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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Quarter ended June 30, 2001
--------------------
WILLIS GROUP LIMITED
(Translation of registrant's name into English)
Ten Trinity Square, London EC3P 3AX
(Address of principal executive offices)
--------------------
(Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F |X| Form 40-F |_|
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes |_| No |X|
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- .)
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WILLIS GROUP LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions of pounds sterling)
(unaudited)
Three months Six months
ended June 30, ended June 30,
--------------- ---------------
2001 2000 2001 2000
------ ------ ------ ------
Operating revenues
Commissions and fees ........................................................................ 224.6 192.8 470.9 402.7
Interest and investment income .............................................................. 12.8 11.2 23.7 20.0
------ ------ ------ ------
237.4 204.0 494.6 422.7
Operating expenses .......................................................................... (190.5) (179.1) (383.1) (357.5)
------ ------ ------ ------
Operating income 46.9 24.9 111.5 65.2
Loss on disposal/closure of operations ...................................................... -- -- (7.7) --
Share of profit/(loss) of associates ........................................................ (0.6) (0.2) 9.6 9.5
Interest income (Note 2) .................................................................... 16.9 14.3 31.0 28.4
Interest expense ............................................................................ (15.1) (14.1) (29.0) (27.7)
------ ------ ------ ------
Income before taxation ...................................................................... 48.1 24.9 115.4 75.4
Taxation .................................................................................... (13.9) (8.0) (40.8) (23.7)
------ ------ ------ ------
Income after taxation ....................................................................... 34.2 16.9 74.6 51.7
Equity minority interests ................................................................... (0.8) -- (1.7) 0.1
------ ------ ------ ------
Net income (i) .............................................................................. 33.4 16.9 72.9 51.8
====== ====== ====== ======
Net income per Ordinary Share (i) ........................................................... 7.0p 3.5p 15.2p 10.9p
====== ====== ====== ======
Average number of ordinary shares outstanding (in millions) ................................. 479.3 476.1 479.3 476.1
====== ====== ====== ======
- ---------------
(i) A summary of the significant adjustments to net income that would be
required if United States generally accepted accounting principles were to
be applied instead of those generally accepted in the United Kingdom is
set forth in Note 6 of Notes to Condensed Financial Statements.
CONSOLIDATED STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES
(in millions of pounds sterling)
(unaudited)
Three months Six months
ended June ended June
30, 30,
------------ -------------
2001 2000 2001 2000
---- ----- ----- -----
Net income ....................................................................................... 33.4 16.9 72.9 51.8
Currency translation differences ................................................................. (1.2) (21.8) (33.9) (32.6)
---- ----- ----- -----
Total recognized gains and losses (ii) ........................................................... 32.2 (4.9) 39.0 19.2
==== ===== ===== =====
- ---------------
(ii)A statement of Comprehensive Income under U.S. GAAP is set forth in Note 6
of Notes to Condensed Financial Statements.
The Notes to Condensed Financial Statements are an integral part of these
Condensed Consolidated Financial Statements.
2
WILLIS GROUP LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions of pounds sterling)
(unaudited)
June 30, December 31,
2001 2000(i)
-------- ------------
ASSETS
Current assets
Cash and short-term deposits ....................... 501.0 427.1
Investments ........................................ 428.0 318.4
Accounts receivable, net ........................... 5,390.3 4,511.8
------- -------
6,319.3 5,257.3
------- -------
Fixed assets
Intangible assets - goodwill, net .................. 38.6 35.2
Tangible assets, net ............................... 125.5 128.0
Investments ........................................ 48.1 44.7
------- -------
212.2 207.9
------- -------
Total assets ........................................ 6,531.5 5,465.2
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable ................................... 4,649.0 3,655.8
Corporate tax payable .............................. 67.6 41.6
Accruals and deferred income ....................... 79.2 86.3
Bank loans and overdrafts .......................... 9.8 8.7
Other current liabilities .......................... 817.2 799.3
------- -------
5,622.8 4,591.7
------- -------
Noncurrent liabilities
Bank loans ......................................... 271.1 271.7
9% Senior Subordinated Notes due 2009 .............. 365.7 362.6
Other noncurrent liabilities ....................... 36.9 35.9
------- -------
673.7 670.2
------- -------
Provisions for liabilities and charges (Note 5) ..... 97.6 105.1
Equity minority interests ........................... 13.5 12.8
------- -------
Total liabilities and minority interests ............ 6,407.6 5,379.8
Shareholders' equity(ii)
Share capital ...................................... 59.9 59.9
Share premium ...................................... 124.0 124.0
Revaluation reserve ................................ 14.9 14.9
Retained deficit ................................... (74.9) (113.4)
------- -------
123.9 85.4
------- -------
Total liabilities and shareholders' equity .......... 6,531.5 5,465.2
======= =======
- ---------------
(i) The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
(ii)A summary of the significant adjustments to shareholders' equity that
would be required if United States generally accepted accounting
principles were to be applied instead of those generally accepted in the
United Kingdom is set forth in Note 6 of Notes to Condensed Financial
Statements.
