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~~ ☑Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ~~Yes~~ ☑Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of ‘large accelerated filer’, ‘accelerated filer’, ‘smaller reporting company’, and ‘emerging growth company’ in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of October ~~26, 2021,~~25, 2022, there were outstanding ~~124,606,097~~108,237,621 ordinary shares, nominal value $0.000304635 per share, of the registrant.

The following definitions apply throughout this quarterly report unless the context requires otherwise:

We have included in this document ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, the impact of the ~~COVID-19~~global pandemic on our business,~~impact of the termination of the business combination with Aon plc and the divestitures contemplated in connection therewith,~~ future capital expenditures, ongoing working capital efforts, future share repurchases, financial results (including our ~~revenue)~~revenue, costs or margins), the impact of changes to tax laws on our financial results, existing and evolving business strategies and acquisitions and dispositions, including the sale of Willis Re to Arthur J. Gallagher & Co. (‘Gallagher’), demand for our services and competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, our ability to successfully manage ongoing leadership, organizational and technology changes, including investments in improving systems and processes, our ability to implement and realize anticipated benefits of any cost-savings initiatives including the multi-year operational Transformation program, and plans and references to future successes, including our future financial and operating results, plans, objectives, expectations and intentions are forward-looking statements. Also, when we use words such as ‘may,’ ‘will,’ ‘would,’ ‘anticipate,’ ‘believe,’ ‘estimate,’ ‘expect,’ ‘intend,’ ‘plan,’ ‘continues,’ ‘seek,’ ‘target,’ ‘focus,’ ‘probably,’ or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.

There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including the following:

The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see Part I, Item 1A in our Annual Report on Form 10-K, and our subsequent filings with the SEC. Copies are available online at http://www.sec.gov or ~~www.willistowerswatson.com.~~www.wtwco.com.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this ~~document,~~Quarterly Report on Form 10-Q, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless the securities laws require us to do so. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.

Note 1 — Nature of Operations

Willis Towers Watson ~~plc~~public limited company is a leading global advisory, broking and solutions company that ~~helps clients around~~provides data-driven, insight-led solutions in the ~~world turn~~areas of people, risk ~~into a path for growth.~~and capital. The Company has more than ~~46,000 employees and services clients in~~44,000 colleagues serving more than 140 ~~countries.~~ countries and markets.

We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals.

Our risk management services include strategic risk consulting (including providing actuarial analysis), a variety of due diligence services, the provision of practical on-site risk control services (such as health and safety and property loss control consulting), advisory services, leading-edge technology solutions, and unparalleled analytical and ~~advisory services~~modeling capabilities (such as hazard ~~modeling and reinsurance optimization studies)~~modeling). We also assist our clients with planning for addressing incidents or crises when they occur. These services include contingency planning, security audits and product tampering plans.

We help our clients enhance business performance by delivering consulting services, technology and solutions that ~~optimize~~effectively deliver valuable benefits and ~~cultivate talent.~~create an engaging employee experience. Our services and solutions encompass such areas as employee benefits, total rewards, talent, wellbeing and benefits outsourcing. In addition, we provide investment advice to help our clients develop disciplined and efficient strategies to meet their investment goals and expand the power of capital.

As an insurance broker, we act as an intermediary between our clients and insurance carriers by advising on their risk management requirements, helping them to determine the best means of managing risk and negotiating and placing insurance with insurance carriers through our unrestricted access to the global ~~distribution network.~~insurance market.

We operate a private Medicare marketplace in the U.S. through which, along with our active employee marketplace, we help our clients move to a more sustainable economic model by capping and controlling the costs associated with healthcare benefits. We also provide direct-to-consumer sales of Medicare coverage.

We are not an insurance company, and therefore we do not underwrite insurable risks for our own account. We ~~believe our broad perspective allows us~~help sharpen strategies, enhance organizational resilience, motivate workforces and maximize performance to ~~see~~uncover opportunities for sustainable success.

Segment Reorganization

On January 1, 2022, WTW realigned to provide its comprehensive offering of services and solutions to clients across two business segments: Health, Wealth & Career (‘HWC’), and Risk & Broking (‘R&B’). These changes were made in conjunction with changes in the ~~critical intersections between talent, assets and ideas -~~WTW leadership team, including the ~~dynamic formula that drives business performance.~~

~~Termination of Proposed Combination with Aon plc~~

~~On March 9, 2020, WTW and Aon plc (‘Aon’) issued an announcement disclosing that the respective boards of directors of WTW and Aon had reached agreement on the terms~~appointment of a ~~recommended acquisition of WTW by Aon. Under~~new chief executive officer who succeeded the ~~terms~~prior CEO as the chief operating decision maker on that date. Prior to January 1, 2022, we operated across four segments: Human Capital and Benefits; Corporate Risk and Broking; Investment, Risk and Reinsurance; and Benefits Delivery and Administration. Following the realignment, the two new segments consist of the ~~agreement each WTW shareholder would receive 1.08 Aon ordinary shares for each WTW ordinary share. At~~following businesses:

•

The HWC segment includes businesses previously aligned under the ~~time~~Human Capital and Benefits segment, the Benefits Delivery and Administration segment, and the Investment business, which was previously under the Investment, Risk and Reinsurance segment.

•

The R&B segment includes businesses previously aligned under the Corporate Risk and Broking segment, as well as the Insurance Consulting and Technology business, which was previously under the Investment, Risk and Reinsurance segment.

In addition, effective January 1, 2022, the Company manages its businesses across three geographical areas: North America, Europe (including Great Britain) and International.

Certain Investment, Risk and Reinsurance businesses that were part of the ~~announcement, it was estimated that upon completion~~results from continuing operations in the prior-year period presented were divested during 2021. The revenue and income from operations for these businesses have been included as ‘divested businesses’ in the reconciliations between the total segment results and the consolidated results of the ~~combination, existing Aon shareholders would own approximately 63% and existing WTW shareholders would own approximately 37%~~Company. However, the results of the ~~combined company~~divested Willis Re treaty-reinsurance business are presented as discontinued operations and are therefore excluded from the divested businesses presented in the segment reconciliations.

Segment results herein are presented on a ~~fully diluted basis.~~

~~The transaction was approved by~~retrospective basis to reflect the ~~shareholders of both WTW~~reorganization. See Note 4 — Revenue, Note 5 — Segment Information, Note 6 — Restructuring Costs and ~~Aon during meetings of~~Note 8 — Goodwill and Other Intangible Assets for the respective shareholders held on August 26, 2020. On June 16, 2021, the U.S. Department of Justice filed suit in U.S. District Court in the District of Columbia against WTW and Aon, seeking to enjoin the proposed business combination between the two companies (among other relief). On July 26, 2021, WTW and Aon announced they had terminated the business combination agreement and that Aon had agreed to pay WTW $1 billion in connection with such termination, which was received by WTW on July 27, 2021 (the ‘Termination’ or the ‘Termination Agreement’). The $1 billion income receipt has been included in transaction and integration, net in the condensed consolidated statements of operations. Under the Termination Agreement, WTW and Aon on behalf of themselves and certain other related and affiliated parties, each agreed to release the other from all claims and actions arising out of or related to the business combination agreement and the transactions contemplated thereby, subject to certain exceptions.Company's segment-based presentations.

Note 2 — Basis of Presentation ~~and Recent Accounting Pronouncements~~

Basis of Presentation

The accompanying unaudited quarterly condensed consolidated financial statements of ~~Willis Towers Watson~~WTW and our subsidiaries are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore docertain footnote disclosures have been condensed or omitted from these financial statements as they are not ~~include all~~required for interim reporting under U.S. GAAP. Certain amounts on the condensed consolidated statements of cash flows have been revised from their prior period classifications. See Note 19 - Supplemental Disclosures of Cash Flow Information for more information as to the nature of the ~~information~~revision and ~~footnotes required by U.S. GAAP.~~ ~~We have reclassified certain prior period amounts to conform to~~ the ~~current period presentation due to the recognition of discontinued operations and assets and liabilities as held-for-sale (see below for further discussion).~~ amounts. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial statements and results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The condensed

consolidated financial statements should be read together with the Company’s Annual Report on Form 10-K, filed with the SEC on February ~~23, 2021,~~24, 2022, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov.

The results of operations for the three and nine months ended September 30, ~~2021~~2022 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities. The results reflect certain estimates and assumptions made by management, including those estimates used in calculating acquisition consideration and fair value of tangible and intangible assets and liabilities, professional liability claims, estimated bonuses, valuation of billed and unbilled receivables, and anticipated tax liabilities that affect the amounts reported in the condensed consolidated financial statements and related notes.

Risks and Uncertainties ~~Related to~~of the Economic Environment

Beginning with the COVID-19 ~~Pandemic and the Related Economic Environment~~

~~The COVID-19~~ pandemic, ~~has had an~~there have been adverse ~~impact on~~changes in global commercial activity, particularly onin the global supply chain and workforce availability, and ~~has contributed to~~ significant volatility in the global financial markets including, among other effects, occasional declines in the equity markets, changes in interest rates and reduced liquidity on a global basis. ~~With regard~~

Supply and labor market disruptions caused by COVID-19, accommodative monetary and fiscal policy and the Russian invasion of Ukraine have contributed to significant inflation in many of the markets in which we operate. This impacts not only the costs to attract and retain employees but also other costs to run and invest in our business. If our costs grow significantly in excess of our ability to raise revenue, our margins and results of operations may be materially and adversely impacted and we may not be able to achieve our strategic and financial objectives.

Although we believe we have adapted to the ~~effects on our own business operations~~unique challenges posed by COVID-19 surrounding how and those of our clients, suppliers and other third parties with whom we interact, the Company has regularly considered the impact of COVID-19 and the wider economic results on our business, taking into account our business resilience and continuity plans, financial modeling and stress testing of liquidity and financial resources.

Generally, the COVID-19 pandemic did not have a material adverse impact on our overall financial results during 2020 or on our results through the third quarter of 2021; however, during 2020 and through the first quarter of 2021, the COVID-19 pandemic had a negative impact on our revenue growth, primarily in our businesses that are discretionary in nature. We saw an increased demand for these services, which improved revenue growth, in the second and third quarters of 2021. We believe this positive trend could continue for the remainder of the year with some variability based on further disruptions to the supply chain, workforce availability, vaccination rates and further social-distancing orders in jurisdictions where we do ~~business.~~

~~We have considered this outlook as part of~~our work, we are also impacted by the significant estimates and assumptions that are inherent in our financial statements, including the collectability of billed and unbilled receivables, the estimation of revenue, and the fair value of our reporting units, tangible and intangible assets and contingent consideration. Although the primary revenue impact of the pandemic has been on certain discretionary lines of business, non-discretionary lines of business have also been, to some extent, adversely affected and may be adversely affected in the future. Further, reduced economic activity or disruption in insurance markets could reduce the demand for or the extent of insurance coverage. Also, the increased frequency and severity of coverage disputes between our clients and (re)insurers arising out of the pandemic could increase our professional liability risk. In 2021, global labor market shifts have become more pronounced, having a negative effect on workforce availability, which could hamper our ability to grow our capacity on pace with increasing demand for our services. We expect the market for talent to remain highly competitive for at least the next several months. We will continue to monitor the situation and assess any implications to our business and our stakeholders.

Note 3— Acquisitions and Divestitures

Acquisitions

The ~~extent~~Company completed acquisitions during the nine months ended September 30, 2022 for cash payments of $109 million and contingent considerations with estimated fair values totaling $22 million.

Divestment of Russian Business

During the first quarter of 2022, WTW announced its intention to ~~which COVID-19 impacts our~~transfer ownership of its Russian subsidiaries to local management who will operate independently in the Russian market. Due to the sanctions and prohibitions on certain types of business and ~~financial position will depend~~activities, WTW deconsolidated its Russian entities on ~~future developments, which are difficult~~March 14, 2022. The transfer of its Russian subsidiaries to ~~predict. These future developments may include~~local management was completed on the ~~severity and scope of the COVID-19 outbreak, which may unexpectedly change or worsen,~~agreed-upon terms on July 18, 2022, and the ~~types~~transfer was registered in Russia on July 25, 2022. The deconsolidation in the first quarter of 2022 resulted in a loss of $57 million, which includes an allocation of Risk & Broking goodwill, and duration of measures imposed by governmental authorities to contain the virus or address its impact. We continue to expect that the COVID-19 pandemic and the related impacts on the wider economic environment will negatively impact our revenue and operating results in fiscal 2021. We believe that these trends and uncertainties are similar to those faced by other comparable registrantswas recognized as a ~~result~~loss on disposal of ~~the pandemic~~.

~~Recent Accounting Pronouncements~~

~~Not Yet Adopted~~

~~There are no pending accounting pronouncements that are expected to have~~ a ~~significant impact~~business within other income, net on our condensed consolidated ~~financial statements.~~

~~Adopted~~

~~In December 2019,~~statement of comprehensive income. Further, certain Russian insurance contracts were placed historically by our U.K. brokers into the ~~FASB issued ASU No. 2019-12,~~ ~~Simplifying~~London market, the ~~Accounting for Income Taxes~~,majority of which ~~clarifies~~were under multi-year terms resulting in both current and ~~amends existing guidance,~~non-current accounts receivables. Total net assets impaired, including ~~removing certain exceptions~~accounts receivable balances related to our Russian business that are held outside of our Russian entities, were $81 million recorded during the ~~general principles of accounting for income taxes. Some of the changes must be applied~~three months ended March 31, 2022 in other operating expenses on ~~a retrospective or modified retrospective basis while others must be applied on a prospective basis. The Company adopted this guidance as it became effective on January 1, 2021 without any impact to~~ our condensed consolidated ~~financial statements.~~statement of comprehensive income.

~~Note 3~~13~~— Divestitures~~

Willis Re Divestiture

~~As part of the potential combination with Aon,~~On August 13, 2021, the Company entered into ana definitive agreement ~~with~~to sell its treaty-reinsurance business (‘Willis Re’) to Arthur J. Gallagher & Co. (‘Gallagher’), a leading global provider of insurance, risk management and consulting services, ~~to sell its treaty-reinsurance business (‘Willis Re’)~~

and certain of the Company’s corporate risk and broking and health and benefit businesses. Upon termination of the Aon combination, the definitive agreement with Gallagher automatically terminated in accordance with its terms.

~~On August 13, 2021, the Company entered into a new definitive agreement to sell Willis Re to Gallagher~~ for total upfront cash consideration of ~~$3.25~~$3.25 billion plus an earnout payable in 2025 of up to ~~$750~~$750 million in cash, subject to certain adjustments. The ~~completion of the~~ deal iswas subject to required regulatory approvals and clearances, as well as other customary closing conditions, and was completed on December 1, 2021 (‘Principal Closing’). Although the majority of the Willis Re businesses transferred to Gallagher at Principal Closing, the assets and liabilities of certain Willis Re businesses were not transferred to Gallagher at the time due to local territory restrictions (‘Deferred Closing’). The Deferred Closing for all but one business was completed during the second quarter of 2022, and all net earnings of the Deferred Closing businesses accumulated between the Principal Closing and Deferred Closing remained payable to Gallagher at June 30, 2022 and September 30, 2022. The Company recognized a preliminary pre-tax gain of $2.3 billion upon completion of the sale in 2021, and during the second quarter of 2022, WTW recognized a $60 million reduction to the pre-tax gain related to an updated estimate of the working capital transferred upon disposal. The Company recognized the final allocation of the proceeds and related tax expense, as well as an adjustment of certain indemnities for the three months ended September 30, 2022. These amounts as well as the amounts payable with respect to the settled Deferred Closing businesses were remitted to Gallagher in October 2022. The gain is ~~expected~~subject to tax in certain jurisdictions, mainly in the U.S., and is predominantly tax-exempt in the U.K.

In connection with the transaction, the Company reclassified the results of its Willis Re operations as discontinued operations on its condensed consolidated statements of comprehensive income and reclassified Willis Re assets and liabilities as held for sale on its condensed consolidated balance sheets. The condensed consolidated cash flow statements were not adjusted for the divestiture. Willis Re was previously included in the Company's former Investment, Risk and Reinsurance segment. As noted above, the amounts owed as part of the Deferred Closing continue to be ~~completed no later than~~presented as held for sale on the ~~end~~condensed consolidated balance sheets at September 30, 2022 and December 31, 2021, and the results of these businesses following the ~~first quarter~~Principal Closing until their respective Deferred Closing dates have been included in income from discontinued operations on the condensed consolidated statements of ~~2022.~~ comprehensive income.

The Company will account for the earnout as a gain contingency and therefore ~~will~~did not record any receivables upon close. Rather, the earnout will be recognized in the Company’s condensed consolidated financial statements, if it is received, in 2025.

~~After the divestiture is complete, upon satisfaction or waiver of the closing conditions, a~~A number of services are continuing under a cost reimbursement Transition Services Agreement (‘TSA’) in which WTW is providing Gallagher support including real estate leases, information technology, payroll, human resources and accounting. These services are expected to ~~continue~~be provided for a period not to exceed two years from the Principal Closing. Fees earned under the TSA were $8 million and $31 million during the three and nine months ended September 30, 2022, respectively, and have been recognized as a ~~Transition Services Agreement.~~

~~In connection with~~reduction to the ~~pending transaction,~~costs incurred to service the ~~Company has reclassified~~TSA and are included in continuing operations within other operating expenses on the ~~results of its Willis Re operations as discontinued operations on its~~ condensed consolidated statements of comprehensive ~~income and has reclassified Willis Re assets and liabilities~~income. Costs incurred to service the TSA are expected to be reduced as ~~held~~part of the Company’s Transformation program (see Note 6 — Restructuring Costs for ~~sale on its condensed consolidated balance sheets. Willis Re was previously included in~~a description of the ~~Investment, Risk and Reinsurance segment.~~program) as quickly as possible when the services are no longer required by Gallagher.

The following selected financial information relates to the operations of Willis Re for the periods presented:


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020		2021		2020		2022			2021			2022			2021
Revenue from discontinued operations	$	111		$	112	$	668	$	642	$	10		$	111		$	50		$	668
Costs of providing services
Salaries and benefits		97			93		291		281		5			97			13			291
Other operating expenses		29			12		60		43		—			29			1			60
Depreciation and amortization		—			—		1		2
Amortization											—			—			—			1
Total costs of providing services		126			105		352		326		5			126			14			352
Other income, net		—			—		1		3		—			—			—			1
(Loss)/income from discontinued operations before income taxes	$	(15	)	$	7	$	317	$	319
Income/(loss) from discontinued operations before income taxes											5			(15	)		36			317
Adjustment to gain on disposal of Willis Re											(2	)		—			(65	)		—
Benefit from/(provision for) income taxes											5			3			7			(70	)
Net income payable to Gallagher on Deferred Closing											—			—			(5	)		—
Income/(loss) from discontinued operations, net of tax										$	8		$	(12	)	$	(27	)	$	247

The expense amounts reflected above represent only the direct costs attributable to the Willis Re business and exclude allocations of corporate costs that will be retained following the sale. Neither the discontinued operations presented above, nor the unallocated corporate costs, reflect the impact of any cost reimbursement that will be received under ~~a Transition Services Agreement following~~ the ~~closing of the transaction upon the satisfaction or waiver of closing conditions.~~TSA.

~~The following table summarizes the total assets and liabilities of Willis Re~~14

Amounts classified as held for sale within our condensed consolidated balance sheets at both September 30, 2022 and December 31, 2021 are related to amounts payable as part of the ~~balance sheet dates presented:~~

September 30,
2021

December 31,
2020

Assets held for sale:

Cash and cash equivalents

$
53

$
50

Fiduciary assets

3,853

3,157

Accounts receivable, net

199

147

Fixed assets, net

1

1

Goodwill

812

812

Other intangible assets, net

8

8

Right-of-use assets

1

1

Other assets

34

40

Total assets held for sale

$
4,961

$
4,216

Liabilities held for sale:

Fiduciary liabilities

$
3,853

$
3,157

Deferred revenue and accrued expenses

101

118

Liability for pension benefits

1

2

Lease liabilities

1

1

Provision for liabilities

1

1

Other liabilities

163

126

Total liabilities held for sale

$
4,120

$
3,405

Deferred Closing as well as the final purchase price adjustment at September 30, 2022. Certain amounts included in the condensed consolidated balance sheets have been excluded from the held-for-sale balances disclosed since the assets are not transferring under the terms of the sale agreement, and instead will be settled by the Company. At September 30, ~~2021~~2022 and December 31, ~~2020, these excluded~~2021, the amounts of significant assets and liabilities related to the Willis Re businesses which were not transferred in the sale and are ~~comprised~~therefore not classified as held for sale on the condensed consolidated balance sheets are $3.8 billion and $2.6 billion of fiduciary assets ~~of $3.8 billion~~ and ~~$3.0 billion, respectively,~~liabilities, $62 million and ~~their corresponding equal fiduciary liabilities, and~~$71 million of accounts receivable ~~net balances of $155~~and $137 million and ~~$100~~$91 million of other current liabilities, respectively. Other than indemnified amounts, these amounts will be settled over time.

In October 2022, the Company transferred the amounts owed to Gallagher in relation to the completed Deferred Closing businesses, final purchase price adjustments and indemnities.

Miller Divestiture

On March 1, 2021, the Company completed the transaction to sell its U.K.-based, majority-owned wholesale subsidiary Miller for final total consideration of GBP 623 million ($818 million), which includes amounts paid to the minority shareholder. The ~~$356~~$356 million net tax-exempt gain on the sale was included in Other income, net in the condensed consolidated statement of comprehensive income ~~for~~during the nine months ended September 30, 2021. Prior to disposal, Miller was included within the Company's former Investment, Risk and Reinsurance segment.

~~Max Matthiessen Divestiture~~Other Disposals

~~In September 2020, the~~The Company completed other disposals during the ~~transaction to sell its Swedish majority-owned subsidiary MM Holding AB (‘Max Matthiessen’)~~nine months ended September 30, 2022 for ~~total consideration~~cash proceeds of ~~SEK 2.3 billion ($262 million) plus certain other adjustments, resulting in~~$1 million and estimated non-cash proceeds of $43 million for a ~~tax-exempt~~net gain on ~~the sale~~disposal of $86 million, which was included in Other income, net in the consolidated statement of comprehensive income during the year ended December 31, 2020. Of the total consideration, the Company financed a SEK 600 million ($68 million) note repayable by the purchaser. The note has no fixed term but is repayable subject to certain terms and conditions and bears an interest rate that could range from 5% to 10%, increasing the longer the note remains outstanding. This note receivable is included in Other non-current assets in the condensed consolidated balance sheet. Prior to disposal, Max Matthiessen was included within the Investment, Risk and Reinsurance segment.$46 million.

Note 4 — Revenue

All periods presented have been recast to exclude the revenue and receivables of Willis Re, which have been reclassified as discontinued operations and assets held for sale, respectively, on the Company’s condensed consolidated financial statements (see Note 3 – Divestitures).

Disaggregation of Revenue

The Company reports revenue by segment in Note 5 — Segment Information. The following tables present revenue by service offering and segment, as well as reconciliations to total revenue for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. Along with reimbursable expenses and other, total revenue by service offering represents our revenue from customer contracts. The prior year segment information has been retrospectively adjusted to conform to the current year presentation.


	Three Months Ended September 30,
	HWC				R&B				Divested Businesses				Corporate (i)					Total
	2022		2021		2022		2021		2022		2021		2022		2021			2022		2021
Broking	$	207	$	189	$	606	$	621	$	—	$	8	$	1	$	—		$	814	$	818
Consulting		616		621		85		92		—		—		2		2			703		715
Outsourced administration		222		245		18		21		—		—		—		—			240		266
Other		111		109		38		38		—		—		—		1			149		148
Total revenue by service offering		1,156		1,164		747		772		—		8		3		3			1,906		1,947
Reimbursable expenses and other (i)		16		13		2		2		—		—		4		(10	)		22		5
Total revenue from customer contracts	$	1,172	$	1,177	$	749	$	774	$	—	$	8	$	7	$	(7	)	$	1,928	$	1,952
Interest and other income (ii)		6		4		18		15		—		—		1		2			25		21
Total revenue	$	1,178	$	1,181	$	767	$	789	$	—	$	8	$	8	$	(5	)	$	1,953	$	1,973


	Nine Months Ended September 30,
	HWC				R&B				Divested Businesses				Corporate (i)					Total
	2022		2021		2022		2021		2022		2021		2022		2021			2022		2021
Broking	$	714	$	645	$	1,963	$	2,026	$	—	$	62	$	8	$	—		$	2,685	$	2,733
Consulting		1,886		1,910		280		292		—		6		7		6			2,173		2,214
Outsourced administration		696		754		61		69		—		—		—		—			757		823
Other		237		257		147		140		—		—		—		3			384		400
Total revenue by service offering		3,533		3,566		2,451		2,527		—		68		15		9			5,999		6,170
Reimbursable expenses and other (i)		43		40		7		5		—		—		3		(10	)		53		35
Total revenue from customer contracts	$	3,576	$	3,606	$	2,458	$	2,532	$	—	$	68	$	18	$	(1	)	$	6,052	$	6,205
Interest and other income (ii)		32		14		57		69		—		—		3		4			92		87
Total revenue	$	3,608	$	3,620	$	2,515	$	2,601	$	—	$	68	$	21	$	3		$	6,144	$	6,292

Three Months Ended September 30,

HCB

CRB

IRR

BDA

Corporate ⁽ⁱ⁾

Total

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Broking

$
68

$
62

$
621

$
592

$
11

$
71

$
119

$
100

$
—

$
—

$
819

$
825

Consulting

561

529

39

31

111

97

—

—

2

1

713

658

Outsourced administration

122

126

17

16

4

4

123

126

—

—

266

272

Other

97

77

4

4

46

48

—

—

1

1

148

130

Total revenue by service offering

848

794

681

643

172

220

242

226

3

2

1,946

1,885

Reimbursable expenses and other ⁽ⁱ⁾

10

10

—

—

2

1

2

2

(9
)

(10
)

5

3

Total revenue from customer
contracts

$
858

$
804

$
681

$
643

$
174

$
221

$
244

$
228

$
(6
)

$
(8
)

$
1,951

$
1,888

Interest and other income ⁽ⁱⁱ⁾

4

2

16

6

—

—

—

—

2

1

22

9

Total revenue

$
862

$
806

$
697

$
649

$
174

$
221

$
244

$
228

$
(4
)

$
(7
)

$
1,973

$
1,897

(i)

Reimbursable expenses and other, as well as Corporate revenue, are excluded from segment revenue, but included in total revenue on the condensed consolidated statements of comprehensive income. Amounts included in Corporate revenue may include eliminations and impacts from hedged revenue transactions.

(ii)

Interest and other income is included in segment revenue and total revenue, however it has been presented separately in the above tables because it does not arise directly from contracts with customers. In 2022, both HWC’s and R&B’s interest and other income resulted primarily from book-of-business settlements. For HWC, these amounts totaled $2 million and $19 million, respectively, for the three and nine months ended September 30, 2022. For R&B, these amounts totaled $11 million and $41 million, respectively, for the three and nine months ended September 30, 2022. In the three and nine months ended September 30, 2021, HWC had no material settlements, and R&B had settlements totaling $12 million and $59 million, respectively.

Nine Months Ended September 30,

HCB

CRB

IRR

BDA

Corporate ⁽ⁱ⁾

Total

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Broking

$
248

$
216

$
2,026

$
1,877

$
67

$
238

$
391

$
288

$
—

$
—

$
2,732

$
2,619

Consulting

1,732

1,642

128

118

348

282

—

—

6

4

2,214

2,046

Outsourced administration

377

376

58

57

12

11

377

378

—

—

824

822

Other

196

165

12

6

188

185

—

—

3

3

399

359

Total revenue by service offering

2,553

2,399

2,224

2,058

615

716

768

666

9

7

6,169

5,846

Reimbursable expenses and other ⁽ⁱ⁾

33

36

1

1

4

6

6

7

(9
)

2

35

52

Total revenue from customer
contracts

$
2,586

$
2,435

$
2,225

$
2,059

$
619

$
722

$
774

$
673

$
—

$
9

$
6,204

$
5,898

Interest and other income ⁽ⁱⁱ⁾

10

14

71

31

—

—

3

—

4

3

88

48

Total revenue

$
2,596

$
2,449

$
2,296

$
2,090

$
619

$
722

$
777

$
673

$
4

$
12

$
6,292

$
5,946

~~______________~~

~~(i)~~

~~(ii)~~

Interest and other income is included in segment revenue and total revenue. However, it has been presented separately in the above tables because it does not arise directly from contracts with customers. The significant increase in CRB’s interest and other income resulted from book-of-business settlements.

The following tables present revenue by the geography where our work is performed for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. Reconciliations to total revenue on our condensed consolidated statements of comprehensive income and to segment revenue are shown in the ~~tables~~table above. The prior year geographic information has been retrospectively adjusted to conform to the current year presentation.


