2016	 	Percent Change	 	Less: Currency Impact	 	Less: Acquisitions, Divestitures & Other	 	Organic Revenue	
Retail brokerage:	 	 		 	 		 	 		 	 		
Americas	 	1	 %	 	(3	)%	 	—	 %	 	4	%	
International (1)	 	—		 	(3	)	 	(1	)	 	4		
Total retail brokerage	 	—		 	(3	)	 	(1	)	 	4		
Reinsurance brokerage	 	—		 	(1	)	 	—		 	1		
Total	 	—	 %	 	(3	)%	 	—	 %	 	3	%	

(1) Includes the U.K., Europe, Middle East, Africa and Asia Pacific.

Retail brokerage Commissions, fees and other revenue increased 2% in the third quarter of 2016 driven by 4% organic revenue growth, partially offset by a 2% unfavorable impact from foreign currency exchange rates. For the first nine months of 2016 , commissions, fees, and other revenue increased $17 million as compared to the prior year period driven primarily by 4% organic revenue growth, offset by a 3% unfavorable impact from foreign currency exchange rates and a 1% decrease in commissions and fees related to net divestitures.
 
Americas Commissions, fees and other revenue increased 4% in the third quarter of 2016 , reflecting 5% growth in organic revenue and a 1% increase in commissions and fees related to acquisitions, net of divestitures, partially offset by a 2% unfavorable impact from foreign currency exchange rates. For the first nine months of 2016, commissions, fees and other revenue increased 1% , driven by 4% growth in organic revenue, partially offset by a 3% unfavorable impact from foreign currency exchange rates. Organic revenue growth of 5% and 4% in the three and nine months ended September 30, 2016 ,

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respectively, was driven by strong growth in Affinity, record new business generation in US Retail, and solid growth in Latin America.
 
International Commissions, fees and other revenue decreased 2% in the third quarter 2016 , driven by 2% organic revenue growth, which was more than offset by a 2% unfavorable impact from foreign currency exchange rates and a 2% decrease in commissions and fees related to net divestitures. For the first nine months of 2016 , commissions, fees, and other revenue decreased $6 million as compared to the prior year period, reflecting organic growth of 4% , offset by a 3% unfavorable impact from foreign currency exchange rates and a 1% decrease in commissions and fees related to net divestitures. Organic revenue growth in both periods was driven by continued growth across Asia and New Zealand, as well as solid growth in continental Europe driven by both new business generation and management of the renewal book portfolio.
 
Reinsurance brokerage Commissions, fees and other revenue increased $1 million in the third quarter of 2016 , as compared to the prior year period, driven by 1% organic revenue growth, offset by a 1% unfavorable impact from foreign currency exchange rates. For the first nine months of 2016 , commissions, fees, and other revenue was flat as compared to the prior year period, as 1% organic revenue growth was offset by a 1% unfavorable impact from foreign currency exchange rates. Organic revenue growth for both the third quarter and first nine months of 2016 was driven primarily by net new business generation in treaty placements and growth in facultative placements, partially offset by an unfavorable market impact globally.
 
Operating Income
 
Operating income for the third quarter 2016 increased $6 million , or 2% , from the third quarter of 2015 to $330 million in the first quarter of 2016 , and operating income margin remained flat at 19.2% in the third quarter of 2016 when compared to the third quarter of 2015 . For the first nine months of 2016 , operating income increased $117 million , or 12% , to $1,132 million . The increase in both periods was driven primarily by solid organic revenue growth and return on investments in data and analytics across the portfolio. In addition, a decrease in expense related to certain legacy litigation drove operating income growth for the nine months ended September 30, 2016 .
 
HR Solutions

																
 	Three months ended September 30,	 	Nine months ended September 30,	
(millions, except percentage data)	2016	 	2015	 	2016	 	2015	
Revenue	$	1,041		 	$	1,064		 	$	2,902		 	$	3,013		
Operating income	134		 	134		 	276		 	249		
Operating margin	12.9	%	 	12.6	%	 	9.5	%	 	8.3	%	
 
Our HR Solutions segment generated approximately 38% of our consolidated total revenues in the third quarter of 2016 and provides a broad range of human capital services, as follows:

·	Retirement specializes in global actuarial services, defined contribution consulting, tax and ERISA consulting, and pension administration.	
		
·	Compensation focuses on compensatory advisory/counsel including: compensation planning design, executive reward strategies, salary survey and benchmarking, market share studies and sales force effectiveness, with special expertise in the financial services and technology industries.	
		
·	Strategic Human Capital delivers advice to complex global organizations on talent, change and organizational effectiveness issues, including talent strategy and acquisition, executive on-boarding, performance management, leadership assessment and development, communication strategy, workforce training and change management.	
		
·	Investment consulting advises public and private companies, other institutions and trustees on developing and maintaining investment programs across a broad range of plan types, including defined benefit plans, defined contribution plans, endowments and foundations.	
		
·	Benefits Administration applies our human resource expertise primarily through defined benefit (pension), defined contribution (401(k)), and health and welfare administrative services. Our model replaces the resource-intensive processes once required to administer benefit plans with more efficient, effective, and less costly solutions.	
		
·	Exchanges is building and operating healthcare exchanges that provide employers with a cost effective alternative to traditional employee and retiree healthcare, while helping individuals select the insurance that best meets their needs.	
		
·	Human Resource Business Processing Outsourcing ("HR BPO") provides market-leading solutions to manage employee data; administers benefits, payroll and other human resources processes; and records and manages talent,	

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workforce and other core human resource process transactions as well as other complementary services such as flexible spending, dependent audit and participant advocacy.
 
Revenue
 
Commissions, fees and other revenue for HR Solutions were as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Consulting services	$	459		 	$	460		 	$	1,216		 	$	1,222		
Outsourcing	593		 	616		 	1,703		 	1,819		
Intrasegment	(11	)	 	(12	)	 	(17	)	 	(28	)	
Total	$	1,041		 	$	1,064		 	$	2,902		 	$	3,013		

Commissions, fees and other revenue for HR Solutions decreased $23 million , or 2% , in the third quarter 2016 compared to the third quarter 2015 . The modest decrease in revenue reflects a 4% decrease in commissions and fees related to net divestitures and a 2% unfavorable impact from foreign exchange rates, partially offset by 4% organic growth in commissions and fees. For the first nine months of 2016 , revenue decreased $111 million due to a 5% decrease in commissions and fees related to net divestitures and a 2% unfavorable impact from foreign currency exchange rates, partially offset by 3% organic growth.
 
