Aon (AON) 10-K risk factor changes: FY2017 vs FY2016

The risk factors set forth below reflect material risks associated with existing and potential [removed: lines of] business and contain “forward-looking statements” as discussed in the “Business” Section of Part I, Item 1 of this report.

Readers should consider them in addition to the other information contained in this report as our business, financial [removed: condition] [added: condition,] or results of operations could be adversely affected if any of these risks were to actually occur.

The following are material risks related to our businesses specifically and the industries in which we operate generally that could adversely affect our business, financial [removed: condition] [added: condition,] and results of operations and cause our actual results to differ materially from those stated in the forward-looking statements in this document and elsewhere.

An overall decline in economic activity could have a material adverse effect on the financial condition and results of operations of our [removed: businesses.][added: business.]

The demand for property and casualty insurance generally rises as the overall level of economic activity increases and generally falls as such activity decreases, affecting both the commissions and fees generated by our [added: Commercial] Risk [removed: Solutions business.][added: Solutions, Reinsurance]

The economic activity that impacts property and casualty insurance is most closely correlated with employment levels, corporate [removed: revenue] [added: revenue,] and asset values.

Downward fluctuations in the year-over-year insurance [removed: premium] [added: premiums] charged by insurers to protect against the same risk, referred to in the industry as softening of the insurance market, could adversely affect [removed: our Risk Solutions business] [added: these businesses] as a significant portion of the earnings are determined as a percentage of premium charged to our clients.

Also, error and omission claims against us, which we refer to as [removed: E&O] [added: errors and omissions (“E&O”)] claims, may increase in economic downturns, also adversely affecting our [removed: brokerage] business.

The results of our [removed: HR Solutions business] [added: operations] are generally affected by the level of business activity of our clients, which in turn is affected by the level of economic activity in the industries and markets these clients serve.

Economic [removed: downturns] [added: downturns, volatility, or uncertainty] in some markets may cause reductions in technology and discretionary spending by our clients, which may result in reductions in the growth of new business or reductions in existing business.

We [removed: believe that competition in our Risk Solutions segment is based on] [added: compete with respect to] service, product features, price, commission structure, financial strength, ability to access certain insurance [removed: markets] [added: markets,] and name recognition.

Our competitors may have greater financial, technical and marketing resources, larger customer bases, greater name recognition, [added: more comprehensive products,] stronger presence in certain [removed: geographies and] [added: geographies, or] more established relationships with their customers and suppliers than [added: we have.]

In addition, new competitors, alliances among [removed: competitors] [added: competitors,] or mergers of competitors could emerge and gain significant market share, and some of our competitors may have or may develop a lower cost structure, adopt more aggressive pricing [removed: policies] [added: policies,] or provide services that gain greater market acceptance than the services that we offer or develop.

They may also compete for skilled professionals, finance acquisitions, fund internal [removed: growth] [added: growth,] and compete for market share more effectively than we do.

We face exposure to adverse movements in exchange rates of currencies other than our reporting currency, the U.S. dollar, as a significant portion of our business is located outside of the [removed: United States.][added: U.S. These exposures may change over time, and they could have a material adverse impact on our financial results and cash flows.]

Operating funds available for corporate use were [removed: $721] [added: $1,285] million at December 31, [removed: 2016] [added: 2017] and are reported in Cash and cash equivalents and Short-term investments.

Funds held on behalf of clients and insurers were [removed: $3.8] [added: $3.7] billion at December 31, [removed: 2016] [added: 2017] and are reported in Fiduciary assets.

As of December 31, [removed: 2016,] [added: 2017,] these long-term investments had a carrying value of [removed: $119] [added: $57] million.

We may [removed: continue to] experience reduced investment earnings on our cash and short-term investments of fiduciary and operating funds if the yields on investments deemed to be low risk remain at or near their current low levels, or if negative yields on deposits or [removed: investments,] [added: investments are experienced,] as we have experienced in Japan and certain jurisdictions in the European [removed: Union, continue or arise in the jurisdictions in which we operate.][added: Union.]

Our pension obligations [added: and value of our pension assets] could adversely affect our shareholders’ equity, net income, cash flow and liquidity.

Our worldwide pension plans are significant, [added: and] therefore our pension contributions and expense are sensitive to various market and demographic factors.

These factors include equity and bond market returns, [added: fair value of pension assets,] the assumed interest rates we use to discount our pension liabilities, foreign exchange rates, rates of inflation, mortality assumptions, potential regulatory and legal changes and counterparty exposure from various investments and derivative contracts, including annuities.

As of December 31, [removed: 2016,] [added: 2017,] we had total consolidated debt outstanding of approximately [removed: $6.2] [added: $6.0] billion.

As of December 31, [removed: 2016,] [added: 2017,] we had two committed credit facilities outstanding.

Our senior debt ratings at December 31, [removed: 2016] [added: 2017] were A- with a stable outlook (Standard & [removed: Poor’s),] [added: Poor’s, or “S&P”),] BBB+ with a stable outlook (Fitch, [removed: Inc),] [added: Inc., or “Fitch”),] and Baa2 with a stable outlook (Moody’s Investor [removed: Services).][added: Services, or “Moody’s”).]

The economic and political conditions of the countries and regions in which we operate could have an adverse impact on our business, financial condition, operating results, [removed: liquidity] [added: liquidity,] and prospects for growth.

These risks include, particularly in emerging markets, the possibility we would be subject to undeveloped or evolving legal systems, unstable governments and economies, and potential governmental actions affecting the flow of goods, [removed: services] [added: services,] and currency.

[removed: Further,] [added: Additionally,] any development that has the effect of devaluing or replacing the Euro could meaningfully reduce the value of our assets [removed: or profitability] [added: and reducing the usefulness of liquidity alternatives] denominated in that [removed: currency,][added: currency such as our multicurrency U.S. credit facility.]

In 2012, we reincorporated in the U.K. and moved our corporate headquarters to [removed: London.][added: London (the “Redomestication”).]

There can be no assurance that all of the goals of our Redomestication will be [removed: achievable, particularly as the achievement of the benefits are, in many important respects, subject to factors that we do not control.][added: achievable.]

Our effective tax rates and the benefits from our Redomestication are [removed: also] subject to a variety of [removed: other] factors, many of which are beyond our ability to control, such as changes in the rate of economic growth in the U.K., the U.S. and other countries, the financial performance of our business in various jurisdictions, currency exchange rate fluctuations (especially as between the British pound and the U.S. dollar), and significant changes in trade, monetary or fiscal policies of the U.K. or the U.S., including changes in interest rates.

However, the [removed: United States] [added: U.S.] Congress, the IRS, the [removed: United Kingdom] [added: U.K.] Parliament or U.K. tax authorities may enact new statutory or regulatory provisions that could adversely affect our status as a non-U.S. corporation, or otherwise adversely affect our anticipated global tax position.

Retroactive statutory or regulatory actions have occurred in the past, and there can be no assurance that any [removed: such provisions, if enacted or promulgated, would not have retroactive application to us, the Redomestication or any subsequent actions.]

As a result, our global effective tax rate from period to period can be affected by many factors, including changes in tax legislation, [added: such as the U.S. Tax Reform Act detailed above,] our global mix of earnings, [removed: including] the use of global funding structures, the tax characteristics of our income, the [added: effect of complying with] transfer pricing [added: requirements under laws] of [added: many different countries on our] revenues and costs, [added: the consequences of] acquisitions and [removed: dispositions,] [added: dispositions of businesses] and [added: business segments, and] the portion of the income of non-U.S. subsidiaries that [removed: we expect to remit] [added: may be subject] to [removed: the] U.S. [removed: Significant judgment is required in determining our worldwide provision for income taxes, and our determination of our] tax [removed: liability is always subject] [added: whether or not distributed] to [removed: review by applicable tax authorities.][added: U.S. shareholders.]

There can be no assurance that we would be successful in attempting to mitigate the adverse impacts resulting from any changes in law, audits and [added: other matters.]

We prepare our consolidated financial statements in accordance with U.S. [removed: Generally Accepted Accounting Principles (“U.S GAAP”).][added: GAAP.]

[removed: We periodically evaluate our estimates and assumptions including,] but not limited to, those relating to [added: revenue recognition,] restructuring, pensions, recoverability of assets including customer receivables, [added: valuation of goodwill and intangibles,] contingencies, share-based payments, [removed: income taxes] and [removed: estimates and assumptions used for our long term outsourcing contracts.][added: income taxes.]

These assumptions and estimates involve the exercise of judgment and discretion, which may evolve over time in light of operational experience, regulatory direction, developments in accounting [removed: principles] [added: principles,] and other factors.

Actual results could differ from these estimates, or changes in assumptions, [removed: estimates or policies] [added: estimates, policies,] or [removed: the] developments in the business [removed: or the application of accounting principles related to long-term contracts] may change our initial [removed: estimates of future contract results,] [added: estimates,] which could materially affect the Consolidated Statements of Income, Comprehensive Income, Financial Position, Shareholders’ Equity and Cash Flows.

Factors that may be considered in assessing whether goodwill or [removed: intangible] [added: other long-lived] assets may not be recoverable include a decline in our share price or market capitalization, reduced estimates of future cash flows and slower growth rates in our industry.

Business Risks

Solutions, and Data and Analytic Services revenue lines.

We face significant competitive pressures.

As a global professional services firm, we compete with global, national, regional and local insurance companies who market and service their own products, other financial services providers, brokers, and investment managers, independent firms, and consulting organizations affiliated with accounting, information systems, technology, and financial services firms.

This competition is intensified by an industry trend where clients engage multiple brokers to service different portions of their accounts.

If we fail to respond successfully to the competition we face, our financial condition or results of operations might be adversely affected.

Furthermore, our ability to limit our potential liability is restricted in certain jurisdictions

Approximately 56% of our consolidated revenue is non-U.S., attributed on the basis of where the services are performed, and the exposures created can have significant currency volatility.

In addition, contributions are generally based on statutory requirements and local funding practices, which may differ from measurements under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).

such provisions, if enacted or promulgated, would not have retroactive application to us, the Redomestication or any subsequent actions.

U.S. federal income tax reform could create uncertainty and adversely affect our business and financial condition.

On December 22, 2017, U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Act”), was signed into law, significantly changing the U.S. Internal Revenue Code.

These changes include, among other things, lowering the corporate income tax rate, subjecting certain future foreign subsidiary earnings, whether or not distributed, to U.S. tax under a Global Intangible Low-Taxed Income provision, imposing a new alternative “Base Erosion and Anti-Abuse Tax” on U.S. corporations that limits deductions for certain amounts payable to foreign affiliates, imposing significant additional limitations on the deductibility of interest payable to related and unrelated lenders, further limiting deductible executive compensation, and imposing a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries through the end of 2017.

We continue to analyze how the Tax Reform Act may impact our results of operations.

The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act.

The Company has recognized the provisional tax impacts related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017.

The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis of the law, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act.

This continued analysis and resulting uncertainty, along with many of the changes effected pursuant to the Tax Reform Act, may have an adverse or volatile effect on our tax rate in fiscal years 2018 and beyond, thereby affecting our results of operations.

Significant judgment is required in determining our worldwide provision for income taxes, and our determination of the amount of our tax liability is always subject to review by applicable tax authorities.

We periodically evaluate our estimates and assumptions including,

The Company is organized as a holding company, a legal entity separate and distinct from our operating entities.

if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods.

In addition to the complexity of the laws and regulations themselves, the development of new laws and regulations or changes in application or interpretation of current laws and regulations also increases our legal and regulatory compliance complexity.

For instance, The General Data Protection Regulation (the “GDPR”), effective in May 2018, creates a range of new compliance obligations, increases financial penalties for non-compliance, and extends the scope of the European Union data protection law to all companies processing data of European Union residents, wherever the company’s location.

Complying with the GDPR will cause us to incur substantial operational costs and may require us to change our business practices.

For instance, increased scrutiny by competition authorities may increase our costs of doing business or force us to change the way we conduct business or refrain from or otherwise alter the way we engage in certain activities.

Additionally, we operate in many different business lines, which may occasionally intersect with each other, such as placing both insurance and reinsurance or providing both investment consultancy and fiduciary management services.

If we fail to control possible resulting conflicts of interest, we could be subject to civil litigation, fines, penalties or criminal sanctions and could be prohibited from participating in one or more lines of business.

English law imposes additional restrictions on certain corporate actions.

| • | the U.S. proceedings not having been brought in breach of a jurisdiction or arbitration clause except with the agreement of the defendant or the defendant’s subsequent submission to the jurisdiction of the court; |

| • | the U.S. judgment being final and conclusive on the merits in the sense of being final and unalterable in the court which pronounced it and being for a definite sum of money; |

| • | the recognition or enforcement, as the case may be, of the U.S. judgment not contravening English public policy in a sufficiently significant way or contravening the Human Rights Act 1998 (or any subordinate legislation made thereunder, to the extent applicable); |

| • | the U.S. judgment not being for a sum payable in respect of taxes, or other charges of a like nature, or in respect of a penalty or fine, or otherwise based on a U.S. law that an English court considers to be a penal or revenue law; |

| • | the U.S. judgment not having been arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damages sustained, and not otherwise being a judgment contrary to section 5 of the Protection of Trading Interests Act 1980 or is a judgment based on measures designated by the Secretary of State under Section 1 of that Act; |

| • | the U.S. judgment not being a judgment on a matter previously determined by an English court, or another court whose judgment is entitled to recognition (or enforcement as the case may be) in England, in proceedings involving the same parties which conflicts with an earlier judgment of such court; |

| • | the party seeking enforcement (being a party who is not ordinarily resident in some part of the U.K. or resident in an EU Member State) providing security for costs, if ordered to do so by the English courts; and |

| • | the English enforcement proceedings being commenced within the relevant limitation period. |

If an English court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for this purpose.

