FINANCIAL INFORMATION FOR ISSUER, PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Notes) | 3 Months Ended |
Mar. 31, 2014 |
Condensed Financial Statements, Captions [Line Items] | ' |
Financial Information for issuer, Parent guarantor, guarantor subsidiaries and non-guarantor subsidiaries [Text Block] | ' |
FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES |
Willis North America Inc. (‘Willis North America’) has $148 million senior notes outstanding that were issued on July 1, 2005, $394 million of senior notes issued on March 28, 2007 and $187 million of senior notes issued on September 29, 2009. |
All direct obligations under the senior notes were jointly and severally, irrevocably and fully and unconditionally guaranteed by Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, Trinity Acquisition plc and Willis Group Limited, collectively the ‘Other Guarantors’, and with Willis Group Holdings, the ‘Guarantor Companies’. |
The debt securities that were issued by Willis North America and guaranteed by the entities described above, and for which the disclosures set forth below relate and are required under applicable SEC rules, were issued under an effective registration statement. |
Presented below is condensed consolidating financial information for: |
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(i) | Willis Group Holdings, which is a guarantor, on a parent company only basis; | | | | | | | | | | | | | | | | | | | | | | |
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(ii) | the Other Guarantors, which are all 100 percent directly or indirectly owned subsidiaries of the parent and are all direct or indirect parents of the issuer; | | | | | | | | | | | | | | | | | | | | | | |
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(iii) | the Issuer, Willis North America; | | | | | | | | | | | | | | | | | | | | | | |
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(iv) | Other, which are the non-guarantor subsidiaries, on a combined basis; | | | | | | | | | | | | | | | | | | | | | | |
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(v) | Consolidating adjustments; and | | | | | | | | | | | | | | | | | | | | | | |
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(vi) | the Consolidated Company. | | | | | | | | | | | | | | | | | | | | | | |
The equity method has been used for investments in subsidiaries in the unaudited condensed consolidating balance sheets as of March 31, 2014 of Willis Group Holdings, the Other Guarantors and the Issuer. |
The entities included in the Other Guarantors column as of March 31, 2014 are Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, Trinity Acquisition plc and Willis Group Limited. |
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Restatement to 2013 financial information |
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Regulation S-X, Article 3, Rule 3-10, allows for the presentation of condensed consolidating financial information. In accordance with these rules, the condensed consolidating financial information should be presented in accordance with US GAAP, except that (i) the guarantor and non-guarantor information is presented on a combined rather than consolidated basis, which requires the elimination of intra-entity activity and (ii) investments in subsidiaries are required to be presented under the equity method of accounting. Subsequent to the issuance of our financial statements for the first quarter 2013, management determined that certain balances were not presented in accordance with the above principles and have therefore restated our condensed consolidating financial information to reflect (i) gross, rather than net, presentation of intercompany balance sheet positions, (ii) dividends received from subsidiaries as reductions to the equity method investment balances as opposed to component of investment income from group undertakings, and (iii) appropriate push down accounting for goodwill. |
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The impacts of these changes on the previously reported 2013 financial statements are shown in the tables below. |
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| As previously reported | | Reclassifications | | As Reclassified | | | | | | | | | | | | |
| (millions) | | | | | | | | | | | | |
Condensed consolidating statement of operations for the three months ended 31 March 2013 | | | | | | | | | | | | | | | | | |
Willis Group Holdings | | | | | | | | | | | | | | | | | |
Operating loss | $ | (4 | ) | | $ | 3 | | | $ | (1 | ) | | | | | | | | | | | | |
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Net income attributable to Willis Group Holdings | 219 | | | — | | | 219 | | | | | | | | | | | | | |
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The Other Guarantors | | | | | | | | | | | | | | | | | |
Operating loss | $ | (2 | ) | | $ | (4 | ) | | $ | (6 | ) | | | | | | | | | | | | |
Net income (loss) attributable to Willis Group Holdings | 236 | | | (1 | ) | | 235 | | | | | | | | | | | | | |
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The Issuer | | | | | | | | | | | | | | | | | |
Operating loss | $ | (70 | ) | | $ | (1 | ) | | $ | (71 | ) | | | | | | | | | | | | |
Net income attributable to Willis Group Holdings | 36 | | | — | | | 36 | | | | | | | | | | | | | |
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Other | | | | | | | | | | | | | | | | | |
Operating income | $ | 178 | | | $ | 181 | | | $ | 359 | | | | | | | | | | | | | |
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Net income attributable to Willis Group Holdings | 98 | | | 140 | | | 238 | | | | | | | | | | | | | |
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Consolidating adjustments | | | | | | | | | | | | | | | | | |
Operating income (loss) | $ | 185 | | | $ | (185 | ) | | $ | — | | | | | | | | | | | | | |
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Net loss attributable to Willis Group Holdings | (370 | ) | | (139 | ) | | (509 | ) | | | | | | | | | | | | |
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| As previously reported | | Reclassifications | | As Reclassified | | | | | | | | | | | | |
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Condensed consolidating statement of comprehensive income for the three months ended 31 March 2013 | | | | | | | | | | | | | | | | | |
Willis Group Holdings | | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Willis Group Holdings | $ | 183 | | | $ | — | | | $ | 183 | | | | | | | | | | | | | |
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The Other Guarantors | | | | | | | | | | | | | | | | | |
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 200 | | | $ | (1 | ) | | $ | 199 | | | | | | | | | | | | | |
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The Issuer | | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Willis Group Holdings | $ | 38 | | | $ | — | | | $ | 38 | | | | | | | | | | | | | |
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Other | | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Willis Group Holdings | $ | 60 | | | $ | 140 | | | $ | 200 | | | | | | | | | | | | | |
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Consolidating adjustments | | | | | | | | | | | | | | | | | |
Comprehensive loss attributable to Willis Group Holdings | $ | (298 | ) | | $ | (139 | ) | | $ | (437 | ) | | | | | | | | | | | | |
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| As previously reported | | Reclassifications | | As Reclassified | | | | | | | | | | | | |
