Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 27, 2020 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | WILLIS TOWERS WATSON PLC | |
Entity Central Index Key | 0001140536 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 128,735,691 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Trading Symbol | WLTW | |
Title of 12(b) Security | Ordinary Shares, nominal value $0.000304635 per share | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-16503 | |
Entity Incorporation, State or Country Code | L2 | |
Entity Tax Identification Number | 98-0352587 | |
Entity Address, Address Line One | c/o Willis Group Limited | |
Entity Address, Address Line Two | 51 Lime Street | |
Entity Address, City or Town | London | |
Entity Address, Country | GB | |
Entity Address, Postal Zip Code | EC3M 7DQ | |
City Area Code | 011 | |
Local Phone Number | 44-20-3124-6000 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 2,466 | $ 2,312 |
Costs of providing services | ||
Salaries and benefits | 1,394 | 1,348 |
Other operating expenses | 484 | 418 |
Depreciation | 98 | 54 |
Amortization | 121 | 127 |
Transaction and integration expenses | 9 | 6 |
Total costs of providing services | 2,106 | 1,953 |
Income from operations | 360 | 359 |
Interest expense | (61) | (54) |
Other income, net | 92 | 55 |
INCOME FROM OPERATIONS BEFORE INCOME TAXES | 391 | 360 |
Provision for income taxes | (78) | (67) |
NET INCOME | 313 | 293 |
Income attributable to non-controlling interests | (8) | (6) |
NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON | $ 305 | $ 287 |
EARNINGS PER SHARE | ||
Basic earnings per share | $ 2.36 | $ 2.21 |
Diluted earnings per share | $ 2.34 | $ 2.20 |
Comprehensive income before non-controlling interests | $ 93 | $ 315 |
Comprehensive income attributable to non-controlling interests | (7) | (5) |
Comprehensive income attributable to Willis Towers Watson | $ 86 | $ 310 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 898 | $ 887 |
Fiduciary assets | 15,589 | 13,004 |
Accounts receivable, net | 2,594 | 2,621 |
Prepaid and other current assets | 469 | 525 |
Total current assets | 19,550 | 17,037 |
Fixed assets, net | 974 | 1,046 |
Goodwill | 11,162 | 11,194 |
Other intangible assets, net | 3,360 | 3,478 |
Right-of-use assets | 906 | 968 |
Pension benefits assets | 915 | 868 |
Other non-current assets | 860 | 835 |
Total non-current assets | 18,177 | 18,389 |
TOTAL ASSETS | 37,727 | 35,426 |
LIABILITIES AND EQUITY | ||
Fiduciary liabilities | 15,589 | 13,004 |
Deferred revenue and accrued expenses | 1,329 | 1,784 |
Current debt | 697 | 316 |
Current lease liabilities | 151 | 164 |
Other current liabilities | 858 | 802 |
Total current liabilities | 18,624 | 16,070 |
Long-term debt | 5,177 | 5,301 |
Liability for pension benefits | 1,261 | 1,324 |
Deferred tax liabilities | 501 | 526 |
Provision for liabilities | 541 | 537 |
Long-term lease liabilities | 914 | 964 |
Other non-current liabilities | 320 | 335 |
Total non-current liabilities | 8,714 | 8,987 |
TOTAL LIABILITIES | 27,338 | 25,057 |
COMMITMENTS AND CONTINGENCIES | 0 | 0 |
EQUITY | ||
Additional paid-in capital | 10,703 | 10,687 |
Retained earnings | 2,009 | 1,792 |
Accumulated other comprehensive loss, net of tax | (2,446) | (2,227) |
Treasury shares, at cost, 17,519 shares in 2020 and 2019, and 40,000 shares, €1 nominal value, in 2020 and 2019 | (3) | (3) |
Total Willis Towers Watson shareholders’ equity | 10,263 | 10,249 |
Non-controlling interests | 126 | 120 |
Total equity | 10,389 | 10,369 |
TOTAL LIABILITIES AND EQUITY | $ 37,727 | $ 35,426 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) | Mar. 31, 2020$ / sharesshares | Mar. 31, 2020€ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2019€ / sharesshares |
Preference shares, nominal value (USD per share) | $ / shares | $ 0.000115 | $ 0.000115 | ||
Preference shares, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Preference shares, shares issued | 0 | 0 | 0 | 0 |
Ordinary shares, $0.000304635 nominal value [Member] | ||||
Ordinary shares, nominal value | $ / shares | $ 0.000304635 | $ 0.000304635 | ||
Ordinary shares, shares authorized | 1,510,003,775 | 1,510,003,775 | 1,510,003,775 | 1,510,003,775 |
Ordinary shares, shares issued | 128,726,263 | 128,726,263 | 128,689,930 | 128,689,930 |
Ordinary shares, shares outstanding | 128,726,263 | 128,726,263 | 128,689,930 | 128,689,930 |
Treasury shares | 17,519 | 17,519 | 17,519 | 17,519 |
Ordinary shares, €1 nominal value [Member] | ||||
Ordinary shares, nominal value | € / shares | € 1 | € 1 | ||
Ordinary shares, shares authorized | 40,000 | 40,000 | 40,000 | 40,000 |
Ordinary shares, shares issued | 40,000 | 40,000 | 40,000 | 40,000 |
Treasury shares | 40,000 | 40,000 | 40,000 | 40,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES | |||
NET INCOME | $ 313 | $ 293 | |
Adjustments to reconcile net income to total net cash from operating activities: | |||
Depreciation | 98 | 54 | |
Amortization | 121 | 127 | |
Non-cash lease expense | 34 | 36 | |
Net periodic benefit of defined benefit pension plans | (46) | (32) | |
Provision for doubtful receivables from clients | 24 | 8 | |
Benefit from deferred income taxes | (23) | (28) | |
Share-based compensation | (1) | 10 | |
Non-cash foreign exchange (gain)/loss | (12) | 8 | |
Other, net | 23 | 4 | |
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries: | |||
Accounts receivable | (46) | (121) | |
Fiduciary assets | (2,873) | (2,490) | |
Fiduciary liabilities | 2,873 | 2,490 | |
Other assets | 7 | (37) | |
Other liabilities | (482) | (379) | |
Provisions | 13 | 10 | |
Net cash from/(used in) operating activities | 23 | (47) | |
CASH FLOWS USED IN INVESTING ACTIVITIES | |||
Additions to fixed assets and software for internal use | (66) | (57) | |
Capitalized software costs | (15) | (17) | |
Acquisitions of operations, net of cash acquired | (66) | (1) | |
Other, net | (15) | 0 | |
Net cash used in investing activities | (162) | (75) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Net borrowings on revolving credit facility | 396 | 138 | |
Repayments of debt | (128) | (1) | |
Proceeds from issuance of shares | 3 | 22 | |
Dividends paid | (84) | (77) | |
Acquisitions of and dividends paid to non-controlling interests | (1) | 0 | |
Net cash from financing activities | 186 | 82 | |
INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 47 | (40) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (36) | (1) | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | [1] | 895 | 1,033 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | [1] | $ 906 | $ 992 |
[1] | As a result of the acquired TRANZACT collateralized facility, cash, cash equivalents and restricted cash included $8 million of restricted cash at March 31, 2020 and December 31, 2019, which is included within prepaid and other current assets on our condensed consolidated balance sheets. There were no restricted cash amounts held at March 31, 2019 and December 31, 2018. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Restricted cash | $ 8,000,000 | $ 8,000,000 |
Prepaid Expenses and Other Current Assets [Member] | Tranzact Collateralized Facility [Member] | ||
Restricted cash | $ 8,000,000 | $ 8,000,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Shares outstanding [Member] | Ordinary shares and APIC [Member] | Retained earnings [Member] | Treasury shares [Member] | AOCL [Member] | [1] | Total WTW shareholders' equity [Member] | Non-controlling interests [Member] | Redeemable noncontrolling interests [Member] | |
Equity, beginning balance at Dec. 31, 2018 | $ 9,971 | $ 10,615 | $ 1,201 | $ (3) | $ (1,961) | $ 9,852 | $ 119 | ||||
Equity, beginning balance (in shares) at Dec. 31, 2018 | 128,922 | ||||||||||
Temporary equity, beginning balance at Dec. 31, 2018 | [2] | $ 26 | |||||||||
Adoption of New Pronouncement (Accounting Standards Update 2018-02 [Member]) at Dec. 31, 2018 | 36 | (36) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 291 | 287 | 287 | 4 | |||||||
Net income, redeemable | [2] | 2 | |||||||||
Net income, total | 293 | ||||||||||
Dividends declared | (85) | (85) | (85) | ||||||||
Other comprehensive income/(loss) | 22 | 23 | 23 | (1) | |||||||
Issuance of shares under employee stock compensation plans | 22 | 22 | 22 | ||||||||
Issue of shares under employee stock compensation plans (in shares) | 289 | ||||||||||
Share-based compensation and net settlements | (7) | (7) | (7) | ||||||||
Equity, ending balance at Mar. 31, 2019 | 10,214 | 10,630 | 1,439 | (3) | (1,974) | 10,092 | 122 | ||||
Equity, ending balance (in shares) at Mar. 31, 2019 | 129,211 | ||||||||||
Temporary equity, ending balance at Mar. 31, 2019 | [2] | $ 28 | |||||||||
Equity, beginning balance at Dec. 31, 2019 | 10,369 | 10,687 | 1,792 | (3) | (2,227) | 10,249 | 120 | ||||
Equity, beginning balance (in shares) at Dec. 31, 2019 | 128,690 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 313 | 305 | 305 | 8 | |||||||
Net income, total | 313 | ||||||||||
Dividends declared | (88) | (88) | (88) | ||||||||
Dividends attributable to non-controlling interests | (1) | (1) | |||||||||
Other comprehensive income/(loss) | (220) | (219) | (219) | (1) | |||||||
Issuance of shares under employee stock compensation plans | 3 | 3 | 3 | ||||||||
Issue of shares under employee stock compensation plans (in shares) | 36 | ||||||||||
Share-based compensation and net settlements | 9 | 9 | 9 | ||||||||
Foreign currency translation | 4 | 4 | 4 | ||||||||
Equity, ending balance at Mar. 31, 2020 | $ 10,389 | $ 10,703 | $ 2,009 | $ (3) | $ (2,446) | $ 10,263 | $ 126 | ||||
Equity, ending balance (in shares) at Mar. 31, 2020 | 128,726 | ||||||||||
[1] | Accumulated other comprehensive loss, net of tax (‘AOCL’). | ||||||||||
[2] | The non-controlling interest was related to Max Matthiessen Holding AB. The remaining amount was purchased during the three months ended December 31, 2019. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Stockholders Equity [Abstract] | ||
Dividends declared per share | $ 0.68 | $ 0.65 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | Note 1 — Nature of Operations Willis Towers Watson plc is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. The Company 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 risk management services include strategic risk consulting (including providing actuarial analysis), a variety of due diligence services, the provision of practical on-site risk control services (such as health and safety and property loss control consulting), and analytical and advisory services (such as hazard modeling and reinsurance optimization studies). We also assist our clients with planning for addressing incidents or crises when they occur. These services include contingency planning, security audits and product tampering plans. We help our clients enhance business performance by delivering consulting services, technology and solutions that optimize benefits and cultivate talent. Our services and solutions encompass such areas as employee benefits, total rewards, talent and benefits outsourcing. In addition, we provide investment advice to help our clients develop disciplined and efficient strategies to meet their investment goals and expand the power of capital. As an insurance broker, we act as an intermediary between our clients and insurance carriers by advising on their risk management requirements, helping them to determine the best means of managing risk and negotiating and placing insurance with insurance carriers through our global distribution network. We operate a private Medicare marketplace in the U.S. through which, along with our active employee marketplace, we help our clients move to a more sustainable economic model by capping and controlling the costs associated with healthcare benefits. Additionally, with the acquisition of TRANZACT in July 2019 (see Note 3 – Acquisitions), we also provide direct-to-consumer sales of Medicare coverage. We are not an insurance company, and therefore we do not underwrite insurable risks for our own account. We believe our broad perspective allows us to see the critical intersections between talent, assets and ideas - the dynamic formula that drives business performance. Proposed Combination with Aon plc On March 9, 2020, WTW and Aon plc (‘Aon’) issued an announcement disclosing that the respective boards of directors of WTW and Aon had reached agreement on the terms of a recommended acquisition of WTW by Aon. Under the terms of the agreement each WTW shareholder will receive 1.08 Aon ordinary shares for each WTW ordinary share. At the time of the announcement, it was estimated that upon completion of the combination, existing Aon shareholders will own approximately 63% and existing WTW shareholders will own approximately 37% of the combined company on a fully diluted basis. The transaction is subject to the approval of the shareholders of both WTW and Aon, as well as other customary closing conditions, including required regulatory approvals. The parties expect the transaction to close in the first half of 2021, subject to satisfaction of these conditions. |
Basis of Presentation and Recen
Basis of Presentation and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Recent Accounting Pronouncements | Note 2 Basis of Presentation The accompanying unaudited quarterly condensed consolidated financial statements of Willis Towers Watson and our subsidiaries are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial statements and results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements should be read together with the Company’s Annual Report on Form 10-K, filed with the SEC on February 26, 2020, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities. The results reflect certain estimates and assumptions made by management, including those estimates used in calculating acquisition consideration and fair value of tangible and intangible assets and liabilities, professional liability claims, estimated bonuses, valuation of billed and unbilled receivables, and anticipated tax liabilities that affect the amounts reported in the condensed consolidated financial statements and related notes. Risks and Uncertainties Related to the COVID-19 Pandemic The COVID-19 pandemic has had an adverse impact on global commercial activity, including the global supply chain, and has contributed to significant volatility in the financial markets including, among other effects, a decline in the equity markets and reduced liquidity. In light of the potential future disruption to our own business operations and those of our clients, suppliers and other third parties with whom we interact, the Company considered the impact of COVID-19 on our business. This analysis considered our business resilience and continuity plans, financial modeling and stress testing of liquidity and financial resources. The analysis concluded that the COVID-19 pandemic did not have a material adverse impact to our financial results for the first quarter of fiscal 2020; however, we expect that the impact of COVID-19 on general economic activity could negatively impact our revenue and operating results for the remainder of 2020. We will continue to monitor the situation and assess possible implications to our business and our stakeholders and will take appropriate actions to help mitigate adverse consequences. The extent to which COVID-19 impacts our business and financial position will depend on future developments, which are difficult to predict, including the severity and scope of the COVID-19 outbreak as well as the types of measures imposed by governmental authorities to contain the virus or address its impact and the duration of those actions and measures. The Company has considered multiple scenarios, with both positive and negative inputs, as part of the significant estimates and assumptions that are inherent in our financial statements and are based on trends in client behavior and the economic environment throughout the quarter as COVID-19 has moved throughout the geographies in which we operate. These estimates and assumptions include the collectability of billed and unbilled receivables, the estimation of revenue, and the fair value of our reporting units, tangible and intangible assets and contingent consideration. With regard to collectability, the Company believes it will face atypical delays in client payments going forward. In addition, we believe that the demand for certain discretionary lines of business may decrease, and that such decrease will impact our financial results in succeeding periods. Non-discretionary lines of business may also be adversely affected, for example because reduced economic activity or disruption in insurance markets reduces demand for or the extent of insurance coverage. We believe that these trends and uncertainties are comparable to those faced by other registrants as a result of the pandemic. CARES Act On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (‘CARES’) Act was enacted in the U.S. to provide relief to companies in the midst of the COVID-19 pandemic and to stimulate the economy. The assistance includes tax relief and government loans, grants and investments for entities in affected industries. The Company has reviewed its eligibility requirements under the key provisions of the CARES Act, including if and how they apply and how they will affect the Company, particularly provisions that (i) eliminate the taxable income limit for certain net operating losses (‘NOLs’) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior tax years; (ii) generally loosen the business interest limitation under section 163(j) from 30 percent to 50 percent; and (iii) fix the ‘retail glitch’ for qualified improvement property. Additionally, the CARES Act offers an employee retention credit to encourage employers to maintain headcounts even if employees cannot report to work because of issues related to COVID-19 as well as a temporary provision allowing companies to defer remitting the employer share of some payroll taxes to the government. T Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, provide d amended and additional guidance for the implementation of ASU No. 2016-13. All related guidance has been codified into, and is now known as, ASC 326, Financial Instruments— Credit Losses (‘ASC 326’). ASC 326 became effective for the Company on January 1, 2020, at which time we adopted it. This ASU did not have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In March 2020, the SEC issued a final rule that amends the disclosure requirements related to certain registered securities under SEC Regulation S-X, Rules 3-10 and 3-16 which currently require separate financial statements for subsidiary issuers and guarantors of registered debt securities unless certain exceptions are met, and affiliates that collateralize registered securities offerings if the affiliates’ securities are a substantial portion of the collateral. The final rule is generally effective for filings on or after January 4, 2021, however early application is permitted. The most pertinent portions of the final rule that are currently applicable to the Company include: (i) replacing the previous requirement under Rule 3-10 to provide condensed consolidating financial information in the registrant’s financial statements with a requirement to provide alternative financial disclosures (which include summarized Management’s Discussion and Analysis of Financial Condition and Results of Operations In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Note 3 TRANZACT Acquisition On July 30, 2019, the Company acquired TRANZACT, a U.S.