WILLIS TOWERS WATSON PLC
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
WTW$328.86-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-22.
0000950170-24-018575
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0000950170-25-026278
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 242 previous paragraphs and 261 current paragraphs.
144 unchanged; 74 reworded; 41 added; 24 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 21 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
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.
Current report
For the year ended December 31, 2024, Impairment and Other (loss)/income, net include goodwill-related impairment expense and loss on disposal, respectively, associated with the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K).
Current report
Consolidated Revenue
Current report
Interest income did not contribute to organic change for the year ended December 31, 2024.
Current report
Segment Revenue and Segment Operating Income
Current report
Health, Wealth & Career
Current report
HWC segment operating income for the years ended December 31, 2024 and 2023 was $1.7 billion and $1.6 billion, respectively. HWC segment operating income increased due primarily to transformation savings as well as operating leverage driven by organic revenue growth and disciplined expense management.
Current report
R&B segment revenue for the years ended December 31, 2024 and 2023 was $4.0 billion and $3.7 billion, respectively. Corporate Risk & Broking had organic revenue growth primarily driven by higher levels of new business activity and strong client retention and renewal increases across all geographies. Insurance Consulting and Technology organic revenue growth was driven by strong software sales in Technology, which was partially offset by a decline in demand for discretionary services.
Current report
R&B segment operating income for the years ended December 31, 2024 and 2023 was $958 million and $813 million, respectively. R&B segment operating income increased due primarily to operating leverage driven by organic revenue growth and disciplined expense management, as well as transformation savings.
Current report
Other operating expenses for both years ended December 31, 2024 and 2023 were $1.8 billion, an increase of $18 million, or 1%. The increase was primarily due to higher non-income-related tax expense and higher travel and entertainment costs, partially offset by lower occupancy costs, primarily attributable to our Transformation program, and lower professional service expenses for the current year as compared to the prior year.
Current report
Impairment
Current report
Impairment for the year ended December 31, 2024 was $1.0 billion. Impairment is attributable to the goodwill impairment associated with our Benefits, Delivery and Administration (‘BDA’) reporting unit related to the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K).
Current report
Transaction and Transformation
Current report
Income from operations for the year ended December 31, 2024 was $627 million, compared to $1.4 billion for the year ended December 31, 2023, a decrease of $738 million. This decrease resulted from the impairment expense associated with the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K), higher salary expense and increased incentive and benefit costs in the current year, partially offset by higher revenue in the current year.
Current report
Other (Loss)/Income, Net
Current report
Other (loss)/income, net for the year ended December 31, 2024 was a loss of $260 million, compared to income of $149 million for the year ended December 31, 2023, a decrease of $409 million. This decrease was mostly due to the net loss on disposal in the current year, which is primarily attributable to the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K), partially offset by the recognition of a $750 million earnout related to the 2021 divestiture of our Willis Re business which is expected to be received during the first half of 2025 (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K).
Current report
Net (Loss)/Income Attributable to WTW
Current report
Net loss attributable to WTW for the year ended December 31, 2024 was $98 million, compared to income of $1.1 billion for the year ended December 31, 2023, a decrease of $1.2 billion. This decrease primarily resulted from the loss on disposal and impairment expense associated with the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K), higher salary expense and increased incentive and benefit costs in the current year, partially offset by the recognition of a $750 million earnout related to the 2021 divestiture of our Willis Re business which is expected to be received during the first half of 2025 (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K), and higher revenue in the current year.
Current report
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 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 and the receipt of the $750 million earnout related to the 2021 divestiture of Willis Re, which is expected to be collected during the first half of 2025. The use of these funds includes investments in the business for growth, scheduled debt repayments, share repurchases and dividend payments. During the fourth quarter of 2024, we re-entered the reinsurance broking space by making an initial investment in a reinsurance joint venture with Bain Capital. We hold a minority ownership interest in the joint venture and have an option to acquire a controlling interest in the future. Given the initial funding needs of a start-up venture, we expect that the investment will be a headwind for earnings until such time as the joint venture generates sufficient revenue to be profitable.
Current report
Distributable Profits
Current report
Tax considerations
Current report
Our cash and cash equivalents at December 31, 2024 and 2023 totaled $1.9 billion and $1.4 billion, respectively. The increase of $466 million in cash from December 31, 2023 to December 31, 2024 was due primarily to $1.5 billion of cash inflows from operating activities and proceeds of $619 million, primarily from the sale of TRANZACT, partially offset by $901 million of share repurchases, $354 million of dividend payments, $245 million of capital expenditures and capitalized software additions and net cash paid for acquisitions of $107 million.