These methods generally permit the English court discretion to prescribe the manner of enforcement.

Also note that, in any enforcement proceedings, the judgment debtor may raise any counterclaim that could have been brought if the action had been originally brought in England unless the subject of the counterclaim was in issue and denied in the U.S. proceedings.

Risks Relating to the Company Generally

Competitive Risks

In addition, our revenues from many of our outsourcing contracts depend upon the number of our clients’ employees or the number of participants in our clients’ employee benefit plans and could be adversely affected by layoffs.

We may also experience decreased demand for our services as a result of postponed or terminated outsourcing of human resources functions.

Reduced demand for our services could increase price competition.

We face significant competitive pressures in each of our businesses.

In this regard, we compete with a large number of global, national, regional and local insurance companies and other financial services providers and brokers.

Our HR Solutions segment competes with a large number of independent firms and consulting organizations affiliated with accounting, information systems, technology and financial services firms around the world.

Many of our competitors in this area are expanding the services they offer or reducing prices in an attempt to gain additional business.

Additionally, some competitors have established, and are likely to continue to establish, cooperative relationships among themselves or with third parties to increase their ability to address client needs.

we have.

To respond to increased competition and pricing pressure, we may have to lower the cost of our services or decrease the level of service provided to clients, which could have an adverse effect on our financial condition or results of operations.

These exposures may change over time, and they could have a material adverse impact on our financial results and cash flows.

Our five largest non-U.S. dollar exposures are the British pound, Euro, Australian dollar, Canadian dollar and Indian rupee; however, we also have exposures to other currencies that can have significant currency volatility.

Furthermore, seemingly nationally or regionally localized political and economic changes could have a wider, negative impact on our businesses that expands beyond our operations in the immediately affected jurisdiction.

The United Kingdom’s anticipated formal initiation of a withdrawal process from the European Union has created significant uncertainty about the future relationship between the United Kingdom and the European Union, and has given rise to calls for the governments of other European Union member states to consider withdrawal.

These developments have created uncertainty and may have a material adverse effect on global economic conditions and the stability of global financial markets.

Lack of clarity about future United Kingdom laws and regulations, including financial laws and regulations, tax and free trade agreements, immigration laws and employment laws, could also depress economic activity and have a material adverse effect on our business, financial condition and results of operations.

Additionally, the continued concerns regarding the ability of certain European countries to service their outstanding debt has led to questions regarding the future viability of the Euro as the common currency for the area as various scenarios could result in some countries choosing to return to their former local currencies in an effort to regain control over their domestic economies and monetary policies.

This uncertainty has had a dampening effect on growth potential in Europe, and if it deteriorates, may have a material negative impact on our European business as well as that of our clients.

potentially result in charges to our statement of operations and reduce the usefulness of liquidity alternatives denominated in that currency such as our multicurrency U.S. credit facility.

These factors would include such things as the reactions of third parties with whom we enter into contracts and do business and the reactions of investors, analysts, and U.K. and U.S. taxing and other authorities.

other matters.

In addition, due to differences in tax rates, repatriation of funds from certain countries into the U.K. through the U.S. could have unfavorable tax ramifications for us.

For example, FATCA has resulted in, and will likely continue to result in, increased compliance costs.

FATCA requires certain of our subsidiaries, affiliates and other entities to obtain valid FATCA documentation from payees prior to remitting certain payments to such payees.

In the event we do not obtain valid FATCA documents, we may be obliged to withhold a portion of such payments.

This obligation is shared with our customers and clients who may fail to comply, in whole or in part.

In such circumstances, we may incur FATCA compliance costs including withholding taxes, interest and penalties.

In addition, regulatory initiatives and changes in the regulations and guidance promulgated under FATCA may increase our costs of operations, and could adversely affect the market for our services as intermediaries, which could adversely affect our operations, results of operations and financial condition.

Furthermore, as we enter new jurisdictions or lines of businesses and other developments in our services,

| • | the selling of insurance by insurance companies directly to insureds; |

Likewise, increased government involvement in the insurance or reinsurance markets could curtail or replace our opportunities and negatively affect our results of operations and financial condition.

These and other initiatives from national, state and local officials may subject us to judgments, settlements, fines or penalties, or

English law imposes some restrictions on certain corporate actions by which previously, as a Delaware corporation, we were not constrained.

| • | the U.S. judgment must be for a debt or definite sum of money; |

| • | the U.S. judgment must be final and conclusive; |

| • | the enforcement of the U.S. judgment must not be contrary to U.K. public policy; and |

| • | the proceedings in which the U.S. judgment was obtained must not have been conducted contrary to the rules of natural justice. |

Our failure to adhere

EXECUTIVE SUMMARY OF [removed: 2016] [added: 2017] FINANCIAL RESULTS

The following is a summary of our [removed: 2016] [added: 2017] financial [removed: results:][added: results from continuing operations:]

[removed: | • | Operating expenses decreased $113 million, or 1%, to $9.7 billion in 2016 due] [added: The increase was] primarily [removed: to a $248 million favorable impact from changes in foreign currency exchange rates, a $176 million decrease in expenses related to legacy litigation incurred in the prior year, a $144 million decrease in the core expense base resulting from acquisitions, net of divestitures, and a $37 million decrease in intangible asset amortization, partially offset] [added: driven] by [added: a] $220 million [removed: of] [added: increase in] non-cash [removed: expenses] [added: expense] related to certain pension [removed: settlements,] [added: settlements and] an increase in expense associated with [removed: 3%] [added: 4%] organic revenue growth, [added: partially offset by a $169 million favorable impact from foreign currency translation] and [removed: $15] [added: a $97] million [removed: of transaction costs incurred] [added: decrease in expenses] related to [removed: future portfolio repositioning activities. |][added: acquisitions, net of divestitures.]

[removed: | • |] Net income attributable to Aon [removed: shareholders was $1.4 billion, an increase of $11] [added: Shareholders increased to $1,396] million, or [removed: 1%, from 2015. Diluted earnings] [added: $5.16] per [added: diluted] share [removed: increased 6% to $5.16] in [removed: 2016 from] [added: 2016, compared to $1,385 million, or] $4.88 [added: diluted net income per share,] in 2015. [removed: |]

The following is our measure of performance against these four metrics [added: from continuing operations] for [removed: 2016:][added: 2017:]

| • | Adjusted diluted earnings per share from [removed: net income attributable to Aon’s shareholders,] [added: continuing operations,] a non-GAAP [removed: metric as] [added: measure] defined under the caption “Review of Consolidated Results — Adjusted Diluted Earnings per Share,” was [removed: $6.59] [added: $6.52] per share in [removed: 2016,] [added: 2017,] an increase of [removed: $0.41] [added: $0.94] per share, or [removed: 7%,] [added: 17%,] from [removed: $6.18] [added: $5.58] per share in [removed: 2015.] [added: 2016.] The increase demonstrates solid operational performance and effective capital management, highlighted by [removed: $1.3] [added: a record $2.4] billion of share repurchase during [removed: 2016.] [added: 2017, partially offset by a higher effective tax rate and losses recognized in other expense.] |

| • | Free cash flow, a non-GAAP [removed: metric as] [added: measure] defined under the caption “Review of Consolidated Results — Free Cash Flow,” was [removed: $2.1 billion] [added: $486 million] in [removed: 2016, an increase] [added: 2017, a decrease] of [removed: $385 million,] [added: $1.2 billion,] or [removed: 22%,] [added: 71%,] from $1.7 billion in [removed: 2015.] [added: 2016.] The [removed: increase] [added: decrease] in free cash flow from the prior year was driven by [removed: record] [added: a decrease in] cash flow from operations of [removed: $2.3] [added: $1.2] billion and a [removed: 23%,] [added: 17%,] or [removed: $68] [added: $27] million, [removed: decrease] [added: increase] in capital expenditures. |

Our consolidated results [removed: of operations follow (in millions):][added: are as follow:]

| Years [removed: ended] [added: Ended] December 31 | [removed: 2016] | [added: 2017] | | | [removed: 2015] | [added: 2016] | | | [removed: 2014] | [added: 2015] | | [added: |]

| [removed: Revenue:] [added: Revenue] | | | | | | | | | | | | [added: |]

| [removed: Expenses:] [added: Expenses] | | | | | | | | | | | | [added: |]

| Interest income | [removed: 9] | [added: 27] | | | [removed: 14] | [added: 9] | | | [removed: 10] | [added: 14] | | [added: |]

| Interest expense | [added: |] (282 | | ) | | [removed: (273] [added: (282] | | ) | | [removed: (255] [added: (273] | | ) |

| Other income [added: (expense)] | [removed: 36] | [added: (39] | | [added: )] | [removed: 100] | [added: 36] | | | [removed: 44] | [added: 100] | | [added: |]

| Net income | [removed: 1,430] | [added: 1,263] | | | [removed: 1,422] | [added: 1,430] | | | [removed: 1,431] | [added: 1,422] | | [added: |]

| Less: Net income attributable to noncontrolling interests | [removed: 34] | [added: 37] | | | [removed: 37] | [added: 34] | | | [removed: 34] | [added: 37] | | [added: |]

| Net income attributable to Aon shareholders | [added: |] $ | [removed: 1,396] [added: 1,226] | | | $ | [removed: 1,385] [added: 1,396] | | | $ | [removed: 1,397] [added: 1,385] | |

[removed: Revenue] [added: Total revenue] decreased by [removed: $55] [added: 1%, or $71] million, to [removed: $11.6] [added: $9.4] billion in 2016, compared to [removed: $11.7] [added: $9.5] billion in 2015.

The decrease was driven by a [removed: 2%] [added: 3% unfavorable] impact from [removed: unfavorable] foreign [removed: exchange rates] [added: currency translation] and a 2% decrease [removed: in commissions and fees] related to acquisitions, net of [added: divestitures, partially offset by organic revenue growth of 4%.]

[removed: Organic] [added: Health Solutions organic] revenue growth [removed: in the Risk Solutions segment] was [added: 7% in 2017] driven [added: primarily] by [removed: solid] [added: strong] growth [removed: across] [added: in health & benefits brokerage, in] both the Americas and [removed: International businesses.][added: internationally.]

Reinsurance [added: Solutions] organic revenue growth was [added: 1% in 2016] driven by net new business growth in treaty placements globally and modest growth in facultative placements, partially offset by an unfavorable market impact in treaty and a decline in capital markets transactions and advisory business.

[removed: Consulting] [added: Retirement Solutions] organic revenue growth was [added: 2% in 2016] driven by [removed: retirement solutions, including] [added: growth in] investment [removed: consulting and] [added: consulting, primarily for] delegated investment [removed: solutions, and communications consulting.][added: management.]

Compensation and benefits increased [removed: $77] [added: $82] million, or 1%, [added: in 2016] compared to 2015.

[removed: The increase] [added: This decrease] was primarily driven by a [removed: $220 million increase in non-cash expense related to certain pension settlements and an increase in expense associated with 3% organic revenue growth, partially offset by a $169] [added: $12] million favorable impact from [removed: changes in] foreign currency [removed: exchange rates] [added: translation] and a [removed: $97] [added: $7] million decrease in the core expense base resulting from acquisitions, net of [removed: divestitures.][added: divestitures, partially offset by an increase in expense associated with 4% organic revenue growth.]

[removed: Other general expenses decreased $190 million, or 6%, compared to 2015 due] [added: This decrease was] primarily [removed: to] [added: driven by] a $176 million decrease in expense related to legacy litigation incurred in [removed: the prior year,] [added: 2015,] a [removed: $79] [added: $43] million favorable impact from [removed: changes in foreign] currency [removed: exchange rates,] [added: translation, and] a [removed: $47] [added: $39] million decrease in the core expense base resulting from acquisitions, net of divestitures, [removed: and a $37 million decrease in intangible amortization,] partially offset by an increase in expense to support [removed: 3%] [added: 4%] organic revenue [removed: growth] [added: growth,] and $15 million of transaction costs [removed: incurred] related to [removed: portfolio repositioning activities including] the [removed: Transaction.][added: Divested Business.]

Interest income represents income earned on [removed: Cash and] [added: operating] cash [removed: equivalents] [added: balances] and [removed: Short-term] [added: other income-producing] investments.

Interest income [removed: decreased] [added: was $9 million in 2016, a decrease of] $5 million, or 36%, from 2015, due to marginally lower average interest rates globally.

