EX-99.1 2 a06-25104_1ex99d1.htm EX-99

Exhibit 99.1

Aon Corporation

Pro Forma Statement of Financial Position

As of September 30, 2006

(unaudited)

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

Pro Forma

 

Pro Forma

 

ASSETS

 

 

 

Historical

 

Adjustments

 

Adjusted

 

Investments

 

 

 

 

 

 

 

Fixed maturities at fair value

 

$

2,962

 

$

—

 

$

2,962

 

Short-term investments

 

3,647

 

—

 

3,647

 

Other investments

 

463

 

—

 

463

 

Total investments

 

7,072

 

—

 

7,072

 

Cash

 

461

 

795

(2)

1,256

 

Receivables

 

8,907

 

—

 

8,907

 

Deferred Policy Acquisition Costs

 

524

 

—

 

524

 

Goodwill & Other Intangible Assets

 

4,546

 

—

 

4,546

 

Assets Held for Sale

 

4,672

 

(4,672

)(1)

—

 

Property and Equipment and Other Assets

 

2,501

 

(63

)(3)

2,438

 

TOTAL ASSETS

 

$

28,683

 

$

(3,940

)

$

24,743

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Insurance Premiums Payable

 

$

9,332

 

$

—

 

$

9,332

 

 Policy Liabilities

 

 

 

 

 

 

 

Future policy benefits

 

1,764

 

—

 

1,764

 

Policy and contract claims

 

1,468

 

—

 

1,468

 

Unearned and advance premiums and contract fees

 

364

 

—

 

364

 

Other policyholder funds

 

23

 

—

 

23

 

Total Policy Liabilities

 

3,619

 

—

 

3,619

 

General Liabilities

 

 

 

 

 

 

 

General expenses

 

1,544

 

60

(4)

1,604

 

Notes payable and short-term borrowings

 

2,343

 

—

 

2,343

 

Pension, post-employment and post-retirement liabilities

 

1,734

 

—

 

1,734

 

Liabilities held for sale

 

3,976

 

(3,976

)(1)

—

 

Other liabilities

 

763

 

—

 

763

 

TOTAL LIABILITIES

 

23,311

 

(3,916

)

19,395

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

5,372

 

(24

)(5)

5,348

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

28,683

 

$

(3,940

)

$

24,743

 


Aon Corporation

Pro Forma Statement of Income

Nine Months Ended September 30, 2006

 (Unaudited)

 

 

 

 

 

Pro Forma

 

Pro Forma

 

 (millions except per share data)

 

Historical

 

Adjustments

 

Adjusted

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Brokerage commissions and fees

 

$

4,852

 

$

—

 

$

4,852

 

Premiums and other

 

1,423

 

—

 

1,423

 

Investment income

 

266

 

—

 

266

 

Total revenue

 

6,541

 

—

 

6,541

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Compensation and benefits

 

3,344

 

—

 

3,344

 

Other general expenses

 

1,394

 

—

 

1,394

 

Benefits to policyholders

 

864

 

—

 

864

 

Depreciation and amortization

 

166

 

—

 

166

 

Interest expense

 

99

 

—

 

99

 

Provision for New York and other state settlements

 

2

 

—

 

2

 

Total expenses

 

5,869

 

—

 

5,869

 

 

 

 

 

 

 

 

 

Income from continuing operations before provision for income tax and accounting change

 

672

 

—

 

672

 

Provision for income tax

 

234

 

—

 

234

 

Income from continuing operations before accounting change

 

438

 

—

 

438

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

Income from discontinued operations

 

92

 

(79

)(6)

13

 

Provision for income tax

 

34

 

(27

)(6)

7

 

Income from discontinued operations

 

58

 

(52

)

6

 

 

 

 

 

 

 

 

 

Income before accounting change

 

496

 

(52

)

444

 

Cumulative effect of a change in accounting principle, net of tax

 

1

 

—

 

1

 

Net income

 

$

497

 

$

(52

)

$

445

 

 

 

 

 

 

 

 

 

Basic net income per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.37

 

