WTW (NASDAQ: WTW) (the “Company”), a leading global advisory,
broking and solutions company, today announced financial results
for the second quarter ended June 30, 2024.
“WTW delivered a strong second quarter, generating significant
EPS growth and margin expansion through robust organic growth,
operating efficiency and the continued execution of our
Transformation program,” said Carl Hess, WTW’s Chief Executive
Officer. “These results show that our efforts to grow, simplify and
transform WTW continue to create sustainable value for
shareholders, clients and colleagues. Given our strong performance
and ongoing momentum, we are raising the low end of our full year
2024 target ranges for adjusted operating margin and adjusted EPS
to 23.0%-23.5% and $16.00-$17.00, respectively.”
Consolidated Results
As reported, USD millions, except %
Key Metrics |
Q2-24 |
Q2-23 |
Y/Y Change |
Revenue1 |
$2,265 |
$2,159 |
Reported 5% | CC 6% | Organic 6% |
Income from Operations |
$212 |
$142 |
49% |
Operating Margin % |
9.4% |
6.6% |
280 bps |
Adjusted Operating Income |
$385 |
$315 |
22% |
Adjusted Operating Margin % |
17.0% |
14.6% |
240 bps |
Net Income |
$142 |
$96 |
48% |
Adjusted Net Income |
$263 |
$219 |
20% |
Diluted EPS |
$1.36 |
$0.88 |
55% |
Adjusted Diluted EPS |
$2.55 |
$2.05 |
24% |
1 |
The revenue amounts included in
this release are presented on a U.S. GAAP basis except where stated
otherwise. This excludes reinsurance revenue which is reported in
discontinued operations. The segment discussion is on an organic
basis. |
|
|
Revenue was $2.27 billion for the second quarter of 2024, an
increase of 5% as compared to $2.16 billion for the same period in
the prior year. Excluding the impact of foreign currency, revenue
increased 6%. On an organic basis, revenue increased 6%. See
Supplemental Segment Information for additional detail on
book-of-business settlements and interest income included in
revenue.
Net Income for the second quarter of 2024 was $142 million, an
increase of 48% compared to Net Income of $96 million in the
prior-year second quarter. Adjusted EBITDA for the second quarter
was $466 million, or 20.6% of revenue, an increase of 13%, compared
to Adjusted EBITDA of $411 million, or 19.0% of revenue, in the
prior-year second quarter. The U.S. GAAP tax rate for the second
quarter was 15.6%, and the adjusted income tax rate for the second
quarter used in calculating adjusted diluted earnings per share was
22.6%.
Cash Flow and Capital
Allocation
Cash flows from operating activities were $431 million for the
quarter ended June 30, 2024, compared to $430 million for the prior
year. Free cash flow for the six months ended June 30, 2024 and
2023 was $361 million and $350 million, respectively, an increase
of $11 million, primarily driven by operating margin expansion,
partially offset by increased cash outflows related to
transformation and discretionary compensation payments. During the
quarter ended June 30, 2024, the Company repurchased $200 million
of WTW outstanding shares.
Second Quarter 2024 Segment
Highlights
Health, Wealth & Career ("HWC")
As reported, USD millions, except %
Health, Wealth & Career |
Q2-24 |
Q2-23 |
Y/Y Change |
Total Revenue |
$1,260 |
$1,215 |
Reported 4% | CC 4% | Organic 5% |
Operating Income |
$276 |
$222 |
24% |
Operating Margin % |
21.9% |
18.3% |
360 bps |
The HWC segment had revenue of $1.26 billion in the second
quarter of 2024, an increase of 4% (4% increase constant currency
and 5% organic) from $1.22 billion in the prior year. Organic
revenue growth in Health was driven by increased project work in
North America and strong client retention, new local appointments
and the continued expansion of our Global Benefits Management
client portfolio in International and Europe. Our Wealth businesses
generated organic revenue growth from higher levels of Retirement
work in North America and Europe and an increase in our Investments
business due to capital market improvements and growth from our
LifeSight solution. Career had organic revenue growth from
increased project work and product revenue in Employee Experience
and Work & Rewards. Benefits Delivery & Outsourcing was
flat for the quarter as a result of growth in Outsourcing offset by
moderated growth in Individual Marketplace.
Operating margins in the HWC segment increased 360 basis points
from the prior-year second quarter to 21.9%, primarily from
operating leverage and Transformation savings.
Risk & Broking ("R&B")
As reported, USD millions, except %
Risk & Broking |
Q2-24 |
Q2-23 |
Y/Y Change |
Total Revenue |
$979 |
$900 |
Reported 9% | CC 10% | Organic 10% |
Operating Income |
$202 |
$145 |
39% |
Operating Margin % |
20.6% |
16.1% |
450 bps |
The R&B segment had revenue of $979 million in the second
quarter of 2024, an increase of 9% (10% increase constant currency
and organic) from $900 million in the prior year. Corporate Risk
& Broking (CRB) had organic revenue growth primarily driven by
higher levels of new business activity, strong client retention and
renewal increases across all geographies. Insurance Consulting and
Technology (ICT) had flat organic revenue growth for the quarter
primarily due to tempered demand for discretionary services.
Operating margins in the R&B segment increased 450 basis
points from the prior-year second quarter to 20.6%, due to
operating leverage from strong revenue growth in CRB,
Transformation savings and interest income.
2024 Outlook
Based on our performance during the first half of 2024 and both
current and anticipated market conditions, the Company's full-year
targets for 2024, as compared with those targets that have been
previously provided are as follows. Refer to the Supplemental
Slides for additional detail.
|
Previous Targets |
Updated Targets |
Revenue |
$9.9+ billion |
$9.9+ billion* |
Adjusted Operating Margin |
22.5%-23.5% |
23.0%-23.5% |
Adjusted Diluted EPS |
$15.40-$17.00 |
$16.00-$17.00 |
Transformation Program Annual Cost Savings |
~$425 million |
~$450 million |
Transformation Program Costs to Achieve |
~$1.125 billion |
~$1.175 billion |
Non-Cash Pension Income |
$88 million |
$88 million* |
Foreign-Currency Headwind on Adjusted Diluted
EPS |
$0.05 |
$0.10 |
*No update to previous target.
Outlook includes Non-GAAP financial measures. We do not
reconcile forward-looking Non-GAAP measures for reasons explained
below.
Conference Call
The Company will host a live webcast and conference call to
discuss the financial results for the second quarter 2024. It will
be held on Thursday, July 25, 2024, beginning at 9:00 a.m. Eastern
Time. A live broadcast of the conference call will be available on
WTW’s website here. The conference call will include a
question-and-answer session. To participate in the
question-and-answer session, please register here. An online replay
will be available at www.wtwco.com shortly after the call
concludes.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led
solutions in the areas of people, risk and capital. Leveraging the
global view and local expertise of our colleagues serving 140
countries and markets, we help organizations sharpen their
strategy, enhance organizational resilience, motivate their
workforce and maximize performance. Working shoulder to shoulder
with our clients, we uncover opportunities for sustainable
success—and provide perspective that moves you. Learn more at
www.wtwco.com.