	Three Months Ended September 30,																								Three Months Ended September 30,
	HCB				CRB				IRR				BDA				Corporate				Total				HWC				R&B				Divested Businesses				Corporate				Total
	2021		2020		2021		2020		2021		2020		2021		2020		2021		2020		2021		2020		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
North America	$	485	$	465	$	310	$	287	$	45	$	39	$	239	$	224	$	2	$	1	$	1,081	$	1,016	$	766	$	748	$	326	$	329	$	—	$	5	$	2	$	2	$	1,094	$	1,084
Great Britain		137		120		143		138		86		117		—		—		—		—		366		375
Western Europe		135		129		116		112		18		44		—		—		1		1		270		286
Europe																										285		312		297		319		—		3		1		1		583		635
International		91		80		112		106		23		20		3		2		—		—		229		208		105		104		124		124		—		—		—		—		229		228
Total revenue by geography	$	848	$	794	$	681	$	643	$	172	$	220	$	242	$	226	$	3	$	2	$	1,946	$	1,885	$	1,156	$	1,164	$	747	$	772	$	—	$	8	$	3	$	3	$	1,906	$	1,947


	Nine Months Ended September 30,
	HWC				R&B				Divested Businesses				Corporate				Total
	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
North America	$	2,301	$	2,258	$	936	$	922	$	—	$	15	$	6	$	6	$	3,243	$	3,201
Europe		931		1,018		1,128		1,201		—		53		8		3		2,067		2,275
International		301		290		387		404		—		—		1		—		689		694
Total revenue by geography	$	3,533	$	3,566	$	2,451	$	2,527	$	—	$	68	$	15	$	9	$	5,999	$	6,170

Nine Months Ended September 30,

HCB

CRB

IRR

BDA

Corporate

Total

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

North America

$
1,430

$
1,403

$
865

$
816

$
136

$
117

$
760

$
660

$
7

$
5

$
3,198

$
3,001

Great Britain

427

363

471

435

343

401

—

—

—

—

1,241

1,199

Western Europe

444

404

521

483

69

139

—

—

2

2

1,036

1,028

International

252

229

367

324

67

59

8

6

—

—

694

618

Total revenue by geography

$
2,553

$
2,399

$
2,224

$
2,058

$
615

$
716

$
768

$
666

$
9

$
7

$
6,169

$
5,846

Contract Balances

The Company reports accounts receivable, net on the condensed consolidated balance sheet, which includes billed and unbilled receivables and current contract assets. In addition to accounts receivable, net, the Company had the following non-current contract assets and deferred revenue balances at September 30, ~~2021~~2022 and December 31, ~~2020:~~2021:

	September 30, 2021		December 31, 2020
Billed receivables, net of allowance for doubtful accounts of $44 million and $40 million	$	1,360	$	1,589
					September 30, 2022		December 31, 2021
Billed receivables, net of allowance for doubtful accounts of $47 million and $45 million					$	1,207	$	1,504
Unbilled receivables		511		445		451		431
Current contract assets		194		374		226		435
Accounts receivable, net	$	2,065	$	2,408	$	1,884	$	2,370
Non-current accounts receivable, net	$	23	$	34	$	44	$	23
Non-current contract assets	$	431	$	327	$	620	$	532
Deferred revenue	$	636	$	547	$	604	$	576

During the three and nine months ended September 30, ~~2021,~~2022, revenue of ~~$39~~$53 million and ~~$408~~$363 million, respectively, was recognized that was reflected as deferred revenue at December 31, ~~2020.~~2021. During the three months ended September 30, ~~2021,~~2022, revenue of ~~$262~~$232 million was recognized that was reflected as deferred revenue at June 30, ~~2021.~~2022.

During the three and nine months ended September 30, ~~2021,~~2022, the Company recognized revenue of ~~$16~~$1 million and ~~$62~~$6 million, respectively, related to performance obligations satisfied prior to ~~2021.~~2022.

Performance Obligations

The Company has contracts for which performance obligations have not been satisfied as of September 30, ~~2021~~2022 or have been partially satisfied as of this date. The following table shows the expected timing for the satisfaction of the remaining performance obligations. This table does not include contract renewals or variable consideration, which was excluded from the transaction prices in accordance with the guidance on constraining estimates of variable consideration.

In addition, in accordance with ASC 606, Revenue From Contracts With Customers (‘ASC 606’), the Company has elected not to disclose the remaining performance obligations when one or both of the following circumstances apply:

•

Performance obligations which are part of a contract that has an original expected duration of less than one year, and

•

Performance obligations satisfied in accordance with ASC 606-10-55-18 (‘right to invoice’).


	Remainder of 2022		2023		2024 onward		Total
Revenue expected to be recognized on contracts as of September 30, 2022	$	181	$	695	$	900	$	1,776

•

~~Performance obligations which are part of a contract that has an original expected duration of less than one year, and~~

•

~~Performance obligations satisfied in accordance with ASC 606-10-55-18 (‘right to invoice’).~~

Remainder of 2021

2022

2023 onward

Total

Revenue expected to be recognized on contracts as of September 30, 2021

$
174

$
546

$
788

$
1,508

Since most of the Company’s contracts are cancellable with less than one year’s notice, and have no substantive penalty for cancellation, the majority of the Company’s remaining performance obligations as of September 30, ~~2021~~2022 have been excluded from the table above.

Note 5 — Segment Information

~~Willis Towers Watson~~WTW has 4two reportable operating segments or business areas:

•

~~Human Capital and Benefits (‘HCB’)~~

•

Health, Wealth & Career (‘HWC’)

•

~~Corporate Risk and Broking (‘CRB’~~•

Risk & Broking (‘R&B’)

•

~~Investment, Risk and Reinsurance (‘IRR’)~~

•

~~Benefits Delivery and Administration (‘BDA’)~~

~~Willis Towers Watson’s~~WTW’s chief operating decision maker is its chief executive officer. We determined that the operational data used by the chief operating decision maker is at the segment level. Management bases strategic goals and decisions on these segments and the data presented below is used to assess the adequacy of strategic decisions and the methods of achieving these strategies and related financial results. Management evaluates the performance of its segments and allocates resources to them based on net operating income on a pre-tax basis.

The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities.

~~All periods presented have been recast to exclude the operating results of Willis Re, which was included within IRR and has been reclassified to discontinued operations (see~~ ~~Note 3 – Divestitures~~).

The following table presents segment revenue and segment operating income for our reportable segments for the three months ended September 30, ~~2021~~2022 and ~~2020.~~2021. The prior year information has been retrospectively adjusted to conform to the current year presentation.


	Three Months Ended September 30,																						Three Months Ended September 30,
	HCB				CRB				IRR				BDA						Total				HWC				R&B				Total
	2021		2020		2021		2020		2021		2020		2021			2020			2021		2020		2022		2021		2022		2021		2022		2021
Segment revenue	$	852	$	796	$	697	$	649	$	172	$	220	$	242		$	226		$	1,963	$	1,891	$	1,162	$	1,168	$	765	$	787	$	1,927	$	1,955

Segment operating income/(loss)	$	242	$	209	$	114	$	81	$	22	$	20	$	(19	)	$	(11	)	$	359	$	299
Segment operating income																							$	236	$	241	$	105	$	138	$	341	$	379

The following table presents segment revenue and segment operating income for our reportable segments for the nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. The prior year information has been retrospectively adjusted to conform to the current year presentation.


	Nine Months Ended September 30,																						Nine Months Ended September 30,
	HCB				CRB				IRR				BDA						Total				HWC				R&B				Total
	2021		2020		2021		2020		2021		2020		2021			2020			2021		2020		2022		2021		2022		2021		2022		2021
Segment revenue	$	2,563	$	2,413	$	2,295	$	2,089	$	615	$	716	$	771		$	666		$	6,244	$	5,884	$	3,565	$	3,580	$	2,508	$	2,596	$	6,073	$	6,176

Segment operating income/(loss)	$	654	$	582	$	457	$	343	$	108	$	108	$	(22	)	$	(31	)	$	1,197	$	1,002
Segment operating income																							$	710	$	701	$	465	$	545	$	1,175	$	1,246

The following table presents reconciliations of the information reported by segment to the Company’s condensed consolidated statements of comprehensive income amounts reported for the three and nine months ended September 30, 2022 and 2021.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenue:
Total segment revenue	$	1,927		$	1,955		$	6,073		$	6,176
Divested businesses (i)		—			8			—			68
Reimbursable expenses and other		26			10			71			48
Revenue	$	1,953		$	1,973		$	6,144		$	6,292

Total segment operating income	$	341		$	379		$	1,175		$	1,246
Divested businesses (i)		—			(20	)		—			(49	)
Impairment (ii)		—			—			(81	)		—
Amortization		(71	)		(85	)		(239	)		(285	)
Restructuring costs		(9	)		—			(71	)		—
Transaction and transformation, net (iii)		(50	)		952			(108	)		877
Unallocated, net (iv)		(57	)		(95	)		(206	)		(277	)
Income from operations		154			1,131			470			1,512
Interest expense		(54	)		(50	)		(154	)		(161	)
Other income, net		85			105			205			617
Income from continuing operations before income taxes	$	185		$	1,186		$	521		$	1,968

(i)

Represents the revenue and income from operations of certain Investment, Risk and Reinsurance businesses which were divested in 2021 and ~~2020.~~

not classified as discontinued operations.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Revenue:

Total segment revenue

$
1,963

$
1,891

$
6,244

$
5,884

Reimbursable expenses and other

10

6

48

62

Revenue

$
1,973

$
1,897

$
6,292

$
5,946

Total segment operating income

$
359

$
299

$
1,197

$
1,002

Amortization

(85
)

(108
)

(285
)

(347
)
Transaction and integration, net ⁽ⁱ⁾

952

(42
)

877

(65
)
Unallocated, net ⁽ⁱⁱ⁾

(95
)

(83
)

(277
)

(310
)
Income from operations

1,131

66

1,512

280

Interest expense

(50
)

(61
)

(161
)

(184
)
Other income, net

105

156

617

321

INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES

$
1,186

$
161

$
1,968

$
417

(ii)

Represents the impairment related to the net assets of our Russian business that are held outside of our Russian entities (see Note 3 — Acquisitions and Divestitures for further information).

(iii)

In 2022, in addition to legal fees and other transaction costs, includes primarily consulting fees related to the Transformation program (see Note 6 — Restructuring Costs). In 2021, includes the $1 billion income receipt related to the termination of, and fees related to, our then-proposed Aon combination.

(iv)

~~(i)~~

Includes mainly transaction costs related to the proposed Aon combination prior to its termination. For the three and nine months ended September 30, 2021, includes the $1 billion income receipt related to the termination of the proposed Aon transaction.

~~(ii)~~

Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes. Additionally, these costs also include corporate costs that had previously been allocated to Willis Re, due to the reclassification of the Willis Re results as discontinued operations.

The Company does not currently provide asset information by reportable segment as it does not routinely evaluate the total asset position by segment.

Note 7 — Income Taxes

Provision for income taxes ~~on continuing operations~~for the three and nine months ended September 30, 2022 was $1 million and $63 million, respectively, compared to $267 million and $386 million for the three and nine months ended September 30, 2021, ~~was $267 million~~respectively. The effective tax rates were 0.7% and ~~$386 million, respectively, compared to $42 million and $133 million~~12.1% for the three and nine months ended September 30, ~~2020, respectively. The effective tax rates were 22.5%~~2022, respectively, and ~~19.6%~~22.5% and 19.6% for the three and nine months ended September 30, 2021, ~~respectively, and 26.6% and 31.9% for the three and nine months ended September 30, 2020,~~ respectively. These effective tax rates are calculated using extended values from ~~our~~the Company’s condensed consolidated statements of comprehensive income and are, therefore, more precise tax rates than can be calculated from rounded values. The ~~current-quarter~~prior-year quarter’s effective tax rate was higher due to the tax expense associated with the income receipt related to the termination of our then-proposed combination with Aon. Additionally, the current-quarter’s effective tax rate includes ~~a $250 million estimated~~discrete tax ~~expense~~benefits related to amending the ~~income receipt of the termination payment, however the prior-year effective~~Company’s U.S. federal and state tax ~~rate for the three months ended September 30, 2020 was higher due~~returns to an additional deferred tax expense related to the enacted U.K. statutory tax rate change. The prior-year effective tax rate for the nine months ended September 30, 2020 was higher due to additional tax expense recognized in connection with the temporary provisions ofchange certain elections available under the Coronavirus Aid, Relief, and Economic Security (‘CARES’) ~~Act.~~

The amounts above exclude the benefit from income tax attributable to discontinued operations of $3 million and the provision for income tax expense of $70 million for the three and nine months ended September 30, 2021, respectively,Act as well as ~~the provisions for income~~excess tax ~~expense of $4 million and $66 million for the three and nine months ended September 30, 2020, respectively.~~benefits on executive share-based compensation.

The Company recognizes deferred tax balances related to the undistributed earnings of subsidiaries when it expects that it will recover those undistributed earnings in a taxable manner, such as through receipt of dividends or sale of the investments. Historically, ~~we have~~the Company has not provided taxes on cumulative earnings of ~~our~~its subsidiaries that have been reinvested indefinitely. As a result of ~~our~~its plans to restructure or distribute accumulated earnings of certain foreign operations, ~~we have~~the Company has recorded an estimate of ~~foreign~~non-US withholding and

state income taxes. ~~In addition, in connection with~~However, the Willis Re divestiture, we have recorded an estimated deferred tax expense for certain Willis Re subsidiaries whose outside basis differences are no longer considered indefinitely reinvested. However, we assertCompany asserts that the historical cumulative earnings of ~~our~~its other subsidiaries are reinvested indefinitely and therefore dodoes not provide deferred tax liabilities on these amounts.

The Company records valuation allowances against net deferred tax assets based on whether it is more likely than not that the deferred tax assets will be realized. ~~We have~~It has liabilities for uncertain tax positions under ASC 740, Income Taxes,of ~~$45~~$31 million, excluding interest

and penalties. The Company believes the outcomes that are reasonably possible within the next 12 months may result in a reduction in the liability for uncertain tax positions of approximately $5$3 million to $9$4 million, excluding interest and penalties.

Note 78 — Goodwill and Other Intangible Assets

Goodwill

The components of goodwill are outlined below for the nine months ended September 30, ~~2021:~~2022. The prior year segment information has been retrospectively adjusted to conform to the current year presentation.

	HCB			CRB			IRR			BDA		Total
Balance at December 31, 2020:
Goodwill, gross ⁽ⁱ⁾	$	4,346		$	2,378		$	882		$	3,278	$	10,884
															HWC			R&B			Total
Balance at December 31, 2021:
Goodwill, gross															$	7,904		$	2,771		$	10,675
Accumulated impairment losses		(130	)		(362	)		0			0		(492	)		(130	)		(362	)		(492	)
Goodwill, net - December 31, 2020		4,216			2,016			882			3,278		10,392
Goodwill, net - December 31, 2021																7,774			2,409			10,183
Goodwill acquired																—			103			103
Goodwill disposals		0			(7	)		(188	)		0		(195	)		—			(18	)		(18	)
Foreign exchange		(28	)		(25	)		2			0		(51	)		(62	)		(117	)		(179	)
Balance at September 30, 2021:
Balance at September 30, 2022:
Goodwill, gross		4,318			2,346			696			3,278		10,638			7,842			2,739			10,581
Accumulated impairment losses		(130	)		(362	)		0			0		(492	)		(130	)		(362	)		(492	)
Goodwill, net - September 30, 2021	$	4,188		$	1,984		$	696		$	3,278	$	10,146
Goodwill, net - September 30, 2022															$	7,712		$	2,377		$	10,089

~~(i)~~

Excludes $812 million of goodwill associated with our IRR segment, which has been reclassified as assets held for sale on our condensed consolidated balance sheets at both September 30, 2021 and December 31, 2020 in conjunction with the pending divestiture of our Willis Re business.

Other Intangible Assets

The ~~following~~following table reflects changes in the net carrying amounts of the components of finite-lived intangible assets for the nine months ended September 30, ~~2021:~~2022:

	Client relationships			Software			Trademark and trade name			Other			Total
Balance at December 31, 2020:
																Client relationships			Software			Trademark and trade name			Other			Total
Balance at December 31, 2021:
Intangible assets, gross	$	4,058		$	761		$	1,054		$	103		$	5,976		$	3,794		$	742		$	1,039		$	102		$	5,677
Accumulated amortization		(2,028	)		(659	)		(220	)		(34	)		(2,941	)		(2,118	)		(701	)		(257	)		(46	)		(3,122	)
Intangible assets, net - December 31, 2020 ⁽ⁱ⁾		2,030			102			834			69			3,035
Intangible assets, net - December 31, 2021																	1,676			41			782			56			2,555
Intangible assets acquired																	60			4			1			—			65
Intangible asset disposals		(47	)		0			(8	)		0			(55	)		(1	)		—			—			(5	)		(6	)
Amortization		(193	)		(49	)		(32	)		(11	)		(285	)		(173	)		(27	)		(32	)		(7	)		(239	)
Foreign exchange		(14	)		0			(1	)		1			(14	)		(57	)		—			(2	)		(2	)		(61	)
Balance at September 30, 2021:
Balance at September 30, 2022:
Intangible assets, gross		3,837			742			1,040			104			5,723			3,691			710			1,035			95			5,531
Accumulated amortization		(2,061	)		(689	)		(247	)		(45	)		(3,042	)		(2,186	)		(692	)		(286	)		(53	)		(3,217	)
Intangible assets, net - September 30, 2021	$	1,776		$	53		$	793		$	59		$	2,681
Intangible assets, net - September 30, 2022																$	1,505		$	18		$	749		$	42		$	2,314

~~(i)~~

Excludes $8 million of intangible assets, net, which have been reclassified as assets held for sale on our condensed consolidated balance sheets at both September 30, 2021 and December 31, 2020 in conjunction with the pending divestiture of our Willis Re business.

The weighted-average remaining life of amortizable intangible assets at September 30, ~~2021~~2022 was ~~13.1~~12.6 years.

The table below reflects the future estimated amortization expense for amortizable intangible assets for the remainder of ~~2021~~2022 and for subsequent years:

	Amortization
Remainder of 2021	$	84
2022		307
			Amortization
Remainder of 2022			$	70
2023		254		257
2024		223		224
2025		203		204
2026				197
Thereafter		1,610		1,362
Total	$	2,681	$	2,314

Note 89 — Derivative Financial Instruments

We are exposed to certain foreign currency risks. Where possible, we identify exposures in our business that can be offset internally. Where no natural offset is identified, we may choose to enter into various derivative transactions. These instruments have the effect of reducing our exposure to unfavorable changes in foreign currency rates. The Company’s board of directors reviews and approves policies for managing this risk as summarized below. Additional information regarding our derivative financial instruments can be found in Note 1011 — Fair Value Measurements and Note 1617 — Accumulated Other Comprehensive Loss.

Foreign Currency Risk

Certain ~~non-U.S.~~non-U.S. subsidiaries receive revenue and incur expenses in currencies other than their functional currency, and as a result, the foreign subsidiary’s functional currency revenue and/or expenses will fluctuate as the currency rates change. Additionally, the forecast Pounds sterling expenses of our London brokerage market operations may exceed their Pounds sterling revenue, and the entity with such operations may also hold significant foreign currency asset or liability positions in the condensed consolidated balance sheet. To reduce such variability, we use foreign exchange contracts to hedge against this currency risk.

These derivatives were designated as hedging instruments and at September 30, ~~2021~~2022 and December 31, ~~2020~~2021 had total notional amounts of ~~$129~~$127 million and ~~$340~~$155 million, respectively, and had a net liability fair value of $9 million and a net asset fair ~~values~~value of $3$3 million, ~~and $5 million,~~ respectively. As part of and prior to our disposal of Miller (see Note 3 – Divestitures), and prior to their contract expiration, we closed derivatives designated as hedging instruments with notional values of $27 million that were outstanding at December 31, 2020.

At September 30, ~~2021,~~2022, the Company estimates, based on current exchange rates, there will be $2$6 million of net derivative ~~gains~~losses on forward exchange rates reclassified from accumulated other comprehensive loss into earnings within the next twelve months as the forecast transactions affect earnings. At September 30, ~~2021,~~2022, our longest outstanding maturity was ~~1.6~~1.7 years.

The effects of the material derivative instruments that are designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are below. Amounts pertaining to the ineffective portion of hedging instruments and those excluded from effectiveness testing were immaterial for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021.

(Loss)/gain recognized in OCL (effective element)

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Forward exchange contracts

$
(2
)

$
6

$
3

$
(21
)


	(Loss)/gain recognized in OCI (effective element)
	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Forward exchange contracts	$	(6	)	$	(2	)	$	(12	)	$	3


Location of (loss)/gain reclassified from Accumulated OCL into income (effective element)	(Loss)/gain reclassified from Accumulated OCL into income (effective element)												(Loss)/gain reclassified from Accumulated OCL into income (effective element)
	Three months ended September 30,						Nine months ended September 30,						Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Revenue	$	(1	)	$	(2	)	$	(3	)	$	(4	)	$	—		$	(1	)	$	1		$	(3	)
Salaries and benefits		2			(2	)		5			(3	)		(2	)		2			(1	)		5
Discontinued operations		—			—			3			(1	)		—			—			—			3
	$	1		$	(4	)	$	5		$	(8	)	$	(2	)	$	1		$	—		$	5

~~We also enter into~~The Company engages in intercompany borrowing and lending between subsidiaries, primarily through its in-house banking operations which give rise to foreign exchange exposures. The Company mitigates these risks through the use of short-term foreign currency forward and swap transactions ~~primarily to hedge certain intercompany loans~~that offset the underlying exposure created when the borrower and ~~other balance sheet exposures in currencies other than the~~lender have different functional ~~currency of a given entity.~~currencies. These derivatives are not generally designated as hedging instruments and at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had notional amounts of ~~$1.9~~$2.2 billion and ~~$1.5~~$2.9 billion, ~~respectively,~~respectively. At September 30, 2022 and December 31, 2021, we had a net liability fair value of ~~$21~~$15 million and a net asset fair value of ~~$15~~$15 million, respectively. Such derivatives typically mature within three months.

The effects of these derivatives that have not been designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as ~~follows:~~follows (see Note 16 — Other Income, Net for the net foreign currency impact on the Company’s condensed consolidated statements of comprehensive income which includes the results of the offset of underlying exposures):

Note 910 — Debt

Current debt consists of the following:

September 30,
2021

December 31,
2020

Revolving $1.25 billion credit facility ⁽ⁱ⁾

$
—

$
—

5.750% senior notes due 2021

—

500

3.500% senior notes due 2021

—

449

2.125% senior notes due 2022⁽ⁱⁱ⁾

625

—

Current portion of collateralized facility

19

22

$
644

$
971


	September 30, 2022		December 31, 2021
2.125% senior notes due 2022 (i)	$	—	$	613
4.625% senior notes due 2023		250		—
	$	250	$	613

Long-term debt consists of the following:


	September 30, 2022		December 31, 2021
Revolving $1.5 billion credit facility	$	—	$	—
4.625% senior notes due 2023		—		249
3.600% senior notes due 2024		648		648
4.400% senior notes due 2026		547		546
4.650% senior notes due 2027		744		—
4.500% senior notes due 2028		597		597
2.950% senior notes due 2029		726		726
6.125% senior notes due 2043		271		271
5.050% senior notes due 2048		395		395
3.875% senior notes due 2049		542		542
	$	4,470	$	3,974

September 30,
2021

December 31,
2020

Revolving $1.25 billion credit facility

$
—

$
—

Collateralized facility ⁽ⁱⁱⁱ⁾

19

33

2.125% senior notes due 2022⁽ⁱⁱ⁾

—

659

4.625% senior notes due 2023

249

249

3.600% senior notes due 2024

648

647

4.400% senior notes due 2026

546

546

4.500% senior notes due 2028

596

596

2.950% senior notes due 2029

727

726

6.125% senior notes due 2043

271

271

5.050% senior notes due 2048

395

395

3.875% senior notes due 2049

542

542

$
3,993

$
4,664

(i)

Notes issued in Euro (€540 million).

Senior Notes

~~(i)~~

~~The $1.25 billion revolving credit facility expires on March 7, 2022 (see Note 18 – Subsequent Event for additional information).~~

~~(ii)~~

~~Notes issued in Euro (€540 million).~~

~~(iii)~~

~~At September 30, 2021 and December 31, 2020, the Company had $82 million and $98 million, respectively, of renewal commissions receivables pledged as collateral for this facility.~~

~~Payments~~On May 19, 2022, the Company, together with its wholly-owned subsidiary, Willis North America Inc. as issuer, completed an offering of ~~3.500%~~$750 million aggregate principal amount of 4.650% senior notes due 2027 (‘2027 senior notes’). The effective interest rate of the 2027 senior notes is 4.79%, which includes the impact of the discount upon issuance. The 2027 senior notes will mature on June 15, 2027. Interest on the 2027 senior notes accrues from May 19, 2022 and will be paid in cash on June 15 and December 15 of each year, commencing on December 15, 2022. The net proceeds from this offering, after deducting the underwriting discount and estimated offering expenses, were approximately $744 million and were used to fully repay the €540 million ($582 million on the date of repayment) aggregate principal amount of the 2.125% Senior Notes due ~~2021~~2022 and ~~5.750% Senior Notes due 2021~~related accrued interest, and for general corporate purposes.

~~In August 2021, the Company called the $450 million 3.500% senior notes due to mature in September 2021. The Company repaid the principal and interest in August 2021 using cash on-hand.~~

~~In March 2021, the $500 million 5.750% senior notes matured. The principal and interest were repaid by the Company using cash on-hand.~~

At September 30, ~~2021~~2022 and December 31, ~~2020~~2021, we were in compliance with all financial covenants.

Note 1011 — Fair Value Measurements

The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, based on the reliability of the inputs used to determine fair value as follows:

•

Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets;

•

Level 2: refers to fair values estimated using observable market-based inputs or unobservable inputs that are corroborated by market data; and

•

Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data.

•

~~Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets;~~

•

~~Level 2: refers to fair values estimated using observable market-based inputs or unobservable inputs that are corroborated by market data; and~~

•

~~Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data.~~

The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

•

Available-for-sale securities are classified as Level 1 because we use quoted market prices in determining the fair value of these securities.

•

Market values for our derivative instruments have been used to determine the fair value of forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account observable information about the current foreign currency forward rates. Such financial instruments are classified as Level 2 in the fair value hierarchy.

•

Contingent consideration payable is classified as Level 3, and we estimate fair value based on the likelihood and timing of achieving the relevant milestones of each arrangement, applying a probability assessment to each of the potential outcomes, which at times includes the use of a Monte Carlo simulation, and discounting the probability-weighted payout. Typically, milestones are based on revenue or earnings growth for the acquired business.

•

~~Available-for-sale securities are classified as Level 1 because we use quoted market prices in determining the fair value of these securities.~~

•

The following tables present our assets and liabilities measured at fair value on a recurring basis at September 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


		Fair Value Measurements on a Recurring Basis at September 30, 2022
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Mutual funds / exchange traded funds	Prepaid and other current assets and other non-current assets	$	6	$	—	$	—	$	6
	Fiduciary assets		128		—		—		128
Derivatives:
Derivative financial instruments (i)	Prepaid and other current assets and other non-current assets	$	—	$	3	$	—	$	3
Liabilities:
Contingent consideration:
Contingent consideration (ii)	Other current liabilities and other non-current liabilities	$	—	$	—	$	54	$	54
Derivatives:
Derivative financial instruments (i)	Other current liabilities and other non-current liabilities	$	—	$	27	$	—	$	27


		Fair Value Measurements on a Recurring Basis at December 31, 2021
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Mutual funds / exchange traded funds	Prepaid and other current assets and other non-current assets	$	9	$	—	$	—	$	9
	Fiduciary assets		152		—		—		152
Certificates of deposit/term deposits	Prepaid and other current assets and other non-current assets		200		—		—		200
Derivatives:
Derivative financial instruments (i)	Prepaid and other current assets and other non-current assets	$	—	$	18	$	—	$	18
Liabilities:
Contingent consideration:
Contingent consideration (ii)	Other current liabilities and other non-current liabilities	$	—	$	—	$	51	$	51
Derivatives:
Derivative financial instruments (i)	Other current liabilities and other non-current liabilities	$	—	$	—	$	—	$	—

Fair Value Measurements on a Recurring Basis at
September 30, 2021

Balance Sheet Location

Level 1

Level 2

Level 3

Total

Assets:

Available-for-sale securities:

Mutual funds / exchange traded funds

Prepaid and other current assets and other non-current assets

$
9

$
0

$
0

$
9

Derivatives:

Derivative financial instruments ⁽ⁱ⁾

Prepaid and other current assets and other non-current assets

$
0

$
4

$
0

$
4

Liabilities:

Contingent consideration:

Contingent consideration ⁽ⁱⁱ⁾

Other current liabilities and other non-current liabilities

$
0

$
0

$
30

$
30

Derivatives:

Derivative financial instruments ⁽ⁱ⁾

Other current liabilities and other non-current liabilities

$
0

$
22

$
0

$
22

(i)

See Note 9 — Derivative Financial Instruments for further information on our derivative investments.

(ii)

Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used in our material contingent consideration calculations were 11.99% and 11.92% at September 30, 2022 and December 31, 2021, respectively. The range of these discount rates was 3.53% - 13.80% at September 30, 2022. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable.

Fair Value Measurements on a Recurring Basis at
December 31, 2020

Balance Sheet Location

Level 1

Level 2

Level 3

Total

Assets:

Available-for-sale securities:

Mutual funds / exchange traded funds

Prepaid and other current assets and other non-current assets

$
8

$
0

$
0

$
8

Derivatives:

Derivative financial instruments ⁽ⁱ⁾

Prepaid and other current assets and other non-current assets

$
0

$
27

$
0

$
27

Liabilities:

Contingent consideration:

Contingent consideration ⁽ⁱⁱ⁾

Other current liabilities and other non-current liabilities

$
0

$
0

$
45

$
45

Derivatives:

Derivative financial instruments ⁽ⁱ⁾

Other current liabilities and other non-current liabilities

$
0

$
7

$
0

$
7

~~(i)~~

~~See Note 8 — Derivative Financial Instruments for further information on our derivative investments.~~

~~(ii)~~

Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used in our material contingent consideration calculations were 11.01% and 9.46% at September 30, 2021 and December 31, 2020, respectively. The range of these discount rates was 3.53% - 13.00% at September 30, 2021. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable.

The following table summarizes the change in fair value of the Level 3 liabilities:


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)	September 30, 2022
Balance at December 31, 2021	$	51
Obligations assumed		22
Payments		(22	)
Realized and unrealized losses (i)		5
Foreign exchange		(2	)
Balance at September 30, 2022	$	54

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

September 30, 2021

Balance at December 31, 2020

$
45

Obligations assumed

0

Payments

(19
)
Realized and unrealized gains

5

Foreign exchange

(1
)
Balance at September 30, 2021

$
30

(i)

Realized and unrealized losses include accretion and adjustments to contingent consideration liabilities, which are included within Interest expense and Other operating expenses, respectively, on the condensed consolidated statements of comprehensive income.

