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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 June 30, 2019
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)

ENGLAND AND WALES |  | 98-1030901
(State or Other Jurisdiction of |  | (I.R.S. Employer
Incorporation or Organization) |  | Identification No.)

122 LEADENHALL STREET | , | LONDON | , | ENGLAND |  | EC3V 4AN
(Address of Principal Executive Offices) |  | (Zip Code)

+44 20 7623 5500
(Registrant’s Telephone Number,
Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ |  | Accelerated filer | ☐ |
Non-accelerated filer | ☐ |  | Smaller reporting company | ☐ |
|  |  | Emerging growth company | ☐ |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of Class A Ordinary Shares of Aon plc, $0.01 nominal value, outstanding as of July 25, 2019: 235,841,886

Table of Contents

PART I
| Item 1. Financial Statements
| Aon plc Condensed Consolidated Statements of Income
| Aon plc Condensed Consolidated Statements of Comprehensive Income
| Aon plc Condensed Consolidated Statements of Financial Position
| Aon plc Condensed Consolidated Statements of Shareholders’ Equity
| Aon plc Condensed Consolidated Statements of Cash Flows
| Notes to Condensed Consolidated Financial Statements
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
| Item 3. Quantitative and Qualitative Disclosures about Market Risk
| Item 4. Controls and Procedures
PART II
| Item 1. Legal Proceedings
| Item 1A. Risk Factors
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
| Item 3. Defaults Upon Senior Securities
| Item 4. Mine Safety Disclosures
| Item 5. Other Information
| Item 6. Exhibits
| Signature
| Exhibit Index

Part I Financial Information
Item 1. Financial Statements
Aon plc
Condensed Consolidated Statements of Income
(Unaudited)

|  | Three Months Ended |  | Six Months Ended
(millions, except per share data) |  | June 30, 2019 |  | June 30, 2018 |  | June 30, 2019 |  | June 30, 2018
Revenue |  |  |  |  |  |  |  |  |  |
Total revenue |  | $ | 2,606 |  |  | $ | 2,561 |  |  | $ | 5,749 |  |  | $ | 5,651 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | 1,501 |  |  | 1,494 |  |  | 3,085 |  |  | 3,110 |
Information technology |  | 126 |  |  | 123 |  |  | 243 |  |  | 238 |
Premises |  | 85 |  |  | 96 |  |  | 172 |  |  | 189 |
Depreciation of fixed assets |  | 40 |  |  | 47 |  |  | 80 |  |  | 86 |
Amortization and impairment of intangible assets |  | 97 |  |  | 282 |  |  | 194 |  |  | 392 |
Other general expenses |  | 344 |  |  | 535 |  |  | 690 |  |  | 853 |
Total operating expenses |  | 2,193 |  |  | 2,577 |  |  | 4,464 |  |  | 4,868 |
Operating income (loss) |  | 413 |  |  | (16 | ) |  | 1,285 |  |  | 783 |
Interest income |  | 1 |  |  | 1 |  |  | 3 |  |  | 5 |
Interest expense |  | (77 | ) |  | (69 | ) |  | (149 | ) |  | (139 | )
Other income (expense) |  | 6 |  |  | (3 | ) |  | 6 |  |  | (18 | )
Income (loss) from continuing operations before income taxes |  | 343 |  |  | (87 | ) |  | 1,145 |  |  | 631 |
Income tax expense (benefit) |  | 56 |  |  | (144 | ) |  | 182 |  |  | (30 | )
Net income from continuing operations |  | 287 |  |  | 57 |  |  | 963 |  |  | 661 |
Net income from discontinued operations |  | — |  |  | 1 |  |  | — |  |  | 7 |
Net income |  | 287 |  |  | 58 |  |  | 963 |  |  | 668 |
Less: Net income attributable to noncontrolling interests |  | 10 |  |  | 10 |  |  | 27 |  |  | 26 |
Net income attributable to Aon shareholders |  | $ | 277 |  |  | $ | 48 |  |  | $ | 936 |  |  | $ | 642 |
Basic net income per share attributable to Aon shareholders |  |  |  |  |  |  |  |
Continuing operations |  | $ | 1.15 |  |  | $ | 0.19 |  |  | $ | 3.88 |  |  | $ | 2.57 |
Discontinued operations |  | — |  |  | 0.01 |  |  | — |  |  | 0.03 |
Net income |  | $ | 1.15 |  |  | $ | 0.20 |  |  | $ | 3.88 |  |  | $ | 2.60 |
Diluted net income per share attributable to Aon shareholders |  |  |  |  |  |  |  |
Continuing operations |  | $ | 1.14 |  |  | $ | 0.19 |  |  | $ | 3.85 |  |  | $ | 2.55 |
Discontinued operations |  | — |  |  | — |  |  | — |  |  | 0.03 |
Net income |  | $ | 1.14 |  |  | $ | 0.19 |  |  | $ | 3.85 |  |  | $ | 2.58 |
Weighted average ordinary shares outstanding - basic |  | 240.6 |  |  | 246.0 |  |  | 241.4 |  |  | 247.2 |
Weighted average ordinary shares outstanding - diluted |  | 242.8 |  |  | 247.4 |  |  | 243.2 |  |  | 248.8 |

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
2

Aon plc
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)

|  | Three Months Ended |  | Six Months Ended
(millions) |  | June 30, 2019 |  | June 30, 2018 |  | June 30, 2019 |  | June 30, 2018
Net income |  | $ | 287 |  |  | $ | 58 |  |  | $ | 963 |  |  | $ | 668 |
Less: Net income attributable to noncontrolling interests |  | 10 |  |  | 10 |  |  | 27 |  |  | 26 |
Net income attributable to Aon shareholders |  | 277 |  |  | 48 |  |  | 936 |  |  | 642 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |  |  |
Change in fair value of financial instruments |  | (8 | ) |  | (1 | ) |  | (1 | ) |  | 13 |
Foreign currency translation adjustments |  | (103 | ) |  | (460 | ) |  | 30 |  |  | (213 | )
Postretirement benefit obligation |  | 14 |  |  | 122 |  |  | 45 |  |  | 170 |
Total other comprehensive income (loss) |  | (97 | ) |  | (339 | ) |  | 74 |  |  | (30 | )
Less: Other comprehensive income (loss) attributable to noncontrolling interests |  | — |  |  | (6 | ) |  | 2 |  |  | (3 | )
Total other comprehensive income (loss) attributable to Aon shareholders |  | (97 | ) |  | (333 | ) |  | 72 |  |  | (27 | )
Comprehensive income (loss) attributable to Aon shareholders |  | $ | 180 |  |  | $ | (285 | ) |  | $ | 1,008 |  |  | $ | 615 |

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
3

Aon plc
Condensed Consolidated Statements of Financial Position

|  | (Unaudited) |  |
(millions, except nominal value) |  | June 30, 2019 |  | December 31, 2018
Assets |  |  |  |  |  |
Current assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 581 |  |  | $ | 656 |
Short-term investments |  | 235 |  |  | 172 |
Receivables, net |  | 3,227 |  |  | 2,760 |
Fiduciary assets |  | 12,071 |  |  | 10,166 |
Other current assets |  | 631 |  |  | 618 |
Total current assets |  | 16,745 |  |  | 14,372 |
Goodwill |  | 8,198 |  |  | 8,171 |
Intangible assets, net |  | 973 |  |  | 1,149 |
Fixed assets, net |  | 599 |  |  | 588 |
Operating lease right-of-use assets |  | 959 |  |  | — |
Deferred tax assets |  | 599 |  |  | 561 |
Prepaid pension |  | 1,213 |  |  | 1,133 |
Other non-current assets |  | 521 |  |  | 448 |
Total assets |  | $ | 29,807 |  |  | $ | 26,422 |
Liabilities and equity |  |  |  |  |  |
Liabilities |  |  |  |  |  |
Current liabilities |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 1,369 |  |  | $ | 1,943 |
Short-term debt and current portion of long-term debt |  | 844 |  |  | 251 |
Fiduciary liabilities |  | 12,071 |  |  | 10,166 |
Other current liabilities |  | 1,197 |  |  | 936 |
Total current liabilities |  | 15,481 |  |  | 13,296 |
Long-term debt |  | 6,740 |  |  | 5,993 |
Non-current operating lease liabilities |  | 962 |  |  | — |
Deferred tax liabilities |  | 211 |  |  | 181 |
Pension, other postretirement, and postemployment liabilities |  | 1,576 |  |  | 1,636 |
Other non-current liabilities |  | 924 |  |  | 1,097 |
Total liabilities |  | 25,894 |  |  | 22,203 |
Equity |  |  |  |  |  |
Ordinary shares - $0.01 nominal value Authorized: 750 shares (issued: 2019 - 235.7; 2018 - 240.1) |  | 2 |  |  | 2 |
Additional paid-in capital |  | 6,002 |  |  | 5,965 |
Retained earnings |  | 1,669 |  |  | 2,093 |
Accumulated other comprehensive loss |  | (3,837 | ) |  | (3,909 | )
Total Aon shareholders' equity |  | 3,836 |  |  | 4,151 |
Noncontrolling interests |  | 77 |  |  | 68 |
Total equity |  | 3,913 |  |  | 4,219 |
Total liabilities and equity |  | $ | 29,807 |  |  | $ | 26,422 |

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
4

Aon plc
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)

(millions) |  | Shares |  | Ordinary Shares and Additional Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Loss, Net of Tax |  | Non- controlling Interests |  | Total
Balance at January 1, 2019 |  | 240.1 |  |  | $ | 5,967 |  |  | $ | 2,093 |  |  | $ | (3,909 | ) |  | $ | 68 |  |  | $ | 4,219 |
Net income |  | — |  |  | — |  |  | 659 |  |  | — |  |  | 17 |  |  | 676 |
Shares issued - employee stock compensation plans |  | 1.4 |  |  | (96 | ) |  | — |  |  | — |  |  | — |  |  | (96 | )
Shares purchased |  | (0.6 | ) |  | — |  |  | (101 | ) |  | — |  |  | — |  |  | (101 | )
Share-based compensation expense |  | — |  |  | 89 |  |  | — |  |  | — |  |  | — |  |  | 89 |
Dividends to shareholders ($0.40 per share) |  | — |  |  | — |  |  | (96 | ) |  | — |  |  | — |  |  | (96 | )
Net change in fair value of financial instruments |  | — |  |  | — |  |  | — |  |  | 7 |  |  | — |  |  | 7 |
Net foreign currency translation adjustments |  | — |  |  | — |  |  | — |  |  | 131 |  |  | 2 |  |  | 133 |
Net postretirement benefit obligation |  | — |  |  | — |  |  | — |  |  | 31 |  |  | — |  |  | 31 |
Balance at March 31, 2019 |  | 240.9 |  |  | 5,960 |  |  | 2,555 |  |  | (3,740 | ) |  | 87 |  |  | 4,862 |
Net income |  | — |  |  | — |  |  | 277 |  |  | — |  |  | 10 |  |  | 287 |
Shares issued - employee stock compensation plans |  | 0.6 |  |  | (47 | ) |  | — |  |  | — |  |  | — |  |  | (47 | )
Shares purchased |  | (5.8 | ) |  | — |  |  | (1,056 | ) |  | — |  |  | — |  |  | (1,056 | )
Share-based compensation expense |  | — |  |  | 91 |  |  | — |  |  | — |  |  | — |  |  | 91 |
Dividends to shareholders ($0.44 per share) |  | — |  |  | — |  |  | (107 | ) |  | — |  |  | — |  |  | (107 | )
Net change in fair value of financial instruments |  | — |  |  | — |  |  | — |  |  | (8 | ) |  | — |  |  | (8 | )
Net foreign currency translation adjustments |  | — |  |  | — |  |  | — |  |  | (103 | ) |  | — |  |  | (103 | )
Net postretirement benefit obligation |  | — |  |  | — |  |  | — |  |  | 14 |  |  | — |  |  | 14 |
Dividends paid to noncontrolling interests on subsidiary common stock |  | — |  |  | — |  |  | — |  |  | — |  |  | (20 | ) |  | (20 | )
Balance at June 30, 2019 |  | 235.7 |  |  | $ | 6,004 |  |  | $ | 1,669 |  |  | $ | (3,837 | ) |  | $ | 77 |  |  | $ | 3,913 |

5

Aon plc
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)

(millions) |  | Shares |  | Ordinary Shares and Additional Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Loss, Net of Tax |  | Non- controlling Interests |  | Total
Balance at January 1, 2018 |  | 247.6 |  |  | $ | 5,777 |  |  | $ | 2,795 |  |  | $ | (3,497 | ) |  | $ | 65 |  |  | $ | 5,140 |
Net income |  | — |  |  | — |  |  | 594 |  |  | — |  |  | 16 |  |  | 610 |
Shares issued - employee stock compensation plans |  | 1.5 |  |  | (109 | ) |  | — |  |  | — |  |  | — |  |  | (109 | )
Shares purchased |  | (3.9 | ) |  | — |  |  | (553 | ) |  | — |  |  | — |  |  | (553 | )
Share-based compensation expense |  | — |  |  | 77 |  |  | — |  |  | — |  |  | — |  |  | 77 |
Dividends to shareholders ($0.36 per share) |  | — |  |  | — |  |  | (89 | ) |  | — |  |  | — |  |  | (89 | )
Net change in fair value of financial instruments |  | — |  |  | — |  |  | — |  |  | 14 |  |  | — |  |  | 14 |
Net foreign currency translation adjustments |  | — |  |  | — |  |  | — |  |  | 244 |  |  | 3 |  |  | 247 |
Net postretirement benefit obligation |  | — |  |  | — |  |  | — |  |  | 48 |  |  | — |  |  | 48 |
Balance at March 31, 2018 |  | 245.2 |  |  | 5,745 |  |  | 2,747 |  |  | (3,191 | ) |  | 84 |  |  | 5,385 |
Net income |  | — |  |  | — |  |  | 48 |  |  | — |  |  | 10 |  |  | 58 |
Shares issued - employee stock compensation plans |  | 0.6 |  |  | (41 | ) |  | — |  |  | — |  |  | — |  |  | (41 | )
Shares purchased |  | (2.8 | ) |  | — |  |  | (402 | ) |  | — |  |  | — |  |  | (402 | )
Share-based compensation expense |  | — |  |  | 70 |  |  | — |  |  | — |  |  | — |  |  | 70 |
Dividends to shareholders ($0.40 per share) |  | — |  |  | — |  |  | (98 | ) |  | — |  |  | — |  |  | (98 | )
Net change in fair value of financial instruments |  | — |  |  | — |  |  | — |  |  | (1 | ) |  | — |  |  | (1 | )
Net foreign currency translation adjustments |  | — |  |  | — |  |  | — |  |  | (454 | ) |  | (6 | ) |  | (460 | )
Net postretirement benefit obligation |  | — |  |  | — |  |  | — |  |  | 122 |  |  | — |  |  | 122 |
Purchases of shares from noncontrolling interests |  | — |  |  | — |  |  | — |  |  | — |  |  | (1 | ) |  | (1 | )
Dividends paid to noncontrolling interests on subsidiary common stock |  | — |  |  | — |  |  | — |  |  | — |  |  | (14 | ) |  | (14 | )
Balance at June 30, 2018 |  | 243.0 |  |  | $ | 5,774 |  |  | $ | 2,295 |  |  | $ | (3,524 | ) |  | $ | 73 |  |  | $ | 4,618 |

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
6

Aon plc
Condensed Consolidated Statements of Cash Flows
(Unaudited)

|  | Six Months Ended
(millions) |  | June 30, 2019 |  | June 30, 2018
Cash flows from operating activities |  |  |  |  |  |
Net income |  | $ | 963 |  |  | $ | 668 |
Less: Net income from discontinued operations |  | — |  |  | 7 |
Adjustments to reconcile net income to cash provided by operating activities: |  |  |  |  |  |
(Gain) loss from sales of businesses, net |  | (7 | ) |  | 1 |
Depreciation of fixed assets |  | 80 |  |  | 86 |
Amortization and impairment of intangible assets |  | 194 |  |  | 392 |
Share-based compensation expense |  | 180 |  |  | 147 |
Deferred income taxes |  | (25 | ) |  | (93 | )
Change in assets and liabilities: |  |  |  |  |  |
Fiduciary receivables |  | (926 | ) |  | (883 | )
Short-term investments — funds held on behalf of clients |  | (961 | ) |  | (154 | )
Fiduciary liabilities |  | 1,887 |  |  | 1,037 |
Receivables, net |  | (477 | ) |  | (371 | )
Accounts payable and accrued liabilities |  | (579 | ) |  | (495 | )
Restructuring reserves |  | (18 | ) |  | 12 |
Current income taxes |  | 10 |  |  | (144 | )
Pension, other postretirement and postemployment liabilities |  | (92 | ) |  | (84 | )
Other assets and liabilities |  | 132 |  |  | 301 |
Cash provided by operating activities |  | 361 |  |  | 413 |
Cash flows from investing activities |  |  |  |  |  |
Proceeds from investments |  | 14 |  |  | 23 |
Payments for investments |  | (60 | ) |  | (36 | )
Net sales (purchases) of short-term investments — non-fiduciary |  | (62 | ) |  | 352 |
Acquisition of businesses, net of cash acquired |  | (15 | ) |  | (50 | )
Sale of businesses, net of cash sold |  | 7 |  |  | 1 |
Capital expenditures |  | (106 | ) |  | (111 | )
Cash provided by (used for) investing activities |  | (222 | ) |  | 179 |
Cash flows from financing activities |  |  |  |  |  |
Share repurchase |  | (1,155 | ) |  | (971 | )
Issuance of shares for employee benefit plans |  | (144 | ) |  | (150 | )
Issuance of debt |  | 3,559 |  |  | 2,552 |
Repayment of debt |  | (2,228 | ) |  | (2,027 | )
Cash dividends to shareholders |  | (203 | ) |  | (187 | )
Noncontrolling interests and other financing activities |  | (61 | ) |  | (15 | )
Cash used for financing activities |  | (232 | ) |  | (798 | )
Effect of exchange rates on cash and cash equivalents |  | 18 |  |  | (63 | )
Net decrease in cash and cash equivalents |  | (75 | ) |  | (269 | )
Cash and cash equivalents at beginning of period |  | 656 |  |  | 756 |
Cash and cash equivalents at end of period |  | $ | 581 |  |  | $ | 487 |
Supplemental disclosures: |  |  |  |  |  |
Interest paid |  | $ | 147 |  |  | $ | 145 |
Income taxes paid, net of refunds |  | $ | 197 |  |  | $ | 207 |

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
7

Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements and Notes thereto (the “Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Financial Statements include the accounts of Aon plc and all of its controlled subsidiaries (“Aon” or the “Company”). Intercompany accounts and transactions have been eliminated. The Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for all periods presented.
Certain information and disclosures normally included in the Financial Statements prepared in accordance with U.S. GAAP have been condensed or omitted. These Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The results for the three and six months ended June 30, 2019 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2019.
Use of Estimates
The preparation of the accompanying Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the Financial Statements in future periods.
2. Accounting Principles and Practices
Adoption of New Accounting Standards
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
In February 2018, the FASB issued new accounting guidance related to reclassification of certain tax effects from accumulated other comprehensive income. The guidance allowed a reclassification from accumulated comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The guidance was effective for the Company in the first quarter of 2019. For the three and six months ended June 30, 2019, there was no impact on the net income of the Company as Aon did not elect to reclassify stranded tax effects on the Condensed Consolidated Statement of Financial Position. It is the Company’s policy to release income tax effects from accumulated other comprehensive loss using the portfolio approach.
Targeted Improvements to Accounting for Hedging Activities
In August 2017, the FASB issued new accounting guidance on targeted improvements to accounting for hedging activities. The new guidance amended its hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The guidance eliminated the requirement to separately measure and report hedge ineffectiveness and required the effect of a hedging instrument to be presented in the same income statement line as the hedged item. The new guidance was effective for Aon in the first quarter of 2019 and the Company adopted it on a modified retrospective basis with no cumulative effect adjustment to accumulated other comprehensive income or corresponding adjustment to Retained earnings. Changes to the Condensed Consolidated Statement of Income and financial statement disclosures were applied prospectively. Under the new guidance, gains or losses on certain derivative hedging instruments are recognized in revenue, as opposed to other income (expense) under the previous guidance. For the three and six months ended June 30, 2019, the adoption of this guidance had no impact on the net income and an insignificant impact on the operating income of the Company.
Leases
In February 2016, the FASB issued a new accounting standard on leases, which requires lessees to recognize assets and liabilities for most leases. Under the new standard, a lessee is required to recognize in the Consolidated Statements of Financial Position, liabilities to make future lease payments and right-of-use (“ROU”) assets representing its right to use the underlying assets for the lease term. The recognition, measurement, timing, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous U.S. GAAP.
8

