Willis Towers Watson Public Limited (WTW) 10-Q 2010 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2010
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number:001-16503

WILLIS GROUP HOLDINGS PUBLIC
LIMITED COMPANY

(Exact name of registrant as specified in its charter)

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

c/o Willis Group Limited

51 Lime Street, London, EC3M 7DQ, England

(Address of principal executive offices)

(011) 44-20-3124-6000

(Registrant’s telephone number, including area code)

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 þ     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” inRule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).  Yes o     No þ

As of July 31, 2010, there were outstanding 170,276,062 ordinary shares, nominal value $0.000115 per share and 40,000 ordinary shares, nominal value €1, of the Registrant.

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

QUARTERLY REPORT ONFORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2010

Table of Contents

		Page
Information Concerning Forward-Looking Statements			3
PART I — Financial Information
Item 1	— Financial Statements		5
Item 2	— Management’s Discussion and Analysis of Financial Condition and Results of Operations		51
Item 3	— Quantitative and Qualitative Disclosures about Market Risk		68
Item 4	— Controls and Procedures		68
PART II — Other Information
Item 1	— Legal Proceedings		69
Item 1A	— Risk Factors		69
Item 2	— Unregistered Sales of Equity Securities and Use of Proceeds		69
Item 3	— Defaults upon Senior Securities		69
Item 4	— (Removed and Reserved)		69
Item 5	— Other Information		69
Item 6	— Exhibits		69
Signatures			70
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Certain Definitions

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

‘We’, ‘Us’, ‘Company’, ‘Group’, ‘Willis’ or ‘Our’	Willis-Ireland and its subsidiaries and, prior to the effective time of the redomicile of the parent company discussed in Note 2 to the Notes to the Condensed Consolidated Financial Statements, Willis-Bermuda and its subsidiaries
‘Willis Group Holdings’ or‘Willis-Ireland’	Willis Group Holdings Public Limited Company, a company organized under the laws of Ireland
‘Willis-Bermuda’	Willis Group Holdings Limited, a company organized under the laws of Bermuda
‘shares’	The ordinary shares of Willis-Ireland, nominal value $0.000115 per share
‘HRH’	Hilb Rogal & Hobbs Company

2

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

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, included in this document that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, future capital expenditures, growth in commissions and fees, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, plans, and references to future successes are forward-looking statements. Also, when we use the words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘plan’, ‘probably’, or similar expressions, we are making forward-looking statements.

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

•  the impact of any regional, national or global political, economic, business, competitive, market, environmental and regulatory conditions on our global business operations;

•  the impact of current financial market conditions on our results of operations and financial condition, including as a result of any insolvencies or other difficulties experienced by our clients, insurance companies or financial institutions;

•  our ability to continue to manage our significant indebtedness;

•  our ability to compete effectively in our industry;

•  our ability to implement or realize anticipated benefits of the Shaping Our Future, Right Sizing Willis, Funding for Growth initiatives or any other new initiatives;

•  material changes in commercial property and casualty markets generally or the availability of insurance products or changes in premiums

	resulting from a catastrophic event, such as a hurricane, or otherwise;
•	the volatility or declines in other insurance markets and the premiums on which our commissions are based, but which we do not control;
•	our ability to retain key employees and clients and attract new business;
•	the timing or ability to carry out share repurchases or take other steps to manage our capital and the limitations in our long-term debt agreements that may restrict our ability to take these actions;
•	any fluctuations in exchange and interest rates that could affect expenses and revenue;
•	rating agency actions that could inhibit our ability to borrow funds or the pricing thereof;
•	a significant decline in the value of investments that fund our pension plans or changes in our pension plan funding obligations;
•	our ability to achieve the expected strategic benefits of transactions;
•	changes in the tax or accounting treatment of our operations;
•	any potential impact from the new US healthcare reform legislation;
•	the potential costs and difficulties in complying with a wide variety of foreign laws and regulations and any related changes, given the global scope of our operations;
•	our involvements in and the results of any regulatory investigations, legal proceedings and other contingencies;
•	underwriting, advisory or reputational risks associated with non-core operations;
•	our exposure to potential liabilities arising from errors and omissions and other potential claims against us; and
•	the interruption or loss of our information processing systems or failure to maintain secure information systems.

3

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 additional factors see also Part I, Item 1A ‘Risk Factors’ included in Willis’Form 10-K for the year ended December 31, 2009. Copies of the10-K are available online athttp://www.sec.govorwww.willis.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. In light of the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

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

4

PART I — FINANCIAL INFORMATION

Item 1 —  Financial Statements

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three months ended						Six months ended
	June 30,						June 30,
	2010			2009			2010			2009
	(millions, except per share data)
REVENUES
Commissions and fees	$	789		$	772		$	1,752		$	1,687
Investment income		10			12			19			25
Other income		—			—			—			2
Total revenues		799			784			1,771			1,714
EXPENSES
Salaries and benefits (including share based compensation of $13 million, $10 million, $25 million and $15 million (Note 3))		(456	)		(443	)		(942	)		(923	)
Other operating expenses		(135	)		(139	)		(284	)		(277	)
Depreciation expense		(16	)		(14	)		(31	)		(28	)
Amortization of intangible assets		(21	)		(23	)		(42	)		(47	)
Net loss on disposal of operations		(2	)		—			(2	)		—
Total expenses		(630	)		(619	)		(1,301	)		(1,275	)
OPERATING INCOME		169			165			470			439
Interest expense		(41	)		(43	)		(84	)		(81	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN (LOSS) EARNINGS OF ASSOCIATES		128			122			386			358
Income taxes		(35	)		(31	)		(102	)		(93	)
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN (LOSS) EARNINGS OF ASSOCIATES		93			91			284			265
Interest in (loss) earnings of associates, net of tax		(2	)		—			18			26
INCOME FROM CONTINUING OPERATIONS		91			91			302			291
Discontinued operations, net of tax (Note 4)		—			—			—			1
NET INCOME		91			91			302			292
Less: net income attributable to noncontrolling interests		(2	)		(4	)		(9	)		(12	)
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	89		$	87		$	293		$	280
AMOUNTS ATTRIBUTABLE TO WILLIS GROUP HOLDINGS SHAREHOLDERS
Income from continuing operations, net of tax	$	89		$	87		$	293		$	279
Income from discontinued operations, net of tax		—			—			—			1
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	89		$	87		$	293		$	280
EARNINGS PER SHARE — BASIC AND DILUTED (Note 5)
BASIC EARNINGS PER SHARE
— Continuing operations	$	0.52		$	0.52		$	1.73		$	1.67
DILUTED EARNINGS PER SHARE
— Continuing operations	$	0.52		$	0.52		$	1.71		$	1.66
CASH DIVIDENDS DECLARED PER SHARE	$	0.26		$	0.26		$	0.52		$	0.52

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2010			2009
	(millions, except share data)
ASSETS
Cash and cash equivalents	$	139		$	191
Fiduciary funds — restricted		1,977			1,683
Accounts receivable, net of allowance for doubtful accounts of $20 million in 2010 and $20 million in 2009		9,687			8,638
Fixed assets, net of accumulated depreciation of $253 million in 2010 and $257 million in 2009		346			352
Goodwill (Note 10)		3,271			3,277
Other intangible assets, net of accumulated amortization of $221 million in 2010 and $179 million in 2009 (Note 11)		528			572
Investments in associates		151			156
Deferred tax assets		91			82
Pension benefits asset		121			69
Other assets		709			603
TOTAL ASSETS	$	17,020		$	15,623
LIABILITIES AND EQUITY
Accounts payable	$	10,975		$	9,686
Deferred revenue and accrued expenses		240			301
Deferred tax liabilities		28			29
Income taxes payable		93			46
Short-term debt (Note 12)		193			209
Long-term debt (Note 12)		2,154			2,165
Liability for pension benefits		171			187
Other liabilities		737			771
Total liabilities		14,591			13,394
COMMITMENTS AND CONTINGENCIES (Note 7)
EQUITY
Shares, $0.000115 nominal value; Authorized: 4,000,000,000; Issued and outstanding, 170,216,447 shares in 2010 and 168,661,172 shares in 2009. Shares, €1 nominal value; Authorized: 40,000; Issued and outstanding, 40,000 shares in 2010 and 2009		—			—
Additional paid-in capital		951			918
Retained earnings		2,063			1,859
Accumulated other comprehensive loss, net of tax (Note 14)		(610	)		(594	)
Treasury shares, at cost, 57,310 shares, $0.000115 nominal value in 2010 and 54,310 shares, $0.000115 nominal value in 2009 and 40,000 shares, €1 nominal value, in 2010 and 2009		(3	)		(3	)
Total Willis Group Holdings stockholders’ equity		2,401			2,180
Noncontrolling interests		28			49
Total equity		2,429			2,229
TOTAL LIABILITIES AND EQUITY	$	17,020		$	15,623

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended
	June 30,
	2010			2009
	(millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	302		$	292
Adjustments to reconcile net income to total net cash provided by operating activities:
Income from discontinued operations		—			(1	)
Net loss/(gain) on disposal of operations, fixed and intangible assets and short-term investments		3			(3	)
Depreciation expense		31			28
Amortization of intangible assets		42			47
Benefit for deferred income taxes		(17	)		(17	)
Excess tax benefits from share-based payment arrangements		(1	)		—
Share-based compensation (Note 3)		25			15
Undistributed earnings of associates		(14	)		(19	)
Non-cash Venezuela currency devaluation		12			—
Effect of exchange rate changes on net income		(2	)		18
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries:
Fiduciary funds — restricted		(362	)		(60	)
Accounts receivable		(1,262	)		(1,114	)
Accounts payable		1,548			1,164
Additional funding of UK and US pension plans		(19	)		—
Other assets		(111	)		(141	)
Other liabilities		(19	)		3
Net cash provided by continuing operating activities		156			212
Net cash used in discontinued operating activities		—			(4	)
Total net cash provided by operating activities		156			208
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		4			9
Additions to fixed assets		(45	)		(38	)
Acquisitions of subsidiaries, net of cash acquired		(15	)		(3	)
Acquisition of investments in associates		(1	)		(41	)
Proceeds from sale of operations, net of cash disposed		—			37
Proceeds on sale of short-term investments		—			21
Total net cash used in continuing investing activities		(57	)		(15	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		30			95
Proceeds from issue of short-term debt, net of debt issuance costs		—			1
Repayments of debt		(70	)		(750	)
Senior notes issued, net of debt issuance costs		—			482
Proceeds from issue of shares		17			12
Excess tax benefits from share-based payment arrangements		1			—
Dividends paid		(89	)		(87	)
Acquisition of noncontrolling interests		(4	)		(14	)
Dividends paid to noncontrolling interests		(22	)		(9	)
Total net cash used in continuing financing activities		(137	)		(270	)
DECREASE IN CASH AND CASH EQUIVALENTS		(38	)		(77	)
Effect of exchange rate changes on cash and cash equivalents		(14	)		4
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		191			176
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	139		$	103
Cash and cash equivalents — reported as discontinued operations		—			—
Cash and cash equivalents — continuing operations	$	139		$	103

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.   NATURE OF OPERATIONS

Willis Group Holdings and its subsidiaries provide a broad range of insurance and reinsurance broking and risk management consulting services to its clients worldwide, both directly and indirectly through its associates. The Company provides both specialized risk management advisory and consulting services on a global basis to clients engaged in specific industrial and commercial activities, and services to small, medium and major corporates through its retail operations.

In its capacity as an advisor and insurance broker, the Company acts as an intermediary between clients and insurance carriers by advising clients on risk management requirements, helping clients determine the best means of managing risk, and negotiating and placing insurance risk with insurance carriers through the Company’s global distribution network.

2.   BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements (‘Interim Financial Statements’) have been prepared in accordance with accounting principles generally accepted in the United States of America (‘US GAAP’).

The Interim Financial Statements are unaudited but include all adjustments (consisting of normal recurring adjustments) which the Company’s management considers necessary for a fair presentation of the financial position as of such dates and the operating results and cash flows for those periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the six month period ended June 30, 2010 may not necessarily be indicative of the operating results for the entire fiscal year.

These Interim Financial Statements should be read in conjunction with the Company’s consolidated balance sheets as of December 31, 2009 and 2008, and the related consolidated statements of operations, cash flows and changes in equity for each of the three years in the period ended December 31, 2009 included in the Current Report onForm 10-K filed with the Securities and Exchange Commission on February 26, 2010.

Redomicile to Ireland

On September 24, 2009, Willis Group Holdings was incorporated in Ireland, in order to effectuate the change of the place of incorporation of the parent company of the Group. Willis Group Holdings operated as a wholly-owned subsidiary of Willis-Bermuda until December 31, 2009, when the outstanding common shares of Willis-Bermuda were canceled and Willis Group Holdings issued ordinary shares with substantially the same rights and preferences on aone-for-one basis to the holders of the Willis-Bermuda common shares that were canceled. Upon completion of this transaction, Willis Group Holdings replaced Willis-Bermuda as the ultimate parent company and Willis-Bermuda became a wholly-owned subsidiary of Willis Group Holdings.

This transaction was accounted for as a merger between entities under common control: accordingly, the historical financial statements of Willis-Bermuda for periods prior to this transaction are considered to be the historical financial statements of Willis Group Holdings. No changes in capital structure, assets or liabilities resulted from this transaction, other than Willis Group Holdings has provided a guarantee of amounts due under certain borrowing arrangements of two of its subsidiaries as described in notes 17 and 18.

Devaluation of Venezuelan currency

With effect from January 1, 2010, the Venezuelan economy was designated as hyper-inflationary. The Venezuelan government also devalued the Bolivar Fuerte in January 2010. As a result of these actions, the Company recorded a $12 million charge in other operating expenses to reflect the re-measurement of its net assets denominated in Venezuelan Bolivar Fuerte at January 1, 2010.

8

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

2.   BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

Variable Interest Entities

In June 2009, the FASB issued new accounting guidance which amends the evaluation criteria to identify the primary beneficiary of a Variable Interest Entity (‘VIE’) and requires ongoing reassessment of whether an enterprise is the primary beneficiary of the VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics:

•  the power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and

•  the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

This new accounting guidance became effective January 1, 2010. The implementation of this guidance did not have a material effect on the Company’s financial position or results of operations.

3.   SALARIES AND BENEFITS

Severance costs

The Company incurred severance costs of $11 million in the six months ended June 30, 2010 (2009: $18 million). These costs relate to approximately 320 positions that have been or will be eliminated as part of the Company’s continuing focus on managing expense. Of these costs, $3 million were incurred in the three months ended June 30, 2010 (2009: $2 million). Severance costs for these employees were recognized pursuant to the terms of their existing benefit arrangements or employment agreements.

Cash retention awards

The Company makes annual cash retention awards to its employees. Employees must repay a proportionate amount of these awards if they voluntarily leave the Company’s employ (other than in the event of retirement or permanent disability) before a certain time period, currently three years. The Company makes cash payments to its employees in the year it grants these retention awards and recognizes these payments ratably over the period they are subject to repayment, beginning in the quarter in which the award is made. The unamortized portion of cash retention awards is recorded within other assets.

The following table sets out the amount of cash retention awards made and the related amortization of those awards for the three and six months ended June 30, 2010 and 2009:

	Three months				Six months
	ended				ended
	June 30,				June 30,
	2010		2009		2010		2009
	(millions)
Cash retention awards made	$	16	$	29	$	185	$	140
Amortization of cash retention awards included in salaries and benefits		32		26		60		44

Unamortized cash retention awards totaled $217 million as of June 30, 2010
(December 31, 2009: $98 million; June 30, 2009: $142 million).

9

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

3.   SALARIES AND BENEFITS (Continued)

Share-based compensation

The Company incurred share-based compensation, reported within salaries and benefits, of $25 million in the six months ended June 30, 2010 (2009: $15 million) of which $13 million was incurred in the three months ended June 30, 2010 (2009: $10 million).

During the six months ended June 30, 2009, the Company recorded a $7 million credit relating to the accumulated compensation expense for certain 2008 awards which were dependent upon performance targets which the Company no longer expects to achieve.

4.   DISCONTINUED OPERATIONS

On April 15, 2009, the Company disposed of Bliss & Glennon, a US-based wholesale insurance operation acquired as part of the acquisition of HRH in 2008. Gross proceeds were $41 million.

Bliss & Glennon’s net assets at April 15, 2009 were $39 million, of which $34 million related to identifiable intangible assets and goodwill. In addition, there were costs and income taxes relating to the transaction of $2 million. No gain or loss was recognized on this disposal.

On September 1, 2009, the Company disposed of Managing Agency Group (‘MAG’), another US-based wholesale insurance operation acquired as part of the acquisition of HRH in 2008. MAG achieved a breakeven result in the first half of 2009.

Amounts of revenue and pre-tax income reported in discontinued operations include the following:

	Six months
	ended
	June 30,
	2009
	(millions)
Revenues	$	7
Income before income taxes		1
Income taxes		—
Income from discontinued operations	$	1
Gain on disposal of discontinued operations, net of tax		—
Discontinued operations, net of tax	$	1

10

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

4.   DISCONTINUED OPERATIONS (Continued)

Net assets and liabilities of discontinued operations consist of the following:

	Bliss and
	Glennon
	April 15,
	2009
	(millions)
Assets
Cash and cash equivalents	$	1
Fiduciary funds — restricted		9
Accounts receivable		17
Fixed assets		1
Intangible assets		34
Other assets		2
Total assets	$	64
Liabilities
Accounts payable	$	24
Other liabilities		1
Total liabilities	$	25
Net assets of discontinued operations	$	39

5.   EARNINGS PER SHARE

Basic and diluted earnings per share are calculated by dividing net income attributable to Willis Group Holdings by the average number of shares outstanding during each period. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or converted into shares or resulted in the issue of shares that then shared in the net income of the Company. At June 30, 2010, time-based and performance-based options to purchase 12.3 million and 8.6 million (2009: 15.3 million and 9.3 million) shares, respectively, and 1.7 million (2009: 1.2 million) restricted shares, were outstanding.

