(Mark One) | ||
þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended
September 30, 2011
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or
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||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ireland (Jurisdiction of incorporation or organization) |
98-0352587 (I.R.S. Employer Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
2
We, Us, Company,
Group, Willis, or Our
|
Willis Group Holdings and its subsidiaries. | |
Willis Group Holdings or Willis Group Holdings
plc
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Willis Group Holdings Public Limited Company, a company organized under the laws of Ireland. | |
shares
|
The ordinary shares of Willis Group Holdings Public Limited Company, nominal value $0.000115 per share. | |
HRH
|
Hilb Rogal & Hobbs Company. |
3
| the impact of any regional, national or global political, economic, business, competitive, market, environmental and regulatory conditions on our global business operations; |
| the impact of current financial market conditions on our results of operations and financial condition, including as a result of the impact of the volume of foreclosures, any insolvencies of or other difficulties experienced by our clients, insurance companies or financial institutions; |
| our ability to continue to manage our significant indebtedness; |
| our ability to compete effectively in our industry; |
| the impact of the 2011 Operational Review and our ability to implement and realize anticipated benefits of such review and the Willis Cause, or any other initiative we pursue; |
| material changes in commercial property and casualty markets generally or the availability of insurance products or changes in premiums resulting from a catastrophic event, such as a hurricane, or otherwise; |
| the volatility or declines in other insurance markets and premiums on which our commissions are based, but which we do not control; |
| our ability to retain key employees and clients and attract new business; |
| the timing or ability to carry out share repurchases, refinancings or take other steps to manage our capital and the limitations in our long-term debt agreements that may restrict our ability to take these actions; |
| any fluctuations in exchange and interest rates that could affect expenses and revenue; |
| rating agency actions that could inhibit our ability to borrow funds or the pricing thereof; |
| a significant decline in the value of investments that fund our pension plans or changes in our pension plan funding obligations; |
| our ability to achieve the expected strategic benefits of transactions; |
| our ability to receive dividends or other distributions in needed amounts from our subsidiaries; |
| changes in the tax or accounting treatment of our operations; |
| any potential impact from the US healthcare reform legislation; |
| the potential costs and difficulties in complying with a wide variety of foreign laws and regulations and any related changes, given the global scope of our operations; |
| our involvements in and the results of any regulatory investigations, legal proceedings and other contingencies; |
| risks associated with non-core operations including underwriting, advisory or reputational; |
| our exposure to potential liabilities arising from errors and omissions and other potential claims against us; and |
| the interruption or loss of our information processing systems or failure to maintain secure information systems. |
4
5
Three months ended |
Nine months ended |
|||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
Note | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
(millions, except per share data) | ||||||||||||||||||||
REVENUES
|
||||||||||||||||||||
Commissions and fees
|
$ | 755 | $ | 723 | $ | 2,609 | $ | 2,475 | ||||||||||||
Investment income
|
7 | 10 | 23 | 29 | ||||||||||||||||
Other income
|
| | 1 | | ||||||||||||||||
Total revenues
|
762 | 733 | 2,633 | 2,504 | ||||||||||||||||
EXPENSES
|
||||||||||||||||||||
Salaries and benefits
|
3 | (490 | ) | (462 | ) | (1,580 | ) | (1,404 | ) | |||||||||||
Other operating expenses
|
(147 | ) | (129 | ) | (464 | ) | (413 | ) | ||||||||||||
Depreciation expense
|
(17 | ) | (14 | ) | (56 | ) | (45 | ) | ||||||||||||
Amortization of intangible assets
|
(18 | ) | (22 | ) | (52 | ) | (64 | ) | ||||||||||||
Net gain (loss) on disposal of operations
|
| | 4 | (2 | ) | |||||||||||||||
Total expenses
|
(672 | ) | (627 | ) | (2,148 | ) | (1,928 | ) | ||||||||||||
OPERATING INCOME
|
90 | 106 | 485 | 576 | ||||||||||||||||
Make-whole on repurchase and redemption of senior notes and
write-off of unamortized debt issuance costs
|
14 | | | (171 | ) | | ||||||||||||||
Interest expense
|
(38 | ) | (40 | ) | (112 | ) | (124 | ) | ||||||||||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES
|
52 | 66 | 202 | 452 | ||||||||||||||||
Income taxes
|
4 | (2 | ) | (10 | ) | (34 | ) | (112 | ) | |||||||||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
50 | 56 | 168 | 340 | ||||||||||||||||
Interest in earnings of associates, net of tax
|
10 | 9 | 23 | 27 | ||||||||||||||||
NET INCOME
|
60 | 65 | 191 | 367 | ||||||||||||||||
Less: net income attributable to noncontrolling interests
|
| (1 | ) | (12 | ) | (10 | ) | |||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 60 | $ | 64 | $ | 179 | $ | 357 | ||||||||||||
EARNINGS PER SHARE BASIC AND DILUTED
|
||||||||||||||||||||
Basic earnings per share
|
5 | $ | 0.35 | $ | 0.38 | $ | 1.04 | $ | 2.10 | |||||||||||
Diluted earnings per share
|
5 | $ | 0.34 | $ | 0.37 | $ | 1.02 | $ | 2.09 | |||||||||||
CASH DIVIDENDS DECLARED PER SHARE
|
$ | 0.26 | $ | 0.26 | $ | 0.78 | $ | 0.78 | ||||||||||||
6
September 30, |
December 31, |
|||||||||||
Note | 2011 | 2010 | ||||||||||
(millions, except share data) | ||||||||||||
ASSETS
|
||||||||||||
CURRENT ASSETS
|
||||||||||||
Cash and cash equivalents
|
$ | 363 | $ | 316 | ||||||||
Accounts receivable, net
|
911 | 839 | ||||||||||
Fiduciary assets
|
10,090 | 9,569 | ||||||||||
Deferred tax assets
|
21 | 36 | ||||||||||
Other current assets
|
12 | 315 | 340 | |||||||||
Total current assets
|
11,700 | 11,100 | ||||||||||
NON-CURRENT ASSETS
|
||||||||||||
Fixed assets, net
|
387 | 381 | ||||||||||
Goodwill
|
10 | 3,297 | 3,294 | |||||||||
Other intangible assets, net
|
11 | 440 | 492 | |||||||||
Investments in associates
|
186 | 161 | ||||||||||
Deferred tax assets
|
5 | 7 | ||||||||||
Pension benefits asset
|
261 | 179 | ||||||||||
Other non-current assets
|
12 | 339 | 233 | |||||||||
Total non-current assets
|
4,915 | 4,747 | ||||||||||
TOTAL ASSETS
|
$ | 16,615 | $ | 15,847 | ||||||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Fiduciary liabilities
|
$ | 10,090 | $ | 9,569 | ||||||||
Deferred revenue and accrued expenses
|
287 | 298 | ||||||||||
Income taxes payable
|
38 | 57 | ||||||||||
Short-term debt and current portion of long-term debt
|
14 | 114 | 110 | |||||||||
Deferred tax liabilities
|
17 | 9 | ||||||||||
Other current liabilities
|
13 | 274 | 266 | |||||||||
Total current liabilities
|
10,820 | 10,309 | ||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||
Long-term debt
|
14 | 2,285 | 2,157 | |||||||||
Liability for pension benefits
|
128 | 164 | ||||||||||
Deferred tax liabilities
|
124 | 83 | ||||||||||
Provisions for liabilities
|
179 | 179 | ||||||||||
Other non-current liabilities
|
13 | 362 | 347 | |||||||||
Total non-current liabilities
|
3,078 | 2,930 | ||||||||||
Total liabilities
|
13,898 | 13,239 | ||||||||||
7
September 30, |
December 31, |
|||||||||||
Note | 2011 | 2010 | ||||||||||
(millions, except share data) | ||||||||||||
COMMITMENTS AND CONTINGENCIES
|
7 | |||||||||||
EQUITY
|
||||||||||||
Ordinary shares, $0.000115 nominal value; Authorized:
4,000,000,000; Issued 173,312,231 shares in 2011 and
170,883,865 shares in 2010
|
| | ||||||||||
Ordinary shares, 1 nominal value; Authorized: 40,000;
Issued 40,000 shares in 2011 and 2010
|
| | ||||||||||
Preference shares, $0.000115 nominal value; Authorized:
1,000,000,000; Issued nil shares in 2011 and 2010
|
| | ||||||||||
Additional paid-in capital
|
1,050 | 985 | ||||||||||
Retained earnings
|
2,180 | 2,136 | ||||||||||
Accumulated other comprehensive loss, net of tax
|
16 | (539 | ) | (541 | ) | |||||||
Treasury shares, at cost, 46,408 shares, $0.000115 nominal
value, in 2011 and 2010 and 40,000 shares, 1 nominal
value, in 2011 and 2010
|
(3 | ) | (3 | ) | ||||||||
Total Willis Group Holdings stockholders equity
|
17 | 2,688 | 2,577 | |||||||||
Noncontrolling interests
|
17 | 29 | 31 | |||||||||
Total equity
|
2,717 | 2,608 | ||||||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 16,615 | $ | 15,847 | ||||||||
8
Nine months ended |
||||||||||||
September 30, | ||||||||||||
Note | 2011 | 2010(i) | ||||||||||
(millions) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net income
|
$ | 191 | $ | 367 | ||||||||
Adjustments to reconcile net income to total net cash provided
by operating activities:
|
||||||||||||
Net (gain) loss on disposal of operations and fixed and
intangible assets
|
(5 | ) | 3 | |||||||||
Depreciation expense
|
56 | 45 | ||||||||||
Amortization of intangible assets
|
52 | 64 | ||||||||||
Provision for doubtful debts
|
2 | | ||||||||||
Provision for deferred income taxes
|
45 | 13 | ||||||||||
Excess tax benefits from share-based payment arrangements
|
(5 | ) | | |||||||||
Share-based compensation
|
33 | 34 | ||||||||||
Make-whole on repurchase and redemption of senior notes and
write-off of unamortized debt issuance costs
|
171 | | ||||||||||
Undistributed earnings of associates
|
(16 | ) | (22 | ) | ||||||||
Non-cash Venezuela currency devaluation
|
2 | | 12 | |||||||||
Effect of exchange rate changes on net income
|
6 | (1 | ) | |||||||||
Change in operating assets and liabilities, net of effects from
purchase of subsidiaries:
|
||||||||||||
Accounts receivable, net
|
(80 | ) | (43 | ) | ||||||||
Fiduciary assets
|
(517 | ) | (69 | ) | ||||||||
Fiduciary liabilities
|
517 | 69 | ||||||||||
Other assets
|
(162 | ) | (94 | ) | ||||||||
Other liabilities
|
(16 | ) | (102 | ) | ||||||||
Movement on provisions
|
| (28 | ) | |||||||||
Net cash provided by operating activities
|
272 | 248 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Proceeds on disposal of fixed and intangible assets
|
10 | 6 | ||||||||||
Additions to fixed assets
|
(71 | ) | (59 | ) | ||||||||
Acquisitions of subsidiaries, net of cash acquired
|
(5 | ) | (20 | ) | ||||||||
Acquisition of investments in associates
|
(2 | ) | (1 | ) | ||||||||
Investment in Trident V Parallel Fund, LP
|
(4 | ) | (2 | ) | ||||||||
Net cash used in investing activities
|
(72 | ) | (76 | ) | ||||||||
(i) | The 2010 Unaudited Condensed Consolidated Statement of Cash Flows has been recast to conform to the new balance sheet presentation. See Note 2 Basis of Presentation and Significant Accounting Policies for details. |
9
Nine months ended |
||||||||||||
September 30, | ||||||||||||
Note | 2011 | 2010(i) | ||||||||||
(millions) | ||||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS FROM OPERATING AND
INVESTING ACTIVITIES
|
200 | 172 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
(Repayment of) proceeds from draw down of revolving credit
facility
|
14 | (90 | ) | 95 | ||||||||
Senior notes issued
|
14 | 794 | | |||||||||
Debt issuance costs
|
(7 | ) | | |||||||||
Repayments of debt
|
14 | (582 | ) | (181 | ) | |||||||
Make-whole on repurchase and redemption of senior notes
|
14 | (158 | ) | | ||||||||
Proceeds from issue of shares
|
46 | 26 | ||||||||||
Excess tax benefits from share-based payment arrangements
|
5 | | ||||||||||
Dividends paid
|
(136 | ) | (132 | ) | ||||||||
Acquisition of noncontrolling interests
|
(9 | ) | (10 | ) | ||||||||
Dividends paid to noncontrolling interests
|
(13 | ) | (24 | ) | ||||||||
Net cash used in financing activities
|
(150 | ) | (226 | ) | ||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
50 | (54 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents
|
(3 | ) | (8 | ) | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
316 | 221 | ||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 363 | $ | 159 | ||||||||
(i) | The 2010 Unaudited Condensed Consolidated Statement of Cash Flows has been recast to conform to the new balance sheet presentation. See Note 2 Basis of Presentation and Significant Accounting Policies for details. |
10
1. | NATURE OF OPERATIONS |
| the Groups non-fiduciary balances; and |
| the further distinction between those assets and liabilities that are expected to be realized within or later than twelve months of the balance sheet date. |
11
2. | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) |
12
September 30, |
||||
2011 | ||||
(millions) | ||||
Balance at January 1, 2011
|
$ | | ||
Severance costs accrued
|
61 | |||
Cash payments
|
(41 | ) | ||
Foreign exchange
|
(1 | ) | ||
Balance at end of period
|
$ | 19 | ||
13
3. | SALARIES AND BENEFITS EXPENSE (Continued) |
Three months ended |
Nine months ended |
|||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions) | ||||||||||||||||
Cash retention awards made
|
$ | 2 | $ | 4 | $ | 208 | $ | 189 | ||||||||
Amortization of cash retention awards included in salaries and
benefits
|
48 | 28 | 136 | 88 |
Three months ended September 30, 2011 | ||||||||||||
Income |
Effective |
|||||||||||
before tax | Tax | tax rate | ||||||||||
(millions, except percentages) | ||||||||||||
Ordinary income taxed at estimated annual effective tax rate
|
$ | 52 | $ | (11 | ) | 22 | % | |||||
Tax adjustment relating to make-whole on repurchase and
redemption of senior notes and write-off of unamortized debt
issuance costs
|
| (1 | ) | | % | |||||||
Impact of reduction in UK tax rate on deferred tax balances
|
| 2 | | % | ||||||||
Benefit derived from the reduction in estimate of annual
effective tax rate applied to ordinary income of the prior two
quarters
|
| 8 | | % | ||||||||
As reported
|
$ | 52 | $ | (2 | ) | 4 | % | |||||
Nine months ended September 30, 2011 | ||||||||||||
Income |
Effective |
|||||||||||
before tax | Tax | tax rate | ||||||||||
(millions, except percentages) | ||||||||||||
Ordinary income taxed at estimated annual effective tax rate
|
$ | 369 | $ | (82 | ) | 22 | % | |||||
Items where tax effect is treated discretely:
|
||||||||||||
Make-whole on repurchase and redemption of senior notes and
write-off of unamortized debt issuance costs
|
(171 | ) | 46 | 27 | % | |||||||
Non-taxable gain on disposal of operations
|
4 | | | % | ||||||||
Impact of reduction in UK tax rate on deferred tax balances
|
| 2 | | % | ||||||||
As reported
|
$ | 202 | $ | (34 | ) | 17 | % | |||||
14
4. | INCOME TAXES (Continued) |
Three months ended |
Nine months ended |
|||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except per share data) | ||||||||||||||||
Net income attributable to Willis Group Holdings
|
$ | 60 | $ | 64 | $ | 179 | $ | 357 | ||||||||
Basic weighted average number of shares outstanding
|
173 | 170 | 172 | 170 | ||||||||||||
Dilutive effect of potentially issuable shares
|
3 | 1 | 3 | 1 | ||||||||||||
Diluted weighted average number of shares outstanding
|
176 | 171 | 175 | 171 | ||||||||||||
Basic earnings per share:
|
||||||||||||||||
Net income attributable to Willis Group Holdings shareholders
|
$ | 0.35 | $ | 0.38 | $ | 1.04 | $ | 2.10 | ||||||||
Dilutive effect of potentially issuable shares
|
(0.01 | ) | (0.01 | ) | (0.02 | ) | (0.01 | ) | ||||||||
Diluted earnings per share:
|
||||||||||||||||
Net income attributable to Willis Group Holdings shareholders
|
$ | 0.34 | $ | 0.37 | $ | 1.02 | $ | 2.09 | ||||||||
15
Three months ended September 30, | ||||||||||||||||||||||||
UK Pension |
US Pension |
Intl Pension |
||||||||||||||||||||||
Benefits | Benefits | Benefits | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Components of net periodic benefit cost:
|
||||||||||||||||||||||||
Service cost
|
$ | 8 | $ | 9 | $ | | $ | | $ | 2 | $ | 1 | ||||||||||||
Interest cost
|
27 | 25 | 10 | 11 | 1 | 2 | ||||||||||||||||||
Expected return on plan assets
|
(40 | ) | (35 | ) | (11 | ) | (11 | ) | (2 | ) | (1 | ) | ||||||||||||
Amortization of unrecognized prior service gain
|
(2 | ) | (1 | ) | | | | | ||||||||||||||||
Amortization of unrecognized actuarial loss
|
8 | 9 | 1 | 1 | | | ||||||||||||||||||
Net periodic benefit cost
|
$ | 1 | $ | 7 | $ | | $ | 1 | $ | 1 | $ | 2 | ||||||||||||
Nine months ended September 30, | ||||||||||||||||||||||||
UK Pension |
US Pension |
Intl Pension |
||||||||||||||||||||||
Benefits | Benefits | Benefits | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Components of net periodic benefit cost:
|
||||||||||||||||||||||||
Service cost
|
$ | 27 | $ | 27 | $ | | $ | | $ | 4 | $ | 4 | ||||||||||||
Interest cost
|
80 | 74 | 31 | 31 | 5 | 6 | ||||||||||||||||||
Expected return on plan assets
|
(121 | ) | (104 | ) | (34 | ) | (32 | ) | (6 | ) | (5 | ) | ||||||||||||
Amortization of unrecognized prior service gain
|
(4 | ) | (3 | ) | | | | | ||||||||||||||||
Amortization of unrecognized actuarial loss
|
23 | 27 | 3 | 2 | | 1 | ||||||||||||||||||
Net periodic benefit cost
|
$ | 5 | $ | 21 | $ | | $ | 1 | $ | 3 | $ | 6 | ||||||||||||
16
7. | COMMITMENTS AND CONTINGENCIES (Continued) |
17
7. | COMMITMENTS AND CONTINGENCIES (Continued) |
18
7. | COMMITMENTS AND CONTINGENCIES (Continued) |
19
7. | COMMITMENTS AND CONTINGENCIES (Continued) |
| Troice, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:09-CV-01274-N, was filed on July 2, 2009 in the U.S. District Court for the Northern District of Texas against Willis Group Holdings plc, Willis of Colorado, Inc. and a Willis associate, among others. On April 1, 2010, plaintiffs filed the operative Third Amended Class Action Complaint individually and on behalf of a putative, worldwide class of Stanford investors, adding Willis Limited as a defendant and alleging claims under Texas statutory and common law and seeking damages in excess of $1 billion, punitive damages and costs. On May 2, 2011, the defendants filed motions to dismiss the Third Amended Class Action Complaint, arguing, inter alia, that the plaintiffs claims are precluded by the Securities Litigation Uniform Standards Act of 1998 (SLUSA). |
| Ranni v. Willis of Colorado, Inc., et al., C.A. No. 09-22085, was filed on July 17, 2009 against Willis Group Holdings plc and Willis of Colorado, Inc. in the U.S. District Court for the Southern District of Florida. The complaint was filed on behalf of a putative class of Venezuelan and other South American Stanford investors and alleges claims under Section 10(b) of the Securities Exchange Act of 1934 (and Rule 10b-5 thereunder) and Florida statutory and common law and seeks damages in an amount to be determined at trial. On October 6, 2009, Ranni was transferred, for |
20
7. | COMMITMENTS AND CONTINGENCIES (Continued) |
consolidation or coordination with other Stanford-related actions (including Troice), to the Northern District of Texas by the U.S. Judicial Panel on Multidistrict Litigation (the JPML). The defendants have not yet responded to the complaint in Ranni. |
| Canabal, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:09-CV-01474-D, was filed on August 6, 2009 against Willis Group Holdings plc, Willis of Colorado, Inc. and the same Willis associate named as a defendant in Troice, among others, also in the Northern District of Texas. The complaint was filed individually and on behalf of a putative class of Venezuelan Stanford investors, alleged claims under Texas statutory and common law and sought damages in excess of $1 billion, punitive damages, attorneys fees and costs. On December 18, 2009, the parties in Troice and Canabal stipulated to the consolidation of those actions (under the Troice civil action number), and, on December 31, 2009, the plaintiffs in Canabal filed a notice of dismissal, dismissing the action without prejudice. |
| Rupert, et al. v. Winter, et al., Case No. 2009C115137, was filed on September 14, 2009 on behalf of 97 Stanford investors against Willis Group Holdings plc, Willis of Colorado, Inc. and the same Willis associate, among others, in Texas state court (Bexar County). The complaint alleges claims under the Securities Act of 1933, Texas and Colorado statutory law and Texas common law and seeks special, consequential and treble damages of more than $300 million, attorneys fees and costs. On October 20, 2009, certain defendants, including Willis of Colorado, Inc., (i) removed Rupert to the U.S. District Court for the Western District of Texas, (ii) notified the JPML of the pendency of this related action and (iii) moved to stay the action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. On April 1, 2010, the JPML issued a final transfer order for the transfer of Rupert to the Northern District of Texas, where it is currently pending. The defendants have not yet responded to the complaint in Rupert. |
| Casanova, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:10-CV-01862-O, was filed on September 16, 2010 on behalf of seven Stanford investors against Willis Group Holdings plc, Willis Limited, Willis of Colorado, Inc. and the same Willis associate, among others, also in the Northern District of Texas. The complaint alleges claims under Texas statutory and common law and seeks actual damages in excess of $5 million, punitive damages, attorneys fees and costs. The defendants have not yet responded to the complaint in Casanova. |
| Rishmague, et ano. v. Winter, et al., Case No. 2011CI02585, was filed on March 11, 2011 on behalf of two Stanford investors, individually and as representatives of certain trusts, against Willis Group Holdings plc, Willis of Colorado, Inc., Willis of Texas, Inc. and the same Willis associate, among others, in Texas state court (Bexar County). The complaint alleges claims under Texas and Colorado statutory law and Texas common law and seeks special, consequential and treble damages of more than $37 million and attorneys fees and costs. On April 11, 2011, certain defendants, including Willis of Colorado, Inc., (i) removed Rishmague to the Western District of Texas, (ii) notified the JPML of the pendency of this related action and (iii) moved to stay the action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. On August 8, 2011, the JPML issued a final transfer order for the transfer of Rishmague to the Northern District of Texas, where it is currently pending. The defendants have not yet responded to the complaint in Rishmague. |
21
7. | COMMITMENTS AND CONTINGENCIES (Continued) |
8. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
22
8. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) |
Notional |
Fair |
|||||||||
Amount(i) | value | |||||||||
(millions) | ||||||||||
US dollar
|
Receive fixed-pay variable | $ | 830 | $ | 13 | |||||
Pounds sterling
|
Receive fixed-pay variable | 243 | 3 | |||||||
Euro
|
Receive fixed-pay variable | 163 | 1 |
(i) | Notional amounts represent US dollar equivalents translated at the spot rate as of September 30, 2011. |
23
8. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) |
| from changes in the exchange rate between US dollars and pounds sterling as its London market operations earn the majority of their revenues in US dollars and incur expenses predominantly in pounds sterling, and may also hold a significant net sterling asset or liability position on the balance sheet. In addition, the London market operations earn significant revenues in Euros and Japanese yen; and |
| from the translation into US dollars of the net income and net assets of its foreign subsidiaries, excluding the London market operations which are US dollar denominated. |
| to the extent that forecast pound sterling expenses exceed pound sterling revenues, the Company limits its exposure to this exchange rate risk by the use of forward contracts matched to specific, clearly identified cash outflows arising in the ordinary course of business; |
| to the extent the UK operations earn significant revenues in Euros and Japanese yen, the Company limits its exposure to changes in the exchange rate between the US dollar and these currencies by the use of forward contracts matched to a percentage of forecast cash inflows in specific currencies and periods; and |
| to the extent that the net sterling asset or liability position in its London market operations relate to short-term cash flows, the Company limits its exposure by the use of forward purchases and sales. These forward purchases and sales are not effective hedges for accounting purposes. |
Fair |
||||||||
Sell(i) | value | |||||||
(millions) | ||||||||
US dollar
|
$ | 281 | $ | (1 | ) | |||
Euro
|
142 | 5 | ||||||
Japanese yen
|
58 | (6 | ) |
(i) | Foreign currency notional amounts are reported in US dollars translated at contracted exchange rates. |
24
8. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) |
Fair value | ||||||||||
Balance sheet |
September 30, |
December 31, |
||||||||
Derivative financial instruments designated as hedging instruments: | classification | 2011 | 2010 | |||||||
(millions) | ||||||||||
Assets:
|
||||||||||
Interest rate swaps (cash flow hedges)
|
Other assets | $ | 17 | $ | 17 | |||||
Interest rate swaps (fair value hedges)
|
Other assets | 25 | 14 | |||||||
Forward exchange contracts
|
Other assets | 9 | 16 | |||||||
Total derivatives designated as hedging instruments
|
$ | 51 | $ | 47 | ||||||
Liabilities:
|
||||||||||
Interest rate swaps (cash flow hedges)
|
Other liabilities | | 2 | |||||||
Forward exchange contracts
|
Other liabilities | 11 | 10 | |||||||
Total derivatives designated as hedging instruments
|
$ | 11 | $ | 12 | ||||||
25
8. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) |
Amount of |
||||||||||||||||
gain (loss) |
||||||||||||||||
Amount of |
recognized |
|||||||||||||||
gain (loss) |
in income |
|||||||||||||||
Amount of |
reclassified |
on derivative |
||||||||||||||
gain (loss) |
from |
(ineffective |
||||||||||||||
recognized |
accumulated |
Location of gain (loss) |
hedges and |
|||||||||||||
in OCI(i) |
Location of gain (loss) |
OCI(i)
into |
recognized in income |
ineffective |
||||||||||||
on derivative |
reclassified from |
income |
on derivative (ineffective |
element of |
||||||||||||
Derivatives in cash flow |
(effective |
accumulated
OCI(i)
into |
(effective |
hedges and ineffective |
effective |
|||||||||||
hedging relationships | element) | income (effective element) | element) | element of effective hedges) | hedges) | |||||||||||
(millions) | (millions) | (millions) | ||||||||||||||
Three months ended September 30, 2011
|
||||||||||||||||
Interest rate swaps
|
$ | 8 | Investment income | $ | (3 | ) | Other operating expenses | $ | | |||||||
Forward exchange contracts
|
4 | Other operating expenses | (5 | ) | Interest expense | (2 | ) | |||||||||
Total
|
$ | 12 | $ | (8 | ) | $ | (2 | ) | ||||||||
Three months ended September 30, 2010
|
||||||||||||||||
Interest rate swaps
|
$ | 7 | Investment income | $ | (7 | ) | Other operating expenses | $ | | |||||||
Forward exchange contracts
|
(3 | ) | Other operating expenses | 5 | Interest expense | 1 | ||||||||||
Total
|
$ | 4 | $ | (2 | ) | $ | 1 | |||||||||
Nine months ended September 30, 2011
|
||||||||||||||||
Interest rate swaps
|
$ | 12 | Investment income | $ | (11 | ) | Other operating expenses | $ | | |||||||
Forward exchange contracts
|
(1 | ) | Other operating expenses | (6 | ) | Interest expense | (1 | ) | ||||||||
Total
|
$ | 11 | $ | (17 | ) | $ | (1 | ) | ||||||||
Nine months ended September 30, 2010
|
||||||||||||||||
Interest rate swaps
|
$ | 18 | Investment income | $ | (20 | ) | Other operating expenses | $ | | |||||||
Forward exchange contracts
|
1 | Other operating expenses | 12 | Interest expense | 1 | |||||||||||
Total
|
$ | 19 | $ | (8 | ) | $ | 1 | |||||||||
(i) | OCI means other comprehensive income. |
26
8. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) |
Gain (loss) |
Ineffectiveness |
|||||||||||||
Gain (loss) |
recognized |
recognized in |
||||||||||||
Hedged item in fair value |
recognized |
for hedged |
interest |
|||||||||||
Derivatives in fair value hedging relationships | hedging relationship | for derivative | item | expense | ||||||||||
(millions) | ||||||||||||||
Three months ended September 30, 2011
|
||||||||||||||
Interest rate swaps
|
5.625% senior notes due 2015 | $ | 4 | $ | (6 | ) | $ | 2 | ||||||
Three months ended September 30, 2010
|
||||||||||||||
Interest rate swaps
|
5.625% senior notes due 2015 | $ | 10 | $ | (10 | ) | $ | | ||||||
Nine months ended September 30, 2011
|
||||||||||||||
Interest rate swaps
|
5.625% senior notes due 2015 | $ | 9 | $ | (10 | ) | $ | 1 | ||||||
Nine months ended September 30, 2010
|
||||||||||||||
Interest rate swaps
|
5.625% senior notes due 2015 | $ | 24 | $ | (24 | ) | $ | | ||||||
9. | FAIR VALUE MEASUREMENT |
September 30, 2011 | ||||||||||||||||
Quoted |
||||||||||||||||
prices in |
||||||||||||||||
active |
||||||||||||||||
markets |
Significant |
Significant |
||||||||||||||
for |
other |
other |
||||||||||||||
identical |
observable |
unobservable |
||||||||||||||
assets | inputs | inputs | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(millions) | ||||||||||||||||
Assets at fair value:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 363 | $ | | $ | | $ | 363 | ||||||||
Fiduciary fundsrestricted (included within Fiduciary
assets)
|
1,829 | | | 1,829 | ||||||||||||
Derivative financial instruments
|
| 51 | | 51 | ||||||||||||
Total assets
|
$ | 2,192 | $ | 51 | $ | | $ | 2,243 | ||||||||
Liabilities at fair value:
|
||||||||||||||||
Derivative financial instruments
|
$ | | $ | 11 | $ | | $ | 11 | ||||||||
Changes in fair value of hedged
debt(i)
|
| 22 | | 22 | ||||||||||||
Total liabilities
|
$ | | $ | 33 | $ | | $ | 33 | ||||||||
(i) | Changes in the fair value of the underlying hedged debt instrument since inception of the hedging relationship are included in long-term debt. |
27
9. | FAIR VALUE MEASUREMENT (Continued) |
December 31, 2010 | ||||||||||||||||
Quoted |
||||||||||||||||
prices in |
||||||||||||||||
active |
||||||||||||||||
markets |
Significant |
Significant |
||||||||||||||
for |
other |
other |
||||||||||||||
identical |
observable |
unobservable |
||||||||||||||
assets | inputs | inputs | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(millions) | ||||||||||||||||
Assets at fair value:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 316 | $ | | $ | | $ | 316 | ||||||||
Fiduciary fundsrestricted (included within Fiduciary
assets)
|
1,764 | | | 1,764 | ||||||||||||
Derivative financial instruments
|
| 47 | | 47 | ||||||||||||
Total assets
|
$ | 2,080 | $ | 47 | $ | | $ | 2,127 | ||||||||
Liabilities at fair value:
|
||||||||||||||||
Derivative financial instruments
|
$ | | $ | 12 | $ | | $ | 12 | ||||||||
Changes in fair value of hedged
debt(i)
|
| 12 | | 12 | ||||||||||||
Total liabilities
|
$ | | $ | 24 | $ | | $ | 24 | ||||||||
(i) | Changes in the fair value of the underlying hedged debt instrument since inception of the hedging relationship are included in long-term debt. |
September 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying |
Fair |
Carrying |
Fair |
|||||||||||||
amount | value | amount | value | |||||||||||||
(millions) | ||||||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 363 | $ | 363 | $ | 316 | $ | 316 | ||||||||
Fiduciary fundsrestricted (included within Fiduciary
assets)
|
1,829 | 1,829 | 1,764 | 1,764 | ||||||||||||
Derivative financial instruments
|
51 | 51 | 47 | 47 | ||||||||||||
