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 free cash flow decreased 29% to $261 million First Quarter Highlights On April 25, 2024, subsequent to the close of the quarter, completed the acquisition of NFP, a leading middle-market provider of risk, benefits, wealth and retirement plan advisory solutions, for enterprise value of $13.0 billion. Accretion and free cash flow benefit realization now expected a year earlier than modeled at announcement Repurchased 0.8 million class A ordinary shares for approximately $250 million Published our 2023 Impact Report, highlighting progress against our long-term commitments and solutions for clients Subsequent to the close of the quarter, announced a 10% increase to the quarterly cash dividend DUBLIN, April 26, 2024 /PRNewswire/ -- April 26, 2024 - Aon plc (NYSE:AON) today reported results for the three months ended March 31, 2024. Net income attributable to Aon shareholders increased 6% to $5.35 per share on a diluted basis, compared to $5.07 per share on a diluted basis, in the prior year period. Net income per share attributable to Aon shareholders, adjusted for certain items, increased 9% to $5.66 on a diluted basis, including a favorable impact of $0.02 per share if prior year period results were translated at current period foreign exchange rates ("foreign currency translation"), compared to $5.17 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, Operating Margin and Diluted Earnings Per Share" on page 10 of this press release. "Our global team delivered strong operating results in the first quarter, including 5% organic revenue growth, 100 basis points of adjusted operating margin improvement, and 9% adjusted EPS growth" said Greg Case, Chief Executive Officer. "We're delighted to welcome NFP to Aon and look forward to working together to help clients address increasing volatility across risk and people issues, enabled by Aon Business Services. With this earlier-than-expected close, we're moving even faster to address client demand, create more opportunities for our 60,000 colleagues, strengthen the long-term free cash flow profile of the firm, and enhance long-term shareholder value creation." FIRST QUARTER 2024 FINANCIAL SUMMARY Total revenue in the first quarter increased 5% to $4.1 billion compared to the prior year period, reflecting 5% organic revenue growth, 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 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. Foreign currency translation in the first quarter had a $4 million, or $0.02 per share, favorable impact on U.S. GAAP net income and a $4 million, or $0.02 per share, favorable impact on adjusted net income. If currency were to remain stable at today's rates, the Company would expect an unfavorable impact of approximately $0.05 per share, or an approximately $15 million decrease in adjusted operating income, in the second quarter of 2024, and an unfavorable impact of approximately $0.03 per share, or an approximately $9 million decrease in adjusted operating income for full year 2024. Effective tax rate was 23.2% in the first quarter compared to 19.6% in the prior year period. After adjusting to exclude the applicable tax impact associated with certain non-GAAP adjustments, the adjusted effective tax rate for the first quarter of 2024 was 22.6% compared to 19.6% in the prior year period. The primary drivers of the change in the adjusted effective tax rate were the changes in the geographical distribution of income and a net unfavorable impact from discrete items. Weighted average diluted shares outstanding decreased to 200.1 million in the first quarter compared to 207.1 million in the prior year period. The Company repurchased 0.8 million class A ordinary shares for approximately $250 million in the first quarter. As of March 31, 2024, the Company had approximately $3.1 billion of remaining authorization under its share repurchase program. YEAR TO DATE 2024 CASH FLOW SUMMARY Cash flows provided by operations for the first three months of 2024 decreased $134 million to $309 million compared to 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. Free cash flow, defined as cash flows from operations less capital expenditures, decreased 29%, to $261 million for the first three months of 2024 compared to the prior year period, reflecting a decrease in cash flows provided by operations and a $28 million decrease in capital expenditures compared to the prior year period, which was elevated due to the timing of projects and investments within the year. FIRST QUARTER 2024 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) 2024 2023 % Change Less: Currency Impact Less: Fiduciary Investment Income Less: Acquisitions, Divestitures & Other Items Organic Revenue Growth 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 %   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 organic revenue growth of 3% reflects 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 organic revenue growth of 7% reflects 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 organic revenue growth of 6% reflects 