Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE SUMMARY OF FIRST QUARTER 2024 FINANCIAL RESULTS

Aon plc is a leading global professional services firm providing a broad range of Risk and Human Capital Solutions. Through our experience, global reach, and comprehensive analytics, we help clients meet rapidly changing, increasingly complex, and interconnected challenges related to risk and people. We are committed to accelerating innovation to address unmet and evolving client needs so that our clients are better informed, better advised, and able to make better decisions to protect and grow their business. Management remains focused on strengthening Aon and uniting the firm with one portfolio of capability enabled by data and analytics and one operating model to deliver additional insight, connectivity, and efficiency.

Financial Results

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

• Revenue increased $199 million, or 5%, to $4.1 billion compared to the prior year period reflecting organic revenue growth of 5%, a 1% favorable impact from fiduciary investment income and a 1% favorable impact from foreign currency translation, partially offset by a 2% unfavorable impact from acquisitions, divestitures and other items.

• Total operating expenses in the first quarter increased $207 million, or 9%, to $2.6 billion compared to the prior year period due primarily to Accelerating Aon United restructuring charges, an increase in expense associated with 5% organic revenue growth, investments in long-term growth, and a $22 million unfavorable impact from foreign currency translation, partially offset by $20 million of restructuring savings realized in the quarter.

• Operating margin decreased to 36.0% from 38.1% in the prior year period. The decrease was driven by an increase in operating expenses as listed above, partially offset by organic revenue growth of 5%.

• Due to the factors set forth above, net income increased $14 million, or 1%, to $1.1 billion compared to the prior year period.

• Diluted earnings per share was $5.35 compared to $5.07 per share for the prior year period.

• Cash flows provided by operating activities was $309 million for the first three months of 2024, a decrease of $134 million from the prior year period, primarily due to higher receivables, payments related to E&O, restructuring, higher cash taxes and transaction and integration costs, partially offset by strong operating income growth.

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

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

• Adjusted operating margin, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 39.7% for the first quarter of 2024 compared to 38.7% in the prior year period. The increase in adjusted operating income reflects organic revenue growth, increased fiduciary investment income, and $20 million of restructuring savings realized in the quarter, partially offset by increased expenses and investments in long-term growth.

• Adjusted diluted earnings per share, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Diluted Earnings per Share,” was $5.66 per share for the first quarter of 2024, compared to $5.17 per share for the respective prior year period.

• Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” decreased in the first three months of 2024 by $106 million from the prior year period, to $261 million, reflecting a decrease in cash flows from operations, partially offset by a $28 million decrease in capital expenditures.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE

For many companies, the management of ESG risks and opportunities has become increasingly important, and ESG-related challenges, such as extreme weather events, supply chain disruptions, cyber events, regulatory changes, ongoing public health impacts, and the increased focus on workforce resilience in various work environments, continue to create volatility and uncertainty for our clients. At Aon, helping clients manage risk - including ESG risk - is at the core of what we do. We offer a wide range of risk assessment, consulting, and advisory solutions, many of which are significant parts of our core business

offerings, designed to address and manage ESG issues for clients, and to enable our clients to create more sustainable value. We see significant opportunity in enhancing our impact and delivering innovative client solutions on ESG matters.

ACQUISITION OF NFP

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

REVIEW OF CONSOLIDATED RESULTS

Summary of Results

Our consolidated results (unaudited) are as follows (in millions):

						Three Months Ended March 31,
						2024						2023
Revenue
Total revenue						$	4,070					$	3,871
Expenses
Compensation and benefits						1,883						1,792
Information technology						124						139
Premises						71						75
Depreciation of fixed assets						44						38
Amortization and impairment of intangible assets						16						25
Other general expense						348						329
Accelerating Aon United Program expenses						119						—
Total operating expenses						2,605						2,398
Operating income						1,465						1,473
Interest income						28						5
Interest expense						(144)						(111)
Other income (expense)						75						(25)
Income before income taxes						1,424						1,342
Income tax expense						331						263
Net income						1,093						1,079
Less: Net income attributable to noncontrolling interests						22						29
Net income attributable to Aon shareholders						$	1,071					$	1,050
Diluted net income per share attributable to Aon shareholders						$	5.35					$	5.07
Weighted average ordinary shares outstanding - diluted						200.1						207.1

Revenue

Total revenue increased $199 million, or 5%, to $4.1 billion, compared to the prior year period, with organic revenue growth of 5%, driven by ongoing strong retention, net new business generation, and management of the renewal book, a 1% favorable impact from fiduciary investment income and a 1% favorable impact from foreign currency translation partially offset by a 2% unfavorable impact from acquisitions, divestitures and other items.

Commercial Risk Solutions revenue increased $30 million, or 2%, to $1.8 billion in the first quarter of 2024, compared to the first quarter of 2023. Organic revenue growth was 3% in the first quarter of 2024, reflecting growth across most major geographies driven by strong retention, management of the renewal book, and net new business generation. Growth in retail brokerage was highlighted by solid growth in EMEA and Asia and the Pacific, driven by continued strength in core P&C. Results in the U.S. were pressured, reflecting lower net new business and the ongoing impacts from external capital markets activity. Results also reflect growth in Affinity globally across both consumer and benefits solutions. On average globally, exposures and pricing were positive, resulting in modestly positive market impact.

