Aon plc

Previous wording

EXECUTIVE SUMMARY OF SECOND QUARTER 2024 FINANCIAL RESULTS

Current wording

EXECUTIVE SUMMARY OF THIRD QUARTER 2024 FINANCIAL RESULTS

Previous wording

The following is a summary of our second quarter of 2024 financial results.

Current wording

The following is a summary of our third quarter of 2024 financial results.

Previous wording

•Total operating expenses in the second quarter increased $769 million, or 33%, to $3.1 billion compared to the prior year period, due primarily to the inclusion of NFP’s ongoing operating expenses, Accelerating Aon United restructuring program charges, an increase in expense associated with 6% organic revenue growth, and investments in long-term growth, partially offset by $25 million of restructuring savings realized in the quarter and a $9 million favorable impact from foreign currency translation. Operating expenses for the first six months of 2024 were $5.7 billion, an increase of $976 million, or 21%, compared to the prior year period due primarily to the inclusion of NFP’s ongoing operating expenses, an increase in expense associated with 5% organic growth and Accelerating Aon United restructuring charges, partially offset by $45 million of restructuring savings.

Current wording

•Total operating expenses in the third quarter increased $836 million, or 37%, to $3.1 billion compared to the prior year period, due primarily to the inclusion of NFP’s ongoing operating expenses, an increase in intangible asset amortization associated with the acquisition of NFP, an increase in expense associated with 7% organic revenue growth, Accelerating Aon United restructuring program charges, and investments in long-term growth, partially offset by $25 million of restructuring savings realized in the quarter. Operating expenses for the first nine months of 2024 were $8.8 billion, an increase of $1.8 billion, or 26%, compared to the prior year period due primarily to the inclusion of NFP’s operating expenses, an increase in expense associated with 6% organic revenue growth, Accelerating Aon United restructuring charges, and transaction and integration costs, partially offset by $70 million of restructuring savings.

Previous wording

•Operating margin decreased to 17.4% from 26.5% in the prior year period. The decrease was driven by an increase in operating expenses as listed above, partially offset by total revenue growth of 18%. Operating margin for the first six months of 2024 decreased to 27.1% from 32.8% in the prior period. The decrease was primarily driven by an increase in operating expenses as listed above and partially offset by total revenue growth of 11%.

Current wording

•Operating margin decreased to 16.7% from 23.4% in the prior year period. The decrease was driven by an increase in operating expenses as previously described, partially offset by total revenue growth of 26%. Operating margin for the first nine months of 2024 decreased to 23.8% from 30.1% in the prior period. The decrease was primarily driven by an increase in operating expenses as previously described and partially offset by total revenue growth of 15%.

Previous wording

•Due to the factors set forth above, net income decreased $37 million, or 6%, to $538 million compared to the prior year period. For the first six months of 2024, Net income decreased $23 million, or 1%, to $1.6 billion compared to the first six months of 2023.

Current wording

•Due to the factors set forth above, net income decreased $112 million, or 24%, to $355 million compared to the prior year period. For the first nine months of 2024, net income decreased $135 million, or 6%, to $2.0 billion compared to the first nine months of 2023.

Previous wording

•Diluted earnings per share was $2.46 compared to $2.71 per share for the prior year period. During the first six months of 2024, diluted earnings per share was $7.72 compared to $7.79 per share for the prior period.

Current wording

•Diluted earnings per share was $1.57 compared to $2.23 per share for the prior year period. During the first nine months of 2024, diluted earnings per share was $9.20 compared to $10.03 per share for the prior period.

Previous wording

•Cash flows provided by operating activities was $822 million for the first six months of 2024, a decrease of $309 million from the prior year period, primarily due to higher receivables, including from NFP, payments related to transaction and integration costs, legal settlement expenses, restructuring, and higher cash taxes, partially offset by strong adjusted operating income growth.

Current wording

•Cash flows provided by operating activities was $1.8 billion for the first nine months of 2024, a decrease of $339 million from the prior year period, primarily due to higher cash taxes, and payments related to restructuring, legal settlement expenses, transaction and integration costs, and higher receivables, including from NFP, partially offset by strong adjusted operating income growth.

