Aon details $3B‑revenue USI acquisition impact
Aon plc supplies USI’s audited and interim financials plus pro forma combined results to show the accounting impact of its USI Advantage merger.
Rhea-AI Filing Summary
Aon plc (AON) furnished detailed historical and pro forma financial information related to its acquisition of USI Advantage Corp., whose operating business is conducted through USI, Inc. and subsidiaries. The materials include audited USI consolidated financial statements for the year ended December 31, 2025 and unaudited financials for the six months ended June 30, 2026, together with an Ernst & Young LLP audit opinion.
Aon also provided unaudited pro forma combined financial statements giving effect to the merger and related transactions, including a pro forma statement of financial position as of June 30, 2026 and pro forma statements of income for the six months ended June 30, 2026 and the year ended December 31, 2025. USI generated $3.0 billion of revenue and $60.8 million of net income in 2025, supported by significant goodwill and identifiable intangible assets.
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unaudited pro forma combined financial statements financial
earnout obligations financial
Term SOFR financial
Employee Retention Credit financial
Level 3 financial
non-qualified deferred compensation plan financial
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Charter)
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| (Address of principal executive offices) (Zip Code) |
Registrant’s telephone number, including area code: +
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 8.01 | Other Events. |
As previously disclosed in Aon plc’s (the “Company”) Current Report on Form 8-K filed on August 31, 2026, the Company, Aon North America, Inc. (“ANA”), a Delaware corporation and an indirect, wholly-owned subsidiary of the Company, USI Advantage Corp. (“USI Advantage”), a Delaware corporation, Cortlandt Acquisition Corp., a Delaware corporation and a direct, wholly-owned subsidiary of ANA (“Merger Sub”), and Uno Aggregator II L.P., a Delaware limited partnership, solely in its capacity as the securityholder representative, entered into an Agreement and Plan of Merger, dated as of August 30, 2026 (the “Merger Agreement”), which provided for, among other things, the merger of Merger Sub with and into USI Advantage, with USI Advantage surviving as a direct, wholly-owned subsidiary of ANA (the “Merger”).
This Current Report on Form 8-K is being filed in connection with the Merger to provide (i) the audited consolidated financial statements and related notes of USI, Inc. and subsidiaries (“USI”) as of and for the year ended December 31, 2025, and the related report of Ernst & Young LLP, USI’s independent auditor, which are filed herewith as Exhibit 99.1 and incorporated herein by reference, (ii) the unaudited consolidated financial statements and related notes of USI as of and for the six months ended June 30, 2026, which are filed herewith as Exhibit 99.2 and incorporated herein by reference, and (iii) the unaudited pro forma combined financial statements of the Company giving effect to the Merger along with effects of other related transactions (the “pro forma combined financial information”), which includes the unaudited pro forma combined statement of financial position as of June 30, 2026 (which gives effect to the Merger and other related transactions as if they occurred or had become effective on June 30, 2026) and the unaudited pro forma combined statements of income for the six months ended June 30, 2026 and the year ended December 31, 2025 (which give effect to the Merger and other related transactions as if they occurred or had become effective on January 1, 2025), and the related notes thereto, which are filed herewith as Exhibit 99.3 and incorporated herein by reference.
The pro forma combined financial information included as Exhibit 99.3 has been prepared for information purposes only and on the basis of certain assumptions and estimates. It is not intended to, and does not purport to, represent what the combined company’s actual results or financial condition would have been if the transactions had occurred on the relevant date, and is not intended to project the future results or financial condition that the combined company may achieve following completion of the Merger.
The consent of Ernst & Young LLP, independent auditor of USI, is filed as Exhibit 23.1 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| 23.1 | Consent of Ernst & Young LLP, independent auditor of USI. | |
| 99.1 | Audited consolidated financial statements and accompanying notes of USI, Inc. and Subsidiaries as of and for the year ended December 31, 2025. | |
| 99.2 | Unaudited consolidated financial statements and accompanying notes of USI, Inc. and Subsidiaries as of and for the six months ended June 30, 2026. | |
| 99.3 | Unaudited pro forma combined financial information for the periods presented. | |
| 104 | Cover Page Interactive Data File (embedded within XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AON PLC | ||
| By: | /s/ Darren Zeidel | |
| Name: | Darren Zeidel | |
| Title: | Executive Vice President, General Counsel and Company Secretary | |
Date: September 11, 2026
Exhibit 99.1
USI, Inc., and Subsidiaries
2025 Consolidated Financial Statements
With Report of Independent Auditors
1
Contents
| Page No. | ||||
| Report of Independent Auditors |
3 | |||
| Audited Consolidated Financial Statements: |
||||
| Consolidated Balance Sheet |
5 | |||
| Consolidated Statement of Operations |
6 | |||
| Consolidated Statement of Stockholder’s Equity |
7 | |||
| Consolidated Statement of Cash Flows |
8 | |||
| Notes to Audited Consolidated Financial Statements |
9 | |||
2
|
Ernst & Young LLP 1 Manhattan West New York, NY, 10001 |
Tel: +1 212 773 3000 ey.com |
Report of Independent Auditors
Board of Directors and Stockholders of
USI, Inc., and Subsidiaries
Opinion
We have audited the consolidated financial statements of USI, Inc., and Subsidiaries (the Company), which comprise the consolidated balance sheet as of December 31, 2025, and the related consolidated statements of operations, comprehensive loss, stockholder’s equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
| • | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| • | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. |
| • | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed. |
3
| • | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. |
| • | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate to those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
February 27, 2026
except for Note 2 for which the date is
August 21, 2026
4
A member firm of Ernst & Young Global Limited
USI, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share data)
| December 31, 2025 | ||||
| Current assets: |
||||
| Cash and cash equivalents |
$ | 309,095 | ||
| Fiduciary assets |
324,403 | |||
| Accounts receivable, net of allowance for bad debt of $3,647 |
1,125,929 | |||
| Other current assets |
280,315 | |||
|
|
|
|||
| Total current assets |
2,039,742 | |||
| Goodwill |
3,755,246 | |||
| Identifiable intangible assets: |
||||
| Expiration rights |
3,880,337 | |||
| Other intangible assets |
141,559 | |||
| Accumulated amortization |
(2,875,425 | ) | ||
|
|
|
|||
| Total identifiable intangible assets, net |
1,146,471 | |||
| Property and equipment, net |
64,434 | |||
| Operating lease right-of-use assets |
125,814 | |||
| Other assets |
398,082 | |||
|
|
|
|||
| Total assets |
$ | 7,529,789 | ||
|
|
|
|||
| Liabilities and stockholder’s equity |
||||
| Current liabilities: |
||||
| Premiums payable |
$ | 1,062,495 | ||
| Accrued expenses |
403,432 | |||
| Current portion of long-term debt, net of discounts of $7,577 |
30,984 | |||
| Current acquisition earnout obligations |
9,682 | |||
| Current acquisition-related retention obligations |
10,167 | |||
| Other current liabilities |
128,252 | |||
|
|
|
|||
| Total current liabilities |
1,645,012 | |||
| Long-term debt, net of deferred financing costs and discounts of $67,697 |
4,321,688 | |||
| Long-term acquisition earnout obligations |
5,382 | |||
| Long-term acquisition-related retention obligations |
8,644 | |||
| Deferred tax liabilities, net |
1,164 | |||
| Long-term operating lease liabilities |
107,705 | |||
| Other liabilities |
317,448 | |||
|
|
|
|||
| Total liabilities |
6,407,043 | |||
| Commitments and contingencies (see Note 17) |
||||
| Stockholder’s equity |
||||
| Common stock, par $0.01, 1,000 shares authorized, 100 shares issued and |
— | |||
| Additional paid-in capital |
1,626,049 | |||
| Accumulated deficit |
(503,303 | ) | ||
|
|
|
|||
| Total stockholder’s equity |
1,122,746 | |||
|
|
|
|||
| Total liabilities and stockholder’s equity |
$ | 7,529,789 | ||
|
|
|
|||
See accompanying Notes to Audited Consolidated Financial Statements
5
USI, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands)
| Year Ended December 31, 2025 |
||||
| Revenues: |
||||
| Net commissions and fees |
$ | 2,627,703 | ||
| Contingents and supplementals |
262,238 | |||
| Other income |
82,056 | |||
|
|
|
|||
| Total revenues |
2,971,997 | |||
| Operating expenses: |
||||
| Compensation and employee benefits |
1,896,547 | |||
| Acquisition-related retention and buydown bonuses |
10,147 | |||
| Stock-based compensation |
25,071 | |||
| Other operating expenses |
288,666 | |||
| Amortization of intangible assets |
374,633 | |||
| Depreciation |
33,768 | |||
| Earnout adjustments and accretion of discount |
3,863 | |||
|
|
|
|||
| Total operating expenses |
2,632,695 | |||
|
|
|
|||
| Operating income |
339,302 | |||
| Interest expense |
(319,225 | ) | ||
| Other non-operating income |
47,969 | |||
|
|
|
|||
| Income before income taxes |
68,046 | |||
| Income tax expense |
7,226 | |||
|
|
|
|||
| Net income |
$ | 60,820 | ||
|
|
|
|||
See accompanying Notes to Audited Consolidated Financial Statements
6
USI, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY
(Amounts in thousands)
| Shares | Dollars | Additional Paid-in Capital |
Accumulated (Deficit) Earnings |
Total Stockholder’s Equity |
||||||||||||||||
| Balance, December 31, 2024 |
— | $ | — | $ | 1,647,001 | $ | (564,123 | ) | $ | 1,082,878 | ||||||||||
| Issuance of Parent equity |
— | — | 52,987 | — | 52,987 | |||||||||||||||
| Repurchase/cancellation of Parent equity |
— | — | (99,010 | ) | — | (99,010 | ) | |||||||||||||
| Stock-based compensation |
— | — | 25,071 | — | 25,071 | |||||||||||||||
| Net income |
— | — | — | 60,820 | 60,820 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance, December 31, 2025 |
— | $ | — | $ | 1,626,049 | $ | (503,303 | ) | $ | 1,122,746 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See accompanying Notes to Audited Consolidated Financial Statements
7
USI, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in thousands)
| Year Ended December 31, 2025 |
||||
| Operating Activities |
||||
| Net income |
$ | 60,820 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||
| Amortization of intangible assets |
374,633 | |||
| Depreciation |
33,768 | |||
| Stock-based compensation |
25,071 | |||
| Amortization of debt issuance costs and accretion of discount |
16,284 | |||
| Amortization of cost to obtain |
31,843 | |||
| Earnout adjustments and accretion of discount |
3,863 | |||
| Payments on acquisition earnout obligations in excess of original estimates |
(6,657 | ) | ||
| Unrealized loss on derivatives |
6,121 | |||
| Impairment of operating lease right-of-use assets |
(247 | ) | ||
| Deferred income tax benefit |
(58,100 | ) | ||
| Gain on business divestiture |
(4,748 | ) | ||
| Changes in operating assets and liabilities (net of acquisitions): |
| |||
| Short-term investments in fiduciary assets |
(785 | ) | ||
| Accounts receivable, net |
(25,473 | ) | ||
| Other assets |
(97,442 | ) | ||
| Premiums payable |
(42,732 | ) | ||
| Accrued expenses and other liabilities |
45,314 | |||
| Acquisition-related retention obligations |
(29,462 | ) | ||
| Tax benefit from Parent equity |
(10,939 | ) | ||
|
|
|
|||
| Net cash provided by operating activities |
321,132 | |||
| Investing Activities |
||||
| Cash paid for businesses acquired and related costs |
(4,874 | ) | ||
| Purchase of property and equipment, net |
(26,604 | ) | ||
| Employee loans, net of repayments |
(18,004 | ) | ||
|
|
|
|||
| Net cash used in investing activities |
(49,482 | ) | ||
| Financing Activities |
||||
| Payments on long-term debt |
(38,561 | ) | ||
| Payments on revolver |
(70,000 | ) | ||
| Debt issuance costs |
(321 | ) | ||
| Proceeds from issuance of Parent equity |
52,987 | |||
| Repurchase/cancellation of Parent equity |
(99,010 | ) | ||
| Payments of acquisition earnout obligations |
(14,923 | ) | ||
| Receipt of contingent consideration on business divestiture |
4,748 | |||
|
|
|
|||
| Net cash used in financing activities |
(165,080 | ) | ||
| Decrease in restricted cash |
(39,263 | ) | ||
| Increase in cash and cash equivalents |
145,833 | |||
|
|
|
|||
| Cash, cash equivalents, and restricted cash at beginning of period |
408,501 | |||
|
|
|
|||
| Cash, cash equivalents, and restricted cash at end of period |
$ | 515,071 | ||
|
|
|
|||
See accompanying Notes to Audited Consolidated Financial Statements
8
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
| 1. | The Company and Nature of Operations |
USI, Inc., a Delaware corporation, and its wholly-owned subsidiaries (collectively, “USI” or the “Company”) are owned by USI Advantage Corp. (the “Parent”). The Parent is a Delaware corporation, controlled by entities affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”), Integrum Holdings L.P. and Caisse de dépôt et placement du Québec (“La Caisse”), (collectively the “Sponsors”). The Parent does not have material assets, other than the stock of its subsidiaries, and it conducts all its operations directly or indirectly through the Company and its subsidiaries.
As of December 31, 2025, 80.9% of the issued shares of common stock of the Parent, with a par value of $0.01 per share, were held by the Sponsors and certain co-investors.
| 2. | Basis of Presentation and Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
Reissuance of Financial Statements
The accompanying Consolidated Financial Statements have been reissued for inclusion in a filing with the Securities and Exchange Commission (“SEC”). In connection with this reissuance, the Company updated its financial statement presentation and footnote disclosures to comply with Regulation S-X and certain other disclosure requirements related to public business entities. These changes include identifying the Chief Operating Decision Maker, reclassifying certain Other non-operating income captions on the Statement of Operations, expanding the income tax disclosures and updating the evaluation of subsequent events through the date of reissuance. These reclassifications and revised disclosures had no effect on previously reported total assets, liabilities, stockholder’s equity, net income, or cash flows.
Comprehensive Income
The Company had no components of other comprehensive income during the period presented. Therefore, comprehensive income was equal to net income.
Use of Estimates
The preparation of the Consolidated Financial Statements is in conformity with GAAP which requires management to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period, as well as disclosure of contingent assets and liabilities. Estimates are used in determining such amounts as allowances for bad debts and other reserves, earnouts, direct bill lag accruals, revenue recognition, right-of-use assets, stock compensation, goodwill, intangible assets and impairments, income taxes, legal, other loss contingencies, and accruals of certain liabilities. Actual results could differ materially from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments, such as money market accounts and certificates of deposit, with original maturities of three months or less.
Fiduciary Assets and Investments
In its capacity as an insurance broker, the Company collects premiums from its clients and, after deducting its commission and/or fees, remits these premiums to the respective insurance companies. Unremitted insurance premiums are held in a fiduciary capacity until disbursed by the Company. At December 31, 2025, Fiduciary assets include cash and investments of $324,403, which are included in Fiduciary assets on the Consolidated Balance Sheet. At December 31, 2025, the Company had net agency bill receivables of $841,869 included in Accounts receivable on the Consolidated Balance Sheet. These amounts are offset by Premiums payable of $1,062,495 at December 31, 2025 on the Consolidated Balance Sheet.
9
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
Fiduciary assets and investments, because of their nature, are required to be invested in very liquid securities with highly rated, credit-worthy financial institutions and are mostly used for the payment of premiums due to carriers. The Company earns investment income on the fiduciary assets held in cash and short-term investments, which is reported in the Consolidated Statement of Operations as part of Other income.
Fiduciary assets include $118,427 of short-term investments with maturities greater than three months and less than a year, at December 31, 2025.
Allowance for Bad Debts
The Company maintains an allowance for bad debts based on its premiums, commissions and fees receivable. The allowance is estimated based on an aging analysis, historical trends and specific identification of known questionable accounts. The Company periodically reviews the adequacy of the allowance and makes adjustments as necessary through bad debt expense, which is included in Other operating expenses in the Consolidated Statement of Operations. The allowance for bad debts was $3,647 at December 31, 2025, and is recorded net against Accounts receivable on the Consolidated Balance Sheet.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. Upon sale or retirement, the cost and related accumulated depreciation are removed from the accounts and any gains or losses are reflected in earnings. Expenditures for maintenance and repairs are expensed as incurred. The Company periodically reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be recoverable.
Depreciation of fixed assets is recorded using the straight-line method over the estimated useful lives of the related assets, which generally range from three to seven years. Leasehold improvements are amortized over the lesser of the life of the asset or the remaining lease term.
Goodwill
Goodwill is the excess of the cost of an acquired entity over the fair value of identifiable intangible and tangible assets and liabilities assumed. Goodwill is not subject to amortization under GAAP.
Goodwill is tested during the fourth quarter of each year for impairment or more frequently if there are any events that indicate that goodwill may be impaired. Reviews for goodwill triggering events require the use of management’s judgment. The fair value of goodwill requires estimates based on market valuation data and discounted cash flow techniques. Reviews for impairment are performed at the operating company (reporting unit) level, one level below the Company’s operating segments, which is its determination of the lowest level of meaningful cash flows. If, as a result of an impairment review, the Company concludes that the carrying value of an asset is in excess of the fair value, it would be required to take a charge against current earnings. See Note 6 for discussion of the annual assessment of goodwill and other intangible asset impairments performed during the fourth quarter.
Identifiable Intangible Assets
Intangible assets include expiration rights, covenants not-to-compete, trade names and other intangibles. Expiration rights are records and files obtained from acquired businesses that contain information on insurance policies, clients and other information that is essential to policy renewals. Covenants not-to-compete are contractual commitments by key personnel or companies not to compete with the Company for clients for a specific period. Covenants can extend for a period following termination of employment. Covenants not-to-compete and restrictive covenants are typically valued at an estimate of fair value using assumptions and projections assuming that no non-compete agreement exists and that the covenanters actively pursue the Company’s clients or employees. Other intangible assets include trade names which the Company has determined to have an indefinite useful life and other finite life intangibles.
Expiration rights are amortized on a straight-line basis over their estimated lives based on historical attrition, which averages approximately ten years. Covenants not-to-compete are amortized on a straight-line basis over the terms of the agreements, which averages approximately five years. Other intangible assets with finite life are amortized on a straight-line basis over their estimated lives determined individually.
Intangible assets with finite lives are reviewed for impairment each reporting period or more frequently whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on assumptions using historical and pro-forma data and recognized valuation methods. Measurement of an impairment loss for long-lived assets that management expects to hold, and use is based on the estimated fair value of the asset and requires management’s judgement. Trade names that are determined to have indefinite useful lives are not amortized but are tested for impairment annually or more frequently if events occur or circumstances change that indicate an asset may be impaired.
10
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
Revenue Recognition
Commissions and Fees
The primary source of revenues for brokerage services are commissions from insurance carriers or fees paid by clients. Commissions are fixed at the contract effective date and generally are based on a percentage of premiums for insurance coverage or headcount for employer sponsored benefit plans. Commissions can be earned at a point in time upon the effective date of bound insurance coverage, as long as no substantial performance obligation exists after coverage is bound or point in time commensurate with services delivered.
The Company earns fee revenue by receiving negotiated fees in lieu of a commission or from other services. Fee revenues from certain agreements are recognized as the service is performed. For employee benefits, consulting and advisory services, the Company recognizes its revenue in the period in which service is provided. For management and administrative services, revenue is recognized ratably over the contract period consistent with the performance of obligations.
Supplemental Revenues
The Company also earns additional revenues based on the volume of premium placed. These amounts are in excess of the commission and fee revenues discussed above, and not all business the Company places with insurance carriers is eligible for supplemental revenues. Unlike contingent revenues discussed below, supplemental revenues are generally computed based on a fixed amount or percentage of premium and are recognized consistent with the underlying policies. For supplemental contracts based on a fixed amount, revenue is recognized ratably over the contract period consistent with the performance of obligations.
Contingent Revenues
The Company also receives additional revenues for its sales capabilities and risk selection knowledge in the form of contingent revenue. These amounts are in excess of the commission or fee revenues discussed above, and not all business placed with participating insurance carriers is eligible for contingent revenues. These revenues are variable, generally based on growth, the loss experience of the underlying insurance contracts, and/or the Company’s efficiency in processing the business. The Company generally operates under calendar year contracts, but most of these revenues are not received from the insurance carriers until the following calendar year, generally in the first and second quarters, after verification of the performance indicators outlined in the contracts. Accordingly, during each reporting period, the Company makes a best estimate of amounts earned using historical averages and other factors to project such revenues. Estimates are based on a historical view of the portfolio in aggregate. Because expectations of the ultimate contingent revenue amounts to be earned can vary from period to period, especially in contracts sensitive to loss ratios, estimates might change significantly from quarter to quarter. Variable consideration is recognized when the Company concludes, based on all the facts and information available at the reporting date, that it is probable that a significant revenue reversal will not occur in future periods.
Sub-broker Costs
Sub-broker costs represent commissions paid to external brokers related to the placement of certain business. The Company recognizes these costs as contra revenues in the same manner as the commission revenue to which it relates.
Business Combinations
The identifiable assets acquired, and liabilities assumed in a business combination are recorded at fair value at the date of acquisition. Results of operations of the acquired companies are included in the financial statements from their respective acquisition dates. Acquisitions may have provisions for contingent consideration (“earnouts”) based on financial targets developed by management for the acquired entity.
The amounts recorded as earnout obligations (which are primarily based upon the estimated future operating results of the acquired entities) are measured at fair value at the acquisition date based on discounted future payments using a risk-adjusted rate based on market rates of return. Subsequent changes in the estimated earnout obligations, including the accretion of discount, will be recorded in the Consolidated Statement of Operations when incurred.
11
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
Acquisition-Related Retention Obligations
As part of acquisitions, the Company may issue employment agreements that include retention bonuses and restructuring of compensation plans (“buydowns”) which are earned and expensed over an agreed upon service period. These bonuses are an incentive for these employees to remain with the Company for a fixed period, to allow the Company to capitalize on their knowledge and experience, and to retain the revenues acquired. If an employee leaves prior to the required time frame to earn the retention bonus outright, then all or any portion that is unearned, is forfeited and reversed through compensation expense.