Reconciliation of organic revenue growth to reported commissions, fees and other revenue growth for 2016 versus 2015 is as follows:

													
Three months ended September 30, 2016	 	Percent Change	 	Less: Currency Impact	 	Less: Acquisitions, Divestitures & Other	 	Organic Revenue	
Consulting services	 	—	 %	 	(3	)%	 	—	 %	 	3	%	
Outsourcing	 	(4	)	 	(1	)	 	(8	)	 	5		
Total	 	(2	)%	 	(2	)%	 	(4	)%	 	4	%	
 	 	 	 	 	 	 	 	 	
Nine months ended September 30,	 	Percent Change	 	Less: Currency Impact	 	Less: Acquisitions, Divestitures & Other	 	Organic Revenue	
Consulting services	 	—	 %	 	(3	)%	 	1	 %	 	2	%	
Outsourcing	 	(6	)	 	(1	)	 	(7	)	 	2		
Total	 	(4	)%	 	(2	)%	 	(5	)%	 	3	%	

Consulting services revenue decreased $1 million in the third quarter of 2016 as compared to the prior year period due primarily to a 3% unfavorable impact from foreign currency exchange rates, offset by 3% organic revenue growth. For the first nine months of 2016 , revenue decreased $6 million as compared to the prior year period, as a result of a 3% unfavorable impact from foreign currency rates, offset by 2% organic growth and a 1% increase in commissions and fees related to acquisitions, net of divestitures. Organic revenue growth for both periods was driven primarily by growth in investment consulting and communications consulting, as well as growth in pension solutions.
 
Outsourcing revenue decreased $23 million , or 4% , for the third quarter of 2016 as compared to the prior year period due to an 8% decrease in commissions and fees related to net divestitures and a 1% unfavorable impact from foreign currency exchange rates, partially offset by 5% organic revenue growth. For the first nine months of 2016 , revenue decreased $116 million , or 6% , as a result of a 7% decrease in commissions and fees related to net divestitures, and a 1% unfavorable impact from foreign currency exchange rates, partially offset by 2% organic revenue growth. Organic revenue growth in both periods was driven primarily by continued growth in HR BPO for cloud-based solutions, as well as growth in healthcare exchanges in the third quarter, partially offset by a modest decline in benefits administration.

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Operating Income
 
Operating income for the third quarter of 2016 was $134 million , comparable to the third quarter of 2015 . For the first nine months of 2016 , operating income was $276 million , an increase from $249 million in the prior year period. The result in the third quarter of 2016 was primarily driven by organic revenue growth, offset by $7 million of certain legacy information technology contract costs and an unfavorable impact from portfolio repositioning activities in previous quarters. The increase for the first nine months was primarily driven by organic revenue growth and a decrease in expenses related to certain legacy litigation settlements in the prior year quarter.

Operating margin for the HR Solutions segment was 12.9% in the third quarter, an increase from 12.6% in 2015 . For the first nine months of 2016 , operating margin was 9.5% , an increase from 8.3% in 2015 .
 
Unallocated Income and Expense
 
A reconciliation of our operating income to income before income taxes is as follows (in millions):

																
 	Three months ended September 30,	 	Nine months ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Operating income (loss):	 		 	 		 	 	 	 	
Risk Solutions	$	330		 	$	324		 	$	1,132		 	$	1,015		
HR Solutions	134		 	134		 	276		 	249		
Unallocated	(42	)	 	(45	)	 	(131	)	 	(133	)	
Operating income	422		 	413		 	1,277		 	1,131		
Interest income	1		 	3		 	6		 	10		
Interest expense	(70	)	 	(72	)	 	(212	)	 	(205	)	
Other income	9		 	8		 	27		 	51		
Income before income taxes	$	362		 	$	352		 	$	1,098		 	$	987		
 
Unallocated operating expense
 
Unallocated operating expense includes corporate governance costs not allocated to our reportable segments.  Net unallocated expenses decreased $3 million to $42 million in the third quarter 2016 as compared to the prior year period. Net unallocated expenses were $131 million for the first nine months of 2016 and $133 million for the first nine months of 2015 .
 
Interest income, Interest expense, and Other income
 
For a discussion of the components of Interest income, Interest expense, and Other income, see "Management's Discussion of Financial Condition and Results of Operations - Review of Consolidated Results".

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 2015 Annual Report on Form 10-K.

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 Securities and Exchange Commission ("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 revenues; our cost structure and the outcome of cost-saving or restructuring initiatives; the outcome of contingencies; dividend policy; the expected impact of acquisitions and dispositions; pension obligations; cash flow and liquidity; expected effective tax rate; future actions by regulators; and the impact of changes in accounting rules.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. 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, including negative yield in some jurisdictions, that could influence revenue and expense;	
		
•	changes in global equity and fixed income markets that could affect the return on invested assets;	
		
•	changes in the funding status of 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;	
		
•	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;	

56

		
•	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 grow, develop and integrate companies that it acquires or new lines of business;	
		
•	changes in commercial property and casualty markets, commercial premium rates or methods of compensation;	
		
•	changes in the health care system or our relationships with insurance carriers; and	
		
•	our ability to implement initiatives intended to yield cost savings and the ability to achieve those cost savings.	
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 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, 2015 . 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 2015 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 revenues 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 September 30, 2016 , 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, 2016 and 2017, 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 the Company were to translate prior year results at current quarter exchange rates, diluted earnings per share would be a favorable impact of approximately $0.02 during the three months ended September 30, 2016 and would be an unfavorable impact of $0.03 during the nine months ended September 30, 2016 .  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 be a favorable impact of $0.01 during the three months ended September 30, 2016 and would be an unfavorable impact of $0.04 during the nine months ended September 30, 2016 if the Company were to translate prior year results at current quarter exchange rates.

57

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 September 30, 2016 .  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  September 30, 2016  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 14 "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, 2015 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.

