Restructuring

In 2017, Aon initiated a global restructuring plan (the “Restructuring Plan”) in connection with the sale of the Divested Business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity. The Company expects these restructuring activities and related expenses to affect continuing operations through 2019, including an estimated 2,400 to 2,850 role eliminations. The Restructuring Plan is expected to result in cumulative costs of approximately $750 million through the end of the plan, consisting of approximately $303 million in employee termination costs, $146 million in technology rationalization costs, $80 million in lease consolidation costs, $40 million in asset impairments, and $181 million in other costs, including certain separation costs associated with the sale of the Divested Business. Included in the estimated $750 million are $50 million of non-cash charges related to asset impairments and lease consolidations.

From the inception of the Restructuring Plan through September 30, 2017, the Company has eliminated 2,125 positions and incurred total expenses of $401 million for restructuring and related separation costs. These charges are included in Compensation and benefits, Information technology, Premises, Depreciation of fixed assets, and Other general expenses in the accompanying Condensed Consolidated Statements of Income.

The following table summarizes restructuring and separation costs by type that have been incurred through September 30, 2017 and are estimated to be incurred through the end of the Restructuring Plan (in millions). Estimated costs may be revised in future periods as these assumptions are updated:



	Three months ended September 30, 2017		Nine months ended September 30, 2017		Estimated Remaining Costs		Estimated Total Cost ⁽¹⁾
Workforce reduction	$	52	$	257	$	46	$	303
Technology rationalization ⁽²⁾	12		22		124		146
Lease consolidation ⁽²⁾	4		8		72		80
Asset impairments	2		26		14		40
Other costs associated with restructuring and separation ^{(2) (3)}	32		88		93		181
Total restructuring and related expenses	$	102	$	401	$	349	$	750

(1)

Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan. Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives.

(2)

Contract termination costs included within Technology rationalization for the three and nine months ended September 30, 2017 were $1 million. Contract termination costs included within Lease consolidations for the three and nine months ended September 30, 2017 were $3 million and $8 million, respectively. Contract termination costs included within Other costs associated with restructuring and separation were $1 million for the three and nine months ended September 30, 2017. Total estimated contract termination costs to be incurred under the Restructuring Plan associated with Technology rationalizations, Lease consolidations, and Other costs associated with restructuring and separation, respectively, are $10 million, $80 million, and $10 million.


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

The changes in the Company’s liabilities for the Restructuring Plan as of September 30, 2017 are as follows (in millions):



	Restructuring Plan
Balance as of December 31, 2016	$	—
Expensed	369
Cash payments	(199		)
Foreign currency translation and other	17
Balance as of September 30, 2017	$	187