First Quarter Key Metrics
- Total revenue increased 4% to $3.7
billion, including organic revenue growth of 8%
- Operating margin increased 190 basis points to 37.2%, and
operating margin, adjusted for certain items, increased 60 basis
points to 38.0%
- EPS increased 18% to $4.73, and
EPS, adjusted for certain items, increased 13% to $4.83
- For the first three months of 2022, cash flows from operations
decreased 17% to $463 million, and
free cash flow decreased 17% to $440
million
First Quarter Highlights
- Repurchased 2.8 million class A ordinary shares for
approximately $0.8 billion
- Announced $7.5 billion increase
in share repurchase authorization and 10% increase to quarterly
cash dividend
- Announced the acquisition of actuarial software platform Tyche,
expanding Aon's existing capital modeling capabilities to help
re/insurer clients rethink access to capital and make better
business decisions
- Named to Fast Company's annual list of the World's Most
Innovative Companies, based on Aon's approach to valuing intangible
assets in Intellectual Property Solutions
DUBLIN, April 29,
2022 /PRNewswire/ -- Aon plc (NYSE: AON) today
reported results for the three months ended March 31,
2022.
Net income attributable to Aon shareholders increased 12%
to $1,023 million, or $4.73 per share on a diluted basis, compared to
$913 million, or $4.00 per share, in the prior year period. Net
income per share attributable to Aon shareholders, adjusted for
certain items, increased 13% to $4.83
on a diluted basis, including an unfavorable impact of $0.19 per share if prior year period results were
translated at current period foreign exchange rates ("foreign
currency translation"), compared to $4.28 in the prior year period. Certain items
that impacted first quarter results and comparisons with the prior
year period are detailed in the "Reconciliation of Non-GAAP
Measures - Operating Income and Diluted Earnings Per Share" on page
10 of this press release.
"In the first quarter, our team delivered strong financial
results with 8% organic revenue growth, operating margin expansion
of 60 basis points to 38.0%, and EPS growth of 13%," said
Greg Case, Chief Executive Officer.
"Our performance demonstrates how increasing global volatility has
further reinforced the relevance of our Aon United strategy. In the
face of rising complexity and uncertainty, our colleagues will
continue to employ the advanced analytics and underlying technology
of our Aon Business Services platform to identify areas of unmet
need, improve service standards, and accelerate delivery of new
solutions that provide clients the clarity and confidence they need
to protect and grow their business."
FIRST QUARTER 2022 FINANCIAL SUMMARY
Total revenue in the first quarter increased 4% to
$3.7 billion compared to the prior
year period driven by 8% organic revenue growth, partially offset
by a 3% unfavorable impact from foreign currency translation and a
1% unfavorable impact from acquisitions, divestitures, and
other.
Total operating expenses in the first quarter increased
1% to $2.3 billion compared to the
prior year period due primarily to an increase in expense
associated with 8% organic revenue growth and investments in
long-term growth, partially offset by a $43
million favorable impact from foreign currency translation
and a $35 million decrease in
transaction costs.
Foreign currency translation in the first quarter had a
$41 million, or $0.19 per share, unfavorable impact on U.S. GAAP
net income and a $42 million, or
$0.19 per share, unfavorable impact
on adjusted net income. If currency were to remain stable at
today's rates, the Company would expect an unfavorable impact of
approximately $0.08 per share, or an
approximately $24 million decrease in
operating income, in the second quarter of 2022.
Effective tax rate used in the Company's U.S. GAAP
financial statements in the first quarter was 19.6%, compared to
20.1% in the prior year period. After adjusting to exclude the
applicable tax impact associated with certain non-GAAP adjustments,
the adjusted effective tax rate was 19.7% in both periods. The
current period and the prior year period include a net favorable
impact from certain discrete items.
Weighted average diluted shares outstanding decreased to
216.4 million in the first quarter compared to 228.1 million in the
prior year period. The Company repurchased 2.8 million Class A
Ordinary Shares for approximately $0.8
billion in the first quarter. As of March 31, 2022, the
Company had approximately $8.4 billion of remaining authorization
under its share repurchase program.
