Restructuring

9 Months Ended

Sep. 30, 2012

Restructuring

Restructuring

7. Restructuring

Aon Hewitt Restructuring Plan

On October14, 2010, Aon announced a global restructuring plan ("Aon Hewitt Plan") in connection with the acquisition of Hewitt Associates,Inc. The Aon Hewitt Plan is intended to streamline operations across the combined Aon Hewitt organization and includes approximately 2,000 job eliminations. The Company expects these restructuring activities and related expenses to affect continuing operations into 2013. The Aon Hewitt Plan is expected to result in cumulative costs of approximately $325 million through the end of the plan, consisting of approximately $180 million in employee termination costs and approximately $145 million in real estate rationalization costs across the Company.

From the inception of the Aon Hewitt Plan through September30, 2012, in excess of 1,800 jobs have been eliminated and total expenses of $214 million have been incurred. The Company recorded $32 million and $57 million of restructuring and related charges in the three and nine months ended September30, 2012, respectively. The Company recorded $26 million and $80 million of restructuring and related charges in the three and nine months ended September30, 2011, respectively. Charges related to the restructuring are included in Compensation and benefits and Other general expenses in the accompanying Condensed Consolidated Statements of Income.

The following summarizes restructuring and related costs by type that have been incurred and are estimated to be incurred through the end of the restructuring initiative related to the Aon Hewitt Plan (in millions):

	2010		2011		ThirdQuarter 2012		NineMonths 2012		Total Inceptionto Date		Estimated TotalCostfor Restructuring Plan(1)
Workforce reduction	$	49	$	64	$	25	$	44	$	157	$	180
Lease consolidation	3		32		6		11		46		95
Asset impairments	-		7		-		1		8		47
Other costs associated with restructuring (2)	-		2		1		1		3		3
Total restructuring and related expenses	$	52	$	105	$	32	$	57	$	214	$	325

(1) Actual costs, when incurred, will vary due to changes in the assumptions built into this plan. Significant assumptions likely to change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives.

(2) Other costs associated with restructuring initiatives, including moving costs and consulting and legal fees, are recognized when incurred.

Effective January1, 2012, the Health and Benefits Consulting business was transferred from the HR Solutions segment to the Risk Solutions segment. Restructuring costs associated with the Health and Benefits Consulting business are reflected in the Risk Solutions segment, including $41 million that was reclassified from the HR Solutions segment to the Risk Solutions segment for 2011. During the third quarter 2011, $26 million in restructuring expenses were recorded, $14 million of which related to the Health and Benefits Consulting business. The following summarizes the restructuring and related expenses, by segment, that have been incurred and are estimated to be incurred through the end of the restructuring initiative related to the Aon Hewitt Plan (in millions):

	2010		2011		ThirdQuarter 2012		NineMonths 2012		Total Inceptionto Date		Estimated TotalCostfor Restructuring Plan
HR Solutions	$	52	$	49	$	16	$	36	$	137	$	243
Risk Solutions	-		56		16		21		77		82
Total restructuring and related expenses	$	52	$	105	$	32	$	57	$	214	$	325

Aon Benfield Restructuring Plan

The Company announced a global restructuring plan ("Aon Benfield Plan") in conjunction with its acquisition of Benfield in 2008. The Aon Benfield Plan was intended to integrate and streamline operations across the combined Aon Benfield organization. The Aon Benfield Plan included 810 job eliminations. Additionally, duplicate space and assets were abandoned. The Company incurred all remaining costs for the Aon Benfield Plan and the plan was closed in the first quarter 2012.

The Company recorded $8 million of restructuring and related charges in the nine months ended September30, 2012. The Company recorded $3 million of restructuring and related charges in the three months ended September30, 2011, and a net restructuring benefit of $2 million in the nine months ended September30, 2011. All costs associated with the Aon Benfield Plan are included in the Risk Solutions segment. Charges related to the restructuring are included in Compensation and benefits and Other general expenses in the accompanying Condensed Consolidated Statements of Income.

The following summarizes the restructuring and related costs by type that have been incurred through the end of the restructuring initiative related to the Aon Benfield Plan (in millions):

	Purchase Price Allocation		2009		2010		2011			ThirdQuarter 2012		NineMonths 2012		Inceptionto Date		TotalCostfor Restructuring Plan
Workforce reduction	$	32	$	38	$	15	$	33		$	-	$	8	$	126	$	126
Lease consolidation	20		14		7		(15		)	-		-		26		26
Asset impairments	-		2		2		-			-		-		4		4
Other costs associated with restructuring	1		1		2		1			-		-		5		5
Total restructuring and related expenses	$	53	$	55	$	26	$	19		$	-	$	8	$	161	$	161

As of September30, 2012, the Company's liabilities for its restructuring plans are as follows (in millions):

	AonHewitt Plan			AonBenfield Plan			2007Plan			Other			Total
Balance at December31, 2011	$	95		$	20		$	50		$	8		$	173
Expensed	56			8			-			-			64
Cash payments	(71		)	(20		)	(15		)	(3		)	(109		)
Foreign exchange translation and other	-			1			2			-			3
Balance at September30, 2012	$	80		$	9		$	37		$	5		$	131