Liabilities:
|
||||||||||||||||
Short-term debt
|
$ | 114 | $ | 114 | $ | 110 | $ | 110 | ||||||||
Long-term debt
|
2,285 | 2,410 | 2,157 | 2,450 | ||||||||||||
Derivative financial instruments
|
11 | 11 | 12 | 12 |
28
9. | FAIR VALUE MEASUREMENT (Continued) |
10. | GOODWILL |
North |
||||||||||||||||
Global | America | International | Total | |||||||||||||
(millions) | ||||||||||||||||
Balance at January 1, 2010
|
$ | 1,065 | $ | 1,780 | $ | 432 | $ | 3,277 | ||||||||
Purchase price allocation adjustments
|
| 6 | | 6 | ||||||||||||
Other
movements(i)
|
| (3 | ) | | (3 | ) | ||||||||||
Foreign exchange
|
(2 | ) | | 16 | 14 | |||||||||||
Balance at December 31, 2010
|
$ | 1,063 | $ | 1,783 | $ | 448 | $ | 3,294 | ||||||||
Acquisitions
|
| | 2 | 2 | ||||||||||||
Purchase price allocation adjustments
|
| | 2 | 2 | ||||||||||||
Other
movements(i)(ii)
|
60 | (1 | ) | (61 | ) | (2 | ) | |||||||||
Foreign exchange
|
| | 1 | 1 | ||||||||||||
Balance at September 30, 2011
|
$ | 1,123 | $ | 1,782 | $ | 392 | $ | 3,297 | ||||||||
(i) | North America $2 million (2010: $3 million) tax benefit arising on the exercise of fully vested HRH stock options which were issued as part of the acquisition of HRH in 2008. | |
(ii) | Effective January 1, 2011, the Company changed its internal reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global segment; and Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, goodwill of $60 million has been reallocated from the International segment into the Global segment for Global Markets International, and $1 million has been reallocated from the International segment into the North America segment for Mexico Retail. Goodwill has been reallocated between segments using the relative fair value allocation approach. |
11. | OTHER INTANGIBLE ASSETS, NET |
| Customer and Marketing Related, including: |
| client relationships; | |
| client lists; | |
| non-compete agreements; | |
| trade names; and |
| Contract based, Technology and Other includes all other purchased intangible assets. |
29
11. | OTHER INTANGIBLE ASSETS, NET (Continued) |
September 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Gross |
Net |
Gross |
Net |
|||||||||||||||||||||
carrying |
Accumulated |
carrying |
carrying |
Accumulated |
carrying |
|||||||||||||||||||
amount | amortization | amount | amount | amortization | amount | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Customer and Marketing Related:
|
||||||||||||||||||||||||
Client Relationships
|
$ | 696 | $ | (259 | ) | $ | 437 | $ | 695 | $ | (207 | ) | $ | 488 | ||||||||||
Client Lists
|
8 | (7 | ) | 1 | 9 | (7 | ) | 2 | ||||||||||||||||
Non-compete Agreements
|
36 | (36 | ) | | 36 | (36 | ) | | ||||||||||||||||
Trade Names
|
11 | (10 | ) | 1 | 11 | (10 | ) | 1 | ||||||||||||||||
Total Customer and Marketing Related
|
751 | (312 | ) | 439 | 751 | (260 | ) | 491 | ||||||||||||||||
Contract based, Technology and Other
|
4 | (3 | ) | 1 | 4 | (3 | ) | 1 | ||||||||||||||||
Total amortizable intangible assets
|
$ | 755 | $ | (315 | ) | $ | 440 | $ | 755 | $ | (263 | ) | $ | 492 | ||||||||||
Remainder of |
||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total | ||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
Amortization of intangible assets
|
$ | 17 | $ | 61 | $ | 53 | $ | 45 | $ | 38 | $ | 226 | $ | 440 | ||||||||||||||
30
12. | OTHER ASSETS |
September 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Other current assets
|
||||||||
Unamortized cash retention awards
|
$ | 132 | $ | 125 | ||||
Prepayments and accrued income
|
63 | 73 | ||||||
Derivatives
|
11 | 17 | ||||||
Debt issuance costs
|
8 | 8 | ||||||
Income tax receivable
|
66 | 69 | ||||||
Other receivables
|
35 | 48 | ||||||
Total other current assets
|
$ | 315 | $ | 340 | ||||
Other non-current assets
|
||||||||
Unamortized cash retention awards
|
$ | 111 | $ | 48 | ||||
Deferred compensation plan assets
|
111 | 114 | ||||||
Prepayments and accrued income
|
24 | | ||||||
Debt issuance costs
|
16 | 27 | ||||||
Derivatives
|
40 | 30 | ||||||
Income taxes receivable
|
11 | | ||||||
Other receivables
|
26 | 14 | ||||||
Total other non-current assets
|
$ | 339 | $ | 233 | ||||
Total other assets
|
$ | 654 | $ | 573 | ||||
31
13. | OTHER LIABILITIES |
September 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Other current liabilities
|
||||||||
Other taxes payable
|
$ | 48 | $ | 41 | ||||
Accounts payable
|
62 | 39 | ||||||
Accrued dividends payable
|
45 | 46 | ||||||
Accrued interest payable
|
7 | 21 | ||||||
Derivatives
|
7 | 6 | ||||||
Other payables
|
105 | 113 | ||||||
Total other current liabilities
|
$ | 274 | $ | 266 | ||||
Other non-current liabilities
|
||||||||
Incentives from lessors
|
$ | 161 | $ | 150 | ||||
Deferred compensation plan liability
|
111 | 120 | ||||||
Capital lease obligation
|
27 | 23 | ||||||
Derivatives
|
4 | 6 | ||||||
Other payables
|
59 | 48 | ||||||
Total other non-current liabilities
|
$ | 362 | $ | 347 | ||||
Total other liabilities
|
$ | 636 | $ | 613 | ||||
14. | DEBT |
September 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Current portion of
5-year term
loan facility
|
$ | 110 | $ | 110 | ||||
6.000% loan notes due 2012
|
4 | | ||||||
$ | 114 | $ | 110 | |||||
32
14. | DEBT (Continued) |
September 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(millions) | ||||||||
5-year term
loan facility
|
$ | 218 | $ | 301 | ||||
Revolving $300 million credit facility
|
| 90 | ||||||
6.000% loan notes due 2012
|
| 4 | ||||||
5.625% senior notes due 2015
|
350 | 350 | ||||||
Fair value adjustment on 5.625% senior notes due 2015
|
22 | 12 | ||||||
12.875% senior notes due 2016
|
| 500 | ||||||
4.125% senior notes due 2016
|
299 | | ||||||
6.200% senior notes due 2017
|
600 | 600 | ||||||
7.000% senior notes due 2019
|
300 | 300 | ||||||
5.750% senior notes due 2021
|
496 | | ||||||
$ | 2,285 | $ | 2,157 | |||||
15. | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
Nine months ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash (receipts) payments for income taxes, net
|
$ | (6 | ) | $ | 80 | |||
Cash payments for interest
|
120 | 141 | ||||||
Supplemental disclosures of non-cash flow investing and
financing activities:
|
||||||||
Write-off of unamortized debt issuance costs
|
$ | (13 | ) | $ | | |||
Acquisitions:
|
||||||||
Fair value of assets acquired
|
$ | 3 | $ | 2 | ||||
Less: Liabilities assumed
|
| | ||||||
Net assets acquired, net of cash acquired
|
$ | 3 | $ | 2 | ||||
33
16. | COMPREHENSIVE INCOME |
Three months ended |
Nine months ended |
|||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions) | (millions) | |||||||||||||||
Net income
|
$ | 60 | $ | 65 | $ | 191 | $ | 367 | ||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment (net of tax of $nil,
$nil, $nil and $nil)
|
(73 | ) | 30 | (8 | ) | (5 | ) | |||||||||
Pension funding adjustment (net of tax of $(5) million,
$(2) million, $(6) million and $(7) million)
|
19 | 7 | 14 | 19 | ||||||||||||
Net gain (loss) on derivative instruments (net of tax of
$(1) million, $(1) million, $2 million and
$(3) million)
|
3 | 1 | (4 | ) | 8 | |||||||||||
Other comprehensive income (net of tax of $(6) million,
$(3) million, $(4) million and $(10) million)
|
(51 | ) | 38 | 2 | 22 | |||||||||||
Comprehensive income
|
9 | 103 | 193 | 389 | ||||||||||||
Noncontrolling interest
|
| (1 | ) | (12 | ) | (10 | ) | |||||||||
Comprehensive income attributable to Willis Group Holdings
|
$ | 9 | $ | 102 | $ | 181 | $ | 379 | ||||||||
September 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Net foreign currency translation adjustment
|
$ | (60 | ) | $ | (52 | ) | ||
Pension funding adjustment
|
(489 | ) | (503 | ) | ||||
Net unrealized gain on derivative instruments
|
10 | 14 | ||||||
Accumulated other comprehensive loss, attributable to Willis
Group Holdings, net of tax
|
$ | (539 | ) | $ | (541 | ) | ||
34
17. | EQUITY AND NONCONTROLLING INTERESTS |
September 30, 2011 | September 30, 2010 | |||||||||||||||||||||||
Willis |
Willis |
|||||||||||||||||||||||
Group |
Group |
|||||||||||||||||||||||
Holdings |
Noncontrolling |
Total |
Holdings |
Noncontrolling |
Total |
|||||||||||||||||||
stockholders | interests | equity | stockholders | interests | equity | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,577 | $ | 31 | $ | 2,608 | $ | 2,180 | $ | 49 | $ | 2,229 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||
Net income
|
179 | 12 | 191 | 357 | 10 | 367 | ||||||||||||||||||
Other comprehensive income, net of tax
|
2 | | 2 | 22 | | 22 | ||||||||||||||||||
Comprehensive income
|
181 | 12 | 193 | 379 | 10 | 389 | ||||||||||||||||||
Dividends
|
(135 | ) | (13 | ) | (148 | ) | (133 | ) | (24 | ) | (157 | ) | ||||||||||||
Additional paid-in capital
|
65 | | 65 | 44 | | 44 | ||||||||||||||||||
Purchase of subsidiary shares from noncontrolling interests
|
| | | | (6 | ) | (6 | ) | ||||||||||||||||
Foreign currency translation
|
| (1 | ) | (1 | ) | | (1 | ) | (1 | ) | ||||||||||||||
Balance at end of period
|
$ | 2,688 | $ | 29 | $ | 2,717 | $ | 2,470 | $ | 28 | $ | 2,498 | ||||||||||||
September 30, |
September 30, |
|||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Net income attributable to Willis Group Holdings
|
$ | 179 | $ | 357 | ||||
Transfers from noncontrolling interest:
|
||||||||
Decrease in Willis Group Holdings paid-in capital for purchase
of noncontrolling interests
|
| (19 | ) | |||||
Net transfers to noncontrolling interests
|
| (19 | ) | |||||
Change from net income attributable to Willis Group Holdings and
transfers from noncontrolling interests
|
$ | 179 | $ | 338 | ||||
35
18. | SEGMENT INFORMATION |
(i) | costs of the holding company; | |
(ii) | foreign exchange loss from the devaluation of the Venezuelan currency; | |
(iii) | foreign exchange hedging activities, foreign exchange movements on the UK pension plan asset and foreign exchange gains and losses from currency purchases and sales; | |
(iv) | amortization of intangible assets; | |
(v) | gains and losses on the disposal of operations; | |
(vi) | significant legal and regulatory settlements which are managed centrally; and | |
(vii) | costs associated with the 2011 Operational Review. |
Three months ended September 30, 2011 | ||||||||||||||||||||||||||||
Interest in |
||||||||||||||||||||||||||||
Depreciation |
Earnings of |
|||||||||||||||||||||||||||
Commissions |
Investment |
Other |
Total |
and |
Operating |
Associates, |
||||||||||||||||||||||
and Fees | Income | Income | Revenues | Amortization | Income | net of tax | ||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
Global
|
$ | 236 | $ | 1 | $ | | $ | 237 | $ | 5 | $ | 53 | $ | | ||||||||||||||
North America
|
316 | 2 | | 318 | 8 | 62 | | |||||||||||||||||||||
International
|
203 | 4 | | 207 | 4 | 4 | 10 | |||||||||||||||||||||
Total Retail
|
519 | 6 | | 525 | 12 | 66 | 10 | |||||||||||||||||||||
Total Operating Segments
|
755 | 7 | | 762 | 17 | 119 | 10 | |||||||||||||||||||||
Corporate and
Other(ii)
|
| | | | 18 | (29 | ) | | ||||||||||||||||||||
Total Consolidated
|
$ | 755 | $ | 7 | $ | | $ | 762 | $ | 35 | $ | 90 | $ | 10 | ||||||||||||||
36
18. | SEGMENT INFORMATION (Continued) |
Three months ended September 30, 2010(i) | ||||||||||||||||||||||||||||
Interest in |
||||||||||||||||||||||||||||
Depreciation |
Earnings of |
|||||||||||||||||||||||||||
Commissions |
Investment |
Other |
Total |
and |
Operating |
Associates, |
||||||||||||||||||||||
and Fees | Income | Income | Revenues | Amortization | Income | net of tax | ||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
Global
|
$ | 210 | $ | 2 | $ | | $ | 212 | $ | 4 | $ | 49 | $ | | ||||||||||||||
North America
|
330 | 4 | | 334 | 5 | 71 | | |||||||||||||||||||||
International
|
183 | 4 | | 187 | 5 | 8 | 9 | |||||||||||||||||||||
Total Retail
|
513 | 8 | | 521 | 10 | 79 | 9 | |||||||||||||||||||||
Total Operating Segments
|
723 | 10 | | 733 | 14 | 128 | 9 | |||||||||||||||||||||
Corporate and
Other(ii)
|
| | | | 22 | (22 | ) | | ||||||||||||||||||||
Total Consolidated
|
$ | 723 | $ | 10 | $ | | $ | 733 | $ | 36 | $ | 106 | $ | 9 | ||||||||||||||
(i) | Effective January 1, 2011, the Company changed its internal reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, third quarter 2010 revenues of $31 million, previously allocated to our International segment, have been included in Global: $29 million; and North America: $2 million. Operating income of $13 million previously allocated to our International segment has been included in Global: $13 million; and North America: $nil. |
(ii) | Corporate and Other includes the following: |
Three months ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Amortization of intangible assets
|
$ | (18 | ) | $ | (22 | ) | ||
Foreign exchange hedging
|
3 | (2 | ) | |||||
Foreign exchange on the UK pension plan asset
|
(1 | ) | (4 | ) | ||||
Net gain on disposal of operations
|
| | ||||||
2011 Operational Review
|
(15 | ) | | |||||
Release of previously established reserve
|
| 7 | ||||||
Other(a)
|
2 | (1 | ) | |||||
Total Corporate and Other
|
$ | (29 | ) | $ | (22 | ) | ||
(a) | For the three months ended September 30, 2011, other includes $5 million from the release of funds related to potential legal liabilities |
Nine months ended September 30, 2011 | ||||||||||||||||||||||||||||
Interest in |
||||||||||||||||||||||||||||
Depreciation |
Earnings of |
|||||||||||||||||||||||||||
Commissions |
Investment |
Other |
Total |
and |
Operating |
Associates, |
||||||||||||||||||||||
and Fees | Income | Income | Revenues | Amortization | Income | net of tax | ||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
Global
|
$ | 865 | $ | 7 | $ | | $ | 872 | $ | 17 | $ | 317 | $ | | ||||||||||||||
North America
|
998 | 5 | 1 | 1,004 | 20 | 208 | | |||||||||||||||||||||
International
|
746 | 11 | | 757 | 14 | 146 | 23 | |||||||||||||||||||||
Total Retail
|
1,744 | 16 | 1 | 1,761 | 34 | 354 | 23 | |||||||||||||||||||||
Total Operating Segments
|
2,609 | 23 | 1 | 2,633 | 51 | 671 | 23 | |||||||||||||||||||||
Corporate and
Other(ii)
|
| | | | 57 | (186 | ) | | ||||||||||||||||||||
Total Consolidated
|
$ | 2,609 | $ | 23 | $ | 1 | $ | 2,633 | $ | 108 | $ | 485 | $ | 23 | ||||||||||||||
37
18. | SEGMENT INFORMATION (Continued) |
Nine months ended September 30, 2010(i) | ||||||||||||||||||||||||||||
Interest in |
||||||||||||||||||||||||||||
Depreciation |
Earnings of |
|||||||||||||||||||||||||||
Commissions |
Investment |
Other |
Total |
and |
Operating |
Associates, |
||||||||||||||||||||||
and Fees | Income | Income | Revenues | Amortization | Income | net of tax | ||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
Global
|
$ | 790 | $ | 7 | $ | | $ | 797 | $ | 13 | $ | 290 | $ | | ||||||||||||||
North America
|
1,023 | 12 | | 1,035 | 17 | 232 | | |||||||||||||||||||||
International
|
662 | 10 | | 672 | 15 | 136 | 27 | |||||||||||||||||||||
Total Retail
|
1,685 | 22 | | 1,707 | 32 | 368 | 27 | |||||||||||||||||||||
Total Operating Segments
|
2,475 | 29 | | 2,504 | 45 | 658 | 27 | |||||||||||||||||||||
Corporate and
Other(ii)
|
| | | | 64 | (82 | ) | | ||||||||||||||||||||
Total Consolidated
|
$ | 2,475 | $ | 29 | $ | | $ | 2,504 | $ | 109 | $ | 576 | $ | 27 | ||||||||||||||
(i) | Effective January 1, 2011, the Company changed its internal reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, total revenues for the nine months ended September 30, 2010 of $101 million, previously allocated to our International segment, have been included in Global: $94 million; and North America: $7 million. Operating income of $47 million previously allocated to our International segment has been included in Global: $47 million; and North America: $nil. |
(ii) | Corporate and Other includes the following: |
Nine months ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(millions) | ||||||||
Amortization of intangible assets
|
$ | (52 | ) | $ | (64 | ) | ||
Foreign exchange hedging
|
5 | (8 | ) | |||||
Foreign exchange on the UK pension plan asset
|
| 2 | ||||||
Net gain (loss) on disposal of operations
|
4 | (2 | ) | |||||
2011 Operational Review
|
(130 | ) | | |||||
Release of previously established legal reserve
|
| 7 | ||||||
FSA Regulatory settlement
|
(11 | ) | | |||||
Venezuela currency devaluation
|
| (12 | ) | |||||
Other(a)
|
(2 | ) | (5 | ) | ||||
Total Corporate and Other
|
$ | (186 | ) | $ | (82 | ) | ||
(a) | For the nine months ended September 30, 2011, other includes $11 million from the release of funds related to potential legal liabilities |
Three months ended |
Nine months ended |
|||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions) | ||||||||||||||||
Total consolidated operating income
|
$ | 90 | $ | 106 | $ | 485 | $ | 576 | ||||||||
Make-whole on repurchase and redemption of senior notes and
write-off of unamortized debt issuance costs
|
| | (171 | ) | | |||||||||||
Interest expense
|
(38 | ) | (40 | ) | (112 | ) | (124 | ) | ||||||||
Income before income taxes and interest in earnings of associates
|
$ | 52 | $ | 66 | $ | 202 | $ | 452 | ||||||||
38
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES |
(i) | Willis Group Holdings, which is a guarantor, on a parent company only basis; | |
(ii) | the Other Guarantors, which are all 100 percent directly or indirectly owned subsidiaries of the parent and are all direct or indirect parents of the issuer; | |
(iii) | the Issuer, Willis North America; | |
(iv) | Other, which are the non-guarantor subsidiaries, on a combined basis; | |
(v) | Consolidating adjustments; and | |
(vi) | the Consolidated Company. |
39
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Three months ended September 30, 2011 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
Consolidating |
||||||||||||||||||||||
Holdings | Guarantors | The Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
REVENUES
|
||||||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | | $ | 755 | $ | | $ | 755 | ||||||||||||
Investment income
|
| 2 | | 7 | (2 | ) | 7 | |||||||||||||||||
Other income
|
| | | | | | ||||||||||||||||||
Total revenues
|
| 2 | | 762 | (2 | ) | 762 | |||||||||||||||||
EXPENSES
|
||||||||||||||||||||||||
Salaries and benefits
|
| | | (493 | ) | 3 | (490 | ) | ||||||||||||||||
Other operating expenses
|
(9 | ) | 8 | (41 | ) | (101 | ) | (4 | ) | (147 | ) | |||||||||||||
Depreciation expense
|
| | (3 | ) | (14 | ) | | (17 | ) | |||||||||||||||
Amortization of intangible assets
|
| | | (18 | ) | | (18 | ) | ||||||||||||||||
Net gain on disposal of operations
|
| | | 1 | (1 | ) | | |||||||||||||||||
Total expenses
|
(9 | ) | 8 | (44 | ) | (625 | ) | (2 | ) | (672 | ) | |||||||||||||
OPERATING (LOSS) INCOME
|
(9 | ) | 10 | (44 | ) | 137 | (4 | ) | 90 | |||||||||||||||
Investment income from Group undertakings
|
| 726 | 60 | 80 | (866 | ) | | |||||||||||||||||
Interest expense
|
(11 | ) | (63 | ) | (39 | ) | (50 | ) | 125 | (38 | ) | |||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF
ASSOCIATES
|
(20 | ) | 673 | (23 | ) | 167 | (745 | ) | 52 | |||||||||||||||
Income taxes
|
5 | (3 | ) | 6 | (20 | ) | 10 | (2 | ) | |||||||||||||||
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
(15 | ) | 670 | (17 | ) | 147 | (735 | ) | 50 | |||||||||||||||
Interest in earnings of associates, net of tax
|
| | | 8 | 2 | 10 | ||||||||||||||||||
NET (LOSS) INCOME
|
(15 | ) | 670 | (17 | ) | 155 | (733 | ) | 60 | |||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | | | | | ||||||||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
75 | (605 | ) | 16 | | 514 | | |||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 60 | $ | 65 | $ | (1 | ) | $ | 155 | $ | (219 | ) | $ | 60 | ||||||||||
40
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Three months ended September 30, 2010 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
Consolidating |
||||||||||||||||||||||
Holdings | Guarantors | The Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
REVENUES
|
||||||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | | $ | 723 | $ | | $ | 723 | ||||||||||||
Investment income
|
| 2 | 1 | 9 | (2 | ) | 10 | |||||||||||||||||
Other income
|
| | | | | | ||||||||||||||||||
Total revenues
|
| 2 | 1 | 732 | (2 | ) | 733 | |||||||||||||||||
EXPENSES
|
||||||||||||||||||||||||
Salaries and benefits
|
| | | (463 | ) | 1 | (462 | ) | ||||||||||||||||
Other operating expenses
|
(227 | ) | 19 | (20 | ) | 81 | 18 | (129 | ) | |||||||||||||||
Depreciation expense
|
| | (3 | ) | (11 | ) | | (14 | ) | |||||||||||||||
Amortization of intangible assets
|
| | | (22 | ) | | (22 | ) | ||||||||||||||||
Net loss on disposal of operations
|
(347 | ) | | | (2,088 | ) | 2,435 | | ||||||||||||||||
Total expenses
|
(574 | ) | 19 | (23 | ) | (2,503 | ) | 2,454 | (627 | ) | ||||||||||||||
OPERATING (LOSS) INCOME
|
(574 | ) | 21 | (22 | ) | (1,771 | ) | 2,452 | 106 | |||||||||||||||
Investment income from Group undertakings
|
| 113 | 58 | 52 | (223 | ) | | |||||||||||||||||
Interest expense
|
| (109 | ) | (51 | ) | (63 | ) | 183 | (40 | ) | ||||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF
ASSOCIATES
|
(574 | ) | 25 | (15 | ) | (1,782 | ) | 2,412 | 66 | |||||||||||||||
Income taxes
|
| 13 | 11 | (4 | ) | (30 | ) | (10 | ) | |||||||||||||||
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
(574 | ) | 38 | (4 | ) | (1,786 | ) | 2,382 | 56 | |||||||||||||||
Interest in earnings of associates, net of tax
|
| | | 8 | 1 | 9 | ||||||||||||||||||
NET (LOSS) INCOME
|
(574 | ) | 38 | (4 | ) | (1,778 | ) | 2,383 | 65 | |||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | | 1 | (2 | ) | (1 | ) | ||||||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
638 | 56 | 26 | | (720 | ) | | |||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 64 | $ | 94 | $ | 22 | $ | (1,777 | ) | $ | 1,661 | $ | 64 | |||||||||||
41
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2011 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
Consolidating |
||||||||||||||||||||||
Holdings | Guarantors | The Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
REVENUES
|
||||||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | | $ | 2,609 | $ | | $ | 2,609 | ||||||||||||
Investment income
|
| 8 | 1 | 22 | (8 | ) | 23 | |||||||||||||||||
Other income
|
| | | 24 | (23 | ) | 1 | |||||||||||||||||
Total revenues
|
| 8 | 1 | 2,655 | (31 | ) | 2,633 | |||||||||||||||||
EXPENSES
|
||||||||||||||||||||||||
Salaries and benefits
|
| | | (1,609 | ) | 29 | (1,580 | ) | ||||||||||||||||
Other operating expenses
|
(8 | ) | 33 | (134 | ) | (354 | ) | (1 | ) | (464 | ) | |||||||||||||
Depreciation expense
|
| | (10 | ) | (46 | ) | | (56 | ) | |||||||||||||||
Amortization of intangible assets
|
| | | (57 | ) | 5 | (52 | ) | ||||||||||||||||
Net gain on disposal of operations
|
| | | 7 | (3 | ) | 4 | |||||||||||||||||
Total expenses
|
(8 | ) | 33 | (144 | ) | (2,059 | ) | 30 | (2,148 | ) | ||||||||||||||
OPERATING (LOSS) INCOME
|
(8 | ) | 41 | (143 | ) | 596 | (1 | ) | 485 | |||||||||||||||
Investment income from Group undertakings
|
35 | 944 | 233 | 113 | (1,325 | ) | | |||||||||||||||||
Make-whole on repurchase and redemption of senior notes and
write-off of unamortized debt issuance costs
|
| (171 | ) | | | | (171 | ) | ||||||||||||||||
Interest expense
|
(23 | ) | (188 | ) | (112 | ) | (258 | ) | 469 | (112 | ) | |||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF
ASSOCIATES
|
4 | 626 | (22 | ) | 451 | (857 | ) | 202 | ||||||||||||||||
Income taxes
|
7 | 42 | 20 | (109 | ) | 6 | (34 | ) | ||||||||||||||||
INCOME (LOSS) BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
11 | 668 | (2 | ) | 342 | (851 | ) | 168 | ||||||||||||||||
Interest in earnings of associates, net of tax
|
| | | 17 | 6 | 23 | ||||||||||||||||||
NET INCOME (LOSS)
|
11 | 668 | (2 | ) | 359 | (845 | ) | 191 | ||||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | | (12 | ) | | (12 | ) | ||||||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
168 | (472 | ) | (21 | ) | | 325 | | ||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 179 | $ | 196 | $ | (23 | ) | $ | 347 | $ | (520 | ) | $ | 179 | ||||||||||
42
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2010 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
Consolidating |
||||||||||||||||||||||
Holdings | Guarantors | The Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
REVENUES
|
||||||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | | $ | 2,475 | $ | | $ | 2,475 | ||||||||||||
Investment income
|
| 7 | 2 | 27 | (7 | ) | 29 | |||||||||||||||||
Other income
|
| | | | | | ||||||||||||||||||
Total revenues
|
| 7 | 2 | 2,502 | (7 | ) | 2,504 | |||||||||||||||||
EXPENSES
|
||||||||||||||||||||||||
Salaries and benefits
|
| | | (1,420 | ) | 16 | (1,404 | ) | ||||||||||||||||
Other operating expenses
|
338 | (7 | ) | (79 | ) | (649 | ) | (16 | ) | (413 | ) | |||||||||||||
Depreciation expense
|
| | (7 | ) | (38 | ) | | (45 | ) | |||||||||||||||
Amortization of intangible assets
|
| | | (64 | ) | | (64 | ) | ||||||||||||||||
Net (loss) gain on disposal of operations
|
(347 | ) | | | 347 | (2 | ) | (2 | ) | |||||||||||||||
Total expenses
|
(9 | ) | (7 | ) | (86 | ) | (1,824 | ) | (2 | ) | (1,928 | ) | ||||||||||||
OPERATING (LOSS) INCOME
|
(9 | ) | | (84 | ) | 678 | (9 | ) | 576 | |||||||||||||||
Investment income from Group undertakings
|
| 664 | 231 | 540 | (1,435 | ) | | |||||||||||||||||
Interest expense
|
| (320 | ) | (131 | ) | (274 | ) | 601 | (124 | ) | ||||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF
ASSOCIATES
|
(9 | ) | 344 | 16 | 944 | (843 | ) | 452 | ||||||||||||||||
Income taxes
|
| 9 | 20 | (123 | ) | (18 | ) | (112 | ) | |||||||||||||||
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
(9 | ) | 353 | 36 | 821 | (861 | ) | 340 | ||||||||||||||||
Interest in earnings of associates, net of tax
|
| | | 22 | 5 | 27 | ||||||||||||||||||
NET (LOSS) INCOME
|
(9 | ) | 353 | 36 | 843 | (856 | ) | 367 | ||||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | | (2 | ) | (8 | ) | (10 | ) | |||||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
366 | 9 | (4 | ) | | (371 | ) | | ||||||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 357 | $ | 362 | $ | 32 | $ | 841 | $ | (1,235 | ) | $ | 357 | |||||||||||
43
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
As at September 30, 2011 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
The |
Consolidating |
|||||||||||||||||||||
Holdings | Guarantors | Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
CURRENT ASSETS
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 2 | $ | | $ | 122 | $ | 239 | $ | | $ | 363 | ||||||||||||
Accounts receivable, net
|
| | | 884 | 27 | 911 | ||||||||||||||||||
Fiduciary assets
|
| | | 10,768 | (678 | ) | 10,090 | |||||||||||||||||
Deferred tax assets
|
| | | 21 | | 21 | ||||||||||||||||||
Other current assets
|
7 | 126 | 51 | 415 | (284 | ) | 315 | |||||||||||||||||
Total current assets
|
9 | 126 | 173 | 12,327 | (935 | ) | 11,700 | |||||||||||||||||
Investments in subsidiaries
|
(880 | ) | 3,952 | 1,445 | 3,854 | (8,371 | ) | | ||||||||||||||||
Amounts owed by (to) Group undertakings
|
4,396 | (5,085 | ) | 781 | (92 | ) | | | ||||||||||||||||
NON-CURRENT ASSETS
|
||||||||||||||||||||||||
Fixed assets, net
|
| | 58 | 330 | (1 | ) | 387 | |||||||||||||||||
Goodwill
|
| | | 1,697 | 1,600 | 3,297 | ||||||||||||||||||
Other intangible assets, net
|
| | | 456 | (16 | ) | 440 | |||||||||||||||||
Investments in associates
|
| | | (35 | ) | 221 | 186 | |||||||||||||||||
Deferred tax assets
|
| | | 6 | (1 | ) | 5 | |||||||||||||||||
Pension benefits asset
|
| | | 261 | | 261 | ||||||||||||||||||
Other non-current assets
|
6 | 147 | 49 | 137 | | 339 | ||||||||||||||||||
Total non-current assets
|
6 | 147 | 107 | 2,852 | 1,803 | 4,915 | ||||||||||||||||||
TOTAL ASSETS
|
$ | 3,531 | $ | (860 | ) | $ | 2,506 | $ | 18,941 | $ | (7,503 | ) | $ | 16,615 | ||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||||||||||||||
CURRENT LIABILITIES
|
||||||||||||||||||||||||
Fiduciary liabilities
|
$ | | $ | | $ | | $ | 10,768 | $ | (678 | ) | $ | 10,090 | |||||||||||
Deferred revenue and accrued expenses
|
1 | | | 286 | | 287 | ||||||||||||||||||
Income taxes payable
|
| 60 | | 101 | (123 | ) | 38 | |||||||||||||||||
Short-term debt and current portion of long-term debt
|
| | 110 | 4 | | 114 | ||||||||||||||||||
Deferred tax liabilities
|
| | | 17 | | 17 | ||||||||||||||||||
Other current liabilities
|
48 | 6 | 39 | 212 | (31 | ) | 274 | |||||||||||||||||
Total current liabilities
|
49 | 66 | 149 | 11,388 | (832 | ) | 10,820 | |||||||||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||||||||||||||
Long-term debt
|
794 | | 1,491 | | | 2,285 | ||||||||||||||||||
Liabilities for pension benefits
|
| | | 128 | | 128 | ||||||||||||||||||
Deferred tax liabilities
|
| 4 | 37 | 83 | | 124 | ||||||||||||||||||
Provisions for liabilities
|
| | | 182 | (3 | ) | 179 | |||||||||||||||||
Other non-current liabilities
|
| 9 | 10 | 343 | | 362 | ||||||||||||||||||
Total non-current liabilities
|
794 | 13 | 1,538 | 736 | (3 | ) | 3,078 | |||||||||||||||||
TOTAL LIABILITIES
|
$ | 843 | $ | 79 | $ | 1,687 | $ | 12,124 | $ | (835 | ) | $ | 13,898 | |||||||||||
EQUITY
|
||||||||||||||||||||||||
Total Willis Group Holdings stockholders equity
|
2,688 | (939 | ) | 819 | 6,788 | (6,668 | ) | 2,688 | ||||||||||||||||
Noncontrolling interests
|
| | | 29 | | 29 | ||||||||||||||||||
Total equity
|
2,688 | (939 | ) | 819 | 6,817 | (6,668 | ) | 2,717 | ||||||||||||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 3,531 | $ | (860 | ) | $ | 2,506 | $ | 18,941 | $ | (7,503 | ) | $ | 16,615 | ||||||||||
44
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
As at December 31, 2010 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
The |
Consolidating |
|||||||||||||||||||||
Holdings | Guarantors | Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
CURRENT ASSETS
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | | $ | | $ | 76 | $ | 240 | $ | | $ | 316 | ||||||||||||
Accounts receivable, net
|
2 | | | 809 | 28 | 839 | ||||||||||||||||||
Fiduciary assets
|
| | | 10,167 | (598 | ) | 9,569 | |||||||||||||||||
Deferred tax assets
|
| | 1 | 35 | | 36 | ||||||||||||||||||
Other current assets
|
| 23 | 57 | 293 | (33 | ) | 340 | |||||||||||||||||
Total current assets
|
2 | 23 | 134 | 11,544 | (603 | ) | 11,100 | |||||||||||||||||
Investments in subsidiaries
|
(1,039 | ) | 3,814 | 1,455 | 3,855 | (8,085 | ) | | ||||||||||||||||
Amounts owed by (to) Group undertakings
|
3,659 | (4,590 | ) | 1,002 | (71 | ) | | | ||||||||||||||||
NON-CURRENT ASSETS
|
||||||||||||||||||||||||
Fixed assets, net
|
| | 52 | 330 | (1 | ) | 381 | |||||||||||||||||
Goodwill
|
| | | 1,696 | 1,598 | 3,294 | ||||||||||||||||||
Other intangible assets, net
|
| | | 492 | | 492 | ||||||||||||||||||
Investments in associates
|
| | | (51 | ) | 212 | 161 | |||||||||||||||||
Deferred tax assets
|
| | | 7 | | 7 | ||||||||||||||||||
Pension benefits asset
|
| | | 179 | | 179 | ||||||||||||||||||
Other non-current assets
|
| 166 | 41 | 149 | (123 | ) | 233 | |||||||||||||||||
Total non-current assets
|
| 166 | 93 | 2,802 | 1,686 | 4,747 | ||||||||||||||||||
TOTAL ASSETS
|
$ | 2,622 | $ | (587 | ) | $ | 2,684 | $ | 18,130 | $ | (7,002 | ) | $ | 15,847 | ||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||||||||||||||
CURRENT LIABILITIES
|
||||||||||||||||||||||||
Fiduciary liabilities
|
$ | | $ | | $ | | $ | 10,167 | $ | (598 | ) | $ | 9,569 | |||||||||||
Deferred revenue and accrued expenses
|
1 | | | 297 | | 298 | ||||||||||||||||||
Income taxes payable
|