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 third quarter of 2016 :

	
															
Period	 	Total Number of Shares Purchased	 	Average Price Paid per Share	 	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	 	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)	
7/1/16 - 7/31/16	 	856,260		 	$	109.78		 	856,260		 	$	3,230,315,996		
8/1/16 - 8/31/16	 	984,795		 	109.77		 	984,795		 	3,122,217,921		
9/1/16 - 9/30/16	 	888,966		 	111.26		 	888,966		 	3,023,314,652		
Total	 	2,730,021		 	$	110.26		 	2,730,021		 	$	3,023,314,652		

(1)  Our Board of Directors authorized the 2012 Share Repurchase Program in April 2012 and the 2014 Share Repurchase Program in November 2014. During the third quarter of 2016 , we repurchased 2.7 million shares at an average price per share of $110.26 for a total cost of $301 million . Included in the 2.7 million shares repurchased was 128 thousand shares purchased in that period, which are included in the above table, that did not settle until October 2016. These shares were settled at an average price per share of $112.00 and total cost of $14.3 million.

We did not make any unregistered sales of equity in the third quarter.
 
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)	
 	 	
October 28, 2016	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	 	Aon plc Amended and Restated Executive Committee Combined Severance and Change in Control Plan, as amended and restated effective September 12, 2016.	
10.2	 	Form of Service as a Non-Executive Director Agreement.	
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
AON PLC
AMENDED AND RESTATED EXECUTIVE COMMITTEE
COMBINED SEVERANCE AND CHANGE IN CONTROL PLAN

(Effective December 11, 2015)
(As Amended and Restated Effective September 12, 2016)

Aon plc (the “Company”) has adopted this Executive Committee Combined Severance and Change in Control Plan (this “Plan”) for the benefit of members of the Company’s Executive Committee. Capitalized terms shall have the meanings set forth in Section 1 herein.
This Plan is intended to secure the continued services and ensure the continued dedication and objectivity of the Executives (as defined herein) in the event of certain terminations of employment or any threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as defined herein).
This Plan is intended to qualify as an unfunded plan maintained by the Company primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees as described in sections 201(2), 301(a)(3) and 401(a)(1) of the U.S. Employee Retirement Income Security Act of 1974, as amended.
1. Definitions . As used in this Plan, the following terms shall have the respective meanings set forth below:
(a)      “Accrued Benefits” has the meaning set forth in Section 3.
(b)      “Aon” means Aon Corporation, a Delaware corporation.
(c)      “Board” means the Board of Directors of the Company.
(d)      “Cause” means:
(1)      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;
(2)      an act of race, sex, national origin, religion, disability, or age-based discrimination, or sexual harassment, which after investigation, counsel to the Company reasonably concludes may result in material liability being imposed on the Company and/or the Executive or may result in material exposure to the Company’s business reputation;
(3)      a material violation of Company policies and procedures including, but not limited to, the Aon Code of Business Conduct;
(4)      material non-compliance with any restrictive covenants applicable to the Executive, which (if curable) is not cured within twenty (20) days after the Company has provided written notice thereof to the Executive; or

1

(5)      any criminal act resulting in a criminal felony charge brought against the Executive or a criminal conviction of the Executive (other than a conviction of a minor traffic violation).
(e)      “Change in Control” means:
(1)      the acquisition by any individual, entity or group, including any “person” or related “group” of “persons” within the meaning of Section 13(d)(3) or 14(d)(2) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) (any such individual, entity or group, a “Person”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding ordinary shares of the Company (the “Outstanding Ordinary Shares”) or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”) including by way of a court approved compromise or arrangement between the Company and its members pursuant to section 895 of the UK Companies Act 2006; excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company), (B) any acquisition by the Company, (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition by any corporation pursuant to a transaction which complies with each of clauses (i), (ii) and (iii) of subsection (3) of this definition; provided further, that for purposes of clause (B), if any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 30% or more of the Outstanding Ordinary Shares or 30% or more of the Outstanding Voting Securities by reason of an acquisition by the Company, and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Ordinary Shares or any additional Outstanding Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control;
(2)      individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided that any individual who becomes a director of the Company subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened solicitation by a Person other than the Board for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board;
(3)      the consummation of a reorganization, merger, consolidation or other similar business combination involving the Company or its Subsidiaries, or the sale or other disposition of all or substantially all of the assets of the Company and its subsidiaries (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which each of the following are applicable: (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Ordinary Shares and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, as a consequence of their ownership of shares of the Company prior to the Corporate Transaction, more than 60% of the

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outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, respectively, of the Company (or, if the Company is not the ultimate parent entity following the Corporate Transaction, the ultimate parent entity thereof resulting from such Corporate Transaction (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s and its Subsidiaries’ assets, as applicable, either directly or indirectly) (the “Corporate Successor”)), and in substantially the same proportions relative to each shareholder as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Ordinary Shares and the Outstanding Voting Securities, as applicable, (ii) no Person (other than  the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or its Subsidiaries or any entity controlled by the Company, the Corporate Successor or any Person that beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 30% or more of the Outstanding Ordinary Shares or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of common stock of the Company or the Corporate Successor or the combined voting power of the outstanding securities of such entity entitled to vote generally in the election of directors and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the Company or the Corporate Successor; or
(4)      the consummation of a plan of complete liquidation or dissolution of the Company.
(f)      “CIC Good Reason” means, without an Executive’s express written consent, the occurrence of any of the following events during the CIC Period, to the extent not cured by the Company within thirty (30) days of Executive’s written notification to the Company that a condition constituting CIC Good Reason exists, which written notification must be provided by the Executive to the Company within thirty (30) days of the initial existence of the condition constituting CIC Good Reason:
(1)      any event constituting “Good Reason”;
(2)      the failure of the Company to continue in effect any material employee benefit plan or compensation plan in which the Executive is participating immediately prior to such Change in Control, unless the Executive is permitted to participate in other plans providing the Executive with substantially comparable economic benefits, or the taking of any action by the Company which would adversely affect the Executive’s participation in or materially reduce the Executive’s benefits under any such plan; or
(3)      a change in the Executive’s primary employment location to a location that is more than 50 miles from the primary location of the Executive’s employment at the time of such Change in Control.
(g)      “CIC Qualifying Termination” means a termination of the Executive’s employment (1) by the Company without Cause during the CIC Period, or (2) by the Executive for CIC Good Reason during the CIC Period.
(h)      “CIC Period” means the period commencing upon a Change in Control and ending on the second anniversary of the Change in Control.