Reinsurance Solutions revenue increased $90 million, or 8%, to $1.2 billion in the first quarter of 2024, compared to $1.1 billion in the first quarter of 2023. Organic revenue growth was 7% in the first quarter of 2024, reflecting strong growth in treaty, driven by strong retention and new business generation, as well as double-digit growth in the Strategy and Technology Group. Market impact was modestly positive on results in the quarter. The majority of revenue in our treaty portfolio is recurring in nature and is recorded in connection with the major renewal periods that take place throughout the first half of the year, while the second half of the year is typically driven by facultative placements, capital markets activity and advisory work that is more transactional in nature.

Health Solutions revenue increased $62 million, or 9%, to $733 million in the first quarter of 2024, compared to $671 million in the first quarter of 2023. Organic revenue growth was 6% in the first quarter of 2024, reflecting strong growth globally in core health and benefits brokerage driven by new business generation and management of the renewal book. Strength in the core was highlighted by solid growth in all major geographies. Results also reflect strong growth in Consumer Benefit Solutions, partially offset by a decline in Talent driven by lower project-related revenue in advisory solutions.

Wealth Solutions revenue increased $20 million, or 6%, to $370 million in the first quarter of 2024, compared to $350 million in the first quarter of 2023. Organic revenue growth was 4% in the first quarter of 2024, reflecting strong growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes. Investments declined modestly as strong advisory demand in North America was more than offset by a decline in project-related work in the U.K.

Compensation and Benefits

Compensation and benefits expense increased $91 million, or 5%, compared to the prior year period due primarily to an increase in expense associated with 5% organic revenue growth, and an $18 million unfavorable impact from foreign currency translation, partially offset by savings from Accelerating Aon United restructuring actions.

Information Technology

Information technology expenses, which represent costs associated with supporting and maintaining our infrastructure, decreased $15 million, or 11%, compared to the prior year period due primarily to elevated technology costs and investments in the prior year period, noting that spend may vary between quarters given timing of projects and investments within the year.

Premises

Premises expenses, which represent the cost of occupying offices in various locations throughout the world, decreased $4 million, or 5%, in the first quarter of 2024 compared to the prior year period, reflecting a reduction to our real estate footprint.

Depreciation of Fixed Assets

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

Amortization and Impairment of Intangible Assets

Amortization and impairment of intangible assets primarily relates to finite-lived customer-related and contract-based assets as well as technology and other assets. Amortization and impairment of intangible assets decreased $9 million, or 36% in the first quarter of 2024 compared to the prior year period due primarily to ongoing portfolio management and a decrease associated with assets fully amortized in the prior year period.

Other General Expense

Other general expenses increased $19 million, or 6%, in the first quarter of 2024 compared to the prior year period primarily due to $15 million of transaction and integration costs associated with the acquisition of NFP.

Accelerating Aon United Program Expenses

Accelerating Aon United Program expenses were $119 million for the three months ended March 31, 2024, relating to workforce optimization, asset impairments, and technology and other costs.

Interest Income

Interest income represents income, net of expense, earned on operating cash balances and other income-producing investments. It does not include interest earned on funds held on behalf of clients. During the first quarter of 2024, interest income increased $23 million to $28 million compared to the prior year period primarily reflecting interest earned on the investment of $5 billion of term debt proceeds which were used to fund the purchase of NFP.

Interest Expense

Interest expense, which represents the cost of our debt obligations, increased $33 million to $144 million during the first quarter of 2024 compared to the prior year period, reflecting an overall increase in total debt, primarily due to the issuance of $5 billion of term debt to fund the purchase of NFP, and higher interest rates.

Other Income (Expense)

Other income (expense) for the first quarter of 2024 increased $100 million compared to the prior year period. Other income was $75 million for the first quarter of 2024, primarily related to deferred consideration from the 2017 sale of our outsourcing business. Other expense was $25 million for the first quarter of 2023 primarily reflecting the unfavorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies and non-cash net periodic pension cost.

Income before Income Taxes

Due to the factors discussed above, Income before income taxes for the first quarter of 2024 was $1.4 billion, a 6% increase from $1.3 billion in the first quarter of 2023.

Income Taxes

The effective tax rate on Net income was 23.2% for the three months ended March 31, 2024. The effective tax rate on Net income was 19.6% for the three months ended March 31, 2023.

For the three months ended March 31, 2024, the tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the favorable impact of share-based payments offset by the unfavorable impact of discrete items.

For the three months ended March 31, 2023, the tax rate was primarily driven by the geographical distribution of income and certain discrete items, primarily the favorable impact of share-based payments.

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

Net Income Attributable to Aon Shareholders

Net income attributable to Aon shareholders for the first quarter of 2024 increased to $1.1 billion, or $5.35 per diluted share, from $1.1 billion, or $5.07 per diluted share, in the prior year period.

