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What changed in Willis Towers Watson's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Willis Towers Watson's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+501 added−501 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-24)

Top changes in Willis Towers Watson's 2023 10-K

501 paragraphs added · 501 removed · 377 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

88 edited+33 added−38 removed73 unchanged
Biggest changeBoard of Directors A list of the members of the Board of Directors of the Company as of this date of this Annual Report on Form 10-K and their principal occupations are provided below: Carl Hess Dame Inga Beale Fumbi Chima Chief Executive Officer and Board member and CEO since January 1, 2022 Former CEO of Lloyd’s of London and Board member since January 1, 2022 Executive Vice President and Chief Information Officer of Boeing Employees’ Credit Union and Board member since April 1, 2022 Michael Hammond Brendan O’Neill* Linda Rabbitt* Former CEO and Chair, Lockton International Holdings Ltd. and Board member since January 1, 2022 Former CEO of Imperial Chemical Industries PLC and Board member since January 4, 2016 Founder and Chair of Rand Construction Corporation and Board member since January 4, 2016 Paul Reilly Michelle Swanback Paul Thomas Chief Executive Officer and Chair of the board of Raymond James Financial and Board member since October 1, 2022 Chief Executive Officer, TTEC Engage and Board member since January 1, 2022 Former CEO of Reynolds Packaging Group and Board member since January 4, 2016 *Not standing for reelection at the Company’s upcoming annual general meeting of shareholders to be held in the second quarter of 2023.
Biggest changeBoard of Directors A list of the members of the board of directors of the Company as of this date of this Annual Report on Form 10-K and their principal occupations are provided below: Carl Hess Dame Inga Beale Fumbi Chima Chief Executive Officer Former Chief Executive Officer of Lloyd’s of London Former Executive Vice President and Chief Information Officer of Boeing Employees’ Credit Union Stephen Chipman Michael Hammond Jacqueline Hunt Former Chief Executive Officer of Grant Thornton LLP Former Chief Executive Officer and Chair, Lockton International Holdings Ltd.
The Retirement business provides actuarial support, plan design, and administrative services for all forms of pension and retirement savings plans. Our colleagues help our clients assess the costs and risks of retirement plans on cash flow, earnings and the balance sheet, the effects of changing workforce demographics on their retirement plans, and retiree benefit adequacy and security.
Retirement — Our Retirement business provides actuarial support, plan design, and administrative services for all forms of pension and retirement savings plans. Our colleagues help our clients assess the costs and risks of retirement plans on cash flow, earnings and the balance sheet, the effects of changing workforce demographics on their retirement plans, and retiree benefit adequacy and security.
Our Investments business provides advice and discretionary investment management solutions to defined benefit and defined contribution pension plans as well as to a range of other client types including insurers, endowments and foundations, and private wealth investors.
Investments — Our Investments business provides advice and discretionary investment management solutions to defined benefit and defined contribution pension plans as well as to a range of other client types including insurers, endowments and foundations, and private wealth investors.
As we implement and expand our direct-to-consumer sales and marketing solutions through our Benefits Delivery & Administration business, we are subject to various federal and state laws and regulations that prescribe when and how we may market to consumers 11 (including, without limitation, the Telephone Consumer Protection Act and other telemarketing laws and the Medicare Communications and Marketing Guidelines issued by the Center for Medicare Services).
As we implement and expand our direct-to-consumer sales and marketing solutions through our Benefits Delivery & Administration business, we are subject to various federal and state laws and regulations that prescribe when and how we may market to consumers (including, without limitation, the Telephone Consumer Protection Act and other telemarketing laws and the Medicare Communications and Marketing Guidelines issued by the Center for Medicare Services).
See Part I, Item 1A Risk Factors – ‘Demand for our services could decrease for various reasons, including a general economic 10 downturn, increased competition, or a decline in a client’s or an industry’s financial condition or prospects, all of which could substantially and negatively affect us’, for a description of competition-related risks that may affect demand for the Company’s services.
See Part I, Item 1A Risk Factors – ‘Demand for our services could decrease for various reasons, including a general economic downturn, increased competition, or a decline in a client’s or an industry’s financial condition or prospects, all of which could substantially and negatively affect us’ , for a description of competition-related risks that may affect demand for the Company’s services.
See Part I, Item 1A Risk Factors, for an analysis of how actions by regulatory authorities or changes in legislation and regulation as well as compliance with evolving laws, including with respect to data privacy, cybersecurity, and Brexit, in the jurisdictions in which we operate may have an adverse effect on our business.
See Part I, Item 1A Risk Factors, for an analysis of how actions by regulatory authorities or changes in legislation and regulation as well as compliance with evolving laws, including with respect to data privacy and cybersecurity, in the jurisdictions in which we operate may have an adverse effect on our business.
We have long-term relationships with our Investments clients, with the majority of our revenue driven by retainer contracts. 4 Career Our career-related offerings include advice, data, software and products to address clients’ total rewards and talent issues across the globe delivered through our Work & Rewards and Employee Experience businesses.
We have long-term relationships with our Investments clients, with the majority of our revenue driven by retainer contracts. Career Our career-related offerings include advice, data, software and products to address clients’ total rewards and talent issues across the globe delivered through our Work & Rewards and Employee Experience businesses.
We leverage our industry experience, strategic perspective and analytical skills to help clients measure and manage risk and capital, improve business performance and 6 create a sustainable competitive advantage. Our services include software and technology, risk and capital management, products and product pricing, financial and regulatory reporting, financial and capital modeling, M&A, outsourcing and business management.
We leverage our industry experience, strategic perspective and analytical skills to help clients measure and manage risk and capital, improve business performance and create a sustainable competitive advantage. Our services include software and technology, risk and capital management, products and product pricing, financial and regulatory reporting, financial and capital modeling, M&A, outsourcing and business management.
Additional competitive pressures have arisen and are expected to continue to arise from the entry and expansion of new market participants, such as banks, accounting firms, new brokers and insurance carriers themselves, offering risk management or transfer services. The human capital and risk management consulting industries are highly competitive.
Additional competitive pressures have arisen and are expected to continue to arise from the entry and expansion of new market participants, such as banks, accounting firms, new brokers and insurance carriers themselves, offering risk management or transfer services. 10 The human capital and risk management consulting industries are highly competitive.
Furman also serves as a Trustee of the Jewish Theological Seminary and a Director of the Legal Aid Society. He previously served as a member of the U.S. Securities and Exchange Commission’s Investor Advisory Committee, where he served on the Executive Committee and chaired the Market Structure Subcommittee.
Furman also serves as a Trustee of the Jewish Theological Seminary and a Director of the Legal Aid Society. He previously served as a member of the U.S. Securities and Exchange Commission’s Investor Advisory Committee, where he served on the Executive 13 Committee and chaired the Market Structure Subcommittee.
Garrard served as Head of Corporate Risk and Broking, and International since August 14, 2019 and, prior to that, as Head of International at WTW since January 4, 2016. Previously, Mr. Garrard served as Chief Executive Officer for Willis Group Holdings in Asia since 13 September 2012. Prior to that, Mr.
Previously, Mr. Garrard served as Head of Corporate Risk and Broking, and International since August 14, 2019 and, prior to that, as Head of International at WTW since January 4, 2016. Previously, Mr. Garrard served as Chief Executive Officer for Willis Group Holdings in Asia since September 2012. Prior to that, Mr.
ITEM 1. BUSINESS The Company WTW is a leading global advisory, broking and solutions company that provides data-driven, insight-led solutions in the areas of people, risk and capital. Utilizing the global view and local expertise of our more than 46,000 colleagues serving more than 140 countries and markets, we help organizations sharpen strategies, enhance resilience, motivate workforces and maximize performance.
ITEM 1. BUSINESS The Company WTW is a leading global advisory, broking and solutions company that provides data-driven, insight-led solutions in the areas of people, risk and capital. Utilizing the global view and local expertise of our 48,000 colleagues serving more than 140 countries and markets, we help organizations sharpen strategies, enhance resilience, motivate workforces and maximize performance.
Gebauer graduated Phi Beta Kappa and with high distinction from the University of Nebraska-Lincoln with a bachelor’s degree in mathematics and was designated a Chancellor’s Scholar. Carl A. Hess (age 61) - Mr. Hess has served as Chief Executive Officer at WTW since January 1, 2022 and, prior to that, served as President since August 16, 2021. Mr.
Gebauer graduated Phi Beta Kappa and with high distinction from the University of Nebraska-Lincoln with a bachelor’s degree in mathematics and was designated a Chancellor’s Scholar. Carl A. Hess (age 62) - Mr. Hess has served as Chief Executive Officer at WTW since January 1, 2022 and, prior to that, served as President since August 16, 2021. Mr.
We work with major corporations, emerging growth companies, governmental agencies and not-for-profit institutions in a wide variety of industries, with many of our client relationships spanning decades. None of the Company’s customers individually represented more than 10% of its consolidated revenue for each of the years ended December 31, 2022, 2021 and 2020.
We work with major corporations, emerging growth companies, governmental agencies and not-for-profit institutions in a wide variety of industries, with many of our client relationships spanning decades. None of the Company’s customers individually represented more than 10% of its consolidated revenue for each of the years ended December 31, 2023, 2022 and 2021.
Garrard started his insurance career at SBJ Stephenson Insurance Brokers in 1992 as a graduate trainee. He holds a bachelor’s degree in business administration from De Montfort University. Julie J. Gebauer (age 61) - Ms. Gebauer has served as Head of Health, Wealth and Career at WTW since January 1, 2022. Previously, Ms.
Garrard started his insurance career at SBJ Stephenson Insurance Brokers in 1992 as a graduate trainee. He holds a bachelor’s degree in business administration from De Montfort University. Julie J. Gebauer (age 62) - Ms. Gebauer has served as Head of Health, Wealth and Career at WTW since January 1, 2022. Previously, Ms.
Pullum conducted economic research at Greenspan Associates in Washington, D.C. and served as an analyst in the Goldman Sachs Equities Division in London. Ms. Pullum holds an M.B.A. from INSEAD and a bachelor’s degree in international economics from Georgetown University’s School of Foreign Service. Imran Qureshi (age 52) - Mr.
Pullum conducted economic research at Greenspan Associates in Washington, D.C. and served as an analyst in the Goldman Sachs Equities Division in London. Ms. Pullum holds an M.B.A. from INSEAD and a bachelor’s degree in international economics from Georgetown University’s School of Foreign Service. Imran Qureshi (age 53) - Mr.
Global Markets Direct & Facultative — Operating in the major wholesale reinsurance hubs across the world, including London, Bermuda, Singapore, Hong Kong and Shanghai, solutions are delivered both directly to clients for the most complex property and casualty risks and as facultative reinsurance placements where we serve as an intermediary for insurance companies.
Global Markets Direct & Facultative — Operating in the major wholesale reinsurance hubs across the globe, including London, Bermuda, Singapore, Hong Kong and Shanghai, solutions are delivered both directly to clients for the most complex property and casualty risks and as facultative reinsurance placements where we serve as an intermediary for insurance companies.
A meaningful portion of revenue in this business is from recurring work, though contracts may be annual or multi-year. Given the balance of revenue across consulting, broking and solutions, our revenue is somewhat weighted to the first quarter. W ealth Our wealth-related businesses include Retirement and Investments.
A meaningful portion of revenue in this business is from recurring work, though contracts may be annual or multi-year. Given the balance of revenue across consulting, broking and solutions, our revenue is somewhat weighted to the first half of the year. W ealth Our wealth-related businesses include Retirement and Investments.
Our aerospace business provides insurance broking, risk management services, contractual and technical advisory expertise to aerospace clients worldwide, including the world’s leading airlines, aircraft manufacturers, air cargo handlers and other airport and general aviation companies. The specialist InSpace team is also prominent in providing insurance and risk management services to the space industry.
Our aerospace business provides insurance broking, risk management services, contractual and technical advisory expertise to aerospace clients globally, including the world’s leading airlines, aircraft manufacturers, air cargo handlers and other airport and general aviation companies. The specialist InSpace team is also prominent in providing insurance and risk management services to the space industry.
The Company makes available, free of charge through our website, www.wtwco.com, our Annual Report on Form 10-K, our quarterly reports on Form 10-Q, our proxy statement, current reports on Form 8-K and Forms 3, 4, and 5 filed on behalf of directors and executive officers, as well as any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934 (the ‘Exchange Act’) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
The Company makes available, free of charge through our website, www.wtwco.com, our Annual Report on Form 10-K, our quarterly reports on Form 10-Q, our proxy statement, current reports on Form 8-K and Forms 3, 4, and 5 filed on behalf of directors and Section 16 officers, as well as any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934 (the ‘Exchange Act’) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
Faber holds a bachelor’s degree in economics from Williams College and an M.B.A from Columbia Business School. Matthew S. Furman (age 53) - Mr. Furman has served as General Counsel at WTW since January 4, 2016. Previously, Mr.
Faber holds a bachelor’s degree in economics from Williams College and an M.B.A from Columbia Business School. Matthew S. Furman (age 54) - Mr. Furman has served as General Counsel at WTW since January 4, 2016. Previously, Mr.
He is also a Certified Public Accountant. Anne Pullum (age 40) - Ms. Pullum has served as Head of Europe at WTW since August 30, 2021 and, prior to that, as Head of Western Europe from May 31, 2019 to August 30, 2021.
He is also a Certified Public Accountant. Anne Pullum (age 41) - Ms. Pullum has served as Head of Europe at WTW since August 30, 2021 and, prior to that, as Head of Western Europe from May 31, 2019 to August 30, 2021.
Further, some of our entities are also authorized and regulated by certain financial services authorities in countries such as Sweden, Ireland, the Netherlands and the U.K. All companies carrying on similar activities in a given jurisdiction are subject to regulations which are not dissimilar to the requirements for our operations in the U.S. and U.K.
Further, some of our entities are also authorized and regulated by certain financial services authorities in countries such as Sweden, Ireland, the Netherlands and the U.K. Other All companies carrying on similar activities discussed above in a given jurisdiction are subject to regulations which are not dissimilar to the requirements for our operations in the U.S. and U.K.
We believe we can achieve this through executing on our three strategic priorities – grow, simplify and transform: • Grow at or above market in priority areas : Focus on core opportunities with the highest growth and return; innovate and accelerate our offerings through a dynamic, yet disciplined, approach; bring targeted solutions to clients reflecting more connected offerings; and increase scale to fill gaps in capabilities through inorganic expansion. • Simplify the business to increase agility and effectiveness : Implement the Company’s streamlined structure of two business segments (Health, Wealth & Career and Risk & Broking; see ‘Segment Reorganization’ within this Item 1 for further information) and three geographies (Europe, International and North America); develop a globally consistent client management model and enhance operations to improve sales and retention outcomes; manage our portfolio of businesses intentionally to drive optimal value; and increase speed of execution through agile decision-making processes. • Transform operations to drive savings while enhancing our client and colleague experiences : Maximize global platforms to be as common as possible and as distinct as necessary; right-shore operations to capitalize on our scale; rationalize real estate and build new ways of working; and modernize technology to enhance the digital experience.
We believe we can achieve this through executing on our three strategic priorities – grow, simplify and transform: • Grow at or above market in priority areas : Focus on core opportunities with the highest growth and return; innovate and accelerate our offerings through a dynamic, yet disciplined, approach; bring targeted solutions to clients reflecting more connected offerings; and increase scale to fill gaps in capabilities through inorganic expansion. • Simplify the business to increase agility and effectiveness : Implement the Company’s streamlined structure of two business segments (Health, Wealth & Career and Risk & Broking) and three geographies (Europe, International and North America); develop a globally consistent client management model and enhance operations to improve sales and retention outcomes; manage our portfolio of businesses intentionally to drive optimal value; and increase speed of execution through agile decision-making processes. • Transform operations to drive savings while enhancing our client and colleague experiences : Maximize global platforms to be as common as possible and as distinct as necessary; right-shore operations to capitalize on our scale; rationalize real estate and build new ways of working; and modernize technology to enhance the digital experience.
Within our Work & Rewards business, we help clients determine the best ways to get work done, the skills needed for jobs, and how to reward it. We address executive compensation and broad-based rewards.
Work & Rewards — Within our Work & Rewards business, we help clients determine the best ways to get work done, the skills needed for jobs, and how to reward employees. We address executive compensation and broad-based rewards.
Andrew J. Krasner (age 47) - Mr. Krasner has served as Chief Financial Officer at WTW since September 7, 2021. From February 2021 to August 2021, Mr. Krasner served as Chief Financial Officer for Assured Partners. From June 2018 to January 2021, Mr.
Andrew J. Krasner (age 48) - Mr. Krasner has served as Chief Financial Officer at WTW since September 7, 2021. From February 2021 to August 2021, Mr. Krasner served as Chief Financial Officer for Assured Partners. From June 2018 to January 2021, Mr.
See Part I, Item 1A Risk Factors, for a description of Brexit-related risks to the Company. Furthermore, as a result of Brexit, the WTW Brexit broking solution (the U.K. Branch of Willis Towers Watson SA/NV) has been required to seek authorization from the FCA as a third country branch.
See Part I, Item 1A Risk Factors, for a description of Brexit-related risks to the Company. Furthermore, as a result of Brexit, the WTW Brexit broking solution (the U.K. branch of Willis Towers Watson SA/NV) was required to seek authorization from the FCA as a third country branch.
Qureshi holds a bachelor’s degree in pure mathematics and statistics with honors from the University of Manchester in the U.K. and has an actuarial background. 14 Pamela Thomson-Hall (age 54) - Ms. Thomson-Hall has served as the Head of International at WTW since August 30, 2021.
Qureshi holds a bachelor’s degree in pure mathematics and statistics with honors from the University of Manchester in the U.K. and has an actuarial background. Pamela Thomson-Hall (age 55) - Ms. Thomson-Hall has served as the Head of International at WTW since August 30, 2021.
See Part I, Item 1A Risk Factors – ‘Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government laws or regulations, or if government laws or regulations decrease the need for our services or increase our costs’ and related risk factors for a description of legal, non-financial regulatory, and compliance risks to the Company.
See Part I, Item 1A Risk Factors – ‘Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government laws or regulations, or if government laws or regulations decrease the need for our services, increase our costs or limit our compensation’ and related risk factors for a description of legal, non-financial/-regulatory and compliance risks to the Company.
Additionally, some of our private exchange activities, including our TRANZACT business which focuses on direct-to-consumer Medicare policy sales, are overseen by the Centers for Medicare & Medicaid Services, which is part of the Department of Health and Human Services.
Additionally, some of our private exchange activities, including our TRANZACT business which focuses on direct-to-consumer Medicare policy sales, are overseen by the Centers for Medicare & Medicaid Services (‘CMS’), which is part of the U.S. Department of Health and Human Services.
Prior to that, she served as the Senior Director, Global Talent Advisor for Human Capital & Benefits from March 2019 to August 2021. She also served as Senior Director and Head of Global Total Rewards, HR Integration and the HR Business Office from November 2016 to March 2019. From January 2016 to November 2016, Ms.