-based provider of comprehensive, direct-to-consumer sales and marketing solutions for leading insurance carriers in the U.S. TRANZACT leverages digital, data and direct marketing solutions to deliver qualified leads, fully-provisioned sales and robust customer management systems to brands seeking to acquire and manage large numbers of consumers. Pursuant to the terms of the acquisition agreement, subject to certain adjustments, the consideration consisted of $1.3 billion paid in cash at closing. Additional contingent consideration in the form of a potential earn-out of up to $17 million is to be paid in cash in 2021 based on the achievement of certain financial targets. The acquisition was initially funded in part with a $1.1 billion one-year A summary of the preliminary fair values of the identifiable assets acquired, and liabilities assumed, of TRANZACT at July 30, 2019 are summarized in the following table. Cash and cash equivalents $ 7 Restricted cash 2 Accounts receivable, net 3 Renewal commissions receivable, current (i) 36 Prepaid and other current assets 22 Renewal commissions receivable, non-current (i) 130 Fixed assets 9 Intangible assets 646 Goodwill 722 Right-of-use assets 19 Other non-current assets 2 Collateralized facility (91 ) Other current liabilities (55 ) Deferred tax liabilities, net (104 ) Lease liabilities (19 ) Net assets acquired $ 1,329 ______________ (i) Renewal commissions receivables arise from direct-to-consumer Medicare broking sales. Cash collections for these receivables are expected to occur over a period of several years. Due to the provisions of ASC 606, these receivables are not discounted for a significant financing component when initially recognized. However, as a result of recognizing the fair value of these receivables in accordance with ASC 805, Business Combinations Intangible assets consist primarily of $612 million of customer relationships, with an expected life of 15.4 years. Additional intangibles acquired consist of domain names. Goodwill is calculated as the difference between the aggregate consideration and the acquisition date fair value of the net assets acquired, including the intangible assets acquired, and represents the value of TRANZACT’s assembled workforce and the future economic benefits that we expect to achieve as a result of the acquisition. None of the goodwill recognized on the transaction is tax deductible, however there is tax deductible goodwill that will be carried forward from previous acquisitions by TRANZACT. During the three months ended March 31, 2020, purchase price allocation adjustments were made primarily to adjust the deferred tax liabilities related to the deductibility of goodwill. The purchase price allocation as of the acquisition date related to deferred tax assets and deferred tax liabilities is not yet complete. Revenue related to TRANZACT was $95 million during the three months ended March 31, 2020. Other Acquisitions Other acquisitions were completed during the three months ended March 31, 2020 for combined cash payments of $71 million and contingent consideration with an estimated fair value of $4 million. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | Note 4 Disaggregation of Revenue The Company reports revenue by segment in Note 5 — Three Months Ended March 31, HCB CRB IRR BDA Corporate (i) Total 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 Broking $ 83 $ 73 $ 648 $ 660 $ 433 $ 405 $ 98 $ 3 $ — $ — $ 1,262 $ 1,141 Consulting 582 580 47 31 93 114 — — 2 3 724 728 Outsourced administration 128 123 25 27 3 2 133 132 — — 289 284 Other 47 47 1 1 83 58 — — 1 1 132 107 Total revenue by service offering 840 823 721 719 612 579 231 135 3 4 2,407 2,260 Reimbursable expenses and other (i) 15 14 — — 3 2 3 3 6 7 27 26 Total revenue from customer contracts $ 855 $ 837 $ 721 $ 719 $ 615 $ 581 $ 234 $ 138 $ 9 $ 11 $ 2,434 $ 2,286 Interest and other income (ii) 10 6 18 9 3 10 — — 1 1 32 26 Total revenue $ 865 $ 843 $ 739 $ 728 $ 618 $ 591 $ 234 $ 138 $ 10 $ 12 $ 2,466 $ 2,312 ______________ ( i ) Reimbursable expenses and other, as well as Corporate revenue, are excluded from segment revenue, but included in total revenue on the condensed consolidated statements of comprehensive income. ( i i ) Interest and other income is included in segment revenue and total revenue, however it has been presented separately in the above tables because it does not arise directly from contracts with customers. Individual revenue streams aggregating to approximately 5% of total revenue from customer contracts for the three months ended March 31, 2020 and 2019 have been included within the Other line in the tables above. The following table presents revenue by the geography where our work is performed for the three months ended March 31, 2020 and 2019. The reconciliation to total revenue on our condensed consolidated statements of comprehensive income and to segment revenue is shown in the table above. Three Months Ended March 31, HCB CRB IRR BDA Corporate Total 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 North America $ 476 $ 471 $ 233 $ 220 $ 170 $ 164 $ 229 $ 135 $ 2 $ 4 $ 1,110 $ 994 Great Britain 126 118 137 142 321 300 — — — — 584 560 Western Europe 156 155 244 239 76 69 — — 1 — 477 463 International 82 79 107 118 45 46 2 — — — 236 243 Total revenue by geography $ 840 $ 823 $ 721 $ 719 $ 612 $ 579 $ 231 $ 135 $ 3 $ 4 $ 2,407 $ 2,260 Contract Balances The Company reports accounts receivable, net on the condensed consolidated balance sheet, which includes billed and unbilled receivables and current contract assets. In addition to accounts receivable, net, the Company had the following non-current contract assets and deferred revenue balances at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Billed receivables, net of allowance for doubtful accounts of $55 million and $37 million $ 1,870 $ 1,831 Unbilled receivables 442 434 Current contract assets 282 356 Accounts receivable, net $ 2,594 $ 2,621 Non-current accounts receivable, net $ 27 $ 30 Non-current contract assets $ 140 $ 105 Deferred revenue $ 562 $ 538 During the three months ended March 31, 2020, revenue of approximately $272 million was recognized that was reflected as deferred revenue at December 31, 2019. During the three months ended March 31, 2020, the Company recognized revenue of approximately $6 million related to performance obligations satisfied in a prior period. Performance Obligations The Company has contracts for which performance obligations have not been satisfied as of March 31, 2020 or have been partially satisfied as of this date. The following table shows the expected timing for the satisfaction of the remaining performance obligations. This table does not include contract renewals or variable consideration, which was excluded from the transaction prices in accordance with the guidance on constraining estimates of variable consideration. In addition, in accordance with ASC 606, Revenue From Contracts With Customers • Performance obligations which are part of a contract that has an original expected duration of less than one year, and • Performance obligations satisfied in accordance with ASC 606-10-55-18 (‘right to invoice’). Remainder of 2020 2021 2022 onward Total Revenue expected to be recognized on contracts as of March 31, 2020 $ 384 $ 400 $ 483 $ 1,267 Since most of the Company’s contracts are cancellable with less than one year’s notice, and have no substantive penalty for cancellation, the majority of the Company’s remaining performance obligations as of March 31, 2020 have been excluded from the table above. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Note 5 Willis Towers Watson has four reportable operating segments or business areas: • Human Capital and Benefits (‘HCB’) • Corporate Risk and Broking (‘CRB’) • Investment, Risk and Reinsurance (‘IRR’) • Benefits Delivery and Administration (‘BDA’) Willis Towers Watson’s chief operating decision maker is its chief executive officer. We determined that the operational data used by the chief operating decision maker is at the segment level. Management bases strategic goals and decisions on these segments and the data presented below is used to assess the adequacy of strategic decisions and the methods of achieving these strategies and related financial results. Management evaluates the performance of its segments and allocates resources to them based on net operating income on a pre-tax basis. The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities. The following table presents segment revenue and segment operating income for our reportable segments for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, HCB CRB IRR BDA Total 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 Segment revenue $ 850 $ 829 $ 739 $ 728 $ 615 $ 589 $ 231 $ 135 $ 2,435 $ 2,281 Segment operating income/(loss) $ 213 $ 204 $ 127 $ 127 $ 277 $ 252 $ (11 ) $ (21 ) $ 606 $ 562 The following table presents a reconciliation of the information reported by segment to the Company’s condensed consolidated statement of comprehensive income amounts reported for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, 2020 2019 Revenue: Total segment revenue $ 2,435 $ 2,281 Reimbursable expenses and other 31 31 Revenue $ 2,466 $ 2,312 Total segment operating income $ 606 $ 562 Amortization (121 ) (127 ) Transaction and integration expenses (i) (9 ) (6 ) Unallocated, net (ii) (116 ) (70 ) Income from operations 360 359 Interest expense (61 ) (54 ) Other income, net 92 55 Income from operations before income taxes $ 391 $ 360 (i) Includes transaction costs related to the proposed Aon combination and TRANZACT acquisition in 2019. (ii) Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes. The Company does not currently provide asset information by reportable segment as it does not routinely evaluate the total asset position by segment. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6 — Income Taxes Provision for income taxes for the three months ended March 31, 2020 was $78 million compared to $67 million for the three months ended March 31, 2019. The effective tax rate was 20.0% for the three months ended March 31, 2020 and 18.8% for the three months ended March 31, 2019. These effective tax rates are calculated using extended values from our condensed consolidated statements of comprehensive income and are therefore more precise tax rates than can be calculated from rounded values. The prior year effective tax rate was lower primarily due to discrete valuation allowance releases in certain non-U.S. jurisdictions. On April 7, 2020, U.S. Treasury and the Internal Revenue Service issued final regulations on specific aspects of U.S. Tax Reform that are retroactive to tax years beginning after December 20, 2018. These final regulations constitute a subsequent event and will be recognized in the period in which the regulation was issued. This legislation impacts certain positions previously taken with respect to amounts recorded in our condensed consolidated financial statements. We will adjust such amounts to reflect this legislation in our condensed consolidated financial statements during the three months ended June 30, 2020. We have estimated the potential adjustment to be between $50 million and $82 million. The Company recognizes deferred tax balances related to the undistributed earnings of subsidiaries when it expects that it will recover those undistributed earnings in a taxable manner, such as through receipt of dividends or sale of the investments. Historically, we have not provided taxes on cumulative earnings of our subsidiaries that have been reinvested indefinitely. As a result of our plans to restructure or distribute accumulated earnings of certain foreign operations, we have recorded an estimate of foreign withholding and state income taxes. However, we assert that the historical cumulative earnings of our other subsidiaries are reinvested indefinitely, and therefore do not provide deferred tax liabilities on these amounts. The Company records valuation allowances against net deferred tax assets based on whether it is more likely than not that the deferred tax assets will be realized. We have liabilities for uncertain tax positions under ASC 740 of $51 million, excluding interest and penalties. The Company believes the outcomes that are reasonably possible within the next 12 months may result in a reduction in the liability for uncertain tax positions of approximately $3 million to $7 million, excluding interest and penalties. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 7 The components of goodwill are outlined below for the three months ended March 31, 2020: HCB CRB IRR BDA Total Balance at December 31, 2019: Goodwill, gross $ 4,298 $ 2,309 $ 1,795 $ 3,284 $ 11,686 Accumulated impairment losses (130 ) (362 ) — — (492 ) Goodwill, net - December 31, 2019 4,168 1,947 1,795 3,284 11,194 Goodwill acquired 14 27 — — 41 Acquisition accounting adjustment — — — (5 ) (5 ) Foreign exchange (27 ) (21 ) (20 ) — (68 ) Balance at March 31, 2020: Goodwill, gross 4,285 2,315 1,775 3,279 11,654 Accumulated impairment losses (130 ) (362 ) — — (492 ) Goodwill, net - March 31, 2020 $ 4,155 $ 1,953 $ 1,775 $ 3,279 $ 11,162 Other Intangible Assets The following table reflects changes in the net carrying amounts of the components of finite-lived intangible assets for the three months ended March 31, 2020: Client relationships Software Trademark and trade name Other Total Balance at December 31, 2019: Intangible assets, gross $ 4,029 $ 753 $ 1,051 $ 134 $ 5,967 Accumulated amortization (1,731 ) (551 ) (176 ) (31 ) (2,489 ) Intangible assets, net - December 31, 2019 2,298 202 875 103 3,478 Intangible assets acquired 23 — — 23 46 Amortization (77 ) (26 ) (10 ) (8 ) (121 ) Foreign exchange (40 ) — — (3 ) (43 ) Balance at March 31, 2020: Intangible assets, gross 3,974 743 1,051 151 5,919 Accumulated amortization (1,770 ) (567 ) (186 ) (36 ) (2,559 ) Intangible assets, net - March 31, 2020 $ 2,204 $ 176 $ 865 $ 115 $ 3,360 The weighted-average remaining life of amortizable intangible assets at March 31, 2020 was 13.6 years. The table below reflects the future estimated amortization expense for amortizable intangible assets for the remainder of 2020 and for subsequent years: Amortization Remainder of 2020 $ 331 2021 373 2022 315 2023 267 2024 235 Thereafter 1,839 Total $ 3,360 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 8 We are exposed to certain foreign currency risks. Where possible, we identify exposures in our business that can be offset internally. Where no natural offset is identified, we may choose to enter into various derivative transactions. These instruments have the effect of reducing our exposure to unfavorable changes in foreign currency rates. The Company’s board of directors reviews and approves policies for managing this risk as summarized below. Additional information regarding our derivative financial instruments can be found in Note 10 — Fair Value Measurements and Note 15 — Accumulated Other Comprehensive Loss. Foreign Currency Risk Certain non-U.S. subsidiaries receive revenue and incur expenses in currencies other than their functional currency, and as a result, the foreign subsidiary’s functional currency revenue and/or expenses will fluctuate as the currency rates change. Additionally, the forecast Pounds sterling expenses of our London brokerage market operations may exceed their Pounds sterling revenue, and they may also hold significant foreign currency asset or liability positions in the condensed consolidated balance sheet. To reduce such variability, we use foreign exchange contracts to hedge against this currency risk. These derivatives were designated as hedging instruments and at March 31, 2020 and December 31, 2019 had total notional amounts of $495 million and $499 million, respectively, and had a net fair value liability of $14 million and a net fair value asset of $8 million, respectively. At March 31, 2020, the Company estimates, based on current exchange rates, there will be $13 million of net derivative losses on forward exchange rates reclassified from accumulated other comprehensive loss into earnings within the next twelve months as the forecast transactions affect earnings. At March 31, 2020, our longest outstanding maturity was 1.7 years. The effects of the material derivative instruments that are designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019 are below. Amounts pertaining to the ineffective portion of hedging instruments and those excluded from effectiveness testing were immaterial for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, (Loss)/gain recognized in OCI (effective element) 2020 2019 Forward exchange contracts $ (24 ) $ 8 Location of gain/(loss) reclassified from Accumulated OCL into income (effective element) Gain/(loss) reclassified from Accumulated OCL into income (effective element) 2020 2019 Revenue $ — $ 1 Salaries and benefits (2 ) (5 ) $ (2 ) $ (4 ) We also enter into foreign currency transactions, primarily to hedge certain intercompany loans and other balance sheet exposures in currencies other than the functional currency of a given entity. These derivatives are not generally designated as hedging instruments and at March 31, 2020 and December 31, 2019, we had notional amounts of $1.1 billion and $931 million, respectively, and had net fair value assets of $5 million and $21 million, respectively. The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019 are as follows: Loss recognized in income Three Months Ended March 31, Derivatives not designated as hedging instruments: Location of loss recognized in income 2020 2019 Forward exchange contracts Other income, net $ (12 ) $ (10 ) |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 9 Current debt consists of the following: March 31, 2020 December 31, 2019 Term loan due 2020 $ 174 $ 292 Current portion of collateralized facility 24 24 5.750% senior notes due 2021 499 — $ 697 $ 316 Long-term debt consists of the following: March 31, 2020 December 31, 2019 Revolving $1.25 billion credit facility $ 396 $ — Collateralized facility (i) 53 60 5.750% senior notes due 2021 — 499 3.500% senior notes due 2021 448 448 2.125% senior notes due 2022 (ii) 590 604 4.625% senior notes due 2023 249 249 3.600% senior notes due 2024 646 646 4.400% senior notes due 2026 546 546 4.500% senior notes due 2028 595 595 2.950% senior notes due 2029 446 446 6.125% senior notes due 2043 271 271 5.050% senior notes due 2048 395 395 3.875% senior notes due 2049 542 542 $ 5,177 $ 5,301 (i) At March 31, 2020 and December 31, 2019, the Company had $119 million and $127 million, respectively, of renewal commissions receivables pledged as collateral for this facility. (ii) Notes issued in Euro (€540 million) At March 31, 2020 and December 31, 2019, we were in compliance with all financial covenants. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, based on the reliability of the inputs used to determine fair value as follows: • Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets; • Level 2: refers to fair values estimated using observable market-based inputs or unobservable inputs that are corroborated by market data; and • Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data. The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments: • Available-for-sale securities are classified as Level 1 because we use quoted market prices in determining the fair value of these securities. • Market values for our derivative instruments have been used to determine the fair value of forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account observable information about the current foreign currency forward rates. Such financial instruments are classified as Level 2 in the fair value hierarchy. • Contingent consideration payable is classified as Level 3, and we estimate fair value based on the likelihood and timing of achieving the relevant milestones of each arrangement, applying a probability assessment to each of the potential outcomes, which at times includes the use of a Monte Carlo simulation, and discounting the probability-weighted payout. Typically, milestones are based on revenue or earnings growth for the acquired business. The following tables present our assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: Fair Value Measurements on a Recurring Basis at March 31, 2020 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities: Mutual funds / exchange traded funds Prepaid and other current assets and other non-current assets $ 6 $ — $ — $ 6 Derivatives: Derivative financial instruments (i) Prepaid and other current assets and other non-current assets $ — $ 9 $ — $ 9 Liabilities: Contingent consideration: Contingent consideration (ii) Other current liabilities and other non-current liabilities $ — $ — $ 21 $ 21 Derivatives: Derivative financial instruments (i) Other current liabilities and other non-current liabilities $ — $ 18 $ — $ 18 Fair Value Measurements on a Recurring Basis at December 31, 2019 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities: Mutual funds / exchange traded funds Prepaid and other current assets and other non-current assets $ 20 $ — $ — $ 20 Derivatives: Derivative financial instruments (i) Prepaid and other current assets and other non-current assets $ — $ 32 $ — $ 32 Liabilities: Contingent consideration: Contingent consideration (ii) Other current liabilities and other non-current liabilities $ — $ — $ 17 $ 17 Derivatives: Derivative financial instruments (i) Other current liabilities and other non-current liabilities $ — $ 3 $ — $ 3 (i) See Note 8 — Derivative Financial Instruments for further information on our derivative investments. (ii) Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used on our material contingent consideration calculations were 9.80% and 10.16% at March 31, 2020 and December 31, 2019, respectively. The range of these discount rates was 6.98% - 13.00% at March 31, 2020. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable. The following table summarizes the change in fair value of the Level 3 liabilities: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) March 31, 2020 Balance at December 31, 2019 $ 17 Obligations assumed 4 Payments — Realized and unrealized losses 1 Foreign exchange (1 ) Balance at March 31, 2020 $ 21 There were no significant transfers to or from Level 3 in the three months ended March 31, 2020. The following tables present our liabilities not measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Liabilities: Current debt $ 697 $ 704 $ 316 $ 319 Long-term debt $ 5,177 $ 5,290 $ 5,301 $ 5,694 The carrying values of our revolving credit facility, collateralized facility and term loan approximate their fair values. The fair values above are not necessarily indicative of the amounts that the Company would realize upon disposition nor do they indicate the Company’s intent or ability to dispose of the financial instruments. The fair values of our respective senior notes are considered Level 2 financial instruments as they are corroborated by observable market data . |
Retirement Benefits
Retirement Benefits | 3 Months Ended |
Mar. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Benefits | Note 11 Defined Benefit Plans and Post-retirement Welfare Plans Willis Towers Watson sponsors both qualified and non-qualified defined benefit pension plans and other post-retirement welfare (‘PRW’) plans throughout the world. The majority of our plan assets and obligations are in the U.S. and the U.K. We have also included disclosures related to defined benefit plans in certain other countries, including Canada, France, Germany and Ireland. Together, these disclosed funded and unfunded plans represent 99% of Willis Towers Watson’s pension and PRW obligations and are disclosed herein. Components of Net Periodic Benefit (Income)/Cost for Defined Benefit Pension and Post-retirement Welfare Plans The following table sets forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension and PRW plans for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 U.S. U.K. Other PRW U.S. U.K. Other PRW Service cost $ 18 $ 4 $ 5 $ — $ 16 $ 4 $ 5 $ — Interest cost 33 18 4 1 40 24 4 1 Expected return on plan assets (73 ) (62 ) (8 ) — (64 ) (63 ) (7 ) — Amortization of net loss 9 6 — — 5 5 1 — Amortization of prior service credit — (4 ) — (1 ) — (4 ) — (1 ) Net periodic benefit (income)/cost $ (13 ) $ (38 ) $ 1 $ — $ (3 ) $ (34 ) $ 3 $ — Employer Contributions to Defined Benefit Pension Plans The Company made no contributions to its U.S. plans for the three months ended March 31, 2020 and anticipates making $60 million in contributions over the remainder of the fiscal year. The Company made contributions of $20 million to its U.K. plans for the three months ended March 31, 2020 and anticipates making additional contributions of $55 million for the remainder of the fiscal year. The Company made contributions of $14 million to its other plans for the three months ended March 31, 2020 and anticipates making additional contributions of $5 million for the remainder of the fiscal year. Defined Contribution Plans The Company made contributions to its defined contribution plans of $43 million and $41 million during the three months ended March 31, 2020 and 2019, respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 12 The following table presents lease costs recorded on our condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019, respectively: Three Months Ended March 31, 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 1 $ 1 Interest on lease liabilities 1 1 Operating lease cost 47 48 Short-term lease cost — — Variable lease cost 10 13 Sublease income (5 ) (4 ) Total lease cost, net $ 54 $ 59 The total lease cost is recognized in different locations in our condensed consolidated statements of comprehensive income. Amortization of the finance lease ROU assets is included in depreciation, while the interest cost component of these finance leases is included in interest expense. All other costs are included in other operating expenses. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 Indemnification Agreements Willis Towers Watson has various agreements which provide that it may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business and in connection with the purchase and sale of certain businesses. Although it is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements because of the conditional nature of the Company’s obligations and the unique facts of each particular agreement, we do not believe that any potential liability that may arise from such indemnity provisions is probable or material. Legal Proceedings In the ordinary course of business, the Company is subject to various actual and potential claims, lawsuits and other proceedings. Some of the claims, lawsuits and other proceedings seek damages in amounts which could, if assessed, be significant. We do not expect the impact of claims or demands not described below to be material to the Company’s condensed consolidated financial statements. The Company also receives subpoenas in the ordinary course of business and, from time to time, receives requests for information in connection with governmental investigations. Errors and omissions claims, lawsuits, and other proceedings arising in the ordinary course of business are covered in part by professional indemnity or other appropriate insurance. The terms of this insurance vary by policy year. Regarding self-insured risks, the Company has established provisions which are believed to be adequate in light of current information and legal advice, or, in certain cases, where a range of loss exists, the Company accrues the minimum amount in the range if no amount within the range is a better estimate than any other amount. The Company adjusts such provisions from time to time according to developments. See Note 14 — On the basis of current information, the Company does not expect that the actual claims, lawsuits and other proceedings to which it is subject, or potential claims, lawsuits, and other proceedings relating to matters of which it is aware, will ultimately have a material adverse effect on its financial condition, results of operations or liquidity. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation and disputes with insurance companies, it is possible that an adverse outcome or settlement in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods. In addition, given the early stages of some litigation or regulatory proceedings described below, it may not be possible to predict their outcomes or resolutions, and it is possible that any one or more of these events may have a material adverse effect on the Company. The Company provides for contingent liabilities based on ASC 450, Contingencies, Merger-Related Securities Litigation On November 21, 2017, a en banc 18, 2019, the parties completed briefing on the defendants’ renewed motions, and, on December 20, 2019, the court heard argument on the motions. On January 31, 2020, the court denied the motions. On February 27, 2018 and March 8, 2018, two On March 9, 2018, Regents filed a On October 18, 2018, three additional purported former stockholders of Legacy Towers Watson, Naya Master Fund LP, Naya 174 Fund Limited and Naya Lincoln Park Master Fund Limited (collectively, ‘Naya’), filed a complaint against the Company, Legacy Towers Watson, Legacy Willis and John Haley, in the Supreme Court of the State of New York, County of New York, captioned Naya Master Fund LP, et al. v. John J. Haley, et al., Index No. 654968/2018. Based on similar allegations as the Eastern District of Virginia and Delaware actions described above, the complaint asserts claims for common law fraud and negligent misrepresentation. On December 18, 2018, the defendants filed a motion to dismiss the complaint, and on March 21, 2019, the parties completed briefing on the motion. On April 23, 2019, the parties filed a Stipulation and Proposed Order Voluntarily Discontinuing Action providing for the dismissal of the action with prejudice, which the court entered on April 29, 2019. The defendants dispute the allegations in these actions and intend to defend the lawsuits vigorously. Given the stage of the proceedings, the Company is unable to provide an estimate of the reasonably possible loss or range of loss in respect of the complaints. Stanford Financial Group The Company has been named as a defendant in 15 similar lawsuits relating to the collapse of The Stanford Financial Group (‘Stanford’), for which Willis of Colorado, Inc. acted as broker of record on certain lines of insurance. The complaints in these actions generally allege that the defendants actively and materially aided Stanford’s alleged fraud by providing Stanford with certain letters regarding coverage that they knew would be used to help retain or attract actual or prospective Stanford client investors. The complaints further allege that these letters, which contain statements about Stanford and the insurance policies that the defendants placed for Stanford, contained untruths and omitted material facts and were drafted in this manner to help Stanford promote and sell its allegedly fraudulent certificates of deposit. The 15 actions are as follows: • Troice, et al. v. Willis of Colorado, Inc., et al. , C.A. No. 3:9-CV-1274-N, was filed on July 2, 2009 in the U.S. District Court for the Northern District of Texas against Willis Group Holdings plc, Willis of Colorado, Inc. and a Willis associate, among others. On April 1, 2011, plaintiffs filed the operative Third Amended Class Action Complaint individually and on behalf of a putative, worldwide class of Stanford investors, adding Willis Limited as a defendant and alleging claims under Texas statutory and common law and seeking damages in excess of $1 billion, punitive damages and costs. On May 2, 2011, the defendants filed motions to dismiss the Third Amended Class Action Complaint, arguing, inter alia , that the plaintiffs’ claims are precluded by the Securities Litigation Uniform Standards Act of 1998 (‘SLUSA’). On May 10, 2011, the court presiding over the Stanford-related actions in the Northern District of Texas entered an order providing that it would consider the applicability of SLUSA to the Stanford-related actions based on the decision in a separate Stanford action not involving a Willis entity, Roland v. Green Roland On October 27, 2011, the court in Troice Roland On October 28, 2011, the plaintiffs in Troice Troice Roland Troice, et al. v. Proskauer Rose LLP, Roland en banc en banc Troice On March 19, 2014, the plaintiffs in Troice On March 25, 2014, the parties in Troice Janvey, et al. v. Willis of Colorado, Inc., et al. Troice Janvey On September 16, 2014, the court (a) denied the plaintiffs’ request to defer resolution of the defendants’ motions to dismiss, but granted the plaintiffs’ request to enter a scheduling order; (b) requested the submission of supplemental briefing by all parties on the defendants’ motions to dismiss, which the parties submitted on September 30, 2014; and (c) entered an order setting a schedule for briefing and discovery regarding plaintiffs’ motion for class certification, which schedule, among other things, provided for the submission of the plaintiffs’ motion for class certification (following the completion of briefing and discovery) on April 20, 2015. On December 15, 2014, the court granted in part and denied in part the defendants’ motions to dismiss. On January 30, 2015, the defendants except Willis Group Holdings plc answered the Third Amended Class Action Complaint. On April 20, 2015, the plaintiffs filed their motion for class certification, the defendants filed their opposition to plaintiffs’ motion, and the plaintiffs filed their reply in further support of the motion. Pursuant to an agreed stipulation also filed with the court on April 20, 2015, the defendants on June 4, 2015 filed sur-replies in further opposition to the motion. The Court has not yet scheduled a hearing on the motion. On June 19, 2015, Willis Group Holdings plc filed a motion to dismiss the complaint for lack of personal jurisdiction. On November 17, 2015, Willis Group Holdings plc withdrew the motion. On March 31, 2016, the parties in the Troice Janvey • Ranni v. Willis of Colorado, Inc., et al., C.A. No. 9-22085, was filed on July 17, 2009 against Willis Group Holdings plc and Willis of Colorado, Inc. in the U.S. District Court for the Southern District of Florida. The complaint was filed on behalf of a putative class of Venezuelan and other South American Stanford investors and alleges claims under Section 10(b) of the Securities Exchange Act of 1934 (and Rule 10b-5 thereunder) and Florida statutory and common law and seeks damages in an amount to be determined at trial. On October 6, 2009, Ranni was transferred, for consolidation or coordination with other Stanford-related actions (including Troice ), to the Northern District of Texas by the U.S. Judicial Panel on Multidistrict Litigation (the ‘JPML’). The defendants have not yet responded to the complaint in Ranni . On August 26, 2014, the plaintiff filed a notice of voluntary dismissal of the action without prejudice. • Canabal, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:9-CV-1474-D, was filed on August 6, 2009 against Willis Group Holdings plc, Willis of Colorado, Inc. and the same Willis associate named as a defendant in Troice , among others, also in the Northern District of Texas. The complaint was filed individually and on behalf of a putative class of Venezuelan Stanford investors, alleged claims under Texas statutory and common law and sought damages in excess of $1 billion, punitive damages, attorneys’ fees and costs. On December 18, 2009, the parties in Troice and Canabal stipulated to the consolidation of those actions (under the Troice civil action number), and, on December 31, 2009, the plaintiffs in Canabal filed a notice of dismissal, dismissing the action without prejudice. • Rupert, et al. v. Winter, et al., Case