Q1 2024 Aon PLC Earnings Call

Operator: Good morning, and thank you for holding. Welcome to Aon PLC's first quarter 2024 conference call. At this time, all parties will be in a listen-only mode until the question and answer portion of today's call. I would also like to remind all parties that this call is being recorded. If anyone has any objections, they may disconnect their line at this time.

Good morning, and thank you for holding welcome to Aon Plc's first quarter 'twenty 'twenty four conference call.

This time, all parties will be in a listen only mode until the question and answer portion of today's call.

Also like to remind all parties that this call is being recorded if anyone has any objection you may disconnect. Your lines at this time.

Operator: It is important to note that some of the comments in today's call may constitute certain statements that are forward-looking in nature, as defined by the Private Securities Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. Information concerning risk factors that could cause such differences was described in the press conference covering our first quarter 2024 results, as well as having been posted on our website. Now, it is my pleasure to turn the call over to Greg Case, CEO of Aon PLC.

It is important to note that some of the comments in today's call may constitute certain statements that are forward looking in nature as defined by the private Securities Reform Act of 1995.

Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated infill.

Information concerning risk factors that could cause such differences are described in the press conference call covering our first quarter 2024 results as well as having been posted on our website now it is my pleasure to turn the call over to Greg case CEO of Aon plc.

Gregory Clarence Case: Good morning everyone, and welcome to our first quarter conference call. I'm joined by Christa Davies, our CFO, and Eric Andersen, our president. For your convenience, we have posted a detailed financial presentation on our website. As always, we begin by thanking our colleagues around the world for the incredible work they do every day to support each other and deliver the best of our firm to clients and this quarter. I also want to single out one colleague in particular, our Chief Financial Officer and my friend and partner, Christa Davies. As you know, Christa announced her retirement from her role as CFO earlier this month, following over 16 years of tremendous service.

Gregory Clarence Case: Good morning, everyone and welcome to our first quarter conference call I'm joined by Christa Davies, our CFO and Eric Anderson, our president.

Gregory Clarence Case: For your convenience, we posted a detailed financial presentation on our website.

Gregory Clarence Case: As always we began by thanking our colleagues around the world for the incredible work. They do every day and support each other and deliver the best of our firm to clients.

Gregory Clarence Case: And this quarter I also want to single out one colleague in particular our.

Gregory Clarence Case: Our Chief Financial Officer, and my friend and partner Christa Davies.

Gregory Clarence Case: As you know Crystal announced her retirement from her role as CFO earlier. This month following over 16 years of tremendous service.

Gregory Clarence Case: With Christa's guidance, we've developed a seamless transition. As previously announced, Christa remains in her CFO role for the second quarter earnings, and we're making strong progress against well-defined plans to have her successor in place to begin the handbook. I'm grateful that you'll continue to serve as a senior advisor into 2025 to ensure great continuity. Now, to begin our report today, it's important we start by highlighting an incredibly exciting milestone for us, the completion of our work to bring NFP into the Aon family as we closed the transaction yesterday, and the 7,700 NFP colleagues who now join us. Welcome to ALE!

Gregory Clarence Case: CHRISTUS guidance, we developed a seamless transition plan as previously announced Krista remains and our CFO role second quarter earnings and we're making strong progress against well defined plans to have her successor in place to begin to handle.

I'm Grateful that you will continue to serve as a senior advisor into 2025 to ensure great continuity.

Speaker Change: Now to begin our report today, it's important we start by highlighting an incredibly exciting milestone for our firm.

Speaker Change: The completion of our work to bring N F. P ended the Aon family as we close the transaction yesterday.

Speaker Change: To the 7700, NSP colleagues, who now join our firm.

Speaker Change: Welcome to Aon.

Gregory Clarence Case: NFP's client relationships, capabilities, focused sales force, and market knowledge provides a meaningfully expanded position in the fast-growing $31 billion North American middle market. Since our announcement in late December, we've gotten to know the team even better and our appreciation and excitement for what we can do together has continued to grow and the opportunity is even more clear. In commercial risk, complementary specialist resources and expertise from both organizations will enhance what we bring to clients, delivering analytics and decision support tools to the NFP sales force allows for real differentiation on top of their highly integrated sales, Further, we can reintroduce and introduce, reinforce NFPs offerings with access to our programs and facilities like Aon Client Treaty, and also in commercial risk, we can leverage our global Aon network for clients who require seamless global service to enhance an already strong NFP value problem.

Speaker Change: If these client relationships capabilities focused sales force and market knowledge provide some meaningfully expanded position in the fast growing $31 billion North American metal market.

Speaker Change: Since our announcement in late December we've gotten to know the team, even better and our appreciation and excitement for what we can do together has continued to grow and the opportunity is even more clear in commercial risk complementary specialist resources and expertise from both organizations will enhance what we bring to clients.

Speaker Change: We bring aon analytics and decision support tools. So the NLP Salesforce allows for real differentiation on top of their highly integrated sales approach.

Speaker Change: Further we can we introduce and introduce reinforce nlp's offerings with access to our programs and facilities like Aon client Treaty.

Also in commercial risk, we can leverage our global network for clients, who require a seamless global service to enhance an already strong and a P value proposition.

Gregory Clarence Case: In Wealth Solutions, we see a great opportunity to bring our capabilities around pension risk transfer to NFP clients, as well as to continue to build on our investment offerings together, ensuring all clients have access to retirement options that best support them and Ed Health Solutions. Our businesses are highly complementary, with new opportunities in the health value chain where we don't operate today, or for clients that we only serve in one solution. And, for example, NFP brings an outstanding health value proposition for clients with under 100 employees, an attractive option for our smaller clients in commercial risk.

Speaker Change: In wealth solutions, we see great opportunity to bring our capabilities around pension risk transfer to NFC clients as well as to continue to build on our investment offerings together.

Speaker Change: All clients have access to retirement options that support their people.

Speaker Change: And in health solutions, our businesses are highly complementary with new opportunities in the health value chain, where we don't operate today corporate clients. So we only served in one solution line, which for example, and if he brings outstanding top value proposition for clients with under 100 employees, an attractive option for our smaller clients in commercial risk.

Gregory Clarence Case: Conversely, we see a great opportunity to provide NFP's clients with our data analytics solutions, including benchmarking and tools on health equity, network strategies, and high-cost claims. Further, we can support current NFP clients with specialized capabilities in areas such as global benefits, pharmacy consulting, and consumer benefits. Another great strength of NFP is their exceptional M&A and very strong acquisition pipeline as we look to the future. On deal financials, we're delighted to close much earlier than originally modeled with fewer shares issued and realization of benefits that now occur a year earlier. Noting, we now expect EPS accretion to 26 and, thereafter, an additional free cash flow of $300 million and $600 million in 2025 and 2026, respectively.

Speaker Change: Conversely, we see great opportunity to provide N at pes clients with our data and analytics solutions, including benchmarking and tools on health equity network strategies and high cost claimants.

Speaker Change: We can support current MSP clients with specialized capabilities in areas, such as global benefits pharmacy consulting and consumer benefits.

Speaker Change: Another great strength of NLP as their exceptional M&A engine and very strong acquisition pipeline as we look to the future.

Speaker Change: On deal financials were delighted to close much earlier than originally modeled with fewer shares issued and realization of benefits that now occur a year earlier noted we now expect EPS accretion of 26, and thereafter, and additional free cash flow of $300 million and $600 million in 2025 and 2026, respectively.

Gregory Clarence Case: We're incredibly excited about the opportunity as we bring Aon and NFP content capabilities together, enabled by Aon Business Services. We also see great value in the operating model built around the principle of independent and connected, delivering risk capital and human capital capability to our clients. All in all, this acquisition is another strong step forward in our AON United journey and reinforces our long-term financial guidance to deliver mid-single-digit or greater organic revenue growth, adjusted operating margin expansion, and double-digit free cash flow growth over the long term. Turning now to our results for the quarter.

Speaker Change: We're incredibly excited about the opportunity as we bring aon and that'd be content and capabilities together.

Speaker Change: By Aon business services, we also see great value in the operating model built around the principle of independent and connected deliver risk capital and human capital capability to our clients.

Speaker Change: All in this acquisition is another strong step forward in our Aon, United Journey, and reinforces our long term financial guidance to deliver mid single digit or greater organic revenue growth.

Speaker Change: Operating margin expansion and double digit free cash flow growth over the long term.

Speaker Change: Turning now to our results in the quarter overall, our team delivered a strong start to the year with 5% overall organic revenue growth of 100 basis points of adjusted margin expansion and 9% EPS growth.

Gregory Clarence Case: Overall, our team delivered a strong start to the year with 5% overall organic revenue growth, 100 basis points of adjusted margin expansion, and 9% EPS growth. Within our solution lines, Reinsurance delivered 7% organic revenue growth as our team helped clients navigate continuing market challenges, but with greater capacity and stable pricing on programs. Further, our team is increasingly building on traditional capabilities with enhanced data, analytics, and advisory capabilities and Health Solutions. We deliver 6% organic revenue growth with strong growth in core health across all major geographies, driven by strong ongoing new business generation and retention and strength and specialist capabilities like consumer and pharmacy and Wealth Solutions.

Speaker Change: Within our solution lines reinsurance delivered 7% organic revenue growth as our team help clients navigate continued market challenges, but with greater capacity and stable pricing on programs.

Speaker Change: Further our team is increasingly building on traditional capabilities with enhanced data analytics and advisory capabilities.

Speaker Change: Health solutions delivered 6% organic revenue growth with strong growth in core health across all major geographies driven by strong ongoing new business generation and retention and strength in specialist capabilities like consumer and pharmacy benefits.