She served as the Senior Director, Global Talent Advisor for Human Capital & Benefits from March 2019 to August 2021 and as Senior Director and Head of Global Total Rewards, HR Integration and the HR Business Office from November 2016 to March 2019. From January 2016 to November 2016, Ms.
Year ended December 31, 2022 2021 2020 Health, Wealth & Career 60 % 60 % 60 % Risk & Broking 40 % 40 % 40 % The following presents descriptions of our reorganized segments: Health, Wealth & Career The Health, Wealth & Career (‘HWC’) segment provides an array of advice, broking, solutions and technology for employee benefit plans, institutional investors, compensation and career programs, and the employee experience overall.
Year ended December 31, 2023 2022 2021 Health, Wealth & Career 60 % 60 % 60 % Risk & Broking 40 % 40 % 40 % 4 The following presents descriptions of our segments: Health, Wealth & Career The Health, Wealth & Career (‘HWC’) segment provides an array of advice, broking, solutions and technology for employee benefit plans, institutional investors, compensation and career programs, and the employee experience overall.
We bring in-depth data analysis and perspective to their decision process, because we have tracked the retirement designs and financing strategies of companies around the world over many decades.
We bring in-depth data analysis and perspective to their decision-making process as we have tracked the retirement designs and financing strategies of companies around the world over many decades.
Available Information The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains annual, quarterly and current reports, proxy statements and other information that issuers (including WTW) file electronically with the SEC. The SEC’s website is www.sec.gov.
The SEC maintains a website that contains annual, quarterly and current reports, proxy statements and other information that issuers (including WTW) file electronically with the SEC. The SEC’s website is www.sec.gov.
Krasner was Global Treasurer and Head of M&A of WTW, and from 2012 to June 2018, was Head of M&A, responsible for the Company’s Treasury operations and M&A, joint venture, divestiture, and strategic investment activity. Mr.
Krasner was Global Treasurer and Head of M&A of WTW, and from 2012 to June 2018, was Head of M&A, responsible for the M&A, joint venture, divestiture, and strategic investment activity. Mr.
Our values, vision, purpose, and new Colleague Value Proposition (‘CVP’) - we’re Authentic, Curious and Bold, set the tone for what to expect at WTW. In addition, our ‘grow, simplify and transform’ strategic priorities enhance our focus on how to continually support and improve, as appropriate, our colleague experience.
Our values, vision, purpose, and Colleague Value Proposition (‘CVP’) — we’re Authentic, Curious and Bold, sets the tone for what to expect at WTW. In addition, our ‘grow, simplify and transform’ strategic priorities enhance our focus on how to continually support and improve our colleague experience.
A significant portion of the revenue in this business is recurring in nature, driven by either the commissions from the policies we sell, or from long-term service contracts with our clients that typically range from three to five years.
A significant portion of the revenue in Benefits Delivery & Outsourcing is recurring in nature, driven by either the commissions from the policies we sell, or from long-term service contracts with our clients that typically range from three to five years.
Our clients include many of the world’s leading corporations, including approximately 93% of the FTSE 100, 89% of the Fortune 1000, and 90% of the Fortune Global 500 companies. We also advise the majority of the world’s leading insurance companies.
Our clients include many of the world’s leading corporations, including approximately 95% of the FTSE 100, 89% of the Fortune 1000, and 91% of the Fortune Global 500 companies. We also advise the majority of the world’s leading insurance companies.
At December 31, 2022, we had the following global female representation, and in the U.S. where we have the most complete data, we had the following ethnic and racial diversity representation: Colleague Group All Colleagues Senior Leadership (ii) Female (global) 55.1% 31.0% Ethnic and racial diversity (U.S. only) Asian 7.3% 4.9% Black 11.8% 1.2% Hispanic 6.3% 2.0% Other non-white (i) 2.3% 0.6% Total 27.7% 8.7% (i) Other non-white includes American Indian, Native Hawaiian or other Pacific Islander, and two or more races.
At December 31, 2023, we had the following global female representation, and in the U.S. where we have the most complete data, we had the following ethnic and racial diversity representation: Colleague Group All Colleagues Senior Leadership (ii) Female (global) 55.0% 32.5% (iii) Ethnic and racial diversity (U.S. only) Asian 6.7% 5.6% Black 15.2% 1.6% Hispanic 9.1% 2.8% Other non-white (i) 3.2% 1.5% Total 34.2% 11.5% (iv) (i) Other non-white includes American Indian, Native Hawaiian or other Pacific Islander and two or more races.
We harness our collective power as ‘One WTW’ to make smart connections to serve and support our clients. We operate in attractive markets – both growing and mature – with a diversified platform across geographies, industries, segments and lines of business.
We harness our collective power as ‘One WTW’ to make smart connections to serve and support our clients. We operate in attractive markets – both growing and mature – with a diversified platform across industries, segments and businesses globally.
Banas was Vice President and Global HR Partner with XL Capital/ XL Global Services / XL Insurance from November 2001 to June 2011. Ms. Banas has a BS in Business Management from Fairfield University and a partial MS in Human Resource Management from the University of Connecticut. Anne D. Bodnar (age 66) - Ms.
Banas was Vice President and Global HR Partner with XL Capital / XL Global Services / XL Insurance from November 2001 to June 2011. Ms. Banas has a BS in Business Management from Fairfield University and a partial MS in Human Resource Management from the University of Connecticut. Alexis Faber (age 46) - Ms.
As an insurance broker, we act as an intermediary between our clients and insurance carriers by advising our clients on their risk management requirements, helping them to determine the best means of managing risk and negotiating and placing insurance with insurance carriers through our global distribution network. We operate a private Medicare exchange in the U.S.
As an insurance broker, we act as an intermediary between our clients and insurance carriers by advising our clients on their risk management requirements, helping them to determine the best means of managing risk and negotiating and placing insurance with insurance carriers through our global distribution network.
The businesses benefit from regulatory changes affecting our clients that require strategic advice, program changes and communication, as well as the focus on ESG as a component of executive and board pay, the redefinition of jobs, work location and career paths as technology disaggregates work, and the recalibration of pay and the employee experience amidst shifting labor markets.
The businesses benefit from regulatory changes affecting our clients that require strategic advice, program changes and communication, the redefinition of jobs, work location and career paths as technology disaggregates work, and the recalibration of pay and the employee experience amidst shifting labor markets.
Midwest from February 2017 to October 2019, and was Market Leader, Greater Chicago and Wisconsin from February 2016 to February 2017. Mr. Qureshi was Managing Consultant of the Chicago office from January 2013 to January 2016, and has been with WTW in other roles since March 1999. Mr. Qureshi is currently a board director at The Executives' Club of Chicago.
Midwest from February 2017 to October 2019, and was Market Leader, Greater Chicago and Wisconsin from February 2016 to February 2017. Mr. Qureshi was Managing Consultant of the Chicago office from January 2013 to January 2016, and has been with WTW in other roles since March 1999. Mr.
Previously, he was the board chair of the Human Resources Management Association of Chicago, and he served on the M&A Faculty of WorldatWork where he taught M&A and taught the International Benefits Course for the International Foundation of Employee Benefit Plans. In 2004, Mr.
Qureshi is currently a board director at Smithbucklin and The Executives' Club of Chicago. Previously, he was the board chair of the Human Resources Management Association of Chicago, and he served on the M&A Faculty of WorldatWork where he taught M&A and taught the International 14 Benefits Course for the International Foundation of Employee Benefit Plans. In 2004, Mr.
Previously, she served as Chief Operating Officer for Corporate Risk & Broking f rom March 2018 to August 2021. Prior to that, Ms.
Faber has served as Chief Operating Officer at WTW since August 30, 2021. Previously, she served as Chief Operating Officer for Corporate Risk & Broking f rom March 2018 to August 2021. Prior to that, Ms.
We offer clients a full range of integrated retirement consulting services and solutions to meet the needs of all types of employers, including those that continue to offer defined benefit plans and those that are reexamining their retirement benefit strategies. We help multinationals coordinate plan design and actuarial services across their complex global plans.
We offer clients a full range of integrated retirement consulting services and solutions to meet the needs of all types of employers. We help multinationals coordinate plan design and actuarial services across their complex global plans.
It is driven by regional councils that provide local perspectives and help to translate our global priorities into actions within each region. • We have I&D processes in place that are intended to ensure outcomes represent our values and progress our diversity goals. • Our inclusion networks are designed to engage our talent and better connect us to each other, our clients and the communities in which we work and live.
It is supported by regional councils that provide local perspectives and help to translate our global priorities into actions within each region. • We have I&D processes and learning curriculums in place that are intended to ensure progression of our I&D priorities and create an inclusive culture that fosters and promotes diversity. • Our inclusion networks are designed to engage our talent and better connect us to each other, our clients, and the communities in which we work and live.
Automatic Data Processing and Fidelity are among our largest competitors in the insurance exchange industry. With the implementation of the Patient Protection and Affordable Care Act, we also compete with the public exchanges currently run by the U.S. federal, and state governments. We also compete with providers of account-based health plans and consumer-directed benefits such as WageWorks and HealthEquity.
With the implementation of the Patient Protection and Affordable Care Act, we also compete with the public exchanges currently run by the U.S. federal, and state governments. We also compete with providers of account-based health plans and consumer-directed benefits such as WageWorks and HealthEquity.
Our major competitors in the insurance consulting and software industry include Milliman, Oliver Wyman (a Marsh & McLennan company), the big four accounting firms (Deloitte LLP, Ernst & Young, PricewaterhouseCoopers, and KPMG), and SunGard. Aon plc, Buck Consultants (an HIG Capital Company), Connextions (a United Healthcare company) and Mercer (a Marsh & McLennan company).
Our major competitors in the insurance consulting and software industry include Milliman, Oliver Wyman (a Marsh & McLennan company), the big four accounting firms (Deloitte LLP, Ernst & Young, PricewaterhouseCoopers, and KPMG), and SunGard.
By leveraging its multiple distribution channels and diverse product portfolio, Individual Marketplace offers solutions to a broad consumer base, helping individuals compare, purchase and use health insurance products, tools and information for life. Our TAS business provides pension outsourcing services to hundreds of clients across multiple industries.
By leveraging its multiple distribution channels and diverse product portfolio, Individual Marketplace offers solutions to a broad consumer base, helping individuals compare, purchase and use health insurance products, tools and information for life.
He holds a bachelor’s degree magna cum laude from Brown University and a law degree magna cum laude from Harvard Law School. Adam L. Garrard (age 57) - Mr. Garrard has served as Head of Risk and Broking since January 1, 2022. Previously, Mr.
He holds a bachelor’s degree magna cum laude from Brown University and a law degree magna cum laude from Harvard Law School. Adam L. Garrard (age 58) - Mr. Garrard has served as Head of Risk and Broking since January 1, 2022. In the third quarter of 2024, Mr. Garrard will assume the role of chairman, Risk and Broking.
We bring together a broad array of specialist investment knowledge and skills across all asset classes, a high-quality execution platform, a cost advantage through our scale, and expert advisors with experience across all client types from the largest plans in the world to small corporate pension plans.
Our solutions range from single asset class activity, through complete management of entire pension plan assets including sophisticated liability hedging programs. 5 We bring together a broad array of specialist investment knowledge and skills across all asset classes, a high-quality execution platform, a cost advantage through our scale, and expert advisors with experience across all client types from the largest plans in the world to small corporate pension plans.
These revisions are aimed at strengthening investor protection and improving the function of financial markets. MiFID II imposes a variety of requirements that include, among others, rules relating to product governance and independent investment advice, responsibility of management bodies, inducements, information and reporting to clients, cross-selling, remuneration of staff, and best 12 execution of trades for clients.
MiFID II imposes a variety of requirements that include, among others, rules relating to product governance and independent investment advice, responsibility of management bodies, inducements, information and reporting to clients, cross-selling, remuneration of staff, and best execution of trades for clients.
Information about Executive Officers of the Registrant The executive officers of the Company as of February 24, 2023 were as follows: Kristy D. Banas (age 51) - Ms. Banas has served as Chief Human Resources Officer since August 16, 2021.
Information about Executive Officers of the Registrant The executive officers of the Company as of February 22, 2024 were as follows: Kristy D. Banas (age 52) - Ms. Banas has served as Chief Human Resources Officer since August 16, 2021, and also oversees marketing and communication functions.
We care as much about how we work as we do about the impact that we make. This means commitment to a shared purpose and values, a framework that guides how we run our business and serve clients.
Through these strategies we aim to grow revenue, improve margins and increase cash flow, EBITDA and earnings. We care as much about how we work as we do about the impact that we make. This means commitment to a shared purpose and values, a framework that guides how we run our business and serve clients.
The number of employees by segment as of the year ended December 31, 2022 is approximated below: December 31, 2022 Health, Wealth & Career 24,000 Risk & Broking 14,000 Corporate and Other 8,600 Total Employees 46,600 The number of employees by geography as of the year ended December 31, 2022 is approximated below: December 31, 2022 North America 15,900 Europe 15,000 International 15,700 Total Employees 46,600 Voluntary turnover excluding seasonal employees (rolling 12-month attrition) has stabilized in 2022 (15.2%) compared to 2021 (15.2%).
The number of employees by segment as of the year ended December 31, 2023 is approximated below: December 31, 2023 Health, Wealth & Career 24,100 Risk & Broking 14,300 Corporate and Other 9,600 Total Employees 48,000 The number of employees by geography as of the year ended December 31, 2023 is approximated below: December 31, 2023 North America 15,500 Europe 15,000 International 17,500 Total Employees 48,000 Voluntary turnover excluding TRANZACT employees (rolling 12-month attrition) has continued on a consistent downward trend throughout 2023 (10.8% compared to 15.2% in 2022).
They will also provide protection to whistleblowers against retaliation. Other Certain of our entities that undertake pension scheme management are subject to MiFID (Markets in Financial Instruments Directive) and MiFIR (the Markets in Financial Instruments Regulation). In addition, revisions to MiFID (‘MiFID II’) took effect in January 2018.
Certain of our entities that undertake pension scheme management are subject to MiFID (Markets in Financial Instruments Directive) and MiFIR (the Markets in Financial Instruments Regulation). In addition, revisions to MiFID (‘MiFID II’) took effect in January 2018. These revisions are aimed at strengthening investor protection and improving the function of financial markets.
We place insurance with more than 2,500 insurance carriers, none of which individually accounted for a significant concentration of the total premiums we placed on behalf of our clients in 2022, 2021 or 2020.
We place insurance with more than 2,500 insurance carriers, none of which individually accounted for a significant concentration of the total premiums we placed on behalf of our clients in 2023, 2022 or 2021. Available Information The Company files annual, quarterly and current reports, proxy statements and other information with the SEC.
The global lines of business include: Property and Casualty — Property and Casualty provides property and liability insurance brokerage services across a wide range of industries and segments including real estate, healthcare and retail.
Property and Casualty — Property and Casualty, in each of our geographical areas, provides property and liability insurance brokerage services across a wide range of industries and segments including real estate, healthcare and retail.
Below are the percentages of revenue generated by each segment for each of the years ended December 31, 2022, 2021 and 2020. These percentages exclude revenue that has been classified as discontinued operations in our consolidated statements of comprehensive income.
Principal Services We manage our business across two integrated reportable operating segments: Health, Wealth & Career and Risk & Broking. Below are the percentages of revenue generated by each segment for each of the years ended December 31, 2023, 2022 and 2021. These percentages exclude revenue that has been classified as discontinued operations in our consolidated statements of comprehensive income.
Industrial and commercial companies increasingly rely upon their own subsidiary insurance companies, known as captive insurance companies, self-insurance pools, risk retention groups, mutual insurance companies and other mechanisms for funding their risks, rather than buy insurance.
For example, rather than purchase additional insurance through brokers, some insureds have been retaining a greater proportion of their risk portfolios than previously. Industrial and commercial companies increasingly rely upon their own subsidiary insurance companies, known as captive insurance companies, self-insurance pools, risk retention groups, mutual insurance companies and other mechanisms for funding their risks, rather than buy insurance.
European Union In 2005, the European Union Insurance Mediation Directive introduced rules to enable insurance and reinsurance intermediaries to operate and provide services within each member state of the E.U. on a basis consistent with the E.U. single market and customer protection aims.
The branch is therefore subject to requirements in key areas such as SMCR and continues to be subject, in addition, to the supervisory oversight of the Belgian Financial Services & Markets Authority. 12 European Union In 2005, the European Union Insurance Mediation Directive introduced rules to enable insurance and reinsurance intermediaries to operate and provide services within each member state of the E.U. on a basis consistent with the E.U. single market and customer protection aims.
Examples of key activities include: • Our global I&D council, sponsored by our CEO and CHRO, sets the standard for our I&D initiatives globally.
Examples of key activities include: • Our global I&D council, sponsored by our Chief Executive Officer and Chief Human Resources Officer, sets the goals for our global I&D initiatives.
Marine — Marine provides specialist expertise to the maritime and logistics industries. Our Marine business provides insurance broking services related to hull and machinery, cargo, protection and indemnity, fine art and general marine liabilities, among others.
A surety bond is a financial instrument that guarantees contractual performance, statutory compliance, and financial assurance for domestic and international companies. Marine — Marine provides specialist expertise to the maritime and logistics industries. Our Marine business provides insurance broking services related to hull and machinery, cargo, protection and indemnity, fine art and general marine liabilities, among others.
We offer a flexible approach that adapts to a wide range of client needs and circumstances, with the objective of higher returns, lower risk and lower costs within each client’s unique situation. Our solutions range from single asset class activity, through complete management of entire pension plan assets including sophisticated liability hedging programs.
We offer a flexible approach that adapts to a wide range of client needs and circumstances, with the objective of higher returns, lower risk and lower costs within each client’s unique situation.
We have some businesses, such as our health and benefits and administration businesses, which can be counter cyclical during the early period of a significant economic change.
We have some businesses, such as our health and benefits and administration businesses, which can be counter cyclical during the early period of a significant economic change. Business Strategy We believe that a unified and integrated approach to advisory, broking and solutions can be a path to growth for organizations around the world.
Human Capital Colleague experience – Our colleague experience is an important differentiating factor for WTW.
Human Capital Colleague experience – Our colleague experience is an important differentiating factor for WTW and a key enabler of our grow, simplify and transform strategy.
Drawing on expertise in H&B and Retirement to create high-performing benefit plan designs, we believe we are well-positioned to help clients of all sizes simplify their benefits delivery, while lowering the total costs of benefits and related administration. Individual Marketplace offers decision support processes and tools to connect consumers with insurance carriers in private individual and Medicare markets.
Drawing on expertise in H&B and Retirement to create high-performing benefit plan designs, we believe we are well-positioned to help clients of all sizes simplify their benefits delivery, while lowering the total costs of benefits and related administration. Our technology also provides trustees and HR teams with timely management information to monitor activity and service levels and reduce administration costs.