| | | 69 | (12 | ) | 57 | |||||||||||||||||
Short-term debt and current portion of long-term debt
|
| | 110 | | | 110 | ||||||||||||||||||
Deferred tax liabilities
|
| 3 | 1 | 5 | | 9 | ||||||||||||||||||
Other current liabilities
|
44 | 15 | 38 | 189 | (20 | ) | 266 | |||||||||||||||||
Total current liabilities
|
45 | 18 | 149 | 10,727 | (630 | ) | 10,309 | |||||||||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||||||||||||||
Long-term debt
|
| 500 | 1,653 | 4 | | 2,157 | ||||||||||||||||||
Liabilities for pension benefits
|
| | | 164 | | 164 | ||||||||||||||||||
Deferred tax liabilities
|
| 3 | 26 | 54 | | 83 | ||||||||||||||||||
Provisions for liabilities
|
| | | 183 | (4 | ) | 179 | |||||||||||||||||
Other non-current liabilities
|
| 10 | 16 | 321 | | 347 | ||||||||||||||||||
Total non-current liabilities
|
| 513 | 1,695 | 726 | (4 | ) | 2,930 | |||||||||||||||||
TOTAL LIABILITIES
|
$ | 45 | $ | 531 | $ | 1,844 | $ | 11,453 | $ | (634 | ) | $ | 13,239 | |||||||||||
EQUITY
|
||||||||||||||||||||||||
Total Willis Group Holdings stockholders equity
|
2,577 | (1,118 | ) | 840 | 6,646 | (6,368 | ) | 2,577 | ||||||||||||||||
Noncontrolling interests
|
| | | 31 | | 31 | ||||||||||||||||||
Total equity
|
2,577 | (1,118 | ) | 840 | 6,677 | (6,368 | ) | 2,608 | ||||||||||||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 2,622 | $ | (587 | ) | $ | 2,684 | $ | 18,130 | $ | (7,002 | ) | $ | 15,847 | ||||||||||
45
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2011 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
Consolidating |
||||||||||||||||||||||
Holdings | Guarantors | The Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
$ | (31 | ) | $ | 112 | $ | 19 | $ | 1,061 | $ | (889 | ) | $ | 272 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets
|
| | | 10 | | 10 | ||||||||||||||||||
Additions to fixed assets
|
| | (17 | ) | (54 | ) | | (71 | ) | |||||||||||||||
Acquisitions of subsidiaries, net of cash acquired
|
| | | (5 | ) | | (5 | ) | ||||||||||||||||
Acquisitions of investments in associates
|
| | | (2 | ) | | (2 | ) | ||||||||||||||||
Investment in Trident V Parallel Fund, LP
|
| | | (4 | ) | | (4 | ) | ||||||||||||||||
Net cash used in investing activities
|
| | (17 | ) | (55 | ) | | (72 | ) | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||||||||||||||
Repayments of revolving credit facility
|
| | (90 | ) | | | (90 | ) | ||||||||||||||||
Senior notes issued
|
794 | | | | | 794 | ||||||||||||||||||
Debt issuance costs
|
(7 | ) | | | | | (7 | ) | ||||||||||||||||
Repayments of debt
|
| (500 | ) | (82 | ) | | | (582 | ) | |||||||||||||||
Make-whole on repurchase and redemption of senior notes
|
| (158 | ) | | | | (158 | ) | ||||||||||||||||
Proceeds from issue of shares
|
46 | | | | | 46 | ||||||||||||||||||
Amounts owed by and to Group undertakings
|
(664 | ) | 554 | 216 | (106 | ) | | | ||||||||||||||||
Excess tax benefits from share-based payment arrangements
|
| | | 5 | | 5 | ||||||||||||||||||
Dividends paid
|
(136 | ) | | | (889 | ) | 889 | (136 | ) | |||||||||||||||
Acquisition of noncontrolling interests
|
| (8 | ) | | (1 | ) | | (9 | ) | |||||||||||||||
Dividends paid to noncontrolling interests
|
| | | (13 | ) | | (13 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities
|
33 | (112 | ) | 44 | (1,004 | ) | 889 | (150 | ) | |||||||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS
|
2 | | 46 | 2 | | 50 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
| | | (3 | ) | | (3 | ) | ||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
| | 76 | 240 | | 316 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 2 | $ | | $ | 122 | $ | 239 | $ | | $ | 363 | ||||||||||||
46
19. | FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2010(i) | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
The Other |
Consolidating |
||||||||||||||||||||||
Holdings | Guarantors | The Issuer | Other | adjustments | Consolidated | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
$ | (9 | ) | $ | 341 | $ | 15 | $ | 722 | $ | (821 | ) | $ | 248 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets
|
| | | 6 | | 6 | ||||||||||||||||||
Additions to fixed assets
|
| | (20 | ) | (39 | ) | | (59 | ) | |||||||||||||||
Acquisitions of subsidiaries, net of cash acquired
|
| | | (20 | ) | | (20 | ) | ||||||||||||||||
Investment in Trident V Parallel Fund, LP
|
| | | (2 | ) | | (2 | ) | ||||||||||||||||
Acquisitions of investments in associates
|
| | | (1 | ) | | (1 | ) | ||||||||||||||||
Net cash used in investing activities
|
| | (20 | ) | (56 | ) | | (76 | ) | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||||||||||||||
Proceeds from draw down of revolving credit facility
|
| | 95 | | | 95 | ||||||||||||||||||
Repayments of debt
|
| | (171 | ) | (10 | ) | | (181 | ) | |||||||||||||||
Proceeds from issue of shares
|
26 | | | | | 26 | ||||||||||||||||||
Amounts owed by (to) Group undertakings
|
71 | (209 | ) | 51 | 87 | | | |||||||||||||||||
Dividends paid
|
(88 | ) | (132 | ) | | (733 | ) | 821 | (132 | ) | ||||||||||||||
Acquisition of noncontrolling interests
|
| | | (10 | ) | | (10 | ) | ||||||||||||||||
Dividends paid to noncontrolling interests
|
| | | (24 | ) | | (24 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities
|
9 | (341 | ) | (25 | ) | (690 | ) | 821 | (226 | ) | ||||||||||||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
| | (30 | ) | (24 | ) | | (54 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
| | | (8 | ) | | (8 | ) | ||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
| | 104 | 117 | | 221 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | | $ | | $ | 74 | $ | 85 | $ | | $ | 159 | ||||||||||||
(i) | The 2010 Condensed Consolidating Statement of Cash Flows has been recast to conform to the new balance sheet presentation. See Note 2Basis of Presentation and Significant Accounting Policies for details |
47
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES |
(i) | Willis Group Holdings, which is the Parent Issuer; | |
(ii) | the Guarantors, which are all 100 percent directly or indirectly owned subsidiaries of the parent; | |
(iii) | Other, which are the non-guarantor subsidiaries, on a combined basis; | |
(iv) | Consolidating adjustments; and | |
(v) | the Consolidated Company. |
48
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Three months ended September 30, 2011 | ||||||||||||||||||||||||
Willis |
||||||||||||||||||||||||
Group |
||||||||||||||||||||||||
Holdings |
||||||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
REVENUES
|
||||||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | 755 | $ | | $ | 755 | ||||||||||||||
Investment income
|
| 2 | 7 | (2 | ) | 7 | ||||||||||||||||||
Other income
|
| | | | | |||||||||||||||||||
Total revenues
|
| 2 | 762 | (2 | ) | 762 | ||||||||||||||||||
EXPENSES
|
||||||||||||||||||||||||
Salaries and benefits
|
| | (493 | ) | 3 | (490 | ) | |||||||||||||||||
Other operating expenses
|
(9 | ) | (33 | ) | (101 | ) | (4 | ) | (147 | ) | ||||||||||||||
Depreciation expense
|
| (3 | ) | (14 | ) | | (17 | ) | ||||||||||||||||
Amortization of intangible assets
|
| | (18 | ) | | (18 | ) | |||||||||||||||||
Net gain on disposal
|
| | 1 | (1 | ) | | ||||||||||||||||||
Total expenses
|
(9 | ) | (36 | ) | (625 | ) | (2 | ) | (672 | ) | ||||||||||||||
OPERATING (LOSS) INCOME
|
(9 | ) | (34 | ) | 137 | (4 | ) | 90 | ||||||||||||||||
Investment income from Group undertakings
|
| 786 | 80 | (866 | ) | | ||||||||||||||||||
Interest expense
|
(11 | ) | (102 | ) | (50 | ) | 125 | (38 | ) | |||||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF
ASSOCIATES
|
(20 | ) | 650 | 167 | (745 | ) | 52 | |||||||||||||||||
Income taxes
|
5 | 3 | (20 | ) | 10 | (2 | ) | |||||||||||||||||
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
(15 | ) | 653 | 147 | (735 | ) | 50 | |||||||||||||||||
Interest in earnings of associates, net of tax
|
| | 8 | 2 | 10 | |||||||||||||||||||
NET (LOSS) INCOME
|
(15 | ) | 653 | 155 | (733 | ) | 60 | |||||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | | | | |||||||||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
75 | (588 | ) | | 513 | | ||||||||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 60 | $ | 65 | $ | 155 | $ | (220 | ) | $ | 60 | |||||||||||||
49
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Three months ended September 30, 2010 | ||||||||||||||||||||
Willis |
||||||||||||||||||||
Group |
||||||||||||||||||||
Holdings |
||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||
(millions) | ||||||||||||||||||||
REVENUES
|
||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | 723 | $ | | $ | 723 | ||||||||||
Investment income
|
| 3 | 9 | (2 | ) | 10 | ||||||||||||||
Other income
|
| | | | | |||||||||||||||
Total revenues
|
| 3 | 732 | (2 | ) | 733 | ||||||||||||||
EXPENSES
|
||||||||||||||||||||
Salaries and benefits
|
| | (463 | ) | 1 | (462 | ) | |||||||||||||
Other operating expenses
|
(227 | ) | (1 | ) | 81 | 18 | (129 | ) | ||||||||||||
Depreciation expense
|
| (3 | ) | (11 | ) | | (14 | ) | ||||||||||||
Amortization of intangible assets
|
| | (22 | ) | | (22 | ) | |||||||||||||
Net loss on disposal of operations
|
(347 | ) | | (2,088 | ) | 2,435 | | |||||||||||||
Total expenses
|
(574 | ) | (4 | ) | (2,503 | ) | 2,454 | (627 | ) | |||||||||||
OPERATING (LOSS) INCOME
|
(574 | ) | (1 | ) | (1,771 | ) | 2,452 | 106 | ||||||||||||
Investment income from Group undertakings
|
| 171 | 52 | (223 | ) | | ||||||||||||||
Interest expense
|
| (160 | ) | (63 | ) | 183 | (40 | ) | ||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF
ASSOCIATES
|
(574 | ) | 10 | (1,782 | ) | 2,412 | 66 | |||||||||||||
Income taxes
|
| 24 | (4 | ) | (30 | ) | (10 | ) | ||||||||||||
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
(574 | ) | 34 | (1,786 | ) | 2,382 | 56 | |||||||||||||
Interest in earnings of associates, net of tax
|
| | 8 | 1 | 9 | |||||||||||||||
NET (LOSS) INCOME
|
(574 | ) | 34 | (1,778 | ) | 2,383 | 65 | |||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | 1 | (2 | ) | (1 | ) | |||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
638 | 60 | | (698 | ) | | ||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 64 | $ | 94 | $ | (1,777 | ) | $ | 1,683 | $ | 64 | |||||||||
50
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2011 | ||||||||||||||||||||
Willis |
||||||||||||||||||||
Group |
||||||||||||||||||||
Holdings |
||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||
(millions) | ||||||||||||||||||||
REVENUES
|
||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | 2,609 | $ | | $ | 2,609 | ||||||||||
Investment income
|
| 9 | 22 | (8 | ) | 23 | ||||||||||||||
Other income
|
| | 24 | (23 | ) | 1 | ||||||||||||||
Total revenues
|
| 9 | 2,655 | (31 | ) | 2,633 | ||||||||||||||
EXPENSES
|
||||||||||||||||||||
Salaries and benefits
|
| | (1,609 | ) | 29 | (1,580 | ) | |||||||||||||
Other operating expenses
|
(8 | ) | (101 | ) | (354 | ) | (1 | ) | (464 | ) | ||||||||||
Depreciation expense
|
| (10 | ) | (46 | ) | | (56 | ) | ||||||||||||
Amortization of intangible assets
|
| | (57 | ) | 5 | (52 | ) | |||||||||||||
Net gain on disposal of operations
|
| | 7 | (3 | ) | 4 | ||||||||||||||
Total expenses
|
(8 | ) | (111 | ) | (2,059 | ) | 30 | (2,148 | ) | |||||||||||
OPERATING (LOSS) INCOME
|
(8 | ) | (102 | ) | 596 | (1 | ) | 485 | ||||||||||||
Investment income from Group undertakings
|
35 | 1,177 | 113 | (1,325 | ) | | ||||||||||||||
Make-whole on repurchase and redemption of senior notes and
write-off of unamortized debt issuance costs
|
| (171 | ) | | | (171 | ) | |||||||||||||
Interest expense
|
(23 | ) | (300 | ) | (258 | ) | 469 | (112 | ) | |||||||||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES
|
4 | 604 | 451 | (857 | ) | 202 | ||||||||||||||
Income taxes
|
7 | 62 | (109 | ) | 6 | (34 | ) | |||||||||||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
11 | 666 | 342 | (851 | ) | 168 | ||||||||||||||
Interest in earnings of associates, net of tax
|
| | 17 | 6 | 23 | |||||||||||||||
NET INCOME
|
11 | 666 | 359 | (845 | ) | 191 | ||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | (12 | ) | | (12 | ) | |||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
168 | (470 | ) | | 302 | | ||||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 179 | $ | 196 | $ | 347 | $ | (543 | ) | $ | 179 | |||||||||
51
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2010 | ||||||||||||||||||||
Willis |
||||||||||||||||||||
Group |
||||||||||||||||||||
Holdings |
||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||
(millions) | ||||||||||||||||||||
REVENUES
|
||||||||||||||||||||
Commissions and fees
|
$ | | $ | | $ | 2,475 | $ | | $ | 2,475 | ||||||||||
Investment income
|
| 9 | 27 | (7 | ) | 29 | ||||||||||||||
Other income
|
| | | | | |||||||||||||||
Total revenues
|
| 9 | 2,502 | (7 | ) | 2,504 | ||||||||||||||
EXPENSES
|
||||||||||||||||||||
Salaries and benefits
|
| | (1,420 | ) | 16 | (1,404 | ) | |||||||||||||
Other operating expenses
|
338 | (86 | ) | (649 | ) | (16 | ) | (413 | ) | |||||||||||
Depreciation expense
|
| (7 | ) | (38 | ) | | (45 | ) | ||||||||||||
Amortization of intangible assets
|
| | (64 | ) | | (64 | ) | |||||||||||||
Net (loss) gain on disposal of operations
|
(347 | ) | | 347 | (2 | ) | (2 | ) | ||||||||||||
Total expenses
|
(9 | ) | (93 | ) | (1,824 | ) | (2 | ) | (1,928 | ) | ||||||||||
OPERATING (LOSS) INCOME
|
(9 | ) | (84 | ) | 678 | (9 | ) | 576 | ||||||||||||
Investment income from Group undertakings
|
| 895 | 540 | (1,435 | ) | | ||||||||||||||
Interest expense
|
| (451 | ) | (274 | ) | 601 | (124 | ) | ||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF
ASSOCIATES
|
(9 | ) | 360 | 944 | (843 | ) | 452 | |||||||||||||
Income taxes
|
| 29 | (123 | ) | (18 | ) | (112 | ) | ||||||||||||
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES
|
(9 | ) | 389 | 821 | (861 | ) | 340 | |||||||||||||
Interest in earnings of associates, net of tax
|
| | 22 | 5 | 27 | |||||||||||||||
NET (LOSS) INCOME
|
(9 | ) | 389 | 843 | (856 | ) | 367 | |||||||||||||
Less: Net income attributable to noncontrolling interests
|
| | (2 | ) | (8 | ) | (10 | ) | ||||||||||||
EQUITY ACCOUNT FOR SUBSIDIARIES
|
366 | (28 | ) | | (338 | ) | | |||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS
|
$ | 357 | $ | 361 | $ | 841 | $ | | $ | 357 | ||||||||||
52
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
As at September 30, 2011 | ||||||||||||||||||||
Willis |
||||||||||||||||||||
Group |
||||||||||||||||||||
Holdings |
||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||
(millions) | ||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
CURRENT ASSETS
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 2 | $ | 122 | $ | 239 | $ | | $ | 363 | ||||||||||
Accounts receivable, net
|
| | 884 | 27 | 911 | |||||||||||||||
Fiduciary assets
|
| | 10,768 | (678 | ) | 10,090 | ||||||||||||||
Deferred tax assets
|
| | 21 | | 21 | |||||||||||||||
Other current assets
|
7 | 177 | 415 | (284 | ) | 315 | ||||||||||||||
Total current assets
|
9 | 299 | 12,327 | (935 | ) | 11,700 | ||||||||||||||
Investments in subsidiaries
|
(880 | ) | 4,578 | 3,854 | (7,552 | ) | | |||||||||||||
Amounts owed by (to) Group undertakings
|
4,396 | (4,304 | ) | (92 | ) | | | |||||||||||||
NON-CURRENT ASSETS
|
||||||||||||||||||||
Fixed assets, net
|
| 58 | 330 | (1 | ) | 387 | ||||||||||||||
Goodwill
|
| | 1,697 | 1,600 | 3,297 | |||||||||||||||
Other intangible assets, net
|
| | 456 | (16 | ) | 440 | ||||||||||||||
Investments in associates
|
| | (35 | ) | 221 | 186 | ||||||||||||||
Deferred tax assets
|
| | 6 | (1 | ) | 5 | ||||||||||||||
Pension benefits asset
|
| | 261 | | 261 | |||||||||||||||
Other non-current assets
|
6 | 196 | 137 | | 339 | |||||||||||||||
Total non-current assets
|
6 | 254 | 2,852 | 1,803 | 4,915 | |||||||||||||||
TOTAL ASSETS
|
$ | 3,531 | $ | 827 | $ | 18,941 | $ | (6,684 | ) | 16,615 | ||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
||||||||||||||||||||
CURRENT LIABILITIES
|
||||||||||||||||||||
Fiduciary liabilities
|
$ | | $ | | $ | 10,768 | $ | (678 | ) | $ | 10,090 | |||||||||
Deferred revenue and accrued expenses
|
1 | | 286 | | 287 | |||||||||||||||
Income taxes payable
|
| 60 | 101 | (123 | ) | 38 | ||||||||||||||
Short-term debt and current portion of long-term debt
|
| 110 | 4 | | 114 | |||||||||||||||
Deferred tax liabilities
|
| | 17 | | 17 | |||||||||||||||
Other current liabilities
|
48 | 45 | 212 | (31 | ) | 274 | ||||||||||||||
Total current liabilities
|
49 | 215 | 11,388 | (832 | ) | 10,820 | ||||||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||||||||||
Long-term debt
|
794 | 1,491 | | | 2,285 | |||||||||||||||
Liabilities for pension benefits
|
| | 128 | | 128 | |||||||||||||||
Deferred tax liabilities
|
| 41 | 83 | | 124 | |||||||||||||||
Provisions for liabilities
|
| | 182 | (3 | ) | 179 | ||||||||||||||
Other non-current liabilities
|
| 19 | 343 | | 362 | |||||||||||||||
Total non-current liabilities
|
794 | 1,551 | 736 | (3 | ) | 3,078 | ||||||||||||||
TOTAL LIABILITIES
|
$ | 843 | $ | 1,766 | $ | 12,124 | $ | (835 | ) | $ | 13,898 | |||||||||
EQUITY
|
||||||||||||||||||||
Total Willis Group Holdings stockholders equity
|
2,688 | (939 | ) | 6,788 | (5,849 | ) | 2,688 | |||||||||||||
Noncontrolling interests
|
| | 29 | | 29 | |||||||||||||||
Total equity
|
2,688 | (939 | ) | 6,817 | (5,849 | ) | 2,717 | |||||||||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 3,531 | $ | 827 | $ | 18,941 | $ | (6,684 | ) | $ | 16,615 | |||||||||
53
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
As at December 31, 2010 | ||||||||||||||||||||
Willis |
||||||||||||||||||||
Group |
||||||||||||||||||||
Holdings |
||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||
(millions) | ||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
CURRENT ASSETS
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | | $ | 76 | $ | 240 | $ | | $ | 316 | ||||||||||
Accounts receivable, net
|
2 | | 809 | 28 | 839 | |||||||||||||||
Fiduciary assets
|
| | 10,167 | (598 | ) | 9,569 | ||||||||||||||
Deferred tax assets
|
| 1 | 35 | | 36 | |||||||||||||||
Other current assets
|
| 80 | 293 | (33 | ) | 340 | ||||||||||||||
Total current assets
|
2 | 157 | 11,544 | (603 | ) | 11,100 | ||||||||||||||
Investments in subsidiaries
|
(1,039 | ) | 4,429 | 3,855 | (7,245 | ) | | |||||||||||||
Amounts owed by (to) Group undertakings
|
3,659 | (3,588 | ) | (71 | ) | | | |||||||||||||
NON-CURRENT ASSETS
|
||||||||||||||||||||
Fixed assets, net
|
| 52 | 330 | (1 | ) | 381 | ||||||||||||||
Goodwill
|
| | 1,696 | 1,598 | 3,294 | |||||||||||||||
Other intangible assets, net
|
| | 492 | | 492 | |||||||||||||||
Investments in associates
|
| | (51 | ) | 212 | 161 | ||||||||||||||
Deferred tax assets
|
| | 7 | | 7 | |||||||||||||||
Pension benefits asset
|
| | 179 | | 179 | |||||||||||||||
Other non-current assets
|
| 207 | 149 | (123 | ) | 233 | ||||||||||||||
Total non-current assets
|
| 259 | 2,802 | 1,686 | 4,747 | |||||||||||||||
TOTAL ASSETS
|
$ | 2,622 | $ | 1,257 | $ | 18,130 | $ | (6,162 | ) | $ | 15,847 | |||||||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
||||||||||||||||||||
CURRENT LIABILITIES
|
||||||||||||||||||||
Fiduciary liabilities
|
$ | | $ | | $ | 10,167 | $ | (598 | ) | $ | 9,569 | |||||||||
Deferred revenue and accrued expenses
|
1 | | 297 | | 298 | |||||||||||||||
Income taxes payable
|
| | 69 | (12 | ) | 57 | ||||||||||||||
Short-term debt and current portion of long-term debt
|
| 110 | | | 110 | |||||||||||||||
Deferred tax liabilities
|
| 4 | 5 | | 9 | |||||||||||||||
Other current liabilities
|
44 | 53 | 189 | (20 | ) | 266 | ||||||||||||||
Total current liabilities
|
45 | 167 | 10,727 | (630 | ) | 10,309 | ||||||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||||||||||
Long-term debt
|
| 2,153 | 4 | | 2,157 | |||||||||||||||
Liabilities for pension benefits
|
| | 164 | | 164 | |||||||||||||||
Deferred tax liabilities
|
| 29 | 54 | | 83 | |||||||||||||||
Provisions for liabilities
|
| | 183 | (4 | ) | 179 | ||||||||||||||
Other non-current liabilities
|
| 26 | 321 | | 347 | |||||||||||||||
Total non-current liabilities
|
| 2,208 | 726 | (4 | ) | 2,930 | ||||||||||||||
TOTAL LIABILITIES
|
$ | 45 | $ | 2,375 | $ | 11,453 | $ | (634 | ) | $ | 13,239 | |||||||||
EQUITY
|
||||||||||||||||||||
Total Willis Group Holdings stockholders equity
|
2,577 | (1,118 | ) | 6,646 | (5,528 | ) | 2,577 | |||||||||||||
Noncontrolling interests
|
| | 31 | | 31 | |||||||||||||||
Total equity
|
2,577 | (1,118 | ) | 6,677 | (5,528 | ) | 2,608 | |||||||||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 2,622 | $ | 1,257 | $ | 18,130 | $ | (6,162 | ) | $ | 15,847 | |||||||||
54
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2011 | ||||||||||||||||||||
Willis |
||||||||||||||||||||
Group |
||||||||||||||||||||
Holdings |
||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||
(millions) | ||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
$ | (31 | ) | $ | 131 | $ | 1,061 | $ | (889 | ) | $ | 272 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets
|
| | 10 | | 10 | |||||||||||||||
Additions to fixed assets
|
| (17 | ) | (54 | ) | | (71 | ) | ||||||||||||
Acquisitions of subsidiaries, net of cash acquired
|
| | (5 | ) | | (5 | ) | |||||||||||||
Acquisitions of investments in associates
|
| | (2 | ) | | (2 | ) | |||||||||||||
Investment in Trident V Parallel Fund, LP
|
| | (4 | ) | | (4 | ) | |||||||||||||
Net cash used in investing activities
|
| (17 | ) | (55 | ) | | (72 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||||||||||
Repayments of revolving credit facility
|
| (90 | ) | | | (90 | ) | |||||||||||||
Senior notes issued
|
794 | | | | 794 | |||||||||||||||
Debt issuance costs
|
(7 | ) | | | | (7 | ) | |||||||||||||
Repayments of debt
|
| (582 | ) | | | (582 | ) | |||||||||||||
Make-whole on repurchase and redemption of senior notes
|
| (158 | ) | | | (158 | ) | |||||||||||||
Proceeds from issue of shares
|
46 | | | | 46 | |||||||||||||||
Amounts owed by (to) Group undertakings
|
(664 | ) | 770 | (106 | ) | | | |||||||||||||
Excess tax benefits from share-based payment arrangement
|
| | 5 | | 5 | |||||||||||||||
Dividends paid
|
(136 | ) | | (889 | ) | 889 | (136 | ) | ||||||||||||
Acquisition of noncontrolling interests
|
| (8 | ) | (1 | ) | | (9 | ) | ||||||||||||
Dividends paid to noncontrolling interests
|
| | (13 | ) | | (13 | ) | |||||||||||||
Net cash provided by (used in) financing activities
|
33 | (68 | ) | (1,004 | ) | 889 | (150 | ) | ||||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS
|
2 | 46 | 2 | | 50 | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
| | (3 | ) | | (3 | ) | |||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
| 76 | 240 | | 316 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$ | 2 | $ | 122 | $ | 239 | $ | | $ | 363 | ||||||||||
55
20. | FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued) |
Nine months ended September 30, 2010 | ||||||||||||||||||||
Willis |
||||||||||||||||||||
Group |
||||||||||||||||||||
Holdings |
||||||||||||||||||||
the Parent |
The |
Consolidating |
||||||||||||||||||
Issuer | Guarantors | Other | adjustments | Consolidated | ||||||||||||||||
(millions) | ||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
$ | (9 | ) | $ | 356 | $ | 722 | $ | (821 | ) | $ | 248 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets
|
| | 6 | | 6 | |||||||||||||||
Additions to fixed assets
|
| (20 | ) | (39 | ) | | (59 | ) | ||||||||||||
Acquisitions of subsidiaries, net of cash acquired
|
| | (20 | ) | | (20 | ) | |||||||||||||
Investment in Trident V Parallel Fund, LP
|
| | (2 | ) | | (2 | ) | |||||||||||||
Acquisitions of investments in associates
|
| | (1 | ) | | (1 | ) | |||||||||||||
Net cash used in investing activities
|
| (20 | ) | (56 | ) | | (76 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||||||||||
Proceeds from draw down of revolving credit facility
|
| 95 | | | 95 | |||||||||||||||
Repayments of debt
|
| (171 | ) | (10 | ) | | (181 | ) | ||||||||||||
Proceeds from issue of shares
|
26 | | | | 26 | |||||||||||||||
Amounts owed by (to) Group undertakings
|
71 | (158 | ) | 87 | | | ||||||||||||||
Dividends paid
|
(88 | ) | (132 | ) | (733 | ) | 821 | (132 | ) | |||||||||||
Acquisition of noncontrolling interests
|
| | (10 | ) | | (10 | ) | |||||||||||||
Dividends paid to noncontrolling interests
|
| | (24 | ) | | (24 | ) | |||||||||||||
Net cash provided by (used in) financing activities
|
9 | (366 | ) | (690 | ) | 821 | (226 | ) | ||||||||||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
| (30 | ) | (24 | ) | | (54 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
| | (8 | ) | | (8 | ) | |||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
| 104 | 117 | | 221 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$ | | $ | 74 | $ | 85 | $ | | $ | 159 | ||||||||||
56
57
| $15 million pre-tax or $0.06 per diluted share, relating to the 2011 Operational Review. See 2011 Operational Review section; and |
| a $20 million pre-tax, or $0.09 per diluted share, increase in the amortization charge relating to our cash retention awards. See Salaries and benefits Cash retention awards section. |
| $130 million pre-tax or $0.53 per diluted share, relating to the 2011 Operational Review. See, 2011 Operational Review section; |
| $171 million pre-tax or $0.71 per diluted share, relating to the make-whole amounts on the repurchase and redemption of $500 million of our senior debt and the write-off of related unamortized debt issuance costs. See, Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs section; |
| a $48 million pre-tax, or $0.21 per diluted share, increase in the amortization charge relating to our cash retention awards; and |
| the $11 million, or $0.06 per diluted share, second quarter 2011 non-tax deductible expense relating to the UK FSA regulatory settlement. |
| execution of the Willis Causeaiming to become the broker and risk adviser of choice globally by aligning our business model to the needs of each client segment and maintaining a focus on growth; |
| continued investment in technology, advanced analytics, product innovation and industry talent and expertise to support our growth strategy; and |
| completion of our 2011 Operational Review which aims to better align resources with our growth strategies and enable related long-term expense savings. |
58
| the $15 million expense for the 2011 Operational Review, discussed below; |
| a $20 million increase in amortization of cash retention awards; |
| a $2 million expense relating to the reinstatement of our 401(k) match plan for our North American employees from January 2011 and the incremental expense of the reinstatement of annual salaries reviews for all employees from April 2011; |
| the 2 percent or approximately $16 million organic growth in commissions and fees; |
| a $13 million decrease in incentive expense reflecting; lower accrual for production incentives linked to performance and savings resulting from the buy-out of existing contractual incentive schemes; and |
| an $8 million decrease in pension expense, driven by higher expected return on assets and lower amortization of prior period gains and losses. |
| the $130 million expense for the 2011 Operational Review, discussed below; |
| a $48 million increase in the amortization of cash retention awards; |
| the $11 million second quarter 2011 expense for a UK FSA regulatory settlement; |
| an $8 million expense relating to the reinstatement of our 401(k) match plan for our North American employees from January 2011 and the incremental expense of the reinstatement of annual salary reviews for all employees from April 2011; |
| the 3 percent or approximately $80 million organic growth in commissions and fees; |
| the period-over-period benefit from a $12 million charge relating to the first quarter 2010 devaluation of the Venezuelan currency; |
59
| a $22 million decrease in incentive expense, reflecting lower accrual for production incentives linked to performance and savings resulting from the buy-out of existing contractual incentive schemes; |
| the $20 million decrease in pension expenses driven by higher expected return on assets and lower amortization of prior period gains and losses; and |
| a $7 million period-over-period benefit from the release of funds and reserves related to potential legal liabilities. |
| $64 million of severance costs (including $3 million relating to the write-off of retention awards) relating to approximately 800 positions which have been, or are in the process of being, eliminated; |
| $35 million of other salaries and benefits expense to buy out previously existing incentive schemes and other contractual arrangements that no longer align with the Groups overall remuneration strategy; and |
| $31 million of other operating expenses, including: property and systems rationalization costs; related |
accelerated systems depreciation of $5 million; and re-negotiation of sourcing contracts. |
60
September 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(millions, except percentages) | ||||||||
Long-term debt
|
$ | 2,285 | $ | 2,157 | ||||
Short-term debt and current portion of long-term debt
|
114 | 110 | ||||||
Total debt
|
$ | 2,399 | $ | 2,267 | ||||
Total equity
|
$ | 2,717 | $ | 2,608 | ||||
Capitalization ratio
|
47 | % | 47 | % | ||||
61
62
63
Change attributable to: | ||||||||||||||||||||||||||||
Foreign |
Acquisitions |
Organic |
||||||||||||||||||||||||||
% |
currency |
and |
Contingent |
revenue |
||||||||||||||||||||||||
Three months ended September 30,(a) | 2011 | 2010 | Change | translation | disposals | Commissions(c) | growth(b) | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
Global
|
$ | 236 | $ | 210 | 12 | % | 3 | % | | % | | % | 9 | % | ||||||||||||||
North America
|
316 | 330 | (4 | )% | | % | | % | | % | (4 | )% | ||||||||||||||||
International
|
203 | 183 | 11 | % | 6 | % | | % | | % | 5 | % | ||||||||||||||||
Commissions and fees
|
$ | 755 | $ | 723 | 4 | % | 2 | % | | % | | % | 2 | % | ||||||||||||||
Investment income
|
7 | 10 | (30 | )% | ||||||||||||||||||||||||
Other income
|
| | | % | ||||||||||||||||||||||||
Total revenues
|
$ | 762 | $ | 733 | 4 | % | ||||||||||||||||||||||
Change attributable to: | ||||||||||||||||||||||||||||
Foreign |
Acquisitions |
|||||||||||||||||||||||||||
% |
currency |
and |
Contingent |
Organic revenue |
||||||||||||||||||||||||
Nine months ended September 30,(a) | 2011 | 2010 | Change | translation | disposals | Commissions(c) | growth(b) | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||
Global(d)
|
$ | 865 | $ | 790 | 9 | % | 3 | % | | % | | % | 6 | % | ||||||||||||||
North America
|
998 | 1,023 | (2 | )% | | % | | % | | % | (2 | )% | ||||||||||||||||
International
|
746 | 662 | 13 | % | 7 | % | | % | | % | 6 | % | ||||||||||||||||
Commissions and fees
|
$ | 2,609 | $ | 2,475 | 5 | % | 2 | % | | % | | % | 3 | % | ||||||||||||||
Investment income
|
23 | 29 | (21 | )% | ||||||||||||||||||||||||
Other income
|
1 | | n/a | % | ||||||||||||||||||||||||
Total revenues
|
$ | 2,633 | $ | 2,504 | 5 | % | ||||||||||||||||||||||
(a) | Effective January 1, 2011, we changed our internal reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, commissions and fees of $31 million in third quarter 2010 and $100 million in first nine months of 2010, previously allocated to our International segment, have been included in Global: $29 million and $92 million; and North America: $2 million and $8 million. | |