There were 0no significant transfers to or from Level 3 in the nine months ended September 30, ~~2021.~~2022.

Fair value information about financial instruments not measured at fair value

The ~~following~~following tables present our ~~assets and~~ liabilities not measured at fair value on a recurring basis at September 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


	September 30, 2021				December 31, 2020				September 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Long-term note receivable	$	70	$	72	$	71	$	73	$	62	$	58	$	69	$	70
Liabilities:
Current debt	$	644	$	651	$	971	$	985	$	250	$	249	$	613	$	616
Long-term debt	$	3,993	$	4,560	$	4,664	$	5,488	$	4,470	$	4,017	$	3,974	$	4,453

The carrying ~~values~~value of our revolving credit facility ~~and collateralized facility approximate their~~approximates its fair ~~values.~~value. The fair values above, which exclude accrued interest, are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or ability to dispose of the financial instruments. The fair values of our respective senior notes and long-term note receivable are considered Level 2 financial instruments as they are corroborated by observable market data.

Note 1112 — Retirement Benefits

Defined Benefit Plans and Post-retirement Welfare Plans

~~Willis Towers Watson~~WTW sponsors both qualified and non-qualified defined benefit pension plans and other post-retirement welfare (‘PRW’) plans throughout the world. The majority of our plan assets and obligations are in the U.S. and the U.K. We have also included disclosures related to defined benefit plans in certain other countries, including Canada, France, Germany, Switzerland and Ireland. Together, these disclosed funded and unfunded plans represent ~~99%~~99% of ~~Willis Towers Watson’s~~WTW’s pension and PRW obligations and are disclosed herein.

Components of Net Periodic Benefit (Income)/Cost for Defined Benefit Pension and Post-retirement Welfare Plans

The ~~following~~following tables set forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension and PRW plans for the three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Three Months Ended September 30,																								Three Months Ended September 30,
	2021												2020												2022											2021
	U.S.			U.K.			Other			PRW			U.S.			U.K.			Other			PRW			U.S.			U.K.			Other			PRW		U.S.			U.K.			Other			PRW
Service cost	$	19		$	4		$	6		$	0		$	18		$	4		$	5		$	0		$	20		$	2		$	6		$	—	$	19		$	4		$	6		$	—
Interest cost		24			14			3			0			32			18			4			1			29			18			4			—		24			14			3			—
Expected return on plan assets		(79	)		(42	)		(9	)		0			(73	)		(63	)		(8	)		0			(83	)		(34	)		(10	)		—		(79	)		(42	)		(9	)		—
Settlement		0			1			2			0			0			0			0			0			3			1			—			—		—			1			2			—
Amortization of net loss		8			7			1			1			9			6			0			0			4			7			—			—		8			7			1			1
Amortization of prior service credit		0			(4	)		1			(1	)		0			(4	)		0			(1	)		—			(3	)		1			—		—			(4	)		1			(1	)
Net periodic benefit (income)/cost	$	(28	)	$	(20	)	$	4		$	0		$	(14	)	$	(39	)	$	1		$	0		$	(27	)	$	(9	)	$	1		$	—	$	(28	)	$	(20	)	$	4		$	—


	Nine Months Ended September 30,
	2022												2021
	U.S.			U.K.			Other			PRW			U.S.			U.K.			Other			PRW
Service cost	$	58		$	9		$	17		$	—		$	59		$	13		$	18		$	—
Interest cost		88			54			12			1			71			42			9			1
Expected return on plan assets		(248	)		(110	)		(29	)		—			(233	)		(128	)		(28	)		—
Settlement		3			1			—			—			1			2			2			—
Amortization of net loss		11			22			2			1			30			21			4			2
Amortization of prior service credit		—			(9	)		1			(2	)		—			(13	)		1			(3	)
Net periodic benefit (income)/cost	$	(88	)	$	(33	)	$	3		$	—		$	(72	)	$	(63	)	$	6		$	—

Nine Months Ended September 30,

2021

2020

U.S.

U.K.

Other

PRW

U.S.

U.K.

Other

PRW

Service cost

$
59

$
13

$
18

$
0

$
54

$
11

$
15

$
0

Interest cost

71

42

9

1

98

54

11

2

Expected return on plan assets

(233
)

(128
)

(28
)

0

(218
)

(184
)

(25
)

0

Settlement

1

2

2

0

2

1

0

0

Amortization of net loss

30

21

4

2

26

17

2

1

Amortization of prior service credit

0

(13
)

1

(3
)

0

(12
)

0

(3
)
Net periodic benefit (income)/cost

$
(72
)

$
(63
)

$
6

$
0

$
(38
)

$
(113
)

$
3

$
0

~~Amounts related to discontinued operations in the tables above were not material during the three and nine months ended September 30, 2021 and 2020.~~

Employer Contributions to Defined Benefit Pension Plans

The Company ~~made $60 million of~~did not make any contributions to its U.S. plans ~~for~~during the nine months ended September 30, ~~2021~~2022 and currently does 0tnot anticipate making ~~any additional~~ contributions over the remainder of the fiscal year. The Company made contributions of ~~$28~~$23 million to its U.K. plans for the nine months ended September 30, ~~2021~~2022 and anticipates making additional contributions of ~~$14~~$13 million for the remainder of the fiscal year. The Company made contributions of ~~$22~~$22 million to its other plans for the nine months ended September 30, ~~2021~~2022 and anticipates making additional contributions of $3$2 million for the remainder of the fiscal year.

Defined Contribution Plans

The Company made contributions to its defined contribution plans of ~~$36~~$34 million and ~~$118~~$114 million during the three and nine months ended September 30, 2022, respectively, and $36 million and $118 million during the three and nine months ended September 30, 2021, ~~respectively, and $39 million and $122 million during the three and nine months ended September 30, 2020,~~ respectively.

Note 1213 — Leases

The following tables present lease costs recorded on our condensed consolidated statements of comprehensive income for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Finance lease cost:
Amortization of right-of-use assets	$	—		$	1		$	1		$	2		$	—		$	—		$	1		$	1
Interest on lease liabilities		1			—			2			2			1			1			2			2
Operating lease cost		43			45			134			138			35			43			130			134
Short-term lease cost		—			1			1			1			—			—			—			1
Variable lease cost		13			14			39			37			13			13			47			39
Sublease income		(6	)		(6	)		(16	)		(16	)		(3	)		(6	)		(12	)		(16	)
Total lease cost, net	$	51		$	55		$	161		$	164		$	46		$	51		$	168		$	161

~~Amounts related to discontinued operations in the tables above were not material during the three and nine months ended September 30, 2021 and 2020.~~

The total lease cost is recognized in different locations in our condensed consolidated statements of comprehensive income. Amortization of the finance lease ~~ROU~~right-of-use assets is included in depreciation, while the interest cost component of these finance leases is included in interest expense. All other costs are included in other operating ~~expenses.~~

expenses, with the exception of $2 million and $33 million, respectively, incurred during the three and nine months ended September 30, 2022 that was included in restructuring costs (see Note 136 — Restructuring Costs) that primarily related to the acceleration of amortization of certain abandoned right-of-use assets and the —payment of early termination fees. There are no significant lease costs that have been included as discontinued operations in the condensed consolidated statements of comprehensive income during the three and nine months ended September 30, 2022 and 2021.

Note 14 —Commitments and Contingencies

Indemnification Agreements

~~Willis Towers Watson~~WTW has various agreements which provide that it may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business and in connection with the purchase and sale of certain ~~businesses.~~businesses, including the disposal of Willis Re. It is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements because of the conditional nature of the Company’s obligations and the unique facts of each particular agreement. However, we do not believe that any potential liability that may arise from such indemnity provisions is probable or material.

Legal Proceedings

In the ordinary course of business, the Company is subject to various actual and potential claims, lawsuits and other proceedings. Some of the claims, lawsuits and other proceedings seek damages in amounts which could, if assessed, be significant. We expect the impact of claims or demands not described below to be immaterial to the Company’s condensed consolidated financial statements. The Company also receives subpoenas in the ordinary course of business and, from time to time, receives requests for information in connection with governmental investigations.

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. Regarding self-insured risks, the Company has established provisions which are believed to be adequate in light of current information and legal advice, or, in

certain cases, where a range of loss exists, the Company accrues the minimum amount in the range if no amount within the range is a better estimate than any other amount. The Company adjusts such provisions from time to time according to developments. See Note 1415 — Supplementary Information for Certain Balance Sheet Accounts for the amounts accrued at September 30, ~~2021~~2022 and December 31, ~~2020~~2021 in the condensed consolidated balance sheets.

On the basis of current information, the Company does not expect that the actual claims, lawsuits and other proceedings to which it is subject, or potential claims, lawsuits, and other proceedings relating to matters of which it is aware, will ultimately have a material adverse effect on its financial condition, results of operations or liquidity. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation and disputes with insurance companies, it is possible that an adverse outcome or settlement in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods. In addition, given the early stages of some litigation or regulatory proceedings described below, it may not be possible to predict their outcomes or resolutions, and it is possible that any one or more of these events may have a material adverse effect on the Company.

The Company provides for contingent liabilities based on ASC 450, Contingencies, when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. The contingent liabilities recorded are primarily developed actuarially. Litigation is subject to many factors which are difficult to predict so there can be no assurance that in the event of a material unfavorable result in one or more claims, we will not incur material costs.

~~Willis Towers Watson Merger-Related Securities Litigation~~

The Company was named as a defendant in two consolidated actions arising out of the 2016 ‘merger of equals’ between Towers Watson and Willis (the ‘Merger’), consisting of a consolidated shareholder class action pending in the United States District Court for the Eastern District of Virginia, captioned ‘In re Willis Towers Watson plc Proxy Litigation,’ Master File No. 1:17-cv-1338-AJT-JFA (the ‘Federal Action’), and a consolidated putative shareholder class action pending in the Delaware Court of Chancery, captioned ‘In re Towers Watson & Co. Stockholders Litigation,’ C.A. No. 2018-0132-KSJM (the ‘Delaware Action’). The complaints in these actions generally allege that the defendants omitted material information from the proxy disclosures relating to the Merger, including with respect to potential conflicts of interest, and, as a result, that Towers Watson’s stockholders approved the Merger based on inadequate information. Based on these allegations, among others, the complaint in the Federal Action asserts claims under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and the complaint in the Delaware Action asserts claims under Delaware state law for breach of fiduciary duty and aiding and abetting breach of fiduciary duty.

On or about November 19, 2020, the parties to the Federal Action and the Delaware Action reached an agreement in principle to resolve the Federal Action and the Delaware Action for $75 million and $15 million, respectively. The Company agreed to the settlement and the payment of the settlement amounts to eliminate the distraction, burden, expense and uncertainty of further litigation. Further, in reaching the settlement, the parties understood and agreed that there is no admission of liability or wrongdoing by the Company or any of the other defendants in either the Federal Action or the Delaware Action. The Company and the other defendants expressly deny any liability or wrongdoing with respect to the matters alleged in the Federal Action and the Delaware Action.

On January 15, 2021, the parties to the Federal Action and the Delaware Action signed formal stipulations of settlement, which memorialized the terms of the agreement in principle, and which the plaintiffs in the Federal Action and the Delaware Action then filed with each of the respective courts. Also on January 15, 2021, the plaintiff in the Federal Action filed a motion to preliminarily approve the settlement. On January 21, 2021 the court in the Federal Action preliminarily approved the settlement, approved the form of notice to be disseminated to class members, and scheduled a final fairness hearing on the settlement for May 21, 2021. On May 21, 2021, following the final fairness hearing, the court in the Federal Action finally approved the settlement. On January 25, 2021 the court in the Delaware Action approved the form of notice to be disseminated to class members and scheduled a final fairness hearing on the settlement for May 25, 2021. On May 25, 2021, following the final fairness hearing, the court in the Delaware Action finally approved the settlement. The Company made the $90 million aggregate settlement payment in escrow in February 2021.

~~During 2020 the Company recognized $65 million of expense, net of $25 million of insurance and other recoveries. Additional insurance recoveries are possible.~~

Note 1415 — Supplementary Information for Certain Balance Sheet Accounts

Additional details of specific balance sheet accounts are detailed below.

~~The information at both dates presented excludes~~Prepaid and other current assets consist of the ~~assets and liabilities of Willis Re, which have been reclassified to held for sale as appropriate on the condensed consolidated balance sheets.~~following:


	September 30, 2022		December 31, 2021
Prepayments and accrued income	$	112	$	137
Short-term investments		—		200
Deferred contract costs		63		74
Derivatives and investments		20		35
Deferred compensation plan assets		13		19
Corporate income and other taxes		198		82
Acquired renewal commissions receivable		9		11
Other current assets		61		54
Total prepaid and other current assets	$	476	$	612

Deferred revenue and accrued expenses consist of the following:


	September 30, 2021		December 31, 2020		September 30, 2022		December 31, 2021
Accounts payable, accrued liabilities and deferred income	$	911	$	854	$	876	$	898
Accrued discretionary and incentive compensation		674		749		524		811
Litigation settlements		—		210
Accrued vacation		170		155		173	��	145
Other employee-related liabilities		74		75		67		72
Total deferred revenue and accrued expenses	$	1,829	$	2,043	$	1,640	$	1,926

Other current liabilities ~~consist~~consists of the following:


	September 30, 2021		December 31, 2020		September 30, 2022		December 31, 2021
Dividends payable	$	114	$	103	$	102	$	112
Income and other taxes payable		333		96		153		278
Interest payable		22		68		30		55
Deferred compensation plan liabilities		39		51		12		49
Contingent and deferred consideration on acquisitions		17		39		13		24
Payroll-related liabilities		263		264
Accrued retirement benefits						58		65
Derivatives		22		5		25		—
Payroll and other benefits-related liabilities						220		230
Third-party commissions		87		95		128		101
Other current liabilities		53		72		110		101
Total other current liabilities	$	950	$	793	$	851	$	1,015

Provision for liabilities consists of the following:


	September 30, 2021		December 31, 2020		September 30, 2022		December 31, 2021
Claims, lawsuits and other proceedings	$	335	$	325	$	306	$	311
Other provisions		66		81		59		64
Total provision for liabilities	$	401	$	406	$	365	$	375

Other non-current liabilities ~~consist~~consists of the following:


	September 30, 2021		December 31, 2020		September 30, 2022		December 31, 2021
Deferred compensation plan liability	$	100	$	103	$	75	$	109
Contingent and deferred consideration on acquisitions		13		16		41		27
Liabilities for uncertain tax positions		45		49		32		43
Derivatives		—		2
Finance leases		17		19		13		15
Other non-current liabilities		64		92		42		59
Total other non-current liabilities	$	239	$	281	$	203	$	253

Note 1516 — Other Income, Net

Other income, net consists of the following:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Gain/(loss) on disposal of operations (i)	$	21		$	23	$	(11	)	$	380
Net periodic pension and postretirement benefit credits		64			79		204			227
Interest in earnings of associates and other investments		—			1		4			5
Foreign exchange (loss)/gain		(1	)		1		4			4
Other		1			1		4			1
Other income, net	$	85		$	105	$	205		$	617

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Gain on disposal of operations

$
23

$
85

$
380

$
83

Net periodic pension and postretirement benefit credits

79

76

227

227

Interest in earnings of associates and other investments

1

(1
)

5

4

Foreign exchange gain/(loss)

1

(2
)

4

7

Other

1

(2
)

1

—

Other income, net

$
105

$
156

$
617

$
321

(i)

For the nine months ended September 30, 2022, includes a $24 million non-cash revaluation gain related to an acquisition completed in stages.

~~Certain prior period amounts within the tables above have been reclassified to discontinued operations within the condensed consolidated statements of income.~~27

Note 1617 — Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss, net of non-controlling interests, and net of tax are provided in the following tables for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. These tables exclude amounts attributable to non-controlling interests, which are not material for further disclosure.

Foreign currency
translation ⁽ⁱ⁾

Derivative
instruments⁽ⁱ⁾

Defined pension and
post-retirement
benefit costs ⁽ⁱⁱ⁾

Total

2021

2020

2021

2020

2021

2020

2021

2020

Quarter-to-date activity:

Balance at June 30, 2021 and 2020, respectively

$
(376
)

$
(698
)

$
13

$
(6
)

$
(1,915
)

$
(1,686
)

$
(2,278
)

$
(2,390
)
Other comprehensive (loss)/income before
   reclassifications

(81
)

119

(1
)

5

2

0

(80
)

124

(Gain)/loss reclassified from accumulated other
   comprehensive loss (net of income tax benefit of
   $8 and $2, respectively)

0

0

(1
)

4

0

9

(1
)

13

Net current-period other comprehensive (loss)/income

(81
)

119

(2
)

9

2

9

(81
)

137

Balance at September 30, 2021 and 2020, respectively

$
(457
)

$
(579
)

$
11

$
3

$
(1,913
)

$
(1,677
)

$
(2,359
)

$
(2,253
)

Year-to-date activity:

Balance at December 31, 2020 and 2019, respectively

$
(400
)

$
(538
)

$
9

$
13

$
(1,968
)

$
(1,702
)

$
(2,359
)

$
(2,227
)
Other comprehensive (loss)/income before
   reclassifications

(101
)

(41
)

7

(17
)

2

2

(92
)

(56
)
Loss/(gain) reclassified from accumulated other
   comprehensive loss (net of income tax benefit of
   $15 and $9, respectively) ⁽ⁱⁱⁱ⁾

44

0

(5
)

7

53

23

92

30

Net current-period other comprehensive (loss)/income

(57
)

(41
)

2

(10
)

55

25

0

(26
)
Balance at September 30, 2021 and 2020, respectively

$
(457
)

$
(579
)

$
11

$
3

$
(1,913
)

$
(1,677
)

$
(2,359
)

$
(2,253
)



	Foreign currency translation (i)						Derivative instruments (i)						Defined pension and post-retirement benefit costs (ii)						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Quarter-to-date activity:
Balance at June 30, 2022 and 2021, respectively	$	(794	)	$	(376	)	$	6		$	13		$	(1,698	)	$	(1,915	)	$	(2,486	)	$	(2,278	)
Other comprehensive (loss)/income before reclassifications		(240	)		(81	)		(5	)		(1	)		5			2			(240	)		(80	)
Loss/(gain) reclassified from accumulated other comprehensive loss (net of income tax benefit of $2 and $8, respectively)		—			—			1			(1	)		5			—			6			(1	)
Net current-period other comprehensive (loss)/income		(240	)		(81	)		(4	)		(2	)		10			2			(234	)		(81	)
Balance at September 30, 2022 and 2021, respectively	$	(1,034	)	$	(457	)	$	2		$	11		$	(1,688	)	$	(1,913	)	$	(2,720	)	$	(2,359	)

Year-to-date activity:
Balance at December 31, 2021 and 2020, respectively	$	(489	)	$	(400	)	$	11		$	9		$	(1,708	)	$	(1,968	)	$	(2,186	)	$	(2,359	)
Other comprehensive (loss)/income before reclassifications		(545	)		(101	)		(8	)		7			3			2			(550	)		(92	)
Loss/(gain) reclassified from accumulated other comprehensive loss (net of income tax benefit of $6 and $15, respectively) (iii)		—			44			(1	)		(5	)		17			53			16			92
Net current-period other comprehensive (loss)/income		(545	)		(57	)		(9	)		2			20			55			(534	)		—
Balance at September 30, 2022 and 2021, respectively	$	(1,034	)	$	(457	)	$	2		$	11		$	(1,688	)	$	(1,913	)	$	(2,720	)	$	(2,359	)

~~(i)~~

Reclassification adjustments from accumulated other comprehensive loss related to derivative instruments are included in Revenue and Salaries and benefits in the accompanying condensed consolidated statements of comprehensive income. See Note 8 — Derivative Financial Instruments for additional details regarding the reclassification adjustments for the derivative settlements.

(i)

Reclassification adjustments from accumulated other comprehensive loss related to derivative instruments are included in Revenue and Salaries and benefits in the accompanying condensed consolidated statements of comprehensive income. See Note 9 — Derivative Financial Instruments for additional details regarding the reclassification adjustments for the derivative settlements.

~~(ii)~~

Reclassification adjustments from accumulated other comprehensive loss are included in the computation of net periodic pension cost (see Note 11 — Retirement Benefits). These components are included in Other income, net in the accompanying condensed consolidated statements of comprehensive income.

(ii)

Reclassification adjustments from accumulated other comprehensive loss are included in the computation of net periodic pension cost (see Note 12 — Retirement Benefits). These components are included in Other income, net in the accompanying condensed consolidated statements of comprehensive income.

(iii)

Includes reclassifications in 2021 of $44 million and $31~~(iii)~~

~~Includes reclassifications of $44 million and $31~~ million of foreign currency translation and defined pension and post-retirement benefit costs, respectively, attributable to the gain on disposal of our Miller business (see ~~Note 3 — Divestitures). The net gain on disposal is included in Other income, net in the accompanying condensed consolidated statements of comprehensive income.~~

Note 173 — Acquisitions and Divestitures). The net gain on disposal is included in Other income, net in the accompanying condensed consolidated statements of comprehensive income.

Note 18 — Earnings Per Share

Basic and diluted earnings per share from continuing operations attributable to ~~Willis Towers Watson~~WTW and discontinued operations, net of tax are calculated by dividing net income from continuing operations attributable to ~~Willis Towers Watson~~WTW and discontinued operations, net of tax, respectively, by the average number of ordinary shares outstanding during each period. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or converted into shares or resulted in the issuance of shares that then shared in the net income of the Company.

At both September 30, ~~2021~~2022 and ~~2020,~~2021, there were 0.6 ~~million and 0.4~~ million restricted performance-based stock units outstanding. At September 30, 2022, there were 0.4 million restricted time-based stock units outstanding; restricted time-based stock units were immaterial at September 30, 2021. There were no performance-based options outstanding ~~respectively, and 0.1~~at September 30, 2022; at September 30, 2021, there were 0.3 million ~~and 0.3~~performance-based options outstanding. The Company’s time-based share options were immaterial at September 30, 2022; there were 0.1 million time-based share options outstanding ~~respectively. Additionally,~~ at September 30, ~~2021 and 2020, there were 0.3 million performance-based options outstanding, and the Company’s restricted time-based stock units were immaterial.~~2021.

Basic and diluted earnings per share ~~from continuing operations attributable to Willis Towers Watson and discontinued operations~~ are as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Income from continuing operations

$
919

$
119

$
1,582

$
284

    Less: Income attributable to non-controlling interests

(4
)

(1
)

(9
)

(17
)
Income from continuing operations attributable to Willis Towers
   Watson

$
915

$
118

$
1,573

$
267

(Loss)/income from discontinued operations, net of tax

$
(12
)

$
3

$
247

$
253

Basic average number of shares outstanding

129

130

130

130

Dilutive effect of potentially issuable shares

0

0

0

0

Diluted average number of shares outstanding

129

130

130

130

Basic earnings per share from continuing operations attributable
   to Willis Towers Watson

$
7.10

$
0.91

$
12.14

$
2.06

Dilutive effect of potentially issuable shares

(0.02
)

0

(0.04
)

(0.01
)
Diluted earnings per share from continuing operations
   attributable to Willis Towers Watson

$
7.08

$
0.91

$
12.10

$
2.05

Basic (loss)/earnings per share from discontinued operations,
   net of tax

$
(0.09
)

$
0.02

$
1.90

$
1.95

Dilutive effect of potentially issuable shares

0

0

0

(0.01
)
Diluted (loss)/earnings per share from discontinued operations,
   net of tax

$
(0.09
)

$
0.02

$
1.90

$
1.94


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Income from continuing operations	$	184		$	919		$	458		$	1,582
Less: income attributable to non-controllable interests		(2	)		(4	)		(10	)		(9	)
Income from continuing operations attributable to WTW	$	182		$	915		$	448		$	1,573

Income/(loss) from discontinued operations, net of tax	$	8		$	(12	)	$	(27	)	$	247

Basic average number of shares outstanding		110			129			113			130
Dilutive effect of potentially issuable shares		1			—			1			—
Diluted average number of shares outstanding		111			129			114			130

Basic earnings per share from continuing operations attributable to WTW	$	1.65		$	7.10		$	3.95		$	12.14
Dilutive effect of potentially issuable shares		—			(0.02	)		—			(0.04	)
Diluted earnings per share from continuing operations attributable to WTW	$	1.65		$	7.08		$	3.95		$	12.10

Basic earnings/(loss) per share from discontinued operations, net of tax	$	0.07		$	(0.09	)	$	(0.24	)	$	1.90
Dilutive effect of potentially issuable shares		—			—			—			—
Diluted earnings/(loss) per share from discontinued operations, net of tax	$	0.07		$	(0.09	)	$	(0.24	)	$	1.90

For both the three and nine months ended September 30, 2022, 0.3 million restricted stock units were not included in the computation of the dilutive effect of potentially issuable shares because their effect was anti-dilutive. For the three and nine months ended September 30, 2021, 0.4 million and 0.3 million restricted stock units, respectively, were not included in the computation of the dilutive effect of potentially issuable shares because their effect was ~~anti-dilutive; there were 0 anti-dilutive restricted stock units for the three and nine months ended September 30, 2020.~~anti-dilutive. There were 0no anti-dilutive options for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021.

Note 19 — Supplemental Disclosures of Cash Flow Information

Supplemental disclosures regarding cash flow information are as follows:


	Nine months ended September 30,
	2022			2021
Supplemental disclosures of cash flow information:
Cash and cash equivalents	$	1,496		$	2,162
Fiduciary funds (included in fiduciary assets)		3,170			3,963
Cash and cash equivalents and fiduciary funds (included in current assets held for sale)		5			53
Other restricted cash (included in prepaids and other current assets)		—			6
Total cash, cash equivalents and restricted cash	$	4,671		$	6,184

(Decrease)/increase in cash, cash equivalents and other restricted cash	$	(2,904	)	$	149
Increase/(decrease) in fiduciary funds		174			(167	)
Total	$	(2,730	)	$	(18	)

~~Note 18 — Subsequent Event~~

~~On October 6,~~Revision of previously issued financial statements - During the nine months ended September 30, 2022, to reflect the guidance on restricted cash presentation in FASB ASC 230, Statement of Cash Flows, WTW corrected the classification of its fiduciary funds balances, in the amounts shown in the table above, on our condensed consolidated statements of cash flows, by including these amounts in the total cash, cash equivalents and restricted cash amounts held at each balance sheet date. As a result, cash, cash equivalents and restricted cash balances of $2.2 billion and $2.1 billion at September 30, 2021 ~~Trinity Acquisition plc entered into a second amended~~ and ~~restated revolving credit facility (the ‘new RCF’) for $1.5~~December 31, 2020, respectively, have been revised to $6.2 billion ~~that will mature~~and $6.3 billion, respectively. Additionally, the effect of exchange rate changes on ~~October 6, 2026. This new RCF replaces~~cash, cash equivalents and restricted cash has been updated to include the ~~previous $1.25 billion revolving credit facility which was due to expire in~~ ~~March~~effect of ~~2022~~.

Borrowing costs under the $1.5 billion facility differ if the borrowing is a ‘base rate’ borrowing or a ‘Eurocurrency’ borrowing, both as defined by the new RCF, and equal the sum of the relevant benchmark plus a margin basedexchange rate changes on the ~~Company’s senior unsecured long-term debt rating:~~fiduciary funds balances.

Prior to this correction, the changes in fiduciary funds were presented in fiduciary assets and liabilities on a gross basis in the cash flows from operating activities, where the amounts fully offset each period. In the current presentation, an additional line item, net

(payments)/proceeds from fiduciary funds held for clients, has been included within cash flows from financing activities to represent the change in fiduciary funds balances during the periods. The remaining fiduciary assets and fiduciary liabilities, in equal and offsetting amounts, are no longer presented in the cash flows from operating activities. There was no impact to the total cash flows from operating activities as a result of these changes.

•

For base rate borrowings, the benchmark rate will be the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50%, and (c) the one-month LIBOR rate plus 1.0%. The margin on the base rate benchmark is 0.00% to 0.75% depending on the Company’s senior unsecured long-term debt rating.

•

For Eurocurrency or Sterling Overnight Interbank Average Rate (‘SONIA’) borrowings, the rate will be the applicable LIBOR rate or SONIA (as applicable based on the currency of the borrower) plus a margin of 1.0% to 1.75% depending on the Company’s guaranteed unsecured long-term debt rating. In anticipation of the cessation of LIBOR, the new RCF provides for a benchmark rate adjustment that will be added to the replacement benchmark rate to reflect the differential between LIBOR and the replacement benchmark (e.g., the ~~Secured Overnight Financing Rate). This adjustment amount will be a function of both the currency and borrowing tenor.~~

~~The new RCF also carries a commitment (unused) fees of 0.09% to 0.25%, which is also based on the Company’s senior unsecured long-term debt rating.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion includes forward-looking statements. See ‘Disclaimer Regarding Forward-looking Statements’ for certain cautionary information regarding forward-looking statements and a list of factors that could cause actual results to differ materially from those predicted in those statements.

This discussion includes references to non-GAAP financial measures as defined in the rules of the SEC. We present such non-GAAP financial measures, specifically, adjusted, constant currency and organic non-GAAP financial measures, as we believe such information is of interest to the investment community because it provides additional meaningful methods of evaluating certain aspects of the Company’s operating performance from period to period on a basis that may not be otherwise apparent under U.S. GAAP, and these provide a measure against which our businesses may be assessed in the future.

See ‘Non-GAAP Financial Measures’ below for further discussion of our adjusted, constant currency and organic non-GAAP financial measures.

Executive Overview

~~Termination of Proposed Combination with Aon plc~~

On March 9, 2020, WTW and Aon plc (‘Aon’) issued an announcement disclosing that the respective boards of directors of WTW and Aon had reached agreement on the terms of a recommended acquisition of WTW by Aon. Under the terms of the agreement each WTW shareholder would receive 1.08 Aon ordinary shares for each WTW ordinary share. At the time of the announcement, it was estimated that upon completion of the combination, existing Aon shareholders would own approximately 63% and existing WTW shareholders would own approximately 37% of the combined company on a fully diluted basis.

