Aon plc
For the period ended Dec 31, 2024. Filed Feb 18, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 18, 2025
AON$334.81-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-16.
0001628280-24-005392
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-18.
0001628280-25-006093
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 254 previous paragraphs and 287 current paragraphs.
142 unchanged; 89 reworded; 51 added; 18 removed; 5 previous and 5 current paragraphs rearranged.
Tables are not compared: 20 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (51)
Current report
•Revenue increased $2.3 billion, or 17%, to$15.7 billion, reflecting acquired revenues from NFP and 6% organic revenue growth, driven by net new business and ongoing strong retention. Risk Capital revenue increased $1.0 billion, or 10%, to $10.5 billion and Human Capital revenue increased $1.3 billion, or 35%, to$5.2 billion in 2024 compared to 2023.
Current report
•Operating expenses increased $2.3 billion, or 24%, to $11.9 billion in 2024 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 $110 million of restructuring savings. Risk Capital operating expenses increased$647 million, or 10%, to $7.2 billion and Human Capital operating expenses increased $1.3 billion, or 47%, to $4.1 billion in 2024 compared to 2023.
Current report
•Operating margin decreased to 24.4% in 2024 from 28.3% in 2023, driven primarily by the addition of NFP and an increase in operating expenses as previously described, partially offset by organic revenue growth of 6% and $110 million of net restructuring savings. Risk Capital operating margin increased to 31.3% in 2024 from 30.9% in 2023 and Human Capital operating margin decreased to 21.9% in 2024 from 28.4% in 2023.
Current report
•Cash flows provided by operating activities was $3.0 billion in 2024, a decrease of $400 million, or 12%, from $3.4 billion in 2023, primarily due to higher cash taxes, payments related to restructuring, legal settlement expenses, and transaction and integration costs, partially offset by strong adjusted operating income growth and working capital improvements.
Current report
ACQUISITION OF NFP
Current report
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.
Current report
Our segment results are as follows (in millions):
Current report
Refer to “Non-GAAP Metrics” below for a reconciliation of segment operating margin to segment adjusted operating margin.
Current report
Consolidated and Segment Results for 2024 Compared to 2023
Current report
Total revenue increased $2.3 billion, or 17%, to $15.7 billion in 2024, compared to $13.4 billion in 2023, reflecting acquired revenues from NFP and 6% organic revenue growth. Risk Capital revenue increased $1.0 billion, or 10%, to $10.5 billion and Human Capital revenue increased $1.3 billion, or 35%, to $5.2 billion.
Current report
Commercial Risk Solutions revenue increased $818 million, or 12%, to $7.9 billion in 2024, compared to $7.0 billion in 2023. Organic revenue growth was 5% in 2024, reflecting growth across all major geographies, driven by net new business and strong retention. Performance was highlighted by strength in North America core P&C, strong growth internationally and an increase in construction business. Results also reflect a double-digit increase in M&A services. Market impact was modestly positive on results in the year.
Current report
Reinsurance Solutions revenue increased $175 million, or 7%, to $2.7 billion in 2024, compared to $2.5 billion in 2023. Organic revenue growth was 7% in 2024 reflecting strong growth in treaty, driven by net new business and strong retention, as well as strength in facultative placements. In addition, market impact was modestly positive on results in the year.
Current report
Compensation and benefits increased $1.4 billion, or 20%, in 2024 compared to 2023. The increase was primarily driven by the inclusion of 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.
Current report
Information technology, which represents costs associated with supporting and maintaining our infrastructure, increased $5 million, or 1%, in 2024 compared to 2023. The increase was primarily due 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.
Current report
Other general expenses increased $171 million, or 12%, in 2024 compared to 2023. The increase was due primarily to the inclusion of ongoing operating expenses from NFP, as well as NFP related transaction and integration costs, partially offset by a non-recurring charge in connection with certain settlement expenses in the prior year period.
Current report
Total Operating Expenses and Operating Income
Current report
Total operating expenses increased $2.3 billion, or 24%, to $11.9 billion in 2024 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 $110 million of restructuring savings. Due to the factors set forth above, Total operating income increased$50 million, or 1%, to$3.8 billion in 2024.
Current report
Risk Capital Total operating expenses increased $647 million, or 10% to $7.2 billion in 2024. The increase was primarily due to an increase in Compensation and benefits and an increase in Other expenses. The increase in Compensation and benefits is due to the inclusion of operating expenses from NFP and an increase in expense associated with 5% and 7% organic revenue growth in Commercial Risk Solutions and Reinsurance Solutions, respectively, partially offset by restructuring savings. The increase in Other expenses is primarily due to increased Amortization and impairment from the NFP Transaction and Accelerating Aon United restructuring charges. Due to the factors set forth above, Risk Capital operating income increased $346 million, or 12%, to $3.3 billion in 2024.