(b) | Organic revenue growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; (iv) in North America, legacy contingent commissions assumed as part of the HRH acquisition that had not been converted into higher standard commission; and (v) investment income and other income from reported revenues. | |
(c) | Included in North America reported commissions and fees were legacy HRH contingent commissions of $1 million in third quarter 2011 and $5 million in first nine months 2011, compared with $3 million and $11 million in the third quarter and first nine months of 2010, respectively. | |
(d) | Reported commissions and fees and organic revenue growth for Global for the nine months ended September 30, 2011 included a first quarter 2011 favorable impact from a change in accounting methodology in a Global Specialty business of $6 million. |
64
| International achieved 5 percent organic growth driven by growth in Latin America, Eastern Europe and Asia; |
| Global achieved 9 percent organic growth, primarily reflecting growth in both our Reinsurance and Global Specialties businesses; driven primarily by strong new business growth, renewal business and the benefit of revenues from a Reinsurance profitability initiative that may or may not recur; and |
| North America reported 4 percent decline in organic commissions and fees, reflecting a decline in revenues generated by Loan Protector and the continued adverse impact of difficult trading conditions. |
| International achieved 6 percent organic growth driven by our Latin America, Eastern Europe and Asia regions; |
| Global also achieved 6 percent growth, including growth in Reinsurance, Global Specialties, London Market Wholesale and WCMA businesses, together with a $6 million 2011 benefit from a change in accounting within a Global Specialty business to conform to current Group accounting policy; and |
| North America reported a 2 percent decline in organic commissions and fees, as the benefits of higher retention rates and growth in some regions were more than offset by the continued impact of the soft market and ongoing weakened economic conditions and the revenue decline in Loan Protector. |
65
Three months |
Nine months |
|||||||||||||||
ended September 30, | ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except percentages) | ||||||||||||||||
Salaries and benefits
|
$ | 490 | $ | 462 | $ | 1,580 | $ | 1,404 | ||||||||
Other
|
147 | 129 | 464 | 413 | ||||||||||||
General and administrative expenses
|
$ | 637 | $ | 591 | $ | 2,044 | $ | 1,817 | ||||||||
Salaries and benefits as a percentage of revenues
|
64 | % | 63 | % | 60 | % | 56 | % | ||||||||
Salaries and benefits growth
|
6 | % | 3 | % | 13 | % | 2 | % | ||||||||
Other as a percentage of revenues
|
19 | % | 18 | % | 18 | % | 16 | % | ||||||||
Other growth
|
14 | % | (15 | )% | 12 | % | (4 | )% |
| a $20 million increase in the amortization of cash retention awards; |
| a $7 million expense in third quarter 2011 associated with our 2011 Operational Review, as discussed above; |
| a period-over-period adverse impact on salaries and benefits expense from foreign currency translation, driven primarily by the weakening of the US dollar against the Pound sterling (in which our London Market based operations incur the majority of their expenses); |
| a $2 million expense relating to the reinstatement of our 401(k) match plan for our North America employees from January 2011 and the incremental expense of the reinstatement of annual salary reviews for all employees from April 2011; and |
| the period-over-period impact of investment in new client-facing hires; |
| a $13 million decrease in incentive expense reflecting, lower accrual for production incentives linked to performance and savings resulting from the buy-out of existing contractual incentive schemes; and |
| an $8 million decrease in pension expense driven by higher expected return on assets and lower amortization of prior period gains and losses. |
| additional salaries and benefits expense in first nine months 2011 of $99 million associated with our 2011 Operational Review, as discussed above; |
| a $48 million increase in the amortization of cash retention awards; |
| a period-over-period net adverse impact on salaries and benefits expense from foreign currency translation, driven primarily by the weakening of the US dollar against the Pound sterling (in which our London Market based operations incur the majority of their expenses); |
| an $8 million expense relating to the reinstatement of our 401(k) match plan for our North America employees from January 2011 and the incremental expense of reinstatement of annual salary reviews for all employees from April 2011; and |
| the period-over-period impact of investment in new client-facing hires; |
| a $22 million decrease in incentive expense reflecting, lower accrual for production incentives linked to performance and savings resulting from the buy-out of existing contractual incentive schemes; and |
| a $20 million decrease in pension expense driven by higher expected return on assets and lower amortization of prior period gains and losses. |
66
| costs associated with the 2011 Operational Review of $8 million in third quarter 2011, as discussed above; and |
| increased systems expense in corporate functions, including higher project costs, in support of our growth initiatives. |
| costs associated with the 2011 Operational Review of $26 million; and |
| the $11 million second quarter 2011 UK FSA regulatory settlement; |
| the period-over-period positive effect of the $12 million first quarter 2010 charge relating to the devaluation of the Venezuelan currency; and |
| the $7 million period-over-period benefit from the release of funds and reserves related to potential legal liabilities. |
67
Three months |
Nine months |
|||||||||||||||
ended September 30, | ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except percentages) | ||||||||||||||||
Revenues
|
$ | 762 | $ | 733 | $ | 2,633 | $ | 2,504 | ||||||||
Operating income
|
90 | 106 | 485 | 576 | ||||||||||||
Operating margin or operating income as a percentage of revenues
|
12 | % | 14 | % | 18 | % | 23 | % |
| the $15 million expense for the 2011 Operational Review, discussed previously; |
| a $20 million increase in the amortization of cash retention awards; and |
| a $2 million expense relating to the restatement of our 401(k) match plan for our North American employees from January 2011 and the incremental expense of the restatement of annual salary reviews for all employees from April 2011; |
| the 2 percent or approximately $16 million organic growth in commissions and fees; |
| a $13 million decrease in incentive expense reflecting, lower accrual for production incentives linked to performance and savings resulting from the buy-out of existing contractual incentive schemes; and |
| an $8 million decrease in pension expense driven by higher expected return on assets and lower amortization of prior period gains and losses. |
| the $130 million expense for the 2011 Operational Review, discussed above; |
| a $48 million increase in the amortization of cash retention awards; |
| the $11 million second quarter 2011 expense for a UK FSA regulatory settlement; and |
| an $8 million expense relating to the reinstatement of our 401(k) match for our North American employees from January 2011 and the incremental expense of the reinstatement of annual salary reviews for all employees from April 2011; |
| the 3 percent or approximately $80 million organic growth in commissions and fees; |
| the period-over-period benefit from a $12 million charge relating to the first quarter 2010 devaluation of the Venezuelan currency; |
| a $22 million decrease in incentive expense reflecting, lower accrual for production incentives linked to performance and savings resulting from the buy-out of existing contractual incentive schemes; |
| the $20 million decrease in pension expenses driven by higher expected return on assets and lower amortization of prior period gains and losses; and |
| a $7 million year on year benefit from the release of funds and reserves related to potential legal liabilities. |
68
Three months |
Nine months |
|||||||||||||||
ended September 30, | ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions) | ||||||||||||||||
Make-whole amounts on repurchase and redemption of senior notes
and write-off of unamortized debt issuance costs
|
$ | | $ | | $ | 171 | $ | |
| a charge of $158 million relating to the make-whole payment (at a small discount to the contractual |
agreement) on the early repurchase and redemption of $500 million of our 12.875% senior notes due 2016 in 2011; and | |
| the write-off of $13 million of unamortized debt issuance costs relating to these notes. |
Three months |
Nine months |
|||||||||||||||
ended September 30, | ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except percentages) | ||||||||||||||||
Income before taxes
|
$ | 52 | $ | 66 | $ | 202 | $ | 452 | ||||||||
Income tax charge
|
2 | 10 | 34 | 112 | ||||||||||||
Effective tax rate
|
4 | % | 15 | % | 17 | % | 25 | % |
| tax related to the make-whole payment on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs which are relieved at a higher rate than the underlying; |
| a non-taxable gain on disposal of operations of $4 million; and |
| a tax benefit of $2 million relating to the impact of the reduction in the UK statutory tax rate on deferred tax balances. |
69
| the benefit from the higher tax rate at which costs associated with the 2011 Operational review are relieved; and |
| the impact of the UK FSA regulatory settlement expense for which no tax relief is available. |
Three months |
Nine months |
|||||||||||||||
ended September 30, | ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except per share data) | ||||||||||||||||
Net income
|
$ | 60 | $ | 64 | $ | 179 | $ | 357 | ||||||||
Diluted earnings per share
|
$ | 0.34 | $ | 0.37 | $ | 1.02 | $ | 2.09 | ||||||||
Weighted average diluted number of shares outstanding
|
176 | 171 | 175 | 171 |
| a $16 million post-tax increase in the amortization charge relating to our cash retention awards, equivalent to $0.09 per diluted share; |
| the $11 million post-tax cost of the 2011 Operational Review, as discussed previously, equivalent to $0.06 per diluted share; and |
| the salaries and benefits expense impact of the reinstated annual salary review and North American 401(k) match plan in 2011; |
| the 2 percent or approximately $12 million post-tax organic growth in commissions and fees, equivalent to $0.07 per diluted share; and |
| the $8 million benefit to update the estimated annual effective tax rate from 25 percent to 22 percent, equivalent to $0.05 per diluted share. |
| the $92 million post-tax cost of the 2011 Operational Review, as discussed previously, equivalent to $0.53 per diluted share; |
| the $125 million post-tax impact of the make-whole amounts associated with the early repurchase and redemption of the $500 million 12.875% senior notes due 2016, equivalent to $0.71 per diluted share; |
70
| a $37 million post-tax, or $0.23 per diluted share, increase in the amortization charge relating to our cash retention awards; and |
| the $11 million non-tax-deductible expense relating to a previously announced UK FSA regulatory settlement, equivalent to $0.06 per diluted share; |
| the 3 percent or approximately $62 million post-tax organic growth in commissions and fees equivalent to $0.35 per diluted share; and |
| the $9 million post-tax decrease in interest expense, equivalent to $0.05 per diluted share. |
Three months ended September 30,(a) | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Operating |
Operating |
Operating |
Operating |
|||||||||||||||||||||
Revenues | Income | Margin | Revenues | Income | Margin | |||||||||||||||||||
(millions) | (millions) | |||||||||||||||||||||||
Global
|
$ | 237 | $ | 53 | 22 | % | $ | 212 | $ | 49 | 23 | % | ||||||||||||
North America
|
318 | 62 | 19 | % | 334 | 71 | 21 | % | ||||||||||||||||
International
|
207 | 4 | 2 | % | 187 | 8 | 4 | % | ||||||||||||||||
Total Retail
|
525 | 66 | 13 | % | 521 | 79 | 15 | % | ||||||||||||||||
Corporate & Other
|
| (29 | ) | n/a | | (22 | ) | n/a | ||||||||||||||||
Total Consolidated
|
$ | 762 | $ | 90 | 12 | % | $ | 733 | $ | 106 | 14 | % | ||||||||||||
Nine months ended September 30,(a) | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Operating |
Operating |
Operating |
Operating |
|||||||||||||||||||||
Revenues | Income | Margin | Revenues | Income | Margin | |||||||||||||||||||
(millions) | (millions) | |||||||||||||||||||||||
Global
|
$ | 872 | $ | 317 | 36 | % | $ | 797 | $ | 290 | 36 | % | ||||||||||||
North America
|
1,004 | 208 | 21 | % | 1,035 | 232 | 22 | % | ||||||||||||||||
International
|
757 | 146 | 19 | % | 672 | 136 | 20 | % | ||||||||||||||||
Total Retail
|
1,761 | 354 | 20 | % | 1,707 | 368 | 22 | % | ||||||||||||||||
Corporate & Other
|
| (186 | ) | n/a | | (82 | ) | n/a | ||||||||||||||||
Total Consolidated
|
$ | 2,633 | $ | 485 | 18 | % | $ | 2,504 | $ | 576 | 23 | % | ||||||||||||
71
(a) | Effective January 1, 2011, we changed our internal reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, total revenues of $31 million in third quarter 2010 and $101 million in the nine months ended September 30, 2010, previously allocated to our International segment, have been included in Global: $29 million and $94 million; and North America: $2 million and $7 million. Operating income of $13 million in third quarter 2010 and $47 million in the nine months ended September 30, 2010 have been allocated to our Global segment, with a corresponding reduction in International in the same periods of 2010. |
Three months |
Nine months |
|||||||||||||||
ended September 30,(a) | ended September 30,(a) | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except percentages) | ||||||||||||||||
Commissions and
fees(b)
|
$ | 236 | $ | 210 | $ | 865 | $ | 790 | ||||||||
Investment income
|
1 | 2 | 7 | 7 | ||||||||||||
Total revenues
|
$ | 237 | $ | 212 | $ | 872 | $ | 797 | ||||||||
Operating income
|
$ | 53 | $ | 49 | $ | 317 | $ | 290 | ||||||||
Organic revenue
growth(c)
|
9 | % | 4 | % | 6 | % | 7 | % | ||||||||
Operating margin
|
22 | % | 23 | % | 36 | % | 36 | % |
(a) | Effective January 1, 2011, we changed our internal reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global segment. As a result of this change, total revenues of $29 million in third quarter 2010 and $94 million in the nine months ended September 30, 2010, previously allocated to our International segment, have been included in Global. Operating income of $13 million in third quarter 2010 and $47 million in the nine months ended September 30, 2010 has been allocated to our Global segment, with a corresponding reduction in International in the same periods of 2010. | |
(b) | Reported commissions and fees and organic revenue growth for the nine months ended September 30, 2011 included a first quarter 2011 favorable impact from a change in accounting methodology in a Global Specialty business of $6 million. | |
(c) | Organic revenue growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; and (iv) investment income and other income from reported revenues. |
72
| a net negative impact from foreign currency movements; |
| a $3 million increase in incentive expense, including amortization of cash retention award payments; and |
| the impact of costs associated with continued support of current and future growth; |
| 9 percent organic growth in commissions and fees discussed above; and |
| a $5 million decrease in pension expense. |
| 6 percent organic growth in commissions and fees discussed above; and |
| a $12 million decrease in pension expense; |
| a net negative impact from foreign currency movements; |
| a $10 million increase in incentive expense, including amortization of cash retention award payments; and |
| the impact of costs associated with continued support of current and future growth. |
73
Three months |
Nine months |
|||||||||||||||
ended September 30,(a) | ended September 30,(a) | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except percentages) | ||||||||||||||||
Commissions and
fees(b)
|
$ | 316 | $ | 330 | $ | 998 | $ | 1,023 | ||||||||
Investment income
|
2 | 4 | 5 | 12 | ||||||||||||
Other income
|
| | 1 | | ||||||||||||
Total revenues
|
$ | 318 | $ | 334 | $ | 1,004 | $ | 1,035 | ||||||||
Operating income
|
$ | 62 | $ | 71 | $ | 208 | $ | 232 | ||||||||
Organic revenue
growth(c)
|
(4 | )% | 2 | % | (2 | )% | 1 | % | ||||||||
Operating margin
|
19 | % | 21 | % | 21 | % | 22 | % |
(a) | Effective January 1, 2011, we changed our internal reporting structure: Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of this change, total revenues of $2 million in third quarter 2010 and $7 million in the nine months ended September 30, 2010, previously allocated to our International segment, have been included in North America. | |
(b) | Included in North America reported commissions and fees were legacy HRH contingent commissions of $1 million in third quarter 2011 and $5 million in first nine months 2011, compared with $1 million and $11 million in the third quarter and first nine months of 2010, respectively. | |
(c) | Organic revenue growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; (iv) in North America, legacy contingent commissions assumed as part of the HRH acquisition and that had not been converted into higher standard commission; and (v) investment income and other income from reported revenues. |
| new business growth and solid client retention |
| lower revenues generated by our Loan Protector specialty business; and |
| smaller declines elsewhere reflecting the impact of the continued weak US economy. |
74
| the 4 percent decline in organic commissions and fees in the third quarter 2011, discussed above; |
| a $2 million decrease in investment income in third quarter 2011; |
| a period-over-period increase in 401(k) match expense of $2 million following its reinstatement in 2011; and |
| a $2 million increase in incentive expense, including amortization of cash retention award payments; |
| a $2 million decrease in stock-based compensation charge in third quarter 2011; and |
| the benefit of cost reductions driven by our continued focus on expense management. |
| the 2 percent decline in organic commissions and fees, discussed above; |
| a reduction in legacy HRH contingent commissions of $6 million; |
| the period-over-period increase in 401(k) match plan expense of $7 million in first nine months 2011; |
| an $8 million increase in incentive expense, including amortization of cash retention award payments; and |
| a reduction in investment income driven by continually low US interest rates; |
| the benefit of cost reductions driven by our continued focus on expense management. |
Three months |
Nine months |
|||||||||||||||
ended September 30,(a) | ended September 30,(a) | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions, except percentages) | ||||||||||||||||
Commissions and fees
|
$ | 203 | $ | 183 | $ | 746 | $ | 662 | ||||||||
Investment income
|
4 | 4 | 11 | 10 | ||||||||||||
Total revenues
|
$ | 207 | $ | 187 | $ | 757 | $ | 672 | ||||||||
Operating income
|
$ | 4 | $ | 8 | $ | 146 | $ | 136 | ||||||||
Organic revenue
growth(b)
|
5 | % | 6 | % | 6 | % | 5 | % | ||||||||
Operating margin
|
2 | % | 4 | % | 19 | % | 20 | % |
(a) | Effective January 1, 2011, we changed our internal reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, total revenues of $31 million in third quarter 2010 and $101 million in the |
75
nine months ended September 30, 2010, previously allocated to our International segment, have been included in our Global and North America segments. Operating income of $13 million in third quarter 2010 and $47 million in the nine months ended September 30, 2010, previously allocated to International, has been included in our Global segment. | ||
(b) | Organic revenue growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; and (iv) investment income and other income from reported revenues. |
| Brazil, Chile and Argentina in Latin America; |
| Russia in Eastern Europe; and |
| China and Indonesia in Asia. |
| a $5 million increase in incentive expenses in third quarter 2011, including amortization of cash retention award payments; |
| the impact of the reinstated annual salary review for all employees from April 2011; and |
| increased spending on initiatives to drive future growth, including investment hires; |
| 5 percent organic revenue growth; |
| a net benefit from foreign currency movements, reflecting the benefit of the period-over-period weakening of the US dollar against a number of currencies in which we earn a significant portion of our operating income, notably the Euro, Australian dollar and Pound sterling; and |
| lower pension expense. |
76
| 6 percent positive organic revenue growth; |
| a net benefit from foreign currency movements, reflecting the benefit of the period-over-period weakening of the US dollar against a number of currencies in which we earn a significant portion of our operating income, notably the Euro, Australian dollar and Pound sterling; and |
| lower pension expense; |
| a $14 million increase in incentive expenses in first nine months 2011, including amortization of cash retention award payments; |
| the impact of the reinstated annual salary review for all employees from April 2011; and |
| increased spending on initiatives to drive future growth, including investment hires. |
Three months |
Nine months |
|||||||||||||||
ended September 30, | ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(millions) | ||||||||||||||||
Amortization of intangible assets
|
$ | (18 | ) | $ | (22 | ) | $ | (52 | ) | $ | (64 | ) | ||||
Foreign exchange hedging
|
3 | (2 | ) | 5 | (8 | ) | ||||||||||
Foreign exchange (loss) gain on the UK pension plan asset
|
(1 | ) | (4 | ) | | 2 | ||||||||||
Net gain (loss) on disposal of operations
|
| | 4 | (2 | ) | |||||||||||
2011 Operational Review
|
(15 | ) | | (130 | ) | | ||||||||||
UK FSA regulatory settlement
|
| | (11 | ) | | |||||||||||
Venezuela currency devaluation
|
| | | (12 | ) | |||||||||||
Release of previously established legal reserve
|
| 7 | | 7 | ||||||||||||
Other(a)
|
2 | (1 | ) | (2 | ) | (5 | ) | |||||||||
Total
|
$ | (29 | ) | $ | (22 | ) | $ | (186 | ) | $ | (82 | ) | ||||
(a) | Other includes for the three months and nine months ended September 30, 2011 $5 million and $11 million respectively from the release of funds related to potential legal liabilities. |
77
78
| payment of interest on debt, $110 million of mandatory repayments under our 5-year term loan and the $4 million mandatory repayment of our 6.000% loan notes; |
| capital expenditure; and |
| working capital requirements. |
| the principal amount of outstanding notes; and |
| borrowings under our 5-year term loan facility. |
| a $15 million increase in net income excluding non-cash charges and $171 million for the make-whole amounts and related costs. |
| $9 million favorable movement in the timing of cash collections and other working capital. |
79
| a $15 million decrease in cash payments for acquisitions of subsidiaries, mainly reflecting a reduction in deferred payments in respect of prior year acquisitions; and |
| a $4 million decrease in proceeds on disposal of fixed and intangible assets; |
| a $12 million increase in fixed asset additions. |
80
| the net cash proceeds from the issuance of senior notes due 2016 and 2021 totaling $787 million, as discussed above; and |
| a $20 million increase in cash proceeds from the issuance of shares relating to share option exercises; |
| a $401 million increase in debt repayment, primarily reflecting the first nine months 2011 early repayment of the $500 million 12.875% senior notes due 2016; |
| the $158 million cash paid relating to the make-whole payments on repurchase and redemption of the 12.875% senior notes; and |
| a $185 million first nine months 2011 period-over-period decrease in draw down against our revolving credit facilities, comprising a $90 million repayment in first nine months 2011 compared with a $95 million draw down in first nine months 2010. |
| In March 2011, we issued additional senior notes totaling $800 million, comprising $300 million of |
4.125% senior notes due 2016 and $500 million of 5.750% senior notes due 2021; and | |
| we subsequently repurchased the previously outstanding $500 million of 12.875% senior notes due 2016. |
81
Item 3 | Quantitative and Qualitative Disclosures about Market Risk |
Item 4 | Controls and Procedures |
82
Item 1 | Legal Proceedings |
Item 1A | Risk Factors |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3 | Defaults Upon Senior Securities |
Item 4 | (Removed and Reserved) |
Item 5 | Other Information |
Item 6 | Exhibits |
31 | .1 | Certification Pursuant to Rule 13a-14(a) | ||
31 | .2 | Certification Pursuant to Rule 13a-14(a) | ||
32 | .1 | Certification Pursuant to 18 U.S.C. Section 1350 | ||
32 | .2 | Certification Pursuant to 18 U.S.C. Section 1350 | ||
101 | .INS* | XBRL Instance Document | ||
101 | .SCH* | XBRL Taxonomy Extension Schema Document | ||
101 | .CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101 | .DEF* | XBRL Taxonomy Extension Definition Linkbase Document | ||
101 | .LAB* | XBRL Taxonomy Extension Label Linkbase Document | ||
101 | .PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
83
By: |
/s/ Michael
K. Neborak
|
84
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2011 of Willis Group Holdings plc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ JOSEPH J. PLUMERI |
|||||
Chairman and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 of Willis Group Holdings plc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ michael k. neborak
|
|||||
Group Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ JOSEPH J. PLUMERI |
|||||
Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ MICHAEL K. NEBORAK |
|||||
Group Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
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Earnings Per Share (Details Textual) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
Earnings Per Share Additional (Textual) [Abstract] | |||||||
Restricted stock units outstanding | 1.3 | 1.6 | 1.3 | 1.6 | |||
Antidilutive stock options | 4.7 | 13.4 | 3.3 | [1] | 13.6 | ||
Time Based Options [Member] | |||||||
Earnings Per Share (Textual) [Abstract] | |||||||
Outstanding time-based stock options | 9.6 | 12.0 | 9.6 | 12.0 | |||
Performance Based Options [Member] | |||||||
Earnings Per Share (Textual) [Abstract] | |||||||
Outstanding performance-based stock options | 7.5 | 8.5 | 7.5 | 8.5 | |||
|
Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Millions | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | ||||
CURRENT ASSETS | |||||
Cash and cash equivalents | $ 363 | $ 316 | |||
Accounts receivable, net | 911 | 839 | |||
Fiduciary assets | 10,090 | 9,569 | |||
Deferred tax assets | 21 | 36 | |||
Other current assets | 315 | [1] | 340 | ||
Total current assets | 11,700 | 11,100 | |||
NON-CURRENT ASSETS | |||||
Fixed assets, net | 387 | 381 | |||
Goodwill | 3,297 | 3,294 | |||
Other intangible assets, net | 440 | 492 | |||
Investments in associates | 186 | 161 | |||
Deferred tax assets | 5 | 7 | |||
Pension benefits asset | 261 | 179 | |||
Other non-current assets | 339 | 233 | |||
Total non-current assets | 4,915 | 4,747 | |||
TOTAL ASSETS | 16,615 | 15,847 | |||
CURRENT LIABILITIES | |||||
Fiduciary liabilities | 10,090 | 9,569 | |||
Deferred revenue and accrued expenses | 287 | 298 | |||
Income taxes payable | 38 | 57 | |||
Short-term debt and current portion of long-term debt | 114 | 110 | |||
Deferred tax liabilities | 17 | 9 | |||
Other current liabilities | 274 | 266 | |||
Total current liabilities | 10,820 | 10,309 | |||
NON-CURRENT LIABILITIES | |||||
Long-term debt | 2,285 | 2,157 | |||
Liability for pension benefits | 128 | 164 | |||
Deferred tax liabilities | 124 | 83 | |||
Provisions for liabilities | 179 | 179 | |||
Other-non current liabilities | 362 | [1] | 347 | ||
Total non-current liabilities | 3,078 | 2,930 | |||
Total liabilities | 13,898 | 13,239 | |||
COMMITMENTS AND CONTINGENCIES | |||||
EQUITY | |||||
Ordinary shares, $0.000115 nominal value; Authorized: 4,000,000,000; Issued 173,312,231 shares in 2011 and 170,883,865 shares in 2010, Ordinary shares, EURO 1 nominal value; Authorized: 40,000; Issued 40,000 shares in 2011 and 2010 | |||||
Preference shares, $0.000115 nominal value; Authorized:1,000,000,000; Issued nil shares in 2011 and 2010 | |||||
Additional paid-in capital | 1,050 | 985 | |||
Retained earnings | 2,180 | 2,136 | |||
Accumulated other comprehensive loss, net of tax | (539) | (541) | |||
Treasury shares, at cost, 46,408 shares, $0.000115 nominal value, in 2011 and 2010 and 40,000 shares, EURO 1 nominal value, in 2011 and 2010 | (3) | (3) | |||
Total Willis Group Holdings stockholders' equity | 2,688 | 2,577 | |||
Noncontrolling interests | 29 | 31 | |||
Total equity | 2,717 | 2,608 | |||
TOTAL LIABILITIES AND EQUITY | $ 16,615 | $ 15,847 | |||
|
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011
Euro
EUR (€) | Dec. 31, 2010
Euro
EUR (€) | Sep. 30, 2011
United States of America, Dollars
USD ($) | Dec. 31, 2010
United States of America, Dollars
USD ($) |
---|---|---|---|---|---|---|
EQUITY | ||||||
Common stock, par value | € 1 | € 1 | $ 0.000115 | $ 0.000115 | ||
Common stock, shares authorized | 40,000 | 40,000 | 4,000,000,000 | 4,000,000,000 | ||
Common stock, shares Issued | 40,000 | 40,000 | 173,312,231 | 170,883,865 | ||
Preference stock, nominal value | $ 0.000115 | $ 0.000115 | ||||
Preference stock, shares authorized | 1,000,000,000 | 1,000,000,000 | ||||
Preference stock, shares issued | ||||||
Treasury stock, nominal value | € 1 | € 1 | $ 0.000115 | $ 0.000115 | ||
Treasury stock, shares | 40,000 | 40,000 | 46,408 | 46,408 |
Comprehensive Income (Textual) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Comprehensive Income (Textual) [Abstract] | ||||
Foreign currency translation adjustment, Tax | $ 0 | $ 0 | $ 0 | $ 0 |
Pension funding adjustment, Tax | (5) | (2) | (6) | (7) |
Net loss on derivative instruments, Tax | (1) | (1) | 2 | (3) |
Other Comprehensive Income, Tax | $ (6) | $ (3) | $ (4) | $ (10) |
Derivative Financial Instruments and Hedging Activities (Details) (USD $) In Millions | Sep. 30, 2011 |
---|---|
US dollar [Member] | |
Interest rate risk | |
Interest rate derivatives cash flow hedges, Notional Amount | $ 830 |
Interest rate derivatives cash flow hedges, Fair value | 13 |
Pounds sterling [Member] | |
Interest rate risk | |
Interest rate derivatives cash flow hedges, Notional Amount | 243 |
Interest rate derivatives cash flow hedges, Fair value | 3 |
Euro [Member] | |
Interest rate risk | |
Interest rate derivatives cash flow hedges, Notional Amount | 163 |
Interest rate derivatives cash flow hedges, Fair value | $ 1 |
Segment Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION |
During the periods presented, the Company operated through three
segments: Global, North America and International. Global
provides specialist brokerage and consulting services to clients
worldwide for specific industrial and commercial activities and
is organized by specialism. North America and International
predominantly comprise our retail operations which provide
services to small, medium and major corporates, accessing
Global’s specialist expertise when required.
