EX-12.(A) 2 a07-25519_1ex12da.htm EX-12.(A)

Exhibit 12(a)

Aon Corporation and Consolidated Subsidiaries

Combined With Unconsolidated Subsidiaries

Computation of Ratio of Earnings to Fixed Charges

 

 

 

Nine Months Ended

 

 

 

 

 

Sept. 30,

 

Years Ended December 31,

 

(millions except ratios)

 

2007

 

2006

 

2006

 

2005

 

2004

 

2003

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before provision for income taxes and minority interest

 

$

989

 

$

672

 

$

920

 

$

808

 

$

733

 

$

960

 

$

676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

5

 

3

 

4

 

7

 

34

 

49

 

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add back fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on indebtedness (1)

 

102

 

99

 

129

 

125

 

136

 

101

 

124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on FIN 48 liabilities

 

(1

)

—

 

—

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest credited on deposit-type insurance contracts

 

—

 

—

 

—

 

—

 

1

 

—

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rents representative of interest factor

 

54

 

55

 

79

 

71

 

73

 

67

 

59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income as adjusted

 

$

1,139

 

$

823

 

$

1,124

 

$

997

 

$

909

 

$

1,079

 

$

869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on indebtedness (1)

 

$

102

 

$

99

 

$

129

 

$

125

 

$

136

 

$

101

 

$

124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest credited on deposit-type insurance contracts

 

—

 

—

 

—

 

—

 

1

 

—

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portion of rents representative of interest factor

 

54

 

55

 

79

 

71

 

73

 

67

 

59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed charges

 

$

156

 

$

154

 

$

208

 

$

196

 

$

210

 

$

168

 

$

212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

7.3

 

5.3

 

5.4

 

5.1

 

4.3

 

6.4

 

4.1

 

 

(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, 2007 and 2006 and $58 million for the years ended December 31, 2006, 2005 and 2004) on these notes payable is reported as part of interest expense on the condensed consolidated statements of income.