YEAR TO DATE 2022 CASH FLOW SUMMARY
Cash flows provided by operations for the first three
months of 2022 decreased $98 million,
or 17%, to $463 million compared to
the prior year period, primarily due to higher incentive
compensation payments following strong performance in 2021,
partially offset by strong operating income growth.
Free cash flow, defined as cash flows from operations
less capital expenditures, decreased 17%, to $440 million for the first three months of 2022
compared to the prior year period, reflecting a decrease in cash
flows from operations, partially offset by a $6 million decrease in capital expenditures.
FIRST QUARTER 2022 REVENUE REVIEW
The first quarter revenue reviews provided below include
supplemental information related to organic revenue growth, which
is a non-GAAP measure that is described in detail in
"Reconciliation of Non-GAAP Measures - Organic Revenue Growth and
Free Cash Flow" on page 9 of this press release.
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
|
|
(millions)
|
|
2022
|
|
2021
|
|
%
Change
|
|
Less:
Currency
Impact
|
|
Less:
Fiduciary
Investment
Income
|
|
Less:
Acquisitions,
Divestitures
& Other
|
|
Organic
Revenue
Growth
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Risk Solutions
|
|
$
1,719
|
|
$
1,640
|
|
5%
|
|
(3)%
|
|
—%
|
|
(1)%
|
|
9%
|
Reinsurance Solutions
|
|
976
|
|
922
|
|
6
|
|
(2)
|
|
—
|
|
1
|
|
7
|
Health Solutions
|
|
638
|
|
615
|
|
4
|
|
(3)
|
|
—
|
|
(1)
|
|
8
|
Wealth Solutions
|
|
345
|
|
355
|
|
(3)
|
|
(2)
|
|
—
|
|
(1)
|
|
—
|
Eliminations
|
|
(8)
|
|
(7)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
Total
revenue
|
|
$
3,670
|
|
$
3,525
|
|
4%
|
|
(3)%
|
|
—%
|
|
(1)%
|
|
8%
|
Total revenue increased $145
million, or 4%, to $3,670
million compared to the prior year period, including organic
revenue growth of 8%, driven by ongoing strong retention and net
new business generation.
Commercial Risk Solutions organic revenue growth of 9%
reflects growth across every major geography, driven by strong
retention, new business generation, and management of the renewal
book portfolio. Strength in retail brokerage was highlighted by
double-digit growth in the U.S., Canada, Asia,
and the Pacific, driven by continued strength in core P&C, as
well as strong growth in construction and project-related work.
Results also reflect solid growth globally in the affinity business
across both consumer and business solutions, including growth in
the travel and events practice. On average globally, exposures and
pricing were modestly positive, resulting in a modestly positive
market impact.
Reinsurance Solutions organic revenue growth of 7%
reflects strong growth in treaty, driven by strong retention and
continued net new business generation, as well as strong growth in
facultative placements and double-digit growth in capital markets
transactions. Market impact was modestly positive on results in the
quarter.
Health Solutions organic revenue growth of 8% reflects
strong growth globally in core health and benefits brokerage,
driven by strong retention and management of the renewal book
portfolio. Strength in health and benefits brokerage included solid
growth in project-related work, driven by advisory work related to
wellbeing and resilience. Results also reflect double-digit growth
in Consumer Benefit Solutions and double-digit growth in Human
Capital, driven by rewards and advisory solutions.
Wealth Solutions organic revenue growth was flat overall.
Growth in Retirement was flat, driven by modest growth in the core
portion of the business, partially offset by a modest decline in
project-related work. Investments grew modestly driven by new
business generation and project-related work.
