Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Aon plc

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Aon plc (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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 States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 17, 2023, expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. 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. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

			Realizability of Deferred Tax Assets
Description of the Matter			As discussed in Note 9 “Income Taxes” of the Notes to Consolidated Financial Statements, the Company had net deferred tax assets of $725 million at December 31, 2022. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Conclusions on the realizability of certain net deferred tax assets involve significant management judgement including assumptions and estimates related to the amount, timing, and jurisdiction of future taxable income. Auditing the deferred tax asset calculation and the related forecast of future taxable income was especially challenging as it involved a high degree of auditor judgement around management’s assumptions and estimates of future taxable income.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and operating effectiveness of internal controls that address the risks of material misstatement relating to the realizability of deferred tax assets, including controls over management’s projections of the amount, timing, and jurisdiction of future taxable income and the related assumptions. Among other audit procedures performed, we evaluated the assumptions used by the Company to develop projections of future taxable income by income tax jurisdiction and tested the completeness and accuracy of the underlying data used in the projections. For example, we inspected the assumptions made in the calculation of future taxable income, including the growth rate, the estimates of the reversal of cumulative temporary differences, and the capital and debt requirements by jurisdiction. We compared the projections of future taxable income with the actual results of prior periods. Further, we involved tax subject matter professionals in the review of the information identified.

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

Chicago, Illinois

February 17, 2023

Aon plc

Consolidated Statements of Income

						Years Ended December 31
(millions, except per share data)						2022						2021						2020
Revenue
Total revenue						$	12,479					$	12,193					$	11,066
Expenses
Compensation and benefits						6,477						6,738						5,905
Information technology						509						477						444
Premises						289						327						291
Depreciation of fixed assets						151						179						167
Amortization and impairment of intangible assets						113						147						246
Other general expense						1,271						2,235						1,232
Total operating expenses						8,810						10,103						8,285
Operating income						3,669						2,090						2,781
Interest income						18						11						6
Interest expense						(406)						(322)						(334)
Other income (expense)						(125)						152						13
Income before income taxes						3,156						1,931						2,466
Income tax expense						510						623						448
Net income						2,646						1,308						2,018
Less: Net income attributable to noncontrolling interests						57						53						49
Net income attributable to Aon shareholders						$	2,589					$	1,255					$	1,969
Basic net income per share attributable to Aon shareholders						$	12.23					$	5.59					$	8.49
Diluted net income per share attributable to Aon shareholders						$	12.14					$	5.55					$	8.45
Weighted average ordinary shares outstanding - basic						211.7						224.7						231.9
Weighted average ordinary shares outstanding - diluted						213.2						226.1						233.1

See accompanying Notes to Consolidated Financial Statements.

Aon plc

Consolidated Statements of Comprehensive Income

						Years Ended December 31
(millions)						2022						2021						2020
Net income						$	2,646					$	1,308					$	2,018
Less: Net income attributable to noncontrolling interests						57						53						49
Net income attributable to Aon shareholders						2,589						1,255						1,969
Other comprehensive income (loss), net of tax:
Change in fair value of financial instruments						(13)						1						13
Foreign currency translation adjustments						(528)						(289)						263
Postretirement benefit obligation						(211)						277						(101)
Total other comprehensive income (loss)						(752)						(11)						175
Less: Other comprehensive income (loss) attributable to noncontrolling interests						—						(1)						3
Total other comprehensive income (loss) attributable to Aon shareholders						(752)						(10)						172
Comprehensive income attributable to Aon shareholders						$	1,837					$	1,245					$	2,141

See accompanying Notes to Consolidated Financial Statements.

Aon plc

Consolidated Statements of Financial Position

						As of December 31
(millions, except nominal value)						2022						2021
Assets
Current assets
Cash and cash equivalents						$	690					$	544
Short-term investments						452						292
Receivables, net						3,035						3,094
Fiduciary assets						15,900						14,386
Other current assets						646						716
Total current assets						20,723						19,032
Goodwill						8,292						8,434
Intangible assets, net						447						492
Fixed assets, net						558						529
Operating lease right-of-use assets						699						786
Deferred tax assets						824						766
Prepaid pension						652						1,366
Other non-current assets						509						512
Total assets						$	32,704					$	31,917
Liabilities and equity (deficit)
Liabilities
Current liabilities
Accounts payable and accrued liabilities						$	2,114					$	2,192
Short-term debt and current portion of long-term debt						945						1,164
Fiduciary liabilities						15,900						14,386
Other current liabilities						1,347						1,331
Total current liabilities						20,306						19,073
Long-term debt						9,825						8,228
Non-current operating lease liabilities						693						772
Deferred tax liabilities						99						401
Pension, other postretirement, and postemployment liabilities						1,186						1,375
Other non-current liabilities						1,024						910
Total liabilities						33,133						30,759
Equity (deficit)
Ordinary shares - $0.01 nominal value Authorized: 500.0 shares (issued: 2022 - 205.4; 2021 - 214.8)						2						2
Additional paid-in capital						6,864						6,624
Accumulated deficit						(2,772)						(1,694)
Accumulated other comprehensive loss						(4,623)						(3,871)
Total Aon shareholders' equity (deficit)						(529)						1,061
Noncontrolling interests						100						97
Total equity (deficit)						(429)						1,158
Total liabilities and equity (deficit)						$	32,704					$	31,917

See accompanying Notes to Consolidated Financial Statements.

Aon plc

Consolidated Statements of Shareholders’ Equity (Deficit)

(millions, except per share data)						Shares						Ordinary Shares and Additional Paid-in Capital						Retained Earnings (Accumulated Deficit)						Accumulated Other Comprehensive Loss, Net of Tax						Non-controlling Interests						Total
Balance at January 1, 2020						232.1						6,154						1,248						(4,033)						74						3,443
Net income						—						—						1,969						—						49						2,018
Shares issued — employee stock compensation plans						1.9						(154)						—						—						—						(154)
Shares repurchased						(8.5)						—						(1,763)						—						—						(1,763)
Share-based compensation expense						—						317						—						—						—						317
Dividends to shareholders ($1.78 per share)						—						—						(412)						—						—						(412)
Net change in fair value of financial instruments						—						—						—						13						—						13
Net foreign currency translation adjustments						—						—						—						260						3						263
Net postretirement benefit obligation						—						—						—						(101)						—						(101)
Net purchases of shares from noncontrolling interests						—						(3)						—						—						(6)						(9)
Dividends paid to noncontrolling interests on subsidiary common stock						—						—						—						—						(32)						(32)
Balance at December 31, 2020						225.5						6,314						1,042						(3,861)						88						3,583
Net income						—						—						1,255						—						53						1,308
Shares issued — employee stock compensation plans						1.7						(129)						(1)						—						—						(130)
Shares repurchased						(12.4)						—						(3,543)						—						—						(3,543)
Share-based compensation expense						—						449						—						—						—						449
Dividends to shareholders ($1.99 per share)						—						—						(447)						—						—						(447)
Net change in fair value of financial instruments						—						—						—						1						—						1
Net foreign currency translation adjustments						—						—						—						(288)						(1)						(289)
Net postretirement benefit obligation						—						—						—						277						—						277
Net purchases of shares from noncontrolling interests						—						(8)						—						—						(5)						(13)
Dividends paid to noncontrolling interests on subsidiary common stock						—						—						—						—						(38)						(38)
Balance at December 31, 2021						214.8						6,626						(1,694)						(3,871)						97						1,158
Net income						—						—						2,589						—						57						2,646
Shares issued — employee stock compensation plans						1.7						(156)						(1)						—						—						(157)
Shares repurchased						(11.1)						—						(3,203)						—						—						(3,203)
Share-based compensation expense						—						397						—						—						—						397
Dividends to shareholders ($2.19 per share)						—						—						(463)						—						—						(463)
Net change in fair value of financial instruments						—						—						—						(13)						—						(13)
Net foreign currency translation adjustments						—						—						—						(528)						—						(528)
Net postretirement benefit obligation						—						—						—						(211)						—						(211)
Net purchases of shares from noncontrolling interests						—						(1)						—						—						(1)						(2)
Dividends paid to noncontrolling interests on subsidiary common stock						—						—						—						—						(53)						(53)
Balance at December 31, 2022						205.4						$	6,866					$	(2,772)					$	(4,623)					$	100					$	(429)

See accompanying Notes to Consolidated Financial Statements.

Aon plc

Consolidated Statements of Cash Flows

						Years Ended December 31
(millions)						2022						2021						2020
Cash flows from operating activities
Net income						$	2,646					$	1,308					$	2,018
Adjustments to reconcile net income to cash provided by operating activities:
Gain from sales of businesses						(54)						(142)						(25)
Depreciation of fixed assets						151						179						167
Amortization and impairment of intangible assets						113						147						246
Share-based compensation expense						397						449						312
Deferred income taxes						(252)						11						9
Other, net						170						5						2
Change in assets and liabilities:
Receivables, net						(96)						(119)						108
Accounts payable and accrued liabilities						(22)						264						186
Current income taxes						216						200						(17)
Pension, other postretirement and postemployment liabilities						(53)						(124)						(143)
Other assets and liabilities						3						4						(80)
Cash provided by operating activities						3,219						2,182						2,783
Cash flows from investing activities
Proceeds from investments						110						58						64
Payments for investments						(107)						(91)						(97)
Net sales (purchases) of short-term investments - non fiduciary						(175)						15						(167)
Acquisition of businesses, net of cash and funds held on behalf of clients						(162)						(14)						(368)
Sale of businesses, net of cash and funds held on behalf of clients						81						218						30
Capital expenditures						(196)						(137)						(141)
Cash provided by (used for) investing activities						(449)						49						(679)
Cash flows from financing activities
Share repurchase						(3,203)						(3,543)						(1,763)
Proceeds from issuance of shares						58						55						44
Cash paid for employee taxes on withholding shares						(215)						(185)						(193)
Commercial paper issuances, net of repayments						(65)						671						(113)
Issuance of debt						1,967						1,495						991
Repayment of debt						(500)						(413)						(607)
Increase in fiduciary liabilities, net of fiduciary receivables						702						568						316
Cash dividends to shareholders						(463)						(447)						(412)
Noncontrolling interests and other financing activities						(71)						(125)						(35)
Cash used for financing activities						(1,790)						(1,924)						(1,772)
Effect of exchange rates on cash and cash equivalents and funds held on behalf of clients						(549)						(235)						297
Net increase in cash and cash equivalents and funds held on behalf of clients						431						72						629
Cash and cash equivalents and funds held on behalf of clients at beginning of year						6,645						6,573						5,944
Cash and cash equivalents and funds held on behalf of clients at end of year						$	7,076					$	6,645					$	6,573
Reconciliation of cash and cash equivalents and funds held on behalf of clients:
Cash and cash equivalents						$	690					$	544					$	884
Funds held on behalf of clients						6,386						6,101						5,689
Total cash and cash equivalents and funds held on behalf of clients						$	7,076					$	6,645					$	6,573
Supplemental disclosures:
Interest paid						$	351					$	328					$	326
Income taxes paid, net of refunds						$	546					$	412					$	455

See accompanying Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements

1. Basis of Presentation

The accompanying Consolidated Financial Statements and Notes thereto have been prepared in accordance with U.S. GAAP. The Consolidated Financial Statements include the accounts of Aon plc and all of its controlled subsidiaries (“Aon” or the “Company”). Intercompany accounts and transactions have been eliminated. The Consolidated Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations, and cash flows for all periods presented.

Use of Estimates

The preparation of the accompanying Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the Consolidated Financial Statements in future periods.

Reclassification

Certain amounts in prior periods' Consolidated Financial Statements have been reclassified to conform to the current year presentation. In prior periods, commercial paper issuances and repayments were included in Issuance of debt and Repayment of debt, respectively, in the Consolidated Statements of Cash Flows. The net amount of commercial paper activity is now disclosed separately in Commercial paper issuances, net of repayments in the Consolidated Statements of Cash Flows. For the year ended December 31, 2021 and December 31, 2020, commercial paper issuances reclassified from Issuance of debt was $4,478 million and $3,162 million, respectively, and commercial paper repayments reclassified from Repayment of debt was $3,807 million and $3,275 million, respectively. Further information on the gross commercial paper activity for the current and prior year periods is included within the Liquidity and Financial Conditions section of Part II Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

In November 2022, Aon incurred a non-cash pension settlement charge of $170 million in connection with the purchase of an annuity for portions of its U.S. pension plans. Aon has separately classified the non-cash pension settlement charge within Other, net on the Consolidated Statement of Cash Flows as an adjustment to reconcile Net income to Cash provided by operating activities for the period ended December 31, 2022. Prior year comparable balances have been reclassified to conform with current year presentation. For the years ended December 31, 2021 and 2020, Aon incurred insignificant non-cash pension settlement charges of $5 million and $2 million, respectively, which were presented as changes in assets and liabilities held within Pension, other postretirement and other postemployment liabilities in the Consolidated Statements of Cash Flows. See Note 11 “Employee Benefits” for further information regarding the non-cash settlement charges incurred.

