[10-Q] Willis Towers Watson Public Limited Company Quarterly Earnings Report
Willis Towers Watson (WTW) delivered a markedly more profitable Q2 2025 despite flat top-line growth. Revenue was $2.26 bn, virtually unchanged YoY, but disciplined cost control after the 2024 Transformation program lifted operating income 73% to $368 m and expanded the operating margin to 16.3% (vs 9.4%). Net income attributable to WTW more than doubled to $331 m, driving diluted EPS to $3.32 from $1.36. For the first six months, EPS rose 76% to $5.64 while revenue slipped 2.6% to $4.48 bn.
- Segment trends: Health, Wealth & Career revenue fell 6% but maintained a 23.9% operating margin; Risk & Broking rose 7.5% with margin up to 21.2%.
- Balance sheet: Cash increased to $1.96 bn; long-term debt cut 10% to $4.76 bn, lowering leverage. AOCL improved by $452 m.
- Capital returns: Company repurchased $700 m of shares in H1, shrinking share count to 97.9 m; dividends paid totaled $179 m.
- Cash flow: Operating cash flow fell 24% to $326 m; a $836 m divestiture boosted investing inflows, while heavy buybacks drove a $800 m financing outflow.
- Guidance & outlook: Management highlights continued margin expansion post-transformation but notes macro, FX and regulatory risks within the 10-Q.
Willis Towers Watson (WTW) ha registrato un secondo trimestre 2025 nettamente pi霉 redditizio nonostante una crescita dei ricavi stabile. Il fatturato 猫 stato di 2,26 miliardi di dollari, praticamente invariato rispetto all'anno precedente, ma un rigoroso controllo dei costi dopo il programma di trasformazione del 2024 ha portato a un aumento del reddito operativo del 73%, raggiungendo 368 milioni di dollari, con un margine operativo salito al 16,3% (rispetto al 9,4%). L'utile netto attribuibile a WTW 猫 pi霉 che raddoppiato, arrivando a 331 milioni di dollari, con un utile per azione diluito passato da 1,36 a 3,32 dollari. Nei primi sei mesi, l'utile per azione 猫 cresciuto del 76% a 5,64 dollari, mentre i ricavi sono scesi del 2,6% a 4,48 miliardi di dollari.
- Tendenze per segmento: I ricavi di Health, Wealth & Career sono diminuiti del 6% ma hanno mantenuto un margine operativo del 23,9%; Risk & Broking 猫 aumentato del 7,5% con margine salito al 21,2%.
- Bilancio: La liquidit脿 猫 aumentata a 1,96 miliardi di dollari; il debito a lungo termine 猫 stato ridotto del 10% a 4,76 miliardi, riducendo la leva finanziaria. AOCL 猫 migliorato di 452 milioni di dollari.
- Ritorni sul capitale: L'azienda ha riacquistato azioni per 700 milioni di dollari nel primo semestre, riducendo il numero di azioni a 97,9 milioni; i dividendi pagati sono stati pari a 179 milioni di dollari.
- Flussi di cassa: Il flusso di cassa operativo 猫 diminuito del 24% a 326 milioni di dollari; una dismissione da 836 milioni ha aumentato gli afflussi da investimenti, mentre i consistenti riacquisti hanno generato un deflusso finanziario di 800 milioni.
- Previsioni e prospettive: La direzione sottolinea una continua espansione del margine dopo la trasformazione, ma segnala rischi macroeconomici, di cambio e normativi nel documento 10-Q.
Willis Towers Watson (WTW) present贸 un segundo trimestre de 2025 notablemente m谩s rentable a pesar de un crecimiento estable en los ingresos. Los ingresos fueron de 2,26 mil millones de d贸lares, pr谩cticamente sin cambios interanuales, pero un control disciplinado de costos tras el programa de transformaci贸n de 2024 elev贸 el ingreso operativo un 73% hasta 368 millones de d贸lares y ampli贸 el margen operativo al 16,3% (frente al 9,4%). El ingreso neto atribuible a WTW se duplic贸 con creces hasta 331 millones de d贸lares, impulsando las ganancias diluidas por acci贸n a 3,32 d贸lares desde 1,36. En los primeros seis meses, las ganancias por acci贸n aumentaron un 76% hasta 5,64 d贸lares mientras que los ingresos cayeron un 2,6% hasta 4,48 mil millones de d贸lares.
- Tendencias por segmento: Los ingresos de Health, Wealth & Career cayeron un 6% pero mantuvieron un margen operativo del 23,9%; Risk & Broking subi贸 un 7,5% con un margen que aument贸 al 21,2%.
- Balance: El efectivo aument贸 a 1,96 mil millones de d贸lares; la deuda a largo plazo se redujo un 10% a 4,76 mil millones, disminuyendo el apalancamiento. AOCL mejor贸 en 452 millones de d贸lares.
- Retornos de capital: La compa帽铆a recompr贸 acciones por 700 millones de d贸lares en el primer semestre, reduciendo el n煤mero de acciones a 97,9 millones; los dividendos pagados totalizaron 179 millones de d贸lares.
- Flujo de caja: El flujo de caja operativo cay贸 un 24% a 326 millones de d贸lares; una desinversi贸n de 836 millones impuls贸 los ingresos por inversiones, mientras que las fuertes recompras generaron un flujo de salida financiera de 800 millones.
- Gu铆a y perspectivas: La direcci贸n destaca una continua expansi贸n de m谩rgenes tras la transformaci贸n, pero se帽ala riesgos macroecon贸micos, cambiarios y regulatorios en el formulario 10-Q.
Willis Towers Watson(WTW)電� 2025雲� 2攵勱赴鞐� 毵れ稖 靹膘灔 鞝曥泊鞐愲弰 攵堦惮頃橁碃 韥矊 頄レ儊霅� 靾橃澋靹膘潉 旮半頄堨姷雼堧嫟. 毵れ稖鞚� 22鞏� 6觳滊 雼煬搿� 鞝勲厔 雽�牍� 瓯办潣 氤�霃欖澊 鞐嗢棃鞙茧倶, 2024雲� 氤�順� 頂勲攴鸽灗 鞚错泟 鞐勱博頃� 牍勳毄 甏�毽 鞓侅梾鞚挫澋鞚� 73% 歃濌皜頃� 3鞏� 6,800毵� 雼煬毳� 旮半頄堦碃, 鞓侅梾鞚挫澋毳犾潃 9.4%鞐愳劀 16.3%搿� 頇曤寑霅橃棃鞀惦媹雼�. WTW 攴�靻� 靾滌澊鞚奠潃 3鞏� 3,100毵� 雼煬搿� 霊� 氚� 鞚挫儊 歃濌皜頄堨溂氅�, 頋劃 欤茧嫻靾滌澊鞚�(EPS)鞚� 1.36雼煬鞐愳劀 3.32雼煬搿� 靸侅姽頄堨姷雼堧嫟. 靸侂皹旮� EPS電� 76% 歃濌皜頃� 5.64雼煬毳� 旮半頄堨溂氅�, 毵れ稖鞚� 2.6% 臧愳唽頃� 44鞏� 8觳滊 雼煬鞓�鞀惦媹雼�.
- 攵�氍� 霃欗枼: Health, Wealth & Career 毵れ稖鞚� 6% 臧愳唽頄堨溂雮� 23.9%鞚� 鞓侅梾鞚挫澋毳犾潉 鞙犾頄堨溂氅�, Risk & Broking鞚� 7.5% 歃濌皜頃� 鞓侅梾鞚挫澋毳犾澊 21.2%搿� 靸侅姽頄堨姷雼堧嫟.
- 鞛 靸來儨: 順勱笀鞚� 19鞏� 6觳滊 雼煬搿� 歃濌皜頄堦碃, 鞛リ赴 攵�毂勲姅 10% 欷勳柎霌� 47鞏� 6觳滊 雼煬搿� 霠堧矂毽臧� 雮晞臁岇姷雼堧嫟. AOCL電� 4鞏� 5,200毵� 雼煬 臧滌劆霅橃棃鞀惦媹雼�.
- 鞛愲掣 頇橃洂: 須岇偓電� 靸侂皹旮办棎 7鞏� 雼煬 靸侂嫻鞚� 鞛愳偓欤茧ゼ 毵れ瀰頃� 欤检嫕 靾橂ゼ 9,790毵� 欤茧 欷勳榾鞙茧┌, 氚半嫻旮堨潃 齑� 1鞏� 7,900毵� 雼煬毳� 歆�旮夗枅鞀惦媹雼�.
- 順勱笀 頋愲: 鞓侅梾 順勱笀 頋愲鞚� 24% 臧愳唽頃� 3鞏� 2,600毵� 雼煬鞓�瓿�, 8鞏� 3,600毵� 雼煬 攴滊鞚� 鞛愳偘 毵り皝鞙茧 韴瀽 鞙犾瀰鞚� 歃濌皜頄堨溂氅�, 雽�攴滊 鞛愳偓欤� 毵れ瀰鞙茧 8鞏� 雼煬鞚� 鞛 鞙犾稖鞚� 氚滌儩頄堨姷雼堧嫟.
- 臧�鞚措摐霛检澑 氚� 鞝勲: 瓴届榿歆勳潃 氤�順� 鞚错泟 歆�靻嶌爜鞚� 毵堨 頇曤寑毳� 臧曥“頄堨溂雮�, 10-Q 氤搓碃靹滌棎靹� 瓯办嫓瓴届牅, 頇橃湪 氚� 攴滌牅 鞙勴棙鞚� 鞏戈笁頄堨姷雼堧嫟.
Willis Towers Watson (WTW) a enregistr茅 un deuxi猫me trimestre 2025 nettement plus rentable malgr茅 une croissance stable du chiffre d'affaires. Le revenu s'est 茅lev茅 脿 2,26 milliards de dollars, pratiquement inchang茅 en glissement annuel, mais un contr么le rigoureux des co没ts apr猫s le programme de transformation de 2024 a fait grimper le r茅sultat op茅rationnel de 73 % 脿 368 millions de dollars, avec une marge op茅rationnelle port茅e 脿 16,3 % (contre 9,4 %). Le r茅sultat net attribuable 脿 WTW a plus que doubl茅 pour atteindre 331 millions de dollars, faisant passer le BPA dilu茅 de 1,36 脿 3,32 dollars. Sur les six premiers mois, le BPA a augment茅 de 76 % 脿 5,64 dollars tandis que le chiffre d'affaires a recul茅 de 2,6 % 脿 4,48 milliards de dollars.
- Tendances par segment : Les revenus de Health, Wealth & Career ont diminu茅 de 6 % mais ont maintenu une marge op茅rationnelle de 23,9 % ; Risk & Broking a progress茅 de 7,5 % avec une marge port茅e 脿 21,2 %.
- Bilan : La tr茅sorerie a augment茅 脿 1,96 milliard de dollars ; la dette 脿 long terme a 茅t茅 r茅duite de 10 % 脿 4,76 milliards, diminuant l'effet de levier. L'AOCL s'est am茅lior茅 de 452 millions de dollars.
- Retour sur capital : La soci茅t茅 a rachet茅 pour 700 millions de dollars d'actions au premier semestre, r茅duisant le nombre d'actions 脿 97,9 millions ; les dividendes vers茅s ont totalis茅 179 millions de dollars.
- Flux de tr茅sorerie : Le flux de tr茅sorerie op茅rationnel a chut茅 de 24 % 脿 326 millions de dollars ; une cession de 836 millions a augment茅 les entr茅es li茅es aux investissements, tandis que d'importants rachats d'actions ont entra卯n茅 une sortie de financement de 800 millions.
- Pr茅visions et perspectives : La direction souligne une expansion continue des marges apr猫s la transformation, tout en notant les risques macro茅conomiques, de change et r茅glementaires dans le rapport 10-Q.
Willis Towers Watson (WTW) erzielte im zweiten Quartal 2025 trotz stagnierendem Umsatzwachstum deutlich h枚here Gewinne. Der Umsatz betrug 2,26 Mrd. USD und blieb damit im Jahresvergleich praktisch unver盲ndert. Durch disziplinierte Kostenkontrolle nach dem Transformationsprogramm 2024 stieg das operative Ergebnis um 73 % auf 368 Mio. USD, und die operative Marge erh枚hte sich auf 16,3 % (vorher 9,4 %). Der dem WTW zurechenbare Nettogewinn verdoppelte sich auf 331 Mio. USD, was das verw盲sserte Ergebnis je Aktie von 1,36 auf 3,32 USD ansteigen lie脽. F眉r die ersten sechs Monate stieg das Ergebnis je Aktie um 76 % auf 5,64 USD, w盲hrend der Umsatz um 2,6 % auf 4,48 Mrd. USD zur眉ckging.
- Segmenttrends: Die Ums盲tze im Bereich Health, Wealth & Career sanken um 6 %, behielten jedoch eine operative Marge von 23,9 %; Risk & Broking legte um 7,5 % zu, mit einer Marge von 21,2 %.
- Bilanz: Die liquiden Mittel stiegen auf 1,96 Mrd. USD; die langfristigen Schulden wurden um 10 % auf 4,76 Mrd. USD reduziert, was die Verschuldung senkte. AOCL verbesserte sich um 452 Mio. USD.
- 碍补辫颈迟补濒谤眉肠办蹿濒眉蝉蝉别: Das Unternehmen kaufte im ersten Halbjahr Aktien im Wert von 700 Mio. USD zur眉ck und verringerte die Anzahl der Aktien auf 97,9 Mio.; Dividendenzahlungen beliefen sich auf 179 Mio. USD.
- Cashflow: Der operative Cashflow sank um 24 % auf 326 Mio. USD; ein Verkaufserl枚s von 836 Mio. USD steigerte die Investitionseinnahmen, w盲hrend umfangreiche Aktienr眉ckk盲ufe einen Finanzierungsabfluss von 800 Mio. USD verursachten.
- Prognose und Ausblick: Das Management hebt die anhaltende Margenausweitung nach der Transformation hervor, weist jedoch im 10-Q-Bericht auf makro枚konomische, W盲hrungs- und regulatorische Risiken hin.
- EPS up 144% YoY to $3.32 on margin expansion and lower transformation costs
- Operating margin 16.3% vs 9.4%, reflecting successful cost restructuring
- Long-term debt reduced by $547 m, improving leverage profile
- AOCL improvement of $452 m boosted book equity
- Share count down ~2 m shares from aggressive $700 m buyback
- Revenue declined 0.2% in Q2 and 2.6% YTD, signaling top-line pressure
- Operating cash flow fell 24% YoY to $326 m despite higher earnings
- Retained earnings swung to a $206 m deficit driven by heavy repurchases
- HWC segment revenue down 6%, the company鈥檚 largest business line
Insights
TL;DR: Strong margin expansion and EPS beat offset flat revenue; deleveraging and buybacks supportive, cash generation needs monitoring.
Cost reductions from the now-completed Transformation program are clearly flowing through. Operating expenses dropped 8%, flipping a modest sales decline into 135% EPS growth. Long-term debt fell by $547 m, improving net leverage to ~0.8脳 EBITDA, and AOCL recovered $452 m on FX moves. Management鈥檚 aggressive $700 m H1 repurchase (鈮�6% of equity) is accretive but, coupled with a 24% slide in operating cash flow, constrains liquidity. Investors will watch for revenue re-acceleration in H2 and sustainable cash conversion before assigning a higher multiple.
TL;DR: Profit surge aided by one-offs; flat sales, lower OCF and pension, FX, regulatory exposures temper enthusiasm.
WTW鈥檚 earnings quality benefits from lower restructuring and transformation spend鈥攐nly $2 m this quarter versus $97 m prior. Excluding these tailwinds, underlying growth is modest. Operating cash shortfall versus earnings raises questions about receivable collections and deferred revenue trends. The firm continues sizable pension obligations ($550 m) and reports emerging climate-disclosure requirements that may add compliance cost. Regulatory and litigation sections cite exposure to antitrust and cyber-security actions. Overall impact deemed neutral until revenue momentum and cash conversion improve.
Willis Towers Watson (WTW) ha registrato un secondo trimestre 2025 nettamente pi霉 redditizio nonostante una crescita dei ricavi stabile. Il fatturato 猫 stato di 2,26 miliardi di dollari, praticamente invariato rispetto all'anno precedente, ma un rigoroso controllo dei costi dopo il programma di trasformazione del 2024 ha portato a un aumento del reddito operativo del 73%, raggiungendo 368 milioni di dollari, con un margine operativo salito al 16,3% (rispetto al 9,4%). L'utile netto attribuibile a WTW 猫 pi霉 che raddoppiato, arrivando a 331 milioni di dollari, con un utile per azione diluito passato da 1,36 a 3,32 dollari. Nei primi sei mesi, l'utile per azione 猫 cresciuto del 76% a 5,64 dollari, mentre i ricavi sono scesi del 2,6% a 4,48 miliardi di dollari.
- Tendenze per segmento: I ricavi di Health, Wealth & Career sono diminuiti del 6% ma hanno mantenuto un margine operativo del 23,9%; Risk & Broking 猫 aumentato del 7,5% con margine salito al 21,2%.
- Bilancio: La liquidit脿 猫 aumentata a 1,96 miliardi di dollari; il debito a lungo termine 猫 stato ridotto del 10% a 4,76 miliardi, riducendo la leva finanziaria. AOCL 猫 migliorato di 452 milioni di dollari.
- Ritorni sul capitale: L'azienda ha riacquistato azioni per 700 milioni di dollari nel primo semestre, riducendo il numero di azioni a 97,9 milioni; i dividendi pagati sono stati pari a 179 milioni di dollari.
- Flussi di cassa: Il flusso di cassa operativo 猫 diminuito del 24% a 326 milioni di dollari; una dismissione da 836 milioni ha aumentato gli afflussi da investimenti, mentre i consistenti riacquisti hanno generato un deflusso finanziario di 800 milioni.
- Previsioni e prospettive: La direzione sottolinea una continua espansione del margine dopo la trasformazione, ma segnala rischi macroeconomici, di cambio e normativi nel documento 10-Q.
Willis Towers Watson (WTW) present贸 un segundo trimestre de 2025 notablemente m谩s rentable a pesar de un crecimiento estable en los ingresos. Los ingresos fueron de 2,26 mil millones de d贸lares, pr谩cticamente sin cambios interanuales, pero un control disciplinado de costos tras el programa de transformaci贸n de 2024 elev贸 el ingreso operativo un 73% hasta 368 millones de d贸lares y ampli贸 el margen operativo al 16,3% (frente al 9,4%). El ingreso neto atribuible a WTW se duplic贸 con creces hasta 331 millones de d贸lares, impulsando las ganancias diluidas por acci贸n a 3,32 d贸lares desde 1,36. En los primeros seis meses, las ganancias por acci贸n aumentaron un 76% hasta 5,64 d贸lares mientras que los ingresos cayeron un 2,6% hasta 4,48 mil millones de d贸lares.
- Tendencias por segmento: Los ingresos de Health, Wealth & Career cayeron un 6% pero mantuvieron un margen operativo del 23,9%; Risk & Broking subi贸 un 7,5% con un margen que aument贸 al 21,2%.
- Balance: El efectivo aument贸 a 1,96 mil millones de d贸lares; la deuda a largo plazo se redujo un 10% a 4,76 mil millones, disminuyendo el apalancamiento. AOCL mejor贸 en 452 millones de d贸lares.
- Retornos de capital: La compa帽铆a recompr贸 acciones por 700 millones de d贸lares en el primer semestre, reduciendo el n煤mero de acciones a 97,9 millones; los dividendos pagados totalizaron 179 millones de d贸lares.
- Flujo de caja: El flujo de caja operativo cay贸 un 24% a 326 millones de d贸lares; una desinversi贸n de 836 millones impuls贸 los ingresos por inversiones, mientras que las fuertes recompras generaron un flujo de salida financiera de 800 millones.
- Gu铆a y perspectivas: La direcci贸n destaca una continua expansi贸n de m谩rgenes tras la transformaci贸n, pero se帽ala riesgos macroecon贸micos, cambiarios y regulatorios en el formulario 10-Q.
Willis Towers Watson(WTW)電� 2025雲� 2攵勱赴鞐� 毵れ稖 靹膘灔 鞝曥泊鞐愲弰 攵堦惮頃橁碃 韥矊 頄レ儊霅� 靾橃澋靹膘潉 旮半頄堨姷雼堧嫟. 毵れ稖鞚� 22鞏� 6觳滊 雼煬搿� 鞝勲厔 雽�牍� 瓯办潣 氤�霃欖澊 鞐嗢棃鞙茧倶, 2024雲� 氤�順� 頂勲攴鸽灗 鞚错泟 鞐勱博頃� 牍勳毄 甏�毽 鞓侅梾鞚挫澋鞚� 73% 歃濌皜頃� 3鞏� 6,800毵� 雼煬毳� 旮半頄堦碃, 鞓侅梾鞚挫澋毳犾潃 9.4%鞐愳劀 16.3%搿� 頇曤寑霅橃棃鞀惦媹雼�. WTW 攴�靻� 靾滌澊鞚奠潃 3鞏� 3,100毵� 雼煬搿� 霊� 氚� 鞚挫儊 歃濌皜頄堨溂氅�, 頋劃 欤茧嫻靾滌澊鞚�(EPS)鞚� 1.36雼煬鞐愳劀 3.32雼煬搿� 靸侅姽頄堨姷雼堧嫟. 靸侂皹旮� EPS電� 76% 歃濌皜頃� 5.64雼煬毳� 旮半頄堨溂氅�, 毵れ稖鞚� 2.6% 臧愳唽頃� 44鞏� 8觳滊 雼煬鞓�鞀惦媹雼�.
- 攵�氍� 霃欗枼: Health, Wealth & Career 毵れ稖鞚� 6% 臧愳唽頄堨溂雮� 23.9%鞚� 鞓侅梾鞚挫澋毳犾潉 鞙犾頄堨溂氅�, Risk & Broking鞚� 7.5% 歃濌皜頃� 鞓侅梾鞚挫澋毳犾澊 21.2%搿� 靸侅姽頄堨姷雼堧嫟.
- 鞛 靸來儨: 順勱笀鞚� 19鞏� 6觳滊 雼煬搿� 歃濌皜頄堦碃, 鞛リ赴 攵�毂勲姅 10% 欷勳柎霌� 47鞏� 6觳滊 雼煬搿� 霠堧矂毽臧� 雮晞臁岇姷雼堧嫟. AOCL電� 4鞏� 5,200毵� 雼煬 臧滌劆霅橃棃鞀惦媹雼�.
- 鞛愲掣 頇橃洂: 須岇偓電� 靸侂皹旮办棎 7鞏� 雼煬 靸侂嫻鞚� 鞛愳偓欤茧ゼ 毵れ瀰頃� 欤检嫕 靾橂ゼ 9,790毵� 欤茧 欷勳榾鞙茧┌, 氚半嫻旮堨潃 齑� 1鞏� 7,900毵� 雼煬毳� 歆�旮夗枅鞀惦媹雼�.
- 順勱笀 頋愲: 鞓侅梾 順勱笀 頋愲鞚� 24% 臧愳唽頃� 3鞏� 2,600毵� 雼煬鞓�瓿�, 8鞏� 3,600毵� 雼煬 攴滊鞚� 鞛愳偘 毵り皝鞙茧 韴瀽 鞙犾瀰鞚� 歃濌皜頄堨溂氅�, 雽�攴滊 鞛愳偓欤� 毵れ瀰鞙茧 8鞏� 雼煬鞚� 鞛 鞙犾稖鞚� 氚滌儩頄堨姷雼堧嫟.
- 臧�鞚措摐霛检澑 氚� 鞝勲: 瓴届榿歆勳潃 氤�順� 鞚错泟 歆�靻嶌爜鞚� 毵堨 頇曤寑毳� 臧曥“頄堨溂雮�, 10-Q 氤搓碃靹滌棎靹� 瓯办嫓瓴届牅, 頇橃湪 氚� 攴滌牅 鞙勴棙鞚� 鞏戈笁頄堨姷雼堧嫟.
Willis Towers Watson (WTW) a enregistr茅 un deuxi猫me trimestre 2025 nettement plus rentable malgr茅 une croissance stable du chiffre d'affaires. Le revenu s'est 茅lev茅 脿 2,26 milliards de dollars, pratiquement inchang茅 en glissement annuel, mais un contr么le rigoureux des co没ts apr猫s le programme de transformation de 2024 a fait grimper le r茅sultat op茅rationnel de 73 % 脿 368 millions de dollars, avec une marge op茅rationnelle port茅e 脿 16,3 % (contre 9,4 %). Le r茅sultat net attribuable 脿 WTW a plus que doubl茅 pour atteindre 331 millions de dollars, faisant passer le BPA dilu茅 de 1,36 脿 3,32 dollars. Sur les six premiers mois, le BPA a augment茅 de 76 % 脿 5,64 dollars tandis que le chiffre d'affaires a recul茅 de 2,6 % 脿 4,48 milliards de dollars.
- Tendances par segment : Les revenus de Health, Wealth & Career ont diminu茅 de 6 % mais ont maintenu une marge op茅rationnelle de 23,9 % ; Risk & Broking a progress茅 de 7,5 % avec une marge port茅e 脿 21,2 %.
- Bilan : La tr茅sorerie a augment茅 脿 1,96 milliard de dollars ; la dette 脿 long terme a 茅t茅 r茅duite de 10 % 脿 4,76 milliards, diminuant l'effet de levier. L'AOCL s'est am茅lior茅 de 452 millions de dollars.
- Retour sur capital : La soci茅t茅 a rachet茅 pour 700 millions de dollars d'actions au premier semestre, r茅duisant le nombre d'actions 脿 97,9 millions ; les dividendes vers茅s ont totalis茅 179 millions de dollars.
- Flux de tr茅sorerie : Le flux de tr茅sorerie op茅rationnel a chut茅 de 24 % 脿 326 millions de dollars ; une cession de 836 millions a augment茅 les entr茅es li茅es aux investissements, tandis que d'importants rachats d'actions ont entra卯n茅 une sortie de financement de 800 millions.
- Pr茅visions et perspectives : La direction souligne une expansion continue des marges apr猫s la transformation, tout en notant les risques macro茅conomiques, de change et r茅glementaires dans le rapport 10-Q.
Willis Towers Watson (WTW) erzielte im zweiten Quartal 2025 trotz stagnierendem Umsatzwachstum deutlich h枚here Gewinne. Der Umsatz betrug 2,26 Mrd. USD und blieb damit im Jahresvergleich praktisch unver盲ndert. Durch disziplinierte Kostenkontrolle nach dem Transformationsprogramm 2024 stieg das operative Ergebnis um 73 % auf 368 Mio. USD, und die operative Marge erh枚hte sich auf 16,3 % (vorher 9,4 %). Der dem WTW zurechenbare Nettogewinn verdoppelte sich auf 331 Mio. USD, was das verw盲sserte Ergebnis je Aktie von 1,36 auf 3,32 USD ansteigen lie脽. F眉r die ersten sechs Monate stieg das Ergebnis je Aktie um 76 % auf 5,64 USD, w盲hrend der Umsatz um 2,6 % auf 4,48 Mrd. USD zur眉ckging.
- Segmenttrends: Die Ums盲tze im Bereich Health, Wealth & Career sanken um 6 %, behielten jedoch eine operative Marge von 23,9 %; Risk & Broking legte um 7,5 % zu, mit einer Marge von 21,2 %.
- Bilanz: Die liquiden Mittel stiegen auf 1,96 Mrd. USD; die langfristigen Schulden wurden um 10 % auf 4,76 Mrd. USD reduziert, was die Verschuldung senkte. AOCL verbesserte sich um 452 Mio. USD.
- 碍补辫颈迟补濒谤眉肠办蹿濒眉蝉蝉别: Das Unternehmen kaufte im ersten Halbjahr Aktien im Wert von 700 Mio. USD zur眉ck und verringerte die Anzahl der Aktien auf 97,9 Mio.; Dividendenzahlungen beliefen sich auf 179 Mio. USD.
- Cashflow: Der operative Cashflow sank um 24 % auf 326 Mio. USD; ein Verkaufserl枚s von 836 Mio. USD steigerte die Investitionseinnahmen, w盲hrend umfangreiche Aktienr眉ckk盲ufe einen Finanzierungsabfluss von 800 Mio. USD verursachten.
- Prognose und Ausblick: Das Management hebt die anhaltende Margenausweitung nach der Transformation hervor, weist jedoch im 10-Q-Bericht auf makro枚konomische, W盲hrungs- und regulatorische Risiken hin.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to ___________
Commission File Number:
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)
(Jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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( (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of ‘large accelerated filer’, ‘accelerated filer’, ‘smaller reporting company’, and ‘emerging growth company’ in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 30, 2025, there were outstanding
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
INDEX TO FORM 10-Q
For the Three and Six Months Ended June 30, 2025
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Page |
Certain Definitions |
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3 |
Disclaimer Regarding Forward-looking Statements |
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4 |
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PART I. FINANCIAL INFORMATION |
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7 |
Item 1. Financial Statements (Unaudited) |
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7 |
Condensed Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2025 and 2024 |
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7 |
Condensed Consolidated Balance Sheets - June 30, 2025 and December 31, 2024 |
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8 |
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2025 and 2024 |
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9 |
Condensed Consolidated Statements of Changes in Equity - Three and Six Months Ended June 30, 2025 and 2024 |
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10 |
Notes to the Condensed Consolidated Financial Statements |
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12 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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31 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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50 |
Item 4. Controls and Procedures |
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50 |
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PART II. OTHER INFORMATION |
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52 |
Item 1. Legal Proceedings |
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52 |
Item 1A. Risk Factors |
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52 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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52 |
Item 3. Defaults Upon Senior Securities |
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52 |
Item 4. Mine Safety Disclosures |
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52 |
Item 5. Other Information |
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52 |
Item 6. Exhibits |
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53 |
Signatures |
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54 |
2
Certain Definitions
The following definitions apply throughout this quarterly report unless the context requires otherwise:
‘We’, ‘Us’, ‘Company’, ‘Willis Towers Watson’, ‘Our’, ‘Willis Towers Watson plc’ or ‘WTW’ |
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Willis Towers Watson Public Limited Company, a company organized under the laws of Ireland, and its subsidiaries |
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‘shares’ |
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The ordinary shares of Willis Towers Watson Public Limited Company, nominal value $0.000304635 per share |
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‘TRANZACT’ |
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TZ Holdings, Inc. and its subsidiaries, doing business as TRANZACT. The Company sold TRANZACT on December 31, 2024. |
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‘U.S.’ |
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United States |
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‘U.K.’ |
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United Kingdom |
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‘E.U.’ |
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European Union or European Union 27 (the number of member countries following the United Kingdom’s exit) |
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‘U.S. GAAP’ |
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United States Generally Accepted Accounting Principles |
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‘FASB’ |
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Financial Accounting Standards Board |
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‘ASC’ |
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Accounting Standards Codification |
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‘ASU’ |
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Accounting Standards Update |
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‘SEC’ |
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United States Securities and Exchange Commission |
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‘EBITDA’ |
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Earnings before Interest, Taxes, Depreciation and Amortization |
3
Disclaimer Regarding Forward-looking Statements
We have included in this document ‘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; the potential impact of natural or man-made disasters like health pandemics and other world health crises; future capital expenditures; ongoing working capital efforts; future share repurchases; financial results (including our revenue, costs or margins) and the impact of changes to tax laws on our financial results; existing and evolving business strategies including those related to acquisitions and dispositions; demand for our services and competitive strengths; strategic goals; the benefits of new initiatives; 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; our ability to implement and realize anticipated benefits of any cost-savings initiatives generated from our completed multi-year operational transformation program or other expense savings initiatives; our recognition of future impairment charges; and plans and references to future performance, including our future financial and operating results, short-term and long-term financial goals, plans, objectives, expectations and intentions, including with respect to free cash flow generation, adjusted net revenue, adjusted operating margin and adjusted earnings per share, are all 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 the Company’s 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:
4
5
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 http://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 Quarterly Report on Form 10-Q, 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.
6
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Statements of Comprehensive Income
(In millions of U.S. dollars, except per share data)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Costs of providing services |
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Salaries and benefits |
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Other operating expenses |
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Depreciation |
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Amortization |
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Restructuring costs |
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Transaction and transformation |
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Total costs of providing services |
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Income from operations |
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Interest expense |
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( |
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Other income/(loss), net |
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( |
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INCOME FROM OPERATIONS BEFORE INCOME TAXES |
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Benefit from/(provision for) income taxes |
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( |
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( |
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( |
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INCOME FROM OPERATIONS BEFORE INTEREST IN |
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Interests in earnings of associates, net of tax |
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NET INCOME |
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Income attributable to non-controlling interests |
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NET INCOME ATTRIBUTABLE TO WTW |
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$ |
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$ |
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$ |
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$ |
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EARNINGS PER SHARE |
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Basic earnings per share |
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$ |
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$ |
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$ |
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$ |
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Diluted earnings per share |
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$ |
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$ |
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$ |
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$ |
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Comprehensive income before non-controlling interests |
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$ |
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$ |
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$ |
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$ |
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Comprehensive income attributable to non-controlling interests |
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( |
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( |
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( |
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( |
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Comprehensive income attributable to WTW |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to the condensed consolidated financial statements
7
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Balance Sheets
(In millions of U.S. dollars, except share data)
(Unaudited)
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June 30, |
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December 31, |
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ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Fiduciary assets |
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Accounts receivable, net |
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Prepaid and other current assets |
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Total current assets |
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Fixed assets, net |
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Goodwill |
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Other intangible assets, net |
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Right-of-use assets |
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Pension benefits assets |
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Other non-current assets |
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Total non-current assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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Fiduciary liabilities |
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$ |
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$ |
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Deferred revenue and accrued expenses |
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Current debt |
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Current lease liabilities |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Liability for pension benefits |
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Provision for liabilities |
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Long-term lease liabilities |
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Other non-current liabilities |
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Total non-current liabilities |
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TOTAL LIABILITIES |
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EQUITY (i) |
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Additional paid-in capital |
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(Accumulated deficit)/retained earnings |
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( |
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Accumulated other comprehensive loss, net of tax |
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( |
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( |
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Total WTW shareholders’ equity |
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Non-controlling interests |
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Total equity |
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TOTAL LIABILITIES AND EQUITY |
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$ |
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$ |
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See accompanying notes to the condensed consolidated financial statements
8
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Statements of Cash Flows
(In millions of U.S. dollars)
(Unaudited)
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Six Months Ended June 30, |
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2025 |
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2024 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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NET INCOME |
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$ |
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$ |
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Adjustments to reconcile net income to total net cash from operating activities: |
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Depreciation |
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Amortization |
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Non-cash restructuring charges |
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Non-cash lease expense |
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Net periodic cost/(benefit) of defined benefit pension plans |
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Provision for doubtful receivables from clients |
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Benefit from deferred income taxes |
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( |
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( |
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Share-based compensation |
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Gain on disposal of operations |
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( |
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Non-cash foreign exchange loss/(gain) |
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( |
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Other, net |
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Changes in operating assets and liabilities, net of effects from purchase of |
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Accounts receivable |
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Other assets |
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( |
) |
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( |
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Other liabilities |
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( |
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( |
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Provisions |
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Net cash from operating activities |
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CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES |
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Additions to fixed assets and software |
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( |
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( |
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Acquisitions of operations, net of cash acquired |
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( |
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( |
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Contributions to investments in associates |
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( |
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Net proceeds from sale of operations |
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Net purchases of held-to-maturity securities |
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( |
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Net purchases of available-for-sale securities |
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( |
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( |
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Net cash from/(used in) investing activities |
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( |
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CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES |
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Senior notes issued |
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Debt issuance costs |
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( |
) |
|
Repayments of debt |
|
|
( |
) |
|
|
( |
) |
Repurchase of shares |
|
|
( |
) |
|
|
( |
) |
Net proceeds from fiduciary funds held for clients |
|
|
|
|
|
|
||
Payments of deferred and contingent consideration related to acquisitions |
|
|
( |
) |
|
|
|
|
Cash paid for employee taxes on withholding shares |
|
|
( |
) |
|
|
( |
) |
Dividends paid |
|
|
( |
) |
|
|
( |
) |
Acquisitions of and dividends paid to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
Net cash (used in)/from financing activities |
|
|
( |
) |
|
|
|
|
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (i) |
|
|
|
|
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (i) |
|
|
|
|
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (i) |
|
$ |
|
|
$ |
|
||
See accompanying notes to the condensed consolidated financial statements
9
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Statements of Changes in Equity
(In millions of U.S. dollars and number of shares in thousands)
(Unaudited)
|
|
Six Months Ended June 30, 2025 |
|
|||||||||||||||||||||||||
|
|
Shares outstanding |
|
|
Additional paid-in capital |
|
|
Retained earnings/ |
|
|
AOCL (i) |
|
|
Total WTW shareholders’ equity |
|
|
Non-controlling interests |
|
|
Total equity |
|
|||||||
Balance as of December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Shares repurchased |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of shares under employee stock |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Share-based compensation and net settlements |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Foreign currency translation |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance as of March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Shares repurchased |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Dividends attributable to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of shares under employee stock |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Share-based compensation and net settlements |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Foreign currency translation |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance as of June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
10
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Statements of Changes in Equity
(In millions of U.S. dollars and number of shares in thousands)
(Unaudited)
|
|
Six Months Ended June 30, 2024 |
|
|||||||||||||||||||||||||
|
|
Shares outstanding |
|
|
Additional paid-in capital |
|
|
Retained earnings |
|
|
AOCL (i) |
|
|
Total WTW shareholders’ equity |
|
|
Non-controlling interests |
|
|
Total equity |
|
|||||||
Balance as of December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Shares repurchased |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Dividends attributable to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of shares under employee stock |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Share-based compensation and net settlements |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Additional non-controlling interests (ii) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Foreign currency translation |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance as of March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Shares repurchased |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Dividends attributable to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of shares under employee stock |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Share-based compensation and net settlements |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Foreign currency translation |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See accompanying notes to the condensed consolidated financial statements
11
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Notes to the Condensed Consolidated Financial Statements
(Tabular amounts in millions of U.S. dollars, except per share data)
(Unaudited)
Note 1 — Nature of Operations
Willis Towers Watson Public Limited Company is a leading global advisory, broking and solutions company that provides data-driven, insight-led solutions in the areas of people, risk and capital. The Company has approximately
We design and deliver solutions that manage risk, optimize benefits, cultivate talent and expand the power of capital to protect and strengthen institutions and individuals.
Our risk control services include strategic risk consulting (including providing actuarial analysis), a variety of due diligence services, the provision of practical on-site risk control services (such as health and safety or property loss control consulting), and analytical and advisory services (such as hazard modeling and climate risk quantification). We also assist our clients with managing incidents or crises when they occur. These services include contingency planning, security audits and product tampering plans.
We help our clients enhance their business performance by delivering consulting services, technology and solutions that help them anticipate, identify and capitalize on emerging opportunities in human capital management, as well as offer investment advice to help them develop disciplined and efficient strategies to meet their investment goals.
As an insurance broker, we act as an intermediary between our clients and insurance carriers by advising on their risk management requirements, helping them to determine the best means of managing risk and negotiating and placing insurance with insurance carriers through our global distribution network.
We operate a private Medicare marketplace in the U.S. through which, along with our active employee marketplace, we help our clients move to a more sustainable economic model by capping and controlling the costs associated with healthcare benefits.
We are not an insurance company, and therefore we do not underwrite insurable risks for our own account. We help sharpen strategies, enhance organizational resilience, motivate workforces and maximize performance to uncover opportunities for sustainable success.
Note 2 — Basis of Presentation and Recent Accounting Pronouncements
Basis of Presentation
The accompanying unaudited quarterly condensed consolidated financial statements of WTW and our subsidiaries are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore certain footnote disclosures have been condensed or omitted from these financial statements as they are not required for interim reporting under U.S. GAAP. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial statements and results for the interim periods. Certain prior-period amounts have been reclassified to conform to the current-period presentation. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements should be read together with the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2025, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov.
The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities. The results reflect certain estimates and assumptions made by management, including those estimates used in calculating acquisition consideration and fair value of tangible and intangible assets and acquisition-related liabilities, professional liability claims, estimated bonuses, valuation of billed and unbilled receivables, and anticipated tax liabilities that affect the amounts reported in the condensed consolidated financial statements and related notes.
Recent Accounting Pronouncements
Not Yet Adopted
In March 2024, the SEC adopted final rules on the enhancement and standardization of climate-related disclosures for investors (the ‘SEC Climate Rules’). The SEC Climate Rules would require disclosure of certain climate-related information, including in the notes to the Company’s financial statements, in registration statements and annual reports on Form 10-K. Following a number of legal
12
challenges, the SEC voluntarily stayed the SEC Climate Rules pending the completion of judicial review of such consolidated petitions to avoid regulatory uncertainty for companies subject to the SEC Climate Rules. Although the litigation remains pending, in March 2025, the SEC voted to end its defense of the SEC Climate Rules. The Company is monitoring the outcome of the litigation.
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expense, which is intended to provide transparency about the components of expenses included in the income statement. This ASU requires public companies to disclose additional information about certain expenses in the notes to the financial statements on a quarterly and annual basis, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. The ASU requires a new tabular disclosure format that centralizes expense information and additional qualitative disclosure. The guidance does not change the existing income statement presentation. The annual requirements for this ASU become effective with the Company's Annual Report on Form 10-K for the year ended December 31, 2027, and for its interim periods beginning on January 1, 2028. Early adoption is permitted. The guidance is to be applied prospectively, with the option for retrospective application. The Company currently does not plan to early-adopt this ASU and is assessing the expected impact on its condensed consolidated financial statements.
Adopted
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information within the income tax rate reconciliation and income taxes paid disclosures. It also includes certain other amendments intended to improve the effectiveness of income tax disclosures. Specifically, this ASU requires a tabular income tax rate reconciliation using both percentages and amounts disaggregated into specific categories with certain reconciling items at or above 5% of the statutory tax, further disaggregated by its nature and/or jurisdiction. Additionally, income taxes paid will be required to be presented by federal, state, local and foreign jurisdictions, including amounts paid to individual jurisdictions representing 5% or more of the total income taxes paid. This ASU became effective for the Company on January 1, 2025, at which time it was adopted. The Company will include the required disclosures within its Annual Report on Form 10-K for the year ended December 31, 2025.
Other Legislation
Pillar Two
On October 8, 2021, the Organisation for Economic Co-operation and Development (‘OECD’) announced an international agreement with more than
H.R. 1
On July 4, 2025, the ‘Act to provide for reconciliation pursuant to title II of H. Con. Res. 14’ (‘H.R. 1’) was enacted into law and generally becomes effective on January 1, 2026, with certain exceptions. H.R. 1 included numerous changes to existing tax law affecting businesses, including extending and modifying certain key provisions of the Tax Cuts and Jobs Act of 2017, both domestic and international, expanding certain Investment Retirement Account incentives while accelerating the phase-out of others. The Company will continue to evaluate the overall impact of H.R. 1 and related regulations on our operations and tax positions over the next twelve months and does not expect H.R. 1 to have a material impact on its financial results of operations.
Note 3 — Acquisitions and Divestitures
The Company completed acquisitions, including acquisitions of assets, and made contributions to interests in associates accounted for under the equity method of accounting, for combined cash payments of $
13
Note 4 — Revenue
Disaggregation of Revenue
The Company reports revenue by segment in Note 5 — Segment Information.
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Corporate (i) |
|
|
Total |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||
Broking |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Outsourced administration |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue by service offering |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reimbursable expenses and other (i) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue from customer contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Corporate (i) |
|
|
Total |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||
Broking |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Outsourced administration |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue by service offering |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reimbursable expenses and other (i) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue from customer contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Interest and other income is included in segment revenue and total revenue, however it has been presented separately in the above tables because it does not arise directly from contracts with customers. The significant components of interest and other income are as follows for the periods presented above:
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Corporate |
|
|
Total |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||
Book-of-business settlements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total interest and other income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Corporate |
|
|
Total |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||
Book-of-business settlements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total interest and other income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
14
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Corporate |
|
|
Total |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||
North America |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue by geography |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Corporate |
|
|
Total |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||
North America |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue by geography |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Contract Balances
The Company reports accounts receivable, net on the condensed consolidated balance sheets, which includes billed and unbilled receivables and current contract assets. In addition to accounts receivable, net, the Company had the following non-current contract assets and deferred revenue balances at June 30, 2025 and December 31, 2024:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Billed receivables, net of allowance for doubtful accounts of $ |
|
$ |
|
|
$ |
|
||
Unbilled receivables |
|
|
|
|
|
|
||
Current contract assets |
|
|
|
|
|
|
||
Accounts receivable, net |
|
$ |
|
|
$ |
|
||
Non-current accounts receivable, net |
|
$ |
|
|
$ |
|
||
Deferred revenue |
|
$ |
|
|
$ |
|
||
During the three and six months ended June 30, 2025, revenue of $
During the three and six months ended June 30, 2025, the Company recognized revenue of less than $
Performance Obligations
The Company has contracts for which performance obligations have not been satisfied as of June 30, 2025 or have been partially satisfied as of this date. The following table shows the expected timing for the satisfaction of the remaining performance obligations. This table does not include contract renewals or variable consideration, which was excluded from the transaction prices in accordance with the guidance on constraining estimates of variable consideration.
In addition, in accordance with ASC 606, Revenue From Contracts With Customers (‘ASC 606’), the Company has elected not to disclose the remaining performance obligations when one or both of the following circumstances apply:
|
|
Remainder of 2025 |
|
|
2026 |
|
|
2027 onward |
|
|
Total |
|
||||
Revenue expected to be recognized on contracts as of June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
15
Since most of the Company’s contracts are cancellable with less than one year’s notice and have no substantive penalty for cancellation, the majority of the Company’s remaining performance obligations as of June 30, 2025 have been excluded from the table above.
Note 5 — Segment Information
WTW has
WTW’s chief operating decision maker (‘CODM’) is its . We determined that the operational data used by the CODM is at the segment level. Management bases strategic goals and decisions for these segments on the data presented below which is used to assess the adequacy of strategic decisions and the methods of achieving these strategies and related financial results. Management evaluates the performance of its segments and allocates resources to them based on net segment operating income performance and prospects on a pre-tax basis.
Under the segment structure and for internal and segment reporting, WTW segment revenue includes commissions and fees, interest and other income. U.S. GAAP revenue also includes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursable expenses), which are not included in segment revenue. There is no significant segment revenue derived from transactions between the segments.
Following the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (‘ASC 2023-07’), the Company has not presented any individual significant expense categories due to the following factors:
Segment operating income excludes certain costs, including (i) amortization of intangibles; (ii) restructuring costs; (iii) certain transaction and transformation expenses; and (iv) 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 that we report for U.S. GAAP purposes. Although not reviewed individually by the CODM, amounts included in segment expenses may be determined on both a direct and allocated basis and are related to salaries and benefits, depreciation, corporate overhead charges and other operating expenses, including for occupancy, colleague travel costs, legal, marketing, technology, professional fees and professional liability costs.
The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities.
16
The following table presents segment revenue, segment expenses and segment operating income for our reportable segments for the three months ended June 30, 2025 and 2024.
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Total |
|
|||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||
Segment revenue excluding interest income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total segment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other segment expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total segment expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
The following table presents segment revenue, segment expenses and segment operating income for our reportable segments for the six months ended June 30, 2025 and 2024.
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
HWC |
|
|
R&B |
|
|
Total |
|
|||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||
Segment revenue excluding interest income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total segment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other segment expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total segment expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
17
The following table presents reconciliations of the information reported by segment to the Company’s condensed consolidated statements of comprehensive income amounts reported for the three and six months ended June 30, 2025 and 2024.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total segment revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reimbursable expenses and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total segment operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Restructuring costs (i) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Transaction and transformation (ii) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Unallocated, net (iii) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income/(loss), net |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Income from operations before income taxes and interest in earnings of associates |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company does not currently provide asset information by reportable segment as it does not routinely evaluate the total asset position by segment.
Below are our revenue (on the basis of where the work was performed) and tangible long-lived assets for Ireland, our country of domicile, countries with significant concentrations and all other foreign countries as of and for the periods ended as indicated:
|
|
Revenue |
|
|
Long-Lived Assets (i) |
|
||||||||||||||||||
|
|
Three months ended |
|
|
Six months ended |
|
|
June 30, |
|
|
December 31, |
|
||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||
Ireland |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United Kingdom |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rest of World |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Foreign Countries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
18
Note 6 — Restructuring Costs
The main categories of charges were in the following four areas:
Certain costs under the Transformation program were accounted for under ASC 420, Exit or Disposal Cost Obligation, and are included as restructuring costs in the condensed consolidated statements of comprehensive income. Restructuring costs were $
A rollforward of the liability associated with cash-based charges related to restructuring costs associated with the Transformation program, including costs paid and payable following the Transformation program’s conclusion on December 31, 2024, is as follows:
|
|
AG真人官方 estate rationalization |
|
|
Technology modernization |
|
|
Process optimization |
|
|
Other |
|
|
Total |
|
|||||
Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash payments |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Balance at June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Note 7 — Income Taxes
Benefit from income taxes for the three months ended June 30, 2025 was $
The Company recognizes deferred tax balances related to the undistributed earnings of subsidiaries when it expects that it will recover those undistributed earnings in a taxable manner, such as through receipt of dividends or sale of the investments. Historically, the Company has not provided taxes on cumulative earnings of its subsidiaries that have been reinvested indefinitely. As a result of its plans to restructure or distribute accumulated earnings of certain foreign operations, the Company has recorded an estimate of non-U.S. withholding and state income taxes. However, the Company asserts that the historical cumulative earnings of its other subsidiaries are reinvested indefinitely and therefore does not provide deferred tax liabilities on these amounts.
The Company records valuation allowances against net deferred tax assets based on whether it is more likely than not that the deferred tax assets will be realized. We have liabilities for uncertain tax positions under ASC 740, Income Taxes of $
19
Note 8 — Goodwill and Other Intangible Assets
The components of goodwill are outlined below for the six months ended June 30, 2025:
|
|
HWC |
|
|
R&B |
|
|
Total |
|
|||
Balance at December 31, 2024: |
|
|
|
|
|
|
|
|
|
|||
Goodwill, gross |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Accumulated impairment losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Goodwill, net - December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Goodwill acquired |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange |
|
|
|
|
|
|
|
|
|
|||
Balance at June 30, 2025: |
|
|
|
|
|
|
|
|
|
|||
Goodwill, gross |
|
|
|
|
|
|
|
|
|
|||
Accumulated impairment losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Goodwill, net - June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Other Intangible Assets
The following table reflects changes in the net carrying amounts of the components of finite-lived intangible assets for the six months ended June 30, 2025:
|
|
Client relationships |
|
|
Software |
|
|
Trademark and trade name |
|
|
Total |
|
||||
Balance at December 31, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Intangible assets, gross |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accumulated amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Intangible assets, net - December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Intangible assets acquired |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Foreign exchange |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at June 30, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Intangible assets, gross |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accumulated amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Intangible assets, net - June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The weighted-average remaining life of amortizable intangible assets at June 30, 2025 was
The table below reflects the future estimated amortization expense for amortizable intangible assets for the remainder of 2025 and for subsequent years:
|
|
Amortization |
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Note 9 — Derivative Financial Instruments
We are exposed to certain foreign currency risks. Where possible, we identify exposures in our business that can be offset internally. Where no natural offset is identified, we may choose to enter into various derivative transactions. These instruments have the effect of reducing our exposure to unfavorable changes in foreign currency rates. The Company’s board of directors reviews and approves policies for managing this risk as summarized below. Additional information regarding our derivative financial instruments can be found in Note 11 — Fair Value Measurements and Investments and Note 17 — Accumulated Other Comprehensive Loss.
20
Foreign Currency Risk
Certain non-U.S. subsidiaries receive revenue and incur expenses in currencies other than their functional currency, and as a result, the foreign subsidiary’s functional currency revenue and/or expenses will fluctuate as the currency rates change. Additionally, the forecast Pounds sterling expenses of our London brokerage market operations may exceed their Pounds sterling revenue, and the entity with such operations may also hold significant foreign currency asset or liability positions in the condensed consolidated balance sheets. To reduce such variability, we use foreign exchange contracts to hedge against this currency risk.
These derivatives were designated as hedging instruments and at June 30, 2025 and December 31, 2024 had total notional amounts of $
At June 30, 2025, the Company estimates, based on current exchange rates, there will be $
|
|
Gain recognized in OCI (effective element) |
|
|||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Forward exchange contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Location of (loss)/gain reclassified from Accumulated OCL into income (effective element) |
|
(Loss)/gain reclassified from Accumulated OCL into income (effective element) |
|
|||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Salaries and benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income/(loss), net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company engages in intercompany borrowing and lending between subsidiaries, primarily through its in-house banking operations which give rise to foreign exchange exposures. The Company mitigates these risks through the use of short-term foreign currency forward and swap transactions that offset the underlying exposure created when the borrower and lender have different functional currencies. These derivatives are not generally designated as hedging instruments, and at June 30, 2025 and December 31, 2024, we had notional amounts $
The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024 are as follows (see Note 16 — Other Income/(Loss), Net for the net foreign currency impact on the Company’s condensed consolidated statements of comprehensive income which includes the results of the offset of underlying exposures):
|
|
|
|
Gain/(loss) recognized in income |
|
|||||||||||||
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
Derivatives not designated as hedging instruments: |
|
Location of gain/(loss) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Forward exchange contracts |
|
Other income/(loss), net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
21
Note 10 — Debt
Current debt consists of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
$ |
|
|
$ |
|
|||
|
|
$ |
|
|
$ |
|
||
Long-term debt consists of the following:
|
|
June 30, |
|
|
December 31, |
|
||
Revolving $ |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
||
At June 30, 2025 and December 31, 2024, we were in compliance with all financial covenants.
Note 11 — Fair Value Measurements and Investments
The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, based on the reliability of the inputs used to determine fair value as follows:
The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:
22
The following tables present our assets and liabilities measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024:
|
|
|
|
Fair Value Measurements on a Recurring Basis at |
|
|||||||||||||
|
|
Balance Sheet Location |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds/exchange traded funds (i) |
|
Prepaid and other current assets and Other non-current assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Fiduciary assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commingled funds (i) (ii) |
|
Prepaid and other current assets and Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hedge funds (i) (iii) |
|
Prepaid and other current assets and Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments (iv) |
|
Prepaid and other current assets and Other non-current assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration (v) (vi) |
|
Other current liabilities and Other non-current liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments (iv) |
|
Other current liabilities and Other non-current liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
Fair Value Measurements on a Recurring Basis at |
|
|||||||||||||
|
|
Balance Sheet Location |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds/exchange traded funds (i) |
|
Prepaid and other current assets and Other non-current assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Fiduciary assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commingled funds (i) (ii) |
|
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hedge funds (i) (iii) |
|
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments (iv) |
|
Prepaid and other current assets and Other non-current assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration (v) |
|
Other current liabilities and Other non-current liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments (iv) |
|
Other current liabilities and Other non-current liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
23
The following table summarizes the change in fair value of the Level 3 liabilities:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |
|
June 30, 2025 |
|
|
Balance at December 31, 2024 |
|
$ |
|
|
Obligations assumed |
|
|
|
|
Payments |
|
|
( |
) |
(i) |
|
|
|
|
|
|
|
||
Balance at June 30, 2025 |
|
$ |
|
|
There were
Held-to-Maturity Securities
During the three months ended June 30, 2025, the Company invested $
Held-to-Maturity Securities |
|
Corporate securities |
|
|
Amortized cost basis |
|
$ |
|
|
Allowance for credit losses |
|
|
|
|
Net carrying amount |
|
|
|
|
Gross unrealized gains |
|
|
|
|
Gross unrealized losses |
|
|
|
|
Aggregate fair value |
|
$ |
|
|
Non-recurring Fair Value Measurement
The Company has assets that may be required to be recorded at fair value on a non-recurring basis. These assets are evaluated when certain triggering events occur (including the planned disposal of a business or a decrease in estimated future cash flows) that indicate their carrying amounts may not be recoverable.
Fair Value Information about Financial Instruments Not Measured at Fair Value
The following tables present our assets and liabilities not measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Carrying Value |
|
|
Fair Value |
|
|
Carrying Value |
|
|
Fair Value |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Note receivable (i) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Held-to-maturity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Due in one year or less |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Due in one year through five years |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Due in greater than five years |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Long-term debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The carrying value of our revolving credit facility approximates its fair value. The fair values above, which exclude accrued interest, are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or ability to dispose of the financial instruments. The fair values of our held-to-maturity securities are considered Level 1 financial instruments because they are based on quoted market prices in active markets. The fair values of our respective senior notes and short-term note receivable are considered Level 2 financial instruments as they are corroborated by observable market data.
24
Note 12 — Retirement Benefits
Defined Benefit Plans
WTW sponsors both qualified and non-qualified defined benefit pension plans throughout the world. The majority of our plan assets and obligations are in the U.S. and the U.K. We have also included disclosures related to defined benefit plans in certain other countries, including Canada, France, Germany, Switzerland and Ireland. Together, these disclosed funded and unfunded plans represent
Components of Net Periodic Benefit (Income)/Cost for Defined Benefit Pension Plans
The following tables set forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension plans for the three and six months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
U.S. |
|
|
U.K. |
|
|
Other |
|
|
U.S. |
|
|
U.K. |
|
|
Other |
|
||||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amortization of net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of prior service credit |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Net periodic benefit cost/(income) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
U.S. |
|
|
U.K. |
|
|
Other |
|
|
U.S. |
|
|
U.K. |
|
|
Other |
|
||||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of prior service credit |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Net periodic benefit (income)/cost |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
Employer Contributions to Defined Benefit Pension Plans
The Company did
Annuity Purchase
In February 2025, the Company’s Willis Towers Watson Pension Plan for U.S. Employees, a qualified pension plan (‘the Plan’), purchased a nonparticipating single premium group annuity contract from a third-party insurance company and irrevocably transferred to that insurance company approximately $
Defined Contribution Plans
The Company had defined contribution plan expense of $
25
Note 13 — Leases
The following tables present lease costs recorded on our condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of right-of-use assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Operating lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sublease income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total lease cost, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 14 — Commitments and Contingencies
Indemnification Agreements
WTW has various agreements with third parties pursuant to which it may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business and in connection with the purchase and sale of certain businesses, including the completed sale of the TRANZACT business. It is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements because of the conditional nature of the Company’s obligations, the limited history of prior indemnification claims, and the unique facts of each particular agreement and each indemnification provision therein (even where such indemnification provisions are subject to a maximum liability limit). As of June 30, 2025, we have not incurred a material loss with respect to the indemnification of such third parties. In addition, as of June 30, 2025, we do not believe that any potential liability that may arise from such indemnity obligations is probable or will be material.
Legal Proceedings
In the ordinary course of business, the Company is subject to various actual and potential claims, lawsuits and other proceedings. Some of the claims, lawsuits and other proceedings seek damages in amounts which could, if assessed, be significant. The Company also receives subpoenas in the ordinary course of business and, from time to time, receives requests for information in connection with governmental investigations.
Errors and omissions claims, lawsuits and other proceedings arising in the ordinary course of business are covered in part by professional indemnity or other appropriate insurance. The terms of this insurance vary by policy year. Regarding self-insured risks, the Company has established provisions which are believed to be adequate in light of current information and legal advice, or, in certain cases, where a range of loss exists, the Company accrues the minimum amount in the range if no amount within the range is a better estimate than any other amount. The Company adjusts such provisions from time to time according to developments. See Note 15 — Supplementary Information for Certain Balance Sheet Accounts for the amounts accrued at June 30, 2025 and December 31, 2024 in the condensed consolidated balance sheets.
On the basis of current information, the Company does not expect that the actual claims, lawsuits and other proceedings to which it is subject, or potential claims, lawsuits and other proceedings relating to matters of which it is aware, will ultimately have a material adverse effect on its financial condition, results of operations or liquidity. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation and disputes with insurance companies, it is possible that an adverse outcome or settlement in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in a particular quarterly or annual period.
The Company provides for contingent liabilities based on ASC 450, Contingencies, when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. The contingent liabilities recorded are primarily developed actuarially. Litigation
26
is subject to many factors which are difficult to predict so there can be no assurance that in the event of a material unfavorable result in one or more claims, we will not incur material costs.
Note 15 — Supplementary Information for Certain Balance Sheet Accounts
Additional details of specific balance sheet accounts are detailed below.
Prepaid and other current assets consist of the following:
|
|
June 30, |
|
|
December 31, |
|
||
Prepayments and accrued income |
|
$ |
|
|
$ |
|
||
Deferred contract costs |
|
|
|
|
|
|
||
Derivatives and investments |
|
|
|
|
|
|
||
Deferred compensation plan costs |
|
|
|
|
|
|
||
Corporate income and other taxes |
|
|
|
|
|
|
||
Interest receivable |
|
|
|
|
|
|
||
Earnout receivable |
|
|
|
|
|
|
||
Short-term note receivable |
|
|
|
|
|
|
||
Held-to-maturity securities |
|
|
|
|
|
|
||
Available-for-sale securities |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Total prepaid and other current assets |
|
$ |
|
|
$ |
|
||
Other non-current assets consist of the following:
|
|
June 30, |
|
|
December 31, |
|
||
Prepayments and accrued income |
|
$ |
|
|
$ |
|
||
Deferred contract costs |
|
|
|
|
|
|
||
Deferred compensation plan assets |
|
|
|
|
|
|
||
Deferred tax assets |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Investment in associates |
|
|
|
|
|
|
||
Other investments |
|
|
|
|
|
|
||
Held-to-maturity securities |
|
|
|
|
|
|
||
Insurance recovery receivables |
|
|
|
|
|
|
||
Other non-current assets |
|
|
|
|
|
|
||
Total other non-current assets |
|
$ |
|
|
$ |
|
||
Deferred revenue and accrued expenses consist of the following:
|
|
June 30, |
|
|
December 31, |
|
||
Accounts payable, accrued liabilities and deferred revenue |
|
$ |
|
|
$ |
|
||
Accrued discretionary and incentive compensation |
|
|
|
|
|
|
||
Accrued vacation |
|
|
|
|
|
|
||
Accrued 401(k) contributions |
|
|
|
|
|
|
||
Other employee-related liabilities |
|
|
|
|
|
|
||
Total deferred revenue and accrued expenses |
|
$ |
|
|
$ |
|
||
Provision for liabilities consists of the following:
|
|
June 30, |
|
|
December 31, |
|
||
Claims, lawsuits and other proceedings |
|
$ |
|
|
$ |
|
||
Other provisions |
|
|
|
|
|
|
||
Total provision for liabilities |
|
$ |
|
|
$ |
|
||
27
Other non-current liabilities consist of the following:
|
|
June 30, |
|
|
December 31, |
|
||
Deferred and long-term compensation plan liabilities |
|
$ |
|
|
$ |
|
||
Contingent and deferred consideration on acquisitions |
|
|
|
|
|
|
||
Liabilities for uncertain tax positions |
|
|
|
|
|
|
||
Deferred tax liabilities |
|
|
|
|
|
|
||
Finance leases |
|
|
|
|
|
|
||
Other non-current liabilities |
|
|
|
|
|
|
||
Total other non-current liabilities |
|
$ |
|
|
$ |
|
||
Note 16 — Other Income/(Loss), Net
Other income/(loss), net consists of the following:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Gain on disposal of operations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net periodic pension and postretirement benefit credits/(costs) (i) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Foreign exchange (loss)/gain (ii) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income/(loss), net |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
28
Note 17 — Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss, net of non-controlling interests, and net of tax are provided in the following table for the three and six months ended June 30, 2025 and 2024. This table excludes amounts attributable to non-controlling interests, which are not material for further disclosure.
|
|
Foreign currency |
|
|
Derivative |
|
|
Defined pension and |
|
|
Total |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||
Quarter-to-date activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at March 31, 2025 and 2024, respectively |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
Other comprehensive income/(loss) before |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||||
(Gain)/loss reclassified from accumulated other |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net current-period other comprehensive income/(loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
Balance at June 30, 2025 and 2024, respectively |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year-to-date activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2024 and 2023, respectively |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
Other comprehensive income/(loss) before |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
(Gain)/loss reclassified from accumulated other |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net current-period other comprehensive income/(loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
Balance at June 30, 2025 and 2024, respectively |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
Note 18 — Earnings Per Share
Basic and diluted earnings per share are calculated by dividing net income attributable to WTW by the average number of ordinary shares outstanding during each period. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or converted into shares or resulted in the issuance of shares that then shared in the net income of the Company.