The Company adopted the new standard as of January 1, 2019, using the modified retrospective approach for all leases existing at, or entered into after, the period of adoption. Under this approach, prior periods were not restated. Rather, lease balances and other disclosures for prior periods were provided in the notes to the financial statements as previously reported, and the cumulative effect of initially applying the guidance was recognized in the Condensed Consolidated Statement of Financial Position.
The modified retrospective approach includes several optional practical expedients available that entities may elect to apply upon transition. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allows a lessee to carryforward their population of existing leases, the classification of each lease, as well as the treatment of initial direct costs as of the period of adoption. In addition, the Company elected the practical expedient related to lease and non-lease components, as an accounting policy election for all asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component. Lastly, the Company did not elect the practical expedient related to hindsight analysis which allows a lessee to use hindsight in determining the lease term and in assessing impairment of the entity’s ROU assets.
The Company has made a policy election to not recognize ROU assets and lease liabilities that arise from leases with an initial term of twelve months or less on the Condensed Consolidated Statements of Financial Position. However, the Company will recognize these lease payments in the Condensed Consolidated Statements of Income on a straight-line basis over the lease term and variable lease payments in the period in which the obligation is incurred. The Company has chosen to apply this accounting policy across all classes of underlying assets. Additionally, upon adoption, the Company utilized a discount rate to determine the present value of the lease payments based on information available as of January 1, 2019.
Beginning January 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. Upon adoption, the Company recognized ROU assets and lease liabilities of $1.1 billion and $1.3 billion, respectively. The standard had an insignificant impact on the Condensed Consolidated Statements of Income and no impact on the Condensed Consolidated Statements of Cash Flows. Refer to Note 20 “Lease Commitments” for further information including significant assumptions and judgments made.
As a result of applying the modified retrospective approach to adopt the new leasing standard, the following adjustments were made to the Condensed Consolidated Statements of Financial Position as of January 1, 2019 (in millions):

| December 31, 2018 |  |  |  | January 1, 2019
| As Reported |  | Adjustments |  | As Adjusted
Assets |  |  |  |  |
Operating lease right-of-use assets | $ | — |  |  | $ | 1,021 |  |  | $ | 1,021 |
Other non-current assets | $ | 448 |  |  | $ | 78 |  |  | $ | 526 |
Liabilities |  |  |  |  |
Other current liabilities | $ | 936 |  |  | $ | 219 |  |  | $ | 1,155 |
Non-current operating lease liabilities | $ | — |  |  | $ | 1,014 |  |  | $ | 1,014 |
Other non-current liabilities | $ | 1,097 |  |  | $ | (134 | ) |  | $ | 963 |

Accounting Standards Issued But Not Yet Adopted
Changes to the Disclosure Requirements for Defined Benefit Plans
In August 2018, the FASB issued new accounting guidance related to the disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans. The guidance requires sponsors of these plans to provide additional disclosures, including weighted average interest rates used in the entity’s cash balance pension plans and a narrative description of reasons for any significant gains or losses impacting the benefit obligation for the period, and eliminates certain previous disclosure requirements. The new guidance is effective for Aon in the first quarter of 2021 with early adoption permitted and will be applied retrospectively. The Company is currently evaluating the impact that the guidance will have on the Financial Statements and the period of adoption.
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Simplifying the Test for Goodwill Impairment
In January 2017, the FASB issued new accounting guidance on simplifying the test for goodwill impairment. Currently the standard requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. The new guidance removes Step 2. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. An entity will apply the new guidance on a prospective basis. The new guidance is effective for Aon in the first quarter of 2020 and early adoption is permitted. The Company is currently evaluating the period of adoption, but does not expect a significant impact on the Financial Statements.
Credit Losses
In June 2016, the FASB issued a new accounting standard on the measurement of credit losses on financial instruments. The new standard replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. An entity will apply the new standard through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the standard is effective. The new standard is effective for Aon in the first quarter of 2020 with early adoption permitted. The Company is currently evaluating the impact that the standard will have on the Financial Statements and will adopt the new accounting standard in the first quarter of 2020.
3. Revenue from Contracts with Customers
Disaggregation of Revenue
The following table summarizes revenue from contracts with customers by principal service line (in millions):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Commercial Risk Solutions |  | $ | 1,167 |  |  | $ | 1,166 |  |  | $ | 2,285 |  |  | $ | 2,350 |
Reinsurance Solutions |  | 420 |  |  | 380 |  |  | 1,208 |  |  | 1,122 |
Retirement Solutions |  | 419 |  |  | 431 |  |  | 839 |  |  | 855 |
Health Solutions |  | 317 |  |  | 309 |  |  | 803 |  |  | 760 |
Data & Analytic Services |  | 286 |  |  | 277 |  |  | 622 |  |  | 571 |
Elimination |  | (3 | ) |  | (2 | ) |  | (8 | ) |  | (7 | )
Total revenue |  | $ | 2,606 |  |  | $ | 2,561 |  |  | $ | 5,749 |  |  | $ | 5,651 |

Consolidated revenue from contracts with customers by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
United States |  | $ | 1,146 |  |  | $ | 1,125 |  |  | $ | 2,307 |  |  | $ | 2,241 |
Americas other than United States |  | 241 |  |  | 243 |  |  | 467 |  |  | 480 |
United Kingdom |  | 400 |  |  | 413 |  |  | 852 |  |  | 897 |
Europe, Middle East, & Africa other than United Kingdom |  | 501 |  |  | 493 |  |  | 1,510 |  |  | 1,472 |
Asia Pacific |  | 318 |  |  | 287 |  |  | 613 |  |  | 561 |
Total revenue |  | $ | 2,606 |  |  | $ | 2,561 |  |  | $ | 5,749 |  |  | $ | 5,651 |

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Contract Costs
An analysis of the changes in the net carrying amount of costs to fulfill contracts with customers are as follows (in millions):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Balance at beginning of period |  | $ | 236 |  |  | $ | 240 |  |  | $ | 329 |  |  | $ | 298 |
Additions |  | 336 |  |  | 341 |  |  | 682 |  |  | 711 |
Amortization |  | (357 | ) |  | (353 | ) |  | (796 | ) |  | (785 | )
Impairment |  | — |  |  | — |  |  | — |  |  | — |
Foreign currency translation and other |  | 1 |  |  | (12 | ) |  | 1 |  |  | (8 | )
Balance at end of period |  | $ | 216 |  |  | $ | 216 |  |  | $ | 216 |  |  | $ | 216 |

An analysis of the changes in the net carrying amount of costs to obtain contracts with customers are as follows (in millions):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Balance at beginning of period |  | $ | 155 |  |  | $ | 144 |  |  | $ | 156 |  |  | $ | 145 |
Additions |  | 17 |  |  | 13 |  |  | 26 |  |  | 21 |
Amortization |  | (11 | ) |  | (11 | ) |  | (22 | ) |  | (21 | )
Impairment |  | — |  |  | — |  |  | — |  |  | — |
Foreign currency translation and other |  | — |  |  | (2 | ) |  | 1 |  |  | (1 | )
Balance at end of period |  | $ | 161 |  |  | $ | 144 |  |  | $ | 161 |  |  | $ | 144 |

4. Cash and Cash Equivalents and Short-term Investments
Cash and cash equivalents include cash balances and all highly liquid instruments with initial maturities of three months or less. Short-term investments consist of money market funds. The estimated fair value of cash and cash equivalents and short-term investments approximates their carrying values.
At June 30, 2019, Cash and cash equivalents and Short-term investments were $816 million compared to $828 million at December 31, 2018, a decrease of $12 million. Of the total balances, $99 million and $91 million were restricted as to their use at June 30, 2019 and December 31, 2018, respectively. Included within Short-term investments as of June 30, 2019 and December 31, 2018 were £42.8 million ($54.3 million at June 30, 2019 exchange rates) and £42.7 million ($53.9 million at December 31, 2018 exchange rates), respectively, of operating funds required to be held by the Company in the United Kingdom (the “U.K.”) by the Financial Conduct Authority (the “FCA”), a U.K.-based regulator.
5. Other Financial Data
Condensed Consolidated Statements of Income Information
Other Income (Expense)
Other income (expense) consists of the following (in millions):

| Three Months Ended June 30 |  | Six Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Foreign currency remeasurement | $ | 11 |  |  | $ | 29 |  |  | $ | — |  |  | $ | 13 |
Disposal of businesses | 2 |  |  | — |  |  | 7 |  |  | (1 | )
Pension and other postretirement | 5 |  |  | (7 | ) |  | 9 |  |  | (5 | )
Equity earnings | 1 |  |  | 1 |  |  | 2 |  |  | 2 |
Financial instruments | (13 | ) |  | (27 | ) |  | (12 | ) |  | (27 | )
Other | — |  |  | 1 |  |  | — |  |  | — |
Total | $ | 6 |  |  | $ | (3 | ) |  | $ | 6 |  |  | $ | (18 | )

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Condensed Consolidated Statements of Financial Position Information
Allowance for Doubtful Accounts
An analysis of the allowance for doubtful accounts are as follows (in millions):

| Three Months Ended June 30 |  | Six Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Balance at beginning of period | $ | 64 |  |  | $ | 65 |  |  | $ | 64 |  |  | $ | 59 |
Provision charged to Other general expenses | 4 |  |  | 3 |  |  | 12 |  |  | 11 |
Accounts written off, net of recoveries | (3 | ) |  | (6 | ) |  | (11 | ) |  | (8 | )
Balance at end of period | $ | 65 |  |  | $ | 62 |  |  | $ | 65 |  |  | $ | 62 |

Other Current Assets
The components of Other current assets are as follows (in millions):

As of | June 30, 2019 |  | December 31, 2018
Costs to fulfill contracts with customers (1) | $ | 216 |  |  | $ | 329 |
Prepaid expenses | 128 |  |  | 97 |
Taxes receivable | 145 |  |  | 113 |
Other (2) | 142 |  |  | 79 |
Total | $ | 631 |  |  | $ | 618 |

(1) | Refer to Note 3 “Revenue from Contracts with Customers” for further information.

(2) | December 31, 2018 includes $12 million previously classified as “Receivables from the Divested Business”.

Other Non-Current Assets
The components of Other non-current assets are as follows (in millions):

As of | June 30, 2019 |  | December 31, 2018
Costs to obtain contracts with customers (1) | $ | 161 |  |  | $ | 156 |
Taxes receivable | 100 |  |  | 100 |
Leases (2) | 65 |  |  | — |
Investments | 54 |  |  | 54 |
Other | 141 |  |  | 138 |
Total | $ | 521 |  |  | $ | 448 |

(1) | Refer to Note 3 “Revenue from Contracts with Customers” for further information.

(2) | Refer to Note 20 “Lease Commitments” for further information.

Other Current Liabilities
The components of Other current liabilities are as follows (in millions):

As of | June 30, 2019 |  | December 31, 2018
Deferred revenue (1) | $ | 337 |  |  | $ | 251 |
Leases (2) | 223 |  |  | — |
Taxes payable | 133 |  |  | 83 |
Other | 504 |  |  | 602 |
Total | $ | 1,197 |  |  | $ | 936 |

(1) | During the three and six months ended June 30, 2019, $95 million and $241 million, respectively, was recognized in the Condensed Consolidated Statements of Income. During the three and six months ended June 30, 2018, $115 million and $215 million, respectively, was recognized in the Condensed Consolidated Statements of Income.

(2) | Refer to Note 20 “Lease Commitments” for further information.

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Other Non-Current Liabilities
The components of Other non-current liabilities are as follows (in millions):

As of | June 30, 2019 |  | December 31, 2018
Taxes payable (1) | $ | 576 |  |  | $ | 585 |
Leases | 37 |  |  | 169 |
Deferred revenue | 59 |  |  | 65 |
Compensation and benefits | 49 |  |  | 56 |
Other | 203 |  |  | 222 |
Total | $ | 924 |  |  | $ | 1,097 |

(1) Includes $221 million and $240 million for the non-current portion of the one-time mandatory transition tax on accumulated foreign earnings as of June 30, 2019 and December 31, 2018, respectively.
6. Discontinued Operations
On February 9, 2017, the Company entered into a Purchase Agreement with Tempo Acquisition, LLC (the “Purchase Agreement”) to sell its benefits administration and business process outsourcing business (the “Divested Business”) to an entity formed and controlled by affiliates of The Blackstone Group L.P. (the “Buyer”) and certain designated purchasers that are direct or indirect subsidiaries of the Buyer.
On May 1, 2017, the Buyer purchased all of the outstanding equity interests of the Divested Business, plus certain related assets and liabilities, for a purchase price of $4.3 billion in cash paid at closing, subject to customary adjustments set forth in the Purchase Agreement, and deferred consideration of up to $500 million (the “Transaction”). Cash proceeds after customary adjustments and before taxes due were $4.2 billion.
Aon and the Buyer entered into certain transaction related agreements at the closing, including two commercial agreements, a transition services agreement, certain intellectual property license agreements, subleases, and other customary agreements. Aon expects to continue to be a significant client of the Divested Business and the Divested Business has agreed to use Aon for its broking and other services for a specified period of time.
The financial results of the Divested Business for the three and six months ended June 30, 2019 and 2018 are presented as Income from discontinued operations on the Company’s Condensed Consolidated Statements of Income. The following table presents the financial results of the Divested Business (in millions):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Expenses |  |  |  |  |  |  |  |
Total operating expenses |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 3 |
Loss from discontinued operations before income taxes |  | (1 | ) |  | — |  |  | (1 | ) |  | (3 | )
Income tax benefit |  | (1 | ) |  | — |  |  | (1 | ) |  | (1 | )
Net loss from discontinued operations excluding gain |  | — |  |  | — |  |  | — |  |  | (2 | )
Gain on sale of discontinued operations, net of tax |  | — |  |  | 1 |  |  | — |  |  | 9 |
Net income from discontinued operations |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 7 |

There were no Cash and cash equivalents of discontinued operations at June 30, 2019. Total proceeds received for the sale of the Divested Business and taxes paid as a result of the sale are recognized on the Condensed Consolidated Statements of Cash Flows in Cash provided by investing activities - continuing operations and Cash provided by operating activities - continuing operations, respectively.
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7. Restructuring
In 2017, Aon initiated a global restructuring plan (the “Restructuring Plan”) in connection with the sale of the Divested Business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity. The Company expects these restructuring activities and related expenses to affect continuing operations through the fourth quarter of 2019, including an estimated 5,000 to 5,600 total role eliminations. In the second quarter of 2019, Aon updated the Restructuring Plan for additional opportunities that were identified in the quarter, which are expected to result in additional estimated charges of $125 million in 2019.
The Restructuring Plan is expected to result in cumulative charges of approximately $1,350 million through the end of the plan, consisting of approximately $530 million in employee termination costs, $130 million in technology rationalization costs, $80 million in lease consolidation costs, $45 million in non-cash asset impairments, and $565 million in other costs, including certain separation costs associated with the sale of the Divested Business.
From the inception of the Restructuring Plan through June 30, 2019, the Company has eliminated 5,091 positions and incurred total charges of $1,200 million for restructuring and related separation costs. These charges are included in Compensation and benefits, Information technology, Premises, Depreciation of fixed assets, and Other general expenses in the accompanying Condensed Consolidated Statements of Income.
The following table summarizes restructuring and separation costs by type that have been incurred through June 30, 2019 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs by type may be revised in future periods as these assumptions are updated:

|  | Three Months Ended June 30, 2019 |  | Six Months Ended June 30, 2019 |  | Inception to Date |  | Estimated Remaining Costs |  | Estimated Total Cost (1)
Workforce reduction |  | $ | 78 |  |  | $ | 102 |  |  | $ | 516 |  |  | $ | 14 |  |  | $ | 530 |
Technology rationalization (2) |  | 4 |  |  | 15 |  |  | 95 |  |  | 35 |  |  | 130 |
Lease consolidation (2) |  | 5 |  |  | 14 |  |  | 50 |  |  | 30 |  |  | 80 |
Asset impairments |  | 2 |  |  | 2 |  |  | 41 |  |  | 4 |  |  | 45 |
Other costs associated with restructuring and separation (2) (3) |  | 38 |  |  | 85 |  |  | 498 |  |  | 67 |  |  | 565 |
Total restructuring and related expenses |  | $ | 127 |  |  | $ | 218 |  |  | $ | 1,200 |  |  | $ | 150 |  |  | $ | 1,350 |

(1) | Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan. Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives. Estimated Total Cost includes $100 million of non-cash charges.

(2) | Total contract termination costs incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs, respectively, associated with restructuring and separation were for the three months ended June 30, 2019, $2 million, $4 million, and $1 million; for the six months ended June 30, 2019, were $3 million, $13 million, and $3 million; and since inception of the Restructuring Plan, were $9 million, $46 million, and $91 million. Total estimated contract termination costs expected to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, are $15 million, $80 million, and $95 million, respectively.

(3) | Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs, and consulting and legal fees. These costs are generally recognized when incurred.

The changes in the Company’s liabilities for the Restructuring Plan as of June 30, 2019 are as follows (in millions):

Balance as of December 31, 2018 |  | $ | 201 |
Expensed |  | 204 |
Cash payments |  | (222 | )
Foreign currency translation |  | 1 |
Balance as of June 30, 2019 |  | $ | 184 |

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8. Acquisitions and Dispositions of Businesses
Completed Acquisitions
The Company completed one acquisition during the six months ended June 30, 2019 and five acquisitions during the six months ended June 30, 2018. The following table includes the fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):

|  | Six Months Ended June 30, 2019
Consideration Transferred |  | $ | 17 |
Deferred and contingent consideration |  | 5 |
Aggregate consideration transferred |  | $ | 22 |
Assets acquired |  |
Cash and cash equivalents |  | $ | 2 |
Goodwill |  | 15 |
Intangible assets, net |  | 9 |
Other assets |  | 4 |
Total assets acquired |  | 30 |
Liabilities assumed |  |
Current liabilities |  | 6 |
Other non-current liabilities |  | 2 |
Total liabilities assumed |  | 8 |
Net assets acquired |  | $ | 22 |

The results of operations of these acquisitions are included in the Financial Statements as of the respective acquisition dates. The Company’s results of operations would not have been materially different if these acquisitions had been reported from the beginning of the period in which they were acquired.
2019 Acquisitions
On January 1, 2019, the Company completed the transaction to acquire Chapka Assurances SAS based in France.
2018 Acquisitions
On May 9, 2018, the Company completed the transaction to acquire certain assets of 601West, a division of Lee & Hayes, P.L.L.C. based in the United States.
On April 24, 2018, the Company completed the transaction to acquire Inspiring Benefits, S.L., a Spain-based firm specialized in employee loyalty, wellbeing, and rewards programs.
On March 1, 2018, the Company completed the transaction to acquire the business and assets of the trade credit business of Niche International Business Proprietary Limited, a trade credit brokerage based in Johannesburg, South Africa.
On March 1, 2018, the Company completed the transaction to acquire Affinity Risk Partners (Brokers) Pty. Ltd., an insurance broker in Victoria, Australia.
On January 19, 2018, the Company completed the transaction to acquire substantially all of the assets of The Burchfield Group, a provider in pharmacy benefit consulting, auditing, and health plan compliance services based in the United States.
Completed Dispositions
The Company completed three dispositions during the three months ended June 30, 2019 and four dispositions during the six months ended June 30, 2019. The Company completed one disposition during the three and six months ended June 30, 2018.
Total pretax gains recognized for the three and six months ended June 30, 2019 were $2 million and $7 million, respectively. There were no pretax gains or losses for the three months ended June 30, 2018 and total pretax losses, net of gains, were $1 million for
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the six months ended June 30, 2018. Gains and losses recognized as a result of a disposition are included in Other income (expense) in the Condensed Consolidated Statements of Income.
9. Goodwill and Other Intangible Assets
The changes in the net carrying amount of goodwill for the six months ended June 30, 2019 are as follows (in millions):

Balance as of December 31, 2018 | $ | 8,171 |
Goodwill related to current year acquisitions | 15 |
Goodwill related to disposals | (9 | )
Goodwill related to prior year acquisitions | 2 |
Foreign currency translation and other | 19 |
Balance as of June 30, 2019 | $ | 8,198 |

Other intangible assets by asset class are as follows (in millions):

| June 30, 2019 |  | December 31, 2018
| Gross Carrying Amount |  | Accumulated Amortization and Impairment |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization and Impairment |  | Net Carrying Amount
Customer related and contract based | $ | 2,254 |  |  | $ | 1,517 |  |  | $ | 737 |  |  | $ | 2,240 |  |  | $ | 1,444 |  |  | $ | 796 |
Tradenames | 1,028 |  |  | 847 |  |  | 181 |  |  | 1,027 |  |  | 740 |  |  | 287 |
Technology and other | 385 |  |  | 330 |  |  | 55 |  |  | 391 |  |  | 325 |  |  | 66 |
Total | $ | 3,667 |  |  | $ | 2,694 |  |  | $ | 973 |  |  | $ | 3,658 |  |  | $ | 2,509 |  |  | $ | 1,149 |

The estimated future amortization for finite lived intangible assets as of June 30, 2019 is as follows (in millions):

Remainder of 2019 | $ | 192 |
2020 | 223 |
2021 | 128 |
2022 | 87 |
2023 | 74 |
2024 | 58 |
Thereafter | 211 |
Total | $ | 973 |