Interest expense, which represents the cost of our [removed: worldwide] debt obligations, [removed: increased $9 million, or 3%, from 2015.][added: was $282 million in 2017, similar to the prior year period.]

Other Income [added: (Expense)]

Other income in 2016 [removed: includes, among other things,] [added: includes] $39 million in net gains on disposition of businesses and [removed: $13 million of] equity [removed: earnings,] [added: earnings of $13 million,] partially offset by [removed: foreign exchange losses of $2 million and] a $14 million net loss on certain financial [removed: instruments.][added: instruments and foreign exchange losses of $2 million.]

Other income in 2015 [removed: includes] [added: includes, among other things,] $82 million in net gains on disposition of businesses, foreign exchange gains of $30 million, [added: and] equity earnings of $13 million, partially offset by a [removed: $5] [added: $24] million net loss on certain [removed: long term investments and a $19 million loss from derivatives.][added: financial instruments.]

Income [added: From Continuing Operations] before Income Taxes

[added: |] Income [removed: Taxes][added: taxes (1) | | 250 | | | | 55 | | | | 305 | | |]

The effective tax rate on net income [added: from continuing operations] was [removed: 14.3%] [added: 10.6%] in 2016 and [removed: 15.8%] [added: 12.3%] in 2015.

The 2016 and 2015 [added: tax] rates reflect changes in the geographical distribution of income, the impact from certain pension settlements in the second and fourth quarters of 2016, a reduction in U.S. income resulting from the settlement of legacy litigation in the second quarter of 2015, and the impact of certain discrete items.

Consolidated Results for [removed: 2015] [added: 2017] Compared to [removed: 2014][added: 2016]

[removed: Consulting] [added: Retirement Solutions] organic revenue growth was [added: 3% in 2017] driven by [removed: retirement solutions, including] [added: double-digit growth in] investment [removed: consulting and] [added: consulting, primarily for] delegated investment [removed: solutions,] [added: management, as well as solid growth in the Talent, Rewards,] and [removed: compensation consulting.][added: Performance practice.]

[removed: The] [added: This] decrease was [added: primarily] driven by a [removed: $432] [added: $4] million favorable impact from [removed: changes in] foreign currency [removed: exchange rates, partially offset by $14] [added: translation and a $4] million [removed: increase] [added: decrease] in [added: the core] expenses [removed: resulting from] [added: associated with] acquisitions, net of [removed: divestitures and] [added: divestitures, partially offset by] an increase in expense associated with [removed: 3%] [added: 4%] organic revenue growth.

The effective tax rate on net income [added: from continuing operations] was [removed: 15.8%] [added: 36.5%] in [removed: 2015] [added: 2017] and [removed: 18.9%] [added: 10.6%] in [removed: 2014.][added: 2016.]

Net income [added: attributable to Aon shareholders] decreased to [removed: $1.39 billion ($4.88 diluted net income] [added: $1.2 billion, or $4.70] per [removed: share)] [added: diluted share,] in [removed: 2015,] [added: 2017,] compared to $1.4 [removed: billion ($4.66 diluted net income] [added: billion, or $5.16] per [removed: share)] [added: diluted share,] in [removed: 2014.][added: 2016.]

Aon plc is a leading global professional services firm that provides advice and solutions to clients focused on risk, retirement, and health, delivering distinctive client value via innovative and effective risk management and workforce productivity solutions.

Management is leading a set of initiatives designed to strengthen Aon and unite the firm with one portfolio of capability enabled by proprietary data and analytics and one operating model to deliver additional insight, connectivity, and efficiency.

The divestiture of the benefits administration and business process outsourcing in the second quarter of 2017 represents the next step of our strategy, reinforces our focus to provide advice and solutions, and further aligns our portfolio around our clients’ highest priorities.

Further, it reinforces our ROIC decision-making process and emphasis on operating cash flow.

Discontinued Operations

On February 9, 2017, the Company entered into a Purchase Agreement with Tempo Acquisition, LLC to sell the Divested Business to the Buyer, an entity formed and controlled by affiliates of The Blackstone Group L.P., and certain designated purchasers that are direct or indirect subsidiaries of the Buyer.

On May 1, 2017, the Buyer purchased all of the outstanding equity interests in each of the Divested Business’ subsidiaries, plus certain related assets and liabilities, for a purchase price of $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and deferred consideration of up to $500 million.

Cash proceeds after customary adjustments and before taxes due were $4.2 billion.

Aon and the Buyer entered into certain transaction related agreements at the closing, including two commercial agreements, a transition services agreement, certain intellectual property license agreements, sub-leases and other customary agreements.

Aon expects to continue to be a significant client of the Divested Business and the Divested Business has agreed to use Aon for its broking and other services for a specified period of time.

In the twelve months ended December 31, 2017, the Company recorded a gain on sale, net of taxes, of $779 million and a non-cash impairment charge to its tradenames associated with the Divested Business of $380 million as these assets were not sold to the Buyer.

Additionally, effective May 1, 2017, consistent with operating as one segment, the Company has implemented a three\-year strategy to transition to a unified Aon brand.

As a result, Aon commenced amortization of all indefinite lived tradenames and prospectively accelerated amortization of its finite lived tradenames over the three\-year period.

The accelerated amortization and impairment charge are included in Amortization and impairment of intangible assets on the Consolidated Statement of Income.

Financial Results

| • | Revenue increased 6%, or $589 million, to $10.0 billion in 2017 compared to 2016, reflecting 4% organic revenue growth and a 2% increase related to acquisitions, net of divestitures. Organic revenue growth for the year was driven by growth across every major revenue line, with particular strength in Reinsurance Solutions, Health Solutions, and Data & Analytic Services |

| • | Operating expenses increased $1.2 billion, or 16%, to $9.0 billion in 2017 compared to 2016 due primarily to $497 million of restructuring costs, a $380 million non-cash impairment charge to the indefinite lived tradenames associated with the sale of the Divested Business, a $258 million increase in expenses related to acquisitions, net of divestitures, $143 million of accelerated amortization related to tradenames, and an increase in expense associated with 4% organic revenue growth, partially offset by $165 million of savings related to restructuring and other operational improvement initiatives and a $92 million decrease in expenses related to certain pension settlements. |

| • | Operating margin decreased to 9.8% in 2017 from 17.4% in 2016. The decrease in operating margin from the prior year is primarily driven by an increase in operating expenses, described above, partially offset by organic revenue growth of 4% and core operational improvement. |

| • | Due to the factors set forth above, income from continuing operations was $435 million in 2017, a decrease of $818 million, or 65%, from 2016. |

| • | Cash flow provided by operating activities was $669 million in 2017, a decrease of $1.2 billion, or 63%, from $1.8 billion in 2016, due primarily to cash tax payments of approximately $940 million associated with the Divested Business, $280 million of cash payments for restructuring charges, and $45 million of transaction costs related to the Divested Business, partially offset by operational improvement. |

| • | Organic revenue growth, a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth,” was 4% in 2017, comparable to 4% organic growth in the prior year. Organic revenue growth was driven by growth across every major revenue line, with particular strength in Reinsurance Solutions, Health Solutions, and Data & Analytic Services. |

| • | Adjusted operating margin, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 23.4% in 2017, compared to 21.6% in the prior year. The increase in adjusted operating margin primarily reflects organic revenue growth of 4%, core operational improvement, and $165 million of savings related to restructuring and other operational improvement initiatives. |

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | |

| | | Years ended December 31 | | | | | | | | | | |

| (millions) | | 2017 | | | | 2016 | | | | 2015 | | |

| Total revenue | | $ | 9,998 | | | $ | 9,409 | | | $ | 9,480 | |

| Compensation and benefits | | 6,089 | | | | 5,687 | | | | 5,605 | | |

| Information technology | | 419 | | | | 386 | | | | 389 | | |

| Premises | | 348 | | | | 343 | | | | 362 | | |

| Depreciation of fixed assets | | 187 | | | | 162 | | | | 164 | | |

| Amortization and impairment of intangible assets | | 704 | | | | 157 | | | | 173 | | |

| Other general expenses | | 1,272 | | | | 1,036 | | | | 1,200 | | |

| Total operating expenses | | 9,019 | | | | 7,771 | | | | 7,893 | | |

| Income from continuing operations before income taxes | | 685 | | | | 1,401 | | | | 1,428 | | |

| Income taxes | | 250 | | | | 148 | | | | 175 | | |

| Net income from continuing operations | | 435 | | | | 1,253 | | | | 1,253 | | |

| Income from discontinued operations, net of tax | | 828 | | | | 177 | | | | 169 | | |

Total revenue increased by 6%, or $589 million, to $10.0 billion in 2017, compared to $9.4 billion in 2016.

During 2016, we continued to face headwinds that adversely impacted our business.

In our Risk Solutions segment, these headwinds included adverse changes in foreign currency exchange rates, economic weakness in certain regions around the globe and a negative market impact in our Reinsurance business.

In our HR Solutions segment, these headwinds included price compression in our benefits administration business and economic weakness in certain regions around the globe.

| | |

| --- | --- |

| • | Revenue decreased $55 million to $11.6 billion in 2016 due primarily to a 2% unfavorable impact from changes in foreign currency exchange rates and a 2% decrease in commissions and fees related to acquisitions, net of divestitures, partially offset by organic revenue growth of 3% in the Risk Solutions segment and 3% in the HR Solutions segment. Organic revenue growth for the year was driven by strong new business generation and solid management of the renewal book portfolio across our Risk Solutions segment, as well as solid growth in both our Consulting and Outsourcing businesses within HR Solutions. |

| • | Operating margin increased to 16.4% in 2016 from 15.8% in 2015. The increase in operating margin from the prior year is primarily driven by organic revenue growth of 3% and return on investments across the portfolio as well as a decrease in expense related to legacy litigation and the favorable impact from changes in foreign currency exchange rates, partially offset by non-cash expenses related to certain pension settlements. Risk Solutions operating margin increased to 21.2% in 2016 from 20.3% in 2015. HR Solutions operating margin increased to 13.3% in 2016 from 12.5% in 2015. |

| • | Cash flow provided by operating activities was $2.3 billion in 2016, an increase of $317 million, or 16%, from $2.0 billion in 2015, due primarily to an increase in underlying net income after adjusting for certain non-cash pension expenses, lower cash pension contributions, and lower cash tax payments. |

| • | On February 9, 2017, we entered into an agreement to sell our Benefits Administration and Business Process Outsourcing (BPO) Portfolio (the “Business”) for cash consideration of $4.3 billion payable at closing plus additional cash consideration of up to $500 million based on future performance of the Business (the “Transaction”). The Business is within the HR Solutions segment described further below. The completion of the Transaction is subject to customary closing conditions, and the Transaction is expected to close by the end of the second quarter of 2017. In connection with the Transaction, we expect to implement a cost reduction program that will result in a future charge to the financial statements. We believe the cost reduction program will reduce stranded costs, create greater efficiency, and contribute towards the Company's objective of being accretive to analysts’ consensus earnings of $7.97 per share in 2018, as published by FactSet. Refer to Note 18 “Subsequent Event - Disposition of Benefits Administration and Business Process Outsourcing” of the Notes to Consolidated Financial Statements for additional details regarding the Transaction. |

| • | Organic revenue growth, a non-GAAP metric as defined under the caption “Review of Consolidated Results — Organic Revenue Growth,” was 3% in 2016. Organic revenue growth was driven by growth across every major business in both Risk Solutions and HR Solutions. In Risk Solutions, organic revenue growth was driven by strong growth in Retail brokerage across both the Americas and International businesses, as well as modest growth in Reinsurance. In HR Solutions, organic revenue growth was primarily driven by growth in health care exchanges and in HR BPO for cloud-based solutions as well as growth in investment and communications consulting. |

| • | Adjusted operating margin, a non-GAAP metric as defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 20.8% for Aon overall, 24.5% for the Risk Solutions segment, and 18.4% for the HR Solutions segment in 2016. In 2015, adjusted operating margin was 20.0% for Aon overall, 23.6% for the Risk Solutions segment, and 18.1% for the HR Solutions segment. The increase in adjusted operating margin for the Risk Solutions segment primarily reflects solid organic revenue growth and return on investments in data and analytics. The increase in adjusted operating margin for the HR Solutions segment primarily reflects solid organic revenue growth and expense discipline, partially offset by lost operating income and stranded costs related to previous dispositions, as well as unfavorable impact from changes in foreign currency exchange rates. |

As described in Note 1 “Basis of Presentation - Revision of Previously Issued Financial Statements” of the Notes to Consolidated Financial Statements, during the fourth quarter of 2016, we identified errors that impacted the years ended December 31, 2015 and 2014.