WTW Non-GAAP Measures
In order to assist readers of our consolidated financial
statements in understanding the core operating results that WTW’s
management uses to evaluate the business and for financial
planning, we present the following non-GAAP measures: (1) Constant
Currency Change, (2) Organic Change, (3) Adjusted Operating
Income/Margin, (4) Adjusted EBITDA/Margin, (5) Adjusted Net Income,
(6) Adjusted Diluted Earnings Per Share, (7) Adjusted Income Before
Taxes, (8) Adjusted Income Taxes/Tax Rate, (9) Free Cash Flow and
(10) Free Cash Flow Margin.
We believe that those measures are relevant and provide
pertinent information widely used by analysts, investors and other
interested parties in our industry to provide a baseline for
evaluating and comparing our operating performance, and in the case
of free cash flow, our liquidity results.
Within the measures referred to as ‘adjusted’, we adjust for
significant items which will not be settled in cash, or which we
believe to be items that are not core to our current or future
operations. Some of these items may not be applicable for the
current quarter, however they may be part of our full-year results.
Additionally, we have historically adjusted for certain items which
are not described below, but for which we may adjust in a future
period when applicable. Items applicable to the quarter or full
year results, or the comparable periods, include the following:
- Restructuring costs and transaction and
transformation – Management believes it is appropriate to adjust
for restructuring costs and transaction and transformation when
they relate to a specific significant program with a defined set of
activities and costs that are not expected to continue beyond a
defined period of time, or significant acquisition-related
transaction expenses. We believe the adjustment is necessary to
present how the Company is performing, both now and in the future
when the incurrence of these costs will have concluded.
- Provisions for specified litigation
matters – We will include provisions for litigation matters which
we believe are not representative of our core business operations.
Among other things, we determine this by reference to the amount of
the loss (net of insurance and other recovery receivables) and by
reference to whether the matter relates to an unusual and complex
scenario that is not expected to be repeated as part of our
ongoing, ordinary business. These amounts are presented net of
insurance and other recovery receivables. See the footnotes to the
respective reconciliation tables below for more specificity on the
litigation matter excluded from adjusted results.
- Gains and losses on disposals of
operations – Adjustment to remove the gains or losses resulting
from disposed operations that have not been classified as
discontinued operations.
- Tax effect of significant adjustments –
Relates to the incremental tax expense or benefit resulting from
significant or unusual events including significant statutory tax
rate changes enacted in material jurisdictions in which we operate,
internal reorganizations of ownership of certain businesses that
reduced the investment held by our U.S.-controlled subsidiaries and
the recovery of certain refunds or payment of taxes related to
businesses in which we no longer participate.
We evaluate our revenue on an as reported (U.S. GAAP), constant
currency and organic basis. We believe presenting constant currency
and organic information provides valuable supplemental information
regarding our comparable results, consistent with how we evaluate
our performance internally.
We consider Constant Currency Change, Organic Change, Adjusted
Operating Income/Margin, Adjusted EBITDA/Margin, Adjusted Net
Income, Adjusted Diluted Earnings Per Share, Adjusted Income Before
Taxes, Adjusted Income Taxes/Tax Rate and Free Cash Flow to be
important financial measures, which are used to internally evaluate
and assess our core operations and to benchmark our operating and
liquidity results against our competitors. These non-GAAP measures
are important in illustrating what our comparable operating and
liquidity results would have been had we not incurred
transaction-related and non-recurring items. Reconciliations of
these measures are included in the accompanying tables with the
following exception: The Company does not reconcile its
forward-looking non-GAAP financial measures to the corresponding
U.S. GAAP measures, due to variability and difficulty in making
accurate forecasts and projections and/or certain information not
being ascertainable or accessible; and because not all of the
information, such as foreign currency impacts necessary for a
quantitative reconciliation of these forward-looking non-GAAP
financial measures to the most directly comparable U.S. GAAP
financial measure, is available to the Company without unreasonable
efforts. For the same reasons, the Company is unable to address the
probable significance of the unavailable information. The Company
provides non-GAAP financial measures that it believes will be
achieved, however it cannot accurately predict all of the
components of the adjusted calculations and the U.S. GAAP measures
may be materially different than the non-GAAP measures.
Our non-GAAP measures and their accompanying definitions are
presented as follows:
Constant Currency Change – Represents the year-over-year change
in revenue excluding the impact of foreign currency fluctuations.
To calculate this impact, the prior year local currency results are
first translated using the current year monthly average exchange
rates. The change is calculated by comparing the prior year
revenue, translated at the current year monthly average exchange
rates, to the current year as reported revenue, for the same
period. We believe constant currency measures provide useful
information to investors because they provide transparency to
performance by excluding the effects that foreign currency exchange
rate fluctuations have on period-over-period comparability given
volatility in foreign currency exchange markets.
Organic Change – Excludes the impact of fluctuations in foreign
currency exchange rates, as described above and the
period-over-period impact of acquisitions and divestitures on
current-year revenue. We believe that excluding transaction-related
items from our U.S. GAAP financial measures provides useful
supplemental information to our investors, and it is important in
illustrating what our core operating results would have been had we
not included these transaction-related items, since the nature,
size and number of these transaction-related items can vary from
period to period.
Adjusted Operating Income/Margin – Income from operations
adjusted for amortization, restructuring costs, transaction and
transformation and non-recurring items that, in management’s
judgment, significantly affect the period-over-period assessment of
operating results. Adjusted operating income margin is calculated
by dividing adjusted operating income by revenue. We consider
adjusted operating income/margin to be important financial
measures, which are used internally to evaluate and assess our core
operations and to benchmark our operating results against our
competitors.
Adjusted EBITDA/Margin – Net Income adjusted for provision for
income taxes, interest expense, depreciation and amortization,
restructuring costs, transaction and transformation, gains and
losses on disposals of operations and non-recurring items that, in
management’s judgment, significantly affect the period-over-period
assessment of operating results. Adjusted EBITDA Margin is
calculated by dividing adjusted EBITDA by revenue. We consider
adjusted EBITDA/margin to be important financial measures, which
are used internally to evaluate and assess our core operations, to
benchmark our operating results against our competitors and to
evaluate and measure our performance-based compensation plans.
Adjusted Net Income – Net Income Attributable to WTW adjusted
for amortization, restructuring costs, transaction and
transformation, gains and losses on disposals of operations and
non-recurring items that, in management’s judgment, significantly
affect the period-over-period assessment of operating results and
the related tax effect of those adjustments and the tax effects of
internal reorganizations. This measure is used solely for the
purpose of calculating adjusted diluted earnings per share.
