Stockholders' Equity

3 Months Ended

Mar. 31, 2012

Stockholders' Equity

Stockholders' Equity

10.  Stockholders’ Equity

Common Stock

In January 2010, the Company’s Board of Directors authorized a share repurchase program under which up to $2 billion of common stock may be repurchased (“2010 Share Repurchase Program”). Shares may be repurchased through the open market or in privately negotiated transactions, including structured repurchase programs, from time to time, based on prevailing market conditions, and will be funded from available capital.  Any repurchased shares will be available for employee stock plans and for other corporate purposes.

During the first quarter of 2012, the Company repurchased 2.1 million shares at an average price per share of $48.32 for a total cost of $100 million. During the first quarter 2011, the Company repurchased 6.8 million shares at an average price per share of $51.29 for a total cost of $350 million under the 2010 Share Repurchase Program as well as a previous program that was completed in the first quarter 2011. Since the inception of the 2010 Share Repurchase Program, the Company has repurchased a total of 18.2 million shares for an aggregate cost of $913 million. As of March 31, 2012, the Company was authorized to purchase up to $1.1 billion of additional shares under the 2010 Share Repurchase Program.

As a result of the Redomestication, the 2010 Share Repurchase Program, which related to common stock of Aon Corporation, was no longer of effect. In April 2012, the Company’s Board of Directors authorized a share repurchase program under which up to $5 billion of Class A ordinary shares may be repurchased (“2012 Share Repurchase Program”). Under this program, shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital.

During the three months ended March 31, 2012, the Company reissued 3.7 million shares of treasury stock for employee benefit programs, including 1.0 million shares related to stock option exercises, and 0.3 million shares in connection with employee stock purchase plans. In the three months ended March 31, 2011, Aon reissued 4.5 million shares of treasury stock for employee benefit programs, including 2.0 million shares related to stock option exercises and 0.1 million shares in connection with employee stock purchase plans. In addition, in the three months ended March 31, 2011, the Company issued 0.4 million shares of common stock in relation to the exercise of options issued to former holders of Hewitt options as part of the Hewitt acquisition.

Participating Securities

Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and are included in computing basic and diluted earnings per share using the two class method. Certain of Aon’s restricted stock units allow the holder to receive a non-forfeitable dividend equivalent.

Income from continuing operations, income from discontinued operations and net income, attributable to participating securities, were as follows (in millions):

	Three months ended March 31,
	2012		2011
Income from continuing operations	$	3	$	4
Income from discontinued operations	—		—
Net income	$	3	$	4

Weighted average shares outstanding are as follows (in millions):

	Three months ended March 31,
	2012	2011
Shares for basic earnings per share (1)	332.4	339.4
Common stock equivalents	4.2	6.0
Shares for diluted earnings per share	336.6	345.4

(1)  Includes 4.9 million and 5.7 million of participating securities for the three months ended March 31, 2012 and 2011, respectively.

Certain common stock equivalents, primarily related to stock options, were not included in the computation of diluted net income per share because their inclusion would have been antidilutive. The number of shares excluded from the calculation was 1 million and 1 million for the three months ended March 31, 2012 and 2011, respectively.

Accumulated Other Comprehensive Loss

The components of Accumulated other comprehensive loss, net of related tax, are as follows (in millions):

	March 31, 2012			December 31, 2011
Net derivative losses	$	(30	)	$	(37	)
Net foreign exchange translation adjustments	227			124
Net postretirement benefit obligations	(2,436		)	(2,457		)
Accumulated other comprehensive loss, net of tax	$	(2,239	)	$	(2,370	)