EX-12.B 3 a06-9358_1ex12db.htm EX-12

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

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar. 31,

 

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

 

$

304

 

$

310

 

$

965

 

$

827

 

$

1,074

 

$

787

 

$

306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Earnings from unconsolidated entities under the equity method of accounting

 

(1

)

1

 

7

 

34

 

49

 

19

 

(139

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add back fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on indebtedness(1)

 

31

 

34

 

125

 

136

 

101

 

124

 

127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest credited on deposit-type insurance contracts

 

—

 

—

 

—

 

1

 

—

 

29

 

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rents representative of interest factor

 

18

 

18

 

71

 

73

 

67

 

59

 

57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income as adjusted

 

$

354

 

$

361

 

$

1,154

 

$

1,003

 

$

1,193

 

$

980

 

$

685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges and preferred stock dividends:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on indebtedness(1)

 

$

31

 

$

34

 

$

125

 

$

136

 

$

101

 

$

124

 

$

127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividends(2)

 

—

 

1

 

3

 

3

 

61

 

58

 

70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividends

 

31

 

35

 

128

 

139

 

162

 

182

 

197

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest credited on deposit-type insurance contracts

 

—

 

—

 

—

 

1

 

—

 

29

 

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rents representative of interest factor

 

18

 

18

 

71

 

73

 

67

 

59

 

57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed charges and preferred stock dividends

 

$

49

 

$

53

 

$

199

 

$

213

 

$

229

 

$

270

 

$

310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

7.2

 

6.8

 

5.8

 

4.7

 

5.2

 

3.6

 

2.2

 

(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 ($14 million for both the three months ended March 31, 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.