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Condensed consolidating statement of cash flows for the three months ended 31 March 2013 | | | | | | | | | | | | | | | | | |
Willis Group Holdings | | | | | | | | | | | | | | | | | |
Net cash (used in) provided by operating activities | $ | (25 | ) | | $ | 2 | | | $ | (23 | ) | | | | | | | | | | | | |
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Net cash provided by investing activities | — | | | 51 | | | 51 | | | | | | | | | | | | | |
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Net cash provided by (used in) financing activities | 25 | | | (53 | ) | | (28 | ) | | | | | | | | | | | | |
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The Other Guarantors | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | 27 | | | $ | (171 | ) | | $ | (144 | ) | | | | | | | | | | | | |
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Net cash (used in) provided by investing activities | (1 | ) | | 148 | | | 147 | | | | | | | | | | | | | |
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Net cash (used in) provided by financing activities | (24 | ) | | 23 | | | (1 | ) | | | | | | | | | | | | |
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The Issuer | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | 8 | | | $ | (110 | ) | | $ | (102 | ) | | | | | | | | | | | | |
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Net cash provided by investing activities | 2 | | | 10 | | | 12 | | | | | | | | | | | | | |
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Net cash (used in) provided by financing activities | (10 | ) | | 100 | | | 90 | | | | | | | | | | | | | |
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Other | | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | $ | 29 | | | $ | 279 | | | $ | 308 | | | | | | | | | | | | | |
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Net cash used in investing activities | (22 | ) | | (235 | ) | | (257 | ) | | | | | | | | | | | | |
Net cash provided by (used in) financing activities | 27 | | | (44 | ) | | (17 | ) | | | | | | | | | | | | |
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Consolidating adjustments | | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | |
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Net cash provided by investing activities | — | | | 26 | | | 26 | | | | | | | | | | | | | |
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Net cash used in financing activities | — | | | (26 | ) | | (26 | ) | | | | | | | | | | | | |
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Condensed Consolidating Statement of Operations |
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| Three months ended March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
REVENUES | | | | | | | | | | | |
Commissions and fees | $ | — | | | $ | — | | | $ | 2 | | | $ | 1,088 | | | $ | — | | | $ | 1,090 | |
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Investment income | — | | | — | | | — | | | 4 | | | — | | | 4 | |
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Other income | — | | | — | | | — | | | 3 | | | — | | | 3 | |
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Total revenues | — | | | — | | | 2 | | | 1,095 | | | — | | | 1,097 | |
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EXPENSES | | | | | | | | | | | |
Salaries and benefits | — | | | — | | | (19 | ) | | (551 | ) | | — | | | (570 | ) |
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Other operating expenses | (4 | ) | | (24 | ) | | (17 | ) | | (120 | ) | | — | | | (165 | ) |
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Depreciation expense | — | | | (1 | ) | | (4 | ) | | (18 | ) | | — | | | (23 | ) |
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Amortization of intangible assets | — | | | — | | | — | | | (13 | ) | | — | | | (13 | ) |
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Total expenses | (4 | ) | | (25 | ) | | (40 | ) | | (702 | ) | | — | | | (771 | ) |
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OPERATING (LOSS) INCOME | (4 | ) | | (25 | ) | | (38 | ) | | 393 | | | — | | | 326 | |
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Other income (expense) | — | | | 1 | | | — | | | (1 | ) | | — | | | — | |
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Income from group undertakings | — | | | 59 | | | 43 | | | 27 | | | (129 | ) | | — | |
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Expenses due to group undertakings | — | | | (8 | ) | | (46 | ) | | (75 | ) | | 129 | | | — | |
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Interest expense | (11 | ) | | (9 | ) | | (11 | ) | | (1 | ) | | — | | | (32 | ) |
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(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | 18 | | | (52 | ) | | 343 | | | — | | | 294 | |
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Income taxes | — | | | 5 | | | 19 | | | (87 | ) | | — | | | (63 | ) |
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(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | 23 | | | (33 | ) | | 256 | | | — | | | 231 | |
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Interest in earnings of associates, net of tax | — | | | 3 | | | — | | | 16 | | | — | | | 19 | |
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Equity account for subsidiaries | 261 | | | 230 | | | 83 | | | — | | | (574 | ) | | — | |
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NET INCOME | 246 | | | 256 | | | 50 | | | 272 | | | (574 | ) | | 250 | |
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Less: Net income attributable to noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
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NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 246 | | | $ | 256 | | | $ | 50 | | | $ | 268 | | | $ | (574 | ) | | $ | 246 | |
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Condensed Consolidating Statement of Comprehensive Income |
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| Three months ended March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
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Comprehensive income | $ | 254 | | | $ | 264 | | | $ | 51 | | | $ | 281 | | | $ | (592 | ) | | $ | 258 | |
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Less: comprehensive income attributable to noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
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TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 254 | | | $ | 264 | | | $ | 51 | | | $ | 277 | | | $ | (592 | ) | | $ | 254 | |
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Condensed Consolidating Statement of Operations |
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| Three months ended March 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
REVENUES | | | | | | | | | | | |
Commissions and fees | $ | — | | | $ | — | | | $ | — | | | $ | 1,046 | | | $ | — | | | $ | 1,046 | |
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Investment income | — | | | — | | | — | | | 4 | | | — | | | 4 | |
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Other income | — | | | — | | | — | | | 1 | | | — | | | 1 | |
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Total revenues | — | | | — | | | — | | | 1,051 | | | — | | | 1,051 | |
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EXPENSES | | | | | | | | | | | |
Salaries and benefits | — | | | — | | | (23 | ) | | (545 | ) | | — | | | (568 | ) |
