AON PLC EXECUTIVE SUMMARY OF FIRST QUARTER 2020FINANCIAL RESULTS Aon plc 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 first quarter of 2020 financial results from continuing operations.The first quarter 2020 financial results are not necessarily indicative of results that may be expected for the full year or any future period, particularly in light of the continuing effect of the COVID-19 outbreak. • For the first quarter of 2020, revenue increased$76 million , or 2%, to
revenue growth of 5%, partially offset by a 2% 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.
• Operating expenses for the first quarter of 2020 were
decrease of $85 million from the prior year period. The decrease was due
primarily to a $91 million decrease in restructuring charges, a $40
million favorable impact from foreign currency translation, and the
preemptive reduction and deferral of certain discretionary expenses in aneffort to proactively manage liquidity due to uncertainties surrounding
COVID-19 and its impact to the Company, partially offset by
transaction costs related to the pending combination with WTW, an increase
in investments supporting growth initiatives and Aon Business Services,
and an increase in expense associated with 5% organic revenue growth.
• Operating margin increased to 32.1% in the first quarter of 2020 from27.7% in the prior year period. The increase was driven by organic revenue
growth of 5%, strong operational improvement, and a decrease in expense
due to the factors listed above.
• Due to the factors set forth above, net income from continuing operations
increased
2020 compared to the prior year period.
• Diluted earnings per share from continuing operations was
for the first quarter of 2020 compared to $2.70 per share for the prior
year period.
• Cash flow provided by operating activities was
three months of 2020, an increase of
period, primarily reflecting strong operational improvement and near-term
actions taken to improve working capital in an effort to proactively
manage liquidity due to uncertainties surrounding COVID-19 and its impact
on the Company. The prior year period included approximately
of net cash payments related to legacy litigation.
We focus on four key metrics not presented in accordance withU.S. generally accepted accounting principles ("U.S. GAAP") 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 unaudited Condensed Consolidated Financial Statements and Notes thereto (our "Financial Statements"). The following is our measure of performance against these four metrics from continuing operations for the first quarter of 2020: • Organic revenue growth, a non-GAAP measure defined under the caption
"Review of Consolidated Results - Organic Revenue Growth," was 5% for the
first quarter of 2020. Organic revenue growth was driven by strong new
business generation in Reinsurance Solutions and strong management of the
renewal book globally in
• Adjusted operating margin, a non-GAAP measure defined under the caption
"Review of Consolidated Results - Adjusted Operating Margin," was 35.7%
for the first quarter of 2020 compared to 33.7% in the prior year period.
The increase in adjusted operating margin primarily reflects strong
organic revenue growth of 5%, increased operating leverage across the
portfolio, and the preemptive reduction and deferral of certain
discretionary expenses.
• 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
quarter of 2020 compared to
34
--------------------------------------------------------------------------------• Free cash flow, a non-GAAP measure defined under the caption "Review of
Consolidated Results - Free Cash Flow," increased in the first three
months of 2020 by
partially offset by a
IRELAND REORGANIZATION OnApril 1, 2020 , a scheme of arrangement under English law was completed pursuant to which the Class A ordinary shares ofAon plc , a public limited company incorporated under the laws ofEngland andWales and the publicly traded parent company of the Aon group ("AonUK "), were cancelled and the holders thereof received, on a one-for-one basis, Class A ordinary shares ofAon plc , an Irish public limited company formerly known asAon Limited ("Aon Ireland"), as described in the proxy statement filed with theU.S. Securities and Exchange Commission ("SEC") onDecember 20, 2019 .Aon Ireland is a tax resident of Ireland. References in this report to "Aon," the "Company," "we," "us," or "our" for time periods prior toApril 1, 2020 refer to AonUK . References in the Financial Statements to "Aon," the "Company," "we," "us," or "our" for time periods on or afterApril 1, 2020 , refer toAon Ireland . BUSINESS COMBINATION AGREEMENT OnMarch 9, 2020 , Aon and WTW, entered into a Business Combination Agreement with respect to a combination of the parties (the "Combination"). At the effective date of the Combination, WTW shareholders will be entitled to receive 1.08 newly issued Class A ordinary shares ofAon Ireland in exchange for each ordinary share of WTW held by such holders. The Combination is expected to be completed in the first half of 2021 and is subject to Irish Takeover Rules. The Business Combination Agreement contains certain operating covenants relating to the conduct of business of both parties in the interim period until the transaction is completed. These covenants require both parties to operate their respective businesses in all material respects in the ordinary course of business consistent with past practice. In addition, these covenants restrict each party from engaging in