Current report
Cash Flows From/(Used In) Investing Activities
Current report
The capitalization ratio increased from December 31, 2023 due primarily to $901 million of share repurchases during the year ended December 31, 2024 and the earnings loss in the current year attributable to the recognition of impairment expense and loss on disposal associated with the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K).
Current report
Impairment – Adjustment to remove the non-cash goodwill impairment associated with our BDA reporting unit related to the sale of our TRANZACT business.
Current report
(i)
Current report
Interest income did not contribute to organic change for the year ended December 31, 2024.
Current report
(i)
Current report
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. We believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.
Current report
(i)
Current report
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. We believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.
Current report
Adjusted EBITDA for the year ended December 31, 2024 was $2.7 billion, compared to $2.4 billion for the year ended December 31, 2023, an increase of $278 million. This increase resulted primarily from higher revenue, and increased margin expansion as a result of benefits recognized from our Transformation program, in the current year, partially offset by higher salary expense and increased incentive and benefit costs in the current year as compared to the prior year.
Current report
(i)
Current report
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. We believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.
Current report
(iii)
Current report
(i)
Current report
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. We believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.
Current report
(ii)
Current report
Our U.S. GAAP tax rates were 184.7% and 16.8% for the years ended December 31, 2024 and 2023, respectively. The current-year effective tax rate includes a $137 million tax benefit recognized on the sale of our TRANZACT business, partially offset with a $55 million provision for tax expense on the accrual for the Willis Re earnout and a $34 million provision for changes in uncertain tax positions.
Current report
The increase in free cash flow during the current year was primarily driven by operating margin expansion, partially offset by increased cash outflows related to transformation and discretionary compensation payments in the current year as compared to the prior year.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (24)
Previous report
Consolidated Revenue (Continuing Operations)
Previous report
Segment Revenue
Previous report
Health, Wealth & Career (‘HWC’)
Previous report
R&B segment revenue for the years ended December 31, 2023 and 2022 was $3.7 billion and $3.5 billion, respectively. Despite significant pressure from headwinds from book-of-business settlement revenue in the comparable period, Corporate Risk & Broking generated solid organic revenue growth driven by strong new business and improved client retention. Insurance Consulting and Technology had organic revenue growth from software sales and increased project revenue.
Previous report
Other operating expenses for both years ended December 31, 2023 and 2022 were $1.8 billion, an increase of $39 million, or 2%. The increase was primarily due to higher professional service and marketing-related expenses for the current year as compared to the prior-year, and higher travel and entertainment costs due to the continued increase of post-pandemic activity. These increases were partially offset by the absence of the prior-year asset impairments incurred, mostly accounts receivables, related to Russian insurance contracts placed by U.K. brokers in the London market (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K) and lower external labor fees in the current year.
Previous report
Transaction and Transformation, Net
Previous report
Income from operations for the year ended December 31, 2023 was $1.4 billion, compared to $1.2 billion for the year ended December 31, 2022, an increase of $187 million. This increase resulted primarily from higher revenue, the absence of the prior-year’s asset impairment expense discussed above and lower restructuring costs in the current year, partially offset by higher salary expense and incentive and benefit costs, increased transaction and transformation costs, higher professional service and marketing-related expenses and increased travel and entertainment costs in the current year as compared to the prior year.
Previous report
Other Income, Net
Previous report
Other income, net for the year ended December 31, 2023 was $149 million, compared to $288 million for the year ended December 31, 2022, a decrease of $139 million. Other income, net decreased due to lower pension income, which was primarily attributable to higher interest costs resulting from higher assumed discount rates in the current year, partially offset by greater gains on disposals in the current year.
Previous report
Loss from Discontinued Operations, Net of Tax
Previous report
The following table presents selected financial information as it relates to loss from discontinued operations, net of tax:
Previous report
Loss from discontinued operations, net of tax for the year ended December 31, 2022 was $40 million. The operations of our Willis Re business were reclassified to discontinued operations upon our entering into an agreement to sell the business during the third quarter of 2021 (see Note 3 - Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K). Loss from discontinued operations in the prior year are primarily attributable to the adjustments to the gain on disposal resulting from finalizing the value of the net assets transferred and the operations of the deferred closing entities and run-off activity associated with the divestiture.
Previous report
Net Income Attributable to WTW
Previous report
Net income attributable to WTW for the year ended December 31, 2023 was $1.1 billion, compared to $1.0 billion for the year ended December 31, 2022, an increase of $46 million. This increase resulted primarily from higher revenue, the absence of the prior-year’s asset impairment expense discussed above, higher gains on disposals and lower restructuring costs in the current year, partially offset by higher salary expense and incentive and benefit costs, increased transaction and transformation costs, lower pension income, higher professional service and marketing-related expenses and higher travel and entertainment costs in the current year.