No. 2009C115137, was filed on September 14, 2009 on behalf of 97 Stanford investors against Willis Group Holdings plc, Willis of Colorado, Inc. and the same Willis associate, among others, in Texas state court (Bexar County). The complaint alleges claims under the Securities Act of 1933, Texas and Colorado statutory law and Texas common law and seeks special, consequential and treble damages of more than $300 million, attorneys’ fees and costs. On October 20, 2009, certain defendants, including Willis of Colorado, Inc., (i) removed Rupert to the U.S. District Court for the Western District of Texas, (ii) notified the JPML of the pendency of this related action and (iii) moved to stay the action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. On April 1, 2010, the JPML issued a final transfer order for the transfer of Rupert to the Northern District of Texas. On January 24, 2012, the court remanded Rupert to Texas state court (Bexar County), but stayed the action until further order of the court. On August 13, 2012, the plaintiffs filed a motion to lift the stay, which motion was denied by the court on September 16, 2014. On October 10, 2014, the plaintiffs appealed the court’s denial of their motion to lift the stay to the U.S. Court of Appeals for the Fifth Circuit. On January 5, 2015, the Fifth Circuit consolidated the appeal with the appeal in the Rishmague, et ano. v. Winter, et al. action discussed below, and the consolidated appeal, was fully briefed as of March 24, 2015. Oral argument on the consolidated appeal was held on September 2, 2015. On September 16, 2015, the Fifth Circuit affirmed. The defendants have not yet responded to the complaint in Rupert . • Casanova, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:10-CV-1862-O, was filed on September 16, 2010 on behalf of seven Stanford investors against Willis Group Holdings plc, Willis Limited, Willis of Colorado, Inc. and the same Willis associate, among others, also in the Northern District of Texas. The complaint alleges claims under Texas statutory and common law and seeks actual damages in excess of $5 million, punitive damages, attorneys’ fees and costs. On February 13, 2015, the parties filed an Agreed Motion for Partial Dismissal pursuant to which they agreed to the dismissal of certain claims pursuant to the motion to dismiss decisions in the Troice action discussed above and the Janvey action discussed below. Also on February 13, 2015, the defendants except Willis Group Holdings plc answered the complaint in the Casanova action. On June 19, 2015, Willis Group Holdings plc filed a motion to dismiss the complaint for lack of personal jurisdiction. Plaintiffs have not opposed the motion. • Rishmague, et ano. v. Winter, et al., Case No. 2011CI2585, was filed on March 11, 2011 on behalf of two Stanford investors, individually and as representatives of certain trusts, against Willis Group Holdings plc, Willis of Colorado, Inc., Willis of Texas, Inc. and the same Willis associate, among others, in Texas state court (Bexar County). The complaint alleges claims under Texas and Colorado statutory law and Texas common law and seeks special, consequential and treble damages of more than $37 million and attorneys’ fees and costs. On April 11, 2011, certain defendants, including Willis of Colorado, Inc., (i) removed Rishmague to the Western District of Texas, (ii) notified the JPML of the pendency of this related action and (iii) moved to stay the action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. On August 8, 2011, the JPML issued a final transfer order for the transfer of Rishmague to the Northern District of Texas, where it is currently pending. On August 13, 2012, the plaintiffs joined with the plaintiffs in the Rupert action in their motion to lift the court’s stay of the Rupert action. On September 9, 2014, the court remanded Rishmague to Texas state court (Bexar County), but stayed the action until further order of the court and denied the plaintiffs’ motion to lift the stay. On October 10, 2014, the plaintiffs appealed the court’s denial of their motion to lift the stay to the Fifth Circuit. On January 5, 2015, the Fifth Circuit consolidated the appeal with the appeal in the Rupert action, and the consolidated appeal was fully briefed as of March 24, 2015. Oral argument on the consolidated appeal was held on September 2, 2015. On September 16, 2015, the Fifth Circuit affirmed. The defendants have not yet responded to the complaint in Rishmague . • MacArthur v. Winter, et al., Case No. 2013-07840, was filed on February 8, 2013 on behalf of two Stanford investors against Willis Group Holdings plc, Willis of Colorado, Inc., Willis of Texas, Inc. and the same Willis associate, among others, in Texas state court (Harris County). The complaint alleges claims under Texas and Colorado statutory law and Texas common law and seeks actual, special, consequential and treble damages of approximately $4 million and attorneys’ fees and costs. On March 29, 2013, Willis of Colorado, Inc. and Willis of Texas, Inc. (i) removed MacArthur to the U.S. District Court for the Southern District of Texas and (ii) notified the JPML of the pendency of this related action. On April 2, 2013, Willis of Colorado, Inc. and Willis of Texas, Inc. filed a motion in the Southern District of Texas to stay the action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. Also on April 2, 2013, the court presiding over MacArthur in the Southern District of Texas transferred the action to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. On September 29, 2014, the parties stipulated to the remand (to Texas state court (Harris County)) and stay of MacArthur until further order of the court (in accordance with the court’s September 9, 2014 decision in Rishmague (discussed above)), which stipulation was ‘so ordered’ by the court on October 14, 2014. The defendants have not yet responded to the complaint in MacArthur . • Florida suits : On February 14, 2013, five lawsuits were filed against Willis Group Holdings plc, Willis Limited and Willis of Colorado, Inc. in Florida state court (Miami-Dade County), alleging violations of Florida common law. The five suits are: (1) Barbar, et al. v. Willis Group Holdings Public Limited Company, et al. , Case No. 13-05666CA27, filed on behalf of 35 Stanford investors seeking compensatory damages in excess of $ 30 million; (2) de Gadala-Maria, et al. v. Willis Group Holdings Public Limited Company, et al. , Case No. 13-05669CA30, filed on behalf of 64 Stanford investors seeking compensatory damages in excess of $ 83.5 million; (3) Ranni, et ano. v. Willis Group Holdings Public Limited Company, et al. , Case No. 13-05673CA06, filed on behalf of two Stanford investors seeking compensatory damages in excess of $ 3 million; (4) Tisminesky, et al. v. Willis Group Holdings Public Limited Company, et al. , Case No. 13-05676CA09, filed on behalf of 11 Stanford investors seeking compensatory damages in excess of $ 6.5 million; and (5) Zacarias, et al. v. Willis Group Holdings Public Limited Company, et al. , Case No. 13-05678CA11, filed on behalf of 10 Stanford investors seeking compensatory damages in excess of $ 12.5 million. On June 3, 2013, Willis of Colorado, Inc. removed all five cases to the Southern District of Florida and, on June 4, 2013, notified the JPML of the pendency of these related actions. On June 10, 2013, the court in Tisminesky issued an order sua sponte staying and administratively closing that action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation and coordination with the other Stanford-related actions. On June 11, 2013, Willis of Colorado, Inc. moved to stay the other four actions pending the JPML’s transfer decision. On June 20, 2013, the JPML issued a conditional transfer order for the transfer of the five actions to the Northern District of Texas, the transmittal of which was stayed for seven days to allow for any opposition to be filed. On June 28, 2013, with no opposition having been filed, the JPML lifted the stay, enabling the transfer to go forward. On September 30, 2014, the court denied the plaintiffs’ motion to remand in Zacarias Tisminesky de Gadala Maria Barbar Ranni Barbar Ranni Barbar Ranni sua sponte Ranni Barbar On April 1, 2015, the defendants except Willis Group Holdings plc filed motions to dismiss the complaints in Zacarias Tisminesky de Gadala-Maria Zacarias Tisminesky de Gadala-Maria Zacarias Tisminesky de Gadala-Maria 21 days Zacarias Tisminesky de Gadala-Maria • Janvey, et al. v. Willis of Colorado, Inc., et al. , Case No. 3:13-CV-03980-D, was filed on October 1, 2013 also in the Northern District of Texas against Willis Group Holdings plc, Willis Limited, Willis North America Inc., Willis of Colorado, Inc. and the same Willis associate. The complaint was filed (i) by Ralph S. Janvey, in his capacity as Court-Appointed Receiver for the Stanford Receivership Estate, and the Official Stanford Investors Committee (the ‘OSIC’) against all defendants and (ii) on behalf of a putative, worldwide class of Stanford investors against Willis North America Inc. Plaintiffs Janvey and the OSIC allege claims under Texas common law and the court’s Amended Order Appointing Receiver, and the putative class plaintiffs allege claims under Texas statutory and common law. Plaintiffs seek actual damages in excess of $1 billion, punitive damages and costs. As alleged by the Stanford Receiver, the total amount of collective losses allegedly sustained by all investors in Stanford certificates of deposit is approximately $4.6 billion. On November 15, 2013, plaintiffs in Janvey As discussed above, on March 25, 2014, the parties in Troice Janvey Troice Janvey On January 26, 2015, the court entered an order setting a schedule for briefing and discovery regarding the plaintiffs’ motion for class certification, which schedule, among other things, provided for the submission of the plaintiffs’ motion for class certification (following the completion of briefing and discovery) on July 20, 2015. By letter dated March 4, 2015, the parties requested that the court consolidate the scheduling orders entered in Troice Janvey orders in Troice and Janvey , providing for a class certification submission date of April 20, 2015 in both cases, and vacating the July 20, 2015 class certification submission date in the original Janvey scheduling order. On November 17, 2015, Willis Group Holdings plc withdrew its motion to dismiss for lack of personal jurisdiction. On March 31, 2016, the parties in the Troice Janvey • Martin v. Willis of Colorado, Inc., et al. , Case No. 201652115, was filed on August 5, 2016, on behalf of one Stanford investor against Willis Group Holdings plc, Willis Limited, Willis of Colorado, Inc. and the same Willis associate in Texas state court (Harris County). The complaint alleges claims under Texas statutory and common law and seeks actual damages of less than $100,000, exemplary damages, attorneys’ fees and costs. On September 12, 2016, the plaintiff filed an amended complaint, which added five more Stanford investors as plaintiffs and seeks damages in excess of $1 million. The defendants have not yet responded to the amended complaint in Martin . • Abel, et al. v. Willis of Colorado, Inc., et al ., C.A. No. 3:16-cv-2601, was filed on September 12, 2016, on behalf of more than 300 Stanford investors against Willis Group Holdings plc, Willis Limited, Willis of Colorado, Inc. and the same Willis associate, also in the Northern District of Texas. The complaint alleges claims under Texas statutory and common law and seeks actual damages in excess of $135 million, exemplary damages, attorneys’ fees and costs. On November 10, 2016, the plaintiffs filed an amended complaint, which, among other things, added several more Stanford investors as plaintiffs. The defendants have not yet responded to the complaint in Abel . The plaintiffs in Janvey Troice On March 31, 2016, the Company entered into a settlement in principle for $120 million relating to this litigation, and increased its provisions by $50 million during that quarter. Further details on this settlement in principle are given below. The settlement is contingent on a number of conditions, including court approval of the settlement and a bar order prohibiting any continued or future litigation against Willis related to Stanford, which may not be given. Therefore, the ultimate resolution of these matters may differ from the amount provided for. The Company continues to dispute the allegations and, to the extent litigation proceeds, to defend the lawsuits vigorously. Settlement . On March 31, 2016, the Company entered into a settlement in principle, as reflected in a Settlement Term Sheet, relating to the Stanford litigation matter. The Company agreed to the Settlement Term Sheet to eliminate the distraction, burden, expense and uncertainty of further litigation. In particular, the settlement and the related bar orders described below, if upheld through any appeals, would enable the Company (a newly-combined firm) to conduct itself with the bar orders’ protection from the continued overhang of matters alleged to have occurred approximately a decade ago. Further, the Settlement Term Sheet provided that the parties understood and agreed that there is no admission of liability or wrongdoing by the Company. The Company expressly denies any liability or wrongdoing with respect to the matters alleged in the Stanford litigation. On or about August 31, 2016, the parties to the settlement signed a formal Settlement Agreement memorializing the terms of the settlement as originally set forth in the Settlement Term Sheet. The parties to the Settlement Agreement are Ralph S. Janvey (in his capacity as the Court-appointed receiver (the ‘Receiver’) for The Stanford Financial Group and its affiliated entities in receivership (collectively, ‘Stanford’)), the Official Stanford Investors Committee, Samuel Troice, Martha Diaz, Paula Gilly-Flores, Punga Punga Financial, Ltd., Manuel Canabal, Daniel Gomez Ferreiro and Promotora Villa Marina, C.A. (collectively, ‘Plaintiffs’), on the one hand, and Willis Towers Watson Public Limited Company (formerly Willis Group Holdings Public Limited Company), Willis Limited, Willis North America Inc., Willis of Colorado, Inc. and the Willis associate referenced above (collectively, ‘Defendants’), on the other hand. Under the terms of the Settlement Agreement, the parties agreed to settle and dismiss the Janvey Troice The Settlement Agreement also provides the parties’ agreement to seek the Court’s entry of bar orders prohibiting any continued or future litigation against the Defendants and their related parties of claims relating to Stanford, whether asserted to date or not. The terms of the bar orders therefore would prohibit all Stanford-related litigation described above, and not just the Actions, but including any pending matters and any actions that may be brought in the future. Final Court approval of these bar orders is a condition of the settlement. On September 7, 2016, Plaintiffs filed with the Court a motion to approve the settlement. On October 19, 2016, the Court preliminarily approved the settlement. Several of the plaintiffs in the other actions above objected to the settlement, and a hearing to consider final approval of the settlement was held on January 20, 2017, after which the Court reserved decision. On August 23, 2017, the Court approved the settlement, including the bar orders. Several of the objectors appealed the settlement approval and bar orders to the Fifth Circuit. Oral argument on the appeals was heard on December 3, 2018, and, on July 22, 2019, the Fifth Circuit affirmed the approval of the settlement, including the bar orders. On August 5, 2019, certain of the plaintiff-appellants filed a petition for rehearing by the Fifth Circuit en banc (the ‘Petition’). On August 19, 2019, the Fifth Circuit requested a response to the Petition. On August 29, 2019, the Receiver filed a response to the Petition. On December 19, 2019, the Fifth Circuit granted the Petition (treating it as a petition for panel rehearing), withdrew its July 22, 2019 opinion, and substituted a new opinion that also affirmed the approval of the settlement, including the bar orders. On January 2, 2020, certain of the plaintiff-appellants filed another petition for rehearing by the Fifth Circuit en banc (the ‘Second Petition’), in which the other plaintiff-appellants joined. On January 21, 2020, the Fifth Circuit denied the Second Petition. The Company will not make the $120 million settlement payment until the settlement is not subject to any further appeal. Aviation Broking Competition Investigations In October 2017, the European Commission (‘Commission’) disclosed to us that it has initiated civil investigation proceedings in respect of a suspected infringement of E.U. competition rules involving several broking firms, including our principal U.K. broking subsidiary and one of its parent entities. In particular, the Commission has stated that the civil proceedings concern the exchange of commercially sensitive information between competitors in relation to aviation and aerospace insurance and reinsurance broking products and services in the European Economic Area, as well as possible coordination between competitors. The initiation of proceedings does not mean there has been a finding of infringement, merely that the Commission will investigate the case. We are providing information to the Commission as requested. Since 2017, we have become aware that other countries are conducting their own investigations of the same or similar alleged conduct, including, without limitation, Brazil. In January 2019, the Brazil Conselho Administrativo de Defesa Economica (‘CADE’) launched an administrative proceeding to investigate alleged sharing of competitive and commercially sensitive information in the insurance and reinsurance brokerage industry for aviation and aerospace and related ancillary services. The CADE identified 11 entities under investigation, including Willis Group Limited, one of our U.K. subsidiaries. Given the status of the above-noted investigations, the Company is currently unable to assess the terms on which they will be resolved, or any other regulatory matter or civil claims emanating from the conduct being investigated, will be resolved, and thus is unable to provide an estimate of the reasonably possible loss or range of loss. |
Supplementary Information for C
