UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Amendment No. 1
(Mark One)
¨ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2013
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 001-16503
WILLIS GROUP HOLDINGS PUBLIC
LIMITED COMPANY
(Exact name of Registrant as specified in its charter)
Ireland | 98-0352587 | |
(Jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
c/o Willis Group Limited
51 Lime Street, London EC3M 7DQ, England
(Address of principal executive offices)
(011) 44-20-3124-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class | Name of each exchange on which registered | |
Ordinary Shares, nominal value $0.000115 per share | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes xþ No ¨o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨o No xþ
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xþ No ¨o
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes xþ No ¨o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definite proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of ‘large accelerated filer’, ‘accelerated filer’ and ‘smaller reporting company’ in Rule 12b-2 of the Exchange Act.
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ||||||
Smaller reporting company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨o No xþ
The aggregate market value of the voting common equity held by non-affiliates of the Registrant, computed by reference to the last reported price at which the Registrant’s common equity was sold on June 30,28, 2013 (the last day of the Registrant’s most recently completed second quarter) was
As of February 14,April 23, 2014, there were outstanding
DOCUMENTS INCORPORATED BY REFERENCE
None.
Table of Part III will be incorporated by reference in accordance with Instruction G(3) to Form 10-K no later than April 30, 2014.
Explanatory Note |
Item 10 | ||||||
3 | ||||||
Item 11 | ||||||
16 | ||||||
Item 12 | —Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||||
58 | ||||||
Item 13 | —Certain Relationships and Related Transactions, and Director Independence | |||||
62 | ||||||
Item 14 | ||||||
63 | ||||||
Item 15 | 66 | |||||
73 |
This Amendment is being filed solely to include the information required in Part III (Items 10, 11, 12, 13 and 14) of Form 10-K that was previously omitted from the Original Form 10-K in reliance on General Instruction G(3) to Form 10-K. General Instruction G(3) to Form 10-K allows such omitted information to be filed as an amendment to the Original Form 10-K or incorporated by reference from the Company’s definitive proxy statement which involves the election of directors not later than 120 days after the end of the fiscal year covered by the Original Form 10-K. As of the date of this Amendment, the Company does not intend to file a definitive proxy statement containing the information required in Part III within such 120-day period. Accordingly, the Company is filing this Amendment to include such omitted information as part of the Original Form 10-K. Except as expressly set forth herein, this Amendment does not reflect events that occurred after the date of the Original Form 10-K and does not modify or update any of the other disclosures contained therein in any way. This Amendment No. 1 should be read in conjunction with the Original Form 10-K and Item 10—Directors, Executive Officers and Corporate Governance Directors The Director and Director Nominees Age Director Summary Background Dominic Casserley Anna C. Catalano Sir Roy Gardner The Rt. Hon. Sir Jeremy Hanley, KCMG Robyn S. Kravit Wendy E. Lane Francisco Luzón James F. McCann Jaymin Patel Douglas B. Roberts Dr. Michael J. Somers Jeffrey W. Ubben Nominees for Willis Group Holdings and actuarial services to Directors are Qualifications When recommending a person for new or continued membership on the Board, the Governance Committee considers each nominee’s individual qualifications in light of the overall mix of attributes represented on the Board and the Company’s current and future needs. In its assessment of each nominee, the Governance Committee considers the person’s integrity, experience, reputation, independence and when the person is a current director of the Company, his or her performance as a director. The Governance Committee considers each director’s ability to devote the time and effort necessary to fulfill responsibilities to the Company and, for current directors, whether each director has attended at least 75% of the aggregate of the total number of meetings held by the Board and any committee on which he or she served. In 2013, each director satisfied this requirement. The Governance Committee believes service on other public or private boards (including international companies) also enhances a director’s knowledge and board experience. It considers the experience of a director on other boards and board committees in both this nomination decision and in recommending the membership slate for each of the Company’s Board Committees. The Governance Committee believes that including directors having current and previous leadership positions is important to the Board’s ability to oversee management. Extensive knowledge of the Company’s business and the industry is an important quality for directors. Additionally, because of the Company’s global reach, international experience or knowledge of a key geographic area is also important. As the Company’s business also requires continuous compliance with regulatory requirements and agencies, it is imperative for some directors to have legal, governmental, political or diplomatic expertise. If a person has served or currently serves in the Diversity The Company is committed to maintaining diversity on the Board as Set forth below each biographical information is a summary of some of the Biographical Information The following sets forth information about our Dominic Casserley — Mr. Casserley, age 56, joined the Company Anna C. Catalano — Ms. Catalano, age 54, joined the Board on July 21, 2006 and currently serves as a member of the Sir Roy Gardner — Sir Roy Gardner, age 68, joined the Enserve Group Ltd. In addition, he was Chairman of Connaught plc between May and September 2010. He previously held positions as Chief Executive of Centrica plc, Chairman of Manchester United plc, Chairman of Plymouth Argyle Football Club, Finance Director of British Gas plc, Managing Director of GEC-Marconi Ltd, Director of GEC plc and Director of Laporte plc. The Rt. Hon. Sir Jeremy Hanley, KCMG — Sir Jeremy Hanley, age 68, joined the Board on April 26, 2006 and currently serves as a FORWARD-LOOKING STATEMENTSWe have included in this document 'forward-looking statements' within (“Willis Group Holdings,” the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our, outlook future capital expenditures, growth in commissions and fees, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, plans and references to future successes, are forward-looking statements. Also, when we use the words such as 'anticipate', 'believe', 'estimate', 'expect', 'intend', 'plan', 'probably', or similar expressions, we are making forward-looking statements.There are important uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including the following:the impact of any regional, national or global political, economic, business, competitive, market, environmental or regulatory conditions on our global business operations;the impact of current global economic conditions on our results of operations and financial condition, including as a result of those associated with the ongoing Eurozone crisis, any insolvencies of or other difficulties experienced by our clients, insurance companies or financial institutions;our ability to implement and realize anticipated benefits of any expense reduction initiative, charge or any revenue generating initiatives;our ability to implement and fully realize anticipated benefits of our new growth strategy and revenue generating and cost-saving initiatives;volatility or declines in insurance markets and premiums on which our commissions are based, but which we do not control;our ability to develop and implement technology solutions and invest in innovative product offerings in an efficient and competitive manner;our ability to continue to manage our significant indebtedness;our ability to compete effectively in our industry, including any impact if we continue to refuse to accept contingent commissions to date from carriers in the non-Human Capital areas of our retail brokerage business and developing new products and services;material changes in commercial property and casualty markets generally“Registrant” or the availability of insurance products“Company” and, together with our subsidiaries, “we,” “us” or changes in premiums resulting from a catastrophic event, such as a hurricane;our ability“our”) is filing this Amendment No. 1 to retain key employees and clients and attract new business;timing or ability to carry out share repurchases and redemptions;the timing or ability to carry out refinancing or take other steps to manage our capital and the limitations in our long-term debt agreements that may restrict our ability to take these actions;fluctuations in our earnings as a result of potential changesAnnual Report on Form 10-K (this “Amendment”) to our valuation allowance(s)Annual Report on our deferred tax assets;any fluctuations in exchange and interest rates that could affect expenses and revenue;the potential costs and difficulties in complying with a wide variety of foreign laws and regulations and any related changes, given the global scope of our operations;rating agency actions, including a downgrade to our credit rating, that could inhibit our ability to borrow funds or the pricing thereof and in certain circumstances cause us to offer to buy back some of our debt;a significant decline in the value of investments that fund our pension plans or changes in our pension plan liabilities or funding obligations;our ability to achieve the expected strategic benefits of transactions, including any growth from associates;further impairment of the goodwill of one of our reporting units, in which case we may be required to record additional significant charges to earnings;our ability to receive dividends or other distributions in needed amounts from our subsidiaries;changes in the tax or accounting treatment of our operations and fluctuations in our tax rate;any potential impact from the US healthcare reform legislation;our involvement in and the results of any regulatory investigations, legal proceedings and other contingencies;underwriting, advisory or reputational risks associated with non-core operations as well as the potential significant impact our non-core operations (including the Willis Capital Markets & Advisory operations) can have on our financial results;4our exposure to potential liabilities arising from errors and omissions and other potential claims against us; andthe interruption or loss of our information processing systems, data security breaches or failure to maintain secure information systems.The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results.Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless the securities laws require us to do so. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.5PART IItem 1 — BusinessHistory and Development of the CompanyWillis Group Holdings is the ultimate holding companyForm 10-K for the Group. We trace our history to 1828 and are one of the largest insurance brokers in the world.Willis Group Holdings was incorporated in Ireland on September 24, 2009 to facilitate the change of the place of incorporation of the parent company of the Group from Bermuda to Ireland (the ‘Redomicile’). Atfiscal year ended December 31, 2009, the common shares of Willis-Bermuda were canceled, the Willis-Bermuda common shareholders received, on a one-for-one basis, new ordinary shares of Willis Group Holdings, and Willis Group Holdings became the ultimate parent company for the Group.For administrative convenience, we utilize the offices of a subsidiary company as our principal executive offices. The address is:Willis Group Holdings Public Limited Companyc/o Willis Group LimitedThe Willis Building51 Lime StreetLondon EC3M 7DQEnglandTel: +44 20 3124 6000For several years, we have focused on our core retail and specialist broking operations. In 2008, we acquired HRH, at the time the eighth largest insurance and risk management intermediary in the United States. The acquisition almost doubled our North America revenues and created critical mass in key markets including California, Florida, Texas, Illinois, New York, Boston, New Jersey and Philadelphia. In addition, we have made a number of smaller acquisitions around the world and increased our ownership in several of our associates and existing subsidiaries, which were not wholly-owned, where doing so strengthened our retail network and our specialty businesses.Available InformationThe Company files annual, quarterly and current reports, proxy statements and other information2013 (the “Original Form 10-K”) that was originally filed with the Securities and Exchange Commission (the ‘SEC’“SEC”). You may on February 27, 2014.copy any documents we file at the SEC’s Public Reference Room at 100 F Street, NE Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for information on the Public Reference Room. The SEC maintains a website that contains annual, quarterly and current reports, proxy statements andCompany’s other information that issuers (including Willis Group Holdings) file electronicallyfilings with the SEC. This Amendment consists solely of the preceding cover page, this explanatory note, Part III (Items 10, 11, 12, 13 and 14), the signature page and the certifications required to be filed as exhibits to this Amendment.SEC’s website is www.sec.gov.The Company makes available, freefollowing table sets forth, as of charge throughApril 23, 2014, the name, age and summary background of each of our website, www.willis.com,current directors and director nominees. Directors are elected by our shareholders at our annual report on Form 10-K, our quarterly reports on Form 10-Q, our proxy statement, current reports on Form 8-Kmeeting of shareholders and Forms 3, 4, and 5 filed on behalfserve until the next annual meeting of directors and executive officers, as well as any amendments to those reports filedshareholders 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,until his or furnished to, the SEC. Unless specifically incorporated by reference, information on our website is not a part of this Form 10-K.Company’s Corporate Governance Guidelines, Audit Committee Charter, Risk Committee Charter, Compensation Committee CharterNominating and Corporate Governance Committee (the “Governance Committee”) has reviewed the needs of the Board and Nominating Committee Charter are available on our website, www.willis.com, in the Investor Relations-Corporate Governance section, or upon request. Requestsqualities, experience and performance of each director. At the Committee’s recommendation, the Board has renominated all current directors.
Since 56 2013 CEO of Willis Group Holdings plc 54 2006 Former Group Vice President, Marketing for BP plc 68 2006 Chairman of Compass Group, PLC 68 2006 Former Member of Parliament for Richmond and Barnes 62 2008 Chief Executive Officer of Tethys Research, LLC 62 2004 Chairman of Lane Holdings, Inc. 66 2013 Former Executive Board Member and General Manager of the Latin American Division of Banco Santander, S.A. 62 2004 Chairman and CEO of 1-800-Flowers 46 2013 President and CEO of GTECH Americas 66 2003 Professor and the Director for Institute of Public Policy and Social Research - Michigan State University 71 2010 Former CEO of Irish National Treasury Management Agency 52 2013 Founder, CEO and Chief Investment Officer of ValueAct Capital copies of these documents should be directed in writing to the Company Secretary c/o Office of General Counsel, ElectionPublic Limited Company, One World Financial Center, 200 Liberty Street, New York, NY 10281.GeneralWe provideplc is a broad range of insurance brokerage, reinsurance andleading global risk management consulting services to our clients worldwide. We have significant market positions in the United States, in the United Kingdom and, directly and through our6associates, in many other countries. We are a recognized leader in providing specialized risk management advisory and other services on a global basis to clients in various industries including aerospace, marine, construction and energy.In our capacity as an advisor, and insurance broker, we act as an intermediary between our clients and insurance carriers by advising our clients on their risk management requirements, helping clients determine the best means of managing risk, and negotiating and placing insurance with insurance carriers through our global distribution network.We assist clients in the assessment of their risks, advise on the best ways of transferring suitable risk to the global insurance and reinsurance marketsbroker. Through its subsidiaries, Willis develops and then execute the transactions at the most appropriate available price, termsdelivers professional insurance, reinsurance, risk management, financial and conditions for our clients. Our global distribution network enables us to place the risk in the most appropriate insurance or reinsurance market worldwide.We also offer clients a broad range ofhuman resources consultinghelp them to identifycorporations, public entities and control their risks. These services range from strategic risk consulting (including providing actuarial analysis), to a variety of due diligence services, toinstitutions around the provision of practical on-site risk control services (such as health and safety or property loss control consulting) as well as analytical and advisory services (such as hazard modeling and reinsurance optimization studies). We assist clients in planning how to manage incidents or crises when they occur. These services include contingency planning, security audits and product tampering plans. We are not an insurance company and therefore we do not underwrite insurable risks for our own account.We derive most of our revenues from commissions and fees for brokerage and consulting services and do not determine the insurance premiums on which our commissions are generally based. Commission levels generally follow the same trend as premium levels as they are derived from a percentage of the premiums paid by the insureds. Fluctuations in these premiums charged by the insurance carriers can therefore have a direct and potentially material impact on our results of operations.We and our associates serve a diverse base of clients including major multinational and middle-market companies in a variety of industries, as well as public institutions and individual clients. Many of our client relationships span decades.world. We have approximately 21,700 employees around the world (including approximately 3,700 at our associate companies) and a network of in excess of 400 offices in nearlyapproximately 120 countries.We believe weoneresponsible for overseeing the Company’s business around the globe consistent with their fiduciary duties. This requires highly-skilled individuals with various qualities, attributes and professional experience. The Governance Committee believes that the slate of onlynominees as a few insurance brokerswhole reflects the collective knowledge, integrity, reputation, and leadership abilities, and, as discussed more below, the diversity of skills and experience with respect to accounting and financial services, government and regulation, marketing and operations and global markets that the governance of the Company requires.world possessing the global operating presence, broad product expertisepublic arena (whether through political service, employment as a CEO of a public company or membership on a board of a public company), then his or her integrity and extensive distribution network necessary to meet effectively the global risk management needsreputation is also a matter of many of our clients.7Business StrategyToday we operate in attractive growth markets with a diversified platform across geographies, industries, segments and lines of business. We aim to become the risk advisor, insurance and reinsurance broker of choice globally.We will achieve this by being completely focused on:where we compete and that means the areas where we can succeed by:◦Geography - we will re-balance our business mix towards faster growing geographies, with both developed and developing markets◦Client Segmentation - we will segment our client offering to provide distinct offerings to different types of client, focusingpublic record on the value we provide to our clients◦Sector - we will build business lines around our industry and sector strength e.g. Human Capital and Employee Benefits.How we compete which will be centered on meeting the needs of our client by:◦Connection - leading to more cross-selling◦Innovation - competing on analytics and innovation◦Investment - focusing on earnings accretion, competitive position and fitThrough these strategies we aim to grow revenue with positive operating leverage, grow cash flows and generate compelling returns for investors.8Our BusinessInsurance and reinsurance is a global business,Company and its participants are affected byshareholders may rely. The Governance Committee also believes that the Company distinguishes itself from its competitors through marketing and, as a result, a strong marketing perspective should be represented. In light of its public and global trendsnature (including conducting business in capacitydifferent countries and pricing. Accordingly, we operatecurrencies), the Company also seeks international experience and a high level of financial literacy and experience on the Board and Audit Committee.one global business which ensures all clients' interests are handled efficiently and comprehensively, whatever their initial point of contact. For information regarding revenues and operating income per segment, see Note 28 of the Consolidated Financial Statements contained herein.GlobalOur Global business provides specialist brokerage and consulting services to clients worldwide for the risks arising from specific industrial and commercial activities. In these operations, we have extensive specialized experience handling diverse lines of coverage, including complex insurance programs, and acting as an intermediary between retail brokers and insurers. We increasingly provide consulting services on risk management with the objective of assisting clients to reduce the overall cost of risk. Our Global business serves clients in over 150 countries, primarily from officesprovided in the United Kingdom, although we also serve clients from offices inCompany’s Corporate Governance Guidelines. The Board and the United States, Continental Europe, AsiaGovernance Committee believe that diversity on the Board is important to ensuring a rounded perspective. Diversity is broadly interpreted by the Board to include viewpoints, background, experience, industry knowledge, and Australia.The Global business is divided into:Willis Re;Faber Global;Specialty; andWillis Capital Markets & Advisory.Willis ReWe are one of the world's largest intermediaries for reinsurance and have a significant market share in all of the world's major markets. Our clients are both insurance and reinsurance companies.We operate this business on a global basis and provide a complete range of transactional capabilities, including, in conjunction with Willis Capital Markets & Advisory, a wide variety of capital markets based products. Our services are underpinned by leading modeling, financial analysis and risk management advice. We bolster and enhance all of these services with the cutting edge knowledge derived from our Willis Research Network, the insurance industry's largest partnership with global academic research.Faber GlobalOur Faber Global unit provides facultative and wholesale solutions for property and casualty, health and specialty insurances to cedants and independent wholesaler brokers worldwide who want solutions provided through the London, European and Bermudian markets.SpecialtyDuring first quarter 2014 we announced changes to the structure of our UK-based insurance operations, combining our Global Specialty businesses with the Willis UK retail business to create a market leading client proposition.This combined unit has strong global positions in Aerospace, Energy, Marine, Construction, Financial and Executive Risksgeography, as well as Financial Solutions, wholesale and facultative.AerospaceWe are highly experienced in the provision of insurance and reinsurance brokerage and risk management services to Aerospace clients worldwide, including aircraft manufacturers, air cargo handlers and shippers, airport managers and other general aviation companies. Advisory services provided by Aerospace include claims recovery, contract and leasing risk management, safety services and market information. Aerospace's clients include approximately one third of the world's9airlines. The specialist Inspace division is also prominent in serving the space industry by providing insurance and risk management services to approximately 30 companies.EnergyOur Energy practice provides insurance brokerage services including property damage, offshore construction, liability and control of well and pollution insurance to the energy industry. Our Energy practice clients are worldwide. We are highly experienced in providing insurance brokerage for all aspects of the energy industry including exploration and production, refining and marketing, offshore construction and pipelines.MarineOur Marine unit provides marine insurance and reinsurance brokerage services, including hull, cargo and general marine liabilities. Marine's clients include ship owners, ship builders, logistics operators, port authorities, traders and shippers, other insurance intermediaries and insurance companies. Marine insurance brokerage is our oldest line of business dating back to our establishment in 1828.Financial and Executive RisksOur Financial and Executive Risks unit specializes in broking directors' and officers' insurance as well as professional indemnity insurance for corporations, financial institutions and professional firms.Construction, Property and CasualtyOur Construction practice provides risk management advice and brokerage services for a wide range of UK and international construction activities. The clients of the Construction practice include contractors, project owners, project managers, project financiers, professional consultants and insurers. We are a broker for a number of the leading global construction firms. The Construction practice is now tied to Willis' specialist internal unit providing our retail colleagues' clients with access to global insurance markets, providing structuring and placing services supported by specialist knowledge and expertise across a variety of industries on a global basis in large and complex property and casualty risk exposures.Financial SolutionsFinancial Solutions is a global business unit which incorporates our Political and Credit Risk businesses, as well as Structured Finance and Project Risk Consulting teams. It also comprises specialist Trade Credit, Contingent Aviation and Mortgage teams.Fine Art, Jewelry and SpecieThe Fine Art, Jewelry and Specie unit provides specialist risk management, insurance and reinsurance services to fine art, diamond and jewelry businesses and armored car operators.Special Contingency RisksSpecial Contingency Risks specializes in people risk solutions using a combination of risk management, kidnap and ransom and personal accident services and products to meet the needs of corporations and private clients.Hughes-GibbThe Hughes-Gibb unit principally services the insurance and reinsurance needs of thoroughbred horse racing and horse breeding industry and of the agri-business sector, covering livestock breeders, aquaculture & agriculture industries.UK retail operationsOur UK retail operations provide risk management, insurance brokerage and related risks services to a wide array of industry and client segments.10Willis Capital Markets & AdvisoryWillis Capital Markets & Advisory, with offices in New York and London, provides advice to companies involved in the insurance and reinsurance industry on a broad array of mergers and acquisition transactions as well as capital markets products, including acting as underwriter or agent for primary issuances, operating a secondary insurance-linked securities trading desk and engaging in general capital markets and strategic advisory work.Retail operationsOur North America and International retail operations provide services to small, medium and large corporate clients, accessing Global's specialist expertise when required.North AmericaOur North America business provides risk management, insurance brokerage, related risk services, and employee benefits brokerage and consulting to a wide array of industry and client segments in the United States and Canada. With around 100 locations, organized into seven geographical regions including Canada, Willis North America locally delivers our global and national resources and specialist expertise through this retail distribution network.In addition to being organized geographically and by specialty, our North America business focuses on four client segments: global, large national/middle-market, small commercial, and private client, with service, marketing and sales platform support for each segment.ConstructionThe largest industry practice group in North America is Construction, which specializes in providing risk management, insurance brokerage, and surety bonding services to the construction industry. Willis Construction provided these services to nearly 12,000 clients including approximately 20 percent of the Engineering News Record Top 400 contractors (a listing of the largest 400 North American contractors based on reported revenue). In addition, this practice group has expertise in professional liability insurance, controlled insurance programs for large projects and insurance for national homebuilders.Human CapitalWillis Human Capital, fully integrated into the North America platform, is the Group's largest product-based practice group and provides health, welfare and human resources consulting, and brokerage services to all of our commercial client segments. This practice group's value lies in helping clients control employee benefit plan costs, reducing the amount of time human resources professionals spend administering their companies' benefit plans and educating and training employees on benefit plan issues.Executive RisksAnother industry-leading North America practice group is Willis Executive Risks, a national team of technical professionals who specialize in meeting the directors and officers, employment practices, fiduciary liability insurance risk management, and claims advocacy needs of public and private corporations and organizations. This practice group also has expertise in professional liability, especially cyber risks.CAPPPSThe Captive, Actuarial, Programs, Pooling, Personal Lines and Strategic Outcomes (CAPPPS) group has a network of actuaries, certified public accountants, financial analysts and pooled insurance program experts who assist clients in developing and implementing alternative risk management solutions. The program business is a leader in providing national insurance programs to niche industries including ski resorts, auto dealers, recycling, environmental, and specialty workers' compensation. Through our Loan Protector business, a specialty business acquired as part of the HRH business, this group also works with financial institutions to confirm their loans are properly insured and their interests are adequately protected.Other industry practice groupsOther industry practice groups include Healthcare, serving the professional liability and other insurance and risk management needs of private and not-for-profit health systems, hospitals and physicians groups; Financial Institutions, serving the needs of large banks, insurers and other financial services firms; and Mergers & Acquisitions, providing due diligence, and risk management and insurance brokerage services to private equity and merchant banking firms and their portfolio companies.11InternationalOur International business comprises our operations in Western Europe, Central and Eastern Europe, Asia, Australasia, the Middle East, South Africa and Latin America.Our offices provide services to businesses locally in nearly 120 countries around the world, making use of local expertise as well as skills, industry knowledge and expertise available elsewhere in the Group.The services provided are focused according to themore traditional characteristics of each market and vary across offices, but generally include direct risk management and insurance brokerage, specialist and reinsurance brokerage and employee benefits consulting.As part of our on-going strategy, we continue to look for opportunities to strengthen our International market share through acquisitions and strategic investments. A list of significant subsidiaries is included in Exhibit 21.1 to this document.We have also invested in associate companies; our significant associates at December 31, 2013 were GS & Cie Groupe ('Gras Savoye'), a French organization (30 percent holding) and Al-Futtaim Willis Co. LLC, organized under the laws of Dubai (49 percent holding). In connection with many of our investments we retain the right to increase our ownership over time, typically to a majority or 100 percent ownership position.We believe the combined total revenues of our International subsidiaries and associates provide an indication of the spread and capability of our International network. These operations generated approximately 30 percent of the Group’s total consolidated commissions and fees in 2013.CustomersOur clients operate on a global and local scale in a multitude of businesses and industries throughout the world and generally range in size from major multinational corporations to middle-market companies. Further, many of our client relationships span decades, for instance our relationship with The Tokio Marine and Fire Insurance Company Limited dates back over 100 years. No one client accounted for more than 10 percent of revenues for fiscal year 2013. Additionally, we place insurance with approximately 2,500 insurance carriers, none of which individually accounted for more than 10 percent of the total premiums we placed on behalf of our clients in 2013.CompetitionWe face competition in all fields in which we operate, based on global capability, product breadth, innovation, quality of service and price. We compete with Marsh & McLennan and Aon, the two other major providers of global risk management services, as well as with numerous specialist, regional and local firms. Competition for business is intense in all of our business lines and in every insurance market, and Marsh & McLennan and Aon have substantially greater market share than we do. Competition on premium rates has also exacerbated the pressures caused by a continuing reduction in demand in some classes of business. 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. Additional competitive pressures arise from the entry of new market participants,diversity, such as banks, accounting firmsrace and insurance carriers themselves, offering risk management or transfer services.A particular area of competitive pressure is market-derived income (MDI), which is revenue that insurance intermediaries increasingly have been obtaining from insurance carriers. Contingent commissions are one type of MDI where insurance carriers remunerate intermediates based on either the volume or profitability of risks placed with the carrier. While we have recently stated that we will apply a set of criteria to evaluate on a case-by-case basis whether we will take MDI, and in what form, to date we have not accepted contingent commissions from carriers other than in our Human Capital practice. To our knowledge, we are the only insurance broker that takes this stance. To the extent that our competitors accept volume- or profit-based continent commissions we may suffer lower revenue, reduced operating margins, and loss of market share which could materially and adversely affect our business.12RegulationOur business activities are subject to legal requirements and governmental and quasi-governmental regulatory supervision in virtually all countries in which we operate. Also, such regulations may require individual or company licensing to conduct our business activities. While these requirements may vary from location to location they are generally designed to protect our clients by establishing minimum standards of conduct and practice, particularly regarding the provision of advice and product information as well as financial criteria. Our three most significant regulatory regions are described below:United StatesOur activities in connection with insurance brokerage services within the United States are subject to regulation and supervision by state authorities. Although the scope of regulation and form of supervision may vary from jurisdiction to jurisdiction, insurance laws in the United States are often complex and generally grant broad discretion to supervisory authorities in adopting regulations and supervising regulated activities. That supervision generally includes the licensing of insurance brokers and agents and the regulation of the handling and investment of client funds held in a fiduciary capacity. Our continuing ability to provide insurance brokerage in the jurisdictions in which we currently operate is dependent upon our compliance with the rules and regulations promulgated from time to time by the regulatory authorities in each of these jurisdictions.European UnionThe European Union Insurance Mediation Directive introduced rules to enable insurance and reinsurance intermediaries to operate and provide services within each member state of the EU on a basis consistent with the EU single market and customer protection aims. Each EU member state in which we operate is required to ensure that the insurance and reinsurance intermediaries resident in their country are registered with a statutory body in that country and that each intermediary meets professional requirements in relation to their competence, good repute, professional indemnity cover and financial capacity.United KingdomIn the United Kingdom, our business was previously regulated by the Financial Services Authority ('FSA'). Under legislation enacted by the UK Parliament, the regulation of our business transitioned from the FSA to the Financial Conduct Authority ('FCA') on April 1, 2013. The FCA has a wide range of rule-making, investigatory and enforcement powers, and conducts monitoring visits to assess our compliance with regulatory requirements.The FCA has a sole strategic objective: to protect and enhance confidence in the UK financial system. Its operational objectives are to: secure an appropriate degree of protection for consumers; promote efficiency and choice in the market for financial services; and protect and enhance the integrity of the UK financial system. The FCA also has a duty to act in a way that promotes competition, and to minimize the extent to which regulated businesses may be used for a purpose connected with financial crime. Finally, the FCA has new powers in product intervention. For instance, it can instruct firms to withdraw or amend misleading financial promotions.OtherCertain of our activities are governed by other regulatory bodies, such as investment and securities licensing authorities. In the United States, our Willis Capital Markets & Advisory business operates through our wholly-owned subsidiary Willis Securities, Inc., a US-registered broker-dealer and investment advisor, member FINRA/SIPC, primarily in connection with investment banking-related services and advising on alternative risk financing transactions. Willis Capital Markets provides advice on securities or investments in the EU through our wholly-owned subsidiary Willis Capital Markets & Advisory Limited, which is authorized and regulated by the FCA.Our failure, or that of our employees, to satisfy the regulators that we comply with their requirements or the legal requirements governing our activities, can result in disciplinary action, fines, reputational damage and financial harm.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 United States and United Kingdom. We do not consider that these regulatory requirements adversely affect our competitive position.See Part I, Item 1A-Risk Factors ‘Legal and Regulatory Risks’ for discussion of how actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate may have an adverse effect on our business.13EmployeesAs of December 31, 2013 we had approximately 18,000 employees worldwide of whom approximately 3,700 were employed in the United Kingdom and 6,100 in the United States, with the balance being employed across the rest of the world. In addition, our associates had approximately 3,700 employees, all of whom were located outside the United Kingdom and the United States.14Item1A - Risk FactorsRisks Relating to our Business and the Insurance IndustryThis section describes material risks affecting the Group’s business. These risks could materially affect the Group’s business, its revenues, operating income, net income, net assets, liquidity and capital resources and ability to achieve its financial targets and, accordingly should be read in conjunction with any forward-looking statements in this Annual Report on Form 10-K.Competitive RisksWorldwide economic conditions could have an adverse effect on our business, prospects, operating results, financial condition and cash flows.Our business and operating results are materially affected by worldwide economic conditions. Current global economic conditions, including those associated with the ongoing Eurozone crisis, coupled with low customer and business confidence may have a significant negative impact on the buying behavior of some of our clients as their businesses suffer from these conditions. Since 2008, many of our operations have been impacted by the weakened economic climate. A growing number of insolvencies associated with an economic downturn could adversely affect our brokerage business through the loss of clients or by hampering our ability to place insurance and reinsurance business. In addition, an increase in mergers and acquisitions can also result in the loss of clients. While it is difficult to predict the consequences of any further deterioration in global economic conditions on our business, any significant reduction or delay by our clients in purchasing insurance or making payment of premiums could have a material adverse impact on our financial condition and results of operations. In addition, the potential for a significant insurer to fail, be downgraded or withdraw from writing certain lines of insurance coverages that we offer our clients could negatively impact overall capacity in the industry, which could then reduce the placement of certain lines and types of insurance and reduce our revenues and profitability. The potential for an insurer to fail or be downgraded could also result in errors and omissions claims by clients.The credit and economic conditions of certain European Union countries remain fragile and may contribute to instability in the global credit and financial markets. If credit conditions worsen or financial market volatility increases in the Eurozone, it is possible that it could have a negative effect on the global economy as a whole, and our business, operating results and financial condition. If the Eurozone crisis continues or further deteriorates, there will likely be a negative effect on our European business, as well as the businesses of our European clients. Further, were the Euro to be withdrawn entirely, or the Eurozone were to be dissolved as a common currency area, the legal and contractual consequences for holders of Euro-denominated obligations would be determined by laws in effect at such time. A significant devaluation of the Euro would cause the value of our financial assets that are denominated in Euros to be significantly reduced. Any of these conditions could ultimately harm our overall business, prospects, operating results, financial condition and cash flows.We may not be able to fully realize the anticipated benefits of our new growth strategy.At our 2013 Investor Conference, we stated that our goal is, over a medium-term period of five years, to deliver mid-teens total shareholder return, deliver consistent revenue growth in the mid-single digits and target revenue growth to outpace expense growth by more than 70 basis points. We emphasized that such results could fluctuate on a quarterly basis.In order to achieve these goals, we are implementing certain revenue growth strategies and continue to strive to manage our cost base. For example, we announced a series of actions that include, among other things, the appointments of new global industry and product heads, the creation of a new Global Human Capital & Benefits Practice, a geographic realignment of the firm’s leadership team in North America and the merger of our UK retail and Global Specialty businesses. In light of the potential operational risks associated with these new initiatives, 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. There can be no assurance that our actual results will meet these financial goals.We do not control the premiums on which our commissions are based, and volatility or declines in premiums may seriously undermine our profitability.We derive most of our revenues from commissions and fees for brokerage and consulting services and do not determine the insurance premiums on which our commissions are generally based. Commission levels generally follow the same trend as premium levels, as they are a percentage of the premiums paid by the insureds. Fluctuations in the premiums charged by the insurance carriers can therefore have a direct and potentially material impact on our results of operations. Due to the cyclical15nature of the insurance market and the impact of other market conditions on insurance premiums, commission levels may vary widely between accounting periods. A period of low or declining premium rates, generally known as a 'soft' or 'softening' market, generally leads to downward pressure on commission revenues and can have a material adverse impact on our commission revenues and operating margin. A 'hard' or 'firming' market, during which premium rates rise, generally has a favorable impact on our commission revenues and operating margin. Rates, however, vary by geography, industry and client segment. We have been and continue to be negatively impacted by soft market conditions across certain sectors and geographic regions. In addition, insurance carriers may seek to reduce their expenses by reducing the commission rates payable to insurance agents or brokers such as ourselves. The reduction of these commission rates, along with general volatility and/or declines in premiums, may significantly undermine our profitability.Competition in our industry is intense, and if we are unable to compete effectively, we may suffer lower revenue, reduced operating margins and lose market share which could materially and adversely affect our business.We face competition in all fields in which we operate, based on global capability, product breadth, innovation, quality of service and price. We compete with Marsh & McLennan and Aon, the two major global providers of global risk management services, as well as with numerous specialist, regional and local firms. Competition for business is intense in all of our business lines and in every insurance market, and Marsh & McLennan and Aon have substantially greater market share than we do. Competition on premium rates has also exacerbated the pressures caused by a continuing reduction in demand in some classes of business. 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. Additional competitive pressures arise from the entry of non-traditional market participants, such as banks, accounting firms and insurance carriers themselves, offering risk management or transfer services. If we are unable to compete effectively, we may suffer lower revenue, reduced operating margins and lose market share which could materially and adversely affect our business.The loss of our Chief Executive Officer or a number of our senior management or a significant number of our brokers could significantly impede our financial plans, growth, marketing and other objectives.The loss of our Chief Executive Officer, a number of our senior management or a significant number of our brokers could significantly impede our financial plans, growth, marketing and other objectives. Our success depends to a substantial extent not only on the ability and experience of our Chief Executive Officer, Dominic Casserley, and other members of our senior management, but also on the individual brokers and teams that service our clients and maintain client relationships. The insurance and reinsurance brokerage industry has in the past experienced intense competition for the services of leading individual brokers and brokerage teams, and we have lost key individuals and teams to competitors.gender. We believe that our future success will depend in part oncommitment is demonstrated by the current structure of our ability to attract and retain additional highly skilled and qualified personnel and to expand, train and manage our employee base. We may not continue to be successful in doing so because the competition for qualified personnel in our industry is intense.Investment in innovative product offerings may fail to yield sufficient return to cover their investment.From time to time, we may enter new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, including the investment of significant time and resources, the possibility that these efforts will be unprofitable,Board and the risk of additional liabilities associated with these efforts. Failure to successfully manage these risks in the developmentvaried backgrounds and implementation of new lines of business and new products and services could have a material adverse effect on our business, financial condition or results for operations. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful implementation of a new line of business. In addition, we can provide no assurance that the entry into new lines of business or development of new products and services will be successful.We are continually developing and investing in new and innovative offerings that we believe will address needs that we identify in the market. Nevertheless, the ability of these efforts to produce meaningful value is dependent on a number of other factors, some of which are outside of our control. For example, we have recently launched G360, a suite of facilities for our specialty insurance clients which we expect will provide faster placement and claims agreements for our clients, and promote greater price competition in the specialty insurance market. The success of G360 will depend on client participation, market reaction as well as other factors both inside and outside our control. Additionally, our Global Human Capital and Benefits Practice has invested substantial time and resources in launching The Willis Advantage under the belief that this exchange will serve a useful role to help corporations and individuals in the US manage their growing health care expenses. But in order for The16Willis Advantage to be successful, health care insurers and corporate and individual participants must deem it suitable to participate in, and such decisions are based on their own particular circumstances.Our business performance and growth plans could be negatively affected if we are not able to effectively apply technology to drive value for our clients through technology-based solutions or gain internal efficiencies through the effective application of technology and related tools.Our success depends, in part, on our ability to develop and implement technology solutions that anticipate and keep pace with rapid and continuing changes in technology, industry standards and client preferences. We may not be successful in anticipating or responding to these developments in a timely and cost-effective manner, and our ideas may not be accepted in the marketplace. Additionally, the effort to gain technological expertise and develop new technologies in our business requires us to incur significant expenses. Our competitors are seeking to develop competing technologies, and their success in this space may impact our ability to differentiate our services to our clients through the use of unique technological solutions. If we cannot offer new technologies as quickly as our competitors or if our competitors develop more cost-effective technologies, it could have a material adverse effect on our ability to obtain and complete client engagements.Legal and Regulatory RisksOur 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 may have an adverse effect on our business.Our activities are subject to extensive regulation under the laws of the United States, the United Kingdom, the European Union and its member states, and the other jurisdictions in which we operate. Indeed, over the last few years, there has been a substantial increase in focus on and developments in these laws and regulations. Compliance with laws and regulations that apply to our operations is complex and may increase our cost of doing business. These laws and regulations include insurance and financial industry regulations, economic and trade sanctions and laws against financial crimes, including client money and money laundering, bribery or other corruption, such as the US Foreign Corrupt Practices Act, the UK Bribery Act and other anti-competitive regulations. In most jurisdictions, governmental and regulatory authorities have the ability to interpret and amend these laws and regulations and impose penalties for non-compliance, including sanctions, civil remedies, monetary fines, injunctions, revocation of licenses or approvals, suspension of individuals, limitations on business activities or redress to clients. While we believe that we currently maintain good relationships with our regulators and that our current systems and controls are adequate and in accordance with all applicable laws and regulations, we cannot assure that such systems and controls will prevent any violations of applicable laws and regulations.Our business, results of operations, financial condition or liquidity may be materially adversely affected by actual and potential claims, lawsuits, investigations and proceedings.We are subject to various actual and potential claims, lawsuits, investigations and other proceedings relating principally to alleged errors and omissions in connection with the placement of insurance and reinsurance in the ordinary course of business. Because we often assist our clients with matters, including the placement of insurance coverage and the handling of related claims, involving substantial amounts of money, errors and omissions claims against us may arise which allege our potential liability for all or part of the amounts in question.Claimants can seek large damage awards and these claims can involve potentially significant defense costs. Such claims, lawsuits and other proceedings could, for example, include allegations of damages for our employees or sub-agents improperly failing to place coverage or notify claims on behalf of clients, to provide insurance carriers with complete and accurate information relating to the risks being insured or to appropriately apply funds that we hold for our clients on a fiduciary basis. Errors and omissions claims, lawsuits and other proceedings arising in the ordinary course of business are covered in part by professional indemnity or other appropriate insurance. The terms of this insurance vary by policy year and self-insured risks have increased significantly in recent years. In respect of self-insured risks, we have established provisions against these items which we believe to be adequate in the light of current information and legal advice, and we adjust such provisions from time to time according to developments. Our business, results of operations, financial condition and liquidity may be adversely affected if in the future our insurance coverage proves to be inadequate or unavailable or there is an increase in liabilities for which we self-insure. Our ability to obtain professional indemnity insurance in the amounts and with the deductibles we desire in the future may be adversely impacted by general developments in the market for such insurance or our own claims experience.We are also subject to actual and potential claims, lawsuits, investigations and proceedings outside of errors and omissions claims. An example of material claims for which we are subject that are outside of the error and omissions claims context relate17to those arising out of the collapse of The Stanford Financial Group, for which we acted as brokers of record on certain lines of insurance.The ultimate outcome of these matters cannot be ascertained and liabilities in indeterminate amounts may be imposed on us. It is thus possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by an unfavorable resolution of these matters. In addition, these matters continue to divert management and personnel resources away from operating our business. Even if we do not experience significant monetary costs, there may also be adverse publicity associated with these matters that could result in reputational harm to the insurance brokerage industry in general or to us in particular that may adversely affect our business, client or employee relationships.Accepting market derived income (MDI) may cause regulatory or other scrutiny, which may have a material and adverse effect on our business, and our position on contingent commissions may put us at a competitive disadvantage.Insurance intermediaries have traditionally been remunerated by commission or fees paid by clients. Intermediaries also obtain revenue from insurance carriers. This is commonly known as market derived income or 'MDI'. MDI takes a variety of forms, including volume- or profit-based contingent commissions, facilities administration charges, business development agreements, and fees for providing certain data to carriers. We have recently stated that we will apply a set of criteria to evaluate on a case-by-case basis whether we will take MDI, and in what form. MDI creates various risks. Intermediaries have a duty to act in the best interests of their clients and payments from carriers can incentivize intermediaries to put carriers’ interests ahead of their clients. Accordingly, MDI may be subject to scrutiny by various regulators under conflict of interest, anti-trust, unfair competition, and anti-bribery laws and regulations. While accepting MDI is a lawful and acceptable business practice, and while we will comply with all applicable laws and regulations, we cannot predict whether our position will cause regulatory or other scrutiny.Additionally, as noted above, contingent commissions are a form of MDI. Over the past five years, other than in our Human Capital practice, we have not accepted contingent commissions from carriers. To our knowledge, we are the only insurance broker that takes this stance. If we continue to not accept contingents and our competitors accept volume- or profit-based continent commissions we may suffer lower revenue, reduced operating margins, and loss of market share which could materially and adversely affect our business.IT and Operational RisksInterruption to or loss of our information processing capabilities or failure to effectively maintain and upgrade our information processing systems could cause material financial loss, loss of human resources, regulatory actions, reputational harm or legal liability.Our business depends significantly on effective information systems. Our capacity to service our clients relies on effective storage, retrieval, processing and management of information. Our information systems also rely on the commitment of significant resources to maintain and enhance existing systems, develop and create new systems and products in order to keep pace with continuing changes in information processing technology or evolving industry and regulatory standards and to be at the forefront of a range of technology relevant to our business.If the information we rely on to run our business were found to be inaccurate or unreliable or if we fail to maintain effective and efficient systems (including through a telecommunications failure, failure to replace or update redundant or obsolete computer applications or software systems or if we experience other disruptions), this could result in material financial loss, regulatory action, reputational harm or legal liability.18Our inability to successfully recover should we experience a disaster or other significant disruption to business continuity could have a material adverse effect on our operations.Our ability to conduct business may be adversely affected, even in the short-term, by a disruption in the infrastructure that supports our business and the communities where we are located. This may include a disruption caused by restricted physical site access, terrorist activities, disease pandemics, or outages to electrical, communications or other services used by our company, our employees or third parties with whom we conduct business. Although we have certain disaster recovery procedures in place and insurance to protect against such contingencies, such procedures may not be effective and any insurance or recovery procedures may not continue to be available at reasonable prices and may not address all such losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide services. Our inability to successfully recover should we experience a disaster or other significant disruption to business continuity could have a material adverse effect on our operations.Data security breaches or improper disclosure of confidential company or personal data could result in material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.Computer viruses, hackers and other external hazards could expose confidential company and personal data systems to security breaches. Additionally, one of our significant responsibilities is to maintain the security and privacy of our clients’ confidential and proprietary information and the personal data of their employees. These increased risks, and expanding regulatory requirements regarding data security, could expose us to data loss, monetary and reputational damages and significant increases in compliance costs.We maintain policies, procedures and technological safeguards designed to protect the security and privacy of this information in our database. However, we cannot entirely eliminate the risk of data security breaches, improper access to or disclosure of confidential company or personally identifiable information. Our technology may fail to adequately secure the private information we maintain in our databases and protect it from theft, computer viruses, hackers or inadvertent loss. In such circumstances, we may be held liable to our clients, which could result in legal liability or impairment to our reputation resulting in increased costs or loss of revenue. Further database privacy, identity theft, and related computer and internet issues are matters of growing public concern and are subject to frequently changing rules and regulations. Our failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in legal liability or impairment to our reputation in the marketplace.Our non-core operations, such as our Willis Capital Markets & Advisory business, pose certain underwriting, advisory or reputational risks and can have a significant adverse impact on our financial results.We provide a broad range of brokerage, reinsurance and risk management consulting services to our clients worldwide. We also engage in certain non-core operations. For example, our Willis Capital Markets & Advisory business provides advice to insurance and reinsurance companies on a broad array of mergers and acquisition transactions as well as capital markets products, including acting as underwriter or agent for primary issuances, operating a secondary insurance-linked securities trading desk and engaging in general capital markets and strategic advisory work. These operations may pose certain underwriting, advisory or reputational risks to our core business.In addition, these non-core operations, although not material to the Group as a whole may, in any period, have a material effect on our results of operations. For example, our Willis Capital Markets & Advisory business is transaction-based which can cause results to differ from period-to-period. In another example, our financial results in 2011 and first two quarters of 2012 were adversely impacted by the significant deterioration of the financial results of our Loan Protector business driven by the loss of clients through attrition and M&A activity, industry-wide commission pressures and a slowdown in foreclosures.Financial RisksOur outstanding debt could adversely affect our cash flows and financial flexibility.We had total consolidated debt outstanding of approximately $2.3 billion as of December 31, 2013 and our 2013 interest expense was $126 million. 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 debt could adversely affect our cash flows and this level of indebtedness may:require us to dedicate a significant portion of our cash flow from operations to payments on our debt, thereby reducing the availability of cash flow to fund capital expenditures, to pursue other acquisitions or investments in new technologies, to pay dividends and for general corporate purposes;19increase our vulnerability to general adverse economic conditions, including if we borrow at variable interest rates, which makes us vulnerable to increases in interest rates generally;limit our flexibility in planning for, or reacting to, changes or challenges relating to our business and industry; andput us at a competitive disadvantage against competitors who have less indebtedness or are in a more favorable position to access additional capital resources.The termsskill sets of our current financings alsodirectors and nominees, which include certain limitations. For example,three women, two persons of Asian descent and a mix of American, British, Irish and Spanish citizens.agreements relating tokey qualifications, attributes, skills and experiences discussed above that were considered by the debt arrangements and credit facilities contain numerous operating and financial covenants, including requirements to maintain minimum ratiosGovernance Committee for each person nominated for election at our 2014 Annual General Meeting 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.A failure to comply with the restrictions under our credit facilities and outstanding notes could result in a default under the financing obligations or could require us to obtain waivers from our lenders for failure to comply with these restrictions. The occurrenceShareholders. (The absence of a defaultparticular bullet-point for a director does not mean that remains uncuredthe director does not possess other qualifications or the inability to secure a necessary consent or waiver could causeskills in that area).obligations with respect to our debt to be accelerateddirectors and have a material adverse effect on our business, financial condition or results of operations.Our pension liabilities may increase which could require us to make additional cash contributions to our pension plans reducing the cash available for other uses.We have two principal defined benefit plans: one in the United Kingdom and the other in the United States, and in addition, we have several smaller defined benefit pension plans in certain other countries in which we operate. Total cash contributions to these defined benefit pension plans in 2013 were $150 million, including employees' salary sacrifice contributions. In 2014,director nominees:expects to make cash contributions of approximately $134 million, including employees' salary sacrifice contributions, to these pension plans, although we may elect to contribute more. Future estimates are based on certain assumptions, including discount rates, interest rates, mortality, fair value of assetsas CEO and expected return on plan assets.In 2012, we agreed a revised funding strategy with the UK plan's trustee under which we are committed to make additional cash contributions in the event that our adjusted EBITDA exceeds certain thresholds, or we make exceptional returns for our shareholders, including share buybacks or special dividends. As a result, we may be committed to make additional contributions through to 2017 based on the prior year's performance. In addition, during 2014 we will be required to negotiate a new funding arrangement with the UK pension trustee, which may further change the contributions we are required to make during 2014 and beyond.We have taken actions to manage our pension liabilities, including closing our UK and US plans to new participants and restricting final pensionable salaries. Future benefit accruals in the US pension plan were also stopped, or frozen, on May 15, 2009. Nevertheless, the determination of pension expense and pension funding is based on a variety of rules and regulations. Changes in these rules and regulations could impact the calculation of pension plan liabilities and the valuation of pension plan assets. They may also result in higher pension costs, additional financial statement disclosure, and accelerate and increase the need to fully fund our pension plans through increased cash contributions. Further, a significant decline in the value of investments that fund our pension plan, if not offset or mitigated by a decline in our liabilities, may significantly alter the values and actuarial assumptions used to calculate our future pension expense and we could be required to fund our plan with significant additional amounts of cash. In addition to the critical assumptions described above, our plans use certain assumptions about the life expectancy of plan participants and surviving spouses. Periodic revision of those assumptions can materially change the present value of future benefits and therefore the funded status of the plans and the resulting periodic pension expense. Changes in our pension benefit obligations, the related net periodic costs or credits, and the required level of future cash contributions, may occur in the future due to any variance of actual results from our assumptions and changes in the number of participating employees. The need to make additional cash contributions may reduce our financial flexibility and increase liquidity risk by reducing the cash available to meet our other obligations, including the payment obligations under our credit facilities and other long-term debt, or other needs of our business.We could incur substantial losses, including with respect to our own cash and fiduciary cash held on behalf of insurance companies and clients, if one of the financial institutions we use in our operations failed.The deterioration of the global credit and financial markets has created challenging conditions for financial institutions, including depositories and the financial strength of these institutions may continue to decline. We maintain significant cash balances at various US depository institutions that are significantly in excess of the US Federal Deposit Insurance Corporation insurance limits. We also maintain significant cash balances in foreign financial institutions. A significant portion of this fiduciary cash is held on behalf of insurance companies or clients. If one or more of the institutions in which we maintain20significant cash balances were to fail, our ability to access these funds might be temporarily or permanently limited, and we could face a material liquidity problem and potentially material financial losses. We could also be liable to claims made by the insurance companies or our clients regarding the fiduciary cash held on their behalf.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 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. In addition, certain downgrades would trigger a step-up in interest rates under the indentures for our 6.200% senior notes due 2017 and our 7.000% senior notes due 2019, which would increase our interest expense. If we need to raise capital in the future, any credit rating downgrade could negatively affect our financing costs or access to financing sources. This may in turn impact the assumptions when performing our goodwill impairment testing which may reduce the excess of fair value over carrying value of the reporting units.In addition, under the indenture for our 4.625% senior notes due 2023 and our 6.125% senior notes due 2043, if we experience a ratings decline together with a change of control event, we would be required to offer to purchase our 4.625% senior notes due 2023 and our 6.125% senior notes due 2043 from holders unless we had previously redeemed those notes. We may not have sufficient funds available or access to funding to repurchase tendered notes in that event, which could result in a default under the notes. Any future debt that we incur may contain covenants regarding repurchases in the event of a change of control triggering event.We face certain risks associated with the acquisition or disposition of businesses and lack of control over investments in associates.In pursuing our corporate strategy, we may acquire or dispose of or exit businesses or reorganize existing investments. For example, we have a call option to acquire 100 percent of the capital of Gras Savoye. The success of our overall acquisition and disposition strategy is dependent upon our ability to identify appropriate opportunities, negotiate transactions on favorable terms and ultimately complete such transactions. Once we complete acquisitions or reorganizations there can be no assurance that we will realize the anticipated benefits of any transaction, including revenue growth, operational efficiencies or expected synergies. For example, if we fail to recognize some or all of the strategic benefits and synergies expected from a transaction, goodwill and intangible assets may be impaired in future periods.In addition, we may not be able to integrate acquisitions successfully into our existing business, and we could incur or assume unknown or unanticipated liabilities or contingencies, which may impact our results of operations. If we dispose of or otherwise exit certain businesses, there can be no assurance that we will not incur certain disposition related charges, or that we will be able to reduce overheads related to the divested assets.We also own an interest in a number of associates, such as Gras Savoye, where we do not exercise management control and we are therefore unable to direct or manage the business to realize the anticipated benefits that we can achieve through full integration.If our goodwill becomes impaired, we may be required to record significant charges to earnings.We have a substantial amount of goodwill on our balance sheet as a result of acquisitions we have completed. We review goodwill for impairment annually or whenever events or circumstances indicate impairment may have occurred.Our annual goodwill impairment analysis is performed each year at October 1. In fiscal year 2012, we recognized an impairment charge of $492 million in the Consolidated Statement of Operations in relation to our North American business. At October 1,director on January 7, 2013 our analysis showed that the estimated fair values of each of our reporting units were in excess of the carrying values and therefore did not result in any impairment charge in 2013.Application of the impairment test requires judgment, including the identification of reporting units, assignment of assets, liabilities and goodwill to reporting units and determination of fair value of each reporting unit. Notwithstanding the fact that we recognized an impairment charge in fiscal year 2012 for our North American reporting unit, the risk remains that a significant deterioration in a key estimate or assumption or a less significant deterioration to a combination of assumptions or the sale of a part of a reporting unit could result in an impairment charge in the future, which could have a significant adverse impact on our reported earnings.21For further information on our testing for goodwill impairment, see ‘Critical Accounting Estimates’ under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.We are a holding company and, therefore, may not be able to receive dividends or other distributions in needed amounts from our subsidiaries.Willis Group Holdings is organizedcurrently serves as a holding company that conducts no business of its own. We are dependent upon dividends and other payments from our operating subsidiaries to meet our obligations for paying principal and interest on outstanding debt obligations, for paying dividends to shareholders and for corporate expenses. Legal and regulatory restrictions, foreign exchange controls, as well as operating requirements of our subsidiaries, may limit our ability to obtain cash from these subsidiaries. For example, Willis Limited, our UK brokerage subsidiary regulated by the FCA, is currently required to maintain $126 million in unencumbered and available funds, of which at least $79 million must be in cash, for regulatory purposes. In the event our operating subsidiaries are unable to pay dividends and make other payments to Willis Group Holdings, we may not be able to service debt, pay obligations or pay dividends on ordinary shares.International RisksOur significant non-US operations, particularly our London market operations, expose us to exchange rate fluctuations and various risks that could impact our business.A significant portion of our operations is conducted outside the United States. 