Non-GAAP Metrics

In our discussion of consolidated results, we sometimes refer to certain non-GAAP supplemental information derived from consolidated financial information specifically related to organic revenue growth, adjusted operating margin, adjusted diluted earnings per share, adjusted net income attributable to Aon shareholders, adjusted net income per share, other income (expense), as adjusted, adjusted effective tax rate, free cash flow, and the impact of foreign exchange rate fluctuations on operating results. Management believes that these measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors. Management also uses these measures to assess operating performance and performance for compensation. This non-GAAP supplemental information should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements.

Organic Revenue Growth

We use supplemental information related to organic revenue growth to help us and our investors evaluate business growth from ongoing operations. Organic revenue growth is a non-GAAP measure that includes the impact of certain intercompany activity and excludes the impact of changes in foreign exchange rates, fiduciary investment income, acquisitions, divestitures (including held for sale disposal groups), transfers between revenue lines, and gains or losses on derivatives accounted for as hedges. This supplemental information related to organic revenue growth represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements. Industry peers provide similar supplemental information about their revenue performance, although they may not make identical adjustments. A reconciliation of this non-GAAP measure to the reported Total revenue is as follows (in millions, except percentages):

						Three Months Ended March 31,
						2024						2023						% Change						Less: Currency Impact (1)						Less: Fiduciary Investment Income (2)						Less: Acquisitions, Divestitures & Other Items						Organic Revenue Growth (3)
Revenue
Commercial Risk Solutions						$	1,808					$	1,778					2		%				1		%				1		%				(3)		%				3		%
Reinsurance Solutions						1,167						1,077						8						—						1						—						7
Health Solutions						733						671						9						1						—						2						6
Wealth Solutions						370						350						6						2						—						—						4
Eliminations						(8)						(5)						N/A						N/A						N/A						N/A						N/A
Total revenue						$	4,070					$	3,871					5		%				1		%				1		%				(2)		%				5		%

(1)Currency impact represents the effect on prior year period results if they were translated at current period foreign exchange rates.

(2)Fiduciary investment income for the three months ended March 31, 2024 and 2023, was $79 million and $52 million, respectively.

(3)Organic revenue growth includes the impact of certain intercompany activity and excludes the impact of changes in foreign exchange rates, fiduciary investment income, acquisitions, divestitures (including held for sale disposal groups), transfers between revenue lines, and gains or losses on derivatives accounted for as hedges.

Adjusted Operating Margin

We use adjusted operating margin as a non-GAAP measure of our core operating performance. Adjusted operating margin excludes the impact of certain items, as listed below, because management does not believe these expenses are the best indicators of our core operating performance. This supplemental information related to adjusted operating margin represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements.

A reconciliation of this non-GAAP measure to the reported operating margin is as follows (in millions, except percentages):

						Three Months Ended March 31,
						2024						2023
Revenue						$	4,070					$	3,871
Operating income - as reported						$	1,465					$	1,473
Amortization and impairment of intangible assets						16						25
Accelerating Aon United Program expenses (1)						119						—
Transaction and integration costs (2)						15						—
Operating income - as adjusted						$	1,615					$	1,498
Operating margin - as reported						36.0		%				38.1		%
Operating margin - as adjusted						39.7		%				38.7		%

(1)Total charges are expected to include technology-related costs to facilitate streamlining and simplifying operations, headcount reduction costs, and costs associated with asset impairments, including real estate consolidation and technology costs.

(2)In the fourth quarter of 2023, Aon entered into a definitive agreement to acquire NFP, which closed on April 25, 2024. As part of the acquisition, Aon incurred $11 million of transaction costs in the three months ended March 31, 2024 including advisory, legal, accounting, regulatory, and other professional or consulting fees required to complete the acquisition. The NFP acquisition also will result in certain non-recurring integration costs associated with colleague severance, termination of redundant third-party agreements, costs associated with legal entity rationalization, and professional or consulting fees related to alignment of management processes and controls, as well as costs associated with the assessment of NFP information technology environment and security protocols. Aon incurred $4 million of integration costs in the three months ended March 31, 2024.

Adjusted Diluted Earnings per Share

We use adjusted diluted earnings per share as a non-GAAP measure of our core operating performance. Adjusted diluted earnings per share excludes the impact of certain items, as listed below, because management does not believe these expenses are the best indicators of our core operating performance. This supplemental information related to adjusted diluted earnings per share represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements.