Addressing four key areas, Health, Wealth, Career and Benefits Delivery & Outsourcing, the segment is focused on addressing our clients’ people and risk needs to help them succeed in a global marketplace. 3 Health The Health & Benefits (‘H&B’) business provides strategy and design consulting, plan management service and support, broking and administration across the full spectrum of health, wellbeing and other group benefit programs, including medical, dental, disability, life, voluntary benefits and other coverage.
Health The Health & Benefits (‘H&B’) business provides strategy and design consulting, plan management service and support, broking and administration across the full spectrum of health, wellbeing and other group benefit programs, including medical, dental, disability, life, voluntary benefits and other coverage.
We also arrange insurance products and services for our affinity client partners to offer to their customers, employees, or members alongside, or in addition to, their principal business offerings. Aerospace — Aerospace provides specialist expertise to the aerospace and space industries.
Affinity — Through Affinity, we arrange insurance products and services for our affinity client partners to offer to their customers, employees, or members alongside, or in addition to, their principal business offerings. Risk & Analytics (‘R&A’) — Our R&A offering includes deep expertise on specific client needs.
Competition We face competition in all fields in which we operate, based on factors including global capability, product breadth, innovation, quality of service and price. We compete with companies such as Accenture plc, Aon plc, Arthur J. Gallagher & Co., Brown & Brown Inc., Cognizant Technology Solutions Corporation, Marsh & McLennan Companies, Inc.
For more information see Part I, Item 1A Risk Factors of this Annual Report on Form 10-K. Competition We face competition in all fields in which we operate, based on factors including global capability, product breadth, innovation, quality of service and price. We compete with companies such as Aon plc, Arthur J.
General Data Protection Regulations, the Personal Information Protection Law (‘PIPL’) in China and privacy legislation in certain U.S. states. Our most significant regulatory regions are further described below: United States Our activities in connection with insurance brokerage services within the U.S. are subject to regulation and supervision by state authorities.
Similarly, we are subject in many jurisdictions to antitrust laws, which are designed to promote robust competition in the markets in which we participate. 11 Our most significant regulatory regions are further described below: United States Our activities in connection with insurance brokerage services within the U.S. are subject to regulation and supervision by state authorities.
While these businesses enjoy long-term relationships with many clients, work in several practices is often project-based and can be sensitive to economic changes.
Revenue for our career-related businesses is partly seasonal in nature, with heightened activity in the second half of the calendar year during the annual compensation, benefits and survey cycles. While these businesses enjoy long-term relationships with many clients, work in several practices is often project-based and can be sensitive to economic changes.
Current inclusion networks include: Gender Equity, LGBT+, Multicultural, Workability (Asia, North America, the U.K.) and Young Professionals (Asia, the U.K., Western Europe). Total rewards – We invest significant resources in our most important asset, our colleagues.
Current inclusion networks include: Gender Equity, LGBT+, Multicultural, Workability (Asia, North America, the U.K.), Early Careers Professionals (Asia, the U.K., Western Europe), Veterans (North America) and Caregivers (U.K.).
The segment comprises two primary businesses: Corporate Risk & Broking (‘CRB’) The ‘ CRB’ business places more than $25 billion of premiums into the insurance markets on an annual basis, and delivers integrated global solutions tailored to client needs, underpinned by data and analytics through a balanced matrix of global lines of business across all of the Company’s three geographical areas: North America, Europe (including Great Britain) and International.
The segment comprises two primary businesses: our Corporate Risk & Broking and our Insurance Consulting and Technology businesses. Corporate Risk & Broking (‘CRB’) The CRB business places more than $30 billion of premiums into the insurance markets on an annual basis and delivers integrated global solutions tailored to client needs.
To support this, we’re focusing on three key areas: • Attract and hire to grow our talent pipeline of colleagues from underrepresented communities. • Develop and promote to increase the overall diversity in business leadership. • Promote an inclusive culture that respects each other’s differences and celebrates what’s unique about each of us.
We are taking action that we expect will have the effect of increasing representation and overall diversity throughout our talent pipeline, as reflected in the three focus areas of our ongoing multiyear I&D strategy: • Attract and hire to grow our talent pipeline of colleagues from diverse communities. • Develop and promote in an inclusive and thoughtful manner, with the aspiration of increasing the overall diversity in business leadership. • Promote an inclusive culture that respects each other’s differences and celebrates what is unique about each of us.
We do not consider these regulatory requirements as adversely affecting our competitive position. Across many jurisdictions we are subject to various financial crime laws and regulations through our activities, activities of associated persons, the products and services we provide and our business and client relationships.
Across many jurisdictions we are subject to various financial crime laws and regulations through our activities, activities of associated persons, the products and services we provide and our business and client relationships. Such laws and regulations relate to, among other areas, sanctions and export control, anti-bribery, anti-corruption, anti-money-laundering and counter-terrorist financing.
Our executive officers have I&D objectives as part of their individual performance component, comprising a portion of their short-term incentive awards. Each year our leaders cascade I&D objectives throughout the organization, and we continue to reinforce objective and fair processes that mitigate bias in all our talent programs and processes.
Each year our leaders cascade 9 I&D aspirational priorities throughout the organization, and we continue to reinforce objective and fair processes that aim to mitigate bias in our talent programs and hiring practices.
Such laws and regulations relate to, among other areas, sanctions and export control, anti-bribery, anti-corruption, anti-money-laundering and counter-terrorist financing. Our failure, or that of our employees, to satisfy the regulatory compliance requirements or the legal requirements governing our activities, can result in disciplinary action, fines, reputational damage and financial harm.
We do not consider these regulatory requirements as adversely affecting our competitive position. Our failure, or that of our employees, to satisfy the regulatory compliance requirements or the legal requirements governing our activities, can result in disciplinary action, fines, reputational damage and financial harm.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIntellectual Property, Technology, Cybersecurity and Data Protection Risks • Data and cyber security breaches or improper disclosure of confidential company or personal data could result in material financial loss, regulatory actions, reputational harm, and/or legal liability. • Our inability to comply with complex and evolving laws and regulations related to data privacy and cybersecurity could result in material financial loss, regulatory actions, reputational harm and/or legal liability. • Our inability to successfully mitigate and recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm, and/or legal liability. • Material interruption to or loss of our information processing capabilities or failure to effectively maintain and upgrade our information processing hardware or systems could cause material financial loss, regulatory actions, reputational harm, and/or legal liability. • Limited protection of our intellectual property could harm our business and our ability to compete effectively, and we face the risk that our services or products may infringe upon the intellectual property rights of others. 16 Legal, Non-Financial/Regulatory and Compliance Risks • From time to time, we receive claims and are party to lawsuits arising from our work, which could materially adversely affect our reputation, business and financial condition. • As a highly regulated company, we are subject from time to time to inquiries or investigations by governmental agencies or regulators that could have a material adverse effect on our business or results of operations. • In conducting our businesses around the world, we are subject to political, economic, legal, regulatory, cultural, market, operational and other risks that are inherent in operating in many countries. • Sanctions imposed by governments, or changes to such sanction regulations (such as sanctions imposed on Russia), and related counter-sanctions, could have a material adverse impact on our operations or financial results. • Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government laws or regulations, or if government laws or regulations decrease the need for our services or increase our costs. • Our compliance systems and controls cannot guarantee that we comply with all applicable federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in applicable laws and regulations in the jurisdictions in which we operate could have an adverse effect on our business. • Allegations of conflicts of interest or anti-competitive behavior, including in connection with accepting market derived income (‘MDI’), may have a material adverse effect on our business, financial condition, results of operation or reputation. • Changes and developments in the health insurance system in the United States could harm our business. • Increasing scrutiny and changing expectations from investors, clients and our colleagues with respect to our environmental, social and governance (‘ESG’) practices may impose additional costs on us or expose us to reputational or other risks. • The United Kingdom’s exit from the European Union, which occurred on January 31, 2020, and the risk that other countries may follow, could adversely affect us.
Biggest changeLegal, Non-Financial/Regulatory and Compliance Risks • From time to time, we receive claims and are party to lawsuits arising from our work, which could materially adversely affect our reputation, business and financial condition. • As a highly regulated company, we are subject from time to time to inquiries or investigations by governmental agencies or regulators that could have a material adverse effect on our business or results of operations. • In conducting our businesses around the world, we are subject to political, economic, legal, regulatory, cultural, market, operational and other risks that are inherent in operating in many countries. • Sanctions imposed by governments, or changes to such sanction regulations (such as sanctions imposed on Russia), and related counter-sanctions, could have a material adverse impact on our operations or financial results. • Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government laws or regulations, or if government laws or regulations decrease the need for our services, increase our costs or limit our compensation. • Our compliance systems and controls cannot guarantee that we comply with all applicable federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in applicable laws and regulations in the jurisdictions in which we operate could impact our operations or have an adverse effect on our business. • Allegations of conflicts of interest or anti-competitive behavior, including in connection with accepting market derived income (‘MDI’), may have a material adverse effect on our business, financial condition, results of operation or reputation. • Changes and developments in the health insurance system in the United States could harm our business. • Our global operations expose us to increasing, and sometimes conflicting, legal and regulatory requirements in environmental, social and governance (‘ESG’) matters, and violation of these regulations could harm our business. • Increasing scrutiny and changing expectations from investors, clients and our colleagues with respect to our ESG practices can impose additional costs on us or expose us to reputational or other risks. • The economic, regulatory and political impact of the United Kingdom’s exit from the European Union, which occurred on January 31, 2020, could adversely affect us.
For example, in the case of pension plan actuarial work, a client’s claims might focus on the client’s alleged reliance on actuarial assumptions that it believes were unreasonable and, based on such reliance, the client made benefit commitments 28 that it may later claim are not affordable or funding decisions that result in plan underfunding if and when actual outcomes vary from actuarial assumptions.
For example, in the case of pension plan actuarial work, a client’s claims might focus on the client’s alleged 28 reliance on actuarial assumptions that it believes were unreasonable and, based on such reliance, the client made benefit commitments that it may later claim are not affordable or funding decisions that result in plan underfunding if and when actual outcomes vary from actuarial assumptions.
While we strive to remain fully compliant with all applicable laws and regulations, we cannot guarantee that we will fully comply at all times with all laws and regulations, especially in countries with developing or evolving legal systems or with evolving or extra-territorial regulations.
While we strive to remain fully compliant with applicable laws and regulations, we cannot guarantee that we will fully comply at all times with all laws and regulations, especially in countries with developing or evolving legal systems or with evolving or extra-territorial regulations.
Accordingly, we are subject to legal, economic and market risks associated with operating in foreign countries, including devaluations and fluctuations in currency exchange rates; imposition of limitations on conversion of foreign currencies into Pounds sterling or U.S. dollars or remittance of dividends and other payments by foreign subsidiaries; hyperinflation in certain foreign countries; adverse or unexpected impacts of fiscal and monetary policies of foreign countries; imposition or increase of investment and other restrictions by foreign governments; and the requirement of complying with a wide variety of foreign laws.
Accordingly, we are subject to legal, economic and market risks associated with operating in foreign countries, including devaluations and fluctuations in currency exchange rates; imposition of limitations on conversion of foreign currencies into Pounds sterling or U.S. dollars or remittance of dividends and other payments by 36 foreign subsidiaries; hyperinflation in certain foreign countries; adverse or unexpected impacts of fiscal and monetary policies of foreign countries; imposition or increase of investment and other restrictions by foreign governments; and the requirement of complying with a wide variety of foreign laws.
While we plan to undertake these types of large, complex projects based on our determination that each is necessary or desirable for the execution of the Company’s business strategy, we cannot guarantee that the collective effect of all of these projects will not adversely impact our business or results of operations or that the benefits will be as we originally expected.
While we plan to undertake these types of large, complex projects based on our determination that each is necessary or desirable for 18 the execution of the Company’s business strategy, we cannot guarantee that the collective effect of all of these projects will not adversely impact our business or results of operations or that the benefits will be as we originally expected.
Further, it is possible that taxing authorities may propose significant changes, which, if ultimately executed, could limit the availability of tax benefits or deductions that we currently claim, override tax treaties upon which we rely, or otherwise affect the taxes that Ireland, the U.S. or other territories impose on our worldwide operations.
Further, it is possible that taxing authorities may propose significant changes, which, if executed, could limit the availability of tax benefits or deductions that we currently claim, override tax treaties upon which we rely, or otherwise affect the taxes that Ireland, the U.S. or other territories impose on our worldwide operations.
We may have difficulty attracting, training, and retaining the talent that we need to successfully manage this change. Further, many of the risks described herein increase during periods of 18 significant organizational change and transformation. The failure to effectively manage such risks could adversely impact our resources or business or financial results.
We may have difficulty attracting, training, and retaining the talent that we need to successfully manage this change. Further, many of the risks described herein increase during periods of significant organizational change and transformation. The failure to effectively manage such risks could adversely impact our resources or business or financial results.
If the outcomes of Brexit and the TCA negatively impact the U.K., then it could have a material adverse impact on us. Brexit has resulted in greater restrictions on business conducted between the U.K. and E.U. countries and has increased regulatory complexities. Uncertainty remains as to how changes to the U.K.’s access to the E.U.
If the outcomes of Brexit and the TCA negatively impact the U.K., then it could have a material adverse impact on us. 34 Brexit has resulted in greater restrictions on business conducted between the U.K. and E.U. countries and has increased regulatory complexities. Uncertainty remains as to how changes to the U.K.’s access to the E.U.
In addition, some U.S. political candidates and representatives elected to office have expressed a desire to amend all or a portion of Healthcare Reform or otherwise establish alternatives to employer-sponsored health insurance or replace it with government-sponsored health insurance, often referred to as ‘Medicare for All’.
In addition, some U.S. political candidates and representatives elected to office have expressed a desire to amend all or a portion of Healthcare Reform or otherwise establish alternatives to employer-sponsored health insurance or replace it with government-sponsored health insurance, often referred 30 to as ‘Medicare for All’.
Our failure to adhere to or successfully develop processes in response to legal or regulatory requirements, including legal or regulatory requirements that may be developed or revised due to 26 economic or geopolitical changes such as Brexit, and changing customer expectations in this area, could result in substantial legal liability and impairment to our reputation or business.
Our failure to adhere to or successfully develop processes in response to legal or regulatory requirements, including legal or regulatory requirements that may be developed or revised due to economic or geopolitical changes such as Brexit, and changing customer expectations in this area, could result in substantial legal liability and impairment to our reputation or business.
While we believe that we have substantially increased our focus on the geographic breadth of regulations to which we are subject, maintain good relationships with our key regulators and our current systems and controls are adequate, we cannot assure that such systems and controls will prevent any violations of any applicable laws and regulations.
While we believe that we have 31 substantially increased our focus on the geographic breadth of regulations to which we are subject, maintain good relationships with our key regulators and our current systems and controls are adequate, we cannot assure that such systems and controls will prevent any violations of any applicable laws and regulations.
We have also been and may continue to be subject to inquiries and investigations by federal, state or other governmental agencies regarding aspects of our clients’ businesses or our own businesses, especially regulated businesses such as our insurance broker, securities broker-dealer and investment advisory services.
We have also been and may continue to be subject to inquiries and investigations by federal, state or other governmental agencies regarding aspects of our clients’ businesses or our own businesses, especially regulated businesses such as our insurance broker, BDA, securities broker-dealer and investment advisory services.
This weakness in the economy and the possibility of a global recession has had, and may continue to have, a negative effect on our business and financial condition, including on the value of our ordinary shares. Moreover, U.S. and global economic conditions have created market uncertainty and volatility.
Weakness in the economy and the possibility of a global recession has had, and may continue to have, a negative effect on our business and financial condition, including on the value of our ordinary shares. Moreover, U.S. and global economic conditions have created market uncertainty and volatility.
As a result, we may have to adjust our plans for future acquisitions, capital expenditures, dividend payments, loan repayments and other expenditures to account for unexpected changes in revenue, and any decreases in premium rates may adversely affect the results of our operations.
As a result, we may have to adjust our plans for future acquisitions, capital expenditures, 37 dividend payments, loan repayments and other expenditures to account for unexpected changes in revenue, and any decreases in premium rates may adversely affect the results of our operations.
A failure by a U.S. shareholder to comply with its reporting obligations may subject the U.S. shareholder to significant monetary penalties and may extend the statute of limitations with respect to the U.S. 37 shareholder’s U.S. federal income tax return for the year for which such reporting was due.
A failure by a U.S. shareholder to comply with its reporting obligations may subject the U.S. shareholder to significant monetary penalties and may extend the statute of limitations with respect to the U.S. shareholder’s U.S. federal income tax return for the year for which such reporting was due.
These risks include: • the general economic and political conditions in the U.S. and foreign countries (including political and social unrest in certain regions); 29 • the imposition of controls or limitations on the conversion of foreign currencies or remittance of dividends and other payments by foreign subsidiaries; • the imposition of sanctions by both the U.S. and foreign governments; • the imposition of withholding and other taxes on remittances and other payments from subsidiaries; • the imposition or increase of investment and other restrictions by foreign governments; • fluctuations in currency exchange rates or our tax rates; • difficulties in controlling operations and monitoring employees in geographically dispersed and culturally diverse locations; and • the practical challenges and costs of complying, or monitoring compliance, with a wide variety of foreign laws (some of which are evolving or are not as well-developed as the laws of the U.S. or U.K. or which may conflict with U.S. or other sources of law), and regulations applicable to insurance brokers and other business operations abroad (in more than 140 countries, including many in emerging markets), including laws, rules and regulations relating to the conduct of business, trade sanction laws administered by the U.S.
These risks include: • the general economic and political conditions in the U.S. and foreign countries (including political and social unrest in certain regions); • the imposition of controls or limitations on the conversion of foreign currencies or remittance of dividends and other payments by foreign subsidiaries; • the imposition of sanctions by both the U.S. and foreign governments; • the imposition of withholding and other taxes on remittances and other payments from subsidiaries; • the imposition or increase of investment and other restrictions by foreign governments; • fluctuations in currency exchange rates or our tax rates; • difficulties in controlling operations and monitoring colleagues in geographically dispersed and culturally diverse locations; and • the practical challenges and costs of complying, or monitoring compliance, with a wide variety of foreign laws (some of which are evolving or are not as well-developed as the laws of the U.S. or U.K. or which may conflict with U.S. or other sources of law), and regulations applicable to insurance brokers and other business operations abroad (in more than 140 countries, including many in emerging markets), including laws, rules and regulations relating to the conduct of business, trade sanction laws administered by the U.S.
We report our operating results and financial condition in U.S. dollars. Our U.S. operations earn revenue and incur expenses primarily in U.S. dollars. In our London market operations however, we earn revenue in a number of different currencies, but expenses are 35 almost entirely incurred in Pounds sterling.
We report our operating results and financial condition in U.S. dollars. Our U.S. operations earn revenue and incur expenses primarily in U.S. dollars. In our London market operations however, we earn revenue in a number of different currencies, but expenses are almost entirely incurred in Pounds sterling.
Increased inflation and interest rates may hinder the economic growth in a number of markets where we do business, and has had, and may continue to have, far reaching effects on the global economy.