At June 30, 2025 and 2024, there were
Basic and diluted earnings per share are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income attributable to WTW |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic average number of shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of potentially issuable shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted average number of shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Dilutive effect of potentially issuable shares |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Diluted earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
For the three and six months ended June 30, 2025 and 2024,
29
Note 19 — Supplemental Disclosures of Cash Flow Information
Supplemental disclosures regarding cash flow information are as follows:
|
|
Six months ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Fiduciary funds (included in fiduciary assets) |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Decrease in cash, cash equivalents and other restricted cash |
|
$ |
( |
) |
|
$ |
( |
) |
Increase in fiduciary funds |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
30
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion includes forward-looking statements. See ‘Disclaimer Regarding Forward-looking Statements’ for certain cautionary information regarding forward-looking statements and a list of factors that could cause actual results to differ materially from those predicted in those statements.
This discussion includes references to non-GAAP financial measures as defined in the rules of the SEC. We present such non-GAAP financial measures, specifically, adjusted, constant currency and organic non-GAAP financial measures, as we believe such information is of interest to the investment community because it provides additional meaningful methods of evaluating certain aspects of the Company’s operating performance from period to period on a basis that may not be otherwise apparent under U.S. GAAP, and these provide a measure against which our businesses may be assessed in the future.
See ‘Non-GAAP Financial Measures’ below for further discussion of our adjusted, constant currency and organic non-GAAP financial measures.
Executive Overview
Market Conditions
Typically, our business benefits from regulatory change, political risk or economic uncertainty. Insurance broking generally tracks the economy, but demand for both insurance broking and consulting services usually remains steady during times of uncertainty. We have some businesses, such as our health and benefits and administration businesses, which can be counter cyclical during the early period of a significant economic change.
Within our insurance and brokerage business, due to the cyclical nature of the insurance market and the impact of other market conditions on insurance premiums, commission revenue may vary widely between accounting periods. A period of low or declining premium rates, generally known as a ‘soft’ or ‘softening’ market, generally leads to downward pressure on commission revenue and can have a material adverse impact on our revenue and operating margin. A ‘hard’ or ‘firming’ market, during which premium rates rise, generally has a favorable impact on our revenue and operating margin. Rates, however, vary by geography, industry and client segment. As a result, and due to the global and diverse nature of our business, we view rates in the aggregate. Overall, we are currently seeing a softening market.
Market conditions in the broking industry in which we operate are generally defined by factors such as the strength of the economies in the various geographic regions in which we serve around the world, insurance rate movements, and insurance and reinsurance buying patterns of our clients.
The markets for our consulting, technology and solutions, and marketplace services are affected by economic, regulatory and legislative changes, technological developments, and increased competition from established and new competitors. We believe that the primary factors in selecting a human resources or risk management consulting company include reputation, the ability to provide measurable increases to shareholder value and return on investment, global scale, quality of service and the ability to tailor services to clients’ unique needs. In that regard, we are focused on developing and implementing technology, data and analytic solutions for both internal operations and for maintaining industry standards and meeting client preferences. We have made such investments from time to time and may decide, based on perceived business needs, to make investments in the future that may be different from past practice or what we currently anticipate.
With regard to the market for exchanges, we believe that clients base their decisions on a variety of factors that include the ability of the provider to deliver measurable cost savings for clients, a strong reputation for efficient execution and an innovative service delivery model and platform. Part of the employer-sponsored insurance market has matured and become more fragmented while other segments remain in the entry phase. As these market segments continue to evolve, we may experience growth in intervals, with periods of accelerated expansion balanced by periods of modest growth. In recent years, growth in the market for exchanges has slowed, and this trend may continue.
Risks and Uncertainties of the Economic Environment
U.S. and global markets are continuing to experience uncertainty, volatility and disruption as a result of uncertain macroeconomic conditions including tariff actions and uncertainties relating to global trade, fluctuations in currency exchange rates, volatility in debt and equity markets, uncertainty around interest rates, softening consumer confidence and labor markets, the implementation of a broad range of U.S. policy changes, and the ongoing Russia-Ukraine and Middle East conflicts, among other geopolitical tensions. Although the length and impact of these situations are highly unpredictable, the ongoing uncertainty and volatility of the global economy and capital markets, which has resulted in persistent inflation and fluctuating interest rates in many of the markets in which we operate, could accelerate recessionary pressures and continue to lead to further market disruptions. Further, in addition to the direct impact of
31
the dynamic tariff environment on our business (which we do not expect to be significant, so long as retaliatory actions do not extend to services), recent U.S. legislation creates additional uncertainty, in particular the ‘Act to provide for reconciliation pursuant to title II of H. Con. Res. 14,’ the direct and indirect effects of which are difficult to predict at this time, but are generally expected to include accounting and tax impacts. Other indirect impacts from changes in tariffs or from legislative or regulatory developments, such as changes in consumer sentiment, trade relations, economic activity, willingness to do business with U.S.-listed firms, inflationary pressures and employee distraction, could negatively affect our business, operations and financial condition.
These general economic conditions, including inflation, stagflation, political volatility, costs of labor, cost of capital, interest rates, bank stability, credit availability and tax rates, affect not only the cost of and access to liquidity, but also our costs to run and invest in our business, including our operating and general and administrative expenses, and we have no control or limited ability to control such factors. These general economic conditions impact revenue from customers, as well as income from funds we hold on behalf of customers and pension-related income. While parts of our business could benefit from uncertainty or regulatory change, we may see increased caution in spending on services we provide that are more discretionary in nature or where there are alternatives, such as self-insurance. Other parts of our business, such as M&A-related services, may be adversely impacted when there is lower economic activity or transaction volumes.
If our costs grow significantly in excess of our ability to raise revenue, whether as a result of the foregoing global economic factors or otherwise, our margins and results of operations may be materially and adversely impacted and we may not be able to achieve our strategic and financial objectives.
See Part I, Item 1A ‘Risk Factors’ in our Annual Report on Form 10-K, filed with the SEC on February 25, 2025, for a discussion of risks that may affect, among other things, our growth relative to expectation and our ability to achieve our objectives.
Financial Statement Overview
The table below sets forth our summarized condensed consolidated statements of comprehensive income and data as a percentage of revenue for the periods indicated.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||||
|
|
($ in millions, except per share data) |
|
|||||||||||||||||||||||||||||
Revenue |
|
$ |
2,261 |
|
|
|
100 |
% |
|
$ |
2,265 |
|
|
|
100 |
% |
|
$ |
4,484 |
|
|
|
100 |
% |
|
$ |
4,606 |
|
|
|
100 |
% |
Costs of providing services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Salaries and benefits |
|
|
1,449 |
|
|
|
64 |
% |
|
|
1,397 |
|
|
|
62 |
% |
|
|
2,773 |
|
|
|
62 |
% |
|
|
2,739 |
|
|
|
59 |
% |
Other operating expenses |
|
|
336 |
|
|
|
15 |
% |
|
|
439 |
|
|
|
19 |
% |
|
|
701 |
|
|
|
16 |
% |
|
|
896 |
|
|
|
19 |
% |
Depreciation |
|
|
57 |
|
|
|
3 |
% |
|
|
57 |
|
|
|
3 |
% |
|
|
111 |
|
|
|
2 |
% |
|
|
116 |
|
|
|
3 |
% |
Amortization |
|
|
49 |
|
|
|
2 |
% |
|
|
60 |
|
|
|
3 |
% |
|
|
97 |
|
|
|
2 |
% |
|
|
120 |
|
|
|
3 |
% |
Restructuring costs |
|
|
— |
|
|
|
— |
% |
|
|
3 |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
21 |
|
|
|
— |
% |
Transaction and transformation |
|
|
2 |
|
|
|
— |
% |
|
|
97 |
|
|
|
4 |
% |
|
|
2 |
|
|
|
— |
% |
|
|
222 |
|
|
|
5 |
% |
Total costs of providing services |
|
|
1,893 |
|
|
|
|
|
|
2,053 |
|
|
|
|
|
|
3,684 |
|
|
|
|
|
|
4,114 |
|
|
|
|
||||
Income from operations |
|
|
368 |
|
|
|
16 |
% |
|
|
212 |
|
|
|
9 |
% |
|
|
800 |
|
|
|
18 |
% |
|
|
492 |
|
|
|
11 |
% |
Interest expense |
|
|
(64 |
) |
|
|
(3 |
)% |
|
|
(68 |
) |
|
|
(3 |
)% |
|
|
(129 |
) |
|
|
(3 |
)% |
|
|
(132 |
) |
|
|
(3 |
)% |
Other income/(loss), net |
|
|
9 |
|
|
|
— |
% |
|
|
23 |
|
|
|
1 |
% |
|
|
(55 |
) |
|
|
(1 |
)% |
|
|
49 |
|
|
|
1 |
% |
INCOME FROM OPERATIONS BEFORE INCOME |
|
|
313 |
|
|
|
14 |
% |
|
|
167 |
|
|
|
7 |
% |
|
|
616 |
|
|
|
14 |
% |
|
|
409 |
|
|
|
9 |
% |
Benefit from/(provision for) income taxes |
|
|
21 |
|
|
|
1 |
% |
|
|
(26 |
) |
|
|
(1 |
)% |
|
|
(44 |
) |
|
|
(1 |
)% |
|
|
(74 |
) |
|
|
(2 |
)% |
Interest in earnings of associates, net of tax |
|
|
(2 |
) |
|
|
— |
% |
|
|
1 |
|
|
|
— |
% |
|
|
(1 |
) |
|
|
— |
% |
|
|
1 |
|
|
|
— |
% |
Income attributable to non-controlling interests |
|
|
(1 |
) |
|
|
— |
% |
|
|
(1 |
) |
|
|
— |
% |
|
|
(5 |
) |
|
|
— |
% |
|
|
(5 |
) |
|
|
— |
% |
NET INCOME ATTRIBUTABLE TO WTW |
|
$ |
331 |
|
|
|
15 |
% |
|
$ |
141 |
|
|
|
6 |
% |
|
$ |
566 |
|
|
|
13 |
% |
|
$ |
331 |
|
|
|
7 |
% |
Diluted earnings per share |
|
$ |
3.32 |
|
|
|
|
|
$ |
1.36 |
|
|
|
|
|
$ |
5.64 |
|
|
|
|
|
$ |
3.20 |
|
|
|
|
||||
32
Consolidated Revenue
Revenue for both the three months ended June 30, 2025 and 2024 was $2.3 billion, a decrease of $4 million on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 5% for the three months ended June 30, 2025. Revenue for the six months ended June 30, 2025 was $4.5 billion, compared to $4.6 billion for the six months ended June 30, 2024, a decrease of $122 million, or 3%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 5% for the six months ended June 30, 2025.The decreases in as-reported revenue were due primarily to the sale of our TRANZACT business on December 31, 2024. The increase in organic revenue was driven by strong performances in both segments. For additional information, please see the section entitled ‘Segment Revenue and Segment Operating Income’ elsewhere within this Item 2 of this Quarterly Report on Form 10-Q.
Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the three months ended June 30, 2025, currency translation increased our consolidated revenue by $30 million. The primary currencies driving this change were the Pound Sterling and Euro. For the six months ended June 30, 2025, currency translation decreased our consolidated revenue by $6 million. The primary currency driving this change was the Mexican Peso.
The following table details our top five markets based on the percentage of consolidated revenue (in U.S. dollars) from the countries where work was performed for the six months ended June 30, 2025. These figures do not represent the currency of the related revenue, which is presented in the next table.
Geographic Region |
|
% of Revenue |
|
|
United States |
|
|
44 |
% |
United Kingdom |
|
|
21 |
% |
France |
|
|
6 |
% |
Germany |
|
|
3 |
% |
Canada |
|
|
2 |
% |
The table below details the approximate percentage of our revenue and expenses by transactional currency for the six months ended June 30, 2025.
Transactional Currency |
|
Revenue |
|
|
Expenses (i) |
|
||
U.S. dollars |
|
|
52 |
% |
|
|
47 |
% |
Pounds sterling |
|
|
13 |
% |
|
|
20 |
% |
Euro |
|
|
18 |
% |
|
|
14 |
% |
Other currencies |
|
|
17 |
% |
|
|
19 |
% |
The following tables set forth the total revenue for the three and six months ended June 30, 2025 and 2024, and the components of the change in total revenue for the three and six months ended June 30, 2025, as compared to the prior-year periods. The components of the revenue change may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Three Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change (i) |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
2,261 |
|
|
$ |
2,265 |
|
|
—% |
|
1% |
|
(1)% |
|
(6)% |
|
5% |
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Six Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change (i) |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
4,484 |
|
|
$ |
4,606 |
|
|
(3)% |
|
—% |
|
(3)% |
|
(7)% |
|
5% |
Definitions of Constant Currency Change and Organic Change are included under the section entitled ‘Non-GAAP Financial Measures’ elsewhere within Item 2 of this Form 10-Q.
33
Segment Revenue and Segment Operating Income
The segment descriptions below should be read in conjunction with the full descriptions of our businesses contained in Part I, Item 1. ‘Business’, within our Annual Report on Form 10-K, filed with the SEC on February 25, 2025.
Segment revenue excludes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursed expenses); however, these amounts are included in consolidated revenue, as required by applicable accounting standards and SEC rules. Segment operating income excludes certain costs, including (i) amortization of intangibles; (ii) restructuring costs; and (iii) certain transaction and transformation expenses, and includes certain expense amounts which may be determined on both a direct and allocated basis. See Note 5 – Segment Information within Part I, Item 1 ‘Financial Statements’ of this Quarterly Report on Form 10-Q for more information about how our segment revenue and segment operating income are calculated and for a reconciliation to our GAAP results.
The Company experiences seasonal fluctuations in its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities.
For each table presented below, the components of the revenue change may not add due to rounding.
Health, Wealth & Career
The Health, Wealth & Career (‘HWC’) segment provides an array of advice, broking, solutions and technology for employee benefit plans, institutional investors, compensation and career programs, and the employee experience overall. Our portfolio of services supports the interrelated challenges that the management teams of our clients face across human resources and finance.
HWC is the larger of the two segments of the Company. Addressing four key areas, Health, Wealth, Career and Benefits Delivery & Outsourcing, the segment is focused on addressing our clients’ people and risk needs to help them succeed in a global marketplace.
The following table sets forth HWC revenue for the three months ended June 30, 2025 and 2024, and the components of the change in revenue for the three months ended June 30, 2025 from the three months ended June 30, 2024.
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Three Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment revenue excluding interest income |
|
$ |
1,173 |
|
|
$ |
1,251 |
|
|
(6)% |
|
1% |
|
(7)% |
|
(12)% |
|
4% |
Interest income |
|
|
7 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue |
|
$ |
1,180 |
|
|
$ |
1,260 |
|
|
(6)% |
|
1% |
|
(8)% |
|
(12)% |
|
4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Segment operating income |
|
$ |
280 |
|
|
$ |
276 |
|
|
|
|
|
|
|
|
|
|
|
HWC segment revenue for the three months ended June 30, 2025 and 2024 was $1.2 billion and $1.3 billion, respectively. Health delivered organic revenue growth driven by double-digit increases outside North America and solid performance in North America. Wealth generated organic revenue growth from higher levels of Retirement work globally alongside growth in our Investments business from new business wins and product launches. Career had modest revenue growth as healthy demand for advisory project work outside North America was offset by North America client postponement decisions made earlier in the year. Benefits Delivery & Outsourcing revenue was materially flat, as increased project and core administration work within Europe was tempered by lower commission revenue in the Individual Marketplace business compared to the prior year.
HWC segment operating income for the three months ended June 30, 2025 and 2024 was $280 million and $276 million, respectively. HWC segment operating income increased primarily from operating efficiencies, which were partially offset by the prior-year sale of TRANZACT.
34
The following table sets forth HWC segment revenue for the six months ended June 30, 2025 and 2024 and the components of the change in revenue for the six months ended June 30, 2025 from the six months ended June 30, 2024.
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Six Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment revenue excluding interest income |
|
$ |
2,331 |
|
|
$ |
2,578 |
|
|
(10)% |
|
—% |
|
(10)% |
|
(13)% |
|
3% |
Interest income |
|
|
14 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue |
|
$ |
2,345 |
|
|
$ |
2,596 |
|
|
(10)% |
|
—% |
|
(10)% |
|
(13)% |
|
3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Segment operating income |
|
$ |
591 |
|
|
$ |
612 |
|
|
|
|
|
|
|
|
|
|
|
HWC segment revenue for the six months ended June 30, 2025 and 2024 was $2.3 billion and $2.6 billion, respectively. Health delivered organic revenue growth in all regions, led by double-digit increases across International which benefited from strong new business and geographic expansion coupled with the ongoing appeal of our Global Benefits Management solution. Wealth generated organic revenue growth from higher levels of Retirement work in Europe and International, alongside growth in our Investments business from new products and client wins. Career had modest revenue growth as increased advisory work outside of North America was tempered by some postponements amid economic uncertainty. Benefits Delivery & Outsourcing revenue was materially flat, as increased project and core administration work in Europe was offset by lower revenue in North America.
HWC segment operating income for the six months ended June 30, 2025 and 2024 was $591 million and $612 million, respectively. HWC segment operating income decreased primarily due to the prior-year sale of TRANZACT, partially offset by increases attributable to operating efficiencies.
Risk & Broking
The Risk & Broking (‘R&B’) segment provides a broad range of risk advice, insurance brokerage and consulting services to clients worldwide ranging from small businesses to multinational corporations. The segment comprises two primary businesses - Corporate Risk & Broking and Insurance Consulting and Technology.
The following table sets forth R&B revenue for the three months ended June 30, 2025 and 2024, and the components of the change in revenue for the three months ended June 30, 2025 from the three months ended June 30, 2024.
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Three Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment revenue excluding interest income |
|
$ |
1,024 |
|
|
$ |
950 |
|
|
8% |
|
1% |
|
6% |
|
—% |
|
6% |
Interest income |
|
|
23 |
|
|
|
29 |
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue |
|
$ |
1,047 |
|
|
$ |
979 |
|
|
7% |
|
1% |
|
6% |
|
—% |
|
6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Segment operating income |
|
$ |
222 |
|
|
$ |
202 |
|
|
|
|
|
|
|
|
|
|
|
R&B segment revenue for the three months ended June 30, 2025 and 2024 was $1.0 billion and $979 million, respectively. Corporate Risk & Broking had organic revenue growth driven by higher levels of new business activity and strong client retention globally. Insurance Consulting and Technology revenue was flat for the quarter as clients managed spend more cautiously amid ongoing economic uncertainty.
R&B segment operating income for the three months ended June 30, 2025 and 2024 was $222 million and $202 million, respectively. R&B segment operating income increased due primarily to operating leverage driven by strong organic revenue growth and Transformation program savings, which were partially offset by headwinds from decreased interest income and foreign currency fluctuations.
35
The following table sets forth R&B segment revenue for the six months ended June 30, 2025 and 2024 and the components of the change in revenue for the six months ended June 30, 2025 from the six months ended June 30, 2024.
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Six Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment revenue excluding interest income |
|
$ |
2,029 |
|
|
$ |
1,900 |
|
|
7% |
|
—% |
|
7% |
|
—% |
|
7% |
Interest income |
|
|
45 |
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue |
|
$ |
2,074 |
|
|
$ |
1,957 |
|
|
6% |
|
—% |
|
6% |
|
—% |
|
6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Segment operating income |
|
$ |
448 |
|
|
$ |
405 |
|
|
|
|
|
|
|
|
|
|
|
R&B segment revenue for the six months ended June 30, 2025 and 2024 was $2.1 billion and $2.0 billion, respectively. Corporate Risk & Broking had organic revenue growth primarily driven by the success of our global lines, with higher levels of new business activity and strong client retention across all regions. Insurance Consulting and Technology had organic revenue growth driven by the Consulting and Technology practices.
R&B segment operating income for the six months ended June 30, 2025 and 2024 was $448 million and $405 million, respectively. R&B segment operating income increased due primarily to operating leverage driven by strong organic revenue growth and transformation savings which were partially offset by headwinds from decreased interest income and foreign currency fluctuations.
Costs of Providing Services
Total costs of providing services for the three months ended June 30, 2025 were $1.9 billion, compared to $2.1 billion for the three months ended June 30, 2024, a decrease of $160 million, or 8%. Total costs of providing services for the six months ended June 30, 2025 were $3.7 billion, compared to $4.1 billion for the six months ended June 30, 2024, a decrease of $430 million, or 10%. See the following discussion for further details.
Salaries and Benefits
Salaries and benefits for both the three months ended June 30, 2025 and 2024 were $1.4 billion, an increase of $52 million or 4%. The increase in the current year is primarily due to higher salary expense, driven by increased colleague headcount and cost-of-living compensation adjustments, and higher benefit and share-based compensation costs for the period, partially offset by lower incentive costs in the current-year period. Salaries and benefits, as a percentage of revenue, represented 64% and 62% for the three months ended June 30, 2025 and 2024, respectively.
Salaries and benefits for the six months ended June 30, 2025 were $2.8 billion, compared to $2.7 billion for the six months ended June 30, 2024, an increase of $34 million or 1%. The increase in the current year is primarily due to higher salary expense, driven by increased colleague headcount and cost-of-living compensation adjustments, and higher share-based compensation costs in the current year, partially offset by lower incentive costs in the current year. Salaries and benefits, as a percentage of revenue, represented 62% and 59% for the six months ended June 30, 2025 and 2024, respectively.
Other Operating Expenses
Other operating expenses for the three months ended June 30, 2025 were $336 million, compared to $439 million for the three months ended June 30, 2024, a decrease of $103 million or 23%. The decrease was primarily due to lower marketing expenses attributable to the sale of our TRANZACT business on December 31, 2024, decreased costs associated with professional liability claims and lower non-income-related tax expense for the current-year period as compared to the prior-year period.
Other operating expenses for the six months ended June 30, 2025 were $701 million, compared to $896 million for the six months ended June 30, 2024, a decrease of $195 million or 22%. The decrease was primarily due to lower marketing expenses attributable to the sale of our TRANZACT business on December 31, 2024, decreased local office expenses and lower costs associated with professional liability claims, partially offset by higher travel and entertainment costs for the current year as compared to the prior year.
Depreciation
Depreciation for both the three months ended June 30, 2025 and 2024 was $57 million. Depreciation for the six months ended June 30, 2025 was $111 million, compared to $116 million for the six months ended June 30, 2024, a decrease of $5 million or 4%. The
36
year-over-year decrease was primarily due to a lower depreciable base of assets resulting from disposals associated with the Company’s Transformation program that concluded in the fourth quarter of 2024 and a lower dollar value of assets placed in service during the past few years.
Amortization
Amortization for the three months ended June 30, 2025 was $49 million, compared to $60 million for the three months ended June 30, 2024, a decrease of $11 million or 18%. Amortization for the six months ended June 30, 2025 was $97 million, compared to $120 million for the six months ended June 30, 2024, a decrease of $23 million or 19%. These decreases were due in part to the disposal of intangible assets associated with the sale of our TRANZACT business. Our intangible amortization is generally more heavily weighted to the initial years of the useful lives of the related intangibles, and therefore amortization related to intangible assets has decreased and will continue to decrease over time.
Restructuring Costs
Restructuring costs for the three and six months ended June 30, 2024 were $3 million and $21 million, respectively, and primarily related to the real estate rationalization component of our completed Transformation program.
Transaction and Transformation
Transaction and transformation costs for the three months ended June 30, 2025 were $2 million, compared to $97 million for the three months ended June 30, 2024, a decrease of $95 million. Transaction and transformation costs for the six months ended June 30, 2025 were $2 million, compared to $222 million for the six months ended June 30, 2024, a decrease of $220 million. Transaction and transformation costs in the current year were comprised of transaction-related costs, and costs incurred in the prior year primarily included consulting and compensation costs related to our completed Transformation program.
Income from Operations
Income from operations for the three months ended June 30, 2025 was $368 million, compared to $212 million for the three months ended June 30, 2024, an increase of $156 million. This increase resulted primarily from lower marketing expenses, decreased costs associated with professional liability claims and lower transformation and transaction costs due to the completion of our Transformation program during the fourth quarter of 2024, partially offset by higher salary expense and increased benefit and share-based compensation costs for the current-year period.
Income from operations for the six months ended June 30, 2025 was $800 million, compared to $492 million for the six months ended June 30, 2024, an increase of $308 million. This increase resulted primarily from lower transformation and transaction costs due to the completion of our Transformation program during the fourth quarter of 2024, and lower marketing expenses, decreased local office expenses and lower costs associated with professional liability claims in the current year, partially offset by lower revenue due to the prior-year sale of our TRANZACT business.
Interest Expense
Interest expense for the three months ended June 30, 2025 was $64 million, compared to $68 million for the three months ended June 30, 2024, a decrease of $4 million, or 6%. Interest expense for the six months ended June 30, 2025 was $129 million as compared to $132 million for the six months ended June 30, 2024, a decrease of $3 million or 2%. These decreases were primarily due to a lower average level of indebtedness in the current year.
Other Income/(Loss), Net
Other income/(loss), net for the three months ended June 30, 2025 was income of $9 million, compared to income of $23 million for the three months ended June 30, 2024, a decrease of $14 million. The decrease was due primarily to lower pension income, which was attributable to a significant pension settlement in the current year, and unfavorable favorable foreign currency movement in the current-year period.
Other income/(loss), net for the six months ended June 20, 2025 was a loss of $55 million, compared to income of $49 million for the six months ended June 30, 2024, a decrease of $104 million. The decrease was due primarily to lower pension income, which was attributable to a significant pension settlement in the current year, and unfavorable foreign currency movement in the current year, partially offset by a gain on disposal pertaining to favorable disposal-price adjustments associated with the prior-year sale of our TRANZACT business.
37
Benefit from/(provision for) Income Taxes
Benefit from income taxes for the three months ended June 30, 2025 was $21 million, compared to a provision for income taxes of $26 million for the three months ended June 30, 2024, a decrease of $47 million. The effective tax rate was (6.8)% for the three months ended June 30, 2025, and 15.6% for the three months ended June 30, 2024. Provision for income taxes for the six months ended June 30, 2025 was $44 million, compared to $74 million for the six months ended June 20, 2024, a decrease of $30 million. The effective tax rate was 7.1% for the six months ended June 30, 2025 and 18.1% for the six months ended June 30, 2024. These effective tax rates are calculated using extended values from our condensed consolidated statements of comprehensive income and are therefore more precise tax rates than can be calculated from rounded values. The current-year quarter’s effective tax rate is lower primarily due to favorable discrete tax items, which include an adjustment to the tax provision associated with the earnout received from the sale of our Willis Re business, changes in measurement for existing uncertain tax positions and an excess tax benefit on share-based compensation.
Net Income Attributable to WTW
Net income attributable to WTW for the three months ended June 30, 2025 was $331 million, compared to $141 million for the three months ended June 30, 2024, an increase of $190 million, or 135%. This increase resulted primarily from lower marketing expenses, decreased transformation and transaction costs due to the completion of our Transformation program during the fourth quarter of 2024, and lower income tax expense, partially offset by higher salary expense and increased benefit and share-based compensation costs for the current-year period.
Net income attributable to WTW for the six months ended June 30, 2025 was $566 million, compared to $331 million for the six months ended June 30, 2024, an increase of $235 million, or 71%. This increase resulted primarily from lower transformation and transaction costs due to the completion of our Transformation program during the fourth quarter of 2024, and lower marketing expenses, decreased local office expenses and lower income tax expense in the current year, partially offset by lower revenue due to the prior-year sale of our TRANZACT business and pension settlement costs in the current year.
Liquidity and Capital Resources
Executive Summary
Our principal sources of liquidity are funds generated by operating activities, available cash and cash equivalents and amounts available under our revolving credit facility and any new debt offerings.
There has been significant volatility in financial markets, including occasional declines in equity markets, inflation and changes in interest rates and reduced liquidity on a global basis and we expect this volatility could continue, all of which may impact our access to liquidity.
Based on our current balance sheet and cash flows, current market conditions and information available to us at this time, we believe that WTW has access to sufficient liquidity to meet our cash needs, including debt repayment, for the next twelve months. Including our cash generated from operations, our liquidity also includes all of the borrowing capacity available to draw against our $1.5 billion revolving credit facility. The use of these funds includes investments in the business for growth, scheduled debt repayments, share repurchases, dividend payments and general corporate purposes. Additionally, under our minority ownership interest in a joint venture with Bain Capital, in connection with which we re-entered the reinsurance broking space during the fourth quarter of 2024, we have an option to acquire a controlling interest in the joint venture in the future. Given the initial funding needs of a start-up venture, we expect to make certain capital contributions from time to time resulting in a reduction to earnings until such time as the joint venture generates sufficient revenue to be profitable.
During the six months ended June 30, 2025, we repurchased $700 million of our outstanding shares and have authorization to repurchase an additional $742 million under our share repurchase program (as further described below under ‘Share Repurchase Program’). We consider many factors, including market and economic conditions, applicable legal requirements and other business considerations, when considering whether to repurchase shares. Our Share Repurchase Program has no termination date and may be suspended or discontinued at any time.
Events that could change the historical cash flow dynamics discussed above include significant changes in operating results, potential future acquisitions or divestitures, material changes in geographic sources of cash, unexpected adverse impacts from litigation or tax or regulatory matters, or future pension funding during periods of severe downturn in the capital markets.
Undistributed Earnings of Foreign Subsidiaries
The Company recognizes deferred tax balances related to the undistributed earnings of subsidiaries when it expects that it will recover those undistributed earnings in a taxable manner, such as through receipt of dividends or sale of the investments.
38
We continue to have certain subsidiaries whose earnings have not been deemed permanently reinvested and for which we have been accruing estimates of the tax effects of such repatriation. Excluding these certain subsidiaries, we continue to assert that the historical cumulative earnings for the remainder of our subsidiaries have been reinvested indefinitely and therefore do not provide deferred taxes on these amounts. If future events, including material changes in estimates of cash, working capital, long-term investment requirements or additional legislation, necessitate that these earnings be distributed, an additional provision for income and foreign withholding taxes, net of credits, may be necessary. Other potential sources of cash may be through the settlement of intercompany loans or return of capital distributions in a tax-efficient manner.
Cash and Cash Equivalents
Our cash and cash equivalents at June 30, 2025 totaled $2.0 billion, compared to $1.9 billion at December 31, 2024. The increase in cash from December 31, 2024 to June 30, 2025 was due primarily to the $750 million earnout related to the 2021 divestiture of Willis Re, $326 million of net cash from operations and $62 million associated with the settlement of a note receivable related to the sale of our Max Matthiessen subsidiary in 2020, partially offset by $700 million of share repurchases, $179 million of dividend payments and $109 million of capital expenditures and capitalized software additions.
Additionally, we had all of the borrowing capacity available to draw against our $1.5 billion revolving credit facility at both June 20, 2025 and December 31, 2024.
Included within cash and cash equivalents at June 30, 2025 and December 31, 2024 are amounts held for regulatory capital adequacy requirements, including $106 million and $104 million, respectively, within our regulated U.K. entities.
Summarized Condensed Consolidated Cash Flows
The following table presents the summarized condensed consolidated cash flow information for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in millions) |
|
|||||
Net cash from/(used in): |
|
|
|
|
|
|
||
Operating activities |
|
$ |
326 |
|
|
$ |
431 |
|
Investing activities |
|
|
612 |
|
|
|
(158 |
) |
Financing activities |
|
|
(800 |
) |
|
|
364 |
|
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED |
|
|
138 |
|
|
|
637 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
207 |
|
|
|
(53 |
) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (i) |
|
|
4,998 |
|
|
|
3,792 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (i) |
|
$ |
5,343 |
|
|
$ |
4,376 |
|
Cash Flows From Operating Activities
Cash flows from operating activities were $326 million for the six months ended June 30, 2025, compared to cash flows from operating activities of $431 million for the six months ended June 30, 2024. The $326 million of net cash from operating activities for the six months ended June 30, 2025 included net income of $571 million and $388 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $633 million. This decrease in cash flows from operations as compared to the prior year was primarily driven by increased compensation and cash tax payments as well as the absence of cash inflows from TRANZACT following its sale on December 31, 2024, partly offset by lower Transformation program spending and operational improvements.
The $431 million of net cash from operating activities for the six months ended June 30, 2024 included net income of $336 million and $335 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $240 million.