certain actions unless a party obtains the prior written consent of the other party. These actions relate to, among other things, authorizing or paying dividends above a specified rate; issuing or authorizing for issuance additional securities; salary, benefits or other compensation and employment-related matters; capital management, debt and liquidity matters; engaging in mergers, acquisitions and dispositions; entering into or materially modifying material agreements; entering into material litigation-related settlements; and making other corporate, tax and accounting changes. RECENT DEVELOPMENTS The recent outbreak of the coronavirus, COVID-19, which has been declared by theWorld Health Organization to be a pandemic, has spread across the globe, resulting in restrictions on travel and quarantine policies being put in place by businesses and governments and is impacting worldwide economic activity. COVID-19 and its resulting impact may adversely affect our business and we are closely monitoring the situation and our business, liquidity, and capital planning initiatives, in compliance with local government guidelines. At this time, we are fully operational and have deployed business continuity protocols to facilitate remote working capabilities to ensure the health and safety of our colleagues and to comply with public health and travel guidelines and restrictions. We have deployed enhanced information technology (IT) security protocols, including an upgraded virtual private network (VPN), and required IT equipment to our outsourcing vendors in order to limit operational disruption. OurGlobal Emergency Operations Center is actively tracking the situation and providing communications and resources to our global colleagues. Eventual reoccupation of our offices is expected to happen in phases as local mandates are lifted and once protocols are in place to ensure a safe work environment. As the situation is rapidly evolving, and the scale and duration of disruption cannot be predicted, it is not possible to quantify or estimate the full impact that COVID-19 will have on our business. We are focused on navigating these challenges and potential future impacts to our business presented by COVID-19 through preserving our liquidity and managing our cash flow through taking proactive action to enhance our ability to meet our short-term liquidity needs and support a commitment to no layoffs of our colleagues due to COVID-19. Such actions include, but are not limited to, reducing our discretionary spending, extending days payable outstanding, revisiting our investment strategies, suspending our share buyback program until further notice, and reducing payroll costs, including through delayed hiring of new colleagues, as well as temporarily reducing salaries for existing colleagues. While the ultimate public health and economic impact of the COVID-19 pandemic is highly uncertain, we expect that our business operations and results of operations, including our net revenues, earnings, and cash flows, will be adversely impacted, depending on the duration and severity of the downturn. Our revenue can be generalized into two categories, including core and more discretionary arrangements. Core revenues tend to be highly-recurring and non-discretionary, where the services are typically regulated, required, or necessary costs of managing the risk of doing business. More discretionary revenues tend to include project-related services, where in an economic downturn, we expect to see more immediate impacts from decreases in revenue, and have already started to see a modest impact in the first quarter of 2020. In a severe downturn, we expect that certain services within our 35 -------------------------------------------------------------------------------- core business may be negatively impacted as well. The impact of the pandemic on our business operations and results of operations for the first quarter of 2020 are further described in the "Review of Consolidated Results" and "Liquidity and Financial Conditions" contained in Part I, Item 2 of this report. Refer to Part II, Item 1A of this report for a further discussion of the risks associated with COVID-19. REVIEW OF CONSOLIDATED RESULTS Summary of Results Our consolidated results are as follow (in millions): Three Months Ended March 31, 2020 2019 Revenue Total revenue$ 3,219 $ 3,143 Expenses Compensation and benefits 1,522 1,584 Information technology 111 117 Premises 73 87 Depreciation of fixed assets 41 40 Amortization of intangible assets 97 97 Other general expense 342 346 Total operating expenses 2,186 2,271 Operating income 1,033 872 Interest income 2 2 Interest expense (83 ) (72 ) Other income (expense) 29 - Income from continuing operations before income taxes 981 802 Income tax expense 189 126 Net income from continuing operations 792 676 Net income (loss) from discontinued operations (1 ) - Net income 791 676 Less: Net income attributable to noncontrolling interests 19 17 Net income attributable to Aon shareholders $ 772 $ 659 Diluted net income per share attributable to Aon shareholders Continuing operations$ 3.29 $ 2.70 Discontinued operations - - Net income$ 3.29 $ 2.70 Weighted average ordinary shares outstanding - diluted 234.5 243.7
Revenue