Previous report
Before its disposal in 2021, Willis Re’s operating cash flows approximated its pre-tax income and any adjustments for working capital movements (see Note 3 — Acquisitions and Divestitures in Item 8 within this Annual Report on Form 10-K). Certain costs historically allocated to the Willis Re business are included in continuing operations and were retained following the disposal, but are being partially offset by reimbursements through the TSA. Costs incurred to service the TSA are expected to be reduced as part of the Company’s Transformation program as quickly as possible when the services are no longer required by Gallagher.
Previous report
Our cash and cash equivalents at December 31, 2023 and 2022 totaled $1.4 billion and $1.3 billion, respectively. The increase in cash from December 31, 2022 to December 31, 2023 was due primarily to increased cash flow from operations, driven by operating margin improvement and the non-recurrence of certain prior-year headwinds related to foreign currency, tax and discretionary compensation, partially offset by increased Transformation program costs and $1.0 billion of share repurchases.
Previous report
Cash flows used in investing activities of $173 million for the year ended December 31, 2022 consisted of capital expenditures and capitalized software additions of $204 million and net cash outflows for acquisitions and divestitures of $169 million, partially offset by sales of investments of $200 million.
Previous report
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.
Previous report
Impairment – Adjustment to remove the impairment related to the net assets of our Russian business that are held outside of our Russian entities.
Previous report
Tax effect of the Coronavirus Aid, Relief, and Economic Security (‘CARES’) Act – Relates to the incremental tax expense or benefit, primarily from the BEAT, generated from electing or changing elections of certain income tax provisions available under the CARES Act.
Previous report
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.
Previous report
Adjusted EBITDA for both the years ended December 31, 2023 and 2022 was $2.4 billion, an increase of $43 million. This increase was due primarily to higher revenue, partially offset by higher salary expense and incentive and benefit costs, lower pension income, higher professional service and marketing-related expenses and increased travel and entertainment costs in the current year as compared to the prior year.
Previous report
Our adjusted income tax rates were 20.9% for both years ended December 31, 2023 and 2022.
Previous report
The favorable movement in free cash flow and free cash flow margin during the current-year period was primarily due to operating margin improvement and the non-recurrence of prior-year headwinds, including realized losses on foreign currency hedges, payments made in the prior year for certain discretionary compensation and taxes for one-time gains recognized in connection with the Willis Re divestiture and the 2021 income receipt related to the Aon transaction termination. These tailwinds were partially offset by increased Transformation program-related costs.
Reworded paragraphs (74)
Previous wording
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 stabilizing market.
Current wording
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 stabilizing to softening market.
Previous wording
U.S. and global markets are continuing to experience volatility and disruption as a result of the ongoing Russia-Ukraine and Israel-Hamas wars. Although the length and impact of these ongoing situations are highly unpredictable, they have caused disruption in the global markets and could continue to lead to further market disruptions. The conflicts have contributed to negative impacts on and volatility of the global economy and capital markets, resulting in significant inflation and fluctuating interest rates in many of the markets in which we operate. This impacts not only the cost of and access to liquidity, but also other costs to run and invest in our business.
Current wording
U.S. and global markets are continuing to experience volatility and disruption as a result of the ongoing Russia-Ukraine and Middle East conflicts. Although the length and impact of these situations are highly unpredictable, the conflicts have contributed to negative impacts on and volatility of the global economy and capital markets, resulting in significant inflation and fluctuating interest rates in many of the markets in which we operate, and could continue to lead to further market disruptions. This impacts not only the cost of and access to liquidity, but also other costs to run and invest in our business.
Previous wording
Other global economic events, such as accommodative monetary and fiscal policy and geopolitical tensions beyond the ongoing wars, have also contributed to significant inflation across the globe. In particular, inflation in the United States, Europe, and other geographies has risen to levels not experienced in recent decades and we are seeing its impact on various aspects of our business. Moreover, U.S. and global economic conditions have created market uncertainty and volatility. Such general economic conditions, including inflation, stagflation, political volatility, costs of labor, cost of capital, interest rates, bank stability, credit availability, and tax rates, affect our operating and general and administrative expenses, and we have no control or limited ability to control such factors. These general economic conditions can also impact revenue, including revenue from customers as well as income from funds we hold on behalf of customers and pension-related income.
Current wording
Other global economic events, such as accommodative monetary and fiscal policy, supply chain disruptions and geopolitical tensions beyond the aforementioned ongoing wars, contributed to significant inflation across the globe. In particular, inflation in the United States, Europe and other geographies has risen to levels not experienced in recent decades, and while this has eased somewhat in the last year, we are seeing its impact on various aspects of our business. Moreover, U.S. and global economic conditions have created market uncertainty and volatility. Such general economic conditions, including inflation, stagflation, political volatility, costs of labor, cost of capital, interest rates, bank stability, credit availability and tax rates, affect our cost of doing 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, including revenue from customers as well as income from funds we hold on behalf of customers and pension-related income.