Increased inflation and the fluctuation of interest rates may hinder the economic growth in a number of markets where we do business, and has had, and may continue to have, far-reaching effects on the global economy.
Further, the profitability of our risk and broking businesses 36 depends in part on our ability to be compensated for the analytical services and other advice that we provide, including the consulting and analytics services that we provide to insurers.
Further, the profitability of our risk and broking businesses depends in part on our ability to be compensated for the analytical services and other advice that we provide, including the consulting and analytics services that we provide to insurers.
For example, the loss of pre-Brexit passporting rights or regulatory limitations on the 33 ability to conduct business in various E.U. countries by relying on a regulatory permission in the U.K.
For example, the loss of pre-Brexit passporting rights or regulatory limitations on the ability to conduct business in various E.U. countries by relying on a regulatory permission in the U.K.
We face risks when we acquire or divest businesses, and we could have difficulty in acquiring, integrating or managing acquired businesses, or with effecting internal reorganizations, all of which could harm our business, financial condition, results of operations or reputation. • The sale of Willis Re to Gallagher, including transitional arrangements, creates incremental business, operational, regulatory and reputational risks. • Our business performance and growth plans could be negatively affected if we are not able to effectively apply technology, data and analytics to drive value for our clients through technology-based solutions or gain internal efficiencies through the effective application of technology, analytics and related tools.
We face risks when we acquire or divest businesses, and we could have difficulty in acquiring, integrating or managing acquired businesses, or with effecting internal reorganizations, all of which could harm our business, financial condition, results of operations or reputation. • The sale of Willis Re to Gallagher, including transitional arrangements, creates incremental business, operational, regulatory and reputational risks. • Our business performance and growth plans could be negatively affected if we are not able to develop and implement improvements in technology and effectively apply technology, data and analytics to drive value for our clients through technology-based solutions or gain internal efficiencies through the effective application of technology, analytics and related tools.
Even if we do not experience significant monetary costs, there may be adverse publicity associated with these matters that could result in reputational harm to the industries we operate in or to us in particular that may adversely affect our business, client or employee relationships. In addition, defending against these claims can involve potentially significant costs, including legal defense costs.
Even if we do not experience significant monetary costs, there may be adverse publicity associated with these matters that could result in reputational harm to the industries we operate in or to us in particular that may adversely affect our business, client or colleague relationships. In addition, defending against these claims can involve potentially significant costs, including legal defense costs.
As a result, remote and hybrid work arrangements may negatively impact our ability to maintain and promote our culture and increase related risks. 24 Intellectual Property, Technology, Cybersecurity and Data Protection Risks Data and cyber security breaches or improper disclosure of confidential company or personal data could result in material financial loss, regulatory actions, reputational harm, and/or legal liability.
As a result, remote and hybrid work arrangements may negatively impact our ability to maintain and promote our culture and increase related risks. 24 Intellectual Property, Technology, Cybersecurity and Data Protection Risks Data and cybersecurity breaches or improper disclosure of confidential company or personal data could result in material financial loss, regulatory actions, reputational harm, and/or legal liability.
The process of integrating an acquired business may subject us to a number of risks, including, without limitation, an inability to retain the management, key personnel and other employees of the acquired business; an inability to establish uniform standards, controls, systems, procedures and policies or to achieve anticipated savings; and exposure to legal claims or regulatory censure for activities of the acquired business prior to acquisition.
The process of integrating an acquired business may subject us to a number of risks, including, without limitation, an inability to retain the management, key personnel and other colleagues of the acquired business; an inability to establish uniform standards, controls, systems, procedures and policies or to achieve anticipated savings; and exposure to legal claims or regulatory censure for activities of the acquired business prior to acquisition.
These third-party applications store or may afford access to confidential and proprietary data of the Company, our employees and our clients. We have processes designed to require third-party vendors that provide IT outsourcing, offsite storage and other services to agree to maintain certain standards with respect to the storage, protection and transfer of confidential, personal and proprietary information.
These third-party applications store or may afford access to confidential and proprietary data of the Company, our colleagues and our clients. We have processes designed to require third-party vendors that provide IT outsourcing, offsite storage and other services to agree to maintain certain standards with respect to the storage, protection and transfer of confidential, personal and proprietary information.
Our growth strategy depends, in part, on our ability to make acquisitions. We face risks when we acquire or divest businesses, and we could have difficulty in acquiring, integrating or managing acquired businesses, or with effecting internal reorganizations, all of which could harm our business, financial condition, results of operations or reputation.
Our growth strategy depends, in part, on our ability to make acquisitions or grow our business organically. We face risks when we acquire or divest businesses, and we could have difficulty in acquiring, integrating or managing acquired businesses, or with effecting internal reorganizations, all of which could harm our business, financial condition, results of operations or reputation.
Some of these jurisdictions, such as China, may be significant businesses for us. As a result, we cannot predict the impacts of any changes in the U.S., E.U., U.K. or other sanctions, and whether such changes could have a material adverse impact on our operations or financial results.
Some of these jurisdictions, such as China, may include significant businesses for us. As a result, we cannot predict the impacts of any changes in the U.S., E.U., U.K. or other sanctions, and whether such changes could have a material adverse impact on our operations or financial results.
The market for employees in our industry is extremely competitive, and competitors for talent increasingly attempt to hire, and to varying degrees have been successful in hiring, our employees or employment candidates. In particular, our colleagues’ business relationships with our clients are a critical element of obtaining and maintaining client engagements.
The market for talent in our industry is extremely competitive, and competitors for talent increasingly attempt to hire, and to varying degrees have been successful in hiring, our colleagues or employment candidates. In particular, our colleagues’ business relationships with our clients are a critical element of obtaining and maintaining client engagements.
Further, the increased availability of remote working arrangements has also expanded the pool of companies that can compete for our employees and employment candidates. Our operational transformation efforts require us to attract, onboard, and retain individuals relevant for those efforts and we may not be able to do that successfully.
Further, the increased availability of remote working arrangements has also expanded the pool of companies that can compete for our colleagues and employment candidates. Our operational transformation efforts require us to attract, onboard, and retain individuals relevant for those efforts and we may not be able to do that successfully.
Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government laws or regulations, or if government laws or regulations decrease the need for our services or increase our costs. A material portion of our revenue is affected by statutory or regulatory changes.
Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government laws or regulations, or if government laws or regulations decrease the need for our services, increase our costs or limit our compensation. A material portion of our revenue is affected by statutory or regulatory changes.
Leadership transitions may also impact our relationships with customers and other market participants, and create uncertainty among investors, employees, and others concerning our future direction and performance. Any significant disruption, uncertainty or change in business strategy could adversely affect our business, operating results and financial condition.
Leadership transitions may also impact our relationships with customers and other market participants, and create uncertainty among investors, colleagues, and others concerning our future direction and performance. Any significant disruption, uncertainty or change in business strategy could adversely affect our business, operating results and financial condition.
Our compliance systems and controls cannot guarantee that we comply with all applicable federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in applicable laws and regulations in the jurisdictions in which we operate could have an adverse effect on our business.
Our compliance systems and controls cannot guarantee that we comply with all applicable federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in applicable laws and regulations in the jurisdictions in which we operate could impact our operations or have an adverse effect on our business.
Conflicts of interest exist or could exist any time the Company or any of its employees have or may have an interest in a transaction or engagement that is inconsistent with our clients’ interests. This could occur, for example, when the Company is providing services to multiple parties in connection with a transaction.
Conflicts of interest exist or could exist any time the Company or any of its colleagues have or may have an interest in a transaction or engagement that is inconsistent with our clients’ interests. This could occur, for example, when the Company is providing services to multiple parties in connection with a transaction.
With respect to any such acquisition transactions, we face the risk related to the potential impacts of the transaction and integration on relationships, including with employees, correspondents, suppliers, clients and competitors, as well as the risk related to contingent liabilities (including litigation) potentially creating material liabilities for the Company.
With respect to any such acquisition transactions, we face the risk related to the potential impacts of the transaction and integration on relationships, including with colleagues, correspondents, suppliers, clients and competitors, as well as the risk related to contingent liabilities (including litigation) potentially creating material liabilities for the Company.
In 2022, approximately 18% of our revenue from continuing operations was generated in the U.K., although only about 11% of revenue from continuing operations was denominated in Pounds sterling as much of the insurance business is transacted in U.S. dollars or other currencies. Approximately 17% of our expenses from continuing operations were denominated in Pounds sterling.
In 2023, approximately 18% of our revenue from continuing operations was generated in the U.K., although only about 11% of revenue from continuing operations was denominated in Pounds sterling as much of the insurance business is transacted in U.S. dollars or other currencies. Approximately 17% of our expenses from continuing operations were denominated in Pounds sterling.
A downgrade in our corporate credit rating or the credit ratings of our debt would increase our borrowing costs, including those under our credit facilities, and reduce our financial flexibility. Real or anticipated changes in our credit ratings will generally affect any trading market for, or trading value of, our securities.
A downgrade in our corporate credit rating or the credit ratings of our debt would increase our borrowing costs, including those under our credit facility, and reduce our financial flexibility. Real or anticipated changes in our credit ratings will generally affect any trading market for, or trading value of, our securities.
Risks Related to Being an Irish-Incorporated Company • The laws of Ireland differ from the laws in effect in the United States and may afford less protection to holders of our securities. • As an Irish public limited company, certain decisions related to our capital structure will require the approval of shareholders, which may limit our flexibility to manage our capital structure. 17 RISK FACTORS Our financial performance, including our business results, financial condition, result of operations, cash flows and price of our ordinary shares, is subject to various risks and uncertainties, including as described in this Item 1A of Part I of our Annual Report.
Risks Related to Being an Irish-Incorporated Company • The laws of Ireland differ from the laws in effect in the United States and may afford less protection to holders of our securities. • As an Irish public limited company, certain decisions related to our capital structure will require the approval of shareholders, which may limit our flexibility to manage our capital structure. 17 RISK FACTORS Our financial performance, including our business results, financial condition, result of operations, cash flows and price of our ordinary shares, is subject to various risks and uncertainties, including as described in this Item 1A of Part I of our Annual Report on Form 10-K.
Should we or a third party on whom we rely experience a disaster or other business continuity problem, such as an earthquake, hurricane, terrorist attack, pandemic, including prolonged effects of the COVID-19 pandemic, security breach, ransomware or destructive malware attack, power loss, telecommunications failure or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel, our office facilities, our outsourcing providers or other vendors, access to data, and the proper functioning of our computer, telecommunication and other related systems and operations.
Should we or a third party on whom we rely experience a disaster or other business continuity problem, such as an earthquake, hurricane, terrorist attack, act of war or other geopolitical conflict, pandemic, including prolonged effects of the COVID-19 pandemic, security breach, ransomware or destructive malware attack, power loss, telecommunications failure or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel, our office facilities, our outsourcing providers or other vendors, access to data, and the proper functioning of our computer, telecommunication and other related systems and operations.
Our failure to meet expectations or metrics, whether expectations or metrics set by us or by investors or other stakeholders, or to any other failure to make progress in this area on a timely basis, or at all, may negatively impact our reputation and our business.
Our failure to meet expectations or metrics, whether expectations or metrics set by us or by investors or other stakeholders, or to any other failure to make progress in this area on a timely basis, or at all, could negatively impact our reputation and our business.
The agreement introduced rules that would result in the reallocation of certain taxing rights from multinational companies from their home countries to the markets where they have business activities and earn profits, regardless of physical presence (‘Pillar One’) and introduced a global corporate minimum tax of 15% for certain large multinational companies starting in 2023 (‘Pillar Two’).
The agreement introduced rules that would result in the reallocation of certain taxing rights over multinational companies from their home countries to the markets where they have business activities and earn profits, regardless of physical presence (‘Pillar One’) and introduced a global corporate minimum tax of 15% for certain large multinational companies starting in 2024 (‘Pillar Two’).
Further, changes in customer demand for these Medicare policies, particularly differences in customer persistency and renewals from what we have currently assumed, could cause us to write down receivable assets we have booked.
Further, changes in customer demand for these Medicare policies, particularly differences in customer persistency and renewals from what we have currently assumed, or changes in regulations could cause us to write down receivable assets we have booked.
In addition, under the indentures for our 4.625% senior notes due 2023, our 3.600% senior notes due 2024, our 4.400% senior notes due 2026, our 4.650% senior notes due 2027, our 4.500% senior notes due 2028, our 2.950% senior notes due 2029, our 6.125% senior notes due 2043, our 5.050% senior notes due 2048, and our 3.875% senior notes due 2049, if we experience a ratings decline together with a change of control event, we would be required to offer to purchase these notes from holders unless we had previously redeemed those notes.
In addition, under the indentures for our 3.600% senior notes due 2024, our 4.400% senior notes due 2026, our 4.650% senior notes due 2027, our 4.500% senior notes due 2028, our 2.950% senior notes due 2029, our 5.350% senior notes due 2033, our 6.125% senior notes due 2043, our 5.050% senior notes due 2048, and our 3.875% senior notes due 2049, if we experience a ratings decline together with a change of control event, we would be required to offer to purchase these notes from holders unless we had previously redeemed those notes.
Finally, on October 8, 2021, the OECD announced an international agreement with more than 130 countries to implement a two-pillar solution to address tax challenges arising from digitalization of the economy.
Finally, on October 8, 2021, the OECD announced an international agreement with more than 140 countries to implement a two-pillar solution to address tax challenges arising from digitalization of the economy.
For example, we completed the divestiture of the Willis Re business to Gallagher in 2022 which may give rise to such risks including those risks associated with managing transition arrangements. In addition, we cannot be certain that our acquisitions will be accretive to earnings or that our acquisitions or divestitures will otherwise meet our operational or strategic expectations.
For example, we completed the divestiture of the Willis Re business to Gallagher in 2022 which gives rise to such risks including those risks associated with managing transition arrangements. In addition, we cannot be certain that our acquisitions will be accretive to earnings or that our acquisitions or divestitures will otherwise meet our operational or strategic expectations.
A leadership transition may also increase the likelihood of turnover among our employees and result in changes in our business strategy, which may create uncertainty and negatively impact our ability to execute our business strategy quickly and effectively.
A leadership transition may also increase the likelihood of turnover among our colleagues and result in changes in our business strategy, which may create uncertainty and negatively impact our ability to execute our business strategy quickly and effectively.
We are significantly increasing our use of such cloud services and expect this to continue over time. These third-party applications store confidential and proprietary data of the Company, our clients and our employees.
We are significantly increasing our use of such cloud services and expect this to continue over time. These third-party applications store confidential and proprietary data of the Company, our clients and our colleagues.
Most pension plans have minimum funding requirements that may require material amounts of periodic additional funding and accounting requirements that may result in increased pension expense. Depending on the above factors, among others, we could be required to recognize further pension expense in the future. Increased pension expense could adversely affect our earnings or cause earnings volatility.
Most pension plans and schemes have minimum funding requirements that may require material amounts of periodic additional funding and accounting requirements that may result in increased pension expense. Depending on the foregoing factors, among others, we could be required to recognize further pension expense in the future. Increased pension expense could adversely affect our earnings or cause earnings volatility.
We are the target of computer viruses, hackers, distributed denial of service attacks, malware infections, ransomware attacks, phishing and spear-phishing campaigns, and/or other external hazards, as well as improper or inadvertent workforce behavior which, could expose confidential company and personal data systems and information to security breaches.
We are regularly subject to cyberattacks and are the target of computer viruses, hackers, distributed denial of service attacks, malware infections, ransomware attacks, phishing and spear-phishing campaigns, and/or other external hazards, as well as improper or inadvertent workforce behavior which, could expose confidential company and personal data systems and information to security breaches.
Congress may seek to find spending cuts, and such cuts may include Medicare. If cuts are made to Medicare, there may be substantial changes in the types of health insurance plans we are able to sell, especially through our Individual Marketplace business, which focuses on direct-to-consumer Medicare policy sales.
In addition, the U.S. Congress may seek to find spending cuts, and such cuts may include Medicare. If cuts are made to Medicare, there may be substantial changes in the types of health insurance plans we are able to sell, especially through our Individual Marketplace business, which focuses on direct-to-consumer Medicare policy sales.
Unauthorized disclosure of sensitive or confidential client, supplier or employee data, whether through systems failure, accident, employee negligence, fraud or misappropriation, could damage our reputation and cause us to lose clients.
Unauthorized disclosure of sensitive or confidential client, supplier or colleague data, whether through systems failure, accident, colleague negligence, fraud or misappropriation, could damage our reputation and cause us to lose clients.
The operating restrictions and financial covenants in our credit facilities do, and any future financing agreements may, limit our ability to finance future operations or capital needs or to engage in other business activities.
The operating restrictions and financial covenants in our credit facility do, and any future financing agreements may, limit our ability to finance future operations or capital needs or to engage in other business activities.
Damage to our reputation could therefore cause significant harm to our business and prospects. Harm to our reputation can arise from numerous 22 sources, including among others, employee misconduct, litigation or regulatory action, failure to deliver minimum standards of service and quality, compliance failures, allegations of conflicts of interest and unethical behavior.
Damage to our reputation could therefore cause significant harm to our business and prospects. Harm to our reputation can arise from numerous sources, including among others, colleague misconduct, litigation or regulatory action, failure to deliver minimum standards of service and quality, compliance failures, allegations of conflicts of interest and unethical behavior.
Also, organizations that provide ratings information to certain investors on ESG matters may assign unfavorable ratings to the Company, which may lead to negative investor sentiment and the diversion of investment capital to other companies or industries, which could have a negative impact on our stock price and our costs of capital.
Also, organizations that provide ratings information to certain investors on ESG matters may assign unfavorable ratings to the Company, which may lead to negative investor sentiment and the diversion of investment capital to other companies or industries, which could have a negative impact on the price of our ordinary shares and our costs of capital.
Therefore, a variation in the number of client assignments and collection of accounts receivable, or in the timing of the initiation or the completion of client assignments, or our inability to forecast demand, can cause significant variations in quarterly operating results and could result in losses and volatility in our stock price.
Therefore, a variation in the number of client assignments and collection of accounts receivable, or in the timing of the initiation or the completion of client assignments, or our inability to forecast demand, can cause significant variations in quarterly operating results and could result in losses and volatility in the price of our ordinary shares.
Strategic and Operational Transformation Risks • Our success largely depends on our ability to achieve our global business strategy as it evolves, and our results of operations and financial condition could suffer if the Company were unable to successfully establish and execute on its strategy and generate anticipated revenue growth and cost savings and efficiencies. • We may not be able to fully realize the anticipated benefits of our growth strategy. • Our ability to successfully manage ongoing organizational changes could impact our business results, where the level of costs and/or disruption may be significant and change over time, and the benefits may be less than we originally expect. • Our growth strategy depends, in part, on our ability to make acquisitions.