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(i)      “Code” means the Internal Revenue Code of 1986, as amended, and all interpretive and regulatory guidance issued thereunder.
(j)      “Committee” means the Organization and Compensation Committee of the Board.
(k)      “Company” means Aon plc, a public limited company incorporated under English law.
(l)      “Delay Period” has the meaning set forth in Section 8(c).
(m)      “Executive” means any person who is a member of the Company’s Executive Committee or any successor thereto (or was a member of the Company’s Executive Committee or any successor thereto immediately prior to the date on which a circumstance constituting Good Reason or CIC Good Reason initially existed), provided that (i) an Executive shall not be entitled to any benefits payable upon a Qualifying Termination under this Plan in the event that he or she is party to an individual contractual arrangement with the Company relating to the provision of severance benefits, and (ii) an Executive shall not be entitled to any benefits payable upon a CIC Qualifying Termination under this Plan in the event that he or she is party to an individual contractual arrangement with the Company relating to the provision of severance benefits upon a change in control event.
(n)      “Good Reason” means, without an Executive’s express written consent, the occurrence of any of the following events, to the extent not cured by the Company within thirty (30) days of Executive’s written notification to the Company that a condition constituting Good Reason exists, which written notification must be provided by the Executive to the Company within thirty (30) days of the initial existence of the condition constituting Good Reason:
(1)          a substantial adverse change in the nature or scope of the Executive’s authority, powers, functions, duties or responsibilities (provided, however, that “Good Reason” shall not exist solely as a result of a change in reporting structure or job title, or as a result of the Executive’s ceasing to be a member of the Executive Committee); or
(2)          a material reduction by the Company in the Executive’s rate of annual base salary or bonus opportunity (except for any reduction that applies generally to members of the Executive Committee).
(o)      “Nonqualifying Termination” means the termination of an Executive’s employment (1) by the Company for Cause, (2) by the Executive for any reason other than Good Reason or CIC Good Reason, (3) as a result of the Executive’s death, or (4) by the Company due to the Executive’s absence from the Executive’s duties with the Company on a full-time basis for at least one hundred and eighty (180) consecutive days as a result of the Executive’s incapacity due to physical or mental illness.
(p)      “Plan Administrator” means the Committee or such other person or persons appointed by the Committee as described in Section 9.
(q)      “Qualifying Termination” means the termination of an Executive’s employment (1) by the Company without Cause, or (2) by the Executive for Good Reason.
(r)      “Release” has the meaning set forth in Section 6.

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(s)      “Section 409A” means Section 409A of the Code and all interpretative and regulatory guidance issued thereunder.
(t)      “Severance Benefits” has the meaning set forth in Section 4 or Section 5, as applicable.
(u)      “Subsidiary” means Aon or any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.
(v)      “Termination Date” with respect to an Executive means the date on which the Executive’s employment is terminated for any reason.
2.      Termination of Employment .
(a)      The Company may terminate an Executive’s employment at any time for Cause, or as a result of the Executive’s absence from his or her duties with the Company on a full-time basis for at least one hundred and eighty (180) days as a result of the Executive’s incapacity due to physical or mental illness.
(b)      The Company may terminate an Executive’s employment without Cause upon no less than three hundred and sixty-five (365) days’ advance notice to the Executive, unless such termination by the Company occurs during the CIC Period, in which case, only thirty (30) days’ advance notice to the Executive shall be required. In each case, such notice period may be waived by mutual agreement of the Company and the Executive. The Executive shall be entitled to continue receiving his or her salary and participating in all benefit and compensation plans for which he or she is eligible during the applicable notice period. Notwithstanding the foregoing, if the Company determines in its sole discretion that it cannot provide for the continuation of health benefits during the applicable notice period without potentially violating applicable law (including, without limitation, Section 2716 of the U.S. Public Health Service Act), the Company shall, in lieu of such benefits, provide the Executive with a taxable cash payment equal to one-hundred percent (100%) of the portion of the applicable monthly premium the Company would pay for such coverage as in effect at such time, for each calendar month (including partial months) remaining until the date of the Executive’s termination.
(c)      An Executive may terminate his or her employment with or without Good Reason or CIC Good Reason upon no less than thirty (30) days’ advance notice to the Company, which notice period may be waived by the Company in its sole discretion. Notice provided by the Executive of the events giving rise to Good Reason or CIC Good Reason shall count towards satisfaction of this notice requirement. The Executive shall be entitled to continue receiving his or her salary and participating in all benefit and compensation plans for which he or she is eligible during the applicable notice period.
3.      Payments and Benefits Upon a Nonqualifying Termination . In the event of an Executive’s Nonqualifying Termination, the Company shall pay to the Executive (or to the Executive’s beneficiary or estate, as the case may be), all base salary, benefits, and other compensation entitlements that are accrued or vested but unpaid through and including the Termination Date (the “Accrued Benefits”), which shall be payable within the time period required by applicable law and/or the terms of the applicable benefit plans or programs.