Previous wording
From time to time, our financial results have been (such as in 2021 and 2022), and may in the future be, negatively impacted by adverse workforce factors in a number of businesses, particularly commercial risk broking and health and benefits broking. Additionally, our performance has benefited (such as in 2021 and 2022), and may benefit in the future, from revenue from book sales, which is non-recurring revenue. The net impact of these factors, which caused our growth in 2021 and 2022 to be meaningfully slower than other competitors, has affected the comparability of our 2022 results against those in 2023 and could affect comparability of other future periods. See Part I, Item 1A Risk Factors in this Annual Report on Form 10-K for a discussion of risks that may affect our growth relative to expectations and our ability to compete.
Current wording
See Part I, Item 1A Risk Factors in this Annual Report on Form 10-K for a discussion of risks that may affect, among other things, our growth relative to expectation and our ability to achieve our objectives.
Previous wording
In the fourth quarter of 2021, the Company initiated a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align its real estate footprint to its new ways of working. During the fourth quarter of 2023, we revised the expected costs and savings under the program and we now expect the program to generate annual cost savings in excess of $425 million by the end of 2024. The program is expected to incur cumulative costs of approximately $995 million and capital expenditures of approximately $130 million, for a total investment of $1.125 billion. The main categories of charges have been in the following four areas:
Current wording
In the fourth quarter of 2024, the Company concluded a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align its real estate footprint to its new ways of working. The program incurred cumulative costs of $1.115 billion and capital expenditures of $130 million, resulting in a total investment of $1.245 billion. Although the Transformation program concluded in 2024, we expect additional cash outflows in 2025 from the settlement of accrued costs.
Previous wording
Certain costs under the Transformation program are accounted for under ASC 420, Exit or Disposal Cost Obligation, and are included as restructuring costs in the consolidated statements of comprehensive income. For the years ended December 31, 2023, 2022 and 2021, restructuring charges under our Transformation program totaled $68 million, $99 million and $26 million, respectively. Other costs incurred under the Transformation program are included in transaction and transformation, net and were $347 million and $136 million for the years ended December 31, 2023 and 2022, respectively.
Current wording
Certain costs under the Transformation program are accounted for under ASC 420, Exit or Disposal Cost Obligation, and are included as restructuring costs in the consolidated statements of comprehensive income. For the years ended December 31, 2024, 2023 and 2022, restructuring charges under our Transformation program totaled $61 million, $68 million and $99 million, respectively. Other costs incurred under the Transformation program are included in transaction and transformation and were $378 million, $347 million and $136 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Previous wording
From the actions taken during 2023, we have identified an additional $188 million of annualized run-rate savings during the year due to newly-realized opportunities and incremental sources of value. Since the inception of the program, we have identified $337 million of cumulative annualized run-rate savings, which overall are primarily attributable to process optimization. We began to recognize the benefits from the program during 2022.
Current wording
From the actions taken during 2024, we have identified an additional $136 million of annualized run-rate savings due to newly-realized opportunities and incremental sources of value. Since the inception of the program to its conclusion, we have identified $473 million of cumulative annualized run-rate savings, which overall were primarily attributable to process optimization. We began to recognize the benefits from the program during 2022.
Previous wording
For a discussion of material risks associated with the Transformation program, please see Part I, Item 1A Risk Factors -‘We may not be able to fully realize the anticipated benefits of our growth strategy or our expected product, service and transaction pipelines’ and other Risk Factors in this Annual Report on Form 10-K.
Current wording
For a discussion of material risks associated with the Transformation program, please see Part I, Item 1A Risk Factors under the heading‘We may not be able to fully realize the anticipated benefits of our strategy or our expected product, service and transaction pipelines’ and other Risk Factors in this Annual Report on Form 10-K.
Previous wording
These percentages exclude certain expenses 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. These items include amortization of intangible assets and transaction and transformation, net.
Current wording
These percentages exclude certain expenses 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. These items include amortization of intangible assets and transaction and transformation.
Previous wording
Revenue for the year ended December 31, 2023 was $9.5 billion, compared to $8.9 billion for the year ended December 31, 2022, an increase of $617 million, or 7%, on an as-reported basis. Adjusting for the impact of foreign currency and acquisitions and disposals, our organic revenue growth was 8% for the year ended December 31, 2023. The increases in both as-reported and organic revenue were driven by strong performances in both segments as well as the recognition of higher interest income that is not allocated to the segments.