Supplementary Information for Certain Balance Sheet Accounts | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Supplementary Information for Certain Balance Sheet Accounts | Note 14 — Supplementary Information for Certain Balance Sheet Accounts Additional details of specific balance sheet accounts are detailed below. Prepaid and other current assets consist of the following: March 31, 2020 December 31, 2019 Prepayments and accrued income $ 166 $ 145 Deferred contract costs 72 101 Derivatives and investments 25 49 Deferred compensation plan assets 14 18 Retention incentives 9 11 Corporate income and other taxes 52 56 Restricted cash 8 8 Acquired renewal commissions receivable 23 25 Other current assets 100 112 Total prepaid and other current assets $ 469 $ 525 Deferred revenue and accrued expenses consist of the following: March 31, 2020 December 31, 2019 Accounts payable, accrued liabilities and deferred income $ 854 $ 856 Accrued discretionary and incentive compensation 265 727 Accrued vacation 163 137 Other employee-related liabilities 47 64 Total deferred revenue and accrued expenses $ 1,329 $ 1,784 Provision for liabilities consists of the following: March 31, 2020 December 31, 2019 Claims, lawsuits and other proceedings $ 459 $ 456 Other provisions 82 81 Total provision for liabilities $ 541 $ 537 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Note 15 — Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss, net of non-controlling interests, and net of tax are provided in the following tables for the three months ended March 31, 2020 and 2019. These tables exclude amounts attributable to non-controlling interests, which are not material for further disclosure. Foreign currency translation (i) Derivative instruments (i) Defined pension and post-retirement benefit costs (ii) Total 2020 2019 2020 2019 2020 2019 2020 2019 Balance at December 31, 2019 and 2018, respectively $ (538 ) $ (616 ) $ 13 $ (8 ) $ (1,702 ) $ (1,337 ) $ (2,227 ) $ (1,961 ) Other comprehensive (loss)/income before reclassifications (208 ) 9 (19 ) 6 (4 ) 1 (231 ) 16 Loss reclassified from accumulated other comprehensive loss (net of income tax benefit of $0 and $4, respectively) — — 1 5 11 2 12 7 Net current-period other comprehensive (loss)/income (208 ) 9 (18 ) 11 7 3 (219 ) 23 Reclassification of tax effects per ASU 2018-02 (iii) — — — — — (36 ) — (36 ) Balance at March 31, 2020 and 2019, respectively $ (746 ) $ (607 ) $ (5 ) $ 3 $ (1,695 ) $ (1,370 ) $ (2,446 ) $ (1,974 ) (i) Reclassification adjustments from accumulated other comprehensive loss related to derivative instruments are included in Revenue and Salaries and benefits in the accompanying condensed consolidated statements of comprehensive income. See Note 8 — Derivative Financial Instruments for additional details regarding the reclassification adjustments for the derivative settlements. (ii) Reclassification adjustments from accumulated other comprehensive loss are included in the computation of net periodic pension cost (see Note 11 — Retirement Benefits). These components are included in Other income, net in the accompanying condensed consolidated statements of comprehensive income. (iii) On January 1, 2019, in accordance with ASU 2018-02, we reclassified to Retained earnings $36 million of defined pension and postretirement costs, representing the ‘stranded’ tax effect of the change in the U.S. federal corporate tax rate resulting from U.S. Tax Reform. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 16 — Earnings Per Share Basic and diluted earnings per share are calculated by dividing net income attributable to Willis Towers Watson by the average number of ordinary shares outstanding during each period. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or converted into shares or resulted in the issuance of shares that then shared in the net income of the Company. At March 31, 2020 and 2019, there were 0.2 million and 0.3 million time-based share options; 0.3 million and 0.4 million performance-based options; and 0.3 million and 0.5 million restricted performance-based stock units outstanding, respectively. The Company’s restricted time-based stock units were immaterial at March 31, 2020 and 2019. Basic and diluted earnings per share are as follows: Three Months Ended March 31, 2020 2019 Net income attributable to Willis Towers Watson $ 305 $ 287 Basic average number of shares outstanding 130 130 Dilutive effect of potentially issuable shares — — Diluted average number of shares outstanding 130 130 Basic earnings per share $ 2.36 $ 2.21 Dilutive effect of potentially issuable shares (0.02 ) (0.01 ) Diluted earnings per share $ 2.34 $ 2.20 There were no anti-dilutive options or restricted stock units for the three months ended March 31, 2020 and 2019. |
Basis of Presentation and Rec_2
Basis of Presentation and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited quarterly condensed consolidated financial statements of Willis Towers Watson and our subsidiaries are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial statements and results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements should be read together with the Company’s Annual Report on Form 10-K, filed with the SEC on February 26, 2020, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities. The results reflect certain estimates and assumptions made by management, including those estimates used in calculating acquisition consideration and fair value of tangible and intangible assets and liabilities, professional liability claims, estimated bonuses, valuation of billed and unbilled receivables, and anticipated tax liabilities that affect the amounts reported in the condensed consolidated financial statements and related notes. |
Risks and Uncertainties Related to the COVID-19 Pandemic | Risks and Uncertainties Related to the COVID-19 Pandemic The COVID-19 pandemic has had an adverse impact on global commercial activity, including the global supply chain, and has contributed to significant volatility in the financial markets including, among other effects, a decline in the equity markets and reduced liquidity. In light of the potential future disruption to our own business operations and those of our clients, suppliers and other third parties with whom we interact, the Company considered the impact of COVID-19 on our business. This analysis considered our business resilience and continuity plans, financial modeling and stress testing of liquidity and financial resources. The analysis concluded that the COVID-19 pandemic did not have a material adverse impact to our financial results for the first quarter of fiscal 2020; however, we expect that the impact of COVID-19 on general economic activity could negatively impact our revenue and operating results for the remainder of 2020. We will continue to monitor the situation and assess possible implications to our business and our stakeholders and will take appropriate actions to help mitigate adverse consequences. The extent to which COVID-19 impacts our business and financial position will depend on future developments, which are difficult to predict, including the severity and scope of the COVID-19 outbreak as well as the types of measures imposed by governmental authorities to contain the virus or address its impact and the duration of those actions and measures. The Company has considered multiple scenarios, with both positive and negative inputs, as part of the significant estimates and assumptions that are inherent in our financial statements and are based on trends in client behavior and the economic environment throughout the quarter as COVID-19 has moved throughout the geographies in which we operate. These estimates and assumptions include the collectability of billed and unbilled receivables, the estimation of revenue, and the fair value of our reporting units, tangible and intangible assets and contingent consideration. With regard to collectability, the Company believes it will face atypical delays in client payments going forward. In addition, we believe that the demand for certain discretionary lines of business may decrease, and that such decrease will impact our financial results in succeeding periods. Non-discretionary lines of business may also be adversely affected, for example because reduced economic activity or disruption in insurance markets reduces demand for or the extent of insurance coverage. We believe that these trends and uncertainties are comparable to those faced by other registrants as a result of the pandemic. CARES Act On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (‘CARES’) Act was enacted in the U.S. to provide relief to companies in the midst of the COVID-19 pandemic and to stimulate the economy. The assistance includes tax relief and government loans, grants and investments for entities in affected industries. The Company has reviewed its eligibility requirements under the key provisions of the CARES Act, including if and how they apply and how they will affect the Company, particularly provisions that (i) eliminate the taxable income limit for certain net operating losses (‘NOLs’) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior tax years; (ii) generally loosen the business interest limitation under section 163(j) from 30 percent to 50 percent; and (iii) fix the ‘retail glitch’ for qualified improvement property. Additionally, the CARES Act offers an employee retention credit to encourage employers to maintain headcounts even if employees cannot report to work because of issues related to COVID-19 as well as a temporary provision allowing companies to defer remitting the employer share of some payroll taxes to the government. T |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, provide d amended and additional guidance for the implementation of ASU No. 2016-13. All related guidance has been codified into, and is now known as, ASC 326, Financial Instruments— Credit Losses (‘ASC 326’). ASC 326 became effective for the Company on January 1, 2020, at which time we adopted it. This ASU did not have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In March 2020, the SEC issued a final rule that amends the disclosure requirements related to certain registered securities under SEC Regulation S-X, Rules 3-10 and 3-16 which currently require separate financial statements for subsidiary issuers and guarantors of registered debt securities unless certain exceptions are met, and affiliates that collateralize registered securities offerings if the affiliates’ securities are a substantial portion of the collateral. The final rule is generally effective for filings on or after January 4, 2021, however early application is permitted. The most pertinent portions of the final rule that are currently applicable to the Company include: (i) replacing the previous requirement under Rule 3-10 to provide condensed consolidating financial information in the registrant’s financial statements with a requirement to provide alternative financial disclosures (which include summarized Management’s Discussion and Analysis of Financial Condition and Results of Operations In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Basis of Presentation, Signific
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Fair Value of Financial Instruments | The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, based on the reliability of the inputs used to determine fair value as follows: • Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets; • Level 2: refers to fair values estimated using observable market-based inputs or unobservable inputs that are corroborated by market data; and • Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data. The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments: • Available-for-sale securities are classified as Level 1 because we use quoted market prices in determining the fair value of these securities. • Market values for our derivative instruments have been used to determine the fair value of forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account observable information about the current foreign currency forward rates. Such financial instruments are classified as Level 2 in the fair value hierarchy. • Contingent consideration payable is classified as Level 3, and we estimate fair value based on the likelihood and timing of achieving the relevant milestones of each arrangement, applying a probability assessment to each of the potential outcomes, which at times includes the use of a Monte Carlo simulation, and discounting the probability-weighted payout. Typically, milestones are based on revenue or earnings growth for the acquired business. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Summary of Preliminary Fair Values of Identifiable Assets Acquired and Liabilities Assumed | A summary of the preliminary fair values of the identifiable assets acquired, and liabilities assumed, of TRANZACT at July 30, 2019 are summarized in the following table. Cash and cash equivalents $ 7 Restricted cash 2 Accounts receivable, net 3 Renewal commissions receivable, current (i) 36 Prepaid and other current assets 22 Renewal commissions receivable, non-current (i) 130 Fixed assets 9 Intangible assets 646 Goodwill 722 Right-of-use assets 19 Other non-current assets 2 Collateralized facility (91 ) Other current liabilities (55 ) Deferred tax liabilities, net (104 ) Lease liabilities (19 ) Net assets acquired $ 1,329 ______________ (i) Renewal commissions receivables arise from direct-to-consumer Medicare broking sales. Cash collections for these receivables are expected to occur over a period of several years. Due to the provisions of ASC 606, these receivables are not discounted for a significant financing component when initially recognized. However, as a result of recognizing the fair value of these receivables in accordance with ASC 805, Business Combinations |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregation of Revenue | The following table presents revenue by service offering and segment, as well as a reconciliation to total revenue for the three months ended March 31, 2020 and 2019. Along with reimbursable expenses and other, total revenue by service offering represents our revenue from customer contracts. Three Months Ended March 31, HCB CRB IRR BDA Corporate (i) Total 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 Broking $ 83 $ 73 $ 648 $ 660 $ 433 $ 405 $ 98 $ 3 $ — $ — $ 1,262 $ 1,141 Consulting 582 580 47 31 93 114 — — 2 3 724 728 Outsourced administration 128 123 25 27 3 2 133 132 — — 289 284 Other 47 47 1 1 83 58 — — 1 1 132 107 Total revenue by service offering 840 823 721 719 612 579 231 135 3 4 2,407 2,260 Reimbursable expenses and other (i) 15 14 — — 3 2 3 3 6 7 27 26 Total revenue from customer contracts $ 855 $ 837 $ 721 $ 719 $ 615 $ 581 $ 234 $ 138 $ 9 $ 11 $ 2,434 $ 2,286 Interest and other income (ii) 10 6 18 9 3 10 — — 1 1 32 26 Total revenue $ 865 $ 843 $ 739 $ 728 $ 618 $ 591 $ 234 $ 138 $ 10 $ 12 $ 2,466 $ 2,312 ______________ ( i ) Reimbursable expenses and other, as well as Corporate revenue, are excluded from segment revenue, but included in total revenue on the condensed consolidated statements of comprehensive income. ( i i ) Interest and other income is included in segment revenue and total revenue, however it has been presented separately in the above tables because it does not arise directly from contracts with customers. Individual revenue streams aggregating to approximately 5% of total revenue from customer contracts for the three months ended March 31, 2020 and 2019 have been included within the Other line in the tables above. The following table presents revenue by the geography where our work is performed for the three months ended March 31, 2020 and 2019. The reconciliation to total revenue on our condensed consolidated statements of comprehensive income and to segment revenue is shown in the table above. Three Months Ended March 31, HCB CRB IRR BDA Corporate Total 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 North America $ 476 $ 471 $ 233 $ 220 $ 170 $ 164 $ 229 $ 135 $ 2 $ 4 $ 1,110 $ 994 Great Britain 126 118 137 142 321 300 — — — — 584 560 Western Europe 156 155 244 239 76 69 — — 1 — 477 463 International 82 79 107 118 45 46 2 — — — 236 243 Total revenue by geography $ 840 $ 823 $ 721 $ 719 $ 612 $ 579 $ 231 $ 135 $ 3 $ 4 $ 2,407 $ 2,260 |
Contract with Customer, Asset and Liability | The Company reports accounts receivable, net on the condensed consolidated balance sheet, which includes billed and unbilled receivables and current contract assets. In addition to accounts receivable, net, the Company had the following non-current contract assets and deferred revenue balances at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Billed receivables, net of allowance for doubtful accounts of $55 million and $37 million $ 1,870 $ 1,831 Unbilled receivables 442 434 Current contract assets 282 356 Accounts receivable, net $ 2,594 $ 2,621 Non-current accounts receivable, net $ 27 $ 30 Non-current contract assets $ 140 $ 105 Deferred revenue $ 562 $ 538 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | In addition, in accordance with ASC 606, Revenue From Contracts With Customers • Performance obligations which are part of a contract that has an original expected duration of less than one year, and • Performance obligations satisfied in accordance with ASC 606-10-55-18 (‘right to invoice’). Remainder of 2020 2021 2022 onward Total Revenue expected to be recognized on contracts as of March 31, 2020 $ 384 $ 400 $ 483 $ 1,267 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents segment revenue and segment operating income for our reportable segments for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, HCB CRB IRR BDA Total 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 Segment revenue $ 850 $ 829 $ 739 $ 728 $ 615 $ 589 $ 231 $ 135 $ 2,435 $ 2,281 Segment operating income/(loss) $ 213 $ 204 $ 127 $ 127 $ 277 $ 252 $ (11 ) $ (21 ) $ 606 $ 562 |