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4.      Payments and Benefits Upon a Qualifying Termination . In the event that an Executive experiences a Qualifying Termination, the Company shall pay to the Executive (or the Executive’s beneficiary or estate, as the case may be) the Accrued Benefits and the Severance Benefits described below:
(a)      An amount equal to the Executive’s annual base salary (as in effect immediately prior to the Termination Date), payable in a cash lump sum on the fifty-third (53 rd ) day following the Termination Date.
5.      Payments and Benefits Upon a CIC Qualifying Termination . In the event that an Executive experiences a CIC Qualifying Termination, the Company shall pay to the Executive (or Executive’s beneficiary or estate, as the case may be) the Accrued Benefits and the Severance Benefits described below:
(a)      An amount equal to the Executive’s average annual cash incentive bonus over the three fiscal years immediately preceding the fiscal year in which the Termination Date occurs (annualized for any fiscal year with respect to which the Executive was employed by the Company for fewer than twelve (12) months), multiplied by a fraction, the numerator of which is the number of days elapsed in the fiscal year in which the Termination Date occurs through the Termination Date, and the denominator of which is 365 or 366 (as applicable), payable in a cash lump sum on the fifty-third (53 rd ) day following the Termination Date (provided however, that (i) if the Executive was not employed by the Company during each of the three fiscal years immediately preceding the fiscal year in which the Termination Date occurs, the amount shall be determined based on the average annual cash incentive bonus received by the Executive over the fiscal years in which the Executive was actually employed; and (ii) if the Executive has not received an annual cash incentive bonus at any time prior to the Termination Date due to having been a new hire, the amount shall be determined by reference to the Executive’s target annual cash incentive opportunity);
(b)      An amount equal to two (2) times the sum of (i) the Executive’s annual base salary (as in effect immediately prior to the Termination Date, or immediately prior to any reduction if such CIC Qualifying Termination is a result of a reduction in base salary) and (ii) the Executive’s average annual cash incentive bonus over the two fiscal years immediately preceding the fiscal year in which the Termination Date occurs, payable in a cash lump sum on the fifty-third (53 rd ) following the Termination Date (provided however, that (x) if the Executive was not employed by the Company during each of the two fiscal years immediately preceding the fiscal year in which the Termination Date occurs, the amount shall be determined based on the average annual cash incentive bonus received by the Executive over the fiscal years in which the Executive was actually employed; and (y) if the Executive has not received an annual cash incentive bonus at any time prior to the Termination Date due to having been a new hire, the amount shall be determined by reference to the Executive’s target annual cash incentive opportunity);
(c)      For U.S. Executives only: immediate and full vesting in the Executive’s accrued benefits under the Aon Corporation Excess Benefit Plan, the Aon Corporation Supplemental Savings Plan (the “SSP), and the Aon Corporation Supplemental Employee Stock Ownership Plan, or successor plans in effect on the Termination Date; provided that (i) the accrued benefits under the Aon Corporation Excess Benefit Plan or the SSP (whichever plan applies to the Executive) shall be determined by crediting the Executive with two (2) additional years of age and service credits, and (ii) the accrued benefits under the SSP shall be determined by crediting the Executive’s SSP account with an amount equal to two (2) additional years of Supplemental Match Contributions (as defined under, and calculated based on the Executive’s Years of Participation under, the SSP as of the Termination Date); and
(d)      For the period commencing on the Termination Date and ending on the earlier of (i) two (2) years following the Termination Date and (ii) the date on which the Executive becomes eligible

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to participate in and receive medical, dental and life insurance benefits under a plan or arrangement sponsored by another employer having benefits substantially equivalent to the benefits provided pursuant to this subsection, the Company shall continue the Executive’s medical, dental and life insurance coverage, under the Company-sponsored plans or otherwise, upon the same terms and otherwise to the same extent as such coverage shall have been in effect immediately prior to the Executive’s Termination Date, and the Company and the Executive shall share the costs of the continuation of such medical, dental and life insurance coverage in the same proportion as such costs were shared immediately prior to the Termination Date; provided that the Company’s share of the cost of the continuation of coverage under any self-insured medical reimbursement plan that is subject to Section 105(h) of the Code shall be included in the Executive’s taxable income from the Company. Such continuation of coverage shall be in satisfaction of the Company’s obligations under the Consolidated Omnibus Budget Reconciliation Act of 1985, to the extent applicable. Notwithstanding the foregoing, if the Company determines in its sole discretion that it cannot provide the foregoing continuation of benefits without potentially violating applicable law (including, without limitation, Section 2716 of the U.S. Public Health Service Act), the Company shall, in lieu of such benefits, provide Executive with a taxable cash payment equal to one-hundred percent (100%) of the portion of the applicable monthly premium the Company would pay for such coverage as in effect at such time, for each calendar month (including partial months) remaining until the earlier of (i) second anniversary of the Termination Date and (ii) the date on which the Executive becomes eligible to participate in and receive such benefits under a plan or arrangement sponsored by another employer.
6.      Release of Claims . Any Severance Benefits payable to an Executive under the Plan shall only be paid contingent upon the Executive’s (or, in the event of the Executive’s death or incapacity, that of the Executive’s executor or other legal representative) execution and non-revocation of the Company’s standard non-competition, non-solicitation of clients and employees, and confidentiality agreement and release of claims, as modified in the Company’s sole discretion to preserve the enforceability of such agreement under applicable local law (the “Release”) within forty-five (45) days following the Termination Date. For the avoidance of doubt, the Severance Benefits shall be provided as compensation for services rendered to the Company and in consideration of the covenants set forth in the Release. The Executive shall forfeit the Severance Benefits in the event that the Executive fails to execute and deliver the Release to the Company in accordance with the timing and other provisions of this Section or revokes such Release prior to the date it becomes effective.
7.      Reduction of Payments . Anything in this Plan to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise, but determined without regard to any adjustment required under this Section) (in the aggregate, the “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter referred to as the “Excise Tax”), and if it is determined that (a) the amount remaining, after the Total Payments are reduced by an amount equal to all applicable federal and state taxes (computed at the highest applicable marginal rate), including the Excise Tax, is less than (b) the amount remaining, after taking into account all applicable federal and state taxes (computed at the highest applicable marginal rate), after payment or distribution to or for the benefit of the Executive of the maximum amount that may be paid or distributed to or for the benefit of the Executive without resulting in the imposition of the Excise Tax, then the payments due hereunder shall be reduced so that the Total Payments are One Dollar ($1) less than such maximum amount. All determinations to be made pursuant to this Section 7 shall be made by the public accounting firm that serves as the Company’s auditor.
8.      Section 409A .

