Aon plc (NYSE:AON) Q1 2024 Earnings Conference Call April 26, 2024 8:30 AM ET Company Participants Greg Case - Chief Executive Officer Christa Davies - Chief Financial Officer Eric Andersen - President Conference Call Participants Andrew Kligerman - TD Securities Jimmy Bhullar - JPMorgan Mike Zaremski - BMO Capital Markets Elyse Greenspan - Wells Fargo David Motemaden - Evercore ISI Rob Cox - Goldman Sachs Meyer Shields - KBW Operator Good morning, and thank you for holding. Welcome to Aon plc's First Quart ...

Aon plc First Quarter 2024 Results April 26, 2024 Greg Case Chief Executive Officer Christa Davies Chief Financial Officer ...

Exhibit 99.1 Investor Relations News from Aon Aon Reports First Quarter 2024 Results First Quarter Key Metrics • Total revenue increased 5% to $4.1 billion, including organic revenue growth of 5% • Operating margin decreased 210 basis points to 36.0%, and operating margin, adjusted for certain items, increased 100 basis points to 39.7% • EPS increased 6% to $5.35, and EPS, adjusted for certain items, increased 9% to $5.66 • For the first three months of 2024, cash flows from operations was $309 million, and ...

Revenue and Growth - Revenue increased by $897 million (7%) to $13.4 billion in 2023, driven by 7% organic revenue growth and a 2% favorable impact from fiduciary investment income[185][196] - Organic revenue growth, a non-GAAP measure, was 7% in 2023, compared to 6% in 2022[187] - Total revenue for 2023 increased by 7% to $13,376 million compared to $12,479 million in 2022, with organic revenue growth also at 7%[217] - Commercial Risk Solutions revenue increased by $328 million (5%) to $7.0 billion in 2023, with organic revenue growth of 5% driven by strong retention and net new business generation[197] - Commercial Risk Solutions revenue grew by 5% to $7,043 million in 2023, with organic growth of 5%[217] - Reinsurance Solutions revenue increased by 13% to $2,481 million in 2023, with organic growth of 10%[217] - Health Solutions revenue rose by 9% to $2,433 million in 2023, with organic growth of 10%[217] Operating Expenses and Margins - Operating expenses increased by $781 million (9%) to $9.6 billion in 2023, primarily due to organic revenue growth, legal settlement expenses, and restructuring program costs[185] - Adjusted operating margin increased to 31.6% in 2023 from 30.8% in 2022, driven by organic revenue growth and higher fiduciary investment income[188] - Adjusted operating margin improved to 31.6% in 2023 from 30.8% in 2022[221] - The company incurred $197 million in legal settlement expenses related to Vesttoo Ltd. transactions in 2023[221] - The company entered into a definitive agreement to acquire NFP in 2023, incurring $17 million in transaction costs[221] Net Income and Earnings - Net income decreased by $18 million (1%) to $2.6 billion in 2023, with diluted earnings per share increasing 3% to $12.51[186] - Adjusted diluted earnings per share increased by $0.75 (6%) to $14.14 in 2023, reflecting strong operational performance and $2.7 billion in share repurchases[188] - Adjusted diluted earnings per share increased to $14.14 in 2023 from $13.39 in 2022[224][225] Cash Flow and Liquidity - Cash flows from operating activities increased by $216 million (7%) to $3.4 billion in 2023, reflecting strong operating income growth and working capital optimization[186] - Free cash flow increased by $160 million (5%) to $3.2 billion in 2023, driven by higher cash flows from operations[189] - Free cash flow grew to $3,183 million in 2023 from $3,023 million in 2022[227] - Net cash provided by operating activities in 2023 was $3.4 billion, an increase of $216 million compared to 2022[240] - Cash and cash equivalents and funds held on behalf of clients increased by $646 million in 2023 compared to 2022[238] - Cash flows used for investing activities in 2023 were $188 million, a decrease of $261 million compared to 2022[247] - The company completed the acquisition of three businesses in 2023 for a net cash consideration of $35 million[249] - Capital expenditures in 2023 amounted to $252 million, primarily for office refurbishment, software development, and computer equipment[250] Acquisitions and Investments - Aon entered into a definitive agreement to acquire NFP for approximately $7 billion in cash and 20 million class A ordinary shares, expected to close by mid-2024[191] - Aon North America, Inc. secured a $2.0 billion unsecured term loan facility on February 16, 2024, to fund the acquisition of NFP[262] Debt and Financing - Total debt at December 31, 2023 was $11.2 billion, an increase of $0.4 billion compared to 2022[254] - Aon Corporation repaid $500 million of 2.20% Senior Notes in November 2022[255] - Aon Corporation and Aon Global Holdings plc issued $500 million of 5.00% Senior Notes due September 2032 in September 2022[255] - Aon Corporation and Aon Global Holdings plc issued $600 million of 2.85% Senior Notes due May 2027 and $900 million of 3.90% Senior Notes due February 2052 in February 2022[255] - The U.S. commercial paper program capacity increased by $250 million to $1.3 billion, and the European program capacity is €625 million ($690 million at December 31, 2023 exchange rates)[257] - Total commercial paper issuances for 2023 were $4,835 million, with net repayments of $27 million[258] - Aon Corporation had $2.0 billion in available credit from two primary committed credit facilities as of December 31, 2023[260] Pension and Employee Benefits - Pension