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Aon Corporation and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends
| Six Months Ended June 30, | Years Ended December 31, | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 | 2003 | 2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||||
| (millions except ratios) | ||||||||||||||||||||||
Income from continuing operations before provision for income taxes and minority interest | $ | 580 | $ | 529 | $ | 1,128 | $ | 837 | $ | 365 | $ | 846 | $ | 622 | |||||||||
Less: Earnings from unconsolidated entities under the equity method of accounting | 38 | 21 | 49 | 19 | (139 | ) | 44 | 50 | |||||||||||||||
Add back fixed charges: | |||||||||||||||||||||||
Interest on indebtedness | 69 | 55 | 101 | 124 | 127 | 140 | 105 | ||||||||||||||||
Interest credited on deposit-type insurance contracts | — | 2 | — | 29 | 56 | 71 | 77 | ||||||||||||||||
Interest on ESOP | — | — | — | — | — | — | 1 | ||||||||||||||||
Portion of rents representative of interest factor | 34 | 27 | 67 | 59 | 57 | 54 | 49 | ||||||||||||||||
Income as adjusted | $ | 645 | $ | 592 | $ | 1,247 | $ | 1,030 | $ | 744 | $ | 1,067 | $ | 804 | |||||||||
Fixed charges and preferred stock dividends: | |||||||||||||||||||||||
Interest on indebtedness(1) | $ | 69 | $ | 55 | $ | 101 | $ | 124 | $ | 127 | $ | 140 | $ | 105 | |||||||||
Preferred stock dividends(2) | 2 | 31 | 61 | 58 | 70 | 70 | 70 | ||||||||||||||||
Interest and dividends | 71 | 86 | 162 | 182 | 197 | 210 | 175 | ||||||||||||||||
Interest credited on deposit-type insurance contracts | — | 2 | — | 29 | 56 | 71 | 77 | ||||||||||||||||
Interest on ESOP | — | — | — | — | — | — | 1 | ||||||||||||||||
Portion of rents representative of interest factor | 34 | 27 | 67 | 59 | 57 | 54 | 49 | ||||||||||||||||
Total fixed charges and preferred stock dividends | $ | 105 | $ | 115 | $ | 229 | $ | 270 | $ | 310 | $ | 335 | $ | 302 | |||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 6.1 | 5.1 | 5.4 | 3.8 | 2.4 | 3.2 | 2.7 | ||||||||||||||||
- (1)
- As a result of the adoption of FIN 46 on December 31, 2003, Aon was required to deconsolidate its 8.205% mandatorily redeemable preferred capital securities (capital securities). This decrease was offset by an increase in notes payable. Beginning in 2004, interest expense ($29 million for the six months ended June 30, 2004) on these notes payable is reported as part of interest expense in the condensed consolidated statements of income.
- (2)
- Included in preferred stock dividends are $29 million for the six months ended ended June 30, 2003, $57 million and $54 million for the years ended December 31, 2003 and 2002, respectively, and $66 million for the years ended December 31, 2001, 2000 and 1999 of pretax distributions on the capital securities which are classified as "minority interest" on the condensed consolidated statements of income.
Aon Corporation and Consolidated Subsidiaries Combined With Unconsolidated Subsidiaries Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends