Interest income, which represents income earned on operating cash balances and miscellaneous income-producing securities, decreased $64 million from 2008 and was driven mainly by lower investment balances, the global decline in interest rates in 2009 and a decrease in income from our Private Equity Partnership Structures I, LLC ("PEPS I") investment.
Cash used for investing activities was $463 million in 2007, principally $251 million paid to acquire businesses and $170 million for capital expenditures.
(1)Pension and other postretirement benefit plan obligations include estimates of our minimum funding requirements, pursuant to ERISA and other regulations and minimum funding requirements agreed with the trustees of our U.K. pension plans. Additional amounts may be agreed to with the U.K. pension plan trustees. Nonqualified pension and other postretirement benefit obligations are based on estimated future benefit payments. We may make additional discretionary contributions.
Some of our U.K., Canadian, and Australian subsidiaries originated short-term loans (generally with terms of 12 months or less) to businesses to finance their insurance premium obligations, and then sold these premium finance agreements to unaffiliated companies in whole loan sales. Prior to August 2009, these loans were sold in securitization transactions that met the criteria for sale accounting. In June and July of 2009, we entered into agreements with third parties with respect to our international premium finance businesses (collectively, the "Cananwill International Agreements"). As a result of the Cananwill International Agreements, the third parties began originating, financing and servicing
•Juniperus Capital Holdings Limited ("JCHL"), which provides investment management and related services to Juniperus.
In November 2008 we expanded our product offerings through the merger with Benfield, a leading independent reinsurance intermediary. Benfield products have been integrated with our existing reinsurance products in 2009.
In February 2009, we completed the sale of the U.S. operations of Cananwill, our premium finance business. In June and July of 2009, we entered into agreements with third parties with respect to our
Europe, Middle East & Africa commissions, fees and other revenue decreased 8% driven primarily by unfavorable foreign exchange rates. The 1% organic decline was principally due to weakness in France, Germany and Ireland, partially offset by growth in the emerging markets of the Middle East and Africa.
We operate in many foreign jurisdictions where tax laws relating to our businesses are not well developed. In such jurisdictions, we obtain professional guidance and consider existing industry practices before using tax planning strategies and meeting our tax obligations. Tax returns are routinely subject to audit in most jurisdictions, and tax liabilities are frequently finalized through negotiations. In addition, several factors could increase the future level of uncertainty over our tax liabilities, including the following:
•to deploy tax planning strategies and conduct foreign operations efficiently, our subsidiaries frequently enter into transactions with affiliates, which are generally subject to complex tax regulations and are frequently reviewed by tax authorities,
The Company records annual expenses relating to its pension benefits and other post-employment plans based on calculations that include various actuarial assumptions, including discount rates, assumed asset rates of return, inflation rates, mortality rates, compensation increases, and turnover rates. The Company reviews its actuarial assumptions on an annual basis and makes modifications to these assumptions based on current rates and trends. The effects of the gains, losses, and prior service costs and credits are amortized over future service periods or future estimated lives if the plans are frozen. The funded status of each plan, calculated as the fair value of plan assets less the accumulated projected benefit obligation, is reflected in the Company's Consolidated Statement of Financial Position using a December 31 measurement date.
•Cost method investments - Investments where Aon does not have an ownership interest of greater than 20% or the ability to exert significant influence over the operations of the investee are carried at cost.
Aon also records receivables in respect of its retained interest in the premium finance agreements sold to the SPE's. These retained interests are recorded at fair value which is determined by discounting estimated future cash flows using discount rates that are commensurate with the underlying risk, expected future prepayment rates, and credit loss estimates. At December 31, 2009 and 2008 the balance of retained interests was zero and $99 million, respectively.
sublease losses or lease buy-outs. The Company currently estimates that the 2007 Plan will result in cumulative pretax charges totaling approximately $750 million. Expenses include workforce reduction, lease consolidation costs, asset impairments, as well as other expenses necessary to implement the restructuring initiative. Costs related to the restructuring are included in Compensation and benefits and Other general expenses in the accompanying Consolidated Statements of Income. The Company expects the restructuring and related expenses to affect continuing operations through the first half of 2010.
The weighted-average interest rates on Aon's short-term borrowings were 1.5%, 4.5%, and 5.1% for the years ended December 31, 2009, 2008 and 2007, respectively.
As of December 31, 2009, $61 million of unrecognized tax benefits would impact the effective tax rate if recognized. Aon does not expect the unrecognized tax positions to change significantly over the next twelve months.
Aon sponsors defined benefit pension and post-retirement health and welfare plans that provide retirement, medical, and life insurance benefits. The post-retirement healthcare plans are contributory, with retiree contributions adjusted annually; the life insurance and pension plans are noncontributory.
Stock awards, in the form of RSUs, are granted to certain employees and consist of both performance-based and service-based RSUs. Service-based awards generally vest between three and ten years from the date of grant. The fair value of service-based awards is based upon the market price of the underlying common stock at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all unvested awards. Compensation expense associated with stock awards is recognized over the service period using the straight-line method. Dividend equivalents are paid on certain service-based RSUs, based on the initial grant amount. At December 31, 2009, 2008 and 2007, the number of shares available for stock awards is included with options available for grant.
Aon also has an employee stock purchase for eligible U.K. employees that provides for the purchase of shares after a 3-year period and which is similar to the U.S. plan described above. Three-year periods began in 2008 and 2006, allowing for the purchase of a maximum of 200,000 and 525,000 shares, respectively. In 2009, 2008 and 2007, 201,000 shares, 6,000 shares and less than 1,000 shares, respectively, were issued under the plan. In 2009, $1 million of compensation expense was recognized. In 2008 and 2007, compensation expense recognized was less than $1 million each year.
Retained interests in the sold premium finance agreements of Aon's premium financing operations were recorded at fair value by discounting estimated future cash flows using discount rates that are commensurate with the underlying risk, expected future prepayment rates, and credit loss estimates.