Stock-Based Compensation
The Company recognizes stock-based compensation costs based on the fair value of the equity awards on the date of grant and records the expense over the period the employee is expected to provide service. Forfeitures are recognized in compensation cost when they occur. Shares withheld to cover applicable statutory income taxes relating to the vesting of previously granted equity awards to employees are recorded as repurchase/cancellation of Parent equity.
For restricted stocks, the fair value is based on an analysis prepared by management. The assumptions used in calculating the fair value include (a) the Company’s financial condition, and results of operations; (b) the forecasted operating performance and projected future cash flows; (c) the illiquid nature of the Company’s common stock; and (d) market conditions affecting the insurance brokerage industry.
For stock options, the Company uses the Black-Scholes option pricing model which considers the fair value of the stock, option strike price, expected option life, estimated volatility, and the risk-free interest rate.
Derivative Instruments
The Company uses an interest rate swap for the management of interest risk exposure associated with changes in the variable interest rate payments due on its credit facilities. Derivatives are carried at fair value on a gross basis on the Consolidated Balance Sheet. As the Company did not elect hedge accounting, gains and losses resulting from changes in the fair value of the derivative contract designated as a cash flow hedge are included within Interest expense in the Consolidated Statement of Operations. The cash flows associated with interest rate swaps are classified as Operating activities in the Consolidated Statement of Cash Flows.
Income Taxes
The Company’s income tax provision takes into consideration pre-tax income, statutory tax rates, and the Company’s profile in the various jurisdictions in which it operates. The tax basis of the Company’s assets and liabilities reflects its best estimate of future tax benefits and costs it expects to realize when such amounts are included in its tax returns. The Company recognizes tax benefits in accordance with the provisions of the standard for accounting for uncertainty in income taxes. Deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are recognized for the estimated future tax effects attributed to temporary differences and carry-forwards based on provisions of the enacted tax laws. The effects of future changes in tax laws or rates are not anticipated. Temporary differences are differences between the tax basis of an asset or liability and its reported amount in the Consolidated Financial Statements. Carry-forwards primarily include items such as net operating losses (“NOL”), which can be carried forward subject to certain limitations.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes several provisions that impact the timing and magnitude of certain tax deductions, including restoring 100% bonus depreciation for qualifying property, increasing the business interest limitation and the immediate expensing of domestic research and development costs. The Company has applied the provisions of OBBBA to its financial results and position for the year ended December 31, 2025, and will continue to assess the potential impacts on the Company’s Consolidated Financial Statements as additional guidance from the OBBBA is issued.
Fair Value Measurement
Fair value accounting establishes a framework for measuring fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The carrying amounts of some of the Company’s financial assets and liabilities, including cash and cash equivalents, fiduciary assets, accounts receivables, premiums payable, accrued expenses, and other liabilities approximate fair value because of the short-term nature of these instruments.
12
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
GAAP requires the categorization of financial assets and liabilities based upon the level of judgments associated with the inputs used to measure their fair value. Hierarchical levels defined by the accounting guidance and directly related to the amounts of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities are as follows:
Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2 - Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model due to unobservable market data.
Observable and market-based inputs include interest rate yields, credit spreads and volatilities. The earnout obligations are categorized as Level 3 within the fair value hierarchy, see Note 4 and Note 7. The fair value of the Company’s debt instruments approximate its carrying value, see Note 9.
The Company’s assets and liabilities that are measured at fair value on a nonrecurring basis include goodwill and intangibles, which are recognized at fair value when a business combination transaction occurs. The fair value of goodwill and intangible assets are evaluated at the reporting unit level using both market valuation data, such as recent transaction multiples of revenue or profit, and the income approach using discounted cash flow techniques. The income approach focuses on the income producing capability of the subject assets. Reviews for triggering events require the use of management’s judgment. If, as a result of an impairment review, the Company determines that the carrying value of an asset is in excess of the fair value, it would take an impairment charge against earnings.
Employee Retention Credit
The Company applied for and received benefits under the Employee Retention Credit, a refundable payroll tax credit enacted under the Coronavirus Aid, Relief, and Economic Security (“CARES Act”) and subsequent legislation. The Employee Retention Credit provides financial relief to eligible employers that retained employees during periods of economic hardship related to the COVID-19 pandemic. The Company accounted for the Employee Retention Credit in accordance with ASC 450 Gain Contingencies, recognizing income only when the realization of the credit was deemed probable and reasonably estimable.
The Company received $42,857 in 2025 related to the Employee Retention Credit. $37,419 was recorded in Other non-operating income and $5,438 was recorded as interest income and is included in Other income on the Consolidated Statement of Operations.
Recently Adopted Accounting Standards
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduces a practical expedient and an optional accounting policy election intended to simplify the estimation of expected credit losses for accounts receivable and contract assets arising from transactions accounted for under ASC 606. Under the new guidance, all entities may elect a practical expedient that assumes the economic conditions existing as of the balance sheet date remain unchanged over the remaining life of the asset. The standard is effective for reporting periods beginning after December 15, 2025, with early adoption permitted. The Company early adopted this ASU on January 1, 2025. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements, as expected credit losses are minimal.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes. The new guidance requires business entities, on an annual basis, to disclose specific categories in the rate reconciliation and the amount of income taxes paid disaggregated by jurisdiction, among other disclosure requirements. The standard is effective for reporting periods beginning after December 15, 2025. The Company early adopted this ASU for our 2025 annual period with the comparative periods updated to reflect additional disclosures. See Note 5 and Note 13 for the updated disclosures consistent with the new standard.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued certain accounting updates, which we have either determined to be not applicable or not expected to have a material impact on the Company’s Consolidated Financial Statements.
13
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
| 3. | Revenues |
The following table presents the revenues disaggregated by revenue source:
| Year Ended December 31, 2025 | ||||||||||||||||
| Revenues: | Retail | Specialty | Other | Total | ||||||||||||
| Net commissions and fees — Property & Casualty (1) |
$ | 1,313,625 | $ | 138,149 | $ | — | $ | 1,451,774 | ||||||||
| Net commissions and fees — Employee Benefits (1) |
795,829 | 380,100 | — | 1,175,929 | ||||||||||||
| Contingents and supplementals (2) |
242,860 | 19,378 | — | 262,238 | ||||||||||||
| Other income (3) |
53,017 | 5,718 | 23,321 | 82,056 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
$ | 2,405,331 | $ | 543,345 | $ | 23,321 | $ | 2,971,997 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Net commissions and fees are revenues received by the Company that represent a percentage of the premium paid by the insured, fees for services and fees negotiated in lieu of commissions. |
| (2) | Contingents are based primarily on underwriting results, but may also reflect consideration for volume, growth and/or retention. Supplementals include additional commissions over base commissions received from insurance carriers when certain predetermined production levels are exceeded. |
| (3) | Other income consists primarily of interest on cash and investments, gains from the Company’s deferred compensation plan and premium financing income, among other items. |
Contract Assets and Deferred Costs
The estimated receivables for contingents are recorded as contract assets which are included in Other current assets on the Company’s Consolidated Balance Sheet. During each reporting period, the Company estimates the amounts earned using historical averages and other factors to project such revenues. Due to the variability of the revenues earned period to period, especially in contracts sensitive to loss ratios, the estimates might change significantly from quarter to quarter. The change in contract assets is due primarily to cash receipts for settlement of prior period profit-sharing agreements and accruals for estimated contingent revenue related to current year policy placements.
Costs to obtain – The Company defers certain costs to obtain customer contracts, which represent incremental compensation that is discreetly identified as related to the acquisition of new business. These deferred costs are included in Other assets on the Company’s Consolidated Balance Sheet. Costs to obtain are largely compensation-related and are deferred and amortized over the estimated life of the customer contracts to which the costs relate and are included in Compensation and employee benefits in the Consolidated Statement of Operations.
Costs to fulfill - The Company defers certain costs to fulfill contracts as an asset and expenses these costs as the associated revenue is recorded. These deferred costs are included in Other current assets on the Company’s Consolidated Balance Sheet. The Company recognizes an asset for costs incurred to fulfill a contract if the following criteria are met: (1) costs are specifically identified and relate to a contract or anticipated contract, (2) costs generate or enhance resources used in satisfying the Company’s performance obligations, and (3) costs are expected to be recovered.
Assets recognized as costs to fulfill include internal costs related to pre-placement brokerage activities and are comprised of compensation expense. These costs are amortized as the related revenue is recognized. The amortization is included in Compensation and employee benefits on the Consolidated Statement of Operations.
The balances of the Company’s contract assets, costs to obtain and costs to fulfill on the Consolidated Balance Sheet are as follows:
| December 31, 2025 | ||||
| Contract assets |
$ | 107,861 | ||
| Costs to obtain |
153,688 | |||
| Costs to fulfill |
21,502 | |||
14
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The amounts of the Company’s costs to obtain and costs to fulfill activity on the Consolidated Statement of Operations are as follows:
| Year Ended December 31, 2025 |
||||
| Costs to obtain deferral |
$ | 50,504 | ||
| Costs to obtain amortization |
(31,843 | ) | ||
| Costs to fulfill deferral |
$ | 129,334 | ||
| Costs to fulfill amortization |
(130,170 | ) | ||
| 4. | Business Combinations |
For the year ended December 31, 2025, the Company made seven acquisitions and book purchases for an aggregate purchase price of $9,136, comprised of $4,874 of cash consideration and $4,262 of contingent earnouts. These acquisitions are included in the Retail and Specialty segments. The acquisitions were made primarily to expand the Company’s wholesale benefits, employee benefits and property and casualty insurance brokerage services and increase the number of sales professionals.
All acquisitions are accounted for in accordance with ASC 805 Business Combinations. The identifiable assets acquired, and liabilities assumed were recorded at fair value at the date of the acquisitions. Preliminary purchase price allocations are established at the time of the acquisitions and are reviewed within the first year of ownership, upon completion of an external valuation or for other required adjustments. Accordingly, amounts preliminarily allocated to goodwill and other intangible assets may be adjusted. Such amounts may be material and would primarily represent reclassifications between goodwill and other intangible assets.
Amounts allocated to tangible and intangible assets and goodwill from the acquisitions are as follows:
| Year Ended December 31, 2025 |
||||||||||||||||||||||||
| Name |
Date of Acquisition |
Business Segment |
Tangible Assets |
Expiration Rights |
Liabilities Assumed |
Total Net Assets Acquired |
||||||||||||||||||
| Other |
Various | Both | $ | 905 | $ | 9,134 | $ | (903 | ) | $ | 9,136 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total |
$ | 905 | $ | 9,134 | $ | (903 | ) | $ | 9,136 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnout Obligations
Certain acquisitions are structured with contingent purchase price obligations commonly referred to as earnouts. At December 31, 2025, the total undiscounted earnout obligations ranged from $14,088 to $16,915 with a best estimate of $15,463. The discounted liability for earnout obligations on the Consolidated Balance Sheet totaled $15,064 at December 31, 2025.
Acquisition-Related Costs
Acquisition related costs are primarily legal and other professional services included in Other operating expenses in the Consolidated Statement of Operations. For the year ended December 31, 2025, the Company incurred $620 of acquisition-related costs.
Divestiture
During the first quarter of 2025, the Company recognized a gain of $4,748 related to earnouts from the sale of the international business which took place in the first quarter of 2023. Such gain was recorded in Other non-operating income on the Consolidated Statement of Operations.
15
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
| 5. | Supplemental Disclosures of Cash Flow Information |
The following table represents supplemental cash flow information as well as non-cash investing and financing activities:
| Year Ended December 31, 2025 |
||||
| Cash paid for interest and related fees |
$ | 301,172 | ||
| Cash paid for income taxes: |
||||
| Federal income tax |
44,100 | |||
| State income tax, net |
14,067 | |||
|
|
|
|||
| Total cash paid for income taxes, net |
$ | 58,167 | ||
|
|
|
|||
| Non-cash investing and financing activities: |
||||
| Estimated acquisition earnout obligations |
$ | 4,262 | ||
| Accrued fixed asset purchases |
1,232 | |||
The following table represents the balance in cash, cash equivalents and restricted cash:
| December 31, 2025 | ||||
| Cash and cash equivalents |
$ | 309,095 | ||
| Restricted cash included in Fiduciary assets |
205,976 | |||
|
|
|
|||
| Total cash, cash equivalents, and restricted cash |
$ | 515,071 | ||
|
|
|
|||
| 6. | Goodwill and Other Intangible Assets |
The following table presents the Company’s changes in goodwill by reportable segment:
| Retail | Specialty | Total | ||||||||||
| Balance, January 1, 2025 |
$ | 2,973,814 | $ | 781,432 | $ | 3,755,246 | ||||||
|
|
|
|
|
|
|
|||||||
| Balance, December 31, 2025 |
$ | 2,973,814 | $ | 781,432 | $ | 3,755,246 | ||||||
|
|
|
|
|
|
|
|||||||
Goodwill changes arise from acquisitions and purchase accounting adjustments during the first twelve months following the acquisition date. Goodwill adjustments may also arise from reclassifications with other intangible assets upon completion of acquired asset valuations, divestitures and impairments.
In the fourth quarter of 2025, the Company performed its annual review of goodwill and other intangible assets, as a result, there were no impairments noted for any of the Company’s reporting units.
The Company’s intangible assets by asset class were as follows:
| December 31, 2025 | Gross Carrying Value |
Accumulated Amortization |
Net Carrying Value |
Weighted-Average Amortization Period |
||||||||||||
| Expiration rights |
$ | 3,880,337 | $ | (2,858,422 | ) | $ | 1,021,915 | 10.4 Years | ||||||||
| Covenants not-to-compete |
10,329 | (9,729 | ) | 600 | 5.0 Years | |||||||||||
| Other intangibles |
21,030 | (7,274 | ) | 13,756 | 15.1 Years | |||||||||||
| Trade names |
110,200 | — | 110,200 | Indefinite | ||||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 4,021,896 | $ | (2,875,425 | ) | $ | 1,146,471 | |||||||||
|
|
|
|
|
|
|
|||||||||||
16
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The estimated amortization expense for the Company’s amortizable intangible assets for the next five years and thereafter is as follows:
| Year |
Amounts | |||
| 2026 |
$ | 370,225 | ||
| 2027 |
238,240 | |||
| 2028 |
135,456 | |||
| 2029 |
117,882 | |||
| 2030 |
48,119 | |||
| Thereafter |
126,349 | |||
|
|
|
|||
| Total amortization expense |
$ | 1,036,271 | ||
|
|
|
|||
| 7. | Fair Value Measurements |
The table below presents the fair value hierarchy for the financial assets and (liabilities) held by the Company:
| December 31, 2025 | ||||||||||||||||
| Assets at fair value: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash and cash equivalents |
$ | 309,095 | $ | — | $ | — | $ | 309,095 | ||||||||
| Fiduciary assets |
325,187 | — | — | 325,187 | ||||||||||||
| Deferred compensation assets |
— | 204,451 | — | 204,451 | ||||||||||||
| Employee loan receivables |
— | 44,079 | — | 44,079 | ||||||||||||
| Derivative asset |
— | 73 | — | 73 | ||||||||||||
| Liabilities at fair value: |
||||||||||||||||
| Acquisition earnout obligations |
— | — | (15,064 | ) | (15,064 | ) | ||||||||||
| Deferred compensation liabilities |
— | (204,003 | ) | — | (204,003 | ) | ||||||||||
| Post-employment compensation liability |
— | — | (93,722 | ) | (93,722 | ) | ||||||||||
| Derivative liability |
— | (2,235 | ) | — | (2,235 | ) | ||||||||||
Deferred compensation asset values are comprised of the cash surrender values related to the underlying company-owned life insurance policies and mutual funds adjusted for market performance. Deferred compensation liabilities include obligations related to deferred compensation plans adjusted for market performance. The fair value is obtained based on observable market prices quoted in active markets for similar instruments.
The employee loan receivables have a 5-year principal balloon payment and a floating market interest rate updated annually and their outstanding value approximates market value.
The fair value of acquisition earnout obligations is based on the present value of the expected future payments to be made to the sellers of businesses acquired in accordance with the respective agreements, which is a Level 3 fair value measurement. In determining fair value, the Company uses computations based on financial projections developed by management. The estimated future earnout payments are based on the criteria and performance targets included in each purchase agreement. The earnout liabilities are discounted to present value using a risk-adjusted market rate of 10% for the year ended December 31, 2025. Changes in the acquired financial projections, assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnouts.
17
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The table below presents the changes in fair value for earnout liabilities categorized as Level 3:
| Year Ended December 31, 2025 |
||||
| Balance, beginning of period |
$ | 28,519 | ||
| Net change recognized in earnings |
2,829 | |||
| Net additions |
4,262 | |||
| Payments |
(21,580 | ) | ||
| Discount accretion |
1,034 | |||
|
|
|
|||
| Balance, end of period |
$ | 15,064 | ||
|
|
|
|||
| Movement in total gain relating to instruments held at the reporting date |
$ | 1,580 | ||
The table below presents the changes in fair value for the post-employment compensation liability categorized as Level 3:
| Year Ended December 31, 2025 |
||||
| Balance, beginning of period |
$ | 89,644 | ||
| Net change recognized in earnings |
4,461 | |||
| Payments |
(5,569 | ) | ||
| Discount accretion |
5,186 | |||
|
|
|
|||
| Balance, end of period |
$ | 93,722 | ||
|
|
|
|||
| 8. | Property and Equipment, Net |
Property and equipment consisted of the following as of December 31:
| 2025 | ||||
| Software |
$ | 100,707 | ||
| Computer hardware |
47,537 | |||
| Furniture and equipment |
50,380 | |||
| Leasehold improvements |
34,372 | |||
|
|
|
|||
| 232,996 | ||||
| Less: accumulated depreciation |
(168,562 | ) | ||
|
|
|
|||
| Property and equipment, net |
$ | 64,434 | ||
|
|
|
|||
| 9. | Long-Term Debt |
The table below presents the Company’s debt obligations:
| Date Issued | Maturity Date | Issuance Amount | December 31, 2025 | |||||||||||||
| 2024-C Term Loan Facility |
September 29, 2023 | September 29, 2030 | $ | 1,420,000 | $ | 1,388,263 | ||||||||||
| 2024-D Term Loan Facility |
November 22, 2022 | November 21, 2029 | 2,500,000 | 2,419,683 | ||||||||||||
| 2023 Senior Notes |
December 29, 2023 | January 15, 2032 | 620,000 | 620,000 | ||||||||||||
| Revolving Credit Facility |
May 16, 2017 | December 21, 2029 | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total debt |
4,427,946 | |||||||||||||||
| Current portion of long-term debt |
(38,561 | ) | ||||||||||||||
| Term loan and senior notes deferred financing costs |
|
(42,045 | ) | |||||||||||||
| Term loan discount, long-term portion |
(25,652 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| Long-term debt |
$ | 4,321,688 | ||||||||||||||
|
|
|
|||||||||||||||
18
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The aggregate maturities of debt obligations as of December 31, 2025 and for each of the next five years and thereafter are:
| Total | Year One | Year Two | Year Three | Year Four | Year Five | Thereafter | ||||||||||||||||||||||
| Term Loan Facilities |
$ | 3,807,946 | $ | 38,561 | $ | 38,561 | $ | 38,561 | $ | 2,360,232 | $ | 1,332,031 | $ | — | ||||||||||||||
| 2023 Senior Notes |
620,000 | — | — | — | — | — | 620,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total debt, gross of discount |
$ | 4,427,946 | $ | 38,561 | $ | 38,561 | $ | 38,561 | $ | 2,360,232 | $ | 1,332,031 | $ | 620,000 | ||||||||||||||
|
|
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|
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|
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|
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|
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|
|||||||||||||||
Credit Facilities
The Company entered into a credit agreement dated May 16, 2017 (the “Credit Agreement”) to provide senior secured credit facilities (the “Credit Facilities”) that include an uncommitted incremental facility which, subject to certain conditions, will provide for additional term loans and/or revolving loans in an aggregate amount not to exceed the Maximum Incremental Facilities Amount as defined in the Credit Agreement. The obligations under the Credit Facilities are guaranteed by each of its wholly owned domestic restricted subsidiaries. Substantially all of the Company’s assets are pledged as collateral under the Credit Agreement. The Credit Agreement contains certain affirmative and negative covenants. The amounts outstanding under the Credit Agreement are subject to mandatory prepayment under specified circumstances, with a percentage of excess cash flows and certain cash proceeds from asset sales and debt issuances. The Credit Agreement was modified through an amendment dated June 15, 2023, which changed the reference rate from the Adjusted London Interbank Offered Rate (“LIBOR”) to Term Secured Overnight Financing Rate (“Term SOFR”) (as defined in the Credit Agreement).
2024-C Term Loan Facility
On September 29, 2023, the Company amended its Credit Agreement pursuant to a joinder agreement to provide for an incremental senior secured first lien term loan facility aggregating $1,420,000 maturing on September 29, 2030 (the “2023 Term Loan Facility”), consisting of a first funding of $820,000 on September 29, 2023 and a second funding of $600,000 on November 21, 2023. The 2023 Term Loan Facility was issued at a 0.25% discount.
During 2024, the Company amended the existing Credit Agreement pursuant to joinder agreements dated May 30, 2024, and December 23, 2024. These amendments established a new senior secured first lien term loan facility (the “2024-C Term Loan Facility”) to refinance the outstanding balance of the 2023 Term Loan Facility at lower rates as described below.
The 2024-C Term Loan Facility bears interest at an annual rate equal to, at the Company’s option, either the Term SOFR rate plus a margin of 2.25% or a base rate as defined by the Credit Agreement plus a margin of 1.25%. The 2024-C Term Loan Facility amortizes in quarterly installments in an amount equal to 0.25% of the principal amount with a final balloon payment due at maturity in an amount equal to the remaining principal amount of the loan outstanding on that date. The interest rate on the 2024-C Term Loan Facility was 5.92% at December 31, 2025.