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Other operating expenses | (1 | ) | | (6 | ) | | (44 | ) | | (111 | ) | | — | | | (162 | ) |
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Depreciation expense | — | | | — | | | (4 | ) | | (22 | ) | | — | | | (26 | ) |
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Amortization of intangible assets | — | | | — | | | — | | | (14 | ) | | — | | | (14 | ) |
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Total expenses | (1 | ) | | (6 | ) | | (71 | ) | | (692 | ) | | — | | | (770 | ) |
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OPERATING (LOSS) INCOME | (1 | ) | | (6 | ) | | (71 | ) | | 359 | | | — | | | 281 | |
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Other (expense) income | (3 | ) | | 1 | | | — | | | 8 | | | — | | | 6 | |
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Income from group undertakings | — | | | 44 | | | 82 | | | 21 | | | (147 | ) | | — | |
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Expenses due to group undertakings | — | | | (8 | ) | | (31 | ) | | (108 | ) | | 147 | | | — | |
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Interest expense | (11 | ) | | (2 | ) | | (17 | ) | | (1 | ) | | — | | | (31 | ) |
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(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | 29 | | | (37 | ) | | 279 | | | — | | | 256 | |
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Income taxes | — | | | 2 | | | — | | | (50 | ) | | — | | | (48 | ) |
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(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | 31 | | | (37 | ) | | 229 | | | — | | | 208 | |
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Interest in earnings of associates, net of tax | — | | | 2 | | | — | | | 13 | | | — | | | 15 | |
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Equity account for subsidiaries | 234 | | | 202 | | | 73 | | | — | | | (509 | ) | | — | |
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NET INCOME | 219 | | | 235 | | | 36 | | | 242 | | | (509 | ) | | 223 | |
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Less: Net income attributable to noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
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NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 219 | | | $ | 235 | | | $ | 36 | | | $ | 238 | | | $ | (509 | ) | | $ | 219 | |
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Condensed Consolidating Statement of Comprehensive Income |
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| Three months ended March 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
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Comprehensive income | $ | 183 | | | $ | 199 | | | $ | 38 | | | $ | 203 | | | $ | (437 | ) | | $ | 186 | |
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Less: comprehensive income attributable to noncontrolling interests | — | | | — | | | — | | | (3 | ) | | — | | | (3 | ) |
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TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 183 | | | $ | 199 | | | $ | 38 | | | $ | 200 | | | $ | (437 | ) | | $ | 183 | |
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Condensed Consolidating Balance Sheet |
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| | | | | | | | | | | | | | | | | | | | | | | |
| As of March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
ASSETS | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | |
Cash and cash equivalents | $ | 3 | | | $ | 3 | | | $ | — | | | $ | 728 | | | $ | — | | | $ | 734 | |
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Accounts receivable, net | 1 | | | — | | | 4 | | | 1,180 | | | — | | | 1,185 | |
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Fiduciary assets | — | | | — | | | — | | | 9,306 | | | — | | | 9,306 | |
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Deferred tax assets | — | | | — | | | — | | | 16 | | | — | | | 16 | |
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Other current assets | 1 | | | 25 | | | 28 | | | 183 | | | (33 | ) | | 204 | |
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Amounts due from group undertakings | 3,989 | | | 912 | | | 1,160 | | | 1,456 | | | (7,517 | ) | | — | |
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Total current assets | 3,994 | | | 940 | | | 1,192 | | | 12,869 | | | (7,550 | ) | | 11,445 | |
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NON-CURRENT ASSETS | | | | | | | | | | | |
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Investments in subsidiaries | — | | | 3,090 | | | 1,124 | | | — | | | (4,214 | ) | | — | |
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Fixed assets, net | — | | | 16 | | | 48 | | | 418 | | | — | | | 482 | |
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Goodwill | — | | | — | | | — | | | 2,835 | | | — | | | 2,835 | |
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Other intangible assets, net | — | | | — | | | — | | | 339 | | | — | | | 339 | |
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Investments in associates | — | | | 160 | | | — | | | 36 | | | — | | | 196 | |
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Deferred tax assets | — | | | — | | | — | | | 6 | | | — | | | 6 | |
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Pension benefits asset | — | | | — | | | — | | | 316 | | | — | | | 316 | |
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Other non-current assets | 3 | | | 9 | | | 6 | | | 191 | | | — | | | 209 | |
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Non-current amounts due from group undertakings | — | | | 518 | | | 703 | | | — | | | (1,221 | ) | | — | |
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Total non-current assets | 3 | | | 3,793 | | | 1,881 | | | 4,141 | | | (5,435 | ) | | 4,383 | |
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TOTAL ASSETS | $ | 3,997 | | | $ | 4,733 | | | $ | 3,073 | | | $ | 17,010 | | | $ | (12,985 | ) | | $ | 15,828 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | |
Fiduciary liabilities | $ | — | | | $ | — | | | $ | — | | | $ | 9,306 | | | $ | — | | | $ | 9,306 | |
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Deferred revenue and accrued expenses | 2 | | | — | | | 14 | | | 355 | | | — | | | 371 | |
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Income taxes payable | — | | | — | | | — | | | 86 | | | (33 | ) | | 53 | |
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Short-term debt and current portion of long-term debt | — | | | 15 | | | — | | | — | | | — | | | 15 | |
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Deferred tax liabilities | — | | | — | | | — | | | 36 | | | — | | | 36 | |
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Other current liabilities | 56 | | | 8 | | | 18 | | | 413 | | | — | | | 495 | |
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Amounts due to group undertakings | — | | | 4,768 | | | 1,621 | | | 1,128 | | | (7,517 | ) | | — | |
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Total current liabilities | 58 | | | 4,791 | | | 1,653 | | | 11,324 | | | (7,550 | ) | | 10,276 | |
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NON-CURRENT LIABILITIES | | | | | | | | | | | |
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Investments in subsidiaries | 702 | | | — | | | — | | | — | | | (702 | ) | | — | |
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Long-term debt | 795 | | | 778 | | | 733 | | | 1 | | | — | | | 2,307 | |
