Aon Corporation today reported net income of $122 million or $0.36 per share in both the third quarter of 2005 and 2004. Third-quarter 2005 net income from continuing operations increased 7 percent to $121 million or $0.36 per share compared to $113 million or $0.33 per share a year ago.
Excluding pretax restructuring and related expenses of $35 million ($0.07 per diluted share) in the current quarter, net income per share would have risen 19 percent to $0.43 compared to $0.36 for 2004, and for the nine months 2005 net income per share would have risen 14 percent to $1.59 versus $1.39 for the same period in 2004.
The previously announced three-year restructuring plan is expected to result in cumulative pretax charges of approximately $250 million, including employee termination and lease consolidation costs, asset impairments, and other costs associated with the restructuring. Annualized cost savings are targeted at approximately $150 million by 2008. The plan is not finalized and actual total costs, the timing of the costs, and ultimate savings will vary from the estimates due to changes in the scope or assumptions underlying this plan.
During the third quarter of 2005, restructuring and related expenses amounted to $35 million, of which $29 million was recorded in Risk and Insurance Brokerage Services, $4 million in Consulting and $2 million in Corporate and Other. Approximately $2 million of the third quarter 2005 restructuring costs were cash payments.
The restructuring plan includes job eliminations beginning in the third quarter of 2005 and continuing into 2007. An estimated 1,400 positions will be eliminated, including a group of approximately 750 U.K. positions affected by that component of the restructuring initiative announced on Oct. 5, 2005.
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