Previous wording

We focus on four key metrics not presented in accordance with U.S. GAAP that we communicate to shareholders: organic revenue growth, adjusted operating margin, adjusted diluted earnings per share, and free cash flow. These non-GAAP metrics should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements. The following is our measure of performance against these four metrics for the second quarter of 2024:

Current wording

We focus on four key metrics, which are not presented in accordance with U.S. GAAP, that we communicate to shareholders: organic revenue growth, adjusted operating margin, adjusted diluted earnings per share, and free cash flow. These non-GAAP metrics should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements. The following is our measure of performance against these four metrics for the third quarter of 2024:

Previous wording

•Organic revenue growth is a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth.” Organic revenue growth was 6% for the second quarter of 2024, driven by net new business generation and ongoing strong retention, Organic revenue growth was 5% for the first six months of 2024, driven by net new business generation and ongoing strong retention.

Current wording

•Organic revenue growth is a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth.” Organic revenue growth was 7% for the third quarter of 2024, driven by net new business and ongoing strong retention. Organic revenue growth was 6% for the first nine months of 2024, driven by net new business and ongoing strong retention.

Previous wording

•Adjusted operating margin, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 27.4% for the second quarter of 2024 compared to 27.3% in the prior year period. The increase in adjusted operating income reflects the impact from NFP, organic revenue growth, net restructuring savings and increased fiduciary investment income, partially offset by increased expenses and investments in long-term growth. For the first six months of 2024, adjusted operating margin was 33.8% compared to 33.6% for the prior year period. The increase primarily reflects the impact of NFP, organic revenue growth, restructuring savings and increased fiduciary investment income, partially offset by increased expenses and investments in long-term growth.

Current wording

•Adjusted operating margin, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 24.6% for the third quarter of 2024 compared to 24.3% in the prior year period. The increase in adjusted operating income reflects the impact from NFP, organic revenue growth, net restructuring savings and increased fiduciary investment income, partially offset by increased expenses and investments in long-term growth. For the first nine months of 2024, adjusted operating margin was flat at 30.8% compared to the prior year period.

Previous wording

•Adjusted diluted earnings per share, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Diluted Earnings per Share,” was $2.93 per share for the second quarter of 2024 and $8.50 per share for the first six months of 2024, compared to $2.76 and $7.93 per share for the respective prior year periods.

Current wording

•Adjusted diluted earnings per share, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Diluted Earnings per Share,” was $2.72 per share for the third quarter of 2024 and $11.16 per share for the first nine months of 2024, compared to $2.32 and $10.26 per share for the respective prior year periods.

Previous wording

•Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” decreased in the first six months of 2024 by $265 million from the prior year period, to $721 million, reflecting a decrease in cash flows from operations, partially offset by a $44 million decrease in capital expenditures.

Current wording

•Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” decreased in the first nine months of 2024 by $299 million from the prior year period, to $1.7 billion, reflecting a decrease in cash flows from operations, partially offset by a $40 million decrease in capital expenditures compared to the prior year period, which was elevated due to the timing of projects and investments within the year.

Previous wording

On April 25, 2024, the Company completed its acquisition of NFP, a leading middle-market provider of property and casualty brokerage, benefits consulting, wealth management, and retirement plan consulting, with more than 7,700 colleagues. The Company acquired NFP Intermediate Holdings A Corp. in a cash-and-stock merger for an aggregate preliminary purchase price totaling $9.1 billion, including approximately $3.2 billion to settle NFP indebtedness and cash consideration to the selling shareholders, and approximately 19 million class A ordinary shares with a fair value of approximately $5.9 billion, based on the Company’s closing stock price on April 25, 2024.

Current wording

On April 25, 2024, the Company completed its acquisition of NFP, a leading middle-market provider of property and casualty brokerage, benefits consulting, wealth management, and retirement plan consulting, with more than 7,700 colleagues. The Company acquired NFP Intermediate Holdings A Corp. in a cash-and-stock merger for an aggregate U.S. GAAP preliminary purchase price totaling $9.1 billion, including approximately $3.2 billion to settle NFP indebtedness and cash consideration to the selling shareholders, and approximately 19 million class A ordinary shares with a fair value of approximately $5.9 billion, based on the Company’s closing stock price on April 25, 2024. In addition, the Company had other adjustments of $3.9 billion for cash and certain assumed liabilities.