Speaker Change: Meanwhile, solutions organic revenue growth of 4% reflected strength in retirement as our teams continue to help clients reduce risk through pension risk transfer and manage the ongoing impact of regulatory changes as we continue to bring leading capabilities to help clients match risk and capital.

Gregory Clarence Case: Organic revenue growth of 4% reflected strength in retirement as our teams continue to help clients reduce risk through pension risk transfer and manage the ongoing impact of regulatory changes as we continue to bring leading capabilities to help clients match risk and capital in commercial risk. We saw 3% organic revenue growth, highlighted by strength in Asia and the Pacific, continental Europe, and areas in our portfolio like construction.

Speaker Change: In commercial risk, we saw 3% organic revenue growth highlighted by strength in Asia, and the Pacific Continental Europe and areas of our portfolio like construction.

Gregory Clarence Case: As we look at these results, especially in the U.S., we've seen the impact of our business mix play out, as we have strength and a strong weighting in larger clients, especially lines like B&O. These are significant areas within our U.S. business, and again, areas where we're strong, and we see substantial long-term top and bottom line growth potential, despite some current pressure reflected in that new business. Going forward, we'll continue to be strong in these categories and continue hiring and investing in priority areas like energy and construction.

Speaker Change: As we look at these results, especially in the U S. We've seen the impact of our business mix play out.

Speaker Change: We have strength and strong waiting in larger clients, especially in things like you know.

Speaker Change: These are significant areas within our U S business and again areas, where we're strong and we see substantial long term top and bottomline growth potential. Despite some current pressure reflected in net new business.

Speaker Change: Going forward, we will continue to be strong in these categories and continue hiring and investment in priority areas like energy and construction.

Gregory Clarence Case: We also observe, as we've mentioned previously, we're not seeing a real rebound yet in M&A and IPO activity, though we know there's demand for dry powder buildings. And until yesterday, we were relatively smaller in a $31 billion North American middle market.

Speaker Change: We also observed as we've mentioned previously we're not seeing a real rebound yet in M&A and IPO activity. So we know there's demand and dry powder building.

And until yesterday, we were relatively smaller and a $31 billion North American middle market, Although now with the close of NLP. We've added 7700 colleagues and established a much more meaningful position in this fast growing market.

Gregory Clarence Case: Now, with the close of NFP, we've added 7,700 colleagues and established a much more meaningful position in this fast-growing market. Overall, across the firm, we continue to focus on our most critical asset, our talent. Our engagement remains at a historically high level, and our voluntary attrition in Q1 is at the lowest level in many years.

Speaker Change: Overall across the firm we continue to focus on our most critical outside our talent.

Speaker Change: Our engagement remains at historically high levels and our voluntary attrition in Q1 is at the lowest level in many years on talent acquisition. We continue to increase hiring in selected client fee scenarios as well as an analytics capability to support our efforts in risk capital and human capital.

Gregory Clarence Case: On talent acquisition, we continue to increase hiring and selected client-facing areas, as well as an analytics capability to support our efforts in risk capital and human capital. In summary, we're making great progress to start the year. Our first quarter results and the close of NFP put us in a strong position to continue delivering results through 2024 and over the long term. This progress fully reinforces our 3x3 plan, focused on three fundamental commitments over the next three years, including capitalizing on our work in risk capital and human capital, delivering Aon client leadership, and amplifying these efforts through Aon Business Services.

Speaker Change: In summary, we're making great progress to start the year, our first quarter results and the close we're going to put us in a strong position to continue delivering results through 2024 and over the long term.

Speaker Change: This progress fully reinforces our three by three plan focused on three fundamental commitments over the next three years.

Speaker Change: Capitalizing on our work and risk capital and human capital delivering and client leadership and amplifying. These efforts through Aon business services the string.

Gregory Clarence Case: The strength, importance, and momentum of this plan are being strongly reinforced by ongoing client and colleague feedback. And this plan defines a powerful path forward, one that drives ongoing top and bottom line growth and greater levels of long-term free cash flow growth, exactly consistent with our ongoing financial guidance.

Speaker Change: Importance and momentum of this plan has been strongly reinforced by ongoing client and colleague feedback on.

Speaker Change: And this plan defines a powerful path forward, one that drives ongoing top and bottomline growth and greater levels of long term free cash flow growth exactly consistent with our ongoing financial guidance.

Finally.

Gregory Clarence Case: As I turn the call over to Christa, I want to return to my opening comments and thank her again for her partnership, leadership, and friendship. Ultimately, Christa will have left a permanent imprint on our Aon United strategy. For 16 years, our shared mission has been to connect our colleagues to a one-firm mindset so they can deliver more value to clients.

Speaker Change: As I turn the call over to Krista I don't want to return to my opening comments and thank you again for her partnership leadership.

Speaker Change: Friendship.

Krista: Ultimately crystal have left a permanent imprint on our Aon United strategy.

Krista: For 16 years, our shared mission has been to connect our colleagues to a one for mindset. So they can deliver more value to clients that mission is universally focused on accelerating and United and now.

Gregory Clarence Case: That mission is universally focused on accelerating AAN United, and now, in arguably our most exciting period, it's fully reflected in our 3x3 plan, and Christa has been a critical partner in all this work. Our Aon colleagues will miss her in the CFO role personally, but joining with her is a highlight of my professional career. Our 52,000 colleagues and, as of today, 60,000 and their families are in a better position because of this.

Krista: Arguably our most exciting period, it's fully reflected in our three by three plants and Kristina has been a critical partner in all of this work.

Krista: Our Aon colleagues will Miss Christina in the CFO role personally.

Krista: Joining with Christa as a highlight of my professional career.

Krista: Our 50000 colleagues and as of today 60000, and their families are in a better position because of our system.

Gregory Clarence Case: We're all grateful that Christa will be staying with us as a senior advisor to continue to drive momentum as she moves on to her next mission, and most important. We fully appreciate that there are other missions in life of higher priority, and we embrace Christa's decision to shift her focus at this time. Christa, my friend, over to you.

Krista: We're all grateful that Christopher will be staying with us as a senior advisor to continue to drive momentum as she moves on to our next submission.

Krista: The most important.

Krista: We fully appreciate that there are other mission in life of higher priority.

Krista: We embraced Christian the decision to shift our focus at this time Chris.

Krista: Krista my friend over to you.

Christa Davies: Thank you so much, Greg. I want to start by thanking you for the opportunity over the last 16 years to contribute to the incredible success we've had at Aon. This will be the defining role of my career, and that's really what's at the heart of this decision. As you described, this decision isn't about other professional pursuits. My decision is to focus my time differently at this point in my life.

Krista: Thank you so much Greg.

To start by thanking you for the opportunity over the last 16 years to contribute to the incredible success, how do they all this will be the defining role of my career and that's really what's at the heart of this decision. As you described this decision isn't about other professional pursuits. My decision is to focus my time differently at this point in my life I'm Grateful that all work together has created the ability.

Christa Davies: I'm grateful that our work together has created the ability for me to make this choice. But I must say, as our three-by-three plan delivers on its full potential in the months ahead, including the great addition of NFP, I'm going to truly miss working so closely with this team to realize the tremendous value creation that is ahead for AI. We're also very pleased to announce the completion of the NFP acquisition, and I'm delighted to welcome NFP to Aon.

Krista: For me to make this choice I must say, it's about a three by three plan delivers on its full potential in the months ahead, including with the Great addition of NSP I'm going to truly Miss working so closely with this team to realize the tremendous value creation that is a head fake.

Krista: We're also very pleased to announce the completion of the NFC acquisition I'm delighted to welcome the NSP to them.

Christa Davies: We're excited to work together to capture the growth opportunities we see for clients, colleagues, and shareholders. As we announced yesterday, we closed the transaction for a total enterprise value of $13 billion. The faster-than-expected close date means we now expect to achieve a similar benefit a year earlier, with improvements in certain metrics. For example, we maintained guidance for revenue and cost synergies of $235 million, which now occur a year earlier given the close date, we achieved a lower interest rate on deal-related debt of 5.7%, and we issued fewer shares at 19 million.

Krista: We're excited to work together to capture the growth opportunities, we see for clients colleagues and shareholders.

We announced yesterday, we closed the transaction for a total enterprise video, especially in billions.

Krista: The faster than expected close date means we now expect to achieve a similar benefit a year earlier with improvements in certain metrics no shame, we maintained revenue and cost synergies of $235 million, which nabokov, Yeah Ali it given the close date, which is a lower interest rate on the deal related debt is five seven.

Krista: <unk>.

Speaker Change: I mean, the issue fewer shares at $19 million.

Christa Davies: Collectively, this results in similar deal-related financial benefits of accretion and free cash flow that are realized a year earlier than initially modelled. We now expect the deal to add $300 million to free cash flow in 2025 and $600 million in 2026 and be accretive in 2026 and over the long term. We've also provided detailed financial information for NFP in our materials.

Speaker Change: Collectively this results in a similar deal related financial benefits of accretion on free cash flow that are realized a year earlier than initially models. We now expect the deal to add $300 million free cash flow in 2025, and $600 million in 2026 and be accretive in 2026 and over the long term.

Speaker Change: We've also provided detailed financial information for an SP and on materials.

Christa Davies: NFB builds on our long-term proven track record of strategically allocating capital at scale to high-return opportunities to create long-term value for clients, colleagues, and shareholders, and as Greg mentioned, it reinforces and accelerates our AON United strategy and our 3x3 plan and adds to our strong momentum as we drive results in 2024 and over the long term. Now turning to the quarter, we delivered strong operational performance at the start of the year, highlighted by 5% organic revenue growth, which translated into 100 basis points of adjusted operating margin expansion, 8% adjusted operating income growth, and 9% adjusted EPS growth. As Greg noted, organic revenue growth was 5% driven by ongoing strong retention and net new business generation. I'd note that fiduciary investment income, which is not included in organic revenue growth, was $79 million.