Adjusted Diluted Earnings Per Share – Adjusted Net Income
divided by the weighted-average number of ordinary shares, diluted.
Adjusted diluted earnings per share is used to internally evaluate
and assess our core operations and to benchmark our operating
results against our competitors.
Adjusted Income Before Taxes – Income from operations before
income taxes adjusted for amortization, restructuring costs,
transaction and transformation, gains and losses on disposals of
operations and non-recurring items that, in management’s judgment,
significantly affect the period-over-period assessment of operating
results. Adjusted income before taxes is used solely for the
purpose of calculating the adjusted income tax rate.
Adjusted Income Taxes/Tax Rate – Provision for income taxes
adjusted for taxes on certain items of amortization, restructuring
costs, transaction and transformation, gains and losses on
disposals of operations, the tax effects of internal
reorganizations, and non-recurring items that, in management’s
judgment, significantly affect the period-over-period assessment of
operating results, divided by adjusted income before taxes.
Adjusted income taxes is used solely for the purpose of calculating
the adjusted income tax rate. Management believes that the adjusted
income tax rate presents a rate that is more closely aligned to the
rate that we would incur if not for the reduction of pre-tax income
for the adjusted items and the tax effects of internal
reorganizations, which are not core to our current and future
operations.
Free Cash Flow – Cash flows from operating activities less cash
used to purchase fixed assets and software for internal use. Free
Cash Flow is a liquidity measure and is not meant to represent
residual cash flow available for discretionary expenditures.
Management believes that free cash flow presents the core operating
performance and cash-generating capabilities of our business
operations.
Free Cash Flow Margin – Free Cash Flow as a percentage of
revenue, which represents how much of revenue would be realized on
a cash basis. We consider this measure to be a meaningful metric
for tracking cash conversion on a year-over-year basis due to the
non-cash nature of our pension income, which is included in our
GAAP and Non-GAAP earnings metrics presented herein.
These non-GAAP measures are not defined in the same manner by
all companies and may not be comparable to other similarly titled
measures of other companies. Non-GAAP measures should be considered
in addition to, and not as a substitute for, the information
contained within our condensed consolidated financial
statements.
WTW Forward-Looking Statements
This document contains ‘forward-looking statements’ within the
meaning of Section 27A of the Securities Act of 1933, and Section
21E of the Securities Exchange Act of 1934, which are intended to
be covered by the safe harbors created by those laws. These
forward-looking statements include information about possible or
assumed future results of our operations. All statements, other
than statements of historical facts, that address activities,
events, or developments that we expect or anticipate may occur in
the future, including such things as our outlook, plans and
references to future performance, including our future financial
and operating results (including our revenue, costs, or margins),
short-term and long-term financial goals, plans, objectives,
expectations and intentions, including with respect to organic
revenue growth, free cash flow generation, adjusted net revenue,
adjusted operating margin and adjusted earnings per share; future
share repurchases; demand for our services and competitive
strengths; existing and evolving business strategies including
those related to acquisition and disposition activity; the benefits
of new initiatives; the growth of our business and operations; the
sustained health of our product, service, transaction, client, and
talent assessment and management pipelines; our ability to
successfully manage ongoing leadership, organizational, and
technology changes, including investments in improving systems and
processes, and in connection with our acquisition and divestiture
activities; our ability to implement and realize anticipated
benefits of any cost-savings initiatives including the multi-year
operational Transformation program; the potential impact of natural
or man-made disasters like health pandemics and other world crises;
future capital expenditures; ongoing working capital efforts; the
impact of changes to tax laws on our financial results; and our
recognition of future impairment charges or write-off of
receivables, are forward-looking statements. Also, when we use
words such as ‘may’, ‘will’, ‘would’, ‘anticipate’, ‘believe’,
‘estimate’, ‘expect’, ‘intend’, ‘plan’, ‘continues’, ‘seek’,
‘target’, ‘goal’, ‘focus’, ‘probably’, or similar expressions, we
are making forward-looking statements. Such statements are based
upon the current beliefs and expectations of our management and are
subject to significant risks and uncertainties. Actual results may
differ from those set forth in the forward-looking statements. All
forward-looking disclosure is speculative by its nature.
There are important risks, uncertainties, events and factors
that could cause our actual results or performance to differ
materially from those in the forward-looking statements contained
in this document, including the following: our ability to
successfully establish, execute and achieve our global business
strategy as it evolves; our ability to fully realize anticipated
benefits of our growth strategy, including inorganic growth through
acquisitions; our ability to make divestitures or acquisitions,
including our ability to integrate or manage acquired businesses or
de-integrate businesses to be disposed, as well as our ability to
identify and successfully execute on opportunities for strategic
collaboration; our ability to successfully manage ongoing
organizational changes, including as part of our multi-year
operational transformation program, investments in improving
systems and processes, and in connection with our acquisition and
divestiture activities and related to changes in leadership in any
of our businesses; risks relating to changes in our management
structures and in senior leadership; our ability to achieve our
short-term and long-term financial goals, such as with respect to
our cash flow generation, and the timing with respect to such
achievement; the risks related to changes in general economic
conditions, business and political conditions, changes in the
financial markets, inflation, credit availability, increased
interest rates and changes in trade policies; the risks to our
short-term and long-term financial goals from any of the risks or
uncertainties set forth herein; the risks relating to the adverse
impacts of macroeconomic trends, including inflation, changes in
interest rates and trade policies, as well as political events,
war, such as the Russia-Ukraine and Israel-Hamas wars, and other
international disputes, terrorism, natural disasters, public health
issues and other business interruptions on the global economy and
capital markets, which could have a material adverse effect on our
business, financial condition, results of operations, and long-term
goals; our ability to successfully hedge against fluctuations in
foreign currency rates; the risks relating to the adverse impacts
of natural or man-made disasters like health pandemics and other
world health crises on the demand for our products and services,
our cash flows and our business operations; material interruptions
to or loss of our information processing capabilities, or failure
to effectively maintain and upgrade our information technology
resources and systems and related risks of cybersecurity breaches
or incidents; our ability to comply with complex and evolving
regulations related to data privacy, cybersecurity, and artificial
intelligence; the risks relating to the transitional arrangements
in effect subsequent to our previously-completed sale of Willis Re
to Arthur J. Gallagher & Co.; significant competition that we
face and the potential for loss of market share and/or
profitability; the impact of seasonality and differences in timing
of renewals and non-recurring revenue increases from disposals and
book-of-business sales; the insufficiency of client data
protection, potential breaches of information systems or
insufficient safeguards against cybersecurity breaches or
incidents; the risk of increased liability or new legal claims
arising from our new and existing products and services, and
expectations, intentions and outcomes relating to outstanding
litigation; the risk of substantial negative outcomes on existing
litigation or investigation matters; changes in the regulatory
environment in which we operate, including, among other risks, the
impacts of pending competition law and regulatory investigations;
various claims, government inquiries or investigations or the
potential for regulatory action; our ability to integrate
direct-to-consumer sales and marketing solutions with our existing
offerings and solutions; disasters or business continuity problems;
our ability to successfully enhance our billing, collection and
other working capital efforts, and thereby increase our free cash
flow; our ability to properly identify and manage conflicts of
interest; reputational damage, including from association with
third parties; reliance on third-party service providers and
suppliers; the loss of key employees or a large number of employees
and rehiring rates; our ability to maintain our corporate culture;
doing business internationally, including the impact of foreign
currency exchange rates; compliance with extensive government
regulation; the risk of sanctions imposed by governments, or
changes to associated sanction regulations (such as sanctions
imposed on Russia) and related counter-sanctions; our ability to
effectively apply technology, data and analytics changes for
internal operations, maintaining industry standards and meeting
client preferences; changes and developments in the insurance
industry or the U.S. healthcare system, including those related to
Medicare, any legislative actions from the current U.S. Congress,
the recent Final Rule from the Centers for Medicare & Medicaid
Services for contract year 2025 and any judicial claims, rulings
and appeals related thereto, and any other changes and developments
in legal, regulatory, economic, business or operational conditions
impacting our Medicare benefits businesses such as TRANZACT; the
inability to protect our intellectual property rights, or the
potential infringement upon the intellectual property rights of
others; fluctuations in our pension assets and liabilities and
related changes in pension income, including as a result of,
related to, or derived from movements in the interest rate
environment, investment returns, inflation, or changes in other
assumptions that are used to estimate our benefit obligations and
its effect on adjusted earnings per share; our capital structure,
including indebtedness amounts, the limitations imposed by the
covenants in the documents governing such indebtedness and the
maintenance of the financial and disclosure controls and procedures
of each; our ability to obtain financing on favorable terms or at
all; adverse changes in our credit ratings; the impact of recent or
potential changes to U.S. or foreign laws, and the enactment of
additional, or the revision of existing, state, federal, and/or
foreign laws and regulations, recent judicial decisions and
development of case law, other regulations and any policy changes
and legislative actions, including those that impact our effective
tax rate; U.S. federal income tax consequences to U.S. persons
owning at least 10% of our shares; changes in accounting
principles, estimates or assumptions; our recognition of future
impairment charges or write-off of receivables; risks relating to
or arising from environmental, social and governance practices;
fluctuation in revenue against our relatively fixed or higher than
expected expenses; the risk that investment levels, including cash
spending, to achieve additional transformation savings increase;
the laws of Ireland being different from the laws of the U.S. and
potentially affording less protections to the holders of our
securities; and our holding company structure potentially
preventing us from being able to receive dividends or other
distributions in needed amounts from our subsidiaries.
The foregoing list of factors is not exhaustive and new factors
may emerge from time to time that could also affect actual
performance and results. For more information, please see Part I,
Item 1A in our Annual Report on Form 10-K, and our subsequent
filings with the SEC. Copies are available online at www.sec.gov or
www.wtwco.com.
Although we believe that the assumptions underlying our
forward-looking statements are reasonable, any of these
assumptions, and therefore also the forward-looking statements
based on these assumptions, could themselves prove to be
inaccurate. Given the significant uncertainties inherent in the
forward-looking statements included in this document, our inclusion
of this information is not a representation or guarantee by us that
our objectives and plans will be achieved.
Our forward-looking statements speak only as of the date made,
and we will not update these forward-looking statements unless the
securities laws require us to do so. With regard to these risks,
uncertainties and assumptions, the forward-looking events discussed
in this document may not occur, and we caution you against unduly
relying on these forward-looking statements.
Contact
INVESTORSClaudia De La Hoz |
Claudia.Delahoz@wtwco.com
|
WTWSupplemental Segment Information(In millions of
U.S. dollars)(Unaudited) |
REVENUE |
|
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|
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|
Components of Revenue Change(i) |
|
|
|
|
|
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|
|
|
|
Less: |
|
|
|
Less: |
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|
|
|
Three Months EndedJune30, |
|
As Reported |
|
Currency |
|
Constant Currency |
|
Acquisitions/ |
|
Organic |
|
|
2024 |
|
2023 |
|
% Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change |
|
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|
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|
Health, Wealth &
Career |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue excluding interest income |
|
$ |
1,251 |
|
|
$ |
1,209 |
|
|
3% |
|
(1)% |
|
4% |
|
0% |
|
5% |
Interest income |
|
|
9 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,260 |
|
|
|
1,215 |
|
|
4% |
|
(1)% |
|
4% |
|
0% |
|
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk &
Broking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue excluding interest
income |
|
$ |
950 |
|
|
$ |
885 |
|
|
7% |
|
(1)% |
|
8% |
|
0% |
|
8% |
Interest income |
|
|
29 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
979 |
|
|
|
900 |
|
|
9% |
|
(1)% |
|
10% |
|
0% |
|
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenue |
|
$ |
2,239 |
|
|
$ |
2,115 |
|
|
6% |
|
(1)% |
|
7% |
|
0% |
|
7% |
Reimbursable expenses and
other |
|
|
20 |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
6 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
2,265 |
|
|
$ |
2,159 |
|
|
5% |
|
(1)% |
|
6% |
|
0% |
|
6%(ii) |
|
|
|
|
|
|
|
Components of Revenue Change(i) |
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
Less: |
|
|
|
|
Six Months Ended June30, |
|
As Reported |
|
Currency |
|
Constant Currency |
|
Acquisitions/ |
|
Organic |
|
|
2024 |
|
2023 |
|
% Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health, Wealth &
Career |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue excluding interest income |
|
$ |
2,578 |
|
|
$ |
2,491 |
|
|
3% |
|
0% |
|
4% |
|
0% |
|
4% |
Interest income |
|
|
18 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
2,596 |
|
|
|
2,502 |
|
|
4% |
|
0% |
|
4% |
|
0% |
|
4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk &
Broking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue excluding interest
income |
|
$ |
1,900 |
|
|
$ |
1,777 |
|
|
7% |
|
0% |
|
7% |
|
0% |
|
7% |
Interest income |
|
|
57 |
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,957 |
|
|
|
1,804 |
|
|
8% |
|
0% |
|
9% |
|
0% |
|
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenue |
|
$ |
4,553 |
|
|
$ |
4,306 |
|
|
6% |
|
0% |
|
6% |
|
0% |
|
6% |
Reimbursable expenses and
other |
|
|
41 |
|
|
|
68 |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
12 |
|
|
|
29 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
4,606 |
|
|
$ |
4,403 |
|
|
5% |
|
0% |
|
5% |
|
0% |
|
5%(ii) |
(i) Components of revenue change may not add due to
rounding.(ii) Interest income contributed 1% to organic change for
total revenue for the three months ended June 30, 2024. Organic
change for total revenue excluding this contribution was 5% for the
three months ended June 30, 2024. Interest income did not
contribute to organic change for the six months ended June 30,
2024.
