WTW (NASDAQ: WTW) (the “Company”), a leading global advisory,
broking and solutions company, today announced financial results
for the fourth quarter and year ended December 31, 2023.
“WTW closed 2023 with robust momentum, delivering
strong organic revenue, margin, and earnings growth in the fourth
quarter to cap a solid financial performance for the year,” said
Carl Hess, WTW’s chief executive officer. “Our topline results and
healthy pipeline for 2024 reflect the success of our growth
initiatives with both new and existing clients. Alongside the
strong revenue growth, our progress simplifying and transforming
our operations drove efficiencies and margin expansion in the
quarter. We also made progress on our commitment to improve cash
flow. I applaud my colleagues for their hard work in growing,
simplifying and transforming WTW. I look forward to our working
together in 2024 as we aim to achieve our strategic and financial
goals and create value for our shareholders.”
Consolidated Results
Fourth Quarter 2023, as reported,
USD millions, except %
Key Metrics |
Q4-23 |
Q4-22 |
Y/Y Change |
Revenue1 |
$2,914 |
$2,722 |
Reported 7% | CC 6% | Organic 6% |
Income from Operations |
$779 |
$708 |
10% |
Operating Margin % |
26.7% |
26.0% |
70 bps |
Adjusted Operating Income |
$998 |
$882 |
13% |
Adjusted Operating Margin % |
34.2% |
32.4% |
180 bps |
Net Income |
$623 |
$593 |
5% |
Adjusted Net Income |
$775 |
$689 |
12% |
Diluted EPS |
$5.97 |
$5.40 |
11% |
Adjusted Diluted EPS |
$7.44 |
$6.33 |
18% |
1 |
The revenue amounts included in this release are presented on a
U.S. GAAP basis except where stated otherwise. This excludes
reinsurance revenue which is reported in discontinued operations.
The segment discussion is on an organic basis. |
Revenue was $2.91 billion for the fourth quarter
of 2023, an increase of 7% as compared to $2.72 billion for the
same period in the prior year. Excluding the impact of foreign
currency, revenue increased 6%. On an organic basis, revenue
increased 6%. See Supplemental Segment Information on page 9 for
additional detail on book-of-business settlements and interest
income included in revenue.
Net Income for the fourth quarter of 2023 was $623
million, an increase of 5% compared to Net Income of $593 million
in the prior-year fourth quarter. Adjusted EBITDA for the fourth
quarter was $1.1 billion, or 37.1% of revenue, an increase of 7%,
compared to Adjusted EBITDA of $1.0 billion, or 37.1% of revenue,
in the prior-year fourth quarter. The U.S. GAAP tax rate for the
fourth quarter was 15.7%, and the adjusted income tax rate for the
fourth quarter used in calculating adjusted diluted earnings per
share was 19.1%.
Full Year 2023, as reported, USD
millions, except %
Key Metrics |
FY-23 |
FY-22 |
Y/Y Change |
Revenue1 |
$9,483 |
$8,866 |
Reported 7% | CC 7% | Organic 8% |
Income from Operations |
$1,365 |
$1,178 |
16% |
Operating Margin % |
14.4% |
13.3% |
110 bps |
Adjusted Operating Income |
$2,082 |
$1,851 |
12% |
Adjusted Operating Margin % |
22.0% |
20.9% |
110 bps |
Net Income |
$1,064 |
$1,024 |
4% |
Adjusted Net Income |
$1,536 |
$1,507 |
2% |
Diluted EPS |
$9.95 |
$8.98 |
11% |
Adjusted Diluted EPS |
$14.49 |
$13.41 |
8% |
1 |
The revenue amounts included in this release are presented on a
U.S. GAAP basis except where stated otherwise. This excludes
reinsurance revenue which is reported in discontinued operations.
The segment discussion is on an organic basis. |
Revenue was $9.48 billion for the year ended
December 31, 2023, an increase of 7% as compared to $8.87 billion
for the prior year. On an organic basis, revenue increased 8%. See
Supplemental Segment Information on page 9 for additional detail on
book-of-business settlements and interest income included in
revenue.
Net Income for the year ended December 31, 2023
was $1.1 billion, an increase of 4% compared to Net Income of $1.0
billion in the prior year. Adjusted EBITDA for 2023 was $2.4
billion, or 25.6% of revenue, an increase of $43 million, compared
to Adjusted EBITDA of $2.4 billion, or 26.9% of revenue, in the
prior year.
The U.S. GAAP tax rate for 2023 was 16.8%, and the
adjusted income tax rate for 2023 used in calculating adjusted
diluted earnings per share was 20.9%. The adjusted income tax rate
for 2023 was impacted by one-time favorable items. Excluding these
items, our adjusted income tax rate for 2023 would have been
22.4%.
Cash Flow and Capital
Allocation
Cash flow from operating activities were $1.3
billion for the year ended December 31, 2023, compared to $812
million for the prior year. Free cash flow for the years ended
December 31, 2023 and 2022 was $1.2 billion and $674 million,
respectively, an improvement of $518 million. During the fourth
quarter and year ended December 31, 2023, the Company repurchased
$196 million and $1.0 billion of WTW shares, respectively.
Quarterly Business
Highlights
- Realized $37 million of incremental annualized Transformation
program savings, bringing the total to $337 million in cumulative
savings since the program's inception. Refer to the Supplemental
Slides for additional detail.
- Repurchased 832,009 of our shares for $196 million.
- Announced the formation of a newly created team, Strategic
Client Engagement Leaders, focused on driving growth of large,
complex clients within the twelve industry vertical divisions of
Corporate Risk & Broking in North America, to further advance
our specialization strategy in the Risk & Broking segment.
Fourth Quarter 2023 Segment
Highlights
Health, Wealth & Career
As reported, USD millions, except %
Health, Wealth & Career |
Q4-23 |
Q4-22 |
Y/Y Change |
Total Revenue |
$1,798 |
$1,722 |
Reported 4% | CC 3% | Organic 4% |
Operating Income |
$729 |
$672 |
8% |
Operating Margin % |
40.5% |
39.0% |
150 bps |
The HWC segment had revenue of $1.80 billion in
the fourth quarter of 2023, an increase of 4% (3% increase constant
currency and 4% organic) from $1.72 billion in the prior year.
Organic growth in Benefits Delivery & Outsourcing was driven by
higher volumes and placements of Medicare Advantage and life
policies in Individual Marketplace and increased compliance and
other project activity in Outsourcing. Our Wealth businesses
generated organic revenue growth from higher levels of Retirement
work in North America and Europe, along with new client
acquisitions, pension brokerage and higher fees in Investments.
Organic revenue growth in Health was driven by the continued
expansion of our Global Benefits Management client portfolio,
increased brokerage income and a modest tailwind from
book-of-business settlement revenue. Career had organic revenue
growth from our compensation survey sales and executive
compensation, reward-based advisory and employee experience
services.
Operating margins in the HWC segment increased 150
basis points from the prior-year fourth quarter to 40.5%, primarily
from Transformation savings.