Speaker Change: And if the builds on our long term proven track record of strategically allocating capital at scale. It's a high return opportunities to create long term value for clients colleagues and shareholders.

Speaker Change: And as Greg mentioned, it reinforces and accelerates.

Speaker Change: This strategy and all three by three plot and adds to our strong momentum as we drive results in 2024 and over the long term now.

Speaker Change: Now turning to the quarter.

Speaker Change: We delivered strong operational performance Scott, Yeah highlighted by 5% organic revenue growth, which translated into a 100 basis points of adjusted operating margin expansion.

Speaker Change: 8% adjusted operating income growth and 9% adjusted EPS growth.

Speaker Change: As Greg noted organic revenue growth was 5% driven by ongoing strong retention and net new business generation.

I've met the fiduciary investment income, which is not included in organic revenue growth was $79 million.

Christa Davies: If you were to include fiduciary investment income, organic revenue growth would have been 70 basis points higher. We continue to expect greater organic revenue growth for the full year 2024 and over the long term. And as we look forward, we continue to expect that NFP will contribute to the firm's overall revenue growth through organic revenue growth, including $175 million of net revenue synergies by 2026, and inorganic growth from ongoing M&A.

Speaker Change: With her include finish your investment income organic revenue growth would've been 70 basis points higher.

Speaker Change: We continue to expect mid single digit or greater organic revenue growth for the full year 2024.

Speaker Change: The long term.

Speaker Change: And as we look forward, we continue to expect the NFPA will contribute to the firm's overall revenue growth through organic revenue growth, including $175 million of net revenue synergies by 2026 and inorganic growth from ongoing M&A.

Christa Davies: Moving to operating performance, we delivered strong operational improvement in Q1 with adjusted operating margins of 39.7%, an increase of 100 basis points, driven by revenue growth, portfolio mix shift, efficiencies from Aon Business Services, and restructuring savings, overcoming expense growth, including investments in colleagues and technology to drive long-term growth. Restructuring savings in Q1 amounted to 20 million and contributed 50 basis points to adjusted operating margin expansion. Restructuring actions completed so far are expected to generate $90 million of savings in 2024.

Speaker Change: Moving to operating performance, we delivered strong operational improvement in Q1 with adjusted operating margins of 39, 7% an increase of 100 basis points driven by revenue growth portfolio mix shift efficiencies from Aon business services and restructuring savings overcoming expense growth.

Speaker Change: <unk> investments and colleagues and technology to drive long term growth.

Speaker Change: Restructuring savings in Q1 with $20 million and contributed 50 basis points to adjusted operating margin expansion.

Speaker Change: Restructuring actions completed so far are expected to generate $19 million of savings in 2024, and we expect restructuring savings will fall to the bottom line.

Christa Davies: And we expect restructuring savings to fall to the bottom line. At this time, we continue to expect $100 million of realized savings in 2024 as we continue to execute against our plans for Aon Business Services and our business. Regarding the program, we are seeing real progress in our acceleration of Aon Business Services.

Speaker Change: At this time, we continue to expect $100 million of realized savings in 2024, as we continue to execute against our plans for Aon business services and our business.

Regarding the program, we are seeing real progress and our acceleration of Amazon services. This include streamlining and improving operational processes around working capital moving what to the best locations and our hearts and clients and colleagues experience with great new tools, such as our property casualty D&O and cyber.

Christa Davies: This includes streamlining and improving operational processes around working capital, moving work to the best locations, and enhancing clients' and colleagues' experiences with great new tools such as our Property, Casualty, DNO, and Cyber Analyzer. As we've said previously, we know delivering a business services strategy will result in long-term top and bottom line growth as we drive more value for clients, colleagues, and shareholders, as we think about adjusted operating margins going forward We continue to expect to drive margin expansion over the long term through ongoing revenue growth and portfolio makeshifts to higher growth, higher margin areas of the portfolio, driven by efficiencies from Aon Business Services. However, now that we've closed NFP, margins will be initially lower.

Speaker Change: The license.

Speaker Change: As we've said previously we know delivering and business services strategy will result in long term top and bottom line growth as we drive more value for clients colleagues and shareholders.

Speaker Change: As we think about adjusted operating margins going forward.

We continue to expect to drive margin expansion over the long term through ongoing revenue growth and portfolio mix shift to higher growth higher margin areas of the portfolio driven by efficiencies from Amazon services.

Speaker Change: Now that we've closed NSP margins will be initially lower.

Christa Davies: Considering the close timing, we think the right baseline from which to measure 2024 adjusted operating margin growth is 30.6%, calculated as our 31.6% in 2023, less a 100 basis point drag from NFP for the period from April 25th through the end of 2024. In our materials, we've detailed 2023 operating performance for NFP. On a full year basis, we would note that NFP would have had a full year pro forma drag of 140 basis points in 2023. So there'll be some ongoing drag on 2025 margins until we lap the close in April 2025. We also expect fiduciary investment income to be relatively flat year-over-year, based on current interest rate expectations.

Speaker Change: Considering the close timing, we think the right baseline from which to measure 2024, adjusted operating margin growth is 36% calculated as our study one 6% in 2023, less 100 basis point drag from N F. P for the period from April 25th close through the end of 2024.

Speaker Change: In our materials with detailed 2023 operating performance of NSP.

Speaker Change: On a full year basis, we would note that NSP would've had a fully pro forma drag of 140 basis points for 2023, so there'll be some ongoing drag on 2025 margins until we lap the close in April 2025.

Speaker Change: We also expect fiduciary investment income to be relatively flat year over year based on current interest rate expectations. So the tailwind that we've seen in Q1. This year will be reduced although we remain committed to driving full year adjusted operating margin expansion in 2020 for I guess this adjusted baseline, especially <unk>.

Christa Davies: So the tailwind that we've seen in Q1 this year will be reduced, although we remain committed to driving full-year adjusted operating margin expansion in 2024 against this adjusted baseline of 30.6% and over the long term. Turning to EPS, adjusted EPS grew 9% in the quarter, reflecting 8% adjusted operating income growth and ongoing share buyback, partially offset by a higher tax rate in the quarter. With respect to NFP, as we previously communicated, we expect the acquisition to be dilutive to adjusted EPS in the remainder of 2024, breakeven in 2025, and accretive to adjusted EPS in 2026 and beyond. Turning to free cash flow, I'd note Q1 has historically been our seasonally smallest quarter from a cash flow standpoint, due primarily to incentive compensation payments.

Speaker Change: 6% and over the long term.

Turning to EPS adjusted EPS grew 9% in the quarter, reflecting 8% adjusted operating income growth and ongoing share buybacks, partially offset by a higher tax rate in the quarter.

Speaker Change: With respect to NFC as we previously communicated we expect the acquisition to be dilutive to adjusted EPS in the remainder of 2024.

Speaker Change: Break even in 2025 and accretive to adjusted EPS in 2026 and beyond.

Speaker Change: Turning to free cash flow.

Q1 has historically been our seasonally smallest quarter from a cash flow standpoint, due primarily to incentive compensation payments.

Christa Davies: And as we've communicated before, free cash flow can be lumpy quarter-to-quarter. We generated $261 million of free cash flow in the first quarter, reflecting strong operating income growth and lower CAPEX, offset by higher receivables, payments related to E&O, restructuring, NFP transaction integration charges, and higher cash tax payments, as we've previously communicated. As we look forward, we expect ongoing negative impacts on free cash flow in the near term from restructuring, higher interest expense, and NFP deal and integration costs.

Speaker Change: And as we've communicated before free cash flow can be lumpy close to close out.

Speaker Change: We generated 261 1 million of free cash flow in the first quarter, reflecting strong operating income growth and lower capex offset by higher receivables payments related to restructuring.

Restructuring and F P transaction and integration charges and higher cash tax payments as we've previously communicated.

Speaker Change: As we look forward, we expect ongoing negative impacts to free cash flow in the near time from restructuring higher interest expense and NSP deal and integration costs.

Christa Davies: The NFP acquisition strengthens our long-term free cash flow outlook with $300 million of incremental free cash flow in 2025 and $600 million in 2026. Over the long term, we would expect to return to our trajectory of double-digit free cash flow growth driven by operating income growth and a $500 million opportunity in working capital. Now, turning to capital allocation.

Speaker Change: The acquisition strengthens our long term free cash flow outlook with $300 million of incremental free cash flow in 2025 and $600 million in 2026.

Speaker Change: Over the long term, we would expect it to return to a trajectory of double digit free cash flow growth driven by operating income growth and a $500 million opportunity in working capital.

Speaker Change: Now turning to capital allocation.

Christa Davies: We allocate capital based on return on capital and long-term value creation, which we've done over time through core business investment, share buyback, and M&A. Regarding M&A, as you can see historically, we have a successful track record of balancing acquisitions, divestitures, and share buyback as we continue to optimize our portfolio against our priority investment areas on an ROIC-based basis. We're incredibly excited about NFP's impressive M&A engine, noting their strong history of M&A.

Speaker Change: We allocate capital based on return on capital on the long term value creation, which we've done over time through coal business investment share buyback and M&A.

Speaker Change: Regarding M&A as you look historically, we have a successful track record of balancing acquisitions divestitures and share buyback as we continue to optimize our portfolio and I got the top priority investment areas on a ROIC basis.