FIRST QUARTER 2022 EXPENSE REVIEW
|
|
Three Months Ended March 31,
|
|
|
|
|
(millions)
|
|
2022
|
|
2021
|
|
$ Change
|
|
% Change
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
$
1,767
|
|
$
1,719
|
|
$
48
|
|
3%
|
Information technology
|
|
123
|
|
114
|
|
9
|
|
8
|
Premises
|
|
72
|
|
77
|
|
(5)
|
|
(6)
|
Depreciation of fixed assets
|
|
38
|
|
41
|
|
(3)
|
|
(7)
|
Amortization and impairment of intangible assets
|
|
28
|
|
40
|
|
(12)
|
|
(30)
|
Other general expense
|
|
275
|
|
289
|
|
(14)
|
|
(5)
|
Total operating
expenses
|
|
$
2,303
|
|
$
2,280
|
|
$
23
|
|
1%
|
Compensation and benefits expense increased $48 million, or 3%, compared to the prior year
period due primarily to an increase in expense associated with 8%
organic revenue growth, partially offset by a $37 million favorable impact from foreign
currency translation.
Information technology expense increased $9 million, or 8%, compared to the prior year
period due primarily to an increase in expense associated with 8%
organic revenue growth, partially offset by a $2 million favorable impact from foreign currency
translation.
Premises expense decreased $5
million, or 6%, compared to the prior year period due
primarily to a reduction in rent expense associated with our Smart
Working strategy, which gives colleagues flexibility in where they
work.
Depreciation of fixed assets decreased $3 million, or 7%, compared to the prior year
period.
Amortization and impairment of intangible assets
decreased $12 million, or 30%,
compared to the prior year period.
Other general expenses decreased $14 million, or 5%, compared to the prior year
period due primarily to a $35 million
decrease in transaction costs, partially offset by an increase in
expense associated with 8% organic revenue growth and an increase
in travel and entertainment expense.
FIRST QUARTER 2022 INCOME SUMMARY
Certain noteworthy items impacted adjusted operating income and
adjusted operating margins in the first quarters of 2022 and 2021,
which are also described in detail in "Reconciliation of Non-GAAP
Measures - Operating Income and Diluted Earnings Per Share" on page
10 of this press release.
|
|
Three Months Ended March 31,
|
|
|
(millions)
|
|
2022
|
|
2021
|
|
% Change
|
Revenue
|
|
$ 3,670
|
|
$ 3,525
|
|
4%
|
Expenses
|
|
2,303
|
|
2,280
|
|
1
|
Operating income
|
|
$ 1,367
|
|
$ 1,245
|
|
10%
|
Operating margin
|
|
37.2%
|
|
35.3%
|
|
|
Operating income - as adjusted
|
|
$ 1,395
|
|
$ 1,320
|
|
6%
|
Operating margin - as adjusted
|
|
38.0%
|
|
37.4%
|
|
|
Operating income increased 10% to $1,367 million and operating margin increased 190
basis points to 37.2% compared to the prior year period. Operating
income, adjusted for certain items increased $75 million, or 6%, and operating margin,
adjusted for certain items, increased 60 basis points to 38.0%,
each compared to the prior year period. These metrics primarily
reflect strong organic revenue growth, partially offset by expense
growth and investments in long-term growth.
Interest income was flat compared to the prior year
period. Interest expense increased $12 million to $91
million compared to the prior year period, reflecting higher
outstanding term debt. Other pension expense was
$3 million, compared to $6 million of income in the prior year period.
Other income was $28 million,
compared to $8 million of Other
expense in the prior year period, primarily reflecting a gain on
sale of a business in Wealth Solutions.
Conference Call, Presentation Slides and Webcast
Details
The Company will host a conference call on Friday,
April 29, 2022 at 7:30 a.m., central
time. Interested parties can listen to the conference call
via a live audio webcast and view the presentation slides at
www.aon.com.
About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better —
to protect and enrich the lives of people around the world. Our
colleagues provide our clients in over 120 countries with advice
and solutions that give them the clarity and confidence to make
better decisions to protect and grow their business.
Follow Aon on Twitter and LinkedIn. Stay up-to-date by visiting
the Aon Newsroom and sign up for News Alerts here.
