Exhibit 12(b)
Aon Corporation and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
|
| Nine Months Ended |
| Years Ended December 31, |
| |||||||||||||||||
(millions except ratios) |
| 2006 |
| 2005 |
| 2005 |
| 2004 |
| 2003 |
| 2002 |
| 2001 |
| |||||||
Income from continuing operations before provision for income taxes and minority interest |
| $ | 672 |
| $ | 669 |
| $ | 811 |
| $ | 737 |
| $ | 974 |
| $ | 691 |
| $ | 160 |
|
Less: Earnings from unconsolidated entities under the equity method of accounting |
| 8 |
| 6 |
| 7 |
| 34 |
| 49 |
| 19 |
| (139 | ) | |||||||
Add back fixed charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Interest on indebtedness(1) |
| 99 |
| 94 |
| 125 |
| 136 |
| 101 |
| 124 |
| 127 |
| |||||||
Interest credited on deposit-type insurance contracts |
| — |
| — |
| — |
| 1 |
| — |
| 29 |
| 56 |
| |||||||
Portion of rents representative of interest factor |
| 55 |
| 53 |
| 71 |
| 73 |
| 67 |
| 59 |
| 57 |
| |||||||
Income as adjusted |
| $ | 818 |
| $ | 810 |
| $ | 1,000 |
| $ | 913 |
| $ | 1,093 |
| $ | 884 |
| $ | 539 |
|
Fixed charges and preferred stock dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Interest on indebtedness(1) |
| $ | 99 |
| $ | 94 |
| $ | 125 |
| $ | 136 |
| $ | 101 |
| $ | 124 |
| $ | 127 |
|
Preferred stock dividends(2) |
| — |
| 3 |
| 3 |
| 3 |
| 61 |
| 58 |
| 70 |
| |||||||
Interest and dividends |
| 99 |
| 97 |
| 128 |
| 139 |
| 162 |
| 182 |
| 197 |
| |||||||
Interest credited on deposit-type insurance contracts |
| — |
| — |
| — |
| 1 |
| — |
| 29 |
| 56 |
| |||||||
Portion of rents representative of interest factor |
| 55 |
| 53 |
| 71 |
| 73 |
| 67 |
| 59 |
| 57 |
| |||||||
Total fixed charges and preferred stock dividends |
| $ | 154 |
| $ | 150 |
| $ | 199 |
| $ | 213 |
| $ | 229 |
| $ | 270 |
| $ | 310 |
|
Ratio of earnings to combined fixed charges and preferred stock dividends |
| 5.3 |
| 5.4 |
| 5.0 |
| 4.3 |
| 4.8 |
| 3.3 |
| 1.7 |
|
(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. This decrease was offset by an increase in notes payable. Beginning in 2004, interest expense ($43 million for both the nine months ended September 30, 2006 and 2005 and $58 million for the years ended December 31, 2005 and 2004) on these notes payable is reported as part of interest expense on the condensed consolidated statements of income.
(2) Included in preferred stock dividends are $57 million and $54 million for the years ended December 31, 2003 and 2002, respectively, and $66 million for the year ended December 31, 2001 of pretax distributions on the capital securities.