The corrections for the errors, which we have concluded are immaterial, individually and in the aggregate, to all prior-period consolidated financial statements, are reflected herein.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Commissions, fees and other | $ | 11,605 | | | $ | 11,661 | | | $ | 12,019 | |

| Fiduciary investment income | 22 | | | | 21 | | | | 26 | | |

| Total revenue | 11,627 | | | | 11,682 | | | | 12,045 | | |

| Compensation and benefits | 6,914 | | | | 6,837 | | | | 7,014 | | |

| Other general expenses | 2,807 | | | | 2,997 | | | | 3,065 | | |

| Total operating expenses | 9,721 | | | | 9,834 | | | | 10,079 | | |

| Operating income | 1,906 | | | | 1,848 | | | | 1,966 | | |

| Income before income taxes | 1,669 | | | | 1,689 | | | | 1,765 | | |

| Income taxes | 239 | | | | 267 | | | | 334 | | |

Revenue

divestitures, partially offset by organic revenue growth of 3% in the Risk Solutions segment and 3% in the HR Solutions segment.

Record new business generation in US Retail, as well as strength in Affinity and growth across Latin America drove organic revenue growth in the Americas.

International organic revenue growth was driven by growth across every major region; including Asia, EMEA, and the Pacific, despite economic weakness in certain countries.

Organic revenue growth in the HR Solutions segment was driven by solid growth in both Consulting and Outsourcing.

Strong growth in health care exchanges and new client wins in HR BPO for cloud-based solutions drove organic revenue growth in Outsourcing.

It does not include interest earned on funds held on behalf of clients.

The increase in interest expense primarily reflects an increase in total debt outstanding.

Income before income taxes was $1.7 billion in 2016, a decrease of $20 million, or 1%, from $1.7 billion in 2015 due to drivers identified above.

Net income increased to $1.40 billion ($5.16 diluted net income per share) in 2016, compared to $1.39 billion ($4.88 diluted net income per share) in 2015.

Revenue decreased by $363 million, or 3%, to $11.7 billion in 2015, compared to $12.0 billion in 2014.

The decrease was driven by a 6% impact from unfavorable foreign exchange rates, partially offset by organic revenue growth of 3% in the Risk Solutions segment and 4% in the HR Solutions segment.

Growth across all regions and product lines, including strong new business generation in US Retail, drove organic revenue growth in the Americas.

International organic revenue growth in 2015 was driven by solid growth across Asia, the Pacific, and emerging markets, and strong management of the renewal book portfolio in continental Europe despite economic weakness.

Reinsurance was down modestly due to an unfavorable market impact in treaty and a decline in capital markets transactions and advisory business, which more than offset the new business growth in treaty placements globally and modest growth in facultative placements.

Strong growth in health care exchanges, new client wins in HR BPO for cloud-based solutions, and project-related revenue in benefits administration drove organic revenue growth in Outsourcing.

We are exposed to potential fluctuations in earnings, cash flows, and the fair [removed: value] [added: values] of certain of our assets and liabilities due to changes in interest rates and foreign exchange rates.

Our primary exposures include exchange rates between the U.S. [removed: dollar] [added: Dollar] and the [removed: euro,] [added: Euro,] the British [removed: pound,] [added: Pound,] the Canadian [removed: dollar,] [added: Dollar,] the Australian [removed: dollar, and] [added: Dollar,] the Indian [removed: rupee.][added: Rupee, and the Japanese Yen.]

Our U.K. subsidiaries earn a portion of their revenue in U.S. [removed: dollars] [added: Dollars, Euros,] and [removed: euros,] [added: Japanese Yen,] but most of their expenses are incurred in British [removed: pounds.][added: Pounds.]

At December 31, [removed: 2016,] [added: 2017,] we have hedged approximately 45% of our U.K. subsidiaries’ expected exposures to [removed: both] [added: the] U.S. [removed: dollar] [added: Dollar, Euro,] and [removed: Euro] [added: Japanese Yen] transactions for the years ending December 31, [removed: 2017 and] 2018, [added: 2019, and 2020] respectively.

The potential loss in future earnings from foreign exchange derivative instruments resulting from a hypothetical 10% adverse change in year-end exchange rates would be [removed: $32] [added: $31] million and [removed: $18] [added: $14] million at December 31, [removed: 2017 and] 2018 [added: and 2019] respectively.

A hypothetical, instantaneous parallel decrease in the year-end yield curve of 100 basis points would cause a decrease, net of derivative positions, of [removed: $41] [added: $41.6] million to [removed: both 2017 and] [added: each of] 2018 [added: and 2019] pretax [removed: income, respectively.][added: income.]

A corresponding increase in the year-end yield curve of 100 basis points would cause an increase, net of derivative positions, of [removed: $41] [added: $41.6] million to [removed: both 2017 and] [added: each of] 2018 [added: and 2019] pretax [removed: income, respectively.][added: income.]

We have long-term debt outstanding with a fair market value of $6.3 billion [removed: and $5.4 billion] at December 31, [removed: 2016] [added: 2017] and [removed: 2015, respectively.][added: 2016.]

This fair value was greater than the carrying value by [removed: $0.4 billion] [added: $600 million] at December 31, [removed: 2016,] [added: 2017,] and [removed: $0.2 billion] [added: $395 million] greater than the carrying value at December 31, [removed: 2015.][added: 2016.]

A hypothetical 1% increase or decrease in interest rates would change the fair value by a decrease of 8% or an increase of 9%, respectively, at December 31, [removed: 2016.][added: 2017.]

Aon plc (which may be referred to as “Aon,” “the Company,” “we,” “us,” or “our”) is [removed: the] [added: a] leading global [removed: provider of risk management services, insurance and reinsurance brokerage,] [added: professional services firm that provides advice] and [removed: human resource consulting] [added: solutions to clients focused on risk, retirement,] and [removed: outsourcing,] [added: health,] delivering distinctive client value via innovative and effective risk management and workforce productivity [removed: solutions.][added: solutions that are under-pinned by industry-leading data and analytics.]

Our strategy is to be the preeminent professional service firm in the world, focused on [removed: the topics of] risk and people.

[removed: We have] [added: At December 31, 2017, we employed] approximately [removed: 69,000] [added: 50,000] employees and [removed: conduct] [added: conducted] our operations through various subsidiaries in more than 120 countries and sovereignties.

Our clients are globally diversified and include all market segments (individuals through personal lines, mid-market [removed: companies] [added: companies,] and large global companies) and almost every industry in the economy in over 120 countries and sovereignties.

This diversification of our customer base helps provide us stability in different economic scenarios that could affect specific industries, customer [removed: segments] [added: segments,] or geographies.

Our [removed: Risk Solutions segment] [added: business] generates revenues primarily through commissions, [removed: fees from clients, and] compensation from insurance and reinsurance companies for services we provide to [removed: them.][added: them, and fees from clients.]

[removed: Commission rates] [added: Commissions] and fees [added: for brokerage services] vary depending upon several factors, which may include the amount of premium, the type of insurance or reinsurance coverage provided, the particular services provided to a client, [removed: insurer] [added: insurer,] or reinsurer, and the capacity in which we act.

Payment terms are consistent with current industry [removed: practice.][added: practices.]

We typically hold funds on behalf of [removed: clients such as] [added: clients, including] premiums received from clients and claims due to clients that are in transit to and from insurers.

These funds held on behalf of clients are generally invested in interest-bearing premium trust [removed: accounts] [added: accounts,] and can fluctuate significantly depending on when we collect cash from our clients and when premiums are remitted to the insurance carriers.

[removed: We earn interest on these accounts; however, the] [added: The] principal is segregated and not available for general operating [removed: purposes.][added: purposes, though we earn interest on these accounts.]

Our [removed: Risk Solutions] business operates in [removed: an environment that is] [added: a] highly competitive and [removed: very fragmented.][added: fragmented environment.]

We compete with other global insurance [removed: brokers,] [added: brokers and consulting companies,] including Marsh & McLennan Companies, Inc., Willis Towers Watson Public Limited Company, Arthur J Gallagher & Company, and Jardine Lloyd Thompson Group plc, as well as numerous specialist, [removed: regional] [added: regional,] and local firms in almost every area of our business.

We also compete with insurance and reinsurance companies that market and service their insurance products without the assistance of brokers or [removed: agents;] [added: agents,] and with other businesses that do not fall into the categories above, including [removed: commercial] [added: large financial institutions,] and [removed: investment banks, accounting firms,] [added: independent consulting firms] and [removed: consultants that provide risk-related services] [added: consulting organizations affiliated with accounting, information systems, technology,] and [removed: products.][added: financial services firms.]

Investment consulting provides public and private companies and other [removed: institutions, such as trustees,] [added: institutions] with advice on developing and maintaining investment programs across a broad range of plan types, including defined benefit plans, defined contribution plans, [removed: endowments] [added: endowments,] and foundations.

Due to buying patterns and delivery of certain products in the markets we serve, revenues recognized tend to be [removed: highest] [added: higher] in the fourth quarter of each fiscal year.

Our business activities are subject to licensing requirements and extensive regulation under the laws of countries in which we operate, [removed: as well as] [added: including] U.S. federal and state laws.

Regulatory authorities in the countries [removed: or] [added: and] states in the [removed: U.S.] [added: United States (“U.S.”)] in which [removed: the] [added: our] operating subsidiaries [removed: of our Risk Solutions segment] conduct business may require individual or company [removed: licensing] [added: licenses] to act as producers, brokers, agents, third-party administrators, managing general agents, reinsurance intermediaries, or adjusters.

The operating terms may vary according to the licensing requirements of the particular country or state, which may require, among other [removed: things] [added: things,] that a firm operates in the country or state through a local corporation.

These laws and regulations are enforced by the Financial Conduct Authority (“FCA”) in the [removed: U.K.,] [added: United Kingdom (“U.K.”),] by federal and state agencies in the U.S., and by various regulatory agencies and other supervisory authorities in other countries through the granting and revoking of licenses to do business, [added: the] licensing of agents, [added: the] monitoring of trade practices, policy form approval, limits on commission rates, and mandatory remuneration disclosure requirements.

Insurance authorities in the U.K., [removed: U.S.] [added: U.S.,] and certain other jurisdictions in which our subsidiaries operate [removed: also] have enacted laws and regulations governing the investment of funds, such as premiums and claims proceeds, held in a fiduciary capacity for others.

[removed: Certain of the retirement-related consulting services provided by Aon Hewitt and its subsidiaries and affiliates are subject to the] [added: Further,] pension and financial laws and [removed: regulations of applicable jurisdictions,] [added: regulations,] including oversight [removed: and/or] [added: and] supervision by the FCA in the U.K., the Securities and Exchange Commission (“SEC”) in the U.S., and regulators in other [removed: countries.][added: countries govern certain of the retirement-related consulting services provided by Aon and its subsidiaries and affiliates.]

[added: This includes] Aon [removed: Hewitt] subsidiaries that provide investment advisory services [removed: are] regulated by various U.S. federal authorities including the SEC and FINRA, as well as authorities on the state level.

[added: In addition, other services provided by Aon and its subsidiaries and affiliates, such as] trustee services and retirement and employee benefit program administrative services, are subject in various jurisdictions to pension, [removed: investment] [added: investment, securities,] and [removed: securities and/or] insurance laws and regulations [removed: and/or supervision by national regulators.][added: and supervision.]

No one client accounted for more than 1% of our consolidated total revenues in [removed: 2016.][added: 2017.]

Additionally, we place insurance with many insurance carriers, none of which individually accounted for more than 10% of the total premiums we placed on behalf of our clients in [removed: 2016.][added: 2017.]

Financial information relating to the types of services provided by us and the geographic areas of our operations is incorporated herein by reference to Note [removed: 15] [added: 17] “Segment Information” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this report.

This [removed: annual report] [added: Annual Report] on Form 10-K contains certain statements related to future results, or states our intentions, [removed: beliefs] [added: beliefs,] and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities [removed: Litigation Reform Act of 1995.]

| • | general economic and political conditions in [removed: different] [added: the] countries in which we do business around the world; |

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

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

| • | changes in the health care system or our relationships with insurance carriers; [removed: and] |

| • | our ability to implement initiatives intended to yield cost savings and the ability to achieve those cost [removed: savings.] [added: savings;] |

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form [removed: 8-K] [added: 8-K,] and all amendments to those reports are made available free of charge through our website (http://www.aon.com) as soon as [added: reasonably] practicable after such material is electronically filed with or furnished to the SEC.

Additionally, the SEC maintains a website [removed: (www.sec.gov)] [added: (http://www.sec.gov)] that contains reports, proxy and information statements, and other information.

Also posted on our website are the charters for our Audit, Compliance, Organization and Compensation, [removed: Governance/Nominating] [added: Governance/Nominating,] and Finance Committees, our Governance [removed: Guidelines] [added: Guidelines,] and our Code of Business Conduct.

On February 9, 2017, the Company entered into a Purchase Agreement with Tempo Acquisition, LLC (the “Purchase Agreement”) to sell its benefits administration and business process outsourcing business (the “Divested Business”) to an entity formed and controlled by affiliates of The Blackstone Group L.P. (the “Buyer”) and certain designated purchasers that are direct or indirect subsidiaries of the Buyer.

On May 1, 2017, the Buyer purchased all of the outstanding equity interests of the Divested Business, plus certain related assets and liabilities, for a purchase price of $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and deferred consideration of up to $500 million.

BUSINESS SEGMENT

Beginning in the first quarter of 2017 and following the sale of our Divested Business, the Company led a set of initiatives designed to strengthen Aon and unite the firm with one portfolio of capability enabled by proprietary data and analytics and one operating model to deliver additional insight, connectivity, and efficiency.