The transaction was approved by the shareholders of both WTW and Aon during meetings of the respective shareholders held on August 26, 2020. On June 16, 2021, the U.S. Department of Justice filed suit in U.S. District Court in the District of Columbia against WTW and Aon, seeking to enjoin the proposed business combination between the two companies (among other relief). On July 26, 2021, WTW and Aon announced they had terminated the business combination agreement and that Aon had agreed to pay WTW $1 billion, in connection with such termination, which was received by WTW on July 27, 2021. The $1 billion income receipt has been included in transaction and integration, net in the condensed consolidated statements of operations. See Note 1 – Nature of Operations in Part I, Item 1 ‘Financial Statements’ in this Form 10-Q for additional information.

~~2022 Business Organization~~

During the third quarter of 2021, the Company announced its intention to align under two segments effective January 1, 2022. These changes are being made in conjunction with changes in the WTW leadership team, including the appointment of a new chief executive officer who will be the chief operating decision maker on that date. In 2022, the two new segments will be Health, Wealth and Career (‘HWC’) and Risk and Broking (‘RB’). The HWC segment will include businesses currently aligned under the Human Capital and Benefits segment, the Benefits Delivery and Administration segment, and the Investment business, currently under the Investment, Risk and Reinsurance segment. The RB segment will include businesses currently aligned under the Corporate Risk and Broking segment, as well as the Insurance Consulting and Technology business, currently under the Investment, Risk and Reinsurance segment.

Market Conditions

Typically, our business benefits from regulatory change, political risk or economic uncertainty. Insurance broking generally tracks the economy, but demand for both insurance broking and consulting services usually remains steady during times of uncertainty. We have some businesses, such as our health and benefits and administration businesses, which can be counter cyclical during the early period of a significant economic change.

Within our insurance and brokerage business, due to the cyclical nature of the insurance market and the impact of other market conditions on insurance premiums, commission revenue may vary widely between accounting periods. A period of low or declining premium rates, generally known as a ‘soft’ or ‘softening’ market, generally leads to downward pressure on commission revenue and can have a material adverse impact on our revenue and operating margin. A ‘hard’ or ‘firming’ market, during which premium rates rise, generally has a favorable impact on our revenue and operating margin. Rates, however, vary by geography, industry and client segment. As a result, and due to the global and diverse nature of our business, we view rates in the aggregate. Overall, we are currently seeing a modest but definite ~~improvement with~~increase in pricing in the market.

Market conditions in the broking industry in which we operate 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 markets for our consulting, technology and solutions, and marketplace services are affected by economic, regulatory and legislative changes, technological developments, and increased competition from established and new competitors. We believe that the primary factors in selecting a human resources or risk management consulting firm include reputation, the ability to provide measurable increases to shareholder value and return on investment, global scale, quality of service and the ability to tailor services to clients’ unique needs. In that regard, we are focused on developing and implementing technology, data and analytic solutions for both internal operations and for maintaining industry standards and meeting client preferences. We have made such investments from time to time and may decide, based on perceived business needs, to make investments in the future that may be ~~greater than~~different from past practice or what we currently anticipate. Conversely, particularly given the impact of the COVID-19 pandemic, we may make fewer information technology-based investments than previously anticipated, which could potentially create business operational risk.

With regard to the market for exchanges, we believe that clients base their decisions on a variety of factors that include the ability of the provider to deliver measurable cost savings for clients, a strong reputation for efficient execution and an innovative service delivery model and platform. Part of the employer-sponsored insurance market has matured and become more fragmented while other segments remain in the entry phase. As these market segments continue to evolve, we may experience growth in intervals, with periods of accelerated expansion balanced by periods of modest growth. In recent years, growth in the market for exchanges has slowed, and we expect this trend may continue.

From time to time, including but not limited to the period ~~that followed~~after the announcement of the proposed Aon combination through the period that has followed the termination of the proposed combination, we have lost (and may in the future continue to lose) colleagues who manage substantial client relationships or possess substantial experience or expertise; when we lose colleagues such as those, it often results in such colleagues competing against us. Further, the full impact of this competition may be delayed due to the timing of restrictive covenants or client renewals. We ~~expect~~believe that this dynamic,which was most pronounced in our ~~Corporate~~ Risk ~~and~~& Broking segment ~~in the second and third quarters of~~during 2021, ~~may cause~~has caused the segment’s recent near-term and expected growth rates for the remainder of 2022 to ~~steer towards the lower end of the range of industry-expected averages (that is, around mid-single digit growth~~).be meaningfully slower than other competitors. This dynamic may be difficult to predict, given that the adverse impact in future periods is more significant than in the ~~current period,~~periods in which employees departed. Growth has been and itwill be adversely affected by the fact that 2021 performance in a number of businesses, particularly commercial risk broking and health & benefits broking, benefited from revenue

from book sales, which is non-repeatable revenue. It is possible that growth could be different than expected and our results of operations could be significantly and adversely impacted.

See Part I, Item 1A ‘Risk Factors’ in our Annual Report on Form 10-K, filed with the SEC on February ~~23, 2021,~~24, 2022, for a discussion of risks that may affect our ability to compete.

~~Brexit~~

Following the occurrence of Brexit and the end of the formal transition period on December 31, 2020, a trade agreement has been established between the U.K. and E.U. As expected, the agreement largely addresses goods and not services, and the Company has therefore completed the establishment of appropriate arrangements for the continued servicing of client business in all relevant E.U. countries. Further negotiations between the U.K. and E.U. resulted in the agreement of a Memorandum of Understanding to address matters related to financial services, though the outcome of future engagement between the U.K. and E.U. in relation to services, including financial services and potential impact on the Company, are not yet fully known. For a further discussion of the risks of Brexit to the Company, see Part I, Item 1A ‘Risk Factors’ in our Annual Report on Form 10-K, filed with the SEC on February 23, 2021.

On an annual basis for 2021, although we expect that approximately 18% of our revenue from continuing operations will be generated in the U.K., we expect that approximately 12% of revenue from continuing operations will be denominated in Pounds sterling, as much of the insurance business is transacted in U.S. dollars. We expect that approximately 18% of our expenses from continuing operations will be denominated in Pounds sterling. We have a Company hedging strategy for this aspect of our business, which is designed to mitigate significant fluctuations in currency.

Risks and Uncertainties of the ~~COVID-19 Pandemic and the Related~~ Economic Environment

~~The~~Beginning with the COVID-19 pandemic, ~~has had an~~there have been adverse ~~impact on~~changes in global commercial activity, particularly onin the global supply chain and workforce availability, and ~~has contributed to~~ significant volatility in the global financial markets including, among other effects, occasional declines in the equity markets, changes in interest rates and reduced liquidity on a global basis. ~~With regard~~

Outlook Following Russia Divestiture

In the third quarter of 2022, we completed the transfer of ownership of our Russian subsidiaries to local management and, given current conditions, do not anticipate resuming operations in Russia within the foreseeable future. The ~~extent to which COVID-19 impacts~~Russian entities were primarily within our business and financial position will depend on future developments, which are difficult to predict. These future developments may include the severity and scope of the COVID-19 outbreak, which may unexpectedly change or worsen, and the types and duration of measures imposed by governmental authorities to contain the virus or address its impact.Risk & Broking segment. We ~~continue to expect~~have estimated that the ~~COVID-19 pandemic~~annualized run-rate impact from the divestiture of our Russian operations is approximately $120 million of revenue. Additionally, the Russian business was highly profitable, with operating margins in excess of double the enterprise-level margins. Because we did not receive significant proceeds in connection with the divestiture with which to reinvest in the business, the lost profits will adversely impact earnings, margins and ~~the related impacts on the wider economic environment will negatively impact our revenue~~cash flow. See ‘Disclaimer Regarding Forward-looking Statements’ and ~~operating results in fiscal 2021. We believe that these trends and uncertainties are similar to those faced by other comparable registrants as a result of the pandemic~~. ~~See~~ Part I,II, Item 1A ‘Risk Factors’ ~~in our Annual~~of this Quarterly Report on Form ~~10-K, filed with the SEC on February 23, 2021~~10-Q for a discussion of ~~actual~~the risks associated with expense actions.

Segment Reorganization

On January 1, 2022, WTW realigned to provide its comprehensive offering of services and ~~potential impacts of COVID-19 on our~~solutions to clients across two business ~~clients~~segments: Health, Wealth & Career and ~~operations.~~

~~Daily Operations -~~ ~~We continue to closely monitor the spread and impact of COVID-19, including the availability of vaccines, while adhering to government health directives.~~ The Company continues to have its own restrictions on business travel, office access, and meetings and events, but is actively developing its return-to-work plans with a focus on safe utilization based on appropriate social-distancing guidelines. We have thorough business continuity and incident management processes in place that have been activated, including split team operations and work-from-home protocols for essential workers which continue to be globally effective. We are communicating frequently with clients and critical vendors, while meeting our objectives via remote working capabilities, overseen and coordinated by our incident management response team. While no contingency plan can eliminate all risk of temporary service interruption, we regularly assess and update our plans to help mitigate reasonable risks to the extent possible.

~~Financial Statement Overview~~

~~For all financial information presented herein, the operating results of Willis Re have been reclassified as discontinued operations (see Note~~ ~~3 – Divestitures in Part I, Item 1 ‘Financial Statements’ in this Form 10-Q for additional information)~~.

~~The table below sets forth our summarized condensed consolidated statements of comprehensive income and data as a percentage of revenue for the periods indicated.~~

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

($ in millions, except per share data)

Revenue

$
1,973

100
%

$
1,897

100
%

$
6,292

100
%

$
5,946

100
%
Costs of providing services

Salaries and benefits

1,255

64
%

1,238

65
%

3,991

63
%

3,807

64
%
Other operating expenses

385

20
%

370

20
%

1,169

19
%

1,210

20
%
Depreciation

69

3
%

73

4
%

212

3
%

237

4
%
Amortization

85

4
%

108

6
%

285

5
%

347

6
%
Transaction and integration, net
��

(952
)

(48
)%

42

2
%

(877
)

(14
)%

65

1
%
Total costs of providing services

842

1,831

4,780

5,666

Income from operations

1,131

57
%

66

3
%

1,512

24
%

280

5
%
Interest expense

(50
)

(3
)%

(61
)

(3
)%

(161
)

(3
)%

(184
)

(3
)%
Other income, net

105

5
%

156

8
%

617

10
%

321

5
%
INCOME FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES

1,186

60
%

161

8
%

1,968

31
%

417

7
%
Provision for income taxes

(267
)

(14
)%

(42
)

(2
)%

(386
)

(6
)%

(133
)

(2
)%
INCOME FROM CONTINUING OPERATIONS

919

47
%

119

6
%

1,582

25
%

284

5
%
(LOSS)/INCOME FROM DISCONTINUED
   OPERATIONS, NET OF TAX

(12
)

(1
)%

3

—
%

247

4
%

253

4
%
Income attributable to non-controlling interests

(4
)

—
%

(1
)

—
%

(9
)

—
%

(17
)

—
%
NET INCOME ATTRIBUTABLE TO WILLIS
   TOWERS WATSON

$
903

46
%

$
121

6
%

$
1,820

29
%

$
520

9
%
Diluted earnings per share

$
6.99

$
0.93

$
14.00

$
3.99

~~Consolidated Revenue (Continuing Operations)~~

Revenue was $2.0 billion for the three months ended September 30, 2021, compared to $1.9 billion for the three months ended September 30, 2020, an increase of $76 million, or 4%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 7% for the three months ended September 30, 2021. Revenue for the nine months ended September 30, 2021 was $6.3 billion, compared to $5.9 billion for the nine months ended September 30, 2020, an increase of $346 million, or 6%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 6% for the nine months ended September 30, 2021. The increases to our as-reported revenue for both the current and prior-year periods were driven by strong performances in all segments.

Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the three months ended September 30, 2021, currency translation increased our consolidated revenue by $27 million. For the nine months ended September 30, 2021, currency translation increased our consolidated revenue by $190 million. The primary currencies driving theseRisk & Broking. These changes were ~~the Pound sterling and Euro.~~

The following table details our top five markets based on the percentage of consolidated revenue (in U.S. dollars) from the countries where work was performed for the nine months ended September 30, 2021. These figures do not represent the currency of the related revenue, which is presented in the next table.

~~Geographic Region~~	~~% of Revenue~~
~~United States~~		49	%
~~United Kingdom~~		19	%
~~France~~		5	%
~~Canada~~		3	%
~~Germany~~		3	%

~~The table below details the percentage of our revenue and expenses by transactional currency for the nine months ended September 30, 2021.~~

Transactional Currency

Revenue

Expenses ⁽ⁱ⁾

U.S. dollars

55
%

52
%
Pounds sterling

13
%

19
%
Euro

17
%

13
%
Other currencies

15
%

16
%

~~(i)~~

These percentages exclude certain expenses for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. These items include amortization of intangible assets and transaction and integration, net.

The following tables set forth the total revenue for the three and nine months ended September 30, 2021 and 2020 and the components of the changes in total revenue for the three and nine months ended September 30, 2021, as compared to the prior-year period:

Components of Revenue Change ⁽ⁱ⁾

As

Constant

Three Months Ended September 30,

Reported

Currency

Currency

Acquisitions/

Organic

2021

2020

Change

Impact

Change

Divestitures

Change

($ in millions)

Revenue

$
1,973

$
1,897

4%

1%

3%

(4)%

7%

Components of Revenue Change ⁽ⁱ⁾

As

Constant

Nine Months Ended September 30,

Reported

Currency

Currency

Acquisitions/

Organic

2021

2020

Change

Impact

Change

Divestitures

Change

($ in millions)

Revenue

$
6,292

$
5,946

6%

3%

3%

(4)%

6%

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

~~Definitions of Constant Currency Change and Organic Change are included under the section entitled ‘Non-GAAP Financial Measures’ elsewhere within Item 2 of this Form 10-Q.~~

~~Segment Revenue~~

~~The segment descriptions below should be read~~made in conjunction with changes in the ~~full descriptions~~WTW leadership team, including the appointment of ~~our businesses contained in Part I, Item~~a new chief executive officer who succeeded the prior CEO as the chief operating decision maker on that date. Prior to January 1, ~~‘Business’ within our Annual Report on Form 10-K, filed with~~2022, we operated across four segments: Human Capital and Benefits; Corporate Risk and Broking; Investment, Risk and Reinsurance; and Benefits Delivery and Administration. Following the ~~SEC on February 23, 2021.~~

~~Segment revenue excludes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursed expenses); however, these amounts are included in consolidated revenue.~~

~~The Company experiences seasonal fluctuations in its revenue. Revenue is typically higher during~~realignment, the ~~Company’s first and fourth quarters due primarily to the timing of broking-related activities.~~

~~Impact~~two new segments consist of the ~~COVID-19 Pandemic on our Segments~~following businesses:

•

The COVID-19 pandemic has had, and is projected to continue to have, an impact on certain of our service offerings. These impacts, which primarily affect our revenue, have been negative in some instances and positive in others and may inHealth, Wealth & Career segment includes businesses previously aligned under the ~~future be material in either event.~~ ~~In addition, the potential negative impacts on our results may lag behind the developments to date~~ related to the COVID-19 pandemic. We have thus far seen the impact of COVID-19 primarily on our business offerings that are discretionary in nature, such as consultative project work, which spans our segments, but primarily affected our HCB segment. However, most of the services we provide, including broking for various insurance products, compliance and valuation services, risk mitigation and outsourced administration for both pension and health and welfare plans, are considered non-discretionary to our clients and recurring in nature. We have seen that these non-discretionary businesses are the least impacted of our offerings, and while we expect that trend to continue, our non-discretionary businesses may be adversely affected due to changing demands in the market.

We expect to continue to experience unpredictable volatility in demand around our discretionary services and solutions. Clients may defer or delay decision-making on planned work or seek to terminate existing agreements for these discretionary services and solutions.

We recognize that the broad, global nature of the COVID-19 crisis has generally impacted the liquidity of our clients and led to disruptions in workforce availability. We continue to monitor the global outbreak of the COVID-19 pandemic and are taking steps to mitigate the risks to us posed by its spread by working with our clients, colleagues, suppliers and other stakeholders. Due to the global breadth of the COVID-19 spread and the range of governmental and community reactions thereto, there is on-going uncertainty around its duration, severity, ultimate impact and the timing of recovery. ~~We will continue to monitor global developments in the rollout of vaccines and government rules and restrictions.~~ We believe the pandemic and workforce availability issues will continue to cause an extended disruption of economic activity for the remainder of 2021 and into 2022, and the impact on our consolidated results of operations, financial position and cash flows could be material. Meanwhile, although we cannot predict how long this situation will last, we continue to focus on maintaining a strong balance sheet, liquidity and financial flexibility.

Human Capital and Benefits ~~(‘HCB’)~~segment, the Benefits Delivery and Administration segment, and the Investment business, which was previously under the Investment, Risk and Reinsurance segment.

•

The Risk & Broking segment includes businesses previously aligned under the Corporate Risk and Broking segment, as well as the Insurance Consulting and Technology business, which was previously under the Investment, Risk and Reinsurance segment.

The following presents descriptions of our reorganized segments:

Health, Wealth & Career

The ~~HCB~~Health, Wealth & Career (‘HWC’) segment provides an array of advice, broking, solutions and ~~software~~technology for employee benefit plans, institutional investors, compensation and career programs, and the employee experience overall. Our portfolio of services support the interrelated challenges that the management teams of our ~~clients. HCB~~clients face across human resources (‘HR’) and finance.

HWC is the ~~largest segment~~larger of the ~~Company~~two segments of the Company. Addressing four key areas, Health, Wealth, Career and Benefits Delivery & Outsourcing, the segment is focused on addressing our clients’ people and risk needs to help them ~~take on the challenges of operating~~succeed in a global marketplace.

Health

The Health & Benefits (‘H&B’) business provides strategy and design consulting,plan management service and support, broking and administration across the full spectrum of health, wellbeing and other group benefit programs, including medical, dental, disability, life, voluntary benefits and other coverage. Our reach extends from small/mid-market clients to large-market and multinational clients, across the full geographic footprint of the Company, and to most industries. We can address our clients’ needs in more than 140 countries.

Our consultants help clients make strategic decisions on topics such as optimizing program spend; evaluating emerging vendors, point solutions and coverage options (including publicly-subsidized health insurance exchanges and private exchanges in the U.S.); and dealing with above-inflation-rate increases in healthcare costs. We also assist clients in selecting the appropriate insurance carriers to cover benefit risks and administer the programs. In addition to our consulting and broking services, we manage a number of collective purchasing initiatives, such as pharmacy and stop-loss, that allow employers to realize greater value from third-party service providers than they can achieve on their own.

With Global Benefits Management, our suite of global services supporting medical, dental and risk (e.g., life, disability) programs, we have a tailored offering for multinationals. This ~~segment~~offering includes a flexible set of ready-made solutions, proven technology and an integrated approach to service delivery that translates to a globally consistent, high-quality experience for our clients.

A meaningful portion of revenue in this business is ~~further strengthened~~from recurring work, though contracts may be annual or multi-year. Given the balance of revenue across consulting, broking and solutions, our revenue is somewhat weighted to the first quarter.

Wealth

Our wealth-related businesses include Retirement and Investment.

The Retirement business provides actuarial support, plan design, and administrative services for all forms of pension and retirement savings plans. Our colleagues help our clients assess the costs and risks of retirement plans on cash flow, earnings and the balance sheet, the effects of changing workforce demographics on their retirement plans, and retiree benefit adequacy and security. We offer clients a full range of integrated retirement consulting services and solutions to meet the needs of all types of employers, including those that continue to offer defined benefit plans and those that are reexamining their retirement benefit strategies. We help multinationals coordinate plan design and actuarial services across their complex global plans. We bring in-depth data analysis and perspective to their decision process, because we have tracked the retirement designs and financing strategies of companies around the world over many decades.

For clients that want to outsource some or all of their pension plan management, we offer broking services, as well as integrated solutions that can combine investment discretionary management, pension administration, core actuarial services, and communication and change management assistance.

Retirement relationships are generally long-term in nature, and client retention rates for this business are high. A significant portion of the revenue in this business is from recurring work, with ~~teams~~multi-year contracts that are driven by the heavily regulated nature of ~~international consultants who provide support through each~~pension plans and our clients’ annual needs for these services. Revenue for the Retirement business in some geographies is somewhat seasonal, as much of our ~~business units~~work pertains to calendar-year plan administration, financing, reporting and compliance; thus, revenue is typically more weighted to the ~~global headquarters of multinational clients~~first and ~~their foreign subsidiaries.~~

~~The following table sets forth HCB segment revenue for the three months ended September 30, 2021 and 2020, and the components~~fourth quarters of the ~~change in revenue for the three months ended September 30, 2021 from the three months ended September 30, 2020.~~fiscal year.

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

~~HCB segment revenue for the three months ended September 30, 2021~~Our Investment business provides advice and ~~2020 was $852 million~~discretionary investment management solutions to defined benefit and $796 million, respectively. On an organic basis, Talent and Rewards led the segment’s revenue growth, driven by strong market demand for rewards advisory work coupled with talent and compensation products. Health and Benefits revenue grew primarily from increased consulting work and commissions in North America alongside continued expansion of our local portfolios and global benefits management appointments outside of North America. Technology and Administrative Solutions revenue increased duedefined contribution pension plans as well as to new project and client activity in Great Britain. Retirement revenue was materially flat with growth in Great Britain driven by funding and Guaranteed Minimum Pension (‘GMP’) equalization work largely offset by a ~~decline in revenue in North America, resulting from decreased de-risking activity.~~

The following table sets forth HCB segment revenue for the nine months ended September 30, 2021 and 2020, and the components of the change in revenue for the nine months ended September 30, 2021 from the nine months ended September 30, 2020.

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

HCB segment revenue for the nine months ended September 30, 2021 and 2020 was $2.6 billion and $2.4 billion, respectively. On an organic basis, Talent and Rewards led the segment’s revenue growth, driven by strong market demand for broad-based talent and rewards advisory work coupled with talent and compensation products. Health and Benefits revenue grew primarily from increased consulting work in North America alongside continued expansion of our local portfolios and global benefits management appointments outside of North America. Retirement revenue increased with growth in Great Britain driven by funding and Guaranteed Minimum Pension (‘GMP’) equalization work and increased consulting project activity in Western Europe and International. Technology and Administrative Solutions revenue increased due to new project and client activity in Great Britain.

~~Corporate Risk and Broking (‘CRB’)~~

~~The CRB segment provides a broad~~ range of ~~risk advice, insurance broking~~other client types including insurers, endowments and ~~consulting services~~foundations, and private wealth investors. We provide a solution to a significant business problem faced by our clients, ~~worldwide, ranging from small businesses~~namely sustaining the resources and skills required to ~~multinational corporations. The segment delivers integrated global solutions tailored~~deliver a financial services product in highly competitive capital markets. We offer a flexible approach that adapts to a wide range of client needs and ~~underpinned~~circumstances, with the objective of higher returns, lower risk and lower costs within each client’s unique situation.

Our solutions range from single asset class activity, through complete management of entire pension plan assets including sophisticated liability hedging programs.

We bring together a broad array of specialist investment knowledge and skills across all asset classes, a high-quality execution platform, a cost advantage through our scale, and expert advisors with experience across all client types from the largest plans in the world to small corporate pension plans.

We have long-term relationships with our Investment clients, with the majority of our revenue driven by retainer contracts.

Career

Ourcareer-related offerings include advice, data, software and products to address clients’ total rewards and talent issues across the globe delivered through our Work & Rewards and Employee Experience businesses.

Within our Work & Rewards business, we help clients determine the best ways to get work done, the skills needed for jobs, and how to reward it. We address executive compensation and broad-based rewards. We advise our clients’ management and boards of directors on all aspects of executive pay programs, including base pay, annual bonuses, long-term incentives, perquisites and other benefits. Our focus is on aligning pay plans with an organization’s business strategy and driving desired performance. Our solutions incorporate proprietary market benchmarking data and ~~analytics.~~software to support compensation administration.

Our Employee Experience business focuses on the provision of solutions including employee insight and listening tools, talent assessment tools and services, communication and change management services.

Revenue for our career-related businesses is partly seasonal in nature, with heightened activity in the second half of the calendar year during the annual compensation, benefits, and survey cycles. While these businesses enjoy long-term relationships with many clients, work in several practices is often project-based and can be sensitive to economic changes. The ~~following table sets forth CRB segment revenue for~~businesses benefit from regulatory changes affecting our clients that require strategic advice, program changes and communication, as well as the ~~three months ended September 30, 2021~~focus on ESG as a component of executive and ~~2020,~~board pay, the redefinition of jobs, work location and career paths as technology disaggregates work, and the ~~components~~recalibration of ~~the change in revenue for the three months ended September 30, 2021 from the three months ended September 30, 2020.~~

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

CRB segment revenue for the three months ended September 30, 2021 and 2020 was $697 million and $649 million, respectively. On an organic basis, North America led the segment primarily from new business across M&A, FINEX, Construction and Aerospace alongside gains recorded in connection with book-of-business settlements. The gains from the book-of-business sales relate to settlements when colleagues depart for a competitor, which has the impact of increasing revenue in the quarter of the settlement. However, we expect these departures will result in decreasing revenue going-forward due to the increase in competition. Revenue in International, Great Britain and Western Europe also increased with new business generation and strong renewals across several insurance lines, most notably, in FINEX and Retail.

~~The following table sets forth CRB segment revenue for the nine months ended September 30, 2021 and 2020,~~pay and the ~~components of the change in revenue for the nine months ended September 30, 2021 from the nine months ended September 30, 2020.~~

~~(i)~~employee experience amidst shifting labor markets.

~~Components of revenue change may not add due to rounding.~~

CRB segment revenue for the nine months ended September 30, 2021 and 2020 was $2.3 billion and $2.1 billion, respectively. On an organic basis, North America led the segment with strong renewals, primarily in FINEX, alongside gains recorded in connection with book-of-business settlements. International and Great Britain revenue increased with new business generation primarily in the FINEX and Construction insurance lines. Revenue in Western Europe was materially flat as new business wins and renewal expansion was offset by challenges related to senior staff departures.

~~Investment, Risk and Reinsurance (‘IRR’)~~

The IRR segment uses a sophisticated approach to risk, which helps our clients free up capital and manage investment complexity. This segment works closely with investors, reinsurers and insurers to manage the equation between risk and return. Blending advanced analytics with deep institutional knowledge, IRR identifies new opportunities to maximize performance. This segment provides investment consulting and discretionary management services and insurance-specific services and solutions through reserves opinions, software, ratemaking, risk underwriting and reinsurance broking.

~~In August 2021, the Company entered into an agreement with Arthur J. Gallagher & Co. to sell Willis Re, with the transaction~~ ~~expected to be completed no later than the end of the first quarter of~~ 2022 (see Note 3 — Divestitures within Item 1 of this Quarterly Report on Form 10-Q for further information). As a result, we have reclassified revenue associated with Willis Re to discontinued operations within our condensed consolidated statements of comprehensive income, and therefore it is not included for each of the periods presented below.

In September 2020, the Company sold its Max Matthiessen business, and the sale of Miller, its wholesale insurance broking subsidiary, was completed on March 1, 2021 (see Note 3 — Divestitures within Item 1 of this Quarterly Report on Form 10-Q for further information).

The following table sets forth IRR segment revenue for the three months ended September 30, 2021 and 2020, and the components of the change in revenue for the three months ended September 30, 2021 from the three months ended September 30, 2020.

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

IRR segment revenue for the three months ended September 30, 2021 and 2020 was $172 million and $220 million, respectively. On an organic basis, advisory-related fees led the revenue growth in both our Insurance Consulting and Technology business and Investment business, which was further aided by increased contingent performance fees.

The following table sets forth IRR segment revenue for the nine months ended September 30, 2021 and 2020, and the components of the change in revenue for the nine months ended September 30, 2021 from the nine months ended September 30, 2020.

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

IRR segment revenue for the nine months ended September 30, 2021 and 2020 was $615 million and $716 million, respectively. On an organic basis, advisory-related fees led the revenue growth in both our Investment business and Insurance Consulting and Technology business. Revenue growth in these businesses was further aided by increased contingent performance fees and software sales. The growth was partially offset by a decline in Wholesale’s revenue in the first quarter as a result of headwinds across coverage lines coupled with a strategic shift in its operating model.

Benefits Delivery ~~and~~& Outsourcing

Our Benefits Delivery & Outsourcing businesses include Benefits Delivery & Administration (‘BDA’) and Technology and Administration Solutions (‘TAS’).

TheBDA ~~segment~~business provides primary medical and ancillary benefit exchange and outsourcing services to active employees and retirees across both the group and individual ~~markets.~~ markets, primarily in the U.S.

A significant portion of the revenue in this ~~segment~~business is recurring in nature, driven by either the commissions from the policies we sell, or from long-term service contracts with our clients that typically range from three to five years. Revenue across this ~~segment may be~~business is seasonal ~~driven by the magnitude~~ and ~~timing of client enrollment activities, which often occur during~~is generally higher in the fourth quarter as it is driven when typical annual enrollment activity occurs.

BDA provides services via two related offerings:

Benefits Outsourcing is focused on serving active employee groups for clients across the U.S. Working closely with ~~increased membership~~other HWC businesses, we use our proprietary technology to provide a suite of health and welfare and pension administration outsourcing services, including tools to enable benefit modeling, decision support, enrollment and benefit choice. Drawing on expertise in H&B and Retirement to create high-performing benefit plan designs, we believe we are well-positioned to help clients of all sizes simplify their benefits delivery, while lowering the total costs of benefits and related administration.

Individual Marketplace offers decision support processes and tools to connect consumers with insurance carriers in private individual and Medicare markets. Individual Marketplace serves both employer-based and direct-to-consumer populations through its end-to-end consumer acquisition and engagement platforms, which tightly integrate call routing technology, an efficient quoting and enrollment engine, a customer relations management system and deep links with insurance carriers. By leveraging its multiple distribution channels and diverse product portfolio, Individual Marketplace offers solutions to a broad consumer base, helping individuals compare, purchase and use health insurance products, tools and information for life.