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 dollars or remittance of dividends and other payments by foreign subsidiaries; hyperinflation in certain 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.We report our operating results and financial condition in US dollars. Our US operations earn revenue and incur expenses primarily in US 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. Outside the United States and our London market operations, we predominantly generate revenue and expenses in the local currency. The table gives an approximate analysis of revenues and expenses by currency in 2013. Euros Revenues 60% 8% 13% 19% Expenses 49% 25% 9% 17% Because of devaluations and fluctuations in currency exchange rates or the imposition of limitations on conversion of foreign currencies into US dollars, we are subject to currency translation exposure on the profits of our operations, in addition to economic exposure. Furthermore, the mismatch between pounds sterling revenues and expenses, together with any net sterling balance sheet position we hold in our US dollar denominated London market operations, creates an exchange exposure.For example, as the pound sterling strengthens, the US dollars required to be translated into pounds sterling to cover the net sterling expenses increase, which then causes our results to be negatively impacted. However, any net sterling asset we are holding will be more valuable when translated into US dollars. Given these facts, the strength of the pound sterling relative to the US dollar has in the past had a material negative impact on our reported results. This risk could have a material adverse effect on our business financial condition, cash flow and results of operations in the future.Where needed, we deploy a hedging strategy to mitigate part of our operating exposure to exchange rate movements, but such mitigating attempts may not be successful. For more information on this strategy, see Part II Item 8 - 'Note 26 Derivative Financial Instruments and Hedging Activities'.In conducting our businesses around the world, we are subject to political, economic, legal, market, nationalization, operational and other risks that are inherent in operating in many countries.In conducting our businesses and maintaining and supporting our global operations, we are subject to political, economic, legal, market, nationalization, operational and other risks. Our businesses and operations continue to expand into new regions throughout the world, including emerging markets. The possible effects of economic and financial disruptions throughout the world could have an adverse impact on our businesses. These risks include:the general economic and political conditions in foreign countries;22the imposition of controls or limitations on the conversion of foreign currencies or remittance of dividends and other payments by foreign subsidiaries;imposition of withholding and other taxes on remittances and other payments from subsidiaries;imposition or increase of investment and other restrictions by foreign governments;fluctuations in our effective tax rate;difficulties in controlling operations and monitoring employees in geographically dispersed and culturally diverse locations; the potential costs and difficulties in complying, or monitoring compliance, with a wide variety of foreign laws (some of which may conflict with US or other sources of law), laws and regulations applicable to insurance brokers and US business operations abroad, including rules relating to the conduct of business, trade sanctions administered by the US Office of Foreign Assets Control, the EU, the UK and the UN, and the requirements of the US Foreign Corrupt Practices Act as well as other anti-bribery and corruption rules and requirements in the countries in which we operate; andthe potential costs and difficulties in complying with local regulation for our operating subsidiaries across the globe.Legislative and regulatory action could materially and adversely affect us and our effective tax rate may increase.There is uncertainty regarding the tax policies of the jurisdictions where we operate (which include the potential legislative actions described below), and our effective tax rate may increase and any such increase may be material. Additionally, the tax laws of Ireland and other jurisdictions could change in the future, and such changes could cause a material change in our effective tax rate. For example, legislative action may be taken by the US Congress which, if ultimately enacted, could override tax treaties upon which we rely or could broaden the circumstances under which we would be considered a US resident, each of which could materially and adversely affect our effective tax rate and cash tax position. We cannot predict the outcome of any specific legislative proposals. However, if proposals were enacted that had the effect of limiting our ability to take advantage of tax treaties between Ireland and other jurisdictions (including the US), we could be subjected to increased taxation. In addition, any future amendments to the current income tax treaties between Ireland and other jurisdictions could subject us to increased taxation.Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities.It may not be possible to enforce court judgments obtained in the United States against us in Ireland based on the civil liability provisions of the US federal or state securities laws. In addition, there is some uncertainty as to whether the courts of Ireland would recognize or enforce judgments of US courts obtained against us or our directors or officers based on the civil liabilities provisions of the US federal or state securities laws or hear actions against us or those persons based on those laws. We have been advised that the United States currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by any US federal or state court based on civil liability, whether or not based solely on US federal or state securities laws, would not be directly enforceable in Ireland. While not directly enforceable, it is possible for a final judgment for the payment of money rendered by any US federal or state court based on civil liability to be enforced in Ireland through common law rules. However, this process is subject to numerous established principles and would involve the commencement of a new set of proceedings in Ireland to enforce the judgment.As an Irish company, Willis Group Holdings is governed by the Irish Companies Acts, which differ in some material respects from laws generally applicable to US corporations and shareholders, including, among others, differences relating to interested director and officer transactions and shareholder lawsuits. 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. Accordingly, holders of Willis Group Holdings securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States.Item 1B — Unresolved Staff CommentsThe Company had no unresolved comments from the SEC’s staff.23Item 2 — PropertiesWe own and lease a number of properties for use as offices throughout the world and believe that our properties are generally suitable and adequate for the purposes for which they are used. The principal properties are located in the United Kingdom and the United States. Willis maintains over 4.1 million square feet of space worldwide.LondonIn London we occupy a prime site comprising 491,000 square feet spread over a 28-story tower and adjoining 10-story building. We have a 25-year lease on this property which expires June 2032. We sub-let approximately 17,500 square feet of the 28-story tower to a third party. We also sub-let the 10-story adjoining building.North AmericaIn North America, outside of New York, Chicago and Nashville, we lease approximately 1.4 million square feet around 100 locations.New YorkIn New York, we occupy 205,000 square feet of office space at One World Financial Center under a 20-year lease, expiring September 2026.ChicagoIn Chicago, we occupy 140,000 square feet at the Willis Tower under a lease expiring February 2025.NashvilleIn Nashville, we occupy 160,000 square feet under a lease expiring April 2026.Rest of WorldOutside of North America and London we lease approximately 1.5 million square feet of office space in over 200 locations. Two of our properties in Ipswich, United Kingdom have liens on the land and buildings in connection with a revolving credit facility.Item 3 — Legal ProceedingsInformation regarding claims, lawsuits and other proceedings is set forth in Note 22 ‘Commitments and Contingencies’ to the Consolidated Financial Statements appearing under Part II, Item 8 of this report and incorporated herein by reference.Item 4 — Mine Safety DisclosuresNot applicable.24Part IIItem 5 —Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesShare DataOur shares have been traded on the New York Stock Exchange (‘NYSE’) under the symbol ‘WSH’ since June 11, 2001. The high and low sale prices of our shares, as reported by the NYSE, are set forth below for the periods indicated. High Low 2012: First Quarter $ 39.85 $ 33.81 Second Quarter $ 37.38 $ 34.24 Third Quarter $ 37.94 $ 34.11 Fourth Quarter $ 37.62 $ 31.98 2013: First Quarter $ 39.50 $ 33.89 Second Quarter $ 43.02 $ 37.86 Third Quarter $ 45.45 $ 40.10 Fourth Quarter $ 47.22 $ 42.15 2014: Through February 14, 2014 $ 45.38 $ 41.30 On February 14, 2014, the last reported sale price of our shares as reported by the NYSE was $41.46 per share. As of February 14, 2014 there were approximately 1,242 shareholders on record of our shares.DividendsWe normally pay dividends on a quarterly basis to shareholders of record on March 31, June 30, September 30 and December 31. The dividend payment dates and amounts are as follows:Payment Date $ Per Share January 13, 2012 $ 0.260 April 13, 2012 $ 0.270 July 13, 2012 $ 0.270 October 15, 2012 $ 0.270 January 15, 2013 $ 0.270 April 15, 2013 $ 0.280 July 15, 2013 $ 0.280 October 15, 2013 $ 0.280 January 15, 2014 $ 0.280 There are no governmental laws, decrees or regulations in Ireland which will restrict the remittance of dividends or other payments to non-resident holdersmember of the Company’s shares.25In circumstances where one of Ireland’s many exemptions from dividend withholding tax (‘DWT’) does not apply, dividends paid byExecutive Committee. Before joining the Company, will be subjecthe served as a senior partner of McKinsey & Company, which he joined in New York in 1983. During his 29 years at McKinsey & Company, Mr. Casserley was based in the U.S. for 12 years, Asia for five years, and, from 2000 until 2012, he worked across Europe while based in the London office. During his time at McKinsey & Company, Mr. Casserley led McKinsey’s Greater China Practice and its UK and Ireland Practice. Mr. Casserley was a member of McKinsey’s Shareholder Council, the firm’s global board, from 1999 to Irish DWT (currently 20 percent). Residents2012 and for four years served as the Chairman of its Finance Committee. Mr. Casserley is a graduate of Cambridge University.• International Business Experience — Mr. Casserley’s expertise in the global financial services industry, including experience with insurance companies, and the skill of capitalizing on the opportunities of expanding into new markets, was obtained during his 29-year tenure at McKinsey where he spent 17 years working in Asia, Europe and London and, during which time, he led the firm’s Greater China Practice and its UK and Ireland Practice. • CEO/Management Experience — Mr. Casserley has served as the Company’s current Chief Executive Officer since January 7, 2013. In addition to serving as a senior partner at McKinsey & Company he served on the company’s global board for over 10 years and served as Chairman of the Finance Committee of that board for four years. US should be exemptCompany’s Governance Committee and Compensation Committee. She was Group Vice President, Marketing for BP plc from Irish DWT provided relevant documentation supporting the exemption has been put in place. While the US-Ireland Double Tax Treaty contains provisions reducing the rate2001 to 2003. Prior to that she held various executive positions at BP and Amoco, including Group Vice President, Emerging Markets at BP; Senior Vice President, Sales and Operations at Amoco; and President of Irish DWT in prescribed circumstances, it should generally be unnecessary for US residents to relyAmoco Orient Oil Company. She currently serves on the provisionsBoard and the Governance Committee of this treaty due toMead Johnson Nutrition and Chemtura Corporation and the wide scopeCompensation Committees of exemptions from Irish DWT available under Irish domestic law. Irish income tax may also arise in respectMead Johnson Nutrition, Chemtura Corporation and Kraton Performance Polymers. She serves on the Executive Committee of dividends paid by the Company. However, US residents entitled to an exemption from Irish DWT generally have no Irish income tax liability on dividends.With respect to non-corporate US shareholders, certain dividends from a qualified foreign corporation may be subject to reduced ratesHouston Chapter of taxation. A foreign corporation is treatedthe Alzheimer’s Association and serves as a qualified foreign corporation with respect to dividends received from that corporationdirector on shares that are readily tradablethe National Board of the Alzheimer’s Association. Ms. Catalano formerly served on the boards of SSL International plc, Hercules Incorporated, Aviva plc and U.S. Dataworks and as an established securities marketadvisory board member of BT Global Services. Ms. Catalano holds a BS degree in the United States, such as our shares. Non-corporate US shareholders that do not meet a minimum holding period requirement for our shares during which they are not protectedBusiness Administration from the riskUniversity of loss or that elect to treatIllinois, Champaign-Urbana.• International Business — Ms. Catalano has significant executive experience in international business operations through her roles as: Group Vice President, Marketing at BP plc; Group Vice President, Emerging Markets at BP; Senior Vice President, Sales and Operations at Amoco; and President of Amoco Orient Oil Company. In 2001, Ms. Catalano was recognized by Fortune Magazine as being among the “Most Powerful Women in International Business.” • Marketing Experience — Ms. Catalano has over 25 years of experience in global marketing and operations. During her tenure as the head of marketing for BP plc, she was instrumental in the internal and external repositioning of the BP brand and was a primary voice behind the campaign to establish BP’s “Beyond Petroleum” positioning. She is also a frequent speaker on strategic and global branding. • Board and Committee Experience — Ms. Catalano has significant experience as a director and committee member from her service on other public company boards including her current service as a member of the Governance Committee of Mead Johnson Nutrition and Chemtura Corporation, the Compensation Committees of Mead Johnson Nutrition, Chemtura Corporation and Kraton Performance Polymers as well as her former service on the international company boards of SSL International plc and Aviva plc. dividend incomeBoard on April 26, 2006 and currently serves as ‘investment income’ pursuant to section 163(d)(4)the Chairman of the Code will not be eligible forCompany’s Risk Committee and a member of the reduced ratesExecutive Committee. He is a Chartered Certified Accountant and served as Chairman of taxation regardlessCompass Group PLC, a food and support services company, until his retirement from the position in February 2014. He also served as Chairman of our statusthe Nominating Committee of Compass Group PLC. He is a Senior Advisor to Credit Suisse and also a Director and Chairman of the Nominating Committee of Mainstream Renewable Power Limited, Chairman of the Advisory Board of the Energy Futures Lab of Imperial College London, President of Carers UK, Chairman of the Apprenticeship Ambassadors Network and Chairman and member of several board committees of• International Business and Board Experience — The United Kingdom is an important market for the Company. Sir Roy Gardner is a well-respected British businessman who began his career in 1963 and has held leadership positions at or held director positions on the boards of a number of UK and other European companies. • CEO/Management Experience — Sir Roy Gardner’s senior leadership roles include his position as former Chief Executive of Centrica plc for 9 1/2 years. Centrica plc is a large multinational utility company that is based in the United Kingdom but also has interests in North America. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. • Extensive Knowledge of the Company’s Business — Sir Roy Gardner’s experience on the Board, his financial background as a UK-Chartered Certified Accountant and his former service as the Chairman of the Company’s Compensation Committee provides him with an extensive knowledge of the Company’s business and allows him to serve as an effective Chairman of the Company’s Risk Committee. qualified foreign corporation. In addition,member of the rate reduction will not apply to dividends if the recipient ofCompany’s Audit Committee. He is a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. US shareholders should consult their own tax advisors regarding the application of these rules given their particular circumstances.Total Shareholder ReturnThe following graph demonstrates a five-year comparison of cumulative total returns for the Company, the S&P 500Chartered Accountant and a peer group compriseddirector of the Company, Aon Corporation, Arthur J. Gallagher & Co., Brown & Brown Inc., and Marsh & McLennan Companies, Inc. The comparison charts the performance of $100 invested in the Company, the S&P 500 and the peer group on December 31, 2008, assuming full dividend reinvestment.26Unregistered Sales of Equity Securities and Use of ProceedsDuring the quarter ended December 31, 2013, no shares were issued by the Company without registration under the Securities Act of 1933, as amended.Purchases of Equity Securities by the Issuer and Affiliated PurchasersThe Company is authorized to buy back its ordinary shares, by way of redemption, and will consider whether to do so from time to time based on many factors including market conditions. The Company is authorized to purchase up to one billion shares from time to time in the open market (such open market purchases would be effected as redemptions under Irish law) and it may also redeem its shares through negotiated trades with persons who are not affiliated with the Company as long as the cost of the acquisition of the Company's shares does not exceed $824 million. The Company intends to buy back $200 million in shares in 2014 to offset the increase in shares outstanding resulting from the exercise of stock options in 2013. The buybacks will be made in the open market or through privately-negotiated transactions, from time to time, depending on market conditions. The share buy back program may be modified, extended or terminated at any time by the Board of Directors.The information under Part III, Item 12 is incorporated herein by reference.27Item 6 —Selected Financial DataSelected Historical Consolidated Financial DataThe selected consolidated financial data presented below should be read in conjunction with the audited consolidated financial statementsLimited, a subsidiary of the Company, and the related notesa director and Item 7 — ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’ included elsewhere in this report.The selected historical consolidated financial data presented below as of and for eachmember of the five years ended December 31, 2013 have been derived from the audited consolidated financial statementsAudit and Remuneration Committees of the Company, which have been prepared in accordance with accounting principles generally accepted in the United StatesLangbar International Limited and of America (‘US GAAP’). Year ended December 31, 2013 2012 2011 2010 2009 (millions, except per share data) Statement of Operations Data Total revenues $ 3,655 $ 3,480 $ 3,447 $ 3,332 $ 3,253 Goodwill impairment charge — (492 ) — — — Operating income (loss) 685 (209 ) 566 753 690 Income (loss) from continuing operations before income taxes and interest in earnings of associates 499 (337 ) 239 587 516 Income (loss) from continuing operations 377 (433 ) 219 470 455 Discontinued operations, net of tax — — 1 — 4 Net income (loss) attributable to Willis Group Holdings $ 365 $ (446 ) $ 204 $ 455 $ 438 Earnings per share on continuing operations — basic 2.07 (2.58 ) 1.17 2.68 2.58 Earnings per share on continuing operations — diluted 2.04 (2.58 ) 1.15 2.66 2.57 Average number of shares outstanding — basic 176 173 173 170 168 — diluted 179 173 176 171 169 Balance Sheet Data (as of year end) Goodwill $ 2,838 $ 2,827 $ 3,295 $ 3,294 $ 3,277 Other intangible assets, net 353 385 420 492 572 14,800 15,112 15,728 15,850 15,625 Total equity 2,243 1,725 2,517 2,608 2,229 Long-term debt 2,311 2,338 2,354 2,157 2,165 Shares and additional paid-in capital 1,316 1,125 1,073 985 918 Total Willis Group Holdings stockholders’ equity 2,215 1,699 2,486 2,577 2,180 Other Financial Data Capital expenditures (excluding capital leases) $ 105 $ 133 $ 111 $ 83 $ 96 Cash dividends declared per share 1.12 1.08 1.04 1.04 1.04 _________________(i)The Company collects premiums from insureds and, after deducting its commissions, remits the premiums to the respective insurers; the Company also collects claims or refunds from insurers which it then remits to insureds. Uncollected premiums from insureds and uncollected claims or refunds from insurers (‘fiduciary receivables’) are recorded as fiduciary assets on the Company’s consolidated balance sheet. Unremitted insurance premiums, claims or refunds (‘fiduciary funds’) are also recorded within fiduciary assets.28Item 7 —Management’s Discussion and Analysis of Financial Condition and Results of OperationsThis discussion includes references to non-GAAP financial measures as defined inRegulation G of the rules of the Securities and Exchange Commission ('SEC'). Wepresent such non-GAAP financial measures, specifically, organic growth in commissionsand fees, adjusted operating margin, adjusted operating income, adjusted net incomefrom continuing operations and adjusted earnings per diluted share from continuingoperations, as we believe such information is of interest to the investment communitybecause it provides additional meaningful methods of evaluating certain aspects ofthe Company's operating performance from period to period on a basis that may not beotherwise apparent on a GAAP basis. Organic growth in commissions and fees excludesthe impact of acquisitions and disposals, period over period movements in foreign currency , andinvestment and other income from growth in revenues.Adjusted operating income, adjusted operating margin, adjusted net income from continuing operations andadjusted earnings per diluted share from continuing operations are calculated byexcluding the impact of certain specified items from operating income, net income or loss from continuingoperations, and earnings per diluted share from continuing operations, respectively, the most directly comparable GAAP measures. Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measuresshould be viewed in addition to, not in lieu of, the consolidated financialstatements for the year ended December 31, 2013.This discussion includes forward-looking statements, including under the headings 'Executive Summary', 'Liquidity andLondon Asia Capital Resources', 'Critical Accounting Estimates' and 'Contractual Obligations'. Please see 'Forward-Looking Statements' forcertain cautionary information regarding forward-looking statements and a list offactors that could cause actual results to differ materially from those predicted inthose statements.EXECUTIVE SUMMARYBusiness OverviewWe provide a broad range of insurance broking, risk management and consulting services to our clients worldwide and organize our business into three segments: Global, North America and International.Our Global business provides specialist brokerage and consulting services to clients worldwide arising from specific industries and activities including Aerospace; Energy; Marine; Construction, Property and Casualty; Financial and Executive Risks; Financial Solutions; Faber Global; Fine Art, Jewelry and Specie; Special Contingency Risks; Hughes-Gibbs; Willis Capital Markets & Advisory; Placement and Reinsurance.North America and International comprise: our retail operations and provide services to small, medium and large corporations; and the Human Capital practice, our largest product-based practice group, provides health, welfare and human resources consulting and brokerage services.In our capacity as advisor and insurance broker, we act as an intermediary between our clients and insurance carriers by advising our clients on their risk management requirements, helping clients determine the best means of managing risk, and negotiating and placing insurance with insurance carriers through our global distribution network.We derive most of our revenues from commissions and fees for brokerage and consulting services and do not determine the insurance premiums on which our commissions are generally based. Commission levels generally follow the same trend as premium levels as they are derived from a percentage of the premiums paid by the insureds. Fluctuations in these premiums charged by the insurance carriers can therefore have a direct and potentially material impact on our results of operations.Due to the cyclical nature of the insurance market and the impact of other market conditions on insurance premiums, commission revenues may vary widely between accounting periods. A period of low or declining premium rates, generally known as a 'soft' or 'softening' market, generally leads to downward pressure on commission revenues and can have a material adverse impact on our commission revenues and operating margin. A 'hard' or 'firming' market, during which premium rates rise, generally has a favorable impact on our commission revenues and operating margin. Rates, however, vary by geography, industry and client segment. As a result and due to the global and diverse nature of our business, we view rates holistically.29Market ConditionsMarket conditions in our industry are generally defined by factors such as the strength of the economies in the various geographic regions in which we serve around the world, insurance rate movements, and insurance and reinsurance buying patterns of our clients.The industry and market in general throughout 2011 and early 2012 experienced modest increase in catastrophe-exposed property insurance and reinsurance pricing levels driven by significant catastrophe losses including the Japanese earthquake and tsunami, the New Zealand earthquake and, late in 2012, Super Storm Sandy. Also during that period, direct carriers in North America, facing persistent low investment returns, started to modestly raise rates in certain products. This firming rate environment, however, generally did not extend beyond North America to impact our International retail business.Early in 2013 the reinsurance market was generally flat, however, as the year progressed we saw changing market sentiment driven by changes in the sources of capital and increases in capital supply in the reinsurance market, most notably within the North American catastrophe-exposed property market. The influx of third party capital coupled with changes to reinsurance buying patterns and regulatory complexity is leading to growing complexity in the reinsurance market and a softening of prices.This pattern of new capacity and market entrants coupled with strong underwriting performance in 2013, due to the absence of natural and man-made catastrophes, means that the trend of price softening is continuing as we enter 2014 and is extending to other lines of business, not just catastrophe exposed property.The outlook for our business, operating results and financial condition continues to be challenging due to the global economic condition. There are signs of improving conditions both in the US, and within certain European Union countries, including a return to sustained GDP growth in certain countries. If conditions in the Global economy, including the US, the UK and the Eurozone deteriorate, there will likely be a negative effect on our business as well as the businesses of our clients.In the face of this challenging economic environment we have adopted a strategy to invest selectively in growth areas, defined by geography, industry sector and client segment, and to better align our three segments so as to, among other things, bring our clients greater access to the Company's specialty areas and analytical capabilities. Our growth strategyplc. He also involves increasing our investment in, and deployment of, our analytical capabilities.Financial PerformanceConsolidated Financial Performance2013 compared to 2012Total revenues in 2013 of $3,655 million increased by $175 million, or 5.0 percent, compared to 2012. This included organic growth in commissions and fees of 4.9 percent, and 0.5 percent growth from acquisitions and disposals. Organic growth was achieved in all three of our operating segments led by Global with 5.6 percent. Our North America operations reported organic growth of 4.9 percent, which included a $5 million positive revenue recognition adjustment. Our International operations achieved organic growth of 4.1 percent despite recognizing a $15 million negative revenue recognition adjustment. Foreign currency movements had a negative $12 million or 0.3 percent impact on commissions and fees in 2013.Total expenses for 2013 of $2,970 million were $719 million or 19.5 percent lower compared to 2012.The 2013 total expenses included $46 million related to the Expense Reduction Initiative (see 'Expense Reduction Initiative' section below) conducted earlier in the year. The 2012 total expenses included a $492 million non-cash goodwill impairment charge related to our North American reporting unit, a $200 million write-off of unamortized cash retention awards following the decision to eliminate the repayment requirement of past awards, and a $252 million expense related to the accrual for 2012 cash bonuses paid in 2013. Foreign currency movements had a $9 million positive impact on total expenses in 2013.Excluding the items noted above, total expenses in 2013 were $188 million, or 6.8 percent, higher than in 2012. The largest driver of this was the increase in salaries and benefits due to annual salary reviews, higher charges for share-based compensation and new hires and investments in targeted businesses and geographies. In addition to these, we recorded higher incentives as a result of growth in commissions and fees, and the change in remuneration policy. Other operating expenses also increased due to travel, accommodation and client entertaining costs to support business development, marketing costs, strategic review charges and higher professional fees.30The Company incurred a loss on extinguishment of debt of $60 million from the refinancing that was completed during 2013.The tax rate for the full year was affected by an incremental US tax expense of $9 million recorded after taking into account the impact of adjustments to the valuation allowance placed against our US deferred tax assets.Earnings from associates were down $5 million, net of tax, mainly due to costs of a reorganization program in our principal associate, Gras Savoye.Net income attributable to Willis shareholders from continuing operations was $365 million or $2.04 per diluted share in 2013 compared to a loss of $446 million or $2.58 per diluted share in 2012. The $811 million increase in net income compared to 2012 can be attributed primarily to the non-recurrence of the 2012 items discussed above and growth in commissions and fees partially offset by growth in expenses.2012 compared to 2011Total revenues in 2012 of $3,480 million increased by $33 million, or 1.0 percent, compared to 2011, including a $59 million or 1.7 percent negative impact from movements in foreign exchange. Organic growth in commissions and fees of 3.1 percent was driven by our International and Global operations. Our North America operations reported a decline of 0.6 percent in commissions and fees, due to lower revenues generated by Loan Protector, a specialty business acquired as part of the HRH business, and the continued adverse impact of difficult economic conditions in the US.Total expenses in 2012 of $3,689 million increased $808 million compared to 2011, primarily due to the recognition of a $492 million non-cash goodwill impairment charge related to our North American reporting unit, a $200 million write-off of unamortized cash retention awards following the decision to eliminate the repayment requirement of past awards, and a $252 million expense related to the accrual for 2012 cash bonuses paid in 2013.Excluding these expenses, total operating expenses declined $136 million, or 4.7 percent, principally due to $180 million expense recognized in 2011 related to the Operational Review and favorable movements in foreign exchange partially offset by increases in salary and benefits expenses linked to annual pay reviews, new hires and investments in targeted businesses and geographies.Net loss attributable to Willis shareholders from continuing operations was $446 million or a loss of $2.58 per diluted share in 2012 compared to a profit of $203 million or $1.15 per diluted share in 2011. The $649 million decrease in net income compared to 2011 primarily reflects the increase in total expenses described above and the $113 million charge to establish a valuation allowance against deferred tax assets in our US operations, partially offset by the non-recurrence of the $131 million post-tax cost in 2011 relating to the make-whole amountsserves on the repurchaseInternational Advisory Committee for GTECH S.p.A Sir Jeremy was a Member of Parliament for Richmond and redemption of $500 million of our senior debtBarnes from 1983 to 1997 and the write-off of related unamortized debt issuance costs and by the revenue growth achieved during the year. Net income in 2012 was also adversely impacted by a $7 million reduction in interest in earnings of associates, net of tax, mainly due to declining performance in our principal associate, Gras Savoye.31Adjusted Operating Income, Adjusted Net Income from Continuing Operations and Adjusted Earnings per Diluted Share from Continuing OperationsOur non-GAAP measures of adjusted operating income, adjusted net income from continuing operations and adjusted earnings per diluted share from continuing operations are calculated by excluding the impact of certain items (as detailed below) from operating income (loss), net income (loss) from continuing operations, and earnings per diluted share from continuing operations, respectively, the most directly comparable GAAP measures.The following items are excluded from operating income (loss) and net income (loss) from continuing operations as applicable:(i)the additional incentive accrual recognized following the replacement of annual cash retention awards with annual cash bonuses which will not feature a repayment requirement;(ii)write-off of unamortized cash retention awards following the decision to eliminate the repayment requirement on past awards;(iii)goodwill impairment charge;(iv)valuation allowance against deferred tax assets;(v)write-off of uncollectible accounts receivable balance and associated legal fees arising in Chicago due to fraudulent overstatement of commissions and fees;(vi)costs associated with the 2011 Operational Review;(vii)significant legal and regulatory settlements which are managed centrally;(viii)gains and losses on the disposal of operations;(ix)insurance recoveries;(x)make-whole amounts on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs;(xi)loss and fees related to the extinguishment of debt; and(xii)costs associated with the Expense Reduction Initiative.We believe that excluding these items, as applicable, from operating income (loss), net income (loss) from continuing operations and earnings per diluted share from continuing operations provides a more complete and consistent comparative analysis of our results of operations. We use these and other measures to establish Group performance targets and evaluate the performance of our operations.As set out in the tables below, adjusted operating margin at 20.0 percent in 2013, was down 160 basis points compared to 2012, while adjusted net income from continuing operations at $472 million was $18 million higher than in 2012. Adjusted earnings per diluted share from continuing operations was $2.64 in 2013, compared to $2.58 in 2012.32A reconciliation of reported operating income or loss, the most directly comparable GAAP measure, to adjusted operating income is as follows (in millions, except percentages): Year Ended December 31, 2013 2012 2011 Operating income (loss), GAAP basis $ 685 $ (209 ) $ 566 Excluding: — 252 — — 200 — — 492 — — 11 — — (10 ) — — 13 22 Net (gain) loss on disposal of operations (2 ) 3 (4 ) — — 180 — — 11 46 — — Fees related to the extinguishment of debt 1 — — Adjusted operating income $ 730 $ 752 $ 775 Operating margin, GAAP basis, or operating income (loss) as a percentage of total revenues 18.7 % (6.0 )% 16.4 % Adjusted operating margin, or adjusted operating income as a percentage of total revenues 20.0 % 21.6 % 22.5 % _________________(a)Additional incentive accrual recognized following the replacement of annual cash retention awards with annual cash bonuses which will not feature a repayment requirement.(b)Write-off of unamortized cash retention awards following the decision to eliminate the repayment requirement on past awards.(c)Non-cash charge recognized related to the impairment of the carrying value of the North America reporting unit's goodwill.(d)$11 million settlement with former partners related to the termination of a joint venture arrangement in India. In addition, a $1 million loss on disposal of operations was recorded related to the termination.(e)Insurance recovery related to the previously disclosed fraudulent activity in Chicago. See 'Correction of Commissions and Fees Overstatement Relating to 2011 and Prior Periods', below.(f)Write-off of uncollectible accounts receivable balance relating to periods prior to January 1, 2011, see 'Correction of Commissions and Fees Overstatement Relating to 2011 and Prior Periods', below.(g)Charge relating to the 2011 Operational Review, including $98 million of severance costs related to the elimination of approximately 1,200 positions for the full year 2011.(h)Regulatory settlement with the UK Financial Services Authority (FSA), now the Financial Conduct Authority (FCA).(i)Charge related to the assessment of the Company's organizational design. See 'Expense Reduction Initiative' section below.33A reconciliation of reported net income or loss from continuing operations and reported earnings per diluted share from continuing operations, the most directly comparable GAAP measures, to adjusted net income from continuing operations and adjusted earnings per diluted share from continuing operations is as follows (in millions, except per share data): 2013 2012 2011 2013 2012 2011 Net income (loss) from continuing operations, GAAP basis $ 365 $ (446 ) $ 203 $ 2.04 $ (2.58 ) $ 1.15 Excluding: — 175 — — 0.99 — — 138 — — 0.78 — — 458 — — 2.60 — — 11 — — 0.06 — — (6 ) — — (0.03 ) — — 8 13 — 0.05 0.08 Net (gain) loss on disposal of operations, net of tax ($1, $nil, $nil) (1 ) 3 (4 ) (0.01 ) 0.02 (0.02 ) — — 128 — — 0.73 — — 11 — — 0.06 Make-whole amounts on repurchase and redemption of Senior Notes and write-off of unamortized debt issuance costs, net of tax ($nil, $nil, $50) — — 131 — — 0.74 38 — — 0.21 — — Fees related to the extinguishment of debt, net of tax ($nil, $nil, $nil) 1 — — 0.01 — — Loss on extinguishment of debt, net of tax ($nil, $nil, $nil) 60 — — 0.34 — — Impact of US valuation allowance 9 113 — 0.05 0.64 — — — — — 0.05 — Adjusted net income from continuing operations $ 472 $ 454 $ 482 $ 2.64 $ 2.58 $ 2.74 179 173 176 _________________(a)Additional incentive accrual recognized following the replacement of annual cash retention awards with annual cash bonuses which will not feature a repayment requirement.(b)Write-off of unamortized cash retention awards debtor following the decision to eliminate the repayment requirement on past awards.(c)Non-cash charge recognized related to the impairment of the carrying value of the North America reporting unit's goodwill.(d)$11 million settlement with former partners related to the termination of a joint venture arrangement in India. In addition, a $1 million loss on disposal of operations was recorded related to the termination.(e)Insurance recovery related to the previously disclosed fraudulent activity in Chicago. See 'Correction of Commissions and Fees Overstatement Relating to 2011 and Prior Periods', below.(f)Write-off of uncollectible accounts receivable balance relating to periods prior to January 1, 2011, see 'Correction of Commissions and Fees Overstatement Relating to 2011 and Prior Periods', below.(g)Charge relating to the 2011 Operational Review, including $98 million pre-tax of severance costs related to the elimination of approximately 1,200 positions for the full year 2011.(h)Regulatory settlement with the UK Financial Services Authority (FSA), now the Financial Conduct Authority (FCA).(i)Charge related to the assessment of the Company's organizational design. See 'Expense Reduction Initiative' section below.(j)Potentially issuable shares were not included in the calculation of diluted earnings per share, GAAP basis, because the Company's net loss from continuing operations rendered their impact anti-dilutive.34Goodwill ImpairmentOur annual goodwill impairment analysis is performed each year at October 1. At October 1, 2013 our analysis showed the estimated fair value of each reporting unit was in excess of the carrying value, and therefore did not result in an impairment charge (2012: $492 million; 2011: $nil).In 2012 an impairment charge for the North America reporting unit was required and amounted to $492 million. There was no impairment for the Global and International reporting units, as the fair values of these units were significantly in excess of their carrying value.Correction of Commissions and Fees Overstatement Relating to 2011 and Prior PeriodsAs previously disclosed, in early 2012 we identified through our internal financial control process and a subsequent internal investigation an uncollectible accounts receivable balance of approximately $40 million in Chicago from the fraudulent overstatement of Commissions and fees from the years 2005 to 2011.We concluded that the total $40 million of overstatement did not materially affect our previously issued financial statements for any of the prior periods and we corrected the misstatement by recognizing a charge to Other operating expenses to write off the uncollectible receivable (a) of $13 million (including legal expenses) in the first quarter of 2012 and (b) of $22 million in the fourth quarter of 2011. In the fourth quarter 2011 we also reversed a $6 million balance of Commissions and fees which had been recorded during 2011 and $2 million of Salaries and benefits expense representing an over-accrual of production bonuses relating to the overstated revenue. During 2012, we recorded within Other operating expenses a $10 million insurance settlement from insurers in respect of our claim under Group insurance policies, for compensation paid out in the years 2005 to 2010 on the fraudulently overstated revenues discussed above.The employees in question, who have been terminated, were not members of Willis executive management nor did they play a significant role in internal control over financial reporting. Based on the results of our investigation, which has now been completed, we do not believe that any client or carrier funds were misappropriated or that any other business units were affected.We have enhanced our internal controls in relation to the business unit in question, including enhanced procedures over receipt of checks and application of cash, increased segregation of duties between the operating unit and the accounting and settlement function, and additional central sign off requirement on revenue recognition.Expense Reduction InitiativeThe Company recorded a pre-tax charge of $46 million in the first quarter of 2013 related to the previously announced assessment of the Company's organizational design. In connection with this assessment, we incurred the following pre-tax charges:$29 million of severance and other staff related costs towards the elimination of 207 positions; and$17 million of Other operating expenses and Depreciation resulting from the rationalization of property and systems.The Company did not incur any further charges related to this review.The actions taken resulted in total cost savings of approximately $20 million exclusive of the costs incurred in 2013. It is also anticipated that we will achieve prospective annualized cost savings of approximately $25 million to $30 million.Cash Retention AwardsFor the past several years, certain cash retention awards under the Company's annual incentive programs included a feature which required the recipient to repay a proportionate amount of the annual award if the employee voluntarily left the Company before a specified date, which was generally three years following the award. As previously disclosed, the Company made the cash payment to the recipient in the year of grant and recognized the payment in expense ratably over the period it was subject to repayment, beginning in the quarter in which the award was made. The unamortized portion of cash retention awards was recorded within 'other current assets' and 'other non-current assets' in the consolidated balance sheets.The following table sets out the amount of cash retention awards made and the related amortization of those awards for the three years ended December 31, 2013.35 Years ended December 31, 2013 2012 2011 (millions) Cash retention awards made $ 12 $ 221 $ 210 Amortization of cash retention awards included in salaries and benefits 6 216 185 In December 2012, the Company decided to eliminate the repayment requirement from past annual cash retention awards and, as a result, recognized a non-cash, pre-tax charge of $200 million which represents the write-off of the unamortized balance of past awards at that date.There were, however,held a number of off-cycle awards with a fixed period guarantee attached,ministerial position in the U.K. government, including Under Secretary of State for which we have not waivedNorthern Ireland, Minister of State for the repayment requirement. The unamortized portionArmed Forces, Cabinet Minister without Portfolio at the same time as being Chairman of these awards amounted to $15 million at December 31, 2013 (2012: $9 million; 2011: $196 million).In addition,the Conservative Party and Minister of State for Foreign & Commonwealth Affairs. He retired from politics in 2012, the Company replaced annual cash retention awards with annual cash bonuses which did not include a repayment requirement. As at December 31, 2012, the Company had accrued $252 million for these bonuses.Pension ExpenseWe recorded a net periodic benefit income on our UK defined benefit pension plan in 2013 of $5 million (2012: $5 million; 2011: cost of $6 million). On our US defined benefit pension plan, we recorded a net periodic benefit income of $4 million in 2013 (2012: cost of $3 million; 2011: $nil). On our other defined benefit pension plans, we recorded a net pension cost of $5 million in 2013 (2012: $4 million; 2011: $5 million).The periodic benefit income1998. He also served on the UK plan in 2013 is flat compared to 2012 as higher asset returns were offset by higher amortizationBoards of unrecognized actuarial lossesLottomatica S.p.A., Onslow Suffolk Limited, Mountfield Group Limited, Nymex London Limited and increased service costs.The movement to $5 million income onITE Group plc. and the UK plan in 2012 from a $6 million cost in 2011 was primarily due to higher asset returns partially offset by higher amortization of unrecognized actuarial losses and increased interest cost.On the US plan, the movement to a $4 million income in 2013 from a $3 million cost in 2012 was primarily due to higher asset returns.The 2012 US pension cost was $3 million higher compared with 2011 was primarily due to an increase in amortization of unrecognized actuarial losses partially offset by higher asset returns.See 'Contractual Obligations' below for further information on our obligations relating to our pension plans.Acquisitions and DisposalsIn first quarter 2014 the Company agreed to acquire Charles Monat Limited, a market-leading life insurance solutions adviser to high net worth clients. The acquisition represents a key enhancement to our expanding Global Wealth Solutions practice, particularly in Asia, however completionAudit Committee of the transaction is currently subject to regulatory approval.During first quarter 2014 the Company disposedJoint Arab British Chamber of Insurance Noodle, a small online wholesale business in Willis North America, to Insureon.In fourth quarter 2013 the Company acquired the employee benefits consulting division of Capital Strategies Group, Inc. based in Birmingham, Alabama. We disposed of the trade and assets associated with Willis of Northern New England to a small Maine-based broker specializing in attorneys, not-for-profit organizations, hospitals and contractors.In third quarter 2013, the Company disposed of the trade and assets associated with CBT, our book of small commercial clients in the UK, to Chesham Insurance Brokers.In second quarter 2013, the Company acquired 100 percent of PPH Limited and its subsidiary Prime Professions Limited (together referred to as Prime Professions), a leading UK based professional indemnity insurance broker, at a cost of $29 million.In first quarter 2013, the Company acquired 100 percent of CBC Broker Srl, an Italian broker, at a cost of $1 million.36Management StructureDuring first quarter 2014 we announced changes to the structure of our UK-based insurance operations, combining our Global Specialty insurance business with the Willis UK retail business to create a market leading client proposition. Following this change, effective January 1, 2014, UK retail, previously reported as part of our International reporting segment will be reported in our Global reporting segment.In addition, effective January 1, 2014 Mexico which was previously reported within our North America reporting segment, will be reported in our International reporting segment, Placement which was previously reported as part of our Global reporting segment will be reported within Corporate and other, and our US Captive consulting business and Facultative reinsurance businesses, which were previously reported as part of our North America reporting segment will be reported in our Global reporting segment.37Business StrategyToday we operate in attractive growth markets with a diversified platform across geographies, industries, segments and lines of business. We aim to become the risk advisor, insurance and reinsurance broker of choice globally.We will achieve this by being completely focused on:where we compete and that means the areas where we can succeed by:
Legal, Governmental, Political or Diplomatic Expertise — Sir Jeremy Hanley has a deep understanding of UK governmental and |
• | Financial Background — Sir Jeremy Hanley, a member of the Company’s Audit Committee, is a UK-Chartered accountant which qualifies him as an audit committee financial expert. |
International Board and Committee Experience — Sir Jeremy Hanley also brings experience from his service on numerous international boards, including his former service on the |
Robyn S. Kravit — Ms. Kravit, age 62, joined the Board on meeting the needs of our client by:
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
REVENUES | |||||||||||
Commissions and fees | $ | 3,633 | $ | 3,458 | $ | 3,414 | |||||
Investment income | 15 | 18 | 31 | ||||||||
Other income | 7 | 4 | 2 | ||||||||
Total revenues | 3,655 | 3,480 | 3,447 | ||||||||
EXPENSES | |||||||||||
Salaries and benefits | (2,207 | ) | (2,475 | ) | (2,087 | ) | |||||
Other operating expenses | (616 | ) | (581 | ) | (656 | ) | |||||
Depreciation expense | (94 | ) | (79 | ) | (74 | ) | |||||
Amortization of intangible assets | (55 | ) | (59 | ) | (68 | ) | |||||
Goodwill impairment charge | — | (492 | ) | — | |||||||
Net gain (loss) on disposal of operations | 2 | (3 | ) | 4 | |||||||
Total expenses | (2,970 | ) | (3,689 | ) | (2,881 | ) | |||||
OPERATING INCOME (LOSS) | 685 | (209 | ) | 566 | |||||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | — | — | (171 | ) | |||||||
Loss on extinguishment of debt | (60 | ) | — | — | |||||||
Interest expense | (126 | ) | (128 | ) | (156 | ) | |||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 499 | (337 | ) | 239 | |||||||
Income taxes | (122 | ) | (101 | ) | (32 | ) | |||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 377 | (438 | ) | 207 | |||||||
Interest in earnings of associates, net of tax | — | 5 | 12 | ||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 377 | (433 | ) | 219 | |||||||
Discontinued operations, net of tax | — | — | 1 | ||||||||
NET INCOME (LOSS) | 377 | (433 | ) | 220 | |||||||
Less: net income attributable to noncontrolling interests | (12 | ) | (13 | ) | (16 | ) | |||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 365 | $ | (446 | ) | $ | 204 | ||||
Salaries and benefits as a percentage of total revenues | 60.4 | % | 71.1 | % | 60.5 | % | |||||
Other operating expenses as a percentage of total revenues | 16.9 | % | 16.7 | % | 19.0 | % | |||||
Operating margin (operating income (loss) as a percentage of total revenues) | 18.7 | % | (6.0 | )% | 16.4 | % | |||||
Diluted earnings per share from continuing operations | $ | 2.04 | $ | (2.58 | ) | $ | 1.15 | ||||
Average diluted number of shares outstanding | 179 | 173 | 176 |
Change attributable to: | |||||||||||||||||||
Year ended December 31, | 2013 | 2012 | % Change | Foreign currency translation | Acquisitions and disposals | Organic commissions and fees growth(a) | |||||||||||||
Global | $ | 1,188 | $ | 1,124 | 5.7 | % | (0.9 | )% | 1.0 | % | 5.6 | % | |||||||
North America(b) | 1,377 | 1,306 | 5.4 | % | (0.1 | )% | 0.6 | % | 4.9 | % | |||||||||
International(c) | 1,068 | 1,028 | 3.9 | % | (0.2 | )% | — | % | 4.1 | % | |||||||||
Commissions and fees | $ | 3,633 | $ | 3,458 | 5.1 | % | (0.3 | )% | 0.5 | % | 4.9 | % | |||||||
Investment income | 15 | 18 | (16.7 | )% | |||||||||||||||
Other income | 7 | 4 | 75.0 | % | |||||||||||||||
Total revenues | $ | 3,655 | $ | 3,480 | 5.0 | % |
Change attributable to: | |||||||||||||||||||
Year ended December 31, | 2012 | 2011 | % Change | Foreign currency translation | Acquisitions and disposals | Organic commissions and fees growth(a) | |||||||||||||
Global | $ | 1,124 | $ | 1,073 | 4.8 | % | (1.3 | )% | — | % | 6.1 | % | |||||||
North America | 1,306 | 1,314 | (0.6 | )% | — | % | — | % | (0.6 | )% | |||||||||
International | 1,028 | 1,027 | 0.1 | % | (4.8 | )% | — | % | 4.9 | % | |||||||||
Commissions and fees | $ | 3,458 | $ | 3,414 | 1.3 | % | (1.8 | )% | — | % | 3.1 | % | |||||||
Investment income | 18 | 31 | (41.9 | )% | |||||||||||||||
Other income | 4 | 2 | 100.0 | % | |||||||||||||||
Total revenues | $ | 3,480 | $ | 3,447 | 1.0 | % |
December 31, 2013 | December 31, 2012 | ||||||
Long-term debt | $ | 2,311 | $ | 2,338 | |||
Short-term debt and current portion of long-term debt | $ | 15 | $ | 15 | |||
Total debt | $ | 2,326 | $ | 2,353 | |||
Stockholders' equity | $ | 2,215 | $ | 1,699 | |||
Capitalization ratio | 51.2 | % | 58.1 | % |
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cash provided by operating activities | |||||||||||
Net cash provided by continuing operating activities | $ | 561 | $ | 525 | $ | 441 | |||||
Net cash used in discontinued operations | — | — | (2 | ) | |||||||
Total net cash provided by operating activities | 561 | 525 | 439 | ||||||||
Cash flows from investing activities | |||||||||||
Total net cash used in continuing investing activities | (120 | ) | (172 | ) | (101 | ) | |||||
Cash flows from financing activities | |||||||||||
Total net cash used in continuing financing activities | (137 | ) | (291 | ) | (214 | ) | |||||
Increase in cash and cash equivalents | 304 | 62 | 124 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (8 | ) | 2 | (4 | ) | ||||||
Cash and cash equivalents, beginning of year | 500 | 436 | 316 | ||||||||
Cash and cash equivalents, end of year | $ | 796 | $ | 500 | $ | 436 |
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
Revenues | Operating Income | Operating Margin | Revenues | Operating Income (Loss) | Operating Margin | Revenues | Operating Income | Operating Margin | ||||||||||||||||||||||||
Global | $ | 1,191 | $ | 334 | 28.0 | % | $ | 1,129 | $ | 372 | 32.9 | % | $ | 1,082 | $ | 352 | 32.5 | % | ||||||||||||||
North America | 1,386 | 269 | 19.4 | % | 1,313 | 240 | 18.3 | % | 1,323 | 271 | 20.5 | % | ||||||||||||||||||||
International | 1,078 | 181 | 16.8 | % | 1,038 | 183 | 17.6 | % | 1,042 | 221 | 21.2 | % | ||||||||||||||||||||
Total Retail | 2,464 | 450 | 18.3 | % | 2,351 | 423 | 18.0 | % | 2,365 | 492 | 20.8 | % | ||||||||||||||||||||
Corporate & Other | — | (99 | ) | n/a | — | (1,004 | ) | n/a | — | (278 | ) | n/a | ||||||||||||||||||||
Total Consolidated | $ | 3,655 | $ | 685 | 18.7 | % | $ | 3,480 | $ | (209 | ) | (6.0 | )% | $ | 3,447 | $ | 566 | 16.4 | % |
2013 | 2012 | 2011 | |||||||||
Commissions and fees | $ | 1,188 | $ | 1,124 | $ | 1,073 | |||||
Investment income | 3 | 5 | 9 | ||||||||
Total revenues | $ | 1,191 | $ | 1,129 | $ | 1,082 | |||||
Operating income | $ | 334 | $ | 372 | $ | 352 | |||||
Revenue growth | 5.5 | % | 4.3 | % | 8.6 | % | |||||
Organic commissions and fees growth (a) | 5.6 | % | 6.1 | % | 6.6 | % | |||||
Operating margin | 28.0 | % | 32.9 | % | 32.5 | % |
2013 | 2012 | 2011 | |||||||||
Commissions and fees (a) | $ | 1,377 | $ | 1,306 | $ | 1,314 | |||||
Investment income | 2 | 3 | 7 | ||||||||
Other income (b) | 7 | 4 | 2 | ||||||||
Total revenues | $ | 1,386 | $ | 1,313 | $ | 1,323 | |||||
Operating income | $ | 269 | $ | 240 | $ | 271 | |||||
Revenue growth | 5.6 | % | (0.8 | )% | (4.5 | )% | |||||
Organic commissions and fees growth (c) | 4.9 | % | (0.6 | )% | (3.5 | )% | |||||
Operating margin | 19.4 | % | 18.3 | % | 20.5 | % |
2013 | 2012 | 2011 | |||||||||
Commissions and fees (a) | $ | 1,068 | $ | 1,028 | $ | 1,027 | |||||
Investment income | 10 | 10 | 15 | ||||||||
Total revenues | $ | 1,078 | $ | 1,038 | $ | 1,042 | |||||
Operating income | 181 | 183 | 221 | ||||||||
Revenue growth | 3.9 | % | (0.4 | )% | 9.6 | % | |||||
Organic commissions and fees growth (b) | 4.1 | % | 4.9 | % | 4.8 | % | |||||
Operating margin | 16.8 | % | 17.6 | % | 21.2 | % |
2013 | 2012 | 2011 | |||||||||
Amortization of intangible assets | $ | (55 | ) | $ | (59 | ) | $ | (68 | ) | ||
Additional incentive accrual for change in remuneration policy (a) | — | (252 | ) | — | |||||||
Write-off of unamortized cash retention awards (b) | — | (200 | ) | — | |||||||
Goodwill impairment charge (c) | — | (492 | ) | — | |||||||
India joint venture settlement (d) | — | (11 | ) | — | |||||||
Insurance recovery (e) | — | 10 | — | ||||||||
Write-off of uncollectible accounts receivable balance in Chicago (f) | — | (13 | ) | (22 | ) | ||||||
Net gain (loss) on disposal of operations (d) | 2 | (3 | ) | 4 | |||||||
Foreign exchange hedging | 3 | 8 | 5 | ||||||||
Foreign exchange gain (loss) on the UK pension plan asset | 8 | (1 | ) | — | |||||||
2011 Operational Review | — | — | (180 | ) | |||||||
FSA Regulatory settlement | — | — | (11 | ) | |||||||
Expense Reduction Initiative | (46 | ) | — | — | |||||||
Fees related to the extinguishment of debt | (1 | ) | — | — | |||||||
Other (g) | (10 | ) | 9 | (6 | ) | ||||||
Total Corporate and other | $ | (99 | ) | $ | (1,004 | ) | $ | (278 | ) |
As disclosed using December 31, 2013 assumptions(a) | Impact of a 0.50 percentage point increase in the expected rate of return on assets(b) | Impact of a 0.50 percentage point increase in the discount rate(b) | One year increase in mortality assumption(c) | ||||||||||||
(millions) | |||||||||||||||
Estimated 2014 (income) / expense | $ | (12 | ) | $ | (15 | ) | $ | (24 | ) | $ | 8 | ||||
Projected benefit obligation at December 31, 2013 | 2,785 | n/a | (254 | ) | 56 |
Expected return on plan assets | Actual return on plan assets | ||||||
(millions) | |||||||
2013 | $ | 191 | $ | 255 | |||
2012 | 181 | 226 | |||||
2011 | 161 | 269 |
As disclosed using December 31, 2013 assumptions | Impact of a 0.50 percentage point increase in the expected rate of return on assets(a) | Impact of a 0.50 percentage point increase in the discount rate(a) | One year increase in mortality assumption(b) | ||||||||||||
(millions) | |||||||||||||||
Estimated 2014 (income) / expense | $ | (8 | ) | $ | (4 | ) | $ | — | $ | 2 | |||||
Projected benefit obligation at December 31, 2013 | 864 | n/a | (51 | ) | 22 |
Expected return on plan assets | Actual return on plan assets | ||||||
(millions) | |||||||
2013 | $ | 51 | $ | 60 | |||
2012 | 46 | 80 | |||||
2011 | 44 | 34 |
Payments due by | |||||||||||||||||||
Obligations (c) | Total | 2014 | 2015-2016 | 2017-2018 | After 2018 | ||||||||||||||
(millions) | |||||||||||||||||||
7-year term loan facility expires 2018 | $ | 274 | $ | 15 | $ | 39 | $ | 220 | $ | — | |||||||||
Interest on term loan | 19 | 5 | 9 | 5 | — | ||||||||||||||
Revolving $500 million credit facility commitment fees | 9 | 2 | 4 | 3 | — | ||||||||||||||
5.625% senior notes due 2015 | 148 | — | 148 | — | — | ||||||||||||||
Fair value adjustments on 5.625% senior notes due 2015 | 4 | — | 4 | — | — | ||||||||||||||
4.125% senior notes due 2016 | 300 | — | 300 | — | — | ||||||||||||||
6.200% senior notes due 2017 | 394 | — | — | 394 | — | ||||||||||||||
7.000% senior notes due 2019 | 187 | — | — | — | 187 | ||||||||||||||
5.750% senior notes due 2021 | 500 | — | — | — | 500 | ||||||||||||||
4.625% senior notes due 2023 | 250 | — | — | — | 250 | ||||||||||||||
6.125% senior notes due 2043 | 275 | — | — | — | 275 | ||||||||||||||
Interest on senior notes | 1,011 | 115 | 209 | 146 | 541 | ||||||||||||||
Total debt and related interest | 3,371 | 137 | 713 | 768 | 1,753 | ||||||||||||||
Operating leases (a) | 1,235 | 131 | 213 | 167 | 724 | ||||||||||||||
Pensions | 566 | 122 | 244 | 161 | 39 | ||||||||||||||
Other contractual obligations (b) | 91 | 24 | 16 | 12 | 39 | ||||||||||||||
Total contractual obligations | $ | 5,263 | $ | 414 | $ | 1,186 | $ | 1,108 | $ | 2,555 |
Gross rental commitments | Rentals from subleases | Net rental commitments | |||||||||
(millions) | |||||||||||
2014 | $ | 131 | $ | (15 | ) | $ | 116 | ||||
2015 | 114 | (14 | ) | 100 | |||||||
2016 | 99 | (13 | ) | 86 | |||||||
2017 | 88 | (12 | ) | 76 | |||||||
2018 | 79 | (8 | ) | 71 | |||||||
Thereafter | 724 | (16 | ) | 708 | |||||||
Total | $ | 1,235 | $ | (78 | ) | $ | 1,157 |
US Dollars | Pounds Sterling | Euros | Other currencies | ||||||||
Revenues | 60 | % | 8 | % | 13 | % | 19 | % | |||
Expenses | 49 | % | 25 | % | 9 | % | 17 | % |
Settlement date before December 31, | |||||||||||||||||
2014 | 2015 | 2016 | |||||||||||||||
December 31, 2013 | Contract amount | Average contractual exchange rate | Contract amount | Average contractual exchange rate | Contract amount | Average contractual exchange rate | |||||||||||
(millions) | (millions) | (millions) | |||||||||||||||
Foreign currency sold | |||||||||||||||||
US dollars sold for sterling | $ | 212 | $1.57 = £1 | $ | 91 | $1.53 = £1 | $ | — | — | ||||||||
Euro sold for US dollars | 60 | €1 = $1.33 | 37 | €1 = $1.36 | — | — | |||||||||||
Japanese yen sold for US dollars | 23 | ¥ 88.08=$1 | 12 | ¥ 97.98 = $1 | — | — | |||||||||||
Total | $ | 295 | $ | 140 | $ | — | |||||||||||
Fair Value (i) | $ | 13 | $ | 8 | $ | — |
Settlement date before December 31, | |||||||||||||||||
2013 | 2014 | 2015 | |||||||||||||||
December 31, 2012 | Contract amount | Average contractual exchange rate | Contract amount | Average contractual exchange rate | Contract amount | Average contractual exchange rate | |||||||||||
(millions) | (millions) | (millions) | |||||||||||||||
Foreign currency sold | |||||||||||||||||
US dollars sold for sterling | $ | 167 | $1.59 = £1 | $ | 88 | $1.60 = £1 | $ | — | — | ||||||||
Euro sold for US dollars | 55 | €1 = $1.36 | �� | — | — | — | |||||||||||
Japanese yen sold for US dollars | 22 | ¥ 81.72=$1 | 10 | ¥ 79.02=$1 | — | — | |||||||||||
Total | $ | 244 | $ | 98 | $ | — | |||||||||||
Fair Value (i) | $ | 7 | $ | 2 | $ | — |
Expected to mature before December 31, | ||||||||||||||||||||||||
December 31, 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | Fair Value(i) | ||||||||||||||||
($ millions, except percentages) | ||||||||||||||||||||||||
Fixed rate debt | ||||||||||||||||||||||||
Principal ($) | 148 | 300 | 394 | 1,212 | 2,054 | 2,185 | ||||||||||||||||||
Fixed rate payable | 5.625% | 4.125 | % | 6.200 | % | 5.796 | % | 5.617 | % | |||||||||||||||
Floating rate debt | ||||||||||||||||||||||||
Principal ($) | 15 | 17 | 23 | 23 | 196 | 274 | 274 | |||||||||||||||||
Variable rate payable | 1.84 | % | 2.45 | % | 3.51 | % | 4.36 | % | 4.73 | % | 4.52 | % |
Expected to mature before December 31, | ||||||||||||||||||||||||
December 31, 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | Fair Value (i) | ||||||||||||||||
($ millions, except percentages) | ||||||||||||||||||||||||
Fixed rate debt | ||||||||||||||||||||||||
Principal ($) | 350 | 300 | 600 | 800 | 2,050 | 2,302 | ||||||||||||||||||
Fixed rate payable | 5.625% | 4.125 | % | 6.200 | % | 6.219 | % | 5.805 | % | |||||||||||||||
Floating rate debt | ||||||||||||||||||||||||
Principal ($) | 15 | 15 | 17 | 242 | 289 | 289 | ||||||||||||||||||
Variable rate payable | 1.89 | % | 2.05 | % | 2.34 | % | 3.00 | % | 2.93 | % | ||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||
Fixed to Variable | ||||||||||||||||||||||||
Principal ($) | 350 | 350 | 22 | |||||||||||||||||||||
Fixed rate receivable | 2.71 | % | 2.71 | % | ||||||||||||||||||||
Variable rate payable | 0.75 | % | 0.75 | % |
Years ended December 31, | ||||||||||||||
Note | 2013 | 2012 | 2011 | |||||||||||
(millions, except per share data) | ||||||||||||||
REVENUES | ||||||||||||||
Commissions and fees | $ | 3,633 | $ | 3,458 | $ | 3,414 | ||||||||
Investment income | 15 | 18 | 31 | |||||||||||
Other income | 7 | 4 | 2 | |||||||||||
Total revenues | 3,655 | 3,480 | 3,447 | |||||||||||
EXPENSES | ||||||||||||||
Salaries and benefits | 3 | (2,207 | ) | (2,475 | ) | (2,087 | ) | |||||||
Other operating expenses | (616 | ) | (581 | ) | (656 | ) | ||||||||
Depreciation expense | 12 | (94 | ) | (79 | ) | (74 | ) | |||||||
Amortization of intangible assets | 14 | (55 | ) | (59 | ) | (68 | ) | |||||||
Goodwill impairment charge | 13 | — | (492 | ) | — | |||||||||
Net gain (loss) on disposal of operations | 6 | 2 | (3 | ) | 4 | |||||||||
Total expenses | (2,970 | ) | (3,689 | ) | (2,881 | ) | ||||||||
OPERATING INCOME (LOSS) | 685 | (209 | ) | 566 | ||||||||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | — | — | (171 | ) | ||||||||||
Loss on extinguishment of debt | 20 | (60 | ) | — | — | |||||||||
Interest expense | 20 | (126 | ) | (128 | ) | (156 | ) | |||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | 499 | (337 | ) | 239 | ||||||||||
Income taxes | 7 | (122 | ) | (101 | ) | (32 | ) | |||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | 377 | (438 | ) | 207 | ||||||||||
Interest in earnings of associates, net of tax | 15 | — | 5 | 12 | ||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 377 | (433 | ) | 219 | ||||||||||
Discontinued operations, net of tax | 8 | — | — | 1 | ||||||||||
NET INCOME (LOSS) | 377 | (433 | ) | 220 | ||||||||||
Less: net income attributable to noncontrolling interests | (12 | ) | (13 | ) | (16 | ) | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 365 | $ | (446 | ) | $ | 204 | |||||||
AMOUNTS ATTRIBUTABLE TO WILLIS GROUP HOLDINGS SHAREHOLDERS | ||||||||||||||
Income (loss) from continuing operations, net of tax | $ | 365 | $ | (446 | ) | $ | 203 | |||||||
Income from discontinued operations, net of tax | — | — | 1 | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 365 | $ | (446 | ) | $ | 204 | |||||||
BASIC EARNINGS PER SHARE | 9 | |||||||||||||
— Continuing operations | $ | 2.07 | $ | (2.58 | ) | $ | 1.17 | |||||||
DILUTED EARNINGS PER SHARE | 9 | |||||||||||||
— Continuing operations | $ | 2.04 | $ | (2.58 | ) | $ | 1.15 | |||||||
CASH DIVIDENDS DECLARED PER SHARE | $ | 1.12 | $ | 1.08 | $ | 1.04 |
Years ended December 31, | ||||||||||||||
Note | 2013 | 2012 | 2011 | |||||||||||
(millions) | ||||||||||||||
Net income (loss) | $ | 377 | $ | (433 | ) | $ | 220 | |||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||
Foreign currency translation adjustments | 20 | 46 | (29 | ) | ||||||||||
Pension funding adjustment: | ||||||||||||||
Foreign currency translation on pension funding adjustment | (10 | ) | (22 | ) | 8 | |||||||||
Net actuarial gain (loss) | 85 | (167 | ) | (208 | ) | |||||||||
Prior service gain | — | — | 7 | |||||||||||
Amortization of unrecognized actuarial loss | 46 | 38 | 25 | |||||||||||
Amortization of unrecognized prior service gain | (4 | ) | (5 | ) | (4 | ) | ||||||||
117 | (156 | ) | (172 | ) | ||||||||||
Derivative instruments: | ||||||||||||||
Gain on interest rate swaps (effective element) | — | 2 | 10 | |||||||||||
Interest rate swap reclassification adjustment | (4 | ) | (4 | ) | (10 | ) | ||||||||
Gain on forward exchange contracts (effective element) | 8 | 9 | 2 | |||||||||||
Forward exchange contracts reclassification adjustment | 1 | (3 | ) | (5 | ) | |||||||||
Gain on treasury lock (effective element) | 15 | — | — | |||||||||||
20 | 4 | (3 | ) | |||||||||||
Other comprehensive income (loss), net of tax | 23 | 157 | (106 | ) | (204 | ) | ||||||||
Comprehensive income (loss) | 534 | (539 | ) | 16 | ||||||||||
Less: Comprehensive income attributable to noncontrolling interests | (12 | ) | (13 | ) | (15 | ) | ||||||||
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 522 | $ | (552 | ) | $ | 1 |
December 31, | ||||||||||
Note | 2013 | 2012 | ||||||||
(millions, except share data) | ||||||||||
ASSETS | ||||||||||
CURRENT ASSETS | ||||||||||
Cash and cash equivalents | $ | 796 | $ | 500 | ||||||
Accounts receivable, net | 1,041 | 933 | ||||||||
Fiduciary assets | 11 | 8,412 | 9,271 | |||||||
Deferred tax assets | 7 | 15 | 13 | |||||||
Other current assets | 16 | 197 | 181 | |||||||
Total current assets | 10,461 | 10,898 | ||||||||
NON-CURRENT ASSETS | ||||||||||
Fixed assets, net | 12 | 481 | 468 | |||||||
Goodwill | 13 | 2,838 | 2,827 | |||||||
Other intangible assets, net | 14 | 353 | 385 | |||||||
Investments in associates | 15 | 176 | 174 | |||||||
Deferred tax assets | 7 | 7 | 18 | |||||||
Pension benefits asset | 19 | 278 | 136 | |||||||
Other non-current assets | 16 | 206 | 206 | |||||||
Total non-current assets | 4,339 | 4,214 | ||||||||
TOTAL ASSETS | $ | 14,800 | $ | 15,112 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES | ||||||||||
Fiduciary liabilities | $ | 8,412 | $ | 9,271 | ||||||
Deferred revenue and accrued expenses | 586 | 541 | ||||||||
Income taxes payable | 21 | 19 | ||||||||
Short-term debt and current portion of long-term debt | 20 | 15 | 15 | |||||||
Deferred tax liabilities | 7 | 25 | 21 | |||||||
Other current liabilities | 17 | 415 | 327 | |||||||
Total current liabilities | 9,474 | 10,194 | ||||||||
NON-CURRENT LIABILITIES | ||||||||||
Long-term debt | 20 | 2,311 | 2,338 | |||||||
Liability for pension benefits | 19 | 136 | 282 | |||||||
Deferred tax liabilities | 7 | 56 | 18 | |||||||
Provisions for liabilities | 21 | 206 | 180 | |||||||
Other non-current liabilities | 17 | 374 | 375 | |||||||
Total non-current liabilities | 3,083 | 3,193 | ||||||||
Total liabilities | 12,557 | 13,387 |
December 31, | ||||||||||
Note | 2013 | 2012 | ||||||||
(millions, except share data) | ||||||||||
COMMITMENTS AND CONTINGENCIES | 22 | |||||||||
EQUITY | ||||||||||
Ordinary shares, $0.000115 nominal value; Authorized: 4,000,000,000; Issued 178,861,250 shares in 2013 and 173,178,733 shares in 2012 | — | — | ||||||||
Ordinary shares, €1 nominal value; Authorized: 40,000; Issued 40,000 shares in 2013 and 2012 | — | — | ||||||||
Preference shares, $0.000115 nominal value; Authorized: 1,000,000,000; Issued nil shares in 2013 and 2012 | — | — | ||||||||
Additional paid-in capital | 1,316 | 1,125 | ||||||||
Retained earnings | 1,595 | 1,427 | ||||||||
Accumulated other comprehensive loss, net of tax | 23 | (693 | ) | (850 | ) | |||||
Treasury shares, at cost, 46,408 shares in 2013 and 2012, and 40,000 shares, €1 nominal value, in 2013 and 2012 | (3 | ) | (3 | ) | ||||||
Total Willis Group Holdings stockholders’ equity | 2,215 | 1,699 | ||||||||
Noncontrolling interests | 24 | 28 | 26 | |||||||
Total equity | 2,243 | 1,725 | ||||||||
TOTAL LIABILITIES AND EQUITY | $ | 14,800 | $ | 15,112 |
Years ended December 31, | ||||||||||||||
Note | 2013 | 2012 | 2011 | |||||||||||
(millions) | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||
Net income (loss) | $ | 377 | $ | (433 | ) | $ | 220 | |||||||
Adjustments to reconcile net income to total net cash provided by operating activities: | ||||||||||||||
Income from discontinued operations | — | — | (1 | ) | ||||||||||
Goodwill impairment | — | 492 | — | |||||||||||
Net gain on disposal of operations, fixed and intangible assets | (7 | ) | — | (6 | ) | |||||||||
Depreciation expense | 12 | 94 | 79 | 74 | ||||||||||
Amortization of intangible assets | 14 | 55 | 59 | 68 | ||||||||||
Amortization and write-off of cash retention awards | 3 | 6 | 416 | 185 | ||||||||||
Net periodic cost of defined benefit pension plans | 19 | (4 | ) | 2 | 11 | |||||||||
Provision for doubtful accounts | 18 | 3 | 16 | 4 | ||||||||||
Provision for deferred income taxes | 39 | 54 | 17 | |||||||||||
Gain on derivative instruments | 18 | 11 | 3 | |||||||||||
Excess tax benefits from share-based payment arrangements | (2 | ) | (2 | ) | (5 | ) | ||||||||
Share-based compensation | 4 | 42 | 32 | 41 | ||||||||||
Tender premium included in loss on extinguishment of debt | 20 | 65 | — | — | ||||||||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | — | — | 171 | |||||||||||
Undistributed earnings of associates | 8 | (2 | ) | (5 | ) | |||||||||
Effect of exchange rate changes on net income | (4 | ) | (14 | ) | 14 | |||||||||
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries: | ||||||||||||||
Accounts receivable | (116 | ) | (17 | ) | (92 | ) | ||||||||
Fiduciary assets | 804 | 111 | 162 | |||||||||||
Fiduciary liabilities | (804 | ) | (111 | ) | (162 | ) | ||||||||
Cash incentives paid | (346 | ) | (323 | ) | (310 | ) | ||||||||
Funding of defined benefit pension plans | 19 | (150 | ) | (143 | ) | (135 | ) | |||||||
Other assets | 14 | (1 | ) | 70 | ||||||||||
Other liabilities | 445 | 319 | 101 | |||||||||||
Movement on provisions | 24 | (20 | ) | 16 | ||||||||||
Net cash provided by continuing operating activities | 561 | 525 | 441 | |||||||||||
Net cash used in discontinued operating activities | — | — | (2 | ) | ||||||||||
Total net cash provided by operating activities | 561 | 525 | 439 |
Years ended December 31, | |||||||||||||
Note | 2013 | 2012 | 2011 | ||||||||||
(millions) | |||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||
Proceeds on disposal of fixed and intangible assets | 12 | 5 | 13 | ||||||||||
Additions to fixed assets | (112 | ) | (135 | ) | (111 | ) | |||||||
Additions to intangible assets | (7 | ) | (2 | ) | — | ||||||||
Acquisitions of subsidiaries, net of cash acquired | (30 | ) | (33 | ) | (10 | ) | |||||||
Acquisition of investments in associates | — | — | (2 | ) | |||||||||
Payments to acquire other investments | (7 | ) | (7 | ) | (5 | ) | |||||||
Proceeds from sale of associates | 4 | — | — | ||||||||||
Proceeds from sale of operations, net of cash disposed | 20 | — | 14 | ||||||||||
Net cash used in continuing investing activities | (120 | ) | (172 | ) | (101 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||
Repayment of revolving credit facility | — | — | (90 | ) | |||||||||
Senior notes issued | 20 | 522 | — | 794 | |||||||||
Debt issuance costs | (8 | ) | — | (12 | ) | ||||||||
Repayments of debt | 20 | (536 | ) | (15 | ) | (911 | ) | ||||||
Tender premium on extinguishment of senior notes | 20 | (65 | ) | — | — | ||||||||
Proceeds from issue of term loan | — | — | 300 | ||||||||||
Proceeds from issue of other debt | — | 1 | — | ||||||||||
Make-whole on repurchase and redemption of senior notes | — | — | (158 | ) | |||||||||
Repurchase of shares | — | (100 | ) | — | |||||||||
Proceeds from issue of shares | 155 | 53 | 60 | ||||||||||
Excess tax benefits from share-based payment arrangements | 2 | 2 | 5 | ||||||||||
Dividends paid | (193 | ) | (185 | ) | (180 | ) | |||||||
Proceeds from sale of noncontrolling interests | — | 3 | — | ||||||||||
Acquisition of noncontrolling interests | (4 | ) | (39 | ) | (9 | ) | |||||||
Dividends paid to noncontrolling interests | (10 | ) | (11 | ) | (13 | ) | |||||||
Net cash used in continuing financing activities | (137 | ) | (291 | ) | (214 | ) | |||||||
INCREASE IN CASH AND CASH EQUIVALENTS | 304 | 62 | 124 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (8 | ) | 2 | (4 | ) | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 500 | 436 | 316 | ||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 796 | $ | 500 | $ | 436 |
December 31, | |||||||||||||
Note | 2013 | 2012 | 2011 | ||||||||||
(millions, except share data) | |||||||||||||
SHARES OUTSTANDING (thousands) | |||||||||||||
Balance, beginning of year | 173,179 | 173,830 | 170,884 | ||||||||||
Shares issued | — | 24 | — | ||||||||||
Shares repurchased | — | (2,797 | ) | — | |||||||||
Exercise of stock options and release of non-vested shares | 5,682 | 2,122 | 2,946 | ||||||||||
Balance, end of year | 178,861 | 173,179 | 173,830 | ||||||||||
ADDITIONAL PAID-IN CAPITAL | |||||||||||||
Balance, beginning of year | $ | 1,125 | $ | 1,073 | $ | 985 | |||||||
Issue of shares under employee stock compensation plans and related tax benefits | 153 | 50 | 49 | ||||||||||
Issue of shares for acquisitions | — | 1 | — | ||||||||||
Share-based compensation | 42 | 32 | 39 | ||||||||||
Acquisition of noncontrolling interests | (4 | ) | (31 | ) | — | ||||||||
Disposal of noncontrolling interests | — | 2 | — | ||||||||||
Foreign currency translation | — | (2 | ) | — | |||||||||
Balance, end of year | 1,316 | 1,125 | 1,073 | ||||||||||
RETAINED EARNINGS | |||||||||||||
Balance, beginning of year | 1,427 | 2,160 | 2,136 | ||||||||||
Net income (loss) attributable to Willis Group Holdings | 365 | (446 | ) | 204 | |||||||||
Dividends | (197 | ) | (187 | ) | (180 | ) | |||||||
Repurchase of shares | — | (100 | ) | — | |||||||||
Balance, end of year | 1,595 | 1,427 | 2,160 | ||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS, NET OF TAX | |||||||||||||
Balance, beginning of year | (850 | ) | (744 | ) | (541 | ) | |||||||
Other comprehensive income (loss) | 23 | 157 | (106 | ) | (203 | ) | |||||||
Balance, end of year | (693 | ) | (850 | ) | (744 | ) | |||||||
TREASURY SHARES | |||||||||||||
Balance, beginning of year | (3 | ) | (3 | ) | (3 | ) | |||||||
Balance, end of year | (3 | ) | (3 | ) | (3 | ) | |||||||
TOTAL WILLIS GROUP HOLDINGS SHAREHOLDERS’ EQUITY | $ | 2,215 | $ | 1,699 | $ | 2,486 | |||||||
(Continued on next page) |
December 31, | |||||||||||||
Note | 2013 | 2012 | 2011 | ||||||||||
(millions, except share data) | |||||||||||||
NONCONTROLLING INTERESTS | |||||||||||||
Balance, beginning of year | $ | 26 | $ | 31 | $ | 31 | |||||||
Net income | 12 | 13 | 16 | ||||||||||
Dividends | (10 | ) | (11 | ) | (15 | ) | |||||||
Purchase of subsidiary shares from noncontrolling interests, net | — | (8 | ) | — | |||||||||
Additional noncontrolling interests | — | 1 | — | ||||||||||
Foreign currency translation | — | — | (1 | ) | |||||||||
Balance, end of year | 28 | 26 | 31 | ||||||||||
TOTAL EQUITY | $ | 2,243 | $ | 1,725 | $ | 2,517 |
• | International Experience — China is an emerging market for the Company and Ms. Kravit’s almost 30 years of experience in international business, focusing on the Far East markets, provides the Company with an |
extensive knowledge base. She is fluent in Mandarin Chinese. She has established and directed significant China-based operations engaged in the international trading of industrial raw materials and has experience in devising marketing plans that adapt to evolving political and economic environments. She also has extensive experience in the management of foreign trade transactions and international risk management. |
• | CEO/Management Experience — Ms. Kravit founded and since 2000 has been the Chief Executive Officer of Tethys Research LLC, a biotechnology company, and is responsible for contract, administrative and financial operations. Prior to Tethys, as Managing Director for Asian operations, Ms. Kravit functioned as CEO of a major business unit within a complex multinational corporation. |
• | Financial Background — Ms. Kravit previously served on the Company’s Audit Committee and was appointed to atwo-year term on the Standing Advisory Group of the PCAOB. The Standing Advisory Group advises the PCAOB on issues relating to the development of auditing standards. |
Wendy E. Lane — Ms. Lane, age 62, joined the impact of commercial arrangements, are considered in determining whetherBoard on April 21, 2004 and currently serves as the equity method of accounting is appropriate. Under the equity method of accounting the investment is carried at cost of acquisition, plus the Company’s equity in undistributed net income since acquisition, less any dividends received since acquisition.