2024-D Term Loan Facility
On November 22, 2022, the Company amended its Credit Agreement pursuant to a joinder agreement to provide for an incremental senior secured first lien term loan facility in an aggregate amount equal to $2,500,000 maturing on November 21, 2029 (the “2022 Term Loan Facility”).
During 2023 and 2024, the Company amended the existing Credit Agreement pursuant to joinder agreements dated December 20, 2023, June 21, 2024, and December 23, 2024. These amendments established a new senior secured first lien term loan facility (the “2024-D Term Loan Facility”) to refinance the outstanding balance of the 2022 Term Loan Facility at lower rates as described below.
The 2024-D Term Loan Facility bears interest at an annual rate equal to, at the Company’s option, either the Term SOFR rate plus a margin of 2.25% or a base rate as defined by the Credit Agreement plus a margin of 1.25%. The 2024-D Term Loan Facility amortizes in quarterly installments in an amount equal to 0.25% of the principal amount with a final balloon payment due at maturity in an amount equal to the remaining principal amount of the loan outstanding on that date. The interest rate on the 2024-D Term Loan Facility was 5.92% at December 31, 2025.
Revolving Credit Facility
The Credit Agreement, as amended in July 2021, provides a revolving credit line of $400,000 maturing on May 15, 2026 (the “Revolving Credit Facility”). The Revolving Credit Facility includes sub-limits for letters of credit and swing-line sub-facilities.
19
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The joinder agreements entered in connection with the refinancing of the Company’s term loans dated May 30, 2024, and December 23, 2024 provided for (i) the extension of the maturity date of the Revolving Credit Facility to December 21, 2029 (subject to a springing maturity date of August 22, 2029 if an aggregate principal amount of more than $500,000 of the 2024-D Term Loan Facility is outstanding as of such date), and (ii) the reduction in the interest rate applicable to the Revolving Credit Facility as described below.
The Revolving Credit Facility bears interest at a current annual rate equal to, at the Company’s option, of either Term SOFR, subject to a floor of 0.00%, plus an applicable margin ranging between 1.75% and 2.25%, or the base rate, subject to a floor of 1.00%, as defined by the Credit Agreement plus an applicable margin ranging between 0.75% and 1.25%. The applicable margin is determined depending on certain first lien secured debt ratios as defined in the Credit Agreement. The Company also pays a commitment fee on the unused portion of the Revolving Credit Facility and certain fees for letters of credit issued. The interest rate on the Revolving Credit Facility was 6.57% at payoff date in April 2025. At December 31, 2025, the Company had two letters of credit issued and outstanding totaling $1,300 under the Revolving Credit Facility.
The Company paid off the $70,000 revolver balance in April 2025.
The Revolving Credit Facility contains financial covenant requirements to be tested quarterly only if the sum of (a) the aggregate principal amount of all Revolving Credit Loans and Swingline Loans plus (b) the aggregate Letter of Credit Obligations (other than (i) Cash Collateralized Letters of Credit and (ii) Letters of Credit, the aggregate Stated Amount of which do not exceed $20,000), exceeds 35.0% of the amount of the Total Revolving Credit Commitment (“Revolver”) (which is currently an amount equal to $140,000). If the financial covenant is in effect, as of the last day of any fiscal quarter for which the financial covenant is in effect, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio may not exceed 8.00:1.00. At December 31, 2025, the Company was in compliance with these covenants.
2023 Senior Notes
On December 29, 2023, USI issued $620,000 aggregate principal amount of Notes (the “2023 Senior Notes”) under an Indenture (the “Indenture”). The 2023 Senior Notes are fully and unconditionally guaranteed by each of the Company’s wholly owned domestic restricted subsidiaries that is a guarantor under the senior secured Credit Agreement. The 2023 Senior Notes are effectively subordinated to all USI’s secured obligations and rank senior in right of payment to all existing and future subordinated indebtedness of USI. The proceeds from the 2023 Senior Notes were used to redeem the Company’s $615,000 aggregate principal amount of 6.875% senior notes issued in April 2017 due May 1, 2025 (the “2017 Senior Notes”).
The 2023 Senior Notes will mature in 2032 and bear interest at a rate of 7.50% per annum, payable semiannually in arrears on January 15 and July 15 of each year, which began on July 15, 2024. The Company may redeem the 2023 Senior Notes at its option, in whole or in part, at a redemption price equal to 103.75% of the principal amount commencing 2027, 101.88% of the principal amount commencing 2028, and 100% of the principal amount commencing 2029, plus accrued and unpaid interest up to, but excluding the redemption date.
The Indenture contains covenants that, among other things, limit the Company’s ability to create liens on assets and restrict the Company’s ability to consolidate, merge or sell its assets. The Indenture also provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the Indenture and certain events of bankruptcy and insolvency. The Company was in compliance with these covenants at December 31, 2025.
Interest Rate Swap/Collar
On March 31, 2023, the Company entered into an interest rate swap agreement covering a notional amount of $700,000 of its floating rate debt that effectively converts the interest rate exposure from a 90-day Term SOFR rate to a fixed rate of 3.63% subject to a 0.5% floor through the maturity date of March 31, 2026. For the year ended December 31, 2025, the Company recognized a gain of $376, consisting of a realized gain of $4,262 and an unrealized loss of $3,886, within Interest expense in the Consolidated Statement of Operations. At December 31, 2025, the Company had a current derivative asset of $73 in Other current assets on the Consolidated Balance Sheet.
In March 2025, the Company entered into an interest rate collar agreement covering a notional amount of $525,000 with an interest rate cap of 4.79% and a floor of 3.00% (subject to a 0.50% minimum floor) with a maturity date of March 31, 2029. For the year ended December 31, 2025, the Company recognized an unrealized loss of $2,235 in Interest expense in the Consolidated Statement of Operations. At December 31, 2025, the Company had a current derivative liability of $275 in Other current liabilities and a non-current derivative liability of $1,960 in Other liabilities on the Consolidated Balance Sheet.
20
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
| 10. | Employee Benefit Plans |
401(k) Plan
The Company maintains a 401(k) Plan covering substantially all employees with at least one month of service. Under the 401(k) Plan, the first 6.0% of a participant’s contribution will be eligible for a discretionary employer match of 50.0% for each dollar contributed. The maximum employer match is 3.0% of a participant’s annual compensation. In addition, the employer match for “Highly Compensated Employees” will not exceed 3.0% of the compensation threshold set by the IRS to determine highly compensated status.
Following an acquisition, the Company may maintain the existing savings plans of acquired entities for a short period of time. The Company’s contributions to the 401(k) Plan for the year ended December 31, 2025 were $27,250 and are included in Compensation and employee benefits in the Consolidated Statement of Operations.
Non-Qualified Deferred Compensation Plan
The Company provides a non-qualified deferred compensation plan for its eligible employees and non-employee directors. The deferred compensation plan accepts voluntary contributions from participants, which earn returns based on participant-elected investments in various Company-owned life insurance policies and mutual funds offered in the plan. There are no employer contributions to the deferred compensation plan.
The majority of the deferred assets are invested in Company-owned life insurance policies. The fair value of these policies was $195,475 at December 31, 2025, and is included in Other assets on the Consolidated Balance Sheet. The deferred assets also include mutual fund investments totaling $8,976 for the year ended December 31, 2025. The long-term liability portion of the deferred compensation plan totaled $194,721 at December 31, 2025, and is reported in Other liabilities. The short-term portion which represents distributions due within the next twelve months totaled $9,282 at December 31, 2025, and is included in Other current liabilities on the Consolidated Balance Sheet.
Post-Employment Compensation Arrangement
On December 31, 2022, an indirect subsidiary of the Company acquired Rogers Benefit Group, Inc. (“RBG”). Prior to the acquisition, RBG had an existing post-employment compensation arrangement for retired employees, active employees, and potentially other employees in the future as they became eligible under the arrangement. This is not a qualified plan subject to the rules of the Employee Retirement Income Security Act. As part of the transaction, the Company amended the arrangement to discontinue the RBG post-employment compensation arrangement on December 31, 2022, for new participants but grandfathered the existing retired and active employees in the post-employment compensation arrangement. The estimated post-employment compensation arrangement obligation of $90,826 was established as a liability as part of the acquisition of RBG. The balance at December 31, 2025, was $93,722, of which $6,857 is included in Other current liabilities and $86,865 is included in Other liabilities on the Consolidated Balance Sheet.
| 11. | Stockholder’s Equity |
Common Stock
At December 31, 2025, the authorized capital stock under the Company’s Amended and Restated Certificate of Incorporation was 1,000 shares, all of which were voting common stock, par value $0.01 per share, of which 100 shares were outstanding.
At December 31, 2025, the authorized capital stock under the Parent’s Amended and Restated Certificate of Incorporation was 500,000,000 shares, with a par value of $0.01 per share. At December 31, 2025, 204,665,379 of the Parent’s shares were outstanding, which included 203,573,533 of common shares and 1,091,846 of unvested restricted shares.
At December 31, 2025, the estimated fair value of the Parent’s common stock was $41.00 per share. The estimated fair value analysis, which includes assumptions such as projected earnings, market multiples, and peer comparison, was prepared by management.
On May 6, 2022, the Company announced the U Exchange program (“U Exchange”) which is designed to provide existing employee shareholders and retired employee shareholders of the Parent with liquidity opportunities to the extent a shareholder chooses to have a portion of their shares repurchased by the Parent. In addition, the program will provide eligible employees, who are accredited investors, an opportunity to purchase initial or additional shares of the Parent. The program has minimum and maximum limits and is subject to annual confirmatory approval from the Board of Directors. The Company anticipates U Exchange will be an annual buy/sell program, with the primary exchange window opening in the second quarter each year. In Q4 2025 there was a window open to allow for purchases only. Net subscriptions during the open periods in 2025 totaled $2,798.
21
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
On May 6, 2022, the Company announced the U Direct program (“U Direct”), which is designed to provide existing U.S.-based employee shareholders of the Parent with an alternative liquidity option in the form of a loan. Loans will be on a recourse basis, secured by the shares of the Parent’s common stock owned by the employee borrower, beneficially or otherwise. The borrower will also have personal liability for the repayment. The U Direct Program excludes all stock options (whether vested or unvested) and unvested restricted shares. If an employee borrower defaults on any payment obligations, the Company may call the loan and repurchase the necessary shares at the current fair value to satisfy the principal amount plus accrued interest. Interest rates will be set by the Company at a level that will cover the Company’s cost of borrowing. Loans feature bi-weekly interest-only payments with a balloon payment due at maturity. Loans will be repayable on the earlier of the 5th anniversary of the loan date or 90 days after the employee borrower’s termination of employment. Employee borrowers may repay the loan at any time without a prepayment penalty. The Company anticipates U Direct will be an annual program with the window opening in the third quarter each year. Separately, the Company has issued a limited number of loans on similar terms, with interest deferred until maturity. The current interest rate is 6.23%. As of December 31, 2025, the total outstanding loan balances were $44,079, and interest receivable was $307. These balances are included in Other assets in the Consolidated Balance Sheet. Total interest income recognized was $2,140 for the year ended December 31, 2025, and is included in Other income on the Consolidated Statement of Operations.
The Sponsors and certain other investors have entered into a Stockholders Agreement, dated May 16, 2017, as amended, which contains agreements among the parties with respect to, among other things, governance rights, restrictions on the transfer of shares held by the Sponsors and certain registration rights with respect to such shares.
KKR, La Caisse and certain members of the Company’s management who have invested in the Parent (the “Management Stockholders”), have entered into a Management Stockholders’ Agreement, dated May 16, 2017, which contains agreements among the parties with respect to, among other things, restrictions on the transfer of shares held by the Management Stockholders and certain registration rights with respect to such shares.
| 12. | Stock-Based Compensation |
Restricted Shares
The Company offers restricted shares of common stock of the Parent to sales professionals and certain employees to enable the Company to obtain and retain the services of these individuals (the “Peak Program”). Each calendar year, the Company sets forth the criteria for employees to qualify for these awards. Shares will cliff vest after a period of five years. At December 31, 2025, the shares outstanding under the Peak Program were 800,598. The Peak Program has a qualified retirement provision that allows the shares granted to continue to vest after retirement. The service period for which this expense is recognized is from grant date to issuance date.
On May 9, 2024, the Company amended the Peak Program to provide for the grant of restricted shares to sales professionals upon graduation from the sales training program for select small retail property & casualty and employee benefits lines (the “Select Graduates”), including a catch up for identified prior Select Graduates. Shares will cliff vest after a period of five years and there is no qualified retirement provision associated with these shares. As of December 31, 2025, the shares outstanding under the Peak Program to Select Graduates were 147,169.
On June 9, 2022, the Company announced a share program (the “Summit Share Program”) for non-sales employees tied to the annual USI Summit Awards program for performance. Under the Summit Share Program, employees are granted restricted shares of common stock of the Parent for winning a USI Summit Award three times, five times and ten times. Shares will cliff vest after a period of five years. At December 31, 2025, the shares outstanding under the Summit Share Program were 144,079. The Summit Share Program has a qualified retirement provision that allows the shares granted to continue to vest after retirement. The service period for which this expense is recognized is from grant date to the issuance date.
The total expense recorded for restricted shares for the year ended December 31, 2025, was $8,948.
The total income tax benefit recognized in the Consolidated Statement of Operations for stock-based compensation was $10,939 for the year ended December 31, 2025.
22
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The following is a summary of the Company’s restricted shares activity and related information:
| Weighted- | ||||||||
| Number of | Average Grant | |||||||
| Shares | Date Fair Value | |||||||
| Balance, January 1, 2025 |
1,094,715 | $ | 22.17 | |||||
| Granted |
328,063 | $ | 35.52 | |||||
| Vested and called |
(239,692 | ) | $ | 15.52 | ||||
| Forfeited |
(91,240 | ) | $ | 26.82 | ||||
|
|
|
|||||||
| Balance, December 31, 2025 |
1,091,846 | $ | 27.25 | |||||
|
|
|
|||||||
Stock Options
At December 31, 2025, the maximum number of options authorized for issuance under the Equity Incentive Plan (“Plan”) was approximately 31,900,000. At December 31, 2025, options outstanding under the plan were 25,696,922 of which 8,393,607 were unvested. Options vest over a five-year period with a combination of cliff vesting and graded vesting provisions. The options range in strike price from $10.00 to $41.00. Compensation expense is being recognized for all options on a straight-line basis over the estimated service period. The total expense recorded for option awards for the year ended December 31, 2025 was $16,123. The unrecognized expense for options outstanding at December 31, 2025 was $50,418.
The following is a summary of the Company’s stock options activity and related information:
| Weighted- | Weighted- | |||||||||||||||
| Number of | Average Strike | Average | Aggregate | |||||||||||||
| Options | Price | Contractual Term | Intrinsic Value | |||||||||||||
| Balance, January 1, 2025 |
26,908,156 | $ | 16.46 | |||||||||||||
| Granted |
990,668 | $ | 39.09 | |||||||||||||
| Forfeited |
(536,413 | ) | $ | 26.46 | ||||||||||||
| Exercised |
(1,665,489 | ) | $ | 12.04 | ||||||||||||
|
|
|
|||||||||||||||
| Balance, December 31, 2025 |
25,696,922 | $ | 17.41 | 2.4 | $ | 606,198 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Exercisable at December 31, 2025 |
17,303,315 | $ | 11.59 | 2.0 | $ | 508,915 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
The fair values of stock option awards are based on the date of grant using the Black–Scholes option valuation model, which uses the assumptions set forth in the table below:
| 2025 | ||
| Risk-free interest rate |
3.6% - 4.5% | |
| Dividend yield |
0.0% | |
| Volatility factor of the Company’s common stock |
34.0% | |
| Average expected life of option |
4.1 - 5.1 years | |
| Weighted-average Black-Scholes value |
$13.38 |
23
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
| 13. | Income Taxes |
The income tax expense (benefit) consisted of the following:
| Year Ended | ||||
| December 31, 2025 | ||||
| Current tax provision: |
||||
| Federal |
$ | 50,628 | ||
| State |
14,698 | |||
|
|
|
|||
| Total current provision |
65,326 | |||
|
|
|
|||
| Deferred tax benefit: |
||||
| Federal |
(51,142 | ) | ||
| State |
(6,958 | ) | ||
|
|
|
|||
| Total deferred tax benefit |
(58,100 | ) | ||
|
|
|
|||
| Total income tax expense |
$ | 7,226 | ||
|
|
|
|||
Income taxes recorded by the Company related to continuing operations differ from the amounts computed by applying the statutory U.S. federal tax rate to the income before income taxes. Significant reconciling items were as follows:
| Year Ended December 31, 2025 | ||||||||
| Amount | % | |||||||
| Federal income tax expense |
$ | 14,290 | 21.0 | % | ||||
| State income tax expense, net |
5,566 | 8.2 | % | |||||
| Acquisition-related tax obligation |
(2,733 | ) | (4.0 | )% | ||||
| Change in valuation allowance |
(388 | ) | (0.6 | )% | ||||
| Stock compensation |
(8,835 | ) | (13.0 | )% | ||||
| Deferred compensation |
(4,630 | ) | (6.8 | )% | ||||
| Non-deductible meals and entertainment |
2,623 | 3.9 | % | |||||
| Other |
1,333 | 1.9 | % | |||||
|
|
|
|
|
|||||
| Total income tax expense |
$ | 7,226 | 10.6 | % | ||||
|
|
|
|
|
|||||
State taxes primarily relate to the Company’s operations in Pennsylvania and Texas, which collectively account for more than 50% of the state income tax component of the rate reconciliation.
The consolidated effective tax rate for the year ended December 31, 2025 was 10.6%.
Deferred income taxes reflect the impact of temporary differences between the values recorded for financial reporting purposes and values utilized for measurement in accordance with current tax laws.
At December 31, 2025, the Company’s Net DTLs totaled $1,164. The Company is required to reduce DTAs by a valuation allowance to the extent that, based on the weight of available evidence, it is “more likely than not” (i.e., a likelihood of more than 50%) that any DTAs will not be realized. Recognition of a valuation allowance would decrease reported earnings on a dollar-for-dollar basis in the year in which any such recognition was to occur. The determination of whether a valuation allowance is appropriate requires the exercise of management’s judgment. In making this judgment, management is required to weigh the positive and negative evidence as to the likelihood that the DTAs will be realized.
In connection with the Wells Fargo Insurance acquisition in 2017, the Company acquired a future tax benefit related to compensation for service previously provided by Wells Fargo Insurance employees. Under the purchase agreement, the Company agreed to pass through to the seller any federal income tax benefit associated with this compensation when the benefit is realized by the Company after the filing of its federal tax return. As a result of this agreement, the Company has recorded a DTA of $20,232 at December 31, 2025, which is netted within the Company’s net DTL balances. Corresponding liabilities of $21,105 are included in other liabilities on the December 31, 2025 consolidated Balance Sheet. The change in the value of the DTA will be recorded as a component of deferred income tax expense while the change in the liability will be recorded as Other non-operating income.
24
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The tax effects of the significant temporary differences giving rise to the Company’s net deferred tax liabilities were as follows:
| December 31, 2025 | ||||
| Deferred tax liabilities: |
||||
| Intangible assets |
$ | 260,075 | ||
| Accounts receivable |
66,740 | |||
| Operating lease right-of-use assets |
32,938 | |||
| Property and equipment |
12,710 | |||
|
|
|
|||
| Total deferred tax liabilities |
372,463 | |||
|
|
|
|||
| Deferred tax assets: |
||||
| Deductable business interest expense limitation |
168,142 | |||
| Accrued compensation and benefits |
128,553 | |||
| Operating lease liabilities |
37,349 | |||
| Acquisition-related future compensation |
20,232 | |||
| Federal and state NOL carry-forwards |
6,135 | |||
| Accrued legal and claims reserve |
4,467 | |||
| Allowance for bad debts and other reserves |
3,089 | |||
| Tax credit |
424 | |||
| Other |
5,277 | |||
|
|
|
|||
| Total deferred tax assets |
373,668 | |||
|
|
|
|||
| Less: valuation allowance |
(2,369 | ) | ||
|
|
|
|||
| Deferred tax liabilities, net |
$ | 1,164 | ||
|
|
|
|||
At December 31, 2025, the Company had $6,297 of federal NOL carry-forwards.
At December 31, 2025, the Company had state NOL and tax credit carry-forwards of approximately $174,920. Such loss and credit carry-forwards will expire from 2026 to 2045. The amount of state NOL carry-forwards for which a valuation allowance has been provided is $55,268 at December 31, 2025.
During the year ended December 31, 2025, the Company did not recognize any expenses for interest and penalties within income tax expense. The Company had no interest and penalties accrued as of December 31, 2025. As of December 31, 2025, the Company expects no net adjustment to the unrecognized tax positions within the next twelve months.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2021. At December 31, 2025, there were no liabilities recorded for unrecognized tax benefits.
| 14. | Lease Commitments |
All of the Company’s operating lease right-of-use assets and operating lease liabilities represent real estate leases for office space used to conduct the Company’s business.
Lease costs for operating leases consists of the lease payments, inclusive of lease incentives and are recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease costs are included in Other operating expenses in the Consolidated Statement of Operations.