 

 

$

1.37

 

Discontinued operations

 

0.18

 

 

 

0.02

 

Cumulative effect of a change in accounting principle

 

—

 

 

 

—

 

Net income

 

$

1.55

 

 

 

$

1.39

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.29

 

 

 

$

1.29

 

Discontinued operations

 

0.17

 

 

 

0.01

 

Cumulative effect of a change in accounting principle

 

—

 

 

 

—

 

Net income

 

$

1.46

 

 

 

$

1.30

 

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

 

319.9

 

 

 

319.9

 

Diluted

 

345.0

 

 

 

345.0

 


Aon Corporation

Pro Forma Statement of Income

Twelve Months Ended December 31, 2005

(Unaudited)

 

 

 

 

 

Pro Forma

 

Pro Forma

 

(millions except per share data)

 

Historical

 

Adjustments

 

Adjusted

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Brokerage commissions and fees

 

$

6,646

 

$

(180

)(6)

$

6,466

 

Premiums and other

 

2,848

 

(1,089

)(6)

1,759

 

Investment income

 

343

 

(72

)(6)

271

 

Total revenue

 

9,837

 

(1,341

)

8,496

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Compensation and benefits

 

4,585

 

(155

)(6)

4,430

 

Other general expenses

 

2,329

 

(416

)(6)

1,913

 

Benefits to policyholders

 

1,551

 

(599

)(6)

952

 

Depreciation and amortization

 

277

 

(17

)(6)

260

 

Interest expense

 

125

 

—

 

125

 

Provision for New York and other state settlements

 

5

 

—

 

5

 

Total expenses

 

8,872

 

(1,187

)

7,685

 

 

 

 

 

 

 

 

 

Income from continuing operations before provision for income tax

 

965

 

(154

)

811

 

Provision for income tax

 

323

 

(82

)(6)

241

 

Income from continuing operations

 

642

 

(72

)

570

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

Income from discontinued operations

 

230

 

—

 

230

 

Provision for income tax

 

135

 

—

 

135

 

Income from discontinued operations

 

95

 

—

 

95

 

 

 

 

 

 

 

 

 

 Net income

 

$

737

 

$

(72

)

$

665

 

Preferred stock dividends

 

(2

)

—

 

(2

)

 Net income available for common stockholders

 

$

735

 

$

(72

)

$

663

 

 

 

 

 

 

 

 

 

Basic net income per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.99

 

 

 

$

1.77

 

Discontinued operations

 

0.29

 

 

 

0.29

 

Net income

 

$

2.28

 

 

 

$

2.06

 

 

 

 

 

 

 

 

 

 Diluted net income per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.89

 

 

 

$

1.68

 

Discontinued operations

 

0.28

 

 

 

0.28

 

Net income

 

$

2.17

 

 

 

$

1.96

 

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

 

322.5

 

 

 

322.5

 

Diluted

 

341.5

 

 

 

341.5

 

 

 



 

 Aon Corporation

 Pro Forma Statement of Income

 Twelve Months Ended December 31, 2004

 (Unaudited)

 

 

 

 

 

Pro Forma

 

Pro Forma

 

(millions except per share data)

 

Historical

 

Adjustments

 

Adjusted

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Brokerage commissions and fees

 

$

6,822

 

$

(231

)(6)

$

6,591

 

Premiums and other

 

2,788

 

(1,046

)(6)

1,742

 

Investment income

 

321

 

(47

)(6)

274

 

Total revenue

 

9,931

 

(1,324

)

8,607

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

General expenses

 

6,969

 

(634

)(6)

6,335

 

Benefits to policyholders

 

1,516

 

(576

)(6)

940

 

Depreciation and amortization

 

303

 

(24

)(6)

279

 

Interest expense

 

136

 

—

 

136

 

Provision for New York and other state settlements

 

180

 

—

 

180

 

Total expenses

 

9,104

 

(1,234

)

7,870

 

 

 

 

 

 

 

 

 

Income from continuing operations before provision for income tax

 

827

 

