WILLIS TOWERS WATSON PLC - FORM 8-K - EX-99.1 - WILLIS GROUP HOLDINGS FACT BOOK

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8-K - FORM 8-K - WILLIS TOWERS WATSON PLC	d353116d8k.htm

WILLIS GROUP

HOLDINGS

Fact Book

First Quarter 2012

Exhibit 99.1

Willis: A leading global insurance broker

Broad range of professional insurance, reinsurance, risk management, financial

and human resource consulting and actuarial services

Global distribution capabilities to meet risk management needs of middle market

and large multinational clients

More than 400 offices in 120 countries, with approximately 17,000 employees

Strong sales culture and relentless focus on cost control

Willis Global Franchise

2011 Commissions and Fees by Segment

2011 C&F: $3.4 billion

Willis Subsidiaries and Associates

1Q 2012:

Highlights

1% reported and 2% Organic C&F growth (3% ex-Loan Protector)

Global

–

4% reported and 5% organic growth

–

Reinsurance

up high single-digits, with new business growth in double-digits and benefit from rate

–

Global Specialties down low single-digits, strong growth in construction and marine offset by difficult

comparatives following accounting adjustment in 1q11

–

Willis Faber & Dumas up double digits helped by favorable timing

International –

1% reported and 4% organic growth

–

Double-digit growth in Latin America and Eastern Europe; high single-digit growth in Asia

–

Low single digit growth in continental Europe and mid single-digit decline in UK with economic

weakness across much of the region

–

No significant rate impact

North America –

3% reported and 2% organic decline, 1% organic growth ex-

Loan Protector

–

Strength in Northeast, West and Mexico regions

–

New business up high single-digits

–

Client retention at 92%

–

Some positive rate impact

See important disclosures regarding Non-GAAP measures on page 20

1Q 2012:

Highlights

31.3% reported operating margin; 32.6% adjusted operating margin

Adjusted operating margin down 40 bps from prior year quarter, primarily due to

increased incentives and the negative impact from Loan Protector

Segment operating margins

Global: seasonally high 48.1%

International 27.7%

North America: 23.5%

Reported EPS of $1.28; Adjusted EPS of $1.32, up $0.03 from prior year

Negative $0.02 impact from foreign exchange

Continued rollout of revenue initiatives

Sales 2.0

WillPlace

Initiated announced $100 million share buy back

Repurchased $21 million

(a)

of shares through 1Q12

See important disclosures regarding Non-GAAP measures on page 20

(a) At settlement date

Commissions and fees:

billion

(Q1

2012),

with

organic

growth

Average organic growth

2007 –

2011:

Willis 3%

Peers 0%

Annual premiums written:

~$40 billion +

Relationships with more than

5,000 insurance carriers worldwide

Strong track record of organic growth leadership

Note:

Peer

averages

are

based

Willis

estimates

using

public

information

regarding

insurance

brokerage

operations

AJG,

AON,

BRO,

MMC

See important disclosures regarding Non-GAAP measures on page 20

Growth driven by new business production

% Organic growth in commissions and fees

5% average net new underlying business 2007 –

2011

See important disclosures regarding Non-GAAP measures on page 20

Strong adjusted operating margins

Average 2007 –

2011 Willis 23% Peers 20%

See important disclosures regarding Non-GAAP measures on page 20

Note: Peer averages are based on Willis estimates using public information regarding insurance brokerage operations of AJG, AON, BRO, MMC

($ millions)

Strong cash flow from operations

Major Q1 corporate/non-operating uses of

cash

Dividends ($46 million)

Capex ($36 million)

Share buyback ($19 million)

Acquisition of Gras Savoye Re ($29 million)

Major 2012 expected corporate/non-

operating uses of cash

Dividends (~$185 million)

Capex (~ $130 million)

Share buyback (up to $100 million)

See important disclosures regarding forward-looking statements on page 19

2011 decline driven by Operational Review cash outflow of ~$100m

Leverage Ratios

Debt / Adjusted EBITDA

•

Adjusted EBITDA $911 million for LTM through Q1 2012

•

Debt outstanding $2.5 billion as at March 31, 2012

Continued dedication to reduction of leverage ratio through improved operating

performance and effective capital management.