BOOK-OF-BUSINESS SETTLEMENTS AND INTEREST
INCOME
|
|
Three Months Ended June 30, |
|
|
HWC |
|
R&B |
|
Corporate |
|
Total |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Book-of-business settlements |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
3 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
3 |
|
Interest income |
|
|
9 |
|
|
|
6 |
|
|
|
29 |
|
|
|
15 |
|
|
|
6 |
|
|
|
14 |
|
|
|
44 |
|
|
|
35 |
|
Total |
|
$ |
9 |
|
|
$ |
6 |
|
|
$ |
31 |
|
|
$ |
18 |
|
|
$ |
6 |
|
|
$ |
14 |
|
|
$ |
46 |
|
|
$ |
38 |
|
|
|
Six Months Ended June 30, |
|
|
HWC |
|
R&B |
|
Corporate |
|
Total |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Book-of-business settlements |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4 |
|
|
$ |
10 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4 |
|
|
$ |
10 |
|
Interest income |
|
|
18 |
|
|
|
11 |
|
|
|
57 |
|
|
|
27 |
|
|
|
12 |
|
|
|
29 |
|
|
|
87 |
|
|
|
67 |
|
Total |
|
$ |
18 |
|
|
$ |
11 |
|
|
$ |
61 |
|
|
$ |
37 |
|
|
$ |
12 |
|
|
$ |
29 |
|
|
$ |
91 |
|
|
$ |
77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING INCOME
(i)
|
|
Three Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Health, Wealth & Career |
|
$ |
276 |
|
|
$ |
222 |
|
Risk & Broking |
|
|
202 |
|
|
|
145 |
|
Segment Operating
Income |
|
$ |
478 |
|
|
$ |
367 |
|
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Health, Wealth & Career |
|
$ |
612 |
|
|
$ |
531 |
|
Risk & Broking |
|
|
405 |
|
|
|
325 |
|
Segment Operating
Income |
|
$ |
1,017 |
|
|
$ |
856 |
|
(i) Segment operating income excludes certain costs, including
amortization of intangibles, restructuring costs, transaction and
transformation expenses, certain litigation provisions, and to the
extent that the actual expense based upon which allocations are
made differs from the forecast/budget amount, a reconciling item
will be created between internally-allocated expenses and the
actual expenses reported for U.S. GAAP purposes.
SEGMENT OPERATING MARGINS
|
|
Three Months Ended June 30, |
|
|
2024 |
|
2023 |
Health, Wealth &
Career |
|
21.9% |
|
18.3% |
Risk & Broking |
|
20.6% |
|
16.1% |
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
Health, Wealth &
Career |
|
23.6% |
|
21.2% |
Risk & Broking |
|
20.7% |
|
18.0% |
|
|
|
|
|
RECONCILIATIONS OF SEGMENT OPERATING INCOME TO INCOME
FROM OPERATIONS BEFORE INCOME TAXES
|
|
Three Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Segment Operating Income |
|
$ |
478 |
|
|
$ |
367 |
|
Amortization |
|
|
(60 |
) |
|
|
(70 |
) |
Restructuring costs |
|
|
(3 |
) |
|
|
(10 |
) |
Transaction and
transformation(i) |
|
|
(97 |
) |
|
|
(93 |
) |
Unallocated, net(ii) |
|
|
(106 |
) |
|
|
(52 |
) |
Income from Operations |
|
|
212 |
|
|
|
142 |
|
Interest expense |
|
|
(68 |
) |
|
|
(57 |
) |
Other income, net |
|
|
24 |
|
|
|
35 |
|
Income from operations before
income taxes |
|
$ |
168 |
|
|
$ |
120 |
|
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Segment Operating Income |
|
$ |
1,017 |
|
|
$ |
856 |
|
Amortization |
|
|
(120 |
) |
|
|
(141 |
) |
Restructuring costs |
|
|
(21 |
) |
|
|
(13 |
) |
Transaction and
transformation(i) |
|
|
(222 |
) |
|
|
(152 |
) |
Unallocated, net(ii) |
|
|
(162 |
) |
|
|
(123 |
) |
Income from Operations |
|
|
492 |
|
|
|
427 |
|
Interest expense |
|
|
(132 |
) |
|
|
(111 |
) |
Other income, net |
|
|
50 |
|
|
|
60 |
|
Income from operations before
income taxes |
|
$ |
410 |
|
|
$ |
376 |
|
(i) In 2024 and 2023, in addition to legal fees and other
transaction costs, includes primarily consulting fees and
compensation costs related to the Transformation program. (ii)
Includes certain costs, primarily related to corporate functions
which are not directly related to the segments, and certain
differences between budgeted expenses determined at the beginning
of the year and actual expenses that we report for U.S. GAAP
purposes.