The Notes to Condensed Financial Statements are an integral part of these
Condensed Consolidated Financial Statements.
3
WILLIS GROUP LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions of pounds sterling)
(unaudited)
Six months
ended June 30,
--------------
2001 2000
------ -----
Net cash inflow from operating activities .................... 257.8 130.0
Dividends from associates .................................... 2.3 2.7
Returns on investments and servicing of finance
Interest received ........................................... 32.3 28.4
Interest paid ............................................... (28.7) (26.7)
Bank fees on borrowings ..................................... (0.3) (0.3)
Minority dividends paid ..................................... (0.9) (0.4)
------ -----
2.4 1.0
------ -----
Taxation ..................................................... (12.5) (6.8)
Capital expenditure and financial investment
Purchase of tangible fixed assets ........................... (8.9) (8.3)
Sale of tangible fixed assets ............................... 1.3 1.2
Purchase of fixed asset investments ......................... -- (0.2)
Sale of fixed asset investments ............................. 0.1 --
------ -----
(7.5) (7.3)
------ -----
Acquisitions and disposals
Purchase of subsidiaries .................................... (3.0) (4.5)
Sale of subsidiaries ........................................ 0.9 --
Proceeds from sale of operations ............................ 2.4 --
Net cash transferred on purchase/sale of subsidiaries ....... 1.1 (0.2)
------ -----
1.4 (4.7)
------ -----
Equity dividends paid ........................................ (15.1) (13.1)
------ -----
Cash flow before management of liquid resources and financing 228.8 101.8
Management of liquid resources ............................... (115.8) (23.7)
Financing
Amounts due to/from parent company .......................... (31.4) (29.7)
Debt due beyond a year:
Decrease in long-term borrowings........................... (34.0) --
------ -----
(65.4) (29.7)
------ -----
Increase in cash ............................................. 47.6 48.4
====== =====
- ---------------
The significant differences between the consolidated statement of cash flows
presented above and that required under U.S. GAAP are described in Note 6 of
Notes to Condensed Financial Statements.
The Notes to Condensed Financial Statements are an integral part of these
Condensed Consolidated Financial Statements.
4
WILLIS GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in millions of pounds sterling)
(unaudited)
Note 1 - Basis of preparation
These condensed consolidated financial statements, which are unaudited, have
been prepared in accordance with U.K. GAAP and the accounting policies
described in the Company's audited consolidated financial statements for the
year ended December 31, 2000. In the opinion of the Company's management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six months
ended June 30, 2001 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2001.
The company prepares its financial statements in pounds sterling. The
following U.S. dollar exchange rates have been used in preparing these
financial statements:
2001 2000
----- -----
Average rate: six months ended June 30 ....................... $1.44 $1.57
Closing rate: June 30 ........................................ $1.42 $1.52
December 31 .................................... -- $1.50
Note 2 - Interest income
Substantially all the Group's external borrowings have been advanced to the
Company's indirect parent company, Trinity Acquisition Limited. Interest
receivable on the amounts advanced has been disclosed separately from interest
receivable on other funds, which is included in operating revenues.
