Willis Towers Watson
Earnings Release Supplemental Materials
2020 Second Quarter Financial Results
July 30, 2020
willistowerswatson.com
© 2020 Willis Towers Watson. All rights reserved.
Willis Towers Watson Forward Looking Statements
This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements and other forward-looking statements in this document by words such as "may", "will", "would", "expect", "anticipate", "believe", "estimate", "plan", "intend", "continue", or similar words, expressions or the negative of such terms or other
comparable terminology. These statements include, but are not limited to, such things as our outlook, the impact of the COVID-19 pandemic on our business, our pending business combination with Aon plc, future capital expenditures, ongoing working capital efforts, future share repurchases, growth in revenue, the impact of changes to tax laws on our financial results, existing and evolving business strategies and acquisitions and dispositions, demand for our services and competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, our ability to successfully manage ongoing organizational and technology changes, including investments in improving systems and processes, and plans and references to future successes, including our future financial and operating results, plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Willis Towers Watson's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.
There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained herein, including the following: the ability of the company to successfully establish, execute and achieve its global business strategy as it evolves; changes in demand for our services, including any decline in consulting services, defined benefit pension plans or the purchasing of insurance; changes in general economic, business and political conditions, including changes in the financial markets; the risk that the COVID- 19 pandemic substantially and negatively impacts the demand for our products and services and cash flows, and/or continues to materially impact our business operations, including increased demand on our information technology resources and systems and related risks of cybersecurity breaches or incidents; the risks relating to or arising from our pending business combination with Aon plc announced in March 2020, including, among others, our ability to consummate the transaction, including on the terms of the business combination agreement, on the anticipated timeline, and/or with the required shareholder and regulatory approvals; significant competition that the company faces and the potential for loss of market share and/or profitability; the impact of seasonality and differences in timing of renewals; the failure to protect client data or breaches of information systems or insufficient safeguards against cybersecurity breaches or incidents; the risk of increased liability or new legal claims arising from our new and existing products and services, and expectations, intentions and outcomes relating to outstanding litigation; the risk the Stanford litigation settlement approval will be overturned on appeal, the risk that the Stanford bar order may be challenged in other jurisdictions, and the risk that the charge related to the Stanford settlement may not be deductible; the risk of substantial negative outcomes on existing litigation or investigation matters; changes in the regulatory environment in which the company operates, including, among other risks, the impact of pending competition law and regulatory investigations; various claims, government inquiries or investigations or the potential for regulatory action; the company's ability to make divestitures or acquisitions and its ability to integrate or manage such acquired businesses (including the recently-completed acquisition in Latin America); our ability to successfully hedge against fluctuations in foreign currency rates; our ability to integrate direct-to-consumer sales and marketing solutions with our existing offerings and solutions; the ability to comply with complex and evolving regulations related to data privacy and cyber security; the ability to successfully manage ongoing organizational changes, including investments in improving systems and processes; disasters or business continuity problems; the impact of Brexit; our ability to successfully enhance our billing, collection and other working capital efforts, and thereby increase our free cash flow; the potential impact of the anticipated replacement of LIBOR; the ability of the company to properly identify and manage conflicts of interest; reputational damage, including from association with third parties; reliance on third-party services; the loss of key employees; doing business internationally, including the impact of exchange rates; compliance with extensive government regulation; the risk of sanctions imposed by governments, or changes to associated sanction regulations; our ability to effectively apply technology, data and analytics changes for internal operations, maintaining industry standards and meeting client preferences; changes and developments in the insurance industry or the United States healthcare system, including those related to Medicare; the inability to protect the company's intellectual property rights, or the potential infringement upon the intellectual property rights of others; fluctuations in the company's pension assets and liabilities; the company's capital structure, including indebtedness amounts, the limitations imposed by the covenants in the documents governing such indebtedness and the maintenance of the financial and disclosure controls and procedures of each; the ability of the company to obtain financing on favorable terms or at all; adverse changes in the credit ratings of the company; the impact of recent changes to U.S. tax laws, including on our effective tax rate, and the enactment of additional, or the revision of existing, state, federal, and/or foreign regulatory and tax laws and regulations; U.S. federal income tax consequences to U.S. persons owning at least 10% of the company's shares; changes in accounting principles, estimates or assumptions; fluctuation in revenue against the company's relatively fixed or higher than expected expenses; the laws of Ireland being different from the laws of the United States and potentially affording less protections to the holders of our securities; and the company's holding company structure potentially preventing it from being able to receive dividends or other distributions in needed amounts from our subsidiaries. These factors also include those described under "Risk Factors" in the company's most recent 10-K and 10-Q filings and subsequent filings filed with the SEC, including definitive additional materials, the merger proxy statement and other filings generally applicable to significant transactions and related integrations that are or will be filed with the SEC. Copies are available online at http://www.sec.gov or www.willistowerswatson.com.
Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.
Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless the securities laws require us to do so. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against relying on these forward-looking statements.
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© 2020 Willis Towers Watson. All rights reserved.
Willis Towers Watson Non-GAAP Measures
In order to assist readers of our consolidated financial statements in understanding the core operating results that Willis Towers Watson's management uses to evaluate the business and for financial planning, we present the following non-GAAP measures: (1) Constant Currency Change, (2) Organic Change, (3) Adjusted Operating Income/Margin, (4) Adjusted EBITDA/Margin, (5) Adjusted Net Income, (6) Adjusted Diluted Earnings Per Share, (7) Adjusted Income Before Taxes, (8) Adjusted Income Taxes/Tax Rate and (9) Free Cash Flow.
The Company believes that these measures are relevant and provide useful information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.
Reconciliations of these measures are included in the accompanying appendix of these earning release supplemental materials.
The Company does not reconcile its forward-lookingnon-GAAP financial measures to the corresponding U.S. GAAP measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information, such as foreign currency impacts necessary for a quantitative reconciliation of these forward-lookingnon-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, is available to the Company without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The Company provides non-GAAP financial measures that it believes will be achieved, however it cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.
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© 2020 Willis Towers Watson. All rights reserved.
Q2 2020 GAAP Financial Results
Key Figures
$USD million, except EPS and % | Three months ended June 30, | Six months ended June 30, | ||
2019 | 2020 | 2019 | 2020 | |
Revenue | $2,048 | $2,113 | $4,360 | $4,579 |
as reported % change | +3% | +5% | ||
Income from Operations | $176 | $163 | $535 | $523 |
as reported % change | -7% | -2% | ||
Operating Margin % | 8.6% | 7.7% | 12.3% | 11.4% |
as reported change, basis points | -90 bps | -90 bps | ||
Net Income | $94 | $399 | ||
attributable to Willis Towers Watson | $138 | $425 | ||
-32% | -6% | |||
as reported % change | ||||
Diluted EPS | $1.06 | $0.72 | $3.26 | $3.07 |
as reported % change | -32% | -6% | ||
Net Cash From Operating Activities | $303 | $685 | ||
as reported % change | +126% | |||
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© 2020 Willis Towers Watson. All rights reserved.
Q2 2020 Key Figures, Includes Non-GAAP Financial Results
Willis Towers Watson reports second quarter 2020 earnings
Total Revenue
$2.1B | Resilient Recurring Revenue Base | ||||||
Constant currency growth of 5% and flat organic | |||||||
revenue for the quarter despite ongoing economic | |||||||
Q2 2020 Revenue | challenges and uncertainty from COVID-19 | ||||||
This reflects our commitment to our clients and their | |||||||
rapidly evolving needs as they continue to navigate | |||||||
unprecedented business disruptions | |||||||
Constant Currency % | Organic % | ||||||
+5% | +6% | 0% | +6% | ||||
Q2 2020 | Q2 2019 | Q2 2020 | Q2 2019 | ||||
Adj. Operating Margin1
Adj. Diluted EPS1
$1.80 | Modest Earnings Growth | |
Delivered solid earnings despite a | ||
challenging global operating | ||
Q2 2020 Adj. Diluted EPS | environment | |
A modest decrease in operating | ||
results were offset by | ||
improvement in non-operating | ||
earnings | ||
+1% | ||
$1.78 | ||
Q2 2020 | Q2 2019 |
14.0%
Q2 2020
Adj. Operating Margin
Maintained Margin Profile
Maintained disciplined expense management during a time of economic challenge and uncertainty by quickly reducing discretionary spending in order to preserve our margin profile in a sustainable manner
-60bps 14.6% | |
Q2 2020 | Q2 2019 |
Free Cash Flow1
$550M | Strong Cash Management Discipline | ||
Free cash flow is up $367m, or 201%, compared to | |||
the first half of 2019 driven by significant working | |||
Free Cash Flow | capital improvement | ||
six months ended | Keen focus on liquidity management and cash | ||
June 30, 2020 | generation to preserve WTW's financial strength and | ||
flexibility | |||
+201% | $183M | ||
YTD '20 vs. | YTD 2019 | ||
YTD '19 |
1 Signifies Non-GAAP financial measures. See appendix for Non-GAAP reconciliations.
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© 2020 Willis Towers Watson. All rights reserved.