Risk & Broking
As reported, USD millions, except %
Risk & Broking |
Q4-23 |
Q4-22 |
Y/Y Change |
Total Revenue |
$1,076 |
$952 |
Reported 13% | CC 12% | Organic 12% |
Operating Income |
$354 |
$269 |
32% |
Operating Margin % |
32.9% |
28.3% |
460 bps |
The R&B segment had revenue of $1.08 billion
in the fourth quarter of 2023, an increase of 13% (12% increase
constant currency and organic) from $952 million in the prior year.
Corporate Risk & Broking generated exceptional organic revenue
growth driven by strong new business, improved client retention and
rate increases. Insurance Consulting and Technology had organic
revenue growth from software sales and increased project
revenue.
Operating margins in the R&B segment increased
460 basis points from the prior-year fourth quarter to 32.9%, due
to higher operating leverage, driven by strong organic revenue
growth and increased productivity from recent hires, and
Transformation savings.
Outlook
Based on current and anticipated market
conditions, the Company's full-year targets for 2024, consistent
with those targets that have been previously provided, are as
follows. Refer to the Supplemental Slides for additional
detail.
- Expect to deliver revenue of $9.9 billion or greater and
mid-single digit organic revenue growth for the full year 2024
- Expect to deliver adjusted operating margin of 22.5% - 23.5%
for the full year 2024
- Expect to deliver adjusted diluted earnings per share of $15.40
- $17.00 for the full year 2024
- Expect approximately $88 million in non-cash pension income for
the full year 2024
- Expect a foreign currency headwind on adjusted earnings per
share of approximately $0.02 for the full year 2024 at today’s
rates
- Expect to deliver approximately $425 million of cumulative
run-rate savings from the Transformation program by the end of
2024, up from $380 million previously, and total program costs of
$1.125 billion, up from $900 million previously.
Outlook includes Non-GAAP financial measures. We
do not reconcile forward-looking Non-GAAP measures for reasons
explained below.
Conference Call
The Company will host a live webcast and
conference call to discuss the financial results for the fourth
quarter and full year 2023. It will be held on Tuesday, February 6,
2024, beginning at 9:00 a.m. Eastern Time. A live broadcast of the
conference call will be available on WTW’s website here. The
conference call will include a question-and-answer session. To
participate in the question-and-answer session, please register
here. An online replay will be available at www.wtwco.com shortly
after the call concludes.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven,
insight-led solutions in the areas of people, risk and capital.
Leveraging the global view and local expertise of our colleagues
serving 140 countries and markets, we help organizations sharpen
their strategy, enhance organizational resilience, motivate their
workforce and maximize performance. Working shoulder to shoulder
with our clients, we uncover opportunities for sustainable
success—and provide perspective that moves you. Learn more at
www.wtwco.com.
WTW Non-GAAP Measures
In order to assist readers of our consolidated
financial statements in understanding the core operating results
that WTW’s management uses to evaluate the business and for
financial planning, we present the following non-GAAP measures: (1)
Constant Currency Change, (2) Organic Change, (3) Adjusted
Operating Income/Margin, (4) Adjusted EBITDA/Margin, (5) Adjusted
Net Income, (6) Adjusted Diluted Earnings Per Share, (7) Adjusted
Income Before Taxes, (8) Adjusted Income Taxes/Tax Rate, (9) Free
Cash Flow and (10) Free Cash Flow Margin.
We believe that those measures are relevant and
provide pertinent information widely used by analysts, investors
and other interested parties in our industry to provide a baseline
for evaluating and comparing our operating performance, and in the
case of free cash flow, our liquidity results.
Within the measures referred to as ‘adjusted’, we
adjust for significant items which will not be settled in cash, or
which we believe to be items that are not core to our current or
future operations. Some of these items may not be applicable for
the current quarter, however they may be part of our full-year
results. Additionally, we have historically adjusted for certain
items which are not described below, but for which we may adjust in
a future period when applicable. Items applicable to the quarter or
full year results, or the comparable periods, include the
following:
- Income and loss from discontinued operations, net of tax –
Adjustment to remove the after-tax income or loss from discontinued
operations and the after-tax gain attributable to the divestiture
of our Willis Re business.
- Restructuring costs and transaction and transformation –
Management believes it is appropriate to adjust for restructuring
costs and transaction and transformation when they relate to a
specific significant program with a defined set of activities and
costs that are not expected to continue beyond a defined period of
time, or significant acquisition-related transaction expenses. We
believe the adjustment is necessary to present how the Company is
performing, both now and in the future when the incurrence of these
costs will have concluded.
- Impairment – Adjustment to remove the impairment related to the
net assets of our Russian business that are held outside of our
Russian entities.
- Gains and losses on disposals of operations – Adjustment to
remove the gains or losses resulting from disposed operations that
have not been classified as discontinued operations.
- Tax effect of the Coronavirus Aid, Relief, and Economic
Security (‘CARES’) Act – Relates to the incremental tax expense or
benefit, primarily from the Base Erosion and Anti-Abuse Tax
(‘BEAT’), generated from electing or changing elections of certain
income tax provisions available under the CARES Act.
- Tax effect of internal reorganizations – Relates to the U.S.
income tax expense resulting from the completion of internal
reorganizations of the ownership of certain businesses that reduced
the investments held by our U.S.-controlled subsidiaries.
We evaluate our revenue on an as reported (U.S.
GAAP), constant currency and organic basis. We believe presenting
constant currency and organic information provides valuable
supplemental information regarding our comparable results,
consistent with how we evaluate our performance internally.
We consider Constant Currency Change, Organic
Change, Adjusted Operating Income/Margin, Adjusted EBITDA/Margin,
Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted
Income Before Taxes, Adjusted Income Taxes/Tax Rate and Free Cash
Flow to be important financial measures, which are used to
internally evaluate and assess our core operations and to benchmark
our operating and liquidity results against our competitors. These
non-GAAP measures are important in illustrating what our comparable
operating and liquidity results would have been had we not incurred
transaction-related and non-recurring items. Reconciliations of
these measures are included in the accompanying tables with the
following exception: The Company does not reconcile its
forward-looking non-GAAP financial measures to the corresponding
U.S. GAAP measures, due to variability and difficulty in making
accurate forecasts and projections and/or certain information not
being ascertainable or accessible; and because not all of the
information, such as foreign currency impacts necessary for a
quantitative reconciliation of these forward-looking non-GAAP
financial measures to the most directly comparable U.S. GAAP
financial measure, is available to the Company without unreasonable
efforts. For the same reasons, the Company is unable to address the
probable significance of the unavailable information. The Company
provides non-GAAP financial measures that it believes will be
achieved, however it cannot accurately predict all of the
components of the adjusted calculations and the U.S. GAAP measures
may be materially different than the non-GAAP measures.
Our non-GAAP measures and their accompanying
definitions are presented as follows:
Constant Currency Change – Represents the
year-over-year change in revenue excluding the impact of foreign
currency fluctuations. To calculate this impact, the prior year
local currency results are first translated using the current year
monthly average exchange rates. The change is calculated by
comparing the prior year revenue, translated at the current year
monthly average exchange rates, to the current year as reported
revenue, for the same period. We believe constant currency measures
provide useful information to investors because they provide
transparency to performance by excluding the effects that foreign
currency exchange rate fluctuations have on period-over-period
comparability given volatility in foreign currency exchange
markets.
Organic Change – Excludes the impact of
fluctuations in foreign currency exchange rates, as described above
and the period-over-period impact of acquisitions and divestitures
on current-year revenue. We believe that excluding
transaction-related items from our U.S. GAAP financial measures
provides useful supplemental information to our investors, and it
is important in illustrating what our core operating results would
have been had we not included these transaction-related items,
since the nature, size and number of these transaction-related
items can vary from period to period.
Adjusted Operating Income/Margin – Income from
operations adjusted for amortization, restructuring costs,
transaction and transformation and non-recurring items that, in
management’s judgment, significantly affect the period-over-period
assessment of operating results. Adjusted operating income margin
is calculated by dividing adjusted operating income by revenue. We
consider adjusted operating income/margin to be important financial
measures, which are used internally to evaluate and assess our core
operations and to benchmark our operating results against our
competitors.
Adjusted EBITDA/Margin – Net Income adjusted for
loss/(income) from discontinued operations, net of tax, provision
for income taxes, interest expense, depreciation and amortization,
restructuring costs, transaction and transformation, gains and
losses on disposals of operations and non-recurring items that, in
management’s judgment, significantly affect the period-over-period
assessment of operating results. Adjusted EBITDA Margin is
calculated by dividing adjusted EBITDA by revenue. We consider
adjusted EBITDA/margin to be important financial measures, which
are used internally to evaluate and assess our core operations, to
benchmark our operating results against our competitors and to
evaluate and measure our performance-based compensation plans.
Adjusted Net Income – Net Income Attributable to
WTW adjusted for loss/(income) from discontinued operations, net of
tax, amortization, restructuring costs, transaction and
transformation, gains and losses on disposals of operations and
non-recurring items that, in management’s judgment, significantly
affect the period-over-period assessment of operating results and
the related tax effect of those adjustments and the tax effects of
internal reorganizations. This measure is used solely for the
purpose of calculating adjusted diluted earnings per share.
Adjusted Diluted Earnings Per Share – Adjusted Net
Income divided by the weighted-average number of ordinary shares,
diluted. Adjusted diluted earnings per share is used to internally
evaluate and assess our core operations and to benchmark our
operating results against our competitors.
Adjusted Income Before Taxes – Income from
operations before income taxes adjusted for amortization,
restructuring costs, transaction and transformation, gains and
losses on disposals of operations and non-recurring items that, in
management’s judgment, significantly affect the period-over-period
assessment of operating results. Adjusted income before taxes is
used solely for the purpose of calculating the adjusted income tax
rate.
Adjusted Income Taxes/Tax Rate – Provision for
income taxes adjusted for taxes on certain items of amortization,
restructuring costs, transaction and transformation, gains and
losses on disposals of operations, the tax effects of internal
reorganizations, and non-recurring items that, in management’s
judgment, significantly affect the period-over-period assessment of
operating results, divided by adjusted income before taxes.
Adjusted income taxes is used solely for the purpose of calculating
the adjusted income tax rate. Management believes that the adjusted
income tax rate presents a rate that is more closely aligned to the
rate that we would incur if not for the reduction of pre-tax income
for the adjusted items and the tax effects of internal
reorganizations, which are not core to our current and future
operations.
Free Cash Flow – Cash flows from operating
activities less cash used to purchase fixed assets and software for
internal use. Free Cash Flow is a liquidity measure and is not
meant to represent residual cash flow available for discretionary
expenditures. Management believes that free cash flow presents the
core operating performance and cash-generating capabilities of our
business operations.
Free Cash Flow Margin – Free Cash Flow as a
percentage of revenue, which represents how much of revenue would
be realized on a cash basis. We consider this measure to be a
meaningful metric for tracking cash conversion on a year-over-year
basis due to the non-cash nature of our pension income, which is
included in our GAAP and Non-GAAP earnings metrics presented
herein.
These non-GAAP measures are not defined in the
same manner by all companies and may not be comparable to other
similarly titled measures of other companies. Non-GAAP measures
should be considered in addition to, and not as a substitute for,
the information contained within our condensed consolidated
financial statements.
WTW Forward-Looking
Statements
This document contains ‘forward-looking
statements’ within the meaning of Section 27A of the Securities Act
of 1933, and Section 21E of the Securities Exchange Act of 1934,
which are intended to be covered by the safe harbors created by
those laws. These forward-looking statements include information
about possible or assumed future results of our operations. All
statements, other than statements of historical facts, that address
activities, events, or developments that we expect or anticipate
may occur in the future, including such things as our outlook, 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 and acquisitions
and dispositions, including our completed sale of Willis Re to
Arthur J. Gallagher & Co. (‘Gallagher’) and transitional
arrangements related thereto; 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 including the multi-year operational
Transformation program; our recognition of future impairment
charges; and plans and references to future successes, including
our future financial and operating results, short-term and
long-term financial goals, plans, objectives, expectations and
intentions are forward-looking statements including with respect to
free cash flow generation, adjusted net revenue, adjusted operating
margin, and adjusted earnings per share. 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[A1] : our
ability to successfully establish, execute and achieve our global
business strategy as it evolves; our ability to fully realize
anticipated benefits of our growth strategy; our ability to achieve
our short-term and long-term financial goals, such as with respect
to our cash flow generation, and the timing with respect to such
achievement; the risks related to changes in general economic
(including a possible recession), business and political
conditions, including changes in the financial markets, inflation,
credit availability, increased interest rates and trade policies;
the risks to our short-term and long-term financial goals from any
of the risks or uncertainties set forth herein; the risks relating
to the adverse impacts of macroeconomic trends, including
inflation, changes in interest rates and trade policies, as well as
political events, trade and other international disputes, war, such
as the Russia-Ukraine and Israel-Hamas wars, terrorism, natural
disasters, public health issues and other business interruptions
on the global economy and capital markets, which could have a
material adverse effect on our business, financial condition,
results of operations, and long-term goals; the risks associated
with our withdrawal from our high margin businesses in Russia and
our ability to achieve cost-mitigation measures; our ability to
successfully hedge against fluctuations in foreign currency rates;
the risks relating to the adverse impacts of natural or man-made
disasters like health pandemics and other world health crises, on
the demand for our products and services, our cash flows and our
business operations; material interruptions to or loss of our
information processing capabilities, or failure to effectively
maintain and upgrade our information technology resources and
systems and related risks of cybersecurity breaches or incidents;
our ability to comply with complex and evolving regulations related
to data privacy, cybersecurity and artificial intelligence; the
risks relating to the transitional arrangements in effect
subsequent to our now-completed sale of Willis Re to Gallagher;
significant competition that we face and the potential for loss of
market share and/or profitability; the impact of seasonality and
differences in timing of renewals and non-recurring revenue
increases from disposals and book-of-business sales; the failure to
protect client data or breaches of information systems or
insufficient safeguards against cybersecurity breaches or
incidents; the risk of increased liability or new legal claims
arising from our new and existing products and services, and
expectations, intentions and outcomes relating to outstanding
litigation; the risk of substantial negative outcomes on existing
litigation or investigation matters; changes in the regulatory
environment in which we operate, including, among other risks, the
impacts of pending competition law and regulatory investigations;
various claims, government inquiries or investigations or the
potential for regulatory action; our ability to make divestitures
or acquisitions, including our ability to integrate or manage such
acquired businesses, as well as identify and successfully execute
on opportunities for strategic collaboration; our ability to
integrate direct-to-consumer sales and marketing solutions with our
existing offerings and solutions; our ability to successfully
manage ongoing organizational changes, including investments in
improving systems and processes; disasters or business continuity
problems; the ongoing impact of Brexit on our business and
operations; our ability to properly identify and manage conflicts
of interest; reputational damage, including from association with
third parties; reliance on third-party service providers and
suppliers; risks relating to changes in our management structures
and in senior leadership; the loss of key employees or a large
number of employees and rehiring rates; our ability to maintain our
corporate culture; doing business internationally, including the
impact of foreign currency exchange rates; compliance with
extensive government regulation; the risk of sanctions imposed by
governments, or changes to associated sanction regulations (such as
sanctions imposed on Russia) and related counter-sanctions; our
ability to effectively apply technology, data and analytics changes
for internal operations, maintaining industry standards and meeting
client preferences; changes and developments in the insurance
industry or the U.S. healthcare system, including those related to
Medicare and any legislative actions from the current U.S.
Congress, and any other changes and developments in legal,
economic, business or operational conditions impacting our Medicare
benefits businesses such as TRANZACT; the inability to protect our
intellectual property rights, or the potential infringement upon
the intellectual property rights of others; fluctuations in our
pension assets and liabilities and related changes in pension
income, including as a result of, related to, or derived from
movements in the interest rate environment, investment returns,
inflation, or changes in other assumptions that are used to
estimate our benefit obligations and its effect on adjusted
earnings per share; our capital structure, including indebtedness
amounts, the limitations imposed by the covenants in the documents
governing such indebtedness and the maintenance of the financial
and disclosure controls and procedures of each; our ability to
obtain financing on favorable terms or at all; adverse changes in
our credit ratings; the impact of recent or potential changes to
U.S. or foreign laws, and the enactment of additional, or the
revision of existing, state, federal, and/or foreign laws and
regulations, recent judicial decisions and development of case law,
other regulations and any policy changes and legislative actions,
including those that impact our effective tax rate; U.S. federal
income tax consequences to U.S. persons owning at least 10% of our
shares; changes in accounting principles, estimates or assumptions;
our recognition of future impairment charges; risks relating to or
arising from environmental, social and governance (‘ESG’)
practices; fluctuation in revenue against our relatively fixed or
higher than expected expenses; the risk that investment levels,
including cash spending, to achieve additional transformation
savings increase; the laws of Ireland being different from the laws
of the U.S. and potentially affording less protections to the
holders of our securities; and our holding company structure
potentially preventing us from being able to receive dividends or
other distributions in needed amounts from our subsidiaries. The
foregoing list of factors is not exhaustive and new factors may
emerge from time to time that could also affect actual performance
and results. For more information, please see Part I, Item 1A in
our Annual Report on Form 10-K, and our subsequent filings with the
SEC. Copies are available online at www.sec.gov or
www.wtwco.com.
Although we believe that the assumptions
underlying our forward-looking statements are reasonable, any of
these assumptions, and therefore also the forward-looking
statements based on these assumptions, could themselves prove to be
inaccurate. Given the significant uncertainties inherent in the
forward-looking statements included in this document, our inclusion
of this information is not a representation or guarantee by us that
our objectives and plans will be achieved.
Our forward-looking statements speak only as of
the date made, and we will not update these forward-looking
statements unless the securities laws require us to do so. With
regard to these risks, uncertainties and assumptions, the
forward-looking events discussed in this document may not occur,
and we caution you against unduly relying on these forward-looking
statements.
Contact
INVESTORS Claudia De La Hoz |
Claudia.Delahoz@wtwco.com
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WTW Supplemental Segment
Information (In millions of U.S. dollars) (Unaudited) |
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REVENUE |
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|
|
|
|
|
Health, Wealth & Career |
|
$ |
1,798 |
|
|
$ |
1,722 |
|
|
4 |
% |
|
1 |
% |
|
3 |
% |
|
0 |
% |
|
4 |
% |
Risk & Broking |
|
|
1,076 |
|
|
|
952 |
|
|
13 |
% |
|
1 |
% |
|
12 |
% |
|
0 |
% |
|
12 |
% |
Segment Revenue |
|
|
2,874 |
|
|
|
2,674 |
|
|
7 |
% |
|
1 |
% |
|
6 |
% |
|
0 |
% |
|
7 |
% |
Reimbursable expenses and other |
|
|
40 |
|
|
|
48 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
2,914 |
|
|
$ |
2,722 |
|
|
7 |
% |
|
1 |
% |
|
6 |
% |
|
0 |
% |
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
Components of Revenue Change(i) |
|
|
|
|
|
|
|
Less: |
|
|
|
Less: |
|
|
|
|
Years Ended December 31, |
|
|
As Reported |
|
Currency |
|
Constant Currency |
|
Acquisitions/ |
|
Organic |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
Impact |
|
Change |
|
Divestitures |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health, Wealth & Career |
|
$ |
5,582 |
|
|
$ |
5,287 |
|
|
6 |
% |
|
0 |
% |
|
6 |
% |
|
0 |
% |
|
6 |
% |
Risk & Broking |
|
|
3,735 |
|
|
|
3,460 |
|
|
8 |
% |
|
0 |
% |
|
8 |
% |
|
(1 |
)% |
|
10 |
% |
Segment Revenue |
|
|
9,317 |
|
|
|
8,747 |
|
|
7 |
% |
|
0 |
% |
|
7 |
% |
|
(1 |
)% |
|
7 |
% |
Reimbursable expenses and other |
|
|
166 |
|
|
|
119 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
9,483 |
|
|
$ |
8,866 |
|
|
7 |
% |
|
0 |
% |
|
7 |
% |
|
0 |
% |
|
8 |
% |
(i) Components of revenue change may not add due
to rounding.
BOOK-OF-BUSINESS SETTLEMENTS AND INTEREST
INCOME
|
|
Three Months Ended December 31, |
|
|
|
HWC |
|
|
R&B |
|
|
Corporate |
|
|
Total |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Book-of-business settlements |
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
14 |
|
|
$ |
11 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
15 |
|
|
$ |
11 |
|
Interest income |
|
|
7 |
|
|
|
4 |
|
|
|
27 |
|
|
|
10 |
|
|
|
5 |
|
|
|
13 |
|
|
|
39 |
|
|
|
27 |
|
Total interest and other income |
|
$ |
8 |
|
|
$ |
4 |
|
|
$ |
41 |
|
|
$ |
21 |
|
|
$ |
5 |
|
|
$ |
13 |
|
|
$ |
54 |
|
|
$ |
38 |
|
|
|
Years Ended December 31, |
|
|
|
HWC |
|
|
R&B |
|
|
Corporate |
|
|
Total |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Book-of-business settlements |
|
$ |
1 |
|
|
$ |
19 |
|
|
$ |
25 |
|
|
$ |
52 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26 |
|
|
$ |
71 |
|
Interest income |
|
|
25 |
|
|
|
8 |
|
|
|
79 |
|
|
|
25 |
|
|
|
41 |
|
|
|
22 |
|
|
|
145 |
|
|
|
55 |
|
Total interest and other income |
|
$ |
26 |
|
|
$ |
27 |
|
|
$ |
104 |
|
|
$ |
77 |
|
|
$ |
41 |
|
|
$ |
22 |
|
|
$ |
171 |
|
|
$ |
126 |
|
SEGMENT OPERATING INCOME
(i)
|
|
Three Months EndedDecember 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Health, Wealth & Career |
|
$ |
729 |
|
|
$ |
672 |
|
Risk & Broking |
|
|
354 |
|
|
|
269 |
|
Segment Operating Income |
|
$ |
1,083 |
|
|
$ |
941 |
|
|
|
Years Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Health, Wealth & Career |
|
$ |
1,565 |
|
|
$ |
1,382 |
|
Risk & Broking |
|
|
813 |
|
|
|
734 |
|
Segment Operating Income |
|
$ |
2,378 |
|
|
$ |
2,116 |
|
(i) Segment operating income excludes certain
costs, including amortization of intangibles, restructuring costs,
transaction and transformation expenses, certain litigation
provisions, and to the extent that the actual expense based upon
which allocations are made differs from the forecast/budget amount,
a reconciling item will be created between internally-allocated
expenses and the actual expenses reported for U.S. GAAP
purposes.
SEGMENT OPERATING MARGINS
|
|
Three Months EndedDecember 31, |
|
|
2023 |
|
2022 |
Health, Wealth & Career |
|
40.5% |
|
39.0% |
Risk & Broking |
|
32.9% |
|
28.3% |
|
|
Years EndedDecember 31, |
|
|
2023 |
|
2022 |
Health, Wealth & Career |
|
28.0% |
|
26.1% |
Risk & Broking |
|
21.8% |
|
21.2% |
RECONCILIATIONS OF SEGMENT OPERATING
INCOME TO INCOME FROM OPERATIONS BEFORE INCOME TAXES
|
|
Three Months EndedDecember 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Segment Operating Income |
|
$ |
1,083 |
|
|
$ |
941 |
|
Amortization |
|
|
(60 |
) |
|
|
(73 |
) |
Restructuring costs |
|
|
(38 |
) |
|
|
(28 |
) |
Transaction and transformation (i) |
|
|
(121 |
) |
|
|
(73 |
) |
Unallocated, net (ii) |
|
|
(85 |
) |
|
|
(59 |
) |
Income from Operations |
|
|
779 |
|
|
|
708 |
|
Interest expense |
|
|
(63 |
) |
|
|
(54 |
) |
Other income, net |
|
|
23 |
|
|
|
83 |
|
Income from continuing operations before income taxes |
|
$ |
739 |
|
|
$ |
737 |
|
|
|
Years Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Segment Operating Income |
|
$ |
2,378 |
|
|
$ |
2,116 |
|
Impairment (iii) |
|
|
— |
|
|
|
(81 |
) |
Amortization |
|
|
(263 |
) |
|
|
(312 |
) |
Restructuring costs |
|
|
(68 |
) |
|
|
(99 |
) |
Transaction and transformation (i) |
|
|
(386 |
) |
|
|
(181 |
) |
Unallocated, net(ii) |
|
|
(296 |
) |
|
|
(265 |
) |
Income from Operations |
|
|
1,365 |
|
|
|
1,178 |
|
Interest expense |
|
|
(235 |
) |
|
|
(208 |
) |
Other income, net |
|
|
149 |
|
|
|
288 |
|
Income from operations before income taxes |
|
$ |
1,279 |
|
|
$ |
1,258 |
|
(i) In 2023 and 2022, in addition to legal fees
and other transaction costs, includes primarily consulting fees and
compensation costs related to the Transformation program. (ii)
Includes certain costs, primarily related to corporate functions
which are not directly related to the segments, and certain
differences between budgeted expenses determined at the beginning
of the year and actual expenses that we report for U.S. GAAP
purposes. (iii) Represents the impairment related to the net assets
of our Russian business that are held outside of our Russian
entities.
|
WTW Reconciliations of Non-GAAP
Measures (In millions of U.S. dollars, except per share
data) (Unaudited) |
|
RECONCILIATIONS OF NET INCOME ATTRIBUTABLE TO WTW TO
ADJUSTED DILUTED EARNINGS PER SHARE |
|
|
|
Three Months Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net Income attributable to WTW |
|
$ |
622 |
|
|
$ |
588 |
|
Adjusted for certain items: |
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
— |
|
|
|
13 |
|
Amortization |
|
|
60 |
|
|
|
73 |
|
Restructuring costs |
|
|
38 |
|
|
|
28 |
|
Transaction and transformation |
|
|
121 |
|
|
|
73 |
|
Loss/(gain) on disposal of operations |
|
|
1 |
|
|
|
(18 |
) |
Tax effect on certain items listed above(i) |
|
|
(67 |
) |
|
|
(72 |
) |
Tax effect of internal reorganizations |
|
|
— |
|
|
|
4 |
|
Adjusted Net Income |
|
$ |
775 |
|
|
$ |
689 |
|
|
|
|
|
|
|
|
Weighted-average ordinary shares, diluted |
|
|
104 |
|
|
|
109 |
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ |
5.97 |
|
|
$ |
5.40 |
|
Adjusted for certain items:(ii) |
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
— |
|
|
|
0.12 |
|
Amortization |
|
|
0.58 |
|
|
|
0.67 |
|
Restructuring costs |
|
|
0.36 |
|
|
|
0.26 |
|
Transaction and transformation |
|
|
1.16 |
|
|
|
0.67 |
|
Loss/(gain) on disposal of operations |
|
|
0.01 |
|
|
|
(0.17 |
) |
Tax effect on certain items listed above(i) |
|
|
(0.64 |
) |
|
|
(0.66 |
) |
Tax effect of internal reorganizations |
|
|
— |
|
|
|
0.04 |
|
Adjusted Diluted Earnings Per
Share(ii) |
|
$ |
7.44 |
|
|
$ |
6.33 |
|
(i) The tax effect was calculated using an
effective tax rate for each item. (ii) Per share values and totals
may differ due to rounding.
|
|
Years EndedDecember 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net Income attributable to WTW |
|
$ |
1,055 |
|
|
$ |
1,009 |
|
Adjusted for certain items: |
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
— |
|
|
|
40 |
|
Impairment |
|
|
— |
|
|
|
81 |
|
Amortization |
|
|
263 |
|
|
|
312 |
|
Restructuring costs |
|
|
68 |
|
|
|
99 |
|
Transaction and transformation |
|
|
386 |
|
|
|
181 |
|
Gain on disposal of operations |
|
|
(43 |
) |
|
|
(7 |
) |
Tax effect on certain items listed above(i) |
|
|
(195 |
) |
|
|
(188 |
) |
Tax effect of the CARES Act |
|
|
— |
|
|
|
(24 |
) |
Tax effects of internal reorganizations |
|
|
2 |
|
|
|
4 |
|
Adjusted Net Income |
|
$ |
1,536 |
|
|
$ |
1,507 |
|
|
|
|
|
|
|
|
Weighted-average ordinary shares, diluted |
|
|
106 |
|
|
|
112 |
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
$ |
9.95 |
|
|
$ |
8.98 |
|
Adjusted for certain items:(ii) |
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
— |
|
|
|
0.36 |
|
Impairment |
|
|
— |
|
|
|
0.72 |
|
Amortization |
|
|
2.48 |
|
|
|
2.78 |
|
Restructuring costs |
|
|
0.64 |
|
|
|
0.88 |
|
Transaction and transformation |
|
|
3.64 |
|
|
|
1.61 |
|
Gain on disposal of operations |
|
|
(0.41 |
) |
|
|
(0.06 |
) |
Tax effect on certain items listed above(i) |
|
|
(1.84 |
) |
|
|
(1.67 |
) |
Tax effect of the CARES Act |
|
|
— |
|
|
|
(0.21 |
) |
Tax effects of internal reorganizations |
|
|
0.02 |
|
|
|
0.04 |
|
Adjusted Diluted Earnings Per
Share(ii) |
|
$ |
14.49 |
|
|
$ |
13.41 |
|
(i) The tax effect was calculated using an
effective tax rate for each item. (ii) Per share values and totals
may differ due to rounding.
RECONCILIATIONS OF NET INCOME TO ADJUSTED
EBITDA
|
|
Three Months Ended December 31, |
|
|
|
|
2023 |
|
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
623 |
|
|
21.4 |
% |
$ |
593 |
|
|
|
21.8 |
% |
Loss from discontinued operations, net of tax |
|
|
— |
|
|
|
|
13 |
|
|
|
|
Provision for income taxes |
|
|
116 |
|
|
|
|
131 |
|
|
|
|
Interest expense |
|
|
63 |
|
|
|
|
54 |
|
|
|
|
Depreciation |
|
|
58 |
|
|
|
|
64 |
|
|
|
|
Amortization |
|
|
60 |
|
|
|
|
73 |
|
|
|
|
Restructuring costs |
|
|
38 |
|
|
|
|
28 |
|
|
|
|
Transaction and transformation |
|
|
121 |
|
|
|
|
73 |
|
|
|
|
Loss/(gain) on disposal of operations |
|
|
1 |
|
|
|
|
(18 |
) |
|
|
|
Adjusted EBITDA and Adjusted EBITDA Margin |
|
$ |
1,080 |
|
|
37.1 |
% |
$ |
1,011 |
|
|
|
37.1 |
% |
|
|
Years Ended December 31, |
|
|
|
|
2023 |
|
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
1,064 |
|
|
11.2 |
% |
$ |
1,024 |
|
|
|
11.5 |
% |
Loss from discontinued operations, net of tax |
|
|
— |
|
|
|
|
40 |
|
|
|
|
Provision for income taxes |
|
|
215 |
|
|
|
|
194 |
|
|
|
|
Interest expense |
|
|
235 |
|
|
|
|
208 |
|
|
|
|
Impairment |
|
|
— |
|
|
|
|
81 |
|
|
|
|
Depreciation |
|
|
242 |
|
|
|
|
255 |
|
|
|
|
Amortization |
|
|
263 |
|
|
|
|
312 |
|
|
|
|
Restructuring costs |
|
|
68 |
|
|
|
|
99 |
|
|
|
|
Transaction and transformation |
|
|
386 |
|
|
|
|
181 |
|
|
|
|
Gain on disposal of operations |
|
|
(43 |
) |
|
|
|
(7 |
) |
|
|
|
Adjusted EBITDA and Adjusted EBITDA Margin |
|
$ |
2,430 |
|
|
25.6 |
% |
$ |
2,387 |
|
|
|
26.9 |
% |
RECONCILIATIONS OF INCOME FROM OPERATIONS
TO ADJUSTED OPERATING INCOME
|
|
Three Months Ended December 31, |
|
|
|
|
2023 |
|
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations and Operating margin |
|
$ |
779 |
|
|
26.7 |
% |
$ |
708 |
|
|
|
26.0 |
% |
Adjusted for certain items: |
|
|
|
|
|
|
|
|
|
|
Amortization |
|
|
60 |
|
|
|
|
73 |
|
|
|
|
Restructuring costs |
|
|
38 |
|
|
|
|
28 |
|
|
|
|
Transaction and transformation |
|
|
121 |
|
|
|
|
73 |
|
|
|
|
Adjusted operating income and Adjusted operating income
margin |
|
$ |
998 |
|
|
34.2 |
% |
$ |
882 |
|
|
|
32.4 |
% |
|
|
Years Ended December 31, |
|
|
|
|
2023 |
|
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations and Operating margin |
|
$ |
1,365 |
|
|
14.4 |
% |
$ |
1,178 |
|
|
|
13.3 |
% |
Adjusted for certain items: |
|
|
|
|
|
|
|
|
|
|
Impairment |
|
|
— |
|
|
|
|
81 |
|
|
|
|
Amortization |
|
|
263 |
|
|
|
|
312 |
|
|
|
|
Restructuring costs |
|
|
68 |
|
|
|
|
99 |
|
|
|
|
Transaction and transformation |
|
|
386 |
|
|
|
|
181 |
|
|
|
|
Adjusted operating income and Adjusted operating income
margin |
|
$ |
2,082 |
|
|
22.0 |
% |
$ |
1,851 |
|
|
|
20.9 |
% |
RECONCILIATIONS OF GAAP INCOME TAXES/TAX
RATE TO ADJUSTED INCOME TAXES/TAX RATE
|
|
Three Months Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Income from continuing operations before income
taxes |
|
$ |
739 |
|
|
$ |
737 |
|
|
|
|
|
|
|
|
Adjusted for certain items: |
|
|
|
|
|
|
Amortization |
|
|
60 |
|
|
|
73 |
|
Restructuring costs |
|
|
38 |
|
|
|
28 |
|
Transaction and transformation |
|
|
121 |
|
|
|
73 |
|
Loss/(gain) on disposal of operations |
|
|
1 |
|
|
|
(18 |
) |
Adjusted income before taxes |
|
$ |
959 |
|
|
$ |
893 |
|
|
|
|
|
|
|
|
Provision for income taxes |
|
$ |
116 |
|
|
$ |
131 |
|
Tax effect on certain items listed above(i) |
|
|
67 |
|
|
|
72 |
|
Tax effect of internal reorganizations |
|
|
— |
|
|
|
(4 |
) |
Adjusted income taxes |
|
$ |
183 |
|
|
$ |
199 |
|
|
|
|
|
|
|
|
U.S. GAAP tax rate |
|
|
15.7 |
% |
|
|
17.7 |
% |
Adjusted income tax rate |
|
|
19.1 |
% |
|
|
22.2 |
% |
|
|
Years Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Income from continuing operations before income
taxes |
|
$ |
1,279 |
|
|
$ |
1,258 |
|
|
|
|
|
|
|
|
Adjusted for certain items: |
|
|
|
|
|
|
Impairment |
|
|
— |
|
|
|
81 |
|
Amortization |
|
|
263 |
|
|
|
312 |
|
Restructuring costs |
|
|
68 |
|
|
|
99 |
|
Transaction and transformation |
|
|
386 |
|
|
|
181 |
|
Gain on disposal of operations |
|
|
(43 |
) |
|
|
(7 |
) |
Adjusted income before taxes |
|
$ |
1,953 |
|
|
$ |
1,924 |
|
|
|
|
|
|
|
|
Provision for income taxes |
|
$ |
215 |
|
|
$ |
194 |
|
Tax effect on certain items listed above(i) |
|
|
195 |
|
|
|
188 |
|
Tax effect of the CARES Act |
|
|
— |
|
|
|
24 |
|
Tax effect of internal reorganizations |
|
|
(2 |
) |
|
|
(4 |
) |
Adjusted income taxes |
|
$ |
408 |
|
|
$ |
402 |
|
|
|
|
|
|
|
|
U.S. GAAP tax rate |
|
|
16.8 |
% |
|
|
15.4 |
% |
Adjusted income tax rate |
|
|
20.9 |
% |
|
|
20.9 |
% |
(i) The tax effect was calculated using an
effective tax rate for each item.