10. Debt
Notes
On May 2, 2019, Aon Corporation issued $750 million 3.75% Senior Notes due May 2029. The Company used the net proceeds of the offering to pay down a portion of outstanding commercial paper and for general corporate purposes.
On December 3, 2018, Aon Corporation issued $350 million 4.50% Senior Notes due December 2028. The Company used the net proceeds of the offering to pay down a portion of outstanding commercial paper and for general corporate purposes.
On March 8, 2018, the Company’s CAD 375 million ($291 million at March 8, 2018 exchange rates) 4.76% Senior Note due March 2018 issued by a Canadian subsidiary of Aon Corporation matured and was repaid in full.
Revolving Credit Facilities
As of June 30, 2019, Aon plc had two primary committed credit facilities outstanding: its $900 million multi-currency United States (“U.S.”) credit facility expiring in February 2022 and its $400 million multi-currency U.S. credit facility expiring in October 2022 (collectively, the “2022 Facilities”).
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Each of these facilities includes customary representations, warranties and covenants, including financial covenants that require Aon to maintain specified ratios of adjusted consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. At June 30, 2019, Aon did not have borrowings under the 2022 Facilities, and was in compliance with the financial covenants and all other covenants contained therein during the rolling twelve months ended June 30, 2019.
Commercial Paper
Aon Corporation, a wholly owned subsidiary of Aon plc, has established a U.S. commercial paper program and Aon plc has established a European multi-currency commercial paper program (collectively, the “CP Programs”). Commercial paper may be issued in aggregate principal amounts of up to $600 million under the U.S. program and €525 million under the European program, not to exceed the amount of the Company’s committed credit, which was $1.3 billion at June 30, 2019. The U.S. commercial paper program is fully and unconditionally guaranteed by Aon plc and the European multi-currency commercial paper program is fully and unconditionally guaranteed by Aon Corporation.
Commercial paper outstanding, which is included in Short-term debt and current portion of long-term debt in the Company’s Condensed Consolidated Statements of Financial Position, is as follows (in millions):

As of |  | June 30, 2019 |  | December 31, 2018
Commercial paper outstanding |  | $ | 843 |  |  | $ | 250 |

The weighted average commercial paper outstanding and its related interest rates are as follows (in millions, except percentages):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Weighted average commercial paper outstanding |  | $ | 639 |  |  | $ | 744 |  |  | 482 |  |  | $ | 437 |
Weighted average interest rate of commercial paper outstanding |  | 0.70 | % |  | 0.92 | % |  | 0.63 | % |  | 0.85 | %

11. Income Taxes
The effective tax rates on net income from continuing operations were 16.3% and 15.9% for the three and six months ended June 30, 2019, respectively. The effective tax rates on net income from continuing operations were 165.5% and (4.8)% for the three and six months ended June 30, 2018, respectively.
For the three and six months ended June 30, 2019, the tax rate was primarily driven by the geographical distribution of income, including restructuring charges, and certain favorable discrete items, primarily the impact of shared-based payments and changes in the assertion for unremitted earnings.
For the three and six months ended June 30, 2018, the tax rate was primarily driven by the geographical distribution of income including restructuring charges, legacy litigation, and the impairment charge related to certain assets and liabilities classified as held for sale. In addition, certain discrete items impacted the 2018 tax rate including the net tax benefit associated with the anticipated sale of certain assets and liabilities classified as held for sale, the impact of share-based payments, changes in uncertain tax positions and the deferred remeasurement related to the anticipated acceleration of contributions to the qualified U.S. pension plan.
12. Shareholders’ Equity
Ordinary Shares
Aon has a share repurchase program authorized by the Company’s Board of Directors (the “Repurchase Program”). 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 and February 2017 for a total of $15.0 billion in repurchase authorizations.
Under the Repurchase Program, Class A Ordinary Shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital.
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The following table summarizes the Company’s Share Repurchase activity (in millions, except per share data):

| Three Months Ended June 30 |  | Six Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Shares repurchased | 5.8 |  |  | 2.8 |  |  | 6.4 |  |  | 6.7 |
Average price per share | $ | 183.23 |  |  | $ | 141.23 |  |  | $ | 181.07 |  |  | $ | 141.06 |
Costs recorded to retained earnings: |  |  |  |  |  |  |
Total repurchase cost | $ | 1,050 |  |  | $ | 400 |  |  | $ | 1,150 |  |  | $ | 950 |
Additional associated costs | 6 |  |  | 2 |  |  | 7 |  |  | 5 |
Total costs recorded to retained earnings | $ | 1,056 |  |  | $ | 402 |  |  | $ | 1,157 |  |  | $ | 955 |

At June 30, 2019, the remaining authorized amount for share repurchase under the Repurchase Program was $2.8 billion. Under the Repurchase Program, the Company has repurchased a total of 124.6 million shares for an aggregate cost of approximately $12.2 billion.
Net Income Per Share
Weighted average ordinary shares outstanding are as follows (in millions):

| Three Months Ended June 30 |  | Six Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Basic weighted average ordinary shares outstanding | 240.6 |  |  | 246.0 |  |  | 241.4 |  |  | 247.2 |
Dilutive effect of potentially issuable shares | 2.2 |  |  | 1.4 |  |  | 1.8 |  |  | 1.6 |
Diluted weighted average ordinary shares outstanding | 242.8 |  |  | 247.4 |  |  | 243.2 |  |  | 248.8 |

Potentially issuable shares are not included in the computation of diluted net income per share if its inclusion would be antidilutive. There were no shares excluded from the calculation for the three and six months ended June 30, 2019 and June 30, 2018.
Accumulated Other Comprehensive Loss
Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):

| Change in Fair Value of Financial Instruments (1) |  | Foreign Currency Translation Adjustments |  | Postretirement Benefit Obligation (2) |  | Total
Balance at December 31, 2018 | $ | (15 | ) |  | $ | (1,319 | ) |  | $ | (2,575 | ) |  | $ | (3,909 | )
Other comprehensive income (loss) before reclassifications, net | (8 | ) |  | 28 |  |  | 5 |  |  | 25 |
Amounts reclassified from accumulated other comprehensive income: |  |  |  |  |  |  |  |  |  |
Amounts reclassified from accumulated other comprehensive income | 8 |  |  | — |  |  | 52 |  |  | 60 |
Tax expense | (1 | ) |  | — |  |  | (12 | ) |  | (13 | )
Amounts reclassified from accumulated other comprehensive income, net | 7 |  |  | — |  |  | 40 |  |  | 47 |
Net current period other comprehensive income (loss) | (1 | ) |  | 28 |  |  | 45 |  |  | 72 |
Balance at June 30, 2019 | $ | (16 | ) |  | $ | (1,291 | ) |  | $ | (2,530 | ) |  | $ | (3,837 | )

(1) | Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Revenue, Interest expense, and Compensation and benefits in the accompanying Condensed Consolidated Statements of Income. Refer to Note 15 “Derivatives and Hedging” for further information regarding the Company’s derivative and hedging activity.

(2) | Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense).

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13. Employee Benefits
The following table provides the components of the net periodic (benefit) cost recognized in the Condensed Consolidated Statements of Income for Aon’s significant U.K., U.S., and other international pension plans. Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions):

| Three Months Ended June 30
| U.K. |  | U.S. |  | Other
| 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
Service cost | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost | 27 |  |  | 29 |  |  | 27 |  |  | 25 |  |  | 7 |  |  | 7 |
Expected return on plan assets, net of administration expenses | (48 | ) |  | (50 | ) |  | (34 | ) |  | (36 | ) |  | (10 | ) |  | (11 | )
Amortization of prior-service cost | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |
Amortization of net actuarial loss | 8 |  |  | 7 |  |  | 14 |  |  | 15 |  |  | 3 |  |  | 3 |
Net periodic (benefit) cost | (13 | ) |  | (14 | ) |  | 7 |  |  | 5 |  |  | — |  |  | (1 | )
Loss on pension settlement | — |  |  | 16 |  |  | — |  |  | — |  |  | — |  |  | — |
Total net periodic (benefit) cost | $ | (13 | ) |  | $ | 2 |  |  | $ | 7 |  |  | $ | 5 |  |  | $ | — |  |  | $ | (1 | )

| Six Months Ended June 30
| U.K. |  | U.S. |  | Other
| 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
Service cost | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost | 55 |  |  | 58 |  |  | 54 |  |  | 50 |  |  | 14 |  |  | 14 |
Expected return on plan assets, net of administration expenses | (97 | ) |  | (101 | ) |  | (68 | ) |  | (72 | ) |  | (20 | ) |  | (23 | )
Amortization of prior-service cost | 1 |  |  | — |  |  | 1 |  |  | 1 |  |  | — |  |  | — |
Amortization of net actuarial loss | 15 |  |  | 15 |  |  | 27 |  |  | 30 |  |  | 6 |  |  | 6 |
Net periodic (benefit) cost | (26 | ) |  | (28 | ) |  | 14 |  |  | 9 |  |  | — |  |  | (3 | )
Loss on pension settlement | — |  |  | 23 |  |  | — |  |  | — |  |  | — |  |  | — |
Total net periodic (benefit) cost | $ | (26 | ) |  | $ | (5 | ) |  | $ | 14 |  |  | $ | 9 |  |  | $ | — |  |  | $ | (3 | )

In March 2017, the Company approved a plan to offer a voluntary one-time lump sum payment option to certain eligible employees of the Company’s U.K. pension plans that, if accepted, would settle the Company’s pension obligations to them. The lump sum cash payment offer closed during 2018. For the six months ended June 30, 2018, lump sum payments from plan assets of £99 million ($132 million using June 30, 2018 exchange rates) were paid. As a result of this settlement, the Company remeasured the assets and liabilities of the U.K. pension plan during the second quarter of 2018, which in aggregate resulted in a reduction to the projected benefit obligation of £87 million ($115 million using June 30, 2018 exchange rates), as well as a non-cash settlement charge of £12 million ($16 million using average June 30, 2018 exchange rates) in the second quarter of 2018 and £17 million ($23 million using average exchange rates) for the six months ended June 30, 2018.
Contributions
The Company expects to make total cash contributions of approximately $80 million, $46 million, and $19 million, based on exchange rates as of December 31, 2018, to its significant U.K., U.S., and other significant international pension plans, respectively, during 2019. During the three months ended June 30, 2019, cash contributions of $23 million, $6 million, and $3 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the six months ended June 30, 2019, cash contributions of $46 million, $23 million, and $10 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively.
During the three months ended June 30, 2018, cash contributions of $25 million, $8 million, and $3 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively. During the six months ended June 30, 2018, cash contributions of $48 million, $25 million, and $11 million were made to the Company’s significant U.K., U.S., and other significant international pension plans, respectively.
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14. Share-Based Compensation Plans
The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions):

| Three Months Ended June 30 |  | Six Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Restricted share units (“RSUs”) | $ | 50 |  |  | $ | 46 |  |  | $ | 113 |  |  | $ | 104 |
Performance share awards (“PSAs”) | 39 |  |  | 23 |  |  | 62 |  |  | 39 |
Employee share purchase plans | 2 |  |  | 1 |  |  | 5 |  |  | 4 |
Total share-based compensation expense | $ | 91 |  |  | $ | 70 |  |  | $ | 180 |  |  | $ | 147 |

Restricted Share Units
RSUs generally vest between three and five years. The fair value of RSUs is based upon the market value of Aon plc ordinary shares at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all non-vested awards. Compensation expense associated with RSUs is recognized on a straight-line basis over the requisite service period. Dividend equivalents are paid on certain RSUs, based on the initial grant amount.
The following table summarizes the status of the Company’s RSUs, including shares related to the Divested Business (shares in thousands, except fair value):

| Six Months Ended June 30, 2019 |  | Six Months Ended June 30, 2018
| Shares |  | Fair Value (1) |  | Shares |  | Fair Value (1)
Non-vested at beginning of period | 4,208 |  |  | $ | 120 |  |  | 4,849 |  |  | $ | 104 |
Granted | 1,178 |  |  | $ | 173 |  |  | 1,352 |  |  | $ | 140 |
Vested | (1,451 | ) |  | $ | 113 |  |  | (1,664 | ) |  | $ | 98 |
Forfeited | (97 | ) |  | $ | 124 |  |  | (109 | ) |  | $ | 109 |
Non-vested at end of period | 3,838 |  |  | $ | 139 |  |  | 4,428 |  |  | $ | 117 |

(1) | Represents per share weighted average fair value of award at date of grant.

Unamortized deferred compensation expense amounted to $426 million as of June 30, 2019, with a remaining weighted average amortization period of approximately 2.1 years.
Performance Share Awards
The vesting of PSAs is contingent upon meeting a cumulative level of earnings per share related performance over a three-year period. The actual issue of shares may range from 0-200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of PSAs is based upon the market price of Aon plc ordinary shares at the date of grant. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits in the Condensed Consolidated Statements of Income, if necessary. Dividend equivalents are not paid on PSAs.
The following table summarizes the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the six months ended June 30, 2019 and the years ended December 31, 2018 and 2017, respectively (shares in thousands and dollars in millions, except fair value):

| June 30, 2019 |  | December 31, 2018 |  | December 31, 2017
Target PSAs granted during period | 467 |  |  | 564 |  |  | 548 |
Weighted average fair value per share at date of grant | $ | 164 |  |  | $ | 134 |  |  | $ | 114 |
Number of shares that would be issued based on current performance levels | 464 |  |  | 970 |  |  | 1,066 |
Unamortized expense, based on current performance levels | $ | 69 |  |  | $ | 67 |  |  | $ | 20 |

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15. Derivatives and Hedging
The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes.
Foreign Exchange Risk Management
The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than 2 years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income.
The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 30-day basis, but may be for up to 1 year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income.
The notional and fair values of derivative instruments are as follows (in millions):

| Notional Amount |  | Net Amount of Derivative Assets Presented in the Statements of Financial Position (1) |  | Net Amount of Derivative Liabilities Presented in the Statements of Financial Position (2)
| June 30, 2019 |  | December 31, 2018 |  | June 30, 2019 |  | December 31, 2018 |  | June 30, 2019 |  | December 31, 2018
Foreign exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounted for as hedges | $ | 588 |  |  | $ | 646 |  |  | $ | 14 |  |  | $ | 17 |  |  | $ | 1 |  |  | $ | 2 |
Not accounted for as hedges (3) | 285 |  |  | 269 |  |  | 5 |  |  | 1 |  |  | — |  |  | 6 |
Total | $ | 873 |  |  | $ | 915 |  |  | $ | 19 |  |  | $ | 18 |  |  | $ | 1 |  |  | $ | 8 |

(1) | Included within Other current assets ($8 million at June 30, 2019 and $3 million at December 31, 2018) or Other non-current assets ($11 million at June 30, 2019 and $15 million at December 31, 2018).

(2) | Included within Other current liabilities ($1 million at June 30, 2019 and $5 million at December 31, 2018) or Other non-current liabilities ($3 million at December 31, 2018).

(3) | These contracts typically are for 30 day durations and executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date.

The amounts of derivative gains (losses) recognized in the Financial Statements are as follows (in millions):

| Three Months Ended June 30 |  | Six Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Loss recognized in Accumulated other comprehensive loss | $ | (12 | ) |  | $ | (25 | ) |  | $ | (8 | ) |  | $ | (11 | )

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The amounts of derivative gains (losses) reclassified from Accumulated other comprehensive loss into the Condensed Consolidated Statements of Income are as follows (in millions):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Revenue (1) |  | $ | (3 | ) |  | $ | — |  |  | $ | (7 | ) |  | $ | — |
Compensation and benefits |  | — |  |  | — |  |  | — |  |  | 1 |
Other general expenses |  | — |  |  | (1 | ) |  | — |  |  | (2 | )
Interest expense |  | — |  |  | — |  |  | (1 | ) |  | (1 | )
Other income (expense) (1) |  | — |  |  | (1 | ) |  | — |  |  | (4 | )
Total |  | $ | (3 | ) |  | $ | (2 | ) |  | $ | (8 | ) |  | $ | (6 | )

(1) | With the adoption of new hedge accounting guidance in the first quarter of 2019, gains (losses) on derivatives accounted for as hedges are recognized in Total revenue in the Company’s Condensed Consolidated Statements of Income rather than Other income (expense). Refer to Note 2 “Accounting Principles and Practices” for additional details.

The Company estimates that approximately $14 million of pretax losses currently included within Accumulated other comprehensive loss will be reclassified into earnings in the next twelve months.
During the three and six months ended June 30, 2019, the Company recorded losses of $9 million and $4 million, respectively, in Other income (expense) for foreign exchange derivatives not accounted for as hedges. During the three and six months ended June 30, 2018, the Company recorded losses of $20 million and $11 million, respectively, in Other income (expense) for foreign exchange derivatives not accounted for as hedges.
Net Investments in Foreign Operations Risk Management
The Company uses non-derivative financial instruments to protect the value of its investments in a number of foreign subsidiaries. The Company has designated a portion of its euro-denominated commercial paper issuances as a non-derivative hedge of the foreign currency exposure of a net investment in its European operations. The change in fair value of the designated portion of the euro-denominated commercial paper due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustment, a component of Accumulated other comprehensive loss, to the extent it is effective as a hedge. The foreign currency translation adjustment of the hedged net investments is also recorded in Accumulated other comprehensive loss. Ineffective portions of net investment hedges, if any, are reclassified from Accumulated other comprehensive loss into earnings during the period of change.
As of June 30, 2019, the Company has €500 million ($568 million at June 30, 2019 exchange rates) of outstanding euro-denominated commercial paper designated as a hedge of the foreign currency exposure of its net investment in its European operations. As of June 30, 2019, the unrealized gain recognized in Accumulated other comprehensive loss related to the net investment non derivative hedging instrument was $16 million.
The Company did not reclassify any deferred gains or losses related to net investment hedges from Accumulated other comprehensive loss to earnings during the three and six months ended June 30, 2019 and 2018.
16. Fair Value Measurements and Financial Instruments
Accounting standards establish a three tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows:

• | Level 1 — observable inputs such as quoted prices for identical assets in active markets;

• | Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and

• | Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions.

The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments:
Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness.
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Equity investments consist of domestic and international equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis the Company reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities.
Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Financial Statements.
Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities.
Debt is carried at outstanding principal balance, less any unamortized issuance costs, discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements.
The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2019 and December 31, 2018 (in millions):

|  |  | Fair Value Measurements Using
| Balance at June 30, 2019 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets |  |  |  |  |  |  |  |  |  |  |
Money market funds (1) | $ | 2,356 |  |  | $ | 2,356 |  |  | $ | — |  |  | $ | — |
Other investments: |  |  |  |  |  |  |  |  |  |  |
Government bonds | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Equity investments | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Derivatives (2) |  |  |  |  |  |  |  |  |  |  |
Gross foreign exchange contracts | $ | 21 |  |  | $ | — |  |  | $ | 21 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Derivatives (2) |  |  |  |  |  |  |  |  |  |  |
Gross foreign exchange contracts | $ | 3 |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |

23

|  |  | Fair Value Measurements Using
| Balance at December 31, 2018 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets |  |  |  |  |  |  |  |  |  |  |
Money market funds (1) | $ | 1,759 |  |  | $ | 1,759 |  |  | $ | — |  |  | $ | — |
Other investments: |  |  |  |  |  |  |  |  |  |  |
Government bonds | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Equity investments | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
Derivatives (2) |  |  |  |  |  |  |  |  |  |  |
Gross foreign exchange contracts | $ | 21 |  |  | $ | — |  |  | $ | 21 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Derivatives (2) |  |  |  |  |  |  |  |  |  |  |
Gross foreign exchange contracts | $ | 12 |  |  | $ | — |  |  | $ | 12 |  |  | $ | — |

(1) | Included within Fiduciary assets or Short-term investments in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity.

(2) | Refer to Note 15 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity.