The Company evaluates the performance of its operating segments
based on organic revenue growth and operating income. For
internal reporting and segmental reporting, the following items
for which segmental management are not held accountable are
excluded from segmental expenses:
The accounting policies of the operating segments are consistent
with those described in Note 2—Basis of Presentation
and Significant Accounting Policies to the Company’s Annual
Report on
Form 10-K
for the year ended December 31, 2010. There are no
inter-segment revenues, with segments operating on a
revenue-sharing basis equivalent to that used when sharing
business with other third-party brokers.
Effective January 1, 2011, the Company changed its internal
reporting structure: Global Markets International, previously
reported within the International segment, is now reported in
the Global segment. In addition, Mexico Retail, which was
previously reported within the International segment, is now
reported in the North America segment. Comparative data has been
adjusted accordingly.
Selected information regarding the Company’s operating
segments is as follows:
.
.
The following table reconciles total consolidated operating
income, as disclosed in the operating segment tables above, to
consolidated income before income taxes and interest in earnings
of associates:
|
Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Details 2) (USD $) In Millions | 9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | ||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ 272 | $ 248 | [1] | ||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Proceeds on disposal of fixed and intangible assets | 10 | 6 | [1] | ||
Additions to fixed assets | (71) | (59) | [1] | ||
Acquisitions of subsidiaries, net of cash acquired | (5) | (20) | [1] | ||
Acquisition of investments in associates | (2) | (1) | [1] | ||
Investment in Trident V Parallel Fund, LP | (4) | (2) | |||
Net cash used in investing activities | (72) | (76) | [1] | ||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
(Repayment of) proceeds from draw down of revolving credit facility | (90) | 95 | [1] | ||
Senior notes issued, net of debt issuance costs | 794 | ||||
Debt issuance costs | (7) | ||||
Repayments of debt | (582) | (181) | [1] | ||
Make-whole on repurchase and redemption of senior notes | (158) | ||||
Proceeds from issue of shares | 46 | 26 | [1] | ||
Excess tax benefits from share-based payment arrangements | 5 | ||||
Dividends paid | (136) | (132) | [1] | ||
Acquisition of noncontrolling interests | (9) | (10) | [1] | ||
Dividends paid to noncontrolling interests | (13) | (24) | [1] | ||
Net cash used in financing activities | (150) | (226) | [1] | ||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 50 | (54) | [1] | ||
Effect of exchange rate changes on cash and cash equivalents | (3) | (8) | [1] | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 316 | 221 | [1] | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 363 | 159 | [1] | ||
Willis Group Holdings [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (31) | (9) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Senior notes issued, net of debt issuance costs | 794 | ||||
Debt issuance costs | (7) | ||||
Proceeds from issue of shares | 46 | 26 | |||
Amounts owed by and to Group undertakings | (664) | 71 | |||
Dividends paid | (136) | (88) | |||
Net cash used in financing activities | 33 | 9 | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 2 | 0 | |||
The Other Guarantors [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 112 | 341 | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Repayments of debt | (500) | ||||
Make-whole on repurchase and redemption of senior notes | (158) | ||||
Amounts owed by and to Group undertakings | 554 | (209) | |||
Dividends paid | (132) | ||||
Acquisition of noncontrolling interests | (8) | ||||
Net cash used in financing activities | (112) | (341) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 0 | 0 | |||
The Issuer [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 19 | 15 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Additions to fixed assets | (17) | (20) | |||
Net cash used in investing activities | (17) | (20) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
(Repayment of) proceeds from draw down of revolving credit facility | (90) | 95 | |||
Repayments of debt | (82) | (171) | |||
Amounts owed by and to Group undertakings | 216 | 51 | |||
Net cash used in financing activities | 44 | (25) | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 46 | (30) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 76 | 104 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 122 | 74 | |||
Other [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 1,061 | 732 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Proceeds on disposal of fixed and intangible assets | 10 | 6 | |||
Additions to fixed assets | (54) | (39) | |||
Acquisitions of subsidiaries, net of cash acquired | (5) | (20) | |||
Acquisition of investments in associates | (2) | (1) | |||
Investment in Trident V Parallel Fund, LP | (4) | (2) | |||
Net cash used in investing activities | (55) | (56) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Repayments of debt | (10) | ||||
Amounts owed by and to Group undertakings | (106) | 87 | |||
Excess tax benefits from share-based payment arrangements | 5 | ||||
Dividends paid | (889) | (733) | |||
Acquisition of noncontrolling interests | (1) | (10) | [1] | ||
Dividends paid to noncontrolling interests | (13) | (24) | |||
Net cash used in financing activities | (1,004) | (690) | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 | (24) | |||
Effect of exchange rate changes on cash and cash equivalents | (3) | (8) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 240 | 117 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 239 | 85 | |||
Consolidating adjustments [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (889) | (821) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Dividends paid | 889 | 821 | |||
Net cash used in financing activities | 889 | 821 | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 0 | $ 0 | |||
|
Document and Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Nov. 04, 2011 | Feb. 18, 2011 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | WILLIS GROUP HOLDINGS PLC | ||
Entity Central Index Key | 0001140536 | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2011 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 6,651,075,613 | ||
Entity Common Stock, Shares Outstanding | 173,552,702 |
Income Taxes (Details) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Components of tax charge | ||||
Ordinary income estimated at annual effective tax rate before tax | $ 52 | $ 369 | ||
Ordinary income taxed at estimated annual effective tax rate tax amount | (11) | (82) | ||
Ordinary income taxed at estimated annual effective tax rate | 22.00% | 22.00% | ||
Items where tax effect is treated discretely: | ||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | (171) | |||
Current tax on make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | (1) | 46 | ||
Effective Income Tax Rate on the make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | 27.00% | |||
Non-taxable gain on disposal of operations before tax | 4 | (2) | ||
Impact of reduction in UK tax rate on deferred tax balances | (2) | (2) | ||
Benefit derived from the reduction in estimate of annual effective tax rate applied to ordinary income of the prior two quarters | 8 | |||
Income before income taxes as reported | 52 | 66 | 202 | 452 |
Tax amount as reported | $ (2) | $ (10) | $ (34) | $ (112) |
Effective tax rate | 4.00% | 17.00% | ||
Income Taxes (Textual) [Abstract] | ||||
Ordinary income taxed at estimated annual effective tax rate | 22.00% | 22.00% | ||
Effective tax rate absent impact of 2011 operational review | 24.00% |
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||
Basis of Presentation and Significant Accounting Policies (Policies) [Abstract] | ||||||||
Balance sheet presentation |
Balance Sheet
Presentation
As disclosed in the Company’s 2010
10-K, the
Company now provides additional disclosure within the unaudited
condensed consolidated balance sheet of:
The Company believes this amended presentation better reflects
the Company’s liquidity position and exposures to credit
risk. Accordingly, the unaudited condensed consolidated
statement of cash flows for the nine months ended
September 30, 2010 has been recast to conform with the new
balance sheet presentation.
| |||||||
Devaluation of Venezuelan currency |
Devaluation of
Venezuelan Currency
With effect from January 1, 2010, the Venezuelan economy
was designated as hyper-inflationary. The Venezuelan government
also devalued the Bolivar Fuerte in January 2010. As a result of
these actions, the Company recorded a $12 million charge in
other operating expenses in the three month period ended
March 31, 2010 to reflect the re-measurement of its net
monetary assets denominated in Venezuelan Bolivar Fuerte at
January 1, 2010.
| |||||||
Recent Accounting Pronouncements |
Recent Accounting
Pronouncements
Fair Value
Measurement and Disclosure
In May 2011, the Financial Accounting Standards Board
(‘FASB’) issued Accounting Standards Update
(‘ASU’)
No. 2011 - 04,
Fair Value Measurement: Amendments to Achieve Common Fair
Value Measurement and Disclosure Requirements in U.S. GAAP
and IFRSs. The new guidance was issued to provide a
consistent definition of fair value and ensure that fair value
measurements and disclosure requirements are similar between US
GAAP and International Financial Reporting Standards
(‘IFRS’). The guidance changes certain fair value
measurement principles and enhances the disclosure requirements
for fair value measurements.
This guidance is effective for interim and annual periods
beginning after December 15, 2011 and is applied
prospectively.
The Company is currently evaluating the impact that adoption of
this guidance will have on the consolidated financial statements.
Other
Comprehensive Income
In June 2011, the FASB issued ASU
No. 2011 - 05,
Presentation of Comprehensive Income to revise the manner
in which entities present comprehensive income in their
financial statements. These changes require that components of
comprehensive income be presented in either a single continuous
statement of comprehensive income or in two separate but
consecutive statements. The amendments do not change the items
that must be reported in other comprehensive income or when an
item of other comprehensive income must be reclassified to net
income.
This guidance is effective for interim and annual periods
beginning after December 15, 2011 and is applied
retrospectively, although early adoption is permitted.
ASU 2011-05
also requires entities to present on the face of the financial
statements reclassification adjustments for items that are
reclassified from other comprehensive income to net income in
the statement(s) where the components of net income and the
components of other comprehensive income are presented. On
November 8, 2011 the FASB exposed a proposal to defer this
requirement. The proposed amendments would be effective at the
same time as the amendments in
Update 2011-05.
The Company is currently evaluating the impact that adoption of
this guidance will have on the consolidated financial statements.
Goodwill
impairment testing
In September 2011, the FASB issued ASU
No. 2011 - 08,
Intangibles — Goodwill and other: testing
goodwill for impairment. The new guidance was issued to
reduce complexity and costs by allowing an entity the option to
make a qualitative evaluation about the likelihood of goodwill
impairment to determine whether it should calculate the fair
value of a reporting unit.
This guidance is effective for interim and annual goodwill
impairment tests performed for fiscal years beginning after
December 15, 2011. Early adoption is permitted.
|
Salaries and Benefits Expense (Details Textual) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2011
Position | Dec. 31, 2010 | Sep. 30, 2010 | Sep. 30, 2010
Employee Severance [Member] | Sep. 30, 2011
Employee Severance [Member]
Position | Sep. 30, 2010
Employee Severance [Member]
Position | |
Salaries and Benefits Expense (Textual) [Abstract] | |||||||
Severance costs | $ 3 | $ 14 | |||||
Positions eliminated | 800 | 70 | 450 | ||||
Salaries and Benefits Expense Additional (Textual) [Abstract] | |||||||
Operational Review - total severance costs | 6 | 61 | 61 | ||||
Operational Review - waiver of retention award cost | 1 | 3 | |||||
Operational Review - total expected charge for the year | 80 | ||||||
Operational Review - one-time benefit arrangement severance costs | 55 | ||||||
Operational Review - existing benefit arrangement severance costs | 6 | ||||||
Operational Review - buy-out of previously existing incentive schemes and other contractual arrangements | 0 | 35 | |||||
Unamortized cash retention awards | $ 243 | $ 243 | $ 173 | $ 193 |
Segment Information (Details Textual) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Segment Information (Textual) [Abstract] | ||||
Segment revenue reallocated to other segments | $ 31 | $ 101 | ||
Segment operating income reallocated to other segments | 13 | 47 | ||
Segment Information Additional (Textual) [Abstract] | ||||
Total Benefits related to potential legal liabilities | 5 | 11 | ||
Global [Member] | ||||
Segment Information (Textual) [Abstract] | ||||
Segment revenue reallocated from other segment | 29 | 94 | ||
Segment operating income reallocated from other segment | 13 | 47 | ||
North America [Member] | ||||
Segment Information (Textual) [Abstract] | ||||
Segment revenue reallocated from other segment | 2 | 7 | ||
Segment operating income reallocated from other segment | $ 0 | $ 0 |
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Commitments and Contingencies | 9 Months Ended | ||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||
Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
7. COMMITMENTS
AND CONTINGENCIES
Debt Obligations
and Facilities
Changes in the Company’s debt obligations are set out in
Note 14 — ‘Debt’ to the Condensed
Consolidated Financial Statements.
Guarantees
Guarantees issued by Willis Group Holdings and certain of its
subsidiaries with respect to the senior notes are discussed in
Note 19 — ‘Financial information for
parent guarantor, other guarantor subsidiaries and non-guarantor
subsidiaries’ and
Note 20 — ‘Financial information for
parent issuer, guarantor subsidiaries and non-guarantor
subsidiaries’.
The revolving credit facilities are fully and unconditionally
guaranteed on a joint and several basis by Willis Netherlands
Holdings B.V., Willis Investment UK Holdings Limited, TA1
Limited, Trinity Acquisition plc, Willis Group Limited and
Willis Group Holdings plc.
Other Contractual
Obligations
In July 2010, the Company made a capital commitment of
$25 million to Trident V Parallel Fund, LP. As at
September 30, 2011 there had been approximately
$6 million of capital contributions.
In May 2011, the Company made a capital commitment of
$10 million to Dowling Capital Partners I, LP. As at
September 30, 2011 there had been no capital contributions.
Claims, Lawsuits
and Other Proceedings
In the ordinary course of business, the Company is subject to
various actual and potential claims, lawsuits, and other
proceedings relating principally to alleged errors and omissions
in connection with the placement of insurance and reinsurance.
Similar to other corporations, the Company is also subject to a
variety of other claims, including those relating to the
Company’s employment practices. Some of the claims,
lawsuits and other proceedings seek damages in amounts which
could, if assessed, be significant.
Errors and omissions claims, lawsuits, and other proceedings
arising in the ordinary course of business are covered in part
by professional indemnity or other appropriate insurance. The
terms of this insurance vary by policy year and self-insured
risks have increased significantly in recent years. Regarding
self-insured risks, the Company has established provisions which
are believed to be adequate in the light of current information
and legal advice, and the Company adjusts such provisions from
time to time according to developments.
On the basis of current information, the Company does not expect
that the actual claims, lawsuits and other proceedings, to which
the Company is subject, or potential claims, lawsuits, and other
proceedings relating to matters of which it is aware, will
ultimately have a material adverse effect on the Company’s
financial condition, results of operations or liquidity.
Nonetheless, given the large or indeterminate amounts sought in
certain of these actions, and the inherent unpredictability of
litigation and disputes with insurance companies, it is possible
that an adverse outcome in certain matters could, from time to
time, have a material adverse effect on the Company’s
results of operations or cash flows in particular quarterly or
annual periods.
The material actual or potential claims, lawsuits and other
proceedings, of which the Company is currently aware, are:
Assurance of
Discontinuance
In connection with the investigation launched by the New York
State Attorney General in April 2004 concerning, among other
things, contingent commissions paid by insurers to insurance
brokers, in April 2005, the Company entered into an Assurance of
Discontinuance (‘Original AOD’) with the New York
State Attorney General and the Superintendent of the New York
Insurance Department and paid $50 million to eligible
clients. As part of the Original AOD, the Company also agreed
not to accept contingent compensation and to disclose to
customers any compensation the Company will receive in
connection with providing policy placement services to the
customer. The Company also resolved similar investigations
launched by the Minnesota Attorney General, the Florida Attorney
General, the Florida Department of Financial Services, and the
Florida Office of Insurance Regulation for amounts that were not
material to the Company.
Similarly, in August 2005, HRH entered into an agreement with
the Attorney General of the State of Connecticut and the
Insurance Commissioner of the State of Connecticut to resolve
all issues related to their investigations into certain
insurance brokerage and insurance agency practices and to settle
a lawsuit brought in August 2005 by the Connecticut Attorney
General alleging violations of the Connecticut Unfair Trade
Practices Act and the Connecticut Unfair Insurance
Practices Act. As part of this settlement, HRH agreed to take
certain actions including establishing a $30 million
national fund for distribution to certain clients; enhancing
disclosure practices for agency and broker clients; and
declining to accept contingent compensation on brokerage
business.
On February 16, 2010, the Company entered into the Amended
and Restated Assurance of Discontinuance with the Attorney
General of the State of New York and the Amended and Restated
Stipulation with the Superintendent of Insurance of the State of
New York (the ‘Amended and Restated AOD’) on behalf of
itself and its named subsidiaries. The Amended and Restated AOD
was effective February 11, 2010 and supersedes and replaces
the Original AOD.
The Amended and Restated AOD specifically recognizes that the
Company has substantially met its obligations under the Original
AOD and ends many of the requirements previously imposed. It
relieves the Company of a number of technical compliance
obligations that have imposed significant administrative and
financial burdens on its operations. The Amended and Restated
AOD no longer limits the types of compensation the Company can
receive and has lowered the compensation disclosure
requirements. The Amended and Restated AOD requires the Company,
among other things to: (i) in New York, and each of the
other 49 states of the United States, the District of
Columbia and U.S. territories, provide compensation
disclosure that will, at a minimum, comply with the terms of the
applicable regulations, as may be amended from time to time, or
the provisions of the AOD that existed prior to the adoption of
the Amended and Restated AOD; and (ii) maintain its
compliance programs and continue to provide appropriate training
to relevant employees in business ethics, professional
obligations, conflicts of interest, and antitrust and trade
practices compliance.
European
Commission Sector Inquiry
In 2006, the European Commission issued questionnaires pursuant
to its Sector Inquiry or, in respect of Norway, the European
Free Trade Association Surveillance Authority, related to
insurance business practices, including compensation
arrangements for brokers, to at least 150 European brokers
including our operations in nine European countries. The Company
filed responses to the European Commission and the European Free
Trade Association Surveillance Authority questionnaires. The
European Commission reported on September 25, 2007,
expressing concerns over potential conflicts of interest in the
industry relating to remuneration and binding authorities and
also over the nature of the coinsurance market.
The Company cooperated with both the European Free Trade
Association Surveillance Authority and the European Commission
to resolve issues raised in its final report regarding
coinsurance as required of the industry by the European
Commission. The Company has recently learned that the European
Commission has renewed its interest in the coinsurance market
and we anticipate that, like our competitors and insurers, our
European subsidiaries will receive further questionnaires on
this matter later this year or early 2012.
Contingent
Compensation Class Action
Since August 2004, the Company and HRH (along with various other
brokers and insurers) have been named as defendants in purported
class actions in various courts across the United States. All of
these actions have been consolidated into a single action in the
US District Court for the District of New Jersey
(‘MDL’). These actions allege that the brokers
breached their duties to their clients by entering into
contingent compensation agreements with either no disclosure or
limited disclosure to clients and participated in other improper
activities. Plaintiffs seek monetary damages, including punitive
damages, and certain equitable relief. In May 2011, the majority
of defendants, including the Company and HRH, entered into a
written settlement agreement with plaintiffs. On June 28,
2011, the Judge entered an Order granting preliminary approval
to the settlement agreement. Notice of the settlement will be
sent to all members of the class and each member will have the
opportunity to opt out of the settlement and pursue its own
individual claim against any defendant. A Fairness Hearing to
decide if the settlement should be given final approval took
place on September 14, 2011, but the Judge has not yet
issued his decision on approval of the settlement. A total of 84
members of the class have opted out of the settlement. The
amount of the proposed settlement to be paid by the Company and
HRH is immaterial and was previously reserved.
Additional actions could be brought in the future by individual
policyholders. The Company disputes the allegations in all of
these suits and has been and intends to continue to defend
itself vigorously against these actions. The outcomes of these
lawsuits, however, including any losses or other payments that
may occur as a result, cannot be predicted at this time.
Reinsurance
Market Dispute
Various legal proceedings are pending, have concluded, or may
commence between reinsurers, reinsureds and in some cases their
intermediaries, including reinsurance brokers, relating to
personal accident excess of loss reinsurance for the years 1993
to 1998. The proceedings principally concern allegations by
reinsurers that they have sustained substantial losses due to an
alleged abnormal ‘spiral’ in the market in which the
reinsurance contracts were placed, the existence and nature of
which, as well as other information, was not disclosed to them
by the reinsureds or their reinsurance broker.
A ‘spiral’ is a market term for a situation in which
reinsureds and reinsurers reinsure each other with the effect
that the same loss or portion of that loss moves through the
market multiple times.
The reinsurers concerned have taken the position that, despite
their decisions to underwrite risks or a group of risks, they
are no longer bound by their reinsurance contracts. As a result,
they have stopped settling claims and are seeking to recover
claims already paid. The Company also understands that there
have been arbitration awards in relation to a
‘spiral’, among other things, in which the reinsurer
successfully argued that it was no longer bound by parts of its
reinsurance program. Willis Limited, the Company’s
principal insurance brokerage subsidiary in the United Kingdom,
acted as the reinsurance broker or otherwise as intermediary,
but not as an underwriter, for numerous personal accident
reinsurance contracts. Due to the small number of reinsurance
brokers generally, Willis Limited also utilized other brokers
active in this market as
sub-agents,
including brokers who are parties to the legal proceedings
described above, for certain contracts and may be responsible
for any errors and omissions they may have made. In July 2003,
one of the reinsurers received a judgment in the English High
Court against certain parties, including a
sub-broker
Willis Limited used to place two of the contracts involved in
this trial. Although neither the Company nor any of its
subsidiaries were a party to this proceeding or any arbitration,
Willis Limited entered into tolling agreements with certain of
the principals to the reinsurance contracts tolling the statute
of limitations pending the outcome of proceedings between the
reinsureds and reinsurers.
Two former clients of Willis Limited, American Reliable
Insurance Company and one of its associated companies
(‘ARIC’), and CNA Insurance Company Limited and two of
its associated companies (‘CNA’) terminated their
respective tolling agreements with Willis Limited and commenced
litigation in September 2007 and January 2008, respectively, in
the English Commercial Court against Willis Limited. ARIC
alleged conspiracy between a former Willis Limited employee and
the ARIC underwriter as well as negligence and CNA alleged
deceit and negligence by the same Willis Limited employee
both in connection with placements of personal accident
reinsurance in the excess of loss market in London and
elsewhere. On June 9, 2009, Willis Limited entered into a
settlement agreement under which Willis Limited paid a
total of $139 million to ARIC, which was covered by errors
and omissions insurance.
On September 11, 2009, Willis Limited entered into a
settlement agreement under which Willis Limited paid a total of
$130 million to CNA. The Company has collected in full from
errors and omissions insurers. The settlements include no
admission of wrongdoing by any party. Each party also realized
and waived all claims it may have against any of the other
parties arising out of or in connection with the subject matter
of the litigation.
From time to time, former clients or their reinsurers request
co-operation from the Company and suggest that claims may be
asserted against the Company. Such claims may be made against
the Company if reinsurers do not pay claims on policies issued
by them. A number of mutual releases have been entered by the
Company or its subsidiaries with former clients
and/or
reinsurers for no financial consideration. The Company cannot
predict at this time whether any further claims will be made or
the damages that may be alleged.
Gender
Discrimination Class Action
In December 2006, a purported class action was filed against the
Company in the United States District Court, Southern District
of New York, alleging that the Company discriminated against
female officers and officer equivalent employees on the basis of
their gender and seeking injunctive relief, monetary damages and
attorneys’ fees and costs. In January 2011, the Company
reached a monetary settlement with plaintiffs that resolves all
individual and class claims. The amount of this settlement is
not material. However, this matter cannot be formally and
finally settled until the Court approves the settlement and
until members of the class are given an opportunity to object to
the terms of the settlement. The Court has given preliminary
approval to the settlement. Notice of the settlement has been
provided to the class members and the Court will hold a Fairness
Hearing on December 12, 2011 to decide if final approval
should be given to the settlement.
World Trade
Center
The Company acted as the insurance broker, but not as an
underwriter, for the placement of both property and casualty
insurance for a number of entities which were directly impacted
by the September 11, 2001 destruction of the World Trade
Center complex, including Silverstein Properties LLC, which
acquired a
99-year
leasehold interest in the twin towers and related facilities
from the Port Authority of New York and New Jersey in July 2001.
Although the World Trade Center complex insurance was bound at
or before the July 2001 closing of the leasehold acquisition,
consistent with standard industry practice, the final policy
wording for the placements was still in the process of being
finalized when the twin towers and other buildings in the
complex were destroyed on September 11, 2001. There have
been a number of lawsuits in the United States between the
insured parties and the insurers for several placements. Other
disputes may arise in respect of insurance placed by us which
could affect the Company including claims by one or more of the
insureds that the Company made culpable errors or omissions in
connection with our brokerage activities. However, the Company
does not believe that our role as broker will lead to
liabilities which in the aggregate would have a material adverse
effect on our results of operations, financial condition or
liquidity.