• | Financial Background — Ms. Lane has more than 15 years of experience in investment banking, including financings, mergers and acquisitions and advisory projects. Prior to forming her own investment firm in 1992, Ms. Lane was a Principal and Managing Director of Donaldson, Lufkin and Jenrette Securities Corporation, an investment banking firm, serving in these and other positions from 1981 to 1992. From 1977 to 1980, she was an investment banker at Goldman Sachs. Ms. Lane’s financial background qualifies her as an audit committee financial expert. |
• | Extensive Knowledge of the Company’s Business — Ms. Lane’s service as a director, financial expertise, current dual service as the Chairman of the Company’s Compensation Committee and member of the Audit Committee and former service as a member of the Company’s Nominating and Corporate Governance Committee have provided Ms. Lane with an invaluable knowledge base of the Company and a deep understanding of the interrelationships of issues and decisions between the Committees. She was also part of the Search Committee formed by the Board in connection with appointing a new CEO. |
• | International Board Experience — Ms. Lane has served for seven years on the board of UPM-Kymmene Corporation, a Finnish publicly held corporation with worldwide operations and revenues exceeding $11.5 billion. |
• | Board and Committee Experience — As well as serving on almost all of Willis’ Committees, Ms. Lane serves on the Audit Committee of UPM-Kymmene Corporation, has chaired the Audit and Compensation Committees of Laboratory Corporation of America and has extensive committee experience on all of her current and past boards. |
Francisco Luzón — Mr. Luzón, age 66, joined the Board on July 23, 2013 and currently serves as a member of the Governance Committee. From 1996 until January 2012, Mr. Luzón served in several capacities at Banco Santander, S.A. (a public company organized under the laws of Spain), most recently as Executive Board Member and General Manager of the Latin American Division, from 1996 until 1998, as Executive Director and Deputy to the Chairman and Head of Strategy, Communication and Investor Relations, and in 1998, as Head of Human Resources and Information Technology. Prior to that, Mr. Luzón held executive positions at several other banks, including Argentaria, S.A., Banco Exterior de Espana, S.A., Banco Bilbao Vizcaya and Banco Vizcaya. Within the last five years, Mr. Luzón has served as a Director of Banco Santander, S.A. and Inditex-Zara, the international fashion retail company. Mr. Luzón currently is a director of Latam Airlines Group, the
international airline, and Member of its Finance Committee and its Strategy Committee. He also serves on the boards and advisory councils of numerous academic institutions, non-profit organizations and think tanks. He is also a consultant of the Interamerican Development Bank. Mr. Luzón has a Degree in business (a customer list) or other intangible assets that do not produce adequate margins or fit withand economics from Bilbao University and, in 2010, received an Honorary Degree in economics from University Castilla La Mancha.
• | International Business and Management Experience — Mr. Luzón has significant international financial services experience, having served in executive roles most recently at Banco Santander, the Spanish financial institution, and other international banks over the last 30 years, and having worked in London, New York, Tokyo, the Middle East, North Africa and 12 countries in Latin America. |
• | Financial Background — Mr. Luzón has over 40 years of experience working in mergers and acquisitions, the restructuring of numerous private and state-owned banks, insurance companies and financial institutions in Spain and throughout numerous countries in Latin America. |
• | International Board Experience — Mr. Luzón also brings experience from his service on international boards, including his former service as a director of Banco Santander and Inditex-Zara, the international fashion retailer, and his current service as a director of Latam Airlines Group, the international airline. He has also served on the boards and advisory councils of numerous companies, academic institutions, not-for-profit organizations and think tanks. |
James F. McCann — Mr. McCann, age 62, joined the Board on April 21, 2004 and currently serves as the Board’s non-executive Chairman of the Board, the Chairman of the Company’s strategy.
Years ended December 31, | ||||||||
2013 | 2012 | 2011 | ||||||
Global | 4,545 | 4,304 | 4,042 | |||||
North America | 6,334 | 6,323 | 6,479 | |||||
International | 7,072 | 6,843 | 6,634 | |||||
Total Retail | 13,406 | 13,166 | 13,113 | |||||
Total average number of employees for the year | 17,951 | 17,470 | 17,155 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Salaries and other compensation awards including amortization and write-off of cash retention awards of $6 million, $416 million and $185 million (see below) | $ | 1,953 | $ | 2,258 | $ | 1,776 | |||||
Share-based compensation | 42 | 32 | 41 | ||||||||
Severance costs | 32 | 6 | 89 | ||||||||
Social security costs | 135 | 133 | 130 | ||||||||
Retirement benefits — defined benefit plan (income) expense | (4 | ) | 2 | 11 | |||||||
Retirement benefits — defined contribution plan expense | 49 | 44 | 40 | ||||||||
Total salaries and benefits expense | $ | 2,207 | $ | 2,475 | $ | 2,087 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Cash retention awards made | $ | 12 | $ | 221 | $ | 210 | |||||
Amortization of cash retention awards included in salaries and benefits | 6 | 216 | 185 |
• | CEO/Management Experience — Mr. McCann has substantial management, strategic and operational experience as Chairman and CEO of 1-800-Flowers.com, Inc. The knowledge and experience he has gained through his leadership of a consumer-product and service-based public company for over 30 years continues to benefit the Company both in his role as a director, Chairman of the Board, the Chairman of the Governance Committee, Presiding Independent Director, and a member of the Executive Committee. |
• | Extensive Knowledge of the Company’s Business — Mr. McCann’s service as a director of the Company, service as the Board’s non-executive Chairman of the Board, Presiding Independent Director, Chairman of the Governance Committee, member of the Executive Committee and former member of the Company’s Compensation Committee has provided him with an in-depth knowledge of the Company’s business and structure. He was also part of the Search Committee formed by the Board in connection with appointing a new CEO. |
• | Board and Committee Experience — Mr. McCann has benefited from his service as a former director and member of the Compensation Committee of Lottomatica S.p.A., an Italian headquartered company and his experience as Chairman of1-800-Flowers.com. |
Jaymin Patel — Mr. Patel, age 46, joined the Board of Directors, the 2012 Plan will expire 10 years after the date of its adoption. That termination will not affect the validity of any grants outstanding at that date.
Years ended December 31, | ||||||||
2013 | 2012 | 2011 | ||||||
Expected volatility | 24.7 | % | 32.1 | % | 31.4 | % | ||
Expected dividends | 2.6 | % | 3.2 | % | 2.5 | % | ||
Expected life (years) | 4 | 5 | 6 | |||||
Risk-free interest rate | 1.5 | % | 0.9 | % | 2.2 | % |
Weighted Average Exercise | Weighted Average Remaining Contractual | Aggregate Intrinsic | ||||||||||
(Options in thousands) | Options | Price(i) | Term | Value | ||||||||
(millions) | ||||||||||||
Time-based stock options | ||||||||||||
Balance, beginning of year | 10,152 | $ | 33.44 | |||||||||
Granted | 1,612 | $ | 42.77 | |||||||||
Exercised | (3,697 | ) | $ | 32.10 | ||||||||
Forfeited | (47 | ) | $ | 38.42 | ||||||||
Expired | (37 | ) | $ | 26.68 | ||||||||
Balance, end of year | 7,983 | $ | 35.95 | 4 years | $ | 71 | ||||||
Options vested or expected to vest at December 31, 2013 | 7,308 | $ | 35.99 | 4 years | $ | 64 | ||||||
Options exercisable at December 31, 2013 | 3,976 | $ | 35.38 | 1 year | $ | 37 | ||||||
Performance-based stock options | ||||||||||||
Balance, beginning of year | 6,517 | $ | 32.19 | |||||||||
Exercised | (1,111 | ) | $ | 29.27 | ||||||||
Forfeited | (146 | ) | $ | 32.40 | ||||||||
Balance, end of year | 5,260 | $ | 32.80 | 4 years | $ | 63 | ||||||
Options vested or expected to vest at December 31, 2013 | 4,675 | $ | 32.61 | 4 years | $ | 57 | ||||||
Options exercisable at December 31, 2013 | 2,716 | $ | 31.48 | 3 years | $ | 36 |
Weighted Average Grant Date | ||||||
(Units awarded in thousands) | Shares | Fair Value | ||||
Nonvested shares (restricted stock units) | ||||||
Balance, beginning of year | 2,525 | $ | 33.80 | |||
Granted | 1,377 | $ | 44.33 | |||
Vested | (874 | ) | $ | 34.02 | ||
Forfeited | (99 | ) | $ | 33.09 | ||
Balance, end of year | 2,929 | $ | 38.71 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Audit of group consolidated financial statements | $ | 4 | $ | 4 | $ | 4 | |||||
Other assurance services | 3 | 3 | 3 | ||||||||
Other non-audit services | 1 | 1 | 1 | ||||||||
Total auditors’ remuneration | $ | 8 | $ | 8 | $ | 8 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Ireland | $ | (52 | ) | $ | (47 | ) | $ | (39 | ) | ||
US | (11 | ) | (615 | ) | (25 | ) | |||||
UK | 282 | 25 | (58 | ) | |||||||
Other jurisdictions | 280 | 300 | 361 | ||||||||
Income (loss) from continuing operations before income taxes and interest in earnings of associates | $ | 499 | $ | (337 | ) | $ | 239 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Current income taxes: | |||||||||||
US federal tax | $ | 7 | $ | 3 | $ | 5 | |||||
US state and local taxes | 3 | 1 | 1 | ||||||||
UK corporation tax | 28 | 2 | (37 | ) | |||||||
Other jurisdictions | 45 | 41 | 46 | ||||||||
Total current taxes | 83 | 47 | 15 | ||||||||
Deferred taxes: | |||||||||||
US federal tax | 10 | (44 | ) | (6 | ) | ||||||
US state and local taxes | 1 | (41 | ) | 1 | |||||||
Effect of additional US valuation allowance | 2 | 113 | — | ||||||||
UK corporation tax | 17 | 27 | 20 | ||||||||
Other jurisdictions | 9 | (1 | ) | 2 | |||||||
Total deferred taxes | 39 | 54 | 17 | ||||||||
Total income taxes | $ | 122 | $ | 101 | $ | 32 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions, except percentages) | |||||||||||
Income (loss) from continuing operations before income taxes and interest in earnings of associates | $ | 499 | $ | (337 | ) | $ | 239 | ||||
US federal statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||
Income tax expense at US federal tax rate | 175 | (118 | ) | 84 | |||||||
Adjustments to derive effective rate: | |||||||||||
Non-deductible expenditure | 19 | 15 | 15 | ||||||||
Tax impact of internal restructurings | 11 | — | — | ||||||||
Movement in provision for unrecognized tax benefits | (1 | ) | 6 | 3 | |||||||
Impairment of non-qualifying goodwill | — | 137 | — | ||||||||
Impact of change in tax rate on deferred tax balances | (4 | ) | (3 | ) | (3 | ) | |||||
Adjustment in respect of prior periods | 1 | 6 | (13 | ) | |||||||
Effect of foreign exchange and other differences | 1 | 2 | 1 | ||||||||
Changes in valuation allowances applied to deferred tax assets | — | 114 | 5 | ||||||||
Net tax effect of intra-group items | (30 | ) | (31 | ) | (31 | ) | |||||
Tax differentials of foreign earnings: | |||||||||||
Foreign jurisdictions | (54 | ) | (12 | ) | (31 | ) | |||||
US state taxes and local taxes | 4 | (15 | ) | 2 | |||||||
Provision for income taxes | $ | 122 | $ | 101 | $ | 32 |
December 31, | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
Deferred tax assets: | |||||||
Accrued expenses not currently deductible | $ | 153 | $ | 120 | |||
US state net operating losses | 70 | 64 | |||||
US federal net operating losses | — | 28 | |||||
UK net operating losses | 3 | — | |||||
Other net operating losses | 5 | 8 | |||||
UK capital losses | 43 | 42 | |||||
Accrued retirement benefits | 47 | 101 | |||||
Deferred compensation | 37 | 48 | |||||
Stock options | 25 | 40 | |||||
Gross deferred tax assets | 383 | 451 | |||||
Less: valuation allowance | (196 | ) | (221 | ) | |||
Net deferred tax assets | $ | 187 | $ | 230 | |||
Deferred tax liabilities: | |||||||
Cost of intangible assets, net of related amortization | $ | 120 | $ | 118 | |||
Cost of tangible assets, net of related amortization | 44 | 51 | |||||
Prepaid retirement benefits | 56 | 35 | |||||
Accrued revenue not currently taxable | 23 | 29 | |||||
Cash retention award | — | 2 | |||||
Tax-leasing transactions | — | 1 | |||||
Financial derivative transactions | 3 | 2 | |||||
Deferred tax liabilities | 246 | 238 | |||||
Net deferred tax (liability) asset | $ | (59 | ) | $ | (8 | ) |
December 31, | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
Balance sheet classifications: | |||||||
Current: | |||||||
Deferred tax assets | $ | 15 | $ | 13 | |||
Deferred tax liabilities | (25 | ) | (21 | ) | |||
Net current deferred tax liabilities | (10 | ) | (8 | ) | |||
Non-current: | |||||||
Deferred tax assets | 7 | 18 | |||||
Deferred tax liabilities | (56 | ) | (18 | ) | |||
Net non-current deferred tax liabilities | (49 | ) | — | ||||
Net deferred tax liabilities | $ | (59 | ) | $ | (8 | ) |
Balance at beginning of year | Additions/ (releases) charged to costs and expenses | Other movements | Foreign exchange differences | Balance at end of year | |||||||||||||||
Description | |||||||||||||||||||
(millions) | |||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||
Deferred tax valuation allowance | $ | 221 | $ | 15 | $ | (40 | ) | $ | — | $ | 196 | ||||||||
Year Ended December 31, 2012 | |||||||||||||||||||
Deferred tax valuation allowance | 102 | 110 | 12 | (3 | ) | 221 | |||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||
Deferred tax valuation allowance | 87 | — | 15 | — | 102 |
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Balance at January 1 | $ | 37 | $ | 16 | $ | 13 | |||||
Reductions due to a lapse of the applicable statute of limitation | (5 | ) | (3 | ) | — | ||||||
Increases for positions taken in current period | 9 | 8 | — | ||||||||
Increases for positions taken in prior periods | — | 16 | — | ||||||||
Other movements | — | — | 3 | ||||||||
Balance at December 31 | $ | 41 | $ | 37 | $ | 16 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions, except per share data) | |||||||||||
Net income (loss) attributable to Willis Group Holdings | $ | 365 | $ | (446 | ) | $ | 204 | ||||
Basic average number of shares outstanding | 176 | 173 | 173 | ||||||||
Dilutive effect of potentially issuable shares | 3 | — | 3 | ||||||||
Diluted average number of shares outstanding | 179 | 173 | 176 | ||||||||
Basic earnings per share: | |||||||||||
Continuing operations | $ | 2.07 | $ | (2.58 | ) | $ | 1.17 | ||||
Discontinued operations | — | — | 0.01 | ||||||||
Net income (loss) attributable to Willis Group Holdings shareholders | $ | 2.07 | $ | (2.58 | ) | $ | 1.18 | ||||
Dilutive effect of potentially issuable shares | (0.03 | ) | — | (0.02 | ) | ||||||
Diluted earnings per share: | |||||||||||
Continuing operations | $ | 2.04 | $ | (2.58 | ) | $ | 1.15 | ||||
Discontinued operations | — | — | 0.01 | ||||||||
Net income (loss) attributable to Willis Group Holdings shareholders | $ | 2.04 | $ | (2.58 | ) | $ | 1.16 |
Land and buildings (i) | Leasehold improvements | Furniture and equipment | Total | ||||||||||||
(millions) | |||||||||||||||
Cost: at January 1, 2012 | $ | 73 | $ | 210 | $ | 509 | $ | 792 | |||||||
Additions | 3 | 16 | 116 | 135 | |||||||||||
Disposals | — | (4 | ) | (59 | ) | (63 | ) | ||||||||
Foreign exchange | 2 | 5 | 10 | 17 | |||||||||||
Cost: at December 31, 2012 | 78 | 227 | 576 | 881 | |||||||||||
Additions | 10 | 22 | 80 | 112 | |||||||||||
Disposals | — | (7 | ) | (43 | ) | (50 | ) | ||||||||
Foreign exchange | 1 | — | 5 | 6 | |||||||||||
Cost: at December 31, 2013 | $ | 89 | $ | 242 | $ | 618 | $ | 949 | |||||||
Depreciation: at January 1, 2012 | $ | (28 | ) | $ | (61 | ) | $ | (297 | ) | $ | (386 | ) | |||
Depreciation expense provided | (3 | ) | (17 | ) | (59 | ) | (79 | ) | |||||||
Disposals | — | 4 | 56 | 60 | |||||||||||
Foreign exchange | (1 | ) | (1 | ) | (6 | ) | (8 | ) | |||||||
Depreciation: at December 31, 2012 | (32 | ) | (75 | ) | (306 | ) | (413 | ) | |||||||
Depreciation expense provided | (3 | ) | (18 | ) | (73 | ) | (94 | ) | |||||||
Disposals | — | 6 | 36 | 42 | |||||||||||
Foreign exchange | (1 | ) | — | (2 | ) | (3 | ) | ||||||||
Depreciation: at December 31, 2013 | $ | (36 | ) | $ | (87 | ) | $ | (345 | ) | $ | (468 | ) | |||
Net book value: | |||||||||||||||
At December 31, 2012 | $ | 46 | $ | 152 | $ | 270 | $ | 468 | |||||||
At December 31, 2013 | $ | 53 | $ | 155 | $ | 273 | $ | 481 |
Global | North America | International | Total | ||||||||||||
(millions) | |||||||||||||||
Balance at January 1, 2012 | |||||||||||||||
Goodwill, gross | $ | 1,122 | $ | 1,782 | $ | 391 | $ | 3,295 | |||||||
Accumulated impairment losses | — | — | — | — | |||||||||||
Goodwill, net | 1,122 | 1,782 | 391 | 3,295 | |||||||||||
Purchase price allocation adjustments | — | — | 2 | 2 | |||||||||||
Goodwill acquired during the year | — | 10 | 2 | 12 | |||||||||||
Goodwill disposed of during the year | — | — | (1 | ) | (1 | ) | |||||||||
Goodwill impairment charge | — | (492 | ) | — | (492 | ) | |||||||||
Foreign exchange | 5 | — | 6 | 11 | |||||||||||
Balance at December 31, 2012 | |||||||||||||||
Goodwill, gross | 1,127 | 1,792 | 400 | 3,319 | |||||||||||
Accumulated impairment losses | — | (492 | ) | — | (492 | ) | |||||||||
Goodwill, net | $ | 1,127 | $ | 1,300 | $ | 400 | $ | 2,827 | |||||||
Purchase price allocation adjustments | — | (1 | ) | — | (1 | ) | |||||||||
Goodwill acquired during the year | 15 | — | 1 | 16 | |||||||||||
Goodwill disposed of during the year | — | (14 | ) | — | (14 | ) | |||||||||
Other movements (i) | — | (1 | ) | — | (1 | ) | |||||||||
Foreign exchange | 3 | — | 8 | 11 | |||||||||||
Balance at December 31, 2013 | |||||||||||||||
Goodwill, gross | 1,145 | 1,776 | 409 | 3,330 | |||||||||||
Accumulated impairment losses | — | (492 | ) | — | (492 | ) | |||||||||
Goodwill, net | $ | 1,145 | $ | 1,284 | $ | 409 | $ | 2,838 |
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Customer and Marketing Related: | |||||||||||||||||||||||
Client Relationships | $ | 671 | $ | (326 | ) | $ | 345 | $ | 717 | $ | (340 | ) | $ | 377 | |||||||||
Client Lists | 3 | (1 | ) | 2 | 3 | (1 | ) | 2 | |||||||||||||||
Non-compete Agreements | 4 | (1 | ) | 3 | 3 | — | 3 | ||||||||||||||||
Trade Names | 2 | (1 | ) | 1 | 11 | (10 | ) | 1 | |||||||||||||||
Total Customer and Marketing Related | 680 | (329 | ) | 351 | 734 | (351 | ) | 383 | |||||||||||||||
Contract based, Technology and Other | 5 | (3 | ) | 2 | 4 | (2 | ) | 2 | |||||||||||||||
Total amortizable intangible assets | $ | 685 | $ | (332 | ) | $ | 353 | $ | 738 | $ | (353 | ) | $ | 385 |
(millions) | |||
2014 | $ | 50 | |
2015 | 43 | ||
2016 | 38 | ||
2017 | 33 | ||
2018 | 29 | ||
Thereafter | 160 | ||
Total | $ | 353 |
December 31, | |||||||
Country | 2013 | 2012 | |||||
Al-Futtaim Willis Co. L.L.C. | Dubai | 49 | % | 49 | % | ||
GS & Cie Groupe | France | 30 | % | 30 | % |
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Condensed statements of operations data (i): | |||||||||||
Total revenues | $ | 502 | $ | 497 | $ | 527 | |||||
(Loss) income before income taxes | (48 | ) | (17 | ) | 5 | ||||||
Net loss | (36 | ) | (14 | ) | (2 | ) | |||||
Condensed balance sheets data (i): | |||||||||||
Total assets | 1,685 | 1,670 | 1,882 | ||||||||
Total liabilities | 1,611 | 1,559 | 1,736 | ||||||||
Stockholders’ equity | 74 | 111 | 146 |
December 31, | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
Other current assets | |||||||
Prepayments and accrued income | $ | 73 | $ | 61 | |||
Income taxes receivable | 32 | 50 | |||||
Deferred compensation plan assets | 26 | 12 | |||||
Other receivables | 66 | 58 | |||||
Total other current assets | $ | 197 | $ | 181 | |||
Other non-current assets | |||||||
Prepayments and accrued income | 16 | 24 | |||||
Deferred compensation plan assets | 88 | 97 | |||||
Income taxes receivable | 21 | 12 | |||||
Accounts receivable, net | 28 | 25 | |||||
Other investments | 19 | 12 | |||||
Other receivables | 34 | 36 | |||||
Total other non-current assets | $ | 206 | $ | 206 | |||
Total other assets | $ | 403 | $ | 387 |
December 31, | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
Other current liabilities | |||||||
Accounts payable | $ | 123 | $ | 88 | |||
Accrued dividends payable | 51 | 47 | |||||
Other taxes payable | 51 | 44 | |||||
Deferred compensation plan liability | 26 | 12 | |||||
Incentives from lessors | 12 | 9 | |||||
Other payables | 152 | 127 | |||||
Total other current liabilities | $ | 415 | $ | 327 | |||
Other non-current liabilities | |||||||
Incentives from lessors | $ | 183 | $ | 173 | |||
Deferred compensation plan liability | 89 | 101 | |||||
Income taxes payable | 40 | 33 | |||||
Other payables | 62 | 68 | |||||
Total other non-current liabilities | $ | 374 | $ | 375 | |||
Total other liabilities | $ | 789 | $ | 702 |
Balance at beginning of year | Additions/ (releases) charged to costs and expenses | Deductions / Other movements | Foreign exchange differences | Balance at end of year | |||||||||||||||
Description | |||||||||||||||||||
(millions) | |||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 14 | $ | 3 | $ | (4 | ) | $ | — | $ | 13 | ||||||||
Year Ended December 31, 2012 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 13 | $ | 16 | $ | (15 | ) | $ | — | $ | 14 | ||||||||
Year Ended December 31, 2011 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 12 | $ | 4 | $ | (3 | ) | $ | — | $ | 13 |
UK Pension Benefits | US Pension Benefits | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(millions) | |||||||||||||||
Change in benefit obligation: | |||||||||||||||
Benefit obligation, beginning of year | $ | 2,582 | $ | 2,217 | $ | 958 | $ | 895 | |||||||
Service cost | 37 | 35 | — | — | |||||||||||
Interest cost | 109 | 108 | 38 | 41 | |||||||||||
Employee contributions | 2 | 2 | — | — | |||||||||||
Actuarial loss (gain) | 79 | 186 | (81 | ) | 71 | ||||||||||
Benefits paid | (78 | ) | (77 | ) | (51 | ) | (49 | ) | |||||||
Foreign currency changes | 54 | 111 | — | — | |||||||||||
Benefit obligations, end of year | 2,785 | 2,582 | 864 | 958 | |||||||||||
Change in plan assets: | |||||||||||||||
Fair value of plan assets, beginning of year | 2,716 | 2,353 | 708 | 637 | |||||||||||
Actual return on plan assets | 255 | 226 | 60 | 80 | |||||||||||
Employee contributions | 2 | 2 | — | — | |||||||||||
Employer contributions | 100 | 92 | 40 | 40 | |||||||||||
Benefits paid | (78 | ) | (77 | ) | (51 | ) | (49 | ) | |||||||
Foreign currency changes | 66 | 120 | — | — | |||||||||||
Fair value of plan assets, end of year | 3,061 | 2,716 | 757 | 708 | |||||||||||
Funded status at end of year | $ | 276 | $ | 134 | $ | (107 | ) | $ | (250 | ) | |||||
Components on the Consolidated Balance Sheets: | |||||||||||||||
Pension benefits asset | $ | 276 | $ | 134 | $ | — | $ | — | |||||||
Liability for pension benefits | — | — | (107 | ) | (250 | ) |
UK Pension Benefits | US Pension Benefits | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(millions) | |||||||||||||||
Net actuarial loss | $ | 815 | $ | 831 | $ | 233 | $ | 332 | |||||||
Prior service gain | (24 | ) | (29 | ) | — | — |
Years ended December 31, | |||||||||||||||||||||||
UK Pension Benefits | US Pension Benefits | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Components of net periodic benefit (income) cost: | |||||||||||||||||||||||
Service cost | $ | 37 | $ | 35 | $ | 36 | $ | — | $ | — | $ | — | |||||||||||
Interest cost | 109 | 108 | 106 | 38 | 41 | 41 | |||||||||||||||||
Expected return on plan assets | (191 | ) | (181 | ) | (161 | ) | (51 | ) | (46 | ) | (44 | ) | |||||||||||
Amortization of unrecognized prior service gain | (5 | ) | (6 | ) | (5 | ) | — | — | — | ||||||||||||||
Amortization of unrecognized actuarial loss | 45 | 39 | 30 | 9 | 8 | 3 | |||||||||||||||||
Net periodic benefit (income) cost | $ | (5 | ) | $ | (5 | ) | $ | 6 | $ | (4 | ) | $ | 3 | $ | — | ||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): | |||||||||||||||||||||||
Net actuarial loss (gain) | $ | 15 | $ | 141 | $ | 164 | $ | (90 | ) | $ | 37 | $ | 137 | ||||||||||
Amortization of unrecognized actuarial loss | (45 | ) | (39 | ) | (30 | ) | (9 | ) | (8 | ) | (3 | ) | |||||||||||
Prior service gain | — | — | (10 | ) | — | — | — | ||||||||||||||||
Amortization of unrecognized prior service gain | 5 | 6 | 5 | — | — | — | |||||||||||||||||
Total recognized in other comprehensive income (loss) | $ | (25 | ) | $ | 108 | $ | 129 | $ | (99 | ) | $ | 29 | $ | 134 | |||||||||
Total recognized in net periodic benefit cost and other comprehensive income | $ | (30 | ) | $ | 103 | $ | 135 | $ | (103 | ) | $ | 32 | $ | 134 |
UK Pension Benefits | US Pension Benefits | ||||||
(millions) | |||||||
Estimated net loss | $ | 42 | $ | 6 | |||
Prior service gain | (3 | ) | — |
Years ended December 31, | |||||||||||
UK Pension Benefits | US Pension Benefits | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
Weighted-average assumptions to determine benefit obligations: | |||||||||||
Discount rate | 4.4 | % | 4.4 | % | 4.8 | % | 4.1 | % | |||
Rate of compensation increase | 3.2 | % | 2.3 | % | N/A | N/A | |||||
Weighted-average assumptions to determine net periodic benefit cost: | |||||||||||
Discount rate | 4.4 | % | 4.8 | % | 4.1 | % | 4.6 | % | |||
Expected return on plan assets | 7.3 | % | 7.5 | % | 7.3 | % | 7.3 | % | |||
Rate of compensation increase | 2.3 | % | 2.1 | % | N/A | N/A |
Years ended December 31, | ||||||||||||
UK Pension Benefits | US Pension Benefits | |||||||||||
Asset Category | 2013 | 2012 | 2013 | 2012 | ||||||||
Equity securities | 36 | % | 41 | % | 52 | % | 49 | % | ||||
Debt securities | 38 | % | 37 | % | 46 | % | 50 | % | ||||
Hedge funds | 17 | % | 17 | % | — | % | — | % | ||||
Real estate | 3 | % | 3 | % | — | % | — | % | ||||
Cash | 6 | % | 2 | % | — | % | — | % | ||||
Other | — | % | — | % | 2 | % | 1 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
UK Pension Plan | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | ||||||||||||||||
Equity securities: | ||||||||||||||||
US equities | $ | 659 | $ | 81 | $ | — | $ | 740 | ||||||||
UK equities | 239 | 17 | — | 256 | ||||||||||||
Other equities | 40 | 63 | — | 103 | ||||||||||||
Fixed income securities: | ||||||||||||||||
US Government bonds | 31 | — | — | 31 | ||||||||||||
UK Government bonds | 656 | — | — | 656 | ||||||||||||
Other Government bonds | 7 | — | 100 | 107 | ||||||||||||
UK corporate bonds | 75 | — | — | 75 | ||||||||||||
Other corporate bonds | 151 | — | — | 151 | ||||||||||||
Derivatives | — | 154 | — | 154 | ||||||||||||
Real estate | — | — | 92 | 92 | ||||||||||||
Cash | 163 | — | — | 163 | ||||||||||||
Other investments: | ||||||||||||||||
Hedge funds | — | 28 | 477 | 505 | ||||||||||||
Other | — | 28 | — | 28 | ||||||||||||
Total | $ | 2,021 | $ | 371 | $ | 669 | $ | 3,061 |
UK Pension Plan | ||||||||||||||||
December 31, 2012 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | ||||||||||||||||
Equity securities: | ||||||||||||||||
US equities | $ | 492 | $ | 108 | $ | — | $ | 600 | ||||||||
UK equities | 317 | 59 | — | 376 | ||||||||||||
Other equities | 28 | 97 | — | 125 | ||||||||||||
Fixed income securities: | ||||||||||||||||
US Government bonds | 11 | — | — | 11 | ||||||||||||
UK Government bonds | 625 | — | — | 625 | ||||||||||||
Other Government bonds | 13 | — | — | 13 | ||||||||||||
UK corporate bonds | 112 | — | — | 112 | ||||||||||||
Other corporate bonds | 29 | — | — | 29 | ||||||||||||
Derivatives | — | 217 | — | 217 | ||||||||||||
Real estate | — | — | 76 | 76 | ||||||||||||
Cash | 53 | — | — | 53 | ||||||||||||
Other investments: | ||||||||||||||||
Hedge funds | — | 27 | 431 | 458 | ||||||||||||
Other | 8 | 13 | — | 21 | ||||||||||||
Total | $ | 1,688 | $ | 521 | $ | 507 | $ | 2,716 |
US Pension Plan | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | ||||||||||||||||
Equity securities: | ||||||||||||||||
US equities | $ | 120 | $ | 125 | $ | — | $ | 245 | ||||||||
Non US equities | 116 | 33 | — | 149 | ||||||||||||
Fixed income securities: | ||||||||||||||||
US Government bonds | — | 55 | — | 55 | ||||||||||||
US corporate bonds | — | 151 | — | 151 | ||||||||||||
International fixed income securities | 58 | 42 | — | 100 | ||||||||||||
Municipal & Non US government bonds | — | 30 | — | 30 | ||||||||||||
Other investments: | ||||||||||||||||
Mortgage backed securities | — | 12 | — | 12 | ||||||||||||
Other | 9 | 6 | — | 15 | ||||||||||||
Total | $ | 303 | $ | 454 | $ | — | $ | 757 |
US Pension Plan | ||||||||||||||||
December 31, 2012 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | ||||||||||||||||
Equity securities: | ||||||||||||||||
US equities | $ | 144 | $ | 78 | $ | — | $ | 222 | ||||||||
Non US equities | 98 | 27 | — | 125 | ||||||||||||
Fixed income securities: | ||||||||||||||||
US Government bonds | — | 69 | — | 69 | ||||||||||||
US corporate bonds | — | 144 | — | 144 | ||||||||||||
International fixed income securities | 52 | 39 | — | 91 | ||||||||||||
Municipal & Non US government bonds | — | 35 | — | 35 | ||||||||||||
Other investments: | ||||||||||||||||
Mortgage backed securities | — | 13 | — | 13 | ||||||||||||
Other | 3 | 6 | — | 9 | ||||||||||||
Total | $ | 297 | $ | 411 | $ | — | $ | 708 |
UK Pension | |||
Plan | |||
Level 3 | |||
(millions) | |||
Balance at January 1, 2012 | $ | 476 | |
Purchases, sales, issuances and settlements, net | (2 | ) | |
Unrealized and realized gains relating to instruments still held at end of year | 17 | ||
Foreign exchange | 16 | ||
Balance at December 31, 2012 | $ | 507 | |
Purchases, sales, issuances and settlements, net | 121 | ||
Unrealized and realized gains relating to instruments still held at end of year | 29 | ||
Foreign exchange | 12 | ||
Balance at December 31, 2013 | $ | 669 |
Expected future benefit payments | UK Pension Benefits | US Pension Benefits | ||||
(millions) | ||||||
2014 | 84 | 38 | ||||
2015 | 88 | 42 | ||||
2016 | 89 | 44 | ||||
2017 | 93 | 46 | ||||
2018 | 94 | 49 | ||||
2019-2023 | 518 | 271 |
Other defined benefit plans | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
Change in benefit obligation: | |||||||
Benefit obligation, beginning of year | $ | 180 | $ | 131 | |||
Service cost | 3 | 3 | |||||
Interest cost | 7 | 7 | |||||
Actuarial (gain) loss | (5 | ) | 30 | ||||
Benefits paid | (6 | ) | (6 | ) | |||
Employee contributions | — | 1 | |||||
Reclassification from other non-current liabilities (i) | 10 | 9 | |||||
Foreign currency changes | 6 | 5 | |||||
Benefit obligations, end of year | 195 | 180 | |||||
Change in plan assets: | |||||||
Fair value of plan assets, beginning of year | 150 | 128 | |||||
Actual return on plan assets | 9 | 11 | |||||
Employer contributions | 10 | 11 | |||||
Employee contributions | — | 1 | |||||
Benefits paid | (6 | ) | (6 | ) | |||
Foreign currency changes | 5 | 5 | |||||
Fair value of plan assets, end of year | 168 | 150 | |||||
Funded status at end of year | $ | (27 | ) | $ | (30 | ) | |
Components on the Consolidated Balance Sheets: | |||||||
Pension benefits asset | $ | 2 | $ | 2 | |||
Liability for pension benefits | $ | (29 | ) | $ | (32 | ) |
Other defined benefit plans | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Components of net periodic benefit cost: | |||||||||||
Service cost | $ | 3 | $ | 3 | $ | 4 | |||||
Interest cost | 7 | 7 | 7 | ||||||||
Expected return on plan assets | (6 | ) | (6 | ) | (6 | ) | |||||
Amortization of unrecognized actuarial loss | 1 | — | 1 | ||||||||
Curtailment gain | — | — | (1 | ) | |||||||
Net periodic benefit cost | $ | 5 | $ | 4 | $ | 5 | |||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): | |||||||||||
Amortization of unrecognized actuarial loss | $ | (1 | ) | $ | — | $ | (1 | ) | |||
Net actuarial (gain) loss | (8 | ) | 25 | 2 | |||||||
Total recognized in other comprehensive (income) loss | (9 | ) | 25 | 1 | |||||||
Total recognized in net periodic benefit cost and other comprehensive (income) loss | $ | (4 | ) | $ | 29 | $ | 6 |
Other defined benefit plans | |||
2013 | 2012 | ||
Weighted-average assumptions to determine benefit obligations: | |||
Discount rate | 3.30% - 4.40% | 2.50% - 3.75% | |
Rate of compensation increase | 2.00% - 2.50% | 2.00% | |
Weighted-average assumptions to determine net periodic benefit cost: | |||
Discount rate | 2.50% - 4.40% | 3.30% - 5.30% | |
Expected return on plan assets | 2.00% - 4.66% | 2.00% - 5.73% | |
Rate of compensation increase | 2.00% - 2.50% | 2.50% - 3.00% |
Other defined benefit plans | ||||||
Asset Category | 2013 | 2012 | ||||
Equity securities | 35 | % | 35 | % | ||
Debt securities | 39 | % | 39 | % | ||
Real estate | 3 | % | 3 | % | ||
Derivatives | 14 | % | 16 | % | ||
Other | 9 | % | 7 | % | ||
Total | 100 | % | 100 | % |
Other defined benefit plans | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | ||||||||||||||||
Equity securities: | ||||||||||||||||
US equities | $ | 29 | $ | — | $ | — | $ | 29 | ||||||||
UK equities | 5 | — | — | 5 | ||||||||||||
Overseas equities | 26 | — | — | 26 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Other Government bonds | 61 | — | — | 61 | ||||||||||||
Corporate bonds | 4 | — | — | 4 | ||||||||||||
Derivative instruments | — | 23 | — | 23 | ||||||||||||
Real estate | — | — | 5 | 5 | ||||||||||||
Cash | 8 | — | — | 8 | ||||||||||||
Other investments: | ||||||||||||||||
Other investments | — | — | 7 | 7 | ||||||||||||
Total | $ | 133 | $ | 23 | $ | 12 | $ | 168 |
Other defined benefit plans | ||||||||||||||||
December 31, 2012 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | ||||||||||||||||
Equity securities: | ||||||||||||||||
US equities | $ | 24 | $ | — | $ | — | $ | 24 | ||||||||
UK equities | 5 | — | — | 5 | ||||||||||||
Overseas equities | 22 | — | 1 | 23 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Other Government bonds | 49 | — | — | 49 | ||||||||||||
Corporate bonds | — | 9 | — | 9 | ||||||||||||
Derivative instruments | — | 24 | — | 24 | ||||||||||||
Real estate | — | — | 5 | 5 | ||||||||||||
Cash | 5 | — | — | 5 | ||||||||||||
Other investments: | ||||||||||||||||
Other investments | — | 1 | 5 | 6 | ||||||||||||
Total | $ | 105 | $ | 34 | $ | 11 | $ | 150 |
Other defined benefit plans | ||||
Pension | ||||
Expected future benefit payments | Benefits | |||
(millions) | ||||
2014 | $ | 6 | ||
2015 | 6 | |||
2016 | 6 | |||
2017 | 6 | |||
2018 | 7 | |||
2019-2023 | 35 |
December 31, | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
Current portion of 7-year term loan facility expires 2018 | $ | 15 | $ | 15 |
December 31, | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
7-year term loan facility expires 2018 | $ | 259 | $ | 274 | |||
5.625% senior notes due 2015 | 148 | 350 | |||||
Fair value adjustment on 5.625% senior notes due 2015 | 4 | 18 | |||||
4.125% senior notes due 2016 | 299 | 299 | |||||
6.200% senior notes due 2017 | 394 | 600 | |||||
7.000% senior notes due 2019 | 187 | 300 | |||||
5.750% senior notes due 2021 | 496 | 496 | |||||
4.625% senior notes due 2023 | 249 | — | |||||
6.125% senior notes due 2043 | 274 | — | |||||
3-year term loan facility expires 2015 | 1 | 1 | |||||
$ | 2,311 | $ | 2,338 |
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
5.625% senior notes due 2015 | $ | 12 | $ | 12 | $ | 12 | |||||
12.875% senior notes due 2016 | — | — | 15 | ||||||||
4.125% senior notes due 2016 | 13 | 13 | 10 | ||||||||
6.200% senior notes due 2017 | 33 | 38 | 38 | ||||||||
7.000% senior notes due 2019 | 18 | 21 | 21 | ||||||||
5.750% senior notes due 2021 | 29 | 29 | 23 | ||||||||
4.625% senior notes due 2023 | 4 | — | — | ||||||||
6.125% senior notes due 2043 | 6 | — | — | ||||||||
7-year term loan facility expires 2018 | 6 | 6 | — | ||||||||
5-year term loan facility repaid 2011 | — | — | 14 | ||||||||
Revolving $800 million credit facility | 2 | 1 | — | ||||||||
Revolving $300 million credit facility | — | — | 4 | ||||||||
Other(i) | 3 | 8 | 19 | ||||||||
Total interest expense | $ | 126 | $ | 128 | $ | 156 |
Claims, lawsuits and other proceedings(i) | Other provisions(ii) | Total | |||||||||
(millions) | |||||||||||
Balance at January 1, 2012 | $ | 158 | $ | 38 | $ | 196 | |||||
Net provisions made during the year | 23 | (2 | ) | 21 | |||||||
Utilized in the year | (31 | ) | (10 | ) | (41 | ) | |||||
Foreign currency translation adjustment | 2 | 2 | 4 | ||||||||
Balance at December 31, 2012 | $ | 152 | $ | 28 | $ | 180 | |||||
Net provisions made during the year | 28 | 6 | 34 | ||||||||
Balances transferred in during the year (iii) | — | 13 | 13 | ||||||||
Utilized in the year | (17 | ) | (6 | ) | (23 | ) | |||||
Foreign currency translation adjustment | 1 | 1 | 2 | ||||||||
Balance at December 31, 2013 | $ | 164 | $ | 42 | $ | 206 |
Payments due by | |||||||||||||||||||
Obligations (iii) | Total | 2014 | 2015-2016 | 2017-2018 | After 2018 | ||||||||||||||
(millions) | |||||||||||||||||||
7-year term loan facility expires 2018 | $ | 274 | $ | 15 | $ | 39 | $ | 220 | $ | — | |||||||||
Interest on term loan | 19 | 5 | 9 | 5 | — | ||||||||||||||
Revolving $800 million credit facility commitment fees | 9 | 2 | 4 | 3 | — | ||||||||||||||
5.625% senior notes due 2015 | 148 | — | 148 | — | — | ||||||||||||||
Fair value adjustments on 5.625% senior notes due 2015 | 4 | — | 4 | — | — | ||||||||||||||
4.125% senior notes due 2016 | 300 | — | 300 | — | — | ||||||||||||||
6.200% senior notes due 2017 | 394 | — | — | 394 | — | ||||||||||||||
7.000% senior notes due 2019 | 187 | — | — | — | 187 | ||||||||||||||
5.750% senior notes due 2021 | 500 | — | — | — | 500 | ||||||||||||||
4.625% senior notes due 2023 | 250 | — | — | — | 250 | ||||||||||||||
6.125% senior notes due 2043 | 275 | — | — | — | 275 | ||||||||||||||
Interest on senior notes | 1,011 | 115 | 209 | 146 | 541 | ||||||||||||||
Total debt and related interest | 3,371 | 137 | 713 | 768 | 1,753 | ||||||||||||||
Operating leases(i) | 1,235 | 131 | 213 | 167 | 724 | ||||||||||||||
Pensions | 566 | 122 | 244 | 161 | 39 | ||||||||||||||
Other contractual obligations(ii) | 91 | 24 | 16 | 12 | 39 | ||||||||||||||
Total contractual obligations | $ | 5,263 | $ | 414 | $ | 1,186 | $ | 1,108 | $ | 2,555 |
Gross rental commitments | Rentals from subleases | Net rental commitments | |||||||||
(millions) | |||||||||||
2014 | $ | 131 | $ | (15 | ) | $ | 116 | ||||
2015 | 114 | (14 | ) | 100 | |||||||
2016 | 99 | (13 | ) | 86 | |||||||
2017 | 88 | (12 | ) | 76 | |||||||
2018 | 79 | (8 | ) | 71 | |||||||
Thereafter | 724 | (16 | ) | 708 | |||||||
Total | $ | 1,235 | $ | (78 | ) | $ | 1,157 |
• | CEO/Management Experience— Mr. Patel has approximately twenty years of experience as an executive of GTECH and is currently the President and Chief Executive Officer of GTECH Americas. |
• | International Experience— As CEO of GTECH Americas, an international business that operates in over 55 countries, Mr. Patel has international business experience, especially growing GTECH in developing countries, including Latin America, Eastern Europe and Asia Pacific regions. |
• | International Board Experience — Mr. Patel has served for six years on the Board and Executive Management Committee of Lottomatica Group S.p.A. (now GTECH S.p.A.), an Italian publicly held corporation with worldwide operations. |
Douglas B. Roberts — Mr. Roberts, age 66, joined the collapse of The Stanford Financial Group (‘Stanford’), for which Willis of Colorado, Inc. acted as broker of record on certain lines of insurance. The complaints in these actions generally allege that the defendants actively and materially aided Stanford’s alleged fraud by providing Stanford with certain letters regarding coverage that they knew would be used to help retain or attract actual or prospective Stanford client investors. The complaints further allege that these letters, which contain statements about Stanford and the insurance policies that the defendants placed for Stanford, contained untruths and omitted material facts and were drafted in this manner to help Stanford promote and sell its allegedly fraudulent certificates of deposit.
