EX-99.1 2 a06-17224_1ex99d1.htm EX-99

Exhibit 99.1

Aon Reports Second Quarter Results;

Provides Update on Sale of Aon Warranty Group

CHICAGO, IL — August 3, 2006 - Aon Corporation (NYSE: AOC) today reported second quarter and six months 2006 results.

Second quarter 2006 net income was $193 million or $0.57 per share, compared to $191 million or $0.57 per share in 2005; excluding restructuring charges under the company’s previously announced program, net income per share was $0.61 in second quarter 2006.  Six months 2006 net income was $391 million or $1.13 per share, compared to $391 million or $1.16 per share in 2005.

For the quarter, net income from continuing operations was $181 million or $0.53 per share, compared to $193 million or $0.58 per share a year ago.  Six months 2006 net income from continuing operations was $362 million or $1.05 per share, compared to $381 million or $1.13 per share a year ago.  Second quarter and six months 2005 results from continuing operations benefited by $0.10 per share from the favorable resolution of certain tax matters, resulting in unusually low effective tax rates.

Certain items influenced the second quarter and six month comparisons against the prior year and are detailed in the reconciliation of the impact of non-GAAP measures on pages 10 and 11.  On that basis, second quarter and six months 2006 earnings per share from continuing operations increased 29% and 20%, respectively, compared to a year ago.

Greg Case, Aon’s president and CEO, said, “This was a solid quarter for Aon.  We achieved good organic revenue growth in Americas Brokerage and Reinsurance, while maintaining expense discipline across the company.  The result is improvement in Aon’s underlying earnings, margin, and organic growth rate compared to last year.  We are making investments in our Consulting business which hold great promise, but which are affecting current performance.  In the Insurance Underwriting segment, strong sales of a supplemental health product contributed to significant profit growth and margin improvement.  With the pending disposition of Aon Warranty Group, we intend to focus future insurance underwriting activities solely on the business of Combined Insurance Company of America and its subsidiaries.”

Sale of Aon Warranty Group

As previously announced, during the quarter Aon signed a definitive agreement to sell Aon Warranty Group (AWG) and its worldwide operations, including Virginia Surety Company.   The operating results of this business, including related Corporate & Other segment investment



income, have been reclassified to discontinued operations for the second quarter and six month periods ending June 30, 2006 and 2005 (see “Discontinued Operations”).   The sale is expected to be completed in the fourth quarter of 2006.  Aon continues to explore strategic options with respect to its Specialty Property and Casualty businesses, which are not included in the AWG transaction.

Second Quarter Segment Review 

Risk and Insurance Brokerage Services second quarter revenue increased 5% to $1.4 billion, with 2% organic revenue growth.

Organic revenue in Brokerage-Americas rose 5%, primarily driven by our U.S. Retail business and growth in Affinity and Latin America.   Brokerage-International organic revenue declined 1% reflecting the negative impact of soft market conditions.  Reinsurance organic revenue grew 5% in the quarter, reflecting double-digit growth in the Americas and Asia driven by new business and improved pricing, partially offset by the impact of higher risk retention by clients and weaker pricing in the U.K. and European markets.

Second quarter pretax income increased 6% to $220 million from $208 million in 2005, and the pretax margin improved to 15.8% in 2006 from 15.6% in 2005.  Adjusting for the items detailed on page 11, the 2006 segment pretax margin improved by 240 basis points to 17.1% from 14.7%, principally due to revenue growth and the benefits of operational improvements and cost reduction initiatives.

Six months pretax income increased 5% to $469 million from $448 million, and the pretax margin improved to 16.8% from 16.7% in 2005.  Adjusting for the items detailed on page 11, the pretax margin improved to 17.5% in 2006 from 15.4% in 2005.

Consulting segment revenue of $309 million in the quarter reflects 1% organic growth driven primarily by Compensation Consulting and the recently established Financial Advisory and Litigation Consulting (FALC) unit.

Second quarter pretax income was $23 million, compared to $29 million in 2005. The pretax income decline was principally due to investments made in the FALC and Global Benefits practices, and reduced volumes from certain outsourcing clients.  The pretax margin was 7.4% in 2006 and 9.2% a year ago.    Adjusting for the items detailed on page 11, the pretax margin was 8.4%, compared to 8.9% a year ago.

Six months pretax income was $53 million, compared to $55 million, and the pretax margin was 8.6% in 2006, compared to 8.8% in 2005.  Excluding the items detailed on page 11, the consulting margin improved by 150 basis points over the first six months of 2005.

Insurance Underwriting revenue increased 9% to $556 million in the quarter, with segment organic revenue growth, which is based on written premiums and fees, of 10%.  In the Accident & Health and Life (A&H and Life) business, organic revenue grew 12% primarily driven by strong growth in a supplemental health product.

2



Second quarter pretax income rose 25% to $79 million reflecting improved profitability in A&H and Life and higher investment income.  The pretax margin improved to 14.2% in 2006 from 12.3% in 2005.

Six months pretax income increased 15.0% to $135 million, and the pretax margin improved to 12.2% from 11.5% in 2005.

Corporate and Other segment revenue was $18 million in the quarter, compared to $3 million in 2005.   The pretax loss in the Corporate and Other segment was $46 million, compared with a loss of $54 million a year ago.