Stanford
Financial Group Litigation
The Company has been named as a defendant in six similar
lawsuits relating to the collapse of The Stanford Financial
Group (‘Stanford’), for which Willis of Colorado, Inc.
acted as broker of record on certain lines of insurance. The
complaints in these actions generally allege that the defendants
actively and materially aided Stanford’s alleged fraud by
providing Stanford with certain letters regarding coverage that
they knew would be used to help retain or attract actual or
prospective Stanford client investors. The complaints further
allege that these letters, which contain statements about
Stanford and the insurance policies that the defendants placed
for Stanford, contained untruths and omitted material facts and
were drafted in this manner to help Stanford promote and sell
its allegedly fraudulent certificates of deposit.
The six actions are as follows:
On May 10, 2011, the court presiding over the
Stanford-related actions in the Northern District of Texas
entered an order providing that it would consider the
applicability of SLUSA to the Stanford-related actions based on
the decision in a separate Stanford action not involving a
Willis entity, Roland v. Green, Civil Action
No. 3:10-CV-0224-N.
On August 31, 2011, the court issued its decision in
Roland, dismissing that action with prejudice under
SLUSA. On September 23, 2011, the plaintiffs in Roland
filed a notice of appeal to the U.S. Court of Appeals
for the Fifth Circuit, and, on October 6, 2011, they filed
a motion in the Court of Appeals to expedite the appeal. On
October 14, 2011, the Fifth Circuit granted the motion to
expedite the appeal.
On October 26, 2011, the plaintiffs in Troice filed
a notice of voluntary dismissal without prejudice with respect
to those claims asserted in their Third Amended
Class Action Complaint on an individual (i.e.,
non-class)
basis.
On October 27, 2011, the court in Troice entered an
order (i) dismissing with prejudice those claims asserted
in the Third Amended Class Action Complaint on a class
basis on the grounds set forth in the Roland decision
discussed above and
(ii) dismissing without prejudice those claims asserted in
the Third Amended Class Action Complaint on an individual
basis. Also on October 27, 2011, the court entered a final
judgment in the action.
Additional actions could be brought in the future by other
investors in certificates of deposit issued by Stanford and its
affiliates. The Company disputes these allegations and intends
to defend itself vigorously against these actions. The outcomes
of these actions, however, including any losses or other
payments that may occur as a result, cannot be predicted at this
time.
Regulatory
Investigation
Given the increased interest expressed by US and UK regulators
in the effectiveness of compliance controls relating to
financial crime in our market sector in particular, we began a
voluntary internal review of our policies and controls four
years ago. This review includes analysis and advice from
external experts on best practices, review of public regulatory
decisions, and discussions with government regulators in the US
and UK. In addition, during 2010 and 2011 the UK Financial
Services Authority (the ‘FSA’) conducted an
investigation of Willis Limited’s, our UK brokerage
subsidiary, compliance systems and controls between 2005 and
2009. On July 21, 2011, we and the FSA announced a
settlement under which the FSA concluded its investigation by
assessing a £7 million ($11 million) fine on
Willis Limited for lapses in its implementation and
documentation of its controls to counter the risks of improper
payments being made to non-FSA authorized overseas third parties
engaged to help win business, particularly in high risk
jurisdictions.
As a result of the FSA settlement, we are conducting a further
internal review of all payments made between 2005 and 2009. We
also continue to fully cooperate with our US regulators, however
we are unable to predict at this time when our discussions with
them will be concluded. We do not believe that this further
internal review or our discussions with the US regulators will
result in any material fines or sanctions, but there can be no
assurance that any resolution will not have an adverse impact on
our ability to conduct our business in certain jurisdictions.
While we believe that our current systems and controls are
adequate and in accordance with all applicable laws and
regulations, we cannot assure that such systems and controls
will prevent any violations of applicable laws and regulations.
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Financial Information for Parent Issuer, Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statement of Operations |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Balance Sheet |
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Condensed Consolidated Statement of Cash Flows |
|
Supplemental Disclosures of Cash Flow Information (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Disclosures of Cash Flow Information (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental disclosures regarding cash flow information and non-cash flow investing and financing activities |
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Financial Information For Parent Issuer, Guarantor Subsidiaries and Non-Guarantor Subsidiaries | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information for Parent Issuer, Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES |
The Company may offer debt securities, preferred stock, ordinary
stock and other securities pursuant to an effective shelf
registration on
Form S-3.
On March 17, 2011, the Company issued senior notes totaling
$800 million under its existing registration statement. The
debt securities issued (‘Holdings Debt Securities’),
are guaranteed by certain of the Company’s subsidiaries.
Therefore, the Company is providing the condensed consolidating
financial information below. The following 100 percent
directly or indirectly owned subsidiaries fully and
unconditionally guarantee the Holdings Debt Securities on a
joint and several basis: Willis Netherlands Holdings B.V.,
Willis Investment UK Holdings Limited, TA I Limited, Trinity
Acquisition plc, Willis Group Limited and Willis North America
(the ‘Guarantors’).
The guarantor structure described above differs from the
existing guarantor structure associated with the senior notes
issued by Willis North America (the ‘Willis North America
Debt Securities’) (and for which condensed consolidating
financial information is presented in Note 19) in that
Willis Group Holdings is the Parent Issuer and Willis North
America is a subsidiary guarantor.
Presented below is condensed consolidating financial information
for:
The equity method has been used for investments in subsidiaries
in the condensed consolidating balance sheets of Willis Group
Holdings and the Guarantors. Investments in subsidiaries in the
condensed consolidating balance sheet for Other represents the
cost of investment in subsidiaries recorded in the parent
companies of the non-guarantor subsidiaries.
The entities included in the Guarantors column as of
September 30, 2011 and December 31, 2010 are Willis
Netherlands Holdings B.V., Willis Investment UK Holdings
Limited, TA I Limited, Trinity Acquisition plc, Willis Group
Limited and Willis North America.
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Balance Sheet
Condensed
Consolidating Balance Sheet
Condensed
Consolidating Statement of Cash Flows
Condensed
Consolidating Statement of Cash Flows
|
Other Assets | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS |
An analysis of other assets is as follows:
|
Salaries and Benefits Expense | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Salaries and Benefits Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SALARIES AND BENEFITS EXPENSE |
3. SALARIES
AND BENEFITS EXPENSE
Severance
Costs
As part of the Company’s 2011 Operational Review, the
Company incurred severance costs of $61 million in the nine
months ended September 30, 2011 (three months ended
September 30, 2011: $6 million). These costs relate to
approximately 800 positions that have been or are in the process
of being eliminated.
$55 million of these severance costs for these employees
were recognized pursuant to a one-time benefit arrangement, with
the remaining $6 million recognized pursuant to the terms
of employees’ existing benefit arrangements or employee
arrangements. All of these costs have been recognized within
salaries and benefits.
In addition to the severance incurred as part of the 2011
Operational Review, an additional charge of $3 million in
the nine months ended September 30, 2011 (three months
ended September 30, 2011: $1 million) was recognised
within salaries and benefits relating to the write-off of
retention awards held on the balance sheet for the approximately
800 positions that have been eliminated.
The Company’s severance liability under the 2011
Operational Review was:
It is estimated that a total of $80 million will be
incurred under the 2011 Operational Review for severance
throughout 2011 across the Group.
The Company evaluates the performance of its operating segments
based on organic revenue growth and operating income. For
internal reporting and segmental reporting, segmental management
are not held accountable for certain items deemed to be
centrally-controlled costs and initiatives, which includes the
2011 Operational Review. See
Note 18 — Segment Information for an
analysis of centrally-controlled costs and initiatives,
including the 2011 Operational Review costs, disclosed within
‘Corporate and Other’.
Severance costs also arise in the normal course of business and
these charges amounted to a nominal amount in the nine months
ended September 30, 2011 (2010: $14 million). These
costs relate to approximately 70 positions (2010: 450 positions)
that have been or are in the process of being eliminated. Of
these costs, $nil was incurred in the three months ended
September 30, 2011 (2010: $3 million).
Other Salaries
and Benefits Expense
The Company also incurred other salaries and benefits costs as
part of the 2011 Operational Review of $35 million in the
nine months ended September 30, 2011 (three months ended
September 30, 2011: $nil) relating primarily to the buy out
of previously existing incentive schemes and other contractual
arrangements.
Cash Retention
Awards
As part of the Company’s incentive compensation, the
Company makes annual cash retention awards to its employees.
Employees must repay a proportionate amount of these awards if
they voluntarily leave the Company’s employ (other than in
the event of retirement or permanent disability) within a
certain time period, currently up to three years. The Company
makes cash payments to its employees in the year it grants these
retention awards and recognizes these payments ratably over the
period they are subject to repayment, beginning in the quarter
in which the award is made. The unamortized portion of cash
retention awards is recorded within Other Assets.
The following table sets out the amount of cash retention awards
made and the related amortization of those awards for the three
and nine months ended September 30, 2011 and 2010:
Unamortized cash retention awards totaled $243 million as
of September 30, 2011 (December 31, 2010:
$173 million; September 30, 2010: $193 million).
|
Other Assets (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Analysis of Other Assets |
|
Fair Value Measurement | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT |
The following table presents, for each of the fair-value
hierarchy levels, the Company’s assets and liabilities that
are measured at fair value on a recurring basis:
The estimated fair value of the Company’s financial
instruments held or issued to finance the Company’s
operations is summarized below. Certain estimates and judgments
were required to develop the fair value amounts. The fair value
amounts shown below are not necessarily indicative of the
amounts that the Company would realize upon disposition nor do
they indicate the Company’s intent or ability to dispose of
the financial instrument.
The following methods and assumptions were used by the Company
in estimating its fair value disclosure for financial
instruments:
Cash and cash equivalents—The estimated fair value of these
financial instruments approximates their carrying values due to
their short maturities.
Fiduciary funds-restricted—Fair values are based on quoted
market values.
Long-term debt excluding the fair value hedge—Fair values
are based on quoted market values.
Derivative financial instruments—Market values have been
used to determine the fair value of interest rate swaps and
forward foreign exchange contracts based on estimated amounts
the Company would receive or have to pay to terminate the
agreements, taking into account the current interest rate
environment or current foreign currency forward rates.
|
Debt | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT |
Short-term debt and current portion of the long-term debt
consists of the following:
Long-term debt consists of the following:
The 5-year
term loan facility bears interest at LIBOR plus 2.250% and is
repayable at $27 million per quarter, with a final payment
of $115 million currently due in the fourth quarter of 2013.
In 2011, the Company issued $300 million of
4.125% senior notes due 2016 and $500 million of
5.750% senior notes due 2021. The effective interest rates
of these senior notes are 4.240% and 5.871% respectively, which
include the impact of the discount upon issuance. The proceeds
were used to repurchase and redeem $500 million of
12.875% senior notes due 2016 including a make-whole
payment (representing a slight discount to the contractual
make-whole amount) of $158 million. Following the
repurchase the Company wrote off $13 million of unamortized
debt issuance costs.
|
Equity and Noncontrolling Interests (Details 1) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Effects of changes in ownership interest in subsidiaries | ||||
Net income attributable to Willis Group Holdings | $ 60 | $ 64 | $ 179 | $ 357 |
Transfers From Noncontrolling Interest: | ||||
Decrease in Willis Group Holdings paid-in capital for purchase of noncontrolling interests | (19) | |||
Net Transfers to Noncontrolling Interests | (19) | |||
Change from net income attributable to Willis Group Holdings and transfers from noncontrolling interests | 179 | 338 | ||
Willis Group Holdings stockholders [Member] | ||||
Effects of changes in ownership interest in subsidiaries | ||||
Net income attributable to Willis Group Holdings | $ 179 | $ 357 |
Goodwill | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
Goodwill represents the excess of the cost of businesses
acquired over the fair market value of identifiable net assets
at the dates of acquisition. Goodwill is not amortized but is
subject to impairment testing annually and whenever facts or
circumstances indicate that the carrying amounts may not be
recoverable.
When a business entity is sold, goodwill is allocated to the
disposed entity based on the fair value of that entity compared
to the fair value of the reporting unit in which it is included.
The changes in the carrying amount of goodwill by operating
segment for the nine months ended September 30, 2011 and
the year ended December 31, 2010 are as follows:
|
Fair Value Measurement (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the estimated fair value of the company's financial instruments held or issued to finance the company's operations |
|
Derivative Financial Instruments and Hedging Activities | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Financial Instruments and Hedging Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
Fair value of
derivative financial instruments
In addition to the note below, see Note 9 for information
about the fair value hierarchy of derivatives.
Primary risks
managed by derivative financial instruments
The main risks arising from the Company’s financial
instruments are interest rate risk, liquidity risk, foreign
currency risk and credit risk. The Company’s board of
directors reviews and agrees to policies for managing each of
these risks as summarized below.
The Company enters into derivative transactions (principally
interest rate swaps and forward foreign currency contracts) in
order to manage interest rate and currency risks arising from
the Company’s operations and its sources of finance. The
Company does not hold financial or derivative instruments for
trading purposes.
Interest Rate
Risk
As a result of the Company’s operating activities, the
Company receives cash for premiums and claims which it deposits
in short-term investments denominated in US dollars and other
currencies. The Company earns interest on these funds, which is
included in the Company’s financial statements as
investment income. These funds are regulated in terms of
access and the instruments in which they may be invested, most
of which are short-term in maturity. In order to manage interest
rate risk arising from these financial assets, the Company
enters into interest rate swaps to receive a fixed rate of
interest and pay a variable rate of interest denominated in the
various currencies related to the short-term investments. The
use of interest rate contracts essentially converts groups of
short-term variable rate investments to fixed rates.
The fair value of these contracts is recorded in other assets
and other liabilities. For contracts that qualify as cash flow
hedges for accounting purposes, the effective portions of
changes in fair value are recorded as a component of other
comprehensive income.
At September 30, 2011, the Company had the following
derivative financial instruments that were designated as cash
flow hedges of interest rate risk:
The Company’s operations are financed principally by
$2,050 million fixed rate senior notes and
$328 million under a
5-year term
loan facility. Of the fixed rate senior notes, $350 million
are due 2015, $300 million are due 2016, $600 million
are due 2017, $300 million are due 2019 and
$500 million are due 2021. At September 30, 2011, we
had $nil outstanding under our $300 million revolving
credit facility and $nil outstanding under both our
$200 million facility and our $20 million UK facility
which is solely for use by our main regulated UK entity in
certain exceptional circumstances.
The 5-year
term loan facility bears interest at LIBOR plus 2.250%. Drawings
under the revolving $300 million credit facility bear
interest at LIBOR plus 2.250%. Drawings under the revolving
$200 million credit facility bear interest at LIBOR plus a
margin of either 1.750% or 2.750% depending upon the currency of
the loan. This margin applies while the Company’s debt
rating remains BBB-/Baa3. Should the Company’s debt rating
change, then the margin will change in accordance with the
credit facilities agreements.
During the nine months ended September 30, 2010, the
Company entered into a series of interest rate swaps for a total
notional amount of $350 million to receive a fixed rate and
pay a variable rate on a semi-annual basis, with a maturity date
of July 15, 2015. The Company has designated and accounts
for these instruments as fair value hedges against its
$350 million 5.625% senior notes due 2015. The fair
values of the interest rate swaps are included within other
assets or other liabilities and the fair value of the hedged
element of the senior notes is included within long-term debt.
At September 30, 2011 and December 31, 2010, the
Company’s interest rate swaps were all designated as
hedging instruments.
Liquidity
Risk
The Company’s objective is to ensure that it has the
ability to generate sufficient cash either from internal or
external sources, in a timely and cost-effective manner, to meet
its commitments as they fall due. The Company’s management
of liquidity risk is embedded within its overall risk management
framework. Scenario analysis is continually undertaken to ensure
that the Company’s resources can meet its liquidity
requirements. These resources are supplemented by access to a
total $520 million under three revolving credit facilities.
Foreign Currency
Risk
The Company’s primary foreign exchange risks arise:
The foreign exchange risks in its London market operations are
hedged as follows:
The Company does not hedge net income earned within foreign
subsidiaries outside of the UK.
The fair value of foreign currency contracts is recorded in
other assets and other liabilities. For contracts that qualify
as accounting hedges, changes in fair value resulting from
movements in the spot exchange rate are recorded as a component
of other comprehensive income whilst changes resulting from a
movement in the time value are recorded in interest expense. For
contracts that do not qualify for hedge accounting, the total
change in fair value is recorded in interest expense. Amounts
held in comprehensive income are reclassified into earnings when
the hedged exposure affects earnings.
At September 30, 2011 and December 31, 2010, the
Company’s foreign currency contracts were all designated as
hedging instruments except for those relating to short-term cash
flows in its London market operations.
The table below summarizes by major currency the contractual
amounts of the Company’s forward contracts to exchange
foreign currencies for pounds sterling in the case of US dollars
and US dollars for Euro and Japanese yen at September 30,
2011.
Credit Risk and
Concentrations of Credit Risk
Credit risk represents the loss that would be recognized at the
reporting date if counterparties failed to perform as contracted
and from movements in interest rates and foreign exchange rates.
The Company currently does not anticipate non-performance by its
counterparties. The Company generally does not require
collateral or other security to support
financial instruments with credit risk; however, it is the
Company’s policy to enter into master netting arrangements
with counterparties as practical.
Concentrations of credit risk that arise from financial
instruments exist for groups of customers or counterparties when
they have similar economic characteristics that would cause
their ability to meet contractual obligations to be similarly
affected by changes in economic or other conditions. Financial
instruments on the balance sheet that potentially subject the
Company to concentrations of credit risk consist primarily of
cash and cash equivalents, accounts receivable and derivatives
which are recorded at fair value.
The Company maintains a policy providing for the diversification
of cash and cash equivalent investments and places such
investments in an extensive number of financial institutions to
limit the amount of credit risk exposure. These financial
institutions are monitored on an ongoing basis for credit
quality predominantly using information provided by credit
agencies.
Concentrations of credit risk with respect to receivables are
limited due to the large number of clients and markets in which
the Company does business, as well as the dispersion across many
geographic areas. Management does not believe significant risk
exists in connection with the Company’s concentrations of
credit as of September 30, 2011.
Derivative
Financial Instruments
The table below presents the fair value of the Company’s
derivative financial instruments and their balance sheet
classification at September 30, 2011 and December 31,
2010:
Cash Flow
Hedges
The table below presents the effects of derivative financial
instruments in cash flow hedging relationships on the
consolidated statements of operations and the consolidated
statements of equity for the three and nine months ended
September 30, 2011 and 2010:
Amounts above shown gross of tax.
For interest rate swaps all components of each derivative’s
gain or loss were included in the assessment of hedge
effectiveness. For foreign exchange contracts, only the changes
in fair value resulting from movements in the spot exchange
rates are included in this assessment. In instances where the
timing of expected cashflows can be matched exactly to the
maturity of the foreign exchange contract, then changes in fair
value attributable to movement in the forward points are also
included.
At September 30, 2011 the Company estimates there will be
$5 million of net derivative gains reclassified from
accumulated comprehensive income into earnings within the next
twelve months.
Fair Value
Hedges
The table below presents the effects of derivative financial
instruments in fair value hedging relationships on the
consolidated statements of operations for the three and nine
months ended September 30, 2011 and 2010.
All components of each derivative’s gain or loss were
included in the assessment of hedge effectiveness.
|
Commitments and Contingencies (Details) In Millions | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011
USD ($) | Sep. 30, 2010
USD ($) | Jul. 21, 2011
USD ($) | Jul. 21, 2011
GBP (£) | Jun. 09, 2009
ARIC [Member]
USD ($) | Sep. 11, 2009
CNA [Member]
USD ($) | Jul. 02, 2009
Troice [Member]
USD ($) | Aug. 06, 2009
Canabal [Member]
USD ($) | Jul. 31, 2010
Trident V Parallel Fund [Member]
USD ($) | Sep. 30, 2011
Trident V Parallel Fund [Member]
USD ($) | May 31, 2011
Dowling Capital Partners I [Member]
USD ($) | Sep. 30, 2011
Dowling Capital Partners I [Member]
USD ($) | Sep. 30, 2011
Casanova [Member]
USD ($) | Mar. 11, 2011
Rishmague [Member]
USD ($) | Sep. 30, 2011
Rupert [Member]
USD ($) | |
Additional Commitments and Contingencies (Textual) [Abstract] | |||||||||||||||
Legal settlements paid | $ 139 | $ 130 | |||||||||||||
Minimum damage sought | 1,000 | 1,000 | 5 | 37 | 300 | ||||||||||
Capital commitments | 25 | 10 | |||||||||||||
Capital contributions | 4 | 2 | 6 | 0 | |||||||||||
Commitments and Contingencies (Textual) [Abstract] | |||||||||||||||
Payments made to eligible clients under Assurance of Discontinuance | 50 | ||||||||||||||
Amount of national fund for distribution to certain clients | 30 | ||||||||||||||
Amount of settlement of fine regarding investigation | $ 11 | £ 7 |
Nature of Operations | 9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2011 | |||||
Nature of Operations [Abstract] | |||||
NATURE OF OPERATIONS |
Willis Group Holdings and its subsidiaries provide a broad range
of insurance and reinsurance broking and risk management
consulting services to its clients worldwide, both directly and
indirectly through its associates. The Company provides both
specialized risk management advisory and consulting services on
a global basis to clients engaged in specific industrial and
commercial activities, and services to small, medium and major
corporates through its retail operations.
In its capacity as an advisor and insurance broker, the Company
acts as an intermediary between clients and insurance carriers
by advising clients on risk management requirements, helping
clients determine the best means of managing risk, and
negotiating and placing insurance risk with insurance carriers
through the Company’s global distribution network.
|
Financial Information for Parent Issuer, Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Details 2) (USD $) In Millions | 9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | ||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ 272 | $ 248 | [1] | ||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Proceeds on disposal of fixed and intangible assets | 10 | 6 | [1] | ||
Additions to fixed assets | (71) | (59) | [1] | ||
Acquisitions of subsidiaries, net of cash acquired | (5) | (20) | [1] | ||
Acquisition of investments in associates | (2) | (1) | [1] | ||
Investment in Trident V Parallel Fund, LP | (4) | (2) | |||
Net cash used in investing activities | (72) | (76) | [1] | ||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Repayments of revolving credit facility | (90) | 95 | [1] | ||
Senior notes issued | 794 | ||||
Debt issuance costs | (7) | ||||
Repayments of debt | (582) | (181) | [1] | ||
Make-whole on repurchase and redemption of senior notes | (158) | ||||
Proceeds from issue of shares | 46 | 26 | [1] | ||
Excess tax benefits from share-based payment arrangements | 5 | ||||
Dividends paid | (136) | (132) | [1] | ||
Acquisition of noncontrolling interests | (9) | (10) | [1] | ||
Dividends paid to noncontrolling interests | (13) | (24) | [1] | ||
Net cash used in financing activities | (150) | (226) | [1] | ||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 50 | (54) | [1] | ||
Effect of exchange rate changes on cash and cash equivalents | (3) | (8) | [1] | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 316 | 221 | [1] | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 363 | 159 | [1] | ||
Willis Group Holdings [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (31) | (9) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Senior notes issued | 794 | ||||
Debt issuance costs | (7) | ||||
Proceeds from issue of shares | 46 | 26 | |||
Amounts owed by (to) Group undertakings | (664) | 71 | |||
Dividends paid | (136) | (88) | |||
Net cash used in financing activities | 33 | 9 | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 2 | 0 | |||
The Guarantors [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 131 | 356 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Additions to fixed assets | (17) | (20) | |||
Net cash used in investing activities | (17) | (20) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Repayments of revolving credit facility | (90) | 95 | |||
Repayments of debt | (582) | (171) | |||
Make-whole on repurchase and redemption of senior notes | (158) | ||||
Amounts owed by (to) Group undertakings | 770 | (158) | |||
Dividends paid | (132) | ||||
Acquisition of noncontrolling interests | (8) | ||||
Net cash used in financing activities | (68) | (366) | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 46 | (30) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 76 | 104 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 122 | 74 | |||
Other [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 1,061 | 722 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Proceeds on disposal of fixed and intangible assets | 10 | 6 | |||
Additions to fixed assets | (54) | (39) | |||
Acquisitions of subsidiaries, net of cash acquired | (5) | (20) | |||
Acquisition of investments in associates | (2) | (1) | |||
Investment in Trident V Parallel Fund, LP | (4) | (2) | |||
Net cash used in investing activities | (55) | (56) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Repayments of debt | (10) | ||||
Amounts owed by (to) Group undertakings | (106) | 87 | |||
Excess tax benefits from share-based payment arrangements | 5 | ||||
Dividends paid | (889) | (733) | |||
Acquisition of noncontrolling interests | (1) | (10) | |||
Dividends paid to noncontrolling interests | (13) | (24) | |||
Net cash used in financing activities | (1,004) | (690) | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 | (24) | |||
Effect of exchange rate changes on cash and cash equivalents | (3) | (8) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 240 | 117 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 239 | 85 | |||
Consolidating Adjustments [Member] | |||||
Condensed Consolidating Statement of Cash Flows [Abstract] | |||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (889) | (821) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Dividends paid | 889 | 821 | |||
Net cash used in financing activities | 889 | 821 | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | ||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 0 | ||||
|
Income Taxes | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
4. INCOME
TAXES
The tables below reflect the components of the tax charge for
the three and nine months ended September 30, 2011:
For interim income tax reporting purposes, the Company generally
determines its best estimate of an annual effective tax rate and
applies that rate on a
year-to-date
basis applicable to its ordinary income. The Company’s
estimated annual effective tax rate excludes significant,
unusual or infrequently occurring items and certain other items
excluded pursuant to the US GAAP authoritative guidance where
applicable. The income tax expense (or benefit) related to all
other items is individually computed and recognized when the
items occur.
The estimated annual effective tax rate applicable to ordinary
income of 22 percent includes the tax benefit of expenses
relating to the 2011 Operational Review, which are generally
relieved at a higher rate than the Company’s annual
effective tax rate calculated excluding these expenses, and the
impact of the UK Financial Services Authority (‘FSA’)
regulatory fine for which no tax relief is available. After
adjusting for the impact of these items, the estimated annual
effective tax rate would have been approximately 24 percent.
|
Equity and Noncontrolling Interest (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity and Noncontrolling Interest (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Noncontrolling Interests |
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Effects of changes in ownership interest in subsidiaries |
|
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments and Hedging Activities (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate risk |
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Foreign currency risk |
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Derivative financial and hedging instruments |
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Cash flow hedges |
Amounts above shown gross of tax.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value hedges |
|
Derivative Financial Instruments and Hedging Activities (Details Textual) (USD $) | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Derivative Financial Instruments and Hedging Activities Additional (Textual) [Abstract] | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 5,000,000 |
Notional amount of interest rate swaps | 350,000,000 |
Debt Instrument, Maturity Date | Jul. 15, 2015 |
Senior Notes [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt instrument, face amount | 2,050,000,000 |
Senior Notes Due 2015 [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt instrument, face amount | 350,000,000 |
Debt Instrument, Interest Rate, Stated Percentage | 5.625% |
Senior Notes Due 2016 [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt instrument, face amount | 300,000,000 |
Senior Notes Due 2017 [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt instrument, face amount | 600,000,000 |
Senior Notes Due 2019 [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt instrument, face amount | 300,000,000 |
Senior Notes Due 2021 [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt instrument, face amount | 500,000,000 |
5-Year Term Loan Facility [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
5-year term loan facility balance | 328,000,000 |
Debt Instrument Interest | LIBOR plus 2.250% |
Maturity period of term loan | P5Y |
Revolving credit facility [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Revolving credit facilities available | 520,000,000 |
Revolving $300 million credit facility [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt Instrument Interest | LIBOR plus 2.250% |
Line of Credit Facility, Amount Outstanding | 0 |
Revolving credit facilities available | 300,000,000 |
Revolving $200 million credit facility [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Debt Instrument Interest | LIBOR plus either 1.750% or 2.750% |
Line of Credit Facility, Amount Outstanding | 0 |
Revolving credit facilities available | 200,000,000 |
Revolving $20 million credit facility [Member] | |
Derivative Financial Instruments and Hedging Activities (Textual) [Abstract] | |
Line of Credit Facility, Amount Outstanding | 0 |
Revolving credit facilities available | $ 20,000,000 |
Fair Value Measurement (Details 1) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Dec. 31, 2009 | ||||
---|---|---|---|---|---|---|---|---|
Assets: | ||||||||
Cash and cash equivalents, carrying value | $ 363 | $ 316 | $ 159 | [1] | $ 221 | [1] | ||
Cash and cash equivalents, fair value | 363 | 316 | ||||||
Fiduciary funds-restricted (included within Fiduciary assets), carrying value | 1,829 | 1,764 | ||||||
Fiduciary funds-restricted (included within Fiduciary assets), fair value | 1,829 | 1,764 | ||||||
Derivative financial instruments | 51 | 47 | ||||||
Liabilities: | ||||||||
Short-term debt | 114 | 110 | ||||||
Short-term Debt, fair value | 114 | 110 | ||||||
Long-term debt | 2,285 | 2,157 | ||||||
Long term debt, fair value | 2,410 | 2,450 | ||||||
Derivative financial instruments | 11 | 12 | ||||||
Estimate of Fair Value, Fair Value Disclosure [Member] | ||||||||
Assets: | ||||||||
Derivative financial instruments | 51 | 47 | ||||||
Liabilities: | ||||||||
Derivative financial instruments | $ 11 | $ 12 | ||||||
|
Pension Plans (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
UK Pension Benefit [Member] | |||||||
Components of net periodic benefit cost: | |||||||
Service cost | $ 8 | $ 9 | $ 27 | $ 27 | |||
Interest cost | 27 | 25 | 80 | 74 | |||
Expected return on plan assets | (40) | (35) | (121) | (104) | |||
Amortization of unrecognized prior service gain | (2) | (1) | (4) | (3) | |||
Amortization of unrecognized actuarial loss | 8 | 9 | 23 | 27 | |||
Net periodic benefit cost | 1 | 7 | 5 | 21 | |||
Pension Plans (Textual) [Abstract] | |||||||
Contributions made to defined benefit pension plans | 69 | 67 | |||||
Approximate expected contribution to defined pension plan for the full year 2011 | 92 | 92 | |||||
US Pension Benefits [Member] | |||||||
Components of net periodic benefit cost: | |||||||
Interest cost | 10 | 11 | 31 | 31 | |||
Expected return on plan assets | (11) | (11) | (34) | (32) | |||
Amortization of unrecognized actuarial loss | 1 | 1 | 3 | 2 | |||
Net periodic benefit cost | 1 | 1 | |||||
Pension Plans (Textual) [Abstract] | |||||||
Contributions made to defined benefit pension plans | 30 | 30 | |||||
Intl Pension Benefits [Member] | |||||||
Components of net periodic benefit cost: | |||||||
Service cost | 2 | 1 | 4 | 4 | |||
Interest cost | 1 | 2 | 5 | 6 | |||
Expected return on plan assets | (2) | (1) | (6) | (5) | |||
Amortization of unrecognized actuarial loss | 1 | ||||||
Net periodic benefit cost | 1 | 2 | 3 | 6 | [1] | ||
Pension Plans (Textual) [Abstract] | |||||||
Contributions made to defined benefit pension plans | 6 | 5 | |||||
Approximate expected contribution to defined pension plan for the full year 2011 | $ 10 | $ 10 | |||||
|
Other Assets (Details) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 | |||
---|---|---|---|---|---|
Other current assets | |||||
Unamortized cash retention awards | $ 132 | $ 125 | |||
Prepayments and accrued income | 63 | 73 | |||
Derivatives | 11 | 17 | |||
Debt issuance costs | 8 | 8 | |||
Income tax receivable | 66 | 69 | |||
Other receivables | 35 | 48 | |||
Total other current assets | 315 | [1] | 340 | ||
Other non-current assets | |||||
Unamortized cash retention awards | 111 | 48 | |||
Deferred compensation plan assets | 111 | 114 | |||
Prepayments and accrued income | 24 | 0 | |||
Debt issuance costs | 16 | 27 | |||
Derivatives | 40 | 30 | |||
Income taxes receivable | 11 | 0 | |||
Other receivables | 26 | 14 | |||
Total other non-current assets | 339 | 233 | |||
Total other assets | $ 654 | $ 573 | |||
|
Earnings Per Share | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
5. EARNINGS
PER SHARE
Basic and diluted earnings per share are calculated by dividing
net income attributable to Willis Group Holdings by the weighted
average number of shares outstanding during each period. The
computation of diluted earnings per share reflects the potential
dilution that could occur if dilutive securities and other
contracts to issue shares were exercised or converted into
shares or resulted in the issuance of shares that then shared in
the net income of the Company.