There were no transfers of assets or liabilities between fair value hierarchy levels in either the six months ended June 30, 2019 or 2018. The Company recognized no realized or unrealized gains or losses in the Condensed Consolidated Statements of Income during either the six months ended June 30, 2019 or 2018, related to assets and liabilities measured at fair value using unobservable inputs.
The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table provides the carrying value and fair value for the Company’s term debt (in millions):

| June 30, 2019 |  | December 31, 2018
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Long-term debt | $ | 6,740 |  |  | $ | 7,356 |  |  | $ | 5,993 |  |  | $ | 6,159 |

17. Claims, Lawsuits, and Other Contingencies
Legal
Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits and proceedings that arise in the ordinary course of business, which frequently include errors and omissions (“E&O”) claims. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble or extraordinary damages. While Aon maintains meaningful E&O insurance and other insurance programs to provide protection against certain losses that arise in such matters, Aon has exhausted or materially depleted its coverage under some of the policies that protect the Company and, consequently, is self-insured or materially self-insured for some claims. Accruals for these exposures, and related insurance receivables, when applicable, are included in the Condensed Consolidated Statements of Financial Position and have been recognized in Other general expenses in the Condensed Consolidated Statements of Income to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Matters that are not probable and reasonably estimable are not accrued for in the financial statements.
The Company has included in the current matters described below certain matters in which (1) loss is probable, (2) loss is reasonably possible, that is, more than remote but not probable, or (3) there exists the reasonable possibility of loss greater than the accrued amount. In addition, the Company may from time to time disclose matters for which the probability of loss could be remote but the claim amounts associated with such matters are potentially significant. The reasonably possible range of loss for the matters described below for which loss is estimable, in excess of amounts that are deemed probable and estimable and therefore already accrued, is estimated to be between $0 and $0.1 billion, exclusive of any insurance coverage. These estimates are based on available information as of the date of this filing. As available information changes, the matters for which Aon is able to estimate may change, and the estimates themselves may change. In addition, many estimates involve significant judgment and uncertainty. For example, at the time of making an estimate, Aon may only have limited information about the facts underlying the claim, and predictions and assumptions about future court rulings and outcomes may prove to be inaccurate. Although management at present believes that the ultimate outcome of all matters described below, individually or in the aggregate, will not have a material adverse effect on the consolidated financial position of Aon, legal proceedings are subject to inherent uncertainties and unfavorable rulings
24

or other events. Unfavorable resolutions could include substantial monetary or punitive damages imposed on Aon or its subsidiaries. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected.
Current Matters
A pensions consulting and administration subsidiary of Aon provided advisory services to the Trustees of the Gleeds pension fund in the United Kingdom and, on occasion, to the relevant employer of the fund. In April 2014, the High Court, Chancery Division, London found that certain governing documents of the fund that sought to alter the fund’s benefit structure and that had been drafted by Aon were procedurally defective and therefore invalid. No lawsuit naming Aon as a party was filed, although a tolling agreement was entered. The High Court decision says that the additional liabilities in the pension fund resulting from the alleged defect in governing documents amount to approximately £45 million ($57 million at June 30, 2019 exchange rates). In December 2014, the Court of Appeal granted the employer leave to appeal the High Court decision. At a hearing in October 2016, the Court of Appeal approved a settlement of the pending litigation. On October 31, 2016, the fund’s trustees and employer sued Aon in the High Court, Chancery Division, London, alleging negligence and breach of duty in relation to the governing documents. The proceedings were served on Aon on December 20, 2016. The claimants seek damages of approximately £70 million ($89 million at June 30, 2019 exchange rates) plus interest and costs. In February 2018, the claimants instructed new lawyers and added their previous lawyers as defendants to the Aon lawsuit. Claimants have alleged that the previous lawyers were responsible for some of the losses sought from Aon because the lawyers gave negligent legal advice during the course of the High Court and Court of Appeal proceedings. Aon believes that it has meritorious defenses and intends to vigorously defend itself against this claim.
On October 3, 2017, Christchurch City Council (“CCC”) invoked arbitration to pursue a claim that it asserts against Aon New Zealand. Aon provided insurance broking services to CCC in relation to CCC’s 2010-2011 material damage and business interruption program. In December 2015, CCC settled its property and business interruption claim for its losses arising from the 2010-2011 Canterbury earthquakes against the underwriter of its material damage and business interruption program and the reinsurers of that underwriter. CCC contends that acts and omissions by Aon caused CCC to recover less in that settlement than it otherwise would have. CCC claims damages of approximately NZD 528 million ($353 million at June 30, 2019 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims.
A retail insurance brokerage subsidiary of Aon was sued on September 6, 2018 in the United States District Court for the Southern District of New York by a client, Pilkington North America, Inc., that sustained damage from a tornado to its Ottawa, Illinois property. The lawsuit seeks between $45 million and $85 million in property and business interruption damages from either its insurer or Aon. The insurer contends that insurance proceeds were limited to $15 million in coverage by a windstorm sub-limit purportedly contained in the policy procured by Aon for Pilkington. The insurer therefore has tendered $15 million to Pilkington and denied coverage for the remainder of the loss. Pilkington sued the insurer and Aon seeking full coverage for the loss from the insurer or, in the alternative, seeking the same damages against Aon on various theories of professional liability if the court finds that the $15 million sub-limit applies to the claim. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims.
In April 2017, the FCA announced an investigation relating to suspected competition law breaches in the aviation and aerospace broking industry, which, for Aon in 2016, represented less than $100 million in global revenue. The European Commission has now assumed jurisdiction over the investigation in place of the FCA. Other antitrust agencies outside the European Union are also conducting formal or informal investigations regarding these matters. Aon intends to work diligently with all antitrust agencies concerned to ensure they can carry out their work as efficiently as possible. At this time, in light of the uncertainties and many variables involved, Aon cannot estimate the ultimate impact on our company from these investigations or any related private litigation, nor any damages, penalties, or fines related to them. There can be no assurance that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.
Settled/Closed Matters
On June 29, 2015, Lyttelton Port Company Limited (“LPC”) sued Aon New Zealand in the Christchurch Registry of the High Court of New Zealand. LPC alleges, among other things, that Aon was negligent and in breach of contract in arranging LPC’s property insurance program for the period covering June 30, 2010 to June 30, 2011. LPC contended that acts and omissions by Aon caused LPC to recover less than it otherwise would have from insurers for losses suffered in the 2010 and 2011 Canterbury earthquakes. LPC claimed damages of approximately NZD 184 million ($123 million at June 30, 2019 exchange rates) plus interest and costs. In April 2019, the case was settled with no admission of liability on the part of Aon. The terms of this settlement did not have a significant impact on Aon’s results of operations or financial condition.
25

Guarantees and Indemnifications
The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable are included in the Company’s Financial Statements, and are recorded at fair value.
The Company expects that, as prudent business interests dictate, additional guarantees and indemnifications may be issued from time to time.
Redomestication
In connection with the Redomestication, the Company on April 2, 2012 entered into various agreements pursuant to which it agreed to guarantee the obligations of its subsidiaries arising under issued and outstanding debt securities. Those agreements included the (1) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (amending and restating the Indenture, dated as of September 10, 2010, between Aon Corporation and the Trustee), (2) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of December 16, 2002, between Aon Corporation and the Trustee), and (3) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of January 13, 1997, as supplemented by the First Supplemental Indenture, dated as of January 13, 1997).
Sale of the Divested Business
In connection with the sale of the Divested Business, the Company guaranteed future operating lease commitments related to certain facilities assumed by the Buyer. The Company is obligated to perform under the guarantees if the Divested Business defaults on such leases at any time during the remainder of the lease agreements, which expire on various dates through 2025. As of June 30, 2019, the undiscounted maximum potential future payments under the lease guarantee is $77 million, with an estimated fair value of $15 million. No cash payments were made in connection to the lease commitments during the six months ended June 30, 2019.
Additionally, the Company is subject to performance guarantee requirements under certain client arrangements that were assumed by the Buyer. Should the Divested Business fail to perform as required by the terms of the arrangements, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023. As of June 30, 2019, the undiscounted maximum potential future payments under the performance guarantees were $170 million, with an estimated fair value of $1 million. No cash payments were made in connection to the performance guarantees during the three and six months ended June 30, 2019.
Letters of Credit
Aon has entered into a number of arrangements whereby the Company’s performance on certain obligations is guaranteed by a third party through the issuance of letters of credit (“LOCs”). The Company had total LOCs outstanding of approximately $74 million at June 30, 2019, compared to $83 million at December 31, 2018. These LOCs cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries.
Premium Payments
The Company has 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 $102 million at June 30, 2019 compared to $103 million at December 31, 2018.
18. Segment Information
The Company operates as one segment that includes all of Aon’s continuing operations, which as a global professional services firm provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines which make up its principal products and services. The Chief Operating Decision Maker (the “CODM”) assesses the performance of the Company and allocates resources based on one segment: Aon United.
The Company’s reportable operating segment has been determined using a management approach, which is consistent with the basis and manner in which Aon’s CODM uses financial information for the purposes of allocating resources and evaluating performance. The CODM assesses performance and allocates resources based on total Aon results against its key four metrics,
26

including organic revenue growth, expense discipline, and collaborative behaviors that maximize value for Aon and its shareholders, regardless of which revenue line it benefits.
As Aon operates as one segment, segment profit or loss is consistent with consolidated reporting as disclosed on the Condensed Consolidated Statements of Income. Refer to Note 3 “Revenue from Contracts with Customers” for further information on revenue by principal service line.
19. Guarantee of Registered Securities
As described in Note 17 “Claims, Lawsuits, and Other Contingencies,” in connection with the Redomestication, Aon plc entered into various agreements pursuant to which it agreed to guarantee the obligations of Aon Corporation arising under issued and outstanding debt securities, including the 5.00% Notes due September 2020, the 8.205% Notes due January 2027, and the 6.25% Notes due September 2040 (collectively, the “Aon Corporation Notes”). Additionally, Aon plc has guaranteed the obligations of Aon Corporation arising under the 4.50% Senior Notes due 2028 and the 3.75% Senior Notes due 2029. Aon Corporation is a 100% indirectly owned subsidiary of Aon plc. All guarantees of Aon plc are full and unconditional. There are no other subsidiaries of Aon plc that are guarantors of the Aon Corporation Notes.
In addition, Aon Corporation entered into an agreement pursuant to which it guaranteed the obligations of Aon plc arising under the 4.25% Notes due 2042 exchanged for Aon Corporation’s outstanding 8.205% Notes due January 2027, and has also guaranteed the obligations of Aon plc arising under the 4.45% Notes due 2043, the 4.00% Notes due November 2023, the 2.875% Notes due May 2026, the 3.50% Notes due June 2024, the 4.60% Notes due June 2044, the 4.75% Notes due May 2045, the 2.80% Notes due March 2021, and the 3.875% Notes due December 2025 (collectively, the “Aon plc Notes”). In each case, the guarantee of Aon Corporation is full and unconditional. There are no subsidiaries of Aon plc, other than Aon Corporation, that are guarantors of the Aon plc Notes. As a result of the existence of these guarantees, the Company has elected to present the financial information set forth in this footnote in accordance with Rule 3-10 of Regulation S-X.
In the fourth quarter of 2018, Aon plc obtained direct ownership in two subsidiaries that were previously indirectly owned by Aon Corporation. In the first quarter of 2019, Aon Corporation obtained indirect ownership of subsidiaries that were previously indirectly owned by Aon plc. The financial results of these subsidiaries are included in the Other Non-Guarantor Subsidiaries column of the Condensed Consolidating Financial Statements. The Company has retrospectively reflected the impact of these transactions on the Condensed Consolidating Statements of Income and Condensed Consolidating Statements of Comprehensive Income for the periods ended June 30, 2018 and the Condensed Consolidated Statement of Financial Position as of December 31, 2018.
The following tables set forth Condensed Consolidating Statements of Income and Condensed Consolidating Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018, Condensed Consolidating Statements of Financial Position as of June 30, 2019 and December 31, 2018, and Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2019 and 2018 in accordance with Rule 3-10 of Regulation S-X. The Condensed Consolidating Financial Information includes the accounts of Aon plc, the accounts of Aon Corporation, and the combined accounts of the Other Non-Guarantor Subsidiaries. The Condensed Consolidating Financial Statements are presented in all periods as a merger under common control. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions.
27

Condensed Consolidating Statement of Income

|  | Three Months Ended June 30, 2019
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Revenue |  |  |  |  |  |  |  |  |  |
Total revenue |  | $ | — |  |  | $ | — |  |  | $ | 2,606 |  |  | $ | — |  |  | $ | 2,606 |
Expenses |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | 22 |  |  | 4 |  |  | 1,475 |  |  | — |  |  | 1,501 |
Information technology |  | — |  |  | — |  |  | 126 |  |  | — |  |  | 126 |
Premises |  | — |  |  | 9 |  |  | 76 |  |  | — |  |  | 85 |
Depreciation of fixed assets |  | — |  |  | — |  |  | 40 |  |  | — |  |  | 40 |
Amortization and impairment of intangible assets |  | — |  |  | — |  |  | 97 |  |  | — |  |  | 97 |
Other general expenses |  | 3 |  |  | 6 |  |  | 335 |  |  | — |  |  | 344 |
Total operating expenses |  | 25 |  |  | 19 |  |  | 2,149 |  |  | — |  |  | 2,193 |
Operating income (loss) |  | (25 | ) |  | (19 | ) |  | 457 |  |  | — |  |  | 413 |
Interest income |  | — |  |  | 9 |  |  | — |  |  | (8 | ) |  | 1 |
Interest expense |  | (45 | ) |  | (34 | ) |  | (6 | ) |  | 8 |  |  | (77 | )
Intercompany interest income (expense) |  | 3 |  |  | (116 | ) |  | 113 |  |  | — |  |  | — |
Intercompany other income (expense) |  | 137 |  |  | (164 | ) |  | 27 |  |  | — |  |  | — |
Other income (expense) |  | (11 | ) |  | (14 | ) |  | 24 |  |  | 7 |  |  | 6 |
Income (loss) from continuing operations before income taxes |  | 59 |  |  | (338 | ) |  | 615 |  |  | 7 |  |  | 343 |
Income tax expense (benefit) |  | — |  |  | (64 | ) |  | 120 |  |  | — |  |  | 56 |
Net income (loss) from continuing operations |  | 59 |  |  | (274 | ) |  | 495 |  |  | 7 |  |  | 287 |
Net income from discontinued operations |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net income (loss) before equity in earnings of subsidiaries |  | 59 |  |  | (274 | ) |  | 495 |  |  | 7 |  |  | 287 |
Equity in earnings of subsidiaries |  | 211 |  |  | 301 |  |  | 27 |  |  | (539 | ) |  | — |
Net income |  | 270 |  |  | 27 |  |  | 522 |  |  | (532 | ) |  | 287 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Net income attributable to Aon shareholders |  | $ | 270 |  |  | $ | 27 |  |  | $ | 512 |  |  | $ | (532 | ) |  | $ | 277 |

28

Condensed Consolidating Statement of Income

|  | Three Months Ended June 30, 2018
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Revenue |  |  |  |  |  |  |  |  |  |
Total revenue |  | $ | — |  |  | $ | — |  |  | $ | 2,561 |  |  | $ | — |  |  | $ | 2,561 |
Expenses |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | 15 |  |  | 1 |  |  | 1,478 |  |  | — |  |  | 1,494 |
Information technology |  | — |  |  | — |  |  | 123 |  |  | — |  |  | 123 |
Premises |  | — |  |  | — |  |  | 96 |  |  | — |  |  | 96 |
Depreciation of fixed assets |  | — |  |  | — |  |  | 47 |  |  | — |  |  | 47 |
Amortization and impairment of intangible assets |  | — |  |  | — |  |  | 282 |  |  | — |  |  | 282 |
Other general expenses |  | 2 |  |  | 91 |  |  | 442 |  |  | — |  |  | 535 |
Total operating expenses |  | 17 |  |  | 92 |  |  | 2,468 |  |  | — |  |  | 2,577 |
Operating income (loss) |  | (17 | ) |  | (92 | ) |  | 93 |  |  | — |  |  | (16 | )
Interest income |  | — |  |  | 15 |  |  | — |  |  | (14 | ) |  | 1 |
Interest expense |  | (48 | ) |  | (25 | ) |  | (10 | ) |  | 14 |  |  | (69 | )
Intercompany interest income (expense) |  | 3 |  |  | (129 | ) |  | 126 |  |  | — |  |  | — |
Intercompany other income (expense) |  | (93 | ) |  | 10 |  |  | 83 |  |  | — |  |  | — |
Other income (expense) |  | 48 |  |  | (20 | ) |  | (13 | ) |  | (18 | ) |  | (3 | )
Income (loss) from continuing operations before income taxes |  | (107 | ) |  | (241 | ) |  | 279 |  |  | (18 | ) |  | (87 | )
Income tax expense (benefit) |  | (3 | ) |  | (50 | ) |  | (91 | ) |  | — |  |  | (144 | )
Net income (loss) from continuing operations |  | (104 | ) |  | (191 | ) |  | 370 |  |  | (18 | ) |  | 57 |
Net income from discontinued operations |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Net income (loss) before equity in earnings of subsidiaries |  | (104 | ) |  | (191 | ) |  | 371 |  |  | (18 | ) |  | 58 |
Equity in earnings of subsidiaries |  | 170 |  |  | 207 |  |  | 16 |  |  | (393 | ) |  | — |
Net income |  | 66 |  |  | 16 |  |  | 387 |  |  | (411 | ) |  | 58 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Net income attributable to Aon shareholders |  | $ | 66 |  |  | $ | 16 |  |  | $ | 377 |  |  | $ | (411 | ) |  | $ | 48 |

29

Condensed Consolidating Statement of Income

|  | Six Months Ended June 30, 2019
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Revenue |  |  |  |  |  |  |  |  |  |
Total revenue |  | $ | — |  |  | $ | — |  |  | $ | 5,749 |  |  | $ | — |  |  | $ | 5,749 |
Expenses |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | 42 |  |  | 12 |  |  | 3,031 |  |  | — |  |  | 3,085 |
Information technology |  | — |  |  | — |  |  | 243 |  |  | — |  |  | 243 |
Premises |  | — |  |  | 13 |  |  | 159 |  |  | — |  |  | 172 |
Depreciation of fixed assets |  | — |  |  | — |  |  | 80 |  |  | — |  |  | 80 |
Amortization and impairment of intangible assets |  | — |  |  | — |  |  | 194 |  |  | — |  |  | 194 |
Other general expenses |  | 3 |  |  | 2 |  |  | 685 |  |  | — |  |  | 690 |
Total operating expenses |  | 45 |  |  | 27 |  |  | 4,392 |  |  | — |  |  | 4,464 |
Operating income (loss) |  | (45 | ) |  | (27 | ) |  | 1,357 |  |  | — |  |  | 1,285 |
Interest income |  | — |  |  | 18 |  |  | — |  |  | (15 | ) |  | 3 |
Interest expense |  | (91 | ) |  | (62 | ) |  | (11 | ) |  | 15 |  |  | (149 | )
Intercompany interest income (expense) |  | 7 |  |  | (232 | ) |  | 225 |  |  | — |  |  | — |
Intercompany other income (expense) |  | 168 |  |  | (263 | ) |  | 95 |  |  | — |  |  | — |
Other income (expense) |  | (6 | ) |  | (25 | ) |  | 32 |  |  | 5 |  |  | 6 |
Income (loss) from continuing operations before income taxes |  | 33 |  |  | (591 | ) |  | 1,698 |  |  | 5 |  |  | 1,145 |
Income tax expense (benefit) |  | (5 | ) |  | (106 | ) |  | 293 |  |  | — |  |  | 182 |
Net income (loss) from continuing operations |  | 38 |  |  | (485 | ) |  | 1,405 |  |  | 5 |  |  | 963 |
Net income from discontinued operations |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net income (loss) before equity in earnings of subsidiaries |  | 38 |  |  | (485 | ) |  | 1,405 |  |  | 5 |  |  | 963 |
Equity in earnings of subsidiaries |  | 893 |  |  | 1,025 |  |  | 540 |  |  | (2,458 | ) |  | — |
Net income |  | 931 |  |  | 540 |  |  | 1,945 |  |  | (2,453 | ) |  | 963 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 27 |  |  | — |  |  | 27 |
Net income attributable to Aon shareholders |  | $ | 931 |  |  | $ | 540 |  |  | $ | 1,918 |  |  | $ | (2,453 | ) |  | $ | 936 |

30

Condensed Consolidating Statement of Income

|  | Six Months Ended June 30, 2018
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Revenue |  |  |  |  |  |  |  |  |  |
Total revenue |  | $ | — |  |  | $ | — |  |  | $ | 5,651 |  |  | $ | — |  |  | $ | 5,651 |
Expenses |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | 34 |  |  | 2 |  |  | 3,074 |  |  | — |  |  | 3,110 |
Information technology |  | — |  |  | — |  |  | 238 |  |  | — |  |  | 238 |
Premises |  | — |  |  | — |  |  | 189 |  |  | — |  |  | 189 |
Depreciation of fixed assets |  | — |  |  | — |  |  | 86 |  |  | — |  |  | 86 |
Amortization and impairment of intangible assets |  | — |  |  | — |  |  | 392 |  |  | — |  |  | 392 |
Other general expenses |  | 3 |  |  | 91 |  |  | 759 |  |  | — |  |  | 853 |
Total operating expenses |  | 37 |  |  | 93 |  |  | 4,738 |  |  | — |  |  | 4,868 |
Operating income (loss) |  | (37 | ) |  | (93 | ) |  | 913 |  |  | — |  |  | 783 |
Interest income |  | — |  |  | 29 |  |  | — |  |  | (24 | ) |  | 5 |
Interest expense |  | (97 | ) |  | (49 | ) |  | (17 | ) |  | 24 |  |  | (139 | )
Intercompany interest income (expense) |  | 7 |  |  | (257 | ) |  | 250 |  |  | — |  |  | — |
Intercompany other income (expense) |  | (146 | ) |  | 5 |  |  | 141 |  |  | — |  |  | — |
Other income (expense) |  | 23 |  |  | (26 | ) |  | — |  |  | (15 | ) |  | (18 | )
Income (loss) from continuing operations before income taxes |  | (250 | ) |  | (391 | ) |  | 1,287 |  |  | (15 | ) |  | 631 |
Income tax expense (benefit) |  | (19 | ) |  | (77 | ) |  | 66 |  |  | — |  |  | (30 | )
Net income (loss) from continuing operations |  | (231 | ) |  | (314 | ) |  | 1,221 |  |  | (15 | ) |  | 661 |
Net income from discontinued operations |  | — |  |  | — |  |  | 7 |  |  | — |  |  | 7 |
Net income (loss) before equity in earnings of subsidiaries |  | (231 | ) |  | (314 | ) |  | 1,228 |  |  | (15 | ) |  | 668 |
Equity in earnings of subsidiaries |  | 888 |  |  | 912 |  |  | 598 |  |  | (2,398 | ) |  | — |
Net income |  | 657 |  |  | 598 |  |  | 1,826 |  |  | (2,413 | ) |  | 668 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 26 |  |  | — |  |  | 26 |
Net income attributable to Aon shareholders |  | $ | 657 |  |  | $ | 598 |  |  | $ | 1,800 |  |  | $ | (2,413 | ) |  | $ | 642 |