The pretax loss for six months was $103 million, compared to a pretax loss of $80 million a year ago.  Six months 2006 results included a $17 million pretax loss related to the revaluation of Endurance warrants, compared to a $15 million pretax gain in 2005.

Restructuring Plan

The previously announced three-year restructuring plan is currently expected to result in cumulative pretax charges of approximately $300 million, including employee termination and lease consolidation costs, asset impairments, and other costs associated with the restructuring.  The increase from our previous estimate results primarily from newly identified IT cost saving initiatives.   Annualized cost savings are now targeted at approximately $195 million by 2008.  Certain aspects of the plan are not finalized, and actual total costs, the timing of the costs, and ultimate savings may vary from the estimates due to changes in the scope or assumptions underlying this plan.   An analysis of restructuring-related expenses by segment for the second quarter and six months of 2006 is presented in the attached reconciliation of non-GAAP measures.

Actual and estimated restructuring costs by reporting period, by type, and by geographic region are detailed on page 12.

Discontinued Operations

The second quarter after-tax income from discontinued operations was $12 million ($0.04 per share) in 2006 and a $2 million after-tax loss ($0.01 per share) in 2005, primarily reflecting the reclassification of AWG.  Selected financial information relating to AWG is included on page 13.

The effective tax rates on discontinued operations were unusually high for 2005 reflecting deferred tax adjustments relating to AWG.

Effective Tax Rate 

The effective tax rate for continuing operations was 34.4% for the second quarter of 2006 compared to 21.5% for the second quarter of 2005.   The year-to-date effective tax rates for the six months ending June 30, 2006 and 2005 were 34.7% and 29.4%, respectively.  The effective tax rates for 2005 were unusually low reflecting the favorable resolution of certain tax matters.

3



Foreign Exchange Impact

Second quarter 2006 earnings per share were positively affected by $0.01 related to foreign currency translation gains relative to the second quarter of 2005.  In addition, second quarter 2006 earnings per share included $0.01 of currency hedging losses compared to $0.02 of hedging gains in 2005.

Accounting Change 

As of January 1, 2006, Aon adopted FASB Statement No.123(R) using the modified prospective transition method, as permitted.  Accordingly, prior period amounts have not been restated.

Stock option-based compensation expense (included in compensation and benefits expense) related to the adoption of Statement No.123(R) was $6 million pretax or $0.01 per share in the second quarter of 2006, and $13 million pretax or $0.02 per share for the six months of 2006.

Financial Condition

Total debt and preferred stock increased $201 million to $2.1 billion at June 30, 2006 from June 30, 2005.  Total debt and preferred stock as a percentage of total capital increased to 28% from 27% over the same period.  Stockholders’ equity was $5.4 billion at June 30, 2006.  Compared to December 31, 2005, total debt decreased $9 million.

Approximately 94% of Aon’s investment portfolio at quarter end was in short-term and fixed maturities, with 99% of the fixed income securities rated investment grade.

Stock Repurchase Program

During the second quarter of 2006, Aon completed the repurchase of approximately 5.6 million shares of common stock for $221 million.  Through June 30, 2006, the Company has repurchased approximately 12.4 million shares for $493 million under the existing $1 billion buyback authorization announced in November 2005.

The Company will host an audio webcast to discuss second quarter results on Friday, August 4 at 10:00 a.m. central time that can be accessed at www.aon.com.

Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting.  There are 46,000 employees working in Aon’s 500 offices in more than 120 countries.  Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding

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of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to execute the stock repurchase program, our ability to execute the planned sale of the Aon Warranty Group, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates.  Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s filings with the Securities and Exchange Commission.

This press release includes supplemental information related to organic revenue growth, a measure that management believes is important to evaluate changes in revenue from existing operations.  We believe that this supplemental information is helpful to investors.  Organic revenue growth excludes from reported revenues the impact of foreign exchange, acquisitions, divestitures, transfers between business units, investment income, reimbursable expenses, unusual items, and for the underwriting segment only, an adjustment between written and earned premium.  A reconciliation is provided in the attached schedules.  The supplemental organic revenue growth information does not affect net income or any other GAAP reported amounts.  It should be viewed in addition to, not in lieu of, the Company’s Consolidated Summary of Operations.  Industry peers provide similar supplemental information regarding their revenue performance, although they may not make identical adjustments.

This press release also includes supplemental information related to several measures - income per share, expenses, and margins - that exclude the effects of the restructuring charges and certain other noteworthy items that impacted revenue and pretax income in the comparable periods.  Management believes that these measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors.  The measures that exclude the effects of the restructuring charges and certain other items do not affect net income or any other GAAP reported amounts.  They should be viewed in addition to, not in lieu of, the Company’s Consolidated Summary of Operations.  Industry peers provide similar supplemental information regarding their performance, although they may not make identical adjustments.