Speaker Change: We're incredibly excited about and if these impressive M&A engine noticing a strong history of M&A, we look forward to building on their established track record in executing against a strong pipeline to drive future growth in this space within our ROIC framework.

Christa Davies: We look forward to building on their established track record and executing against their strong pipeline to drive future growth in the space within our ROIC framework. However, we still expect share buyback to remain the top priority for capital allocation.

Speaker Change: We still expect share buybacks to remain the top priority for capital allocation.

Christa Davies: As we think about capital allocation in 2024, we've observed there are puts and takes around free cash flow that we've communicated. And while buyback will be lower than last year, we expect it will still be substantial, at a billion dollars or more based on our current M&A expectations for the rest of the year. We have a very strong, long-term free cash flow outlook for the firm and are confident that share repurchase will continue to remain our highest ROYC opportunity for meaningful, ongoing capital allocation over time.

Speaker Change: As we think about capital allocation in 2024, we observed there are puts and takes around free cash flow that we've communicated and while buyback will be lower than last year. We expect it will still be substantial at $1 billion or more based on our current M&A expectations for the rest of the year.

Speaker Change: We have a very strong long term free cash flow outlook for the fab and are confident that share repurchase will continue to remain our highest ROI see opportunity the meaningful ongoing capital allocation over time.

Christa Davies: Turning now to our balance sheet and debt capacity, we remain confident in the strength of our balance. As previously communicated, we funded the cash and assumed liabilities portion of the NFB purchase with approximately $7 billion of new debt, with $5 billion raised in March 2024 and $2 billion borrowed at close. And I'd note the average interest rate for the $5 billion of transaction-related senior notes and the $2 billion term loan is 5.7%, about 80 basis points better than what we modelled when we announced the deal.

Speaker Change: Turning now to our balance sheet and debt capacity, we remain confident in the strength of our balance sheet. As previously communicated we funded the cash and assumed liabilities portion of the NFC touch us with approximately 7 billion of new debts with 5 billion raised in March 2024, and 2 billion BARDA close.

Speaker Change: And the average interest rate for the 5 billion of transaction related senior note and the $2 billion timeline is five 7% about 80 basis points better than what we modeled when we announced the deal.

Christa Davies: We expect our credit ratios to be elevated over the next 12-18 months as we bring our leverage ratios back in line with levels consistent with our credit profile, 2.8 to 3 times debt to EBITDA on a gap basis. This is driven by substantial free cash flow generation and incremental debt capacity from EBITDA growth, noting our track record of effectively managing leverage within our current ratings. In summary, our operating performance in Q1 was a strong start to the year, and we're well positioned to build on this momentum in the rest of the year.

Speaker Change: We expect our credit ratios to be elevated over the next 12 to 18 months as we bring our leverage ratios back in line with levels consistent with our credit profile shaped like eight to three times debt to EBITDA on a GAAP basis.

Speaker Change: This is driven by substantial free cash flow generation and incremental debt capacity from EBITDA growth, noting our track record of effectively managing leverage within current ratings.

Speaker Change: In summary, our operating performance in Q1 is a strong start to the air and we're well positioned to build on this momentum in the rest of it went to license you have closed NSP acquisition ahead of schedule, enabling us to achieve the natural benefits of accretion on a free cash flow a year earlier than initially modeled.

Christa Davies: We're delighted to have closed the NFP acquisition ahead of schedule, enabling us to achieve financial benefits of accretion and free cash flow a year earlier than initially modelled. We look forward to enhancing NFP's strong client relationships with Aon's content and capabilities and see a real opportunity to learn from each other and bring better solutions to our clients together. It's another step forward in our 3x3 plan as we accelerate our Aon United strategy, catalyzed by Aon Business Services and reinforced by the restructuring program. With that, I'll turn the call back to the operator, and we'd be delighted to take your question. Thank you. We will now be conducting.

Speaker Change: We look forward to enhancing nsp's strong client relationships with aon content capabilities and see real opportunity to learn from each other and bring better solutions to our clients together.

Speaker Change: It's another step forward in a three by three plan as we accelerate our Aon United strategy catalyzed by Aon business services and reinforced by the restructuring program.

Speaker Change: With that I'll turn the call back to the operational and we'd be delighted to take your questions.

Speaker Change: Thank you we will now be conducting a question and answer session.

Operator: Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants, these include your equipment, and it may be necessary to pick up your handset before pressing start.

Speaker Change: I'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue.

Speaker Change: Participants using speaker equipment and may be necessary to pick up your handset before pressing the star.

Operator: One moment, please, while we poll for each question. Our first question is from Andrew Kligerman with TD Security. Please proceed with your question.

Speaker Change: One moment, please while we poll for questions.

Speaker Change: Our first question is from Andrew Cleveland with TD Securities. Please proceed with your question.

Andrew Scott Kligerman: Thank you, good morning, and congratulations, Christa. Greg, you mentioned in the opening remarks the lowest attrition that Aon has seen in a while. Could you give any details on that, any color? It sounds very interesting.

Andrew Scott Kligerman: Thank you good morning.

Andrew Scott Kligerman: And congratulations Kristen Greg you mentioned.

Andrew Scott Kligerman: And in the opening remarks.

Andrew Scott Kligerman: At least attrition.

Andrew Scott Kligerman: <unk> seen in a while could you could you put any details around that any color it sounds very interesting.

Gregory Clarence Case: Well, Andrew, I appreciate the question. Listen, if you step back and think about talent overall and what we're about and what we're up to, this is really about how we built on A.N. United and the strategy around the culture, and it's been foundational, how we connect our colleagues, support each other, and deliver the best we can for our clients, and that has just continued to build, and it really gives them an opportunity to sit across the table and do some pretty unique things with clients, which is why they're here, why they're excited about being part of our firm, and then on top of that, now, we've got the three So for all those reasons, this is a pretty unique place to be at a time when clients have high need, but Eric, what else would you add?

Gregory Clarence Case: So Andrew I appreciate the question listen if you step back and think about sort of talent overall and what we're about and we're up to this is really about how we built on aon, United and the strategy around the culture and it's been foundational how we conduct our colleagues support each other and deliver the best we can for our clients and that has just continued to build and it really gives them an opportunity.

Gregory Clarence Case: They sit across the table to do some pretty unique things with clients, which is why which is why they are here and why they are excited about being part of our firm and then on top of that now we've got the three by three plant, Andrew which literally is going to continue to enhance this very substantially with greater content and capability and risk capital and human capital.

Gregory Clarence Case: As well as the analytics that underpin all of that driven by ABS. So for all those reasons.

Speaker Change: You know this is a pretty unique place to be at a time when clients on Friday, but Erik what else would you add to that.

Eric Andersen: Greg, maybe I'll just take it down. If you're an account leader or a colleague working with a client, just picking up on your example, culture, capabilities, team support, all those drive a decision to either come or stay at our firm. If you just think about it, historically, if you were part of a client team, you were having a product discussion with a client. Today, if it's a risk client, you're having a risk capital discussion.

Erik: Hello, Greg maybe I'll, just take it out of Euro and account leader or a colleague working with a client just picking up on your example.

Erik: Culture and capabilities to support all of those drive a decision to either come more stay at our firm and if you just think about it historically if you were part of our client team you were having a product discussion with a client today, you're having if its a risk client youre, having a risk capital discussion so you're having colleagues from commercial risk from re <unk>.

Eric Andersen: You're having colleagues from commercial risk, from REIT, maybe captives, maybe risk consulting, using new tools like the risk analyzers that Christa mentioned that are created with our ABS colleagues. It creates professional development for them, and it creates a team-based environment where you're actually providing real new value to clients. And so I think all of that drives why people come and then, ultimately, why they stay with us.

Erik: Captors may be risk consulting.

Erik: Using new tools like the risk analyzers that Christa mentioned that are created with our a b S colleagues.

Erik: It creates a professional development for them and it creates a team based environment, where you're actually providing real new value to clients and so I think all of that drives why people come and then ultimately why they stay with us.

Andrew Scott Kligerman: It was awesome. And then just shifting over to the tax rate of around 23% this quarter. It's a bit surprising just given that, over the last several years, it's kind of hovered around 18 and a half. And I know Christa doesn't give guidance on this, but maybe given the big move in the tax rate and your points in the write-up about changing geography, you could give us a little color on A, the change in the tax rate, and B, maybe an exception and an indication of where we might expect the tax rate to be going forward, especially with NFP there.

Speaker Change: Awesome and then just shifting over to the tax rate around 23%. This quarter was a bit surprising just given that over the last several years, it's kind of hovered around 18, and a half and I know Christy doesn't give guidance on this but maybe maybe given the big move in the tax rate and your points.

Speaker Change: The write up of that changing geography, you could give us a little color on a change in geography of the attacks and B, maybe an exception and an indication of where we might expect the tax rate to be going forward, especially with NSP there.

Christa Davies: Thanks so much for the question, Andrew. And we did see a higher tax rate this quarter driven by, as you said, changes in the geographic distribution of income and unfavorable discreets. And I will note, Andrew, that discreets have historically been positive for us.

Speaker Change: Thanks, So much for the question, Andrew and we did see a higher tax rate this quarter driven by as you said changes in the geographic distribution of income and unfavorable discrete and I will let Andrew that it's great to have historically been positive for US and then this quarter. They really didn't just lineup to be net negative.

Christa Davies: And in this quarter, they really did just line up to be net negative. And what I would say is, look, it's just lumpy quarter to quarter. And, as you said, we don't give guidance going forward. But if we look back historically, exclusive of the impacts of discreets, which can be positive or negative, our historic underlying rate for the last five years has been 18%.