Safe Harbor Statement
This communication contains certain statements related to future
results, or states Aon's intentions, beliefs and expectations or
predictions for the future which are forward-looking statements as
that term is defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from either historical or anticipated results
depending on a variety of factors. These forward-looking statements
include information about possible or assumed future results of
Aon's operations and the uncertainty surrounding the COVID-19
pandemic. All statements, other than statements of historical facts
that address activities, events or developments that Aon expects or
anticipates may occur in the future, including such things as its
outlook, future capital expenditures, growth in commissions and
fees, changes to the composition or level of its revenues, cash
flow and liquidity, expected tax rates, business strategies,
competitive strengths, goals, the benefits of new initiatives,
growth of its business and operations, plans, and references to
future successes, are forward-looking statements. Also, when Aon
uses the words such as "anticipate", "believe", "continue",
"could", "estimate", "expect", "forecast", "intend", "looking
forward", "may", "might", "plan", "potential" "probably",
"project", "should", "will", "would" or similar expressions, it is
making forward-looking statements.
The following factors, among others, could cause actual results
to differ from those set forth in or anticipated by the forward
looking statements: changes in the competitive environment or
damage to Aon's reputation; fluctuations in currency exchange,
interest, or inflation rates that could impact our financial
condition or results; changes in global equity and fixed income
markets that could affect the return on invested assets; changes in
the funded status of Aon's various defined benefit pension plans
and the impact of any increased pension funding resulting from
those changes; the level of Aon's debt and the terms thereof
reducing Aon's flexibility or increasing borrowing costs; rating
agency actions that could limit Aon's access to capital and our
competitive position; volatility in Aon's global tax rate due to
being subject to a variety of different factors, including U.S. tax
reform; changes in Aon's accounting estimates or assumptions on
Aon's financial statements; limits on Aon's subsidiaries' ability
to pay dividends or otherwise make payments to Aon; the impact of
of legal proceedings and other contingencies, including those
arising from acquisition or disposition transactions, errors and
omissions and other claims against Aon; the impact of, and
potential challenges in complying with, laws and regulations in the
jurisdictions in which Aon operates, particularly given the global
nature of Aon's operations and the possibility of differing or
conflicting laws and regulations, or the application or
interpretation thereof, across jurisdictions in which Aon does
business; the impact of any regulatory investigations brought in
Ireland, the U.K., the U.S. and
other countries; failure to protect intellectual property rights or
allegations that Aon infringes on the intellectual property rights
of others; general economic and political conditions in different
countries in which Aon does business around the world, including
the withdrawal of the U.K. from the European Union; the failure to
retain, attract and develop experienced and qualified personnel;
international risks associated with Aon's global operations,
including impacts from military conflicts or political instability,
such as the ongoing Russian war in Ukraine; the effects of natural or man-made
disasters, including the effects of the COVID-19 and other health
pandemics and the impacts of climate change; any system or network
disruption or breach resulting in operational interruption or
improper disclosure of confidential, personal, or proprietary data,
and resulting damage to our reputation; Aon's ability to develop,
implement, update and enhance new technology; the actions taken by
third parties that perform aspects of Aon's business operations and
client services; the extent to which Aon is exposed to certain
risks, including lawsuits, related to actions Aon may take in being
responsible for making decisions on behalf of clients in Aon's
investment consulting business or in other advisory services that
Aon currently provides, or may provide in the future; Aon's ability
to continue, and the costs and risks associated with, growing,
developing and integrating acquired business, and entering into new
lines of business or products; Aon's ability to secure regulatory
approval and complete transactions, and the costs and risks
associated with the failure to consummate proposed transactions;
changes in commercial property and casualty markets, commercial
premium rates or methods of compensation; Aon's ability to
implement initiatives intended to yield cost savings, and the
ability to achieve those cost savings; the effects of Irish law on
Aon's operating flexibility and the enforcement of judgments
against Aon; adverse effects on the market price of Aon's
securities and/or operating results.
Any or all of Aon's forward-looking statements may turn out to
be inaccurate, and there are no guarantees about Aon's performance.