###

Investor Contact:

Julie Ann Kotowski

 

Investor Relations

 

312-381-3983

 

 

Media Contact:

Al Orendorff

 

Director, Public Relations

 

312-381-3153

 

5



 

Aon Corporation

Consolidated Summary of Operations

 

 

 

Second Quarter Ended

 

Six Months Ended

 

(millions except per share data)

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage commissions and fees

 

$

1,657

 

$

1,610

 

3

%

$

3,277

 

$

3,236

 

1

%

Premiums and other

 

522

 

482

 

8

 

1,041

 

957

 

9

 

Investment income

 

86

 

56

 

54

 

177

 

133

 

33

 

Total revenue

 

2,265

 

2,148

 

5

 

4,495

 

4,326

 

4

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

1,136

 

1,081

 

5

 

2,237

 

2,167

 

3

 

Other general expenses

 

471

 

471

 

—

 

946

 

910

 

4

 

Benefits to policyholders

 

292

 

258

 

13

 

581

 

520

 

12

 

Depreciation and amortization

 

55

 

59

 

(7

)

110

 

121

 

(9

)

Interest expense

 

34

 

31

 

10

 

65

 

65

 

—

 

Provision for New York and other state settlements

 

1

 

2

 

(50

)

2

 

3

 

(33

)

Total expenses

 

1,989

 

1,902

 

5

 

3,941

 

3,786

 

4

 

Income from continuing operations before provision for income tax

 

276

 

246

 

12

 

554

 

540

 

3

 

Provision for income tax (3)

 

95

 

53

 

79

 

192

 

159

 

21

 

Income from continuing operations

 

181

 

193

 

(6

)

362

 

381

 

(5

)

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

20

 

43

 

(53

)

47

 

62

 

(24

)

Provision for income tax (4)

 

8

 

45

 

(82

)

19

 

52

 

(63

)

Income (loss) from discontinued operations

 

12

 

(2

)

N/A

 

28

 

10

 

180

 

Income before accounting change

 

193

 

191

 

1

 

390

 

391

 

—

 

Cumulative effect of change in accounting principle, net of tax (2)

 

—

 

—

 

N/A

 

1

 

—

 

N/A

 

Net income

 

$

193

 

$

191

 

1

%

$

391

 

$

391

 

—

%

Preferred stock dividends

 

—

 

—

 

—

 

—

 

(1

)

(100

)

Net income available for common stockholders

 

$

193

 

$

191

 

1

%

$

391

 

$

390

 

—

%

Basic net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.56

 

$

0.60

 

(7

)%

$

1.13

 

$

1.18

 

(4

)%

Discontinued operations

 

0.04

 

(0.01

)

N/A

 

0.09

 

0.03

 

200

 

Cumulative effect of change in accounting principle

 

—

 

—

 

—

 

—

 

—

 

—

 

Net income

 

$

0.60

 

$

0.59

 

2

%

$

1.22

 

$

1.21

 

1

%

Diluted net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.53

 

$

0.58

 

(9

)%

$

1.05

 

$

1.13

 

(7

)%

Discontinued operations

 

0.04

 

(0.01

)

N/A

 

0.08

 

0.03

 

167

 

Cumulative effect of change in accounting principle

 

—

 

—

 

—

 

—

 

—

 

—

 

Net income

 

$

0.57

 

$

0.57

 

—

%

$

1.13

 

$

1.16

 

(3

)%

Diluted average common and common equivalent shares outstanding

 

344.8

 

338.5

 

2

%

347.5

 

337.8

 

3

%

(1)        Certain amounts relating to discontinued operations have been reclassified to conform to the 2006 presentation.

(2)        Adoption of FASB Statement No. 123(R), “Share-Based Payments,”  effective January 1, 2006.

(3)                        Tax rate from continuing operations is 34.4% and 21.5% for the second quarters ended June 30, 2006 and 2005, respectively, and 34.7% and 29.4% for the six month periods ended June 30, 2006 and 2005, respectively.

(4)                        Tax rate from discontinued operations is 40% and 104.7% for the second quarters ended June 30, 2006 and 2005, respectively, and 40.4% and 83.9% for the six month periods ended June 30, 2006 and 2005, respectively.

 

6



Aon Corporation

Revenue From Continuing Operations

 

 

 

Second Quarter Ended

 

(millions)

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

Less:
Currency
Impact

 

Less:
Acquisitions,
Divestitures &
Transfers

 

Less: All
Other (2)

 

Organic
Revenue
Growth (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk and insurance brokerage services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk management and insurance brokerage - Americas

 

$

591

 

$

539

 

10

%

2

%

3

%

—

%

5

%

Risk management and insurance brokerage - International

 

590

 

592

 

—

 

(1

)

2

 

—

 

(1

)

Reinsurance brokerage and related services

 

214

 

203

 

5

 

(1

)

(3

)

4

 

5

 

Total risk and insurance brokerage services

 

1,395

 

1,334

 

5

 

—

 

2

 

1

 

2

 

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting services

 

237

 

244

 

(3

)

—

 

(5

)

1

 

1

 

Outsourcing

 

72

 

71

 

1

 

1

 

2

 

(2

)

—

 

Total consulting

 

309

 

315

 

(2

)

—

 

(3

)

—

 

1

 

Insurance underwriting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accident & health and life

 

499

 

450

 

11

 

—

 

—

 

(1

)

12

 

Property & casualty

 

57

 

61

 

(7

)

—

 

—

 

—

 

(7

)

Total insurance underwriting

 

556

 

511

 

9

 

—

 

—

 

(1

)

10

 

Corporate and other

 

18

 

3

 

500

 

N/A

 

N/A

 

N/A

 

N/A

 

Intersegment revenues

 

(13

)

(15

)

N/A

 

N/A

 

N/A

 

N/A

 

N/A

 

Total

 

$

2,265

 

$

2,148

 

5

%

—

%

1

%

—

%

4

%

 