Andrew Scott Kligerman: And what I would say is look it's just lumpy quarter to quarter.

Andrew Scott Kligerman:

Andrew Scott Kligerman: As he said, we don't give guidance going forward, but if we look back historically exclusive.

Andrew Scott Kligerman: The impacts of discrete which can be positive or negative.

Andrew Scott Kligerman: Talk underlying rate to the last five years has been 19%.

Andrew Scott Kligerman: Okay, thank you very much.

Speaker Change: Okay. Thank you very much.

Operator: Our next question is from Jimmy Bullen with J.P. Morgan. Please proceed with your question.

Speaker Change: Our next question is from Jimmy Buhler with J P. Morgan. Please proceed with your question.

Jimmy Bullen: Good morning. So first, I just had a question on organic growth at commercial risk. If we look over the past year, year and a half or so, it seems to have lagged what we've seen with some of your peers. And initially, I think a lot of people were concerned that this was because of the fallout from Willis. You've highlighted the capital markets activity, pressuring your results more than peers as well. But I'm wondering if you could just talk about why you feel your growth has lagged some of your large peers, even though, historically, you've actually been fairly consistent with growth with most of the other competitors.

Jimmy Buhler: Yeah. Good morning. So first just had a question on organic growth in commercial risk. If we look over the past year year, and a half or so it seems to have lagged what we've seen in some of your peers.

Jimmy Buhler: And initially I think a lot of people were concerned that this was because of the fallout from the list.

You've highlighted the capital market's activity pressuring your results more than peers as well, but wondering if you could just talk about.

Jimmy Buhler: Why do you feel your growth has lagged.

Jimmy Buhler: Some of your large peers, even though historically, you've actually been fairly consistent with growth in that most of the other competitors.

Gregory Clarence Case: Jimmy, I really appreciate the question. And maybe what I'll do is I'll step back and just, again, outline the overall direction for Global Aeon, how we think about the firm, and how we think about progress over time. And if you step back, you know, we essentially said, first of all, this is not about one quarter. It really is about, as you look across the year, kind of how we're performing across Global Aeon over the course of the year.

Really appreciate the question and maybe what I'll do is I'll step back and just again Orient overall for global Aon and how do we think about the firm and how are we thinking about progress over time, and if you step back.

Jimmy Buhler: Since you said first of all this is not about one quarter.

Jimmy Buhler: Really it's about as you look across over the year kind of how we're performing across global Aon over the course of the year and our mission right now, which we're going to continue to push on it really amplifies the build on the <unk> III plant over the next three years and this is really capitalizing on risk capital and human capital amplifying through Aon business services and delivering Aon.

Gregory Clarence Case: And, you know, our mission right now, which we're going to continue to push on and really amplify, is to build on the three by three plan over the next three years. And this is really capitalizing on risk capital and human capital, amplifying through annual business services, and delivering Aeon client leadership, which we know, Jimmy, is going to together deliver both top line and bottom line performance. And most important, the double digit annual free cash flow growth compared to our twenty-three baseline that Christa described. And if you think about, you know, the quarter, which you're coming back to now asking specifically, I'm going to get to commercial risk very explicitly in a second.

Jimmy Buhler: Client leadership, which we know Jimmy it's going together deliver both topline and Bottomline performance and most important the double digit annual free cash flow growth compared to our 23 baseline that Christa described and if you think about the quarter whats youre coming back asking specific and I'm going to get the commercial risk very explicitly in a second but our goals.

Gregory Clarence Case: But our goals in the quarter, from our standpoint, were actually accelerated in terms of that three by three plan. Think about ABS, the introduction of our analyzers, and the client experience improvements. Client response has been exceptional and real progress in the quarter. Our restructuring plan, as Christa highlighted, substantially strengthens what we've done in ABS substantially, and it really supports substantial hiring in priority areas. So all good from a priority standpoint.

Jimmy Buhler: In the quarter from our standpoint, we're actually accelerated in terms of the three by three plan, we think about ABS. The introduction of our analyzers in the client experience improvements client response has been exceptional and real progress in the quarter, our restructuring plan as Christa highlighted strengthens.

Jimmy Buhler: What we've done in ABS substantially and it really supports substantial hiring in priority areas. So all good from a from a priority standpoint, then obviously of course the announcement of MFP.

Gregory Clarence Case: And obviously, of course, the announcement of NFP with truly game-changing access to the North American middle market. And really, you know, everything you think about all aspects are generally aspects of the close improved since our summer 20th announcement. So if we step back, Jimmy, you sort of say, how are we doing from our standpoint?

Jimmy Buhler: With truly game change your access into the North American middle market and really everything.

Jimmy Buhler: About all aspects are generally aspects of the clothes improved since our December 20th announcement. So if we step back do you mean, you sort of say how are we doing from our standpoint, we feel very good, especially about the three by three plan and the progress we made on it and if you think about the quarter overall for Aon, we delivered mid single digit growth, 5% with strength in health and reinsurance in Continental Europe.

Gregory Clarence Case: We feel very good, especially about the three by three plan and the progress we made on it. And if you think about the quarter overall for Aeon, we delivered mid-sequences of growth of five percent for strength and health and reinsurance and continental Europe and Asia and the Pacific margin expansion of 100 basis points, EPS growth of nine percent, and free cash flow exactly in line with expectations. And then specifically to your question, because I want to make sure I get to that.

Jimmy Buhler: Asia Pacific margin expansion of 100 basis points EPS growth of 9% and free cash will exactly in line with expectations and then specifically to your question, but want to make sure we get to that look we saw the strength in commercial or across Continental Europe Asia and Pacific All very good we highlighted the mixed play.

Gregory Clarence Case: Look, we saw strength in commercial across continental Europe, Asia, and the Pacific, all very good. You know, we highlighted the mixed play, you know, as we think about where we really have large portions of our business weighted toward larger clients, especially in some of our lines, and there's some pressure there. But we also observed, obviously, as we just described, we were very underweight in the past scoring middle market until yesterday, and now we see a massive opportunity going forward. They're all consistent with the three by three plan.

Jimmy Buhler: As we think about it where we really have large portions of our business weighted towards larger clients, especially in.

Jimmy Buhler: And some of the specialty lines like D&O and Theres some pressure there, but we also observed obviously as we just described.

Jimmy Buhler: We're very underweight in the fast growing middle market until yesterday and now we see a massive opportunity going forward. They are all consistent with the three by three plan and we've communicated previously the negative impact on transaction and IPO activity, which is you have to rebound, but we are very confident that well. So from our standpoint look we feel very good about the trajectory and we're going to be able to do over time and deliver on the three.

Gregory Clarence Case: And we've communicated previously the negative impact on transaction and IPO activity, which has yet to rebound, but we are very confident it will. So from our standpoint, look, we feel very good about the trajectory and what we're gonna be able to do over time and deliver on the three by three plan in a very clear way. And it's gonna be a great outcome for clients, a great outcome for our colleagues who will deliver that value, and ultimately for our shareholders.

Jimmy Buhler: <unk> III plant.

Jimmy Buhler: And a very clear way and it's going to be great outcomes for clients a great outcome for our colleagues, who would deliver that value and ultimately for our shareholders and I just want to reiterate what Christa described we're at mid single digit organic growth.

Gregory Clarence Case: And I just wanna reiterate what Christa described: we're at new single-digit organic growth or greater, and that commitment holds across 24 and over the long term. And we fully expect to translate that into, frankly, strong top line and bottom line performance.

Jimmy Buhler: Or greater and that commitment holds across 24 went over the long term and we fully expect to translate that into frankly strong topline and Bottomline performance.

Jimmy Bullen: Okay, thanks. And then just following up on buybacks, I'm assuming this year is going to be lower than last year, partly because of the drag from NFP, then also the drag because of the restructuring program. But if we think about 1Q, was it also depressed because of just seasonality of cash flows, or is this sort of a normal quarter in terms of buybacks? Yeah, so Jimmy, thank you for the question.

Speaker Change: Okay. Thanks.

Speaker Change: Then just following up on buyback.

Speaker Change: Assuming this year is going to be lower than last year, partly because of the drag does it been a fee. Then also the drag because of the restructuring program, but if we think about <unk> was it also depressed because of the seasonality of cash flows or is this sort of a normal quarter.

Speaker Change: Quarter in terms of buyback.

Speaker Change: Yeah. So Jamie Thank you for the question and I did actually give a specific guidance to my opening remarks about buyback because I recognize there's a lot of puts and takes around the free cash flow as we've communicated and well buyback will be lower than last year. We expect will be still be some stats show for the full year 2024 at a $1 billion or more based on our current M&A expectations.

Christa Davies: Yeah, Jimmy, thank you for the question. And I did actually give specific guidance in my opening remarks about buybacks because I recognize that there are a lot of puts and takes around free cash flow, as we've communicated. And while the buyback will be lower than last year, we expect it will still be substantial for the full year 2024, at a billion dollars or more based on our current M&A expectations for the rest of the year. And as you mentioned, Q1 is our seasonally smallest free cash flow quarter.

Speaker Change: The rest of the year.

Speaker Change: And as he mentioned Q1 is our seasonally smallest free cash flow quarter.

Operator: Thank you. Our next question is from Mike Zaremski with BMO Capital Markets. Please proceed with your question.

Speaker Change: Okay. Thank you.

Thank you. Our next question is from Mike Zaremski with BMO capital markets. Please proceed with your question.

Michael David Zaremski: Good morning. Congratulations, Christa. On the NFP deal closing, is there anything we should be aware of in terms of the shares Ann will be issuing to the owners of NFP and whether there's like a lockup or, you know, the expected sale of those shares over time given how large a amount it is?