|
WTWReconciliations of Non-GAAP
Measures (In millions of U.S. dollars, except per share
data)(Unaudited) |
|
RECONCILIATIONS OF NET INCOME ATTRIBUTABLE TO WTW TO
ADJUSTED DILUTED EARNINGS PER SHARE
|
|
Three Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Net Income attributable to WTW |
|
$ |
141 |
|
|
$ |
94 |
|
Adjusted for certain
items: |
|
|
|
|
|
|
Amortization |
|
|
60 |
|
|
|
70 |
|
Restructuring costs |
|
|
3 |
|
|
|
10 |
|
Transaction and transformation |
|
|
97 |
|
|
|
93 |
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
Gain on disposal of operations |
|
|
— |
|
|
|
(3 |
) |
Tax effect on certain items listed above(ii) |
|
|
(44 |
) |
|
|
(43 |
) |
Tax effect of significant adjustments |
|
|
(7 |
) |
|
|
(2 |
) |
Adjusted Net
Income |
|
$ |
263 |
|
|
$ |
219 |
|
|
|
|
|
|
|
|
Weighted-average ordinary
shares, diluted |
|
|
103 |
|
|
|
107 |
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share |
|
$ |
1.36 |
|
|
$ |
0.88 |
|
Adjusted for certain
items:(iii) |
|
|
|
|
|
|
Amortization |
|
|
0.58 |
|
|
|
0.65 |
|
Restructuring costs |
|
|
0.03 |
|
|
|
0.09 |
|
Transaction and transformation |
|
|
0.94 |
|
|
|
0.87 |
|
Provision for specified litigation matter(i) |
|
|
0.13 |
|
|
|
— |
|
Gain on disposal of operations |
|
|
— |
|
|
|
(0.03 |
) |
Tax effect on certain items listed above(ii) |
|
|
(0.43 |
) |
|
|
(0.40 |
) |
Tax effect of significant adjustments |
|
|
(0.07 |
) |
|
|
(0.02 |
) |
Adjusted Diluted
Earnings Per Share(iii) |
|
$ |
2.55 |
|
|
$ |
2.05 |
|
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Net Income attributable to WTW |
|
$ |
331 |
|
|
$ |
297 |
|
Adjusted for certain
items: |
|
|
|
|
|
|
Amortization |
|
|
120 |
|
|
|
141 |
|
Restructuring costs |
|
|
21 |
|
|
|
13 |
|
Transaction and transformation |
|
|
222 |
|
|
|
152 |
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
Gain on disposal of operations |
|
|
— |
|
|
|
(3 |
) |
Tax effect on certain items listed above(ii) |
|
|
(96 |
) |
|
|
(77 |
) |
Tax effect of significant adjustments |
|
|
(7 |
) |
|
|
2 |
|
Adjusted Net
Income |
|
$ |
604 |
|
|
$ |
525 |
|
|
|
|
|
|
|
|
Weighted-average ordinary
shares, diluted |
|
|
104 |
|
|
|
107 |
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share |
|
$ |
3.20 |
|
|
$ |
2.77 |
|
Adjusted for certain
items:(iii) |
|
|
|
|
|
|
Amortization |
|
|
1.16 |
|
|
|
1.31 |
|
Restructuring costs |
|
|
0.20 |
|
|
|
0.12 |
|
Transaction and transformation |
|
|
2.14 |
|
|
|
1.42 |
|
Provision for specified litigation matter(i) |
|
|
0.13 |
|
|
|
— |
|
Gain on disposal of operations |
|
|
— |
|
|
|
(0.03 |
) |
Tax effect on certain items listed above(ii) |
|
|
(0.93 |
) |
|
|
(0.72 |
) |
Tax effect of significant adjustments |
|
|
(0.07 |
) |
|
|
0.02 |
|
Adjusted Diluted
Earnings Per Share(iii) |
|
$ |
5.84 |
|
|
$ |
4.89 |
|
(i) Represents a provision related to potential litigation
arising out of a structured insurance program originally placed for
a client over 15 years ago. The program is of a type and complexity
that was highly bespoke to the client and for that reason is
unlikely to be exactly replicated elsewhere. Because of this,
while we do not believe the potential litigation is material, we
believe excluding this matter from adjusted results makes results
more comparable from period to period and more representative of
our core business operations.(ii) The tax effect was calculated
using an effective tax rate for each item.(iii) Per share values
and totals may differ due to rounding.
RECONCILIATIONS OF NET INCOME TO ADJUSTED
EBITDA
|
|
Three Months Ended June 30, |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
142 |
|
6.3% |
|
$ |
96 |
|
4.4% |
Provision for income taxes |
|
|
26 |
|
|
|
24 |
|
|
Interest expense |
|
|
68 |
|
|
|
57 |
|
|
Depreciation |
|
|
57 |
|
|
|
64 |
|
|
Amortization |
|
|
60 |
|
|
|
70 |
|
|
Restructuring costs |
|
|
3 |
|
|
|
10 |
|
|
Transaction and transformation |
|
|
97 |
|
|
|
93 |
|
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
|
Gain on disposal of operations |
|
|
— |
|
|
|
(3 |
) |
|
Adjusted EBITDA and
Adjusted EBITDA Margin |
|
$ |
466 |
|
20.6% |
|
$ |
411 |
|
19.0% |
|
|
Six Months Ended June 30, |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
336 |
|
7.3% |
|
$ |
302 |
|
6.9% |
Provision for income taxes |
|
|
74 |
|
|
|
74 |
|
|
Interest expense |
|
|
132 |
|
|
|
111 |
|
|
Depreciation |
|
|
116 |
|
|
|
124 |
|
|
Amortization |
|
|
120 |
|
|
|
141 |
|
|
Restructuring costs |
|
|
21 |
|
|
|
13 |
|
|
Transaction and transformation |
|
|
222 |
|
|
|
152 |
|
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
|
Gain on disposal of operations |
|
|
— |
|
|
|
(3 |
) |
|
Adjusted EBITDA and
Adjusted EBITDA Margin |
|
$ |
1,034 |
|
22.4% |
|
$ |
914 |
|
20.8% |
(i) Represents a provision related to potential litigation
arising out of a structured insurance program originally placed for
a client over 15 years ago. The program is of a type and complexity
that was highly bespoke to the client and for that reason is
unlikely to be exactly replicated elsewhere. Because of this,
while we do not believe the potential litigation is material, we
believe excluding this matter from adjusted results makes results
more comparable from period to period and more representative of
our core business operations.
RECONCILIATIONS OF INCOME FROM OPERATIONS TO ADJUSTED
OPERATING INCOME
|
|
Three Months Ended June 30, |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Income from operations and Operating margin |
|
$ |
212 |
|
9.4% |
|
$ |
142 |
|
6.6% |
Adjusted for certain
items: |
|
|
|
|
|
Amortization |
|
|
60 |
|
|
|
70 |
|
|
Restructuring costs |
|
|
3 |
|
|
|
10 |
|
|
Transaction and transformation |
|
|
97 |
|
|
|
93 |
|
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
|
Adjusted operating
income and Adjusted operating income margin |
|
$ |
385 |
|
17.0% |
|
$ |
315 |
|
14.6% |
|
|
Six Months Ended June 30, |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Income from operations and Operating margin |
|
$ |
492 |
|
10.7% |
|
$ |
427 |
|
9.7% |
Adjusted for certain
items: |
|
|
|
|
|
|
|
Amortization |
|
|
120 |
|
|
|
141 |
|
|
Restructuring costs |
|
|
21 |
|
|
|
13 |
|
|
Transaction and transformation |
|
|
222 |
|
|
|
152 |
|
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
|
Adjusted operating
income and Adjusted operating income margin |
|
$ |
868 |
|
18.8% |
|
$ |
733 |
|
16.6% |
(i) Represents a provision related to potential litigation
arising out of a structured insurance program originally placed for
a client over 15 years ago. The program is of a type and complexity
that was highly bespoke to the client and for that reason is
unlikely to be exactly replicated elsewhere. Because of this,
while we do not believe the potential litigation is material, we
believe excluding this matter from adjusted results makes results
more comparable from period to period and more representative of
our core business operations.
RECONCILIATIONS OF GAAP INCOME TAXES/TAX RATE TO
ADJUSTED INCOME TAXES/TAX RATE
|
|
Three Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Income from operations before income taxes |
|
$ |
168 |
|
|
$ |
120 |
|
|
|
|
|
|
|
|
Adjusted for certain
items: |
|
|
|
|
|
|
Amortization |
|
|
60 |
|
|
|
70 |
|
Restructuring costs |
|
|
3 |
|
|
|
10 |
|
Transaction and transformation |
|
|
97 |
|
|
|
93 |
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
Gain on disposal of operations |
|
|
— |
|
|
|
(3 |
) |
Adjusted income before
taxes |
|
$ |
341 |
|
|
$ |
290 |
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
$ |
26 |
|
|
$ |
24 |
|
Tax effect on certain items listed above(ii) |
|
|
44 |
|
|
|
43 |
|
Tax effect of significant adjustments |
|
|
7 |
|
|
|
2 |
|
Adjusted income
taxes |
|
$ |
77 |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
U.S. GAAP tax
rate |
|
|
15.6 |
% |
|
|
19.8 |
% |
Adjusted income tax
rate |
|
|
22.6 |
% |
|
|
23.7 |
% |
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Income from operations before income taxes |
|
$ |
410 |
|
|
$ |
376 |
|
|
|
|
|
|
|
|
Adjusted for certain
items: |
|
|
|
|
|
|
Amortization |
|
|
120 |
|
|
|
141 |
|
Restructuring costs |
|
|
21 |
|
|
|
13 |
|
Transaction and transformation |
|
|
222 |
|
|
|
152 |
|
Provision for specified litigation matter(i) |
|
|
13 |
|
|
|
— |
|
Gain on disposal of operations |
|
|
— |
|
|
|
(3 |
) |
Adjusted income before
taxes |
|
$ |
786 |
|
|
$ |
679 |
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
$ |
74 |
|
|
$ |
74 |
|
Tax effect on certain items listed above(ii) |
|
|
96 |
|
|
|
77 |
|
Tax effect of significant adjustments |
|
|
7 |
|
|
|
(2 |
) |
Adjusted income
taxes |
|
$ |
177 |
|
|
$ |
149 |
|
|
|
|
|
|
|
|
U.S. GAAP tax
rate |
|
|
18.1 |
% |
|
|
19.6 |
% |
Adjusted income tax
rate |
|
|
22.5 |
% |
|
|
22.0 |
% |
(i) Represents a provision related to potential litigation
arising out of a structured insurance program originally placed for
a client over 15 years ago. The program is of a type and complexity
that was highly bespoke to the client and for that reason is
unlikely to be exactly replicated elsewhere. Because of this,
while we do not believe the potential litigation is material, we
believe excluding this matter from adjusted results makes results
more comparable from period to period and more representative of
our core business operations.(ii) The tax effect was calculated
using an effective tax rate for each item.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
TO FREE CASH FLOW
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Cash flows from operating activities |
|
$ |
431 |
|
|
$ |
430 |
|
Less: Additions to fixed
assets and software for internal use |
|
|
(70 |
) |
|
|
(80 |
) |
Free Cash
Flow |
|
$ |
361 |
|
|
$ |
350 |
|
|
|
|
|
|
|
|
|
|
|
WILLIS TOWERS WATSON PUBLIC LIMITED
COMPANYCondensed Consolidated Statements of
Income(In millions of U.S. dollars, except per share
data)(Unaudited) |
|
|
|
|
|
|
|
Three Months EndedJune30, |
|
Six Months EndedJune30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenue |
|
$ |
2,265 |
|
|
$ |
2,159 |
|
|
$ |
4,606 |
|
|
$ |
4,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of providing
services |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
1,397 |
|
|
|
1,347 |
|
|
|
2,739 |
|
|
|
2,660 |
|
Other operating expenses |
|
|
439 |
|
|
|
433 |
|
|
|
896 |
|
|
|
886 |
|
Depreciation |
|
|
57 |
|
|
|
64 |
|
|
|
116 |
|
|
|
124 |
|
Amortization |
|
|
60 |
|
|
|
70 |
|
|
|
120 |
|
|
|
141 |
|
Restructuring costs |
|
|
3 |
|
|
|
10 |
|
|
|
21 |
|
|
|
13 |
|
Transaction and transformation |
|
|
97 |
|
|
|
93 |
|
|
|
222 |
|
|
|
152 |
|
Total costs of providing
services |
|
|
2,053 |
|
|
|
2,017 |
|
|
|
4,114 |
|
|
|
3,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
212 |
|
|
|
142 |
|
|
|
492 |
|
|
|
427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(68 |
) |
|
|
(57 |
) |
|
|
(132 |
) |
|
|
(111 |
) |
Other income, net |
|
|
24 |
|
|
|
35 |
|
|
|
50 |
|
|
|
60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS BEFORE INCOME TAXES |
|
168 |
|
|
|
120 |
|
|
|
410 |
|
|
|
376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
(26 |
) |
|
|
(24 |
) |
|
|
(74 |
) |
|
|
(74 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
142 |
|
|
|
96 |
|
|
|
336 |
|
|
|
302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable to
non-controlling interests |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO
WTW |
|
$ |
141 |
|
|
$ |
94 |
|
|
$ |
331 |
|
|
$ |
297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.37 |
|
|
$ |
0.88 |
|
|
$ |
3.22 |
|
|
$ |
2.78 |
|
Diluted earnings per share |
|
$ |
1.36 |
|
|
$ |
0.88 |
|
|
$ |
3.20 |
|
|
$ |
2.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average ordinary
shares, basic |
|
|
103 |
|
|
|
107 |
|
|
|
103 |
|
|
|
107 |
|
Weighted-average ordinary
shares, diluted |
|
|
103 |
|
|
|
107 |
|
|
|
104 |
|
|
|
107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WILLIS TOWERS WATSON PUBLIC LIMITED
COMPANYCondensed Consolidated Balance
Sheets(In millions of U.S. dollars, except share
data)(Unaudited) |
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2024 |
|
2023 |
ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,247 |
|
|
$ |
1,424 |
|
Fiduciary assets |
|
|
9,925 |
|
|
|
9,073 |
|
Accounts receivable, net |
|
|
2,425 |
|
|
|
2,572 |
|
Prepaid and other current
assets |
|
|
432 |
|
|
|
364 |
|
Total current assets |
|
|
14,029 |
|
|
|
13,433 |
|
Fixed assets, net |
|
|
709 |
|
|
|
720 |
|
Goodwill |
|
|
10,184 |
|
|
|
10,195 |
|
Other intangible assets,
net |
|
|
1,898 |
|
|
|
2,016 |
|
Right-of-use assets |
|
|
536 |
|
|
|
565 |
|
Pension benefits assets |
|
|
611 |
|
|
|
588 |
|
Other non-current assets |
|
|
1,655 |
|
|
|
1,573 |
|
Total non-current assets |
|
|
15,593 |
|
|
|
15,657 |
|
TOTAL
ASSETS |
|
$ |
29,622 |
|
|
$ |
29,090 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
Fiduciary liabilities |
|
$ |
9,925 |
|
|
$ |
9,073 |
|
Deferred revenue and accrued
expenses |
|
|
1,891 |
|
|
|
2,104 |
|
Current debt |
|
|
— |
|
|
|
650 |
|
Current lease liabilities |
|
|
118 |
|
|
|
125 |
|
Other current liabilities |
|
|
740 |
|
|
|
678 |
|
Total current liabilities |
|
|
12,674 |
|
|
|
12,630 |
|
Long-term debt |
|
|
5,307 |
|
|
|
4,567 |
|
Liability for pension
benefits |
|
|
505 |
|
|
|
563 |
|
Deferred tax liabilities |
|
|
552 |
|
|
|
542 |
|
Provision for liabilities |
|
|
409 |
|
|
|
365 |
|
Long-term lease
liabilities |
|
|
564 |
|
|
|
592 |
|
Other non-current
liabilities |
|
|
196 |
|
|
|
238 |
|
Total non-current liabilities |
|
|
7,533 |
|
|
|
6,867 |
|
TOTAL
LIABILITIES |
|
|
20,207 |
|
|
|
19,497 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
EQUITY(i) |
|
|
|
|
|
|
Additional paid-in
capital |
|
|
10,943 |
|
|
|
10,910 |
|
Retained earnings |
|
|
1,315 |
|
|
|
1,466 |
|
Accumulated other
comprehensive loss, net of tax |
|
|
(2,921 |
) |
|
|
(2,856 |
) |
Total WTW
shareholders' equity |
|
|
9,337 |
|
|
|
9,520 |
|
Non-controlling interests |
|
|
78 |
|
|
|
73 |
|
Total
Equity |
|
|
9,415 |
|
|
|
9,593 |
|
TOTAL LIABILITIES AND
EQUITY |
|
$ |
29,622 |
|
|
$ |
29,090 |
|
(i) Equity includes (a) Ordinary shares $0.000304635
nominal value; Authorized 1,510,003,775; Issued 101,547,339 (2024)
and 102,538,072 (2023); Outstanding 101,547,339 (2024) and
102,538,072 (2023) and (b) Preference shares, $0.000115 nominal
value; Authorized 1,000,000,000 and Issued none in 2024 and
2023.