Our TAS business provides pension outsourcing services to hundreds of clients across multiple industries. Our TAS team focuses on clients outside of the U.S. where our services are supported by high quality administration teams using robust technology platforms. Given the nature of the work, our revenue is distributed generally evenly across the year.

With ongoing servicing requirements and multi-year contracts in place, we have high client retention rates. We are the leading administrator among the 200 largest pension plans in the U.K., as well as a leader in Germany.

For both our defined benefit and defined contribution administration services, we use highly-automated processes and technology to enable benefit plan members to access and manage their records, perform self-service functions and improve their understanding of their benefits. Our technology also provides trustees and HR teams with timely management information to monitor activity and service levels and reduce administration costs.

Risk & Broking

The Risk & Broking (‘R&B’) segment provides a broad range of risk advice, insurance brokerage and consulting services to clients worldwide ranging from small businesses to multinational corporations.

The segment comprises two primary businesses:

Corporate Risk & Broking (‘CRB’)

The ‘CRB’ business places more than $25 billion of premiums into the insurance markets on an annual basis, and delivers integrated global solutions tailored to client needs, underpinned by data and analytics through a balanced matrix of global lines of business across all of the Company’s three geographical areas: North America, Europe (including Great Britain) and International.

The global lines of business include:

Property and Casualty — Property and Casualty provides property and liability insurance brokerage services across a wide range of industries and segments including real estate, healthcare and retail. We also arrange insurance products and services for our affinity client partners to offer to their customers, employees, or members alongside, or in addition to, their principal business offerings.

Aerospace —Aerospaceprovides specialist expertise to the aerospace and space industries. Our aerospace business provides insurance broking, risk management services, contractual and technical advisory expertise to aerospace clients worldwide, including the world’s leading airlines, aircraft manufacturers, air cargo handlers and other airport and general aviation companies. The specialist InSpace team is also prominent in providing insurance and risk management services to the space industry.

Construction — Our Construction business provides services that include insurance broking, claims, loss control and specialized risk advice for a wide range of construction projects and activities. Clients include contractors, project owners, public entities, project managers, consultants and financiers, among others.

Global Markets Direct & Facultative — Operating in the major wholesale reinsurance hubs across the world, including London, Bermuda, Singapore, Hong Kong and Shanghai, solutions are delivered both directly to clients for the most complex property and casualty risks and as facultative reinsurance placements where we serve as an intermediary for insurance companies. Facultative solutions are provided across various classes of risk for our insurer clients, some of which may also be direct clients of WTW. The aim is to deliver optimum results for our clients by getting the right risk to the right market by the right broker, be it local, wholesale or facultative every time.

Financial, Executive and Professional Risks (‘FINEX’) — FINEX encompasses all financial and executive risks, delivering client solutions that range from management and professional liability, employment practices liability, crime, cyber and M&A-related insurances to risk consulting and advisory services. Specialist teams provide risk consulting and risk transfer solutions to a broad spectrum of clients across a multitude of industries, as well as the financial and professional service sectors.

Financial Solutions — Financial Solutions provides insurance broking services and specialized risk advice related to credit and political risk and crisis management, including terrorism, kidnap and ransom and contingency risk. Clients include international banks, leasing companies, commodity traders, export credit agencies, multinational corporations and sporting institutions.

Surety —The Global Surety team provides expertise in placing bonds across all industries and around the world. A surety bond is a financial instrument that guarantees contractual performance, statutory compliance, and financial assurance for domestic and international companies.

Marine —Marineprovides specialist expertise to the maritime and logistics industries. Our Marine business provides insurance broking services related to hull and machinery, cargo, protection and indemnity, fine art and general marine liabilities, among others. Our Marine clients include, but are not limited to, ship owners and operators, shipbuilders, logistics operations, port authorities, traders, shippers, exhibitors and secure transport companies.

Natural Resources — Our Natural Resources practice encompasses the oil, gas and chemicals, mining and metals, power and utilities and renewable energy sectors. It provides sector-specific risk transfer solutions and insights, which include insurance broking, risk engineering, contractual reviews, wording analysis and claims management.

Insurance Consulting and Technology (‘ICT’)

ICT is a global business that provides advice and technology solutions to the insurance industry. We leverage our industry experience, strategic perspective and analytical skills to help clients measure and manage risk and capital, improve business performance and create a sustainable competitive advantage. Our services include software and technology, risk and capital management, products and product pricing, financial and regulatory reporting, financial and capital modeling, M&A, outsourcing and business management.

Transformation Program

Inthe fourth quarter of 2021, we initiated a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align our real estate footprint to our new ways of working. During the third quarter of 2022, we revised the expected costs and savings under the program and we now expect the program to generate annual cost savings in excess of $360 million by the end of 2024. The program is expected to incur cumulative costs of $630 million and capital expenditures of approximately $270 million, for a total investment of $900 million. The main categories of charges will be in the following four areas:

•

Real estate rationalization — includes costs to align the real estate footprint to the new ways of working (hybrid work) and includes breakage fees and the impairment of right-of-use assets and other related leasehold assets.

•

Technology modernization — these charges are incurred in moving to common platforms and technologies, including migrating certain platforms and applications to the cloud. This category will include the impairment of technology assets that are duplicative or no longer revenue-producing, as well as costs for technology investments that do not qualify for capitalization.

•

Process optimization — these costs will be incurred in the right-shoring strategy and automation of our operations, which will include optimizing resource deployment and appropriate colleague alignment. These costs will include process and organizational design costs, severance and separation-related costs and temporary retention costs.

•

Other — other costs not included above including fees for professional services, other contract terminations not related to the above categories and supplier migration costs.

Certain costs under the Transformation program are accounted for under ASC 420, Exit or Disposal Cost Obligation, and are included as restructuring costs in the condensed consolidated statements of comprehensive income. For the three and nine months ended September 30, 2022, restructuring charges under our Transformation program totaled $9 million and $71 million, respectively. Other costs incurred under the Transformation program are included in transaction and transformation, net and were $42 million and $73 million for the three and nine months ended September 30, 2022, respectively. From the actions taken through the third quarter of 2022, we have identified an additional $29 million of annualized run-rate savings during the quarter due to newly-realized opportunities and incremental sources of value, and $100 million of cumulative annualized run-rate savings identified to date since the inception of the program, which savings overall are primarily attributable to the reduction of real estate and technology costs, as well as process optimization. The benefits from the program began to be recognized during 2022.

For a discussion of some of the risks associated with the Transformation program, see Part I, Item 1A ‘Risk Factors’ in our Annual Report on Form 10-K, filed with the SEC on February 24, 2022.

Financial Statement Overview

The table below sets forth our summarized condensed consolidated statements of comprehensive income and data as a percentage of revenue for the periods indicated.


	Three Months Ended September 30,										Nine Months Ended September 30,
	2022					2021					2022					2021
	($ in millions, except per share data)
Revenue	$	1,953		100	%	$	1,973		100	%	$	6,144		100	%	$	6,292		100	%
Costs of providing services
Salaries and benefits		1,225		63	%		1,255		64	%		3,802		62	%		3,991		63	%
Other operating expenses		384		20	%		385		20	%		1,263		21	%		1,169		19	%
Depreciation		60		3	%		69		3	%		191		3	%		212		3	%
Amortization		71		4	%		85		4	%		239		4	%		285		5	%
Restructuring costs		9		—	%		—		—	%		71		1	%		—		—	%
Transaction and transformation, net		50		3	%		(952	)	(48	)%		108		2	%		(877	)	(14	)%
Total costs of providing services		1,799					842					5,674					4,780
Income from operations		154		8	%		1,131		57	%		470		8	%		1,512		24	%
Interest expense		(54	)	(3	)%		(50	)	(3	)%		(154	)	(3	)%		(161	)	(3	)%
Other income, net		85		4	%		105		5	%		205		3	%		617		10	%
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		185		9	%		1,186		60	%		521		8	%		1,968		31	%
Provision for income taxes		(1	)	—	%		(267	)	(14	)%		(63	)	(1	)%		(386	)	(6	)%
INCOME FROM CONTINUING OPERATIONS		184		9	%		919		47	%		458		7	%		1,582		25	%
INCOME/(LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX		8		—	%		(12	)	(1	)%		(27	)	—	%		247		4	%
Income attributable to non-controlling interests		(2	)	—	%		(4	)	—	%		(10	)	—	%		(9	)	—	%
NET INCOME ATTRIBUTABLE TO WTW	$	190		10	%	$	903		46	%	$	421		7	%	$	1,820		29	%
Diluted earnings per share from continuing operations	$	1.65				$	7.08				$	3.95				$	12.10

Consolidated Revenue (Continuing Operations)

Revenue for both the three months ended September 30, 2022 and 2021 was $2.0 billion, a decrease of $20 million, or 1%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 6% for the three months ended September 30, 2022. Revenue for the nine months ended September 30, 2022 was $6.1 billion, compared to $6.3 billion for the nine months ended September 30, 2021, a decrease of $148 million, or 2%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 3% for the nine months ended September 30, 2022. The increases in organic revenue were driven by both segments.

Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the three months ended September 30, 2022, currency translation decreased our consolidated revenue by $100 million. For the nine months ended September 30, 2022, currency translation decreased our consolidated revenue by $239 million. The primary currencies driving these changes were the Euro and Pound sterling.

The following table details our top five markets based on the percentage of consolidated revenue (in U.S. dollars) from the countries where work was performed for the nine months ended September 30, 2022. These figures do not represent the currency of the related revenue, which is presented in the next table.


Geographic Region	% of Revenue
United States		51	%
United Kingdom		19	%
France		5	%
Canada		3	%
Germany		3	%

The table below details the approximate percentage of our revenue and expenses from continuing operations by transactional currency for the nine months ended September 30, 2022.


Transactional Currency	Revenue			Expenses (i)
U.S. dollars		58	%		54	%
Pounds sterling		12	%		17	%
Euro		15	%		13	%
Other currencies		15	%		16	%

(i)

The following tables set forth the total revenue for the three and nine months ended September 30, 2022 and 2021 and the components of the changes in total revenue for the three and nine months ended September 30, 2022, as compared to the prior year periods. The components of the revenue change may not add due to rounding.

Components of Revenue Change

Less:

Constant

Less:

Three Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Revenue

1,953

1,973

(1)%

(5)%

(1)%

Components of Revenue Change

Less:

Constant

Less:

Nine Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Revenue

6,144

6,292

(2)%

(4)%

(2)%

Definitions of Constant Currency Change and Organic Change are included under the section entitled ‘Non-GAAP Financial Measures’ elsewhere within Item 2 of this Form 10-Q.

Segment Revenue

For further information on our segment reorganization and a full description of our businesses, please see ‘Segment Reorganization’ elsewhere within Part I, Item 2 of this Quarterly Report on Form 10-Q.

Segment revenue excludes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursed expenses); however, these amounts are included in consolidated revenue.

The Company experiences seasonal fluctuations in its revenue. Revenue is typically ~~effective January 1, after calendar year-end benefits elections.~~higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities.

Within the tables presented below, the components of revenue change provided may not add due to rounding. The prior-year segment information has been conformed to the current-year presentation.

HWC Revenue

The following table sets forth ~~BDA~~HWC segment revenue for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021 and the components of the change in revenue for the three months ended September 30, ~~2021~~2022 from the three months ended September 30, ~~2020.~~2021.

Components of Revenue Change

Less:

Constant

Less:

Three Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Segment revenue

1,162

1,168

(1)%

(5)%

—%

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

~~BDA~~HWC segment revenue for both the three months ended September 30, 2022 and 2021 was $1.2 billion. On an organic basis, all components of the segment contributed to growth, with Health and ~~2020~~Career leading the segment. Growth in our Health business was ~~$242 million~~driven by new client appointments and ~~$226 million, respectively. BDA’s~~increases in advisory work and product sales. Our Wealth businesses generated organic revenue ~~increase~~growth from higher levels of regulatory work in Great Britain and increased project activity related to financial market volatility, partially offset by headwinds from the negative impact of capital market performance. Our Career businesses grew revenue

organically with increased participation and sales in our compensation benchmarking surveys and through increased project activity. Benefits Delivery & Outsourcing organic revenue growth was led by ~~Individual Marketplace, primarily by TRANZACT, which generated revenue of $111 million in the third quarter with strong growth in~~ Medicare Advantage ~~and Life~~ sales. ~~Benefits Outsourcing revenue also increased, driven by its expanded client base.~~

The following table sets forth ~~BDA~~HWC segment revenue for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, and the components of the change in revenue for the nine months ended September 30, ~~2021~~2022 from the nine months ended September 30, ~~2020.~~2021.

Components of Revenue Change

Less:

Constant

Less:

Nine Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Segment revenue

3,565

3,580

—%

(3)%

—%

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

~~BDA~~HWC segment revenue for both the nine months ended September 30, 2022 and 2021 was $3.6 billion. Organic growth was led by the Health business primarily due to demand for products and advisory work combined with new client appointments. The Health business’ revenue also benefited from gains recorded in connection with book-of-business settlements. Career also contributed strong growth, driven by demand for our survey offerings, reward-based advisory services, compensation benchmarking products and increased project activity. Benefits Delivery & Outsourcing organic revenue increased, led by its expanded client base and Medicare Advantage sales. Organic growth was partially offset by a decline in Wealth revenue, principally due to headwinds from outsized performance fees earned in the prior year and capital market declines this year.

R&B Revenue

The following table sets forth R&B segment revenue for the three months ended September 30, 2022 and 2021 and the components of the change in revenue for the three months ended September 30, 2022 from the three months ended September 30, 2021.

Components of Revenue Change

Less:

Constant

Less:

Three Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Segment revenue

765

787

(3)%

(6)%

(3)%

R&B segment revenue for the three months ended September 30, 2022 and 2021 was $765 million and $787 million, respectively. On an organic basis, Corporate Risk & Broking generated organic revenue growth across all regions, primarily driven by our global lines of business, most notably in Aerospace, Natural Resources and FINEX. Insurance Consulting and Technology's organic revenue grew primarily as a result of new software sales. Book-of-business settlement activity was largely in line with prior year and did not meaningfully affect Corporate Risk and Broking's organic growth rate.

The following table sets forth R&B segment revenue for the nine months ended September 30, 2022 and 2021, and ~~2020~~the components of the change in revenue for the nine months ended September 30, 2022 from the nine months ended September 30, 2021.

Components of Revenue Change

Less:

Constant

Less:

Nine Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Segment revenue

2,508

2,596

(3)%

(5)%

(2)%

R&B segment revenue for the nine months ended September 30, 2022 and 2021 was ~~$771 million~~$2.5 billion and ~~$666 million,~~$2.6 billion, respectively. ~~BDA’s~~On an organic basis, CRB’s revenue grew across all regions, primarily driven by our global lines of business, most notably in Aerospace, Natural Resources and FINEX. ICT’s organic revenue ~~increase was led by Individual Marketplace, primarily by TRANZACT, which generated year-to-date revenue of $375 million with strong growth in Medicare Advantage~~grew from increased software sales and ~~Life sales. Benefits Outsourcing revenue also increased, driven by its expanded client base.~~advisory work.

Costs of Providing Services (Continuing Operations)

~~For all financial information presented herein,~~Total costs of providing services for the three months ended September 30, 2022 were $1.8 billion, compared to $842 million for the three months ended September 30, 2021, an increase of $957 million, or 114%. Total costs of providing services for the nine months ended September 30, 2022 were $5.7 billion, compared to $4.8 billion for the nine months ended September 30, 2021, an increase of $894 million, or 19%. These increases were primarily due to the prior-year period $1 billion income receipt related to the termination of our then-proposed Aon transaction, which resulted in lower total costs. See the following discussion for further details.

Salaries and Benefits

Salaries and benefits for the three months ended September 30, 2022 were $1.2 billion, compared to $1.3 billion for the three months ended September 30, 2021, a decrease of $30 million, or 2%. Salaries and benefits, as a percentage of revenue, were 63% and 64% for the three months ended September 30, 2022 and 2021, respectively.

Salaries and benefits for the nine months ended September 30, 2022 were $3.8 billion, compared to $4.0 billion for the nine months ended September 30, 2021, a decrease of $189 million, or 5%. Salaries and benefits, as a percentage of revenue, were 62% and 63% for the nine months ended September 30, 2022 and 2021, respectively. The decreases in both current-year periods are primarily due to lower incentive and compensation costs for the period.

Other Operating Expenses

Other operating ~~results~~expenses for the three months ended September 30, 2022 were $384 million, compared to $385 million for the three months ended September 30, 2021, a decrease of ~~Willis Re have been reclassified as discontinued operations~~$1 million. The decrease was primarily due to lower non-income-related tax expense and occupancy costs, partially offset by higher travel and entertainment costs and local office expenses. Other operating expenses for the nine months ended September 30, 2022 were $1.3 billion, compared to $1.2 billion for the nine months ended September 30, 2021, an increase of $94 million, or 8%. The increase was primarily due to asset impairments, mostly accounts receivables, related to Russian insurance contracts placed by U.K. brokers in the London market (see Note 3 –— Acquisitions and Divestitures inwithin Part I, Item 1 ‘Financial Statements’ in this Form 10-Q for additional information)., higher travel and entertainment costs, local office expenses and business insurance costs, partially offset by lower non-income-related tax expense and occupancy costs for the current year as compared to the prior year.

~~Total costs of providing services~~Depreciation

Depreciation for the three months ended September 30, 2022 was $60 million, compared to $69 million for the three months ended September 30, 2021, ~~were $842~~a decrease of $9 million, ~~compared to $1.8 billion~~or 13%. Depreciation for the ~~three~~nine months ended September 30, ~~2020, a decrease of $989~~2022 was $191 million, ~~or 54%. Total costs of providing services~~compared to $212 million for the nine months ended September 30, 2021, ~~were $4.8 billion, compared to $5.7 billion for the nine months ended September 30, 2020,~~ a decrease of ~~$886~~$21 million, or ~~16%~~10%. ~~These~~The quarter-over-quarter and year-over-year decreases were primarily due to a lower depreciable base of assets resulting from business disposals over the ~~$1 billion income receipt related to the termination~~last two years and a lower dollar value of ~~the proposed Aon transaction~~assets placed in service during ~~the current quarter. See the following discussion for further details.~~

~~Salaries and benefits~~2021.

~~Salaries and benefits~~Amortization

Amortization for the three months ended September 30, 2022 was $71 million, compared to $85 million for the three months ended September 30, 2021, were $1.3 billion, compared to $1.2 billion for the three months ended September 30, 2020, an increase of $17 million, or 1%. The increase this quarter was mostly due to higher incentive and benefit accruals as compared to the prior year. Salaries and benefits, as a percentage of revenue, represented 64% and 65% for the three months ended September 30, 2021 and 2020, respectively.

Salaries and benefits for the nine months ended September 30, 2021 were $4.0 billion, compared to $3.8 billion for the nine months ended September 30, 2020, an increase of $184 million, or 5%. The increase for the first nine months of 2021 is primarily due to higher incentive and benefit accruals for the period along with increases in our share-based compensation expense. Higher stock prices in 2021 drove most of the increase in share-based compensation expense, since our liability-classified awards are adjusted to fair value each quarter based on our share price. Salaries and benefits, as a percentage of revenue, represented 63% and 64% for the nine months ended September 30, 2021 and 2020, respectively.

~~Other operating expenses~~

Other operating expenses for the three months ended September 30, 2021 were $385 million, compared to $370 million for the three months ended September 30, 2020, an increase of $15 million, or 4%. The increase was mostly due to higher marketing and professional insurance costs, partially offset by lower non-income tax and local office costs for the current quarter as compared to the same period in the prior year. Other operating expenses were $1.2 billion for both the nine months ended September 30, 2021 and 2020, a decrease of ~~$41~~$14 million, or 3%. This improvement was primarily due to decreases in travel and entertainment costs, local office expenses, bad debt expense and non-income tax costs, partially offset by higher marketing and insurance costs for the first nine months of 2021 as compared to the same period in the prior year.

~~Depreciation~~

~~Depreciation for the three months ended September 30, 2021 was $69 million, compared to $73 million for the three months ended September 30, 2020, a decrease of $4 million, or 5%. The quarter-over-quarter decrease was due to a lower depreciable base of assets due to business disposals and reduced capital expenditures in 2021.~~ Depreciation for the nine months ended September 30, 2021 was $212 million, compared to $237 million for the nine months ended September 30, 2020, a decrease of $25 million, or 11%. The year-over-year decrease was primarily due to the prior year acceleration of depreciation of $35 million related to the abandonment of an internally-developed software asset prior to being placed in service. This decrease was partially offset by additional assets placed in service during 2020 and 2021.

~~Amortization~~

~~Amortization for the three months ended September 30, 2021 was $85 million, compared to $108 million for the three months ended September 30, 2020, a decrease of $23 million, or 21%~~16%. Amortization for the nine months ended September 30, ~~2021~~2022 was ~~$285~~$239 million, compared to ~~$347~~$285 million for the nine months ended September 30, ~~2020,~~2021, a decrease of ~~$62~~$46 million, or ~~18%~~16%. Our intangible amortization is generally more heavily weighted to the initial years of the useful lives of the related intangibles, and therefore amortization related to intangible assets will continue to decrease over time.

Restructuring Costs

Restructuring costs for the three and nine months ended September 30, 2022 were $9 million and $71 million, respectively. Restructuring costs primarily relate to the real estate rationalization and technology modernization components of the Transformation program (see ‘Transformation Program’ within this Part I, Item 2 and Note 6 — Restructuring Costs within Part I, Item 1 ‘Financial Statements’ of this Quarterly Report on Form 10-Q).

Transaction and ~~integration, net~~Transformation, Net

Transaction and ~~integration,~~transformation, net costs for the three months ended September 30, ~~2021 was~~2022 were $50 million, compared to income of $952 million ~~compared to $42 million of expenses~~ for the three months ended September 30, ~~2020.~~2021. Transaction and ~~integration,~~transformation, net costs for the nine months ended September 30, ~~2021 was~~2022 were $108 million, compared to income of $877 million ~~of income, compared to $65 million of expenses~~ for the nine months ended September 30, ~~2020. The~~2021. Transaction and transformation, net costs for the current year were comprised of compensation costs and consulting fees related to the Transformation program (see ‘Transformation Program’ within this Part I, Item 2), as well as legal fees and other transaction costs. Transaction and transformation, net income for ~~both~~ the ~~current quarter and year-to-date was primarily due to~~prior-year period consisted mostly of the $1 billion income receipt related to the termination of ~~the proposed~~our then-proposed combination with Aon, ~~transaction during the quarter,~~and was partially offset by ~~costs mostly related to the terminated proposed transaction. The expenses for the three and nine months ended September 30, 2020 consist of transaction costs, primarily~~ legal ~~fees~~ and other professional fees related to ~~the proposed combination with Aon prior to its termination.~~this terminated transaction.

Income from Operations

Income from operations for the three months ended September 30, ~~2021~~2022 was ~~$1.1 billion,~~$154 million, compared to ~~$66 million~~$1.1 billion for the three months ended September 30, ~~2020, an increase~~2021, a decrease of ~~$1.1 billion.~~$977 million. Income from operations for the nine months ended September 30, ~~2021~~2022 was ~~$1.5 billion,~~$470 million, compared to ~~$280 million~~$1.5 billion for the nine months ended September 30, ~~2020, an increase~~2021, a decrease of ~~$1.2~~$1.0 billion. The ~~increases~~

decreases in both the quarter and year-to-date results were ~~mostly~~primarily due to the prior-year $1 billion income receipt from the termination of the ~~proposed~~then-proposed Aon transaction, which resulted in lower total costs.

The lower revenue during the current year resulted from unfavorable foreign exchange and ~~higher revenue.~~recent business disposals.

Interest Expense

Interest expense for the three months ended September 30, ~~2021~~2022 was ~~$50~~$54 million, compared to ~~$61~~$50 million for the three months ended September 30, ~~2020, a decrease~~2021, an increase of ~~$11~~$4 million, or ~~18%~~8%. This increase was primarily due to new higher interest-bearing senior notes issued during the second quarter. Interest expense for the nine months ended September 30, ~~2021~~2022 was ~~$161~~$154 million as compared to ~~$184~~$161 million for the nine months ended September 30, ~~2020,~~2021, a decrease of ~~$23~~$7 million, or ~~13%~~4%. ~~These decreases were~~This decrease was primarily the result of lower average levels of indebtedness in the current year.

Other Income, Net

Other income, net for the three months ended September 30, ~~2021~~2022 was ~~$105~~$85 million, compared to ~~$156~~$105 million for the three months ended September 30, ~~2020,~~2021, a decrease of ~~$51~~$20 million, or 19%, due primarily ~~resulting from a~~ to lower ~~net gain on disposals of operations during~~pension income in the ~~current-year period~~current quarter..

Other income, net for the nine months ended September 30, ~~2021~~2022 was ~~$617~~$205 million, compared to ~~$321~~$617 million for the nine months ended September 30, ~~2020, an increase~~2021. Other income, net in the prior-year period consisted primarily of ~~$296 million, primarily resulting from~~ the net gain on ~~disposals of operations, mostly due to the~~ disposal of our Miller business (see Note 3 – Acquisitions and Divestitures in Part I, Item 1 ‘Financial Statements’ in this Form 10-Q)., which primarily accounted for the decrease in other income, net, in the current year.

Provision for Income Taxes

Provision for income taxes ~~on continuing operations~~for the three months ended September 30, 2022 was $1 million, compared to $267 million for the three months ended September 30, 2021, a decrease of $266 million. The effective tax rate was ~~$267 million, compared to $42 million~~0.7% for the three months ended September 30, ~~2020, an increase of $225 million. The effective tax rate was~~2022, and 22.5% for the three months ended September 30, ~~2021, and 26.6%~~2021. Provision for income taxes for the ~~three~~nine months ended September 30, ~~2020. Provision for income taxes on continuing operations~~2022 was $63 million, compared to $386 million for the nine months ended September 30, 2021, a decrease of $323 million. The effective tax rate was ~~$386 million, compared to $133 million~~12.1% for the nine months ended September 30, ~~2020, an increase of $253 million. The effective tax rate was~~2022 and 19.6% for the nine months ended September 30, ~~2021 and 31.9% for the nine months ended September 30, 2020.~~2021. These effective tax rates are calculated using extended values from ~~our~~the Company’s condensed consolidated statements of comprehensive income and are, therefore, more precise tax rates than can be calculated from rounded values. The ~~current~~prior-year quarter effective tax rate includes a $250 million estimated tax expense related to the income receipt of the termination payment, however the prior year effective tax rate for the three months ended September 30, 2020 was higher due to an additional deferred tax expense related to the enacted U.K. statutory tax rate change. The prior-year nine months effective tax rate was higher due to ~~additional~~the tax expense ~~recognized in connection~~associated with the ~~temporary provisions~~income receipt related to the termination of the then-proposed combination with Aon. Additionally, the current-quarter effective tax rate includes discrete tax benefits related to amending the Company’s U.S. federal and state tax returns to change certain elections available under the Coronavirus Aid, Relief, and Economic Security (‘CARES’) ~~Act.~~Act as well as excess tax benefits on executive share-based compensation.

~~(Loss)/Income~~Income/(loss) from Discontinued Operations, Net of Tax

~~Loss~~Income from discontinued operations, net of tax for the three months ended September 30, ~~2021~~2022 was ~~$12~~$8 million, compared to ~~income~~a loss from discontinued operations, net of tax of $3$12 million for the three months ended September 30, ~~2020, a decrease~~2021, an increase of ~~$15~~$20 million. ~~Income~~Loss from discontinued operations, net of tax for the nine months ended September 30, ~~2021~~2022 was ~~$247~~$27 million, compared to ~~$253~~income from discontinued operations, net of tax of $247 million for the nine months ended September 30, ~~2020,~~2021, a decrease of $6$274 million. The operations of our Willis Re business ~~have been~~were reclassified to discontinued operations upon our entering into an agreement to sell the business during the third quarter of 2021 (see Note 3 – Acquisitions and Divestitures in Part I, Item 1 ‘Financial Statements’ in this Form 10-Q). ~~See the following discussion for further details.~~

~~Revenue~~Gains and losses from discontinued operations in the current year are primarily attributable to the adjustments to the gain on disposal resulting from updating the purchase price and the operations of the deferred closing entities and run-off activity associated with the divestiture.

~~Revenue from discontinued operations~~Net Income Attributable to WTW

Net income attributable to WTW for the three months ended September 30, ~~2021~~2022 was ~~$111~~$190 million, compared to $112 million for the three months ended September 30, 2020, a decrease of $1 million. Revenue from discontinued operations for the nine months ended September 30, 2021 was $668 million, compared to revenue of $642 million for the nine months ended September 30, 2020, an increase of $26 million which was driven by new business wins and favorable renewal factors in the first half of the year.

~~Salaries and benefits~~

Salaries and benefits attributable to discontinued operations for the three months ended September 30, 2021 was $97 million, compared to $93 million for the three months ended September 30, 2020, an increase of $4 million. Salaries and benefits attributable to discontinued operations for the nine months ended September 30, 2021 was $291 million, compared to $281 million for the three months ended September 30, 2020, an increase of $10 million. The increases for both the three and nine months ended September 30, 2021 related to increased incentive accruals.

~~Other operating expenses~~

Other operating expenses attributable to discontinued operations for the three months ended September 30, 2021 was $29 million, compared to $12 million for the three months ended September 30, 2020, an increase of $17 million. Other operating expenses attributable to discontinued operations for the nine months ended September 30, 2021 were $60 million, compared to $43 million for the nine months ended September 30, 2020, an increase of $17 million. The increase in costs in 2021 is due primarily to transaction costs related to the pending sale of the business to ~~Arthur J. Gallagher & Co.~~

~~Depreciation and amortization~~

Depreciation and amortization was not material for the three months ended September 30, 2021 and 2020 and was $1 million and $2 million for the nine months ended September 30, 2021 and 2020, respectively.

~~Other income, net~~

Other income, net was not material for the three months ended September 30, 2021 and 2020 and was $1 million and $3 million for the nine months ended September 30, 2021 and 2020, respectively, which was entirely attributable to foreign currency transaction gains.

~~(Benefit from)/provision for income taxes on discontinued operations~~

~~The benefit from income taxes attributable to discontinued operations was $3 million, compared to a provision for income tax expense of $4~~$903 million for the three months ended September 30, 2021, ~~and 2020, respectively. The provisions for~~a decrease of $713 million, or 79%. This decrease was primarily due to the prior-year $1 billion income receipt related to the termination of our then-proposed combination with Aon, partially offset by lower income tax expense ~~were $70~~in the current quarter.

Net income attributable to WTW for the nine months ended September 30, 2022 was $421 million, ~~and $66 million~~compared to $1.8 billion for the nine months ended September 30, 2021, ~~and 2020, respectively.~~

~~Net Income Attributable to Willis Towers Watson~~

~~Net income attributable to Willis Towers Watson for the three months ended September 30, 2021~~a decrease of $1.4 billion, or 77%. This decrease was $903 million, compared to $121 million for the three months ended September 30, 2020, an increase of $782 million. Net income attributable to Willis Towers Watson for the nine months ended September 30, 2021 was $1.8 billion, compared to $520 million for the nine months ended September 30, 2020, an increase of $1.3 billion. The increases for both periods were primarily due to the prior-year $1 billion income receipt ~~from~~related to the termination of our then-proposed combination with Aon, the ~~proposed Aon transaction and higher revenue, with the year-to-date results also benefitting from~~prior-year gain on the sale of ~~our~~the Miller business, and lower net income from the discontinued operations of our Willis Re business, partially offset by lower incentive compensation accruals in the ~~first quarter of 2021 (see Note 3 – Divestitures in Part I, Item 1 ‘Financial Statements’ in this Form 10-Q).~~current-year period.

Liquidity and Capital Resources

Executive Summary

Our principal sources of liquidity are funds generated by operating activities, available cash and cash equivalents and amounts available under our revolving credit facilities and any new debt ~~offerings, which were subject to the limitations set forth in the Aon combination agreement prior to the Termination.~~offerings.

~~The COVID-19 pandemic~~There has ~~contributed to~~been significant volatility in financial markets, including occasional declines in equity markets, inflation and changes in interest rates and reduced liquidity on a global basis. Specific to ~~Willis Towers Watson,~~WTW, over the past two years, the COVID-19 pandemic ~~has~~ had aan initial negative impact on discretionary work we perform for our clients, ~~although~~but we ~~have seen a~~subsequently saw increased demand for these services begin to return in the second quarter of 2021 and ~~continue through the third quarter of 2021.~~has continued during 2022. We continue to have decreased spending on travel and associated expenses and third-party contractors, and we have the ability to contain spending on discretionary projects and certain capital expenditures.

Based on our current balance sheet and cash flows, current market conditions and information available to us at this time, we believe that ~~Willis Towers Watson~~WTW has access to sufficient liquidity, which includes all of the borrowing capacity available to draw against our ~~recently-amended and restated~~ $1.5 billion revolving credit facility, ~~(see Note 18 — Subsequent Event in Part I, Item 1 ‘Financial Statements’ in this Quarterly Report on Form 10-Q for further information),~~ to meet our cash needs for the next twelve months, including investments in the business for growth, scheduled debt repayments, share repurchases and dividend payments. During the nine months ended September 30 ~~2021,~~2022, we ~~made payments~~completed an offering of ~~$185~~$750 million ~~(net~~aggregate principal amount of ~~reimbursements) for~~4.650% senior notes due 2027, using the ~~settlement~~proceeds in part to repay in full our €540 million ($582 million on the date of ~~obligations related~~repayment) aggregate principal amount of 2.125% Senior Notes due 2022 ($594 million including accrued interest), which were to mature during the second quarter of 2022. Additionally, during the nine months ended September 30, 2022, our board of directors approved a $1.0 billion increase to the Stanford and Willis Towers Watson merger-related securities litigations, and we repaid in full the $450 million of 3.500% senior notes which matured in the third quarter of 2021 and the $500 million of 5.750% senior notes which matured in the first quarter of 2021, along with the respective related interest, using currently available cash. During the third quarter of 2021 we also restarted ourexisting share repurchase ~~programs~~program, and during the nine months ended September 30, 2022 we repurchased $1$3.1 billion of ~~stock, and have~~shares, with remaining authorization to repurchase ~~a further $4.5~~an additional $1.8 billion.

~~Additionally, the operating results~~From time to time, we will consider whether to repurchase shares based on many factors, including market and ~~balance sheets of Willis Re were reclassified to~~economic conditions, applicable legal requirements and other business considerations. The share repurchase program has no termination date and may be suspended or discontinued ~~operations during the quarter. Willis Re’s cash balances~~ at ~~September 30, 2021 and December 31, 2020 were $53 million and $50 million, respectively.~~any time.

Before its disposal last year, Willis Re’s operating cash flows ~~approximate~~approximated its pre-tax income and any adjustments for working capital movements (see Note 3 — Acquisitions and Divestitures in Part I, Item 1 ‘Financial Statements’ inwithin this Quarterly Report on Form ~~10-Q for further information),~~10-Q). Certain costs historically allocated to the Willis Re business are included in continuing operations and iswere retained following the disposal, but are expected to be partially offset by reimbursements through ~~a Transition Services Agreement.~~the TSA. Costs incurred to service the TSA are expected to be reduced as part of the Company’s Transformation program as quickly as possible when the services are no longer required by Gallagher.

Events that could change the historical cash flow dynamics discussed above include significant changes in operating results, potential future acquisitions or divestitures, material changes in geographic sources of cash, unexpected adverse impacts from litigation or regulatory matters, or future pension funding during periods of severe downturn in the capital markets.

Undistributed Earnings of Foreign Subsidiaries

~~We continue~~The Company continues to have certain subsidiaries ~~whose~~for which the earnings have not been deemed permanently reinvested and for which ~~we have~~it has been accruing estimates of the tax effects of such repatriation. In addition, in connection with the Willis Re divestiture, we have recorded an estimated deferred tax expense for certain Willis Re subsidiaries whose outside basis differences are no longer considered indefinitely reinvested. Excluding these certain subsidiaries, ~~we continue~~the Company continues to assert that the historical cumulative earnings for the remainder of ~~our~~its subsidiaries have been reinvested indefinitely, and therefore dodoes not provide deferred taxes on these amounts. If future events, including material changes in estimates of cash, working capital, long-term investment requirements or additional legislation relating to U.S. Tax Reform, necessitate that these earnings be distributed, an additional provision for income and foreign withholding taxes, net of credits, may be necessary. Other potential sources of cash may be obtained through the settlement of intercompany loans or return of capital distributions in a tax-efficient manner.

Cash and Cash Equivalents

Our cash and cash equivalents ~~(including the cash balances of Willis Re)~~ at September 30, ~~2021~~2022 totaled ~~$2.2~~$1.5 billion, compared to ~~$2.0~~$4.5 billion at December 31, ~~2020.~~2021. The ~~increase~~decrease in cash from December 31, ~~2020~~2021 to September 30, ~~2021~~2022 was due primarily ~~due~~ to the $1 billion income receipt related to the termination of the proposed Aon transaction and the net proceeds from the sale of our Miller business in the amount of $696 million along with strong operating results. However, the $1$3.1 billion of income receipt was offset by stock repurchases made during the third quarter of 2021 in the same amount. These additions to cash were further partially offset by the payments in full of our $450 million of 3.500% senior notes, $500 million of 5.750% senior notes, net legal settlement payments of $185 million (related to the Stanford and Willis Towers Watson merger settlements), and higher bonus payments and benefit-related items of $189 million made in the first half of 2021.share repurchases.

Additionally, we had all of the borrowing capacity available to draw against our ~~then-current $1.25~~$1.5 billion revolving credit facility at both September 30, ~~2021~~2022 and December 31, 2020. The facility was replaced on October 6, 2021 and we now have borrowing capacity of $1.5 billion under the new revolving credit facility. See Note 18 – Subsequent Event within Item 1 of this Quarterly Report on Form 10-Q for further information on the new revolving credit facility.2021.

Included within cash and cash equivalents at September 30, ~~2021~~2022 and December 31, ~~2020~~ 2021 are amounts held for regulatory capital adequacy requirements, including ~~$120~~$113 million and $88$120 million, respectively, held within our regulated U.K. entities.

Summarized Condensed Consolidated Cash Flows

The following table presents the summarized condensed consolidated cash flow information for the nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Nine Months Ended September 30,
	2022			2021
	(in millions)
Net cash from/(used in):
Operating activities	$	437		$	1,877
Investing activities		(58	)		361
Financing activities		(3,109	)		(2,256	)
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (i)		(2,730	)		(18	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(290	)		(99	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (i)		7,691			6,301
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (i)	$	4,671		$	6,184

Nine Months Ended September 30,

2021

2020

(in millions)

Net cash from/(used in):

Operating activities

$
1,877

$
1,206

Investing activities

577

(108
)
Financing activities

(2,305
)

(334
)
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED
CASH

149

764

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(24
)

(5
)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD ⁽ⁱ⁾

2,096

895

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD ⁽ⁱ⁾

$
2,221

$
1,654

(i)

The amounts of cash, cash equivalents and restricted cash, their respective classification on the condensed consolidated balance sheets, as well as their respective portions of the increase or decrease in cash, cash equivalents and restricted cash for each of the periods presented have been included in Note 19 — Supplemental Disclosures of Cash Flow Information within Part I, Item I ‘Financial Statements’ within this Quarterly Report on Form 10-Q.

~~(i)~~

Cash, cash equivalents and restricted cash included $6 million, $7 million, $7 million and $8 million of restricted cash at September 30, 2021, December 31, 2020, September 30, 2020 and December 31, 2019, respectively, which is included within prepaid and other current assets on our condensed consolidated balance sheets. Additionally, cash, cash equivalents and restricted cash included $53 million, $50 million, $56 million and $56 million of cash attributable to discontinued operations at September 30, 2021, December 31, 2020, September 30, 2020 and December 31, 2019, respectively, which is included within assets held for sale on our condensed consolidated balance sheets.

Cash Flows From Operating Activities

Cash flows from operating activities were $437 million for the nine months ended September 30, 2022, compared to $1.9 billion for the nine months ended September 30, ~~2021, compared to $1.2 billion~~2021. The $437 million of net cash from operating activities for the nine months ended September 30, ~~2020.~~ 2022 included net income of $431 million and $437 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $431 million. In addition to the prior-year income receipt of $1 billion related to the termination of the proposed Aon transaction, the decrease in cash flows from operations as compared to the prior year was due to additional tax payments, mostly related to this income receipt payment from Aon, and the elimination of cash generation resulting from the Willis Re divestiture.

The $1.9 billion of net cash from operating activities for the nine months ended September 30, 2021 included net income of $1.8 billion and $200 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $152 million. This increase in cash flows from operating activities as compared to the prior year was primarily due the $1 billion of income receipt related to the termination of the proposed Aon transaction partially offset by net legal

~~settlement payments of $185 million as well as $189 million of increased bonus and benefit-related payments made during the nine months ended September 30, 2021.~~

The $1.2 billion of net cash from operating activities for the nine months ended September 30, 2020 included net income of $537 million and $582 million of non-cash adjustments, as wells as favorable changes in operating assets and liabilities of $87 million.

Cash Flows ~~From/(Used~~(Used In)/From Investing Activities

Cash flows ~~from~~used in investing activities for the nine months ended September 30, ~~2021~~2022 were ~~$577~~$58 million as compared to cash flows ~~used in~~from investing activities of ~~$108~~$361 million for the nine months ended September 30, ~~2020.~~2021. The cash flows ~~from~~used in investing activities for the nine months ended September 30, ~~2021~~2022 primarily include capital expenditures and capitalized software additions of $150 million, acquisitions of $80 million, and cash and fiduciary funds transferred on disposal of $29 million, partially offset by sales of investments of $200 million. The cash flows from investing activities in the prior-year period primarily included the net proceeds from the sale of Miller of $696 million and another smaller sale of $30 million, partially offset by cash and fiduciary funds transferred on disposal of $216 million and capital expenditures and capitalized software additions of $149 million.

~~The cash flows used in investing activities in the prior year period were primarily driven by capital expenditures, capitalized software additionsand an acquisition during the first quarter of 2020.~~

Cash Flows Used In Financing Activities

Cash flows used in financing activities for the nine months ended September 30, 2022 were $3.1 billion. The significant financing activities included share repurchases of $3.1 billion, debt repayments of $590 million and dividend payments of $280 million, partially offset by $750 million of net proceeds from issuance of debt and $157 million of net proceeds from fiduciary funds held for clients.

Cash flows used in financing activities for the nine months ended September 30, 2021 were $2.3 billion. The significant financing activities included share repurchases of $1.0 billion, debt repayments of $970 million, ~~along with~~and dividend payments of $275 ~~million.~~

~~Cash flows used in financing activities~~million, partially offset by $49 million of net proceeds from fiduciary funds held for ~~the nine months ended September 30, 2020 were $334 million. The significant financing activities included dividend payments of $259 million and net debt-related payments of $39 million.~~clients.

~~Indebtedness~~43

Indebtedness

Total debt, total equity, and the capitalization ratios at September 30, ~~2021~~2022 and December 31, ~~2020~~2021 were as follows:


	September 30, 2021			December 31, 2020			September 30, 2022			December 31, 2021
	($ in millions)						($ in millions)
Long-term debt	$	3,993		$	4,664		$	4,470		$	3,974
Current debt		644			971			250			613
Total debt	$	4,637		$	5,635		$	4,720		$	4,587

Total Willis Towers Watson shareholders’ equity	$	11,393		$	10,820
Total WTW shareholders’ equity							$	9,838		$	13,260

Capitalization ratio		28.9	%		34.2	%		32.4	%		25.7	%

The capitalization ratio ~~decreased~~increased from December 31, ~~2020~~2021 primarily due to ~~the August 2021 repayment of our $450 million 3.500% senior notes and March 2021 repayment of our~~ ~~$500 million 5.750% senior notes (see Note 9 — Debt in Part I, Item 1 ‘Financial Statements’~~ ~~in this Quarterly Report on Form 10-Q~~ ~~for further information),~~ as well as the increase in shareholders’ equity driven by strong earnings during the first nine months of the year, which included the gain on the Miller wholesale business and the income receipt related to the termination of the proposed Aon transaction, partially offset by $1.0$3.1 billion of share repurchases during the nine months ended September 30, 2022..

At September 30, ~~2021,~~2022, our mandatory debt repayments over the next twelve months include ~~$626~~$250 million outstanding on our ~~2.125%~~4.625% senior notes due 2022 and $19 million outstanding on our collateralized facility. In addition, our $1.25 billion revolving credit facility was set to expire on March 7, 2022, but was replaced on October 6, 2021 by our recently-amended and restated $1.5 billion revolving credit facility (see Note 18 — Subsequent Event in Part I, Item 1 ‘Financial Statements’ in this Quarterly Report on Form 10-Q for further information).2023.

At September 30, ~~2021~~2022 and December 31, ~~2020~~2021, we were in compliance with all financial covenants.

Fiduciary Funds

As an intermediary, we hold funds, generally in a fiduciary capacity, for the account of third parties, typically as the result of premiums received from clients that are in transit to insurers and claims due to clients that are in transit from insurers. We ~~report premiums, which~~also hold funds for clients of our benefits account businesses. These fiduciary funds are ~~held on account of, or due from, clients as~~included in fiduciary assets ~~with a corresponding liability due to the insurers. Claims held by or due to us, which are due to clients, are also shown as both Fiduciary assets and Fiduciary liabilities~~ on our condensed consolidated balance sheets. We present the equal and corresponding fiduciary liabilities related to these fiduciary funds representing amounts or claims due to our clients or premiums due on their behalf to insurers on our condensed consolidated balance sheets.

Fiduciary funds are generally required to be kept in regulated bank accounts subject to guidelines which emphasize capital preservation and liquidity; such funds are not available to service the Company’s debt or for other corporate purposes.

Notwithstanding the legal relationships with clients and insurers, the Company is entitled to retain investment income earned on certain of these fiduciary funds in accordance with industry custom and practice and, in some cases, as supported by agreements with insureds.

At September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had fiduciary funds of ~~$4.1~~$3.3 billion and ~~$4.3~~$3.4 billion, respectively, of which ~~$2.5 billion at both balance sheet dates presented~~$744 million and $719 million, respectively, are attributable to our Willis Re business.

Share Repurchase Program

The Company is authorized to repurchase shares, by way of redemption or otherwise, and will consider whether to do so from time to time, based on many factors, including market conditions. There are no expiration dates for our repurchase plans or programs.

~~On February 26, 2020, the board of directors approved a $251 million increase to the existing share repurchase program.~~ On July 26, 2021, the board of directors approved a $1.0 billion increase to the existing share repurchase program, ~~and~~which was previously at $500 million. Additionally, on September 16, 2021, the board of directors approved a $4.0 billion increase to the existing share repurchase program, and on May 25, 2022, approved a $1.0 billion increase to the existing share repurchase program. These ~~three~~ increases brought the total approved authorization to ~~$5.5~~$6.5 billion.

At September 30, ~~2021,~~2022, approximately ~~$4.5~~$1.8 billion remained on the current repurchase authority. The maximum number of shares that could be repurchased based on the closing price of our ordinary shares on September 30, ~~2021~~2022 of ~~$232.46~~$200.94 was ~~19,358,169.~~8,872,858.

During the three and nine months ended September 30, ~~2021,~~2022, the Company had the following share repurchase ~~activity~~:activity:


	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021		Three Months Ended September 30, 2022	Nine Months Ended September 30, 2022
Shares repurchased		4,455,544		4,455,544	1,788,525	13,792,853
Average price per share	$224.44		$224.44		$206.38	$224.01
Aggregate repurchase cost (excluding broker costs)	$1.0 billion		$1.0 billion		$369 million	$3.1 billion

During the first half of 2021, the Company had no share repurchase activity. A share repurchase prohibition existed under the transaction agreement for the proposed Aon combination. Following the Termination, there are no longer any contractual prohibitions on share repurchases.

Capital Commitments

Capital expenditures for fixed assets and software for internal use were ~~$109~~$100 million during the nine months ended September 30, ~~2021.~~2022. The Company estimates that there will be additional such expenditures, which includes those incurred under its Transformation program, in the range of ~~approximately $61~~$40 million to $60 million during the remainder of ~~2021.~~2022. We currently expect cash from operations to adequately provide for these cash needs. There have been no material changes to our capital commitments since December 31, ~~2020.~~2021.

Dividends

Total cash dividends of ~~$275~~$280 million were paid during the nine months ended September 30, ~~2021.~~2022. In ~~July 2021,~~August 2022, the board of directors approved ~~an increased~~a quarterly cash dividend of ~~$0.80~~$0.82 per share ($~~3.20~~3.28 per share annualized rate), which was paid on October ~~15, 2021~~17, 2022 to shareholders of record as of September 30, ~~2021.~~2022.

Supplemental Guarantor Financial Information

As of September 30, ~~2021, Willis Towers Watson~~2022, WTW has issued the following debt securities (the ‘notes’):

Willis North America Inc. (‘Willis North America’) has approximately $2.9 billion senior notes outstanding, of which $650 million were issued on May 16, 2017, $1.0 billion were issued on September 10, 2018, $1.0 billion were issued on September 10, 2019, and $275 million were issued on May 29, 2020; and

Willis North America Inc. (‘Willis North America’) has approximately $3.7 billion senior notes outstanding, of which $650 million were issued on May 16, 2017, $1.0 billion were issued on September 10, 2018, $1.0 billion were issued on September 10, 2019, $275 million were issued on May 29, 2020, and $750 million were issued on May 19, 2022; and

Trinity Acquisition plc has approximately $1.7 billion senior notes outstanding, of which $525 million were issued on August 15, 2013, $550 million were issued on March 22, 2016 and €540 million ($609 million) were issued on May 26, 2016, and a $1.25 billion revolving credit facility established on March 7, 2017, on which no balance is currently outstanding.

Trinity Acquisition plc has approximately $1.1 billion senior notes outstanding, of which $525 million were issued on August 15, 2013 and $550 million were issued on March 22, 2016, and a $1.5 billion revolving credit facility, on which no balance was outstanding at September 30, 2022.

The following table presents a summary of the entities that issue each note and those wholly-owned subsidiaries of the Company that guarantee each respective note on a joint and several basis as of September 30, ~~2021.~~2022. These subsidiaries are all consolidated by Willis Towers Watson plc (the ‘parent company’) and together with the parent company comprise the ‘Obligor group’.


Entity	Trinity Acquisition plc Notes	Willis North America Inc. Notes
Willis Towers Watson plc⁽ⁱ⁾	Guarantor	Guarantor
Trinity Acquisition plc	Issuer	Guarantor
Willis North America Inc.	Guarantor	Issuer
Willis Netherlands Holdings B.V.	Guarantor	Guarantor
Willis Investment UK Holdings Limited	Guarantor	Guarantor
TA I Limited	Guarantor	Guarantor
Willis Group Limited	Guarantor	Guarantor
Willis Towers Watson Sub Holdings Unlimited Company	Guarantor	Guarantor
Willis Towers Watson UK Holdings Limited	Guarantor	Guarantor

~~(i)The $500 million senior notes issued on March 17, 2011 by Willis Towers Watson plc, and related interest, were fully repaid on March 15, 2021.~~

The notes issued by Willis North America and Trinity Acquisition plc:

•

rank equally with all of the issuer’s existing and future unsubordinated and unsecured debt;

•

rank equally with the issuer’s guarantee of all of the existing senior debt of the Company and the other guarantors, including any debt under the Revolving Credit Facility;

•

are senior in right of payment to all of the issuer’s future subordinated debt; and

•

are effectively subordinated to all of the issuer’s secured debt to the extent of the value of the assets securing such debt.

•

~~rank equally with all of the issuer’s existing and future unsubordinated and unsecured debt;~~

•

~~rank equally with the issuer’s guarantee of all of the existing senior debt of the Company and the other guarantors, including any debt under the Revolving Credit Facility;~~

•

~~are senior in right of payment to all of the issuer’s future subordinated debt; and~~

•

~~are effectively subordinated to all of the issuer’s secured debt to the extent of the value of the assets securing such debt.~~

All other subsidiaries of the parent company are non-guarantor subsidiaries (‘the non-guarantor subsidiaries’).

Each member of the Obligor group has only a stockholder’s claim on the assets of the non-guarantor subsidiaries. This stockholder’s claim is junior to the claims that creditors have against those non-guarantor subsidiaries. Holders of the notes will only be creditors of the Obligor group and not creditors of the non-guarantor subsidiaries. As a result, all of the existing and future liabilities of the non-guarantor subsidiaries, including any claims of trade creditors and preferred stockholders, will be structurally senior to the notes. As of and for the periods ended September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the non-guarantor subsidiaries represented substantially all of the total assets and accounted for substantially all of the total revenue of the Company prior to consolidating adjustments. The non-guarantor subsidiaries have other liabilities, including contingent liabilities that may be significant. Each indenture does not contain any limitations on the amount of additional debt that the Obligor group and the non-guarantor subsidiaries may incur. The amounts of this debt could be substantial, and this debt may be debt of the non-guarantor subsidiaries, in which case this debt would be effectively senior in right of payment to the notes.

The notes are obligations exclusively of the Obligor group. Substantially all of the Obligor group’s operations are conducted through its non-guarantor subsidiaries. Therefore, the Obligor group’s ability to service its debt, including the notes, is dependent upon the net cash flows of its non-guarantor subsidiaries and their ability to distribute those net cash flows as dividends, loans or other payments to the Obligor group. Certain laws restrict the ability of these non-guarantor subsidiaries to pay dividends and make loans and advances to the Obligor group. In addition, such non-guarantor subsidiaries may enter into contractual arrangements that limit their ability to pay dividends and make loans and advances to the Obligor group.

Intercompany balances and transactions between members of the Obligor group have been eliminated. All intercompany balances and transactions between the Obligor group and the non-guarantor subsidiaries have been presented in the disclosures below on a net presentation basis, rather than a gross basis, as this better reflects the nature of the intercompany positions and presents the funding or funded position that is to be received or owed. The intercompany balances and transactions between the Obligor group and non-guarantor subsidiaries, presented below, relate to a number of items including loan funding for acquisitions and other purposes, transfers of surplus cash between subsidiary companies, funding provided for working capital purposes, settlement of expense accounts, transactions related to share-based payment arrangements and share issuances, intercompany royalty arrangements, intercompany dividends and intercompany interest. At September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the intercompany balances of the Obligor group with non-guarantor subsidiaries were net receivables of ~~$500~~$600 million ~~at both balance sheet dates~~ ~~presented~~ and $700 million, respectively, and net payables of ~~$8.3~~$10.1 billion and ~~$7.6~~$8.1 billion, respectively.

No balances or transactions of non-guarantor subsidiaries are presented in the disclosures other than the intercompany items noted above.

Presented below is certain summarized financial information for the Obligor group.


`	As of September 30, 2021		As of December 31, 2020		As of September 30, 2022		As of December 31, 2021
	(in millions)				(in millions)
Total current assets	$	201	$	161	$	199	$	243
Total non-current assets		676		671		728		862
Total current liabilities		6,850		5,116		8,379		7,747
Total non-current liabilities		6,551		8,434		6,593		5,298


	Nine months ended September 30, 2022
	(in millions)
Revenue	$	1,894
Income from operations		1,489
Income from operations before income taxes (i)		1,097
Net income		1,240
Net income attributable to WTW		1,240

Nine months ended
September 30, 2021

(in millions)

Revenue

$
246

Income from operations

1,027

Income from operations before income taxes ⁽ⁱ⁾

969

Net income

847

Net income attributable to Willis Towers Watson

847

(i)

Includes intercompany expense, net of the Obligor group from non-guarantor subsidiaries of ~~$45~~$81 million for the nine months ended September 30, ~~2021.~~2022.

Non-GAAP Financial Measures

In order to assist readers of our condensed consolidated financial statements in understanding the core operating results that ~~Willis Towers Watson’s~~WTW’s management uses to evaluate the business and for financial planning purposes, we present the following non-GAAP measures and their most directly comparable U.S. GAAP measure:


Most Directly Comparable U.S. GAAP Measure		Non-GAAP Measure
As reported change		Constant currency change
As reported change		Organic change
Income from operations/margin		Adjusted operating income/margin
Net income/margin		Adjusted EBITDA/margin
Net income attributable to ~~Willis Towers Watson~~WTW		Adjusted net income
Diluted earnings per share		Adjusted diluted earnings per share
Income from continuing operations before income taxes		Adjusted income before taxes
Provision for income taxes/U.S. GAAP tax rate		Adjusted income taxes/tax rate
Net cash from operating activities		Free cash flow

The Company believes that these measures are relevant and provide ~~useful~~pertinent information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.

Within the measures referred to as ‘adjusted’, we adjust for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. Some of these items may not be applicable for the current quarter, however they may be part of our full-year results. These items include the following:

•

Income from discontinued operations, net of tax – Adjustment to remove the after-tax income from discontinued operations and the after-tax gain attributable to the divestiture of our Willis Re business.

•

Restructuring costs and transaction and transformation, net – Management believes it is appropriate to adjust for restructuring costs and transaction and transformation, net when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses. We believe the adjustment is necessary to present how the Company is performing, both now and in the future when the incurrence of these costs will have concluded.

•

Impairment – Adjustment to remove the impairment related to the net assets of our Russian business that are held outside of our Russian entities.

•

Gains and losses on disposals of operations – Adjustment to remove the gains or losses resulting from disposed operations that have not been classified as discontinued operations.

•

Pension settlement and curtailment gains and losses – Adjustment to remove significant pension settlement and curtailment gains and losses to better present how the Company is performing.

•

Provisions for significant litigation – We will include provisions for litigation matters which we believe are not representative of our core business operations. These amounts are presented net of insurance and other recovery receivables.

•

Tax effect of the CARES Act – Relates to the incremental tax expense or benefit, primarily from the Base Erosion and Anti-Abuse Tax (‘BEAT’), generated from electing or changing elections of certain income tax provisions available under the CARES Act.

•

Tax effects of internal reorganizations – Relates to the U.S. income tax expense resulting from the completion of internal reorganizations of the ownership of certain businesses that reduced the investments held by our U.S.-controlled subsidiaries.

•

Restructuring costs and transaction and integration, net – Management believes it is appropriate to adjust for restructuring costs and transaction and integration, net when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses. We believe the adjustment is necessary to present how the Company is performing, both now and in the future when the incurrence of these costs will have concluded. Transaction and integration, net in 2021 includes the income receipt related to the termination of the proposed Aon transaction.

•

~~Gains and losses on disposals of operations – Adjustment to remove the gain or loss resulting from disposed operations.~~

•

~~Pension settlement and curtailment gains and losses – Adjustment to remove significant pension settlement and curtailment gains and losses to better present how the Company is performing.~~

•

~~Abandonment of long-lived asset – Adjustment to remove the depreciation expense resulting from internally-developed software that was abandoned prior to being placed into service.~~

•

~~Tax effect of statutory rate changes – Relates to the incremental tax expense or benefit from significant statutory income tax rate changes enacted in material jurisdictions in which we operate.~~

•

Tax effect of the CARES Act – Relates to the incremental tax expense impact, primarily from the Base Erosion and Anti-Abuse Tax (‘BEAT’), generated from electing certain income tax provisions of the CARES Act.

•

Tax effects of internal reorganization – Relates to the U.S. income tax expense resulting from the completion of internal reorganizations of the ownership of certain businesses that reduced the investments held by our U.S.-controlled subsidiaries.

These non-GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our condensed consolidated financial statements.