25
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
The following table represents components of lease cost for operating leases:
| Year Ended | ||||
| December 31, 2025 | ||||
| Lease cost |
$ | 39,970 | ||
| Variable lease cost |
12,240 | |||
| Short-term lease cost |
2,888 | |||
| Lease impairments & adjustments |
(247 | ) | ||
|
|
|
|||
| Operating lease cost |
54,851 | |||
| Sublease income |
(1,858 | ) | ||
|
|
|
|||
| Total lease cost, net |
$ | 52,993 | ||
|
|
|
|||
Supplemental cash flow information related to leases was as follows:
| Year Ended | ||||
| December 31, 2025 | ||||
| Cash paid for amounts included in the measurement of lease liabilities: |
||||
| Operating cash flows from operating leases |
$ | 47,875 | ||
| Right-of-use assets obtained in exchange for operating leases liabilities |
27,819 | |||
Supplemental balance sheet information related to leases was as follows:
| December 31, 2025 | ||||
| Assets: |
||||
| Operating lease right-of-use assets |
$ | 125,814 | ||
|
|
|
|||
| Total assets |
$ | 125,814 | ||
|
|
|
|||
| Liabilities: |
||||
| Accrued expenses - current portion of operating lease liabilities |
$ | 35,311 | ||
| Long-term operating lease liabilities |
107,705 | |||
|
|
|
|||
| Total liabilities |
$ | 143,016 | ||
|
|
|
|||
| Weighted average remaining lease term in years - operating leases |
4.4 years | |||
| Weighted average discount rate - operating leases |
2.59 | % | ||
The maturity analysis of the lease liabilities by fiscal year at December 31, 2025 for the Company’s operating leases are as follows:
| Year |
Amounts | |||
| 2026 |
$ | 38,645 | ||
| 2027 |
36,021 | |||
| 2028 |
28,265 | |||
| 2029 |
20,894 | |||
| 2030 |
15,524 | |||
| Thereafter |
13,091 | |||
|
|
|
|||
| Total undiscounted future lease payments |
152,440 | |||
| Less: Imputed interest |
(9,424 | ) | ||
|
|
|
|||
| Present value of lease payments |
$ | 143,016 | ||
|
|
|
|||
As of December 31, 2025, there were leases that have not yet commenced that have been signed by the Company with future lease commitments totaling $9,417.
26
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
| 15. | Related Party Transactions |
On May 16, 2017, USI changed ownership from Onex Corporation to the Sponsors (the “Transaction”). In connection with the Transaction, the Company entered into a monitoring agreement with entities affiliated with KKR and La Caisse to provide advisory, consulting and financial services to the Company. The annual advisory fee will be a pro rata split between the parties based on their share ownership and increases by 5% annually on each anniversary of the Transaction. The Company recognized expenses of $5,103 related to the monitoring agreement for the year ended December 31, 2025. These expenses are included in Other operating expenses in the Consolidated Statement of Operations.
At December 31, 2025, KKR Credit Advisors (US) LLC, an affiliate of one of the Company’s Sponsors, held $5,607, or less than 1%, of the Company’s total Term Loans.
As a result of certain acquisitions, the Company assumed operating leases in buildings owned fully or partially by related parties. For the year ended December 31, 2025, the Company incurred $622 in rent expense relating to these leases.
For the year ended December 31, 2025, approximately 60% of the Company’s acquisition earnout obligations were payable to current employees of the Company.
On May 6, 2022, the Company announced the U Direct program which provides existing U.S.-based employee shareholders of the Parent with an alternative liquidity option in the form of a loan. Refer to Note 11 on these Audited Consolidated Financial Statements for additional information.
| 16. | Business Concentrations |
For the year ended December 31, 2025, approximately 42% of the Company’s revenues were recorded in offices in the states of Texas, New York, Florida, California, and Pennsylvania. Accordingly, the occurrence of adverse economic conditions or an adverse regulatory climate in these states could have a material adverse effect on the Company. However, the Company believes, based on its diversified customer base and product lines within the states in which it operates, that there is minimal risk of a material adverse occurrence due to the concentration of operations in these states.
| 17. | Commitments and Contingencies |
Legal Matters
The Company is subject to various claims, lawsuits and proceedings that arise in the normal course of business. These matters principally consist of alleged errors and omissions in connection with the placement of insurance and rendering administrative or consulting services and are generally covered in whole or in part by insurance. Except as discussed below, the Company does not believe it is a party to any claims, lawsuits or legal proceedings that will have a material adverse effect on its consolidated financial condition and results of operations. Where it is determined, in consultation with internal and external counsel that are handling the Company’s defense in these matters and based upon a combination of litigation and settlement strategies, that a loss is probable and estimable in a given matter, the Company establishes an accrual. In all pending litigation matters, the Company believes it has accrued adequate reserves. The Company continuously monitors any proceedings as they develop and adjusts its accruals and disclosures as needed.
| 18. | Segment Information |
The Company has identified two reportable segments: Retail and Specialty.
The Retail segment offers property and casualty insurance, group health, life and disability insurance. The Retail segment generates revenues through commissions paid by insurance underwriters and through fees charged to its clients. The Company’s brokers, agents and administrators act as intermediaries between insurers and their customers, and the Company does not assume underwriting risks.
The Specialty segment offers programs, wholesale, associations, retirement products and consulting services and employee benefit wholesale products. Revenues are generated through commissions paid by insurance underwriters and through fees paid by clients on a negotiated per-claim or per-service fee basis.
27
USI, INC., AND SUBSIDIARIES
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
Corporate includes expenses related to corporate management, human resources, legal, capital planning, information technology and finance that are not included in assessing segment performance but are included in reported consolidated results. Corporate also holds the Company’s debt. The information presented below shows the results of operations for the two reportable segments and Corporate as a reconciliation to consolidated amounts.
The Company’s Chief Executive Officer, as the Company’s Chief Operating Decision Maker, regularly evaluates segment performance and makes resource allocation decisions based on segment revenue and operating margin.
| Year Ended December 31, 2025 | ||||||||||||||||
| Retail | Specialty | Corporate | Total | |||||||||||||
| Revenues: |
||||||||||||||||
| Net commissions and fees |
$ | 2,109,454 | $ | 518,249 | $ | — | $ | 2,627,703 | ||||||||
| Contingents and supplementals |
242,860 | 19,378 | — | 262,238 | ||||||||||||
| Other income |
53,017 | 5,718 | 23,321 | 82,056 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
2,405,331 | 543,345 | 23,321 | 2,971,997 | ||||||||||||
| Expenses (income): |
||||||||||||||||
| Compensation and employee benefits |
1,503,393 | 334,482 | 58,672 | 1,896,547 | ||||||||||||
| Acquisition-related retention and buydown bonuses |
7,469 | 2,649 | 29 | 10,147 | ||||||||||||
| Stock-based compensation |
16,672 | 2,099 | 6,300 | 25,071 | ||||||||||||
| Other operating expenses |
208,708 | 53,942 | 26,016 | 288,666 | ||||||||||||
| Amortization of intangible assets |
290,114 | 84,519 | — | 374,633 | ||||||||||||
| Depreciation |
25,849 | 7,071 | 848 | 33,768 | ||||||||||||
| Earnout adjustments and accretion of discount |
1,473 | 2,390 | — | 3,863 | ||||||||||||
| Interest expense |
— | — | 319,225 | 319,225 | ||||||||||||
| Other non-operating (income) expense |
(38,422 | ) | (10,745 | ) | 1,198 | (47,969 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
2,015,256 | 476,407 | 412,288 | 2,903,951 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) before income taxes |
$ | 390,075 | $ | 66,938 | $ | (388,967 | ) | $ | 68,046 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets at December 31, 2025 |
$ | 5,315,718 | $ | 1,504,994 | $ | 709,077 | $ | 7,529,789 | ||||||||
| 19. | Subsequent Events |
The Company evaluated subsequent events from December 31, 2025, through February 27, 2026, the date the audited Consolidated Financial Statements were originally issued. In connection with the reissuance of these Consolidated Financial Statements the Company performed an additional evaluation of subsequent events through August 21, 2026, the date the Consolidated Financial Statements were reissued.
In February and May 2026, the Board declared quarterly cash dividends and dividend equivalents of $0.50 per share. The Company paid an aggregate of $211,466 in dividends and dividend equivalents associated with these declarations.
On August 5, 2026, the Board declared (i) an ordinary cash dividend of $0.50 per share on all issued and outstanding shares of common and restricted stock to shareholders of record as of the close of business on August 6, 2026 (the “Dividend Record Date”) and (ii) a cash dividend equivalent of $0.50 per options outstanding on the Dividend Record Date. The cash dividend and cash dividend equivalent is payable on or about August 21, 2026, except that the cash dividend on unvested restricted shares and the cash dividend equivalent on unvested stock options will each be payable promptly following vesting.
28
Exhibit 99.2
USI, Inc., and Subsidiaries
Consolidated Financial Statements
For the Six Months Ended June 30, 2026
| Page | ||||
| Contents | No. | |||
| Consolidated Financial Statements (Unaudited): |
||||
| Consolidated Balance Sheet |
3 | |||
| Consolidated Statement of Operations |
4 | |||
| Consolidated Statement of Stockholder’s Equity |
5 | |||
| Consolidated Statement of Cash Flows |
6 | |||
| Notes to Consolidated Financial Statements |
7 | |||
2
USI, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share data)
(Unaudited)
| June 30, 2026 | ||||
| Current assets: |
||||
| Cash and cash equivalents |
$ | 220,474 | ||
| Fiduciary assets |
319,118 | |||
| Accounts receivable, net of allowance for bad debt of $2,971 |
1,209,387 | |||
| Other current assets |
192,689 | |||
|
|
|
|||
| Total current assets |
1,941,668 | |||
| Goodwill |
3,755,246 | |||
| Identifiable intangible assets, net |
962,132 | |||
| Property and equipment, net |
64,648 | |||
| Operating lease right-of-use assets |
115,391 | |||
| Other assets |
417,163 | |||
|
|
|
|||
| Total assets |
$ | 7,256,248 | ||
|
|
|
|||
| Liabilities and stockholder’s equity |
||||
| Current liabilities: |
||||
| Premiums payable |
$ | 1,125,381 | ||
| Accrued expenses |
366,272 | |||
| Current portion of long-term debt, net of discounts of $7,804 |
30,757 | |||
| Current acquisition earnout obligations |
7,260 | |||
| Current acquisition-related retention obligations |
3,909 | |||
| Other current liabilities |
127,059 | |||
|
|
|
|||
| Total current liabilities |
1,660,638 | |||
| Long-term debt, net of deferred financing costs and discounts of $59,550 |
4,310,553 | |||
| Long-term acquisition earnout obligations |
4,633 | |||
| Long-term acquisition-related retention obligations |
9,256 | |||
| Deferred tax liabilities, net |
233 | |||
| Long-term operating lease liabilities |
98,482 | |||
| Other liabilities |
340,687 | |||
|
|
|
|||
| Total liabilities |
6,424,482 | |||
| Commitments and contingencies (see Note 13) |
||||
| Stockholder’s equity |
||||
| Common stock, par $0.01, 1,000 shares authorized, 100 shares issued and |
— | |||
| Additional paid-in capital |
1,351,033 | |||
| Accumulated deficit |
(519,267 | ) | ||
|
|
|
|||
| Total stockholder’s equity |
831,766 | |||
|
|
|
|||
| Total liabilities and stockholder’s equity |
$ | 7,256,248 | ||
|
|
|
|||
See accompanying Notes to Consolidated Financial Statements
3
USI, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands)
(Unaudited)
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Revenues: |
||||
| Net commissions and fees |
$ | 1,337,426 | ||
| Contingents and supplementals |
150,406 | |||
| Other income |
41,102 | |||
|
|
|
|||
| Total revenues |
1,528,934 | |||
| Operating expenses: |
||||
| Compensation and employee benefits |
1,001,537 | |||
| Acquisition-related retention and buydown bonuses |
3,136 | |||
| Stock-based compensation |
12,131 | |||
| Other operating expenses |
150,272 | |||
| Amortization of intangible assets |
185,777 | |||
| Depreciation |
16,147 | |||
| Earnout adjustments and accretion of discount |
1,188 | |||
|
|
|
|||
| Total operating expenses |
1,370,188 | |||
|
|
|
|||
| Operating income |
158,746 | |||
| Interest expense |
(142,751 | ) | ||
| Other non-operating income |
381 | |||
|
|
|
|||
| Income before income taxes |
16,376 | |||
| Income tax expense |
32,340 | |||
|
|
|
|||
| Net loss |
$ | (15,964 | ) | |
|
|
|
|||
See accompanying Notes to Consolidated Financial Statements
4
USI, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY
(Amounts in thousands)
(Unaudited)
| Total | ||||||||||||||||||||
| Additional | Accumulated | Stockholder’s | ||||||||||||||||||
| Shares | Dollars | Paid-in Capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2025 |
— | $ | — | $ | 1,626,049 | $ | (503,303 | ) | $ | 1,122,746 | ||||||||||
| Issuance of Parent equity |
— | — | 22,110 | — | 22,110 | |||||||||||||||
| Repurchase/cancellation of Parent equity |
— | — | (78,897 | ) | — | (78,897 | ) | |||||||||||||
| Dividends and dividend equivalents of Parent equity |
— | — | (230,360 | ) | — | (230,360 | ) | |||||||||||||
| Stock-based compensation |
— | — | 12,131 | — | 12,131 | |||||||||||||||
| Net loss |
— | — | — | (15,964 | ) | (15,964 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance, June 30, 2026 |
— | $ | — | $ | 1,351,033 | $ | (519,267 | ) | $ | 831,766 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See accompanying Notes to Consolidated Financial Statements
5
USI, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Operating Activities |
||||
| Net loss |
$ | (15,964 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||
| Amortization of intangible assets |
185,777 | |||
| Depreciation |
16,147 | |||
| Stock-based compensation |
12,131 | |||
| Amortization of debt issuance costs and accretion of discount |
8,395 | |||
| Amortization of cost to obtain |
18,864 | |||
| Earnout adjustments and accretion of discount |
1,188 | |||
| Payments on acquisition earnout obligations in excess of original estimates |
(1,221 | ) | ||
| Unrealized gain on derivatives |
(3,088 | ) | ||
| Impairment of operating lease right-of-use assets |
700 | |||
| Deferred income tax benefit |
(931 | ) | ||
| Gain on business divestiture |
(948 | ) | ||
| Changes in operating assets and liabilities (net of acquisitions): |
| |||
| Short-term investments in fiduciary assets |
182 | |||
| Accounts receivable, net |
(83,420 | ) | ||
| Other assets |
53,263 | |||
| Premiums payable |
62,886 | |||
| Accrued expenses and other liabilities |
(13,299 | ) | ||
| Acquisition-related retention obligations |
(5,646 | ) | ||
| Tax benefit from Parent equity |
(14,231 | ) | ||
|
|
|
|||
| Net cash provided by operating activities |
220,785 | |||
| Investing Activities |
||||
| Cash paid for acquisitions |
(926 | ) | ||
| Purchase of property and equipment, net |
(15,930 | ) | ||
| Employee loans, net of repayments |
3,742 | |||
|
|
|
|||
| Net cash used in investing activities |
(13,114 | ) | ||
| Financing Activities |
||||
| Payments on long-term debt |
(19,281 | ) | ||
| Proceeds from issuance of Parent equity |
12,528 | |||
| Repurchase/cancellation of Parent equity |
(75,515 | ) | ||
| Dividend and dividend equivalent payments on Parent equity |
(211,466 | ) | ||
| Payments of acquisition earnout obligations |
(3,678 | ) | ||
| Payments of deferred acquisition consideration |
(4,457 | ) | ||
| Receipt of contingent consideration on business divestiture |
474 | |||
|
|
|
|||
| Net cash used in financing activities |
(301,395 | ) | ||
| Decrease in restricted cash |
(5,103 | ) | ||
| Decrease in cash and cash equivalents |
(88,621 | ) | ||
|
|
|
|||
| Cash, cash equivalents, and restricted cash at beginning of period |
515,071 | |||
|
|
|
|||
| Cash, cash equivalents, and restricted cash at end of period |
$ | 421,347 | ||
|
|
|
|||
See accompanying Notes to Consolidated Financial Statements
6
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
| 1. | The Company and Nature of Operations |
USI, Inc., a Delaware corporation, and its wholly-owned subsidiaries (collectively, “USI” or the “Company”) are owned by USI Advantage Corp. (the “Parent”). The Parent is a Delaware corporation, controlled by entities affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”), Integrum Holdings L.P. and Caisse de dépôt et placement du Québec (“La Caisse”), (collectively the “Sponsors”). The Parent does not have material assets, other than the stock of its subsidiaries, and it conducts all its operations directly or indirectly through the Company and its subsidiaries.
As of June 30, 2026, 80.8% of the issued shares of common stock of the Parent, with a par value of $0.01 per share, were held by the Sponsors and certain co-investors, respectively.
| 2. | Basis of Presentation and Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. For a description of all of the Company’s material accounting policies, see Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” to the Company’s Consolidated Financial Statements as of and for the year ended December 31, 2025 included in the Company’s Annual Report.
Use of Estimates
The preparation of the Consolidated Financial Statements is in conformity with GAAP which requires management to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period, as well as disclosure of contingent assets and liabilities. Estimates are used in determining such amounts as allowances for bad debts and other reserves, earnouts, direct bill lag accruals, revenue recognition, right-of-use assets, stock compensation, goodwill, intangible assets and impairments, income taxes, legal, other loss contingencies, and accruals of certain liabilities. Actual results could differ materially from those estimates.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued certain accounting updates, which we have either determined to be not applicable or not expected to have a material impact on the Company’s Consolidated Financial Statements
| 3. | Revenues from Contract with Customers |
The following table presents the revenues disaggregated by revenue source:
| Six Months Ended June 30, 2026 | ||||||||||||||||
| Revenues: | Retail | Specialty | Other | Total | ||||||||||||
| Net commissions and fees — Property & Casualty (1) |
$ | 662,283 | $ | 66,760 | $ | — | $ | 729,043 | ||||||||
| Net commissions and fees — Employee Benefits (1) |
411,485 | 196,898 | — | 608,383 | ||||||||||||
| Contingents and supplementals (2) |
141,091 | 9,315 | — | 150,406 | ||||||||||||
| Other income (3) |
19,127 | 1,821 | 20,154 | 41,102 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
$ | 1,233,986 | $ | 274,794 | $ | 20,154 | $ | 1,528,934 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Net commissions and fees are revenues received by the Company that represent a percentage of the premium paid by the insured, fees for services and fees negotiated in lieu of commissions. |
| (2) | Contingents are based primarily on underwriting results, but may also reflect consideration for volume, growth and/or retention. Supplementals include additional commissions over base commissions received from insurance carriers when certain predetermined production levels are exceeded. |
| (3) | Other income consists primarily of interest on cash and investments, gains from the Company’s deferred compensation plan and premium financing income, among other items. |
7
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
Contract Assets and Deferred Costs
The estimated receivables for contingents are recorded as contract assets which are included in Other current assets on the Company’s Consolidated Balance Sheet. During each reporting period, the Company estimates the amounts earned using historical averages and other factors to project such revenues. Due to the variability of the revenues earned period to period, especially in contracts sensitive to loss ratios, the estimates might change significantly from quarter to quarter. The change in contract assets is due primarily to cash receipts for settlement of prior period profit-sharing agreements and accruals for estimated contingent revenue related to current year policy placements.
Costs to obtain – The Company defers certain costs to obtain customer contracts, which represent incremental compensation that is discreetly identified as related to the acquisition of new business. These deferred costs are included in Other current assets and Other assets on the Company’s Consolidated Balance Sheet. Costs to obtain are largely compensation-related and are deferred and amortized over the estimated life of the customer contracts to which the costs relate and are included in Compensation and employee benefits in the Consolidated Statement of Operations.
Costs to fulfill - The Company defers certain costs to fulfill contracts as an asset and expenses these costs as the associated revenue is recorded. These deferred costs are included in Other current assets on the Company’s Consolidated Balance Sheet. The Company recognizes an asset for costs incurred to fulfill a contract if the following criteria are met: (1) costs are specifically identified and relate to a contract or anticipated contract, (2) costs generate or enhance resources used in satisfying the Company’s performance obligations, and (3) costs are expected to be recovered.
Assets recognized as costs to fulfill include internal costs related to pre-placement brokerage activities and are comprised of compensation expense. These costs are amortized as the related revenue is recognized. The amortization is included in Compensation and employee benefits on the Consolidated Statement of Operations.
The balances of the Company’s contract assets, costs to obtain and costs to fulfill on the Consolidated Balance Sheet are as follows:
| June 30, 2026 | ||||
| Contract assets |
$ | 55,179 | ||
| Costs to obtain |
162,433 | |||
| Costs to fulfill |
24,022 | |||
The amounts of the Company’s costs to obtain and costs to fulfill activity on the Consolidated Statement of Operations are as follows:
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Costs to obtain deferral |
$ | 27,609 | ||
| Costs to obtain amortization |
(18,864 | ) | ||
| Costs to fulfill deferral |
$ | 64,323 | ||
| Costs to fulfill amortization |
(61,803 | ) | ||
| 4. | Business Combinations |
For the six months ended June 30, 2026, the Company made four acquisitions for an aggregate purchase price of $1,466, comprised of $926 of cash consideration and $540 of contingent earnouts. These acquisitions are included in the Retail and Specialty segments. The acquisitions were made primarily to expand the Company’s wholesale benefits, employee benefits and property and casualty insurance brokerage services and increase the number of sales professionals.
All acquisitions are accounted for in accordance with ASC 805 Business Combinations. The identifiable assets acquired, and liabilities assumed were recorded at fair value at the date of the acquisitions. Preliminary purchase price allocations are established at the time of the acquisitions and are reviewed within the first year of ownership, upon completion of an external valuation or for other required adjustments. Accordingly, amounts preliminarily allocated to goodwill and other intangible assets may be adjusted. Such amounts may be material and would primarily represent reclassifications between goodwill and other intangible assets.
8
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
Amounts allocated to tangible and intangible assets from the acquisitions are as follows:
| Six Months Ended June 30, 2026 |
||||||||||||||||||||||||
| Total Net | ||||||||||||||||||||||||
| Date of | Business | Tangible | Expiration | Liabilities | Assets | |||||||||||||||||||
| Name |
Acquisition | Segment | Assets | Rights | Assumed | Acquired | ||||||||||||||||||
| Other |
Various | Both | $ | 37 | $ | 1,437 | $ | (8 | ) | $ | 1,466 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total |
$ | 37 | $ | 1,437 | $ | (8 | ) | $ | 1,466 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnout Obligations
Certain acquisitions are structured with contingent purchase price obligations commonly referred to as earnouts. At June 30, 2026, the total undiscounted earnout obligations ranged from $10,994 to $13,088 with a best estimate of $12,096. The discounted liability for earnout obligations on the Consolidated Balance Sheet totaled $11,893 at June 30, 2026.
Acquisition-Related Costs
Acquisition-related costs primarily consist of legal and due diligence expenses and are included in Other operating expenses in the Consolidated Statement of Operations. The Company incurred acquisition-related costs of $246 for the six months ended June 30, 2026.