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Liabilities for pension benefits | — | | | — | | | — | | | 130 | | | — | | | 130 | |
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Deferred tax liabilities | — | | | 1 | | | — | | | 77 | | | — | | | 78 | |
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Provisions for liabilities | — | | | — | | | 3 | | | 208 | | | — | | | 211 | |
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Other non-current liabilities | — | | | — | | | 41 | | | 313 | | | — | | | 354 | |
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Non-current amounts due to group undertakings | — | | | — | | | 518 | | | 703 | | | (1,221 | ) | | — | |
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Total non-current liabilities | 1,497 | | | 779 | | | 1,295 | | | 1,432 | | | (1,923 | ) | | 3,080 | |
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TOTAL LIABILITIES | $ | 1,555 | | | $ | 5,570 | | | $ | 2,948 | | | $ | 12,756 | | | $ | (9,473 | ) | | $ | 13,356 | |
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Condensed Consolidating Balance Sheet (continued) |
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| As of March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
EQUITY | | | | | | | | | | | |
Total Willis Group Holdings stockholders’ equity | 2,442 | | | (837 | ) | | 125 | | | 4,224 | | | (3,512 | ) | | 2,442 | |
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Noncontrolling interests | — | | | — | | | — | | | 30 | | | — | | | 30 | |
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Total equity | 2,442 | | | (837 | ) | | 125 | | | 4,254 | | | (3,512 | ) | | 2,472 | |
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TOTAL LIABILITIES AND EQUITY | $ | 3,997 | | | $ | 4,733 | | | $ | 3,073 | | | $ | 17,010 | | | $ | (12,985 | ) | | $ | 15,828 | |
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Condensed Consolidating Balance Sheet |
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| As of December 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
ASSETS | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | |
Cash and cash equivalents | $ | 3 | | | $ | 3 | | | $ | — | | | $ | 790 | | | $ | — | | | $ | 796 | |
|
Accounts receivable, net | — | | | — | | | 4 | | | 1,037 | | | — | | | 1,041 | |
|
Fiduciary assets | — | | | — | | | — | | | 8,412 | | | — | | | 8,412 | |
|
Deferred tax assets | — | | | — | | | — | | | 16 | | | (1 | ) | | 15 | |
|
Other current assets | 1 | | | 21 | | | 10 | | | 186 | | | (21 | ) | | 197 | |
|
Amounts due from group undertakings | 4,051 | | | 903 | | | 1,317 | | | 1,484 | | | (7,755 | ) | | — | |
|
Total current assets | 4,055 | | | 927 | | | 1,331 | | | 11,925 | | | (7,777 | ) | | 10,461 | |
|
NON-CURRENT ASSETS | | | | | | | | | | | |
|
Investments in subsidiaries | — | | | 2,838 | | | 1,021 | | | — | | | (3,859 | ) | | — | |
|
Fixed assets, net | — | | | 15 | | | 51 | | | 415 | | | — | | | 481 | |
|
Goodwill | — | | | — | | | — | | | 2,838 | | | — | | | 2,838 | |
|
Other intangible assets, net | — | | | — | | | — | | | 353 | | | — | | | 353 | |
|
Investments in associates | — | | | 156 | | | — | | | 20 | | | — | | | 176 | |
|
Deferred tax assets | — | | | — | | | — | | | 7 | | | — | | | 7 | |
|
Pension benefits asset | — | | | — | | | — | | | 278 | | | — | | | 278 | |
|
Other non-current assets | 4 | | | 9 | | | 5 | | | 188 | | | — | | | 206 | |
|
Non-current amounts due from group undertakings | — | | | 518 | | | 690 | | | — | | | (1,208 | ) | | — | |
|
Total non-current assets | 4 | | | 3,536 | | | 1,767 | | | 4,099 | | | (5,067 | ) | | 4,339 | |
|
TOTAL ASSETS | $ | 4,059 | | | $ | 4,463 | | | $ | 3,098 | | | $ | 16,024 | | | $ | (12,844 | ) | | $ | 14,800 | |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | |
Fiduciary liabilities | $ | — | | | $ | — | | | $ | — | | | $ | 8,412 | | | $ | — | | | $ | 8,412 | |
|
Deferred revenue and accrued expenses | 2 | | | 1 | | | 28 | | | 555 | | | — | | | 586 | |
|
Income taxes payable | — | | | 3 | | | — | | | 39 | | | (21 | ) | | 21 | |
|
Short-term debt and current portion of long-term debt | — | | | 15 | | | — | | | — | | | — | | | 15 | |
|
Deferred tax liabilities | — | | | — | | | — | | | 25 | | | — | | | 25 | |
|
Other current liabilities | 62 | | | 15 | | | 38 | | | 300 | | | — | | | 415 | |
|
Amounts due to Group undertakings | — | | | 4,760 | | | 1,662 | | | 1,333 | | | (7,755 | ) | | — | |
|
Total current liabilities | 64 | | | 4,794 | | | 1,728 | | | 10,664 | | | (7,776 | ) | | 9,474 | |
|
NON-CURRENT LIABILITIES | | | | | | | | | | | |
|
Investments in subsidiaries | 985 | | | — | | | — | | | — | | | (985 | ) | | — | |
|
Long-term debt | 795 | | | 782 | | | 733 | | | 1 | | | — | | | 2,311 | |
|
Liabilities for pension benefits | — | | | — | | | — | | | 136 | | | — | | | 136 | |
|
Deferred tax liabilities | — | | | 1 | | | — | | | 55 | | | — | | | 56 | |
|
Provisions for liabilities | — | | | — | | | — | | | 206 | | | — | | | 206 | |
|
Other non-current liabilities | — | | | — | | | 48 | | | 326 | | | — | | | 374 | |
|
Non-current amounts due to Group undertakings | — | | | — | | | 518 | | | 690 | | | (1,208 | ) | | — | |
|
Total non-current liabilities | 1,780 | | | 783 | | | 1,299 | | | 1,414 | | | (2,193 | ) | | 3,083 | |
|
TOTAL LIABILITIES | $ | 1,844 | | | $ | 5,577 | | | $ | 3,027 | | | $ | 12,078 | | | $ | (9,969 | ) | | $ | 12,557 | |
|
|
Condensed Consolidating Balance Sheet (continued) |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
EQUITY | | | | | | | | | | | |
Total Willis Group Holdings stockholders’ equity | 2,215 | | | (1,114 | ) | | 71 | | | 3,918 | | | (2,875 | ) | | 2,215 | |
|
Noncontrolling interests | — | | | — | | | — | | | 28 | | | — | | | 28 | |
|
Total equity | 2,215 | | | (1,114 | ) | | 71 | | | 3,946 | | | (2,875 | ) | | 2,243 | |
|
TOTAL LIABILITIES AND EQUITY | $ | 4,059 | | | $ | 4,463 | | | $ | 3,098 | | | $ | 16,024 | | | $ | (12,844 | ) | | $ | 14,800 | |
|
Condensed Consolidating Statement of Cash Flows |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (23 | ) | | $ | 25 | | | $ | (21 | ) | | $ | 25 | | | $ | (1 | ) | | $ | 5 | |
|
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | |
Proceeds on disposal of fixed and intangible assets | — | | | — | | | 1 | | | 1 | | | (1 | ) | | 1 | |
|
Additions to fixed assets | — | | | (2 | ) | | (2 | ) | | (19 | ) | | 1 | | | (22 | ) |
|
Additions to intangible assets | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Payments to acquire other investments | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
Proceeds from sales of operations, net of cash disposed | — | | | — | | | — | | | 5 | | | — | | | 5 | |
|
Proceeds from intercompany investing activities | 65 | | | 12 | | | 120 | | | 115 | | | (312 | ) | | — | |
|
Repayments of intercompany investing activities | — | | | — | | | — | | | (16 | ) | | 16 | | | — | |
|
Net cash provided by investing activities | 65 | | | 10 | | | 119 | | | 81 | | | (296 | ) | | (21 | ) |
|
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | |
|
Debt issuance costs | — | | | — | | | — | | | (2 | ) | | — | | | (2 | ) |
|
Repayments of debt | — | | | (4 | ) | | — | | | — | | | — | | | (4 | ) |
|
Repurchase of shares | (35 | ) | | — | | | — | | | — | | | — | | | (35 | ) |
|
Proceeds from issue of shares | 43 | | | — | | | — | | | — | | | — | | | 43 | |
|
Excess tax benefits from share-based payment arrangements | — | | | — | | | — | | | 1 | | | — | | | 1 | |
|
Dividends paid | (50 | ) | | — | | | — | | | (1 | ) | | 1 | | | (50 | ) |
|