At September 30, 2011, time-based and performance-based
options to purchase 9.6 million and 7.5 million
(September 30, 2010: 12.0 million and
8.5 million) shares, respectively, and 1.3 million
restricted stock units (September 30, 2010:
1.6 million), respectively, were outstanding.
Basic and diluted earnings per share are as follows:
Options to purchase 4.7 million and 3.3 million shares
for the three and nine months ended September 30, 2011
respectively were not included in the computation of the
dilutive effect of stock options because the effect was
antidilutive (three and nine months ended September 30,
2010: 13.4 million and 13.6 million shares
respectively).
|
Segment Information (Details 2) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Total consolidated operating income | ||||
Operating income | $ 90 | $ 106 | $ 485 | $ 576 |
Make-whole charge on repurchase and redemption of senior notes and write-off of debt issuance costs | (171) | |||
Interest expense | (38) | (40) | (112) | (124) |
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | $ 52 | $ 66 | $ 202 | $ 452 |
Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Operations |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet |
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Condensed Consolidating Statement of Cash Flows |
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Income Taxes (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of tax charge |
|
Debt (Details) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Short-term debt and current portion of long-term debt | ||
Current portion of 5-year term loan facility | $ 110,000,000 | $ 110,000,000 |
6% loan notes due 2012 | 4,000,000 | |
Short-term debt and current portion of long-term debt | 114,000,000 | 110,000,000 |
Long - term debt | ||
Long-term debt | 2,285,000,000 | 2,157,000,000 |
5-year term loan facility [Member] | ||
Long - term debt | ||
Long term debt | 218,000,000 | 301,000,000 |
Revolving $300 million credit facility [Member] | ||
Long - term debt | ||
Revolving credit facility | 90,000,000 | |
6.000% loan notes due 2012 [Member] | ||
Long - term debt | ||
Loan notes due | 4,000,000 | |
5.625% senior notes due 2015 [Member] | ||
Long - term debt | ||
Long-term debt | 350,000,000 | 350,000,000 |
Fair Value adjustment on 5.625% senior notes due 2015 [Member] | ||
Long - term debt | ||
Long-term debt | 22,000,000 | 12,000,000 |
12.875% senior notes due 2016 [Member] | ||
Long - term debt | ||
Long-term debt | 500,000,000 | |
4.125% senior notes due 2016 [Member] | ||
Long - term debt | ||
Long-term debt | 299,000,000 | |
6.200% senior notes due 2017 [Member] | ||
Long - term debt | ||
Long-term debt | 600,000,000 | 600,000,000 |
7.000% senior notes due 2019 [Member] | ||
Long - term debt | ||
Long-term debt | 300,000,000 | 300,000,000 |
5.750% senior notes due 2021 [Member] | ||
Long - term debt | ||
Long-term debt | $ 496,000,000 |
Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
REVENUES | |||||||
Commissions and fees | $ 755 | $ 723 | $ 2,609 | $ 2,475 | |||
Investment income | 7 | 10 | 23 | 29 | |||
Other income | 0 | 1 | |||||
Total revenues | 762 | 733 | 2,633 | 2,504 | |||
EXPENSES | |||||||
Salaries and benefits | (490) | (462) | (1,580) | (1,404) | |||
Other operating expenses | (147) | (129) | (464) | (413) | |||
Depreciation expense | (17) | (14) | (56) | (45) | [1] | ||
Amortization of intangible assets | (18) | (22) | (52) | (64) | [1] | ||
Net gain (loss) on disposal of operations | 4 | (2) | |||||
Total expenses | (672) | (627) | (2,148) | (1,928) | |||
OPERATING INCOME | 90 | 106 | 485 | 576 | |||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | (171) | ||||||
Interest expense | (38) | (40) | (112) | (124) | |||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 52 | 66 | 202 | 452 | |||
Income taxes | (2) | (10) | (34) | (112) | |||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 50 | 56 | 168 | 340 | |||
Interest in earnings of associates, net of tax | 10 | 9 | 23 | 27 | |||
NET INCOME | 60 | 65 | 191 | 367 | [1] | ||
Less: net income attributable to noncontrolling interests | (1) | (12) | (10) | ||||
EQUITY ACCOUNT FOR SUBSIDIARIES | 0 | 0 | |||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 60 | 64 | 179 | 357 | |||
Willis Group Holdings [Member] | |||||||
EXPENSES | |||||||
Other operating expenses | (9) | (227) | (8) | 338 | |||
Net gain (loss) on disposal of operations | (347) | (347) | |||||
Total expenses | (9) | (574) | (8) | (9) | |||
OPERATING INCOME | (9) | (574) | (8) | (9) | |||
Investment income from Group undertakings | 35 | ||||||
Interest expense | (11) | (23) | |||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (20) | (574) | 4 | (9) | |||
Income taxes | 5 | 7 | |||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (15) | (574) | 11 | (9) | |||
NET INCOME | (15) | (574) | 11 | (9) | |||
EQUITY ACCOUNT FOR SUBSIDIARIES | 75 | 638 | 168 | 366 | |||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 60 | 64 | 179 | 357 | |||
The Other Guarantors [Member] | |||||||
REVENUES | |||||||
Investment income | 2 | 2 | 8 | 7 | |||
Total revenues | 2 | 2 | 8 | 7 | |||
EXPENSES | |||||||
Other operating expenses | 8 | 19 | 33 | (7) | |||
Total expenses | 8 | 19 | 33 | (7) | |||
OPERATING INCOME | 10 | 21 | 41 | ||||
Investment income from Group undertakings | 726 | 113 | 944 | 664 | |||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | (171) | ||||||
Interest expense | (63) | (109) | (188) | (320) | |||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 673 | 25 | 626 | 344 | |||
Income taxes | (3) | 13 | 42 | 9 | |||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 670 | 38 | 668 | 353 | |||
NET INCOME | 670 | 38 | 668 | 353 | |||
EQUITY ACCOUNT FOR SUBSIDIARIES | (605) | 56 | (472) | 9 | |||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 65 | 94 | 196 | 362 | |||
The Issuer [Member] | |||||||
REVENUES | |||||||
Investment income | 1 | 1 | 2 | ||||
Total revenues | 1 | 1 | 2 | ||||
EXPENSES | |||||||
Other operating expenses | (41) | (20) | (134) | (79) | |||
Depreciation expense | (3) | (3) | (10) | (7) | |||
Total expenses | (44) | (23) | (144) | (86) | |||
OPERATING INCOME | (44) | (22) | (143) | (84) | |||
Investment income from Group undertakings | 60 | 58 | 233 | 231 | |||
Interest expense | (39) | (51) | (112) | (131) | |||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (23) | (15) | (22) | 16 | |||
Income taxes | 6 | 11 | 20 | 20 | |||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (17) | (4) | (2) | 36 | |||
NET INCOME | (17) | (4) | (2) | 36 | |||
EQUITY ACCOUNT FOR SUBSIDIARIES | 16 | 26 | (21) | (4) | |||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | (1) | 22 | (23) | 32 | |||
Other [Member] | |||||||
REVENUES | |||||||
Commissions and fees | 755 | 723 | 2,609 | 2,475 | |||
Investment income | 7 | 9 | 22 | 27 | |||
Other income | 24 | ||||||
Total revenues | 762 | 732 | 2,655 | 2,502 | |||
EXPENSES | |||||||
Salaries and benefits | (493) | (463) | (1,609) | (1,420) | |||
Other operating expenses | (101) | 81 | (354) | (649) | |||
Depreciation expense | (14) | (11) | (46) | (38) | |||
Amortization of intangible assets | (18) | (22) | (57) | (64) | |||
Net gain (loss) on disposal of operations | 1 | (2,088) | 7 | 347 | |||
Total expenses | (625) | (2,503) | (2,059) | (1,824) | |||
OPERATING INCOME | 137 | (1,771) | 596 | 678 | |||
Investment income from Group undertakings | 80 | 52 | 113 | 540 | |||
Interest expense | (50) | (63) | (258) | (274) | |||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 167 | (1,782) | 451 | 944 | |||
Income taxes | (20) | (4) | (109) | (123) | |||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 147 | (1,786) | 342 | 821 | |||
Interest in earnings of associates, net of tax | 8 | 8 | 17 | 22 | |||
NET INCOME | 155 | (1,778) | 359 | 843 | |||
Less: net income attributable to noncontrolling interests | 1 | (12) | (2) | ||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 155 | (1,777) | 347 | 841 | |||
Consolidating adjustments [Member] | |||||||
REVENUES | |||||||
Investment income | (2) | (2) | (8) | (7) | |||
Other income | (23) | ||||||
Total revenues | (2) | (2) | (31) | (7) | |||
EXPENSES | |||||||
Salaries and benefits | 3 | 1 | 29 | 16 | |||
Other operating expenses | (4) | 18 | (1) | (16) | |||
Amortization of intangible assets | 5 | ||||||
Net gain (loss) on disposal of operations | (1) | 2,435 | (3) | (2) | |||
Total expenses | (2) | 2,454 | 30 | (2) | |||
OPERATING INCOME | (4) | 2,452 | (1) | (9) | |||
Investment income from Group undertakings | (866) | (223) | (1,325) | (1,435) | |||
Interest expense | 125 | 183 | 469 | 601 | |||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (745) | 2,412 | (857) | (843) | |||
Income taxes | 10 | (30) | 6 | (18) | |||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (735) | 2,382 | (851) | (861) | |||
Interest in earnings of associates, net of tax | 2 | 1 | 6 | 5 | |||
NET INCOME | (733) | 2,383 | (845) | (856) | |||
Less: net income attributable to noncontrolling interests | (2) | (8) | |||||
EQUITY ACCOUNT FOR SUBSIDIARIES | 514 | (720) | 325 | (371) | |||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ (219) | $ 1,661 | $ (520) | $ (1,235) | |||
|
Other Intangible Assets, Net (Details) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Summary of major classes of amortizable intangible assets | ||
Gross carrying amount | $ 755 | $ 755 |
Accumulated amortization | (315) | (263) |
Net carrying amount | 440 | 492 |
Client Relationships [Member] | ||
Summary of major classes of amortizable intangible assets | ||
Gross carrying amount | 696 | 695 |
Accumulated amortization | (259) | (207) |
Net carrying amount | 437 | 488 |
Client Lists [Member] | ||
Summary of major classes of amortizable intangible assets | ||
Gross carrying amount | 8 | 9 |
Accumulated amortization | (7) | (7) |
Net carrying amount | 1 | 2 |
Non-compete Agreements [Member] | ||
Summary of major classes of amortizable intangible assets | ||
Gross carrying amount | 36 | 36 |
Accumulated amortization | (36) | (36) |
Net carrying amount | 0 | 0 |
Trade Names [Member] | ||
Summary of major classes of amortizable intangible assets | ||
Gross carrying amount | 11 | 11 |
Accumulated amortization | (10) | (10) |
Net carrying amount | 1 | 1 |
Total Customer and Marketing Related [Member] | ||
Summary of major classes of amortizable intangible assets | ||
Gross carrying amount | 751 | 751 |
Accumulated amortization | (312) | (260) |
Net carrying amount | 439 | 491 |
Contract Based, Technology and Other [Member] | ||
Summary of major classes of amortizable intangible assets | ||
Gross carrying amount | 4 | 4 |
Accumulated amortization | (3) | (3) |
Net carrying amount | $ 1 | $ 1 |
Goodwill (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the carrying amount of goodwill by operating segment |
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Segment Information (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information regarding operating segment |
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Corporate and other information |
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Total consolidated operating income |
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Pension Plans (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of the net periodic benefit cost |
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Other Liabilities | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LIABILITIES |
An analysis of other liabilities is as follows:
|
Derivative Financial Instruments and Hedging Activities (Details 3) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
Cash flow hedges | |||||||
Amount of gain (loss) recognized in OCI on derivative (effective element) | $ 12 | $ 4 | $ 11 | $ 19 | |||
Amount of gain (loss) reclassified from accumulated OCI into income (effective element) | (8) | (2) | (17) | (8) | [1] | ||
Amount of gain (loss) recognized in income on derivative (ineffective hedges and ineffective element of effective hedges) | (2) | 1 | (1) | 1 | |||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |||||||
Cash flow hedges | |||||||
Amount of gain (loss) recognized in OCI on derivative (effective element) | 8 | 7 | 12 | 18 | |||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | Investment Income [Member] | |||||||
Cash flow hedges | |||||||
Amount of gain (loss) reclassified from accumulated OCI into income (effective element) | (3) | (7) | (11) | (20) | |||
Cash Flow Hedging [Member] | Forward Contracts [Member] | |||||||
Cash flow hedges | |||||||
Amount of gain (loss) recognized in OCI on derivative (effective element) | 4 | (3) | (1) | 1 | |||
Cash Flow Hedging [Member] | Forward Contracts [Member] | Other Operating Expense [Member] | |||||||
Cash flow hedges | |||||||
Amount of gain (loss) reclassified from accumulated OCI into income (effective element) | (5) | 5 | (6) | 12 | |||
Cash Flow Hedging [Member] | Forward Contracts [Member] | Interest Expense [Member] | |||||||
Cash flow hedges | |||||||
Amount of gain (loss) recognized in income on derivative (ineffective hedges and ineffective element of effective hedges) | $ (2) | $ 1 | $ (1) | $ 1 | |||
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Financial Information for Parent Issuer, Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||
REVENUES | ||||||||
Commissions and fees | $ 755 | $ 723 | $ 2,609 | $ 2,475 | ||||
Investment income | 7 | 10 | 23 | 29 | ||||
Other income | 0 | 1 | ||||||
Total revenues | 762 | 733 | 2,633 | 2,504 | ||||
EXPENSES | ||||||||
Salaries and benefits | (490) | (462) | (1,580) | (1,404) | ||||
Other operating expenses | (147) | (129) | (464) | (413) | ||||
Depreciation expense | (17) | (14) | (56) | (45) | [1] | |||
Amortization of intangible assets | (18) | (22) | (52) | (64) | [1] | |||
Net gain (loss) on disposal of operations | 4 | (2) | ||||||
Total expenses | (672) | (627) | (2,148) | (1,928) | ||||
OPERATING INCOME | 90 | 106 | 485 | 576 | ||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | (171) | |||||||
Interest expense | (38) | (40) | (112) | (124) | ||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 52 | 66 | 202 | 452 | ||||
Income taxes | (2) | (10) | (34) | (112) | ||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 50 | 56 | 168 | 340 | ||||
Interest in earnings of associates, net of tax | 10 | 9 | 23 | 27 | ||||
NET INCOME | 60 | 65 | 191 | 367 | [1] | |||
Less: net income attributable to noncontrolling interests | (1) | (12) | (10) | |||||
EQUITY ACCOUNT FOR SUBSIDIARIES | 0 | 0 | ||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 60 | 64 | 179 | 357 | ||||
Willis Group Holdings [Member] | ||||||||
EXPENSES | ||||||||
Other operating expenses | (9) | (227) | (8) | 338 | ||||
Net gain (loss) on disposal of operations | (347) | (347) | ||||||
Total expenses | (9) | (574) | (8) | (9) | ||||
OPERATING INCOME | (9) | (574) | (8) | (9) | ||||
Investment income from Group undertakings | 35 | |||||||
Interest expense | (11) | (23) | ||||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (20) | (574) | 4 | (9) | ||||
Income taxes | 5 | 7 | ||||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (15) | (574) | 11 | (9) | ||||
NET INCOME | (15) | (574) | 11 | (9) | ||||
EQUITY ACCOUNT FOR SUBSIDIARIES | 75 | 638 | 168 | 366 | ||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 60 | 64 | 179 | 357 | ||||
The Guarantors [Member] | ||||||||
REVENUES | ||||||||
Investment income | 2 | 3 | 9 | 9 | ||||
Total revenues | 2 | 3 | 9 | 9 | ||||
EXPENSES | ||||||||
Other operating expenses | (33) | (1) | (101) | (86) | ||||
Depreciation expense | (3) | (3) | (10) | (7) | ||||
Total expenses | (36) | (4) | (111) | (93) | ||||
OPERATING INCOME | (34) | (1) | (102) | (84) | ||||
Investment income from Group undertakings | 786 | 171 | 1,177 | 895 | ||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | (171) | |||||||
Interest expense | (102) | (160) | (300) | (451) | ||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 650 | 10 | 604 | 360 | ||||
Income taxes | 3 | 24 | 62 | 29 | ||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 653 | 34 | 666 | 389 | ||||
NET INCOME | 653 | 34 | 666 | 389 | ||||
EQUITY ACCOUNT FOR SUBSIDIARIES | (588) | 60 | (470) | (28) | ||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 65 | 94 | 196 | 361 | ||||
Other [Member] | ||||||||
REVENUES | ||||||||
Commissions and fees | 755 | 723 | 2,609 | 2,475 | ||||
Investment income | 7 | 9 | 22 | 27 | ||||
Other income | 24 | |||||||
Total revenues | 762 | 732 | 2,655 | 2,502 | ||||
EXPENSES | ||||||||
Salaries and benefits | (493) | (463) | (1,609) | (1,420) | ||||
Other operating expenses | (101) | 81 | (354) | (649) | ||||
Depreciation expense | (14) | (11) | (46) | (38) | ||||
Amortization of intangible assets | (18) | (22) | (57) | (64) | ||||
Net gain (loss) on disposal of operations | 1 | (2,088) | 7 | 347 | ||||
Total expenses | (625) | (2,503) | (2,059) | (1,824) | ||||
OPERATING INCOME | 137 | (1,771) | 596 | 678 | ||||
Investment income from Group undertakings | 80 | 52 | 113 | [1] | 540 | |||
Interest expense | (50) | (63) | (258) | (274) | ||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 167 | (1,782) | 451 | 944 | ||||
Income taxes | (20) | (4) | (109) | (123) | ||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 147 | (1,786) | 342 | 821 | ||||
Interest in earnings of associates, net of tax | 8 | 8 | 17 | 22 | ||||
NET INCOME | 155 | (1,778) | 359 | 843 | ||||
Less: net income attributable to noncontrolling interests | 1 | (12) | (2) | |||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | 155 | (1,777) | 347 | 841 | ||||
Consolidating Adjustments [Member] | ||||||||
REVENUES | ||||||||
Investment income | (2) | (2) | (8) | (7) | ||||
Other income | (23) | |||||||
Total revenues | (2) | (2) | (31) | (7) | ||||
EXPENSES | ||||||||
Salaries and benefits | 3 | 1 | 29 | 16 | ||||
Other operating expenses | (4) | 18 | (1) | (16) | ||||
Amortization of intangible assets | 5 | |||||||
Net gain (loss) on disposal of operations | (1) | 2,435 | (3) | (2) | ||||
Total expenses | (2) | 2,454 | 30 | (2) | ||||
OPERATING INCOME | (4) | 2,452 | (1) | (9) | ||||
Investment income from Group undertakings | (866) | (223) | (1,325) | (1,435) | ||||
Interest expense | 125 | 183 | 469 | 601 | ||||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (745) | 2,412 | (857) | (843) | ||||
Income taxes | 10 | (30) | 6 | (18) | ||||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (735) | 2,382 | (851) | (861) | ||||
Interest in earnings of associates, net of tax | 2 | 1 | 6 | 5 | ||||
NET INCOME | (733) | 2,383 | (845) | (856) | ||||
Less: net income attributable to noncontrolling interests | (2) | (8) | ||||||
EQUITY ACCOUNT FOR SUBSIDIARIES | 513 | (698) | 302 | (338) | ||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ (220) | $ 1,683 | $ (543) | |||||
|
Segment Information (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
Information regarding operating segment | |||||||
Commissions and Fees | $ 755 | $ 723 | $ 2,609 | $ 2,475 | |||
Investment income | 7 | 10 | 23 | 29 | |||
Other Income | 0 | 1 | |||||
Total Revenues | 762 | 733 | 2,633 | 2,504 | |||
Depreciation and Amortization | 35 | 36 | 108 | 109 | |||
Operating income | 90 | 106 | 485 | 576 | |||
Interest in Earnings of Associates, net of tax | 10 | 9 | 23 | 27 | |||
Global [Member] | |||||||
Information regarding operating segment | |||||||
Commissions and Fees | 236 | 210 | 865 | 790 | |||
Investment income | 1 | 2 | 7 | 7 | |||
Other Income | 0 | 0 | |||||
Total Revenues | 237 | 212 | 872 | 797 | |||
Depreciation and Amortization | 5 | 4 | 17 | 13 | |||
Operating income | 53 | 49 | 317 | 290 | |||
North America [Member] | |||||||
Information regarding operating segment | |||||||
Commissions and Fees | 316 | 330 | 998 | 1,023 | |||
Investment income | 2 | 4 | 5 | 12 | |||
Other Income | 0 | 1 | 0 | ||||
Total Revenues | 318 | 334 | 1,004 | 1,035 | |||
Depreciation and Amortization | 8 | 5 | 20 | 17 | |||
Operating income | 62 | 71 | 208 | 232 | |||
International [Member] | |||||||
Information regarding operating segment | |||||||
Commissions and Fees | 203 | 183 | 746 | 662 | |||
Investment income | 4 | 4 | 11 | 10 | |||
Other Income | 0 | 0 | |||||
Total Revenues | 207 | 187 | 757 | 672 | |||
Depreciation and Amortization | 4 | 5 | 14 | 15 | |||
Operating income | 4 | 8 | 146 | 136 | |||
Interest in Earnings of Associates, net of tax | 10 | 9 | 23 | 27 | |||
Retail [Member] | |||||||
Information regarding operating segment | |||||||
Commissions and Fees | 519 | 513 | 1,744 | 1,685 | |||
Investment income | 6 | 8 | 16 | 22 | |||
Other Income | 0 | 1 | 0 | ||||
Total Revenues | 525 | 521 | 1,761 | 1,707 | |||
Depreciation and Amortization | 12 | 10 | 34 | 32 | |||
Operating income | 66 | 79 | 354 | 368 | |||
Interest in Earnings of Associates, net of tax | 10 | 9 | 23 | 27 | |||
Operating Segments [Member] | |||||||
Information regarding operating segment | |||||||
Commissions and Fees | 755 | 723 | 2,609 | 2,475 | |||
Investment income | 7 | 10 | 23 | 29 | |||
Other Income | 0 | 1 | 0 | [1] | |||
Total Revenues | 762 | 733 | 2,633 | 2,504 | |||
Depreciation and Amortization | 17 | 14 | 51 | 45 | |||
Operating income | 119 | 128 | 671 | 658 | |||
Interest in Earnings of Associates, net of tax | 10 | 9 | 23 | 27 | |||
Corporate and Other [Member] | |||||||
Information regarding operating segment | |||||||
Other Income | 0 | ||||||
Depreciation and Amortization | 18 | 22 | 57 | 64 | |||
Operating income | $ (29) | $ (22) | $ (186) | $ (82) | |||
|
Goodwill (Details) (USD $) In Millions | 9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | |
Changes in the carrying amount of goodwill by operating segment | ||
Goodwill, Beginning Balance | $ 3,294 | $ 3,277 |
Acquisition | 2 | |
Purchase price allocation adjustments | 2 | 6 |
Other movements | (2) | (3) |
Foreign exchange | 1 | 14 |
Goodwill, Ending Balance | 3,297 | 3,294 |
Goodwill (Additional) (Textual) [Abstract] | ||
Tax benefit arising on the exercise of fully vested stock options | 2 | 3 |
Global [Member] | ||
Changes in the carrying amount of goodwill by operating segment | ||
Goodwill, Beginning Balance | 1,063 | 1,065 |
Other movements | 60 | |
Foreign exchange | (2) | |
Goodwill, Ending Balance | 1,123 | 1,063 |
Goodwill (Textual) [Abstract] | ||
Reallocation of goodwill from one segment to another segment | 60 | |
North America [Member] | ||
Changes in the carrying amount of goodwill by operating segment | ||
Goodwill, Beginning Balance | 1,783 | 1,780 |
Purchase price allocation adjustments | 6 | |
Other movements | (1) | (3) |
Goodwill, Ending Balance | 1,782 | 1,783 |
Goodwill (Textual) [Abstract] | ||
Reallocation of goodwill from one segment to another segment | 1 | |
International [Member] | ||
Changes in the carrying amount of goodwill by operating segment | ||
Goodwill, Beginning Balance | 448 | 432 |
Acquisition | 2 | |
Purchase price allocation adjustments | 2 | |
Other movements | (61) | |
Foreign exchange | 1 | 16 |
Goodwill, Ending Balance | 392 | 448 |
Goodwill (Textual) [Abstract] | ||
Reallocation of goodwill from one segment to another segment | $ 61 |
Pension Plans | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION PLANS |
6. PENSION
PLANS
The components of the net periodic benefit cost of the UK, US
and international defined benefit plans are as follows:
As of September 30, 2011, the Company had made
contributions of $69 million, $30 million and
$6 million to the UK, US and international defined benefit
pension plans (2010: $67 million, $30 million and
$5 million), respectively. The Company expects to
contribute a total of approximately $92 million to the UK
defined benefit pension plan and $10 million to the
international plans for the full year 2011 (inclusive of amounts
contributed in the first nine months). No further contributions
are expected to be made to the US plan in 2011.
|
Comprehensive Income | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME |
a) The components of comprehensive income are as follows:
b) The components of accumulated other comprehensive loss,
net of tax, are as follows:
|
Other Liabilities (Details) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 | |||
---|---|---|---|---|---|
Other current liabilities | |||||
Other taxes payable | $ 48 | $ 41 | |||
Accounts payable | 62 | 39 | |||
Accrued dividends payable | 45 | 46 | |||
Accrued interest payable | 7 | 21 | |||
Derivatives | 7 | 6 | |||
Other payables | 105 | 113 | |||
Total other current liabilities | 274 | 266 | |||
Other non-current liabilities | |||||
Incentives from lessors | 161 | 150 | |||
Deferred compensation plan liability | 111 | 120 | |||
Capital lease obligation | 27 | 23 | |||
Derivatives | 4 | 6 | |||
Other payables | 59 | 48 | |||
Total other non-current liabilities | 362 | [1] | 347 | ||
Total other liabilities | $ 636 | $ 613 | |||
|
Other Intangible Assets, Net (Details 1) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
Estimated aggregate amortization of intangible assets for each of the next five years | |||||||
Remainder of 2011 | $ 17 | ||||||
2012 | 61 | ||||||
2013 | 53 | ||||||
2014 | 45 | ||||||
2015 | 38 | ||||||
Thereafter | 226 | ||||||
Total | 440 | ||||||
Other Intangible Assets, Net (Textual) [Abstract] | |||||||
Aggregate amortization of intangible assets | $ 18 | $ 22 | $ 52 | $ 64 | [1] | ||
|
Comprehensive Income (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Comprehensive Income (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of comprehensive income |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive loss, net of tax |
|
Comprehensive Income (Details 1) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Components of Accumulated Other Comprehensive Loss, Net of Tax | ||
Net foreign currency translation adjustment | $ (60) | $ (52) |
Pension funding adjustment | (489) | (503) |
Net unrealized gain on derivative instruments | 10 | 14 |
Accumulated other comprehensive loss, attributable to Willis Group Holdings, net of tax | $ (539) | $ (541) |
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted earnings per share |
|
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions | 9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net income | $ 191 | $ 367 | [1] | ||
Adjustments to reconcile net income to total net cash provided by operating activities: | |||||
Net (gain) loss on disposal of operations and fixed and intangible assets | (5) | 3 | [1] | ||
Depreciation expense | 56 | 45 | [1] | ||
Amortization of intangible assets | 52 | 64 | [1] | ||
Provision for doubtful debts | 2 | ||||
Provision for deferred income taxes | 45 | 13 | [1] | ||
Excess tax benefits from share-based payment arrangements | (5) | ||||
Share-based compensation | 33 | 34 | [1] | ||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | 171 | ||||
Undistributed earnings of associates | (16) | (22) | [1] | ||
Non-cash Venezuela currency devaluation | 12 | [1] | |||
Effect of exchange rate changes on net income | 6 | (1) | [1] | ||
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries: | |||||
Accounts receivable, net | (80) | (43) | [1] | ||
Fiduciary assets | (517) | (69) | |||
Fiduciary liabilities | 517 | 69 | |||
Other assets | (162) | (94) | |||
Other liabilities | (16) | (102) | |||
Movement on provisions | (28) | ||||
Net cash provided by operating activities | 272 | 248 | [1] | ||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Proceeds on disposal of fixed and intangible assets | 10 | 6 | [1] | ||
Additions to fixed assets | (71) | (59) | [1] | ||
Acquisitions of subsidiaries, net of cash acquired | (5) | (20) | [1] | ||
Acquisition of investments in associates | (2) | (1) | [1] | ||
Investment in Trident V Parallel Fund, LP | (4) | (2) | |||
Net cash used in investing activities | (72) | (76) | [1] | ||
INCREASE IN CASH AND CASH EQUIVALENTS FROM OPERATING AND INVESTING ACTIVITIES | 200 | 172 | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
(Repayment of) proceeds from draw down of revolving credit facility | (90) | 95 | [1] | ||
Senior notes issued | 794 | ||||
Debt issuance costs | (7) | ||||
Repayments of debt | (582) | (181) | [1] | ||
Make-whole on repurchase and redemption of senior notes | (158) | ||||
Proceeds from issue of shares | 46 | 26 | [1] | ||
Excess tax benefits from share-based payment arrangements | 5 | ||||
Dividends paid | (136) | (132) | [1] | ||
Acquisition of noncontrolling interests | (9) | (10) | [1] | ||
Dividends paid to noncontrolling interests | (13) | (24) | [1] | ||
Net cash used in financing activities | (150) | (226) | [1] | ||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 50 | (54) | [1] | ||
Effect of exchange rate changes on cash and cash equivalents | (3) | (8) | [1] | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 316 | 221 | [1] | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 363 | $ 159 | [1] | ||
|
Equity and Noncontrolling Interests | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY AND NONCONTROLLING INTERESTS |
The components of stockholders’ equity and noncontrolling
interests are as follows:
The effects of changes in Willis Group Holdings ownership
interest in its subsidiaries on equity are as follows:
|
Basis of Presentation and Significant Accounting Policies (Details) (USD $) In Millions | 3 Months Ended |
---|---|
Mar. 31, 2010 | |
Basis of Presentation and Significant Accounting Policies (Details) [Abstract] | |
Re-measurement of net assets denominated in foreign currency | $ 12 |
Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES |
Willis North America Inc. (‘Willis North America’) has
$350 million senior notes outstanding that were issued on
July 1, 2005. On March 28, 2007, Willis North America
issued further senior notes totaling $600 million under its
June 2006 registration statement. On September 29, 2009,
Willis North America issued senior notes totaling
$300 million.