Total revenue increased by$76 million , or 2%, in the first quarter of 2020 compared to the first quarter of 2019. This increase reflects organic revenue growth of 5%, partially offset by a 2% unfavorable impact from foreign currency translation and a 1% unfavorable impact related to divestitures, net of acquisitions.Commercial Risk Solutions revenue increased$28 million , or 3%, to$1,146 million in the first quarter of 2020, compared to$1,118 million in the first quarter of 2019. Organic revenue growth was 4% in the first quarter of 2020, driven by growth across every major geography, highlighted by double-digit growth inCanada andLatin America , primarily driven by strong retention and management of the renewal book portfolio. On average globally, exposures and pricing were both modestly positive, resulting in a modestly positive market impact overall. Reinsurance Solutions revenue increased$60 million , or 8%, to$848 million in the first quarter of 2020, compared to$788 million in the first quarter of 2019. Organic revenue growth was 9% in the first quarter of 2020, driven by strong net new business generation globally in treaty and solid growth in facultative placements, partially offset by a modest decline in capital markets 36 -------------------------------------------------------------------------------- transactions. Results in the quarter include a modest positive impact from the timing of certain revenue, which will be spread evenly for the balance of 2020. In addition, market impact was modestly positive on results in the quarter. Retirement Solutions revenue decreased$23 million , or 5%, to$397 million in the first quarter of 2020, compared to$420 million in the first quarter of 2019. Organic revenue growth was flat in the first quarter of 2020, driven by driven by solid growth in Investments, including double-digit growth in delegated investment management, as well as modest growth in Human Capital, primarily for assessment services. Results in the quarter were offset by a decline in core retirement, reflecting a decrease in billable hours and discretionary project-related work, primarily as a result of COVID-19.Health Solutions revenue increased$16 million , or 3%, to$502 million in the first quarter of 2020, compared to$486 million in the first quarter of 2019. Organic revenue growth was 5% in the first quarter of 2020, driven by solid growth across every major geography in health and benefits brokerage, highlighted by particular strength inLatin America ,Asia , and the EMEA region. Results in the quarter also include growth in the active exchange business. Data & Analytic Services revenue decreased$5 million , or 1%, to$331 million in the first quarter of 2020 compared to$336 million in the first quarter of 2019. Organic revenue growth was 1% in the first quarter of 2020, driven by growth globally across the affinity business, with particular strength in theU.S. across both business and consumer solutions. Results in the quarter also reflect pressure in certain, more discretionary parts of the business, primarily as a result of COVID-19. Compensation and Benefits Compensation and benefits decreased$62 million , or 4%, in the first quarter of 2020 compared to the first quarter of 2019. This decrease was primarily driven by a$26 million favorable impact from foreign currency translation, a$24 million decrease in restructuring charges, and expense discipline, partially offset by an increase in expense associated with 5% organic revenue growth. Information Technology Information technology, which represents costs associated with supporting and maintaining our infrastructure, decreased$6 million , or 5%, in the first quarter of 2020 compared to the first quarter of 2019. This decrease was primarily driven by an$11 million decrease in restructuring charges, partially offset by an increase in investments supporting growth initiatives and Aon Business Services. Premises Premises, which represents the cost of occupying offices in various locations throughout the world, decreased$14 million , or 16%, in the first quarter of 2020 compared to the first quarter of 2019. This decrease was primarily driven by a$9 million decrease in restructuring charges and a reduction of costs as the Company continues to optimize its global real estate footprint. 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 increased$1 million , or 3%, in the first quarter of 2020 compared to the first quarter of 2019. Amortization and Impairment of Intangibles Assets Amortization and impairment of intangible assets primarily relates to finite-lived tradenames and customer-related, contract-based, and technology assets. Amortization and impairment of intangibles was$97 million in the first quarter of 2020, similar to the first quarter of 2019. Other General Expense Other general expense in the first quarter of 2020 decreased$4 million , or 1%, compared to the first quarter of 2019 due primarily to a$47 million decrease in restructuring charges, a$9 million favorable impact from foreign currency translation, and the preemptive reduction and deferral of certain discretionary expenses, partially offset by$18 million of transaction costs related to the Combination,$7 million of costs related to move of the jurisdiction for the firm's parent company to Ireland, and an increase in expense associated with 5% 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 first quarter of 2020, interest income was$2 million , similar to the prior year period. 