Current wording
Revenue for the year ended December 31, 2024 was $9.9 billion, compared to $9.5 billion for the year ended December 31, 2023, an increase of $447 million, or 5%, on an as-reported basis. Adjusting for the impact of foreign currency and acquisitions and disposals, our organic revenue growth was 5% for the year ended December 31, 2024. The increases in both as-reported and organic revenue were driven by strong performances in both segments.
Previous wording
Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the year ended December 31, 2023, currency translation decreased our consolidated revenue by $10 million. The primary currencies driving this change were the Argentine Peso and Canadian Dollar.
Current wording
Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the year ended December 31, 2024, currency translation decreased our consolidated revenue by $19 million. The primary currency driving this change was the Argentine Peso.
Previous wording
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. See Note 5 – Segment Information within Item 8 of this Annual Report on Form 10-K for more information about how our segment revenue is calculated and a reconciliation to our GAAP results.
Current wording
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 Item 8 of this Annual Report on Form 10-K for more information about how our segment revenue and segment operating income is calculated and a reconciliation to our GAAP results.
Previous wording
The 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.
Current wording
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.
Previous wording
HWC is the larger of the two segments of the Company, generating approximately 60% of our segment revenue for the year ended December 31, 2023. 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.
Current wording
HWC is the larger of the two segments of the Company, generating approximately 59% of our segment revenue for the year ended December 31, 2024. 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.
Previous wording
HWC segment revenue for the years ended December 31, 2023 and 2022 was $5.6 billion and $5.3 billion, respectively. Organic growth was led by Benefits Delivery & Outsourcing, driven by higher volumes and placements of Medicare Advantage and life policies in Individual Marketplace and increased 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 and higher fees in Investments. Health had organic revenue growth driven by the continued expansion of our Global Benefits Management client portfolio, expanded consulting work and increased brokerage income. Career had organic revenue growth from increased compensation survey sales and executive compensation and other reward-based advisory services.
Current wording
HWC segment revenue for the years ended December 31, 2024 and 2023 was $5.8 billion and $5.6 billion, respectively. Organic revenue growth in Health was achieved across all regions with the continued expansion of our Global Benefits Management client portfolio being a meaningful driver. Our Wealth businesses generated organic revenue growth from our Investments-related solutions and higher levels of Retirement work. Career had organic revenue growth from increased survey sales, product revenue and advisory project work. Benefits Delivery & Outsourcing revenue was materially flat, as growth in Outsourcing from regulatory-driven project work and new-client wins was largely offset by decreased revenue in TRANZACT.
Previous wording
The 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.
Current wording
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.
Previous wording
R&B generated approximately 40% of our segment revenue for the year ended December 31, 2023. The segment comprises two primary businesses - Corporate Risk & Broking and Insurance Consulting and Technology.
Current wording
R&B generated approximately 41% of our segment revenue for the year ended December 31, 2024. The segment comprises two primary businesses - Corporate Risk & Broking and Insurance Consulting and Technology.
Previous wording
Costs of Providing Services (Continuing Operations)
Current wording
Costs of Providing Services
Previous wording
Total costs of providing services for the year ended December 31, 2023 were $8.1 billion, compared to $7.7 billion for the year ended December 31, 2022, an increase of $430 million, or 6%. See the following discussion for further details.
Current wording
Total costs of providing services for the year ended December 31, 2024 were $9.3 billion, compared to $8.1 billion for the year ended December 31, 2023, an increase of $1.2 billion, or 15%. This increase resulted from the impairment expense associated with the sale of our TRANZACT business in the current year (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K). See the following discussion for further details.
Previous wording
Salaries and benefits for the year ended December 31, 2023 were $5.3 billion, compared to $5.1 billion for the year ended December 31, 2022, an increase of $279 million, or 6%. 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 increased incentive and benefit costs for the year.
Current wording
Salaries and benefits for the year ended December 31, 2024 were $5.5 billion, compared to $5.3 billion for the year ended December 31, 2023, an increase of $158 million, or 3%. 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 incentive and benefit costs for the year.
Previous wording
Salaries and benefits, as a percentage of revenue, represented 56% and 57% for the years ended December 31, 2023 and 2022, respectively.
Current wording
Salaries and benefits, as a percentage of revenue, represented 55% and 56% for the years ended December 31, 2024 and 2023, respectively.
Previous wording
Other operating expenses include occupancy, legal, marketing, licenses, royalties, supplies, technology, printing and telephone costs, as well as insurance, including premiums on excess insurance and losses on professional liability claims, travel by colleagues, publications, professional subscriptions and development, recruitment, other professional fees and irrecoverable value-added and sales taxes. Additionally, other operating expenses included costs historically allocated to our Willis Re business which are partially offset by fees under a cost reimbursement Transition Services Agreement (‘TSA’; see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K) with Gallagher.