A reconciliation of this non-GAAP measure to reported diluted earnings per share is as follows (in millions, except per share data and percentages):

						Three Months Ended March 31, 2024
						U.S. GAAP						Adjustments						Non-GAAP Adjusted
Operating income						$	1,465					$	150					$	1,615
Interest income						28						—						28
Interest expense						(144)						—						(144)
Other income (expense) (1)						75						(82)						(7)
Income before income taxes						1,424						68						1,492
Income tax expense (2)						331						6						337
Net income						1,093						62						1,155
Less: Net income attributable to noncontrolling interests						22						—						22
Net income attributable to Aon shareholders						$	1,071					$	62					$	1,133
Diluted net income per share attributable to Aon shareholders						$	5.35					$	0.31					$	5.66
Weighted average ordinary shares outstanding - diluted						200.1						—						200.1
Effective tax rates (2)						23.2		%										22.6		%

						Three Months Ended March 31, 2023
						U.S. GAAP						Adjustments						Non-GAAP Adjusted
Operating income						$	1,473					$	25					$	1,498
Interest income						5						—						5
Interest expense						(111)						—						(111)
Other income (expense)						(25)						—						(25)
Income before income taxes						1,342						25						1,367
Income tax expense (2)						263						5						268
Net income						1,079						20						1,099
Less: Net income attributable to noncontrolling interests						29						—						29
Net income attributable to Aon shareholders						$	1,050					$	20					$	1,070
Diluted net income per share attributable to Aon shareholders						$	5.07					$	0.10					$	5.17
Weighted average ordinary shares outstanding - diluted						207.1						—						207.1
Effective tax rates (2)						19.6		%										19.6		%

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

(2)Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with the anticipated sale of certain assets and liabilities classified as held for sale, certain legal settlements, Program expenses, deferred consideration from a prior year sale of business, and certain transaction and integration costs related to the acquisition of NFP, which are adjusted at the related jurisdictional rate.

Free Cash Flow

We use free cash flow, defined as cash flow provided by operations less capital expenditures, as a non-GAAP measure of our core operating performance and cash-generating capabilities of our business operations. This supplemental information related to free cash flow represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements. Management believes the supplemental information related to free cash flow is helpful to investors when evaluating our operating performance and liquidity results. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures. A reconciliation of this non-GAAP measure to the reported Cash provided by operating activities is as follows (in millions):

						Three Months Ended March 31,
						2024						2023
Cash provided by operating activities						$	309					$	443
Capital expenditures						(48)						(76)
Free cash flow						$	261					$	367

Impact of Foreign Exchange Rate Fluctuations

Because we conduct business in over 120 countries and sovereignties, foreign exchange rate fluctuations may have a significant impact on our business. Foreign exchange rate movements may be significant and may distort true period-to-period comparisons of changes in revenue or pretax income. Therefore, to give financial statement users meaningful information about our operations, we have provided an illustration of the impact of foreign currency exchange rates on our financial results. The methodology used to calculate this impact isolates the impact of the change in currencies between periods by translating the prior year quarter’s revenue, expenses, and net income using the current quarter’s foreign exchange rates.

Currency fluctuations had a favorable impact of $0.02 on net income per diluted share during the three months ended March 31, 2024 if prior year period results were translated at current period foreign exchange rates. Currency fluctuations had an unfavorable impact of $0.14 on net income per diluted share during the three months ended March 31, 2023 if 2022 results were translated at 2023 rates.

Currency fluctuations had a favorable impact of $0.02 on adjusted diluted earnings per share during the three months ended March 31, 2024 if prior year period results were translated at current period foreign exchange rates. Currency fluctuations had an unfavorable impact of $0.14 on adjusted diluted earnings per share during the three months ended March 31, 2023 if 2022 results were translated at 2023 rates. These translations are performed for comparative and illustrative purposes only and do not impact the accounting policies or practices for amounts included in our Condensed Consolidated Financial Statements.

LIQUIDITY AND FINANCIAL CONDITION

Liquidity

Executive Summary

We believe that our balance sheet and strong cash flow provide us with adequate liquidity. Our primary sources of liquidity in the near-term include cash flows provided by operations and available cash reserves; primary sources of liquidity in the long-term include cash flows provided by operations, debt capacity available under our credit facilities, and capital markets. Our primary uses of liquidity are operating expenses and investments, capital expenditures, acquisitions, share repurchases, pension obligations, shareholder dividends, and Accelerating Aon United Program cash charges. We believe that cash flows from operations, available credit facilities, available cash reserves, and the capital markets will be sufficient to meet our liquidity needs, including principal and interest payments on debt obligations, capital expenditures, pension contributions, and anticipated working capital requirements in the next twelve months and over the long-term.

Cash on our balance sheet includes funds available for general corporate purposes, as well as amounts restricted as to their use. Funds held on behalf of clients in a fiduciary capacity are segregated and shown together with uncollected insurance premiums in Fiduciary assets in our Condensed Consolidated Statements of Financial Position, with a corresponding amount in Fiduciary liabilities.

In our capacity as an insurance broker or agent, we collect premiums from insureds and, after deducting our commission, remit the premiums to the respective insurance underwriters. We also collect claims or refunds from underwriters on behalf of insureds, which are then returned to the insureds. Unremitted insurance premiums and claims are held by us in a fiduciary capacity. The levels of funds held on behalf of clients and liabilities can fluctuate significantly depending on when we collect the premiums, claims, and refunds, make payments to underwriters and insureds, and collect funds from clients and make payments on their behalf, and upon the impact of foreign currency movements. Funds held on behalf of clients, because of their

nature, are generally invested in highly liquid securities with highly rated, credit-worthy financial institutions. Fiduciary assets include funds held on behalf of clients comprised of cash and cash equivalents of $7.1 billion and $6.9 billion at March 31, 2024 and December 31, 2023, respectively, and fiduciary receivables of $10.0 billion and $9.4 billion at March 31, 2024 and December 31, 2023, respectively. While we earn investment income on the funds held in cash and money market funds, the funds cannot be used for general corporate purposes.