Net Operating Income of the Reported Segments | The following table presents a reconciliation of the information reported by segment to the Company’s condensed consolidated statement of comprehensive income amounts reported for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, 2020 2019 Revenue: Total segment revenue $ 2,435 $ 2,281 Reimbursable expenses and other 31 31 Revenue $ 2,466 $ 2,312 Total segment operating income $ 606 $ 562 Amortization (121 ) (127 ) Transaction and integration expenses (i) (9 ) (6 ) Unallocated, net (ii) (116 ) (70 ) Income from operations 360 359 Interest expense (61 ) (54 ) Other income, net 92 55 Income from operations before income taxes $ 391 $ 360 (i) Includes transaction costs related to the proposed Aon combination and TRANZACT acquisition in 2019. (ii) Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Goodwill | The components of goodwill are outlined below for the three months ended March 31, 2020: HCB CRB IRR BDA Total Balance at December 31, 2019: Goodwill, gross $ 4,298 $ 2,309 $ 1,795 $ 3,284 $ 11,686 Accumulated impairment losses (130 ) (362 ) — — (492 ) Goodwill, net - December 31, 2019 4,168 1,947 1,795 3,284 11,194 Goodwill acquired 14 27 — — 41 Acquisition accounting adjustment — — — (5 ) (5 ) Foreign exchange (27 ) (21 ) (20 ) — (68 ) Balance at March 31, 2020: Goodwill, gross 4,285 2,315 1,775 3,279 11,654 Accumulated impairment losses (130 ) (362 ) — — (492 ) Goodwill, net - March 31, 2020 $ 4,155 $ 1,953 $ 1,775 $ 3,279 $ 11,162 |
Changes in the Net Carrying Amount of the Components of Finite-Lived Intangible Assets | The following table reflects changes in the net carrying amounts of the components of finite-lived intangible assets for the three months ended March 31, 2020: Client relationships Software Trademark and trade name Other Total Balance at December 31, 2019: Intangible assets, gross $ 4,029 $ 753 $ 1,051 $ 134 $ 5,967 Accumulated amortization (1,731 ) (551 ) (176 ) (31 ) (2,489 ) Intangible assets, net - December 31, 2019 2,298 202 875 103 3,478 Intangible assets acquired 23 — — 23 46 Amortization (77 ) (26 ) (10 ) (8 ) (121 ) Foreign exchange (40 ) — — (3 ) (43 ) Balance at March 31, 2020: Intangible assets, gross 3,974 743 1,051 151 5,919 Accumulated amortization (1,770 ) (567 ) (186 ) (36 ) (2,559 ) Intangible assets, net - March 31, 2020 $ 2,204 $ 176 $ 865 $ 115 $ 3,360 |
Schedule of Future Estimated Amortization Expense for Amortizable Intangible Assets | The table below reflects the future estimated amortization expense for amortizable intangible assets for the remainder of 2020 and for subsequent years: Amortization Remainder of 2020 $ 331 2021 373 2022 315 2023 267 2024 235 Thereafter 1,839 Total $ 3,360 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Designated [Member] | |
Schedule of Derivative Instruments Designated/Nondesignated As Hedging Instrument Effect on Condensed Consolidated Statements of Comprehensive Income | The effects of the material derivative instruments that are designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019 are below Three Months Ended March 31, (Loss)/gain recognized in OCI (effective element) 2020 2019 Forward exchange contracts $ (24 ) $ 8 Location of gain/(loss) reclassified from Accumulated OCL into income (effective element) Gain/(loss) reclassified from Accumulated OCL into income (effective element) 2020 2019 Revenue $ — $ 1 Salaries and benefits (2 ) (5 ) $ (2 ) $ (4 ) |
Nondesignated [Member] | |
Schedule of Derivative Instruments Designated/Nondesignated As Hedging Instrument Effect on Condensed Consolidated Statements of Comprehensive Income | The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019 are as follows: Loss recognized in income Three Months Ended March 31, Derivatives not designated as hedging instruments: Location of loss recognized in income 2020 2019 Forward exchange contracts Other income, net $ (12 ) $ (10 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Current and Long-term Debt | Current debt consists of the following: March 31, 2020 December 31, 2019 Term loan due 2020 $ 174 $ 292 Current portion of collateralized facility 24 24 5.750% senior notes due 2021 499 — $ 697 $ 316 Long-term debt consists of the following: March 31, 2020 December 31, 2019 Revolving $1.25 billion credit facility $ 396 $ — Collateralized facility (i) 53 60 5.750% senior notes due 2021 — 499 3.500% senior notes due 2021 448 448 2.125% senior notes due 2022 (ii) 590 604 4.625% senior notes due 2023 249 249 3.600% senior notes due 2024 646 646 4.400% senior notes due 2026 546 546 4.500% senior notes due 2028 595 595 2.950% senior notes due 2029 446 446 6.125% senior notes due 2043 271 271 5.050% senior notes due 2048 395 395 3.875% senior notes due 2049 542 542 $ 5,177 $ 5,301 (i) At March 31, 2020 and December 31, 2019, the Company had $119 million and $127 million, respectively, of renewal commissions receivables pledged as collateral for this facility. (ii) Notes issued in Euro (€540 million) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present our assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: Fair Value Measurements on a Recurring Basis at March 31, 2020 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities: Mutual funds / exchange traded funds Prepaid and other current assets and other non-current assets $ 6 $ — $ — $ 6 Derivatives: Derivative financial instruments (i) Prepaid and other current assets and other non-current assets $ — $ 9 $ — $ 9 Liabilities: Contingent consideration: Contingent consideration (ii) Other current liabilities and other non-current liabilities $ — $ — $ 21 $ 21 Derivatives: Derivative financial instruments (i) Other current liabilities and other non-current liabilities $ — $ 18 $ — $ 18 Fair Value Measurements on a Recurring Basis at December 31, 2019 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities: Mutual funds / exchange traded funds Prepaid and other current assets and other non-current assets $ 20 $ — $ — $ 20 Derivatives: Derivative financial instruments (i) Prepaid and other current assets and other non-current assets $ — $ 32 $ — $ 32 Liabilities: Contingent consideration: Contingent consideration (ii) Other current liabilities and other non-current liabilities $ — $ — $ 17 $ 17 Derivatives: Derivative financial instruments (i) Other current liabilities and other non-current liabilities $ — $ 3 $ — $ 3 (i) See Note 8 — Derivative Financial Instruments for further information on our derivative investments. (ii) Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used on our material contingent consideration calculations were 9.80% and 10.16% at March 31, 2020 and December 31, 2019, respectively. The range of these discount rates was 6.98% - 13.00% at March 31, 2020. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable. |
Schedule of Change in Fair Value of Level 3 Liabilities | The following table summarizes the change in fair value of the Level 3 liabilities: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) March 31, 2020 Balance at December 31, 2019 $ 17 Obligations assumed 4 Payments — Realized and unrealized losses 1 Foreign exchange (1 ) Balance at March 31, 2020 $ 21 |
Schedule of Liabilities Whose Carrying Values Differ From the Fair Value and are Not Measured on a Recurring Basis | The following tables present our liabilities not measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Liabilities: Current debt $ 697 $ 704 $ 316 $ 319 Long-term debt $ 5,177 $ 5,290 $ 5,301 $ 5,694 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Benefit Cost | The following table sets forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension and PRW plans for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 U.S. U.K. Other PRW U.S. U.K. Other PRW Service cost $ 18 $ 4 $ 5 $ — $ 16 $ 4 $ 5 $ — Interest cost 33 18 4 1 40 24 4 1 Expected return on plan assets (73 ) (62 ) (8 ) — (64 ) (63 ) (7 ) — Amortization of net loss 9 6 — — 5 5 1 — Amortization of prior service credit — (4 ) — (1 ) — (4 ) — (1 ) Net periodic benefit (income)/cost $ (13 ) $ (38 ) $ 1 $ — $ (3 ) $ (34 ) $ 3 $ — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Costs Recorded in Condensed Consolidated Statements of Comprehensive Income | The following table presents lease costs recorded on our condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019, respectively: Three Months Ended March 31, 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 1 $ 1 Interest on lease liabilities 1 1 Operating lease cost 47 48 Short-term lease cost — — Variable lease cost 10 13 Sublease income (5 ) (4 ) Total lease cost, net $ 54 $ 59 |
Supplementary Information for_2
Supplementary Information for Certain Balance Sheet Accounts (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and other current assets consist of the following: March 31, 2020 December 31, 2019 Prepayments and accrued income $ 166 $ 145 Deferred contract costs 72 101 Derivatives and investments 25 49 Deferred compensation plan assets 14 18 Retention incentives 9 11 Corporate income and other taxes 52 56 Restricted cash 8 8 Acquired renewal commissions receivable 23 25 Other current assets 100 112 Total prepaid and other current assets $ 469 $ 525 |
Deferred Revenue and Accrued Liabilities | Deferred revenue and accrued expenses consist of the following: March 31, 2020 December 31, 2019 Accounts payable, accrued liabilities and deferred income $ 854 $ 856 Accrued discretionary and incentive compensation 265 727 Accrued vacation 163 137 Other employee-related liabilities 47 64 Total deferred revenue and accrued expenses $ 1,329 $ 1,784 |
Provisions for Liabilities | Provision for liabilities consists of the following: March 31, 2020 December 31, 2019 Claims, lawsuits and other proceedings $ 459 $ 456 Other provisions 82 81 Total provision for liabilities $ 541 $ 537 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive loss, net of non-controlling interests, and net of tax are provided in the following tables for the three months ended March 31, 2020 and 2019. These tables exclude amounts attributable to non-controlling interests, which are not material for further disclosure. Foreign currency translation (i) Derivative instruments (i) Defined pension and post-retirement benefit costs (ii) Total 2020 2019 2020 2019 2020 2019 2020 2019 Balance at December 31, 2019 and 2018, respectively $ (538 ) $ (616 ) $ 13 $ (8 ) $ (1,702 ) $ (1,337 ) $ (2,227 ) $ (1,961 ) Other comprehensive (loss)/income before reclassifications (208 ) 9 (19 ) 6 (4 ) 1 (231 ) 16 Loss reclassified from accumulated other comprehensive loss (net of income tax benefit of $0 and $4, respectively) — — 1 5 11 2 12 7 Net current-period other comprehensive (loss)/income (208 ) 9 (18 ) 11 7 3 (219 ) 23 Reclassification of tax effects per ASU 2018-02 (iii) — — — — — (36 ) — (36 ) Balance at March 31, 2020 and 2019, respectively $ (746 ) $ (607 ) $ (5 ) $ 3 $ (1,695 ) $ (1,370 ) $ (2,446 ) $ (1,974 ) (i) Reclassification adjustments from accumulated other comprehensive loss related to derivative instruments are included in Revenue and Salaries and benefits in the accompanying condensed consolidated statements of comprehensive income. See Note 8 — Derivative Financial Instruments for additional details regarding the reclassification adjustments for the derivative settlements. (ii) Reclassification adjustments from accumulated other comprehensive loss are included in the computation of net periodic pension cost (see Note 11 — Retirement Benefits). These components are included in Other income, net in the accompanying condensed consolidated statements of comprehensive income. (iii) On January 1, 2019, in accordance with ASU 2018-02, we reclassified to Retained earnings $36 million of defined pension and postretirement costs, representing the ‘stranded’ tax effect of the change in the U.S. federal corporate tax rate resulting from U.S. Tax Reform. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted earnings per share are as follows: Three Months Ended March 31, 2020 2019 Net income attributable to Willis Towers Watson $ 305 $ 287 Basic average number of shares outstanding 130 130 Dilutive effect of potentially issuable shares — — Diluted average number of shares outstanding 130 130 Basic earnings per share $ 2.36 $ 2.21 Dilutive effect of potentially issuable shares (0.02 ) (0.01 ) Diluted earnings per share $ 2.34 $ 2.20 |
Nature of Operations (Details)
Nature of Operations (Details) | Mar. 31, 2020EmployeeCountry |
Minority Interest [Line Items] | |
Number of employees employed (more than 00,000) | Employee | 45,000 |
Number of countries in which entity operates (more than 140) | Country | 140 |
Proposed Combination with AON Plc [Member] | |
Minority Interest [Line Items] | |
Number of shares receivable upon acquisition | 1.08 |
Proposed Combination with AON Plc [Member] | Aon Plc [Member] | |
Minority Interest [Line Items] | |
Percentage of ownership by parent | 63.00% |
Proposed Combination with AON Plc [Member] | Willis Towers Watson Public Limited Company [Member] | |
Minority Interest [Line Items] | |
Percentage of ownership by non-controlling owner | 37.00% |
Basis of Presentation and Rec_3
Basis of Presentation and Recent Accounting Pronouncements - Narrative (Details) | Mar. 27, 2020 | Mar. 26, 2020 |
Significant Accounting Policies And Recent Accounting Pronouncements [Line Items] | ||
Business interest deductions percentage | 30.00% | |
CARES [Member] | ||
Significant Accounting Policies And Recent Accounting Pronouncements [Line Items] | ||
Business interest deductions percentage | 50.00% |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | Jul. 30, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Business Acquisition [Line Items] | |||
Intangible assets | $ 46,000,000 | ||
Revenue | 2,466,000,000 | $ 2,312,000,000 | |
Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | 23,000,000 | ||
TRANZACT Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, effective date of acquisition | Jul. 30, 2019 | ||
Consideration paid in cash | $ 1,300,000,000 | ||
Business combination, contingent consideration arrangements, range of outcomes, value, high | 17,000,000 | ||
Revenue | 95,000,000 | ||
TRANZACT Acquisition [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 612,000,000 | ||
Intangible assets expected life | 15 years 4 months 24 days | ||
TRANZACT Acquisition [Member] | Term Loan [Member] | |||
Business Acquisition [Line Items] | |||
Debt instrument, term | 1 year | ||
TRANZACT Acquisition [Member] | Term Loan [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Debt instrument, face amount | $ 1,100,000,000 | ||
Other Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Consideration paid in cash | 71,000,000 | ||
Contingent consideration estimated fair value | $ 4,000,000 |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Fair Values of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Jul. 30, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 11,162 | $ 11,194 | ||
TRANZACT Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 7 | |||
Restricted cash | 2 | |||
Accounts receivable, net | 3 | |||
Renewal commissions receivable, current | [1] | 36 | ||
Prepaid and other current assets | 22 | |||
Renewal commissions receivable, non-current | [1] | 130 | ||
Fixed assets | 9 | |||
Intangible assets | 646 | |||
Goodwill | 722 | |||
Right-of-use assets | 19 | |||
Other non-current assets | 2 | |||
Collateralized facility | (91) | |||
Other current liabilities | (55) | |||
Deferred tax liabilities, net | (104) | |||
Lease liabilities | (19) | |||
Net assets acquired | $ 1,329 | |||
[1] | Renewal commissions receivables arise from direct-to-consumer Medicare broking sales. Cash collections for these receivables are expected to occur over a period of several years. Due to the provisions of ASC 606, these receivables are not discounted for a significant financing component when initially recognized. However, as a result of recognizing the fair value of these receivables in accordance with ASC 805, Business Combinations |
Acquisitions - Summary of Pre_2
Acquisitions - Summary of Preliminary Fair Values of Identifiable Assets Acquired and Liabilities Assumed (Parenthetical) (Details) $ in Millions | Jul. 30, 2019USD ($) |
TRANZACT Acquisition [Member] | |
Business Acquisition [Line Items] | |
Receivables prior to fair value adjustment | $ 231 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,434 | $ 2,286 | |
Interest and other income | [1] | 32 | 26 |
Revenues | 2,466 | 2,312 | |
Broking [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,262 | 1,141 | |
Consulting [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 724 | 728 | |
Outsourced administration [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 289 | 284 | |
Other [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 132 | 107 | |
HCB [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 855 | 837 | |
Interest and other income | [1] | 10 | 6 |
Revenues | 865 | 843 | |
HCB [Member] | Broking [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 83 | 73 | |
HCB [Member] | Consulting [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 582 | 580 | |
HCB [Member] | Outsourced administration [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 128 | 123 | |
HCB [Member] | Other [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 47 | 47 | |
CRB [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 721 | 719 | |
Interest and other income | [1] | 18 | 9 |
Revenues | 739 | 728 | |
CRB [Member] | Broking [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 648 | 660 | |
CRB [Member] | Consulting [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 47 | 31 | |
CRB [Member] | Outsourced administration [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 25 | 27 | |
CRB [Member] | Other [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 1 | 1 | |
IRR [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 615 | 581 | |
Interest and other income | [1] | 3 | 10 |
Revenues | 618 | 591 | |
IRR [Member] | Broking [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 433 | 405 | |
IRR [Member] | Consulting [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 93 | 114 | |
IRR [Member] | Outsourced administration [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 3 | 2 | |
IRR [Member] | Other [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 83 | 58 | |
BDA [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 234 | 138 | |
Revenues | 234 | 138 | |
BDA [Member] | Broking [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 98 | 3 | |
BDA [Member] | Outsourced administration [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 133 | 132 | |
Corporate, Non-Segment [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 9 | 11 |
Interest and other income | [1],[2] | 1 | 1 |
Revenues | [2] | 10 | 12 |
Corporate, Non-Segment [Member] | Consulting [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 2 | 3 |
Corporate, Non-Segment [Member] | Other [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 1 | 1 |
Operating Segments [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,407 | 2,260 | |
Revenues | 2,435 | 2,281 | |