31

Condensed Consolidating Statement of Comprehensive Income

|  | Three Months Ended June 30, 2019
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Net income |  | $ | 270 |  |  | $ | 27 |  |  | $ | 522 |  |  | $ | (532 | ) |  | $ | 287 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Net income attributable to Aon shareholders |  | 270 |  |  | 27 |  |  | 512 |  |  | (532 | ) |  | 277 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |
Change in fair value of financial instruments |  | — |  |  | — |  |  | (8 | ) |  | — |  |  | (8 | )
Foreign currency translation adjustments |  | — |  |  | — |  |  | (96 | ) |  | (7 | ) |  | (103 | )
Postretirement benefit obligation |  | — |  |  | 10 |  |  | 4 |  |  | — |  |  | 14 |
Total other comprehensive income (loss) |  | — |  |  | 10 |  |  | (100 | ) |  | (7 | ) |  | (97 | )
Equity in other comprehensive income (loss) of subsidiaries, net of tax |  | (90 | ) |  | (118 | ) |  | (108 | ) |  | 316 |  |  | — |
Less: Other comprehensive income (loss) attributable to noncontrolling interests |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total other comprehensive income (loss) attributable to Aon shareholders |  | (90 | ) |  | (108 | ) |  | (208 | ) |  | 309 |  |  | (97 | )
Comprehensive income attributable (loss) to Aon shareholders |  | $ | 180 |  |  | $ | (81 | ) |  | $ | 304 |  |  | $ | (223 | ) |  | $ | 180 |

Condensed Consolidating Statement of Comprehensive Income

|  | Three Months Ended June 30, 2018
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Net income |  | $ | 66 |  |  | $ | 16 |  |  | $ | 387 |  |  | $ | (411 | ) |  | $ | 58 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Net income attributable to Aon shareholders |  | 66 |  |  | 16 |  |  | 377 |  |  | (411 | ) |  | 48 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |
Change in fair value of financial instruments |  | — |  |  | (4 | ) |  | 3 |  |  | — |  |  | (1 | )
Foreign currency translation adjustments |  | — |  |  | — |  |  | (478 | ) |  | 18 |  |  | (460 | )
Postretirement benefit obligation |  | — |  |  | 11 |  |  | 111 |  |  | — |  |  | 122 |
Total other comprehensive income (loss) |  | — |  |  | 7 |  |  | (364 | ) |  | 18 |  |  | (339 | )
Equity in other comprehensive income (loss) of subsidiaries, net of tax |  | (351 | ) |  | (345 | ) |  | (338 | ) |  | 1,034 |  |  | — |
Less: Other comprehensive income (loss) attributable to noncontrolling interests |  | — |  |  | — |  |  | (6 | ) |  | — |  |  | (6 | )
Total other comprehensive income (loss) attributable to Aon shareholders |  | (351 | ) |  | (338 | ) |  | (696 | ) |  | 1,052 |  |  | (333 | )
Comprehensive income attributable (loss) to Aon shareholders |  | $ | (285 | ) |  | $ | (322 | ) |  | $ | (319 | ) |  | $ | 641 |  |  | $ | (285 | )

32

Condensed Consolidating Statement of Comprehensive Income

|  | Six Months Ended June 30, 2019
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Net income |  | $ | 931 |  |  | $ | 540 |  |  | $ | 1,945 |  |  | $ | (2,453 | ) |  | $ | 963 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 27 |  |  | — |  |  | 27 |
Net income attributable to Aon shareholders |  | 931 |  |  | 540 |  |  | 1,918 |  |  | (2,453 | ) |  | 936 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |
Change in fair value of financial instruments |  | — |  |  | 2 |  |  | (3 | ) |  | — |  |  | (1 | )
Foreign currency translation adjustments |  | — |  |  | — |  |  | 35 |  |  | (5 | ) |  | 30 |
Postretirement benefit obligation |  | — |  |  | 32 |  |  | 13 |  |  | — |  |  | 45 |
Total other comprehensive income (loss) |  | — |  |  | 34 |  |  | 45 |  |  | (5 | ) |  | 74 |
Equity in other comprehensive income (loss) of subsidiaries, net of tax |  | 77 |  |  | (3 | ) |  | 31 |  |  | (105 | ) |  | — |
Less: Other comprehensive income (loss) attributable to noncontrolling interests |  | — |  |  | — |  |  | 2 |  |  | — |  |  | 2 |
Total other comprehensive income (loss) attributable to Aon shareholders |  | 77 |  |  | 31 |  |  | 74 |  |  | (110 | ) |  | 72 |
Comprehensive income attributable (loss) to Aon shareholders |  | $ | 1,008 |  |  | $ | 571 |  |  | $ | 1,992 |  |  | $ | (2,563 | ) |  | $ | 1,008 |

Condensed Consolidating Statement of Comprehensive Income

|  | Six Months Ended June 30, 2018
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Net income |  | $ | 657 |  |  | $ | 598 |  |  | $ | 1,826 |  |  | $ | (2,413 | ) |  | $ | 668 |
Less: Net income attributable to noncontrolling interests |  | — |  |  | — |  |  | 26 |  |  | — |  |  | 26 |
Net income attributable to Aon shareholders |  | 657 |  |  | 598 |  |  | 1,800 |  |  | (2,413 | ) |  | 642 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |
Change in fair value of financial instruments |  | — |  |  | (1 | ) |  | 14 |  |  | — |  |  | 13 |
Foreign currency translation adjustments |  | — |  |  | — |  |  | (228 | ) |  | 15 |  |  | (213 | )
Postretirement benefit obligation |  | — |  |  | 22 |  |  | 148 |  |  | — |  |  | 170 |
Total other comprehensive income (loss) |  | — |  |  | 21 |  |  | (66 | ) |  | 15 |  |  | (30 | )
Equity in other comprehensive income (loss) of subsidiaries, net of tax |  | (42 | ) |  | (60 | ) |  | (39 | ) |  | 141 |  |  | — |
Less: Other comprehensive income (loss) attributable to noncontrolling interests |  | — |  |  | — |  |  | (3 | ) |  | — |  |  | (3 | )
Total other comprehensive income (loss) attributable to Aon shareholders |  | (42 | ) |  | (39 | ) |  | (102 | ) |  | 156 |  |  | (27 | )
Comprehensive income attributable (loss) to Aon shareholders |  | $ | 615 |  |  | $ | 559 |  |  | $ | 1,698 |  |  | $ | (2,257 | ) |  | $ | 615 |

33

Condensed Consolidating Statement of Financial Position

|  | As of June 30, 2019
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 1,371 |  |  | $ | 537 |  |  | $ | (1,327 | ) |  | $ | 581 |
Short-term investments |  | — |  |  | 125 |  |  | 110 |  |  | — |  |  | 235 |
Receivables, net |  | — |  |  | — |  |  | 3,227 |  |  | — |  |  | 3,227 |
Fiduciary assets |  | — |  |  | — |  |  | 12,071 |  |  | — |  |  | 12,071 |
Current intercompany receivables |  | 167 |  |  | 3,421 |  |  | 12,843 |  |  | (16,431 | ) |  | — |
Other current assets |  | — |  |  | 10 |  |  | 621 |  |  | — |  |  | 631 |
Total current assets |  | 167 |  |  | 4,927 |  |  | 29,409 |  |  | (17,758 | ) |  | 16,745 |
Goodwill |  | — |  |  | — |  |  | 8,198 |  |  | — |  |  | 8,198 |
Intangible assets, net |  | — |  |  | — |  |  | 973 |  |  | — |  |  | 973 |
Fixed assets, net |  | — |  |  | — |  |  | 599 |  |  | — |  |  | 599 |
Operating lease right-of-use assets |  | — |  |  | 112 |  |  | 847 |  |  | — |  |  | 959 |
Deferred tax assets |  | 93 |  |  | 498 |  |  | 150 |  |  | (142 | ) |  | 599 |
Prepaid pension |  | — |  |  | 5 |  |  | 1,208 |  |  | — |  |  | 1,213 |
Non-current intercompany receivables |  | 404 |  |  | 261 |  |  | 7,200 |  |  | (7,865 | ) |  | — |
Other non-current assets |  | 1 |  |  | 28 |  |  | 492 |  |  | — |  |  | 521 |
Investment in subsidiary |  | 8,937 |  |  | 20,147 |  |  | (424 | ) |  | (28,660 | ) |  | — |
Total assets |  | $ | 9,602 |  |  | $ | 25,978 |  |  | $ | 48,652 |  |  | $ | (54,425 | ) |  | $ | 29,807 |
Liabilities and equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 582 |  |  | $ | 57 |  |  | $ | 2,057 |  |  | $ | (1,327 | ) |  | $ | 1,369 |
Short-term debt and current portion of long-term debt |  | 569 |  |  | 275 |  |  | — |  |  | — |  |  | 844 |
Fiduciary liabilities |  | — |  |  | — |  |  | 12,071 |  |  | — |  |  | 12,071 |
Current intercompany payables |  | 378 |  |  | 14,633 |  |  | 1,420 |  |  | (16,431 | ) |  | — |
Other current liabilities |  | — |  |  | 78 |  |  | 1,119 |  |  | — |  |  | 1,197 |
Total current liabilities |  | 1,529 |  |  | 15,043 |  |  | 16,667 |  |  | (17,758 | ) |  | 15,481 |
Long-term debt |  | 4,234 |  |  | 2,506 |  |  | — |  |  | — |  |  | 6,740 |
Non-current operating lease liabilities |  | — |  |  | 149 |  |  | 813 |  |  | — |  |  | 962 |
Deferred tax liabilities |  | — |  |  | — |  |  | 353 |  |  | (142 | ) |  | 211 |
Pension, other postretirement, and postemployment liabilities |  | — |  |  | 1,232 |  |  | 344 |  |  | — |  |  | 1,576 |
Non-current intercompany payables |  | — |  |  | 7,366 |  |  | 499 |  |  | (7,865 | ) |  | — |
Other non-current liabilities |  | 3 |  |  | 106 |  |  | 815 |  |  | — |  |  | 924 |
Total liabilities |  | 5,766 |  |  | 26,402 |  |  | 19,491 |  |  | (25,765 | ) |  | 25,894 |
Equity |  |  |  |  |  |  |  |  |  |
Total Aon shareholders’ equity |  | 3,836 |  |  | (424 | ) |  | 29,084 |  |  | (28,660 | ) |  | 3,836 |
Noncontrolling interests |  | — |  |  | — |  |  | 77 |  |  | — |  |  | 77 |
Total equity |  | 3,836 |  |  | (424 | ) |  | 29,161 |  |  | (28,660 | ) |  | 3,913 |
Total liabilities and equity |  | $ | 9,602 |  |  | $ | 25,978 |  |  | $ | 48,652 |  |  | $ | (54,425 | ) |  | $ | 29,807 |

34

Condensed Consolidating Statement of Financial Position

|  | As of December 31, 2018
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 862 |  |  | $ | 575 |  |  | $ | (781 | ) |  | $ | 656 |
Short-term investments |  | — |  |  | 56 |  |  | 116 |  |  | — |  |  | 172 |
Receivables, net |  | — |  |  | — |  |  | 2,760 |  |  | — |  |  | 2,760 |
Fiduciary assets |  | — |  |  | — |  |  | 10,166 |  |  | — |  |  | 10,166 |
Current intercompany receivables |  | 191 |  |  | 897 |  |  | 11,634 |  |  | (12,722 | ) |  | — |
Other current assets |  | — |  |  | 16 |  |  | 602 |  |  | — |  |  | 618 |
Total current assets |  | 191 |  |  | 1,831 |  |  | 25,853 |  |  | (13,503 | ) |  | 14,372 |
Goodwill |  | — |  |  | — |  |  | 8,171 |  |  | — |  |  | 8,171 |
Intangible assets, net |  | — |  |  | — |  |  | 1,149 |  |  | — |  |  | 1,149 |
Fixed assets, net |  | — |  |  | — |  |  | 588 |  |  | — |  |  | 588 |
Operating lease right-of-use assets |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Deferred tax assets |  | 94 |  |  | 467 |  |  | 144 |  |  | (144 | ) |  | 561 |
Prepaid pension |  | — |  |  | 5 |  |  | 1,128 |  |  | — |  |  | 1,133 |
Non-current intercompany receivables |  | 403 |  |  | 261 |  |  | 7,225 |  |  | (7,889 | ) |  | — |
Other non-current assets |  | 1 |  |  | 30 |  |  | 417 |  |  | — |  |  | 448 |
Investment in subsidiary |  | 8,433 |  |  | 19,132 |  |  | (882 | ) |  | (26,683 | ) |  | — |
Total assets |  | $ | 9,122 |  |  | $ | 21,726 |  |  | $ | 43,793 |  |  | $ | (48,219 | ) |  | $ | 26,422 |
Liabilities and equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 274 |  |  | $ | 70 |  |  | $ | 2,380 |  |  | $ | (781 | ) |  | $ | 1,943 |
Short-term debt and current portion of long-term debt |  | 250 |  |  | — |  |  | 1 |  |  | — |  |  | 251 |
Fiduciary liabilities |  | — |  |  | — |  |  | 10,166 |  |  | — |  |  | 10,166 |
Current intercompany payables |  | 213 |  |  | 11,875 |  |  | 634 |  |  | (12,722 | ) |  | — |
Other current liabilities |  | — |  |  | 69 |  |  | 867 |  |  | — |  |  | 936 |
Total current liabilities |  | 737 |  |  | 12,014 |  |  | 14,048 |  |  | (13,503 | ) |  | 13,296 |
Long-term debt |  | 4,231 |  |  | 1,762 |  |  | — |  |  | — |  |  | 5,993 |
Non-current operating lease liabilities |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Deferred tax liabilities |  | — |  |  | — |  |  | 325 |  |  | (144 | ) |  | 181 |
Pension, other postretirement, and postemployment liabilities |  | — |  |  | 1,275 |  |  | 361 |  |  | — |  |  | 1,636 |
Non-current intercompany payables |  | — |  |  | 7,390 |  |  | 499 |  |  | (7,889 | ) |  | — |
Other non-current liabilities |  | 3 |  |  | 167 |  |  | 927 |  |  | — |  |  | 1,097 |
Total liabilities |  | 4,971 |  |  | 22,608 |  |  | 16,160 |  |  | (21,536 | ) |  | 22,203 |
Equity |  |  |  |  |  |  |  |  |  |
Total Aon shareholders’ equity |  | 4,151 |  |  | (882 | ) |  | 27,565 |  |  | (26,683 | ) |  | 4,151 |
Noncontrolling interests |  | — |  |  | — |  |  | 68 |  |  | — |  |  | 68 |
Total equity |  | 4,151 |  |  | (882 | ) |  | 27,633 |  |  | (26,683 | ) |  | 4,219 |
Total liabilities and equity |  | $ | 9,122 |  |  | $ | 21,726 |  |  | $ | 43,793 |  |  | $ | (48,219 | ) |  | $ | 26,422 |

35

Condensed Consolidating Statement of Cash Flows

|  | Six Months Ended June 30, 2019
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |
Cash provided by (used for) operating activities |  | $ | 366 |  |  | $ | (110 | ) |  | $ | 690 |  |  | $ | (585 | ) |  | $ | 361 |
Cash flows from investing activities |  |  |  |  |  |  |  |  |  |
Proceeds from investments |  | — |  |  | 9 |  |  | 5 |  |  | — |  |  | 14 |
Payments for investments |  | — |  |  | (19 | ) |  | (41 | ) |  | — |  |  | (60 | )
Net sales (purchases) of short-term investments - non-fiduciary |  | — |  |  | (69 | ) |  | 7 |  |  | — |  |  | (62 | )
Acquisition of businesses, net of cash acquired |  | — |  |  | — |  |  | (15 | ) |  | — |  |  | (15 | )
Sale of businesses, net of cash sold |  | — |  |  | — |  |  | 7 |  |  | — |  |  | 7 |
Capital expenditures |  | — |  |  | — |  |  | (106 | ) |  | — |  |  | (106 | )
Cash provided by (used for) investing activities |  | — |  |  | (79 | ) |  | (143 | ) |  | — |  |  | (222 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |
Share repurchase |  | (1,155 | ) |  | — |  |  | — |  |  | — |  |  | (1,155 | )
Advances from (to) affiliates |  | 823 |  |  | (320 | ) |  | (542 | ) |  | 39 |  |  | — |
Issuance of shares for employee benefit plans |  | (144 | ) |  | — |  |  | — |  |  | — |  |  | (144 | )
Issuance of debt |  | 1,219 |  |  | 2,340 |  |  | — |  |  | — |  |  | 3,559 |
Repayment of debt |  | (906 | ) |  | (1,322 | ) |  | — |  |  | — |  |  | (2,228 | )
Cash dividends to shareholders |  | (203 | ) |  | — |  |  | — |  |  | — |  |  | (203 | )
Noncontrolling interests and other financing activities |  | — |  |  | — |  |  | (61 | ) |  | — |  |  | (61 | )
Cash provided by (used for) financing activities |  | (366 | ) |  | 698 |  |  | (603 | ) |  | 39 |  |  | (232 | )
Effect of exchange rate changes on cash and cash equivalents |  | — |  |  | — |  |  | 18 |  |  | — |  |  | 18 |
Net increase (decrease) in cash and cash equivalents |  | — |  |  | 509 |  |  | (38 | ) |  | (546 | ) |  | (75 | )
Cash and cash equivalents at beginning of period |  | — |  |  | 862 |  |  | 575 |  |  | (781 | ) |  | 656 |
Cash and cash equivalents at end of period |  | $ | — |  |  | $ | 1,371 |  |  | $ | 537 |  |  | $ | (1,327 | ) |  | $ | 581 |

36

Condensed Consolidating Statement of Cash Flows

|  | Six Months Ended June 30, 2018
(millions) |  | Aon plc |  | Aon Corporation |  | Other Non-Guarantor Subsidiaries |  | Consolidating Adjustments |  | Consolidated
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |
Cash provided by (used for) operating activities |  | $ | (126 | ) |  | $ | 582 |  |  | $ | 759 |  |  | $ | (802 | ) |  | $ | 413 |
Cash flows from investing activities |  |  |  |  |  |  |  |  |  |
Proceeds from investments |  | — |  |  | 13 |  |  | 10 |  |  | — |  |  | 23 |
Payments for investments |  | (12 | ) |  | (17 | ) |  | (19 | ) |  | 12 |  |  | (36 | )
Net sales (purchases) of short-term investments - non-fiduciary |  | — |  |  | 296 |  |  | 56 |  |  | — |  |  | 352 |
Acquisition of businesses, net of cash acquired |  | — |  |  | — |  |  | (50 | ) |  | — |  |  | (50 | )
Sale of businesses, net of cash sold |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Capital expenditures |  | — |  |  | — |  |  | (111 | ) |  | — |  |  | (111 | )
Cash provided by (used for) investing activities |  | (12 | ) |  | 292 |  |  | (113 | ) |  | 12 |  |  | 179 |
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |
Share repurchase |  | (971 | ) |  | — |  |  | — |  |  | — |  |  | (971 | )
Advances from (to) affiliates |  | 965 |  |  | (810 | ) |  | (395 | ) |  | 240 |  |  | — |
Issuance of shares for employee benefit plans |  | (150 | ) |  | — |  |  | — |  |  | — |  |  | (150 | )
Issuance of debt |  | 752 |  |  | 1,800 |  |  | — |  |  | — |  |  | 2,552 |
Repayment of debt |  | (272 | ) |  | (1,461 | ) |  | (294 | ) |  | — |  |  | (2,027 | )
Cash dividends to shareholders |  | (187 | ) |  | — |  |  | — |  |  | — |  |  | (187 | )
Noncontrolling interests and other financing activities |  | — |  |  | — |  |  | (15 | ) |  | — |  |  | (15 | )
Cash provided by (used for) financing activities |  | 137 |  |  | (471 | ) |  | (704 | ) |  | 240 |  |  | (798 | )
Effect of exchange rate changes on cash and cash equivalents |  | — |  |  | — |  |  | (63 | ) |  | — |  |  | (63 | )
Net increase (decrease) in cash and cash equivalents |  | (1 | ) |  | 403 |  |  | (121 | ) |  | (550 | ) |  | (269 | )
Cash and cash equivalents at beginning of period |  | 1 |  |  | 2,524 |  |  | 793 |  |  | (2,562 | ) |  | 756 |
Cash and cash equivalents at end of period |  | $ | — |  |  | $ | 2,927 |  |  | $ | 672 |  |  | $ | (3,112 | ) |  | $ | 487 |