In prior periods, Cash paid for employee taxes on withholding shares were included with Proceeds from issuance of shares, and presented as Issuance of shares for employee benefit plans in the Consolidated Statements of Cash Flows. These items are now presented separately and prior year balances have been reclassified to conform to current year presentation. For the year ended December 31, 2021 and December 31, 2020, Proceeds from issuance of shares was $55 million and $44 million, respectively, and Cash paid for employee taxes on withholding shares was $185 million and $193 million, respectively.

2. Summary of Significant Accounting Principles and Practices

Revenue Recognition

The Company generates revenues primarily through commissions, compensation from insurance and reinsurance companies for services provided to them, and fees from customers. Commissions and fees 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, insurer, or reinsurer, and the capacity in which the Company acts. Compensation from insurance and reinsurance companies includes: (1) fees for consulting and analytics services and (2) fees and commissions for administrative and other services provided to or on behalf of insurers. In Aon’s capacity as an insurance and reinsurance broker, the service promised to the customer is placement of an effective insurance or reinsurance policy, respectively. The customer

obtains control over the services promised by the Company at the completion of the insurance or reinsurance policy placement process once coverage is effective. Judgment is not typically required when assessing whether the coverage is effective. Fees from clients for advice and consulting services are dependent on the extent and value of the services provided. Payment terms for the Company’s principal service lines are discussed below; the Company believes these terms are consistent with current industry practices. Significant financing components are typically not present in Aon’s arrangements.

The Company recognizes revenue when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements where control is transferred over time, an input or output method is applied that represents a faithful depiction of the progress towards completion of the performance obligation. For arrangements that include variable consideration, the Company assesses whether any amounts should be constrained. For arrangements that include multiple performance obligations, the Company allocates consideration based on their relative fair values.

Costs incurred by the Company in obtaining a contract are capitalized and amortized on a systematic basis that is consistent with the transfer of control of the services to which the asset relates, considering anticipated renewals when applicable. Certain contract related costs, including pre-placement brokerage costs, are capitalized as a cost to fulfill and are amortized on a systematic basis consistent with the transfer of control of the services to which the asset relates, which is generally less than one year.

The Company has elected to apply practical expedients to not disclose the revenue related to unsatisfied performance obligations if (1) the contract has an original duration of 1 year or less, (2) the Company has recognized revenue for the amount in which it has the right to bill, and (3) the variable consideration is allocated entirely to an unsatisfied performance obligation which is recognized as a series of distinct goods or services that form a single performance obligation.

Disaggregation of Revenue

The following is a description of principal service lines from which the Company generates its revenue:

Commercial Risk Solutions includes retail brokerage, specialty solutions, global risk consulting and captives management, and Affinity programs. Revenue primarily includes insurance commissions and fees for services rendered. Revenue is predominantly recognized at a point in time upon the effective date of the underlying policy (or policies), or for a limited number of arrangements, over the term of the arrangement using output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements recognized over time, various output measures, including units delivered and time elapsed, are utilized to provide a faithful depiction of the progress towards completion of the performance obligation. Revenue is recorded net of allowances for estimated policy cancellations, which are determined based on an evaluation of historical and current cancellation data. Reimbursements received for out-of-pocket expenses are generally recorded as a component of revenue. Commissions and fees for brokerage services may be invoiced near the effective date of the underlying policy or over the term of the arrangement in installments during the policy period.

Reinsurance Solutions includes treaty reinsurance, facultative reinsurance, Strategy and Technology Group, and capital markets. Revenue primarily includes reinsurance commissions and fees for services rendered. Revenue is predominantly recognized at a point in time upon the effective date of the underlying policy (or policies), or for a limited number of arrangements, over the term of the arrangement using output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. For arrangements recognized over time, various output measures, including units delivered and time elapsed, are utilized to provide a faithful depiction of the progress towards completion of the performance obligation. Commissions and fees for brokerage services may be invoiced at the inception of the reinsurance period for certain reinsurance brokerage, or more commonly, over the term of the arrangement in installments based on deposit or minimum premiums for most treaty reinsurance arrangements.

Health Solutions includes consulting and brokerage, Human Capital, and Consumer Benefits Solutions. Revenue primarily includes insurance commissions and fees for services rendered. For brokerage commissions, revenue is predominantly recognized at a point in time upon the effective date of the underlying policy (or policies), or for a limited number of arrangements, over the term of the arrangement to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services using input or output measures, including units delivered or time elapsed, to provide a faithful depiction of the progress towards completion of the performance obligation. Revenue from health care exchange arrangements is typically recognized upon successful enrollment of participants. Commissions and fees for brokerage services may be invoiced at the effective date of the underlying policy or over the term of the arrangement in installments during the policy period. Payment terms for other services vary but are typically over the contract term in installments.

Wealth Solutions includes retirement consulting and pension administration, as well as investments. Revenue recognized for these arrangements is predominantly recognized over the term of the arrangement using input or output measures to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services, or for certain arrangements, at a point in time upon completion of the services. For consulting arrangements recognized over time, revenue will be recognized based on a measure of progress that depicts the transfer of control of the services to the customer, utilizing an appropriate input or output measure to provide a reasonable assessment of the progress towards completion of the performance obligation including units delivered or time elapsed. Fees paid by customers for consulting services are typically charged on an hourly, project or fixed-fee basis, and revenue for these arrangements is typically recognized based on time incurred, days elapsed, or reports delivered. Revenue from time-and-materials or cost-plus arrangements are recognized as services are performed using input or output measures to provide a reasonable assessment of the progress towards completion of the performance obligation including hours worked, and revenue for these arrangements is typically recognized based on time and materials incurred. Revenue generated from the Company’s delegated investment business is generally earned as an agreed percentage based on AUM and, to a lesser extent, based on performance fees. Reimbursements received for out-of-pocket expenses are generally recorded as a component of revenue. Payment terms vary but are typically over the contract term in installments.

Share-based Compensation Expense

Share-based payments to employees, including grants of RSUs and PSAs, are measured based on grant date fair value. For purposes of measuring share-based compensation expense, the Company considered whether an adjustment to the observable market price is necessary to reflect material nonpublic information that is known to us at the time the award is granted. No adjustments were necessary for the years ended December 31, 2022, 2021, or 2020. The Company recognizes compensation expense over the requisite service period for awards expected to ultimately vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates.

Pension and Other Postretirement Benefits

The Company records net periodic cost relating to its pension and other postretirement benefit plans based on calculations that include various actuarial assumptions, including discount rates, assumed rates of return on plan assets, inflation rates, mortality rates, compensation increases, and turnover rates. The Company reviews its actuarial assumptions on an annual basis and modifies these assumptions based on current rates and trends. The effects of gains, losses, and prior service costs and credits are amortized over future service periods or future estimated lives if the plans are frozen as reflected in Other income (expense) within the Consolidated Statements of Income. The funded status of each plan, calculated as the fair value of plan assets less the benefit obligation, is reflected in the Company’s Consolidated Statements of Financial Position using a December 31 measurement date.

Earnings per Share

Basic earnings per share is computed by dividing net income available to ordinary shareholders by the weighted-average number of ordinary shares outstanding, including participating securities, which consist of unvested share awards with non-forfeitable rights to dividends. Diluted earnings per share is computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding, which have been adjusted for the dilutive effect of potentially issuable ordinary shares, including certain contingently issuable shares. The diluted earnings per share calculation reflects the more dilutive effect of either (1) the two-class method that assumes that the participating securities have not been exercised, or (2) the treasury stock method.

Potentially issuable shares are not included in the computation of diluted earnings per share if their inclusion would be antidilutive.

Cash and Cash Equivalents and Short-term Investments

Cash and cash equivalents include cash balances and all highly liquid investments with initial maturities of three months or less. Short-term investments generally consist of money market funds. The estimated fair value of Cash and cash equivalents and Short-term investments approximates their carrying values.

At December 31, 2022, Cash and cash equivalents and Short-term investments totaled $1,142 million compared to $836 million at December 31, 2021, an increase of $306 million. Of the total balance, $115 million and $160 million was restricted as to its use at December 31, 2022 and 2021, respectively. Included within Short-term investments as of December 31, 2022 and 2021 balances, respectively, were £60.1 million ($72.5 million at December 31, 2022 exchanges rates) and £84.3 million ($112.8 million at December 31, 2021 exchange rates) of operating funds required to be held by the Company in the U.K. by the FCA, a U.K.-based regulator.

Fiduciary Assets and Liabilities

In its capacity as an insurance agent and broker, Aon collects premiums from insureds and, after deducting its commission, remits the premiums to the respective insurers. Aon also collects claims or refunds from insurers on behalf of insureds. Uncollected premiums from insureds and uncollected claims or refunds from insurers are recorded as Fiduciary assets in the Company’s Consolidated Statements of Financial Position. Unremitted insurance premiums and claims are held in a fiduciary capacity and the obligation to remit these funds is recorded as Fiduciary liabilities in the Consolidated Statements of Financial Position.

Funds held on behalf of clients represent fiduciary assets held by Aon for premiums collected from insureds but not yet remitted to insurance companies and claims collected from insurance companies but not yet remitted to insureds of $6.4 billion and $6.1 billion at December 31, 2022 and 2021, respectively. Fiduciary receivables were $9.5 billion and $8.3 billion at December 31, 2022 and 2021, respectively. These funds and a corresponding liability are included in Fiduciary assets and Fiduciary liabilities, respectively, in the accompanying Consolidated Statements of Financial Position.

Allowance for Doubtful Accounts

The Company’s estimate for allowance for credit losses with respect to receivables is based on a combination of factors, including evaluation of forward-looking information, historical write-offs, aging of balances, and other qualitative and quantitative analyses. Receivables, net included an allowance for doubtful accounts of $76 million and $90 million at December 31, 2022 and 2021, respectively.

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Included in this category are certain capitalized costs incurred during the application development stage related to directly obtaining, developing, or enhancing internal use software. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are generally as follows:

Asset Description						Estimated Useful Life
Software						Lesser of the life of an associated license, or 4 to 7 years
Leasehold improvements						Lesser of estimated useful life or lease term, not to exceed 10 years
Furniture, fixtures and equipment						4 to 10 years
Computer equipment						4 to 6 years
Buildings						35 years
Automobiles						6 years

Goodwill and Intangible Assets

Goodwill represents the excess of purchase price over the fair value of the net assets acquired in the acquisition of a business. Goodwill is allocated to applicable reporting units. Upon disposition of a business entity, goodwill is allocated to the disposed entity based on the relative fair value of that entity compared to the fair value of the reporting unit in which it was included. Goodwill is not amortized, but instead is tested for impairment at least annually. The goodwill impairment test is performed at the reporting unit level. The Company may initially perform a qualitative analysis to determine if it is more likely than not that the goodwill balance is impaired. If a qualitative assessment is not performed or if a determination is made that it is not more likely than not that the value of the reporting unit exceeds its carrying amount, then the Company will perform a quantitative analysis. If the fair value of a reporting unit is determined to be greater than the carrying value of the reporting unit, goodwill is deemed not to be impaired and no further testing is necessary. If the fair value of a reporting unit is less than the carrying value, a goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value limited to the total amount of the goodwill allocated to the reporting unit. Any resulting difference will be a charge to Amortization and impairment of intangible assets in the Consolidated Statements of Income in the period in which the determination is made. Fair value is determined using a combination of present value techniques and market prices of comparable businesses.

We classify our intangible assets acquired as either customer-related and contract based, technology, tradenames, or other intangibles. Amortization basis and estimated useful lives by intangible asset type are generally as follows:

Intangible Asset Description						Amortization Basis						Estimated Useful Life
Customer-related and contract-based						In line with underlying cash flows						7 to 20 years
Technology and other						Straight-line						5 to 7 years
Tradenames						Straight-line						1 to 3 years

Derivatives

Derivative instruments are recognized in the Consolidated Statements of Financial Position at fair value. Where the Company has entered into master netting agreements with counterparties, the derivative positions are netted by counterparties and are reported accordingly in other assets or other liabilities. Changes in the fair value of derivative instruments are recognized in earnings each period, unless the derivative is designated and qualifies as a cash flow or net investment hedge.