Previous wording

Total revenue increased $583 million, or 18%, to $3.8 billion, compared to the prior year period, due to acquired revenues from the acquisition of NFP, and organic revenue growth of 6%, driven by net new business generation and ongoing strong retention, partially offset by a 1% unfavorable impact from foreign currency translation. For the first six months of 2024, revenue increased $782 million, or 11%, to $7.8 billion compared to the prior year period. This increase reflects the acquired revenues from the acquisition of NFP, organic revenue growth of 5%, and a 1% favorable impact from fiduciary investment income.

Current wording

Total revenue increased $768 million, or 26%, to $3.7 billion, compared to the prior year period, due to acquired revenues from the acquisition of NFP and organic revenue growth of 7%, driven by net new business and ongoing strong retention. For the first nine months of 2024, revenue increased $1.6 billion, or 15%, to $11.6 billion compared to the prior year period. This increase reflects organic revenue growth of 6% and the acquired revenues from the acquisition of NFP.

Previous wording

Commercial Risk Solutions revenue increased $241 million, or 14%, to $2.0 billion in the second quarter of 2024, primarily related to acquired revenues from the acquisition of NFP, compared to $1.8 billion in the second quarter of 2023. Organic revenue growth was 6% in the second quarter of 2024, reflecting growth across all major geographies driven by net new business generation and ongoing strong retention. Growth in retail brokerage was highlighted by double-digit growth in EMEA and Latin America, and strong growth in North America, which includes the majority of NFP Commercial Risk, and Asia and the Pacific, driven by continued strength in core P&C. Results also reflect a positive impact from growth in Affinity. On average globally, exposures were positive andaggregate pricing was flat, resulting in modestly positive market impact. For the first six months of 2024, revenue increased $271 million, or 8% to $3.8 billion, compared to $3.6 billion in the first six months of 2023. Organic revenue growth was 4% in the first six months of 2024, reflecting growth across all major geographies, driven by net new business generation and strong retention.

Current wording

Commercial Risk Solutions revenue increased $267 million, or 17%, to $1.9 billion in the third quarter of 2024, primarily related to acquired revenues from the acquisition of NFP and 6% organic revenue growth, compared to $1.6 billion in the third quarter of 2023. Organic revenue growth was 6% in the third quarter of 2024, reflecting mid-single-digit or greater increases across all major geographies, and in NFP, driven by net new business and ongoing strong retention. Results reflect strong growth in North America driven by strength in core P&C, which includes the majority of NFP’s Commercial Risk solutions, and a double-digit increase in M&A services. On average globally, exposures were modestly positive and aggregate pricing was flat, resulting in modestly positive market impact. For the first nine months of 2024, revenue increased $538 million, or 10% to $5.7 billion, compared to $5.1 billion in the first nine months of 2023. Organic revenue growth was 5% in the first nine months of 2024, reflecting growth across all major geographies, driven by net new business and strong retention.

Previous wording

Reinsurance Solutions revenue increased $28 million, or 5%, to $635 million in the second quarter of 2024, compared to $607 million in the second quarter of 2023. Organic revenue growth was 7% in the second quarter of 2024, reflecting strong growth in treaty, driven by net new business generation and ongoing strong retention, as well as strong growth in facultative placements. Market impact was modestly positive on results in the quarter. For the first six months of 2024, revenue increased $118 million, or 7%, to $1.8 billion, compared to $1.7 billion in the first six months of 2023. Organic revenue growth was 7% in the first six months of 2024, driven by net new business generation and strong retention. The majority of revenue in our treaty portfolio is recurring in nature and is recorded in connection with the major renewal periods that take place throughout the first half of the year.