Divestiture
During the first quarter of 2026, we recognized a gain of $948 in Other non-operating income on the Consolidated Statement of Operations, related to earnouts on the sale of the international business in 2023.
| 5. | Supplemental Disclosures of Cash Flow Information |
The following table represents supplemental cash flow information as well as non-cash investing and financing activities:
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Cash paid for interest and related fees on debt |
$ | 137,514 | ||
| Cash paid for income taxes: |
||||
| Federal income tax |
27,131 | |||
| State income tax, net |
10,372 | |||
|
|
|
|||
| Total cash paid for income taxes, net |
$ | 37,503 | ||
|
|
|
|||
| Non-cash investing and financing activities: |
||||
| Estimated acquisition earnout obligations |
$ | 540 | ||
| Accrued fixed asset purchases |
1,663 | |||
| Dividends and dividend equivalents payable |
9,312 | |||
| Dividends reinvested through the dividend reinvestment plan |
9,582 | |||
| Repurchase of shares in exchange for cancellation of employee loans |
3,249 | |||
9
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
The following table represents a reconciliation of cash, cash equivalents and restricted cash:
| June 30, 2026 | ||||
| Cash and cash equivalents |
$ | 220,474 | ||
| Restricted cash included in Fiduciary assets |
200,873 | |||
|
|
|
|||
| Total cash, cash equivalents, and restricted cash |
$ | 421,347 | ||
|
|
|
|||
| 6. | Goodwill and Other Intangible Assets |
The following table presents the Company’s changes in goodwill by reportable segment:
| Retail | Specialty | Total | ||||||||||
| Balance, January 1, 2026 |
$ | 2,973,814 | $ | 781,432 | $ | 3,755,246 | ||||||
|
|
|
|
|
|
|
|||||||
| Balance, June 30, 2026 |
$ | 2,973,814 | $ | 781,432 | $ | 3,755,246 | ||||||
|
|
|
|
|
|
|
|||||||
Goodwill changes arise from acquisitions, transfers between segments, and purchase accounting adjustments during the first twelve months following the acquisition date.
The Company gave consideration as to whether events or changes in circumstances had occurred since December 31, 2025 that could indicate that the carrying amounts of the Company’s goodwill and other intangible assets may not be recoverable as of June 30, 2026 and concluded that no such events or changes in circumstances had occurred to warrant a change in the assumptions utilized in the December 31, 2025 impairment tests of the Company’s goodwill and other intangible assets.
The Company’s intangible assets by asset class were as follows:
| Gross Carrying | Accumulated | Net Carrying | Weighted-Average | |||||||||||||
| June 30, 2026 | Value | Amortization | Value | Amortization Period | ||||||||||||
| Expiration rights |
$ | 3,881,775 | $ | (3,043,656 | ) | $ | 838,119 | 10.4 Years | ||||||||
| Covenants not-to-compete |
10,329 | (9,885 | ) | 444 | 5.0 Years | |||||||||||
| Other intangibles |
15,500 | (2,131 | ) | 13,369 | 20.0 Years | |||||||||||
| Trade names |
110,200 | — | 110,200 | Indefinite | ||||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 4,017,804 | $ | (3,055,672 | ) | $ | 962,132 | |||||||||
|
|
|
|
|
|
|
|||||||||||
The Company’s trade names are deemed to have indefinite lives and, therefore, no amortization has been recorded.
The estimated amortization expense for the Company’s amortizable intangible assets for the next five years and thereafter is as follows:
| Year |
Amounts | |||
| 2026 (Remainder) |
$ | 185,758 | ||
| 2027 |
236,744 | |||
| 2028 |
135,354 | |||
| 2029 |
116,006 | |||
| 2030 |
51,318 | |||
| Thereafter |
126,752 | |||
|
|
|
|||
| Total amortization expense |
$ | 851,932 | ||
|
|
|
|||
10
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
| 7. | Fair Value Measurements |
The tables below present the fair value hierarchy for the financial assets and (liabilities) held by the Company:
| June 30, 2026 | ||||||||||||||||
| Assets at fair value: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash and cash equivalents |
$ | 220,474 | $ | — | $ | — | $ | 220,474 | ||||||||
| Fiduciary assets |
319,966 | — | — | 319,966 | ||||||||||||
| Deferred compensation assets |
— | 224,605 | — | 224,605 | ||||||||||||
| Employee loan receivables |
— | 37,088 | — | 37,088 | ||||||||||||
| Derivative asset |
— | 927 | — | 927 | ||||||||||||
| Earnouts receivable |
— | — | 474 | 474 | ||||||||||||
| Liabilities at fair value: |
||||||||||||||||
| Acquisition earnout obligations |
— | — | (11,893 | ) | (11,893 | ) | ||||||||||
| Deferred compensation liabilities |
— | (218,227 | ) | — | (218,227 | ) | ||||||||||
| Post-employment compensation liability |
— | — | (93,805 | ) | (93,805 | ) | ||||||||||
Deferred compensation asset values are comprised of the cash surrender values related to underlying company-owned life insurance policies and mutual funds adjusted for market performance. Deferred compensation liabilities include obligations related to the Company’s deferred compensation plan adjusted for market performance. The fair value is obtained based on observable market prices quoted in active markets for similar instruments.
The employee loan receivables have a 5-year principal balloon payment and a floating market interest rate updated annually and their outstanding value approximates market value.
The fair value of acquisition earnout obligations is based on the present value of the expected future payments to be made to the sellers of businesses acquired in accordance with the respective agreements, which is a Level 3 fair value measurement. In determining fair value, the Company uses computations based on financial projections developed by management. The estimated future earnout payments are based on the criteria and performance targets included in each purchase agreement. The earnout liabilities are discounted to present value using a risk-adjusted market rate of 10% for the six months ended June 30, 2026. Changes in the acquired financial projections, assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnouts.
The table below presents the changes in fair value for earnout liabilities categorized as Level 3:
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Balance, beginning of period |
$ | 15,064 | ||
| Net change recognized in earnings |
955 | |||
| Net additions |
540 | |||
| Payments |
(4,899 | ) | ||
| Discount accretion |
233 | |||
|
|
|
|||
| Balance, end of period |
$ | 11,893 | ||
|
|
|
|||
| Movement in total loss relating to instruments held at the reporting date |
$ | 913 | ||
11
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
The table below presents the changes in fair value for the post-employment compensation liability categorized as Level 3:
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Balance, beginning of period |
$ | 93,722 | ||
| Net change recognized in earnings |
(286 | ) | ||
| Payments |
(2,361 | ) | ||
| Discount accretion |
2,730 | |||
|
|
|
|||
| Balance, end of period |
$ | 93,805 | ||
|
|
|
|||
| 8. | Long-Term Debt |
The table below presents the Company’s debt obligations:
| Date Issued | Maturity Date | Issuance Amount | June 30, 2026 | |||||||||||||
| 2024-C Term Loan Facility |
September 29, 2023 | September 29, 2030 | $ | 1,420,000 | $ | 1,381,233 | ||||||||||
| 2024-D Term Loan Facility |
November 22, 2022 | November 21, 2029 | 2,500,000 | 2,407,431 | ||||||||||||
| 2023 Senior Notes |
December 29, 2023 | January 15, 2032 | 620,000 | 620,000 | ||||||||||||
| Revolving Credit Facility |
May 16, 2017 | December 21, 2029 | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total debt |
4,408,664 | |||||||||||||||
| Current portion of long-term debt |
(38,561 | ) | ||||||||||||||
| Term loan and senior notes deferred financing costs |
(37,827 | ) | ||||||||||||||
| Term loan discount, long-term portion |
(21,723 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| Long-term debt |
$ | 4,310,553 | ||||||||||||||
|
|
|
|||||||||||||||
The aggregate maturities of debt obligations as of June 30, 2026 and for each of the next five years are:
| Total | Year One | Year Two | Year Three | Year Four | Year Five | Thereafter | ||||||||||||||||||||||
| Term Loan Facilities |
$ | 3,788,664 | $ | 38,561 | $ | 38,561 | $ | 38,561 | $ | 2,347,981 | $ | 1,325,000 | $ | — | ||||||||||||||
| 2023 Senior Notes |
620,000 | — | — | — | — | — | 620,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total debt, gross of discount |
$ | 4,408,664 | $ | 38,561 | $ | 38,561 | $ | 38,561 | $ | 2,347,981 | $ | 1,325,000 | $ | 620,000 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Credit Facilities
The Company entered into a credit agreement dated May 16, 2017 (the “Credit Agreement”) to provide senior secured credit facilities (the “Credit Facilities”) that include an uncommitted incremental facility which, subject to certain conditions, provides for additional term loans and/or revolving loans in an aggregate amount not to exceed the Maximum Incremental Facilities Amount as defined in the Credit Agreement. The obligations under the Credit Facilities are guaranteed by each of its wholly owned domestic restricted subsidiaries. Substantially all of the Company’s assets are pledged as collateral under the Credit Agreement. The Credit Agreement contains certain affirmative and negative covenants. The amounts outstanding under the Credit Agreement are subject to mandatory prepayment under specified circumstances, with a percentage of excess cash flows and certain cash proceeds from asset sales and debt issuances. The Credit Agreement was modified through an amendment dated June 15, 2023, which changed the reference rate from the Adjusted London Interbank Offered Rate (“LIBOR”) to Term Secured Overnight Financing Rate (“Term SOFR”) (as defined in the Credit Agreement).
2024-C Term Loan Facility
On September 29, 2023, the Company amended its Credit Agreement pursuant to a joinder agreement to provide for an incremental senior secured first lien term loan facility aggregating $1,420,000 maturing on September 29, 2030 (the “2023 Term Loan Facility”), consisting of a first funding of $820,000 on September 29, 2023 and a second funding of $600,000 on November 21, 2023. The 2023 Term Loan Facility was issued at a 0.25% discount.
12
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
During 2024, the Company amended the existing Credit Agreement pursuant to joinder agreements dated May 30, 2024, and December 23, 2024. These amendments established a new senior secured first lien term loan facility (the “2024-C Term Loan Facility”) to refinance the outstanding balance of the 2023 Term Loan Facility.
The 2024-C Term Loan Facility bears interest at an annual rate equal to the Term SOFR rate plus a margin of 2.25%. The 2024-C Term Loan Facility amortizes in quarterly installments in an amount equal to 0.25% of the principal amount with a final balloon payment due at maturity in an amount equal to the remaining principal amount of the loan outstanding on that date. The interest rate on the 2024-C Term Loan Facility was 5.98% at June 30, 2026.
2024-D Term Loan Facility
On November 22, 2022, the Company amended its Credit Agreement pursuant to a joinder agreement to provide for an incremental senior secured first lien term loan facility in an aggregate amount equal to $2,500,000 maturing on November 21, 2029 (the “2022 Term Loan Facility”).
During 2023 and 2024, the Company amended the existing Credit Agreement pursuant to joinder agreements dated December 20, 2023, June 21, 2024, and December 23, 2024. These amendments established a new senior secured first lien term loan facility (the “2024-D Term Loan Facility”) to refinance the outstanding balance of the 2022 Term Loan Facility.
The 2024-D Term Loan Facility bears interest at an annual rate equal to the Term SOFR rate plus a margin of 2.25%. The 2024-D Term Loan Facility amortizes in quarterly installments in an amount equal to 0.25% of the principal amount with a final balloon payment due at maturity in an amount equal to the remaining principal amount of the loan outstanding on that date. The interest rate on the 2024-D Term Loan Facility was 5.98% at June 30, 2026.
Revolving Credit Facility
The Credit Agreement, as amended in July 2021, May 2024, and December 2024, provides a revolving credit line of $400,000 maturing on December 21, 2029, subject to a springing maturity date of August 22, 2029 if an aggregate principal amount of more than $500,000 of the 2024-D Term Loan Facility is outstanding as of such date (the “Revolving Credit Facility”). The Revolving Credit Facility includes sub-limits for letters of credit and swing-line sub-facilities.
The Revolving Credit Facility bears interest at an annual rate equal to the Term SOFR rate, subject to a floor of 0.00%, plus an applicable margin ranging between 1.75% and 2.25%. The applicable margin is determined depending on certain first lien secured debt ratios as defined in the Credit Agreement. The Company also pays a commitment fee on the unused portion of the Revolving Credit Facility and certain fees for letters of credit issued. At June 30, 2026, the Company had no outstanding balance under the Revolving Credit Facility. At June 30, 2026, the Company had two letters of credit issued and outstanding totaling $1,110 under the Revolving Credit Facility.
The Revolving Credit Facility contains financial covenant requirements to be tested quarterly only if the sum of (a) the aggregate principal amount of all Revolving Credit Loans and Swingline Loans plus (b) the aggregate Letter of Credit Obligations (other than (i) Cash Collateralized Letters of Credit and (ii) Letters of Credit, the aggregate Stated Amount of which do not exceed $20,000), exceeds 35.0% of the amount of the Total Revolving Credit Commitment (“Revolver”) (which is currently an amount equal to $140,000). If the financial covenant is in effect, as of the last day of any fiscal quarter for which the financial covenant is in effect, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio may not exceed 8.00:1.00. At June 30, 2026, the Company was in compliance with these covenants.
2023 Senior Notes
On December 29, 2023, USI issued $620,000 aggregate principal amount of Notes (the “2023 Senior Notes”) under an Indenture (the “Indenture”). The 2023 Senior Notes are fully and unconditionally guaranteed by each of the Company’s wholly owned domestic restricted subsidiaries that is a guarantor under the senior secured Credit Agreement. The 2023 Senior Notes are effectively subordinated to all USI’s secured obligations and rank senior in right of payment to all existing and future subordinated indebtedness of USI. The proceeds from the 2023 Senior Notes were used to redeem the Company’s $615,000 aggregate principal amount of 6.875% senior notes issued in April 2017 due May 1, 2025 (the “2017 Senior Notes”).
The 2023 Senior Notes will mature in 2032 and bear interest at a rate of 7.50% per annum, payable semiannually in arrears on January 15 and July 15 of each year, which began on July 15, 2024. The Company may redeem the 2023 Senior Notes at its option, in whole or in part, at a redemption price equal to 103.75% of the principal amount commencing 2027, 101.88% of the principal amount commencing 2028, and 100% of the principal amount commencing 2029, plus accrued and unpaid interest up to, but excluding the redemption date.
13
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
The Indenture contains covenants that, among other things, limit the Company’s ability to create liens on assets and restrict the Company’s ability to consolidate, merge or sell its assets. The Indenture also provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the Indenture and certain events of bankruptcy and insolvency. The Company was in compliance with these covenants at June 30, 2026.
Interest Rate Swap
The Company was a party to an interest rate swap agreement covering a notional amount of $700,000 of its floating rate debt that effectively converted the interest rate exposure from a 90-day Term SOFR rate to a fixed rate of 3.63% subject to a 0.50% floor through the maturity date of March 31, 2026. During 2026 through the maturity date of March 31, 2026, the Company recognized a gain of $1, consisting of a realized gain of $73 and an unrealized loss of $72, in Interest expense in the Consolidated Statement of Operations.
Interest Rate Collar
In March 2025, the Company entered into an interest rate collar agreement covering a notional amount of $525,000 with an interest rate cap of 4.79% and a floor of 3.00% (subject to a 0.50% minimum floor), with a maturity date of March 31, 2029.
In March 2026, the Company entered into an interest rate collar agreement covering a notional amount of $475,000 with an interest rate cap of 4.80% and a floor of 2.81%, with a maturity date of March 31, 2030.
For the six months ended June 30, 2026, the Company recognized an unrealized gain of $3,161 in Interest expense in the Consolidated Statement of Operations. At June 30, 2026 the Company had a current derivative asset of $153 in Other current assets and a non-current derivative asset of $774 in Other assets on the Consolidated Balance Sheet.
| 9. | Leases |
All of the Company’s operating lease right-of-use assets and operating lease liabilities represent real estate leases for office space used to conduct the Company’s business.
Lease costs for operating leases consists of the lease payments, inclusive of lease incentives, and are recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease costs are included in Other operating expenses in the Consolidated Statement of Operations.
The following table represents components of lease cost for operating leases:
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Lease cost |
$ | 19,270 | ||
| Variable lease cost |
5,554 | |||
| Short-term lease cost |
1,821 | |||
| Lease impairments & adjustments |
700 | |||
|
|
|
|||
| Operating lease cost |
27,345 | |||
| Sublease income |
(1,211 | ) | ||
|
|
|
|||
| Total lease cost, net |
$ | 26,134 | ||
|
|
|
|||
| Supplemental cash flow information related to leases: |
||||
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Cash paid for amounts included in the measurement of lease liabilities: |
||||
| Operating cash flows from operating leases |
$ | 21,467 | ||
| Right-of-use assets obtained in exchange for operating leases liabilities |
7,779 | |||
14
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
Supplemental balance sheet information related to leases was as follows:
| June 30, 2026 | ||||
| Assets: |
||||
| Operating lease right-of-use assets |
$ | 115,391 | ||
|
|
|
|||
| Total assets |
$ | 115,391 | ||
|
|
|
|||
| Liabilities: |
||||
| Accrued expenses - current portion of operating lease liabilities |
$ | 32,664 | ||
| Long-term operating lease liabilities |
98,482 | |||
|
|
|
|||
| Total liabilities |
$ | 131,146 | ||
|
|
|
|||
| Weighted average remaining lease term in years - operating leases |
4.3 years | |||
| Weighted average discount rate - operating leases |
3.02 | % | ||
The maturity analysis of the lease liabilities by fiscal year at June 30, 2026 for the Company’s operating leases are as follows:
| Year |
Amounts | |||
| 2026 (Remainder) |
$ | 16,765 | ||
| 2027 |
38,070 | |||
| 2028 |
29,994 | |||
| 2029 |
22,624 | |||
| 2030 |
17,353 | |||
| Thereafter |
16,370 | |||
|
|
|
|||
| Total undiscounted future lease payments |
141,176 | |||
| Less: Imputed interest |
(10,030 | ) | ||
|
|
|
|||
| Present value of lease payments |
$ | 131,146 | ||
|
|
|
|||
As of June 30, 2026, there were leases that have not yet commenced that have been signed by the Company with future lease commitments totaling $23,321.
| 10. | Stockholder’s Equity |
At June 30, 2026, the authorized capital stock under the Company’s Amended and Restated Certificate of Incorporation was 1,000 shares, all of which were voting common stock, par value $0.01 per share, of which 100 shares were outstanding.
At June 30, 2026, the authorized capital stock under the Parent’s Amended and Restated Certificate of Incorporation was 500,000,000 shares, with a par value of $0.01 per share. At June 30, 2026, 204,914,352 of the Parent’s shares were outstanding, which included 203,795,727 of common shares and 1,118,625 of unvested restricted shares.
At June 30, 2026, the estimated fair value of the Parent’s common stock was $43.00 per share. The estimated fair value analysis, which includes assumptions such as projected earnings, market multiples, and peer comparison, was prepared by management.
On May 6, 2022, the Company launched the U Exchange program (“U Exchange”) which is designed to (i) provide active and retired employee shareholders of the Parent with liquidity opportunities to have a portion of their shares repurchased by the Parent; and (ii) provide eligible employees, primarily accredited investors, an opportunity to purchase initial or additional shares of the Parent. The U Exchange program is expected to be an annual buy/sell program with the primary exchange window opening in the second quarter each year. The U Exchange program has minimum and maximum limits and is subject to annual approval by the USI Advantage Corp.’s Board of Directors (“Board”). During 2026, the Board approved purchase only windows quarterly. Net buybacks during the open period in 2026 totaled $35,490.
On May 6, 2022, the Company announced the U Direct program (“U Direct”), which is designed to provide existing U.S.-based employee shareholders of the Parent with an alternative liquidity option in the form of a loan. Loans will be on a recourse basis, secured by the shares of the Parent’s common stock owned by the employee borrower, beneficially or otherwise. The borrower will also have personal liability for the repayment. The U Direct program excludes all stock options (whether vested or unvested) and unvested restricted shares. If an employee borrower defaults on any payment obligations, the Company may call the loan and repurchase the
15
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
necessary shares at the current fair value to satisfy the principal amount plus accrued interest. Interest rates will be set by the Company at a level that will cover the Company’s cost of borrowing. Loans feature bi-weekly interest-only payments with a balloon payment due at maturity. Loans will be repayable on the earlier of the 5th anniversary of the loan date or 90 days after the employee borrower’s termination of employment. Employee borrowers may repay the loan at any time without a prepayment penalty. The Company anticipates U Direct will be an annual program with the window opening in the third quarter each year. Separately, the Company has issued a limited number of loans on similar terms, with interest deferred until maturity. The current interest rate is 6.23%. As of June 30, 2026, the total outstanding loan balances were $37,088, and interest receivable was $607. These balances are included in Other assets in the Consolidated Balance Sheet. Total interest income recognized was $1,290 for the six months ended June 30, 2026 and is included in Other income on the Consolidated Statement of Operations.
The Sponsors and certain other investors have entered into a Stockholders Agreement, dated May 16, 2017, as amended, which contains agreements among the parties with respect to, among other things, governance rights, restrictions on the transfer of shares held by the Sponsors and certain registration rights with respect to such shares.
KKR, La Caisse and certain members of the Company’s management who have invested in the Parent (the “Management Stockholders”), have entered into a Management Stockholders’ Agreement, dated May 16, 2017, which contains agreements among the parties with respect to, among other things, restrictions on the transfer of shares held by the Management Stockholders and certain registration rights with respect to such shares.
Dividends and Dividend Equivalents
In February and May 2026, the Board approved a quarterly cash dividend and cash dividend equivalent of $0.50 per share. The Board also approved a Dividend Reinvestment Plan (the “DRIP”) which allows eligible employee shareholders and certain of their affiliates to reinvest cash dividends. The declaration and payment of future quarterly dividends remain at the discretion of the Board and may be adjusted as business needs or market conditions change.
The Parent’s restricted shares are entitled to dividend rights of common shares except that dividends for restricted shares shall be withheld until such time as the restricted shares vest. Stock options are entitled to dividend equivalents in the amount equal to dividends declared on common shares, which are payable if, and only to the extent the underlying option vests.