Strategic and Operational Transformation Risks • Our success largely depends on our ability to achieve our global business strategy as it evolves, and our results of operations and financial condition could suffer if the Company were unable to successfully establish and execute on its strategy and generate anticipated revenue growth and cost savings and efficiencies. • We may not be able to fully realize the anticipated benefits of our growth strategy or our expected product, service, and transaction pipelines. • Our ability to successfully manage ongoing organizational changes could impact our business results, where the level of costs and/or disruption may be significant and change over time, and the benefits may be less than we originally expect. • Our growth strategy depends, in part, on our ability to make acquisitions or grow our business organically.
These laws and regulations include insurance and financial industry regulations, antitrust and competition laws, economic and trade sanctions laws relating to countries in which certain subsidiaries do business or may do business (‘Sanctioned Jurisdictions’) such as Crimea, Cuba, Iran, Russia, Sudan, Syria and Venezuela, anti-corruption laws such as the FCPA, the U.K.
These laws and regulations include insurance and financial industry regulations, antitrust and competition laws, economic and trade sanctions laws relating to countries in which certain subsidiaries do business or may do business (‘Sanctioned Jurisdictions’) such as Crimea (and any occupied territories of Ukraine), Cuba, Iran, Russia, Sudan, Syria and Venezuela, anti-corruption laws such as the FCPA, the U.K.
A simplification of regulations or tax policy could also reduce the need for our services. Our business, financial condition, results of operations, and long-term goals may continue to be adversely affected, possibly materially, by negative impacts on the global economy and capital markets resulting from the war between Russia and Ukraine or any other geopolitical tensions.
A simplification of regulations or tax policy could also reduce the need for our services. 22 Our business, financial condition, results of operations, and long-term goals may continue to be adversely affected, possibly materially, by negative impacts on the global economy and capital markets resulting from wars or any other geopolitical tensions.
A downgrade to our corporate credit rating and the credit ratings of our outstanding debt may adversely affect our borrowing costs and financial flexibility and, under certain circumstances, may require us to offer to buy back some of our outstanding debt.
A downgrade to our corporate credit rating, the credit ratings of our outstanding debt or other market speculation may adversely affect our borrowing costs and financial flexibility and, under certain circumstances, may require us to offer to buy back some of our outstanding debt.
In order to respond to increased competition and pricing pressure, we may have to lower our prices, which would also have an adverse effect on our revenue and profit margin. 20 In addition, existing and new competitors (whether traditional competitors or non-traditional competitors, such as technology companies) could develop competing technologies or product or service offerings that disrupt our industries.
In order to respond to increased competition and pricing pressure, we may have to lower our prices, which would also have an adverse effect on our revenue and profit margin. In addition, existing and new competitors (whether traditional competitors or non-traditional competitors, such as technology companies) may continue to develop competing technologies or product or service offerings.
Bribery Act 2010, and similar local laws prohibiting corrupt payments to governmental officials and the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act in the U.S., as well as laws and regulations related to data privacy, cyber security and telemarketing.
Bribery Act 2010, and similar local laws prohibiting corrupt payments to governmental officials and the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act in the U.S., as well as laws and regulations related to data privacy, artificial intelligence, cybersecurity and telemarketing.
There is increased focus, including from governmental organizations, investors, colleagues and clients, on ESG issues such as environmental stewardship, climate change, diversity and inclusion, racial justice and workplace conduct.
There is increased and sometimes conflicting focus, including from governments, non-governmental organizations, investors, colleagues and clients, on ESG issues such as environmental stewardship, climate change, diversity and inclusion, racial justice and workplace conduct.
Among other things, we could experience: lower growth in the region due to indecision by businesses holding off on generating new projects or due to adverse market conditions; and reduced reported revenue and earnings because foreign currencies may translate into fewer U.S. dollars due to the fact that we translate revenue denominated in non-U.S. currencies, such as Pounds sterling, into U.S. dollars for our financial statements.
Among other things, the ongoing and future effects of Brexit could result in: lower growth in the region due to indecision by businesses holding off on generating new projects or due to adverse market conditions and / or reduced reported revenue and earnings because foreign currencies may translate into fewer U.S. dollars due to the fact that we convert revenue denominated in non-U.S. currencies, such as Pounds sterling, into U.S. dollars for our financial statements.
A failure to comply with the restrictions under our credit facilities and outstanding notes could result in a default or a cross-default under the financing obligations or could require us to obtain waivers from our lenders for failure to comply with these restrictions.
A failure to comply with the restrictions under our credit facility and outstanding notes could result in a default or a cross-default under the financing obligations or could require us to obtain waivers from our lenders or noteholders, as applicable, for failure to comply with these restrictions.
The failure to continually develop and execute optimally on our global business strategy could have a material adverse effect on our business, financial condition and results of operations. We may not be able to fully realize the anticipated benefits of our growth strategy.
The failure to continually develop and execute optimally on our global business strategy could have a material adverse effect on our business, financial condition and results of operations. We may not be able to fully realize the anticipated benefits of our growth strategy or our expected product, service, and transaction pipelines.
In particular, given the challenges of integrating operations, many of which are decentralized, we cannot assure that acquired or decentralized entities’ business systems and controls have prevented or will prevent any and all violations of applicable laws or regulations.
In particular, given the challenges of integrating operations, many of which are decentralized and have manual processes, we cannot assure that business systems and controls, including those of acquired or decentralized entities, have prevented or will prevent any and all violations of applicable laws or regulations.
Our initiatives aiming to implement our recast targets and future financial objectives pose potential operational risks and may result in distraction of management and employees. We cannot be certain whether we will be able to realize benefits from current revenue-generating or cost-saving initiatives and ultimately realize our objectives.
Our initiatives aiming to implement our targets and future financial objectives pose potential operational risks and may result in distraction of management and colleagues. We cannot be certain whether we will be able to realize benefits from current revenue-generating or cost-saving initiatives, including our Transformation program, and ultimately realize our strategic objectives.
In particular, inflation in the United States, Europe and other geographies has risen to levels not experienced in recent decades and we are seeing its impact on various aspects of our business, which in some cases have, or could in the future, negatively affect our business and financial condition.
In particular, recently inflation in the United States, Europe and other geographies had risen to levels not experienced in recent decades and we have and may see its impact on various aspects of our business, which in some cases have, or could in the future, negatively affect our business and financial condition.
Voluntary attrition in a number of business lines remains elevated, and it may take longer than expected to hire new colleagues to replace colleagues who have left and/or these new colleagues may be subject to restrictive covenants that impact the amount of business they can generate while those covenants are in effect.
It may take longer than expected to hire new colleagues to replace colleagues who have left and/or these new colleagues may be subject to restrictive covenants that impact the amount of business they can generate while those covenants are in effect.
This risk is likely to be higher in circumstances, such as claims related to COVID-19 (some of which have already emerged), where there are significant disputes between clients and insurance carriers over coverage and clients allege claims against us.
This risk is likely to be higher in circumstances, such as claims related to COVID-19, where there are significant disputes between clients and insurance carriers over coverage and clients allege claims against us.
Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances.
Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances.
If insurance carriers decide to limit our ability to sell their plans or determine not to sell individual health insurance plans altogether, our business, results of operations and financial condition would be materially harmed.
If such legal or regulatory changes do occur, or if insurance carriers decide to limit our ability to sell their plans or determine not to sell individual health insurance plans altogether, our business, results of operations and financial condition would be materially harmed.
One example is in the area of base erosion and profit shifting, where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
One example is around base erosion and profit shifting, where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
Any of these effects could materially harm our business and results of operations. For example, various aspects of Healthcare Reform could cause insurance carriers to limit the types of health insurance plans we are able to sell and the geographies in which we are able 32 to sell them. In addition, the U.S.
Any of these effects could materially harm our business and results of operations. For example, various aspects of Healthcare Reform could cause insurance carriers to limit the types of health insurance plans we are able to sell and the geographies in which we are able to sell them and to limit the compensation we may receive for our services.
We are subject to numerous laws and regulations in the U.S. and foreign jurisdictions, only certain of which are named here, designed to protect the personally identifiable information of client and company constituents and suppliers, notably the European Union’s General Data Protection Regulation (‘GDPR’), which became effective on May 25, 2018, the California Consumer Privacy Act and its implementing regulations (‘CCPA’), which became effective on January 1, 2020, and the Virginia Consumer Data Protection Act (‘VCDPA’), which became effective on March 2, 2021.
We are subject to numerous laws and regulations in the U.S. and foreign jurisdictions, only certain of which are named here, designed to protect the personally identifiable information of client and company constituents and suppliers, notably the European Union’s General Data Protection Regulation (‘GDPR’), which became effective on May 25, 2018, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 and its implementing regulations (‘CCPA’), which became effective in its current form on January 1, 2023, the Virginia Consumer Data Protection Act (‘VCDPA’), which became effective on January 1, 2023 and Connecticut Data Privacy Act (‘CDPA’), which became effective on July 1, 2023.
WTW had total consolidated debt outstanding of approximately $4.7 billion as of December 31, 2022, and our interest expense was $208 million for the year ended December 31, 2022. 34 Although management believes that our cash flows will be sufficient to service this debt, there may be circumstances in which required payments of principal and/or interest on this level of indebtedness may: • require us to dedicate a significant portion of our cash flow to payments on our debt, thereby reducing the availability of cash flow to fund capital expenditures, to pursue other acquisitions or investments, to pay dividends and for general corporate purposes; • limit our flexibility in reacting to changes or challenges relating to our business and industry; and • put us at a competitive disadvantage against competitors who have less indebtedness or are in a more favorable position to access additional capital resources.
Although management believes that our cash flows will be sufficient to service this debt, there may be circumstances in which required payments of principal and/or interest on this level of indebtedness may: • require us to dedicate a significant portion of our cash flow to payments on our debt, thereby reducing the availability of cash flow to fund capital expenditures, to pursue other acquisitions or investments, to pay dividends and for general corporate purposes; • limit our flexibility in reacting to changes or challenges relating to our business and industry; and • put us at a competitive disadvantage against competitors who have less indebtedness or are in a more favorable position to access additional capital resources.
Movements in the interest rate environment, investment returns, inflation or changes in other assumptions that are used to estimate our benefit obligations and other factors could have a material effect on the level of liabilities in these plans at any given time.
Movements in the interest rate environment, investment returns, inflation, changes in other assumptions that are used to estimate our benefit obligations, changes to existing legislation or interpretation thereof, the outcome of current or future litigation, and other factors could have a material effect on the level of liabilities in these pension plans and schemes at any given time.
Also, in the past, including following the announcement and the termination of the proposed Aon plc combination, we have lost colleagues who manage substantial client relationships or possess substantial experience or expertise; if we lose additional colleagues such as those, or if we lose a large number of other colleagues, it could result in such colleagues competing against us.
Also, in the past, we have lost colleagues who manage substantial client relationships or possess substantial experience or expertise; if we lose additional colleagues such as those, or if we lose a large number of other colleagues, it could result in such colleagues competing against us.
As we work to align with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, the Sustainability Accounting Standards Board, changes to applicable regulatory requirements, and our own ESG assessments and priorities, we may disclose additional metrics against which we may measure ourselves or be measured and tracked by others over time.
As we work to align our reporting with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, the Sustainability Accounting Standards Board and other reporting frameworks, and comply with the adoption of and changes to applicable legal and regulatory requirements, including reporting obligations pursuant to the Corporate Sustainability Reporting Directive as well as focus on our own ESG assessments and priorities, we may disclose additional metrics against which we may measure ourselves or be measured and tracked by others over time.
Any finding that the data we rely on to run our business is inaccurate or unreliable, that we fail to maintain effective and efficient systems (including through a telecommunications failure, failure to replace or update redundant or obsolete computer hardware, applications or software systems, or the loss of skilled people with the knowledge needed to operate older systems), or that we 27 experience cost overruns, delays, or other disruptions, could result in material financial loss, regulatory action, reputational harm or legal liability.
These transactions may make us more susceptible to cyberattacks and could result in the theft of Company intellectual property, the compromise of Company, colleague, and client data or operational disruption. 27 Any finding that the data we rely on to run our business is inaccurate or unreliable, that we fail to maintain effective and efficient systems (including through a telecommunications failure, failure to replace or update redundant or obsolete computer hardware, applications or software systems, or the loss of skilled people with the knowledge needed to operate older systems), or that we experience cost overruns, delays, or other disruptions, could result in material financial loss, regulatory action, reputational harm or legal liability.
For example, the agreements relating to the debt arrangements and credit facilities contain numerous operating and financial covenants, including requirements to maintain minimum ratios of consolidated EBITDA to consolidated cash interest expense and maximum levels of consolidated funded indebtedness in relation to consolidated EBITDA, in each case subject to certain adjustments.
The terms of our current financings also include certain limitations. For example, the agreements relating to the debt arrangements and credit facility contain numerous operating and financial covenants, including requirements to maintain minimum ratios of consolidated EBITDA to consolidated cash interest expense and maximum levels of consolidated funded indebtedness to consolidated EBITDA, in each case subject to certain adjustments.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere are no governmental laws, decrees or regulations in Ireland that restrict the remittance of dividends or other payments to non-resident holders of the Company’s shares. In circumstances where one of Ireland’s many exemptions from dividend withholding tax (‘DWT’) does not apply, dividends paid by the Company will be subject to Irish DWT (currently 20 percent).
Biggest changeIn February 2024, the board of directors is expected to approve a quarterly cash dividend to shareholders of record as of March 31, 2024. There are no governmental laws, decrees or regulations in Ireland that restrict the remittance of dividends or other payments to non-resident holders of the Company’s shares.
Since April 20, 2016, when the WTW board reconfirmed, reapproved and reauthorized the remaining $529 million portion of the Legacy Willis program to repurchase the Company’s ordinary shares on the open market or by way of redemption or otherwise, the following additional authorizations have occurred: • November 10, 2016 — the Company announced that the board of directors approved an additional authorization of $1.0 billion. • February 23, 2018 — the Company announced that the board of directors approved an additional authorization of $400 million. • February 26, 2020 — the Company announced that the board of directors approved an additional authorization of $251 million. 41 • July 26, 2021 — the Company announced that the board of directors approved an additional authorization of $1.0 billion. • September 16, 2021 — the Company announced that the board of directors approved an additional authorization of $4.0 billion. • May 25, 2022 — the Company announced that the board of directors approved an additional authorization of $1.0 billion.
Since April 20, 2016, when the WTW board reconfirmed, reapproved and reauthorized the remaining $529 million portion of the Legacy Willis program to repurchase the Company’s ordinary shares on the open market or by way of redemption or otherwise, the following additional authorizations have occurred: • November 10, 2016 — the Company announced that the board of directors approved an additional authorization of $1.0 billion. • February 23, 2018 — the Company announced that the board of directors approved an additional authorization of $400 million. • February 26, 2020 — the Company announced that the board of directors approved an additional authorization of $251 million. 43 • July 26, 2021 — the Company announced that the board of directors approved an additional authorization of $1.0 billion. • September 16, 2021 — the Company announced that the board of directors approved an additional authorization of $4.0 billion. • May 25, 2022 — the Company announced that the board of directors approved an additional authorization of $1.0 billion. • September 20, 2023 — the Company announced that the board of directors approved an additional authorization of $1.0 billion.
Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information, as of December 31, 2022, about the securities authorized for issuance under the Company’s equity compensation plans and is categorized according to whether or not the equity plan was previously approved by shareholders.
Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information, as of December 31, 2023, about the securities authorized for issuance under the Company’s equity compensation plans and is categorized according to whether or not the equity plan was previously approved by shareholders.
The graph charts the performance of $100 invested on the initial date indicated, December 31, 2017, assuming full dividend reinvestment. Unregistered Sales of Equity Securities and Use of Proceeds During the year ended December 31, 2022, no shares were issued by the Company without registration under the Securities Act of 1933, as amended.
The graph charts the performance of $100 invested on the initial date indicated, December 31, 2018, assuming full dividend reinvestment. Unregistered Sales of Equity Securities and Use of Proceeds During the year ended December 31, 2023, no shares were issued by the Company without registration under the Securities Act of 1933, as amended.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Share Data Our ordinary shares trade on the NASDAQ Global Select Market under the symbol ‘WTW’ as of January 10, 2022. Our ordinary shares previously traded under the symbol ‘WLTW’ starting on January 5, 2016.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Share Data Our ordinary shares trade on the NASDAQ Global Select Market under the symbol ‘WTW’ as of January 10, 2022.
U.S. shareholders should consult their own tax advisors regarding the application of these rules given their particular circumstances. 40 Performance Graph Comparison of Five-Year Cumulative Total Shareholder Return The graph below depicts cumulative total shareholder returns for WTW for the period from December 31, 2017 through December 31, 2022.
U.S. shareholders should consult their own tax advisors regarding the application of these rules given their particular circumstances. 42 Performance Graph Comparison of Five-Year Cumulative Total Shareholder Return The graph below depicts cumulative total shareholder returns for WTW for the period from December 31, 2018 through December 31, 2023.
An estimate of the maximum number of shares under the existing authorities was determined using the closing price of our ordinary shares on December 31, 2022 of $244.58.
An estimate of the maximum number of shares under the existing authorities was determined using the closing price of our ordinary shares on December 31, 2023 of $241.20.
As of February 16, 2023, there were 1,079 shareholders of record of our shares. Dividends We normally pay dividends on a quarterly basis to shareholders of record on March 31, June 30, September 30 and December 31.
As of February 16, 2024, there were 1,020 shareholders of record of our ordinary shares, not including those ordinary shares held in street or nominee name. Dividends We normally pay dividends on a quarterly basis to shareholders of record on March 31, June 30, September 30 and December 31.
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs October 1, 2022 through October 31, 2022 617,691 $ 207.67 617,691 6,808,160 November 1, 2022 through November 30, 2022 671,294 $ 229.41 671,294 6,136,866 December 1, 2022 through December 31, 2022 647,247 $ 244.08 647,247 5,489,619 1,936,232 $ 227.38 1,936,232 At December 31, 2022, the maximum number of shares that may be purchased under the existing stock repurchase program is 5,489,619, with approximately $1.3 billion remaining on the current open-ended repurchase authority granted by the board.
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs October 1, 2023 through October 31, 2023 119,221 $ 209.69 119,221 6,278,743 November 1, 2023 through November 30, 2023 359,608 $ 239.52 359,608 5,919,135 December 1, 2023 through December 31, 2023 353,180 $ 240.29 353,180 5,565,955 832,009 $ 235.57 832,009 At December 31, 2023, the maximum number of shares that may be purchased under the existing stock repurchase program is 5,565,955, with approximately $1.3 billion remaining on the current open-ended repurchase authority granted by the board.
Residents of the United States should be exempt from Irish DWT provided relevant documentation supporting the exemption has been put in place.
In circumstances where one of Ireland’s many exemptions from dividend withholding tax (‘DWT’) does not apply, dividends paid by the Company will be subject to Irish DWT (currently 20 percent). Residents of the United States should be exempt from Irish DWT provided relevant documentation supporting the exemption has been put in place.