The Company has historically designated the following hedging relationships for certain transactions: (1) a hedge of the change in fair value of a recognized asset or liability or firm commitment (“fair value hedge”), (2) a hedge of the variability in cash flows from a recognized variable-rate asset or liability or forecasted transaction (“cash flow hedge”), and (3) a hedge of the net investment in a foreign operation (“net investment hedge”).

In order for a derivative to qualify for hedge accounting, the derivative must be formally designated as a fair value, cash flow, or a net investment hedge by documenting the relationship between the derivative and the hedged item. The documentation must include a description of the hedging instrument, the hedged item, the risk being hedged, Aon’s risk management objective and strategy for undertaking the hedge, and the method for assessing the effectiveness of the hedge. Additionally, the hedge relationship must be expected to be highly effective at offsetting changes in either the fair value or cash flows of the hedged item at both the inception of the hedge and on an ongoing basis. Aon assesses the ongoing effectiveness of its hedges quarterly or more frequently if facts and circumstances require.

For a derivative designated as a fair value hedging instrument, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. The effect is to reflect in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value. For a cash flow hedge that qualifies for hedge accounting, the change in fair value of a hedging instrument is recognized in Accumulated Other Comprehensive Income and subsequently reclassified to earnings in the same period the hedged item impacts earnings. For a net investment hedge, the change in fair value of the hedging instrument is recognized in Accumulate Other Comprehensive Income as part of the cumulative translation adjustment.

Changes in the fair value of a derivative that is not designated as part of a hedging relationship (commonly referred to as an “economic hedge”) are recorded in Other income in the Consolidated Statements of Income in the period of change.

The Company discontinues hedge accounting prospectively when (1) the derivative expires or is sold, terminated, or exercised, (2) the qualifying criteria are no longer met, or (3) management removes the designation of the hedging relationship.

Foreign Currency

Certain of the Company’s non-U.S. operations use their respective local currency as their functional currency. These operations that do not have the U.S. dollar as their functional currency translate their financial statements at the current rates of exchange in effect at the balance sheet date and revenues and expenses using rates that approximate those in effect during the period. The resulting translation adjustments are included in Net foreign currency translation adjustments within the Consolidated Statements of Shareholders’ Equity. Further, gains and losses from the remeasurement of monetary assets and liabilities that are denominated in a non-functional currency of that entity are included in Other income (expense) within the Consolidated Statements of Income.

Income Taxes

Deferred income taxes are recognized for the effect of temporary differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted marginal tax rates and laws that are currently in effect. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in the period when the rate change is enacted.

Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets are realized by having sufficient future taxable income to allow the related tax benefits to reduce taxes otherwise payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences,

future taxable income exclusive of reversing temporary differences and carry-forwards, taxable income in carry-back years, and tax planning strategies that are both prudent and feasible.

The Company recognizes the effect of income tax positions only if sustaining those positions is more likely than not. Tax positions that meet the more likely than not recognition threshold but are not highly certain are initially and subsequently measured based on the largest amount of benefit that is greater than 50% likely of being realized upon settlement with the taxing authority. Only information that is available at the reporting date is considered in the Company’s recognition and measurement analysis, and events or changes in facts and circumstances are accounted for in the period in which the event or change in circumstance occurs.

The Company records penalties and interest related to unrecognized tax benefits in Income taxes in the Company’s Consolidated Statements of Income.

The Company releases income tax effects from Accumulated other comprehensive loss using the portfolio approach.

Leases

The Company leases office facilities, equipment, and automobiles under operating and finance leases. The Company’s lease obligations are primarily for the use of office facilities. The Company evaluates if a leasing arrangement exists upon inception of a contract. A contract contains a lease if the contract conveys the right to control the use of identified tangible assets for a period of time in exchange for consideration. Identified property, plant, or equipment may include a physically distinct portion of a larger asset, or a portion of an asset that represents substantially all of the capacity of the asset but is not physically distinct. The Company assesses whether a contract implicitly contains the right to control the use of a tangible asset that is not already owned. In addition, the Company subleases certain real estate properties to third parties, which are classified as operating leases.

The Company’s leases expire at various dates and may contain renewal, expansion or termination options. The exercise of lease renewal and expansion options are typically at the Company’s sole discretion and are only included in the determination of the lease term if the Company is reasonably certain to exercise the option. In addition, the Company’s lease agreements typically do not contain any material residual value guarantees or restrictive covenants.

ROU assets and lease liabilities are based on the present value of the minimum lease payments over the lease term. The Company has elected the practical expedient related to lease and non-lease components, as an accounting policy election for all asset classes, which allows a lessee to not separate non-lease components from lease components and instead account for consideration received in a contract as a single lease component. The Company’s lease agreements may include initial direct costs and lease incentives. Initial direct costs are incremental costs of a lease that would not have been incurred if the lease had not been obtained and are included in the measurement of the ROU asset. Payments made to or on behalf of the Company, such as tenant improvement allowances, represent incentives that are considered reductions to the ROU asset and lease expense over the lease term.

The Company made a policy election to not recognize ROU assets and lease liabilities that arise from leases with an initial term of twelve months or less in the Consolidated Statements of Financial Position. However, the Company recognized these lease payments in the Consolidated Statements of Income on a straight-line basis over the lease term and variable lease payments in the period in which the expense was incurred. The Company applies this accounting policy across all classes of underlying assets.

A portion of the Company’s lease agreements include variable lease payments that are not recorded in the initial measurement of the lease liability and ROU asset balances. For real estate arrangements, base rental payments may be escalated according to annual changes in the CPI or other indices. The escalated rental payments based on the estimated CPI at the lease commencement date are included within minimum rental payments; however, changes in CPI are considered variable in nature and are recognized as variable lease costs in the period in which the obligation is incurred. Additionally, real estate lease agreements may include other variable payments related to operating expenses charged by the landlord based on actual expenditures. Information technology equipment agreements may include variable payments based on usage of the equipment. These expenses are also recognized as variable lease costs in the period in which the expense is incurred.

The Company utilizes discount rates to determine the present value of the lease payments based on information available at the commencement date of the lease. As the rate implicit in each lease is not typically readily available, the Company uses an incremental borrowing rate based on factors such as the lease term and the economic environment where the lease exists to determine the appropriate present value of future lease payments. When determining the incremental borrowing rate, the Company considers the rate of interest it would pay on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms.

Operating leases are included in Operating lease ROU assets, Other current liabilities, and Non-current operating lease liabilities in the Consolidated Statements of Financial Position. Finance leases are included in Other non-current assets, Other current liabilities, and Other non-current liabilities in the Consolidated Statements of Financial Position.

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of Aon plc and those entities in which the Company has a controlling financial interest. To determine if Aon holds a controlling financial interest in an entity, the Company first evaluates if it is required to apply the variable interest model to the entity, otherwise, the entity is evaluated under the voting interest model. When Aon holds rights that give it the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, combined with a variable interest that gives the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, the Company has a controlling financial interest in that VIE. The Company does not hold a controlling financial interest over any VIEs that significantly impacts the VIE’s economic performance and the Company does not have rights to any significant benefits or obligations to absorb potentially significant losses. Thus, the Company does not consolidate any VIEs and Aon’s interest in VIEs as of December 31, 2022 was insignificant.

Aon holds a controlling financial interest in entities that are not VIEs when it, directly or indirectly holds more than 50% of the voting rights and the noncontrolling interest holders do not hold substantive participating rights.

New Accounting Pronouncements

All issued, but not yet effective, guidance has been deemed not applicable or not significant to the Consolidated Financial Statements.

3. Revenue from Contracts with Customers

Disaggregation of Revenue

The following table summarizes revenue from contracts with customers by principal service line (in millions):

						Years Ended December 31
						2022						2021						2020
Commercial Risk Solutions						$	6,715					$	6,635					$	5,861
Reinsurance Solutions						2,190						1,997						1,814
Health Solutions						2,224						2,154						2,067
Wealth Solutions						1,367						1,426						1,341
Elimination						(17)						(19)						(17)
Total revenue						$	12,479					$	12,193					$	11,066

Consolidated revenue from contracts with customers by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions):

						Years Ended December 31
						2022						2021						2020
U.S.						$	5,666					$	5,459					$	5,032
Americas other than U.S.						1,137						1,027						911
U.K.						1,660						1,681						1,579
Ireland						99						127						84
Europe, Middle East, & Africa other than U.K. and Ireland						2,443						2,565						2,236
Asia Pacific						1,474						1,334						1,224
Total revenue						$	12,479					$	12,193					$	11,066

Contract Costs

Changes in the net carrying amount of costs to fulfill contracts with customers are as follows (in millions):

						2022						2021
Balance at beginning of period						$	361					$	339
Additions						1,479						1,504
Amortization						(1,480)						(1,478)
Impairment						—						—
Foreign currency translation and other						(5)						(4)
Balance at end of period						$	355					$	361

Changes in the net carrying amount of costs to obtain contracts with customers are as follows (in millions):

						2022						2021
Balance at beginning of period						$	179					$	184
Additions						56						59
Amortization						(49)						(48)
Impairment						—						—
Foreign currency translation and other						(1)						(16)
Balance at end of period						$	185					$	179

4. Other Financial Data

Consolidated Statements of Income Information

Other Income (Expense)

The components of Other income (expense) are as follows (in millions):

			Years Ended December 31
			2022						2021						2020
Pension and other postretirement (1)			$	(179)					$	21					$	13
Foreign currency remeasurement			(14)						26						(12)
Extinguishment of debt			—						—						(7)
Financial instruments and other			4						(45)						(10)
Equity earnings			10						8						4
Gain from disposals of business			54						142						25
Total			$	(125)					$	152					$	13

(1) Refer to Note 11 “Employee Benefits” for further information.

Consolidated Statements of Financial Position Information

Allowance for Doubtful Accounts

Changes in the net carrying amount of allowance for doubtful accounts are as follows (in millions):

			2022						2021						2020
Balance at beginning of period			$	90					$	98					$	77
Provision			8						26						29
Accounts written off, net of recoveries			(18)						(37)						(6)
Foreign currency translation and other			(4)						3						(2)
Balance at end of period			$	76					$	90					$	98

Other Current Assets

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

As of December 31			2022						2021
Costs to fulfill contracts with customers (1)			$	355					$	361
Prepaid expenses			109						137
Taxes receivable			74						53
Other			108						165
Total			$	646					$	716

(1)Refer to Note 3 “Revenue from Contracts with Customers” for further information.

Fixed Assets, net

The components of Fixed assets, net are as follows (in millions):

As of December 31			2022						2021
Software			$	861					$	797
Leasehold improvements			409						425
Computer equipment			269						268
Furniture, fixtures, and equipment			267						279
Construction in progress			109						45
Other			34						33
Fixed assets, gross			1,949						1,847
Less: Accumulated depreciation			1,391						1,318
Fixed assets, net			$	558					$	529

Depreciation expense, which includes software amortization, was $151 million, $179 million, and $167 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Other Non-current Assets

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

As of December 31			2022						2021
Costs to obtain contracts with customers (1)			$	185					$	179
Taxes receivable			109						95
Investments			60						64
Leases (2)			43						63
Other			112						111
Total			$	509					$	512

(1) Refer to Note 3 “Revenue from Contracts with Customers” for further information.

(2) Refer to Note 8 “Lease Commitments” for further information.

Other Current Liabilities

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

As of December 31			2022						2021
Deferred revenue (1)			$	250					$	321
Taxes payable			193						149
Leases (2)			186						213
Other			718						648
Total			$	1,347					$	1,331

(1)$653 million and $553 million was recognized in the Consolidated Statements of Income during the years ended December 31, 2022 and December 31, 2021, respectively.

(2)Refer to Note 8 “Lease Commitments” for further information.

Other Non-current Liabilities

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

As of December 31			2022						2021
Taxes payable (1)			$	795					$	609
Compensation and benefits			69						58
Deferred revenue			37						70
Leases (2)			28						46
Other			95						127
Total			$	1,024					$	910

(1)Includes $129 million and $145 million for the non-current portion of the transition tax as of December 31, 2022 and December 31, 2021, respectively. Refer to Note 9 “Income Taxes” for further information on the transition tax.

(2)Refer to Note 8 “Lease Commitments” for further information.

5. Acquisitions and Dispositions of Businesses

Completed Acquisitions

The Company completed five acquisitions during the year ended December 31, 2022 and two acquisitions during the year ended December 31, 2021. The following table includes the preliminary fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):

			Year Ended December 31, 2022
Consideration transferred
Cash			$	161
Deferred and contingent consideration			9
Aggregate consideration transferred			$	170
Assets acquired
Goodwill			$	87
Intangible assets			78
Other assets (1)			25
Total assets acquired			190
Liabilities assumed
Total liabilities assumed			20
Net assets acquired			$	170

(1) Includes Cash and cash equivalents of $2 million and funds held on behalf of clients of an insignificant amount.

