3. 2
Safe Harbor Statement
This communication contain certain statements related to future results, or states our 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. Forward-looking statements relate to expectations or forecasts of future events. They use
words such as "anticipate," "believe," "estimate," "expect," "forecast," "project," "intend," "plan," "probably," "potential," "looking forward" and other similar terms, and future or
conditional tense verbs like "could," "may," "might," "should," "will" and "would." You can also identify forward-looking statements by the fact that they do not relate strictly to historical or
current facts. For example, we may use forward-looking statements when addressing topics such as: market and industry conditions, including competitive and pricing trends; changes
in our business strategies and methods of generating revenue; the development and performance of our services and products; changes in the composition or level of our revenues; our
cost structure and the outcome of cost-saving or restructuring initiatives; the outcome of contingencies; dividend policy; the expected impact of acquisitions and dispositions; pension
obligations; cash flow and liquidity; expected effective tax rate; future actions by regulators; and the impact of changes in accounting rules. 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.
The following factors, among others, could cause actual results to differ from those set forth in the forward looking statements: general economic and political conditions in different
countries in which Aon does business around the world; changes in the competitive environment; fluctuations in exchange and interest rates that could influence revenue and expense;
changes in global equity and fixed income markets that could affect the return on invested assets; changes in the funding 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 limiting financial flexibility; rating agency actions that could affect Aon's ability to borrow
funds; the effect of the change in global headquarters and jurisdiction of incorporation, including differences in the anticipated benefits; changes in estimates or assumptions on our
financial statements; limits on Aon’s subsidiaries to make dividend and other payments to Aon; the impact of lawsuits and other contingent liabilities and loss contingencies arising from
errors and omissions and other claims against Aon; the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which Aon operates,
particularly given the global scope of Aon’s businesses and the possibility of conflicting regulatory requirements across jurisdictions in which Aon does business; the impact of any
investigations brought by regulatory authorities in the U.S., U.K. and other countries; the impact of any inquiries relating to compliance with the U.S. Foreign Corrupt Practices Act and
non-U.S. anti-corruption laws and with U.S. and non-U.S. trade sanctions regimes; failure to protect intellectual property rights or allegations that we infringe on the intellectual property
rights of others; the effects of English law on our operating flexibility and the enforcement of judgments against Aon; the failure to retain and attract qualified personnel; international
risks associated with Aon’s global operations; the effect or natural or man-made disasters; the potential of a system or network breach or disruption resulting in operational interruption
or improper disclosure of personal data; Aon’s ability to develop and implement new technology; the damage to our reputation among clients, markets or third parties; the actions taken
by third parties that preform aspects of our business operations and client services; the extent to which Aon manages certain risks created in connection with the various services,
including fiduciary and investments and other advisory services and business process outsourcing services, among others, that Aon currently provides, or will provide in the future, to
clients; Aon’s ability to grow, develop and integrate companies that it acquires or new lines of business; changes in commercial property and casualty markets, commercial premium
rates or methods of compensation; changes in the health care system or our relationships with insurance carriers; and Aon’s ability to implement initiatives intended to yield cost
savings, and the ability to achieve those cost savings.
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. 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 and its Quarterly
Reports on Form 10-Q for a further discussion of these and other risks and uncertainties applicable to Aon’s businesses. These factors may be revised or supplemented in subsequent
reports. Aon is under no obligation, 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 related to organic revenue, free cash flow, adjusted operating margin, adjusted earnings per share, and adjusted effective tax
rate that exclude the effects of restructuring charges, intangible asset amortization, capital expenditures, transaction and integration costs and certain other noteworthy items that
affected results for the comparable periods. Organic revenue excludes from reported revenues the impact of foreign exchange, acquisitions, divestitures, transfers between business
units, reimbursable expenses and unusual items. The impact of foreign exchange is determined by translating last year's revenue, expense or net income at this year's foreign
exchange rates. Reconciliations are provided in the attached schedules. Supplemental organic revenue information and additional measures that exclude the effects of the
restructuring charges and certain other items do not affect net income or any other GAAP reported amounts. Free cash flow is cash flow from operating activity less capital
expenditures. The effective tax rate, as adjusted, excludes the applicable tax impact associated with expenses for legacy litigation. Management believes that these
measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors. They should be viewed
in addition to, not in lieu of, the Company’s Consolidated Financial Statements. Industry peers provide similar supplemental information regarding their
performance, although they may not make identical adjustments.