The factors identified above are not exhaustive. Aon and its
subsidiaries operate in a dynamic business environment in which new
risks may emerge frequently. Accordingly, you should not place
undue reliance on forward-looking statements, which speak only as
of the dates on which they are made. In addition, results for prior
periods are not necessarily indicative of results that may be
expected for any future period, particularly in light of the
continuing effects of the COVID-19 pandemic. Further information
concerning Aon and its businesses, including factors that
potentially could materially affect Aon's financial results, is
contained in Aon's filings with the SEC. See Aon's Annual Report on Form 10-K for the
year ended December 31, 2021 for a
further discussion of these and other risks and uncertainties
applicable to Aon and its businesses. These factors may be revised
or supplemented in subsequent reports filed with the SEC. Aon is
not under, and expressly disclaims, any obligation to update or
alter any forward-looking statement that it may make from time to
time, whether as a result of new information, future events or
otherwise.
Explanation of Non-GAAP Measures
This communication includes supplemental information not
calculated in accordance with generally accepted accounting
principles in the United States
("U.S. GAAP"), including organic revenue growth, free cash flow,
adjusted operating income, adjusted operating margin, and adjusted
earnings per share that exclude the effects of intangible asset
amortization and impairment, capital expenditures, and certain
other noteworthy items that affected results for the comparable
periods. Organic revenue growth includes the impact of intercompany
activity and excludes foreign exchange rate changes, acquisitions,
divestitures, transfers between revenue lines, fiduciary investment
income, and gains or losses on derivatives accounted for as hedges.
Currency impact is determined by translating last year's revenue,
expense, or net income at this year's foreign exchange rates.
Reconciliations to the closest U.S. GAAP measure for each non-GAAP
measure presented in this communication are provided in the
attached appendices. Supplemental organic revenue growth
information and additional measures that exclude the effects of
certain items noted above do not affect net income or any other
U.S. GAAP reported amounts. Free cash flow is cash flows from
operating activity less capital expenditures. The adjusted
effective tax rate excludes the applicable tax impact associated
with expenses for estimated intangible asset amortization and
impairment, and certain other noteworthy items. Management believes
that these measures are important to make meaningful
period-to-period comparisons and that this supplemental information
is helpful to investors. Non-GAAP measures should be viewed in
addition to, not in lieu of, Aon's Condensed Consolidated Financial
Statements. Industry peers provide similar supplemental information
regarding their performance, although they may not make identical
adjustments.
Investor
Contact:
|
|
Media
Contact:
|
Leslie
Follmer
|
|
Nadine
Youssef
|
+1
312-381-3310
|
|
+1
312-381-3024
|
investor.relations@aon.com
|
|
mediainquiries@aon.com
|
Aon plc
Condensed Consolidated
Statements of Income (Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
(millions, except per
share data)
|
|
2022
|
|
2021
|
|
%
Change
|
Revenue
|
|
|
|
|
|
|
Total revenue
|
|
$
3,670
|
|
$
3,525
|
|
4%
|
Expenses
|
|
|
|
|
|
|
Compensation and benefits
|
|
1,767
|
|
1,719
|
|
3%
|
Information technology
|
|
123
|
|
114
|
|
8%
|
Premises
|
|
72
|
|
77
|
|
(6)%
|
Depreciation of fixed assets
|
|
38
|
|
41
|
|
(7)%
|
Amortization and impairment of intangible assets
|
|
28
|
|
40
|
|
(30)%
|
Other general expense
|
|
275
|
|
289
|
|
(5)%
|
Total operating
expenses
|
|
2,303
|
|
2,280
|
|
1%
|
Operating income
|
|
1,367
|
|
1,245
|
|
10%
|
Interest income
|
|
3
|
|
3
|
|
—%
|
Interest expense
|
|
(91)
|
|
(79)
|
|
15%
|
Other income (expense)
|
|
25
|
|
(2)
|
|
1,350%
|
Income before income taxes
|
|
1,304
|
|
1,167
|
|
12%
|
Income tax expense (1)
|
|
256
|
|
234
|
|
9%
|
Net income
|
|
1,048
|
|
933
|
|
12%
|
Less: Net income attributable to noncontrolling
interests
|
|
25
|
|
20
|
|
25%
|
Net income attributable to Aon
shareholders
|
|
$
1,023
|
|
$ 913
|
|
12%
|
|
|
|
|
|
|
|
Basic net income per share attributable to Aon
shareholders
|
|
$ 4.75
|
|
$ 4.02
|
|
18%
|
Diluted net income per share attributable to Aon
shareholders
|
|
$ 4.73
|
|
$ 4.00
|
|
18%
|
Weighted average ordinary shares outstanding -
basic
|
|
215.3
|
|
227.1
|
|
(5)%
|
Weighted average ordinary shares outstanding -
diluted
|
|
216.4
|
|
228.1
|
|
(5)%
|
(1) The
effective tax rate was 19.6% and 20.1% for the three months ended
March 31, 2022 and 2021, respectively.