(iii) Represents shares available for issuance pursuant to awards that may be granted under the 2012 Plan (3,711,668 shares) and the 2010 North American Employee Stock Purchase Plan (1,057,601 shares). (iv) Includes incentive stock options outstanding under the Extend Health, Inc. 2007 Equity Incentive Plan and the Liazon Corporation 2011 Equity Incentive Plan.
The Company intends to only grant future awards under the 2012 Plan. (ii) Represents shares available for issuance pursuant to awards that may be granted under the 2012 Plan (3,867,028 shares) and the Willis Towers Watson Public Limited Company Amended and Restated 2010 North American Employee Stock Purchase Plan (1,057,601 shares). 44
Plan Category Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (i) Number of Shares Remaining Available for Future Issuance (iii) Equity Compensation Plans Approved by Security Holders (ii) 994,516 $116.27 4,769,269 Equity Compensation Plans Not Approved by Security Holders (iv) 207 — — Total 994,723 $116.27 4,769,269 (i) The weighted-average exercise price set forth in this column is calculated excluding restricted stock units (‘RSUs’) or other awards for which recipients are not required to pay an exercise price to receive the shares subject to the awards.
Plan Category Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Shares Remaining Available for Future Issuance (ii) Equity Compensation Plans Approved by Security Holders (i) 1,563,028 — 4,924,629 Equity Compensation Plans Not Approved by Security Holders — — — Total 1,563,028 — 4,924,629 (i) Includes options and RSUs outstanding under the Towers Watson & Co. 2009 Long-Term Incentive Plan and the 2012 Equity Incentive Plan (‘2012 Plan’).
Removed
In February 2023, the board of directors approved a quarterly cash dividend of $0.84 per share ($3.36 per share annualized rate), which will be paid on or around April 17, 2023 to shareholders of record as of March 31, 2023.
Removed
The $116.27 is related to time-based options. (ii) Includes options and RSUs outstanding under the Towers Watson & Co. 2009 Long-Term Incentive Plan and the 2012 Equity Incentive Plan (‘2012 Plan’). The Company intends to only grant future awards under the 2012 Plan.
Removed
The Company does not plan to grant future awards under these plans. 42

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

124 edited+33 added−44 removed88 unchanged
Biggest changeThe prior-year effective tax rate includes a $250 million estimated tax expense related to the income receipt associated with the termination of our then-proposed combination with Aon, as well as a $40 million tax expense related to the remeasurement of deferred tax assets and liabilities associated with an increase in the U.K. tax rate from 19% to 25%. 50 (Loss)/Income from Discontinued Operations, Net of Tax The following table presents selected financial information as it relates to income from discontinued operations, net of tax: Years ended December 31, 2022 2021 Revenue from discontinued operations $ 48 $ 721 Costs of providing services Salaries and benefits 14 350 Other operating expenses 10 59 Amortization — 2 Transaction and transformation, net — 33 Total costs of providing services 24 444 Other income, net 5 2 Income from discontinued operations before income taxes 29 279 (Loss)/gain on disposal of Willis Re (65 ) 2,300 Benefit from/(provision for) income tax expense 1 (500 ) Net income (payable to)/receivable from Gallagher on Deferred Closing (5 ) 1 (Loss)/income from discontinued operations, net of tax $ (40 ) $ 2,080 (Loss)/income from discontinued operations, net of tax for the years ended December 31, 2022 and 2021 was a loss of $40 million and income of $2.1 billion, respectively.
Biggest changeLoss from Discontinued Operations, Net of Tax The following table presents selected financial information as it relates to loss from discontinued operations, net of tax: Year ended December 31, 2022 Revenue from discontinued operations $ 48 Costs of providing services Salaries and benefits 14 Other operating expenses 10 Total costs of providing services 24 Other income, net 5 Income from discontinued operations before income taxes 29 Loss on disposal of Willis Re (65 ) Benefit from income tax expense 1 Net income payable to Gallagher on Deferred Closing (5 ) Loss from discontinued operations, net of tax $ (40 ) Loss from discontinued operations, net of tax for the year ended December 31, 2022 was $40 million.
These items include the following: • Income and loss from discontinued operations, net of tax – Adjustment to remove the after-tax income or loss from discontinued operations and the after-tax gain attributable to the divestiture of our Willis Re business. • Restructuring costs and transaction and transformation, net – Management believes it is appropriate to adjust for restructuring costs and transaction and transformation, net when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses.
These items include the following: • Income and loss from discontinued operations, net of tax – Adjustment to remove the after-tax income or loss from discontinued operations and the after-tax gain attributable to the divestiture of our Willis Re business. • Restructuring costs and transaction and transformation – Management believes it is appropriate to adjust for restructuring costs and transaction and transformation when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses.
GAAP tax rate Adjusted income taxes/tax rate Net cash from operating activities Free cash flow The Company believes that these measures are relevant and provide pertinent information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.
GAAP tax rate Adjusted income taxes/tax rate Net cash from operating activities Free cash flow/margin The Company believes that these measures are relevant and provide pertinent information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.
This measure is used solely for the purpose of calculating adjusted diluted earnings per share. 59 Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average number of ordinary shares, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.
This measure is used solely for the purpose of calculating adjusted diluted earnings per share. Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average number of ordinary shares, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.
Adjusted Income Before Taxes and Adjusted Income Taxes/Tax Rate Adjusted income before taxes is defined as income from operations before income taxes adjusted for impairment, amortization, restructuring costs, transaction and transformation, net, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results.
Adjusted Income Before Taxes and Adjusted Income Taxes/Tax Rate Adjusted income before taxes is defined as income from operations before income taxes adjusted for impairment, amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results.
The cash flows used in investing activities for the year ended December 31, 2022 consisted of capital expenditures and capitalized software additions of $204 million and net cash outflows for acquisitions and divestitures of $169 million, partially offset by sales of investments of $200 million.
Cash flows used in investing activities of $173 million for the year ended December 31, 2022 consisted of capital expenditures and capitalized software additions of $204 million and net cash outflows for acquisitions and divestitures of $169 million, partially offset by sales of investments of $200 million.
Losses are recognized in the period in which the loss becomes probable and the amount of the loss is reasonably estimable. Costs to Fulfill —Broking Contracts For our broking business, the Company must estimate the fulfillment costs incurred during the pre-placement of the broking contracts.
Losses are recognized in the period in which the loss becomes probable and the amount of the loss is reasonably estimable. 63 Costs to Fulfill —Broking Contracts For our broking business, the Company must estimate the fulfillment costs incurred during the pre-placement of the broking contracts.
Adjusted operating income is defined as income from operations adjusted for impairment, amortization, restructuring costs, transaction and transformation, net and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results.
Adjusted operating income is defined as income from operations adjusted for impairment, amortization, restructuring costs, transaction and transformation and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results.
Key estimates and determination of valuation multiples rely on the selection of similar companies, obtaining forecast revenue and EBITDA estimates for the similar companies and selection of valuation multiples as they apply to the reporting unit characteristics. • Guideline transaction method — Under the guideline transactions method, a market approach, actual transaction prices and operating data from companies deemed reasonably similar to the reporting units are used to develop valuation multiples as an indication of how much a knowledgeable investor in the marketplace would be willing to pay for the business units. 65
Key estimates and determination of valuation multiples rely on the selection of similar companies, obtaining forecast revenue and EBITDA estimates for the similar companies and selection of valuation multiples as they apply to the reporting unit characteristics. • Guideline transaction method — Under the guideline transactions method, a market approach, actual transaction prices and operating data from companies deemed reasonably similar to the reporting units are used to develop valuation multiples as an indication of how much a knowledgeable investor in the marketplace would be willing to pay for the business units. 66
These costs will include process and organizational design costs, severance and separation-related costs and temporary retention costs. • Other — other costs not included above including fees for professional services, other contract terminations not related to the above categories and supplier migration costs.
These costs include process and organizational design costs, severance and separation-related costs and temporary retention costs. • Other — other costs not included above including fees for professional services, other contract terminations not related to the above categories and supplier migration costs.
GAAP, and these provide a measure against which our businesses may be assessed in the future. Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measures should be viewed in addition to, not in lieu of, the consolidated financial statements for the year ended December 31, 2022.
GAAP, and these provide a measure against which our businesses may be assessed in the future. Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measures should be viewed in addition to, not in lieu of, the consolidated financial statements for the year ended December 31, 2023.
The following table presents a summary of the entities that issue each note and those wholly-owned subsidiaries of the Company that guarantee each respective note on a joint and several basis as of December 31, 2022. These subsidiaries are all consolidated by Willis Towers Watson plc (the ‘parent company’) and together with the parent company comprise the ‘Obligor group’.
The following table presents a summary of the entities that issue each note and those wholly-owned subsidiaries of the Company that guarantee each respective note on a joint and several basis as of December 31, 2023. These subsidiaries are all consolidated by Willis Towers Watson plc (the ‘parent company’) and together with the parent company comprise the ‘Obligor group’.
Adjusted EBITDA is defined as net income adjusted for income from discontinued operations, net of tax, provision for income taxes, interest expense, impairment, depreciation and amortization, restructuring costs, transaction and transformation, net, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results.
Adjusted EBITDA is defined as net income adjusted for income or loss from discontinued operations, net of tax, provision for income taxes, interest expense, impairment, depreciation and amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results.
Risk & Broking (‘R&B’) The R&B segment provides a broad range of risk advice, insurance brokerage and consulting services to clients worldwide ranging from small businesses to multinational corporations. R&B generated approximately 40% of our segment revenue for the year ended December 31, 2022. The segment comprises two primary businesses - Corporate Risk & Broking and Insurance Consulting and Technology.
Risk & Broking (‘R&B’) The R&B segment provides a broad range of risk advice, insurance brokerage and consulting services to clients worldwide ranging from small businesses to multinational corporations. R&B generated approximately 40% of our segment revenue for the year ended December 31, 2023. The segment comprises two primary businesses - Corporate Risk & Broking and Insurance Consulting and Technology.
No single client represented a significant concentration of our consolidated revenue for any of our three most recent fiscal years. The following table details our top five markets based on percentage of consolidated revenue (in U.S. dollars) from the countries where work was performed for the year ended December 31, 2022.
No single client represented a significant concentration of our consolidated revenue for any of our three most recent fiscal years. The following table details our top five markets based on percentage of consolidated revenue (in U.S. dollars) from the countries where work was performed for the year ended December 31, 2023.
Certain costs under the Transformation program are accounted for under ASC 420, Exit or Disposal Cost Obligation , and are included as restructuring costs in the consolidated statements of comprehensive income. For the years ended December 31, 2022 and 2021, restructuring charges under our Transformation program totaled $99 million and $26 million, respectively.
Certain costs under the Transformation program are accounted for under ASC 420, Exit or Disposal Cost Obligation , and are included as restructuring costs in the consolidated statements of comprehensive income. For the years ended December 31, 2023, 2022 and 2021, restructuring charges under our Transformation program totaled $68 million, $99 million and $26 million, respectively.
We believe that the primary factors in selecting a human resources or risk management consulting firm include reputation, the ability to provide measurable increases to shareholder value and return on investment, global scale, quality of service and the ability to tailor services to clients’ unique needs.
We believe that the primary factors in selecting a human resources or risk management consulting company include reputation, the ability to provide measurable increases to shareholder value and return on investment, global scale, quality of service and the ability to tailor services to clients’ unique needs.
Non-GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our consolidated financial statements. 57 Constant Currency Change and Organic Change We evaluate our revenue on an as reported (U.S. GAAP), constant currency and organic basis.
Non-GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our consolidated financial statements. 58 Constant Currency Change and Organic Change We evaluate our revenue on an as reported (U.S. GAAP), constant currency and organic basis.
As of and for the periods ended December 31, 2022 and 2021, the non-guarantor subsidiaries represented substantially all of the total assets and accounted for substantially all of the total revenue of the Company prior to consolidating adjustments. The non-guarantor subsidiaries have other liabilities, including contingent liabilities that may be significant.
As of and for the periods ended December 31, 2023 and 2022, the non-guarantor subsidiaries represented substantially all of the total assets and accounted for substantially all of the total revenue of the Company prior to consolidating adjustments. The non-guarantor subsidiaries have other liabilities, including contingent liabilities that may be significant.
The share repurchase program has no termination date and may be suspended or discontinued at any time. Before its disposal last year, Willis Re’s operating cash flows approximated its pre-tax income and any adjustments for working capital movements (see Note 3 — Acquisitions and Divestitures in Item 8 within this Annual Report on Form 10-K).
The share repurchase program has no termination date and may be suspended or discontinued at any time. Before its disposal in 2021, Willis Re’s operating cash flows approximated its pre-tax income and any adjustments for working capital movements (see Note 3 — Acquisitions and Divestitures in Item 8 within this Annual Report on Form 10-K).
All other subsidiaries of the parent company are non-guarantor subsidiaries (‘the non-guarantor subsidiaries’). 55 Each member of the Obligor group has only a stockholder’s claim on the assets of the non-guarantor subsidiaries. This stockholder’s claim is junior to the claims that creditors have against those non-guarantor subsidiaries.
All other subsidiaries of the parent company are non-guarantor subsidiaries (‘the non-guarantor subsidiaries’). 56 Each member of the Obligor group has only a stockholder’s claim on the assets of the non-guarantor subsidiaries. This stockholder’s claim is junior to the claims that creditors have against those non-guarantor subsidiaries.
These items include amortization of intangible assets and transaction and transformation, net. The following table sets forth the total revenue for the years ended December 31, 2022 and 2021 and the components of the change in total revenue for the year ended December 31, 2022, as compared to the prior year.
These items include amortization of intangible assets and transaction and transformation, net. The following table sets forth the total revenue for the years ended December 31, 2023 and 2022 and the components of the change in total revenue for the year ended December 31, 2023, as compared to the prior year.
For the U.S. and U.K. plans, the following table presents our estimated net periodic benefit income for 2023 and the impact to both plans of a 0.25% increase and decrease to both the expected return on assets (‘EROA’) and the discount rate assumptions; and the projected benefit obligations as of December 31, 2022 and the impact of a 0.25% increase and decrease to the discount rates: Totals - current estimates Impact of 0.25% change to EROA Impact of 0.25% change to discount rate Increase Decrease Increase Decrease Estimated 2023 (income): U.S.
For the U.S. and U.K. plans, the following table presents our estimated net periodic benefit income for 2024 and the impact to both plans of a 0.25% increase and decrease to both the expected return on assets (‘EROA’) and the discount rate assumptions; and the projected benefit obligations as of December 31, 2023 and the impact of a 0.25% increase and decrease to the discount rates: Totals - current estimates Impact of 0.25% change to EROA Impact of 0.25% change to discount rate Increase Decrease Increase Decrease Estimated 2024 (income)/expense: U.S.
Transactional Currency Revenue Expenses (i) U.S. dollars 60 % 55 % Pounds sterling 11 % 17 % Euro 14 % 12 % Other currencies 15 % 16 % (i) These percentages exclude certain expenses for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations.
Transactional Currency Revenue Expenses (i) U.S. dollars 60 % 54 % Pounds sterling 11 % 17 % Euro 14 % 12 % Other currencies 15 % 17 % (i) These percentages exclude certain expenses for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations.
A reconciliation of the reported change to the constant currency and organic change for the year ended December 31, 2022 from the year ended December 31, 2021 is as follows. The components of revenue change may not add due to rounding.
A reconciliation of the reported change to the constant currency and organic change for the year ended December 31, 2023 from the year ended December 31, 2022 is as follows. The components of revenue change may not add due to rounding.
Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate.
Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate.
The main categories of charges will be in the following four areas: • Real estate rationalization — includes costs to align the real estate footprint to our new ways of working (hybrid work) and includes breakage fees and the impairment of right-of-use assets and other related leasehold assets. • Technology modernization — these charges are incurred in moving to common platforms and technologies, including migrating certain platforms and applications to the cloud.
The main categories of charges have been in the following four areas: • Real estate rationalization — includes costs to align the real estate footprint to our new ways of working (hybrid work) and includes breakage fees and the impairment of right-of-use assets and other related leasehold assets. • Technology modernization — these charges are incurred in moving to common platforms and technologies, including migrating certain platforms and applications to the cloud.
Addressing four key areas, Health, Wealth, Career and Benefits Delivery & Outsourcing, the segment is focused on addressing our clients’ people and risk needs to help them succeed in a global marketplace. 47 The following table sets forth HWC segment revenue for the years ended December 31, 2022 and 2021, and the components of the change in revenue for the year ended December 31, 2022 from the year ended December 31, 2021.
Addressing four key areas, Health, Wealth, Career and Benefits Delivery & Outsourcing, the segment is focused on addressing our clients’ people and risk needs to help them succeed in a global marketplace. 49 The following table sets forth HWC segment revenue for the years ended December 31, 2023 and 2022, and the components of the change in revenue for the year ended December 31, 2023 from the year ended December 31, 2022.
Other potential sources of cash may be through the settlement of intercompany loans or return of capital distributions in a tax-efficient manner. Cash and Cash Equivalents Our cash and cash equivalents at December 31, 2022 and 2021 totaled $1.3 billion and $4.5 billion, respectively.
Other potential sources of cash may be through the settlement of intercompany loans or return of capital distributions in a tax-efficient manner. Cash and Cash Equivalents Our cash and cash equivalents at December 31, 2023 and 2022 totaled $1.4 billion and $1.3 billion, respectively.
The following table sets forth R&B segment revenue for the years ended December 31, 2022 and 2021, and the components of the change in revenue for the year ended December 31, 2022 from the year ended December 31, 2021.
The following table sets forth R&B segment revenue for the years ended December 31, 2023 and 2022, and the components of the change in revenue for the year ended December 31, 2023 from the year ended December 31, 2022.
This category will include the impairment of technology assets that are duplicative or no longer revenue-producing, as well as costs for technology investments that do not qualify for capitalization. • Process optimization — these costs will be incurred in the right-shoring strategy and automation of our operations, which will include optimizing resource deployment and appropriate colleague alignment.
This category includes the impairment of technology assets that are duplicative or no longer revenue-producing, as well as costs for technology investments that do not qualify for capitalization. • Process optimization — these costs are incurred in the right-shoring strategy and automation of our operations, which includes optimizing resource deployment and appropriate colleague alignment.
Supplemental Guarantor Financial Information As of December 31, 2022, WTW has issued the following debt securities (the ‘notes’): a) Willis North America Inc.
Supplemental Guarantor Financial Information As of December 31, 2023, WTW has issued the following debt securities (the ‘notes’): a) Willis North America Inc.
HWC is the larger of the two segments of the Company, generating approximately 60% of our segment revenue for the year ended December 31, 2022.
HWC is the larger of the two segments of the Company, generating approximately 60% of our segment revenue for the year ended December 31, 2023.
Liquidity and Capital Resources Executive Summary Our principal sources of liquidity are funds generated by operating activities, available cash and cash equivalents and amounts available under our revolving credit facilities and any new debt offerings. These sources of liquidity will fund our short-term and long-term obligations at December 31, 2022.