4. 3
Key Metrics* – Strong Performance Across All Four Key Metrics
Q4 Organic Revenue
Organic revenue growth of +5% in Risk Solutions and +4% in HR
Solutions
Solid organic revenue growth across all major businesses, including
6% growth in both Americas and International retail brokerage
Q4 Operating Margin
Risk Solutions increased +100 bps driven by strong organic revenue
growth and return on investments in data and analytics
HR Solutions increased +270 bps driven by solid organic revenue
growth and return on investments, partially offset by $12 million of
transaction and portfolio repositioning related costs
Q4 EPS
+20% earnings growth driven by strong operating performance and
effective capital management
Includes a $0.10 unfavorable impact from changes in foreign currency
exchange rates
Repurchased approximately $400 million of ordinary shares
2015 Free Cash Flow
Record cash flow from operations of $2.0 billion driven by declines in
pension contributions, restructuring related payments, and cash paid
for taxes, as well as working capital improvements
Record free cash flow of $1.7 billion reflects 11% growth in cash flow
from operations, partially offset by a $34 million increase in capital
expenditures for completed projects to optimize real estate globally
* The results presented are non-GAAP measures that are reconciled in the appendix of this presentation.
1 Organic revenue excludes the impact of foreign exchange, acquisitions, divestitures, transfers, reimbursable expenses and other unusual items. Change in
organic revenue, a non-GAAP measure, is reconciled to the corresponding U.S. GAAP change in revenue in Appendix A of this presentation.
2 Certain noteworthy items impacted operating margin and earnings per share in the fourth quarter and full year of 2015 and 2014. A reconciliation of non-GAAP
measures for operating margin and diluted earnings per share to the corresponding U.S. GAAP measure is in Appendix B of this presentation.
3 Free cash flow is defined as cash flow 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. A reconciliation of free cash flow to the corresponding U.S. GAAP measure
can be found in Appendix A of this presentation.
Q4 2015
1. Organic Revenue1 +5% +3%
Prior Year +6% +3%
2. Operating Margin2 24.1% 20.0%
Y-o-Y change +110 bps +50 bps
3. Earnings per Share2 $2.27 $6.18
Y-o-Y change +20% +8%
4. Free Cash Flow3 $1.7B
Y-o-Y change +10%
5. 4
Organic Revenue¹ – Strongest Quarterly Organic Growth in Risk Since 2007
Q4 Risk Solutions
Americas: Strong growth across all regions and product
lines, including record new business generation in US
Retail and double digit growth Latin America
International: Strong growth across Asia and the Pacific
and effective management of the renewal book portfolio
in continental Europe
Reinsurance: Growth in treaty placements globally and
record net new business, partially offset by a decline in
capital markets transactions and advisory business and
facultative placements, as well as a modest unfavorable
market impact in the Americas
Q4 2015
Risk Solutions
Americas 6% 4%
International 6% 3%
Retail 6% 4%
Reinsurance 2% -1%
Total Risk Solutions +5% +3%
HR Solutions
Consulting 4% 3%
Outsourcing 4% 4%
Total HR Solutions +4% +4%
Total Aon +5% +3%
Q4 HR Solutions
Consulting: Solid growth in compensation consulting
and continued growth in retirement solutions,
particularly for investment consulting
Outsourcing: Solid growth in benefit administration for
project-related work, new client wins in HR BPO for
cloud-based solutions, and higher enrollments in health
care exchanges
1 Organic revenue excludes the impact of foreign exchange, acquisitions, divestitures, transfers, reimbursable expenses and other unusual items. Change in
organic revenue, a non-GAAP measure, is reconciled to the corresponding U.S. GAAP change in revenue in Appendix A of this presentation.
6. 5
Investing in the Business to Position the Firm for Long-Term Growth
“Aon has a truly impressive track record of developing innovative solutions to help solve problems and create differentiated value
in response to specific client needs. Solid long-term operating performance, combined with expense discipline and strong cash
flow, continues to enable substantial investments that position the firm for long-term growth.”
Risk Solutions HR Solutions
Global Risk Insight Platform (GRIP), which is the
world’s leading global repository of risk and
insurance placement information providing insight
into $160 billion of global premium flow
Aon Broking initiative to better match client needs
with insurer appetite for risk and to identify structured
portfolio or treaty solutions, such as Aon Client
Treaty
Further development of data and analytics capability
at Aon Benfield to strengthen our already industry-
leading value proposition and client serving
capability, such as ReView
Roll-out of the Revenue Engine internationally and
Aon Client Promise firm-wide to drive greater
retention and rollover rates
Expansion of content and global footprint through
tuck-in acquisitions that increase scale in emerging
markets or expand capability to better serve clients
Focusing on innovative solutions to de-risk pension
plans and support increasing needs for delegated
investment and defined-contribution solutions to
fulfill clients’ needs for effective execution of their
investment and retirement benefit strategies
Strengthening our industry-leading portfolio of
health solutions; including our suite of private health
care exchanges for active employees and retirees
enabling clients to transition their participants to a
market-based, defined contribution model for
healthcare, while addressing unsustainable
healthcare cost increases
Further development of our industry-leading
benefits and HR operations solutions and consumer
technology platforms, including extensive mobile
solutions and cloud-based outsourcing solutions
Expansion of our international footprint to support a
global workforce, with investments in key talent and
capabilities across emerging markets
7. 6
$558
$633
Net Income¹
EPS* – Delivered Double-Digit Earnings Growth
($ millions) Q4 2014
Net Income1 $633 $1,753
Y-o-Y change +13% +2%
Earnings Per Share1 $2.27 $6.18
Y-o-Y change +20% +8%
* The results presented are non-GAAP measures that are reconciled in the appendix of this presentation.