Current report
Human Capital Total operating expenses increased $1.3 billion, or 47% to $4.1 billion in 2024. The increase was primarily due to an increase in Compensation and benefits and an increase in Other expenses. The increase in Compensation and benefits is due to the inclusion of operating expenses from NFP and an increase in expense associated with 6% and 7% organic revenue growth in Health Solutions and Wealth Solutions, respectively. The increase in Other expenses is primarily due to increased Amortization and impairment of intangible assets acquired from the NFP Transaction. Due to the factors set forth above, Human Capital operating income increased $46 million, or 4%, to $1.1 billion in 2024.
Current report
Other income was $348 million in 2024, compared to Other expense of $163 million in 2023. The increase was primarily due to gain on the sale of businesses.
Current report
Consolidated and Segment Results for 2023 Compared to 2022
Current report
Revenue
Current report
Total Operating Expenses and Operating Income
Current report
Risk Capital operating expenses increased $568 million, or 9%, to $6.6 billion in 2023. The increase was primarily due to an increase in Compensation and benefits as a result of additional expense associated with 5% and 10% organic revenue growth in Commercial Risk Solutions and Reinsurance Solutions, respectively. Due to the factors set forth above, Risk Capital operating income increased $51 million, or 2%, to $2.9 billion in 2023.
Current report
Human Capital operating expenses increased $137 million, or 5%, to $2.8 billion in 2023. The increase was primarily due to an increase in Compensation and benefits as a result of additional expense associated with 10% and 4% organic revenue growth in Health Solutions and Wealth Solutions, respectively. Due to the factors set forth above, Human Capital operating income increased $136 million, or 14%, to $1.1 billion in 2023.
Current report
Additionally, due to our change in reportable segments in the fourth quarter of 2024, a discussion of our non-GAAP segment results for 2023 compared to 2022 is included in the Non-GAAP Metrics section below.
Current report
A reconciliation of this non-GAAP measure to the reported operating margin is as follows (in millions, except percentages):
Current report
(4)On April 25, 2024, the Company completed the acquisition of NFP. As part of the acquisition, Aon incurred $191 million transaction and integration costs in 2024. Transaction costs include advisory, legal, accounting, regulatory, and other professional or consulting fees required to complete the acquisition. $96 million in transaction costs were recognized in 2024. In 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 will also 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 in 2024.
Current report
Risk Capital adjusted operating income increased $382 million, or 12%, to $3.6 billion in 2024. The increase was primarily due to the impact of NFP and organic revenue growth of 5% in Commercial Risk Solutions and 7% in Reinsurance Solutions, partially offset by increased expenses, including the inclusion of ongoing operating expenses from NFP. Human Capital adjusted operating income increased $380 million, or 33%, to $1.5 billion in 2024. The increase was primarily due to the impact of NFP and organic revenue growth of 6% in Health Solutions and 7% in Wealth Solutions, partially offset by increased expenses, including the inclusion of ongoing operating expenses from NFP.
Current report
A reconciliation of this non-GAAP measure to the reported operating margin is as follows (in millions, except percentages):
Current report
(1)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.
Current report
(2)Adjusted other income (expense) excluded gains from dispositions of $257 million related to the sale of a business in 2024.
Current report
(3)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.
Current report
Free Cash Flow
Current report
(1)For the year ended December 31, 2024, the Company recognized $27 million of accelerated ROU asset amortization or impairments due to the Company’s decision to exit certain leased properties as a result of the Program. The amounts are presented in Technology and other, where the corresponding liability is reflected within Other current liabilities and Non-current operating lease liabilities, which will ultimately be settled in cash.
Current report
On April 25, 2024, Aon North America, Inc. drew its $2 billion delayed draw term loan and used proceeds, together with the proceeds of the notes issued on March 1, 2024 described below, to pay a portion of cash consideration in connection with the acquisition of NFP, completed on April 25, 2024, (the “Transaction” or the “NFP Transaction”), to repay certain debt of NFP, and to pay related fees and expenses. The term loan matures on April 24, 2027 and is prepayable at any time. Aon plc incurred $1 million of debt extinguish ment charges for the year ended December 31, 2024 related to the delayed draw term loan. As of December 31, 2024, Aon North America, Inc. had repaid $900 million of the outstanding balance. The remaining outstanding balance is $1.1 billion.