contributions for 2023 were $50 million, with an expected contribution of $68 million in 2024[241] - The company estimates cash contributions of approximately $68 million to its pension plans in 2024, compared to $50 million in 2023[305] - The U.S. pension plan's market-related value of assets was $1.8 billion as of December 31, 2023, with a fair value of plan assets at $1.5 billion[295][297] - Accumulated other comprehensive loss for pension plans is $1,909 million for the U.S., $1,319 million for the U.K., and $431 million for other plans, with estimated 2024 amortization of loss at $84 million, $36 million, and $13 million respectively[294] - The expected long-term rate of return on plan assets for 2024 is 5.14% for the U.K., 7.79% for the U.S., and 4.40% to 5.50% for other plans[298] - A 25 basis points increase in the discount rate would decrease the projected benefit obligation by $94 million for the U.K., $53 million for the U.S., and $40 million for other plans, while a decrease would increase the obligations by $97 million, $55 million, and $42 million respectively[301] - A 25 basis points increase in the long-term rate of return on plan assets would decrease estimated 2024 pension expense by $9 million for the U.K., $4 million for the U.S., and $3 million for other plans, while a decrease would increase the expense by the same amounts[304] Fiduciary and Investment Income - Fiduciary investment income significantly increased to $274 million in 2023 from $76 million in 2022[218] - Fiduciary assets included cash and cash equivalents of $6.9 billion and $6.4 billion at December 31, 2023 and 2022, respectively[234] - The company's fiduciary investment income is affected by changes in short-term interest rates, with a hypothetical 100 BPS decrease or increase in the yield curve impacting pre-tax income by $69 million for both 2024 and 2025[329] Legal and Contingent Liabilities - The company incurred $197 million in legal settlement expenses related to Vesttoo Ltd. transactions in 2023[221] - Total letters of credit outstanding were approximately $86 million at December 31, 2023, compared to $74 million at December 31, 2022[266] - The maximum exposure for contractual contingent guarantees was approximately $194 million at December 31, 2023, compared to $173 million at December 31, 2022[267] Assets and Liabilities - Total current assets amount to $1,661 million, with receivables due from non-guarantor subsidiaries at $1,431 million and other current assets at $230 million[282] - Total non-current assets are $12,101 million, including $10,873 million in non-current receivables from non-guarantor subsidiaries and $1,228 million in other non-current assets[282] - Total current liabilities stand at $8,737 million, with payables to non-guarantor subsidiaries at $3,750 million and other current liabilities at $4,987 million[282] - Total non-current liabilities are $22,380 million, including $10,933 million in non-current payables to non-guarantor subsidiaries and $11,447 million in other non-current liabilities[282] Share-Based Compensation and Performance Plans - The company recognizes share-based compensation expense based on the grant date fair value, with no adjustments necessary for the years ended December 31, 2023, 2022, or 2021[312] - The largest performance share plan (LPP) has a three-year performance period, with potential expense changes ranging from 0% to 200% of the targeted total expense based on performance achievement[315] - A 10% upward or downward adjustment in estimated performance achievement percentage for open performance periods would increase or decrease 2023 expense by approximately $8.7 million[315] Foreign Exchange and Interest Rate Sensitivity - Currency fluctuations had an unfavorable impact of $0.17 on earnings per diluted share for the year ended December 31, 2023[229] - The company has hedged approximately 45% of its U.K. subsidiaries' expected exposures to the U.S. dollar, euro, and Japanese yen transactions for 2024 and 2025[326] - A hypothetical 10% adverse change in year-end exchange rates would result in a potential loss of $28 million and $18 million in future earnings from foreign exchange derivative instruments for 2024 and 2025, respectively[327] - A hypothetical 1% increase or decrease in interest rates would change the fair value of long-term debt by a decrease of 7% or an increase of 8%, respectively, at December 31, 2023[330] - The fair value of long-term debt was $9.2 billion as of December 31, 2023, exceeding the carrying value by $0.8 billion[330] Goodwill and Impairment - Goodwill is tested for impairment at least annually in the fourth quarter, with more frequent tests if indicators of impairment arise, such as a significant decline in share price or expected future cash flows[306] - The company uses a DCF model to determine the fair value of reporting units, with significant judgments involved in forecasting and selecting discount rates, which could impact future goodwill impairment charges[309] Restructuring and Cost Savings - The Accelerating Aon United Program is expected to result in cumulative costs of approximately $1,000 million, with annualized expense savings of $350 million by the end of 2026[246] Distributable Profits and Credit Facilities - Distributable profits as of December 31, 2023, were in excess of $27.5 billion[259] - Aon Corporation had $2.0 billion in available credit from two primary committed credit facilities as of December 31, 2023[260]