See important disclosures regarding Non-GAAP measures on page 20

(a)

Includes impact from acquisition of HRH as of 10/1/2008.

Capital priorities

Reinvest in the business to drive future growth

Share repurchase

Repurchased 0.6 million shares in 1Q12 as part of $100 million authorized share

buyback

Continue to pay down debt

Aim to reduce Debt/EBITDA to low 2x level

Small “tuck-in”

accretive acquisitions

Dividend

Annual dividend rate of $1.08 per share

See important disclosures regarding forward-looking statements on page 19

Segment

Overviews

Willis North America overview

Segment overview

Extensive retail platform with leading

positions in major markets

Able to leverage industry and specialty

practice group expertise across network

Major practice groups include:

Employee Benefits (approximately

24% of 2011 North America C&F)

Construction (approximately 12% of

2011 North America C&F)

Healthcare

Real Estate/Hospitality

Financial and Executive Risk

Seven regions, with 120 offices

Other includes Canada and Mexico

See important disclosures regarding Non-GAAP measures on page 20

2011 North America C&F: $1.31 billion

Northeast

13%

Western

14%

Other

South

16%

CAPPPS+

12%

Midwest

18%

Atlantic

20%

2011 commissions and fees – by region

Segment overview

Willis International overview

Retail operations in the United Kingdom &

Ireland, Eastern and Western Europe,

Asia Pacific, the Middle East, South Africa

and Latin America

Providing services to businesses locally in

over 120 countries; leading positions in

UK, Scandinavia, China and

Russia

Offices designed to grow business locally

around the world, making use of the skills,

industry knowledge and expertise

available elsewhere in the Group

International Employee Benefits

generated approximately 12 percent of

2011 International C&F

See important disclosures regarding Non-GAAP measures on page 20

2011 International C&F: $1.03 billion

Eastern Europe

Europe

39%

23%

Latin America

15%

Australasia

Asia

2011 commissions and fees – by region

Segment overview

Willis Global overview

Reinsurance

Willis Re

One of only three global reinsurance

brokers

Significant market share in major

markets, particularly marine and aviation

Cutting edge analytical and advisory

services, including Willis Research

Network

Complete range of transactional

capabilities including, in conjunction with

Willis Capital Markets & Advisory, risk

transfer via the capital markets

See important disclosures regarding Non-GAAP measures on page 20

2011 Global C&F: $1.07 billion

Reinsurance

45%

Other

Aerospace /

Inspace

Marine

Construction

Energy

Finex

Faber & Dumas

17%

2011 commissions and fees – by business

Segment overview

2011 commissions and fees

Willis Global overview (continued)

Global Specialties

Strong global positions in

Aerospace/Inspace

FINEX

and

Financial

Solutions

–

political

risks

and UK financial institutions

Marine

Energy

Construction

Willis Faber & Dumas includes

Faber & Dumas -

wholesale brokerage including:

Glencairn

Limited

provides

access

London

Bermuda markets

Niche –

Fine Art, Jewelry and Specie, Bloodstock

and Kidnap & Ransom

Global

Markets

International

provides

access

for

retail clients to global markets

Willis Capital Markets & Advisory

Advises on M&A and capital markets products

See important disclosures regarding Non-GAAP measures on page 20

2011 Global C&F: $1.07 billion

Reinsurance

45%

Other

Aerospace /

Inspace

Marine

Construction

Energy

Finex

Faber & Dumas

17%

Appendix

See important disclosures regarding forward-looking statements on page 19

The Willis Cause

Delivering the Willis Cause

See important disclosures regarding forward-looking statements on page 19

Our

goal

deliver

the

Willis

Cause

our

value

proposition

clients

–

consistently and efficiently. Initiatives include:

Client Advocates to deliver all aspects of the Cause to clients

Growing new business through:

Global Solutions to grow our share of the Global 1,220 accounts

Sales 2.0, our industry focused middle market sales initiative

Recruiting talent

Delivering the best markets, price & terms for our clients:

WillPlace

Willis Quality Index

Continue implementation of target operating models

Service & claims metrics to focus resources on client delivery

Continually orienting our culture around Delivering the Willis Cause

Important disclosures regarding forward-looking statements

This presentation contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities

Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about

possible or assumed future results of our operations.