Operating Segments [Member] | HCB [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 840 | 823 | |
Revenues | 850 | 829 | |
Operating Segments [Member] | CRB [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 721 | 719 | |
Revenues | 739 | 728 | |
Operating Segments [Member] | IRR [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 612 | 579 | |
Revenues | 615 | 589 | |
Operating Segments [Member] | BDA [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 231 | 135 | |
Revenues | 231 | 135 | |
Operating Segments [Member] | Corporate, Non-Segment [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 3 | 4 |
Segment Reconciling Items [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 27 | 26 |
Revenues | 31 | 31 | |
Segment Reconciling Items [Member] | HCB [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 15 | 14 |
Segment Reconciling Items [Member] | IRR [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 3 | 2 |
Segment Reconciling Items [Member] | BDA [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 3 | 3 |
Segment Reconciling Items [Member] | Corporate, Non-Segment [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | $ 6 | $ 7 |
[1] | Interest and other income is included in segment revenue and total revenue, however it has been presented separately in the above tables because it does not arise directly from contracts with customers. | ||
[2] | Reimbursable expenses and other, as well as Corporate revenue, are excluded from segment revenue, but included in total revenue on the condensed consolidated statements of comprehensive income. |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Contract with Customer, Performance Obligation Satisfied in Previous Period | $ 6 | |
December 31 2019 [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Contract with Customer, Liability, Revenue Recognized | $ 272 | |
Maximum [Member] | Other [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue, Percentage of Total Revenue | 5.00% | 5.00% |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Geography (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,434 | $ 2,286 |
Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,407 | 2,260 |
Corporate, Non-Segment [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 3 | 4 |
HCB [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 855 | 837 |
HCB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 840 | 823 |
CRB [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 721 | 719 |
CRB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 721 | 719 |
IRR [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 615 | 581 |
IRR [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 612 | 579 |
BDA [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 234 | 138 |
BDA [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 231 | 135 |
North America [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,110 | 994 |
North America [Member] | Corporate, Non-Segment [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 2 | 4 |
North America [Member] | HCB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 476 | 471 |
North America [Member] | CRB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 233 | 220 |
North America [Member] | IRR [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 170 | 164 |
North America [Member] | BDA [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 229 | 135 |
Great Britain [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 584 | 560 |
Great Britain [Member] | HCB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 126 | 118 |
Great Britain [Member] | CRB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 137 | 142 |
Great Britain [Member] | IRR [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 321 | 300 |
Western Europe [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 477 | 463 |
Western Europe [Member] | Corporate, Non-Segment [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 1 | |
Western Europe [Member] | HCB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 156 | 155 |
Western Europe [Member] | CRB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 244 | 239 |
Western Europe [Member] | IRR [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 76 | 69 |
International [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 236 | 243 |
International [Member] | HCB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 82 | 79 |
International [Member] | CRB [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 107 | 118 |
International [Member] | IRR [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 45 | $ 46 |
International [Member] | BDA [Member] | Operating Segments [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2 |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Balances (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue From Contract With Customer [Abstract] | ||
Billed Receivable, Current | $ 1,870 | $ 1,831 |
Unbilled Receivable, Current | 442 | 434 |
Contract asset, Current | 282 | 356 |
Accounts receivable, net | 2,594 | 2,621 |
Non-current accounts receivable, net | 27 | 30 |
Contract asset, Noncurrent | 140 | 105 |
Deferred revenue | $ 562 | $ 538 |
Revenue - Schedule of Contrac_2
Revenue - Schedule of Contract Balances (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue From Contract With Customer [Abstract] | ||
Allowance for doubtful debts | $ 55 | $ 37 |
Revenue - Schedule of Remaining
Revenue - Schedule of Remaining Performance Obligations (Details) $ in Millions | Mar. 31, 2020USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 1,267 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 384 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 400 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 483 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
Revenue - Schedule of Remaini_2
Revenue - Schedule of Remaining Performance Obligations (Details1) $ in Millions | Mar. 31, 2020USD ($) |
Revenue From Contract With Customer [Abstract] | |
Revenue, Remaining Performance Obligation | $ 1,267 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Number of reportable segments | 4 |
Segment Information - Revenue (
Segment Information - Revenue (Net of Reimbursable Expenses) of the Reported Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 2,466 | $ 2,312 |
Income from operations | 360 | 359 |
HCB [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 865 | 843 |
CRB [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 739 | 728 |
IRR [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 618 | 591 |
BDA [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 234 | 138 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,435 | 2,281 |
Income from operations | 606 | 562 |
Operating Segments [Member] | HCB [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 850 | 829 |
Income from operations | 213 | 204 |
Operating Segments [Member] | CRB [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 739 | 728 |
Income from operations | 127 | 127 |
Operating Segments [Member] | IRR [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 615 | 589 |
Income from operations | 277 | 252 |
Operating Segments [Member] | BDA [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 231 | 135 |
Income from operations | $ (11) | $ (21) |
Segment Information - Reconcili
Segment Information - Reconciliation of Information Reported by Segment to Condensed Consolidated Statement of Comprehensive Income Amounts (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Revenue: | |||
Revenue | $ 2,466 | $ 2,312 | |
Income/(loss) from operations | 360 | 359 | |
Amortization | (121) | (127) | |
Interest expense | (61) | (54) | |
Other income, net | 92 | 55 | |
Income from operations before income taxes | 391 | 360 | |
Operating Segments [Member] | |||
Revenue: | |||
Revenue | 2,435 | 2,281 | |
Income/(loss) from operations | 606 | 562 | |
Segment Reconciling Items [Member] | |||
Revenue: | |||
Revenue | 31 | 31 | |
Amortization | (121) | (127) | |
Transaction and integration expenses | [1] | (9) | (6) |
Unallocated, net | [2] | (116) | (70) |
Interest expense | (61) | (54) | |
Other income, net | $ 92 | $ 55 | |
[1] | Includes transaction costs related to the proposed Aon combination and TRANZACT acquisition in 2019. | ||
[2] | Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes. |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Provision for income taxes | $ 78,000,000 | $ 67,000,000 | |
Effective tax rate | 20.00% | 18.80% | |
Liabilities for uncertain tax positions | $ 51,000,000 | ||
Maximum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Expected decrease in liability for uncertain tax position | 7,000,000 | ||
Maximum [Member] | Scenario Forecast [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
U.S. Tax Reform, estimated potential adjustment | $ 82,000,000 | ||
Minimum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Expected decrease in liability for uncertain tax position | $ 3,000,000 | ||
Minimum [Member] | Scenario Forecast [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
U.S. Tax Reform, estimated potential adjustment | $ 50,000,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Components of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | $ 11,686 |
Accumulated impairment losses, beginning balance | (492) |
Goodwill, net, beginning balance | 11,194 |
Goodwill acquired | 41 |
Acquisition accounting adjustment | (5) |
Foreign exchange | (68) |
Goodwill, gross, ending balance | 11,654 |
Accumulated impairment losses, ending balance | (492) |
Goodwill, net, ending balance | 11,162 |
HCB [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 4,298 |
Accumulated impairment losses, beginning balance | (130) |
Goodwill, net, beginning balance | 4,168 |
Goodwill acquired | 14 |
Acquisition accounting adjustment | 0 |
Foreign exchange | (27) |
Goodwill, gross, ending balance | 4,285 |
Accumulated impairment losses, ending balance | (130) |
Goodwill, net, ending balance | 4,155 |
CRB [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 2,309 |
Accumulated impairment losses, beginning balance | (362) |
Goodwill, net, beginning balance | 1,947 |
Goodwill acquired | 27 |
Acquisition accounting adjustment | 0 |
Foreign exchange | (21) |
Goodwill, gross, ending balance | 2,315 |
Accumulated impairment losses, ending balance | (362) |
Goodwill, net, ending balance | 1,953 |
IRR [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 1,795 |
Accumulated impairment losses, beginning balance | 0 |
Goodwill, net, beginning balance | 1,795 |
Goodwill acquired | 0 |
Acquisition accounting adjustment | 0 |
Foreign exchange | (20) |
Goodwill, gross, ending balance | 1,775 |
Accumulated impairment losses, ending balance | 0 |
Goodwill, net, ending balance | 1,775 |
BDA [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 3,284 |
Accumulated impairment losses, beginning balance | 0 |
Goodwill, net, beginning balance | 3,284 |
Goodwill acquired | 0 |
Acquisition accounting adjustment | (5) |
Foreign exchange | 0 |
Goodwill, gross, ending balance | 3,279 |
Accumulated impairment losses, ending balance | 0 |
Goodwill, net, ending balance | $ 3,279 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Changes in the Net Carrying Amount of the Components of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, gross carrying amount | $ 5,919 | $ 5,967 | |
Finite-lived intangible assets, accumulated amortization | (2,559) | (2,489) | |
Finite-lived intangible assets, net amount | 3,360 | 3,478 | |
Intangible assets acquired | 46 | ||
Amortization | (121) | $ (127) | |
Foreign exchange | (43) | ||
Client relationships [Member] | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, gross carrying amount | 3,974 | 4,029 | |
Finite-lived intangible assets, accumulated amortization | (1,770) | (1,731) | |
Finite-lived intangible assets, net amount | 2,204 | 2,298 | |
Intangible assets acquired | 23 | ||
Amortization | (77) | ||
Foreign exchange | (40) | ||
Software [Member] | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, gross carrying amount | 743 | 753 | |
Finite-lived intangible assets, accumulated amortization | (567) | (551) | |
Finite-lived intangible assets, net amount | 176 | 202 | |
Intangible assets acquired | 0 | ||
Amortization | (26) | ||
Foreign exchange | 0 | ||
Trademark and trade name [Member] | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, gross carrying amount | 1,051 | 1,051 | |
Finite-lived intangible assets, accumulated amortization | (186) | (176) | |
Finite-lived intangible assets, net amount | 865 | 875 | |
Intangible assets acquired | 0 | ||
Amortization | (10) | ||
Foreign exchange | 0 | ||
Other [Member] | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, gross carrying amount | 151 | 134 | |
Finite-lived intangible assets, accumulated amortization | (36) | (31) | |
Finite-lived intangible assets, net amount | 115 | $ 103 | |
Intangible assets acquired | 23 | ||
Amortization | (8) | ||
Foreign exchange | $ (3) |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Finite-lived Intangible Assets [Roll Forward] | |
Weighted average remaining life of amortizable intangible assets | 13 years 7 months 6 days |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Future Estimated Amortization Expense for Amortizable Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remainder of 2020 | $ 331 | |
2021 | 373 | |
2022 | 315 | |
2023 | 267 | |
2024 | 235 | |
Thereafter | 1,839 | |
Total | $ 3,360 | $ 3,478 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Loss on derivatives to be reclassified within the next twelve months | $ (13) | ||
Maximum [Member] | |||
Derivative [Line Items] | |||
Longest outstanding maturity | 1 year 8 months 12 days | ||
Not Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member] | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 1,100 | $ 931 | |
Derivative assets, fair value | 5 | 21 | |
Not Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member] | Other income, net [Member] | |||
Derivative [Line Items] | |||
Loss recognized in income | (12) | $ (10) | |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign exchange contracts [Member] | |||
Derivative [Line Items] | |||
Derivative, notional amount | 495 | $ 499 | |
Derivative liability, fair value | 14 | ||
Derivative assets, fair value | 8 | ||
(Loss)/gain recognized in OCI (effective element) | (24) | 8 | |
Gain/(loss) reclassified from Accumulated OCL into income (effective element) | (2) | (4) | |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign exchange contracts [Member] | Revenue [Member] | |||
Derivative [Line Items] | |||
Gain/(loss) reclassified from Accumulated OCL into income (effective element) | 1 | ||
Cash Flow Hedging | Designated as Hedging Instrument | Foreign exchange contracts [Member] | Salaries and Benfits [Member] | |||
Derivative [Line Items] | |||
Gain/(loss) reclassified from Accumulated OCL into income (effective element) | $ (2) | $ (5) |
Debt - Schedule of Current and
Debt - Schedule of Current and Long-term Debt (Details) € in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2020EUR (€) | ||||
Debt Instrument [Line Items] | ||||||
Current debt | $ 697,000,000 | $ 316,000,000 | ||||
Long-term debt, excluding current maturities | 5,177,000,000 | 5,301,000,000 | ||||
Term loan due 2020 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Current debt | 174,000,000 | 292,000,000 | ||||
Collateralized Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Current portion of long term debt | 24,000,000 | 24,000,000 | ||||
Long-term debt, excluding current maturities | [1] | 53,000,000 | 60,000,000 | |||
Renewal commissions receivables pledged as collateral | 119,000,000 | 127,000,000 | ||||
5.750% senior notes due 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Current debt | $ 499,000,000 | |||||
Long-term debt, excluding current maturities | $ 499,000,000 | |||||
Stated interest rate | 5.75% | 5.75% | 5.75% | |||
Debt instrument maturity year | 2021 | 2021 | ||||
Revolving 1.25 Billion Dollar Credit Facility [Member] | Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 396,000,000 | |||||
Maximum borrowing capacity | 1,250,000,000 | |||||
3.500% senior notes due 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 448,000,000 | $ 448,000,000 | ||||
Stated interest rate | 3.50% | 3.50% | 3.50% | |||
Debt instrument maturity year | 2021 | 2021 | ||||
2.125% senior notes due 2022 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 590,000,000 | [2] | $ 604,000,000 | [2] | € 540 | |
Stated interest rate | [2] | 2.125% | 2.125% | 2.125% | ||
Debt instrument maturity year | [2] | 2022 | 2022 | |||
4.625% senior notes due 2023 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 249,000,000 | $ 249,000,000 | ||||
Stated interest rate | 4.625% | 4.625% | 4.625% | |||
Debt instrument maturity year | 2023 | 2023 | ||||
3.600% senior notes due 2024 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 646,000,000 | $ 646,000,000 | ||||
Stated interest rate | 3.60% | 3.60% | 3.60% | |||
Debt instrument maturity year | 2024 | 2024 | ||||
4.400% senior notes due 2026 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 546,000,000 | $ 546,000,000 | ||||
Stated interest rate | 4.40% | 4.40% | 4.40% | |||
Debt instrument maturity year | 2026 | 2026 | ||||
4.500% senior notes due 2028 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 595,000,000 | $ 595,000,000 | ||||
Stated interest rate | 4.50% | 4.50% | 4.50% | |||
Debt instrument maturity year | 2028 | 2028 | ||||
2.950% senior notes due 2029 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 446,000,000 | $ 446,000,000 | ||||
Stated interest rate | 2.95% | 2.95% | 2.95% | |||
Debt instrument maturity year | 2029 | 2029 | ||||
6.125% senior notes due 2043 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 271,000,000 | $ 271,000,000 | ||||
Stated interest rate | 6.125% | 6.125% | 6.125% | |||
Debt instrument maturity year | 2043 | 2043 | ||||
5.050% senior notes due 2048 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 395,000,000 | $ 395,000,000 | ||||
Stated interest rate | 5.05% | 5.05% | 5.05% | |||
Debt instrument maturity year | 2048 | 2048 | ||||
3.875% senior notes due 2049 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, excluding current maturities | $ 542,000,000 | $ 542,000,000 | ||||
Stated interest rate | 3.875% | 3.875% | 3.875% | |||
Debt instrument maturity year | 2049 | 2049 | ||||
[1] | At March 31, 2020 and December 31, 2019, the Company had $119 million and $127 million, respectively, of renewal commissions receivables pledged as collateral for this facility. | |||||
