Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes

Income from continuing operations before income tax

Years ended December 31	2011			2010		2009
Income from continuing operations before income taxes:
U.S.	$	301		$	21	$	215
International		1,083			1,038		734
Total	$	1,384		$	1,059	$	949
Income taxes (benefit):
Current:
U.S. federal	$	(17	)	$	16	$	32
U.S. state and local		35			10		23
International		217			202		150
Total current		235			228		205
Deferred:
U.S. federal		109			47		49
U.S. state and local		14			13		5
International		20			12		9
Total deferred		143			72		63
Total income tax expense	$	378		$	300	$	268

Reconciliation of the income tax provisions based on the U.S. statutory corporate tax rate to the provisions reflected in the Consolidated Financial Statements

Years ended December 31	2011			2010			2009
Statutory tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		2.3			1.1			2.0
Taxes on international operations		(11.5	)		(12.5	)		(12.0	)
Nondeductible expenses		3.5			3.9			3.4
Adjustments to prior year tax requirements		(1.1	)		0.5			0.1
Deferred tax adjustments, including
statutory rate changes		(0.8	)		0.2			0.1
Other — net		(0.1	)		0.2			(0.4	)
Effective tax rate		27.3			28.4			28.2

Components of Aon's deferred tax assets and liabilities

As of December 31	2011			2010
Deferred tax assets:
Employee benefit plans	$	940		$	929
Net operating loss and tax credit carryforwards		484			430
Other accrued expenses		154			161
Investment basis differences		17			17
Other		100			66
Total		1,695			1,603
Valuation allowance on deferred tax assets		(219	)		(257	)
Total	$	1,476		$	1,346
Deferred tax liabilities:
Intangibles	$	(1,333	)	$	(1,420	)
Deferred revenue		(83	)		(49	)
Other accrued expenses		(121	)		(41	)
Unrealized investment gains		(21	)		(5	)
Unrealized foreign exchange gains		(23	)		(23	)
Other		(40	)		(75	)
Total	$	(1,621	)	$	(1,613	)
Net deferred tax liability	$	(145	)	$	(267	)

Deferred income taxes (assets and liabilities netted by jurisdiction) as classified in the Consolidated Statements of Financial Position

As of December 31,	2011			2010
Deferred tax assets — current	$	19		$	121
Deferred tax assets — non-current		258			305
Deferred tax liabilities — current		(121	)		(30	)
Deferred tax liabilities — non-current		(301	)		(663	)
Net deferred tax liability	$	(145	)	$	(267	)

Reconciliation of the beginning and ending amount of unrecognized tax benefits

	2011			2010
Balance at January 1	$	100		$	77
Additions based on tax positions related to the current year		8			7
Additions for tax positions of prior years		5			4
Reductions for tax positions of prior years		(16	)		(7	)
Settlements		(15	)		(1	)
Lapse of statute of limitations		(4	)		(5	)
Acquisitions		40			26
Foreign currency translation		—			(1	)
Balance at December 31	$	118		$	100