We maintain multicurrency cash pools with third-party banks in which various Aon entities participate. Individual Aon entities are permitted to overdraw on their individual accounts provided the overall global balance does not fall below zero. At March 31, 2024, cash balances of one or more non-U.S. entities may have been negative; however, the overall balance was positive.

The following table summarizes our Cash and cash equivalents, Short-term investments, and Fiduciary assets as of March 31, 2024 (in millions):

			Statement of Financial Position Classification
Asset Type			Cash and Cash Equivalents						Short-term Investments						Fiduciary Assets						Total
Certificates of deposit, bank deposits, or time deposits			$	995					$	—					$	4,294					$	5,289
Money market funds			—						5,413						2,823						8,236
Cash, Short-term investments, and funds held on behalf of clients			995						5,413						7,117						13,525
Fiduciary receivables			—						—						10,044						10,044
Total			$	995					$	5,413					$	17,161					$	23,569

Cash and cash equivalents and funds held on behalf of clients, including $73 million of cash and cash equivalents and funds held on behalf of clients classified as held for sale, increased $463 million in 2024. A summary of our cash flows provided by and used for operating, investing, and financing activities is as follows (in millions):

						Three Months Ended March 31,
						2024						2023
Cash provided by operating activities						$	309					$	443
Cash provided by (used for) investing activities						$	(4,961)					$	205
Cash provided by financing activities						$	5,261					$	404
Effect of exchange rates on cash and cash equivalents and funds held on behalf of clients						$	(146)					$	58
Net increase in cash and cash equivalents and funds held on behalf of clients						$	463					$	1,110

Operating Activities

Net cash provided by operating activities during the three months ended March 31, 2024 decreased $134 million from the prior year period to $309 million. This amount represents Net income reported, generally adjusted for gains from sales of businesses, losses from sales of businesses, share-based compensation expense, depreciation expense, amortization and impairments, and other non-cash income and expenses, including pension settlement charges. Adjustments also include changes in working capital, that relate primarily to the timing of payments of accounts payable and accrued liabilities, collection of receivables, and payments for Accelerating Aon United Program expenses.

Pension Contributions

Pension contributions were $17 million for the three months ended March 31, 2024, as compared to $23 million for the three months ended March 31, 2023. For the remainder of 2024, we expect to contribute approximately $51 million in cash to our pension plans, including contributions to non-U.S. pension plans, which are subject to changes in foreign exchange rates.

Accelerating Aon United Program Expenses

In the third quarter of 2023, we initiated the Program with the purpose of streamlining our technology infrastructure, optimizing our leadership structure and resource alignment, and reducing the real estate footprint to align to our hybrid working strategy. The Program will include technology-related costs to facilitate streamlining and simplifying operations, headcount reduction costs, and costs associated with asset impairments, including real estate consolidation and technology costs.

Program charges are recognized within Accelerating Aon United Program expenses on the accompanying Condensed Consolidated Statements of Income and consists of the following cost activities:

*•*Technology and other – includes costs associated with actions taken to rationalize certain applications and to optimize technology across the Company. These costs may include contract termination fees and other non-capitalizable costs associated with Program initiatives, which include professional service fees.

*•*Workforce optimization – includes costs associated with headcount reduction and other separation-related costs.

• Asset impairments – includes costs associated with impairment of assets, as they are identified, including ROU lease assets, leasehold improvements, and other capitalized assets no longer providing economic benefit.

The changes in the Company’s liabilities for the Program as of March 31, 2024 are as follows (in millions):

			Technology and other						Workforce optimization						Asset impairments						Total
Liability Balance as of January 1, 2024			$	14					$	86					$	—					$	100
Charges			19						64						36						119
Cash payments			(12)						(25)						—						(37)
Foreign currency translation and other			—						(1)						—						(1)
Non-cash charges			(7)						(5)						(36)						(48)
Liability balance as of March 31, 2024			$	14					$	119					$	—					$	133
Total costs incurred from inception to date			$	33					$	167					$	54					$	254

The Program is currently expected to result in cumulative costs of approximately $1.0 billion, consisting of approximately $900 million of cash charges and approximately $100 million of non-cash charges. The Program is estimated to generate annualized expense savings of approximately $350 million by the end of 2026, largely benefiting Compensation and benefits, Information technology, and Premises on the Condensed Consolidated Statements of Income. For the three months ended March 31, 2024, total Program costs incurred were $119 million. The Company expects to continue to review the implementation of elements of the Program throughout the course of the Program and, therefore, there may be changes to expected timing, estimates of expected costs and related savings. We estimate that expense savings resulting from Program actions taken in 2023 will begin to be realized in 2024, including $20 million of savings realized in the first three months of 2024 within Compensation and benefits on the Condensed Consolidated Statements of Income.