Resilient Business Portfolio At A Time Of Economic Uncertainty
Our commitment to our clients and colleagues is key to our business resilience
Organic Revenue Growth %
Q2 2019 | Q2 2020 | |
Human Capital & Benefits | 5% | -2% |
Corporate Risk & Broking | 5% | 4% |
Investment, Risk & Reinsurance | 8% | 2% |
Benefits Delivery & Administration1 | 6% | -3% |
Willis Towers Watson | 6% | 0% |
HCB had organic revenue decline with the impact of COVID-19 being most pronounced in the Talent and Reward business. The remainder of the segment including Retirement, Health and Benefits, and Technology & Administration Solutions continued to deliver organic growth led by increased demand for project work and new client wins
CRB delivered solid organic revenue growth led by North America, followed by International and Western Europe. Growth was driven by new business generation and strong client retention. The revenue growth was partially offset by a decline in Great Britain due to the negative impact of COVID- 19 on certain insurance lines
IRR had solid organic growth led by Reinsurance driven by new business wins and solid renewals. Insurance Consulting & Technology, Investments, and Wholesale also delivered organic revenue growth as a result of new client wins
BDA organic revenue decline was primarily driven by a shift in timing in Individual Marketplace. TRANZACT had a strong quarter with revenue of $87 million, which is not included in the organic revenue growth as presented
1 Benefits Delivery & Administration organic growth as presented excludes TRANZACT with transaction closing July 30, 2019
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© 2020 Willis Towers Watson. All rights reserved.
Summary of Segment Financial Results
Q2 2020 segment results compared to Q2 2019
As reported, $USD million, except % | Q2 2019 | Q2 2020 | ||||
Revenue | Operating | Revenue | Operating | Margin | ||
Margin %1 | Margin %1 | Year-over-year | ||||
Human Capital & Benefits | 797 | 21% | 767 | 21% | -20 bps | |
Corporate Risk & Broking | 690 | 15% | 701 | 19% | +400 bps |
Investment, Risk & Reinsurance | 409 | 27% | 413 | 29% | +180 bps |
Benefits Delivery & Administration2 | 126 | -20% | 209 | -4% | +1,590 bps |
1 The Operating Margin percentage is rounded.
2 Revenue includes TRANZACT revenue for Q2 2020 after July 30, 2019 closing.
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© 2020 Willis Towers Watson. All rights reserved.
Maintaining A Flexible Balance Sheet Position
Reinforcing our business fundamentals; safeguarding WTW's financial strength
$USD million
Cash and Cash
Equivalents
Total Debt1
Total Equity
Debt to Adj. EBITDA2
Trailing 12-month
June 30, 2019 | Dec 31, 2019 | June 30, 2020 |
812 | 887 | 1,087 |
4,471 | 5,617 | 5,593 |
10,204 | 10,369 | 10,456 |
2.1x | 2.4x | 2.3x |
A disciplined capital management strategy intended to provide Willis Towers Watson with the financial flexibility to reinvest in our businesses, capitalize on market growth opportunities, and support significant value creation for shareholders
Our capital structure provides a solid foundation for business strength and growth in the long- term
A solid history of effectively managing our leverage with a commitment to maintaining investment grade credit rating
Taking a disciplined approach to managing outstanding debt with the near-term focus on liquidity management and the goal to returning our leverage profile to historical level (pre-TRANZACT)
1 Total Debt equals sum of current debt and long-term debt as shown on the Consolidated Balance Sheets. 2 Signifies Non-GAAP financial measure. See appendix for Non-GAAP reconciliations.
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© 2020 Willis Towers Watson. All rights reserved.