These initiatives reinforce Aon’s ROIC decision-making process and emphasis on free cash flow.

The Company is now operating as one segment that includes all of Aon’s continuing operations, which, as a global professional services firm, provides advice and solutions to clients focused on risk, retirement, and health through five principal products and service revenue lines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions, and Data & Analytic Services.

Collectively, these products and service revenue lines make up our one segment: Aon United.

In 2017, our consolidated total revenue was $9,998 million.

This includes $4,169 million in Commercial Risk Solutions, $1,429 million in Reinsurance Solutions, $1,755 million in Retirement Solutions, $1,515 million in Health Solutions, and $1,140 million in Data & Analytic Services, before intercompany eliminations.

Commercial Risk Solutions includes retail brokerage, cyber solutions, global risk consulting, and captives.

In retail brokerage, our team of expert risk advisors applies a client-focused approach to commercial risk products and services that leverage Aon’s global network of resources, industry-leading data and analytics, and specialized expertise.

Cyber solutions is one of the industry’s premier resources in cyber risk management.

Our strategic focus extends to identify and protect critical digital assets supported by best-in-class transactional capabilities, enhanced coverage expertise, deep carrier relationships, and incident response expertise.

Global risk consulting is a world leading provider of risk consulting services supporting clients to better understand and manage their risk profile through identifying and quantifying the risks they face.

We assist clients with the selection and implementation of the appropriate risk transfer, risk retention, and risk mitigation solutions, and ensure the continuity of their operations through claims consulting.

Captives is a leading global captive insurance solutions provider that manages over 1,100 insurance entities worldwide including captives, protected segregated and incorporated cell facilities, as well as entities that support Insurance Link Securities and specialist insurance and reinsurance companies.

Reinsurance Solutions includes treaty and facultative reinsurance brokerage and capital markets.

Treaty reinsurance brokerage addresses underwriting and capital objectives on a portfolio level, allowing our clients to more effectively manage the combination of premium growth, return on capital, and rating agency interests.

This includes the development of more competitive, innovative, and efficient risk transfer options.

Facultative reinsurance brokerage empowers clients to better understand, manage, and transfer risk through innovative facultative solutions and provides the most efficient access to the global facultative markets.

Capital markets is a global investment bank with expertise in mergers and acquisitions, capital raising, strategic advice, restructuring, recapitalization services, and insurance-linked securities.

We work with insurers, reinsurers, investment firms, banks, and

corporations to manage complex commercial issues through the provision of corporate finance advisory services, capital markets solutions, and innovative risk management products.

Retirement Solutions includes core retirement, investment consulting, and talent, rewards and performance.

Retirement consulting specializes in providing organizations across the globe with strategic design consulting on their retirement programs, actuarial services, and risk management, including pension de-risking, governance, integrated pension administration, and legal and compliance consulting.

Our delegated investment solutions offer ongoing management of investment programs and fiduciary responsibilities either in a partial or full discretionary model for multiple asset owners.

It partners with clients to deliver our scale and experience to help them effectively manage their investments, risk, and governance and potentially lower costs.

Talent, rewards, and performance delivers advice and solutions that help clients accelerate business outcomes by improving the performance of their people.

It supports the full employee lifecycle, including assessment and selection of the right talent, optimized deployment and engagement, and the design, alignment, and benchmarking of compensation to business strategy and performance outcomes.

Health Solutions includes heath and benefits brokerage and healthcare exchanges.

Health and benefits brokerage partners with employers to develop innovative, customized benefits strategies that help manage risk, drive engagement, and promote accountability.

Our private health exchange solutions help employers transform how they sponsor, structure, and deliver health benefits by building and operating a cost effective alternative to traditional employee and retiree healthcare.

We seek outcomes of reduced employer costs, risk, and volatility, alongside greater coverage and plan choices for individual participants.

Data & Analytic Services includes Affinity, Aon InPoint, and ReView.

Affinity specializes in developing, marketing and administering customized insurance programs and specialty market solutions for Affinity organizations and their members or affiliates.

Aon InPoint draws on the Global Risk Insight Platform (or “GRIP”), one of Aon’s proprietary databases, and is dedicated to making insurers more competitive by providing data, analytics, engagement, and consulting services.

ReView draws on a another Aon proprietary database and broker market knowledge to provide advisory services, analysis, and benchmarking to help reinsurers more effectively meet the needs of cedents through the development of more competitive, innovative, and efficient risk transfer options.

Compensation from insurance and reinsurance companies includes fees for consulting and analytics services and fees and commissions for administrative and other services provided to or on behalf of insurers.

Fees from clients for advice and consulting services are dependent on the extent and value of the services we provide.

Investment, securities, and futures licensing authorities also govern certain of our business activities.

We serve clients through the following reportable segments:

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

| • | HR Solutions partners with organizations to solve their most complex human capital and related financial challenges in the areas of health, retirement and talent. We are dedicated to improving business performance and our clients’ employees’ experience by designing, implementing, communicating and administering a wide range of human capital, retirement, investment consulting, health care, compensation, and talent management strategies. |

In 2016, 64% of our consolidated total revenues were in Risk Solutions and 36% of our consolidated total revenues were in HR Solutions, before intersegment eliminations.

On February 9, 2017, we entered into an agreement to sell our Benefits Administration and Business Process Outsourcing (BPO) Portfolio (the “Business”) for cash consideration of $4.3 billion payable at closing plus additional cash consideration of up to $500 million based on future performance of the Business (the “Transaction”).

The Business is within the HR Solutions segment described further below.

The completion of the Transaction is subject to customary closing conditions, and the Transaction is expected to close by the end of the second quarter of 2017.

In connection with the Transaction, we expect to implement a cost reduction program.

BUSINESS SEGMENTS

Risk Solutions

The Risk Solutions segment generated approximately 64% of our consolidated total revenues in 2016, and has approximately 33,000 employees worldwide.

We provide risk mitigation solutions, including insurance and reinsurance brokerage, risk consulting, and related services in this segment.

Principal Products and Services

We operate in this segment through two similar transactional product lines: retail brokerage and reinsurance brokerage.

In addition, a key component of this business is our risk consulting services.

Retail brokerage encompasses our retail brokerage services, affinity products, managing general underwriting, placement, captive management services, and our Inpoint data and analytics solutions, including Risk/View.

Our Americas operations provide products and services to clients in North, Central and South America, the Caribbean, and Bermuda.

Our International operations in the U.K.; Europe, Middle East and Africa; and Asia Pacific offer these products and services to clients throughout the rest of the world.

Our employees draw upon our global network of resources, sophisticated data and analytics, and specialized expertise to deliver value to clients ranging from small and mid-sized businesses to multi-national corporations.

We work with clients to identify their business needs and help them assess and understand their total cost of risk.

Once we have gained an understanding of our clients’ risk management needs, we seek to leverage our global network and implement a customized risk approach with local Aon resources.

The outcome is intended to be a comprehensive risk solution provided locally and personally.

The Aon Client Promise® enables our colleagues around the globe to describe, benchmark, and price the value we deliver to clients in a unified approach, based on the most important criteria that are critical to our clients’ ability to manage their total cost of risk.

Our expertise and foresight, benchmarking, and carrier knowledge are keys to providing professional services excellence.

We intend to deliver superior value to clients and differentiation from competitors through our key Aon Broking initiatives, which position us to provide our clients and insurers with additional market insight as well as new product offerings and facilities.

As a retail broker, we serve as an advisor to clients and facilitate a wide spectrum of risk management solutions for property liability, general liability, professional and directors’ and officers’ liability, transaction liability, cyber liability, workers’ compensation, and various healthcare products, as well as other exposures.

Our business is comprised of several specialty areas structured around specific product and industry needs.

We offer specialized advice and services in such industries as technology, financial services, agribusiness, aviation, construction, health care, and energy, among others.

Through our global affinity business, we provide products for professional liability, life, disability income, and personal lines for individuals, associations, and businesses around the world.

In addition, we are a major provider of risk consulting services, including captive management, that provide our clients with alternative vehicles for managing risks that would be cost-prohibitive or unavailable in traditional insurance markets.

Our health and benefits consulting practice advises clients about structuring, funding, and administering employee benefit programs, which attract, retain, and motivate employees.

Benefits consulting and brokerage includes health and welfare, executive benefits, workforce strategies and productivity, absence management, data-driven health, compliance, employee commitment, and elective benefits services.

Our Cyber Solutions Group identifies and protects clients’ critical assets by aligning their cybersecurity strategy with their corporate culture and risk tolerance.

Our goal is to empower clients with enterprise wide cyber resilience in the face of rapidly evolving threats before, during, and after a cybersecurity incident.

Reinsurance brokerage offers sophisticated advisory services in program design and claim recoveries intended to enhance the risk/return characteristics of insurance policy portfolios, improve capital utilization, and evaluate and mitigate catastrophic loss exposures worldwide.

An insurance or reinsurance company may seek reinsurance or other risk-transfer solutions on all or a portion of the risks it insures.

To accomplish this, our reinsurance brokerage services use dynamic financial analysis and capital market alternatives, such as transferring catastrophe risk through securitization.

Reinsurance brokerage also offers capital management transaction and advisory services.

We act as a broker or intermediary for all classes of reinsurance.

We place two main types of property and casualty reinsurance: treaty reinsurance, which involves the transfer of a portfolio of risks, and facultative reinsurance, which entails the transfer of part or all of the coverage provided by a single insurance policy.

We hereby incorporate by reference Note [removed: 14] [added: 16] “Commitments and Contingencies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this report.

| For the fiscal year ended December 31, [removed: 2016] [added: 2017] | | |

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated filer,” [removed: and] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer ý | | Accelerated filer o | | Non-accelerated filer o | | Smaller reporting company o | [added: | Emerging growth company o |]

As of June 30, [removed: 2016,] [added: 2017,] the aggregate market value of the registrant’s Class A Ordinary Shares held by non-affiliates of the registrant was [removed: $29,031,404,998] [added: $34,061,029,792] based on the closing sales price as reported on the New York Stock Exchange — Composite Transaction Listing.

Number of Class A Ordinary Shares of Aon plc, $0.01 nominal value, outstanding as of February [removed: 22, 2017: 262,600,762.][added: 16, 2018: 246,180,510.]

Portions of Aon plc’s Proxy Statement for the [removed: 2017] [added: 2018] Annual General Meeting of Shareholders to be held on June [removed: 23, 2017] [added: 22, 2018] are incorporated by reference in this Form 10-K in response to Part III, Items 10, 11, 12, 13 and 14.

| | [Item 1. [removed: Business](#s95D4BF3B1D3C5C2BA75E3DA0552D27F1)] [added: Business](#sB07EE91086E05DAA910A033C30E8AF2E)] |

| | [Item 1A. Risk [removed: Factors](#s6F5BF5FE40165CD7A61DD415007D9406)] [added: Factors](#s82C1BBBA2C3656939B379CF2F8CC0B96)] |

| | [Item 1B. Unresolved Staff [removed: Comments](#s29CDBC4EFFA35868BBECCCE31AF8FAC7)] [added: Comments](#sF3595B04B05A558F95DD57296C368DC4)] |

| | [Item 2. [removed: Properties](#s96F597DA95B0516893CD8B71EABFC04B)] [added: Properties](#s412D648B1E6C54E58087D3570B7D3FFA)] |

| | [Item 3. Legal [removed: Proceedings](#s0B1C038F7E205E258BF250B9077ACCD4)] [added: Proceedings](#s5C19D182CAED5ACDB7867D2A4C5721C6)] |

| | [Item 4. Mine Safety [removed: Disclosure](#sBCE0CA3B39D45A788D6126398F62E3A8)] [added: Disclosure](#s109C3797077E50A6B1EC969D0E9C2809)] |

| | [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s4BCA580A5B285338A9EF849AE9A80130)] [added: Securities](#s7AC8EBCCC9545ABE98C5EAB91CD80FB8)] |

| | [Item 6. Selected Financial [removed: Data](#sED7FEB2CDE255D81A78BD14A219AAA7B)] [added: Data](#sC9146D4E6EEE571A86FB1FE9E8B472EF)] |

| | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s8E309022DCA25A959E04D4A4E34C5F16)] [added: Operations](#sD0FD2428C5AA535A8DA5CD6FF08FD885)] |

| | [Item 7A. Quantitative and Qualitative Disclosures About Market [removed: Risk](#s7F156AA09CAD57E28B37F41A77B6F8B6)] [added: Risk](#sAFEBA5F9DEA759EC881255E6ED5B6AFE)] |

| | [Item 8. Financial Statements and Supplementary [removed: Data](#sFCE0C95516845CFC835E5939C00A1982)] [added: Data](#s47984A8BCB91597AAD2486023D0C0F3D)] |

| | [Aon plc Consolidated Statements of [removed: Income](#s039558D0763952F7952138B57909F34E)] [added: Income](#s5E313B48528F52C689233D348BB5E859)] |