Michael David Zaremski: Hey morning Congrats.

Michael David Zaremski: Congrats Christa.

Michael David Zaremski: On T. He deal closing is there.

Michael David Zaremski: Is there anything we should be.

Speaker Change: We are up in terms of the.

Speaker Change: The shares and we'll be issuing and two does it.

Speaker Change: To the owners of NFPA, and whether there's like a lock up or.

Speaker Change: The expected sale of those shares over time, given how a large amount of it is.

Christa Davies: Thanks so much for the question. And we did issue the 19 million shares yesterday. So that happened, and we haven't disclosed anything related to the MDP lockup. What we can say is the NFP management team did receive a meaningful amount of Aon shares, and the purchase agreement refers to their lockup period. And we have spent time with our new investors, and they're really excited about the Aon story and appreciate how the acquisition furthers our Aon United strategy, and are particularly excited about the 3x3 plan too.

Speaker Change: Thanks, So much for the question and we did issue the 19 million shares yesterday, it's about the cut.

Speaker Change: And we haven't disclosed anything related to the M D T lock up what.

Speaker Change: We can say.

Speaker Change: Is the NSP management team did receive a meaningful amount of Aon shares on the purchase agreement precise with their lockup period, and we have spent time with our new investors and they're really excited about the island story and appreciate how the acquisitions furthest out Aon United strategy and are particularly excited about the three by three plan too.

Speaker Change: Okay got it.

Michael David Zaremski: Okay, got it. My follow-up is also on the NFP deal. Now that it's closed, you know, the math that you gave when the deal was announced on the interest expense appeared to bake in a slightly higher interest rate level in our, it looks like, than current interest rates. And just given the cost of capital, it's actually even a bit higher today. You know, would this also kind of incentivize Aon to pay down the debt faster as well as you had thought maybe a few months ago when the deal was announced? Thanks.

My follow up is also on the a N a.

Speaker Change: P deal now that it's closed.

Speaker Change: The math.

Speaker Change: You gave US you gave but when when the deal was announced on the interest expense.

Speaker Change: Appear to bake in a slightly higher.

Speaker Change: Interest rate level.

Speaker Change: It looks like then current interest rates and just given cost of capital is actually even a bit higher.

Speaker Change: Today.

Speaker Change: But does it also kind of incentivize.

Speaker Change: And debt to pay down the debt.

Speaker Change: Faster as well than you had thought maybe.

Speaker Change: A few months ago, when the deal was announced thanks.

Christa Davies: Thanks so much for the question, Mike. And so if you look at the financials we've outlined, the synergies and deals financials, what you'll observe with the interest expenses is that when we originally announced this in December, we had $230 million of interest expense in the stub period, which at the time was a six-month stub period. And we now have $285 million in that period. And it's really the result, Mike, of the two extra months.

Speaker Change: Thanks, So much for the question, Mike and so if you look at the financials, we've outlined the synergies and deal financial what you'll observe what the interest expenses.

Speaker Change: Originally announced this in December.

December we had $230 million of interest expense in the stub period, which at the time was a six month stub period, and we now have $285 million in that period, and it's really a result of.

Speaker Change: The two extra months interest is actually at a lower average interest rate. We had originally forecast the average interest rate on the 7 billion of debt to be six 5%. It's now five 7% or 80 basis points less so the interest.

Christa Davies: Interest is actually at a lower average interest rate. We had originally forecast the average interest rate on the $7 billion of debt to be 6.5%. It's now 5.7%, so a whole 80 basis points less. The interest rate is lower, but you've got two more months. And then you can see that the interest expense in the future years, 2025 and 2026, is coming down from our original estimate. So the $310 million we now have in 2025 compares to the $410 million we had before, and the $275 million compares to the $340 million. So you can see how the lower interest rates are impacting those future years. Ah, okay.

Speaker Change: Right, it's less but you've got two more months and then you can see that the interest expense in the future years 2025, and 2026 is coming down from our original estimate. So the 310, we now have in 2025 compares the form 10, we had before in the 275 compares to the $3 40. So you can see how.

Speaker Change: The lower interest rates impacting both speech he is.

Michael David Zaremski: Okay, okay. Got it. We'll look at that. Thank you.

Speaker Change: Oh, Okay. Okay got it look at that thank you.

Operator: Our next question is from Elyse Greenspan with Wells Fargo. Please proceed with your question.

Speaker Change: Our next question is from Elyse Greenspan with Wells Fargo. Please proceed with your question.

Elyse Beth Greenspan: Hi, thanks. Good morning. My first question is, just, you know, on why new business was down year over year in the U.S. specifically versus other regions. And, you know, Greg, I know you called out some business lines, but can you just help us think about how that might rebound from here?

Elyse Beth Greenspan: Hi, Thanks. Good morning, My first question I was hoping to get more color or just.

Elyse Beth Greenspan: And why the new business was down year over year in the U S specifically versus other regions.

Elyse Beth Greenspan: And Greg.

Elyse Beth Greenspan: Greg I know you called out some business lines, but can you just help us think about.

Elyse Beth Greenspan: How that might rebound from here.

Gregory Clarence Case: I appreciate the question, Elyse. Overall, globally, you know, a very strong profile across the board, as we said before, both on retention, exceptionally high, and on new business overall. All we just did was highlight a couple areas in the U.S. where we're seeing some pressure, and that's really what we're showing up for. That will rebound over time, you know, as we continue to talk to clients about the opportunities they've got to read, you know, as they think about their overall programs in terms of where they are. But Eric, anything you'd add to that perspective?

Gregory Clarence Case: I appreciate the question Elyse.

Gregory Clarence Case: Start overall globally very strong profile across the board as we said before both on retention exceptionally high and on new business. Overall, all we just did is highlighted a couple of areas in the U S, where we're seeing some pressure.

Gregory Clarence Case: And that's really what we're showing up that that will rebound over time.

Gregory Clarence Case: You know as we continue to talk to clients about the opportunities they've got three you know as they think about their overall programs in terms of where they are but Eric anything you'd add to that that's perspective.

Eric Andersen: Yeah, great. I mean, you talked about DNO in particular, but I would also say we've had some really solid growth in areas like energy and construction and other places where we're investing in talent to grow our capabilities there. That's the sector piece, but we're also investing in, you know, geographic areas called continental Europe and Asia Pacific, where we're also seeing good growth. So I think we will see, you know, great opportunities for us as we go forward through the year.

Eric Andersen: Yeah, Greg I mean, you talked about D&O in particular, but I would also say we've had some really solid growth in areas like energy and construction and other places where we're investing in talent to grow our capabilities there.

Eric: That's the sector piece, but we're also investing in <unk>.

Eric: Geographic area is called Continental Europe Asia Pacific, where we're also seeing good growth so.

Eric: I think we will see.

Eric: Great opportunity for us as we go forward through the year.

Elyse Beth Greenspan: And then in terms of the transactional, the M&A, and the SPAC, and the IPO business, I guess, how would Q1 compare, right? That's been a business that's been a headwind for you guys over the last, you know, six, seven quarters. How would – have you started to see any of that business come back, or would you still say we're, you know, close to trough levels there? So, Elyse, I don't think there's anybody on the planet that looks at it closer than we do as we've been watching it.

Eric: And then in terms of the transaction all the M&A on this back in the IPO business I.

Eric: I guess, how would the Q1 compare right that that's been a business that's been a headwind for you guys right over the last six seven quarters. How would have you started to see any of that business come back or would you still say work.

Eric: The trough levels there.

Eric: So at least I don't think there's anybody on the planet that looks at it closer than us as we've been watching it.

Elyse Beth Greenspan: We hear people talk of green shoots, but the reality is, and I think we've said it in the past, that, you know, our opportunity happens when the deals close. And so at this point, you hear things in the market about dry powder and people wanting to do transactions, but at this point, it's still fairly depressed.

Eric: We hear people talk of Green shoots.

Eric: But the reality is and I think we've said it on the past that.

Eric: Our opportunity happens when the deals close.

Eric: And so at this point.

Eric: Hear things in the market about dry powder and people wanted to do transactions, but at this point, it's still fairly depressed.

Eric Andersen: I think we would say, at least as Eric described it, we see the pipeline, we love it, it looks very strong, but we don't count it anymore; we count it when it's done. And that's what we're going to do. We see the opportunity, but we're going to count it when it's done.

Speaker Change: I think we would say at least as Eric described we see the pipeline we love it it looks very strong, but we don't count it anymore you count it when it's done and that's what we're gonna do we see the opportunity, but we're going to count on when it's done.

Elyse Beth Greenspan: And then on the margin side, you gave the baseline, Christa, of 30.6% for this year. I know in the past, you'll typically point to your historical kind of 80 to 90 basis points of margin improvement. Annually, is that the right way to think about the improvement off of the 36, given the puts and takes of producer investment income, savings, and then just leverage against your revenue growth? So, Elyse, the 30.6 is absolutely the right...

Speaker Change: And then one more on the margin side, you gave the baseline Christa, 36% for this year I know in the past, you'll typically point to your historical kind of 80 to 90 basis points of margin improvement annually is that the right way to think about the improvement off of the 36, given the puts and takes of fiduciary.

Speaker Change: Investment income savings and then just on <unk>.

Leverage against your revenue growth.

Christa Davies: So, Elyse, the 30.6 is absolutely the right starting point for 2024 margin expansion. We don't give specific guidance; what we do say is we're committed to margin expansion each and every year, including 2024 on that 30.6% margin base, but all the drivers still hold. We're driving margin expansion due to organic revenue growth, portfolio mix shift, and synergies and efficiencies from Aon Business Services.