A Capital Strategy Fit For The Short & Long-Term
Disciplined approach to capital allocation
A capital light business model and capital structure allow us to shift capital between growth and value creation based on changes in the businesses and/or the macro environment
A strong focus on return on investment to optimize the use of cash
A disciplined approach to managing our pipeline of investment opportunities. Matching capital with opportunities that yields the best results for our clients, colleagues, and shareholders
Goals to prioritize use of cash
1. Reinvest in our capabilities, businesses, and processes |
CASH RETURNED TO SHAREHOLDERS
$3.1B | $986 | $908 | |||||||||||||||
FY2016 to Q2 FY2020 | $595 | $709 | |||||||||||||||
$602 | $479 | ||||||||||||||||
million | $396 | $150 | In progress1 | ||||||||||||||
Share repurchases | $329 | $171 | |||||||||||||||
$306 | |||||||||||||||||
$277 | |||||||||||||||||
$199 | |||||||||||||||||
Dividends | $ | $171 | |||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||
YTD |
MEANINGFUL DIVIDEND GROWTH
2. | Invest in innovation, technology, and new business |
opportunities | |
3. | Pursue opportunistic mergers, acquisitions, and |
divestitures | |
4. | Strengthen balance sheet and liquidity |
5. | Return excess cash to shareholders through share |
repurchase1 | |
6. | Sustain dividends and payout ratio |
+9%
Cash dividend growth 4 years CAGR
Quarterly cash dividend per share
$0.60 | $0.65 | $0.68 | ||
$0.53 | ||||
$0.48 | ||||
+9% | ||||
2016 | 2017 | 2018 | 2019 | 2020 |
1 With regard to certain prohibitions under the transaction agreement in connection with the pending business combination with Aon, no share repurchase is expected during the remainder of 2020
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© 2020 Willis Towers Watson. All rights reserved.
Our primary focus during this crisis has been and continues to be
1 Client Winning Solutions
Willis Towers Watson is rising to meet our clients' evolving needs during this extraordinary time.
We are creating leading content and providing innovative solutions to help our clients address COVID-19 related issues such as health and wellbeing program access, remote workforce management, complex claims and heightened risk exposures, and navigating the capital and liquidity uncertainty.
2 Colleague Health & Wellbeing
The health and wellbeing of our colleagues, their families, and the communities we serve around the world continue to be our utmost priority and continue to be an important part of every decision we make.
Despite the challenges, our colleagues around the world continue to acclimate to the new remote working environment, while simultaneously delivering the high quality services and solutions for our clients.
3 Safeguard Our Business
We have a dedicated team with broad scope to reinforce our business fundamentals and safeguard the financial strength of Willis Towers Watson.
The pandemic had a manageable impact on Willis Towers Watson's demand and cash flow so far, but economic future developments remain difficult to predict. We continue to take a proactive approach to manage expenses, reinforce cash and liquidity, and monitor and plan for different scenarios to safeguard the future of Willis Towers Watson.
Client Winning
Solutions
Colleague Health
& Wellbeing
Safeguard Our
Business
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© 2020 Willis Towers Watson. All rights reserved.
Economic Outlook Remains Challenging & Unpredictable
Proactively reinforcing financial management discipline
Cash Discipline Across Opex, Capex, and Working Capital
Willis Towers Watson's effort to tightly manage discretionary spending and working capital is helping to limit COVID-19's financial impact so far. To that effect, we will continue to be disciplined and
thoughtful about managing cost and capital to safeguard the future for Willis Towers Watson and our stakeholders
Comprehensive Contingency Planning
The pandemic has slowed growth in the short-term, especially for services that are considered discretionary for our clients, but we believe our business model remains resilient. Nevertheless, we are actively evaluating and planning. We are prepared to take swift actions, as necessary, to help mitigate adverse consequences and preserve cash and our margins in the event that we might sustain a prolonged negative impact to our operations
Protecting Balance Sheet And Strengthening Liquidity
The global nature of the pandemic had a profound impact on our clients and broadly reduced liquidity around the world. While the impact on Willis Towers Watson has been manageable, we are actively shifting our short-term financial management strategies to focus on protecting our balance sheet, maximizing financial flexibility, and securing access to capital
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© 2020 Willis Towers Watson. All rights reserved.
Appendix: Reconciliation of Non-
GAAP Measures
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© 2020 Willis Towers Watson. All rights reserved.