|
WILLIS TOWERS WATSON PUBLIC LIMITED
COMPANYCondensed Consolidated Statements of Cash
Flows(In millions of U.S. dollars)(Unaudited) |
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
|
NET INCOME |
|
$ |
336 |
|
|
$ |
302 |
|
Adjustments to reconcile net
income to total net cash from operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
116 |
|
|
|
124 |
|
Amortization |
|
|
120 |
|
|
|
141 |
|
Non-cash restructuring
charges |
|
|
12 |
|
|
|
8 |
|
Non-cash lease expense |
|
|
49 |
|
|
|
58 |
|
Net periodic benefit of
defined benefit pension plans |
|
|
(11 |
) |
|
|
(11 |
) |
Provision for doubtful
receivables from clients |
|
|
10 |
|
|
|
5 |
|
Benefit from deferred income
taxes |
|
|
(25 |
) |
|
|
(37 |
) |
Share-based compensation |
|
|
54 |
|
|
|
58 |
|
Net gain on disposal of
operations |
|
|
— |
|
|
|
(3 |
) |
Non-cash foreign exchange
(gain)/loss |
|
|
(12 |
) |
|
|
6 |
|
Other, net |
|
|
22 |
|
|
|
16 |
|
Changes in operating assets
and liabilities, net of effects from purchase of subsidiaries: |
|
|
|
|
|
|
Accounts receivable |
|
|
118 |
|
|
|
164 |
|
Other assets |
|
|
(161 |
) |
|
|
(81 |
) |
Other liabilities |
|
|
(242 |
) |
|
|
(346 |
) |
Provisions |
|
|
45 |
|
|
|
26 |
|
Net cash from operating
activities |
|
|
431 |
|
|
|
430 |
|
|
|
|
|
|
|
|
CASH FLOWS USED IN INVESTING
ACTIVITIES |
|
|
|
|
|
|
Additions to fixed assets and
software for internal use |
|
|
(70 |
) |
|
|
(80 |
) |
Capitalized software
costs |
|
|
(56 |
) |
|
|
(41 |
) |
Acquisitions of operations,
net of cash acquired |
|
|
(18 |
) |
|
|
(4 |
) |
Proceeds from sale of
operations |
|
|
— |
|
|
|
9 |
|
Cash and fiduciary funds
transferred in sale of operations |
|
|
— |
|
|
|
(916 |
) |
Purchase of investments |
|
|
(14 |
) |
|
|
(3 |
) |
Net cash used in investing
activities |
|
|
(158 |
) |
|
|
(1,035 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM/(USED IN)
FINANCING ACTIVITIES |
|
|
|
|
|
|
Senior notes issued |
|
|
746 |
|
|
|
748 |
|
Debt issuance costs |
|
|
(9 |
) |
|
|
(6 |
) |
Repayments of debt |
|
|
(652 |
) |
|
|
(2 |
) |
Repurchase of shares |
|
|
(301 |
) |
|
|
(454 |
) |
Net proceeds/(payments) from
fiduciary funds held for clients |
|
|
783 |
|
|
|
(194 |
) |
Payments of deferred and
contingent consideration related to acquisitions |
|
|
— |
|
|
|
(7 |
) |
Cash paid for employee taxes
on withholding shares |
|
|
(24 |
) |
|
|
(17 |
) |
Dividends paid |
|
|
(176 |
) |
|
|
(177 |
) |
Acquisitions of and dividends
paid to non-controlling interests |
|
|
(3 |
) |
|
|
(4 |
) |
Net cash from/(used in)
financing activities |
|
|
364 |
|
|
|
(113 |
) |
|
|
|
|
|
|
|
INCREASE/(DECREASE) IN CASH,
CASH EQUIVALENTS AND RESTRICTEDCASH |
|
|
637 |
|
|
|
(718 |
) |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
|
(53 |
) |
|
|
1 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, BEGINNING OFPERIOD(i) |
|
|
3,792 |
|
|
|
4,721 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, END OF PERIOD(i) |
|
$ |
4,376 |
|
|
$ |
4,004 |
|
(i) The amounts of cash, cash equivalents and
restricted cash, their respective classification on the condensed
consolidated balance sheets, as well as their respective portions
of the increase or decrease in cash, cash equivalents and
restricted cash for each of the periods presented have been
included in the Supplemental Disclosures of Cash Flow Information
section.
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
|
|
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Supplemental disclosures of cash
flow information: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,247 |
|
|
$ |
1,602 |
|
Fiduciary funds (included in fiduciary assets) |
|
|
3,129 |
|
|
|
2,402 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
4,376 |
|
|
$ |
4,004 |
|
|
|
|
|
|
|
|
(Decrease)/increase in cash, cash equivalents and other restricted
cash |
|
$ |
(154 |
) |
|
$ |
345 |
|
Increase/(decrease) in fiduciary funds |
|
|
791 |
|
|
|
(1,063 |
) |
Total(i) |
|
$ |
637 |
|
|
$ |
(718 |
) |
(i) Does not include the effect of exchange rate changes on
cash, cash equivalents and restricted cash.
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