The Company made dividend and dividend equivalent payments totaling $211,466, with $9,582 reinvested under the DRIP. At June 30, 2026, the Company had current dividend and dividend equivalent payables of $1,098 in Other current liabilities and non-current dividend and dividend equivalent payables of $8,214 in Other liabilities on the Consolidated Balance Sheet.
On August 5, 2026, the Board declared (i) an ordinary cash dividend of $0.50 per share on all issued and outstanding shares of common and restricted stock to shareholders of record as of the close of business on August 6, 2026 (the “Dividend Record Date”) and (ii) a cash dividend equivalent of $0.50 per options outstanding on the Dividend Record Date. The cash dividend and cash dividend equivalent is payable on or about August 21, 2026, except that the cash dividend on unvested restricted shares and the cash dividend equivalent on unvested stock options will each be payable promptly following vesting.
| 11. | Stock-Based Compensation |
Restricted Shares
The Company offers restricted shares of common stock of the Parent to sales professionals and certain employees to enable the Company to obtain and retain the services of these individuals (the “Peak Program”). Eligibility criteria for these awards are established annually. Shares cliff vest after a period of five years and there is a qualified retirement provision that allows the shares granted to continue to vest after retirement. The service period for which the expense is recognized is from grant date to issuance date. At June 30, 2026, the shares outstanding under the Peak Program were 784,001.
Included within the Peak Program, the Company offers restricted shares to eligible new sales professionals. Shares cliff vest after a period of five years and there is no qualified retirement provision associated with these shares. The service period for which the expense is recognized is from grant date to vesting date. As of June 30, 2026, the shares outstanding under the Peak Program to eligible new sales professionals were 169,185.
On June 9, 2022, the Company announced a share program for non-sales employees tied to annual awards for performance (the “Summit Share Program”). The Company has an annual USI Summit Awards program, which recognizes select non-producer employees for exceptional client service. Under the Summit Share Program, employees are granted restricted shares of common stock of the Parent
16
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
for winning a USI Summit Award three times, five times and ten times. Shares cliff vest after a period of five years and there is a qualified retirement provision that allows the shares granted to continue to vest after retirement. The service period for which the expense is recognized is from grant date to issuance date. At June 30, 2026, the shares outstanding under the Summit Share Program were 165,439.
The total expense recorded for restricted shares was $4,030 for the six months ended June 30, 2026.
Stock Options
At June 30, 2026, the maximum number of options authorized for issuance under the Equity Incentive Plan (“Plan”) was approximately 31,900,000. At June 30, 2026, options outstanding under the plan were 24,206,223 of which 8,400,206 were unvested. Options vest over a five-year period with a combination of cliff vesting and graded vesting provisions. The options range in strike price from $10.00 to $43.00. Compensation expense is being recognized for all options on a straight-line basis over the estimated service period. The total expense recorded for option awards was $8,101 for the six months ended June 30, 2026. The unrecognized expense for options outstanding at June 30, 2026 was $47,376.
| 12. | Income Taxes |
The Company historically applies an estimated annual effective tax rate to calculate its interim income tax provision. For the six months ended June 30, 2026, the Company calculated its income tax provision based on the year-to-date actual effective tax rate due to the presence of significant discrete items.
The consolidated effective federal and state tax rate was 197.5% for the six months ended June 30, 2026. The Company’s effective rate is higher than the federal statutory rate of 21.0% primarily due to the tax effect of a valuation allowance recorded against deferred tax assets and other discrete items. The Consolidated Balance Sheet at June 30, 2026 include federal and state income taxes payable of $0, in Other current liabilities. The Consolidated Balance Sheet at June 30, 2026 include net tax prepayments of $16,184 in Other current assets.
| 13. | Commitments and Contingencies |
Legal Matters
The Company is subject to various claims, lawsuits and proceedings that arise in the normal course of business. These matters principally consist of alleged errors and omissions in connection with the placement of insurance and rendering administrative or consulting services and are generally covered in whole or in part by insurance. The Company does not believe it is a party to any claims, lawsuits or legal proceedings that will have a material adverse effect on its consolidated financial condition and results of operations. Where it is determined, in consultation with internal and external counsel that are handling the Company’s defense in these matters and based upon a combination of litigation and settlement strategies, that a loss is probable and estimable in a given matter, the Company establishes an accrual. In all pending litigation matters, the Company believes it has accrued adequate reserves. The Company continuously monitors any proceedings as they develop and adjusts its accruals and disclosures as needed.
| 14. | Segment Information |
The Company has identified two reportable segments: Retail and Specialty.
The Retail segment offers property and casualty insurance, group health, life and disability insurance. The Retail segment generates revenues through commissions paid by insurance underwriters and through fees charged to its clients. The Company’s brokers, agents and administrators act as intermediaries between insurers and their customers, and the Company does not assume underwriting risks.
The Specialty segment offers programs, wholesale, associations, retirement products and consulting services and employee benefit wholesale products. Revenues are generated through commissions paid by insurance underwriters and through fees paid by clients on a negotiated per-claim or per-service fee basis.
Corporate includes expenses related to corporate management, human resources, legal, capital planning, information technology and finance that are not included in assessing segment performance but are included in reported consolidated results. Corporate also holds the Company’s debt. The information presented below shows the results of operations for the two reportable segments and Corporate as a reconciliation to consolidated amounts.
17
USI, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
(Unaudited)
The Company’s Chief Executive Officer, as the Company’s Chief Operating Decision Maker, regularly evaluates segment performance and makes resource allocation decisions based on segment revenue and operating margin.
| Six Months Ended June 30, 2026 | ||||||||||||||||
| Revenues: | Retail | Specialty | Corporate | Total | ||||||||||||
| Net commissions and fees |
$ | 1,073,768 | $ | 263,658 | $ | — | $ | 1,337,426 | ||||||||
| Contingents and supplementals |
141,091 | 9,315 | — | 150,406 | ||||||||||||
| Other income |
19,127 | 1,821 | 20,154 | 41,102 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
1,233,986 | 274,794 | 20,154 | 1,528,934 | ||||||||||||
| Expenses (income): |
||||||||||||||||
| Compensation and employee benefits |
787,395 | 174,354 | 39,788 | 1,001,537 | ||||||||||||
| Acquisition-related retention and buydown bonuses |
2,893 | 238 | 5 | 3,136 | ||||||||||||
| Stock-based compensation |
8,580 | 710 | 2,841 | 12,131 | ||||||||||||
| Other operating expenses |
105,760 | 28,089 | 16,423 | 150,272 | ||||||||||||
| Amortization of intangible assets |
145,799 | 39,978 | — | 185,777 | ||||||||||||
| Depreciation |
12,034 | 3,689 | 424 | 16,147 | ||||||||||||
| Earnout adjustments and accretion of discount |
496 | 692 | — | 1,188 | ||||||||||||
| Interest expense |
— | — | 142,751 | 142,751 | ||||||||||||
| Other non-operating (income) expense |
(750 | ) | (948 | ) | 1,317 | (381 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
1,062,207 | 246,802 | 203,549 | 1,512,558 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) before income taxes |
$ | 171,779 | $ | 27,992 | $ | (183,395 | ) | $ | 16,376 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets at June 30, 2026 |
$ | 5,314,778 | $ | 1,459,426 | $ | 482,044 | $ | 7,256,248 | ||||||||
| 15. | Subsequent Events |
The Company has evaluated all events subsequent to June 30, 2026, through August 21, 2026, the date the Company’s Consolidated Financial Statements were reissued. There were no subsequent events requiring recognition or disclosure in the financial statements, other than those already disclosed.
18
Exhibit 99.3
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On August 30, 2026, Aon plc, an Irish public limited company (the “Company” or “Aon”), Aon North America, Inc., a Delaware corporation and an indirect, wholly owned subsidiary of the Company (“Acquirer”), and Cortlandt Acquisition Corp., a Delaware corporation and a direct, wholly owned subsidiary of Acquirer (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with USI Advantage Corp., a Delaware corporation (“USI Advantage”), and Uno Aggregator II L.P., pursuant to which Acquirer will acquire USI Advantage (the “Acquisition”) via merger whereby Merger Sub will merge with and into USI Advantage (the “Merger”), with USI Advantage continuing as the surviving corporation of the Merger and a wholly owned subsidiary of Aon. USI Advantage, through its sole direct wholly owned subsidiary, USI Guarantor, Inc. (“USI Guarantor”) is the indirect parent of USI, Inc. and subsidiaries (“USI”). USI Advantage and USI Guarantor do not have material assets, other than the stock of their subsidiaries, and USI Advantage and USI Guarantor conduct all operations through USI. The unaudited pro forma combined financial information describes the Acquisition structure as of the date of this filing. Pursuant to the Merger Agreement, Acquirer may assign its rights and obligations thereunder to any direct or indirectly wholly owned subsidiary of Acquirer without consent so long as Acquirer continues to remain liable for all such rights and obligations to the extent not discharged by such subsidiary.
The unaudited pro forma combined financial information presents the combination of the historical consolidated financial statements of Aon and USI and is intended to provide information about how the Acquisition and the related Financing (as defined in Note 1–Description of the Acquisition, Financing and Basis of Presentation) may have affected Aon’s historical consolidated statements of income for the six months ended June 30, 2026 and the year ended December 31, 2025 and Aon’s historical consolidated statement of financial position as of June 30, 2026. The following unaudited pro forma combined statement of financial position as of June 30, 2026 gives effect to the Acquisition and the related Financing as if they had been completed on June 30, 2026, and the unaudited pro forma combined statements of income for the six months ended June 30, 2026 and the year ended December 31, 2025 give effect to the Acquisition and the related Financing as if they had been completed on January 1, 2025.
The unaudited pro forma combined financial information has been prepared by Aon in accordance with Article 11 of Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and should be read in conjunction with the accompanying notes to the unaudited pro forma combined financial information. The unaudited pro forma combined financial information has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that the combined company would have realized had the Acquisition and the related Financing been completed on the dates indicated, nor is it meant to be indicative of any anticipated or future financial position or results of operations that the combined company will experience following closing of the Acquisition and the related Financing. The pro forma adjustments are estimates based upon available information and certain assumptions that Aon management believes are reasonable under the circumstances, which are described in the accompanying notes to the unaudited pro forma combined financial information. Actual results may differ materially from these estimates.
In addition, the unaudited pro forma combined statements of income do not include any cost savings, operating synergies, or revenue enhancements that may be realized subsequent to closing of the Acquisition, the costs to integrate the operations of Aon and USI, or the costs necessary to achieve these cost savings, operating synergies, and revenue enhancements. The unaudited pro forma combined statements of income do, however, give effect to the anticipated costs to be incurred by Aon to effectuate the Acquisition and the related Financing that had not yet been recorded as of the date of the unaudited pro forma combined statement of financial position. See Note 5–Pro Forma Acquisition Accounting Adjustments, for further details.
The unaudited pro forma combined statement of financial position as of June 30, 2026 and unaudited pro forma combined statements of income for the six months ended June 30, 2026 and for the year ended December 31, 2025 are based on, have been derived from and should be read in conjunction with:
| • | Audited consolidated financial statements and accompanying notes of Aon as of and for the year ended December 31, 2025 (as contained in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 13, 2026); |
| • | Unaudited condensed consolidated financial statements and accompanying notes of Aon as of and for the six months ended June 30, 2026 (as contained in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 filed with the SEC on July 29, 2026); and |
| • | Audited consolidated financial statements and accompanying notes of USI as of and for the year ended December 31, 2025 and unaudited consolidated financial statements and accompanying notes of USI as of and for the six months ended June 30, 2026, which are filed with and incorporated by reference into this Current Report on Form 8-K. |
Because USI presents its historical financial statements in thousands, some amounts in the unaudited pro forma combined financial information may not match USI’s historical financial statements due to rounding.
Page 1
Aon plc Unaudited Pro Forma Combined Statement of Income
Six Months Ended June 30, 2026
| Pro Forma Adjustments | ||||||||||||||||||||||||
| (millions, except per share data) |
Aon plc Historical |
USI Historical, as Reclassified (Note 3) |
Acquisition Accounting Adjustments (Note 5) |
Financing Adjustments (Note 6) |
Pro Forma Combined |
|||||||||||||||||||
| Revenue |
||||||||||||||||||||||||
| Total revenue |
$ | 9,280 | $ | 1,501 | $ | — | $ | — | $ | 10,781 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Expenses |
||||||||||||||||||||||||
| Compensation and benefits |
4,664 | 1,013 | 65 | (a) | — | 5,742 | ||||||||||||||||||
| Information technology |
306 | 40 | — | — | 346 | |||||||||||||||||||
| Premises |
166 | 27 | — | — | 193 | |||||||||||||||||||
| Depreciation of fixed assets |
95 | 16 | (6 | ) | (b) | — | 105 | |||||||||||||||||
| Amortization and impairment of intangible assets |
326 | 186 | 290 | (b) | — | 802 | ||||||||||||||||||
| Other general expense |
905 | 86 | — | — | 991 | |||||||||||||||||||
| Accelerating Aon United Program expenses |
188 | — | — | — | 188 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total operating expenses |
6,650 | 1,368 | 349 | — | 8,367 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Operating income |
2,630 | 133 | (349 | ) | — | 2,414 | ||||||||||||||||||
| Interest income |
17 | 4 | — | — | 21 | |||||||||||||||||||
| Interest expense |
(358 | ) | (143 | ) | 143 | (d) | (502 | ) | (a) | (860 | ) | |||||||||||||
| Other income (expense) |
(12 | ) | 22 | — | — | 10 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Income before income taxes |
2,277 | 16 | (206 | ) | (502 | ) | 1,585 | |||||||||||||||||
| Income tax expense |
473 | 32 | (54 | ) | (f) | (132 | ) | (b) | 319 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income (loss) |
1,804 | (16 | ) | (152 | ) | (370 | ) | 1,266 | ||||||||||||||||
| Less: Net income attributable to redeemable and nonredeemable noncontrolling interests |
41 | — | — | — | 41 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income (loss) attributable to Aon shareholders |
$ | 1,763 | $ | (16 | ) | $ | (152 | ) | $ | (370 | ) | $ | 1,225 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Basic net income per share attributable to Aon shareholders |
$ | 8.25 | $ | — | $ | 5.73 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Diluted net income per share attributable to Aon shareholders |
$ | 8.22 | $ | — | $ | 5.70 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Weighted average ordinary shares outstanding—basic |
213.8 | — | 213.8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Weighted average ordinary shares outstanding—diluted |
214.6 | — | 214.8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
See accompanying notes to the unaudited pro forma combined financial information.
Page 2
Aon plc Unaudited Pro Forma Combined Statement of Income
Year Ended December 31, 2025
| Pro Forma Adjustments | ||||||||||||||||||||||||
| (millions, except per share data) |
Aon plc Historical |
USI Historical, as Reclassified (Note 3) |
Acquisition Accounting Adjustments (Note 5) |
Financing Adjustments (Note 6) |
Pro Forma Combined |
|||||||||||||||||||
| Revenue |
||||||||||||||||||||||||
| Total revenue |
$ | 17,181 | $ | 2,916 | $ | — | $ | — | $ | 20,097 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Expenses |
||||||||||||||||||||||||
| Compensation and benefits |
8,985 | 1,919 | 240 | (a) | — | 11,144 | ||||||||||||||||||
| Information technology |
568 | 73 | — | — | 641 | |||||||||||||||||||
| Premises |
337 | 55 | — | — | 392 | |||||||||||||||||||
| Depreciation of fixed assets |
188 | 34 | (12 | ) | (b) | — | 210 | |||||||||||||||||
| Amortization and impairment of intangible assets |
778 | 375 | 687 | (b) | — | 1,840 | ||||||||||||||||||
| Other general expense |
1,616 | 156 | 137 | (c) | — | 1,909 | ||||||||||||||||||
| Accelerating Aon United Program expenses |
365 | — | — | — | 365 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total operating expenses |
12,837 | 2,612 | 1,052 | — | 16,501 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Operating income |
4,344 | 304 | (1,052 | ) | — | 3,596 | ||||||||||||||||||
| Interest income |
19 | 15 | — | — | 34 | |||||||||||||||||||
| Interest expense |
(815 | ) | (319 | ) | 319 | (d) | (1,004 | ) | (a) | (1,819 | ) | |||||||||||||
| Other income (expense) |
1,211 | 68 | (29 | ) | (e) | — | 1,250 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Income before income taxes |
4,759 | 68 | (762 | ) | (1,004 | ) | 3,061 | |||||||||||||||||
| Income tax expense |
1,009 | 7 | (188 | ) | (f) | (264 | ) | (b) | 564 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income (loss) |
3,750 | 61 | (574 | ) | (740 | ) | 2,497 | |||||||||||||||||
| Less: Net income attributable to redeemable and nonredeemable noncontrolling interests |
55 | — | — | — | 55 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income (loss) attributable to Aon shareholders |
$ | 3,695 | $ | 61 | $ | (574 | ) | $ | (740 | ) | $ | 2,442 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Basic net income per share attributable to Aon shareholders |
$ | 17.11 | $ | — | $ | 11.31 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Diluted net income per share attributable to Aon shareholders |
$ | 17.02 | $ | — | $ | 11.24 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Weighted average ordinary shares outstanding—basic |
215.9 | — | 215.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Weighted average ordinary shares outstanding—diluted |
217.1 | — | 217.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
See accompanying notes to the unaudited pro forma combined financial information.
Page 3
Aon plc Unaudited Pro Forma Combined Statement of Financial Position
June 30, 2026
| Pro Forma Adjustments | ||||||||||||||||||||||||
| (millions, except nominal value) |
Aon plc Historical |
USI Historical, as Reclassified (Note 3) |
Acquisition Accounting Adjustments (Note 5) |
Financing Adjustments (Note 6) |
Pro Forma Combined |
|||||||||||||||||||
| Assets |
||||||||||||||||||||||||
| Current assets |
||||||||||||||||||||||||
| Cash and cash equivalents |
$ | 1,062 | $ | 221 | $ | (17,172 | ) | (g), (h) | $ | 17,368 | (c) | $ | 1,479 | |||||||||||
| Short-term investments |
205 | — | — | — | 205 | |||||||||||||||||||
| Receivables, net |
5,348 | 509 | — | — | 5,857 | |||||||||||||||||||
| Fiduciary assets |
20,698 | 1,125 | — | — | 21,823 | |||||||||||||||||||
| Other current assets |
801 | 47 | — | — | 848 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total current assets |
28,114 | 1,902 | (17,172 | ) | 17,368 | 30,212 | ||||||||||||||||||
| Goodwill |
15,884 | 3,755 | 7,375 | (i) | — | 27,014 | ||||||||||||||||||
| Intangible assets, net |
5,657 | 962 | 6,517 | (j) | — | 13,136 | ||||||||||||||||||
| Fixed assets, net |
761 | 65 | (19 | ) | (j) | — | 807 | |||||||||||||||||
| Operating lease right-of-use assets |
750 | 115 | — | — | 865 | |||||||||||||||||||
| Deferred tax assets |
770 | — | (128 | ) | (k) | — | 642 | |||||||||||||||||
| Prepaid pension |
596 | — | — | — | 596 | |||||||||||||||||||
| Other non-current assets |
815 | 464 | (294 | ) | (l), (m), (n) |
— | 985 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total assets |
$ | 53,347 | $ | 7,263 | $ | (3,721 | ) | $ | 17,368 | $ | 74,257 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Liabilities, redeemable noncontrolling interests, and equity |
||||||||||||||||||||||||
| Liabilities |
||||||||||||||||||||||||
| Current liabilities |
||||||||||||||||||||||||
| Accounts payable and accrued liabilities |
$ | 2,266 | $ | 317 | $ | — | $ | — | $ | 2,583 | ||||||||||||||
| Short-term debt and current portion of long-term debt |
2,020 | 31 | (31 | ) | (g) | — | 2,020 | |||||||||||||||||
| Fiduciary liabilities |
20,698 | 1,125 | — | — | 21,823 | |||||||||||||||||||
| Other current liabilities |
2,242 | 195 | 209 | (n), (o) | — | 2,646 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total current liabilities |
27,226 | 1,668 | 178 | — | 29,072 | |||||||||||||||||||
| Long-term debt |
12,947 | 4,310 | (4,310 | ) | (g), (n) | 17,368 | (c) | 30,315 | ||||||||||||||||
| Non-current operating lease liabilities |
730 | 98 | — | — | 828 | |||||||||||||||||||
| Deferred tax liabilities |
342 | — | 1,329 | (k) | — | 1,671 | ||||||||||||||||||
| Pension, other postretirement, and postemployment liabilities |
1,002 | 301 | — | — | 1,303 | |||||||||||||||||||
| Other non-current liabilities |
1,390 | 54 | — | — | 1,444 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total liabilities |
43,637 | 6,431 | (2,803 | ) | 17,368 | 64,633 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Redeemable noncontrolling interests |
24 | — | — | — | 24 | |||||||||||||||||||
| Equity (deficit) |
||||||||||||||||||||||||
| Ordinary shares—$0.01 nominal value Authorized: 500.0 shares (issued: at June 30, 2026—212.0) |
2 | — | — | — | 2 | |||||||||||||||||||
| Additional paid-in capital |
13,500 | 1,351 | (1,291 | ) | (g), (p) | — | 13,560 | |||||||||||||||||
| Retained earnings (Accumulated deficit) |
82 | (519 | ) | 373 | (g), (h), (k), (p) |
— | (64 | ) | ||||||||||||||||
| Accumulated other comprehensive loss |
(3,986 | ) | — | — | — | (3,986 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Aon shareholders’ equity |
9,598 | 832 | (918 | ) | — | 9,512 | ||||||||||||||||||
| Nonredeemable noncontrolling interests |
88 | — | — | — | 88 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total equity |
9,686 | 832 | (918 | ) | — | 9,600 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total liabilities, redeemable noncontrolling interests, and equity |
$ | 53,347 | $ | 7,263 | $ | (3,721 | ) | $ | 17,368 | $ | 74,257 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
See accompanying notes to the unaudited pro forma combined financial information.