11

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

5.   EARNINGS PER SHARE (Continued)

Basic and diluted earnings per share are as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2010		2009		2010			2009
	(millions, except per share data)
Net income attributable to Willis Group Holdings	$	89	$	87	$	293		$	280
Basic average number of shares outstanding		170		168		169			167
Dilutive effect of potentially issuable shares		1		—		2			1
Diluted average number of shares outstanding		171		168		171			168
Basic earnings per share:
Continuing operations	$	0.52	$	0.52	$	1.73		$	1.67
Discontinued operations		—		—		—			0.01
Net income attributable to Willis Group Holdings shareholders	$	0.52	$	0.52	$	1.73		$	1.68
Dilutive effect of potentially issuable shares		—		—		(0.02	)		(0.01	)
Diluted earnings per share:
Continuing operations	$	0.52	$	0.52	$	1.71		$	1.66
Discontinued operations		—		—		—			0.01
Net income attributable to Willis Group Holdings shareholders	$	0.52	$	0.52	$	1.71		$	1.67

Options to purchase 13 million shares were not included in the computation of the dilutive effect of stock options for the three and six months ended June 30, 2010 because the effect was antidilutive (three and six months ended June 30, 2009: 23.9 million).

6.   PENSION PLANS

The components of the net periodic benefit cost of the UK, US and international defined benefit plans are as follows:

	Three months ended June 30,
	UK pension						US pension						Intl pension
	benefits						benefits						benefits
	2010			2009			2010			2009			2010			2009
	(millions)
Components of net periodic benefit cost (income):
Service cost	$	9		$	5		$	—		$	1		$	2		$	2
Interest cost		24			24			10			10			2			2
Expected return on plan assets		(33	)		(32	)		(10	)		(8	)		(2	)		(1	)
Amortization of unrecognized prior service gain		(1	)		(1	)		—			—			—			—
Amortization of unrecognized actuarial loss		9			8			—			3			1			—
Curtailment gain		—			—			—			(12	)		—			—
Net periodic benefit cost (income)	$	8		$	4		$	—		$	(6	)	$	3		$	3

12

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

6.   PENSION PLANS (Continued)

	Six months ended June 30,
	UK pension						US pension						Intl pension
	benefits						benefits						benefits
	2010			2009			2010			2009			2010			2009
	(millions)
Components of net periodic benefit cost:
Service cost	$	18		$	10		$	—		$	7		$	3		$	3
Interest cost		49			46			20			20			4			4
Expected return on plan assets		(69	)		(61	)		(21	)		(17	)		(4	)		(3	)
Amortization of unrecognized prior service gain		(2	)		(2	)		—			—			—			—
Amortization of unrecognized actuarial loss		18			16			1			5			1			1
Curtailment gain		—			—			—			(12	)		—			—
Net periodic benefit cost	$	14		$	9		$	—		$	3		$	4		$	5

For the six months ended June 30, 2010, the Company had made contributions of $43 million, $13 million and $4 million to the UK, US and international defined benefit pension plans (2009: $26 million, $7 million and $3 million), respectively. The Company expects to contribute approximately $86 million to the UK defined benefit pension plan, $30 million to the US plan and $8 million to the international plan for the full year 2010.

Effective May 15, 2009, the Company closed the US defined benefit plan to future accrual. Consequently, a curtailment gain of $12 million was recognized during the three and six months ended June 30, 2009.

7.   COMMITMENTS AND CONTINGENCIES

Claims, Lawsuits and Other Proceedings

The Company is subject to various actual and potential claims, lawsuits and other proceedings relating principally to alleged errors and omissions in connection with the placement of insurance and reinsurance in the ordinary course of business. Similar to other corporations, the Company is also subject to a variety of other claims, including those relating to the Company’s employment practices. Some of the claims, lawsuits and other proceedings seek damages in amounts which could, if assessed, be significant.

Errors and omissions claims, lawsuits and other proceedings arising in the ordinary course of business are covered in part by professional indemnity or other appropriate insurance. The terms of this insurance vary by policy year and self-insured risks have increased significantly in recent years. In respect of self-insured risks, the Company has established provisions which are believed to be adequate in the light of current information and legal advice, and the Company adjusts such provisions from time to time according to developments.

On the basis of current information, the Company does not expect that the actual claims, lawsuits and other proceedings, to which the Company is subject, or potential claims, lawsuits and other proceedings relating to matters of which it is aware will ultimately have a material adverse effect on the Company’s financial condition, results of operations or liquidity. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation and disputes with insurance companies, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

The material actual or potential claims, lawsuits and other proceedings, of which the Company is currently aware, are:

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WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

7.   COMMITMENTS AND CONTINGENCIES (Continued)

Inquiries and Investigations

In connection with the investigation commenced by the New York State Attorney General in April 2004 concerning, among other things, contingent commissions paid by insurers to insurance brokers, in April 2005, the Company entered into an Assurance of Discontinuance (‘Original AOD’) with the New York State Attorney General and the Superintendent of the New York Insurance Department and paid $50 million to eligible customers. As part of the Original AOD, the Company also agreed not to accept contingent compensation and to disclose to customers any compensation the Company will receive in connection with providing policy placement services to the customer. The Company also resolved similar investigations commenced by the Minnesota Attorney General, the Florida Attorney General, the Florida Department of Financial Services and the Florida Office of Insurance Regulation for amounts that were not material to the Company.

Similarly, in August 2005 HRH entered into an agreement with the Attorney General of the State of Connecticut (the ‘CT Attorney General’) and the Insurance Commissioner of the State of Connecticut to resolve all issues related to their investigations into certain insurance brokerage and insurance agency practices and to settle a lawsuit brought in August 2005 by the CT Attorney General alleging violations of the Connecticut Unfair Trade Practices Act and the Connecticut Unfair Insurance Practices Act. As part of this settlement, HRH agreed to take certain actions including establishing a $30 million national fund for distribution to certain clients, enhancing disclosure practices for agency and broker clients, and declining contingent compensation on brokerage business. The Company has co-operated fully with other similar investigations by the regulatorsand/or attorneys general of other jurisdictions, some of which have been concluded with no indication of any finding of wrongdoing.

On February 16, 2010, the Company entered into the Amended and Restated Assurance of Discontinuance with the Attorney General of the State of New York and the Amended and Restated Stipulation with the Superintendent of Insurance of the State of New York (the ‘Amended and Restated AOD’) on behalf of itself and its subsidiaries named therein. The Amended and Restated AOD was effective February 11, 2010 and supersedes and replaces the Original AOD.

The Amended and Restated AOD specifically recognizes that the Company has substantially met its obligations under the Original AOD and ends many of the requirements previously imposed. It relieves the Company of a number of technical compliance obligations that have imposed significant administrative and financial burdens on its operations. The Amended and Restated AOD no longer limits the types of compensation the Company can receive and has lowered the compensation disclosure requirements to clients that the AOD originally imposed.

The Amended and Restated AOD requires the Company to: (i) in New York, and each of the other 49 states of the United States, the District of Columbia and U.S. territories, provide compensation disclosure that will, at a minimum, comply with the terms of the applicable regulations, as may be amended from time to time, or the provisions of the AOD that existed prior to the adoption of the Amended and Restated AOD; and (ii) maintain its compliance programs and continue to provide appropriate training to relevant employees in business ethics, professional obligations, conflicts of interest and antitrust and trade practices compliance. In addition, in placing, renewing, consulting on or servicing any insurance policy, it prohibits the Company from directly or indirectly (a) accepting from or requesting of any insurer any promise or commitment to use any of the Company’s brokerage, agency, producing or consulting services in exchange for production of business to such insurer or (b) knowingly place, renew or consult on or service a client’s insurance business through a wholesale broker in a manner that is contrary to the client’s best interest.

In 2006, the European Commission issued questionnaires pursuant to its Sector Inquiry or, in respect of Norway, the European Free Trade Association Surveillance Authority, related to insurance business practices,

14

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

7.   COMMITMENTS AND CONTINGENCIES (Continued)

including compensation arrangements for brokers, to at least 150 European brokers including our operations in nine European countries. The Company responded to the European Commission questionnaires and has filed responses with the European Free Trade Association Surveillance Authority for two of its Norwegian entities. The European Commission reported on a final basis on September 25, 2007, expressing concerns over potential conflicts of interest in the industry relating to remuneration and binding authorities when assuming a dual role for clients and insurers and also over the nature of the coinsurance market. The Company continues to co-operate with both the European Commission and the European Free Trade Association Surveillance Authority.

Since August 2004, the Company and HRH (along with various other brokers and insurers) have been named as defendants in purported class actions in various courts across the United States. All of these actions have been consolidated into a single action in the US District Court for the District of New Jersey (‘MDL’). There are two amended complaints within the MDL, one that addresses employee benefits (‘EB Complaint’) and one that addresses all other lines of insurance (‘Commercial Complaint’). HRH was a named defendant in the EB Complaint, but has since been voluntarily dismissed. HRH is a named defendant in the Commercial Complaint. The Company is a named defendant in both MDL complaints. Each of the EB Complaint and the Commercial Complaint seeks monetary damages, including punitive damages, and equitable relief and makes allegations regarding the practices and conduct that have been the subject of the investigation of state attorneys general and insurance commissioners, including allegations that the brokers have breached their duties to their clients by entering into contingent compensation agreements with either no disclosure or limited disclosure to clients and participated in other improper activities. The complaints also allege the existence of a conspiracy among insurance carriers and brokers and allege violations of federal antitrust laws, the federal Racketeer Influenced and Corrupt Organizations (‘RICO’) statute and the Employee Retirement Income Security Act of 1974 (‘ERISA’). In separate decisions issued in August and September 2007, the antitrust and RICO Act claims were dismissed with prejudice and the state claims were dismissed without prejudice from the Commercial Complaint.

In January 2008, the Judge dismissed the ERISA claims with prejudice from the EB Complaint and the state law claims without prejudice. Plaintiffs filed a notice of appeal regarding the dismissal of the antitrust and RICO claims and oral arguments on this appeal were heard in April 2009 but there is no indication when a ruling will be issued. Additional actions could be brought in the future by individual policyholders. The Company disputes the allegations in all of these suits and has been and intends to continue to defend itself vigorously against these actions. The outcomes of these lawsuits, however, including any losses or other payments that may occur as a result, cannot be predicted at this time.

Reinsurance Market Dispute

Various legal proceedings are pending, have concluded or may commence between reinsurers, reinsureds and in some cases their intermediaries, including reinsurance brokers, relating to personal accident excess of loss reinsurance for the years 1993 to 1998. The proceedings principally concern allegations by reinsurers that they have sustained substantial losses due to an alleged abnormal ‘spiral’ in the market in which the reinsurance contracts were placed, the existence and nature of which, as well as other information, was not disclosed to them by the reinsureds or their reinsurance broker. A ‘spiral’ is a market term for a situation in which reinsureds and reinsurers reinsure each other with the effect that the same loss or portion of that loss moves through the market multiple times.

The reinsurers concerned have taken the position that, despite their decisions to underwrite risks or a group of risks, they are no longer bound by their reinsurance contracts. As a result, they have stopped settling claims and are seeking to recover claims already paid. The Company also understands that there have been at least

15

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

7.   COMMITMENTS AND CONTINGENCIES (Continued)

two arbitration awards in relation to a ‘spiral’, among other things, in which the reinsurer successfully argued that it was no longer bound by parts of its reinsurance program. Willis Limited, the Company’s principal insurance brokerage subsidiary in the United Kingdom, acted as the reinsurance broker or otherwise as intermediary, but not as an underwriter, for numerous personal accident reinsurance contracts, including two contracts that were involved in one of the arbitrations. Due to the small number of reinsurance brokers generally, Willis Limited also utilized other brokers active in this market assub-agents, including brokers who are parties to the legal proceedings described above, for certain contracts and may be responsible for any errors and omissions they may have made. In July 2003, one of the reinsurers received a judgment in the English High Court against certain parties, including asub-broker Willis Limited used to place two of the contracts involved in this trial. Although neither the Company nor any of its subsidiaries were a party to this proceeding or any arbitration, Willis Limited entered into tolling agreements with certain of the principals to the reinsurance contracts tolling the statute of limitations pending the outcome of proceedings between the reinsureds and reinsurers.

Two former clients of Willis Limited, American Reliable Insurance Company and one of its associated companies (collectively, ‘ARIC’), and CNA Insurance Company Limited and two of its associated companies (‘CNA’) terminated their respective tolling agreements with Willis Limited and commenced litigation in September 2007 and January 2008, respectively, in the English Commercial Court against Willis Limited. ARIC alleged conspiracy between a former Willis Limited employee and the ARIC underwriter as well as negligence and CNA alleged deceit and negligence by the same Willis Limited employee both in connection with placements of personal accident reinsurance in the excess of loss market in London and elsewhere. ARIC asserted a claim of approximately $257 million (plus unspecified interest and costs). On June 9, 2009, Willis Limited entered into a settlement agreement pursuant to which Willis Limited agreed to pay a total of $139 million to ARIC in two installments. All installments have been paid by the Company. Each party has also released and waived all claims it may have against any of the other parties arising out of or in connection with the subject matter of the litigation. The settlement includes no admission of wrongdoing by any party. The $139 million required to fund the settlement agreement was covered by errors and omissions insurance.

On September 11, 2009, Willis Limited entered into a settlement agreement pursuant to which Willis Limited agreed to pay a total of $130 million to CNA in two instalments which were paid in 2009. Each party has also released and waived all claims it may have against any of the other parties arising out of or in connection with the subject-matter of the litigation. The settlement includes no admission of wrongdoing by any party. The Company has partially collected and believes it will collect in full the $130 million required to fund the settlement agreement from errors and omissions insurers.

Various arbitrations relating to reinsurance continue to be active and from time to time the principals request co-operation from the Company and suggest that claims may be asserted against the Company. Such claims may be made against the Company if reinsurers do not pay claims on policies issued by them. The Company cannot predict at this time whether any such claims will be made or the damages that may be alleged.

Gender Discrimination Class Action

In March 2008, the Company settled an action in the United States District Court for the Southern District of New York commenced against the Company in 2001 on behalf of an alleged nationwide class of present and former female officer and officer equivalent employees alleging that the Company discriminated against them on the basis of their gender and seeking injunctive relief, money damages, attorneys’ fees and costs. Although the Court had denied plaintiffs’ motions to certify a nationwide class or to grant nationwide discovery, it did certify a class of approximately 200 female officers and officer equivalent employees based in the Company’s offices in New York, New Jersey and Massachusetts. The settlement agreement provides for injunctive relief

16

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

7.   COMMITMENTS AND CONTINGENCIES (Continued)

and a monetary payment, including the amount of attorney fees plaintiffs’ counsel are entitled to receive, which was not material to the Company. In December 2006, a former female employee, whose motion to intervene in the class action was denied, filed a purported class action in the United States District Court, Southern District of New York, with almost identical allegations as those contained in the suit that was settled in 2008, except seeking a class period of 1998 to the time of trial (the class period in the settled suit was 1998 to the end of 2001). The Company’s motion to dismiss this suit was denied and the Court did not grant the Company permission to immediately file an appeal from the denial of its motion to dismiss. The parties are in the discovery phase of the litigation. The suit was amended to include one additional plaintiff and another has filed an arbitration demand that includes a class allegation.

The Court has decided that, to the extent a class is ever certified, the class period will end at the end of 2007 and not up to the time of trial as plaintiffs had sought. The Company cannot predict at this time what, if any, damages might result from this action.

World Trade Center

The Company acted as the insurance broker, but not as an underwriter, for the placement of both property and casualty insurance for a number of entities which were directly impacted by the September 11, 2001, destruction of the World Trade Center complex, including Silverstein Properties LLC, which acquired a99-year leasehold interest in the twin towers and related facilities from the Port Authority of New York and New Jersey in July 2001. Although the World Trade Center complex insurance was bound at or before the July 2001 closing of the leasehold acquisition, consistent with standard industry practice, the final policy wording for the placements was still in the process of being finalized when the twin towers and other buildings in the complex were destroyed on September 11, 2001. There have been a number of lawsuits in the United States between the insured parties and the insurers for several placements and other disputes may arise in respect of insurance placed by us which could affect the Company including claims by one or more of the insureds that the Company made culpable errors or omissions in connection with our brokerage activities. However, the Company does not believe that our role as broker will lead to liabilities which in the aggregate would have a material adverse effect on our results of operations, financial condition or liquidity.

Stanford Financial Group

On July 2, 2009, a putative class action complaint, captionedTroice, et al. v. Willis of Colorado, Inc., et al., C.A.No. 3:09-CV-01274-N, was filed in the U.S. District Court for the Northern District of Texas against Willis Group Holdings, Willis of Colorado, Inc. and a Willis associate, among others, relating to the collapse of The Stanford Financial Group (‘Stanford’), for which Willis of Colorado, Inc. acted as broker of record on certain lines of insurance. The complaint generally alleged that the defendants actively and materially aided Stanford’s alleged fraud by providing Stanford with certain letters regarding coverage that they knew would be used to help retain or attract actual or prospective Stanford client investors. The complaint alleged that these letters, which contain statements about Stanford and the insurance policies that the defendants placed for Stanford, contained untruths and omitted material facts and were drafted in this manner to help Stanford promote and sell its allegedly fraudulent certificates of deposit. The putative class consisted of Stanford investors in Mexico and the complaint asserted various claims under Texas statutory and common law and sought actual damages in excess of $1 billion, punitive damages and costs. On August 12, 2009, the plaintiffs filed an amended complaint, which, notwithstanding the addition of certain factual allegations and Texas common law claims, largely mirrored the original and sought the same relief.

On July 17, 2009, a putative class action complaint, captionedRanni v. Willis of Colorado, Inc., et al., C.A.No. 09-22085, was filed against Willis Group Holdings and Willis of Colorado, Inc. in the U.S. District Court

17

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

7.   COMMITMENTS AND CONTINGENCIES (Continued)

for the Southern District of Florida, relating to the same alleged course of conduct as the Troice complaint described above. Based on substantially the same allegations as the Troice complaint, but on behalf of a putative class of Venezuelan and other South American Stanford investors, the Ranni complaint asserts a claim under Section 10(b) of the Securities Exchange Act of 1934 andRule 10b-5 thereunder, as well as various claims under Florida statutory and common law, and seeks damages in an amount to be determined at trial and costs.