 

 

Six Months Ended

 

(millions)

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

Less:
Currency
Impact

 

Less:
Acquisitions,
Divestitures &
Transfers

 

Less: All
Other (2)

 

Organic
Revenue
Growth (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk and insurance brokerage services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk management and insurance brokerage - Americas

 

$

1,121

 

$

991

 

13

%

1

%

2

%

5

%

5

%

Risk management and insurance brokerage - International

 

1,207

 

1,252

 

(4

)

(4

)

1

 

(1

)

—

 

Reinsurance brokerage and related services

 

460

 

443

 

4

 

(2

)

—

 

4

 

2

 

Total risk and insurance brokerage services

 

2,788

 

2,686

 

4

 

(2

)

2

 

2

 

2

 

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting services

 

475

 

484

 

(2

)

(1

)

(4

)

—

 

3

 

Outsourcing

 

142

 

140

 

1

 

(1

)

3

 

(3

)

2

 

Total consulting

 

617

 

624

 

(1

)

(1

)

(3

)

1

 

2

 

Insurance underwriting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accident & health and life

 

980

 

890

 

10

 

—

 

—

 

(1

)

11

 

Property & casualty

 

127

 

126

 

1

 

—

 

—

 

(13

)

14

 

Total insurance underwriting

 

1,107

 

1,016

 

9

 

—

 

—

 

(2

)

11

 

Corporate and other

 

15

 

30

 

(50

)

N/A

 

N/A

 

N/A

 

N/A

 

Intersegment revenues

 

(32

)

(30

)

N/A

 

N/A

 

N/A

 

N/A

 

N/A

 

Total

 

$

4,495

 

$

4,326

 

4

%

(1

)%

1

%

—

%

4

%

(1)             Certain amounts relating to discontinued operations have been reclassified to conform to the 2006 presentation.

(2)             Includes the impact of investment income, reimbursable expenses, adjustment between written and earned premium and fees in insurance underwriting only, and unusual items.

(3)             Organic revenue growth excludes the impact of foreign exchange, acquisitions, divestitures, transfers and items described in (2).  Written premiums and fees are the basis for organic revenue growth within the Insurance Underwriting segment.

 

7



Aon Corporation

Risk and Insurance Brokerage Services  - Continuing Operations

 

 

Second Quarter Ended

 

Six Months Ended

 

(millions)

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and other revenue

 

$

1,355

 

$

1,306

 

4

%

$

2,682

 

$

2,633

 

2

%

Investment income

 

40

 

28

 

43

 

106

 

53

 

100

 

Total revenue

 

1,395

 

1,334

 

5

 

2,788

 

2,686

 

4

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

826

 

781

 

6

 

1,627

 

1,570

 

4

 

Other expenses

 

349

 

345

 

1

 

692

 

668

 

4

 

Total expenses

 

1,175

 

1,126

 

4

 

2,319

 

2,238

 

4

 

Income from continuing operations before provision for income tax

 

$

220

 

$

208

 

6

%

$

469

 

$

448

 

5

%

Pretax margin - income from continuing operations before provision for income tax

 

15.8

%

15.6

%

 

 

16.8

%

16.7

%

 

 

 

 

Consulting - Continuing Operations

 

 

 

Second Quarter Ended

 

Six Months Ended

 

(millions)

 

June 30,
2006

 

June 30,
2005

 

Percent
Change

 

June 30,
2006

 

June 30,
2005

 

Percent
Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and other revenue

 

$

308

 

$

314

 

(2

)%

$

614

 

$

622

 

(1

)%

Investment income

 

1

 

1

 

—

 

3

 

2

 

50

 

Total revenue

 

309

 

315

 

(2

)

617

 

624

 

(1

)

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

202

 

198

 

2

 

396

 

395

 

—

 

Other expenses

 

84

 

88

 

(5

)

168

 

174

 

(3

)

Total expenses

 

286

 

286

 

—

 

564

 

569

 

(1

)

Income from continuing operations before provision for income tax

 

$

23

 

$

29

 

(21

)%

$

53

 

$

55

 

(4

)%

Pretax margin - income from continuing operations before provision for income tax

 

7.4

%

9.2

%

 

 

8.6

%

8.8

%

 

 

 

(1)             Certain amounts relating to discontinued operations have been reclassified to conform to the 2006 presentation.

 

8



Aon Corporation

Insurance Underwriting - Continuing Operations

 

 

 

 

Second Quarter Ended

 

Six Months Ended

 

(millions)

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums and other

 

$

529

 

$

487

 

9

%

$

1,054

 

$

968

 

9

%

Investment income

 

27

 

24

 

13

 

53

 

48

 

10

 

Total revenue

 

556

 

511

 

9

 

1,107

 

1,016

 

9

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits to policyholders

 

292

 

258

 

13

 

581

 

520

 

12

 

Compensation and benefits

 

97

 

92

 

5

 

195

 

186

 

5

 

Other expenses

 

88

 

98

 

(10

)

196

 

193

 

2

 

Total expenses

 

477

 

448

 

6

 

972

 

899

 

8

 

Income from continuing operations before provision for income tax

 

$

79

 

$

63

 

25

%

$

135

 

$

117

 

15

%

Pretax margin—income from continuing operations before provision for income tax

 

14.2

%

12.3

%

 

 

12.2

%

11.5

%

 