Dividends paid to noncontrolling interests | — | | | — | | | — | | | (2 | ) | | — | | | (2 | ) |
|
Proceeds from intercompany financing activities | — | | | 16 | | | — | | | — | | | (16 | ) | | — | |
|
Repayments of intercompany financing activities | — | | | (47 | ) | | (98 | ) | | (167 | ) | | 312 | | | — | |
|
Net cash used in financing activities | (42 | ) | | (35 | ) | | (98 | ) | | (171 | ) | | 297 | | | (49 | ) |
|
DECREASE IN CASH AND CASH EQUIVALENTS | — | | | — | | | — | | | (65 | ) | | — | | | (65 | ) |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | — | | | 3 | | | — | | | 3 | |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 3 | | | 3 | | | — | | | 790 | | | — | | | 796 | |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 3 | | | $ | 3 | | | $ | — | | | $ | 728 | | | $ | — | | | $ | 734 | |
|
|
Condensed Consolidating Statement of Cash Flows |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (23 | ) | | $ | (144 | ) | | $ | (102 | ) | | $ | 308 | | | $ | — | | | $ | 39 | |
|
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | |
Proceeds on disposal of fixed and intangible assets | — | | | — | | | 2 | | | 2 | | | — | | | 4 | |
|
Additions to fixed assets | — | | | (1 | ) | | — | | | (22 | ) | | — | | | (23 | ) |
|
Acquisitions of subsidiaries, net of cash acquired | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Payments to acquire other investments | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Proceeds from intercompany investing activities | 180 | | | 148 | | | 10 | | | — | | | (338 | ) | | — | |
|
Repayments of intercompany investing activities | (129 | ) | | — | | | — | | | (235 | ) | | 364 | | | — | |
|
Net cash provided by (used in) investing activities | 51 | | | 147 | | | 12 | | | (257 | ) | | 26 | | | (21 | ) |
|
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | |
Proceeds from draw down of revolving credit facility | — | | | 55 | | | — | | | — | | | — | | | 55 | |
|
Repayments of debt | — | | | (4 | ) | | — | | | — | | | — | | | (4 | ) |
|
Proceeds from issue of shares | 19 | | | — | | | — | | | — | | | — | | | 19 | |
|
Dividends paid | (47 | ) | | — | | | — | | | — | | | — | | | (47 | ) |
|
Acquisition of noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
Dividends paid to noncontrolling interests | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Proceeds from intercompany financing activities | — | | | 128 | | | 107 | | | 129 | | | (364 | ) | | — | |
|
Repayments of intercompany financing activities | — | | | (180 | ) | | (17 | ) | | (141 | ) | | 338 | | | — | |
|
Net cash (used in) provided by financing activities | (28 | ) | | (1 | ) | | 90 | | | (17 | ) | | (26 | ) | | 18 | |
|
INCREASE IN CASH AND CASH EQUIVALENTS | — | | | 2 | | | — | | | 34 | | | — | | | 36 | |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | — | | | (5 | ) | | — | | | (5 | ) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1 | | | — | | | — | | | 499 | | | — | | | 500 | |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 1 | | | $ | 2 | | | $ | — | | | $ | 528 | | | $ | — | | | $ | 531 | |
|
FINANCIAL INFORMATION FOR ISSUER, PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES |
Trinity Acquisition plc has $525 million senior notes outstanding that were issued on August 15, 2013. |
All direct obligations under the senior notes were jointly and severally, irrevocably and fully and unconditionally guaranteed by Willis Netherlands Holdings B.V, Willis Investment UK Holdings Limited, TA I Limited, Willis Group Limited and Willis North America, Inc, collectively the 'Other Guarantors', and with Willis Group Holdings, the 'Guarantor Companies'. |
The guarantor structure described above differs from the guarantor structure associated with the senior notes issued by the Company and Willis North America (the ‘Willis North America Debt Securities’) in that Trinity Acquisition plc is the issuer and not a subsidiary guarantor, and Willis North America, Inc. is a subsidiary guarantor. |
Presented below is 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. Willis Netherlands B.V, Willis Investment UK Holdings Limited and TA 1 Limited are all direct or indirect parents of the issuer and Willis Group Limited and Willis North America, Inc, are 100 percent direct or indirectly owned subsidiaries or the issuer; | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
(iii) | Trinity Acquisition plc, which is the issuer and is a 100 percent indirectly owned subsidiary of the parent; | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
(iv) | Other, which are the non-guarantor subsidiaries, on a combined basis; | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
(v) | Consolidating adjustments; and | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
(vi) | the Consolidated Company. | | | | | | | | | | | | | | | | | | | | | | |
The equity method has been used for investments in subsidiaries in the condensed consolidating balance sheets as of March 31, 2014 of Willis Group Holdings, the Other Guarantors and the Issuer. |
The entities included in the Other Guarantors column as of March 31, 2014 are Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, Willis North America, TA I Limited and Willis Group Limited. |
|
Restatement to 2013 financial information |
|
Regulation S-X, Article 3, Rule 3-10, allows for the presentation of condensed consolidating financial information. In accordance with these rules, the condensed consolidating financial information should be presented in accordance with US GAAP, except that (i) the guarantor and non-guarantor information is presented on a combined rather than consolidated basis, which requires the elimination of intra-entity activity and (ii) investments in subsidiaries are required to be presented under the equity method of accounting. Subsequent to the issuance of our financial statements for the first quarter 2013, management determined that certain balances were not presented in accordance with the above principles and have therefore restated our condensed consolidating financial information to reflect (i) gross, rather than net, presentation of intercompany balance sheet positions, (ii) dividends received from subsidiaries as reductions to the equity method investment balances as opposed to component of investment income from group undertakings, and (iii) appropriate push down accounting for goodwill. |
|
The impacts of these changes on the previously reported 2013 financial statements are shown in the tables below. |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | Reclassifications | | As Reclassified | | | | | | | | | | | | |
| (millions) | | | | | | | | | | | | |
Condensed consolidating statement of operations for the three months ended 31 March 2013 | | | | | | | | | | | | | | | | | |
Willis Group Holdings | | | | | | | | | | | | | | | | | |
Operating (loss) income | $ | (4 | ) | | $ | 3 | | | $ | (1 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Net income attributable to Willis Group Holdings | 219 | | | — | | | 219 | | | | | | | | | | | | | |
| | | | | | | | | | | |
The Other Guarantors | | | | | | | | | | | | | | | | | |
Operating loss | $ | (72 | ) | | $ | (5 | ) | | $ | (77 | ) | | | | | | | | | | | | |
Net income (loss) attributable to Willis Group Holdings | 236 | | | (1 | ) | | 235 | | | | | | | | | | | | | |
| | | | | | | | | | | |
The Issuer | | | | | | | | | | | | | | | | | |
Operating income | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net income (loss) attributable to Willis Group Holdings | 223 | | | (1 | ) | | 222 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Other | | | | | | | | | | | | | | | | | |