Christa Davies: So at least the 36, it's absolutely the right starting point for 2020 for margin expansion, we don't give specific guidance. What we do say is we're committed to margin expansion each and every year, including 2024 of that 36% margin base.

Christa Davies: But all the drivers still hold.

Christa Davies: We're driving margin expansion due to organic revenue growth portfolio mix shift and the synergies and efficiencies from analysts in substance.

Operator: Our next question is from David Motemaden with Evercore ISI. Please proceed with your question.

Thank you.

Speaker Change: Our next question is from David Motor Madden with Evercore ISI. Please proceed with your question.

Speaker Change: Hi, Thanks, good morning.

David Kenneth Motemaden: Hi, thanks. Good morning. I just wanted to hear your guys' opinion on the potential FTC ban on non-competes and what sort of impact that might have on your business and, specifically, on the acquisition economics of NFP.

Speaker Change: Just wanted to to hear your guys' opinion on the potential FTC ban of noncompete.

Speaker Change: What sort of impact that might have on your business and specifically on the acquisition economics showed that at peak.

Gregory Clarence Case: Let's start overall. First, I appreciate the question. This is not something we generally enter into. It's particularly in the U.S., where, obviously, this is going to focus on. But the macro point is really the talent question, I think you're really getting at, which is fundamental. Maybe Eric can offer some thoughts on that. This is a place we live every day. It's our focus.

Speaker Change: Start overall for Steve I appreciate the question.

Speaker Change: We generally enter into it particularly in the U S where obviously this is going to focus on with the macro point is really the talent question I think you're really getting at which is fundamental and maybe Eric you offer some thoughts on that that took place we live. It every day, it's our it's our focus.

Eric Andersen: Yeah, and I think you know, whether it's the attrition numbers, which are historically low, whether it's our ability to attract talent into the firm. We talked a little bit before about all the different tools that we've been investing in, and the culture and the team environment are all very important to keep people. So you know, as Greg said, we don't normally enter into non-compete agreements, so this isn't a big issue for us, but it's all the other factors that drive it.

Eric: Yeah, and I think.

Whether it's the attrition numbers, which are.

Eric: Historically low whether it's our ability to attract talent into the firm, we talked a little bit before about all the different tools that we've been investing in and the culture and the team environment is all very important to keep the people. So as Greg said, we don't normally enter into a noncompete. So this isn't a big issue for us, but it's all the other factors that drive it.

Eric Andersen: And I think you also asked a question about NFT and the colleagues there, and I would just say that both Greg and Christa mentioned it in the written remarks about how excited we are to have them. I think the opportunity for us to work together to add more value to their clients, which ultimately adds more value to their colleagues who have more capabilities and more opportunities to do more with them, you know, with our content, and then obviously, the scale that we get from ABS, whether it's efficiency or the ability to deliver insights and tools and all the different things, I think provide great opportunities for the NFP colleagues as they join the firm. So, you know, really excited about that, as I know everybody's been saying, and we see great opportunity going forward.

Eric: And I think I think you also asked a question about NXP and the colleagues there and I would just say that.

Eric: Both Greg and Christa mentioned it in the written remarks about how excited we are to have them I think the opportunity for us to work together to add more value to their clients, which ultimately adds more value to their colleagues, who have more capabilities and more opportunities to do more with them with our content and then obviously the scale that we get from <unk>.

Eric: Whether it's efficiency or the ability to deliver insights and tools and all the different aspects across health and risk.

Eric: I think provide great opportunity for the NSP colleagues as they as they joined the firm so.

Eric: Really excited about that as I know everybody has been saying.

And we see great opportunity going forward.

David Kenneth Motemaden: Got it. Great. Thanks. That's, that's very helpful.

Speaker Change: Got it great. Thanks, that's helpful.

Speaker Change:

David Kenneth Motemaden: And then just my second question. It looks like U.S. organic growth within CRS was down in the first quarter compared to being flat in the fourth quarter. Yeah, I'm just wondering if there was anything that got incrementally worse in the first quarter versus the fourth quarter? Feels like the pressures were kind of all kind of consistent. So I'm just wondering what that incremental, you know, what's driving that incremental decline if I look at the organic growth in the first quarter versus 4Q?

Speaker Change: And then just my second question.

Speaker Change: It looks like U S organic growth within Crs was down in the first quarter compared to being flat in the fourth quarter.

Speaker Change: Yes, I'm just wondering was there or was there anything that got incrementally worse in the first quarter versus the fourth quarter deals.

Speaker Change: It feels like the pressures were kind of all kind of consistent so I'm just wondering what that incremental.

Speaker Change: What's driving that incremental decline if I look at the organic growth in first quarter versus <unk>.

Gregory Clarence Case: We appreciate it, David. No, from our standpoint, we're not really looking, you know, Q4 to Q1 over time. Again, this is kind of an overall annual approach in terms of how we think about it. And as we said before, nothing's changed. We are committed to mid, single-digit or greater over the course of the year for our firm, and fully, you know, on track to do that across our firm. So I wouldn't look for anything in particular.

Speaker Change: I appreciate it David no from our standpoint, we're not really looking at.

Speaker Change: Q4 to Q1 over time again this is kind of an overall annual approach in terms of how do we think about it.

Speaker Change: And as we said before nothing has changed committed to mid single digit or greater over the course of the year for our firm.

Speaker Change: And and fully on track to do that across our firm. So I wouldn't look for anything in particular, we highlighted a few areas because we wanted to call them out but listen. This is this is this is client leadership at a time, when we're doubling down and investing in more client leadership. This is risk capital and human capital. This is aon business services with the analyzers in it as we've launched I would say is that with you.

Gregory Clarence Case: We highlighted a few areas because we wanted to call them out. But listen, this is client leadership at a time when we're doubling down and investing more in client leadership. This is risk capital and human capital.

Gregory Clarence Case: This is business services with the analyzers. And as we've launched those, they have met with hugely positive client feedback and colleague feedback in terms of what they mean, as well as with ABS, which really enables all that, amplifies it, and creates a, you know, a client experience environment that's better than ever before, on top of the content. So for us, no, we feel very good about the progress in Q1 and what it means for our trajectory going forward.

Speaker Change: Usually positive client feedback and colleague feedback in terms of what they what they need as well as Etfs, which really enables all of that amplifies it and creates a.

Speaker Change: A client experience environment, that's better than you know better than ever before and on top of the content. So for US no. We feel very good about the progress in Q1 and what it means for our trajectory going forward.

David Kenneth Motemaden: I understand. Thanks so much.

Speaker Change: Understood. Thanks, so much.

Operator: Our next question is from Rob Cox with Goldman Sachs. Please proceed with your question.

Speaker Change: Our next question is from Rob <unk> with Goldman Sachs. Please proceed with your question.

Robert Cox: Hey, thanks. I think in the previous presentation on NFP, the target was for sort of similar to historical levels of total revenue growth, I think about 14%. Are you guys still maintaining that projection here? And are you still confident in that projection, considering, you know, there could be some slowing levels of inflation or caution around the economy going forward?

Hey, Thanks, I think in the previous presentation on NSP the target was for sort.

Rob: Similar to historical levels of total revenue growth I think about 14%.

Rob: Are you guys. So.

Rob: Is that projection sort of maintained here I know you're still confident in that projection.

Rob: Considering.

Rob: There could be some slowing levels of inflation or caution around the economy going forward.

Gregory Clarence Case: Ron, maybe I'll just take a quick step back. I think it's worthwhile just reflecting on sort of the whole NFP process and getting Eric to comment on this specifically in terms of sort of how we see the opportunity because look what we have. We just feel great about this combination. You know, this is the $31 billion North American market in which we're vastly underweight. We have an opportunity, because of ABS, to really go after that market in a way that's not just making us more sizable, but we think better.

Rob: Yeah.

Speaker Change: Maybe I'll just take a quick step back I think it's worthwhile just reflecting on sort of the whole NSP process and getting Eric to comment on the specifics in terms of sort of what do we see the opportunity.

Speaker Change: We.

Speaker Change: We just feel great about this combination.

Eric: This is this is the $31 billion, north American market, and which room vastly underway.

Eric: I have an opportunity because of ABS to really go no go after that market in a way that's not just making us more sizable, but we think better and better is this idea of really independent and connected in a way Eric described before and I wanted to talk a bit about that all of these things sort of as we've spent time over the last few months.

Gregory Clarence Case: And better still is this idea of being really, you know, independent and connected in the way Eric described before. And I wanted to talk a bit about that. All these things sort of, you know, as we've spent time over the last few months with Doug and Mike, and the team has been substantially reinforced. And so this is, you know, at the top line level on revenue opportunities in terms of sort of how we do it and the yield we get out of that, all these things are better.

Eric: With Doug and Mike and the team have been substantially reinforced and so this is at the top line level on revenue opportunities in terms of sort of how we do it in the yield we get out of that all of these things are are better and.

Gregory Clarence Case: And then we reflect kind of some of the deal economics that are also better. So from our standpoint, we just see huge momentum. But Eric, you've been living this with Doug and Mike and the team. Maybe you could comment a little bit here and address some of Rob's questions more.

Eric: And then we reflect kind of some of the deal economics that also are better so from our standpoint, we just see huge momentum, but Eric you've been living us with Doug and Mike and the team.

Eric: Maybe you can comment a little bit here and address some of rob's questions more specifically.