| | [Aon plc Consolidated Statements of Comprehensive [removed: Income](#sCE429A7A8A4A5EE79D45A126707D650B)] [added: Income](#s0085947D24A956438931932828D07478)] |

| | [Aon plc Consolidated Statements of Financial [removed: Position](#s837F54288F1D5FD7AA2B138B111B7854)] [added: Position](#s4D4DF100331E5EBAA6D0AE23239CC629)] |

| | [Aon plc Consolidated Statements of Shareholders' [removed: Equity](#sB43CB0AAAD0F5C46B2ECC1E62F5DCC5B)] [added: Equity](#sF88E055F76515A25B75C9BA486580E38)] |

| | [Aon plc Consolidated Statements of Cash [removed: Flows](#s4E167EAAE01B57BEB47D831CCC08B197)] [added: Flows](#s67FE9783D9385DED9E21CE50FF5C9F4E)] |

| | [Notes to Consolidated Financial [removed: Statements](#sE519E40CFE785C96A55A62B1ABFB1B6E)] [added: Statements](#s4237933FE5625C99AA9FA32400C7EA9A)] |

| | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sD3F67313186A56E9889FE32E5E84C827)] [added: Disclosure](#sAF70B5B1818E5B9A8F11000456FBB5FB)] |

| | [Item 9A. Controls and [removed: Procedures](#s5668C6D6D24C5C11B7E38F3C51FAD88D)] [added: Procedures](#s1652493097F35AECB7F9FAF40B02E3A1)] |

| | [Item 9B. Other [removed: Information](#s00A2195BCD115B07A0DEFB03DEA6F410)] [added: Information](#s546F4B6238B555A2B8B1DAF4A662E282)] |

| [PART [removed: III](#sEBAC8B3E43F45F0E8E6BB1367D880C77)] [added: III](#s3684C383CB8E521E81A0E210C6FBB4B0)] | |

| | [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#s120EDBACE0F2567C850EFCA26909D0E4)] [added: Governance](#sB3A8EFF1768C5629A6968EB3FBBC49CB)] |

| | [Item 11. Executive [removed: Compensation](#s4DF0C14711AA5DF0A12E9F1DD034E9F6)] [added: Compensation](#s257E9B67E7A45BA2A7F233305B62BABC)] |

| | [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s9F0245D4045A57DBAC6418DE2677273C)] [added: Matters](#s5F12A878B3D55B34B47211A84742108D)] |

| | [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#s33DECDEE6A855339926E2FA9A457607F)] [added: Independence](#s4A196F6EADB75BCD8C4A7C60C190E10C)] |

| | [Item 14. Principal Accountant Fees and [removed: Services](#s2F9AC146680E5C0EA503247D1317ADF4)] [added: Services](#sDC64B058EA905EDF8A28AE368EF2B988)] |

| | [Item 15. Exhibits and Financial Statement [removed: Schedules](#sAA679F423890574498FF88DAFBB8DCC8)] [added: Schedules](#s3371593562C95F728C577F19BFEC66AC)] |

10-K 1 aonplc201710-k.htm 10-K

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| --- | --- | --- | --- | --- | --- | --- | --- | --- |

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

| [PART I](#s3574B0C61EE65E8EA158AA33B8740FA2) | |

| [PART II](#sACBD19211B0158418B228522C6A245CA) | |

| [PART IV](#s4DC2E655A4F152E394FB161E2135FD9C) | |

| [SIGNATURES](#sB8CC1EADC8475C3FAA7B69F92EBC4146) | |

10-K 1 aonplc201610-k.htm 10-K

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| [PART I](#s3E1326756F8A5C67857BDF7739C5D10D) | |

| [PART II](#sF822F9A622B4525C9F0C3A9621A03FBF) | |

| [PART IV](#s39DA7A3ABC7F57B1AE09AB4C426F0A31) | |

| [SIGNATURES](#s28DC9B8134D05C8190DACD1614BE6CF3) | |

| 200 E. Randolph Street, Chicago, Illinois | [removed: 428,000] [added: 406,000] | | | 2028 |

| 199 Water Street, New York, New York [added: (1)] | 319,000 | | | 2018 |

See Note [removed: 7] [added: 9] “Lease Commitments” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for information with respect to our lease commitments as of December 31, [removed: 2016.][added: 2017.]

| | |

| --- | --- |

| (1) | In August 2018, Aon will move to 1 Liberty Plaza, New York, New York. The Company has signed a 10 year lease for 240,000 square feet to replace the 199 Water Street location. |

| 4 Overlook Point and other locations, Lincolnshire, Illinois | 1,059,000 | | | 2019 – 2024 |

| Tikri Campus and Unitech Cyber Park, Gurgaon, India | 440,000 | | | 2015 – 2019 |

| 2601 Research Forest Drive, The Woodlands, Texas | 414,000 | | | 2020 |

| 2300 Discovery Drive, Orlando, Florida | 364,000 | | | 2020 |

| 7201 Hewitt Associates Drive, Charlotte, North Carolina | 218,000 | | | 2025 |

The locations in Lincolnshire, Illinois; Gurgaon, India; The Woodlands, Texas; Orlando, Florida; and Charlotte, North Carolina, are primarily dedicated to our HR Solutions segment.

The other locations listed above house personnel from both of our reportable segments.

The executive officers of Aon, as of February [removed: 23, 2017] [added: 20, 2018] unless otherwise noted, their business experience during the last five years, and their ages and positions held are set forth below.

| Eric Andersen | | [removed: 52] [added: 53] | | Chief Executive Officer, Aon Benfield. Mr. Andersen joined Aon in 1997 upon the completion of the acquisition of Minet. Mr. Andersen has served in a variety of roles at Aon during his 19 years at the Company, including as Chief Executive [removed: Officers] [added: Officer] of Aon Risk Solutions Americas from 2011 to 2013. Mr. Andersen was named Chief Executive Officer of Aon Benfield in September 2013 and an Executive Officer [removed: on] [added: in] February [removed: 1,] 2017. |

| John Bruno | | [removed: 51] [added: 52] | | [removed: Executive Vice President, Enterprise Innovation &] Chief [removed: Information] [added: Operations] Officer. Mr. Bruno joined Aon in September 2014 as Executive Vice President, Enterprise Innovation & Chief Information Officer and was named an Executive Officer [removed: on] [added: in] February [removed: 1,] [added: 2017 and Chief Operations Officer in April] 2017. Prior to joining Aon, Mr. Bruno held various positions at NCR Corporation, a technology company focused on assisted and self service solutions, from 2008 to 2014, where he most recently served as Executive Vice President, Industry & Field Operations and Corporate Development. Prior to working at NCR, Mr. Bruno served in various technology positions at Goldman Sachs Group, Merrill Lynch & Co. Inc. and Symbol Technologies, Inc. |

| Gregory C. Case | | [removed: 54] [added: 55] | | President and Chief Executive Officer. Mr. Case became President and Chief Executive Officer of Aon in April 2005. Prior to joining Aon, Mr. Case was a partner with McKinsey & Company, the international management consulting firm, for 17 years, most recently serving as head of the Financial Services Practice. He previously was responsible for McKinsey’s Global Insurance Practice, and was a member of McKinsey’s governing Shareholders’ Committee. Prior to joining McKinsey, Mr. Case was with the investment banking firm of Piper, Jaffray and Hopwood and the Federal Reserve Bank of Kansas City. |

| Christa Davies | | [removed: 45] [added: 46] | | Executive Vice President and Chief Financial Officer. Ms. Davies became Executive Vice President [removed: —] [added: -] Global Finance in November 2007. In March 2008, Ms. Davies assumed the additional role of Chief Financial Officer. Prior to joining Aon, Ms. Davies served for 5 years in various capacities at Microsoft Corporation, an international software company, most recently serving as Chief Financial Officer of the Platform and Services Division. Before joining Microsoft in 2002, Ms. Davies served at ninemsn, an Australian joint venture with Microsoft. |

| Anthony Goland | | [removed: 57] [added: 58] | | Executive Vice President and Chief Human Resources Officer. Mr. Goland joined Aon in September 2015 as Executive Vice President and Chief Human Resources Officer. Prior to joining Aon, Mr. Goland spent 30 years at McKinsey & Company, Inc., a global management consulting firm where he was a leader of the [removed: Firm’s] [added: firm’s] financial services, financial inclusion, and organization practices. Prior to McKinsey, he had experience with J.P. Morgan and IBM, and before that he volunteered and served as a Sergeant in the U.S. [removed: Army Europe.] [added: Army.] |

| Peter Lieb | | [removed: 61] [added: 62] | | Executive Vice President, General Counsel and Company Secretary. Mr. Lieb was named Aon’s Executive Vice President and General Counsel in July 2009 and Company Secretary in November 2013. Prior to joining Aon, Mr. Lieb served as Senior Vice President, General Counsel and Secretary of NCR Corporation, a technology company focused on assisted and self-service solutions, from May 2006 to July 2009, and as Senior Vice President, General Counsel and Secretary of Symbol Technologies, Inc. from 2003 to 2006. From 1997 to 2003, Mr. Lieb served in various senior legal positions at International Paper Company, including Vice President and Deputy General Counsel. Earlier in his career, Mr. Lieb served as a law clerk to the Honorable Warren E. Burger, Chief Justice of the United States. |

| Laurel Meissner | | [removed: 59] [added: 60] | | Senior Vice President and Global Controller. Ms. Meissner joined Aon in February 2009, and was appointed Senior Vice President and Global Controller and designated as Aon’s principal accounting officer in March 2009. Prior to joining Aon, Ms. Meissner served from July 2008 through January 2009 as Senior Vice President, Finance, Chief Accounting Officer of Motorola, Inc., an international communications company. Ms. Meissner joined Motorola in 2000 and served in various senior financial positions, including Corporate Vice President, Finance, Chief Accounting Officer. |

| Michael O’Connor | | [removed: 48] [added: 49] | | Chief Executive Officer, Aon Risk Solutions. Mr. O’Connor joined Aon in 2008 as Chief Operating Officer of Aon Risk Solutions and was later named Chief Risk Operating Officer, Aon Risk Solutions and Aon Benfield. In 2013, he was named Chief Executive Officer, Aon Risk Solutions and was named an Executive Officer [removed: on] [added: in] February [removed: 1,2017.] [added: 2017.] Prior to joining Aon, Mr. O’Connor was a partner at McKinsey & Company, where he served as a leader for the North America Financial Services and North American Insurance practices. |

| Cary Grace | | 49 | | Chief Executive Officer, Global Retirement & Investment. Ms. Grace joined Aon in April 2012 as President of Aon Hewitt’s Strategy and Solutions group and served as the CEO of Aon’s Health Exchange Solutions prior to assuming her current role in January 2016. She was named an executive officer in May 2017. Before joining Aon, Ms. Grace spent more than 20 years with Bank of America and a predecessor to JPMorgan in various business leadership positions including leading the institutional asset advisory and mass affluent businesses. |

| John Zern | | 51 | | Chief Executive Officer, Aon Global Health. Mr. Zern joined Aon in 2003 as the U.S. Health Leader for Aon Risk Solutions. He has held a variety of leadership positions across Aon Risk Solutions and Aon Hewitt over his 16 years at the Company. In 2015, Mr. Zern was named Chief Executive Officer of Aon Global Health and was named an Executive Officer in May 2017. Prior to joining Aon, he held several client and people leadership positions in the U.S. health business of Marsh & McLennan Companies and at Aetna Health Plans. |

| Stephen P. McGill (1) | | 59 | | Mr. McGill joined Aon in May 2005 as Chief Executive Officer of the Global Large Corporate business unit, which is now part of Aon Global. Mr. McGill was named Chief Executive Officer or Aon Risk Services Americas in January 2006 prior to being named Chairman and Chief Executive Officer, Risk Solutions in February 2008 and Group President in May 2012. Previously, Mr. McGill served as Chief Executive Officer of Jardine Lloyd Thompson Group plc. |

| Kristi A. Savacool | | 57 | | Chief Executive Officer, Aon Hewitt. Ms. Savacool joined Aon upon the completion of the merger between Aon and Hewitt Associates, Inc. and was named Chief Executive Officer of Aon Hewitt in February 2012. Prior to assuming this role, Ms. Savacool served as Co-Chief Executive Officer of Aon Hewitt from May 2011 and, prior to that, Chief Executive Officer of Benefits Administration for Aon Hewitt. Prior to the merger, Ms. Savacool served in several senior executive positions at Hewitt Associates, Inc., including Senior Vice President, Total Benefit Administration Outsourcing. Ms. Savacool joined Hewitt in 2005. Prior to joining Hewitt, Ms. Savacool held a number of executive management positions at The Boeing Company since 1985. |

(1) Mr. McGill resigned from the Company on January 31, 2017.