1 Certain noteworthy items impacted net income and earnings per share in the fourth quarter and full year of 2015 and 2014. A reconciliation of non-GAAP
measures for net income and diluted earnings per share to the corresponding U.S. GAAP measure is in Appendix B of this presentation.
$1.89
$2.27
EPS¹
Q4’14 Q4’15
“Overall, our results reflect both a strong performance for both the fourth quarter and full year 2015. In a year of
substantial volatility driven by macroeconomic factors and industry headwinds, we continued to invest heavily in client-
serving capabilities across our industry-leading platform. These investments, combined with the leadership of our
colleagues around the globe, contributed to our strongest quarterly rate of organic growth in Risk Solutions since 2007,
record operating margins in both segments, record free cash flow of $1.7 billion and the return of $1.9 billion of capital to
shareholders.”
8. 7
Operating Margins* – Record Operating Margins in Both Segments
Q4 Risk Solutions Operating Margin
Positive Impact:
Organic revenue growth of +5%
Return on investments
Favorable impact of +30 bps from changes in
foreign currency exchange rates
Q4 2015
Risk Solutions
Operating Income1 $517 $1,752
Y-o-Y change +2% -2%
Operating Margin1 25.7% 23.6%
Y-o-Y change +100 bps +70 bps
HR Solutions
Operating Income1 $338 $780
Y-o-Y change +14% +7%
Operating Margin1 26.2% 18.1%
Y-o-Y change +270 bps +100 bps
Q4 HR Solutions Operating Margin
Positive Impact:
Organic revenue growth of +4%
Return on investments
Favorable impact of +10 bps from changes in
foreign currency exchange rates
Negative Impact:
$12 million, or -90 bps, of transaction and
portfolio repositioning related costs
($ millions)
* The results presented are non-GAAP measures that are reconciled in the appendix of this presentation.
1 Certain noteworthy items impacted operating income and operating margin in the fourth quarter and full year of 2014 and 2013. A reconciliation of non-GAAP
measures for operating income and operating margin to the corresponding U.S. GAAP measure is in Appendix B of this presentation.
9. 8
Long-Term Operating Margin Targets & Primary Drivers
Risk Solutions Operating Margin1
HR Solutions Operating Margin1
16.6%
18.2%
18.7%
21.6%
22.4%
21.6% 21.7%
22.5% 22.9%
23.6%
26.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Target
Drivers Within Our Control:
1. Return on investments in data and analytics,
including Aon Broking and GRIP related initiatives
2. Continued rollout of Revenue Engine internationally
3. Expense discipline and optimization of global cost
structure, including IT and Real Estate costs
Upside Opportunity:
1. Increases in short-term interest rates
2. Improvements in global GDP or insurance pricing
5.8%
11.7%
14.9% 15.2% 15.3%
17.6% 16.6% 16.7% 17.1%
18.1%
22.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Target
Drivers Within Our Control:
1. Growth in the core business and return on
incremental investments, including health care
exchanges and investment consulting
2. Improvement in HR Business Process Outsourcing
3. Expense discipline and optimization of global cost
structure, including IT and Real Estate costs
1 The results presented represent non-GAAP measures. See Appendix C for a reconciliation of non-GAAP measures for operating margin to the corresponding
U.S. GAAP measure.
10. 9
Unallocated Expense & Non-Operating Segment Financials
Q4’14 Q4’15
Quarterly
Guidance
Unallocated Expense ($44) ($61) ($45)
Interest Income $3 $4 $3
Interest Expense ($67) ($68) ($68)
Other Income (Expense) $10 $49 -
Effective Tax Rate1 19.6% 17.9% -
Minority interest ($8) ($6) ($9)
Actual common shares
outstanding at 12-31-15
N/A 269.8 -
Unallocated expense increased $17 million due
primarily to the timing of certain employee
incentive and employee benefit related
expenses, as well as certain investments in
shared services
Other Income of $49 million primarily includes a
gain on the sale of our Absence Management
business in Outsourcing in HR Solutions
Adjusted effective tax rate, excluding the
applicable tax impact associated with expenses
related to legacy litigation, was 17.9% compared
to 19.6% in the prior year quarter
Actual common shares outstanding on
December 31st were 269.8 million, and there
were approximately 6 million additional dilutive
equivalents. The Company repurchased 4.2
million ordinary shares for approximately $400
million in the fourth quarter. Estimated Q1’16
beginning dilutive share count is ~276 million
subject to share price movement, share
issuance and share repurchase
($ millions)
1 The effective tax rates used in the U.S. GAAP financial statements were 15.8% and 19.6% for the three months ended December 31, 2015 and 2014,
respectively, and 15.8% and 18.9% for the twelve months ended December 31, 2015 and 2014, respectively. Reconciling items are generally taxed at the
effective tax rate. However, after adjusting the underlying annual rate to exclude the impact associated with expenses for legacy litigation in the second
quarter, the adjusted effective tax rates for both the fourth quarter and twelve months of 2015 was 17.9%.