December 31, 2013 | December 31, 2012 | December 31, 2011 | |||||||||||||||||||||||||||||||||
Before tax amount | Tax | Net of tax amount | Before tax amount | Tax | Net of tax amount | Before tax amount | Tax | Net of tax amount | |||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | $ | 20 | $ | — | $ | 20 | $ | 46 | $ | — | $ | 46 | $ | (29 | ) | $ | — | $ | (29 | ) | |||||||||||||||
Pension funding adjustments: | |||||||||||||||||||||||||||||||||||
Foreign currency translation on pension funding adjustments | (15 | ) | 5 | (10 | ) | (31 | ) | 9 | (22 | ) | 8 | — | 8 | ||||||||||||||||||||||
Net actuarial gain (loss) | 83 | 2 | 85 | (203 | ) | 36 | (167 | ) | (303 | ) | 95 | (208 | ) | ||||||||||||||||||||||
Prior service gain | — | — | — | — | — | — | 10 | (3 | ) | 7 | |||||||||||||||||||||||||
Amortization of unrecognized actuarial loss | 55 | (9 | ) | 46 | 47 | (9 | ) | 38 | 34 | (9 | ) | 25 | |||||||||||||||||||||||
Amortization of unrecognized prior service gain | (5 | ) | 1 | (4 | ) | (6 | ) | 1 | (5 | ) | (5 | ) | 1 | (4 | ) | ||||||||||||||||||||
118 | (1 | ) | 117 | (193 | ) | 37 | (156 | ) | (256 | ) | 84 | (172 | ) | ||||||||||||||||||||||
Derivative instruments: | |||||||||||||||||||||||||||||||||||
Gain on interest rate swaps (effective element) | — | — | — | 3 | (1 | ) | 2 | 13 | (3 | ) | 10 | ||||||||||||||||||||||||
Interest rate reclassification adjustment | (5 | ) | 1 | (4 | ) | (5 | ) | 1 | (4 | ) | (14 | ) | 4 | (10 | ) | ||||||||||||||||||||
Gain on forward exchange contracts (effective element) | 10 | (2 | ) | 8 | 11 | (2 | ) | 9 | 3 | (1 | ) | 2 | |||||||||||||||||||||||
Forward exchange contract reclassification adjustment | 1 | — | 1 | (4 | ) | 1 | (3 | ) | (7 | ) | 2 | (5 | ) | ||||||||||||||||||||||
Gain on treasury lock (effective element) | 19 | (4 | ) | 15 | — | — | — | — | — | — | |||||||||||||||||||||||||
25 | (5 | ) | 20 | 5 | (1 | ) | 4 | (5 | ) | 2 | (3 | ) | |||||||||||||||||||||||
Other comprehensive income (loss) | 163 | (6 | ) | 157 | (142 | ) | 36 | (106 | ) | (290 | ) | 86 | (204 | ) | |||||||||||||||||||||
Less: Other comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||
Other comprehensive income (loss) attributable to Willis Group Holdings | $ | 163 | $ | (6 | ) | $ | 157 | $ | (142 | ) | $ | 36 | $ | (106 | ) | $ | (289 | ) | $ | 86 | $ | (203 | ) |
Net foreign currency translation adjustment | Pension funding adjustment | Net unrealized gain on derivative instruments | Total | ||||||||||||
(millions) | |||||||||||||||
Balance, December 31, 2010 | $ | (52 | ) | $ | (503 | ) | $ | 14 | $ | (541 | ) | ||||
Other comprehensive (loss) income before reclassifications | (28 | ) | (193 | ) | 12 | (209 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | — | 21 | (15 | ) | 6 | ||||||||||
Net current year other comprehensive income (loss), net of tax and noncontrolling interests | (28 | ) | (172 | ) | (3 | ) | (203 | ) | |||||||
Balance, December 31, 2011 | $ | (80 | ) | $ | (675 | ) | $ | 11 | $ | (744 | ) | ||||
Other comprehensive income (loss) before reclassifications | 46 | (189 | ) | 11 | (132 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | — | 33 | (7 | ) | 26 | ||||||||||
Net current year other comprehensive income (loss), net of tax and noncontrolling interests | 46 | (156 | ) | 4 | (106 | ) | |||||||||
Balance, December 31, 2012 | $ | (34 | ) | $ | (831 | ) | $ | 15 | $ | (850 | ) | ||||
Other comprehensive income (loss) before reclassifications | 20 | 75 | 23 | 118 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 42 | (3 | ) | 39 | ||||||||||
Net current year other comprehensive income (loss), net of tax and noncontrolling interests | 20 | 117 | 20 | 157 | |||||||||||
Balance, December 31, 2013 | $ | (14 | ) | $ | (714 | ) | $ | 35 | $ | (693 | ) |
Details about accumulated other comprehensive income components | Amount reclassified from accumulated other comprehensive income | Affected line item in the statement of operations | ||||||||||||
Years ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(millions) | ||||||||||||||
Gains and losses on cash flow hedges (Note 26) | ||||||||||||||
Interest rate swaps | $ | (5 | ) | $ | (5 | ) | $ | (14 | ) | Investment income | ||||
Foreign exchange contracts | 1 | (4 | ) | (7 | ) | Other operating expenses | ||||||||
(4 | ) | (9 | ) | (21 | ) | Total before tax | ||||||||
Tax | 1 | 2 | 6 | |||||||||||
$ | (3 | ) | $ | (7 | ) | $ | (15 | ) | Net of tax | |||||
Amortization of defined benefit pension items (Note 19) | ||||||||||||||
Prior service gain | $ | (5 | ) | $ | (6 | ) | $ | (5 | ) | Salaries and benefits | ||||
Net actuarial loss | 55 | 47 | 34 | Salaries and benefits | ||||||||||
50 | 41 | 29 | Total before tax | |||||||||||
Tax | (8 | ) | (8 | ) | (8 | ) | ||||||||
$ | 42 | $ | 33 | $ | 21 | Net of tax | ||||||||
Total reclassifications for the period | $ | 39 | $ | 26 | $ | 6 |
December 31, 2013 | December 31, 2012 | December 31, 2011 | |||||||||||||||||||||||||||||||||
Willis Group Holdings’ stockholders | Noncontrolling interests | Total equity | Willis Group Holdings’ stockholders | Noncontrolling interests | Total equity | Willis Group Holdings’ stockholders | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||||||||
Balance at January 1, | $ | 1,699 | $ | 26 | $ | 1,725 | $ | 2,486 | $ | 31 | $ | 2,517 | $ | 2,577 | $ | 31 | $ | 2,608 | |||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||
Net income (loss) | 365 | 12 | 377 | (446 | ) | 13 | (433 | ) | 204 | 16 | 220 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 157 | — | 157 | (106 | ) | — | (106 | ) | (203 | ) | (1 | ) | (204 | ) | |||||||||||||||||||||
Comprehensive income (loss) | 522 | 12 | 534 | (552 | ) | 13 | (539 | ) | 1 | 15 | 16 | ||||||||||||||||||||||||
Dividends | (197 | ) | (10 | ) | (207 | ) | (187 | ) | (11 | ) | (198 | ) | (180 | ) | (15 | ) | (195 | ) | |||||||||||||||||
Additional paid-in capital | 195 | — | 195 | 81 | — | 81 | 88 | — | 88 | ||||||||||||||||||||||||||
Repurchase of shares (i) | — | — | — | (100 | ) | — | (100 | ) | — | — | — | ||||||||||||||||||||||||
Purchase of subsidiary shares from noncontrolling interests | (4 | ) | — | (4 | ) | (31 | ) | (8 | ) | (39 | ) | — | — | — | |||||||||||||||||||||
Additional noncontrolling interests | — | — | — | 2 | 1 | 3 | — | — | — | ||||||||||||||||||||||||||
Balance at December 31, | $ | 2,215 | $ | 28 | $ | 2,243 | $ | 1,699 | $ | 26 | $ | 1,725 | $ | 2,486 | $ | 31 | $ | 2,517 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Net income (loss) attributable to Willis Group Holdings | $ | 365 | $ | (446 | ) | $ | 204 | ||||
Transfers from noncontrolling interest: | |||||||||||
Decrease in Willis Group Holdings’ paid-in capital for purchase of noncontrolling interest | (4 | ) | (31 | ) | — | ||||||
Increase in Willis Group Holdings’ paid-in capital for sale of noncontrolling interest | — | 2 | — | ||||||||
Net transfers from noncontrolling interest | (4 | ) | (29 | ) | — | ||||||
Change from net income (loss) attributable to Willis Group Holdings and transfers from noncontrolling interests | $ | 361 | $ | (475 | ) | $ | 204 |
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash payments for income taxes, net | $ | 61 | $ | 63 | $ | 15 | |||||
Cash payments for interest | 117 | 118 | 128 | ||||||||
Supplemental disclosures of non-cash investing and financing activities: | |||||||||||
Write-off of unamortized debt issuance costs | $ | (2 | ) | $ | — | $ | (23 | ) | |||
Write-back of fair value adjustment on 5.625% senior notes due 2015 | 7 | — | — | ||||||||
Assets acquired under capital leases | 7 | 2 | — | ||||||||
Deferred payments on acquisitions of subsidiaries | 2 | 4 | 6 | ||||||||
Acquisitions: | |||||||||||
Fair value of assets acquired | $ | 47 | $ | 23 | $ | 6 | |||||
Less: | |||||||||||
Liabilities assumed | 30 | 3 | 3 | ||||||||
Cash acquired | 1 | — | 3 | ||||||||
Net assets acquired, net of cash acquired | $ | 16 | $ | 20 | $ | — |
• | Legal, Governmental, Political or Diplomatic Experience — Mr. Roberts has a deep understanding of public finance and other public policy matters from his 28-year tenure in state government, including his years as a Michigan state treasurer and his current academic position. As Michigan state treasurer, he oversaw the state’s revenue and cash positions during a period of rebirth in Michigan’s finances and economy which included five ratings upgrades. In addition, the state Treasurer is the sole fiduciary of the state’s pension systems valued at approximately $50 billion. |
• | Financial Background and Extensive Knowledge of the Company’s Business — Mr. Roberts’ business experience and education also qualify him as an audit committee financial expert and have positioned him well to serve as a Company’s director and as the Chairman of our Audit Committee. |
Dr. Michael J. Somers — Dr. Somers, age 71, joined the various currencies related to the short-term investments. The use of interest rate contracts essentially converted groups of short-term variable rate investments to fixed rate investments. The fair value of these contracts was recorded in other assetsBoard on April 21, 2010 and other liabilities. For contracts that qualified as cash flow hedges for accounting purposes, the effective portions of changes in fair value were recordedcurrently serves as a component of other comprehensive income, to the extent that the hedge relationships were highly effective.
December 31, | |||||||
Sell 2013(i) | Sell 2012 | ||||||
(millions) | |||||||
US dollar | $ | 303 | $ | 255 | |||
Euro | 97 | 55 | |||||
Japanese yen | 35 | 32 |
Financial Background — Dr. Somers has an extensive finance background as a result of his experience relating to |
• | International Business and Board Experience — Dr. Somers has extensive knowledge and experience in serving the Irish and European financial, business and governmental communities, including through his service on a number of Irish Boards. The Irish market is important to the Company which completed its redomicile to Ireland, in part, to facilitate business expansion. Dr. Somers also brings his experience on the Audit Committee and Risk Committee of various entities. |
Jeffrey W. Ubben — Mr. Ubben, age 52, joined the Board on July 23, 2013 and is a member of the Company’s Risk Committee. Mr. Ubben is a Founder, Chief Executive Officer and the Chief Investment Officer of ValueAct Capital. Prior to founding ValueAct Capital in 2000, Mr. Ubben was a Managing Partner at Blum Capital Partners for more than five years. Previously, Mr. Ubben spent eight years at Fidelity Investments where he managed the Fidelity Value Fund. Mr. Ubben is a former director and member of the Compensation Committee of Acxiom Corp., a former director and member of the Compensation Committee of Gartner Group, Inc., a former director and member of the Audit and Finance Committee of Misys, plc, a former director and member of the Nomination and Governance Committee of Omnicare, Inc., a former director and member of the Audit and Finance Committee of Sara Lee Corp. and a former director of several other public and private companies. In addition, to forward exchange contracts we undertake short-term foreign exchange swaps for liquidity purposes. These are not designatedMr. Ubben serves as hedgeschairman of the national board of the Posse Foundation, is on the board of trustees of Northwestern University, and do not qualify for hedge accounting. The fair valuesis also on the board of the American Conservatory Theater. He has a B.A. from Duke University and an M.B.A. from the J. L. Kellogg Graduate School of Management at
• | Financial Background — Mr. Ubben has more than 20 years of experience in the investment management business. |
• | CEO/Management Experience — Mr. Ubben’s leadership roles include serving as Chief Executive Officer and Chief Investment Officer of ValueAct Capital since 2000 and as Managing Partner at Blum Capital Partners for more than five years prior to joining ValueAct. |
• | Board and Committee Experience — Mr. Ubben also brings experience from his prior service as a director and board committee member of numerous global public companies. |
On April 25, 2013, the Company entered into a number of foreign currency transactions in orderNomination Agreement with ValueAct pursuant to hedge certain intercompany loans. These derivatives were not designated as hedging instruments and were for a total notional amount of $228 million (December 31, 2012: $63 million). In respect of these transactions, an immaterial amount has been recognized as an asset within other current assets and a nominal gain has been recognized in income within other operating expenses for the period.
Fair value | |||||||||
Balance sheet | December 31, | December 31, | |||||||
Derivative financial instruments designated as hedging instruments: | classification | 2013 | 2012 | ||||||
(millions) | |||||||||
Assets: | |||||||||
Interest rate swaps (fair value hedges) | Other assets | — | 22 | ||||||
Forward exchange contracts | Other assets | 23 | 9 | ||||||
Total derivatives designated as hedging instruments | $ | 23 | $ | 31 | |||||
Liabilities: | |||||||||
Forward exchange contracts | Other liabilities | 2 | — | ||||||
Total derivatives designated as hedging instruments | $ | 2 | $ | — |
Derivatives in cash flow hedging relationships | Amount of gain (loss) recognized in OCI(i)on derivative (effective element) | Location of gain (loss) reclassified from accumulated OCI(i) into income (effective element) | Amount of gain (loss) reclassified from accumulated OCI(i) into income(effective element) | Location of gain (loss) recognized in income on derivative (ineffective hedges and ineffective element of effective hedges) | Amount of gain (loss) recognized in income on derivative (ineffective hedges and ineffective element of effective hedges) | ||||||||||
(millions) | (millions) | (millions) | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||||
Interest rate swaps | $ | — | Investment income | $ | (5 | ) | Other operating expenses | $ | — | ||||||
Treasury locks | 19 | Interest expense | — | Interest expense | 2 | ||||||||||
Forward exchange contracts | 10 | Other operating expenses | 1 | Interest expense | 1 | ||||||||||
Total | $ | 29 | $ | (4 | ) | $ | 3 | ||||||||
Year Ended December 31, 2012 | |||||||||||||||
Interest rate swaps | $ | 3 | Investment income | $ | (5 | ) | Other operating expenses | $ | — | ||||||
Forward exchange contracts | 11 | Other operating expenses | (4 | ) | Interest expense | 1 | |||||||||
Total | $ | 14 | $ | (9 | ) | $ | 1 | ||||||||
Year Ended December 31, 2011 | |||||||||||||||
Interest rate swaps | $ | 13 | Investment income | $ | (14 | ) | Other operating expenses | $ | — | ||||||
Forward exchange contracts | 3 | Other operating expenses | (7 | ) | Interest expense | (2 | ) | ||||||||
Total | $ | 16 | $ | (21 | ) | $ | (2 | ) |
Derivatives in fair value hedging relationships | Hedged item in fair value hedging relationship | (Loss) gain recognized for derivative | Gain (loss) recognized for hedged item | Ineffectiveness recognized in interest expense | |||||||||
(millions) | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||
Interest rate swaps | 5.625% senior notes due 2015 | $ | — | $ | — | $ | — | ||||||
Year Ended December 31, 2012 | |||||||||||||
Interest rate swaps | 5.625% senior notes due 2015 | $ | (3 | ) | $ | 2 | $ | 1 | |||||
Year Ended December 31, 2011 | |||||||||||||
Interest rate swaps | 5.625% senior notes due 2015 | $ | 7 | $ | (8 | ) | $ | 1 |
Derivatives no longer in fair value hedging relationships | Hedged item in fair value hedging relationship | Loss recognized for derivative | Amortization or prior loss recognized on hedged item | Net gain recognized (i) | |||||||||
(millions) | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||
Interest rate swaps | 5.625% senior notes due 2015 | $ | (5 | ) | $ | 14 | $ | 9 | |||||
Year Ended December 31, 2012 | |||||||||||||
Interest rate swaps | 5.625% senior notes due 2015 | $ | — | $ | — | $ | — | ||||||
Year Ended December 31, 2011 | |||||||||||||
Interest rate swaps | 5.625% senior notes due 2015 | $ | — | $ | — | $ | — |
Executive Officers
The following table presents, forsets forth, as of April 23, 2014, the name, age and position of each of our executive officers. Executive officers are elected by, and serve at the fair-value hierarchy levels, the Company's assets and liabilities that are measured at fair value on a recurring basis.
December 31, 2013 | |||||||||||||||
Quoted prices in active markets for identical assets | Significant other observable inputs | Significant other unobservable inputs | |||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | |||||||||||||||
Assets at fair value: | |||||||||||||||
Cash and cash equivalents | $ | 796 | $ | — | $ | — | $ | 796 | |||||||
Fiduciary funds (included within Fiduciary assets) | 1,662 | — | — | 1,662 | |||||||||||
Derivative financial instruments | — | 23 | — | 23 | |||||||||||
Total assets | $ | 2,458 | $ | 23 | $ | — | $ | 2,481 | |||||||
Liabilities at fair value: | |||||||||||||||
Derivative financial instruments | $ | — | $ | 2 | $ | — | $ | 2 | |||||||
Total liabilities | $ | — | $ | 2 | $ | — | $ | 2 |
December 31, 2012 | |||||||||||||||
Quoted prices in active markets for identical assets | Significant other observable inputs | Significant other unobservable inputs | |||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(millions) | |||||||||||||||
Assets at fair value: | |||||||||||||||
Cash and cash equivalents | $ | 500 | $ | — | $ | — | $ | 500 | |||||||
Fiduciary funds (included within Fiduciary assets) | 1,796 | — | — | 1,796 | |||||||||||
Derivative financial instruments | — | 31 | — | 31 | |||||||||||
Total assets | $ | 2,296 | $ | 31 | $ | — | $ | 2,327 | |||||||
Liabilities at fair value: | |||||||||||||||
Changes in fair value of hedged debt(i) | — | 18 | — | 18 | |||||||||||
Total liabilities | $ | — | $ | 18 | $ | — | $ | 18 |
December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Carrying amount | Fair value | Carrying amount | Fair value | ||||||||||||
(millions) | |||||||||||||||
Assets: | |||||||||||||||
Derivative financial instruments | $ | 23 | $ | 23 | $ | 31 | $ | 31 | |||||||
Liabilities: | |||||||||||||||
Short-term debt | $ | 15 | $ | 15 | $ | 15 | $ | 15 | |||||||
Long-term debt | 2,311 | 2,444 | 2,338 | 2,576 | |||||||||||
Derivative financial instruments | 2 | 2 | — | — |
Commissions and fees | Investment income | Other income | Total revenues | Depreciation and amortization | Operating income (loss) | Interest in earnings of associates, net of tax | |||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Global | $ | 1,188 | $ | 3 | $ | — | $ | 1,191 | $ | 31 | $ | 334 | $ | — | |||||||||||||
North America | 1,377 | 2 | 7 | 1,386 | 37 | 269 | — | ||||||||||||||||||||
International | 1,068 | 10 | — | 1,078 | 21 | 181 | — | ||||||||||||||||||||
Total Retail | 2,445 | 12 | 7 | 2,464 | 58 | 450 | — | ||||||||||||||||||||
Total Operating Segments | 3,633 | 15 | 7 | 3,655 | 89 | 784 | — | ||||||||||||||||||||
Corporate and Other(i) | — | — | — | — | 60 | (99 | ) | — | |||||||||||||||||||
Total Consolidated | $ | 3,633 | $ | 15 | $ | 7 | $ | 3,655 | $ | 149 | $ | 685 | $ | — | |||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Global | $ | 1,124 | $ | 5 | $ | — | $ | 1,129 | $ | 27 | $ | 372 | $ | — | |||||||||||||
North America | 1,306 | 3 | 4 | 1,313 | 31 | 240 | — | ||||||||||||||||||||
International | 1,028 | 10 | — | 1,038 | 21 | 183 | 5 | ||||||||||||||||||||
Total Retail | 2,334 | 13 | 4 | 2,351 | 52 | 423 | 5 | ||||||||||||||||||||
Total Operating Segments | 3,458 | 18 | 4 | 3,480 | 79 | 795 | 5 | ||||||||||||||||||||
Corporate and Other(i) | — | — | — | — | 59 | (1,004 | ) | — | |||||||||||||||||||
Total Consolidated | $ | 3,458 | $ | 18 | $ | 4 | $ | 3,480 | $ | 138 | $ | (209 | ) | $ | 5 | ||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||
Global | $ | 1,073 | $ | 9 | $ | — | $ | 1,082 | $ | 23 | $ | 352 | $ | — | |||||||||||||
North America | 1,314 | 7 | 2 | 1,323 | 28 | 271 | — | ||||||||||||||||||||
International | 1,027 | 15 | — | 1,042 | 18 | 221 | 12 | ||||||||||||||||||||
Total Retail | 2,341 | 22 | 2 | 2,365 | 46 | 492 | 12 | ||||||||||||||||||||
Total Operating Segments | 3,414 | 31 | 2 | 3,447 | 69 | 844 | 12 | ||||||||||||||||||||
Corporate and Other(i) | — | — | — | — | 73 | (278 | ) | — | |||||||||||||||||||
Total Consolidated | $ | 3,414 | $ | 31 | $ | 2 | $ | 3,447 | $ | 142 | $ | 566 | $ | 12 |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Amortization of intangible assets | $ | (55 | ) | $ | (59 | ) | $ | (68 | ) | ||
Additional incentive accrual for change in remuneration policy (a) | — | (252 | ) | — | |||||||
Write-off of unamortized cash retention awards debtor (b) | — | (200 | ) | — | |||||||
Goodwill impairment charge (c) | — | (492 | ) | — | |||||||
India joint venture settlement (d) | — | (11 | ) | — | |||||||
Insurance recovery (e) | — | 10 | — | ||||||||
Write-off of uncollectible accounts receivable balance in Chicago (f) | — | (13 | ) | (22 | ) | ||||||
Net gain (loss) on disposal of operations (d) | 2 | (3 | ) | 4 | |||||||
Foreign exchange hedging | 3 | 8 | 5 | ||||||||
Foreign exchange gain (loss) on the UK pension plan asset | 8 | (1 | ) | — | |||||||
2011 Operational Review | — | — | (180 | ) | |||||||
FSA regulatory settlement | — | — | (11 | ) | |||||||
Expense Reduction Initiative | (46 | ) | — | — | |||||||
Fees related to the extinguishment of debt (h) | (1 | ) | — | — | |||||||
Other(g) | (10 | ) | 9 | (6 | ) | ||||||
Total Corporate and Other | $ | (99 | ) | $ | (1,004 | ) | $ | (278 | ) |
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Total consolidated operating income | $ | 685 | $ | (209 | ) | $ | 566 | ||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | — | — | (171 | ) | |||||||
Loss on extinguishment of debt | (60 | ) | — | — | |||||||
Interest expense | (126 | ) | (128 | ) | (156 | ) | |||||
Income (loss) from continuing operations before income taxes and interest in earnings of associates | $ | 499 | $ | (337 | ) | $ | 239 |
Years ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||
Global | North America | International | Total | ||||||||||||||||||||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Commissions and fees: | |||||||||||||||||||||||||||||||||||||||||||||||
Retail insurance services | $ | — | $ | — | $ | — | $ | 1,377 | $ | 1,306 | $ | 1,314 | $ | 1,068 | $ | 1,028 | $ | 1,027 | $ | 2,445 | $ | 2,334 | $ | 2,341 | |||||||||||||||||||||||
Specialty insurance services | 1,188 | 1,124 | 1,073 | — | — | — | — | — | — | 1,188 | 1,124 | 1,073 | |||||||||||||||||||||||||||||||||||
Total commissions and fees | 1,188 | 1,124 | 1,073 | 1,377 | 1,306 | 1,314 | 1,068 | 1,028 | 1,027 | 3,633 | 3,458 | 3,414 | |||||||||||||||||||||||||||||||||||
Investment income | 3 | 5 | 9 | 2 | 3 | 7 | 10 | 10 | 15 | 15 | 18 | 31 | |||||||||||||||||||||||||||||||||||
Other income | — | — | — | 7 | 4 | 2 | — | — | — | 7 | 4 | 2 | |||||||||||||||||||||||||||||||||||
Total Revenues | $ | 1,191 | $ | 1,129 | $ | 1,082 | $ | 1,386 | $ | 1,313 | $ | 1,323 | $ | 1,078 | $ | 1,038 | $ | 1,042 | $ | 3,655 | $ | 3,480 | $ | 3,447 |
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(millions) | |||||||||||
Commissions and fees(i) | |||||||||||
UK | $ | 1,026 | $ | 980 | $ | 963 | |||||
US | 1,549 | 1,484 | 1,461 | ||||||||
Other(ii) | 1,058 | 994 | 990 | ||||||||
Total | $ | 3,633 | $ | 3,458 | $ | 3,414 |
December 31, | |||||||
2013 | 2012 | ||||||
(millions) | |||||||
Fixed assets | |||||||
UK | $ | 233 | $ | 218 | |||
US | 203 | 207 | |||||
Other(ii) | 45 | 43 | |||||
Total | $ | 481 | $ | 468 |
Name | Age | |||
Position | ||||
Celia Brown | 59 | Willis Group Human Resources Director |
Dominic Casserley | 56 | Chief Executive Officer of Willis Group Holdings |
Stephen Hearn | 47 | Deputy CEO; Chairman and CEO of |
Todd Jones | 49 | CEO of Willis North |
Michael K. Neborak* | 57 | Group Chief Financial Officer |
Adam L. Rosman | 48 | Group General Counsel |
David Shalders |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of operations for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Operating loss | $ | (6 | ) | $ | — | $ | (6 | ) | |||
Net loss attributable to Willis Group Holdings | (446 | ) | — | (446 | ) | ||||||
The Other Guarantors | |||||||||||
Operating loss | $ | (72 | ) | $ | (11 | ) | $ | (83 | ) | ||
Net loss attributable to Willis Group Holdings | (389 | ) | (8 | ) | (397 | ) | |||||
The Issuer | |||||||||||
Operating loss | $ | (189 | ) | $ | — | $ | (189 | ) | |||
Net loss attributable to Willis Group Holdings | (228 | ) | — | (228 | ) | ||||||
Other | |||||||||||
Operating income (loss) | $ | 122 | $ | (53 | ) | $ | 69 | ||||
Net loss attributable to Willis Group Holdings | (118 | ) | (306 | ) | (424 | ) | |||||
Consolidating adjustments | |||||||||||
Operating (loss) income | $ | (64 | ) | $ | 64 | $ | — | ||||
Net income attributable to Willis Group Holdings | 735 | 314 | 1,049 | ||||||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of operations for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings | |||||||||||
Operating loss | $ | (20 | ) | $ | — | $ | (20 | ) | |||
Net income attributable to Willis Group Holdings | 204 | — | 204 | ||||||||
The Other Guarantors | |||||||||||
Operating income (loss) | $ | 43 | $ | (11 | ) | $ | 32 | ||||
Net income attributable to Willis Group Holdings | 174 | 72 | 246 | ||||||||
The Issuer | |||||||||||
Operating loss | $ | (179 | ) | $ | — | $ | (179 | ) | |||
Net loss attributable to Willis Group Holdings | (36 | ) | (31 | ) | (67 | ) | |||||
Other | |||||||||||
Operating income (loss) | $ | 754 | $ | (21 | ) | $ | 733 | ||||
Net income attributable to Willis Group Holdings | 137 | 164 | 301 | ||||||||
Consolidating adjustments | |||||||||||
Operating (loss) income | $ | (32 | ) | $ | 32 | $ | — | ||||
Net loss attributable to Willis Group Holdings | (275 | ) | (205 | ) | (480 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of comprehensive income for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (552 | ) | $ | — | $ | (552 | ) | |||
The Other Guarantors | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (486 | ) | $ | (8 | ) | $ | (494 | ) | ||
The Issuer | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (263 | ) | $ | — | $ | (263 | ) | |||
Other | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (226 | ) | $ | (306 | ) | $ | (532 | ) | ||
Consolidating adjustments | |||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 975 | $ | 314 | $ | 1,289 | |||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of comprehensive income for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings | |||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 1 | $ | — | $ | 1 | |||||
The Other Guarantors | |||||||||||
Comprehensive (loss) income attributable to Willis Group Holdings | $ | (24 | ) | $ | 72 | $ | 48 | ||||
The Issuer | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (117 | ) | $ | (31 | ) | $ | (148 | ) | ||
Other | |||||||||||
Comprehensive (loss) income attributable to Willis Group Holdings | $ | (65 | ) | $ | 164 | $ | 99 | ||||
Consolidating adjustments | |||||||||||
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 206 | $ | (205 | ) | $ | 1 |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating balance sheet at 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Total assets | $ | 2,557 | $ | 1,541 | $ | 4,098 | |||||
Total liabilities | 858 | 1,541 | 2,399 | ||||||||
Total equity | 1,699 | — | 1,699 | ||||||||
The Other Guarantors | |||||||||||
Total assets | $ | (1,256 | ) | $ | 4,844 | $ | 3,588 | ||||
Total liabilities | 319 | 4,930 | 5,249 | ||||||||
Total equity | (1,575 | ) | (86 | ) | (1,661 | ) | |||||
The Issuer | |||||||||||
Total assets | $ | 1,382 | $ | 1,246 | $ | 2,628 | |||||
Total liabilities | 1,348 | 1,246 | 2,594 | ||||||||
Total equity | 34 | — | 34 | ||||||||
Other | |||||||||||
Total assets | $ | 17,125 | $ | (1,483 | ) | $ | 15,642 | ||||
Total liabilities | 11,851 | 720 | 12,571 | ||||||||
Total equity | 5,274 | (2,203 | ) | 3,071 | |||||||
Consolidating adjustments | |||||||||||
Total assets | $ | (4,696 | ) | $ | (6,148 | ) | $ | (10,844 | ) | ||
Total liabilities | (989 | ) | (8,437 | ) | (9,426 | ) | |||||
Total equity | (3,707 | ) | 2,289 | (1,418 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of cash flows for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Net cash (used in) provided by operating activities | $ | (42 | ) | $ | 19 | $ | (23 | ) | |||
Net cash provided by investing activities | — | 256 | 256 | ||||||||
Net cash provided by (used in) financing activities | 43 | (275 | ) | (232 | ) | ||||||
The Other Guarantors | |||||||||||
Net cash provided by operating activities | $ | 780 | $ | 724 | $ | 1,504 | |||||
Net cash used in investing activities | (7 | ) | (102 | ) | (109 | ) | |||||
Net cash used in financing activities | (773 | ) | (622 | ) | (1,395 | ) | |||||
The Issuer | |||||||||||
Net cash provided by (used in) operating activities | $ | 69 | $ | (113 | ) | $ | (44 | ) | |||
Net cash (used in) provided by investing activities | (19 | ) | 34 | 15 | |||||||
Net cash (used in) provided by financing activities | (213 | ) | 79 | (134 | ) | ||||||
Other | |||||||||||
Net cash provided by (used in) operating activities | $ | 431 | $ | (528 | ) | $ | (97 | ) | |||
Net cash (used in) provided by investing activities | (146 | ) | 1,149 | 1,003 | |||||||
Net cash used in financing activities | (61 | ) | (621 | ) | (682 | ) | |||||
Consolidating adjustments | |||||||||||
Net cash used in operating activities | $ | (713 | ) | $ | (102 | ) | $ | (815 | ) | ||
Net cash used in investing activities | — | (1,337 | ) | (1,337 | ) | ||||||
Net cash provided by financing activities | 713 | 1,439 | 2,152 | ||||||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of cash flows for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings | |||||||||||
Net cash (used in) provided by operating activities | $ | (41 | ) | $ | 85 | $ | 44 | ||||
Net cash used in investing activities | — | (711 | ) | (711 | ) | ||||||
Net cash provided by financing activities | 41 | 626 | 667 | ||||||||
The Other Guarantors | |||||||||||
Net cash provided by operating activities | $ | 184 | $ | 132 | $ | 316 | |||||
Net cash used in investing activities | (4 | ) | (430 | ) | (434 | ) | |||||
Net cash (used in) provided by financing activities | (180 | ) | 298 | 118 | |||||||
The Issuer | |||||||||||
Net cash provided by operating activities | $ | 88 | $ | 46 | $ | 134 | |||||
Net cash (used in) provided by investing activities | (21 | ) | 128 | 107 | |||||||
Net cash provided by (used in) financing activities | 20 | (174 | ) | (154 | ) | ||||||
Other | |||||||||||
Net cash provided by (used in) operating activities | $ | 1,269 | $ | (1,138 | ) | $ | 131 | ||||
Net cash (used in) provided by investing activities | (76 | ) | 123 | 47 | |||||||
Net cash (used in) provided by financing activities | (1,156 | ) | 1,015 | (141 | ) | ||||||
Consolidating adjustments | |||||||||||
Net cash (used in) provided by operating activities | $ | (1,061 | ) | $ | 875 | $ | (186 | ) | |||
Net cash provided by investing activities | — | 890 | 890 | ||||||||
Net cash provided by (used in) financing activities | 1,061 | (1,765 | ) | (704 | ) |
Year Ended December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Commissions and fees | $ | — | $ | — | $ | 8 | $ | 3,625 | $ | — | $ | 3,633 | |||||||||||
Investment income | — | — | — | 15 | — | 15 | |||||||||||||||||
Other income | — | — | — | 7 | — | 7 | |||||||||||||||||
Total revenues | — | — | 8 | 3,647 | — | 3,655 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Salaries and benefits | (1 | ) | — | (103 | ) | (2,103 | ) | — | (2,207 | ) | |||||||||||||
Other operating expenses | — | (73 | ) | (163 | ) | (380 | ) | — | (616 | ) | |||||||||||||
Depreciation expense | — | (3 | ) | (20 | ) | (71 | ) | — | (94 | ) | |||||||||||||
Amortization of intangible assets | — | — | — | (55 | ) | — | (55 | ) | |||||||||||||||
Net gain on disposal of operations | — | — | — | 12 | (10 | ) | 2 | ||||||||||||||||
Total expenses | (1 | ) | (76 | ) | (286 | ) | (2,597 | ) | (10 | ) | (2,970 | ) | |||||||||||
OPERATING (LOSS) INCOME | (1 | ) | (76 | ) | (278 | ) | 1,050 | (10 | ) | 685 | |||||||||||||
Income from Group undertakings | — | 191 | 364 | 86 | (641 | ) | — | ||||||||||||||||
Expenses due to Group undertakings | (10 | ) | (34 | ) | (141 | ) | (456 | ) | 641 | — | |||||||||||||
Loss on extinguishment of debt | — | — | (60 | ) | — | — | (60 | ) | |||||||||||||||
Interest expense | (42 | ) | (16 | ) | (63 | ) | (5 | ) | — | (126 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (53 | ) | 65 | (178 | ) | 675 | (10 | ) | 499 | ||||||||||||||
Income taxes | — | 23 | — | (145 | ) | — | (122 | ) | |||||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (53 | ) | 88 | (178 | ) | 530 | (10 | ) | 377 | ||||||||||||||
Interest in earnings of associates, net of tax | — | 9 | — | (9 | ) | — | — | ||||||||||||||||
Equity account for subsidiaries | 418 | 320 | 150 | — | (888 | ) | — | ||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 365 | 417 | (28 | ) | 521 | (898 | ) | 377 | |||||||||||||||
Discontinued operations, net of tax | — | — | — | — | — | — | |||||||||||||||||
NET INCOME (LOSS) | 365 | 417 | (28 | ) | 521 | (898 | ) | 377 | |||||||||||||||
Less: Net loss attributable to noncontrolling interests | — | — | — | (12 | ) | — | (12 | ) | |||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 365 | $ | 417 | $ | (28 | ) | $ | 509 | $ | (898 | ) | $ | 365 |
Year Ended December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Comprehensive income | $ | 522 | $ | 565 | $ | 74 | $ | 636 | $ | (1,263 | ) | $ | 534 | ||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | — | (12 | ) | — | (12 | ) | |||||||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 522 | $ | 565 | $ | 74 | $ | 624 | $ | (1,263 | ) | $ | 522 |
Year Ended December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Commissions and fees | $ | — | $ | — | $ | — | $ | 3,458 | $ | — | $ | 3,458 | |||||||||||
Investment income | — | — | 1 | 17 | — | 18 | |||||||||||||||||
Other income | — | — | — | 4 | — | 4 | |||||||||||||||||
Total revenues | — | — | 1 | 3,479 | — | 3,480 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Salaries and benefits | (2 | ) | — | (96 | ) | (2,377 | ) | — | (2,475 | ) | |||||||||||||
Other operating expenses | (4 | ) | (82 | ) | (79 | ) | (416 | ) | — | (581 | ) | ||||||||||||
Depreciation expense | — | (1 | ) | (15 | ) | (63 | ) | — | (79 | ) | |||||||||||||
Amortization of intangible assets | — | — | — | (59 | ) | — | (59 | ) | |||||||||||||||
Goodwill impairment charge | — | — | — | (492 | ) | — | (492 | ) | |||||||||||||||
Net loss on disposal of operations | — | — | — | (3 | ) | — | (3 | ) | |||||||||||||||
Total expenses | (6 | ) | (83 | ) | (190 | ) | (3,410 | ) | — | (3,689 | ) | ||||||||||||
OPERATING (LOSS) INCOME | (6 | ) | (83 | ) | (189 | ) | 69 | — | (209 | ) | |||||||||||||
Income from Group undertakings | — | 201 | 316 | 111 | (628 | ) | — | ||||||||||||||||
Expenses due to Group undertakings | — | (67 | ) | (147 | ) | (414 | ) | 628 | — | ||||||||||||||
Interest expense | (43 | ) | (7 | ) | (70 | ) | (8 | ) | — | (128 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (49 | ) | 44 | (90 | ) | (242 | ) | — | (337 | ) | |||||||||||||
Income taxes | — | 31 | 34 | (166 | ) | — | (101 | ) | |||||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (49 | ) | 75 | (56 | ) | (408 | ) | — | (438 | ) | |||||||||||||
Interest in earnings of associates, net of tax | — | 8 | — | (3 | ) | — | 5 | ||||||||||||||||
Equity account for subsidiaries | (397 | ) | (480 | ) | (172 | ) | — | 1,049 | — | ||||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS | (446 | ) | (397 | ) | (228 | ) | (411 | ) | 1,049 | (433 | ) | ||||||||||||
Discontinued operations, net of tax | — | — | — | — | — | — | |||||||||||||||||
NET (LOSS) INCOME | (446 | ) | (397 | ) | (228 | ) | (411 | ) | 1,049 | (433 | ) | ||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | — | (13 | ) | — | (13 | ) | |||||||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | (446 | ) | $ | (397 | ) | $ | (228 | ) | $ | (424 | ) | $ | 1,049 | $ | (446 | ) |
Year Ended December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Comprehensive loss | $ | (552 | ) | $ | (494 | ) | $ | (263 | ) | $ | (519 | ) | $ | 1,289 | $ | (539 | ) | ||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | — | (13 | ) | — | (13 | ) | |||||||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (552 | ) | $ | (494 | ) | $ | (263 | ) | $ | (532 | ) | $ | 1,289 | $ | (552 | ) |
Year Ended December 31, 2011 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Commissions and fees | $ | — | $ | — | $ | — | $ | 3,414 | $ | — | $ | 3,414 | |||||||||||
Investment income | — | — | 2 | 29 | — | 31 | |||||||||||||||||
Other income | — | — | — | 2 | — | 2 | |||||||||||||||||
Total revenues | — | — | 2 | 3,445 | — | 3,447 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Salaries and benefits | (3 | ) | — | (69 | ) | (2,015 | ) | — | (2,087 | ) | |||||||||||||
Other operating expenses | (17 | ) | 32 | (98 | ) | (573 | ) | — | (656 | ) | |||||||||||||
Depreciation expense | — | — | (14 | ) | (60 | ) | — | (74 | ) | ||||||||||||||
Amortization of intangible assets | — | — | — | (68 | ) | — | (68 | ) | |||||||||||||||
Net gain on disposal of operations | — | — | — | 4 | — | 4 | |||||||||||||||||
Total expenses | (20 | ) | 32 | (181 | ) | (2,712 | ) | — | (2,881 | ) | |||||||||||||
OPERATING (LOSS) INCOME | (20 | ) | 32 | (179 | ) | 733 | — | 566 | |||||||||||||||
Income from Group undertakings | — | 186 | 324 | 119 | (629 | ) | — | ||||||||||||||||
Expenses due to Group undertakings | — | (80 | ) | (134 | ) | (415 | ) | 629 | — | ||||||||||||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | — | (171 | ) | — | — | — | (171 | ) | |||||||||||||||
Interest expense | (34 | ) | (17 | ) | (97 | ) | (8 | ) | — | (156 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (54 | ) | (50 | ) | (86 | ) | 429 | — | 239 | ||||||||||||||
Income taxes | — | 59 | 27 | (117 | ) | (1 | ) | (32 | ) | ||||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (54 | ) | 9 | (59 | ) | 312 | (1 | ) | 207 | ||||||||||||||
Interest in earnings of associates, net of tax | — | 8 | — | 4 | — | 12 | |||||||||||||||||
Equity account for subsidiaries | 258 | 229 | (8 | ) | — | (479 | ) | — | |||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 204 | 246 | (67 | ) | 316 | (480 | ) | 219 | |||||||||||||||
Discontinued operations, net of tax | — | — | — | 1 | — | 1 | |||||||||||||||||
NET INCOME (LOSS) | 204 | 246 | (67 | ) | 317 | (480 | ) | 220 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | — | (16 | ) | — | (16 | ) | |||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 204 | $ | 246 | $ | (67 | ) | $ | 301 | $ | (480 | ) | $ | 204 |
Year Ended December 31, 2011 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Comprehensive income (loss) | $ | 1 | $ | 48 | $ | (148 | ) | $ | 114 | $ | 1 | $ | 16 | ||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | — | (15 | ) | — | (15 | ) | |||||||||||||||
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 1 | $ | 48 | $ | (148 | ) | $ | 99 | $ | 1 | $ | 1 |
As at December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||||||
Cash and cash equivalents | $ | 3 | $ | 3 | $ | — | $ | 790 | $ | — | $ | 796 | |||||||||||
Accounts receivable, net | — | — | 4 | 1,037 | — | 1,041 | |||||||||||||||||
Fiduciary assets | — | — | — | 8,412 | — | 8,412 | |||||||||||||||||
Deferred tax assets | — | — | — | 16 | (1 | ) | 15 | ||||||||||||||||
Other current assets | 1 | 21 | 10 | 186 | (21 | ) | 197 | ||||||||||||||||
Amounts due from Group undertakings | 4,051 | 903 | 1,317 | 1,484 | (7,755 | ) | — | ||||||||||||||||
Total current assets | 4,055 | 927 | 1,331 | 11,925 | (7,777 | ) | 10,461 | ||||||||||||||||
NON-CURRENT ASSETS | |||||||||||||||||||||||
Investments in subsidiaries | — | 2,838 | 1,021 | — | (3,859 | ) | — | ||||||||||||||||
Fixed assets, net | — | 15 | 51 | 415 | — | 481 | |||||||||||||||||
Goodwill | — | — | — | 2,838 | — | 2,838 | |||||||||||||||||
Other intangible assets, net | — | — | — | 353 | — | 353 | |||||||||||||||||
Investments in associates | — | 156 | — | 20 | — | 176 | |||||||||||||||||
Deferred tax assets | — | — | — | 7 | — | 7 | |||||||||||||||||
Pension benefits asset | — | — | — | 278 | — | 278 | |||||||||||||||||
Other non-current assets | 4 | 9 | 5 | 188 | — | 206 | |||||||||||||||||
Non-current amounts due from Group undertakings | — | 518 | 690 | — | (1,208 | ) | — | ||||||||||||||||
Total non-current assets | 4 | 3,536 | 1,767 | 4,099 | (5,067 | ) | 4,339 | ||||||||||||||||
TOTAL ASSETS | $ | 4,059 | $ | 4,463 | $ | 3,098 | $ | 16,024 | $ | (12,844 | ) | $ | 14,800 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||||||
Fiduciary liabilities | $ | — | $ | — | $ | — | $ | 8,412 | $ | — | $ | 8,412 | |||||||||||
Deferred revenue and accrued expenses | 2 | 1 | 28 | 555 | — | 586 | |||||||||||||||||
Income taxes payable | — | 3 | — | 39 | (21 | ) | 21 | ||||||||||||||||
Short-term debt and current portion of long-term debt | — | 15 | — | — | — | 15 | |||||||||||||||||
Deferred tax liabilities | — | — | — | 25 | — | 25 | |||||||||||||||||
Other current liabilities | 62 | 15 | 38 | 300 | — | 415 | |||||||||||||||||
Amounts due to Group undertakings | — | 4,760 | 1,662 | 1,333 | (7,755 | ) | — | ||||||||||||||||
Total current liabilities | 64 | 4,794 | 1,728 | 10,664 | (7,776 | ) | 9,474 | ||||||||||||||||
NON-CURRENT LIABILITIES | |||||||||||||||||||||||
Investments in subsidiaries | 985 | — | — | — | (985 | ) | — | ||||||||||||||||
Long-term debt | 795 | 782 | 733 | 1 | — | 2,311 | |||||||||||||||||
Liabilities for pension benefits | — | — | — | 136 | — | 136 | |||||||||||||||||
Deferred tax liabilities | — | 1 | — | 55 | — | 56 | |||||||||||||||||
Provisions for liabilities | — | — | — | 206 | — | 206 | |||||||||||||||||
Other non-current liabilities | — | — | 48 | 326 | — | 374 | |||||||||||||||||
Non-current amounts due to Group undertakings | — | — | 518 | 690 | (1,208 | ) | — | ||||||||||||||||
Total non-current liabilities | 1,780 | 783 | 1,299 | 1,414 | (2,193 | ) | 3,083 | ||||||||||||||||
TOTAL LIABILITIES | $ | 1,844 | $ | 5,577 | $ | 3,027 | $ | 12,078 | $ | (9,969 | ) | $ | 12,557 |
As at December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
EQUITY | |||||||||||||||||||||||
Total Willis Group Holdings stockholders’ equity | 2,215 | (1,114 | ) | 71 | 3,918 | (2,875 | ) | 2,215 | |||||||||||||||
Noncontrolling interests | — | — | — | 28 | — | 28 | |||||||||||||||||
Total equity | 2,215 | (1,114 | ) | 71 | 3,946 | (2,875 | ) | 2,243 | |||||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 4,059 | $ | 4,463 | $ | 3,098 | $ | 16,024 | $ | (12,844 | ) | $ | 14,800 |
As at December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | — | $ | — | $ | 499 | $ | — | $ | 500 | |||||||||||
Accounts receivable, net | — | — | — | 933 | — | 933 | |||||||||||||||||
Fiduciary assets | — | — | — | 9,271 | — | 9,271 | |||||||||||||||||
Deferred tax assets | — | — | — | 13 | — | 13 | |||||||||||||||||
Other current assets | 1 | 31 | 38 | 114 | (3 | ) | 181 | ||||||||||||||||
Amounts due by group undertakings | 4,091 | 993 | 1,292 | 864 | (7,240 | ) | — | ||||||||||||||||
Total current assets | 4,093 | 1,024 | 1,330 | 11,694 | (7,243 | ) | 10,898 | ||||||||||||||||
NON-CURRENT ASSETS | |||||||||||||||||||||||
Investments in subsidiaries | — | 2,407 | 553 | — | (2,960 | ) | — | ||||||||||||||||
Fixed assets, net | — | 11 | 63 | 394 | — | 468 | |||||||||||||||||
Goodwill | — | — | — | 2,827 | — | 2,827 | |||||||||||||||||
Other intangible assets, net | — | — | — | 385 | — | 385 | |||||||||||||||||
Investments in associates | — | 143 | — | 31 | — | 174 | |||||||||||||||||
Deferred tax assets | — | — | — | 18 | — | 18 | |||||||||||||||||
Pension benefits asset | — | — | — | 136 | — | 136 | |||||||||||||||||
Other non-current assets | 5 | 3 | 41 | 157 | — | 206 | |||||||||||||||||
Non-current amounts due by group undertakings | — | — | 641 | — | (641 | ) | — | ||||||||||||||||
Total non-current assets | 5 | 2,564 | 1,298 | 3,948 | (3,601 | ) | 4,214 | ||||||||||||||||
TOTAL ASSETS | $ | 4,098 | $ | 3,588 | $ | 2,628 | $ | 15,642 | $ | (10,844 | ) | $ | 15,112 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||||||
Fiduciary liabilities | $ | — | $ | — | $ | — | $ | 9,271 | $ | — | $ | 9,271 | |||||||||||
Deferred revenue and accrued expenses | 2 | — | — | 539 | — | 541 | |||||||||||||||||
Income taxes payable | — | 4 | — | 18 | (3 | ) | 19 | ||||||||||||||||
Short-term debt and current portion of long-term debt | — | 15 | — | — | — | 15 | |||||||||||||||||
Deferred tax liabilities | — | — | — | 21 | — | 21 | |||||||||||||||||
Other current liabilities | 60 | — | 73 | 194 | — | 327 | |||||||||||||||||
Amounts due to group undertakings | — | 4,951 | 1,246 | 1,043 | (7,240 | ) | — | ||||||||||||||||
Total current liabilities | 62 | 4,970 | 1,319 | 11,086 | (7,243 | ) | 10,194 | ||||||||||||||||
NON-CURRENT LIABILITIES | |||||||||||||||||||||||
Investments in subsidiaries | 1,542 | — | — | — | (1,542 | ) | — | ||||||||||||||||
Long-term debt | 795 | 274 | 1,268 | 1 | — | 2,338 | |||||||||||||||||
Liabilities for pension benefits | — | — | — | 282 | — | 282 | |||||||||||||||||
Deferred tax liabilities | — | — | — | 18 | — | 18 | |||||||||||||||||
Provisions for liabilities | — | — | — | 180 | — | 180 | |||||||||||||||||
Other non-current liabilities | — | 5 | 7 | 363 | — | 375 | |||||||||||||||||
Non-current amounts due to group undertakings | — | — | — | 641 | (641 | ) | — | ||||||||||||||||
Total non-current liabilities | 2,337 | 279 | 1,275 | 1,485 | (2,183 | ) | 3,193 | ||||||||||||||||
TOTAL LIABILITIES | $ | 2,399 | $ | 5,249 | $ | 2,594 | $ | 12,571 | $ | (9,426 | ) | $ | 13,387 |
As at December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
EQUITY | |||||||||||||||||||||||
Total Willis Group Holdings stockholders’ equity | 1,699 | (1,661 | ) | 34 | 3,045 | (1,418 | ) | 1,699 | |||||||||||||||
Noncontrolling interests | — | — | — | 26 | — | 26 | |||||||||||||||||
Total equity | 1,699 | (1,661 | ) | 34 | 3,071 | (1,418 | ) | 1,725 | |||||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 4,098 | $ | 3,588 | $ | 2,628 | $ | 15,642 | $ | (10,844 | ) | $ | 15,112 |
Year Ended December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | 4 | $ | 125 | $ | 7 | $ | 662 | $ | (237 | ) | $ | 561 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | — | 3 | 9 | — | 12 | |||||||||||||||||
Additions to fixed assets | — | (7 | ) | (11 | ) | (94 | ) | — | (112 | ) | |||||||||||||
Additions to intangibles assets | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | (237 | ) | (230 | ) | (30 | ) | 467 | (30 | ) | |||||||||||||
Payments to acquire other investments | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
Proceeds from sale of associates | — | — | — | 4 | — | 4 | |||||||||||||||||
Proceeds from sale of operations, net of cash disposed | — | — | 230 | 257 | (467 | ) | 20 | ||||||||||||||||
Proceeds from intercompany investing activities | 383 | 211 | 36 | 60 | (690 | ) | — | ||||||||||||||||
Repayments of intercompany investing activities | (347 | ) | (442 | ) | (120 | ) | (780 | ) | 1,689 | — | |||||||||||||
Net cash provided by (used in) investing activities | 36 | (475 | ) | (92 | ) | (588 | ) | 999 | (120 | ) | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||||
Senior notes issued | — | 522 | — | — | — | 522 | |||||||||||||||||
Debt issuance costs | — | (8 | ) | — | — | — | (8 | ) | |||||||||||||||
Repayments of debt | — | (15 | ) | (521 | ) | — | — | (536 | ) | ||||||||||||||
Tender premium on extinguishment of senior notes | — | — | (65 | ) | — | — | (65 | ) | |||||||||||||||
Proceeds from issue of shares | 155 | — | — | — | — | 155 | |||||||||||||||||
Excess tax benefits from share-based payment arrangements | — | — | — | 2 | — | 2 | |||||||||||||||||
Dividends paid | (193 | ) | — | (230 | ) | (7 | ) | 237 | (193 | ) | |||||||||||||
Acquisition of noncontrolling interests | — | — | — | (4 | ) | — | (4 | ) | |||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Proceeds from intercompany financing activities | — | 321 | 901 | 467 | (1,689 | ) | — | ||||||||||||||||
Repayments of intercompany financing activities | — | (467 | ) | — | (223 | ) | 690 | — | |||||||||||||||
Net cash (used in) provided by financing activities | (38 | ) | 353 | 85 | 225 | (762 | ) | (137 | ) | ||||||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS | 2 | 3 | — | 299 | — | 304 | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (8 | ) | — | (8 | ) | |||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 1 | — | — | 499 | — | 500 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 3 | $ | 3 | $ | — | $ | 790 | $ | — | $ | 796 |
Year Ended December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (23 | ) | $ | 1,504 | $ | (44 | ) | $ | (97 | ) | $ | (815 | ) | $ | 525 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | — | — | 5 | — | 5 | |||||||||||||||||
Additions to fixed assets | — | (7 | ) | (19 | ) | (109 | ) | — | (135 | ) | |||||||||||||
Additions to intangible assets | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | — | — | (33 | ) | — | (33 | ) | |||||||||||||||
Payments to acquire other investments | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
Proceeds from sale of operations, net of cash disposed | — | — | — | — | — | — | |||||||||||||||||
Proceeds from intercompany investing activities | 256 | 216 | 44 | 1,230 | (1,746 | ) | — | ||||||||||||||||
Repayments of intercompany investing activities | — | (318 | ) | (10 | ) | (81 | ) | 409 | — | ||||||||||||||
Net cash provided by (used in) investing activities | 256 | (109 | ) | 15 | 1,003 | (1,337 | ) | (172 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||||
Repayments of debt | — | (15 | ) | — | — | — | (15 | ) | |||||||||||||||
Proceeds from issue of other debt | — | 1 | — | — | — | 1 | |||||||||||||||||
Repurchase of shares | (100 | ) | — | — | — | — | (100 | ) | |||||||||||||||
Proceeds from issue of shares | 53 | — | — | — | — | 53 | |||||||||||||||||
Excess tax benefits from share-based payment arrangements | — | — | — | 2 | — | 2 | |||||||||||||||||
Dividends paid | (185 | ) | — | — | (815 | ) | 815 | (185 | ) | ||||||||||||||
Proceeds from sale of noncontrolling interest | — | — | — | 3 | — | 3 | |||||||||||||||||
Acquisition of noncontrolling interests | — | — | — | (39 | ) | — | (39 | ) | |||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | (11 | ) | — | (11 | ) | |||||||||||||||
Proceeds from intercompany financing activities | — | 81 | — | 328 | (409 | ) | — | ||||||||||||||||
Repayments of intercompany financing activities | — | (1,462 | ) | (134 | ) | (150 | ) | 1,746 | — | ||||||||||||||
Net cash (used in) provided by financing activities | (232 | ) | (1,395 | ) | (134 | ) | (682 | ) | 2,152 | (291 | ) | ||||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1 | — | (163 | ) | 224 | — | 62 | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 2 | — | 2 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | — | 163 | 273 | — | 436 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 1 | $ | — | $ | — | $ | 499 | $ | — | $ | 500 |
Year Ended December 31, 2011 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 44 | $ | 316 | $ | 134 | $ | 131 | $ | (186 | ) | $ | 439 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | — | — | 13 | — | 13 | |||||||||||||||||
Additions to fixed assets | — | (4 | ) | (21 | ) | (86 | ) | — | (111 | ) | |||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Acquisitions of investments in associates | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||
Payments to acquire other investments | — | — | — | (5 | ) | — | (5 | ) | |||||||||||||||
Proceeds from sale of operations, net of cash disposed | — | — | — | 14 | — | 14 | |||||||||||||||||
Proceeds from intercompany investing activities | — | — | 128 | 224 | (352 | ) | — | ||||||||||||||||
Repayments of intercompany investing activities | (711 | ) | (430 | ) | — | (101 | ) | 1,242 | — | ||||||||||||||
Net cash (used in) provided by investing activities | (711 | ) | (434 | ) | 107 | 47 | 890 | (101 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||||
Repayments of revolving credit facility | — | — | (90 | ) | — | — | (90 | ) | |||||||||||||||
Senior notes issued | 794 | — | — | — | — | 794 | |||||||||||||||||
Debt issuance costs | (7 | ) | (5 | ) | — | — | — | (12 | ) | ||||||||||||||
Repayments of debt | — | (500 | ) | (411 | ) | — | — | (911 | ) | ||||||||||||||
Proceeds from issue of term loan | — | 300 | — | — | — | 300 | |||||||||||||||||
Make-whole on repurchase and redemption of senior notes | — | (158 | ) | — | — | — | (158 | ) | |||||||||||||||
Proceeds from issue of shares | 60 | — | — | — | — | 60 | |||||||||||||||||
Excess tax benefits from share-based payment arrangements | — | — | — | 5 | — | 5 | |||||||||||||||||
Dividends paid | (180 | ) | — | — | (186 | ) | 186 | (180 | ) | ||||||||||||||
Acquisition of noncontrolling interests | — | (4 | ) | — | (5 | ) | — | (9 | ) | ||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | (13 | ) | — | (13 | ) | |||||||||||||||
Cash received on intercompany financing activities | — | 741 | 347 | 154 | (1,242 | ) | — | ||||||||||||||||
Cash paid on intercompany financing activities | — | (256 | ) | — | (96 | ) | 352 | — | |||||||||||||||
Net cash provided by (used in) financing activities | 667 | 118 | (154 | ) | (141 | ) | (704 | ) | (214 | ) | |||||||||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | — | — | 87 | 37 | — | 124 | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (4 | ) | — | (4 | ) | |||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | — | 76 | 240 | — | 316 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | — | $ | — | $ | 163 | $ | 273 | $ | — | $ | 436 |
47 | Group Operations & Technology Director | |||
Timothy D. Wright | 52 | CEO of Willis International |
* | As previously announced by the Company, John Greene, 48, was appointed to serve as the next Group Chief Financial Officer, succeeding Mr. Neborak, effective June 2, 2014 or such earlier date as may be mutually agreed by the Company and Mr. Greene. |
Biographical Information
The following sets forth information about our current executive officers other than Dominic Casserley, the Company’s subsidiaries. Therefore, the Company is providing the condensed consolidating financial information below. The following
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of operations for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings - the Parent Issuer | |||||||||||
Operating loss | $ | (6 | ) | $ | — | $ | (6 | ) | |||
Net loss attributable to Willis Group Holdings | (446 | ) | — | (446 | ) | ||||||
The Guarantors | |||||||||||
Operating loss | $ | (261 | ) | $ | (11 | ) | $ | (272 | ) | ||
Net loss attributable to Willis Group Holdings | (389 | ) | (8 | ) | (397 | ) | |||||
Other | |||||||||||
Operating income (loss) | $ | 122 | $ | (53 | ) | $ | 69 | ||||
Net loss attributable to Willis Group Holdings | (118 | ) | (306 | ) | (424 | ) | |||||
Consolidating adjustments | |||||||||||
Operating (loss) income | $ | (64 | ) | $ | 64 | $ | — | ||||
Net income attributable to Willis Group Holdings | 507 | 314 | 821 | ||||||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of operations for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings - the Parent Issuer | |||||||||||
Operating loss | $ | (20 | ) | $ | — | $ | (20 | ) | |||
Net income attributable to Willis Group Holdings | 204 | — | 204 | ||||||||
The Guarantors | |||||||||||
Operating loss | $ | (136 | ) | $ | (11 | ) | $ | (147 | ) | ||
Net income attributable to Willis Group Holdings | 174 | 72 | 246 | ||||||||
Other | |||||||||||
Operating income (loss) | $ | 754 | $ | (21 | ) | $ | 733 | ||||
Net income attributable to Willis Group Holdings | 137 | 164 | 301 | ||||||||
Consolidating adjustments | |||||||||||
Operating (loss) income | $ | (32 | ) | $ | 32 | $ | — | ||||
Net loss attributable to Willis Group Holdings | (311 | ) | (236 | ) | (547 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of comprehensive income for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings - the Parent Issuer | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (552 | ) | $ | — | $ | (552 | ) | |||
The Guarantors | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (486 | ) | $ | (8 | ) | $ | (494 | ) | ||
Other | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (226 | ) | $ | (306 | ) | $ | (532 | ) | ||
Consolidating adjustments | |||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 712 | $ | 314 | $ | 1,026 | |||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of comprehensive income for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings - the Parent Issuer | |||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 1 | $ | — | �� | $ | 1 | ||||