Note 3 - Reconciliation of operating income to net cash inflow from operating
activities
Six months
ended June 30,
---------------
2001 2000
------ ------
Operating income ............................................ 111.5 65.2
Depreciation and amortization ............................... 13.3 13.5
Increase in receivables ..................................... (790.1) (699.2)
Increase in payables ........................................ 932.8 765.7
Net movement on provisions .................................. (9.7) (15.2)
------ ------
Net cash inflow from operating activities ................... 257.8 130.0
====== ======
Reconciliation of net cash flow to movement in net funds
Six months
ended June
30,
-------------
2001 2000
----- -----
Net funds at beginning of period .............................. 672.4 590.1
Net cash flow ................................................. 47.6 48.4
Management of liquid resources ................................ 115.8 23.7
Financing ..................................................... 65.4 29.7
Non-cash movements ............................................ -- (35.8)
Currency exchange movements ................................... (16.9) (8.9)
----- -----
Net funds at end of period .................................... 884.3 647.2
===== =====
5
WILLIS GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
(in millions of pounds sterling)
(unaudited)
Note 4 - Reconciliation of movements in shareholders' equity
Six months
ended June
30,
-------------
2001 2000
----- -----
Net income .................................................... 72.9 51.8
Dividends ..................................................... (8.2) (42.6)
Goodwill written back on disposals ............................ 7.7 0.3
Exchange adjustments .......................................... (33.9) (32.6)
----- -----
Net increase/(decrease) in shareholders' equity ............... 38.5 (23.1)
Shareholders' equity at beginning of period ................... 85.4 101.8
----- -----
Shareholders' equity at end of period ......................... 123.9 78.7
===== =====
Note 5 - Provisions for liabilities and charges
In common with many companies involved in selling personal pension plans in
the U.K., the Company's financial advisory business, Willis Corroon Financial
Planning Limited ("WCFP"), is required by the Financial Services Authority and
the Personal Investment Authority ("the Regulator"), which regulates these
matters, to review certain categories of personal pension plans sold to
individuals between 1988 and 1994. WCFP is required to compensate those
individuals who transferred from, opted out or did not join, their employer-
sponsored pension plan if the expected benefits from their personal pension
plan did not equal the benefits that would have been available from their
employer-sponsored pension plan. Whether compensation is due to a particular
individual, and the amount thereof, is dependent upon the subsequent
performance of the personal pension plan sold and the net present value of the
benefits that would have been available from the employer-sponsored pension
plan calculated using financial and demographic assumptions prescribed by the
Regulator. The Regulator currently requires all offers of compensation to be
made by June 30, 2002.
At December 31, 2000, the Company held provisions of (L)34.0 million
relating to this issue. During the second quarter and six months ended June
30, 2001, the Company used (L)3.5 million and (L)6.6 million, respectively, of
this provision in settling claims and other related costs and the remaining
balance at June 30, 2001 was (L)27.4 million. Although the Company considers
the established provisions to be prudent and expects to pay out these
provisions over the next two years, there remains some uncertainty as to the
ultimate exposure relating to the review. This exposure is subject to a number
of variable factors including, among others, the effect of future changes in
prescribed UK interest rates and in financial and other assumptions which are
issued by the Regulator on a quarterly basis.
At December 31, 2000, the Company held provisions of (L)20.8 million for
discontinued operations that include estimates for future costs of administering
the run-off of the Company's former U.K. underwriting operations. Willis Faber
(Underwriting Management) Limited ("WFUM"), a wholly- owned subsidiary of the
Company, provided underwriting agency and other services to certain insurance
companies including Sovereign Marine & General Insurance Company Limited
("Sovereign") (in Scheme of Arrangement) (collectively, the "stamp companies")
and in 1991 ceased arranging new business on behalf of the stamp companies.
Willis Faber Limited has agreed with certain of the stamp companies to fund
certain costs of the run-off, subject to agreed guidelines as to timing and
amount. Although the Company expects the run-off to be conducted in an orderly
manner, it may ultimately prove to be a lengthy and expensive process. The
amounts to be funded under the run-off arrangements are currently within the
aggregate of the provisions made. During the second quarter and six months ended
June 30, 2001, the Company used (L)1.2 million and (L)1.2 million, respectively,
of these provisions and the remaining balance at June 30, 2001 was
(L)19.6 million.