Investing Activities

Cash flow used for investing activities was $4,961 million during the three months ended March 31, 2024, a decrease of $5,166 million compared to $205 million of Cash flow provided by investing activities in the prior year period. Generally, the primary drivers of cash flows used for investing activities are acquisition of businesses, purchases of short-term investments, capital expenditures, and payments for investments. Generally, the primary drivers of cash flows provided by investing activities are sales of businesses, sales of short-term investments, and proceeds from investments. The gains and losses corresponding to cash flows provided by proceeds from investments and used for payments for investments are primarily recognized in Other income (expense) in our Condensed Consolidated Statements of Income.

Short-term Investments

As of March 31, 2024, short-term investments increased $5.0 billion to $5.4 billion compared to December 31, 2023. The majority of our investments carried at fair value are money market funds. These money market funds are held throughout the world with various financial institutions. We are not aware of any market liquidity issues that would materially impact the fair value of these investments.

Acquisitions and Dispositions of Businesses

During the first three months of 2024, we completed no acquisitions. Cash consideration, net of cash and funds held on behalf of clients acquired, was $4 million, which relates to acquisitions completed in 2023. During the first three months of 2023, we completed no acquisitions. Cash consideration, net of cash and funds held on behalf of clients acquired, was $2 million, which relates to an acquisition completed in 2022.

During the first three months of 2024, we completed one disposition, which had an insignificant cash flow impact, however, we received $75 million of cash related to the deferred consideration earned in the first three months of 2024 for the 2017 sale of the benefits administration and business process outsourcing business. During the first three months of 2023, no businesses were sold, however, there was a $1 million impact, net of cash and funds held on behalf of clients, to the Condensed Consolidated Statements of Cash Flows related to dispositions completed in 2022.

Capital Expenditures

Our additions to fixed assets, including capitalized software, amounted to $48 million and $76 million for the three months ended March 31, 2024 and 2023, respectively, which primarily relate to the refurbishing and modernizing of office facilities, software development costs, and computer equipment purchases. In the current period, we continue to support certain technology projects to drive long-term growth and real estate projects to align with our Smart Working strategy.

Financing Activities

Cash flow provided by financing activities during the three months ended March 31, 2024 was $5.3 billion, an increase of $4,857 million compared to $404 million of Cash flow provided by financing activities in the prior year period. Generally, the primary drivers of cash flow used for financing activities are repayments of debt, share repurchases, cash paid for employee taxes on withholding shares, dividends paid to shareholders, transactions with noncontrolling interests, and other financing activities, such as collection of or payments for deferred consideration in connection with prior year business acquisitions and divestitures. Generally, the primary drivers of cash flow provided by financing activities are issuances of debt, changes in net fiduciary liabilities, and proceeds from issuance of shares.

We have a share repurchase program authorized by our 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.

The following table summarizes our share repurchase activity (in millions, except per share data):

			Three Months Ended March 31,
			2024						2023
Shares repurchased			0.8						1.8
Average price per share			$	310.56					$	305.31
Repurchase costs recorded to accumulated deficit			$	250					$	550

At March 31, 2024, the remaining authorized amount for share repurchase under the Repurchase Program was approximately $3.1 billion. Under the Repurchase Program, the Company has repurchased a total of 169.9 million shares for an aggregate cost of approximately $24.4 billion. For further information regarding the Repurchase Program, see Part II, Item 2 of this report.

Borrowings

Total debt at March 31, 2024 was $16.5 billion, an increase of $5.3 billion compared to December 31, 2023. Further, commercial paper activity during the three months ended March 31, 2024 and 2023 is as follows (in millions):

						Three Months Ended March 31,
						2024						2023
Total issuances (1)						$	948					$	870
Total repayments						(1,539)						(1,043)
Net repayments						$	(591)					$	(173)

(1)The proceeds of the commercial paper issuances are generally used for short-term working capital needs.

On March 1, 2024, Aon North America, Inc. issued $600 million 5.125% Senior Notes due in March 2027, $1 billion 5.150% Senior Notes due in March 2029, $650 million 5.300% Senior Notes due in March 2031, $1.75 billion 5.450% Senior Notes due in March 2034, and $2 billion 5.750% Senior Notes due in March 2054, totaling to an aggregate amount of $6 billion. The Company intends to use the net proceeds from the offering for general corporate purposes, including a portion of which that was used, together with the proceeds of the delayed draw term loan available under the credit agreement entered into on February 16, 2024 described below, to pay a portion of the cash consideration in connection with the acquisition of NFP, to repay certain debt of NFP and to pay related fees and expenses.

On February 16, 2024, Aon North America, Inc. entered into a credit agreement in which lenders committed to provide a $2 billion delayed draw term loan, which was subsequently drawn on April 25, 2024. The Company intends to use proceeds, together with the proceeds of the notes issued on March 1, 2024 described above, to pay a portion of the cash consideration in connection with the NFP acquisition, to repay certain debt of NFP and to pay related fees and expenses.

In November 2023, Aon Global Limited’s $350 million 4.00% Senior Notes matured and were repaid in full.