All statements, other than statements of historical facts, included in this document that address activities, events or developments that we expect or anticipate may

occur in the future, including such things as our outlook, potential cost savings and accelerated adjusted operating margin and adjusted earnings per share growth,

future capital expenditures, growth in commissions and fees, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of our

business and operations, plans, and references to future successes are forward-looking statements. Also, when we use the words such as ‘anticipate’, ‘believe’,

‘estimate’, ‘expect’, ‘intend’, ‘plan’, ‘probably’, or similar expressions, we are making forward-looking statements.

There are important uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking

statements contained in this document, including the following: the following: the impact of any regional, national or global political, economic, business,

competitive, market, environmental or regulatory conditions on our global business operations; the impact of current financial market conditions on our results of

operations and financial condition, including as a result of those associated with the current Eurozone sovereign debt crisis any insolvencies of or other difficulties

experienced by our clients, insurance companies or financial institutions; our ability to implement and realize anticipated benefits of the 2011 Operational Review

or any revenue generating initiatives; the volatility or declines in insurance markets and premiums on which our commissions are based, but which we do not

control; our ability to continue to manage our significant indebtedness; our ability to compete effectively in our industry, including the impact of our refusal to accept

contingent commissions from carriers in the non-Employee Benefit areas of our retail brokerage business; material changes in commercial property and casualty

markets generally or the availability of insurance products or changes in premiums resulting from a catastrophic event, such as a hurricane, or otherwise; our

ability to retain key employees and clients and attract new business; the timing and ability to carry out share repurchases and redemptions; the timing or ability to

carry out refinancing or take other steps to manage our capital and the limitations in our long-term debt agreements that may restrict our ability to take these

actions; any fluctuations in exchange and interest rates that could affect expenses and revenue; the potential costs and difficulties in complying with a wide variety

of foreign laws and regulations and any related changes, given the global scope of our operations; rating agency actions that could inhibit our ability to borrow

funds or the pricing thereof; a significant decline in the value of investments that fund our pension plans or changes in our pension plan liabilities or funding

obligations; our ability to achieve the expected strategic benefits of transactions; the impairment of the goodwill of one of our reporting units, in which case we may

be required to record significant charges to earnings; our ability to receive dividends or other distributions in needed amounts from our subsidiaries; changes in the

tax or accounting treatment of our operations; any potential impact from the US healthcare reform legislation; our involvements in and the results of any regulatory

investigations, legal proceedings and other contingencies; underwriting, advisory or reputational risks associated with non-core operations as well as the potential

significant impact our non-core operations (including our Loan Protector operations) can have on our financial results; our exposure to potential liabilities arising

from errors and omissions and other potential claims against us; and the interruption or loss of our information processing systems or failure to maintain secure

information systems.

The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For additional

information see also Part I, Item 1A “Risk Factors” included in Willis’ Form 10-K for the year ended December 31, 2011, and our subsequent filings with the

Securities and Exchange Commission. Copies are available online at http://www.sec.gov or on request from the Company.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-

looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking

statements included in this presentation, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless the securities laws require us to

do so. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this presentation may not occur, and we caution you against

unduly relying on these forward-looking statements.

Important disclosures regarding Non-GAAP measures

Adjusted earnings per share (Adjusted EPS)

is defined as adjusted net income per diluted share.

Adjusted

net

income

defined

net

income,

excluding

certain

items

set

out

pages

and

24.

Adjusted operating income

is defined as operating income, excluding certain items as set out on pages 21 and 22.

Adjusted

operating

margin

defined

the

percentage

adjusted

operating

income

total

revenues.