 

 

 

Corporate and Other - Continuing Operations

 

 

 

Second Quarter  Ended

 

Six Months Ended

 

(millions)

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

June 30,
2006

 

June 30,
2005 (1)

 

Percent
Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from marketable equity securities and other investments (2)

 

$

17

 

$

10

 

70

%

$

20

 

$

38

 

(47

)%

Limited partnership investments

 

1

 

—

 

N/A

 

1

 

1

 

—

 

Net loss on disposals and related expenses

 

—

 

(7

)

N/A

 

(6

)

(9

)

N/A

 

Total revenue

 

18

 

3

 

500

 

15

 

30

 

(50

)

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

11

 

10

 

10

 

19

 

16

 

19

 

Other general expenses

 

19

 

16

 

19

 

34

 

29

 

17

 

Interest expense

 

34

 

31

 

10

 

65

 

65

 

—

 

Total expenses

 

64

 

57

 

12

 

118

 

110

 

7

 

Loss from continuing operations before provision for income tax

 

$

(46

)

$

(54

)

N/A

%

$

(103

)

$

(80

)

N/A

%

 

(1)             Certain amounts related to discontinued operations have been reclassified to conform to the 2006 presentation.

(2)             Includes gain (loss) from Endurance warrants of ($17) million for the six months ended June 30, 2006 and ($1) million and $15 million for the second quarter and six months ended June 30, 2005, respectively.

9



Aon Corporation

Reconciliation of the Impact of Non-GAAP Measures on Diluted Earnings Per Share

Second Quarter and Six Months Ended June 30, 2006 and 2005

 

 

Second Quarter Ended

 

Six Months Ended

 

 

 

June 30,
2006

 

June 30,
2005

 

Percent
Change

 

June 30,
2006

 

June 30,
2005

 

Percent
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations - as reported

 

$

0.53

 

$

0.58

 

(9

)%

$

1.05

 

$

1.13

 

(7

)%

After tax earnings per share adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

0.04

 

—

 

 

 

0.10

 

—

 

 

 

Contingent commissions

 

(0.01

)

(0.01

)

 

 

(0.02

)

(0.03

)

 

 

Stock option expense

 

0.01

 

—

 

 

 

0.02

 

—

 

 

 

Hedging (gains) losses

 

0.01

 

(0.02

)

 

 

0.01

 

(0.04

)

 

 

Favorable resolution of tax contingencies and deferred tax adjustments

 

—

 

(0.10

)

 

 

—

 

(0.10

)

 

 

Gain on sale of Cambridge preferred stock investment

 

—

 

—

 

 

 

(0.07

)

—

 

 

 

Endurance warrants

 

—

 

—

 

 

 

0.03

 

(0.03

)

 

 

Total after tax earnings per share adjustments

 

0.05

 

(0.13

)

 

 

0.07

 

(0.20

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations - as adjusted

 

0.58

 

0.45

 

29

 

1.12

 

0.93

 

20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from discontinued operations - as reported

 

0.04

 

(0.01

)

 

 

0.08

 

0.03

 

 

 

Deferred tax adjustments attributable to Aon Warranty Group

 

—

 

0.09

 

 

 

—

 

0.09

 

 

 

Diluted earnings per share from discontinued operations - as adjusted

 

0.04

 

0.08

 

(50

)

0.08

 

0.12

 

(33

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total diluted earnings per share - as adjusted

 

$

0.62

 

$

0.53

 

17

%

$

1.20

 

$

1.05

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted average common and common equivalent shares outstanding (millions)

 

344.8

 

338.5

 

 

 

347.5

 

337.8

 

 

 

 

 

10



Aon Corporation
Reconciliation of Non-GAAP Measures - Segments
Second Quarter and Six Months Ended June 30, 2006 and 2005 (1)

 

 

Second Quarter Ended June 30, 2006

 

Six Months Ended June 30, 2006

 

(millions)

 

Risk and
Insurance
Brokerage
Services

 

Consulting

 

Insurance 
Underwriting

 

Corporate &
Other

 

Total

 

Risk and
Insurance
Brokerage
Services

 

Consulting

 

Insurance 
Underwriting

 

Corporate &
Other

 

Total

 

Revenue as reported

 

$

1,395

 

$

309

 

$

556

 

$

5

 

$

2,265

 

$

2,788

 

$

617

 

$

1,107

 

$

(17

)

$

4,495

 

Gain on sale of Cambridge preferred stock investment

 

—

 

—

 

—

 

—

 

—

 

(35

)

—

 

—

 

—

 

(35

)

Contingent commissions

 

(7

)

—

 

—

 

—

 

(7

)

(13

)

—

 

—

 

—

 

(13

)

Endurance warrants

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

17

 

17

 

Revenue as adjusted

 

$

1,388

 

$

309

 

$

556

 

$

5

 

$

2,258

 

$

2,740

 

$

617

 

$

1,107

 

$

—

 

$

4,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before provision for income tax - as reported

 

$

220

 

$

23

 

$

79

 

$

(46

)

$

276

 

$

469

 

$

53

 

$

135

 

$

(103

)

$

554

 

Restructuring charges

 

17

 

2

 

—

 

—

 

19

 

43

 

8

 

—

 

1

 

52

 

Contingent commissions

 

(7

)

—

 

—

 

—

 

(7

)

(13

)