Current wording
Other operating expenses include occupancy, legal, marketing, licenses, royalties, supplies, technology, printing and telephone costs, as well as insurance, including premiums on excess insurance and losses on professional liability claims, travel by colleagues, publications, professional subscriptions and development, recruitment, other professional fees and irrecoverable value-added and sales taxes. Additionally, other operating expenses included costs historically allocated to our Willis Re business which are partially offset by fees under a cost reimbursement Transition Services Agreement (‘TSA’; see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K) with Arthur J. Gallagher & Co. (‘Gallagher’).
Previous wording
Depreciation represents the expense incurred over the useful lives of our tangible fixed assets and internally-developed software. Depreciation for the year ended December 31, 2023 was $242 million, compared to $255 million for the year ended December 31, 2022, a decrease of $13 million, or 5%. The year-over-year decrease was primarily due to a lower depreciable base of assets resulting from business disposals and a lower dollar value of assets placed in service during the past few years.
Current wording
Depreciation represents the expense incurred over the useful lives of our tangible fixed assets and internally-developed software. Depreciation for the year ended December 31, 2024 was $230 million, compared to $242 million for the year ended December 31, 2023, a decrease of $12 million, or 5%. The year-over-year decrease was primarily due to a lower depreciable base of assets resulting from disposals associated with our Transformation program and a lower dollar value of assets placed in service during the past few years.
Previous wording
Amortization represents the amortization of acquired intangible assets, including acquired internally-developed software. Amortization for the year ended December 31, 2023 was $263 million, compared to $312 million for the year ended December 31, 2022, a decrease of $49 million, or 16%. 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 will continue to decrease over time.
Current wording
Amortization represents the amortization of acquired intangible assets, including acquired internally-developed software. Amortization for the year ended December 31, 2024 was $226 million, compared to $263 million for the year ended December 31, 2023, a decrease of $37 million, or 14%. 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 will continue to decrease over time.
Previous wording
Restructuring costs for the years ended December 31, 2023 and 2022 were $68 million and $99 million, respectively. Restructuring costs in both the current year and prior year primarily related to the real estate rationalization component of the Transformation program commenced by the Company during the fourth quarter of 2021 (see Transformation Program within this section and Note 6 — Restructuring Costs within Item 8 of this Annual Report on Form 10-K).
Current wording
Restructuring costs for the years ended December 31, 2024 and 2023 were $61 million and $68 million, respectively. Restructuring costs in both the current year and prior year primarily related to the real estate rationalization component of the Transformation program commenced by the Company during the fourth quarter of 2021 and completed as of December 31, 2024 (see Transformation Program within this section and Note 6 — Restructuring Costs within Item 8 of this Annual Report on Form 10-K).
Previous wording
Transaction and transformation, net for the years ended December 31, 2023 was $386 million, compared to $181 million for the year ended December 31, 2022, an increase of $205 million. Transaction and transformation costs for the current year were higher primarily due to increased consulting and compensation costs related to our Transformation program (see ‘Transformation Program’ elsewhere within this Item 7) incurred in the current year as compared to the prior year.
Current wording
Transaction and transformation costs for the year ended December 31, 2024 were $409 million, compared to $386 million for the year ended December 31, 2023, an increase of $23 million. Transaction and transformation costs for the current year were higher primarily due to increased lease termination and compensation costs related to our Transformation program (see ‘Transformation Program’ elsewhere within this Item 7) incurred in the current year as compared to the prior year.
Previous wording
Interest expense for the years ended December 31, 2023 and 2022 was $235 million and $208 million, respectively. Interest expense, which is attributable primarily to our senior notes, increased by $27 million for the year ended December 31, 2023, which was primarily the result of higher levels of indebtedness in the current year.
Current wording
Interest expense for the years ended December 31, 2024 and 2023 was $263 million and $235 million, respectively. Interest expense, which is attributable primarily to our senior notes, increased by $28 million for the year ended December 31, 2024, which was primarily the result of a greater level of indebtedness in the current year and the higher interest rate-bearing senior notes issued by the Company during the last two years.
Previous wording
Other income, net includes gains and losses on disposals of operations, pension credits or expenses that are not attributable to service expense, interest in earnings of associates, foreign exchange gains and losses and other miscellaneous non-operating income and costs.
Current wording
Other (loss)/income, net includes gains and losses on disposals of operations, pension credits or expenses that are not attributable to service expense, interest in earnings of associates, foreign exchange gains and losses and other miscellaneous non-operating income and costs.