On or about July 24, 2009, a motion was filed by certain individuals (collectively, the ‘Movants’) with the U.S. Judicial Panel on Multidistrict Litigation (the ‘JPML’) to consolidate and coordinate in the Northern District of Texas nine separate putative class actions — including the Troice and Ranni actions described above, as well as other actions against various Stanford-related entities and individuals and the Commonwealth of Antigua and Barbuda — relating to Stanford and its allegedly fraudulent certificates of deposit.

On August 6, 2009, a putative class action complaint, captionedCanabal, et al. v. Willis of Colorado, Inc., et al., C.A.No. 3:09-CV-01474-D, was filed against Willis Group Holdings, Willis of Colorado, Inc. and the same Willis associate, among others, also in the Northern District of Texas, relating to the same alleged course of conduct as the Troice complaint described above. Based on substantially the same allegations as the Troice complaint, but on behalf of a putative class of Venezuelan investors, the Canabal complaint asserted various claims under Texas statutory and common law and sought actual damages in excess of $1 billion, punitive damages, attorneys’ fees and costs.

On or about August 10, 2009, the Movants filed with the JPML a Notice of Related Action that referred the Canabal action to the JPML. On October 6, 2009, the JPML ruled on the transfer motion, transferring seven of the subject actions (including the Troice and Ranni actions) — i.e., the original nine actions minus two that had since been dismissed — for consolidation or coordination in the Northern District of Texas. On October 27, 2009, the parties to the Canabal action stipulated to the designation of that action as an ‘xyz case’ properly part of the new Stanford MDL proceeding in the Northern District of Texas.

On September 14, 2009, a complaint, captionedRupert, et al. v. Winter, et al.,Case No. 2009C115137, was filed on behalf of 97 Stanford investors against Willis Group Holdings, Willis of Colorado, Inc. and the same Willis associate, among others, in Texas state court (Bexar County). Based on substantially the same allegations as the Troice complaint, the Rupert complaint asserts claims under the Securities Act of 1933, as well as various Texas statutory and common law claims, and seeks rescission, damages, special damages and consequential damages of $79.1 million, treble damages of $237.4 million under the Texas Insurance Code, attorneys’ fees and costs. On October 20, 2009, certain defendants, including Willis of Colorado, Inc., (i) removed the Rupert action to the U.S. District Court for the Western District of Texas, (ii) notified the JPML of the pendency of this additional ‘tag-along’ action and (iii) moved to stay the action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. In November 2009, the JPML issued a conditional transfer order (the ‘CTO’) for the transfer of the Rupert action to the Northern District of Texas. On December 22, 2009, the plaintiffs filed a motion to vacate, or alternatively stay, the CTO, to which Willis of Colorado, Inc. responded on January 4, 2010. On April 1, 2010, the JPML denied the plaintiffs’ motion to vacate the CTO and issued a final transfer order for the transfer of the Rupert action to the Northern District of Texas.

On December 18, 2009, the parties to the Troice and Canabal actions stipulated to the consolidation of those actions and, on December 31, 2009, the plaintiffs therein, collectively, filed a Second Amended Class Action Complaint, which largely mirrors the Troice and Canabal predecessor complaints, but seeks relief on behalf of a worldwide class of Stanford investors. Also on December 31, 2009, the plaintiffs in the Canabal action filed

18

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

7.   COMMITMENTS AND CONTINGENCIES (Continued)

a Notice of Dismissal, dismissing the Canabal action without prejudice. On February 25, 2010, the defendants filed motions to dismiss the Second Amended Class Action Complaint in the consolidated Troice/Canabal action. Those motions are currently pending. On May 24, 2010, the plaintiffs in the consolidated Troice/Canabal action filed a motion for leave to file a Third Amended Class Action Complaint, which, among other things, adds several Texas statutory claims. That motion is also currently pending.

The defendants have not yet responded to the Ranni or Rupert complaints.

Additional actions could be brought in the future by other investors in certificates of deposit issued by Stanford and its affiliates. The Company disputes these allegations and intends to defend itself vigorously against these actions. The outcomes of these actions, however, including any losses or other payments that may occur as a result, cannot be predicted at this time.

St. Jude

In January 2009, Willis of Minnesota, Inc. was named as a third party defendant in a lawsuit between American Insurance Company (‘AIC’) and St. Jude Medical, Inc. (‘St. Jude’) pending in the United States District Court, District of Minnesota, that arose out of a products liability insurance program for St. Jude in which AIC provided one layer of insurance and the Company acted as the broker. St. Jude is seeking a judgment against AIC requiring AIC to pay its policy limits of $50 million plus interest and costs for certain personal injury claims filed against St. Jude and denied by AIC. To the extent there is a finding that AIC does not have to provide coverage for these claims, St. Jude has alternatively alleged standard errors and omissions claims against the Company for the same amount. While the Company cannot predict the outcome of any litigation, the Company believes AIC should provide coverage and believes that St. Jude should have a favorable outcome against AIC. If St. Jude prevails against AIC, St. Jude’s claims against the Company become moot. The Company continues to vigorously defend itself and disputes the allegations made against it. Pending the outcome of summary judgment motions, the case may proceed to trial in November 2010.

Commitments

In December 2009, the Company made a capital commitment of $25 million to Trident V, LP, an investment fund managed by Stone Point Capital. The first capital call was made and met in April 2010 and was for $1 million. As at June 30, 2010 there had been $2 million of capital calls, all of which have been met.

8.   DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Accounting for derivative financial instruments

In addition to the note below, see Note 9 for information about the fair value hierarchy for derivatives.

Primary risks managed by derivative financial instruments

The Company uses derivative financial instruments to manage exposures arising from its operating activities. The Company is exposed to market risk from changes in interest rates and foreign currency exchange rates.

Interest rate risk

As a result of its operating activities, the Company receives cash for premiums and claims which it deposits in short-term investments denominated in US dollars and other currencies. The Company earns interest on these funds, which is included in the financial statements as investment income. These funds are regulated in terms of access and the instruments in which they may be invested, most of which are short-term in maturity. In

19

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

8.   DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

order to manage interest rate risk arising from these financial assets, the Company enters into interest rate swaps to receive a fixed rate of interest and pay a variable rate of interest in the significant currencies of these short-term investments. The use of interest rate contracts essentially converts groups of short-term variable rate investments to fixed rates.

The fair value of these contracts is recorded in other assets and other liabilities. For contracts that qualify as accounting hedges, changes in fair value are recorded as a component of other comprehensive income. Amounts are reclassified from other comprehensive income into earnings when the hedged exposure affects earnings. If contracts are deemed not to qualify for hedge accounting, changes in fair value are recorded in other operating expenses.

At June 30, 2010, the Company had the following derivative financial instruments that were designated as cash flow hedges of interest rate risk:

		Notional		Fair
		amount(i)		value
		(millions)
US dollar	Receive fixed — pay variable	$	590	$	16
Pound Sterling	Receive fixed — pay variable		175		6
Euro	Receive fixed — pay variable		102		2

⁽ⁱ⁾ Notional amounts are reported in US dollars translated at spot rates at June 30, 2010.

During the six months ended June 30, 2010, the Company entered into a series of interest rate swaps for a total notional amount of $350 million to receive a fixed rate and pay a variable rate on a semi-annual basis, with a maturity date of July, 15, 2015. The Company has designated and accounts for these instruments as fair value hedges against its $350 million 5.625% senior notes due 2015. The fair values of the interest rate swaps are included within other assets or other liabilities and the fair value of the hedged element of the senior notes is included within the principal amount of the debt.

At June 30, 2010 and December 31, 2009 the Company’s interest rate swaps were designated as hedging instruments.

Foreign currency risk

The Company’s primary foreign exchange risks arise:

•  from changes in the exchange rate between US dollars and Pounds Sterling as its London Market operations earn the majority of their revenues in US dollars and incur expenses predominantly in Pounds Sterling, and may also hold a significant net sterling asset or liability position on the balance sheet. In addition, the London Market operations earn significant revenues in euros and Japanese yen; and

•  from the translation into US dollars of the net income and net assets of its foreign subsidiaries, excluding the London Market operations which are US dollar denominated.

The foreign exchange risks in its London Market operations are hedged as follows:

•  to the extent that forecast Pound Sterling expenses exceed Pound Sterling revenues, the Company limits its exposure to this exchange rate risk by the use of forward contracts matched to specific, clearly identified cash outflows arising in the ordinary course of business;

•  to the extent the UK operations earn significant revenues in euros and Japanese yen, the Company limits its exposure to changes in the exchange rate between the US dollar and these currencies by the use of forward contracts matched to a percentage of forecast cash inflows in specific currencies and periods; and

20

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

8.   DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Foreign currency risk (Continued)

•  to the extent that the net sterling asset or liability position in its London Market operations relate to short-term cash flows, the Company limits its exposure by the use of forward purchases and sales. These forward purchases and sales are not effective hedges for accounting purposes.

The Company does not hedge net income earned within foreign subsidiaries outside of the UK.

The fair value of foreign currency contracts is recorded in other assets and other liabilities. For contracts that qualify as accounting hedges, changes in fair value resulting from movements in the spot exchange rate are recorded as a component of other comprehensive income whilst changes resulting from a movement in the time value are recorded in interest expense. If contracts are deemed not to qualify for hedge accounting, the total change in fair value is recorded in interest expense. Amounts held in comprehensive income are reclassified into earnings when the hedged exposure affects earnings.

At June 30, 2010 and December 31, 2009 the Company’s foreign currency contracts were all designated as hedging instruments.

The table below summarizes by major currency the contractual amounts of the Company’s forward contracts to exchange foreign currencies for Pounds Sterling and US dollars at June 30, 2010:

			Fair
	Sell(i)		value
	(millions)
US dollar	$	363	$	(19	)
Euro		137		19
Japanese yen		63		(3	)

⁽ⁱ⁾ Foreign currency notional amounts are reported in US dollars translated at spot rates at June 30, 2010.

Derivative financial instruments

The table below presents the fair value of the Company’s derivative financial instruments and their balance sheet classification at June 30, 2010:

		Fair value
	Balance sheet	June 30,			December 31,
Derivative financial instruments designated as hedging instruments:	classification	2010			2009
		(millions)
Assets:
Interest rate swaps (cash flow hedges)	Other assets	$	24		$	27
Interest rate swaps (fair value hedges)	Other assets		14			—
Forward exchange contracts	Other assets		21			8
Total derivatives designated as hedging instruments		$	59		$	35
Liabilities:
Interest rate swaps	Other liabilities	$	—		$	(1	)
Forward exchange contracts	Other liabilities		(24	)		(22	)
Total derivatives designated as hedging instruments		$	(24	)	$	(23	)

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WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

8.   DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Derivative financial instruments (Continued)

The table below presents the effects of derivative financial instruments in cash flow hedging relationships on the consolidated statements of operations and the consolidated statements of equity for the three and six months ended June 30, 2010 and 2009:

							Location of	Amount of
							gain (loss)	gain (loss)
			Location of	Amount of			recognized	recognized
			gain (loss)	gain (loss)			in income	in income
			reclassified	reclassified			on derivative	on derivative
	Amount of		from	from			(Ineffective	(Ineffective
	gain (loss)		accumulated	accumulated			hedges and	hedges and
	recognized		OCI(i) into	OCI(i) into			ineffective	ineffective
	in OCI(i)		income	income			element of	element of
	on derivative		(Effective	(Effective			effective	effective
Derivatives in cash flow hedging relationships	(Effective element)		element)	element)			hedges)	hedges)
	(millions)			(millions)				(millions)
Three months ended June 30, 2010
Interest rate swaps	$	6	Investment income	$	(6	)	Other operating expenses	$	—
Forward exchange contracts		7	Other operating expenses		2		Interest expense		—
Total	$	13		$	(4	)		$	—
Three months ended June 30, 2009
Interest rate swaps	$	3	Investment income	$	(7	)	Other operating expenses	$	—
Forward exchange contracts		27	Other operating expenses		13		Interest expense		—
Total	$	30		$	6			$	—
Six months ended June 30, 2010
Interest rate swaps	$	11	Investment income	$	(13	)	Other operating expenses	$	—
Forward exchange contracts		4	Other operating expenses		7		Interest expense		—
Total	$	15		$	(6	)		$	—
Six months ended June 30, 2009
Interest rate swaps	$	9	Investment income	$	(12	)	Other operating expenses	$	(1	)
Forward exchange contracts		33	Other operating expenses		30		Interest expense		—
Total	$	42		$	18			$	(1	)

⁽ⁱ⁾ OCI means other comprehensive income. Amounts above shown gross of tax.

For interest rate swaps all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. For foreign exchange contracts only the changes in fair value resulting from movements in the spot exchange rate are included in this assessment.

22

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

8.   DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Derivative financial instruments (Continued)

At June 30, 2010, the Company estimates there will be no material reclassification of net derivative gains or losses from other comprehensive income into earnings within the next twelve months.

Fair value hedges

The table below presents the effects of derivative financial instruments in fair value hedging relationships on the consolidated statements of operations for the three and six months ended June 30, 2010. The Company did not have any derivative financial instruments in fair value hedging relationships during 2009.

				Loss			Ineffectiveness
		Gain		recognized			recognized in
Derivatives in fair value hedging	Hedged item in fair value hedging	recognized		for hedged			interest
relationships	relationship	for derivative		item			expense
				(millions)
Three months ended June 30, 2010
Interest rate swaps	5.625% Senior notes due 2015	$	12	$	(12	)	$	—
Six months ended June 30, 2010
Interest rate swaps	5.625% Senior notes due 2015	$	14	$	(14	)	$	—

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

9.   FAIR VALUE MEASUREMENT

The following table presents, for each of the fair value hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis:

	June 30, 2010
	Quoted
	prices in
	active
	markets		Significant		Significant
	for		other		other
	identical		observable		unobservable
	assets		inputs		inputs
	Level 1		Level 2		Level 3		Total
	(millions)
Assets at fair value:
Cash and cash equivalents	$	139	$	—	$	—	$	139
Fiduciary funds — restricted		1,977		—		—		1,977
Derivative financial instruments		—		59		—		59
Total assets	$	2,116	$	59	$	—	$	2,175
Liabilities at fair value:
Derivative financial instruments	$	—	$	24	$	—	$	24
Changes in fair value of hedged debt(i)		—		14		—		14
Total liabilities	$	—	$	38	$	—	$	38

⁽ⁱ⁾ Changes in the fair value of the underlying hedged debt instrument since inception of the hedging relationship are included inlong-term debt.

23

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

9.   FAIR VALUE MEASUREMENT (Continued)

	December 31, 2009
	Quoted
	prices in
	active		Significant		Significant
	markets for		other		other
	identical		observable		unobservable
	assets		inputs		inputs
	Level 1		Level 2		Level 3		Total
	(millions)
Assets at fair value:
Cash and cash equivalents	$	191	$	—	$	—	$	191
Fiduciary funds — restricted		1,683		—		—		1,683
Derivative financial instruments		—		35		—		35
Total assets	$	1,874	$	35	$	—	$	1,909
Liabilities at fair value:
Derivative financial instruments	$	—	$	23	$	—	$	23
Total liabilities	$	—	$	23	$	—	$	23

The estimated fair value of the Company’s financial instruments held or issued to finance the Company’s operations is summarized below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition nor do they indicate the Company’s intent or ability to dispose of the financial instrument.

	June 30, 2010				December 31, 2009
	Carrying		Fair		Carrying		Fair
	amount		Value		amount		Value
			(millions)
Assets:
Cash and cash equivalents	$	139	$	139	$	191	$	191
Fiduciary funds — restricted		1,977		1,977		1,683		1,683
Derivative financial instruments		59		59		35		35
Liabilities:
Short-term debt	$	193	$	193	$	209	$	211
Long-term debt		2,154		2,415		2,165		2,409
Derivative financial instruments		24		24		23		23

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

Cash and Cash Equivalents —The estimated fair value of these financial instruments approximates their carrying values due to their short maturities.

Fiduciary Funds — Restricted —Fair values are based on quoted market values.

Short-Term Debt and Long-Term Debt —Fair values are based on quoted market values.

24

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

9.   FAIR VALUE MEASUREMENT (Continued)

Derivative Financial Instruments — Market values have been used to determine the fair value of interest rate swaps and forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account the current interest rate environment, current foreign currency forward rates and counterparty risk. The fair value of the Company’s derivative financial instruments is computed based on an income approach using appropriate valuation techniques including discounted future cash flows and other methods that are consistent with accepted methodologies for pricing financial instruments.

10.   GOODWILL

Goodwill represents the excess of the cost of businesses acquired over the fair market value of identifiable net assets at the dates of acquisition. Goodwill is not amortized but is subject to impairment testing annually and whenever facts or circumstances indicate that the carrying amounts may not be recoverable. As part of the evaluation the estimated future discounted cash flows associated with the underlying business operation are compared to the carrying amount of goodwill to determine if a write-down is required. If such an assessment indicates that the discounted future cash flows are not sufficient, the carrying amount is reduced to the estimated fair value.

When a business entity is sold, goodwill is allocated to the disposed entity based on the fair value of that entity compared to the fair value of the reporting unit in which it is included.

The changes in the carrying amount of goodwill by operating segment for the six months ended June 30, 2010 and the year ended December 31, 2009 are as follows:

				North
	Global			America			International			Total
				(millions)
Balance at December 31, 2008	$	1,046		$	1,810		$	419		$	3,275
Goodwill acquired during 2009		4			1			14			19
Purchase price allocation adjustments		24			(4	)		—			20
Goodwill disposed of during 2009		—			(27	)		(1	)		(28	)
Foreign exchange		(9	)		—			—			(9	)
Balance at December 31, 2009	$	1,065		$	1,780		$	432		$	3,277
Other movements(i)		—			(2	)		1			(1	)
Foreign exchange		(5	)		—			—			(5	)
Balance at June 30, 2010	$	1,060		$	1,778		$	433		$	3,271

⁽ⁱ⁾ North America — tax benefit arising on the exercise of fully vested HRH stock options which were issued as part of the acquisition of HRH in 2008.