6
WILLIS GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
(in millions of pounds sterling)
(unaudited)
Note 5 - Provisions for liabilities and charges (continued)
The Company has extensive operations and is subject to claims and litigation
in the ordinary course of business resulting principally from alleged errors
and omissions in connection with its businesses. At December 31, 2000, the
Company held provisions of (L)34.9 million, representing management's
assessment of liabilities that may arise from asserted and unasserted claims
for errors and omissions. During the second quarter and six months ended June
30, 2001, the Company charged (L)2.9 million and (L)4.8 million, respectively,
to operations and used (L)2.1 million and (L)5.0 million, respectively, in
settling claims and, allowing for foreign exchange adjustments, the balance
remaining at June 30, 2001 was (L)36.0 million. Most of the errors and
omissions claims are covered by professional indemnity insurance. In respect
of self-insured deductibles applicable to those claims, the Company has
established provisions which are believed to be adequate in the light of
current information and legal advice. These provisions may be adjusted from
time to time according to developments. The Company does not expect the
outcome of those claims, either individually or in the aggregate, to have a
material effect on the Company's financial condition, results of operations or
liquidity.
Note 6 - Differences between accounting principles generally accepted in the
United Kingdom and the United States
The unaudited condensed consolidated financial statements are prepared in
accordance with U.K. GAAP which differ in certain respects from U.S. GAAP.
Summaries of the significant differences as they apply to the Company are set
forth in Note 31 of Notes to the Company's Consolidated Financial Statements
for the year ended December 31, 2000.
The effect on net income, comprehensive income and shareholders' equity of
applying the significant differences between U.K. GAAP and U.S. GAAP described
above is summarized as follows:
Net income
Three
months Six months
ended June ended June
30, 30,
----------- -------------
2001 2000 2001 2000
---- ---- ----- -----
Net income as reported in the consolidated statement of income .................................... 33.4 16.9 72.9 51.8
Adjustments
Operating expenses - restructuring costs .......................................................... -- (0.7) -- (0.9)
Goodwill .......................................................................................... (5.6) (5.4) (11.1) (10.2)
Loss on disposal/closure of operations ............................................................ -- -- 7.7 --
Gain/(loss) on derivative instruments ............................................................. (1.6) (4.4) 0.9 (4.2)
Pension costs ..................................................................................... 3.5 3.8 3.9 8.2
Interest on tax refund relating to prior acquisition .............................................. (1.6) -- (1.6) --
Taxation .......................................................................................... (0.2) 0.4 (2.4) (1.1)
---- ---- ----- -----
Net income as adjusted to accord with U.S. GAAP ................................................... 27.9 10.6 70.3 43.6
==== ==== ===== =====
7
WILLIS GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
(in millions of pounds sterling)
(unaudited)
Note 6 - Differences between accounting principles generally accepted in the
United Kingdom and the United States (continued)
Comprehensive income
Three
months Six months
ended June ended June
30, 30,
----------- -----------
2001 2000 2001 2000
---- ---- ---- ----
Net income as adjusted to accord with U.S. GAAP ..................................................... 27.9 10.6 70.3 43.6
Other comprehensive income:
Foreign currency translation adjustments ........................................................... (3.2) 13.1 10.5 18.1
Cumulative effect of accounting change ............................................................. -- -- 5.2 --
Net loss on derivative instruments ................................................................. 0.5 -- (2.4) --
Unrealized holding gains ............................................................................ (0.3) 0.5 -- 0.5
---- ---- ---- ----
Comprehensive income ................................................................................ 24.9 24.2 83.6 62.2
==== ==== ==== ====
Shareholders' equity
June 30, December 31,
2001 2000
-------- ------------
Shareholders' equity as reported in the consolidated
balance sheet...................................... 123.9 85.4
Adjustments
Intangible assets:
Goodwill -cost...................................... 927.8 880.1
-amortization.............................. (65.0) (50.7)
Current assets:
Investments ........................................ 0.7 0.5
Receivables -derivative instruments................. 4.9 (0.9)
Pension cost asset ................................. 9.4 6.7
Noncurrent liabilities:
Other -pension costs liability....................... (29.9) (29.5)
-taxation...................................... 1.8 --
Provisions for liabilities and charges:
Deferred taxes - effect of above adjustments ....... 19.6 26.2
----- -----
Shareholders' equity as adjusted to accord with U.S.