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20. Lease Commitments
The Company leases office facilities, equipment, and automobiles under non-cancelable operating and finance leases. The Company’s lease obligations are primarily for the use of office space. The Company evaluates if a leasing arrangement exists upon inception of a contract. A contract contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Identified property, plant, or equipment may include a physically distinct portion of a larger asset, or a portion of an asset that represents substantially all of the capacity of the asset but is not physically distinct. The Company assesses whether a contract implicitly contains the right to control the use of a tangible asset that is not already owned. In addition, the Company subleases certain real estate properties to third parties, which consist of operating leases.
The Company’s leases expire at various dates and may contain renewal and expansion options. The exercise of lease renewal and expansion options are at the Company’s sole discretion and are only included in the determination of the lease term if the Company is reasonably certain to exercise the option. The Company’s leases do not typically contain termination options. In addition, the Company’s lease agreements typically do not contain any material residual value guarantees or restrictive covenants.
ROU assets and lease liabilities are based on the present value of the minimum lease payments over the lease term. As stated in Note 2 “Accounting Principles and Practices”, the Company has elected the practical expedient related to lease and non-lease components, as an accounting policy election for all asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration received in a contract as a single lease component.
A portion of the Company’s lease agreements include variable lease payments that are not recorded in the initial measurement of the lease liability and ROU asset balances. For real estate arrangements, base rental payments may be escalated according to annual changes in the Consumer Price Index (“CPI”) or other indices. The escalated rental payments based on the estimated CPI at the lease commencement date are included within minimum rental payments; however, changes in CPI are considered variable in nature and are recognized as variable lease costs in the period in which the obligation is incurred. Additionally, real estate lease agreements may include other variable payments related to operating expenses charged by the landlord based on actual expenditures. Information technology equipment agreements may include variable payments based on usage of the equipment.
The Company utilizes discount rates to determine the present value of the lease payments based on information available at the commencement date of the lease. The Company uses an incremental borrowing rate based on factors such as the lease term and the economic environment where the lease exists to determine the appropriate present value of future lease payments as the rate implicit in the lease is not always readily available. When determining the incremental borrowing rate, the Company considers the rate of interest it would pay on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms.
Operating leases are included in Operating lease right-of-use assets, Other current liabilities, and Non-current operating lease liabilities on the Condensed Consolidated Statements of Financial Position. Finance leases are included in Other non-current assets, Other current liabilities, and Other non-current liabilities on the Condensed Consolidated Statements of Financial Position.
The classification of operating and finance lease asset and liability balances within the Condensed Consolidated Statements of Financial Position is as follows (in millions):

As of |  | June 30, 2019
Assets |  |
Operating lease assets | Operating lease right-of-use assets | $ | 959 |
Finance lease assets | Other non-current assets | 65 |
Total lease assets |  | $ | 1,024 |
Liabilities |  |
Current lease liabilities |  |
Operating | Other current liabilities | $ | 199 |
Finance | Other current liabilities | 27 |
Non-current lease liabilities |  |
Operating | Non-current operating lease liabilities | 962 |
Finance | Other non-current liabilities | 37 |
Total lease liabilities |  | $ | 1,225 |

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The components of lease costs are as follows (in millions):

| Three Months Ended June 30, 2019 |  | Six Months Ended June 30, 2019
Operating lease cost | $ | 65 |  |  | $ | 133 |
Finance lease costs |  |  |
Amortization of leased assets | 6 |  |  | 13 |
Interest on lease liabilities | — |  |  | 1 |
Variable lease cost | 12 |  |  | 18 |
Short-term lease cost (1) | 1 |  |  | 2 |
Sublease income | (8 | ) |  | (16 | )
Net lease cost | $ | 76 |  |  | $ | 151 |

(1) Short-term lease cost does not include expenses related to leases with a lease term of one month or less.
Weighted average remaining lease term and discount rate related to operating and finance leases are as follows:

As of | June 30, 2019
Weighted average remaining lease term (years) |
Operating leases | 8.0 |
Finance leases | 2.5 |
Weighted average discount rate |
Operating leases | 3.3 | %
Finance leases | 2.4 | %

Other cash and non-cash related activities are as follows (in millions):

| Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities |
Operating cash flows for operating leases | $ | 116 |
Non-cash related activities |
ROU assets obtained in exchange for new operating lease liabilities | $ | 50 |

The Company has recorded non-cash changes in Operating lease ROU assets and Non-current operating lease liabilities through Other assets and liabilities in cash flows from operations within the Condensed Consolidated Statements of Cash Flows. Non-cash ROU asset lease expense was $68 million and the change in Non-current operating lease liabilities was a decrease of $52 million for the six months ended June 30, 2019.
Maturity analysis of operating and finance leases as of June 30, 2019 are as follows (in millions):

| Operating |  | Finance |  | Less: |  |
| Leases |  | Leases |  | Subleases |  | Total
Remainder of 2019 | $ | 127 |  |  | $ | 14 |  |  | $ | (17 | ) |  | $ | 124 |
2020 | 248 |  |  | 28 |  |  | (34 | ) |  | 242 |
2021 | 224 |  |  | 22 |  |  | (33 | ) |  | 213 |
2022 | 198 |  |  | 2 |  |  | (34 | ) |  | 166 |
2023 | 144 |  |  | — |  |  | (15 | ) |  | 129 |
Thereafter | 511 |  |  | — |  |  | (8 | ) |  | 503 |
Total undiscounted future minimum lease payments | $ | 1,452 |  |  | $ | 66 |  |  | $ | (141 | ) |  | $ | 1,377 |
Less: Imputed interest | (151 | ) |  | (1 | ) |  | — |  |  | (152 | )
Present value of lease liabilities | $ | 1,301 |  |  | $ | 65 |  |  | $ | (141 | ) |  | $ | 1,225 |

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At December 31, 2018, future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows (in millions):

Year Ended December 31, 2018 | Gross rental commitments |  | Rentals from subleases |  | Net rental commitments
2019 | $ | 303 |  |  | $ | (34 | ) |  | $ | 269 |
2020 | 253 |  |  | (30 | ) |  | 223 |
2021 | 221 |  |  | (30 | ) |  | 191 |
2022 | 182 |  |  | (30 | ) |  | 152 |
2023 | 148 |  |  | (12 | ) |  | 136 |
Thereafter | 472 |  |  | (5 | ) |  | 467 |
Total minimum payments required | $ | 1,579 |  |  | $ | (141 | ) |  | $ | 1,438 |

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
EXECUTIVE SUMMARY OF SECOND QUARTER 2019 FINANCIAL RESULTS
Aon plc (“Aon”, the “Company”, “we”, or “our”) is a leading global professional services firm providing a broad range of risk, retirement, and health solutions underpinned by proprietary data and analytics. Management is leading a set of initiatives designed to strengthen Aon and unite the firm with one portfolio of capability enabled by proprietary data and analytics and one operating model to deliver additional insight, connectivity, and efficiency.
Financial Results
The following is a summary of our second quarter of 2019 financial results from continuing operations:

• | For the second quarter of 2019, revenue increased $45 million, or 2%, to $2.6 billion compared to the prior year period due primarily to organic revenue growth of 6%, partially offset by a 3% unfavorable impact from translating prior year period results at current period foreign exchange rates (“foreign currency translation”) and a 1% unfavorable impact related to divestitures, net of acquisitions. For the six months ended June 30, 2019, revenue increased $98 million, or 2%, to $5,749 million compared to the prior year period due primarily to organic revenue growth of 6%, partially offset by a 4% unfavorable impact from foreign currency translation.

• | Operating expenses for the second quarter of 2019 were $2.2 billion, a decrease of $384 million compared to the prior year period. The decrease was due primarily to a $176 million decrease from a non-cash impairment charge related to certain assets and liabilities that were classified as held for sale in the prior year period, a $103 million decrease in expense related to legacy litigation, a $74 million favorable impact from foreign currency translation, a $68 million decrease in restructuring charges, $38 million of incremental savings related to restructuring and other operational improvement initiatives, and a $21 million decrease in expenses related to divestitures, net of acquisitions, partially offset by an increase in expense associated with 6% organic revenue growth. Operating expenses for the first six months of 2019 decreased $404 million compared to the prior year period primarily due to a $176 million decrease from a non-cash impairment charge related to certain assets and liabilities that were classified as held for sale in the prior year period, a $167 million favorable impact from foreign currency translation, a $103 million decrease in expense related to legacy litigation, $83 million of incremental savings related to restructuring and other operational improvement initiatives, a $51 million decrease in restructuring charges, and a $42 million decrease in expenses related to divestitures, net of acquisitions, partially offset by an increase in expense associated with 6% organic revenue growth.

• | Operating margin increased to 15.8% in the second quarter of 2019 from (0.6)% in the prior year period. Operating margin for the first six months of 2019 increased to 22.4% from 13.9% in the prior year period. The increase in both periods was driven by organic revenue growth of 6%, core operational improvement, savings related to restructuring and other operational improvement initiatives, a decrease from a non-cash impairment charge related to certain assets and liabilities that were classified as held for sale in the prior year period, and a decrease in expense related to legacy litigation.

• | Due to the factors set forth above, net income from continuing operations increased $230 million, or 404%, to $287 million for the second quarter of 2019 compared to the prior year period. During the first six months of 2019, net income from continuing operations increased $302 million, or 45.7%, to $963 million compared to the first six months of 2018.

• | Diluted earnings per share from continuing operations was $1.14 per share for the second quarter of 2019 compared to $0.19 per share for the prior year period. During the first six months of 2019, diluted earnings per share from continuing operations was $3.85 per share compared to $2.55 per share for the prior year period.

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• | Cash flow provided by operating activities was $361 million for the first six months of 2019, a decrease of $52 million from the prior year period. Approximately $85 million of net cash payments in the first quarter related to legacy litigation were partially offset by strong operational improvement and a $26 million decrease in restructuring cash outlays.

We focus on four key non-GAAP metrics 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 Financial Statements. The following is our measure of performance against these four metrics from continuing operations for the second quarter of 2019:

• | Organic revenue growth, a non-GAAP measure defined under the caption “Review of Consolidated Results — Organic Revenue Growth,” was 6% for the second quarter of 2019, an acceleration from 5% in the prior year period. Organic revenue growth was 6% for the first six months of 2019, an acceleration from 4% in the prior year period. Organic revenue growth in both periods was driven by growth across every major revenue line, with particular strength in Reinsurance Solutions and Commercial Risk Solutions.

• | Adjusted operating margin, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Operating Margin,” was 24.4% for the second quarter of 2019 compared to 22.0% in the prior year period. For the first six months of 2019, adjusted operating margin was 29.5% compared to 27.4% for the prior year period. The increase in adjusted operating margin in both periods primarily reflects organic revenue growth of 6%, core operational improvement, and savings related to restructuring and other operational improvement initiatives.

• | Adjusted diluted earnings per share from continuing operations, a non-GAAP measure defined under the caption “Review of Consolidated Results — Adjusted Diluted Earnings per Share,” was $1.87 per share for the second quarter of 2019 and $5.19 in the first six months of 2019, compared to $1.71 and $4.69 per share for the respective prior year periods.

• | Free cash flow, a non-GAAP measure defined under the caption “Review of Consolidated Results — Free Cash Flow,” decreased in the first six months of 2019 by $47 million, or 16%, from the prior year period, to $255 million, reflecting a decrease in cash flow from operations, partially offset by an $5 million decrease in capital expenditures.

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REVIEW OF CONSOLIDATED RESULTS
Summary of Results
Our consolidated results are as follow (in millions):

|  | Three Months Ended |  | Six Months Ended
|  | June 30, 2019 |  | June 30, 2018 |  | June 30, 2019 |  | June 30, 2018
Revenue |  |  |  |  |  |  |  |  |  |
Total revenue |  | $ | 2,606 |  |  | $ | 2,561 |  |  | $ | 5,749 |  |  | $ | 5,651 |
Expenses |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | 1,501 |  |  | 1,494 |  |  | 3,085 |  |  | 3,110 |
Information technology |  | 126 |  |  | 123 |  |  | 243 |  |  | 238 |
Premises |  | 85 |  |  | 96 |  |  | 172 |  |  | 189 |
Depreciation of fixed assets |  | 40 |  |  | 47 |  |  | 80 |  |  | 86 |
Amortization and impairment of intangible assets |  | 97 |  |  | 282 |  |  | 194 |  |  | 392 |
Other general expenses |  | 344 |  |  | 535 |  |  | 690 |  |  | 853 |
Total operating expenses |  | 2,193 |  |  | 2,577 |  |  | 4,464 |  |  | 4,868 |
Operating income (loss) |  | 413 |  |  | (16 | ) |  | 1,285 |  |  | 783 |
Interest income |  | 1 |  |  | 1 |  |  | 3 |  |  | 5 |
Interest expense |  | (77 | ) |  | (69 | ) |  | (149 | ) |  | (139 | )
Other income (expense) |  | 6 |  |  | (3 | ) |  | 6 |  |  | (18 | )
Income (loss) from continuing operations before income taxes |  | 343 |  |  | (87 | ) |  | 1,145 |  |  | 631 |
Income tax expense (benefit) |  | 56 |  |  | (144 | ) |  | 182 |  |  | (30 | )
Net income from continuing operations |  | 287 |  |  | 57 |  |  | 963 |  |  | 661 |
Net income from discontinued operations |  | — |  |  | 1 |  |  | — |  |  | 7 |
Net income |  | 287 |  |  | 58 |  |  | 963 |  |  | 668 |
Less: Net income attributable to noncontrolling interests |  | 10 |  |  | 10 |  |  | 27 |  |  | 26 |
Net income attributable to Aon shareholders |  | $ | 277 |  |  | $ | 48 |  |  | $ | 936 |  |  | $ | 642 |
Diluted net income per share attributable to Aon shareholders |  |  |  |  |  |  |  |
Continuing operations |  | $ | 1.14 |  |  | $ | 0.19 |  |  | $ | 3.85 |  |  | $ | 2.55 |
Discontinued operations |  | — |  |  | — |  |  | — |  |  | 0.03 |
Net income |  | $ | 1.14 |  |  | $ | 0.19 |  |  | $ | 3.85 |  |  | $ | 2.58 |
Weighted average ordinary shares outstanding - diluted |  | 242.8 |  |  | 247.4 |  |  | $ | 243.2 |  |  | 248.8 |

Revenue
Total revenue increased by $45 million, or 2%, in the second quarter of 2019 compared to the second quarter of 2018. This increase reflects organic revenue growth of 6%, partially offset by a 3% unfavorable impact from foreign currency translation and a 1% unfavorable impact related to divestitures, net of acquisitions. For the first six months of 2019, revenue increased by $98 million, or 2%, compared to the prior year period. This change reflects organic revenue growth of 6%, partially offset by a 4% unfavorable impact from foreign currency translation.
Commercial Risk Solutions revenue increased $1 million to $1,167 million in the second quarter of 2019, compared to $1,166 million in the second quarter of 2018. For the first six months of 2019, revenue decreased $65 million, or 3%, to $2,285 million, compared to $2,350 million in the first six months of 2018. Organic revenue growth was 6% in each of the second quarter of 2019 and the first six months of 2019 compared to the prior year periods, reflecting solid growth globally driven by strong new business generation and management of the renewal book portfolio.
Reinsurance Solutions revenue increased $40 million, or 11%, to $420 million in the second quarter of 2019, compared to $380 million in the second quarter of 2018. For the first six months of 2019, revenue increased $86 million, or 8%, to $1,208 million, compared to $1,122 million in the first six months of 2018. Organic revenue growth was 12% in the second quarter of 2019 and 10% in the first six months of 2019 compared to the prior year periods. Growth in both periods was driven by strong net
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new business generation globally in treaty, as well as strong growth globally in facultative placements. In addition, market impact was modestly positive on results in the both periods.
Retirement Solutions revenue decreased $12 million, or 3%, to $419 million in the second quarter of 2019, compared to $431 million in the second quarter of 2018. For the first six months of 2019, revenue decreased $16 million, or 2%, to $839 million, compared to $855 million in the first six months of 2018. Organic revenue growth was 1% in each of the second quarter of 2019 and the first six months of 2019 compared to the prior year periods, primarily driven by solid growth in delegated investment management and in our rewards and assessment businesses within the Human Capital practice, partially offset by an unfavorable impact from certain businesses that were divested in the second quarter.
Health Solutions revenue increased $8 million, or 3%, to $317 million in the second quarter of 2019, compared to $309 million in the second quarter of 2018. For the first six months of 2019, revenue increased $43 million, or 6%, to $803 million, compared to $760 million in the first six months of 2018. Organic revenue growth was 6% in the second quarter of 2019 and 5% in the first six months of 2019. Growth in both periods was driven by solid growth globally in health and benefits brokerage, highlighted by particular strength internationally in Asia and continental Europe.
Data & Analytic Services revenue increased $9 million, or 3%, to $286 million in the second quarter of 2019, compared to $277 million in the second quarter of 2018. For the first six months of 2019, revenue increased $51 million, or 9%, to $622 million, compared to $571 million in the first six months of 2018. Organic revenue growth was 4% in each of the second quarter of 2019 and the first six months of 2019 compared to the prior year periods, driven by growth globally across our Affinity business, with particular strength across both business and consumer solutions in the U.S.
Compensation and Benefits
Compensation and benefits increased $7 million in the second quarter of 2019 compared to the second quarter of 2018. This increase was primarily driven by a $45 million increase in restructuring charges and an increase in expense associated with 6% organic revenue growth, partially offset by a $53 million favorable impact from foreign currency translation, $19 million of incremental savings related to restructuring and other operational improvement initiatives, and an $11 million decrease in expenses related to divestitures, net of acquisitions. For the first six months of 2019, compensation and benefits decreased $25 million, or 1%, compared to the first six months of 2018. The decrease was primarily driven by a $122 million favorable impact from foreign currency translation, $67 million of incremental savings related to restructuring and other operational improvement initiatives, and a $20 million decrease in expenses related to divestitures, net of acquisitions, partially offset by a $36 million increase in restructuring charges and an increase in expense associated with 6% organic revenue growth.
Information Technology
Information technology, which represents costs associated with supporting and maintaining our infrastructure, increased $3 million, or 2%, in the second quarter of 2019 compared to the second quarter of 2018. This increase was primarily driven by an increase in investments supporting growth initiatives and an increase in expense associated with 6% organic revenue growth, partially offset by a $4 million decrease in restructuring charges. For the first six months of 2019, Information technology increased $5 million, or 2%, compared to the first six months of 2018. This increase was primarily driven by an increase in investments supporting growth initiatives and an increase in expense associated with 6% organic revenue growth, partially offset by a $6 million favorable impact from foreign currency translation, a $4 million decrease in expenses related to divestitures, net of acquisitions, and a $3 million decrease in restructuring charges.
Premises
Premises, which represents the cost of occupying offices in various locations throughout the world, decreased $11 million, or 11%, in the second quarter of 2019 compared to the second quarter of 2018. This decrease was primarily driven by a $6 million decrease in restructuring charges, $5 million of incremental savings related to restructuring and other operational improvement initiatives, and a $4 million favorable impact from foreign currency translation. For the first six months of 2019, Premises decreased $17 million, or 9%, compared to the first six months of 2018. This decrease was primarily driven by $10 million of incremental savings related to restructuring and other operational improvement initiatives and an $8 million favorable impact from foreign currency translation.
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 decreased $7 million, or 15%, in the second quarter of 2019 compared to the second quarter of 2018. This decrease was primarily driven by a $6 million decrease in restructuring charges. For the first six months of 2019, Depreciation of fixed assets decreased $6 million, or 7%, compared to the first six months of 2018. This decrease was primarily driven by a $7 million decrease in restructuring charges.
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Amortization and Impairment of Intangibles Assets
Amortization and impairment of intangibles primarily relates to finite-lived tradenames and customer-related, contract-based, and technology assets. Amortization and impairment of intangibles decreased $185 million, or 66%, in the second quarter of 2019 compared to the second quarter of 2018, and decreased $198 million, or 51%, for the first six months of 2019 compared to the first six months of 2018. The prior year periods included a $176 million non-cash impairment charge related to certain assets and liabilities that were classified as held for sale.
Other General Expenses
Other general expenses in the second quarter of 2019 decreased $191 million, or 36%, compared to the second quarter of 2018 due primarily to a $103 million decrease in expense related to legacy litigation, a $97 million decrease in restructuring charges, $19 million of incremental savings related to restructuring and other operational improvement initiatives, and an $11 million favorable impact related to foreign currency translation, partially offset by an increase in expense associated with 6% organic revenue growth. For the first six months of 2019, Other general expenses decreased $163 million, or 19%, compared to the prior year period. This decrease was primarily driven by a $103 million decrease in expense related to legacy litigation, a $78 million decrease in restructuring charges, a $25 million favorable impact from foreign currency translation, and $10 million of incremental savings related to restructuring and other operational improvement initiatives, partially offset by an increase in expense associated with 6% organic revenue growth.
Interest Income
Interest income represents income 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 second quarter of 2019, Interest income was $1 million, similar to the prior year period. For the first six months of 2019, Interest income was $3 million, compared to $5 million during the prior year period.
Interest Expense
Interest expense, which represents the cost of our debt obligations, was $77 million for the three months ended June 30, 2019, an increase of $8 million, or 12%, from the second quarter of 2018. For the first six months of 2019, Interest expense was $149 million, an increase of $10 million, or 7%, from the prior year period. The increase in both periods was due to higher outstanding debt.
Other Income (Expense)
Total other income was $6 million for the second quarter of 2019, compared to other expense of $3 million for the second quarter of 2018. Other income for the second quarter of 2019 primarily includes $11 million of gains due to the favorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies, $5 million of pension and other postretirement income, a $2 million gain on sale of certain businesses, and $1 million of equity earnings, partially offset by $13 million of losses on financial instruments. Other expense of $3 million in the second quarter of 2018 primarily includes $27 million of losses on financial instruments and $7 million of pension and other postretirement expense, partially offset by $29 million of gains due to the favorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies. Other income was $6 million for the first six months of 2019, compared to other expense of $18 million for the prior year period. Other income for the first six months of 2019 primarily includes $9 million of pension and other postretirement income and a $7 million gain on sale of certain businesses, partially offset by $12 million of losses on financial instruments.
Income From Continuing Operations before Income Taxes
Due to the factors discussed above, income from continuing operations before income taxes for the second quarter of 2019 was $343 million, a 494% increase from a loss from continuing operations before income taxes of $87 million in the second quarter of 2018, and income from continuing operations before income taxes was $1,145 million for the first six months of 2019, an 81% increase from $631 million from the first six months of 2018.
Income Taxes From Continuing Operations
The effective tax rates on net income from continuing operations were 16.3% and 165.5% for the second quarter of 2019 and 2018, respectively. The effective tax rates on net income from continuing operations were 15.9% and (4.8)% for the six months ended June 30, 2019 and 2018, respectively.
For the six months ended June 30, 2019, the tax rate was primarily driven by the geographical distribution of income, including restructuring charges, and certain favorable discrete items, including the impact of share-based payments and changes in the assertion for unremitted earnings.
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For the six months ended June 30, 2018, the tax rate was primarily driven by the geographical distribution of income including restructuring charges, legacy litigation and the impairment charge related to certain assets and liabilities classified as held for sale. In addition, certain discrete items favorably impacted the 2018 tax rate including the net tax benefit associated with the anticipated sale of certain assets and liabilities classified as held for sale, the impact of share-based payments, changes in uncertain tax positions and the deferred remeasurement related to the anticipated acceleration of contributions to the qualified U.S. pension plan.
Net Income from Discontinued Operations
Net income from discontinued operations was $0 million in the first three and six months of 2019 compared to net income of $1 million and $7 million in the respective prior year periods.
Net Income Attributable to Aon Shareholders
Net income attributable to Aon shareholders for the second quarter of 2019 increased to $277 million, or $1.14 per diluted share, from $48 million, or $0.19 per diluted share, in the prior year period. Net income attributable to Aon shareholders for the first six months of 2019 increased to $936 million, or $3.85 per diluted share, from $642 million, or $2.58 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, free cash flow, and the impact of foreign exchange rate fluctuations on operating results. This non-GAAP supplemental information should be viewed in addition to, not instead of, our Financial Statements.
Organic Revenue Growth
We use supplemental information related to organic revenue growth to help us and our investors evaluate business growth from existing operations. Organic revenue growth is a non-GAAP measure that 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. 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 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 |  |  |  |  |  |  |  |  |  |
|  | June 30, 2019 |  | June 30, 2018 |  | % Change |  | Less: Currency Impact (1) |  | Less: Fiduciary Investment Income (2) |  | Less: Acquisitions, Divestitures & Other |  | Organic Revenue Growth (3)
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Risk Solutions |  | $ | 1,167 |  |  | $ | 1,166 |  |  | — | % |  | (3 | )% |  | — | % |  | (3 | )% |  | 6 | %
Reinsurance Solutions |  | 420 |  |  | 380 |  |  | 11 |  |  | (2 | ) |  | 1 |  |  | — |  |  | 12 |
Retirement Solutions |  | 419 |  |  | 431 |  |  | (3 | ) |  | (3 | ) |  | — |  |  | (1 | ) |  | 1 |
Health Solutions |  | 317 |  |  | 309 |  |  | 3 |  |  | (5 | ) |  | — |  |  | 2 |  |  | 6 |
Data & Analytic Services |  | 286 |  |  | 277 |  |  | 3 |  |  | (4 | ) |  | — |  |  | 3 |  |  | 4 |
Elimination |  | (3 | ) |  | (2 | ) |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |
Total revenue |  | $ | 2,606 |  |  | $ | 2,561 |  |  | 2 | % |  | (3 | )% |  | — | % |  | (1 | )% |  | 6 | %