11. 10
2014 2015
$1,812
$2,009
Solid Balance Sheet and Strong Free Cash Flow Generation
Sept 30,
2015
Dec 31,
2015
Cash $398 $384
Short-term
Investments
$385 $356
Total Debt $6,126 $5,737
Total Aon
Shareholders’
Equity
$5,883 $6,156
Debt to EBITDA 2.6x 2.3x
Balance Sheet
($ mil)
1 During the quarter ended December 31, 2015, the Company reclassified certain cash flows related to employee shares withheld for taxes. This resulted in reclassifying
$227 million and $170 million for the years ended December 31, 2015 and 2014, respectively, from "Accounts payable and accrued liabilities" and "Other assets and
liabilities" within Cash Flows From Operating Activities, to "Issuance of shares for employee benefit plans" within Cash Flows From Financing Activities. The amounts
reclassified from "Accounts payable and accrued liabilities" and "Other assets and liabilities" were $85 million and $85 million in 2014, respectively. This reclassification
had no impact on total cash flows generated or used by the Company for fiscal year 2015 or 2014.
2 Free cash flow is defined as cash flow from operations less capital expenditures. This non-GAAP measure does not imply or represent a precise
calculation of residual cash flow available for discretionary expenditures. A reconciliation of free cash flow to the corresponding U.S. GAAP measure
can be found in Appendix A of this presentation.
Cash Flow from Operations 1
($ mil)
Free Cash Flow 2
($ mil)
Cash Flow Commentary1:
Record cash flow from operations was driven by declines in pension
contributions, restructuring related payments, and cash paid for taxes, as
well as working capital improvements, partially offset by $137 million in
cash paid to settle legacy litigation and strong organic growth in the fourth
quarter
Record free cash flow reflects higher cash flow from operations, offset by
a $34 million increase in capital expenditures
2014 2015
$1,556 $1,719
12. 11
$290 $254 $244
$194
$150 $163
$28
$19 $12
2015 2016e 2017e
Capital Expenditures Pension Contributions Restructuring - Cash
Significantly Increasing Free Cash Flow1 Generation
Estimated Declining Required Uses of Cash ($ millions)
$512
$423 $419
1 Free cash flow is defined as cash flow 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. A reconciliation of free cash flow to the corresponding U.S. GAAP measure can be found in Appendix A of this
presentation.
2 As noted on the previous page, during the quarter the Company reclassified certain cash flows related to employee shares withheld for taxes. This resulted in reclassifying
$82 million, $93 million, $94 million, $115 million, $120 million, $170 million, and $227 million for the years ended December 31, 2009, 2010, 2011, 2012, 2013, 2014, and
2015, respectively, from "Accounts payable and accrued liabilities" and "Other assets and liabilities" within Cash Flows From Operating Activities, to "Issuance of shares for
employee benefit plans" within Cash Flows From Financing Activities.
3 Estimate based on current actuarial assumptions and certain management estimates as of December 31, 2015 measurement date.
Free Cash Flow 2 ($ millions)
$442
$696
$871
$1,265
$1,524 $1,556
$1,719
$2,400
2009 2010 2011 2012 2013 2014 2015 2017
Target
Key Drivers:
1. Operational improvement as the firm continues to
deliver growth and make progress towards its long-
term operating margin targets
2. Working capital improvements as the firm focuses
on closing the gap between receivables and
payables
3. Declining required uses of cash for pensions and
restructuring
4. Lower cash tax payments reflecting the lower
effective tax rate
Anticipated increase of more than $90
million annually to FCF from 2015 to 2017
3
13. 12
Summary – Continued Long-Term Value Creation
Positioned for sustainable long-term growth in both Risk Solutions and HR Solutions
Significant leverage to an improving global economy, interest rates and insurance pricing
Investing in colleagues and capabilities around the globe to better serve clients
Opportunity for long-term operating margin improvement with increased operating leverage in the business
Strong balance sheet and free cash flow generation with declining uses of required cash outlays
Increased financial flexibility and effective capital allocation is expected to drive significant shareholder value