|
Aon plc
Reconciliation
of Non-GAAP Measures - Organic Revenue Growth and Free
Cash Flow (Unaudited)
Organic Revenue
Growth (Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
|
|
(millions)
|
|
2022
|
|
2021
|
|
%
Change
|
|
Less:
Currency
Impact (1)
|
|
Less:
Fiduciary
Investment
Income (2)
|
|
Less:
Acquisitions,
Divestitures
& Other
|
|
Organic
Revenue
Growth (3)
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Risk Solutions
|
|
$
1,719
|
|
$
1,640
|
|
5%
|
|
(3)%
|
|
—%
|
|
(1)%
|
|
9%
|
Reinsurance Solutions
|
|
976
|
|
922
|
|
6
|
|
(2)
|
|
—
|
|
1
|
|
7
|
Health Solutions
|
|
638
|
|
615
|
|
4
|
|
(3)
|
|
—
|
|
(1)
|
|
8
|
Wealth Solutions
|
|
345
|
|
355
|
|
(3)
|
|
(2)
|
|
—
|
|
(1)
|
|
—
|
Elimination
|
|
(8)
|
|
(7)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
Total
revenue
|
|
$
3,670
|
|
$
3,525
|
|
4%
|
|
(3)%
|
|
—%
|
|
(1)%
|
|
8%
|
(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, 2022 and 2021 was $2
million in each period.
|
(3)
|
Organic revenue growth
includes the impact of intercompany activity and excludes the
impact of changes in foreign exchange rates, fiduciary investment
income, acquisitions, divestitures, transfers between revenue
lines, and gains or losses on derivatives accounted for as
hedges.
|
Free Cash Flows
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
(millions)
|
|
2022
|
|
2021
|
|
% Change
|
Cash Provided by
Operating Activities
|
|
$
463
|
|
$
561
|
|
(17)%
|
Capital
Expenditures
|
|
(23)
|
|
(29)
|
|
(21)%
|
Free Cash Flows
(1)
|
|
$
440
|
|
$
532
|
|
(17)%
|
(1)
|
Free cash flow is
defined as cash flows from operations less capital expenditures.
This non-GAAP measure does not imply or represent a precise
calculation of residual cash flow available for discretionary
expenditures.
|
|
|
Aon plc
Reconciliation
of Non-GAAP Measures - Operating Income and Diluted
Earnings Per Share (Unaudited) (1)
|
|
|
|
Three Months Ended
March 31,
|
|
|
(millions, except
percentages)
|
|
2022
|
|
2021
|
|
%
Change
|
Revenue
|
|
$ 3,670
|
|
$ 3,525
|
|
4%
|
|
|
|
|
|
|
|
Operating income
|
|
$ 1,367
|
|
$ 1,245
|
|
10%
|
Amortization and impairment of
intangible assets
|
|
28
|
|
40
|
|
|
Transaction costs and other
charges related to the combination and resulting termination
(2)
|
|
—
|
|
35
|
|
|
Operating income - as adjusted
|
|
$ 1,395
|
|
$ 1,320
|
|
6%
|
Operating margin
|
|
37.2%
|
|
35.3%
|
|
|
Operating margin - as adjusted
|
|
38.0%
|
|
37.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
(millions, except
percentages)
|
|
2022
|
|
2021
|
|
%
Change
|
Operating income - as adjusted
|
|
$ 1,395
|
|
$ 1,320
|
|
6%
|
Interest income
|
|
3
|
|
3
|
|
—%
|
Interest expense
|
|
(91)
|
|
(79)
|
|
15%
|
Other income (expense):
|
|
|
|
|
|
|
Other income (expense) -
pensions - as adjusted
|
|
(3)
|
|
6
|
|
(150)%
|
Other income (expense) -
other
|
|
28
|
|
(8)
|
|
450%
|
Total Other income
(expense) - as adjusted
|
|
25
|
|
(2)
|
|
1,350%
|
Income before income taxes - as
adjusted
|
|
1,332
|
|
1,242
|
|
7%
|
Income tax expense (3)
|
|
262
|
|
245
|
|
7%
|
Net income - as adjusted
|
|
1,070
|
|
997
|
|
7%
|
Less: Net income attributable to noncontrolling
interests
|
|
25
|
|
20
|
|
25%
|
Net income attributable to Aon shareholders - as