Appendix 1: Constant currency and organic revenue change
As reported, USD millions, except %
Components of Revenue Change(i) | |||||||||||||||||||
Three Months Ended | Constant | ||||||||||||||||||
June 30, | As Reported | Currency | Currency | Acquisitions/ | Organic | ||||||||||||||
2020 | 2019 | % Change | Impact | Change | Divestitures | Change | |||||||||||||
Human Capital & Benefits | $ | 767 | $ | 797 | (4)% | (2)% | (2)% | 0% | (2)% | ||||||||||
Corporate Risk & Broking | 701 | 690 | 2% | (2)% | 4% | 0% | 4% | ||||||||||||
Investment, Risk & Reinsurance | 413 | 409 | 1% | (1)% | 2% | 0% | 2% | ||||||||||||
Benefits Delivery & Administration | 209 | 126 | 66% | 0% | 66% | 69% | (3)% | ||||||||||||
Segment Revenue | 2,090 | 2,022 | 3% | (2)% | 5% | 5% | 1% | ||||||||||||
Reimbursable expenses and other | 23 | 26 | |||||||||||||||||
Revenue | $ | 2,113 | $ | 2,048 | 3% | (2)% | 5% | 5% | 0% | ||||||||||
Components of Revenue Change(i)
Human Capital & Benefits
Corporate Risk & Broking
Investment, Risk & Reinsurance
Benefits Delivery & Administration
Segment Revenue
Reimbursable expenses and other
Revenue
Six Months Ended | ||||
June 30, | As Reported | |||
2020 | 2019 | % Change | ||
$ | 1,617 | $ | 1,626 | (1)% |
1,440 | 1,418 | 2% | ||
1,028 | 998 | 3% | ||
440 | 261 | 69% | ||
4,525 | 4,303 | 5% | ||
54 | 57 | |||
$ | 4,579 | $ | 4,360 | 5% |
Constant | |||||||||
Currency | Currency | Acquisitions/ | Organic | ||||||
Impact | Change | Divestitures | Change | ||||||
(1)% | 1% | 0% | 1% | ||||||
(2)% | 4% | 0% | 4% | ||||||
(1)% | 4% | 0% | 4% | ||||||
0% | 69% | 70% | (1)% | ||||||
(2)% | 7% | 4% | 3% | ||||||
(2)% | 7% | 4% | 2% |
- Components of revenue change may not add due to rounding
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© 2020 Willis Towers Watson. All rights reserved.
Appendix 2: Adjusted operating income and margin, adjusted EBITDA and margin, free cash flow
As reported, USD millions, except %
Three Months Ended June 30, | ||||||||||
2020 | 2019 | |||||||||
Income from operations | $ | 163 | 7.7 | % | $ | 176 | 8.6 | % | ||
Adjusted for certain items: | ||||||||||
Amortization | 119 | 123 | ||||||||
Transaction and integration expenses | 14 | - | ||||||||
Adjusted operating income | $ | 296 | 14.0 | % | $ | 299 | 14.6 | % |
Three Months Ended June 30, | |||||||||||||
2020 | 2019 | ||||||||||||
Net Income | $ | 102 | 4.8 % | $ | 149 | 7.3 % | |||||||
Provision for income taxes | 75 | 38 | |||||||||||
Interest expense | 62 | 56 | |||||||||||
Depreciation | 67 | 59 | |||||||||||
Amortization | 119 | 123 | |||||||||||
Transaction and integration expenses | 14 | - | |||||||||||
Loss on disposal of operations | 2 | - | |||||||||||
Adjusted EBITDA and | $ | 441 | 20.9 % | $ | 425 | 20.8 % | |||||||
Adjusted EBITDA Margin | |||||||||||||
Six Months Ended | |||||||||||||
June 30, | |||||||||||||
2020 | 2019 | ||||||||||||
Cash flows from operating activities | $ | 685 | $ | 303 | |||||||||
Less: Additions to fixed assets and software for internal use | (135) | (120) | |||||||||||
Free Cash Flow | $ | 550 | $ | 183 | |||||||||
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Income from operations | $ | 523 | 11.4 | % | $ | 535 | 12.3 % | |
Adjusted for certain items: | ||||||||
Abandonment of long-lived asset | 35 | - | ||||||
Amortization | 240 | 250 | ||||||
Transaction and integration expenses | 23 | 6 | ||||||
Adjusted operating income | $ | 821 | 17.9 % | $ | 791 | 18.1 % |
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Net Income | $ | 415 | 9.1 % | $ | 442 | 10.1% | |
Provision for income taxes | 153 | 105 | |||||
Interest expense | 123 | 110 | |||||
Depreciation | 165 | 113 | |||||
Amortization | 240 | 250 | |||||
Transaction and integration expenses | 23 | 6 | |||||
Loss on disposal of operations | 2 | - | |||||
Adjusted EBITDA and | $ | 1,121 | 24.5 % | $ | 1,026 | 23.5% | |
Adjusted EBITDA Margin | |||||||
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© 2020 Willis Towers Watson. All rights reserved.