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|  | Six Months Ended |  |  |  |  |  |  |  |  |  |
(millions) |  | Jun 30, 2019 |  | Jun 30, 2018 |  | % Change |  | Less: Currency Impact (1) |  | Less: Fiduciary Investment Income (2) |  | Less: Acquisitions, Divestitures & Other |  | Organic Revenue Growth (3)
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Risk Solutions |  | $ | 2,285 |  |  | $ | 2,350 |  |  | (3 | )% |  | (4 | )% |  | — | % |  | (5 | )% |  | 6 | %
Reinsurance Solutions |  | 1,208 |  |  | 1,122 |  |  | 8 |  |  | (2 | ) |  | 1 |  |  | (1 | ) |  | 10 |
Retirement Solutions |  | 839 |  |  | 855 |  |  | (2 | ) |  | (3 | ) |  | — |  |  | — |  |  | 1 |
Health Solutions |  | 803 |  |  | 760 |  |  | 6 |  |  | (5 | ) |  | — |  |  | 6 |  |  | 5 |
Data & Analytic Services |  | 622 |  |  | 571 |  |  | 9 |  |  | (4 | ) |  | — |  |  | 9 |  |  | 4 |
Elimination |  | (8 | ) |  | (7 | ) |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |
Total revenue |  | $ | 5,749 |  |  | $ | 5,651 |  |  | 2 | % |  | (4 | )% |  | — | % |  | — | % |  | 6 | %

(1) | Currency impact is determined by translating prior period's revenue at this period's foreign exchange rates.

(2) | Fiduciary investment income for the three months ended June 30, 2019 and 2018, respectively, was $18 million and $12 million. Fiduciary investment income for the six months ended June 30, 2019 and 2018, respectively, was $37 million and $22 million.

(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.

Adjusted Operating Margin
We use adjusted operating margin as a non-GAAP measure of core operating performance of the Company. 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 Financial Statements.
A reconciliation of this non-GAAP measure to the reported operating margin is as follows (in millions, except percentages):

|  | Three Months Ended |  | Six Months Ended
|  | June 30, 2019 |  | June 30, 2018 |  | June 30, 2019 |  | June 30, 2018
Revenue from continuing operations |  | $ | 2,606 |  |  | $ | 2,561 |  |  | $ | 5,749 |  |  | $ | 5,651 |
Operating income from continuing operations - as reported |  | $ | 413 |  |  | $ | (16 | ) |  | $ | 1,285 |  |  | $ | 783 |
Amortization and impairment of intangible assets(1) |  | 97 |  |  | 282 |  |  | 194 |  |  | 392 |
Restructuring |  | 127 |  |  | 195 |  |  | 218 |  |  | 269 |
Legacy Litigation |  | — |  |  | 103 |  |  | — |  |  | 103 |
Operating income from continuing operations - as adjusted |  | $ | 637 |  |  | $ | 564 |  |  | $ | 1,697 |  |  | $ | 1,547 |
Operating margin from continuing operations - as reported |  | 15.8 | % |  | (0.6 | )% |  | 22.4 | % |  | 13.9 | %
Operating margin from continuing operations - as adjusted |  | 24.4 | % |  | 22.0 | % |  | 29.5 | % |  | 27.4 | %

(1) | Included in the three and six months ended June 30, 2018 was a $176 million non-cash impairment charges taken on certain assets and liabilities held for sale.

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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 items identified above, along with pension settlements and related income taxes, because management does not believe these expenses are representative of our core earnings. 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 Financial Statements and Notes thereto.
A reconciliation of this non-GAAP measure to the reported Diluted earnings per share is as follows (in millions, except per share data and percentages):

|  | Three Months Ended June 30, 2019
|  |  |  |  |  | Non-GAAP
|  | U.S. GAAP |  | Adjustments |  | Adjusted
Operating income from continuing operations |  | $ | 413 |  |  | $ | 224 |  |  | $ | 637 |
Interest income |  | 1 |  |  | — |  |  | 1 |
Interest expense |  | (77 | ) |  | — |  |  | (77 | )
Other income (expense) |  | 6 |  |  | — |  |  | 6 |
Income from continuing operations before income taxes |  | 343 |  |  | 224 |  |  | 567 |
Income taxes (2) |  | 56 |  |  | 46 |  |  | 102 |
Net income from continuing operations |  | 287 |  |  | 178 |  |  | 465 |
Net income from discontinued operations (3) |  | — |  |  | — |  |  | — |
Net income |  | 287 |  |  | 178 |  |  | 465 |
Less: Net income attributable to noncontrolling interests |  | 10 |  |  | — |  |  | 10 |
Net income attributable to Aon shareholders |  | $ | 277 |  |  | $ | 178 |  |  | $ | 455 |
Diluted net income per share attributable to Aon shareholders |  |  |  |  |  |
Continuing operations |  | $ | 1.14 |  |  | $ | 0.73 |  |  | $ | 1.87 |
Discontinued operations |  | — |  |  | — |  |  | — |
Net income |  | $ | 1.14 |  |  | $ | 0.73 |  |  | $ | 1.87 |
Weighted average ordinary shares outstanding - diluted |  | 242.8 |  |  | — |  |  | 242.8 |
Effective Tax Rates (3) |  |  |  |  |  |
Continuing Operations |  | 16.3 | % |  |  |  | 18.0 | %
Discontinued Operations |  | 58.5 | % |  |  |  | 58.5 | %

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|  | Three Months Ended June 30, 2018
|  |  |  |  |  | Non-GAAP
|  | U.S. GAAP |  | Adjustments |  | Adjusted
Operating income (loss) from continuing operations |  | $ | (16 | ) |  | $ | 580 |  |  | $ | 564 |
Interest income |  | 1 |  |  | — |  |  | 1 |
Interest expense |  | (69 | ) |  | — |  |  | (69 | )
Other income (expense) (1) |  | (3 | ) |  | 16 |  |  | 13 |
Income (loss) from continuing operations before income taxes |  | (87 | ) |  | 596 |  |  | 509 |
Income tax expense (benefit) (2) |  | (144 | ) |  | 219 |  |  | 75 |
Net income from continuing operations |  | 57 |  |  | 377 |  |  | 434 |
Net income from discontinued operations (3) |  | 1 |  |  | (1 | ) |  | — |
Net income |  | 58 |  |  | 376 |  |  | 434 |
Less: Net income attributable to noncontrolling interests |  | 10 |  |  | — |  |  | 10 |
Net income attributable to Aon shareholders |  | $ | 48 |  |  | $ | 376 |  |  | $ | 424 |
Diluted net income per share attributable to Aon shareholders |  |  |  |  |  |
Continuing operations |  | $ | 0.19 |  |  | $ | 1.52 |  |  | $ | 1.71 |
Discontinued operations |  | — |  |  | — |  |  | — |
Net income |  | $ | 0.19 |  |  | $ | 1.52 |  |  | $ | 1.71 |
Weighted average ordinary shares outstanding - diluted |  | 247.4 |  |  | — |  |  | 247.4 |
Effective Tax Rates (3) |  |  |  |  |  |
Continuing Operations |  | 165.5 | % |  |  |  | 14.7 | %
Discontinued Operations |  | 1.7 | % |  |  |  | 63.7 | %

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|  | Six Months Ended June 30, 2019
|  |  |  |  |  | Non-GAAP
|  | U.S. GAAP |  | Adjustments |  | Adjusted
Operating income from continuing operations |  | $ | 1,285 |  |  | $ | 412 |  |  | $ | 1,697 |
Interest income |  | 3 |  |  | — |  |  | 3 |
Interest expense |  | (149 | ) |  | — |  |  | (149 | )
Other income (expense) |  | 6 |  |  | — |  |  | 6 |
Income from continuing operations before income taxes |  | 1,145 |  |  | 412 |  |  | 1,557 |
Income taxes (2) |  | 182 |  |  | 87 |  |  | 269 |
Net income from continuing operations |  | 963 |  |  | 325 |  |  | 1,288 |
Net income from discontinued operations (3) |  | — |  |  | — |  |  | — |
Net income |  | 963 |  |  | 325 |  |  | 1,288 |
Less: Net income attributable to noncontrolling interests |  | 27 |  |  | — |  |  | 27 |
Net income attributable to Aon shareholders |  | $ | 936 |  |  | $ | 325 |  |  | $ | 1,261 |
Diluted net income per share attributable to Aon shareholders |  |  |  |  |  |
Continuing operations |  | $ | 3.85 |  |  | $ | 1.34 |  |  | $ | 5.19 |
Discontinued operations |  | — |  |  | — |  |  | — |
Net income |  | $ | 3.85 |  |  | $ | 1.34 |  |  | $ | 5.19 |
Weighted average ordinary shares outstanding - diluted |  | 243.2 |  |  | — |  |  | 243.2 |
Effective Tax Rates (3) |  |  |  |  |  |
Continuing Operations |  | 15.9 | % |  |  |  | 17.3 | %
Discontinued Operations |  | 58.5 | % |  |  |  | 58.5 | %

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|  | Six Months Ended June 30, 2018
|  |  |  |  |  | Non-GAAP
|  | U.S. GAAP |  | Adjustments |  | Adjusted
Operating income from continuing operations |  | $ | 783 |  |  | $ | 764 |  |  | $ | 1,547 |
Interest income |  | 5 |  |  | — |  |  | 5 |
Interest expense |  | (139 | ) |  | — |  |  | (139 | )
Other income (expense) (1) |  | (18 | ) |  | 23 |  |  | 5 |
Income from continuing operations before income taxes |  | 631 |  |  | 787 |  |  | 1,418 |
Income tax expense (benefit) (2) |  | (30 | ) |  | 255 |  |  | 225 |
Net income from continuing operations |  | 661 |  |  | 532 |  |  | 1,193 |
Net income (loss) from discontinued operations (3) |  | 7 |  |  | (9 | ) |  | (2 | )
Net income |  | 668 |  |  | 523 |  |  | 1,191 |
Less: Net income attributable to noncontrolling interests |  | 26 |  |  | — |  |  | 26 |
Net income attributable to Aon shareholders |  | $ | 642 |  |  | $ | 523 |  |  | $ | 1,165 |
Diluted net income per share attributable to Aon shareholders |  |  |  |  |  |
Continuing operations |  | $ | 2.55 |  |  | $ | 2.14 |  |  | $ | 4.69 |
Discontinued operations |  | 0.03 |  |  | (0.04 | ) |  | (0.01 | )
Net income |  | $ | 2.58 |  |  | $ | 2.10 |  |  | $ | 4.68 |
Weighted average ordinary shares outstanding - diluted |  | 248.8 |  |  | — |  |  | 248.8 |
Effective Tax Rates (3) |  |  |  |  |  |
Continuing Operations |  | (4.8 | )% |  |  |  | 15.9 | %
Discontinued Operations |  | 14.7 | % |  |  |  | 49.3 | %

(1) | Adjusted Other income (expense) excludes Pension settlement charges of $16 million for the three months ended June 30, 2018 and $23 million for the six months ended June 30, 2018.

(2) | Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with estimated Restructuring Plan expenses, legacy litigation, accelerated tradename amortization, impairment charges and non-cash pension settlement charges, which are adjusted at the related jurisdictional rate. In addition, tax expense excludes the tax impacts of the sale of the disposal group as well as enactment date impacts of the Tax Cuts and Jobs Act of 2017.

(3) | Adjusted income from discontinued operations, net of tax, excludes the gain on sale of discontinued operations of $1 million for the three months ended June 30, 2018 and $9 million for the six months ended June 30, 2018. The effective tax rate was further adjusted for the applicable tax impact associated with the gain on sale, as applicable.

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 Financial Statements. 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):

|  | Six Months Ended
|  | June 30, 2019 |  | June 30, 2018
Cash Provided by Operating Activities |  | $ | 361 |  |  | $ | 413 |
Capital Expenditures Used for Operations |  | (106 | ) |  | (111 | )
Free Cash Flow Provided By Operations |  | $ | 255 |  |  | $ | 302 |

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Impact of Foreign Exchange Rate Fluctuations
Because we conduct business in more than 100 countries, foreign exchange rate fluctuations 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.
Translating prior year quarter results at current quarter foreign exchange rates, currency fluctuations had an unfavorable impact of $0.03 and an unfavorable impact of $0.15, respectively, on net income per diluted share during the three and six months ended June 30, 2019. Currency fluctuations had an unfavorable impact of $0.02 and a favorable impact of $0.14, respectively, on net income per diluted share during the three and six months ended June 30, 2018, when 2017 results were translated at 2018 rates.
Translating prior year quarter results at current quarter foreign exchange rates, currency fluctuations had an unfavorable impact of $0.05 and an unfavorable impact of $0.18, respectively on adjusted net income per diluted share during the three and six months ended June 30, 2019. Currency fluctuations had no impact and a favorable impact of $0.19, respectively, on adjusted net income per diluted share during the three and six months ended June 30, 2018, when 2017 results were translated at 2018 rates. These translations are performed for comparative and illustrative purposes only and do not impact the accounting policies or practices for amounts included in the 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 are cash flows from operations, available cash reserves, and debt capacity available under our credit facilities. Our primary uses of liquidity are operating expenses, restructuring activities, capital expenditures, acquisitions, share repurchases, pension obligations, and shareholder dividends. We believe that cash flows from operations, available credit facilities 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, for the foreseeable future.
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 the 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. In addition, some of our outsourcing agreements require us to hold funds on behalf of clients to pay obligations on their behalf. The levels of fiduciary assets and liabilities can fluctuate significantly, depending on when we collect 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. Fiduciary assets, because of their nature, are generally invested in very liquid securities with highly rated, credit-worthy financial institutions. In our Condensed Consolidated Statements of Financial Position, the amounts we report for Fiduciary assets and Fiduciary liabilities are equal and offsetting. Our Fiduciary assets included cash and short-term investments of $4.8 billion and $3.9 billion at June 30, 2019 and December 31, 2018, respectively, and fiduciary receivables of $7.2 billion and $6.3 billion at June 30, 2019 and December 31, 2018, respectively. While we earn investment income on the fiduciary assets held in cash and investments, the cash and investments 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 June 30, 2019, non-U.S. cash balances of one or more entities were negative; however, the overall balance was positive.
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The following table summarizes our Fiduciary assets, non-fiduciary Cash and cash equivalents, and Short-term investments as of June 30, 2019 (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 | $ | 581 |  |  | $ | — |  |  | $ | 2,719 |  |  | $ | 3,300 |
Money market funds | — |  |  | 235 |  |  | 2,121 |  |  | 2,356 |
Cash and short-term investments | 581 |  |  | 235 |  |  | 4,840 |  |  | 5,656 |
Fiduciary receivables | — |  |  | — |  |  | 7,231 |  |  | 7,231 |
Total | $ | 581 |  |  | $ | 235 |  |  | $ | 12,071 |  |  | $ | 12,887 |

Cash and cash equivalents decreased $75 million in 2019. A summary of our cash flows provided by and used for operations from operating, investing, and financing activities is as follows (in millions):

|  | Six Months Ended
|  | June 30, 2019 |  | June 30, 2018
Cash provided by operating activities |  | $ | 361 |  |  | $ | 413 |
Cash provided (used for) investing activities |  | $ | (222 | ) |  | $ | 179 |
Cash used for financing activities |  | $ | (232 | ) |  | $ | (798 | )
Effect of exchange rates changes on cash and cash equivalents |  | $ | 18 |  |  | $ | (63 | )

Operating Activities
Net cash provided by operating activities during the six months ended June 30, 2019 decreased $52 million, or 13%, from the prior year period to $361 million. This amount represents net income reported, as adjusted for gains or losses on sales of businesses, share-based compensation expense, depreciation expense, amortization and impairments, and other non-cash income and expenses, as well as changes in working capital that relate primarily to the timing of payments of accounts payable and accrued liabilities and collection of receivables.
Pension Contributions
Pension contributions were $79 million for the six months ended June 30, 2019, as compared to $84 million for the six months ended June 30, 2018. For the remainder of 2019, we expect to contribute approximately $66 million in cash to our pension plans, including contributions to non-U.S. pension plans, which are subject to changes in foreign exchange rates.
Restructuring Plan
In 2017, Aon initiated the Restructuring Plan in connection with the sale of the Divested Business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity. The Company expects these restructuring activities and related expenses to affect continuing operations through the fourth quarter of 2019, including an estimated 5,000 to 5,600 total role eliminations. In the second quarter of 2019, Aon updated the Restructuring Plan for additional opportunities that were identified in the quarter, which are expected to result in an additional estimated charges of $125 million in 2019.
The Restructuring Plan is expected to result in cumulative charges of approximately $1,350 million through the end of the plan, consisting of approximately $530 million in employee termination costs, $130 million in technology rationalization costs, $80 million in lease consolidation costs, $45 million in non-cash asset impairments, and $565 million in other costs, including certain separation costs associated with the sale of the Divested Business.
From the inception of the Restructuring Plan through June 30, 2019, the Company has eliminated 5,091 positions and incurred total charges of $1,200 million for restructuring and related separation costs. These charges are included in Compensation and benefits, Information technology, Premises, Depreciation of fixed assets, and Other general expenses in the accompanying Condensed Consolidated Statements of Income.
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The following summarizes restructuring and separation costs by type that have been incurred through June 30, 2019 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs by type may be revised in future periods as these assumptions are updated:

|  | Three Months Ended June 30, 2019 |  | Six Months Ended June 30, 2019 |  | Inception to Date |  | Estimated Remaining Costs |  | Estimated Total Cost (1)
Workforce reduction |  | $ | 78 |  |  | $ | 102 |  |  | $ | 516 |  |  | $ | 14 |  |  | $ | 530 |
Technology rationalization (2) |  | 4 |  |  | 15 |  |  | 95 |  |  | 35 |  |  | 130 |
Lease consolidation (2) |  | 5 |  |  | 14 |  |  | 50 |  |  | 30 |  |  | 80 |
Asset impairments |  | 2 |  |  | 2 |  |  | 41 |  |  | 4 |  |  | 45 |
Other costs associated with restructuring and separation (2) (3) |  | 38 |  |  | 85 |  |  | 498 |  |  | 67 |  |  | 565 |
Total restructuring and related expenses |  | $ | 127 |  |  | $ | 218 |  |  | $ | 1,200 |  |  | $ | 150 |  |  | $ | 1,350 |

(1) | Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan. Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives. Estimated Total Costs includes $100 million of non-cash charges.