Liquidity and Capital Resources Executive Summary Our principal sources of liquidity are funds generated by operating activities, available cash and cash equivalents and amounts available under our revolving credit facility and any new debt offerings. These sources of liquidity will fund our short-term and long-term obligations at December 31, 2023.
Our intangible amortization is generally more heavily weighted to the initial years of the useful lives of the related intangibles, and therefore amortization related to intangible assets will continue to decrease over time. Restructuring Costs Restructuring costs for the years ended December 31, 2022 and 2021 were $99 million and $26 million, respectively.
Our intangible amortization is generally more heavily weighted to the initial years of the useful lives of the related intangibles, and therefore amortization related to intangible assets will continue to decrease over time. Restructuring Costs Restructuring costs for the years ended December 31, 2023 and 2022 were $68 million and $99 million, respectively.
(‘Willis North America’) has approximately $3.7 billion senior notes outstanding, of which $650 million were issued on May 16, 2017, $1.0 billion were issued on September 10, 2018, $1.0 billion were issued on September 10, 2019, $275 million were issued on May 29, 2020, and $750 million were issued on May 19, 2022; and b) Trinity Acquisition plc has approximately $1.1 billion senior notes outstanding, of which $525 million were issued on August 15, 2013 and $550 million were issued on March 22, 2016, and a $1.5 billion revolving credit facility, on which no balance was outstanding at December 31, 2022.
(‘Willis North America’) has approximately $4.4 billion senior notes outstanding, of which $650 million were issued on May 16, 2017, $1.0 billion were issued on September 10, 2018, $1.0 billion were issued on September 10, 2019, $275 million were issued on May 29, 2020, $750 million were issued on May 19, 2022, and $750 million were issued on May 17, 2023; and b) Trinity Acquisition plc has $825 million senior notes outstanding, of which $275 million were issued on August 15, 2013 and $550 million were issued on March 22, 2016, and a $1.5 billion revolving credit facility, on which no balance was outstanding at December 31, 2023.
Adjusted income taxes/tax rate is defined as the provision for income taxes adjusted for taxes on certain items of impairment, amortization, restructuring costs, transaction and transformation, net, gains and losses on disposals of operations, the tax effects of internal reorganizations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes.
Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate. 61 Adjusted income taxes/tax rate is defined as the provision for income taxes adjusted for taxes on certain items of impairment, amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, the tax effects of internal reorganizations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes.
Transformation Program In the fourth quarter of 2021, we initiated a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align our real estate footprint to our new ways of working.
Transformation Program In the fourth quarter of 2021, the Company initiated a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align its real estate footprint to its new ways of working.
The tables below set forth our summarized consolidated statements of comprehensive income and data as a percentage of revenue for the periods indicated.
Financial Statement Overview The tables below set forth our summarized consolidated statements of comprehensive income and data as a percentage of revenue for the periods indicated.
The $676 million of favorable non-cash adjustments primarily includes depreciation, amortization and non-cash lease expense.
The $652 million of favorable non-cash adjustments primarily includes depreciation, amortization and non-cash lease expense.
Gains and losses from discontinued operations in the current year are primarily attributable to the adjustments to the gain on disposal resulting from finalizing the value of the net assets transferred and the operations of the deferred closing entities and run-off activity associated with the divestiture.
Loss from discontinued operations in the prior year are primarily attributable to the adjustments to the gain on disposal resulting from finalizing the value of the net assets transferred and the operations of the deferred closing entities and run-off activity associated with the divestiture.
Capital expenditures for fixed assets and software for internal use, which include expenditures under our Transformation program, are expected to be in the range of $225 million to $250 million for the year ended December 31, 2023. We expect cash from operations to adequately provide for these cash needs.
Capital expenditures for fixed assets and software for internal use, which include expenditures under our Transformation program, are expected to be in the range of $175 million to $200 million for the year ended December 31, 2024. We expect cash from operations to adequately provide for these cash needs.
Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate. 60 Management believes that the adjusted income tax rate presents a rate that is more closely aligned to the rate that we would incur if not for the reduction of pre-tax income for the adjusted items and the tax effects of internal reorganizations, which are not core to our current and future operations.
Management believes that the adjusted income tax rate presents a rate that is more closely aligned to the rate that we would incur if not for the reduction of pre-tax income for the adjusted items and the tax effects of internal reorganizations, which are not core to our current and future operations.
Geographic Region % of Revenue United States 54 % United Kingdom 18 % France 4 % Canada 3 % Germany 3 % 46 The table below details the approximate percentage of our revenue and expenses from continuing operations by transactional currency for the year ended December 31, 2022.
Geographic Region % of Revenue United States 53 % United Kingdom 18 % France 4 % Canada 3 % Germany 3 % 48 The table below details the approximate percentage of our revenue and expenses from continuing operations by transactional currency for the year ended December 31, 2023.
Included within cash and cash equivalents at December 31, 2022 and 2021 are amounts held for regulatory capital adequacy requirements, including $99 million and $120 million, respectively, held within our regulated U.K. entities. 52 Summarized Consolidated Cash Flows The following table presents the summarized consolidated cash flow information for the years ended: Years ended December 31, 2022 2021 (in millions) Net cash from/(used in): Operating activities $ 812 $ 2,061 Investing activities (173 ) 2,570 Financing activities (3,445 ) (3,114 ) (DECREASE)/INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (2,806 ) 1,517 Effect of exchange rate changes on cash, cash equivalents and restricted cash (164 ) (127 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR (i) 7,691 6,301 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR (i) $ 4,721 $ 7,691 (i) The amounts of the cash, cash equivalents and restricted cash, their respective classification on the consolidated balance sheets, as well as their respective portions of the increase or decrease in cash, cash equivalents and restricted cash for each of the periods presented, have been included in Note 21 — Supplemental Disclosures of Cash Flow Information within Item 8 of this Annual Report on Form 10-K.
Included within cash and cash equivalents at December 31, 2023 and 2022 are amounts held for regulatory capital adequacy requirements, including $105 million and $99 million, respectively, held within our regulated U.K. entities. 53 Summarized Consolidated Cash Flows The following table presents the summarized consolidated cash flow information for the years ended: Years ended December 31, 2023 2022 (in millions) Net cash from/(used in): Operating activities $ 1,345 $ 812 Investing activities (1,085 ) (173 ) Financing activities (1,200 ) (3,445 ) DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (940 ) (2,806 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 11 (164 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR (i) 4,721 7,691 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR (i) $ 3,792 $ 4,721 (i) The amounts of the cash, cash equivalents and restricted cash, their respective classification on the consolidated balance sheets, as well as their respective portions of the increase or decrease in cash, cash equivalents and restricted cash for each of the periods presented, have been included in Note 21 — Supplemental Disclosures of Cash Flow Information within Item 8 of this Annual Report on Form 10-K.
Rates, however, vary by geography, industry and client segment. As a result, and due to the global and diverse nature of our business, we view rates in the aggregate. Overall, we are currently seeing a modest but definite increase in pricing in the market.
Rates, however, vary by geography, industry and client segment. As a result, and due to the global and diverse nature of our business, we view rates in the aggregate. Overall, we are currently seeing a stabilizing market.
Our adjusted income tax rates were 20.9% and 20.7% for the years ended December 31, 2022 and 2021, respectively. Free Cash Flow Free cash flow is defined as cash flows from operating activities less cash used to purchase fixed assets and software for internal use.
Our adjusted income tax rates were 20.9% for both years ended December 31, 2023 and 2022. Free Cash Flow/Margin Free cash flow is defined as cash flows from operating activities less cash used to purchase fixed assets and software for internal use.
At December 31, 2022 and 2021, the intercompany balances of the Obligor group with non-guarantor subsidiaries were net receivables of $600 million and $700 million, respectively, and net payables of $10.2 billion and $8.1 billion, respectively. No balances or transactions of non-guarantor subsidiaries are presented in the disclosures other than the intercompany items noted above.
At December 31, 2023 and 2022, the intercompany balances of the Obligor group with non-guarantor subsidiaries were net receivables of $3.4 billion and $600 million, respectively, and net payables of $14.0 billion and $10.2 billion, respectively. No balances or transactions of non-guarantor subsidiaries are presented in the disclosures other than the intercompany items noted above.
During the third quarter of 2022, we revised the expected costs and savings under the program and we now expect the program to generate annual cost savings in excess of $360 million by the end of 2024.
During the fourth quarter of 2023, we revised the expected costs and savings under the program and we now expect the program to generate annual cost savings in excess of $425 million by the end of 2024.
GAAP tax rate 15.4 % 19.9 % Adjusted income tax rate 20.9 % 20.7 % (i) The tax effect was calculated using an effective tax rate for each item. Our U.S. GAAP tax rates were 15.4% and 19.9% for the years ended December 31, 2022 and 2021, respectively.
GAAP tax rate 16.8 % 15.4 % Adjusted income tax rate 20.9 % 20.9 % (i) The tax effect was calculated using an effective tax rate for each item. Our U.S. GAAP tax rates were 16.8% and 15.4% for the years ended December 31, 2023 and 2022, respectively. The current year U.S.
Plans $ 2,435 N/A N/A $ (78 ) $ 84 Economic factors and conditions often affect multiple assumptions simultaneously, and the effects of changes in key assumptions are not necessarily linear.
Plans $ 2,558 N/A N/A $ (82 ) $ 87 Economic factors and conditions often affect multiple assumptions simultaneously, and the effects of changes in key assumptions are not necessarily linear.
The current-year effective tax rate includes a $34 million tax benefit associated with amending the Company’s U.S. federal income tax returns for tax years 2019 and 2020, primarily related to the reduction of Base Erosion and Anti Abuse Tax (‘BEAT’).
The prior-year effective tax rate includes a $34 million tax benefit associated with amending the Company’s U.S. federal income tax returns for tax years 2019 and 2020, primarily related to the reduction of Base Erosion and Anti Abuse Tax (‘BEAT’), and a $22 million income tax benefit associated with foreign exchange remeasurement on income tax account balances.
Components of Revenue Change As Less: Constant Less: Years Ended December 31, Reported Currency Currency Acquisitions/ Organic 2022 2021 Change Impact Change Divestitures Change ($ in millions) Segment revenue $ 5,287 $ 5,268 —% (3)% 4% —% 3% HWC segment revenue for both the years ended December 31, 2022 and 2021 was $5.3 billion.
Components of Revenue Change As Less: Constant Less: Years Ended December 31, Reported Currency Currency Acquisitions/ Organic 2023 2022 Change Impact Change Divestitures Change ($ in millions) Segment revenue $ 5,582 $ 5,287 6% —% 6% —% 6% HWC segment revenue for the years ended December 31, 2023 and 2022 was $5.6 billion and $5.3 billion, respectively.
Cash flows used in financing activities for the year ended December 31, 2021 were $3.1 billion.
Cash Flows Used In Financing Activities Cash flows used in financing activities for the year ended December 31, 2023 were $1.2 billion.
WTW Plan – Substantially all U.S. employees are eligible to participate in this plan. Benefits are provided under a stable value pension plan design. The original stable value design came into effect on January 1, 2012.
Approximately 600 WTW employees in the United States have a frozen accrued benefit under this plan. WTW Plan – Substantially all U.S. employees are eligible to participate in this plan. Benefits are provided under a stable value pension plan design. The original stable value design came into effect on January 1, 2012.
See Part I, Item 1A Risk Factors in this Annual Report on Form 10-K for discussions of risks that may affect our ability to compete.
See Part I, Item 1A Risk Factors in this Annual Report on Form 10-K for a discussion of risks that may affect our growth relative to expectations and our ability to compete.
Cash Flows From Operating Activities Cash flows from operating activities were $812 million for 2022, compared to $2.1 billion for 2021. The $812 million net cash from operating activities for 2022 included net income of $1.0 billion, and $676 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $888 million.
Cash Flows From Operating Activities Cash flows from operating activities were $1.3 billion for 2023, compared to $812 million for 2022. The $1.3 billion net cash from operating activities for 2023 included net income of $1.1 billion and $652 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $371 million.
Goodwill is tested for impairment annually as of October 1, and whenever indicators of impairment arise. Goodwill is tested at the reporting unit level, and the Company had seven reporting units as of October 1, 2022. During fiscal year 2022, the Company performed the impairment test for all reporting units.
Goodwill is tested for impairment annually as of October 1, and whenever indicators of impairment arise. Goodwill is tested at the reporting unit level, and the Company had seven reporting units as of October 1, 2023. During fiscal year 2023, the Company performed the impairment test for all reporting units which resulted in no impairments being identified.
Components of Revenue Change As Less: Constant Less: Years Ended December 31, Reported Currency Currency Acquisitions/ Organic 2022 2021 Change Impact Change Divestitures Change ($ in millions) Segment revenue $ 3,460 $ 3,564 (3)% (5)% 2% (2)% 3% R&B segment revenue for the years ended December 31, 2022 and 2021 was $3.5 billion and $3.6 billion, respectively.
Components of Revenue Change As Less: Constant Less: Years Ended December 31, Reported Currency Currency Acquisitions/ Organic 2023 2022 Change Impact Change Divestitures Change ($ in millions) Segment revenue $ 3,735 $ 3,460 8% —% 8% (1)% 10% R&B segment revenue for the years ended December 31, 2023 and 2022 was $3.7 billion and $3.5 billion, respectively.
For a discussion of some of the risks associated with the Transformation program, please see Part I, Item 1A Risk Factors - ‘We may not be able to fully realize the anticipated benefits of our growth strategy’ and other Risk Factors in this Annual Report on Form 10-K. 45 Financial Statement Overview For management’s discussion of our results of operations for the year ended December 31, 2021 in comparison with the year ended December 31, 2020, please see our Annual Report on Form 10-K filed with the SEC on February 24, 2022.
For a discussion of material risks associated with the Transformation program, please see Part I, Item 1A Risk Factors - ‘We may not be able to fully realize the anticipated benefits of our growth strategy or our expected product, service and transaction pipelines’ and other Risk Factors in this Annual Report on Form 10-K. 47 For management’s discussion of our results of operations for the year ended December 31, 2022 in comparison with the year ended December 31, 2021, please see our Annual Report on Form 10-K filed with the SEC on February 24, 2023.
The areas that we believe include critical accounting estimates are revenue recognition, costs to fulfill under our broking contracts, valuation of billed and unbilled receivables from clients, income taxes, commitments, contingencies and accrued liabilities, pension assumptions, and goodwill and intangible assets.
Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. The areas that we believe include critical accounting estimates are revenue recognition, costs to fulfill under our broking contracts, valuation of billed and unbilled receivables from clients, income taxes, commitments, contingencies and accrued liabilities, pension assumptions, and goodwill and intangible assets.
The year-over-year decrease was primarily due to a lower depreciable base of assets resulting from business disposals over the last two years, a lower dollar value of assets placed in service during 2021 and favorable foreign currency exchange movements. 49 Amortization Amortization represents the amortization of acquired intangible assets, including acquired internally-developed software.
The year-over-year decrease was primarily due to a lower depreciable base of assets resulting from business disposals and a lower dollar value of assets placed in service during the past few years. Amortization Amortization represents the amortization of acquired intangible assets, including acquired internally-developed software.
Other income, net for the year ended December 31, 2022 was $288 million, compared to $701 million for the year ended December 31, 2021, a decrease of $413 million.
Other income, net for the year ended December 31, 2023 was $149 million, compared to $288 million for the year ended December 31, 2022, a decrease of $139 million.
Provision for Income Taxes Provision for income taxes on continuing operations for the year ended December 31, 2022 was $194 million, compared to $536 million for the year ended December 31, 2021. The effective tax rates for the years ended December 31, 2022 and 2021 were 15.4% and 19.9%, respectively.
Provision for Income Taxes Provision for income taxes on continuing operations for the year ended December 31, 2023 was $215 million, compared to $194 million for the year ended December 31, 2022. The effective tax rates for the years ended December 31, 2023 and 2022 were 16.8% 51 and 15.4%, respectively.
New employees in the United Kingdom are offered the opportunity to join a defined contribution plan. 63 Legacy Towers Watson – Benefit accruals earned under the Legacy Watson Wyatt defined benefit plan (predominantly pension benefits) ceased on February 28, 2015, although benefits earned prior to January 1, 2008 retain a link to salary until the employee leaves the Company.
Legacy Towers Watson – Benefit accruals earned under the Legacy Watson Wyatt defined benefit plan (predominantly pension benefits) ceased on February 28, 2015, although benefits earned prior to January 1, 2008 retain a link to salary until the employee leaves the Company.
Each of the reporting unit’s estimated fair values were in excess of their carrying values, and we did not record any impairment losses of goodwill. 64 To perform the test, we used valuation techniques to estimate the fair value of a reporting unit that are under the income and/or market approaches of valuation methods: • Discounted cash flow method — Under the discounted cash flow method, an income approach, the business enterprise value is determined by discounting to present value the terminal value which is calculated using debt-free after-tax cash flows for a finite period of years.
To perform the test, we used valuation techniques to estimate the fair value of a reporting unit that are under the income and/or market approaches of valuation methods: • Discounted cash flow method — Under the discounted cash flow method, an income approach, the business enterprise value is determined by discounting to present value the terminal value which is calculated using debt-free after-tax cash flows for a finite period of years.
As of December 31, 2022 As of December 31, 2021 (in millions) Total current assets $ 216 $ 243 Total non-current assets 685 862 Total current liabilities 6,916 7,747 Total non-current liabilities 8,212 5,298 Year ended December 31, 2022 (in millions) Revenue $ 2,139 Income from operations 1,650 Income from operations before income taxes (i) 1,102 Net income 1,287 Net income attributable to Willis Towers Watson 1,287 (i) Includes intercompany expense, net of the Obligor group from non-guarantor subsidiaries of $132 million for the year ended December 31, 2022. 56 Non-GAAP Financial Measures In order to assist readers of our consolidated financial statements in understanding the core operating results that WTW’s management uses to evaluate the business and for financial planning purposes, we present the following non-GAAP measures and their most directly comparable U.S.
As of December 31, 2023 As of December 31, 2022 (in millions) Total current assets $ 299 $ 216 Total non-current assets 3,454 685 Total current liabilities 7,576 6,916 Total non-current liabilities 11,848 8,212 Year ended December 31, 2023 (in millions) Revenue $ 1,951 Income from operations 1,643 Income from operations before income taxes (i) 849 Net income 1,022 Net income attributable to Willis Towers Watson 1,022 (i) Includes intercompany expense, net of the Obligor group from non-guarantor subsidiaries of $262 million for the year ended December 31, 2023. 57 Non-GAAP Financial Measures In order to assist readers of our consolidated financial statements in understanding the core operating results that WTW’s management uses to evaluate the business and for financial planning purposes, we present the following non-GAAP measures and their most directly comparable U.S.