In June 2023, Aon Global Limited’s $600 million 3.50% Senior Notes due June 2024 were classified as Short-term debt and current portion of long-term debt in the Condensed Consolidated Statement of Financial Position as the date of maturity is in less than one year.

On February 28, 2023, Aon Corporation and Aon Global Holdings plc co-issued $750 million 5.35% Senior Notes due in February 2033. The Company intends to use the net proceeds from the offering for general corporate purposes.

Other Liquidity Matters

Distributable Profits

We are 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 March 31, 2024 and December 31, 2023, we had distributable profits in excess of $27.1 billion and $27.5 billion, respectively. We believe that we will have sufficient distributable profits for the foreseeable future.

Revolving Credit Facilities

We expect cash generated by operations for 2024 to be sufficient to service our debt and contractual obligations, finance capital expenditures, and continue to pay dividends to our shareholders. Although cash from operations is expected to be sufficient to service these activities, we have the ability to access the commercial paper markets or borrow under our credit facilities to accommodate any timing differences in cash flows. Additionally, under current market conditions, we believe that we could access capital markets to obtain debt financing for longer-term funding, if needed.

As of March 31, 2024, Aon had two primary committed credit facilities outstanding: its $1.0 billion multi-currency U.S. credit facility expiring in September 2027 and its $1.0 billion multi-currency U.S. credit facility expiring in October 2028. In aggregate, these two facilities provide $2.0 billion in available credit.

Each of these primary committed credit facilities and the delayed draw term loan includes customary representations, warranties, and covenants, including financial covenants that require us to maintain specified ratios of adjusted consolidated EBITDA to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. Aon did not have borrowings under either of these primary committed credit facilities nor the delayed draw term loan as of March 31, 2024 and December 31, 2023, respectively. Additionally, Aon was in compliance with the financial covenants and all other covenants contained therein during the rolling 12 months ended March 31, 2024.

Subsequent Events

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

On April 2, 2024, Aon plc announced that its wholly owned subsidiary, Randolph Acquisition Corp., commenced cash tender offers for any and all of the outstanding 6.875% Senior Notes due 2028, 4.875% Senior Secured Notes due 2028, 7.500% Senior Secured Notes due 2030 and 8.500% Senior Secured Notes due 2031, each issued by NFP Corp. (together, the “NFP Notes”), upon the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement, dated as of April 2, 2024. On April 26, 2024, the Offeror purchased those NFP Notes that were validly tendered and not validly withdrawn prior to April 15, 2024, effecting the early settlement of the Offers (the “Early Settlement”). In addition, on April 16, 2024, NFP Corp. delivered notices of redemption of all NFP Notes not validly tendered pursuant to the Offers and purchased at the Early Settlement, at a purchase price equal to the price paid to holders of the NFP Notes in connection with the Early Settlement, with a redemption date of April 26, 2024. As a result of the Early Settlement of the Offers and the related redemption which occurred on April 26, 2024, no NFP Notes remain outstanding.

On April 20, 2024, Aon signed a definitive agreement to sell Healthy Paws, its U.S.-based managing general agent specializing in pet insurance, to Chubb Limited. Assets and liabilities associated with this disposal group were classified as held for sale as of March 31, 2024. The disposition is expected to be completed in the second quarter of 2024.

Shelf Registration Statement

On June 22, 2023, we filed a shelf registration statement with the SEC, registering the offer and sale from time to time of an indeterminate amount of, among other securities, debt securities, preference shares, class A ordinary shares and convertible securities. Our ability to access the market as a source of liquidity is dependent on investor demand, market conditions, and other factors.

Rating Agency Ratings

The major rating agencies’ ratings of our debt at April 26, 2024 appear in the table below.

			Ratings
			Senior Long-term Debt						Commercial Paper						Outlook
Standard & Poor’s			A-						A-2						Negative
Moody’s Investor Services			Baa2						P-2						Stable
Fitch, Inc.			BBB+						F-2						Negative

Letters of Credit and Other Guarantees

We have entered into a number of arrangements whereby our performance on certain obligations is guaranteed by a third party through the issuance of a letter of credit. We had total LOCs outstanding of approximately $139 million at March 31, 2024, compared to $86 million at December 31, 2023. These LOCs cover the beneficiaries related to certain of our U.S. and Canadian secure non-qualified pension plan schemes, reinsurance obligations related to our own E&O liability insurance program, and secure deductible retentions for our own workers’ compensation program. We also have obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at our international subsidiaries.

We have 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 $110 million at March 31, 2024, compared to $194 million at December 31, 2023.

Guarantee of Registered Securities

Newly issued and outstanding debt securities by Aon Corporation are guaranteed by Aon Global Limited, Aon plc, Aon North America, Inc., and Aon Global Holdings plc, and include the following (collectively, the “Aon Corporation Notes”):

Aon Corporation Notes
8.205% Junior Subordinated Notes due January 2027
4.50% Senior Notes due December 2028
3.75% Senior Notes due May 2029
2.80% Senior Notes due May 2030
6.25% Senior Notes due September 2040

All guarantees of Aon plc, Aon Global Limited, Aon North America, Inc., and Aon Global Holdings plc of the Aon Corporation 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 Aon Corporation. There are no subsidiaries other than those listed above that guarantee the Aon Corporation Notes.