Intangible assets acquired include technology as well as customer-related and contract-based assets. The intangible assets acquired as part of business acquisitions in 2022 had a weighted average useful economic life of 9 years. Acquisition related costs for completed acquisitions incurred and recognized within Other general expense for the year ended December 31, 2022 were insignificant. Total revenue for these acquisitions included in the Company’s Consolidated Statement of Income for the year ended December 31, 2022 was approximately $25 million.

The results of operations of these acquisitions are included in the Consolidated Financial Statements as of the respective acquisition dates. The Company’s results of operations would not have been materially different if these acquisitions had been reported from the beginning of the period in which they were acquired.

2022 Acquisitions

On November 1, 2022, the Company completed the acquisition of 100% of the share capital of E.R.N. Evaluacion de Riesgos Naturales y Antropogenicos, S.A. de C.V., a Mexico-based firm in risk assessment modeling.

On September 12, 2022, the Company completed the purchase of certain assets of Praxiom Risk Management, a provider of professional risk management in the U.S.

On August 1, 2022, the Company completed the purchase of certain assets of U.S. Advisors, Inc., a broker based in the U.S.

On May 3, 2022, the Company completed the acquisition of 100% of the share capital of Karl Köllner group companies, a marine hull broker based in Germany.

On March 1, 2022, the Company completed the acquisition of Tyche, an actuarial software platform based in the U.K.

2021 Acquisitions

On December 22, 2021, the Company completed the transaction to acquire 100% share capital of For Welfare S.r.l, a company focused on bancassurance programs in Italy.

On September 1, 2021, the Company completed the transaction to acquire 51% of Aon India Insurance Brokers Limited (formerly known as Anviti Insurance Brokers Private Limited). Prior to the acquisition date, the Company accounted for its 49% interest in Anviti as an equity-method investment. The acquisition-date fair value of the previous equity interest was $15 million and is included in the measurement of consideration transferred. There was no significant impact as a result of remeasuring the carrying value of the Company’s prior equity interest in Anviti held before the business combination.

Completed Dispositions

The Company completed three dispositions during the year ended December 31, 2022. The Company completed six dispositions during the year ended December 31, 2021 and one disposition during the year ended December 31, 2020.

The pretax gains recognized related to dispositions were $54 million, $142 million, and $25 million for the years ended December 31, 2022, December 31, 2021 and December 31, 2020, respectively. Gains recognized as a result of a disposition are included in Other income in the Consolidated Statements of Income. The pretax losses recognized in the Consolidated Statements of Income related to dispositions were insignificant for the years ended December 31, 2022, December 31, 2021, and December 31, 2020, respectively.

6. Goodwill and Other Intangible Assets

The changes in the net carrying amount of goodwill for the years ended December 31, 2022 and 2021, respectively, are as follows (in millions):

Balance as of January 1, 2021			$	8,666
Goodwill related to current year acquisitions			17
Goodwill related to current year disposals			(37)
Foreign currency translation and other			(212)
Balance as of December 31, 2021			$	8,434
Goodwill related to current year acquisitions			87
Goodwill related to current year disposals			(11)
Foreign currency translation and other			(218)
Balance as of December 31, 2022			$	8,292

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

As of December 31			2022																		2021
			Gross Carrying Amount						Accumulated Amortization and Impairment						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization and Impairment						Net Carrying Amount
Customer-related and contract-based			$	2,207					$	1,833					$	374					$	2,289					$	1,848					$	441
Technology and other			436						363						73						407						357						50
Tradenames			14						14						—						14						13						1
Total			$	2,657					$	2,210					$	447					$	2,710					$	2,218					$	492

Amortization expense and impairment charges from finite lived intangible assets were $113 million, $147 million, and $246 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The estimated future amortization for finite-lived intangible assets as of December 31, 2022 is as follows (in millions):

						Estimated Future Amortization
For the years ended
2023						$	99
2024						82
2025						68
2026						47
2027						34
Thereafter						117
Total						$	447

7. Debt

The following is a summary of outstanding debt (in millions):

As of December 31			2022						2021
Commercial paper			$	592					$	665
2.20% Senior Notes due November 2022 (1)			—						499
4.00% Senior Notes due November 2023 (2)			350						349
3.50% Senior Notes due June 2024			599						598
3.875% Senior Notes due December 2025			748						748
2.875% Senior Notes due May 2026 (EUR 500M)			530						563
8.205% Junior Subordinated Notes due January 2027			521						521
2.85% Senior Notes due May 2027			596						—
4.50% Senior Notes due December 2028			348						347
3.75% Senior Notes due May 2029			746						745
2.80% Senior Notes due May 2030			994						993
2.05% Senior Notes due August 2031			396						396
2.60% Senior Notes due December 2031			496						496
5.00% Senior Notes due September 2032			495						—
6.25% Senior Notes due September 2040			297						296
4.25% Senior Notes due December 2042			203						201
4.45% Senior Notes due May 2043			247						247
4.60% Senior Notes due June 2044			545						544
4.75% Senior Notes due May 2045			594						593
2.90% Senior Notes due August 2051			591						591
3.90% Senior Notes due February 2052			877						—
Other			5						—
Total debt			10,770						9,392
Less: Short-term debt and current portion of long-term debt			945						1,164
Total long-term debt			$	9,825					$	8,228

(1)The 2.20% Senior Notes due November 2022 were repaid in full on November 1, 2022.

(2)The 4.00% Senior Notes due November 2023 were reclassified as Short-term debt and current portion of long-term debt in the Consolidated Statement of Financial Position as of December 31, 2022.

Notes

In November 2022, Aon Global Limited’s $350 million 4.00% Senior Notes due November 2023 were classified as Short-term debt and current portion of long-term debt in the Consolidated Statement of Financial Position as the date of maturity is in less than one year as of December 31, 2022.

In November 2022, Aon Corporation’s $500 million 2.20% Senior Notes matured and were repaid in full. In November 2021, the Company’s $500 million 2.20% Senior Notes due November 2022 were classified as Short-term debt and current portion of long-term debt in the Consolidated Statement of Financial Position as the date of maturity is in less than one year as of December 31, 2021.

On September 12, 2022, Aon Corporation, a Delaware corporation, and Aon Global Holdings plc, a public limited company formed under the laws of England and Wales, both wholly owned subsidiaries of the Company, co-issued $500 million of 5.00% Senior Notes due September 2032. The Company intends to use the net proceeds from the offering for general corporate purposes.

On February 28, 2022, Aon Corporation and Aon Global Holdings plc co-issued $600 million of 2.85% Senior Notes due May 2027 and $900 million of 3.90% Senior Notes due February 2052. The Company intends to use the net proceeds from the offering for general corporate purposes.

On December 2, 2021, Aon Corporation and Aon Global Holdings plc co-issued $500 million aggregate principal amount of 2.60% Senior Notes set to mature on December 2, 2031. The Company intends to use the net proceeds of the offering for general corporate purposes.

On August 23, 2021, Aon Corporation and Aon Global Holdings plc co-issued $400 million 2.05% Senior Notes due August 2031 and $600 million of 2.90% Senior Notes due August 2051. The Company intends to use the net proceeds of the offering for general corporate purposes.

On January 13, 2021, Aon Global Limited issued an irrevocable notice of redemption to holders of its 2.80% Senior Notes for the redemption of all $400 million outstanding aggregate principal amount of the notes, which were set to mature in March 2021. The redemption date was on February 16, 2021 and resulted in an insignificant loss due to extinguishment.

Each of the notes issued by Aon Corporation is fully and unconditionally guaranteed by Aon Global Limited, Aon plc, and Aon Global Holding plc. Each of the notes issued by Aon Global Limited is fully and unconditionally guaranteed by Aon plc, Aon Global Holdings plc, and Aon Corporation. Each of the notes co-issued by Aon Corporation and Aon Global Holdings plc is fully and unconditionally guaranteed by Aon plc and Aon Global Limited. All guarantees of Aon plc and Aon Global Limited of the Co-Issued Notes are joint and several as well as full and unconditional. Senior Notes rank pari passu in right of payment with all other present and future unsecured debt which is not expressed to be subordinate or junior in rank to any other unsecured debt of the Co-Issuers. Refer to “Guarantee of Registered Securities” within Part II Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information regarding guarantees of outstanding debt securities. Each of the notes described and identified in the table above contains customary representations, warranties, and covenants, and the Company was in compliance with all such covenants as of December 31, 2022.

Repayments of total debt as of December 31, 2022 are as follows (in millions):

2023			$	946
2024			604
2025			750
2026			532
2027			1,121
Thereafter			6,956
Total Repayments			10,909
Unamortized discounts, premiums, and debt issuance costs			(139)
Total Debt			$	10,770

Revolving Credit Facilities

As of December 31, 2022, Aon plc had two primary committed credit facilities outstanding: its $1.0 billion multi-currency U.S. credit facility expiring in September 2026 and its $750 million multi-currency U.S. credit facility expiring in October 2024. In aggregate, these two facilities provide approximately $1.8 billion in available credit.

Each of these primary committed credit facilities includes customary representations, warranties, and covenants, including financial covenants that require Aon to maintain specified ratios of adjusted consolidated EBITDA to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. At December 31, 2022, Aon did not have borrowings under either of these primary committed credit facilities, and was in compliance with the financial covenants and all other covenants contained therein during the rolling year ended December 31, 2022.

Commercial Paper

Commercial paper may be issued in aggregate principal amounts of up to $1 billion under the U.S. Program and €625 million ($665 million at December 31, 2022 exchange rates) under the European Program, not to exceed the amount of the Company’s committed credit facilities, which was approximately $1.8 billion at December 31, 2022. The aggregate capacity of the Commercial Paper Program remains fully backed by the Company’s committed credit facilities. The U.S. Program was fully and unconditionally guaranteed by Aon plc, Aon Global Limited, and Aon Global Holdings plc and the European Program was fully and unconditionally guaranteed by Aon plc, Aon Global Limited, and Aon Corporation.

Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Consolidated Statements of Financial Position, is as follows (in millions):

As of December 31						2022						2021
Commercial paper outstanding						$	592					$	665

The weighted average commercial paper outstanding and its related interest rates are as follows (in millions, except percentages):

						Years Ended December 31
						2022						2021
Weighted average commercial paper outstanding						$	499					$	273
Weighted average interest rate of commercial paper outstanding						1.42		%				0.01		%

8. Lease Commitments

The classification of operating and finance lease asset and liability balances within the Consolidated Statements of Financial Position are as follows (in millions):

As of December 31						2022			2021
Assets
Operating lease assets			Operating lease right-of-use assets			$	699		$	786
Finance lease assets			Other non-current assets			43			63
Total lease assets						$	742		$	849
Liabilities
Current lease liabilities
Operating			Other current liabilities			$	163		$	194
Finance			Other current liabilities			23			19
Non-current lease liabilities
Operating			Non-current operating lease liabilities			693			772
Finance			Other non-current liabilities			28			46
Total lease liabilities						$	907		$	1,031

The components of lease costs are as follows (in millions):

			Years Ended December 31
			2022			2021
Operating lease cost			$	204		$	217
Finance lease costs
Amortization of leased assets			28			26
Interest on lease liabilities			1			1
Variable lease cost			38			49
Short-term lease cost (1)			11			11
Sublease income			(29)			(31)
Net lease cost			$	253		$	273

(1) Short-term lease cost does not include expenses related to leases with a lease term of one month or less.

Weighted average remaining lease term and discount rate related to operating and finance leases are as follows:

As of December 31			2022			2021
Weighted average remaining lease term (years)
Operating leases			6.7			6.9
Finance leases			2.5			3.6
Weighted average discount rate
Operating leases			3.1		%	2.8		%
Finance leases			1.0		%	1.0		%

Other cash and non-cash related activities are as follows (in millions):

			Years Ended December 31
			2022			2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases			$	231		$	244
Financing cash flows for finance leases			$	14		$	23
Non-cash related activities
ROU assets obtained in exchange for new operating lease liabilities			$	110		$	44
ROU assets obtained in exchange for new finance lease liabilities			$	—		$	—
Operating lease ROU asset expense (1)			$	162		$	142
Changes in Non-current operating lease liabilities (1)			$	(79)		$	(125)

(1)The Company has recorded non-cash changes in Operating lease ROU assets and Non-current operating lease liabilities through Other assets and liabilities in Cash flows from operations within the Consolidated Statements of Cash Flows.