Current wording

Reinsurance Solutions revenue increased $38 million, or 8%, to $503 million in the third quarter of 2024, compared to $465 million in the third quarter of 2023. Organic revenue growth was 7% in the third quarter of 2024, reflecting double-digit increase in facultative placements, as well as strength in treaty, driven by net new business and ongoing strong retention. Market impact was modestly positive on results in the quarter. The majority of revenue in our treaty portfolio is recurring in nature and is recorded in connection with the major renewal periods that take place throughout the first half of the year. For the first nine months of 2024, revenue increased $156 million, or 7%, to $2.3 billion, compared to $2.1 billion in the first nine months of 2023. Organic revenue growth was 7% in the first nine months of 2024, reflecting strong growth in treaty, driven by net new business and strong retention, and facultative placements.

Previous wording

Wealth Solutions revenue increased $111 million, or 32%, to $463 million in the second quarter of 2024, primarily related to acquired revenues from the acquisition of NFP and 9% organic revenue growth, compared to $352 million in the second quarter of 2023. Organic revenue growth was 9% in the second quarter of 2024, reflecting strong growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes. Strong growth in Investments was highlighted by strong revenue growth within NFP, driven by asset inflows and market performance. For the first six months of 2024, revenue increased $131 million, or 19%, to $833 million, compared to $702 million in the first six months of 2023. Organic revenue growth was 6% in the first six months of 2024, reflecting growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes.

Current wording

Wealth Solutions revenue increased $147 million, or 42%, to $499 million in the third quarter of 2024, primarily related to acquired revenues from the acquisition of NFP and 7% organic revenue growth, compared to $352 million in the third quarter of 2023. Organic revenue growth was 7% in the third quarter of 2024, reflecting strength in Retirement, driven by advisory demand and project-related work related to pension de-risking and the ongoing impact of regulatory changes. Strong growth in Investments, which includes the majority of NFP’s Wealth solutions, was highlighted by strong revenue growth within NFP, driven by net asset inflows and market performance. For the first nine months of 2024, revenue increased $278 million, or 26%, to $1.3 billion, compared to $1.1 billion in the first nine months of 2023. Organic revenue growth was 7% in the first nine months of 2024, reflecting growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes, and modest growth in Investments.

Previous wording

Compensation and benefits expense increased $376 million, or 21%, and compared to the prior year period due primarily to the inclusion of ongoing operating expenses from NFP and expense associated with 6% organic revenue growth, partially offset by a $6 million favorable impact from foreign currency translation and savings from Accelerating Aon United restructuring actions. For the first six months of 2024, compensation and benefits increased $467 million, or 13%, compared to the first six months of 2023. The increase was primarily driven by the inclusion of ongoing operating expenses from NFP and an increase in expense associated with 5% organic revenue growth, partially offset by savings from Accelerating Aon United restructuring actions.

Current wording

Compensation and benefits expense increased $465 million, or 28%, and compared to the prior year period due primarily to the inclusion of ongoing operating expenses from NFP and expense associated with 7% organic revenue growth, partially offset by savings from Accelerating Aon United restructuring actions. For the first nine months of 2024, compensation and benefits increased $932 million, or 18%, compared to the first nine months of 2023. The increase was primarily driven by the inclusion of ongoing operating expenses from NFP and an increase in expense associated with 6% organic revenue growth, partially offset by savings from Accelerating Aon United restructuring actions.

Previous wording

Information technology expenses, which represent costs associated with supporting and maintaining our infrastructure, increased $3 million, or 2%, compared to the prior year period due primarily to the inclusion of ongoing operating expenses from NFP, partially offset by savings from Accelerating Aon United restructuring actions and efficiencies from our Aon Business Services operating platform. For the first six months of 2024, information technology expenses decreased $12 million, or 4%, compared to the first six months of 2023. The decrease was due primarily to elevated technology costs and investments in the prior year period, noting that spend may vary between quarters given timing of projects and investments within the year, partially offset by the inclusion of ongoing operating expenses from NFP.

Current wording

Information technology expenses, which represent costs associated with supporting and maintaining our infrastructure, increased $6 million, or 4%, compared to the prior year period due primarily to the inclusion of ongoing operating expenses from NFP, partially offset by efficiencies from our Aon Business Services operating platform and savings from Accelerating Aon United restructuring actions. For the first nine months of 2024, information technology expenses decreased $6 million, or 1%, compared to the first nine months of 2023. The decrease was due primarily to efficiencies from our Aon Business Services operating platform and savings from Accelerating Aon United restructuring actions, partially offset by the inclusion of operating expenses from NFP.