Operating income | $ | 178 | | | $ | 181 | | | $ | 359 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net income attributable to Willis Group Holdings | 98 | | | 140 | | | 238 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consolidating adjustments | | | | | | | | | | | | | | | | | |
Operating income (loss) | $ | 185 | | | $ | (185 | ) | | $ | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net loss attributable to Willis Group Holdings | (557 | ) | | (138 | ) | | (695 | ) | | | | | | | | | | | | |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | Reclassifications | | As Reclassified | | | | | | | | | | | | |
| (millions) | | | | | | | | | | | | |
Condensed consolidating statement of comprehensive income for the three months ended 31 March 2013 | | | | | | | | | | | | | | | | | |
Willis Group Holdings | | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Willis Group Holdings | $ | 183 | | | $ | — | | | $ | 183 | | | | | | | | | | | | | |
| | | | | | | | | | | |
The Other Guarantors | | | | | | | | | | | | | | | | | |
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 200 | | | $ | (1 | ) | | $ | 199 | | | | | | | | | | | | | |
| | | | | | | | | | | |
The Issuer | | | | | | | | | | | | | | | | | |
Comprehensive income (loss) attributable to Willis Group Holdings | $ | 192 | | | $ | (1 | ) | | $ | 191 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Other | | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Willis Group Holdings | $ | 60 | | | $ | 140 | | | $ | 200 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consolidating adjustments | | | | | | | | | | | | | | | | | |
Comprehensive loss attributable to Willis Group Holdings | $ | (452 | ) | | $ | (138 | ) | | $ | (590 | ) | | | | | | | | | | | | |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| As previously reported | | Reclassifications | | As Reclassified | | | | | | | | | | | | |
| (millions) | | | | | | | | | | | | |
Condensed consolidating statement of cash flows for the three months ended 31 March 2013 | | | | | | | | | | | | | | | | | |
Willis Group Holdings | | | | | | | | | | | | | | | | | |
Net cash (used in) provided by operating activities | $ | (25 | ) | | $ | 2 | | | $ | (23 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash provided by investing activities | — | | | 51 | | | 51 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash provided by (used in) financing activities | 25 | | | (53 | ) | | (28 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
The Other Guarantors | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | 587 | | | $ | (120 | ) | | $ | 467 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash provided by (used in) investing activities | 1 | | | (504 | ) | | (503 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash (used in) provided by financing activities | (586 | ) | | 624 | | | 38 | | | | | | | | | | | | | |
| | | | | | | | | | | |
The Issuer | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | 5 | | | $ | (161 | ) | | $ | (156 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash provided by investing activities | — | | | 148 | | | 148 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash (used in) provided by financing activities | (5 | ) | | 13 | | | 8 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Other | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | 29 | | | $ | 279 | | | $ | 308 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash used in investing activities | (22 | ) | | (235 | ) | | (257 | ) | | | | | | | | | | | | |
Net cash provided by (used in) financing activities | 27 | | | (44 | ) | | (17 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Consolidating adjustments | | | | | | | | | | | | | | | | | |
Net cash used in operating activities | $ | (557 | ) | | $ | — | | | $ | (557 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash provided by investing activities | — | | | 540 | | | 540 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net cash provided by (used in) financing activities | 557 | | | (540 | ) | | 17 | | | | | | | | | | | | | |
| | | | | | | | | | | |
|
Condensed Consolidating Statement of Operations |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
REVENUES | | | | | | | | | | | |
Commissions and fees | $ | — | | | $ | 2 | | | $ | — | | | $ | 1,088 | | | $ | — | | | $ | 1,090 | |
|
Investment income | — | | | — | | | — | | | 4 | | | — | | | 4 | |
|
Other income | — | | | — | | | — | | | 3 | | | — | | | 3 | |
|
Total revenues | — | | | 2 | | | — | | | 1,095 | | | — | | | 1,097 | |
|
EXPENSES | | | | | | | | | | | |
Salaries and benefits | — | | | (19 | ) | | — | | | (551 | ) | | — | | | (570 | ) |
|
Other operating expenses | (4 | ) | | (41 | ) | | — | | | (120 | ) | | — | | | (165 | ) |
|
Depreciation expense | — | | | (5 | ) | | — | | | (18 | ) | | — | | | (23 | ) |
|
Amortization of intangible assets | — | | | — | | | — | | | (13 | ) | | — | | | (13 | ) |
|
Total expenses | (4 | ) | | (65 | ) | | — | | | (702 | ) | | — | | | (771 | ) |
|
OPERATING (LOSS) INCOME | (4 | ) | | (63 | ) | | — | | | 393 | | | — | | | 326 | |
|
Other income (expense) | — | | | 1 | | | — | | | (1 | ) | | — | | | — | |
|
Income from group undertakings | — | | | 82 | | | 22 | | | 27 | | | (131 | ) | | — | |
|
Expenses due to group undertakings | — | | | (49 | ) | | (7 | ) | | (75 | ) | | 131 | | | — | |
|
Interest expense | (11 | ) | | (11 | ) | | (9 | ) | | (1 | ) | | — | | | (32 | ) |
|
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | (40 | ) | | 6 | | | 343 | | | — | | | 294 | |
|
Income taxes | — | | | 25 | | | (1 | ) | | (87 | ) | | — | | | (63 | ) |
|
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | (15 | ) | | 5 | | | 256 | | | — | | | 231 | |
|
Interest in earnings of associates, net of tax | — | | | 3 | | | — | | | 16 | | | — | | | 19 | |
|
Equity account for subsidiaries | 261 | | | 268 | | | 215 | | | — | | | (744 | ) | | — | |
|
NET INCOME | 246 | | | 256 | | | 220 | | | 272 | | | (744 | ) | | 250 | |
|
Less: Net income attributable to noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 246 | | | $ | 256 | | | $ | 220 | | | $ | 268 | | | $ | (744 | ) | | $ | 246 | |
|
|
|
Condensed Consolidating Statement of Comprehensive Income |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
| | | | | | | | | | | |
Comprehensive income | $ | 254 | | | $ | 264 | | | $ | 228 | | | $ | 281 | | | $ | (769 | ) | | $ | 258 | |
|
Less: comprehensive income attributable to noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 254 | | | $ | 264 | | | $ | 228 | | | $ | 277 | | | $ | (769 | ) | | $ | 254 | |
|
|
Condensed Consolidating Statement of Operations |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
REVENUES | | | | | | | | | | | |
Commissions and fees | $ | — | | | $ | — | | | $ | — | | | $ | 1,046 | | | $ | — | | | $ | 1,046 | |
|
Investment income | — | | | — | | | — | | | 4 | | | — | | | 4 | |
|
Other income | — | | | — | | | — | | | 1 | | | — | | | 1 | |
|
Total revenues | — | | | — | | | — | | | 1,051 | | | — | | | 1,051 | |
|
EXPENSES | | | | | | | | | | | |
Salaries and benefits | — | | | (23 | ) | | — | | | (545 | ) | | — | | | (568 | ) |
|
Other operating expenses | (1 | ) | | (50 | ) | | — | | | (111 | ) | | — | | | (162 | ) |
|
Depreciation expense | — | | | (4 | ) | | — | | | (22 | ) | | — | | | (26 | ) |
|
Amortization of intangible assets | — | | | — | | | — | | | (14 | ) | | — | | | (14 | ) |
|