Maturity analysis of operating and finance leases as of December 31, 2022 are as follows (in millions):

			Operating Leases						Finance Leases						Total
2023			$	175					$	23					$	198
2024			164						18						182
2025			135						10						145
2026			123						—						123
2027			108						—						108
Thereafter			235						—						235
Total undiscounted future minimum lease payments			940						51						991
Less: Imputed interest			(84)						—						(84)
Present value of lease liabilities			$	856					$	51					$	907

9. Income Taxes

Income before income tax and the provision for income tax consist of the following (in millions):

			Years Ended December 31
			2022						2021						2020
Income (loss) before income taxes:
Ireland			$	85					$	15					$	(86)
U.K.			502						549						634
U.S.			161						(818)						(28)
Other			2,408						2,185						1,946
Total			$	3,156					$	1,931					$	2,466
Income tax expense:
Current:
Ireland			$	2					$	2					$	2
U.K.			206						50						30
U.S. federal			195						197						126
U.S. state and local			43						72						22
Other			316						291						259
Total current tax expense			$	762					$	612					$	439
Deferred tax expense (benefit):
Ireland			$	—					$	(1)					$	(1)
U.K.			(152)						131						39
U.S. federal			(69)						(83)						(72)
U.S. state and local			(21)						(30)						(4)
Other			(10)						(6)						47
Total deferred tax expense (benefit)			$	(252)					$	11					$	9
Total income tax expense			$	510					$	623					$	448

Income before income taxes shown above is based on the location of the business unit to which such earnings are attributable for tax purposes. In addition, because the earnings shown above may, in some cases, be subject to taxation in more than one country, the income tax provision shown above as Ireland, U.K., U.S. or Other may not correspond to the geographic attribution of the earnings.

The Company performs a reconciliation of the income tax provisions based on its domicile and statutory rate at each reporting period. The reconciliation of the income tax provisions based on the Irish statutory corporate tax rate of 25% to the provisions reflected in the Consolidated Financial Statements is as follows:

			Years Ended December 31
			2022						2021						2020
Statutory tax rate			25.0%						25.0%						25.0%
U.S. state income taxes, net of U.S. federal benefit			0.4						1.5						1.0
Taxes on international operations (1) (2)			(11.6)						(15.4)						(9.8)
Nondeductible expenses			2.4						3.3						2.1
Adjustments to prior year tax requirements			(7.0)						(0.2)						—
Deferred tax adjustments, including statutory rate changes			(0.5)						3.2						0.7
Deferred tax adjustments, international earnings			0.2						1.8						0.7
Adjustments to valuation allowances			1.9						(0.2)						—
Change in uncertain tax positions			8.6						2.1						1.5
Excess tax benefits related to shared based compensation (3)			(1.5)						(2.4)						(2.2)
Capital and other losses			(1.4)						—						(1.8)
Non-deductible transaction costs			—						1.1						1.3
Non-deductible termination fee			—						12.9						—
Other — net			(0.3)						(0.4)						(0.3)
Effective tax rate			16.2%						32.3%						18.2%

(1)The Company determines the adjustment for taxes on international operations based on the difference between the statutory tax rate applicable to earnings in each foreign jurisdiction and the enacted rate of 25.0%, 25.0% and 25.0% at December 31, 2022, 2021, and 2020, respectively. The benefit to the Company’s effective income tax rate from taxes on international operations relates to benefits from lower-taxed global operations, primarily due to the use of global funding structures and the tax holiday in Singapore.

(2)In July 2020, final U.S. tax regulations were issued regarding the GILTI high tax election, allowing taxpayers to exclude from GILTI the income of a Controlled Foreign Corporation that incurs a foreign tax rate more than 90% of the top U.S. corporate tax rate. A GILTI high tax election may be made on an annual basis, and taxpayers may choose to apply the election to taxable years beginning after December 31, 2017. The Company expects to make the GILTI high-tax election for 2022 and therefore recorded the impact of making the election.

(3)Excess tax benefits and deficiencies from share-based payment transactions are recognized as income tax expense or benefit in the Company’s Consolidated Statements of Income.

The Company has elected to account for GILTI in the period in which it is incurred, and therefore has not provided deferred tax impacts of GILTI in its Consolidated Financial Statements.

The components of the Company’s deferred tax assets and liabilities are as follows (in millions):

As of December 31			2022						2021
Deferred tax assets:
Net operating loss, capital loss, interest, and tax credit carryforwards			$	952					$	581
Lease liabilities			178						207
Employee benefit plans			297						160
Other accrued expenses			100						132
Accrued interest			—						97
Federal and state benefit of interest from uncertain tax positions			57						45
Deferred revenue			26						36
Investment basis differences			30						25
Lease and service guarantees			1						1
Other			38						25
Total			1,679						1,309
Valuation allowance on deferred tax assets			(275)						(230)
Total			$	1,404					$	1,079
Deferred tax liabilities:
Intangibles and property, plant and equipment			$	(258)					$	(243)
Lease right-of-use asset			(151)						(173)
Deferred costs			(147)						(159)
Unremitted earnings			(38)						(58)
Other accrued expenses			(20)						(27)
Unrealized foreign exchange gains			(23)						(22)
Other			(42)						(32)
Total			$	(679)					$	(714)
Net deferred tax asset			$	725					$	365

Deferred income taxes (assets and liabilities have been netted by jurisdiction) have been classified in the Consolidated Statements of Financial Position as follows (in millions):

As of December 31			2022						2021
Deferred tax assets — non-current			$	824					$	766
Deferred tax liabilities — non-current			(99)						(401)
Net deferred tax asset			$	725					$	365

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized and adjusts the valuation allowance accordingly. Considerations with respect to the realizability of deferred tax assets include the period of expiration of the deferred tax asset, historical earnings and projected future taxable income by jurisdiction as well as tax liabilities for the tax jurisdiction to which the tax asset relates. Significant management judgment is required in determining the assumptions and estimates related to the amount and timing of future taxable income. Valuation allowances have been established primarily with regard to the tax benefits of certain tax credits and net operating losses, capital losses, and interest carryforwards. Valuation allowances increased by $45 million as of December 31, 2022, when compared to December 31, 2021. The change is primarily attributable to an increase in valuation allowances related to net operating losses and foreign tax credits.

The Company generally intends to limit distributions from foreign subsidiaries in excess of U.S. tax earnings and profits (except where distributions would be limited by available cash) and to limit repatriations from certain other jurisdictions that would otherwise generate a U.S. tax liability. As of December 31, 2022, the Company has accrued $38 million for local country income taxes, withholding taxes and state income taxes on those undistributed earnings that are not indefinitely reinvested. The Company has not provided for deferred taxes on outside basis differences in our investments in our foreign subsidiaries that are unrelated to these accumulated undistributed earnings, as these outside basis differences are indefinitely reinvested. A determination of the unrecognized deferred taxes related to these other components of our outside basis differences is not practicable.

The Company had the following carryforwards (in millions):

As of December 31			2022						2021
U.K.
Operating loss carryforwards			$	608					$	41
Capital loss carryforwards			$	533					$	573
U.S.
Federal operating loss carryforwards			$	1					$	25
Federal capital loss carryforwards			$	112					$	112
Federal interest carryforwards			$	2,269					$	1,140
Federal foreign tax credit carryforwards			$	20					$	18
State operating loss carryforwards			$	473					$	398
State capital loss carryforwards			$	123					$	123
State interest carryforwards			$	1,187					$	551
Other Non-U.S.
Operating loss carryforwards			$	490					$	301
Capital loss carryforwards			$	8					$	35
Interest carryforwards			$	26					$	26
Other carryforwards			$	5					$	5

The U.K. operating losses and capital losses have an indefinite carryforward period. The federal operating loss carryforwards generated through December 31, 2017 expire at various dates between 2034 and 2036 while federal operating loss carryforwards generated after this date have indefinite carryforward periods. State net operating losses as of December 31, 2022 have various carryforward periods and will begin to expire in 2023. Federal and state capital losses can be carried forward until 2023. Federal and state interest carryforwards have indefinite carryforward periods. Foreign tax credits can be carried forward for ten years and will begin to expire in 2028. Operating, capital losses, and other carryforwards in other non-U.S. jurisdictions have various carryforward periods and will begin to expire in 2023. The interest carryforwards in other non-U.S. jurisdictions have an indefinite carryforward period.

During 2012, the Company was granted a tax holiday for the period from October 1, 2012 through September 30, 2022, with respect to withholding taxes and certain income derived from services in Singapore. The Company has been granted a new incentive for the period October 1, 2022 to September 30, 2032. The new incentive provides for a reduced withholding tax rate and a reduced tax rate on certain income derived from services in Singapore, as long as certain conditions are met.

The benefit realized was approximately $115 million, $104 million, and $97 million during the years ended December 31, 2022, 2021, and 2020, respectively. The impact of this tax holiday on diluted earnings per share was $0.54, $0.46, and $0.42 during the years ended December 31, 2022, 2021, and 2020, respectively.

Uncertain Tax Positions

The following is a reconciliation of the Company’s beginning and ending amount of uncertain tax positions (in millions):

			2022						2021
Balance at January 1			$	347					$	321
Additions based on tax positions related to the current year			35						33
Additions for tax positions of prior years			226						7
Reductions for tax positions of prior years			(1)						(4)
Settlements			(1)						—
Business combinations			—						—
Lapse of statute of limitations			(5)						(10)
Foreign currency translation			—						—
Balance at December 31			$	601					$	347

The Company’s liability for uncertain tax positions as of December 31, 2022, 2021, and 2020, includes $535 million, $295 million, and $270 million, respectively, related to amounts that would impact the effective tax rate if recognized. It is possible that the amount of unrecognized tax benefits may change in the next twelve months; however, the Company does not expect the change to have a significant impact on its consolidated statements of income or consolidated balance sheets. These changes may be the result of settlements of ongoing audits. At this time, an estimate of the range of the reasonably possible outcomes within the next twelve months cannot be made.

The Company recognizes interest and penalties related to uncertain tax positions in its provision for income taxes. The Company accrued potential interest and penalties of $40 million, $22 million, and $21 million in 2022, 2021, and 2020, respectively. The Company recorded a liability for interest and penalties of $181 million, $142 million, and $120 million as of December 31, 2022, 2021, and 2020, respectively.

The Company and its subsidiaries file income tax returns in their respective jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through 2007. Material U.S. state and local income tax jurisdiction examinations have been concluded for years through 2014. The Company has concluded income tax examinations in its primary non-U.S. jurisdictions through 2008.

10. Shareholders’ Equity (Deficit)

Distributable Profits

The Company is required under Irish law to have available “distributable profits” to make share repurchases or pay dividends to shareholders. Distributable profits are created through the earnings of the Irish parent company and, among other methods, through intercompany dividends or a reduction in share capital approved by the High Court of Ireland. Distributable profits are not linked to a U.S. GAAP reported amount (e.g., accumulated deficit). As of December 31, 2022 and 2021, the Company had distributable profits in excess of $29.0 billion and $32.7 billion, respectively. We believe that we have the ability to create sufficient distributable profits for the foreseeable future.

Ordinary Shares

Aon has a share repurchase program authorized by the Company’s Board of Directors. The Repurchase Program was established in April 2012 with $5.0 billion in authorized repurchases and was increased by $5.0 billion in authorized repurchases in each of November 2014, June 2017, and November 2020, and by $7.5 billion in February 2022 for a total of $27.5 billion in repurchase authorizations.

Under the Repurchase Program, the Company’s class A ordinary shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions and will be funded from available capital.

The following table summarizes the Company’s share repurchase activity (in millions, except per share data):

						Years Ended December 31
						2022						2021
Shares repurchased						11.1						12.4
Average price per share						$	289.76					$	286.82
Repurchase costs recorded to accumulated deficit						$	3,203					$	3,543

At December 31, 2022, the remaining authorized amount for share repurchases under the Repurchase Program was approximately $6.0 billion. Under the Repurchase Program, the Company has repurchased a total of 160.7 million shares for an aggregate cost of approximately $21.5 billion.

Weighted Average Ordinary Shares

Weighted average ordinary shares outstanding are as follows (in millions):

			Years Ended December 31
			2022						2021						2020
Basic weighted average ordinary shares outstanding			211.7						224.7						231.9
Dilutive effect of potentially issuable shares			1.5						1.4						1.2
Diluted weighted average ordinary shares outstanding			213.2						226.1						233.1

Potentially issuable shares are not included in the computation of Diluted net income per share attributable to Aon shareholders if their inclusion would be antidilutive. There were 0.8 million and 0.3 million shares excluded from the calculation in 2022 and 2021, respectively, and no shares excluded from the calculation in 2020.

Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):

			Change in Fair Value of Financial Instruments (1)						Foreign Currency Translation Adjustments						Postretirement Benefit Obligation (2)						Total
Balance at December 31, 2019			$	(12)					$	(1,305)					$	(2,716)					$	(4,033)
Other comprehensive income (loss) before reclassifications:
Other comprehensive income (loss) before reclassifications			1						258						(255)						4
Tax benefit			—						2						60						62
Other comprehensive income (loss) before reclassifications, net			1						260						(195)						66
Amounts reclassified from accumulated other comprehensive income (loss):
Amounts reclassified from accumulated other comprehensive income			15						—						125						140
Tax expense			(3)						—						(31)						(34)
Amounts reclassified from accumulated other comprehensive income, net			12						—						94						106
Net current period other comprehensive income (loss)			13						260						(101)						172
Balance at December 31, 2020			$	1					$	(1,045)					$	(2,817)					$	(3,861)
Other comprehensive income (loss) before reclassifications:
Other comprehensive income (loss) before reclassifications			—						(290)						227						(63)
Tax benefit (expense)			—						2						(58)						(56)
Other comprehensive income (loss) before reclassifications, net			—						(288)						169						(119)
Amounts reclassified from accumulated other comprehensive income (loss):
Amounts reclassified from accumulated other comprehensive income			2						—						142						144
Tax expense			(1)						—						(34)						(35)
Amounts reclassified from accumulated other comprehensive income, net			1						—						108						109
Net current period other comprehensive income (loss)			1						(288)						277						(10)
Balance at December 31, 2021			$	2					$	(1,333)					$	(2,540)					$	(3,871)
Other comprehensive income (loss) before reclassifications:
Other comprehensive loss before reclassifications			(15)						(528)						(569)						(1,112)
Tax benefit (expense)			4						—						149						153
Other comprehensive loss before reclassifications, net			(11)						(528)						(420)						(959)
Amounts reclassified from accumulated other comprehensive income (loss):
Amounts reclassified from accumulated other comprehensive income (loss)			(2)						—						282						280
Tax expense			—						—						(73)						(73)
Amounts reclassified from accumulated other comprehensive income (loss), net			(2)						—						209						207
Net current period other comprehensive loss			(13)						(528)						(211)						(752)
Balance at December 31, 2022			$	(11)					$	(1,861)					$	(2,751)					$	(4,623)

(1)Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Total revenue, Interest expense, and Compensation and benefits in the Consolidated Statements of Income. Refer to Note 13 “Derivatives and Hedging” for further information regarding the Company’s derivative and hedging activity.

(2)Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense) in the Consolidated Statements of Income.

11. Employee Benefits

Defined Contribution Savings Plans

Aon maintains defined contribution savings plans for the benefit of its employees. The expense recognized for these plans is included in Compensation and benefits in the Consolidated Statements of Income. The expense for the significant plans in the U.S., U.K., Netherlands, and Canada is as follows (in millions):

			Years Ended December 31
			2022						2021						2020
U.S.			$	108					$	103					$	87
U.K.			47						46						42
Netherlands and Canada			33						35						26
Total			$	188					$	184					$	155

Pension and Other Postretirement Benefits

The Company sponsors defined benefit pension and postretirement health and welfare plans that provide retirement, medical, and life insurance benefits. The postretirement health care plans are contributory, with retiree contributions adjusted annually, and the life insurance and pension plans are generally noncontributory. The significant U.S., U.K., Netherlands, and Canada pension plans are closed to new entrants.

Pension Plans

The following tables provide a reconciliation of the changes in the projected benefit obligations and fair value of assets for the years ended December 31, 2022 and 2021, and a statement of the funded status as of December 31, 2022 and 2021, for Aon’s significant U.K., U.S., and other major pension plans, which are located in the Netherlands and Canada. These plans represent approximately 88% of the Company’s projected benefit obligations.

			U.K.												U.S.												Other
(millions)			2022						2021						2022						2021						2022						2021
Change in projected benefit obligation
At January 1			$	4,919					$	5,406					$	3,164					$	3,380					$	1,531					$	1,625
Service cost			1						1						—						—						—						—
Interest cost			83						65						73						57						19						12
Settlements			—						(14)						(283)						—						—						—
Actuarial (gain) loss			(1,418)						(292)						(607)						(103)						(322)						24
Benefit payments			(195)						(189)						(167)						(170)						(45)						(47)
Foreign currency impact			(444)						(58)						—						—						(89)						(83)
As of December 31			$	2,946					$	4,919					$	2,180					$	3,164					$	1,094					$	1,531
Accumulated benefit obligation at end of year			$	2,946					$	4,919					$	2,180					$	3,164					$	1,079					$	1,504
Change in fair value of plan assets
At January 1			$	6,246					$	6,652					$	2,378					$	2,276					$	1,430					$	1,497
Actual return on plan assets			(1,961)						(136)						(484)						211						(284)						46
Employer contributions			7						9						37						61						15						17
Settlements			—						(14)						(283)						—						—						—
Benefit payments			(195)						(189)						(167)						(170)						(45)						(47)
Foreign currency impact			(559)						(76)						—						—						(83)						(83)
As of December 31			$	3,537					$	6,246					$	1,481					$	2,378					$	1,032					$	1,430
Market related value at end of year			$	3,537					$	6,246					$	1,794					$	2,174					$	1,032					$	1,430
Amount recognized in Statement of Financial Position as of December 31
Funded status			$	591					$	1,327					$	(699)					$	(786)					$	(62)					$	(101)
Unrecognized prior-service cost			35						40						—						—						(6)						(6)
Unrecognized loss			1,726						1,215						1,305						1,551						443						489
Net amount recognized			$	2,352					$	2,582					$	606					$	765					$	375					$	382

The benefit obligation decreased primarily as a result of increases in the discount rates in 2022 as compared to 2021. The value of plan assets decreased as a result of negative asset returns, predominately in the U.K, and overall weaker exchange rates versus the U.S. Dollar. The U.K. pension assets are concentrated in fixed income and annuities which were disproportionately negatively impacted by the rising interest rate environment. The U.K. hedging strategy continues to perform as expected and the related pension plans remain over-funded. Net actuarial gains decreased the benefit obligation in 2021 primarily due to the increase in the discount rates.

In November 2022, to further its pension de-risking strategy the Company purchased an annuity for portions of its U.S. pension plans that will settle certain obligations. The transaction settled $280 million of benefit obligations using $280 million of assets.

In November 2020, the Company entered into an insurance contract that covers a portion of the assets within a select U.K. pension scheme. The transaction resulted in a decrease in Prepaid pension assets and Accumulated other comprehensive income of $94 million.

Amounts recognized in the Consolidated Statements of Financial Position consist of (in millions):

			U.K.												U.S.												Other
			2022						2021						2022						2021						2022						2021
Prepaid benefit cost (1)			$	612					$	1,344					$	—					$	—					$	—					$	—
Accrued benefit liability - current (2)			(1)						(1)						(42)						(52)						(5)						(5)
Accrued benefit liability - non-current (3)			(20)						(16)						(657)						(734)						(57)						(96)
Accumulated other comprehensive loss			1,761						1,255						1,305						1,551						437						483
Net amount recognized			$	2,352					$	2,582					$	606					$	765					$	375					$	382

(1)Included in Prepaid pension.

(2)Included in Other current liabilities.

(3)Included in Pension, other postretirement, and postemployment liabilities.

Amounts recognized in Accumulated other comprehensive loss (income) that have not yet been recognized as components of net periodic benefit cost at December 31, 2022 and 2021 consist of (in millions):

			U.K.												U.S.												Other
			2022						2021						2022						2021						2022						2021
Net loss			$	1,726					$	1,215					$	1,305					$	1,551					$	443					$	489
Prior service cost (income)			35						40						—						—						(6)						(6)
Total			$	1,761					$	1,255					$	1,305					$	1,551					$	437					$	483

In 2022, U.S. plans with a PBO and an ABO in excess of the fair value of plan assets had a PBO of $2.2 billion, an ABO of $2.2 billion, and plan assets with a fair value of $1.5 billion. U.K. plans with a PBO and an ABO in excess of the fair value of plan assets had a PBO of $114 million, an ABO of $114 million and, plan assets with a fair value of $93 million. Other plans with a PBO in excess of the fair value of plan assets had a PBO of $1.1 billion and plan assets with a fair value of $1.0 billion, and other plans with an ABO in excess of the fair value of plan assets had an ABO of $220 million and plan assets with a fair value of $166 million.

In 2021, U.S. plans with a PBO and an ABO in excess of the fair value of plan assets had a PBO of $3.2 billion, an ABO of $3.2 billion, and plan assets with a fair value of $2.4 billion. U.K. plans with a PBO and an ABO in excess of the fair value of plan assets had a PBO of $17 million, an ABO of $17 million and no plan assets. Other plans with a PBO in excess of the fair value of plan assets had a PBO of $1.5 billion and plan assets with a fair value of $1.4 billion, and other plans with an ABO in excess of the fair value of plan assets had an ABO of $409 million and plan assets with a fair value of $326 million.

Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions):

			U.K.																		U.S.																		Other
			2022						2021						2020						2022						2021						2020						2022						2021						2020
Service cost			$	1					$	1					$	—					$	—					$	—					$	—					$	—					$	—					$	—
Interest cost			83						65						88						73						57						85						19						12						19
Expected return on plan assets, net of administration expenses			(134)						(137)						(159)						(108)						(130)						(134)						(33)						(32)						(34)
Amortization of prior-service cost			2						2						2						—						—						1						—						—						—
Amortization of net actuarial loss			29						32						30						61						78						68						13						15						12
Net periodic benefit (income) cost			(19)						(37)						(39)						26						5						20						(1)						(5)						(3)
Settlement expense			—						5						2						170						—						—						—						—						—
Total net periodic benefit cost (income)			$	(19)					$	(32)					$	(37)					$	196					$	5					$	20					$	(1)					$	(5)					$	(3)

The Company uses a full-yield curve approach in the estimation of the service and interest cost components of net periodic pension and postretirement benefit cost for its major pension and other postretirement benefit plans. This estimation was obtained by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

In November 2022, to further its pension de-risking strategy the Company purchased an annuity for portions of its U.S. pension plans that will settle certain obligations. This triggered settlement accounting which required immediate recognition of a portion of the accumulated losses associated with the plan. Consequently, the Company recognized a non-cash settlement charge of approximately $170 million in 2022.

Transfer payments from certain U.K. pension plans exceeded the plan’s service and interest cost in 2021 and 2020. This triggered settlement accounting which required immediate recognition of a portion of the accumulated losses associated with the plan. Consequently, the Company recognized a non-cash settlement charge for approximately £3 million in 2021 ($5 million using December 31, 2021 exchange rates), and approximately £2 million in 2020 ($2 million using December 31, 2020 exchange rates).

The weighted-average assumptions used to determine benefit obligations are as follows:

			U.K.												U.S. (1)												Other
			2022						2021						2022						2021						2022						2021
Discount rate			4.89%						1.96%						4.82 - 5.03%						2.23 - 2.8%						3.23 - 5.19%						1.00 - 2.97%
Rate of compensation increase			3.59 - 4.09%						3.62 - 4.12%						N/A						N/A						1.00 - 3.00%						1.00 - 3.00%
Underlying price inflation			2.44%						2.52%						N/A						N/A						2.00%						2.00%

(1)U.S. pension plans are frozen and therefore not impacted by compensation increases or price inflation.

The weighted-average assumptions used to determine the net periodic benefit cost are as follows:

			U.K.																		U.S.																		Other
			2022						2021						2020						2022						2021						2020						2022						2021						2020
Discount rate			1.85%						1.20%						1.89%						1.67 - 2.25%						1.12 - 1.79%						2.36 - 2.76%						0.84 - 2.58%						0.28 - 2.00%						0.74 - 2.90%
Expected return on plan assets, net of administration expenses			2.34%						2.04%						2.74%						2.03 - 5.28%						2.65- 6.56%						3.30%-7.04%						1.80 - 3.15%						1.70 - 2.65%						2.10 - 3.10%
Rate of compensation increase			3.62 - 4.12%						3.22 - 3.72%						3.24 - 3.74%						N/A						N/A						N/A						1.00 - 3.00%						1.00 - 3.00%						1.00 - 3.00%

Expected Return on Plan Assets

To determine the expected long-term rate of return on plan assets, the historical performance, investment community forecasts, and current market conditions are analyzed to develop expected returns for each asset class used by the plans. The expected returns for each asset class are weighted by the target allocations of the plans. The expected return of 5.28% on U.S. plan assets reflects a portfolio that is seeking asset growth through a higher equity allocation while maintaining prudent risk levels. The portfolio contains certain assets that have historically resulted in higher returns, as well as other financial instruments to minimize downside risk.

No plan assets are expected to be returned to the Company during 2023.

Fair value of plan assets

The Company determined the fair value of plan assets through numerous procedures based on the asset class and available information. Refer to Note 14 “Fair Value Measurements and Financial Instruments” for a description of the procedures performed to determine the fair value of the plan assets.

The fair values of the Company’s U.S. pension plan assets at December 31, 2022 and December 31, 2021, by asset category, are as follows (in millions):

									Fair Value Measurements Using
Asset Category			Balance at December 31, 2022						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)			$	42					$	42					$	—					$	—
Equity investments:
Equity securities			64						64						—						—
Equity derivatives			(6)						—						(6)						—
Pooled funds (2)			293						—						—						—
Fixed income investments:
Corporate bonds			192						—						192						—
Government and agency bonds			149						124						25						—
Pooled funds (2)			507						—						—						—
Other investments:
Real estate (2) (3)			113						—						—						—
Alternative investments (2) (4)			127						—						—						—
Total			$	1,481					$	230					$	211					$	—

									Fair Value Measurements Using
Asset Category			Balance at December 31, 2021						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)			$	93					$	93					$	—					$	—
Equity investments:
Equity securities			86						86						—						—
Equity derivatives			19						—						19						—
Pooled funds (2)			548						—						—						—
Fixed income investments:
Corporate bonds			249						—						249						—
Government and agency bonds			230						192						38						—
Pooled funds (2)			838						—						—						—
Other investments:
Real estate (2)(3)			156						—						—						—
Alternative investments (2) (4)			159						—						—						—
Total			$	2,378					$	371					$	306					$	—

(1)Consists of cash and institutional short-term investment funds.

(2)Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note.

(3)Consists of property funds and trusts holding direct real estate investments.

(4)Consists of limited partnerships, private equity, and hedge funds.

The fair values of the Company’s major U.K. pension plan assets at December 31, 2022 and December 31, 2021, by asset category, are as follows (in millions):

									Fair Value Measurements Using
			Balance at December 31, 2022						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)			$	336					$	336					$	—					$	—
Equity investments:
Pooled funds (2)			—						—						—						—
Fixed income investments:
Derivatives (3)			(548)						—						(548)						—
Government and agency bonds			1,593						1,593						—						—
Annuities			1,403						—						—						1,403
Pooled funds (2)			139						—						—						—
Other investments:
Real estate (2) (4)			97						—						—						—
Pooled funds (2) (5)			517						—						—						—
Total			$	3,537					$	1,929					$	(548)					$	1,403

									Fair Value Measurements Using
			Balance at December 31, 2021						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)			$	872					$	872					$	—					$	—
Equity investments:
Pooled funds (2)			—						—						—						—
Fixed income investments:
Derivatives (3)			(1,640)						—						(1,640)						—
Government and agency bonds			2,969						2,969						—						—
Annuities			2,305						—						—						2,305
Pooled funds (2)			463						—						—						—
Other investments:
Real estate (2) (4)			130						—						—						—
Pooled funds (2) (5)			1,147						—						—						—
Total			$	6,246					$	3,841					$	(1,640)					$	2,305

(1)Consists of cash and institutional short-term investment funds.

(2)Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note.

(3)Consists of equity securities and equity derivatives, including repurchase agreements.

(4)Consists of property funds and trusts holding direct real estate investments.

(5)Consists of multi-strategy limited partnerships, private equity, hedge funds, and collective investment schemes with a diversified portfolio of cash, equities, equity related securities, derivatives, and/or fixed income securities.

The following table presents the changes in the Level 3 fair-value category in the Company’s U.K. pension plans for the years ended December 31, 2022 and December 31, 2021 (in millions):

Fair Value Measurements Using Level 3 Inputs			Annuities
Balance at January 1, 2021			$	2,625
Actual return on plan assets:
Relating to assets still held at December 31, 2021			(286)
Purchase, sales and settlements-net			—
Foreign exchange			(34)
Balance at December 31, 2021			2,305
Actual return on plan assets:
Relating to assets still held at December 31, 2022			(674)
Purchases, sales and settlements-net			—
Foreign exchange			(228)
Balance at December 31, 2022			$	1,403

The fair values of the Company’s other major pension plan assets at December 31, 2022 and December 31, 2021, by asset category, are as follows (in millions):

									Fair Value Measurements Using
			Balance at December 31, 2022						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)			$	30					$	30					$	—					$	—
Equity investments:
Equity securities			53						53						—						—
Pooled funds (2)			211						—						—						—
Fixed income investments:
Government and agency bonds			225						225						—						—
Derivatives			(3)						—						(3)						—
Pooled funds (2)			462						—						—						—
Other investments:
Alternative investments (2) (3)			42						—						—						—
Real estate (2) (4)			12						—						—						—
Total			$	1,032					$	308					$	(3)					$	—

									Fair Value Measurements Using
			Balance at December 31, 2021						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)			$	29					$	29					$	—					$	—
Equity investments:
Equity securities			72						72						—						—
Pooled funds (2)			316						—						—						—
Fixed income investments:
Government and agency bonds			350						350						—						—
Pooled funds (2)			597						—						—						—
Other investments:
Alternative investments (2) (3)			55						—						—						—
Real estate (2) (4)			11						—						—						—
Total			$	1,430					$	451					$	—					$	—

(1)Consists of cash and institutional short-term investment funds.

(2)Certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note.

(3)Consists of limited partnerships, private equity, and hedge funds.

(4)Consists of property funds and trusts holding direct real estate investments.

Investment Policy and Strategy

The U.S. investment policy, as established by the RPGIC, seeks reasonable asset growth at prudent risk levels within weighted average target allocations. At December 31, 2022, the weighted average targeted allocation for the U.S. plans was 30% for equity investments, 54% for fixed income investments, and 16% for other investments. Aon believes that plan assets are well-diversified and are of appropriate quality. The investment portfolio asset allocation is reviewed quarterly and re-balanced to be within policy target allocations. The investment policy is reviewed at least annually and revised, as deemed appropriate by the RPGIC. The investment policies for international plans are generally established by the local pension plan trustees and seek to maintain the plans’ ability to meet liabilities and to comply with local minimum funding requirements. Plan assets are invested in diversified portfolios that provide adequate levels of return at an acceptable level of risk. The investment policies are reviewed at least annually and revised, as deemed appropriate to ensure that the objectives are being met. At December 31, 2022, the weighted average targeted allocation for the U.K. and non-U.S. plans was 6% for equity investments, 86% for fixed income investments, and 8% for other investments.

Cash Flows

Contributions

Based on current assumptions, in 2023, the Company expects to contribute approximately $4 million, $43 million, and $14 million to its significant U.K., U.S., and other major pension plans, respectively.

Estimated Future Benefit Payments

Estimated future benefit payments for plans, not including voluntary one-time lump sum payments, are as follows at December 31, 2022 (in millions):

						U.K.						U.S.						Other
2023						$	153					$	157					$	46
2024						$	157					$	158					$	47
2025						$	161					$	158					$	49
2026						$	166					$	162					$	50
2027						$	170					$	155					$	51
2028 - 2032						$	905					$	754					$	274

U.S. and Canadian Other Postretirement Benefits

The following table provides an overview of the accumulated PBO, fair value of plan assets, funded status and net amount recognized as of December 31, 2022 and 2021 for the Company’s other significant postretirement benefit plans located in the U.S. and Canada (in millions):

			2022						2021
Accumulated projected benefit obligation			$	83					$	109
Fair value of plan assets			14						17
Funded status			(69)						(92)
Unrecognized prior-service credit			(1)						(1)
Unrecognized (gain) loss			(19)						2
Net amount recognized			$	(89)					$	(91)

Other information related to the Company’s other postretirement benefit plans are as follows:

			2022						2021						2020
Net periodic benefit cost recognized (millions)			$3						$5						$4
Weighted-average discount rate used to determine future benefit obligations			4.94 - 5.19%						2.52 - 3.06%						2.10 - 2.58%
Weighted-average discount rate used to determine net periodic benefit costs			1.97 - 2.69%						1.45 - 2.68%						2.93 - 3.25%

Based on current assumptions, the Company expects:

• The amount in Accumulated other comprehensive income expected to be recognized as a component of net periodic benefit cost during 2023 is $0.8 million net gain and $0.2 million of prior-service credit.

• To contribute $5 million to fund significant other postretirement benefit plans during 2023.

• Estimated future benefit payments will be approximately $5 million each year for 2023 through 2027, and $27 million in aggregate for 2028-2032.

12. Share-Based Compensation Plans

The following table summarizes share-based compensation expense recognized in the Consolidated Statements of Income in Compensation and benefits (in millions):

			Years Ended December 31
			2022						2021						2020
Restricted share units			$	251					$	204					$	186
Performance share awards			134						189						116
Employee share purchase plans and other (1)			12						56						10
Total share-based compensation expense			397						449						312
Tax benefit			83						87						61
Share-based compensation expense, net of tax			$	314					$	362					$	251

(1) 2021 includes expenses related to the Aon United Growth Ownership Plan.

Restricted Share Units

RSUs generally vest between three and five years. The fair value of RSUs is based upon the market value of the Company’s class A ordinary shares at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all non-vested awards. Compensation expense associated with RSUs is recognized on a straight-line basis over the requisite service period. Dividend equivalents are paid on certain RSUs, based on the initial grant amount.

The following table summarizes the status of the Company’s RSUs (shares in thousands, except fair value):

			Shares						Fair Value (1)
Non-vested balance at December 31, 2021			3,075						$	203
Granted			1,117						$	279
Vested			(1,154)						$	187
Forfeited			(175)						$	219
Non-vested balance at December 31, 2022			2,863						$	238

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

The weighted-average grant date fair value of the Company's RSU awards granted during the years ended December 31, 2022, December 31, 2021, and December 31, 2020 was $279, $253, and $185, respectively. The fair value of RSUs that vested during 2022, 2021, and 2020 was $216 million, $189 million, and $190 million, respectively.

Unamortized deferred compensation expense amounted to $466 million as of December 31, 2022, with a remaining weighted average amortization period of approximately 2.0 years.

Performance Share Awards

The vesting of PSAs is contingent upon meeting a cumulative level of adjusted diluted earnings per share related performance over a three-year period. The actual issuance of shares may range from 0-200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of PSAs is based upon the market price of the Company’s class A ordinary shares at the date of grant, reduced by the present value of estimated dividends foregone during the vesting period. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits in the Consolidated Statements of Income, if necessary. Dividend equivalents are not paid on PSAs.

The following table summarizes the status of the Company's PSAs at 100% of the targeted amount (shares in thousands, except fair value):

			Shares						Fair Value (1)
Non-vested balance at December 31, 2021			1,298						$	181
Granted			300						$	311
Vested			(444)						$	163
Forfeited			(18)						$	217
Non-vested balance at December 31, 2022			1,136						$	222

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

The per share weighted-average grant date fair value of the Company's PSA awards granted during the years ended December 31, 2022, December 31, 2021, and December 31, 2020 was $311, $225, and $163, respectively. The payout of shares in 2022 with respect to the PSA awards granted in 2019 based on performance for the three-year performance period ended 2021 was, in aggregate, 888 thousand shares. The fair value of PSAs that vested during 2022, 2021, and 2020 was $145 million, $112 million, and $121 million, respectively.

Unamortized compensation expense, based on current performance levels, amounted to $126 million as of December 31, 2022, with a remaining weighted average amortization period of approximately 1.3 years.

13. Derivatives and Hedging

The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes.

Foreign Exchange Risk Management

The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross-currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income.

The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 90-day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Consolidated Statements of Income.

The notional and fair values of derivative instruments are as follows (in millions):

			Notional Amount												Net Amount of Derivative Assets Presented in the Statements of Financial Position (1)												Net Amount of Derivative Liabilities Presented in the Statements of Financial Position
As of December 31			2022						2021						2022						2021						2022						2021
Foreign exchange contracts
Accounted for as hedges			$	618					$	629					$	12					$	27					$	2					$	—
Not accounted for as hedges (3)			312						412						—						2						1						—
Total			$	930					$	1,041					$	12					$	29					$	3					$	—

(1)Included within Other current assets ($3 million in 2022 and $21 million in 2021) or Other non-current assets ($9 million in 2022 and $8 million in 2021).

(2)Included within Other current liabilities ($2 million in 2022) or Other non-current liabilities ($1 million in 2022).

(3)These contracts typically are for 90-day durations and executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date.

The amounts of derivative gains (losses) recognized in the Consolidated Financial Statements are as follows (in millions):

						2022						2021						2020
(Loss) gain recognized in Accumulated other comprehensive loss						$	(15)					$	—					$	1

The amounts of derivative gains (losses) reclassified from Accumulated other comprehensive loss to the Consolidated Statements of Income are as follows (in millions):

						Years Ended December 31
						2022						2021						2020
Total revenue						$	2					$	(3)					$	(14)
Compensation and benefits						—						1						—
Interest expense						—						—						(1)
Total						$	2					$	(2)					$	(15)

The Company estimates that approximately $10 million of pretax loss currently included within Accumulated other comprehensive loss will be reclassified into earnings in the next twelve months.

The Company recorded a gain of $11 million in 2022, a loss of $24 million in 2021, and a gain of $1 million in 2020 in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges.

14. Fair Value Measurements and Financial Instruments

Accounting standards establish a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows:

• Level 1 — observable inputs such as quoted prices for identical assets in active markets;

• Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and

• Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions.

The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments, including pension assets (refer to Note 11 “Employee Benefits”):

Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share and reviews the floating net asset value of institutional prime money market funds for reasonableness.

Cash and cash equivalents consist of cash and institutional short-term investment funds. The Company reviews the short-term investment funds to obtain reasonable assurance that the fund net asset value is $1 per share.

Equity investments consist of equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio, agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities.

Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using DCF models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on internal Company guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Consolidated Financial Statements.

Pooled funds consist of various equity, fixed income, and real estate mutual fund type investment vehicles. Pooled investment funds fair value is estimated based on the proportionate share ownership in the underlying net assets of the investment, which is based on the fair value of the underlying securities. The underlying securities typically trade on a national securities exchange or may be valued by the fund managers using applicable models, inputs, and assumptions. The Company gains an understanding of the investment guidelines and valuation policies of the fund and discusses fund performance with pooled fund managers. The Company obtains audited fund manager financial statements, when available. If the pooled fund is designed to replicate a publicly traded index, the Company compares the performance of the fund to the index to assess the reasonableness of the fair value measurement.

Alternative investments consist of limited partnerships, private equity, and hedge funds. Alternative investment fair value is generally estimated based on the proportionate share ownership in the underlying net assets of the investment as determined by the general partner or investment manager. The valuations are based on various factors depending on investment strategy, proprietary models, and specific financial data or projections. The Company obtains audited fund manager financial statements, when available. The Company obtains a detailed understanding of the models, inputs, and assumptions used in developing prices provided by the investment managers, or appropriate party, through regular discussions. The Company also obtains the investment manger’s valuation policies and assesses the assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates in the Consolidated Financial Statements.

Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatility.

Annuity contracts consist of insurance group annuity contracts purchased to match the pension benefit payment stream owed to certain selected plan participant demographics within a few major U.K. defined benefit plans. Annuity contracts are valued using a DCF model utilizing assumptions such as discount rate, mortality, and inflation.

Real estate and REITs consist of publicly traded REITs and direct real estate investments. Level 1 REITs are valued using the closing stock price on a national securities exchange. Non-Level 1 values are based on the proportionate share of ownership in the underlying net asset value as determined by the investment manager. The Company independently reviews the listing of Level 1 REIT securities in the portfolio and agrees the closing stock prices to a national securities exchange. The Company gains an understanding of the investment guidelines and valuation policies of the non-Level 1 real estate funds and discusses performance with the fund managers. The Company obtains audited fund manager financial statements, when available. See the description of “Alternative investments” for further detail on valuation procedures surrounding non-Level 1 REITs.

Debt is carried at outstanding principal balance, less any unamortized issuance costs, discount or premium. Fair value is based on quoted market prices or estimates using DCF analyses based on current borrowing rates for similar types of borrowing arrangements.

The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2022 and December 31, 2021 (in millions):

									Fair Value Measurements Using
			Balance at December 31, 2022						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets
Money market funds (1)			$	3,323					$	3,323					$	—					$	—
Other investments
Government bonds			$	1					$	—					$	1					$	—
Derivatives (2)
Gross foreign exchange contracts			$	19					$	—					$	19					$	—
Liabilities
Derivatives (2)
Gross foreign exchange contracts			$	9					$	—					$	9					$	—

									Fair Value Measurements Using
			Balance at December 31, 2021						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets
Money market funds (1)			$	2,918					$	2,918					$	—					$	—
Other investments
Government bonds			$	1					$	—					$	1					$	—
Derivatives (2)
Gross foreign exchange contracts			$	40					$	—					$	40					$	—
Liabilities
Derivatives (2)
Gross foreign exchange contracts			$	11					$	—					$	11					$	—

(1)Included within Fiduciary assets or Short-term investments in the Consolidated Statements of Financial Position, depending on their nature and initial maturity.

(2)Refer to Note 13 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity.

There were no transfers of assets or liabilities between fair value hierarchy levels during 2022 or 2021. The Company recognized no realized or unrealized gains or losses in the Consolidated Statements of Income related to assets and liabilities measured at fair value using unobservable inputs in 2022, 2021, or 2020.

The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table provides the carrying value and fair value for the Company’s term debt (in millions):

			2022												2021
As of December 31			Carrying Value						Fair Value						Carrying Value						Fair Value
Current portion of long-term debt			$	350					$	347					$	499					$	507
Long-term debt			$	9,825					$	8,745					$	8,228					$	9,204

15. Claims, Lawsuits, and Other Contingencies

Legal

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

The Company is not subject to current matters in connection with which the Company believes (1) material loss (including interest and costs) is probable, (2) material loss (including interest and costs) is reasonably possible (that is, more than remote but not probable), or (3) there exists the reasonable possibility of material loss (including interest and costs) greater than the accrued amount. The Company includes in the current matters described below certain matters in which it believes a material loss is remote but in which the claimed amounts are significant. Although management at present believes that the ultimate outcome of such matters, individually or in the aggregate, will not have a material adverse effect on the consolidated financial position of Aon, legal proceedings are subject to inherent uncertainties and unfavorable rulings or other events. Unfavorable resolutions could include substantial monetary or punitive damages imposed on Aon or its subsidiaries. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected.

Current Matters

Aon Hewitt Investment Consulting, Inc, now known as Aon Investments USA, Inc. (“Aon Investments”), Lowe’s Companies, Inc. and the Administrative Committee of Lowe’s Companies, Inc. (collectively “Lowe’s”) were sued on April 27, 2018 in the U.S. District Court for the Western District of North Carolina (the “Court”) in a class action lawsuit brought on behalf of participants in the Lowe’s 401(k) Plan (the “Plan”). Aon Investments provided investment consulting services to Lowe’s under ERISA. The plaintiffs contend that in 2015 Lowe’s imprudently placed the Hewitt Growth Fund in the Plan’s lineup of investments, the Hewitt Growth Fund underperformed its benchmarks, and that Aon had a conflict of interest in recommending the proprietary fund for the Plan. The plaintiffs allege the Plan suffered over $200 million in investment losses when compared to the eight funds it replaced. The plaintiffs allege that Aon Investments breached its duties of loyalty and prudence pursuant to ERISA. The matter was tried to the Court the last week of June 2021, and the Court entered judgment in favor of Aon on all claims on October 12, 2021. Plaintiffs have filed an appeal with the United States Court of Appeals for the Fourth Circuit, and oral argument took place on December 7, 2022. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims and appeal.

Aon faces legal action arising out of a fatal plane crash in November 2016. Aon U.K. Limited placed an aviation civil liability reinsurance policy for the Bolivian insurer of the airline. After the crash, the insurer determined that there was no coverage under the airline’s insurance policy due to the airline’s breach of various policy conditions. In November 2018, the owner of the aircraft filed a claim in Bolivia against Aon, the airline, the insurer and the insurance broker. The claim is for $16 million plus any liability the owner has to third parties. In November 2019, a federal prosecutor in Brazil filed a public civil action naming three Aon entities as defendants, along with the airline, the insurer, and the lead reinsurer. That claim seeks pecuniary damages for families affected by the crash in the sum of $300 million; or, in the alternative, $50 million; or, in the alternative, $25 million; plus “moral damages” of an equivalent sum. Separately, in March 2020, the Brazilian Federal Senate invited Aon to give evidence to a Parliamentary Commission of Inquiry in an investigation into the accident. Aon cooperated with that inquiry. In August 2020, 43 individuals (surviving passengers and estates of the deceased) filed a motion in the Circuit Court of

the 11th Judicial Circuit in and for Miami-Dade County, Florida, seeking permission to commence proceedings against Aon (and the insurer and reinsurers) for claims totaling $844 million. Finally, in April 2021, representatives of 16 passengers issued a claim against Aon in the High Court in England seeking damages under the Fatal Accidents Act 1976 in the sum of £29 million ($35 million at December 31, 2022 exchange rates). In December 2022, the High Court in England granted an anti-suit injunction, restricting the 43 individuals who previously filed a motion in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, from continuing litigation in the Circuit Court of the 11th Judicial Circuit against Aon. Aon believes that it has meritorious defenses and intends to vigorously defend itself against the remaining claims.

Settled/Closed Matters

On October 3, 2017, CCC invoked arbitration to pursue a claim that it asserts against Aon New Zealand. Aon provided insurance broking services to CCC in relation to CCC’s 2010-2011 material damage and business interruption program. In December 2015, CCC settled its property and business interruption claim for its losses arising from the 2010-2011 Canterbury earthquakes against the underwriter of its material damage and business interruption program and the reinsurers of that underwriter. CCC contends that acts and omissions by Aon caused CCC to recover less in that settlement than it otherwise would have. CCC claimed damages of approximately NZD 320 million ($202 million at December 31, 2022 exchange rates) plus interest and costs. In December 2022, the case was settled with no admission of liability on the part of Aon.

Guarantees and Indemnifications

The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable are included in the Financial Statements and are recorded at fair value.

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

Guarantee of Registered Securities

In connection with the Ireland Reorganization, on April 1, 2020, Aon plc and Aon Global Holdings plc entered into various agreements pursuant to which they agreed to guarantee the obligations of Aon Corporation arising under issued and outstanding debt securities, which were previously guaranteed solely by Aon Global Limited and the obligations of Aon Global Limited arising under issued and outstanding debt securities, which were previously guaranteed solely by Aon Corporation. Those agreements include: (1) Second Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, and Aon Global Holdings plc and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (amending and restating the Amended and Restated Indenture, dated April 2, 2012, among Aon Corporation, Aon Global Limited and the Trustee); (2) Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Indenture, dated December 12, 2012, among Aon Corporation, Aon Global Limited plc and the Trustee); (3) Second Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Amended and Restated Indenture, dated May 20, 2015, among Aon Corporation, Aon Global Limited and the Trustee); (4) Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Indenture, dated November 13, 2015, among Aon Corporation, Aon Global Limited and the Trustee); and (5) Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Indenture, dated December 3, 2018, among Aon Corporation, Aon Global Limited and the Trustee).

Letters of Credit

Aon has entered into a number of arrangements whereby the Company’s performance on certain obligations is guaranteed by a third party through the issuance of LOCs. The Company had total LOCs outstanding of approximately $74 million at December 31, 2022, and $75 million at December 31, 2021. These LOCs cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries.

Premium Payments

The Company has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies. The maximum exposure with respect to such contractual contingent guarantees was approximately $173 million at December 31, 2022 compared to $153 million at December 31, 2021.

16. Segment Information

The Company operates as one segment that includes all of Aon’s operations, which as a global professional services firm provides a broad range of risk, health, and wealth solutions through four solution lines which make up its principal products and services. The CODM assesses the performance of the Company and allocates resources based on one segment: Aon United.

The Company’s reportable operating segment has been determined using a management approach, which is consistent with the basis and manner in which the CODM uses financial information for the purposes of allocating resources and evaluating performance. The CODM assesses performance and allocates resources based on total Aon results against its key four metrics, expense discipline, and collaborative behaviors that maximize value for Aon and its shareholders, regardless of which solution line it benefits.

As Aon operates as one segment, segment profit or loss is consistent with consolidated reporting as disclosed in the Consolidated Statements of Income. Refer to Note 3 “Revenue from Contracts with Customers” for further information on revenue by principal service line.

Consolidated long-lived assets, net by geographic area are as follows (in millions):

As of December 31			Total						United States						Americas other than U.S.						United Kingdom						Ireland						Other Europe, Middle East, & Africa						Asia Pacific
2022			$	1,300					$	519					$	120					$	155					$	9					$	279					$	218
2021			$	1,378					$	563					$	121					$	180					$	7					$	293					$	214