Previous wording

Premises expenses, which represent the cost of occupying offices in various locations throughout the world, increased $14 million, or 21%, in the second quarter of 2024 and increased $10 million, or 7% for the first six months of 2024, each compared to the prior year period, due primarily to the inclusion of ongoing operating expenses from NFP.

Current wording

Premises expenses, which represent the cost of occupying offices in various locations throughout the world, increased $14 million, or 19%, in the third quarter of 2024 and increased $24 million, or 11% for the first nine months of 2024, each compared to the prior year period, due primarily to the inclusion of operating expenses from NFP, partially offset by savings from Accelerating Aon United restructuring actions.

Previous wording

Depreciation of fixed assets primarily relates to software, leasehold improvements, furniture, fixtures, and equipment, computer equipment, buildings, and automobiles. Depreciation of fixed assets increased $6 million, or 15%, in the second quarter of 2024 and increased $12 million, or 16% for the first six months of 2024, each compared to the prior year period due primarily to the inclusion of ongoing operating expenses from NFP, and ongoing investments in Aon Business Services-enabled technology platforms to drive long-term growth.

Current wording

Depreciation of fixed assets primarily relates to software, leasehold improvements, furniture, fixtures, and equipment, computer equipment, buildings, and automobiles. Depreciation of fixed assets increased $5 million, or 12%, in the third quarter of 2024 and increased $17 million, or 14% for the first nine months of 2024, each compared to the prior year period due primarily to the inclusion of operating expenses from NFP, partially offset by savings from Accelerating Aon United restructuring actions.

Previous wording

Amortization and impairment of intangible assets primarily relates to finite-lived customer-related and contract-based assets as well as technology and other assets. Amortization and impairment of intangible assets increased $103 million, or

Current wording

Amortization and impairment of intangible assets primarily relates to finite-lived customer-related and contract-based assets as well as technology and other assets. Amortization and impairment of intangible assets increased $154 million, or

Previous wording

412% in the second quarter of 2024 and increased $94 million, or 188% for the first six months of 2024, each compared to the prior year period due primarily to an increase in intangible assets related to the NFP acquisition.

Current wording

770% in the third quarter of 2024 and increased $248 million, or 354% for the first nine months of 2024, each compared to the prior year period due primarily to an increase in intangible assets related to the NFP acquisition.

Previous wording

Interest income represents income, net of expense, earned on operating cash balances and other income-producing investments. It does not include interest earned on funds held on behalf of clients. During the second quarter of 2024, interest income increased $26 million to $31 million and for the first six months of 2024, interest income increased $49 million to $59 million compared to the prior year period primarily reflecting interest earned on the investment of $5 billion of term debt proceeds, which were ultimately used to fund the purchase of NFP.

Current wording

Interest income represents income, net of expense, 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 of 2024, interest income decreased from $5 million to $4 million and for the first nine months of 2024, interest income increased $44 million to $63 million compared to the prior year period primarily reflecting interest earned on the investment of $5 billion of term debt proceeds, which were ultimately used to fund the purchase of NFP.

Previous wording

Interest expense, which represents the cost of our debt obligations, increased $95 million to $225 million during the second quarter of 2024 compared to the prior year period, reflecting an increase in total debt outstanding and interest expense related to one-time discrete items. For the first six months of 2024, interest expense increased $128 million to $369 million compared to the prior year period. The increase was driven primarily by higher interest rates and an increase in total debt outstanding.

Current wording

Interest expense, which represents the cost of our debt obligations, increased $94 million to $213 million during the third quarter of 2024 compared to the prior year period, reflecting an increase in total debt, primarily to fund the purchase of NFP, and higher interest rates. For the first nine months of 2024, interest expense increased $222 million to $582 million compared to the prior year period. The increase was driven primarily by an increase in total debt outstanding, primarily to fund the purchase of NFP, and higher interest rates.