37 -------------------------------------------------------------------------------- Interest Expense Interest expense, which represents the cost of our debt obligations, was$83 million for the first quarter of 2020, an increase of$11 million , or 15%, from the first quarter of 2019. The increase was driven primarily by higher outstanding term debt and an increase in commercial paper borrowings. Other Income (Expense) Total other income was$29 million for the first quarter of 2020, compared to other income of$0 million for the first quarter of 2019. Other income for the first quarter of 2020 primarily includes$42 million of gains due to the favorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies, a$25 million gain on the sale of certain businesses, and$4 million of pension and other postretirement income, partially offset by$44 million of losses on financial instruments used to economically hedge gains and losses from changes in foreign exchange rates. Other income for the first quarter of 2019 primarily includes$11 million of losses due to the unfavorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies, offset by a$5 million gain on the sale of certain businesses,$4 million of pension and other postretirement income,$1 million of equity earnings, and$1 million of gains on financial instruments used to economically hedge gains and losses from changes in foreign exchange rates. Income from Continuing Operations before Income Taxes Due to the factors discussed above, income from continuing operations before income taxes for the first quarter of 2020 was$981 million , a 22% increase from income from continuing operations before income taxes of$802 million in the first quarter of 2019. Income Taxes from Continuing Operations The effective tax rates on net income from continuing operations were 19.3% and 15.7% for the first quarter of 2020 and 2019, respectively. For the three months endedMarch 31, 2020 , the tax rate was primarily driven by the geographical distribution of income and certain discrete items including the favorable impact of share-based payments. For the three months endedMarch 31, 2019 , the tax rate was primarily driven by the geographical distribution of income and certain discrete items including the favorable impact of share-based payments. Net Income from Discontinued Operations Net loss from discontinued operations was$1 million in the three months endedMarch 31, 2020 compared to no impact on the prior year period. Net Income Attributable to Aon Shareholders Net income attributable to Aon shareholders for the first quarter of 2020 increased to$772 million , or$3.29 per diluted share, from$659 million , or$2.70 per diluted share, in the prior year period. Non-GAAP Metrics In our discussion of consolidated results, we sometimes refer to certain non-GAAP supplemental information derived from consolidated financial information specifically related to organic revenue growth, adjusted operating margin, adjusted diluted earnings per share, free cash flow, and the impact of foreign exchange rate fluctuations on operating results. This non-GAAP supplemental information should be viewed in addition to, not instead of, our Financial Statements. 38 -------------------------------------------------------------------------------- Organic Revenue Growth We use supplemental information related to organic revenue growth to help us and our investors evaluate business growth from existing operations. Organic revenue growth is a non-GAAP measure that includes the impact of intercompany activity and excludes the impact of changes in foreign exchange rates, fiduciary investment income, acquisitions, divestitures, transfers between revenue lines, and gains or losses on derivatives accounted for as hedges. This supplemental information related to organic revenue growth represents a measure not in accordance withU.S. GAAP and should be viewed in addition to, not instead of, our Financial Statements. Industry peers provide similar supplemental information about their revenue performance, although they may not make identical adjustments. A reconciliation of this non-GAAP measure to the reported Total revenue is as follows (in millions, except percentages): Three Months Ended March 31, Less: Less: Less: Fiduciary Acquisitions, Currency Investment Divestitures & Organic Revenue 2020 2019 % Change Impact (1) Income (2) Other Growth (3) Revenue Commercial Risk Solutions$ 1,146 $ 1,118 3 % (2 )% - % 1 % 4 % Reinsurance Solutions 848 788 8 (1 ) - - 9 Retirement Solutions 397 420 (5 ) (1 ) - (4 ) - Health Solutions 502 486 3 (2 ) - - 5 Data & Analytic Services 331 336 (1 ) (2 ) - - 1 Elimination (5 ) (5 ) N/A N/A N/A N/A N/A Total revenue$ 3,219 $ 3,143 2 % (2 )% - % (1 )% 5 %
(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
2019, respectively, was
(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 our core operating performance. 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 withU.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
2020 2019
Revenue from continuing operations $
3,219
Operating income from continuing operations - as reported
97 97 Restructuring - 91 Transaction costs (1) 18 -
Operating income from continuing operations - as adjusted
Operating margin from continuing operations - as reported 32.1 % 27.7 % Operating margin from continuing operations - as adjusted 35.7 % 33.7 %
(1) Certain transaction costs associated with the Combination will be incurred
prior to the expected completion of the Combination in the first half of
2021. These costs may include advisory, legal, accounting, valuation, and
other professional or consulting fees required to complete the Combination.
39
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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, 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.