11.   OTHER INTANGIBLE ASSETS

Other intangible assets are classified into the following categories:

•  ‘Customer and Marketing related’ includes

•  Client Relationships,

•  Client Lists,

•  Non-compete Agreements,

•  Trade Names; and

•  ‘Contract based, Technology and Other’ includes all other purchased intangible assets.

25

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

11.   OTHER INTANGIBLE ASSETS (Continued)

The major classes of amortizable intangible assets are as follows:

	June 30, 2010							December 31, 2009
	Gross					Net		Gross					Net
	carrying		Accumulated			carrying		carrying		Accumulated			carrying
	amount		amortization			amount		amount		amortization			amount
	(millions)
Customer and Marketing Related:
Client Relationships	$	689	$	(170	)	$	519	$	691	$	(138	)	$	553
Client Lists		9		(7	)		2		9		(6	)		3
Non-compete Agreements		36		(32	)		4		36		(23	)		13
Trade Names		11		(10	)		1		11		(10	)		1
Total Customer and Marketing Related		745		(219	)		526		747		(177	)		570
Contract based, Technology and Other		4		(2	)		2		4		(2	)		2
Total amortizable intangible assets	$	749	$	(221	)	$	528	$	751	$	(179	)	$	572

The aggregate amortization of intangible assets for the six months ended June 30, 2010 was $42 million (2009: $47 million), of which $21 million was recognized in the three months ended June 30, 2010 (2009: $23 million). The total amortizable intangible assets are expected to be amortized over the following periods:

	Remainder of
	2010		2011		2012		2013		2014		Thereafter		Total
					(millions)
Amortization of intangible assets	$	39	$	67	$	61	$	56	$	50	$	255	$	528

12.   DEBT

Short-term debt consists of the following:

	June 30,		December 31,
	2010		2009
	(millions)
Current portion of5-year term loan facility	$	110	$	110
5.125% senior notes due 2010		83		90
6.000% loan notes due 2010		—		9
	$	193	$	209

26

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

12.   DEBT (Continued)

Long-term debt consists of the following:

	June 30,		December 31,
	2010		2009
	(millions)
5-year term loan facility	$	356	$	411
Revolving credit facility		30		—
6.000% senior notes due 2012		4		4
5.625% senior notes due 2015		364		350
12.875% senior notes due 2016		500		500
6.200% senior notes due 2017		600		600
7.000% senior notes due 2019		300		300
	$	2,154	$	2,165

During the six months ended June 30, 2010, the Company entered into a series of interest rate swaps for a total notional amount of $350 million to receive a fixed rate and pay a variable rate on a semi-annual basis, with a maturity date of July 15, 2015. The Company has designated and accounts for these instruments as fair value hedges against its $350 million 5.625% senior notes due 2015. The fair values of the interest rate swaps are included within other assets or other liabilities and the fair value of the hedged element of the senior notes is included within the principal amount of the debt.

The5-year term loan facility bears interest at LIBOR plus 2.250% and is repayable at $27 million per quarter, with a final payment of $115 million due in the fourth quarter of 2013. Drawings under the revolving credit facility also bear interest at LIBOR plus 2.250% and the facility expires on October 1, 2013.

13.   SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Supplemental disclosures regarding cash flow information and non-cash flow investing and financing activities are as follows:

	Six months ended
	June 30,
	2010		2009
	(millions)
Supplemental disclosures of cash flow information:
Cash payments for income taxes, net of cash received	$	56	$	66
Cash payments for interest		82		76
Supplemental disclosures of non-cash flow investing and financing activities:
Issue of stock on acquisitions of subsidiaries	$	—	$	1
Issue of stock on acquisitions of noncontrolling interests		—		10
Acquisitions:
Fair value of assets acquired	$	1	$	6
Less: Liabilities assumed		—		(35	)
Net assets (liabilities) acquired, net of cash acquired	$	1	$	(29	)

27

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

14.   COMPREHENSIVE INCOME

a) The components of comprehensive income are as follows:

	Three months ended June 30,						Six months ended June 30,
	2010			2009			2010			2009
				(millions)
Net income	$	91		$	91		$	302		$	292
Other comprehensive income, net of tax:
Foreign currency translation adjustment (net of tax of $nil, $nil, $nil and $nil)		(29	)		4			(35	)		5
Pension funding adjustment (net of tax of $(2) million, $1 million, $(5) million and $(2) million)		6			—			12			6
Net unrealized gain on derivative instruments (net of tax of $(2) million, $(10) million, $(2) million and $(17) million)		7			26			7			43
Other comprehensive (loss) income (net of tax of $(4) million, $(9) million, $(7) million and $(19) million)		(16	)		30			(16	)		54
Comprehensive income		75			121			286			346
Noncontrolling interests		(2	)		(4	)		(9	)		(12	)
Comprehensive income attributable to Willis Group Holdings	$	73		$	117		$	277		$	334

b) The components of accumulated other comprehensive loss, net of tax, are as follows:

	June 30,			December 31,
	2010			2009
	(millions)
Net foreign currency translation adjustment	$	(81	)	$	(46	)
Net unrealized holding loss		(2	)		(2	)
Pension funding adjustment		(542	)		(554	)
Net unrealized gain on derivative instruments		15			8
Accumulated other comprehensive loss, attributable to Willis Group Holdings	$	(610	)	$	(594	)

28

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

15.   EQUITY AND NONCONTROLLING INTERESTS

The components of equity and noncontrolling interests are as follows:

	June 30, 2010									June 30, 2009
	Willis									Willis
	Group									Group
	Holdings			Noncontrolling			Total			Holdings			Noncontrolling			Total
	stockholders			interests			equity			stockholders			interests			equity
	(millions)
Balance at beginning of period	$	2,180		$	49		$	2,229		$	1,845		$	50		$	1,895
Comprehensive income:
Net income		293			9			302			280			12			292
Other comprehensive (loss) income, net of tax		(16	)		—			(16	)		54			—			54
Comprehensive income		277			9			286			334			12			346
Dividends		(89	)		(22	)		(111	)		(87	)		(9	)		(96	)
Additional paid-in capital		33			—			33			22			—			22
Purchase of subsidiary shares from noncontrolling interests		—			(4	)		(4	)		—			(9	)		(9	)
Foreign currency translation		—			(4	)		(4	)		—			—			—
Balance at end of period	$	2,401		$	28		$	2,429		$	2,114		$	44		$	2,158

The effects on equity of changes in Willis Group Holdings ownership interest in its subsidiaries are as follows:

	June 30,			June 30,
	2010			2009
	(millions)
Net income attributable to Willis Group Holdings	$	293		$	280
Transfers from noncontrolling interest:
Decrease in Willis Group Holdings’ paid-in capital for purchase of noncontrolling interests		(14	)		(15	)
Net transfers from noncontrolling interest		(14	)		(15	)
Change from net income attributable to Willis Group Holdings and transfers from noncontrolling interests	$	279		$	265

16.   SEGMENT INFORMATION

During the periods presented, the Company operated through three segments: Global, North America and International. Global provides specialist brokerage and consulting services to clients worldwide for specific industrial and commercial activities and is organized by specialism. North America and International predominantly comprise our retail operations which provide services to small, medium and major corporates, accessing Global’s specialist expertise when required.

29

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

16.   SEGMENT INFORMATION (Continued)

The Company evaluates the performance of its operating segments based on organic revenue growth and operating income. For internal reporting and segmental reporting, the following items for which segmental management are not held accountable are excluded from segmental expenses:

i)	costs of the holding company;
ii)	foreign exchange loss from the devaluation of the Venezuelan currency;
iii)	foreign exchange hedging activities, foreign exchange movements on the UK pension plan asset and foreign exchange gains and losses from currency purchases and sales;
iv)	amortization of intangible assets;
v)	gains and losses on the disposal of operations and major properties;
vi)	significant legal and regulatory settlements which are managed centrally;
vii)	integration costs associated with the acquisition of HRH; and
viii)	costs associated with the redomicile of the Company’s parent company from Bermuda to Ireland.

The accounting policies of the operating segments are consistent with those described in Note 2 — Basis of Presentation and Significant Accounting Policies to the Company’s current Report onForm 10-K for the year ended December 31, 2009. There are no inter-segment revenues, with segments operating on a revenue-sharing basis equivalent to that used when sharing business with other third-party brokers.

Selected information regarding the Company’s operating segments is as follows:

	Three months ended June 30, 2010
														Interest in
									Depreciation					Earnings of
	Commissions		Investment		Other		Total		and		Operating			Associates,
	and Fees		Income		Income		Revenues		Amortization		Income			net of tax
	(millions)
Global	$	216	$	1	$	—	$	217	$	5	$	69		$	—
North America		326		5		—		331		6		68			—
International		247		4		—		251		5		59			(2	)
Total Retail		573		9		—		582		11		127			(2	)
Total Operating Segments		789		10		—		799		16		196			(2	)
Corporate and Other(i)		—		—		—		—		21		(27	)		—
Total Consolidated	$	789	$	10	$	—	$	799	$	37	$	169		$	(2	)

30

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

16.   SEGMENT INFORMATION (Continued)

	Three months ended June 30, 2009
														Interest in
									Depreciation					Earnings of
	Commissions		Investment		Other		Total		and		Operating			Associates,
	and Fees		Income		Income		Revenues		Amortization		Income			net of tax
	(millions)
Global	$	207	$	2	$	—	$	209	$	3	$	74		$	—
North America		332		4		—		336		6		75			—
International		233		6		—		239		5		55			—
Total Retail		565		10		—		575		11		130			—
Total Operating Segments		772		12		—		784		14		204			—
Corporate and Other(i)		—		—		—		—		23		(39	)		—
Total Consolidated	$	772	$	12	$	—	$	784	$	37	$	165		$	—

	Six months ended June 30, 2010
														Interest in
									Depreciation					Earnings of
	Commissions		Investment		Other		Total		and		Operating			Associates,
	and Fees		Income		Income		Revenues		Amortization		Income			net of tax
	(millions)
Global	$	517	$	3	$	—	$	520	$	9	$	207		$	—
North America		687		9		—		696		12		161			—
International		548		7		—		555		10		162			18
Total Retail		1,235		16		—		1,251		22		323			18
Total Operating Segments		1,752		19		—		1,771		31		530			18
Corporate and Other(i)		—		—		—		—		42		(60	)		—
Total Consolidated	$	1,752	$	19	$	—	$	1,771	$	73	$	470		$	18

31

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

16.   SEGMENT INFORMATION (Continued)

	Six months ended June 30, 2009
														Interest in
									Depreciation					Earnings of
	Commissions		Investment		Other		Total		and		Operating			Associates,
	and Fees		Income		Income		Revenues		Amortization		Income			net of tax
	(millions)
Global	$	482	$	5	$	—	$	487	$	6	$	201		$	—
North America		703		8		2		713		11		169			—
International		502		12		—		514		11		151			26
Total Retail		1,205		20		2		1,227		22		320			26
Total Operating Segments		1,687		25		2		1,714		28		521			26
Corporate and Other(i)		—		—		—		—		47		(82	)		—
Total Consolidated	$	1,687	$	25	$	2	$	1,714	$	75	$	439		$	26

⁽ⁱ⁾ Corporate and Other includes the costs of the holding company, foreign exchange loss from the devaluation of the Venezuelan currency, foreign exchange hedging activities, foreign exchange movements on the UK pension plan asset, foreign exchange gains and losses from currency purchases and sales, amortization of intangible assets, gains and losses on disposal of operations and major properties, significant legal and regulatory settlements, integration costs associated with the acquisition of HRH and the costs associated with the redomicile of the Company’s parent company from Bermuda to Ireland.

The following table reconciles total consolidated operating income, as disclosed in the operating segment tables above, to consolidated income from continuing operations before income taxes and interest in earnings of associates:

	Three months ended						Six months ended
	June 30,						June 30,
	2010			2009			2010			2009
	(millions)
Total consolidated operating income	$	169		$	165		$	470		$	439
Interest expense		(41	)		(43	)		(84	)		(81	)
Income from continuing operations before income taxes and interest in earnings of associates	$	128		$	122		$	386		$	358

The Company does not routinely evaluate the total asset position by segment, and the following allocations have been made based on reasonable estimates and assumptions:

	June 30,		December 31,
	2010		2009
	(millions)
Total assets:
Global	$	11,192	$	9,542
North America		3,954		4,408
International		1,755		2,246
Total Retail		5,709		6,654
Total Operating Segments		16,901		16,196
Corporate and Other		119		(573	)
Total Consolidated	$	17,020	$	15,623

32

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES

On July 1, 2005, Willis North America Inc. (‘Willis North America’) issued senior notes totaling $600 million under its February 2004 registration statement. On March 28, 2007, Willis North America issued further senior notes totaling $600 million under its June 2006 registration statement. On September 29, 2009, Willis North America issued senior notes totaling $300 million under its June 2009 registration statement. The debt securities are jointly and severally, irrevocably and fully and unconditionally guaranteed by Willis Group Holdings, Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, Willis Group Limited, Trinity Acquisition plc, TA I Limited, TA II Limited, TA III Limited and TA IV Limited.

Presented below is unaudited condensed consolidating financial information for:

i)	Willis Group Holdings, which is a guarantor, on a parent company only basis;
ii)	the Other Guarantors, which are all 100 percent directly or indirectly owned subsidiaries of the parent;
iii)	the Issuer, Willis North America;
iv)	Other, which are the non-guarantor subsidiaries, on a combined basis;
v)	Consolidating adjustments; and
vi)	Consolidated Company.

The equity method has been used for all investments in subsidiaries in the unaudited condensed consolidating balance sheets of Willis Group Holdings, the Other Guarantors and the Issuer. Investments in subsidiaries in the unaudited condensed consolidating balance sheet for Other represents the cost of investment in subsidiaries recorded in the parent companies of the non-guarantor subsidiaries.

The entities included in the Other Guarantors column are Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, Trinity Acquisition plc, TA I Limited, TA II Limited, TA III Limited, TA IV Limited and Willis Group Limited.

33

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Three months ended June 30, 2010
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—		$	—		$	—		$	789		$	—		$	789
Investment income		—			2			—			13			(5	)		10
Other income		—			—			—			—			—			—
Total revenues		—			2			—			802			(5	)		799
EXPENSES
Salaries and benefits		—			—			—			(466	)		10			(456	)
Other operating expenses		369			8			(61	)		(436	)		(15	)		(135	)
Depreciation expense		—			—			(2	)		(14	)		—			(16	)
Amortization of intangible assets		—			—			—			(21	)		—			(21	)
Gain on disposal		—			—			—			2,433			(2,435	)		(2	)
Total expenses		369			8			(63	)		1,496			(2,440	)		(630	)
OPERATING INCOME (LOSS)		369			10			(63	)		2,298			(2,445	)		169
Investment income from Group undertakings		—			218			117			65			(400	)		—
Interest expense		—			(79	)		(38	)		(154	)		230			(41	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN LOSS OF ASSOCIATES		369			149			16			2,209			(2,615	)		128
Income taxes		—			(7	)		16			(45	)		1			(35	)
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN LOSS OF ASSOCIATES		369			142			32			2,164			(2,614	)		93
Interest in loss of associates, net of tax		—			—			—			(6	)		4			(2	)
INCOME FROM CONTINUING OPERATIONS		369			142			32			2,158			(2,610	)		91
Discontinued operations, net of tax		—			—			—			—			—			—
NET INCOME		369			142			32			2,158			(2,610	)		91
Less: Net income attributable to noncontrolling interests		—			—			—			—			(2	)		(2	)
EQUITY ACCOUNT FOR SUBSIDIARIES		(280	)		97			(35	)		—			218			—
NET INCOME (LOSS) ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	89		$	239		$	(3	)	$	2,158		$	(2,394	)	$	89

34

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Three months ended June 30, 2009
	Willis
	Group		The Other									Consolidating
	Holdings		Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—	$	—		$	—		$	772		$	—		$	772
Investment income		—		—			2			(93	)		103			12
Other income		—		—			—			—			—			—
Total revenues		—		—			2			679			103			784
EXPENSES
Salaries and benefits		—		—			—			(445	)		2			(443	)
Other operating expenses		1		79			32			(241	)		(10	)		(139	)
Depreciation expense		—		—			(2	)		(12	)		—			(14	)
Amortization of intangible assets		—		—			—			(26	)		3			(23	)
Total expenses		1		79			30			(724	)		(5	)		(619	)
OPERATING INCOME (LOSS)		1		79			32			(45	)		98			165
Investment income from Group undertakings		23		100			22			175			(320	)		—
Interest expense		—		(113	)		(46	)		(59	)		175			(43	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		24		66			8			71			(47	)		122
Income taxes		—		(18	)		(4	)		(18	)		9			(31	)
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES		24		48			4			53			(38	)		91
Interest in earnings of associates, net of tax		—		—			—			—			—			—
INCOME FROM CONTINUING OPERATIONS		24		48			4			53			(38	)		91
Discontinued operations, net of tax		—		—			—			—			—			—
NET INCOME		24		48			4			53			(38	)		91
Less: Net income attributable to noncontrolling interests		—		—			—			(1	)		(3	)		(4	)
EQUITY ACCOUNT FOR SUBSIDIARIES		63		(46	)		137			—			(154	)		—
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	87	$	2		$	141		$	52		$	(195	)	$	87