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(a)      A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits that are subject to the requirements of Section 409A upon or following a termination of employment, unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” or like terms shall mean “separation from service” within the meaning of Section 409A.
(b)      Each payment to be made to an Executive under this Plan shall be treated as a “separate payment” for purposes of Section 409A.
(c)      In the event that any payment or distribution or portion of any payment or distribution to be made to the Executive hereunder cannot be characterized as a “short term deferral” for purposes of Section 409A or is not otherwise exempt from the provisions of Section 409A, and the Executive is determined to be a “specified employee” under Section 409A, such portion of the payment shall be delayed until the earlier to occur of the Executive's death or the date that is six (6) months and one day following the Executive's “separation from service” within the meaning of Section 409A (the “Delay Period”). Upon the expiration of the Delay Period, the payments delayed pursuant to this subsection shall be paid to the Executive or his or her beneficiary in a lump sum, and any remaining payments due under this Plan shall be payable in accordance with their original payment schedule.
(d)      To the extent that the reimbursement of any expenses or the provision of any in-kind benefits under this Plan is subject to Section 409A, (i) the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, during any one calendar year shall not affect the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) reimbursement of any such expense shall be made by no later than December 31 of the year following the year in which such expense is incurred; and (iii) the Executive’s right to receive such reimbursements of in-kind benefits shall not be subject to liquidation or exchange for another benefit.
(e)      The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Plan may not be accelerated except as otherwise permitted under Section 409A.
(f)      The parties intend that this Plan and the benefits provided hereunder be interpreted and construed to comply with Section 409A to the extent applicable thereto, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions. Notwithstanding any provision of the Plan to the contrary, the Plan shall be interpreted and construed consistent with this intent, provided that the Company shall not be required to assume any increased economic burden in connection therewith. To the extent that any provision of this Plan would fail to comply with the applicable requirements of Section 409A, the Company may, in its sole and absolute discretion, make such modifications to the Plan and/or payments to be made thereunder to the extent it determines necessary or advisable to comply with the requirements of Section 409A; provided, however, that the Company shall in no event be obligated to pay any interest, compensation, or penalties in respect of any such modifications. Although the Company intends to administer the Plan so that it will comply with the requirements of Section 409A, the Company does not represent or warrant that the Plan will comply with 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, employees or advisers shall 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 Plan, and the Company and its Subsidiaries shall have no obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes pursuant to Section 409A.

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9.      Plan Administration; Claims Procedure .
(a)      This Plan shall be interpreted and administered by the Committee, or if the Committee has delegated its authority to interpret and administer this Plan, by the person or persons appointed by the Committee from time to time to interpret and administer this Plan (the “Plan Administrator”), who shall have complete authority, in his or her sole discretion subject to the express provisions of this Plan, to make all determinations necessary or advisable for the administration of this Plan. All questions arising in connection with the interpretation of this Plan or its administration shall be submitted to and determined by the Plan Administrator in a fair and equitable manner in accordance with the procedure for claims and appeals described below.
(b)      Any Executive whose employment has terminated who believes that he or she is entitled to receive benefits under this Plan, including benefits other than those initially determined by the Plan Administrator to be payable, may file a claim in writing with the Plan Administrator, specifying the reasons for such claim. The Plan Administrator shall, within ninety (90) days after receipt of such written claim (unless special circumstances require an extension of time, but in no event more than one hundred and eighty (180) days after such receipt), send a written notification to the Executive as to the disposition of such claim. Such notification shall be written in a manner calculated to be understood by the claimant and in the event that such claim is denied in whole or in part, shall (i) state the specific reasons for the denial, (ii) make specific reference to the pertinent Plan provisions on which the denial is based, (iii) provide a description of any additional material or information necessary for the Executive to perfect the claim and an explanation of why such material or information is necessary, and (iv) set forth the procedure by which the Executive may appeal the denial of such claim. The Executive (or his or her duly authorized representative) may request a review of the denial of any such claim or portion thereof by making application in writing to the Plan Administrator within sixty (60) days after receipt of such denial. Such Executive (or his or her duly authorized representative) may, upon written request to the Plan Administrator, review any documents pertinent to such claim, and submit in writing issues and comments in support of such claim. Within 60 days after receipt of a written appeal (unless special circumstances require an extension of time, but in no event more than one hundred and twenty (120) days after such receipt), the Plan Administrator shall notify the Executive of the final decision with respect to such claim. Such decision shall be written in a manner calculated to be understood by the claimant and shall state the specific reasons for such decision and make specific references to the pertinent Plan provision on which the decision is based.
(c)      The Plan Administrator may from time to time delegate any of his or her duties hereunder to such person or persons as the Plan Administrator may designate. The Plan Administrator is empowered, on behalf of this Plan, to engage accountants, legal counsel and such other persons as the Plan Administrator deems necessary or advisable for the performance of his or her duties under this Plan. The functions of any such persons engaged by the Plan Administrator shall be limited to the specified services and duties for which they are engaged, and such persons shall have no other duties, obligations or responsibilities under this Plan. Such persons shall exercise no discretionary authority or discretionary control respecting the administration of this Plan. All reasonable fees and expenses of such persons shall be borne by the Company.
10.      Withholding Taxes . The Company may withhold from all payments due under this Plan to each Executive (or the Executive’s beneficiary or estate) all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.
11.      Amendment and Termination . The Company shall have the right, in its sole discretion, pursuant to action by the Board, to approve the amendment or termination of this Plan, which

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amendment or termination shall not become effective until the date fixed by the Board for such amendment or termination, which date, in the case of an amendment which would be materially adverse to the interests of any Executive or in the case of termination, shall be at least one hundred and twenty (120) days after notice thereof is given by the Company to the Executives; provided , however , that no such action shall be taken by the Board during any period when the Board has actual knowledge that any person has taken steps reasonably calculated to effect a Change in Control until, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control; and provided further , that during the CIC Period or any period thereafter during which payments or benefits payable under the terms of this Plan as a result of a CIC Qualifying Termination, in no event shall this Plan be amended in a manner materially adverse to the interests of any Executive or terminated.
12.      Offset; Mitigation .
(a)      For non-U.S. Executives who are not subject to U.S. federal income tax: If the Company is obligated by law to pay severance pay, notice pay or other similar benefits, or if the Company is obligated by law to provide advance notice of separation (“Notice Period”), then any payments hereunder shall be reduced by the amount of any such severance pay, notice pay or other similar benefits, as applicable, and by the amount of any severance pay, notice pay or other similar benefits received during any Notice Period.
(b)      In no event shall an Executive be obligated to seek other employment or to take other action by way of mitigation of the amounts payable and the benefits provided to such Executive under any of the provisions of this Plan, and such amounts and benefits shall not be reduced whether or not such Executive obtains other employment, except as otherwise provided in Section 5(d) hereof.
13.      Unfunded Plan . This Plan shall not be funded. No Executive entitled to benefits hereunder shall have any right to, or interest in, any specific assets of the Company or any of its Subsidiaries, but an Executive shall have only the rights of a general creditor of the Company to receive benefits on the terms and subject to the conditions provided in this Plan.
14.      Payments to Minors, Incompetents and Beneficiaries . Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of giving a receipt therefor shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Company, its Subsidiaries, the Plan Administrator and all other parties with respect thereto. If an Executive shall die while any amounts would be payable to the Executive under this Plan had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the estate of the Executive.
15.      Non-Assignability . None of the payments, benefits or rights of any Executive shall be subject to any claim of any creditor, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment, trustee’s process or any other legal or equitable process available to any creditor of such Executive. Except as otherwise provided herein or by law, no right or interest of any Executive under this Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including without limitation by execution, levy, garnishment, attachment or pledge; no attempted assignment or transfer thereof shall be effective; and no right or interest of any Executive under this Plan shall be subject to any obligation or liability of such Executive.

