Reconciliation of Non-GAAP Measures
Aon plc
Reconciliation of Non-GAAP Measures—Organic Revenue Growth and Free Cash Flow (Unaudited)
Organic Revenue Growth (Unaudited)
| Years Ended December 31, |
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| (millions) | 2024 | 2023 | % Change | Less:CurrencyImpact (1) | Less:FiduciaryInvestmentIncome (2) | Less:Acquisitions,Divestitures &Other | OrganicRevenueGrowth (3) |
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| Risk Capital Revenue: |
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| Commercial RiskSolutions | $7,861 | $7,043 | 12% | —% | —% | 7% | 5% |
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| Reinsurance Solutions | 2,656 | 2,481 | 7 | — | 1 | (1) | 7 |
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| Human Capital Revenue: |
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| Health Solutions | 3,335 | 2,433 | 37 | — | — | 31 | 6 |
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| Wealth Solutions | 1,874 | 1,431 | 31 | 1 | — | 23 | 7 |
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| Eliminations | (28) | (12) | N/A | N/A | N/A | N/A | N/A |
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| Total revenue | $15,698 | $13,376 | 17% | —% | —% | 11% | 6% |
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| (1) | Currency impact represents the effect on prior year period results if they were translated at current period foreign exchange rates. |
| (2) | Fiduciary investment income for the years ended December 31, 2024 and 2023 was $315 million and $274 million, respectively. |
| (3) | Organic revenue growth includes the impact of certain intercompany activity and excludes the impact of changes in foreign exchange rates, fiduciary investment income, acquisitions (provided that Organic revenue growth includes Organic growth of an acquired business as calculated assuming that the acquired business was part of the combined company for the same proportion of the relevant prior year period), divestitures (including held for sale disposal groups, if any), transfers between revenue lines, and gains or losses on derivatives accounted for as hedges. |
Free Cash Flow (Unaudited)
| Years Ended December 31, |
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| (millions) | 2024 | 2023 | % Change |
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| Cash Provided by Operating Activities | $3,035 | $3,435 | (12)% |
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| Capital Expenditures | (218) | (252) | (13)% |
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| Free Cash Flow(1) | $2,817 | $3,183 | (11)% |
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| (1) | Free cash flow is defined as cash flows from operations less capital expenditures. This non-GAAP measure does not imply or represent a precise calculation of residual cash flow available for discretionary expenditures. |
2025 Aon Proxy Statement A-1
Aon plc
Reconciliation of Non-GAAP Measures—Operating Income, Operating Margin, and Diluted Earnings Per Share (Unaudited)(1)
| Years Ended December 31, |
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| Risk Capital | Human Capital | Corporate/Eliminations (2) | TotalConsolidated |
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| (millions, except percentages) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
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| Revenue | $10,517 | $9,524 | $5,209 | $3,864 | $ (28) | $ (12) | $15,698 | $13,376 |
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| Operating income | $3,292 | $2,946 | $1,143 | $1,097 | $(600) | $(258) | $3,835 | $3,785 |
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| Amortization and impairment of intangible assets | 211 | 53 | 292 | 36 | — | — | 503 | 89 |
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| Change in the fair value of contingent consideration | 6 | — | 21 | — | — | — | 27 | — |
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| Accelerating Aon United Program expenses (3) | 114 | 57 | 27 | 23 | 248 | 55 | 389 | 135 |
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| Legal settlements (4) | — | 197 | — | — | — | — | — | 197 |
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| Transaction and integration costs (5) | 12 | — | 53 | — | 120 | 17 | 185 | 17 |
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| Adjusted operating income | $3,635 | $3,253 | $1,536 | $1,156 | $(232) | $(186) | $4,939 | $4,223 |
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| Operating margin | 31.3% | 30.9% | 21.9% | 28.4% | | 24.4% | 28.3% |
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| Adjusted operating margin | 34.6% | 34.2% | 29.5% | 29.9% | | 31.5% | 31.6% |
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| (1) | Certain noteworthy items impacting operating income in 2024 and 2023 are described in this schedule. The items shown with the caption “adjusted” are non-GAAP measures. |
| (2) | Segment expenses exclude governance costs, post-retirement benefits, and other costs that are not directly attributable to a specific segment. |
| (3) | Total charges are expected to include technology-related costs to facilitate streamlining and simplifying operations, headcount reduction costs, and costs associated with asset impairments, including real estate consolidation costs. |