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 organic revenue growth of 4% reflects 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. FIRST QUARTER 2024 EXPENSE REVIEW Three Months Ended March 31, (millions) 2024 2023 $ Change % Change Expenses Compensation and benefits $             1,883 $             1,792 $               91 5 % Information technology 124 139 (15) (11) Premises 71 75 (4) (5) Depreciation of fixed assets 44 38 6 16 Amortization and impairment of intangible assets 16 25 (9) (36) Other general expense 348 329 19 6 Accelerating Aon United Program expenses 119 — 119 100 Total operating expenses $             2,605 $             2,398 $             207 9 %   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 expense 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 expense decreased $4 million, or 5%, compared to the prior year period, reflecting a reduction to our real estate footprint. Depreciation of fixed assets increased $6 million, or 16%, 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 decreased $9 million, or 36%, 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 increased $19 million, or 6%, 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 were $119 million, relating to workforce optimization, asset impairments, and technology and other costs. FIRST QUARTER 2024 INCOME SUMMARY Certain noteworthy items impacted adjusted operating income and adjusted operating margin in the first quarters of 2024 and 2023, which are also described in detail in "Reconciliation of Non-GAAP Measures - Operating Income, Operating Margin and Diluted Earnings Per Share" on page 10 of this press release. Three Months Ended March 31, (millions) 2024 2023 % Change Revenue $         4,070 $         3,871 5 % Expenses 2,605 2,398 9 % Operating income $         1,465 $         1,473 (1) % Operating margin 36.0 % 38.1 % Operating income - as adjusted $         1,615 $         1,498 8 % Operating margin - as adjusted 39.7 % 38.7 %   Operating income decreased $8 million, or 1%, and operating margin decreased 210 basis points to 36.0%, each compared to the prior year period. Operating income, adjusted for certain items detailed on page 10 of this press release, increased $117 million, or 8%, and operating margin, adjusted for certain items, increased 100 basis points to 39.7%, each compared to 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. 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 increased $33 million to $144 million 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 was $75 million compared to Other expense of $25 million in the prior year period primarily related to deferred consideration from the 2017 sale of our outsourcing business. Other expense - as adjusted decreased $18 million compared to the prior year period primarily due to the favorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies and a decrease in non-cash net periodic pension cost. Net income attributable to Aon shareholders increased 2% to $1.1 billion compared to the prior year period. Net income attributable to Aon shareholders, adjusted for certain items, increased 6% to $1.1 billion compared to the prior year period. Conference Call, Presentation Slides, and Webcast Details The Company will host a conference call on Friday, April 26, 2024 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 AonAon plc (NYSE:AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries and sovereignties with the clarity and confidence to make better risk and people decisions that help protect and grow their businesses.  Follow Aon on LinkedIn, X, Facebook, and Instagram. Stay up-to-date by visiting the Aon Newsroom and sign up for News Alerts. Safe Harbor StatementThis communication contains certain statements related to future results, or states Aon's intentions, beliefs and expectations or predictions for the future, all of 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. 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, market and industry conditions, including competitive and pricing trends, the development and performance of our services and products, our cost structure and the outcome of cost-saving or restructuring initiatives, including  the impacts of the Accelerating Aon United Program, the integration of NFP, actual or anticipated legal settlement expenses, future capital expenditures, growth in commissions and fees, changes to the composition or level of its revenues, cash flow and liquidity, expected tax rates, expected foreign currency translation impacts, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of its business and operations, plans, references to future successes, and expectations with respect to the benefits of the acquisition of NFP are forward-looking statements. Also, when Aon uses words such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "looking forward", "may", "might", "plan", "potential", "opportunity", "commit", "probably", "project", "should", "will", "would" or similar expressions, it is making forward-looking statements. The following factors, among others, could cause actual results to ...