Previous wording

Other income (expense) for the second quarter of 2024 increased $295 million compared to the prior year period, where Other income was $236 million for the second quarter of 2024 and Other expense was $59 million for the second quarter of 2023. The increase was primarily driven by gains related to the sale of a business. Other income (expense) for first six months of 2024 increased $395 million compared to the prior year period. Other income was $311 million for the first six months of 2024, due primarily to gains related to the sale of a business. Other expense was $84 million for the first six months of 2023 due primarily to non-cash periodic pension cost and expense from the unfavorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies.

Current wording

Other income was $35 million for the third quarter of 2024 compared to Other expense of $21 million for the third quarter of 2023. The increase was primarily driven by a gain on the sale of businesses, offset by the unfavorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies. Other income was $346 million for the first nine months of 2024 compared to Other expense of $105 million for the first nine months of 2023. The increase was primarily due to a gain on the sale of businesses.

Previous wording

Due to the factors discussed above, Income before income taxes for the second quarter of 2024 was $698 million, a 6% increase from $658 million in the second quarter of 2023. For the first six months of 2024, Income before income taxes was $2.1 billion, a 6% increase from $2.0 billion for the first six months of 2023.

Current wording

Due to the factors discussed above, Income before income taxes for the third quarter of 2024 was $449 million, a 20% decrease from $560 million in the third quarter of 2023. For the first nine months of 2024, Income before income taxes was $2.6 billion, flat compared to the first nine months of 2023.

Previous wording

The effective tax rate on Net income was 22.9% and 23.1% for the three and six months ended June 30, 2024, respectively. The effective tax rate on Net income was 12.6% and 17.3% for the three and six months ended June 30, 2023, respectively.

Current wording

The effective tax rate on Net income was 20.9% and 22.8% for the three and nine months ended September 30, 2024, respectively. The effective tax rate on Net income was 16.6% and 17.1% for the three and nine months ended September 30, 2023, respectively.

Previous wording

For the three and six months ended June 30, 2024, the tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the favorable impact of share-based payments offset by the unfavorable impact of discrete items.

Current wording

For the three and nine months ended September 30, 2024, the quarter-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items. The year-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the favorable impacts of share-based payments offset by the unfavorable impact of other discrete items.

Previous wording

For the three and six months ended June 30, 2023, the tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the tax benefits associated with share-based payments and the anticipated sale of certain assets and liabilities classified as held for sale.

Current wording

For the three and nine months ended September 30, 2023, the quarter-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the tax benefit from the release of a valuation allowance due to a change in judgement about the realizability of deferred tax assets. The year-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the tax benefits associated with the release of a valuation allowance, share-based payments, and the anticipated sale of certain assets and liabilities classified as held for sale.

Previous wording

Ireland, the U.K., and many E.U. member states, among others, have enacted legislation to implement the global minimum tax that are consistent with the OECD’s proposed Pillar Two tax regime. Ireland’s Pillar Two rules changed on July 24, 2024, when the last E.U. member state consented to the OECD’s administrative guidance, but there remains significant uncertainty as to how Ireland’s Pillar Two tax regime and the OECD’s past and potentially future Pillar Two guidance will ultimately apply to the Company. The Company is actively monitoring developments in this area and continues to evaluate the guidance and the potential estimated impacts this may have on its global effective tax rate, results of operations, cash flows, and financial condition in 2024.

Current wording

Ireland, the U.K., and many E.U. member states, among others, have enacted legislation to implement the global minimum tax that are consistent with the OECD’s proposed Pillar Two tax regime. There remains significant uncertainty as to how the proposed Pillar Two tax regime and the OECD’s past and potentially future Pillar Two guidance will ultimately apply to the Company. The Company is actively monitoring developments in this area and continues to evaluate the guidance and the potential impacts this may have on its global effective tax rate, results of operations, cash flows, and financial condition in 2024 and future periods.

Previous wording

Net income attributable to Aon shareholders for the second quarter of 2024 decreased to $524 million, or $2.46 per diluted share, from $560 million, or $2.71 per diluted share, in the prior year period. Net income attributable to Aon shareholders for the first six months of 2024 decreased $15 million to $1,595 million, or $7.72 per diluted share, from $7.79 per diluted share, in the prior year period.