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16.      No Rights to Continued Employment . Neither the adoption of this Plan, nor any amendment hereof, nor the creation of any fund, trust or account, nor the payment of any benefits, shall be construed as giving any Executive the right to be retained in the service of the Company or any of its Subsidiaries, and all Executives shall remain subject to discharge to the same extent as if this Plan had not been adopted.
17.      Successors; Binding Agreement . This Plan shall inure to the benefit of and be binding upon the beneficiaries, heirs, executors, administrators, successors and assigns of the parties, including each Executive, present and future, and any successor to the Company or one of its Subsidiaries. This Plan shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Plan shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred. The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section, it will cause any surviving or resulting corporation or transferee unconditionally to assume all of the obligations of the Company hereunder.
18.      Headings . The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Plan and shall not be employed in the construction of this Plan.
19.      Notices . Any notice or other communication required or permitted pursuant to the terms hereof shall have been duly given when delivered personally or by email or mailed by United States mail, first class, postage prepaid, addressed to (a) with respect to the Executive, his or her last known address on file in the Company’s records, or (b) with respect to the Company, to Aon plc, 200 East Randolph Drive, Chicago, Illinois 60601, 3 rd Floor, attention General Counsel, with a copy to the Secretary . The Committee may revise such notice period from time to time. Any notice required under the Plan may be waived by the person entitled to notice.
20.      Effective Date . This Plan shall be effective as of the date hereof and shall remain in effect unless and until terminated by the Company in accordance with this Plan.
21.      Employment with, and Action by, Subsidiaries . For purposes of this Plan, any references to employment with the Company or actions taken or to be taken by the Company with respect to or otherwise relating to the Executive’s employment shall include employment with or actions taken or be taken by any Subsidiary.
22.      Governing Law; Validity . This Plan shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Illinois (without regard to principles of conflicts of laws) to the extent not preempted by federal law, which shall otherwise control. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, and this Plan shall be construed and enforced as if such provision had not been included.
IN WITNESS WHEREOF, the Company has caused this Plan to be adopted as of the 12 th day of September, 2016.
AON PLC

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By:                      

Anthony R. Goland

Executive Vice President and
Chief Human Resources Officer

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Exhibit 10.2
Aon plc
PRIVATE AND CONFIDENTIAL

[          ]
[Date]
Dear [          ]:
Service as a Non-Executive Director
On behalf of Aon plc (the "Company"), I am writing to confirm your service as a Non-Executive Director of the Company (the "Appointment") with effect from the date hereof. The terms of the Appointment are set out below.
Appointment

1.	The Appointment will be subject to the Company’s Articles of Association (a copy of which will be made available to you on request).	

2.	The Appointment may be terminated at any time by the Company in accordance with the Company’s Articles of Association or the Companies Act 2006, or upon your resignation.	

3.	If you desire to continue serving as a Non-Executive Director, the Company’s Articles of Association require that you stand for re-election at the Company’s next AGM.	

4.	By accepting the Appointment, you confirm that you are able to allocate sufficient time to perform your role. Personal attendance will be required at Board Meetings and Board Committee meetings unless agreed otherwise in advance with the Chairman.	

5.	As a Non-Executive Director you have the same general legal responsibilities to the Company as any other Director.	

6.	The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company’s affairs. At all times you must carry out your duties diligently, with due skill, care and attention and use your best endeavors to promote and protect the interests of the Company.	

		
7.	You shall exercise your powers in your role as a non-executive director having regard to all relevant obligations under prevailing law and regulation, including the Companies Act 2006.	
Fees

8.	You will be paid a cash fee as set by the Board from time to time. You will also be paid additional cash fees in respect of your membership on any Board committee in the amount determined by the Board from time to time. The fee will be paid quarterly in arrears, net of statutory deductions	

9.	In addition, if you are elected to continue serving as a Non-Executive Director, you will receive a grant of Class A Ordinary Shares in an amount set forth by the Board from time to time.	

10.	You will be entitled to participate in such share based plans, charitable contribution arrangements, deferred compensation plans, deferred benefit retirement plans, bequest plans or other compensation arrangements as the Board shall operate for the benefit of Non Executive Directors from time to time.	

11.	All remuneration payable to you is subject to compliance with the Company’s remuneration policy as approved by the Company’s shareholders from time to time. The Company reserves the right to amend, reduce, hold back, defer, claw back and alter the structure of any payments due to you in order to comply with the Company’s remuneration policy.	

12.	On termination of your appointment, you shall only be entitled to such fees as may have accrued to the date of termination, together with reimbursement in the normal way of any expenses properly incurred before that date.	
Expenses

13.	In addition to the fees described in 7 and 8 above and the remuneration arrangements described in 9 above, the Company will reimburse you for all reasonable and properly documented expenses you incur in performing your role in accordance with the Company’s expenses policy as amended from time to time (a copy of which is available on request). You should submit any details of expenses incurred, together with appropriate receipts, to the Company Secretary.	
Other Directorships and Business Interests

		
14.	All directors must take decisions objectively in the best interests of the Company. You will be expected to bring an independent judgement to bear on issues of strategy, performance, resources and standards of conduct. You understand and accept the obligation of a director not to put himself in a position where his own interests are in conflict with those of the Company.	

15.	The Company acknowledges that you have business interests other than those of the Company and that you have declared any conflicts that are apparent at present. In the event that you become aware of any potential conflicts of interest, these should be disclosed to the Chairman and Company Secretary as soon as they become apparent. You must also promptly declare the nature of any interest that you may have, directly or indirectly, in any contract, proposed contract or other business dealings of the Company or any Group Company.	