Previous wording
Provision for income taxes on continuing operations for the year ended December 31, 2023 was $215 million, compared to $194 million for the year ended December 31, 2022. The effective tax rates for the years ended December 31, 2023 and 2022 were 16.8% and 15.4%, respectively. These effective tax rates are calculated using extended values from our consolidated statements of comprehensive income and are therefore more precise tax rates than can be calculated from rounded values. The current year effective tax rate includes a $20 million deferred tax benefit related to changes in state apportionment and a $10 million deferred tax benefit related to the remeasurement of deferred tax assets and liabilities associated with the enactment of the Bermuda corporate income tax law. The prior-year effective tax rate includes a $34 million tax benefit associated with amending the Company’s U.S. federal income tax returns for tax years 2019 and 2020, primarily related to the reduction of Base Erosion and Anti Abuse Tax (‘BEAT’), and a $22 million income tax benefit associated with foreign exchange remeasurement on income tax account balances.
Current wording
Provision for income taxes for the year ended December 31, 2024 was $192 million, compared to $215 million for the year ended December 31, 2023. The effective tax rates for the years ended December 31, 2024 and 2023 were 184.7% and 16.8%, respectively. These effective tax rates are calculated using extended values from our consolidated statements of comprehensive income and are therefore more precise tax rates than can be calculated from rounded values. The current-year effective tax rate includes a $137 million tax benefit recognized on the sale of our TRANZACT business, partially offset with a $55 million provision for tax expense on the accrual for the Willis Re earnout and a $34 million provision for changes in uncertain tax positions. The prior-year effective tax rate includes a $20 million tax benefit related to changes in state apportionment and a $10 million deferred tax benefit related to the remeasurement of deferred tax assets and liabilities associated with the enactment of the Bermuda corporate income tax law.
Previous wording
In December 2022, E.U. member states formally adopted the E.U.’s Pillar Two Directive, which introduces a global corporate minimum tax of 15% for certain large multinational companies. For the rules to take effect, E.U. member states were required to enact domestic legislation by the end of 2023 to be effective January 1, 2024. While we do not anticipate that this will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate.
Current wording
In December 2022, E.U. member states formally adopted the E.U.’s Pillar Two Directive, which introduces a global corporate minimum tax of 15% for certain large multinational companies. For the rules to take effect, in 2023 many E.U. countries enacted the necessary legislation to implement Pillar Two, effective January 1, 2024. Ireland, in particular, enacted Pillar Two legislation by signing Finance (No. 2) Bill 2023 into law in December 2023. Other countries and territories have indicated they will introduce Pillar Two legislation beginning in 2025. The Pillar Two minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the current period. The Company continues to monitor evolving tax legislation as well as additional guidance to enacted legislation in the jurisdictions in which we operate.
Previous wording
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. Specific to WTW, following the reduced spending driven by the COVID-19 pandemic, spending on travel and associated expenses began to increase in 2022, and this trend continued during 2023 following the return to office for many companies increasing in-person interactions.
Current wording
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.
Previous wording
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, which includes all of the borrowing capacity available to draw against our $1.5 billion revolving credit facility, to meet our cash needs for the next twelve months, including investments in the business for growth and those related to our Transformation program, scheduled debt repayments, share repurchases and dividend payments. During the year ended December 31, 2023, we completed an offering of $750 million aggregate principal amount of 5.350% senior notes due 2033 and used the net proceeds to repay in full the $250 million aggregate principal amount and related accrued interest of 4.625% senior notes. The Company will use the remaining net proceeds for general corporate purposes. Additionally, during the year ended December 31, 2023 we repurchased $1.0 billion of shares, with remaining authorization to repurchase an additional $1.3 billion as of December 31, 2023.
Current wording
During the year ended December 31, 2024, we completed an offering of $750 million aggregate principal amount of 5.900% senior notes due 2054 and used the net proceeds to repay in full the $650 million aggregate principal amount and related accrued interest of the 3.600% senior notes that were due in 2024. The Company used the remaining net proceeds for general corporate purposes. Additionally, during the year ended December 31, 2024, we repurchased $901 million of shares, with remaining authorization to repurchase an additional $1.4 billion as of December 31, 2024.
Previous wording
We consider many factors, including market and economic conditions, applicable legal requirements and other business considerations, when considering whether to repurchase shares. The share repurchase program has no termination date and may be suspended or discontinued at any time.
Current wording
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 (as further described below under ‘Share Repurchase Program’) has no termination date and may be suspended or discontinued at any time.
Previous wording
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 regulatory matters, or future pension funding during periods of severe downturn in the capital markets.
Current wording
Events that could change the historical cash flow dynamics discussed above include significant changes in operating results, the receipt of significant earnout payments related to past divestitures, 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.