—

 

—

 

—

 

(13

)

Stock option expense

 

4

 

1

 

1

 

—

 

6

 

9

 

2

 

2

 

—

 

13

 

Hedging losses

 

3

 

—

 

—

 

—

 

3

 

6

 

—

 

—

 

—

 

6

 

Gain on sale of Cambridge preferred stock investment

 

—

 

—

 

—

 

—

 

—

 

(35

)

—

 

—

 

—

 

(35

)

Endurance warrants

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

17

 

17

 

Income (loss) from continuing operations before provision for income tax - as adjusted

 

$

237

 

$

26

 

$

80

 

$

(46

)

$

297

 

$

479

 

$

63

 

$

137

 

$

(85

)

$

594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before provision for income tax - margins as adjusted

 

17.1

%

8.4

%

14.4

%

N/A

 

13.2

%

17.5

%

10.2

%

12.4

%

N/A

 

13.3

%

 

 

 

Second Quarter Ended June 30, 2005

 

Six Months Ended June 30, 2005

 

(millions)

 

Risk and
Insurance
Brokerage
Services

 

Consulting

 

Insurance
Underwriting

 

Corporate &
Other

 

Total

 

Risk and
Insurance
Brokerage
Services

 

Consulting

 

Insurance
Underwriting

 

Corporate &
Other

 

Total

 

Revenue as reported

 

$

1,334

 

$

315

 

$

511

 

$

(12

)

$

2,148

 

$

2,686

 

$

624

 

$

1,016

 

$

—

 

$

4,326

 

Contingent commissions

 

(3

)

(1

)

—

 

—

 

(4

)

(16

)

(1

)

—

 

—

 

(17

)

Endurance warrants

 

—

 

—

 

—

 

1

 

1

 

—

 

—

 

—

 

(15

)

(15

)

Revenue as adjusted

 

$

1,331

 

$

314

 

$

511

 

$

(11

)

$

2,145

 

$

2,670

 

$

623

 

$

1,016

 

$

(15

)

$

4,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before provision for income tax - as reported

 

$

208

 

$

29

 

$

63

 

$

(54

)

$

246

 

$

448

 

$

55

 

$

117

 

$

(80

)

$

540

 

Contingent commissions

 

(3

)

(1

)

—

 

—

 

(4

)

(16

)

(1

)

—

 

—

 

(17

)

Hedging gains

 

(9

)

—

 

—

 

—

 

(9

)

(20

)

—

 

—

 

—

 

(20

)

Endurance warrants

 

—

 

—

 

—

 

1

 

1

 

—

 

—

 

—

 

(15

)

(15

)

Income (loss) from continuing operations before provision for income tax - as adjusted

 

$

196

 

$

28

 

$

63

 

$

(53

)

$

234

 

$

412

 

$

54

 

$

117

 

$

(95

)

$

488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations
before  provision for income
tax - margins as adjusted

 

14.7

%

8.9

%

12.3

%

N/A

 

10.9

%

15.4

%

8.7

%

11.5

%

N/A

 

11.4

%

(1)    Certain noteworthy items impacted revenue and pretax income in 2006 and 2005, which are described in this schedule. The pretax income (loss) amounts and related margins shown in the captions “Income (loss) from continuing operations before provision for income tax - as adjusted” are non-GAAP measures.

 

 

11



Aon Corporation

2005 Restructuring Plan

 

By Type:

 

 

 

 

Actual

 

Estimated

 

(millions)

 

Full Year
2005

 

First
Quarter
2006

 

Second
Quarter
2006

 

Total
Incurred to
Date

 

Remainder
of 2006

 

2007

 

Total

 

Workforce reduction

 

$

116

 

$

25

 

$

7

 

$

148

 

$

32

 

$

7

 

$

187

 

Lease consolidation

 

20

 

5

 

7

 

32

 

22

 

10

 

64

 

Asset impairments

 

17

 

1

 

1

 

19

 

6

 

—

 

25

 

Other costs associated with restructuring

 

5

 

2

 

4

 

11

 

9

 

4

 

24

 

Total restructuring and related expenses

 

$

158

 

$

33

 

$

19

 

$

210

 

$

69

 

$

21

 

$

300

 

 

 

By Region:

 

 

(millions)

 

United
States

 

United
Kingdom

 

Continent of
Europe

 

Rest of
World

 

Total

 

2005 (incurred)

 

$

28

 

$

92

 

$

30

 

$

8

 

$

158

 

2006 (incurred – 1st Qtr.)

 

12

 

13

 

5

 

3

 

33

 

2006 (incurred – 2nd Qtr.)