RECONCILIATION OF CASH FLOWS FROM
OPERATING ACTIVITIES TO FREE CASH FLOW
|
|
Years Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities |
|
$ |
1,345 |
|
|
$ |
812 |
|
Less: Additions to fixed assets and software for internal use |
|
|
(153 |
) |
|
|
(138 |
) |
Free Cash Flow |
|
$ |
1,192 |
|
|
$ |
674 |
|
|
|
|
|
|
|
|
Revenue |
|
$ |
9,483 |
|
|
$ |
8,866 |
|
Free Cash Flow Margin |
|
|
12.6 |
% |
|
|
7.6 |
% |
|
|
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Statements of Income (In
millions of U.S. dollars, except per share data) (Unaudited) |
|
|
|
|
|
Three Months Ended December 31, |
|
|
Years Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
2,914 |
|
|
$ |
2,722 |
|
|
$ |
9,483 |
|
|
$ |
8,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of providing services |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
1,325 |
|
|
|
1,263 |
|
|
|
5,344 |
|
|
|
5,065 |
|
Other operating expenses |
|
|
533 |
|
|
|
513 |
|
|
|
1,815 |
|
|
|
1,776 |
|
Depreciation |
|
|
58 |
|
|
|
64 |
|
|
|
242 |
|
|
|
255 |
|
Amortization |
|
|
60 |
|
|
|
73 |
|
|
|
263 |
|
|
|
312 |
|
Restructuring costs |
|
|
38 |
|
|
|
28 |
|
|
|
68 |
|
|
|
99 |
|
Transaction and transformation |
|
|
121 |
|
|
|
73 |
|
|
|
386 |
|
|
|
181 |
|
Total costs of providing services |
|
|
2,135 |
|
|
|
2,014 |
|
|
|
8,118 |
|
|
|
7,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
779 |
|
|
|
708 |
|
|
|
1,365 |
|
|
|
1,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(63 |
) |
|
|
(54 |
) |
|
|
(235 |
) |
|
|
(208 |
) |
Other income, net |
|
|
23 |
|
|
|
83 |
|
|
|
149 |
|
|
|
288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
739 |
|
|
|
737 |
|
|
|
1,279 |
|
|
|
1,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
(116 |
) |
|
|
(131 |
) |
|
|
(215 |
) |
|
|
(194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS |
|
|
623 |
|
|
|
606 |
|
|
|
1,064 |
|
|
|
1,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX |
|
|
— |
|
|
|
(13 |
) |
|
|
— |
|
|
|
(40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
623 |
|
|
|
593 |
|
|
|
1,064 |
|
|
|
1,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable to non-controlling interests |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
(9 |
) |
|
|
(15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO WTW |
|
$ |
622 |
|
|
$ |
588 |
|
|
$ |
1,055 |
|
|
$ |
1,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per share |
|
$ |
6.02 |
|
|
$ |
5.54 |
|
|
$ |
10.01 |
|
|
$ |
9.36 |
|
Loss from discontinued operations per share |
|
|
— |
|
|
|
(0.12 |
) |
|
|
— |
|
|
|
(0.36 |
) |
Basic earnings per share |
|
$ |
6.02 |
|
|
$ |
5.42 |
|
|
$ |
10.01 |
|
|
$ |
9.00 |
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per share |
|
$ |
5.97 |
|
|
$ |
5.52 |
|
|
$ |
9.95 |
|
|
$ |
9.34 |
|
Loss from discontinued operations per share |
|
|
— |
|
|
|
(0.12 |
) |
|
|
— |
|
|
|
(0.36 |
) |
Diluted earnings per share |
|
$ |
5.97 |
|
|
$ |
5.40 |
|
|
$ |
9.95 |
|
|
$ |
8.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average ordinary shares, basic |
|
|
103 |
|
|
|
108 |
|
|
|
105 |
|
|
|
112 |
|
Weighted-average ordinary shares, diluted |
|
|
104 |
|
|
|
109 |
|
|
|
106 |
|
|
|
112 |
|
|
|
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Balance Sheets (In millions
of U.S. dollars, except share data) (Unaudited) |
|
|
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,424 |
|
|
$ |
1,262 |
|
Fiduciary assets |
|
|
9,073 |
|
|
|
11,772 |
|
Accounts receivable, net |
|
|
2,572 |
|
|
|
2,387 |
|
Prepaid and other current assets |
|
|
364 |
|
|
|
414 |
|
Total current assets |
|
|
13,433 |
|
|
|
15,835 |
|
Fixed assets, net |
|
|
720 |
|
|
|
718 |
|
Goodwill |
|
|
10,195 |
|
|
|
10,173 |
|
Other intangible assets, net |
|
|
2,016 |
|
|
|
2,273 |
|
Right-of-use assets |
|
|
565 |
|
|
|
586 |
|
Pension benefits assets |
|
|
588 |
|
|
|
827 |
|
Other non-current assets |
|
|
1,573 |
|
|
|
1,357 |
|
Total non-current assets |
|
|
15,657 |
|
|
|
15,934 |
|
TOTAL ASSETS |
|
$ |
29,090 |
|
|
$ |
31,769 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Fiduciary liabilities |
|
$ |
9,073 |
|
|
$ |
11,772 |
|
Deferred revenue and accrued expenses |
|
|
2,104 |
|
|
|
1,915 |
|
Current debt |
|
|
650 |
|
|
|
250 |
|
Current lease liabilities |
|
|
125 |
|
|
|
126 |
|
Other current liabilities |
|
|
678 |
|
|
|
716 |
|
Total current liabilities |
|
|
12,630 |
|
|
|
14,779 |
|
Long-term debt |
|
|
4,567 |
|
|
|
4,471 |
|
Liability for pension benefits |
|
|
563 |
|
|
|
480 |
|
Deferred tax liabilities |
|
|
542 |
|
|
|
748 |
|
Provision for liabilities |
|
|
365 |
|
|
|
357 |
|
Long-term lease liabilities |
|
|
592 |
|
|
|
620 |
|
Other non-current liabilities |
|
|
238 |
|
|
|
221 |
|
Total non-current liabilities |
|
|
6,867 |
|
|
|
6,897 |
|
TOTAL LIABILITIES |
|
|
19,497 |
|
|
|
21,676 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
EQUITY(i) |
|
|
|
|
|
|
Additional paid-in capital |
|
|
10,910 |
|
|
|
10,876 |
|
Retained earnings |
|
|
1,466 |
|
|
|
1,764 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(2,856 |
) |
|
|
(2,621 |
) |
Treasury shares, at cost, 17,519 shares in 2022 |
|
|
— |
|
|
|
(3 |
) |
Total WTW shareholders' equity |
|
|
9,520 |
|
|
|
10,016 |
|
Non-controlling interests |
|
|
73 |
|
|
|
77 |
|
Total Equity |
|
|
9,593 |
|
|
|
10,093 |
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
29,090 |
|
|
$ |
31,769 |
|
_____________(i) Equity includes (a) Ordinary
shares $0.000304635 nominal value; Authorized 1,510,003,775; Issued
102,538,072 (2023) and 106,756,364 (2022); Outstanding 102,538,072
(2023) and 106,756,364 (2022) and (b) Preference shares, $0.000115
nominal value; Authorized 1,000,000,000 and Issued none in 2023 and
2022.