The Guarantors | |||||||||||
Comprehensive (loss) income attributable to Willis Group Holdings | $ | (24 | ) | $ | 72 | $ | 48 | ||||
Other | |||||||||||
Comprehensive (loss) income attributable to Willis Group Holdings | $ | (65 | ) | $ | 164 | $ | 99 | ||||
Consolidating adjustments | |||||||||||
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 89 | $ | (236 | ) | $ | (147 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating balance sheet at 31 December 2012 | |||||||||||
Willis Group Holdings - the Parent Issuer | |||||||||||
Total assets | $ | 2,557 | $ | 1,541 | $ | 4,098 | |||||
Total liabilities | 858 | 1,541 | 2,399 | ||||||||
Total equity | 1,699 | — | 1,699 | ||||||||
The Guarantors | |||||||||||
Total assets | $ | 92 | $ | 4,832 | $ | 4,924 | |||||
Total liabilities | 1,667 | 4,918 | 6,585 | ||||||||
Total equity | (1,575 | ) | (86 | ) | (1,661 | ) | |||||
Other | |||||||||||
Total assets | $ | 17,125 | $ | (1,483 | ) | $ | 15,642 | ||||
Total liabilities | 11,851 | 720 | 12,571 | ||||||||
Total equity | 5,274 | (2,203 | ) | 3,071 | |||||||
Consolidating adjustments | |||||||||||
Total assets | $ | (4,662 | ) | $ | (4,890 | ) | $ | (9,552 | ) | ||
Total liabilities | (989 | ) | (7,179 | ) | (8,168 | ) | |||||
Total equity | (3,673 | ) | 2,289 | (1,384 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of cash flows for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings - the Parent Issuer | |||||||||||
Net cash (used in) provided by operating activities | $ | (42 | ) | $ | 19 | $ | (23 | ) | |||
Net cash provided by investing activities | — | 256 | 256 | ||||||||
Net cash provided by (used in) financing activities | 43 | (275 | ) | (232 | ) | ||||||
The Guarantors | |||||||||||
Net cash provided by operating activities | $ | 849 | $ | 611 | $ | 1,460 | |||||
Net cash used in investing activities | (26 | ) | (178 | ) | (204 | ) | |||||
Net cash used in financing activities | (986 | ) | (433 | ) | (1,419 | ) | |||||
Other | |||||||||||
Net cash provided by (used in) operating activities | $ | 431 | $ | (528 | ) | $ | (97 | ) | |||
Net cash (used in) provided by investing activities | (146 | ) | 1,149 | 1,003 | |||||||
Net cash used in financing activities | (61 | ) | (621 | ) | (682 | ) | |||||
Consolidating adjustments | |||||||||||
Net cash used in operating activities | $ | (713 | ) | $ | (102 | ) | $ | (815 | ) | ||
Net cash used in investing activities | — | (1,227 | ) | (1,227 | ) | ||||||
Net cash provided by financing activities | 713 | 1,329 | 2,042 | ||||||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of cash flows for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings - the Parent Issuer | |||||||||||
Net cash (used in) provided by operating activities | $ | (41 | ) | $ | 85 | $ | 44 | ||||
Net cash used in investing activities | — | (711 | ) | (711 | ) | ||||||
Net cash provided by financing activities | 41 | 626 | 667 | ||||||||
The Guarantors | |||||||||||
Net cash provided by operating activities | $ | 272 | $ | 178 | $ | 450 | |||||
Net cash used in investing activities | (25 | ) | (42 | ) | (67 | ) | |||||
Net cash used in financing activities | (160 | ) | (136 | ) | (296 | ) | |||||
Other | |||||||||||
Net cash provided by (used in) operating activities | $ | 1,269 | $ | (1,138 | ) | $ | 131 | ||||
Net cash (used in) provided by investing activities | (76 | ) | 123 | 47 | |||||||
Net cash (used in) provided by financing activities | (1,156 | ) | 1,015 | (141 | ) | ||||||
Consolidating adjustments | |||||||||||
Net cash (used in) provided by operating activities | $ | (1,061 | ) | $ | 875 | $ | (186 | ) | |||
Net cash provided by investing activities | — | 630 | 630 | ||||||||
Net cash provided by (used in) financing activities | 1,061 | (1,505 | ) | (444 | ) |
Year Ended December 31, 2013 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
REVENUES | |||||||||||||||||||
Commissions and fees | $ | — | $ | 8 | $ | 3,625 | $ | — | $ | 3,633 | |||||||||
Investment income | — | — | 15 | — | 15 | ||||||||||||||
Other income | — | — | 7 | — | 7 | ||||||||||||||
Total revenues | — | 8 | 3,647 | — | 3,655 | ||||||||||||||
EXPENSES | |||||||||||||||||||
Salaries and benefits | (1 | ) | (103 | ) | (2,103 | ) | — | (2,207 | ) | ||||||||||
Other operating expenses | — | (236 | ) | (380 | ) | — | (616 | ) | |||||||||||
Depreciation expense | — | (23 | ) | (71 | ) | — | (94 | ) | |||||||||||
Amortization of intangible assets | — | — | (55 | ) | — | (55 | ) | ||||||||||||
Net gain on disposal of operations | — | — | 12 | (10 | ) | 2 | |||||||||||||
Total expenses | (1 | ) | (362 | ) | (2,597 | ) | (10 | ) | (2,970 | ) | |||||||||
OPERATING (LOSS) INCOME | (1 | ) | (354 | ) | 1,050 | (10 | ) | 685 | |||||||||||
Income from Group undertakings | — | 466 | 86 | (552 | ) | — | |||||||||||||
Expenses due to Group undertakings | (10 | ) | (86 | ) | (456 | ) | 552 | — | |||||||||||
Loss on extinguishment of debt | — | (60 | ) | — | — | (60 | ) | ||||||||||||
Interest expense | (42 | ) | (79 | ) | (5 | ) | — | (126 | ) | ||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (53 | ) | (113 | ) | 675 | (10 | ) | 499 | |||||||||||
Income taxes | — | 23 | (145 | ) | — | (122 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (53 | ) | (90 | ) | 530 | (10 | ) | 377 | |||||||||||
Interest in earnings of associates, net of tax | — | 9 | (9 | ) | — | — | |||||||||||||
Equity account for subsidiaries | 418 | 498 | — | (916 | ) | — | |||||||||||||
INCOME FROM CONTINUING OPERATIONS | 365 | 417 | 521 | (926 | ) | 377 | |||||||||||||
Discontinued operations, net of tax | — | — | — | — | — | ||||||||||||||
NET INCOME | 365 | 417 | 521 | (926 | ) | 377 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (12 | ) | — | (12 | ) | ||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 365 | $ | 417 | $ | 509 | $ | (926 | ) | $ | 365 |
Year Ended December 31, 2013 | |||||||||||||||||||
Willis Group Holdings—the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
Comprehensive income | $ | 522 | $ | 565 | $ | 636 | $ | (1,189 | ) | $ | 534 | ||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | (12 | ) | — | (12 | ) | ||||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 522 | $ | 565 | $ | 624 | $ | (1,189 | ) | $ | 522 |
Year Ended December 31, 2012 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
REVENUES | |||||||||||||||||||
Commissions and fees | $ | — | $ | — | $ | 3,458 | $ | — | $ | 3,458 | |||||||||
Investment income | — | 1 | 17 | — | 18 | ||||||||||||||
Other income | — | — | 4 | — | 4 | ||||||||||||||
Total revenues | — | 1 | 3,479 | — | 3,480 | ||||||||||||||
EXPENSES | |||||||||||||||||||
Salaries and benefits | (2 | ) | (96 | ) | (2,377 | ) | — | (2,475 | ) | ||||||||||
Other operating expenses | (4 | ) | (161 | ) | (416 | ) | — | (581 | ) | ||||||||||
Depreciation expense | — | (16 | ) | (63 | ) | — | (79 | ) | |||||||||||
Amortization of intangible assets | — | — | (59 | ) | — | (59 | ) | ||||||||||||
Goodwill impairment charge | — | — | (492 | ) | — | (492 | ) | ||||||||||||
Net loss on disposal of operations | — | — | (3 | ) | — | (3 | ) | ||||||||||||
Total expenses | (6 | ) | (273 | ) | (3,410 | ) | — | (3,689 | ) | ||||||||||
OPERATING (LOSS) INCOME | (6 | ) | (272 | ) | 69 | — | (209 | ) | |||||||||||
Income from Group undertakings | — | 409 | 111 | (520 | ) | — | |||||||||||||
Expenses due to Group undertakings | — | (106 | ) | (414 | ) | 520 | — | ||||||||||||
Interest expense | (43 | ) | (77 | ) | (8 | ) | — | (128 | ) | ||||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (49 | ) | (46 | ) | (242 | ) | — | (337 | ) | ||||||||||
Income taxes | — | 65 | (166 | ) | — | (101 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (49 | ) | 19 | (408 | ) | — | (438 | ) | |||||||||||
Interest in earnings of associates, net of tax | — | 8 | (3 | ) | — | 5 | |||||||||||||
Equity account for subsidiaries | (397 | ) | (424 | ) | — | 821 | — | ||||||||||||
LOSS FROM CONTINUING OPERATIONS | (446 | ) | (397 | ) | (411 | ) | 821 | (433 | ) | ||||||||||
Discontinued operations, net of tax | — | — | — | — | — | ||||||||||||||
NET LOSS | (446 | ) | (397 | ) | (411 | ) | 821 | (433 | ) | ||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (13 | ) | — | (13 | ) | ||||||||||||
NET LOSS ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | (446 | ) | $ | (397 | ) | $ | (424 | ) | $ | 821 | $ | (446 | ) |
Year Ended December 31, 2012 | |||||||||||||||||||
Willis Group Holdings—the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
Comprehensive loss | $ | (552 | ) | $ | (494 | ) | $ | (519 | ) | $ | 1,026 | $ | (539 | ) | |||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | (13 | ) | — | (13 | ) | ||||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (552 | ) | $ | (494 | ) | $ | (532 | ) | $ | 1,026 | $ | (552 | ) |
Year Ended December 31, 2011 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
REVENUES | |||||||||||||||||||
Commissions and fees | $ | — | $ | — | $ | 3,414 | $ | — | $ | 3,414 | |||||||||
Investment income | — | 2 | 29 | — | 31 | ||||||||||||||
Other income | — | — | 2 | — | 2 | ||||||||||||||
Total revenues | — | 2 | 3,445 | — | 3,447 | ||||||||||||||
EXPENSES | |||||||||||||||||||
Salaries and benefits | (3 | ) | (69 | ) | (2,015 | ) | — | (2,087 | ) | ||||||||||
Other operating expenses | (17 | ) | (66 | ) | (573 | ) | — | (656 | ) | ||||||||||
Depreciation expense | — | (14 | ) | (60 | ) | — | (74 | ) | |||||||||||
Amortization of intangible assets | — | — | (68 | ) | — | (68 | ) | ||||||||||||
Net gain on disposal of operations | — | — | 4 | — | 4 | ||||||||||||||
Total expenses | (20 | ) | (149 | ) | (2,712 | ) | — | (2,881 | ) | ||||||||||
OPERATING (LOSS) INCOME | (20 | ) | (147 | ) | 733 | — | 566 | ||||||||||||
Income from Group undertakings | — | 412 | 119 | (531 | ) | — | |||||||||||||
Expenses due to Group undertakings | — | (116 | ) | (415 | ) | 531 | — | ||||||||||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | — | (171 | ) | — | — | (171 | ) | ||||||||||||
Interest expense | (34 | ) | (114 | ) | (8 | ) | — | (156 | ) | ||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (54 | ) | (136 | ) | 429 | — | 239 | ||||||||||||
Income taxes | — | 86 | (117 | ) | (1 | ) | (32 | ) | |||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (54 | ) | (50 | ) | 312 | (1 | ) | 207 | |||||||||||
Interest in earnings of associates, net of tax | — | 8 | 4 | — | 12 | ||||||||||||||
Equity account for subsidiaries | 258 | 288 | — | (546 | ) | — | |||||||||||||
INCOME FROM CONTINUING OPERATIONS | 204 | 246 | 316 | (547 | ) | 219 | |||||||||||||
Discontinued operations, net of tax | — | — | 1 | — | 1 | ||||||||||||||
NET INCOME | 204 | 246 | 317 | (547 | ) | 220 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (16 | ) | — | (16 | ) | ||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 204 | $ | 246 | $ | 301 | $ | (547 | ) | $ | 204 |
Year Ended December 31, 2011 | |||||||||||||||||||
Willis Group Holdings—the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
Comprehensive income | $ | 1 | $ | 48 | $ | 114 | $ | (147 | ) | $ | 16 | ||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | (15 | ) | — | (15 | ) | ||||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 1 | $ | 48 | $ | 99 | $ | (147 | ) | $ | 1 |
As at December 31, 2013 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 3 | $ | 3 | $ | 790 | $ | — | $ | 796 | |||||||||
Accounts receivable, net | — | 4 | 1,037 | — | 1,041 | ||||||||||||||
Fiduciary assets | — | — | 8,412 | — | 8,412 | ||||||||||||||
Deferred tax assets | — | — | 16 | (1 | ) | 15 | |||||||||||||
Other current assets | 1 | 31 | 186 | (21 | ) | 197 | |||||||||||||
Amounts due from group undertakings | 4,051 | 975 | 1,484 | (6,510 | ) | — | |||||||||||||
Total current assets | 4,055 | 1,013 | 11,925 | (6,532 | ) | 10,461 | |||||||||||||
NON-CURRENT ASSETS | |||||||||||||||||||
Investments in subsidiaries | — | 3,788 | — | (3,788 | ) | — | |||||||||||||
Fixed assets, net | — | 66 | 415 | — | 481 | ||||||||||||||
Goodwill | — | — | 2,838 | — | 2,838 | ||||||||||||||
Other intangible assets, net | — | — | 353 | — | 353 | ||||||||||||||
Investments in associates | — | 156 | 20 | — | 176 | ||||||||||||||
Deferred tax assets | — | — | 7 | — | 7 | ||||||||||||||
Pension benefits asset | — | — | 278 | — | 278 | ||||||||||||||
Other non-current assets | 4 | 14 | 188 | — | 206 | ||||||||||||||
Non-current amounts due from group undertakings | — | 690 | — | (690 | ) | — | |||||||||||||
Total non-current assets | 4 | 4,714 | 4,099 | (4,478 | ) | 4,339 | |||||||||||||
TOTAL ASSETS | $ | 4,059 | $ | 5,727 | $ | 16,024 | $ | (11,010 | ) | $ | 14,800 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||
Fiduciary liabilities | $ | — | $ | — | $ | 8,412 | $ | — | $ | 8,412 | |||||||||
Deferred revenue and accrued expenses | 2 | 29 | 555 | — | 586 | ||||||||||||||
Income taxes payable | — | 3 | 39 | (21 | ) | 21 | |||||||||||||
Short-term debt and current portion on long-term debt | — | 15 | — | — | 15 | ||||||||||||||
Deferred tax liabilities | — | — | 25 | — | 25 | ||||||||||||||
Other current liabilities | 62 | 53 | 300 | — | 415 | ||||||||||||||
Amounts due to group undertakings | — | 5,177 | 1,333 | (6,510 | ) | — | |||||||||||||
Total current liabilities | 64 | 5,277 | 10,664 | (6,531 | ) | 9,474 | |||||||||||||
NON-CURRENT LIABILITIES | |||||||||||||||||||
Investments in subsidiaries | 985 | — | — | (985 | ) | — | |||||||||||||
Long-term debt | 795 | 1,515 | 1 | — | 2,311 | ||||||||||||||
Liabilities for pension benefits | — | — | 136 | — | 136 | ||||||||||||||
Deferred tax liabilities | — | 1 | 55 | — | 56 | ||||||||||||||
Provisions for liabilities | — | — | 206 | — | 206 | ||||||||||||||
Other non-current liabilities | — | 48 | 326 | — | 374 | ||||||||||||||
Non-current amounts due to group undertakings | — | — | 690 | (690 | ) | — | |||||||||||||
Total non-current liabilities | 1,780 | 1,564 | 1,414 | (1,675 | ) | 3,083 | |||||||||||||
TOTAL LIABILITIES | $ | 1,844 | $ | 6,841 | $ | 12,078 | $ | (8,206 | ) | $ | 12,557 |
As at December 31, 2013 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
EQUITY | |||||||||||||||||||
Total Willis Group Holdings stockholders’ equity | 2,215 | (1,114 | ) | 3,918 | (2,804 | ) | 2,215 | ||||||||||||
Noncontrolling interests | — | — | 28 | — | 28 | ||||||||||||||
Total equity | 2,215 | (1,114 | ) | 3,946 | (2,804 | ) | 2,243 | ||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 4,059 | $ | 5,727 | $ | 16,024 | $ | (11,010 | ) | $ | 14,800 |
As at December 31, 2012 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | — | $ | 499 | $ | — | $ | 500 | |||||||||
Accounts receivable, net | — | — | 933 | — | 933 | ||||||||||||||
Fiduciary assets | — | — | 9,271 | — | 9,271 | ||||||||||||||
Deferred tax assets | — | — | 13 | — | 13 | ||||||||||||||
Other current assets | 1 | 69 | 114 | (3 | ) | 181 | |||||||||||||
Amounts due from group undertakings | 4,091 | 1,027 | 864 | (5,982 | ) | — | |||||||||||||
Total current assets | 4,093 | 1,096 | 11,694 | (5,985 | ) | 10,898 | |||||||||||||
NON-CURRENT ASSETS | |||||||||||||||||||
Investments in subsidiaries | — | 2,926 | — | (2,926 | ) | — | |||||||||||||
Fixed assets, net | — | 74 | 394 | — | 468 | ||||||||||||||
Goodwill | — | — | 2,827 | — | 2,827 | ||||||||||||||
Other intangible assets, net | — | — | 385 | — | 385 | ||||||||||||||
Investments in associates | — | 143 | 31 | — | 174 | ||||||||||||||
Deferred tax assets | — | — | 18 | — | 18 | ||||||||||||||
Pension benefits asset | — | — | 136 | — | 136 | ||||||||||||||
Other non-current assets | 5 | 44 | 157 | — | 206 | ||||||||||||||
Non-current amounts due from group undertakings | — | 641 | — | (641 | ) | — | |||||||||||||
Total non-current assets | 5 | 3,828 | 3,948 | (3,567 | ) | 4,214 | |||||||||||||
TOTAL ASSETS | $ | 4,098 | $ | 4,924 | $ | 15,642 | $ | (9,552 | ) | $ | 15,112 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||
Fiduciary liabilities | $ | — | $ | — | $ | 9,271 | $ | — | $ | 9,271 | |||||||||
Deferred revenue and accrued expenses | 2 | — | 539 | — | 541 | ||||||||||||||
Income taxes payable | — | 4 | 18 | (3 | ) | 19 | |||||||||||||
Short-term debt and current portion of long-term debt | — | 15 | — | — | 15 | ||||||||||||||
Deferred tax liabilities | — | — | 21 | — | 21 | ||||||||||||||
Other current liabilities | 60 | 73 | 194 | — | 327 | ||||||||||||||
Amounts due to group undertakings | — | 4,939 | 1,043 | (5,982 | ) | — | |||||||||||||
Total current liabilities | 62 | 5,031 | 11,086 | (5,985 | ) | 10,194 | |||||||||||||
NON-CURRENT LIABILITIES | |||||||||||||||||||
Investments in subsidiaries | 1,542 | — | — | (1,542 | ) | — | |||||||||||||
Long-term debt | 795 | 1,542 | 1 | — | 2,338 | ||||||||||||||
Liabilities for pension benefits | — | — | 282 | — | 282 | ||||||||||||||
Deferred tax liabilities | — | — | 18 | — | 18 | ||||||||||||||
Provisions for liabilities | — | — | 180 | — | 180 | ||||||||||||||
Other non-current liabilities | — | 12 | 363 | — | 375 | ||||||||||||||
Non-current amounts due to group undertakings | — | — | 641 | (641 | ) | — | |||||||||||||
Total non-current liabilities | 2,337 | 1,554 | 1,485 | (2,183 | ) | 3,193 | |||||||||||||
TOTAL LIABILITIES | $ | 2,399 | $ | 6,585 | $ | 12,571 | $ | (8,168 | ) | $ | 13,387 |
As at December 31, 2012 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
EQUITY | |||||||||||||||||||
Total Willis Group Holdings stockholders’ equity | 1,699 | (1,661 | ) | 3,045 | (1,384 | ) | 1,699 | ||||||||||||
Noncontrolling interests | — | — | 26 | — | 26 | ||||||||||||||
Total equity | 1,699 | (1,661 | ) | 3,071 | (1,384 | ) | 1,725 | ||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 4,098 | $ | 4,924 | $ | 15,642 | $ | (9,552 | ) | $ | 15,112 |
Year Ended December 31, 2013 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 4 | $ | (98 | ) | $ | 662 | $ | (7 | ) | $ | 561 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | 3 | 9 | — | 12 | ||||||||||||||
Additions to fixed assets | — | (18 | ) | (94 | ) | — | (112 | ) | |||||||||||
Additions to intangibles assets | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | (237 | ) | (30 | ) | 237 | (30 | ) | |||||||||||
Payments to acquire other investments | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Proceeds from sale of associates | — | — | 4 | — | 4 | ||||||||||||||
Proceeds from disposal of operations, net of cash disposed | — | — | 257 | (237 | ) | 20 | |||||||||||||
Proceeds from intercompany investing activities | 383 | 223 | 60 | (666 | ) | — | |||||||||||||
Repayments of intercompany investing activities | (347 | ) | (120 | ) | (780 | ) | 1,247 | — | |||||||||||
Net cash provided by (used in) investing activities | 36 | (149 | ) | (588 | ) | 581 | (120 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
Senior notes issued | — | 522 | — | — | 522 | ||||||||||||||
Debt issuance costs | — | (8 | ) | — | — | (8 | ) | ||||||||||||
Repayments of debt | — | (536 | ) | — | — | (536 | ) | ||||||||||||
Tender premium on extinguishment of senior notes | — | (65 | ) | — | — | (65 | ) | ||||||||||||
Proceeds from the issue of shares | 155 | — | — | — | 155 | ||||||||||||||
Excess tax benefits from share-based payment arrangements | — | — | 2 | — | 2 | ||||||||||||||
Dividends paid | (193 | ) | — | (7 | ) | 7 | (193 | ) | |||||||||||
Acquisition of noncontrolling interests | — | — | (4 | ) | — | (4 | ) | ||||||||||||
Dividends paid to noncontrolling interests | — | — | (10 | ) | — | (10 | ) | ||||||||||||
Proceeds from intercompany financing activities | — | 780 | 467 | (1,247 | ) | — | |||||||||||||
Repayments of intercompany financing activities | — | (443 | ) | (223 | ) | 666 | — | ||||||||||||
Net cash (used in) provided by financing activities | (38 | ) | 250 | 225 | (574 | ) | (137 | ) | |||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 | 3 | 299 | — | 304 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (8 | ) | — | (8 | ) | ||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 1 | — | 499 | — | 500 | ||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 3 | $ | 3 | $ | 790 | $ | — | $ | 796 |
Year Ended December 31, 2012 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (23 | ) | $ | 1,460 | $ | (97 | ) | $ | (815 | ) | $ | 525 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | — | 5 | — | 5 | ||||||||||||||
Additions to fixed assets | — | (26 | ) | (109 | ) | — | (135 | ) | |||||||||||
Additions to intangible assets | — | — | (2 | ) | — | (2 | ) | ||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | — | (33 | ) | — | (33 | ) | ||||||||||||
Payments to acquire other investments | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Proceeds from intercompany investing activities | 256 | 150 | 1,230 | (1,636 | ) | — | |||||||||||||
Repayments of intercompany investing activities | — | (328 | ) | (81 | ) | 409 | — | ||||||||||||
Net cash provided by (used in) investing activities | 256 | (204 | ) | 1,003 | (1,227 | ) | (172 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
Repayments of debt | — | (15 | ) | — | — | (15 | ) | ||||||||||||
Proceeds from issue of other debt | — | 1 | — | — | 1 | ||||||||||||||
Repurchase of shares | (100 | ) | — | — | — | (100 | ) | ||||||||||||
Proceeds from the issue of shares | 53 | — | — | — | 53 | ||||||||||||||
Excess tax benefits from share-based payment arrangements | — | — | 2 | — | 2 | ||||||||||||||
Dividends paid | (185 | ) | — | (815 | ) | 815 | (185 | ) | |||||||||||
Proceeds from sale of noncontrolling interest | — | — | 3 | — | 3 | ||||||||||||||
Acquisition of noncontrolling interests | — | — | (39 | ) | — | (39 | ) | ||||||||||||
Dividends paid to noncontrolling interests | — | — | (11 | ) | — | (11 | ) | ||||||||||||
Proceeds from intercompany financing activities | — | 81 | 328 | (409 | ) | — | |||||||||||||
Repayments of intercompany financing activities | — | (1,486 | ) | (150 | ) | 1,636 | — | ||||||||||||
Net cash used in financing activities | (232 | ) | (1,419 | ) | (682 | ) | 2,042 | (291 | ) | ||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1 | (163 | ) | 224 | — | 62 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 2 | — | 2 | ||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 163 | 273 | — | 436 | ||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 1 | $ | — | $ | 499 | $ | — | $ | 500 |
Year Ended December 31, 2011 | |||||||||||||||||||
Willis Group Holdings — the Parent Issuer | The Guarantors | Other | Consolidating adjustments | Consolidated | |||||||||||||||
(millions) | |||||||||||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ | 44 | $ | 450 | $ | 131 | $ | (186 | ) | $ | 439 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | — | 13 | — | 13 | ||||||||||||||
Additions to fixed assets | — | (25 | ) | (86 | ) | — | (111 | ) | |||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | — | (10 | ) | — | (10 | ) | ||||||||||||
Acquisitions of investments in associates | — | — | (2 | ) | — | (2 | ) | ||||||||||||
Payments to acquire other investments | — | — | (5 | ) | — | (5 | ) | ||||||||||||
Proceeds from sale of operations, net of cash disposed | — | — | 14 | — | 14 | ||||||||||||||
Proceeds from intercompany investing activities | — | 96 | 224 | (320 | ) | — | |||||||||||||
Repayments of intercompany investing activities | (711 | ) | (138 | ) | (101 | ) | 950 | — | |||||||||||
Net cash used in investing activities | (711 | ) | (67 | ) | 47 | 630 | (101 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
Repayments of revolving credit facility | — | (90 | ) | — | — | (90 | ) | ||||||||||||
Senior notes issued | 794 | — | — | — | 794 | ||||||||||||||
Debt issuance costs | (7 | ) | (5 | ) | — | — | (12 | ) | |||||||||||
Repayments of debt | — | (911 | ) | — | — | (911 | ) | ||||||||||||
Proceeds from the issue of term loan | — | 300 | — | — | 300 | ||||||||||||||
Make-whole on repurchase and redemption of senior notes | — | (158 | ) | — | — | (158 | ) | ||||||||||||
Proceeds from issue of shares | 60 | — | — | — | 60 | ||||||||||||||
Excess tax benefits from share-based payment arrangements | — | — | 5 | — | 5 | ||||||||||||||
Dividends paid | (180 | ) | — | (186 | ) | 186 | (180 | ) | |||||||||||
Acquisition of noncontrolling interests | — | (4 | ) | (5 | ) | — | (9 | ) | |||||||||||
Dividends paid to noncontrolling interests | — | — | (13 | ) | — | (13 | ) | ||||||||||||
Proceeds from intercompany financing activities | — | 796 | 154 | (950 | ) | — | |||||||||||||
Repayments of intercompany financing activities | — | (224 | ) | (96 | ) | 320 | — | ||||||||||||
Net cash provided by (used in) financing activities | 667 | (296 | ) | (141 | ) | (444 | ) | (214 | ) | ||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS | — | 87 | 37 | — | 124 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (4 | ) | — | (4 | ) | ||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 76 | 240 | — | 316 | ||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | — | $ | 163 | $ | 273 | $ | — | $ | 436 |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of operations for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Operating loss | $ | (6 | ) | $ | — | $ | (6 | ) | |||
Net loss attributable to Willis Group Holdings | (446 | ) | — | (446 | ) | ||||||
The Other Guarantors | |||||||||||
Operating loss | $ | (262 | ) | $ | (11 | ) | $ | (273 | ) | ||
Net loss attributable to Willis Group Holdings | (389 | ) | (8 | ) | (397 | ) | |||||
The Issuer | |||||||||||
Operating income | $ | 1 | $ | — | $ | 1 | |||||
Net loss attributable to Willis Group Holdings | (427 | ) | — | (427 | ) | ||||||
Other | |||||||||||
Operating income (loss) | $ | 122 | $ | (53 | ) | $ | 69 | ||||
Net loss attributable to Willis Group Holdings | (118 | ) | (306 | ) | (424 | ) | |||||
Consolidating adjustments | |||||||||||
Operating (loss) income | $ | (64 | ) | $ | 64 | $ | — | ||||
Net income attributable to Willis Group Holdings | 934 | 314 | 1,248 | ||||||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of operations for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings | |||||||||||
Operating loss | $ | (20 | ) | $ | — | $ | (20 | ) | |||
Net income attributable to Willis Group Holdings | 204 | — | 204 | ||||||||
The Other Guarantors | |||||||||||
Operating loss | $ | (140 | ) | $ | (11 | ) | $ | (151 | ) | ||
Net income attributable to Willis Group Holdings | 174 | 72 | 246 | ||||||||
The Issuer | |||||||||||
Operating income | $ | 4 | $ | — | $ | 4 | |||||
Net income (loss) attributable to Willis Group Holdings | 218 | (1 | ) | 217 | |||||||
Other | |||||||||||
Operating income (loss) | $ | 754 | $ | (21 | ) | $ | 733 | ||||
Net income attributable to Willis Group Holdings | 137 | 164 | 301 | ||||||||
Consolidating adjustments | |||||||||||
Operating (loss) income | $ | (32 | ) | $ | 32 | $ | — | ||||
Net loss attributable to Willis Group Holdings | (529 | ) | (235 | ) | (764 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of comprehensive income for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (552 | ) | $ | — | $ | (552 | ) | |||
The Other Guarantors | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (486 | ) | $ | (8 | ) | $ | (494 | ) | ||
The Issuer | |||||||||||
Comprehensive (loss) income attributable to Willis Group Holdings | $ | (528 | ) | $ | — | $ | (528 | ) | |||
Other | |||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (226 | ) | $ | (306 | ) | $ | (532 | ) | ||
Consolidating adjustments | |||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 1,240 | $ | 314 | $ | 1,554 | |||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of comprehensive income for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings | |||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 1 | $ | — | $ | 1 | |||||
The Other Guarantors | |||||||||||
Comprehensive (loss) income attributable to Willis Group Holdings | $ | (24 | ) | $ | 72 | $ | 48 | ||||
The Issuer | |||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 21 | $ | (1 | ) | $ | 20 | ||||
Other | |||||||||||
Comprehensive (loss) income attributable to Willis Group Holdings | $ | (65 | ) | $ | 164 | $ | 99 | ||||
Consolidating adjustments | |||||||||||
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 68 | $ | (235 | ) | $ | (167 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating balance sheet at 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Total assets | $ | 2,557 | $ | 1,541 | $ | 4,098 | |||||
Total liabilities | 858 | 1,541 | 2,399 | ||||||||
Total equity | 1,699 | — | 1,699 | ||||||||
The Other Guarantors | |||||||||||
Total assets | $ | (208 | ) | $ | 5,618 | $ | 5,410 | ||||
Total liabilities | 1,367 | 5,704 | 7,071 | ||||||||
Total equity | (1,575 | ) | (86 | ) | (1,661 | ) | |||||
The Issuer | |||||||||||
Total assets | $ | 2,861 | $ | 408 | $ | 3,269 | |||||
Total liabilities | 300 | 492 | 792 | ||||||||
Total equity | 2,561 | (84 | ) | 2,477 | |||||||
Other | |||||||||||
Total assets | $ | 17,125 | $ | (1,483 | ) | $ | 15,642 | ||||
Total liabilities | 11,851 | 720 | 12,571 | ||||||||
Total equity | 5,274 | (2,203 | ) | 3,071 | |||||||
Consolidating adjustments | |||||||||||
Total assets | $ | (7,223 | ) | $ | (6,084 | ) | $ | (13,307 | ) | ||
Total liabilities | (989 | ) | (8,457 | ) | (9,446 | ) | |||||
Total equity | (6,234 | ) | 2,373 | (3,861 | ) |
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of cash flows for the year ended 31 December 2012 | |||||||||||
Willis Group Holdings | |||||||||||
Net cash (used in) provided by operating activities | $ | (42 | ) | $ | 19 | $ | (23 | ) | |||
Net cash provided by investing activities | — | 256 | 256 | ||||||||
Net cash provided by (used in) financing activities | 43 | (275 | ) | (232 | ) | ||||||
The Other Guarantors | |||||||||||
Net cash provided by operating activities | $ | 1,869 | $ | 524 | $ | 2,393 | |||||
Net cash used in investing activities | (26 | ) | (21 | ) | (47 | ) | |||||
Net cash used in financing activities | (2,006 | ) | (503 | ) | (2,509 | ) | |||||
The Issuer | |||||||||||
Net cash provided by operating activities | $ | 1,269 | $ | 87 | $ | 1,356 | |||||
Net cash used in investing activities | — | (53 | ) | (53 | ) | ||||||
Net cash (used in) provided by financing activities | (1,269 | ) | (34 | ) | (1,303 | ) | |||||
Other | |||||||||||
Net cash provided by (used in) operating activities | $ | 431 | $ | (528 | ) | $ | (97 | ) | |||
Net cash (used in) provided by investing activities | (146 | ) | 1,149 | 1,003 | |||||||
Net cash used in financing activities | (61 | ) | (621 | ) | (682 | ) | |||||
Consolidating adjustments | |||||||||||
Net cash used in operating activities | $ | (3,002 | ) | $ | (102 | ) | $ | (3,104 | ) | ||
Net cash used in investing activities | — | (1,331 | ) | (1,331 | ) | ||||||
Net cash provided by financing activities | 3,002 | 1,433 | 4,435 | ||||||||
As previously reported | Reclassifications | As Reclassified | |||||||||
(millions) | |||||||||||
Condensed consolidating statement of cash flows for the year ended 31 December 2011 | |||||||||||
Willis Group Holdings | |||||||||||
Net cash (used in) provided by operating activities | $ | (41 | ) | $ | 85 | $ | 44 | ||||
Net cash used in investing activities | — | (711 | ) | (711 | ) | ||||||
Net cash provided by financing activities | 41 | 626 | 667 | ||||||||
The Other Guarantors | |||||||||||
Net cash provided by (used in) operating activities | $ | 209 | $ | (568 | ) | $ | (359 | ) | |||
Net cash used in investing activities | (25 | ) | (33 | ) | (58 | ) | |||||
Net cash (used in) provided by financing activities | (97 | ) | 601 | 504 | |||||||
The Issuer | |||||||||||
Net cash provided by operating activities | $ | 110 | $ | 746 | $ | 856 | |||||
Net cash used in investing activities | — | (292 | ) | (292 | ) | ||||||
Net cash used in financing activities | (110 | ) | (454 | ) | (564 | ) | |||||
Other | |||||||||||
Net cash provided by (used in) operating activities | $ | 1,269 | $ | (1,138 | ) | $ | 131 | ||||
Net cash (used in) provided by investing activities | (76 | ) | 123 | 47 | |||||||
Net cash (used in) provided by financing activities | (1,156 | ) | 1,015 | (141 | ) | ||||||
Consolidating adjustments | |||||||||||
Net cash (used in) provided by operating activities | $ | (1,108 | ) | $ | 875 | $ | (233 | ) | |||
Net cash provided by investing activities | — | 913 | 913 | ||||||||
Net cash provided by (used in) financing activities | 1,108 | (1,788 | ) | (680 | ) |
Year Ended December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Commissions and fees | $ | — | $ | 8 | $ | — | $ | 3,625 | $ | — | $ | 3,633 | |||||||||||
Investment income | — | — | — | 15 | — | 15 | |||||||||||||||||
Other income | — | — | — | 7 | — | 7 | |||||||||||||||||
Total revenues | — | 8 | — | 3,647 | — | 3,655 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Salaries and benefits | (1 | ) | (103 | ) | — | (2,103 | ) | — | (2,207 | ) | |||||||||||||
Other operating expenses | — | (235 | ) | (1 | ) | (380 | ) | — | (616 | ) | |||||||||||||
Depreciation expense | — | (23 | ) | — | (71 | ) | — | (94 | ) | ||||||||||||||
Amortization of intangible assets | — | — | — | (55 | ) | — | (55 | ) | |||||||||||||||
Net gain on disposal of operations | — | — | — | 12 | (10 | ) | 2 | ||||||||||||||||
Total expenses | (1 | ) | (361 | ) | (1 | ) | (2,597 | ) | (10 | ) | (2,970 | ) | |||||||||||
OPERATING (LOSS) INCOME | (1 | ) | (353 | ) | (1 | ) | 1,050 | (10 | ) | 685 | |||||||||||||
Income from Group undertakings | — | 491 | 68 | 86 | (645 | ) | — | ||||||||||||||||
Expenses due to Group undertakings | (10 | ) | (153 | ) | (26 | ) | (456 | ) | 645 | — | |||||||||||||
Loss from extinguishment of debt | — | (60 | ) | — | — | — | (60 | ) | |||||||||||||||
Interest expense | (42 | ) | (61 | ) | (18 | ) | (5 | ) | — | (126 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (53 | ) | (136 | ) | 23 | 675 | (10 | ) | 499 | ||||||||||||||
Income taxes | — | 29 | (6 | ) | (145 | ) | — | (122 | ) | ||||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (53 | ) | (107 | ) | 17 | 530 | (10 | ) | 377 | ||||||||||||||
Interest in earnings of associates, net of tax | — | 9 | — | (9 | ) | — | — | ||||||||||||||||
Equity account for subsidiaries | 418 | 515 | 344 | — | (1,277 | ) | — | ||||||||||||||||
INCOME FROM CONTINUING OPERATIONS | 365 | 417 | 361 | 521 | (1,287 | ) | 377 | ||||||||||||||||
Discontinued operations, net of tax | — | — | — | — | — | — | |||||||||||||||||
NET INCOME | 365 | 417 | 361 | 521 | (1,287 | ) | 377 | ||||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | — | (12 | ) | — | (12 | ) | |||||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 365 | $ | 417 | $ | 361 | $ | 509 | $ | (1,287 | ) | $ | 365 |
Year Ended December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Comprehensive income | $ | 522 | $ | 565 | $ | 504 | $ | 636 | $ | (1,693 | ) | $ | 534 | ||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | — | (12 | ) | — | (12 | ) | |||||||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 522 | $ | 565 | $ | 504 | $ | 624 | $ | (1,693 | ) | $ | 522 |
Year Ended December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Commissions and fees | $ | — | $ | — | $ | — | $ | 3,458 | $ | — | $ | 3,458 | |||||||||||
Investment income | — | 1 | — | 17 | — | 18 | |||||||||||||||||
Other income | — | — | — | 4 | — | 4 | |||||||||||||||||
Total revenues | — | 1 | — | 3,479 | — | 3,480 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Salaries and benefits | (2 | ) | (96 | ) | — | (2,377 | ) | — | (2,475 | ) | |||||||||||||
Other operating expenses | (4 | ) | (162 | ) | 1 | (416 | ) | — | (581 | ) | |||||||||||||
Depreciation expense | — | (16 | ) | — | (63 | ) | — | (79 | ) | ||||||||||||||
Amortization of intangible assets | — | — | — | (59 | ) | — | (59 | ) | |||||||||||||||
Goodwill impairment | — | — | — | (492 | ) | — | (492 | ) | |||||||||||||||
Net loss on disposal of operations | — | �� | — | — | (3 | ) | — | (3 | ) | ||||||||||||||
Total expenses | (6 | ) | (274 | ) | 1 | (3,410 | ) | — | (3,689 | ) | |||||||||||||
OPERATING (LOSS) INCOME | (6 | ) | (273 | ) | 1 | 69 | — | (209 | ) | ||||||||||||||
Income from Group undertakings | — | 436 | 79 | 111 | (626 | ) | — | ||||||||||||||||
Expenses due to Group undertakings | — | (185 | ) | (27 | ) | (414 | ) | 626 | — | ||||||||||||||
Interest expense | (43 | ) | (69 | ) | (8 | ) | (8 | ) | — | (128 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (49 | ) | (91 | ) | 45 | (242 | ) | — | (337 | ) | |||||||||||||
Income taxes | — | 76 | (11 | ) | (166 | ) | — | (101 | ) | ||||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (49 | ) | (15 | ) | 34 | (408 | ) | — | (438 | ) | |||||||||||||
Interest in earnings of associates, net of tax | — | 8 | — | (3 | ) | — | 5 | ||||||||||||||||
Equity account for subsidiaries | (397 | ) | (390 | ) | (461 | ) | — | 1,248 | — | ||||||||||||||
LOSS FROM CONTINUING OPERATIONS | (446 | ) | (397 | ) | (427 | ) | (411 | ) | 1,248 | (433 | ) | ||||||||||||
Discontinued operations, net of tax | — | — | — | — | — | — | |||||||||||||||||
NET LOSS | (446 | ) | (397 | ) | (427 | ) | (411 | ) | 1,248 | (433 | ) | ||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | — | (13 | ) | — | (13 | ) | |||||||||||||||
NET LOSS ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | (446 | ) | $ | (397 | ) | $ | (427 | ) | $ | (424 | ) | $ | 1,248 | $ | (446 | ) |
Year Ended December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Comprehensive loss | $ | (552 | ) | $ | (494 | ) | $ | (528 | ) | $ | (519 | ) | $ | 1,554 | $ | (539 | ) | ||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | — | (13 | ) | — | (13 | ) | |||||||||||||||
Comprehensive loss attributable to Willis Group Holdings | $ | (552 | ) | $ | (494 | ) | $ | (528 | ) | $ | (532 | ) | $ | 1,554 | $ | (552 | ) |
Year Ended December 31, 2011 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Commissions and fees | $ | — | $ | — | $ | — | $ | 3,414 | $ | — | $ | 3,414 | |||||||||||
Investment income | — | 2 | — | 29 | — | 31 | |||||||||||||||||
Other income | — | — | — | 2 | — | 2 | |||||||||||||||||
Total revenues | — | 2 | — | 3,445 | — | 3,447 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Salaries and benefits | (3 | ) | (69 | ) | — | (2,015 | ) | — | (2,087 | ) | |||||||||||||
Other operating expenses | (17 | ) | (70 | ) | 4 | (573 | ) | — | (656 | ) | |||||||||||||
Depreciation expense | — | (14 | ) | — | (60 | ) | — | (74 | ) | ||||||||||||||
Amortization of intangible assets | — | — | — | (68 | ) | — | (68 | ) | |||||||||||||||
Net gain on disposal of operations | — | — | — | 4 | — | 4 | |||||||||||||||||
Total expenses | (20 | ) | (153 | ) | 4 | (2,712 | ) | — | (2,881 | ) | |||||||||||||
OPERATING (LOSS) INCOME | (20 | ) | (151 | ) | 4 | 733 | — | 566 | |||||||||||||||
Income from Group undertakings | — | 438 | 64 | 119 | (621 | ) | — | ||||||||||||||||
Expenses due to Group undertakings | — | (180 | ) | (26 | ) | (415 | ) | 621 | — | ||||||||||||||
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs | — | — | (171 | ) | — | — | (171 | ) | |||||||||||||||
Interest expense | (34 | ) | (99 | ) | (15 | ) | (8 | ) | — | (156 | ) | ||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (54 | ) | 8 | (144 | ) | 429 | — | 239 | |||||||||||||||
Income taxes | — | 47 | 39 | (117 | ) | (1 | ) | (32 | ) | ||||||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (54 | ) | 55 | (105 | ) | 312 | (1 | ) | 207 | ||||||||||||||
Interest in earnings of associates, net of tax | — | 8 | — | 4 | — | 12 | |||||||||||||||||
Equity account for subsidiaries | 258 | 183 | 322 | — | (763 | ) | — | ||||||||||||||||
INCOME FROM CONTINUING OPERATIONS | 204 | 246 | 217 | 316 | (764 | ) | 219 | ||||||||||||||||
Discontinued operations, net of tax | — | — | — | 1 | — | 1 | |||||||||||||||||
NET INCOME | 204 | 246 | 217 | 317 | (764 | ) | 220 | ||||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | — | (16 | ) | — | (16 | ) | |||||||||||||||
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 204 | $ | 246 | $ | 217 | $ | 301 | $ | (764 | ) | $ | 204 |
Year Ended December 31, 2011 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Comprehensive income | $ | 1 | $ | 48 | $ | 20 | $ | 114 | $ | (167 | ) | $ | 16 | ||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | — | (15 | ) | — | (15 | ) | |||||||||||||||
Comprehensive income attributable to Willis Group Holdings | $ | 1 | $ | 48 | $ | 20 | $ | 99 | $ | (167 | ) | $ | 1 |
As at December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||||||
Cash and cash equivalents | $ | 3 | $ | 3 | $ | — | $ | 790 | $ | — | $ | 796 | |||||||||||
Accounts receivable, net | — | 4 | — | 1,037 | — | 1,041 | |||||||||||||||||
Fiduciary assets | — | — | — | 8,412 | — | 8,412 | |||||||||||||||||
Deferred tax assets | — | — | — | 16 | (1 | ) | 15 | ||||||||||||||||
Other current assets | 1 | 36 | 1 | 186 | (27 | ) | 197 | ||||||||||||||||
Amounts due from group undertakings | 4,051 | 975 | 793 | 1,484 | (7,303 | ) | — | ||||||||||||||||
Total current assets | 4,055 | 1,018 | 794 | 11,925 | (7,331 | ) | 10,461 | ||||||||||||||||
NON-CURRENT ASSETS | |||||||||||||||||||||||
Investments in subsidiaries | — | 3,716 | 2,705 | — | (6,421 | ) | — | ||||||||||||||||
Fixed assets, net | — | 66 | — | 415 | — | 481 | |||||||||||||||||
Goodwill | — | — | — | 2,838 | — | 2,838 | |||||||||||||||||
Other intangible assets, net | — | — | — | 353 | — | 353 | |||||||||||||||||
Investments in associates | — | 156 | — | 20 | — | 176 | |||||||||||||||||
Deferred tax assets | — | — | — | 7 | — | 7 | |||||||||||||||||
Pension benefits asset | — | — | — | 278 | — | 278 | |||||||||||||||||
Other non-current assets | 4 | 5 | 9 | 188 | — | 206 | |||||||||||||||||
Non-current amounts due from group undertakings | — | 1,113 | 518 | — | (1,631 | ) | — | ||||||||||||||||
Total non-current assets | 4 | 5,056 | 3,232 | 4,099 | (8,052 | ) | 4,339 | ||||||||||||||||
TOTAL ASSETS | $ | 4,059 | $ | 6,074 | $ | 4,026 | $ | 16,024 | $ | (15,383 | ) | $ | 14,800 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||||||
Fiduciary liabilities | $ | — | $ | — | $ | — | $ | 8,412 | $ | — | $ | 8,412 | |||||||||||
Deferred revenue and accrued expenses | 2 | 29 | — | 555 | — | 586 | |||||||||||||||||
Income taxes payable | — | 4 | 5 | 39 | (27 | ) | 21 | ||||||||||||||||
Short-term debt and current portion of long-term debt | — | — | 15 | — | — | 15 | |||||||||||||||||
Deferred tax liabilities | — | — | — | 25 | — | 25 | |||||||||||||||||
Other current liabilities | 62 | 42 | 11 | 300 | — | 415 | |||||||||||||||||
Amounts due to group undertakings | — | 5,813 | 157 | 1,333 | (7,303 | ) | — | ||||||||||||||||
Total current liabilities | 64 | 5,888 | 188 | 10,664 | (7,330 | ) | 9,474 | ||||||||||||||||
NON-CURRENT LIABILITIES | |||||||||||||||||||||||
Investments in subsidiaries | 985 | — | — | — | (985 | ) | — | ||||||||||||||||
Long-term debt | 795 | 733 | 782 | 1 | — | 2,311 | |||||||||||||||||
Liabilities for pension benefits | — | — | — | 136 | — | 136 | |||||||||||||||||
Deferred tax liabilities | — | 1 | — | 55 | — | 56 | |||||||||||||||||
Provisions for liabilities | — | — | — | 206 | — | 206 | |||||||||||||||||
Other non-current liabilities | — | 48 | — | 326 | — | 374 | |||||||||||||||||
Non-current amounts due to group undertakings | — | 518 | 423 | 690 | (1,631 | ) | — | ||||||||||||||||
Total non-current liabilities | 1,780 | 1,300 | 1,205 | 1,414 | (2,616 | ) | 3,083 | ||||||||||||||||
TOTAL LIABILITIES | $ | 1,844 | $ | 7,188 | $ | 1,393 | $ | 12,078 | $ | (9,946 | ) | $ | 12,557 |
As at December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
EQUITY | |||||||||||||||||||||||
Total Willis Group Holdings stockholders’ equity | 2,215 | (1,114 | ) | 2,633 | 3,918 | (5,437 | ) | 2,215 | |||||||||||||||
Noncontrolling interests | — | — | — | 28 | — | 28 | |||||||||||||||||
Total equity | 2,215 | (1,114 | ) | 2,633 | 3,946 | (5,437 | ) | 2,243 | |||||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 4,059 | $ | 6,074 | $ | 4,026 | $ | 16,024 | $ | (15,383 | ) | $ | 14,800 |
As at December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
CURRENT ASSETS | |||||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | — | $ | — | $ | 499 | $ | — | $ | 500 | |||||||||||
Accounts receivable, net | — | — | — | 933 | — | 933 | |||||||||||||||||
Fiduciary assets | — | — | — | 9,271 | — | 9,271 | |||||||||||||||||
Deferred tax assets | — | — | — | 13 | — | 13 | |||||||||||||||||
Other current assets | 1 | 79 | 1 | 114 | (14 | ) | 181 | ||||||||||||||||
Amounts due from group undertakings | 4,091 | 1,070 | 801 | 864 | (6,826 | ) | — | ||||||||||||||||
Total current assets | 4,093 | 1,149 | 802 | 11,694 | (6,840 | ) | 10,898 | ||||||||||||||||
NON-CURRENT ASSETS | |||||||||||||||||||||||
Investments in subsidiaries | — | 2,939 | 2,464 | — | (5,403 | ) | — | ||||||||||||||||
Fixed assets, net | — | 74 | — | 394 | — | 468 | |||||||||||||||||
Goodwill | — | — | — | 2,827 | — | 2,827 | |||||||||||||||||
Other intangible assets, net | — | — | — | 385 | — | 385 | |||||||||||||||||
Investments in associates | — | 143 | — | 31 | — | 174 | |||||||||||||||||
Deferred tax assets | — | — | — | 18 | — | 18 | |||||||||||||||||
Pension benefits asset | — | — | — | 136 | — | 136 | |||||||||||||||||
Other non-current assets | 5 | 41 | 3 | 157 | — | 206 | |||||||||||||||||
Non-current amounts due from group undertakings | — | 1,064 | — | — | (1,064 | ) | — | ||||||||||||||||
Total non-current assets | 5 | 4,261 | 2,467 | 3,948 | (6,467 | ) | 4,214 | ||||||||||||||||
TOTAL ASSETS | $ | 4,098 | $ | 5,410 | $ | 3,269 | $ | 15,642 | $ | (13,307 | ) | $ | 15,112 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||||||
Fiduciary liabilities | $ | — | $ | — | $ | — | $ | 9,271 | $ | — | $ | 9,271 | |||||||||||
Deferred revenue and accrued expenses | 2 | — | — | 539 | — | 541 | |||||||||||||||||
Income taxes payable | — | 4 | 11 | 18 | (14 | ) | 19 | ||||||||||||||||
Short-term debt and current portion of long-term debt | — | — | 15 | — | — | 15 | |||||||||||||||||
Deferred tax liabilities | — | — | — | 21 | — | 21 | |||||||||||||||||
Other current liabilities | 60 | 73 | — | 194 | — | 327 | |||||||||||||||||
Amounts due to group undertakings | — | 5,714 | 69 | 1,043 | (6,826 | ) | — | ||||||||||||||||
Total current liabilities | 62 | 5,791 | 95 | 11,086 | (6,840 | ) | 10,194 | ||||||||||||||||
NON-CURRENT LIABILITIES | |||||||||||||||||||||||
Investments in subsidiaries | 1,542 | — | — | — | (1,542 | ) | — | ||||||||||||||||
Long-term debt | 795 | 1,268 | 274 | 1 | — | 2,338 | |||||||||||||||||
Liabilities for pension benefits | — | — | — | 282 | — | 282 | |||||||||||||||||
Deferred tax liabilities | — | — | — | 18 | — | 18 | |||||||||||||||||
Provisions for liabilities | — | — | — | 180 | — | 180 | |||||||||||||||||
Other non-current liabilities | — | 12 | — | 363 | — | 375 | |||||||||||||||||
Non-current amounts due to group undertakings | — | — | 423 | 641 | (1,064 | ) | — | ||||||||||||||||
Total non-current liabilities | 2,337 | 1,280 | 697 | 1,485 | (2,606 | ) | 3,193 | ||||||||||||||||
TOTAL LIABILITIES | $ | 2,399 | $ | 7,071 | $ | 792 | $ | 12,571 | $ | (9,446 | ) | $ | 13,387 |
As at December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
EQUITY | |||||||||||||||||||||||
Total Willis Group Holdings stockholders’ equity | 1,699 | (1,661 | ) | 2,477 | 3,045 | (3,861 | ) | 1,699 | |||||||||||||||
Noncontrolling interests | — | — | — | 26 | — | 26 | |||||||||||||||||
Total equity | 1,699 | (1,661 | ) | 2,477 | 3,071 | (3,861 | ) | 1,725 | |||||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 4,098 | $ | 5,410 | $ | 3,269 | $ | 15,642 | $ | (13,307 | ) | $ | 15,112 |
Year Ended December 31, 2013 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 4 | $ | 399 | $ | 63 | $ | 662 | $ | (567 | ) | $ | 561 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | 3 | — | 9 | — | 12 | |||||||||||||||||
Additions to fixed assets | — | (18 | ) | — | (94 | ) | — | (112 | ) | ||||||||||||||
Additions to intangible assets | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | (237 | ) | — | (30 | ) | 237 | (30 | ) | ||||||||||||||
Payments to acquire other investments | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
Proceeds from sale of associates | — | — | — | 4 | — | 4 | |||||||||||||||||
Proceeds from sale of operations, net of cash disposed | — | — | — | 257 | (237 | ) | 20 | ||||||||||||||||
Proceeds from intercompany investing activities | 383 | 160 | 132 | 60 | (735 | ) | — | ||||||||||||||||
Repayments of intercompany investing activities | (347 | ) | (120 | ) | (442 | ) | (780 | ) | 1,689 | — | |||||||||||||
Net cash provided by (used in) investing activities | 36 | (212 | ) | (310 | ) | (588 | ) | 954 | (120 | ) | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||||
Senior notes issued | — | — | 522 | — | — | 522 | |||||||||||||||||
Debt issuance costs | — | — | (8 | ) | — | — | (8 | ) | |||||||||||||||
Repayments of debt | — | (521 | ) | (15 | ) | — | — | (536 | ) | ||||||||||||||
Tender premium on extinguishment of senior notes | — | (65 | ) | — | — | — | (65 | ) | |||||||||||||||
Proceeds from issue of shares | 155 | — | — | — | — | 155 | |||||||||||||||||
Excess tax benefits from share-based payment arrangement | — | — | — | 2 | — | 2 | |||||||||||||||||
Dividends paid | (193 | ) | (230 | ) | (330 | ) | (7 | ) | 567 | (193 | ) | ||||||||||||
Acquisition of noncontrolling interests | — | — | — | (4 | ) | — | (4 | ) | |||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Proceeds from intercompany financing activities | — | 1,075 | 147 | 467 | (1,689 | ) | — | ||||||||||||||||
Repayments of intercompany financing activities | — | (443 | ) | (69 | ) | (223 | ) | 735 | — | ||||||||||||||
Net cash (used in) provided by financing activities | (38 | ) | (184 | ) | 247 | 225 | (387 | ) | (137 | ) | |||||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 | 3 | — | 299 | — | 304 | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (8 | ) | — | (8 | ) | |||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 1 | — | — | 499 | — | 500 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 3 | $ | 3 | $ | — | $ | 790 | $ | — | $ | 796 |
Year Ended December 31, 2012 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (23 | ) | $ | 2,393 | $ | 1,356 | $ | (97 | ) | $ | (3,104 | ) | $ | 525 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | — | — | 5 | — | 5 | |||||||||||||||||
Additions to fixed assets | — | (26 | ) | — | (109 | ) | — | (135 | ) | ||||||||||||||
Additions to intangible assets | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | — | — | (33 | ) | — | (33 | ) | |||||||||||||||
Payments to acquire other investments | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
Proceeds from sale of operations, net of cash disposed | — | — | — | — | — | — | |||||||||||||||||
Proceeds from intercompany investing activities | 256 | 176 | 78 | 1,230 | (1,740 | ) | — | ||||||||||||||||
Repayments of intercompany investing activities | — | (197 | ) | (131 | ) | (81 | ) | 409 | — | ||||||||||||||
Net cash provided by (used in) investing activities | 256 | (47 | ) | (53 | ) | 1,003 | (1,331 | ) | (172 | ) | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||||
Repayments of debt | — | (4 | ) | (11 | ) | — | — | (15 | ) | ||||||||||||||
Proceeds from issue of other debt | — | — | 1 | — | — | 1 | |||||||||||||||||
Repurchase of shares | (100 | ) | — | — | — | — | (100 | ) | |||||||||||||||
Proceeds from issue of shares | 53 | — | — | — | — | 53 | |||||||||||||||||
Excess tax benefits from share-based payment arrangement | — | — | — | 2 | — | 2 | |||||||||||||||||
Dividends paid | (185 | ) | (1,220 | ) | (1,069 | ) | (815 | ) | 3,104 | (185 | ) | ||||||||||||
Proceeds from sale of noncontrolling interests | — | — | — | 3 | — | 3 | |||||||||||||||||
Acquisition of noncontrolling interests | — | — | — | (39 | ) | — | (39 | ) | |||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | (11 | ) | — | (11 | ) | |||||||||||||||
Proceeds from intercompany financing activities | — | 81 | — | 328 | (409 | ) | — | ||||||||||||||||
Repayments of intercompany financing activities | — | (1,366 | ) | (224 | ) | (150 | ) | 1,740 | — | ||||||||||||||
Net cash used in financing activities | (232 | ) | (2,509 | ) | (1,303 | ) | (682 | ) | 4,435 | (291 | ) | ||||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1 | (163 | ) | — | 224 | — | 62 | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 2 | — | 2 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 163 | — | 273 | — | 436 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 1 | $ | — | $ | — | $ | 499 | $ | — | $ | 500 |
Year Ended December 31, 2011 | |||||||||||||||||||||||
Willis Group Holdings | The Other Guarantors | The Issuer | Other | Consolidating adjustments | Consolidated | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 44 | $ | (359 | ) | $ | 856 | $ | 131 | $ | (233 | ) | $ | 439 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||||
Proceeds on disposal of fixed and intangible assets | — | — | — | 13 | — | 13 | |||||||||||||||||
Additions to fixed assets | — | (25 | ) | — | (86 | ) | — | (111 | ) | ||||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Acquisitions of investments in associates | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||
Payments to acquire other investments | — | — | — | (5 | ) | — | (5 | ) | |||||||||||||||
Proceeds from sale of operations, net of cash disposed | — | — | — | 14 | — | 14 | |||||||||||||||||
Proceeds from intercompany investing activities | — | 105 | — | 224 | (329 | ) | — | ||||||||||||||||
Repayments of intercompany investing activities | (711 | ) | (138 | ) | (292 | ) | (101 | ) | 1,242 | — | |||||||||||||
Net cash (used in) investing activities | (711 | ) | (58 | ) | (292 | ) | 47 | 913 | (101 | ) | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||||
Repayments of revolving credit facility | — | (90 | ) | — | — | — | (90 | ) | |||||||||||||||
Senior notes issued | 794 | — | — | — | — | 794 | |||||||||||||||||
Debt issuance costs | (7 | ) | — | (5 | ) | — | — | (12 | ) | ||||||||||||||
Repayments of debt | — | (411 | ) | (500 | ) | — | — | (911 | ) | ||||||||||||||
Proceeds from issue of term loan | — | — | 300 | — | — | 300 | |||||||||||||||||
Make-whole on repurchase and redemption of senior notes | — | — | (158 | ) | — | — | (158 | ) | |||||||||||||||
Proceeds from issue of shares | 60 | — | — | — | — | 60 | |||||||||||||||||
Excess tax benefits from share-based payment arrangements | — | — | — | 5 | — | 5 | |||||||||||||||||
Dividends paid | (180 | ) | (47 | ) | — | (186 | ) | 233 | (180 | ) | |||||||||||||
Acquisition of noncontrolling interests | — | (4 | ) | — | (5 | ) | — | (9 | ) | ||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | (13 | ) | — | (13 | ) | |||||||||||||||
Proceeds from intercompany financing activities | — | 1,088 | — | 154 | (1,242 | ) | — | ||||||||||||||||
Repayments of intercompany financing activities | — | (32 | ) | (201 | ) | (96 | ) | 329 | — | ||||||||||||||
Net cash provided by (used in) financing activities | 667 | 504 | (564 | ) | (141 | ) | (680 | ) | (214 | ) | |||||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS | — | 87 | — | 37 | — | 124 | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (4 | ) | — | (4 | ) | |||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 76 | — | 240 | — | 316 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | — | $ | 163 | $ | — | $ | 273 | $ | — | $ | 436 |
Three Months Ended | |||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||
(millions, except per share data) | |||||||||||||||
2013 | |||||||||||||||
Total revenues | $ | 1,051 | $ | 890 | $ | 795 | $ | 919 | |||||||
Total expenses | (764 | ) | (719 | ) | (720 | ) | (767 | ) | |||||||
Net income (loss) | 223 | 107 | (27 | ) | 74 | ||||||||||
Net income (loss) attributable to Willis Group Holdings | 219 | 105 | (27 | ) | 68 | ||||||||||
Earnings per share — continuing operations | |||||||||||||||
— Basic | $ | 1.27 | $ | 0.60 | $ | (0.15 | ) | $ | 0.38 | ||||||
— Diluted | $ | 1.24 | $ | 0.59 | $ | (0.15 | ) | $ | 0.37 | ||||||
2012 | |||||||||||||||
Total revenues | $ | 1,013 | $ | 842 | $ | 754 | $ | 871 | |||||||
Total expenses | (696 | ) | (663 | ) | (684 | ) | (1,646 | ) | |||||||
Net income (loss) | 232 | 110 | 26 | (801 | ) | ||||||||||
Net income (loss) attributable to Willis Group Holdings | 225 | 108 | 26 | (805 | ) | ||||||||||
Earnings per share — continuing operations | |||||||||||||||
— Basic | $ | 1.29 | $ | 0.62 | $ | 0.15 | $ | (4.65 | ) | ||||||
— Diluted | $ | 1.28 | $ | 0.61 | $ | 0.15 | $ | (4.65 | ) |
Celia Brown - — Ms. Brown, age 59, was appointed an executive officer on January 23, 2012. Ms. Brown joined the Willis Group in 2010 and serves as the Willis Group Human Resources Director. Prior to joining the Willis Group, Ms. Brown spent over 20 years at XL Group plc where she held a number of senior roles. Ms. Brown served from 2006 to 2009 as the Executive Vice President, Head of Global HR and Corporate Relations at XL Group plc. Following XL Group plc, Ms. Brown formed an independent management consultancy, providing human resources services to not-for-profit, corporate and individual clients.