| (4) | In the fourth quarter of 2023, Aon recognized actual or anticipated legal settlement expenses in connection with transactions for which capital was arranged by a third party, Vesttoo Ltd., primarily in the form of letters of credit from third party banks that are alleged to have been fraudulent. Certain actual or anticipated legal settlement expenses totaling $197 million have been recognized in the fourth quarter of 2023 within the Risk Capital segment, where certain potentially meaningful amounts may be recoverable in future periods. |
| (5) | On April 25, 2024, the Company completed the acquisition of NFP. As part of the acquisition, Aon incurred $191 million of transaction and integration costs for the year ended December 31, 2024. Transaction costs include advisory, legal, accounting, regulatory, and other professional or consulting fees required to complete the acquisition. For the year ended December 31, 2024, $90 million of transaction costs were recognized in Total operating expenses and $6 million were recognized in Other income (expense) related to the extinguishment of acquired NFP debt. The NFP Transaction also will result in certain non-recurring integration costs associated with colleague severance, retention bonus awards, termination of redundant third-party agreements, costs associated with legal entity rationalization, and professional or consulting fees related to alignment of management processes and controls, as well as costs associated with the assessment of NFP information technology environment and security protocols. Aon incurred $95 million of integration costs for the year ended December 31, 2024. |
A-2 2025 Aon Proxy Statement
| Twelve Months Ended December 31, |
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| (millions, except percentages) | 2024 | 2023 | % Change |
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| Adjusted operating income | $4,939 | $4,223 | 17% |
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| Interest income | 67 | 31 | 116% |
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| Interest expense | (788) | (484) | 63% |
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| Other income (expense): |
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| Adjusted other income (expense)—pensions (2) | (49) | (71) | (31)% |
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| Adjusted other income (expense)—other (3) | 62 | (65) | 195% |
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| Adjusted other income (expense) | 13 | (136) | 110% |
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| Adjusted income before income taxes | 4,231 | 3,634 | 16% |
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| Adjusted income tax expense (4) | 849 | 671 | 27% |
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| Adjusted net income | 3,382 | 2,963 | 14% |
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| Less: Net income attributable to redeemable and nonredeemable noncontrolling interests | 66 | 64 | 3% |
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| Adjusted net income attributable to Aon shareholders | 3,316 | 2,899 | 14% |
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| Adjusted diluted net income per share attributable to Aon shareholders | $15.60 | $14.14 | 10% |
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| Weighted average ordinary shares outstanding—diluted | 212.5 | 205.0 | 4% |
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| Effective tax rates (4) |
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| U.S. GAAP | 21.4% | 17.1% | |
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| Non-GAAP | 20.1% | 18.5% | |
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| (1) | Certain noteworthy items impacting operating income in 2024 and 2023 are described in this schedule. The items shown with the caption “adjusted” are non-GAAP measures. |
| (2) | To further its pension de-risking strategy, the Company settled certain pension obligations in the Netherlands through the purchase of annuities, where certain pension assets were liquidated to purchase the annuities. A non-cash settlement charge of $27 million was recognized in the second quarter of 2023, which is excluded from adjusted other income (expense). |
| (3) | Other income (expense) was income of $348 million and expense of $163 million for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, $84 million in gains were recognized related to deferred consideration from the affiliates of The Blackstone Group L.P. and the other designated purchasers related to a divestiture completed in a prior year period. Adjusted other income (expense) excluded gains from dispositions of $257 million related to the sale of a business for the year ended December 31, 2024. Adjusted other income (expense) also excluded $6 million of debt extinguishment charges related to the repayment of NFP debt, which is considered a transaction related cost incurred in the second quarter of 2024. |
| (4) | Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with certain pension and legal settlements, Accelerating Aon United Program expenses, deferred consideration from a prior year sale of business, certain gains from dispositions, certain transaction and integration costs related to the acquisition of NFP, and changes in the fair value of contingent consideration, which are adjusted at the related jurisdictional rate. The tax adjustment also excludes interest accruals for income tax reserves related to the termination fee payment made in connection with the Company’s terminated proposed combination with Willis Towers Watson. |
2025 Aon Proxy Statement A-3