 

3

 

15

 

—

 

1

 

19

 

2006 remaining (estimated)

 

15

 

36

 

14

 

4

 

69

 

2007 (estimated)

 

16

 

2

 

2

 

1

 

21

 

Total incurred and remaining estimated

 

$

74

 

$

158

 

$

51

 

$

17

 

$

300

 

 

 

12



Aon Corporation
Aon Warranty Group

(millions except per share data)

 

2005

 

2006

 

 

 

1st
Quarter

 

2nd
Quarter

 

3rd
Quarter

 

4th
Quarter (1)

 

Full
Year

 

1st
Quarter

 

2nd
Quarter

 

Six
Months

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage commissions and fees

 

$

49

 

$

54

 

$

52

 

$

8

 

$

163

 

$

44

 

$

46

 

$

90

 

Premiums and other

 

223

 

236

 

246

 

196

 

901

 

230

 

243

 

473

 

Investment income - from Insurance Underwriting segment

 

12

 

15

 

15

 

15

 

57

 

16

 

18

 

34

 

Invesment income - from Corporate & Other segment

 

2

 

3

 

3

 

3

 

11

 

3

 

3

 

6

 

Total revenue

 

286

 

308

 

316

 

222

 

1,132

 

293

 

310

 

603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General expenses

 

134

 

159

 

152

 

67

 

512

 

135

 

145

 

280

 

Benefits to policyholders

 

131

 

123

 

130

 

119

 

503

 

130

 

141

 

271

 

Depreciation & amortization

 

5

 

3

 

3

 

6

 

17

 

2

 

3

 

5

 

Total expenses

 

270

 

285

 

285

 

192

 

1,032

 

267

 

289

 

556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income tax

 

16

 

23

 

31

 

30

 

100

 

26

 

21

 

47

 

Provision for income tax

 

6

 

36

 

11

 

10

 

63

 

9

 

7

 

16

 

Net income (loss)

 

$

10

 

$

(13

)

$

20

 

$

20

 

$

37

 

$

17

 

$

14

 

$

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

$

0.03

 

$

(0.04

)

$

0.06

 

$

0.06

 

$

0.11

 

$

0.05

 

$

0.04

 

$

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive net income (loss) per share

 

$

0.03

 

$

(0.04

)

$

0.06

 

$

0.06

 

$

0.11

 

$

0.05

 

$

0.04

 

$

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive average common and common equivalent shares outstanding

 

337.1

 

338.5

 

342.7

 

347.5

 

341.5

 

350.2

 

344.8

 

347.5

 

 

(1)             The change in the quarterly pattern of revenue and expense primarily reflects cumulative reclassifications.

13



Aon Corporation

Consolidated Summary of Operations - Reclassified for Discontinued Operations

 

2005

 

2006

 

(millions except per share data)

 

1st
Quarter

 

2nd
Quarter

 

3rd
Quarter

 

4th
Quarter

 

Full Year

 

1st
Quarter

 

2nd
Quarter

 

Six
Months

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage commissions and fees

 

$

1,626

 

$

1,610

 

$

1,530

 

$

1,717

 

$

6,483

 

$

1,620

 

$

1,657

 

$

3,277

 

Premiums and other

 

475

 

482

 

486

 

504

 

1,947

 

519

 

522

 

1,041

 

Investment income

 

77

 

56

 

55

 

87

 

275

 

91

 

86

 

177

 

Total revenue

 

2,178

 

2,148

 

2,071

 

2,308

 

8,705

 

2,230

 

2,265

 

4,495

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General expenses

 

1,525

 

1,552

 

1,543

 

1,782

 

6,402

 

1,576

 

1,607

 

3,183

 

Benefits to policyholders

 

262

 

258

 

272

 

256

 

1,048

 

289

 

292

 

581

 

Depreciation & amortization

 

62

 

59

 

77

 

62

 

260

 

55

 

55

 

110

 

Interest expense

 

34

 

31

 

29

 

31

 

125

 

31

 

34

 

65

 

Provision for New York and other state settlements

 

1

 

2

 

1

 

1

 

5

 

1

 

1

 

2

 

Total expenses

 

1,884

 

1,902

 

1,922

 

2,132

 

7,840

 

1,952

 

1,989

 

3,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before provision for income tax

 

294

 

246

 

149

 

176

 

865

 

278

 

276

 

554

 

Provision for income tax

 

106

 

53

 

49

 

52

 

260

 

97

 

95

 

192

 

Income from continuing operations

 

188

 

193

 

100

 

124

 

605

 

181

 

181

 

362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Discontinued Operations

 

19

 

43

 

34

 

234

 

330

 

27

 

20

 

47

 

Provision for income tax

 

7

 

45

 

12

 

134

 

198

 

11

 

8

 

19

 

Income (loss) from discontinued operations

 

12

 

(2

)

22

 

100

 

132

 

16

 

12

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before accounting change

 

200

 

191

 

122

 

224

 

737

 

197

 

193

 

390

 

Cumulative effect of change in accounting principle, net of tax

 

—

 

—

 

—

 

—

 

—

 

1

 

—

 

1

 

Net income

 

$

200

 

$

191

 

$

122

 

$

224

 

$

737

 

$

198

 

$

193

 

$

391

 

Preferred stock dividends

 

(1

)

—

 

(1

)

—

 

(2

)

—

 

—

 

—

 

Net income available for common stockholders

 

$

199

 

$

191

 

$

121

 

$

224

 

$

735

 

$

198

 

$

193

 

$

391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.58

 

$

0.60

 

$

0.30

 

$

0.38

 

$

1.87

 

$

0.56

 

$

0.56

 

$

1.13

 

Discontinued operations

 

0.04

 

(0.01

)

0.07

 

0.31

 

0.41

 

0.05

 

0.04

 

0.09

 

Cumulative effect of change in accounting principle

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

Net income

 

$

0.62

 

$

0.59

 

$

0.37

 

$

0.69

 

$

2.28

 

$

0.61

 

$

0.60

 

$

1.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.55

 

$

0.58

 

$

0.30

 

$

0.36

 