Cash Flows From/(Used In) Investing Activities
Cash flows from investing activities for the six months ended June 30, 2025 were $612 million as compared to cash flows used in investing activities of $158 million for the six months ended June 30, 2024. The cash flows from investing activities in the current
39
year consisted primarily of net proceeds from sales of operations resulting from divestitures that occurred in prior years. These inflows were partially offset by capital expenditures, including software additions, and our net purchases of held-to-maturity and available-for-sale securities. The cash flows used in investing activities in the prior year consisted primarily of capital expenditures, including software additions.
Cash Flows (Used In)/From Financing Activities
Cash flows used in financing activities for the six months ended June 30, 2025 were $800 million. The significant financing activities included share repurchases of $700 million and dividend payments of $179 million, partially offset by net proceeds from fiduciary funds held for clients of $141 million.
Cash flows from financing activities for the six months ended June 30, 2024 were $364 million. The significant financing activities included net proceeds from fiduciary funds held for clients of $783 million and $85 million of net proceeds from the issuance of debt, partially offset by share repurchases of $301 million and dividend payments of $176 million.
Indebtedness
Total debt, total equity, and the capitalization ratios at June 30, 2025 and December 31, 2024 were as follows:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
($ in millions) |
|
|||||
Long-term debt |
|
$ |
4,762 |
|
|
$ |
5,309 |
|
Current debt |
|
|
549 |
|
|
|
— |
|
Total debt |
|
$ |
5,311 |
|
|
$ |
5,309 |
|
|
|
|
|
|
|
|
||
Total WTW shareholders’ equity |
|
$ |
8,100 |
|
|
$ |
7,940 |
|
|
|
|
|
|
|
|
||
Capitalization ratio |
|
|
39.6 |
% |
|
|
40.1 |
% |
At June 30, 2025, our mandatory debt repayments over the next twelve months include $550 million outstanding on our 4.400% senior notes, which will mature during the first quarter of 2026. For more information regarding our current and long-term debt, please see ‘Supplemental Guarantor Financial Information’ elsewhere within this Item 2 of this Quarterly Report on Form 10-Q.
At June 30, 2025 and December 31, 2024, we were in compliance with all financial covenants.
Fiduciary Funds
As an intermediary, we hold funds, generally in a fiduciary capacity, for the account of third parties, typically as the result of premiums received from clients that are in transit to insurers and claims due to clients that are in transit from insurers. We also hold funds for clients of our benefits account businesses, some of which are invested in open-ended mutual funds as directed by the participant. These fiduciary funds are included in fiduciary assets on our condensed consolidated balance sheets. We present the equal and corresponding fiduciary liabilities related to these fiduciary funds representing amounts or claims due to our clients or premiums due on their behalf to insurers on our condensed consolidated balance sheets.
Fiduciary funds are generally required to be kept in regulated bank accounts subject to guidelines which emphasize capital preservation and liquidity; such funds are not available to service the Company’s debt or for other corporate purposes. Notwithstanding the legal relationships with clients and insurers, the Company is entitled to retain investment income earned on certain of these fiduciary funds in accordance with industry custom and practice and, in some cases, as supported by agreements with insureds.
At June 30, 2025 and December 31, 2024, we had fiduciary funds of $3.8 billion and $3.4 billion, respectively.
Share Repurchase Program
The Company is authorized to repurchase shares, by way of redemption or otherwise, and will consider whether to do so from time to time, based on many factors, including market conditions. There are no expiration dates for our repurchase plans or programs.
On November 20, 2024, the board of directors approved a $1.0 billion increase to the existing share repurchase program. This increase brought the total approved authorization, since the announcement of the program on April 20, 2016, to $10.2 billion.
40
At June 30, 2025, approximately $742 million remained on the current repurchase authority. The maximum number of shares that could be repurchased based on the closing price of our ordinary shares on June 30, 2025 of $306.50 was 2,420,076.
During the three and six months ended June 30, 2025, the Company had the following share repurchase activity:
|
|
|
Three Months Ended |
|
Six Months Ended |
Shares repurchased |
|
|
1,614,427 |
|
2,221,648 |
Average price per share |
|
|
$309.71 |
|
$315.08 |
Aggregate repurchase cost (excluding broker costs) |
|
|
$500 million |
|
$700 million |
Capital Commitments
The Company’s capital expenditures for fixed assets, capitalized software and software for internal use were $109 million during the six months ended June 30, 2025. The Company estimates that there will be additional such expenditures in the range of $115 million - $140 million during the remainder of 2025. We currently expect cash from operations to adequately provide for these cash needs. There have been no material changes to our capital commitments since December 31, 2024.
Dividends
Total cash dividends of $179 million were paid during the six months ended June 30, 2025. In May 2025, the board of directors approved a quarterly cash dividend of $0.92 per share ($3.68 per share annualized rate), which was paid on July 15, 2025 to shareholders of record as of June 30, 2025.
Supplemental Guarantor Financial Information
As of June 30, 2025, WTW has issued the following debt securities (the ‘notes’):
The following table presents a summary of the entities that issue each note and those wholly-owned subsidiaries of the Company that guarantee each respective note on a joint and several basis as of June 30, 2025. These subsidiaries are all consolidated by Willis Towers Watson plc (the ‘parent company’) and together with the parent company comprise the ‘Obligor group’. On December 16, 2024, TA I Limited, Willis Towers Watson UK Holdings Limited and Willis Netherlands Holdings B.V. ceased to be guarantors of our notes and are no longer part of the Obligor group, following the transfer of their respective properties and assets to other existing guarantors within the Obligor group. Further, Willis Towers Watson UK Holdings Limited was released from its guarantees under our credit agreement. TA I Limited and Willis Netherlands Holdings B.V. will be released from their guarantees under our credit agreement when they are fully liquidated.
Entity |
|
Trinity Acquisition plc Notes |
|
Willis North America Inc. Notes |
Willis Towers Watson plc |
|
Guarantor |
|
Guarantor |
Trinity Acquisition plc |
|
Issuer |
|
Guarantor |
Willis North America Inc. |
|
Guarantor |
|
Issuer |
Willis Investment UK Holdings Limited |
|
Guarantor |
|
Guarantor |
Willis Group Limited |
|
Guarantor |
|
Guarantor |
Willis Towers Watson Sub Holdings Unlimited Company |
|
Guarantor |
|
Guarantor |
The notes issued by Willis North America and Trinity Acquisition plc:
41
All other subsidiaries of the parent company are non-guarantor subsidiaries (‘the non-guarantor subsidiaries’).
Each member of the Obligor group has only a stockholder’s claim on the assets of the non-guarantor subsidiaries. This stockholder’s claim is junior to the claims that creditors have against those non-guarantor subsidiaries. Holders of the notes will only be creditors of the Obligor group and not creditors of the non-guarantor subsidiaries. As a result, all of the existing and future liabilities of the non-guarantor subsidiaries, including any claims of trade creditors and preferred stockholders, will be structurally senior to the notes. As of and for the periods ended June 30, 2025 and December 31, 2024, the non-guarantor subsidiaries represented substantially all of the total assets and accounted for substantially all of the total revenue of the Company prior to consolidating adjustments. The non-guarantor subsidiaries have other liabilities, including contingent liabilities that may be significant. Each indenture does not contain any limitations on the amount of additional debt that the Obligor group and the non-guarantor subsidiaries may incur. The amounts of this debt could be substantial, and this debt may be debt of the non-guarantor subsidiaries, in which case this debt would be effectively senior in right of payment to the notes.
The notes are obligations exclusively of the Obligor group. Substantially all of the Obligor group’s operations are conducted through its non-guarantor subsidiaries. Therefore, the Obligor group’s ability to service its debt, including the notes, is dependent upon the net cash flows of its non-guarantor subsidiaries and their ability to distribute those net cash flows as dividends, loans or other payments to the Obligor group. Certain laws restrict the ability of these non-guarantor subsidiaries to pay dividends and make loans and advances to the Obligor group. In addition, such non-guarantor subsidiaries may enter into contractual arrangements that limit their ability to pay dividends and make loans and advances to the Obligor group.
Intercompany balances and transactions between members of the Obligor group have been eliminated. All intercompany balances and transactions between the Obligor group and the non-guarantor subsidiaries have been presented in the disclosures below on a net presentation basis, rather than a gross basis, as this better reflects the nature of the intercompany positions and presents the funding or funded position that is to be received or owed. The intercompany balances and transactions between the Obligor group and non-guarantor subsidiaries, presented below, relate to a number of items including loan funding for acquisitions and other purposes, transfers of surplus cash between subsidiary companies, funding provided for working capital purposes, settlement of expense accounts, transactions related to share-based payment arrangements and share issuances, intercompany royalty and related arrangements, intercompany dividends and intercompany interest. At June 30, 2025 and December 31, 2024, the intercompany balances of the Obligor group with non-guarantor subsidiaries were net receivables of $500 million and $1.0 billion, respectively, and net payables of $15.1 billion at both periods.
No balances or transactions of non-guarantor subsidiaries are presented in the disclosures other than the intercompany items noted above.
Presented below is certain summarized financial information for the Obligor group.
` |
|
As of |
|
|
As of |
|
||
|
|
(in millions) |
|
|||||
Total current assets |
|
$ |
398 |
|
|
$ |
290 |
|
Total non-current assets |
|
|
574 |
|
|
|
1,050 |
|
Total current liabilities |
|
|
6,735 |
|
|
|
6,254 |
|
Total non-current liabilities |
|
|
13,916 |
|
|
|
14,442 |
|
|
|
Six months ended |
|
|
|
|
(in millions) |
|
|
Revenue |
|
$ |
1,384 |
|
Income from operations |
|
|
1,276 |
|
Income from operations before income taxes (i) |
|
|
737 |
|
Net income |
|
|
926 |
|
Net income attributable to WTW |
|
|
926 |
|
42
Non-GAAP Financial Measures
In order to assist readers of our condensed consolidated financial statements in understanding the core operating results that WTW’s management uses to evaluate the business and for financial planning purposes, we present the following non-GAAP measures and their most directly comparable U.S. GAAP measure:
Most Directly Comparable U.S. GAAP Measure |
|
Non-GAAP Measure |
As reported change |
|
Constant currency change |
As reported change |
|
Organic change |
Income from operations/margin |
|
Adjusted operating income/margin |
Net income/margin |
|
Adjusted EBITDA/margin |
Net income attributable to WTW |
|
Adjusted net income |
Diluted earnings per share |
|
Adjusted diluted earnings per share |
Income from operations before income taxes and |
|
Adjusted income before taxes |
Provision for income taxes/U.S. GAAP tax rate |
|
Adjusted income taxes/tax rate |
Net cash from operating activities |
|
Free cash flow |
The Company believes that these 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:
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.
43
Constant Currency Change and Organic Change
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.
The constant currency and organic change results, and a reconciliation from the reported results for consolidated revenue are included in the ‘Consolidated Revenue’ section within this Form 10-Q. These measures are also reported by segment in the ‘Segment Revenue and Segment Operating Income’ section within this Form 10-Q.
Reconciliations of the as-reported change to the constant currency and organic changes for the three and six months ended June 30, 2025 from the three and six months ended June 30, 2024 are as follows. The components of revenue change may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Three Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change (i) |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
2,261 |
|
|
$ |
2,265 |
|
|
—% |
|
1% |
|
(1)% |
|
(6)% |
|
5% |
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change |
||||||||
|
|
|
|
|
|
|
|
As |
|
Less: |
|
Constant |
|
Less: |
|
|
||
|
|
Six Months Ended June 30, |
|
|
Reported |
|
Currency |
|
Currency |
|
Acquisitions/ |
|
Organic |
|||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change (i) |
||
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
4,484 |
|
|
$ |
4,606 |
|
|
(3)% |
|
—% |
|
(3)% |
|
(7)% |
|
5% |
For the three months ended June 30, 2025, our as-reported revenue decreased by $4 million and our organic revenue grew by 5%. For the six months ended June 30, 2025, our as-reported revenue decreased by $122 million, or 3%, and our organic revenue grew by 5%. These decreases in as-reported revenue were due primarily to the sale of our TRANZACT business on December 31, 2024. The increases in organic revenue were driven by strong performances in both segments. For additional information, please see the section entitled ‘Segment Revenue and Segment Operating Income’ elsewhere within Item 2 of this Quarterly Report on Form 10-Q.
Adjusted Operating Income/Margin
We consider adjusted operating income/margin to be important financial measures, which are used internally to evaluate and assess our core operations and to benchmark our operating results against our competitors.
Adjusted operating income is defined as income from operations adjusted for amortization, restructuring costs, transaction and transformation and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted operating income margin is calculated by dividing adjusted operating income by revenue.
44
Reconciliations of income from operations to adjusted operating income for the three and six months ended June 30, 2025 and 2024 are as follows:
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
($ in millions) |
|
|||||||||||||
Income from operations |
$ |
368 |
|
|
$ |
212 |
|
|
$ |
800 |
|
|
$ |
492 |
|
Adjusted for certain items: |
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization |
|
49 |
|
|
|
60 |
|
|
|
97 |
|
|
|
120 |
|
Restructuring costs |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
21 |
|
Transaction and transformation |
|
2 |
|
|
|
97 |
|
|
|
2 |
|
|
|
222 |
|
Provision for specified litigation matter (i) |
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
13 |
|
Adjusted operating income |
$ |
419 |
|
|
$ |
385 |
|
|
$ |
899 |
|
|
$ |
868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from operations margin |
|
16.3 |
% |
|
|
9.4 |
% |
|
|
17.8 |
% |
|
|
10.7 |
% |
Adjusted operating income margin |
|
18.5 |
% |
|
|
17.0 |
% |
|
|
20.0 |
% |
|
|
18.8 |
% |
Adjusted operating income increased for the three months ended June 30, 2025 to $419 million, from $385 million for the three months ended June 30, 2024 and increased for the six months ended June 30, 2025 to $899 million from $868 million for the six months ended June 30, 2024. These increases resulted primarily from lower marketing expenses and decreased local office expenses in the current-year periods, partially offset by lower revenue due to the prior-year sale of our TRANZACT business.
Adjusted EBITDA/Margin
We consider adjusted EBITDA/margin to be important financial measures, which are used internally to evaluate and assess our core operations, to benchmark our operating results against our competitors and to evaluate and measure our performance-based compensation plans.
Adjusted EBITDA is defined as net income adjusted for provision for income taxes, interest expense, depreciation and amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.
45
Reconciliations of net income to adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
($ in millions) |
|
|||||||||||||
NET INCOME |
|
$ |
332 |
|
|
$ |
142 |
|
|
$ |
571 |
|
|
$ |
336 |
|
(Benefit from)/provision for income taxes |
|
|
(21 |
) |
|
|
26 |
|
|
|
44 |
|
|
|
74 |
|
Interest expense |
|
|
64 |
|
|
|
68 |
|
|
|
129 |
|
|
|
132 |
|
Depreciation |
|
|
57 |
|
|
|
57 |
|
|
|
111 |
|
|
|
116 |
|
Amortization |
|
|
49 |
|
|
|
60 |
|
|
|
97 |
|
|
|
120 |
|
Restructuring costs |
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
21 |
|
Transaction and transformation |
|
|
2 |
|
|
|
97 |
|
|
|
2 |
|
|
|
222 |
|
Provision for specified litigation matter (i) |
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
13 |
|
Net periodic pension and postretirement benefits |
|
|
(13 |
) |
|
|
(21 |
) |
|
|
62 |
|
|
|
(43 |
) |
Gain on disposal of operations |
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
470 |
|
|
$ |
445 |
|
|
$ |
1,002 |
|
|
$ |
991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income margin |
|
|
14.7 |
% |
|
|
6.3 |
% |
|
|
12.7 |
% |
|
|
7.3 |
% |
Adjusted EBITDA margin |
|
|
20.8 |
% |
|
|
19.6 |
% |
|
|
22.3 |
% |
|
|
21.5 |
% |
Adjusted EBITDA for the three months ended June 30, 2025 was $470 million, compared to $445 million for the three months ended June 30, 2024, and was $1.0 billion for the six months ended June 30, 2025, compared to $991 million for the six months ended June 30, 2024. These increases resulted primarily from lower marketing expenses and decreased local office expenses in the current-year periods, partially offset by lower revenue due to the prior-year sale of our TRANZACT business and higher benefit and share-based compensation costs in the current-year periods.
Adjusted Net Income and Adjusted Diluted Earnings Per Share
Adjusted net income is defined as net income attributable to WTW adjusted for amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results and the related tax effect of those adjustments and the tax effects of internal reorganizations. This measure is used solely for the purpose of calculating adjusted diluted earnings per share.
Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average number of ordinary shares, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.
46
Reconciliations of net income attributable to WTW to adjusted diluted earnings per share for the three and six months ended June 30, 2025 and 2024 are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
($ in millions) |
|
|||||||||||||
NET INCOME ATTRIBUTABLE TO WTW |
|
$ |
331 |
|
|
$ |
141 |
|
|
$ |
566 |
|
|
$ |
331 |
|
Adjusted for certain items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization |
|
|
49 |
|
|
|
60 |
|
|
|
97 |
|
|
|
120 |
|
Restructuring costs |
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
21 |
|
Transaction and transformation |
|
|
2 |
|
|
|
97 |
|
|
|
2 |
|
|
|
222 |
|
Provision for specified litigation matter (i) |
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
13 |
|
Net periodic pension and postretirement benefits |
|
|
(13 |
) |
|
|
(21 |
) |
|
|
62 |
|
|
|
(43 |
) |
Gain on disposal of operations |
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
— |
|
Tax effect on certain items listed above (ii) |
|
|
(10 |
) |
|
|
(39 |
) |
|
|
(38 |
) |
|
|
(85 |
) |
Tax effect of significant adjustments |
|
|
(74 |
) |
|
|
(7 |
) |
|
|
(74 |
) |
|
|
(7 |
) |
Adjusted net income |
|
$ |
285 |
|
|
$ |
247 |
|
|
$ |
601 |
|
|
$ |
572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average ordinary shares — diluted |
|
|
100 |
|
|
|
103 |
|
|
|
100 |
|
|
|
104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share |
|
$ |
3.32 |
|
|
$ |
1.36 |
|
|
$ |
5.64 |
|
|
$ |
3.20 |
|
Adjusted for certain items (iii) : |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization |
|
|
0.49 |
|
|
|
0.58 |
|
|
|
0.97 |
|
|
|
1.16 |
|
Restructuring costs |
|
|
— |
|
|
|
0.03 |
|
|
|
— |
|
|
|
0.20 |
|
Transaction and transformation |
|
|
0.02 |
|
|
|
0.94 |
|
|
|
0.02 |
|
|
|
2.14 |
|
Provision for specified litigation matter (i) |
|
|
— |
|
|
|
0.13 |
|
|
|
— |
|
|
|
0.13 |
|
Net periodic pension and postretirement benefits |
|
|
(0.13 |
) |
|
|
(0.20 |
) |
|
|
0.62 |
|
|
|
(0.42 |
) |
Gain on disposal of operations |
|
|
— |
|
|
|
— |
|
|
|
(0.14 |
) |
|
|
— |
|
Tax effect on certain items listed above (ii) |
|
|
(0.10 |
) |
|
|
(0.38 |
) |
|
|
(0.38 |
) |
|
|
(0.82 |
) |
Tax effect of significant adjustments |
|
|
(0.74 |
) |
|
|
(0.07 |
) |
|
|
(0.74 |
) |
|
|
(0.07 |
) |
Adjusted diluted earnings per share |
|
$ |
2.86 |
|
|
$ |
2.39 |
|
|
$ |
5.99 |
|
|
$ |
5.53 |
|
Our adjusted diluted earnings per share increased for both the three and six months ended June 30, 2025 as compared to the prior year primarily due to a lower weighted-average outstanding share count due to our share repurchase activity over the last year, and lower marketing expenses and decreased local office expenses in the current-year periods, partially offset by lower revenue due to the prior-year sale of our TRANZACT business and higher benefit and share-based compensation costs in the current-year periods.
Adjusted Income Before Taxes and Adjusted Income Taxes/Tax Rate
Adjusted income before taxes is defined as income from operations before income taxes and interest in earnings of associates adjusted for amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, 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 is defined as the provision for income taxes adjusted for taxes on certain items of amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, the tax effects of significant adjustments 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.
47
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 significant adjustments, which are not core to our current and future operations.
Reconciliations of income from operations before income taxes and interest in earnings of associates to adjusted income before taxes and provision for income taxes to adjusted income taxes for the three and six months ended June 30, 2025 and 2024 are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
2024 |
|
||||||
|
|
($ in millions) |
|
|||||||||||||
INCOME FROM OPERATIONS BEFORE INCOME TAXES |
|
$ |
313 |
|
|
$ |
167 |
|
|
$ |
616 |
|
|
$ |
409 |
|
Adjusted for certain items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization |
|
|
49 |
|
|
|
60 |
|
|
|
97 |
|
|
|
120 |
|
Restructuring costs |
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
21 |
|
Transaction and transformation |
|
|
2 |
|
|
|
97 |
|
|
|
2 |
|
|
|
222 |
|
Provision for specified litigation matter (i) |
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
13 |
|
Net periodic pension and postretirement benefits |
|
|
(13 |
) |
|
|
(21 |
) |
|
|
62 |
|
|
|
(43 |
) |
Gain on disposal of operations |
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
— |
|
Adjusted income before taxes |
|
$ |
351 |
|
|
$ |
319 |
|
|
$ |
763 |
|
|
$ |
742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Benefit from)/provision for income taxes |
|
$ |
(21 |
) |
|
$ |
26 |
|
|
$ |
44 |
|
|
$ |
74 |
|
Tax effect on certain items listed above (ii) |
|
|
10 |
|
|
|
39 |
|
|
|
38 |
|
|
|
85 |
|
Tax effect of significant adjustments |
|
|
74 |
|
|
|
7 |
|
|
|
74 |
|
|
|
7 |
|
Adjusted income taxes |
|
$ |
63 |
|
|
$ |
72 |
|
|
$ |
156 |
|
|
$ |
166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. GAAP tax rate |
|
|
(6.8 |
)% |
|
|
15.6 |
% |
|
|
7.1 |
% |
|
|
18.1 |
% |
Adjusted income tax rate |
|
|
18.0 |
% |
|
|
22.4 |
% |
|
|
20.5 |
% |
|
|
22.3 |
% |
Our U.S. GAAP tax rates were (6.8)% and 15.6% for the three months ended June 30, 2025 and 2024, respectively, and 7.1% and 18.1% for the six months ended June 30 2025 and 2024, respectively. The current-year quarter’s effective tax rate is lower primarily due to favorable discrete tax items, which include an adjustment to the tax provision associated with the earnout received from the sale of our Willis Re business, changes in measurement for existing uncertain tax positions and an excess tax benefit on share-based compensation.
Our adjusted income tax rates were 18.0% and 22.4% for the three months ended June 30, 2025 and 2024, respectively, and 20.5% and 22.3% for the six months ended June 30, 2025 and 2024, respectively. The current-year quarter’s adjusted tax rate is lower primarily due to favorable discrete tax items, changes in measurement for existing uncertain tax positions and an excess tax benefit on share-based compensation.
Free Cash Flow
Free cash flow is defined as cash flows from operating activities less cash used to purchase fixed assets and software. Free cash flow is a liquidity measure and is not meant to represent residual cash flow available for discretionary expenditures.
As a result of our change in presentation, free cash flow for the prior period has been adjusted to conform to the current period, which includes the deduction of our capitalized software costs.
Management believes that free cash flow presents the core operating performance and cash generating capabilities of our business operations.
48
Reconciliations of cash flows from operating activities to free cash flow for the six months ended June 30, 2025 and 2024 are as follows:
|
|
Six Months Ended June 30 |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in millions) |
|
|||||
Cash flows from operating activities |
|
$ |
326 |
|
|
$ |
431 |
|
Less: Additions to fixed assets and software |
|
|
(109 |
) |
|
|
(126 |
) |
Free cash flow |
|
$ |
217 |
|
|
$ |
305 |
|
The decrease in free cash flow during the current-year period was primarily driven by increased compensation and cash tax payments as well as the absence of cash inflows from TRANZACT following its sale on December 31, 2024, partly offset by lower Transformation program spending and operational improvements.
Critical Accounting Estimates
There were no material changes from the Critical Accounting Estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025.
49
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have considered changes in our exposure to market risks during the six months ended June 30, 2025 and have determined that there have been no material changes to our exposure to market risks from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025. However, we have provided the following information to supplement or update our disclosures on our Form 10-K.
The Company has a global investment policy which is designed to ensure that we maintain diversification of our cash investments throughout the world in order to minimize the risk of loss due to a counterparty failure.
Interest Income on Fiduciary Funds
As described in our Annual Report on Form 10-K, we are exposed to interest rate risk. Specifically, as a result of our operating activities, we receive cash for premiums and claims which we deposit in high-quality bank term deposit and money market funds, on which we earn interest, where permitted. We also hold funds for clients of our benefits accounts businesses. For the benefit funds not invested, cash and cash equivalents are held, on which we earn interest, until the funds are directed by plan participants to either be invested in mutual funds or paid out on their behalf. This interest earned is included in our condensed consolidated financial statements as interest income. These funds are regulated in terms of access and the instruments in which they may be invested, most of which are short-term in maturity. Short-term rates in major currencies began to decrease over the second half of 2024 from end-of-2023 levels. This followed some steep central bank rate increases in 2023. Our increased interest income in 2024 reflected a combination of relatively high-average interest rates over the course of 2024 and some increases in our invested cash balances. Through the second quarter of 2025, although at levels below the same period in 2024, short-term rates have remained largely stable. Significant economic uncertainty prevails at this time, and the timing and magnitude of future central bank rate changes are uncertain. As to be expected, interest income in the future will be a function of the short-term rates we are able to obtain by currency and the cash balances available to invest. Interest income was $40 million and $79 million for the three and six months ended June 30, 2025, respectively, and $44 million and $87 million for the three and six months ended June 30, 2024, respectively. At June 30, 2025, we held $2.8 billion of fiduciary funds invested in interest-bearing accounts. If short-term interest rates increased or decreased by 25 basis points, interest earned on these invested fiduciary funds, and therefore our interest income recognized, would increase or decrease by approximately $7 million on an annualized basis.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of June 30, 2025, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (‘CEO’) and the Chief Financial Officer (‘CFO’), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’). Based upon that evaluation, our management, including the CEO and CFO, concluded that the our disclosure controls and procedures are effective in providing reasonable assurance that the information required to be included in the periodic reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to our management, including the CEO and the CFO, as appropriate, to allow for timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Exchange Act during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Management, including the CEO and CFO, does not expect that our disclosure controls and procedures will necessarily prevent all errors and all fraud. However, management does expect that the control system provides reasonable assurance that its objectives will be met. A control system, no matter how well designed and operated, cannot provide absolute assurance that the control system’s objectives will be met. In addition, the design of such internal controls must take into account the costs of designing and maintaining such a control system. Certain inherent limitations exist in control systems to make absolute assurances difficult, including the realities that judgments in decision-making can be faulty, that breakdowns can occur because of a simple error or mistake, and that individuals can circumvent controls. The design of any control system is based in part upon existing business conditions and risk assessments. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in business conditions or deterioration in the degree of compliance with policies or procedures. As a result, they may require change or revision. Because of the inherent limitations in a control system, misstatements
50
due to error or fraud may occur and may not be detected. Nevertheless, the disclosure controls and procedures are designed to provide reasonable assurance of achieving their stated objectives, and the CEO and CFO have concluded that the disclosure controls and procedures are effective at a reasonable assurance level.
51
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are a party to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The disclosure called for by Part II, Item 1 regarding our legal proceedings is incorporated by reference herein from Part I, Item 1 Note 14 — Commitments and Contingencies - Legal Proceedings of the notes to the condensed consolidated financial statements in this Form 10-Q for the quarter ended June 30, 2025.
ITEM 1A. RISK FACTORS
There are no material changes from risk factors as previously disclosed in our Annual Report on Form 10-K, filed with the SEC on February 25, 2025. We urge you to read the risk factors contained therein.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the six months ended June 30, 2025, no shares were issued by the Company without registration under the Securities Act of 1933, as amended.
(c) Issuer Purchases of Equity Securities
The Company is authorized to repurchase shares, by way of redemption or otherwise, and will consider whether to do so from time to time, based on many factors, including market conditions. There are no expiration dates for these repurchase plans or programs.
On November 20, 2024, the board of directors approved a $1.0 billion increase to the existing share repurchase program. This increase brought the total approved authorization, since the announcement of the program on April 20, 2016, to $10.2 billion.
The following table presents specified information about the Company’s repurchases of its shares in the second quarter of 2025 and the Company’s remaining repurchase authority.
Period |
|
Total number of shares purchased |
|
|
Average price |
|
|
Total number of shares purchased as part of publicly announced plans or programs |
|
|
Maximum number of shares that may yet be purchased under the plans or programs |
|
||||
April 1, 2025 through April 30, 2025 |
|
|
540,279 |
|
|
$ |
314.14 |
|
|
|
540,279 |
|
|
|
3,494,224 |
|
May 1, 2025 through May 31, 2025 |
|
|
807,216 |
|
|
$ |
308.99 |
|
|
|
807,216 |
|
|
|
2,687,008 |
|
June 1, 2025 through June 30, 2025 |
|
|
266,932 |
|
|
$ |
302.90 |
|
|
|
266,932 |
|
|
|
2,420,076 |
|
|
|
|
1,614,427 |
|
|
$ |
309.71 |
|
|
|
1,614,427 |
|
|
|
|
|
At June 30, 2025 the maximum number of shares that may yet be purchased under the existing share repurchase plan is 2,420,076, with approximately $742 million remaining on the current open-ended repurchase authority granted by the board. An estimate of the maximum number of shares under the existing authorities was determined using the closing price of our ordinary shares on June 30, 2025 of $306.50.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) None.
(b) None.
(c) Rule 10b5-1 Trading Arrangements
For the quarter ended June 30, 2025, none of the Company’s directors and officers
52
ITEM 6. EXHIBITS
EXHIBIT INDEX
|
|
|
|
Incorporated by Reference |
|
|||||
Exhibit Number |
|
Description of Exhibit |
|
Schedule/ Form |
|
Exhibit |
|
Filing Date |
|
Filed Herewith |
10.1† |
|
Form of 2025 Time-Based Restricted Share Unit Award Agreement for Executive Officers under the Willis Towers Watson 2012 Equity Incentive Plan, as Amended and Restated. |
|
|
|
|
|
|
|
X |
10.2† |
|
Form of 2025 Performance-Based Restricted Share Unit Award Agreement for Executive Officers under the Willis Towers Watson 2012 Equity Incentive Plan, as Amended and Restated. |
|
|
|
|
|
|
|
X |
22.1 |
|
List of Issuers and Guarantor Subsidiaries. |
|
10-K |
|
22.1 |
|
February 25,2025 |
|
|
31.1 |
|
Certification of the Registrant’s Chief Executive Officer, Carl A. Hess, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. |
|
|
|
|
|
|
|
X |
31.2 |
|
Certification of the Registrant’s Chief Financial Officer, Andrew J. Krasner, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. |
|
|
|
|
|
|
|
X |
32.1** |
|
Certification of the Registrant’s Chief Executive Officer, Carl A. Hess, and Chief Financial Officer, Andrew J. Krasner, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document |
|
|
|
|
|
|
|
X |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
|
|
|
|
|
X |
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
|
|
X |
** Furnished herewith. Any exhibits furnished herewith (including the certification furnished in Exhibit 32.1) are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed ‘filed’ for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’), or otherwise subject to the liability of that section. Such information shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
† Management contract or compensatory plan or arrangement.
53
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Willis Towers Watson Public Limited Company |
|
|
||
(Registrant) |
|
|
||
|
|
|
||
/s/ Carl A. Hess |
|
August 1, 2025 |
||
Name: |
|
Carl A. Hess |
|
Date |
Title: |
|
Chief Executive Officer |
|
|
|
|
|
|
|
/s/ Andrew J. Krasner |
|
August 1, 2025 |
||
Name: |
|
Andrew J. Krasner |
|
Date |
Title: |
|
Chief Financial Officer |
|
|
|
|
|
|
|
/s/ Joseph S. Kurpis |
|
August 1, 2025 |
||
Name: |
|
Joseph S. Kurpis |
|
Date |
Title: |
|
Principal Accounting Officer and Controller |
|
|
54
Source:
FAQ
How did WTW's Q2 2025 earnings compare with last year?
Did Willis Towers Watson meet revenue expectations in Q2 2025?
What is the status of WTW's cost-saving Transformation program?
How much debt does WTW have after the quarter?
What capital was returned to shareholders in the first half of 2025?
Why did operating cash flow decrease despite higher profits?