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 March 31, 2020
Non-GAAP
U.S. GAAP Adjustments Adjusted
Operating income from continuing operations $ 1,033 $ 115 $ 1,148
Interest income 2 - 2
Interest expense (83 ) - (83 )
Other income (expense) 29 - 29
Income from continuing operations before income
taxes 981 115 1,096
Income tax expense (1) 189 23 212
Net income from continuing operations 792 92 884
Net income (loss) from discontinued operations (1 ) - (1 )
Net income 791 92 883
Less: Net income attributable to noncontrolling
interests 19 - 19
Net income attributable to Aon shareholders
92
Diluted net income per share attributable to Aon shareholders Continuing operations$ 3.29 $ 0.39 $ 3.68 Discontinued operations - - - Net income$ 3.29 $ 0.39 $ 3.68 Weighted average ordinary shares outstanding - diluted 234.5 - 234.5 Effective tax rates (1) Continuing operations 19.3 % 19.3 % Discontinued operations 30.7 % 30.7 % 40
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Three Months Ended March 31, 2019
Non-GAAP
U.S. GAAP Adjustments Adjusted
Operating income from continuing operations $ 872 $ 188 $ 1,060
Interest income 2 - 2
Interest expense (72 ) - (72 )
Other income (expense) - - -
Income from continuing operations before income
taxes 802 188 990
Income tax expense (1) 126 41 167
Net income from continuing operations 676 147 823
Net income (loss) from discontinued operations - - -
Net income 676 147 823
Less: Net income attributable to noncontrolling
interests 17 - 17
Net income attributable to Aon shareholders
147
Diluted net income per share attributable to Aon shareholders Continuing operations$ 2.70 $ 0.61 $ 3.31 Discontinued operations - - - Net income$ 2.70 $ 0.61 $ 3.31 Weighted average ordinary shares outstanding - diluted 243.7 - 243.7 Effective tax rates (1) Continuing operations 15.7 % 16.9 % Discontinued operations - % - %
(1) Adjusted items are generally taxed at the estimated annual effective tax
rate, except for the applicable tax impact associated with estimated
restructuring plan expenses, accelerated tradename amortization, impairment
charges and certain transaction costs, which are adjusted at the related
jurisdictional rate. In addition, tax expense excludes the tax impacts of
payment of certain legacy litigation and enactment date impacts of the Tax
Cuts and Jobs Act of 2017.
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 withU.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): Three Months EndedMarch 31, 2020 2019
Cash provided by operating activities $ 338
(59 ) (57 )
Free cash flow provided by operations $ 279
Impact of Foreign Exchange Rate Fluctuations Because we conduct business in over 120 countries and sovereignties, foreign exchange rate fluctuations may 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 on net income per diluted share during the three months endedMarch 31, 2020 . Currency fluctuations had an unfavorable 41 -------------------------------------------------------------------------------- impact of$0.12 , on net income per diluted share during the three months endedMarch 31, 2019 , when 2018 results were translated at 2019 rates. Translating prior year quarter results at current quarter foreign exchange rates, currency fluctuations had an unfavorable impact of$0.03 on adjusted net income per diluted share during the three months endedMarch 31, 2020 . Currency fluctuations had an unfavorable impact of$0.13 on adjusted net income per diluted share during the three months endedMarch 31, 2019 , when 2018 results were translated at 2019 rates. These translations are performed for comparative and illustrative purposes only and do not impact the accounting policies or practices for amounts included in our 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 provided by 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. As a result of the COVID-19 pandemic, we have taken various proactive steps and continue to evaluate opportunities that will increase our liquidity and strengthen our financial position. Such actions include, but are not limited to, reducing our discretionary spending, revisiting our investment strategies, suspending our share buyback program until further notice, and reducing payroll costs, including through delayed hiring of new colleagues, and temporarily reducing salaries for existing colleagues. We expect to have the ability to meet our cash needs for the foreseeable future through the use of cash and cash equivalents, Short-term investments, funds available under our Credit Facilities and commercial paper programs, and cash flows from operations. Additionally, Short-term investments included in our liquidity portfolio are expected to be highly liquid, giving us the ability to readily convert them to cash, as deemed appropriate. We believe our liquidity position atMarch 31, 2020 remains strong and as we move into a period of uncertain economic conditions related to COVID-19, which may impact our ability to access capital markets or other sources of liquidity, we will continue to closely monitor and protectively manage our liquidity as economic conditions change. 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 our 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$5.2 billion and$5.2 billion atMarch 31, 2020 andDecember 31, 2019 , respectively, and fiduciary receivables of$7.2 billion and$6.7 billion atMarch 31, 2020 andDecember 31, 2019 , 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. AtMarch 31, 2020 , non-U.S. cash balances of one or more entities were negative; however, the overall balance was positive. 42 --------------------------------------------------------------------------------
The following table summarizes our Cash and cash equivalents, Short-term
investments, and Fiduciary assets as of
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