adjusted
|
|
$ 1,045
|
|
$
977
|
|
7%
|
Diluted net income per share attributable to Aon
shareholders - as adjusted
|
|
$
4.83
|
|
$
4.28
|
|
13%
|
Weighted average ordinary shares outstanding -
diluted
|
|
216.4
|
|
228.1
|
|
(5)%
|
Effective Tax Rates
(3)
|
|
|
|
|
|
|
U.S. GAAP
|
|
19.6%
|
|
20.1%
|
|
|
Non-GAAP
|
|
19.7%
|
|
19.7%
|
|
|
(1)
|
Certain noteworthy
items impacting operating income in the three months ended March
31, 2022 and 2021 are described in this schedule. The items shown
with the caption "as adjusted" are non-GAAP measures.
|
(2)
|
As part of the
terminated combination with WTW, certain transaction costs were
incurred by the Company through the third quarter of 2021. These
costs may include advisory, legal, accounting, valuation, and other
professional or consulting fees related to the combination,
including planned divestitures that have been terminated, as well
as certain compensation expenses and expenses related to further
steps on our Aon United operating model as a result of the
termination.
|
(3)
|
Adjusted items are
generally taxed at the estimated annual effective tax rate, except
for the applicable tax impact associated with certain transaction
costs and other charges related to the combination and resulting
termination, which are adjusted at the related jurisdictional
rate.
|
|
|
Aon plc
Condensed Consolidated
Statements of Financial Position
|
|
|
|
As of
|
|
|
(Unaudited)
|
|
|
(millions)
|
|
March 31,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
595
|
|
$
544
|
Short-term investments
|
|
455
|
|
292
|
Receivables, net
|
|
3,625
|
|
3,094
|
Fiduciary assets (1)
|
|
15,277
|
|
14,386
|
Other current assets
|
|
593
|
|
716
|
Total current
assets
|
|
20,545
|
|
19,032
|
Goodwill
|
|
8,496
|
|
8,434
|
Intangible assets, net
|
|
530
|
|
492
|
Fixed assets, net
|
|
515
|
|
529
|
Operating lease right-of-use assets
|
|
754
|
|
786
|
Deferred tax assets
|
|
770
|
|
766
|
Prepaid pension
|
|
1,361
|
|
1,366
|
Other non-current assets
|
|
520
|
|
512
|
Total
assets
|
|
$
33,491
|
|
$
31,917
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
1,728
|
|
$
2,192
|
Short-term debt and current portion of long-term
debt
|
|
599
|
|
1,164
|
Fiduciary liabilities
|
|
15,277
|
|
14,386
|
Other current liabilities
|
|
1,585
|
|
1,331
|
Total current
liabilities
|
|
19,189
|
|
19,073
|
Long-term debt
|
|
9,685
|
|
8,228
|
Non-current operating lease liabilities
|
|
736
|
|
772
|
Deferred tax liabilities
|
|
399
|
|
401
|
Pension, other postretirement, and postemployment
liabilities
|
|
1,320
|
|
1,375
|
Other non-current liabilities
|
|
871
|
|
910
|
Total
liabilities
|
|
32,200
|
|
30,759
|
|
|
|
|
|
Equity
|
|
|
|
|
Ordinary shares - $0.01 nominal value
|
|
2
|
|
2
|
Additional paid-in capital
|
|
6,627
|
|
6,624
|
Accumulated deficit
|
|
(1,609)
|
|
(1,694)
|
Accumulated other comprehensive loss
|
|
(3,843)
|
|
(3,871)
|
Total Aon shareholders'
equity
|
|
1,177
|
|
1,061
|
Noncontrolling interests
|
|
114
|
|
97
|
Total
equity
|
|
1,291
|
|
1,158
|
Total liabilities and equity
|
|
$
33,491
|
|
$
31,917
|
(1)
|
Includes cash and
short-term investments of $6,700 million and $6,101 million for the
periods ended March 31, 2022 and December 31, 2021,
respectively.