GAAP............................................... 993.2 917.8
===== =====
8
WILLIS GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
(in millions of pounds sterling)
(unaudited)
Note 6 - Differences between accounting principles generally accepted in the
United Kingdom and the United States (continued)
The categories of cashflow activity under U.S. GAAP can be summarized as
follows:
Consolidated statement of cash flows
Six months
ended June
30,
-------------
2001 2000
----- -----
Cash inflow from operating activities ......................... 116.0 66.5
Cash outflow from investing activities ........................ (7.4) (10.7)
Cash outflow from financing activities ........................ (80.5) (42.8)
----- -----
Increase in cash and cash equivalents ......................... 28.1 13.0
Effect of foreign exchange rate changes ....................... (0.9) 0.1
Cash and cash equivalents at beginning of period .............. 58.5 48.7
----- -----
Cash and cash equivalents at end of period .................... 85.7 61.8
===== =====
Note 7 - Subsequent events
On July 3, 2001, the Company announced the sale of its 51% interest in
Willis National Holdings Limited for a cash consideration, less cash retained
in the business to be transferred, of approximately (L)16 million.
9
WILLIS GROUP LIMITED AND SUBSIDIARIES
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Summary
Total revenues increased by (L)33.4 million (16%) to (L)237.4 million in the
second quarter of 2001 from (L)204.0 million in the second quarter of 2000.
Excluding the effects of foreign currency exchange rate movements and the
effects of acquisitions and disposals, total revenues were 12% higher in the
second quarter than in the corresponding period a year ago. The increase in
revenues arose primarily from a combination of new business efforts, client
retentions and the generally favorable impact across most of the Group's
operations of a hardening market place. For the six months to June 30, 2001,
total revenues were (L)494.6 million, 17% higher than a year ago and 11%
higher on a constant currency basis excluding acquisitions and disposals.
Operating income increased by (L)22.0 million (88%) to (L)46.9 million in
the second quarter of 2001 from (L)24.9 million in the second quarter of 2000,
reflecting improved revenues and continued emphasis on the control of costs
and the elimination of waste throughout the Group. For the six months,
operating income was 71% higher than a year ago.
Net income increased by (L)16.5 million to (L)33.4 million in the second
quarter of 2001 from (L)16.9 million in the second quarter of 2000. For the
six months, net income was (L)72.9 million compared with (L)51.8 million a
year ago.
Revenues
Revenues consist of commissions and fees, which increased by (L)31.8 million
(16%) to (L)224.6 million in the second quarter of 2001 from (L)192.8 million
in the second quarter of 2000, and interest income, which increased by (L)1.6
million (14%) to (L)12.8 million from (L)11.2 million.
North American Operations: Revenues generated by our North American
operations increased by (L)8.3 million (11%) to (L)84.0 million in the second
quarter of 2001 from (L)75.7 million in the second quarter of 2000. Adjusting
for the effect of the disposal of the PENCO programs division in January 2001,
revenues increased by 5% in constant currency terms. The increase in revenues
arose from firming premium rates in most sectors.
Global Business: Revenues generated by our Global Business operations
increased by (L)18.0 million (17%) to (L)125.1 million in the second quarter
of 2001 from (L)107.1 million in the second quarter of 2000. In constant
currency terms, revenues increased by 15%, principally from generally
widespread hardening of premium rates across most sectors, with some rates
increasing significantly.
International: Revenues generated by our International operations increased
by (L)7.1 million (33%) to (L)28.3 million in the second quarter of 2001 from
(L)21.2 million in the second quarter of 2000. In constant currency terms,
revenues increased by 33%, mainly as a result of our acquisitions in Norway,
Columbia and South Africa. Excluding the effect on revenue of these
acquisitions, International revenues increased by 16% in constant currency
terms due to firming markets in most countries, notably Australia, Korea and
Asia/Pacific although rates are generally behind the UK and US in hardening.