$

1.78

 

$

0.52

 

$

0.53

 

$

1.05

 

Discontinued operations

 

0.04

 

(0.01

)

0.06

 

0.29

 

0.39

 

0.05

 

0.04

 

0.08

 

Cumulative effect of change in accounting principle

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

Net income

 

$

0.59

 

$

0.57

 

$

0.36

 

$

0.65

 

$

2.17

 

$

0.57

 

$

0.57

 

$

1.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive average common and common equivalent shares outstanding

 

337.1

 

338.5

 

342.7

 

347.5

 

341.5

 

350.2

 

344.8

 

347.5

 

 

 

14



Aon Corporation
Segments – Reclassification for Discontinued Operations

 

 

2005

 

2006

 

(millions)

 

1st
Quarter

 

2nd
Quarter

 

3rd
Quarter

 

4th
Quarter

 

Full Year

 

1st
Quarter

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk and insurance brokerage services

 

$

1,352

 

$

1,334

 

$

1,280

 

$

1,434

 

$

5,400

 

$

1,393

 

Consulting

 

309

 

315

 

295

 

336

 

1,255

 

308

 

Insurance underwriting :

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

789

 

816

 

827

 

756

 

3,188

 

841

 

Less: reclassification to discontinued operations

 

(284

)

(305

)

(313

)

(219

)

(1,121

)

(290

)

As reclassified

 

505

 

511

 

514

 

537

 

2,067

 

551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other:

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

29

 

6

 

—

 

21

 

56

 

—

 

Less: reclassification to discontinued operations

 

(2

)

(3

)

(3

)

(3

)

(11

)

(3

)

As reclassified

 

27

 

3

 

(3

)

(18

)

45

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment revenues

 

(15

)

(15

)

(15

)

(17

)

(62

)

(19

)

Total

 

$

2,178

 

$

2,148

 

$

2,071

 

$

2,308

 

$

8,705

 

$

2,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk and insurance brokerage services

 

$

240

 

$

208

 

$

137

 

$

134

 

$

719

 

$

249

 

Consulting

 

26

 

29

 

15

 

40

 

110

 

30

 

Insurance underwriting :

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

68

 

83

 

84

 

79

 

314

 

79

 

Less: reclassification to discontinued operations

 

(14

)

(20

)

(28

)

(27

)

(89

)

(23

)

As reclassified

 

54

 

63

 

56

 

52

 

225

 

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other:

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

(24

)

(51

)

(56

)

(47

)

(178

)

(54

)

Less: reclassification to discontinued operations

 

(2

)

(3

)

(3

)

(3

)

(11

)

(3

)

As reclassified

 

(26

)

(54

)

(59

)

(50

)

(189

)

(57

)

Total

 

$

294

 

$

246

 

$

149

 

$

176

 

$

865

 

$

278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax - margins

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk and insurance brokerage services

 

17.8

%

15.6

%

10.7

%

9.3

%

13.3

%

17.9

%

Consulting

 

8.4

%

9.2

%

5.1

%

11.9

%

8.8

%

9.7

%

Insurance underwriting

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

8.6

%

10.2

%

10.2

%

10.4

%

9.8

%

9.4

%

As reclassified

 

10.7

%

12.3

%

10.9

%

9.7

%

10.9

%

10.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

12.6

%

11.0

%

7.5

%

8.1

%

9.8

%

12.0

%

As reclassified

 

13.5

%

11.5

%

7.2

%

7.6

%

9.9

%

12.5

%

 

 

15



Aon Corporation

Preliminary Condensed Consolidated Statements of Financial Position

 

 

As of

 

(billions)

 

Jun. 30, 2006

 

Dec. 31, 2005

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Investments

 

 

 

 

 

Fixed maturities at fair value

 

$

2.8

 

$

2.8

 

Short-term investments

 

4.1

 

4.0

 

Other investments

 

0.5

 

0.5

 

Total investments

 

7.4

 

7.3

 

Cash

 

0.4

 

0.5

 

Receivables

 

10.3

 

9.1

 

Deferred Policy Acquisition Costs

 

0.6

 

0.5

 

Goodwill

 

4.4

 

4.2

 

Other Intangible Assets

 

0.1

 

0.1

 

Property and Equipment, net

 

0.5

 

0.5

 

Assets Held for Sale

 

4.1

 

3.9

 

Other Assets

 

2.2

 

1.7

 

TOTAL ASSETS

 

$

30.0

 

$

27.8

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Insurance Premiums Payable

 

$

11.0

 

$

9.4

 

Policy Liabilities

 

 

 

 

 

Future policy benefits

 

1.8

 

1.7

 

Policy and contract claims

 

1.6

 

1.6

 

Unearned and advance premiums and contract fees

 

0.5

 

0.5

 

Total Policy Liabilities

 

3.9

 

3.8

 

General Liabilities

 

 

 

 

 

General expenses

 

1.5

 

1.6

 

Notes payable

 

2.1

 

2.1

 

Pension, post-employment and post-retirement liabilities

 

1.6

 

1.5

 

Liabilities held for sale

 

3.5

 

3.3

 

Other liabilities

 

1.0

 

0.8

 

TOTAL LIABILITIES

 

24.6

 

22.5

 

Stockholders’ Equity

 

5.4

 

5.3

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

30.0

 

$

27.8

 

 

 

16