|
Aon plc
Condensed Consolidated
Statements of Cash Flows (Unaudited)
|
|
|
|
Three Months Ended March 31,
|
(millions)
|
|
2022
|
|
2021
|
Cash flows from operating
activities
|
|
|
|
|
Net
income
|
|
$
1,048
|
|
$
933
|
Adjustments to reconcile net income to cash provided by
operating activities:
|
|
|
|
|
Gain from sales of
businesses
|
|
(25)
|
|
—
|
Depreciation of fixed
assets
|
|
38
|
|
41
|
Amortization and impairment of
intangible assets
|
|
28
|
|
40
|
Share-based compensation
expense
|
|
119
|
|
131
|
Deferred income
taxes
|
|
(18)
|
|
19
|
Change in assets and liabilities:
|
|
|
|
|
Receivables, net
|
|
(544)
|
|
(485)
|
Accounts payable and accrued
liabilities
|
|
(449)
|
|
(356)
|
Current income taxes
|
|
153
|
|
142
|
Pension, other postretirement
and postemployment liabilities
|
|
(27)
|
|
(59)
|
Other assets and
liabilities
|
|
140
|
|
155
|
Cash provided by operating
activities
|
|
463
|
|
561
|
Cash flows from investing
activities
|
|
|
|
|
Proceeds from investments
|
|
45
|
|
11
|
Payments for investments
|
|
(9)
|
|
(18)
|
Net
sales (purchases) of short-term investments - non
fiduciary
|
|
(164)
|
|
138
|
Acquisition of businesses, net of cash and funds held on
behalf of clients
|
|
(134)
|
|
—
|
Sale of businesses, net of cash and funds held on behalf of
clients
|
|
22
|
|
—
|
Capital expenditures
|
|
(23)
|
|
(29)
|
Cash provided by (used for)
investing activities
|
|
(263)
|
|
102
|
Cash flows from financing
activities
|
|
|
|
|
Share repurchase
|
|
(828)
|
|
(50)
|
Issuance of shares for employee benefit plans
|
|
(116)
|
|
(87)
|
Issuance of debt
|
|
3,128
|
|
250
|
Repayment of debt
|
|
(2,208)
|
|
(650)
|
Increase in fiduciary liabilities, net of fiduciary
receivables
|
|
647
|
|
28
|
Cash dividends to shareholders
|
|
(110)
|
|
(104)
|
Noncontrolling interests and other financing
activities
|
|
(13)
|
|
(68)
|
Cash provided by (used for)
financing activities
|
|
500
|
|
(681)
|
Effect of exchange rates on cash and cash equivalents
and funds held on behalf of clients
|
|
(50)
|
|
(34)
|
Net increase (decrease) in cash and cash equivalents
and funds held on behalf of clients
|
|
650
|
|
(52)
|
Cash, cash equivalents and funds held on behalf of
clients at beginning of period
|
|
6,645
|
|
6,573
|
Cash, cash equivalents and funds held on behalf of
clients at end of period
|
|
$
7,295
|
|
$
6,521
|
Reconciliation of cash
and cash equivalents and funds held on behalf of
clients:
|
|
|
|
|
Cash and cash equivalents
|
|
$
595
|
|
$
822
|
Funds held on behalf of clients
|
|
6,700
|
|
5,699
|
Total cash and cash equivalents
and funds held on behalf of clients
|
|
$
7,295
|
|
$
6,521
|
View original
content:https://www.prnewswire.com/news-releases/aon-reports-first-quarter-2022-results-301535872.html
SOURCE Aon plc