Transaction and transformation, net in 2021 includes the income receipt related to the termination of the then-proposed Aon transaction. • Impairment – Adjustment to remove the impairment related to the net assets of our Russian business that are held outside of our Russian entities. • Gains and losses on disposals of operations – Adjustment to remove the gains or losses resulting from disposed operations that have not been classified as discontinued operations. • Pension settlement and curtailment gains and losses – Adjustment to remove significant pension settlement and curtailment gains and losses to better present how the Company is performing. • Provisions for significant litigation – We will include provisions for litigation matters which we believe are not representative of our core business operations.
We believe the adjustment is necessary to present how the Company is performing, both now and in the future when the incurrence of these costs will have concluded. • Impairment – Adjustment to remove the impairment related to the net assets of our Russian business that are held outside of our Russian entities. • Gains and losses on disposals of operations – Adjustment to remove the gains or losses resulting from disposed operations that have not been classified as discontinued operations. • Pension settlement and curtailment gains and losses – Adjustment to remove significant pension settlement and curtailment gains and losses to better present how the Company is performing. • Provisions for significant litigation – We will include provisions for litigation matters which we believe are not representative of our core business operations.
Notwithstanding the legal relationships with clients and insurers, the Company is entitled to retain investment income earned on certain of these fiduciary funds in accordance with industry custom and practice and, in some cases, as supported by agreements with insureds.
Notwithstanding the legal relationships with clients and insurers, the Company is entitled to retain investment income earned on certain of these fiduciary funds in accordance with industry custom and practice and, in some cases, as supported by agreements with insureds. At December 31, 2023 and 2022, we had fiduciary funds of $2.6 billion and $3.6 billion, respectively.
At December 31, 2022 and 2021, we were in compliance with all financial covenants. Fiduciary Funds As an intermediary, we hold funds, generally in a fiduciary capacity, for the account of third parties, typically as the result of premiums received from clients that are in transit to insurers and claims due to clients that are in transit from insurers.
Fiduciary Funds As an intermediary, we hold funds, generally in a fiduciary capacity, for the account of third parties, typically as the result of premiums received from clients that are in transit to insurers and claims due to clients that are in transit from insurers.
Additionally, on September 16, 2021, the board of directors approved a $4.0 billion increase to the existing share repurchase program, and on May 25, 2022, approved a $1.0 billion increase to the existing share repurchase program. These increases brought the total approved authorization to $6.5 billion.
Additionally, on September 16, 2021, the board of directors approved a $4.0 billion increase to the existing share repurchase program, on May 25, 2022, approved a $1.0 billion increase to the existing share repurchase program, and on September 20, 2023, approved a $1.0 billion increase to the existing share repurchase program.
Additionally, other operating expenses included costs historically allocated to our Willis Re business which are partially offset by fees under a cost reimbursement Transition Services Agreement (‘TSA’; see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K) with Gallagher.
Additionally, other operating expenses included costs historically allocated to our Willis Re business which are partially offset by fees under a cost reimbursement Transition Services Agreement (‘TSA’; see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K) with Gallagher. 50 Other operating expenses for both years ended December 31, 2023 and 2022 were $1.8 billion, an increase of $39 million, or 2%.
We also hold funds for clients of our benefits account businesses. These fiduciary funds are included in fiduciary assets on our consolidated balance sheets. We present the equal and corresponding fiduciary liabilities related to these fiduciary funds representing amounts or claims due to our clients or premiums due on their behalf to insurers on our consolidated balance sheets.
We present the equal and corresponding fiduciary liabilities related to these fiduciary funds representing amounts or claims due to our clients or premiums due on their behalf to insurers on our consolidated balance sheets.
Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the year ended December 31, 2022, currency translation decreased our consolidated revenue by $335 million. The primary currencies driving these changes were the Euro and Pound sterling.
Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the year ended December 31, 2023, currency translation decreased our consolidated revenue by $10 million. The primary currencies driving this change were the Argentine Peso and Canadian Dollar.
Reconciliations of net income to adjusted EBITDA for the years ended December 31, 2022 and 2021 are as follows: Years Ended December 31, 2022 2021 ($ in millions) NET INCOME $ 1,024 $ 4,236 Loss/(income) from discontinued operations, net of tax 40 (2,080 ) Provision for income taxes 194 536 Interest expense 208 211 Impairment 81 — Depreciation 255 281 Amortization 312 369 Restructuring costs 99 26 Transaction and transformation, net 181 (806 ) Gain on disposal of operations (7 ) (379 ) Adjusted EBITDA $ 2,387 $ 2,394 Net income margin 11.5 % 47.1 % Adjusted EBITDA margin 26.9 % 26.6 % Adjusted EBITDA for both the years ended December 31, 2022 and 2021 was $2.4 billion, a decrease of $7 million.
Reconciliations of net income to adjusted EBITDA for the years ended December 31, 2023 and 2022 are as follows: Years Ended December 31, 2023 2022 ($ in millions) NET INCOME $ 1,064 $ 1,024 Loss from discontinued operations, net of tax — 40 Provision for income taxes 215 194 Interest expense 235 208 Impairment — 81 Depreciation 242 255 Amortization 263 312 Restructuring costs 68 99 Transaction and transformation 386 181 Gain on disposal of operations (43 ) (7 ) Adjusted EBITDA $ 2,430 $ 2,387 Net income margin 11.2 % 11.5 % Adjusted EBITDA margin 25.6 % 26.9 % Adjusted EBITDA for both the years ended December 31, 2023 and 2022 was $2.4 billion, an increase of $43 million.
Reconciliations of income from continuing operations before income taxes to adjusted income before taxes and provision for income taxes to adjusted income taxes for the years ended December 31, 2022 and 2021 are as follows: Years Ended December 31, 2022 2021 ($ in millions) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES $ 1,258 $ 2,692 Adjusted for certain items: Impairment 81 — Amortization 312 369 Restructuring costs 99 26 Transaction and transformation, net 181 (806 ) Gain on disposal of operations (7 ) (379 ) Adjusted income before taxes $ 1,924 $ 1,902 Provision for income taxes $ 194 $ 536 Tax effect on certain items listed above (i) 188 (103 ) Tax effect of statutory rate change — (40 ) Tax effect of the CARES Act 24 — Tax effect of internal reorganizations (4 ) — Adjusted income taxes $ 402 $ 393 U.S.
Reconciliations of income from continuing operations before income taxes to adjusted income before taxes and provision for income taxes to adjusted income taxes for the years ended December 31, 2023 and 2022 are as follows: Years Ended December 31, 2023 2022 ($ in millions) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES $ 1,279 $ 1,258 Adjusted for certain items: Impairment — 81 Amortization 263 312 Restructuring costs 68 99 Transaction and transformation 386 181 Gain on disposal of operations (43 ) (7 ) Adjusted income before taxes $ 1,953 $ 1,924 Provision for income taxes $ 215 $ 194 Tax effect on certain items listed above (i) 195 188 Tax effect of the CARES Act — 24 Tax effect of internal reorganizations (2 ) (4 ) Adjusted income taxes $ 408 $ 402 U.S.
Components of Revenue Change As Less: Constant Less: Years Ended December 31, Reported Currency Currency Acquisitions/ Organic 2022 2021 Change Impact Change Divestitures Change ($ in millions) Revenue $ 8,866 $ 8,998 (1)% (4)% 2% (1)% 4% Revenue for the year ended December 31, 2022 was $8.9 billion, compared to $9.0 billion for the year ended December 31, 2021, a decrease of $132 million, or 1%, on an as-reported basis.
Components of Revenue Change As Less: Constant Less: Years Ended December 31, Reported Currency Currency Acquisitions/ Organic 2023 2022 Change Impact Change Divestitures Change ($ in millions) Revenue $ 9,483 $ 8,866 7% —% 7% —% 8% Revenue for the year ended December 31, 2023 was $9.5 billion, compared to $8.9 billion for the year ended December 31, 2022, an increase of $617 million, or 7%, on an as-reported basis.
Consolidated Statements of Comprehensive Income ($ in millions, except per share data) Years ended December 31, 2022 2021 Revenue $ 8,866 100 % $ 8,998 100 % Costs of providing services Salaries and benefits 5,065 57 % 5,253 58 % Other operating expenses 1,776 20 % 1,673 19 % Depreciation 255 3 % 281 3 % Amortization 312 4 % 369 4 % Restructuring costs 99 1 % 26 — % Transaction and transformation, net 181 2 % (806 ) (9 )% Total costs of providing services 7,688 6,796 Income from operations 1,178 13 % 2,202 24 % Interest expense (208 ) (2 )% (211 ) (2 )% Other income, net 288 3 % 701 8 % INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 1,258 14 % 2,692 30 % Provision for income taxes (194 ) (2 )% (536 ) (6 )% INCOME FROM CONTINUING OPERATIONS 1,064 12 % 2,156 24 % (LOSS)/INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX (40 ) — % 2,080 23 % Income attributable to non-controlling interests (15 ) — % (14 ) — % NET INCOME ATTRIBUTABLE TO WTW $ 1,009 11 % $ 4,222 47 % Diluted earnings per share from continuing operations $ 9.34 $ 16.63 Consolidated Revenue (Continuing Operations) We derive the majority of our revenue from commissions from our brokerage services and fees for consulting and administration services.
Consolidated Statements of Comprehensive Income ($ in millions, except per share data) Years ended December 31, 2023 2022 Revenue $ 9,483 100 % $ 8,866 100 % Costs of providing services Salaries and benefits 5,344 56 % 5,065 57 % Other operating expenses 1,815 19 % 1,776 20 % Depreciation 242 3 % 255 3 % Amortization 263 3 % 312 4 % Restructuring costs 68 1 % 99 1 % Transaction and transformation 386 4 % 181 2 % Total costs of providing services 8,118 7,688 Income from operations 1,365 14 % 1,178 13 % Interest expense (235 ) (2 )% (208 ) (2 )% Other income, net 149 2 % 288 3 % INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 1,279 13 % 1,258 14 % Provision for income taxes (215 ) (2 )% (194 ) (2 )% INCOME FROM CONTINUING OPERATIONS 1,064 11 % 1,064 12 % LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX — — % (40 ) — % Income attributable to non-controlling interests (9 ) — % (15 ) — % NET INCOME ATTRIBUTABLE TO WTW $ 1,055 11 % $ 1,009 11 % Diluted earnings per share from continuing operations $ 9.95 $ 9.34 Consolidated Revenue (Continuing Operations) We derive the majority of our revenue from commissions from our brokerage services and fees for consulting and administration services.
Restructuring costs in the current year primarily related to the real estate rationalization and technology modernization components of the Transformation program (see Transformation Program within this section and Note 6 — Restructuring Costs within Item 8 of this Annual Report on Form 10-K).
Restructuring costs in both the current year and prior year primarily related to the real estate rationalization component of the Transformation program commenced by the Company during the fourth quarter of 2021 (see Transformation Program within this section and Note 6 — Restructuring Costs within Item 8 of this Annual Report on Form 10-K).
The program is expected to incur cumulative costs of $630 million and capital expenditures of approximately $270 million, for a total investment of $900 million.
The program is expected to incur cumulative costs of approximately $995 million and capital expenditures of approximately $130 million, for a total investment of $1.125 billion.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSettlement date before December 31, 2023 2024 December 31, 2022 Contract amount Average contractual exchange rate Contract amount Average contractual exchange rate (millions) (millions) Foreign currency sold U.S. dollars sold for Pounds sterling $ 74 $1.26 = £1 $ 30 $1.21 = £1 Euros sold for U.S. dollars 23 €1 = $1.11 5 €1 = $1.03 Japanese yen sold for U.S. dollars 2 ¥122.34= $1 — ¥127.18= $1 Total $ 99 $ 35 Fair value (i) $ (2 ) $ (1 ) (i) Represents the difference between the contract amount and the cash flow in U.S. dollars which would have been receivable had the foreign currency forward exchange contracts been entered into on December 31, 2022 at the forward exchange rates prevailing at that date.
Biggest changeSettlement date before December 31, 2024 2025 December 31, 2023 Contract amount Average contractual exchange rate Contract amount Average contractual exchange rate (millions) (millions) Foreign currency sold U.S. dollars sold for Pounds sterling $ 63 $1.23 = £1 $ 26 $1.24 = £1 Euros sold for U.S. dollars 24 €1 = $1.07 6 €1 = $1.10 Total $ 87 $ 32 Fair value (i) $ 1 $ 1 (i) Represents the difference between the contract amount and the cash flow in U.S. dollars which would have been receivable had the foreign currency forward exchange contracts been entered into on December 31, 2023 at the forward exchange rates prevailing at that date.
For example, if the U.S. dollar strengthens against the Euro, the reported results of our Eurozone operations in U.S. dollar terms will be lower. The table below provides information about our foreign currency forward exchange contracts which are designated as hedging instruments and are sensitive to exchange rate risk.
For example, if the U.S. dollar strengthens against the Euro, the reported results of our Eurozone operations in U.S. dollar terms will be lower. The table below provides information about our foreign currency forward exchange and option contracts which are designated as hedging instruments and are sensitive to exchange rate risk.
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. As a result of measures taken by central banks around the world, rates offered on these investments have increased, in some cases significantly over the course of the year.
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. As a result of measures taken by central banks around the world, rates offered on these investments have increased, in some cases significantly, over the course of the last year.
The foreign exchange risks in our London market operations are hedged to the extent that: • forecasted Pounds sterling expenses exceed Pounds sterling revenue, in which case the Company limits its exposure to this exchange rate risk by the use of forward contracts matched to a portion of the forecasted Pounds sterling outflows arising in the ordinary course of business.
The foreign exchange risks in our London market operations are hedged to the extent that: • forecasted Pounds sterling expenses exceed Pounds sterling revenue, in which case the Company limits its exposure to this exchange rate risk by the use of forward and option contracts matched to a portion of the forecasted Pounds sterling outflows arising in the ordinary course of business.
Interest Rate Risk The Company has access to $1.5 billion under a revolving credit facility (see Note 11 — Debt within Item 8 of this Annual Report on Form 10-K for further information). As of December 31, 2022, no amount was drawn on this facility.
Interest Rate Risk The Company has access to $1.5 billion under a revolving credit facility (see Note 11 — Debt within Item 8 of this Annual Report on Form 10-K for further information). As of December 31, 2023, no amount was drawn on this facility.
Outside the U.S., we predominantly generate revenue and expenses in the local currency with the exception of our London market operations which earn revenue in several currencies but incur expenses predominantly in Pounds sterling. The table below gives an approximate analysis of revenue and expenses from continuing operations by currency in 2022.
Outside the U.S., we predominantly generate revenue and expenses in the local currency with the exception of our London market operations which earn revenue in several currencies but incur expenses predominantly in Pounds sterling. The table below gives an approximate analysis of revenue and expenses from continuing operations by currency in 2023.
If short-term interest rates increased or decreased by 25 basis points, interest earned on these invested fiduciary funds, and therefore our interest income recognized, would increase or decrease by approximately $5 million on an annualized basis.
If short-term interest rates increased or decreased by 25 basis points, interest earned on these invested fiduciary funds, and therefore our interest income recognized, would increase or decrease by approximately $6 million on an annualized basis.
U.S. dollars Pounds sterling Euro Other currencies Revenue 60% 11% 14% 15% Expenses (i) 55% 17% 12% 16% (i) These percentages exclude certain expenses for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations.
U.S. dollars Pounds sterling Euro Other currencies Revenue 60% 11% 14% 15% Expenses (i) 54% 17% 12% 17% (i) These percentages exclude certain expenses for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations.
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 that significant risk exists in connection with the Company’s concentrations of credit as of December 31, 2022. 68
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 that significant risk exists in connection with the Company’s concentrations of credit as of December 31, 2023. 69
Interest income was $55 million, $12 million and $18 million for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, we held $2.2 billion of fiduciary funds invested in interest-bearing accounts.
Interest income was $145 million, $55 million and $12 million for the years ended December 31, 2023, 2022 and 2021, respectively. At December 31, 2023, we held $2.2 billion of fiduciary funds invested in interest-bearing accounts.
The Company had no outstanding floating rate-based debt at December 31, 2022.
The Company had no outstanding floating rate-based debt at December 31, 2023.
Translation risk Outside our U.S. and London market operations, we predominantly earn revenue and incur expenses in the local currency. When we translate the results and net assets of these operations into U.S. dollars for reporting purposes, movements in exchange rates will affect reported results and net assets.
Such derivatives typically mature within three months. 67 Translation risk Outside our U.S. and London market operations, we predominantly earn revenue and incur expenses in the local currency. When we translate the results and net assets of these operations into U.S. dollars for reporting purposes, movements in exchange rates will affect reported results and net assets.
Expected to mature before December 31, 2023 2024 2025 2026 2027 Thereafter Total Fair Value (i) ($ in millions) Fixed rate debt Principal $ 250 $ 650 $ — $ 550 $ 750 $ 2,550 $ 4,750 $ 4,317 Fixed rate payable 4.625 % 3.600 % — 4.400 % 4.650 % 4.186 % 4.227 % (i) Represents the net present value of the expected cash flows discounted at current market rates of interest or quoted market rates as appropriate.
Expected to mature before December 31, 2024 2025 2026 2027 2028 Thereafter Total Fair Value (i) ($ in millions) Fixed rate debt Principal $ 650 $ — $ 550 $ 750 $ 600 $ 2,700 $ 5,250 $ 5,004 Fixed rate payable 3.600 % — 4.400 % 4.650 % 4.500 % 4.440 % 4.368 % (i) Represents the net present value of the expected cash flows discounted at current market rates of interest or quoted market rates as appropriate.
Interest Income on Fiduciary Funds We are exposed to interest rate risk. Specifically, as a result of our operating activities, we receive cash for premiums and claims which we deposit in high-quality bank term deposit and money market funds where permitted. We earn interest on these funds, which is included in our consolidated financial statements as interest income.
Interest Income on Fiduciary Funds We are exposed to interest rate risk. Specifically, as a result of our operating activities, we receive cash for premiums and claims which we deposit in high-quality bank term deposit and money market funds, on which we earn interest, where permitted. We also hold funds for clients of our benefits accounts businesses.
These derivatives are not generally designated as hedging instruments and at December 31, 2022, we had 66 notional amounts of $1.7 billion (denominated primarily in U.S. dollars, Pound sterling, Euro and Australian dollars), with a net asset fair value of $24 million. Such derivatives typically mature within three months.
These derivatives are not generally designated as hedging instruments and at December 31, 2023, we had notional amounts of $1.2 billion (denominated primarily in U.S. dollars, Pounds sterling and Euros), with a net asset fair value of $3 million.
As a result, interest income has improved substantially this year, with the greatest impact having been recognized in the second half of 67 2022. Interest income in the future will be a function of the short-term rates we are able to obtain by currency and the cash balances available to invest in these instruments.
This has resulted in the Company recognizing higher interest income over the same period in the prior year. Interest income in the future will be a function of the short-term rates we are able to obtain by currency and the cash balances available to 68 invest in these instruments.
Added
For the benefit funds not invested, cash and cash equivalents are held, on which we earn interest, until the funds are directed by plan participants to either be invested in mutual funds or paid out on their behalf. This interest earned is included in our consolidated financial statements as interest income.

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