Adjusted

EBITDA

defined

Adjusted

operating

income,

excluding

depreciation

and

amortization

set

out

pages

and 26

Organic commissions & fees growth

excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of

net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to

operations disposed of in each period presented; (iv) in North America, legacy contingent commissions assumed as part of

the HRH acquisition and that had not been converted into higher standard commission; and (v) investment income and other

income from reported revenues, as set out on pages 28 and 29. As a result of the disproportionate impact of the non-core

Loan Protector business, we have also provided organic commission and fee growth information in the presentation for both

the Company and the North America segment excluding Loan Protector.

Reconciliations to GAAP measures are provided for selected non-GAAP measures.

This presentation contains references to "non-GAAP financial measures" as defined in Regulation G of SEC rules. We

present these measures because we believe they are of interest to the investment community and they provide additional

meaningful methods of evaluating certain aspects of the Company’s operating performance from period to period on a

basis that may not be otherwise apparent on a generally accepted accounting principles (GAAP) basis. These financial

measures should be viewed in addition to, not in lieu of, the Company’s condensed consolidated income statements and

balance sheet as of the relevant date. Consistent with Regulation G, a description of such information is provided below

and a reconciliation of certain of such items to GAAP information can be found in our periodic filings with the SEC. Our

method of calculating these non-GAAP financial measures may differ from other companies and therefore comparability

may be limited.

Important disclosures regarding Non-GAAP measures (continued)

See related footnotes on page 27

Operating Income to Adjusted Operating Income

2007

2008

2009

2010

2011

(In millions)

Operating Income

$620

$503

$690

$753

$566

Excluding:

2011 Operational review

(a)

180

FSA regulatory settlement

(b)

Write-off of uncollectible accounts receivable and

legal fees

(d)

Venezuela currency devaluation

(e)

Net (gain)/loss on disposal of operations

(2)

(13)

(4)

Salaries and benefits -

severance costs

(f)

Salaries and benefits –

other

(g)

Shaping our Future expenditure

(h)

Gain on disposal of London headquarters

(i)

HRH integration costs

(j)

Other operating expenses k

(j)

Accelerated amortization of intangibles assets

(l)

Redomicile costs

(m)

Adjusted Operating Income

$618

$600

$708

$767

$775

Operating Margin

24.0%

17.8%

21.2%

22.6%

16.4%

Adjusted Operating Margin

24.0%

21.2%

21.8%

23.0%

22.5%

Important disclosures regarding Non-GAAP measures (continued)

Operating Income to Adjusted Operating Income

See related footnotes on page 27

2011

2012

(In millions)

Operating Income

$239

$156

$90

$81

$317

Excluding:

2011 Operational review charge

(a)

FSA regulatory settlement

(b)

Write-off of uncollectible accounts receivable and

legal fees

(d)

Net (gain)/loss on disposal of operations

(4)

Adjusted Operating Income

$332

$185

$105

$153

$330

Operating Margin

23.7%

18.1%

11.8%

9.9%

31.3%

Adjusted Operating Margin

33.0%

21.5%

13.8%

18.7%

32.6%

Important disclosures regarding Non-GAAP measures (continued)

Net Income to Adjusted Net Income

See related footnotes on page 27

2007

2008

2009

2010

2011

(In millions, except per share data)

Net Income from continuing operations

$409

$302

$434

$455

$203

Excluding the following, net of tax:

2011 Operational review

(a)

128

FSA regulatory settlement

(b)

Make-whole amounts on repurchase and redemption of Senior

Notes and write-off of unamortized debt costs

(c)

131

Write-off of uncollectible accounts receivable and legal fees

(d)

Net (gain)/loss on disposal of operations

(2)

(11)

(4)

Venezuela currency devaluation

(e)

Salaries and benefits - severance programs

(f)

Salaries and benefits - other

(g)

Shaping our Future expenditure

(h)

Gain on disposal of London headquarters

(i)

HRH financing (pre-close) and integration costs

(j)

Other operating expenses

(k)

Accelerated amortization of intangibles assets

(l)

Redomicile costs

(m)

Premium on early redemption of 2010 bonds

(n)

Adjusted Net Income

$407

$378

$450

$470

$482

Diluted shares outstanding

147

148

169

171

176

Net income

per diluted share

Adjusted net income

per diluted share

$2.66

$2.75

$1.15

$2.74

$2.57

$2.77

$2.55

$2.66

$2.78

$2.04

Important disclosures regarding Non-GAAP measures (continued)

Net Income to Adjusted Net Income

See related footnotes on page 27

2011

2012

(In millions, except per share data)

Net Income from continuing operations

$35

$84

$60

$24

$225

Excluding the following, net of tax:

2011

operational

review

charge

FSA

regulatory

settlement

Net (gain)/loss on disposal of operations

(4)

Make-whole amounts on repurchase and redemption of

Senior

Notes

and

write-off

unamortized

debt

costs

124

Write-off

uncollectible

accounts

receivable

and

legal

fees

Adjusted Net Income

$224

$107

$72

$79

$233

Diluted shares outstanding

174

176

Net income

per diluted share

Adjusted net income

per diluted share

$0.34

$0.41

$1.29

$0.20

$1.28

$1.32

$0.14

$0.45

$0.48

$0.61

(c)

(d)

(b)

(a)

Important disclosures regarding Non-GAAP measures (continued)

Adjusted EBITDA and Debt/Adjusted EBITDA

See related footnotes on page 27

2007

2008

2009

2010

2011

(In millions)

Operating Income

$620

$503

$690

$753

$566

Excluding:

2011

operational

review

180

FSA

regulatory

settlement

Write-off of uncollectible accounts receivable and

legal

fees

Venezuela

currency

devaluation

Net

(gain)/loss

disposal

operations

(2)

(13)

(4)

Salaries

and

benefits

severance

costs

Salaries

and

benefits

–

other

Shaping

our

Future

expenditure

Gain

disposal

London

headquarters

HRH

integration

costs

Other

operating

expenses

Accelerated

amortization

intangibles

assets

Redomicile

costs

Adjusted Operating Income

$618

$600

$708

$767

$775

Add back

Depreciation

Amortization of intangibles

Adjusted EBITDA

$684

$690

$865

$912

Debt

1,250

2,650

2,374

2,267

2,369

Debt / Adjusted EBITDA

1.8

3.8

2.7

2.5

2.6

(b)

(d)

(e)

(g)

(h)

(i)

(j)

(k)

(l)

(m)

(a)

(f)

Important disclosures regarding Non-GAAP measures (continued)

Adjusted EBITDA and Debt/Adjusted EBITDA

See related footnotes on page 27

2011

2012

(In millions)

LTM

Operating Income

$239

$156

$90

$81

$317

$644

Excluding:

2011 Operational review charge

(a)

FSA regulatory settlement

(b)

Write-off of uncollectible accounts receivable and

legal fees

(d)

Net (gain)/loss on disposal of operations

(4)

Adjusted Operating Income

$332

$185

$105

$153

$330

$773

Add back

Depreciation

Amortization of intangibles

Adjusted EBITDA

$365

$220

$140

$187

$364

$911

Debt

2,452

Debt / Adjusted EBITDA

2.7

Important disclosures regarding Non-GAAP measures (continued)

Notes to the Operating Income to Adjusted Operating Income reconciliation and Net Income from Continuing

Operations to Adjusted Net Income from Continuing Operations reconciliation

(a)

$180 million pre-tax charge in FY2011 relating to the 2011 operational review, including $98 million of severance costs relating to the elimination of

approximately 1,200 positions in FY2011.

(b)

Regulatory settlement with the Financial Services Authority (FSA).

(c)

Make-whole amounts on repurchase and redemption of Senior Notes and write-off of unamortized debt costs

(d)

Write-off of uncollectible accounts receivable balance, together with associated legal costs, related to a fraudulent overstatement of Commissions and Fees

from the years 2004 to 2011, in a stand-alone North America business.