Page 4
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Note 1–Description of the Acquisition, Financing and Basis of Presentation
Description of the Acquisition
On August 30, 2026, Aon, Acquirer, and Merger Sub entered into the Merger Agreement pursuant to which Acquirer will acquire USI Advantage via the Merger and Acquirer will make a cash payment of $17.0 billion (the “Cash Payment”), a portion of which will be used to repay certain indebtedness of USI outstanding at closing of the Acquisition (the “USI Indebtedness” and the cash used to repay such indebtedness, the “Cash to Repay USI Indebtedness”), and the remaining portion of which will be paid as consideration (the “Merger Consideration”). In addition to the Cash Payment, Aon will also pay cash and issue equity awards to replace certain USI Advantage historical equity compensation awards, which are further described below. The closing of the Acquisition is subject to customary closing conditions, including the receipt of applicable regulatory approvals, and is not subject to a financing condition. As of the date of this filing, the Acquisition has not been consummated.
USI Advantage historically granted both options (“USI Option Awards”) and restricted stock (“USI RSA Awards”) to employees under the USI Stock Plan. Pursuant to the historical terms of the USI Option Awards, all unvested and outstanding USI Option Awards fully vest upon the closing of the Acquisition with the exception of certain individuals for which Aon has entered into a Rollover Agreement, as further described below. Upon closing of the Acquisition, each vested and outstanding USI Option Award will convert into the right to receive an amount of cash equal to the product of (A) the excess (if any) of (x) the per share Merger Consideration minus (y) the applicable exercise price of USI Advantage common stock issuable under such USI Option Awards, multiplied by (B) the number of shares of USI Advantage common stock subject to such USI Option Award. Aon executed Rollover Agreements with certain USI Advantage employees whereby certain vested and outstanding USI Option Awards held by such employees will be substituted with an award of Aon restricted shares covering a whole number of Aon Class A ordinary shares (each, a “Substituted Option Award”) at the closing of the Acquisition. Each Substituted Option Award shall cliff vest after three years from the closing of the Acquisition, contingent on continued service of the employee to Aon.
Upon closing of the Acquisition, pursuant to the terms of the Merger Agreement, all unvested and outstanding USI RSA Awards shall be cancelled and converted into (i) with respect to a pro-rata number of USI RSA Awards based on the number of days elapsed in the applicable vesting period through the closing of the Acquisition (the “Cash-Out RSAs”), the right to receive an amount in cash equal to the product of (A) the per share Merger Consideration, multiplied by (B) the number of Cash-Out RSAs, and (ii) with respect to the remainder of such USI RSA Awards, an award of Aon restricted shares covering a whole number of Aon Class A ordinary shares (each, a “Substituted RSA Award”) equal to the product of (A) the number of shares underlying the remainder of such USI RSA Awards, multiplied by (B) the Company Restricted Stock Exchange Ratio (as defined in the Merger Agreement). Each Substituted RSA Award shall be subject to substantially the same terms and conditions (including vesting terms) as were applicable to the corresponding USI RSA Award.
Description of the Financing
Aon expects to enter into a credit agreement with Citibank, N.A., as administrative agent, and certain financial institutions party thereto, as lenders (the “Term Loan Lenders”), pursuant to which, subject to the terms and conditions set forth therein, including the closing of the Acquisition, the Term Loan Lenders will commit to provide senior unsecured term loan facilities in an aggregate principal amount of up to $4.0 billion (the “Term Loan Facility”, and the Term Loans borrowed thereunder, the “Term Loans”). The Term Loan Facility is expected to consist of (i) a $2.0 billion tranche maturing two years after closing and (ii) a $2.0 billion tranche maturing three years after closing. The proceeds of the Term Loans, together with a portion of the proceeds from the anticipated issuance of senior unsecured notes described below, will be used to fund the cash consideration payable in connection with the Acquisition, including amounts used to repay certain indebtedness of the acquired business, and to pay related fees, premiums and expenses. For purposes of the unaudited pro forma combined financial information, it is assumed that, at closing, the Company will borrow the full $4.0 billion principal amount of the Term Loans at par and that the Term Loans will bear interest at the Secured Overnight Financing Rate (“SOFR”) plus 100 basis points.
Prior to closing the Acquisition, Aon also expects to issue approximately $13.5 billion aggregate principal amount of senior unsecured fixed-rate notes (the “Notes”), expected to be issued across a number of tranches ranging from 3-year to 30-year maturities. For purposes of the unaudited pro forma combined financial information, it is assumed that the Notes will be issued at par and will bear a weighted average coupon rate of 5.92%, with the proceeds used, together with the proceeds of the Term Loans, to fund the Cash Payment, and to pay related fees, premiums and expenses.
Page 5
The Company expects to incur approximately $132 million of aggregate debt issuance costs related to the establishment of the Term Loans and Notes which will be apportioned to the respective instruments, and amortized to Interest expense over their term. The establishment of the Term Loan Facility, the borrowing of the Term Loans and the issuance of the Notes are referred to collectively herein as the “Financing.”
The details of the Financing, including tenor and interest rate of the Notes, and the fees and interest expense the Company will ultimately incur could vary significantly from the foregoing assumptions. Other factors that are subject to change include, but are not limited to, the timing of borrowings and issuance, the amount of cash on hand at the time of closing and inputs to the interest rate determinations.
In addition to the above Financing, Aon plans to modify certain of its existing credit facilities. Such modifications were not contingent on the Acquisition and the potential impacts of such modifications have therefore been excluded from the unaudited pro forma combined financial information.
Basis of Presentation
The unaudited pro forma combined financial information has been prepared by Aon in accordance with Article 11 of Regulation S-X of the Exchange Act. See additional information regarding the presentation in the preamble to the unaudited pro forma combined financial information.
Aon’s and USI’s historical unaudited and audited consolidated financial statements for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively, were prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Certain of USI’s historical amounts have been reclassified to conform to Aon’s financial statement presentation. These adjustments are documented in Note 3–Reclassifications of USI Historical Financial Information. There were no significant transactions and balances between Aon and USI for the six months ended June 30, 2026 nor for the year ended December 31, 2025.
The unaudited pro forma combined financial information was prepared using the acquisition method of accounting, as promulgated by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), based on the historical financial information of Aon and USI with Aon being considered the acquiring company. ASC 805 requires, among other things, that under the acquisition method of accounting, the acquired assets and assumed liabilities be recognized at their acquisition-date fair value, using the fair value concepts as defined in ASC Topic 820, Fair Value Measurement (“ASC 820”) as of the date of closing of the Acquisition. The purchase price allocation and valuation are based on preliminary estimates, subject to final adjustments and provided for informational purposes only.
For purposes of the unaudited pro forma combined financial information, the fair values of USI’s identifiable intangible assets to be acquired are based on preliminary estimates of fair values as of June 30, 2026, and the fair values of USI’s other assets to be acquired and liabilities to be assumed are based on their carrying values as of June 30, 2026. Any excess of the purchase price over the fair values of identified assets to be acquired and liabilities to be assumed will be recognized as goodwill. In estimating fair values, certain market-based assumptions were used which will be updated upon closing of the Acquisition. Aon management believes that the fair values recognized for the assets to be acquired and liabilities to be assumed are based on reasonable estimates and assumptions. Preliminary fair value estimates of assets and liabilities may change as additional information becomes available and such changes could be material. Refer to Note 4–Preliminary Purchase Price Allocation, for additional information.
Aon believes that the assumptions used in the preparation of the unaudited pro forma combined financial information provide a reasonable basis for presenting all of the material effects of the Acquisition and the related Financing and that the pro forma adjustments give appropriate effect to those assumptions that are applied in the unaudited pro forma combined financial information. However, actual results may differ from those reflected in the unaudited pro forma combined financial information.
Note 2–Accounting Policies
As part of preparing the unaudited pro forma combined financial information, Aon conducted a preliminary review of the accounting policies of USI to determine if differences in accounting policies would result in material differences to the unaudited pro forma combined financial information. Based on this initial review, Aon identified certain adjustments that were necessary and quantifiable to conform the accounting policies used to produce USI’s historical financial statements to those of Aon. These adjustments are documented in Note 3–Reclassifications of USI Historical Financial Information and Note 5–Pro Forma Acquisition Accounting Adjustments.
Page 6
Upon closing of the Acquisition, Aon will perform a comprehensive review of USI’s accounting policies. As a result of this review, management may identify differences between the accounting policies of Aon and USI, which when conformed, could have a material impact on the financial statements of the combined company. Furthermore, in an effort to present the unaudited pro forma combined financial information in a manner that the Company believes is clear and most useful, the Company has presented the values contained herein in millions (unless otherwise stated).
Note 3–Reclassifications of USI Historical Financial Information
Reclassification adjustments were made to USI’s consolidated statement of operations for the six months ended June 30, 2026 and the year ended December 31, 2025, and consolidated balance sheet as of June 30, 2026. The classifications of certain statement of operations and balance sheet items presented by USI under GAAP have been adjusted to align with the presentation used by Aon under GAAP. Some amounts may not match the USI historical financial statements due to rounding. The reclassification adjustments are as follows:
Reclassifications included in the unaudited pro forma combined statements of income for the six months ended June 30, 2026
| (millions) | Six Months Ended June 30, 2026 | |||||||||||||||
| Aon Presentation |
USI Presentation |
USI Historical | Reclassification Adjustments |
Notes |
USI Historical, as Reclassified |
|||||||||||
| Revenue |
Revenues: | |||||||||||||||
| Total revenue |
Net commissions and fees | $ | 1,338 | $ | 163 | (a) | $ | 1,501 | ||||||||
| Contingents and supplementals | 150 | (150 | ) | (a) | — | |||||||||||
| Other income | 41 | (41 | ) | (a), (b) (c), (d), (e) | — | |||||||||||
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| Total revenues | 1,529 | (28 | ) | 1,501 | ||||||||||||
| Expenses |
Operating expenses: | |||||||||||||||
| Compensation and benefits |
Compensation and employee benefits | 1,002 | 11 | (f), (g) | 1,013 | |||||||||||
| Stock-based compensation | 12 | (12 | ) | (f) | — | |||||||||||
| Information technology |
— | 40 | (h) | 40 | ||||||||||||
| Premises |
— | 27 | (c), (i) | 27 | ||||||||||||
| Depreciation of fixed assets |
Depreciation | 16 | — | 16 | ||||||||||||
| Amortization and impairment of intangible assets |
Amortization of intangible assets | 186 | — | 186 | ||||||||||||
| Other general expense |
Other operating expenses | 150 | (64 | ) | (d), (g), (h), (i), (j), (k) | 86 | ||||||||||
| Acquisition-related retention and buydown bonuses | 3 | (3 | ) | (j) | — | |||||||||||
| Earnout adjustments and accretion of discount | 1 | (1 | ) | (j) | — | |||||||||||
| Accelerating Aon United Program expenses |
— | — | — | |||||||||||||
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| Total operating expenses |
Total operating expenses | 1,370 | (2 | ) | 1,368 | |||||||||||
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| Operating income |
Operating income | 159 | (26 | ) | 133 | |||||||||||
| Interest income |
— | 4 | (e) | 4 | ||||||||||||
| Interest expense |
Interest expense | (143 | ) | — | (143 | ) | ||||||||||
| Other income (expense) |
Other non-operating income | — | 22 | (b), (k) | 22 | |||||||||||
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| Income before income taxes |
Income before income taxes | 16 | — | 16 | ||||||||||||
| Income tax expense |
Income tax expense | 32 | — | 32 | ||||||||||||
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| Net income (loss) |
Net income (loss) | (16 | ) | — | (16 | ) | ||||||||||
| Less: Net income attributable to redeemable and nonredeemable noncontrolling interests |
— | — | — | |||||||||||||
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| Net income (loss) attributable to Aon shareholders |
$ | (16 | ) | $ | — | $ | (16 | ) | ||||||||
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Page 7
| (a) | Represents reclassification of USI’s Net commissions and fees of $1,338 million, Contingents and supplementals of $150 million, and $13 million from Other income to Aon’s Total revenue to conform to Aon’s historical presentation. Adjustments (b), (c), (d), and (e) reclassify $28 million from Other income to other accounts to align with Aon’s presentation. |
| (b) | Represents a reclassification of $21 million primarily relating to gains on deferred compensation assets from USI’s Other income to Aon’s Other income (expense) to conform to Aon’s presentation. |
| (c) | Represents a reclassification of $1 million of sublease income from USI’s Other income to Aon’s Premises to conform to Aon’s presentation. |
| (d) | Represents a reclassification of $2 million primarily relating to gains on legal settlements from USI’s Other income to Aon’s Other general expense to conform to Aon’s presentation. |
| (e) | Represents a reclassification of interest income earned on operating cash of $4 million from USI’s Other income to Aon’s Interest income to align with Aon’s presentation. |
| (f) | Represents reclassification of USI’s Stock-based compensation of $12 million to Aon’s Compensation and benefits to conform to Aon’s presentation. |
| (g) | Represents a reclassification of $1 million of temporary labor expenses from USI’s Compensation and employee benefits to Other general expense to align with Aon’s presentation. |
| (h) | Represents a reclassification of $40 million primarily relating to software maintenance and IT consulting expenditures from USI’s Other operating expenses to Aon’s Information technology to align with Aon’s presentation. |
| (i) | Represents a reclassification of $28 million of lease expenditures from USI’s Other operating expenses to Aon’s Premises to conform to Aon’s presentation. |
| (j) | Represents reclassification of USI’s Acquisition-related retention and buydown bonuses of $3 million and Earnout adjustments and accretion of discount of $1 million to Aon’s Other general expense to conform to Aon’s presentation. |
| (k) | Represents a reclassification of $1 million of acquisition-related tax obligations and settlements from USI’s Other non-operating income to Aon’s Other general expense to align with Aon’s presentation. The remaining balance of $1 million relates to a gain on a business divestiture and will be presented within Aon’s Other income (expense), consistent with Aon’s presentation. |
Page 8
Reclassifications included in the unaudited pro forma combined statements of income for the year ended December 31, 2025
| (millions) | Year Ended December 31, 2025 | |||||||||||||||
| Aon Presentation |
USI Presentation |
USI Historical | Reclassification Adjustments |
Notes |
USI Historical, as Reclassified |
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| Revenue |
Revenues: | |||||||||||||||
| Total revenue |
Net commissions and fees | $ | 2,628 | $ | 288 | (a) | $ | 2,916 | ||||||||
| Contingents and supplementals | 262 | (262 | ) | (a) | — | |||||||||||
| Other income | 82 | (82 | ) | (a), (b) (c), (d), (e) | — | |||||||||||
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| Total revenues | 2,972 | (56 | ) | 2,916 | ||||||||||||
| Expenses |
Operating expenses: | |||||||||||||||
| Compensation and benefits |
Compensation and employee benefits | 1,896 | 23 | (f), (g) | 1,919 | |||||||||||
| Stock-based compensation | 25 | (25 | ) | (f) | — | |||||||||||
| Information technology |
— | 73 | (h) | 73 | ||||||||||||
| Premises |
— | 55 | (c), (i) | 55 | ||||||||||||
| Depreciation of fixed assets |
Depreciation | 34 | — | 34 | ||||||||||||
| Amortization and impairment of intangible assets |
Amortization of intangible assets | 375 | — | 375 | ||||||||||||
| Other general expense |
Other operating expenses | 289 | (133 | ) | (d), (g), (h), (i), (j), (k) | 156 | ||||||||||
| Acquisition-related retention and buydown bonuses | 10 | (10 | ) | (j) | — | |||||||||||
| Earnout adjustments and accretion of discount | 4 | (4 | ) | (j) | — | |||||||||||
| Accelerating Aon United Program expenses |
— | — | — | |||||||||||||
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| Total operating expenses |
Total operating expenses | 2,633 | (21 | ) | 2,612 | |||||||||||
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| Operating income |
Operating income | 339 | (35 | ) | 304 | |||||||||||
| Interest income |
— | 15 | (e) | 15 | ||||||||||||
| Interest expense |
Interest expense | (319 | ) | — | (319 | ) | ||||||||||
| Other income (expense) |
Other non-operating income | 48 | 20 | (b), (k) | 68 | |||||||||||
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| Income before income taxes |
Income before income taxes | 68 | — | 68 | ||||||||||||
| Income tax expense |
Income tax expense | 7 | — | 7 | ||||||||||||
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| Net income (loss) |
Net income (loss) | 61 | — | 61 | ||||||||||||
| Less: Net income attributable to redeemable and nonredeemable noncontrolling interests |
— | — | — | |||||||||||||
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| Net income (loss) attributable to Aon shareholders |
$ | 61 | $ | — | $ | 61 | ||||||||||
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| (a) | Represents reclassification of USI’s Net commissions and fees of $2,628 million, Contingents and supplementals of $262 million, and $26 million from Other income to Aon’s Total revenue to conform to Aon’s historical presentation. Adjustments (b), (c), (d), and (e) reclassify $56 million from Other income to other accounts to align with Aon’s presentation. |
| (b) | Represents a reclassification of $26 million primarily relating to gains on deferred compensation assets from USI’s Other income to Aon’s Other income (expense) to conform to Aon’s presentation. |
| (c) | Represents a reclassification of $2 million of sublease income from USI’s Other income to Aon’s Premises to conform to Aon’s presentation. |
| (d) | Represents a reclassification of $13 million primarily relating to gains on legal settlements from USI’s Other income to Aon’s Other general expense to conform to Aon’s presentation. |
Page 9
| (e) | Represents a reclassification of interest income earned on operating cash of $15 million from USI’s Other income to Aon’s Interest income to align with Aon’s presentation. |
| (f) | Represents reclassification of USI’s Stock-based compensation of $25 million to Aon’s Compensation and benefits to conform to Aon’s presentation. |
| (g) | Represents a reclassification of $2 million of temporary labor expenses from USI’s Compensation and employee benefits to Aon’s Other general expense to align with Aon’s presentation. |
| (h) | Represents a reclassification of $73 million primarily relating to software maintenance and IT consulting expenditures from USI’s Other operating expenses to Aon’s Information technology to align with Aon’s presentation. |
| (i) | Represents a reclassification of $57 million of lease expenditures from USI’s Other operating expenses to Aon’s Premises to conform to Aon’s presentation. |
| (j) | Represents reclassification of USI’s Acquisition-related retention and buydown bonuses of $10 million and Earnout adjustments and accretion of discount of $4 million to Aon’s Other general expense to conform to Aon’s presentation. |
| (k) | Represents a reclassification of $6 million of acquisition-related tax obligations and settlements from USI’s Other non-operating income to Aon’s Other general expense to align with Aon’s presentation. The remaining balance of $42 million relates to a gain on a business divestiture and employee retention credit, and will be presented within Aon’s Other income (expense), consistent with Aon’s presentation. |
Page 10
Reclassifications included in the unaudited pro forma combined statement of financial position as of June 30, 2026
| (millions) | June 30, 2026 | |||||||||||||||
| Aon Presentation |
USI Presentation |
USI Historical | Reclassification Adjustments |
Notes |
USI Historical, as Reclassified |
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| Assets |
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| Current assets |
Current assets: | |||||||||||||||
| Cash and cash equivalents |
Cash and cash equivalents | $ | 221 | $ | — | $ | 221 | |||||||||
| Short-term investments |
— | — | — | |||||||||||||
| Receivables, net |
Accounts receivable, net of allowance for bad debt | 1,209 | (700 | ) | (a), (b), (c) | 509 | ||||||||||
| Fiduciary assets |
Fiduciary assets | 319 | 806 | (a) | 1,125 | |||||||||||
| Other current assets |
Other current assets | 193 | (146 | ) | (c), (d) | 47 | ||||||||||
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| Total current assets |
Total current assets | 1,942 | (40 | ) | 1,902 | |||||||||||
| Goodwill |
Goodwill | 3,755 | — | 3,755 | ||||||||||||
| Intangible assets, net |
Total identifiable intangible assets, net | 962 | — | 962 | ||||||||||||
| Fixed assets, net |
Property and equipment, net | 65 | — | 65 | ||||||||||||
| Operating lease right-of-use assets |
Operating lease right-of-use assets | 115 | 115 | |||||||||||||
| Deferred tax assets |
— | — | — | |||||||||||||
| Prepaid pension |
— | — | — | |||||||||||||
| Other non-current assets |
Other assets | 417 | 47 | (d) | 464 | |||||||||||
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| Total assets |
Total assets | $ | 7,256 | $ | 7 | $ | 7,263 | |||||||||
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| Liabilities, redeemable noncontrolling interests, and equity |
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| Liabilities |
Liabilities and stockholders’ equity | |||||||||||||||
| Current liabilities |
Current liabilities: | |||||||||||||||
| Accounts payable and accrued liabilities |
Accrued expenses | $ | 367 | $ | (50 | ) | (e), (f) | $ | 317 | |||||||
| Short-term debt and current portion of long-term debt |
Current portion of long-term debt, net of discounts | 31 | — | 31 | ||||||||||||
| Fiduciary liabilities |
Premiums payable | 1,125 | — | 1,125 | ||||||||||||
| Other current liabilities |
Other current liabilities | 127 | 68 | (b), (e), (g) | 195 | |||||||||||
| Current acquisition earnout obligations | 7 | (7 | ) | (g) | — | |||||||||||
| Current acquisition-related retention obligations | 4 | (4 | ) | (f) | — | |||||||||||
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| Total current liabilities |
Total current liabilities | 1,661 | 7 | 1,668 | ||||||||||||
| Long-term debt |
Long-term debt, net of deferred financing costs and discounts | 4,310 | — | 4,310 | ||||||||||||
| Non-current operating lease liabilities |
Long-term operating lease liabilities | 98 | — | 98 | ||||||||||||
| Deferred tax liabilities |
Deferred tax liabilities, net | — | — | — | ||||||||||||
| Pension, other postretirement, and postemployment liabilities |
— | 301 | (h) | 301 | ||||||||||||
| Other non-current liabilities |
Other liabilities | 341 | (287 | ) | (h), (i) | 54 | ||||||||||
| Long-term acquisition earnout obligations | 5 | (5 | ) | (i) | — | |||||||||||
Page 11
| Long-term acquisition-related retention obligations | 9 | (9 | ) | (i) | — | |||||||||||
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| Total liabilities |
Total liabilities | 6,424 | 7 | 6,431 | ||||||||||||
| Redeemable noncontrolling interests |
— | — | — | |||||||||||||
| Equity |
Stockholders’ equity | |||||||||||||||
| Ordinary shares |
Common stock | — | — | — | ||||||||||||
| Additional paid-in capital |
Additional paid-in capital | 1,351 | — | 1,351 | ||||||||||||
| Retained earnings (Accumulated deficit) |
Accumulated deficit | (519 | ) | — | (519 | ) | ||||||||||
| Accumulated other comprehensive loss |
— | — | — | |||||||||||||
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| Total Aon shareholders’ equity |
Total stockholders’ equity | 832 | — | 832 | ||||||||||||
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| Nonredeemable noncontrolling interests |
— | — | — | |||||||||||||
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| Total equity |
832 | — | 832 | |||||||||||||
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| Total liabilities, redeemable noncontrolling interests, and equity |
Total liabilities and stockholders’ equity | $ | 7,256 | $ | 7 | $ | 7,263 | |||||||||
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| (a) | Represents a reclassification of premiums receivable from USI’s Accounts receivable, net of $806 million to Aon’s Fiduciary assets to align with Aon’s presentation. |
| (b) | Represents a reclassification of USI’s cancellation reserve of $7 million from USI’s Accounts receivable, net of allowance for bad debt to Aon’s Other current liabilities to align with Aon’s presentation. |
| (c) | Represents a reclassification of commissions receivable from USI’s Other current assets of $99 million to Aon’s Receivables, net to align with Aon’s presentation. |
| (d) | Represents a reclassification of capitalized costs to obtain and costs to fulfill from USI’s Other current assets of $47 million to Aon’s Other non-current assets to align with Aon’s presentation. |
| (e) | Represents reclassification of producer buydowns, current operating lease liabilities, and errors & omissions reserve from USI’s Accrued expenses of $54 million to Aon’s Other current liabilities to align with Aon’s presentation. |
| (f) | Represents reclassification of USI’s Current acquisition-related retention obligations of $4 million to Aon’s Accounts payable and accrued liabilities to align with Aon’s presentation. |
| (g) | Represents reclassification of USI’s Current acquisition earnout obligations of $7 million to Aon’s Other current liabilities to align with Aon’s presentation. |
| (h) | Represents a reclassification of $301 million of retirement and deferred compensation liabilities from USI’s Other liabilities to Aon’s Pension, other postretirement, and postemployment liabilities to align with Aon’s presentation. |
| (i) | Represents a reclassification of USI’s Long-term acquisition earnout obligations of $5 million and Long-term acquisition-related retention obligations of $9 million to Aon’s Other non-current liabilities to align with Aon’s presentation. |
Note 4–Preliminary Purchase Price Allocation
Upon closing of the Acquisition, Aon will acquire all of the issued and outstanding equity interests of USI Advantage in exchange for the Cash Payment. The Cash Payment includes Cash to Repay USI Indebtedness and Merger Consideration. Cash to Repay USI Indebtedness will fluctuate between signing of the Merger Agreement and the closing of the Acquisition based on fluctuations in the outstanding indebtedness. Merger Consideration to be paid is subject to certain adjustments, including, adjustments for Leakage, if any, as defined in the Merger Agreement. The value of the Cash Payment therefore will fluctuate until the closing of the Acquisition. In addition, Aon will issue restricted shares pursuant to the Substituted Option Awards and Substituted RSA Awards as well as pay cash pursuant to the Cash-Out RSAs to replace certain of USI Advantage’s historical USI Option Awards and USI RSA Awards.