Current report
On April 2, 2024, Aon plc announced that its wholly owned subsidiary, Randolph Acquisition Corp., commenced cash tender offers for any and all of the outstanding 6.875% Senior Notes due 2028, 4.875% Senior Secured Notes due 2028, 7.500% Senior Secured Notes due 2030 and 8.500% Senior Secured Notes due 2031, each issued by NFP Corp. (together, the “NFP Notes”), upon the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement, dated as of April 2, 2024. The total amount tendered pursuant to the tender offers was approximately $3.3 billion, excluding premiums. On April 26, 2024, Randolph Acquisition Corp. purchased those NFP Notes that were validly tendered and not validly withdrawn prior to April 15, 2024, effecting the early settlement of the offers (the “Early Settlement”). In addition, on April 16, 2024, NFP Corp. delivered notices of redemption of all NFP Notes not validly tendered pursuant to the offers and purchased at the Early Settlement, at a purchase price equal to the price paid to holders of the NFP Notes in connection with the Early Settlement, with a redemption date of April 26, 2024. As a result of the Early Settlement of the offers and the related redemption which occurred on April 26, 2024, no NFP Notes remain outstanding. Aon plc incurred $6 million of debt extinguishment charges for the year ended December 31, 2024 related to costs related to the NFP Transaction.
Current report
On March 1, 2024, Aon North America, Inc. issued $600 million 5.125% Senior Notes due in March 2027, $1 billion 5.150% Senior Notes due in March 2029, $650 million 5.300% Senior Notes due in March 2031, $1.75 billion 5.450% Senior Notes due in March 2034, and $2 billion 5.750% Senior Notes due in March 2054, totaling to an aggregate amount of $6 billion. The Company intends to use the net proceeds from the offering for general corporate purposes, including a portion of which was used to pay a portion of the cash consideration in connection with the acquisition of NFP, to repay certain debt of NFP and to pay related fees and expenses.
Current report
All issued and outstanding debt securities by Aon North America, Inc. are guaranteed by Aon Global Limited, Aon plc, Aon Global Holdings plc, and Aon Corporation, and include the following (collectively, the “Aon North America, Inc. Notes”):
Current report
Aon North America, Inc. Notes
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Removed paragraphs (18)
Previous report
•Operating margin decreased to 28.3% in 2023 from 29.4% in 2022. The decrease was driven by an increase in operating expenses as listed above.
Previous report
•Cash flows provided by operating activities was $3.4 billion in 2023, an increase of $216 million, or 7%, from $3.2 billion in 2022, reflecting strong operating income growth and overall working capital optimization, partially offset by higher cash tax payments and a negative impact to working capital due to temporary invoicing delays associated with the implementation of a new system.
Previous report
DEFINITIVE ACQUISITION AGREEMENT
Previous report
On December 19, 2023, Aon entered into a definitive agreement with NFP and the NFP seller, where Aon will acquire NFP for an aggregate purchase price of approximately $7 billion in cash and approximately 20,000,000 class A ordinary shares, nominal value of $0.01, in capital of Aon. The Company expects to fund the cash portion of the consideration with approximately $7 billion of new debt, with $5 billion raised in advance of the closing date and $2 billion raised at close of the acquisition. The acquisition is expected to be completed by mid-2024, subject to satisfaction or waiver of the closing conditions set forth in the Merger Agreement, including applicable regulatory approval.
Previous report
Compensation and benefits increased $425 million, or 7%, in 2023 compared to 2022. The increase was primarily driven by an increase in expense associated with 7% organic revenue growth.
Previous report
Information technology, which represents costs associated with supporting and maintaining our infrastructure, increased $25 million, or 5%, in 2023 compared to 2022. The increase was primarily driven by ongoing investments in Aon Business Services-enabled technology platforms and technology to drive long-term growth and continued investment in core infrastructure and security.
Previous report
Other expense was $163 million in 2023, which primarily reflects an expense from the unfavorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies and a non-cash net periodic pension cost. Other expense was $125 million in 2022, primarily reflecting a non-cash pension settlement charge of $170 million, partially offset by gains from sale of businesses.
Previous report
A reconciliation of this non-GAAP measure to reported operating margins is as follows (in millions, except percentages):
Previous report
(3)To further its pension de-risking strategy the Company purchased an annuity for portions of its U.S. pension plans that will settle certain obligations. A non-cash settlement charge totaling $170 million was recognized in the fourth quarter of 2022, which is excluded from Other income (expense) - as adjusted.