Stephen Hearn - — Mr. Hearn, age 47, was appointed an executive officer on January 1, 2012. Mr. Hearn joined the Willis Group in 2008 and was named Chairman and CEO of Willis Global in 2011, CEO of Willis Limited in 2012 and Group Deputy CEO in 2013. Since joining the Willis Group, Mr. Hearn has served as Chairman of Special Contingency Risk, Chairman of Willis Facultative and Chairman and CEO of Glencairn Limited. From 2009 until 2011 he led Faber & Dumas, Global Markets International and Willis Facultative. Prior to joining the Willis Group, Mr. Hearn served as Chairman and CEO of the Glencairn Group Limited and as President and CEO of Marsh Affinity Europe.
Todd Jones - — Mr. Jones, age 49, was appointed an executive officer and CEO of Willis North America on July 1, 2013. Mr. Jones joined Willis in 2003 as the North American Practice Leader for Willis’s Executive Risks Practice and served as the President of Willis North America from 2010 to 2013. Mr. Jones also served as a National Partner for the Northeast Region. Prior to joining Willis, Mr. Jones held various leadership roles in the insurance brokerage industry. Before entering the brokerage industry, he was a financial analyst and corporate banker for a regional bank that is now part of Wells Fargo, focusing on the telecommunications industry.
Michael K. Neborak - — Mr. Neborak, age 57, was appointed an executive officer and Group Chief Financial Officer on July 6, 2010.2010 and will continue to serve in this capacity until Mr. Greene succeeds him as Group Chief Financial Officer, effective June 2, 2014 or such earlier date as may be mutually agreed upon by the Company and Mr. Greene. Mr. Neborak joined Willis from MSCI Inc., a NYSE listed company, where he was Chief Financial Officer. With more than 30 years of experience in finance and accounting, Mr. Neborak also held senior positions with Citigroup, including divisional CFO and co-head of Corporate Strategy & Business Development, from 2000 to 2006, and prior to that, in the investment banking group at Salomon Smith Barney from 1982 to 2000. He began his career as an accountant with Arthur Andersen & Co.
Adam L. Rosman -Mr. — Mr. Rosman, age 48, was appointed Group General Counsel on May 7, 2012 and is responsible for legal, corporate secretary, compliance, audit and risk management. He joined Willis in 2009 and served for three years as the company'scompany’s Deputy Group General Counsel, responsible for Willis'Willis’ worldwide legal operations. Before joining Willis, Adam was Senior Vice President and Associate General Counsel at Cablevision Systems Corporation in Bethpage, NY, and before that he was a partner at the Washington D.C.-based law firm of Zuckerman Spaeder LLP, where he advised public companies and senior executives on a range of topics, including Sarbanes-Oxley. Between 1997 and 2003, Adam was an Assistant United States Attorney in Washington, D.C., where he prosecuted a wide range of matters. He also worked in 2000 and 2001 as Deputy Assistant to the President and Deputy Staff Secretary for President Clinton.
David Shalders - — Mr. Shalders, age 47, was appointed an executive officer and Group Operations & Technology Director on November 4, 2013. Prior to joining Willis, Mr. Shalders spent over a decade in senior operations and IT roles at the Royal Bank of Scotland Group, most recently as Global COO for Global Banking and Markets. Mr. Shalders also held roles as Head of London & Asia Operations and Head of Derivative Operations for NatWest at RBS.
Timothy D. Wright - — Mr. Wright, age 52, was appointed an executive officer in 2008 and in 2012 was appointed CEO of Willis International. Mr. Wright served as Group Chief Operating Officer from 2008 to 2012. Prior to joining the Willis Group, he was a Partner of Bain & Company where he led their Financial Services practice in London. Mr. Wright was previously UK Managing Partner of Booz Allen & Hamilton and led their insurance work globally. He has more than 20 years of experience in the insurance and financial service industries internationally.
Corporate Governance
The Board’s Committees
The Committees and its members, as of April 23, 2014 are described in further detail below.
Audit Committee | Compensation Committee | Governance Committee | Risk Committee | Executive Committee | ||||||
Dominic Casserley | X | |||||||||
Anna C. Catalano | X | X | ||||||||
Sir Roy Gardner | C | X | ||||||||
Sir Jeremy Hanley | X, F | |||||||||
Robyn S. Kravit | X | |||||||||
Wendy E. Lane | X, F | C | X | |||||||
Francisco Luzón | X | |||||||||
James F. McCann | C, CB | C | ||||||||
Jaymin Patel | X | |||||||||
Douglas B. Roberts | C, F | X | ||||||||
Michael J. Somers | X, F | |||||||||
Jeffrey W. Ubben | X |
C | Committee Chairman |
CB | Chairman of the Board |
F | Financial Expert |
X | Committee Member |
TheExecutive Committee has the full powers, authorities and discretions of the Board of the Directors, when it is not in session, in the management of the business and affairs of the Company, except as otherwise provided in the resolutions of the Board and under applicable law. The Executive Committee is currently composed of the Chairman of the Board, the CEO, the Presiding Independent Director (if any) and the Chairman of each Board Committee (James F. McCann, Dominic Casserley, Sir Roy Gardner, Wendy E. Lane and Douglas B. Roberts).
TheAudit Committee assists the Board in fulfilling its oversight responsibilities with respect to:
In addition, the Audit Committee provides an avenue for communication among internal audit, the independent auditors, management and the Board. The Audit Committee also focuses on major financial risk exposures, the steps management has taken to monitor and control such exposures, and, if appropriate, discusses with the independent auditor the guidelines and policies governing the process by which senior management and the relevant departments of the Company assess and manage the Company’s financial risk exposure. The Audit Committee operates under a charter, a copy of which can be found in the Investor Relations — Corporate Governance section of the Company’s website at www.willis.com. The Audit Committee is currently composed of Douglas B. Roberts (Chairman), Sir Jeremy Hanley, Wendy E. Lane and Michael J. Somers and met formally five times during 2013. In addition to holding formal meetings, the Audit Committee members met informally during the course of the year to discuss and review financial matters related to the Company as well as the Company’s filings with the SEC. After regularly scheduled meetings, the Committee also meets in executive session, which includes separate meetings with management, the internal auditors and external auditors. Mr. Roberts, Sir Jeremy Hanley, Ms. Lane and Mr. Somers are considered to be Audit Committee Financial Experts in light of their financial experience described in their biographies above.
TheCompensation Committee determines and approves the Company’s CEO’s compensation and recommends to the Board the compensation of other executive officers and non-employee directors. In addition, the Compensation Committee oversees the administration of the Company’s share-based award plans and, in consultation with senior management, establishes the Company’s general compensation philosophy and oversees the development and implementation of the Company’s compensation programs. In connection with those objectives, the Compensation Committee is also responsible for:
The Compensation Committee operates under a charter, a copy of which can be found in the Investor Relations — Corporate Governance section of the Company’s website atwww.willis.com. The Compensation Committee is currently composed of Wendy E. Lane (Chairman), Anna C. Catalano and Jaymin Patel and met formally four times during 2013. In addition to holding formal meetings, the Compensation Committee members met informally during the course of the year to discuss compensation related matters and acted from time to time by unanimous written consent. After regularly scheduled meetings, the Committee also meets in executive session, which includes meetings with its Compensation Consultant.
TheRisk Committee is responsible for assisting the Board in:
The Risk Committee operates under a charter, a copy of which can be found in the Investor Relations — Corporate Governance section of the Company’s website atwww.willis.com. The Risk Committee is currently composed of Sir Roy Gardner (Chairman), Robyn S. Kravit and Jeffrey W. Ubben and met formally four times in 2013. After regularly scheduled meetings, the Committee also meets in executive session.
TheCorporate Governance and Nominating Committee is responsible for assisting the Board in:
The Governance Committee identifies potential director nominees by preparing a candidate profile based upon the current Board’s strengths and needs and from a variety of sources, including engaging search firms or utilizing business contacts of the Board and senior management. Nominees must meet minimum qualification standards with respect to a variety of criteria including integrity, reputation, judgment, knowledge, experience, maturity, skills and personality, commitment and independence. The Governance Committee may also take into consideration additional factors it deems appropriate, which may include diversity, experience with business and other organizations, the interplay of the candidate’s experience with the experience of other Board members and the extent to which the candidate would be a desirable addition to the Board and any committee thereof.
With feedback from the Board members, members of the Governance Committee initiate contact with preferred candidates and, following feedback from interviews conducted by Governance Committee and Board members, recommend candidates to join the Board. The Governance Committee has the authority to retain a search firm to assist with this process. The Governance Committee considers candidates nominated by shareholders and ensures that such nominees are given appropriate consideration in the same manner as other candidates.
The Governance Committee operates under a charter, a copy of which can be found in the Investor Relations — Corporate Governance section of the Company’s website atwww.willis.com. The Governance Committee currently consists of James F. McCann (Chairman), Anna C. Catalano and Francisco Luzón met formally six times during 2013. After regularly scheduled meetings, the Committee also meets in executive session.
Highlights of the Company’s Corporate Governance Guidelines
Based on the Governance Committee’s recommendation, Company’s Corporate Governance Guidelines include, among other things, the following policies:
Our Corporate Governance Guidelines and all Board Committee Charters can be found in the Investor Relations — Corporate Governance section of our website atwww.willis.com. Copies are also available free of charge on request from the Company Secretary, Willis Group Holdings Public Limited Company, c/o Office of General Counsel, 200 Liberty Street, New York, NY10281-1033.
Ethical Code
The Company has adopted an Ethical Code applicable to all our directors, officers and employees, including our CEO, the Group Chief Financial Officer, the Group Financial Controller and all those involved in the Company’s accounting functions. Our Ethical Code can be found in the Investor Relations — Corporate Governance section of our website atwww.willis.com. A copy is also available free of charge on request from the Company Secretary, c/o Office of the General Counsel, Willis Group Holdings Public Limited Company, One World Financial Center, 200 Liberty Street, New York, NY 10281-1033. The Company intends to post on its website any amendments to, or waivers of, a provision of its Ethical Code in accordance with Item 406 of RegulationS-K.
Section 16 Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership (Forms 3, 4 and 5) with the SEC and the NYSE. Executive officers, directors and such security holders are required by SEC regulation to furnish the Company with copies of all such forms which they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and information provided by the reporting persons, all of its directors and executive officers made all required filings on time during 2013.
Compensation Discussion and Analysis The Typically, there are five named executives officers, but we have seven because the SEC rules require us to include (i) Joseph Plumeri who served as the Group CEO in 2013 from January 1st to January 6th and (ii) Victor Krauze who ceased to be CEO of Willis North America on July 1, 2013. On March 25, 2014, we announced that John Greene will succeed Michael Neborak as Group CFO on or before June 2, 2014. Michael Neborak will continue to serve as Group CFO during the transition period. The Compensation Committee establishes, implements, and monitors the Company’s compensation programs, philosophy, and objectives. The Committee has two primary objectives: (1) to attract and retain highly qualified executives in the competitive marketplace in which the Company operates; and (2) to create appropriate incentives for our executives to improve their individual performance and Company performance. To achieve these objectives, the Compensation Committee evaluates and sets the total compensation for each of our named executive officers – base salary, annual incentive compensation, and long-term incentive compensation – considering the scope of the named executive officer’s role, level of expertise, individual performance, business or functional unit performance, Company performance, and compensation paid to similarly-situated executives in peer group companies from which we compete for talent. To assist the Compensation Committee in all aspects of the named executive officer and the Company’s compensation program, the Compensation Committee has retained Towers Watson as its independent compensation consultant. The Compensation Committee spent significant time in 2012 and 2013 reviewing, evaluating, and re-designing our named executive officer compensation program, including a comprehensive shareholder outreach program to understand shareholder concerns. The Committee and Board considered the various viewpoints expressed by our shareholders and market factors, and adopted several changes to Company policies and our named executive officer compensation program, including: The macroeconomic environment in 2013, while better than 2012, remained challenging globally but especially in three of our key geographic markets, the United Kingdom, Western Europe and North America. Adjusted EBITDA, a key financial metric in calculating named executive officer compensation in 2013, was $874 million in 2013. That is down $16 million from $890 million in 2012. However, a like-for-like basis, assuming we expensed bonuses in 2012 the way we did in 2013, adjusted EBITDA in 2012 would have been $48 million lower, or $842 million. On that basis, adjusted EBITDA improved $32 million, or 3.8%, in 2013. Organic commissions and fees growth and adjusted EBITDA figures are non-GAAP figures. A reconciliation of the non-GAAP to GAAP figures are located onExhibit A. On the top line, Willis saw solid improvement in its revenues, with reported commissions and fees growth of 5.1% over 2012 and organic commissions and fees growth of 4.9%. That revenue growth breaks out by segment as follows: Additionally, in 2013, the Company: The annual incentive compensation awards for our named executive officers (other than Joseph Plumeri) were based on a combination of the Company’s performance (80% for Dominic Casserley and 60% for Michael Neborak, Stephen Hearn, Timothy Wright, Todd Jones and Victor Krauze) and individual and business unit or corporate function performance (20% for Dominic Casserley and 40% for Michael Neborak, Stephen Hearn, Timothy Wright, Todd Jones and Victor Krauze). The Company performance portion was calculated measuring organic commissions and fees growth against a target of 5.8% and adjusted EBITDA against a target of $902 million. The Compensation Committee set challenging targets to incent the Company and the named executive officers to deliver strong financial performance. Because the Company’s actual performance was close to but did not reach these targets, the portion of the annual incentive compensation awards based on Company performance produced a blended payout percentage of 89.5% of the targets. The Compensation Committee similarly set demanding individual and business unit performance goals. After taking into account both Company performance and individual and business unit performance based on the formula above, the annual incentive compensation awards to our named executive officers were as follows: Joseph Plumeri’s 2013 pro-rated annual incentive compensation award was based 100% on Group financial performance. As a result, he was awarded $1,678,125, representing approximately 90% of his target payout. Mr. Plumeri resigned as Group CEO on January 6, 2013 and as Chairman of the Board on July 7, 2013. Our current named executive officers also received time-based restricted stock units (“RSUs”), performance-based RSUs and time-based options aslong-term incentive awards. The performance-based RSUs are based onthree-year performance period targets in lieu of the previousone-year performance targets, designed to encourage sustained financial performance. The value of these awards cannot be fully calculated until the requisite time periods are reached, the three-year performance period has ended and performance against the targets is calculated. The grant date fair value of the awards are below, however, the named executive officer will not realize the full value of such awards if the three-year performance targets are not reached: The Compensation Committee is responsible for establishing, implementing, and monitoring the Company’s compensation programs, philosophy, and objectives. The Company has two primary objectives in designing compensation programs for our named executive officers: (1) to attract and retain highly qualified and talented executives and professionals in the highly competitive marketplace in which the Company operates (which includes large financial services companies); and (2) to create appropriate incentives for our executives to improve their individual performance with the objective of improving the Company’s long-term performance, thereby creating value and wealth for our shareholders. We want to incent executives to make the right investments, take appropriate risks, and execute on plans to drive shareholder value. Against those objectives, we consider each named executive officer’s total compensation in the context of compensation paid to similarly-situated executives in peer group companies from which we compete for talent, the scope of the role, the individual’s level of expertise and other market factors, and the performance of the individual, his or her business unit and the Company. The Compensation Committee has the independent authority to hire external consultants and, accordingly, has retained Towers Watson since April 2011 to provide advice to the Compensation Committee on all matters related to the senior executives’ compensation and compensation programs. The Compensation Committee has the independent authority to terminate Towers Watson’s services at its discretion. Representatives from Towers Watson attended all of the Compensation Committee’s regularly scheduled meetings in 2013. Towers Watson reports directly to the Compensation Committee and provides data on U.S. and U.K. executive compensation trends in the sectors in which the Company competes for senior executive talent as well as the broader market. In 2012 and 2013, Towers Watson advised the Compensation Committee on the redesign of the named executive officer compensation program and, in particular, the compensation package of Mr. Casserley, the Company’s new CEO, and certain changes to the compensation packages for the Company’s other executive officers. Towers Watson also assists with selecting appropriate peer companies and assessingnon-employeedirector compensation. The fees paid to Towers Watson in 2013 for these services totaled $200,572. The Compensation Committee uses the data and analysis provided by Towers Watson to better ensure that the Company’s compensation practices are consistent with the Company’s compensation philosophy and objectives for both the amount and composition of executive compensation, including that of the CEO. Based on the data and analysis provided by Towers Watson as well as information from management and outside counsel, the Compensation Committee applies business judgment in recommending compensation awards, taking into account the dynamic nature of the insurance sector internationally and the adaptability and response required by the Company’s leadership to manage significant changes that arise during the course of a year. Before its appointment as the consultant to the Compensation Committee in 2011, Towers Watson had been providing investment advisory services for the Company’s UK pension plan and was engaged directly by the fiduciary trustees of the plan. These trustees operate independently of the Company’s management. In addition, Towers Watson also provides human resource consulting services to certain of the Company’s subsidiaries (the majority of services is provided to international subsidiaries where Towers Watson was hired by local management). The additional services provided to the Company’s significant subsidiaries totaled $1,455,928 for 2013, of which $1,210,029 related to the services provided for UK pension plan and $245,899 related to the human resource consulting services. The decision to engage Towers Watson for the human resource consulting services before 2011 was originally approved by management and since that time the Compensation Committee has reviewed and approved such services. None of the Towers Watson representatives that advise the Compensation Committee provide any other services to the Company’s subsidiaries. The Compensation Committee determined that those services, in addition to the other factors specified in the NYSE listing rules, produced no conflicts of interest. As providers of insurance brokerage and risk consultancy services, we have no direct competitors of comparable financial size in our marketplace. However, we compete for talent with brokers of all sizes, with insurance carriers, and with companies in other financial services sectors. Accordingly, to assist the Compensation Committee in judging the reasonableness of its compensation recommendations, we typically use data related to a group of peer companies in the insurance sector, some of whom do not directly operate as insurance brokers. The Compensation Committee reviews its peer group on an annual basis to ensure that it remains reasonable and justifiable. It seeks to avoid changes unless there is some significant rationale. In 2013, following a review by Towers Watson and subsequent discussions between the Compensation Committee, Towers Watson, and management, the Compensation Committee approved a change to its peer group. The Compensation Committee approved removing Ace Limited and The Chubb Corporation due to their significantly larger revenue and market cap size and adding (i) Allied World Assurance Company, (ii) CNA Financial Corporation, (iii) Markel Corp, (iv) PartnerRe Ltd., and (v) Towers Watson & Co. based on similar size and other business comparability criteria. Making these changes increases the peer group size to 13 companies, and positions Willis at the 50th percentile in revenue and 61st percentile in market capitalization. The current peer group is listed below and consists of a combination of large and small insurance brokers, insurance carriers and a human resources and consulting services company: Insurance Brokers Insurance Carriers Human Resources and Consulting Services Company Our executive officers are based in both the United States and the United Kingdom. The country of each executive officer’s primary location is taken into account when reviewing and determining his or her annual base salary and, particularly, benefits. In order to attract and retain exceptional senior executives, the Compensation Committee generally sets the executive officer’s base salary at the median but evaluates the executive officer’s total compensation (defined as base salary, annual incentive compensation and long-term incentive compensation) in the context of compensation paid to similarly-situated executives in our peer group companies, considering the performance of the individual, business/functional unit, and the Company as well as the scope of the role, the individual’s level of expertise and other market factors. The Compensation Committee reviews each element of compensation separately, as well as the total compensation of named executive officers. Compensation differences among the named executive officers reflect their different roles, their contributions, and the different market pay relating to those roles. In connection with our 2013 Annual General Meeting of Shareholders, the proposal to approve the executive compensation of the Company’s named executive officers for fiscal 2012 received 134,061,593 votes in favor of it, or approximately 89% of the votes cast. Although this vote was advisory (and therefore not binding on the Company or the Board), the Board and the Compensation Committee has considered, and will continue to consider, the outcome of the vote as well as shareholder comments when making future compensation decisions for named executive officers. Based on the results from the 2013 Annual General Meeting of Shareholders, the Compensation Committee believes that the shareholder vote endorses the compensation philosophy of the Company but continues to evaluate its plans based on advice of compensation experts as well as changing market conditions. The chart below sets forth the main components, objectives, key features, and details of our named executive officer compensation program. As discussed in more detail in Section 3.0, the three components of our named executive officers’ compensation are: base salary, annual incentive compensation, and long-term incentive compensation. BASE SALARY (Fixed) • Provide secure base of cash compensation • Attract and retain highly talented executives • Positioned at/around median level in our peer group companies • Salary adjustments made only to reflect changes in responsibilities or when competitive market conditions warrant • The CEO’s amount of fixed pay was lowered by almost 45% from prior CEO ANNUAL INCENTIVE COMPENSATION (Variable) • Incent and reward executive officer contribution in generating: • strong financial performance at Company • strong financial/strategic performance at their business/functional unit • Retain strong performers • Provide annual performance-driven wealth creation • Annual incentive compensation awards for the CEO were based 80%, awards for the other named executive officers were based 60% and for Mr. Plumeri were based 100% on the Company’s performance against new revenue and profit financial • Organic Commissions and Fees Growth • Adjusted EBITDA • For named executive officers other than the CEO, the annual incentive compensation awards are paid entirely in the form of cash(3) • Compensation Committee confirmed its philosophy that incentive pay should be performance driven and not guaranteed(4) • Payout determined using annual incentive sliding scale that correlates performance and payouts • The Company utilized a high ratio of variable pay to fixed pay to tie compensation to performance • Company financial metrics have a higher performance threshold for the CEO and other named executive officers than the pool established for other employees • The CEO’s annual incentive compensation awards are capped • For the CEO, lowered the proportion of target annual incentive compensation relative to long-term incentive compensation as compared to the former CEO LONG-TERM INCENTIVE COMPENSATION (Variable) • Align executive officers’ interests with those of our shareholders • Incent long-term decision making andstrong-value creation • Reward exceptional performance by executive officers • Retain strong performers • Grants made in the form of: • performance-based RSUs • time-based options • time-based RSUs • Earned performance portion of 2013long-term incentive compensation will be determined using new revenue and profitmetrics that are different from annual incentive compensation metrics(1)(2): • Organic Commissions and Fees Growth • Adjusted EBIT (with Cost of Capital Modifier) • Dividends were not payable on any performance-based RSUs • 2013 Long-Term Incentive Program includes three-year performance period to better reflect pay forlong-term performance. At the end of the three-year performance period, earned performance-based RSUs will be determined using long-term incentive sliding scale that incorporates symmetrical relationship between performance and payouts. • For CEO, increased the proportion oflong-term incentive compensation relative to annual incentive compensation In January 2013, the Board appointed Dominic Casserley as the Company’s new CEO and consistent with the Compensation Committee’s and Board’s compensation philosophy for 2013 and beyond, we structured the CEO compensation as follows: The key components of our named executive officers’ annual compensation are: Base Salary — Base salary is intended to provide a fixed level of remuneration to fairly compensate and retain executives for their time and effort based on the individual’s role, experience and skill. The Compensation Committee strives to set base salary at a competitive level in the relevant markets in which our executive officers operate. Base salaries are reviewed by the Compensation Committee for all the Company’s executive officers relative to our peer group and, from time to time, against other U.S. or U.K. survey data, as applicable. The base salary levels are generally positioned around the median of our peer group companies. In line with our compensation philosophy, exceptional performance by our executive officers is generally rewarded through annual and/or long-term incentive compensation and not through base salaries. Adjustments to base salaries are made by the Compensation Committee to reflect changes in responsibilities or when competitive market conditions warrant. The following reflects the changes to the base salaries of our named executive officers during the past year: Annual Incentive Compensation — Our annual incentive compensation plan is designed to incent and reward our named executive officers for their contribution in generating strong financial performance at the Company, strong financial or strategic performance at their business or functional unit, as well as to retain strong performers. Each current named executive officer is eligible to receive an annual incentive compensation award under the Company’s Annual Incentive Plan (“AIP”). AIP awards are an integral component of the executive officer’s total compensation and are based on specific company financial results as well as individual executive officer strategic objectives, including business/functional unit performance. The AIP is intended to deliver exceptional pay for exceptional performance and provides a well-timed link between recent performance and individual compensation, which is especially pertinent with the de-emphasis on regular base-pay increases. Annual incentive compensation, which may be paid in cash and/or equity, is granted under the Willis Group Senior Management Incentive Plan (the “SMIP”) to the extent named executive officers are “covered employees” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”). Generally, annual incentive compensation awards to the executive officers are approved and, for named executive officers who are “covered employees” under Section 162(m), are typically certified by the Compensation Committee in February, with payments made in March. The 2013 annual incentive compensation awards under the AIP for the named executive officers were structured as follows: The resulting percentage was applied against the officer’s annual incentive compensation target award, which is a percentage of the officer’s base salary set forth below in the table “Summary of Annual Incentive Compensation Calculation for all Named Executive Officers”. Company Performance Portion of Annual Incentive Compensation (80% of AIP for Casserley, 60% of AIP for Neborak, Hearn, Wright, Jones and Krauze and 100% for Plumeri) As stated above, the Company financial measures used for determining the named executive officers’ annual incentive compensation award were organic commissions and fees growth and adjusted EBITDA. The Board selected those metrics because they believe they are key drivers of increasing cash flow and, therefore, important constituents of shareholder value creation. Additionally, adjusted EBITDA is an appropriate short-term metric because it measures cash-based operating income and ensures that appropriate investment in the Company is encouraged. As discussed above, the Compensation Committee set challenging but achievable stretch target levels at 100% payout to incent strong Company financial performance. In addition, the Compensation Committee believes it has set very aggressive metrics for the maximum level of financial performance, which would be extremely difficult to obtain, but which, if attained, would have resulted in the creation of substantial long-term value for the Company. With respect to the organic commissions and fees growth based component of the award, the following scale applied: As stated above, the Company reported 2013 organic commissions and fees growth of 4.9%. Based on the interpolation of the above sliding scale, this produced a payout percentage of 90.8% for this portion of each of the named executive officer’s annual incentive award. With respect to the adjusted EBITDA component of the award, the following scale applied: The Company reported 2013 adjusted EBITDA of $874 million. Based on the interpolation of the above sliding scale, this produced a payout percentage of 88.2% for this portion of each of the named executive officer’s annual incentive award. Based on the application of the above two scales, the blended payout percentage for the Company’s performance against the organic commissions and fees growth and adjusted EBITDA targets was 89.5% of target. This comprised 80% of Mr. Casserley’s annual incentive compensation award, 100% of Mr. Plumeri’s annual incentive compensation award and 60% of each of the other named executive officer’s annual incentive compensation award. Individual Strategic Objectives and Business Unit Financial Goals (20% of AIP for Casserley, 40% of AIP for Neborak, Hearn, Wright, Jones and Krauze and 0% for Plumeri) The Compensation Committee then considered the individual strategic objectives and business unit financial goals established at the beginning of 2013. The Compensation Committee reviewed the executives’ performance against those objectives in the context of the overall Company financial and strategic performance. The Compensation Committee consulted with the Chairman of the Board regarding Mr. Casserley’s achievement of his objectives. Key factors and resulting payout decisions are set forth below: Dominic Casserley As a result of the achievement of these goals, the Compensation Committee funded this portion of his annual incentive compensation award at 100%. Michael Neborak As a result of the achievement of these goals, the Compensation Committee funded this portion of his annual incentive compensation award at 90.8%. Stephen Hearn As a result of the achievement of these goals, the Compensation Committee funded this portion of his annual incentive compensation award at 95.8%. Timothy Wright As a result of the achievement of these goals, the Compensation Committee funded this portion of his annual incentive compensation award at 97.5%. Todd Jones As a result of the achievement of these goals, the Compensation Committee funded this portion of his annual incentive compensation award at 102.0%. Victor Krauze As a result of the achievement of these goals, the Compensation Committee funded this portion of his annual incentive compensation award at 90.8%. The following table sets forth the calculation for 2013 annual incentive compensation awards all named executive officers: Summary of Annual Incentive Compensation Calculation for all Named Executive Officers Named Executive Officer(1) Dominic Casserley(2) Michael Neborak Stephen Hearn $ or 828,920 $ or 1,525,213 Timothy Wright $ or 782,000 $ or 1,268,326 Todd Jones(3) Victor Krauze(4) Joseph Plumeri(5) Long-Term Incentive Compensation Our long-term incentives are a significant element of our executive officers’ compensation and have typically been in the form of equity awards. In 2011, we implemented a Long-Term Incentive Program for senior leaders (“2011 LTI Program”). In that year, we granted options and deferred cash as a portion of the long-term incentive plan as an alternative to the use of RSUs due to the lack of share availability under the Company’s equity plans at the time. In 2012, the Compensation Committee adopted the 2012Long-Term Incentive Program, which included grants of options, performance-based RSUs and time-based RSUs. In April 2013, the Compensation Committee adopted the 2013 Long-Term Incentive Program (the “2013 LTI Program”), which, consistent with the 2012 Long-Term Incentive Program, had both performance-based and time-based components to both reward performance and help ensure retention. Each of the named executive officers (other than Messrs. Plumeri and Krauze) were eligible to participate in the 2013 LTI Program and, accordingly, Messrs. Casserley, Neborak, Hearn, Wright and Jones received grants of options, performance-based RSUs and time-based RSUs under the program. Consistent with the 2011 LTI Program and the 2012 LTI Program, all executive officers, other than Mr. Casserley, received their grants under the 2013 LTI Program in December. Mr. Casserley received his grant in May because he did not receive any equity grants upon his appointment to CEO and the Compensation Committee wanted to more quickly align his interests with shareholders. The performance-based equity included performance targets established in the second quarter of 2013. For the named executive officers, their individual 2013 awards were comprised of: The equity granted under the 2013 LTI Program was made under the 2012 Plan. The Committee selected the above mix of equity awards to appropriately balance the objectives of pay for performance, retention, and shareholder alignment. The options andtime-based RSUs will generally vest one third on each of the first, second and third anniversaries of the grant date, subject to the continued employment of the participant during the vesting period. The performance period for the performance-based RSUs is from January 1, 2013 through December 31, 2015. The performance-based RSUs that have been earned based on the performance of the 2013 LTI Program targets will generally vest 100% on March 5, 2016, subject to the continued employment of the participant during the vesting period. Cash dividends are payable on the time-based RSUs and are distributed upon vesting. The amount of performance-based RSUs granted under the 2013 LTI Program will be If the targets are not achieved at 100%, the earned amount of the performance-based RSU award would be reduced in accordance with Details of the 2013 equity award grants made to the named executive officers and the awards earned as a result of the Company’s financial performance are contained in the compensation tables “Grants of Plan-Based Awards” and “Outstanding Equity Awards at Fiscal Year End.” Details concerning the employment agreements of the named executive officers are set forth in the sections entitled “Compensation Tables — Dominic Casserley’s Employment Agreement” and “— Other Named Executive Officers’ Employment Agreements.” Long-term incentive awards that are intended to be “qualified performance-based compensation” under Section 162(m) were granted under the SMIP, under the 2012 Plan, or under a combination of the SMIP and the 2012 Plan. The Company does not believe that providing generous executive perquisites is either necessary to attract and retain executive talent or consistent with our pay-for-performance philosophy. Therefore, other than the benefits described in the “Summary Compensation” table, we do not provide perquisites such as personal use of aircraft, excise tax gross-ups, financial planning services, club memberships or vacation homes to our executive officers. The Company provides retirement, life insurance and medical benefits to our executive officers to be competitive with the marketplace in which our executive officers operate (which are largely the same as those provided to other employees in the workplace). Retirement income was provided to Mr. Plumeri and is provided to some other executive officers through our defined benefit retirement plans. The U.S. defined benefit plan was closed to new hires on January 1, 2007 and was frozen on May 15, 2009. Newly hired executive officers only participate in defined contribution plans. The Company also maintains the Willis Pension Scheme (UK), an approved U.K. defined benefit plan. The Willis Pension Scheme (UK) was closed to new members beginning on January 1, 2006. In 2006, it was replaced by a defined contribution plan for new employees. Details of the retirement benefits received by the named executive officers are contained in the compensation tables in the section entitled “Pension Benefits.” For U.S. employees, a 401(k) Plan is available for saving towards retirement pursuant to which the Company makes matching contributions. The matching contribution for 2013 was made on December 31, 2013 for eligible employees who were still employed by the Company on that date. The Company also maintains a deferred compensation plan for certain U.S. employees whose annual salary is in excess of $250,000 that allows them to plan their tax position through a deferral of part of their annual compensation. Employees are eligible to receive deferred Company compensation awards. Mr. Jones received a deferred compensation award from the Company in the amount of $350,000 in 2009, and therefore maintains a balance in this plan. Mr. Krauze received a deferred compensation award from the Company in the amount of $350,000 in 2009, and in previous years he elected to defer some of his salary and bonus into his account. Mr. Krauze maintained a balance in the plan until January 3, 2014, at which time he received a distribution of his entire account. The Company also made certain contributions to the deferred compensation plan on behalf of Mr. Plumeri. As provided in his 2010 employment agreement, the Company contributed $800,000 annually on behalf of Mr. Plumeri to provide him with retirement income. The final installment of the contribution for Mr. Plumeri under this plan was paid on April 15, 2013, reflecting a pro-rata payment for 2013 in the sum of $400,000. Upon his retirement on July 7, 2013, Mr. Plumeri received a distribution of his entire account. Under the Company’s clawback policy, the Board, or any of its committees, may to the extent permitted by applicable law, cancel or require reimbursement of any incentive payments or equity-based awards received by an executive officer after December 31, 2008, if and to the extent that (i) the incentive payment or equity award was based on the achievement of Company financial results which are subsequently restated, (ii) the Compensation Committee determines that the executive officer engaged in fraud, negligence or other misconduct that contributed to the need to restate the Company’s financial results and (iii) the incentive payments or equity-based award values made to the executive officer would have been lower if the Company’s results had been properly reported. In such cases, the Company will seek to recover from the executive officer the amount by which the actual incentive payment or equity award for the relevant period exceeded the amount that the executive officer would have received based on the restated results. The Company’s clawback policy is posted on its website under Investor Relations — Corporate Governance. The Company will comply, and has modified its award agreements to so indicate, with the provisions of the Dodd-Frank Act, and will adopt a revised mandatory clawback policy that will require the Company, in the event of a restatement, to recover from current and former executives any incentive-based compensation, for the three years preceding the restatement, that would not have been awarded under the restated financial statements. The Compensation Committee periodically reviews the Company’s clawback policy and, to ensure full compliance, will propose its final recommendations to the full Board once it has had the benefit of reviewing the SEC’s proposed and final rules for the legislation. We maintain share ownership guidelines under which executive officers and non-employee directors are expected to acquire a meaningful level of share ownership in the Company, so as to further align their interests with those of our shareholders. In February 2013, the Compensation Committee revised the executive officer share ownership guidelines to require them to own shares equivalent in value to a multiple of his or her base salary, as set forth below: Position Multiple Group CEO Executive Officers Leading Major Business Units and Group CFO Other Executive Officers Executives are encouraged to comply with their applicable guideline as soon as practical given their individual circumstances and no later than five years from (i) March 1, 2013 (the date of the implementation of the policy (i.e., March 1, 2018)) or (ii) the date of the executive’s hiring or promotion. The failure to comply with or make reasonable progress towards meeting the share ownership guidelines in a timely fashion will result in the executive being required to retain all net shares acquired by him or her under the exercise of share options or the vesting of RSUs (net of shares surrendered for the payment of the exercise price and any taxes). For purposes of meeting the executive officer share ownership guidelines, the related value, using the three-month average share price of the following shares, will be counted towards achieving and maintaining compliance: shares owned outright; shares or units held in Willis broad-based share purchase plans (i.e., the ESPP, UK Sharesave); unvested RSUs and RSUs subject to time-based vesting; and unvested earned performance-based RSUs. Options and unearned performance RSUs are not counted as shares owned for purposes of the guidelines. Executives are required to retain at least 50% of the net shares received under equity award programs until the ownership guidelines are met. As discussed under “– Non-Employee Director Compensation,” non-employee directors are required to hold shares equal to the lesser of 3.5 times the directors’ cash retainer of $100,000 (i.e., $350,000) or 10,000 shares. The Company prohibits directors and executive officers from pledging any Company shares, entering into margin accounts, short selling any Company shares, selling shares “against the box” and buying or selling puts or calls relating to Company shares. The Board of Directors’ has a policy governing the granting of options and other share-based awards under the Company’s Plans. It is the Company’s policy to neither backdate option grants or other share-based awards to take advantage of a lower share price nor to schedule grants of options or other share-based awards before or after specific events to take advantage of anticipated movements in the price of our shares. It is also the Company’s policy to grant options with an exercise price no less than the closing sales price as quoted on the NYSE on the date of grant, except in the case of any sharesave sub-plans adopted by the Company for non-U.S. employees, for which the exercise price of the option is set at a 5% or 10% discount off the closing sales price on the date before employees are invited to participate. In addition to approving Share-based awards to executive officers, the Compensation Committee is responsible for approving the overall allocation of Share-based awards to the employees of the Company and its subsidiaries and affiliates for the forthcoming year. Implementation of the granting of such awards within the agreed annual plan is delegated to the Share Award Committee consisting of the CEO, the Group Chief Financial Officer and the Group Human Resources Director. The members of the Share Award Committee work closely with the Chairman of the Compensation Committee to ensure that, in particular, the timing of grants is appropriate. Awards may be made at a time when the Company is in possession of material non-public information, so long as the timing of the award is not motivated by an intention to improperly use any such material non-public information for the benefit of the recipient. Under this policy, annual share-based awards for executive officers are authorized by the Compensation Committee and the grant date shall be the date of that meeting or a date specified by the Compensation Committee no later than 30 days following that meeting. Except as directed by the Compensation Committee, share-based awards granted in connection with a new hire, a promotion or the assignment of additional responsibilities to an existing employee or for retention purposes will be considered granted on March 5th, May 10th, August 10th, November 10th or December 5th (or if the applicable grant date is not a trading day, the next trading day) on the date most closely following the date on which such recipient’s employment or promotion or assignment of new responsibilities commenced and such retention award was approved. The Compensation Committee considers the anticipated tax treatment to the Company and to the executive officers in its review and establishment of compensation programs and payments. Section 162(m) imposes a limit on the amount the Company may deduct for U.S. tax purposes for compensation paid to our CEO and our three most highly compensated executive officers employed at the end of the year (other than the Chief Financial Officer). However, compensation which qualifies as “performance-based” under Section 162(m) is excluded from the limit if, among other requirements, the compensation is payable only upon the attainment ofpre-established, objective performance goals under a plan approved by the Company’s shareholders. The SMIP, which was approved by shareholders at the 2005 Annual General Meeting, is intended to comply with the provisions of, and to be administered in compliance with the requirements of, Section 162(m). The Company is also authorized to grant equity awards that are intended to qualify as “performance-based” compensation under the 2012 Plan. The SMIP provides for an annual incentive compensation award equal to 5% of the Company’s earnings for the fiscal year, which the Compensation Committee may reduce (but not increase) in its discretion. For this purpose, “earnings” means the Company’s operating income before taxes and extraordinary loss as reported in its audited consolidated financial statements, as adjusted to eliminate the effect of certain events specified in the SMIP. The Compensation Committee also takes other performance metrics and other factors into consideration in determining amounts payable under the SMIP (including, among other things, revenue and profit metrics), but the amounts payable under the SMIP may not exceed the amount described above. The Compensation Committee designates the executive officers who participate in the SMIP. The performance goals applicable to equity awards granted under the Company’s 2012 Plan that are intended to qualify as “performance-based” compensation may be based on a number of different performance criteria set out in the 2012 Plan that was last approved at the 2012 Annual General Meeting. In determining the payout amounts under AIP awards granted pursuant to the SMIP, the Compensation Committee may also consider attainment of performance goals that are based on any or a combination of the following performance criteria: (i) annual revenue, (ii) budget comparisons, (iii) controllable profits, (iv) EPS or Adjusted EPS, (v) expense management, (vi) improvements in capital structure, (vii) net income, (viii) net or gross sales, (ix) operating income (pre—or post-tax), (x) profit margins, (xi) operating or gross margin, (xii) profitability of an identifiable business unit or product, (xiii) return on investments, (xiv) return on sales, (xv) return on stockholders’ equity, (xvi) total return to stockholders, (xvii) assets under management, (xviii) investment management performance, (xix) mutual and other investment fund performance, (xx) cash flow, operating cash flow, or cash flow or operating cash flow per share (before or after dividends), (xxi) price of the shares or any other publicly traded securities of the Company, (xxii) reduction in costs, (xxiii) return on capital, including return on total capital or return on invested capital, (xxiv) improvement in or attainment of expense levels or working capital levels, and (xxv) performance of the Company relative to a peer group of companies and/or relevant indexes on any of the foregoing measures. Interpretations of and changes in applicable tax laws and regulations as well as other factors beyond the control of the Compensation Committee can affect deductibility of compensation and there can be no assurance that compensation paid to our executive officers who are covered by Section 162(m) will be treated as qualified performance-based compensation. Our general policy is to preserve the tax deductibility of compensation paid to the CEO and other named executive officers, including annual incentives and equity awards under the terms of the Company’s Plans (which include the Company’s equity plans or any sub-plans thereto, including the 2012 Plan, the Willis Group Holdings 2008 Share Purchase and Option Plan (the “2008 Plan”), the 2000 Hilb, Rogal and Hamilton Share Incentive Plan (the “2000 HRH Plan”) and the 2007 Hilb Rogal and Hobbs Share Incentive Plan (the “2007 HRH Plan”). The Compensation Committee reserves the right to use its judgment to authorize compensation payments that may not be deductible when the Compensation Committee believes that such payments are appropriate and in the best interests of the Company, taking into consideration changing business conditions and the performance of its employees. The Compensation Committee will continue to monitor developments and assess alternatives for preserving the deductibility of compensation payments and benefits to the extent reasonably practicable, consistent with its compensation policies and as determined to be in the best interests of the Company and its shareholders. It is also the Company’s general policy to deliver equity-based compensation to employees in as tax-efficient a manner as possible, taking into consideration the overall cost to the Company, for which the Company accounts in accordance with ASC 718. Historically, the Company has been selective in providing for potential payments relating to a change of control. The Compensation Committee may enter into such agreements when in its business judgment it believes that such payments are appropriate and in the best interests of the Company. No named executive officer is entitled to any automatic payments in connection with a change of control of the Company. However, certain equity awards held by our named executive officers vest in part or in full upon a change of control and the deferred cash awards held by our named executive officers may, in the discretion of the Compensation Committee, become payable upon a change of control. Treatment of equity awards in this manner (as opposed to cash payments that are not automatically accelerated) ensures that our executives are motivated primarily by the needs of the businesses for which they are responsible, rather than circumstances that are outside the ordinary course of business—i.e., circumstances that might lead to the termination of an executive’s employment or that might lead to a change in control of the Company. Generally, this is achieved by assuring our named executive officers that they will receive their equity awards if their employment is adversely affected in these circumstances, subject to certain conditions. We believe that these benefits help ensure that affected executives act in the best interests of our shareholders, even if such actions are otherwise contrary to their personal interests. This is critical because these are circumstances in which the actions of our named executive officers may have a material impact upon our shareholders. The Company provides severance protection to executive officers in limited circumstances primarily where the employee is terminated by the Company without cause or the employee resigns for good reason. The Compensation Committee believes that severance benefits are a necessary component of a competitive compensation program and, in certain cases, are in consideration for an executive’s agreement not to compete. Messrs. Casserley and Hearn are also entitled to enhanced severance benefits in the event their employment is terminated by the Company without cause or by the executive for good reason in connection with a change of control in order to avoid any associated distractions. The Compensation Committee believes that its use of severance benefits is not significantly different from the severance benefits typically in place at other companies. Dominic Casserley (Group CEO) Under his employment agreement dated as of October 16, 2012, in the event that Mr. Casserley’s employment is terminated by the Company without “cause,” Mr. Casserley resigns for “good reason” (as such terms are defined in his employment agreement) or Mr. Casserley is terminated as a result of the non-renewal of his employment agreement by the Company within the first four years of employment (a “Qualifying Termination”), Mr. Casserley would be entitled to receive severance payments and benefits, including partial service vesting credit (but not performance-vesting credit) for his annual equity-based long-term incentive awards. In the event of a Qualifying Termination within two years following a “change of control” (as such term is defined in his employment agreement), certain of Mr. Casserley’s severance payments would be paid in a lump sum (rather than installments) and Mr. Casserley would receive full service-vesting credit (but not performance-vesting credit) for each of the annual equity-based long-term incentive awards granted to him. Lastly, upon termination of employment (other than for “cause”) concurrent with or following the expiration of the full five-year term of the agreement, Mr. Casserley would be entitled to partial service-vesting credit (but not performance-vesting credit) for each of the annual equity-based long-term incentive awards granted to him and such termination will be treated as retirement for purposes of compensation previously paid or payable to him. Further information regarding Mr. Casserley’s employment agreement and details of the change of control and severance provisions are contained in the section entitled “Compensation Tables — Dominic Casserley’s Employment Agreement (Group CEO).” Other Named Executive Officers Stephen Hearn At the same time the Board appointed Mr. Casserley as the Company’s new CEO, it promoted Mr. Hearn to the new role of Deputy CEO. Mr. Hearn has been employed by the Company for almost four years and in January 2012 was promoted to Chairman and CEO of Willis Global, encompassing the Company’s global reinsurance, placement and specialty operations. The Board believes the combination of Mr. Casserley’s external perspective and broad global experience and Mr. Hearn’s internal perspective and deep industry experience is a powerful partnership to drive the Company’s strategic direction. On October 16, 2012, in connection with this promotion to Deputy CEO, Mr. Hearn entered into an amended employment agreement which became effective on January 1, 2013. Under the amended contract, in the event that Mr. Hearn’s employment is terminated without “cause” or Mr. Hearn resigns for “good reason” (as such terms are defined in his employment agreement), Mr. Hearn would be entitled to receive severance payments and benefits including partial acceleration of his long-term incentive awards. In the event that Mr. Hearn’s employment is terminated without “cause” or Mr. Hearn resigns for “good reason” within two years following a “change in control” (as such term is defined in his employment agreement), Mr. Hearn would be entitled to receive an enhanced severance payment. In April 2014, the Compensation Committee approved an amendment to the employment agreement entitling the officer to additional severance benefits upon termination detailed further in the section entitled “Compensation Tables — Other Named Executive Officers’ Employment Agreements”. Timothy Wright On July 19, 2012, Mr. Wright entered into an amendment to his employment agreement which provides that in the event Mr. Wright is terminated by the Company for any reason other than for “cause” (as such term is defined in his amendment), he will be entitled to receive a severance payment. In April 2014, the Compensation Committee approved an amendment to the employment agreement entitling the officer to additional severance benefits upon termination detailed further in the section entitled “Compensation Tables — Other Named Executive Officers’ Employment Agreements”. Todd Jones On August 22, 2013, Mr. Jones entered into an amended employment agreement with Willis North America, Inc. The amended employment agreement was effective as of July 1, 2013, when Mr. Jones was appointed CEO of Willis North America. Under the amended employment agreement, in the event that Mr. Jones’ employment is terminated without “Good Cause” or Mr. Jones resigns for “Good Reason” (as such terms are defined in his employment agreement), Mr. Jones would be entitled to receive a severance payment. In April 2014, the Compensation Committee approved an amendment to the employment agreement entitling the officer to additional severance benefits upon termination detailed further in the section entitled “Compensation Tables — Other Named Executive Officers’ Employment Agreements”. Michael Neborak In order to attract Mr. Neborak as the Group CFO in July 2010, the Company agreed in