Financial Performance - Aon reported a strong financial performance with 7% organic revenue growth in Q4 2023 and for the full year, maintaining strong overall growth despite previous year's 6% organic growth [11][12][16] - Adjusted operating margin expanded by 60 basis points in Q4 and 80 basis points for the full year, with adjusted operating income growth of 10% [19][12] - Free cash flow reached nearly $3.2 billion for the year, reflecting a 5% increase [13][23] Business Line Performance - Reinsurance solutions achieved 14% organic growth in Q4, contributing to a full-year organic growth of 10% [12][11] - Health solutions delivered 11% organic growth, driven by strong performance in U.S. consumer benefit solutions [12][11] - Commercial risk grew 4% organically in Q4, with notable strength in property, casualty, and construction despite ongoing M&A and IPO market pressures [11][12] Market Insights - The company highlighted the impact of geopolitical uncertainty, technological advancements, and workforce changes as key trends influencing client demand [4][5] - Aon noted the increasing importance of actionable analytics for clients to manage volatility and enhance resilience in the face of natural catastrophes [7][10] Strategic Direction - Aon is focused on accelerating its Aon United strategy through a $900 million investment to enhance Aon Business Services and the three-by-three plan [5][6] - The planned acquisition of NFP is expected to strengthen Aon's capabilities in the middle-market segment and drive growth [6][17] Management Commentary - Management expressed confidence in the company's ability to drive ongoing growth across its portfolio, with expectations for mid-single-digit organic revenue growth in 2024 [13][18] - The management team emphasized the importance of addressing rising healthcare costs and talent retention as significant challenges for clients [9][10] Other Important Information - Aon expects restructuring actions completed in 2023 to generate $70 million in run-rate savings in 2024 [20][25] - The company anticipates that the expected acquisition of NFP will be dilutive in 2025 but accretive in 2027 and beyond [22][28] Q&A Session Summary Question: What drove the robust growth in reinsurance and health solutions? - Management highlighted strong performance in both areas, with reinsurance benefiting from record cat bond issuance and health solutions seeing growth from new business and retention [34][35][39] Question: Will M&A be a focus in the next year or two? - Management confirmed that while buybacks are a priority, they are actively looking at M&A opportunities, particularly in data analytics [40][42] Question: What is the impact of the Vesttoo legal settlement? - Management indicated that they are confident in recovering a meaningful amount from the settlement as the bankruptcy process unfolds [63][64] Question: How does the company view free cash flow growth? - Management reiterated confidence in long-term double-digit free cash flow growth, particularly with the expected contributions from the NFP acquisition [66][68] Question: What is the outlook for pricing in the insurance market? - Management noted that pricing will be product-specific and risk-specific, with expectations for stable pricing in certain areas while facing challenges in others [73][74]

Aon plc Fourth Quarter and Full Year 2023 Results Greg Case Chief Executive Officer Christa Davies Chief ...

Aon plc (NYSE:AON) Q3 2023 Earnings Conference Call October 27, 2023 8:30 AM ET Company Participants Greg Case - Chief Executive Officer Christa Davies - Chief Financial Officer Eric Andersen - President Conference Call Participants Rob Cox - Goldman Sachs Paul Newsome - Piper Sandler Charlie Lederer - Citi Elyse Greenspan - Wells Fargo Jimmy Bhullar - JPMorgan David Motemaden - Evercore ISI Meyer Shields - KBW Operator Good morning and thank you for holding. Welcome to Aon plc's Third Quarter 2023 Conferen ...

Aon plc Third Quarter 2023 Results Greg Case Chief Executive Officer Christa Davies Chief Financial Officer ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-7933 Aon plc (Exact Name of Registrant as Specified in Its Charter) IRELAND 98-1539969 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Iden ...

Aon plc (NYSE:AON) Q2 2023 Earnings Call Transcript July 28, 2023 8:30 AM ET Company Participants Greg Case - CEO and Executive Director Christa Davies - Executive VP and CFO Eric Andersen - President Conference Call Participants Charlie Lederer - Citi Mike Zaremski - BMO Capital Markets Weston Bloomer - UBS Bob Huang - Morgan Stanley Rob Cox - Goldman Sachs Elyse Greenspan - Wells Fargo David Motemaden - Evercore ISI Meyer Shields - KBW Jimmy Bhullar - JPMorgan Operator Good morning, and thank you for hold ...