Our Class A Ordinary Shares, $0.01 nominal value per share, are traded on the New York Stock [removed: Exchange (“NYSE”).][added: Exchange.]

| Fourth quarter | | $ | [removed: 116.59] [added: 152.78] | | | $ | [removed: 107.19] [added: 133.11] | | | $ | [removed: 0.33] [added: 0.36] | | | $ | [removed: 97.79] [added: 116.59] | | | $ | [removed: 86.38] [added: 107.19] | | | $ | [removed: 0.30] [added: 0.33] | |

| Third quarter | | $ | [removed: 113.78] [added: 147.66] | | | $ | [removed: 105.35] [added: 132.38] | | | $ | [removed: 0.33] [added: 0.36] | | | $ | [removed: 103.38] [added: 113.78] | | | $ | [removed: 87.58] [added: 105.35] | | | $ | [removed: 0.30] [added: 0.33] | |

| Second quarter | | $ | [removed: 110.04] [added: 137.28] | | | $ | [removed: 100.55] [added: 117.41] | | | $ | [removed: 0.33] [added: 0.36] | | | $ | [removed: 104.70] [added: 110.04] | | | $ | [removed: 95.32] [added: 100.55] | | | $ | [removed: 0.30] [added: 0.33] | |

| First quarter | | $ | [removed: 104.76] [added: 119.88] | | | $ | [removed: 83.83] [added: 109.82] | | | $ | [removed: 0.30] [added: 0.33] | | | $ | [removed: 107.08] [added: 104.76] | | | $ | [removed: 89.35] [added: 83.83] | | | $ | [removed: 0.25] [added: 0.30] | |

On February [removed: 22, 2017,] [added: 16, 2018,] the last reported sale price of our ordinary shares as reported by the NYSE was [removed: $115.60] [added: $140.86] per share.

We have approximately [removed: 225] [added: 213] holders of record of our Class A Ordinary Shares as of February [removed: 22, 2017.][added: 16, 2018.]

| Period | | Total Number of Shares Purchased | | | Average Price Paid per Share (1) | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | | | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs [removed: (1)(2)] [added: (1) (2)] | | |

We did not make any [added: unregistered] sales of [removed: unregistered] equity in [removed: 2016.][added: 2017.]

| | | 2017 | | | | | | | | | | | | 2016 | | | | | | | | | | |

| 10/1/17 – 10/31/17 | | 1,176,659 | | | $ | 148.39 | | | 1,176,659 | | | $ | 5,745,379,322 | |

| 11/1/17 – 11/30/17 | | 1,180,611 | | | $ | 141.15 | | | 1,180,611 | | | $ | 5,578,732,712 | |

| 12/1/17 – 12/31/17 | | 1,156,382 | | | $ | 137.24 | | | 1,156,382 | | | $ | 5,420,032,577 | |

| | | 3,513,652 | | | $ | 142.29 | | | 3,513,652 | | | | | |

| (2) | Aon has a share repurchase program authorized by the Company’s Board of Directors (the “Repurchase Program”). The Repurchase Program was established in April 2012 with up to $5.0 billion in authorized repurchases, and was increased by $5.0 billion in authorized repurchases in each of November 2014 and February 2017 for a total of $15.0 billion in repurchase authorizations. During the fourth quarter of 2017, we repurchased 3.5 million shares at an average price per share of $142.29 for a total cost of $500 million. Included in the 3.5 million shares repurchased was 118,000 shares, which are included in the above table, that did not settle until January 2018. These shares were settled at an average price per share of $134.41 and total cost of $15.9 million. |

| | | 2016 | | | | | | | | | | | | 2015 | | | | | | | | | | |

| 10/1/16 – 10/31/16 | | 758,923 | | | $ | 110.68 | | | 758,923 | | | $ | 2,939,315,852 | |

| 11/1/16 – 11/30/16 | | 754,296 | | | $ | 111.36 | | | 754,296 | | | $ | 2,855,317,922 | |

| 12/1/16 – 12/31/16 | | 283,323 | | | $ | 112.96 | | | 283,323 | | | $ | 2,823,314,745 | |

| | | 1,796,542 | | | | | | | 1,796,542 | | | | | |

| (2) | In April 2012, our Board of Directors authorized a share repurchase program under which up to $5 billion of Class A Ordinary Shares may be repurchased. In November 2014, our Board of Directors authorized an additional $5 billion of Class A Ordinary Shares for repurchase. In February 2017, the Board of Directors authorized a $5.0 billion increase to the then existing remaining authorization under its share repurchase program. Under each program, shares may be repurchased through open market or privately negotiated transactions, based on prevailing market conditions, funded from available capital. During 2016, we repurchased 12.2 million shares at an average price per share of $102.66 for a total cost of $1.3 billion. The remaining authorized amount for share repurchase under our Share Repurchase Programs is $2.8 billion at December 31, 2016. |

Amounts below have been amended to reflect [removed: the adoption of the new guidance.][added: this classification.]

| [removed: (millions] [added: (millions,] except per share data) | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| [removed: Income from continuing operations] [added: Net income] | | [removed: $] [added: 1,263] | [added: | | |] 1,430 | | | [removed: $] | 1,422 | | | [removed: $] | 1,431 | | | [removed: $] | 1,148 | | | [removed: $ | 1,020 | |]

| Less: Net income attributable to noncontrolling interests | | [removed: 34] [added: 37] | | | | [removed: 37] [added: 34] | | | | [removed: 34] [added: 37] | | | | [removed: 35] [added: 34] | | | | [removed: 27] [added: 35] | | |

| Net income attributable to Aon shareholders | | $ | [removed: 1,396] [added: 1,226] | | | $ | [removed: 1,385] [added: 1,396] | | | $ | [removed: 1,397] [added: 1,385] | | | $ | [removed: 1,113] [added: 1,397] | | | $ | [removed: 993] [added: 1,113] | |

| Basic Net Income Per Share Attributable to Aon Shareholders | | [removed: $] | [removed: 5.21] | | | [removed: $] | [removed: 4.93] | | | [removed: $] | [removed: 4.73] | | | [removed: $] | [removed: 3.57] | | | [removed: $] | [removed: 3.02] | |

| Diluted Net Income Per Share Attributable to Aon Shareholders | | [removed: $] | [removed: 5.16] | | | [removed: $] | [removed: 4.88] | | | [removed: $] | [removed: 4.66] | | | [removed: $] | [removed: 3.53] | | | [removed: $] | [removed: 2.99] | |

| Total assets | | $ | [removed: 26,615] [added: 26,088] | | | $ | [removed: 26,883] [added: 26,615] | | | $ | [removed: 29,572] [added: 26,883] | | | $ | [removed: 30,060] [added: 29,572] | | | $ | [removed: 30,296] [added: 30,060] | |

| Long-term debt | | $ | [removed: 5,869] [added: 5,667] | | | $ | [removed: 5,138] [added: 5,869] | | | $ | [removed: 4,768] [added: 5,138] | | | $ | [removed: 3,666] [added: 4,768] | | | $ | [removed: 3,694] [added: 3,666] | |

| Total equity | | $ | [removed: 5,532] [added: 4,648] | | | $ | [removed: 6,059] [added: 5,532] | | | $ | [removed: 6,527] [added: 6,059] | | | $ | [removed: 8,091] [added: 6,527] | | | $ | [removed: 7,701] [added: 8,091] | |

| Dividends paid per share | | $ | [removed: 1.29] [added: 1.41] | | | $ | [removed: 1.15] [added: 1.29] | | | $ | [removed: 0.92] [added: 1.15] | | | $ | [removed: 0.68] [added: 0.92] | | | $ | [removed: 0.62] [added: 0.68] | |

| Market price, per share | | $ | [removed: 111.53] [added: 134.00] | | | $ | [removed: 92.21] [added: 111.53] | | | $ | [removed: 94.83] [added: 92.21] | | | $ | [removed: 83.89] [added: 94.83] | | | $ | [removed: 55.61] [added: 83.89] | |

| Shares outstanding | | [removed: 262.0] [added: 247.6] | | | | [removed: 269.8] [added: 262.0] | | | | [removed: 280.0] [added: 269.8] | | | | [removed: 300.7] [added: 280.0] | | | | [removed: 310.9] [added: 300.7] | | |

As described in Note 3 “Discontinued Operations” of the Notes to Consolidated Financial Statements, we have classified the results of the Divested Business as discontinued operations.

| Total revenue from continuing operations | | $ | 9,998 | | | $ | 9,409 | | | $ | 9,480 | | | $ | 9,892 | | | $ | 9,670 | |

| Income from continuing operations | | 435 | | | | 1,253 | | | | 1,253 | | | | 1,312 | | | | 957 | | |

| Income from discontinued operations | | 828 | | | | 177 | | | | 169 | | | | 119 | | | | 191 | | |

| Continuing operations | | $ | 1.54 | | | $ | 4.55 | | | $ | 4.33 | | | $ | 4.32 | | | $ | 2.96 | |

| Discontinued operations | | 3.20 | | | | 0.66 | | | | 0.60 | | | | 0.40 | | | | 0.61 | | |

| Net income | | $ | 4.74 | | | $ | 5.21 | | | $ | 4.93 | | | $ | 4.73 | | | $ | 3.57 | |

| Continuing operations | | $ | 1.53 | | | $ | 4.51 | | | $ | 4.28 | | | $ | 4.27 | | | $ | 2.92 | |

| Discontinued operations | | 3.17 | | | | 0.65 | | | | 0.60 | | | | 0.40 | | | | 0.61 | | |

| Net income | | $ | 4.70 | | | $ | 5.16 | | | $ | 4.88 | | | $ | 4.66 | | | $ | 3.53 | |

| Fiduciary assets (1) | | $ | 9,625 | | | $ | 8,959 | | | $ | 9,465 | | | $ | 11,026 | | | $ | 11,509 | |

| Intangible assets including goodwill | | $ | 10,091 | | | $ | 9,300 | | | $ | 8,795 | | | $ | 9,338 | | | $ | 9,365 | |

As described in Note 1 “Basis of Presentation - Revision of Previously Issued Financial Statements” of the Notes to Consolidated Financial Statements, during the fourth quarter of 2016, we identified errors that impacted the years ended December 31, 2015, 2014, 2013, and 2012.

The corrections for the errors, which we have concluded are immaterial, individually and in the aggregate, to all prior-period consolidated financial statements, are reflected in the consolidated financial statements and selected financial data included in this Form 10-K.

As described in Note 2 “Summary of Significant Accounting Principles and Practices” of the Notes to Consolidated Financial Statements, we adopted guidance related to the presentation of deferred tax assets and liabilities and debt issuance costs.

| | | | | | | (As Revised) | | | | (As Revised) | | | | (As Revised) | | | | (As Revised) | | |

| Commissions, fees and other | | $ | 11,605 | | | $ | 11,661 | | | $ | 12,019 | | | $ | 11,787 | | | $ | 11,476 | |

| Fiduciary investment income | | 22 | | | | 21 | | | | 26 | | | | 28 | | | | 38 | | |

| Total revenue | | $ | 11,627 | | | $ | 11,682 | | | $ | 12,045 | | | $ | 11,815 | | | $ | 11,514 | |

| Net income | | 1,430 | | | | 1,422 | | | | 1,431 | | | | 1,148 | | | | 1,020 | | |

| Fiduciary assets (1) | | $ | 9,485 | | | $ | 9,932 | | | $ | 11,638 | | | $ | 11,871 | | | $ | 12,214 | |

| Intangible assets including goodwill | | $ | 10,970 | | | $ | 10,628 | | | $ | 11,380 | | | $ | 11,575 | | | $ | 11,918 | |

We have audited the accompanying consolidated [removed: statements] [added: statement] of financial position of Aon plc [added: (the Company)] as of December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the related consolidated statements of income, comprehensive income, [removed: shareholders’ equity,] [added: shareholders' equity] and cash flows for each of the three years in the period ended December 31, [removed: 2016.][added: 2017, and the related notes (collectively referred to as the “financial statements”).]

These financial statements are the responsibility of [removed: Aon plc’s] [added: the Company’s] management.

Our responsibility is to express an opinion on [removed: these] [added: the Company’s] financial statements based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures included] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, the financial statements [removed: referred to above] present fairly, in all material respects, the consolidated financial position of [removed: Aon plc] [added: the Company] at December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2016,] [added: 2017,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States), Aon plc’s] [added: States) (PCAOB), the Company’s] internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 [removed: Framework)] [added: Framework),] and our report dated February [removed: 23, 2017] [added: 20, 2018,] expressed an unqualified opinion thereon.