16.	You will notify the company secretary of all your other directorships (and any change in directorships) so that the statutory records may be kept up to date. In addition, you should ensure that the Register of Directors’ Interests contains details of any interest (including private business interests) of you and your family members.	
Confidentiality

17.	You must apply the highest standards of confidentiality and not disclose to any person, firm or company (whether during the course of the Appointment or at any time after its termination) any Confidential Information concerning the Company and any Group Companies with which you come into contact by virtue of your position as a Non-Executive Director of the Company.	

18.	On termination of the Appointment you will deliver to the Company all books, documents, papers and other property of or relating to the business of the Company or any Group Company which are in your possession, custody or power by virtue of your position as a Non-Executive Director of the Company, whether or not such property is made or created by you and in any medium or format. The Company is able to arrange the disposal of papers which you no longer require.	

19.	For the purpose of this letter “Confidential Information” means all information which is identified or treated by the Company or any Group Company or any of the Group’s clients or customers as confidential or which by reason of its character or the circumstances or manner of its disclosure is evidently confidential including (without prejudice to the foregoing generality) any information about the personal affairs of any of the directors (or their families) of the Company or any Group Company, business plans, proposals relating to the acquisition or disposal of a company or business or proposed	

expansion or contraction of activities, maturing new business opportunities, research and development projects, designs, secret processes, trade secrets, product or services development and formulae, know-how, inventions, sales statistics and forecasts, marketing strategies and plans, costs, profit and loss and other financial information (save to the extent published in audited accounts), prices and discount structures and the names, addresses and contact and other details of: (a) employees and their terms of employment; (b) customers and potential customers, their requirements and their terms of business with the Company or Group; and (c) suppliers and potential suppliers and their terms of business (all whether or not recorded in writing or in electronic or other format).
Inside Information and Dealing in the Company's Shares

20.	You are required to familiarize yourself, and all times comply with, all laws and regulations prohibiting the disclosure of inside information and insider dealing including but not limited to section 52 of the Criminal Justice Act 1993.	
Independent Professional Advice

21.	There may be circumstances when you consider that you need to take independent legal or other professional advice in order properly to fulfil your duties to the Company. In these circumstances, the Company will refund to you the cost of these professional fees, in accordance with the Board’s procedure on these matters.	
Moral Rights

22.	You hereby irrevocably waive any moral rights in all works prepared by you, in the provision of your services to the Company, to which you are now or may at any future time be entitled under Chapter IV of the Copyright Designs and Patents Act 1988 or any similar provisions of law in any jurisdiction, including (but without limitation) the right to be identified, the right of integrity and the right against false attribution, and agree not to institute, support, maintain or permit any action or claim to the effect that any treatment, exploitation or use of such works or other materials, infringes your moral rights.	
General

23.	For the purposes of this letter "Group Company" shall mean the Company and any of its subsidiaries or holding companies from time to time (and any other subsidiary of any of its holding companies), and holding company and subsidiary shall be as defined in section 1159 Companies Act 2006.	

		
24.	This letter constitutes the entire terms and conditions of your appointment to the Board and supersedes all previous discussions, correspondence, negotiations, arrangements, understandings and agreements between you and the Company relating to its subject matter.	
		
25.	You agree that you shall have no remedies in respect of any representation or warranty (whether made innocently or negligently) that is not set out in this letter and you shall not have any claim for innocent or negligent misrepresentation based on any statement in this letter.	
		
26.	The construction, interpretation and performance of the terms of this letter will be governed by the laws of England to the exclusive jurisdiction of whose courts the parties agree to submit.	
		
27.	This appointment letter constitutes neither a contract for services nor a service contract. By accepting this appointment you confirm that you are not subject to any restrictions which prevent you from holding office as a director.	
		
28.	The Contracts (Rights of Third Parties) Act 1999 shall not apply to this letter. No person other than you and the Company shall have any rights under this letter and the terms of this letter shall not be enforceable by any person other than you and the Company.	
Please confirm your agreement to the above by executing and returning to me the enclosed duplicate of this letter.
Yours sincerely,
            
Peter Lieb
For and on behalf of Aon plc
*****
I have read, understood and agree to the above terms of my Appointment as a Non-Executive Director of Aon plc. 

Signed by:                 
[        ]        

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

	
																									
 	 	Nine Months Ended September 30,	 	Years Ended December 31,	
(millions except ratio)	 	2016	 	2015	 	2015	 	2014	 	2013	 	2012	
Income from continuing operations before income taxes and noncontrolling interests (1)	 	$	1,098		 	$	987		 	$	1,689		 	$	1,765		 	$	1,538		 	$	1,380		
Less: Equity in earnings on less than 50% owned entities	 	7		 	10		 	13		 	12		 	20		 	13		
Add back fixed charges:	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on indebtedness	 	212		 	205		 	273		 	255		 	210		 	228		
     Interest on uncertain tax positions	 	—		 	—		 	—		 	4		 	5		 	5		
     Portion of rents representative of interest factor	 	25		 	32		 	45		 	50		 	52		 	42		
          Income as adjusted	 	$	1,328		 	$	1,214		 	$	1,994		 	$	2,062		 	$	1,785		 	$	1,642		
Fixed charges:	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on indebtedness	 	$	212		 	$	205		 	$	273		 	$	255		 	$	210		 	$	228		
     Interest on uncertain tax positions	 	—		 	—		 	—		 	4		 	5		 	5		
     Portion of rents representative of interest factor	 	25		 	32		 	45		 	50		 	52		 	42		
          Total fixed charges	 	$	237		 	$	237		 	$	318		 	$	309		 	$	267		 	$	275		
Ratio of earnings to fixed charges	 	5.6		 	5.1		 	6.3		 	6.7		 	6.7			6.0		

(1) For the year ended December 31, 2012, amounts related to discontinued operations have been included in Other income to conform to amounts included in the Consolidated Financial Statements. This amount in the year ended December 31, 2012 , which was historically included in Income (loss) from discontinued operations, has been reclassified to conform with current presentation. The amount reclassified was a $1 million loss for the year ended December 31, 2012 , from Income (loss) from discontinued operations to Other income.

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:	October 28, 2016	/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:	October 28, 2016	/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 September 30, 2016 (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	
 	October 28, 2016	

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 September 30, 2016 (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	
 	October 28, 2016