Expenses
Operating expenses increased by (L)11.4 million (6%) to (L)190.5 million in
the second quarter of 2001 from (L)179.1 million in the second quarter of
2000. Excluding acquisitions and disposals, operating expenses were 4% higher
in constant currency terms than in the corresponding period a year ago. Much
of this increase related to higher incentive payments arising from improved
results. Excluding incentives and other expenses linked to revenue growth,
controllable expenses rose 2% on a constant currency basis in the second
quarter. For the six months, operating expenses were (L)383.1 million, 7%
higher than a year ago but 4% higher on a constant currency basis adjusting
for acquisitions and disposals. Controllable expenses for the six months were
1% higher than the corresponding period for 2000.
10
WILLIS GROUP LIMITED AND SUBSIDIARIES
OPERATING AND FINANCIAL REVIEW AND PROSPECTS (continued)
Loss on disposal of operations
During the first quarter of 2001, the Company disposed of the PENCO programs
division. In accordance with U.K. accounting principles, a non-cash charge of
(L)7.7 million was recorded, representing the write-off of goodwill previously
eliminated against reserves.
Associates
Our share of income before taxation from our associates was a loss of (L)0.6
million in the second quarter of 2001 and a profit of (L)9.6 million in the
six months, compared with a loss of (L)0.2 million and a profit of (L)9.5
million, respectively, for the corresponding periods of 2000.
Interest
Interest income of (L)16.9 million in the second quarter of 2001 included
(L)2.3 million in respect of interest received on a U.S. tax refund. Apart
from this item, interest income represents interest receivable on loans
advanced to our indirect parent company, Trinity Acquisition Limited.
Interest expense of (L)15.1 million for the second quarter of 2001 and
(L)29.0 million for the six months compares with (L)14.1 million and (L)27.7
million, respectively, for the corresponding periods a year ago. Interest
expense represents interest payable on our long-term debt consisting of term
loans and the 9% Senior Subordinated Notes due 2009, all of which are
denominated in U.S. dollars. The higher interest expense in 2001 is
attributable to the strengthening of the U.S. dollar against sterling despite
actual interest payments in U.S. dollars being lower as a result of principal
repayments.
Taxation
The tax charge for the six months ended June 2001 amounted to (L)40.8
million, which included a U.S. tax refund in respect of prior years of (L)1.8
million. Excluding this refund and the goodwill write-off on the PENCO
disposal for which no tax relief is available, the effective tax rate for the
six months was 35%.
Liquidity and Capital Resources
During the first quarter of 2001, we repaid $22.5 million of our term loans
ahead of the repayment schedule. During the second quarter of 2001, Willis
North America redeemed $26 million of 9% Senior Subordinated Notes. As of July
31, 2000, a further $28 million of Notes had been redeemed.
On July 3, 2001 we announced the sale of Willis National, the U.K.
independent financial advisor in which we own 51%. Our share of the total cash
consideration, less cash retained in the business to be transferred, will be
approximately (L)16 million.
We expect that internally generated funds will be sufficient to meet our
foreseeable operating cash requirements, capital expenditures and scheduled
debt repayments, the next of which is not due until 2005. In addition, we have
an undrawn $150 million revolving credit facility.
Differences between U.K. GAAP and U.S. GAAP
Net income for the second quarter of 2001 of (L)33.4 million and for the six
months of (L)72.9 million under U.K. GAAP, compare with net income of (L)27.9
million and (L)70.3 million, respectively, under U.S. GAAP.
The differences arise principally from the differing accounting treatment
for goodwill, forward foreign exchange contracts in respect of future income,
pensions and related deferred taxation. Details of the reconciling differences
are given in Note 31 of the Company's audited consolidated financial
statements for the year ended December 31, 2000.
11
WILLIS GROUP LIMITED AND SUBSIDIARIES
OPERATING AND FINANCIAL REVIEW AND PROSPECTS (continued)
Forward looking information
This quarterly statement contains certain statements relating to future
results, which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or those
anticipated, depending on a variety of factors such as general economic
conditions in different countries around the world, changes in premium rates,
the competitive environment and the actual cost of resolution of contingent
liabilities. Further information concerning the Company and its business,
including factors that potentially could materially affect the Company's
financial results are contained in the Company's filings with the Securities
and Exchange Commission.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
WILLIS GROUP LIMITED
By: /S/ THOMAS COLRAINE
Name: Thomas Colraine
Title: Group Chief Financial Officer
Date: August 13, 2001
13