Previous report
Free Cash Flows
Previous report
Total debt at December 31, 2023 was $11.2 billion, an increase of $0.4 billion compared to December 31, 2022.
Previous report
On February 28, 2023, Aon Corporation, a Delaware corporation, and Aon Global Holdings plc, a public limited company formed under the laws of England and Wales, both wholly owned subsidiaries of the Company, co-issued $750 million 5.35% Senior Notes due in February 2033. The Company intends to use the net proceeds from the offering for general corporate purposes.
Previous report
On September 12, 2022, Aon Corporation, a Delaware corporation, and Aon Global Holdings plc, a public limited company formed under the laws of England and Wales, both wholly owned subsidiaries of the Company, co-issued $500 million of 5.00% Senior Notes due September 2032. The Company intends to use the net proceeds from the offering for general corporate purposes.
Previous report
On February 16, 2024, we entered into a credit agreement in which lenders committed to provide a $2.0 billion unsecured term loan facility to Aon North America, Inc. Proceeds will be used to fund, in part, the acquisition of NFP, including the repayment of certain debt of NFP and portions of the related fees and expenses. The borrowings must be made in a single drawing on the closing date of the acquisition.
Previous report
3.50% Senior Notes due June 2024
Previous report
Summarized Statement of Income information for the Obligor group is as follows (in millions):
Previous report
Summarized Statement of Financial Position information for the Obligor group is as follows (in millions):
Previous report
Workforce reduction costs
Reworded paragraphs (89)
Previous wording
Aon plc is a leading global professional services firm providing a broad range of risk and human capital solutions. Through our experience, global reach, and comprehensive analytics, we help clients meet rapidly changing, increasingly complex, and interconnected challenges related to risk and people. We are committed to accelerating innovation to address unmet and evolving client needs so that our clients are better informed, better advised, and able to make better decisions to protect and grow their business. Management remains focused on strengthening Aon and uniting the firm with one portfolio of capability enabled by data and analytics and one operating model to deliver additional insight, connectivity, and efficiency.
Current wording
Aon plc is a leading global professional services firm providing a broad range of Risk Capital and Human Capital solutions. Through our experience, global reach, and comprehensive analytics, we help clients meet rapidly changing, increasingly complex, and interconnected challenges related to risk and people. We are committed to accelerating innovation to address unmet and evolving client needs so that our clients are better informed, better advised, and able to make better decisions to protect and grow their business. Management remains focused on strengthening Aon and uniting the firm with a portfolio of Risk Capital and Human Capital capabilities enabled by data and analytics and a united operating model to deliver additional insight, connectivity, and efficiency.
Previous wording
•Due to the factors set forth above, Net income was $2.6 billion in 2023, a decrease of $18 million, or 1%, from 2022.
Current wording
•Due to the factors set forth above, Net income was $2.7 billion in 2024, an increase of $92 million, or 4%, from 2023.
Previous wording
•Diluted earnings per share increased 3% to $12.51 per share during the twelve months of 2023 compared to $12.14 per share for the prior year period.
Current wording
•Diluted earnings per share was $12.49 per share in 2024 compared to $12.51 per share in the prior year period.
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 Consolidated Financial Statements. The following is our measure of performance against these four metrics for 2023:
Current wording
We focus on four key metrics, that 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 Consolidated Financial Statements. The following is our measure of performance against these four metrics for 2024:
Previous wording
•Organic revenue growth, a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth,” was 7% in 2023, compared to 6% organic growth in the prior year period.
Current wording
•Organic revenue growth, a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth,” was 6% in 2024, compared to 7% organic growth in the prior year period, 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 31.6% in 2023, compared to 30.8% in the prior year period. The increase in adjusted operating margin primarily reflects 7% organic revenue growth and higher 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 31.5% in 2024, compared to 31.6% in the prior year. The decrease in adjusted operating margin primarily reflects the addition of NFP and increased expenses, partially offset by 6% organic revenue growth and $110 million of net restructuring savings. Risk Capital adju sted operating margin increased to 34.6% in 2024 from 34.2% in 2023 and Human Capital adjusted operating margin decreased to 29.5% in 2024 from 29.9% in 2023.
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 $14.14 per share in 2023, an increase of $0.75 per share, or 6%, from $13.39 per share in 2022. The increase in adjusted diluted earnings per share primarily reflects strong operational performance and effective capital management, highlighted by $2.7 billion of share repurchase during 2023.
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 $15.60 per share in 2024, an increase of $1.46 per share, or 10%, from $14.14 per share in 2023.
Previous wording
•Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” was $3.2 billion in 2023, an increase of $160 million, or 5%, from $3.0 billion in 2022, reflecting an increase in Cash flows from operations, partially offset by a $56 million increase in capital expenditures.
Current wording
•Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” was $2.8 billion in 2024, a decrease of $366 million, or 11%, from $3.2 billion in 2023, reflecting a decrease in Cash flows from operations, partially offset by a $34 million decrease in capital expenditures.
Previous wording
Our consolidated results are as follow (in millions, except per share data):
Current wording
Our consolidated results are as follows (in millions):
Previous wording
Premises, which represents the cost of occupying offices in various locations throughout the world, increased $5 million, or 2%, in 2023 compared to 2022.
Current wording
Premises, which represents the cost of occupying offices in various locations throughout the world, increased $31 million, or 11%, in 2024 compared to 2023 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 $16 million, or 11%, in 2023 compared to 2022, due primarily to 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 vehicles. Depreciation of fixed assets increased $16 million, or 10%, in 2024 compared to 2023, 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 intangibles primarily relates to finite-lived customer-related and contract-based, technology, and tradename assets. Amortization and impairment of intangibles decreased $24 million, or 21%, in 2023 compared to 2022 due primarily to a decrease associated with assets held for sale in 2023 as part of ongoing portfolio management and assets fully amortized in the prior year period.
Current wording
Amortization and impairment of intangibles primarily relates to finite-lived customer-related and contract-based, technology, and tradename assets. Amortization and impairment of intangibles increased $414 million, or 465%, in 2024 compared to 2023 due primarily to an increase in intangible assets related to the NFP Transaction.
Previous wording
Accelerating Aon United Program expenses were $135 million in 2023, reflecting restructuring charges associated with the Program announced in the third quarter of 2023, relating to workforce optimization, asset impairments, and technology and other costs.
Current wording
Accelerating Aon United Program expenses were $389 million in 2024 compared to $135 million in 2023, reflecting restructuring charges associated with the AAU Program announced in the third quarter of 2023, relating to workforce optimization, technology and other costs, and asset impairments.
Previous wording
Interest income represents income earned, net of expense, on operating cash balances and other income-producing investments. It does not include interest earned on funds held on behalf of clients. Interest income was $31 million in 2023, an increase of $13 million, or 72%, from 2022, reflecting higher interest rates.
Current wording
Interest income represents income earned, net of expense, on operating cash balances and other income-producing investments. It does not include interest earned on funds held on behalf of clients. Interest income was $67 million in 2024, an increase of $36 million, or 116%, from 2023, primarily reflecting interest earned on the investment of $5 billion of term debt proceeds, which were ultimately used to fund the acquisition of NFP.
Previous wording
Interest expense, which represents the cost of our debt obligations, was $484 million in 2023, an increase of $78 million, or 19%, from 2022. The increase was driven primarily by an overall increase in total debt and higher interest rates.
Current wording
Interest expense, which represents the cost of our debt obligations, was $788 million in 2024, an increase of $304 million, or 63%, from 2023. The increase was driven primarily by an increase in total debt outstanding, primarily to fund the acquisition of NFP.
Previous wording
Income before income taxes was flat at $3.2 billion in 2023, compared to the prior year period.
Current wording
Income before income taxes increased $293 million, or 9% to $3.5 billion in 2024, compared to $3.2 billion in the prior year.
Previous wording
The 2022 tax rate was primarily driven by the geographical distribution of income and certain discrete items, primarily the favorable impacts of share-based payments.
Current wording
The 2024 tax rate was primarily driven bythe geographical distribution of income and certain discrete items, including the favorable impacts of share-based payments and the unfavorable impact of other discrete items.
Previous wording
The effective tax rate on net income was 17.1% in 2023 and 16.2% in 2022. The 2023 tax rate was primarily driven bythe geographical distribution of income and certain discrete items, including the tax benefits associated with the release of a valuation allowance and share-based payments.
Current wording
The 2023 tax rate was primarily driven bythe geographical distribution of income and certain discrete items, including the tax benefits associated with the release of a valuation allowance, and share-based payments.
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. There remains significant uncertainty, however, 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 currently evaluating the potential impact that this may have on its global effective tax rate, results of operations, cash flows, and financial condition beginning in 2024.
Current wording
Ireland, the U.K., Singapore, and many E.U. member states, among others, have enacted legislation to implement the global minimum tax that is generally consistent with the OECD’s proposed Pillar Two tax regime. There remains significant uncertainty, however, as to how Pillar Two will ultimately apply to the Company. The OECD has issued numerous guidance documents attempting to change how Pillar Tax operates, subject to enactment by each implementing country, and the OECD may issue additional guidance in the future. 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 2025 and future periods.
Previous wording
Net income attributable to Aon shareholders decreased $25 million to $2.6 billion, or $12.51 per diluted share, in 2023, compared to $2.6 billion, or $12.14 per diluted share, in 2022.
Current wording
Net income attributable to Aon shareholders increased $90 million to $2.7 billion, or $12.49 per diluted share, in 2024, compared to $2.6 billion, or $12.51 per diluted share, in 2023.
Previous wording
We have elected not to include a discussion of our consolidated results for 2022 compared to 2021 in this report in reliance upon Instruction 1 to Item 303(b) of Regulation S-K. This discussion can be found in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 17, 2023.
Current wording
Due to our change in reportable segments in the fourth quarter of 2024, a discussion of our segment results for 2023 compared to 2022 is included below. Otherwise, we have elected not to include a discussion of our consolidated results for 2023 compared to 2022 in this report in reliance upon Instruction 1 to Item 303(b) of Regulation S-K. This discussion can be found in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 16, 2024. Our segment results are as follows (in millions):
Previous wording
Total revenue increased $897 million, or 7%, to $13.4 billion in 2023, compared to $12.5 billion in 2022. The increase was driven by 7% organic revenue growth and a 2% favorable impact from fiduciary investment income, partially offset by a 2% unfavorable impact from acquisitions, divestitures, and other.
Current wording
Total revenue increased $897 million, or 7%, to $13.4 billion in 2023, compared to $12.5 billion in 2022. The increase was primarily driven by 7% organic revenue growth and a 2% favorable impact from fiduciary investment income, partially offset by a 2% unfavorable impact from acquisitions, divestitures, and other. Risk Capital revenue increased $619 million, or 7%, to $9.5 billion and Human Capital revenue increased $273 million, or 8%, to $3.9 billion.
Previous wording
Health Solutions revenue increased $209 million, or 9%, to $2.4 billion in 2023, compared to $2.2 billion in 2022. Organic revenue growth was 10% in 2023, reflecting strong growth globally in core health and benefits brokerage, driven by net new business generation and management of the renewal book. Strength in health and benefits included growth in advisory work related to wellbeing and resilience. Results also reflect double-digit growth in Consumer Benefits Solutions and strong growth in Talent.
Current wording
Health Solutions revenue increased $209 million, or 9%, to $2.4 billion in 2023, compared to $2.2 billion in 2022. Organic revenue growth was 10% in 2023, reflecting strong growth globally in core health and benefits brokerage, driven by net new business generation and management of the renewal book. Strength in health and benefits included growth in advisory work related to wellbeing and resilience. Results also reflect double-digit growth in consumer benefits and strong growth in talent advisory services.
Previous wording
•Operating expenses increased $781 million, or 9%, to $9.6 billion in 2023 compared to 2022 due primarily to an increase in expense associated with 7% organic revenue growth, investments in long-term growth, a $197 million charge in connection with certain accrued actual or anticipated legal settlement expenses, and $135 million of expenses related to the Accelerating Aon United Restructuring Program.
Current wording
Total operating expenses increased $781 million, or 9%, to$9.6 billion in 2023 primarily due to an increase in expense associated with 7%organic revenue growth, investments in long-term growth, a $197 million charge in connection with certain accrued actual or anticipated legal settlement expenses, and$135 million of expenses related to the Accelerating Aon United Restructuring Program. Due to the factors set forth above, Total operating income increased $116 million, or 3%, to $3.8 billion in 2023.
Previous wording
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, adjusted net income attributable to Aon shareholders, adjusted net income per share, other income (expense), as adjusted, adjusted effective tax rate, free cash flow, and the impact of foreign exchange rate fluctuations on operating results. Management believes that these measures provide helpful supplemental information that enables investors to make meaningful period-to-period comparisons. Management also uses these measures to assess operating performance and performance for compensation. This non-GAAP supplemental information should be viewed in addition to, not instead of, our Consolidated Financial Statements.
Current wording
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, adjusted net income attributable to Aon shareholders, adjusted net income per share, adjusted other income (expense), adjusted effective tax rate, free cash flow, and the impact of foreign exchange rate fluctuations on operating results. Management believes that these measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors. Management also uses these measures to assess operating performance and performance for compensation. This non-GAAP supplemental information should be viewed in addition to, not instead of, our Consolidated Financial Statements.
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, 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 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 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 years ended December 31, 2023, 2022, and 2021 was $274 million, $76 million, and $8 million, respectively.
Current wording
(2)Fiduciary investment income for the twelve months ended December 31, 2024, 2023, and 2022 was $315 million, $274 million, and $76 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, divestitures (including held for sale disposal groups, which had a 1% favorable impact on total organic revenue growth for the year-ended December 31, 2023), 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
We use adjusted operating margin as a non-GAAP measure of core operating performance of the Company. Adjusted operating margin excludes the impact of certain items, as listed below, because management does not believe these expenses reflect our core operating performance. This supplemental information related to adjusted operating margin represents a measure not in accordance with U.S. GAAP, and should be viewed in addition to, not instead of, our Consolidated Financial Statements.
Current wording
We use adjusted operating margin as a non-GAAP measure of core operating performance of the Company. Adjusted operating margin excludes the impact of certain items, as listed below, because management does not believe these expenses are the best indicators of 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 Consolidated Financial Statements.
Previous wording
(1)Total charges related to the Program 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.
Current wording
(2)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.
Previous wording
(2)In the fourth quarter of 2023, Aon recognized actual and 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 settlements expenses totaling $197 million have been recognized in the current period, where certain potentially meaningful amounts may be recoverable in future periods. Additionally, a $58 million charge was recognized in the second quarter of 2022 with certain other legal settlements reached in matters unrelated to Vesttoo.
Current wording
(3)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. Additionally, a $58 million charge was recognized in the second quarter of 2022 with certain other legal settlements reached in matters unrelated to Vesttoo.
Previous wording
(3)In the fourth quarter of 2023, we entered into a definitive agreement to acquire NFP. As part of the definitive agreement, certain transaction costs were incurred including advisory, legal, accounting, and other professional or consulting fees required to complete the acquisition.
Current wording
(4)In the fourth quarter of 2023, Aon entered into a definitive agreement to acquire NFP. As part of the definitive agreement, certain transaction costs were incurred including advisory, legal, accounting, and other professional or consulting fees required to complete the acquisition.
Previous wording
(2)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 and legal settlements, AAU Program expenses, and certain transaction costs and other charges related to the definitive agreement to acquire NFP, which are adjusted at the related jurisdictional rate.
Current wording
(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.
Previous wording
(1)To further our pension de-risking strategy, we settled certain pension obligations in the Netherlands through the purchase of annuities, where certain pension assets were liqu idated to purchase the annuities. A non-cash settlement charge totaling $27 million was recognized in the second quarter of 2023, which is excluded from Other income (expense) - as adjusted.
Current wording
(5)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).
Previous wording
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 and cash generating capabilities of our business operations. This supplemental information related to free cash flow represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, the Consolidated Financial Statements. Management believes the supplemental information related to free cash flow is helpful to investors when evaluating our operating performance and liquidity results. 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):
Current wording
We use free cash flow, defined as cash flows provided by operations less capital expenditures, as a non-GAAP measure of our core operating performance and cash generating capabilities of our business operations. This supplemental information related to free cash flow represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Consolidated Financial Statements. Management believes the supplemental information related to free cash flow is helpful to investors when evaluating our operating performance and liquidity results. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures. A reconciliation of this non-GAAP measure to the reported Cash provided by operating activities is as follows (in millions):
Previous wording
Because we conduct business in more than 120 countries and sovereignties, foreign currency exchange rate fluctuations have a significant impact on our business. Foreign currency 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 rate fluctuations 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’s revenue, expenses, and net income using the current year’s foreign currency exchange rates.
Current wording
Because we conduct business in over 120 countries, foreign exchange rate fluctuations may 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 comparable impact of foreign currency exchange rates on our financial results. The methodology used to calculate this comparable impact isolates the impact of the change in currencies between periods by hypothetically translating the prior year’s revenue, expenses, and net income using the current year’s foreign currency exchange rates.
Previous wording
Currency fluctuations had an unfavorable impact of $0.17 on earnings per diluted share during the year ended December 31, 2023 if prior year period results were translated at current period foreign exchange rates. Currency fluctuations had an unfavorable impact of $0.33 on earnings per diluted share during the year ended December 31, 2022, if 2021 results were translated at 2022 rates.
Current wording
Currency fluctuations had an unfavorable impact of $0.11 on net income per diluted share during the year ended December 31, 2024 if prior year period results were translated at current period foreign exchange rates. Currency fluctuations had an unfavorable impact of $0.17 on net income per diluted share during the year ended December 31, 2023, if 2022 results were translated at 2023 rates.
Previous wording
Currency fluctuations had an unfavorable impact of $0.17 on adjusted earnings per diluted share during the year ended December 31, 2023 if prior year period results were translated at current period foreign exchange rates. Currency fluctuations had an unfavorable impact of $0.44 on adjusted earnings per diluted share during the year ended December 31, 2022, if 2021 results were translated at 2022 rates. These translations are performed for comparative and illustrative purposes only and do not impact the accounting policies or practices for amounts included in our Financial Statements.
Current wording
Currency fluctuations had an unfavorable impact of $0.12 on adjusted diluted earnings per share during the year ended December 31, 2024 if prior year period results were translated at current period foreign exchange rates. Currency fluctuations had an unfavorable impact of $0.17 on adjusted diluted earnings per share during the year ended December 31, 2023, if 2022 results were translated at 2023 rates. These translations are performed for comparative and illustrative purposes only and do not impact the accounting policies or practices for amounts included in our Consolidated Financial Statements.
Previous wording
We believe that our balance sheet and strong cash flow provide us with adequate liquidity. Our primary sources of liquidity in the near-term include cash flows provided by operations and available cash reserves; primary sources of liquidity in the long-term include cash flows provided by operations, debt capacity available under our credit facilities, and capital markets. Our primary uses of liquidity are operating expenses and investments, capital expenditures, acquisitions, share repurchases, pension obligations, shareholder dividends, and Accelerating Aon United Program cash charges. We believe that cash flows from operations, available credit facilities, available cash reserves, and the capital markets will be sufficient to meet our liquidity needs, including cash requirements to close our acquisition of NFP, principal and interest payments on debt obligations, capital expenditures, pension contributions, and anticipated working capital requirements in the next twelve months and over the long-term.
Current wording
We believe that our balance sheet and strong cash flow provide us with adequate liquidity. Our primary sources of liquidity in the near-term include cash flows provided by operations and available cash reserves; primary sources of liquidity in the long-term include cash flows provided by operations, debt capacity available under our credit facilities, and capital markets. Our primary uses of liquidity are operating expenses and investments, capital expenditures, acquisitions, share repurchases, pension obligations, shareholder dividends, and Accelerating Aon United Program cash charges. We believe that cash flows from operations, available credit facilities, available cash reserves, 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 in the next twelve months and over the long-term.
Previous wording
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 and claims in Fiduciary assets in the Consolidated Statements of Financial Position, with a corresponding amount in Fiduciary liabilities.
Current wording
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 our Consolidated Statements of Financial Position, with a corresponding amount in Fiduciary liabilities.
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Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Health Solutions revenue increased $902 million, or 37%, to $3.3 billion in 2024, compared to $2.4 billion in 2023. Organic revenue growth was 6% in 2024, reflecting strong growth globally in core health and benefits brokerage, driven by net new business and ongoing strong retention.
Current report — wording carried from elsewhere
Wealth Solutions revenue increased $443 million, or 31%, to $1.9 billion in 2024, compared to $1.4 billion in 2023. Organic revenue growth was 7% in 2024 reflecting growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes. Growth in Investments was highlighted by strong revenue growth within NFP, driven by net asset inflows and market performance.
Current report — wording carried from elsewhere
The effective tax rate on Net income was 21.4% in 2024 and 17.1% in 2023.
Current report — wording carried from elsewhere
(3)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.
Current report — wording carried from elsewhere
(2)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.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
•Revenue increased $897 million, or 7%, to $13.4 billion in 2023 compared to 2022, reflecting 7% organic revenue growth and a 2% favorable impact from fiduciary investment income, partially offset by a 2% unfavorable impact from acquisitions, divestitures and other.
Previous report — wording carried elsewhere
Consolidated Results for 2023 Compared to 2022
Previous report — wording carried elsewhere
Other general expenses increased $199 million, or 16%, in 2023 compared to 2022. The increase was due primarily to a $197 million charge in connection with certain accrued actual or anticipated legal settlement expenses.
Previous report — wording carried elsewhere
Consolidated Results for 2022 Compared to 2021
Previous report — wording carried elsewhere
Corporation together comprise the revised “Obligor group”. The following tables set forth summarized financial information for the revised Obligor group, which reflects the financial results of Aon North America, Inc. for the year ended December 31, 2023.