(90

)

737

 

Provision for income tax

 

282

 

(32

)(6)

250

 

Income from continuing operations

 

545

 

(58

)

487

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

Income from discontinued operations

 

10

 

—

 

10

 

Provision for income tax

 

9

 

—

 

9

 

Income from discontinued operations

 

1

 

—

 

1

 

 

 

 

 

 

 

 

 

Net income

 

$

546

 

$

(58

)

$

488

 

Preferred stock dividends

 

(3

)

—

 

(3

)

Net income available for common stockholders

 

$

543

 

$

(58

)

$

485

 

 

 

 

 

 

 

 

 

Basic net income per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.70

 

 

 

$

1.52

 

Discontinued operations

 

—

 

 

 

—

 

Net income

 

$

1.70

 

 

 

$

1.52

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.63

 

 

 

$

1.46

 

Discontinued operations

 

—

 

 

 

—

 

Net income

 

$

1.63

 

 

 

$

1.46

 

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

 

319.6

 

 

 

319.6

 

Diluted

 

336.6

 

 

 

336.6

 

 



 

 Aon Corporation

 Pro Forma Statement of Income

 Twelve Months Ended December 31, 2003

 (Unaudited)

 

 

 

 

 

Pro Forma

 

Pro Forma

 

(millions except per share data)

 

Historical

 

Adjustments

 

Adjusted

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Brokerage commissions and fees

 

$

6,545

 

$

(222

)(6)

$

6,323

 

Premiums and other

 

2,609

 

(870

)(6)

1,739

 

Investment income

 

310

 

(41

)(6)

269

 

Total revenue

 

9,464

 

(1,133

)

8,331

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

General expenses

 

6,569

 

(522

)(6)

6,047

 

Benefits to policyholders

 

1,427

 

(483

)(6)

944

 

Depreciation and amortization

 

307

 

(28

)(6)

279

 

Interest expense

 

101

 

—

 

101

 

Unusual credits - World Trade Center

 

(14

)

—

 

(14

)

Total expenses

 

8,390

 

(1,033

)

7,357

 

 

 

 

 

 

 

 

 

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

 

1,074

 

(100

)

974

 

Provision for income tax

 

396

 

(35

)(6)

361

 

Income from continuing operations before minority interest

 

678

 

(65

)

613

 

Minority interest - 8.205% trust preferred capital securities

 

(36

)

—

 

(36

)

Income from continuing operations

 

642

 

(65

)

577

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

Loss from discontinued operations

 

(19

)

—

 

(19

)

Income tax benefit

 

(5

)

—

 

(5

)

Loss from discontinued operations, net of tax

 

(14

)

—

 

(14

)

 

 

 

 

 

 

 

 

Net income

 

$

628

 

$

(65

)

$

563

 

Preferred stock dividends

 

(3

)

—

 

(3

)

Net income available for common stockholders

 

$

625

 

$

(65

)

$

560

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.01

 

 

 

$

1.81

 

Discontinued operations

 

(0.04

)

 

 

(0.04

)

Net income

 

$

1.97

 

 

 

$

1.77

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.94

 

 

 

$

1.75

 

Discontinued operations

 

(0.04

)

 

 

(0.04

)

Net income

 

$

1.90

 

 

 

$

1.71

 

 

 

 

 

 

 

 

 

Weighted average number of common shares:

 

 

 

 

 

 

 

Basic

 

316.5

 

 

 

316.5

 

Diluted

 

331.8

 

 

 

331.8

 

 

 



Aon Corporation

Notes to Pro Forma Financial Information

1.               Reflects book value of assets and liabilities of AWG and CPG.

2.               Reflects cash proceeds received at closing for AWG and CPG.  The proceeds for AWG are subject to a post-closing adjustment as described in Item 2.01 of this report.

3.               Reflects the estimated income tax effect of the transactions.

4.               Reflects the estimated transaction costs.

5.               Reflects the estimated after-tax loss of the transactions and equity-related items.

6.               Reflects elimination of the results of operations of AWG and CPG.