(e)

With effect from January 1, 2010, the Venezuelan economy was designated as hyper-inflationary. The Venezuelan government also devalued the Bolivar

Fuerte in January 2010. As a result of these actions, the Company recorded a one-time charge in other expenses to reflect the re-measurement of its net

assets denominated in Venezuelan Bolivar Fuerte.

(f)

Severance costs excluded from adjusted operating income and adjusted net income in 2008 relate to approximately 350 positions through the year ended

December 31, 2008 that were eliminated as part of the 2008 expense review. Severance costs also arise in the normal course of business and these charges

(pre-tax) amounted to $24 million and $2 million for the years ended December 31, 2009 and 2008, respectively.

(g)

Other 2008 expense review salaries and benefits costs relate primarily to contract buyouts.

(h)

In addition to severance costs and a net loss on disposal of operations, the Company incurred significant additional expenditure in 2006 to launch its strategic

initiatives, including professional fees, lease termination costs and vacant space provisions.

(i)

The gain on disposal of London headquarters is shown net of leaseback costs.

(j)

2009 HRH integration costs include $nil million severance costs ($2 million in 2008).

(k)

Other operating expenses primarily relate to property and systems rationalization.

(l)

The charge for the accelerated amortization for intangibles relates to the HRH brand name. Following the successful integration of HRH into our North

American operations, we announced on October 1, 2009 that our North America retail operations would change their name from Willis HRH to Willis North

America. Consequently, the intangible asset recognized on the acquisition of HRH relating to the HRH brand has been fully amortized.

(m)

These are legal and professional fees incurred as part of the Company’s redomicile of its parent Company from Bermuda to Ireland.

(n)

On September 29, 2009 we repurchased $160 million of our 5.125 percent Senior Notes due July 2010 at a premium of $27.50 per $1,000 face value,

resulting in a total premium on redemption, including fees, of $5 million.

Commissions and Fees Analysis (a)

Important disclosures regarding Non-GAAP measures (continued)

(a) Effective January 1, 2011, the Company’s internal reporting structure has changed. The primary changes are: Global Markets International, previously reported

within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously reported within the International segment,

is now reported in the North America segment. Comparative data has been restated accordingly.

(b) Included in North America reported commissions and fees were legacy HRH contingent commissions of $1 million in the first quarter of 2012 compared with $4

million in the first quarter of 2011.

2012

2011

Change

Foreign

currency

translation

Acquisitions

and

disposals

Contingent

Commissions

Organic

commissions

and fees

growth

($ millions)

Three months ended

March 31, 2012

Global

$370

$357

(1)

North America (b)

346

356

(3)

(1)

(2)

International

289

286

(3)

Commissions and Fees

$1,005

$999

(1)

(a)

Effective January 1, 2011, the Company’s internal reporting structure has changed. The primary changes are: Global Markets International,

previously reported within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously

reported within the International segment, is now reported in the North America segment. Comparative data has been restated accordingly.

(b)

Included in North America reported commissions and fees were legacy HRH contingent commissions of $5 million in 2011 compared with $11

million in 2010 and $27 million in 2009.

Important disclosures regarding Non-GAAP measures (continued)

Commissions and Fees Analysis (a)

2011

2010

Change

Foreign

currency

translation

Acquisitions

and

disposals

Contingent

Commissions

Organic

commissions

and fees

growth

($ millions)

2011 Full year

Global

$1,073

$987

North America (b)

1,314

1,369

(4)

International

1,027

937

Commissions and Fees

$3,414

$3,293

2010

2009

Change

Foreign

currency

translation

Acquisitions

and

disposals

Contingent

Commissions

Organic

commissions

and fees

growth

($ millions)

2010 Full year

Global

$987

$921

North America (b)

1,369

1,381

(1)

International

937

898

(2)

Commissions and Fees

$3,293

$3,200

(1)

WILLIS GROUP

HOLDINGS

Fact Book

First Quarter 2012

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