For all financial information presented herein (with the exception of Free Cash Flow), the operating results of Willis Re have been reclassified as discontinued operations (see Note 3 – Divestitures in Part I, Item 1 ‘Financial Statements’ in this Form 10-Q for additional information).47

Constant Currency Change and Organic Change

We evaluate our revenue on an as reported (U.S. GAAP), constant currency and organic basis. We believe presenting constant currency and organic information provides valuable supplemental information regarding our comparable results, consistent with how we evaluate our performance internally.

•

Constant currency change - Represents the year-over-year change in revenue excluding the impact of foreign currency fluctuations. To calculate this impact, the prior year local currency results are first translated using the current year monthly average exchange rates. The change is calculated by comparing the prior year revenue, translated at the current year monthly average exchange rates, to the current year as reported revenue, for the same period. We believe constant currency measures provide useful information to investors because they provide transparency to performance by excluding the effects that foreign currency exchange rate fluctuations have on period-over-period comparability given volatility in foreign currency exchange markets.

•

Organic change - Excludes the impact of fluctuations in foreign currency exchange rates as described above and the period-over-period impact of acquisitions and divestitures on current-year revenue. We believe that excluding transaction-related items from our U.S. GAAP financial measures provides useful supplemental information to our investors, and it is important in illustrating what our core operating results would have been had we not included these transaction-related items, since the nature, size and number of these transaction-related items can vary from period to period.

•

~~Constant currency change~~ – Represents the year-over-year change in revenue excluding the impact of foreign currency fluctuations. To calculate this impact, the prior year local currency results are first translated using the current year monthly average exchange rates. The change is calculated by comparing the prior year revenue, translated at the current year monthly average exchange rates, to the current year as reported revenue, for the same period. We believe constant currency measures provide useful information to investors because they provide transparency to performance by excluding the effects that foreign currency exchange rate fluctuations have on period-over-period comparability given volatility in foreign currency exchange markets.

•

~~Organic change~~ – Excludes the impact of fluctuations in foreign currency exchange rates as described above and the period-over-period impact of acquisitions and divestitures on current-year revenue. We believe that excluding transaction-related items from our U.S. GAAP financial measures provides useful supplemental information to our investors, and it is important in illustrating what our core operating results would have been had we not included these transaction-related items, since the nature, size and number of these transaction-related items can vary from period to period.

The constant currency and organic change results, and ~~reconciliations~~a reconciliation from the reported results for consolidated revenue are included in the ~~Consolidated~~‘Consolidated Revenue (Continuing Operations)’ section within this Form 10-Q. These measures are also reported by segment in the ~~Segment Revenue~~‘Segment Revenue’ section within this Form 10-Q.

Reconciliations of the reported changes to the constant currency and organic changes for the three and nine months ended September 30, ~~2021~~2022 from the three and nine months ended September 30, ~~2020~~2021 are as ~~follows:~~follows. The components of revenue change may not add due to rounding.

Components of Revenue Change

Less:

Constant

Less:

Three Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Revenue

1,953

1,973

(1)%

(5)%

(1)%

Components of Revenue Change⁽ⁱ⁾

As

Constant

Nine Months Ended September 30,

Reported

Currency

Currency

Acquisitions/

Organic

2021

2020

Change

Impact

Change

Divestitures

Change

($ in millions)

Revenue ⁽ⁱⁱ⁾

$
6,292

$
5,946

6%

3%

3%

(4)%

6%

Components of Revenue Change

Less:

Constant

Less:

Nine Months Ended September 30,

Reported

Currency

Acquisitions/

Organic

2022

2021

Change

Impact

Change

Divestitures

Change

($ in millions)

Revenue

6,144

6,292

(2)%

(4)%

(2)%

~~(i)~~

~~Components of revenue change may not add due to rounding.~~

~~(ii)~~

~~Excludes revenue (reclassified as discontinued operations) associated with our Willis Re business.~~

Adjusting for the impacts of foreign currency and acquisitions and disposals in the calculation of our organic activity, our revenue growth was 7%6% for the three months ended September 30, ~~2021~~2022 and 6%3% for the nine months ended September 30, ~~2021. The~~2022. These increases ~~to our~~in organic revenue ~~for both the current and prior-year periods~~ were driven by ~~strong performances in all~~both segments.

Adjusted Operating Income/Margin

We consider adjusted operating income/margin to be important financial measures, which are used internally to evaluate and assess our core operations and to benchmark our operating results against our competitors.

Adjusted operating income is defined as income from operations adjusted for impairment, amortization, restructuring costs, transaction and ~~integration,~~transformation, net and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted operating income margin is calculated by dividing adjusted operating income by revenue.

Reconciliations of income from operations to adjusted operating income for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
	(in millions)												($ in millions)
Income from operations	$	1,131		$	66		$	1,512		$	280		$	154		$	1,131		$	470		$	1,512
Adjusted for certain items:
Abandonment of long-lived asset		—			—			—			35
Impairment														—			—			81			—
Amortization		85			108			285			347			71			85			239			285
Transaction and integration, net		(952	)		42			(877	)		65
Provision for significant litigation		—			15			—			15
Restructuring costs														9			—			71			—
Transaction and transformation, net														50			(952	)		108			(877	)
Adjusted operating income	$	264		$	231		$	920		$	742		$	284		$	264		$	969		$	920

Income from operations margin		57.3	%		3.5	%		24.0	%		4.7	%		7.9	%		57.3	%		7.6	%		24.0	%
Adjusted operating income margin		13.4	%		12.2	%		14.6	%		12.5	%		14.5	%		13.4	%		15.8	%		14.6	%

Adjusted operating income increased for the three months ended September 30, ~~2021~~2022 to ~~$264~~$284 million, from ~~$231~~$264 million for the three months ended September 30, ~~2020~~2021 and increased for the nine months ended September 30, ~~2021~~2022 to ~~$920~~$969 million from ~~$742~~$920 million for the nine months ended September 30, ~~2020.~~ ~~These~~2021. The increases ~~resulted mostly from higher revenue.~~in adjusted operating income for the quarter and first nine months of the year were primarily due to lower incentive and compensation costs in the current-year periods, partially offset by lower revenue, which was attributable to unfavorable foreign exchange and recent business disposals.

Adjusted EBITDA/Margin

We consider adjusted EBITDA/margin to be important financial measures, which are used internally to evaluate and assess our core operations, to benchmark our operating results against our competitors and to evaluate and measure our performance-based compensation plans.

Adjusted EBITDA is defined as net income adjusted for ~~loss/(income)~~income from discontinued operations, net of tax, provision for income taxes, interest expense, impairment, depreciation and amortization, restructuring costs, transaction and ~~integration,~~transformation, net, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.

Reconciliations of net income to adjusted EBITDA for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
	(in millions)												($ in millions)
NET INCOME	$	907		$	122		$	1,829		$	537		$	192		$	907		$	431		$	1,829
Loss/(income) from discontinued operations, net of tax		12			(3	)		(247	)		(253	)
(Income)/loss from discontinued operations, net of tax														(8	)		12			27			(247	)
Provision for income taxes		267			42			386			133			1			267			63			386
Interest expense		50			61			161			184			54			50			154			161
Depreciation ⁽ⁱ⁾		69			73			212			237
Impairment														—			—			81			—
Depreciation														60			69			191			212
Amortization		85			108			285			347			71			85			239			285
Transaction and integration, net		(952	)		42			(877	)		65
Provision for significant litigation		—			15			—			15
Gain on disposal of operations		(23	)		(85	)		(380	)		(83	)
Restructuring costs														9			—			71			—
Transaction and transformation, net														50			(952	)		108			(877	)
(Gain)/loss on disposal of operations														(21	)		(23	)		11			(380	)
Adjusted EBITDA	$	415		$	375		$	1,369		$	1,182		$	408		$	415		$	1,376		$	1,369

Net income margin		46.0	%		6.4	%		29.1	%		9.0	%		9.8	%		46.0	%		7.0	%		29.1	%
Adjusted EBITDA margin		21.0	%		19.8	%		21.8	%		19.9	%		20.9	%		21.0	%		22.4	%		21.8	%

~~(i)~~

~~Includes abandonment of long-lived asset of $35 million for the nine months ended September 30, 2020.~~

Adjusted EBITDA for the three months ended September 30, ~~2021~~2022 was ~~$415~~$408 million, compared to ~~$375~~$415 million for the three months ended September 30, ~~2020,~~2021, and was $1.4 billion for both the nine months ended September 30, 2022 and 2021, ~~compared to $1.2 billion~~an increase of $7 million. The decrease in adjusted EBITDA for the ~~nine months ended September 30, 2020.~~ ~~These increases were~~quarter was primarily due to ~~higher revenue.~~lower revenue and lower pension income in the current-year period, partially offset by lower incentive and compensation costs for the period. The increase in adjusted EBITDA for the first nine months of the year was driven by reductions in compensation costs, partially offset by lower revenue, which was attributable to unfavorable foreign exchange and recent business disposals and lower pension income in the current-year period.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted net income is defined as net income attributable to ~~Willis Towers Watson~~WTW adjusted for ~~loss/(income)~~income from discontinued operations, net of tax, impairment, amortization, restructuring costs, transaction and ~~integration,~~transformation, net, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results and the related tax effect of those adjustments and the tax effects of internal reorganizations. This measure is used solely for the purpose of calculating adjusted diluted earnings per share.

Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average number of shares of common stock, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.

Reconciliations of net income attributable to ~~Willis Towers Watson~~WTW to adjusted diluted earnings per share for the three ~~months ended September 30, 2021~~ and ~~2020 are as follows:~~

Three Months Ended September 30,

2021

2020

($ in millions)

NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON

$
903

$
121

Adjusted for certain items:

Loss/(income) from discontinued operations, net of tax

12

(3
)
Amortization

85

108

Transaction and integration, net

(952
)

42

Provision for significant litigation

—

15

Gain on disposal of operations

(23
)

(85
)
Tax effect on certain items listed above ⁽ⁱ⁾

199

(31
)
Tax effect of the CARES Act

—

3

Adjusted net income

$
224

$
170

Weighted-average shares of common stock — diluted

129

130

Diluted earnings per share

$
6.99

$
0.93

Adjusted for certain items ⁽ⁱⁱ⁾:

Loss/(income) from discontinued operations, net of tax

0.09

(0.02
)
Amortization

0.66

0.83

Transaction and integration, net

(7.37
)

0.32

Provision for significant litigation

—

0.12

Gain on disposal of operations

(0.18
)

(0.65
)
Tax effect on certain items listed above ⁽ⁱ⁾

1.54

(0.24
)
Tax effect of the CARES Act

—

0.02

Adjusted diluted earnings per share

$
1.73

$
1.31

~~(i)~~

~~The tax effect was calculated using an effective tax rate for each item.~~

~~(ii)~~

~~Per share values and totals may differ due to rounding.~~

~~Reconciliations of net income attributable to Willis Towers Watson to adjusted diluted earnings per share for the~~nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	($ in millions)
NET INCOME ATTRIBUTABLE TO WTW	$	190		$	903		$	421		$	1,820
Adjusted for certain items:
(Income)/loss from discontinued operations, net of tax		(8	)		12			27			(247	)
Impairment		—			—			81			—
Amortization		71			85			239			285
Restructuring costs		9			—			71			—
Transaction and transformation, net		50			(952	)		108			(877	)
(Gain)/loss on disposal of operations		(21	)		(23	)		11			(380	)
Tax effect on certain items listed above (i)		(24	)		199			(116	)		144
Tax effect of the CARES Act		(24	)		—			(24	)		—
Tax effect on statutory rate change		—			—			—			40
Adjusted net income	$	243		$	224		$	818		$	785

Weighted-average shares of common stock — diluted		111			129			114			130

Diluted earnings per share	$	1.72		$	6.99		$	3.71		$	14.00
Adjusted for certain items (ii) :
(Income)/loss from discontinued operations, net of tax		(0.07	)		0.09			0.24			(1.90	)
Impairment		—			—			0.71			—
Amortization		0.64			0.66			2.10			2.19
Restructuring costs		0.08			—			0.62			—
Transaction and transformation, net		0.45			(7.37	)		0.95			(6.75	)
(Gain)/loss on disposal of operations		(0.19	)		(0.18	)		0.10			(2.92	)
Tax effect on certain items listed above (i)		(0.22	)		1.54			(1.02	)		1.11
Tax effect of the CARES Act		(0.22	)		—			(0.21	)		—
Tax effect on statutory rate change		—			—			—			0.31
Adjusted diluted earnings per share (ii)	$	2.20		$	1.73		$	7.20		$	6.04

Nine Months Ended September 30,

2021

2020

($ in millions)

NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON

$
1,820

$
520

Adjusted for certain items:

Income from discontinued operations, net of tax

(247
)

(253
)
Abandonment of long-lived asset

—

35

Amortization

285

347

Transaction and integration, net

(877
)

65

Provision for significant litigation

—

15

Gain on disposal of operations

(380
)

(83
)
Tax effect on certain items listed above ⁽ⁱ⁾

144

(96
)
Tax effect of statutory rate change

40

—

Tax effect of the CARES Act

—

38

Adjusted net income

$
785

$
588

Weighted-average shares of common stock — diluted

130

130

Diluted earnings per share

$
14.00

$
3.99

Adjusted for certain items ⁽ⁱⁱ⁾:

Income from discontinued operations, net of tax

(1.90
)

(1.95
)
Abandonment of long-lived asset

—

0.27

Amortization

2.19

2.66

Transaction and integration, net

(6.75
)

0.50

Provision for significant litigation

—

0.12

Gain on disposal of operations

(2.92
)

(0.64
)
Tax effect on certain items listed above ⁽ⁱ⁾

1.11

(0.74
)
Tax effect of statutory rate change

0.31

—

Tax effect of the CARES Act

—

0.29

Adjusted diluted earnings per share

$
6.04

$
4.52

(i)

The tax effect was calculated using an effective tax rate for each item.

(ii)

Per share values and totals may differ due to rounding.

~~(i)~~

~~The tax effect was calculated using an effective tax rate for each item.~~

~~(ii)~~

~~Per share values and totals may differ due to rounding.~~

Our adjusted diluted earnings per share increased for both the three and nine months ended September 30, ~~2021~~2022 as compared to the prior year due in part to a lower weighted-average outstanding share count attributable to our share repurchase activity in the current year. The increases to adjusted net income for the quarter and first nine months of the year were primarily due to ~~higher revenue.~~decreases in

incentive and compensation costs and lower tax expense for the current-year periods, partially offset by lower revenue, which was attributable to unfavorable foreign exchange and recent business disposals.

Adjusted Income Before Taxes and Adjusted Income Taxes/Tax Rate

Adjusted income before taxes is defined as income from operations before income taxes adjusted for impairment, amortization, restructuring costs, transaction and ~~integration,~~transformation, net, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate.

Adjusted income taxes/tax rate is defined as the provision for income taxes adjusted for taxes on certain items of impairment, amortization, restructuring costs, transaction and ~~integration,~~transformation, net, gains and losses on disposals of operations, the tax effects of internal reorganizations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes. Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate.

Management believes that the adjusted income tax rate presents a rate that is more closely aligned to the rate that we would incur if not for the reduction of pre-tax income for the adjusted items and the tax effects of internal reorganizations, which are not core to our current and future operations.

Reconciliations of income from ~~continuing~~ operations before income taxes to adjusted income before taxes and provision for income taxes to adjusted income taxes for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	($ in millions)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	$	185		$	1,186		$	521		$	1,968
Adjusted for certain items:
Impairment		—			—			81			—
Amortization		71			85			239			285
Restructuring costs		9			—			71			—
Transaction and transformation, net		50			(952	)		108			(877	)
(Gain)/loss on disposal of operations		(21	)		(23	)		11			(380	)
Adjusted income before taxes	$	294		$	296		$	1,031		$	996

Provision for income taxes	$	1		$	267		$	63		$	386
Tax effect on certain items listed above (i)		24			(199	)		116			(144	)
Tax effect of the CARES Act		24			—			24			—
Tax effect of statutory rate change		—			—			—			(40	)
Adjusted income taxes	$	49		$	68		$	203		$	202

U.S. GAAP tax rate		0.7	%		22.5	%		12.1	%		19.6	%
Adjusted income tax rate		16.8	%		23.2	%		19.7	%		20.3	%

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

($ in millions)

INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES

$
1,186

$
161

$
1,968

$
417

Adjusted for certain items:

Abandonment of long-lived asset

—

—

—

35

Amortization

85

108

285

347

Transaction and integration, net

(952
)

42

(877
)

65

Provision for significant litigation

—

15

—

15

Gain on disposal of operations

(23
)

(85
)

(380
)

(83
)
Adjusted income before taxes

$
296

$
241

$
996

$
796

Provision for income taxes

$
267

$
42

$
386

$
133

Tax effect on certain items listed above ⁽ⁱ⁾

(199
)

31

(144
)

96

Tax effect of statutory rate change

—

—

(40
)

—

Tax effect of the CARES Act

—

(3
)

—

(38
)
Adjusted income taxes

$
68

$
70

$
202

$
191

U.S. GAAP tax rate

22.5
%

26.6
%

19.6
%

31.9
%
Adjusted income tax rate

23.2
%

29.3
%

20.3
%

24.0
%
(i)

The tax effect was calculated using an effective tax rate for each item.

~~(i)~~

~~The tax effect was calculated using an effective tax rate for each item.~~

Our U.S. GAAP tax rates were ~~22.5%~~0.7% and ~~26.6%~~22.5% for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~19.6%~~12.1% and ~~31.9%~~19.6% for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~current~~prior-year quarter effective tax rate ~~includes a $250 million estimated~~was higher due to the tax expense associated with the income receipt related to the ~~income receipt~~termination of the ~~termination payment, however~~then-proposed combination with Aon. Additionally, the ~~prior year~~current-quarter effective tax rate includes discrete tax benefits related to amending the Company’s U.S. federal and state tax returns to change certain elections available under the CARES Act.

Our adjusted income tax rates were 16.8% and 23.2% for the three months ended September 30, ~~2020 was higher due to an additional deferred tax expense related to the enacted U.K. statutory tax rate change.~~

~~Our adjusted income tax rates were 23.2%~~2022 and ~~29.3% for the three months ended September 30,~~ 2021, ~~and 2020,~~ respectively, and ~~20.3%~~19.7% and ~~24.0%~~20.3% for the nine months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~Our~~The prior-year quarter adjusted tax rate ~~for the three and nine months ended September 30, 2021 are lower than the three and nine months ended September 30, 2020 primarily~~was higher due to ~~a partial valuation allowance release~~incremental BEAT expense. Additionally, the current-quarter adjusted tax rate is lower due to the discrete impact of excess tax benefits on ~~a U.K. capital loss carryforward.~~executive share-based compensation.

Free Cash Flow

Free cash flow is defined as cash flows from operating activities less cash used to purchase fixed assets and software for internal use. Free cash flow is a liquidity measure and is not meant to represent residual cash flow available for discretionary expenditures.

Management believes that free cash flow presents the core operating performance and cash generating capabilities of our business operations.

Reconciliations of cash flows from operating activities to free cash flow for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


	Nine Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2022			2021
	(in millions)						(in millions)
Cash flows from operating activities	$	1,877		$	1,206		$	437		$	1,877
Less: Additions to fixed assets and software for internal use		(109	)		(183	)		(100	)		(109	)
Free cash flow	$	1,768		$	1,023		$	337		$	1,768

The ~~favorable~~unfavorable movement in free cash flows in the first nine months of ~~2021~~2022 was due primarily ~~due~~ to the prior-year income receipt of $1 billion ~~of income receipt~~ related to the termination of the proposed Aon transaction, additional tax payments, mostly related to this income receipt payment, and ~~lower capital expenditures, partially offset by net legal settlement payments~~the elimination of ~~$185 million as well as $189 million of increased bonus and benefit-related payments made during~~cash generation resulting from the ~~period.~~

Willis Re divestiture.

~~Additionally,~~

Further, the free cash flow for ~~both~~ the ~~current and prior years include~~prior-year period presented includes the operating cash flows of Willis Re.Re. Willis Re’s operating cash flows ~~approximate~~approximated its pre-tax income and any adjustments for working capital movements (see Note 3 — Acquisitions and Divestitures inwithin Part I, Item 1 ‘Financial Statements’ in this ~~Quarterly Report on~~ Form 10-Q for ~~further~~additional information), ~~and~~the absence of which is expected to be partially ~~offset~~made up by reimbursements through ~~a Transition Services Agreement.~~the TSA.

Critical Accounting ~~Policies and~~ Estimates

There were no material changes from the Critical Accounting ~~Policies and~~ Estimates disclosed in our ~~2020~~ Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February ~~23, 2021.~~24, 2022.

ITEM 3. QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have considered changes in our exposure to market risks during the nine months ended September 30, ~~2021~~2022 and have determined that there have been no material changes to our exposure to market risks from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the SEC on February ~~23, 2021.~~24, 2022. However, we have provided the following information to supplement or update our disclosures on our Form 10-K.

~~LIBOR-Related Debt Instruments~~

In July 2017, the Financial Conduct Authority, the authority that regulates LIBOR, announced its intention to phase out LIBOR as a benchmark rate by the end of 2021. The Alternative Reference Rates Committee (‘ARRC’), a group of private-market participants convened by the Federal Reserve Board and the Federal Reserve Bank of New York to help ensure a successful transition from U.S. dollar LIBOR (‘USD-LIBOR’) to a more robust reference rate, has proposed that the Secured Overnight Financing Rate (‘SOFR’) represents the best alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a transition plan with specific steps and timelines designed to encourage the adoption of SOFR and guide the transition to SOFR from USD-LIBOR. Organizations are currently working on industry-wide and company-specific transition plans related to derivatives and cash markets exposed to USD-LIBOR. Similar efforts are underway to identify suitable replacement reference rates for LIBOR in other major currencies.

Subsequently, on March 5, 2021, ICE Benchmark Administration (‘IBA’) stated that as a result of its not having access to input data necessary to calculate LIBOR settings on a representative basis beyond the intended cessation dates as set forth below, it would have to cease publication of all 35 LIBOR settings immediately after December 31, 2021 for all GBP-, EUR-, CHF- and JPY-LIBOR settings as well as 1-week and 2-month USD-LIBOR settings. Effective after June 30, 2023, IBA will cease publishing overnight and 1-, 3-, 6- and 12-month USD-LIBOR settings.

As of September 30, 2021, the Company’s primary exposure was its $1.25 billion revolving credit facility which has subsequently been replaced with a new $1.5 billion revolving credit facility which contains appropriate LIBOR replacement language. The Company has a small, collateralized facility that we will renegotiate, or repay, prior to the end of 2021. In addition, the Company and its subsidiaries have entered into various intercompany notes indexed to LIBOR in various currencies. The Company, in preparation for a December 31, 2021 deadline, will amend, replace, or terminate the LIBOR-based intercompany notes as necessary to reflect new market benchmarks for the relevant loan currencies.

We have updated our Treasury workstation software to implement the new benchmarks and continue to monitor the LIBOR-related risks that may be inherent elsewhere in our business and are monitoring further proposals and guidance from the ARRC and other alternative-rate initiatives. While it is currently uncertain whether SOFR or another reference rate will be selected as the alternative to LIBOR, or whether other reforms will be enacted in response to the planned transition, we will make the appropriate changes when necessary.

Interest Income on Fiduciary Funds

As described in our Form 10-K, we are exposed to interest rate risk. Specifically, as a result of our operating activities, we receive cash for premiums and claims which we deposit in ~~short-term investments denominated in U.S. dollars~~high-quality bank term deposit and ~~other currencies.~~money market funds where permitted. We earn interest on these funds, which is included in our condensed consolidated financial statements as interest income. These funds are regulated in terms of access and the instruments in which they may be invested, most of which are short-term in maturity. As a result of measures taken by central banks around the world, rates offered on these investments have increased, in some cases significantly over the course of the year. As a result, interest income has improved substantially this year, with the greatest impact coming in the current quarter. Interest income in the future will be a function of the short-term rates we are able to obtain by currency and the cash balances available to invest in these instruments. At September 30, ~~2021,~~2022, we held ~~$2.2~~$1.8 billion of fiduciary funds invested in interest-bearing accounts. If short-term interest rates increased or decreased by 25 basis points, interest earned on these invested fiduciary funds, and therefore our interest income recognized, would increase or decrease by approximately $6$4 million on an annualized basis.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September 30, ~~2021,~~2022, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (‘CEO’) and the Chief Financial Officer (‘CFO’), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined by Exchange Act Rule 13a-15(e). Based upon

that evaluation, the CEO and the CFO concluded that the Company’s disclosure controls and procedures are effective in ensuring that the information required to be included in the Company’s periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the CEO and the CFO, as appropriate, to allow for timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal ~~controls~~control over financial reporting during the quarter ended September 30, ~~2021~~2022 that ~~have~~ materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting. Most of our employees who are involved in our financial reporting processes and controls continue to work remotely following the onset of the COVID-19 pandemic and are expected to do so for the foreseeable future. ~~We have~~COVID-19 has not ~~experienced~~had any specific impact to the design or operating effectiveness of our internal controls over financial reporting. ~~We are regularly monitoring and assessing the impact of the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.~~

Limitations on the Effectiveness of Controls

Management, including the CEO and CFO, does not expect that our disclosure controls and procedures will necessarily prevent all errors and all fraud. However, management does expect that the control system provides reasonable assurance that its objectives will be met. A control system, no matter how well designed and operated, cannot provide absolute assurance that the control system’s objectives will be met. In addition, the design of such internal controls must take into account the costs of designing and maintaining such a control system. Certain inherent limitations exist in control systems to make absolute assurances difficult, including the realities that judgments in decision-making can be faulty, that breakdowns can occur because of a simple error or mistake, and that individuals can circumvent controls. The design of any control system is based in part upon existing business conditions and risk assessments. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in business conditions or deterioration in the degree of compliance with policies or procedures. As a result, they may require change or revision. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected. Nevertheless, the disclosure controls and procedures are designed to provide reasonable assurance of achieving their stated objectives, and the CEO and CFO have concluded that the disclosure controls and procedures are effective at a reasonable assurance level.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are a party to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The disclosure called for by Part II, Item 1 regarding our legal proceedings is incorporated by reference herein from Part I, Item 1 Note 1314 — Commitments and Contingencies - Legal Proceedings of the notes to the condensed consolidated financial statements in this Form 10-Q for the quarter ended September 30, ~~2021.~~2022.

ITEM 1A. RISK FACTORS

Except as described below, there are no material changes from ~~the~~ risk factors as previously disclosed in our Annual Report on Form 10-K, filed with the SEC on February ~~23, 2021.~~24, 2022. We urge you to read the risk factors contained therein.

Our ~~pending transaction with Gallagher creates incremental~~ business, ~~regulatory~~financial condition, results of operations, and ~~reputational risks.~~long-term goals may continue to be adversely affected, possibly materially, by negative impacts on the global economy and capital markets resulting from the military conflict between Russia and Ukraine or any other geopolitical tensions.

U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the crisis in Ukraine. Although the length and impact of the ongoing situation is highly unpredictable, the crisis in Ukraine could lead to further market disruptions.

Additionally, during the first quarter of 2022, we announced our intention to transfer ownership of our Russian subsidiaries to local management who will operate independently in the Russian market. Due to the sanctions and prohibitions on certain types of business and activities, we deconsolidated our Russian entities on March 14, 2022. The ~~agreed transaction~~transfer of our Russian subsidiaries to ~~sell~~local management was completed on agreed-upon terms on July 18, 2022, and the transfer was registered in Russia on July 25, 2022. The deconsolidation in the first quarter of 2022 resulted in a loss of $57 million. Further, total net assets impaired, including accounts receivable balances related to our ~~Willis Re~~Russian business that are held outside of our Russian entities, were $81 million during the nine months ended September 30, 2022. The Russian entities comprised approximately 1% of consolidated WTW revenue for 2021, primarily within our Risk & Broking segment. Our Russian operation was a high-margin business and the lost profits from our Russian operations are anticipated to ~~Gallagher entails important risks, including, among others: the risk,~~impact operating income and cash flow, as described ~~more below, that we~~in ‘Outlook Following Russia Divestiture’ within Part I, Item 2 ‘Management’sDiscussion and Analysis of Financial Condition and Results of Operations’ of this Quarterly Report on Form 10-Q. We are ~~unable~~continuing to ~~obtain~~monitor the ~~requisite regulatory approvals~~ situation in Ukraine and globally and will continue to assess the potential impacts to our businesses.

Sanctions imposed by the U.S., the E.U., the U.K. and other countries, as well as Russian counter-sanctions, are extensive. Additional sanctions and penalties have also been enacted, proposed and/or ~~satisfy all~~threatened. Russian actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets. The ramifications of the ~~other conditions required to consummate the proposed transaction on the proposed terms~~hostilities and schedule, if at all; the risk that the period leading up to a transaction closing and the post-closing transition arrangements may impose costs, be distracting to our management, or cause disruption to our business or our relationships with clients, employees and other third parties; the risk that the triggers for the potential earnout paymentsanctions, however, may not be ~~met;~~limited to Russia and Russian companies but may spill over to and negatively impact other regional and global economic markets (including Europe and the ~~risk~~United States), companies in other countries (particularly those that ~~transaction and/~~have done business with Russia) and various sectors, industries and markets for securities and commodities globally, such as oil and natural gas. Accordingly, the actions discussed above and the potential for a wider conflict could increase financial market volatility, cause severe negative effects on regional and global economic markets, industries, and companies. In addition, Russia may take retaliatory actions and other countermeasures, including cyberattacks and espionage against other countries and companies around the world, which may negatively impact such countries and companies. The extent and duration of the Russian actions or ~~transition costs or dis-synergies are greater than expected, including as a~~future escalation of such hostilities, the extent and impact of existing and future sanctions, market disruptions and volatility, and the result of ~~conditions regulators put on~~ any ~~approvals~~diplomatic negotiations cannot be predicted.