[2] | Notes issued in Euro (€540 million) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) $ in Millions | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Contingent consideration [Member] | Fair Value Inputs, Discount Rate [Member] | |||
Liabilities: | |||
Fair value inputs, weighted-average discount rate | 9.80 | 10.16 | |
Contingent consideration [Member] | Fair Value Inputs, Discount Rate [Member] | Minimum [Member] | |||
Liabilities: | |||
Fair value inputs, weighted-average discount rate | 6.98 | ||
Contingent consideration [Member] | Fair Value Inputs, Discount Rate [Member] | Maximum [Member] | |||
Liabilities: | |||
Fair value inputs, weighted-average discount rate | 13 | ||
Recurring [Member] | |||
Assets: | |||
Mutual funds / exchange traded funds | $ 6 | $ 20 | |
Derivative financial instruments | [1] | 9 | 32 |
Liabilities: | |||
Contingent consideration | [2] | 21 | 17 |
Derivative financial instruments | [1] | 18 | 3 |
Recurring [Member] | Level 1 [Member] | |||
Assets: | |||
Mutual funds / exchange traded funds | 6 | 20 | |
Derivative financial instruments | [1] | 0 | 0 |
Liabilities: | |||
Contingent consideration | [2] | 0 | 0 |
Derivative financial instruments | [1] | 0 | 0 |
Recurring [Member] | Level 2 [Member] | |||
Assets: | |||
Mutual funds / exchange traded funds | 0 | 0 | |
Derivative financial instruments | [1] | 9 | 32 |
Liabilities: | |||
Contingent consideration | [2] | 0 | 0 |
Derivative financial instruments | [1] | 18 | 3 |
Recurring [Member] | Level 3 [Member] | |||
Assets: | |||
Mutual funds / exchange traded funds | 0 | 0 | |
Derivative financial instruments | [1] | 0 | 0 |
Liabilities: | |||
Contingent consideration | [2] | 21 | 17 |
Derivative financial instruments | [1] | $ 0 | $ 0 |
[1] | See Note 8 — Derivative Financial Instruments for further information on our derivative investments. | ||
[2] | Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used on our material contingent consideration calculations were 9.80% and 10.16% at March 31, 2020 and December 31, 2019, respectively. The range of these discount rates was 6.98% - 13.00% at March 31, 2020. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable. |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Liabilities Measured Using Significant Unobservable Inputs Level 3 (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of beginning of period | $ 17 |
Obligations assumed | 4 |
Payments | 0 |
Realized and unrealized losses | 1 |
Foreign exchange | (1) |
Balance as of end of period | $ 21 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Fair Value Disclosures [Abstract] | |
Fair value significant transfers to or from Level 3 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Liabilities Whose Carrying Values Differ From the Fair Value and are Not Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current debt | $ 697 | $ 316 |
Long-term debt | 5,177 | 5,301 |
Carrying Value [Member] | Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current debt | 697 | 316 |
Long-term debt | 5,177 | 5,301 |
Fair Value [Member] | Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current debt | 704 | 319 |
Long-term debt | $ 5,290 | $ 5,694 |
Retirement Benefits - Narrative
Retirement Benefits - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Compensation and Retirement Disclosure [Line Items] | ||
Portion of pension and OPEB obligation attributed to disclosed plans (as a percent) | 99.00% | |
Defined contribution plan, employer contribution | $ 43,000,000 | $ 41,000,000 |
Pension Plan [Member] | United States [Member] | ||
Compensation and Retirement Disclosure [Line Items] | ||
Defined benefit pension plans, employer contributions | 0 | |
Defined benefit plan, estimated future employer additional contributions, remainder of fiscal year | 60,000,000 | |
Pension Plan [Member] | United Kingdom [Member] | ||
Compensation and Retirement Disclosure [Line Items] | ||
Defined benefit pension plans, employer contributions | 20,000,000 | |
Defined benefit plan, estimated future employer additional contributions, remainder of fiscal year | 55,000,000 | |
Pension Plan [Member] | Other Foreign Plans [Member] | ||
Compensation and Retirement Disclosure [Line Items] | ||
Defined benefit pension plans, employer contributions | $ 14,000,000 | |
Defined benefit plan, estimated future employer additional contributions, remainder of fiscal year | $ 5,000,000 |
Retirement Benefits - Net Perio
Retirement Benefits - Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Pension Plan [Member] | United States [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 18 | $ 16 |
Interest cost | 33 | 40 |
Expected return on plan assets | (73) | (64) |
Amortization of net loss | 9 | 5 |
Amortization of prior service credit | 0 | 0 |
Net periodic benefit (income)/cost | (13) | (3) |
Pension Plan [Member] | United Kingdom [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 4 | 4 |
Interest cost | 18 | 24 |
Expected return on plan assets | (62) | (63) |
Amortization of net loss | 6 | 5 |
Amortization of prior service credit | (4) | (4) |
Net periodic benefit (income)/cost | (38) | (34) |
Pension Plan [Member] | Other Foreign Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 5 | 5 |
Interest cost | 4 | 4 |
Expected return on plan assets | (8) | (7) |
Amortization of net loss | 0 | 1 |
Amortization of prior service credit | 0 | 0 |
Net periodic benefit (income)/cost | 1 | 3 |
PRW [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 1 | 1 |
Expected return on plan assets | 0 | 0 |
Amortization of net loss | 0 | 0 |
Amortization of prior service credit | (1) | (1) |
Net periodic benefit (income)/cost | $ 0 | $ 0 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs Recorded in Condensed Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finance lease cost: | ||
Amortization of right-of-use assets | $ 1 | $ 1 |
Interest on lease liabilities | 1 | 1 |
Operating lease cost | 47 | 48 |
Variable lease cost | 10 | 13 |
Sublease income | (5) | (4) |
Total lease cost, net | $ 54 | $ 59 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Oct. 18, 2018lawsuit | Mar. 09, 2018lawsuit | Mar. 08, 2018lawsuit | Feb. 27, 2018lawsuit | Nov. 21, 2017lawsuit | Sep. 12, 2016USD ($)plaintiff | Aug. 05, 2016USD ($)plaintiff | Mar. 31, 2016USD ($) | Jul. 21, 2015 | Jul. 15, 2015 | Oct. 01, 2013USD ($) | Jun. 20, 2013lawsuit | Jun. 11, 2013lawsuit | Jun. 03, 2013lawsuit | Feb. 14, 2013USD ($)lawsuitplaintiff | Feb. 08, 2013USD ($)plaintiff | Apr. 01, 2011USD ($) | Mar. 11, 2011USD ($)plaintiff | Sep. 16, 2010USD ($)plaintiff | Sep. 14, 2009USD ($)plaintiff | Aug. 06, 2009USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 12, 2016lawsuit | Mar. 25, 2014action |
Legacy Towers Watson Stockholders [Member] | Pending Litigation [Member] | Merger-Related Securities Litigation [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of complaints filed | lawsuit | 1 | ||||||||||||||||||||||||
Legacy Towers Watson, City of Fort Myers General Employees Pension Fund (Fort Myers) [Member] | Pending Litigation [Member] | Merger-Related Securities Litigation [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of complaints filed | lawsuit | 1 | ||||||||||||||||||||||||
Alaska Laborers-Employers Retirement Trust (Alaska) [Member] | Pending Litigation [Member] | Merger-Related Securities Litigation [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of complaints filed | lawsuit | 1 | ||||||||||||||||||||||||
Regents [Member] | Dismissed Litigation [Member] | Merger-Related Securities Litigation [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of complaints filed | lawsuit | 1 | ||||||||||||||||||||||||
Legacy Towers Watson, Naya Master Fund LP, Naya 174 Fund Limited and Naya Lincoln Park Master Fund Limited (collectively, Naya) [Member] [Member] | Dismissed Litigation [Member] | Merger-Related Securities Litigation [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of complaints filed | lawsuit | 3 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Canabal, et al. v. Willis of Colorado, Inc., et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Damages sought (in excess of) | $ 1,000,000,000 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Rupert, et al. v. Winter, et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 97 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 300,000,000 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Casanova, et al. v. Willis of Colorado, Inc., et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 7 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 5,000,000 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Rishmague, et ano. v. Winter, et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 2 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 37,000,000 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | MacArthur v. Winter, et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 2 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 4,000,000 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Florida Suits [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of complaints filed | lawsuit | 5 | ||||||||||||||||||||||||
Number of cases removed | lawsuit | 5 | ||||||||||||||||||||||||
Number of cases moved to stay | lawsuit | 4 | ||||||||||||||||||||||||
Number of cases transferred | lawsuit | 5 | ||||||||||||||||||||||||
Claims stayed, period | 7 days | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Zacarias, et al. v. Willis Group Holdings Public Limited Company, et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Period to replead dismissed claim | 21 days | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Tisminesky, et al. v. Willis Group Holdings Public Limited Company, et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Period to replead dismissed claim | 21 days | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | de Gadala-Maria, et al. v. Willis Group Holdings Public Limited Company, et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Period to replead dismissed claim | 21 days | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Martin v. Willis of Colorado, Inc., et. al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 5 | 1 | |||||||||||||||||||||||
Damages sought (in excess of) | $ 1,000,000 | $ 100,000 | |||||||||||||||||||||||
Stanford Financial Group [Member] | Pending Litigation [Member] | Abel, et al. v. Willis of Colorado, Inc., et al [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 300 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 135,000,000 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Settled Litigation [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of complaints filed | lawsuit | 15 | ||||||||||||||||||||||||
Provision for litigation losses | $ 50,000,000 | $ 70,000,000 | |||||||||||||||||||||||
Litigation settlement amount | $ 120,000,000 | $ 120,000,000 | |||||||||||||||||||||||
Stanford Financial Group [Member] | Settled Litigation [Member] | Troice, et al. v. Willis of Colorado, Inc., et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Damages sought (in excess of) | $ 1,000,000,000 | ||||||||||||||||||||||||
Number of actions consolidated | action | 2 | ||||||||||||||||||||||||
Stanford Financial Group [Member] | Settled Litigation [Member] | Janvey, et al. v. Willis of Colorado, Inc., et al. [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Damages sought (in excess of) | $ 1,000,000,000 | ||||||||||||||||||||||||
Total losses incurred by plaintiff | $ 4,600,000,000 | ||||||||||||||||||||||||
Barbar, et al. v. Willis Group Holdings Public Limited Company, et al. [Member] | Pending Litigation [Member] | Florida Suits [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 35 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 30,000,000 | ||||||||||||||||||||||||
de Gadala-Maria, et al. v. Willis Group Holdings Public Limited Company, et al. [Member] | Pending Litigation [Member] | Florida Suits [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 64 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 83,500,000 | ||||||||||||||||||||||||
Ranni, et ano. v. Willis Group Holdings Public Limited Company, et al. [Member] | Pending Litigation [Member] | Florida Suits [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 2 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 3,000,000 | ||||||||||||||||||||||||
Tisminesky, et al. v. Willis Group Holdings Public Limited Company, et al. [Member] | Pending Litigation [Member] | Florida Suits [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 11 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 6,500,000 | ||||||||||||||||||||||||
Zacarias, et al. v. Willis Group Holdings Public Limited Company, et al. [Member] | Pending Litigation [Member] | Florida Suits [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of plaintiffs | plaintiff | 10 | ||||||||||||||||||||||||
Damages sought (in excess of) | $ 12,500,000 |
Supplementary Information for_3
Supplementary Information for Certain Balance Sheet Accounts - Prepaid and Other Current Assets (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Prepayments and accrued income | $ 166,000,000 | $ 145,000,000 | ||
Deferred contract costs | 72,000,000 | 101,000,000 | ||
Derivatives and investments | 25,000,000 | 49,000,000 | ||
Deferred compensation plan assets | 14,000,000 | 18,000,000 | ||
Retention incentives | 9,000,000 | 11,000,000 | ||
Corporate income and other taxes | 52,000,000 | 56,000,000 | ||
Restricted cash | 8,000,000 | 8,000,000 | $ 0 | $ 0 |
Acquired renewal commissions receivable | 23,000,000 | 25,000,000 | ||
Other current assets | 100,000,000 | 112,000,000 | ||
Total prepaid and other current assets | $ 469,000,000 | $ 525,000,000 |
Supplementary Information for_4
Supplementary Information for Certain Balance Sheet Accounts - Deferred Revenue and Accrued Expenses (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accounts payable, accrued liabilities and deferred income | $ 854 | $ 856 |
Accrued discretionary and incentive compensation | 265 | 727 |
Accrued vacation | 163 | 137 |
Other employee-related liabilities | 47 | 64 |
Total deferred revenue and accrued expenses | $ 1,329 | $ 1,784 |
Supplementary Information for_5
Supplementary Information for Certain Balance Sheet Accounts - Provision For Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Claims, lawsuits and other proceedings | $ 459 | $ 456 |
Other provisions | 82 | 81 |
Total provision for liabilities | $ 541 | $ 537 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' equity attributable to parent, beginning balance | $ 10,249 | ||
Stockholders' equity attributable to parent, ending balance | 10,263 | ||
Foreign currency translation [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' equity attributable to parent, beginning balance | $ (616) | (538) | $ (616) |
Other comprehensive (loss)/income before reclassifications | (208) | 9 | |
Amounts reclassified from accumulated other comprehensive income/(loss) (net of income tax) | 0 | 0 | |
Net current-period other comprehensive (loss)/income | (208) | 9 | |
Stockholders' equity attributable to parent, ending balance | (746) | (607) | |
Foreign currency translation [Member] | Accounting Standards Update 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of tax effects per ASU 2018-02 | 0 | 0 | |
Derivative instruments [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' equity attributable to parent, beginning balance | (8) | 13 | (8) |
Other comprehensive (loss)/income before reclassifications | (19) | 6 | |
Amounts reclassified from accumulated other comprehensive income/(loss) (net of income tax) | 1 | 5 | |
Net current-period other comprehensive (loss)/income | (18) | 11 | |
Stockholders' equity attributable to parent, ending balance | (5) | 3 | |
Derivative instruments [Member] | Accounting Standards Update 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of tax effects per ASU 2018-02 | 0 | 0 | |
Defined pension and post-retirement benefit costs [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' equity attributable to parent, beginning balance | (1,337) | (1,702) | (1,337) |
Other comprehensive (loss)/income before reclassifications | (4) | 1 | |
Amounts reclassified from accumulated other comprehensive income/(loss) (net of income tax) | 11 | 2 | |
Net current-period other comprehensive (loss)/income | 7 | 3 | |
Stockholders' equity attributable to parent, ending balance | (1,695) | (1,370) | |
Defined pension and post-retirement benefit costs [Member] | Accounting Standards Update 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of tax effects per ASU 2018-02 | 36 | 0 | (36) |
Total [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' equity attributable to parent, beginning balance | $ (1,961) | (2,227) | (1,961) |
Other comprehensive (loss)/income before reclassifications | (231) | 16 | |
Amounts reclassified from accumulated other comprehensive income/(loss) (net of income tax) | 12 | 7 | |
Net current-period other comprehensive (loss)/income | (219) | 23 | |
Stockholders' equity attributable to parent, ending balance | (2,446) | (1,974) | |
Total [Member] | Accounting Standards Update 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of tax effects per ASU 2018-02 | $ 0 | $ (36) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification from AOCI, Current Period, Tax | $ 0 | $ 4 | |
Accounting Standards Update 2018-02 [Member] | Defined pension and post-retirement benefit costs [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Adjustment of retained earnings | $ 36 | $ 0 | $ (36) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restricted share units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 |
Time-based award [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options outstanding | 0.2 | 0.3 |
Performance-Based Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options outstanding | 0.3 | 0.4 |
Restricted share units outstanding | 0.3 | 0.5 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income attributable to Willis Towers Watson | $ 305 | $ 287 |
Basic average number of shares outstanding (shares) | 130 | 130 |
Dilutive effect of potentially issuable shares (shares) | 0 | 0 |
Diluted average number of shares outstanding (shares) | 130 | 130 |
Basic earnings per share | $ 2.36 | $ 2.21 |
Dilutive effect of potentially issuable shares (USD per share) | (0.02) | (0.01) |
Diluted earnings per share | $ 2.34 | $ 2.20 |