Current wording

Net income attributable to Aon shareholders for the third quarter of 2024 decreased to $343 million, or $1.57 per diluted share, from $456 million, or $2.23 per diluted share, in the prior year period. Net income attributable to Aon shareholders for the first nine months of 2024 decreased $128 million to $1.9 billion, or $9.20 per diluted share, from $10.03 per diluted share, in the prior year period.

Previous wording

We use supplemental information related to organic revenue growth to help us and our investors evaluate business growth from ongoing operations. Organic revenue growth is a non-GAAP measure that 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), divestitures (including held for sale disposal groups), transfers between revenue lines, and gains or losses on derivatives accounted for as hedges. 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. Industry peers provide similar supplemental information about their revenue performance, although they may not make identical adjustments. A reconciliation of this non-GAAP measure to the reported Total revenue is as follows (in millions, except percentages):

Current wording

We use supplemental information related to organic revenue growth to help us and our investors evaluate business growth from ongoing operations. Organic revenue growth is a non-GAAP measure that 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. 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. Industry peers provide similar supplemental information about their revenue performance, although they may not make identical adjustments. A reconciliation of this non-GAAP measure to the reported Total revenue is as follows (in millions, except percentages):

Previous wording

(2)Fiduciary investment income for the three months ended June 30, 2024 and 2023, was$75 million and $64 million, respectively. Fiduciary investment income for the six months ended June 30, 2024 and 2023 was $154 million and $116 million, respectively.

Current wording

(2)Fiduciary investment income for the three months ended September 30, 2024 and 2023, was $85 million and $80 million, respectively. Fiduciary investment income for the nine months ended September 30, 2024 and 2023 was $239 million and $196 million, respectively.

Previous wording

(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), transfers between revenue lines, and gains or losses on derivatives accounted for as hedges.

Current wording

(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.

Previous wording

(2)On April 25, 2024, the Company completed the acquisition of NFP. As part of the acquisition, Aon incurred $101 million and $116 million of transaction and integration costs during the three and six months ended June 30, 2024, respectively. Transaction costs include advisory, legal, accounting, regulatory, and other professional or consulting fees required to complete the acquisition. For the three months ended June 30, 2024, $79 million of transaction costs were recognized in Total operating expenses and $6 million were recognized within Other income (expense) related to the extinguishment of acquired NFP debt. For the six months ended June 30, 2024, $90 million of transaction costs were recognized in Total operating expenses and $6 million were recognized in Other income (expense). In connection with the NFP acquisition, Aon incurred 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$16 million and$20 million of inte gration costs in the three and six months ended June 30, 2024, respectively.

Current wording

(2)On April 25, 2024, the Company completed the acquisition of NFP. As part of the acquisition, Aon incurred $35 million and $151 million of transaction and integration costs during the three and nine months ended September 30, 2024, respectively. Transaction costs include advisory, legal, accounting, regulatory, and other professional or consulting fees required to complete the acquisition. Less than $1 million of transaction costs were recognized for the three months ended September 30, 2024. For the nine months ended September 30, 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 acquisition 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 $35 million and $55 million of integration costs in the three and nine months ended September 30, 2024, respectively.

Previous wording

(5)In the first quarter of 2024, the Company earned $82 million of deferred consideration from the affiliates of The Blackstone Group L.P. and the other designated purchasers related to the 2017 sale of the benefits administration and business process outsourcing business.

Current wording

(1)During the three and nine months ended September 30, 2024, a $2 million and$84 million gain was recognized, respectively, 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.

Previous wording

(3)Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with the anticipated sale of certain assets and liabilities classified as held for sale, certain pension 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.

Current wording

(2)Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with certain pension 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.

Previous wording

(1)Adjusted Other income (expense) excluded gains from dispo sitions of $257 million related to the sale of a business for the three and six months ended June 30, 2024.

Current wording

(3)Adjusted Other income (expense) excluded gains from dispo sitions of$257 million related to the sale of a business for thenine months ended September 30, 2024.

Previous wording

(2)Adjusted Other income (expense) excluded approximately $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.

Current wording

(4)Adjusted Other income (expense) 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.