Eric Andersen: Yeah, I think there are two components. First, just to touch on the independent and connected piece, which is such a critical part of how both the NFP team and the AON team have been approaching this. And the independent piece is really to respect and sort of celebrate the way NFP approaches its clients locally and how the teams serve those clients. So, really focusing in to make sure that those teams know exactly what they were doing before is what they're going to continue to do.

Eric: Yes, I think Theres two components first just to touch on the independent and connected piece, which is such a critical part of how both the NFPA team and <unk> team had been approaching this in the independent piece is really to respect and sort of celebrate the way MFP approaches its clients locally and how the team service those clients so really focus.

Eric: And to make sure that those teams know exactly.

But what they were doing before is what theyre going to continue to do the connected part is really about two pieces. There is an efficiency play with our ABS platform are on tech and ops.

Eric Andersen: The connected part is really about two pieces. There's an efficiency play with our ABS platform around tech and ops, and areas where we can get some cost synergy. But also, more importantly, I think it's how we connect around product and how we can bring our thought leadership, how we can bring structured portfolio solutions and product capability and thought leadership and get it to those teams in a way that their clients can digest it.

Areas, where we can get some some cost synergy.

Eric: But also more importantly, I think is how we connect around product and capability.

Eric: We can bring our thought leadership, how we can bring structured portfolio of solutions and product capability and thought leadership and get it to those to those teams in a way that their clients can digest. It. So I think how we connect is really about content and it's a little bit about the cost synergies, but it's really a revenue play for us is.

Eric Andersen: So I think how we connect is really about content and it's a little bit about the cost synergies, but it's really a revenue play for us as we look at the middle market. And I think on the growth number, there's an organic play here that we're talking a lot about. There's also an inorganic play that, as Greg mentioned in his opening remarks, their M&A pipeline and the way they approach adding organizations to NFP is really one of the strengths of the firm and something we're going to continue to work with.

Eric: We look at the middle market and I think on the growth number there is an organic play here that we're talking a lot about theres also an inorganic play that as Greg mentioned in his opening remarks, their M&A pipeline and the way they approach adding organizations to NFC is really one of the strengths of the firm and something we're going to continue to work with.

Gregory Clarence Case: Just to amplify one more piece, this is a tour-de-force revenue opportunity, right? That's been the focus since the jump, and that's what we've seen for the last few months. And it's both ways.

Eric: And just to amplify one more piece. This is a tour de force revenue opportunity right that will spend the focus since the jump and that's what we've seen for the last few months and it's both wage incredible capability, we hope to be able to bring.

Gregory Clarence Case: Incredible capability. We hope to be able to bring in, you know, a producer who can sit across the table and do more on behalf of a client, which they, you know, they're phenomenal. They love it. But also, on our side, we're going to benefit tremendously too as they in the ways they've approached the market and how they can help Aon. It's just, you know, we had high expectations going into the conversations.

Eric: A producer can sit across the table and do more on behalf of a client which they.

Eric: They just they're phenomenal that they love, but also on our side, we're going to benefit tremendously to us.

Eric: They've approached the market and how they can help out just to state.

Eric: We had high expectations going into the conversations they've been exceeded over the last few months as we come together, so while we're not giving specific specific guidance on the growth number.

Gregory Clarence Case: They've been exceeded over the last few months as we've come together. So while we're not giving specific, you know, specific guidance on the growth numbers, this is tour-de-force growth. And, Amanda, we see a great opportunity here to access this very, very substantial market where we are underway, but do so in a way that's not just bigger but candidly better.

This is tour de force growth and when do we see a great opportunity here to access is very very substantial market were underway, but do so in a way again, that's not just bigger but candidly better.

Robert Cox: Great, appreciate the color. And then maybe as a follow-up, on transaction solutions. I think you guys have talked about doubling down on transaction solutions in the past. Could you talk about exactly what that means? And have you added talent there recently and expanded your practice, basically in anticipation of a rebound in M&A? So I would answer it in two ways.

Speaker Change: Great I appreciate the color and then maybe as a follow up.

Speaker Change: On transaction solutions I think you guys have talked about.

Speaker Change: <unk> down on transaction solutions in the past could you talk about exactly what that means.

Speaker Change: Have you added talent, there recently and expanded your practice basically anticipation of a rebound in M&A.

Speaker Change: So I would answer it in two ways I think when we've talked about doubling down on it the history of that product has historically been a p/e backed business. They were the original users of.

Eric Andersen: So I would answer it in two ways. I think when we've talked about doubling down on it, the history of that product has historically been a PE-backed business. They were the original users of reps and warranties and tax insurance and things like that. Moving that over into the corporate space, where it's corporate to corporate, has been an area that we've been investing in understanding among our client leaders, as well as the subject matter experts that know that space.

Speaker Change: Our reps and warranties and tax insurance and things like that.

Speaker Change: Moving that over into the corporate space, where it's corporate to corporate has been an area that we've been investing.

Speaker Change: Understanding among our client leaders as well as the subject matter experts that know that space. So we've held the team that was the goal and I think that's what we've been saying for the last two years and the slowdown.

Eric Andersen: So we've held on to the team. That was the goal, and I think that's what we've been saying for the last two years in this slowdown, knowing that at some stage, the market will come back, and we wanted to make sure the industry-leading expertise stayed with Aon. And so we continue to use them to reinforce the existing relationships that they have, while also building out a broader potential client set as M&A comes back.

Speaker Change: Knowing that at some stage the market will come back and we wanted to make sure the industry, leading expertise stayed with Aon and so we continue to use them to reinforce the existing relationships that they have while also building out a broader potential client set as M&A comes back.

Eric Andersen: Thank you. Our final question comes from Meyer Shields with KBW. Please proceed with your question.

Speaker Change: Thank you.

Speaker Change: Thank you. Our final question comes from Meyer Shields with <unk>. Please.

Meyer Shields: With your question.

Meyer Shields: One question on the first quarter margin. I guess if we take out fiduciary investment income into savings, it doesn't seem like there's been a lot of margin expansion despite the 5% organic growth. And I was hoping you could walk us through why that would be the case.

Meyer Shields: Great. Thanks, good morning, and Chris Congratulations.

Meyer Shields: One question on the first quarter margin I guess, if we take out fiduciary investment income in the savings.

Meyer Shields: Doesn't see and compare that to the same issue last year. It doesn't seem like it's been a lot of margin expansion. Despite.

Despite the.

Meyer Shields: 5% organic growth I was hoping you could walk us through why that would be the case.

Speaker Change: Yeah. So.

Christa Davies: Yeah, so the way we think about margins is total margins. I know you're passing it into different components and I understand the math, but we are, we think about growth margins which are substantial and then we reinvest to deliver net margin expansion each year, which we will deliver again in 2024, and that's driven by organic revenue growth, portfolio, mix shift, restructuring savings, which as you pointed, will drop to the bottom line, and efficiencies for management services, and so we continue to invest in technology and our own business services to drive future innovation and growth with clients.

Speaker Change: Way, we think about margins as total margins I know you're.

Speaker Change: Thing it into different components that I understand the math, but we are we think about gross margins, which are substantial and then we reinvest to deliver net margin expansion each year.

Speaker Change: Which we will deliver again in 2024, and that's driven by organic revenue growth portfolio mix shift restructuring savings, which as you point out will drop to the bottom line and efficiency came from Amazon services I'm, sorry, we continue to invest.

Speaker Change: In technology, and I understand services to drive future innovation and growth with class.

Meyer Shields: Okay, so that's there, that gets modeled in. For reporting purposes, is NFP's organic growth going to be included in the organic growth number that you report on a consolidated basis? Yes, it is. And so that's why we've broken it out.

Speaker Change: Okay, No thats, there that makes it a bit.

Speaker Change: That gets modeled in.

Speaker Change: Reporting purposes is nsp's organic growth going to be included in the organic growth number that you report on a consolidated basis.

Speaker Change: Yes, it is and so that's why we broken out in the numbers.

Christa Davies: Yes, it is. And so that's why we've broken out in the numbers, Maya, the revenue from NFP in that table of 2023 by quarter, by solution line, so you can add it in. And so the way you do that for revenue is you add two months of, you know, 2020 of Q2 of NFP plus the, you know, three months of Aon as your starting point for 2023. And then you grow that, and you will see the NFP numbers come through on that M&A table in our organic table.

Speaker Change: The revenue from NSP.

Speaker Change: Table of 2023 by quarter by solution line. So you can add it in and so the way you do that for revenue. If you add two months of 2020 of Q2, Oh N F. T plus three months of animals Youll starting point for 2023, and then you grow that and Youll see the NSP numbers.

Speaker Change: Come through on that M&A table in organic table.

Operator: Thank you. I would now like to turn the call back over to Greg Case for his closing remarks. I don't know a lot, but I have one message.

Speaker Change: Okay perfect. Thanks, so much.

Speaker Change: Okay.

Speaker Change: Thank you I would now like to turn the call back over to Greg case for closing remarks.

Gregory Clarence Case: I don't have a lot to say, but on behalf of Eric and Christa and me, we just want to say on this very historic day for NFP and for Aon, a huge heartfelt welcome to our 7,700 new colleagues. We're just truly, truly excited to partner with you as we begin this journey together. So we're really looking forward to it, and welcome. Thank you everybody for joining us and I look forward to our next call. Take care.

Gregory Clarence Case: I don't have a lot, but I have one message I want to deliver on behalf of Eric and Christa and I.

Gregory Clarence Case: I just wanted to say.

Gregory Clarence Case: On this very historic day for NFC and for Aon and a huge heartfelt welcome to our 7700, new colleagues, who are just truly truly excited to partner with you.

Gregory Clarence Case: We began this journey together so we're really looking forward to it and welcome thanks, everybody for joining and look forward to our next call take care.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.