35

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Six months ended June 30, 2010
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—		$	—		$	—		$	1,752		$	—		$	1,752
Investment income		—			5			1			18			(5	)		19
Other income		—			—			—			—			—			—
Total revenues		—			5			1			1,770			(5	)		1,771
EXPENSES
Salaries and benefits		—			—			—			(957	)		15			(942	)
Other operating expenses		565			(26	)		(59	)		(730	)		(34	)		(284	)
Depreciation expense		—			—			(4	)		(27	)		—			(31	)
Amortization of intangible assets		—			—			—			(42	)		—			(42	)
Gain on disposal		—			—			—			2,435			(2,437	)		(2	)
Total expenses		565			(26	)		(63	)		679			(2,456	)		(1,301	)
OPERATING INCOME (LOSS)		565			(21	)		(62	)		2,449			(2,461	)		470
Investment income from Group undertakings		—			551			173			488			(1,212	)		—
Interest expense		—			(211	)		(80	)		(211	)		418			(84	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		565			319			31			2,726			(3,255	)		386
Income taxes		—			(4	)		9			(119	)		12			(102	)
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES		565			315			40			2,607			(3,243	)		284
Interest in earnings of associates, net of tax		—			—			—			14			4			18
INCOME FROM CONTINUING OPERATIONS		565			315			40			2,621			(3,239	)		302
Discontinued operations, net of tax		—			—			—			—			—			—
NET INCOME		565			315			40			2,621			(3,239	)		302
Less: Net income attributable to noncontrolling interests		—			—			—			(3	)		(6	)		(9	)
EQUITY ACCOUNT FOR SUBSIDIARIES		(272	)		132			(30	)		—			170			—
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	293		$	447		$	10		$	2,618		$	(3,075	)	$	293

36

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Six months ended June 30, 2009
	Willis
	Group		The Other									Consolidating
	Holdings		Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—	$	—		$	—		$	1,687		$	—		$	1,687
Investment income		—		—			4			21			—			25
Other income		—		—			—			2			—			2
Total revenues		—		—			4			1,710			—			1,714
EXPENSES
Salaries and benefits		—		—			—			(928	)		5			(923	)
Other operating expenses		—		69			43			(386	)		(3	)		(277	)
Depreciation expense		—		—			(4	)		(24	)		—			(28	)
Amortization of intangible assets		—		—			—			(47	)		—			(47	)
Total expenses		—		69			39			(1,385	)		2			(1,275	)
OPERATING INCOME		—		69			43			325			2			439
Investment income from Group undertakings		45		193			138			181			(557	)		—
Interest expense		—		(199	)		(84	)		(211	)		413			(81	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		45		63			97			295			(142	)		358
Income taxes		—		(18	)		(3	)		(79	)		7			(93	)
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES		45		45			94			216			(135	)		265
Interest in earnings of associates, net of tax		—		—			—			26			—			26
INCOME FROM CONTINUING OPERATIONS		45		45			94			242			(135	)		291
Discontinued operations, net of tax		—		—			—			1			—			1
NET INCOME		45		45			94			243			(135	)		292
Less: Net income attributable to noncontrolling interests		—		—			—			(3	)		(9	)		(12	)
EQUITY ACCOUNT FOR SUBSIDIARIES		235		129			34			—			(398	)		—
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	280	$	174		$	128		$	240		$	(542	)	$	280

37

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Balance Sheet

	As at June 30, 2010
	Willis
	Group		The Other								Consolidating
	Holdings		Guarantors			The Issuer		Other			adjustments			Consolidated
	(millions)
ASSETS
Cash and cash equivalents	$	—	$	—		$	81	$	58		$	—		$	139
Fiduciary funds — restricted		—		—			—		1,977			—			1,977
Accounts receivable		3,726		5,776			4,231		12,443			(16,489	)		9,687
Fixed assets		—		—			44		304			(2	)		346
Goodwill		—		—			—		1,715			1,556			3,271
Other intangible assets		—		—			—		498			30			528
Investments in associates		—		—			—		(48	)		199			151
Deferred tax assets		—		—			—		110			(19	)		91
Pension benefits asset		—		—			—		121			—			121
Other assets		19		254			59		969			(592	)		709
Investments in subsidiaries		2,369		3,781			1,066		3,831			(11,047	)		—
TOTAL ASSETS	$	6,114	$	9,811		$	5,481	$	21,978		$	(26,364	)	$	17,020
LIABILITIES AND EQUITY
Accounts payable	$	3,668	$	10,573		$	3,107	$	10,250		$	(16,623	)	$	10,975
Deferred revenue and accrued expenses		—		—			—		273			(33	)		240
Deferred tax liabilities		—		3			19		25			(19	)		28
Income taxes payable		—		128			—		263			(298	)		93
Short-term debt		—		—			193		—			—			193
Long-term debt		—		500			1,650		4			—			2,154
Liability for pension benefits		—		—			—		171			—			171
Other liabilities		45		14			40		621			17			737
Total liabilities		3,713		11,218			5,009		11,607			(16,956	)		14,591
Total Willis Group Holdings stockholders’ equity		2,401		(1,407	)		472		10,366			(9,431	)		2,401
Noncontrolling interests		—		—			—		5			23			28
Total equity		2,401		(1,407	)		472		10,371			(9,408	)		2,429
TOTAL LIABILITIES AND EQUITY	$	6,114	$	9,811		$	5,481	$	21,978		$	(26,364	)	$	17,020

38

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Balance Sheet

	As at December 31, 2009
	Willis
	Group		The Other						Consolidating
	Holdings		Guarantors		The Issuer		Other		adjustments			Consolidated
	(millions)
ASSETS
Cash and cash equivalents	$	—	$	—	$	104	$	87	$	—		$	191
Fiduciary funds — restricted		—		—		—		1,683		—			1,683
Accounts receivable		—		4,428		4,185		9,294		(9,269	)		8,638
Fixed assets		—		—		35		317		—			352
Goodwill		—		—		—		1,722		1,555			3,277
Other intangible assets		—		—		—		542		30			572
Investments in associates		—		—		—		76		80			156
Deferred tax assets		—		—		—		97		(15	)		82
Pension benefits asset		—		—		—		69		—			69
Other assets		—		99		35		909		(440	)		603
Investments in subsidiaries		2,180		3,693		1,132		3,867		(10,872	)		—
TOTAL ASSETS	$	2,180	$	8,220	$	5,491	$	18,663	$	(18,931	)	$	15,623
LIABILITIES AND EQUITY
Accounts payable	$	—	$	6,887	$	3,169	$	9,042	$	(9,412	)	$	9,686
Deferred revenue and accrued expenses		—		—		—		324		(23	)		301
Deferred tax liabilities		—		—		15		29		(15	)		29
Income taxes payable		—		86		—		205		(245	)		46
Short-term debt		—		—		200		9		—			209
Long-term debt		—		500		1,661		4		—			2,165
Liability for pension benefits		—		—		—		187		—			187
Other liabilities		—		—		40		715		16			771
Total liabilities		—		7,473		5,085		10,515		(9,679	)		13,394
Total Willis Group Holdings stockholders’ equity		2,180		747		406		8,144		(9,297	)		2,180
Noncontrolling interests		—		—		—		4		45			49
Total equity		2,180		747		406		8,148		(9,252	)		2,229
TOTAL LIABILITIES AND EQUITY	$	2,180	$	8,220	$	5,491	$	18,663	$	(18,931	)	$	15,623

39

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Cash Flows

	Six months ended June 30, 2010
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	569		$	321		$	42		$	(20	)	$	(756	)	$	156
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			—			4			—			4
Additions to fixed assets		—			—			(13	)		(32	)		—			(45	)
Acquisitions of subsidiaries, net of cash acquired		—			—			—			(15	)		—			(15	)
Acquisitions of investments in associates		—			—			—			(1	)		—			(1	)
Proceeds on sale of short-term investments		—			—			—			—			—			—
Net cash used in investing activities		—			—			(13	)		(44	)		—			(57	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			—			30			—			—			30
Proceeds from issue of short-term debt, net of debt issuance costs		—			—			—			—			—			—
Repayments of debt		—			—			(61	)		(9	)		—			(70	)
Senior notes issued, net of debt issuance costs		—			—			—			—			—			—
Proceeds from issue of shares		17			—			—			—			—			17
Amounts owed by and to Group undertakings		(542	)		(189	)		(21	)		752			—			—
Excess tax benefits from share-based payment arrangements		—			—			—			1			—			1
Dividends paid		(44	)		(132	)		—			(669	)		756			(89	)
Acquisition of noncontrolling interests		—			—			—			(4	)		—			(4	)
Dividends paid to noncontrolling interests		—			—			—			(22	)		—			(22	)
Net cash (used in) provided by financing activities		(569	)		(321	)		(52	)		49			756			(137	)
DECREASE IN CASH AND CASH EQUIVALENTS		—			—			(23	)		(15	)		—			(38	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			(14	)		—			(14	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		—			—			104			87			—			191
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	—		$	—		$	81		$	58		$	—		$	139
Cash and cash equivalents reported as discontinued operations		—			—			—			—			—			—
Cash and cash equivalents reported as continuing operations	$	—		$	—		$	81		$	58		$	—		$	139

40

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

17.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Cash Flows

	Six months ended June 30, 2009
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	48		$	42		$	143		$	3		$	(28	)	$	208
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			—			9			—			9
Additions to fixed assets		—			—			(9	)		(29	)		—			(38	)
Acquisitions of subsidiaries, net of cash acquired		—			—			—			(3	)		—			(3	)
Acquisitions of investments in associates		—			—			—			(41	)		—			(41	)
Proceeds from sale of operations, net of cash disposed		—			—			—			37			—			37
Proceeds on sale of short-term investments		—			—			—			21			—			21
Net cash used in investing activities		—			—			(9	)		(6	)		—			(15	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			—			95			—			—			95
Proceeds from issue of short-term debt, net of debt issuance costs		—			—			—			1			—			1
Repayments of debt		—			—			(750	)		—			—			(750	)
Senior notes issued, net of debt issuance costs		—			482			—			—			—			482
Proceeds from issue of shares		12			—			—			—			—			12
Amounts owed by and to Group undertakings		42			(524	)		532			(50	)		—			—
Dividends paid		(87	)		—			—			(28	)		28			(87	)
Acquisition of noncontrolling interests		(12	)		—			—			(2	)		—			(14	)
Dividends paid to noncontrolling interests		—			—			—			(9	)		—			(9	)
Net cash used in financing activities		(45	)		(42	)		(123	)		(88	)		28			(270	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3			—			11			(91	)		—			(77	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			4			—			4
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		—			—			—			176			—			176
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	3		$	—		$	11		$	89		$	—		$	103
Cash and cash equivalents — reported as discontinued operations		—			—			—			—			—			—
Cash and cash equivalents — continuing operations	$	3		$	—		$	11		$	89		$	—		$	103

41

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES

In March 2009, Trinity Acquisition plc issued senior notes totaling $500 million in a private transaction. The debt securities are jointly and severally, irrevocably and fully and unconditionally guaranteed by Willis Group Holdings, Willis Netherlands B.V., Willis Investment UK Holdings Limited, TA I Limited, TA II Limited, TA III Limited, TA IV Limited, Willis Group Limited and Willis North America. This debt has not been registered with the Securities and Exchange Commission. If and when registered, any necessary financial statements will be provided.

The Company filed a shelf registration onForm S-3 under which Willis Group Holdings may offer debt securities, preferred stock, ordinary stock and other securities. In addition, Trinity Acquisition plc may offer debt securities (‘the Subsidiary Debt Securities’). The Subsidiary Debt Securities, if issued, will be guaranteed by certain of the Company’s subsidiaries.

Presented below is unaudited condensed consolidating financial information required under the existing shelf registration for:

(i)	Willis Group Holdings, which will be a guarantor, on a parent company only basis;
(ii)	the Other Guarantors, which are all 100 percent directly or indirectly owned subsidiaries of the parent;
(iii)	the Issuer, Trinity Acquisition plc;
(iv)	Other, which are the non-guarantor subsidiaries, on a combined basis;
(v)	Consolidating adjustments; and
(vi)	Consolidated Company.

The equity method has been used for investments in subsidiaries in the unaudited condensed consolidating balance sheets of Willis Group Holdings, the Other Guarantors and the Issuer. Investments in subsidiaries in the unaudited condensed consolidating balance sheet for Other, represents the cost of investment in subsidiaries recorded in the parent companies of the non-guarantor subsidiaries.

The entities included in the Other Guarantors column are Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, TA II Limited and TA III Limited.

42

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Three months ended June 30, 2010
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—		$	—		$	—		$	789		$	—		$	789
Investment income		—			2			—			13			(5	)		10
Other income		—			—			—			—			—			—
Total revenues		—			2			—			802			(5	)		799
EXPENSES
Salaries and benefits		—			—			—			(466	)		10			(456	)
Other operating expenses		369			11			2			(502	)		(15	)		(135	)
Depreciation expense		—			—			—			(16	)		—			(16	)
Amortization of intangible assets		—			—			—			(21	)		—			(21	)
Gain on disposal		—			—			—			2,433			(2,435	)		(2	)
Total expenses		369			11			2			1,428			(2,440	)		(630	)
OPERATING INCOME		369			13			2			2,230			(2,445	)		169
Investment income from Group undertakings		—			162			30			208			(400	)		—
Interest expense		—			(43	)		3			(231	)		230			(41	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN LOSS OF ASSOCIATES		369			132			35			2,207			(2,615	)		128
Income taxes		—			(1	)		(10	)		(25	)		1			(35	)
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN LOSS OF ASSOCIATES		369			131			25			2,182			(2,614	)		93
Interest in loss of associates, net of tax		—			—			—			(6	)		4			(2	)
INCOME FROM CONTINUING OPERATIONS		369			131			25			2,176			(2,610	)		91
Discontinued operations, net of tax		—			—			—			—			—			—
NET INCOME		369			131			25			2,176			(2,610	)		91
Less: Net income attributable to noncontrolling interests		—			—			—			—			(2	)		(2	)
EQUITY ACCOUNT FOR SUBSIDIARIES		(280	)		108			36			—			136			—
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	89		$	239		$	61		$	2,176		$	(2,476	)	$	89

43

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Three months ended June 30, 2009
	Willis
	Group		The Other									Consolidating
	Holdings		Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—	$	—		$	—		$	772		$	—		$	772
Investment income		—		—			—			(91	)		103			12
Other income		—		—			—			—			—			—
Total revenues		—		—			—			681			103			784
EXPENSES
Salaries and benefits		—		—			—			(445	)		2			(443	)
Other operating expenses		1		2			(22	)		(110	)		(10	)		(139	)
Depreciation expense		—		—			—			(14	)		—			(14	)
Amortization of intangible assets		—		—			—			(26	)		3			(23	)
Total expenses		1		2			(22	)		(595	)		(5	)		(619	)
OPERATING INCOME (LOSS)		1		2			(22	)		86			98			165
Investment income from Group undertakings		23		8			62			227			(320	)		—
Interest expense		—		(41	)		(32	)		(145	)		175			(43	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		24		(31	)		8			168			(47	)		122
Income taxes		—		11			(5	)		(46	)		9			(31	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES		24		(20	)		3			122			(38	)		91
Interest in earnings of associates, net of tax		—		—			—			—			—			—
INCOME (LOSS) FROM CONTINUING OPERATIONS		24		(20	)		3			122			(38	)		91
Discontinued operations, net of tax		—		—			—			—			—			—
NET INCOME (LOSS)		24		(20	)		3			122			(38	)		91
Less: Net income attributable to noncontrolling interests		—		—			—			(1	)		(3	)		(4	)
EQUITY ACCOUNT FOR SUBSIDIARIES		63		(6	)		13			—			(70	)		—
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	87	$	(26	)	$	16		$	121		$	(111	)	$	87

44

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Six months ended June 30, 2010
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—		$	—		$	—		$	1,752		$	—		$	1,752
Investment income		—			5			—			19			(5	)		19
Other income		—			—			—			—			—			—
Total revenues		—			5			—			1,771			(5	)		1,771
EXPENSES
Salaries and benefits		—			—			—			(957	)		15			(942	)
Other operating expenses		565			15			19			(849	)		(34	)		(284	)
Depreciation expense		—			—			—			(31	)		—			(31	)
Amortization of intangible assets		—			—			—			(42	)		—			(42	)
Gain on disposal		—			—			—			2,435			(2,437	)		(2	)
Total expenses		565			15			19			556			(2,456	)		(1,301	)
OPERATING INCOME		565			20			19			2,327			(2,461	)		470
Investment income from Group undertakings		—			192			111			909			(1,212	)		—
Interest expense		—			(83	)		(49	)		(370	)		418			(84	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		565			129			81			2,866			(3,255	)		386
Income taxes		—			(1	)		(22	)		(91	)		12			(102	)
INCOME FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES		565			128			59			2,775			(3,243	)		284
Interest in earnings of associates, net of tax		—			—			—			14			4			18
INCOME FROM CONTINUING OPERATIONS		565			128			59			2,789			(3,239	)		302
Discontinued operations, net of tax		—			—			—			—			—			—
NET INCOME		565			128			59			2,789			(3,239	)		302
Less: Net income attributable to noncontrolling interests		—			—			—			(3	)		(6	)		(9	)
EQUITY ACCOUNT FOR SUBSIDIARIES		(272	)		319			209			—			(256	)		—
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	293		$	447		$	268		$	2,786		$	(3,501	)	$	293

45

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Operations

	Six months ended June 30, 2009
	Willis
	Group		The Other									Consolidating
	Holdings		Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
REVENUES
Commissions and fees	$	—	$	—		$	—		$	1,687		$	—		$	1,687
Investment income		—		—			—			25			—			25
Other income		—		—			—			2			—			2
Total revenues		—		—			—			1,714			—			1,714
EXPENSES
Salaries and benefits		—		—			—			(928	)		5			(923	)
Other operating expenses		—		2			(20	)		(256	)		(3	)		(277	)
Depreciation expense		—		—			—			(28	)		—			(28	)
Amortization of intangible assets		—		—			—			(47	)		—			(47	)
Total expenses		—		2			(20	)		(1,259	)		2			(1,275	)
OPERATING INCOME (LOSS)		—		2			(20	)		455			2			439
Investment income from Group undertakings		45		16			100			396			(557	)		—
Interest expense		—		(81	)		(39	)		(374	)		413			(81	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		45		(63	)		41			477			(142	)		358
Income taxes		—		20			(14	)		(106	)		7			(93	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES		45		(43	)		27			371			(135	)		265
Interest in earnings of associates, net of tax		—		—			—			26			—			26
INCOME (LOSS) FROM CONTINUING OPERATIONS		45		(43	)		27			397			(135	)		291
Discontinued operations, net of tax		—		—			—			1			—			1
NET INCOME (LOSS)		45		(43	)		27			398			(135	)		292
Less: Net income attributable to noncontrolling interests		—		—			—			(3	)		(9	)		(12	)
EQUITY ACCOUNT FOR SUBSIDIARIES		235		189			161			—			(585	)		—
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	280	$	146		$	188		$	395		$	(729	)	$	280

46

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Balance Sheet

	As at June 30, 2010
	Willis
	Group		The Other								Consolidating
	Holdings		Guarantors			The Issuer		Other			adjustments			Consolidated
	(millions)
ASSETS
Cash and cash equivalents	$	—	$	—		$	—	$	139		$	—		$	139
Fiduciary funds — restricted		—		—			—		1,977			—			1,977
Accounts receivable		3,726		1,972			2,568		17,910			(16,489	)		9,687
Fixed assets		—		—			—		348			(2	)		346
Goodwill		—		—			—		1,715			1,556			3,271
Other intangible assets		—		—			—		498			30			528
Investments in associates		—		—			—		(48	)		199			151
Deferred tax assets		—		—			—		110			(19	)		91
Pension benefits asset		—		—			—		121			—			121
Other assets		19		159			15		1,108			(592	)		709
Investments in subsidiaries		2,369		3,318			2,510		2,878			(11,075	)		—
TOTAL ASSETS	$	6,114	$	5,449		$	5,093	$	26,756		$	(26,392	)	$	17,020
LIABILITIES AND EQUITY
Accounts payable	$	3,668	$	6,838		$	1,287	$	15,805		$	(16,623	)	$	10,975
Deferred revenue and accrued expenses		—		—			—		273			(33	)		240
Deferred tax liabilities		—		—			—		47			(19	)		28
Income taxes payable		—		18			51		322			(298	)		93
Short-term debt		—		—			—		193			—			193
Long-term debt		—		—			500		1,654			—			2,154
Liability for pension benefits		—		—			—		171			—			171
Other liabilities		45		—			—		675			17			737
Total liabilities		3,713		6,856			1,838		19,140			(16,956	)		14,591
Total Willis Group Holdings stockholders’ equity		2,401		(1,407	)		3,255		7,611			(9,459	)		2,401
Noncontrolling interests		—		—			—		5			23			28
Total equity		2,401		(1,407	)		3,255		7,616			(9,436	)		2,429
TOTAL LIABILITIES AND EQUITY	$	6,114	$	5,449		$	5,093	$	26,756		$	(26,392	)	$	17,020

47

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Balance Sheet

	As at December 31, 2009
	Willis
	Group		The Other						Consolidating
	Holdings		Guarantors		The Issuer		Other		adjustments			Consolidated
	(millions)
ASSETS
Cash and cash equivalents	$	—	$	—	$	—	$	191	$	—		$	191
Fiduciary funds — restricted		—		—		—		1,683		—			1,683
Accounts receivable		—		698		2,489		14,720		(9,269	)		8,638
Fixed assets		—		—		—		352		—			352
Goodwill		—		—		—		1,722		1,555			3,277
Other intangible assets		—		—		—		542		30			572
Investments in associates		—		—		—		76		80			156
Deferred tax assets		—		—		—		97		(15	)		82
Pension benefits asset		—		—		—		69		—			69
Other assets		—		37		17		989		(440	)		603
Equity accounted subsidiaries		2,180		3,051		2,366		2,882		(10,479	)		—
TOTAL ASSETS	$	2,180	$	3,786	$	4,872	$	23,323	$	(18,538	)	$	15,623
LIABILITIES AND EQUITY
Accounts payable	$	—	$	3,040	$	1,289	$	14,769	$	(9,412	)	$	9,686
Deferred revenue and accrued expenses		—		—		—		324		(23	)		301
Deferred tax liabilities		—		—		—		44		(15	)		29
Income taxes payable		—		1		32		258		(245	)		46
Short-term debt		—		—		—		209		—			209
Long-term debt		—		—		500		1,665		—			2,165
Liability for pension benefits		—		—		—		187		—			187
Other liabilities		—		—		—		755		16			771
Total liabilities		—		3,041		1,821		18,211		(9,679	)		13,394
Total Willis Group Holdings stockholders’ equity		2,180		745		3,051		5,108		(8,904	)		2,180
Noncontrolling interests		—		—		—		4		45			49
Total equity		2,180		745		3,051		5,112		(8,859	)		2,229
TOTAL LIABILITIES AND EQUITY	$	2,180	$	3,786	$	4,872	$	23,323	$	(18,538	)	$	15,623

48

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Cash Flows

	Six months ended June 30, 2010
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	569		$	132		$	80		$	131		$	(756	)	$	156
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			—			4			—			4
Additions to fixed assets		—			—			—			(45	)		—			(45	)
Acquisitions of subsidiaries, net of cash acquired		—			—			—			(15	)		—			(15	)
Acquisitions of investments in associates		—			—			—			(1	)		—			(1	)
Proceeds on sale of short-term investments		—			—			—			—			—			—
Net cash used in investing activities		—			—			—			(57	)		—			(57	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			—			—			30			—			30
Proceeds from issue of short-term debt, net of debt issuance costs		—			—			—			—			—			—
Repayments of debt		—			—			—			(70	)		—			(70	)
Senior notes issued, net of debt issuance costs		—			—			—			—			—			—
Proceeds from issue of shares		17			—			—			—			—			17
Amounts owed by and to Group undertakings		(542	)		—			(80	)		622			—			—
Excess tax benefits from share-based payment arrangements		—			—			—			1			—			1
Dividends paid		(44	)		(132	)		—			(669	)		756			(89	)
Acquisition of noncontrolling interests		—			—			—			(4	)		—			(4	)
Dividends paid to noncontrolling interests		—			—			—			(22	)		—			(22	)
Net cash used in financing activities		(569	)		(132	)		(80	)		(112	)		756			(137	)
DECREASE IN CASH AND CASH EQUIVALENTS		—			—			—			(38	)		—			(38	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			(14	)		—			(14	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		—			—			—			191			—			191
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	—		$	—		$	—		$	139		$	—		$	139
Cash and cash equivalents reported as discontinued operations		—			—			—			—			—			—
Cash and cash equivalents reported as continuing operations	$	—		$	—		$	—		$	139		$	—		$	139

49

WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

18.   FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Continued)

Condensed Consolidating Statement of Cash Flows

	Six months ended June 30, 2009
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	48		$	(65	)	$	29		$	224		$	(28	)	$	208
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			—			9			—			9
Additions to fixed assets		—			—			—			(38	)		—			(38	)
Acquisitions of subsidiaries, net of cash acquired		—			—			—			(3	)		—			(3	)
Investments in associates		—			—			—			(41	)		—			(41	)
Proceeds from sale of operations, net of cash disposed		—			—			—			37			—			37
Proceeds on sale of short-term investments		—			—			—			21			—			21
Net cash used in investing activities		—			—			—			(15	)		—			(15	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			—			—			95			—			95
Proceeds from issue of short-term debt, net of debt issuance costs		—			—			—			1			—			1
Repayments of debt		—			—			—			(750	)		—			(750	)
Senior notes issued, net of debt issuance costs		—			—			482			—			—			482
Proceeds from issue of shares		12			—			—			—			—			12
Amounts owed by and to Group undertakings		42			65			(511	)		404			—			—
Dividends paid		(87	)		—			—			(28	)		28			(87	)
Acquisition of noncontrolling interests		(12	)		—			—			(2	)		—			(14	)
Dividends paid to noncontrolling interests		—			—			—			(9	)		—			(9	)
Net cash (used in) provided by financing activities		(45	)		65			(29	)		(289	)		28			(270	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3			—			—			(80	)		—			(77	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			4			—			4
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		—			—			—			176			—			176
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	3		$	—		$	—		$	100		$	—		$	103
Cash and cash equivalents — reported as discontinued operations		—			—			—			—			—			—
Cash and cash equivalents — continuing operations	$	3		$	—		$	—		$	100		$	—		$	103

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Item 2 —  Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion includes references to non-GAAP financial measures as defined in the rules of the Securities and Exchange Commission (‘SEC’). We present such 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 on a GAAP basis. Organic revenue growth and organic growth in commissions and fees exclude the impact of acquisitions and disposals, period-over-period movements in foreign exchange, legacy contingent commissions assumed as part of the HRH acquisition, and investment and other income from growth in revenues and commissions and fees. We believe organic revenue growth and organic growth in commissions and fees provide measures that the investment community may find helpful in assessing the performance of operations

that were part of our operations in both the current and prior periods, and provide a measure against which our businesses may be assessed in the future. These financial measures should be viewed in addition to, not in lieu of, the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2010.

This discussion includes forward-looking statements, including under the headings ‘Business Overview and Market Outlook’, ‘Executive Summary’, ‘Operating Results — Group, Interest in Earnings of Associates’, ‘Operating Results — Segments’ and ‘Liquidity and Capital Resources.’ Please see ‘Information Concerning 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 the forward-looking statements.

BUSINESS OVERVIEW AND MARKET OUTLOOK

We provide a broad range of insurance broking, risk management and consulting services to our clients worldwide. Our core specialty businesses include Aerospace; Energy; Marine; Construction; Financial and Executive Risks; Fine Art, Jewelry and Specie; Special Contingency Risks; and Reinsurance. Our retail operations provide services to small, medium and major corporations and the employee benefits practice, our largest product-based practice group, provides health, welfare and human resources consulting and brokerage services. Our Willis Capital Markets & Advisory division (‘WCMA’) acts as a financial advisor on mergers and acquisitions and capital markets products, primarily focusing on the insurance and reinsurance sector and may place or underwrite securities.

In our capacity as advisor and insurance broker, we act as an intermediary between our clients and insurance carriers by advising our clients on their risk management requirements, helping clients determine the best means of managing risk, and negotiating and placing insurance risk with insurance carriers through our global distribution network.

We derive most of our revenues from commissions and fees for brokerage and consulting services and do not determine the insurance premiums on which our commissions are generally based. Fluctuations

in these premiums charged by the insurance carriers have a direct and potentially material impact on our results of operations. Commission levels generally follow the same trend as premium levels as they are derived from a percentage of the premiums paid by the insureds. Due to the cyclical nature of the insurance market and the impact of other market conditions on insurance premiums, they may vary widely between accounting periods. Reductions in premium rates, leading to downward pressure on commission revenues (a ‘soft’ market), can have a potentially material impact on our commission revenues and operating margin.

A ‘hard’ market occurs when premium uplifting factors, including a greater than anticipated loss experience or capital shortages, more than offset any downward pressures on premiums. This usually has a favorable impact on our commission revenues and operating margin.

From 2000 through 2003, we benefited from a hard market with premium rates stable or increasing. During 2004, we saw a rapid transition from a hard market to a soft market, with premium rates falling in most markets. Rates continued to decline in most sectors through 2005 and 2006, with the exception of catastrophe-exposed markets. In 2007, the market softened further with decreases in many of the market sectors in which we operated and this

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continued into 2008 with further premium rate declines averaging 10% across our markets.

In 2009, the benefit of rate increases in the reinsurance market and stabilization in some specialty markets was offset by the continuing soft market in other sectors and the adverse impact of the weakened economic environment across the globe.

Our North America and UK and Ireland retail operations have been particularly impacted by the weakened economic climate and continued soft market with no material improvement in rates across most sectors; clients retaining higher levels of risk; and lower levels of insured activity. This resulted in declines in 2009 revenues in these operations, particularly amongst our smaller clients who are especially vulnerable to the economic downturn.

The difficult market conditions have continued into first half 2010 and we expect the market to remain challenging throughout the remainder of 2010.

Our main priorities in the second half of 2010 continue to be:

•  reinforcement of our sales and revenue culture to drive growth;

•  execution of our ongoing Shaping Our Future initiatives, creating incremental savings to fund growth and leveraging growth opportunities from our global footprint; and

•  further strengthening of the balance sheet and reduction in our debt to EBITDA (earnings before interest, tax, and depreciation and amortization) ratio.

EXECUTIVE SUMMARY

Overview

Despite the continued difficult trading conditions, we reported 2 percent growth in total revenues and 4 percent organic commissions and fees growth in second quarter 2010, and 3 percent growth in total revenues and 4 percent organic commissions and fees growth in first half 2010, compared with the same periods in 2009. This reflected positive organic growth in the second quarter of 8 percent for International and 7 percent for our Global operations, partly offset by a 1 percent fall in our North America operations, where revenues were adversely impacted by the soft market and continued weak economic conditions. In first half 2010, Global achieved 7 percent organic growth, International 6 percent and North America was flat compared with first half 2009.

Operating margin for both second quarter 2010 and second quarter 2009 was 21 percent, and for first half 2010 operating margin increased to 27 percent, compared with 26 percent in first half 2009. This improvement was the product of organic growth in commissions and fees and continuing control of costs, partly offset by investment in new client-facing hires and other growth initiatives.

Results from continuing operations for second quarter 2010

Net income from continuing operations in second quarter 2010 was $89 million, or $0.52 per diluted

share, compared with $87 million, or $0.52 per diluted share, in second quarter 2009.

Total revenues from continuing operations at $799 million for second quarter 2010 were $15 million, or 2 percent, higher than in second quarter 2009. This was driven by organic revenue growth of 4 percent, partly offset by a 2 percent adverse impact from foreign currency translation.

Organic revenue growth of 4 percent comprised 6 percent net new business growth (which constitutes the revenue growth from business won over the course of the quarter, net of the revenue from existing business lost) offset by a 2 percent negative impact from declining premium rates and other market factors.

Operating margin at 21 percent was in line with second quarter 2009, as the benefits of:

•  4 percent organic growth in commissions and fees;

•  a favorable period-over-period impact from foreign currency translation of about 1 percentage point as the adverse impact of foreign currency on our revenues was more than offset by a favorable impact on our expense base and lower hedging losses when compared with 2009; and

•  strict controls over new hires and replacements, letting go of poor performers and savings from actions taken in prior years;

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were offset by:

•  a $12 million increase in incentive expenses comprising a $6 million increase in the amortization of cash retention awards and a $6 million increase in the accrual for bonuses;

•  a $10 million increase in pension charges in second quarter 2010, primarily due to the non-recurrence of a $12 million pre-tax curtailment gain realized in second quarter 2009; and

•  disciplined investment in new client-facing hires and other growth initiatives.

Results from continuing operations for the six months ended June 30, 2010

Net income from continuing operations for first half 2010 was $293 million, or $1.71 per diluted share, compared with $279 million, or $1.66 per diluted share, in same period 2009.

Total revenues at $1,771 million for the first half of 2010 were $57 million, or 3 percent, higher than in 2009, as organic revenue growth of 4 percent, driven by our Global and International operations, and a 1 percent benefit from foreign currency translation, were partly offset by a reduction in investment and other income and a 1 percent decrease attributable to contingent commissions assumed as part of the HRH acquisition.

Operating margin at 27 percent in first half 2010 was 1 percentage point higher than in 2009 as the benefits of:

•  4 percent organic growth in commissions and fees;

•  a favorable period-over-period impact from foreign currency translation of about 1 percentage point, excluding the impact from the devaluation of the Venezuelan currency; and

•  strict controls over new hires and replacements, letting go of poor performers and savings from actions taken in prior years;

were partly offset by:

•  a $14 million reduction in legacy contingent commissions assumed in the acquisition of HRH;

•  a $14 million increase in incentive expenses comprising a $16 million increase in the amortization of cash retention and a $2 million decrease in the accrual for bonuses;

•  a charge of $12 million relating to the devaluation of the Venezuelan currency in January 2010;

•  a $10 million increase in share-based compensation charge, largely due to the non-recurrence of a $7 million pre-tax credit in first quarter 2009;

•  disciplined investment in new client-facing hires and other growth initiatives; and

•  a $6 million reduction in investment income driven by lower average interest rates in first half 2010 compared with 2009.

Venezuela currency devaluation

With effect from January 1, 2010 the Venezuelan economy was designated as hyper-inflationary. The Venezuelan government also devalued the Bolivar Fuerte in January 2010. As a result of these actions, we recorded a $12 million charge in other expenses in first half 2010 to reflect the re-measurement of our net assets denominated in Venezuelan Bolivar Fuerte at January 1, 2010.

Shaping Our Future and Funding for Growth

Our Shaping Our Future and Funding for Growth strategies are a series of initiatives designed to deliver profitable growth. These initiatives focus on three key areas:

•  an organic growth program designed to drive revenue growth. This program includes achieving retention and new business metrics across our businesses; increasing the productivity and effectiveness of our revenue-generating employees and recruiting the best talent in the industry; and continued development in key markets and potential growth areas such as China, Brazil, Employee Benefits, Facultative and WCMA;

•  Shaping Our Future which is driving our efficiency and profitability and includes longer term initiatives designed to enhance our infrastructure and processes, and make optimal use of our locations, including our support centers such as the offshore center in Mumbai; and

•  Funding for Growth is the initiative to manage our cost base. We have identified performance management and corporate savings that, as we execute on, will enable us to fund investments in areas such as technology and new key hires.

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Acquisitions

During first half 2010, we acquired:

•  an additional 39 percent of our Chinese operations at a total cost of approximately $17 million, bringing our ownership to 90 percent as at June 30, 2010; and

•  an additional 15 percent of our Colombian Retail operations at a total cost of approximately $1 million, bringing our ownership to 80 percent as at June 30, 2010.

Discontinued operations

No operations were discontinued during first half 2010.

Net income in first half 2009 included $1 million, recognized in the first quarter, from our Bliss & Glennon and Managing Agency Group US-based wholesale insurance operations, both of which were disposed of during 2009.

Cash and financing

Cash at June 30, 2010 was $139 million, $52 million lower than at December 31, 2009.

Total cash generated from operating activities in first half 2010 was $156 million compared with $208 million in the same period 2009. Net cash generated from operating activities in first half 2010 is after the payment of incentive awards of which $185 million were paid as cash retention awards (2009: $140 million), for details of which see below under: ‘Operating Results — General and administrative expenses — Salaries and benefits — Cash retention awards’.

In first half 2010, we made $54 million of mandatory repayments against the5-year term loan, thereby reducing the outstanding balance at June 30, 2010 to $466 million. We also repaid in full a $9 million fixed rate loan due 2010 and repurchased $7 million of 5.125% senior notes due July 2010.

In July 2010, we repaid the remaining $83 million of the 5.125% senior notes due July 2010.

At June 30, 2010, we have $30 million outstanding under our revolving credit facility, compared with $95 million at June 30, 2009 and nil at December 31, 2009. Drawings under the facility are typically higher in the first half of the year due to the timing of incentive awards.

Total debt, total equity and the capitalization ratio at June 30, 2010 and December 31, 2009 were as follows:

	June 30,			December 31,
	2010			2009
	(millions, except percentages)
Long-term debt	$	2,154		$	2,165
Short-term debt		193			209
Total debt	$	2,347		$	2,374
Total equity	$	2,429		$	2,229
Capitalization ratio		49	%		52	%

Liquidity

Our principal sources of liquidity are cash from operations, cash and cash equivalents of $139 million at June 30, 2010 and $270 million remaining availability under our revolving credit facility.

Based on current market conditions and information available to us at this time, we believe that we have sufficient liquidity to meet our cash needs for at least the next 12 months.

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OPERATING RESULTS — GROUP

Revenues

											Change attributable to:
								Foreign			Acquisitions						Organic
					%			currency			and			Contingent			revenue
Three months ended June 30,	2010		2009		Change			translation			disposals			commissions(b)			growth(a)
	(millions)
Global	$	216	$	207		4	%		(2	)%		(1	)%		—	%		7	%
North America		326		332		(2	)%		—	%		—	%		(1	)%		(1	)%
International		247		233		6	%		(4	)%		2	%		—	%		8	%
Commissions and fees	$	789	$	772		2	%		(2	)%		—	%		—	%		4	%
Investment income		10		12		(17	)%
Other income		—		—		—	%
Total revenues	$	799	$	784		2	%

											Change attributable to:
								Foreign			Acquisitions						Organic
					%			currency			and			Contingent			revenue
Six months ended June 30,	2010		2009		Change			translation			disposals			commissions(b)			growth(a)
	(millions)
Global	$	517	$	482		7	%		1	%		(1	)%		—	%		7	%
North America		687		703		(2	)%		—	%		—	%		(2	)%		—	%
International		548		502		9	%		1	%		2	%		—	%		6	%
Commissions and fees	$	1,752	$	1,687		4	%		1	%		—	%		(1	)%		4	%
Investment income		19		25		(24	)%
Other income		—		2		(100	)%
Total revenues	$	1,771	$	1,714		3	%

(a)

Organic commissions and fees growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; (iv) in North America, legacy contingent commissions assumed as part of the acquisition of HRH in 2008 and that had not been converted into higher standard commission; and (v) investment income and other income from reported revenues.

(b)

Included in North America reported commissions and fees were legacy HRH contingent commissions of $2 million in the second quarter 2010 and $10 million in first half 2010 compared with $4 million and $24 million in the second quarter and first half of 2009, respectively.

Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Second quarter 2010

Revenues for the second quarter 2010, at $799 million, were $15 million, or 2 percent, higher than 2009. The increase reflects 4 percent organic growth in commissions and fees, partly offset by a negative 2 percent impact from foreign currency translation.

Investment income in second quarter 2010 was $2 million lower than 2009, with the decrease reflecting lower average interest rates in second quarter 2010 compared with 2009. The impact of rate decreases on our investment income was partially mitigated by our forward hedging program,

from which we expect to generate additional income in 2010 compared to current LIBOR based rates.

Our International and Global operations earn a significant portion of their revenues in currencies other than the US dollar, including the Euro and Pound Sterling. In the three months ended June 30, 2010, reported revenues were adversely impacted by the period-over-period effect of foreign currency translation, in particular due to the weakening of the Euro and Pound Sterling against the US dollar during the quarter, compared with same period 2009.

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Organic growth in commissions and fees was 4 percent for the second quarter of 2010. International achieved 8 percent growth with positive contributions from all regions; Global achieved 7 percent growth of which 5 percent was attributable to WCMA and North America reported 1 percent negative growth, reflecting the continued soft market and ongoing weakened economic conditions, partially mitigated by growth in new business.

Six months ended June 30, 2010

Revenues for the first half 2010, at $1,771 million, were $57 million, or 3 percent, higher than 2009. The increase reflects the benefit of 4 percent organic growth in commissions and fees and a 1 percent period over period favorable impact from foreign currency translation, partly offset by a 1 percent reduction in legacy contingent commissions, together with smaller reductions in investment and other income.

In the six months ended June 30, 2010, reported revenues in our International and Global operations were favorably impacted by the period-over-period effect of foreign currency translation, as the relative effect of the second quarter 2010 weakening of the Euro against the US dollar more than offset its first quarter 2010 strengthening. This increased the US dollar value of both our Euro revenues and London Market based revenues earned in Euros, compared with first half 2009.

Organic growth in commissions and fees was 4 percent for the first half of 2010. Global achieved 7 percent growth, driven by strong growth in our WCMA business; International achieved 6 percent growth; and North America was flat, as the benefit of growth in new business was offset by the impact of the continued soft market and ongoing weakened economic conditions.

Organic revenue growth by segment is discussed further in ‘Operating Results — Segment Information’ below.

General and administrative expenses

	Three months						Six months
	ended June 30,						ended June 30,
	2010			2009			2010			2009
	(millions, except percentages)
Salaries and benefits	$	456		$	443		$	942		$	923
Other		135			139			284			277
General and administrative expenses	$	591		$	582		$	1,226		$	1,200
Salaries and benefits as a percentage of revenues		57	%		57	%		53	%		54	%
Other as percentage of revenues		17	%		18	%		16	%		16	%

Salaries and benefits

Second quarter 2010

Salaries and benefits were 57 percent of revenues in both second quarter 2010 and 2009, reflecting the benefits of:

•  a period-over-period benefit from foreign currency translation driven primarily by the strengthening of the US dollar against the Pound Sterling, in which our London Market based operations incur the majority of their salaries and benefits expense; and

•  strict controls over new hires and replacements, letting go of poor performers and savings from actions taken in prior years, including Shaping Our Future and Right Sizing Willis initiatives in 2008 and 2009;

offset by:

•  a $12 million increase in incentive expenses comprising a $6 million increase in the amortization of cash retention awards — see below — and a $6 million increase in the accrual for bonuses;

•  a $10 million increase in pension charges in second quarter 2010, primarily due to the non-recurrence of a $12 million curtailment gain realized in second quarter 2009 on the closure of our US defined benefit pension plan to accrual of benefit for future service, partly offset by related cost savings in 2010; and

56

•  disciplined investment in new client-facing hires and other growth initiatives.

Six months ended June 30, 2010

Salaries and benefits were 53 percent of first half 2010 revenues, compared with 54 percent in 2009 reflecting the benefits of:

•  a $7 million reduction in severance costs due to fewer positions being eliminated and at a lower average cost per head. In first half 2010 we identified approximately 320 positions that have been or will be eliminated as part of our continued focus on managing expense; this compares with some 350 positions eliminated in first half 2009;

•  strict controls over new hires and replacements, letting go of poor performers and savings from actions taken in prior years, including Shaping Our Future and Right Sizing Willis initiatives; and

•  a period-over-period benefit from foreign currency translation driven primarily by the strengthening of the US dollar against the Pound Sterling;

partly offset by:

•  a $14 million increase in incentive expenses comprising a $16 million increase in the amortization of cash retention awards — see below — and a $2 million decrease in the accrual for bonuses;

•  a $10 million increase in share-based compensation mainly reflecting the non-recurrence of a $7 million credit in first half 2009. The credit in 2009 related to accumulated compensation expense for certain 2008 awards which were dependent upon performance targets which the Company did not achieve; and

•  disciplined investment in 250 new client-facing hires and spending on other growth initiatives.

Cash retention awards

We have a cash retention award program in place. We started making cash retention awards in 2005 to a small number of employees. With the success of the program, we have expanded it over time to include more staff and we believe it is a contributing factor to the reduction in employee turnover we have seen in recent years.

Salaries and benefits do not reflect the unamortized portion of annual cash retention awards made to employees. Employees must repay a proportionate amount of these cash retention awards if they voluntarily leave our employ (other than in the event of retirement or permanent disability) before a certain time period, currently three years. We make cash payments to our employees in the year we grant these retention awards and recognize these payments ratably over the period they are subject to repayment, beginning in the quarter in which the award is made.

During the second quarter and first half of 2010, we made $16 million and $185 million of cash retention payments respectively compared with $29 million and $140 million in the same periods of 2009. Salaries and benefits in the second quarter and first half of 2010 include $32 million and $60 million respectively of amortization of cash retention payments made on or before June 30, 2010 compared with $26 million and $44 million in the same periods of 2009. As of June 30, 2010, December 31, 2009 and June 30, 2009, we included $217 million, $98 million and $142 million, respectively, in other assets on the balance sheet, which represented the unamortized portion of cash retention payments made on or before those dates.

Other expenses

Second quarter 2010

Other expenses were 17 percent of revenues in second quarter 2010 compared with 18 percent in 2009, as increases in travel and entertaining expenses in support of our revenue growth initiatives were more than offset by smaller savings elsewhere and a net positive period-over-period impact from foreign currency translation.

Six months ended June 30, 2010

Other expenses were 16 percent of revenues in both first half 2010 and same period 2009, despite the $12 million first quarter 2010 charge relating to the devaluation of the Venezuelan currency. This charge, together with increases in travel and entertaining expenses in support of our revenue growth initiatives, were offset by savings elsewhere and the benefit of significantly lower losses on forward rate contracts.

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Amortization of intangible assets

Amortization of intangible assets for second quarter 2010 was $21 million compared with $23 million in 2009 and for the six months ended June 30, 2010 was $42 million compared with $47 million in 2009.

Theperiod-over-period decreases primarily reflect the declining charge for the amortization of the HRH customer relationship intangible which is being amortized in line with the underlying discounted cash flows.

Operating income and margin (operating income as a percentage of revenues)

	Three months						Six months
	ended June 30,						ended June 30,
	2010			2009			2010			2009
	(millions, except percentages)
Revenues	$	799		$	784		$	1,771		$	1,714
Operating income		169			165			470			439
Operating margin or operating income as a percentage of revenues		21	%		21	%		27	%		26	%

Second quarter 2010

Operating margin was 21 percent in both second quarter 2010 and 2009, as the benefits of:

•  4 percent organic growth in commissions and fees;

•  a favorable period-over-period impact from foreign currency translation equivalent to approximately 1 percentage point, primarily reflecting the decreased dollar value of our net Pound Sterling expense base driven by the period-over-period weakening of the Pound Sterling against the US dollar; and

•  strict controls over new hires and replacements, letting go of poor performers and savings from actions taken in prior years, including Shaping Our Future and Right Sizing Willis initiatives;

were offset by:

•  a $12 million increase in incentive expenses comprising a $6 million increase in the amortization of cash retention awards and a $6 million increase in the accrual for bonuses;

•  a $10 million increase in pension charges in second quarter 2010, primarily due to the non-recurrence of a $12 million pre-tax curtailment gain realized in second quarter 2009 on the closure of our US defined benefit pension plan to accrual of benefit for future service, partly offset by related cost savings in 2010; and

•  disciplined investment in new client-facing hires and other growth initiatives.

Six months ended June 30, 2010

Operating margin at 27 percent in first half 2010 was 1 percentage point higher than in 2009, with the increase reflecting the benefit of:

•  4 percent organic growth in commissions and fees;

•  a favorable period-over-period impact from foreign currency translation of approximately 1 percentage point, excluding the impact from the devaluation of the Venezuelan currency. This reflects the net benefit of: lower losses on our forward rate hedging program; partly offset by the weakening of the Euro against the US dollar, reducing the US dollar value of our net Euro income and a stronger period-over-period Pound Sterling which increases the US dollar value of our net Pound Sterling expense base; and

•  strict controls over new hires and replacements, letting go of poor performers and savings from actions taken in prior years, including Shaping Our Future and Right Sizing Willis initiatives;

partly offset by:

•  a $14 million reduction in legacy contingent commissions assumed on the acquisition of HRH;

•  a $14 million increase in incentive expenses comprising a $16 million increase in the amortization of cash retention awards and a $2 million decrease in the accrual for bonuses;

•  a charge of $12 million relating to the devaluation of the Venezuelan currency in January 2010;

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•  a $10 million increase in share-based compensation charge, largely due to the non-recurrence of a $7 million pre-tax credit in first quarter 2009;

•  disciplined investment in new client-facing hires and other growth initiatives; and

•  a $6 million reduction in investment income driven by lower average interest rates in first half 2010 compared with 2009.

Operating segment margins are discussed in ‘Operating Results — Segment Information’ below.

Interest expense

Interest expense in second quarter 2010 of $41 million was $2 million lower than in 2009, largely reflecting interest expense savings arising from theperiod-over-period reduction in the outstanding balances on our term loan and revolving credit facility debt.

Interest expense in first half 2010 of $84 million was $3 million higher than in 2009, largely

reflecting the higher coupon payable on the $500 million of 12.875% senior unsecured notes issued in March 2009 to refinance part of the lower coupon interim credit facility relating to the HRH acquisition, partly offset by interest expense savings arising from the period-over-period reduction in term loan and revolving credit facility balances.

Income taxes

	Three months						Six months
	ended June 30,						ended June 30,
	2010			2009			2010			2009
	(millions, except percentages)
Income before taxes and interest in earnings of associates	$	128		$	122		$	386		$	358
Income tax charge		35			31			102			93
Effective tax rate		27	%		25	%		26	%		26	%

The effective tax rate for first half 2010 at 26 percent was consistent with first half 2009 as the benefit of a $3 million prior year tax credit was offset by there being no tax credits in relation to the $12 million

charge relating to the devaluation of the Venezuelan currency and the net loss on disposal of operations.

Excluding these items, the underlying tax rate at 26 percent remains in line with full year 2009.

Interest in earnings of associates

Interest in earnings of associates, net of tax, in first half 2010 of $18 million was $8 million lower than in first half 2009. This fall is primarily driven by the reduction from 49 percent to 31 percent in our ownership interest in Gras Savoye, as part of the reorganization of their capital structure in December 2009. Interest receivable on the vendor financing we

provided as part of the capital reorganization is also recorded under this caption. As previously advised, we continue to expect that the reduction in our ownership of Gras Savoye will reduce the 2010 interest in earnings of associates by approximately $10 million compared with 2009.

Net income and diluted earnings per share from continuing operations

	Three months				Six months
	ended June 30,				ended June 30,
	2010		2009		2010		2009
	(millions, except per share data)
Net income from continuing operations	$	89	$	87	$	293	$	279
Diluted earnings per share from continuing operations	$	0.52	$	0.52	$	1.71	$	1.66
Average diluted number of shares outstanding		171		168		171		168

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Second quarter 2010

Net income from continuing operations for second quarter 2010 was $89 million compared with $87 million in 2009. This increase reflected the benefit of:

•  the $4 million net increase in operating income discussed above; and

•  decreased interest expense, largely reflecting aperiod-over-period reduction in the outstanding balances on our term loan and revolving credit facility debt;

partly offset by:

•  the reduction in earnings from associates.

Diluted earnings per share from continuing operations for second quarter 2010 at $0.52 were in line with 2009.

Foreign currency translation had a $0.03 favorable net impact on earnings per diluted share.

Diluted share count in second quarter 2010 was 171 million compared with 168 million in 2009 which had a negative $0.01 impact on earnings per diluted share.

Six months ended June 30, 2010

Net income from continuing operations for first half 2010 was $293 million compared with $279 million in 2009. The $14 million increase primarily reflected the $31 million increase in operating income partly offset by the $8 million decrease in earnings from associates, net of tax, as a result of the Gras Savoye reorganization, and a $9 million increase in the tax charge.

Foreign currency translation, excluding the impact of the Venezuelan currency devaluation, had a $0.09 favorable impact on earnings per diluted share. This was largely offset by a $0.07 per diluted share negative impact from the Venezuela currency devaluation in January 2010.

Diluted earnings per share from continuing operations for first half 2010 increased to $1.71, compared to $1.66 in 2009 as the benefit of the increased net income was partly offset by a 3 million increase in average diluted shares outstanding.

OPERATING RESULTS — SEGMENT INFORMATION

We organize our business into three segments: Global, North America and International. Our Global business provides specialist brokerage and consulting services to clients worldwide for risks arising from specific industries and activities. North America and International comprise our retail

operations and provide services to small, medium and major corporations.

The following table is a summary of our operating results by segment for the three and six months ended June 30, 2010 and 2009:

	Three months ended June 30, 2010								Three months ended June 30, 2009
			Operating			Operating					Operating			Operating
	Revenues		income			margin			Revenues		income			margin
	(millions)								(millions)
Global	$	217	$	69			32	%	$	209	$	74			35	%
North America		331		68			21	%		336		75			22	%
International		251		59			24	%		239		55			23	%
Total Retail		582		127			22	%		575		130			23	%
Corporate & Other(i)		—		(27	)		n/a			—		(39	)		n/a
Total Consolidated	$	799	$	169			21	%	$	784	$	165			21	%

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	Six months ended June 30, 2010								Six months ended June 30, 2009
			Operating			Operating					Operating			Operating
	Revenues		income			margin			Revenues		income			margin
	(millions)								(millions)
Global	$	520	$	207			40	%	$	487	$	201			41	%
North America		696		161			23	%		713		169			24	%
International		555		162			29	%		514		151			29	%
Total Retail		1,251		323			26	%		1,227		320			26	%
Corporate & Other(i)		—		(60	)		n/a			—		(82	)		n/a
Total Consolidated	$	1,771	$	470			27	%	$	1,714	$	439			26	%

⁽ⁱ⁾ Corporate & Other comprises the following:

	Three months						Six months
	ended June 30,						ended June 30,
	2010			2009			2010			2009
Amortization of intangible assets	$	(21	)	$	(23	)	$	(42	)	$	(47	)
Net loss on disposal of operations		(2	)		—			(2	)		—
Foreign exchange hedging		(2	)		(9	)		(6	)		(23	)
Foreign exchange on the UK pension plan asset		2			(8	)		6			(7	)
HRH integration costs		—			(1	)		—			(4	)
Venezuelan currency devaluation		—			—			(12	)		—
Other		(4	)		2			(4	)		(1	)
	$	(27	)	$	(39	)	$	(60	)	$	(82	)

Global

Our Global operations comprise Global Specialties, Reinsurance, Faber & Dumas and as of 2010, WCMA.

Faber & Dumas includes Glencairn, our London-based wholesale brokerage operation and our Fine Art, Jewelry and Specie; Special Contingency Risk and Hughes-Gibb units. WCMA provides financial

advice on mergers and acquisitions and capital markets products and may place or underwrite securities.

The following table sets out revenues, organic revenue growth and operating income and margin for the quarter and six month periods ended June 30, 2010 and 2009:

	Three months						Six months
	ended June 30,						ended June 30,
	2010			2009			2010			2009
	(millions, except						(millions, except
	percentages)						percentages)
Commissions and fees	$	216		$	207		$	517		$	482
Investment income		1			2			3			5
Total revenues	$	217		$	209		$	520		$	487
Operating income	$	69		$	74		$	207		$	201
Organic revenue growth(a)		7	%		7	%		7	%		6	%
Operating margin		32	%		35	%		40	%		41	%

^(a) Organic commissions and fees growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; and (iv) investment income and other income from reported revenues.

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Revenues

Commissions and fees of $216 million were $9 million, or 4 percent, higher in second quarter 2010 compared with second quarter 2009. Organic revenue growth of 7 percent was partly offset by a negative 2 percent impact from foreign currency translation and a net 1 percent impact from acquisitions and disposals.

Our young WCMA business contributed 5 percent of Global’s organic revenue growth in the quarter, substantially due to a single capital markets transaction. WCMA is a transaction oriented business and we therefore expect its results will be more variable than some of our other businesses.

Reinsurance and our Global Specialties businesses also saw organic growth in second quarter 2010, driven by good net new business generation despite the adverse impact of the continued difficult rate environment and soft market in many of the specialty classes.

Global Specialties reported strong growth in the quarter driven by strong contributions from Financial and Executive Risks, and Energy.

Second quarter growth in Reinsurance was more modest and was headed by growth in new business, especially Marine and Aviation. Despite high loss levels earlier in the year, rates remain soft except for marine and energy.

Organic revenue growth for first half 2010 was 7 percent. Both Global Specialties and Reinsurance recorded good new business generation including Reinsurance growth in North America, Europe and Asia. The growth in North America was partly driven by the team recruited from Carvill in first quarter 2009. As a result of strong reinsurance

underwriting profits in 2009, with the exception of marine and energy, there has been a general but disciplined softening of rates in 2010 which remain a significant headwind for growth.

Client retention levels remained high at 89 percent for the first six months of 2010.

Operating margin

Operating margin in our Global operations was 32 percent in second quarter 2010, compared with 35 percent in 2009 and 40 percent in first half 2010, compared with 41 percent in 2009.

These margins reflect the benefits of good organic revenue growth and disciplined cost control.

Offsetting this was the impact of foreign currency translation. The London Market businesses within our Global operations earn revenues in US dollars, Pounds Sterling and Euros and primarily incur expenses in Pounds Sterling. In addition, they are exposed to exchange risk on certain sterling-denominated balances. In both the three and six months ended June 30, 2010, foreign currency translation adversely impacted Global’s margin by approximately 4 percentage points and 2 percentage points respectively when compared with 2009.

Margins were also impacted by costs associated with selective recruitment, including the team recruited from Carvill late in first quarter 2009, and higher share-based compensation, in part due to the non-recurrence of a credit in first quarter 2009.

Excluding the impact of foreign currency translation, Global’s operating margin was 1 percent higher in both the three and six months ended June 30, 2010 compared with 2009.

North America

Our North America business provides risk management, insurance brokerage, related risk services and employee benefits brokerage and consulting to a wide array of industry and client segments in the United States and Canada.

The following table sets out revenues, organic revenue growth and operating income and margin for the quarter and six month periods ended June 30, 2010 and 2009:

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	Three months ended June 30,						Six months ended June 30,
	2010			2009			2010			2009
	(millions, except percentages)						(millions, except percentages)
Commissions and fees	$	326		$	332		$	687		$	703
Investment income		5			4			9			8
Other income		—			—			—			2
Total revenues	$	331		$	336		$	696		$	713
Operating income	$	68		$	75		$	161		$	169
Organic revenue growth(a)		(1	)%		(8	)%		—	%		(7	)%
Operating margin		21	%		22	%		23	%		24	%

^(a) Organic commissions and fees growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; (iv) in North America, legacy contingent commissions assumed as part of the acquisition of HRH in 2008 and that had not been converted into higher standard commission; and (v) investment income and other income from reported revenues.

Included in North America reported commissions and fees were legacy HRH contingent commissions of $2 million in the second quarter 2010 and $10 million in the first half of 2010 compared with $4 million and $24 million in the corresponding periods of 2009, respectively.

Revenues

Our North America segment continues to be impacted by headwinds from soft insurance market conditions and ongoing weakness in the US economy.

Commissions and fees of $326 million were $6 million, or 2 percent, lower for the three months ended June 30, 2010 compared with 2009, reflecting the continued adverse impact of the soft market conditions and a $2 million decrease in legacy contingent commissions assumed as part of the HRH acquisition.

Organic revenue growth was negative 1 percent in second quarter 2010 compared with 2009 as the benefits of:

•  strong new business, with improved client retention;

•  positive growth in the employee benefits practice; and

•  a $3 million benefit from a one-time accounting adjustment related to the HRH acquisition within the specialty businesses;

were more than offset by:

•  a negative 4 percent impact from rate declines and other market factors; and

•  continued weakness in our Construction business reflecting the ongoing economic challenges in that sector.

Commissions and fees of $687 million were $16 million, or 2 percent, lower for first half 2010 than in 2009, of which $14 million was attributable to a decrease in legacy contingency commissions assumed as part of the HRH acquisition. Organic revenue growth was flat for the six months ended June 30, 2010 as the benefits of net new business generation and the $3 million one-time accounting adjustment in the second quarter were offset by the impact of the soft market conditions and weak US economy.

Net new business in the second quarter and first half of 2010 was driven by some of our specialist businesses, with healthcare, financial institutions, professional lines and technology/telecom businesses all reporting strong growth. Our employee benefits practice, which represents approximately 20 percent of North America commissions and fees, showed growth of 2 percent in second quarter 2010 with some positive signs including modest headcount stabilization. Although we currently believe the new US healthcare legislation could be beneficial for our business, at this time, its potential impact is uncertain. In our Construction business declines in fees and commissions were single digits in first half 2010

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compared with the double digit declines in last quarter 2009.

Net new business growth also includes the benefit of higher standard commissions where these have been negotiated in lieu of contingent commissions. These higher standard commissions however may not have been negotiated at the same level or be received in the same periods as the related contingent commissions. Furthermore, the business to which they related may not have been renewed.

Client retention levels remained stable at 92 percent for the first six months of 2010.

Operating margin

Operating margin in North America was 21 percent in second quarter 2010 compared with 22 percent in same period 2009 and 23 percent in first half 2010,

compared with 24 percent in 2009. The lower margins mainly reflected the impact of:

•  the non-recurrence of a $9 million benefit in second quarter 2009 from the curtailment of the US pension scheme relating to our North America retail employees; and

•  theperiod-over-period reduction in legacy HRH contingent commissions of $14 million in first half 2010, of which $2 million relate to second quarter;

partly offset by the benefit of:

•  lower period-over-period pension charges, excluding the second quarter 2009 curtailment gain; and

•  strong cost controls.

International

Our International business comprises our retail operations in Eastern and Western Europe, the United Kingdom and Ireland, Asia-Pacific, Russia, the Middle East, South Africa and Latin America. The services provided are focused according to the characteristics of each market and vary across offices, but generally include direct risk

management and insurance brokerage and employee benefits consulting.

The following table sets out revenues, organic revenue growth and operating income and margin for the quarter and six month periods ended June 30, 2010 and 2009:

	Three months						Six months
	ended June 30,						ended June 30,
	2010			2009			2010			2009
	(millions, except						(millions, except
	percentages)						percentages)
Commissions and fees	$	247		$	233		$	548		$	502
Investment income		4			6			7			12
Total revenues	$	251		$	239		$	555		$	514
Operating income	$	59		$	55		$	162		$	151
Organic revenue growth(a)		8	%		5	%		6	%		5	%
Operating margin		24	%		23	%		29	%		29	%

^(a) Organic commissions and fees growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; (iv) investment income and other income from reported revenues.

Revenues

Commissions and fees of $247 million were $14 million, or 6 percent, higher for the three months ended June 30, 2010 compared with 2009 of which 8 percent was attributable to organic revenue growth, 2 percent to acquisitions and disposals and a negative 4 percent to foreign currency translation. Net new business growth was 11 percent and there

was a negative 3 percent impact from rates and other market factors.

For the six months ended June 30, 2010, commissions and fees were $46 million, or 9 percent, higher compared with 2009 of which 6 percent was attributable to organic revenue growth, 2 percent to acquisitions and disposals and 1 percent to foreign currency translation.

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A significant part of International’s revenues are earned in currencies other than the US dollar. The US dollar has strengthened against a number of these currencies in second quarter 2010 compared with the same period in 2009, most notably the Euro, Pound Sterling and Australian dollar. Consequently, revenues reported in US dollars have decreased by 4 percent as a result of foreign currency translation in second quarter 2010 compared to same period 2009.

For the six months ended June 30, 2010, as a whole, the US dollar weakened against the Euro, Pound Sterling and Australian dollar as the relative effect of its second quarter strengthening was more than offset by first quarter 2010 weakening when compared with the same periods of 2009. Consequently, revenues reported in US dollars have increased by 1 percent as a result of foreign currency translation in first half 2010, compared to 2009.

Organic revenue growth was strongest in emerging markets with Latin America, in particular Brazil and Chile, Asia, in particular China and Indonesia, and Russia all reporting strong growth in second quarter and first half 2010. Despite the challenging

economic environment in continental Europe, overall growth was positive in both second quarter and first half 2010 with good contributions from Switzerland and Italy. Spain reported strong growth in the second quarter. Organic revenue growth was also positive in our UK and Irish retail operations as we begin to see signs of an improving economy in the United Kingdom, and consequent growth in our UK revenues partly offset by negative growth in our Irish revenues. Our employee benefits practice, which represents approximately 10 percent of International commissions and fees, continued to perform well in the first half of 2010 with growth in the mid single digits.

Client retention levels remained high at 92 percent for the first six months of 2010.

Operating margin

Operating margin in International was 24 percent in second quarter 2010 compared with 23 percent in second quarter 2009 and 29 percent in both first half 2010 and same period 2009 as the benefit of strong revenue growth and focused expense management has been largely offset by spending on initiatives to drive future growth.

CRITICAL ACCOUNTING ESTIMATES

The accounting estimates or assumptions that management considers to be the most important to the presentation of our financial condition or operating performance are discussed in our Annual

Report onForm 10-K for the year ended December 31, 2009.

There were no significant additions or changes to these assumptions in first half 2010.

NEW ACCOUNTING STANDARDS

There were no new accounting standards issued during the second quarter 2010 that would have a

significant impact on the Company’s reporting.

LIQUIDITY AND CAPITAL RESOURCES

In the short term, our capital management priority is debt reduction. Total debt as of June 30, 2010 decreased to $2.3 billion, compared with $2.4 billion at December 31, 2009.

In first half 2010, we made $54 million of mandatory repayments against the5-year term loan due 2013, thereby reducing the outstanding balance as at June 30, 2010 to $466 million. We also repaid in full a $9 million fixed rate loan due 2010 and repurchased $7 million of 5.125% senior notes due July 2010.

In July 2010, we repaid the remaining $83 million of the 5.125% senior notes due July 2010.

At June 30, 2010, we have $30 million outstanding under our $300 million revolving credit facility, compared with $95 million at June 30, 2009 and $nil at December 31, 2009. Drawings under the facility are typically higher in the first half of the year due to incentive payments in the first quarter.

Following the repayment of the $83 million of 5.125% senior notes that matured in July 2010, the only other mandatory debt repayments over the 12 month period from June 30, 2010 are scheduled

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repayments on our $700 million5-year term loan totaling $110 million.

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 are held on account of, or due from, clients as 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 assets and liabilities. All these balances due or payable are included in accounts receivable and accounts payable on the balance sheet. We earn interest on these funds during the time between the receipt of the cash and the time the cash is paid out. Fiduciary cash must be kept in certain regulated bank accounts subject to guidelines, which generally emphasize capital preservation and liquidity, and is not generally available to service our debt or for other corporate purposes.

Own funds

As of June 30, 2010, we had cash and cash equivalents of $139 million, compared with $191 million at December 31, 2009 and $270 million of our $300 million revolving credit facility remained available to draw.

Operating activities

Total cash generated from operating activities in first half 2010 was $156 million compared with $208 million in first half 2009. Cash generated from operating activities in first half 2010 is after the payment of incentive awards, of which $185 million were paid as cash retention awards (2009: $140 million).

Investing activities

Total net cash used in investing activities was $57 million in the six months ended June 30, 2010 compared with $15 million in the same period of 2009.

The increase in cash used in investing activities of $42 million was mainly attributable to:

•  the net proceeds in first half 2009 of $37 million received on the disposal of Bliss and Glennon;

•  the $21 million proceeds on sale of our short-term investments in first half 2009, as we liquidated our own funds portfolio;

•  an increase of $7 million in the net investment in tangible fixed assets in first half 2010 compared with the same period in 2009, mainly reflecting increased spend on infrastructure projects; and

•  a $12 million increase in acquisitions of subsidiaries, primarily comprising cash payments for the deferred consideration relating to previous acquisitions;

partly offset by:

•  the payment in first half 2009 of $41 million in respect of an additional 5 percent interest in Gras Savoye.

Financing activities

Net cash used in financing activities was $137 million in the six months ended June 30, 2010 compared with $270 million in the same period of 2009.

The decrease in cash used in financing activities of $133 million was mainly attributable to:

•  a $268 million net outflow in 2009 relating to the repayment/refinancing of $750 million of the then outstanding interim credit facility. As part of the refinancing we issued $500 million of 12.875% senior unsecured notes in March 2009 and received net proceeds of $482 million;

partly offset by:

•  a $65 million reduction in the drawdown against our revolving credit facility from $95 million in first half 2009 to $30 million in first half 2010; and

•  first half 2010 debt repayments of $70 million comprising: the $54 million of mandatory repayments against the5-year term loan; a repurchase of $7 million of July 2010 bonds; and the repayment of a $9 million fixed rate loan due 2010.

Share buybacks

There have been no share buybacks in first half 2010. There remains $925 million under the current buyback authorization.

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Dividends

Cash dividends paid in first half 2010 were $89 million compared with $87 million in same period 2009. The $2 million change reflects a small increase in the number of shares as a result of share

option exercises during 2009. In July 2010, we declared a quarterly cash dividend of $0.26 per share, an annual rate of $1.04 per share and unchanged from the prior year.

CONTRACTUAL OBLIGATIONS

There have been no material changes to our contractual obligations since December 31, 2009,

except for contractual, planned payments.

OFF-BALANCE SHEET TRANSACTIONS

Apart from commitments, guarantees and contingencies, as disclosed in Note 7 to the Condensed Consolidated Financial Statements, the Company has no off-balance sheet arrangements

that have, or are reasonably likely to have, a material effect on the Company’s financial condition, results of operations or liquidity.

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Item 3 —  Quantitative and Qualitative Disclosures about Market Risk

There has been no material change with respect to market risk from that described in the Company’s

Annual Report onForm 10-K for the year ended December 31, 2009.

Item 4 —  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2010, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chairman and Chief Executive Officer and the Chief Financial Officer and Global Group Financial Controller, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange ActRule 13a-15(e). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer 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 them as appropriate to allow for timely decisions regarding required disclosure.

There have been no changes in the Company’s internal controls over financial reporting during the quarter ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1 — Legal Proceedings

Information regarding legal proceedings is set forth in Note 7 — ‘Commitments and Contingencies’ to the Condensed Consolidated Financial Statements (Unaudited) appearing in Part I, Item 1 of this report and incorporated herein by reference.

Item 1A — Risk Factors

There have been no material changes to the risk factors described in Part I, Item 1A ‘Risk Factors’ included in theForm 10-K for the year ended December 31, 2009.

Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter ended June 30, 2010, no shares were issued by the Company without registration under the Securities Act of 1933, as amended.

The Company may purchase shares, from time to time in the open market or through negotiated trades with persons who are not affiliates of the Company, at an aggregate purchase price of up to $1 billion under an open-ended program approved by the Board of Directors. The Company did not repurchase any of its own shares during the quarter covered by this report.

Item 3 — Defaults Upon Senior Securities

None.

Item 4 — (Removed and Reserved)

Item 5 — Other Information

None.

Item 6 — Exhibits

10	.1	Form of Time-Based Restricted Share Units Award Agreement granted under the HRH 2007 Share Incentive Plan
10	.2	Form of Performance-Based Restricted Share Units Award Agreement granted under the HRH 2007 Share Incentive Plan
10	.3	Form of Time-Based Share Option Agreement granted under the HRH 2007 Share Incentive Plan
10	.4	Form of Performance-Based Share Option Agreement granted under the HRH 2007 Share Incentive Plan
31	.1	Certification Pursuant toRule 13a-14(a)
31	.2	Certification Pursuant toRule 13a-14(a)
32	.1	Certification Pursuant to 18 U.S.C. Section 1350
32	.2	Certification Pursuant to 18 U.S.C. Section 1350
101	.INS*	XBRL Instance Document
101	.SCH*	XBRL Taxonomy Extension Schema Document
101	.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101	.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101	.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101	.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed furnished and not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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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 Group Holdings plc

(Registrant)

By:  /s/  Michael K. Neborak

Michael K. Neborak

Group Chief Financial Officer

(Principal Financial and Accounting Officer)

Dated: August 6, 2010

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