Appendix 3: Adjusted net income, adjusted diluted earnings per share, adjusted income before taxes, adjusted income tax rate
As reported, USD millions, except % and EPS
Six Months Ended | ||||||||
Three Months Ended | June 30, | |||||||
June 30, | 2020 | 2019 | ||||||
2020 | 2019 |
Net Income attributable to Willis Towers Watson | $ | 94 | $ | 138 | |
Adjusted for certain items: | |||||
Amortization | 119 | 123 | |||
Transaction and integration expenses | 14 | - | |||
Loss on disposal of operations | 2 | - | |||
Tax effect on certain items listed above(i) | (30) | (29) | |||
Tax effect of the CARES Act | 35 | - | |||
Adjusted Net Income | $ | 234 | $ | 232 | |
Weighted-average shares of common stock, diluted | 130 | 130 | |||
Diluted Earnings Per Share | $ | 0.72 | $ | 1.06 | |
Adjusted for certain items:(ii) | |||||
Amortization | 0.91 | 0.94 | |||
Transaction and integration expenses | 0.11 | - | |||
Loss on disposal of operations | 0.02 | - | |||
Tax effect on certain items listed above(i) | (0.23) | (0.22) | |||
Tax effect of the CARES Act | 0.27 | - | |||
Adjusted Diluted Earnings Per Share | $ | 1.80 | $ | 1.78 | |
Three Months Ended | |||||
June 30, | |||||
2020 | 2019 | ||||
Income from operations before income taxes | $ | 177 | $ | 187 | |
Adjusted for certain items: | |||||
Amortization | 119 | 123 | |||
Transaction and integration expenses | 14 | - | |||
Loss on disposal of operations | 2 | - | |||
Adjusted income before taxes | $ | 312 | $ | 310 | |
Provision for income taxes | $ | 75 | $ | 38 | |
Tax effect on certain items listed above(i) | 30 | 29 | |||
Tax effect of the CARES Act | (35) | - | |||
Adjusted income taxes | $ | 70 | $ | 67 | |
U.S. GAAP tax rate | 42.2% | 19.7% | |||
Adjusted income tax rate | 22.2% | 21.4% |
- The tax effect was calculated using an effective tax rate for each item.
- Per share values and totals may differ due to rounding.
Net Income attributable to Willis Towers Watson | $ | 399 | $ | 425 | ||
Adjusted for certain items: | ||||||
Abandonment of long-lived asset | 35 | - | ||||
Amortization | 240 | 250 | ||||
Transaction and integration expenses | 23 | 6 | ||||
Loss on disposal of operations | 2 | - | ||||
Tax effect on certain items listed above(i) | (65) | (61) | ||||
Tax effect of the CARES Act | 35 | - | ||||
Adjusted Net Income | $ | 669 | $ | 620 | ||
Weighted-average shares of common stock, diluted | 130 | 130 | ||||
Diluted Earnings Per Share | $ | 3.07 | $ | 3.26 | ||
Adjusted for certain items:(ii) | ||||||
Abandonment of long-lived asset | 0.27 | - | ||||
Amortization | 1.84 | 1.92 | ||||
Transaction and integration expenses | 0.18 | 0.05 | ||||
Loss on disposal of operations | 0.02 | - | ||||
Tax effect on certain items listed above(i) | (0.50) | (0.47) | ||||
Tax effect of the CARES Act | 0.27 | - | ||||
Adjusted Diluted Earnings Per Share | $ | 5.14 | $ | 4.76 | ||
Six Months Ended | ||||||
June 30, | ||||||
2020 | 2019 | |||||
Income from operations before income taxes | $ | 568 | $ | 547 | ||
Adjusted for certain items: | ||||||
Abandonment of long-lived asset | 35 | - | ||||
Amortization | 240 | 250 | ||||
Transaction and integration expenses | 23 | 6 | ||||
Loss on disposal of operations | 2 | - | ||||
Adjusted income before taxes | $ | 868 | $ | 803 | ||
Provision for income taxes | $ | 153 | $ | 105 | ||
Tax effect on certain items listed above(i) | 65 | 61 | ||||
Tax effect of the CARES Act | (35) | - | ||||
Adjusted income taxes | $ | 183 | $ | 166 | ||
U.S. GAAP tax rate | 26.9% | 19.1 | % | |||
Adjusted income tax rate | 21.1% | 20.6% |
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About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has more than 45,000 employees and services clients in more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas
- the dynamic formula that drives business performance.
Together, we unlock potential. Learn more at willistowerswatson.com.
© 2020 Willis Towers Watson. All rights reserved.
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Willis Towers Watson plc published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2020 10:25:12 UTC