Total expenses | (1 | ) | | (77 | ) | | — | | | (692 | ) | | — | | | (770 | ) |
|
OPERATING (LOSS) INCOME | (1 | ) | | (77 | ) | | — | | | 359 | | | — | | | 281 | |
|
Other (expense) income | (3 | ) | | 1 | | | — | | | 8 | | | — | | | 6 | |
|
Income from group undertakings | — | | | 114 | | | 13 | | | 21 | | | (148 | ) | | — | |
|
Expenses due to group undertakings | — | | | (34 | ) | | (6 | ) | | (108 | ) | | 148 | | | — | |
|
Interest expense | (11 | ) | | (17 | ) | | (2 | ) | | (1 | ) | | — | | | (31 | ) |
|
(LOSS) INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | (13 | ) | | 5 | | | 279 | | | — | | | 256 | |
|
Income taxes | — | | | 2 | | | — | | | (50 | ) | | — | | | (48 | ) |
|
(LOSS) INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES | (15 | ) | | (11 | ) | | 5 | | | 229 | | | — | | | 208 | |
|
Interest in earnings of associates, net of tax | — | | | 2 | | | — | | | 13 | | | — | | | 15 | |
|
Equity account for subsidiaries | 234 | | | 244 | | | 217 | | | — | | | (695 | ) | | — | |
|
NET INCOME | 219 | | | 235 | | | 222 | | | 242 | | | (695 | ) | | 223 | |
|
Less: Net income attributable to noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 219 | | | $ | 235 | | | $ | 222 | | | $ | 238 | | | $ | (695 | ) | | $ | 219 | |
|
Condensed Consolidating Statement of Comprehensive Income |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
| | | | | | | | | | | |
Comprehensive income | $ | 183 | | | $ | 199 | | | $ | 191 | | | $ | 203 | | | $ | (590 | ) | | $ | 186 | |
|
Less: comprehensive income attributable to noncontrolling interests | — | | | — | | | — | | | (3 | ) | | — | | | (3 | ) |
|
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS | $ | 183 | | | $ | 199 | | | $ | 191 | | | $ | 200 | | | $ | (590 | ) | | $ | 183 | |
|
|
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|
|
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|
|
|
|
|
|
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|
Condensed Consolidating Balance Sheet |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| As of March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
ASSETS | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | |
Cash and cash equivalents | $ | 3 | | | $ | 3 | | | $ | — | | | $ | 728 | | | $ | — | | | $ | 734 | |
|
Accounts receivable, net | 1 | | | 4 | | | — | | | 1,180 | | | — | | | 1,185 | |
|
Fiduciary assets | — | | | — | | | — | | | 9,306 | | | — | | | 9,306 | |
|
Deferred tax assets | — | | | — | | | — | | | 16 | | | — | | | 16 | |
|
Other current assets | 1 | | | 59 | | | 1 | | | 183 | | | (40 | ) | | 204 | |
|
Amounts due from group undertakings | 3,989 | | | 813 | | | 803 | | | 1,456 | | | (7,061 | ) | | — | |
|
Total current assets | 3,994 | | | 879 | | | 804 | | | 12,869 | | | (7,101 | ) | | 11,445 | |
|
NON-CURRENT ASSETS | | | | | | | | | | | |
Investments in subsidiaries | — | | | 4,024 | | | 2,940 | | | — | | | (6,964 | ) | | — | |
|
Fixed assets, net | — | | | 64 | | | — | | | 418 | | | — | | | 482 | |
|
Goodwill | — | | | — | | | — | | | 2,835 | | | — | | | 2,835 | |
|
Other intangible assets, net | — | | | — | | | — | | | 339 | | | — | | | 339 | |
|
Investments in associates | — | | | 160 | | | — | | | 36 | | | — | | | 196 | |
|
Deferred tax assets | — | | | — | | | — | | | 6 | | | — | | | 6 | |
|
Pension benefits asset | — | | | — | | | — | | | 316 | | | — | | | 316 | |
|
Other non-current assets | 3 | | | 6 | | | 9 | | | 191 | | | — | | | 209 | |
|
Non-current amounts due from group undertakings | — | | | 1,132 | | | 518 | | | — | | | (1,650 | ) | | — | |
|
Total non-current assets | 3 | | | 5,386 | | | 3,467 | | | 4,141 | | | (8,614 | ) | | 4,383 | |
|
TOTAL ASSETS | $ | 3,997 | | | $ | 6,265 | | | $ | 4,271 | | | $ | 17,010 | | | $ | (15,715 | ) | | $ | 15,828 | |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | |
Fiduciary liabilities | $ | — | | | $ | — | | | $ | — | | | $ | 9,306 | | | $ | — | | | $ | 9,306 | |
|
Deferred revenue and accrued expenses | 2 | | | 14 | | | — | | | 355 | | | — | | | 371 | |
|
Income taxes payable | — | | | — | | | 7 | | | 86 | | | (40 | ) | | 53 | |
|
Short-term debt and current portion of long-term debt | — | | | — | | | 15 | | | — | | | — | | | 15 | |
|
Deferred tax liabilities | — | | | — | | | — | | | 36 | | | — | | | 36 | |
|
Other current liabilities | 56 | | | 23 | | | 3 | | | 413 | | | — | | | 495 | |
|
Amounts due to group undertakings | — | | | 5,768 | | | 165 | | | 1,128 | | | (7,061 | ) | | — | |
|
Total current liabilities | 58 | | | 5,805 | | | 190 | | | 11,324 | | | (7,101 | ) | | 10,276 | |
|
NON-CURRENT LIABILITIES | | | | | | | | | | | |
Investments in subsidiaries | 702 | | | — | | | — | | | — | | | (702 | ) | | — | |
|
Long-term debt | 795 | | | 733 | | | 778 | | | 1 | | | — | | | 2,307 | |
|
Liabilities for pension benefits | — | | | — | | | — | | | 130 | | | — | | | 130 | |
|
Deferred tax liabilities | — | | | 1 | | | — | | | 77 | | | — | | | 78 | |
|
Provisions for liabilities | — | | | 3 | | | — | | | 208 | | | — | | | 211 | |
|
Other non-current liabilities | — | | | 41 | | | — | | | 313 | | | — | | | 354 | |
|
Non-current amounts due to group undertakings | — | | | 519 | | | 428 | | | 703 | | | (1,650 | ) | | — | |
|
Total non-current liabilities | 1,497 | | | 1,297 | | | 1,206 | | | 1,432 | | | (2,352 | ) | | 3,080 | |
|
TOTAL LIABILITIES | $ | 1,555 | | | $ | 7,102 | | | $ | 1,396 | | | $ | 12,756 | | | $ | (9,453 | ) | | $ | 13,356 | |
|
|
Condensed Consolidating Balance Sheet (continued) |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| As of March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
EQUITY | | | | | | | | | | | |
Total Willis Group Holdings stockholders’ equity | 2,442 | | | (837 | ) | | 2,875 | | | 4,224 | | | (6,262 | ) | | 2,442 | |
|
Noncontrolling interests | — | | | — | | | — | | | 30 | | | — | | | 30 | |
|
Total equity | 2,442 | | | (837 | ) | | 2,875 | | | 4,254 | | | (6,262 | ) | | 2,472 | |
|
TOTAL LIABILITIES AND EQUITY | $ | 3,997 | | | $ | 6,265 | | | $ | 4,271 | | | $ | 17,010 | | | $ | (15,715 | ) | | $ | 15,828 | |
|
|
Condensed Consolidating Balance Sheet |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
ASSETS | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | |
Cash and cash equivalents | $ | 3 | | | $ | 3 | | | $ | — | | | $ | 790 | | | $ | — | | | $ | 796 | |
|
Accounts receivable, net | — | | | 4 | | | — | | | 1,037 | | | — | | | 1,041 | |
|
Fiduciary assets | — | | | — | | | — | | | 8,412 | | | — | | | 8,412 | |
|
Deferred tax assets | — | | | — | | | — | | | 16 | | | (1 | ) | | 15 | |
|
Other current assets | 1 | | | 36 | | | 1 | | | 186 | | | (27 | ) | | 197 | |
|
Amounts due from group undertakings | 4,051 | | | 975 | | | 793 | | | 1,484 | | | (7,303 | ) | | — | |
|
Total current assets | 4,055 | | | 1,018 | | | 794 | | | 11,925 | | | (7,331 | ) | | 10,461 | |
|
NON-CURRENT ASSETS | | | | | | | | | | | |
Investments in subsidiaries | — | | | 3,716 | | | 2,705 | | | — | | | (6,421 | ) | | — | |
|
Fixed assets, net | — | | | 66 | | | — | | | 415 | | | — | | | 481 | |
|
Goodwill | — | | | — | | | — | | | 2,838 | | | — | | | 2,838 | |
|
Other intangible assets, net | — | | | — | | | — | | | 353 | | | — | | | 353 | |
|
Investments in associates | — | | | 156 | | | — | | | 20 | | | — | | | 176 | |
|
Deferred tax assets | — | | | — | | | — | | | 7 | | | — | | | 7 | |
|
Pension benefits asset | — | | | — | | | — | | | 278 | | | — | | | 278 | |
|
Other non-current assets | 4 | | | 5 | | | 9 | | | 188 | | | — | | | 206 | |
|
