11. Shareholders' Equity

Redomestication

Prior to the Redomestication, the Company accounted for purchases of its outstanding common stock using the treasury share method permitted under U.S. GAAP. Under this method, the Company recorded purchases of its own outstanding common stock as a reduction to Additional paid-in capital based on the cost of the shares acquired. Under U.K. law, when the Company repurchases its outstanding shares, those shares are treated as cancelled. In April 2012, the Company constructively cancelled 60 million shares of treasury stock related to the Redomestication. The impact of the cancellation of all outstanding treasury shares was a decrease in Ordinary shares and Retained earnings of $60 million and $2.4 billion, respectively. The balance of Treasury stock at cost of $2.5 billion was also eliminated as part of the cancellation. Additionally, effective upon the completion of the Redomestication, the par value of Aon's outstanding equity shares decreased from $1.00 to $0.01. The impact of this change was a decrease in Ordinary shares of $323 million, and an increase in Additional paid-in capital of $323 million.

As a U.K. incorporated company, Aon plc must have "distributable reserves" to make share repurchases or pay dividends to shareholders. Distributable reserves may be created through the earnings of the U.K. parent company and, amongst other methods, through a reduction in share capital approved by the English Companies Court. Distributable reserves are not linked to a U.S. GAAP reported amount. On April 4, 2012, the Company received approval from the English Companies Court to reduce its share premium and in connection with that approval, recognized distributable reserves in the amount of $8.0 billion. As of December 31, 2012, the Company had distributable reserves of $7.0 billion.

Ordinary Shares

In January 2010, the Company's Board of Directors authorized a share repurchase program under which up to $2 billion of common stock may be repurchased ("2010 Stock Repurchase Plan"). Shares could be repurchased through the open market or in privately negotiated transactions, including structured repurchase programs, from time to time, based on prevailing market conditions, and were to be funded from available capital. Any repurchased shares were to be available for employee stock plans and for other corporate purposes.

The 2010 Stock Repurchase Program, which related to common stock of Aon Corporation and preceded the Redomestication, did not extend to shares of Aon plc. In April 2012, the Company's Board of Directors therefore authorized a share repurchase program under which up to $5.0 billion of Class A Ordinary Shares may be repurchased ("2012 Share Repurchase Program"). Under this program, shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital.

In 2012, the Company repurchased 21.6 million shares at an average price per share of $52.16 for a total cost of $1.1 billion. The remaining authorized amount for share repurchase under the 2012 Share Repurchase Program is $4.0 billion.

Participating Securities

Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities, as defined, and therefore, are included in computing basic and diluted earnings per share using the two class method. Certain of the Company's restricted share awards allow the holder to receive a non-forfeitable dividend equivalent.

Income from continuing operations, income from discontinued operations and net income, attributable to participating securities, were as follows (in millions):

	Year ended December 31,

	2012		2011		2010

Income from continuing operations	$	11	$	13	$	15
Income from discontinued operations		—		—		—

Net income	$	11	$	13	$	15

Weighted average shares outstanding are as follows (in millions):

	Year ended December 31,

	2012		2011		2010

Shares for basic earnings per share (1)		328.5		335.5		293.4
Potentially issuable ordinary shares		4.1		5.4		4.7

Shares for diluted earnings per share		332.6		340.9		298.1

(1): Includes 4.7 million, 7.6 million and 6.1 million shares of participating securities for the years ended December 31, 2012, 2011, and 2010 respectively.

Certain potentially issuable ordinary shares, primarily related to share options, were not included in the computation of diluted net income per share because their inclusion would have been antidilutive. The number of shares excluded from the calculation was 0.2 million in 2012, 0.1 million in 2011 and 4.8 million in 2010.

Dividends

During 2012, 2011, and 2010, the Company paid dividends on its ordinary shares of $204 million, $200 million, and $175 million, respectively. Dividends paid per ordinary share were $0.62 for the year ended December 31, 2012 and $0.60 for each of the years ended December 31, 2011 and 2010.

Other Comprehensive Loss

The components of other comprehensive loss and the related tax effects are as follows (in millions):

Year ended December 31, 2012	Pretax			Income Tax Benefit (Expense)			Net of Tax


Net derivative losses arising during the year	$	(19	)	$	7		$	(12	)
Reclassification adjustment		33			(12	)		21

Net change in derivative losses		14			(5	)		9
Net foreign exchange translation adjustments		109			—			109
Net post-retirement benefit obligation		(488	)		130			(358	)

Total other comprehensive loss		(365	)		125			(240	)
Less: other comprehensive income attributable to noncontrolling interest		—			—			—

Other comprehensive loss attributable to Aon shareholders	$	(365	)	$	125		$	(240	)

Year ended December 31, 2011	Pretax			Income Tax Benefit (Expense)			Net of Tax


Net derivative losses arising during the year	$	(44	)	$	15		$	(29	)
Reclassification adjustment		25			(9	)		16

Net change in derivative losses		(19	)		6			(13	)
Net foreign exchange translation adjustments		(46	)		3			(43	)
Net post-retirement benefit obligation		(593	)		197			(396	)

Total other comprehensive loss		(658	)		206			(452	)
Less: other comprehensive income attributable to noncontrolling interest		1			—			1

Other comprehensive loss attributable to Aon shareholders	$	(659	)	$	206		$	(453	)

Year ended December 31, 2010	Pretax			Income Tax Benefit (Expense)			Net of Tax


Net derivative losses arising during the year	$	(31	)	$	10		$	(21	)
Reclassification adjustment		(5	)		2			(3	)

Net change in derivative losses		(36	)		12			(24	)
Net foreign exchange translation adjustments		(92	)		(43	)		(135	)
Net post-retirement benefit obligation		(76	)		35			(41	)

Total other comprehensive loss		(204	)		4			(200	)
Less: other comprehensive loss attributable to noncontrolling interests		(2	)		—			(2	)

Other comprehensive loss attributable to Aon shareholders	$	(202	)	$	4		$	(198	)

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of related tax, are as follows (in millions):

As of December 31	2012			2011			2010


Net derivative losses	$	(28	)	$	(37	)	$	(24	)
Net foreign exchange translation adjustments		233			124			168
Net postretirement benefit obligations		(2,815	)		(2,457	)		(2,061	)

Accumulated other comprehensive loss, net of tax	$	(2,610	)	$	(2,370	)	$	(1,917	)