Any of the transaction; the impact of the announcement and/or the potential impact of the consummation of the proposed transaction on relationships, including with employees, suppliers, clients and competitors; the risk that management’s attention is diverted from other matters during the pendency of the transaction and in the post-closing period; the risk that litigation associated with the proposed transaction, if any, affects the combination or the business otherwise; the risk of disruptions from the proposed transaction that impact our business, including current plans and operations, including the risk of exacerbating existing disruptions or challenges we face; and other risks described below and in the Company’s other SEC filings.

The transaction with Gallagher is subject to customary closing conditions, including conditions related to required regulatory approvals, and may not be completed on a timely basis, or at all, or such required regulatory approvals may contain material restrictions or conditions, and the failure to complete the transactionabove-mentioned factors could adversely affect our business, prospects, financial condition, and operating results. The extent and duration of the crisis, sanctions and resulting market disruptions are impossible to predict, but could be substantial.

Macroeconomic trends, including inflation, rising interest rates and trade policies could adversely affect our business, results of operation or financial condition.

Global economic events and other factors, such as accommodative monetary and fiscal policy and the impacts of the COVID-19 pandemic, as we discussed in the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, have contributed to significant inflation in many of the markets in which we operate. Specifically, general inflation in the U.S. is at a 40-year high. In order to combat inflation and restore price stability, the U.S. Federal Reserve has raised interest rates and is expected to keep increasing interest rates in 2022 and 2023. Increased inflation and interest rates may hinder the economic growth in the U.S., as seen in the decline in U.S. Gross Domestic Product in the first two quarters of 2022, and could have far reaching effects on the global economy. Furthermore, as central banks worldwide simultaneously raise interest rates to combat inflation, economic growth may also deteriorate in Europe, China and other geographies. This economic weakness in the economy and the possibility of a

global recession has had, and may continue to have, a negative effect on our business and financial condition, including on the value of our common stock.

Moreover, U.S. and global economic conditions have created market uncertainty and volatility. Such general economic conditions, such as inflation, stagflation, political volatility, costs of labor, cost of capital, interest rates and tax rates, affect our operating and general and administrative expenses, and we have no control or limited ability to control such factors. If our costs grow significantly in excess of our ability to raise revenue, our margins and results of operations may be materially and adversely impacted and we may not be able to achieve our strategic and financial objectives. These conditions also affect our clients’ businesses and the markets that they serve and may reduce demand for our services, increase demands for pricing accommodations or cause a higher rate of delays in the collection of, or losses on, our accounts receivable, which could adversely affect our results of operations.

~~The closing~~Further, the continued slowdown in the global economy, including a recession, or in a particular region or industry, inflation or a tightening of the transaction with Gallagher is subject to the satisfaction or waiver of a number of customary conditions, including (i) receipt of certain governmental approvals under competition, foreign investment and financial services laws, (ii) expiration or termination of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the absence of governmental restraints or prohibitions preventing the transaction closing and (iv) certain other customary closing conditions, and there can be no assurance that all of these conditions will be satisfied or waived (to the extent applicable) in a timely manner or at all. The failure to satisfy these required conditionscredit markets could delay the transaction closing for a significant period of time or prevent it from occurring at all. The agreement contemplates delayed closings in certain countries pending completion of certain country-specific closing conditions.

The agreement contains representations and warranties as well as pre-closing covenants made by each of WTW and Gallagher, customary for a transaction of this type. The agreement contains certain termination rights for each of WTW and Gallagher, including in the event that the transaction is not consummated on or before May 12, 2022, subject to two automatic extensions of three months and one month, respectively, if all conditions have been satisfied other than those related to the receipt of regulatory approvals and those to be satisfied at closing. There can be no assurance that the transaction closing conditions will be timely satisfied or otherwise waived, that the transaction will be completed within the expected timeframe, or at all, or that the expected benefits of the transaction will be achieved in the expected timeframe, or at all.

~~If the proposed transaction with Gallagher is not completed for any reason it may materially affect~~negatively impact our business, financial condition orand liquidity, including our ability to continue to access preferred sources of liquidity when we would like, and our borrowing costs could increase. In particular, further tightening of the credit markets could limit our ability to obtain external financing to fund our operations and capital expenditures, if and when needed. In addition, we could experience losses on our holdings of cash and investments due to failures of financial institutions and other parties. Thus, a continued deterioration of macroeconomic conditions in the U.S. and globally could adversely affect our business, results of ~~operations.~~operations or financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the nine months ended September 30, ~~2021,~~2022, no shares were issued by the Company without registration under the Securities Act of 1933, as amended.

The following table presents specified information about the Company’s repurchases of its ordinary shares in the third quarter of ~~2021~~
2022 and the Company’s remaining repurchase authority.

Period

Total number of shares purchased

Average price
paid per share

Total number of shares purchased as part of publicly announced plans or programs

Maximum number of shares that may yet be purchased under the plans or programs

July 1, 2021 through July 31, 2021

—

$
—

—

23,813,713

August 1, 2021 through August 31, 2021

1,742,094

$
216.69

1,742,094

22,071,619

September 1, 2021 through September 30, 2021

2,713,450

$
229.41

2,713,450

19,358,169

4,455,544

$
—

4,455,544


Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number of shares that may yet be purchased under the plans or programs
July 1, 2022 through July 31, 2022		549,961	$	198.87		549,961		10,111,422
August 1, 2022 through August 31, 2022		615,669	$	212.36		615,669		9,495,753
September 1, 2022 through September 30, 2022		622,895	$	207.09		622,895		8,872,858
		1,788,525	$	206.38		1,788,525

~~The~~At September 30, 2022 the maximum number of shares that may yet be purchased under the existing ~~share~~stock repurchase plan is ~~19,358,169. At September 30, 2021,~~8,872,858, with approximately ~~$4.5~~$1.8 billion ~~remained~~remaining on the current open-ended repurchase authority granted by the board. An estimate of the maximum number of shares under the existing authorities was determined using the closing price of our ordinary shares on September 30, ~~2021~~2022 of ~~$232.46.~~$200.94.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

EXHIBIT INDEX


		Incorporated by Reference
Exhibit Number	Description of Exhibit	Schedule/ Form	Exhibit	Filing Date	Filed Herewith
22.1	List of Issuers and Guarantor Subsidiaries.	10-Q	22.1	July 28, 2022
31.1	Certification of the Registrant’s Chief Executive Officer, Carl A. Hess, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.				X
31.2	Certification of the Registrant’s Chief Financial Officer, Andrew J. Krasner, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.				X
32.1**	Certification of the Registrant’s Chief Executive Officer, Carl A. Hess, and Chief Financial Officer, Andrew J. Krasner, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.				X
101.SCH	Inline XBRL Taxonomy Extension Schema Document				X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				X
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)				X

** Furnished herewith. Any exhibits furnished herewith (including the certification furnished in Exhibit 32.1) are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed ‘filed’ for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, except to the extent that the registrant specifically incorporates it by reference.

SIGNATURES

~~Number~~

~~Description of Exhibit~~

~~10.1~~

Security and Asset Purchase Agreement, dated as of August 12, 2021, by and between Willis Towers Watson plc and Arthur J. Gallagher & Co. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on August 16, 2021).

~~10.2~~

Second Amended and Restated Credit Agreement, dated as of October 6, 2021, among, Trinity Acquisition plc and its indirect subsidiaries, Willis North America Inc. and Willis Netherlands Holdings B.V., Willis Towers Watson Public Limited Company, the lenders party thereto and Barclays Bank PLC, as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on October 7, 2021).

~~10.3~~

Second Amended and Restated Guaranty Agreement, dated as of October 6, 2021, among, Trinity Acquisition plc, Willis Towers Watson Public Limited Company, the other guarantors party thereto and Barclays Bank PLC, as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company on October 7, 2021).

~~10.4~~

~~Offer Letter, dated as of August 26, 2021, by and between Willis Towers Watson US LLC and Andrew Krasner.*†~~

~~10.5~~

~~Time-Based Restricted Share Unit Award Agreement, dated as of September 7, 2021, by and between the Company and Andrew Krasner. *†~~

~~10.6~~

Termination Agreement, dated as of July 26, 2021, by and between Willis Towers Watson plc and Aon plc (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on July 26, 2021).

~~22.1~~

List of Issuers and Guarantor Subsidiaries.*

~~31.1~~

Certification of the Registrant’s Chief Executive Officer, John J. Haley, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.*

~~31.2~~

Certification of the Registrant’s Chief Financial Officer, Andrew J. Krasner, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.*

~~32.1~~

Certification of the Registrant’s Chief Executive Officer, John J. Haley, and Chief Financial Officer, Andrew J. Krasner, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

~~101.INS~~

~~Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.~~

~~101.SCH~~

Inline XBRL Taxonomy Extension Schema Document*

~~101.CAL~~

Inline XBRL Taxonomy Extension Calculation Linkbase Document*

~~101.DEF~~

Inline XBRL Taxonomy Extension Definition Linkbase Document*

~~101.LAB~~

Inline XBRL Taxonomy Extension Label Linkbase Document*

~~101.PRE~~

Inline XBRL Taxonomy Extension Presentation Linkbase Document*

~~104~~

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

*	~~Filed or furnished herewith.~~

†	~~Management contract or compensatory plan or arrangement.~~

~~SIGNATURES~~

Pursuant to the requirements 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 Towers Watson Public Limited Company
(Registrant)

/s/ ~~John J. Haley~~Carl A. Hess		October ~~28, 2021~~27, 2022
Name:	~~John J. Haley~~Carl A. Hess	Date
Title:	Chief Executive Officer

/s/ Andrew J. Krasner		October ~~28, 2021~~27, 2022
Name:	Andrew J. Krasner	Date
Title:	Chief Financial Officer

/s/ Joseph S. Kurpis		October ~~28, 2021~~27, 2022
Name:	Joseph S. Kurpis	Date
Title:	Principal Accounting Officer and Controller

5657


Ireland (Jurisdiction of incorporation or organization)		98-0352587 (I.R.S. Employer Identification No.)

c/o Willis Group Limited 51 Lime Street, LondonEC3M 7DQ, England (Address of principal executive offices)		~~(011)~~ (011) 44-20-3124-6000 (Registrant’s telephone number, including area code)


Large accelerated filer	☑	Accelerated filer		Non-accelerated filer		Smaller reporting company	☐
	☐	~~Non-accelerated filer~~	☐	~~Smaller reporting company~~	☐

Emerging growth company	☐


		Page
Certain Definitions		3
Disclaimer Regarding Forward-looking Statements		4

PART I. FINANCIAL INFORMATION		7
Item 1. Financial Statements (Unaudited)		7
Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		7
Condensed Consolidated Balance Sheets –- September 30, ~~2021~~2022 and December 31, ~~2020~~2021		8
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		9
Condensed Consolidated Statements of Changes in Equity - Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		10
Notes to the Condensed Consolidated Financial Statements		12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3031
Item 3. Quantitative and Qualitative Disclosures About Market Risk		5153
Item 4. Controls and Procedures		5153

PART II. OTHER INFORMATION		5354
Item 1. Legal Proceedings		5354
Item 1A. Risk Factors		5354
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		5355
Item 3. Defaults Upon Senior Securities		5455
Item 4. Mine Safety Disclosures		5455
Item 5. Other Information		5455
Item 6. Exhibits		5556
Signatures		5657


‘We’, ‘Us’, ‘Company’, ‘Willis Towers Watson’, ‘Our’, ‘Willis Towers Watson plc’ or ‘WTW’		Willis Towers Watson Public Limited Company, a company organized under the laws of Ireland, and its subsidiaries

‘shares’		The ordinary shares of Willis Towers Watson Public Limited Company, nominal value $0.000304635 per share

‘~~Willis’~~Miller’		~~Willis Group Holdings Public Limited Company and its subsidiaries, predecessor to Willis Towers Watson, prior to the Merger~~

~~‘Towers Watson’~~		~~Towers Watson & Co. and its subsidiaries~~

~~‘Merger’~~		Merger of Willis Group Holdings Public Limited Company and Towers Watson & Co. pursuant to the Agreement and Plan of Merger, dated June 29, 2015, as amended on November 19, 2015, and completed on January 4, 2016

~~‘Miller’~~		Miller Insurance Services LLP and its subsidiaries

‘~~TRANZACT’~~U.S.’		~~CD&R TZ Holdings, Inc. and its subsidiaries, doing business as TRANZACT~~United States

‘~~U.S.~~U.K.’		United ~~States~~Kingdom

‘~~U.K.’~~Brexit’		~~United Kingdom~~

~~‘Brexit’~~		The United Kingdom’s exit from the European Union, which occurred on January 31, 2020.

‘E.U.’		European Union or European Union 27 (the number of member countries following the United Kingdom’s exit)

‘U.S. GAAP’		United States Generally Accepted Accounting Principles

‘FASB’		Financial Accounting Standards Board

‘~~ASU’~~ASC’		Accounting Standards ~~Update~~Codification

‘~~ASC’~~ASU’		Accounting Standards ~~Codification~~Update

‘SEC’		United States Securities and Exchange Commission

	September 30, 2021			December 31, 2020
ASSETS
Cash and cash equivalents	$	2,162		$	2,039
Fiduciary assets		10,923			12,003
Accounts receivable, net		2,065			2,408
Prepaid and other current assets		480			475
Current assets held for sale		4,961			3,376
Total current assets		20,591			20,301
Fixed assets, net		881			1,013
Goodwill		10,146			10,392
Other intangible assets, net		2,681			3,035
Right-of-use assets		795			901
Pension benefits assets		1,056			971
Other non-current assets		1,132			1,078
Non-current assets held for sale		0			840
Total non-current assets		16,691			18,230
TOTAL ASSETS	$	37,282		$	38,531
LIABILITIES AND EQUITY
Fiduciary liabilities	$	10,923		$	12,003
Deferred revenue and accrued expenses		1,829			2,043
Current debt		644			971
Current lease liabilities		150			152
Other current liabilities		950			793
Current liabilities held for sale		4,120			3,370
Total current liabilities		18,616			19,332
Long-term debt		3,993			4,664
Liability for pension benefits		1,188			1,403
Deferred tax liabilities		612			561
Provision for liabilities		401			406
Long-term lease liabilities		800			917
Other non-current liabilities		239			281
Non-current liabilities held for sale		0			35
Total non-current liabilities		7,233			8,267
TOTAL LIABILITIES		25,849			27,599
COMMITMENTS AND CONTINGENCIES
EQUITY ⁽ⁱ⁾
Additional paid-in capital		10,786			10,748
Retained earnings		2,969			2,434
Accumulated other comprehensive loss, net of tax		(2,359	)		(2,359	)
Treasury shares, at cost, 17,519 shares in 2021 and 2020		(3	)		(3	)
Total Willis Towers Watson shareholders’ equity		11,393			10,820
Non-controlling interests		40			112
Total equity		11,433			10,932
TOTAL LIABILITIES AND EQUITY	$	37,282		$	38,531


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Nine Months Ended September 30, 2022
	Shares outstanding			Additional paid-in capital			Retained earnings			Treasury shares			AOCL (i)			Total WTW shareholders’ equity			Non-controlling interests			Total equity
Balance as of December 31, 2021		122,056		$	10,804		$	4,645		$	(3	)	$	(2,186	)	$	13,260		$	48		$	13,308
Shares repurchased		(9,860	)		—			(2,250	)		—			—			(2,250	)		—			(2,250	)
Net income		—			—			122			—			—			122			3			125
Dividends declared ($0.82 per share)		—			—			(94	)		—			—			(94	)		—			(94	)
Dividends attributable to non-controlling interests		—			—			—			—			—			—			(1	)		(1	)
Other comprehensive loss		—			—			—			—			(56	)		(56	)		—			(56	)
Issuance of shares under employee stock compensation plans		17			1			—			—			—			1			—			1
Share-based compensation and net settlements		—			20			—			—			—			20			—			20
Acquisition of non-controlling interests		—			—			—			—			—			—			21			21
Foreign currency translation		—			1			—			—			—			1			—			1
Balance as of March 31, 2022		112,213		$	10,826		$	2,423		$	(3	)	$	(2,242	)	$	11,004		$	71		$	11,075
Shares repurchased		(2,144	)		—			(471	)		—			—			(471	)		—			(471	)
Net income		—			—			109			—			—			109			5			114
Dividends declared ($0.82 per share)		—			—			(90	)		—			—			(90	)		—			(90	)
Dividends attributable to non-controlling interests		—			—			—			—			—			—			(2	)		(2	)
Other comprehensive loss		—			—			—			—			(244	)		(244	)		—			(244	)
Issuance of shares under employee stock compensation plans		27			—			—			—			—			—			—			—
Share-based compensation and net settlements		—			22			—			—			—			22			—			22
Sale of non-controlling interests		—			—			—			—			—			—			6			6
Foreign currency translation		—			7			—			—			—			7			—			7
Balance as of June 30, 2022		110,096		$	10,855		$	1,971		$	(3	)	$	(2,486	)	$	10,337		$	80		$	10,417
Shares repurchased		(1,789	)		—			(369	)		—			—			(369	)		—			(369	)
Net income		—			—			190			—			—			190			2			192
Dividends declared ($0.82 per share)		—			—			(86	)		—			—			(86	)		—			(86	)
Dividends attributable to non-controlling interests		—			—			—			—			—			—			(5	)		(5	)
Other comprehensive loss		—			—			—			—			(234	)		(234	)		—			(234	)
Issuance of shares under employee stock compensation plans		355			6			—			—			—			6			—			6
Share-based compensation and net settlements		—			(14	)		—			—			—			(14	)		—			(14	)
Acquisition of remaining non-controlling interests		—			2			—			—			—			2			(2	)		—
Foreign currency translation		—			6			—			—			—			6			—			6
Balance as of September 30, 2022		108,662		$	10,855		$	1,706		$	(3	)	$	(2,720	)	$	9,838		$	75		$	9,913

	Nine Months Ended September 30, 2021
	Shares outstanding			Additional paid-in capital			Retained earnings			Treasury shares			AOCL ⁽ⁱ⁾			Total WTW shareholders’ equity			Non-controlling interests			Total equity
Balance as of December 31, 2020		128,965		$	10,748		$	2,434		$	(3	)	$	(2,359	)	$	10,820		$	112		$	10,932
Net income		—			—			733			—			—			733			3			736
Dividends declared ($0.71 per share)		—			—			(92	)		—			—			(92	)		—			(92	)
Dividends attributable to non-controlling interests		—			—			—			—			—			—			(17	)		(17	)
Other comprehensive income		—			—			—			—			48			48			2			50
Issuance of shares under employee stock compensation plans		9			1			—			—			—			1			—			1
Share-based compensation and net settlements		—			12			—			—			—			12			—			12
Reduction of non-controlling interests ⁽ⁱⁱ⁾		—			—			—			—			—			—			(52	)		(52	)
Foreign currency translation		—			4			—			—			—			4			—			4
Balance as of March 31, 2021		128,974		$	10,765		$	3,075		$	(3	)	$	(2,311	)	$	11,526		$	48		$	11,574
Net income		—			—			184			—			—			184			2			186
Dividends declared ($0.71 per share)		—			—			(93	)		—			—			(93	)		—			(93	)
Dividends attributable to non-controlling interests		—			—			—			—			—			—			(4	)		(4	)
Other comprehensive income		—			—			—			—			33			33			—			33
Issuance of shares under employee stock compensation plans		14			1			—			—			—			1			—			1
Share-based compensation and net settlements		—			20			—			—			—			20			—			20
Reduction of non-controlling interests ⁽ⁱⁱ⁾		—			—			—			—			—			—			(1	)		(1	)
Foreign currency translation		—			(1	)		—			—			—			(1	)		—			(1	)
Balance as of June 30, 2021		128,988		$	10,785		$	3,166		$	(3	)	$	(2,278	)	$	11,670		$	45		$	11,715
Shares repurchased		(4,456	)		—			(1,000	)		—			—			(1,000	)		—			(1,000	)
Net income		—			—			903			—			—			903			4			907
Dividends declared ($0.80 per share)		—			—			(100	)		—			—			(100	)		—			(100	)
Dividends attributable to non-controlling interests		—			—			—			—			—			—			(6	)		(6	)
Other comprehensive loss		—			—			—			—			(81	)		(81	)		—			(81	)
Issuance of shares under employee stock compensation plans		64			—			—			—			—			—			—			—
Share-based compensation and net settlements		—			6			—			—			—			6			—			6
Reduction of non-controlling interests ⁽ⁱⁱ⁾		—			(8	)		—			—			—			(8	)		(3	)		(11	)
Foreign currency translation		—			3			—			—			—			3			—			3
Balance as of September 30, 2021		124,596		$	10,786		$	2,969		$	(3	)	$	(2,359	)	$	11,393		$	40		$	11,433

	Nine Months Ended September 30, 2020
	Shares outstanding		Additional paid-in capital			Retained earnings			Treasury shares			AOCL ⁽ⁱ⁾			Total WTW shareholders’ equity			Non-controlling interests			Total equity
Balance as of December 31, 2019		128,690	$	10,687		$	1,792		$	(3	)	$	(2,227	)	$	10,249		$	120		$	10,369
Net income		—		—			305			—			—			305			8			313
Dividends declared ($0.68 per share)		—		—			(88	)		—			—			(88	)		—			(88	)
Dividends attributable to non-controlling interests		—		—			—			—			—			—			(1	)		(1	)
Other comprehensive loss		—		—			—			—			(219	)		(219	)		(1	)		(220	)
Issuance of shares under employee stock compensation plans		36		3			—			—			—			3			—			3
Share-based compensation and net settlements		—		9			—			—			—			9			—			9
Foreign currency translation		—		4			—			—			—			4			—			4
Balance as of March 31, 2020		128,726	$	10,703		$	2,009		$	(3	)	$	(2,446	)	$	10,263		$	126		$	10,389
Net income		—		—			94			—			—			94			8			102
Dividends declared ($0.68 per share)		—		—			(88	)		—			—			(88	)		—			(88	)
Dividends attributable to non-controlling interests		—		—			—			—			—			—			(12	)		(12	)
Other comprehensive income		—		—			—			—			56			56			—			56
Issuance of shares under employee stock compensation plans		37		2			—			—			—			2			—			2
Share-based compensation and net settlements		—		12			—			—			—			12			—			12
Reduction of non-controlling interests ⁽ⁱⁱ⁾		—		—			—			—			—			—			(1	)		(1	)
Other		—		(3	)		—			—			—			(3	)		—			(3	)
Foreign currency translation		—		(1	)		—			—			—			(1	)		—			(1	)
Balance as of June 30, 2020		128,763	$	10,713		$	2,015		$	(3	)	$	(2,390	)	$	10,335		$	121		$	10,456
Net income		—		—			121			—			—			121			1			122
Dividends declared ($0.68 per share)		—		—			(89	)		—			—			(89	)		—			(89	)
Dividends attributable to non-controlling interests		—		—			—			—			—			—			(9	)		(9	)
Other comprehensive income		—		—			—			—			137			137			1			138
Issuance of shares under employee stock compensation plans		108		3			—			—			—			3			—			3
Share-based compensation and net settlements		—		6			—			—			—			6			—			6
Reduction of non-controlling interests ⁽ⁱⁱ⁾		—		7			—			—			—			7			(9	)		(2	)
Foreign currency translation		—		(5	)		—			—			—			(5	)		—			(5	)
Balance as of September 30, 2020		128,871	$	10,724		$	2,047		$	(3	)	$	(2,253	)	$	10,515		$	105		$	10,620

	September 30, 2021		December 31, 2020
Assets held for sale:
Cash and cash equivalents	$	53	$	50
Fiduciary assets		3,853		3,157
Accounts receivable, net		199		147
Fixed assets, net		1		1
Goodwill		812		812
Other intangible assets, net		8		8
Right-of-use assets		1		1
Other assets		34		40
Total assets held for sale	$	4,961	$	4,216
Liabilities held for sale:
Fiduciary liabilities	$	3,853	$	3,157
Deferred revenue and accrued expenses		101		118
Liability for pension benefits		1		2
Lease liabilities		1		1
Provision for liabilities		1		1
Other liabilities		163		126
Total liabilities held for sale	$	4,120	$	3,405

	Three Months Ended September 30,
	HCB				CRB				IRR				BDA				Corporate ⁽ⁱ⁾						Total
	2021		2020		2021		2020		2021		2020		2021		2020		2021			2020			2021		2020
Broking	$	68	$	62	$	621	$	592	$	11	$	71	$	119	$	100	$	—		$	—		$	819	$	825
Consulting		561		529		39		31		111		97		—		—		2			1			713		658
Outsourced administration		122		126		17		16		4		4		123		126		—			—			266		272
Other		97		77		4		4		46		48		—		—		1			1			148		130
Total revenue by service offering		848		794		681		643		172		220		242		226		3			2			1,946		1,885
Reimbursable expenses and other ⁽ⁱ⁾		10		10		—		—		2		1		2		2		(9	)		(10	)		5		3
Total revenue from customer contracts	$	858	$	804	$	681	$	643	$	174	$	221	$	244	$	228	$	(6	)	$	(8	)	$	1,951	$	1,888
Interest and other income ⁽ⁱⁱ⁾		4		2		16		6		—		—		—		—		2			1			22		9
Total revenue	$	862	$	806	$	697	$	649	$	174	$	221	$	244	$	228	$	(4	)	$	(7	)	$	1,973	$	1,897

		Remainder of 2021				2022				2023 onward				Total
Revenue expected to be recognized on contracts as of September 30, 2021		$	174			$	546			$	788			$	1,508


	Real estate rationalization			Technology modernization		Process optimization			Other			Total
Balance at October 1, 2021	$	—		$	—	$	—		$	—		$	—
Charges incurred		—			—		—			2			2
Cash payments		—			—		—			(1	)		(1	)
Balance at December 31, 2021		—			—		—			1			1
Charges incurred		15			—		1			—			16
Cash payments		(12	)		—		(1	)		(1	)		(14	)
Balance at September 30, 2022	$	3		$	—	$	—		$	—		$	3


		(Loss)/gain recognized in income												(Loss)/gain recognized in income
		Three Months Ended September 30,					Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives not designated as hedging instruments:	Location of (loss)/gain recognized in income	2021			2020		2021			2020			Location of (loss)/gain recognized in income	2022			2021			2022			2021
Forward exchange contracts	Other income, net	$	(7	)	$	5	$	(36	)	$	(15	)	Other income, net	$	(182	)	$	(7	)	$	(208	)	$	(36	)

	September 30, 2021		December 31, 2020
Revolving $1.25 billion credit facility ⁽ⁱ⁾	$	—	$	—
5.750% senior notes due 2021		—		500
3.500% senior notes due 2021		—		449
2.125% senior notes due 2022⁽ⁱⁱ⁾		625		—
Current portion of collateralized facility		19		22
	$	644	$	971

	September 30, 2021		December 31, 2020
Revolving $1.25 billion credit facility	$	—	$	—
Collateralized facility ⁽ⁱⁱⁱ⁾		19		33
2.125% senior notes due 2022⁽ⁱⁱ⁾		—		659
4.625% senior notes due 2023		249		249
3.600% senior notes due 2024		648		647
4.400% senior notes due 2026		546		546
4.500% senior notes due 2028		596		596
2.950% senior notes due 2029		727		726
6.125% senior notes due 2043		271		271
5.050% senior notes due 2048		395		395
3.875% senior notes due 2049		542		542
	$	3,993	$	4,664

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)	September 30, 2021
Balance at December 31, 2020	$	45
Obligations assumed		0
Payments		(19	)
Realized and unrealized gains		5
Foreign exchange		(1	)
Balance at September 30, 2021	$	30

	Foreign currency translation ⁽ⁱ⁾						Derivative instruments⁽ⁱ⁾						Defined pension and post-retirement benefit costs ⁽ⁱⁱ⁾						Total
	2021			2020			2021			2020			2021			2020			2021			2020
Quarter-to-date activity:
Balance at June 30, 2021 and 2020, respectively	$	(376	)	$	(698	)	$	13		$	(6	)	$	(1,915	)	$	(1,686	)	$	(2,278	)	$	(2,390	)
Other comprehensive (loss)/income before reclassifications		(81	)		119			(1	)		5			2			0			(80	)		124
(Gain)/loss reclassified from accumulated other comprehensive loss (net of income tax benefit of $8 and $2, respectively)		0			0			(1	)		4			0			9			(1	)		13
Net current-period other comprehensive (loss)/income		(81	)		119			(2	)		9			2			9			(81	)		137
Balance at September 30, 2021 and 2020, respectively	$	(457	)	$	(579	)	$	11		$	3		$	(1,913	)	$	(1,677	)	$	(2,359	)	$	(2,253	)

Year-to-date activity:
Balance at December 31, 2020 and 2019, respectively	$	(400	)	$	(538	)	$	9		$	13		$	(1,968	)	$	(1,702	)	$	(2,359	)	$	(2,227	)
Other comprehensive (loss)/income before reclassifications		(101	)		(41	)		7			(17	)		2			2			(92	)		(56	)
Loss/(gain) reclassified from accumulated other comprehensive loss (net of income tax benefit of $15 and $9, respectively) ⁽ⁱⁱⁱ⁾		44			0			(5	)		7			53			23			92			30
Net current-period other comprehensive (loss)/income		(57	)		(41	)		2			(10	)		55			25			0			(26	)
Balance at September 30, 2021 and 2020, respectively	$	(457	)	$	(579	)	$	11		$	3		$	(1,913	)	$	(1,677	)	$	(2,359	)	$	(2,253	)

Transactional Currency	Revenue			Expenses ⁽ⁱ⁾
U.S. dollars		55	%		52	%
Pounds sterling		13	%		19	%
Euro		17	%		13	%
Other currencies		15	%		16	%

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Three Months Ended September 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2021		2020		Change	Impact	Change	Divestitures	Change
	($ in millions)
Revenue	$	1,973	$	1,897	4%	1%	3%	(4)%	7%

						Components of Revenue Change⁽ⁱ⁾
					As		Constant
	Nine Months Ended September 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2021		2020		Change	Impact	Change	Divestitures	Change
	($ in millions)
Revenue ⁽ⁱⁱ⁾	$	6,292	$	5,946	6%	3%	3%	(4)%	6%