Previous wording
Distributable Profits -We are required under Irish law to have available ‘distributable profits’ to make share repurchases or pay dividends to shareholders. Distributable profits are created through the earnings of the Irish parent company and, among other methods, through intercompany dividends or a reduction in share capital approved by the High Court of Ireland. Distributable profits are not linked to a U.S. GAAP reported amount (e.g. retained earnings). At WTW's Annual General Meeting on June 8, 2022, its shareholders voted in favor of a proposed capital reduction. In accordance with Part 3 of the Irish Companies Act 2014 the Parent Company submitted an application to the High Court of Ireland to reduce its share premium account. On July 19, 2022, the High Court of Ireland approved a reduction of the share premium account of the Parent Company of approximately $9.5 billion, with the resulting balance being treated as realized profits of the Parent Company. The High Court of Ireland's order was registered with the Irish Companies Registration Office and became effective on July 21, 2022.
Current wording
We are required under Irish law to have available ‘distributable profits’ to make share repurchases or pay dividends to shareholders. Distributable profits are created through the earnings of the Irish parent company and, among other methods, through intercompany dividends or a reduction in share capital approved by the High Court of Ireland. Distributable profits are not linked to a U.S. GAAP reported amount (e.g. retained earnings). At WTW's Annual General Meeting on June 8, 2022, its shareholders voted in favor of a proposed capital reduction. In accordance with Part 3 of the Irish Companies Act 2014 the Parent Company submitted an application to the High Court of Ireland to reduce its share premium account. On July 19, 2022, the High Court of Ireland approved a reduction of the share premium account of the Parent Company of approximately $9.5 billion, with the resulting balance being treated as realized profits of the Parent Company. The High Court of Ireland's order was registered with the Irish Companies Registration Office and became effective on July 21, 2022. We believe that we will have sufficient distributable profits for the foreseeable future.
Previous wording
Tax considerations -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. We continue to have certain subsidiaries whose earnings have not been deemed permanently reinvested, 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.
Current wording
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. We continue to have certain subsidiaries whose earnings have not been deemed permanently reinvested, 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.
Previous wording
Included within cash and cash equivalents at December 31, 2023 and 2022 are amounts held for regulatory capital adequacy requirements, including $105 million and $99 million, respectively, held within our regulated U.K. entities.
Current wording
Included within cash and cash equivalents at December 31, 2024 and 2023 are amounts held for regulatory capital adequacy requirements, including $104 million and $105 million, respectively, within our regulated U.K. entities.
Previous wording
Cash flows from operating activities were $1.3 billion for 2023, compared to $812 million for 2022. The $1.3 billion net cash from operating activities for 2023 included net income of $1.1 billion and $652 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $371 million. The $652 million of favorable non-cash adjustments primarily includes depreciation, amortization and non-cash lease expense. The increase in cash flows from operating activities as compared to the prior year was due primarily to operating margin improvement and the non-recurrence of prior-year headwinds, including realized losses on foreign currency hedges, payments made in the prior year for certain discretionary compensation and taxes for one-time gains recognized in connection with the Willis Re divestiture and the 2021 income receipt related to the Aon plc (‘Aon’) transaction termination. These tailwinds were partially offset by increased Transformation program-related costs.
Current wording
Cash flows from operating activities were $1.5 billion for 2024, compared to $1.3 billion for 2023. The $1.5 billion net cash from operating activities for 2024 included a net loss of $88 million and $1.9 billion of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $326 million. The $1.9 billion of favorable non-cash adjustments primarily includes impairment, depreciation, amortization and non-cash lease expense. This increase in cash flows from operations as compared to the prior year was primarily driven by operating margin expansion, partially offset by increased cash outflows related to transformation and discretionary compensation payments in the current year as compared to the prior year.
Previous wording
Cash flows from operating activities of $812 million for 2022 included net income of $1.0 billion, and $676 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $888 million. The $676 million of favorable non-cash adjustments primarily includes depreciation, amortization and non-cash lease expense.
Current wording
Cash flows from operating activities of $1.3 billion for 2023 included net income of $1.1 billion and $652 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $371 million. The $652 million of favorable non-cash adjustments primarily includes depreciation, amortization and non-cash lease expense.
Previous wording
Cash Flows Used In Investing Activities
Current wording
Cash flows from investing activities for the year ended December 31, 2024 were $250 million compared to cash flows used in investing activities of $1.1 billion for the year ended December 31, 2023. The cash flows from investing activities in the current year consisted of proceeds of $619 million primarily from the sale of TRANZACT, partially offset by capital expenditures and capitalized software additions of $245 million and net cash paid for acquisitions of $107 million.
Showing the first 40 of 74 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The main categories of charges were in the following four areas:
Current report — wording carried from elsewhere
3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K for more information) and $242 million of capital expenditures and capitalized software additions.