Newly issued and outstanding debt securities by Aon Global Limited are guaranteed by Aon plc, Aon Global Holdings plc, Aon North America, Inc., and Aon Corporation, and include the following (collectively, the “Aon Global Limited Notes”):

Aon Global Limited Notes
3.50% Senior Notes due June 2024
3.875% Senior Notes due December 2025
2.875% Senior Notes due May 2026
4.25% Senior Notes due December 2042
4.45% Senior Notes due May 2043
4.60% Senior Notes due June 2044
4.75% Senior Notes due May 2045

All guarantees of Aon plc, Aon Global Holdings plc, Aon North America, Inc., and Aon Corporation of the Aon Global Limited 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 Aon Global Limited. There are no subsidiaries other than those listed above that guarantee the Aon Global Limited Notes.

Newly issued and outstanding debt securities by Aon North America, Inc. are guaranteed by Aon Global Limited, Aon plc, Aon Global Holdings plc, and Aon Corporation, and include the following (collectively, the “Aon North America, Inc. Notes”):

Aon North America, Inc. Notes
5.125% Senior Notes due March 2027
5.150% Senior Notes due March 2029
5.300% Senior Notes due March 2031
5.450% Senior Notes due March 2034
5.750% Senior Notes due March 2054

All guarantees of Aon Global Limited, Aon plc, Aon Global Holdings plc, and Aon Corporation of the Aon North America, Inc. 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 Aon North America, Inc. There are no subsidiaries other than those listed above that guarantee the Aon North America, Inc. Notes.

Newly co-issued and outstanding debt securities by Aon Corporation and Aon Global Holdings plc (together, the “Co-Issuers”) are guaranteed by Aon plc, Aon North America, Inc., and Aon Global Limited and include the following (collectively, the “Co-Issued Notes”):

Co-Issued Notes - Aon Corporation and Aon Global Holdings plc
2.85% Senior Notes due May 2027
2.05% Senior Notes due August 2031
2.60% Senior Notes due December 2031
5.00% Senior Notes due September 2032
5.35% Senior Notes due February 2033
2.90% Senior Notes due August 2051
3.90% Senior Notes due February 2052

All guarantees of Aon plc, Aon Global Limited, and Aon North America, Inc. 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. There are no subsidiaries other than those listed above that guarantee the Co-Issued Notes.

Aon Corporation, Aon North America, Inc., Aon Global Limited, and Aon Global Holdings plc are indirect wholly owned subsidiaries of Aon plc. Aon plc, Aon Global Limited, Aon Global Holdings plc, Aon North America, Inc., and Aon Corporation together comprise the revised “Obligor group”. The following tables set forth summarized financial information for the revised Obligor group, which reflects the financial results of Aon North America, Inc. for the year ended December 31, 2023 and for the period ended March 31, 2024.

Adjustments are made to the tables to eliminate intercompany balances and transactions between the revised Obligor group. Intercompany balances and transactions between the revised Obligor group and non-guarantor subsidiaries are presented as separate line items within the summarized financial information. These balances are presented on a net presentation basis, rather than a gross basis, as this better reflects the nature of the intercompany positions and presents the funding or funded position that is to be received or owed. No balances or transactions of non-guarantor subsidiaries are presented in the summarized financial information, including investments of the revised Obligor group in non-guarantor subsidiaries.

			Obligor Group
			Summarized Statement of Income Information
						Three Months Ended
(millions)						March 31, 2024
Revenue						$	—
Operating loss						$	(30)
Expense from non-guarantor subsidiaries before income taxes						$	(37)
Net loss						$	(160)
Net loss attributable to Aon shareholders						$	(160)

			Obligor Group
			Summarized Statement of Financial Position Information
						As of			As of
(millions)						March 31, 2024			December 31, 2023
Receivables due from non-guarantor subsidiaries						$	3,482		$	1,431
Other current assets						5,309			230
Total current assets						$	8,791		$	1,661
Non-current receivables due from non-guarantor subsidiaries						$	10,867		$	10,873
Other non-current assets						1,293			1,228
Total non-current assets						$	12,160		$	12,101
Payables to non-guarantor subsidiaries						$	5,660		$	3,750
Other current liabilities						4,848			4,987
Total current liabilities						$	10,508		$	8,737
Non-current payables to non-guarantor subsidiaries						$	10,912		$	10,933
Other non-current liabilities						17,345			11,447
Total non-current liabilities						$	28,257		$	22,380

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no changes in our critical accounting policies, which include revenue recognition, pensions, goodwill and other intangible assets, contingencies, share-based payments, income taxes, and Accelerating Aon United restructuring charges as discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.

NEW ACCOUNTING PRONOUNCEMENTS

Note 2 “Accounting Principles and Practices” to our Financial Statements contained in Part I, Item 1 of this report contains a discussion of recently announced Securities and Exchange Commission final rules and their impact or future potential impact on our financial results, if determinable.