his employment agreement that all of his earned and unvested RSUs and options would immediately vest in the event of a Change of Control (as such term is defined in the applicable Plans and/or RSU agreement). In the event Mr. Neborak is involuntarily terminated without “cause” (as such term is defined in his employment agreement), he is eligible to receive severance payments. Mr. Neborak has also entered into a restrictive covenant agreement with the Company that provides, in part, that we may require that Mr. Neborak refrain from working for, engaging or generally having a financial interest in certain of our competitors after the termination of his employment, in exchange for providing severance payments and continued healthcare coverage to him during such non-compete period. Victor Krauze On July 1, 2013, Mr. Krauze entered into a letter agreement providing that he would cease serving as Chief Executive Officer of Willis North America, Inc., but continue to serve as Chairman of Willis North America, Inc. Upon ceasing to serve as CEO of Willis North America, Mr. Krauze became entitled to the severance payments and benefits under the letter agreement on terms consistent with those set forth in the October 16, 2012 amendment to his promotion letter. Further information regarding employment agreements and restrictive covenant agreements and details of the applicable termination provisions are contained in the sections entitled “Compensation Tables — Other Named Executive Officers’ Employment Agreements”, ”— Potential Payments to Named Executive Officers other than the CEO Upon Termination or Change of Control” and “—Payments to our Former Group CEO and to the Former CEO of WNA.” COMPENSATION COMMITTEE REPORT This report is submitted to the shareholders of Willis Group Holdings Public Limited Company by the Compensation Committee of the Board of Directors. The Compensation Committee consists solely of non-executive directors who are independent, as determined by the Board in accordance with the Company’s guidelines and NYSE listing standards. The Compensation Committee has reviewed, and discussed with management, the Compensation Discussion and Analysis contained in this Amendment to the Annual Report on Form 10-K, and based on this review and discussion, recommended to the Board that it be included in this Amendment to the Annual Report on Form 10-K. Submitted by the Compensation Committee of the Board of Directors Wendy E. Lane (Chairman), Anna Catalano and Jaymin Patel COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION None of our executive officers serves as a member of the Board of Directors or compensation committee of any entity that has one or more of its executive officers serving as a member of the Compensation Committee. In addition, none of our executive officers serves as a member of the compensation committee of any entity that has one or more of its executive officers serving as a member of our Board of Directors. COMPENSATION TABLES Summary Compensation Table The following table sets forth the total compensation earned for services rendered in 2013 by (1) the Company’s Group CEO, Mr. Casserley, (2) the Company’s former Group CEO, Mr. Plumeri (who resigned as CEO on January 6, 2013 and retired as Chairman of the Board on July 7, 2013), (3) the Group CFO, (4) each of the three most highly compensated executive officers of the Company and (5) Mr. Krauze, who would have been one of the three most highly compensated executive officers had he been an executive officer at the end of the year. Name and Principal Position Dominic Casserley Joseph Plumeri Michael Neborak Stephen Hearn(5) Timothy Wright(5) Todd Jones Victor Krauze Due to the nature of the named executive officers’ 2013 annual incentive compensation awards, they are reflected in the column “Non-Equity Incentive Plan Compensation.” In 2013, all named executive officers, other than Mr. Casserley, were paid 100% of their annual incentive compensation award in cash. TheNon-Equity Incentive Plan Compensation column reflects only that portion of the 2013 annual incentive compensation award paid in cash to Mr. Casserley. Because the RSUs and option awards granted as part of his 2013 annual incentive compensation award are granted in March 2014, these equity awards (approximately $1,061,000 in grant value) will be reflected in the Share Awards and Option Awards columns next year. The Change in Pension Value and Nonqualified Deferred Compensation Earnings column includes the aggregate earnings Mr. Plumeri receives under the non-qualified deferred compensation plan, which for the period from January 1, 2013 to July 7, 2013 was ($18,816), reflecting investment earnings of $(424) offset by Social Security and Medicare taxes totaling $19,240. Mr. Plumeri’s account was distributed to him upon his retirement on July 7, 2013 in a lump sum payment. The Change in Pension Value of $(50,646) reflects changes in valuation assumptions required by applicable accounting rules and actuarial standards and a one-year increase in the executive’s age. Grant of Plan-Based Awards The following table sets forth the grants of plan-based awards made to the named executive officers during 2013. Estimated Future Payouts Estimated Future Payouts Name Dominic Casserley Michael Neborak Stephen Hearn Timothy Wright Todd Jones Victor Krauze Joseph Plumeri The performance-based RSUs will be earned as to 50% if an organic commissions and fees growth target for January 1, 2013 through December 31, 2015 is met and 50% if an adjusted EBIT target for January 1, 2013 through December 31, 2015 is met. The earned performance-based RSUs will vest in full on March 5, 2016. If the targets are not achieved at 100%, the amount of the award will be reduced on a sliding scale basis. The target amount above reflects the face value of the award which will be paid out if both the organic commissions and fees growth target and adjusted EBIT target hit at 100%. The maximum amount above reflects highest possible payout of the award which will result if the organic commissions and fees growth target hits 125% and the adjusted EBIT target hits 105%. The maximum amount reflects a payout of 125% of the face value of the award. The threshold amounts reflect the minimum possible payout which will result if only one target is achieved and such target is achieved at the minimum payout level (e.g., if either 70% of the organic commissions and fees growth target or 95% of the adjusted EBIT target are met). The threshold amount reflects a payout of 80% on one half of the face value of the award. Outstanding Equity Awards at Fiscal Year End The following table sets forth the options and share-based awards held by the named executive officers as of December 31, 2013. Name Dominic Casserley Michael Neborak Stephen Hearn Timothy Wright Todd Jones Victor Krauze Joseph Plumeri Option Exercises and Shares Vested The following table sets forth the share options exercised and the RSU vestings during 2013 by the named executive officers. Name Dominic Casserley Michael Neborak Stephen Hearn Timothy Wright Todd Jones Victor Krauze Joseph Plumeri Pension Benefits for Executive Officers North America — The Company maintains a US retirement program, the Willis North America Inc. Pension Plan, a qualified defined benefits plan. This plan provides members with a pension on normal retirement age of 60 or 65 based on the length of service, pensionable remuneration and when they first joined the plan. Participants are 100% vested in the plan after completing five years of service. Employees also become 100% vested if they are participants in the plan and are employed by Company after reaching age 60. The plan was closed to new hires on January 1, 2007 and was frozen on May 15, 2009. If participants are vested and married, their surviving spouses may be entitled to survivor benefits from the plan, if the participants die before starting retirement benefits. The default death benefit is the survivor portion of a 50% Joint & Survivor annuity commencing at an early or normal retirement date. If participants are active with 10 or more years of service, the death benefit is 50% of the accrued benefit and commences immediately. If participants are age 55 with 10 or more years of service, they may elect an enhanced survivor benefit. Mr. Plumeri commenced his pension benefit effective August 1, 2013. At that date, Mr. Plumeri had approximately 13 years of vesting service and 8.58 years of benefit service (since the Plan was frozen in 2009 for the purpose of calculating the benefit). The accrued annual benefit for Mr. Plumeri, payable as a normal-form annuity beginning on August 1, 2013, is $56,184 (Mr. Plumeri is over 65). At this retirement age, the years of benefit service and annual maximum average salary for Mr. Plumeri are approximately 8.5 years and $202,000, respectively. As of December 31, 2013, Mr. Krauze had approximately 17 years of vesting service and 12.25 years of benefit service (since the Plan was frozen in 2009 for the purpose of calculating the benefit). The accrued annual benefit for Mr. Krauze, payable as anormal-form annuity beginning at age 65 is $62,043. At a retirement age of 65, the years of benefit service and annual maximum average salary for Mr. Krauze are approximately 23 years and $201,001, respectively. Mr. Krauze can retire early with an unreduced accrued benefit as of February 1, 2022, assuming he remains employed to that date. As of December 31, 2013, Mr. Jones had approximately 10 years of vesting service, and 5.667 years of benefit service (since the Plan was frozen in 2009 for the purpose of calculating the benefit). The accrued annual benefit for Mr. Jones, payable as anormal-form annuity beginning at age 65 is $28,419. At a retirement age of 65, the years of benefit service and annual maximum average salary for Mr. Jones are approximately 22 years and $196,000, respectively. Mr. Jones can retire early with an unreduced accrued benefit as of October 1, 2028, assuming he remains employed to that date. Also, Willis North America, Inc. has a 401(k) Plan covering its eligible employees and those of its subsidiaries and provides matching contributions. Shares are available as an investment option to participants in the Willis 401(k) Retirement Savings Plan. The matching contribution for 2013 was made on December 31, 2013 for eligible employees who were still employed by the Company on that date. United Kingdom — The Company’s current executive officers are eligible to participate in the Company’s defined contribution plan, the Willis Stakeholder Pension Scheme. Under the Willis Stakeholder Pension Scheme, pensionable remuneration is generally based on full basic salary less an offset in respect of the U.K. State Pension, currently £5,727, in the case of most members. In addition, pensionable remuneration for members who joined the Scheme after June 1, 1989, is subject to a cap, currently £141,600. Company contributions depend on the rate of the participants’ own contribution, with the maximum contribution payable by the Company being 10% of pensionable remuneration, except in the case of Mr. Hearn where contributions were made at the rate of 12% of basic salary in line with a contractual arrangement transferred from an acquired employer and exceed the standard rates payable to most other associates up until April 1, 2014. As of April 1, 2014, Mr. Hearn elected to receive his pension contributions as a cash pension allowance rather than as a contribution to the pension scheme, due to changes in tax regulation. The Willis Stakeholder Pension Scheme is formed of a series of individual investment policies established in the names of members and administered by a third party to which the Company contributes. Mr. Wright established a personal pension arrangement similar to the Willis UK defined contribution plan to which the Company contributes. The Company has no ongoing role in the governance or management of Mr. Wright’s plan and no residual liabilities in respect of it. From May 1, 2013, Mr. Wright has elected to receive his pension contributions as cash rather than as contribution to a pension scheme. Rest of World — Elsewhere, pension benefits for our employees are typically provided in the country of operation through defined contribution plans. The following table sets forth the retirement benefits that may be received by the named executive officers that participate in a defined benefit pension scheme: Name Plan Name J. Plumeri V. Krauze T. Jones Non-Qualified Deferred Compensation The following table sets forth the non-qualified deferred compensation received by Mr. Plumeri (the Company’s Former CEO) and Mr. Krauze as well as the amount to be received by Mr. Jones. None of the other named executive officers receives deferred compensation. Name J. Plumeri V. Krauze T. Jones Dominic Casserley’s Employment Agreement (Group CEO) In negotiating the agreement with Mr. Casserley, the Company considered, among other things, the Company’s peer group compensation, current market practice regarding CEO pay, ISS and shareholder concerns, pay-for-performance concerns, the Committee’s policy to limit the grants of guaranteed compensation, internal executive compensation practices and the opportunity to split the roles of Chairman of the Board and CEO. These considerations were balanced with the fact that the Company needed to provide competitive pay to attract a high caliber candidate. On October 16, 2012, Mr. Casserley executed an employment agreement with a subsidiary of the Company. The employment agreement has an initial term ending on December 31, 2015 and will automatically renew for up to two additional one-year renewal terms, unless either party provides notice of nonrenewal at least 90 days prior to the end of the initial term or first renewal term, as applicable. Upon a “change of control” (as such term is defined in his employment agreement) the term will automatically extend until and expire upon the second anniversary of the “change of control” or, if later, December 31, 2015. Mr. Casserley’s agreement provides for him to be paid, beginning as of his commencement of employment with the Company on January 7, 2013: (i) an annual base salary of $1,000,000, (ii) an annual incentive award with a target value of 225% of his base salary (i.e., $2,250,000), a maximum value of 400% of his base salary (i.e., $4,000,000), and a lesser value for below target performance as may be established by the Board or the Compensation Committee, such annual incentive compensation awards described in further detail below, (iii) an annual equity-based long-term incentive award of 525% of base salary (i.e., $5,250,000) at target, and upon such other terms and conditions as may be established by the Board or the Compensation Committee for officers generally, with the mix of equity to reflect that of the executive team in general, (iv) reimbursement of his and his family’s relocation costs to the New York metropolitan area from London, England and, following his termination of employment with the Company other than for “cause” (as such term is defined in his employment agreement), his and his family’s return to the London metropolitan area, (v) employee benefits as are provided generally to other similarly-situated senior management employees of the Company, the use of a car and driver at his principal office location and the use of private aircraft owned or leased by the Company for business travel in accordance with the Company’s policy, and (vi) an employment commencement transition award of $1,500,000 to be paid after the completion of one year of service (i.e., January 7, 2014), 50% of which is subject to repayment if Mr. Casserley resigns without “good reason” (as such term is defined in his employment agreement) prior to the completion of two years of service. With respect to Mr. Casserley’s annual incentive award, if Mr. Casserley is entitled to an annual incentive award exceeding $1,000,000 in respect of the Company’s 2013 fiscal year, then the first $1,000,000 will be paid in cash and any amounts exceeding $1,000,000 up to $2,500,000 will be paid in the form of equity-based awards, with one-third being immediately vested by reason of his completion of one year of service and the remainder subject to vesting on the second and third anniversaries of Mr. Casserley’s employment commencement date if Mr. Casserley is employed by the Company on each of the anniversary dates. One-half of such equity-based awards will be in the form of options to purchase ordinary shares of the Company, and one-half of such equity-based awards will be in the form of RSUs. In the event that Mr. Casserley’s employment is terminated by the Company without “cause,” Mr. Casserley resigns for “good reason” or Mr. Casserley is terminated as a result of the non-renewal of his employment agreement by the Company within the first four years of employment (a “Qualifying Termination”), Mr. Casserley would be entitled to the following benefits: (i) an amount equal to two times the sum of his annual base salary and target annual incentive compensation award, payable in installments over 24 months (the “Severance Payment”), (ii) a pro-rata portion of his annual incentive compensation award for the year in which the termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are payable generally, (iii) payment of the employment commencement transition award described above, to the extent unpaid, (iv) continued medical coverage at the active employee rate for Mr. Casserley, his spouse and then covered dependents for up to 18 months, (v) two years of service-vesting credit (but not performance-vesting credit) for one half of the annual equity-basedlong-term incentive awards granted to him during the first three years of service, (vi) one year of service-vesting credit (but notperformance-vesting credit) for the remainder of the annual equity-based long-term incentive awards granted to him, (vii) each vested stock option held by Mr. Casserley will remain exercisable for three years following the termination date or, if earlier, the normal expiration date of the stock option, and (viii) accrued benefits including any annual incentive compensation awards earned but unpaid for any completed fiscal year. For purposes of determining the service-vesting credit described above each annualequity-basedlong-term incentive award will be deemed to have been granted not later than April 30th of the year of grant and vest at a rate not greater less than 1/3rd per year on each of the first three anniversaries of the date of grant. In the event of a Qualifying Termination within two years following a “change of control,” Mr. Casserley would be entitled to the severance benefits described above except that the Severance Payment would be paid in a lump sum and Mr. Casserley would receive full service-vesting credit (but not performance-vesting credit) for each of the annual equity-based long-term incentive awards granted to him. Lastly, upon termination of employment (other than for “cause”) concurrent with or following the expiration of the full five year term of his employment agreement, Mr. Casserley would be entitled to the following benefits: (i) two years of service-vesting credit (but not performance-vesting credit) for each of the annual equity-based long-term incentive awards granted to him, (ii) each vested stock option held by Mr. Casserley will remain exercisable for three years following the termination date or, if earlier, the normal expiration date of the stock option and (iii) such termination will be treated as retirement for purposes of compensation previously paid or payable to him. As described above, for purposes of determining the service-vesting credit described above each annual equity-based long-term incentive award will be deemed to have been granted no later than April The agreement also contains non-competition, non-solicitation and confidentiality covenants. Other Named Executive Officers’ Employment Agreements Each of the other named executive officers’ have an employment agreement with a subsidiary of the Company. The material economic terms of such agreements are described below. Each of the agreements also contains non-competition, non-solicitation and confidentiality covenants. Further information regarding the change of control and severance provisions in our named executive officers’ other than Mr. Casserley employment and restrictive covenant agreements are contained in the section entitled “Compensation Tables—Potential Payments to Named Executive Officers other than the CEO Upon Termination or Change of Control” as well as “—Payments to our Former Group CEO and to the Former CEO of WNA.” Stephen Hearn In connection with his promotion to Deputy CEO, on October 16, 2012, Mr. Hearn entered into an amended employment agreement which became effective on January 1, 2013 and provides (i) an annual base salary of £530,000 (or $828,920); (ii) an annual incentive award with a target value of 200% of his base salary; and (iii) an annual long-term incentive award of 260% of his base salary at target. The employment agreement does not have a fixed term. Pursuant to Mr. Hearn’s amended employment agreement, if Mr. Hearn’s employment is terminated by the Company without Cause or by the executive for Good Reason, he would be entitled to: (i) an amount equal to 150% of the sum of his annual base salary and target annual incentive award, which amount will be offset against any pay provided during the 12-month notice period set forth in the employment agreement or any pay in lieu of notice and will be payable in a lump sum; (ii) a pro-rata portion of his annual incentive award for the year in which the termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are payable generally; (iii) any annual incentive compensation awards earned but unpaid for any prior fiscal year; and (iv) continuation for 18 months of group medical coverage at the same rate that is applicable to active senior executive officers. In the event that Mr. Hearn’s employment is terminated by the Company without Cause or by the executive for Good Reason within two years following a change of control, Mr. Hearn would be entitled to receive the severance benefits described above, except that the severance payment in prong (i) would be increased to 200% of the sum of his annual base salary and target annual incentive award. In April 2014, the Compensation Committee approved an amendment to Mr. Hearn’s employment agreement whereby he would receive full service-vesting credit (but not performance vesting credit) for all of his long-term incentive awards if he is terminated by the Company without Cause or by the officer for Good Reason within 24 months following a change of control. Timothy Wright Mr. Wright’s employment agreement, dated as of December 17, 2007 and as amended July 19, 2012, provides that Mr. Wright, who originally joined the Company as the Group Chief Operating Officer and currently serves as the CEO of Willis International, is entitled to an annual base salary of £405,000 (or $633,420) and an annual incentive award with a target value equal to 175% of his base salary. As a result of an increase of responsibilities related to his promotion to CEO of Willis International, Mr. Wright received an increase in 2012 in his annual base salary to £500,000 (or $782,000). The employment agreement does not have a fixed term. In the event Mr. Wright’s employment is terminated without “Cause” (as defined in his employment agreement), he will receive severance pay equal to the sum of his annual base salary and target annual incentive compensation award at the time he is served with notice of termination. In April 2014, the Compensation Committee approved an amendment to Mr. Wright’s employment agreement that would entitle him to receive, in addition to the severance payments described above, in the event of a termination by the Company without cause or by the officer for Good Reason (as defined in the amended employment agreement), the following: (i) apro-rata portion of his annual incentive compensation award for the year in which termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are paid generally; (ii) continued medical coverage at the active employment rate for up to 12 months or, in lieu of such coverage monthly payments equal to premium rates; (iii) one additional year of service-vesting credit (but not performance-vesting credit) for each of his long-term incentive awards; and (iv) each vested stock option held by him will remain exercisable until the earlier of one year following the termination date (or, if later, thepost-termination expiration date specified in the applicable stock option agreement) and the normal expiration date of the stock option. In the event he was terminated by the Company without Cause or by the officer for Good Reason within 24 months following a change of control, he would be entitled to receive (i) an amount equal to two times the sum of annual base salary and target annual incentive compensation award; (ii) a pro-rata portion of his target annual incentive compensation award for the year in which termination of employment occurs, payable at the same time that annual incentive compensation awards are paid generally; (iii) continued medical coverage at the active employment rate for up to 12 months or, in lieu of such coverage monthly payments equal to premium rates; (iv) full service-vesting credit (but not performance vesting credit) for all of his long-term incentive awards; and (v) each vested stock option held by him will remain exercisable until the earlier of one year following the termination date (or, if later, the post-termination expiration date specified in the applicable stock option agreement) and the normal expiration date of the stock option. Todd Jones Mr. Jones’ employment agreement, effective as of July 1, 2013, provides that Mr. Jones is entitled to an annual base salary of $600,000 and an annual incentive award with a target value equal to 125% of his annualized base salary. Prior to July 1, 2013 Mr. Jones’ annual base salary was $500,000. Effective April 2014, his base salary will increase to $700,000 and his annual incentive award will have a target value equal to 150% of his annualized base salary. The employment agreement does not have a fixed term. In the event Mr. Jones’ employment is terminated without “Good Cause” or Mr. Jones resigns for “Good Reason” (as such terms are defined in his employment agreement), he will receive severance payments equal to the sum of his annual base salary and target annual incentive compensation award at the time of his employment termination. In April 2014, the Compensation Committee approved an amendment to Mr. Jones’ employment agreement that would entitle him to receive, in addition to the severance payments described above, in the event of a termination by the Company without cause or by the officer for Good Reason (as defined in the amended employment agreement), the following: (i) apro-rata portion of his annual incentive compensation award for the year in which termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are paid generally; (ii) continued medical coverage at the active employment rate for up to 12 months or, in lieu of such coverage monthly payments equal to premium rates; (iii) one additional year of service-vesting credit (but not performance-vesting credit) for each of his long-term incentive awards; and (iv) each vested stock option held by him will remain exercisable until the earlier of one year following the termination date (or, if later, thepost-termination expiration date specified in the applicable stock option agreement) and the normal expiration date of the stock option. In the event he was terminated by the Company without Cause or by the officer for Good Reason within 24 months following a change of control, he would be entitled to receive (i) an amount equal to two times the sum of annual base salary and target annual incentive compensation award; (ii) a pro-rata portion of his target annual incentive compensation award for the year in which termination of employment occurs, payable at the same time that annual incentive compensation awards are paid generally; (iii) continued medical coverage at the active employment rate for up to 12 months or, in lieu of such coverage monthly payments equal to premium rates; (iv) full service-vesting credit (but not performance vesting credit) for all of his long-term incentive awards; and (v) each vested stock option held by him will remain exercisable until the earlier of one year following the termination date (or, if later, the post-termination expiration date specified in the applicable stock option agreement) and the normal expiration date of the stock option. Michael Neborak Mr. Neborak’s employment agreement effective as of July 6, 2010 provided for an annual base salary of $500,000, which the Committee increased to $600,000 based on the results of a market review, and an annual incentive award with a target value equal to 100% of his base salary. The employment agreement did not have a fixed term. In the event Mr. Neborak was terminated without “cause,” the employment agreement provided that he would receive severance pay equal to 12 months of base salary. The Company has also entered into a separate restrictive covenant agreement with Mr. Neborak effective as of August 2, 2010, which provided, in part, that we may require that Mr. Neborak refrain from undertaking any activity deemed to be in competition with the Company for a period of up to 12 months following termination of employment, in exchange for monthly payments equivalent to his base salary and the provision of continued medical coverage during such period. Victor Krauze Mr. Krauze’s employment agreement, effective as of December 3, 2010, and promotion letter, dated as of April 8, 2011, provided for a base salary of $625,000 which the Committee increased to $700,000 in response to market conditions. On July 1, 2013, Mr. Krauze entered into a letter agreement, which superseded his employment agreement and promotion letter and provided that he would cease serving as CEO of Willis North America, but continue to serve as Chairman of Willis North America, Inc. Under the letter agreement, Mr. Krauze would continue to receive the same annual base salary and was eligible to receive a discretionary bonus with respect to the Company’s 2013 fiscal year. Upon ceasing to serve as CEO of Willis North America, Inc., Mr. Krauze became entitled to the following severance payments and benefits under the letter agreement, on terms consistent with those set forth in the October 16, 2012 amendment to his promotion letter: (i) 12 months of salary continuation; (ii) reimbursement for COBRA coverage for 12 months; (iii) vesting of deferred compensation and deferred cash awards; and (iv) vesting of outstanding equity awards. Joseph Plumeri’s Employment Agreement (Former CEO) On January 6, 2013 Mr. Plumeri resigned as the Group CEO. Mr. Plumeri continued to serve as non-executive chairman and as an employee of Willis North America, Inc., a subsidiary of the Company until his retirement on July 7, 2013. Until his retirement, all of the terms of Mr. Plumeri’s existing employment agreement dated as of January 1, 2010, remained in effect, except as amended on October 16, 2012 to reflect his duties, responsibilities and reduced time commitment to the Company as non-executive chairman beginning on January 7, 2013. The rationale for the new arrangements with Mr. Plumeri was to facilitate a seamless transition with the Company’s new CEO, particularly in light of Mr. Plumeri’s long tenure, deep industry knowledge and relationships. The amendment to Mr. Plumeri’s employment agreement also satisfied the requirements for his retirement or earlier resignation to constitute a “mutual retirement” for purposes of Mr. Plumeri’s unvested RSU awards and, as a result, upon Mr. Plumeri’s retirement or his earlier resignation the service requirements for Mr. Plumeri’s RSU awards were be waived. Under his employment agreement, Mr. Plumeri’s annual base salary of $1,000,000, which was not increased since he joined Willis in October 2000, was maintained through his retirement date. Similarly, Mr. Plumeri was eligible to receive a pro-rata annual incentive compensation award for 2013, subject to the achievement of performance targets to be determined by the Compensation Committee. Mr. Plumeri’s employment agreement provided for threshold, target and maximum annual incentive payout percentages for 2013 of 250%, 375% and 500% of base salary. Mr. Plumeri also continued to receive a pro rata portion of his annual deferred compensation credit of $800,000, the last installment of which was contributed on April 15, 2013. Mr. Plumeri was not entitled to receive a long-term incentive award during 2013. Potential Payments to our Group CEO Upon Termination or Change of Control The following table shows the estimated payments and benefits that our Group CEO would have received if his employment had terminated or a Change of Control (defined below) occurred on December 31, 2013. Dominic Casserley Termination by the Company without Cause or by the officer with Good Reason(1)(6) Termination on Change of Control(2)(6) Termination for Other Reasons(4) Change of Control(5)(6) Further, Mr. Casserley’s employment agreement and equity award agreements provide that in the event of a Qualifying Termination, Mr. Casserley is entitled to (i) two years of additional service-vesting credit (but not performance-vesting credit) for one half of the annual equity-based long-term incentive awards granted to him during the first three years of service, (ii) one year of service-vesting credit (but not performance-vesting credit) for the remainder of the annual equity-based long-term incentive awards granted to him. For purposes of determining the service-vesting credit described above each annualequity-based long-term incentive award will be deemed to have been granted not later than April 30th of the year of grant and vest at a rate not greater less than 1/3rd per year on each of the first three anniversaries of the date of grant. Mr. Casserley’s employment agreement provides that in the event that his employment is terminated due to death or disability, Mr. Casserley would be entitled to (i) payment of the employment commencement transition award of $1,500,000, to the extent unpaid, (ii) a pro-rata portion of his annual incentive award for For purposes of this section it has been assumed that the Company has exercised its discretion to fully vest equity awards (at the target level of achievement) held by Mr. Casserley. The table above shows the intrinsic value of all unvested option and RSU awards held by Mr. Casserley as of December 31, 2013. The term “Good Reason” means (i) any change in title such that Mr. Casserley is not the Chief Executive Officer or the most senior executive officer of the Company, or any requirement that Mr. Casserley report to any member of the Board on a regular basis who has material operational responsibilities, (ii) the failure to pay, or to make a timely grant of, any material amount of compensation or any material benefit under Mr. Casserley’s employment agreement, (iii) any material adverse change in duties, responsibilities or authority, or the assignment to Mr. Casserley of any duties materially inconsistent with his position as the most senior executive officer of the Company, or the failure of Mr. Casserley to report directly to the Board, (iv) the failure to nominate Mr. Casserley as a candidate for election or re-election to the Board, (v) any relocation of Mr. Casserley’s principal office to a location other than New York, New York, or London, England, metropolitan areas, or (vi) any material breach of this Mr. Casserley’s employment agreement. The term “Change in Control” means (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of equity interests representing more than 30% of the aggregate ordinary voting power represented by the issued and outstanding equity interests of the Company; (ii) occupation of a majority of the seats (other than vacant seats) on the Board by persons who were neither (1) nominated by the board of directors of the Company nor (2) appointed by directors so nominated; provided a person shall not be deemed so nominated or appointed if such nomination or appointment is the result of a proxy contest or a threatened proxy contest; (iii) a merger, consolidation or other corporate transaction such that the shareholders of the Company immediately prior to such transaction do not own more than 50% of the aggregate ordinary voting power of the surviving entity (or its parent) immediately after such transaction in approximately the same proportion to each other as immediately prior to the transaction; or (iv) the sale of all or substantially all of the assets of the Company. Potential Payments to Named Executive Officers other than the CEO Upon Termination or Change of Control The following table sets forth the estimated payments and benefits our named executive officers other than the CEO would have received assuming the named executive officer was terminated or a change of control occurred on December 31, 2013. Name Michael Neborak Termination by the Company without Cause or by the officer with Good Reason(2)(5) Termination on Change of Control(3) Termination for Other Reasons(4)(5) Change of Control(6) Stephen Hearn(7) Termination by the Company without Cause or by the officer with Good Reason(2)(8) Termination on Change of Control(3)(8) Termination for Other Reasons(4) Change of Control(6) Timothy Wright(7) Termination by the Company without Cause or by the officer with Good Reason(2)(8) Termination on Change of Control(3)(8) Termination for Other Reasons(4) Change of Control(6) Todd Jones Termination by the Company without Cause or by the officer with Good Reason(2)(8) Termination on Change of Control(3)(8) Termination for Other Reasons(4) Change of Control(6) The Board may, in its discretion, accelerate each of the unvested option, RSU and deferred cash awards held by Messrs. Neborak, Hearn, Wright and Jones upon a termination of employment by the Company without cause. For purposes of this section, it has been assumed that the Company has exercised its discretion to fully vest the option, RSU and deferred cash awards (at the target level of achievement) held by Messrs. Neborak, Hearn, Wright and Jones. The table above shows the intrinsic value of all unvested option, RSU and deferred cash awards held by the executives as of December 31, 2013. Mr. Hearn’s employment agreement provides that in the event Mr. Hearn’s employment is terminated by the Company without Cause or Mr. Hearn resigns for Good Reason, he would be entitled to: (i) an amount equal to 150% of the sum of his annual base salary and target annual incentive award, which amount will be offset against any pay provided during the 12-month notice period set forth in the employment agreement or any pay in lieu of notice and will be payable in a lump sum, (ii) a pro-rata portion of his annual incentive award for the year in which the termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are payable generally, (iii) any annual incentive compensation awards earned but unpaid for any prior fiscal year, and (iv) continuation of group medical coverage at the same rate that is applicable to active senior executive officers for up to 18 months. Mr. Wright’s employment agreement provides that in the event he is terminated by the Company for any reason other than for Cause (as defined in footnote 1 above with respect to Mr. Hearn), he will be entitled to receive an amount equal to the sum of his annual base salary and target annual incentive compensation award at the time he is served with notice of termination, which amount will be offset against any pay provided during the six-month notice period set forth in the employment agreement or any pay in lieu of notice and will be payable in a lump sum. Mr. Jones’ employment agreement provides that in the event that his employment is terminated without Good Cause or Mr. Jones resigns for Good Reason, he will be entitled to receive an amount equal to the sum of his annual base salary and target annual incentive compensation award at the time of his employment termination. “Cause is defined as (i) gross and or chronic neglect of duties, (ii) conviction of a felony or misdemeanor involving moral turpitude, (iii) dishonesty, embezzlement, fraud or other material willful misconduct in connection with employment, (iv) the issuance of any final order for removal as an associate of the Company by any state or federal regulatory agency, (v) violation of the restrictive covenant provisions in an employment agreement or other agreement with the Company, (vi) material breach of any material duty owed to the Company, including, without limitation the duty of loyalty, (vii) material breach of any other material obligations under an employment or other agreement with the Company, or (viii) material breach of the Company’s code of ethics. “Good Reason” is defined as (i) a material reduction in status, title, position, authority or responsibilities, (ii) a reduction in base salary, (iii) a material breach of any material provision of Mr. Jones’ employment agreement or (iv) a requirement that Mr. Jones relocate his office by more than 35 miles. The amounts payable to Messrs. Neborak Hearn, Wright and Jones in respect of termination of employment on December 31, 2013 in connection with a Change of Control would be calculated on the same basis described inTermination by the Company without Cause above. Mr. Neborak’s employment agreement provided that in the event of Change of Control all of his RSUs and options would immediately vest in full. All other RSU, option and deferred cash awards may vest upon the occurrence of a Change of Control, in the sole discretion of the Board. For purposes of the option, RSU and deferred cash awards, “Change of Control” is defined as (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) of the ordinary shares of the Company representing more than 50% of the aggregate voting power represented by the issued and outstanding ordinary shares of the Company; or (ii) occupation of a majority of the seats (other than vacant seats) on the Board of the Company by persons who were neither (a) nominated by the Company’s Board nor (b) appointed by directors so nominated. For purposes of Mr. Hearn’s amended employment agreement “Change of Control” is defined as: (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) of equity interests representing more than thirty (30%) of the aggregate voting power represented by the issued and outstanding equity interests of the Company; occupation of a majority of the seats (other than vacant seats) on the Board of the Company by persons who were neither (a) nominated by the Company’s Board nor (b) appointed by directors so nominated; (iii) a merger, consolidation or other corporate transaction of the Company such that shareholders of the Company immediately prior to such transaction do not own more than fifty percent (50%) of the aggregate ordinary voting power of the surviving entity (or its parent) immediately after such transaction in approximately the same proportion to each other as immediately prior to the transaction; or (iv) the sale of all or substantially all of the assets of the Company. For purposes of this section it has been assumed that the Company has exercised its discretion to fully vest the option, RSU and deferred cash awards (at the target level of achievement) held by Mr. Neborak, Hearn, Wright and Jones to the extent that such awards do not automatically vest in full. The table above shows the intrinsic value of all unvested option, RSU and deferred cash awards held by the executives as of December 31, 2013. The unvested option, RSU and deferred cash awards held by Messrs. Neborak, Hearn, Wright and Jones each vest in full upon a termination of employment due to death or permanent disability; provided, that, For purposes of this section it has been assumed that the Company has exercised its discretion to fully vest the option, RSU and deferred cash awards (at the target level of achievement) held by Messrs. Neborak, Hearn, Wright and Jones to the extent that such awards do not automatically vest in full. The table above shows the intrinsic value of all unvested option, RSU and deferred cash awards held by the executives as of December 31, 2013. The table above shows the payments Mr. Neborak would have received had a termination of employment taken place on December 31, 2013, assuming that payments and benefits were provided for the full 12 month non-compete period. For the purpose of this section, it has been assumed that the Company has exercised its discretion to fully vest the option, RSU and deferred cash awards (at the target level of achievement) held by Messrs. Neborak, Hearn, Wright and Jones to the extent that such awards do not automatically vest in full. The table above shows the intrinsic value of all unvested option, RSU and deferred cash awards held by the executives as of December 31, 2013. In April 2014, the Compensation Committee approved an amendment to Mr. Wright’s and Mr. Jones’ employment agreements that would entitle each of them to receive, in addition to the severance payments described above, in the event of a termination by the Company without cause or by the officer for Good Reason (as defined in the amended employment agreement), the following: (i) a pro-rata portion of the officer’s annual incentive compensation award for the year in which termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are paid generally; (ii) continued medical coverage at the active employment rate for up to 12 months or, in lieu of such coverage monthly payments equal to premium rates; (iii) one additional year of service-vesting credit (but not performance-vesting credit) for each of his long-term incentive awards; and (iv) each vested stock option held by him will remain exercisable until the earlier of one year following the termination date (or, if later, the post-termination expiration date specified in the applicable stock option agreement) and the normal expiration date of the stock option. In the event he was terminated by the Company without Cause or by the officer for Good Reason within 24 months following a change of control, he would be entitled to receive (i) an amount equal to two times the sum of annual base salary and target annual incentive compensation award; (ii) a pro-rata portion of his target annual incentive compensation award for the year in which termination of employment occurs, payable at the same time that annual incentive compensation awards are paid generally; (iii) continued medical coverage at the active employment rate for up to 12 months or, in lieu of such coverage monthly payments equal to premium rates; (iv) full service-vesting credit (but not performance vesting credit) for all of his long-term incentive awards; and (v) each vested stock option held by him will remain exercisable until the earlier of one year following the termination date (or, if later, the post-termination expiration date specified in the applicable stock option agreement) and the normal expiration date of the stock option. Payments to our Former Group CEO and to the Former CEO of WNA Mr. Plumeri resigned as Group CEO on January 6, 2013 and retired on July 7, 2013. In accordance with the terms of his employment agreement, upon Mr. Plumeri’s retirement, he became entitled to receive a pro-rata portion of his annual incentive award for the 2013 fiscal year, based on actual performance for such year. In 2014 a pro-rata award of $1,678,125 was paid to Mr .Plumeri. In addition, in accordance with the terms of his employment agreement, the service requirements for Mr. Plumeri’s RSU awards were waived upon Mr. Plumeri’s retirement and he became vested in $7,027,706 of RSUs, based on closing price for our ordinary shares on July 7, 2013. Mr. Krauze ceased to serve as CEO of WNA on July 1, 2013. Pursuant to his July 1, 2013 letter agreement with WNA, which contains severance terms that are consistent with the October 16, 2012 amendment to his promotion letter, Mr. Krauze become entitled to receive: (i) 12 months of salary continuation, which is equivalent to $700,000, (ii) reimbursement for COBRA coverage for 12 months, with an estimated value of $12,653, and (iii) full vesting of his outstanding equity and deferred cash awards. The total value of such accelerated vesting is $1,361,994 based on the closing price for our ordinary shares on July 1, 2013. Compensation Risk Analysis In October 2013, at the request of the Compensation Committee, Towers Watson (its current independent Compensation Consultant) worked with management to conduct a full risk assessment of the Company’s compensation programs. This assessment included an inventory of incentive compensation plans then in place at the Company, a review of the design and features of the Company’s material compensation programs with key members of management responsible for such programs and an assessment of program design and features relative to compensation risk factors. With assistance from the Company’s management, Towers Watson, also reviewed the Company’s risk profile and related risk management processes and the findings of the compensation risk assessment to determine if any material risks were deemed to be likely to arise from the Company’s compensation policies and programs and to determine whether these risks would be reasonably likely to have a material adverse effect on its business. The determination, which was reviewed and affirmed by management and the Compensation Committee, was that the Company’s pay plans and policies were not reasonably likely to have a material adverse effect on the Company. Non-Employee Director Compensation All non-employee directors (i.e., all directors other than Messrs. Casserley and Plumeri), receive an annual cash retainer fee of $100,000. In addition, (i) the Chairman of the Compensation Committee, the Chairman of the Governance Committee and the Chairman of the Risk Committee each receives an annual cash fee of $20,000; (ii) the Chairman of the Audit Committee receives an annual cash fee of $30,000; and (iii) the other members of the Audit Committee receive an annual cash fee of $10,000. The Presiding Independent Director, if any, receives an annual cash fee of $35,000. The non-executive Chairman of the Board receives an annual fee of $150,000 payable 50% in equity and 50% in cash, provided that the non-executive Chairman may elect to receive the fee 100% in equity. In 2013, the fee paid to Mr. McCann was made 50% in equity and 50% in cash. Accordingly, he received 1,781 RSUs on August 12, 2013 that will vest in full on August 12, 2014.information required by this Item with respectfollowing is an overview of the Compensation Committee’s philosophy and objectives in designing compensation programs for the Group CEO, the Group CFO, and the Company’s three other most highly compensated executive officers, collectively our “named executive officers.” For the fiscal year ended December 31, 2013, our named executive officers were:1.0 Executive Summary of our Named Executive Officer 2013 Compensation 1.1 Background • Confirming our philosophy that incentive pay should be performance driven and not guaranteed. Accordingly, unless there are compelling circumstances (i.e., on a limited basis, in connection with new hires), the Compensation Committee will not approve guaranteed incentive awards. 1.2 The Company’s 2013 Financial Performance and Named Executive Officer Compensation 2.0 The Company’s Named Executive Officer Compensation Program 2.1 Compensation Committee Consultant 2.2 Peer Group and Market Data AON plc Allied World Assurance Company Holdings Towers Watson & Co. Arthur J. Gallagher & Co. Arch Capital Group Limited Brown & Brown Inc. Axis Capital Holdings Limited Jardine Lloyd Thompson Group plc CNA Financial Corporation Marsh & McLennan Companies, Inc. Markel Corporation PartnerRe Ltd. XL Group plc 2.3 Result of 2013 Say-on-Pay Vote 2.4 Summary Chart of the Components of Our Named Executive Officers’ Compensation Component Objective Key Features/Detail of Our 2013 Program
metrics(1)(2):Component Objective Key Features/Detail of Our 2013 Program (1) The Board and Compensation Committee believe these metrics are key drivers of cash flow and shareholder value creation. (2) These financial metrics were the same for all employees in the Company and its subsidiaries, who received annual incentive compensation awards or performance-based equity. (3) From time to time, the Company may pay a portion of annual incentive compensation awards in the form of RSUs, provided there is sufficient available share capacity. (4) Accordingly, unless there are material and compelling circumstances (i.e., on a limited basis, in connection with new hires), the Compensation Committee will not approve guaranteed incentive awards. 2.6 Summary of CEO Compensation 3.0 Named Executive Officer 2013 Annual Compensation Organic Commissions and Fees
Growth Target AIP Payout as % of Target >7.3% Up to 150% (Up to 180% for the CEO)(1) 7.3% 115% 5.8% 100% 4.3% 85% 3.3% 70% <3.3% 0% (1) Pursuant to Mr. Casserley’s employment agreement, he had a maximum payout of 400% of his base salary. Adjusted EBITDA Target AIP Payout as % of Target >$953 million Up to 150% (Up to 180% for the CEO)(1) $953 million 115% $902 million 100% $869 million 85% $852 million 70% <$852 million 0% (1) Pursuant to Mr. Casserley’s employment agreement, he had a maximum payout of 400% of his base salary. • Achieved for Global business unit, organic commissions and fees growth of 6.6% (adjusted to exclude the results of the Willis Capital Markets & Advisory business) and adjusted EBITDA2 of approximately $320 million.3 2 The non-GAAP measure of adjusted EBITDA, for the purposes of evaluating business unit financial performance for compensation purposes, is calculated by excluding interest expense, tax, depreciation, amortization of intangibles, the impact of foreign exchange and certain other items for which segment management are not held accountable, from segment net income, the most directly comparable GAAP measure. 3 The Compensation Committee set the target performance for the named executive officers at levels they believe are challenging but achievable, taking into consideration the current economic and business environment. Payout % Relating to
Company Portion of AIP 2013
Salary
($/£) Bonus
Target
as % of
Salary
($/£) Organic
Commissions
and Fees
Target Adjusted
EBITDA
Target Payout %
Relating to
Individual/
Bus. Unit
Portion of
AIP Total
Payout
as a
% of
Bonus
Target Bonus
Payout
($/£) $ 1,000,000 225% 90.8% 88.2% 100.0% 91.6% $ 2,061,000 $ 600,000 100% 90.8% 88.2% 90.8% 90.0% $ 540,000 £ 530,000 200% 90.8% 88.2% 95.8% 92.0% £ 975,200 £ 500,000 175% 90.8% 88.2% 97.5% 92.7% £ 810,950 $ 600,000 125% 90.8% 88.2% 102.0% 94.5% $ 708,600 $ 700,000 175% 90.8% 88.2% 90.8% 90.0% $ 826,875 $ 1,000,000 375% 90.8% 88.2% N/A 89.5% $ 1,678,125 (1) The figures for Messrs. Hearn and Wright have been converted into dollars at the average exchange rate for 2013 (£1:$1.564). (2) Pursuant to Mr. Casserley’s employment agreement, he received the first $1,000,000 of his annual incentive compensation award in cash and the balance of $1,061,000 in equity of which 50% was issued in time-based RSUs and 50% in time-based options. One-third of the equity grant vested immediately on the grant date (March 31, 2014), and one-third will vest on each of the second and third anniversary of his employment commencement date (January 7, 2015 and January 7, 2016). (3) In 2013, as a result of Mr. Jones’s promotion to CEO of WNA, his AIP target was 125% of his base salary. Effective 2014, the Compensation Committee approved an increase in his AIP target to 150% of his base salary. (4) Mr. Krauze’s AIP target was pro-rated to 75% of the original 175% target to reflect the change in his job responsibilities. (5) Pursuant to Mr. Plumeri’s 2010 employment agreement he had a threshold, target and maximum annual incentive payout percentages for 2013 under his employment agreement of 250%, 375% and 500% of base salary. The above amount was prorated to reflect his January 7, 2013 separation date. Options Performance-Based
RSUs Time-Based RSUs 25% 50% 25% providedearned 50% based on the achievement of an organic commissions and fees growth target and 50% based on the achievement of an adjusted EBIT target. The Board replaced previously used metrics, adjusted EPS and adjusted operating margin, with organic commissions and fees growth and adjusted EBIT (modified by a cost of capital charge for acquisitions or a cost of capital credit for dispositions made during the performance period). The decision to select organic commissions and fees growth as a metric for both the AIP and the 2013 LTI Program was done to emphasize the strategic importance of accelerating the Company’s top line revenue growth. Adjusted EBIT (modified as described above) is an appropriate long-term metric because it provides management accountability for profit performance including investment decisions (mergers and acquisitions and capital expenditures) over time. In 2014, the Compensation Committee approved an adjusted in the adjusted EBIT performance target to conform to a reclassification of foreign exchange in the Company’s balance sheet. This adjustment does not change the required underlying performance percentages but rather conforms the target to ongoing financial presentation methodology.Instruction G(3)the following sliding scales:Performance Against
Organic Commissions and Fees Growth
Target % of Earned Performance
Based-RSUs125% 125% 110% 110% 100% 100% 85% 90% 70% 80% <70% 0% Performance Against
Adjusted EBIT Target % of Earned Performance
Based-RSUs104% 125% 102% 110% 100% 100% 98% 90% 94% 80% <94% 0% 3.1 Perquisites and Other Benefits for Executive Officers 4.0 Clawback Policy 5.0 Executive Officer and Non-Employee Director Share Ownership Guidelines 6.0x base salary 3.0x base salary 2.0x base salary 6.0 Anti-Hedging Policies 7.0 Share Award Policy 8.0 Tax and Accounting Implications 9.0 Payments on Change of Control and Termination Year Salary
($) Bonus
($)(1) Share
Awards
($)(2) Option
Awards
($)(2) Non-Equity
Incentive Plan
Compensation(1) Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings ($)(3) All Other
Compensation
($)(4) Total ($)
Group CEO(5) 2013 985,819 1,500,000 3,937,490 1,362,875 1,000,000 — 145,211 8,931,395
Former Group CEO 2013 518,939 — — — 1,678,125 (69,462 ) 435,065 2,632,129 2012 1,000,000 — 6,911,420 — 905,963 (17,281 ) 1,016,660 9,834,043 2011 1,000,000 — 8,539,014 — 729,166 10,164 1,197,933 11,476,277
Group CFO 2013 600,000 140,625 749,939 249,998 540,000 — 7,650 2,288,212 2012 575,000 528,000 749,955 249,993 — — 5,000 2,107,948 2011 500,000 450,000 — 182,891 281,250 — 4,167 1,418,308
Deputy CEO; CEO & Chairman Willis Global 2013 828,920 140,625 1,649,915 549,993 1,525,213 — 99,470 4,794,136 2012 792,500 1,291,775 1,879,742 549,994 — — 95,100 4,609,111
CEO, Willis International 2013 782,000 187,500 899,918 299,995 1,268,326 — 37,125 3,474,864 2012 792,500 1,228,375 1,124,965 374,993 — — 33,085 3,553,918
CEO, Willis North America 2013 550,000 56,250 562,466 187,494 708,600 41,164 36,289 2,142,263
Chairman, Willis North America 2013 700,000 375,000 — — 826,875 361,176 712,582 2,975,633 2012 681,250 910,000 899,979 299,993 — 257,453 23,230 3,071,905 2011 625,000 750,000 1,037,750 243,851 375,000 134,232 9,971 3,175,804 (1) For all named executive officers other than Messrs. Casserley and Plumeri, the Bonus column reflects the vested portion oftime-based deferred cash grants made to the officers in 2011 pursuant to the 2011 LTI Program. Mr. Krauze’s deferred cash award vested in its entirety. For Mr. Casserley, the Bonus column reflects the $1,500,000 sign-on bonus he received in January 2014. (2) For awards subject to performance conditions, the amount included in the table is the full fair value at the grant date based on the probable outcome with respect to the satisfaction of the performance condition consistent with the recognition criteria in FASB ASC Topic 718 (excluding the effect of estimated forfeiture). For more information regarding the equity awards, see the “Grants of Plan-Based Awards” table and the “Outstanding Equity Awards at Fiscal Year End” table. (3) The US Pension share was closed to new hires on January 1, 2007 and frozen on May 15, 2009. The Willis Pension Scheme (UK) was closed to new members beginning on January 1, 2006. (4) For 2013, the All Other Compensation column for the named executive officers consisted of: a. For Mr. Casserley, (i) relocation expenses in the amount of $116,311, (ii) commuting expenses and (iii) the Company’s funded contribution to the Willis Stakeholder Pension Scheme. b. For Mr. Plumeri, (i) a deferred compensation credit of $400,000 pursuant to the terms of his previous employment agreement, which he received for each year he continues to be with the Company and which was paid into a non-qualified deferred compensation plan on his behalf, after the payment of Social Security and Medicare taxes and (ii) dividend equivalents on vested RSUs in the amount of $35,065. Mr. Plumeri retired as CEO on January 6, 2013 and retired as Chairman of the Board on July 7, 2013 and, as a result, will no longer be receiving these benefits. c. For Mr. Neborak, the Company’s contribution to his 401(k) Plan. d. For Mr. Hearn, the Company’s contribution to the Willis Stakeholder Pension Scheme in the amount of $99,470. e. For Mr. Wright, (i) contributions to a personal pension arrangement set up by Mr. Wright for his own personal benefit through April 2013 and, from May 2013 onward, a cash supplement paid in lieu of the Company pension contributions in the aggregate amount of $24,006 and (ii) a car allowance and parking spot. The Company has no ongoing role in the governance or management of the personal pension arrangement and no residual liabilities in respect of it. f. For Mr. Jones, (i) the Company’s contribution to his 401(k) Plan, (ii) commuting expenses, (iii) a parking spot and (iv) an apartment. g. For Mr. Krauze, (i) a $700,000 severance payment that will be made to him over the course of 2014, (ii) the Company’s contribution to his 401(k) Plan, (iii) medical benefits and (iv) an apartment. (5) Messrs. Casserley, Hearn and Wright receive their salaries in pounds sterling and the above figures have been converted into dollars at the average exchange rate for 2013 (£1:$1.564). The Compensation Committee also authorizes Messrs. Hearn and Wright bonuses in pounds sterling and, as a result, those have been converted at the same exchange rate.
Under Non-Equity
Incentive Plan Awards
Under Equity Incentive
Plan Awards All
Other
Stock
Awards:
Number
of
Shares
of
Stocks
or Units
(#) All Other
Awards
Number of
Securities
Underlying
Options
(#) Exercise
or Base
Price of
Option
Awards
($/Share) Grant
Date
Fair
Value of
Stock
and
Option
Awards
($) Grant
Date Approval
Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) 5/10/13 (1) 4/23/13 — — — 25,920 64,799 80,999 — — — 2,625,007 5/10/13 (2) 4/23/13 — — — — — — 32,399 — — 1,312,483 5/10/13 (3) 4/23/13 — — — — — — — 143,915 40.71 1,362,875 12/16/13 (1) 4/23/13 — — — 4,512 11,281 14,101 — — — 499,974 12/16/13 (2) 4/23/13 — — — — — — 5,640 — — 249,965 12/16/13 (3) 4/23/13 — — — — — — — 28,506 44.32 249,998 12/16/13 (1) 4/23/13 — — — 9,928 24,819 31,024 — — — 1,099,978 12/16/13 (2) 4/23/13 — — — — — — 12,409 — — 549,967 12/16/13 (3) 4/23/13 — — — — — — — 62,713 44.32 549,993 12/16/13 (1) 4/23/13 — — — 5,415 13,537 16,921 — — — 599,960 12/16/13 (2) 4/23/13 — — — — — — 6,768 — — 299,958 12/16/13 (3) 4/23/13 — — — — — — — 34,207 44.32 299,995 12/16/13 (1) 4/23/13 — — — 3,384 8,461 10,576 — — — 374,992 12/16/13 (2) 4/23/13 — — — — — — 4,230 — — 187,474 12/16/13 (3) 4/23/13 — — — — — — — 21,379 44.32 187,494 — — — — — — — — — — — — — — — — — — — — — — — — (1) Pursuant to 2013 LTI Program, Messrs. Casserley, Neborak, Hearn, Wright and Jones received time-based RSUs, performance-based RSUs and options. Mr. Casserley received his grant on May 10, 2013 and the remaining named executive officers received their grant on December 16, 2013. (2) The time-based RSUs granted pursuant to the 2013 LTI Program will vest one-third on each of the first, second and third anniversaries of the grant date. Dividend equivalents will be paid when the RSUs vest equal to the dividend rate applicable to all record holders on record dates falling between the time of grant and the time of vest. (3) The options granted pursuant to the 2013 LTI Program will vest 33%, 33% and 34% on the first, second and third anniversaries of the grant date. Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) Option
Exercise
Price Option
Expiration
Date Number of
Shares or
Units of
Stock
That Have
Not
Vested (#) Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($)(1) Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested(#) Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(1) — 143,915 (2) — 40.71 5/10/2021 — — — — — — — — — 32,399 (3) 1,451,799 — — — — — — — — — 64,799 (4) 2,903,643 — 16,234 (5) — 41.51 5/2/2019 — — — — — 34,059 (6) — 33.54 12/26/2020 — — — — — 28,506 (7) — 44.32 12/16/2021 — — — — — — — — — 7,453 (8) 333,969 — — — — — — — 13,119 (9) 587,862 — — — — — — — 5,640 (10) 252,728 — — — — — — — — — 11,281 (11) 505,502 8,332 (12) — — 25.79 11/3/2015 — — — — — 16,234 (5) — 41.51 5/2/2019 — — — — — 74,931 (6) — 33.54 12/26/2020 — — — — — 62,713 (7) — 44.32 12/16/2021 — — — — — — — — — 4,355 (13) 195,148 — — — — — — — 16,398 (8) 734,794 — — — — — — — 28,860 (9) 1,293,217 — — — — — — — 12,409 (10) 556,047 — — — — — — — — — 24,819 (11) 1,112,139 75,000 25,000 (14) — 26.17 5/5/2017 — — — — — 21,645 (5) — 41.51 5/2/2019 — — — — — 51,089 (6) — 33.54 12/26/2020 — — — — — 34207 (7) — 44.32 12/16/2021 — — — — — — — — — 11,180 (8) 500,976 — — — — — — — 19,677 (9) 881,726 — — — — — — — 6,768 (10) 303,274 — — — — — — — — — 13,537 (11) 606,593 10,000 (15) — — 38.06 3/19/2014 — — — — 16,666 (16) — — 37.06 5/6/2015 — — — — 37,500 12,500 (14) — 26.17 5/5/2017 — — — — — 6,492 (5) — 41.51 5/2/2019 — — — — — 10,217 (6) — 33.54 12/26/2020 — — — — — 21,379 (7) — 44.32 12/16/2021 — — — — — — — — — 2,236 (8) 100,195 — — — — — — — 3,936 (9) 176,372 — — — — — — — 4,230 (10) 189,546 — — — — — — — — — 8,461 (11) 379,137 — — — — — — — — — 100,000 (17) — — 38.06 3/19/2014 — — — — 500,000 (18) — — 32.78 6/20/2014 — — — — 650,000 (19) — — 37.06 5/6/2015 — — — — (1) The market value of shares or units that have not vested has been calculated using the closing price of the Company’s shares on December 31, 2013, as quoted on the NYSE ($44.81), the last business day of the year. (2) Time-based options were granted on May 10, 2013. The option will vest 33%, 33% and 34% on the first, second and third anniversaries of the grant date. (3) Time-based RSUs were granted on May 10, 2013. The RSUs will vest 33%, 33% and 34% on the first, second and third anniversaries of the grant date. (4) Performance-based RSUs were granted on May 10, 2013, 50% of which are earned if an organic commissions and fees growth target for January 1, 2013 through December 31, 2015 is met and 50% of which are earned if an adjusted EBIT target for January 1, 2013 through December 31, 2015 is met. If the targets are not achieved at 100%, the amount of the award is reduced on a sliding scale basis. Earned RSUs will vest in full on March 5, 2016. (5) Performance-based options were granted on May 2, 2011. The Company did not achieve performance targets for these options and the amount of the original award was reduced on a sliding scale basis. The options will vest 50% on each of the third and fourth anniversaries of the grant date. (6) Time-based options were granted on December 26, 2012. The options will vest 50% on each of the second and third anniversaries of the grant date. (7) Time-based options were granted on December 16, 2013. The options will vest 33%, 33% and 34% on the first, second and third anniversaries of the grant date. (8) Time-based RSUs were granted on December 26, 2012. The RSUs will vest 50% on each of the second and third anniversaries of the grant date. (9) Performance-based RSUs were granted on December 26, 2012.The Company did not achieve performance targets for these RSUs and the amount of the original award was reduced on a sliding scale basis. The RSUs will vest 50% on each of the second and third anniversaries of the grant date. (10) Time-based RSUs were granted on December 16, 2013. The RSUs will vest 33%, 33% and 34% on the first, second and third anniversaries of the grant date. (11) Performance-based RSUs were granted on December 16, 2013, 50% of which are earned if an organic commissions and fees growth target for January 1, 2013 through December 31, 2015 is met and 50% of which are earned if an adjusted EBIT target for January 1, 2013 through December 31, 2015 is met. If the targets are not achieved at 100%, the amount of the award is reduced on a sliding scale basis. Earned RSUs will vest in full on March 5, 2016. (12) Performance-based options were granted on November 3, 2008. The Company did not achieve performance targets for these options and the amount of the original award was reduced on a sliding scale basis. The options are fully exercisable. (13) Time-based RSUs were granted on March 1, 2012. The RSUs will vest 33%, 33% and 34% on the first, second and third anniversaries of the grant date. (14) Performance-based options were granted on May 5, 2009. The Company met the performance targets for these options. The options will become exercisable 25% on each of the second, third, fourth and fifth anniversaries of the grant date. (15) Time-based options were granted on March 19, 2004. The options were exercised in full on February 20, 2014. (16) Performance-based options were granted on May 6, 2008. The Company did not achieve performance targets for these options and the amount of the original award was reduced on a sliding scale basis. The options are fully exercisable. (17) Time-based options were granted on March 19, 2004 and Mr. Plumeri exercised the options in full in 2014. (18) Time-based options were granted on June 20, 2006 and are fully exercisable. (19) Performance-based options were granted on May 6, 2008. The Company met the performance targets for these options. The options are fully exercisable. Option Awards Share-Based Awards Number of
Shares
Acquired on
Exercise
(#) Value
Realized on
Exercise
($) Number of
Shares
Acquired On
Vesting
(#) Value
Realized On
Vesting
($)(1) — — — — — — 5,438 235,955 — — 5,545 221,067 227,775 2,402,851 — — 3,600 47,102 3,023 114,904 299,208 2,606,597 41,437 1,699,007 — — 294,747 12,136,263 (1) The value realized in respect of vested RSUs is calculated using the closing price, as quoted on the NYSE, on the date of such RSUs vesting. Number of Years
Credited
Service(1) Present Value of
Accumulated
Benefit ($’000) Payments During
Last Fiscal Year ($) Willis North America Inc. Pension Plan 8.583 583(2) 23,410 Willis North America Inc. Pension Plan 12.25 554 — Willis North America Inc. Pension Plan 5.67 180 — (1) Represents service for benefit purposes. (2) Represents the value of remaining payments at December 31, 2013. Executive
Contributions
in Last Fiscal
Year
($)Registrant
Contributions
in Last Fiscal
Year
($)Aggregate
Earnings in
Last Fiscal
Year
($)Aggregate
Withdrawals/
Distributions
($)Aggregate
Balance at Last
Fiscal Year End
($)400,000(1) — (18,816)(2) 8,671,568 — — — 404,336(3) — 1,675,132 — — 63,313(4) — 515,127 (1) Effective from October 15, 2003, Mr. Plumeri has received an annual deferred compensation credit of $800,000, which is made to a non-qualified deferred compensation plan on his behalf. Actual payments into the plan are made after deducting Social Security and Medicare Taxes from the $800,000 annual credit. The final installments were contributed on January 15, 2013 (in the amount of $200,000) and April 15, 2013 (in the amount of $200,000). (2) Aggregate earnings are included in Mr. Plumeri’s Change in Pension Value in the “Summary Compensation” table. For the period January 1 – July 6, 2013, investment earnings of $(424) were offset by Social Security and Medicare taxes totalling $19,240. Mr. Plumeri’s account was withdrawn and distributed to him in July, 2013. (3) Aggregate earnings for Mr. Krauze include those made on the Company-granted award in the amount of $350,000 in 2009 as well as salary and bonus deferrals Mr. Krauze elected to make in prior years. Mr. Krauze’s entire account was distributed to him on January 3, 2014. (4) Aggregate earnings for Mr. Jones include those made on the Company-granted award in the amount of $350,000 in 2009. 30,30th of the year of grant and vest at a rate not greater less than 1/3rd per year on each of the first three anniversaries of the date of grant. Severance
($) Value of
Unvested
Deferred Cash
Awards ($)(3) Total
Payments on
Termination
($) Welfare/
Other ($) Intrinsic
Value of
Unvested
Share-Based
Awards ($)(5) 10,061,000 — 10,061,000 882 4,945,494 10,061,000 — 10,061,000 882 4,945,494 3,561,000 — 3,561,000 — 4,945,494 — — — — 4,945,494 (1) Mr. Casserley’s employment agreement provides that in the event that his employment is terminated by the Company without Cause, Mr. Casserley resigns for Good Reason or Mr. Casserley is terminated as a result of the non-renewal of his employment agreement by the Company within the first four years of employment (a “Qualifying Termination”), Mr. Casserley would be entitled to the following severance payments and benefits: (i) an amount equal to two times the sum of his annual base salary and target annual incentive award, payable in installments over 24 months (the “Severance Payment”), (ii) a pro-rata portion of his annual incentive award for the year in which the termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are payable generally, (iii) payment of the employment commencement transition award of $1,500,000, to the extent unpaid, (iv) continued medical coverage at the active employee rate for Mr. Casserley, his spouse and then covered dependents for up to 18 months, and (v) accrued benefits including any annual incentive compensation awards earned but unpaid for any completed fiscal year. (2) Mr. Casserley’s employment agreement and equity award agreements provides that in the event of a Qualifying Termination within two years following a Change in Control, Mr. Casserley would be entitled to the severance payments and benefits described in footnote (1) above; provided, that the Severance Payment would be paid in a lump sum and Mr. Casserley would receive full service-vesting credit (but not performance-vesting credit) for each of the annual equity-based long-term incentive awards granted to him. (3) Mr. Casserley has not been granted any deferred cash awards. (4) the year in which the termination of employment occurs, based on actual performance, payable at the same time that annual incentive compensation awards are payable generally and (iii) full acceleration of all equity incentive awards granted to Mr. Casserley in 2013. (5) Mr. Casserley is not entitled to any automatic payments or benefits upon the occurrence of a Change in Control; however, the Board has the discretion to accelerate the vesting of all outstanding equity awards upon a Change in Control. (6) The term “Cause” means (i) indictment for, conviction of or plea of no contest or guilty to, a misdemeanor involving sexual misconduct or to a felony under U.S. federal or state law, or equivalent crime under the laws of the United Kingdom, (ii) willful misconduct with regard to his material duties and responsibilities with the Company, (iii) willful breach of material obligations under Mr. Casserley’s employment agreement, (iii) drug addiction or habitual intoxication that adversely effects job performance or the reputation or best interests of the Company; or (iv) commission of fraud, embezzlement, misappropriation of funds, willful breach of fiduciary duty or willfully engaging in a material act of dishonesty against the Company. Severance
($) Value of
Unvested
Deferred
Cash Awards
($) Total
Payments on
Termination
($) Welfare/
Other
($) Intrinsic
Value of
Unvested
Share-Based
Awards
($)(1) 600,000 201,375 801,375 17,628 2,131,446 600,000 201,375 801,375 17,628 2,131,446 600,000 201,375 801,375 17,628 2,131,446 — 201,375 201,375 — 2,131,446 5,564,626 257,625 5,822,251 882 4,820,119 6,881,177 257,625 7,138,802 882 4,820,119 — 257,625 257,625 — 4,820,119 — 257,625 257,625 — 4,820,119 2,277,055 268,500 2,545,555 — 3,422,532 2,277,055 268,500 2,545,555 — 3,422,532 — 268,500 268,500 — 3,422,532 — 268,500 268,500 — 3,422,532 1,350,000 103,050 1,453,050 — 1,364,834 1,350,000 103,050 1,453,050 — 1,364,834 — 103,050 103,050 — 1,364,834 — 103,050 103,050 — 1,364,834 (1) Mr. Hearn’s amended employment agreement provides that in the event that his employment is terminated by the Company without Cause or Mr. Hearn resigns for Good Reason, any options, restricted shares, deferred cash or other long term incentive awards due to vest during the twelve month period following the termination date will vest on the termination date. “Cause” is defined as (i) gross and or chronic neglect of duties, (ii) conviction of an offence involving moral turpitude, (iii) dishonesty, embezzlement, fraud or other material willful misconduct in connection with employment, (iv) the issuance of any final order for removal as an associate or officer of the Company by any regulatory authority, (v) violation of any obligation or confidence, fiduciary duty, duty of loyalty or other material obligation owed to the Company in any employment or other agreement with the Company or implied as common law, (vi) material breach of the Company’s code of ethics, or (vii) failure to maintain any insurance or license necessary for the performance of duties to the Company. “Good Reason” is defined as (i) a reduction in base salary or a material adverse reduction in benefits (other than (a) in the case of base salary a reduction offset by an increase in bonus opportunity upon the attainment of reasonable performance goals or (b) a general reduction in compensation or benefits affecting a broad group of employees), (ii) a material adverse reduction in principal duties and responsibilities or (iii) a significant transfer away from his primary service area or primary workplace other than as permitted by existing service contracts. (2) Mr. Neborak’s employment agreement provides that in the event his employment was terminated by the Company without Cause, the executive would receive severance pay equal to 12 months of base salary. “Cause” was defined as (i) gross and or chronic neglect of duties, (ii) conviction of a felony or misdemeanor involving moral turpitude, (iii) material willful dishonesty, embezzlement, fraud or other material willful misconduct in connection with employment, (iv) the issuance of any final order for removal as an associate of the Company by any state or federal regulatory agency, (v) violation of the restrictive covenant provisions in an employment agreement or other agreement with the Company, (vi) material breach of any material duty owed to the Company, including, without limitation the duty of loyalty, (vii) material breach of any other material obligations under an employment or other agreement with the Company, (viii) material breach of the Company’s code of ethics, (ix) failure to achieve reasonable performance goals as specified by the Company or (x) failure to maintain any insurance or license necessary for the performance of duties to the Company. (3) The occurrence of a Change of Control will not trigger any automatic cash payments to Messrs. Neborak, Hearn and Wright however, pursuant to his amended employment agreement, upon a termination of employment by the Company without Cause within two years following a Change of Control, Mr. Hearn is entitled to an enhanced severance payment. The enhanced severance payment is equal to 200% (rather than 150%) of the sum of his annual base salary and target annual incentive award, which amount will be offset against any pay provided during the 12-month notice period set forth in his employment agreement or any pay in lieu of notice. Further, the deferred cash awards held by the executives may, in the discretion of the Compensation Committee, vest and become payable and, as described below, certain option and RSU awards held by the executives will vest. (4) performance-based option and deferred cash awards only vest to the extent that performance targets have been achieved on the date of termination of employment. In addition, the Board, in its sole discretion, may accelerate the vesting of all option, RSU and deferred cash awards upon a termination of employment due to retirement. (5) Mr. Neborak entered into restrictive covenant agreements with the Company, effective on August 2, 2010. The agreement provided, in part, that for a period of 12 months directly following his termination of employment for any reason the executive must refrain from working for, engaging or generally having a financial interest in certain of the Company’s competitors. During the non-compete period, the Company would have been obligated to make payments to the officer equal to the base salary payments the executive would have received if he had remained in the Company’s employ during such period. In addition, the Company would have been required to pay for the cost of the officer’s medical coverage during the non-compete period. The Company could have elected to shorten the non-competition period for Mr. Neborak, in which case the Company would have only been obligated to provide the officer with the base salary payments and medical benefits described above during the shortened non-compete period. (6) The occurrence of a Change of Control will not trigger any automatic cash payments to Messrs. Neborak, Hearn, Wright and Jones. However, as described in Termination by the Company on Change of Control above, the option, RSU and deferred cash awards held by the executives may vest upon the occurrence of a Change of Control, in the sole discretion of the Board. (7) Messrs. Hearn and Wright receive their salaries and annual incentive compensation awards in pounds sterling. The dollar figures shown have been calculated at the exchange rate as at December 31, 2013 (£1: $1.656). (8) In April 2014, the Compensation Committee approved an amendment to Mr. Hearn’s employment agreement whereby he would receive full service-vesting credit (but not performance vesting credit) for all of his long-term incentive awards if he is terminated by the Company without Cause or by the officer for Good Reason within 24 months following a change of control.
In addition, as part of their annual compensation, each non-employee director who is elected at the Company’s Annual General Meeting of Shareholders also receives time-based equity equivalent in value to $100,000 (based on the closing price of the Company’s shares as quoted on the NYSE on the date of grant) that vest in full on the one-year anniversary of the grant date. On August 12, 2013, the non-employee directors received 2,375 RSUs that will vest in full on August 12, 2014.
Non-employee directors are subject to share ownership guidelines that require them to hold Company shares equal to the lesser of 3.5 times the directors’ cash retainer of $100,000 (i.e., $350,000) or 10,000 shares within five years. Incumbent directors must comply by 2016 (i.e., five years of adoption of the guidelines). Ordinary shares, deferred shares, share equivalents, RSUs and restricted shares count toward satisfying the guidelines, but options to purchase shares do not. Each director is prohibited from transferring these shares until six months after he or she leaves Board service (other than to satisfy tax obligations on the vesting/distribution of existing equity awards), but is permitted to transfer any shares in excess of this amount. In the event anon-employee director has not acquired this threshold of shares, he or she is prohibited from transferring any Company shares (other than to satisfy tax obligations on the vesting/distribution of existing equity awards). In the case of financial hardship, the ownership guidelines would be waived until the hardship no longer applies or such appropriate time as the Compensation Committee determines. All directors who have been a member of the Board for at least five years satisfy the guidelines.
Sir Jeremy Hanley receives an additional annual fee of £50,000 for serving on the board of directors of Willis Limited, the Company’s principal insurance broking subsidiary outside of the USA. He has been a member of the Willis Limited board of directors since March 12, 2008 and he also serves on the Willis Limited board of directors’ audit committee.
The following table sets forth cash and other compensation paid or accrued to the non-employee directors of the Company during 2013.
Name of Non-Employee Director | Fees Earned or Paid in Cash ($) | Option Awards ($) | Share Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | |||||||||||||||
Joseph Califano (retired 7/23/13) | 56,250 | — | — | 34,875 | 91,125 | |||||||||||||||
Anna C. Catalano | 100,000 | — | 99,988 | — | 199,988 | |||||||||||||||
Sir Roy Gardner(3) | 120,000 | — | 99,988 | — | 219,988 | |||||||||||||||
Sir Jeremy Hanley(4) | 110,000 | — | 99,988 | — | 209,988 | |||||||||||||||
Robyn S. Kravit(5) | 105,625 | — | 99,988 | 113,258 | 318,871 | |||||||||||||||
Jeffrey Lane (retired 7/23/13) | 56,250 | — | — | — | 56,250 | |||||||||||||||
Wendy E. Lane(6) | 130,000 | — | 99,988 | 93,205 | 323,193 | |||||||||||||||
Francisco Luzón (joined 7/23/13) | 44,022 | — | 99,988 | — | 144,010 | |||||||||||||||
James F. McCann(7) | 174,239 | — | 174,968 | 14,966 | 364,173 | |||||||||||||||
Jaymin Patel (joined 7/23/13) | 44,022 | — | 99,988 | — | 144,010 | |||||||||||||||
Douglas B. Roberts(8) | 130,000 | — | 99,988 | 41,545 | 271,533 | |||||||||||||||
Michael J. Somers | 104,402 | — | 99,988 | — | 204,390 | |||||||||||||||
Jeffrey W. Ubben (joined 7/23/13) | 44,022 | — | 99,988 | — | 144,010 |
(1) | Each of the directors received 2,375 RSUs on August 12, 2013 which vest in full on August 12, 2014 (other than Joseph Califano and Jeffrey Lane who retired from the Board effective July 23, 2013). Mr. McCann received an additional 1,781 RSUs as part of his Chairman fees which will also vest on August 12, 2014. The value shown is the full fair value as at the date of grant. |
(2) | In connection with the Company’s redomicile to Ireland, the Company agreed to indemnify any director in the event they may need to pay additional taxes as a result of the redomicile. The above amounts reflect the gross-up payment made to thenon-employee directors in 2013 in connection with taxes paid by them for the 2012 fiscal year. In the case of Ms. Lane, it also reflects $46,748 paid for the 2011 fiscal year. The Company also hired Ernst & Young in Dublin, Ireland to prepare the directors’ Irish 2013 tax returns which is expected to be less than $50,000 in the aggregate. |
(3) | The above fees reflect Sir Roy Gardner’s role as the Chairman of the Risk Committee. |
(4) | The above fees reflect Sir Jeremy Hanley’s role as a member of the Audit Committee. As noted above, he also receives an annual cash fee of £50,000 in connection with his service as a director on the Willis Limited board of directors. |
(5) | The above fees reflect Ms. Kravit’s role as a member of the Audit Committee until July 23, 2013 when she became a member of the Risk Committee. |
(6) | The above fees reflect Ms. Lane’s role as the Chairman of the Compensation Committee and a member of the Audit Committee. |
(7) | The above fees reflect Mr. McCann’s role as Presiding Independent Director until July 7, 2013, non-executive Chairman of the Board from July 8, 2013 until December 31, 2013 and Chairman of the Governance Committee. |
(8) | The above fees reflect Mr. Roberts’ role as the Chairman of the Audit Committee. |
As of December 31, 2013, the non-employee directors owned the following equity (which includes any RSUs, the settlement of which has been deferred):
Shares | RSUs | Deferred RSUs | Options | |||||||||||||
Anna C. Catalano | 9,409 | 2,375 | 1,361 | 30,000 | ||||||||||||
Sir Roy Gardner | 15,679 | 2,375 | — | 30,000 | ||||||||||||
Sir Jeremy Hanley | 14,487 | 2,375 | 3,189 | 30,000 | ||||||||||||
Robyn S. Kravit | 7,581 | 2,375 | 1,361 | — | ||||||||||||
Wendy E. Lane | 9,259 | 2,375 | — | 30,000 | (1) | |||||||||||
Francisco Luzón | 6,760 | 2,375 | — | — | ||||||||||||
James F. McCann | 10,259 | 4,156 | 1,361 | — | ||||||||||||
Jaymin Patel | — | 2,375 | — | — | ||||||||||||
Douglas B. Roberts | 14,007 | 2,375 | 3,189 | 15,000 | (1) | |||||||||||
Michael J. Somers | 4,034 | 2,375 | — | — | ||||||||||||
Jeffrey W. Ubben | — | 2,375 | — | — |
(1) | Represents options that were amended such that the owner would receive the intrinsic value in cash upon exercise rather than shares. These were all exercised in 2014. |
For more information regarding the number of shares beneficially owned by each director as of April 23, 2014, see Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information, Plan Category Equity Compensation Plans Approved by Security Holders Equity Compensation Plans Not approved by Security Holders Security Ownership of Certain Beneficial Owners and Management The following tables show the number of shares beneficially owned, as of April 23, 2014: The amounts and percentages of our shares beneficially owned are reported in accordance with required by this Item with respect to security ownershipas of certain beneficial owners and management equity andDecember 31, 2013, about the securities authorized for issuance under our equity compensation plans, will be providedand is categorized according to whether or not the equity plan was previously approved by shareholders: Number of shares to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights (1) Number of Shares
Remaining Available for
Future Issuance 16,021,940 (2) 36.27 1,093,230 (3) 150,235 (4) 25.20 732,982 (5) 16,172,175 36.08 1,826,212 (1) The weighted-average exercise price set forth in this column is calculated excluding RSUs or other awards for which recipients are not required to pay an exercise price to receive the shares subject to the awards. (2) Includes options and RSUs outstanding under the 2001 Share Purchase and Option Plan, 2008 Plan and 2012 Plan. (3) Represents shares available for issuance pursuant to awards that may be granted under the 2012 Plan (576,025 shares) and the 2010 North American Employee Stock Purchase Plan (517,205 shares). (4) Includes options and RSUs outstanding under the following plans that were assumed by Willis in connection with the acquisition by Willis of Hilb, Rogal & Hobbs: the 2000 HRH Plan and the 2007 HRH Plan. No future awards will be granted under the 2000 HRH Plan. The above amounts do not include an aggregate of 45,000 options held by certain non-employee directors pursuant to which they will receive the intrinsic value in cash rather than shares upon exercise of the options. These were subsequently exercised. (5) Represents shares that remain available for issuance under the 2007 HRH Plan. Willis is authorized to grant awards under the 2007 HRH Plan until 2017 to employees who were formerly employed by Hilb, Rogal & Hobbs and to new employees who have joined Willis or one of its subsidiaries since October 1, 2008, the date that the acquisition of Hilb, Rogal & Hobbs was completed. Instruction G(3)Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under these rules, a person is deemed to Form 10-Kbe a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of that security, or investment power, which includes the power to dispose of or to direct the disposition of that security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of April 23, 2014 (i.e., June 22, 2014). Also, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which that person has no later than April 30, 2014.
5% Beneficial Owners
Name and Address | Number of Shares Beneficially Owned | Percent Beneficially Owned | ||
ValueAct Capital(1) 435 Pacific Avenue, Fourth Floor San Francisco, CA 94133 | 18,422,600 | 10.29% | ||
Harris Associates L.P.(2) Harris Associates Inc. Two North LaSalle Street, Suite 500 | 17,605,159 | 9.83% |
(1) | The information is based solely on the Schedule 13D/A filed with the SEC on April 30, 2013 jointly by ValueAct Capital Master Fund, L.P.; VA Partners I, LLC; ValueAct Capital Management, L.P.; ValueAct Capital Management, LLC; ValueAct Holdings, L.P.; and ValueAct Holdings GP, LLC as well as the Form 4 filed with the SEC on March 4, 2014 by all of the foregoing entities as well as Jeffrey W. Ubben. |
(2) | The information is based solely on the Schedule 13G/A filed with the SEC on February 13, 2014 by Harris Associates L.P. and its general partner, Harris Associates Inc. The amount beneficially owned includes 17,353,059 shares over which there is sole voting power and sole dispositive power. As a result of advisory and other relationships with persons who own the shares, Harris Associates L.P. may be deemed to be the beneficial owner of 17,605,159 shares. Percentage of our shares beneficially owned is as reported in their Schedule 13G as of December 31, 2013. |
Directors, Director Nominees and Executive Officers
Name and Address(1) | Number of Shares Beneficially Owned(2) | Percent Beneficially Owned | ||||||||
Anna Catalano(3) | 40,770 | * | ||||||||
Sir Roy Gardner(4) | 45,679 | * | ||||||||
Sir Jeremy Hanley(5) | 47,676 | * | ||||||||
Robyn Kravit(6) | 8,942 | * | ||||||||
Wendy E. Lane | 9,259 | * | ||||||||
Francisco Luzón | 6,760 | * | ||||||||
James McCann(7) | 11,620 | * | ||||||||
Jaymin Patel | 0 | * | ||||||||
Douglas Roberts(8) | 17,196 | * | ||||||||
Michael Somers | 4,034 | * | ||||||||
Jeffrey W. Ubben(9) | 18,422,600 | 10.29% | ||||||||
Dominic Casserley(10) | 118,329 | * | ||||||||
Stephen Hearn(11) | 22,889 | * | ||||||||
Todd Jones(12) | 80,301 | * | ||||||||
Victor Krauze | 25,125 | * | ||||||||
Michael Neborak | 18,969 | * | ||||||||
Joseph Plumeri(13) | 1,150,000 | * | ||||||||
Timothy Wright(14) | 126,940 | * | ||||||||
All of our Current Directors, Director Nominees and Executive Officers (21 persons)(15) | 20,211,750 | 11.28% |
* | Less than 1%. |
(1) | Unless otherwise indicated, the address of each of the persons listed below is c/o Willis Group Holdings Public Limited Company, Grand Mill Quay, Barrow Street, Dublin 4, Ireland. |
(2) | The number of shares that the directors and executive officers are deemed to have a beneficial interest includes shares under options that will be exercisable and/or RSUs that will vest on or before June 22, 2014 as indicated in the following notes. These shares, however, are not deemed outstanding for purposes of computing percentage of beneficial ownership of any other person. |
(3) | Ms. Catalano’s shares beneficially owned include 30,000 options to purchase shares and 1,361 vested RSUs, the settlement of which has been deferred until the earlier of when the director ceases to serve on the Board and January 2, 2017. |
(4) | Sir Roy Gardner’s shares beneficially owned include 30,000 options to purchase shares. |
(5) | Sir Jeremy Hanley’s shares beneficially owned include 30,000 options to purchase shares and 3,189 vested RSUs, the settlement of which has been deferred until the earlier of when the director ceases to serve on the Board and January 2, 2017. |
(6) | Ms. Kravit’s shares beneficially owned includes 1,361 vested RSUs, the settlement of which has been deferred until the earlier of when the director ceases to serve on the Board and January 2, 2017. |
(7) | Mr. McCann’s shares beneficially owned includes 1,361 vested RSUs, the settlement of which has been deferred until the earlier of when the director ceases to serve on the Board and January 2, 2017. |
(8) | Mr. Roberts’ shares beneficially owned includes 3,189 vested RSUs, the settlement of which has been deferred until the earlier of when the director ceases to serve on the Board and January 2, 2017. |
(9) | Includes 18,422,600 ordinary shares beneficially owned by ValueAct Capital Master Fund, L.P., as to which Mr. Ubben may be deemed a beneficial owner. Mr. Ubben disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. |
(10) | Mr. Casserley’s shares beneficially owned include 10,691 time-based RSUs that are scheduled to vest on May 10, 2014 and 22,584 options to purchase shares. |
(11) | Mr. Hearn’s shares beneficially owned include 8,117 performance-based options to purchase shares that are scheduled to vest on May 2, 2014 and 8,332 options to purchase shares. |
(12) | Mr. Jones’ shares beneficial owned include 3,246 options to purchase shares that are scheduled to vest on May 2, 2014, 12,500 options to purchase shares that are scheduled to vest on May 5, 2014 and 54,166 options to purchase shares. |
(13) | Mr. Plumeri’s shares beneficially owned include 1,150,000 options to purchase shares. |
(14) | Mr. Wright’s shares beneficially owned include 10,823 performance-based options to purchase shares that are scheduled to vest on May 2, 2014, 25,000 performance-based options to purchase shares that are scheduled to vest on May 5, 2014 and 75,000 options to purchase shares. |
(15) | Includes shares beneficially owned by ValueAct Capital Master Fund, L.P., as to which Mr. Ubben may be deemed a beneficial owner. Mr. Ubben disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. |
Review and Approval of Related Person Transactions Willis has adopted written policies and procedures governing the review and approval of transactions between the Company and any of its directors or executive officers, nominees for directors, any security holder who is known to the Company to own of record or beneficially more than 5% of any class of the Company’s voting securities or their immediate family members (each, a “Related Person”) to determine whether such persons have a direct or indirect material interest. The Company’s directors, nominees for directors and executive officers complete an annual director and officer questionnaire which requires the disclosure of related person transactions. In addition, directors, nominees for directors and executive officers are obligated to advise the Audit Committee of any related person transactions of which they are aware, or become aware, and, in the event that any such transactions involve difficult or complex issues, the directors and executive officers are obligated to advise the Group General Counsel. Further, transactions that are determined to be directly or indirectly material to a Related Person are disclosed in the Company’s Proxy Statement or Annual Report on Form 10-K in accordance with SEC rules. The Audit Committee reviews and approves or ratifies any related person transaction that is required to be disclosed. In the course of its review and approval or ratification of a disclosable related person transaction, the Audit Committee considers, among other factors it deems appropriate: Any member of the Audit Committee who is a Related Person with respect to a transaction under review may not participate in the deliberations or vote regarding the approval or ratification of the transaction, provided, however, that such director may be counted in determining the presence of a quorum at a meeting at which the Audit Committee considers the transaction. 2013 Related Person Transactions Under Item 404 of Regulation S-K No transactions are required to be disclosed under Item 404 of Regulation S-K. Board and Committee Member Independence Based on the recommendation of the Governance Committee, the Board has determined that, with the exception of Mr. Casserley, (i) all of the current directors and director nominees shown above and (ii) the members of the Audit Committee, Compensation Committee, Governance Committee and the Risk Committee are independent under the relevant Securities and Exchange Commission (“SEC”) rules, NYSE listing standards and the Board’s Director Independence Standards. The Board’s Director Independence Standards are part of the Company’s Corporate Governance Guidelines adopted by the Board and which comply and meet the requirements of the NYSE’s listing standards. As discussed above, each director has significant experience and affiliations with other organizations. Accordingly, in evaluating the independence The information required by this Item with respect to transactions with related persons,will be providedof each director, the Governance Committee considered that in accordancethe ordinary course of business, the Company provides services (such as insurance broking or consultancy services) to, receives services from or provides charitable donations to organizations affiliated with Instruction G(3) to Form 10-K no later than April 30, 2014.
personal basis. However, the Governance Committee determined that, in all of the above cases, the transactions do not impair the relevant director’s independence under the applicable SEC rules, NYSE listing standards or the Company’s Governance Guidelines.
The Audit fees(1) Audit related fees(2) Tax fees(3) All other fees(4) Total fees The Audit Committee approved all of the services described above in accordance with Audit Committee Pre-Approval Process The Audit Committee has adopted a policy regarding the pre-approval of services provided by the Company’s independent auditors, which can be found in the Investor Relations — Corporate Governance section of the Company’s website at www.willis.com. This policy requires all services provided by the Company’s independent auditors, both audit and permittednon-audit services, to information required by this Item with respect to auditors' services andfollowing fees have been, or will be, providedbilled by Deloitte LLP and their respective affiliates for professional services rendered to the Company for the fiscal years ended December 31, 2013 and December 31, 2012. 2013 2012 ($ in thousands) 7,225 6,942 377 227 132 170 14 980 7,748 8,319 (1) Fees for the audits of the Company’s annual financial statements and reviews of the financial statements included in the Company’s quarterly reports for that fiscal year and services relating to the Company’s 2013 debt offering ($139,000). (2) Audit related fees relate primarily to professional services such as employee benefit plan audits and non-statutory audits. (3) Tax fees comprise fees for various tax compliance engagements. (4) All other fees in 2013 relate to a compensation study in India. All other fees in the prior year relate primarily to assist with the Company’s internal review of certain payments made by our U.K. subsidiary between 2005 and 2009. Instruction G(3)the Company’s pre-approval policy.Form 10-K no later than April 30, 2014.201
be pre-approved by the Audit Committee or the Chairman of the Audit Committee or, in his absence, any other member of the Committee. The pre-approval of audit and permitted non-audit services may be given at any time before the commencement of the specified service. The decisions of a designated member of the Audit Committee shall be reported to the Audit Committee at each of its regularly scheduled meetings.
EXHIBIT A
RECONCILIATIONOF GAAPTO NON-GAAP INFORMATION
I. | Adjusted EBITDA |
The following table reconciles net income to adjusted EBITDA for the twelve months ended December 31, 2013 and 2012.
Reconciliation of net income (loss) to Adjusted EBITDA:
Year ended December 31, | ||||||||
2013 | 2012 | |||||||
(millions) | ||||||||
Net income (loss) attributable to Willis Group Holdings, GAAP basis | $ | 365 | $ | (446 | ) | |||
Net income attributable to noncontrolling interest | 12 | 13 | ||||||
Interest in earnings of associates, net of tax | — | (5 | ) | |||||
Income taxes | 122 | 101 | ||||||
Loss on extinguishment of debt | 60 | — | ||||||
Interest expense | 126 | 128 | ||||||
Depreciation | 94 | 79 | ||||||
Amortization of intangible assets | 55 | 59 | ||||||
(Gain) loss on disposal of operations | (2 | ) | 3 | |||||
Expense reduction initiative(a) | 41 | — | ||||||
Fees related to the extinguishment of debt | 1 | — | ||||||
Goodwill impairment charge(b) | — | 492 | ||||||
Write-off of unamortized cash retention award(c) | — | 200 | ||||||
2012 cash bonus accrual(d) | — | 252 | ||||||
Insurance recovery(e) | — | (10 | ) | |||||
India joint venture settlement(f) | — | 11 | ||||||
Write-off of uncollectible accounts receivable(g) | — | 13 | ||||||
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Adjusted EBITDA | $ | 874 | $ | 890 | ||||
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(a) | Charge related to the assessment of the Company’s organization design. |
(b) | Non-cash charge recognized related to the impairment of the carrying value of the North America reporting unit’s goodwill. |
(c) | Write-off of unamortized cast retention awards following the replacement of annual cash retention awards with annual cash bonuses which will not feature a repayment requirement. |
(d) | Additional incentive accrual recognized following the replacement of annual cash retention awards with annual cash bonuses which will not feature a repayment requirement. |
(e) | Insurance recovery related to the previously disclosed fraudulent activity in Chicago. |
(f) | $11 million settlement with former partners related to the termination of a joint venture arrangement in India. |
(g) | Write-off of uncollectible accounts receivable balance relating to periods prior to January 1, 2011. |
II. | Organic Commissions and Fees |
The following table reconciles organic commissions and fees growth by segment to the percentage change in reported commissions and fees growth for the twelve months ended December 31, 2013.
Twelve months ended December 31, | Change attributable to | |||||||||||||||
2013 | 2012 | % Change | Foreign currency translation | Acquisitions and disposals | Organic commissions and fees growth | |||||||||||
North America | $ | 1,377 | $ | 1,306 | 5.4% | (0.1)% | 0.6% | 4.9% | ||||||||
International | 1,068 | 1,028 | 3.9% | (0.2)% | 0.0% | 4.1% | ||||||||||
Global | 1,188 | 1,124 | 5.7% | (0.9)% | 1.0% | 5.6% | ||||||||||
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Total | $ | 3,633 | $ | 3,458 | 5.1% | (0.3)% | 0.5% | 4.9% | ||||||||
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(a)—– Exhibits, Financial Statement SchedulesThe following documents are filed as a part of this report:(1) Consolidated Financial Statements of the Company consisting of: Report of Independent Registered Public Accounting Firm.(b) Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.(c) Consolidated Statements of Operations for each of the three years in the period ended December 31, 2013.(d) Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2013.(e) Consolidated Balance Sheets as of December 31, 2013 and 2012.(f) Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2013.(g) Consolidated Statements of Changes in Equity for each of the three years in the period ended December 31, 2013.(h) Notes to the Consolidated Financial Statements.All other schedules are omitted because they are not applicable, or not required, or because the required information is included in the Consolidated Financial Statements or the Notes thereto.(2)(3) Exhibits:1.1 Underwriting Agreement, dated August 8, 2013, among Trinity Acquisition plc, as issuer, the guarantors named therein and Barclays Capital Inc. and Morgan Stanley & Co. LLC, as representatives of the several underwriters named therein (incorporated herein by reference to Exhibit No. 1.1 to the Company'sCompany’s Form 8-K filed on August 12, 2013 (SEC File No. 001-16503))2.1 Scheme of Arrangement between Willis Group Holdings Limited and the Scheme Shareholders (incorporated by reference to Annex A to Willis Group Holdings Limited'sLimited’s Definitive Proxy Statement on Schedule 14A filed on November 2, 2009 (SEC File No. 001-16503))3.1 Memorandum and Articles of Association of Willis Group Holdings Public Limited Company (incorporated herein by reference to Exhibit No. 3.1 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))3.2 Certificate of Incorporation of Willis Group Holdings Public Limited Company (incorporated by reference to Exhibit No. 3.2 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))4.1 Senior Indenture dated as of July 1, 2005, and First Supplemental Indenture, dated as of July 1, 2005, among Willis North America Inc., as the Issuer, Willis Group Holdings Public Limited Company, TA I Limited, TA II Limited, TA III Limited, Trinity Acquisition plc, TA IV Limited and Willis Group Limited, as the Guarantors, and The Bank of New York (f/k/a JPMorgan Chase Bank, N.A.), as the Trustee, for the issuance of the 5.625% senior notes due 2015 (incorporated by reference to Exhibit 4.1 to Willis Group Holdings Limited'sLimited’s Form 8-K filed on July 1, 2005 (SEC File No. 001-16503))4.2 Second Supplemental Indenture dated as of March 28, 2007 among Willis North America Inc., as the Issuer, Willis Group Holdings Public Limited Company, TA I Limited, TA II Limited, TA III Limited, Trinity Acquisition plc, TA IV Limited and Willis Group Limited, as the Guarantors, and The Bank of New York, as the Trustee, to the Indenture dated as of July 1, 2005, for the issuance of the 6.200% senior notes due 2017 (incorporated by reference to Exhibit 4.1 to Willis Group Holdings Limited'sLimited’s Form 8-K filed on March 30, 2007 (SEC File No. 001-16503))4.3 Third Supplemental Indenture dated as of October 1, 2008 among Willis North America Inc., as the Issuer, Willis Group Holdings Limited, Willis Investment UK Holdings Limited, TA I Limited, TA II Limited, TA III Limited, Trinity Acquisition plc, TA IV Limited and Willis Group Limited, as the Guarantors, and The Bank of New York Mellon, as the Trustee, to the Indenture dated as of July 1, 2005 (incorporated by reference to Exhibit 4.1 to Willis Group Holdings Limited'sLimited’s Form 10-Q filed on November 10, 2008 (SEC File No. 001-16503))2024.4 Fourth Supplemental Indenture dated as of September 29, 2009 among Willis North America Inc., as the Issuer, Willis Group Holdings Limited, Willis Investment UK Holdings Limited, TA I Limited, TA II Limited, TA III Limited, Trinity Acquisition plc, TA IV Limited and Willis Group Public Limited Company, as the Guarantors, and The Bank of New York, as the Trustee, to the Indenture dated as of July 1, 2005, for the issuance of the 7.000% senior notes due 2019 (incorporated by reference to Exhibit 4.1 to Willis Group Holdings Limited'sLimited’s Form 8-K filed on September 29, 2009 (SEC FileNo. 001-16503)) 4.5 4.5Fifth Supplemental Indenture dated as of December 31, 2009 among Willis North America Inc., as the Issuer, Willis Group Holdings Public Limited Company, Willis Group Holdings Limited, Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, TA II Limited, TA III Limited, Trinity Acquisition plc, TA IV Limited and Willis Group Limited, as the Guarantors, and The Bank of New York Mellon, as the Trustee, to the Indenture dated as of July 1, 2005 (incorporated by reference to Exhibit 4.1 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC FileNo. 001-16503)) 4.6 4.6Sixth Supplemental Indenture dated as of December 22, 2010 among Willis North America Inc., as the Issuer, Willis Group Holdings Public Limited Company, Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, TA II Limited, TA III Limited, Trinity Acquisition plc, TA IV Limited and Willis Group Limited, as the Guarantors, and The Bank of New York Mellon, as the Trustee, to the Indenture dated as of July 1, 2005 (incorporated by reference to Exhibit 4.1 to the Company'sCompany’s Form 10-K filed on February 28, 2011 (SEC File No. 001-16503))4.7 Indenture, dated as of March 17, 2011, among Willis Group Holdings Public Limited Company, as issuer, Willis Netherlands Holdings B.V., Willis Investment Holdings UK Limited, TA I Limited, Trinity Acquisition plc, Willis Group Limited and Willis North America Inc., as Guarantors, and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 to the Company'sCompany’s Form 8-K filed on March 17, 2011 (SEC File No. 001-16503))4.8 First Supplemental Indenture, dated as of March 17, 2011, among Willis Group Holdings Public Limited Company, as Issuer, Willis Netherlands Holdings B.V., Willis Investment Holdings UK Limited, TA I Limited, Trinity Acquisition plc, Willis Group Limited and Willis North America Inc., as guarantors, and The Bank of New York Mellon, as trustee, to the Indenture dated March 17, 2011, for the issuance of the 4.125% senior notes due 2016 and the 5.750% senior notes due 2021 (incorporated by reference to Exhibit 4.2 to the Company'sCompany’s Form 8-K filed on March 17, 2011 (SEC FileNo. 001-16503)) 4.9 4.9Indenture, dated as of August 15, 2013, among Trinity Acquisition plc, as issuer, Willis Group Holdings Public Limited Company, Willis Netherlands Holdings B.V., Willis North America Inc., Willis Investment Holdings UK Limited, TA I Limited and Willis Group Limited, as guarantors, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company'sCompany’s Form 8-K filed on August 15, 2013 (SEC File No. 001-16503))4.10 First Supplemental Indenture, dated as of August 15, 2013, among Trinity Acquisition plc, as issuer, Willis Group Holdings Public Limited Company, Willis Netherlands Holdings B.V., Willis North America Inc., Willis Investment Holdings UK Limited, TA I Limited and Willis Group Limited, as guarantors, and Wells Fargo Bank, National Association, as trustee, to the Indenture dated August 15, 2013, for the issuance of 4.625% senior notes due 2023 and 6.125% senior notes due 2043 (incorporated by reference to Exhibit 4.2 to the Company'sCompany’s Form 8-K filed on August 15, 2013 (SEC File No. 001-16503)).10.1 Credit Agreement, dated as of December 16, 2011, among Trinity Acquisition plc, Willis Group Holdings Public Limited Company, the Lenders party thereto, Barclays Bank PLC, as Administrative Agent, Swing Line Lender and as an L/C Issuer (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on December 20, 2011 (SEC FileNo. 001-16503))10.2 First Amendment to Credit Agreement, dated as of July 23, 2013, to the Credit Agreement, dated as of December 12, 2011, among Trinity Acquisition PLC, Willis Group Holdings Public Limited Company, the lenders party thereto and Barclays Bank PLC, as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on July 25, 2013 (SEC File No. 001-16503))10.3 Guaranty Agreement, dated as of December 16, 2011, among Trinity Acquisition plc, Willis Group Holdings Public Limited Company, Barclays Bank PLC, as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Company'sCompany’s Form 8-K filed on December 20, 2011 (SEC File No. 001-16503))10.4 Deed Poll of Assumption dated as of December 31, 2009 between Willis Group Holdings Limited and Willis Group Holdings Public Limited Company (incorporated by reference to Exhibit 10.4 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))†10.5 Willis Group Senior Management Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))†20310.6 Willis Group Holdings 2010 North America Employee Share Purchase Plan (incorporated by reference to Exhibit 10.3 to the Company'sCompany’s Form 8-K filed on April 27, 2010 (SEC File No. 001-16503))†10.7 Willis Group Holdings 2001 Share Purchase and Option Plan (incorporated by reference to Exhibit 10.9 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))†10.8 Form of Performance-Based Option Agreement under the Willis Group Holdings 2001 Share Purchase and Option Plan (incorporated by reference to Exhibit 10.2 to the Company'sCompany’s Form 10-Q filed on May 10, 2010 (SEC FileNo. 001-16503))†10.9 Form of Time-Based Option Agreement under the Willis Group Holdings 2001 Share Purchase and Option Plan (incorporated by reference to Exhibit 10.16 the Company'sCompany’s Form 10-K filed on February 28, 2011 (SEC FileNo. 001-16503))†10.10 Form of Time-Based Restricted Share Unit Award Agreement under the Willis Group Holdings 2001 Share Purchase and Option Plan (for executive officers) (incorporated by reference to Exhibit 10.2 to the Company'sCompany’s Form 10-Q filed on August 9, 2011 (SEC File No. 001-16503))†10.11 Form of Restricted Share Unit Award Agreement for Non-employee Directors under the Willis Group Holdings 2001 Share Purchase Option Plan (incorporated by reference to Exhibit 10.14 to the Company'sCompany’s Form 10-K filed February 29, 2012 (SEC File No. 001-16503))†10.12 Form of Performance-Based Option Agreement - 2011 Long Term Incentive Program under the Willis Group Holdings 2001 Share Purchase and Option Plan (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on May 3, 2011 (SEC File No. 001-16503))†10.13 Form of 2011 Long Term Incentive Program Agreement of Restrictive Covenants and Other Obligations (for US employees) (incorporated by reference to Exhibit 10.2 to the Company'sCompany’s Form 8-K filed on May 3, 2011 (SEC FileNo. 001-16503))†10.14 Form of 2011 Long Term Incentive Program Agreement of Restrictive Covenants and Other Obligations (for UK employees) (incorporated by reference to Exhibit 10.3 to the Company'sCompany’s Form 8-K filed on May 3, 2011 (SEC FileNo. 001-16503))†10.15 Form of 2011 Long Term Incentive Program Cash Award Agreement (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on December 20, 2011 (SEC File No. 001-16503))†10.16 Rules of the Willis Group Holdings Sharesave Plan 2001 for the United Kingdom (incorporated by reference to Exhibit 10.13 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))†10.17 The Willis Group Holdings Irish Sharesave Plan (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 10-Q filed on May 5, 2010 (SEC File No. 001-16503))†10.18 Willis Group Holdings 2008 Share Purchase and Option Plan (incorporated by reference to Exhibit 10.16 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))†10.19 Form of Performance-Based Restricted Share Units Award Agreement under the Willis Group Holdings 2008 Share Purchase and Option Plan (for executive officers) (incorporated by reference to Exhibit 10.4 to the Company'sCompany’s Form 10-Q filed on August 9, 2011 (SEC File No. 001-16503))†10.20 Form of Performance-Based Option Award Agreement under the Willis Group Holdings 2008 Share Purchase and Option Plan (for executive officers) (incorporated by reference to Exhibit 10.3 to the Company'sCompany’s Form 10-Q filed on August 9, 2011 (SEC File No. 001-16503))†10.21 Hilb Rogal and Hamilton Company 2000 Share Incentive Plan (incorporated by reference to Exhibit 10.18 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))†10.22 Hilb Rogal & Hobbs Company 2007 Share Incentive Plan (incorporated by reference to Exhibit 10.19 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC File No. 001-16503))†10.23 Form of Time-Based Restricted Share Unit Award Agreement granted under the Hilb Rogal & Hobbs Company 2007 Share Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 10-Q filed on August 6, 2010 (SEC File No. 001-16503))†10.24 Form of Performance-Based Restricted Share Unit Award Agreement granted under the Hilb Rogal & Hobbs Company 2007 Share Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company'sCompany’s Form 10-Q filed on August 9, 2011 (SEC File No. 001-16503))†10.25 Form of Time-Based Option Agreement granted under the Hilb Rogal & Hobbs Company 2007 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company'sCompany’s Form 10-Q filed on August 6, 2010 (SEC FileNo. 001-16503))†20410.26 10.26Form of Performance-Based Option Agreement granted under the Hilb Rogal & Hobbs Company 2007 Share Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company'sCompany’s Form 10-Q filed on August 9, 2011 (SEC FileNo. 001-16503))†10.27 Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s 8-K filed on April 30, 2012 (SEC File No. 001-16503))†10.28 Form of Time Based Share Option Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 10-Q filed on August 9, 2012 (SEC File No. 001-16503))†10.29 Form of Performance Based Share Option Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company'sCompany’s Form 10-Q filed on August 9, 2012 (SEC File No. 001-16503))†10.30 Form of Time Based Restricted Share Unit Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company'sCompany’s Form 10-Q filed on August 9, 2012 (SEC File No. 001-16503))†10.31 Form of Performance Based Restricted Share Unit Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company'sCompany’s Form 10-Q filed on August 9, 2012 (SEC File No. 001-16503))†10.32 Form of Time Based Restricted Share Unit Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan (for Non-Employee Directors) (incorporated by reference to Exhibit 10.5 to the Company'sCompany’s Form 10-Q filed on August 9, 2012 (SEC File No. 001-16503))†10.33 Form of Performance-Based Restricted Share Unit Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan for the 2013 Long-Term Incentive Program*Program (incorporated by reference to Exhibit 10.33 to the Company’s Form 10-K filed on February 27, 2014 (SEC File No. 001-16503))†10.34 Rules of the Willis Group Holdings Public Limited Company 2012 Sharesave Sub-Plan for the United Kingdom to the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.32 to the Company'sCompany’s Form 10-K filed on February 28, 2013 (SEC File No. 001-16503))†10.35 Form of 2012 Long Term Incentive Program Agreement of Restrictive Covenants and Other Obligations (for US employees) Plan (incorporated by reference to Exhibit 10.36 to the Company'sCompany’s Form 10-K filed on February 28, 2013 (SEC File No. 001-16503))†10.36 Form of 2012 Long Term Incentive Program Agreement of Restrictive Covenants and Other Obligations (for UK employees) Plan (incorporated by reference to Exhibit 10.37 to the Company'sCompany’s Form 10-K filed on February 28, 2013 (SEC File No. 001-16503))†10.37 Amended and Restated Willis US 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10.21 to the Company'sCompany’s Form 8-K filed on November 20, 2009 (SEC File No. 001-16503))†10.38 First Amendment to the Amended and Restated Willis U.S. 2005 Deferred Compensation Plan, effective June 1, 2011 (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 10-Q filed on August 9, 2011 (SEC FileNo. 001-16503))†10.39 Second Amendment to the Amended and Restated Willis US 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10. 6 to the Company'sCompany’s Form 10-Q filed on November 5, 2013 (SEC FileNo. 001-16503))†10.40 Instrument Comprising A Guarantee In Favour of Willis Pension Trustees Limited in Respect of the Willis Pension Scheme (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on April 5, 2012 (SEC File No.001-16503))†10.41 Schedule of Contributions for the Willis Pension Scheme (incorporated by reference to Exhibit 10.2 to the Company'sCompany’s Form 8-K filed on April 5, 2012 (SEC FileNo. 001-16503))†10.42 Form of Deed of Indemnity of Willis Group Holdings Public Limited Company with directors and officers (incorporated by reference to Exhibit 10.20 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC FileNo. 001-16503))†10.43 Form of Indemnification Agreement of Willis North America Inc. with directors and officers (incorporated by reference to Exhibit 10.21 to the Company'sCompany’s Form 8-K filed on January 4, 2010 (SEC FileNo. 001-16503))†20510.44 Willis Group Holdings Public Limited Company Compensation Policy for Non-Employee Directors (incorporated by reference to Exhibit 10. 1 to the Company'sCompany’s Form 10-Q filed on November 5, 2013 (SEC FileNo. 001-16503))†10.45 2010 Amended and Restated Employment Agreement, dated as of January 1, 2010, by and between Willis North America, Inc. and Joseph J. Plumeri (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on January 22, 2010 (SEC FileNo. 001-16503))†10.46 First Amendment to Employment Agreement, dated as of October 16, 2012, by and between Willis North America Inc., a subsidiary of Willis Group Holdings Public Limited Company, and Joseph J. Plumeri (incorporated by reference to Exhibit 10.5 to the Company'sCompany’s Form 8-K filed on October 19, 2012 (SEC FileNo. 001-16503))†10.47 Employment Agreement, dated as of October 16, 2012, by and between Willis Group Holdings Public Limited Company and Dominic Casserley (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on October 19, 2012 (SEC FileNo. 001-16503))†10.48 Letter agreement, dated January 31, 2014, by and between Willis Group Holdings plc and Dominic Casserley.*Casserley (incorporated by reference to Exhibit 10.48 to the Company’s Form 10-K filed on February 27, 2014 (SEC FileNo. 001-16503))†10.49 Form of Time-Based Restricted Share Unit Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan, dated May 10, 2013 between Dominic Casserley and Willis Group Holdings Public Limited Company (incorporated by reference to Exhibit 10.3 to the Company'sCompany’s Form 10-Q filed on November 5, 2013 (SEC FileNo. 001-16503))†10.50 Form of Performance-Based Restricted Share Unit Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan, dated May 10, 2013 between Dominic Casserley and Willis Group Holdings Public Limited Company (incorporated by reference to Exhibit 10.4 to the Company'sCompany’s Form 10-Q filed on November 5, 2013 (SEC FileNo. 001-16503))†10.51 Form of Time-Based Share Option Award Agreement under the Willis Group Holdings Public Limited Company 2012 Equity Incentive Plan, dated May 10, 2013 between Dominic Casserley and Willis Group Holdings Public Limited Company (incorporated by reference to Exhibit 10.5 to the Company'sCompany’s Form 10-Q filed on November 5, 2013 (SEC FileNo. 001-16503))†10.52 Offer Letter dated June 22, 2010 and Form of Employment Agreement between Willis North America, Inc. and Michael K. Neborak (incorporated by reference to Exhibit 10.1 to the Company'sCompany’s Form 8-K filed on June 23, 2010 (SEC FileNo. 001-16503))†10.53 Agreement of Restrictive Covenants and Other Obligations dated as of August 2, 2010 between the Company and Michael K. Neborak (incorporated by reference to Exhibit 4.1 to Willis Group Holdings Public Limited Company'sCompany’s Form 10-K filed on February 28, 2011 (SEC FileNo. 001-16503))†10.54 Second Restated Employment Agreement, effective as of December 3, 2010, between Willis North America Inc. and Victor Krauze (incorporated by reference to Exhibit 10.45 to the Company'sCompany’s Form 10-K filed on February 29, 2012 (SEC FileNo. 001-16503))†10.55 First Amendment to Offer of Promotion dated as of October 16, 2012, by and between Willis North America Inc., a subsidiary of Willis Group Holdings Public Limited Company, and Victor P. Krauze. (incorporated by reference to Exhibit 10.7 to the Company'sCompany’s Form 8-K filed on October 19, 2012 (SEC FileNo. 001-16503))†10.56 Agreement by and between Victor P. Krauze and Willis North America, Inc., a subsidiary of Willis Group Holdings Public Limited Company, dated July 1, 2013 (incorporated by reference to Exhibit 10.7 to the Company'sCompany’s Form 8-K filed on July 1, 2013 (SEC FileNo. 001-16503))†10.57 Contract of Employment, dated as of February 28, 2011 by and between Willis Limited, a subsidiary of Willis Group Holdings Public Limited Company, and Stephen P. Hearn (incorporated by reference to Exhibit 10.52 to the Company's Company’sForm 10-K filed on February 28, 2013 (SEC FileNo. 001-16503))†10.58 Amendment, dated July 19, 2012, to the Contract of Employment, dated as of February 28, 2011 by and between Willis Limited, a subsidiary of Willis Group Holdings Public Limited Company, and Stephen P. Hearn (incorporated by reference to Exhibit 10.53 to the Company'sCompany’s Form 10-K filed on February 28, 2013 (SEC FileNo. 001-16503))†10.59 Contract of Employment, dated as of October 16, 2012 by and between Willis Limited, a subsidiary of Willis Group Holdings Public Limited Company, and Stephen P. Hearn (incorporated by reference to Exhibit 10.6 to the Company'sCompany’s Form 8-K filed on October 19, 2012 (SEC FileNo. 001-16503))†20610.60 Contract of Employment, dated as of December 17, 2007 by and between Willis Limited, a subsidiary of Willis Group Holdings Public Limited Company, and Tim Wright (incorporated by reference to Exhibit 10.55 to the Company's Company’sForm 10-K filed on February 28, 2013 (SEC FileNo. 001-16503))†10.61 Amendment, dated July 19, 2012, to the Contract of Employment, dated as of December 17, 2007 by and between Willis Limited, a subsidiary of Willis Group Holdings Public Limited Company, and Tim Wright (incorporated by reference to Exhibit 10.56 to the Company'sCompany’s Form 10-K filed on February 28, 2013 (SEC FileNo. 001-16503))†10.62 Confidentiality Agreement dated as of January 17, 2008 between the Willis Group Limited, a subsidiary of Willis Group Holdings Public Limited Company, and Tim Wright (incorporated by reference to Exhibit 10.57 to the Company's Company’sForm 10-K filed on February 28, 2013 (SEC FileNo. 001-16503))†10.63 Employment Agreement, dated September 15, 2003 between Willis Americas Administration, Inc. and Todd J. Jones*Jones (incorporated by reference to Exhibit 10.63 to the Company’s Form 10-K filed on February 27, 2014 (SEC FileNo. 001-16503))†10.64 Letter Agreement, dated August 1, 2013, between Willis North America Inc., a subsidiary of Willis Group Holdings Public Limited Company, and Todd J. Jones*Jones (incorporated by reference to Exhibit 10.64 to the Company’s Form10-K filed on February 27, 2014 (SEC FileNo. 001-16503))†10.65 Nominating Agreement, dated April 25, 2013, by and among Willis Group Holdings Public Limited Company, ValueAct Capital Master Fund, L.P., VA Partners I, LLC, ValueAct Capital Management, L.P., ValueAct Capital Management, LLC, ValueAct Holdings, L.P., ValueAct Holdings GP, LLC and their respective affiliates (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on April 26, 2013 ((SEC File No. 001-16503)) 10.66 Investment and Share Purchase Agreement dated as of November 18, 2009 by and among Willis Europe BV, Astorg Partners, Soleil, Alcee, the Lucas family shareholders, the Gras family shareholders, key managers of Gras Savoye & Cie and other minority shareholders of Gras Savoye (incorporated by reference to Exhibit 10.37 to the Company'sCompany’s Form 10-K filed on March 1, 2010 (SEC FileNo. 001-16503))10.67 Shareholders Agreement dated as of December 17, 2009 by and among Willis Europe BV, Astorg Partners, Soleil, Alcee, the Lucas family shareholders, the Gras family shareholders, key managers of Gras Savoye & Cie and other minority shareholders of Gras Savoye (incorporated by reference to Exhibit 10.38 to the Company'sCompany’s Form 10-K filed on March 1, 2010 (SEC File No. 001-16503))10.68 Amended and Restated Shareholders'Shareholders’ Agreement, dated as of April 15, 2013, by and among Willis Europe BV, Willis Netherlands Holdings BV, Astorg Partners, GS & Cie Group, Alcee, the Lucas family shareholders, the Gras family shareholders, key managers of Gras Savoye & Cie and other minority shareholders of Gras Savoye (incorporated by reference to Exhibit 10.60 to the Company'sCompany’s Form 10-Q filed on May 8, 2013 (SEC FileNo. 001-16503))12.1 Statement regarding Computation of Ratio of Earnings to Fixed Charges. * (incorporated by reference to Exhibit 12.1 to the Company’s Form 10-K filed on February 27, 2014 (SEC File No. 001-16503))21.1 List of subsidiaries*subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Form 10-K filed on February 27, 2014 (SEC FileNo. 001-16503))23.1 Consent of Deloitte LLP*LLP (incorporated by reference to Exhibit 23.1 to the Company’s Form 10-K filed on February 27, 2014 (SEC File No. 001-16503))31.1 Certification Pursuant to Rule 13a-14(a)* 31.2 Certification Pursuant to Rule 13a-14(a)* 32.1 Certification Pursuant to 18 USC. Section 1350*1350 (incorporated by reference to Exhibit 32.1 to the Company’s Form 10-K filed on February 27, 2014 (SEC File No. 001-16503))32.2 Certification Pursuant to 18 USC. Section 1350*101.INSXBRL Instance Document101.SCHXBRL Taxonomy Extension Schema Document101.CALXBRL Taxonomy Extension Calculation Linkbase Document101.DEFXBRL Taxonomy Extension Definition Linkbase Document101.LABXBRL Taxonomy Extension Label Linkbase Document101.PREXBRL Taxonomy Extension Presentation Linkbase Document1350 (incorporated by reference to Exhibit 32.2 to the Company’s Form 10-K filed on February 27, 2014 (SEC File No. 001-16503))
* | Filed herewith. |
† | Management contract or compensatory plan or arrangement. |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WILLIS GROUP HOLDINGS PLC (REGISTRANT) | ||||
By: | /s/ Michael K. Neborak | |||
Michael K. Neborak | ||||
Group Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: February 27,April 30, 2014
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