Non-current amounts due from group undertakings | — | | | 1,113 | | | 518 | | | — | | | (1,631 | ) | | — | |
|
Total non-current assets | 4 | | | 5,056 | | | 3,232 | | | 4,099 | | | (8,052 | ) | | 4,339 | |
|
TOTAL ASSETS | $ | 4,059 | | | $ | 6,074 | | | $ | 4,026 | | | $ | 16,024 | | | $ | (15,383 | ) | | $ | 14,800 | |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | |
Fiduciary liabilities | $ | — | | | $ | — | | | $ | — | | | $ | 8,412 | | | $ | — | | | $ | 8,412 | |
|
Deferred revenue and accrued expenses | 2 | | | 29 | | | — | | | 555 | | | — | | | 586 | |
|
Income taxes payable | — | | | 4 | | | 5 | | | 39 | | | (27 | ) | | 21 | |
|
Short-term debt and current portion of long-term debt | — | | | — | | | 15 | | | — | | | — | | | 15 | |
|
Deferred tax liabilities | — | | | — | | | — | | | 25 | | | — | | | 25 | |
|
Other current liabilities | 62 | | | 42 | | | 11 | | | 300 | | | — | | | 415 | |
|
Amounts due to group undertakings | — | | | 5,813 | | | 157 | | | 1,333 | | | (7,303 | ) | | — | |
|
Total current liabilities | 64 | | | 5,888 | | | 188 | | | 10,664 | | | (7,330 | ) | | 9,474 | |
|
NON-CURRENT LIABILITIES | | | | | | | | | | | |
Investments in subsidiaries | 985 | | | — | | | — | | | — | | | (985 | ) | | — | |
|
Long-term debt | 795 | | | 733 | | | 782 | | | 1 | | | — | | | 2,311 | |
|
Liabilities for pension benefits | — | | | — | | | — | | | 136 | | | — | | | 136 | |
|
Deferred tax liabilities | — | | | 1 | | | — | | | 55 | | | — | | | 56 | |
|
Provisions for liabilities | — | | | — | | | — | | | 206 | | | — | | | 206 | |
|
Other non-current liabilities | — | | | 48 | | | — | | | 326 | | | — | | | 374 | |
|
Non-current amounts due to group undertakings | — | | | 518 | | | 423 | | | 690 | | | (1,631 | ) | | — | |
|
Total non-current liabilities | 1,780 | | | 1,300 | | | 1,205 | | | 1,414 | | | (2,616 | ) | | 3,083 | |
|
TOTAL LIABILITIES | $ | 1,844 | | | $ | 7,188 | | | $ | 1,393 | | | $ | 12,078 | | | $ | (9,946 | ) | | $ | 12,557 | |
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
EQUITY | | | | | | | | | | | |
Total Willis Group Holdings stockholders’ equity | 2,215 | | | (1,114 | ) | | 2,633 | | | 3,918 | | | (5,437 | ) | | 2,215 | |
|
Noncontrolling interests | — | | | — | | | — | | | 28 | | | — | | | 28 | |
|
Total equity | 2,215 | | | (1,114 | ) | | 2,633 | | | 3,946 | | | (5,437 | ) | | 2,243 | |
|
TOTAL LIABILITIES AND EQUITY | $ | 4,059 | | | $ | 6,074 | | | $ | 4,026 | | | $ | 16,024 | | | $ | (15,383 | ) | | $ | 14,800 | |
|
|
Condensed Consolidating Statement of Cash Flows |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2014 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (23 | ) | | $ | 28 | | | $ | (24 | ) | | $ | 25 | | | $ | (1 | ) | | $ | 5 | |
|
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | |
Proceeds on disposal of fixed and intangible assets | — | | | 1 | | | — | | | 1 | | | (1 | ) | | 1 | |
|
Additions to fixed assets | — | | | (4 | ) | | — | | | (19 | ) | | 1 | | | (22 | ) |
|
Additions to intangible assets | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Payments to acquire other investments | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
Proceeds from disposal of operations, net of cash disposed | — | | | — | | | — | | | 5 | | | — | | | 5 | |
|
Proceeds from intercompany investing activities | 65 | | | 120 | | | 12 | | | 115 | | | (312 | ) | | — | |
|
Repayments of intercompany investing activities | — | | | — | | | — | | | (16 | ) | | 16 | | | — | |
|
Net cash provided by investing activities | 65 | | | 117 | | | 12 | | | 81 | | | (296 | ) | | (21 | ) |
|
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | |
Debt issuance costs | — | | | — | | | — | | | (2 | ) | | — | | | (2 | ) |
|
Repayments of debt | — | | | — | | | (4 | ) | | — | | | — | | | (4 | ) |
|
Repurchase of shares | (35 | ) | | — | | | — | | | — | | | — | | | (35 | ) |
|
Proceeds from issue of shares | 43 | | | — | | | — | | | — | | | — | | | 43 | |
|
Excess tax benefits from share-based payment arrangements | — | | | — | | | — | | | 1 | | | — | | | 1 | |
|
Dividends paid | (50 | ) | | — | | | — | | | (1 | ) | | 1 | | | (50 | ) |
|
Dividends paid to noncontrolling interests | — | | | — | | | — | | | (2 | ) | | — | | | (2 | ) |
|
Proceeds from intercompany financing activities | — | | | — | | | 16 | | | — | | | (16 | ) | | — | |
|
Repayments of intercompany financing activities | — | | | (145 | ) | | — | | | (167 | ) | | 312 | | | — | |
|
Net cash (used in) provided by financing activities | (42 | ) | | (145 | ) | | 12 | | | (171 | ) | | 297 | | | (49 | ) |
|
DECREASE IN CASH AND CASH EQUIVALENTS | — | | | — | | | — | | | (65 | ) | | — | | | (65 | ) |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | — | | | 3 | | | — | | | 3 | |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 3 | | | 3 | | | — | | | 790 | | | — | | | 796 | |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 3 | | | $ | 3 | | | $ | — | | | $ | 728 | | | $ | — | | | $ | 734 | |
|
|
Condensed Consolidating Statement of Cash Flows |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended March 31, 2013 |
| Willis | | The Other | | The Issuer | | Other | | Consolidating | | Consolidated |
Group | Guarantors | adjustments |
Holdings | | |
| (millions) |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (23 | ) | | $ | 467 | | | $ | (156 | ) | | $ | 308 | | | $ | (557 | ) | | $ | 39 | |
|
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | |
Proceeds on disposal of fixed and intangible assets | — | | | 2 | | | — | | | 2 | | | — | | | 4 | |
|
Additions to fixed assets | — | | | (1 | ) | | — | | | (22 | ) | | — | | | (23 | ) |
|
Acquisitions of subsidiaries, net of cash acquired | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Payments to acquire other investments | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Proceeds from intercompany investing activities | 180 | | | 53 | | | 148 | | | — | | | (381 | ) | | — | |
|
Repayments of intercompany investing activities | (129 | ) | | (557 | ) | | — | | | (235 | ) | | 921 | | | — | |
|
Net cash provided by (used in) investing activities | 51 | | | (503 | ) | | 148 | | | (257 | ) | | 540 | | | (21 | ) |
|
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | |
Proceeds from draw down of revolving credit facility | — | | | — | | | 55 | | | — | | | — | | | 55 | |
|
Repayments of debt | — | | | — | | | (4 | ) | | — | | | — | | | (4 | ) |
|
Proceeds from issue of shares | 19 | | | — | | | — | | | — | | | — | | | 19 | |
|
Dividends paid | (47 | ) | | — | | | (557 | ) | | — | | | 557 | | | (47 | ) |
|
Acquisition of noncontrolling interests | — | | | — | | | — | | | (4 | ) | | — | | | (4 | ) |
|
Dividends paid to noncontrolling interests | — | | | — | | | — | | | (1 | ) | | — | | | (1 | ) |
|
Proceeds from intercompany financing activities | — | | | 235 | | | 557 | | | 129 | | | (921 | ) | | — | |
|
Repayments of intercompany financing activities | — | | | (197 | ) | | (43 | ) | | (141 | ) | | 381 | | | — | |
|
Net cash (used in) provided by financing activities | (28 | ) | | 38 | | | 8 | | | (17 | ) | | 17 | | | 18 | |
|
INCREASE IN CASH AND CASH EQUIVALENTS | — | | | 2 | | | — | | | 34 | | | — | | | 36 | |
|
Effect of exchange rate changes on cash and cash equivalents | — | | | — | | | — | | | (5 | ) | | — | | | (5 | ) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1 | | | — | | | — | | | 499 | | | — | | | 500 | |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 1 | | | $ | 2 | | | $ | — | | | $ | 528 | | | $ | — | | | $ | 531 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |