Item 1. FINANCIAL STATEMENTS (UNAUDITED)

WILLIS TOWE****RS WATSON PUBLIC LIMITED COMPANY

Condensed Consolidated Statem****ents of Comprehensive Income

(In millions of U.S. dollars, except per share data)

(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Revenue		$	1,953			$	1,973			$	6,144			$	6,292
Costs of providing services
Salaries and benefits			1,225				1,255				3,802				3,991
Other operating expenses			384				385				1,263				1,169
Depreciation			60				69				191				212
Amortization			71				85				239				285
Restructuring costs			9				—				71				—
Transaction and transformation, net			50				(952	)			108				(877	)
Total costs of providing services			1,799				842				5,674				4,780
Income from operations			154				1,131				470				1,512
Interest expense			(54	)			(50	)			(154	)			(161	)
Other income, net			85				105				205				617
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES			185				1,186				521				1,968
Provision for income taxes			(1	)			(267	)			(63	)			(386	)
INCOME FROM CONTINUING OPERATIONS			184				919				458				1,582
INCOME/(LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX			8				(12	)			(27	)			247
NET INCOME			192				907				431				1,829
Income attributable to non-controlling interests			(2	)			(4	)			(10	)			(9	)
NET INCOME ATTRIBUTABLE TO WTW		$	190			$	903			$	421			$	1,820
EARNINGS PER SHARE
Basic earnings per share:
Income from continuing operations per share		$	1.65			$	7.10			$	3.95			$	12.14
Income/(loss) from discontinued operations per share			0.07				(0.09	)			(0.24	)			1.90
Basic earnings per share		$	1.72			$	7.01			$	3.71			$	14.04
Diluted earnings per share:
Income from continuing operations per share		$	1.65			$	7.08			$	3.95			$	12.10
Income/(loss) from discontinued operations per share			0.07				(0.09	)			(0.24	)			1.90
Diluted earnings per share		$	1.72			$	6.99			$	3.71			$	14.00
Comprehensive (loss)/income before non-controlling interests		$	(42	)		$	826			$	(103	)		$	1,831
Comprehensive income attributable to non-controlling interests			(2	)			(4	)			(10	)			(11	)
Comprehensive (loss)/income attributable to WTW		$	(44	)		$	822			$	(113	)		$	1,820

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY

Condensed Consolida****ted Balance Sheets

(In millions of U.S. dollars, except share data)

(Unaudited)

		September 30, 2022				December 31, 2021
ASSETS
Cash and cash equivalents		$	1,496			$	4,486
Fiduciary assets			11,190				11,014
Accounts receivable, net			1,884				2,370
Prepaid and other current assets			476				612
Current assets held for sale			5				6
Total current assets			15,051				18,488
Fixed assets, net			701				851
Goodwill			10,089				10,183
Other intangible assets, net			2,314				2,555
Right-of-use assets			584				720
Pension benefits assets			1,008				971
Other non-current assets			1,244				1,202
Total non-current assets			15,940				16,482
TOTAL ASSETS		$	30,991			$	34,970
LIABILITIES AND EQUITY
Fiduciary liabilities		$	11,190			$	11,014
Deferred revenue and accrued expenses			1,640				1,926
Current debt			250				613
Current lease liabilities			126				150
Other current liabilities			851				1,015
Current liabilities held for sale			65				6
Total current liabilities			14,122				14,724
Long-term debt			4,470				3,974
Liability for pension benefits			552				757
Deferred tax liabilities			758				845
Provision for liabilities			365				375
Long-term lease liabilities			608				734
Other non-current liabilities			203				253
Total non-current liabilities			6,956				6,938
TOTAL LIABILITIES			21,078				21,662
COMMITMENTS AND CONTINGENCIES
EQUITY (i)
Additional paid-in capital			10,855				10,804
Retained earnings			1,706				4,645
Accumulated other comprehensive loss, net of tax			(2,720	)			(2,186	)
Treasury shares, at cost, 17,519 shares in 2022 and 2021			(3	)			(3	)
Total WTW shareholders’ equity			9,838				13,260
Non-controlling interests			75				48
Total equity			9,913				13,308
TOTAL LIABILITIES AND EQUITY		$	30,991			$	34,970

(i)

Equity includes (a) Ordinary shares $0.000304635 nominal value; Authorized 1,510,003,775; Issued 108,662,482 (2022) and 122,055,815 (2021); Outstanding 108,662,482 (2022) and 122,055,815 (2021) and (b) Preference shares, $0.000115 nominal value; Authorized 1,000,000,000 and Issued none in 2022 and 2021.

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY

Condensed Consolidated S****tatements of Cash Flows

(In millions of U.S. dollars)

(Unaudited)

		Nine Months Ended September 30,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME		$	431			$	1,829
Adjustments to reconcile net income to total net cash from operating activities:
Depreciation			191				212
Amortization			239				286
Impairment			81				—
Non-cash restructuring charges			56				—
Non-cash lease expense			94				108
Net periodic benefit of defined benefit pension plans			(113	)			(125	)
Provision for doubtful receivables from clients			13				13
(Benefit from)/provision for deferred income taxes			(92	)			41
Share-based compensation			71				71
Net loss/(gain) on disposal of operations			76				(380	)
Non-cash foreign exchange gain			(178	)			(5	)
Other, net			(1	)			(21	)
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries:
Accounts receivable			270				175
Other assets			(198	)			(135	)
Other liabilities			(510	)			(199	)
Provisions			7				7
Net cash from operating activities			437				1,877
CASH FLOWS (USED IN)/FROM INVESTING ACTIVITIES
Additions to fixed assets and software for internal use			(100	)			(109	)
Capitalized software costs			(50	)			(40	)
Acquisitions of operations, net of cash acquired			(80	)			—
Proceeds from sale of operations			1				726
Cash and fiduciary funds transferred in sale of operations			(29	)			(216	)
Sale of investments			200				—
Net cash (used in)/from investing activities			(58	)			361
CASH FLOWS USED IN FINANCING ACTIVITIES
Senior notes issued			750				—
Debt issuance costs			(5	)			—
Repayments of debt			(585	)			(970	)
Repurchase of shares			(3,090	)			(1,000	)
Proceeds from issuance of shares			7				2
Net proceeds from fiduciary funds held for clients			157				49
Payments of deferred and contingent consideration related to acquisitions			(22	)			(19	)
Cash paid for employee taxes on withholding shares			(32	)			(8	)
Dividends paid			(280	)			(275	)
Acquisitions of and dividends paid to non-controlling interests			(9	)			(35	)
Net cash used in financing activities			(3,109	)			(2,256	)
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (i)			(2,730	)			(18	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(290	)			(99	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (i)			7,691				6,301
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (i)		$	4,671			$	6,184

(i)

The amounts of cash, cash equivalents and restricted cash, their respective classification on the condensed consolidated balance sheets, as well as their respective portions of the increase or decrease in cash, cash equivalents and restricted cash for each of the periods presented have been included in Note 19 — Supplemental Disclosures of Cash Flow Information.

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY

Condensed Consolidated Stat****ements of Changes in Equity

(In millions of U.S. dollars and number of shares in thousands)

(Unaudited)

		Nine Months Ended September 30, 2022
		Shares outstanding				Additional paid-in capital				Retained earnings				Treasury shares				AOCL (i)				Total WTW shareholders’ equity				Non-controlling interests				Total equity
Balance as of December 31, 2021			122,056			$	10,804			$	4,645			$	(3	)		$	(2,186	)		$	13,260			$	48			$	13,308
Shares repurchased			(9,860	)			—				(2,250	)			—				—				(2,250	)			—				(2,250	)
Net income			—				—				122				—				—				122				3				125
Dividends declared ($0.82 per share)			—				—				(94	)			—				—				(94	)			—				(94	)
Dividends attributable to non-controlling interests			—				—				—				—				—				—				(1	)			(1	)
Other comprehensive loss			—				—				—				—				(56	)			(56	)			—				(56	)
Issuance of shares under employee stock compensation plans			17				1				—				—				—				1				—				1
Share-based compensation and net settlements			—				20				—				—				—				20				—				20
Acquisition of non-controlling interests			—				—				—				—				—				—				21				21
Foreign currency translation			—				1				—				—				—				1				—				1
Balance as of March 31, 2022			112,213			$	10,826			$	2,423			$	(3	)		$	(2,242	)		$	11,004			$	71			$	11,075
Shares repurchased			(2,144	)			—				(471	)			—				—				(471	)			—				(471	)
Net income			—				—				109				—				—				109				5				114
Dividends declared ($0.82 per share)			—				—				(90	)			—				—				(90	)			—				(90	)
Dividends attributable to non-controlling interests			—				—				—				—				—				—				(2	)			(2	)
Other comprehensive loss			—				—				—				—				(244	)			(244	)			—				(244	)
Issuance of shares under employee stock compensation plans			27				—				—				—				—				—				—				—
Share-based compensation and net settlements			—				22				—				—				—				22				—				22
Sale of non-controlling interests			—				—				—				—				—				—				6				6
Foreign currency translation			—				7				—				—				—				7				—				7
Balance as of June 30, 2022			110,096			$	10,855			$	1,971			$	(3	)		$	(2,486	)		$	10,337			$	80			$	10,417
Shares repurchased			(1,789	)			—				(369	)			—				—				(369	)			—				(369	)
Net income			—				—				190				—				—				190				2				192
Dividends declared ($0.82 per share)			—				—				(86	)			—				—				(86	)			—				(86	)
Dividends attributable to non-controlling interests			—				—				—				—				—				—				(5	)			(5	)
Other comprehensive loss			—				—				—				—				(234	)			(234	)			—				(234	)
Issuance of shares under employee stock compensation plans			355				6				—				—				—				6				—				6
Share-based compensation and net settlements			—				(14	)			—				—				—				(14	)			—				(14	)
Acquisition of remaining non-controlling interests			—				2				—				—				—				2				(2	)			—
Foreign currency translation			—				6				—				—				—				6				—				6
Balance as of September 30, 2022			108,662			$	10,855			$	1,706			$	(3	)		$	(2,720	)		$	9,838			$	75			$	9,913

(i)

Accumulated other comprehensive loss, net of tax (‘AOCL’).

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY

Condensed Consolidated Statements of Changes in Equity

(In millions of U.S. dollars and number of shares in thousands)

(Unaudited)

		Nine Months Ended September 30, 2021
		Shares outstanding				Additional paid-in capital				Retained earnings				Treasury shares				AOCL (i)				Total WTW shareholders’ equity				Non-controlling interests				Total equity
Balance as of December 31, 2020			128,965			$	10,748			$	2,434			$	(3	)		$	(2,359	)		$	10,820			$	112			$	10,932
Net income			—				—				733				—				—				733				3				736
Dividends declared ($0.71 per share)			—				—				(92	)			—				—				(92	)			—				(92	)
Dividends attributable to non-controlling interests			—				—				—				—				—				—				(17	)			(17	)
Other comprehensive income			—				—				—				—				48				48				2				50
Issuance of shares under employee stock compensation plans			9				1				—				—				—				1				—				1
Share-based compensation and net settlements			—				12				—				—				—				12				—				12
Reduction of non-controlling interests (ii)			—				—				—				—				—				—				(52	)			(52	)
Foreign currency translation			—				4				—				—				—				4				—				4
Balance as of March 31, 2021			128,974			$	10,765			$	3,075			$	(3	)		$	(2,311	)		$	11,526			$	48			$	11,574
Net income			—				—				184				—				—				184				2				186
Dividends declared ($0.71 per share)			—				—				(93	)			—				—				(93	)			—				(93	)
Dividends attributable to non-controlling interests			—				—				—				—				—				—				(4	)			(4	)
Other comprehensive income			—				—				—				—				33				33				—				33
Issuance of shares under employee stock compensation plans			14				1				—				—				—				1				—				1
Share-based compensation and net settlements			—				20				—				—				—				20				—				20
Reduction of non-controlling interests (ii)			—				—				—				—				—				—				(1	)			(1	)
Foreign currency translation			—				(1	)			—				—				—				(1	)			—				(1	)
Balance as of June 30, 2021			128,988			$	10,785			$	3,166			$	(3	)		$	(2,278	)		$	11,670			$	45			$	11,715
Shares repurchased			(4,456	)			—				(1,000	)			—				—				(1,000	)			—				(1,000	)
Net income			—				—				903				—				—				903				4				907
Dividends declared ($0.80 per share)			—				—				(100	)			—				—				(100	)			—				(100	)
Dividends attributable to non-controlling interests			—				—				—				—				—				—				(6	)			(6	)
Other comprehensive loss			—				—				—				—				(81	)			(81	)			—				(81	)
Issuance of shares under employee stock compensation plans			64				—				—				—				—				—				—				—
Share-based compensation and net settlements			—				6				—				—				—				6				—				6
Reduction of non-controlling interests (ii)			—				(8	)			—				—				—				(8	)			(3	)			(11	)
Foreign currency translation			—				3				—				—				—				3				—				3
Balance as of September 30, 2021			124,596			$	10,786			$	2,969			$	(3	)		$	(2,359	)		$	11,393			$	40			$	11,433

(i)

Accumulated other comprehensive loss, net of tax (‘AOCL’).

(ii)

Attributable to the divestiture of businesses that are less than wholly-owned or the acquisition of shares previously owned by minority interest holders.

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY

Notes to the Condensed Consol****idated Financial Statements

(Tabular amounts in millions of U.S. dollars, except per share data)

(Unaudited)

Note 1 — Nature of Operations

Willis Towers Watson public limited company is a leading global advisory, broking and solutions company that provides data-driven, insight-led solutions in the areas of people, risk and capital. The Company has more than 44,000 colleagues serving more than 140 countries and markets.

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), advisory services, leading-edge technology solutions, and unparalleled analytical and modeling capabilities (such as hazard modeling). 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 effectively deliver valuable benefits and create an engaging employee experience. Our services and solutions encompass such areas as employee benefits, total rewards, talent, wellbeing 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 unrestricted access to the global insurance market.

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. 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 help sharpen strategies, enhance organizational resilience, motivate workforces and maximize performance to uncover opportunities for sustainable success.

Segment Reorganization

On January 1, 2022, WTW realigned to provide its comprehensive offering of services and solutions to clients across two business segments: Health, Wealth & Career (‘HWC’), and Risk & Broking (‘R&B’). These changes were made in conjunction with changes in the WTW leadership team, including the appointment of a new chief executive officer who succeeded the prior CEO as the chief operating decision maker on that date. Prior to January 1, 2022, we operated across four segments: Human Capital and Benefits; Corporate Risk and Broking; Investment, Risk and Reinsurance; and Benefits Delivery and Administration. Following the realignment, the two new segments consist of the following businesses:

The HWC segment includes businesses previously aligned under the Human Capital and Benefits segment, the Benefits Delivery and Administration segment, and the Investment business, which was previously under the Investment, Risk and Reinsurance segment.

The R&B segment includes businesses previously aligned under the Corporate Risk and Broking segment, as well as the Insurance Consulting and Technology business, which was previously under the Investment, Risk and Reinsurance segment.

In addition, effective January 1, 2022, the Company manages its businesses across three geographical areas: North America, Europe (including Great Britain) and International.

Certain Investment, Risk and Reinsurance businesses that were part of the results from continuing operations in the prior-year period presented were divested during 2021. The revenue and income from operations for these businesses have been included as ‘divested businesses’ in the reconciliations between the total segment results and the consolidated results of the Company. However, the results of the divested Willis Re treaty-reinsurance business are presented as discontinued operations and are therefore excluded from the divested businesses presented in the segment reconciliations.

Segment results herein are presented on a retrospective basis to reflect the reorganization. See Note 4 — Revenue, Note 5 — Segment Information, Note 6 — Restructuring Costs and Note 8 — Goodwill and Other Intangible Assets for the Company's segment-based presentations.

Note 2 — Basis of Presentation

Basis of Presentation

The accompanying unaudited quarterly condensed consolidated financial statements of WTW and our subsidiaries are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore certain footnote disclosures have been condensed or omitted from these financial statements as they are not required for interim reporting under U.S. GAAP. Certain amounts on the condensed consolidated statements of cash flows have been revised from their prior period classifications. See Note 19 - Supplemental Disclosures of Cash Flow Information for more information as to the nature of the revision and the amounts. 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 24, 2022, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov.

The results of operations for the three and nine months ended September 30, 2022 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 of the Economic Environment

Beginning with the COVID-19 pandemic, there have been adverse changes in global commercial activity, particularly in the global supply chain and workforce availability, and significant volatility in the global financial markets including, among other effects, occasional declines in the equity markets, changes in interest rates and reduced liquidity on a global basis.

Supply and labor market disruptions caused by COVID-19, accommodative monetary and fiscal policy and the Russian invasion of Ukraine have contributed to significant inflation in many of the markets in which we operate. This impacts not only the costs to attract and retain employees but also other costs to run and invest in our business. If our costs grow significantly in excess of our ability to raise revenue, our margins and results of operations may be materially and adversely impacted and we may not be able to achieve our strategic and financial objectives.

Although we believe we have adapted to the unique challenges posed by COVID-19 surrounding how and where we do our work, we are also impacted by the negative effect on workforce availability, which could hamper our ability to grow our capacity on pace with increasing demand for our services. We expect the market for talent to remain highly competitive for at least the next several months. We will continue to monitor the situation and assess any implications to our business and our stakeholders.

Note 3 — Acquisitions and Divestitures

Acquisitions

The Company completed acquisitions during the nine months ended September 30, 2022 for cash payments of $109 million and contingent considerations with estimated fair values totaling $22 million.

Divestment of Russian Business

During the first quarter of 2022, WTW announced its intention to transfer ownership of its Russian subsidiaries to local management who will operate independently in the Russian market. Due to the sanctions and prohibitions on certain types of business and activities, WTW deconsolidated its Russian entities on March 14, 2022. The transfer of its Russian subsidiaries to local management was completed on the agreed-upon terms on July 18, 2022, and the transfer was registered in Russia on July 25, 2022. The deconsolidation in the first quarter of 2022 resulted in a loss of $57 million, which includes an allocation of Risk & Broking goodwill, and was recognized as a loss on disposal of a business within other income, net on our condensed consolidated statement of comprehensive income. Further, certain Russian insurance contracts were placed historically by our U.K. brokers into the London market, the majority of which were under multi-year terms resulting in both current and non-current accounts receivables. Total net assets impaired, including accounts receivable balances related to our Russian business that are held outside of our Russian entities, were $81 million recorded during the three months ended March 31, 2022 in other operating expenses on our condensed consolidated statement of comprehensive income.

Willis Re Divestiture

On August 13, 2021, the Company entered into a definitive agreement to sell its treaty-reinsurance business (‘Willis Re’) to Arthur J. Gallagher & Co. (‘Gallagher’), a leading global provider of insurance, risk management and consulting services, for total upfront cash consideration of $3.25 billion plus an earnout payable in 2025 of up to $750 million in cash, subject to certain adjustments. The deal was subject to required regulatory approvals and clearances, as well as other customary closing conditions, and was completed on December 1, 2021 (‘Principal Closing’). Although the majority of the Willis Re businesses transferred to Gallagher at Principal Closing, the assets and liabilities of certain Willis Re businesses were not transferred to Gallagher at the time due to local territory restrictions (‘Deferred Closing’). The Deferred Closing for all but one business was completed during the second quarter of 2022, and all net earnings of the Deferred Closing businesses accumulated between the Principal Closing and Deferred Closing remained payable to Gallagher at June 30, 2022 and September 30, 2022. The Company recognized a preliminary pre-tax gain of $2.3 billion upon completion of the sale in 2021, and during the second quarter of 2022, WTW recognized a $60 million reduction to the pre-tax gain related to an updated estimate of the working capital transferred upon disposal. The Company recognized the final allocation of the proceeds and related tax expense, as well as an adjustment of certain indemnities for the three months ended September 30, 2022. These amounts as well as the amounts payable with respect to the settled Deferred Closing businesses were remitted to Gallagher in October 2022. The gain is subject to tax in certain jurisdictions, mainly in the U.S., and is predominantly tax-exempt in the U.K.

In connection with the transaction, the Company reclassified the results of its Willis Re operations as discontinued operations on its condensed consolidated statements of comprehensive income and reclassified Willis Re assets and liabilities as held for sale on its condensed consolidated balance sheets. The condensed consolidated cash flow statements were not adjusted for the divestiture. Willis Re was previously included in the Company's former Investment, Risk and Reinsurance segment. As noted above, the amounts owed as part of the Deferred Closing continue to be presented as held for sale on the condensed consolidated balance sheets at September 30, 2022 and December 31, 2021, and the results of these businesses following the Principal Closing until their respective Deferred Closing dates have been included in income from discontinued operations on the condensed consolidated statements of comprehensive income.

The Company will account for the earnout as a gain contingency and therefore did not record any receivables upon close. Rather, the earnout will be recognized in the Company’s condensed consolidated financial statements, if it is received, in 2025.

A number of services are continuing under a cost reimbursement Transition Services Agreement (‘TSA’) in which WTW is providing Gallagher support including real estate leases, information technology, payroll, human resources and accounting. These services are expected to be provided for a period not to exceed two years from the Principal Closing. Fees earned under the TSA were $8 million and $31 million during the three and nine months ended September 30, 2022, respectively, and have been recognized as a reduction to the costs incurred to service the TSA and are included in continuing operations within other operating expenses on the condensed consolidated statements of comprehensive income. Costs incurred to service the TSA are expected to be reduced as part of the Company’s Transformation program (see Note 6 — Restructuring Costs for a description of the program) as quickly as possible when the services are no longer required by Gallagher.

The following selected financial information relates to the operations of Willis Re for the periods presented:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Revenue from discontinued operations		$	10			$	111			$	50			$	668
Costs of providing services
Salaries and benefits			5				97				13				291
Other operating expenses			—				29				1				60
Amortization			—				—				—				1
Total costs of providing services			5				126				14				352
Other income, net			—				—				—				1
Income/(loss) from discontinued operations before income taxes			5				(15	)			36				317
Adjustment to gain on disposal of Willis Re			(2	)			—				(65	)			—
Benefit from/(provision for) income taxes			5				3				7				(70	)
Net income payable to Gallagher on Deferred Closing			—				—				(5	)			—
Income/(loss) from discontinued operations, net of tax		$	8			$	(12	)		$	(27	)		$	247

The expense amounts reflected above represent only the direct costs attributable to the Willis Re business and exclude allocations of corporate costs that will be retained following the sale. Neither the discontinued operations presented above, nor the unallocated corporate costs, reflect the impact of any cost reimbursement that will be received under the TSA.

Amounts classified as held for sale within our condensed consolidated balance sheets at both September 30, 2022 and December 31, 2021 are related to amounts payable as part of the Deferred Closing as well as the final purchase price adjustment at September 30, 2022. Certain amounts included in the condensed consolidated balance sheets have been excluded from the held-for-sale balances disclosed since the assets are not transferring under the terms of the sale agreement, and instead will be settled by the Company. At September 30, 2022 and December 31, 2021, the amounts of significant assets and liabilities related to the Willis Re businesses which were not transferred in the sale and are therefore not classified as held for sale on the condensed consolidated balance sheets are $3.8 billion and $2.6 billion of fiduciary assets and liabilities, $62 million and $71 million of accounts receivable and $137 million and $91 million of other current liabilities, respectively. Other than indemnified amounts, these amounts will be settled over time.

In October 2022, the Company transferred the amounts owed to Gallagher in relation to the completed Deferred Closing businesses, final purchase price adjustments and indemnities.

Miller Divestiture

On March 1, 2021, the Company completed the transaction to sell its U.K.-based, majority-owned wholesale subsidiary Miller for final total consideration of GBP 623 million ($818 million), which includes amounts paid to the minority shareholder. The $356 million net tax-exempt gain on the sale was included in Other income, net in the condensed consolidated statement of comprehensive income during the nine months ended September 30, 2021. Prior to disposal, Miller was included within the Company's former Investment, Risk and Reinsurance segment.

Other Disposals

The Company completed other disposals during the nine months ended September 30, 2022 for cash proceeds of $1 million and estimated non-cash proceeds of $43 million for a net gain on disposal of $46 million.

Note 4 — Revenue

Disaggregation of Revenue

The Company reports revenue by segment in Note 5 — Segment Information. The following tables present revenue by service offering and segment, as well as reconciliations to total revenue for the three and nine months ended September 30, 2022 and 2021. Along with reimbursable expenses and other, total revenue by service offering represents our revenue from customer contracts. The prior year segment information has been retrospectively adjusted to conform to the current year presentation.

		Three Months Ended September 30,
		HWC								R&B								Divested Businesses								Corporate (i)								Total
		2022				2021				2022				2021				2022				2021				2022				2021				2022				2021
Broking		$	207			$	189			$	606			$	621			$	—			$	8			$	1			$	—			$	814			$	818
Consulting			616				621				85				92				—				—				2				2				703				715
Outsourced administration			222				245				18				21				—				—				—				—				240				266
Other			111				109				38				38				—				—				—				1				149				148
Total revenue by service offering			1,156				1,164				747				772				—				8				3				3				1,906				1,947
Reimbursable expenses and other (i)			16				13				2				2				—				—				4				(10	)			22				5
Total revenue from customer contracts		$	1,172			$	1,177			$	749			$	774			$	—			$	8			$	7			$	(7	)		$	1,928			$	1,952
Interest and other income (ii)			6				4				18				15				—				—				1				2				25				21
Total revenue		$	1,178			$	1,181			$	767			$	789			$	—			$	8			$	8			$	(5	)		$	1,953			$	1,973

		Nine Months Ended September 30,
		HWC								R&B								Divested Businesses								Corporate (i)								Total
		2022				2021				2022				2021				2022				2021				2022				2021				2022				2021
Broking		$	714			$	645			$	1,963			$	2,026			$	—			$	62			$	8			$	—			$	2,685			$	2,733
Consulting			1,886				1,910				280				292				—				6				7				6				2,173				2,214
Outsourced administration			696				754				61				69				—				—				—				—				757				823
Other			237				257				147				140				—				—				—				3				384				400
Total revenue by service offering			3,533				3,566				2,451				2,527				—				68				15				9				5,999				6,170
Reimbursable expenses and other (i)			43				40				7				5				—				—				3				(10	)			53				35
Total revenue from customer contracts		$	3,576			$	3,606			$	2,458			$	2,532			$	—			$	68			$	18			$	(1	)		$	6,052			$	6,205
Interest and other income (ii)			32				14				57				69				—				—				3				4				92				87
Total revenue		$	3,608			$	3,620			$	2,515			$	2,601			$	—			$	68			$	21			$	3			$	6,144			$	6,292

(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. Amounts included in Corporate revenue may include eliminations and impacts from hedged revenue transactions.

(ii)

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. In 2022, both HWC’s and R&B’s interest and other income resulted primarily from book-of-business settlements. For HWC, these amounts totaled $2 million and $19 million, respectively, for the three and nine months ended September 30, 2022. For R&B, these amounts totaled $11 million and $41 million, respectively, for the three and nine months ended September 30, 2022. In the three and nine months ended September 30, 2021, HWC had no material settlements, and R&B had settlements totaling $12 million and $59 million, respectively.

The following tables present revenue by the geography where our work is performed for the three and nine months ended September 30, 2022 and 2021. Reconciliations to total revenue on our condensed consolidated statements of comprehensive income and to segment revenue are shown in the table above. The prior year geographic information has been retrospectively adjusted to conform to the current year presentation.

		Three Months Ended September 30,
		HWC								R&B								Divested Businesses								Corporate								Total
		2022				2021				2022				2021				2022				2021				2022				2021				2022				2021
North America		$	766			$	748			$	326			$	329			$	—			$	5			$	2			$	2			$	1,094			$	1,084
Europe			285				312				297				319				—				3				1				1				583				635
International			105				104				124				124				—				—				—				—				229				228
Total revenue by geography		$	1,156			$	1,164			$	747			$	772			$	—			$	8			$	3			$	3			$	1,906			$	1,947

		Nine Months Ended September 30,
		HWC								R&B								Divested Businesses								Corporate								Total
		2022				2021				2022				2021				2022				2021				2022				2021				2022				2021
North America		$	2,301			$	2,258			$	936			$	922			$	—			$	15			$	6			$	6			$	3,243			$	3,201
Europe			931				1,018				1,128				1,201				—				53				8				3				2,067				2,275
International			301				290				387				404				—				—				1				—				689				694
Total revenue by geography		$	3,533			$	3,566			$	2,451			$	2,527			$	—			$	68			$	15			$	9			$	5,999			$	6,170

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 September 30, 2022 and December 31, 2021:

		September 30, 2022				December 31, 2021
Billed receivables, net of allowance for doubtful accounts of $47 million and $45 million		$	1,207			$	1,504
Unbilled receivables			451				431
Current contract assets			226				435
Accounts receivable, net		$	1,884			$	2,370
Non-current accounts receivable, net		$	44			$	23
Non-current contract assets		$	620			$	532
Deferred revenue		$	604			$	576

During the three and nine months ended September 30, 2022, revenue of $53 million and $363 million, respectively, was recognized that was reflected as deferred revenue at December 31, 2021. During the three months ended September 30, 2022, revenue of $232 million was recognized that was reflected as deferred revenue at June 30, 2022.

During the three and nine months ended September 30, 2022, the Company recognized revenue of $1 million and $6 million, respectively, related to performance obligations satisfied prior to 2022.

Performance Obligations

The Company has contracts for which performance obligations have not been satisfied as of September 30, 2022 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 (‘ASC 606’), the Company has elected not to disclose the remaining performance obligations when one or both of the following circumstances apply:

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 2022				2023				2024 onward				Total
Revenue expected to be recognized on contracts as of September 30, 2022		$	181			$	695			$	900			$	1,776

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 September 30, 2022 have been excluded from the table above.

Note 5 — Segment Information

WTW has two reportable operating segments or business areas:

Health, Wealth & Career (‘HWC’)

Risk & Broking (‘R&B’)

WTW’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 September 30, 2022 and 2021. The prior year information has been retrospectively adjusted to conform to the current year presentation.

		Three Months Ended September 30,
		HWC								R&B								Total
		2022				2021				2022				2021				2022				2021
Segment revenue		$	1,162			$	1,168			$	765			$	787			$	1,927			$	1,955
Segment operating income		$	236			$	241			$	105			$	138			$	341			$	379

The following table presents segment revenue and segment operating income for our reportable segments for the nine months ended September 30, 2022 and 2021. The prior year information has been retrospectively adjusted to conform to the current year presentation.

		Nine Months Ended September 30,
		HWC								R&B								Total
		2022				2021				2022				2021				2022				2021
Segment revenue		$	3,565			$	3,580			$	2,508			$	2,596			$	6,073			$	6,176
Segment operating income		$	710			$	701			$	465			$	545			$	1,175			$	1,246

The following table presents reconciliations of the information reported by segment to the Company’s condensed consolidated statements of comprehensive income amounts reported for the three and nine months ended September 30, 2022 and 2021.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Revenue:
Total segment revenue		$	1,927			$	1,955			$	6,073			$	6,176
Divested businesses (i)			—				8				—				68
Reimbursable expenses and other			26				10				71				48
Revenue		$	1,953			$	1,973			$	6,144			$	6,292
Total segment operating income		$	341			$	379			$	1,175			$	1,246
Divested businesses (i)			—				(20	)			—				(49	)
Impairment (ii)			—				—				(81	)			—
Amortization			(71	)			(85	)			(239	)			(285	)
Restructuring costs			(9	)			—				(71	)			—
Transaction and transformation, net (iii)			(50	)			952				(108	)			877
Unallocated, net (iv)			(57	)			(95	)			(206	)			(277	)
Income from operations			154				1,131				470				1,512
Interest expense			(54	)			(50	)			(154	)			(161	)
Other income, net			85				105				205				617
Income from continuing operations before income taxes		$	185			$	1,186			$	521			$	1,968

(i)

Represents the revenue and income from operations of certain Investment, Risk and Reinsurance businesses which were divested in 2021 and not classified as discontinued operations.

(ii)

Represents the impairment related to the net assets of our Russian business that are held outside of our Russian entities (see Note 3 — Acquisitions and Divestitures for further information).

(iii)

In 2022, in addition to legal fees and other transaction costs, includes primarily consulting fees related to the Transformation program (see Note 6 — Restructuring Costs). In 2021, includes the $1 billion income receipt related to the termination of, and fees related to, our then-proposed Aon combination.

(iv)

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.

Note 6 — Restructuring Costs

In the fourth quarter of 2021, the Company initiated a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align its real estate footprint to its new ways of working. During the third quarter of 2022, we revised the expected costs and savings under the program and we now expect the program to generate annual cost savings in excess of $360 million by the end of 2024. The program is expected to incur cumulative costs of approximately $630 million and capital expenditures of approximately $270 million, for a total investment of $900 million. The main categories of charges will be in the following four areas:

Real estate rationalization — includes costs to align the real estate footprint to the new ways of working (hybrid work) and includes breakage fees and the impairment of right-of-use assets and other related leasehold assets.

Technology modernization — these charges are incurred in moving to common platforms and technologies, including migrating certain platforms and applications to the cloud. This category will include the impairment of technology assets that are duplicative or no longer revenue-producing, as well as costs for technology investments that do not qualify for capitalization.

Process optimization — these costs will be incurred in the right-shoring strategy and automation of our operations, which will include optimizing resource deployment and appropriate colleague alignment. These costs will include process and organizational design costs, severance and separation-related costs and temporary retention costs.

Other — other costs not included above including fees for professional services, other contract terminations not related to the above categories and supplier migration costs.

Certain costs under the Transformation program are accounted for under ASC 420, Exit or Disposal Cost Obligation, and are included as restructuring costs in the condensed consolidated statements of comprehensive income. Other costs incurred under the Transformation program are included in transaction and transformation, net and were $42 million and $73 million for the three and nine months ended September 30, 2022, respectively. An analysis of total restructuring costs incurred under the Transformation program by category and by segment and corporate functions, from commencement to September 30, 2022, is as follows:

		HWC				R&B				Corporate				Total
2021
Real estate rationalization		$	—			$	—			$	19			$	19
Technology modernization			—				5				—				5
Process optimization			—				—				—				—
Other			—				—				2				2
2022
Real estate rationalization			—				—				53				53
Technology modernization			—				1				16				17
Process optimization			1				—				—				1
Other			—				—				—				—
Total
Real estate rationalization			—				—				72				72
Technology modernization			—				6				16				22
Process optimization			1				—				—				1
Other			—				—				2				2
Total		$	1			$	6			$	90			$	97

A rollforward of the liability associated with cash-based charges related to restructuring costs associated with the Transformation program is as follows:

		Real estate rationalization				Technology modernization				Process optimization				Other				Total
Balance at October 1, 2021		$	—			$	—			$	—			$	—			$	—
Charges incurred			—				—				—				2				2
Cash payments			—				—				—				(1	)			(1	)
Balance at December 31, 2021			—				—				—				1				1
Charges incurred			15				—				1				—				16
Cash payments			(12	)			—				(1	)			(1	)			(14	)
Balance at September 30, 2022		$	3			$	—			$	—			$	—			$	3

Note 7 — Income Taxes

Provision for income taxes for the three and nine months ended September 30, 2022 was $1 million and $63 million, respectively, compared to $267 million and $386 million for the three and nine months ended September 30, 2021, respectively. The effective tax rates were 0.7% and 12.1% for the three and nine months ended September 30, 2022, respectively, and 22.5% and 19.6% for the three and nine months ended September 30, 2021, respectively. These effective tax rates are calculated using extended values from the Company’s condensed consolidated statements of comprehensive income and are, therefore, more precise tax rates than can be calculated from rounded values. The prior-year quarter’s effective tax rate was higher due to the tax expense associated with the income receipt related to the termination of our then-proposed combination with Aon. Additionally, the current-quarter’s effective tax rate includes discrete tax benefits related to amending the Company’s U.S. federal and state tax returns to change certain elections available under the Coronavirus Aid, Relief, and Economic Security (‘CARES’) Act as well as excess tax benefits on executive share-based compensation.

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, the Company has not provided taxes on cumulative earnings of its subsidiaries that have been reinvested indefinitely. As a result of its plans to restructure or distribute accumulated earnings of certain foreign operations, the Company has recorded an estimate of non-US withholding and state income taxes. However, the Company asserts that the historical cumulative earnings of its other subsidiaries are reinvested indefinitely and therefore does 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. It has liabilities for uncertain tax positions under ASC 740, Income Taxes, of $31 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 $4 million, excluding interest and penalties.

Note 8 — Goodwill and Other Intangible Assets

Goodwill

The components of goodwill are outlined below for the nine months ended September 30, 2022. The prior year segment information has been retrospectively adjusted to conform to the current year presentation.

		HWC				R&B				Total
Balance at December 31, 2021:
Goodwill, gross		$	7,904			$	2,771			$	10,675
Accumulated impairment losses			(130	)			(362	)			(492	)
Goodwill, net - December 31, 2021			7,774				2,409				10,183
Goodwill acquired			—				103				103
Goodwill disposals			—				(18	)			(18	)
Foreign exchange			(62	)			(117	)			(179	)
Balance at September 30, 2022:
Goodwill, gross			7,842				2,739				10,581
Accumulated impairment losses			(130	)			(362	)			(492	)
Goodwill, net - September 30, 2022		$	7,712			$	2,377			$	10,089

Other Intangible Assets

The following table reflects changes in the net carrying amounts of the components of finite-lived intangible assets for the nine months ended September 30, 2022:

		Client relationships				Software				Trademark and trade name				Other				Total
Balance at December 31, 2021:
Intangible assets, gross		$	3,794			$	742			$	1,039			$	102			$	5,677
Accumulated amortization			(2,118	)			(701	)			(257	)			(46	)			(3,122	)
Intangible assets, net - December 31, 2021			1,676				41				782				56				2,555
Intangible assets acquired			60				4				1				—				65
Intangible asset disposals			(1	)			—				—				(5	)			(6	)
Amortization			(173	)			(27	)			(32	)			(7	)			(239	)
Foreign exchange			(57	)			—				(2	)			(2	)			(61	)
Balance at September 30, 2022:
Intangible assets, gross			3,691				710				1,035				95				5,531
Accumulated amortization			(2,186	)			(692	)			(286	)			(53	)			(3,217	)
Intangible assets, net - September 30, 2022		$	1,505			$	18			$	749			$	42			$	2,314

The weighted-average remaining life of amortizable intangible assets at September 30, 2022 was 12.6 years.

The table below reflects the future estimated amortization expense for amortizable intangible assets for the remainder of 2022 and for subsequent years:

		Amortization
Remainder of 2022		$	70
2023			257
2024			224
2025			204
2026			197
Thereafter			1,362
Total		$	2,314

Note 9 — Derivative Financial Instruments

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 11 — Fair Value Measurements and Note 17 — 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 the entity with such operations 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 September 30, 2022 and December 31, 2021 had total notional amounts of $127 million and $155 million, respectively, and had a net liability fair value of $9 million and a net asset fair value of $3 million, respectively.

At September 30, 2022, the Company estimates, based on current exchange rates, there will be $6 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 September 30, 2022, 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 and nine months ended September 30, 2022 and 2021 are below. Amounts pertaining to the ineffective portion of hedging instruments and those excluded from effectiveness testing were immaterial for the three and nine months ended September 30, 2022 and 2021.

		(Loss)/gain recognized in OCI (effective element)
		Three months ended September 30,								Nine months ended September 30,
		2022				2021				2022				2021
Forward exchange contracts		$	(6	)		$	(2	)		$	(12	)		$	3

Location of (loss)/gain reclassified from Accumulated OCL into income (effective element)		(Loss)/gain reclassified from Accumulated OCL into income (effective element)
		Three months ended September 30,								Nine months ended September 30,
		2022				2021				2022				2021
Revenue		$	—			$	(1	)		$	1			$	(3	)
Salaries and benefits			(2	)			2				(1	)			5
Discontinued operations			—				—				—				3
		$	(2	)		$	1			$	—			$	5

The Company engages in intercompany borrowing and lending between subsidiaries, primarily through its in-house banking operations which give rise to foreign exchange exposures. The Company mitigates these risks through the use of short-term foreign currency forward and swap transactions that offset the underlying exposure created when the borrower and lender have different functional currencies. These derivatives are not generally designated as hedging instruments and at September 30, 2022 and December 31, 2021, we had notional amounts of $2.2 billion and $2.9 billion, respectively. At September 30, 2022 and December 31, 2021, we had a net liability fair value of $15 million and a net asset fair value of $15 million, respectively. Such derivatives typically mature within three months.

The effects of these derivatives that have not been designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2022 and 2021 are as follows (see Note 16 — Other Income, Net for the net foreign currency impact on the Company’s condensed consolidated statements of comprehensive income which includes the results of the offset of underlying exposures):

				(Loss)/gain recognized in income
				Three Months Ended September 30,								Nine Months Ended September 30,
Derivatives not designated as hedging instruments:		Location of (loss)/gain recognized in income		2022				2021				2022				2021
Forward exchange contracts		Other income, net		$	(182	)		$	(7	)		$	(208	)		$	(36	)

Note 10 — Debt

Current debt consists of the following:

		September 30, 2022				December 31, 2021
2.125% senior notes due 2022 (i)		$	—			$	613
4.625% senior notes due 2023			250				—
		$	250			$	613

Long-term debt consists of the following:

		September 30, 2022				December 31, 2021
Revolving $1.5 billion credit facility		$	—			$	—
4.625% senior notes due 2023			—				249
3.600% senior notes due 2024			648				648
4.400% senior notes due 2026			547				546
4.650% senior notes due 2027			744				—
4.500% senior notes due 2028			597				597
2.950% senior notes due 2029			726				726
6.125% senior notes due 2043			271				271
5.050% senior notes due 2048			395				395
3.875% senior notes due 2049			542				542
		$	4,470			$	3,974

(i)

Notes issued in Euro (€540 million).

Senior Notes

On May 19, 2022, the Company, together with its wholly-owned subsidiary, Willis North America Inc. as issuer, completed an offering of $750 million aggregate principal amount of 4.650% senior notes due 2027 (‘2027 senior notes’). The effective interest rate of the 2027 senior notes is 4.79%, which includes the impact of the discount upon issuance. The 2027 senior notes will mature on June 15, 2027. Interest on the 2027 senior notes accrues from May 19, 2022 and will be paid in cash on June 15 and December 15 of each year, commencing on December 15, 2022. The net proceeds from this offering, after deducting the underwriting discount and estimated offering expenses, were approximately $744 million and were used to fully repay the €540 million ($582 million on the date of repayment) aggregate principal amount of the 2.125% Senior Notes due 2022 and related accrued interest, and for general corporate purposes.

At September 30, 2022 and December 31, 2021, we were in compliance with all financial covenants.

Note 11 — Fair Value Measurements

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 September 30, 2022 and December 31, 2021:

				Fair Value Measurements on a Recurring Basis at September 30, 2022
		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
		Fiduciary assets			128				—				—				128
Derivatives:
Derivative financial instruments (i)		Prepaid and other current assets and other non-current assets		$	—			$	3			$	—			$	3
Liabilities:
Contingent consideration:
Contingent consideration (ii)		Other current liabilities and other non-current liabilities		$	—			$	—			$	54			$	54
Derivatives:
Derivative financial instruments (i)		Other current liabilities and other non-current liabilities		$	—			$	27			$	—			$	27

				Fair Value Measurements on a Recurring Basis at December 31, 2021
		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		$	9			$	—			$	—			$	9
		Fiduciary assets			152				—				—				152
Certificates of deposit/term deposits		Prepaid and other current assets and other non-current assets			200				—				—				200
Derivatives:
Derivative financial instruments (i)		Prepaid and other current assets and other non-current assets		$	—			$	18			$	—			$	18
Liabilities:
Contingent consideration:
Contingent consideration (ii)		Other current liabilities and other non-current liabilities		$	—			$	—			$	51			$	51
Derivatives:
Derivative financial instruments (i)		Other current liabilities and other non-current liabilities		$	—			$	—			$	—			$	—

(i)

See Note 9 — 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 in our material contingent consideration calculations were 11.99% and 11.92% at September 30, 2022 and December 31, 2021, respectively. The range of these discount rates was 3.53% - 13.80% at September 30, 2022. 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)		September 30, 2022
Balance at December 31, 2021		$	51
Obligations assumed			22
Payments			(22	)
Realized and unrealized losses (i)			5
Foreign exchange			(2	)
Balance at September 30, 2022		$	54

(i)

Realized and unrealized losses include accretion and adjustments to contingent consideration liabilities, which are included within Interest expense and Other operating expenses, respectively, on the condensed consolidated statements of comprehensive income.

There were no significant transfers to or from Level 3 in the nine months ended September 30, 2022.

Fair value information about financial instruments not measured at fair value

The following tables present our liabilities not measured at fair value on a recurring basis at September 30, 2022 and December 31, 2021:

		September 30, 2022								December 31, 2021
		Carrying Value				Fair Value				Carrying Value				Fair Value
Assets:
Long-term note receivable		$	62			$	58			$	69			$	70
Liabilities:
Current debt		$	250			$	249			$	613			$	616
Long-term debt		$	4,470			$	4,017			$	3,974			$	4,453

The carrying value of our revolving credit facility approximates its fair value. The fair values above, which exclude accrued interest, 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 and long-term note receivable are considered Level 2 financial instruments as they are corroborated by observable market data.

Note 12 — Retirement Benefits

Defined Benefit Plans and Post-retirement Welfare Plans

WTW 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, Switzerland and Ireland. Together, these disclosed funded and unfunded plans represent 99% of WTW’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 tables set forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension and PRW plans for the three and nine months ended September 30, 2022 and 2021:

		Three Months Ended September 30,
		2022																2021
		U.S.				U.K.				Other				PRW				U.S.				U.K.				Other				PRW
Service cost		$	20			$	2			$	6			$	—			$	19			$	4			$	6			$	—
Interest cost			29				18				4				—				24				14				3				—
Expected return on plan assets			(83	)			(34	)			(10	)			—				(79	)			(42	)			(9	)			—
Settlement			3				1				—				—				—				1				2				—
Amortization of net loss			4				7				—				—				8				7				1				1
Amortization of prior service credit			—				(3	)			1				—				—				(4	)			1				(1	)
Net periodic benefit (income)/cost		$	(27	)		$	(9	)		$	1			$	—			$	(28	)		$	(20	)		$	4			$	—

		Nine Months Ended September 30,
		2022																2021
		U.S.				U.K.				Other				PRW				U.S.				U.K.				Other				PRW
Service cost		$	58			$	9			$	17			$	—			$	59			$	13			$	18			$	—
Interest cost			88				54				12				1				71				42				9				1
Expected return on plan assets			(248	)			(110	)			(29	)			—				(233	)			(128	)			(28	)			—
Settlement			3				1				—				—				1				2				2				—
Amortization of net loss			11				22				2				1				30				21				4				2
Amortization of prior service credit			—				(9	)			1				(2	)			—				(13	)			1				(3	)
Net periodic benefit (income)/cost		$	(88	)		$	(33	)		$	3			$	—			$	(72	)		$	(63	)		$	6			$	—

Employer Contributions to Defined Benefit Pension Plans

The Company did not make any contributions to its U.S. plans during the nine months ended September 30, 2022 and currently does not anticipate making contributions over the remainder of the fiscal year. The Company made contributions of $23 million to its U.K. plans for the nine months ended September 30, 2022 and anticipates making additional contributions of $13 million for the remainder of the fiscal year. The Company made contributions of $22 million to its other plans for the nine months ended September 30, 2022 and anticipates making additional contributions of $2 million for the remainder of the fiscal year.

Defined Contribution Plans

The Company made contributions to its defined contribution plans of $34 million and $114 million during the three and nine months ended September 30, 2022, respectively, and $36 million and $118 million during the three and nine months ended September 30, 2021, respectively.

Note 13 — Leases

The following tables present lease costs recorded on our condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2022 and 2021:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Finance lease cost:
Amortization of right-of-use assets		$	—			$	—			$	1			$	1
Interest on lease liabilities			1				1				2				2
Operating lease cost			35				43				130				134
Short-term lease cost			—				—				—				1
Variable lease cost			13				13				47				39
Sublease income			(3	)			(6	)			(12	)			(16	)
Total lease cost, net		$	46			$	51			$	168			$	161

The total lease cost is recognized in different locations in our condensed consolidated statements of comprehensive income. Amortization of the finance lease right-of-use 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, with the exception of $2 million and $33 million, respectively, incurred during the three and nine months ended September 30, 2022 that was included in restructuring costs (see Note 6 — Restructuring Costs) that primarily related to the acceleration of amortization of certain abandoned right-of-use assets and the payment of early termination fees. There are no significant lease costs that have been included as discontinued operations in the condensed consolidated statements of comprehensive income during the three and nine months ended September 30, 2022 and 2021.

Note 14 — Commitments and Contingencies

Indemnification Agreements

WTW 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, including the disposal of Willis Re. 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. However, 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 expect the impact of claims or demands not described below to be immaterial 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 15 — Supplementary Information for Certain Balance Sheet Accounts for the amounts accrued at September 30, 2022 and December 31, 2021 in the condensed consolidated balance sheets.

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, when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. The contingent liabilities recorded are primarily developed actuarially. Litigation is subject to many factors which are difficult to predict so there can be no assurance that in the event of a material unfavorable result in one or more claims, we will not incur material costs.

Note 15 — 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:

		September 30, 2022				December 31, 2021
Prepayments and accrued income		$	112			$	137
Short-term investments			—				200
Deferred contract costs			63				74
Derivatives and investments			20				35
Deferred compensation plan assets			13				19
Corporate income and other taxes			198				82
Acquired renewal commissions receivable			9				11
Other current assets			61				54
Total prepaid and other current assets		$	476			$	612

Deferred revenue and accrued expenses consist of the following:

		September 30, 2022				December 31, 2021
Accounts payable, accrued liabilities and deferred income		$	876			$	898
Accrued discretionary and incentive compensation			524				811
Accrued vacation			173				145
Other employee-related liabilities			67				72
Total deferred revenue and accrued expenses		$	1,640			$	1,926

Other current liabilities consists of the following:

		September 30, 2022				December 31, 2021
Dividends payable		$	102			$	112
Income and other taxes payable			153				278
Interest payable			30				55
Deferred compensation plan liabilities			12				49
Contingent and deferred consideration on acquisitions			13				24
Accrued retirement benefits			58				65
Derivatives			25				—
Payroll and other benefits-related liabilities			220				230
Third-party commissions			128				101
Other current liabilities			110				101
Total other current liabilities		$	851			$	1,015

Provision for liabilities consists of the following:

		September 30, 2022				December 31, 2021
Claims, lawsuits and other proceedings		$	306			$	311
Other provisions			59				64
Total provision for liabilities		$	365			$	375

Other non-current liabilities consists of the following:

		September 30, 2022				December 31, 2021
Deferred compensation plan liability		$	75			$	109
Contingent and deferred consideration on acquisitions			41				27
Liabilities for uncertain tax positions			32				43
Finance leases			13				15
Other non-current liabilities			42				59
Total other non-current liabilities		$	203			$	253

Note 16 — Other Income, Net

Other income, net consists of the following:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Gain/(loss) on disposal of operations (i)		$	21			$	23			$	(11	)		$	380
Net periodic pension and postretirement benefit credits			64				79				204				227
Interest in earnings of associates and other investments			—				1				4				5
Foreign exchange (loss)/gain			(1	)			1				4				4
Other			1				1				4				1
Other income, net		$	85			$	105			$	205			$	617

(i)

For the nine months ended September 30, 2022, includes a $24 million non-cash revaluation gain related to an acquisition completed in stages.

Note 17 — 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 and nine months ended September 30, 2022 and 2021. 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
		2022				2021				2022				2021				2022				2021				2022				2021
Quarter-to-date activity:
Balance at June 30, 2022 and 2021, respectively		$	(794	)		$	(376	)		$	6			$	13			$	(1,698	)		$	(1,915	)		$	(2,486	)		$	(2,278	)
Other comprehensive (loss)/income before reclassifications			(240	)			(81	)			(5	)			(1	)			5				2				(240	)			(80	)
Loss/(gain) reclassified from accumulated other comprehensive loss (net of income tax benefit of $2 and $8, respectively)			—				—				1				(1	)			5				—				6				(1	)
Net current-period other comprehensive (loss)/income			(240	)			(81	)			(4	)			(2	)			10				2				(234	)			(81	)
Balance at September 30, 2022 and 2021, respectively		$	(1,034	)		$	(457	)		$	2			$	11			$	(1,688	)		$	(1,913	)		$	(2,720	)		$	(2,359	)
Year-to-date activity:
Balance at December 31, 2021 and 2020, respectively		$	(489	)		$	(400	)		$	11			$	9			$	(1,708	)		$	(1,968	)		$	(2,186	)		$	(2,359	)
Other comprehensive (loss)/income before reclassifications			(545	)			(101	)			(8	)			7				3				2				(550	)			(92	)
Loss/(gain) reclassified from accumulated other comprehensive loss (net of income tax benefit of $6 and $15, respectively) (iii)			—				44				(1	)			(5	)			17				53				16				92
Net current-period other comprehensive (loss)/income			(545	)			(57	)			(9	)			2				20				55				(534	)			—
Balance at September 30, 2022 and 2021, respectively		$	(1,034	)		$	(457	)		$	2			$	11			$	(1,688	)		$	(1,913	)		$	(2,720	)		$	(2,359	)

(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 9 — 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 12 — Retirement Benefits). These components are included in Other income, net in the accompanying condensed consolidated statements of comprehensive income.

(iii)

Includes reclassifications in 2021 of $44 million and $31 million of foreign currency translation and defined pension and post-retirement benefit costs, respectively, attributable to the gain on disposal of our Miller business (see Note 3 — Acquisitions and Divestitures). The net gain on disposal is included in Other income, net in the accompanying condensed consolidated statements of comprehensive income.

Note 18 — Earnings Per Share

Basic and diluted earnings per share from continuing operations attributable to WTW and discontinued operations, net of tax are calculated by dividing net income from continuing operations attributable to WTW and discontinued operations, net of tax, respectively, 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 both September 30, 2022 and 2021, there were 0.6 million restricted performance-based stock units outstanding. At September 30, 2022, there were 0.4 million restricted time-based stock units outstanding; restricted time-based stock units were immaterial at September 30, 2021. There were no performance-based options outstanding at September 30, 2022; at September 30, 2021, there were 0.3 million performance-based options outstanding. The Company’s time-based share options were immaterial at September 30, 2022; there were 0.1 million time-based share options outstanding at September 30, 2021.

Basic and diluted earnings per share are as follows:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Income from continuing operations		$	184			$	919			$	458			$	1,582
Less: income attributable to non-controllable interests			(2	)			(4	)			(10	)			(9	)
Income from continuing operations attributable to WTW		$	182			$	915			$	448			$	1,573
Income/(loss) from discontinued operations, net of tax		$	8			$	(12	)		$	(27	)		$	247
Basic average number of shares outstanding			110				129				113				130
Dilutive effect of potentially issuable shares			1				—				1				—
Diluted average number of shares outstanding			111				129				114				130
Basic earnings per share from continuing operations attributable to WTW		$	1.65			$	7.10			$	3.95			$	12.14
Dilutive effect of potentially issuable shares			—				(0.02	)			—				(0.04	)
Diluted earnings per share from continuing operations attributable to WTW		$	1.65			$	7.08			$	3.95			$	12.10
Basic earnings/(loss) per share from discontinued operations, net of tax		$	0.07			$	(0.09	)		$	(0.24	)		$	1.90
Dilutive effect of potentially issuable shares			—				—				—				—
Diluted earnings/(loss) per share from discontinued operations, net of tax		$	0.07			$	(0.09	)		$	(0.24	)		$	1.90

For both the three and nine months ended September 30, 2022, 0.3 million restricted stock units were not included in the computation of the dilutive effect of potentially issuable shares because their effect was anti-dilutive. For the three and nine months ended September 30, 2021, 0.4 million and 0.3 million restricted stock units, respectively, were not included in the computation of the dilutive effect of potentially issuable shares because their effect was anti-dilutive. There were no anti-dilutive options for the three and nine months ended September 30, 2022 and 2021.

Note 19 — Supplemental Disclosures of Cash Flow Information

Supplemental disclosures regarding cash flow information are as follows:

		Nine months ended September 30,
		2022				2021
Supplemental disclosures of cash flow information:
Cash and cash equivalents		$	1,496			$	2,162
Fiduciary funds (included in fiduciary assets)			3,170				3,963
Cash and cash equivalents and fiduciary funds (included in current assets held for sale)			5				53
Other restricted cash (included in prepaids and other current assets)			—				6
Total cash, cash equivalents and restricted cash		$	4,671			$	6,184
(Decrease)/increase in cash, cash equivalents and other restricted cash		$	(2,904	)		$	149
Increase/(decrease) in fiduciary funds			174				(167	)
Total		$	(2,730	)		$	(18	)

Revision of previously issued financial statements - During the nine months ended September 30, 2022, to reflect the guidance on restricted cash presentation in FASB ASC 230, Statement of Cash Flows, WTW corrected the classification of its fiduciary funds balances, in the amounts shown in the table above, on our condensed consolidated statements of cash flows, by including these amounts in the total cash, cash equivalents and restricted cash amounts held at each balance sheet date. As a result, cash, cash equivalents and restricted cash balances of $2.2 billion and $2.1 billion at September 30, 2021 and December 31, 2020, respectively, have been revised to $6.2 billion and $6.3 billion, respectively. Additionally, the effect of exchange rate changes on cash, cash equivalents and restricted cash has been updated to include the effect of exchange rate changes on the fiduciary funds balances.

Prior to this correction, the changes in fiduciary funds were presented in fiduciary assets and liabilities on a gross basis in the cash flows from operating activities, where the amounts fully offset each period. In the current presentation, an additional line item, net

(payments)/proceeds from fiduciary funds held for clients, has been included within cash flows from financing activities to represent the change in fiduciary funds balances during the periods. The remaining fiduciary assets and fiduciary liabilities, in equal and offsetting amounts, are no longer presented in the cash flows from operating activities. There was no impact to the total cash flows from operating activities as a result of these changes.