(2) | Total contract termination costs incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs, respectively, associated with restructuring and separation were for the three months ended June 30, 2019, $2 million, $4 million, and $1 million; for the six months ended June 30, 2019, were $3 million, $13 million, and $3 million; and since inception of the Restructuring Plan, were $9 million, $46 million, and $91 million. Total estimated contract termination costs expected to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, are $15 million, $80 million, and $95 million, respectively.

(3) | Other costs associated with the Restructuring Plan include those to separate the Divested Business, as well as moving costs, and consulting and legal fees. These costs are generally recognized when incurred.

As of June 30, 2019, the changes in our liabilities for the Restructuring Plan were as follows (in millions):

|  | Restructuring Plan
Balance as of December 31, 2018 |  | $ | 201 |
Expensed |  | 204 |
Cash payments |  | (222 | )
Foreign currency translation |  | 1 |
Balance as of June 30, 2019 |  | $ | 184 |

Investing Activities
Cash flow used for investing activities was $222 million during the six months ended June 30, 2019, a decrease of $401 million compared to the prior year period. The primary drivers of cash flow used for investing activities are acquisition of businesses, purchases of short-term investments, capital expenditures, and payments for investments. The primary drivers of cash flow 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 the Condensed Consolidated Statements of Income.
Short-term Investments
Short-term investments increased $63 million as compared to December 31, 2018. As disclosed in Note 16 “Fair Value Measurements and Financial Instruments” of the Financial Statements contained in Part I, Item 1 of this report, 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 six months of 2019, the Company completed the acquisition of one business for a total consideration of $22 million and four businesses were sold for $7 million.
During the first six months of 2018, the Company completed the acquisition of five businesses for a total consideration of $59 million and the sale of one business for an insignificant amount.
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Capital Expenditures
The Company’s additions to fixed assets, including capitalized software, which amounted to $106 million and $111 million for the six months ended June 30, 2019 and 2018, respectively, primarily relate to computer equipment purchases, the refurbishing and modernizing of office facilities, and software development costs.
Financing Activities
Cash flow used for financing activities during the six months ended June 30, 2019 was $232 million, a decrease of $566 million compared to prior year period. The primary drivers of cash flow used for financing activities are share repurchases, issuances of debt, net of repayments, dividends paid to shareholders, issuances of shares for employee benefit plans, 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.
Share Repurchase Program
Aon has a share repurchase program authorized by the Company’s 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 and February 2017 for a total of $15.0 billion in repurchase authorizations.
The following table summarizes the Company’s Share Repurchase activity (in millions, except per share data):

| Three Months Ended June 30 |  | Six Months Ended June 30
| 2019 |  | 2018 |  | 2019 |  | 2018
Shares repurchased | 5.8 |  |  | 2.8 |  |  | 6.4 |  |  | 6.7 |
Average price per share | $ | 183.23 |  |  | $ | 141.23 |  |  | $ | 181.07 |  |  | $ | 141.06 |
Costs recorded to retained earnings: |  |  |  |  |  |  |
Total repurchase cost | $ | 1,050 |  |  | $ | 400 |  |  | $ | 1,150 |  |  | $ | 950 |
Additional associated costs | 6 |  |  | 2 |  |  | 7 |  |  | 5 |
Total costs recorded to retained earnings | $ | 1,056 |  |  | $ | 402 |  |  | $ | 1,157 |  |  | $ | 955 |

At June 30, 2019, the remaining authorized amount for share repurchase under the Repurchase Program was $2.8 billion. Under the Repurchase Program, we have repurchased a total of 124.6 million shares for an aggregate cost of approximately $12.2 billion. For further information regarding share repurchases made during the second quarter of 2019, see Part II, Item 2 of this report.
Borrowings
Total debt at June 30, 2019 was $7.6 billion, an increase of $1.3 billion compared to December 31, 2018. Further, commercial paper activity during the six months ended June 30, 2019 and 2018 is as follows (in millions):

|  | Three Months Ended June 30 |  | Six Months Ended June 30
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Total issuances (1) |  | $ | 1,947 |  |  | $ | 1,746 |  |  | $ | 2,816 |  |  | $ | 2,551 |
Total repayments |  | $ | (1,533 | ) |  | $ | (1,321 | ) |  | (2,227 | ) |  | (1,732 | )
Net issuances |  | $ | 414 |  |  | $ | 425 |  |  | $ | 589 |  |  | $ | 819 |

(1) | The proceeds of the commercial paper issuances were used primarily for short-term working capital needs.

On May 2, 2019, Aon Corporation issued $750 million 3.75% Senior Notes due May 2029. The Company used the net proceeds of the offering to pay down a portion of outstanding commercial paper and for general corporate purposes.
On December 3, 2018, Aon Corporation issued $350 million 4.50% Senior Notes due December 2028. The Company used the net proceeds of the offering to pay down a portion of outstanding commercial paper and for general corporate purposes.
On March 8, 2018, the Company’s CAD 375 million ($291 million at March 8, 2018 exchange rates) 4.76% Senior Note due March 2018 issued by a Canadian subsidiary of Aon Corporation matured and was repaid in full.
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Other Liquidity Matters
Distributable Reserves
As a company incorporated in England and Wales, we are required under U.K. law to have available “distributable reserves” to make share repurchases or pay dividends to shareholders. Distributable reserves are created through the earnings of the U.K. parent company and, among other methods, through a reduction in share capital approved by the High Court of Justice in England. Distributable reserves are not linked to a U.S. GAAP reported amount (e.g., retained earnings). As of June 30, 2019 and December 31, 2018, we had distributable reserves in excess of $2.4 billion and $2.2 billion, respectively. On July 16, 2019, we received approval from the High Court of Justice in England to complete a reduction in share capital to create distributable reserves of $31 billion to support the payment of possible future dividends or future share repurchases, if and to the extent declared by the directors in compliance with their duties under U.K. law. We believe that we will have sufficient distributable reserves for the foreseeable future.
Credit Facilities
We expect cash generated by operations for 2019 to be sufficient to service our debt and contractual obligations, finance capital expenditures, continue purchases of shares under the Repurchase Program, 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 June 30, 2019, we had two committed credit facilities outstanding: our $900 million multi-currency U.S. credit facility expiring in February 2022 and our $400 million multi-currency U.S. credit facility expiring in October 2022.
Each of these facilities 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 consolidated adjusted EBITDA, tested quarterly. At June 30, 2019, we did not have borrowings under either facility, and we were in compliance with the financial covenants and all other covenants contained therein during the rolling twelve months ended June 30, 2019.
Shelf Registration Statement
On September 25, 2018, 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 July 26, 2019 appear in the table below.

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

A downgrade in the credit ratings of our senior debt or commercial paper could increase our borrowing costs, reduce or eliminate our access to capital, reduce our financial flexibility, restrict our access to the commercial paper market altogether, or impact future pension contribution requirements.
Guarantees in Connection with the Sale of the Divested Business
In connection with the sale of the Divested Business, we guaranteed future operating lease commitments related to certain facilities assumed by the Buyer. We are obligated to perform under the guarantees if the Divested Business defaults on the leases at any time during the remainder of the lease agreements, which expire on various dates through 2024. As of June 30, 2019, the undiscounted maximum potential future payments under the lease guarantee were $77 million, with an estimated fair value of $15 million. No cash payments were made in connection to the lease commitments during the three and six months ended June 30, 2019.
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Additionally, we are subject to performance guarantee requirements under certain client arrangements that were assumed by the Buyer. Should the Divested Business fail to perform as required by the terms of the arrangements, we would be required to fulfill the remaining contract terms, which expire on various dates through 2023. As of June 30, 2019, the undiscounted maximum potential future payments under the performance guarantees were $170 million, with an estimated fair value of $1 million. No cash payments were made in connection to the performance guarantees during the three and six months ended June 30, 2019.
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 $74 million at June 30, 2019, compared to $83 million at December 31, 2018. These LOCs cover the beneficiaries related to certain of our U.S. and Canadian non-qualified pension plan schemes 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 $102 million at June 30, 2019, compared to $103 million at December 31, 2018.
Off-Balance Sheet Arrangements
Apart from commitments, guarantees, and contingencies, as disclosed herein and Note 17 “Claims, Lawsuits, and Other Contingencies” to the Financial Statements contained in Part I, Item 1 of this report, the Company had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on the Company’s financial condition, results of operations, or liquidity. Our cash flows from operations, borrowing availability, and overall liquidity are subject to risks and uncertainties. See “Information Concerning Forward-Looking Statements” below.
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, and income taxes, as discussed in our Annual Report on Form 10-K for the year ended December 31, 2018 (our “2018 Annual Report on Form 10-K”) other than those described below.
Lease consolidation costs
Where we have provided notice of cancellation pursuant to a lease agreement, we remove the associated right-of-use asset and the related lease liability, including any additional termination penalties incurred that were not previously included within the liability. To the extent that the associated right-of-use assets and lease liabilities are removed, a corresponding loss is recorded.
For properties where we plan to permanently cease use of a space and have the intent and ability to sublease the property, we will test the right-of-use asset for impairment to determine if a loss has occurred. The test for impairment will adjust the book value of the asset based on the net present value of the future cash flows expected from a sublease agreement using current market quotes for similar properties. When we finalize definitive agreements with the sublessee, we may record an additional impairment to reflect actual outcomes.
For properties where we plan to permanently cease use of a space and have no intention of reoccupying or subleasing the property, the amortization related to the right-of-use asset will be accelerated and recognized on a straight-line basis from the date that we commit to a plan to abandon the space through the date we permanently exit the property.
Additionally, a loss will also be recognized for lease related costs that are not reflected within the lease liability, such as operating expenses, taxes, and insurance that we are obligated to pay to the landlord after we have permanently exited the property.
NEW ACCOUNTING PRONOUNCEMENTS
Note 2 “Accounting Principles and Practices” to the Financial Statements contained in Part I, Item 1 of this report contains a discussion of recently issued accounting pronouncements and their impact or future potential impact on our financial results, if determinable.
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INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This report and reports we will subsequently file or furnish and have previously filed or furnished with the SEC contains 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 represent management’s expectations or forecasts of future events. Forward-looking statements are typically identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “project,” “intend,” “plan,” “probably,” “potential,” “looking forward,” “continue,” 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. Potential factors, which may be revised or supplemented in subsequent reports filed or furnished with the SEC, that could impact results include:

• | general economic and political conditions in the countries in which we do business around the world, including the U.K.’s expected withdrawal from the European Union;

• | changes in the competitive environment or damage to our reputation;

• | fluctuations in exchange and interest rates that could influence revenues and expenses;

• | changes in global equity and fixed income markets that could affect the return on invested assets;

• | changes in the funding status of our various defined benefit pension plans and the impact of any increased pension funding resulting from those changes;

• | the level of our debt limiting financial flexibility or increasing borrowing costs;

• | rating agency actions that could affect our ability to borrow funds;

• | volatility in our tax rate due to a variety of different factors including U.S. federal income tax reform;

• | changes in estimates or assumptions on our financial statements;

• | limits on our subsidiaries to make dividend and other payments to us;

• | the impact of lawsuits and other contingent liabilities and loss contingencies arising from errors and omissions and other claims against us;

• | the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which we operate, particularly given the global scope of our businesses and the possibility of conflicting regulatory requirements across jurisdictions in which we do 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 us;

• | the failure to retain and attract qualified personnel;

• | international risks associated with our global operations;

• | the effect of 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;

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• | our ability to develop and implement new technology;

• | damage to our reputation among clients, markets or third parties;

• | the actions taken by third parties that perform aspects of our business operations and client services;

• | the extent to which we manage certain risks created in connection with the various services, including fiduciary and investment consulting and other advisory services, among others, that we currently provide, or will provide in the future, to clients;

• | our ability to continue, and the costs and risks associated with, growing, developing and integrating companies that we acquire 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;

• | our ability to implement initiatives intended to yield cost savings and the ability to achieve those cost savings;

• | our risks and uncertainties in connection with the sale of the Divested Business; and

• | our ability to realize the expected benefits from our restructuring plan.

Any or all of our forward-looking statements may turn out to be inaccurate, and there are no guarantees about our 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, readers should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statement that we may make from time to time, whether as a result of new information, future events or otherwise. Further information about factors that could materially affect Aon, including our results of operations and financial condition, is contained in Part III, Item 1A Risk Factors of this report and in the “Risk Factors” section in Part I, “Item 1A Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018. These factors may be revised or supplemented in subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to potential fluctuations in earnings, cash flows and the fair value of certain of our assets and liabilities due to changes in interest rates and foreign exchange rates. To manage the risk from these exposures, we enter into a variety of derivative instruments. We do not enter into derivatives or financial instruments for trading or speculative purposes.
The following discussion describes our specific exposures and the strategies we use to manage these risks. There have been no changes in our critical accounting policies for financial instruments and derivatives as discussed in our 2018 Annual Report on Form 10-K.
Foreign Exchange Risk
We are subject to foreign exchange rate risk. Our primary exposures include exchange rates between the U.S. dollar and the euro, the British pound, the Canadian dollar, the Australian dollar, the Indian rupee, and the Japanese yen. We use over-the-counter options and forward contracts to reduce the impact of foreign currency risk to our financial statements.
Additionally, some of our non-U.S. brokerage subsidiaries receive revenue in currencies that differ from their functional currencies. Our U.K. subsidiaries earn a portion of their revenue in U.S. dollars, euro, and Japanese yen, but most of their expenses are incurred in British pounds. At June 30, 2019, we have hedged approximately 45% of our U.K. subsidiaries’ expected exposures to U.S. dollar, euro, and Japanese yen transactions for the years ending December 31, 2019 and 2020, respectively. We generally do not hedge exposures beyond three years.
We also use forward and option contracts to economically hedge foreign exchange risk associated with monetary balance sheet exposures, such as inter-company notes and short-term assets and liabilities that are denominated in a non-functional currency and are subject to remeasurement.
The translated value of revenues and expenses from our international brokerage operations are subject to fluctuations in foreign exchange rates. If we were to translate prior year results at current quarter exchange rates, diluted earnings per share would have an unfavorable $0.03 impact and an unfavorable $0.15 impact, respectively, during the three and six months ended June 30, 2019. Further, adjusted diluted earnings per share, a non-GAAP measure as defined and reconciled under the caption “Review of Consolidated Results — Adjusted Diluted Earnings Per Share,” would have an unfavorable $0.05 impact and an unfavorable $0.18
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impact, respectively, during the three and six months ended June 30, 2019 if we were to translate prior year results at current quarter exchange rates.
Interest Rate Risk
Our fiduciary investment income is affected by changes in international and domestic short-term interest rates. We monitor our net exposure to short-term interest rates and, as appropriate, hedge our exposure with various derivative financial instruments. This activity primarily relates to brokerage funds held on behalf of clients in the U.S. and in continental Europe. A decrease in global short-term interest rates adversely affects our fiduciary investment income.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures. We have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report of June 30, 2019. Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective such that the information relating to Aon, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in appropriate statute, SEC rules and forms, and is accumulated and communicated to Aon’s management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting. No changes in Aon’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the quarter ended June 30, 2019 that have materially affected, or that are reasonably likely to materially affect, Aon’s internal control over financial reporting.
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Part II Other Information
Item 1. Legal Proceedings
See Note 17 “Claims, Lawsuits, and Other Contingencies” to the Financial Statements contained in Part I, Item 1 of this report, which is incorporated by reference herein.
Item 1A. Risk Factors
The risk factors set forth in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018 reflect certain risks associated with existing and potential lines of business and contain “forward-looking statements” as discussed in Part I, Item 2 of this report. Readers should consider them in addition to the other information contained in this report as our business, financial condition or results of operations could be adversely affected if any of these risks actually occur.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities.
The following information relates to the purchase of equity securities by Aon or any affiliated purchaser during each month within the second quarter of 2019:

Period |  | Total Number of Shares Purchased |  | Average Price Paid per Share (1) |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) |  | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)(2)
4/1/19 - 4/30/19 |  | 352,308 |  |  | $ | 172.82 |  |  | 352,308 |  |  | $ | 3,812,638,339 |
5/1/19 - 5/31/19 |  | 2,908,935 |  |  | $ | 178.97 |  |  | 2,908,935 |  |  | $ | 3,292,040,277 |
6/1/19 - 6/30/19 |  | 2,469,273 |  |  | $ | 189.74 |  |  | 2,469,273 |  |  | $ | 2,823,525,949 |
|  | 5,730,516 |  |  | $ | 183.23 |  |  | 5,730,516 |  |  | $ | 2,823,525,949 |

(1) | Does not include commissions or other costs paid to repurchase shares.

(2) | 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 and February 2017 for a total of $15.0 billion in repurchase authorizations.

We did not make any unregistered sales of equity in the second quarter of 2019.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits
Exhibits — The exhibits filed with this report are listed on the attached Exhibit Index.
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| Aon plc
| (Registrant)
July 26, 2019 | By: | /s/ Michael Neller
| Michael Neller
| SENIOR VICE PRESIDENT AND
| GLOBAL CONTROLLER
| (Principal Accounting Officer and duly authorized officer of Registrant)

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Exhibit Index

Exhibit Number |  | Description of Exhibit
3.1 |  | Articles of Association of Aon plc
10.1# |  | Aon plc 2011 Incentive Plan, as amended and restated effective March 29, 2019.
10.2# |  | Aon plc Senior Executive Combined Severance and Change in Control Plan, as amended and restated effective June 21, 2019.
31.1 |  | Certification of CEO.
31.2 |  | Certification of CFO.
32.1 |  | Certification of CEO Pursuant to section 1350 of Title 18 of the United States Code.
32.2 |  | Certification of CFO Pursuant to section 1350 of Title 18 of the United States Code.
101 |  | Interactive Data Files. The following materials are filed electronically with this Quarterly Report on Form 10-Q:
|  | 101.SCH XBRL Taxonomy Extension Schema Document
|  | 101.CAL XBRL Taxonomy Calculation Linkbase Document
|  | 101.DEF XBRL Taxonomy Definition Linkbase Document
|  | 101.PRE XBRL Taxonomy Presentation Linkbase Document
|  | 101.LAB XBRL Taxonomy Calculation Linkbase Document

# Indicates a management contract or compensatory plan or arrangement.
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