[removed: ][added: ]

| (millions, except per share data) | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] | [added: 2015] | | [added: |]

| Compensation and benefits | [removed: | 6,914 | | | | 6,837] [added: 67] | | | | [removed: 7,014] [added: 56] | | |

| Other [removed: general expenses] [added: General Expenses] | | [removed: 2,807] [added: 4] | | | | [removed: 2,997] [added: (13] | | [added: )] | | [removed: 3,065] [added: (3] | | [added: )] |

| Interest income | | [removed: 9] [added: 27] | | | | [removed: 14] [added: 9] | | | | [removed: 10] | [added: 14] | | [added: |]

| Interest expense | | (282 | | ) | | [removed: (273] [added: (282] | | ) | | [removed: (255] | [added: (273] | [added: |] ) |

| Other income [added: (expense)] | | [removed: 36] [added: (39] | | [added: )] | | [removed: 100] [added: 36] | | | | [removed: 44] | [added: 100] | | [added: |]

| Income taxes | | [removed: 239] [added: 3] | | | | [removed: 267] [added: 91] | | | | [removed: 334] [added: 92] | | |

| Net income | | [removed: 1,430] [added: 1,263] | | | | [removed: 1,422] [added: 1,430] | | | | [removed: 1,431] | [added: 1,422] | | [added: |]

| Less: Net income attributable to noncontrolling interests | | [removed: 34] [added: 37] | | | | [removed: 37] [added: 34] | | | | [removed: 34] | [added: 37] | | [added: |]

| Net income attributable to Aon shareholders | | $ | [removed: 1,396] [added: 1,226] | | | $ | [removed: 1,385] [added: 1,396] | | | [added: |] $ | [removed: 1,397] [added: 1,385] | |

| Basic net income per share attributable to Aon shareholders | | [removed: $] | [removed: 5.21] | | | [removed: $] | [removed: 4.93] | | | [removed: $] | [removed: 4.73] | | [added: |]

| Diluted net income per share attributable to Aon shareholders | | [removed: $] | [removed: 5.16] | | | [removed: $] | [removed: 4.88] | | | [removed: $] | [removed: 4.66] | | [added: |]

| Cash dividends per share paid on ordinary shares | | $ | [removed: 1.29] [added: 1.41] | | | $ | [removed: 1.15] [added: 1.29] | | | [added: |] $ | [removed: 0.92] [added: 1.15] | |

| Weighted average ordinary shares outstanding - basic | | [removed: 268.1] [added: 258.5] | | | | [removed: 280.8] [added: 268.1] | | | | [removed: 295.5] | [added: 280.8] | | [added: |]

| Weighted average ordinary shares outstanding - diluted | | [removed: 270.3] [added: 260.7] | | | | [removed: 283.8] [added: 270.3] | | | | [removed: 299.6] | [added: 283.8] | | [added: |]

| (millions) | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Net income | | $ | [removed: 1,430] [added: 1,263] | | | $ | [removed: 1,422] [added: 1,430] | | | $ | [removed: 1,431] [added: 1,422] | |

| Other comprehensive [removed: (loss) income,] [added: income (loss),] net of tax: | | | | | | | | | | | | |

| Change in fair value of financial instruments | | [removed: (12] [added: 12] | | [removed: )] | | [removed: (8] [added: (12] | | ) | | [removed: 4] [added: (8] | | [added: )] |

| Foreign currency translation adjustments | | [removed: (495] [added: 390] | | [removed: )] | | [removed: (442] [added: (495] | | ) | | [removed: (507] [added: (442] | | ) |

| [removed: Post-retirement] [added: Postretirement] benefit obligation | | [removed: 16] [added: 19] | | | | [removed: 155] [added: 16] | | | | [removed: (260] [added: 155] | | [removed: )] |

| Total other comprehensive [removed: loss] [added: income (loss)] | | [removed: (491] [added: 421] | | [removed: )] | | [removed: (295] [added: (491] | | ) | | [removed: (763] [added: (295] | | ) |

| Less: Other comprehensive loss attributable to noncontrolling interests | | [removed: (2] [added: —] | | [removed: )] | | [removed: (6] [added: —] | | [removed: )] | | [removed: (3] [added: 5] | | [removed: )] | [added: | — | | | | 5 | | |]

| Total other comprehensive [removed: loss] [added: income (loss)] attributable to Aon shareholders | | [removed: (489] [added: 416] | | [removed: )] | | [removed: (289] [added: (489] | | ) | | [removed: (760] [added: (289] | | ) |

| Comprehensive income attributable to Aon shareholders | | $ | [removed: 907] [added: 1,642] | | | $ | [removed: 1,096] [added: 907] | | | $ | [removed: 637] [added: 1,096] | |

| (millions, except nominal value) | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| [removed: Cash and cash equivalents |] [added: CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR] | [removed: $] | 431 | | | [removed: $] | 384 | | [added: | | 374 | | |]

| Short-term investments | | [removed: 290] [added: 529] | | | | [removed: 356] [added: 290] | | |

| Receivables, net | [removed: | 2,589 | | | | 2,564] [added: 47] | | |

| Fiduciary assets | | [removed: 9,485] [added: —] | | | | [removed: 9,932] [added: 526] | | |

Opinion on the Financial Statements

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We have served as the Company’s auditor since 1986.

February 20, 2018

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| | | Years ended December 31 | | | | | | | | | | | |

| Total revenue | | $ | 9,998 | | | $ | 9,409 | | — | | $ | 9,480 | |

| Compensation and benefits | | 6,089 | | | | 5,687 | | | | | 5,605 | | |

| Information technology | | 419 | | | | 386 | | | | | 389 | | |

| Premises | | 348 | | | | 343 | | | | | 362 | | |

| Depreciation of fixed assets | | 187 | | | | 162 | | | | | 164 | | |

| Amortization and impairment of intangible assets | | 704 | | | | 157 | | | | | 173 | | |

| Other general expenses | | 1,272 | | | | 1,036 | | | | | 1,200 | | |

| Total operating expenses | | 9,019 | | | | 7,771 | | | | | 7,893 | | |

| Income from continuing operations before income taxes | | 685 | | | | 1,401 | | | | | 1,428 | | |

| Income taxes | | 250 | | | | 148 | | | | | 175 | | |

| Net income from continuing operations | | 435 | | | | 1,253 | | | | | 1,253 | | |

| Income from discontinued operations, net of tax | | 828 | | | | 177 | | | | | 169 | | |

| | | | | | | | | | | | | | |

| Continuing operations | | $ | 1.54 | | | $ | 4.55 | | | | $ | 4.33 | |

| Discontinued operations | | 3.20 | | | | 0.66 | | | | | 0.60 | | |

| Continuing operations | | $ | 1.53 | | | $ | 4.51 | | | | $ | 4.28 | |

| Discontinued operations | | 3.17 | | | | 0.65 | | | | | 0.60 | | |

| Net income | | $ | 4.70 | | | $ | 5.16 | | | | $ | 4.88 | |

| Cash and cash equivalents | | $ | 756 | | | $ | 426 | |

| Fiduciary assets | | 9,625 | | | | 8,959 | | |

| Current assets of discontinued operations | | — | | | | 1,118 | | |

| Goodwill | | 8,358 | | | | 7,410 | | |

| Non-current assets of discontinued operations | | — | | | | 2,076 | | |

| Fiduciary liabilities | | 9,625 | | | | 8,959 | | |

| Current liabilities of discontinued operations | | — | | | | 940 | | |

| Pension, other postretirement, and postemployment liabilities | | 1,789 | | | | 1,760 | | |

| Non-current liabilities of discontinued operations | | — | | | | 139 | | |

| Adoption of new accounting guidance | | — | | | — | | | | 49 | | | | — | | | | — | | | | 49 | | |

| Balance at January 1, 2017 | | 262.0 | | | 5,580 | | | | 3,856 | | | | (3,912 | | ) | | 57 | | | | 5,581 | | |

| Shares purchased | | (18.0 | ) | | — | | | | (2,415 | | ) | | — | | | | — | | | | (2,415 | | ) |

February 23, 2017

| Commissions, fees and other | | $ | 11,605 | | | $ | 11,661 | | | $ | 12,019 | |

| Fiduciary investment income | | 22 | | | | 21 | | | | 26 | | |

| Total revenue | | 11,627 | | | | 11,682 | | | | 12,045 | | |

| Total operating expenses | | 9,721 | | | | 9,834 | | | | 10,079 | | |

| Operating income | | 1,906 | | | | 1,848 | | | | 1,966 | | |

| Income before income taxes | | 1,669 | | | | 1,689 | | | | 1,765 | | |

| | | | | | | (As Revised) | | |

| Goodwill | | 8,747 | | | | 8,448 | | |

| | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | (As Revised) | | | | | | | | | | | | | | |

| Balance at January 1, 2014 | 300.7 | | | $ | 4,788 | | | $ | 5,627 | | | $ | (2,374 | ) | | $ | 50 | | | 8,091 | | |

| Net income | — | | | — | | | | 1,397 | | | | — | | | | 34 | | | | 1,431 | | |

| Shares purchased | (25.8 | ) | | — | | | | (2,250 | | ) | | — | | | | — | | | | (2,250 | | ) |

| Amortization of intangible assets | | 277 | | | | 314 | | | | 352 | | |

| Capital expenditures | | (222 | | ) | | (290 | | ) | | (256 | | ) |

Revision of Previously Issued Financial Statements

During the fourth quarter of 2016, the Company identified errors related to the recognition of revenue for certain brokerage fee arrangements, specifically the consideration for certain arrangements covering multiple insurance placements was not appropriately allocated to each individual placement.

Based on an analysis of quantitative and qualitative factors in accordance with SEC Staff Accounting Bulletins 99 and 108, the Company concluded that these errors were immaterial, individually and in the aggregate, to the Consolidated Statements of Financial Position, Consolidated Statements of Income, or Consolidated Statements of Cash Flows as presented in the Company’s quarterly and annual financial statements previously filed in the Company’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

While Aon concluded that the errors were immaterial to each of the prior reporting periods affected, the Company further concluded that correcting the errors cumulatively in fiscal year 2016 would materially misstate the Consolidated Statement of Income for the year ended December 31, 2016.

As a result, amendment of such reports is not required.

Such changes are reflected for the years ended December 31, 2015 and 2014, included in these financial statements, and will also be reflected in the historical periods included in the Company’s subsequent quarterly and annual consolidated financial statements.

The impact to the Consolidated Statements of Financial Position was a decrease of $170 million to Receivables, net, an increase of $66 million to Deferred tax assets, and a decrease of $104 million to Retained earnings in all periods presented.

The impact to the full year Consolidated Statements of Income and Consolidated Statements of Comprehensive Income was de minimis in all periods presented.

and therefore remains unchanged.

There was no impact to the full year cash provided by operating activities in the Consolidated Statements of Cash Flows.

The impact to the Consolidated Statements of Cash Flows previously filed in unaudited Quarterly Reports on Form 10-Q is as follows (in millions):

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (Unaudited) | As Reported | | | Effect of Change(1) | | | As Revised | | | | As Reported | | | Effect of Change(1) | | | As Revised | | | | As Reported | | | Effect of Change(1) | | | As Revised | | |

| Net Income | $ | 327 | | $ | 10 | | $ | 337 | | | $ | 607 | | $ | 38 | | $ | 645 | | | $ | 921 | | $ | 50 | | $ | 971 | |

| Receivables, net | 110 | | | (13 | | ) | 97 | | | | 175 | | | (47 | | ) | 128 | | | | 289 | | | (61 | | ) | 228 | | |

| (1) | No net impact to Cash Provided by Operating Activities. |

Refer to Note 17 “Quarterly Financial Data” for the impact to the Company’s Condensed Consolidated Statements of Income previously filed in Quarterly Reports on Form 10-Q.

Reclassification

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

In prior periods, cash outflows from Restructuring activities were shown as a separate line item within Cash Flows From Operating Activities in the Consolidated Statements of Cash Flows.

Beginning in 2016, these amounts are disclosed as a component of the change in Other assets and liabilities within Cash Flows From Operating Activities in the Consolidated Statements of Cash Flows.

Cash outflows for Restructuring reserves were $31 million at December 31, 2015 and $83 million at December 31, 2014.

We have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this annual report of December 31, [removed: 2016.][added: 2017.]

Based on this evaluation, our chief executive officer and chief financial officer concluded as of December 31, [removed: 2016] [added: 2017] that our disclosure controls and procedures were effective such that the information relating to Aon, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to Aon’s management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2016.][added: 2017.]

Based on this assessment, management has concluded our internal control over financial reporting is effective as of December 31, [removed: 2016.][added: 2017.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2016] [added: 2017] has been audited by Ernst & Young, LLP, the Company’s independent registered public accounting firm, as stated in their report titled “Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting.”

No changes in Aon’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during [removed: 2016] [added: 2017] that have materially affected, or that are reasonably likely to materially affect, Aon’s internal control over financial reporting.

Report of Independent Registered Public Accounting Firm [removed: on Internal Control Over Financial Reporting]

We have audited Aon plc’s internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on criteria established in Internal [removed: Control — Integrated] [added: Control-Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 [removed: Framework)] [added: Framework),] (the COSO criteria).

[removed: Aon plc’s] [added: The Company’s] management is responsible for maintaining effective internal control over financial [removed: reporting,] [added: reporting] and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report [removed: on] [added: Regarding the Effectiveness of] Internal Control [removed: over Financial Reporting.][added: and Procedures.]

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, [removed: use] [added: use,] or disposition of the company’s assets that could have a material effect on the financial statements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in [removed: conditions] [added: conditions,] or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Aon plc [added: (the Company)] maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the [removed: 2016] consolidated [added: statement of] financial [added: position of the Company as of December 31, 2017 and 2016, and the related consolidated] statements of [removed: Aon plc] [added: income, comprehensive income, shareholders' equity] and [added: cash flows for each of the three years in the period ended December 31, 2017, and the related notes and] our report dated February [removed: 23, 2017] [added: 20, 2018] expressed an unqualified opinion thereon.