|
|
WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
Condensed Consolidated Statements of Cash Flows
(In millions of U.S. dollars) (Unaudited) |
|
|
|
|
|
Years Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
NET INCOME |
|
$ |
1,064 |
|
|
$ |
1,024 |
|
Adjustments to reconcile net income to total net cash from
operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
242 |
|
|
|
255 |
|
Amortization |
|
|
263 |
|
|
|
312 |
|
Impairment |
|
|
— |
|
|
|
81 |
|
Non-cash restructuring charges |
|
|
38 |
|
|
|
71 |
|
Non-cash lease expense |
|
|
105 |
|
|
|
120 |
|
Net periodic benefit of defined benefit pension plans |
|
|
(26 |
) |
|
|
(153 |
) |
Provision for doubtful receivables from clients |
|
|
6 |
|
|
|
13 |
|
Benefit from deferred income taxes |
|
|
(109 |
) |
|
|
(50 |
) |
Share-based compensation |
|
|
125 |
|
|
|
99 |
|
Net (gain)/loss on disposal of operations |
|
|
(43 |
) |
|
|
59 |
|
Non-cash foreign exchange loss/(gain) |
|
|
20 |
|
|
|
(137 |
) |
Other, net |
|
|
31 |
|
|
|
6 |
|
Changes in operating assets and liabilities, net of effects from
purchase of subsidiaries: |
|
|
|
|
|
|
Accounts receivable |
|
|
(206 |
) |
|
|
(188 |
) |
Other assets |
|
|
(185 |
) |
|
|
(197 |
) |
Other liabilities |
|
|
16 |
|
|
|
(495 |
) |
Provisions |
|
|
4 |
|
|
|
(8 |
) |
Net cash from operating activities |
|
|
1,345 |
|
|
|
812 |
|
|
|
|
|
|
|
|
CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
|
|
|
|
Additions to fixed assets and software for internal use |
|
|
(153 |
) |
|
|
(138 |
) |
Capitalized software costs |
|
|
(89 |
) |
|
|
(66 |
) |
Acquisitions of operations, net of cash acquired |
|
|
(6 |
) |
|
|
(81 |
) |
Net proceeds/(payments) from sale of operations |
|
|
89 |
|
|
|
(59 |
) |
Cash and fiduciary funds transferred in sale of operations |
|
|
(922 |
) |
|
|
(29 |
) |
(Purchase)/sale of investments |
|
|
(4 |
) |
|
|
200 |
|
Net cash used in investing activities |
|
|
(1,085 |
) |
|
|
(173 |
) |
|
|
|
|
|
|
|
CASH FLOWS USED IN FINANCING ACTIVITIES |
|
|
|
|
|
|
Senior notes issued |
|
|
748 |
|
|
|
750 |
|
Debt issuance costs |
|
|
(7 |
) |
|
|
(5 |
) |
Repayments of debt |
|
|
(254 |
) |
|
|
(585 |
) |
Repurchase of shares |
|
|
(1,000 |
) |
|
|
(3,530 |
) |
Proceeds from issuance of shares |
|
|
— |
|
|
|
7 |
|
Net (payments)/proceeds from fiduciary funds held for clients |
|
|
(234 |
) |
|
|
354 |
|
Payments of deferred and contingent consideration related to
acquisitions |
|
|
(12 |
) |
|
|
(22 |
) |
Cash paid for employee taxes on withholding shares |
|
|
(26 |
) |
|
|
(34 |
) |
Dividends paid |
|
|
(352 |
) |
|
|
(369 |
) |
Acquisitions of and dividends paid to non-controlling
interests |
|
|
(63 |
) |
|
|
(11 |
) |
Net cash used in financing activities |
|
|
(1,200 |
) |
|
|
(3,445 |
) |
|
|
|
|
|
|
|
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(940 |
) |
|
|
(2,806 |
) |
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
|
11 |
|
|
|
(164 |
) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD
(i) |
|
|
4,721 |
|
|
|
7,691 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (i) |
|
$ |
3,792 |
|
|
$ |
4,721 |
|
_____________(i) The amounts of cash, cash
equivalents and restricted cash, their respective classification on
the condensed consolidated balance sheets, as well as their
respective portions of the increase or decrease in cash, cash
equivalents and restricted cash for each of the periods presented
have been included in the Supplemental Disclosures of Cash Flow
Information section.
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
|
|
Years Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,424 |
|
|
$ |
1,262 |
|
Fiduciary funds (included in fiduciary assets) |
|
|
2,368 |
|
|
|
3,459 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
3,792 |
|
|
$ |
4,721 |
|
|
|
|
|
|
|
|
Increase/(decrease) in cash, cash equivalents and other restricted
cash |
|
$ |
163 |
|
|
$ |
(3,177 |
) |
(Decrease)/increase in fiduciary funds |
|
|
(1,103 |
) |
|
|
371 |
|
Total (i) |
|
$ |
(940 |
) |
|
$ |
(2,806 |
) |
(i) Does not include the effect of exchange rate
changes on cash, cash equivalents and restricted cash.
Willis Towers Watson Pub... (NASDAQ:WTW)
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Willis Towers Watson Pub... (NASDAQ:WTW)
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De Mai 2023 até Mai 2024