Until December 22, 2010, all direct obligations under the
senior notes were jointly and severally, irrevocably and fully
and unconditionally guaranteed by Willis Group Holdings, Willis
Netherlands Holdings B.V., Willis Investment UK Holdings
Limited, TA I Limited, TA II Limited, Trinity Acquisition plc,
TA III Limited, TA IV Limited and Willis Group Limited, the
Guarantor Companies. On that date and in connection with an
internal group reorganization, TA II Limited, TA III Limited and
TA IV Limited transferred their obligations as guarantors to the
Other Guarantor Companies. TA II Limited, TA III Limited and TA
IV Limited entered voluntary liquidation on December 31,
2010. The assets of these companies were distributed to the
Other Guarantor Companies, either directly or indirectly, as a
final distribution paid prior to their entering voluntary
liquidation. As such, these transactions did not have a material
impact on the guarantees of the senior notes and did not require
the consent of the noteholders under the applicable indentures.
Presented below is condensed consolidating financial information
for:
The equity method has been used for investments in subsidiaries
in the condensed consolidating balance sheets of Willis Group
Holdings, the Other Guarantors and the Issuer. Investments in
subsidiaries in the condensed consolidating balance sheet for
Other represents the cost of investment in subsidiaries recorded
in the parent companies of the non-guarantor subsidiaries.
The entities included in the Other Guarantors column as of
September 30, 2011 and December 31, 2010 are Willis
Netherlands Holdings B.V., Willis Investment UK Holdings
Limited, TA I Limited, Trinity Acquisition plc and Willis Group
Limited.
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Statement of Operations
Condensed
Consolidating Balance Sheet
Condensed
Consolidating Balance Sheet
Condensed
Consolidating Statement of Cash Flows
Condensed
Consolidating Statement of Cash Flows
|
Equity and Noncontrolling Interests (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
Equity and Noncontrolling Interests | |||||||
Balance at beginning of period | $ 2,577 | ||||||
Balance at beginning of period, noncontrolling interest | 31 | ||||||
Balance at beginning of period, total | 2,608 | 2,229 | |||||
Comprehensive income | |||||||
Net Income (Loss) Attributable to Parent | 60 | 64 | 179 | 357 | |||
Net income | 60 | 65 | 191 | 367 | [1] | ||
Other comprehensive income, net of tax | (51) | 38 | 2 | 22 | |||
Comprehensive income attributable to parent | 9 | 102 | 181 | 379 | |||
Comprehensive income attributable noncontrolling interest | 1 | 12 | 10 | ||||
Comprehensive income, total | 9 | 103 | 193 | 389 | |||
Dividends | (148) | (157) | |||||
Additional paid-in capital | 65 | 44 | |||||
Purchase of subsidiary shares from noncontrolling interests | (6) | ||||||
Foreign currency translation | (1) | (1) | |||||
Balance at end of period | 2,688 | 2,688 | |||||
Balance at end of period, noncontrolling interest | 29 | 29 | |||||
Balance at end of period, total | 2,717 | 2,498 | 2,717 | 2,498 | |||
Willis Group Holdings stockholders [Member] | |||||||
Equity and Noncontrolling Interests | |||||||
Balance at beginning of period | 2,577 | 2,180 | |||||
Comprehensive income | |||||||
Net Income (Loss) Attributable to Parent | 179 | 357 | |||||
Other Comprehensive Income, Net of Tax, Portion Attributable to Parent | 2 | 22 | |||||
Comprehensive income attributable to parent | 181 | 379 | |||||
Dividends | (135) | (133) | |||||
Additional paid-in capital | 65 | 44 | |||||
Balance at end of period | 2,688 | 2,470 | 2,688 | 2,470 | |||
Noncontrolling interests [Member] | |||||||
Equity and Noncontrolling Interests | |||||||
Balance at beginning of period, noncontrolling interest | 31 | 49 | |||||
Comprehensive income | |||||||
Net income | 12 | 10 | |||||
Comprehensive income attributable noncontrolling interest | 12 | 10 | |||||
Dividends | (13) | (24) | |||||
Purchase of subsidiary shares from noncontrolling interests | (6) | ||||||
Foreign currency translation, portion attributable to noncontrolling interest | (1) | (1) | |||||
Balance at end of period, noncontrolling interest | $ 29 | $ 28 | $ 29 | $ 28 | |||
|
Supplemental Disclosures of Cash Flow Information (Details) (USD $) In Millions | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Supplemental disclosures of cash flow information: | ||
Cash (receipts) payments for income taxes, net | $ (6) | $ 80 |
Cash payments for interest | 120 | 141 |
Supplemental disclosures of non-cash flow investing and financing activities: | ||
Write-off of unamortized debt issuance costs | (13) | |
Acquisitions: | ||
Fair Value of Assets Acquired | 3 | 2 |
Less: Liabilities assumed | ||
Net assets (liabilities) acquired, net of cash acquired | $ 3 | $ 2 |
Basis of Presentation and Significant Accounting Policies | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||
Basis of Presentation and Significant Accounting Policies [Abstract] | ||||||||||||
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
2. BASIS
OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed consolidated financial statements
(‘Interim Financial Statements’) have been prepared in
accordance with accounting principles generally accepted in the
United States of America (‘US GAAP’).
The Interim Financial Statements are unaudited but include all
adjustments (consisting of normal recurring adjustments) which
the Company’s management considers necessary for a fair
presentation of the financial position as of such dates and the
operating results and cash flows for those periods. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with US GAAP have
been condensed or omitted. However, the Company believes that
the disclosures are adequate to make the information presented
not misleading. The results of operations for the nine month
period ended September 30, 2011 may not necessarily be
indicative of the operating results for the entire fiscal year.
These Interim Financial Statements should be read in conjunction
with the Company’s consolidated balance sheets as of
December 31, 2010 and 2009, and the related consolidated
statements of operations, cash flows and changes in equity for
each of the three years in the period ended December 31,
2010 included in the Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
February 25, 2011 (‘2010
10-K’)
and as amended by Current Report on
Form 8-K
subsequently filed on August 10, 2011.
Balance Sheet
Presentation
As disclosed in the Company’s 2010
10-K, the
Company now provides additional disclosure within the unaudited
condensed consolidated balance sheet of:
The Company believes this amended presentation better reflects
the Company’s liquidity position and exposures to credit
risk. Accordingly, the unaudited condensed consolidated
statement of cash flows for the nine months ended
September 30, 2010 has been recast to conform with the new
balance sheet presentation.
Devaluation of
Venezuelan Currency
With effect from January 1, 2010, the Venezuelan economy
was designated as hyper-inflationary. The Venezuelan government
also devalued the Bolivar Fuerte in January 2010. As a result of
these actions, the Company recorded a $12 million charge in
other operating expenses in the three month period ended
March 31, 2010 to reflect the re-measurement of its net
monetary assets denominated in Venezuelan Bolivar Fuerte at
January 1, 2010.
Recent Accounting
Pronouncements
Fair Value
Measurement and Disclosure
In May 2011, the Financial Accounting Standards Board
(‘FASB’) issued Accounting Standards Update
(‘ASU’)
No. 2011 - 04,
Fair Value Measurement: Amendments to Achieve Common Fair
Value Measurement and Disclosure Requirements in U.S. GAAP
and IFRSs. The new guidance was issued to provide a
consistent definition of fair value and ensure that fair value
measurements and disclosure requirements are similar between US
GAAP and International Financial Reporting Standards
(‘IFRS’). The guidance changes certain fair value
measurement principles and enhances the disclosure requirements
for fair value measurements.
This guidance is effective for interim and annual periods
beginning after December 15, 2011 and is applied
prospectively.
The Company is currently evaluating the impact that adoption of
this guidance will have on the consolidated financial statements.
Other
Comprehensive Income
In June 2011, the FASB issued ASU
No. 2011 - 05,
Presentation of Comprehensive Income to revise the manner
in which entities present comprehensive income in their
financial statements. These changes require that components of
comprehensive income be presented in either a single continuous
statement of comprehensive income or in two separate but
consecutive statements. The amendments do not change the items
that must be reported in other comprehensive income or when an
item of other comprehensive income must be reclassified to net
income.
This guidance is effective for interim and annual periods
beginning after December 15, 2011 and is applied
retrospectively, although early adoption is permitted.
ASU 2011-05
also requires entities to present on the face of the financial
statements reclassification adjustments for items that are
reclassified from other comprehensive income to net income in
the statement(s) where the components of net income and the
components of other comprehensive income are presented. On
November 8, 2011 the FASB exposed a proposal to defer this
requirement. The proposed amendments would be effective at the
same time as the amendments in
Update 2011-05.
The Company is currently evaluating the impact that adoption of
this guidance will have on the consolidated financial statements.
Goodwill
impairment testing
In September 2011, the FASB issued ASU
No. 2011 - 08,
Intangibles — Goodwill and other: testing
goodwill for impairment. The new guidance was issued to
reduce complexity and costs by allowing an entity the option to
make a qualitative evaluation about the likelihood of goodwill
impairment to determine whether it should calculate the fair
value of a reporting unit.
This guidance is effective for interim and annual goodwill
impairment tests performed for fiscal years beginning after
December 15, 2011. Early adoption is permitted.
|
Other Intangible Assets, Net | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER INTANGIBLE ASSETS, NET |
Other intangible assets are classified into the following
categories:
The major classes of amortizable intangible assets are as
follows:
The aggregate amortization of intangible assets for the nine
months ended September 30, 2011 was $52 million (2010:
$64 million), of which $18 million was recognized in
the three months ended September 30, 2011 (2010:
$22 million). The estimated aggregate amortization of
intangible assets for each of the next five years ended December
31 is as follows:
|
Derivative Financial Instruments and Hedging Activities (Details 2) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Assets: | ||
Derivative assets financial and hedging instruments, fair value | $ 51 | $ 47 |
Liabilities: | ||
Derivative liabilities financial and hedging instruments, fair value | 11 | 12 |
Interest Rate Swap [Member] | Other Assets [Member] | Cash Flow Hedging [Member] | ||
Assets: | ||
Derivative assets financial and hedging instruments, fair value | 17 | 17 |
Interest Rate Swap [Member] | Other Assets [Member] | Fair Value Hedging [Member] | ||
Assets: | ||
Derivative assets financial and hedging instruments, fair value | 25 | 14 |
Interest Rate Swap [Member] | Other Liabilities [Member] | Cash Flow Hedging [Member] | ||
Liabilities: | ||
Derivative liabilities financial and hedging instruments, fair value | 0 | 2 |
Forward Contracts [Member] | Other Assets [Member] | ||
Assets: | ||
Derivative assets financial and hedging instruments, fair value | 9 | 16 |
Forward Contracts [Member] | Other Liabilities [Member] | ||
Liabilities: | ||
Derivative liabilities financial and hedging instruments, fair value | $ 11 | $ 10 |
Fair Value Measurement (Details) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Assets at fair value: | ||
Cash and cash equivalents | $ 363 | $ 316 |
Fiduciary funds - restricted (included within Fiduciary assets) | 1,829 | 1,764 |
Derivative financial instruments | 51 | 47 |
Total assets | 2,243 | 2,127 |
Liabilities at fair value: | ||
Derivative financial instruments | 11 | 12 |
Changes in fair value of hedged debt | 22 | 12 |
Total liabilities | 33 | 24 |
Quoted prices in active markets for identical assets Level 1 [Member] | ||
Assets at fair value: | ||
Cash and cash equivalents | 363 | 316 |
Fiduciary funds - restricted (included within Fiduciary assets) | 1,829 | 1,764 |
Derivative financial instruments | 0 | 0 |
Total assets | 2,192 | 2,080 |
Quoted prices in active markets for identical assets Level 1 [Member] | ||
Liabilities at fair value: | ||
Derivative financial instruments | 0 | 0 |
Changes in fair value of hedged debt | 0 | 0 |
Total liabilities | 0 | 0 |
Significant other observable inputs Level 2 [Member] | ||
Assets at fair value: | ||
Cash and cash equivalents | 0 | 0 |
Fiduciary funds - restricted (included within Fiduciary assets) | 0 | 0 |
Derivative financial instruments | 51 | 47 |
Total assets | 51 | 47 |
Significant other observable inputs Level 2 [Member] | ||
Liabilities at fair value: | ||
Derivative financial instruments | 11 | 12 |
Changes in fair value of hedged debt | 22 | 12 |
Total liabilities | 33 | 24 |
Significant other unobservable inputs Level 3 [Member] | ||
Assets at fair value: | ||
Cash and cash equivalents | 0 | 0 |
Fiduciary funds - restricted (included within Fiduciary assets) | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total assets | 0 | 0 |
Significant other unobservable inputs Level 3 [Member] | ||
Liabilities at fair value: | ||
Derivative financial instruments | 0 | 0 |
Changes in fair value of hedged debt | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Comprehensive Income (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
Comprehensive Income, Net of Tax, Attributable to Parent [Abstract] | |||||||
NET (LOSS) INCOME | $ 60 | $ 65 | $ 191 | $ 367 | [1] | ||
Comprehensive income | |||||||
Foreign currency translation adjustment (net of tax of $nil, $nil, $nil and $nil) | (73) | 30 | (8) | (5) | |||
Pension funding adjustment (net of tax of $(5) million, $(2) million, $(6) million and $(7) million) | 19 | 7 | 14 | 19 | |||
Net gain (loss) on derivative instruments (net of tax of $ (1) million, $(1) million, $2 million and $(3) million) | 3 | 1 | (4) | 8 | |||
Other comprehensive income (net of tax of $(6) million, $(3) million, $(4) million and $(10) million) | (51) | 38 | 2 | 22 | |||
Comprehensive income, total | 9 | 103 | 193 | 389 | |||
Noncontrolling interest | (1) | (12) | (10) | ||||
Comprehensive income attributable to Willis Group Holdings | $ 9 | $ 102 | $ 181 | $ 379 | |||
|
Other Intangible Assets, Net (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets, Net (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major classes of amortizable intangible assets |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated aggregate amortization of intangible assets for each of the next five years |
|
Supplemental Disclosures of Cash Flow Information | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Disclosures of Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
Supplemental disclosures regarding cash flow information and
non-cash flow investing and financing activities are as follows:
|
Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Millions, except Per Share data | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
REVENUES | |||||||
Commissions and fees | $ 755 | $ 723 | $ 2,609 | $ 2,475 | |||
Investment income | 7 | 10 | 23 | 29 | |||
Other income | 0 | 1 | |||||
Total revenues | 762 | 733 | 2,633 | 2,504 | |||
EXPENSES | |||||||
Salaries and benefits | (490) | (462) | (1,580) | (1,404) | |||
Other operating expenses | (147) | (129) | (464) | (413) | |||
Depreciation expense | (17) | (14) | (56) | (45) | [1] | ||
Amortization of intangible assets | (18) | (22) | (52) | (64) | [1] | ||
Net gain (loss) on disposal of operations | 4 | (2) | |||||
Total expenses | (672) | (627) | (2,148) | (1,928) | |||
OPERATING INCOME | 90 | 106 | 485 | 576 | |||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | (171) | ||||||
Interest expense | (38) | (40) | (112) | (124) | |||
INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 52 | 66 | 202 | 452 | |||
Income taxes | (2) | (10) | (34) | (112) | |||
INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 50 | 56 | 168 | 340 | |||
Interest in earnings of associates, net of tax | 10 | 9 | 23 | 27 | |||
NET INCOME | 60 | 65 | 191 | 367 | [1] | ||
Less: net income attributable to noncontrolling interests | (1) | (12) | (10) | ||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ 60 | $ 64 | $ 179 | $ 357 | |||
EARNINGS PER SHARE - BASIC AND DILUTED | |||||||
Basic earnings per share | $ 0.35 | $ 0.38 | $ 1.04 | $ 2.10 | |||
Diluted earnings per share | $ 0.34 | $ 0.37 | $ 1.02 | $ 2.09 | |||
CASH DIVIDENDS DECLARED PER SHARE | $ 0.26 | $ 0.26 | $ 0.78 | $ 0.78 | |||
|
Other Liabilities (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Analysis of other liabilities |
|
Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Details 1) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Dec. 31, 2009 | |||||
---|---|---|---|---|---|---|---|---|---|
CURRENT ASSETS | |||||||||
Cash and cash equivalents | $ 363 | $ 316 | $ 159 | [1] | $ 221 | [1] | |||
Accounts receivable | 911 | 839 | |||||||
Fiduciary assets | 10,090 | 9,569 | |||||||
Deferred tax assets | 21 | 36 | |||||||
Other current assets | 315 | [1] | 340 | ||||||
Total current assets | 11,700 | 11,100 | |||||||
Investments in subsidiaries | 0 | 0 | |||||||
Amounts owed by (to) Group undertakings | 0 | 0 | |||||||
NON-CURRENT ASSETS | |||||||||
Fixed assets | 387 | 381 | |||||||
Goodwill | 3,297 | 3,294 | 3,277 | ||||||
Other intangible assets, net | 440 | 492 | |||||||
Investments in associates | 186 | 161 | |||||||
Deferred tax assets | 5 | 7 | |||||||
Pension benefits asset | 261 | 179 | |||||||
Other non-current assets | 339 | 233 | |||||||
Total non-current assets | 4,915 | 4,747 | |||||||
TOTAL ASSETS | 16,615 | 15,847 | |||||||
CURRENT LIABILITIES | |||||||||
Fiduciary liabilities | 10,090 | 9,569 | |||||||
Deferred revenue and accrued expenses | 287 | 298 | |||||||
Income taxes payable | 38 | 57 | |||||||
Short-term debt and current portion of long-term debt | 114 | 110 | |||||||
Deferred tax liabilities | 17 | 9 | |||||||
Other current liabilities | 274 | 266 | |||||||
Total current liabilities | 10,820 | 10,309 | |||||||
NON-CURRENT LIABILITIES | |||||||||
Long-term debt | 2,285 | 2,157 | |||||||
Liabilities for pension benefits | 128 | 164 | |||||||
Deferred tax liabilities | 124 | 83 | |||||||
Provisions for liabilities | 179 | 179 | |||||||
Other-non current liabilities | 362 | [1] | 347 | ||||||
Total non-current liabilities | 3,078 | 2,930 | |||||||
Total liabilities | 13,898 | 13,239 | |||||||
EQUITY | |||||||||
Total Willis Group Holdings stockholders' equity | 2,688 | 2,577 | |||||||
Noncontrolling interests | 29 | 31 | |||||||
Total equity | 2,717 | 2,608 | 2,498 | 2,229 | |||||
TOTAL LIABILITIES AND EQUITY | 16,615 | 15,847 | |||||||
Willis Group Holdings [Member] | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | 2 | 0 | 0 | 0 | |||||
Accounts receivable | 0 | 2 | |||||||
Fiduciary assets | 0 | 0 | |||||||
Deferred tax assets | 0 | 0 | |||||||
Other current assets | 7 | 0 | |||||||
Total current assets | 9 | 2 | |||||||
Investments in subsidiaries | (880) | (1,039) | |||||||
Amounts owed by (to) Group undertakings | 4,396 | 3,659 | |||||||
NON-CURRENT ASSETS | |||||||||
Fixed assets | 0 | 0 | |||||||
Goodwill | 0 | 0 | |||||||
Other intangible assets, net | 0 | 0 | |||||||
Investments in associates | 0 | 0 | |||||||
Deferred tax assets | 0 | 0 | |||||||
Pension benefits asset | 0 | 0 | |||||||
Other non-current assets | 6 | 0 | |||||||
Total non-current assets | 6 | 0 | |||||||
TOTAL ASSETS | 3,531 | 2,622 | |||||||
CURRENT LIABILITIES | |||||||||
Fiduciary liabilities | 0 | 0 | |||||||
Deferred revenue and accrued expenses | 1 | 1 | |||||||
Income taxes payable | 0 | 0 | |||||||
Short-term debt and current portion of long-term debt | 0 | 0 | |||||||
Deferred tax liabilities | 0 | 0 | |||||||
Other current liabilities | 48 | 44 | |||||||
Total current liabilities | 49 | 45 | |||||||
NON-CURRENT LIABILITIES | |||||||||
Long-term debt | 794 | 0 | |||||||
Liabilities for pension benefits | 0 | 0 | |||||||
Deferred tax liabilities | 0 | 0 | |||||||
Provisions for liabilities | 0 | 0 | |||||||
Other-non current liabilities | 0 | 0 | |||||||
Total non-current liabilities | 794 | 0 | |||||||
Total liabilities | 843 | 45 | |||||||
EQUITY | |||||||||
Total Willis Group Holdings stockholders' equity | 2,688 | 2,577 | |||||||
Noncontrolling interests | 0 | 0 | |||||||
Total equity | 2,688 | 2,577 | |||||||
TOTAL LIABILITIES AND EQUITY | 3,531 | 2,622 | |||||||
The Other Guarantors [Member] | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |||||
Accounts receivable | 0 | 0 | |||||||
Fiduciary assets | 0 | 0 | |||||||
Deferred tax assets | 0 | 0 | |||||||
Other current assets | 126 | 23 | |||||||
Total current assets | 126 | 23 | |||||||
Investments in subsidiaries | 3,952 | 3,814 | |||||||
Amounts owed by (to) Group undertakings | (5,085) | (4,590) | |||||||
NON-CURRENT ASSETS | |||||||||
Fixed assets | 0 | 0 | |||||||
Goodwill | 0 | 0 | |||||||
Other intangible assets, net | 0 | 0 | |||||||
Investments in associates | 0 | 0 | |||||||
Deferred tax assets | 0 | 0 | |||||||
Pension benefits asset | 0 | 0 | |||||||
Other non-current assets | 147 | 166 | |||||||
Total non-current assets | 147 | 166 | |||||||
TOTAL ASSETS | (860) | (587) | |||||||
CURRENT LIABILITIES | |||||||||
Fiduciary liabilities | 0 | 0 | |||||||
Deferred revenue and accrued expenses | 0 | 0 | |||||||
Income taxes payable | 60 | 0 | |||||||
Short-term debt and current portion of long-term debt | 0 | 0 | |||||||
Deferred tax liabilities | 0 | 3 | |||||||
Other current liabilities | 6 | 15 | |||||||
Total current liabilities | 66 | 18 | |||||||
NON-CURRENT LIABILITIES | |||||||||
Long-term debt | 0 | 500 | |||||||
Liabilities for pension benefits | 0 | 0 | |||||||
Deferred tax liabilities | 4 | 3 | |||||||
Provisions for liabilities | 0 | 0 | |||||||
Other-non current liabilities | 9 | 10 | |||||||
Total non-current liabilities | 13 | 513 | |||||||
Total liabilities | 79 | 531 | |||||||
EQUITY | |||||||||
Total Willis Group Holdings stockholders' equity | (939) | (1,118) | |||||||
Noncontrolling interests | 0 | 0 | |||||||
Total equity | (939) | (1,118) | |||||||
TOTAL LIABILITIES AND EQUITY | (860) | (587) | |||||||
The Issuer [Member] | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | 122 | 76 | 74 | 104 | |||||
Accounts receivable | 0 | 0 | |||||||
Fiduciary assets | 0 | 0 | |||||||
Deferred tax assets | 0 | 1 | |||||||
Other current assets | 51 | 57 | |||||||
Total current assets | 173 | 134 | |||||||
Investments in subsidiaries | 1,445 | 1,455 | |||||||
Amounts owed by (to) Group undertakings | 781 | 1,002 | |||||||
NON-CURRENT ASSETS | |||||||||
Fixed assets | 58 | 52 | |||||||
Goodwill | 0 | 0 | |||||||
Other intangible assets, net | 0 | 0 | |||||||
Investments in associates | 0 | 0 | |||||||
Deferred tax assets | 0 | 0 | |||||||
Pension benefits asset | 0 | 0 | |||||||
Other non-current assets | 49 | 41 | |||||||
Total non-current assets | 107 | 93 | |||||||
TOTAL ASSETS | 2,506 | 2,684 | |||||||
CURRENT LIABILITIES | |||||||||
Fiduciary liabilities | 0 | 0 | |||||||
Deferred revenue and accrued expenses | 0 | 0 | |||||||
Income taxes payable | 0 | 0 | |||||||
Short-term debt and current portion of long-term debt | 110 | 110 | |||||||
Deferred tax liabilities | 0 | 1 | |||||||
Other current liabilities | 39 | 38 | |||||||
Total current liabilities | 149 | 149 | |||||||
NON-CURRENT LIABILITIES | |||||||||
Long-term debt | 1,491 | 1,653 | |||||||
Liabilities for pension benefits | 0 | 0 | |||||||
Deferred tax liabilities | 37 | 26 | |||||||
Provisions for liabilities | 0 | 0 | |||||||
Other-non current liabilities | 10 | 16 | |||||||
Total non-current liabilities | 1,538 | 1,695 | |||||||
Total liabilities | 1,687 | 1,844 | |||||||
EQUITY | |||||||||
Total Willis Group Holdings stockholders' equity | 819 | 840 | |||||||
Noncontrolling interests | 0 | 0 | |||||||
Total equity | 819 | 840 | |||||||
TOTAL LIABILITIES AND EQUITY | 2,506 | 2,684 | |||||||
Other [Member] | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | 239 | 240 | 85 | 117 | |||||
Accounts receivable | 884 | 809 | |||||||
Fiduciary assets | 10,768 | 10,167 | |||||||
Deferred tax assets | 21 | 35 | |||||||
Other current assets | 415 | 293 | |||||||
Total current assets | 12,327 | 11,544 | |||||||
Investments in subsidiaries | 3,854 | 3,855 | |||||||
Amounts owed by (to) Group undertakings | (92) | (71) | |||||||
NON-CURRENT ASSETS | |||||||||
Fixed assets | 330 | 330 | |||||||
Goodwill | 1,697 | 1,696 | |||||||
Other intangible assets, net | 456 | 492 | |||||||
Investments in associates | (35) | (51) | |||||||
Deferred tax assets | 6 | 7 | |||||||
Pension benefits asset | 261 | 179 | |||||||
Other non-current assets | 137 | 149 | |||||||
Total non-current assets | 2,852 | 2,802 | |||||||
TOTAL ASSETS | 18,941 | 18,130 | |||||||
CURRENT LIABILITIES | |||||||||
Fiduciary liabilities | 10,768 | 10,167 | |||||||
Deferred revenue and accrued expenses | 286 | 297 | |||||||
Income taxes payable | 101 | 69 | |||||||
Short-term debt and current portion of long-term debt | 4 | 0 | |||||||
Deferred tax liabilities | 17 | 5 | |||||||
Other current liabilities | 212 | 189 | |||||||
Total current liabilities | 11,388 | 10,727 | |||||||
NON-CURRENT LIABILITIES | |||||||||
Long-term debt | 0 | 4 | |||||||
Liabilities for pension benefits | 128 | 164 | |||||||
Deferred tax liabilities | 83 | 54 | |||||||
Provisions for liabilities | 182 | 183 | |||||||
Other-non current liabilities | 343 | 321 | |||||||
Total non-current liabilities | 736 | 726 | |||||||
Total liabilities | 12,124 | 11,453 | |||||||
EQUITY | |||||||||
Total Willis Group Holdings stockholders' equity | 6,788 | 6,646 | |||||||
Noncontrolling interests | 29 | 31 | |||||||
Total equity | 6,817 | 6,677 | |||||||
TOTAL LIABILITIES AND EQUITY | 18,941 | 18,130 | |||||||
Consolidating adjustments [Member] | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |||||
Accounts receivable | 27 | 28 | |||||||
Fiduciary assets | (678) | (598) | |||||||
Deferred tax assets | 0 | 0 | |||||||
Other current assets | (284) | (33) | |||||||
Total current assets | (935) | (603) | |||||||
Investments in subsidiaries | (8,371) | (8,085) | |||||||
Amounts owed by (to) Group undertakings | 0 | 0 | |||||||
NON-CURRENT ASSETS | |||||||||
Fixed assets | (1) | (1) | |||||||
Goodwill | 1,600 | 1,598 | |||||||
Other intangible assets, net | (16) | 0 | |||||||
Investments in associates | 221 | 212 | |||||||
Deferred tax assets | (1) | 0 | |||||||
Pension benefits asset | 0 | 0 | |||||||
Other non-current assets | 0 | (123) | |||||||
Total non-current assets | 1,803 | 1,686 | |||||||
TOTAL ASSETS | (7,503) | (7,002) | |||||||
CURRENT LIABILITIES | |||||||||
Fiduciary liabilities | (678) | (598) | |||||||
Deferred revenue and accrued expenses | 0 | 0 | |||||||
Income taxes payable | (123) | (12) | |||||||
Short-term debt and current portion of long-term debt | 0 | 0 | |||||||
Deferred tax liabilities | 0 | 0 | |||||||
Other current liabilities | (31) | (20) | |||||||
Total current liabilities | (832) | (630) | |||||||
NON-CURRENT LIABILITIES | |||||||||
Long-term debt | 0 | 0 | |||||||
Liabilities for pension benefits | 0 | 0 | |||||||
Deferred tax liabilities | 0 | 0 | |||||||
Provisions for liabilities | (3) | (4) | |||||||
Other-non current liabilities | 0 | 0 | |||||||
Total non-current liabilities | (3) | (4) | |||||||
Total liabilities | (835) | (634) | |||||||
EQUITY | |||||||||
Total Willis Group Holdings stockholders' equity | (6,668) | (6,368) | |||||||
Noncontrolling interests | 0 | 0 | |||||||
Total equity | (6,668) | (6,368) | |||||||
TOTAL LIABILITIES AND EQUITY | $ (7,503) | $ (7,002) | |||||||
|
Segment Information (Details 1) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | ||||
Corporate and other information | |||||||
Amortization of intangible assets | $ (18) | $ (22) | $ (52) | $ (64) | [1] | ||
Venezuela currency devaluation | (12) | [1] | |||||
Other operating expenses | (147) | (129) | (464) | (413) | |||
OPERATING INCOME | 90 | 106 | 485 | 576 | |||
Corporate and Other [Member] | |||||||
Corporate and other information | |||||||
Amortization of intangible assets | (18) | (22) | (52) | (64) | |||
Foreign exchange hedging | 3 | (2) | 5 | (8) | |||
Foreign exchange on the UK pension plan asset | (1) | (4) | 2 | ||||
Net gain on disposal before tax | 4 | (2) | |||||
Q1 2011 operational review | (15) | (130) | |||||
Release of previously established legal reserve | 7 | 7 | |||||
FSA regulatory settlement | (11) | ||||||
Venezuela currency devaluation | (12) | ||||||
Other operating expenses | 2 | (1) | (2) | (5) | |||
OPERATING INCOME | $ (29) | $ (22) | $ (186) | $ (82) | |||
|
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