Page 12
The following is a preliminary estimate of the consideration to be transferred to effect the Acquisition.
| (millions) | Pro Forma Preliminary Purchase Price | |||
| Merger Consideration |
$ | 12,547 | ||
| Cash to Repay USI Indebtedness |
4,460 | |||
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| Estimated Cash Payment |
$ | 17,007 | ||
| Replacement of USI Option Awards and USI RSA Awards(1) |
73 | |||
| Less: Indebtedness legally assumed by Aon of $620 million and the related prepayment penalty of $29 million |
649 | |||
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| Total Preliminary Purchase Price |
$ | 16,431 | ||
| (1) | Represents the portion of the Substituted Option Awards, Substituted RSA Awards, and Cash-Out RSAs that are attributed to pre-combination vesting and thus included in the preliminary purchase price. Refer to adjustment (a) in Note 5–Pro Forma Acquisition Accounting Adjustments for recognition of compensation expense for the post-combination vesting related to such awards. |
The preliminary purchase price as presented for the purposes of the unaudited pro forma combined financial information includes the outstanding amount of USI Indebtedness of $3.8 billion as of June 30, 2026 that is required to be repaid in connection with the Acquisition due to the historical terms of the underlying credit agreement. Certain additional USI Indebtedness of $620 million is determined to be legally assumed by Aon and as such, the total settlement of such debt as well as the related prepayment penalty of $29 million is excluded from the preliminary purchase price. Amounts outstanding related to the USI Indebtedness included in preliminary purchase price will change between the date of the June 30, 2026 USI balance sheet used for purposes of the unaudited pro forma combined financial information and the closing of the Acquisition. Accordingly, the amount of USI Indebtedness actually repaid at closing of the Acquisition may differ from the amount reflected in the preliminary purchase price. The Company believes that a 1% increase (decrease) in USI Indebtedness between signing of the Merger Agreement and closing of the Acquisition is reasonably possible. This scenario would cause the preliminary purchase price to increase (decrease) by $38 million, and result in a corresponding increase (decrease) to the amount of goodwill recognized as part of the Acquisition. Further, upon closing of the Acquisition, the preliminary purchase price may be adjusted for Leakage, if any, as defined in the Merger Agreement. At the time the unaudited pro forma combined financial information was prepared, an estimate for such amount was not determinable, and therefore no adjustment for Leakage has been reflected in the preliminary purchase price presented herein.
Page 13
The following table summarizes the allocation of the preliminary purchase price of $16.4 billion and calculation of goodwill.
| (millions) | Amount | |||
| Assets acquired |
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| Cash and cash equivalents |
$ | 221 | ||
| Receivables |
509 | |||
| Fiduciary assets |
1,125 | |||
| Other current assets |
47 | |||
| Intangible assets |
7,479 | |||
| Fixed assets |
46 | |||
| Operating lease right-of-use assets |
115 | |||
| Other non-current assets |
171 | |||
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| Total assets acquired |
$ | 9,713 | ||
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| Liabilities assumed |
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| Accounts payable and accrued liabilities |
$ | 317 | ||
| Short-term debt and current portion of long-term debt(1) |
620 | |||
| Fiduciary liabilities |
1,125 | |||
| Other current liabilities |
404 | |||
| Non-current operating lease liabilities |
98 | |||
| Deferred tax liabilities |
1,493 | |||
| Pension, other postretirement, and postemployment liabilities |
301 | |||
| Other non-current liabilities |
54 | |||
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| Total liabilities assumed |
$ | 4,412 | ||
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| Fair value of net assets acquired |
$ | 5,301 | ||
| Goodwill as of June 30, 2026 |
11,130 | |||
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| Total purchase consideration |
$ | 16,431 | ||
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| (1) | Aon will legally assume $620 million of USI Indebtedness that is planned to be extinguished on or shortly following closing of the Acquisition. As a result of extinguishing this debt, Aon expects to incur a prepayment penalty of approximately $29 million. Refer to adjustment (e) in Note 5–Pro Forma Acquisition Accounting Adjustments. |
For purposes of the unaudited pro forma combined financial information, Aon has assumed USI’s historical carrying values approximate fair value, unless otherwise indicated in Note 5–Pro Forma Acquisition Accounting Adjustments. The adjustments necessary to reflect the application of purchase accounting and recognition of the acquired assets and assumed liabilities at their acquisition-date fair value are further described in Note 5–Pro Forma Acquisition Accounting Adjustments. The preliminary purchase price allocation has been used to prepare pro forma adjustments in the unaudited pro forma combined statement of financial position as of June 30, 2026, and the unaudited pro forma combined statements of income for the six months ended June 30, 2026 and year ended December 31, 2025, respectively. The final purchase price allocation will be determined when Aon has completed the necessary detailed valuations and calculations. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments.
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Note 5–Pro Forma Acquisition Accounting Adjustments
Adjustments included in the unaudited pro forma combined statements of income for the six months ended June 30, 2026 and year ended December 31, 2025 related to the Acquisition
| (a) | To reflect compensation expense expected to be incurred by Aon following the Acquisition, which is attributable to estimated (1) the portion of Substituted Option Awards, Substituted RSA Awards, and Cash-Out RSAs attributable to post-combination vesting and (2) the retention program that will be offered to certain employees. The retention program is expected to have a maximum value of $400 million, including both cash and equity awards, that will generally vest over a three-year period contingent on continued service of the employee to Aon. The cash awards may also contain performance conditions. The total post-combination adjustment to Compensation and benefits expense, inclusive of estimated replacement awards and partial vesting of retention program awards, for the six months ended June 30, 2026 and year ended December 31, 2025, is $65 million and $240 million, respectively. |
| (b) | To record the pro forma amortization of finite-lived intangible assets based on their preliminary estimated fair values and estimated average useful lives, and to remove USI’s historical intangible asset amortization, of which $6 million and $12 million is presented in Depreciation of fixed assets for the six months ended June 30, 2026 and year ended December 31, 2025, respectively. Pro forma amortization has been estimated using an accelerated basis (i.e., reducing balance) of amortization for acquired customer relationships, and on a straight-line basis for all other identifiable intangible assets. Based on the information available at the time of filing the unaudited pro forma combined financial information, these amortization methods best reflect the pattern in which the Company expects to consume the economic benefits of each identifiable intangible asset. Following the close of the Acquisition, the identifiable intangible assets will be amortized in line with their underlying expected cash flows, as determined by an external valuation report, or following the straight-line method if the expected cash flows are not reliably determinable. The following adjustments were made to amortization: |
| (millions) | Amortization Expense | |||||||||||||||
| Identifiable intangible assets | Preliminary Fair Value |
Estimated Useful Life (Years) |
Six Months Ended June 30, 2026 |
Year Ended December 31, 2025 |
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| Customer Relationships |
$ | 6,145 | 15 | $ | 355 | $ | 819 | |||||||||
| Trade Names and Trademarks |
188 | 4 | 24 | 47 | ||||||||||||
| Software / Developed Technology |
1,095 | 6 | 91 | 183 | ||||||||||||
| Non-Competition Agreements |
51 | 4 | 6 | 13 | ||||||||||||
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| Total |
$ | 7,479 | $ | 476 | $ | 1,062 | ||||||||||
| Less: Historical USI Amounts |
981 | 192 | 387 | |||||||||||||
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| Pro Forma Acquisition Accounting Adjustment |
$ | 6,498 | $ | 284 | $ | 675 | ||||||||||
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The weighted average estimated useful life of the finite-lived intangible assets to be acquired is 13 years. An increase (decrease) of 10% in the fair value of finite-lived identifiable intangible assets would increase (decrease) pro forma amortization expense by approximately $48 million and $106 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively.
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The estimated pro forma amortization expense expected to be recognized over the remainder of 2026 and the next five years, as of June 30, 2026, is as follows:
| (millions) | Estimated Future Amortization | |||
| Remainder of 2026 |
$ | 531 | ||
| 2027 |
1,007 | |||
| 2028 |
905 | |||
| 2029 |
817 | |||
| 2030 |
710 | |||
| 2031 |
614 | |||
| Thereafter |
2,895 | |||
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| Total |
$ | 7,479 | ||
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| (c) | To record $137 million of transaction costs in the year ended December 31, 2025, that Aon expects to incur as a result of the Acquisition. In addition and not reflected in the unaudited pro forma combined statements of income, Aon expects to incur costs associated with the integration of USI into the Company which may relate to severance and other actions to eliminate redundant costs. |
| (d) | To eliminate $143 million and $319 million of interest expense for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, attributable to USI Indebtedness which will be extinguished by Aon in connection with the Acquisition. |
| (e) | To record a $29 million prepayment penalty associated with the settlement of $620 million of USI Indebtedness that is expected to be assumed by Aon and repaid on or shortly following the closing of the Acquisition. |
| (f) | Statutory tax rates were applied, as appropriate, to each pro forma adjustment based on the jurisdiction in which the adjustment was expected to occur. In situations where jurisdictional detail was not available, a weighted average statutory tax rate of 26% was applied to the adjustment. The total effective tax rate of the combined company could differ materially depending on the post-Acquisition geographical mix, the combined company’s income and other factors. |
Adjustments included in the unaudited pro forma combined statement of financial position as of June 30, 2026 related to the Acquisition
| (g) | To reflect the Cash Payment of $17.0 billion to be paid in connection with the Acquisition which includes Merger Consideration of $12.5 billion, $3.8 billion of USI Indebtedness that is required to be repaid in connection with the Acquisition, and $649 million related to the settlement of certain additional USI Indebtedness, which is expected to occur on or shortly following the closing of the Acquisition and is not deemed to be a part of the preliminary purchase price. This adjustment also reflects (i) the equity issuance of $60 million related to the Substituted Option Awards and Substituted RSA Awards attributable to pre-combination vesting and included in the preliminary purchase price, (ii) $13 million of cash payments related to the Cash-Out RSAs attributable to pre-combination vesting and included in the preliminary purchase price, and (iii) $16 million of cash payments related to the Cash-Out RSAs attributable to post-combination vesting and included in compensation expense. Refer to Note 4–Preliminary Purchase Price Allocation for the preliminary purchase price calculation and allocation. |
| (h) | To reflect the cash outflow for Aon’s estimated transaction costs on the unaudited pro forma combined statement of financial position. Refer to adjustment (c) above for the income statement impact of this adjustment. |
| (i) | To remove USI’s historical goodwill of $3.8 billion and recognize estimated Acquisition goodwill of $11.1 billion as a result of the preliminary purchase price allocation. Refer to Note 4–Preliminary Purchase Price Allocation for the preliminary purchase price calculation and allocation. |
| (j) | To reflect the removal of USI’s historical intangible assets of $962 million and the removal of $19 million of fixed assets, net related to software, offset by the recognition of the estimated fair value of acquired USI intangible assets of $7.5 billion for a net increase to intangible assets of $6.5 billion. Further information on identifiable intangible assets expected to be acquired is documented in adjustment (b) above. |
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| (k) | To reflect the adjustment to deferred income taxes resulting from the pro forma Acquisition-related adjustments. The estimate of deferred income tax assets and liabilities was determined based on the excess book basis over the tax basis of the pro forma adjustments attributable to the assets to be acquired and liabilities to be assumed. The statutory tax rate was applied, as appropriate, to each adjustment based on the jurisdiction in which the adjustment is expected to occur. In situations where jurisdictional detail was not available, a weighted average statutory tax rate of 26% was applied to the adjustment. The deferred tax assets on the unaudited pro forma combined statement of financial position have not been assessed for the need for a valuation allowance or the impact of indefinite reinvestment assertions associated with subsidiary earnings and stock basis. This estimate of deferred income tax assets and liabilities is preliminary and is subject to change based on Aon management’s final determination of the fair value of assets acquired and liabilities assumed by jurisdiction. Total net deferred tax liabilities impacting goodwill and reflected in Note 4–Preliminary Purchase Price Allocation are $1,493 million. The remaining deferred income taxes impact retained earnings and relate to the tax effect of certain pro forma Acquisition-related adjustments described in adjustment (g) and (h) in this Note 5–Pro Forma Acquisition Accounting Adjustments. |
| (l) | To remove USI’s unamortized capitalized costs to obtain and costs to fulfill of $253 million from Other non-current assets as such costs do not qualify for separate asset recognition by Aon under the acquisition method of accounting. |
| (m) | To remove USI’s employee loans receivable of $37 million from Other non-current assets, as such amounts will be settled in connection with the Acquisition. Merger Consideration in Note 4–Preliminary Purchase Price Allocation is also reduced by the same amount as USI’s employee loans will be net settled at the closing of the Acquisition. |
| (n) | To remove $38 million of unamortized debt issuance costs from Long-term debt, $22 million of accrued interest payable from Other current liabilities, and $4 million attributable to debt issuance costs and USI’s interest rate swap from Other non-current assets, in connection with the settlement of USI Indebtedness. |
| (o) | To record $231 million of anticipated dividends expected to be declared by USI prior to the closing of the Acquisition, as permitted by the Merger Agreement, which are expected to reduce the net assets acquired by Aon. Such dividends are expected to be included within Permitted Leakage, as defined in the Merger Agreement. |
| (p) | To eliminate USI’s historical Additional paid-in capital of $1.4 billion and Accumulated deficit of $519 million. |
Note 6–Pro Forma Financing Adjustments
Adjustments included in the unaudited pro forma combined statements of income for the six months ended June 30, 2026 and year ended December 31, 2025 related to the Financing
| (a) | Reflects the pro forma interest expense and the amortization of debt issuance costs for the six months ended June 30, 2026 and year ended December 31, 2025. See description within adjustment (c) below for information on assumed interest rates used for the purpose of the unaudited pro forma combined financial information. |
| Six Months Ended June 30, 2026 | Year Ended December 31, 2025 | |||||||||||||||||||||||
| (millions) | Term Loans | Long-term Notes |
Total | Term Loans | Long-term Notes |
Total | ||||||||||||||||||
| Estimated interest expense |
$ | 93 | $ | 400 | $ | 493 | $ | 186 | $ | 800 | $ | 986 | ||||||||||||
| Amortization of debt issuance costs |
1 | 8 | 9 | 2 | 16 | 18 | ||||||||||||||||||
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| Financing Adjustments to Interest expense |
$ | 94 | $ | 408 | $ | 502 | $ | 188 | $ | 816 | $ | 1,004 | ||||||||||||
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A 1/8 of a percentage point increase or decrease in the benchmark rate for the Term Loans would result in a change in interest expense of approximately $3 million and $5 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively.
| (b) | Statutory tax rates were applied, as appropriate, to each pro forma adjustment based on the jurisdiction in which the adjustment was expected to occur. In situations where jurisdictional detail was not available, a weighted average statutory tax rate of 26% was applied to the adjustment. The total effective tax rate of the combined company could differ materially depending on the post-Acquisition geographical mix, the combined company’s income and other factors. |
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Adjustments included in the unaudited pro forma combined statement of financial position as of June 30, 2026 related to the Financing
| (c) | Reflects the anticipated pro forma cash proceeds from the Financing. The following table summarizes the assumed principal amounts, debt issuance costs, and average assumed interest rates and maturities for the Term Loans and the Notes: |
| (millions) | Term Loans | Long-term Notes | Total | |||||||||
| Loan |
$ | 4,000 | $ | 13,500 | $ | 17,500 | ||||||
| Less: Debt issuance costs |
6 | 126 | 132 | |||||||||
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| Net proceeds |
$ | 3,994 | $ | 13,374 | $ | 17,368 | ||||||
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| Weighted average: |
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| Interest rate(1) |
SOFR + 1.0 | % | 5.92 | % | ||||||||
| Maturity (years) |
3 | 12 | ||||||||||
| (1) | For purposes of the unaudited pro forma combined financial information, the 30-day average SOFR rate of 3.65% as of September 8, 2026 was used. The weighted average interest rates disclosed above represent the assumed stated interest rates (in the case of the Term Loans, based on Aon’s long-term debt rating as of September 8, 2026, and in the case of the Notes, blended across the anticipated maturities). The actual effective interest rate applicable to the Term Loans will vary based on the applicable SOFR rate and Aon’s long-term debt rating at the time of borrowing, and the actual effective interest rate applicable to the Notes will be computed upon issuance thereof, and in each case may differ from the assumed weighted average interest rates. |
Note 7–Earnings per Share
The unaudited pro forma combined basic and diluted net income per share attributable to shareholders for the six months ended June 30, 2026 and year ended December 31, 2025 have been calculated based on the estimated weighted average shares outstanding during the applicable reporting period. Pro forma diluted shares outstanding include an estimate of unvested Aon Class A ordinary shares expected to be issued through the Substituted Option Awards, Substituted RSA Awards, and the retention program for the six months ended June 30, 2026 and year ended December 31, 2025.
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The following table summarizes the calculation of unaudited pro forma combined basic and diluted earnings per share.
| (millions, except per share data) | Six Months Ended June 30, 2026 |
Year Ended December 31, 2025 |
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| Numerator: |
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| Net income |
$ | 1,266 | $ | 2,497 | ||||
| Less: Net income attributable to redeemable and nonredeemable noncontrolling interests |
41 | 55 | ||||||
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| Net income available to Aon shareholders |
1,225 | 2,442 | ||||||
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| Denominator: |
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| Weighted average ordinary shares outstanding - basic |
213.8 | 215.9 | ||||||
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| Pro forma basic earnings per share |
$ | 5.73 | $ | 11.31 | ||||
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| Numerator: |
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| Net income |
$ | 1,266 | $ | 2,497 | ||||
| Less: Net income attributable to redeemable and nonredeemable noncontrolling interests |
41 | 55 | ||||||
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| Net income available to Aon shareholders |
1,225 | 2,442 | ||||||
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| Denominator: |
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| Weighted average ordinary shares outstanding - basic |
213.8 | 215.9 | ||||||
| Dilutive effect of existing stock options and RSUs |
0.8 | 1.2 | ||||||
| Dilutive effect of estimated RSAs and RSUs per adjustment (a) in Note 5–Pro Forma Acquisition Accounting Adjustments |
0.2 | 0.1 | ||||||
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| Weighted average ordinary shares outstanding - diluted |
214.8 | 217.2 | ||||||
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| Pro forma diluted earnings per share |
$ | 5.70 | $ | 11.24 | ||||
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Potentially issuable shares are not included in the computation of diluted earnings per share if the inclusion would be antidilutive. There were 0.5 million shares excluded from the calculation for the six months ended June 30, 2026 and an insignificant number of shares excluded from the calculation for the year ended December 31, 2025.
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